Cases in Remedial Law

8/10/2019 Cases in Remedial Law

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REMEDIAL LAW REVIEW

CASES IN CRIMINAL PROCEDURE

1.) G. R. No. 195002 January 25, 2012

HECTOR TREAS, Petitioner,

vs.PEOPLE OF THE PHILIPPINES, Respondent.

D E C I S I O N

SERENO, J.:

Where life or liberty is affected by its proceedings, courts must keep strictly within the limits of the lawauthorizing them to take jurisdiction and to try the case and render judgment thereon.1

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure, seeking toannul and set aside the Court of Appeals (CA) Decision dated 9 July 20102 and Resolution dated 4 January 2011.

Statement of the Facts and of the Case

The pertinent facts, as found by the CA, are as follows:

Sometime in December 1999, Margarita Alocilja (Margarita) wanted to buy a house-and-lot in Iloilo City coveredby TCT No. 109266. It was then mortgaged with Maybank. The bank manager Joselito Palma recommended theappellant Hector Treas (Hector) to private complainant Elizabeth, who was an employee and niece ofMargarita, for advice regarding the transfer of the title in the latters name. Hector informed Elizabeth that forthe titling of the property in the name of her aunt Margarita, the following expenses would be incurred:

P20,000.00- Attorney s fees,

P90,000.00- Capital Gains Tax,

P24,000.00- Documentary Stamp,

P10,000.00- Miscellaneous Expenses.

Thereafter, Elizabeth gave P150,000.00 to Hector who issued a corresponding receipt dated December 22, 1999and prepared [a] Deed of Sale with Assumption of Mortgage. Subsequently, Hector gave Elizabeth RevenueOfficial Receipt Nos. 00084370 for P96,000.00 and 00084369 for P24,000.00. However, when she consulted withthe BIR, she was informed that the receipts were fake. When confronted, Hector admitted to her that thereceipts were fake and that he used the P120,000.00 for his other transactions. Elizabeth demanded the returnof the money.

To settle his accounts, appellant Hector issued in favor of Elizabeth a Bank of Commerce check No. 0042856dated November 10, 2000 in the amount of P120,000.00, deducting from P150,000.00 the P30,000.00 asattorneys fees. When the check was deposited with the PCIBank, Makati Branch, the same was dishonored forthe reason that the account was closed. Notwithstanding repeated formal and verbal demands, appellant failedto pay. Thus, the instant case of Estafa was filed against him.3

On 29 October 2001, an Information was filed by the Office of the City Prosecutor before the Regional TrialCourt (RTC), both of Makati City. The Information reads as follows:

That on or about the 23rd day of December, 1999, in the City of Makati, Metro Manila, Philippines and withinthe jurisdiction of this Honorable Court, the above-named accused, received in trust from ELIZABETH LUCIAJAthe amount of P150,000.00 which money was given to her by her aunt Margarita Alocilja, with the expressobligation on the part of the accused to use the said amount for expenses and fees in connection with thepurchase of a parcel of land covered by TCT No. T-109266, but the said accused, once in possession of the saidamount, with the intent to gain and abuse of confidence, did then and there willfully, unlawfully and feloniouslymisappropriate, misapply and convert to his own personal use and benefit the amount of P130,000.00 lessattorneys fees and the said accused failed and refused and still fails and refuses to do so, to the damage andprejudice of complainant Elizabeth Luciaja and Margarita Alocilja in the aforementioned amount of P130,000.00.


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CONTRARY TO LAW.4

During arraignment on 26 April 2002, petitioner, acting as his own counsel, entered a plea of "Not Guilty."Allegedly due to old age and poor health, and the fact that he lives in Iloilo City, petitioner was unable to attendthe pre-trial and trial of the case.

On 8 January 2007, the RTC rendered a Decision5 finding petitioner guilty of the crime of Estafa under section 1,

paragraph (b), of Article 315 of the Revised Penal Code (RPC), with the dispositive portion as follows:

WHEREFORE, in view of the foregoing, judgment is rendered finding accused Hector Trenas guilty of the crime ofEstafa with abuse of confidence as penalized under Article 315 of the Revised Penal Code, and which offensewas committed in the manner described in the aforementioned information. As a consequence of this judgment,accused Hector Trenas is sentenced to suffer a penalty of Ten (10) Years and One (1) Day of Prision Mayor toSeventeen (17) Years and Four (4) Months of Reclusion Temporal. Moreover, he is ordered to indemnify privatecomplainant Elizabeth Luciaja the amount of P130,000.00 with interest at the legal rate of 12% per annum,reckoned from the date this case was filed until the amount is fully paid.

SO ORDERED.6

We note at this point that petitioner has been variably called Treas and Trenas in the pleadings and courtissuances, but for consistency, we use the name "Treas", under which he was accused in the Information.

On 24 August 2007, petitioner filed a Motion for Reconsideration,7 which was denied by the RTC in a Resolutiondated 2 July 2008.8

On 25 September 2008, petitioner filed a Notice of Appeal before the RTC.9 The appeal was docketed as CA-G.R.CR No. 32177. On 9 July 2010, the CA rendered a Decision10 affirming that of the RTC. On 4 August 2010,petitioner filed a Motion for Reconsideration, which was denied by the CA in a Resolution dated 4 January2011.11

On 25 January 2011, petitioner filed a Motion for Extension of Time to File Petition for Review on Certiorari12before this Court. He asked for a period of 15 days within which to file a petition for review, and the Courtgranted his motion in a Resolution dated 9 February 2011.

On 3 February 2011, petitioner filed his Petition for Review on Certiorari before this Court, with the followingassignment of errors:

1. THE COURT OF APPEALS ERRED IN RULING THAT AN ACCUSED HAS TO PRESENT EVIDENCE IN SUPPOTHE DEFENSE OF LACK OF JURISDICTION EVEN IF SUCH LACK OF JURISDICTION APPEARS IN THE EVIDTHE PROSECUTION;

2. THE COURT OF APPEALS ERRED IN RULING THAT DEMAND MADE BY A PERSON OTHER THAN THE AGGPARTY SATISFIES THE REQUIREMENT OF DEMAND TO CONSTITUTE THE OFFENSE OF ESTAFA;13

On the first issue, petitioner asserts that nowhere in the evidence presented by the prosecution does it showthat P 150,000 was given to and received by petitioner in Makati City. Instead, the evidence shows that theReceipt issued by petitioner for the money was dated 22 December 1999, without any indication of the placewhere it was issued. Meanwhile, the Deed of Sale with Assumption of Mortgage prepared by petitioner wassigned and notarized in Iloilo City, also on 22 December 1999. Petitioner claims that the only logical conclusion isthat the money was actually delivered to him in Iloilo City, especially since his residence and office were situatedthere as well. Absent any direct proof as to the place of delivery, one must rely on the disputable presumptionthat things happened according to the ordinary course of nature and the ordinary habits of life. The only timeMakati City was mentioned was with respect to the time when the check provided by petitioner was dishonoredby Equitable-PCI Bank in its De la Rosa-Rada Branch in Makati. Petitioner asserts that the prosecution witnessfailed to allege that any of the acts material to the crime of estafa had occurred in Makati City. Thus, the trialcourt failed to acquire jurisdiction over the case.

Petitioner thus argues that an accused is not required to present evidence to prove lack of jurisdiction, whensuch lack is already indicated in the prosecution evidence.

As to the second issue, petitioner claims that the amount of P150,000 actually belongs to Margarita. Assumingthere was misappropriation, it was actually she not Elizabeth who was t he offended party. Thus, the lattersdemand does not satisfy the requirement of prior demand by the offended party in the offense of estafa. Even


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assuming that the demand could have been properly made by Elizabeth, the demand referred to the amount ofP120,000, instead of P150,000. Finally, there is no showing that the demand was actually received by petitioner.The signature on the Registry Return Receipt was not proven to be that of petitioners.

