[G.R. NOS.

168830-31 : February 6, 2007]
ERNESTO M. DE CHAVEZ, PORFIRIO C. LIGAYA, ROLANDO L.
LONTOK, SR., ROLANDO M. LONTOK, JR. and GLORIA G.
MENDOZA, Petitioners, v. OFFICE OF THE OMBUDSMAN and
NORA L. MAGNAYE,Respondents.
DECISION
during the graduation for the SY 2000-2001 and gave the
contract to rent caps and gowns to their relatives.
3. De Chavez and Lontok, Sr. required and received from the
graduating class of SY 2000-2001 the amount of P200.00 from
each student as payment for said students' comprehensive
examination. Said collection was not authorized by the BSU
Board of Regents.

Before Us is a Petition for Review on Certiorari1 under Rule 65
of the 1997 Rules of Civil Procedure which seeks the
nullification of the Joint Resolution dated 14 February
20052 and the Supplemental Resolution dated 12 July 2005 3 in
cases OMB-1-01-1036-K and OMB-1-01-1083-K, both issued by
the public respondent Office of the Ombudsman. It also prays
for the issuance of a Temporary Restraining Order
commanding the public respondent to cease and desist from
implementing the said Supplemental Resolution dated 12 July
2005 or from conducting further proceedings in cases OMB-1-
01-1036-K and OMB-1-01-1083-K.
Culled from the records are the following facts:
On 7 November 2001, private respondent Nora L. Magnaye
(Magnaye), Professor IV of the Batangas State University
(BSU), filed with the public respondent an administrative
complaint for Grave Misconduct, Oppression, Conduct
Prejudicial to the Best Interests of the Service, Falsification of
Official Documents, Dishonesty, Gross Neglect of Duty and
Violation of Section 5(a) of Republic Act No. 6713 otherwise
known as "CODE OF CONDUCT AND ETHICAL STANDARDS FOR
PUBLIC OFFICIALS AND EMPLOYEES" against petitioners
Ernesto M. de Chavez (de Chavez), BSU President; Porfirio C.
Ligaya (Ligaya), BSU Vice - President for Extension Campus
Operations; Rolando L. Lontok, Sr. (Lontok, Sr.), BSU Vice-
President for Academic Affairs; Rolando M. Lontok, Jr. (Lontok,
Jr.), BSU Associate Dean of the College of Computer Science
and Information Technology; Gloria G. Mendoza (Mendoza),
BSU Dean of the College of Liberal Arts; and other BSU officials
namely, Virginia Baes, BSU Executive Vice-President; Amador
M. Lualhati (Lualhati), BSU University Secretary; Victoria A.
Zaraspe (Zaraspe), BSU Vice-President for Finance and
Administration; and Jessie A. Montalbo (Montalbo), BSU Vice-
President and Dean of the College of Computer Science and
Information Technology.4The case was docketed as OMB-1-01-
1036-K. The generative facts which gave rise to the filing of the
complaint are summarized in the Comment dated 8
September 20055 of the public respondent, to wit:
1. De Chavez, Lontok, Sr. and Mendoza caused to be collected,
and received the proceeds of, graduation fees from the
graduating class of SY 2000-2001 without issuing an official
receipt and without remitting the same to BSU.
2. De Chavez and Lontok, Sr., did not conduct any public
bidding for the rental of caps and gowns which were used
4. Lontok, Jr. and Montalbo collected from BSU students
internet fees without issuing an official receipt and despite the
absence of internet facilities in BSU Lipa City Campus.
5. Ligaya collected from BSU students the amount P200.00
each as payment for Related Learning Experience Fee (RLEF)
without issuing any official receipt.
6. De Chavez and Baes conspired in designating close relatives
of De Chavez to key administrative positions in BSU.
7. De Chavez made appointments of faculty members and
transmitted said appointments to the CSC [Civil Service
Commission] without the approval of the BSU Board of
Regents.
8. De Chavez prevented the elected President of the
Federation of Supreme Student Assembly to sit as a member
of the Board of Regents.
9. De Chavez issued a Memorandum increasing the rates of
fees for records and other documents issued by BSU without
any approval of the governing Board of the BSU.
10. De Chavez, Baes and Zaraspe designated and appointed
faculty members to key positions in BSU without any authority
under the law, rule or regulation.
11. De Chavez and Lontok, Sr. failed to respond to the letter of
officials of the PTA-BSU Lipa Campus in violation of R.A. 6713.
12. De Chavez collected notarial fees from contractual
employees without issuing official receipts.
13. De Chavez and Lontok, Sr. did not renew the contract of
two faculty members.6
Subsequently, on 13 November 2001, based on the above
imputed acts plus an additional one,7 private respondent also
filed with the public respondent another Complaint imputing
criminal liability to the BSU officials above-named for Violation
of Section 3(a) and (e) of Republic Act No. 3019, otherwise
known as the "ANTI-GRAFT AND CORRUPT PRACTICES ACT,"
Violation of Section 5(a) of Republic Act No. 6713, Falsification
of Official Documents and Estafa.8 The criminal complaint was
docketed as OMB-1-01-1083-K.
Petitioners denied the allegations of private respondent. In
their Joint Counter-Affidavit dated 30 January 2002,9 which
was summarized in the Joint Resolution dated 14 February
2005 of the public respondent, petitioners countered the
following:
1. The BSU management did not collect graduation fees for the
commencement exercises of SY 2000-2001 like in the previous
years. It was claimed that the members of the graduating class,
with the guidance of their advisers, were the ones who fixed,
collected and disbursed the contributions/fees for the
commencement exercises.
2. No public bidding was conducted for the rental of the caps
and gowns because the BSU did not enter into contract with
any supplier. The graduating students have the complete
freedom to hire their caps and gowns from anyone. The
receipts signed by Lontok, Sr. was merely in acknowledgment
of the receipts of certain amounts from Magnaye which the
latter requested to be given to Mr. Fralundio Sulit from whom
the graduating class rented their caps and gowns.
3. Whenever a collection of the internet fee is made, a receipt
was issued by the BSU using Accountable Form No. 51. Further
no collection of internet fees was made at BSU Lipa City
Campus.
4. The collection of the Related Learning Experience Fee was
done by the Cashier's Office of the College. What was being
collected in the past by the Office of Dr. Porfirio Ligaya was the
Dual Training Fee for non-degree courses. However, effective
the second week of December 2001, the collection of this fee
was already turned over to the Cashier's Office of the BSU.
5. De Chavez relied on the authority of the Resolution issued
by the Office of the President declaring that the designation of
the relatives of De Chavez to certain positions in the BSU is not
violative of the rule against nepotism. The subject designations
were all duly confirmed by the Board of Regents.
6. The Board of Regents recognized the practice of De Chavez
of submitting first the appointments he made to the CSC for
attestation before submitting the same for confirmation of the
Board. The appointments of professors/instructors which
Magnaye claim is violative of existing law and rules has already
been confirmed by the Board of Regents.
7. No one has been elected as President of the Federation of
Student Assembly. Said position is still non-existent in view of
the failure of the student to draft and ratify their constitution
and by-laws.
8. The increase in miscellaneous fees was duly approved by the
Board of Trustees of PBMIT through Board Resolution No. 6
series of 1997.
9. The failure to respond to some letters query was brought
about by the pre-occupation of petitioners to other pressing
and more important matters.
10. The BSU neither collects nor shares in the notarial fees
charged by the notary public.
11. The management can opt to renew or not to renew the
contract for employment of some faculty members. They are
not governed by the security of tenure as commonly enjoyed
by the regular employees of the government.10
In her Reply dated 8 March 2002,11 private respondent
attached therewith a photocopy of the alleged Audit Report
dated 7 February 2001 of State Auditor IV Milagros D.
Masangkay, Office of the Auditor, Pablo Borbon Memorial
Institute of Technology,12 containing a finding and
recommendation on the graduation fees collected by BSU,
thus:
4. FINDING
Graduation fees were not yet issued official receipts and were
not taken up in the books of the College despite prior years'
audit recommendations and in violation of the provisions of
Sections 63 and 68 of Presidential Decree (P.D.) No. 1445, and
Section 4(d) of Republic Act (R.A.) No. 8292 resulting to an
aggregate understatement of Cash and Trust Liability accounts
by about P3,342,550.00.
Section 63 of Presidential Decree (P.D.) No. 1445 requires all
moneys and property officially received by a public officer in
any capacity or upon any occasion to be accounted for as
government funds and government property, while Section 68
of the same presidential decree provides that no payment of
any nature shall be received by a collecting officer without
immediately issuing an official receipt in acknowledgment
thereof.
Under Section 4(d) of Republic Act (R.A.) No. 8292, the higher
Education Modernization Act of 1997, state universities and
colleges are authorized to deposit in any authorized
government depository bank and treat as Special Trust Fund,
income from tuition fees and other necessary school charges
such as matriculation fees, graduation fees, and laboratory
fees.
The existing practice of not issuing official receipts and not
taking up in the books of accounts graduation fees paid by
graduating students has been an audit finding since 1997.
Based on the Annual Audit Report for calendar year 1999, the
graduation fees from 1997-1999 totaled P2,057,600 with an
expenses of P921,529.00.
The graduation fees collected and the expenses paid out of
these fees during the calendar year 2000 could not be
determined due to failure of the employee concerned to
furnish this Office with certified statement of collections of
graduation fees and the related disbursements together with
the supporting papers despite our request to the College
President in a letter dated January 17, 2001.
Likewise, in response to our Memorandum dated October 11,
2000 requesting information as to the status of the
implementation of the 1999 audit recommendations, the
College President informed this Office and I quote "the holding
of graduation rites is a tradition of the PBMIT [Pablo Borbon
Memorial Institute of Technology] academic community but it
is never compulsory. Graduating students may not join the
ceremonies but if majority of them decided to hold one, it is
their prerogative to plan, execute and evaluate their
ceremony. In the process, and through the senior council
and/or its advisers, they may agree among themselves to
contribute certain amount voluntarily to finance the program.
After the rites and if there are cash balances, the graduating
class usually donate something to their Alma Mater as their
remembrance or legacy. This office, with all due respect to the
COA, may not be able to follow the recommendation. This
office is not yet ready to break this hallowed tradition.
The continuous refusal of management to implement prior
years' audit recommendations and the letter of the Honorable
Chairman of the Commission on Audit relative to the handling
of graduation fees was already communicated to the
Commission on Audit thrice, the latest was last November 8,
2000 when the General Counsel of the Commission on Audit
asked for status report.
