Filipino vs. Macabuhay

The one-year period in Section 20(5) of R.A. No. 6770 is directory, not mandatory, because the provision uses “may”; the Ombudsman may still investigate a complaint filed after one year. Dismissal under R.A. No. 6713 stands where the employee was given a reasonable opportunity to be heard and substantial evidence supports the charge.

Petitioner Lorna Frances Filipino was the Chief of the Legal Information and Compliance Division of the Bureau of Food and Drugs Administration (BFAD). Respondent F. Walter R. Macabuhay represented Drugmakers’ Laboratories, Inc., the company involved in the administrative complaint. The charge was lodged before the Office of the Ombudsman under R.A. No. 6713, R.A. No. 3019, and P.D. No. 807, with R.A. No. 6713’s prohibition on soliciting or accepting loans and its administrative penalty provisions framing the proceeding.

At the time material to the complaint, petitioner Lorna Frances Filipino headed the Legal Information and Compliance Division of the BFAD, while respondent F. Walter R. Macabuhay acted for Drugmakers’ Laboratories, Inc. On October 5, 1995, respondent filed before the Ombudsman a Complaint-Affidavit charging petitioner with soliciting a loan from the company, in violation of R.A. No. 6713, R.A. No. 3019, and P.D. No. 807. Respondent alleged that sometime in January 1993, petitioner demanded a loan of P110,000.00 from the company; that because of petitioner’s disciplinary power and supervisory authority, the company succumbed to her demands and issued UCPB Check No. 331512 in the amount of P110,000.00, supported by Cash Voucher No. 36203 in petitioner’s name; and that the check was issued to a certain Marites L. Vilchez upon petitioner’s request.

In her Counter-Affidavit, petitioner denied the allegations and claimed that the transaction was purely between Drugmakers and Vilchez; that she did not receive any demand letter from respondent; and that Vilchez had fully paid the loan as evidenced by an Acknowledgment Receipt dated May 2, 1997. Petitioner submitted the February 7, 1997 Affidavit of Vilchez, who attested that she was the debtor of the subject loan; that she came to know respondent through a friend, Arlene Piago; and that respondent loaned her P110,000.00 in exchange for jewelry obtained by Evangeline C. Del Mundo, a principal officer of the company. In an Affidavit dated September 1, 1997, Del Mundo denied Vilchez’s allegations and claimed that the company was not engaged in the business of financing or lending; she denied knowing Piago and alleged that the P110,000.00 was loaned to petitioner; she denied buying any jewelry from Vilchez and claimed that it would be absurd for her to issue a company check for personal transactions, more so for goods she had not received.

During the preliminary conference on November 25, 1997, petitioner reserved the right to a formal hearing to cross-examine the witnesses and evaluate the documentary evidence against her. On the scheduled hearing on May 19, 1998, petitioner filed a Motion to Dismiss on the ground that respondent’s cause of action had prescribed because more than one year had passed from the alleged commission of the act on January 26, 1993 to the filing of the Complaint-Affidavit on October 5, 1995. The Ombudsman denied the motion in an Order dated June 10, 1998, stating that its rules were merely directory and that public policy and interest dictated inquiry into the case; the same Order set the formal investigation on July 1, 1998. The July 1, 1998 hearing did not push through because petitioner moved for reconsideration of the June 10, 1998 Order; the motion was denied and the parties were required to submit the case for adjudication in an Order dated November 19, 1998. Petitioner filed a Memorandum on February 22, 1999. On April 20, 1999, petitioner filed an Urgent Motion to set the case for formal investigation and/or hearing, but the Ombudsman denied it, holding that petitioner’s submission of a Memorandum was a waiver of her right to a formal investigation.

The Ombudsman found that Cash Voucher No. 36230 showed that P110,000.00 was disbursed by respondent in favor of petitioner; that a signed handwritten note showed petitioner’s personal details as well as the terms of payment for the subject loan; and that the testimonies of Evangeline Del Mundo and F. Walter R. Macabuhay were straightforward and consistent. It found Vilchez’s account of the loan transaction “incredible” and “highly suspect,” and considered it implausible that respondent would allow its officers to use company funds for their personal purchases. It also noted that petitioner initially denied acquaintance with Vilchez but eventually admitted knowing her during the Senate proceedings on April 11, 1996.

• Prescription: Petitioner argued that the complaint should be dismissed under Section 20(5) of R.A. No. 6770 because it was filed more than one year after the alleged commission of the acts complained of.
• Due Process: Petitioner maintained that she was denied due process; she claimed the CA erroneously held that she never pursued the remedy of formal investigation before the Office of the Ombudsman and that she was not denied due process since she filed her Memorandum.
• Substantial Evidence: Petitioner contended that the CA erred in finding the Ombudsman’s findings supported by substantial evidence; she argued that there was no substantial evidence showing she contracted a loan from respondent with whom her office had business relations.

• Prescription: Whether the complaint is barred by prescription under Section 20(5) of R.A. No. 6770 because it was filed more than one year after the alleged act.
• Due Process: Whether petitioner was denied due process in the Ombudsman proceedings.
• Substantial Evidence: Whether there is substantial evidence showing petitioner’s participation in the loan transaction and liability under R.A. No. 6713.

