FIRST
DIVISION
|
DINO A.
CRUCILLO,
Petitioner, - versus - OFFICE
OF THE OMBUDSMAN and the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT,
Respondents. x----------------------------------------------x JOSE R.
TENGCO, JR.,
Petitioner, - versus - HON.
SIMEON V. MARCELO in his capacity as the OMBUDSMAN and the PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT,
Respondents. |
|
G.R. No. 159876 G.R. No.
159877 Present:
PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, AZCUNA, and GARCIA, JJ. Promulgated: June 26, 2007 |
X-------------------------------------------------------------------------------------------------------X
D E C I S
I O N
GARCIA, J.:
In
these consolidated petitions for certiorari
under Rule 65 of the Rules of Court, with prayer for injunctive relief, petitioners
Dino A. Crucillo (Crucillo, for short) and
Jose R. Tengco, Jr.[1] (Tengco,
for short) seek the annulment and setting aside of the Order/Resolution[2]
dated March 10, 2003 of the Office of the Ombudsman (OOMB)[3] in
OMB Case No. 0-96-0794, as reiterated
in a Resolution[4] of July
21, 2003, finding probable cause to proceed against both petitioners for
violation of Section 3(e) and (g)[5] of
Republic Act (R.A.) No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act.
The instant
case turns on the charge filed by the respondent Presidential Commission on
Good Government (PCGG) against the then board members/officers of both Phil-Asia
Food Industries Corporation (PAFICO) and the Development Bank of the
Philippines (DBP) for corrupt practices arising from the alleged “behest” loan DBP extended to PAFICO to finance the latter’s
soybeans processing plant project. Memorandum
Circular (MC) No. 61,[6] series
of 1992, lists several criteria to show the earmarks of a “behest loan.” Among these are: (1) the loan was under
collateralized; (2) the borrowing entity was undercapitalized; (3) endorsement
by high government officials; and 4) unusual speed in releasing the loan
proceeds.
At
times material to this case, petitioner Crucillo was the Manager of the DBP’s Agricultural
Projects Department I (APD I). Petitioner Tengco, on the other hand, sat as member of DBP’s Board of Governors. DBP’s charter[7] at
that time empowered the bank “to grant loans to [and] to purchase preferred
redeemable shares of stock of any agricultural and/or industrial enterprises .
. . to finance their fixed and operating capital requirements. All . . . loans shall be granted only under such
terms, conditions and restrictions as the bank shall determine.”
Records
yield the following facts:
On
March 13, 1996, Atty. Orlando L. Salvador, then PCGG Consultant of the
Presidential Ad Hoc Committee on
Behest Loans (the Behest Loan Committee, for short), filed with the OOMB a Sworn Statement[8] therein stating that, sometime in March 1979,
PAFICO applied for – and later secured approval from the DBP under Board Resolution
(B/R) 2826, s. of 1979 – foreign currency loans (the subject loan, hereinafter).
At the then prevailing
exchange rate of US$1: Php 7.50, the total peso equivalent of the loan was Php 151,999,995.00.
As alleged in the sworn statement, forming part of the accommodation package was the investment
the DBP had to put up in PAFICO
preferred shares in the amount of Php 40 Million to cover part of PAFICO’s pre-operating
expenses and the working capital requirements. In all then,
the approved loan was, per Atty. Salvador, in the aggregate amount of Php 191,999,995.00 (P151,999,995.00
+ P40,000,000.00 = P191,999,995.00).[9] The
Sworn Statement further alleged as
follows:
c. The original loan was secured
as follows (Annex 4, Evidence 11)
1. Existing Assets
xxx
Total existing assets P1,405,325
2. Assets to be acquired
xxx xxx
xxx
Total assets to be
acquired P 194,068,991
Grand Total P 195,474,316
% Loan Value
80%
d) PAFICO’s paid up capital as of
(Annex 4, Evidence 14) - - - - -
- - - - - - - P4.5 million
5. Said evidence show that the loan was without sufficient collateral
whereby DBP had to put-up equity in the amount of P40 million to cover
the collateral deficiency … and PAFICO
itself had no sufficient capital to
be entitled of the loan (sic), paid-up capital amounts to P4.5 million
only.
6. PAFICO obtained additional concessions and/or
benefits … and was approved by the DBP Board under B/R 1809 … such as:
a) The deletion of [PAFICO board members] …
Antonio Tan, Miguel Gonzales and Federico Ballon as signatories of the loan …;
b) The exclusion of Messrs. Benedicto and Sabido
as co-obligors;
c) xxx xxx xxx
xxx xxx
xxx. (Emphasis and words in brackets added).
The Sworn Statement, docketed as OMB Case No. 0-96-0794, charged the
following individuals from DBP, namely: Rafael A. Sison, Jose V. de Ocampo, Tengco, Recio M. Garcia and Crucillo; and the then members of the PAFICO
Board, to wit: Roberto A. Benedicto (now deceased), and four others, with violation
of Section 3(e) and (g) of R.A. No. 3019.
Some
time after the filing of the Sworn
Statement, the following events transpired:
1.
In a Resolution[10] of
2.
After the PCGG’s motion for reconsideration was denied, the case was referred to GIO Evangeline Grafil who, in her
review-report, recommended giving due
course to the PCGG’s motion for
reconsideration. GIO Grafil, however, recommended that those involved be charged
only with violation of Sec. 3(e) R.A. No. 3019. [11]
Special Prosecution Officer (SPO)
Victorio Tabanguil disagreed with GIO Grafil’s recommendation and concurred
with GIO Salvador’s resolution. [12]
3. Owing to the conflicting positions
taken by the reviewing officials, then Omb. Desierto referred the case to the
Office of the Legal Affairs (OLA) for another review.
On
4. On
That during the period from December 7,
1979 to June 8, 1982, …, accused RAFAEL A. SISON, JOSE V. DE OCAMPO, JOSE R.
