[G.R. NO. 156337 : September 28, 2007]
UNITED COCONUT PLANTERS BANK, Petitioner, v. ALBERTO T. LOOYUKO and JIMMY T. GO, Respondents.
D E C I S I O N
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1 of the Court of Appeals (CA) dated March 15, 2002 and its Resolution2 of November 29, 2002 in CA-G.R. SP No. 62626.
The present petition originated from a Complaint-Affidavit filed with the Makati City Prosecutor's Office by Angelo Manahan and Francisco Zarate, Senior Vice-President and First Vice-President, respectively, of herein petitioner United Coconut Planters Bank (UCPB) accusing respondents Alberto T. Looyuko (Looyuko) and Jimmy T. Go (Go) of violation of Article 315 (1-b) of the Revised Penal Code (RPC), in relation to Section 13 of Presidential Decree (P.D.) No. 115, otherwise known as the Trust Receipts Law.
After preliminary investigation was conducted, the investigating prosecutor issued a Resolution dated February 16, 2000, recommending the dismissal of the complaint against respondents for insufficiency of evidence. The Assistant Chief State Prosecutor, Officer-in-Charge approved the recommendation on February 22, 2000.
On a motion for reconsideration filed by UCPB, the Assistant Chief State Prosecutor approved the Resolution dated April 10, 2000 of the same investigating prosecutor recommending the filing of an Information for Estafa against herein respondents.
Accordingly, an Information for Estafa under Article 315, paragraph 1(b) of the RPC, in relation to P.D. No. 115 was filed against herein respondents with the Regional Trial Court (RTC) of Makati City.
Looyuko then filed a Petition for Review with the Department of Justice (DOJ) assailing the April 10, 2000 Resolution of the Makati City Prosecutor's Office. On the other hand, Go filed a Motion for Reinvestigation with the RTC of Makati City.
On August 29, 2000, then DOJ Secretary Artemio G. Tuquero issued a Resolution with the following dispositive portion:
WHEREFORE, the assailed resolution is hereby REVERSED and SET ASIDE. The City Prosecutor of Makati City is hereby directed to move for the withdrawal of the information for estafa against respondents Alberto T. Looyuko and Jimmy T. Go filed before the Regional Trial Court, Branch 139, Makati City.
UCPB filed a Motion for Reconsideration but the same was denied by the DOJ Secretary in his Resolution of November 9, 2000.
In the meantime, the Makati City Prosecutor's Office filed an Ex-Parte Motion to Withdraw Information dated September 14, 2000.4
Thereafter, UCPB filed a Petition for Certiorari and Prohibition in the CA seeking to nullify the DOJ Secretary's Resolutions dated August 29, 2000 and November 9, 2000 for having been rendered with grave abuse of discretion.
In a Decision dated March 15, 2002, the CA denied the Petition for Certiorari holding that the DOJ Secretary did not commit grave abuse of discretion in ruling against the existence of probable cause to prosecute respondents.
UCPB filed a Motion for Reconsideration but the same was denied in a Resolution of the CA dated November 29, 2002.
Hence, herein petition based on the following grounds:
THE COURT OF APPEALS
(A) DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE;
(B) SANCTIONED THE SECRETARY OF JUSTICE'S DEPARTURE FROM THE ACCEPTED COURSE OF PROCEEDINGS; AND
(C) SERIOUSLY ERRED IN NOT FINDING THAT THE DOJ SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION.
THE DOJ SECRETARY CAPRICIOUSLY AND WHIMSICALLY DISREGARDED THE EVIDENCE ON RECORD, AND INSTEAD ARBITRARILY RULED BASED ON BARE ALLEGATIONS CONTRARY NOT ONLY TO THE EVIDENCE PRESENTED, BUT LOOYUKO'S OWN SWORN STATEMENTS
THE DOJ SECRETARY VIOLATED UCPB'S RIGHT TO PROCEDURAL DUE PROCESS
THE DOJ SECRETARY COMMITTED GRAVE ABUSE OF DISCRETION IN ACCEPTING AS TRUTH WHAT WERE MATTERS OF DEFENSE WHICH SHOULD HAVE BEEN PROVEN AT TRIAL.5
Petitioner contends that the conclusions arrived at by the DOJ Secretary in his assailed Resolutions are based on mere allegations which were not proven by respondents. Petitioner asserts that there is no evidence to prove that: (a) respondent Looyuko offered to return the goods subject of the trust receipt and that petitioner refused to accept such offer; and (b) there is a new loan granted by petitioner which extinguished Looyuko's obligation under the trust receipt.
