Estrada vs. Desierto

The Court of Appeals does not have jurisdiction to entertain original petitions for certiorari from decisions or resolutions of the Office of the Ombudsman in criminal cases; such petitions must be filed directly with the Supreme Court. The Court will not interfere with the Ombudsman's findings in preliminary investigations absent a clear case of grave abuse of discretion amounting to lack or excess of jurisdiction.

Former President Joseph Ejercito Estrada filed a criminal complaint before the Office of the Ombudsman against officials of the Bureau of Internal Revenue (BIR) and Citibank for alleged violations of the Foreign Currency Deposits Act (Rep. Act No. 6426), Article 177 of the Revised Penal Code, and Section 3(e) of the Anti-Graft and Corrupt Practices Act (Rep. Act No. 3019). The complaint arose from the BIR's constructive distraint of petitioner's foreign currency deposit account at Citibank Greenhills Branch. The Office of the Ombudsman dismissed the complaint for lack of probable cause, prompting petitioner to file a petition for certiorari under Rule 65 before the Court of Appeals.

On 23 January 2001, the Bureau of Internal Revenue (BIR) placed former President Joseph Ejercito Estrada's foreign currency deposit account at Citibank Greenhills Branch under constructive distraint. Contending that the BIR action was unlawful, petitioner filed on 31 January 2001 a complaint before the Office of the Ombudsman against respondent BIR officials (Deputy Commissioner Lilian Hefti, Revenue Officer I Archangel A. Albiento, and Revenue Officer II Aniceto T. Dagdag, Jr.) and respondent Citibank officers (Riza P. Del Rosario, Victor Q. Lim, and Catherine Weir) for allegedly violating Section 8 of the Foreign Currency Deposits Act (Rep. Act No. 6426), Article 177 of the Revised Penal Code, and Section 3(e) of the Anti-Graft and Corrupt Practices Act (Rep. Act No. 3019).

On 17 September 2001, the Evaluation and Preliminary Investigation Bureau (EPIB) of the Office of the Ombudsman issued a Resolution recommending the dismissal of the complaint for want of probable cause to indict the respondent bank and BIR officials. On 19 November 2001, Paul Elmer Clemente, Legal Counsel and Acting Director of the Office of the Chief Legal Counsel, issued a Memorandum approving the EPIB's recommendation, a copy of which was received by petitioner on 01 February 2002. On 15 February 2002, petitioner filed a Motion for Reconsideration upon the ground that errors of fact and law were committed prejudicial to his interest. On 26 February 2002, respondents EPIB officers issued an order, approved by respondent Desierto, denying petitioner's Motion for Reconsideration, a copy of which was received by petitioner on 06 June 2002.

On 12 July 2002, petitioner filed a petition for certiorari under Rule 65 before the Court of Appeals. On 29 July 2002, the Court of Appeals promulgated the assailed resolution dismissing the petition on the ground that it did not fall under its jurisdiction pursuant to Rep. Act No. 6770, citing Fabian vs. Desierto. The appellate court ruled that the Court of Appeals is vested with exclusive appellate jurisdiction involving review of decisions or orders of the Office of the Ombudsman in administrative disciplinary cases only. On 15 August 2002, petitioner moved for reconsideration, which the Court of Appeals denied on 20 November 2002, reiterating its earlier ruling.

In dismissing the complaint for Usurpation of Official Function under Article 177 of the Revised Penal Code, the Ombudsman reasoned that respondent Hefti, as Deputy Commissioner of BIR, was designated Officer-In-Charge of the BIR by President Gloria Macapagal-Arroyo, as evidenced by her Memorandum of Appointment dated January 23, 2001, and could thus legally exercise the duties and functions pertaining to the BIR Commissioner, including the issuance of a constructive distraint. With respect to the alleged violation of Section 3(e) of Rep. Act No. 3019, the Ombudsman found that the issuance of the notice of distraint was done in accordance with Hefti's function as Officer-In-Charge, guided by observations regarding the disparity between petitioner's declared income and the amount established in the impeachment trial, and that petitioner failed to show undue injury suffered. Regarding the violation of Section 8 of Rep. Act No. 6426, the Ombudsman ruled that the absolute confidentiality of foreign currency deposit accounts does not apply to petitioner since the protection under the law is intended only for depositors who are non-residents and not engaged in trade and business in the Philippines, citing Salvacion vs. Central Bank and China Bank.