Since graduation fee is one of the items to be recorded under
Special Trust Fund per R.A. No. 8292, failure to record the
same in the books of accounts of the Institute understated the
cash and trust liability accounts.
Since there were no records submitted to this Office pertaining
to graduation fees collected from graduating students,
understatement of Cash and Trust Liability Accounts
amounting to P1,284,950.00 (Annex G) was based on the
number graduating students and the graduation fee per
student last school year 1999-2000. The 1999 Annual Audit
Report of the previous COA Auditor reported a total collections
from 1997 to 1999 of P2,057,600.00. These amounts when
added will yield an aggregate understatement of Cash and
Trust Liability accounts by about P3,342,550.00.
RECOMMENDATION
Require the accountable officer to issue official receipts
(Accountable Form 51) for graduation fees collected and
deposit the collections in an authorized government
depository bank. Enjoin the Accountant to record in the books
of accounts of the College all collections and disbursements
conformably with generally accepted accounting principles
and in accordance with pertinent laws and regulations.
Private respondent Magnaye also accused the petitioners of
grave oppression and harassment for giving her two
unsatisfactory performance ratings corresponding to the
periods of June to 15 July 2001 and 16 July 2001 to 20 October
2001. She claimed that these ratings were given "as a way to
get back at her and lay the basis for dropping her from the rolls
of BSU."13 Of course, petitioners refuted the said imputations.
After the conduct of a clarificatory hearing14 and upon
submission of both parties of their respective position papers,
the public respondent, through Graft Investigation and
Prosecution Officer II Joy N. Casihan-Dumlao with Director
Joaquin F. Salazar and Deputy Ombudsman for Luzon Victor C.
Fernandez concurring, issued its Joint Resolution dated 14
February 2005 in OMB-1-01-1036-K and OMB-1-01-1083-K
recommending the indictment of petitioners De Chavez,
Lontok, Sr., and Mendoza for violation of Section 3(a) of
Republic Act No. 3019. It, however, proposed the dismissal of
the complaints against petitioners Ligaya and Lontok, Jr., and
other officials of BSU namely, Lualhati, Zaraspe, and Montalbo
for lack of probable cause.15 The fallo states:
WHEREFORE, premises considered, it is respectfully
recommended that respondents ERNESTO M. DE CHAVEZ,
ROLANDO L. LONTOK, SR., and GLORIA G. MENDOZA, be
indicted for violation of Section 3(a) of Republic Act No. 3019.
With regard to the rest of respondents, namely: VIRGINIA
BAES, AMADOR M. LUALHATI, PORFIRIO C. LIGAYA, VICTORIA
A. ZARASPE, ROLANDO M. LONTOK, JR., and JESSIE A.
MONTALBO, it is recommended that instant complaints
against them be dismissed for lack of probable cause.
Upon review by Ombudsman Simeon V. Marcelo, he issued a
Supplemental Resolution dated 12 July 2005 "partially
approving" with modifications the Joint Resolution dated 14
February 2005. Among other findings, he found petitioners de
Chavez, Lontok, Sr., Lontok, Jr., and Mendoza liable for
violation of Section 3(e) and (h) of Republic Act No. 3019 and
for violation of Article 315(2)(b) of the Revised Penal Code. He
also found petitioners de Chavez, Lontok, Sr., Lontok, Jr., and
Ligaya guilty of Dishonesty and Grave Misconduct, and, thus,
imposed on them the penalty of Dismissal from the Service
with the accessory penalties of forfeiture of retirement
benefits and perpetual disqualification from reemployment in
the government service.16 The decretal portion of the
Supplemental Resolution reads:
WHEREFORE, the 14 February 2005 Joint Resolution of the
Office of the Deputy Ombudsman for Luzon is partially
approved subject to the following modifications:
a) Respondents De Chavez, Lontok, Sr., and Mendoza are
hereby found liable for violation of Section 3 (e) RA 3019, as
amended, for unlawfully collecting graduation fees. In
addition, they are also liable for Estafa under Art. 315 (2) (b) of
the Revised Penal Code;
b) Respondents De Chavez and respondent Lontok, Sr. are
hereby found liable for violation of Section 3 (e) RA 3019, as
amended, in relation to Section 3 (h) thereof, relative to their
engaging in the business of rental of caps and gowns;
c) Respondent De Chavez and respondent Lontok, Jr., are
found liable for violation of Section 3 (e) RA 3019, as amended,
for illegally collecting internet fees from students. In addition,
they are also liable for Estafa under Art. 315 (2) (b) of the
Revised Penal Code;
d) The Field Investigation Office (FIO) is directed to conduct
further fact-finding on respondent Ligaya for probable
Malversation under Art. 217 of the Revised Penal Code, for
collecting P200.00 each from BSU students as payment for
Related Learning Experience Fee (RLEF) without issuing official
receipts and misappropriating the same, and to establish with
certainty the total amount collected;
e) The Office of the Deputy Ombudsman for Luzon is hereby
directed to refer to the Civil Service Commission the
administrative aspect of the charges relating to nepotism,
appointment, assignment/designation, transfer of personnel,
and performance evaluation ratings;
f) The Office of the Deputy Ombudsman for Luzon is also
ordered to immediately conduct a fact-finding investigation
with respect to the holding of comprehensive examination and
the collection of fees therefore;
g) The Field Investigation Office (FIO) is directed to
immediately conduct an investigation to gather evidence
relative to the students who rented caps and gowns for the
school year 2000-2001 and prior to said school year; and
h) Respondents De Chavez, Lontok, Sr., Ligaya and Lontok Jr.,
are hereby found guilty of Dishonesty and Grave Misconduct
and are, thus, meted the penalty of Dismissal from the Service,
pursuant to Section 52 (A), Rule IV, Uniform Rules on
Administrative Cases in the Civil Service, with the accessory
penalties of forfeiture of retirement benefits and perpetual
disqualification from employment in government service
pursuant to Section 58, Rule IV of the same Uniform Rules on
Administrative Cases in the Civil Service.
Corollary thereto, the Civil Service Commission is hereby
requested to implement this Order in accordance with law and
to advice this Office of compliance thereon. Let a copy of this
decision be furnished the Honorable Chairman, Civil Service
Commission, Constitution Hills, Diliman, Quezon City.
Aggrieved, the petitioners filed this petition. Petitioner
Mendoza filed a Petition in Intervention dated 12 December
2005 after her lawyer found out that she was not included in
the instant petition.17 Her intervention was allowed in the
Court's First Division Resolution of 28 August 2006. 18 Both
petitions raised the following issues for our consideration:
I.
RESPONDENT OFFICE OF THE OMBUDSMAN COMMITTED
GRAVE ABUSE OF DISCRETION AND ACTED WITHOUT
JURISDICTION IN FINDING PETITIONERS ALREADY LIABLE FOR
CRIMINAL OFFENSES.
II.
RESPONDENT OFFICE OF THE OMBUDSMAN COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT DID NOT DISMISS THE
TWO SEPARATE BUT IDENTICAL CRIMINAL COMPLAINTS OF
PRIVATE RESPONDENT.19
Apropos the first issue, the petitioners alleged that the public
respondent's Supplemental Resolution dated 12 July 2005
categorically stated that petitioners are liable for the criminal
acts complained of; that the public respondent did not even
discuss the matter of probable cause but instead immediately
ruled on their guilt; that the said resolution did not state or
instruct the filing of the appropriate criminal informations
against them before the courts of justice. Hence, the public
respondent's instantaneous finding of criminal liability on their
part renders any trial against them an "exercise in futility"
which "inevitably clashes with Section 14(2) of the 1987
Constitution which grants to the accused, inter alia, the right
to have a speedy, impartial and public trial." Therefore, the
public respondent had exceeded its jurisdiction under Republic
Act No. 6770, otherwise known as the "Ombudsman Act of
1989," since there is nothing in the said statute which grants
to it the power to determine the guilt or innocence of the
accused.20
Further, they argued that "the public respondent's directive to
the Field Investigation Office (FIO) to conduct further fact-
finding on x x x [petitioner] Ligaya for probable Malversation
under Art. 217 of the Revised Penal Code, is questionable as it
had already arbitrarily decreed the guilt of petitioner Ligaya
when it pilloried him for collecting P200.00 each from BSU
Students as payment for Related Experience Fee (RLEF)
without issuing official receipts and misappropriating the same
x x x."21
We reject the foregoing asseverations.
Petitioners make mountain on the use of the words "liable for
violation x x x" employed by the Ombudsman. A review of the
specific powers of the Ombudsman under the Constitution,
the laws and jurisprudential pronouncements is in order. Both
the 1987 Constitution and the Ombudsman Act of 1989
(Republic Act No. 6770) empower the public respondent to
investigate and prosecute on its own or on complaint by any
person, any act or omission of any public official or employee,
office or agency when such act or omission appears to be
illegal, unjust, improper or inefficient.22 By virtue of this
power,23 it may conduct a preliminary investigation for the
mere purpose of determining whether there is a sufficient
ground to engender a well-founded belief that a crime has
been committed and the respondent is probably guilty
thereof, and should be held for trial.24
A preliminary investigation is merely inquisitorial, and it is
often the only means of discovering the persons who may be
reasonably charged with a crime, to enable the prosecutor to
prepare his complaint or information. It is not a trial of the case
on the merits and has no objective except that of determining
whether a crime has been committed and whether there is
probable cause to believe that the respondent is guilty
thereof.25 In the conduct of preliminary investigation, the
prosecutor does not decide whether there is evidence beyond
reasonable doubt of the guilt of respondent. A prosecutor
merely determines the existence of probable cause, and to file
the corresponding information if he finds it to be so.26
At the threshold, we must accentuate that in the exercise of
the powers and in the discharge of his functions and
responsibilities, the Ombudsman, as in that of the other
officials, enjoys the presumption of regularity in the
performance of official functions.
Rule 131, Section 3(m) of the Revised Rules of Evidence
provides:
SEC. 3. Disputable presumptions. - The following presumptions
are satisfactory if uncontradicted, but may be contradicted
and overcome by other evidence:
x x x
(m) That official duty has been regularly performed; x x x.
This presumption of regularity includes the public officer's
official actuations in all the phases of his work.27
With particular reference to the Ombudsman, it is well to state
that his office is, indeed, one of the more powerful agencies of
the government and wields vast powers, though limited to a
certain extent. Concomitant to this stature, our laws have
required more stringent qualifications, most especially to the
intellectual quality and capacity, for the person who will run
for the office.
