[G.R. NOS.

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

Before Us is a Petition for Review on Certiorari1 under Rule 65 4. Lontok, Jr. and Montalbo collected from BSU students
of the 1997 Rules of Civil Procedure which seeks the internet fees without issuing an official receipt and despite the
nullification of the Joint Resolution dated 14 February absence of internet facilities in BSU Lipa City Campus.
20052 and the Supplemental Resolution dated 12 July 2005 3 in
cases OMB-1-01-1036-K and OMB-1-01-1083-K, both issued by 5. Ligaya collected from BSU students the amount P200.00
the public respondent Office of the Ombudsman. It also prays each as payment for Related Learning Experience Fee (RLEF)
for the issuance of a Temporary Restraining Order without issuing any official receipt.
commanding the public respondent to cease and desist from
implementing the said Supplemental Resolution dated 12 July 6. De Chavez and Baes conspired in designating close relatives
2005 or from conducting further proceedings in cases OMB-1- of De Chavez to key administrative positions in BSU.
01-1036-K and OMB-1-01-1083-K.
7. De Chavez made appointments of faculty members and
Culled from the records are the following facts: transmitted said appointments to the CSC [Civil Service
Commission] without the approval of the BSU Board of
On 7 November 2001, private respondent Nora L. Magnaye Regents.
(Magnaye), Professor IV of the Batangas State University
(BSU), filed with the public respondent an administrative 8. De Chavez prevented the elected President of the
complaint for Grave Misconduct, Oppression, Conduct Federation of Supreme Student Assembly to sit as a member
Prejudicial to the Best Interests of the Service, Falsification of of the Board of Regents.
Official Documents, Dishonesty, Gross Neglect of Duty and
Violation of Section 5(a) of Republic Act No. 6713 otherwise 9. De Chavez issued a Memorandum increasing the rates of
known as "CODE OF CONDUCT AND ETHICAL STANDARDS FOR fees for records and other documents issued by BSU without
PUBLIC OFFICIALS AND EMPLOYEES" against petitioners any approval of the governing Board of the BSU.
Ernesto M. de Chavez (de Chavez), BSU President; Porfirio C.
Ligaya (Ligaya), BSU Vice - President for Extension Campus
10. De Chavez, Baes and Zaraspe designated and appointed
Operations; Rolando L. Lontok, Sr. (Lontok, Sr.), BSU Vice-
faculty members to key positions in BSU without any authority
President for Academic Affairs; Rolando M. Lontok, Jr. (Lontok,
under the law, rule or regulation.
Jr.), BSU Associate Dean of the College of Computer Science
and Information Technology; Gloria G. Mendoza (Mendoza),
11. De Chavez and Lontok, Sr. failed to respond to the letter of
BSU Dean of the College of Liberal Arts; and other BSU officials
officials of the PTA-BSU Lipa Campus in violation of R.A. 6713.
namely, Virginia Baes, BSU Executive Vice-President; Amador
M. Lualhati (Lualhati), BSU University Secretary; Victoria A.
Zaraspe (Zaraspe), BSU Vice-President for Finance and 12. De Chavez collected notarial fees from contractual
Administration; and Jessie A. Montalbo (Montalbo), BSU Vice- employees without issuing official receipts.
President and Dean of the College of Computer Science and
Information Technology.4The case was docketed as OMB-1-01- 13. De Chavez and Lontok, Sr. did not renew the contract of
1036-K. The generative facts which gave rise to the filing of the two faculty members.6
complaint are summarized in the Comment dated 8
September 20055 of the public respondent, to wit: Subsequently, on 13 November 2001, based on the above
imputed acts plus an additional one,7 private respondent also
1. De Chavez, Lontok, Sr. and Mendoza caused to be collected, filed with the public respondent another Complaint imputing
and received the proceeds of, graduation fees from the criminal liability to the BSU officials above-named for Violation
graduating class of SY 2000-2001 without issuing an official of Section 3(a) and (e) of Republic Act No. 3019, otherwise
receipt and without remitting the same to BSU. known as the "ANTI-GRAFT AND CORRUPT PRACTICES ACT,"
Violation of Section 5(a) of Republic Act No. 6713, Falsification
2. De Chavez and Lontok, Sr., did not conduct any public of Official Documents and Estafa.8 The criminal complaint was
bidding for the rental of caps and gowns which were used docketed as OMB-1-01-1083-K.
Petitioners denied the allegations of private respondent. In 9. The failure to respond to some letters query was brought
their Joint Counter-Affidavit dated 30 January 2002,9 which about by the pre-occupation of petitioners to other pressing
was summarized in the Joint Resolution dated 14 February and more important matters.
2005 of the public respondent, petitioners countered the
following: 10. The BSU neither collects nor shares in the notarial fees
charged by the notary public.
1. The BSU management did not collect graduation fees for the
commencement exercises of SY 2000-2001 like in the previous 11. The management can opt to renew or not to renew the
years. It was claimed that the members of the graduating class, contract for employment of some faculty members. They are
with the guidance of their advisers, were the ones who fixed, not governed by the security of tenure as commonly enjoyed
collected and disbursed the contributions/fees for the by the regular employees of the government.10
commencement exercises.
In her Reply dated 8 March 2002,11 private respondent
2. No public bidding was conducted for the rental of the caps attached therewith a photocopy of the alleged Audit Report
and gowns because the BSU did not enter into contract with dated 7 February 2001 of State Auditor IV Milagros D.
any supplier. The graduating students have the complete Masangkay, Office of the Auditor, Pablo Borbon Memorial
freedom to hire their caps and gowns from anyone. The Institute of Technology,12 containing a finding and
receipts signed by Lontok, Sr. was merely in acknowledgment recommendation on the graduation fees collected by BSU,
of the receipts of certain amounts from Magnaye which the thus:
latter requested to be given to Mr. Fralundio Sulit from whom
the graduating class rented their caps and gowns. 4. FINDING

3. Whenever a collection of the internet fee is made, a receipt Graduation fees were not yet issued official receipts and were
was issued by the BSU using Accountable Form No. 51. Further not taken up in the books of the College despite prior years'
no collection of internet fees was made at BSU Lipa City audit recommendations and in violation of the provisions of
Campus. Sections 63 and 68 of Presidential Decree (P.D.) No. 1445, and
Section 4(d) of Republic Act (R.A.) No. 8292 resulting to an
4. The collection of the Related Learning Experience Fee was aggregate understatement of Cash and Trust Liability accounts
done by the Cashier's Office of the College. What was being by about P3,342,550.00.
collected in the past by the Office of Dr. Porfirio Ligaya was the
Dual Training Fee for non-degree courses. However, effective Section 63 of Presidential Decree (P.D.) No. 1445 requires all
the second week of December 2001, the collection of this fee moneys and property officially received by a public officer in
was already turned over to the Cashier's Office of the BSU. any capacity or upon any occasion to be accounted for as
government funds and government property, while Section 68
5. De Chavez relied on the authority of the Resolution issued of the same presidential decree provides that no payment of
by the Office of the President declaring that the designation of any nature shall be received by a collecting officer without
the relatives of De Chavez to certain positions in the BSU is not immediately issuing an official receipt in acknowledgment
violative of the rule against nepotism. The subject designations thereof.
were all duly confirmed by the Board of Regents.
Under Section 4(d) of Republic Act (R.A.) No. 8292, the higher
6. The Board of Regents recognized the practice of De Chavez Education Modernization Act of 1997, state universities and
of submitting first the appointments he made to the CSC for colleges are authorized to deposit in any authorized
attestation before submitting the same for confirmation of the government depository bank and treat as Special Trust Fund,
Board. The appointments of professors/instructors which income from tuition fees and other necessary school charges
Magnaye claim is violative of existing law and rules has already such as matriculation fees, graduation fees, and laboratory
been confirmed by the Board of Regents. fees.

