General Bank and Trust Company v. The Ombudsman
REITERATIONFacts
1. The Antecedents: Petitioners General Bank and Trust Company (GBTC), Worldwide Insurance and Surety Company, Midland Insurance Corporation, and Standard Insurance Co., Inc. filed a complaint against Assistant Solicitor General (ASG) Magdangal M. de Leon. They accused him of violating Section 3(e) of Republic Act 3019 (Anti-Graft and Corrupt Practices Act) and malfeasance in office. The core of the accusation was that ASG de Leon allegedly protected and defended the interests of Lucio Tan and the Central Bank by adopting the Lucio Tan Bid as the liquidation plan for GBTC, thereby causing undue injury to the government and GBTC stockholders. 2. Procedural History: The complaint, docketed as OMB-CRIM-0-93-1597, was assigned to Ombudsman Graft Investigation Officer II, Raul E. Totanes. Respondent Totanes dismissed the criminal case in a Resolution dated May 15, 1995, finding insufficient evidence to hold ASG de Leon criminally liable. Petitioners filed a Motion for Reconsideration on July 10, 1995, which was denied in an Order dated March 13, 1996. This denial led to the present petition. 3. The Petition: This is a petition for certiorari under Rule 65 of the Rules of Court. Petitioners seek to annul the Ombudsman's resolution and order. They argue that the Ombudsman committed errors in finding that the Office of the Solicitor General (OSG) was not defending Lucio Tan's interests and that the ill-gotten wealth case (Civil Case No. 0005) had no relation to the GBTC liquidation proceedings (Spec. Proc. No. 107812). Petitioners contend that ASG de Leon, by defending the Central Bank's closure of GBTC, was effectively defending Lucio Tan's interests, creating a conflict with the government's interest as stated in the ill-gotten wealth case. They assert that a prima facie case exists for violation of RA 3019.
Issue(s)
Whether respondent Ombudsman and Investigator Raul E. Totanes committed outrageous errors in finding that the OSG was not defending the interest of Lucio Tan in Spec. Proc. No. 107812 and that Sandiganbayan Civil Case No. 0005 had nothing to do with Spec. Proc. No. 107812. Whether the Ombudsman erred in not considering that there is no constitutional nor legal provision nor decisional authority nor presidential authority vesting upon the OSG the right and/or duty to represent interests "in conflict or opposed" to the interest of the Republic of the Philippines in any ill-gotten wealth case. Whether the Ombudsman erred in not finding that a prima facie case exists against respondent ASG de Leon for violation of Section 3 (e), RA No. 3019, as amended.
Ruling
The petition is dismissed. The Supreme Court affirmed the Ombudsman's finding that there was no prima facie case against ASG de Leon.
Ratio Decidendi
On the issue of whether the OSG was defending the interest of Lucio Tan and whether Sandiganbayan Civil Case No. 0005 had anything to do with Spec. Proc. No. 107812: The Supreme Court held that ASG de Leon, in representing the Central Bank in Spec. Proc. No. 107812, was acting in his official capacity as an Assistant Solicitor General. His duty was to defend the Central Bank, which is a client of the OSG. The fact that the liquidation plan involved the Lucio Tan Group purchasing GBTC's assets and assuming its liabilities was merely incidental to the Central Bank's defense of its closure of GBTC. The Court emphasized that any benefit to the Lucio Tan Group from a favorable judgment would be a natural consequence of the successful defense of the Central Bank's actions, not an act of giving unwarranted benefits or advantage. Furthermore, the Court noted that Sandiganbayan Civil Case No. 0005, an ill-gotten wealth case, was filed by the PCGG and had distinct parties and issues from Spec. Proc. No. 107812, which concerned the validity of GBTC's closure and liquidation. The Court found no evidence that ASG de Leon's participation in Civil Case No. 0005, if any, was personal or inconsistent with his official duties. On the issue of whether the OSG has the right or duty to represent interests in conflict with the Republic: The Court reiterated that ASG de Leon was acting in his official capacity as a member of the OSG, representing the Central Bank, an agency of the government. The OSG's consistent defense of the closure of GBTC, even if perceived as conflicting with the PCGG's stance in the ill-gotten wealth case, was the official position of the OSG, which had the imprimatur of multiple Solicitor Generals. The Court found that the perceived inconsistent positions were the official positions taken by the OSG as the principal law office and legal defender of the Government, and ASG de Leon merely acted with other OSG officials in representing the State. The Court also pointed to a Court of Appeals resolution in a related case (CA-G.R. CV No. 033642) which, while acknowledging the apparent inconsistency, did not hold the Solicitor General in contempt, stating that the State had knowingly allowed counsel to represent it in both capacities. On the issue of whether a prima facie case exists for violation of Section 3 (e) of RA 3019: The Court affirmed the Ombudsman's finding that no prima facie case existed. To be liable under Section 3 (e) of RA 3019, five elements must be present: (1) the accused is a public officer; (2) the prohibited act is committed during official duties; (3) undue injury is caused; (4) unwarranted benefits, advantage, or preference are given; and (5) the public officer acted with manifest partiality, evident bad faith, or gross inexcusable negligence. The Court found that the petitioners failed to prove the fifth element – that ASG de Leon acted with manifest partiality, evident bad faith, or gross inexcusable negligence. His actions were in defense of the Central Bank, his client, and were part of the official stand of the OSG. The Court concluded that the failure to prove this essential element was fatal to the petitioners' cause. The Court also deferred to the Ombudsman's discretion in determining the sufficiency of the complaint, citing the principle that courts should not interfere with the Ombudsman's investigatory and prosecutory powers.
Main Doctrine
An Assistant Solicitor General, in defending the Central Bank in a liquidation case, acts within his official capacity and does not commit malfeasance or violate Section 3 (e) of RA 3019, even if the defense incidentally benefits a third party, provided there is no proof of manifest partiality, evident bad faith, or gross inexcusable negligence.