On 30 May 2011, this Court issued a Resolution directing the Office of the Solicitor General (OSG) to file thelatters Comment on the Petition. On 27 July 2011, the OSG filed a Motion for Extension, praying for anadditional period of 60 days within which to submit its Comment. This motion was granted in a Resolution dated12 September 2011. On 23 September 2011, the OSG filed a Motion for Special Extension, requesting an

additional period of five days. On 29 September 2011, it filed its Comment on the Petition.

In its Comment, the OSG asserts that the RTC did not err in convicting petitioner as charged. The OSG notes thatpetitioner does not dispute the factual findings of the trial court with respect to the delivery of P150,000 to him,and that there was a relationship of trust and confidence between him and Elizabeth. With respect to his claimthat the Complaint should have been filed in Iloilo City, his claim was not supported by any piece of evidence, ashe did not present any. Further, petitioner is, in effect, asking the Court to weigh the credibility of theprosecution witness, Elizabeth. However, the trial courts assessment of the credibility of a witness is entitled togreat weight, unless tainted with arbitrariness or oversight of some fact or circumstance, which is not the casehere.

With respect to the second issue, the OSG stresses that the defense of "no valid demand" was not raised in thelower court. Nevertheless, the demand letter sent to Elizabeth suffices, as she is also one of the complainantsalleged in the Information, as an agent of Margarita. Moreover, no proof was adduced as to the genuineness ofpetitioners signature in the Registry Return Receipt of the demand letter.

The OSG, however, submits that the Court may recommend petitioner for executive clemency, in view of hisadvanced age and failing health.

The Courts Ruling

The Petition is impressed with merit.

Review of Factual Findings

While the Petition raises questions of law, the resolution of the Petition requires a review of the factual findingsof the lower courts and the evidence upon which they are based.

As a rule, only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court. Inmany instances, however, this Court has laid down exceptions to this general rule, as follows:

(1) When the factual findings of the Court of Appeals and the trial court are contradictory;

(2) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures;

(3) When the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd orimpossible;

(4) When there is grave abuse of discretion in the appreciation of facts;

(5) When the appellate court, in making its findings, went beyond the issues of the case, and such findings arecontrary to the admissions of both appellant and appellee;

(6) When the judgment of the Court of Appeals is premised on misapprehension of facts;

(7) When the Court of Appeals failed to notice certain relevant facts which, if properly considered, would justifya different conclusion;

(8) When the findings of fact are themselves conflicting;

(9) When the findings of fact are conclusions without citation of the specific evidence on which they are based;and

(10) When the findings of fact of the Court of Appeals are premised on the absence of evidence but suchfindings are contradicted by the evidence on record.14


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In this case, the findings of fact of the trial court and the CA on the issue of the place of commission of theoffense are conclusions without any citation of the specific evidence on which they are based; they aregrounded on conclusions and conjectures.

The trial court, in its Decision, ruled on the commission of the offense without any finding as to where it wascommitted:

Based on the evidence presented by the prosecution through private complainant Elizabeth Luciaja, the Court is

convinced that accused Trenas had committed the offense of Estafa by taking advantage of her trust so that hecould misappropriate for his own personal benefit the amount entrusted to him for payment of the capital gainstax and documentary stamp tax.

As clearly narrated by private complainant Luciaja, after accused Trenas had obtained the amount ofP150,000.00 from her, he gave her two receipts purportedly issued by the Bureau of Internal Revenue, for thefraudulent purpose of fooling her and making her believe that he had complied with his duty to pay theaforementioned taxes. Eventually, private complainant Luciaja discovered that said receipts were fabricateddocuments.15

In his Motion for Reconsideration before the RTC, petitioner raised the argument that it had no jurisdiction overthe offense charged. The trial court denied the motion, without citing any specific evidence upon which itsfindings were based, and by relying on conjecture, thus:

That the said amount was given to [Treas] in Makati City was incontrovertibly established by the prosecution.Accused Treas, on the other hand, never appeared in Court to present countervailing evidence. It is only nowthat he is suggesting another possible scenario, not based on the evidence, but on mere "what ifs". x x x

Besides, if this Court were to seriously assay his assertions, the same would still not warrant a reversal of theassailed judgment. Even if the Deed of Sale with Assumption of Mortgage was executed on 22 December 999 inIloilo City, it cannot preclude the fact that the P150,000.00 was delivered to him by private complainant Luciajain Makati City the following day. His reasoning the money must have been delivered to him in Iloilo City becauseit was to be used for paying the taxes with the BIR office in that city does not inspire concurrence. The records

show that he did not even pay the taxes because the BIR receipts he gave to private complainant were fakedocuments. Thus, his argumentation in this regard is too specious to consider favorably.16

For its part, the CA ruled on the issue of the trial courts jurisdiction in this wise:

It is a settled jurisprudence that the court will not entertain evidence unless it is offered in evidence. It bearsemphasis that Hector did not comment on the formal offer of prosecutions evidence nor present any evidenceon his behalf. He failed to substantiate his allegations that he had received the amount of P150,000.00 in IloiloCity. Hence, Hectors allegations cannot be given evidentiary weight.

Absent any showing of a fact or circumstance of weight and influence which would appear to have been

overlooked and, if considered, could affect the outcome of the case, the factual findings and assessment on thecredibility of a witness made by the trial court remain binding on appellate tribunal. They are entitled to greatweight and respect and will not be disturbed on review.17

The instant case is thus an exception allowing a review of the factual findings of the lower courts.

Jurisdiction of the Trial Court

The overarching consideration in this case is the principle that, in criminal cases, venue is jurisdictional. A courtcannot exercise jurisdiction over a person charged with an offense committed outside its limited territory. In Isipv. People,18 this Court explained:

The place where the crime was committed determines not only the venue of the action but is an essentialelement of jurisdiction. It is a fundamental rule that for jurisdiction to be acquired by courts in criminal cases,the offense should have been committed or any one of its essential ingredients should have taken place withinthe territorial jurisdiction of the court. Territorial jurisdiction in criminal cases is the territory where the courthas jurisdiction to take cognizance or to try the offense allegedly committed therein by the accused. Thus, itcannot take jurisdiction over a person charged with an offense allegedly committed outside of that limitedterritory. Furthermore, the jurisdiction of a court over the criminal case is determined by the allegations in thecomplaint or information. And once it is so shown, the court may validly take cognizance of the case. However, ifthe evidence adduced during the trial shows that the offense was committed somewhere else, the court shoulddismiss the action for want of jurisdiction. (Emphasis supplied.)


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In a criminal case, the prosecution must not only prove that the offense was committed, it must also prove theidentity of the accused and the fact that the offense was committed within the jurisdiction of the court.

In Fukuzume v. People,19 this Court dismissed a Complaint for estafa, wherein the prosecution failed to provethat the essential elements of the offense took place within the trial courts jurisdiction. The Court ruled:

More importantly, we find nothing in the direct or cross-examination of Yu to establish that he gave any money

to Fukuzume or transacted business with him with respect to the subject aluminum scrap wires inside or withinthe premises of the Intercontinental Hotel in Makati, or anywhere in Makati for that matter. Venue in criminalcases is an essential element of jurisdiction. x x x

In the present case, the criminal information against Fukuzume was filed with and tried by the RTC of Makati. Hewas charged with estafa as defined under Article 315, paragraph 2(a) of the Revised Penal Code, the elements ofwhich are as follows: x x x

The crime was alleged in the Information as having been committed in Makati. However, aside from the swornstatement executed by Yu on April 19, 1994, the prosecution presented no other evidence, testimonial ordocumentary, to corroborate Yu's sworn statement or to prove that any of the above-enumerated elements ofthe offense charged was committed in Makati. Indeed, the prosecution failed to establish that any of thesubsequent payments made by Yu in the amounts of P50,000.00 on July 12, 1991, P20,000.00 on July 22, 1991,P50,000.00 on October 14, 1991 and P170,000.00 on October 18, 1991 was given in Makati. Neither was thereproof to show that the certifications purporting to prove that NAPOCOR has in its custody the subject aluminumscrap wires and that Fukuzume is authorized by Furukawa to sell the same were given by Fukuzume to Yu inMakati. On the contrary, the testimony of Yu established that all the elements of the offense charged had beencommitted in Paraaque, to wit: that on July 12, 1991, Yu went to the house of Fukuzume in Paraaque; thatwith the intention of selling the subject aluminum scrap wires, the latter pretended that he is a representativeof Furukawa who is authorized to sell the said scrap wires; that based on the false pretense of Fukuzume, Yuagreed to buy the subject aluminum scrap wires; that Yu paid Fukuzume the initial amount of P50,000.00; thatas a result, Yu suffered damage. Stated differently, the crime of estafa, as defined and penalized under Article315, paragraph 2(a) of the Revised Penal Code, was consummated when Yu and Fukuzume met at the latter's

house in Paraaque and, by falsely pretending to sell aluminum scrap wires, Fukuzume was able to induce Yu topart with his money.