7. No one has been elected as President of the Federation of The existing practice of not issuing official receipts and not
Student Assembly. Said position is still non-existent in view of taking up in the books of accounts graduation fees paid by
the failure of the student to draft and ratify their constitution graduating students has been an audit finding since 1997.
and by-laws.
Based on the Annual Audit Report for calendar year 1999, the
8. The increase in miscellaneous fees was duly approved by the graduation fees from 1997-1999 totaled P2,057,600 with an
Board of Trustees of PBMIT through Board Resolution No. 6 expenses of P921,529.00.
series of 1997.
The graduation fees collected and the expenses paid out of
these fees during the calendar year 2000 could not be
determined due to failure of the employee concerned to Private respondent Magnaye also accused the petitioners of
furnish this Office with certified statement of collections of grave oppression and harassment for giving her two
graduation fees and the related disbursements together with unsatisfactory performance ratings corresponding to the
the supporting papers despite our request to the College periods of June to 15 July 2001 and 16 July 2001 to 20 October
President in a letter dated January 17, 2001. 2001. She claimed that these ratings were given "as a way to
get back at her and lay the basis for dropping her from the rolls
Likewise, in response to our Memorandum dated October 11, of BSU."13 Of course, petitioners refuted the said imputations.
2000 requesting information as to the status of the
implementation of the 1999 audit recommendations, the After the conduct of a clarificatory hearing14 and upon
College President informed this Office and I quote "the holding submission of both parties of their respective position papers,
of graduation rites is a tradition of the PBMIT [Pablo Borbon the public respondent, through Graft Investigation and
Memorial Institute of Technology] academic community but it Prosecution Officer II Joy N. Casihan-Dumlao with Director
is never compulsory. Graduating students may not join the Joaquin F. Salazar and Deputy Ombudsman for Luzon Victor C.
ceremonies but if majority of them decided to hold one, it is Fernandez concurring, issued its Joint Resolution dated 14
their prerogative to plan, execute and evaluate their February 2005 in OMB-1-01-1036-K and OMB-1-01-1083-K
ceremony. In the process, and through the senior council recommending the indictment of petitioners De Chavez,
and/or its advisers, they may agree among themselves to Lontok, Sr., and Mendoza for violation of Section 3(a) of
contribute certain amount voluntarily to finance the program. Republic Act No. 3019. It, however, proposed the dismissal of
After the rites and if there are cash balances, the graduating the complaints against petitioners Ligaya and Lontok, Jr., and
class usually donate something to their Alma Mater as their other officials of BSU namely, Lualhati, Zaraspe, and Montalbo
remembrance or legacy. This office, with all due respect to the for lack of probable cause.15 The fallo states:
COA, may not be able to follow the recommendation. This
office is not yet ready to break this hallowed tradition. WHEREFORE, premises considered, it is respectfully
recommended that respondents ERNESTO M. DE CHAVEZ,
The continuous refusal of management to implement prior ROLANDO L. LONTOK, SR., and GLORIA G. MENDOZA, be
years' audit recommendations and the letter of the Honorable indicted for violation of Section 3(a) of Republic Act No. 3019.
Chairman of the Commission on Audit relative to the handling
of graduation fees was already communicated to the With regard to the rest of respondents, namely: VIRGINIA
Commission on Audit thrice, the latest was last November 8, BAES, AMADOR M. LUALHATI, PORFIRIO C. LIGAYA, VICTORIA
2000 when the General Counsel of the Commission on Audit A. ZARASPE, ROLANDO M. LONTOK, JR., and JESSIE A.
asked for status report. MONTALBO, it is recommended that instant complaints
against them be dismissed for lack of probable cause.
Since graduation fee is one of the items to be recorded under
Special Trust Fund per R.A. No. 8292, failure to record the Upon review by Ombudsman Simeon V. Marcelo, he issued a
same in the books of accounts of the Institute understated the Supplemental Resolution dated 12 July 2005 "partially
cash and trust liability accounts. approving" with modifications the Joint Resolution dated 14
February 2005. Among other findings, he found petitioners de
Since there were no records submitted to this Office pertaining Chavez, Lontok, Sr., Lontok, Jr., and Mendoza liable for
to graduation fees collected from graduating students, violation of Section 3(e) and (h) of Republic Act No. 3019 and
understatement of Cash and Trust Liability Accounts for violation of Article 315(2)(b) of the Revised Penal Code. He
amounting to P1,284,950.00 (Annex G) was based on the also found petitioners de Chavez, Lontok, Sr., Lontok, Jr., and
number graduating students and the graduation fee per Ligaya guilty of Dishonesty and Grave Misconduct, and, thus,
student last school year 1999-2000. The 1999 Annual Audit imposed on them the penalty of Dismissal from the Service
Report of the previous COA Auditor reported a total collections with the accessory penalties of forfeiture of retirement
from 1997 to 1999 of P2,057,600.00. These amounts when benefits and perpetual disqualification from reemployment in
added will yield an aggregate understatement of Cash and the government service.16 The decretal portion of the
Trust Liability accounts by about P3,342,550.00. Supplemental Resolution reads:

RECOMMENDATION WHEREFORE, the 14 February 2005 Joint Resolution of the

Office of the Deputy Ombudsman for Luzon is partially
Require the accountable officer to issue official receipts approved subject to the following modifications:
(Accountable Form 51) for graduation fees collected and
deposit the collections in an authorized government a) Respondents De Chavez, Lontok, Sr., and Mendoza are
depository bank. Enjoin the Accountant to record in the books hereby found liable for violation of Section 3 (e) RA 3019, as
of accounts of the College all collections and disbursements amended, for unlawfully collecting graduation fees. In
conformably with generally accepted accounting principles addition, they are also liable for Estafa under Art. 315 (2) (b) of
and in accordance with pertinent laws and regulations. the Revised Penal Code;
b) Respondents De Chavez and respondent Lontok, Sr. are I.
hereby found liable for violation of Section 3 (e) RA 3019, as
amended, in relation to Section 3 (h) thereof, relative to their RESPONDENT OFFICE OF THE OMBUDSMAN COMMITTED
engaging in the business of rental of caps and gowns; GRAVE ABUSE OF DISCRETION AND ACTED WITHOUT
JURISDICTION IN FINDING PETITIONERS ALREADY LIABLE FOR
c) Respondent De Chavez and respondent Lontok, Jr., are CRIMINAL OFFENSES.
found liable for violation of Section 3 (e) RA 3019, as amended,
for illegally collecting internet fees from students. In addition, II.
they are also liable for Estafa under Art. 315 (2) (b) of the
Revised Penal Code; RESPONDENT OFFICE OF THE OMBUDSMAN COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT DID NOT DISMISS THE
d) The Field Investigation Office (FIO) is directed to conduct TWO SEPARATE BUT IDENTICAL CRIMINAL COMPLAINTS OF
further fact-finding on respondent Ligaya for probable PRIVATE RESPONDENT.19
Malversation under Art. 217 of the Revised Penal Code, for
collecting P200.00 each from BSU students as payment for Apropos the first issue, the petitioners alleged that the public
Related Learning Experience Fee (RLEF) without issuing official respondent's Supplemental Resolution dated 12 July 2005
receipts and misappropriating the same, and to establish with categorically stated that petitioners are liable for the criminal
certainty the total amount collected; acts complained of; that the public respondent did not even
discuss the matter of probable cause but instead immediately
e) The Office of the Deputy Ombudsman for Luzon is hereby ruled on their guilt; that the said resolution did not state or
directed to refer to the Civil Service Commission the instruct the filing of the appropriate criminal informations
administrative aspect of the charges relating to nepotism, against them before the courts of justice. Hence, the public
appointment, assignment/designation, transfer of personnel, respondent's instantaneous finding of criminal liability on their
and performance evaluation ratings; part renders any trial against them an "exercise in futility"
which "inevitably clashes with Section 14(2) of the 1987
f) The Office of the Deputy Ombudsman for Luzon is also Constitution which grants to the accused, inter alia, the right
ordered to immediately conduct a fact-finding investigation to have a speedy, impartial and public trial." Therefore, the
with respect to the holding of comprehensive examination and public respondent had exceeded its jurisdiction under Republic
the collection of fees therefore; Act No. 6770, otherwise known as the "Ombudsman Act of
1989," since there is nothing in the said statute which grants
g) The Field Investigation Office (FIO) is directed to to it the power to determine the guilt or innocence of the
immediately conduct an investigation to gather evidence accused.20
relative to the students who rented caps and gowns for the
school year 2000-2001 and prior to said school year; and Further, they argued that "the public respondent's directive to
the Field Investigation Office (FIO) to conduct further fact-
h) Respondents De Chavez, Lontok, Sr., Ligaya and Lontok Jr., finding on x x x [petitioner] Ligaya for probable Malversation
are hereby found guilty of Dishonesty and Grave Misconduct under Art. 217 of the Revised Penal Code, is questionable as it
and are, thus, meted the penalty of Dismissal from the Service, had already arbitrarily decreed the guilt of petitioner Ligaya
pursuant to Section 52 (A), Rule IV, Uniform Rules on when it pilloried him for collecting P200.00 each from BSU
Administrative Cases in the Civil Service, with the accessory Students as payment for Related Experience Fee (RLEF)
penalties of forfeiture of retirement benefits and perpetual without issuing official receipts and misappropriating the same
disqualification from employment in government service x x x."21
pursuant to Section 58, Rule IV of the same Uniform Rules on
Administrative Cases in the Civil Service. We reject the foregoing asseverations.

Corollary thereto, the Civil Service Commission is hereby Petitioners make mountain on the use of the words "liable for
requested to implement this Order in accordance with law and violation x x x" employed by the Ombudsman. A review of the
to advice this Office of compliance thereon. Let a copy of this specific powers of the Ombudsman under the Constitution,
decision be furnished the Honorable Chairman, Civil Service the laws and jurisprudential pronouncements is in order. Both
Commission, Constitution Hills, Diliman, Quezon City. the 1987 Constitution and the Ombudsman Act of 1989
(Republic Act No. 6770) empower the public respondent to
Aggrieved, the petitioners filed this petition. Petitioner investigate and prosecute on its own or on complaint by any
Mendoza filed a Petition in Intervention dated 12 December person, any act or omission of any public official or employee,
2005 after her lawyer found out that she was not included in office or agency when such act or omission appears to be
the instant petition.17 Her intervention was allowed in the illegal, unjust, improper or inefficient.22 By virtue of this
Court's First Division Resolution of 28 August 2006. 18 Both power,23 it may conduct a preliminary investigation for the
petitions raised the following issues for our consideration: mere purpose of determining whether there is a sufficient
ground to engender a well-founded belief that a crime has synonymous to the words "susceptible," "prone," and
been committed and the respondent is probably guilty "exposed," all indicating temporary or fluctuating situations.29
thereof, and should be held for trial.24
We, likewise, call special attention to the fact that nowhere in
A preliminary investigation is merely inquisitorial, and it is the challenged resolution is it stated that petitioners are found
often the only means of discovering the persons who may be "guilty" beyond reasonable doubt of the crime charged, in
reasonably charged with a crime, to enable the prosecutor to stark contrast to the disposition of the administrative
prepare his complaint or information. It is not a trial of the case case30 wherein petitioners "De (sic) Chavez, Lontok, Sr., Ligaya
on the merits and has no objective except that of determining and Lontok, Jr., are hereby found guilty of x x x" and were
whether a crime has been committed and whether there is meted the corresponding penalty.
probable cause to believe that the respondent is guilty
thereof.25 In the conduct of preliminary investigation, the We, then, conclude that the words "liable for" employed by
prosecutor does not decide whether there is evidence beyond the Ombudsman in the challenged resolution really alluded
reasonable doubt of the guilt of respondent. A prosecutor only to the probability of guilt. They simply imply that the
merely determines the existence of probable cause, and to file Ombudsman had found probable cause to hold petitioners
the corresponding information if he finds it to be so.26 liable for the crimes imputed and, thus, should be held liable
for trial in the courts of law. It is not a declaration of guilt.
At the threshold, we must accentuate that in the exercise of
the powers and in the discharge of his functions and Probable cause, as used in preliminary investigations, has been
responsibilities, the Ombudsman, as in that of the other defined as the existence of such facts and circumstances as
officials, enjoys the presumption of regularity in the would excite the belief, in a reasonable mind, acting on the
performance of official functions. facts within the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was
Rule 131, Section 3(m) of the Revised Rules of Evidence prosecuted.31 We reiterate this in the case of Pimentel Jr. v.
provides: COMELEC,32 thus:

SEC. 3. Disputable presumptions. - The following presumptions [a] finding of probable cause needs only to rest on evidence
are satisfactory if uncontradicted, but may be contradicted showing that more likely than not a crime has been committed
and overcome by other evidence: and was by the suspects. Probable cause need not be based on
evidence establishing absolute certainty of guilt. As well put in
x x x Brinegar v. United States, while probable cause demands more
than "bare suspicion," it requires "less than evidence which
(m) That official duty has been regularly performed; x x x. would justify x x x conviction." A finding of probable cause
merely binds over the suspects to stand trial. It is not a
pronouncement of guilt. (Emphasis ours.)
This presumption of regularity includes the public officer's
official actuations in all the phases of his work.27
The public respondent's finding of probable cause to indict
petitioners for the crime charged is based on and supported by
With particular reference to the Ombudsman, it is well to state
the complaints under oath of the private respondent, sworn
that his office is, indeed, one of the more powerful agencies of
statements and notarized affidavits of her witnesses, and
the government and wields vast powers, though limited to a
official and public documents submitted by the private
certain extent. Concomitant to this stature, our laws have
respondent.33 A clarificatory hearing34 attended by private
required more stringent qualifications, most especially to the
respondent and almost all of the petitioners was conducted by
intellectual quality and capacity, for the person who will run
the public respondent on 13 May 2004. During the hearing, the
for the office.
public respondent asked the private respondent some
clarificatory questions with regard to the latter's complaints.
In light of this observation, the presumption that the
Ombudsman knows whereof he speaks forcefully applies. We
The 24-paged Supplemental Resolution dated 12 July 2005, as
must then presume that he is well aware of the extent and
well as the 24-paged Joint Resolution dated 14 February 2005,
limitations of his powers. Thus, when Ombudsman Marcelo
of the public respondent contains lengthy and substantial
used the words "liable for" in his Supplemental Resolution of
discussions on the bases of its finding of probable cause to
12 July 2005, he is presumed to have used these within the
indict the petitioners for the criminal offenses. The Resolutions
sense of the limited power vested in him by our laws and
took pains to determine the appropriate crimes to be imputed
jurisprudence - the finding of probable cause.
to petitioners and to analyze each charge vis-a-vis the
elements of the crime. The evidences submitted by the private
Further, the word "liable" is described as to mean "subject or
respondent for each charge were subjected to careful scrutiny.
exposed to some usually adverse contingency or action."28 The
word is now rather wide in its use and is considered
As to petitioner Ligaya, it is asserted that "the public suffice it to say that the technical rules of evidence should not
respondent's directive to the Field Investigation Office (FIO) to be applied in the conduct of preliminary investigation by the
conduct further fact-finding on x x x [petitioner] Ligaya for public respondent strictly. This is clear in the Administrative
probable Malversation under Art. 217 of the Revised Penal Order No. 08 entitled "CLARIFYING AND MODIFYING CERTAIN
Code, is questionable as it had already arbitrarily decreed the RULES OF PROCEDURE OF THE OMBUDSMAN"36 The validity
guilt of petitioner Ligaya when it pilloried him for and the merits of a party's defense or accusations as well as
collecting P200.00 each from BSU Students as payment for the admissibility of testimonies and evidences are better
Related Experience Fee (RLEF) without issuing official receipts ventilated during the trial stage than in the preliminary stage.
and misappropriating the same x x x." The subject directive
reads: The factual and evidentiary issues can best be passed upon and
threshed out during a full-blown court trial since it is the
d) The Field Investigation Office (FIO) is directed to conduct court's task to determine guilt beyond reasonable doubt based
further fact-finding on respondent Ligaya for probable on the evidence presented by the parties at a trial on the
Malversation under Art. 217 of the Revised Penal Code, for merits.37
collecting P200.00 each from BSU students as payment for
related Learning Experience Fee (RLEF) without issuing official We have consistently refrained from interfering with the
receipts and misappropriating the same, and to establish with constitutionally-mandated investigatory and prosecutorial
certainty the total amount collected; powers of the public respondent absent any compelling
reason.38 In the case of Quiambao v. Desierto,39 citing The
As it is, the public respondent merely directed the FIO to Presidential Ad-Hoc Fact Finding Committee on Behest Loans
conduct further investigation and gather more evidence on the v. Ombudsman Aniano Desierto,40 we ruled:
liability of petitioner Ligaya for "probable" malversation. It did
not in any way conclude that petitioner Ligaya is guilty beyond The prosecution of offenses committed by public officers is
reasonable doubt of malversation. In fact, it saw the need to vested in the Office of the Ombudsman. To insulate the Office
first gather more information and evidence before deciding on from outside pressure and improper influence, the
whether petitioner Ligaya may be indicted for malversation. Constitution as well as R.A. 6770 has endowed it with wide
latitude of investigatory and prosecutory powers virtually free
Coming now to the second issue, petitioners argued that the from legislative, executive, or judicial intervention. This Court
public respondent should have dismissed the "two separate consistently refrains from interfering with the exercise of its
but identical complaints" filed by private respondent on the powers, and respect the initiative and independence inherit in
ground of forum shopping. the Ombudsman who, "beholden to no one, acts as the
champion of the people and the preserver of the integrity of
The test in determining the presence of forum shopping is the public service."
whether in the two or more cases pending, there is identity of
(1) parties, (2) rights or causes of action, and (3) relief(s) In Maturan v. People,41 we held:
sought.35 In the instant case, although the parties, facts and
circumstances are essentially the same, the rights or causes of A policy of non-interference by the courts in the exercise of the
action, as well as the relief(s) sought are different. The Ombudsman's constitutionally mandated powers is based not
complaint filed on 7 November 2001 is for an administrative only upon respect for the investigatory and prosecutory
case. The causes of action are grave misconduct, oppression, powers granted by the Constitution to the Office of the
conduct prejudicial to the best interest of the service, Ombudsman but upon practicality as well. Otherwise, the
dishonesty, gross neglect of duty and violation of Section 5(a) functions of the Court will be grievously hampered by
of Republic Act No. 6713. The relief sought against petitioners innumerable petitions assailing the dismissal of investigatory
is dismissal from the service with forfeiture of retirement proceedings conducted by the Office of the Ombudsman with
benefits and leave credits. On the other hand, the complaint regard to complaints filed before it, in much the same way that
filed on 13 November 2001 is for a criminal case. The causes of the courts would be extremely swamped if they were
action are violations of Section 3(a) and (e) of Republic Act No. compelled to review the exercise of discretion on the part of
3019, falsification of official documents and estafa. The the fiscals, or prosecuting attorneys, each time they decide to
relief(s) sought against petitioners are, among other prayers, file an information in court or dismiss a complaint by private
for imprisonment, perpetual disqualification from public office complainant."
and confiscation or forfeiture in favor of the government of
any prohibited interest and unexplained wealth manifestly out One final and significant observation. This Court noted that the
of proportion to their salary and other lawful income. Thus, present petition seeks the annulment of public respondent's
petitioners' allegation of forum shopping is vacuous. Supplemental Resolution dated 12 July 2005 on the criminal
(OMB-1-01-1083-K) and administrative (OMB-1-01-1036-K)
Relative to petitioners' rantings in the probative value of the complaints of private respondent. Procedurally, the remedy of
affidavits presented during the preliminary investigation and an aggrieved party in criminal complaints before the public
on the conclusions of fact reached by the public respondent, respondent where the latter found probable cause is to file
with this Court a petition for certiorari under Rule 65.42 Thus, [G.R. NO. 154438 : September 5, 2007]
we gave due course and resolved the issue of finding of
probable cause in the criminal aspect of the instant petition. ALICIA F. RICAFORTE, Petitioner, v. LEON L.
JURADO, Respondent.
This Court, however, cannot and will not pass judgment on the
administrative liability of petitioners. In the leading case of DECISION
Fabian v. Desierto,43 we ruled that appeals from decisions of
the public respondent in administrative liability cases should Before us is a Petition for Review on Certiorari under Rule 45
be taken to the Court of Appeals under Rule 43 of the 1997 of the Rules of Court seeking to annul and set aside the
Rules of Civil Procedure. Consequently, the administrative Decision1 dated April 26, 2002 and the Resolution2 dated July
aspect of the present petition should be referred to the Court 29, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 66293.
of Appeals for proper disposition.
On February 10, 1997, respondent filed a Complaint3 for estafa
WHEREFORE, the instant petition as regards criminal case and violation of Batas Pambansa (B.P.) Blg. 22 against Alicia F.
OMB-1-01-1083-K is hereby DISMISSED. Petitioners' appeal of Ricaforte (petitioner) with the Quezon City Prosecutor's Office.
the public respondent's Supplemental Resolution dated 12 July He alleged that he operates and manages a rice mill in Bulacan;
2005 with regard to administrative case OMB-1-01-1036-K is that sometime in June 1996, Ruby Aguilar (Aguilar) procured
hereby REFERRED to the Court of Appeals for proper rice from him and in payment thereof gave him two Far East
disposition. Costs against petitioners. Bank and Trust Company (FEBTC) checks, to wit: FEBTC Check
No. 08A096028P dated July 25, 1996 and Check No.
SO ORDERED. 08A096029P dated August 25, 1996, in the amount
of P431,555.00 each, which were both issued by petitioner and
when presented for payment were dishonored.

In her Counter-Affidavit, petitioner denied the accusation. She

alleged that Aguilar who had lost her Metrobank checkbook
borrowed her checks to pay off Aguilar's obligations with Leon
Jurado (respondent); that she willingly lent her checks to
Aguilar on condition that these checks will be replaced with
Aguilar's own checks once her new checkbook is issued to her
by Metrobank; that Aguilar then used petitioner's checks to
pay her rice procurement with respondent; that in accordance
with the arrangement, Aguilar issued two replacement checks
in favor of respondent in the amount of P431,555.00 each;
that when Aguilar issued the replacement checks, petitioner
demanded from respondent the return of her checks but
respondent refused, thus she was constrained to request her
bank to issue an order of stop payment. Aguilar executed an
Affidavit corroborating petitioner's defense.

