G.R. No. 214068. July 22, 2019

SECOND DIVISION [ G.R. No. 214068, July 22, 2019 ] PEOPLE OF THE PHILIPPINES, PETITIONER, VERSUS THE HONORABLE SANDIGANBAYAN, FIRST DIVISION, LUIS RAMON PAEZ LORENZO, JR., NELSON C. BUENAFLOR,[i] WILFREDO B. DOMO-ONG,[ii] ROMEO C. LANCIOLA,[iii] NELLIE M. ILAS,[iv] AND JESUS M. SIMON, RESPONDENTS.

For resolution is the instant-appeal by certiorari[1] under Rule 45 of the Rules of Court (Petition), assailing the Resolutions dated May 30, 2014[2] and September 4, 2014[3] of the Sandiganbayan - First Division (SB) in Case No. SB-13-CRM-0958, which reversed its Order[4] dated January 16, 2014. The said Order denied the motions for judicial determination of probable cause filed by herein respondents (respondents).

The antecedent facts, as gathered from the records, are as follows:

Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) is a non-bank government financing institution (GFI) created under Republic Act No. (RA) 7393[5] under the policy supervision of the Department of Agriculture.[6] QUEDANCOR was formed for the purpose of establishing "an effective credit delivery system and a guarantee facility that would promote inventory financing of agri-aqua commodities, production and post-harvest production facilities, farm and fishery machineries and equipment, investment in production inputs and labor and the development of rural livelihood enterprise."[7] Respondents are all members of the QUEDANCOR Governing Board (the Board).[8]

Sometime in 2004, respondent Nelson C. Buenaflor (Buenaflor), then QUEDANCOR's President and Chief Executive Officer, issued Memorandum Circular No. 270[9] or the "Consolidated Guidelines on QUEDANCOR Swine Program (CG-QSP)".

On April 1, 2004, the CG-QSP was "noted" by the Board, as follows:
VIII. OTHER MATTERS
The following were noted:

a.) xxx
b.) Guidelines on Quedancor's Swine Program
c.) xxx
d.) xxx[10]
Thereafter, on December 7, 2005, respondent Buenaflor wrote a Letter[11] to the Office of the Government Corporate Counsel (OGCC), seeking its opinion on whether public bidding was still required under the CG-QSP, pursuant to RA 9184[12].

In its Opinion No. 021, Series of 2006[13] (Opinion No. 21), the OGCC opined that there was no procurement under the CG-QSP and therefore the provisions of RA 9184 were inapplicable:
Going now to your query on the applicability of the provisions of Republic Act No. 9184, said law applies only to procurement of infrastructure projects, goods and consulting services of all instrumentalities of the government (Sec. 4, RA 9184).

You represent, however, that the role of Quedancor is to merely accredit the suppliers from which the farmers will source theirs (sic) goods. Thus, it is the farmers who will procure or acquire the goods or inputs from the suppliers of their choice from the list accredited by Quedancor, the payment for which will come from their respective loans from Quedancor. Essentially, therefore, there is no procurement by Quedancor, and on this basis it is our opinion that R.A. 9184 will not apply.[14]
Subsequently, a Complaint[15] dated June 23, 2009 was filed by the Field Investigation Office (FIO) of the Office of the Ombudsman (OMB), alleging that certain irregularities attended the implementation of QUEDANCOR's Swine Program in the Province of Mindoro, for which respondents and several other employees of QUEDANCOR were responsible. In particular, the FIO claimed that the awarding of contracts in favor of Metro Livestock Incorporated (Metro Livestock) involving the amount of Forty-Eight Million Six Hundred Six Thousand and Seven Hundred Fifty Pesos (P48,606,750.00) without resorting to public bidding under RA 9184 amounted to a violation of Section 3(e) and (g) of RA 3019, otherwise known as the Anti-Graft and Corrupt Practices Act.Ruling of the OMB

In a Resolution[16] dated July 12, 2013, the OMB found probable cause against respondents for violation of Section 3(e) of RA 3019, while at the same time dismissing the case against the others:
WHEREFORE, this Office finds probable cause to indict respondents LUIS RAMON PAEZ LORENZO, JR., NELSON CABRERA BUENAFLOR, WILFREDO BORREROS DOMO-ONG, ROMEO CABIBI LANCIOLA, NELLIE MINTU ILAS, JESUS M. SIMON for violation of Section 3 (e) of Republic Act No. 3019, as amended (Anti-Graft and Corrupt Practices Act).