TENGCO and RECIO M. GARCIA, all public officers, being the Board Members of the
… (DBP) and DINO A. CRUCILLO, also a public officer, being then the Manager of
the DBP, while in the performance of their official and administrative
functions as such, taking advantage of the same, conspiring together and mutually helping with accused ROBERTO A.
BENEDICTO, ROBERTO M. SABIDO, [et al.],
private individuals and officials of the … (PAFICO), a private corporation
engaged primarily in “Soybean Processing”, with evident bad faith and manifest partiality, did then and there
willfully, unlawfully and criminally give unwarranted benefit, advantage, or
preference to PAFICO by facilitating and granting a loan to the said PAFICO in
the total sum P207,159,148.42 …, despite the fact that at the time of
the grant thereof, PAFICO had no
adequate collateral to offer and was also undercapitalized, thus causing
undue injury to the government in the aforestated amount of the loan.
CONTRARY TO LAW. (Emphasis and words in
brackets added)
5. On
Following the submission by those
concerned of their counter-affidavits and countervailing evidence, the EPIB,
through GIO Myrna A. Corral, via a Resolution[15]
dated
WHEREFORE, in view of the foregoing, it
is hereby recommended that the charges against respondents Rafael A. Sison,
Jose V. De Ocampo … Jose R. Tengco, [et
al.] for violation of Section 3(e) and (g) of [R.A.] No. 3019 be DISMISSED,
the same having been previously resolved
with finality on May 18, 1992 by this Office in TBP No. 87-02383 entitled
DBP v. Phil-Asia Food Industries Corporation (PAFICO).
SO RESOLVED (Words in bracket and
emphasis added.)
On
Then
came the appointment of respondent Simeon V. Marcelo as Ombudsman.
On
IN
VIEW OF THE FOREGOING,
the … said Motion for Reconsideration dated
SO ORDERED. (Emphasis in the original;
Words in brackets added.)
The petitioners’
motion for reconsideration was denied in a resolution[18]
of
Hence,
these consolidated petitions. In a Resolution[19] of
January 26, 2004 in G.R. No. 159876, the Court issued a Temporary Restraining
Order enjoining the Sandiganbayan from proceeding with the hearing of Criminal
Case No. 26539 (OMB Case No. 0-96-0794).
It is the
petitioners’ common contention that the instant case is barred by res judicata, petitioner Tengco submitting,
in addition, that his liability, if there be any, was extinguished by the compromise
agreement entered into by and between the Republic of the Philippines (RP), through
the PCGG, and Benedicto wherein the
latter ceded the PAFICO complex to the PCGG which then sold it to the General
Milling Corporation, through the Asset Privatization Trust, for Php 330 million.[20] This
sale, petitioner Tengco would claim, argues against the idea of the government incurring
damages or placed at a disadvantage as a consequence to the alleged behest loan
grant.
The other
grounds petitioner Tengco advanced for the allowance of his petition are as
follows:
4. THE
MANIFESTLY ERRONEOUS FINDINGS OF RESPONDENT OMBUDSMAN THAT THE P40M
EXTENDED TO PAFICO WAS ALLEGEDLY A “LOAN” AND NOT EQUITY INVESTMENT; THAT THE
EQUITY ARRANGEMENT WAS ALLEGEDLY “A MERE SUBTERFUGE TO ‘DRESS UP’ THE VALUE OF
PAFICO’S COLLATERALS”; OR ALLEGEDLY “TO FRAUDULENTLY SHOW THAT PAFICO HAD MORE
THAN ENOUGH COLLATERAL TO SECURE ITS OBLIGATIONS” AND THAT THE LOANS ARE
“UNDER-COLLATERALIZED” ARE COMPLETELY NOT JUSTIFIED AS THEY ARE SQUARELY
NEGATED AND CATEGORICALLY DISPROVED BY EVIDENCE.
5.
THE FINDINGS OF RESPONDENT
OMBUDSMAN THAT PAFICO WAS UNDER-CAPITALIZED AND THAT “THE P40 MILLION EQUITY
INFUSION BY DBP WAS USED TO INCREASE THE P70 MILLION CAPITAL REQUIREMENT
OF PAFICO” ARE ALSO SQUARELY NEGATED AND CATEGORICALLY DISPROVED BY THE
RECORDS; AGAIN RESPONDENT OMBUDSMAN COMMITTED GRAVE ABUSE OF DISCRETION IN
MAKING CONCLUSIONS THAT ARE COMPLETELY BASELESS AND DIRECTLY DISPROVED BY THE
EVIDENCE.
The issues in the instant petitions can be
summed up into whether respondent OOMB,
through then Omb. Marcelo, committed grave abuse of discretion amounting to
lack of jurisdiction when it issued the assailed resolutions which would pave
the way for the continued prosecution of the petitioners.
To the
petitioners, respondent OOMB gravely abused its discretion in coming up with
the assailed resolutions. For, in so
doing, it veritably reversed its own resolutions previously rendered by then Omb. Conrado
Vasquez and then Omb. Desierto who, between them, thrice dismissed the same
complaint for alleged violation of Sec. 3(e) and (g) of R.A. No. 3019 lodged against
the herein petitioners and the PAFICO group impleaded as respondents in OMB
Case No. 0-96-0794 and as accused in Criminal Case No. 26539.
In
particular relation to the invocation of the res judicata principle and the RP-Benedicto compromise agreement, three
(3) factual premises need at the outset to be established or underscored.
First, the OOMB had indeed previously
passed upon the issue of whether the subject loan partakes of a behest loan accommodation. The
OOMB, particularly during the watch of Omb. Vasquez, had dismissed with
finality a case involving the same subject matter and parties.