In light of this observation, the presumption that the
Ombudsman knows whereof he speaks forcefully applies. We
must then presume that he is well aware of the extent and
limitations of his powers. Thus, when Ombudsman Marcelo
used the words "liable for" in his Supplemental Resolution of
12 July 2005, he is presumed to have used these within the
sense of the limited power vested in him by our laws and
jurisprudence - the finding of probable cause.
Further, the word "liable" is described as to mean "subject or
exposed to some usually adverse contingency or action."28 The
word is now rather wide in its use and is considered
synonymous to the words "susceptible," "prone," and
"exposed," all indicating temporary or fluctuating situations.29
We, likewise, call special attention to the fact that nowhere in
the challenged resolution is it stated that petitioners are found
"guilty" beyond reasonable doubt of the crime charged, in
stark contrast to the disposition of the administrative
case30 wherein petitioners "De (sic) Chavez, Lontok, Sr., Ligaya
and Lontok, Jr., are hereby found guilty of x x x" and were
meted the corresponding penalty.
We, then, conclude that the words "liable for" employed by
the Ombudsman in the challenged resolution really alluded
only to the probability of guilt. They simply imply that the
Ombudsman had found probable cause to hold petitioners
liable for the crimes imputed and, thus, should be held liable
for trial in the courts of law. It is not a declaration of guilt.
Probable cause, as used in preliminary investigations, has been
defined as the existence of such facts and circumstances as
would excite the belief, in a reasonable mind, acting on the
facts within the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was
prosecuted.31 We reiterate this in the case of Pimentel Jr. v.
COMELEC,32 thus:
[a] finding of probable cause needs only to rest on evidence
showing that more likely than not a crime has been committed
and was by the suspects. Probable cause need not be based on
evidence establishing absolute certainty of guilt. As well put in
Brinegar v. United States, while probable cause demands more
than "bare suspicion," it requires "less than evidence which
would justify x x x conviction." A finding of probable cause
merely binds over the suspects to stand trial. It is not a
pronouncement of guilt. (Emphasis ours.)
The public respondent's finding of probable cause to indict
petitioners for the crime charged is based on and supported by
the complaints under oath of the private respondent, sworn
statements and notarized affidavits of her witnesses, and
official and public documents submitted by the private
respondent.33 A clarificatory hearing34 attended by private
respondent and almost all of the petitioners was conducted by
the public respondent on 13 May 2004. During the hearing, the
public respondent asked the private respondent some
clarificatory questions with regard to the latter's complaints.
The 24-paged Supplemental Resolution dated 12 July 2005, as
well as the 24-paged Joint Resolution dated 14 February 2005,
of the public respondent contains lengthy and substantial
discussions on the bases of its finding of probable cause to
indict the petitioners for the criminal offenses. The Resolutions
took pains to determine the appropriate crimes to be imputed
to petitioners and to analyze each charge vis-a-vis the
elements of the crime. The evidences submitted by the private
respondent for each charge were subjected to careful scrutiny.
As to petitioner Ligaya, it is asserted that "the public
respondent's directive to the Field Investigation Office (FIO) to
conduct further fact-finding on x x x [petitioner] Ligaya for
probable Malversation under Art. 217 of the Revised Penal
Code, is questionable as it had already arbitrarily decreed the
guilt of petitioner Ligaya when it pilloried him for
collecting P200.00 each from BSU Students as payment for
Related Experience Fee (RLEF) without issuing official receipts
and misappropriating the same x x x." The subject directive
reads:
d) The Field Investigation Office (FIO) is directed to conduct
further fact-finding on respondent Ligaya for probable
Malversation under Art. 217 of the Revised Penal Code, for
collecting P200.00 each from BSU students as payment for
related Learning Experience Fee (RLEF) without issuing official
receipts and misappropriating the same, and to establish with
certainty the total amount collected;
As it is, the public respondent merely directed the FIO to
conduct further investigation and gather more evidence on the
liability of petitioner Ligaya for "probable" malversation. It did
not in any way conclude that petitioner Ligaya is guilty beyond
reasonable doubt of malversation. In fact, it saw the need to
first gather more information and evidence before deciding on
whether petitioner Ligaya may be indicted for malversation.
Coming now to the second issue, petitioners argued that the
public respondent should have dismissed the "two separate
but identical complaints" filed by private respondent on the
ground of forum shopping.
The test in determining the presence of forum shopping is
whether in the two or more cases pending, there is identity of
(1) parties, (2) rights or causes of action, and (3) relief(s)
sought.35 In the instant case, although the parties, facts and
circumstances are essentially the same, the rights or causes of
action, as well as the relief(s) sought are different. The
complaint filed on 7 November 2001 is for an administrative
case. The causes of action are grave misconduct, oppression,
conduct prejudicial to the best interest of the service,
dishonesty, gross neglect of duty and violation of Section 5(a)
of Republic Act No. 6713. The relief sought against petitioners
is dismissal from the service with forfeiture of retirement
benefits and leave credits. On the other hand, the complaint
filed on 13 November 2001 is for a criminal case. The causes of
action are violations of Section 3(a) and (e) of Republic Act No.
3019, falsification of official documents and estafa. The
relief(s) sought against petitioners are, among other prayers,
for imprisonment, perpetual disqualification from public office
and confiscation or forfeiture in favor of the government of
any prohibited interest and unexplained wealth manifestly out
of proportion to their salary and other lawful income. Thus,
petitioners' allegation of forum shopping is vacuous.
Relative to petitioners' rantings in the probative value of the
affidavits presented during the preliminary investigation and
on the conclusions of fact reached by the public respondent,
suffice it to say that the technical rules of evidence should not
be applied in the conduct of preliminary investigation by the
public respondent strictly. This is clear in the Administrative
Order No. 08 entitled "CLARIFYING AND MODIFYING CERTAIN
RULES OF PROCEDURE OF THE OMBUDSMAN"36 The validity
and the merits of a party's defense or accusations as well as
the admissibility of testimonies and evidences are better
ventilated during the trial stage than in the preliminary stage.
The factual and evidentiary issues can best be passed upon and
threshed out during a full-blown court trial since it is the
court's task to determine guilt beyond reasonable doubt based
on the evidence presented by the parties at a trial on the
merits.37
We have consistently refrained from interfering with the
constitutionally-mandated investigatory and prosecutorial
powers of the public respondent absent any compelling
reason.38 In the case of Quiambao v. Desierto,39 citing The
Presidential Ad-Hoc Fact Finding Committee on Behest Loans
v. Ombudsman Aniano Desierto,40 we ruled:
The prosecution of offenses committed by public officers is
vested in the Office of the Ombudsman. To insulate the Office
from outside pressure and improper influence, the
Constitution as well as R.A. 6770 has endowed it with wide
latitude of investigatory and prosecutory powers virtually free
from legislative, executive, or judicial intervention. This Court
consistently refrains from interfering with the exercise of its
powers, and respect the initiative and independence inherit in
the Ombudsman who, "beholden to no one, acts as the
champion of the people and the preserver of the integrity of
the public service."
In Maturan v. People,41 we held:
A policy of non-interference by the courts in the exercise of the
Ombudsman's constitutionally mandated powers is based not
only upon respect for the investigatory and prosecutory
powers granted by the Constitution to the Office of the
Ombudsman but upon practicality as well. Otherwise, the
functions of the Court will be grievously hampered by
innumerable petitions assailing the dismissal of investigatory
proceedings conducted by the Office of the Ombudsman with
regard to complaints filed before it, in much the same way that
the courts would be extremely swamped if they were
compelled to review the exercise of discretion on the part of
the fiscals, or prosecuting attorneys, each time they decide to
file an information in court or dismiss a complaint by private
complainant."
One final and significant observation. This Court noted that the
present petition seeks the annulment of public respondent's
Supplemental Resolution dated 12 July 2005 on the criminal
(OMB-1-01-1083-K) and administrative (OMB-1-01-1036-K)
complaints of private respondent. Procedurally, the remedy of
an aggrieved party in criminal complaints before the public
respondent where the latter found probable cause is to file
with this Court a petition for certiorari under Rule 65.42 Thus,
we gave due course and resolved the issue of finding of
probable cause in the criminal aspect of the instant petition.
This Court, however, cannot and will not pass judgment on the
administrative liability of petitioners. In the leading case of
Fabian v. Desierto,43 we ruled that appeals from decisions of
the public respondent in administrative liability cases should
be taken to the Court of Appeals under Rule 43 of the 1997
Rules of Civil Procedure. Consequently, the administrative
aspect of the present petition should be referred to the Court
of Appeals for proper disposition.
WHEREFORE, the instant petition as regards criminal case
OMB-1-01-1083-K is hereby DISMISSED. Petitioners' appeal of
the public respondent's Supplemental Resolution dated 12 July
2005 with regard to administrative case OMB-1-01-1036-K is
hereby REFERRED to the Court of Appeals for proper
disposition. Costs against petitioners.
SO ORDERED.
[G.R. NO. 154438 : September 5, 2007]
ALICIA F. RICAFORTE, Petitioner, v. LEON L.
JURADO, Respondent.
DECISION
Before us is a Petition for Review on Certiorari under Rule 45
of the Rules of Court seeking to annul and set aside the
Decision1 dated April 26, 2002 and the Resolution2 dated July
29, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 66293.
On February 10, 1997, respondent filed a Complaint3 for estafa
and violation of Batas Pambansa (B.P.) Blg. 22 against Alicia F.
Ricaforte (petitioner) with the Quezon City Prosecutor's Office.
He alleged that he operates and manages a rice mill in Bulacan;
that sometime in June 1996, Ruby Aguilar (Aguilar) procured
rice from him and in payment thereof gave him two Far East
Bank and Trust Company (FEBTC) checks, to wit: FEBTC Check
No. 08A096028P dated July 25, 1996 and Check No.
08A096029P dated August 25, 1996, in the amount
of P431,555.00 each, which were both issued by petitioner and
when presented for payment were dishonored.
In her Counter-Affidavit, petitioner denied the accusation. She
alleged that Aguilar who had lost her Metrobank checkbook
borrowed her checks to pay off Aguilar's obligations with Leon
Jurado (respondent); that she willingly lent her checks to
Aguilar on condition that these checks will be replaced with
Aguilar's own checks once her new checkbook is issued to her
by Metrobank; that Aguilar then used petitioner's checks to
pay her rice procurement with respondent; that in accordance
with the arrangement, Aguilar issued two replacement checks
in favor of respondent in the amount of P431,555.00 each;
that when Aguilar issued the replacement checks, petitioner
demanded from respondent the return of her checks but
respondent refused, thus she was constrained to request her
bank to issue an order of stop payment. Aguilar executed an
Affidavit corroborating petitioner's defense.
