Carabeo vs. Court of Appeals

A preventive suspension order issued by the Ombudsman under Section 24 of Republic Act No. 6770 is valid without prior notice and hearing provided the Ombudsman first determines that the evidence of guilt is strong and that the charge involves dishonesty, oppression, grave misconduct, or neglect in the performance of duty, warrants removal from service, or the respondent’s continued stay in office may prejudice the case. Executive Order No. 259 is internal in nature and needs no implementing rules to be enforceable, and Section 10 of Republic Act No. 6713 does not require prior notice or corrective action before filing charges under Republic Act No. 3019, the Revised Penal Code, or Republic Act No. 1379.

Liberato M. Carabeo was the Officer-in-Charge of the Office of the City Treasurer of Parañaque City. The Department of Finance-Revenue Integrity Protection Service (DOF-RIPS), created under Executive Order No. 259, serves as the anti-corruption arm of the Department of Finance and investigates allegations of corruption in the DOF and its attached agencies. The Office of the Ombudsman is vested by Republic Act No. 6770 with authority to preventively suspend public officers under investigation. Republic Act No. 3019, Republic Act No. 6713, and Republic Act No. 1379 impose SALN disclosure and accountability requirements on public officers and penalize unexplained wealth.

Liberato M. Carabeo was the Officer-in-Charge of the Office of the City Treasurer of Parañaque City. On July 8, 2005, the Department of Finance-Revenue Integrity Protection Service (DOF-RIPS), composed of private respondents Troy Francis Pizarro, Joel Apolonio, Reynalito L. Lazaro, Ismael Leonor, and Melchor Piol, filed a complaint with the Office of the Ombudsman against Carabeo. The complaint alleged that Carabeo’s net worth had ballooned from ₱114,900.00 when he commenced employment in 1981 to approximately ₱7.5 Million in 2004, while his annual gross salary had risen from ₱8,400.00 as Revenue Collection Clerk in 1981 to ₱291,036.00 as City Treasurer. It further alleged that Carabeo and/or his spouse had acquired numerous real properties, including a 1,000-square-meter residential lot in Tagaytay City, a 1,500-square-meter residential lot also in Tagaytay City, a townhouse in Cavite, and three separate parcels of land in Laguna.

The complaint also alleged that Carabeo and/or his spouse owned various expensive vehicles, including a Ford F150 Flareside (WMD-126), a Mazda Familia (WCL-191), a Chevrolet Cassia (WSG-781), a Mitsubishi Lancer (XCW-149), and a Honda CRV (CYN-808), plus two additional vehicles, a Honda City (WLX-553) and a Nissan Sentra (WSG-869). Carabeo allegedly did not declare most of these vehicles in his SALNs: in his 2003 SALN he claimed ownership of only three vehicles, the GSR, CITY, and CASSIA, and in the succeeding year he declared ownership of only one vehicle, a GSR supposedly acquired in 2002. The Land Transportation Office certification, however, showed that Carabeo and/or his spouse owned at least seven vehicles, including the Ford F150 and Honda CRV. The complaint likewise alleged that Carabeo and/or his spouse acquired the 1,000-square-meter Tagaytay property in 2001, but this acquisition was not reflected in his SALNs for 2001 and 2002. It also cited Carabeo’s purchase of a share in The Palms Country Club in Alabang, Muntinlupa, priced at ₱745,000.00, his spouse Cynthia’s lack of substantial tax payments except for a one-time tax payment of approximately ₱3,000.00 representing capital gains tax, and Carabeo’s fifteen foreign travels from 1996 to 2004. The DOF-RIPS prayed for the filing of criminal informations against Carabeo for violation of RA Nos. 3019, 6713, and 1379 and the Revised Penal Code; the institution of administrative cases for the same violations, dishonesty, and grave misconduct; the commencement of forfeiture proceedings; and Carabeo’s preventive suspension under Section 24 of RA 6770.