The case adverted to is TBP Case No. 87-02388[21] (also denominated as TBP Case No. 87-02383 in certain documents and pleadings), a suit instituted by the “post Edsa I” DBP management against
PAFICO involving what the former considered to be a “behest” loan approved by its former board in favor of
PAFICO. In its Complaint[22] in TBP Case No. 87-02388, DBP prayed, in gist, that appropriate civil
and/or criminal proceedings be instituted against all those involved in the grant of the subject loan.[23]
In the
Resolution[24] of October 4, 1991 and approved in July 1992, Omb. Vasquez (the Vasquez
Resolution) dismissed TBP Case No. 87-02388.
Second, via a Resolution[25] of
Thereafter,
on the basis of the EPIB Resolution, OOMB Prosecutor Jesus A. Michael filed in
Criminal Case No. 26539 a Motion to Withdraw Information.
It is
this EPIB Resolution of which respondent PCGG sought reconsideration. The
PCGG’s motion for reconsideration, in turn, was what the OOMB, this time under
Omb. Marcelo, granted via the assailed
Order/Resolution of
Third, in Republic v. Benedicto,[26] involving, among other things, the subject PAFICO
loan, the Court declared as valid the RP-Benedicto Compromise Agreement executed on
It is
the petitioners’ threshold posture that the dismissal of TBP Case No. 87-02388
and the initial dismissal of OMB Case No. 0-96-0794, which was rooted on the
dismissal of TBP Case No. 87-02388, bar the continued prosecution of OMB Case
No. 0-96-0794 against them.
Respondent
OOMB, represented by the Office of the Special Prosecutor (OSP), counters that
the dismissal of TBP Case No. 87-02388 cannot plausibly be set up, pursuant to
the res judicata principle, as basis for
dismissing OMB Case No. 0-96-0794. As
argued, the resolutions involved were not, for one, rendered by the courts. For another, there is no identity of parties in
the two cases, TBP Case No. 87-02388 being a suit filed by DBP against PAFICO,
whereas the Committee on Behest Loan is the complainant in OMB Case No. 0-96-0794. Pressing the point
on identity, respondent OOMB alleged that the petitioners were neither named
respondents in TBP Case No. 87-02388 nor did they have interests similar with
that of the bank. As further alleged, the cause of action in OMB Case No.
0-96-0794 pivots on the issue of whether
the loan extended by DBP to PAFICO falls under the category of a behest loan
which, if so, would render the herein petitioners liable under R.A. No. 3019 for
giving unwarranted benefits to PAFICO to the prejudice of the Government. TBP
Case No. 87-02388, on the other hand, touched on the favored treatment given by
the DBP to PAFICO.
We are
inclined to grant the petitions.
The
Court does not ordinarily interfere with the Ombudsman’s finding and call on the
existence of a probable cause.[28] Practical consideration as well as respect for
the Constitution and R.A. No. 6770[29]
which have endowed the OOMB with a wide latitude of investigatory and
prosecutory prerogatives virtually free from legislative, executive or judicial
intervention are the moving reasons for this rule.[30]
This rule
of non-interference is, however, far from absolute. Case law has it that the
Court will intervene upon proof of commission of grave abuse of discretion by
the Ombudsman.[31] In
other words, the Court is not precluded from reviewing the Ombudsman’s action
when there is grave abuse of discretion, in which case the certiorari jurisdiction of the
Court may exceptionally be invoked
pursuant to Section 1, Article VIII of the Constitution.[32] Accordingly, where grave abuse of discretion
taints the Ombudsman’s finding as to the existence of probable cause, the aggrieved party may file a petition for certiorari under Rule 65.[33] In Cabahug
v. People,[34]
the Court, citing Brocka v. Enrile,[35]
enumerated the circumstances where the courts may interfere with the
investigatory power of fiscals and the Ombudsman and thus stay or altogether restrain
criminal
prosecutions.
Among these are:
(a)
To
afford protection to the constitutional rights of the accused;
(b)
When
necessary for the orderly administration of justice or to avoid oppression or
multiplicity of actions;
(c)
When
double jeopardy is clearly apparent;
(d)
Where
it is a case of persecution rather than prosecution;
(e)
Where
there is clearly no prima facie case against the accused and a motion to quash
on that ground has been denied; and
(f)
When
manifest bad faith accompanies the filing of the criminal charge.
The
issue here is whether the petitioners may validly invoke any or a mix of the
foregoing exceptions.
There is more to the arguments on res judicata that calls for the Court’s exercise
of its authority to restrain the prosecution of the petitioners. As things
stand, the OOMB no less had determined that no prima facie case against herein petitioners obtains which would
warrant their prosecution. As can be
readily observed, the averments in the Sworn
Statement[36]
of Atty. Salvador indisputably relate to the same PAFICO loan already resolved
with finality in the Resolution in TBP Case No. 87-02388.
Significantly,
during the proceedings after the filing of the Sworn Statement, the OOMB struggled on the matter of the existence
of a prima facie case to justify the
filing of an anti-graft case against the petitioners and their alleged
co-conspirators. To be precise, the OOMB
did flip-flopping acts on its findings and conclusion respecting the behest
nature of the subject loan and, with it, the propriety of filing an anti-graft law
violation against the petitioners, et al. And there can hardly be any dispute that
respondent OOMB, thru Omb. Marcelo, ignored previous dismissals of a similar
case involving the same transaction and practically the same personalities.
As may
be recalled, GIO Fe Salvador, in her Resolution of
There is
no dispute that both TBP Case No. 87-02388 and OMB Case No. 0-96-0794 involve the
very same loan transaction granted by DBP to PAFICO. And it bears reiterating that the Vasquez Resolution
in TBP Case No. 87-02388 answered in the negative the question of whether the
subject loan is a behest loan. Not only that. The same Vasquez Resolution categorically
declared that the loan transaction was not entered into with manifest partiality
or evident bad faith so as to make out a charge for violation of Section 3(e)
of R.A. No. 3019.