Petitioner also contends that the CA erred in simply relying on the general rule that certiorari is not available to correct the evaluation of evidence or factual findings of the DOJ Secretary. Petitioner argues that an established exception to this rule is when a board, tribunal or officer performing a judicial or quasi-judicial function fails to consider evidence adduced by the parties; or acts capriciously and whimsically, in total disregard of evidence material to or decisive of the controversy. Petitioner claims that, in the present case, the DOJ Secretary's act of totally disregarding the facts and evidence presented amount to grave abuse of discretion and it was an error on the part of the CA to rule otherwise.
Petitioner further argues that the DOJ Secretary violated its right to procedural due process when he failed to consider the evidence presented by petitioner; that his conclusions are not supported by any evidence but are mere allegations of respondent Looyuko.
Petitioner avers that the DOJ Secretary committed grave abuse of discretion in accepting the allegations of respondent Looyuko as truth when they have no evidentiary basis and they are consistently denied by petitioner. Petitioner contends that the allegations of Looyuko are matters of defense which should be proven during trial.
In his Comment and Memorandum, respondent Looyuko's sole contention is that the issues raised in the present petition entail a review of the factual findings of the DOJ and the CA, which is proscribed in a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Respondent Go echoes the argument of his co-respondent that the re-evaluation of evidence is beyond the province of a Petition for Review on Certiorari under Rule 45 of the Rules of Court. In addition, Go asserts that the CA did not err in dismissing the Petition for Certiorari filed by petitioner, because the latter seeks the re-examination of the evidence presented by the opposing parties; whereas the sole office of a writ of certiorari is the correction of errors of jurisdiction, including the commission of grave abuse of discretion amounting to lack of jurisdiction, and does not include the review of DOJ Secretary's evaluation of the evidence and his factual findings thereon.
Go also contends that the determination of probable cause is an executive function and it is the policy of the Court to refrain from interfering in the conduct of preliminary investigations and to leave the DOJ ample latitude of discretion in the determination of what constitutes sufficient evidence to establish probable cause for the prosecution of supposed offenders.
The Court finds the petition meritorious.
At the outset, it bears to reiterate the settled rule that under the 1997 Rules of Civil Procedure, as amended, only questions of law may be raised in a Petition for Review before this Court.6 However, this Rule is not absolute; it admits of exceptions, such as: (1) when the findings of a trial court are grounded entirely on speculation, surmises or conjectures; (2) when a lower court's inference from its factual findings is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion in the appreciation of facts; (4) when the findings of the appellate court go beyond the issues of the case, run contrary to the admissions of the parties to the case, or fail to notice certain relevant facts which, if properly considered, will justify a different conclusion; (5) when there is a misappreciation of facts; (6) when the findings of fact are conclusions without mention of the specific evidence on which they are based, are premised on the absence of evidence, or are contradicted by evidence on record.7 This Court finds that the present case falls under the third and sixth exceptions for reasons discussed hereunder.
The pivotal question to be resolved in the present petition is whether or not the CA erred in concluding that the DOJ Secretary did not commit grave abuse of discretion in issuing his Resolutions of August 29, 2000 and November 9, 2000.
In its Petition for Certiorari filed with the CA, herein petitioner's main contention is that there is no evidence to prove the conclusions reached by the DOJ Secretary. The CA dismissed the petition and ruled as follows:
The subject resolutions of public respondent [DOJ Secretary] embody his own findings in the exercise of his official functions on whether or not there was sufficient evidence adduced to warrant the filing of criminal charges against private respondents.
His finding that private respondents are not criminally liable involves his assessment and evaluation of both parties' evidence and his interpretation and application of the law to what he deems to be facts in the process of determining probable cause for the criminal prosecution of persons.
The present petition cannot thus prosper for the extraordinary remedy of a special civil action for certiorari is available only and restrictively in those truly exceptional cases wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. For the sole office of the writ of certiorari is the correction of errors of jurisdiction and does not include correction of the evaluation of the evidence and factual findings based thereon (Flores v. National Labor Relations Commission, 253 SCRA 494  or of erroneous conclusions of law or fact (Tensorex Industrial Corporation v. Court of Appeals, 316 SCRA 471 ) which is what petitioner attempts to do in the petition at bench.8
It is true that the sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack of jurisdiction, and does not include a correction of public respondent's evaluation of the evidence and factual findings thereon.9
However, it is sometimes necessary to delve into factual issues in order to resolve allegations of grave abuse of discretion as a ground for the special civil action of certiorari and prohibition.10 In Filadams Pharma, Inc. v. CA,11 one of the issues resolved by this Court was whether or not the DOJ committed grave abuse of discretion in affirming the dismissal of therein petitioner's complaint-affidavit. In resolving said issue, the Court proceeded to determine factual and evidentiary matters in order to ascertain whether there was probable cause warranting the filing of information for estafa against the private respondent therein. In the same manner, in NBI-Microsoft Corporation v. Hwang,12 this Court, in resolving whether the DOJ acted with grave abuse of discretion in not finding probable cause to charge therein respondents with copyright infringement and unfair competition, proceeded to determine the sufficiency of evidence to support a finding of probable cause against said respondents.