On July 26, 2005, the Office of the Ombudsman’s Preliminary Investigation and Administrative Adjudication Bureau-A Acting Director, Corazon DLP. Tanglao-Dacanay, issued an Order in OMB-C-A-05-0333-G (LSC) and OMB-C-C-05-0337-G (LSC) directing Secretary Teves to place Carabeo under preventive suspension for a period not exceeding six months without pay. The Order also directed Carabeo to file his counter-affidavit within ten days from receipt and gave the DOF-RIPS a similar period to file its reply. On September 19, 2005, Ombudsman Simeon V. Marcelo approved Acting Director Dacanay’s July 26, 2005 Order upon the recommendation of Assistant Ombudsman Pelagio S. Apostol. Carabeo then filed a petition for certiorari, docketed as CA-G.R. SP No. 91607, against Ombudsman Marcelo, Assistant Ombudsman Apostol, Secretary Teves, and the members of the DOF-RIPS, alleging grave abuse of discretion amounting to lack or excess of jurisdiction in the approval of his preventive suspension. On October 18, 2005, the Court of Appeals issued a 60-day Temporary Restraining Order enjoining the enforcement of Carabeo’s preventive suspension.

Meanwhile, on November 10, 2005, Secretary Teves issued Department Special Order No. 4-05 directing the detail of Carabeo to the DOF’s Bureau of Local Government Finance at the DOF’s Central Office. Assistant City Treasurer of Makati, Jesusa E. Cuneta, was designated OIC-City Treasurer of Parañaque. Claiming that his detail to the BLGF-CO violated the TRO issued in CA-G.R. SP No. 91607, Carabeo filed another petition before the Court of Appeals, docketed as CA-G.R. SP No. 92313, praying among others that Secretary Teves be cited for contempt of court. On December 19, 2005, the Court of Appeals granted Carabeo’s request that CA-G.R. SP No. 92313 be consolidated with CA-G.R. SP No. 91607 after holding that both petitions involved the same parties or related questions of fact and law and that the later petition for contempt arose out of Secretary Teves’ alleged violation of the TRO issued in CA-G.R. SP No. 91607.

On October 31, 2006, the Court of Appeals rendered a Joint Decision dismissing the consolidated petitions. Carabeo moved for reconsideration. In its Resolution of March 28, 2007, the Court of Appeals denied Carabeo’s motion for reconsideration and ruled that the detail order was in accordance with Section 6 of Rule IV of the Civil Service Rules on Personnel Actions and Policies and CSC Resolution No. 621181 dated September 21, 2002; therefore, Secretary Teves, in detailing Carabeo to BLGF-CO, did not commit contempt of court. The Ombudsman’s preventive suspension order had recited that Carabeo deliberately failed to disclose all his supposed properties in his SALN, particularly vehicles registered in his name, and the 1,000-square-meter residential lot in Tagaytay City which he failed to disclose in his SALNs for 2001 and 2002; that his continued stay as OIC of the Office of the City Treasurer of Parañaque may prejudice the outcome of the case; and that the evidence of guilt against him was strong given his salary, properties, foreign travels, and club share purchase.

• Enforceability of EO 259: Petitioner argued that EO 259 lacked implementing rules and regulations and was therefore unenforceable; the DOF-RIPS derived from EO 259 its power and authority to gather evidence against DOF officials and employees suspected of graft and corruption.
• Preventive Suspension: Petitioner maintained that prior notice and hearing are required before the Ombudsman may issue a preventive suspension order, and that his counter-affidavit and evidence showed the complaint filed by the DOF-RIPS was baseless, leaving the preventive suspension order without legal basis.
• Due Process: Petitioner alleged that he was deprived of due process because the Ombudsman did not consider the evidence he presented when the Ombudsman approved the recommendation to preventively suspend him.
• Section 10, RA 6713: Petitioner claimed that the complaint against him involved a violation of Section 10 of RA 6713, which entitles him to be informed beforehand of his omission and to take the necessary corrective action.
• Contempt and Detail: Petitioner claimed that his detail to the BLGF-CO violated the TRO issued in CA-G.R. SP No. 91607 and prayed that Secretary Teves be cited for contempt of court.

• Enforceability of EO 259: Whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that the failure to provide implementing rules of EO 259 does not render the same unenforceable.
• Preventive Suspension: Whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in sustaining the preventive suspension imposed by the Ombudsman on Carabeo.
• Section 10, RA 6713: Whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in not considering the complaint against Carabeo a violation of Section 10 of RA 6713 which entitles Carabeo to be informed beforehand and to take the necessary corrective action.

