THIRD DIVISION

[G.R. No. 134436. August 16, 2000]

METROPOLITAN BANK and TRUST COMPANY, petitioner, vs. JOAQUIN TONDA and MA. CRIST
INA TONDA, respondents.
D E C I S I O N
GONZAGA_REYES, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to set aside the Decision[1] of the Court of Appeals[2] dated June 29, 1
998 in CA-G.R. SP No. 38113 which: (1) reversed Resolution No. 417, s. 1994,[3]
dated June 1, 1994 of the Department of Justice[4] directing to file the appropr
iate Information against herein respondents Joaquin P. Tonda and Ma. Cristina V.
Tonda for violation of P.D. 115 in relation to Article 315 (1) (b) of the Revis
ed Penal Code; and (2) effectively set aside the Resolutions dated April 7, 1995
[5] and July 12 1995[6] of the Department of Justice denying the motions for rec
onsideration.
Spouses Joaquin G. Tonda and Ma. Cristina U. Tonda, hereinafter referred to as t
he TONDAS, applied for and were granted commercial letters of credit by petition
er Metropolitan Bank and Trust Company, hereinafter referred to as METROBANK for
a period of eight (8) months beginning June 14, 1990 to February 1, 1991 in con
nection with the importation of raw textile materials to be used in the manufact
uring of garments. The TONDAS acting both in their capacity as officers of Hone
y Tree Apparel Corporation (HTAC) and in their personal capacities, executed ele
ven (11) trust receipts to secure the release of the raw materials to HTAC. The
imported fabrics with a principal value of P2,803,000.00 were withdrawn by HTAC
under the 11 trust receipts executed by the TONDAS. Due to their failure to se
ttle their obligations under the trust receipts upon maturity, METROBANK through
counsel, sent a letter dated August 10, 1992, making its final demand upon the
TONDAS to settle their past due TR/LC accounts on or before August 15, 1992. Th
ey were informed that by said date, the obligations would amount to P4,870,499.1
3. Despite repeated demands therefor, the TONDAS failed to comply with their ob
ligations stated in the trust receipts agreements, i.e. the TONDAS failed to acc
ount to METROBANK the goods and/or proceeds of sale of the merchandise, subject
of the trust receipts.
Consequently, on November 9, 1992, Metrobank, through its account officer Eligio
Labog, Jr., filed with the Provincial Prosecutor of Rizal a complaint/affidavit
against the TONDAS for violation of P.D. No. 115 (Trust Receipts Law) in relati
on to Article 315 (1) (b) of the Revised Penal Code. On February 12, 1993, the a
ssigned Assistant Prosecutor of Rizal submitted a Memorandum to the Provincial P
rosecutor recommending that the complaint in I.S. No. 92-8703 be dismissed on th
e ground that the complainants had failed to establish the existence of the essen
tial elements of Estafa as charged. The recommendation was approved by Rizal Prov
incial Prosecutor Mauro Castro on May 18, 1993.
METROBANK then appealed to the Department of Justice (DOJ). On June 1, 1994, Un
dersecretary Ramon. S. Esguerra reversed the findings of the Provincial Prosecut
or of Rizal and ordered the latter to file the appropriate information against t
he TONDAS as charged in the complaint.
The TONDAS immediately sought a reconsideration of the DOJ Resolution but their
motion was denied by the then acting Justice Secretary Demetrio G. Demetria in a
Letter-Resolution dated April 7, 1995. A second motion for reconsideration by
the TONDAS was likewise denied by then Justice Secretary Teofisto Guingona on Ju
ly 12, 1995.

Subsequently, the TONDAS filed with the Court of Appeals a special civil action
for certiorari and prohibition with application for a temporary restraining orde
r or a writ of preliminary injunction,[7] which was docketed as CA-G.R. SP No. 3
8113. They contended therein that the Secretary of Justice acted without or in e
xcess of jurisdiction in issuing the aforementioned Resolution dated July 12, 19
95 denying with finality their motion for the reconsideration of the Resolution
dated April 7, 1995 of the Acting Secretary of Justice, which in turn denied the
ir motion for the reconsideration of Resolution No. 417, s. 94, dated June 1, 19
94, directing to file the appropriate Information against the TONDAS.
The Court of Appeals granted the TONDAS' petition and ordered the criminal compl
aint against them dismissed. The Court of Appeals held that METROBANK had faile
d to show a prima facie case that the TONDAS violated the Trust Receipts Law in
relation to Art. 315 (1) (b) of the Revised Penal Code in the face of convincing
proof that "that the amount of P2.8 Million representing the outstanding obliga
tion of the TONDAS under the trust receipts account had already been settled by
them in compliance with the loan restructuring proposal; and that in the absence
of a loan restructuring agreement, METROBANK could still validly apply the amou
nt as payment thereof." The relevant portions of the Court of Appeals decision a
re quoted as follows:
"Petitioners admitted that in 1991 their company, the Honey Tree Apparel Corpora
tion (HTAC), had some financial reversals making it difficult for them to comply
with their loan obligations with Metrobank. They were then constrained to prop
ose a loan restructuring agreement with the private respondent to enable them to
finally settle all outstanding obligations with the latter. In a letter dated
23 September 1991, petitioner Joaquin Tonda submitted a proposed Loan Restructur
ing Scheme to Metrobank. In said letter, petitioner Tonda proposed to immediate
ly pay in full the outstanding principal charges under the trust receipts accoun
t and the remaining obligations under a separate schedule of payment. Petitione
rs attached with said letter an itemized proposal (Attachment "A"), part of whic
h reads:
1. Trust Receipts - The new management and. Mr. Joaquin G. Tonda will pay immed
iately the entire principal of the outstanding Trust Receipts amounting to P2,80
3,097.14. While the interest accrued up to September 13, 1991 amounting to P409
,601.57 plus the additional interest shall be re-structured together with item n
o. 2 below. A joint sharing account in the name of Joaquin G. Tonda and Wang Ti
en En equal to Trust Receipt amount of 1.8 Million will be opened at Metrobank M
akati. (emphasis supplied)
It would appear that the aforestated amount of 1.8 Million was erroneously writt
en since the intention of the petitioners was to open an account of P2.8 Million
to pay the entire principal of the outstanding trust receipts account. In fact
, also on 23 September 1991, petitioner Joaquin Tonda and Wang Tien En deposited
four different checks with a total amount of P2,800,000.00 with Metrobank. The
checks were received by a certain Flor C. Naanep. Notably, the petitioners had
obtained a written acknowledgement of receipt of the checks totaling P2.8 Milli
on from the Metrobank officer in order to show proof of compliance with the loan
restructuring proposal. If the petitioners had intended it to be a simple depo
sit, then a deposit slip with a machine validation by the private respondent ban
k would have otherwise been sufficient.
In a letter dated 22 October 1991, Metrobank wrote to the petitioners informing
them that the bank had accepted their proposal subject to certain conditions, th
e first of which referred to the immediate payment of the amount of P2.8 Million
, representing the outstanding trust receipts account. The petitioners appeared
to have offered a counter proposal such that no final agreement had yet been re
ached.

