New Bian Yek Commercial v. Office of the Ombudsman
REITERATIONFacts
The Antecedents: The Municipality of Valencia awarded a contract for waterworks system improvement to Legacy Construction. Legacy, through its project engineer Jaime Lu, purchased pipes from petitioner New Bian Yek Commercial, Inc. Lu issued personal checks as payment, which were dishonored, and Legacy failed to replace them. Petitioner demanded payment for the pipes amounting to ₱1,766,950. Petitioner requested the municipal mayor, Rodolfo V. Gonzales, Jr., to pay Legacy's obligation using the retention money withheld by the municipality. The mayor referred the matter to the provincial attorney, Erwin B. Vergara. Procedural History: Petitioner filed a complaint for sum of money with a prayer for a writ of preliminary attachment against Legacy, its owners Alex and Dominador Abelido, Lu, and the municipality. The RTC found that Alex Abelido had left the country and ordered the issuance of a writ of preliminary attachment prohibiting the release of any payment, including retention money, to Legacy. Despite the writ, Mayor Gonzales instructed the municipal treasurer, Rolando Obañana, to release the retention money to Legacy. Petitioner filed an affidavit-complaint against Gonzales, Vergara, and Obañana before the Office of the Ombudsman for violation of Section 3(e) of RA 3019, alleging conspiracy with the Abelidos in depriving petitioner of payment. The Ombudsman dismissed the complaint for lack of probable cause, finding Vergara's opinion legally sound and that Gonzales and Obañana acted in good faith by adopting it. Petitioner's motion for reconsideration was denied. The Petition: Petitioner filed a petition for certiorari with the Supreme Court, asserting that the Ombudsman committed grave abuse of discretion in dismissing the complaint against respondents regarding their criminal liability.
Issue(s)
Whether the Ombudsman committed grave abuse of discretion in dismissing the complaint for violation of Section 3(e) of RA 3019 against respondents Gonzales, Obañana, and the Abelidos. Whether respondents Gonzales and Obañana violated Section 3(e) of RA 3019 when they released the retention money to Legacy despite the existence of a writ of preliminary attachment, and whether respondent Vergara also violated Section 3(e) of RA 3019.
Ruling
The petition is partially granted. The resolutions of the Office of the Ombudsman (Visayas) dismissing the complaint are reversed and set aside, except with respect to respondent Erwin B. Vergara. New judgment is rendered finding probable cause for violation of Section 3(e) of RA 3019 against respondents Rodolfo V. Gonzales, Jr., Rolando Obañana, Alex Abelido, and Dominador Abelido, and the Ombudsman is directed to file the necessary information.
Ratio Decidendi
On the issue of whether the Ombudsman committed grave abuse of discretion in dismissing the complaint for violation of Section 3(e) of RA 3019 against respondents Gonzales, Obañana, and the Abelidos: The Court found that the Ombudsman committed grave abuse of discretion. The February 11, 2003 writ of preliminary attachment prohibited Gonzales and Obañana from paying the balance of the contract price, including the retention money, to Legacy. This writ created a lien over the said money in favor of the petitioner. By releasing the balance of the contract price, Gonzales and Obañana impaired petitioner's lien and caused it undue injury. In effect, they extended unwarranted benefits to Legacy and, ultimately, the Abelidos, who gained full control of the money that was in custodia legis. Therefore, there was sufficient ground to engender a well-founded belief that Gonzales and Obañana violated Section 3(e) of RA 3019. The Court also found probable cause against the Abelidos for conspiring with Gonzales and Obañana in this violation. On the issue of whether respondents Gonzales, Vergara, and Obañana violated Section 3(e) of RA 3019 when they released the retention money to Legacy despite the existence of a writ of preliminary attachment: The Court ruled that while Gonzales and Obañana violated the law, Vergara did not. Vergara issued his opinion on February 4, 2003, prior to the RTC's order for the writ of preliminary attachment. He neither facilitated nor participated in the actual release of the retention money. Thus, the Ombudsman correctly ruled that there was no probable cause against Vergara. Regarding PD 1594, the Court noted that petitioner failed to show that Gonzales and Obañana violated it when they released the retention money, as it was not averred that the release was prior to final acceptance or that a surety bond was not required. However, this did not preclude a finding of violation under RA 3019.
Main Doctrine
The Ombudsman committed grave abuse of discretion in dismissing the complaint for violation of Section 3(e) of RA 3019 against public officials who released retention money despite a writ of preliminary attachment, as such act impaired the petitioner's lien and caused undue injury, thereby extending unwarranted benefits to the contractor and its owners.