Title
People vs. Villasor
Case
G.R. No. L-26828
Decision Date
Nov 28, 1969
Search warrants issued for Dacay's premises led to seizure of unrelated items; Supreme Court ruled warrants valid but execution flawed, ordered return of goods, and dismissed petitions.
search and seizure
destruction of seized goods
return of seized properties

Case Summary (G.R. No. L-26828)

Factual Background of the Searches and Seizures

On January 15, 1966, respondent Judge Villasor issued four search warrants directing NBI agents to search specified locations and to take possession of fraudulently imported goods and related documents. The warrants covered: (a) an unnumbered warehouse in Lapu-Lapu Street, Cebu City, and goods and documents pertinent to fraudulent importations; (b) an unnumbered residence of Ernesto Dacay in N. Escario Street, Cebu City, and items similar in character; and (c) and (d) two warrants covering the premises “No. 292-294 (DACAY ENTERPRISES)” in Magallanes Street, Cebu City—one targeting fraudulently imported goods and documents, and the other targeting books and papers (including journals, ledgers, and sales and purchase invoices) described as containing entries allegedly “at variance with each other” in relation to violations of the NIRC provisions.

The NBI agents served the warrants the same day. As later testified, however, they allegedly failed to seize the exact goods and articles specifically mentioned in the warrants. Instead, they carted away goods different from those described, along with assorted documents and books, which were inventoried and receipted. By a court order dated July 9, 1966, the seized items initially remained with the NBI but were then turned over to the Clerk of Court.

A fifth search warrant, issued by the Municipal Judge of Mandawe, Cebu, directed NBI Agent Ricardo P. Robles, Jr. to search Dacay’s bodegas in Barrio Tipolo, Mandawe, Cebu. This search resulted in the seizure of several bales of cloth alleged to be remnants. After examination by customs authorities and payment of customs duties, the goods were released to Dacay. They were later reexamined at Pier 2 of the Port of Cebu, then brought to Cebu PC Headquarters for storage. Later, under bond, they were ordered returned to Dacay. Dacay was directed to leave samples of the contents of each bale with a representative of the Deputy Clerk of Court.

The Mandawe Mandamus Case and the Final Nullification of a Search Warrant

In connection with the Mandawe search, Dacay filed Civil Case R-9288 in the Court of First Instance of Cebu, denominated as a mandamus case (Ernesto Dacay v. Alejandro E. Mendoza, etc., et al.). Dacay sought the return of the goods seized by Agent Robles and claimed the search warrant was null and void. After the Mandawe municipal judge rebuffed his position, he pursued the mandamus suit. On May 28, 1969, Judge Alfredo C. Laya of the Cebu Court of First Instance held that the Mandawe search warrant did not describe with particularity the things to be seized and declared the warrant null and void. The Court noted that this judgment became final because no appeal was taken.

Criminal Prosecution and the Outcome Relevant to Seized Books and Records

From the Cebu City seizures, Bureau of Internal Revenue and Bureau of Customs agents examined the seized goods and documents and recommended prosecution. Ultimately, the only criminal complaint that reached the trial court was one filed by the Bureau of Internal Revenue for violation of Section 336 in relation to Section 355 of the National Internal Revenue Code—Criminal Case V-10839, entitled People of the Philippines v. Ernesto Dacay, Accused, assigned to Judge Santiago O. Tanada.

The information filed on January 27, 1966 alleged that Dacay willfully kept records and subsidiary books of accounts in Chinese characters without attaching a true and complete translation into English, Spanish, or a native dialect, and that he made entries in Chinese characters materially variant from corresponding entries in other books or records written in English, Spanish, or a native dialect. On August 15, 1969, the trial court acquitted Dacay in Criminal Case V-10839.

In parallel, Dacay sought to nullify the Cebu City search warrants and to recover the seized goods, books, and documents. He filed a motion on January 26, 1966 in an unnumbered criminal case, then amended it on March 18, 1966 to stop the NBI, the State Prosecutor, the City Fiscal, and the Commissioners of Internal Revenue and Customs from using the seized items as evidence. Dacay maintained that the seized items were different from those described in the warrants.

Trial Court Resolution on the Return of Seized Items

After hearing on the People’s opposition, the Court of First Instance issued an order on July 25, 1966. Its dispositive portion denied in the main the amended motion to declare the search and seizure illegal and to return the goods and documents seized. It nevertheless ordered the return of specified items, with an exception for articles belonging to third parties or not being the ones described in the warrant. The order directed the searching officers and their successors to return immediately the articles described in particular inventory items identified in the record—items in Exhibits A (and Exhibit 6-A), T-5, and T-2—which corresponded to categories of goods, books, and documents seized from specified locations.

