Hegerty vs. Court of Appeals

The determination of probable cause is an executive function of the prosecutor, and absent grave abuse of discretion, courts cannot compel prosecution; here, the City Prosecutor did not gravely abuse discretion in dismissing the estafa complaint against Hegerty. Nash’s appeal to the DOJ was also filed out of time under DOJ Order No. 223, since service could be made on the party or counsel.

Allan Nash and Rodney Hegerty were on opposite sides of a preliminary investigation for estafa under Article 315(1)(b) of the Revised Penal Code, which penalizes misappropriation of money or property received in trust or under an obligation to return it. Appeals from the City Prosecutor’s resolutions in preliminary investigations were governed by DOJ Order No. 223, Section 2.

Allan Nash alleged that Rodney Hegerty, together with the deceased Don Judevine and James Studenski, invited him to invest in a foreign exchange scheme with a guaranteed return of 10.45% per annum on the money invested. From July 1992 to November 28, 1997, Nash invested a total of US$236,353.34.

Sometime in December 1997, Hegerty informed Nash that all his investments had been lost after he lent a portion of the investment to Swagman Hotels and Travel, Inc., of which he was a stockholder. Initially, Hegerty offered to return to Nash half of his total investment, but later on withdrew the offer. After his demands were ignored, Nash filed a complaint-affidavit against Hegerty before the City Prosecutor of Manila for estafa under Article 315 (1) (b) of the Revised Penal Code.

For his part, Hegerty denied making any invitation to Nash to invest his money in any foreign exchange scheme. Neither did he divert any portion of such investment to the Swagman Group of Companies. He admitted his acquaintance with Judevine and Studenski but denied that they were his business partners. He likewise disclaimed any knowledge of or participation in any of the receipts and cash vouchers presented by Nash supposedly as proofs of his investments.

The City Prosecutor dismissed the complaint for estafa against Hegerty for insufficiency of evidence. Upon receipt of a copy of the said resolution on June 16, 1999, counsel of Nash filed a motion for reconsideration. On May 8, 2000, Nash himself received a copy of the resolution denying the motion for reconsideration. On May 19, 2000, Nash filed an appeal with the Department of Justice (DOJ), but the same was dismissed for having been filed out of time. He filed a motion for reconsideration, which was denied again for having been filed beyond the reglementary period of ten (10) days.

Undaunted, Nash filed with the Court of Appeals a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, contending that the DOJ acted in grave abuse of discretion amounting to lack of or in excess of jurisdiction when it dismissed his appeal and denied his motion for reconsideration. On June 28, 2002, the Court of Appeals rendered the assailed decision granting the petition, reversing the undated resolution and 22 August 2001 resolution, and directing the public respondent to prosecute Hegerty for the crime of estafa under Article 315 (1) (b) of the Revised Penal Code.

The City Prosecutor had dismissed the complaint based on findings that there was reason to believe Nash had in fact made some investments with the late Don Judevine, who acknowledged receipts thereof and bound himself alone; that there was an utter and absolute absence of a showing that Hegerty partook of the said investments or had any business dealing with either the late Don Judevine or Nash; and that Nash tried in vain to show some form of a partnership between Hegerty and the two deceased individuals but failed to adduce any tangible evidence except his general declarations.

• Finality and Jurisdiction: Hegerty contended that since Nash’s appeal with the DOJ and his motion for reconsideration were both filed out of time, the prosecutor’s resolution had become final and executory, and the DOJ and the CA never acquired jurisdiction over the case.
• Authority to Order Prosecution: Hegerty contended that the CA does not have the authority to order the filing of a case in the absence of grave abuse of discretion on the part of the prosecutor.

• Service of Resolution: Nash argued that the service to him of the resolution of the City Prosecutor denying his motion for reconsideration was invalid because he was represented by counsel; he maintained that there is no generally accepted practice allowing service upon either the litigant or his lawyer, and that notice upon a party represented by counsel is a nullity, subject to exceptions.
• Grave Abuse of Discretion: Nash contended that the DOJ acted in grave abuse of discretion amounting to lack or excess of jurisdiction when it dismissed his appeal and denied his motion for reconsideration.