In reviewing the findings of the DOJ in preliminary investigations, the settled rule is that the determination of probable cause for the filing of an Information in court is an executive function, one that properly pertains at the first instance to the public prosecutor and, ultimately, to the Secretary of Justice.13 For this reason, the Court considers it sound judicial policy to refrain from interfering in the conduct of preliminary investigations and to leave the DOJ ample latitude of discretion in the determination of what constitutes sufficient evidence to establish probable cause for the prosecution of supposed offenders.14 Consistent with this policy, courts do not reverse the Secretary of Justice's findings and conclusions on the matter of probable cause except in clear cases of grave abuse of discretion.15
In other words, judicial review of the resolution of the Secretary of Justice is limited to a determination of whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction considering that full discretionary authority has been delegated to the executive branch in the determination of probable cause during a preliminary investigation.16 Courts are not empowered to substitute their judgment for that of the executive branch; it may, however, look into the question of whether such exercise has been made in grave abuse of discretion.17
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.18 The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.19
Grave abuse of discretion refers not merely to palpable errors of jurisdiction; or to violations of the Constitution, the law and jurisprudence.20 It refers also to cases in which, for various reasons, there has been a gross misapprehension of facts.21
In the present case, this Court finds it necessary to examine the reasons of the DOJ Secretary in directing the City Prosecutor of Makati to move for the withdrawal of the information for estafa against herein respondents before the RTC of Makati City because such examination is determinative of whether or not the DOJ Secretary committed grave abuse of discretion.
The findings and conclusion of the DOJ Secretary, as embodied in his August 29, 2000 Resolution, are as follows:
x x x
UCPB is a corporation engaged in the business of banking. Through its senior vice president Angelo V. Manahan, it alleges that respondent Looyuko represented himself as the sole proprietor or owner of Noah's Ark Sugar Refinery (Noah) engaged in the business of sugar milling. Noah is part of the Noah's Group of Companies (Noah's Group) also owned by respondent Looyuko. Respondent Go is Noah's general manager.
On July 28, 1995, UCPB and Noah's Group entered into a credit agreement where the former granted to the latter a letter of credit/trust receipt line. Under the said agreement, Noah's group can avail of a principal amount not exceeding
P50 million with a corresponding obligation to reimburse UCPB whatever amount it may pay under the credit/trust receipt line. The trust receipt has a term of sixty (60) days. The agreement further provided that all obligations of Noah's Group shall be performed or paid to UCPB at its head office when due in accordance with the terms of the notes or instruments applicable to the availment, without need of demand.
In a letter agreement dated September 17, 1996, UCPB and Noah's Group renewed the credit agreement making it valid until August 31, 1997 for
P175.0 million for the purpose of financing the purchase of raw sugar. On July 3, 1997, respondent Looyuko or Noah availed of the letter of credit/trust receipt facility under the agreement. UCPB opened a letter of credit for US$82,280.00 on behalf of respondent Looyuko or Noah to finance the importation of forty (40) metric tons of granular activated carbon, type can cal. On August 25, 1997, the letter of credit was drawn against UCPB and it paid the amount of US$82,280.00 to its correspondent bank. Respondents accordingly received and took possession of the goods. On August 27, 1997, in Makati City, respondents executed a trust receipt to secure the payment to UCPB of the amount advanced on the letter of credit and to document their custody of the goods as trustees. Under the terms of the credit agreement, letter-agreement and trust receipt, respondents were under obligation to pay the amount advanced by UCPB on the letter of credit on or before May 25, 1998 which was later extended to July 31, 1998 upon agreement of the parties.
