G.R. No. 177780 ; January 25, 2012
METROPOLITAN BANK & TRUST CO. (METROBANK), represented by ROSELLA A. SANTIAGO, Petitioner, vs. ANTONINO O. TOBIAS III, Respondent.

FACTS

In 1997, respondent Antonino O. Tobias III opened an account and applied for a loan from petitioner Metropolitan Bank & Trust Company (METROBANK). He offered as collateral a property in Malabon City covered by Transfer Certificate of Title (TCT) No. M-16751. Based on his financial statements, METROBANK approved a credit line of ₱40,000,000.00. The bank annotated the deed of real estate mortgage on the title. Tobias availed of the loan but later defaulted, leading to foreclosure. When METROBANK presented the certificate of sale for registration, it was discovered that TCT No. M-16751 was fictitious, as its serial number corresponded to a different title and the title number was issued for a property in Navotas under a different name. The Presidential Anti-Organized Crime Task Force (PAOCTF) investigated and recommended the filing of a criminal complaint for estafa through falsification of public documents against Tobias. The Office of the City Prosecutor of Malabon filed an information charging him accordingly.
During reinvestigation, Tobias claimed he purchased the property in good faith from Leonardo Fajardo through brokers, had the title verified and transferred to his name, and used part of the loan to pay the seller. He asserted no intent to defraud. The City Prosecutor found probable cause. Tobias appealed to the Department of Justice (DOJ). The Acting Secretary of Justice directed the withdrawal of the information, opining that Tobias established good faith, used part of the loan to pay the seller, and that METROBANK’s annotation of the mortgage created an impression the title existed, thus the presumption that the possessor of a falsified document is its author did not apply. METROBANK’s motion for reconsideration was denied. METROBANK then filed a petition for certiorari with the Court of Appeals, which dismissed it, affirming the DOJ’s finding of no probable cause and noting Tobias’s good faith and lack of criminal intent.

ISSUE

Whether the Secretary of Justice committed grave abuse of discretion in directing the withdrawal of the information for estafa through falsification of public documents against respondent Tobias.

RULING

The Supreme Court affirmed the Court of Appeals’ decision. The Secretary of Justice did not commit grave abuse of discretion. The Court upheld the principle of non-interference with the Secretary of Justice’s prerogative to review the public prosecutor’s determination of probable cause, absent a showing of grave abuse of discretion. The DOJ correctly found that Tobias acted in good faith. He purchased the property through brokers, caused the verification and transfer of the title, and used loan proceeds to pay the seller. METROBANK itself conducted an appraisal and caused the annotation of the mortgage, reinforcing the appearance of a valid title. The presumption that the possessor of a falsified document is its author is disputable and was overcome by Tobias’s satisfactory explanation of his lack of knowledge regarding the falsity. Consequently, the element of deceit for estafa was not established. The Court found no arbitrariness or capriciousness in the DOJ’s resolution, which was based on the evidence and within its authority.