The May 1992 Vasquez Resolution was doubtless
a final dismissal on the merits of TBP Case No. 87-02388. As it were, no motion
for reconsideration of the same resolution was taken, nor was it challenged before,
let alone reversed by, the proper authority. By the terms of the dismissal, the criminal
prosecution of the members of the DBP Board of Governors as well as the
incorporators of PAFICO was effectively enjoined, thus:
This case involves one of the so-called
behest loans granted by complainant [DBP] in favor of … PAFICO.
xxx xxx xxx
In this regard, there can be no basis for
indicting the individual members of the [DBP]
Board of Governors who acted collectively on the aforesaid resolutions
principally because there is no reason to assume that they acted to favor
PAFICO or any of its directors or stockholders.
In case the [DBP] suffered undue injury through the non-payment by
PAFICO of its loans or the insufficiency of the collaterals that it presented,
responsibility therefor cannot be pinned on them because as previously stated, they did not perform any act of manifest partiality
or evident bad faith. Thus, prosecution under [R.A.] No. 3019 is untenable.
xxx xxx xxx (Emphasis and words in bracket added.)
Not to
be overlooked is the fact that Omb. Desierto, when he approved the dismissal of
OMB Case No. 0-96-0794 pursuant to a resolution dated June 3, 2002, took into account
the involvement of the same subject loan, same
bank transactions, and virtually the same parties as those in TBP Case
No. 87-02388. The following excerpts from the said
After going over the different claims and
contentions of respondents Sison [et al.] . . ., we find the third defense
averred by the other respondents to be very significant to be overlooked,
particularly the previous Ombudsman’s [Vasquez’s] findings supporting the
dismissal of the charges against the respondents in TBP No. 87-02383 (sic).
This issue was only brought into light when the respondents were given a
chance to ventilate their defenses in this preliminary investigation. Records show that an Information for
violation of Section 3 (e) of R.A. No. 3019 was filed with the Sandiganbayan by
this Office against the herein respondents without the benefit of preliminary
investigation, a procedural lapse ….
A perusal of the records of this Office
in TBP No. 87-02383 (sic) shows that
said case involves the same parties and
the same cause of action over the same bank transactions as the case now before
us. Though it appears therefrom that the complainant is the [DBP], it is
the same case now filed before us by the Fact Finding Committee on Behest Loans
(FFCBL). The case before us now is based
on the technical report of the Technical Working Group of the different
government financing institutions, one of the members of which is the [DBP].
Records show that TBP No. 87-02383 (sic) was filed in 1987 while the [Behest
Loan Committee] was only organized in October 1992 …. For this considerable length of time, we
cannot fault the [Behest Loan Committee] for failing to notice that this case
involving foreign currency loan availed of from the DBP by … (PAFICO) had
already been resolved and dismissed by the Office of the Special Prosecutor,
the Office then principally tasked to conduct the preliminary investigation on the
anti-graft cases filed before it. As
borne by the records, it was no less than Ombudsman Aniano A. Desierto himself,
who was then yet a Special Prosecutor, who concurred with the findings and
recommendation of Special Prosecutor Teresita V. Diaz-Baldos and which
resolution was subsequently approved to be dismissed by the then Ombudsman
Conrado M. Vasquez …. On review, this resolution was also upheld by [SPO] …
Reynaldo Mendoza in his Memorandum dated
xxx a party cannot by varying the form of
action or adopting a different method of presenting his case, escape the
operation of the principle that one and the same causes of action shall not
twice be litigated between the same parties and their privies.
WHEREFORE,
in view of the foregoing, it is hereby recommended that the charges against
respondents … violation of Section 3 (e) and (g) of [R.A.] No. 3019 be
DISMISSED, the same having been
previously resolved with finality on May 18, 1992 by this Office in TBP No.
87-02383 (sic) entitled “DBP vs. Phil-Asia Food Industries Corporation
(PAFICO).[38]
(Emphasis and words in brackets added.)
In a
bid to bar the application of the res
judicata[39]
rule, respondent OOMB invokes the absence of the element of identity of parties,
its point being that neither of the herein petitioners is a party in TBP Case
No. 87-02388.
The
Court disagrees.
Absolute
identity of parties is not a condition sine
qua non for res judicata to
apply; substantial identity of parties would suffice. Privity or a shared
identity of interest between a party in the first case and the party in the
second case, as here, is sufficient to invoke the coverage of the principle.[40]
It
cannot seriously be disputed that, during the period material, the petitioners,
being then officers of the DBP who had key participation in the processing or
approval of the subject PAFICO loan, had a community of interest in the parties
in TBP Case No. 87-02388. They are in a real sense privy to DBP and PAFICO
respecting the subject loan transaction.
As it
were, the DBP prayed in TBP Case No. 87-02388 that the “appropriate civil and/or criminal case/s be filed against those who
may appear liable [in the grant of the behest loan].” Doubtless, the Complaint sought not only the criminal prosecution of erring PAFICO
officers, but all those who may be liable for anti-graft, inclusive of the loan
evaluating/approving DBP officials. To our mind, then, respondent Ombudsman
committed grave abuse of discretion by denying both petitioners the benefits of
res judicata because they were not
parties specifically named in TBP Case No. 87-02388.
Res judicata,
according to Black, “refers to the rule that a final judgment rendered by a
court of competent jurisdiction on the merits is conclusive as to the rights of
the parties and their privies and, as to them, constitutes an absolute bar to a
subsequent action involving the same demand or cause of action.”[41] Res judicata is, in fine, a rule of
preclusion to the end that facts or issues settled by final judgment should not
be tried anew.[42] It has two
aspects: 1) the effect of a judgment as a bar to the prosecution of a second
action upon the same claim, demand or cause of action; this is designated as “bar by former judgment”; and 2)
precludes the relitigation of a particular fact or issues in another action
between the same parties on a different claim or cause of action. This is the
rule on “conclusiveness of judgment.”[43]
Respondent OOMB also urges the rejection of the
rule on res judicata owing not only
to the fact that the resolution in the first case, i.e., TBP Case No. 87-02388, is not the result of a court
proceedings, but because the causes of
action between TBP Case No. 87-02388 and OMB Case No. 0-96-0794 differ. And anent
the second instance, respondent OOMB adds, there is a difference since the “DBP directors/officers are commonly charged as conspirators, a cause of
action and prosecution theory that did not obtain in the previous case of TBP No. 02388,”[44] TBP
Case No. 87-02388, respondent OOMB states, focused on the highly favored
treatment given to PAFICO.