• Enforceability of EO 259: No. EO 259 is internal in nature and needs no implementing rules to be enforceable; moreover, the DOF-RIPS could file criminal and administrative charges even without EO 259 because any concerned citizen may file such charges upon sufficient evidence of culpability.
• Preventive Suspension: No. Prior notice and hearing are not required for a preventive suspension order under Section 24 of RA 6770; such suspension is not a penalty but a preliminary step in an administrative investigation, and the Ombudsman found strong evidence of guilt and statutory grounds.
• Section 10, RA 6713: No. Section 10 of RA 6713 allows corrective measures but does not bar charges under RA 3019, the Revised Penal Code, or RA 1379; no prior notice or corrective action is required before filing those charges.

• Enforceability of EO 259: Petitioner impugned the validity of EO 259 for lack of implementing rules and regulations. The Court found that EO 259 indeed lacks implementing guidelines, but such fact is immaterial and does not affect the validity of the criminal and administrative charges against Carabeo. While the DOF-RIPS derived from EO 259 its power and authority to gather evidence against DOF officials and employees suspected of graft and corruption, the DOF-RIPS need not be vested with such power to validly file criminal and administrative charges, because any concerned ordinary citizen can file such charges if sufficient evidence of culpability exists. Thus, the DOF-RIPS, even without EO 259 and whether as subordinates of the Secretary of Finance or as private citizens, can validly file the charges. The Court also found that EO 259 is basically internal in nature and needs no implementing rules and regulations to be enforceable; it is principally aimed at curbing graft and corruption in the DOF and its attached agencies and covers only officers and employees engaged in revenue collection. DOF-RIPS, created by EO 259, acts as the anti-corruption arm of the DOF that investigates allegations of corruption and files the necessary charges. The “lifestyle check” pertains to the evidence-gathering process itself, and the Court found nothing illegal with it as long as the constitutional and statutory rights of the accused are recognized and respected. The Court noted that publication of EO 259 was no longer disputed, as it was published in the Official Gazette on February 23, 2004.
• Preventive Suspension: Petitioner contended that prior notice and hearing are required before the Ombudsman may issue a preventive suspension order. The Court held that prior notice and hearing are not required in the issuance of a preventive suspension order, such suspension not being a penalty but only a preliminary step in an administrative investigation. Section 24 of RA 6770 does not require that notice and hearing precede preventive suspension, and the Ombudsman is not required to furnish the respondent with a copy of the complaint prior to ordering preventive suspension. Under Section 24, two requisites must concur: first, there must be a prior determination by the Ombudsman that the evidence of respondent’s guilt is strong; second, (a) the offense charged must involve dishonesty, oppression, grave misconduct, or neglect in the performance of duty; (b) the charges would warrant removal from the service; or (c) the respondent’s continued stay in office may prejudice the case filed against him. These requisites were present. The Ombudsman justified the preventive suspension by citing Carabeo’s deliberate failure to disclose all his properties in his SALN, particularly vehicles registered in his name and the 1,000-square-meter Tagaytay lot; his continued stay as OIC may prejudice the outcome of the case; and the evidence of guilt was strong given his annual gross salary of ₱291,036.00, his real and personal properties, his fifteen foreign travels from 1996 to 2004, his club share purchase at The Palms Country Club, and other acquisitions. Whether the evidence of guilt is strong is left to the determination of the Ombudsman by taking into account the evidence before him, and the court cannot substitute its own judgment for that of the Ombudsman absent a clear showing of grave abuse of discretion. Carabeo cannot claim any right against, or damage or injury from, the preventive suspension order, since there is no vested right to a public office or an absolute right to hold it; public office is a public trust or agency. While public officials may rely on due process to protect their security of tenure, such fundamental right cannot be invoked against a preventive suspension order, which is a preventive measure and not a penalty. An order of preventive suspension is not a demonstration of guilt, which can be pronounced only after a trial on the merits.
• Section 10, RA 6713: Carabeo claimed that the complaint against him involved a violation of Section 10 of RA 6713, which entitles him to be informed beforehand of his omission and to take the necessary corrective action. The Court held that while Section 10 of RA 6713 indeed allows for corrective measures, Carabeo is charged not only with violation of RA 6713 but also with violation of the Revised Penal Code, RA 1379, and RA 3019, specifically Sections 7 and 8 thereof. Section 7 of RA 3019 requires every public officer to file a true, detailed, and sworn statement of assets and liabilities, while Section 8 provides that unexplained wealth is prima facie evidence of and a ground for dismissal or removal, and that properties in the name of the spouse and dependents may be taken into consideration when their acquisition through legitimate means cannot be satisfactorily shown. The Court, citing Ombudsman vs. Valeroso, explained that Section 8 speaks of unlawful acquisition of wealth, while Section 7 mandates full disclosure of wealth in the SALN as a means of preventing that evil and maintaining honesty in the public service; SALNs are the means to achieve accountability and allow the public to monitor the fortune of public officials. Carabeo failed to show any requirement under RA 3019 that prior notice of the non-completion of the SALN and its correction precede the filing of charges for violation of its provisions, and neither are these measures needed for the charges of dishonesty and grave misconduct. Based on the foregoing, the Court of Appeals did not commit grave abuse of discretion. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction; it exists where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. No abuse, much less grave abuse, attended the Court of Appeals’ judgment.