Respondent filed his Reply denying that petitioner's checks

were merely accommodation checks. Petitioner filed her
rejoinder as well as supplement to rejoinder.

In a Resolution4 dated November 24, 1997, Assistant City

Prosecutor Luis Zenon Q. Maceren dismissed the complaint for
estafa and B.P. Blg. 22 for insufficiency of evidence. The
prosecutor found that petitioner did not have any business
transaction with respondent; that the subject checks were
issued only to accommodate Aguilar; that these were
delivered to respondent not as payment but as a guarantee
and on condition that Aguilar will replace petitioner's checks
with her own, which Aguilar did prior to the maturity of
petitioner's checks; that upon maturity of Aguilar's
replacement checks and after respondent presented them for
payment and were subsequently dishonored, it was then that
petitioner's checks were also presented by respondent for
encashment; that Aguilar's replacement checks are now On April 26, 2002, the CA issued its assailed Decision denying
subject of another litigation pending in the Metropolitan Trial the petition for lack of merit. The CA found no grave abuse of
Court of Quezon City; that the sequence of events showed that discretion committed by the Justice Secretary in his assailed
indeed petitioner's checks were not intended as payment to Resolutions. It ruled that trial on the merits must ensue since
respondent because petitioner had no obligation to it is on said occasion that petitioner is granted opportunity for
respondent; that the checks were not issued to account or for a full and exhaustive presentation of her evidence and not
value; thus, there can be no finding of prima facie evidence of during the preliminary investigation phase where the
the charges against him relying on Magno v. Court of Appeals.5 investigating officer acts upon probable cause and reasonable
belief; that in the preliminary investigation phase, it is not yet
Respondent's Motion for Reconsideration was denied in a clear whether petitioner could be considered as having
Resolution6 dated May 27, 1998. The prosecutor found that actually committed the offense charged and sought to be
although the issuance of a worthless check is malum punished, although petitioner is presumed innocent until
prohibitum, B.P. Blg. 22 still requires that the checks should be proven guilty beyond reasonable doubt; that the crux of the
issued with consideration, which element was lacking in this matter rests upon the reasons for the drawing of the
case; that even respondent admitted in his Complaint-Affidavit postdated checks by petitioner; i.e., whether they were drawn
that petitioner had no transaction with him by alleging that or issued "to apply on account or for value" as required
Aguilar handed to him petitioner's two checks in payment of under B.P. Blg. 22 which will only be determined during trial.
rice procurement representing these as Aguilar's collection
checks and with assurance that they are good; that when Petitioner's Motion for Reconsideration was denied in a
Aguilar replaced petitioner's checks with her own, petitioner's Resolution dated July 29, 2002. The CA ruled that mere
checks had no more consideration since these were issued issuance of a bouncing check constitutes a probable cause for
upon agreement that the real debtor, Aguilar, will also issue violation of B.P. Blg. 22; that whether or not the accused is
her own checks. guilty thereof is determined in the trial proper; that
preliminary investigation is not a trial and is not intended to
Respondent appealed the dismissal of his complaint to the usurp the function of the trial court; that Sales, which is
Department of Justice. The Secretary of Justice issued a invoked by petitioner, is not applicable to the instant case,
Resolution7 dated September 21, 2000 modifying the since the issue in that case was whether or not the
Resolution of the City Prosecutor and directing him to file an Ombudsman followed the proper procedure in conducting a
information against petitioner for violation of B.P. Blg. 22. preliminary investigation and the corollary issue of whether or
not petitioner was afforded an opportunity to be heard and to
The Justice Secretary found that while the dismissal of estafa submit controverting evidence which are not the issues in this
is correct, petitioner should be indicted for B.P. Blg. 22. In so case.
ruling, the Secretary found that while petitioner has no
business transactions with respondent and merely issued the Hence, herein petition on the following grounds:
checks as a guarantee for Aguilar's obligation to respondent,
the fact remains that petitioner issued the subject checks and I
failed to pay respondent the amount due thereon or make
arrangements for their full payment within five banking days THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE
after receiving a notice of dishonor; that the gravamen of the REVERSIBLE ERROR IN NOT HOLDING THAT THE HONORABLE
offense punished by B.P. Blg. 22 is the act of making and SECRETARY OF JUSTICE COMMITTED A GRAVE ABUSE OF
issuing worthless checks or those dishonored upon their DISCRETION IN ISSUING HIS MODIFIED RESOLUTION FINDING
presentment for payment; that the thrust of the law is to PROBABLE CAUSE AGAINST PETITIONER FOR VIOLATION OF
prohibit the making of worthless checks and putting them in B.P. BLG. 22, DESPITE THE FACT THAT THE HONORABLE
circulation; that to require the arrangement surrounding the SECRETARY HAS AGREED WITH THE FINDING OF THE QUEZON
issuance of the checks be first looked into and thereafter CITY PROSECUTION OFFICE DISMISSING THE CHARGE OF
exempt such issuance from the punitive provisions of B.P. Blg. ESTAFA AGAINST PETITIONER.
22 on the basis of that arrangement would frustrate the very
purpose for which the law was enacted, i.e. to stop the II
proliferation of unfunded checks; that B.P. Blg. 22 applies even
when dishonored checks were issued merely in the form of
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
deposit or guarantee.
REVERSIBLE ERROR IN NOT GIVING WEIGHT AND CREDENCE
TO PETITIONER'S CLAIM THAT THE SUBJECT CHECKS WERE
The Justice Secretary denied petitioner's Motion for NOT ISSUED TO ACCOUNT OR FOR VALUE BUT SOLELY TO
Reconsideration in a Resolution8 dated May 30, 2001. GUARANTEE RUBY AGUILAR'S CHECKS, ESPECIALLY
CONSIDERING THAT IT IS UNDISPUTED THAT PETITIONER HAD
Petitioner filed with the CA a Petition for Certiorari under Rule NO BUSINESS DEALINGS WHATSOEVER WITH THE
65 assailing the resolutions of the Secretary of Justice for RESPONDENT REGARDING RICE PROCUREMENTS.
having been issued with grave abuse of discretion.
III violation of B.P. Blg. 22 because in ordering the stop payment
of her check, there were sufficient funds in her account.
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
REVERSIBLE ERROR IN NOT HOLDING THAT THERE IS NO NEED Petitioner claims that the CA overlooked the fact that the
TO GO TO TRIAL IN THE INSTANT CASE BECAUSE EVEN DURING Secretary of Justice absolved her of estafa; thus, she should
THE PRELIMINARY INVESTIGATION CONDUCTED BY THE also be absolved of violation of B.P. Blg. 22, since both
QUEZON CITY PROSECUTION OFFICE, THE SAID PROSECUTION offenses arose from the same subject checks.
OFFICE HAD FOUND THAT NO PRIMA FACIE OR PROBABLE
CAUSE EXISTS TO WARRANT THE FILING OF THE COMPLAINTS Petitioner contends that the CA misappreciated the
OF ESTAFA AND VIOLATION OF B.P. BLG. 22 AGAINST THE importance of a preliminary investigation when it ruled that
PETITIONER. the trial on the merits must ensue, and it is on said occasion
when petitioner is granted the opportunity for a full and
IV exhaustive display of her evidence; that it erred in ruling that
it is only during trial that the presence or absence of the first
THE AFFIRMANCE BY THE HONORABLE COURT OF APPEALS OF element of B.P. Blg. 22, i.e., whether the subject checks were
THE MODIFIED RESOLUTION OF THE HONORABLE SECRETARY issued to apply to account or for value, can be determined;
OF JUSTICE DIRECTING THE FILING OFAN INFORMATION that preliminary investigation should be given due importance
AGAINST PETITIONER FOR VIOLATION OF B.P. BLG. 22 and the determination of whether the first element of B.P.
OVERLOOKED THE FACT THAT RESPONDENT WOULD BE Blg. 22 is present should not be shifted to the trial court; that
UNJUSTLY ENRICHED AT THE EXPENSE OF PETITIONER AND contrary to the CA's finding, Sales is applicable, a case in which
THE DEBTOR, MS RUBY AGUILAR, IN THE FORM OF it was ruled that at the preliminary investigation proper, the
IMPOSITION OF A FINE WHICH IS DOUBLE THE AMOUNT OF question whether or not an accused can be bound over for trial
THE BOUNCED CHECKS.9 can already be determined; if it was determined at the
preliminary investigation that an accused had not committed
The main issue to be resolved is whether the CA erred in ruling the crime charged, then it is useless to still hold a trial to
that the Secretary of Justice did not commit grave abuse of determine the guilt of the accused, since it can already be
discretion in finding that there is probable cause for the filing determined at the preliminary investigation.
of information against petitioner for violation of B.P. Blg. 22.
We are not persuaded.
Petitioner alleges that the CA should not have sustained the
modified resolution of the Secretary of Justice because the In a preliminary investigation, the public prosecutor merely
Secretary misappreciated her defense, i.e., that Aguilar lost determines whether there is probable cause or sufficient
her Metrobank checkbook and borrowed her check and that ground to engender a well-founded belief that a crime has
she issued the subject checks on the condition that the same been committed, and that the respondent is probably guilty
will be replaced when Aguilar's new checkbook is issued, thus thereof and should be held for trial.11 Probable cause implies
the subject checks are merely accommodation or guarantee probability of guilt and requires more than bare suspicion but
checks; that it was Aguilar who tendered them to respondent less than evidence which would justify a conviction.12 A finding
in payment of her rice procurements from him; that the of probable cause needs only to rest on evidence showing that
subject checks were not intended for encashment; that Aguilar more likely than not, a crime has been committed by the
subsequently issued her own checks dated July 20, 1996 and suspect.13 It does not call for the application of rules and
August 20, 1996, for P431,555.00 each as replacement for the standards of proof that a judgment of conviction requires after
subject checks; that such substitution was with respondent's trial on the merits.14 The complainant need not present at this
knowledge, since the arrangement was brought to his stage proof beyond reasonable doubt. A preliminary
attention through a letter dated July 19, 1996. investigation does not require a full and exhaustive
presentation of the parties' evidence.15 It is enough that in the
Petitioner insists that none of the elements of the offense absence of a clear showing of arbitrariness, credence is given
of B.P. Blg. 22 were present; the first element is absent, since to the finding and determination of probable cause by the
the subject checks were not intended to apply on account or Secretary of Justice in a preliminary investigation.16
for value in favor of respondent, as petitioner had no business
transaction on rice procurements with respondent; the second Contrary to petitioner's claim, respondent sufficiently
element is also absent because it is undisputed that at the time established the existence of probable cause for violation
petitioner issued the checks, she had substantial deposits with of B.P. Blg. 22. Section 1 of B.P. Blg. 22 provides:
FEBTC which can readily fund her checks upon presentment or
maturity; that the reason for the dishonor was "stop SECTION 1. Checks without sufficient funds. - Any person who
payment," because she requested the bank to do so due to a makes or draws and issues any check to apply on account or
valid reason, i.e., her checks were already replaced by Aguilar's for value, knowing at the time of issue that he does not have
checks dated July 20, 1996 and August 20, 1996. Petitioner sufficient funds in or credit with the drawee bank for the
cites Tan v. People,10 in which the petitioner was acquitted of payment of such check in full upon its presentment, which
check is subsequently dishonored by the drawee bank for payment order issued by petitioner. Notably, a
insufficiency of funds or credit or would have been dishonored certification21 from the bank showed that they returned the
for the same reason had not the drawer, without any valid checks for that reason. In addition, contrary to the claim of
reason, ordered the bank to stop payment, shall be punished petitioner, at the time the said checks were presented for
by imprisonment of not less than thirty days but not more than deposit/payment, there were no sufficient funds to cover the
one (1) year or by a fine of not less than but not more than same. The mere act of issuing a worthless check - - whether as
double the amount of the check which fine shall in no case a deposit, as a guarantee or even as evidence of pre-existing
exceed Two Hundred Thousand Pesos, or both such fine and debt - - is malum prohibitum.22
imprisonment at the discretion of the court.
Petitioner claims that the subject checks were merely
The same penalty shall be imposed upon any person who, accommodation checks in favor of Aguilar, as they were not
having sufficient funds in or credit with the drawee bank when issued to account or for value, since she had no business
he makes or draws and issues a check, shall fail to keep transactions with respondent-payee. However, petitioner
sufficient funds or to maintain a credit to cover the full amount admitted that she issued the checks for the rice procurement
of the check if presented within a period of ninety (90) days of Aguilar from respondent which was a valuable
from the date appearing thereon, for which reason it is consideration. Notably, in respondent's complaint-affidavit, he
dishonored by the drawee bank. alleged that the subject checks were given to him by Aguilar in
payment of the latter's rice procurements, with the
Where the check is drawn by a corporation, company or entity, representation that the subject checks were her collection
the person or persons who actually signed the check in behalf checks and assuring respondent that they would be good upon
of such drawer shall be liable under this Act. presentment.