However, the succeeding negotiations between petitioners and Metrobank, after th

e initial offer of 23 September 1991 was made, dealt with the other outstanding
obligations while the matter regarding the trust receipts account remained uncha
nged; therefore, it was settled between the parties that the amount of P2.8 Mill
ion should be paid to cover all outstanding obligations under the trust receipts
account. Despite the inability of both parties to reach a mutually agreeable lo
an restructured agreement, the amount of P2.8 Million which was deposited on 23
September 1991 by the petitioners appears to remain intact and untouched as Metr
obank had failed to show evidence that the money has been withdrawn from the sav
ings account of the petitioners.
Moreover, the deposit made by the petitioners was made known to Metrobank clearl
y as a compliance with the proposed loan restructuring agreement. As shown in t
he correspondence made by the petitioners on 28 February 1992 to Metrobank, afte
r the latter had made a formal demand for payment of all outstanding obligations
, the deposit was mentioned, to wit:
"May we emphasize that to show sincerity and financial capability, soon after we
received your letter dated October 22, 1991 informing us of your approval of th
e restructuring and consolidation of our firm's obligations, a personal account
was opened by two (2) of our stockholders in the amount equivalent to the TR/LC,
Account of about P2.8 Million which deposit is still maintained with your bank,
free from any lien or encumbrance, and may be applied anytime to the payment of
the TR/LC Account upon the implementation by the parties of the terms of restru
cturing.""(emphasis supplied)
The contention of Metrobank that the money had not been actually applied as paym
ent for petitioners' outstanding obligation under the trust receipts account is
absolutely devoid of merit, considering that the petitioners were still in the p
rocess of negotiating for a reasonable loan restructuring arrangement with Metro
bank when the latter abruptly abandoned all efforts to negotiate and instantly d
emanded from the petitioners the fulfillment of all their outstanding obligation
s.
In the case of Tan Tiong Tick vs. American Apothecaries, 65 Phil. 414, the Supre
me Court had held that:
When a depositor is indebted to a bank, and the debts are mutual - that is, betwe
en the same parties and in the, same right - the bank may apply the deposit, or
such portion thereof as may be necessary, to the payment of the debt due it by t
he depositor, provided there is no express agreement to the contrary and the dep
osit is not specifically applicable to some other particular purpose.
Applying the above-mentioned ruling in this case, if the parties therefore fail
to reach an agreement regarding the restructuring of HTAC's loan, Metrobank can
validly apply the amount deposited by the petitioners as payment of the principa
l obligation under the trust receipts account.
On the basis of all the evidence before Us, this Court is convinced that the amo
unt of P2.8 Million representing the outstanding obligation of the petitioners u
nder the trust receipts account had already been settled by the petitioners. Th
e money remains deposited under the savings account of the petitioners awaiting
a final agreement with Metrobank regarding the loan restructuring arrangement.
Meanwhile, Metrobank has the right to use the deposited amount in connection wit
h any of its banking business.
With convincing proof that the amount of P2.8 Million deposited under petitioner
s' savings account with Metrobank was indeed intended to be applied as payment f
or the outstanding obligations of HTAC under the trust receipts, Metrobank, the
refore, had failed to show a prima facie case that the petitioners had violated

the Trust Receipts Law (P.D. No. 115) in relation to Art. 315 of the Revised Pen
al Code. Besides, there is absolutely no evidence suggesting that Metrobank has
been damaged by the proposal and the deposit made by the petitioners. As noted
by the prosecutor:
It is clear from the evidence that complainant bank had, all the while, been info
rmed of the steps undertaken by the respondents relative to the trust receipts a
nd other financial obligations vis-a-vis HTAC's financial difficulties. Hardly
therefore, could it be said that respondents were unfaithfully, deceptively, dec
eitfully and fraudulently dealing with complainant bank to warrant an indictment
for Estafa.[8]
Hence, this recourse to this Court where petitioner submits for the consideratio
n of this Court the following issues:
I.
WHETHER METROBANK HAS SHOWN A PRIMA FACIE VIOLATION OF THE TRUST RECEIPTS LAW IN
RELATION TO ART. 315 OF THE REVISED PENAL CODE
II.
WHETHER AN AGREEMENT WAS FORGED BETWEEN THE PARTIES THAT THE 2.8 MILLION DEPOSIT
ED IN THE JOINT ACCOUNT OF JOAGUIN G. TONDA AND WANG TIEN EN WOULD BE CONSIDERED
AS PAYMENT FOR THE OUTSTANDING OBLIGATIONS OF THE SPOUSES TONDA UNDER THE TRUST
RECEIPTS
III.
WHETHER INSPITE OF THE FAILURE OF THE PARTIES TO AGREE UPON A RESTRUCTURING AGRE
EMENT, METROBANK CAN STILL APPLY THE P2.8 MILLION DEPOSIT AS PAYMENT TO THE PRIN
CIPAL AMOUNT COVERED BY THE TRUST RECEIPTS
IV.
WHETHER DAMAGE HAS BEEN CAUSED TO METROBANK BECAUSE OF THE PROPOSAL AND OF THE D
EPOSIT
V.
WHETHER METROBANK HAS THE STANDING TO PROSECUTE THE CASE A QUO
VI.
WHETHER THE ASSIGNED ERRORS IN THE PETITION FOR CERTIORARI FILED WITH THIS HONOR
ABLE COURT RAISES PURELY QUESTIONS OF FACTS[9]
In response to the foregoing, the TONDAS maintain that METROBANK has no legal st
anding to file the present petition without the conformity or authority of the p
rosecutor as it deals solely with the criminal aspect of the case, a separate ac
tion to recover civil liability having already been instituted; that the issues
raised in the present petition are purely factual; and that the subject trust re
ceipts obligations have been extinguished by payment or legal compensation.
We find for petitioner bank.
Preliminarily, we shall resolve the issues raised by the TONDAS regarding the st
anding of METROBANK to file the instant petition and whether the same raises que
stions of law.

The general rule is that it is only the Solicitor General who is authorized to b
ring or defend actions on behalf of the People or the Republic of the Philippine
s once the case is brought before this Court or the Court of Appeals. However,
an exception has been made that "if there appears to be grave error committed by
the judge or lack of due process, the petition will be deemed filed by the priv
ate complainants therein as if it were filed by the Solicitor General."[10] In t
hat case, the Court gave due course to the petition and allowed the petitioners
to argue their case in lieu of the Solicitor General. We accord the same treatm
ent to the instant petition on account of the grave errors committed by the Cour
t of Appeals. We add that no information having been filed yet in court, there
is, strictly speaking, no case yet for the People or the Republic of the Philipp
ines. In answer to the second issue raised by the TONDAS, while the jurisdictio
n of the Supreme Court in a petition for review on certiorari under Rule 45 of t
he Revised Rules of Court is limited to reviewing only errors of law, not of fac
t, one exception to the rule is when the factual findings complained of are devo
id of support by the evidence on record or the assailed judgment is based on mis
appreciation of facts[11], as will be shown to have happened in the instant case
.
In the main, the issue is whether or not the dismissal by the Court of Appeals o
f the charge for violation of the Trust Receipts Law in relation to Art. 315(1)
(b) of the Revised Penal Code against the TONDAS is warranted by the evidence at
hand and by law.
The Court of Appeals gravely erred in reversing the Department of Justice
finding of probable cause to hold the TONDAS for trial. The documentary
ce presented during the preliminary investigation clearly show that there
obable cause to warrant a criminal prosecution for violation of the Trust
ts Law.

on the
eviden
was pr
Receip

The relevant penal provision of P.D. 115 provides:

SEC. 13. Penalty Clause. - The failure of an entrustee to turn over the proceed
s 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 re
ceipt 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 an
d Fifteen, Paragraph One (b), of Act Numbered Three Thousand Eight Hundred and F
ifteen, as amended, otherwise known as the Revised Penal Code. If the violation
or offense is committed by a corporation, partnership, association or other jud
icial entities, the penalty provided for in this Decree shall be imposed upon th
e directors, officers, employees or other officials or persons therein responsib
le for the offense, without prejudice to the civil liabilities arising from the
criminal offense.
Section 1 (b), Article 315 of the Revised Penal Code under which the violation i
s made to fall, states:
"x x x Swindling (estafa). - Any person who shall defraud another by any of the
mans mentioned herein below x x x:
x x x

x x x

x x x

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 commiss
ion, 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 o
r partially guaranteed by a bond; or by denying having received such money, good
s, or other property.