Respondent filed his Reply denying that petitioner's checks
were merely accommodation checks. Petitioner filed her
rejoinder as well as supplement to rejoinder.
In a Resolution4 dated November 24, 1997, Assistant City
Prosecutor Luis Zenon Q. Maceren dismissed the complaint for
estafa and B.P. Blg. 22 for insufficiency of evidence. The
prosecutor found that petitioner did not have any business
transaction with respondent; that the subject checks were
issued only to accommodate Aguilar; that these were
delivered to respondent not as payment but as a guarantee
and on condition that Aguilar will replace petitioner's checks
with her own, which Aguilar did prior to the maturity of
petitioner's checks; that upon maturity of Aguilar's
replacement checks and after respondent presented them for
payment and were subsequently dishonored, it was then that
petitioner's checks were also presented by respondent for
encashment; that Aguilar's replacement checks are now
subject of another litigation pending in the Metropolitan Trial
Court of Quezon City; that the sequence of events showed that
indeed petitioner's checks were not intended as payment to
respondent because petitioner had no obligation to
respondent; that the checks were not issued to account or for
value; thus, there can be no finding of prima facie evidence of
the charges against him relying on Magno v. Court of Appeals.5
Respondent's Motion for Reconsideration was denied in a
Resolution6 dated May 27, 1998. The prosecutor found that
although the issuance of a worthless check is malum
prohibitum, B.P. Blg. 22 still requires that the checks should be
issued with consideration, which element was lacking in this
case; that even respondent admitted in his Complaint-Affidavit
that petitioner had no transaction with him by alleging that
Aguilar handed to him petitioner's two checks in payment of
rice procurement representing these as Aguilar's collection
checks and with assurance that they are good; that when
Aguilar replaced petitioner's checks with her own, petitioner's
checks had no more consideration since these were issued
upon agreement that the real debtor, Aguilar, will also issue
her own checks.
Respondent appealed the dismissal of his complaint to the
Department of Justice. The Secretary of Justice issued a
Resolution7 dated September 21, 2000 modifying the
Resolution of the City Prosecutor and directing him to file an
information against petitioner for violation of B.P. Blg. 22.
The Justice Secretary found that while the dismissal of estafa
is correct, petitioner should be indicted for B.P. Blg. 22. In so
ruling, the Secretary found that while petitioner has no
business transactions with respondent and merely issued the
checks as a guarantee for Aguilar's obligation to respondent,
the fact remains that petitioner issued the subject checks and
failed to pay respondent the amount due thereon or make
arrangements for their full payment within five banking days
after receiving a notice of dishonor; that the gravamen of the
offense punished by B.P. Blg. 22 is the act of making and
issuing worthless checks or those dishonored upon their
presentment for payment; that the thrust of the law is to
prohibit the making of worthless checks and putting them in
circulation; that to require the arrangement surrounding the
issuance of the checks be first looked into and thereafter
exempt such issuance from the punitive provisions of B.P. Blg.
22 on the basis of that arrangement would frustrate the very
purpose for which the law was enacted, i.e. to stop the
proliferation of unfunded checks; that B.P. Blg. 22 applies even
when dishonored checks were issued merely in the form of
deposit or guarantee.
The Justice Secretary denied petitioner's Motion for
Reconsideration in a Resolution8 dated May 30, 2001.
Petitioner filed with the CA a Petition for Certiorari under Rule
65 assailing the resolutions of the Secretary of Justice for
having been issued with grave abuse of discretion.
On April 26, 2002, the CA issued its assailed Decision denying
the petition for lack of merit. The CA found no grave abuse of
discretion committed by the Justice Secretary in his assailed
Resolutions. It ruled that trial on the merits must ensue since
it is on said occasion that petitioner is granted opportunity for
a full and exhaustive presentation of her evidence and not
during the preliminary investigation phase where the
investigating officer acts upon probable cause and reasonable
belief; that in the preliminary investigation phase, it is not yet
clear whether petitioner could be considered as having
actually committed the offense charged and sought to be
punished, although petitioner is presumed innocent until
proven guilty beyond reasonable doubt; that the crux of the
matter rests upon the reasons for the drawing of the
postdated checks by petitioner; i.e., whether they were drawn
or issued "to apply on account or for value" as required
under B.P. Blg. 22 which will only be determined during trial.
Petitioner's Motion for Reconsideration was denied in a
Resolution dated July 29, 2002. The CA ruled that mere
issuance of a bouncing check constitutes a probable cause for
violation of B.P. Blg. 22; that whether or not the accused is
guilty thereof is determined in the trial proper; that
preliminary investigation is not a trial and is not intended to
usurp the function of the trial court; that Sales, which is
invoked by petitioner, is not applicable to the instant case,
since the issue in that case was whether or not the
Ombudsman followed the proper procedure in conducting a
preliminary investigation and the corollary issue of whether or
not petitioner was afforded an opportunity to be heard and to
submit controverting evidence which are not the issues in this
case.
Hence, herein petition on the following grounds:
I
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE
REVERSIBLE ERROR IN NOT HOLDING THAT THE HONORABLE
SECRETARY OF JUSTICE COMMITTED A GRAVE ABUSE OF
DISCRETION IN ISSUING HIS MODIFIED RESOLUTION FINDING
PROBABLE CAUSE AGAINST PETITIONER FOR VIOLATION OF
B.P. BLG. 22, DESPITE THE FACT THAT THE HONORABLE
SECRETARY HAS AGREED WITH THE FINDING OF THE QUEZON
CITY PROSECUTION OFFICE DISMISSING THE CHARGE OF
ESTAFA AGAINST PETITIONER.
II
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
REVERSIBLE ERROR IN NOT GIVING WEIGHT AND CREDENCE
TO PETITIONER'S CLAIM THAT THE SUBJECT CHECKS WERE
NOT ISSUED TO ACCOUNT OR FOR VALUE BUT SOLELY TO
GUARANTEE RUBY AGUILAR'S CHECKS, ESPECIALLY
CONSIDERING THAT IT IS UNDISPUTED THAT PETITIONER HAD
NO BUSINESS DEALINGS WHATSOEVER WITH THE
RESPONDENT REGARDING RICE PROCUREMENTS.
III
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
REVERSIBLE ERROR IN NOT HOLDING THAT THERE IS NO NEED
TO GO TO TRIAL IN THE INSTANT CASE BECAUSE EVEN DURING
THE PRELIMINARY INVESTIGATION CONDUCTED BY THE
QUEZON CITY PROSECUTION OFFICE, THE SAID PROSECUTION
OFFICE HAD FOUND THAT NO PRIMA FACIE OR PROBABLE
CAUSE EXISTS TO WARRANT THE FILING OF THE COMPLAINTS
OF ESTAFA AND VIOLATION OF B.P. BLG. 22 AGAINST THE
PETITIONER.
IV
THE AFFIRMANCE BY THE HONORABLE COURT OF APPEALS OF
THE MODIFIED RESOLUTION OF THE HONORABLE SECRETARY
OF JUSTICE DIRECTING THE FILING OFAN INFORMATION
AGAINST PETITIONER FOR VIOLATION OF B.P. BLG. 22
OVERLOOKED THE FACT THAT RESPONDENT WOULD BE
UNJUSTLY ENRICHED AT THE EXPENSE OF PETITIONER AND
THE DEBTOR, MS RUBY AGUILAR, IN THE FORM OF
IMPOSITION OF A FINE WHICH IS DOUBLE THE AMOUNT OF
THE BOUNCED CHECKS.9
The main issue to be resolved is whether the CA erred in ruling
that the Secretary of Justice did not commit grave abuse of
discretion in finding that there is probable cause for the filing
of information against petitioner for violation of B.P. Blg. 22.
Petitioner alleges that the CA should not have sustained the
modified resolution of the Secretary of Justice because the
Secretary misappreciated her defense, i.e., that Aguilar lost
her Metrobank checkbook and borrowed her check and that
she issued the subject checks on the condition that the same
will be replaced when Aguilar's new checkbook is issued, thus
the subject checks are merely accommodation or guarantee
checks; that it was Aguilar who tendered them to respondent
in payment of her rice procurements from him; that the
subject checks were not intended for encashment; that Aguilar
subsequently issued her own checks dated July 20, 1996 and
August 20, 1996, for P431,555.00 each as replacement for the
subject checks; that such substitution was with respondent's
knowledge, since the arrangement was brought to his
attention through a letter dated July 19, 1996.
Petitioner insists that none of the elements of the offense
of B.P. Blg. 22 were present; the first element is absent, since
the subject checks were not intended to apply on account or
for value in favor of respondent, as petitioner had no business
transaction on rice procurements with respondent; the second
element is also absent because it is undisputed that at the time
petitioner issued the checks, she had substantial deposits with
FEBTC which can readily fund her checks upon presentment or
maturity; that the reason for the dishonor was "stop
payment," because she requested the bank to do so due to a
valid reason, i.e., her checks were already replaced by Aguilar's
checks dated July 20, 1996 and August 20, 1996. Petitioner
cites Tan v. People,10 in which the petitioner was acquitted of
violation of B.P. Blg. 22 because in ordering the stop payment
of her check, there were sufficient funds in her account.
Petitioner claims that the CA overlooked the fact that the
Secretary of Justice absolved her of estafa; thus, she should
also be absolved of violation of B.P. Blg. 22, since both
offenses arose from the same subject checks.
Petitioner contends that the CA misappreciated the
importance of a preliminary investigation when it ruled that
the trial on the merits must ensue, and it is on said occasion
when petitioner is granted the opportunity for a full and
exhaustive display of her evidence; that it erred in ruling that
it is only during trial that the presence or absence of the first
element of B.P. Blg. 22, i.e., whether the subject checks were
issued to apply to account or for value, can be determined;
that preliminary investigation should be given due importance
and the determination of whether the first element of B.P.
Blg. 22 is present should not be shifted to the trial court; that
contrary to the CA's finding, Sales is applicable, a case in which
it was ruled that at the preliminary investigation proper, the
question whether or not an accused can be bound over for trial
can already be determined; if it was determined at the
preliminary investigation that an accused had not committed
the crime charged, then it is useless to still hold a trial to
determine the guilt of the accused, since it can already be
determined at the preliminary investigation.
We are not persuaded.
