Elma vs. Jacobi

The presumption that the possessor and user of a falsified document is the forger thereof does not automatically apply; the use of the forged document must be accompanied by circumstances such as close connection in time with the forgery, capacity to undertake the forgery, or close connection with the forgers. Courts will not interfere with the prosecutor's determination of probable cause absent a clear showing of grave abuse of discretion amounting to lack or excess of jurisdiction.

The Presidential Commission on Good Government (PCGG) was created by President Corazon Aquino pursuant to Executive Order No. 1, charged with assisting the President in the recovery of all ill-gotten wealth accumulated by former President Ferdinand Marcos, his relatives and cronies. Executive Order No. 2 authorized the PCGG to request and appeal to foreign governments to freeze ill-gotten wealth. Reiner Jacobi, a foreign national, had an arrangement with the PCGG whereby he would receive a ten percent fee for information and evidence leading to the recovery of Marcos ill-gotten wealth, particularly a US$13.2 billion account in the Union Bank of Switzerland (UBS). Atty. Crispin Reyes acted as Jacobi's counsel in his dealings with the PCGG.

Reiner Jacobi, through his counsel Atty. Crispin Reyes, had an arrangement with the PCGG whereby Jacobi would receive a ten percent fee of any amount actually recovered from the ill-gotten wealth of Ferdinand Marcos based on information and evidence he would furnish. This arrangement was evidenced by letters dated December 22, 1988, May 6, 1991, and December 19, 1991 from then PCGG Commissioner David M. Castro. A similar letter dated August 27, 1998 was sent by new PCGG Chairman Felix M. de Guzman to Jacobi, confirming the PCGG's promise to pay a 10% fee for the US$13.2 billion ill-gotten wealth in the Union Bank of Switzerland (UBS) — this was the De Guzman letter.

On March 8, 1999, respondents filed with the Sandiganbayan a verified Petition for Mandamus, Prohibition and Certiorari against the petitioners, seeking to compel the PCGG to recover the UBS account. The De Guzman letter was attached as Annex E, and a June 24, 1998 letter from PCGG Chairman Magtanggol Gunigundo was attached as Annex G. The petition alleged that Chairman Elma was working with Swiss lawyers to frustrate the PCGG's recovery efforts. Atty. Reyes acted as Jacobi's counsel; Jacobi did not sign or verify the petition.

On March 15, 1999, Atty. Reyes, through the Anti-Graft League of the Philippines, Inc., filed a complaint with a similar thrust against Chairman Elma with the Office of the Ombudsman, attaching the Sandiganbayan petition and its annexes. Later, Atty. Reyes filed an Urgent Manifestation withdrawing the De Guzman letter and the Gunigundo letter as annexes, explaining that he had been prompted to withdraw these letters after learning of reports questioning their authenticity. Atty. Reyes asserted that Jacobi had nothing to do with the preparation nor with the attachment of these letters.

The PCGG reacted by executing affidavits from Chairman De Guzman, Director Danilo Daniel, and Lilia Yanga stating that what appeared as their signatures and initials at the bottom of the De Guzman letter actually pertained to signatures affixed to another letter dated August 25, 1998 sent to the Philippine Ambassador to Switzerland, Tomas Syquia. An NBI report dated March 16, 1999 confirmed that the De Guzman letter was a falsified document, as the questioned signatures and entries were "lifted/extracted probably from the original and/or xerox copy" of the August 25, 1998 letter.

On March 22, 1999, Chairman Elma filed an affidavit-complaint with the DOJ charging respondents with falsification and use of falsified documents. Atty. Reyes filed his counter-affidavit adopting the explanation in his Urgent Manifestation, claiming good faith and imputing the falsification to Director Daniel. Jacobi, through Atty. Cynthia Peñalosa, denied any participation in the falsification, stating that Atty. Reyes had informed him that the letter had been given to him by Director Daniel. Director Daniel denied giving Atty. Reyes the falsified letter, stating he did not have a copy of it.

