Republic of the
Supreme Court
THIRD DIVISION
PRESIDENTIAL
COMMISSION G.R. NO. 140231
ON
GOOD GOVERNMENT
(PCGG),
represented by
L.
Petitioner,
Present:
YNARES-SANTIAGO,
J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
and
NACHURA,
JJ.
HON.
ANIANO A. DESIERTO,
Office
of the Ombudsman-Manila,
CONCERNED
MEMBERS OF THE PNB
BOARD
OF DIRECTORS,
REYNALDO
TUASON, CARLOS
CAJELO,
JOSE BARQUILLO, JR.,
LORETO
SOLSONA, PRIMICIAS
BANAGA,
JOHN DOES, and
INDUSTRIES,
INC. (NOCOSII), Promulgated:
Respondents.
x-
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - x
D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
The Presidential Commission on Good Government[1]
(petitioner) filed the herein Petition for Certiorari under Rule 65 of
the Rules of Court assailing the Resolution[2]
dated May 21, 1999 of Ombudsman Aniano A. Desierto in OMB No. 0-95-0890 which dismissed petitioner's
criminal complaint for violation of Section 3(e) and (g) of Republic Act (R.A.)
No. 3019[3]
against concerned members of Philippine National Bank (PNB) Board of Directors
and Northern Cotabato Sugar Industries, Inc.
(NOCOSII) officers, namely: Reynaldo Tuason, Carlos Cajelo, Jose Barquillo, Jr.,
Loreto Solsona, Primicias Banaga and John Does (respondents); and the Order[4]
dated July 23, 1999 which denied petitioner's Motion for Reconsideration.
The
facts:
On
On
The Memorandum set the
following criteria to show the earmarks of a “behest loan,” to wit: “a) it is undercollaterized; b) the borrower corporation is
undercapitalized; c) a direct or indirect endorsement by high government
officials like presence of marginal notes; d) the stockholders, officers or
agents of the borrower corporation are identified as cronies; e) a deviation of
use of loan proceeds from the purpose intended; f) the use of corporate
layering; g) the non-feasibility of the project for which financing is being
sought; and, h) the extraordinary speed in which the loan release was made.”
Among the accounts
referred to the Committee's Technical Working Group (TWG) were the loan
transactions between NOCOSII and PNB.
After
it had examined and studied all the documents relative to the said loan
transactions, the Committee classified the loans obtained by NOCOSII from PNB
as behest because of NOCOSII’s insufficient capital
and inadequate collaterals.
Specifically, the Committee's investigation revealed that in 1975,
NOCOSII obtained loans by way of Stand-By Letters of Credit from the PNB; that
NOCOSII was able to get 155% loan value from the offered collateral or an
excess of 85% from the required percentage limit; that the plant site offered
as one of the collaterals was a public land contrary to the General Banking
Act; that by virtue of the marginal note of then President Marcos in the letter
of Cajelo, NOCOSII was allowed to use the public land
as plant site and to dispense with the mortgage requirement of PNB; that NOCOSII's paid-up capital at the time of the approval of
the guaranty was only P2,500,000.00 or only about 6% of its obligation.
Based
on the Sworn Statement of PCGG consultant Orlando Salvador, petitioner filed
with the Office of the Ombudsman the criminal complaint against
respondents. Petitioner alleges that respondents
violated the following provisions of Section 3 (e) and (g) of R.A. No. 3019:
Sec. 3. Corrupt practices of public officers. – In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:
x x x
e. Causing undue injury to any party, including the Government or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.
x x x
g. Entering, on behalf of the Government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby.
The
respondents failed to submit any responsive pleading before the the Ombudsman, prompting Graft Investigator Officer (GIO) I
Melinda S. Diaz-Salcedo to resolve the case based on
the available evidence.