In a preliminary investigation, the public prosecutor merely
determines whether there is probable cause or sufficient
ground to engender a well-founded belief that a crime has
been committed, and that the respondent is probably guilty
thereof and should be held for trial.11 Probable cause implies
probability of guilt and requires more than bare suspicion but
less than evidence which would justify a conviction.12 A finding
of probable cause needs only to rest on evidence showing that
more likely than not, a crime has been committed by the
suspect.13 It does not call for the application of rules and
standards of proof that a judgment of conviction requires after
trial on the merits.14 The complainant need not present at this
stage proof beyond reasonable doubt. A preliminary
investigation does not require a full and exhaustive
presentation of the parties' evidence.15 It is enough that in the
absence of a clear showing of arbitrariness, credence is given
to the finding and determination of probable cause by the
Secretary of Justice in a preliminary investigation.16
Contrary to petitioner's claim, respondent sufficiently
established the existence of probable cause for violation
of B.P. Blg. 22. Section 1 of B.P. Blg. 22 provides:
SECTION 1. Checks without sufficient funds. - Any person who
makes or draws and issues any check to apply on account or
for value, knowing at the time of issue that he does not have
sufficient funds in or credit with the drawee bank for the
payment of such check in full upon its presentment, which
check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored
for the same reason had not the drawer, without any valid
reason, ordered the bank to stop payment, shall be punished
by imprisonment of not less than thirty days but not more than
one (1) year or by a fine of not less than but not more than
double the amount of the check which fine shall in no case
exceed Two Hundred Thousand Pesos, or both such fine and
imprisonment at the discretion of the court.
The same penalty shall be imposed upon any person who,
having sufficient funds in or credit with the drawee bank when
he makes or draws and issues a check, shall fail to keep
sufficient funds or to maintain a credit to cover the full amount
of the check if presented within a period of ninety (90) days
from the date appearing thereon, for which reason it is
dishonored by the drawee bank.
Where the check is drawn by a corporation, company or entity,
the person or persons who actually signed the check in behalf
of such drawer shall be liable under this Act.
To be liable for violation of B.P. Blg. 22, the following elements
must be present:
1) The accused makes, draws or issues any check to apply to
account or for value;
2) The accused knows at the time of the issuance that he or
she does not have sufficient funds in, or credit with, the
drawee bank for the payment of the check in full upon its
presentment; and
3) The check is subsequently dishonored by the drawee bank
for insufficiency of funds or credit or it would have been
dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment.
The gravamen of the offense punished by B.P. Blg. 22 is the act
of making and issuing a worthless check; that is, a check that is
dishonored upon its presentation for payment. 17 In Lozano v.
Martinez,18 we have declared that it is not the non-payment of
an obligation which the law punishes. The law is not intended
or designed to coerce a debtor to pay his debt. The thrust of
the law is to prohibit, under pain of penal sanctions, the
making and circulation of worthless checks. Because of its
deleterious effects on the public interest, the practice is
proscribed by the law. The law punishes the act not as an
offense against property, but an offense against public
order.19 In People v. Nitafan,20 we said that a check issued as
an evidence of debt - though not intended to be presented for
payment - has the same effect as an ordinary check and would
fall within the ambit of B.P. Blg. 22.
In this case, petitioner issued the two subject checks in favor
of respondent, and when respondent presented them for
payment, they were dishonored for reason of the stop
payment order issued by petitioner. Notably, a
certification21 from the bank showed that they returned the
checks for that reason. In addition, contrary to the claim of
petitioner, at the time the said checks were presented for
deposit/payment, there were no sufficient funds to cover the
same. The mere act of issuing a worthless check - - whether as
a deposit, as a guarantee or even as evidence of pre-existing
debt - - is malum prohibitum.22
Petitioner claims that the subject checks were merely
accommodation checks in favor of Aguilar, as they were not
issued to account or for value, since she had no business
transactions with respondent-payee. However, petitioner
admitted that she issued the checks for the rice procurement
of Aguilar from respondent which was a valuable
consideration. Notably, in respondent's complaint-affidavit, he
alleged that the subject checks were given to him by Aguilar in
payment of the latter's rice procurements, with the
representation that the subject checks were her collection
checks and assuring respondent that they would be good upon
presentment.
On record is a letter23 dated July 31, 1996 of respondent's
counsel to petitioner on the matter of petitioner's subject
FEBTC Check No. 08A096028P dated July 25, 1996, a letter in
which the counsel wrote that the check which was in partial
payment of the obligation due from Aguilar, and that in return
for petitioner's issuance and delivery of the said check, Aguilar
acquired a temporary reprieve on her obligation.
The validity and merits of a party's defense and accusation, as
well as admissibility of testimonies and evidence, are better
ventilated during trial proper than at the preliminary
investigation level.24 A finding of probable cause does not
ensure a conviction or a conclusive finding of guilt beyond
reasonable doubt. The allegations adduced by the prosecution
will be put to test in a full-blown trial in which evidence shall
be analyzed, weighed, given credence or disproved. 25
In fact, petitioner's argument that respondent was aware of
the fact that the subject checks were only accommodation
checks in favor of Aguilar is not a defense against a charge for
violation of B.P. Blg. 22. In Ruiz v. People of the
Philippines,26 where the accused interposed the defense of
accommodation party, we held:
It bears stressing that, whether a person is an accommodation
party is a question of intent. When the intent of the parties
does not appear on the face of the check, it must be
ascertained in the light of the surrounding facts and
circumstances. Invariably, the tests applied are the purpose
test and the proceeds test. x x x. And even assuming she was
such party, this circumstance is not a defense to a charge for
violation of B.P. 22. What the law punishes is the issuance itself
of a bouncing check and not the purpose for which it was
issued or of the terms and conditions relating to its issuance.
The mere act of issuing a worthless check, whether merely as
an accommodation, is covered by B.P. 22. Hence, the
agreement surrounding the issuance of a check is irrelevant to
the prosecution and conviction of the petitioner.27
In Meriz v. People of the Philippines,28 we held:
The Court has consistently declared that the cause or reason
for the issuance of the check is inconsequential in determining
criminal culpability under BP 22. The Court has since said that
a "check issued as an evidence of debt, although not intended
for encashment, has the same effect like any other check" and
must thus be held to be "within the contemplation of BP 22."
Once a check is presented for payment, the drawee bank gives
it the usual course whether issued in payment of an obligation
or just as a guaranty of an obligation. BP 22 does not appear to
concern itself with what might actually be envisioned by the
parties, its primordial intention being to instead ensure the
stability and commercial value of checks as being virtual
substitutes for currency. It is a policy that can easily be eroded
if one has yet to determine the reason for which checks are
issued, or the terms and conditions for their issuance, before
an appropriate application of the legislative enactment can be
made. The gravamen of the offense under BP 22 is the act of
making or issuing a worthless check or a check that is
dishonored upon presentment for payment. The act
effectively declares the offense to be one
of malum prohibitum. The only valid query then is whether the
law has been breached, i.e., by the mere act of issuing a bad
check, without so much regard as to the criminal intent of the
issuer.29
Also, in Cruz v. Court of Appeals,30 we held:
It is now settled that Batas Pambansa Bilang 22 applies even in
cases where dishonored checks are issued merely in the form
of a deposit or a guarantee. The enactment in question does
not make any distinction as to whether the checks within its
contemplation are issued in payment of an obligation or
merely to guarantee the said obligation. In accordance with
the pertinent rule of statutory construction, inasmuch as the
law has not made any distinction in this regard, no such
distinction can be made by means of interpretation or
application. Furthermore, the history of the enactment of
subject statute evinces the definite legislative intent to make
the prohibition all-embracing, without making any exception
from the operation thereof in favor of a guarantee. This intent
may be gathered from the statement of the sponsor of the bill
(Cabinet Bill No. 9) which was enacted later into Batas
Pambansa Bilang 22, when it was introduced before the
Batasan Pambansa, that the bill was introduced to discourage
the issuance of bouncing checks, to prevent checks, from
becoming 'useless scraps of paper' and to restore
respectability to checks, all without distinction as to the
purpose of the issuance of the checks. The legislative intent as
above said is made all the more clear when it is considered that
while the original text of Cabinet Bill No. 9, supra, had
contained a proviso excluding from the coverage of the law a
check issued as a mere guarantee, the final version of the bill
as approved and enacted by the Committee on the Revision of
Laws in the Batasan deleted the abovementioned qualifying
proviso deliberately for the purpose of making the
enforcement of the act more effective (Batasan Record, First
Regular Session, December 4, 1978, Volume II, pp. 1035-1036).
Consequently, what are important are the facts that the
accused had deliberately issued the checks in question to
cover accounts and that the checks were dishonored upon
presentment regardless of whether or not the accused merely
issued the checks as a guarantee.31
Petitioner invokes our ruling in Magno v. Court of
Appeals32 where the accused therein was acquitted of B.P. Blg.
22 for issuing checks to collateralize an accommodation and
not to cover the receipt of actual account or for value.
In Magno, the accused, who was in the process of putting up a
car repair shop, was provided with credit facilities by LS
Finance and Management Corporation (LS Finance) to enable
him to lease from MANCOR the needed equipments. As part
of their arrangement, LS Finance required a 30% warranty
deposit of the "purchase/lease" value of the equipments to be
transacted upon. Accused then asked the LS Finance Vice
President Joey Gomez to look for a third party who could lend
him the equivalent amount of the warranty deposit as he did
not have such amount, however, unknown to the accused, it
was Corazon Teng (Vice President of MANCOR) who advanced
the deposit in question on condition that the same would be
paid as a short term loan at 3% interest. The accused
subsequently issued checks to collateralize an accommodation
made by Teng amounting to Twenty Nine Thousand Seven
Hundred Pesos (P29,700.00) as warranty deposit.
Subsequently, the said checks bounced; thus the accused was
prosecuted and the lower courts convicted him of B.P. Blg. 22.
On a Petition for Review on Certiorari, we however acquitted
the accused and held that the "cash out" made by Teng was
not used by the accused who was just paying rental on the
equipments. To charge him for the refund of a "warranty
deposit" he did not withdraw, because it was not his own
account and it remained with LS Finance, would be to make
him pay an unjust "debt," to say the least, since he did not
actually receive the amount involved. We also held that this is
a scheme whereby Teng as the supplier of the equipment in
the name of Mancor, would be able to sell or lease its goods as
in this case, and at the same time privately finance those who
desperately needed petty accommodations as obtaining in
said case; that this modus operandi, in so many instances,
victimized unsuspecting businessmen who likewise needed
protection from the law by availing themselves of the
deceptively called "warranty deposit," not realizing that they
would fall prey to a leasing equipment under the guise of a
lease-purchase agreement, when it was a scheme designed to
skim off a business client.
It bears stressing that Magno was decided after a full-blown
trial, and the proof needed to convict the accused was proof
beyond reasonable doubt, which was not established in that
case.