• Preventive suspension is not a penalty and requires no prior notice and hearing — A preventive suspension order issued by the Ombudsman is a preliminary step in an administrative investigation, not a punishment or penalty. Prior notice and hearing are not required before its issuance. In this case, the Court upheld Carabeo’s preventive suspension notwithstanding his claim that he was deprived of due process.
• Requisites for Ombudsman preventive suspension under Section 24, RA 6770 — Two requisites must concur: first, there must be a prior determination by the Ombudsman that the evidence of respondent’s guilt is strong; second, any of the following must exist: (a) the offense charged involves dishonesty, oppression, grave misconduct, or neglect in the performance of duty; (b) the charges would warrant removal from the service; or (c) the respondent’s continued stay in office may prejudice the case filed against him.
• The Court found both requisites present because the Ombudsman determined that the evidence of guilt was strong and that the charges involved dishonesty and grave misconduct, warranted removal, and that Carabeo’s continued stay as OIC may prejudice the case.
• Public office is not property; no vested right to hold it — There is no vested right to a public office or an absolute right to hold it; public office is a public trust or agency. While public officials may invoke due process to protect their security of tenure, that right cannot be invoked against a preventive suspension order, which is a preventive measure and not a penalty.
• Internal administrative issuance needs no implementing rules — EO 259 is basically internal in nature, principally aimed at curbing graft and corruption in the DOF and its attached agencies, and covers only officers and employees engaged in revenue collection. It needs no implementing rules and regulations to be enforceable. The Court also held that the DOF-RIPS need not be vested with authority under EO 259 to file charges, because any concerned citizen may file criminal and administrative charges against corrupt government officials upon sufficient evidence.
• Section 10 of RA 6713 does not preclude other charges for SALN non-disclosure — The corrective procedure under Section 10 of RA 6713 does not bar charges under RA 3019, the Revised Penal Code, or RA 1379. No prior notice of the non-completion of the SALN and its correction is required before filing charges for violation of RA 3019, nor are such measures needed for charges of dishonesty and grave misconduct.
• Grave abuse of discretion — Grave abuse of discretion implies capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. It exists where power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. The Court found none in the Court of Appeals’ judgment.

• "Settled is the rule that prior notice and hearing are not required in the issuance of a preventive suspension order, such suspension not being a penalty but only a preliminary step in an administrative investigation." — This states the ratio decidendi on the due process challenge to Carabeo’s preventive suspension and is the Court’s canonical formulation of the rule.
• "Under Section 24 of RA 6770, two requisites must concur to render the preventive suspension order valid. First, there must be a prior determination by the Ombudsman that the evidence of respondent’s guilt is strong. Second, (a) the offense charged must involve dishonesty, oppression, grave misconduct or neglect in the performance of duty; (b) the charges would warrant removal from the service; or (c) the respondent’s continued stay in office may prejudice the case filed against him." — This enumerates the requisites for a valid preventive suspension order under the Ombudsman Act and is frequently cited for that test.
• "At any rate, the Court finds that EO 259 is basically internal in nature needing no implementing rules and regulations in order to be enforceable." — This defines the Court’s treatment of EO 259 and explains why the absence of implementing rules did not invalidate the charges against Carabeo.
• "Significantly, Carabeo failed to show any requirement under RA 3019 that prior notice of the non-completion of the SALN and its correction precede the filing of charges for violation of its provisions. Neither are these measures needed for the charges of dishonesty and grave misconduct, which Carabeo presently faces." — This resolves the claim that Section 10 of RA 6713 entitled Carabeo to prior notice and corrective action before charges could be filed.