Procedural complications arose when the Padilla law firm filed its Entry of Appearance for Jacobi on July 13, 1999, while Atty. Peñalosa filed an unverified petition for review with the DOJ Secretary on July 15, 1999. Jacobi, through the Padilla law firm, later filed a motion for reconsideration, and subsequently, the Sanidad law firm entered its appearance as "sole and principal counsel" for Jacobi, attaching facsimile letters attesting to the lack of authority of Atty. Peñalosa to represent Jacobi as of June 29, 1999. Atty. Peñalosa later withdrew as counsel, attaching letters-explanation showing that Jacobi had repeatedly requested her to proceed with filing the petition.

• Improper Simultaneous Remedies: Petitioners claimed that Usec. Gutierrez gravely abused her discretion when she sustained the impropriety of Jacobi's simultaneous resort to two different remedies — filing a petition for review and a motion for reconsideration — through two different counsels, and filing a second motion for reconsideration of an adverse resolution through another counsel.
• Fabricated Termination of Counsel: Petitioners argued that Jacobi's first and second MRs were "purposely devised… to make it appear that Atty. Peñalosa was not authorized to file the unverified petition for review," and that nothing in the records showed Jacobi terminated Atty. Peñalosa's services before she filed the petition.
• Dubious Authenticity of Letters: Petitioners asserted that the Padilla and Peñalosa letters were of dubious authenticity because they did not contain the actual date of transmittal by Jacobi to their addressees, as would normally appear at the top edge of a faxed document.
• Overturning the Cuevas Resolution: Petitioners argued that Usec. Gutierrez improperly overruled the resolution of former Secretary Cuevas, effectively overturning it without authority.
• Presumption of Authorship: Petitioners relied on the presumption that the holder of a forged document is presumed to be the forger, asserting that respondents failed to rebut this presumption with credible evidence, and that the withdrawal of the De Guzman letter cannot negate criminal liability already incurred.

• Improper Remedy: Respondents questioned the propriety of the petitioners' resort to a certiorari petition instead of a petition for review under Rule 43, positing that even assuming certiorari is proper, the petition is insufficient in form and substance due to failure to implead the DOJ and to observe the doctrine of hierarchy of courts.
• No Grave Abuse of Discretion: Respondents asserted that the petitioners cannot compel the prosecutor to proceed with the case after finding that no probable cause exists, since the determination of probable cause involves an exercise of discretion.
• Failure to Present Original: Respondents added that the petitioners' failure to present the original of the allegedly forged document is fatal to their accusations of forgery.
• Inapplicability of Presumption: Respondents argued that the presumption of authorship is inapplicable to and rebutted by Jacobi and Atty. Reyes respectively: the presumption cannot apply to Jacobi, who was never in possession of the De Guzman letter, had no participation in the preparation of the Sandiganbayan petition, and did not verify it; and Atty. Reyes sufficiently explained how he came into possession of the letter.

• Proper Remedy: Whether certiorari under Rule 65 is the proper remedy to question the DOJ's determination of probable cause.
• Hierarchy of Courts: If certiorari is proper, whether the petition should have been filed with the Court of Appeals under the doctrine of hierarchy of courts.
• Procedural Grave Abuse: Whether the DOJ committed grave abuse of discretion in effectively allowing Jacobi to (i) simultaneously avail of the remedy of a petition for review and a motion for reconsideration, and (ii) file a second motion for reconsideration.
• Substantive Grave Abuse: Whether the DOJ committed grave abuse of discretion in finding that no probable cause for falsification and use of falsified document exists against the respondents.

• Proper Remedy: Yes. Certiorari under Rule 65 is the proper remedy to assail the DOJ's determination of the presence or absence of probable cause, since an investigating prosecutor's function lacks the element of adjudication essential to an appeal under Rule 43, and Memorandum Circular No. 58 bars an appeal from the Secretary of Justice's resolutions on preliminary investigations except for offenses punishable by reclusion perpetua to death.
• Hierarchy of Courts: Yes, but the Court resolved the case on its merits. The petitioners should have filed the petition with the Court of Appeals, which has concurrent jurisdiction with the Supreme Court to issue the writ of certiorari, absent special and important reasons or exceptional and compelling circumstances justifying direct recourse.
• Procedural Grave Abuse: No. The DOJ did not commit grave abuse of discretion in allowing Jacobi to avail of multiple remedies, given the factual peculiarities of the case, including Atty. Reyes' validly filed motion for reconsideration and the need to avoid conflicting rulings on the same inseparable subject matter.
• Substantive Grave Abuse: No. The DOJ did not commit grave abuse of discretion in finding no probable cause for falsification and use of falsified documents, as the presumption of authorship did not apply to Jacobi and was sufficiently explained by Atty. Reyes.