To be liable for violation of B.P. Blg. 22, the following elements On record is a letter23 dated July 31, 1996 of respondent's
must be present: counsel to petitioner on the matter of petitioner's subject
FEBTC Check No. 08A096028P dated July 25, 1996, a letter in
1) The accused makes, draws or issues any check to apply to which the counsel wrote that the check which was in partial
account or for value; payment of the obligation due from Aguilar, and that in return
for petitioner's issuance and delivery of the said check, Aguilar
acquired a temporary reprieve on her obligation.
2) The accused knows at the time of the issuance that he or
she does not have sufficient funds in, or credit with, the
drawee bank for the payment of the check in full upon its The validity and merits of a party's defense and accusation, as
presentment; and well as admissibility of testimonies and evidence, are better
ventilated during trial proper than at the preliminary
investigation level.24 A finding of probable cause does not
3) The check is subsequently dishonored by the drawee bank
ensure a conviction or a conclusive finding of guilt beyond
for insufficiency of funds or credit or it would have been
reasonable doubt. The allegations adduced by the prosecution
dishonored for the same reason had not the drawer, without
will be put to test in a full-blown trial in which evidence shall
any valid reason, ordered the bank to stop payment.
be analyzed, weighed, given credence or disproved. 25
The gravamen of the offense punished by B.P. Blg. 22 is the act
In fact, petitioner's argument that respondent was aware of
of making and issuing a worthless check; that is, a check that is
the fact that the subject checks were only accommodation
dishonored upon its presentation for payment. 17 In Lozano v.
checks in favor of Aguilar is not a defense against a charge for
Martinez,18 we have declared that it is not the non-payment of
violation of B.P. Blg. 22. In Ruiz v. People of the
an obligation which the law punishes. The law is not intended
Philippines,26 where the accused interposed the defense of
or designed to coerce a debtor to pay his debt. The thrust of
accommodation party, we held:
the law is to prohibit, under pain of penal sanctions, the
making and circulation of worthless checks. Because of its
deleterious effects on the public interest, the practice is It bears stressing that, whether a person is an accommodation
proscribed by the law. The law punishes the act not as an party is a question of intent. When the intent of the parties
offense against property, but an offense against public does not appear on the face of the check, it must be
order.19 In People v. Nitafan,20 we said that a check issued as ascertained in the light of the surrounding facts and
an evidence of debt - though not intended to be presented for circumstances. Invariably, the tests applied are the purpose
payment - has the same effect as an ordinary check and would test and the proceeds test. x x x. And even assuming she was
fall within the ambit of B.P. Blg. 22. such party, this circumstance is not a defense to a charge for
violation of B.P. 22. What the law punishes is the issuance itself
of a bouncing check and not the purpose for which it was
In this case, petitioner issued the two subject checks in favor
issued or of the terms and conditions relating to its issuance.
of respondent, and when respondent presented them for
The mere act of issuing a worthless check, whether merely as
payment, they were dishonored for reason of the stop
an accommodation, is covered by B.P. 22. Hence, the
agreement surrounding the issuance of a check is irrelevant to Laws in the Batasan deleted the abovementioned qualifying
the prosecution and conviction of the petitioner.27 proviso deliberately for the purpose of making the
enforcement of the act more effective (Batasan Record, First
In Meriz v. People of the Philippines,28 we held: Regular Session, December 4, 1978, Volume II, pp. 1035-1036).

The Court has consistently declared that the cause or reason Consequently, what are important are the facts that the
for the issuance of the check is inconsequential in determining accused had deliberately issued the checks in question to
criminal culpability under BP 22. The Court has since said that cover accounts and that the checks were dishonored upon
a "check issued as an evidence of debt, although not intended presentment regardless of whether or not the accused merely
for encashment, has the same effect like any other check" and issued the checks as a guarantee.31
must thus be held to be "within the contemplation of BP 22."
Once a check is presented for payment, the drawee bank gives Petitioner invokes our ruling in Magno v. Court of
it the usual course whether issued in payment of an obligation Appeals32 where the accused therein was acquitted of B.P. Blg.
or just as a guaranty of an obligation. BP 22 does not appear to 22 for issuing checks to collateralize an accommodation and
concern itself with what might actually be envisioned by the not to cover the receipt of actual account or for value.
parties, its primordial intention being to instead ensure the In Magno, the accused, who was in the process of putting up a
stability and commercial value of checks as being virtual car repair shop, was provided with credit facilities by LS
substitutes for currency. It is a policy that can easily be eroded Finance and Management Corporation (LS Finance) to enable
if one has yet to determine the reason for which checks are him to lease from MANCOR the needed equipments. As part
issued, or the terms and conditions for their issuance, before of their arrangement, LS Finance required a 30% warranty
an appropriate application of the legislative enactment can be deposit of the "purchase/lease" value of the equipments to be
made. The gravamen of the offense under BP 22 is the act of transacted upon. Accused then asked the LS Finance Vice
making or issuing a worthless check or a check that is President Joey Gomez to look for a third party who could lend
dishonored upon presentment for payment. The act him the equivalent amount of the warranty deposit as he did
effectively declares the offense to be one not have such amount, however, unknown to the accused, it
of malum prohibitum. The only valid query then is whether the was Corazon Teng (Vice President of MANCOR) who advanced
law has been breached, i.e., by the mere act of issuing a bad the deposit in question on condition that the same would be
check, without so much regard as to the criminal intent of the paid as a short term loan at 3% interest. The accused
issuer.29 subsequently issued checks to collateralize an accommodation
made by Teng amounting to Twenty Nine Thousand Seven
Also, in Cruz v. Court of Appeals,30 we held: Hundred Pesos (P29,700.00) as warranty deposit.
Subsequently, the said checks bounced; thus the accused was
It is now settled that Batas Pambansa Bilang 22 applies even in prosecuted and the lower courts convicted him of B.P. Blg. 22.
cases where dishonored checks are issued merely in the form On a Petition for Review on Certiorari, we however acquitted
of a deposit or a guarantee. The enactment in question does the accused and held that the "cash out" made by Teng was
not make any distinction as to whether the checks within its not used by the accused who was just paying rental on the
contemplation are issued in payment of an obligation or equipments. To charge him for the refund of a "warranty
merely to guarantee the said obligation. In accordance with deposit" he did not withdraw, because it was not his own
the pertinent rule of statutory construction, inasmuch as the account and it remained with LS Finance, would be to make
law has not made any distinction in this regard, no such him pay an unjust "debt," to say the least, since he did not
distinction can be made by means of interpretation or actually receive the amount involved. We also held that this is
application. Furthermore, the history of the enactment of a scheme whereby Teng as the supplier of the equipment in
subject statute evinces the definite legislative intent to make the name of Mancor, would be able to sell or lease its goods as
the prohibition all-embracing, without making any exception in this case, and at the same time privately finance those who
from the operation thereof in favor of a guarantee. This intent desperately needed petty accommodations as obtaining in
may be gathered from the statement of the sponsor of the bill said case; that this modus operandi, in so many instances,
(Cabinet Bill No. 9) which was enacted later into Batas victimized unsuspecting businessmen who likewise needed
Pambansa Bilang 22, when it was introduced before the protection from the law by availing themselves of the
Batasan Pambansa, that the bill was introduced to discourage deceptively called "warranty deposit," not realizing that they
the issuance of bouncing checks, to prevent checks, from would fall prey to a leasing equipment under the guise of a
becoming 'useless scraps of paper' and to restore lease-purchase agreement, when it was a scheme designed to
respectability to checks, all without distinction as to the skim off a business client.
purpose of the issuance of the checks. The legislative intent as
above said is made all the more clear when it is considered that It bears stressing that Magno was decided after a full-blown
while the original text of Cabinet Bill No. 9, supra, had trial, and the proof needed to convict the accused was proof
contained a proviso excluding from the coverage of the law a beyond reasonable doubt, which was not established in that
check issued as a mere guarantee, the final version of the bill case.
as approved and enacted by the Committee on the Revision of
On the other hand, herein case is still in the preliminary payments, respondent still wanted to collect from petitioner's
investigation stage which is merely inquisitorial, and it is often subject checks the total amount of P863,110.00; that
the only means of discovering the persons who may be respondent wanted to collect from both petitioner and Aguilar
reasonably charged with a crime, to enable the fiscal to for the latter's rice procurement. It is during the trial of this
prepare his complaint or information.33 It is not a trial of the case that evidence may be introduced to prove petitioner's
case on the merits and has no purpose except that of contentions. As of now, it has been established that when the
determining whether a crime has been committed and subject checks were deposited, they were all dishonored.
whether there is probable cause to believe that the accused is
guilty.34 It is not the occasion for the full and exhaustive display Furthermore, the allegation of petitioner that if the
of the parties' evidence; it is for the presentation of such information for B.P. Blg. 22 would be filed and in the remote
evidence only as may engender a well-grounded belief that an event that petitioner would be found guilty thereof, then the
offense has been committed and that the accused is probably trial court may impose a fine double the amount of the checks,
guilty thereof.35 We are in accord with the Justice Secretary's which fine may amount to millions of pesos; and that this is
finding that there is reasonable ground to believe that a unjust enrichment on respondent's part at the expense of
violation of B.P. Blg. 22 has been committed by petitioner, petitioner and Aguilar deserves scant consideration. Suffice it
thus, we refrain from prejudging the applicablity or to state that the fine that may be imposed by the court is not
inapplicability of Magno in this case. awarded to the private complainant. Fine is imposed as a
penalty and not as payment for a specific loss or injury.38
Petitioner alleges that at the time she issued the subject
checks, she has substantial funds in the bank to cover the value In fine, the CA did not commit any error in upholding the
thereof. This is evidentiary in nature which must be presented findings of the Secretary of Justice that probable cause exists
during trial more so in the light of the bank certification that that the crime of violation of B.P. Blg. 22 has been committed
there were no sufficient funds to cover the checks when by petitioner.
presented for deposit/payment.
WHEREFORE, the petition is DENIED. The Decision dated April
The law itself creates a prima facie presumption of knowledge 26, 2002 and the Resolution dated July 29, 2002 of the Court
of insufficiency of funds. Section 2 of B.P. Blg. 22 provides: of Appeals are hereby AFFIRMED.