• Concurrent Jurisdiction of the Court of Appeals: Petitioner argued that the Court of Appeals has concurrent jurisdiction with the Supreme Court in original actions for certiorari concerning dispositions made by the Office of the Ombudsman of criminal cases that underwent preliminary investigation.
• Unconstitutionality of Section 14 of Rep. Act No. 6770: Petitioner argued that Section 14 of Rep. Act No. 6770 is unconstitutional as it allegedly provides for direct appeal to the Supreme Court in contravention of Section 5(2), Article VIII of the Constitution, and that it effectively increased the appellate jurisdiction of the Supreme Court without its advice and concurrence in violation of Section 30, Article VI of the Constitution.
• Proper Recourse under Tirol, Jr. vs. Del Rosario: Petitioner argued that the proper recourse from an adverse decision of the Ombudsman in criminal cases is a petition for certiorari under Rule 65 before the Court of Appeals pursuant to Tirol, Jr. vs. Del Rosario.
• Doctrine of Hierarchy of Courts: Petitioner contended that as the doctrine of hierarchy of courts precludes the immediate invocation of the Supreme Court's power of review, he correctly filed his petition for certiorari with the Court of Appeals.

N/A — The decision does not separately recount the respondents' arguments beyond the Court's discussion of the jurisdictional issue and the Ombudsman's reasoning in dismissing the complaint.

• Jurisdiction of the Court of Appeals: Whether the Court of Appeals has jurisdiction to entertain original petitions for certiorari from decisions of the Office of the Ombudsman in criminal cases.
• Constitutionality of Section 14 of Rep. Act No. 6770: Whether Section 14 of Rep. Act No. 6770 is unconstitutional for allegedly providing for direct appeal to the Supreme Court in contravention of the Constitution.
• Grave Abuse of Discretion: Whether the Ombudsman committed grave abuse of discretion in dismissing petitioner's complaint for lack of probable cause.

• Jurisdiction of the Court of Appeals: No. The Court of Appeals does not have jurisdiction to entertain original petitions for certiorari from decisions of the Office of the Ombudsman in criminal cases. The remedy of aggrieved parties from resolutions of the Ombudsman finding probable cause in criminal cases, when tainted with grave abuse of discretion, is to file an original action for certiorari with the Supreme Court, not with the Court of Appeals.
• Constitutionality of Section 14 of Rep. Act No. 6770: Not reached. The Court declined to pass upon the constitutionality of Section 14 of Rep. Act No. 6770, as the jurisdictional issue was already settled by case law in Kuizon vs. Ombudsman, Mendoza-Arce vs. Office of the Ombudsman (Visayas), and Perez vs. Office of the Ombudsman.
• Grave Abuse of Discretion: No. The Court did not perceive any clear case of grave abuse of discretion on the part of the public respondents when they issued the Resolution dated 17 September 2001 and the Order dated 19 September 2001 dismissing the complaint for lack of probable cause.

• Jurisdiction of the Court of Appeals: The Court applied the doctrine of stare decisis, citing Kuizon vs. Ombudsman, which held that the Court of Appeals correctly ruled that its jurisdiction extends only to decisions of the Office of the Ombudsman in administrative cases. The Court reiterated that when Section 27 of Rep. Act No. 6770 was declared unconstitutional in Fabian, that declaration involved only appeals by certiorari under Rule 45 from decisions in administrative disciplinary actions. It cannot be taken into account where an original action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as from an incident in a criminal action. The Court further cited Mendoza-Arce vs. Office of the Ombudsman (Visayas) and Perez vs. Office of the Ombudsman, which drove home the point that the remedy of aggrieved parties from resolutions of the Ombudsman in criminal cases, when tainted with grave abuse of discretion, is to file an original action for certiorari with the Supreme Court and not with the Court of Appeals. The Court held that since the issue of jurisdiction had already been resolved in the above-cited cases, it is a salutary and necessary judicial practice to apply the rulings therein to the subject petition.