• Proper Remedy: An investigating prosecutor performs functions of a quasi-judicial nature in conducting a preliminary investigation, but since he does not determine the rights of any party or pronounce the respondent's guilt or innocence, his function lacks the element of adjudication essential to an appeal under Rule 43. The exclusion of the DOJ from the enumeration of quasi-judicial agencies in Rule 43 is deliberate, being in consonance with the constitutional power of control lodged in the President over executive departments. However, Memorandum Circular No. 58 bars an appeal from the Secretary of Justice's resolutions on preliminary investigations except for offenses punishable by reclusion perpetua to death, leaving certiorari as the only remedial avenue. The petitioner must allege and show that the DOJ acted with grave abuse of discretion.

• Hierarchy of Courts: Under the doctrine of hierarchy of courts, a direct recourse to the Supreme Court is disallowed where the issuance of an extraordinary writ is also within the competence of another court. Direct invocation of the Court's original jurisdiction may be allowed only if there are special and important reasons clearly and specifically set out in the petition or where exceptional and compelling circumstances justify it. The petitioners did not advance any such reasons, but the Court resolved the case on its merits to avoid further delay, leniently reading the petition and assuming import to the allegation that respondents falsified a document forming part of the PCGG's official records.

• Procedural Grave Abuse: The mere filing of a notice of appearance of a new counsel does not automatically give rise to the presumption that the present counsel of record has been substituted or that his authority has been withdrawn. Absent a formal withdrawal of appearance filed by Atty. Peñalosa, the Padilla law firm is considered merely as a collaborating counsel. However, the July 19, 1999 Manifestation, filed with the DOJ only on July 20, 1999, cannot undo Atty. Peñalosa's earlier filing of the petition for review, which was valid and effective at the time it was done. Prosecutor Zuño's ruling on Jacobi's second MR and Atty. Reyes' first MR cannot be appreciated as grave abuse of discretion because it provided ample justification — the avoidance of the possibility of two conflicting rulings on two motions treating of the same inseparable subject matter. When technical rules of procedure desert their proper office as an aid to justice and become a hindrance to its attainment, their invocation deserves the least consideration from the Court.

• Substantive Grave Abuse: The determination of probable cause is an executive function primarily lodged with the DOJ. Courts cannot order the prosecution of one against whom the prosecutor has not found a prima facie case, and cannot substitute their own judgment for that of the Executive. To justify judicial intrusion, the petitioner must clearly show that the prosecutor gravely abused his discretion amounting to lack or excess of jurisdiction, exercising his power in an arbitrary and despotic manner by reason of passion or personal hostility. The presumption of authorship of a forged document applies when a person had in his possession a falsified document and made use of it, taking advantage of it and/or profiting from such use. However, possession alone is not enough; the use of the document and the existence of circumstances such as close connection in time with the forgery, capacity to undertake the forgery, or close connection with the forgers is still necessary. The presumption did not apply to Jacobi because his use of the De Guzman letter was placed in doubt — he was not in the country when the Sandiganbayan petition was filed, his signature was absent from the petition and its verification, and there was a seven-month interval between the date of the letter and the filing of the petition. The professional relationship between Jacobi and Atty. Reyes called for a different appreciation of the facts, as matters of ordinary judicial procedure are within the exclusive authority of the attorney. Atty. Reyes sufficiently explained his possession and use of the forged letter, as his account that the letter was handed to him by Director Daniel was consistent with the NBI report's finding that the signatures were lifted from a letter in the PCGG's records. For the crime of knowingly introducing a falsified document, the accused's knowledge of the falsity is an element, and no evidence was presented to show respondents' knowledge at the time the letter was annexed.

