Stonehill scandal

{{Infobox Philippines court case Stonehill v. Diokno, G.R. No. L-19550, 20 S.C.R.A. 383 (1967), is a landmark decision of the Supreme Court of the Philippines recognizing the doctrine of the fruit of the poisonous tree on the admissibility of evidence especially against politicians or political cronies in the Philippine legal system. The case is the first major instance that led to the development of cases on corruption scandals. == Background ==

Harry Steinberg, a Polish-American war veteran who went by the Anglicized surname Stonehill was in charge of a 50 million US dollar empire, which involved bribed officials and monopolies on different industries from tobacco including the top brand, "Puppies", to cement and glassware. At first, a congressional hearing was convened and brought Stonehill to bear on tax evasion charges, which Stonehill managed to evade until the search and seizure in contention occurred at his office. Secretary José W. Diokno was recently appointed in late 1961 as Secretary of Justice and officially began his term on January 2, 1962, after his predecessor was removed from office in December as a result of Macapagal cancelling midnight appointments by former President Carlos P. Garcia. Diokno showed in his first day that he was immediately ready to file cases involving graft and corruption and quickly filed on his first day in office on January 2, Tuesday. They quickly built a strong working relationship, and Diokno even recommended to Macapagal how he would deal with the remaining midnight appointees, to which Macapagal positively responded by deeming them all legally ousted from office effective immediately. Meinhart Spielman, general manager of Stonehill's Philippine Tobacco Corporation, broke the gridlock of the hearings by filing a case for frustrated murder against Stonehill and Robert Brooks. Spielman demanded his unpaid compensation and suffered multiple injuries from Stonehill himself. Spielman, fearing for his life, shared information of a certain "blue book" that could serve as crucial evidence in the hearing and in potential charges. Secretary Diokno acted on this clue and, with the aid of the National Bureau of Investigation (NBI), ordered a search and seizure in March 1962 while arresting Stonehill and Brooks on Saturday, March 3. It would not be until 1967 that the case would be reopened and this time ruled with finality on the usage of the seized materials sans the blue book as evidence for investigation. In the final decision penned by Chief Justice Roberto Concepcion, the seized items, including ledgers, typewriters, Bobbins cigarette wrappers, balance sheets, and all pertinent evidence were divided into two categories: (1) those seized in offices and (2) those seized in residences. The ponente wrote that the first group was based on a valid search warrant. Citing Remus vs. United States (C.C.A.)291 F. 501, 511 and other American jurisprudence, companies and corporations have their own distinct juridical personality. This means that they may become parties to a lawsuit as their assets and liabilities are considered separate from private citizens. Thus the rights granted to the privacy of citizens are of different standards from corporations. The injunction that was issued on evidence taken from private residences became the main issue in contention. == Doctrine of the fruit of the poisonous tree ==

, who wrote the ponencia According to Chief Justice Concepcion, the constitutional basis for search warrants in private residences are: (1) that they may only be granted by the Courts if probable cause is determined and that (2) the warrant shall particularly describe the things to be seized. This can be found in the Bill of Rights of the 1935 Constitution, or in Article III, Section 1(3) which states, (3) The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not be violated, and no warrants shall issue but upon probable cause, to be determined by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched, and the persons or things to be seized. This is reiterated in the far lengthier prevailing 1987 Constitution, which emphasized that the term "search and seizures" were of any nature or type, as well as the personal involvement of the judge as a result of this case.SECTION 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized. Since this was not determined through probable cause, it was not admissible evidence. The Court abandoned the doctrine set in Moncado vs. People's Court (80 Phil. 1) that unconstitutionally obtained evidence may still be admissible. This was because the protection of the right to privacy may be violated, which is the essence of the exclusionary rule or the doctrine of the fruit of the poisonous tree. This was the origin of the exclusionary rule. The term, fruit of the poisonous tree was not expressly mentioned, C.J. Concepcion used the term exclusionary rule, and the rule was the basis of the law of this case, which meant that evidence that is unconstitutional cannot be used to investigate or prosecute another party. Essentially the rule also ensured that general warrants or scatter-shot warrants cannot be issued to allow law officers to go on fishing expeditions and obtain evidence against the accused, as this is the only practical means to enforce the constitutional injunction against unreasonable searches and seizures in the Bill of Rights found in Article III of both the contemporary and modern constitutions. == Aftermath ==

Without the blue book, Diokno's pleadings and evidence were almost moot as the blue book carried incriminatory and conclusive evidence against the 200 politicians under Stonehill's set of accounts. Senator Jovito Salonga once remarked that though Stonehill was deported by Macapagal, he nor any of the politicians involved can ever be able to deport the truth. With Macapagal deporting Stonehill, Diokno quickly ran the succeeding year as senator of the opposition Nacionalista Party, garnering about half of the popular votes as Macapagal's approval ratings plunged. Eventually he brought four children from his second family with his Filipino partner Lourdes Blanco to different states. He first settled in Japan, then moved his family to the UK, Brazil, and Switzerland before finally settling in Spain. During this excursion, he returned to home soil in 1987, one year after the People Power Revolution that ousted President Marcos, subtly revisiting the country in order to seek out his assets but was quickly made to leave, gaining nothing in his short visit. Stonehill eventually died in Málaga, Spain in March 2002, at the age of 84, long after the lifetimes of Senator Diokno, Presidents Macapagal and Marcos, and many other parties involved. ==Legacy==

, a similar scandal that mirrored Stonehill's scandal The scandal and its ensuing litigation hearings popularized the concept of congressional hearings or senate investigations in aid of inquiry and not merely question hours, as well as litigation cases with the Sandiganbayan or Supreme Court as a common resort to major political scandals. and the PDAF or Pork barrel scam of Janet Napoles. The common comparison usually surrounds the question whether the President may block evidence or ban the appearance of those complicit. For instance, the President may insist the Congressional inquiries are for question hour only to determine legal violations and not in aid of legislation, which grants the privilege to be excused from answering for investigations. On the other hand, the office of the President may decide to be accountable and allow the attendance of its subordinates and associates. Though Stonehill may have lost possession of his 50 million dollar empire which included at least 18 known companies, some of the effects of his ventures include the casinos and establishments along Pasay City, which takes a huge section of what is called Bay City attached to Manila and facing Manila Bay. This reclamation area started out of ventures that were initially planned by Stonehill. As of the present, the highway along Bay City that directly faces Manila Bay has been renamed to José W. Diokno Boulevard, which is parallel to Macapagal Boulevard. Both serve as the main avenues in this reclamation area. == See also ==