In
a Resolution dated
Petitioner
filed a Motion for Reconsideration[6]
but it was denied by GIO Diaz-Salcedo in the Order
dated
Forthwith,
petitioner elevated the case to this Court and in support of its petition
alleges that:
A) The Respondent Ombudsman gravely abused
his discretion or acted without or in excess of jurisdiction in dismissing the
complaint filed by the Petitioner on the ground of Prescription considering
that:
1. THE RIGHT OF THE STATE TO RECOVER BEHEST LOANS AS ILL-GOTTEN WEALTH IS IMPRESCRIPTIBLE UNDER ARTICLE XI, SECTION 15, OF THE 1987 CONSTITUTION;
2. PRESCRIPTION DOES NOT RUN IN FAVOR OF A TRUSTEE TO THE PREJUDICE OF THE BENEFICIARY;
3. THE OFFENSES CHARGED ARE IN THE NATURE OF CONTINUING CRIMES AS THE STATE CONTINUES TO SUFFER INJURY ON EACH DAY OF DEFAULT IN PAYMENT. HENCE, PRESCRIPTION DOES NOT APPLY;
4. PRESCRIPTION AS A MATTER OF DEFENSE MUST BE PLEADED, OTHERWISE, IT IS DEEMED WAIVED;
5. PRESCRIPTION HAS NOT BEEN INVOKED IN THIS CASE. SINCE IT MAY BE WAIVED OR MAY NOT BE SET IN DEFENSE, THE OMBUDSMAN CANNOT MOTU PROPRIO DISMISS THE COMPLAINT ON GROUND OF PRESCRIPTION;
6. ARTICLE 91 OF THE REVISED PENAL CODE WHICH ADOPTS THE “DISCOVERY RULE” SHALL APPLY IN THIS CASE;
7. THE LOAN CONTRACT AS OTHER LOAN TRANSACTIONS IN THE NATURE OF BEHEST LOANS ARE KEPT SECRET.[8]
B) The respondent
Ombudsman gravely abused his discretion or acted without or in excess of
jurisdiction in not finding that a probable cause exists for violation by the
private respondents of section 3 (e) and (g) of RA 3019 despite the presence of
clear, overwhelming and unrebutted evidence.[9]
In
its Comment, the Ombudsman, without delving on the issue of prescription, in
view of Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (1999),[10]
contends that its finding of insufficiency of evidence or lack of probable
cause against respondents deserves great weight and respect, and must be
accorded full weight and credit.
No
comment was filed by the rest of the respondents.
The
issue before the Court is whether the Ombudsman committed grave abuse of
discretion in ruling that: (a) the offense leveled against respondents has
prescribed; and (b) no probable cause exists against respondents.
The
petition is partly meritorious.
Respondent
Ombudsman committed grave abuse of discretion in dismissing the subject
complaint on the ground of prescription.
Respondents
members of the PNB Board of Directors and Officers of NOCOSII are charged with
violation of R.A. No. 3019, a special law.
Amending said law, Section 4, Batas Pambansa
Blg. 195,[11]
increased the prescriptive period from ten to fifteen years.
The
applicable law in the computation of the prescriptive period is Section 2 of
Act No. 3326,[12] as
amended, which provides:
Sec. 2. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same not be known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.
The prescription shall be interrupted when proceedings are instituted against the guilty person, and shall begin to run again if the proceedings are dismissed for reasons not constituting jeopardy.
The
issue of prescription has long been laid to rest in the aforementioned Presidential
Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto,[13] where the Court held:
x x x it was well-nigh impossible for the State, the aggrieved party, to have known the violations of R.A. No. 3019 at the time the questioned transactions were made because, as alleged, the public officials concerned connived or conspired with the “beneficiaries of the loans.’ Thus, we agree with the COMMITTEE that the prescriptive period for the offenses with which respondents in OMB-0-96-0968 were charged should be computed from the discovery of the commission thereof and not from the day of such commission.