Respondents failed to pay their indebtedness on the due date. They also failed to deliver on the due date the proceeds of the sale of the goods either in their original or manufactured form, or to return the goods in their original or manufactured state. Demands were made on respondents but to date, respondents have not paid the amount advanced on the letter of credit or delivered the sales of the goods in original or manufactured form, or to return the goods in whatever form, to the damage and prejudice of UCPB.
x x x
In the case at bar, we are convinced that respondents did not commit the offense charged. While it is true that respondent Looyuko executed a trust receipt, the mere execution thereof does not make him liable. It sufficiently appears on record that respondent Looyuko has offered to return the goods that were the subject of the trust but his offer was not accepted by complainant UCPB which instead gave him a loan secured by a real estate mortgage. The proceeds of this loan were applied to discharge respondent Looyuko's obligation under the trust receipt. Such being the case, it can not be said that respondent Looyuko converted or misappropriated the subject goods or the proceeds of the sale thereof to the damage and prejudice of complainant UCPB. Without such conversion or misappropriation, there can be no consequent damage or prejudice to complainant UCPB. Without such conversion or misappropriation, there can be no consequent damage or prejudice to complainant UCPB. This being the case, a criminal complaint for estafa against respondents must necessarily fail.22
The Court agrees with petitioner that the DOJ Secretary failed to cite any evidence to support his conclusions: (1) that respondent Looyuko offered to return the goods that were the subject of the trust but his offer was not accepted by UCPB; (2) instead, UCPB gave Looyuko a loan secured by a real estate mortgage; and (3) the proceeds of the loan were applied to discharge Looyuko's obligation under the trust receipt. After a careful review of the records of this case, the Court finds no evidence that would prove the above-mentioned conclusions of the DOJ Secretary.
Respondents, themselves, while insisting that the DOJ Secretary did not commit grave abuse of discretion in issuing the assailed Resolutions of August 29, 2000 and November 9, 2000, failed to cite any evidence to buttress or substantiate the conclusions of the DOJ Secretary in their favor. They could have easily attached to any of the pleadings they have filed before this Court documents showing that respondent Looyuko indeed offered to return the goods subject of the trust receipt, but that his offer was not accepted by UCPB; instead, UCPB extended a loan to Looyuko, secured by a real estate mortgage, and the proceeds of the loan were used to discharge Looyuko's obligation under the trust receipt.
On the other hand, petitioner was able to present documentary evidence to prove the allegations in its complaint, such as the Credit Agreement entered into with respondent Go for an Omnibus Line of
P175,000,000.00,23 the Surety Agreement executed by respondents,24 and the Trust Receipt dated August 27, 1997.25
Respondents are being charged with estafa as defined under Article 315 (1-b) of the RPC, in relation to Section 13 of P.D. No. 115.
Section 13 of P.D. No. 115 provides:
Sec. 13. Penalty clause. - The failure of an entrustee to turn over the proceeds of the sale of the goods, documents or instruments covered by a trust receipt to the extent of the amount owing to the entruster or as appears in the trust receipt or to return said goods, documents or instruments if they were not sold or disposed of in accordance with the terms of the trust receipt shall constitute the crime of estafa, punishable under the provisions of Article Three Hundred and Fifteen, Paragraph One (b) of Act Numbered Three Thousand Eight Hundred and Fifteen, as amended, otherwise known as the Revised Penal Code. If the violation or offense is committed by a corporation, partnership, association or other juridical entities, the penalty provided for in this Decree shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense, without prejudice to the civil liabilities arising from the criminal offense.
Jurisprudence provides that the Trust Receipts Law is violated whenever the entrustee fails to: (1) turn over the proceeds of the sale of the goods, or (2) return the goods covered by the trust receipts if the goods are not sold.26 The mere failure to account or return gives rise to the crime which is malum prohibitum.27 There is no requirement to prove intent to defraud.28
On the other hand, the elements of estafa under Article 315 (1-b) of the RPC are as follows: (1) that money, goods, or other personal properties are received by the offender in trust, or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return, the same; (2) that there is a misappropriation or conversion of such money or property by the offender or denial on his part of such receipt; (3) that such misappropriation or conversion or denial is to the prejudice of another; and, (4) that there is a demand made by the offended party on the offender.29 Moreover, it is a settled rule that failure to account upon demand, for funds or property held in trust, is circumstantial evidence of misappropriation.30
On the basis of the above-quoted findings of the DOJ Secretary, coupled with the documented allegations of petitioner in its complaint-affidavit, as well as the failure of respondents to substantiate their defenses, it appears that there exists a sufficient ground to engender a well-founded belief that the crime of estafa as defined under Article 315 (1-b), in relation to Section 13 of P.D. No. 115, has been committed; and that the respondents are probably guilty thereof and should be held for trial. Hence, the DOJ Secretary committed grave abuse of discretion in directing the withdrawal of the information for estafa filed against them.