• Presumption of Authorship in Forgery — The presumption that the possessor and user of a falsified document is the forger thereof does not automatically apply upon mere possession and use. The use of the forged document must be accompanied by circumstances such as: (a) the use is so closely connected in time with the forgery; (b) the user may be proved to have the capacity to undertake the forgery; or (c) such close connection with the forgers to create a reasonable link. In this case, the presumption did not apply to Jacobi because his use of the letter was in doubt, and Atty. Reyes sufficiently rebutted the presumption through his explanation that the letter was handed to him by Director Daniel, consistent with the NBI report's findings.

• Non-Interference in Prosecutorial Discretion — Courts adopt a policy of non-interference in the conduct of preliminary investigations, leaving the investigating prosecutor sufficient latitude of discretion in determining what constitutes sufficient evidence to establish probable cause. To justify judicial intrusion, the petitioner must clearly show that the prosecutor gravely abused his discretion amounting to lack or excess of jurisdiction, exercising his power in an arbitrary and despotic manner by reason of passion or personal hostility, so patent and gross as to amount to an evasion or unilateral refusal to perform the duty enjoined.

• Hierarchy of Courts — A direct recourse to the Supreme Court is disallowed where the issuance of an extraordinary writ is also within the competence of another court. Direct invocation of the Court's original jurisdiction may be allowed only if there are special and important reasons clearly and specifically set out in the petition or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of the Court's primary jurisdiction.

• Attorney's Authority Over Procedural Matters — Under Rule 138 of the Rules of Court, matters of ordinary judicial procedure are within the exclusive authority of the attorney, including what action or pleading to file, what should be the theory of the case, and how the claim or defense may be proved. The annexation of a document in a petition falls within these matters, and the attorney's possession of a document is considered the client's constructive possession, being a mere extension of the personality of the principal.

• "By weighing the evidence submitted by the parties in a preliminary investigation and by making an independent assessment thereof, an investigating prosecutor is, to that extent, performing functions of a quasi-judicial nature in the conduct of a preliminary investigation. However, since he does not make a determination of the rights of any party in the proceeding, or pronounce the respondent's guilt or innocence (thus limiting his action to the determination of probable cause to file an information in court), an investigating prosecutor's function still lacks the element of adjudication essential to an appeal under Rule 43." — This passage establishes the doctrinal basis for holding that certiorari under Rule 65, not appeal under Rule 43, is the proper remedy to assail the DOJ's determination of probable cause.

• "The above case law instructs us that if a person had in his possession (actual or constructive) a falsified document and made use of it, taking advantage of it and/or profiting from such use, the presumption that he authored the falsification also applies." — This passage articulates the canonical formulation of the presumption of authorship in forgery cases, synthesizing the Court's jurisprudence from U.S. vs. Castillo through Caubang vs. People.

• "Since it is the PCGG that has the only copy of Chairman De Guzman's letter to Ambassador Syquia (except of course the Ambassador) in its files bearing the same distinguishing entries from where the [De Guzman] letter was 'lifted/extracted', we cannot see our way clear how the falsification can be attributed to respondent Reyes. It is more credible that the questioned letter must have been 'doctored' in the PCGG, which is the repository of all official communications of former Chairman De Guzman, and passed to [Atty. Reyes] who accepted the same not knowing its falsity." — This quotation from Usec. Gutierrez's resolution, adopted by the Court, explains why Atty. Reyes' explanation was deemed sufficient to rebut the presumption of authorship.

• "We remind the petitioners that when the technical rules of procedure desert its proper office as an aid to justice and becomes a great hindrance to the attainment of justice, its invocation deserves the least consideration from this Court. Rules of procedure must yield, when proper and under justifiable causes and/or circumstances (as what has been done in the present case), in the interest of substantial justice." — This passage articulates the Court's rationale for not finding grave abuse of discretion in the DOJ's procedural rulings, emphasizing that technical rules must yield to substantial justice.