• Prescription: No. Section 20(5) of R.A. No. 6770 uses “may,” making the one-year period directory; the Ombudsman may investigate a complaint filed after one year.
• Due Process: No. The essence of administrative due process is a reasonable opportunity to be heard and to submit evidence; petitioner participated through pleadings and, by filing her Memorandum without reservation, impliedly waived a formal hearing.
• Substantial Evidence: Yes. A cash voucher, a signed handwritten note, and the consistent testimonies of Del Mundo and Macabuhay provided substantial evidence that petitioner participated in the P110,000.00 loan transaction under R.A. No. 6713.

• Prescription: Section 20 of R.A. No. 6770 provides that the Office of the Ombudsman may not conduct the necessary investigation of any administrative act or omission complained of if it believes that the complaint was filed after one year from the occurrence of the act or omission complained of. The SC held that the use of the word “may” clearly shows that the provision is directory in nature and not mandatory; “may” is permissive and operates to confer discretion, while “shall” is imperative and imposes a duty that may be enforced. Citing Barnes vs. Reyes and PCL Shipping Philippines, Inc. vs. National Labor Relations Commission, the SC applied Section 20(5) as discretionary: it is upon the Ombudsman whether or not to conduct an investigation on a complaint even if it was filed after one year from the occurrence of the act or omission complained of. The complaint was therefore not barred by prescription.

• Due Process: The SC held that the essence of due process in administrative proceedings is that a party be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his defense. Deprivation of due process cannot be successfully invoked where a party was given the chance to be heard and given the opportunity to present his side. Citing Larin vs. Executive Secretary and Paat vs. Court of Appeals, the SC applied this standard to petitioner, who had the opportunity to present her side and submit countervailing evidence. In Samalio vs. Court of Appeals, the SC explained that due process in an administrative context does not require trial-type proceedings similar to those in courts of justice; where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process; a formal or trial-type hearing is not at all times and in all instances essential; the requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side, and it is not legally objectionable for an administrative agency to resolve a case based solely on position papers, affidavits, or documentary evidence submitted by the parties. Petitioner participated in all levels of the proceedings, from the Ombudsman to the SC; she submitted a Counter-Affidavit, a Motion to Dismiss, a Motion for Reconsideration, a Memorandum, an Urgent Motion to set the case for formal investigation and/or hearing, and a Motion for Disqualification and/or Inhibition; the Ombudsman considered her motion for reconsideration, and the CA heard her appeal. Hearings were scheduled, but petitioner opted to file several pleadings instead of proceeding with the formal investigation. Pursuant to the November 19, 1998 Order, petitioner filed a Memorandum on February 22, 1999 without reservation and did not move for reconsideration of the Order stating that after the parties’ submission of memoranda the case would be considered ripe for resolution. Her Urgent Motion to set the case for formal investigation and/or hearing was filed only on April 20, 1999, long after the case had been deemed submitted for resolution; she thus impliedly waived her right to a formal hearing.

• Substantial Evidence: The SC held that substantial evidence is such relevant evidence as a reasonable mind may accept as adequate to support a conclusion. Citing Velasquez vs. Hernandez and Advincula vs. Dicen, the SC explained that the requirement is satisfied where there is reasonable ground to believe that the petitioner is guilty of misconduct, even if the evidence might not be overwhelming. The evidence on record sufficiently established petitioner’s participation in the loan transaction with respondent company: Cash Voucher No. 36230 showed that P110,000.00 was disbursed by respondent in favor of petitioner; respondent submitted a signed handwritten note showing petitioner’s personal details as well as the terms of payment for the subject loan; and the testimonies of Evangeline Del Mundo and F. Walter R. Macabuhay were straightforward and consistent. Petitioner relied on bare denials; while she initially denied acquaintance with Vilchez, she eventually admitted knowing her during the Senate proceedings on April 11, 1996. The Ombudsman found Vilchez’s account of the loan transaction “incredible” and “highly suspect,” and considered it implausible that respondent would allow its officers to use company funds for their personal purchases. The Ombudsman correctly gave credence to respondent’s evidence. Under Section 27 of R.A. No. 6770, findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive; when the administrative body’s factual findings have been affirmed by the CA, as in this case, said findings are generally conclusive and binding upon the SC. Citing Sesbreño vs. Court of Appeals, the SC noted that it is not its function to analyze and weigh the parties’ evidence all over again except when there is serious ground to believe that a possible miscarriage of justice would thereby result; its task in an appeal by petition for review on certiorari is limited, as a jurisdictional matter, to reviewing errors of law that might have been committed by the CA.

