Presidential Commission on Good Government v. Office of the Ombudsman
REITERATIONFacts
The Antecedents: The Presidential Commission on Good Government (PCGG) filed an Affidavit-Complaint before the Office of the Ombudsman (Ombudsman) against former directors of Philippine National Bank (PNB) and officers of Tolong Sugar Milling Company, Inc. (TSMCI) for violation of Section 3(e) and (g) of Republic Act (R.A.) No. 3019. The complaint alleged that PNB granted TSMCI a stand-by irrevocable unconfirmed letter of credit amounting to US$27,793,123.45 on March 20, 1968. The PCGG claimed this was a behest loan because TSMCI was under-capitalized and the loan was under-collateralized. Specifically, TSMCI's paid-up capital was only ₱500,000.00 out of a subscribed capital stock of ₱2,000,000.00 and a capitalization of ₱10,000,000.00. The lands offered as security were appraised at ₱22,350.00 and were not in TSMCI's name. A later re-appraisal in 1975 valued all pledged assets at ₱69,631,500.00, substantially insufficient for the loan amount. Furthermore, no joint and solidary surety undertaking by TSMCI officers was found. Procedural History: The Ombudsman dismissed the criminal complaints for lack of probable cause in a Resolution dated December 29, 2006. The Ombudsman found no evidence linking certain respondents to the loan approval, noted that others were not branch managers during the relevant period, and that some directors were absent during the board meeting where the loan was approved. The Ombudsman also found that the initial appraisal of the collateral was sufficient and that the PCGG failed to allege specific acts constituting manifest partiality, evident bad faith, or gross inexcusable negligence. The PCGG's motion for reconsideration was denied by the Ombudsman in an Order dated April 21, 2009. The Petition: The PCGG filed a Petition for Certiorari under Rule 65 of the Rules of Court, seeking to set aside the Ombudsman's Resolution and Order, alleging grave abuse of discretion amounting to lack or excess of jurisdiction.
Issue(s)
WHETHER THE OFFICE OF THE OMBUDSMAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE CRIMINAL COMPLAINT AGAINST RESPONDENTS FOR LACK OF PROBABLE CAUSE.
Ruling
The Supreme Court dismissed the petition for certiorari for lack of merit. The Court held that the Ombudsman did not commit grave abuse of discretion in dismissing the criminal complaint for lack of probable cause. The PCGG failed to sufficiently allege the elements of Section 3(e) and (g) of R.A. No. 3019, particularly the acts constituting manifest partiality, evident bad faith, or inexcusable negligence, and the resulting undue injury or unwarranted benefits. The Court also deferred to the Ombudsman's finding that the initial appraisal of the collateral was sufficient and that the PCGG's arguments were based on a misappreciation of facts and evidence, which are not proper subjects for a certiorari petition.
Ratio Decidendi
On WHETHER THE OFFICE OF THE OMBUDSMAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE CRIMINAL COMPLAINT AGAINST RESPONDENTS FOR LACK OF PROBABLE CAUSE: The Court reiterated that a petition for certiorari under Rule 65 requires the petitioner to establish that the respondent tribunal acted in a capricious, whimsical, arbitrary, or despotic manner, equivalent to a lack of jurisdiction. It is not enough to show mere error in judgment. The Ombudsman's power to investigate and prosecute is plenary, including the discretion to dismiss a complaint if found insufficient. The PCGG's complaint-affidavit failed to sufficiently allege the elements of Section 3(e) of R.A. No. 3019, which requires proof of manifest partiality, evident bad faith, or inexcusable negligence, and resulting undue injury or unwarranted benefits. The PCGG merely highlighted the alleged disproportion between the loan and collateral without specifying the respondents' acts constituting these elements. Similarly, for Section 3(g), the PCGG failed to allege that the contract was grossly and manifestly disadvantageous to the government and that the respondents acted with the requisite intent or knowledge. The Court noted that the Ombudsman correctly pointed out the lack of evidence linking certain respondents to the loan and that the initial appraisal of the collateral at ₱111,172,493.80 in October 1967 was sufficient to cover the loan, negating the claim of under-collateralization. The PCGG's reliance on a later appraisal and its assertion that the Ombudsman misappreciated evidence do not constitute grave abuse of discretion. Therefore, the Ombudsman's dismissal of the complaint for lack of probable cause was a valid exercise of its discretion, not tainted by grave abuse.
Main Doctrine
The Supreme Court will not interfere with the Ombudsman's determination of probable cause unless tainted by grave abuse of discretion, which requires more than mere error in judgment or appreciation of evidence. The PCGG failed to establish that the Ombudsman gravely abused its discretion in dismissing the criminal complaint for lack of probable cause, as the complaint-affidavit lacked sufficient allegations and evidence to establish the elements of Section 3(e) and (g) of R.A. No. 3019.