• Jurisdiction of the CA: Whether the CA had jurisdiction over a case that started at the Office of the City Prosecutor of Manila and was appealed to the DOJ when the appeal was filed out of time.
• Authority to Order Prosecution: Whether the CA, acting without jurisdiction, may order the prosecution of a criminal case.
• Grave Abuse of Discretion: Whether the City Prosecutor acted with grave abuse of discretion in dismissing the estafa complaint against Hegerty.

• Jurisdiction of the CA: No. Nash’s appeal to the DOJ was filed out of time under DOJ Order No. 223, Section 2; the City Prosecutor’s resolution had become final and executory, so the DOJ and the CA did not acquire jurisdiction over the appeal.
• Authority to Order Prosecution: No. The CA cannot order the prosecution of Hegerty absent grave abuse of discretion by the City Prosecutor; mandamus does not lie to compel the filing of an Information.
• Grave Abuse of Discretion: No. The City Prosecutor did not gravely abuse discretion in dismissing the estafa complaint; the evidence did not show that Hegerty received the investment in trust or misappropriated it.

• Jurisdiction of the CA: The SC agreed with Hegerty that Nash’s appeal to the DOJ was out of time. Under Section 2 of DOJ Order No. 223, the appeal must be filed within 15 days from receipt of the questioned resolution; the period is interrupted only by a motion for reconsideration filed within 10 days and continues to run from receipt of the resolution denying the motion. Nash’s counsel received the City Prosecutor’s dismissal on June 16, 1999; the tenth day, June 26, fell on a Saturday, so the motion for reconsideration was filed on Monday, June 28, 1999. Nash received the denial on May 8, 2000, leaving him five days, or until May 15, 2000, because May 13 was a Saturday. His appeal on May 19, 2000 was clearly late. Nash’s argument that service on him was invalid because he was represented by counsel fails: the DOJ rule expressly allows service on the party or his counsel, as held in Tam Wing Tak vs. Makasiar. The late appeal meant the DOJ did not acquire jurisdiction over Nash’s appeal, and the CA had no basis to reverse the prosecutor’s resolution.
• Authority to Order Prosecution: The SC’s duty in an appropriate case is confined to determining whether the executive or judicial determination of probable cause was done without or in excess of jurisdiction or with grave abuse of discretion. A prosecutor’s erroneous exercise of discretion is not correctable by certiorari absent grave abuse. The remedy of mandamus does not lie to compel the City Prosecutor to file an Information where there is no showing of grave abuse of discretion. Since the City Prosecutor did not gravely abuse discretion, the CA had no ground to order Hegerty’s prosecution.
• Grave Abuse of Discretion: The City Prosecutor had the duty to determine whether a prima facie case for estafa existed. The elements of estafa through misappropriation under Article 315(1)(b) are: (1) money, goods, or other personal property received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return, the same; (2) misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (3) such misappropriation or conversion or denial is to the prejudice of another; and (4) demand made by the offended party to the offender. The City Prosecutor dismissed because the evidence showed Nash made investments with the late Don Judevine, who acknowledged the receipts and bound himself alone; there was no showing Hegerty partook of the investments or had business dealings with Judevine or Nash; and Nash failed to adduce tangible evidence of a partnership with Hegerty and the two deceased individuals beyond general declarations. A public prosecutor is under no compulsion to file a criminal information where no clear legal justification, sufficient evidence of guilt, or prima facie case is shown, and has the duty not to prosecute when the evidence is insufficient. The determination of probable cause is an executive function exclusively of the prosecutor, and the determination of persons to be prosecuted rests primarily with him. The SC found no evidence that the City Prosecutor abused, much less gravely abused, his discretion.