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

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

Such knowledge is legally presumed from the dishonor of the

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

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

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

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

rice procurements from respondent, Aguilar had made
substantial payments to respondent through cashier's checks
totalling P313,255.00; that despite these substantial
G. R. No. 164904 October 19, 2007 The due date for Trust Receipt No. 001-016310-205, for the
value of HK$85,540.00, was on 1 September 1997, while that
JOSE ANTONIO U. GONZALEZ, Petitioner, of Trust Receipt No. 001-016310-206, for the value of
vs. HK$143,993.90, was on 28 January 1998.
HONGKONG & SHANGHAI BANKING
CORPORATION, Respondent. When the due dates of subject Trust Receipts came and went
without word from MLRC, respondent HSBC, through Paula L.
DECISION Felipe (Felipe), Vice-President of respondent HSBC’s Credit
Control Department, in a letter11 dated 28 March 2000,
In this petition for review on certiorari1 under Rule 45 of the demanded from MLRC the turnover of the proceeds of the sale
Rules of Court, as amended, petitioner Jose Antonio U. of the assorted goods covered by the Trust Receipts or the
Gonzalez (Gonzalez) seeks; 1) the reversal of the 13 January return of said goods. Despite demand, however, MLRC failed
2004 Decision,2 and 6 August 2004 Resolution,3 both of the to return the assorted goods or their value. Consequently,
Court of Appeals in CA-G.R. SP No. 75469; and 2) Felipe, for respondent HSBC, filed a criminal complaint for
the dismissal of the complaint4 for violation of Presidential estafa, i.e., for violation of Presidential Decree No. 115, the
Decree No. 115, otherwise known as the "Trust Receipts Law," "Trust Receipts Law," in relation to Art. No. 315(1)(b) of the
in relation to Article 315(1)(b) of the Revised Penal Code, filed Revised Penal Code against petitioner Gonzalez before the
by respondent Hongkong & Shanghai Banking Corporation Office of the City Prosecutor of Makati, docketed as I.S. No. 00-
(HSBC) against him before the City Prosecutor of Makati and G-24734-35. The complaint-affidavit contained the following
docketed as I.S. No. 00-G-24734-35. allegations:

The Court of Appeals, in its assailed decision and resolution, 4. On August 1, 1997, Mr. Antonio U. Gonzalez, Chairman and
found no grave abuse of discretion on the part of the Secretary Chief Executive of Mondragon, executed in favor of the Bank
and the succeeding Acting Secretary, both of the Department Trust Receipt No. 001-016310-205, by virtue of which he
of Justice (DOJ), in their denial of petitioner Gonzalez’s petition acknowledged receipt from the Bank of "(Sporting Goods) Golf
for review and motion for reconsideration, respectively. Equipments" (sic) with the value of HK$85,540.00. Under this
Consequently, the appellate court affirmed the 17 October trust receipt, Mr. Gonzalez bound himself to turn over to the
2002,5 and 14 January 20036 twin resolutions of the DOJ, Bank the proceeds of the sale of the goods or to return them
which in turn affirmed the 13 September 2000 Resolution, 7 of in case of non-sale on January 28, 1998.
the City Prosecutor of Makati, recommending the filing of an
Information for violation of Presidential Decree No. 115, in xxxx
relation to Article 315(1)(b) of the Revised Penal Code against
petitioner Gonzalez. 5. On August 1, 1997, Mr. Gonzalez executed in favor of the
Bank Trust Receipt No. 001-016310-206, by virtue of which he
The case stemmed from a complaint filed by respondent HSBC acknowledged receipt from the Bank of "Assorted Disney
against petitioner Gonzalez for estafa, more particularly, the Items" with the value of HK$143,993.90. Under this trust
violation of Presidential Decree No. 115, in relation to Art. receipt, Mr. Gonzalez bound himself to turn over to the Bank
315(1)(b) of the Revised Penal Code. the proceeds of the sale of the goods or to return them in case
of non-sale on September 1, 1997.
The antecedents of the present petition are beyond dispute.
They are: xxxx

At the time of the incident subject of the case at bar, petitioner 6. All the abovementioned trust receipts x x x executed by the
Gonzalez was the Chairman and Chief Executive Officer of respondents (sic) contain the following provisions:
Mondragon Leisure and Resorts Corporation (MLRC). MLRC is
the owner, developer and operator of Mimosa Leisure ‘1. The Document and the goods and/or proceeds to which
Estate8 located at the Clark Special Economic Zone (CSEZ), they relate ("The Goods") will be held for your [HSBC] benefit
Clark Field, Pampanga. On 1 August 1997, petitioner Gonzalez, and the entrustee will receive the Documents and take
for and in behalf of MLRC, acknowledged receipt of various delivery of the Good exclusively for the purpose of selling the
golfing equipments and assorted Walt Disney items, and Goods unless you [HSBC] shall direct otherwise.
signed the corresponding two Trust Receipt agreements, i.e.,
Trust Receipt No. 001-016310-205,9 covering the various 2. The Documents, the Goods and the proceeds of their sale
golfing equipments, and Trust Receipt No. 001-016310- are and will be held by the entrustee in trust for you [HSBC] as
206,10 covering the assorted Walt Disney items, both in favor entruster and solely to your [HSBC] order and the entrustee
of respondent HSBC. shall pay the proceeds to you [HSBC], immediately on receipt
thereof or of each portion thereof, as the case may be, without
set-off or any deduction. The records of the entrustee shall xxxx
properly record your [HSBC] interest in the Goods.
13. x x x there was a tacit agreement among the parties that
xxxx defendant, being a stable company with good credit standing,
would be accorded leniency and given enough leeway in the
10. This Trust Receipt shall be governed and construed in all settlement of its obligations.
respects in accordance with P.D. 115 otherwise known as Trust
Receipts Law.’ xxxx