x x x

From the foregoing, it is evident that the prosecution failed to prove that Fukuzume committed the crime ofestafa in Makati or that any of the essential ingredients of the offense took place in the said city. Hence, the judgment of the trial court convicting Fukuzume of the crime of estafa should be set aside for want of jurisdiction, without prejudice, however, to the filing of appropriate charges with the court of competent jurisdiction. (Emphasis supplied)

In this case, the prosecution failed to show that the offense of estafa under Section 1, paragraph (b) of Article315 of the RPC was committed within the jurisdiction of the RTC of Makati City.

That the offense was committed in Makati City was alleged in the information as follows:

That on or about the 23rd day of December, 1999, in the City of Makati, Metro Manila, Philippines and withinthe jurisdiction of this Honorable Court, the above-named accused, received in trust from ELIZABETH LUCIAJAthe amount of P150,000.00 x x x. (Emphasis supplied.)20

Ordinarily, this statement would have been sufficient to vest jurisdiction in the RTC of Makati. However, theAffidavit of Complaint executed by Elizabeth does not contain any allegation as to where the offense wascommitted. It provides in part:

4. THAT on 23 December 1999, [Elizabeth] personally entrusted to ATTY. HECTOR TREAS the sum ofP150,000.00 to be expended as agreed and ATTY. HECTOR TREAS issued to me a receipt, a photo copy of whichis hereto attached as Annex "B",

5. THAT despite my several follow-ups with ATTY. HECTOR TREAS, the latter failed to transfer the title ofaforesaid property to MRS. MARGARITA ALOCILJA. He also failed to pay the capital gains tax, documentarystamps and BIR-related expenses. What ATTY. HECTOR TREAS accomplished was only the preparation of theDeed of Sale covering aforesaid property. A copy of said Deed of Sale is hereto attached as Annex "C",


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6. THAT in view of my persistent follow-ups, ATTY. HECTOR TREAS issued to me a check for refund of the sumgiven to him less the attorneys fee of P20,000.00 and the sum of P10,000.00 allegedly paid to BIR or in the netsum of P120,000.00. x x x

7. THAT when said check was deposited at EQUITABLE PCI BANK dela Rosa-Rada Branch at Makati City, the samewas dishonored by the drawee bank for the reason: ACCOUNT CLOSED. x x x21

Aside from the lone allegation in the Information, no other evidence was presented by the prosecution to prove

that the offense or any of its elements was committed in Makati City.

Under Article 315, par. 1 (b) of the RPC, the elements of estafa are as follows: (1) that money, goods or otherpersonal property is received by the offender in trust or on commission, or for administration, or under anyother obligation involving the duty to make delivery of or to return the same; (2) that there be misappropriationor conversion of such money or property by the offender, or denial on his part of such receipt; (3) that suchmisappropriation or conversion or denial is to the prejudice of another; and (4) there is demand by the offendedparty to the offender.22

There is nothing in the documentary evidence offered by the prosecution23 that points to where the offense, orany of its elements, was committed. A review of the testimony of Elizabeth also shows that there was nomention of the place where the offense was allegedly committed:

Q After the manager of Maybank referred Atty. Treas to you, what happened next?

A We have met and he explained to the expenses and what we will have to and she will work for the Deed ofSale.

Q And did he quote any amount when you got to the expenses?

A Yes. I gave him ONE HUNDRED FIFTY THOUSAND.

Q What was the amount quoted to you?

A ONE HUNDRED FIFTY THOUSAND.

Q Did he give a breakdown of this ONE HUNDRED FIFTY THOUSAND?

A Yes, sir.

Q And what is the breakdown of this ONE HUNDRED FIFTY THOUSAND?

A TWENTY THOUSAND is for his Attorneys fee, NINETY THOUSAND is for the capital gain tax TWENTY FOURTHOUSAND is intended for documentary sum (sic) and TEN THOUSAND PESOS is for other expenses for BIR.

Q And did you give him this ONE HUNDRED FIFTY THOUSAND?

A Yes, sir.

Q Did he issue a receipt?

A Yes, sir.

Q If shown to you a receipt issued by Atty. Treas for this ONE HUNDRED FIFTY THOUSAND, will you be able toidentify it?

A Yes, sir.

Q I am showing to you a document, madam witness, already identified during the pre-trial as exhibit "B". Thisappears to be a receipt dated December 22, 1999. Will you please go over this document and inform this courtwhat relation has this to the receipt which you said Atty. Treas issued to you?

A This is the receipt issued by Atty. Hector Treas.

Q Now, after the amount of ONE HUNDRED FIFTY THOUSAND was given to Atty. Treas by you, what happenednext?


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A We made several follow-ups but he failed to do his job.24

Although the prosecution alleged that the check issued by petitioner was dishonored in a bank in Makati, suchdishonor is not an element of the offense of estafa under Article 315, par. 1 (b) of the RPC.

Indeed, other than the lone allegation in the information, there is nothing in the prosecution evidence whicheven mentions that any of the elements of the offense were committed in Makati. The rule is settled that an

objection may be raised based on the ground that the court lacks jurisdiction over the offense charged, or it maybe considered motu proprio by the court at any stage of the proceedings or on appeal.25 Moreover, jurisdictionover the subject matter in a criminal case cannot be conferred upon the court by the accused, by express waiveror otherwise. That jurisdiction is conferred

by the sovereign authority that organized the court and is given only by law in the manner and form prescribedby law.26

It has been consistently held by this Court that it is unfair to require a defendant or accused to undergo theordeal and expense of a trial if the court has no jurisdiction over the subject matter or offense or it is not thecourt of proper venue.27 Section 15 (a) of Rule 110 of the Revised Rules on Criminal Procedure of 2000 providesthat "[s]ubject to existing laws, the criminal action shall be instituted and tried in the court of the municipality orterritory where the offense was committed or where any of its essential ingredients occurred." Thisfundamental principle is to ensure that the defendant is not compelled to move to, and appear in, a differentcourt from that of the province where the crime was committed as it would cause him great inconvenience inlooking for his witnesses and other evidence in another place.28 This principle echoes more strongly in this case,where, due to distance constraints, coupled with his advanced age and failing health, petitioner was unable topresent his defense in the charges against him.

There being no showing that the offense was committed within Makati, the RTC of that city has no jurisdictionover the case.29

As such, there is no more need to discuss the other issue raised by petitioner.

At this juncture, this Court sees it fit to note that the Code of Professional Responsibility strongly militatesagainst the petitioners conduct in handling the funds of his cli ent. Rules 16.01 and 16.02 of the Code provides:

Rule 16.01 A lawyer shall account for all money or property collected or received for or from theclient.1wphi1

Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those otherskept by him.

When a lawyer collects or receives money from his client for a particular purpose (such as for filing fees,

registration fees, transportation and office expenses), he should promptly account to the client how the moneywas spent.30 If he does not use the money for its intended purpose, he must immediately return it to the client.His failure either to render an accounting or to return the money (if the intended purpose of the money doesnot materialize) constitutes a blatant disregard of Rule 16.01 of the Code of Professional Responsibility.31

Moreover, a lawyer has the duty to deliver his client's funds or properties as they fall due or upon demand.32His failure to return the client's money upon demand gives rise to the presumption that he has misappropriatedit for his own use to the prejudice of and in violation of the trust reposed in him by the client.33 It is a grossviolation of general morality as well as of professional ethics; it impairs public confidence in the legal professionand deserves punishment.34

In Cuizon v. Macalino,35 this Court ruled that the issuance of checks which were later dishonored for havingbeen drawn against a closed account indicates a lawyer's unfitness for the trust and confidence reposed on him,shows lack of personal honesty and good moral character as to render him unworthy of public confidence, andconstitutes a ground for disciplinary action.