• U.S. vs. Castillo, 6 Phil. 453 (1906) — Controlling precedent establishing the rule that the utterance or use of a forged instrument, when unexplained, is strong evidence tending to establish that the user either forged the instrument or caused it to be forged.
• People vs. Astudillo, 60 Phil. 338 (1934) — Followed for the clarification that for the presumption of authorship to apply, the use of the forged document must be accompanied by circumstances such as close connection in time with the forgery, capacity to undertake the forgery, or close connection with the forgers.
• Caubang vs. People, G.R. No. 62634, June 26, 1992, 210 SCRA 377 — Followed for the application of the presumption of authorship where the accused was the authorized representative who submitted the falsified document, and for the ruling that the accused is presumed to be the forger in the absence of credible explanation.
• Orosa vs. Roa, 527 Phil. 347 (2006) — Followed for the observation that the exclusion of the DOJ from the enumeration of quasi-judicial agencies in Rule 43 is deliberate, being in consonance with the constitutional power of control lodged in the President over executive departments.
• Vergara, Sr. vs. Judge Suelto, 240 Phil. 719 (1987) — Followed for the judicial policy disallowing direct recourse to the Supreme Court where the issuance of an extraordinary writ is also within the competence of another court.
• People vs. Cuaresma, 254 Phil. 418 (1989) — Followed for the reaffirmation that direct invocation of the Court's original jurisdiction may be allowed only if there are special and important reasons clearly and specifically set out in the petition.
• Choa vs. Judge Chiongson, 323 Phil. 438 (1996) — Distinguished; the Court held that the petitioners' reliance on this case was misplaced because no evidence was presented to show respondents' knowledge of the falsity of the De Guzman letter at the time it was annexed.
• Alcaraz vs. Gonzalez, G.R. No. 164715, September 20, 2006, 502 SCRA 518 — Followed for the ruling that courts cannot order the prosecution of one against whom the prosecutor has not found a prima facie case.

• Article 171, paragraph 2, Revised Penal Code — Falsification by a public officer, employee, or notary who, taking advantage of his official position, causes it to appear that persons have participated in any act or proceeding when they did not in fact so participate. This was the provision under which respondents were charged.
• Article 172, paragraphs 1 and 3, Revised Penal Code — Falsification by private individual and use of falsified documents. Paragraph 1 covers any private individual who commits falsification in any public or official document; paragraph 3 covers any person who knowingly introduces in evidence in any judicial proceeding, or uses, any false document. These were the provisions under which respondents were charged.
• Rule 65, Section 5, Rules of Court — Requires that when a petition relates to acts of a quasi-judicial agency, the petitioner shall join as private respondent the person or persons interested in sustaining the proceedings, and the public respondent. The Court held that the petitioners properly impleaded Usec. Gutierrez as public respondent.
• Rule 138, Section 23, Rules of Court — Provides that matters of ordinary judicial procedure are within the exclusive authority of the attorney. The Court applied this provision to hold that the annexation of the De Guzman letter in the Sandiganbayan petition fell within matters within Atty. Reyes' exclusive authority as counsel.
• Memorandum Circular No. 58, Office of the President — Bars an appeal from the decisions/orders/resolutions of the Secretary of Justice on preliminary investigations of criminal cases via a petition for review, except for those involving offenses punishable by reclusion perpetua to death. This left certiorari as the only remedial avenue for the petitioners.
• Department Circular No. 70, DOJ (2000 National Prosecution Service Rule on Appeal), Section 3 — Provides that an appeal shall be taken within fifteen days from receipt of the resolution or of the denial of the motion for reconsideration, and only one motion for reconsideration shall be allowed. The Court considered this in evaluating the procedural irregularities.
• Executive Order No. 1 (1986) — Created the PCGG and charged it with the task of assisting the President in the recovery of all ill-gotten wealth accumulated by former President Marcos, his relatives and cronies.
• Executive Order No. 2 (1986) — Authorized the PCGG to request and appeal to foreign governments to freeze ill-gotten wealth and otherwise prevent their transfer, conveyance, encumbrance, concealment or liquidation.

Carpio, J. (Chairperson), Perez, J., Sereno, J., and Reyes, J., concurred.

N/A — No dissenting opinions were noted in the provided text.