METROBANK v. Tobias (G.R. No. 177780; January 25, 2012)

CASE DIGEST: METROPOLITAN BANK & TRUST CO. (METROBANK), represented by ROSELLA A. SANTIAGO,Petitioner,v. ANTONINO O. TOBIAS III, Respondent. (G.R. No. 177780; January 25, 2012).

FACTS: Tobias opened a savings/current account for and in the name of Adam Merchandising, his frozen meat business. Six months later, Tobias applied for a loan from METROBANK, which in due course conducted trade and credit verification of Tobias that resulted in negative findings. The property consisted of four parcels of land located in Malabon City, Metro Manila.

His loan was restructured to 5-years upon his request. Yet, after two months, he again defaulted. Thus, the mortgage was foreclosed, and the property was sold to METROBANK as the lone bidder.

When the certificate of sale was presented for registration to the Registry of Deeds of Malabon, no corresponding original copy of TCT No. M-16751 was found in the registry vault. Presidential Anti-Organized Crime Task Force (PAOCTF) concluded that TCT No. M-16751 and the tax declarations submitted by Tobias were fictitious. PAOCTF recommended the filing against Tobias of a criminal complaint for estafa through falsification of public documents under paragraph 2 (a) of Article 315, in relation to Articles 172(1) and 171(7) of the Revised Penal Code.

The Office of the City Prosecutor of Malabon ultimately charged Tobias with estafa through falsification of public documents. Tobias filed a motion for reinvestigation, which was granted. Nonetheless, on December 27, 2002, the City Prosecutor of Malabon still found probable cause against Tobias, and recommended his being charged with estafa through falsification of public document. Tobias appealed to the DOJ and then Acting Secretary of Justice Ma. Merceditas N. Gutierrez issued a resolution directing the withdrawal of the information filed against Tobias. On November 18, 2005, Secretary of Justice Raul M. Gonzalez denied METROBANK's motion for reconsideration. Hence, METROBANK challenged the adverse resolutions. METROBANK maintains that what the Secretary of Justice did was to determine the innocence of the accused, which should not be done during the preliminary investigation; and that the CA disregarded such lapse.

ISSUE: Did the CA err in dismissing METROBANK's petition?HELD: Under the doctrine of separation of powers, the courts have no right to directly decide matters over which full discretionary authority has been delegated to the Executive Branch of the Government.The settled policy is that the courts will not interfere with the executive determination of probable cause for the purpose of filing an information, in the absence of grave abuse of discretion. That 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, such as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.

In this regard, we stress that a preliminary investigation for the purpose of determining the existence of probable cause is not part of a trial. At a preliminary investigation, the investigating prosecutor or the Secretary of Justice only determines whether the act or omission complained of constitutes the offense charged. Probable cause refers to facts and circumstances that engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof. There is no definitive standard by which probable cause is determined except to consider the attendant conditions; the existence of probable cause depends upon the finding of the public prosecutor conducting the examination, who is called upon not to disregard the facts presented, and to ensure that his finding should not run counter to the clear dictates of reason.

We do not lose sight of the fact that METROBANK, a commercial bank dealing in real property, had the duty to observe due diligence to ascertain the existence and condition of the realty as well as the validity and integrity of the documents bearing on the realty. Its duty included the responsibility of dispatching its competent and experienced representatives to the realty to assess its actual location and condition, and of investigating who was its real owner. Yet, it is evident that METROBANK did not diligently perform a thorough check on Tobias and the circumstances surrounding the realty he had offered as collateral. As such, it had no one to blame but itself. Verily, banks are expected to exercise greater care and prudence than others in their dealings because their business is impressed with public interest. Their failure to do so constitutes negligence on its part. DENIED.

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