SECOND DIVISION
ISMAEL
G. KHAN, JR. and G.R. No.
125296
WENCESLAO
L. MALABANAN,
Petitioners, Present:
PUNO,
J., Chairperson, SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA
and
GARCIA,
JJ.
OFFICE
OF THE OMBUDSMAN,
DEPUTY OMBUDSMAN
(VISAYAS), ROSAURO F.
TORRALBA* and CELESTINO
BANDALA,**
Respondents. Promulgated:
July
20, 2006
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D E C I S I O N
CORONA, J.:
This petition for certiorari under Rule 65 of the Rules of Court addresses the issue of whether public respondents Deputy Ombudsman (Visayas) and the Ombudsman have jurisdiction over petitioners Ismael G. Khan, Jr. and Wenceslao L. Malabanan, former officers of Philippine Airlines (PAL), for violation of Republic Act No. (RA) 3019[1] (the Anti-Graft and Corrupt Practices Act).
In February 1989, private respondents Rosauro Torralba and Celestino Bandala charged
petitioners before the Deputy Ombudsman (Visayas) for
violation of RA 3019. In their complaint, private respondents accused
petitioners of using their positions in PAL to secure a contract for Synergy
Services Corporation, a corporation engaged in hauling and janitorial services in
which they were shareholders.
Petitioners filed an omnibus motion
to dismiss the complaint on the following grounds: (1) the Ombudsman had no jurisdiction
over them since PAL was a private entity and (2) they were not public officers,
hence, outside the application of RA 3019.
In a resolution dated July 13, 1989,[2]
the Deputy Ombudsman[3]
denied petitioners’ omnibus motion to dismiss.
On petitioners’ first argument, he
ruled that, although PAL was originally organized as a private corporation, its
controlling stock was later acquired by the government through the Government
Service Insurance System (GSIS).[4]
Therefore, it became a government-owned or controlled corporation (GOCC) as
enunciated in Quimpo v. Tanodbayan.[5]
On the second argument, the Deputy
Ombudsman held that petitioners were public officers within the definition of
RA 3019, Section 2 (b). Under that provision, public officers included
“elective, appointive officials and employees, permanent or temporary, whether
in the classified or unclassified or exempt service receiving compensation,
even nominal, from the Government.”
The dispositive portion of the Deputy
Ombudsman’s order read:
WHEREFORE, finding no merit to [petitioners’] OMNIBUS
MOTION TO DISMISS, the same is hereby DENIED and petitioners are hereby ordered
to submit their answer within ten (10) days from receipt hereof.[6]
xxx xxx xxx
Petitioners appealed the order to the
Ombudsman. There, they raised the same issues. Treating the appeal as a motion
for reconsideration, the Ombudsman dismissed it on February 22, 1996. He held
that petitioners were officers of a GOCC, hence, he had jurisdiction over them.[7]
He also affirmed the Deputy Ombudsman’s ruling that Quimpo
was applicable to petitioners’ case.
In
this petition for certiorari, with prayer for issuance of a temporary
restraining order, petitioners assail the orders dated July 13, 1989 and
February 22, 1996 of the Deputy Ombudsman (Visayas)
and the Ombudsman, respectively. They
claim that public respondents acted without jurisdiction and/or grave abuse of
discretion in proceeding with the investigation of the case against them
although they were officers of a private corporation and not “public
officers."[8]
In
support of their petition, petitioners argue that: (1) the Ombudsman’s
jurisdiction only covers GOCCs with original
charters and these do not include PAL, a private entity created under the
general corporation law; (2) Quimpo does not
apply to the case at bar and (3) RA 3019 only concerns “public officers,” thus,
they cannot be investigated or prosecuted under that law.
We find merit in petitioners’
arguments and hold that public respondents do not have the authority to
prosecute them for violation of RA 3019.