This case is thus referred to the Integrated Bar of the Philippines (IBP) for the initiation of disciplinaryproceedings against petitioner. In any case, should there be a finding that petitioner has failed to account for thefunds received by him in trust, the recommendation should include an order to immediately return the amountof P 130,000 to his client, with the appropriate rate of interest from the time of demand until full payment.


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WHEREFORE, the Petition is GRANTED. The Decision dated 9 July 2010 and the Resolution dated 4 January 2011issued by the Court of Appeals in CA-G.R. CR No. 32177 are SET ASIDE on the ground of lack of jurisdiction on thepart of the Regional Trial Court, Branch 137, Makati City. Criminal Case No. 01-2409 is DISMISSED withoutprejudice. This case is REFERRED to the IBP Board of Governors for investigation and recommendation pursuantto Section 1 of Rule 139-B of the Rules of Court.

SO ORDERED.

2.) G.R. No. 203696 June 2, 2014

JESSE PHILIP B. EIJANSANTOS, Petitioner,vs.SPECIAL PRESIDENTIAL TASK FORCE 156, represented by ATTY. ALLAN U. VENTURA, Respondent.

D E C I S I O N

MENDOZA, J.:

Questioned in this petition for review on certiorari under Rule 45 is the May 18, 2012 Decisio n1 of the Court ofAppeals (CA). which affirmed the July 10, 2006 Decision,2 the December 29, 2009 Orde r3 and the September 24, 2012

Resolution of the Office of the Ombudsman (Ombudsman )4

regarding an administrative complaint for gravemisconduct which paved the way for a defraudation of the government in the amount of at least P867,680.00.The FactsRecords show that Special Presidential Task Force 156 (SPTF 156) conducted an investigation against some publicofficials of the One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center (Center)of the Department ofFinance (DOF),namely:1. Asuncion M. Magdaet2. Mark A. Binsol3. Annabelle J. Dino4. Jane U. Aranas (Aranas)5. Sylviana F. Daguimol6. Gemma O. Abara

7. Gregoria C. Evangelio8. Charmelle P. Recoter9. Merose L. Tordesillas10. Jesse Philip B. Eijansantos (Eijansantos)11. Rowena P. MalonzoThe above-named public officials were the evaluators and examiners of the Center who were investigated for possiblegrave misconduct in connection with the anomalous issuance of thirty four (34) Tax Credit Certificates (TCCs)amounting to at least 110,194,158.00.SPTF 156 was created by former President Joseph Estrada in October 1999 to review, investigate and gather evidencenecessary to prosecute the commission of irregularities in the various offices and agencies of the DOF. The life of SPTF156 was extended by former President Gloria Macapagal Arroyo in October 2001. SPTF 156 was further mandated toinvestigate the irregularities committed at the Center and to recover and collect lost revenues. Pursuant to this

mandate, Atty. Gerville Abanilla Reyes (Atty. Reyes),SPTF 156 lawyer-consultant, conducted an independentinvestigation on the alleged anomalous issuances of TCCs to Evergreen Weaving Mills, Inc (Evergreen).The Center acted as the implementing/issuing body for tax credits in coordination with the Board of Investment(BOI),Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR)for incentives, entitlements/availmentssubject to certain terms and conditions outlined by the aforesaid agencies. In compliance with the approved Manualof Operations in filing an application for issuance of tax credits, Evergreen submitted to the Center the followinginitial documental requirements: Securities and Exchange Commission (SEC)Registration Certificate, Articles ofIncorporation, Treasurers Affidavit, BOI Registration Certificate, and the Terms and Conditions of Registration. From the documents submitted, Evergreen claimed to be a legitimate business corporation and was given theprivilege of registering as a new producer of spun yarn and woven fabrics under BOI Registration No. EP 89-727. Byvirtue of its BOI registration, Evergreen was entitled to a package of incentives such as tax credits on capitalequipment purchased and on raw materials used in the manufacture, processing or production of export productsand access to bonded manufacturing/trading warehouse system provided under the Omnibus Investment Code of1987. Evergreen represented that it made local purchases for the purpose of manufacturing spun yarn and wovenfabrics, which were allegedly sold to direct exporters through a common bonded warehouse, namely, Filipino HandCommon Bonded Corporation (FHCBC).It submitted proofs of local purchases in the form of sales invoices anddelivery receipts of the eight (8) supposed suppliers, namely: Cleveland Textile Mills, Filsyn Corporation Indo Phil.,Cotton Mills, Inc., Tangos General Merchandise, Homa Enterprise, Litton Mills, Inc., Intertech Ventures Corporation,and Manila Bay Spinning Mills, Inc. Evergreen also submitted certificates of delivery and receipts attesting to the salesmade to direct exporters. These certificates represented the bases of Evergreens claims under the Advanced TaxCredit Scheme (ATCS), otherwise known as Constructive Exportation.Later, Evergreens application or claims for tax credit were examined at three (3) levels performed and conducted bythe evaluator, reviewer and recommending officer from the Center. From January 1994 to June 1998, a total of thirty
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four (34) TCCs worth at least P110,194,158.00 were issued to Evergreen. These TCCs were utilized either throughown use or transfer to other companies.Based on the Investigation Report, dated March 16, 2004, submitted b y Atty. Reyes, it appeared that Evergreensexistence was questionable. The suppliers and buyers were in existent or could no longer be found. The sales invoicesand delivery receipts which were used as bases of the tax credit claims of Evergreen were fake and the TCC transferswere fictitious.For said reason, SPTF 156 Executive Director Atty. Alan A. Ventura, through a complaint-affidavit ,5f iled criminalcharges for Violation of Section 3 (e) of Republic Act (R.A.) 3019, as amended, and Estafa Thru Falsification of PublicDocuments, against those involved in the aforesaid anomalous transactions, and likewise administrative charges forgrave misconduct against the public officials abovementioned.On July 10, 2006, the Prosecution and Monitoring Bureau (PAMB)of the Ombudsman rendered a decision ,6f indingAsuncion M. Magdaet (Magdaet),Mark A. Binsol, Annabelle J. Dino, Aranas, Sylviana F. Daguimol, Gemma O.Abara,Gregoria C. Evangelio, Charmelle P. Recoter, Merose L. Tordesillas, Eijansantos, and Rowena P. Malonzo guiltyof grave misconduct with the penalty of dismissal from the service including all its accessory penalties and withoutprejudice to criminal prosecution.The PAMB stated, among others, that there was substantial evidence on record that warranted a finding of gravemisconduct against the said public officials; that there was enough proof shown that the fraudulent release of thesubject TCCs in favor of Evergreen and its consequent transfer to at least four (4) corporations, namely: FilsynCorporation, Indo Phil Cotton, Manila Bay Spinning Mills, Inc., and Pilipinas Shell Petroleum Corporation, took placebecause of the negligence committed by the said public officials in the TCC application process; that the spurious andquestionable documents submitted by Evergreen in support of its claim for tax credit could have been discoveredright away if proper verification was conducted and the examinations relative to the authenticity of the supportingdocuments were not deliberately disregarded; that the respective positions of the said public officials were not purelyministerial in nature because they were expected to examine the records and/or documents submitted before them;that the highest authority and/or final approving authority of the TCC applications primarily relied on their supposedexpertise in checking and examining the supporting documents submitted before them; that as responsible publicemployees, they should have acted with reasonable caution on all matters entrusted to them in order to avoid unduedamage and prejudice to the government; that it could be assumed that the said public officials participated in thegrand tax scam by simply accepting the documents submitted before them as authentic and without flaws and notfurther verifying the entries made therein; and that the act of entering into fraudulent transactions in theperformance of ones duty constituted the grave offense of grave misconduct punishable under Section 52, Rule IV ofthe Uniform Rules on Administrative Cases. Magdaet and Eijansantos filed their respective motions forreconsideration, but they were denied in the PAMB Order ,7dated December 29, 2009.Subsequently, Eijansantos filed a petition for review before the CA assailing the decision and order of theOmbudsman. He argued, among others, that he could not be held guilty of grave misconduct as he dutifullyperformed his responsibilities as evaluator; that his duties and responsibilities basically involved the preparation of anevaluation report submitted to his immediate superior, Aranas; that he was not privy to the process by which the TCCwas issued because its approval and release were an altogether different duty which he did not exercise; that heperformed his duties based on the directives and manner taught to him in the Center; and that the documentssubmitted by Evergreen appeared to be authentic without any hint of falsity which he had no reason to doubt.On May 18, 2012, the CA rendered a decision affirming the decision of the Ombudsman. The pertinent portion of thedecision reads as follows:There is no question that one of EVERGREENS 34 TCCs is TCC No. 020829 which went through petitioners evaluation.In his own words, his duties as evaluator included the physical verification/inspection of manufacturing and plant