• Constitutionality of Section 14 of Rep. Act No. 6770: The Court invoked the basic principle that a constitutional issue may only be passed upon if essential to the decision of a case or controversy. Even if all the requisites for judicial review are present, the Court will not entertain a constitutional question unless it is the very lis mota of the case or if the case can be disposed of on some other grounds, such as the application of a statute or general law. Citing Sotto vs. Commission on Elections, the Court held that a court should not pass upon a constitutional question and decide a law to be unconstitutional or invalid unless such question is raised by the parties, and when it is raised, if the record also presents some other ground upon which the court may rest its judgment, that course will be adopted and the constitutional question will be left for consideration until a case arises in which a decision upon such question will be unavoidable. Since the question of who has jurisdiction to entertain petitions for certiorari questioning the Ombudsman's orders or resolutions in criminal cases can be answered by resorting to the aforecited cases, there was no need to delve into the constitutionality of Section 14 of Rep. Act No. 6770.

• Grave Abuse of Discretion: The Court defined grave abuse of discretion as such capricious and whimsical exercise of judgment which is equivalent to an excess or lack of jurisdiction, so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. The Court found no grave abuse of discretion in the Ombudsman's dismissal of the complaint for Usurpation of Official Function, as respondent Hefti was designated Officer-In-Charge of the BIR and could legally exercise the duties and functions pertaining to the BIR Commissioner, including the issuance of a constructive distraint. With respect to the violation of Section 3(e) of Rep. Act No. 3019, the Court found that the issuance of the notice of distraint was done in accordance with Hefti's function, and petitioner failed to establish actual damage or injury. Regarding the violation of Section 8 of Rep. Act No. 6426, the Court noted that even assuming the Ombudsman's reliance on the "whereas" clause of P.D. No. 1246 and Salvacion was erroneous, the error was not of a degree that would amount to a clear case of grave abuse of discretion. The Court deferred to the policy of non-interference in the conduct of preliminary investigations, as it is not sound practice to depart from the policy of non-interference in the Ombudsman's exercise of discretion to determine whether or not to file information against an accused.

• Stare Decisis et non quieta movere — Stand by the decisions and disturb not what is settled. The Court applied this doctrine in resolving the jurisdictional issue, holding that since the question of who has jurisdiction to entertain petitions for certiorari questioning the Ombudsman's orders or resolutions in criminal cases had already been resolved in Kuizon, Mendoza-Arce, and Perez, it was necessary to apply those rulings to the subject petition.

• Grave Abuse of Discretion — Such capricious and whimsical exercise of judgment which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility. The Court applied this standard in reviewing the Ombudsman's dismissal of the complaint, finding no grave abuse of discretion.

• Policy of Non-Interference in Preliminary Investigations — The Court will not interfere with the Ombudsman's exercise of discretion to determine whether or not to file information against an accused, absent a clear case of grave abuse of discretion. The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well, as the functions of the courts would be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings.

• Constitutional Questions Not Entertained Unless Essential — A constitutional issue may only be passed upon if essential to the decision of a case or controversy. Even if all the requisites for judicial review are present, the Court will not entertain a constitutional question unless it is the very lis mota of the case or if the case can be disposed of on some other grounds, such as the application of a statute or general law.

• "In dismissing petitioners' petition for lack of jurisdiction, the Court of Appeals cited the case of Fabian vs. Desierto. The appellate court correctly ruled that its jurisdiction extends only to decisions of the Office of the Ombudsman in administrative cases." — This passage from Kuizon v. Ombudsman, quoted by the Court, establishes the controlling rule that the Court of Appeals' jurisdiction over Ombudsman decisions is limited to administrative disciplinary cases.

• "In fine, we hold that the present petition should have been filed with this Court." — This passage from Kuizon v. Ombudsman, quoted by the Court, states the direct holding that original actions for certiorari from Ombudsman resolutions in criminal cases must be filed with the Supreme Court, not the Court of Appeals.

• "By grave abuse of discretion is meant such capricious and whimsical exercise of judgment which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility." — This passage defines the standard of grave abuse of discretion applied by the Court in reviewing the Ombudsman's dismissal of the complaint.

• "It is axiomatic that not every erroneous conclusion of law or fact is abuse of discretion." — This passage articulates the principle that mere error in the Ombudsman's findings does not constitute grave abuse of discretion warranting judicial intervention.