The assertion by the Ombudsman that the phrase ‘if the same not be
known’ in Section 2 of Act No. 3326 does not mean ‘lack of knowledge’ but that
the crime ‘is not reasonably knowable’ is unacceptable, as it provides an
interpretation that defeats or negates the intent of the law, which is written
in a clear and unambiguous language and thus provides no room for
interpretation but only application.[14]
The Court reiterated the above ruling
in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto (2001),[15] thus:
In cases involving violations of R.A. No. 3019 committed prior to the February 1986 Edsa Revolution that ousted President Ferdinand E. Marcos, we ruled that the government as the aggrieved party could not have known of the violations at the time the questioned transactions were made (PCGG vs. Desierto, G.R. No. 140232, January 19, 2001, 349 SCRA 767; Domingo v. Sandiganbayan, supra, Note 14; Presidential Ad Hoc Fact Finding Committee on Behest Loans v. Desierto, supra, Note 16). Moreover, no person would have dared to question the legality of those transactions. Thus, the counting of the prescriptive period commenced from the date of discovery of the offense in 1992 after an exhaustive investigation by the Presidential Ad Hoc Committee on Behest Loans.
As to when the period of prescription was interrupted, the second
paragraph of Section 2, Act No. 3326, as amended, provides that prescription is
interrupted ‘when proceedings are instituted against the guilty person.[16]
Records
show that the act complained of was discovered in 1992. The complaint was filed
with the Office of the Ombudsman on
On
the issue of whether the Ombudsman committed grave abuse of discretion in
finding that no probable cause exists against respondents, it must be stressed
that the Ombudsman is empowered to determine whether
there exists reasonable ground to believe that a crime has been committed and
that the accused is probably guilty thereof and, thereafter, to file the
corresponding information with the appropriate courts.[18]
Settled is the rule that the Supreme Court will not ordinarily interfere with
the Ombudsman’s exercise of his investigatory and prosecutory
powers without good and compelling reasons to indicate otherwise.[19]
Said exercise of powers is based upon his constitutional mandate[20]
and the courts will not interfere in its exercise. The rule is based not only
upon respect for the investigatory and prosecutory
powers granted by the Constitution to the Office of the Ombudsman, but upon
practicality as well. Otherwise, innumerable petitions seeking dismissal of
investigatory proceedings conducted by the Ombudsman will grievously hamper the
functions of the office and the courts, in much the same way that courts will
be swamped if they had to review the exercise of discretion on the part of
public prosecutors each time they decided to file an information or dismiss a complaint
by a private complainant.[21]
While
there are certain instances when this Court may intervene in the prosecution of cases, such as, (1) when
necessary to afford adequate protection to the constitutional rights of the
accused; (2) when necessary for the orderly administration of justice or to
avoid oppression or multiplicity of actions; (3) when there is a prejudicial
question which is sub-judice; (4) when the acts of
the officer are without or in excess of authority; (5) where the prosecution is
under an invalid law, ordinance or regulation; (6) when double jeopardy is
clearly apparent; (7) where the court has no jurisdiction over the offense; (8)
where it is a case of persecution rather than prosecution; (9) where the
charges are manifestly false and motivated by the lust for vengeance; and (10)
when there is clearly no prima facie case against the accused and a
motion to quash on that ground has been denied,[22]
none apply here.
After
examination of the records and the evidence presented
by petitioner, the Court finds no cogent reason to disturb the findings of the
Ombudsman.
No grave abuse of discretion can be attributed to the
Ombudsman. Grave abuse of discretion
implies a capricious and whimsical exercise of judgment tantamount to lack of
jurisdiction.[23]
The exercise of power must have been done in an arbitrary or despotic manner by
reason of passion or personal hostility. It must be so patent and gross as to
amount to an evasion of positive duty or a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law.[24]
The disquisition of GIO Diaz-Salcedo,
in dismissing the criminal complaint, as approved by Ombudsman Desierto, is worth-quoting, thus:
Taking into consideration the provisions of Administrative Order No. 13 and Memorandum Order No. 61, the subject transactions can not be classified as behest.