• Grave abuse of discretion — It means capricious and whimsical exercise of judgment equivalent to lack of jurisdiction; the abuse must be grave, as where power is exercised arbitrarily or despotically by reason of passion or personal hostility, and so patent and gross as to amount to evasion of positive duty or virtual refusal to perform the duty enjoined or to act at all in contemplation of law. The SC found none in the City Prosecutor’s dismissal.
• Executive determination of probable cause — The determination of probable cause during preliminary investigation is an executive function exclusively of the prosecutor. A prosecutor is under no compulsion to file a criminal information where no clear legal justification, sufficient evidence of guilt, or prima facie case is shown; he has the duty not to prosecute when evidence is insufficient. The SC applied this to uphold the dismissal.
• Mandamus to compel prosecution — Mandamus does not lie to compel a prosecutor to file an Information absent grave abuse of discretion. The SC held the CA erred in directing prosecution.
• Estafa through misappropriation under Article 315(1)(b) — Elements: (1) money, goods, or other personal property received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return, the same; (2) misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (3) such misappropriation or conversion or denial is to the prejudice of another; and (4) demand made by the offended party to the offender. The City Prosecutor found no prima facie showing that Hegerty received or misappropriated the investment.
• Appeal to the DOJ under DOJ Order No. 223 — The appeal must be filed within 15 days from receipt of the questioned resolution; the period is interrupted only by a motion for reconsideration filed within 10 days and continues to run from receipt of the denial. Service of resolutions may be made on the party or counsel. Nash’s appeal was late.

• “By grave abuse of discretion is meant, such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the 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 to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.” — The SC adopts the definition to test whether the City Prosecutor’s dismissal was correctable by certiorari.
• “A public prosecutor, by the nature of his office, is under no compulsion to file a criminal information where no clear legal justification has been shown, and no sufficient evidence of guilt nor prima facie case has been presented by the petitioner.” — This supports the SC’s conclusion that the City Prosecutor did not gravely abuse discretion.
• “The remedy of mandamus does not lie to compel the City Prosecutor to file an Information against petitioner. There being no showing of grave abuse of discretion which will warrant the reversal of the dismissal of the complaint against petitioner, there is also no ground to issue a writ of mandamus.” — This rejects the CA’s order to prosecute Hegerty.
• “The above-quoted DOJ Rule expressly provides that service of resolutions may be made to the party or his counsel.” — This rejects Nash’s argument that service on him was invalid because he was represented by counsel.

• D.M. Consunji, Inc. vs. Esguerra, 328 Phil. 1168, 1180 [1996] — Cited for the definition of grave abuse of discretion and for the rule that mandamus does not lie to compel prosecution.
• Quiso vs. Sandiganbayan, G.R. No. L-77120, 6 April 1987, 149 SCRA 108, 112 — Followed for the prosecutor’s discretion not to file where evidence is insufficient.
• Tam Wing Tak vs. Makasiar, G.R. No. 122452, 29 January 2001, 350 SCRA 475, 482 — Followed for the rule that a public prosecutor is under no compulsion to file an information and for service of resolutions on the party or counsel.
• Dupasquier vs. Court of Appeals, G.R. No. 112089, 24 January 2001, 350 SCRA 146, 153 — Followed for the prosecutor’s primary discretion in determining persons to be prosecuted.

• Article 315(1)(b), Revised Penal Code — Defines estafa through misappropriation; the SC enumerated its elements and held the City Prosecutor’s finding of no prima facie case was not grave abuse.
• Section 2, DOJ Order No. 223 (June 30, 1993) — Requires appeal within 15 days from receipt; interrupted only by a motion for reconsideration within 10 days; continues from denial; service may be on the party or counsel; applied to hold Nash’s May 19, 2000 appeal late.
• Rule 65, 1997 Rules of Civil Procedure — Nash’s certiorari and mandamus petition; the SC held certiorari and mandamus cannot correct the prosecutor’s probable-cause determination absent grave abuse.