7. Despite repeated oral and written demands upon 17. x x x the unlawful closure of the Casino by CDC and
respondent, respondent has not turned over to the Bank a PAGCOR, coupled with the Asian economic crisis, severely
single centavo of the proceeds of the sale of the affected its ability to pay its creditors, including complainant
abovementioned goods covered by the Trust Receipts, or bank herein, which have an aggregate exposure of about P5.3
returned any of the goods.12 Billion in Mondragon. These events rendered it impossible for
MLRC to duly comply with its financial obligations. These
In his defense, petitioner Gonzalez countered that: events barred plaintiff bank from declaring MLRC’s obligation
due and demandable, and consequently from declaring MLRC
2. At the outset, it must be stressed that the transactions in default. Thus, since MLRC is not in default, respondents
subject of the instant Complaint are between the complainant herein cannot be charged for estafa as the obligations on the
bank and Mondragon Leisure and Resorts Corporation basis of which they are being charged are not yet due and
("MLRC") and that the officers of the latter, including demandable.13
respondent herein, in all of their official acts and transactions,
are not acting in their own personal capacity but, rather, are Following the requisite preliminary investigation, in a
merely acting on behalf of the corporation and performing a Resolution dated 13 September 2000, the City Prosecutor
valid corporate act pursuant to a validly enacted resolution of found probable cause to hold petitioner Gonzalez liable for
the Board of Directors. two counts of estafa, more specifically, the violation of
Presidential Decree No. 115, in relation to Art. 315(1)(b) of the
3. Moreover, it is clear that I cannot be held criminally Revised Penal Code. The City Prosecutor recommended that:
responsible for alleged violation of the Trust Receipts subject
hereof. The aforesaid transactions, while reportedly WHEREFORE, premises considered, it is respectfully
denominated as "Trust Receipts" were not really intended by recommended that respondent Jose Antonio U. Gonzalez be
the parties to be trust receipt transaction within the purview indicted with two (2) counts of Violation of P.D. 115 and that
of P.D. 115. At best, they are loan transactions, for which the the attached Information for that purpose be approved for
respondent cannot be held criminally liable. filing in court.14

xxxx In finding probable cause to prosecute petitioner Gonzalez for

the crime supposedly committed, the City Prosecutor held
6. x x x respondent, who merely performed a valid corporate that:
act may not be held personally and criminally liable therefore
(sic), absent a clear showing of fault or negligence on his part After study, assessment and thorough evaluation of the
x x x. evidence obtaining in this case at bar, the undersigned finds
probable cause to warrant respondent’s indictment with the
7. x x x it is required that the person charged with estafa offense charge (sic) all the elements of which are obtaining
pursuant to a trust receipt transaction must be proved to have under the aforementioned circumstances. This is so because
misappropriated, misused or converted to his own personal respondent admitted having executed the trust receipts
use to the damage of the entruster, the proceeds of the goods subject matter of the case in point. The defense raised by the
covered by the trust receipts. Thus, mere failure to pay the respondent though it appears to be meritorious are (sic)
amounts covered by the trust receipts does not conclusively matters of defense best left for the court to consider and
constitute estafa as defined under P.D. 115 and the Revised appreciate during trial of the case. As shown above, the failure
Penal Code. of the entrustee/respondent to account for the goods covered
by the two (2) Trust Receipts which he received after notice
and demand caused him to be liable for two (2) counts of
8. x x x. [W]hile respondent may have failed on behalf of MLRC
violation of P.D. 115.15
(which is actually the debtor) to make payments on the due
dates, such failure is neither attributable to respondent or due
to his wrongdoing or fault but on account of circumstances On 24 October 2000, petitioner Gonzalez appealed the
concerning the corporation x x x. foregoing resolution of the City Prosecutor to the DOJ by
means of a petition for review.
In a Resolution dated 17 October 2002, Honorable Hernando to turn over the proceeds from the goods sold and the goods
B. Perez, then Secretary of the DOJ, denied said petition. In themselves subject of the trust receipts despite demand from
affirming the resolution of the City Prosecutor of Makati, the the respondent bank. Such failure to account or turn over the
Secretary held that: proceeds or to return the goods subject of the trust receipts
gives rise to the crime punished under the Trust Receipts Law.
The gravamen of violation of PD 115 is the failure to account, [Citation omitted.] Petitioner is ventilating before us the
upon demand, for fund or property held in trust by virtue of a merits of his causes or defenses, but this is not the occasion for
trust receipt x x x. This failure, being clearly present in the the full and exhaustive display of evidence. The presence or
instant case, prima facie evidence of misappropriation lies. A absence of the elements of the crime is evidentiary in nature
fortiori, the charges of dishonesty and abuse of confidence will and shall be passed upon after a full-blown trial on the merits.
hold.16 Petitioner’s defenses are matters best left to the discretion of
the court during trial.20
Further, the Secretary ruled that:
The fallo of the preceding decision reads:
The allegation of respondent that he cannot be made liable for
the offense as he was just performing a valid corporate act is WHEREFORE, the petition is DENIED for lack of merit.21
untenable x x x. The respondent being the Chairman and Chief
Executive Officer and the person who signed the trust receipts, Petitioner’s motion for reconsideration was likewise denied in
there can be no doubt that there is no other person who can a Resolution dated 6 August 2004.
be considered as more responsible than him. He appears to be
the most responsible person contemplated under the Hence, the present petition filed under Rule 45 of the Rules of
aforesaid provision of P.D. 115. Court, as amended.

Finally, we agree with the Prosecutor’s findings that the other In the present petition, petitioner Gonzalez fundamentally
defenses raised by the respondent are evidentiary in nature seeks to reverse the ruling of the Court of Appeals on the
and best left to the sound appreciation of the court in the following grounds:
course of the trial.17
I.
The dispositive of the resolution provides:
THE HONORABLE COURT OF APPEALS COMMITTED
WHEREFORE, the assailed resolution is hereby AFFIRMED and MANIFEST ERROR IN NOT FINDING THAT FOR A VALID
consequently, the petition is DENIED.18 INDICTMENT UNDER PRESIDENTIAL DECREE NO. 115
TO LIE, THE SAID LAW MUST BE READ IN
Subsequently, on 14 January 2003, Hon. Merceditas N. CONJUNCTION WITH ARTICLE 315, PARAGRAPH 1 (B)
Gutierrez, then Acting Secretary of the DOJ, denied the motion OF THE REVISED PENAL CODE WHICH REQUIRES THAT
for reconsideration of petitioner Gonzalez. THE PERSON CHARGED WITH ESTAFA PURSUANT TO
A TRUST RECEIPT TRANSACTION MUST BE PROVED TO
Undaunted, petitioner Gonzalez went to the Court of Appeals HAVE MISAPPROPRIATED, MISUSED OR CONVERTED
via a Petition for Review under Rule 4319 of the Rules of Court, TO HIS PERSONAL USE THE PROCEEDS OF THE GOODS
as amended. COVERED BY THE TRUST RECEIPTS TO THE DAMAGE
OF THE ENTRUSTER; and
On 13 January 2004, the Court of Appeals promulgated its
Decision denying petitioner Gonzalez’s recourse for lack of II.
merit.
NO PROBABLE CAUSE EXISTS TO WARRANT THE
The appellate court, notwithstanding the procedural infirmity, INDICTMENT OF PETITIONER FOR VIOLATION OF
as the petition filed under Rule 43 of the Rules of Court, as SECTION 13 OF PRESIDENTIAL DECREE 115.22
amended, was the wrong mode of appeal, took cognizance of
and proceeded to resolve the petition based on substantive On the whole, the basic issue presented before this Court in
grounds. In holding that no grave abuse of discretion this petition is, given the facts of the case, whether or not there
amounting to lack or excess of jurisdiction tainted the actions is probable cause to hold petitioner Gonzalez liable to stand
of the Secretary as well as the Acting Secretary of the DOJ in trial for violation of Presidential Decree No. 115, in relation to
denying petitioner Gonzalez’s petition, the decision explained Art. 315(1)(b) of the Revised Penal Code.
that:
Petitioner Gonzalez contends that the Court of Appeals
In the case at bar, it is decisively clear that petitioner executed committed manifest error in ruling, that, probable cause
the trust receipts in behalf of MLRC and that there was a failure existed to hold him liable to stand trial merely on the basis of
"his admission that he executed the trust receipts subject knowledge of the prosecutor, that the person charged was
matter of the case below and his failure to account for the guilty of the crime for which he was prosecuted. 29 A finding of
goods covered by the same."23 He argues that the City probable cause merely binds over the suspect to stand trial. It
Prosecutor of Makati and the DOJ failed to appreciate two is not a pronouncement of guilt.30
important facts: 1) that the real transaction that led to the
present controversy was in fact a loan agreement; and 2) that To determine the existence of probable cause, there is a need
MLRC simply extended to Best Price PX, Inc., the owner and to conduct preliminary investigation. A preliminary
operator of Mimosa Mart at the CESZ, its credit line with investigation is an inquiry to determine whether (a) a crime
respondent HSBC, such that Best Price was the actual debtor has been committed; and (b) whether there is probable cause
of respondent bank. Paradoxically, he maintains that "the fact to believe that the accused is guilty thereof. Such investigation
that (he) held a high position in MLRC was not sufficient reason is designed to secure the (accused) against hasty, malicious
to charge him for alleged violation of trust receipts."24 He and oppressive prosecution, the conduct of which is executive
insists further that he is not the person responsible for the in nature.31
offense allegedly committed because of the absence of "a
clear showing of fault or negligence on his part." According to The executive department of the government is accountable
petitioner Gonzalez, "President (sic) Decree No. 115 must be for the prosecution of crimes, its principal obligation being the
read in conjunction with Article 315, paragraph 1(b) of the faithful execution of the laws of the land. A necessary
Revised Penal Code x x x under both x x x it is required that the component of the power to execute the laws is the right to
person charged with estafa pursuant to a trust receipt prosecute their violators.32 Corollary to this, the right to
transaction must be proved to have misappropriated, misused prosecute vests the prosecutor with a wide range of discretion,
or converted to his own personal use the proceeds of the the discretion of whether, what and whom to charge, the
goods covered by the trust receipts to the damage of the exercise of which depends on a smorgasbord of factors which
entruster." Thus, petitioner concludes that "mere failure to are best appreciated by prosecutors.33
pay the amounts covered by the trust receipts does not
conclusively constitute estafa as defined under Presidential
Having said the foregoing, this Court consistently adheres to
Decree No. 115 and Article 315, paragraph 1(b)."
the policy of non-interference in the conduct of preliminary
investigations, and to leave to the investigating prosecutor
Respondent HSBC, on the other hand, contends that sufficient latitude of discretion in the determination of what
"petitioner is criminally liable since he signed the trust receipts constitutes sufficient evidence as will establish probable cause
x x x;"25 and, that, "[f]raud is not necessary for conviction for for the filing of an information against the supposed
violation of the Trust Receipts Law,"26 the latter being in the offender,34 courts can only review whether or not the
nature of a malum prohibitum decree. On the issue of executive determination of probable cause was done without
company reverses, Asian currency crisis and the closure of the or in excess of jurisdiction resulting from grave abuse of
Mimosa Regency Casino, respondent HSBC counters that discretion. Thus, although it is entirely possible that the
"[t]hey do not excuse petitioner for his failure to comply with investigating prosecutor may erroneously exercise the
his obligations under the trust receipts,"27 because unlike discretion lodged in him by law, this does not render his act
"motor vehicles or parcels of land, which are frequently amenable to correction and annulment by the extraordinary
purchased on credit or on installment basis,"28 the goods remedy of certiorari, absent any showing of grave abuse of
covered by the two trust receipts, i.e., assorted Disney items discretion amounting to excess of jurisdiction. 35
and various golfing equipments, are usually paid for in cash
upon receipt by buyers; and if not sold, the merchandise
And for courts of law to grant the extraordinary writ of
should still be with MLRC. Hence, there was no reason for
certiorari, so as to justify the reversal of the finding on the
petitioner Gonzalez’s failure to comply with his obligation
existence of probable cause to file an information, the one
under the two Trust Receipts – to turn over the proceeds of
seeking the writ must be able to establish that the
the sale of the goods or to return the goods if they remained
investigating prosecutor exercised his power in an arbitrary
unsold.
and despotic manner, by reason of passion or personal
hostility, and it must be patent and gross as would amount to
We find no merit in the petition. an evasion or to a unilateral refusal to perform the duty
enjoined or to act in contemplation of law. Grave abuse of
We agree with the Court of Appeals that no grave abuse of discretion is not enough.36 Excess of jurisdiction signifies that
discretion amounting to lack or excess of jurisdiction marred he had jurisdiction over the case but has transcended the same
the assailed resolutions of the DOJ. or acted without authority.37

