Securities and Exchange Commission vs. Mendoza

A motion to quash a search warrant or to suppress evidence obtained thereby, where no criminal action has been instituted, may be filed in and resolved only by the court that issued the warrant. Thus disguised as prohibition and injunction, an action seeking to bar use of seized items for non-turnover to the issuing court belongs exclusively to the issuing court.

On March 26, 2001 the National Bureau of Investigation applied with the Regional Trial Court of Makati City, Branch 63, for a search warrant covering documents and articles found at the offices of Amador Pastrana and Rufina Abad at 1908, 88 Corporate Center, Valero Street, Makati City. The application alleged that the items were being used to violate Republic Act 8799, the Securities Regulation Code, and to commit estafa under Article 315 of the Revised Penal Code. The Makati court granted the application, and NBI and Securities and Exchange Commission agents searched the offices and seized the described documents and articles.

Shortly after the seizure, the SEC filed a criminal complaint with the Department of Justice against Rizza Mendoza, Carlito Lee, Ma. Greshiela Compendio, Raul Rivera, Rey Beltran, Rex Almojuela, Linda Capalungan, Hilda Ronquillo, Ma. Loda Calma, and Teresita Almojuela for violation of Sections 24.1(b)(iii), 26, and 28 of the Securities Regulation Code. On July 11, 2001 Mendoza, et al. filed a petition for prohibition and injunction with application for temporary restraining order and preliminary injunction against the NBI, SEC, and DOJ before the RTC of Muntinlupa. According to Mendoza, et al., three months after the search the NBI and SEC had not turned over the seized articles to the Makati RTC that issued the warrant, in violation of the requirement to immediately turn over seized items to the issuing court, raising fear that the items may have been tampered with, altered, or augmented.

Simultaneously on July 11, 2001, Pastrana and Abad, who did not join the Muntinlupa action, filed with the Makati RTC a motion to quash the search warrant for having been issued in connection with several offenses when the Rules require issuance for only one specific offense. The Muntinlupa RTC issued a TRO on July 19, 2001, granted Pastrana and Abad leave to intervene on August 8, 2001, and on August 9, 2001 replaced the TRO with a writ of preliminary injunction subject to the final outcome before the Makati RTC. During pendency of the certiorari case before the Court of Appeals, the Makati RTC on May 10, 2002 nullified the search warrant, declared the seized items inadmissible, and ordered their return to Pastrana and Abad. The Court of Appeals nevertheless decided the certiorari petition on March 24, 2004, affirming the Muntinlupa orders.

• Prohibition Against Enjoining Prosecution: Petitioner argued that injunction may not be issued to protect contingent rights or to enjoin criminal prosecution.
• Exhaustion of Administrative Remedies: Petitioner maintained that Mendoza, et al. should have exhausted administrative remedies available to them at the DOJ before seeking judicial relief.
• Proper Forum for Prohibition: Petitioner argued that Mendoza, et al.'s petition for prohibition should have been lodged with the Court of Appeals.

• Failure to Turn Over Seized Items: Respondent maintained that the NBI and SEC violated Section 1, Rule 126 of the Rules on Criminal Procedure by failing to immediately turn over the seized articles to the Makati RTC three months after the search and seizure.
• Suppression to Prevent Tainted Use: Respondent argued that the SEC, NBI, and DOJ should be prevented from using the seized articles in prosecution and preliminary investigation because the items may have been tampered with, altered, or augmented.
• Multi-Offense Warrant Invalidity: Respondent Pastrana and Abad maintained that the search warrant should be quashed for having been issued in connection with several offenses when the Rules require issuance for only one specific offense.

• Jurisdiction Over Suppression Disguised as Injunction: Whether the Muntinlupa RTC has jurisdiction to entertain Mendoza, et al.'s injunction action seeking to bar use of evidence seized under a search warrant issued by the Makati RTC where no criminal action has been filed in court.

• Jurisdiction Over Suppression Disguised as Injunction: No. The Muntinlupa RTC had no jurisdiction because questions on issuance of the warrant and suppression of seized evidence, absent a filed criminal action, belong exclusively to the issuing Makati RTC under Section 14, Rule 126.