Based on the foregoing, it is plain to see that the Trust Receipts Law declares
the failure to turn over the goods or the proceeds realized from the sale thereo
f, as a criminal offense punishable under Article 315 (1) (b) of the Revised Pen
al Code. The law is violated whenever the entrustee or the person to whom the t
rust receipts were issued in favor of fails to: (1) return the goods covered by
the trust receipts; or (2) return the proceeds of the sale of the said goods.
The foregoing acts constitute estafa punishable under Article 315 (1) (b) of the
Revised Penal Code. Given that various trust receipts were executed by the TOND
AS and that as entrustees, they did not return the proceeds from the goods sold
nor the goods themselves to METROBANK, there is no dispute that that the TONDAS
failed to comply with the obligations under the trust receipts despite several d
emands from METROBANK.
Finding favorably for the TONDAS, however, and ordering the dismissal of the com
plaint against them, the Court of Appeals held that: (1) the TONDAS opened a sa
vings account of P2.8 Million to pay the entire principal of the outstanding tru
st receipts account; (2) the TONDAS obtained from a METROBANK officer[12] a writ
ten acknowledgement of receipt of checks totaling P2.8 Million in order to show
proof of compliance with the loan restructuring proposal; (3) it was settled bet
ween the parties that the amount of 2.8 Million should be paid to cover all outs
tanding obligations under the trust receipts account; (4) the money remains depo
sited under the savings account of petitioners awaiting a final agreement with M
ETROBANK regarding the loan restructuring arrangement; and that (5) there is no
evidence suggesting that METROBANK has been damaged by the proposal and the depo
sit or that the TONDAS employed fraud and deceit in their dealings with the bank
.
The foregoing findings and conclusions are palpably erroneous.
First, the amount of P2.8 million was not directly paid to METROBANK to settle t
he trust receipt accounts, but deposited in a joint account of Joaquin G. Tonda
and a certain Wang Tien En. In a letter dated February 28, 1992, signed by HTAC
's Vice President for Finance, METROBANK was informed that the amount "may be ap
plied anytime to the payment of the trust receipts account upon implementation o
f the parties of the terms of the restructuring."[13] The parties failed to agre
e on the terms of the loan restructuring agreement as the offer by the TONDAS to
restructure the loan was followed by a series of counter-offers which yielded n
othing. It is axiomatic that acceptance of an offer must be unqualified and abs
olute[14] to perfect a contract. The alleged payment of the trust receipts acco
unts never became effectual on account of the failure of the parties to finalize
a loan restructuring arrangement.
Second, the handwritten note by the METROBANK officer acknowledging receipt of t
he checks amounting to P2.8 Million made no reference to the TONDAS' trust recei
pt obligations, and we cannot presume that it was anything more than an ordinary
bank deposit. The Court of Appeals citing the case of Tan Tiong Tick vs. Americ
an Apothecories[15] implied that in making the deposit, the TONDAS are entitled
to set off, by way of compensation, their obligations to METROBANK. However, Ar
ticle 1288 of the Civil Code provides that "compensation shall not be proper whe
n one of the debts consists in civil liability arising from a penal offense" as
in the case at bar. The raison d'etre for this is that, "if one of the debts co
nsists in civil liability arising from a penal offense, compensation would be im
proper and inadvisable because the satisfaction of such obligation is imperative
."[16]
Third, reliance on the negotiations for the settlement of the trust receipts obl
igations between the TONDAS and METROBANK is simply misplaced. The negotiations
pertain and affect only the civil aspect of the case but does not preclude pros
ecution for the offense already committed. It has been held that "[a]ny comprom

ise relating to the civil liability arising from an offense does not automatical
ly terminate the criminal proceeding against or extinguish the criminal liabilit
y of the malefactor."[17] All told, the P2.8 Million deposit could not be consid
ered as having settled the trust receipts obligations of the TONDAS to the end o
f extinguishing any incipient criminal culpability arising therefrom.
Hence, it has been held in Office of the Court Administrator vs. Soriano[18] tha
t:
xxx it is too well-settled for any serious argument that whether in malversation
of public funds or estafa, payment, indemnification, or reimbursement of, or com
promise as to, the amounts or funds malversed or misappropriated, after the comm
ission of the crime, affects only the civil liability of the offender but does n
ot extinguish his criminal liability or relieve him from the penalty prescribed
by law for the offense committed, because both crimes are public offenses agains
t the people that must be prosecuted and penalized by the Government on its own
motion, though complete reparation should have been made of the damage suffered
by the offended parties. xxx."
As to the statement of the Court of Appeals that there is no evidence that METRO
BANK has been damaged by the proposal and the deposit, it must be clarified that
the damage can be traced from the non-fulfillment of an entrustee's obligation
under the trust receipts. The nature of trust receipt agreements and the damage
caused to trade circles and the banking community in case of violation thereof
was explained in Vintola vs. IBAA[19] and echoed in People vs. Nitafan[20], as f
ollows:
"[t]rust receipt arrangements do not involve a simple loan transaction between a
creditor and a debtor-importer. Apart from a loan feature, the trust receipt a
rrangement has a security feature that is covered by the trust receipt itself.
The second feature is what provides the much needed financial assistance to trad
ers in the importation or purchase of goods or merchandise through the use of th
ose goods or merchandise as collateral for the advancements made by the bank. T
he title of the bank to the security is the one sought to be protected and not t
he loan which is a separate and distinct agreement."
xxx xxx

xxx.

"Trust receipts are indispensable contracts in international and domestic busine

ss transactions. The prevalent use of trust receipts, the danger of their misus
e and/or misappropriation of the goods or proceeds realized from the sale of goo
ds, documents or instruments held in trust for entruster-banks, and the need for
regulation of trust receipt transactions to safeguard the rights and enforce th
e obligations of the parties involved are the main thrusts of P.D. 115. As corr
ectly observed by the Solicitor General, P.D. 115, like Bata Pambansa Blg. 22, p
unishes the act "not as an offense against property, but as an offense against p
ublic order. x x x The misuse of trust receipts therefore should be deterred to
prevent any possible havoc in trade circles and the banking community. (citing
Lozano vs. Martinez, 146 SCRA 323 [1986]; Rollo, p. 57) It is in the context of
upholding public interest that the law now specifically designates a breach of a
trust receipt agreement to be an act that "shall" make one liable foe estafa."
The finding that there was no fraud and deceit is likewise misplaced Considering
that the offense is punished as a malum prohibitum regardless of the existence
of intent or malice. 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.[21]
Finally, it is worthy of mention that a preliminary investigation proper - wheth
er or not there is reasonable ground to believe that the accused is guilty of th

e offense and therefore, whether or not he should be subjected to the expense, r

igors and embarrassment of trial - is the function of the prosecutor.[22] Prelim
inary investigation is an executive, not a judicial function.[23] Such investiga
tion is not part of the trial, hence, 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 guil
ty thereof.[24]
Section 4, Rule 112 of the Rules of Court recognizes the authority of the Secret
ary of Justice to reverse the resolution of the provincial or city prosecutor or
chief state prosecutor upon petition by a proper party.[25] Judicial review of
the resolution of the Secretary of Justice is limited to a determination of whet
her there has been a grave abuse of discretion amounting to lack or excess of ju
risdiction considering that the full discretionary authority has been delegated
to the executive branch in the determination of probable cause during a prelimin
ary investigation. Courts are not empowered to substitute their judgment for th
at of the executive branch; it may, however, look into the question of whether s
uch exercise has been made in grave abuse of discretion.[26]
Verily, there was no grave abuse of discretion on the part of the Secretary of J
ustice in directing the filing of the Information against the TONDAS, end the Co
urt of Appeals overstepped its boundaries in reversing the same without basis in
law and in evidence. We emphasize that for purposes of preliminary investigati
on, it is enough that there is evidence showing that a crime has been committed
and that the accused is probably guilty thereof.[27] By reason of the abbreviate
d nature of preliminary investigations, a dismissal of the charges as a result t
hereof is not equivalent to a judicial pronouncement of acquittal,[28] a convers
o, the finding of a prima facie case to hold the accused for trial is not equiva
lent to a finding of guilt.
WHEREFORE, the petition is hereby GRANTED. The assailed Decision is REVERSED an
d SET ASIDE.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.
[1] Rollo, pp. 9-18.
[2] Third Division, composed of J. Eubolo G. Verzola (member and ponente); and J
J. Jorge S. Imperial (chairman) and Artemio G. Tuquero (member), concuring.
[3] Rollo, pp. 68-71.
[4] Per Undersecretary Ramon S. Esguerra as acting Secretary of the Department o
f Justice.
[5] Per Acting Secretary Demetrio G. Demetria; rollo, pp. 66-67.
[6] Per Secretary Teofisto T. Guingona, Jr.; rollo, p. 65.
[7] Rollo, CA-G.R. SP No. 38113, pp. 2-21.
[8] Rollo, pp. 13-17.
[9] Rollo, pp. 267-268.
[10] Columbia Pictures Entertainment, Inc. vs. Court of Appeals, 262 SCRA 219 (1
996).

