Case Summary (G.R. No. L-3820)
Factual Background
• Late October 1949, RPA purchased the Buenavista and Tambobong Estates for ₱5 million, although prior options and court deposits suggested a lower lawful price.
• Of the ₱1.5 million paid to Ernest H. Burt for his alleged interests, petitioner received two checks, depositing them in Burt’s Philippine National Bank account.
• He then issued one ₱500,000 check to Associated Estates, Inc., and cashed ₱440,000 in currency, purportedly delivering it to an unnamed “representative of Burt.”
Senate Investigation and Contempt Proceedings
• February 27, 1950: Senate Resolution No. 8 established a Special Committee empowered to subpoena witnesses, documents, and determine fairness and propriety of the estates deal.
• Arnault appeared, asserted privilege, and declined to identify the recipient of the ₱440,000 or explain its disposition.
• May 15, 1950: The Senate, through a contempt resolution, summoned Arnault before the bar, propounded questions about the name of the person to whom he delivered the ₱440,000, and, upon his refusal, ordered his commitment to New Bilibid Prison until he “purged the contempt.”
• Senate Resolution No. 16 directed the Special Committee to continue examining Arnault on that specific point.
Constitutional and Jurisprudential Basis of Legislative Inquiry
• Legislative power is vested in Congress (1935 Constitution, Art. VI, Sec. 1), with each House entitled to determine its rules and punish for contempt (Art. VI, Sec. 10).
• Although the Constitution does not explicitly grant power to punish nonmembers, it is implied as an “essential and appropriate auxiliary” to effective legislation (McGrain v. Daugherty, 273 U.S. 135).
• A witness may be compelled to answer questions pertinent to the subject of a valid inquiry, subject only to the constitutional privilege against self-incrimination (Re Chapman, 166 U.S. 661).
Issues Presented
- Whether the Senate’s question identifying the recipient of the ₱440,000 was material to its investigative jurisdiction and legislative purpose.
- Whether the Senate could lawfully extend Arnault’s confinement for contempt beyond the adjournment of the session in which he was committed.
- Whether Arnault validly invoked the constitutional privilege against self-incrimination in refusing to answer.
Analysis
Materiality of the Question
- The Senate’s Resolution No. 8 expressly tasked the Committee with determining parties responsible for the alleged irregular expenditure of public funds.
- Identifying the recipient of the ₱440,000 was directly pertinent to that mandate, irrespective of any specific pending legislation.
- The Court found the question relevant to the subject of inquiry; legislative bodies need not demonstrate a direct link between every question and a specific bill.
Duration of Contempt Confinement
- The Senate is a “continuing body” whose membership and investigative committees survive inter-session adjournments.
- Under McGrain v. Daugherty, select committees may continue in recess, and contempt powers persist until the functions
Case Syllabus (G.R. No. L-3820)
Facts of the Underlying Transaction
- In late October 1949 the Rural Progress Administration (RPA) purchased two estates:
- Buenavista Estate for ₱4,500,000
- Tambobong Estate for ₱500,000
- Of the Buenavista price, ₱1,000,000 was paid to Ernest H. Burt through Associated Estates, Inc., represented by Jean L. Arnault.
- Of the Tambobong price, ₱500,000 was paid to the same Burt through North Manila Development Co., Inc., also represented by Arnault.
- Buenavista’s background:
- Originally owned by San Juan de Dios Hospital; Government held a 25-year lease from 1939 with an option to purchase for ₱3,000,000.
- The Government tendered ₱3,000,000 plus accrued rentals of ₱324,000 in 1944 and remained in possession.
- On June 29, 1946, the Hospital sold Buenavista to Burt for ₱5,000,000 (₱10,000 down; ₱500,000 due in one year; installments of ₱500,000). Burt defaulted after the down payment.
- Tambobong’s background:
- Originally owned by the Philippine Trust Company; sold to Burt on May 14, 1946, for ₱1,200,000 (₱10,000 down; ₱90,000 within nine months; ten annual installments of ₱110,000). Burt paid only the down payment.
- On September 4, 1947, the Philippine Trust Company sold Tambobong to the RPA for ₱750,000.
- On February 5, 1948, RPA demanded cancellation of Burt’s contract; the Court of First Instance of Rizal ordered title cancellation and issuance of a new title in RPA’s name; Burt appealed.
Senate Resolution No. 8 and Committee Mandate
- February 27, 1950: The Senate adopted Resolution No. 8 creating a five-member Special Committee to investigate the Buenavista and Tambobong deals.
- Committee duties:
- Determine whether the purchase was honest, valid, proper, and the price fair and just.
- Identify parties responsible and any other relevant facts.
- Committee powers:
- Conduct public hearings.
- Issue subpoenas and subpoenas duces tecum for witnesses and documents.
- Require cooperation from any government official or employee.
- Timeline: Committee to report within two weeks of adoption.
Arnault’s Testimony Before the Special Committee
- October 29, 1949 transactions:
- Arnault received two checks totaling ₱1,500,000 payable to Burt; deposited both in a new Philippine National Bank account in Burt’s name.
- Same date, Arnault drew two checks on that account:
- ₱500,000 transferred to the account of Associated Agencies, Inc.
- ₱440,000 payable to “cash,” which he cashed personally.
- Disposition of the ₱440,000:
- Turned over to “a certain person,” described merely as a representative of Burt.
- No receipt was requested or given.
- Arnault claimed he acted on Burt’s verbal instructions given in 1946.
- Refusal to identify the recipient:
- Initially invoked privilege against self-incrimination and privacy of dealings.
- Under