G.R. No. 170512 ; October 5, 2011
OFFICE OF THE OMBUDSMAN, Petitioner, vs. ANTONIO T. REYES, Respondent.

FACTS

On January 11, 2001, Jaime B. Acero executed an affidavit-complaint against Antonio T. Reyes (Transportation Regulation Officer II/Acting Officer-in-Charge) and Angelito Peñaloza (Clerk III) of the LTO District Office in Mambajao, Camiguin. Acero alleged that on January 10, 2001, after failing a driver’s license examination administered by Peñaloza, he was informed that his application could be reconsidered if he paid an additional assessment of ₱680.00. Acero agreed, handed ₱1,000.00 to Peñaloza in the presence of Reyes, and received change of ₱320.00 and an LTO Official Receipt for only ₱180.00. The balance of ₱500.00 was retained by Peñaloza without a receipt. The complaint was referred to the Office of the Ombudsman-Mindanao.
In his Counter-Affidavit, Peñaloza admitted administering the exam and giving Acero a failing score of 22/40. He stated it was up to Reyes to decide on the application. He saw Reyes had written “+27” on Acero’s form, which he understood to mean Acero had to pay additional costs to pass, a past practice. After learning Acero was an auditor, Reyes summoned Acero and offered him the choice to retake the exam or pay extra. Acero agreed to pay. Peñaloza processed the license. When Acero gave him ₱1,000.00 for the cashier, he received change of ₱820.00, gave ₱320.00 to Acero, and gave ₱500.00 to Reyes. Later, Acero called demanding a receipt for the ₱500.00. Reyes instructed Peñaloza to cancel the license and, when told it was not possible, gave Peñaloza ₱500.00 to return to Acero secretly, but Acero did not return.
Peñaloza also submitted the affidavit of former LTO employee Rey P. Amper, who stated that starting around February 1994, Reyes verbally instructed him to send all applicants who failed exams to him (Reyes). Reyes provided a paper with rates to be charged to these “applicant-flunkers” in addition to legal fees, and Amper was to deliver the additional payments to Reyes. Amper stated this was a known practice from which Reyes alone benefitted, and employees were afraid to report him. An affidavit from Margie B. Abdala supported that Peñaloza tried to return the ₱500.00 to Acero at his home, but Acero refused.
Reyes, in his counter-affidavit adopted from a related criminal case, claimed Acero’s complaint was a fabrication. He argued the affidavit showed only that Peñaloza spoke about payment in his presence, and that Peñaloza processed everything and pocketed the ₱500.00. Reyes claimed he reprimanded Peñaloza and ordered him to return the money after an informal investigation where Peñaloza admitted pocketing it.
The Office of the Ombudsman-Mindanao found substantial evidence to hold Reyes and Peñaloza administratively liable for Grave Misconduct and Dishonesty, imposing the penalty of dismissal. The Court of Appeals reversed the Ombudsman’s decision, finding no substantial evidence to prove Reyes’s liability. The CA ruled that the affidavits of Peñaloza and Amper were hearsay and self-serving, and that Acero’s affidavit did not directly implicate Reyes in receiving the money. The Office of the Ombudsman filed this Petition for Review.

ISSUE

Whether the Court of Appeals erred in reversing the decision of the Office of the Ombudsman which found respondent Antonio T. Reyes administratively liable for Grave Misconduct and Dishonesty.

RULING

Yes, the Court of Appeals erred. The Supreme Court REVERSED the Decision of the Court of Appeals and REINSTATED the Decision of the Office of the Ombudsman finding respondent Antonio T. Reyes administratively liable for Grave Misconduct and Dishonesty and imposing the penalty of dismissal.
The Supreme Court held that the findings of fact of the Office of the Ombudsman, when supported by substantial evidence, are conclusive. Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion. The Court found that the Ombudsman’s conclusion was supported by substantial evidence from the records.
The Court emphasized that administrative cases may be proven by substantial evidence, and the technical rules of procedure and evidence applied in courts do not strictly apply. The affidavits of Peñaloza and Amper constituted substantial evidence. Peñaloza’s detailed account, corroborated by Amper’s testimony about a longstanding practice instituted by Reyes of exacting additional payments from failing applicants, directly implicated Reyes. Amper’s affidavit was based on his personal knowledge as a former employee who carried out Reyes’s instructions. Reyes’s defense that Peñaloza acted alone was belied by the evidence, including Peñaloza’s statement that he gave the ₱500.00 to Reyes and Reyes’s subsequent attempt to have the money returned secretly. Reyes’s act of writing “+27” on Acero’s failing exam paper was an overt act indicating his participation in the scheme.
The Court ruled that Reyes’s actions constituted Grave Misconduct and Dishonesty. Misconduct is a transgression of some established and definite rule of action. It becomes grave when it involves elements of corruption, clear intent to violate the law, or flagrant disregard of established rules. Dishonesty implies a disposition to lie, cheat, deceive, or defraud. By conspiring with a subordinate to extract unauthorized payment from an applicant in exchange for a passing grade, and by failing to issue a receipt for the amount, Reyes exhibited corruption and flagrant disregard of LTO rules and procedures, qualifying his acts as Grave Misconduct and Dishonesty warranting dismissal from service.