[11] Congregation of the Religious of the Virgin Mary vs. Court of Appeals, 291
SCRA 385 (1998).
[12] Flor C. Naanep.
[13] Annex D; OR, p. 141.
[14] First Philippine International Bank vs. Court of Appeals, 252 SCRA 259 (199
6); Limketkai Sons Milling, Inc. vs. Court of Appeals 255 SCRA 626 (1996).
[15] Supra.
[16] Arturo M. Tolentino, Civil Code of the Philippines (Quezon City: Central L
awbook Publishing Co., Inc., 1997).
[17] Chavez vs. Presidential Commission on Good Government, 299 SCRA 744 (1998).
[18] 136 SCRA 461 (1985).
[19] 150 SCRA 578 (1987).
[20] 207 SCRA 726 (1992).
[21] Ibid.
[22] Ho vs. People, 280 SCRA 365 (1997).
[23] People vs. Navarro, 270 SCRA 393 (1997).
[24] Ledesma vs. Court of Appeals, 278 SCRA 656 (1997).
[25] Roberts, Jr. vs. Court of Appeals, 254 SCRA 307 (1996).
[26] Ibid.
[27] Flores vs. Sumaljag, 290 SCRA 568 (1998).
[28] Ledesma case, supra.

SECOND DIVISION
PEOPLE OF THE PHILIPPINES,
Petitioner,

- versus -

G.R. No. 171188

Present:

QUISUMBING, J., Chairperson,

YNARES-SANTIAGO,*
CHICO-NAZARIO,**
LEONARDO-DE CASTRO,*** and BRION, JJ.
JESSIE
B.
CASTILLO
and FELICITO R. MEJIA,
Respondents.
Promulgated:
June 19, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
This petition seeks a review of the Resolution[1] dated October 10, 2005 of the
Sandiganbayan in Criminal Case No. 27789, dismissing the criminal complaint agai
nst the respondents, and its Resolution[2] dated January 18, 2006 denying petiti
oners motion for reconsideration.
The facts are as follows:
Complainant Cesar Sarino is one of the registered owners of a piece of land cove
red by Transfer Certificate of Title No. T-450278[3] of the Registry of Deeds of
Cavite, located in front of SM Bacoor, Cavite. The property is leased to Pepit
o B. Aquino and Adriano G. Samoy who are in turn subleasing it to several stallh
olders.
In September 1999, respondent Felicito R. Mejia, Municipal Building Official of
Bacoor, sent to the stallholders Notices of Violation[4] of the National Buildi
ng Code on the grounds that the structures they were occupying were erected with
out building permits and occupied by them without the necessary certificates of
occupancy having been first secured.
On January 17, 2000, Mejias office sent letters[5] dated January 10, 2000 to the
stallholders informing them that because of their repeated failure to comply wit
h the National Building Code and its implementing rules and regulations and the
Business Permit and Licensing Office Requirements, their stalls will be closed d
own on January 24, 2000.
On February 16, 2000, a task force from the Bacoor Municipal Hall effected the c
losure of the stalls through the installation of galvanized iron fences.
Lessees Aquino and Samoy thereafter filed before the Office of the Ombudsman a c
omplaint against respondent Jessie B. Castillo, in his capacity as Bacoor Munici
pal Mayor, respondent Mejia and two other municipal officials for violation of S
ection 3(e) and (f) of Republic Act No. 3019, otherwise known as the Anti-Graft
and Corrupt Practices Act, as amended.[6] The case was docketed as OMB-1-00-053
7.
On October 20, 2000, the Office of the Ombudsman dismissed OMB-1-00-0537, ruling
that the respondent local officials acted in good faith in effecting the closur
e of the stalls.[7]
On September 6, 2001, Sarino filed a Complaint[8] against respondents Castillo a
nd Mejia before the Office of the Ombudsman charging them criminally for violati
on of Section 3(e) and (f) of Rep. Act No. 3019 and Rep. Act No. 6713,[9] and ad
ministratively for oppression, grave misconduct and for committing acts contrary
to law. According to Sarino, the construction of the galvanized fence in Febru
ary 2000 is tantamount to an unlawful taking of their property causing them undu
e injury and that despite his verbal and written demands, respondents refused to
remove said fence.
Respondents countered that Sarinos complaint was anchored on the same set of fact
s that had been the subject of OMB-1-00-0537 that was dismissed by the Ombudsman
.
On March 10, 2003, the Ombudsman dismissed the administrative complaint for bein
g moot and academic due to Castillos re-election as mayor in the May 2001 electio
ns and pursuant to Section 20 of Rep. Act No. 6770[10] because the act complaine
d of happened more than one year before the complaint was filed.[11]
On May 7, 2003, the Office of the Ombudsman, through the Office of the Special P