On the other hand, herein case is still in the preliminary
investigation stage which is merely inquisitorial, and it is often
the only means of discovering the persons who may be
reasonably charged with a crime, to enable the fiscal to
prepare his complaint or information.33 It is not a trial of the
case on the merits and has no purpose except that of
determining whether a crime has been committed and
whether there is probable cause to believe that the accused is
guilty.34 It is not the occasion for the full and exhaustive display
of the parties' evidence; it is for the presentation of such
evidence only as may engender a well-grounded belief that an
offense has been committed and that the accused is probably
guilty thereof.35 We are in accord with the Justice Secretary's
finding that there is reasonable ground to believe that a
violation of B.P. Blg. 22 has been committed by petitioner,
thus, we refrain from prejudging the applicablity or
inapplicability of Magno in this case.
Petitioner alleges that at the time she issued the subject
checks, she has substantial funds in the bank to cover the value
thereof. This is evidentiary in nature which must be presented
during trial more so in the light of the bank certification that
there were no sufficient funds to cover the checks when
presented for deposit/payment.
The law itself creates a prima facie presumption of knowledge
of insufficiency of funds. Section 2 of B.P. Blg. 22 provides:
payments, respondent still wanted to collect from petitioner's
subject checks the total amount of P863,110.00; that
respondent wanted to collect from both petitioner and Aguilar
for the latter's rice procurement. It is during the trial of this
case that evidence may be introduced to prove petitioner's
contentions. As of now, it has been established that when the
subject checks were deposited, they were all dishonored.
Furthermore, the allegation of petitioner that if the
information for B.P. Blg. 22 would be filed and in the remote
event that petitioner would be found guilty thereof, then the
trial court may impose a fine double the amount of the checks,
which fine may amount to millions of pesos; and that this is
unjust enrichment on respondent's part at the expense of
petitioner and Aguilar deserves scant consideration. Suffice it
to state that the fine that may be imposed by the court is not
awarded to the private complainant. Fine is imposed as a
penalty and not as payment for a specific loss or injury.38
In fine, the CA did not commit any error in upholding the
findings of the Secretary of Justice that probable cause exists
that the crime of violation of B.P. Blg. 22 has been committed
by petitioner.
WHEREFORE, the petition is DENIED. The Decision dated April
26, 2002 and the Resolution dated July 29, 2002 of the Court
of Appeals are hereby AFFIRMED.

Section 2. Evidence of knowledge of insufficient funds. - The Costs against petitioner.

making, drawing and issuance of a check payment of which is
refused by the drawee bank because of insufficient funds in or SO ORDERED.
credit with such bank, when presented within ninety (90) days
from the date of the check, shall be prima facieevidence of
knowledge of such insufficiency of funds or credit unless such
maker or drawer pays the holder thereof the amount due
thereon, or makes arrangements for payment in full by the
drawee of such check within five (5) banking days after
receiving notice that such check has not been paid by the
drawee.

Such knowledge is legally presumed from the dishonor of the

checks for insufficiency of funds.36 If not rebutted, it suffices to
sustain a conviction.37

We also find no merit in petitioner's claim that since the

Secretary of Justice absolved her of estafa, she should also be
absolved of violation of B.P. Blg. 22, since both offenses arose
from the same subject checks. While deceit and damage are
essential elements in estafa, they are not required in B.P. Blg.
22. As already aforestated, under B.P. Blg. 22, mere issuance
of a check that is dishonored gives rise to the presumption of
knowledge on the part of the drawer that he issued the same
without sufficient funds and is hence punishable.

We do not subscribe to petitioner's argument that for Aguilar's

rice procurements from respondent, Aguilar had made
substantial payments to respondent through cashier's checks
totalling P313,255.00; that despite these substantial
G. R. No. 164904 October 19, 2007
JOSE ANTONIO U. GONZALEZ, Petitioner,
vs.
HONGKONG & SHANGHAI BANKING
CORPORATION, Respondent.
DECISION
In this petition for review on certiorari1 under Rule 45 of the
Rules of Court, as amended, petitioner Jose Antonio U.
Gonzalez (Gonzalez) seeks; 1) the reversal of the 13 January
2004 Decision,2 and 6 August 2004 Resolution,3 both of the
Court of Appeals in CA-G.R. SP No. 75469; and 2)
the dismissal of the complaint4 for violation of Presidential
Decree No. 115, otherwise known as the "Trust Receipts Law,"
in relation to Article 315(1)(b) of the Revised Penal Code, filed
by respondent Hongkong & Shanghai Banking Corporation
(HSBC) against him before the City Prosecutor of Makati and
docketed as I.S. No. 00-G-24734-35.
The Court of Appeals, in its assailed decision and resolution,
found no grave abuse of discretion on the part of the Secretary
and the succeeding Acting Secretary, both of the Department
of Justice (DOJ), in their denial of petitioner Gonzalez’s petition
for review and motion for reconsideration, respectively.
Consequently, the appellate court affirmed the 17 October
2002,5 and 14 January 20036 twin resolutions of the DOJ,
which in turn affirmed the 13 September 2000 Resolution, 7 of
the City Prosecutor of Makati, recommending the filing of an
Information for violation of Presidential Decree No. 115, in
relation to Article 315(1)(b) of the Revised Penal Code against
petitioner Gonzalez.
The case stemmed from a complaint filed by respondent HSBC
against petitioner Gonzalez for estafa, more particularly, the
violation of Presidential Decree No. 115, in relation to Art.
315(1)(b) of the Revised Penal Code.
The antecedents of the present petition are beyond dispute.
They are:
At the time of the incident subject of the case at bar, petitioner
Gonzalez was the Chairman and Chief Executive Officer of
Mondragon Leisure and Resorts Corporation (MLRC). MLRC is
the owner, developer and operator of Mimosa Leisure
Estate8 located at the Clark Special Economic Zone (CSEZ),
Clark Field, Pampanga. On 1 August 1997, petitioner Gonzalez,
for and in behalf of MLRC, acknowledged receipt of various
golfing equipments and assorted Walt Disney items, and
signed the corresponding two Trust Receipt agreements, i.e.,
Trust Receipt No. 001-016310-205,9 covering the various
golfing equipments, and Trust Receipt No. 001-016310-
206,10 covering the assorted Walt Disney items, both in favor
of respondent HSBC.
The due date for Trust Receipt No. 001-016310-205, for the
value of HK$85,540.00, was on 1 September 1997, while that
of Trust Receipt No. 001-016310-206, for the value of
HK$143,993.90, was on 28 January 1998.
When the due dates of subject Trust Receipts came and went
without word from MLRC, respondent HSBC, through Paula L.
Felipe (Felipe), Vice-President of respondent HSBC’s Credit
Control Department, in a letter11 dated 28 March 2000,
demanded from MLRC the turnover of the proceeds of the sale
of the assorted goods covered by the Trust Receipts or the
return of said goods. Despite demand, however, MLRC failed
to return the assorted goods or their value. Consequently,
Felipe, for respondent HSBC, filed a criminal complaint for
estafa, i.e., for violation of Presidential Decree No. 115, the
"Trust Receipts Law," in relation to Art. No. 315(1)(b) of the
Revised Penal Code against petitioner Gonzalez before the
Office of the City Prosecutor of Makati, docketed as I.S. No. 00-
G-24734-35. The complaint-affidavit contained the following
allegations:
4. On August 1, 1997, Mr. Antonio U. Gonzalez, Chairman and
Chief Executive of Mondragon, executed in favor of the Bank
Trust Receipt No. 001-016310-205, by virtue of which he
acknowledged receipt from the Bank of "(Sporting Goods) Golf
Equipments" (sic) with the value of HK$85,540.00. Under this
trust receipt, Mr. Gonzalez bound himself to turn over to the
Bank the proceeds of the sale of the goods or to return them
in case of non-sale on January 28, 1998.
xxxx
5. On August 1, 1997, Mr. Gonzalez executed in favor of the
Bank Trust Receipt No. 001-016310-206, by virtue of which he
acknowledged receipt from the Bank of "Assorted Disney
Items" with the value of HK$143,993.90. Under this trust
receipt, Mr. Gonzalez bound himself to turn over to the Bank
the proceeds of the sale of the goods or to return them in case
of non-sale on September 1, 1997.
xxxx
6. All the abovementioned trust receipts x x x executed by the
respondents (sic) contain the following provisions:
‘1. The Document and the goods and/or proceeds to which
they relate ("The Goods") will be held for your [HSBC] benefit
and the entrustee will receive the Documents and take
delivery of the Good exclusively for the purpose of selling the
Goods unless you [HSBC] shall direct otherwise.
2. The Documents, the Goods and the proceeds of their sale
are and will be held by the entrustee in trust for you [HSBC] as
entruster and solely to your [HSBC] order and the entrustee
shall pay the proceeds to you [HSBC], immediately on receipt
thereof or of each portion thereof, as the case may be, without
set-off or any deduction. The records of the entrustee shall
properly record your [HSBC] interest in the Goods.
xxxx
10. This Trust Receipt shall be governed and construed in all
respects in accordance with P.D. 115 otherwise known as Trust
Receipts Law.’
7. Despite repeated oral and written demands upon
respondent, respondent has not turned over to the Bank a
single centavo of the proceeds of the sale of the
abovementioned goods covered by the Trust Receipts, or
returned any of the goods.12
In his defense, petitioner Gonzalez countered that:
2. At the outset, it must be stressed that the transactions
subject of the instant Complaint are between the complainant
bank and Mondragon Leisure and Resorts Corporation
("MLRC") and that the officers of the latter, including
respondent herein, in all of their official acts and transactions,
are not acting in their own personal capacity but, rather, are
merely acting on behalf of the corporation and performing a
valid corporate act pursuant to a validly enacted resolution of
the Board of Directors.
3. Moreover, it is clear that I cannot be held criminally
responsible for alleged violation of the Trust Receipts subject
hereof. The aforesaid transactions, while reportedly
denominated as "Trust Receipts" were not really intended by
the parties to be trust receipt transaction within the purview
of P.D. 115. At best, they are loan transactions, for which the
respondent cannot be held criminally liable.
xxxx
6. x x x respondent, who merely performed a valid corporate
act may not be held personally and criminally liable therefore
(sic), absent a clear showing of fault or negligence on his part
x x x.
7. x x x it is required that the person charged with estafa
pursuant to a trust receipt transaction must be proved to have
misappropriated, misused or converted to his own personal
use to the damage of the entruster, the proceeds of the goods
covered by the trust receipts. Thus, mere failure to pay the
amounts covered by the trust receipts does not conclusively
constitute estafa as defined under P.D. 115 and the Revised
Penal Code.
