LIGAYA P. CRUZ,
- versus -
HON. RAUL M. GONZALEZ,
ETC., DEVELOPMENT BANK
OF THE PHILIPPINES, and
COURT OF APPEALS.
G.R. No. 173844
April 11, 2012
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D E C I S I O N
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to nullify the 17 January 2006 decision of the Court of Appeals (CA) in CA-G.R. SP No. 88828. The CA decision held that petitioner failed to show grave abuse of discretion amounting to lack of or in excess of jurisdiction on the part of the Secretary of Justice in ordering the filing against the petitioner of forty (40) counts of estafa.
Culled from the records are the following antecedent facts:
On 27 January 1994, Hermosa Savings and Loans Bank, Inc. (HSLBI) availed of forty (40) loans from the Development Bank of the Philippines (DBP) pursuant to a Subsidiary Loan Agreement. In support of the loan agreement and applications, HSLBI, through bank officers Benjamin J. Cruz, Rodolfo C. Buenaventura, Librada Y. Dio, Nilda S. Fajardo, Lelaine V. Fernandez and Atty. Ligaya P. Cruz, herein petitioner, as its legal counsel, submitted the required documents, i.e. project evaluation reports, financial package approval, deeds of undertaking, certificates of registration, promissory notes, supplemental deeds of assignment and Investment Enterprise/sub-borrowers’ consent. These documents were submitted to assure DBP that the respective Investment Enterprises were actually existing and duly registered with the government; that the subsidiary loan will be exclusively used for relending to these Investment Enterprises and for the purposes stated in the applications; and that the concerned Investment Enterprises are amenable to the assignment of debt in favor of HSLBI.
On 31 March 2001, the Bangko Sentral ng Pilipinas (BSP) conducted an examination of HSLBI’s loan portfolio. The BSP found out that most of HSLBI’s loan documents were either forged or inexistent. In particular, the Transfer Certificates of Title (TCTs) of properties submitted as collaterals were found to be inexistent, registered in another person’s name, or already foreclosed/mortgaged to another bank. The annotations on the TCTs in favor of HSLBI were also inexistent. Likewise, the signatures of sub-borrowers/Investment Enterprises appearing on documents were all forged. Worst, the BSP discovered that the credit accounts assigned to DBP were in the names of non-existing Investment Enterprises.
Thus, on 19 December 2001, DBP filed a complaint for forty (40) counts of estafa through falsification of commercial documents or for large scale fraud or violation of Articles 315, 316(4) [as amended by Presidential Decree (P.D.) No. 1689] and 318 of the Revised Penal Code (RPC) against the aforementioned officers of HSLBI and herein petitioner Atty. Ligaya P. Cruz (Atty. Cruz).
Atty. Cruz was included in the complaint for the reason that she, as in-house legal counsel of HSLBI, rendered an opinion that all the purported Investment Enterprises were duly organized, validly existing and in good standing under Philippine laws and that they have full legal rights, power and authority to carry on their present business and for notarizing two deeds of assignment utilized as supporting documents.
In a Joint Resolution dated 18 November 2002, State Prosecutors Maria Regina Tordilla-Castillo and Melvin J. Abad recommended the filing of informations for forty (40) counts of estafa under Article 315, paragraph 2(a) of the RPC in relation to P.D. 1689 against the respondent bank officers and herein petitioner.
On 11 February 2003, the respondents in the complaint, including herein petitioner, filed a petition for review before the Department of Justice (DOJ) assailing the Joint Resolution.
In a Resolution dated 30 April 2003, then Undersecretary of the DOJ, Ma. Merceditas N. Gutierrez, dismissed the petition for review.
On 15 May 2003, respondents filed a motion for reconsideration of the dismissal of their petition.
On 3 November 2003, then DOJ Secretary Simeon A. Datumanong, issued a resolution the dispositive portion of which reads:
WHEREFORE, the motion for reconsideration is GRANTED IN PART and the assailed resolution is MODIFIED accordingly. The complaint against respondent Atty. Ligaya Cruz is hereby DISMISSED for want of probable cause and the Chief State Prosecutor is hereby directed to file an information for violation of Art. 315, par. 2(a), Revised Penal Code, against respondents Benjamin Cruz, Rodolfo Buenaventura, Librada Dio, Nilda Fajardo and Lelaine Fernandez and to report the action taken hereon within ten (10) days from receipt hereof.
DBP, thereafter, filed a motion for reconsideration of the 3 November 2003 resolution.