The People appealed to the Court of Appeals from the July 25, 1966 order “insofar as” it required the return of the listed items. The Court of Appeals docketed the case as CA-G.R. 07473-Cr. Dacay later sought reconsideration and then new trial. The trial court granted Dacay’s motion for new trial by issuing an order on September 22, 1966, requiring the custodians of certain documents to bring them for examination at scheduled hearings.

Failing to obtain reconsideration, the People pursued a petition for certiorari and prohibition with prayer for preliminary injunction, leading the Supreme Court to issue a temporary restraining order on November 17, 1966 in what became G.R. No. L-26828.

Parties’ Position and Grounds for Dismissal

While the People’s petitions proceeded, Dacay moved on August 19, 1969 to dismiss both cases on the ground that the issues had become moot and academic. He relied mainly on (a) his acquittal in Criminal Case V-10839, and (b) the final judgment in Civil Case R-9288 nullifying the Mandawe search warrant. He further asserted that the goods seized under the Cebu City warrants had been destroyed by a fire that gutted the Constabulary bodega in Cebu City.

The Solicitor General opposed the dismissal. The Supreme Court therefore had to decide both petitions and rule on the dismissal motion.

Disposition in G.R. No. L-29567: Mootness as to Goods Seized by Agent Aragon and Evidentiary Deficiency

G.R. No. L-29567 originated as an appeal by the People from the Court of Appeals affirmance “in toto” of the July 25, 1966 order directing return of specified items. The Supreme Court first focused on the items seized by NBI Agent Antonio Aragon. These were found in Exhibit A or Exhibit 6-A, described as an inventory of goods seized in the bodega of Dacay Enterprises on Lapu-Lapu Street, Cebu City. The inventory listed clothing materials, handkerchief cases, and men’s sock cases.

The Court held that the portion of G.R. No. L-29567 relating to Aragon’s goods had become moot and academic because the goods had been destroyed by the fire that razed the Constabulary bodega in Cebu City. The reasoning was straightforward: since the specified goods no longer existed, there was nothing remaining to discuss or return.

On the merits, the Supreme Court also treated as decisive the Court of Appeals finding that the People failed to establish even prima facie that the goods seized by Aragon were fraudulently imported goods brought in through any unlawful means. The appellate court had emphasized that there was “not even a single iota of evidence” showing the seized articles were imported, much less fraudulently imported. It invoked the presumption of innocence in the jurisdiction and placed the burden on the State, which the appellate court found did not meet.

The Supreme Court treated the Court of Appeals finding as binding and cited Moreno v. Ago Chi, 12 Phil. 439 for the rule that if the property is in no way connected with the commission of the offense at the termination of the trial, the court must order the officer in possession to return it to the defendant. It therefore dismissed G.R. No. L-29567, both for mootness as to the Aragon goods and for failure of proof as to illegality of the seized merchandise.

Disposition in G.R. No. L-26828: Lack of Continuing Justification for Retaining Documents, Given Acquittal, Non-Use as Evidence, and Unreasonable Delay

The Court then addressed G.R. No. L-26828, a special civil action for certiorari and prohibition filed by the People against respondent Judge Villasor, assailing the September 22, 1966 order granting Dacay’s new trial and the associated handling of the document custodians for continued examination.

The Supreme Court identified the documents whose return Dacay sought in the new trial. It distinguished the various exhibits:

Exhibits B, B-1, and C were inventories of books and documents seized by NBI Agent Salvador de Leon, allegedly for violation of Section 3602 of the Tariff and Customs Code. Exhibits 4-A to 4-H were inventories of papers and documents seized by Agent Sancho K. Chan, Jr., also allegedly for violations of Section 3602.

As to Exhibits P-1, P-2, and T-4, together with Exhibits T-2 and T-5, these were inventories of books and documents seized by Agent Chan, Jr. allegedly for violation of Section 336 in relation to Section 355 of the National Internal Revenue Code. Within these, the State sought to prevent the return of certain items, particularly Items 2, 3, and 5 of Exhibit T-5, described as three books of accounts written in Chinese.

The State argued that these documents would show there was no translation of the Chinese books into English, Spanish, or local dialect, thus supporting prosecution for violation of Section 336 in connection with Section 355. The Supreme Court rejected this argument because Dacay had already been prosecuted in Criminal Case V-10839 precisely in reference to the t

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