G.R. No. 218530 , January 13, 2021
LUIS G. QUIOGUE, PETITIONER, VS. BENITO F. ESTACIO, JR. AND OFFICE OF THE OMBUDSMAN, RESPONDENTS.

FACTS

In January 2007, upon the recommendation of then President Gloria Macapagal-Arroyo, Benito F. Estacio, Jr. was elected as a member of the board of directors of Independent Realty Corporation Group of Companies (IRC), a group of corporations surrendered by a Marcos crony and supervised by the Presidential Commission on Good Government (PCGG). Prior to the expiration of his term on June 30, 2010, Estacio continued to sit on the board until December 2010 and served as concurrent Vice-President in mid-2010. On May 21, 2010, the IRC board, including Estacio, passed Resolution No. 2010-05-181 granting separation benefits to IRC officers. Pursuant to this resolution, Estacio received a total of P544,178.20 in separation pay, 14th month pay, and extra bonus. Luis G. Quiogue, IRC’s General Manager, filed a complaint-affidavit before the Office of the Ombudsman, alleging that Estacio’s receipt of these emoluments violated Section 3(e) of Republic Act No. 3019 (the Anti-Graft and Corrupt Practices Act) as it caused undue injury to the government. Quiogue cited Memorandum Circular Nos. 40 and 66, Series of 1993, which limit the compensation of PCGG-nominated directors and prohibit them from assuming line functions or receiving retirement benefits without presidential approval. Estacio defended himself by arguing that the Ombudsman lacked jurisdiction as he was not a public officer, that IRC remained a private corporation, that the memorandum circulars did not apply to him, and that the board resolution was passed in good faith under the “business judgment rule.” The Ombudsman dismissed the complaint for lack of probable cause, finding that while Estacio was a public officer because IRC was a government-owned or controlled corporation (GOCC), his act of receiving the benefits was not done in the performance of official functions, an essential element of the offense. The Ombudsman also found no manifest partiality, evident bad faith, or gross inexcusable negligence in the approval of the resolution. Quiogue’s motion for reconsideration was denied, prompting this petition for certiorari.

ISSUE

Whether the Office of the Ombudsman committed grave abuse of discretion in dismissing the complaint against Benito F. Estacio, Jr. for violation of Section 3(e) of Republic Act No. 3019 for lack of probable cause.

RULING

The Supreme Court dismissed the petition, ruling that the Ombudsman did not commit grave abuse of discretion. The Court held that Estacio is a public officer. He was appointed by the President through a “Desire Letter,” and as a director of a sequestered corporation under PCGG supervision, he performed public functions by managing assets for the government’s benefit. Furthermore, IRC was determined to be a government-owned or controlled corporation (GOCC) as it met the three requisites: it is a stock corporation, vested with functions relating to public needs (its income and assets are remitted to the government), and at least 51% of its capital stock is owned by the State. However, the Court found no probable cause for violation of Section 3(e) of R.A. No. 3019 . The essential elements of the offense are: (1) the accused is a public officer; (2) the act was done in the discharge of the officer’s official, administrative, or judicial functions; (3) the act was done through manifest partiality, evident bad faith, or gross inexcusable negligence; and (4) the act caused undue injury to any party or gave any private party unwarranted benefits. The Court agreed with the Ombudsman that the second element was absent. Estacio’s act of receiving separation benefits, while a public officer, was not an act performed in the discharge of his official functions as a board member. The grant of benefits was a corporate act of the board, and his receipt thereof was a consequence of his corporate position, not his official duties. The Court also affirmed the Ombudsman’s finding that the third element was not present, as there was no showing of manifest partiality, evident bad faith, or gross inexcusable negligence in the board’s passage of the resolution granting benefits. The Court emphasized that the Ombudsman has full discretion in determining probable cause, and its findings, when supported by substantial evidence, are beyond judicial review absent a clear showing of grave abuse of discretion, which was not present in this case.