Herein, petitioner Gonzalez questions the finding of probable Try as we might, this Court cannot find substantiation that the
cause by the City Prosecutor to hold him liable to stand trial for executive determination of probable cause was done without
the crime complained of. Probable cause has been defined as or in excess of jurisdiction resulting from grave abuse of
the existence of such facts and circumstances as would excite discretion, when the City Prosecutor resolved to recommend
the belief in a reasonable mind, acting on the facts within the the filing of the Information for two counts of violation of
Presidential Decree No. 115 against petitioner Gonzalez. the purchase price, does not constitute a trust receipt
Similarly, there is absolutely no showing that the DOJ, in the transaction and is outside the purview and coverage of this
exercise of its power to review on appeal the findings of the Decree.
City Prosecutor of Makati, acted in an arbitrary or despotic
manner that amounted to an excess or lack of jurisdiction. In general, a trust receipt transaction imposes upon the
entrustee the obligation to deliver to the entruster the price of
In the case at bar, petitioner Gonzalez is charged by the sale, or if the merchandise is not sold, to return the same
respondent HSBC with violating Presidential Decree No. 115. to the entruster. There are thus two obligations in a trust
Section 4 of the "Trust Receipts Law" defines a trust receipt receipt transaction: the first, refers to money received under
transaction as – the obligation involving the duty to turn it over (entregarla) to
the owner of the merchandise sold,38 while the second refers
Section 4. What constitutes a trust receipts transaction. – A to merchandise received under the obligation to "return" it
trust receipt transaction, within the meaning of this Decree, is (devolvera) to the owner.39 A violation of any of these
any transaction by and between a person referred to in this undertakings constitutes estafa defined under Art. 315(1)(b) of
Decree as the entruster, and another person referred to in this the Revised Penal Code, as provided by Sec. 13 of Presidential
Decree as entrustee, whereby the entruster, who owns or Decree 115, viz:
holds absolute title or security interests over certain specified
goods, documents or instruments, releases the same to the Section 13. Penalty clause. – The failure of an entrustee to turn
possession of the entrustee upon the latter’s execution and over the proceeds of the sale of the goods, documents or
delivery to the entruster of a signed document called a "trust instruments covered by a trust receipt to the extent of the
receipt" wherein the entrustee binds himself to hold the amount owing to the entruster or as appears in the trust
designated goods, documents or instruments in trust for the receipt or to return said goods, documents or instruments if
entruster and to sell or otherwise dispose of the goods, they were not sold or disposed of in accordance with the terms
documents or instruments with the obligation to turn over to of the trust receipt shall constitute the crime of estafa,
the entruster the proceeds thereof to the extent of the punishable under the provisions of Article Three Hundred and
amount owing to the entruster or as appears in the trust Fifteen, paragraph one (b) of Act Numbered Three Thousand
receipt or the goods, documents or instruments themselves if Eight Hundred and fifteen, as amended, otherwise known as
they are unsold or not otherwise disposed of, in accordance the Revised Penal Code. If the violation or offense is
with the terms and conditions specified in the trust receipt, or committed by a corporation, partnership, association or other
for other purposes substantially equivalent to any of the juridical entities, the penalty provided for in this Decree shall
following: be imposed upon the directors, officers, employees or other
officials or persons therein responsible for the offense,
1. In the case of goods or documents: (a) to sell the without prejudice to the civil liabilities arising from the criminal
goods or procure their sale; or (b) to manufacture or offense.
process the goods with the purpose of ultimate sale:
Provided, That, in the case of goods delivered under Article 315(1)(b) of the Revised Penal Code punishes estafa
trust receipt for the purpose of manufacturing or committed as follows:
processing before its ultimate sale, the entruster shall
retain its title over the goods whether in its original or 1. With unfaithfulness or abuse of confidence, namely:
processed form until the entrustee has complied fully
with his obligation under the trust receipt; or (c) to xxxx
load, unload, ship or transship or otherwise deal with
them in a manner preliminary or necessary to their
(b) By misappropriating or converting, to the prejudice of
sale; or
another, money, goods, or any other personal property
received by the offender in trust or on commission, or for
2. In the case of instruments: (a) to sell or procure administration, or under any other obligation involving the
their sale or exchange; or (b) to deliver them to a duty to make delivery of or to return the same, even though
principal; or (c) to effect the consummation of some such obligation be totally or partially guaranteed by a bond; or
transactions involving delivery to a depository or by denying having received such money, goods, or other
register; or (d) to effect their presentation, collection property.
or renewal.
As found in the complaint-affidavit of respondent HSBC’s
The sale of good, documents or instruments by a person in the representative, petitioner Gonzalez is charged with failing to
business of selling goods, documents or instruments for profit turn over "to the Bank a single centavo of the proceeds of the
who, at the outset of transaction, has, as against the buyer, sale of the (assorted) goods covered by the Trust Receipts, or
general property rights in such goods, documents or x x x"40 or to return any of the assorted goods. From the
instruments, or who sells the same to the buyer on credit, evidence adduced before the City Prosecutor of Makati i.e., 1)
retaining title or other interest as security for the payment of
the two Trust Receipts bearing the acknowledgment signature with the law and, if they fail to do so, are held criminally
of petitioner Gonzalez; 2) the official documents concerning accountable; thus, they have a responsible share in the
the transaction between MLRC and respondent HSBC; 3) the violations of the law.45 And second, a corporation or other
demand letter of respondent HSBC; and, significantly, 4) the juridical entity cannot be arrested and imprisoned; hence,
counter-affidavit of petitioner Gonzalez containing his initial cannot be penalized for a crime punishable by imprisonment.46
admission that on behalf of MLRC, he entered into a trust
receipt transaction with respondent HSBC – the investigating Petitioner Gonzalez’s allegation that Best Price PX, Inc. is the
officer determined that there existed probable cause to hold real party in the trust receipt transaction and his assertion that
petitioner Gonzalez for trial for the crime charged. Time and the real transaction between respondent HSBC and MLRC is a
again, this Court has stated that probable cause need not be loan agreement, are matters of defense best left to the trial
based on clear and convincing evidence of guilt, neither on court’s deliberation and contemplation after conducting the
evidence establishing guilt beyond reasonable doubt and, trial of the criminal case. To reiterate, a preliminary
definitely, not on evidence establishing absolute certainty of investigation for the purpose of determining the existence of
guilt; but it certainly demands more than bare suspicion and probable cause is not part of the trial. A full and exhaustive
can never be left to presupposition, conjecture, or even presentation of the parties’ evidence is not required, but only
convincing logic.41 In the present case, there being sufficient such as may engender a well-grounded belief that an offense
evidence to support the finding of probable cause by the City has been committed and that the accused is probably guilty
Prosecutor of Makati, the same cannot be said to have thereof.47
resulted from bare suspicion, presupposition, conjecture or
logical deduction. In fine, the Court of Appeals committed no reversible error
when it ruled that there was no grave abuse of discretion on
That petitioner Gonzalez neither had the intent to defraud the part of the Secretary and Acting Secretary of the DOJ in
respondent HSBC nor personally misused/misappropriated the directing the filing of the Information against petitioner
goods subject of the trust receipts is of no moment. The Gonzalez for violation of Presidential Decree No. 115 in
offense punished under Presidential Decree No. 115 is in the relation to Article 315(1)(b) of the Revised Penal Code.
nature of malum prohibitum. A mere failure to deliver the
proceeds of the sale or the goods if not sold, constitutes a WHEREFORE, premises considered, the instant petition is
criminal offense that causes prejudice not only to another, but DENIED for lack of merit. The assailed 13 January 2004
more to the public interest.42 This is a matter of public policy Decision and 6 August 2004 Resolution, both of the Court of
as declared by the legislative authority. Moreover, this Court Appeals in CA-G.R. SP No. 75469 are hereby AFFIRMED. Costs
already held previously that failure of the entrustee to turn against petitioner.
over the proceeds of the sale of the goods, covered by the trust
receipt, to the entruster or to return said goods if they were
SO ORDERED.
not disposed of in accordance with the terms of the trust
receipt shall be punishable as estafa under Art. 315(1)(b) of the
Revised Penal Code without need of proving intent to
defraud.43

As a last ditch effort to exculpate himself from the offense

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