025. Padilla v.

Dizon
Administrative Case No. 3086/23 February 1988/EN BANC
Alexander Padilla complainant
Hon. Baltazar Dizon (Presiding Judge, RTC Pasay Br. 113) respondent
Per Curiam, Digest by Pip

Short Version: Judge Dizon acquitted Lo Chi Fai for violation of Central Bank Circular No. 960 because
the accused apparently had no criminal intent to violate the Circular. Commissioner of Customs Padilla
filed an administrative complaint against Judge Dizon for gross incompetence and gross ignorance of the
law as a result of the decision. The Court dismissed Judge Dizon from serving, finding that he was indeed
incompetent/ignorant and his actions constituted grave misconduct, since proof of malice or deliberate
intent (mens rea) is not essential in offenses punished by special laws, which are mala prohibita.

Facts: Alexander Padilla was Commissioner of Customs in August 1987 when he filed a complaint against
Judge Dizon for rendering a manifestly erroneous decision due to gross incompetence and gross
ignorance of the law in the case of People of the Philippines v. Lo Chi Fai. In that case, the accused was
acquitted of the offense of smuggling foreign currency out of the country.

In his answer, the judge recited his commendable record as a fearless prosecutor from December
1962 until he was appointed as an RTC judge in February 1983. In essence, he argued that his length of
service as prosecutor and judge is tangible proof that would negate the allegations of the petitioner (sic) 1
whereas the latter did not last long in the service for reasons only known to him. The judge also
questioned why the case against him was only filed a year after the decision involved and construed it as a
clear indication of malice and ill-will. He also asserted that his decision was based on fundamental
principles and the foundation of rights and justice, and that whatever errors therein were committed in
good faith. He then asked for dismissal of the petition (sic).2

So what was the case that got him in trouble all about?

In People v. Lo Chi Fai, Lo Chi Fai was a tourist who was caught by a Customs guard at the
Manila International Airport while attempting to smuggle foreign currency and foreign exchange
instruments out of the country. At the time of his apprehension aboard a PAL flight bound for
Hong Kong in July 1986, he was carrying 380 foreign exchange currency and instruments
amounting to $355,349.57. The currency and instruments were in various denominations (Yen,
Swiss Franc, Aussie Dollar, HFL Guilder, French France, US Dollar, etc. etc.) and he was carrying
them without any authority as provided by law. He was able to exhibit two currency declarations
which he was supposed to have accomplished upon arrival in Manila in previous trips.

An information was filed against Lo Chia Fair for violation of Section 6 of Central Bank
Circular No. 960, which provides that

No person shall take out or transmit or attempt to take out or transmit

foreign exchange in any form, out of the Philippines directly, through other
persons, through the mails or through international carriers except when specifically
authorized by the Central Bank or allowed under existing international
agreements or Central Bank regulations.

Tourists and non-resident visitors may take out or send out from the Philippine foreign
exchange in amounts not exceeding such amounts of foreign exchange brought in by
them. For purposes of establishing the amount of foreign exchange brought in or out of
the Philippines, tourists and non-resident temporary visitors bringing with them more
than US$3,000.00 or its equivalent in other foreign currencies shall declare their foreign
exchange in the form prescribed by the Central Bank at points of entries upon arrival in
the Philippines.
1
Should be complainant, hahahaha.
2
Again, should be complaint. In fact, the Court kept putting should be complaint all over its decision, hahaha.
 The penal sanction was provided by Section 1 of P.D. No. 1883, which labels the act above as
blackmarketing of foreign exchange punished by reclusion temporal (minimum of 12 years and 1
day and maximum of 20 years) and a fine no less than P50,000.00.

Lo Chi Fai attempted to prove at trial that he was a businessman from Kowloon and he had
come to the Philippines was to invest in business and play in the casino. When he came to the
Philippines he tried to declare US and Japanese currency, but the Central Bank representative
refused to accept his declaration until he could get a confirmation as to the source of the money.
He also testified that his business associates, as per their agreement to invest in some business
with him, started putting money for this purpose in a common fund. Every time one of them came
to the Philippines, they would declare the money being brought in and all declarations were then
handed to Lo Chia Fai. He also testified on cross-examination that the reason he was going back
to Hong Kong, bringing with him all the money intended to be invested in the Philippines, was
because of the fear of his group that the revolution taking place in Manila might become
widespread.

Judge Dizon acquitted Lo Chi Fai, ruling that the fact that the latter had in his possession the
foreign currencies when he was about to depart from the Philippines did not by that act alone
make him liable for violation of Section 6. Judge Dizon ruled that what was imperative was the
purpose for which he was bringing foreign currencies out of the country. He accepted Lo Chi Fais
explanation and defense. And then he went and wrote this

Yes, simply reading the provisions of said circular will, readily show that the currency
declaration is required for the purpose of establishing the amount of currency being
brought by tourist or temporary non-resident visitors into the country. The currency
declarations, therefore, is already (sic) intended to serve as a guideline for the Customs
authorities to determine the amounts actually brought in by them to correspond to the
amounts that could be allowed to be taken out. Indeed, this Court is amazed and really
has its misgivings in the manner currency declarations were made as testified to by the
Central Bank employees. Why the Bureau of Customs representative never took part in
all these declarations testified to by no less than five (5) Central Bank employees?
Seemingly, these employees are the favorites of these travellers. It is the hope of this
Court that the authorities must do something to remedy the evident flaw in the system
for effective implementation of the questioned Central Bank Circular No. 960.

Issue: Was Judge Dizon guilty of gross incompetence or gross ignorance of the law for acquitting Lo Chi
Fai? YES.

Ruling: Judge dismissed from service.

Ratio: As a general rule, a judge cannot be held to account or answer criminally, civilly or
administratively for an erroneous decision rendered by him in good faith.

In this case, Judge Dizon showed gross incompetence or gross ignorance of the law in holding that the
prosecution needed to establish that Lo Chi Fai had criminal intent to violate Central Bank Circular No.
960. He should have known that proof of malice or deliberate intent (mens rea) is not essential
in offenses punished by special laws, which are mala prohibita. There was no denying that Lo
Chi Fai should have been found guilty of the offense because the facts confirm that he had in his
possession about $355,349.57 without any specific authority from the Central Bank as required by law.

The Court took Judge Dizon to task for swallowing such a fantastic tale, although totally irrelevant to
the matter of the criminal liability of the accused, hook, line, and sinker. It apparently escaped the judge
that the number of foreign currency instruments and amounts that Lo Chi Fai was caught with did not
correspond to the foreign currency declarations presented by the accused at trial. It also flew over the
judges head that Lo Chi Fai in effect admitted that he was a carrier of foreign currency for other people.
This, and the totality of circumstances in this case made the story concocted by the accused
so palpably unbelievable as to render the findings of Judge Dizon to be obviously contrived
in favor of the acquittal of the accused, thereby negating his claim that he rendered the
decision in good faith. His acts in this case amounted to grave misconduct prejudicial to
the interest of sound and fair administration of justice.
Voting: C.J. Teehankee, Yap, Fernan, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Bidin, Sarmiento Cortes, and Grio-Aquino, JJ., concur.

Padilla, Narvasa, JJ., no part.