By Resolution dated 27 January 2004, Acting Secretary Ma. Merceditas N. Gutierrez ordered the filing of informations for Estafa/Large Scale Fraud under Article 315, par. 2(a) of the RPC, as amended, in relation to P.D. 1689 against respondents. In the same resolution, she ordered the filing of informations against Atty. Cruz. The dispositive portion of the Resolution of 27 January 2004 reads:
WHEREFORE, the motion is hereby GRANTED. The resolution dated November 3, 2003 is hereby SET ASIDE. The Chief State Prosecutor is hereby directed to cause the reinstatement of the forty (40) Informations for estafa under Article 315, paragraph 2(a) of the Revised Penal Code, in relation to P.D. 1689 against respondents Benjamin J. Cruz, Rodolfo C. Buenaventura, Librada Y. Dio, Nilda S. Farjardo, Lelaine V. Fernandez and Atty. Ligaya P. Cruz, and to report to this Office the action taken within five (5) days from receipt hereof. (Emphasis in the original)
Respondents and herein petitioner moved for reconsideration.
In a Resolution dated 4 January 2005, Secretary Raul Gonzales partially granted their motion and ordered the filing against all respondents of informations only for forty (40) counts of estafa under Article 315, par. 2(a) of the RPC and not for large scale fraud under P.D. 1689. The dispositive portion reads:
WHEREFORE, given the foregoing, the motion for reconsideration is hereby GRANTED. The Resolution dated January 27, 2004 is SET ASIDE. The Chief State Prosecutor is directed to move for the withdrawal of the forty (40) informations for violation of PD 1689, if already filed, and to file instead separate informations for violation of Art. 315, par. 2(a), RPC against respondents Cruz, et. al. Report the action taken hereon within five (5) days from receipt hereof.
Undaunted, Atty. Cruz filed a petition for certiorari under Rule 65 of the Rules of Court before the CA seeking to nullify and set aside the 4 January 2005 resolution of the Secretary of Justice.
Hence, this appeal.
Essentially, the issue before us for resolution is whether the CA erred in sustaining the Secretary of Justice in its ruling that there is probable cause to indict petitioner Atty. Cruz.
Petitioner seeks the reversal of the resolution of the Secretary of Justice for allegedly being devoid of supporting evidence. She based her argument on the alleged conflicting resolutions of the Office of the Secretary of Justice. She argues that she should not be held liable for the offense since she only signed a pro-forma opinion prepared by the DBP and merely notarized the documents submitted by HSLBI to DBP. On their face, she found no indication of any irregularity or any taint of illegality on the documents she signed.
She also claims that HSLBI was duly accredited as a participating financial institution of DBP after complying with stringent conditions imposed by the latter. Such accreditation is allegedly reviewed and renewed annually and project visitations of the accounts of sub-borrowers of HSLBI are regularly conducted by the personnel of the DBP. Hence, if there were any questionable transactions or documents, the DBP, in the exercise of due diligence would have discovered these and taken proper actions thereon. She contends that HSLBI should not be made answerable for the failure of DBP to perform its responsibilities.
She further argues that even if she is held liable, her liability is only civil and not criminal in view of the creditor-debtor relationship between HSLBI and DBP.
The petition is bereft of merit.
Jurisprudence has established rules on the determination of probable cause. In the case of Galario v. Office of the Ombudsman, this Court held that:
xxx. [A] finding probable cause needs only to rest on evidence showing that more likely than not a crime has been committed and there is enough reason to believe that it was committed by the accused. It need not be based on clear and convincing evidence of guilt, neither on evidence establishing absolute certainty of guilt. A finding of probable cause merely binds over the suspect to stand trial. It is not a pronouncement of guilt.
The term does not mean “actual and positive cause” nor does it import absolute certainty. It is merely based on opinion and reasonable belief. x x x. Probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. (Italics in the original)
We affirm the CA decision in line with the principle of non-interference with the prerogative of the Secretary of Justice to review the resolutions of the public prosecutor in the determination of the existence of probable cause. For reasons of practicality, this Court, as a rule, does not interfere with the prosecutor’s determination of probable cause for otherwise, courts would be swamped with petitions to review the prosecutor’s findings in such investigations. In the absence of any showing that the Secretary of Justice committed manifest error, grave abuse of discretion or prejudice, courts will not disturb its findings. Moreover, this Court will decline to interfere when records show that the findings of probable cause is supported by evidence, law and jurisprudence.
In the instant case, the Secretary of Justice found sufficient evidence to indict petitioner. It was adequately established by DBP and found by the Secretary of Justice that the funds would not have been released pursuant to the subsidiary loan agreement if HSLBI had no sub-borrowers/Investment Enterprises to speak of. As it turned out, not only were the collaterals submitted inexistent, all the purported sub-borrowers/Investment Enterprises were also fictitious and inexistent. In fact, the signatures of the sub-borrowers and the supporting documents submitted to DBP by petitioner and her co-respondents were all forged. The findings of probable cause against petitioner was based on the document she issued entitled “Opinion of Counsel to the Participating Financial Institution,” to wit:
In connection therewith and in my capacity as such legal counsel for the PFI, I have reviewed all pertinent laws, rules and regulations of the Republic of the Philippines, and examined the originals or copies, photocopied, certified or otherwise identified to my satisfaction, of the Agreement, the promissory note executed by the PFI (the ‘Note’), the Deed of Assignment, and such documents, agreements, records and matters pertaining to PFI and IE as I have considered necessary or desirable for the opinions hereinafter expressed.
