G.R. No. 136192 , August 14, 2001
THE PRESIDENTIAL AD HOC FACT-FINDING COMMITTEE ON BEHEST LOANS, represented by ORLANDO SALVADOR and DANILO R.V. DANIEL, petitioner, vs. THE HONORABLE OMBUDSMAN ANIANO DESIERTO, ALICIA LL. REYES, VERDEN C. DANGILAN, CONSUELO R. GABOYA, MARIANO U. ORTEGA, PELAGIO M. VILLEGAS, SR., TRINIDAD VILLEGAS, JOSE MONTELIBANO, respondents.

FACTS

In 1992, President Fidel V. Ramos created the Presidential Ad Hoc Fact-Finding Committee on Behest Loans to investigate behest and non-performing loans. Its Technical Working Group examined the loan accounts of Filipinas Marble Corporation (FMC). On September 1, 1997, a complaint was filed with the Office of the Ombudsman against respondents, including DBP manager Alicia Ll. Reyes and FMC officers/directors, for alleged violation of Republic Act No. 3019 , Section 3(e) and (g). The complaint alleged that FMC, in 1968, obtained a loan from the Development Bank of the Philippines (DBP) amounting to P4,600,000.00, which was undercollateralized (collateral valued at P3,051,740.00) and the company was undercapitalized (capital of P517,350.00). As of June 1986, FMC’s unpaid loan account amounted to P220,143,000.00. The Ombudsman dismissed the complaint on July 7, 1998, due to lack of probable cause and prescription. A motion for reconsideration was denied. The petitioners then filed a special civil action for certiorari to nullify the Ombudsman’s orders.

ISSUE

May loan transactions entered into in 1968 be the basis of criminal liability considering that the complaint was filed twenty-nine (29) years after the commission of the offense? (The Court, however, resolved the petition primarily on the ground of lack of probable cause and did not definitively rule on the issue of prescription.)

RULING

The Supreme Court DISMISSED the petition. It upheld the Ombudsman’s finding of lack of probable cause and found no grave abuse of discretion in the dismissal. The Court ruled that: (1) The burden of proof rests with the complainant, and the Ombudsman found the evidence insufficient to establish conspiracy or the specific participation of public respondent Alicia Ll. Reyes. (2) The Ombudsman has wide latitude and independence in its investigatory and prosecutory powers, and the Court will not interfere absent grave abuse of discretion. (3) On the merits, the Ombudsman’s findings were supported: only P1.5 million was a straight loan (the rest were guarantees, restructured loans, etc.); the loan was not undercollateralized as FMC’s marble deposit rights valued at P211,463,048.00 were assigned to DBP; and there was no evidence showing FMC’s Pelagio Villegas, Sr. was a crony of former President Marcos. Grave abuse of discretion implies a capricious, whimsical, or arbitrary exercise of judgment, which was not present. The Court found no compelling reason to deviate from the general rule of non-interference with the Ombudsman’s exercise of power.