The
Court is not convinced.
The suggestion that decisions or orders of the
Ombudsman and other quasi-judicial bodies cannot attain the force of res judicata is simply specious. For, as
jurisprudence teaches, public policy demands that, even at the risk of
occasional errors, judgments of courts as well as administrative decisions should
become final at some definite time fixed by law and that parties should not be
permitted to litigate the same issues over again.[45] This
is the raison d’etre upon which the
doctrine of res judicata rests.[46] The
rule of non quieta movere prescribes
that what was already terminated should not be disturbed or altered at every
step. And as we articulated in Macailing
v. Andrada,[47] citing
a host of cases, the rule which forbids the reopening of a matter once
judicially determined by competent authority “applies as well to the judicial
and quasi-judicial acts of public,
executive, or administrative officers and boards acting within their
jurisdiction.”
On the
matter of identity of causes of action, the Court holds that there is such identity
between TBP Case No. 87-02388 and the instant case, which is the grant of the
alleged behest loan. For perspective, however, a slightly different reasons are
given in both cases for characterizing the subject loan as behest. The alleged “special treatment” given to PAFICO and
the “questionable viability” of its
soy beans processing projects are the reasons given in the first case, whereas
reference to “under collateralization”
and “under capitalization” is
mentioned in the present case. But then, the application of the res judicata doctrine cannot be evaded
by merely varying the form of the action or engaging a different method of
presenting the issue.[48] Legal
theories do not operate to constitute a cause of action; new legal theories do
not amount to a new cause of action so as to defeat the application of the
principle of res judicata.[49]
At any
rate, assuming arguendo the dissimilarity
in the causes of action or the prosecution theory insisted upon, the second
concept of res judicata, the
principle of conclusiveness of judgment, would still preclude the relitigation
of the behest loan issue in another action between the same parties based on a
different claim or cause of action. As
explained by the Court -
xxx where a right, question or fact is
distinctly put in issue and directly determined by a court … in a first case,
between the same parties or their privies, the former adjudication of that
fact, right or question is binding on the parties or their privies in a second
suit irrespective of whether the causes of action are the same. xxx[50]
It bears to reiterate that the question of
whether or not the subject loan partakes of a behest loan had since 1992 been passed
upon by in the Vasquez Resolution in TBP Case No. 87-02388. And without equivocation, it said that it is not. To be sure, then Omb. Vasquez
did not arrive at his conclusion haphazardly. His resolution speaks for itself:[51]
Going over the evidence submitted by the
complainant [DBP], we note that the application for the loan, which was made by
[the] President of PAFICO, appears to be complete and regular in that it
outlined the loan portfolio needed and the principal features of the project
such as its principal objectives, the nature of the business, [etc]....
It appears that the loan application was
subsequently evaluated by the [APD] I and then submitted for review as regards
the IBRD requirement to the Executive Officer of IPD-1. Even in the case of [B/Rs] 2826, 3849, 863
and 097, it appears that the proper studies and recommendations were conducted
by the departments concerned before they were taken up in the respective
meetings of the Board of Governors.
Thus, whatever the Board of Governors approved was based on evaluation
previously undertaken by the technical staff of complainant bank.
In this regard, xxx there is no reason to
assume that [the individual members of the Board of Governors] acted to favor
PAFICO or any of its directors or stockholders. xxx they
did not perform any act or manifest partiality or evident bad faith. Thus prosecution under [R.A.] Act No. 3019 is
untenable.
It cannot likewise be said that they
succumbed to any pressure because in the entire length and breadth of the
records of the case, there is nothing to betray either an indorsement from then
President Marcos or any request for his intercession made by any of the
directors of PAFICO which motivated the Board of Governors to act favorably on
PAFICO’s loan applications. (Words in brackets added.)
The final
Vasquez pronouncement, as subsequently adopted by Omb. Desierto, notwithstanding,
then OMB Marcelo insisted on the behest nature of the loan on the basis of the capitalization
and collateralization criteria set
forth in MC No. 61.[52]
Taking off from where Omb. Marcelo left off, the OSP, for respondent OOMB, presently
argues that the subject loan is “behest” since PAFICO incurred the same when it
was undercapitalized, having a paid-up capital of only Php 4.5 million and that
the Php 192 Million loan was not adequately secured.
Going
over the pleadings and the documents pertaining to the subject loan, respondent
OOMB’s behest loan theory and the premises holding it together do not commend
themselves for concurrence. While PAFICO’s paid-up capital indeed only stood at Php 4.5 Million at the
time it contracted the loan, records
indubitably show that one of the loan
approval conditions, as recommended by the APD I,[53] was
the increase during the loan implementation of PAFICO paid-up common equity to
at least Php 65 Million and that the 70:30 debt/equity ratio is maintained at
all times - meaning that the maximum amount of loan possible was 70% of the project
cost and that the minimum counterpart from the borrower is 30% of the project. Both
conditions were approved by the DBP Board of Governors and incorporated in the
approving B/R 2826 and in compliance therewith, PAFICO in fact hiked its paid-up
capital to the required level.[54]
If
slow-tracking of actual release is an argument against the behest nature of the
subject loan, it may be stated also at this juncture that, as posited by
petitioner Crucillo without denial from either of the respondents, there were 41 releases – averaging
less than Php 4 Million per release – that took 27 months to complete.[55]
DPB B/R 1212, s. of 1979,[56]
provides for a release period of 18 months from the date of the first release,
while B/R 2826 exacts that all loan releases shall be in accordance with
verified project development and shall be covered by the loan value of all
assets securing the loan.[57]
Anent the
subject loan being allegedly under collateralized, respondent OOMB arrived at
this postulate because the PCGG treated the Php 40 Million infused by DBP as
preferred shares as part of the loan amount to plug the alleged collateral deficiency
of PAFICO. To respondent OOMB, the infusion has the earmark of a loan for
PAFICO promised a 16% annual yield, adding that the conspirators resorted to
the equity investment scheme as “a mere
subterfuge to ‘dress up’ the value of [PAFICO’s] collaterals (by lowering the
amount of the loan) or fraudulently show that PAFICO has more than enough
collaterals to secure the obligation.”