rosecutor, filed an Information[12] against respondents for violation of Section

3(e) of Rep. Act No. 3019 before the Sandiganbayan. The case was docketed as C
riminal Case No. 27789. The Information reads:
That in or about February 2000, and for sometime prior or subsequent
thereto, in Bacoor, Cavite, Philippines, and within the jurisdiction of this Ho
norable Court, the above-named accused, JESSIE B. CASTILLO, a high ranking publi
c officer, being the Municipal Mayor, and FELICITO R. MEJIA, the Municipal Build
ing Official, of Bacoor, Cavite, as such taking advantage of their positions and
committing the offense in relation to office, conspiring and confederating toge
ther, with evident bad faith and manifest partiality, or gross inexcusable negli
gence, did then and there willfully, unlawfully and criminally cause undue injur
y to one CESAR SARINO by blocking and fencing off the latters property by install
ing and erecting a galvanized iron sheet fence on the front portion of the said
property facing the SM Bacoor thereby depriving him of the full use and enjoymen
t of his property, and despite repeated demands from the said land owner, the ac
cused, without valid justification, refuse to remove the said fence to the damag
e and prejudice of said Cesar Sarino in the amount of Seven Hundred Ninety Thous
and and Nine Hundred Twenty Pesos (Php 790,920.00), more or less, representing l
ost income from the rentals of the stalls and parking fees derived therefrom.
CONTRARY TO LAW.[13]
In a Resolution[14] dated August 15, 2003, the Sandiganbayan declared that proba
ble cause exists against respondents for violation of Section 3(e). Accordingly
, it directed the issuance of the corresponding warrants of arrest and hold depa
rture orders against respondents.
On August 20, 2003, respondents voluntarily surrendered to the Sandiganbayan and
posted their respective bonds for their provisional liberty.[15] Respondents m
oved for the reinvestigation of the case which the Sandiganbayan gave due course
.
After the reinvestigation, the Office of the Special Prosecutor, upon approval o
f the Ombudsman, filed a Motion for Leave to Admit Attached Amended Information.
[16] The respondents then filed a Comment thereon with Motion for Judicial Dete
rmination of Probable Cause.[17]
In a Resolution[18] dated November 3, 2004, the Sandiganbayan admitted the Amend
ed Information which reads:
That in or about February 2000, and for sometime prior or subsequent t
hereto, in Bacoor, Cavite, Philippines, and within the jurisdiction of this Hono
rable Court, the above-named accused, JESSIE B. CASTILLO, a high ranking public
officer, being the Municipal Mayor, and FELICITO R. MEJIA, the Municipal Buildin
g Official, of Bacoor, Cavite, as such taking advantage of their positions and c
ommitting the offense in relation to office, conspiring and confederating togeth
er, with evident bad faith and manifest partiality, or gross inexcusable neglige
nce, did then and there wilfully, unlawfully and criminally cause undue injury t
o CESAR N. SARINO, EVELYN S. MANIQUIS, FLORA JANET S. GARCIA, CLAUDETTE N. SARIN
O, STEPHEN N. SARINO and PRISCILLA N. SARINO, by blocking and fencing off their
property described in Transfer Certificate of Title No. T-450278, which was then
being leased by PEPITO B. AQUINO and ADRIANO G. SAMOY for TWELVE THOUSAND PESO
S (P12,000.00) a month, by installing and erecting a galvanized iron fence on th
e front portion of the said property facing the SM Bacoor, thereby depriving the
m of the full use and enjoyment of their property and effectively decreasing its
value for commercial purposes, and despite lawful demand from CESAR N. SARINO,
the accused, without valid justification, refuse to remove the said fence to the
undue damage and prejudice of said landowners in the amount of SEVEN HUNDRED NI
NETY THOUSAND and NINE HUNDRED TWENTY PESOS (Php 790,920.00), more or less, repr
esenting (1) lost rentals of said property, (2) unpaid compensation for the port
ion of the property on which the fence was installed, and (3) the decrease in va
lue of the property for commercial purposes.
CONTRARY TO LAW.[19]
In a Resolution[20] dated May 9, 2005, the Sandiganbayan denied the respondents M
otion for Judicial Determination of Probable Cause.
On October 10, 2005, the Sandiganbayan, upon motion for reconsideration filed by

respondents, reversed its May 9, 2005 Resolution and dismissed the case. The S
andiganbayan likewise set aside the arrest warrants it previously issued. It he
ld that the instant criminal case is a mere rehash of the previously dismissed c
riminal case filed by complainants lessees against respondents. It also ruled th
at there was no evident bad faith, manifest partiality or inexcusable negligence
that can be attributed to respondents. Neither did complainants claim of undue
injury have any leg to stand on.
The Office of the Special Prosecutor filed a motion for reconsideration, but it
was denied on January 18, 2006. Hence this petition, with the following issues:
I.
[WHETHER OR NOT] THE HONORABLE SANDIGANBAYAN GRAVELY ERRED AND DECIDED A QUESTIO
N OF SUBSTANCE IN A MANNER NOT IN ACCORD WITH LAW AND JURISPRUDENCE IN CONDUCTI
NG A SECOND JUDICIAL DETERMINATION OF PROBABLE CAUSE IN CRIMINAL CASE NO. 27789,
LONG AFTER IT ISSUED THE WARRANTS OF ARREST AGAINST THE RESPONDENTS.
II.
[WHETHER OR NOT] THE HONORABLE SANDIGANBAYAN GRAVELY ERRED AND DECIDED A QUESTIO
N OF SUBSTANCE IN A MANNER NOT IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT CONS
IDERED EVIDENTIARY MATTERS SUPPORTING RESPONDENTS DEFENSE WHEN IT CONDUCTED THE S
ECOND JUDICIAL DETERMINATION OF PROBABLE CAUSE.
III.
[WHETHER OR NOT] THE HONORABLE SANDIGANBAYAN GRAVELY ERRED AND DECIDED A QUESTIO
N OF SUBSTANCE IN A MANNER NOT IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT RULE
D THAT THE RESPONDENTS ACTED IN GOOD FAITH WHEN IN TRUTH RESPONDENTS HAD NO LEGA
L BASIS IN FENCING OFF THE PRIVATE PROPERTY OF THE COMPLAINANT AND HIS SIBLINGS.
IV.
[WHETHER OR NOT] THE HONORABLE SANDIGANBAYAN GRAVELY ERRED AND DECIDED A QUESTIO
N OF SUBSTANCE IN A MANNER NOT IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT IGNO
RED AND DID NOT DISCUSS IN ITS RESOLUTIONS OF OCTOBER 10, 2005 AND JANUARY 18, 2
006 THE ISSUE RAISED BY THE PROSECUTION THAT COMPLAINANT AND HIS SIBLINGS SUFFER
ED UNDUE INJURY BECAUSE, AMONG OTHERS, A PORTION OF THEIR PROPERTY WAS EFFECTIVE
LY TAKEN BY THE RESPONDENTS WITHOUT JUST COMPENSATION AND THE VALUE OF THE SUBJE
CT PROPERTY FOR PURPOSES OF COMMERCE WAS GREATLY REDUCED IN VIEW OF THE HIGH GAL
VANIZED IRON FENCE THAT COVERED AND HID THE PROPERTY FROM THE HIGHWAY AND THE PU
BLIC.[21]
The foregoing issues simply boil down to whether the Sandiganbayan e
rred in overturning the Ombudsmans determination of probable cause resulting in t
he dismissal of the case against respondents.
Petitioner contends that after the Sandiganbayan issued the arrest war
rants against respondents, the responsibility of making a new determination of p
robable cause shifted back to the Ombudsman as prosecutor when respondents moved
for the reinvestigation of the case and such motion was granted by the court.
The Ombudsman must then decide whether respondents shall continue to be held for
trial in light of any additional evidence presented during reinvestigation. Th
is responsibility, petitioner submits, belongs to the Ombudsman alone and the co
urt is bereft of authority to overturn the formers findings as the judicial dete
rmination of probable cause is only for the purpose of determining whether the a
rrest warrant should be issued. Petitioner further argues that there are only t
wo instances when the court can intervene in the Ombudsmans action first, when th
e Ombudsman acted with grave abuse of discretion; and second, when the prosecuti
on makes substantial amendments to the information both of which are wanting in
the instant case.
Respondents counter that the amendments made to the information are su
bstantial in nature and not merely formal as they pertain to the inclusion of ad
ditional injured parties and specification of the amount of damages. And even a
ssuming the amendments were merely formal, the Sandiganbayan was correct in exer
cising its judicial prerogative when it determined for itself the existence of p
robable cause considering the inconsistency of the positions taken by the Ombuds
man in OMB-1-00-0537 and the instant case.
After seriously considering the submission of the parties, we are in a
greement that the petition is meritorious.