• Fabian vs. Desierto, G.R. No. 129742, 295 SCRA 470 (1998) — Controlling precedent cited by the Court of Appeals and discussed by the Supreme Court; declared Section 27 of Rep. Act No. 6770 unconstitutional insofar as it provided for appeals to the Supreme Court from decisions of the Ombudsman in administrative disciplinary cases, and ruled that such appeals should be taken to the Court of Appeals under Rule 43.

• Tirol, Jr. vs. Del Rosario, G.R. No. 135913, 317 SCRA 779 (1999) — Cited by petitioner; the Court noted that this case ruled that Rep. Act No. 6770 does not provide for the remedy of appeal from decisions of the Ombudsman in criminal or non-administrative cases, and that an aggrieved party may avail himself of the original petition for certiorari when circumstances warrant.

• Kuizon vs. Ombudsman, G.R. Nos. 140619-24, 354 SCRA 158 (2001) — Controlling precedent; held that the Court of Appeals' jurisdiction extends only to decisions of the Office of the Ombudsman in administrative cases, and that an original action for certiorari under Rule 65 from an incident in a criminal action should be filed with the Supreme Court.

• Mendoza-Arce vs. Office of the Ombudsman (Visayas), G.R. No. 149148, 380 SCRA 325 (2002) — Followed; reiterated that the remedy of aggrieved parties from resolutions of the Ombudsman in criminal cases, when tainted with grave abuse of discretion, is to file an original action for certiorari with the Supreme Court.

• Perez vs. Office of the Ombudsman, G.R. No. 131445 (2004) — Followed; held that in cases where the aggrieved party questions the Ombudsman's finding of lack of probable cause, the remedy of certiorari under Rule 65 must be filed with the Supreme Court.

• Sotto vs. Commission on Elections, 76 Phil. 516 (1946) — Cited for the principle that a court should not pass upon a constitutional question if the record presents some other ground upon which the court may rest its judgment.

• Salvacion vs. Central Bank and China Bank, 278 SCRA 27 (1997) — Cited by the Ombudsman for the proposition that only foreign currency deposits of foreign lenders and investors are given protection and incentives by the Foreign Currency Deposits Act, and that the law cannot be utilized to perpetuate injustice.

• Section 14, Rep. Act No. 6770 (The Ombudsman Act of 1989) — The "Restrictions" provision stating that no court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman, except the Supreme Court, on pure question of law. The Court declined to pass upon its constitutionality, as the jurisdictional issue was already settled by case law.

• Section 27, Rep. Act No. 6770 — Declared unconstitutional in Fabian insofar as it provided for appeals to the Supreme Court from decisions of the Ombudsman in administrative disciplinary cases; the Court clarified that this declaration is involved only whenever an appeal by certiorari under Rule 45 is taken from a decision in an administrative disciplinary action.

• Section 8, Rep. Act No. 6426 (Foreign Currency Deposits Act) — The provision on confidentiality of foreign currency deposits; the Ombudsman ruled that the protection under the law is intended only for depositors who are non-residents and not engaged in trade and business in the Philippines.

• Article 177, Revised Penal Code — The provision on Usurpation of Official Function; the Ombudsman found that respondent Hefti was clothed with authority to issue the notice of distraint as Officer-In-Charge of the BIR.

• Section 3(e), Rep. Act No. 3019 (Anti-Graft and Corrupt Practices Act) — The provision penalizing public officers who act with manifest partiality, evident bad faith, or gross inexcusable negligence causing undue injury; the Ombudsman found that petitioner failed to establish actual damage or injury.

• Section 5(2), Article VIII, Constitution — Cited by petitioner in arguing that Section 14 of Rep. Act No. 6770 is unconstitutional for allegedly providing for direct appeal to the Supreme Court in contravention of the exclusive list of cases falling under the appellate jurisdiction of the Supreme Court.

• Section 30, Article VI, Constitution — Cited by petitioner in arguing that Section 14 of Rep. Act No. 6770 effectively increased the appellate jurisdiction of the Supreme Court without its advice and concurrence.

• Rule 65, 1997 Rules of Civil Procedure — The rule on certiorari; the Court held that the remedy of aggrieved parties from resolutions of the Ombudsman in criminal cases, when tainted with grave abuse of discretion, is to file an original action for certiorari with the Supreme Court.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, and Garcia, JJ., concurred. Corona, J., was on leave.

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