We are
not persuaded.
The
approving board resolution, i.e., B/R
2826, speaks only of a Php 152 Million loan and at that level was fully collateralized as the security
put up had, as indicated in the Sworn
Statement, a total value of Php 195.47 Million.[58] As
against the Php 152 Million loan, the figure Php 195.47 Million represents a
collateral ratio of 77.7% which is within the 80% threshold adopted by the bank
and surely consistent with its lending policy. Under Res. No. 116, s. of 1974,
- the DBP Guidelines for Agricultural
Lending - under the heading: LOANABLE
VALUES “[F]ixed assets and real
estate properties shall have a maximum loan value of 85%.”[59]
Contrary to what respondent OOMB insists, the
preferred share of Php 40 Million was not a loan, but an equity investment which
the DBP, under its charter,[60]
is authorized to make. As an investment, no collateral is needed therefor.
Preferred shares take a multiplicity of forms. There are preferred shares with priority
over some other class or classes of shareholding as to dividends or
distribution of assets.[61] Preferred shares as to dividends may be
cumulative. Payment of dividends of preferred shares depends on the ability and
willingness by the board of directors on the bases of performance, profits and
availability of funds. The DBP preferred
share investment was governed by the PAFICO-DBP Memorandum of Agreement, which
set out preferred shares features, such as, but not limited to, par value,
dividends voting rights, redemption, and convertibility.[62]
Definitely, these particulars are not peculiar to, and are not found in,
ordinary loans.
The 16%
annual yield guarantee for the Php 40
Million infusion of DBP does not necessarily make the transaction one of loan
that makes such guarantee payable
regardless of profits from operations, as respondent OOMB held. The guaranteed
yield – contextually a cumulative dividend[63] -
becomes payable only when there are unrestricted retained earnings whence
dividends shall be derived, as provided under
Section 43[64] of the
Corporation Code. Without unrestricted retained earnings or surplus profits,
the 16% yield, even if guaranteed, cannot be paid without violating the law.
Hence, it is incorrect for respondent OOMB to consider the guaranteed yield as
an obligation or indebtedness of PAFICO that arises regardless of the financial
performance of PAFICO.
Given
PAFICO’s eventual failed venture, the subject
loan grant may well be considered, in hindsight, as an unsound business proposition.
Yet, the respondent OOMB has not pointed out to circumstances indicating that
either of the herein petitioners, in whatever role they played in the
transaction in question, perverted their respective offices or deviated from
pre-set DBP’s lending policy, practice or rules for some consideration less
than honest. What at bottom the bank had
agreed to does not appear to be a scandalously one-sided loan accommodation in
favor of PAFICO or grossly and manifestly disadvantageous to the DBP. The term “manifest” in the context of Section 3(g)
of R.A. No. 3019 penalizing the act of entering, in behalf of the government, into
any contract or transaction manifestly and grossly disadvantageous to the same,
denotes something evident to the senses, obvious, or notorious, while “gross”
means glaring, reprehensible, flagrant or shocking.[65] A
collateralized loan transaction payable in 7 to 12 years, in semi-annual
amortization basis, and bearing the usual interest with provisions for penalty
in case of default cannot be categorized as grossly and manifestly
disadvantageous to DBP.
PAFICO’s
inability to pay its loan obligation in the regular course of business, if that
be the case, was a risk that the DBP had to contend with. Indeed, it would be
regrettable if every government bank officer is put in a state of indecision
for fear he would be called to task every time the bank’s client defaults in
the payment of his loan obligations. To be sure, neither Atty. Salvador’s “Sworn Statement” nor respondent OOMB’s impugned Order/Resolution mentioned about misuse of the loan proceeds as the
cause for PAFICO’s failure to pay.
Given
the above perspective, the imputation of criminal design to either petitioner,
acting individually or in concert with other parties to cause undue injury to
the government by giving unwarranted benefits to PAFICO ought to be rejected In this regard, we note that the Information against the petitioners, et al., specified manifest partiality
and evident bad faith as the modalities in the commission of the offense, i.e., violation of Section 3(e) of R.A. No.
3019, the elements of which are as follows:
a) the accused is a public officer or a private person charged in conspiracy
with the former; b) the public officer commits the prohibited acts during the
performance of his or her official duties or in relation to his or her public
functions; c) that he or she causes undue injury to any party, whether the
government or a private party; d) such undue injury is caused by giving
unwarranted benefits, advantage or preference to such parties; and, e) that the
public officer has acted with manifest partiality, evident bad faith or gross
inexcusable neglect.
An
examination of the information as well as the assailed Order/Resolution confirms that the charge against both petitioners
stem from their having acted in conspiracy with the members of the PAFICO and
DBP board in the granting of the subject loan notwithstanding, as alleged, the fact that the undercapitalized borrower
had no adequate collateral to offer. Clearly then, respondent OOMB tied up the petitioners’
criminal liability, either as individuals or conspirators, for violation of
Sec. 3(e) of R.A. No. 3019 with the behest character of the subject loan
accommodation.
In the
instant case, there is no positive and direct evidence that the petitioners
acted in conspiracy with other implicated individuals. It is sheer speculation
to ascribe corrupt intent and conspiracy of wrongdoing on petitioner Tengco simply
because he took part in the passage of the resolution approving the subject loan.
Petitioner Crucillo, on the other hand, did not even have loan-approving authority.