A preliminary investigation is essentially inquisitorial, and its function is merely to determine the existence of probable cause.31 Probable cause has been defined as "the existence of such fact and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecution, that the person charged was guilty of the crime for which he was prosecuted."32 The term does not mean actual and positive cause nor does it import absolute certainty.33 It is merely based on opinion and reasonable belief.34 Thus, a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction.35 It is enough that it is believed that the act or omission complained of constitutes the offense charged.36 Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge.37
The Court notes that the parties, in their respective pleadings filed before this Court, are ventilating the merits of their respective causes and defenses. This is not the occasion for the full and exhaustive display of their evidence.38 The presence or absence of the elements of the crime is evidentiary in nature and is a matter of defense that may be passed upon after a full-blown trial on the merits.39 In fine, the validity and merits of a party's defense or accusation, as well as admissibility of testimonies and evidence, are better ventilated during trial proper than at the preliminary investigation level.40 As earlier stated, this Court's task in the present petition is only to determine if the CA erred in concluding that the Secretary of Justice did not commit grave abuse of discretion in issuing his assailed resolutions. Having resolved this issue, the Court finds no cogent reason to discuss the other matters raised in the present petition.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated March 15, 2002 finding no grave abuse of discretion on the part of the Secretary of Justice, and its Resolution dated November 29, 2002, denying petitioner's Motion for Reconsideration, are hereby REVERSED and SET ASIDE.
The Resolution of the Secretary of Justice dated August 29, 2000, directing the City Prosecutor of Makati to move for the withdrawal of the information for estafa against respondents, and his November 9, 2000 Resolution, denying petitioner's Motion for Reconsideration, are REVERSED and SET ASIDE for having been issued with grave abuse of discretion; and the Resolution of the Makati City Prosecutor's Office dated April 10, 2000, finding probable cause against herein respondents, is REINSTATED.
1 Penned by Justice Conchita Carpio-Morales (now a member of this Court) and concurred in by Justices Martin S. Villarama, Jr. and Sergio L. PestaÃ±o; rollo, pp. 55-60.
2 Penned by Justice Sergio L. PestaÃ±o and concurred in by Justices Martin S. Villarama, Jr. and Eliezer R. delos Santos; id. at 63.
3 Rollo, p. 166.
4 Petitioner avers that as of the filing of the instant petition, the Ex-Parte Motion to Withdraw Information remains unresolved, as the RTC of Makati City, Branch 58, per its Order of July 27, 2001, suspended all proceedings before it pending the final outcome of the Petition for Certiorari filed by petitioner with the CA.
5 Rollo, p. 27.
6 Philippine Rabbit Bus Lines, Inc. v. Macalinao, G.R. No. 141856, February 11, 2005, 451 SCRA 63, 69.
7 Ilao-Quianay v. Mapile, G.R. No. 154087, October 25, 2005, 474 SCRA 246, 253.
8 CA rollo, p. 261.
9 Microsoft Corporation v. Best Deal Computer Center Corporation, 438 Phil. 408, 413 (2002).
10 Balba v. Peak Development, Inc., G.R. No. 148288, August 12, 2005, 466 SCRA 604, 614.
11 G.R. No. 132422, March 30, 2004, 426 SCRA 460.
12 G.R. No. 147043, June 21, 2005, 460 SCRA 428.
13 First Women's Credit Corporation v. Perez, G.R. No. 169026, June 15, 2006, 490 SCRA 774, 777.
16 Metropolitan Bank & Trust Co. v. Tonda, 392 Phil. 797, 814 (2000).
18 Rimbunan Hijau Group of Companies v. Oriental Wood Processing Corporation, G.R. No. 152228, September 23, 2005, 470 SCRA 650, 661.
20 Presidential Commission on Good Government v. Desierto, 445 Phil. 154, 175 (2003).
22 Rollo, p. 163-166.
23 Id. at 64.
24 Id. at 72.
25 Id. at. 78.
26 Ong v. Court of Appeals, 449 Phil. 691, 704 (2003).
29 Libuit v. People of the Philippines, G.R. No. 154363, September 13, 2005, 469 SCRA 610, 616.
30 Lee v. People of the Philippines, G.R. No.157781, April 11, 2005, 455 SCRA 256, 267.
31 Garcia-Rueda v. Pascasio, 344 Phil. 323, 330 (1997).
34 Id. at 330-331.
35 Id. at 331.
38 Andres v. Cuevas, G.R. No. 150869, June 9, 2005, 460 SCRA 38, 52.
40 Id. at 53.