• Nera vs. Garcia, 106 Phil. 1031 (1960) — Controlling precedent cited for the rule that preventive suspension is not a penalty but a preliminary step in an administrative investigation, and that prior notice and hearing are not required.
• Buenaseda vs. Flavier, G.R. No. 106719, 21 September 1993, 226 SCRA 645 — Cited for the rule that the disciplining authority has discretion to determine when the evidence of guilt is strong, and the court cannot substitute its own judgment absent grave abuse of discretion.
• Ombudsman vs. Valeroso, G.R. No. 167828, 2 April 2007, 520 SCRA 140 — Cited for the significance of Sections 7 and 8 of RA 3019, the role of the SALN as an accountability and check-and-balance mechanism, and the absence of a vested right to public office.
• Lastimosa vs. Vasquez, 313 Phil. 358 (1995) — Cited for the rule that prior notice and hearing are not required in the issuance of a preventive suspension order.
• Office of the Ombudsman vs. Evangelista, G.R. No. 177211, 13 March 2009, 581 SCRA 350 — Cited together with Lastimosa vs. Vasquez for the same rule on preventive suspension.
• Yasay, Jr. vs. Desierto, 360 Phil. 680 (1998) — Cited for the principle that an order of preventive suspension is not a demonstration of a public official’s guilt, which can be pronounced only after a trial on the merits.
• Domondon vs. Sandiganbayan, 384 Phil. 848 (2000) — Cited for the definition of grave abuse of discretion as capricious and whimsical exercise of judgment equivalent to lack of jurisdiction.

• Section 24, Republic Act No. 6770 (Ombudsman Act of 1989) — Provides that the Ombudsman or his Deputy may preventively suspend any officer or employee under his authority pending investigation if in his judgment the evidence of guilt is strong and any of the statutory conditions exists. The Court applied this provision and held that it does not require prior notice and hearing.
• Section 10, Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees) — Establishes a review of compliance procedure and allows the reporting individual to take corrective action. The Court held that this provision does not bar charges under RA 3019, the Revised Penal Code, or RA 1379, and does not require prior notice or correction before such charges are filed.
• Section 7, Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Requires every public officer to prepare and file a true, detailed, and sworn statement of assets and liabilities. The Court cited this provision in holding that Carabeo’s non-disclosure of assets in his SALN constituted a violation of RA 3019, among others.
• Section 8, Republic Act No. 3019 — Provides that unexplained wealth is prima facie evidence of and a ground for dismissal or removal, and that properties in the name of the spouse and dependents may be taken into consideration when their acquisition through legitimate means cannot be satisfactorily shown. The Court cited this provision in explaining the evil sought to be suppressed and the role of the SALN.
• Executive Order No. 259 — Created the DOF-RIPS as the anti-corruption arm of the Department of Finance. The Court held that it is internal in nature and needs no implementing rules and regulations to be enforceable.
• Republic Act No. 1379 and the Revised Penal Code — Cited as among the laws under which Carabeo was charged, in addition to RA 3019 and RA 6713. The Court noted these charges in rejecting Carabeo’s reliance on Section 10 of RA 6713.

Antonio T. Carpio (ponente), Reynato S. Puno (Chief Justice), Renato C. Corona, Conchita Carpio Morales, Minita V. Chico-Nazario, Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, Teresita J. Leonardo-De Castro, Arturo D. Brion, Diosdado M. Peralta, Lucas P. Bersamin, Mariano C. Del Castillo, Roberto A. Abad, and Martin S. Villarama, Jr.