His role in the whole drama was to study/ evaluate the loan application,
present arguments for and against its approval and propose terms and conditions
since approval is the board’s decision. As we have consistently held, evidence
of guilt must be premised upon a more knowing, personal and deliberate
participation of each individual who is charged with others as part of a
conspiracy.[66] And if only to highlight the feebleness of
the conspiracy angle, no less than Omb. Marcelo ordered the exclusion from the
information in Criminal Case No. 26539 three (3) of the original ten (10)
accused. Then, too, respondent PCGG saw fit to grant Mr. Benedicto immunity
from criminal prosecution for acts committed in relation with the subject PAFICO
loan.
At any
rate, to make out a prima facie case
for violation of Sec. 3(e) of R.A. No. 3019, proof of evident bad faith or
manifest partiality will have to be adduced. Evident bad faith connotes more
than a bad judgment; it implies a palpably dishonest purpose or some moral
obliquity for some perverse motive or ill will.[67]
Manifest partiality, on the other hand, denotes a notorious or plain bent or
predilection to favor one side rather than the other.[68]
Evident
bad faith or manifest partiality cannot be deduced from the behest nature of a
loan transaction, if indeed that be the case, for good faith and regularity of
a business transaction are always presumed.
Before
manifest partiality or evident bad faith may even be considered, the OOMB
should have had determined with certainty the facts indicative of manifest
partiality or evident bad faith as modalities of committing a transgression of
the statute.[69] Simply
alleging one or both modes would not suffice to establish probable cause, for
it is well settled that allegation does not amount to proof. The facts
themselves must demonstrate evident
bad faith, which, as earlier stated, connotes a palpably fraudulent and
dishonest purpose to do moral obliquity or conscious wrongdoing for some
perverse motive or ill-will. Parenthetically, not once did the assailed Order/Resolution advert to the bad faith or
manifest partiality of the petitioners, albeit reference is made to their
having extended “unwarranted concession
to PAFICO.”
To
establish then a prima facie case against
the petitioners for violation of Sec. 3(e) of R.A. No. 3019, it behooved the
OOMB not only to convincingly show the matter of insufficient collateral and
undercapitalization since it anchors, in the first place, its case on the behest character of the loan.
It must also prove that evident bad
faith or manifest partiality attended
the loan grant, such as, for instance, signing the loan documents with indecent
haste, fully aware of the non-viability of the project and the one-sidedness of
the transaction such that recovery of the amount lent would be unlikely. But,
as it were, the PAFICO soybean processing project and its loan application were
the subject of a multi-aspect feasibility and comprehensive evaluation study.
The results of the study, embodied in the SUMMARY
AND RECOMMENDATION[70]
prepared by petitioner Crucillo passed from one review table to another before
the report the DBP’s Board finally acted on it. The summary-recommendation
report detailed the pros and cons in the consideration of the subject loan
application, set out proposed terms and conditions calculated to ensure profit
for the bank or otherwise protect the bank’s interest. And for the most part,
the DBP Board accepted the proposals which, among other things, set out terms
and conditions calculated to ensure repayment of the loan including the
submission by PAFICO of additional assets necessary to cover the collateral
deficiency. On the face of the agreement, the DBP stood to earn income for the
accommodation it gives in terms of 14% per annum interest with the
corresponding penalty it has imposed in case of late payments of amortization
and arrears.
In PCGG v. Desierto,[71] a case set against a similar backdrop, the
Court left undisturbed the ensuing disposition of the OMB which ruled out
evident bad faith and rejected the theory of criminal liability on the part of
DBP officers where the terms and conditions of the DBP loan guarantee were
calculated to insure payment and profit, thus:
As regards the alleged violation of
Section 3 (e) of RA 3019, the complainant did not give specific details that
would show the element of evident bad faith [or] manifest partiality ….xxx Granting
that the guarantee loan was under collateralized and the company
undercapitalized, this does not ipso facto make the named respondents liable
for violation under Section 3(e) of R.A. No. 3019, or make their acts criminal.
As earlier pointed out, the Alice Reyes Memorandum … had set terms and
conditions to insure repayment of the guarantee loan, including the submission
by [ borrower] PCFC of additional assets necessary to cover the collateral
deficiency of P17,725,000.00 xxx It was not a one-sided contract in favor of
PCFC, DBP will also earn income for the accommodation it gives in terms of
interest rates with the corresponding
penalties it has imposed in case of late payments of amortizations and arrears.
That although the PCFC failed pay … this is one risk that the DBP has to face
in this kind of financing business x x x. The complainant did not mention
anything about misuse of PCFC’s loan proceeds by a particular person or group
of persons for their personal benefit and not for the purpose it was intended
xxx. (Words in brackets and emphasis added)
In all,
the Court holds that proceeding with the prosecution of the herein petitioners is
unwarranted. This is not only because the OOMB had once ascertained – and
correctly at that, that the subject loan does not fall under the category of a
behest transaction. But over and beyond this determination is the reality that
the key element of evident bad faith or manifest partiality does not obtain in
this case to sustain a prima facie
case for violation of Section 3(e) of the anti-graft law or to form a
sufficient belief as to the guilt of the accused therefor.[72] Hence, any further prosecution of the
petitioners under the information thus filed would be oppressive or a case of simple harassment. Accordingly, it is
imperative that they be spared from the anguish and trauma of having to go to trial
on such a baseless information.
Upon
the foregoing disquisitions, the Court need not delve on the beneficial effect,
or the lack of it, of the RP/PCGG - Benedicto compromise agreement, supra, on the herein petitioners, even if PCGG, in OMB Case No. 0-96-0794, relied
on the theory of alleged conspiracy between the petitioners and the PAFICO
officials.
IN VIEW WHEREOF, the
instant petitions are GRANTED. The assailed Ombudsman Order dated
No costs.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Chief
Justice
Chairperson
|
ANGELINA SANDOVAL-GUTIERREZ Associate
Justice |
RENATO C. CORONA Associate
Justice |
ADOLFO S. AZCUNA
Associate
Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, 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.