• Jurisdiction Over Suppression Disguised as Injunction: Section 14, Rule 126 provides that a motion to quash a search warrant and/or to suppress evidence obtained thereby may be filed in and acted upon only by the court where the action has been instituted, or if none, by the court that issued the warrant. Although labeled prohibition and injunction, the Muntinlupa action seeking to prohibit use of the seized items was in substance an action to suppress their use as evidence and therefore fell within that exclusive rule. Lack of party status in the warrant proceeding did not justify filing elsewhere, since a search warrant proceeding is not an action against a person but a special, drastic remedy for discovery and possession of property in furtherance of public prosecution, and non-targets affected by seizure may move to suppress before the issuing court where no criminal case had yet been filed. The SEC's admitted retention of the documents for months to study them and build a case, rather than forthwith delivery to the issuing judge, compromised the integrity of the seized items but did not confer jurisdiction on a different court.

• Exclusive forum for motion to quash or suppress — Under Section 14, Rule 126, a motion to quash a search warrant and/or to suppress evidence obtained thereby may be filed in and acted upon only by the court where the action has been instituted; if no criminal action has been instituted, only by the court that issued the warrant, except that if the issuing court failed to resolve the motion and a criminal case is subsequently filed elsewhere, the latter court resolves it. Applied to treat the Muntinlupa prohibition and injunction suit as a suppression motion cognizable only by the Makati RTC as issuing court.
• Nature of search warrant proceeding — A search warrant proceeding is in no sense a criminal action or commencement of prosecution; it is not against any person but solely for discovery and possession of personal property, a special and peculiar drastic remedy made necessary by public necessity, likened to a writ of discovery and police weapon issued in the name of the People for public prosecution, not for adjudicating civil or private rights. Applied to reject the claim that only parties to the warrant application could question the seizure and to allow affected non-targets to seek suppression before the issuing court.
• Substance over form in suppression actions — An action denominated as prohibition and injunction whose object is to bar use of items seized under a search warrant is actually an action to suppress their use as evidence. Applied to hold that Mendoza, et al.'s Muntinlupa suit was governed by the suppression-venue rule despite its label.

• "Section 14. Motion to quash a search warrant or to suppress evidence; where to file. — A motion to quash a search warrant and/or to suppress evidence obtained thereby may be filed in and acted upon only by the court where the action has been instituted. If no criminal action has been instituted, the motion may be filed in and resolved by the court that issued the search warrant. However, if such court failed to resolve the motion and a criminal case is subsequently filed in another court, the motion shall be resolved by the latter court." — States the controlling venue rule that deprived the Muntinlupa RTC of jurisdiction and reserved the matter to the Makati RTC as issuing court.
• "Although passed off as a petition for injunction, the action that Mendoza, et al. filed with the Muntinlupa RTC, the object of which is to prohibit the three agencies from using the items seized under the search warrant, is actually an action to suppress their use as evidence." — Provides the substance-over-form characterization that determines the applicable procedural rule.
• "[A] search warrant proceeding is, in no sense, a criminal action or the commencement of a prosecution. The proceeding is not one against any person, but is solely for the discovery and to get possession of personal property." — Defines the nature of warrant proceedings to explain why non-parties to the application may still seek suppression before the issuing court.

• United Laboratories, Inc. vs. Isip, 500 Phil. 342 (2005) — Followed as authority for the nature of a search warrant proceeding as not a criminal action against a person but a special remedy for discovery and possession of property in furtherance of public prosecution.

• Section 14, Rule 126, Rules on Criminal Procedure — Governs where to file a motion to quash a search warrant or suppress evidence; applied to hold that only the Makati RTC as issuing court could resolve the suppression plea since no criminal action had been instituted.
• Section 1, Rule 126, Rules on Criminal Procedure — Defines a search warrant as an order commanding search and bringing of property before the court; invoked by respondents to allege violation from failure to turn over seized items to the issuing court.
• Section 12(a), Rule 126, Rules on Criminal Procedure — Requires the officer to forthwith deliver seized property with verified inventory to the judge who issued the warrant; the SEC's months-long retention to study the items was found to compromise their integrity.
• Section 4, Rule 126, Rules on Criminal Procedure — Requires a search warrant to issue only upon probable cause in connection with one specific offense; invoked in the Makati motion to quash for covering several offenses.
• Sections 24.1(b)(iii), 26, and 28, Republic Act 8799 (Securities Regulation Code) — Basis of the SEC criminal complaint filed with the DOJ against Mendoza, et al. following the seizure.
• Article 315, Revised Penal Code — Cited as the estafa provision allegedly violated and covered by the NBI search warrant application alongside the Securities Regulation Code.

Velasco, Jr., J., Chairperson, Peralta, J., Mendoza, J., Perlas-Bernabe, J.