There are two kinds of determination of probable cause: executive and

judicial. The executive determination of probable cause is one made during pre
liminary investigation. It is a function that properly pertains to the public p
rosecutor who is given a broad discretion to determine whether probable cause ex
ists and to charge those whom he believes to have committed the crime as defined
by law and thus should be held for trial. Otherwise stated, such official has
the quasi-judicial authority to determine whether or not a criminal case must be
filed in court.[22] Whether or not that function has been correctly discharged
by the public prosecutor, i.e., whether or not he has made a correct ascertainm
ent of the existence of probable cause in a case, is a matter that the trial cou
rt itself does not and may not be compelled to pass upon.[23]
The judicial determination of probable cause, on the other hand, is on
e made by the judge to ascertain whether a warrant of arrest should be issued ag
ainst the accused. The judge must satisfy himself that based on the evidence su
bmitted, there is necessity for placing the accused under custody in order not t
o frustrate the ends of justice.[24] If the judge finds no probable cause, the
judge cannot be forced to issue the arrest warrant.[25]
Corollary to the principle that a judge cannot be compelled to issue a
warrant of arrest if he or she deems that there is no probable cause for doing
so, the judge in turn should not override the public prosecutors determination of
probable cause to hold an accused for trial on the ground that the evidence pre
sented to substantiate the issuance of an arrest warrant was insufficient. It m
ust be stressed that in our criminal justice system, the public prosecutor exerc
ises a wide latitude of discretion in determining whether a criminal case should
be filed in court, and that courts must respect the exercise of such discretion
when the information filed against the person charged is valid on its face, and
that no manifest error or grave abuse of discretion can be imputed to the publi
c prosecutor.[26]
Thus, absent a finding that an information is invalid on its face or that the pr
osecutor committed manifest error or grave abuse of discretion, a judges determin
ation of probable cause is limited only to the judicial kind or for the purpose
of deciding whether the arrest warrants should be issued against the accused.
In the instant case, there is no question that both the original[27] and amended
[28] Informations were valid on their face because they complied with Section 6,
[29] Rule 110 of the Rules of Court. Also, a scrutiny of the Resolution[30] dat
ed August 22, 2002 of the Ombudsman which precipitated the filing of the origina
l Information and the subsequent Memorandum dated August 4, 2004 recommending th
e amendment of the Information would likewise show that the finding of probable
cause against the respondents were sufficiently supported by substantial evidenc
e. As a matter of fact, in the Resolution dated August 22, 2002, the Ombudsman
took pains to mention each element of the crime of violation of Section 3(e) of
Rep. Act No. 3019 and then one by one adequately explained how and why those ele
ments were satisfied. Hence, as the amended Information was valid on its face a
nd there is no manifest error or arbitrariness on the part of the Ombudsman, the
Sandiganbayan erred in making an executive determination of probable cause when
it overturned the Ombudsmans own determination. And this is true even if the Sa
ndiganbayan was no longer satisfied with the evidence presented to sustain the e
ffectivity of the arrest warrants previously issued for the original Information
. The Sandiganbayan could have just revoked the previously issued arrest warran
ts and required the Ombudsman to submit additional evidence for the purpose of i
ssuing the arrest warrants based on the amended Information.
Moreover, it was clearly premature on the part of the Sandiganbayan to make a de
terminative finding prior to the parties presentation of their respective evidenc
e that there was no bad faith and manifest partiality on the respondents part and
undue injury on the part of the complainant. In Go v. Fifth Division, Sandigan
bayan,[31] we held that it is well established that the presence or absence of th
e elements of the crime is evidentiary in nature and is a matter of defense that
may be best passed upon after a full-blown trial on the merits.[32] Also, it wo
uld be unfair to expect the prosecution to present all the evidence needed to se
cure the conviction of the accused upon the filing of the information against th

e latter. The reason is found in the nature and objective of a preliminary inve
stigation. Here, the public prosecutors do not decide whether there is evidence
beyond reasonable doubt of the guilt of the person charged; they merely determi
ne whether there is sufficient ground to engender a well-founded belief that a c
rime has been committed and that respondent is probably guilty thereof, and shou
ld be held for trial.[33]
The Sandiganbayan and all courts for that matter should always remembe
r the judiciarys standing policy on non-interference in the Office of the Ombudsm
ans exercise of its constitutionally mandated powers. This policy is based not o
nly upon respect for the investigatory and prosecutory powers granted by the Con
stitution to the Office of the Ombudsman but upon practicality as well, consider
ing that otherwise, the functions of the courts will be grievously hampered by i
nnumerable petitions regarding complaints filed before it, and in much the same
way that the courts would be extremely swamped if they were to be compelled to r
eview the exercise of discretion on the part of the prosecutors each time they d
ecide to file an information in court or dismiss a complaint by a private compla
inant.[34]
WHEREFORE, the petition is GRANTED. The Sandiganbayans challenged Reso
lutions dated October 10, 2005 and January 18, 2006 are REVERSED and SET ASIDE.
The Information against the respondents is hereby REINSTATED. Let the records
of this case be REMANDED to the Sandiganbayan for further proceedings.
SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson
WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
ARTURO D. BRION
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision had been reached i
n consultation before the case was assigned to the writer of the opinion of the
Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Divi

sion Chairpersons Attestation, I certify that the conclusions in the above Decisi
on had been reached in consultation before the case was assigned to the writer o
f the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
*
Designated member of the Second Division per Special Order No. 645 in pl
ace of Associate Justice Conchita Carpio Morales who is on official leave.
**
Designated member of the Second Division per Special Order No. 658.
***
Designated member of the Second Division per Special Order No. 635 in vie
w of the retirement of Associate Dante O. Tinga.
[1]
Rollo, pp. 14-22.
[2]
Id. at 30-32.
[3]
Id. at 160.
[4]
Records, Vol. II, pp. 72-93, 95-127.
[5]
Id. at 70-71.
[6]
Section 3. Corrupt practices of public officers.In addition to acts or
omissions of public officers already penalized by existing law, the following sh
all constitute corrupt practices of any public officer and are hereby declared t
o be unlawful:
x x x x
(e) Causing any undue injury to any party, including the Governm
ent, or giving any private party any unwarranted benefits, advantage or preferen
ce in the discharge of his official administrative or judicial functions through
manifest partiality, evident bad faith or gross inexcusable negligence. This pr
ovision shall apply to officers and employees of offices or government corporati
ons charged with the grant of licenses or permits or other concessions.
(f) Neglecting or refusing, after due demand or request, without
sufficient justification, to act within a reasonable time on any matter pending
before him for the purpose of obtaining, directly or indirectly, from any perso
n interested in the matter some pecuniary or material benefit or advantage, or f
or the purpose of favoring his own interest or giving undue advantage in favor o
f or discriminating against any other interested party.
x x x x
[7]
Records, Vol. I, pp. 118-122.
[8]
Id. at 11-16.
[9]
AN ACT ESTABLISHING A CODE OF CONDUCT AND ETHICAL STANDARDS FOR PUBLIC
OFFICIALS AND EMPLOYEES, TO UPHOLD THE TIME-HONORED PRINCIPLE OF PUBLIC OFFICE
BEING A PUBLIC TRUST, GRANTING INCENTIVES AND REWARDS FOR EXEMPLARY SERVICE, ENU
MERATING PROHIBITED ACTS AND TRANSACTIONS AND PROVIDING PENALTIES FOR VIOLATIONS
THEREOF AND FOR OTHER PURPOSES, approved on February 20, 1989.
[10]
AN ACT PROVIDING FOR THE FUNCTIONAL AND STRUCTURAL ORGANIZATION OF THE
OFFICE OF THE OMBUDSMAN AND FOR OTHER PURPOSES.
x x x x
SEC. 20. Exceptions.The Office of the Ombudsman may not conduct t
he necessary investigation of any administrative act or omission complained of i
f it believes that:
(1) The complainant has an adequate remedy in another judicial or quasi-judicial
body;
(2) The complaint pertains to a matter outside the jurisdiction of the Office of
the Ombudsman;
(3) The complaint is trivial, frivolous, vexatious or made in bad faith;
(4) The complainant has no sufficient personal interest in the subject matter of
the grievance; or