REYNATO S. PUNO
Chief
Justice
[1] What petitioner Tengco actually
interposed was a petition for certiorari
and prohibition.
[2] Rollo (G.R. No. 159876), pp. 75 et seq.
[3] Then headed by Ombudsman Simeon V. Marcelo, now resigned.
[4]
Rollo (G.R. No.
159876), pp. 95 et seq.
[5] Sec. 3 of RA No. 3019 declares as constituting corrupt practices of
any public officer and as unlawful: “(e) Causing any 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;” and “(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.”
[6] Entitled
“Broadening the Scope of the Ad Hoc Fact Finding Committee on Behest Loans
Created Pursuant to [AO] No. 13, dated 8 October 1992”; rollo (G.R. No. 159876),
pp. 563 et seq.
[7] R.A. No. 85, as amended by R.A.
Nos. 2081 and 3147, among other laws.
[8] Rollo (G.R. No. 159876), pp. 110 et
seq.
[9] The figures are rounded up in
certain documents and pleadings to P152 Million and P192 Million,
respectively.
[10] Rollo (G.R. No. 159876), pp. 339 et seq.
[11]
[12]
[13]
[14]
[15]
[16]
[17] Supra note 2.
[18] Supra note 4.
[19] Rollo (G.R. No. 159876), pp. 634-635.
[20]
[21] Entitled “Development Bank of the
[22] Rollo (G.R. No. 159876), p. 544.
[23]
[24] Id. at 557 et seq.; Issued by SPO III Teresita Diaz-Valdoz, concurred in by
Deputy Special Prosecutor Jose De Ferrer
and then Special Prosecutor Desierto and approved on July 24, 1992.
[25]
Supra note 15.
[26]
G.R. No. 108292,
[27]
Page 6 of the Resolution
in TBP Case No. 87-02388.
[28] Fuentes, Jr. v. Ombudsman, G.R. No.
164865, November 11, 2005, 474 SCRA 779; Venus
v. Desierto, G.R. No. 130319, October 21, 1998, 298 SCRA 196.
[29] The
Ombudsman Act of 1989.
[30] Loquias
v. Office of the Ombudsman, G.R. No. 139396,
[31] Soria
v. Desierto, G.R. Nos. 153524-25, January 31, 2005, 450 SCRA 2005;
Peralta v. Desierto, G.R.
No. 153152, October 19, 2005, 473 SCRA
322.
[32] Espinosa
v. Office of the Ombudsman, G.R. No. 135775, October 19, 2000, 343 SCRA
744; Acuna v. Office of the Ombudsman, G.R. No. 144692, January 31,
2005, 450 SCRA 232.
[33] Garcia-Rueda v. Pascasio, G.R. No.
118141, September 5, 1997, 278 SCRA 769,
cited in Tirol v. del Rosario, G.R.
No. 135913, November 4, 1999, 317 SCRA 779.
[34] G.R.
No. 132816,
[35] G.R. Nos. 69863-65,
[36] Supra note 8.
[37] Supra
note 15.
[38] The
name of petitioner Crucillo was inadvertently omitted in the dispositive
portion; a supplemental resolution
dated
[39] The elements constituting res judicata are: (a) There must be a
final judgment or order rendered by a court which had jurisdiction over the
subject matter; (b) the prior judgment must be a judgment or order on the
merits; and (c) there must be, between the two (2) cases, identity of parties,
subject matter and causes of action.
[40] Lanuza
v. Court of Appeals, G.R. No. 131394,
[41] Black’s Dictionary, 6th
Ed., p. 1305, cited in Gutierrez v. CA,
193 SCRA 437.
[42] Allied Bank v. CA, G.R. No. 108089,
[43] Calalang
v. Register of Deeds, G.R. No. 76265,
[44] Page 17 of the assailed Order/Resolution
(Supra note 3); cited in the Memorandum for the respondent OOMB; Rollo (G.R. No. 159876), p. 1308.
[45] Antique
Sawmills, Inc. v. Zayco, G.R. No. L-20051,
[46] Allied
Banking Corporation v. CA, supra,
citing cases.
[47] G.R. No. L-21607,
[48] Esperas
v. CA, G.R. No. 121182,
[49] Perez
v. CA, G.R. No. 157616,
[50]
[51] Supra
note 24.
[52] Supra note 6.
[53] Per SUMMARY AND REPORT on PAFICO Loan Application; rollo (G.R. No.
159876), pp. 244- 273.
[54] Memorandum
of
[55] Rollo (G.R. No. 159876), p. 70.
[56] Omnibus Resolution of All Conditions
Pertaining to Agricultural Loans and Specific Matters;
[57] Rollo, (G.R. No. 159876), p. 335.
[58] Supra
note 7.
[59] Annex
“I” of Petition in G.R. No. 159876,
Rollo (G.R. No. 159876), pp. 289 et seq., 316.
[60] R.A. No. 85, as amended, Sec. 2 of
which provides: The [DBP] shall have the power; xxx (b) To purchase preferred redeemable shares of
stock securities.
[61] Lopez, The Corporation Code of the
[62] See Rollo (G.R. No. 159876), pp.
272-273.
[63] A cumulative preferred share entitles
the owner thereof to payment of current dividends as dividends in arrears.
[64] Section 43 of the Code requires that
dividends must be declared and paid out of unrestricted retained earnings.
[65]
Sajul v. Sandigabayan, G.R. No. 135294,
[66] Sistoza
v. Desierto, G.R. No. 144784,
[67]
Llorente v. Sandiganbayan, G.R. No. 122166,
[68]
Marcelo v. Sandiganbayan, G.R. No. 69983,
[69]
Sistoza v. Desierto, supra.
[70]
Rollo (G.R. No. 159876), p.
244.
[71]
G.R. No. 140358,
[72] Cabahug v. People, supra, citing Salonga v. Cruz-Pańo, G.R. No. L-59524,