facilities. To perform this task, petitioner must go beyond the documents that reached his desk. He must not contenthimself with what appeared to be regular or authentic on the face of these documents. Surely, his specific duty tophysically verify and inspect manufacturing and plant facilities requires him to go out of his office and personallyproceed to these facilities. The question is: did he do what was required of him in this case? He himself admits that hemade his evaluation based alone on EVERGREENS documents that were forwarded to him. This means he did notbother to go to the manufacturing and plant facilities for physical verification/inspection, albeit it was explicitlyrequired of him as first level evaluator. The end result was he did not discover that EVERGREEN, in fact, had nolegitimate operations or even a place of business. He gave a positive evaluation to EVERGREEN, despite the absenceof veritable data which he was required to obtain first hand through his physical verification/inspection ofEVERGREENS supposed manufacturing and plant facilities. He was, therefore, being deliberately dishonest when hecame out with a positive evaluation of EVERGREEN, notwithstanding he was not armed with the complete data whichhe was duty bound to obtain and verify. If this is not grave misconduct, what is? At any rate, petitioners culpability

was sealed when he did not notice that EVERGREENS specific place of business and secretarys certificate authorizinga certain Emerson Go to represent it, were actually nowhere to be found in the documents that he supposedlyevaluated.The Supreme Court has aptly emphasized the highest standard of service required of revenue officers vested with theduty to guard and ensure the flow of blood in the veins of government, precisely because this countrys survival lies intheir hands, thus:x x x.Indeed, if only petitioner did what was legally required of him, i.e., among them, physical verification/inspection ofmanufacturing and plant facilities, he would have easily discovered that EVERGREENS supporting documents were allfictitious and it had no legitimate transactions or operations to merit the issuance of a tax credit certificate in itsfavor. Petitioner would have correctly evaluated and promptly determined EVERGREENS lack of capacity and
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fraudulent machinations to deceive the government. If only he did his job in accord with his job description, he wouldhave saved the government from losing P867, 680.00, and more, in other transactions.Unsatisfied, Eijansantos filed this petition for review on certiorari based on the followingGROUNDSWITH DUE RESPECT, THE HONORABLE COURT OF APPEALS FIRST DIVISION GRAVELY ERRED [IN] ITS DISCWHEN IT AFFIRMED THE ASSAILED DECISION OF THE OFFICE OF THE OMBUDSMAN WHICH AMOUNTS TO LACEXCESS OF JURISDICTION.PETITIONER EIJANSANTOS ISNOT GUILTY OF GRAVE MISCONDUCT AS HE DUTIFULLY PERFORMED HIS DUTRESPONSIBILITIES.CONSPIRACY WAS NOT DULY ESTABLISHED AS AGAINST PETITIONER EIJANSANTOS.8 The petitioner basically argues that he cannot be held administratively liable for grave misconduct in the performanceof his official duties and responsibilities because he was just an evaluator and not the approving authority ofEvergreens tax credit application. He claims that his duties and functions as an evaluator were only limited, based onhis job description a well as the directives and instructions of his superiors at the Center. He explains that, inprocessing tax credit applications, he was trained and instructed by the Center to require the applicant to submitimport and export documents. He would then prepare an evaluation report, which contained information or data onthe applicant, and a computation and recommendation for approval of the amount of tax credit applied.Subsequently, he would submit the evaluation report to his immediate superior, Aranas, for her review andrecommendation.The petitioner further avers that Aranas either approved, denied or approved with corrections his evaluation report;

and that upon the submission of the final evaluation report, his participation as an evaluator of the tax creditapplication ends. He likewi se claims that he was just a newly hired employee at the time he processed Evergreens taxcredit application in November 1993 and that his designated duties for physical verification/inspection ofmanufacturing facilities and plant inspections were only included and required sometime in 1995.The petitioner asserts that he acted in good faith when he relied on the documents submitted to him which appearedto comply with the proper requirements for the processing of tax credit applications. He claims that he was notnegligent of his duties and neither was there any proof shown that he was involved in a grand tax scam conspiracy todefraud the government.Position of the OSGThe OSG counters that in administrative proceedings, the quantum of evidence required to sustain a finding of fact ismerely substantial evidence; that there was substantial evidence shown that the petitioner was administratively liablefor gross misconduct; that the petitioner as evaluator and/or reviewer was not a mere stamping personnel; that his

position was not purely ministerial in nature for he was expected to examine the records and/or the documentssubmitted before him; that by signing the documents, he gave an imprimatur of approval to such applications; that bysimply accepting the documents as authentic and without flaws and not further verifying the entries made therein, itcan be deduced that the petitioner took part in allowing the grand tax scam to happen; that as an evaluator orexaminer, it was his duty to guard against tampering of documents and padding of fictitious invoices and deliveryreceipts; that the petitioners act was an essential ingredient in the commission of fraud against the government; thathis ignorance cannot erase his liability because he disregarded established practice rules; that he was grosslynegligent for his failure to review or verify the authenticity of the documents which involved millions of pesos; andthat he ought to live up to the strictest standards of honesty and integrity in the public service and must at all timesbe above suspicion. Finally, the OSG argues that the findings of the Ombudsman deserve great weight and must beaccorded full respect and credit.The Courts Ruling

The petition lacks merit.The long standing policy of the Court is non-interference in the powers given by no less than the Constitution to theOffice of the Ombudsman. Except in clear cases of grave abuse of discretion, the Court will not interfere with theexercise by the Ombudsman of its investigatory and prosecutorial powers on complaints filed against erring publicofficials and employees. Its findings of fact are conclusive when supported by substantial evidence and are accordeddue respect and weight, especially when they are affirmed by the CA. Generally, in reviewing administrative decisions,it is beyond the province of this Court to weigh the conflicting evidence, determine the credibility of witnesses, orotherwise substitute its judgment for that of the administrative agency with respect to the sufficiency of evidence. Itis not the function of this Court to analyze and weigh the parties evidence all over again except when there is seriousground to believe that a possible miscarriage of justice would thereby result .9The recent case of Conrado Casing vs.Hon. Ombudsman 10is enlightening:The Constitution and R.A. No. 6770 endowed the Office of the Ombudsman with wide latitude, in the exercise of its