(5) The complaint was filed after one year from the occurrence of the act or omi
ssion complained of.
[11]
Records, Vol. I, pp. 114-117.
[12]
Id. at 1-3.
[13]
Id. at 1-2.
[14]
Id. at 76-77.
[15]
Id. at 83-90.
[16]
Rollo, pp. 278-283.
[17]
Records, Vol. I, pp. 345-373.
[18]
Id. at 442-443.
[19]
Rollo, pp. 303-305.
[20]
Records, Vol. II, pp. 11-19.
[21]
Rollo, pp. 67-69.
[22]
Paderanga v. Drilon, G.R. No. 96080, April 19, 1991, 196 SCRA 86, 90.
[23]
Roberts, Jr. v. Court of Appeals, G.R. No. 113930, March 5, 1996, 254 S
CRA 307, 350.
[24]
Ho v. People, G.R. Nos. 106632 & 106678, October 9, 1997, 280 SCRA 365,
380.
[25]
People v. Court of Appeals, G.R. No. 126005, January 21, 1999, 301 SCRA
475, 488.
[26]
Schroeder v. Saldevar, G.R. No. 163656, April 27, 2007, 522 SCRA 624, 6
28-629.
[27]
Rollo, pp. 207-209.
[28]
Id. at 303-305.
[29]
SEC. 6. Sufficiency of complaint or information.A complaint or informat
ion is sufficient if it states the name of the accused; the designation of the o
ffense by the statute; the acts or omissions complained of as constituting the o
ffense; the name of the offended party; the approximate date of the commission o
f the offense, and the place wherein the offense was committed.
When an offense is committed by more than one person, all of them shall be inclu
ded in the complaint or information.
[30]
Rollo, pp. 199-205.
[31]
G.R. No. 172602, April 13, 2007, 521 SCRA 270.
[32]
Id. at 289. See also Andres v. Cuevas, G.R. No. 150869, June 9, 2005,
460 SCRA 38, 52.
[33]
People v. Court of Appeals, supra note 25.
[34]
Go v. Fifth Division, Sandiganbayan, supra note 31, at 293; Andres v. C
uevas, supra note 32.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 170288

September 22, 2006

PEDRO E. BUDIONGAN, JR., Municipal Mayor; JOSIL E. TRABAJO, Municipal Vice Mayor
and Presiding Officer of the Sangguniang Bayan; FULGENCIO V. PAA, Municipal Trea
surer; TACIANA B. ESPEJO, Municipal Budget Officer; and SB Members: RUFINO G. AD
LAON, TITO R. MONTAJES, MARIO M. SORIA, ALFONSO L. UNAJAN, CARLITO B. TORREFRANC
A, VICENTE A. TORREFRANCA, JR., etitioners,
vs.
HON. JACINTO M. DELA CRUZ, JR., Asst. Special Prosecutor I; HON. CORNELIO L. SON
IDO, Acting Director, Prosecution Bureau IV; HON. ROBERT E. KALLOS, Deputy Speci
al Prosecutor; HON. DENNIS M. VILLA IGNACIO, The Special Prosecutor; HON. WENDEL

L E. BARRERAS-SULIT, Acting Director, Case Assessment, Review and Re-investigati

on Bureau; and OFFICE OF THE SPECIAL PROSECUTOR, public respondents.
VALERIANO U. NADALA, ARLENE PAINAGAN-PALGAN, private respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
This Petition for Certiorari under Rule 65 of the Rules of Court assails the Mem
orandum1 dated April 28, 2004 of the Office of the Special Prosecutor, Office of
the Ombudsman, recommending that petitioners be charged with violation of Secti
on 3(e) of Republic Act (R.A.) No. 3019 and petitioner Pedro E. Budiongan with v
iolation of Section 3(h) of R.A. No. 3019. Also assailed is the Resolution2 date
d October 19, 2005 denying petitioners motion for reconsideration.
The antecedent facts are as follows:
By virtue of Municipal Ordinance No. 2, series of 2001, the Municipality of Carm
en, Bohol appropriated the amount of P450,000.00 for the purchase of a road roll
er for the municipality. However, on November 16, 2001, the Municipal Developmen
t Council through Resolution No. 3 recommended that the amount of P450,000.00 be
realigned and used for the asphalt laying of a portion of the Tan Modesto Berna
ldez Street.3 The proposed realignment was included in the December 21, 2001 age
nda of the Sangguniang Bayan of Carmen but discussion thereon was deferred.
On February 6, 2002, petitioner Municipal Treasurer, Fulgencio V. Paa, issued a C
ertificate of Availability of Funds for the project. Thereafter, the Office of t
he Municipal Engineer prepared a Program of Works and Cost Estimates duly noted/
approved by Municipal Budget Officer Taciana B. Espejo and Mayor Budiongan.
Bidding was conducted on March 5, 2002. The next day, March 6, 2002, Mayor Budio
ngan issued the Notice of Award and Notice to Commence Work in favor of Herbert
Malmis General Merchandise and Contractor, Inc. who emerged as the lowest comply
ing bidder. On March 22, 2002, the Sangguniang Bayan passed Resolution No. 60,4
series of 2002, authorizing Mayor Budiongan to sign and enter into contract with
Malmis relative to the above project in the amount of P339,808.00. With such au
thority, Malmis commenced with the project.
Thereafter, it was discovered that there was yet no ordinance approving the real
ignment of the funds. Thus, on May 17, 2002, the Sangguniang Bayan passed Ordina
nce No. 8,5 series of 2002, approving the realignment of the fund. On June 14, 2
002, Malmis was paid the contract price.
On July 3, 2002, private respondents Arlene P. Palgan and Valeriano U. Nadala fi
led a complaint6 against the petitioners before the Office of the Deputy Ombudsm
an for Visayas alleging illegality in the conduct of the bidding, award and noti
ce to commence work since there was no fund appropriated for the purpose.
On July 31, 2003, the
cause and recommended
of the Revised Penal
st Hermosila Logrono,
lack of merit.8

Office of the Deputy Ombudsman for Visayas found probable

the filing of an information for violation of Article 2207
Code against the petitioners. However, the complaint again
Desiderio Gudia, Jr. and Herbert Malmis was dismissed for

Upon review, the Case Assessment, Review and Reinvestigation Bureau of the Offic
e of the Special Prosecutor, issued the assailed Memorandum dated April 28, 2004
, modifying the charge from violation of Article 220 of the Revised Penal Code t
o (1) violation of Section 3(e) of R.A. No. 3019 against petitioners for alleged
ly giving unwarranted benefit to Malmis and (2) violation of Section 3(h) of R.A
. No. 3019 against petitioner Budiongan for allegedly "directly or indirectly ha

ving financial or pecuniary interest in a contract or transaction in connection

with which he intervenes or takes part in his official capacity."
Thus, two separate Informations were filed before the Sandiganbayan (1) for viol
ation of Section 3(e) of R.A. No. 3019 against the petitioners docketed as Crimi
nal Case No. 28075 and (2) for violation of Section 3(h) of R.A. No. 3019 agains
t petitioner Budiongan docketed as Criminal Case No. 28076.
Thereafter, petitioners filed a Motion to Quash9 the information charging them w
ith violation of Sec. 3(e) of R.A. No. 3019. In a Resolution10 dated June 10, 20
05, the Sandiganbayan granted the motion to quash and remanded Criminal Case No.
28075 to the Office of the Ombudsman for amendment of the Information. It held
that although Malmis benefited from the contract, the same is not unwarranted co
nsidering that the project was implemented, executed and completed.
On June 27, 2005, an Amended Information11 was filed charging petitioners with v
iolation of Sec. 3(e) of R.A. No. 3019, alleging that petitioners, by prematurel
y awarding to Malmis the project despite the absence of funds specifically appro
priated for such purpose, and thereafter paying the contract price from the Muni
cipal Treasury which was originally appropriated for the purchase of a road roll
er, caused damage and undue injury to the government.
Finding that the Amended Information contains all the material averments necessa
ry to make out a case for the first mode of violating Section 3(e) of R.A. No. 3
019, i.e., causing any undue injury to any party, including the government, the
Sandiganbayan admitted the Amended Information in its Resolution dated August 18
, 2005.12
On even date, petitioners filed with the Sandiganbayan a Motion for Leave of Cou
rt to File Motion for Reinvestigation13 arguing that the above Informations were
filed without affording them the opportunity to file counter-affidavits to answ
er/rebut the modified charges. On September 20, 2005, the Sandiganbayan issued a
Resolution14 denying the motion insofar as Criminal Case No. 28076 is concerned
. It held that it is too late in the day to remand the case for reinvestigation
considering that Budiongan had already been arraigned and the case had long been
set for pre-trial proceedings, with both parties having filed their respective
briefs. As regards Criminal Case No. 28075, the Sandiganbayan noted that althoug
h the conduct of the preliminary investigation was regular, petitioners however
were not given the opportunity to seek reconsideration of the modified charges.
Thus, it granted leave to the petitioners to file with the Office of the Special
Prosecutor a motion for reconsideration (not a motion for reinvestigation) of t
he said offices Memorandum dated April 28, 2004.
Petitioners filed a Motion for Reconsideration with the Office of the Special Pr
osecutor which was denied for lack of merit in the Resolution dated October 19,
2005.
Hence, this petition raising the following issues:
I. WHETHER PUBLIC RESPONDENTS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR IN EXCESS OF JURISDICTION IN REJECTING THE FINDINGS AND AMENDING/MODIFYI
NG THE RESOLUTION OF THE GRAFT INVESTIGATING OFFICER, OMBUDSMAN VISAYAS, AND IN
FILING THE INFORMATION FOR VIOLATION OF SEC. 3(e) OF RA 3019 WITHOUT AFFORDING P
ETITIONERS THE OPPORTUNITY TO PRESENT THEIR COUNTER EVIDENCE IN A RE-INVESTIGATI
ON;
II. WHETHER THE REFUSAL OR FAILURE TO CONDUCT A RE-INVESTIGATION HAS VIOLATED PE
TITIONERS RIGHT TO DUE PROCESS;
III. WHETHER PUBLIC RESPONDENTS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING T

