Presidential Commission on Good Government v. Navarro-Gutierrez
REITERATIONFacts
The Antecedents: The Presidential Commission on Good Government (PCGG) filed an affidavit-complaint against former officers/directors of the Development Bank of the Philippines (DBP) and former officers/stockholders of National Galleon Shipping Corporation (Galleon) for violating Sections 3 (e) and (g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The complaint stemmed from alleged anomalous behest loans granted by DBP to Galleon during the regime of President Ferdinand E. Marcos. The Technical Working Group (TWG) found that DBP approved guarantees for Galleon's foreign borrowings despite Galleon's undercapitalization and failure to comply with conditions, leading to massive arrearages and obligations. The Ad Hoc Committee concluded these were behest loans, citing Galleon's undercapitalization, undercollateralization, crony status, and marginal notes from President Marcos. Procedural History: The Office of the Ombudsman (Ombudsman) dismissed the complaint for lack of probable cause, finding the evidence (mostly executive summaries and technical reports) to be hearsay, self-serving, and of little probative value. The Ombudsman noted the absence of direct evidence like the loan agreement or approved board resolutions. The PCGG's motion for reconsideration was denied. The Petition: The PCGG filed a petition for certiorari before the Supreme Court, assailing the Ombudsman's Resolution and Order for grave abuse of discretion.
Issue(s)
Whether the Ombudsman gravely abused its discretion in finding no probable cause to indict the respondents for violating Sections 3 (e) and (g) of Republic Act No. 3019. Whether hearsay evidence, with a substantial basis for crediting, is admissible in determining probable cause in a preliminary investigation.
Ruling
The petition is meritorious. The Supreme Court reversed and set aside the Resolution and Order of the Ombudsman, directing the Ombudsman to issue a resolution indicting the individual respondents for violating Sections 3 (e) and (g) of Republic Act No. 3019.
Ratio Decidendi
On the issue of grave abuse of discretion by the Ombudsman: The Court found that the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction. While the Court generally refrains from interfering with the Ombudsman's discretion in determining probable cause, it can review such actions when there is a charge of grave abuse of discretion, which implies a capricious and whimsical exercise of judgment. The Court reiterated the definition of probable cause, emphasizing that it requires only facts sufficient to engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof, not evidence sufficient for conviction. The Court found that the evidence on record, including DBP's own evaluation memorandum highlighting red flags regarding Galleon's loan request, the subsequent failure of Galleon to comply with conditions, and the ballooning of obligations with insufficient collateral, established a prima facie case. The defenses raised by some respondents, such as lack of participation or prescription, are matters of defense better ventilated during trial. The failure of other respondents to file counter-affidavits further strengthened the basis for probable cause. On the admissibility of hearsay evidence in preliminary investigations: The Court held that it was error for the Ombudsman to discredit the findings of the TWG and Ad Hoc Committee solely on the basis that they were hearsay, self-serving, and of little probative value. The Court emphasized that the technical rules of evidence should not be strictly applied in preliminary investigations due to their initiatory nature. Citing established jurisprudence, the Court affirmed that hearsay evidence is admissible in determining probable cause, provided there is a substantial basis for crediting it. In this case, the factual findings, even if hearsay, were based on official documents prepared by DBP itself, thus providing a substantial basis for their credibility. The Court reiterated that probable cause requires only a probability of guilt, not absolute certainty, and that the validity of defenses and admissibility of evidence are best determined during the trial proper.
Main Doctrine
The Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the criminal complaint for violation of Sections 3 (e) and (g) of RA 3019 for lack of probable cause, as the evidence presented, including hearsay evidence with substantial basis for crediting, established a prima facie case against the respondents.