Based on the foregoing, it is my opinion that:
1. PFI and IE are duly organized, validly existing and in good standing under the laws of the Philippines, and have their principal offices at the addresses indicated in the Agreement and in other documents submitted by the PFI and IE and are registered or qualified to do business in the jurisdiction where such registration or qualification is necessary.
2. PFI and IE have full legal right, power and authority to carry on their present business, to own their properties and assets, to incur the obligations provided for in the Agreement, the Note, the Deed of Assignment, and any other documents pertinent or relevant thereto and to execute and deliver the same and to perform and observe the terms and conditions thereof.
3. All appropriate and necessary corporate and legal actions have been taken by PFI and/or the IE to authorize the execution, delivery and performance of the Agreement, the Note, the Deed of Assignment, and any other documents relevant or pertinent thereto.
5. All consents, licenses, approvals and authorizations, and all declarations, filings and registrations necessary for the execution, delivery, performance, validity or enforceability of the Agreement, the Note and the Deed of Assignment have been obtained by PFI and/or the IE and are in full force and effect.
6. To the best of my knowledge after due inquiry, except as disclosed by PFI in writing to DBP prior to the date of the Agreement, there is no litigation, tax claim, proceeding or dispute, pending or threatened, against or affecting the PFI or its properties, the adverse determination of which might adversely affect the PFI’s financial condition or operations or impair its ability to perform its obligations under the Agreement, the Note, or the Deed of Assignment, or any other instrument or agreement required thereunder.
Although this opinion is dated January 28, 1999, you may rely on the correctness of the opinion expressed herein on and as of the date of the initial Availment under the Agreement.
It is evident therefore that petitioner’s opinion was instrumental in the deceit committed against DBP. As a lawyer and in-house legal counsel of HSLBI, it is highly doubtful that she would have affixed her signature without knowing that there were defects in those documents.
As aptly found by the Office of the Chief State Prosecutor:
Insofar as respondent Atty. Ligaya P. Cruz is concerned, her claim of innocence is difficult to sustain. Being the wife of respondent Benjamin J. Cruz and a lawyer at that, she should have refrained or inhibited from rendering an opinion that is totally in contravention of what had actually transpired. Her legal opinion that the forty (40) loan applicants are legally existing and in good standing necessarily caused damage and injury to complainant DBP. As the wife of then president of HSLBI, her having an in-depth knowledge of the operations and transactions appurtenant to the bank including, but not limited to, the inexistent investment enterprises is not remote. (Emphasis and underline supplied)
Whether or not there was negligence on the part of DBP is of no moment. Petitioner cannot conveniently blame DBP for allegedly not double-checking the documents submitted by HSLBI because by affixing her signature on these documents and negotiating the subsidiary loan agreement on behalf of fictitious sub-borrowers/Investment Enterprises, she actively represented that these entities were indeed existing and eligible for the loan.
Likewise, she cannot use as a defense the flip-flopping resolutions of the Secretary of Justice. The amendments in the resolutions does not mean that there was grave of discretion on the part of the Secretary of Justice. If at all, it is indicative of the fact that the Office of the Secretary of Justice carefully studied and reviewed the facts of the case in arriving at its final resolution.
WHEREFORE, the Court DENIES the petition for review on certiorari, and AFFIRMS the 17 January 2006 decision of the Court of Appeals in CA-G.R. SP No. 88828. The petitioner shall pay the costs of suit.
JOSE PORTUGAL PEREZ
ANTONIO T. CARPIO
ARTURO D. BRION MARIA LOURDES P. A. SERENO
Associate Justice Associate Justice
BIENVENIDO L. REYES
A T T E S T A T I O N
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO T. CARPIO
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
 Rollo, pp. 8-40.
 CA rollo, pp. 23-27.
 Rollo, pp. 223-229.
 Id. at 192-209.
 Id. at 74-85.
 Id. at 350-369.
 Id. at 86-88.
 Id. at 405-424.
 Id. at 72-73.
 Id. at 425-433.
 Id. at 65-69.
 Id. at 68.
 Id. at 441-452.
 Id. at 60-64.
 Id. at 63-64.
 CA rollo, pp. 2-22.
 Penned by Associate Justice Mariano C. Del Castillo (now a member of the Court) with Associate Justices Conrado M. Vasquez, Jr. and Magdangal M. De Leon, concurring. Id. at 480-494.
 Id. at 529.
 G.R. No. 166797, 10 July 2007, 527 SCRA 190.
 Id. at 204.
 Ladlad v. Velasco, G.R. Nos. 172070-72, 1 June 2007, 523 SCRA 318, 335.
 Rollo, pp. 690-691.
 Id. at 82-83.