8. x x x. [W]hile respondent may have failed on behalf of MLRC
(which is actually the debtor) to make payments on the due
dates, such failure is neither attributable to respondent or due
to his wrongdoing or fault but on account of circumstances
concerning the corporation x x x.
xxxx
13. x x x there was a tacit agreement among the parties that
defendant, being a stable company with good credit standing,
would be accorded leniency and given enough leeway in the
settlement of its obligations.
xxxx
17. x x x the unlawful closure of the Casino by CDC and
PAGCOR, coupled with the Asian economic crisis, severely
affected its ability to pay its creditors, including complainant
bank herein, which have an aggregate exposure of about P5.3
Billion in Mondragon. These events rendered it impossible for
MLRC to duly comply with its financial obligations. These
events barred plaintiff bank from declaring MLRC’s obligation
due and demandable, and consequently from declaring MLRC
in default. Thus, since MLRC is not in default, respondents
herein cannot be charged for estafa as the obligations on the
basis of which they are being charged are not yet due and
demandable.13
Following the requisite preliminary investigation, in a
Resolution dated 13 September 2000, the City Prosecutor
found probable cause to hold petitioner Gonzalez liable for
two counts of estafa, more specifically, the violation of
Presidential Decree No. 115, in relation to Art. 315(1)(b) of the
Revised Penal Code. The City Prosecutor recommended that:
WHEREFORE, premises considered, it is respectfully
recommended that respondent Jose Antonio U. Gonzalez be
indicted with two (2) counts of Violation of P.D. 115 and that
the attached Information for that purpose be approved for
filing in court.14
In finding probable cause to prosecute petitioner Gonzalez for
the crime supposedly committed, the City Prosecutor held
that:
After study, assessment and thorough evaluation of the
evidence obtaining in this case at bar, the undersigned finds
probable cause to warrant respondent’s indictment with the
offense charge (sic) all the elements of which are obtaining
under the aforementioned circumstances. This is so because
respondent admitted having executed the trust receipts
subject matter of the case in point. The defense raised by the
respondent though it appears to be meritorious are (sic)
matters of defense best left for the court to consider and
appreciate during trial of the case. As shown above, the failure
of the entrustee/respondent to account for the goods covered
by the two (2) Trust Receipts which he received after notice
and demand caused him to be liable for two (2) counts of
violation of P.D. 115.15
On 24 October 2000, petitioner Gonzalez appealed the
foregoing resolution of the City Prosecutor to the DOJ by
means of a petition for review.
In a Resolution dated 17 October 2002, Honorable Hernando
B. Perez, then Secretary of the DOJ, denied said petition. In
affirming the resolution of the City Prosecutor of Makati, the
Secretary held that:
The gravamen of violation of PD 115 is the failure to account,
upon demand, for fund or property held in trust by virtue of a
trust receipt x x x. This failure, being clearly present in the
instant case, prima facie evidence of misappropriation lies. A
fortiori, the charges of dishonesty and abuse of confidence will
hold.16
Further, the Secretary ruled that:
The allegation of respondent that he cannot be made liable for
the offense as he was just performing a valid corporate act is
untenable x x x. The respondent being the Chairman and Chief
Executive Officer and the person who signed the trust receipts,
there can be no doubt that there is no other person who can
be considered as more responsible than him. He appears to be
the most responsible person contemplated under the
aforesaid provision of P.D. 115.
Finally, we agree with the Prosecutor’s findings that the other
defenses raised by the respondent are evidentiary in nature
and best left to the sound appreciation of the court in the
course of the trial.17
The dispositive of the resolution provides:
WHEREFORE, the assailed resolution is hereby AFFIRMED and
consequently, the petition is DENIED.18
Subsequently, on 14 January 2003, Hon. Merceditas N.
Gutierrez, then Acting Secretary of the DOJ, denied the motion
for reconsideration of petitioner Gonzalez.
Undaunted, petitioner Gonzalez went to the Court of Appeals
via a Petition for Review under Rule 4319 of the Rules of Court,
as amended.
On 13 January 2004, the Court of Appeals promulgated its
Decision denying petitioner Gonzalez’s recourse for lack of
merit.
The appellate court, notwithstanding the procedural infirmity,
as the petition filed under Rule 43 of the Rules of Court, as
amended, was the wrong mode of appeal, took cognizance of
and proceeded to resolve the petition based on substantive
grounds. In holding that no grave abuse of discretion
amounting to lack or excess of jurisdiction tainted the actions
of the Secretary as well as the Acting Secretary of the DOJ in
denying petitioner Gonzalez’s petition, the decision explained
that:
In the case at bar, it is decisively clear that petitioner executed
the trust receipts in behalf of MLRC and that there was a failure
to turn over the proceeds from the goods sold and the goods
themselves subject of the trust receipts despite demand from
the respondent bank. Such failure to account or turn over the
proceeds or to return the goods subject of the trust receipts
gives rise to the crime punished under the Trust Receipts Law.
[Citation omitted.] Petitioner is ventilating before us the
merits of his causes or defenses, but this is not the occasion for
the full and exhaustive display of evidence. The presence or
absence of the elements of the crime is evidentiary in nature
and shall be passed upon after a full-blown trial on the merits.
Petitioner’s defenses are matters best left to the discretion of
the court during trial.20
The fallo of the preceding decision reads:
WHEREFORE, the petition is DENIED for lack of merit.21
Petitioner’s motion for reconsideration was likewise denied in
a Resolution dated 6 August 2004.
Hence, the present petition filed under Rule 45 of the Rules of
Court, as amended.
In the present petition, petitioner Gonzalez fundamentally
seeks to reverse the ruling of the Court of Appeals on the
following grounds:
I.
THE HONORABLE COURT OF APPEALS COMMITTED
MANIFEST ERROR IN NOT FINDING THAT FOR A VALID
INDICTMENT UNDER PRESIDENTIAL DECREE NO. 115
TO LIE, THE SAID LAW MUST BE READ IN
CONJUNCTION WITH ARTICLE 315, PARAGRAPH 1 (B)
OF THE REVISED PENAL CODE WHICH REQUIRES THAT
THE PERSON CHARGED WITH ESTAFA PURSUANT TO
A TRUST RECEIPT TRANSACTION MUST BE PROVED TO
HAVE MISAPPROPRIATED, MISUSED OR CONVERTED
TO HIS PERSONAL USE THE PROCEEDS OF THE GOODS
COVERED BY THE TRUST RECEIPTS TO THE DAMAGE
OF THE ENTRUSTER; and
II.
NO PROBABLE CAUSE EXISTS TO WARRANT THE
INDICTMENT OF PETITIONER FOR VIOLATION OF
SECTION 13 OF PRESIDENTIAL DECREE 115.22
On the whole, the basic issue presented before this Court in
this petition is, given the facts of the case, whether or not there
is probable cause to hold petitioner Gonzalez liable to stand
trial for violation of Presidential Decree No. 115, in relation to
Art. 315(1)(b) of the Revised Penal Code.
Petitioner Gonzalez contends that the Court of Appeals
committed manifest error in ruling, that, probable cause
existed to hold him liable to stand trial merely on the basis of
"his admission that he executed the trust receipts subject
matter of the case below and his failure to account for the
goods covered by the same."23 He argues that the City
Prosecutor of Makati and the DOJ failed to appreciate two
important facts: 1) that the real transaction that led to the
present controversy was in fact a loan agreement; and 2) that
MLRC simply extended to Best Price PX, Inc., the owner and
operator of Mimosa Mart at the CESZ, its credit line with
respondent HSBC, such that Best Price was the actual debtor
of respondent bank. Paradoxically, he maintains that "the fact
that (he) held a high position in MLRC was not sufficient reason
to charge him for alleged violation of trust receipts."24 He
insists further that he is not the person responsible for the
offense allegedly committed because of the absence of "a
clear showing of fault or negligence on his part." According to
petitioner Gonzalez, "President (sic) Decree No. 115 must be
read in conjunction with Article 315, paragraph 1(b) of the
Revised Penal Code x x x under both x x x it is required that the
person charged with estafa pursuant to a trust receipt
transaction must be proved to have misappropriated, misused
or converted to his own personal use the proceeds of the
goods covered by the trust receipts to the damage of the
entruster." Thus, petitioner concludes that "mere failure to
pay the amounts covered by the trust receipts does not
conclusively constitute estafa as defined under Presidential
Decree No. 115 and Article 315, paragraph 1(b)."
Respondent HSBC, on the other hand, contends that
"petitioner is criminally liable since he signed the trust receipts
x x x;"25 and, that, "[f]raud is not necessary for conviction for
violation of the Trust Receipts Law,"26 the latter being in the
nature of a malum prohibitum decree. On the issue of
company reverses, Asian currency crisis and the closure of the
Mimosa Regency Casino, respondent HSBC counters that
"[t]hey do not excuse petitioner for his failure to comply with
his obligations under the trust receipts,"27 because unlike
"motor vehicles or parcels of land, which are frequently
purchased on credit or on installment basis,"28 the goods
covered by the two trust receipts, i.e., assorted Disney items
and various golfing equipments, are usually paid for in cash
upon receipt by buyers; and if not sold, the merchandise
should still be with MLRC. Hence, there was no reason for
petitioner Gonzalez’s failure to comply with his obligation
under the two Trust Receipts – to turn over the proceeds of
the sale of the goods or to return the goods if they remained
unsold.
We find no merit in the petition.
We agree with the Court of Appeals that no grave abuse of
discretion amounting to lack or excess of jurisdiction marred
the assailed resolutions of the DOJ.