Jurisdiction Of The Ombudsman Over GOCCs Is Confined
Only To Those With
Original
Charters
The
1987 Constitution states the powers and functions of the Office of the
Ombudsman. Specifically, Article XI, Section 13(2) provides:
Sec. 13. The Office of the Ombudsman shall have the following
powers, functions, and duties:
xxx xxx xxx
(2) Direct, upon complaint or at its own instance, any
public official or employee of the Government, or any subdivision, agency or
instrumentality thereof, as well as any government-owned or controlled
corporation with original charter, to perform and expedite any act or
duty required by law, or to stop, prevent, and correct any abuse or impropriety
in the performance of duties. (italics supplied)
xxx xxx xxx
Based on the foregoing provision, the
Office of the Ombudsman exercises jurisdiction over public officials/ employees
of GOCCs with original charters. This being so, it can only
investigate and prosecute acts or omissions of the officials/employees of government
corporations. Therefore, although the government later on acquired the controlling
interest in PAL, the fact remains that the latter did not have an “original
charter” and its officers/employees could not be investigated and/or prosecuted
by the Ombudsman.
In Juco
v. National Labor Relations Commission,[9]
we ruled that the phrase “with original charter” means “chartered by special
law as distinguished from corporations organized under the Corporation Code.”
PAL, being originally a private corporation seeded by private capital and created
under the general corporation law, does not fall within the jurisdictional powers
of the Ombudsman under Article XI, Section 13(2) of the Constitution.
Consequently, the latter is devoid of authority to investigate or prosecute
petitioners.
Quimpo Not Applicable
to the Case at Bar
Quimpo[10] is not applicable to the case at
bar. In that case, Felicito Quimpo
charged in 1984 two officers of PETROPHIL in the Tanodbayan
(now Ombudsman) for violation of RA 3019. These officers sought the dismissal of the
case on the ground that the Tanodbayan had no
jurisdiction over them as officers/employees of a private company. The Court
declared that the Tanodbayan had jurisdiction over
them because PETROPHIL ceased to be a private entity when Philippine National
Oil Corporation (PNOC) acquired its shares.
In hindsight, although Quimpo appears, on first impression, relevant to this
case (like PETROPHIL, PAL’s shares were also acquired
by the government), closer scrutiny reveals that it is not actually on all
fours with the facts here.
In Quimpo,
the government acquired PETROPHIL to “perform functions related to government
programs and policies on oil.”[11]
The fact that the purpose in acquiring PETROPHIL was for it to undertake
governmental functions related to oil was decisive in sustaining the Tanodbayan’s jurisdiction over it. This was certainly not the
case with PAL. The records indicate that the government acquired the
controlling interest in the airline as a result of the conversion into equity of
its unpaid loans in GSIS. No
governmental functions at all were involved.
Furthermore, Quimpo
was decided prior to the 1987 Constitution. In fact, it was the 1973
Constitution which the Court relied on in concluding that the Tanodbayan had jurisdiction over PETROPHIL’s
accused officers. Particularly, the Court cited Article XIII, Section 6:
SEC. 6. The Batasang Pambansa shall create an office of the Ombudsman, to be
known as the Tanodbayan, which shall receive and
investigate complaints relative to public office, including those in
government-owned or controlled corporations, make appropriate
recommendations, and in case of failure of justice as defined by law, file and
prosecute the corresponding criminal, civil, or administrative case before the
proper court or body. (italics supplied)
The term “government-owned or
controlled corporations” in the 1973 Constitution was qualified by the 1987
Constitution to refer only to those with original charters.[12]
Petitioners, as
then Officers of
PAL, were not
Public Officers
Neither
the 1987 Constitution nor RA 6670 (The Ombudsman Act of 1989) defines who
“public officers” are. Instead, its
varied definitions and concepts are found in different statutes[13]
and jurisprudence.[14]
Usually quoted in our decisions is Mechem, a
recognized authority on the subject. In the 2002 case of Laurel v. Desierto,[15]
the Court extensively quoted his exposition on the term “public officers”:
A public office is the right, authority and duty,
created and conferred by law, by which, for a given period, either fixed by law
or enduring at the pleasure of the creating power, an individual is invested
with some portion of the sovereign functions of the government, to be exercised
by him for the benefit of the public. The individual so invested is a public
officer.
The characteristics of a public office, according to Mechem, include the delegation of sovereign functions, its
creation by law and not by contract, an oath, salary, continuance of the
position, scope of duties, and the designation of the position as an office.
xxx xxx xxx
Mechem describes the delegation to the individual of the
sovereign functions of government as “[t]he most important characteristic” in
determining whether a position is a public office or not.
