Bangko Sentral ng Pilipinas v. Ombudsman
REITERATIONFacts
The Antecedents: Benjamin M. Jamorabo (Jamorabo), a former Bank Officer I at the Bangko Sentral ng Pilipinas (BSP) Supervision and Examination Sector (SES), obtained an unsecured loan of P200,000.00 from the Rural Bank of Kiamba, Sarangani, Inc. (RBKSI) on July 17, 2006, while RBKSI was under his examination from July 6 to 22, 2006. The loan was approved without the usual collateral or credit investigation, with Jamorabo promising to settle it before the next BSP general examination. Jamorabo designated his wife, Marites B. Jamorabo, as the principal borrower, though she never appeared at the bank or signed any loan documents; Jamorabo himself filled out and signed the documents, including in his wife's name, and acted as co-maker. The loan proceeds were deposited into Jamorabo's account. He paid only the first two amortizations, and subsequent checks bounced due to insufficient funds or closed accounts. Jamorabo claimed he failed to pay due to being sent for further studies by the BSP. In April 2009, during a subsequent examination of RBKSI, the loan was divulged to the examiner-in-charge, leading to the filing of a complaint by the BSP against Jamorabo before the Office of the Ombudsman for violation of Section 27(d) of R.A. No. 7653 and BSP Office Order No. 423, series of 2002. Procedural History: The Office of the Ombudsman dismissed the complaint for lack of probable cause, ruling that a violation of Section 27(d) of R.A. No. 7653 does not entail criminal liability, only administrative. Since Jamorabo had retired from government service on December 31, 2008, before the complaint was filed, he could no longer be sanctioned. The Ombudsman also found no violation of Section 3(e) of R.A. No. 3019, as the BSP failed to prove injury or damage to the government, and the loan was paid in full. The Ombudsman also noted fault on the part of RBKSI officers. The BSP's motion for reconsideration was denied. The Petition: The BSP filed a petition for certiorari before the Supreme Court, assailing the Ombudsman's issuances.
Issue(s)
Whether a violation of Section 27(d) of R.A. No. 7653 gives rise to criminal liability. Whether Jamorabo can still be held administratively liable despite his retirement from government service. Whether there is a prima facie case for violation of Section 3(e) of R.A. No. 3019 against Jamorabo.
Ruling
The petition is partially meritorious. The Supreme Court reversed and set aside the resolutions of the Office of the Ombudsman insofar as they absolved Jamorabo of criminal and administrative liability for violation of Section 27(d) in relation to Section 36 of R.A. No. 7653. The Office of the Ombudsman is ordered to file the necessary information for violation of Section 27(d) in relation to Section 36 of R.A. No. 7653, as amended, against Jamorabo and to initiate administrative proceedings against him.
Ratio Decidendi
On the criminal and administrative liability for violation of R.A. No. 7653, Section 27(d): The Court held that Section 27(d) of R.A. No. 7653, when read in conjunction with Section 36 thereof, clearly establishes that BSP personnel who borrow from institutions under BSP supervision or examination without complying with the requisite conditions shall be penalized by a fine or imprisonment, or both. Therefore, a violation of Section 27(d) gives rise to criminal liability, contrary to the Ombudsman's ruling that it only entails administrative liability. The Court emphasized that penal laws define crimes and provide for their punishment, and Section 27(d) falls under this category. The Court also noted that while R.A. No. 11211 amended Section 27(d), the penal provision under Section 36 was retained, and the amendment should be given retroactive effect in favor of Jamorabo pursuant to Article 22 of the Revised Penal Code. However, the Court found that Jamorabo's loan transaction did not meet the requisites of Section 27(d) as amended, specifically the arm's length transaction and full disclosure requirements. The circumstances surrounding the loan, including its approval during the examination period, the fear of the bank president to offend Jamorabo, the lack of standard procedures, and the failure to disclose the loan, indicated a violation of the arm's length principle and an absolute prohibition under the law then prevailing. Thus, the Ombudsman committed grave abuse of discretion in ruling that Jamorabo could not be held criminally liable. On whether Jamorabo can still be held administratively liable despite retirement: The Court ruled that Jamorabo can still be held administratively liable. While acknowledging that separation from service generally forecloses administrative charges, the Court clarified that this rule does not apply if the resignation or retirement is voluntary and calculated to pre-empt the filing of charges. Citing jurisprudence, the Court explained that resignation is not a way out to evade administrative liability. In Jamorabo's case, his voluntary retirement, coupled with his application for a Canadian visa and subsequent departure from the Philippines, strongly suggested that his retirement was a calculated move to avoid administrative sanctions. The suspicious timing of his retirement, just four months before the loan was finally settled and before the next examination period, supported this conclusion. Therefore, the Ombudsman committed grave abuse of discretion in ruling that Jamorabo could no longer be held administratively liable solely due to his retirement. On whether there is a prima facie case for violation of R.A. No. 3019, Section 3(e): The Court affirmed the Ombudsman's finding that there was no prima facie case for violation of Section 3(e) of R.A. No. 3019. The first mode of violation, causing undue injury, was not established because the loan was paid in full, and no actual injury or damage to the government or RBKSI was proven. The Court reiterated that undue injury cannot be presumed even after a wrong or violation of a right has been established. Regarding the second mode, giving unwarranted benefits, the Court agreed with the Ombudsman that the bank officers' inaction or lapse in judgment in approving the loan did not constitute an unwarranted benefit to the bank. The bank did not escape detection, as it reported the loan during the next examination. The Court found no concrete benefit conferred upon the bank at the time the loan was granted.
Main Doctrine
A violation of Section 27(d) of R.A. No. 7653, as it existed prior to its amendment by R.A. No. 11211, gives rise to both administrative and criminal liability. Furthermore, a public officer's voluntary retirement from government service does not necessarily render moot an administrative case if it is shown that such retirement was calculated to pre-empt the charges that would inevitably result from the discovery of illicit acts committed during their tenure.