Herein, petitioner Gonzalez questions the finding of probable
cause by the City Prosecutor to hold him liable to stand trial for
the crime complained of. Probable cause has been defined as
the existence of such facts and circumstances as would excite
the belief in a reasonable mind, acting on the facts within the
knowledge of the prosecutor, that the person charged was
guilty of the crime for which he was prosecuted. 29 A finding of
probable cause merely binds over the suspect to stand trial. It
is not a pronouncement of guilt.30
To determine the existence of probable cause, there is a need
to conduct preliminary investigation. A preliminary
investigation is an inquiry to determine whether (a) a crime
has been committed; and (b) whether there is probable cause
to believe that the accused is guilty thereof. Such investigation
is designed to secure the (accused) against hasty, malicious
and oppressive prosecution, the conduct of which is executive
in nature.31
The executive department of the government is accountable
for the prosecution of crimes, its principal obligation being the
faithful execution of the laws of the land. A necessary
component of the power to execute the laws is the right to
prosecute their violators.32 Corollary to this, the right to
prosecute vests the prosecutor with a wide range of discretion,
the discretion of whether, what and whom to charge, the
exercise of which depends on a smorgasbord of factors which
are best appreciated by prosecutors.33
Having said the foregoing, this Court consistently adheres to
the policy of non-interference in the conduct of preliminary
investigations, and to leave to the investigating prosecutor
sufficient latitude of discretion in the determination of what
constitutes sufficient evidence as will establish probable cause
for the filing of an information against the supposed
offender,34 courts can only review whether or not the
executive determination of probable cause was done without
or in excess of jurisdiction resulting from grave abuse of
discretion. Thus, although it is entirely possible that the
investigating prosecutor may erroneously exercise the
discretion lodged in him by law, this does not render his act
amenable to correction and annulment by the extraordinary
remedy of certiorari, absent any showing of grave abuse of
discretion amounting to excess of jurisdiction. 35
And for courts of law to grant the extraordinary writ of
certiorari, so as to justify the reversal of the finding on the
existence of probable cause to file an information, the one
seeking the writ must be able to establish that the
investigating prosecutor exercised his power in an arbitrary
and despotic manner, by reason of passion or personal
hostility, and it must be patent and gross as would amount to
an evasion or to a unilateral refusal to perform the duty
enjoined or to act in contemplation of law. Grave abuse of
discretion is not enough.36 Excess of jurisdiction signifies that
he had jurisdiction over the case but has transcended the same
or acted without authority.37
Try as we might, this Court cannot find substantiation that the
executive determination of probable cause was done without
or in excess of jurisdiction resulting from grave abuse of
discretion, when the City Prosecutor resolved to recommend
the filing of the Information for two counts of violation of
Presidential Decree No. 115 against petitioner Gonzalez.
Similarly, there is absolutely no showing that the DOJ, in the
exercise of its power to review on appeal the findings of the
City Prosecutor of Makati, acted in an arbitrary or despotic
manner that amounted to an excess or lack of jurisdiction.
In the case at bar, petitioner Gonzalez is charged by
respondent HSBC with violating Presidential Decree No. 115.
Section 4 of the "Trust Receipts Law" defines a trust receipt
transaction as –
Section 4. What constitutes a trust receipts transaction. – A
trust receipt transaction, within the meaning of this Decree, is
any transaction by and between a person referred to in this
Decree as the entruster, and another person referred to in this
Decree as entrustee, whereby the entruster, who owns or
holds absolute title or security interests over certain specified
goods, documents or instruments, releases the same to the
possession of the entrustee upon the latter’s execution and
delivery to the entruster of a signed document called a "trust
receipt" wherein the entrustee binds himself to hold the
designated goods, documents or instruments in trust for the
entruster and to sell or otherwise dispose of the goods,
documents or instruments with the obligation to turn over to
the entruster the proceeds thereof to the extent of the
amount owing to the entruster or as appears in the trust
receipt or the goods, documents or instruments themselves if
they are unsold or not otherwise disposed of, in accordance
with the terms and conditions specified in the trust receipt, or
for other purposes substantially equivalent to any of the
following:
1. In the case of goods or documents: (a) to sell the
goods or procure their sale; or (b) to manufacture or
process the goods with the purpose of ultimate sale:
Provided, That, in the case of goods delivered under
trust receipt for the purpose of manufacturing or
processing before its ultimate sale, the entruster shall
retain its title over the goods whether in its original or
processed form until the entrustee has complied fully
with his obligation under the trust receipt; or (c) to
load, unload, ship or transship or otherwise deal with
them in a manner preliminary or necessary to their
sale; or
2. In the case of instruments: (a) to sell or procure
their sale or exchange; or (b) to deliver them to a
principal; or (c) to effect the consummation of some
transactions involving delivery to a depository or
register; or (d) to effect their presentation, collection
or renewal.
The sale of good, documents or instruments by a person in the
business of selling goods, documents or instruments for profit
who, at the outset of transaction, has, as against the buyer,
general property rights in such goods, documents or
instruments, or who sells the same to the buyer on credit,
retaining title or other interest as security for the payment of
the purchase price, does not constitute a trust receipt
transaction and is outside the purview and coverage of this
Decree.
In general, a trust receipt transaction imposes upon the
entrustee the obligation to deliver to the entruster the price of
the sale, or if the merchandise is not sold, to return the same
to the entruster. There are thus two obligations in a trust
receipt transaction: the first, refers to money received under
the obligation involving the duty to turn it over (entregarla) to
the owner of the merchandise sold,38 while the second refers
to merchandise received under the obligation to "return" it
(devolvera) to the owner.39 A violation of any of these
undertakings constitutes estafa defined under Art. 315(1)(b) of
the Revised Penal Code, as provided by Sec. 13 of Presidential
Decree 115, viz:
Section 13. Penalty clause. – The failure of an entrustee to turn
over the proceeds of the sale of the goods, documents or
instruments covered by a trust receipt to the extent of the
amount owing to the entruster or as appears in the trust
receipt or to return said goods, documents or instruments if
they were not sold or disposed of in accordance with the terms
of the trust receipt shall constitute the crime of estafa,
punishable under the provisions of Article Three Hundred and
Fifteen, paragraph one (b) of Act Numbered Three Thousand
Eight Hundred and fifteen, as amended, otherwise known as
the Revised Penal Code. If the violation or offense is
committed by a corporation, partnership, association or other
juridical entities, the penalty provided for in this Decree shall
be imposed upon the directors, officers, employees or other
officials or persons therein responsible for the offense,
without prejudice to the civil liabilities arising from the criminal
offense.
Article 315(1)(b) of the Revised Penal Code punishes estafa
committed as follows:
1. With unfaithfulness or abuse of confidence, namely:
xxxx
(b) By misappropriating or converting, to the prejudice of
another, money, goods, or any other personal property
received by the offender in trust or on commission, or for
administration, or under any other obligation involving the
duty to make delivery of or to return the same, even though
such obligation be totally or partially guaranteed by a bond; or
by denying having received such money, goods, or other
property.
As found in the complaint-affidavit of respondent HSBC’s
representative, petitioner Gonzalez is charged with failing to
turn over "to the Bank a single centavo of the proceeds of the
sale of the (assorted) goods covered by the Trust Receipts, or
x x x"40 or to return any of the assorted goods. From the
evidence adduced before the City Prosecutor of Makati i.e., 1)
the two Trust Receipts bearing the acknowledgment signature
of petitioner Gonzalez; 2) the official documents concerning
the transaction between MLRC and respondent HSBC; 3) the
demand letter of respondent HSBC; and, significantly, 4) the
counter-affidavit of petitioner Gonzalez containing his initial
admission that on behalf of MLRC, he entered into a trust
receipt transaction with respondent HSBC – the investigating
officer determined that there existed probable cause to hold
petitioner Gonzalez for trial for the crime charged. Time and
again, this Court has stated that probable cause need not be
based on clear and convincing evidence of guilt, neither on
evidence establishing guilt beyond reasonable doubt and,
definitely, not on evidence establishing absolute certainty of
guilt; but it certainly demands more than bare suspicion and
can never be left to presupposition, conjecture, or even
convincing logic.41 In the present case, there being sufficient
evidence to support the finding of probable cause by the City
Prosecutor of Makati, the same cannot be said to have
resulted from bare suspicion, presupposition, conjecture or
logical deduction.
That petitioner Gonzalez neither had the intent to defraud
respondent HSBC nor personally misused/misappropriated the
goods subject of the trust receipts is of no moment. The
offense punished under Presidential Decree No. 115 is in the
nature of malum prohibitum. A mere failure to deliver the
proceeds of the sale or the goods if not sold, constitutes a
criminal offense that causes prejudice not only to another, but
more to the public interest.42 This is a matter of public policy
as declared by the legislative authority. Moreover, this Court
already held previously that failure of the entrustee to turn
over the proceeds of the sale of the goods, covered by the trust
receipt, to the entruster or to return said goods if they were
not disposed of in accordance with the terms of the trust
receipt shall be punishable as estafa under Art. 315(1)(b) of the
Revised Penal Code without need of proving intent to
defraud.43
with the law and, if they fail to do so, are held criminally
accountable; thus, they have a responsible share in the
violations of the law.45 And second, a corporation or other
juridical entity cannot be arrested and imprisoned; hence,
cannot be penalized for a crime punishable by imprisonment.46
Petitioner Gonzalez’s allegation that Best Price PX, Inc. is the
real party in the trust receipt transaction and his assertion that
the real transaction between respondent HSBC and MLRC is a
loan agreement, are matters of defense best left to the trial
court’s deliberation and contemplation after conducting the
trial of the criminal case. To reiterate, a preliminary
investigation for the purpose of determining the existence of
probable cause is not part of the trial. A full and exhaustive
presentation of the parties’ evidence is not required, but only
such as may engender a well-grounded belief that an offense
has been committed and that the accused is probably guilty
thereof.47
In fine, the Court of Appeals committed no reversible error
when it ruled that there was no grave abuse of discretion on
the part of the Secretary and Acting Secretary of the DOJ in
directing the filing of the Information against petitioner
Gonzalez for violation of Presidential Decree No. 115 in
relation to Article 315(1)(b) of the Revised Penal Code.
WHEREFORE, premises considered, the instant petition is
DENIED for lack of merit. The assailed 13 January 2004
Decision and 6 August 2004 Resolution, both of the Court of
Appeals in CA-G.R. SP No. 75469 are hereby AFFIRMED. Costs
against petitioner.
SO ORDERED.

As a last ditch effort to exculpate himself from the offense

charged, petitioner Gonzalez posits that, "the fact that (he)
held a high position in MLRC was not sufficient reason to
charge him for alleged violation of trust
receipts."44Unfortunately, it is but a futile attempt. Though
petitioner Gonzalez signed the Trust Receipts merely as a
corporate officer of MLRC and had no physical possession of
the goods subject of such receipts, he cannot avoid
responsibility for violation of Presidential Decree No. 115 for
two unpretentious reasons: first, that the last sentence of
Section 13 of the "Trust Receipts Law," explicitly imposes the
penalty provided therein upon "directors, officers, employees
or other officials or persons therein responsible for the
offense, without prejudice to the civil liabilities arising from
the criminal offense," of a corporation, partnership,
association or other juridical entities found to have violated
the obligation imposed under the law. The rationale for
making such officers and employees responsible for the
offense is that they are vested with the authority and
responsibility to devise means necessary to ensure compliance