The most important characteristic which distinguishes
an office from an employment or contract is that the creation and conferring of
an office involves a delegation to the individual of some of the sovereign
functions of government to be exercised by him for the benefit of the public; −
that some portion of the sovereignty of the country, either legislative,
executive, or judicial, attaches, for the time being, to be exercised for the
public benefit. Unless the powers conferred are of this nature, the individual
is not a public officer.[16] (italics supplied)
From the foregoing, it can be reasonably
inferred that “public officers” are those endowed with the exercise of
sovereign executive, legislative or judicial functions.[17] The explication of the term is also
consistent with the Court’s pronouncement in Quimpo
that, in the case of officers/employees in GOCCs,
they are deemed “public officers” if their corporations are tasked to carry out
governmental functions.
In any event, PAL has since reverted
to private ownership and we find it pointless to scrutinize the implications of
a legal issue that technically no longer exists.
WHEREFORE, the petition is hereby GRANTED.
Public respondents Deputy Ombudsman (Visayas) and
Office of the Ombudsman are restrained from proceeding with the investigation
or prosecution of the complaint against petitioners for violation of RA 3019.
Accordingly, their assailed orders of July 13, 1989 and February 22, 1996,
respectively, are SET ASIDE and ANNULLED.
SO
ORDERED.
RENATO C. CORONA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Associate
Justice
Chairperson
ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA
Associate Justice Associate Justice
CANCIO C. GARCIA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution
and the Division Chairperson’s Attestation, I certify that the conclusions in
the above decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
ARTEMIO V. PANGANIBAN
Chief Justice
* In a resolution dated March 24, 1999, the Court dismissed the petition against Rosauro Torralba who died in December 1997. The resolution became final and executory on June 10, 1999. Entry of judgment was accordingly made on the same day.
** Respondent died on April 23, 1999 per certified true copy of his death certificate furnished by his counsel. Rollo, p. 220.
[1] Approved on August 17, 1960.
[2] Rollo, pp. 20-24.
[3] Hon. Juan M. Hagad.
[4] GSIS converted PAL’s outstanding loans into equity shares.
[5] 230 Phil. 232 (1986). In this case, the Philippine National Oil Corporation (PNOC) acquired PETROPHIL, a private corporation. Here, the Court declared that PETROPHIL shed off its private status and became a subsidiary of PNOC. Its officers, who were then accused of violating the Anti-Graft and Corrupt Practices Act (RA 3019), were considered “public officers” under the jurisdiction of the Tanodbayan (now Ombudsman).
[6] Supra at note 1.
[7] Rollo, pp. 25-29. Issued by Marilou Ancheta-Mejica, Graft Investigation Officer I, as approved by then Ombudsman Aniano A. Desierto.
[8] Id., p. 5.
[9] 343 Phil. 307 (1997).
[10] Supra at note 5.
[11] Id.
[12] See Juco, supra at note 9.
[13] Public officials include elective and appointive officials and employees, permanent or temporary, whether in the career and non-career service, including military and police personnel whether or not they receive compensation, regardless of amount. (Section 2[b], RA 6713 [Code of Conduct and Standards for Public Officials]).
Public officer is any person holding any public office in the Government of the Republic of the Philippines by virtue of an appointment, election or contract. (Section 1[a], RA 7080 [Act Defining and Penalizing the Crime of Plunder]).
Public
officers include elective and appointive officials and employees, permanent or
temporary, whether in the classified or unclassified or exempt service
receiving compensation, even nominal, from the government x x
x (Section 2[b], RA 3019 [Anti-Graft and Corrupt
Practices Act]).
Any person who, by direct provision of law, popular election or appointment by competent authority, shall take part in the performance of public functions in the Government of the Philippine Islands, or shall perform in the said Government or any of its branches public duties as an employee, agent or subordinate official, of any rank or class, shall be deemed to be a public officer. (Article 203, Revised Penal Code).
[14] The term includes only persons who perform some of the functions of the Government of the Philippine Islands. (U.S. v. Smith, 39 Phil. 537 [1919]).
One who has a duty to perform concerning the public; and he is not less a public officer when his duty is confined to narrow limits, because it is his duty and its nature which makes him a public officer and not the extent of his authority. (Manila Terminal Co. v. CIR, 83 Phil. 567 [1949]).
[15] 430 Phil. 658 (2002).
[16] Id., pp. 672-673. Citing F.R. MECHEM, A TREATISE ON THE LAW OF PUBLIC OFFICES AND OFFICERS, § 1.
[17] Supra.