O LACK OR IN EXCESS OF JURISDICTION IN ISSUING RESOLUTIONS DATED APRIL 28, 2004

AND OCTOBER 19, 2005 FINDING PROBABLE CAUSE FOR VIOLATION OF SEC. 3(e) OF RA 301
9 AGAINST HEREIN PETITIONERS; and
IV. WHETHER PUBLIC RESPONDENTS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR IN EXCESS OF JURISDICTION IN FILING THE INFORMATION FOR VIOLATION OF SE
C.3(e) OF RA 3019 AGAINST PETITIONERS IN THE SANDIGANBAYAN DOCKETED AS CRIMINAL
CASE NO. 28075.
Petitioners maintain that the modification of the charge from violation of Artic
le 220 of the Revised Penal Code to violation of Sections 3(e) and 3(h) of R.A.
No. 3019 denied their rights to due process since they were not given the opport
unity to answer and present evidence on the new charge in a preliminary investig
ation. Furthermore, the petitioners argue that public respondents committed grav
e abuse of discretion amounting to lack or excess of jurisdiction in issuing the
challenged resolutions finding probable cause for violation of R.A. No. 3019.
The petition lacks merit.
The right to a preliminary investigation is not a constitutional right, but is m
erely a right conferred by statute. The absence of a preliminary investigation d
oes not impair the validity of the Information or otherwise render the same defe
ctive. It does not affect the jurisdiction of the court over the case or constit
ute a ground for quashing the Information.15 If absence of a preliminary investi
gation does not render the Information invalid nor affect the jurisdiction of th
e court over the case, then the denial of a motion for reinvestigation cannot li
kewise invalidate the Information or oust the court of its jurisdiction over the
case.
Petitioners were not deprived of due process because they were afforded the oppo
rtunity to refute the charges by filing their counter-affidavits. The modificati
on of the offense charged did not come as a surprise to the petitioners because
it was based on the same set of facts and the same alleged illegal acts. Moreove
r, petitioners failed to aver newly discovered evidence nor impute commission of
grave errors or serious irregularities prejudicial to their interest to warrant
a reconsideration or reinvestigation of the case as required under Section 8, R
ule III of the Rules of Procedure of the Office of the Ombudsman.16 Thus, the mo
dification of the offense charged, even without affording the petitioners a new
preliminary investigation, did not amount to a violation of their rights.
Furthermore, the right to preliminary investigation is deemed waived
cused fails to invoke it before or at the time of entering a plea at
.17 Petitioner Budiongan was arraigned in Criminal Case No. 28076 on
005. He was also arraigned together with the rest of the petitioners
mended Information in Criminal Case No. 28075 on December 2, 2005.

when the ac
arraignment
March 28, 2
under the A

The purpose of a preliminary investigation is merely to determine whether a crim

e has been committed and whether there is probable cause to believe that the per
son accused of the crime is probably guilty thereof and should be held for trial
.18 A finding of probable cause needs only to rest on evidence showing that more
likely than not a crime has been committed and was committed by the suspect. Pr
obable cause need not be based on clear and convincing evidence of guilt, neithe
r on evidence establishing guilt beyond reasonable doubt and definitely, not on
evidence establishing absolute certainty of guilt." 19
The Office of the Special Prosecutor is an integral component of the Ombudsman a
nd is under the latters supervision and control. Thus, whatever course of actio
n that the Ombudsman may take, whether to approve or to disapprove the recommend
ation of the investigating prosecutor, is but an exercise of his discretionary p
owers based upon constitutional mandate. Generally, courts should not interfere

in such exercise. It is beyond the ambit of this Court to review the exercise of
discretion of the Ombudsman in prosecuting or dismissing a complaint filed befo
re it, save in cases where there is clear showing of grave abuse of discretion a
mounting to lack or excess of jurisdiction on the part of the Ombudsman.20 Absen
t any showing of arbitrariness on the part of the prosecutor or any other office
r authorized to conduct preliminary investigation, as in the instant case, court
s as a rule must defer to said officers finding and determination of probable c
ause, since the determination of the existence of probable cause is the function
of the prosecutor.21
In fine, certiorari will not lie to invalidate the Office of the Special Prosecu
tors resolution denying petitioners motion for reconsideration since there is
nothing to substantiate petitioners claim that it gravely abused its discretion
in ruling that there was no need to conduct a reinvestigation of the case.22
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED. The assa
iled Memorandum of the Office of the Special Prosecutor, Office of the Ombudsman
, dated April 28, 2004 finding probable cause that petitioners violated Sections
3(e) and 3(h) of Republic Act No. 3019 and the Resolution dated October 19, 200
5 denying petitioners Motion for Reconsideration, are hereby AFFIRMED.
SO ORDERED.
Panganiban, Austria-Martinez, Callejo, Sr., Chico-Nazario, , J.J., concur.
Footnotes
1 Rollo, pp. 30-47.
2 Id. at 48-55.
3 Id. at 60-61.
4 Id. at 70-71.
5 Id. at 72-73.
6 Id. at 76-78.
7 ART. 220. Illegal use of public funds or property. Any public officer who shal
l apply any public fund or property under his administration to any public use o
ther than that for which such fund or property were appropriated by law or ordin
ance shall suffer the penalty of prision correccional in its minimum period or a
fine ranging from one-half to the total value of the sum misapplied, if by reas
on of such misapplication, any damage or embarrassment shall have resulted to th
e public service. In either case, the offender shall also suffer the penalty of
temporary special disqualification.
If no damage or embarrassment to the public service has resulted, the penalty sh
all be a fine from 5 to 50 percent of the sum misapplied.
8 Rollo, pp. 79-90.
9 Id. at 226-251.
10 Id. at 123-134.
11 Id. at 135-138.

12 Id. at 139-159.
13 Id. at 95-101.
14 Id. at 57-59.
15 Serapio v. Sandiganbayan, 444 Phil. 499, 530-531 (2003).
16 Administrative Order No. 7 (1990).
17 People v. Buluran, 382 Phil 364, 373 (2000).
18 RULES OF COURT, Rule 112, Sec. 1.
19 Webb v. De Leon, 317 Phil. 758, 789 (1995).
20 Gallardo v. People, G.R. No. 142030, April 21, 2005, 456 SCRA 494, 504.
21 Serapio v. Sandiganbayan, supra note 15 at 531-532.
22 Id. at 532.