Composición MgAPO-5-2 (2EPH:100H 2 O)

- On May of 1946, the same Burt purchase from Philippine Trust Corporation, the Tambobong estate for P 1.2 million with a downpayment of P 10,000.00 and terms which are as generuous as those from San Juan de Dios. There was however no other payment received from Burt.

- The Philippine government, through the Rural Progress Administration, acquired this same property from its original owner for the sum of P 750,000 and subsequently instituted a notarial demand upon Burt for the resolution and cancellation of his contract of purchase with Philippine Trust for non payment. The Court of First Instance in this case

ordered the cancellation of Burt‘s title and the issuance of a new one under the name of Rural Progress Administration.

- For one reason or another, despite the fact the Philippine government already owned both the above estate, it again bought the same from Burt for a total consideration of P 5,000,000 (P 4.5 million for Buenavista and P 500,000 for Tambobong). The government paid initially P 1,000,000 for Buenavista and the full amount of P 500,000 for the Tambobong estate through two corporations acting as Burt‘s attorneys-in-fact. These two were represented in the trasaction by one and the same person, Jean L. Arnault.

- It was also brought out that the Rural Progress Administration was headed at that time by the Justice secretary who was at the same time Chairman of the Philippine National Bank, the institution that lent the funds to Rural Progress.

- The transactions resulted into a public outcry which led into the Philippine Senate adopting Resolution 8 which created a special committee to investigate the Buenavista and Tambobong Estates deal.

- The committee was tasked, among others, with determining:

a. the validity, honesty, propriety of the purchase b. the fairness of the purchase price

c. the parties involved/responsible for the deal

- During the public hearings of the Committee, various witnesses were called. Among them and apparently the most important was Jean Arnault, the person who represented Burt in the transactions.

- During the said hearing, Arnault confirmed receiving the money from the government and withdrawing, in cash, P 440,000 which he gave to someone on instruction of Burt. When asked to identify the person he gave the money to, he replied that he did not know his name despite the fact that he met the person on many occasions. When pressed to answer, he also said that answering the question might incriminate him. Based on this refusal, the senate approved a resolution on May 15, 1950 arraigning him for contempt and subsequently found him guilty of the charge.

He was committed to the custody of the Senate Sergeant at arms until he reveals the name of the person he gave the money to. The Senate adjourned three days later. The work of the Committee however was extended via Resolution 16.

- Arnault filed an original action for the issuance of a writ of Habeas Corpus with the Supreme Court to obtain his release cited the following grounds:

a. the Senate has no power to punish him for contempt since the requested information is not material to the intended legislation and his refusal to answer has not impeded or obstructed the legislated process. The Senate has already approved bills related to the transactions.

b. the Senate lacks the authority to commit him in contempt for a term beyond its legislative session.

c. the information sought will be self-incriminating

- rior to discussing the issues, the Supreme Court went into the general principles of law with regard the power of either house of Congress to punish a person not a member for contempt as this case is the first of its kind to be tried under the Philippine constitution. In so doing, the Supreme Court had to draw from American precedents in recognition of the fact that the Constitution of the Philippines were patterned after largely American institutions and practices. The discussions were as follows:

a. There is no expressed provisions in the constitution which grant power to either House to investigate or exact testimonies to exercise legislative function. However, this power of inquiry, and the process to enforce it, is a necessary element to enable the body to wisely and effectively perform their respective legislative functions. In the absence of information that it requires, Congress has no other recourse but to get the same from others who have

them. At times, the information required are not entirely accurate or complete. Given this, Congress has the implied coercive to obtain such information.

b. The power to compel is limited to information required in a matter into which Congress has jurisdiction to inquire.

Issue: WON the writ of Habeas Corpus should be granted

Held/Ratio:

a. The requested information is needed to comply with the direction of the senate as contained in Resolution Nos. 8 &

16 to secure the names of the persons responsible for the transaction. The materiality of the question asked in the public hearing should be determined by its direct relation to the matter being inquired into and not by its indirect relation to any proposed or possible legislation. The only time that the Supreme Court may interfere with the Senate is when a petitioner is being forced to answer questions which are not pertinent to the matter inquiry. In this case and citing McGrain vs Daugherty, Congress would be guilty of a clear abuse of authority in the exercise of its power. As to whether the information sought to be elicited is material to an proposed legislation, the Court could not say as this is not within their scope.