investigatory and prosecutory powers, to pass upon criminal complaints involving public officials and employees.Specifically, the determination of whether probable cause exists is a function that belongs to the Office of theOmbudsman. Whether a criminal case, given its attendant facts and circumstances, should be filed or not is basicallyits call.As a general rule, the Court does not interfere with the Office of the Ombudsman s exercise of its investigative andprosecutorial powers, and respects the initiative and independence inherent in the Office of the Ombudsman which,"beholden to no one, acts as the champion of the people and the preserver of the integrity of the public service."While the Ombudsmans findings as to whether probable cause exists are generally not reviewable by this Court,where there is an allegation of grave abuse of discretion, the Ombudsmans act cannot escape judicial scrutiny underthe Courts own co nstitutional power and duty "to determine whether or not there has been grave abuse of
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discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of theGovernment."Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of jurisdiction.The Ombudsmans exercise of power must have been done in an arbitrary or despotic manner - which must be sopatent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined or toact at all in contemplation of law in order to exceptionally warrant judicial intervention. The petitioner failed toshow the existence of grave abuse of discretion in this case.In this regard, the Court agrees with the CA that there was no error committed by the Ombudsman. 1wphi1 The recordshows that there is enough evidence on record warranting the finding of guilt for grave misconduct against thepetitioner.Misconduct has a legal and uniform definition. It is defined as an intentional wrongdoing or a deliberate violation of arule of law or standard of behavior, especially by a government official. A misconduct is grave where the elements ofcorruption, clear intent to violate the law or flagrant disregard of established rule are present .11 In the case at bench, the petitioner does not dispute that his duties and responsibilities as an evaluator for thewearable/textile division are the following:a) check listing of tax credit claims;b) preparation of evaluation reports and the computation of tax credit claims;c) preparation of correspondence and other communication letters to exporters/claimants;d) attending to inquiries and assistance on specific cases; ande) physical verification/inspection of manufacturing facilities and plant inspectionsThe petitioner did not deny that he evaluated and processed Evergreens tax credit application which was filed andaccepted by the Center on November 26, 1993 and subsequently approved on January 5, 1994, and that TCC No.020829 was subsequently issued to Evergreen.He, however, claimed that he properly followed the procedure adopted by the Center in the processing of tax creditapplications by 1] requiring the applicant to submit complete import documents (bills of lading, commercial invoices,import entry internal revenue declaration and BOC official receipts) and export documents (bills of lading, invoices,bank credit memo and export declaration); 2] preparing an evaluation report which would include pertinentinformation/data on the applicant, computation of the amount of tax credit applied for; 3] submitting of theevaluation report to the immediate supervisor recommending either the approval or denial of the particular tax creditclaim; and 4+ submitting of the final evaluation report to the immediate supervisor for further action after the lattersapproval or after the necessary corrections had been made by the latter.He stressed that his participation as an evaluator ended after the approval of his evaluation report by his superiors.He added that the procedure for approval and release of the TCC to the applicant was already beyond his functionand duty as an evaluator.In other words, the petitioner is trying to tell us that his duties and responsibilities as an evaluator were just limitedand that he performed the same based on the directives given by the Center and the instructions given to him by hissuperiors. Accordingly, he could not be considered negligent in his duties and be adjudged guilty of grave misconductfor the alleged tax credit scam.The Court is not convinced.The petitioner apparently failed in one of his duties and responsibilities as an evaluator which was to conduct aphysical verification/inspection of manufacturing and plant facilities. While he followed the instructions and traininggiven to him by his superiors at the Center, he neither conducted a physical verification/inspection on the actualoffice premises and the manufacturing and plant facilities of Evergreen, nor did he conduct such verification orinspection on Evergreens suppliers and exporters. Definitely, as a Senior Tax Specialist, the petitioner ought to know

that there was a necessity to thoroughly verify the authenticity of tax credit applications before processing the same.It was not just enough for the petitioner to require a tax credit applicant to submit import and export documents andevaluate the particular application based merely on the form and substance of the documents submitted. He shouldhave conducted a physical verification/inspection relating to all important information stated therein such as theexact address and physical location of the applicant companys bu siness office including the true names, backgroundand exact addresses of the applicants key officers, as well as those of the suppliers and exporters. The petitionershould have left no stone unturned, so to speak, in verifying such vital information. He should not have been satisfiedwith his own judgment that the documents submitted to him appeared to be correct and regular on its face. Heshould have dug deeper instead of just looking at the surface in finding out the genuineness of the documents beforeprocessing tax credit applications and finally submitting the same to his superiors.There were numerous TCCs issued to Evergreen worth several millions of pesos. Based on the "Summary of TCCsIssued to Evergreen" on record ,12 there were several evaluators that were assigned to handle the processing of

Evergreens TCCs. The petitioner was one of the evaluators who handled TCC No. 020829. It was also established thatfrom January 1994 to June 1998, a total of thirty four (34) TCCs worth 110,194,158.00 were issued to Evergreen. Noneof the evaluators, not even the reviewers and approving authorities, were able to prevent the tax credit fraud fromhappening. All of them had the same lame excuse that the documents submitted to them for evaluation appearedto be regular and correct and that they never conducted a physical verification/inspection of offices, manufacturingand plant facilities.There is no doubt that the petitioner, together with the other evaluators, committed a deliberate disregard ofestablished rules which can only be considered as grave misconduct.Flagrant disregard of rules is a ground that jurisprudence has already touched upon. It has been demonstrated,among others, in the instances when there had been open defiance of a customary rule; in the repeated voluntarydisregard of established rules in the procurement of supplies; in the practice of illegally collecting fees more than
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what is prescribed for delayed registration of marriages; when several violations or disregard of regulations governingthe collection of government funds were committed; and when the employee arrogated unto herself responsibilitiesthat were clearly beyond her given dut ies. The common denominator in these cases was the employees propensityto ignore the rules as clearly manifested by his or her actions .13 The Court finds unacceptable petitioners belated explanation that his designated duty for physicalverification/inspection of manufacturing and plant facilities was only included and required sometime in 1995.Curiously, he never mentioned this in his pleadings - his counter-affidavit ,14 motion for reconsideration ,15supplementalmotion for reconsideration ,16 and even his petition before the CA. Moreover, the petitioner did not substantiate thisargument by showing any written official memo, pol icy or circular from the Center. Clearly, the petitioners argumentwas just a plain afterthought.Substantial evidence is the onlyquantum of evidence neededin administrative proceedingsThe OSG correctly argued that in an administrative proceeding, the evidentiary bar against which the evidence athand is measured is not the highest quantum of proof beyond reasonable doubt, requiring moral certainty to supportaffirmative findings. Instead, the lowest standard of substantial evidence, that is, such relevant evidence as areasonable mind will accept as adequate to support a conclusion, applies. Because administrative liability attaches solong as there is some evidence adequate to support the conclusion that acts constitutive of the administrative offensehave been performed (or have not been performed), reasonable doubt does not ipso facto result in exonerationunlike in criminal proceedings where guilt must be proven beyond reasonable doubt .17 In this case, there is ample substantial evidence to support the conclusion that the petitioner committed an actconstitutive of grave misconduct. It need not be emphasized that from January 1994 to June 1998, a total of thirtyfour (34) TCCs worth at least P110,194,158.00 were issued to Evergreen. These TCCs were utilized either through ownuse by Evergreen or transfer to other companies. Had the petitioner exercised due care and caution, he could havediscovered that Evergreen, its suppliers and buyers did not exist or could no longer be found. The sales invoices anddelivery receipts which were used as bases of tax credit claims of Evergreen were fake and the TCCs were transferredfictitiously. All these anomalies resulted due to the gross negligence committed by the petitioner and his co-evaluators in handling the tax credit applications. The petitioner, to repeat, failed to faithfully comply with his dutyand responsibility to conduct a physical verification/inspection of manufacturing and plant facilities, which enabledEvergreen to succeed in deceiving the government in the amount of P867, 680.00 to its damage and prejudice.The Court agrees with the CA and the Ombudsman that the tax credit anomaly could have been avoided if thepetitioner and his co-evaluators followed to the letter their duty and responsibility to conduct a physicalverification/inspection of Evergreen' s manufacturing and plant facilities together with the facilities of its allegedsuppliers and exporters. A mere documentary verification should not have sufficed but, instead, an ocular verificationon the applicant's offices and manufacturing plants and facilities should have been necessarily done. Although it is nota high policy making position, an evaluator is, nonetheless, a very essential and sensitive one because his superiorrelies on the result of his evaluation.Public service requires integrity and discipline. For this reason, public servants must exhibit at all times the highestsense of honesty and dedication to duty. By the very nature of their duties and responsibilities, public officers andemployees must faithfully adhere to hold sacred and render inviolate the constitutional principle that a public office isa public trust and must at all times be accountable to the people, serve them with utmost responsibility, integrity,loyalty and efficiency.18 In fine, the entire act of petitioner clearly points to a deliberate disregard of established rules constitutive of gravemisconduct.