• Directory vs. Mandatory Statutory Language — The word “may” in a statute is permissive and confers discretion, while “shall” is imperative and imposes a duty that may be enforced. The SC applied this to Section 20(5) of R.A. No. 6770 and held that the Ombudsman may still investigate a complaint filed more than one year after the act because the provision uses “may.”
• Due Process in Administrative Proceedings — The essence of administrative due process is a reasonable opportunity to be heard and to submit evidence in support of one’s defense. It does not require trial-type proceedings; opportunity through oral arguments or pleadings suffices, and an administrative agency may resolve a case based on position papers, affidavits, or documentary evidence. The SC applied this where petitioner participated through multiple pleadings and was given the chance to present her side.
• Waiver of Formal Hearing — A party may impliedly waive the right to a formal hearing by filing a memorandum without reservation after the case is deemed submitted for resolution and by belatedly moving for a formal investigation only after submission. The SC applied this where petitioner filed her Memorandum without reservation and filed her Urgent Motion long after the case had been deemed submitted.
• Substantial Evidence — Substantial evidence is such relevant evidence as a reasonable mind may accept as adequate to support a conclusion; the requirement is satisfied where there is reasonable ground to believe that the petitioner is guilty of misconduct, even if the evidence is not overwhelming. The SC applied this to the cash voucher, handwritten note, and consistent testimonies supporting petitioner’s participation in the loan transaction.
• Conclusiveness of Ombudsman and CA Factual Findings — Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive; when affirmed by the CA, they are generally conclusive and binding on the SC, except when there is serious ground to believe that a miscarriage of justice would result. The SC applied this in upholding the Ombudsman’s findings.

• "The use of the word "may" clearly shows that it is directory in nature and not mandatory as petitioner contends." — The SC uses this to reject the prescription defense and hold that Section 20(5) of R.A. No. 6770 is directory, not mandatory.
• "It is well-settled that the essence of due process in administrative proceedings is that a party be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his defense." — This is the SC’s governing standard for petitioner’s due process claim.
• "Due process in an administrative context does not require trial-type proceedings similar to those in courts of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process." — Quoting Samalio vs. Court of Appeals, the SC explains why petitioner’s filing of pleadings satisfied administrative due process.
• "Substantial evidence is such relevant evidence as a reasonable mind may accept as adequate to support a conclusion." — The SC uses this definition to uphold the Ombudsman’s factual findings against petitioner.

• Barnes vs. Reyes, G.R. No. 144533, September 23, 2003, 411 SCRA 538, 544 — Cited and followed for the rule that the word “may” in a statute is permissive and confers discretion.
• PCL Shipping Philippines, Inc. vs. National Labor Relations Commission, G.R. No. 148418, July 28, 2005, 464 SCRA 314, 320 — Cited and followed for the contrast that “shall” is imperative and imposes a duty.
• Larin vs. Executive Secretary, 345 Phil. 962, 977 (1997) — Cited and followed for the essence of due process in administrative proceedings: a reasonable opportunity to be heard and to submit evidence.
• Paat vs. Court of Appeals, 334 Phil. 146, 155 (1997) — Cited and followed for the rule that deprivation of due process cannot be invoked where a party was given the chance to be heard and to present his side.
• Samalio vs. Court of Appeals, G.R. No. 140079, March 31, 2005, 454 SCRA 462 — Cited and followed for the rule that administrative due process does not require trial-type proceedings and may be satisfied through pleadings, affidavits, and documentary evidence.
• Velasquez vs. Hernandez, G.R. Nos. 150732 & 151095, August 31, 2004, 437 SCRA 357, 369 — Cited and followed for the definition of substantial evidence as relevant evidence a reasonable mind may accept as adequate to support a conclusion.
• Advincula vs. Dicen, G.R. No. 162403, May 16, 2005, 458 SCRA 696, 712 — Cited and followed for the rule that substantial evidence is satisfied by reasonable ground to believe the petitioner guilty of misconduct, even if the evidence is not overwhelming.
• Sesbreño vs. Court of Appeals, G.R. No. 101487, April 22, 2005, 456 SCRA 522, 532 — Cited and followed for the rule that factual findings affirmed by the CA are generally conclusive and binding on the SC, except for serious miscarriage of justice.

• Section 20(5), R.A. No. 6770 (The Ombudsman Act of 1989) — The Ombudsman may not conduct the necessary investigation if the complaint was filed after one year from the occurrence of the act or omission; the SC held that “may” is directory, so the Ombudsman may still investigate and the complaint is not barred by prescription.
• Section 7(d), R.A. No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees) — Prohibits public officials and employees from soliciting or accepting, directly or indirectly, any gift, gratuity, favor, entertainment, loan, or anything of monetary value from any person in the course of their official duties or in connection with any operation being regulated by, or any transaction which may be affected by, the functions of their office; this was the basis for the charge against petitioner.
• Section 11(b), R.A. No. 6713 — A violation proven in a proper administrative proceeding is sufficient cause for removal or dismissal of a public official or employee, even if no criminal prosecution is instituted; this was the basis for petitioner’s dismissal.
• Section 22(j) and (k), Rule XIV, Omnibus Rules Implementing Book V of Executive Order No. 292 — Prescribes the penalties for administrative offenses; the Ombudsman used these provisions in ordering petitioner’s dismissal.
• Section 27, R.A. No. 6770 — Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive; the SC relied on this in upholding the Ombudsman’s factual findings.