- Citing the case Re: Chapman, where the petitioner was jailed for contempt of the US Senate for refusing to answer questions with regard accounts of Senators in his company, the Supreme Court held that the Philippine Senate has the authority to compel Arnault and if he so refuses to give the information, also the power find him in contempt and to imprison him until he complies with said requirement.

b. The power of the Senate to commit Arnault to prison does not end with the termination of the legislative session.

The opinion of Justice Malcolm was cited with regard the Candido Lopez case where he opines that the imprisonment of Lopez terminates when the House of Representatives adjourns. Citing however the McGrain case again, the Court said that, unlike the House of Representatives which losses all its members every four years (hence its term is only four years), the Senate is deemed as a continuing body whose members are elected for a six year term and are so divided that only a third of the seats become vacant every two years. Hence, the power of the Senate to hold Arnault is a continuing power. The only caveat of the Supreme Court in this case is that if the Senate disregards the proper limitation to jail parties in contempt, the remedy is with the Court.

c. Arnault‘s claim to self incrimination cannot be sustained citing Mason vs US as a precedent. The Court must be given the chance to determine from all the facts and circumstances whether the witness is justified in refusing to answer any question which could incriminate him. Arnault‘s testimony was obviously false. He obviously knew the name of the person he gave the money to. His refusal to testify truthfully is punishable with contempt.

Decision Petition is denied

Arnault v. Balagtas Ponente: Labrador, J.

Facts:

Arnault was attorney-in-fact of Ernest Burt in the negotiations for the purchase of the Buenavista and Tambobong Estates by the Government. The purchase was made and the price paid was 5 million pesos. As a result, Senate of the Philippines adopted Resolution No. 8 which created a Special Committee to investigate the ―honesty and validity‖

of the said purchase. In the investigation conducted by the Committee, Arnault was asked to whom a part of the purchase price (Php 440,000) was delivered. Arnault refused to answer this question. Thus, Senate adopted Resolution No. 17 on 15 May 1950, ordering Arnault‘s confinement in Bilibid until he reveals the name of person who received the Php 440,000 and answers other pertinent questions. In December 1951, while still confinement in Bilibid, Arnault executed an affidavit, giving the history of the government purchase and naming Jess Santos as the person who received the Php 440,000. Upon presentation of affidavit, the Committee conducted investigation. At the end of the hearing, Committee did not believe Arnault‘s statement and adopted on 8 November 1952 Resolution No.

114, ordering the continued confinement of Arnault until he has purged himself of contempt. Arnault filed petition for writ of habeas corpus on 3 March 1953 with CFI Pasay. CFI ruled in favor of Arnault; hence, the appeal of Balagtas, Director of Prisons.

Issue/Held/Ratio:

(1) Since the Senate Special Committee did not believe Arnault, can the court review said finding?

No. The judicial department of the government has no right to do, much in the same manner, that the legislative department cannot invade the judicial realm in the ascertainment of truth and in the application and interpretation of law, in what is known as the judicial process, because that would be in direct conflict with the fundamental principle of separation of powers established by the Constitution. There are only instances when judicial intervention may lawfully be invoked when there has been a violation of a constitutional inhibition (due process and arbitrary exercise of legislative discretion). In the case at bar, due process has been afforded to Arnault by he had been given the opportunity to be heard.

(2) Since the Senate did not believe the statement, is the continued confinement of Arnault, as ordered in Resolution No 114, valid?

Yes. Arnault v. Nazareno: ―…the Senate has the authority to commit a witness if he refuses to answer a question pertinent to a legislative inquiry, to compel him to give him the information, by reason of its coercive power and not its punitive power.

Patterned after American legislative bodies, the Senate has the power to punish for contempt if the contempt has had the effect of obstructing the exercise of the legislature of its legitimate functions (in this case, the power to

investigate).

(3) Having answered the question of the Senate Special Committee, did Arnault purge himself of contempt?

No. In order that Arnault can be considered of having purged himself of contempt, it is necessary that he testified truthfully (note that the Senate believed Arnault‘s testament untrue). No person guilty of contempt may purge himself by another lie. This would be repetition of the offense.