WHEREFORE, the petition is DENIED.3.) G.R. No. 143591 May 5, 2010

TEODORO C. BORLONGAN, JR., CORAZON M. BEJASA, ARTURO E. MANUEL, JR., ERIC L. LEE, P. SIERVO H. DIBENJAMIN DE LEON, DELFIN C. GONZALES, JR., and BEN YU LIM, JR., Petitioners,vs.MAGDALENO M. PEA and HON. MANUEL Q. LIMSIACO, JR., as Judge Designate of the Municipal Trial Court inCities, Bago City, Respondents.

D E C I S I O N

PEREZ, J.:

The pivotal issue in this case is whether or not the Court of Appeals, in its Decision 1 dated 20 June 2000 in CA-G.R. SPNo. 49666, is correct when it dismissed the petition for certiorari filed by petitioners Teodoro C. Borlongan, Jr.,Corazon M. Bejasa, Arturo E. Manuel, Jr., Benjamin de Leon, P. Siervo H. Dizon, Delfin C. Gonzales, Jr., Eric L. Lee andBen Yu Lim, Jr., and ruled that the Municipal Trial Court in Cities (MTCC), Bago City, did not gravely abuse itsdiscretion in denying the motion for reinvestigation and recall of the warrants of arrest in Criminal Case Nos. 6683,6684, 6685, and 6686.The factual antecedents of the case are as follows:Respondent Atty. Magdaleno M. Pea (Atty. Pea) instituted a civil case for recovery of agents compensation andexpenses, damages, and attorneys fee s2 against Urban Bank and herein petitioners, before the Regional Trial Court
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(RTC) of Negros Occidental, Bago City. The case was raffled to Branch 62 and was docketed as Civil Case No. 754. Atty.Pea anchored his claim for compensation on the Contract of Agenc y3 allegedly entered into with the petitioners,wherein the former undertook to perform such acts necessary to prevent any intruder and squatter from unlawfullyoccupying Urban Banks property located along Roxas Boulevard, Pasay City. Petitioners filed a Motion toDismiss4 arguing that they never appointed the respondent as agent or counsel. Attached to the motion were thefollowing documents: 1) a Lette r5 dated 19 December 1994 signed by Herman Ponce and Julie Abad on behalf ofIsabela Sugar Company, Inc. (ISCI), the original owner of the subject property; 2) an unsigned Lette r6 dated 7December 1994 addressed to Corazon Bejasa from Marilyn G. Ong; 3) a Lette r7 dated 9 December 1994 addressed toTeodoro Borlongan, Jr. and signed by Marilyn G. Ong; and 4) a Memorandum 8dated 20 November 1994 from EnriqueMontilla III. Said documents were presented in an attempt to show that the respondent was appointed as agent byISCI and not by Urban Bank or by the petitioners.In view of the introduction of the above-mentioned documents, Atty. Pea filed his Complaint-Affidavi t9 with theOffice of the City Prosecutor, Bago City.10 He claimed that said documents were falsified because the allegedsignatories did not actually affix their signatures, and the signatories were neither stockholders nor officers andemployees of ISCI.11 Worse, petitioners introduced said documents as evidence before the RTC knowing that theywere falsified.In a Resolution12 dated 24 September 1998, the City Prosecutor found probable cause for the indictment ofpetitioners for four (4) counts of the crime of Introducing Falsified Documents, penalized by the second paragraph ofArticle 172 of the Revised Penal Code. The City Prosecutor concluded that the documents were falsified because thealleged signatories untruthfully stated that ISCI was the principal of the respondent; that petitioners knew that thedocuments were falsified considering that the signatories were mere dummies; and that the documents formed partof the record of Civil Case No. 754 where they were used by petitioners as evidence in support of their motion todismiss, and then adopted in their answer and in their Pre-Trial Brief .13 Subsequently, the correspondingInformations14 were filed with the MTCC, Bago City. The cases were docketed as Criminal Case Nos. 6683, 6684, 6685,and 6686. Thereafter, Judge Primitivo Blanca issued the warrant s15 for the arrest of the petitioners.On 1 October 1998, petitioners filed an Omnibus Motion to Quash, Recall Warrants of Arrest and/or ForReinvestigation .16 Petitioners insisted that they were denied due process because of the non-observance of theproper procedure on preliminary investigation prescribed in the Rules of Court. Specifically, they claimed that theywere not afforded the right to submit their counter-affidavit. Then they argued that since no such counter-affidavitand supporting documents were submitted by the petitioners, the trial judge merely relied on the complaint-affidavitand attachments of the respondent in issuing the warrants of arrest, also in contravention with the Rules of Court.Petitioners further prayed that the information be quashed for lack of probable cause. Moreover, one of the accused,i.e., Ben Lim, Jr., is not even a director of Urban Bank, contrary to what complainant stated. Lastly, petitioners positedthat the criminal cases should have been suspended on the ground that the issue being threshed out in the civil caseis a prejudicial question.In an Order17 dated 13 November 1998, the MTCC denied the omnibus motion primarily on the ground thatpreliminary investigation was not available in the instant case which fell within the jurisdiction of the first-levelcourt. The court, likewise, upheld the validity of the warrant of arrest, saying that it was issued in accordance with theRules of Court. Besides, the court added, petitioners could no longer question the validity of the warrant since theyalready posted bail. The court also believed that the issue involved in the civil case was not a prejudicial question,and, thus, denied the prayer for suspension of the criminal proceedings. Lastly, the court was convinced that theInformations contained all the facts necessary to constitute an offense.Petitioners immediately instituted a special civil action for Certiorari and Prohibition with Prayer for Writ ofPreliminary Injunction and Temporary Restraining Order (TRO) before the Court of Appeals, ascribing grave abuse of

discretion amounting to lack or excess of jurisdiction on the part of the MTCC in issuing and not recalling the warrantsof arrest, reiterating the arguments in their omnibus motion .18 They, likewise, questioned the courts conclusion thatby posting bail, petitioners already waived their right to assail the validity of the warrants of arrest.On 20 June 2000, the Court of Appeals dismissed the petition .19 Thus, petitioners filed the instant petition for reviewon certiorari under Rule 45 of the Rules of Court, raising the following issues:A.Where the offense charged in a criminal complaint is not cognizable by the Regional Trial Court and not covered bythe Rule on Summary Procedure, is the finding of probable cause required for the filing of an Information in court?If the allegations in the complaint-affidavit do not establish probable cause, should not the investigating prosecutordismiss the complaint, or at the very least, require the respondent to submit his counter-affidavit?B.Can a complaint-affidavit containing matters which are not within the personal knowledge of the complainant be