Evaluation of the
records of this case reveals that the loans acquired by NOCOSII are actually
foreign loans from Midland Bank Ltd. of
Anent complainant's
claim that the collaterals offered by NOCOSII are insufficient, it should be
noted that under PNB Board Resolution No. 689 dated July 30, 1975, one of the
conditions imposed to NOCOSII was the execution of contract assigning all NOCOSII's share of sugar and molasses to PNB. NOCOSII was also required to increase its
paid up capital at P5,000,000.00 a year starting April 30, 1976 up to
April 30, 1980 or a total of P25,000,000.00. In addition thereto, the stockholders of
NOCOSII were required to pledge or assign all their present and future shares
to PNB while the accommodation remains standing. The proposed plant site which was offered as
collateral was estimated to cost P307,903,000.00. The foregoing collaterals offered by NOCOSII
are more than sufficient to cover the loans of P333,465,260.00.
Furthermore, since the loan was approved by PNB, it presupposes that all the required clearances were submitted by NOCOSII including the clearance from the Office of the President; and having complied with all the documentary requirements, NOCOSII became entitled to the release of the loan.
Complainant further
alleged that NOCOSII was undercapitalized because its paid up capital was only P50,000,000.00. Complainant, however, failed to consider the
other assets of NOCOSII which also form part of its capital. x x x[25]
The
finding of insufficiency of evidence or lack of probable cause by the Ombudsman
is borne out by the evidence presented by petitioner: firstly, there
were no direct loans released by PNB but merely credit accommodations to
guaranty NOCOSII's foreign loans from Midland Bank
Ltd. of London; secondly, NOCOSII effectively came under government
control since 1975 when PNB acquired a majority of the voting rights in NOCOSII
and was given the power to appoint a comptroller therein; thirdly, PNB's credit accommodations to NOCOSII between 1975 and
1981 in the aggregate sum of P333,465,260.00 were sufficiently secured
by: (1) the Assignment of Subscription Rights and/or Pledge of Shares dated
September 5, 1975 whereby NOCOSII officers pledged their shares of stock,
representing 90% of NOCOSII's subscribed capital
stock, and assigned their subscription rights to future stocks in favor of PNB;[26]
(2) the Deed of Assignment dated September 5, 1975 whereby NOCOSII assigned its
share of sugar and molasses from the operation of its sugar central located at Barrio
Mateo, Matalam, North Cotabato
in favor of PNB;[27] (3) the
Joint and Solidary Agreement dated September 5, 1975
whereby the NOCOSII officers bound themselves jointly and severally liable with
the corporation for the payment of NOCOSII's
obligations to PNB;[28]
(4) the Real Estate Mortgage dated October 2, 1981 whereby NOCOSII mortgaged
various buildings, machineries and equipments, otherwise known as the NOCOSII
Sugar Mill Plant, with an estimated value of P307,593,000.00 in favor of
PNB;[29]
and (5) the Chattel Mortgage with Power of Attorney dated October 2, 1981
whereby NOCOSII mortgaged various transportation, agricultural and heavy
equipment in favor of the PNB;[30] fourthly, PNB imposed other
conditions, such as, (1) the submission by NOCOSII of the Central Bank's
approval of its foreign loans; (2) the submission by NOCOSII of the required
clearances from the National Economic Development Authority (NEDA) and/or
Presidential Committee on Sugar Industry (PHILSUGIN); (3) submission by NOCOSII
of its milling contracts covering a total area of not less than 14,000
hectares; (4) submission by NOCOSII of the government permit that the planters
can cultivate the required hectarage; (5) further
increase in NOCOSII's total paid-in capital to P25,000,000.00
at P5,000,000.00 a year starting April 30, 1976 up to April 30, 1980;
(6) deposit in NOCOSII's account with the PNB of all
cash proceeds of NOCOSII's foreign loans the
disposition of which shall be subject to the bank's control; and, (7)
designation by the PNB of its own representatives in NOCOSII's
Board of Directors and its own comptroller who shall have the authority to
control all disbursements and receipts of funds of NOCOSII.[31]
The
herein assailed Orders being supported by substantial evidence, there is no
basis for the Court to
exercise its supervisory powers over the ruling of the Ombudsman. As long as
substantial evidence supports the Ombudsman’s ruling, that decision will not be
overturned.[32]
WHEREFORE, the petition is DISMISSED. Except as to prescription, the assailed Resolution dated
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V.
Associate Justice Associate Justice
ATTESTATION
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.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson, Third 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, it is hereby
certified 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
Chief Justice
[1] Represented by
[2] Rollo, p. 31.
[3] Otherwise known as the Anti-Graft and Corrupt Practices Act.
[4] Rollo, p. 35.
[5] Rollo, p. 31.
[6]
[7]
[8]
[9]
[10] 375 Phil. 697 (1999).
[11] Effective
[12] An Act to Establish Periods Of Prescription for Violations Penalized By Special Acts and Municipal Ordinances And To Provide When Prescription Shall Begin To Run.
[13] Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 10.
[14] Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 10, at 724.
[15] 415 Phil. 723 (2001).
[16]
[17] Rollo, p. 530.
[18] Presidential
Commission on Good Government (PCGG) v. Desierto, G.R. No. 139675, July 21, 2006, 496 SCRA 112, 121; Fuentes,
Jr. v. Office of the Ombudsman, G.R. No. 164865, November 11, 2005,
474 SCRA 779, 789; Esquivel v.
Ombudsman, 437 Phil. 702, 711 (2002); Venus v.
Desierto, 358 Phil. 675, 694 (1998).
[19] Calim v. Guerrero, G.R. No. 156527, March 5, 2007; Esquivel v. Ombudsman, supra; Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto, supra note 16, at 721.
[20] CONST. Art. X1, Sec. 13. The Office of the Ombudsman shall have the following powers, functions, and duties:
(1) Investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient....
(8) Promulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law.
[21] Dumangcas,
Jr. v. Marcelo, G.R. No. 159949, February 27, 2006, 483 SCRA 301, 314; Osorio
v. Desierto, G.R. No. 156652, October 13, 2005,
472 SCRA 559, 574; Olivarez v. Sandiganbayan, G.R.
No. 118533, October 4, 1995, 248 SCRA 700, 709-710; Ocampo
IV v. The Hon. Ombudsman, G.R. Nos. 103446-47,
[22] Pontejos v. Office of the Ombudsman, G.R. Nos. 158613-14, February 22, 2006, 483 SCRA 83, 93; Villanueva v. Ople, G.R. No. 165125, November 18, 2005, 475 SCRA 539, 555; Mendoza-Arce v. Office of the Ombudsman (Visayas), 430 Phil. 101, 113 (2002); Brocka v. Enrile, G.R. Nos. 69863-65, December 10, 1990, 192 SCRA 183, 188-189.
[23] Pontejos v. Office of the Ombudsman, supra note 22, at 94; Soria v. Desierto, G.R. Nos. 153524-25, January 31, 2005, 450 SCRA 339, 345; Perez v. Office of the Ombudsman, G.R. No. 131445, May 27, 2004, 429 SCRA 357, 361.
[24] Pontejos v. Office of the Ombudsman, supra; Soria v. Desierto, supra; Perez v. Office of the Ombudsman, supra.
[25] Rollo, pp. 32-33.
[26] Evidence No. 33, rollo, pp. 313-321.
[27] Evidence No. 32, id. at 310-312.
[28] Evidence No. 27, id. at 280-292.
[29] Evidence No. 25, id. at 264-267.
[30] Evidence No. 26, id. at 268-279.
[31] Evidence Nos. 19-24, id. at 209-263.
[32] Presidential Commission on Good Government (PCGG) v. Desierto, G.R. No. 139675, July 21, 2006, 496 SCRA 112, 122; Salvador v. Desierto, supra note 16, at 83; Morong Water District v. Office of the Deputy Ombudsman, 385 Phil. 45, 58 (2000); Tan v. Office of the Ombudsman, 356 Phil. 626, 636 (1998).