sufficient basis for the finding of probable cause?C.Where there is offense charged in a criminal complaint is not cognizable by the Regional Trial Court and not coveredby the Rule on Summary Procedure, and the record of the preliminary investigation does not show the existence ofprobable cause, should not the judge refuse to issue a warrant of arrest and dismiss the criminal case, or at the veryleast, require the accused to submit his counter-affidavit in order to aid the judge in determining the existence ofprobable cause?D.Can a criminal prosecution be restrained?E.Can this Honorable Court itself determine the existence of probable cause ?20
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On the other hand, respondent contends that the issues raised by the petitioners had already become moot andacademic when the latter posted bail and were already arraigned.On 2 August 2000, this Court issued a TRO21 enjoining the judge of the MTCC from proceeding in any manner withCriminal Case Nos. 6683 to 6686, effective during the entire period that the case is pending before, or until furtherorders of, this Court.We will first discuss the issue of mootness.The issues raised by the petitioners have not been mooted by the fact that they had posted bail and were alreadyarraigned.It appears from the records that upon the issuance of the warrant of arrest, petitioners immediately posted bail asthey wanted to avoid embarrassment, being then the officers of Urban Bank. On the scheduled date for thearraignment, despite the petitioners refusal to enter a plea, the court a quo entered a plea of "Not Guilty" for them. The erstwhile ruling of this Court was that posting of bail constitutes a waiver of any irregularity in the issuance of awarrant of arrest, that has already been superseded by Section 26, Rule 114 of the Revised Rule of CriminalProcedure. The principle that the accused is precluded from questioning the legality of the arrest after arraignment istrue only if he voluntarily enters his plea and participates during trial, without previously invoking his objectionsthereto .22 As held in Okabe v. Hon. Gutierrez :23 It bears stressing that Section 26, Rule 114 of the Revised Rules on Criminal Procedure is a new one, intended tomodify previous rulings of this Court that an application for bail or the admission to bail by the accused shall beconsidered as a waiver of his right to assail the warrant issued for his arrest on the legalities or irregularities thereon.The new rule has reverted to the ruling of this Court in People v. Red . The new rule is curative in nature becauseprecisely, it was designed to supply defects and curb evils in procedural rules. Hence, the rules governing curativestatutes are applicable. Curative statutes are by their essence retroactive in application. Besides, procedural rules as ageneral rule operate retroactively, even without express provisions to that effect, to cases pending at the time oftheir effectivity, in other words to actions yet undetermined at the time of their effectivity. Before the appellate courtrendered its decision on January 31, 2001, the Revised Rules on Criminal Procedure was already in effect. It behovedthe appellate court to have applied the same in resolving the petitioners petition for certiorari and her motion forpartial reconsideration. 1avvphi1 Moreover, considering the conduct of the petitioner after posting her personal bail bond, it cannot be argued that shewaived her right to question the finding of probable cause and to assail the warrant of arrest issued against her by therespondent judge. There must be clear and convincing proof that the petitioner had an actual intention to relinquishher right to question the existence of probable cause. When the only proof of intention rests on what a party does,his act should be so manifestly consistent with, and indicative of, an intent to voluntarily and unequivocally relinquishthe particular right that no other explanation of his conduct is possible. x x x.Herein petitioners filed the Omnibus Motion to Quash, Recall Warrants of Arrest and/or For Reinvestigation on thesame day that they posted bail. Their bail bonds likewise expressly contained a stipulation that they were not waivingtheir right to question the validity of their arrest .24 On the date of their arraignment, petitioners refused to enter theirplea due to the fact that the issue on the legality of their arrest is still pending with the Court. Thus, when the court aquo entered a plea of not guilty for them, there was no valid waiver of their right to preclude them from raising thesame with the Court of Appeals or this Court. The posting of bail bond was a matter of imperative necessity to averttheir incarceration; it should not be deemed as a waiver of their right to assail their arrest. The ruling to which wehave returned in People v. Re d 25 stated:x x x The present defendants were arrested towards the end of January, 1929, on the Island and Province ofMarinduque by order of the judge of the Court of First Instance of Lucena, Tayabas, at a time when there were no

court sessions being held in Marinduque. In view of these circumstances and the number of the accused, it mayproperly be held that the furnishing of the bond was prompted by the sheer necessity of not remaining in detention,and in no way implied their waiver of any right, such as the summary examination of the case before their detention.That they had no intention of waiving this right is clear from their motion of January 23, 1929, the same day on whichthey furnished a bond, and the fact that they renewed this petition on February 23, 1929, praying for the stay of theirarrest for lack of the summary examination; the first motion being denied by the court on January 24, 1929 (G.R. No.33708, page 8), and the second remaining undecided, but with an order to have it presented in Boac, Marinduque.Therefore, the defendants herein cannot be said to have waived the right granted to them by section 13, GeneralOrder No. 58, as amended by Act No. 3042.The rest of the issues raised by the petitioners may be grouped into two, which are: (1) the procedural aspect, i.e.,whether the prosecution and the court a quo properly observed the required procedure in the instant case, and, (2)the substantive aspect, which is whether there was probable cause to pursue the criminal cases to trial.

The procedural aspect:Petitioners contend that they were denied due process as they were unable to submit their counter-affidavits andwere not accorded the right to a preliminary investigation. Considering that the complaint of Atty. Pea was filed inSeptember 1998, the rule then applicable was the 1985 Rules of Criminal Procedure.The provisions of the 1985 Rules of Criminal Procedure relevant to the issue are Sections 1, 3(a) and 9(a) of Rule 112,to wit:Section 1. Definition. Preliminary investigation is an inquiry or proceeding for the purpose of determining whetherthere is sufficient ground to engender a well founded belief that a crime cognizable by the Regional Trial Court hasbeen committed and that the respondent is probably guilty thereof, and should be held for trial.
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Sec. 3. Procedure. Except as provided for in Section 7 hereof, no complaint or information for an offense cognizableby the Regional Trial Court shall be filed without a preliminary investigation having been first conducted in thefollowing manner:(a) The complaint shall state the known address of the respondent and be accompanied by affidavits of thecomplainant and his witnesses as well as other supporting documents, in such number of copies as there arerespondents, plus two (2) copies for the official file. The said affidavits shall be sworn to before any fiscal, stateprosecutor or government official authorized to administer oath, or, in their absence or unavailability, a notary public,who must certify that he personally examined the affiants and that he is satisfied that they voluntarily executed andunderstood their affidavits.Sec. 9. Cases not falling under the original jurisdiction of the Regional Trial Courts nor covered by the Rule onSummary Procedure.(a) Where filed with the fiscal. If the complaint is filed directly with the fiscal or state prosecutor, the procedureoutlined in Section 3(a) of this Rule shall be observed. The fiscal shall take appropriate action based on the affidavitsand other supporting documents submitted by the complainant. (underscoring supplied)The crime to which petitioners were charged was defined and penalized under second paragraph of Article 172 inrelation to Article 171 of the Revised Penal Code.Art. 172. Falsification by private individual and use of falsified documents. The penalty of prision correccional in itsmedium and maximum periods and a fine of not more than P5,000 pesos shall be imposed upon:1. Any private individual who shall commit any of the falsifications enumerated in the next preceding article in anypublic or official document or letter of exchange or any other kind of commercial document; and2. Any person who, to the damage of a third party, or with the intent to cause such damage, shall in any privatedocument commit any of the acts of falsification enumerated in the next preceding article.Any person who shall knowingly introduce in evidence in any judicial proceeding or to the damage of another or who,with the intent to cause such damage, shall use any of the false documents embraced in the next preceding article orin any of the foregoing subdivisions of this article, shall be punished by the penalty next lower in degree.Prision correccional in its medium and maximum periods translates to imprisonment of 2 years, 4 months and 1day.26 The next lower in degree to prision correccional is arresto mayor in its maximum period to prision correccionalin its minimum period which translates to 4 months and 1 day to 2 years and 4 month s27 of imprisonment. Since thecrime committed is not covered by the Rules of Summary Procedure ,28 the case falls within the exclusive jurisdictionof the first level courts but applying the ordinary rules. In such instance, preliminary investigation as defined inSection 1, Rule 112 of the 1985 Rules of Criminal Procedure is not applicable since such section covers only crimescognizable by the RTC. That which is stated in Section 9(a) is the applicable rule.Under this Rule, while probable cause should first be determined before an information may be filed in court, theprosecutor is not mandated to require the respondent to submit his counter-affidavits to oppose the complaint. Inthe determination of probable cause, the prosecutor may solely rely on the complaint, affidavits and other supportingdocuments submitted by the complainant. If he does not find probable cause, the prosecutor may dismiss outrightthe complaint or if he finds probable cause or sufficient reason to proceed with the case, he shall issue a resolutionand file the corresponding information.The complaint of respondent, verbatim, is as follows:COMPLAINT AFFIDAVITI, MAGDALENO M. PEA, Filipino, of legal age, with address at Brgy. Ubay, Pulupandan, Negros Occidental, afterhaving been sworn in accordance with law hereby depose and state:1. I am the Plaintiff in Civil Case No. 754 pending with the Regional Trial Court of Bago City entitled "Atty. MagdalenoM. Pea v. Urban Bank, et al" Impleaded the

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