This Office likewise finds probable cause to indict respondent RHOMADY GERONIMO BERNABE in conspiracy with private respondents EXCEL V. SALAZAR, JOEL V. SALAZAR, FRANCIS EDISON C. PENA, TERESA G. ADILLE, and SANTIAGO BALDADO for violation of Section 3 (e) of Republic Act No. 3019, as amended (Anti-Graft and Corrupt Practices Act).

Let the corresponding Informations against the above-mentioned respondents be filed before the appropriate courts.

There being no probable cause, the criminal charges against respondents SUSANA EVANGELISTA LEONES, CELIA NOBLEJAS ZOLETA TAN, DON JOMAR OLEGARIO, MEYNARDO NARSOLES MORILLA, MARY JEAN AGUILA DELA CRUZ (MARY JEAN B. AGUILA), ENRIQUE AUNZO HOSENA, LITA DIMACULANGAN CABUNGCAL, MARILYN TIBAYAN JAYAGAN, and LORENZO VEGA TOLEOS are DISMISSED.

Considering the death of respondents RUBEN MAGTOTO CONTI and GUILLERMO P. CUA, the charges against them are likewise DISMISSED.

SO RESOLVED.[17]
Thus, an Information[18] was filed with the SB against respondents for violation of Section 3(e) of RA 3019, as follows:
On 1 April 2004 or sometime prior or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, above-named accused LUIS RAMON PAEZ LORENZQ, JR., as then Chairman of the QUEDANCOR Governing Board, NELSON CABRERA BUENAFLOR as then QUEDANCOR President and CEO and Vice Chairman of the QUEDANCOR Governing Board, WILFREDO BORREROS DOMO-ONG, ROMEO CABIBI LANCIOLA, NELLIE MINTU ILAS, and JESUS M. SIMON, as then members of the QUEDANCOR Governing Board, all public officers, committing the offense in relation to their office, conspiring and confederating with one another, with evident bad faith or, at the very least, gross inexcusable negligence, did then and there willfully, unlawfully, and criminally cause undue injury to the QUEDANCOR and its borrowers by issuing and adopting Memorandum Circular No. 270 or the "Consolidated Guidelines on QUEDANCOR Swine Program" (CG-QSP) which dispensed with public bidding, posting of performance bond, and such other requirements under Republic Act No. 9184 in regard to the procurement of swine inputs. Accused, through the CG-QSP, instead prescribed mere accreditation of suppliers, thereby depriving the QUEDANCOR the opportunity to get the most advantageous offer for the swine inputs and denying the said agency a recourse against the suppliers for non-delivery of swine inputs in the total amount of Forty Seven Million Four Hundred Sixty Five Thousand Six Hundred Fourteen Pesos (P47,465,614.00) despite advance payment therefor by the QUEDANCOR, to the damage and prejudice of the latter sand its borrowers.

CONTRARY TO LAW.[19]
Proceedings before the SB

In a Resolution dated November 29, 2013, the SB found probable cause for the purpose of issuing a warrant of arrest against respondents. On even date, respondent Luis Ramon P. Lorenzo (Lorenzo) filed an Omnibus Motion for Judicial Determination of Probable Cause and to Quash Information. Similarly, on January 14, 2014, respondent Wildredo B. Domo-ong (Domo-ong) filed a Motion for Judicial Determination of Probable Cause.[20]

In the Order[21] dated January 16, 2014, the SB denied both motions of respondents Lorenzo and Domo-ong, allegedly for being moot and academic:
In view of the Court's finding of probable cause to issue warrant of arrest against the accused in its Resolution, dated November 23, 2014, as prayed for by Prosecutor Edwin B. Gomez, the motions for judicial determination of probable cause filed by the accused are hereby denied for being moot and academic.

However, to enable accused Wilfredo Borreros Domo-ong to secure a temporary restraining order against the Court, as prayed for by the defense counsels, let the arraignment this morning be cancelled and reset on February 27, 2014 at 8:30 in the morning.

SO ORDERED.[22]
Unsatisfied, respondent Lorenzo filed a Motion for Reconsideration dated February 13, 2014.[23] Therein, he argued that the SB erred in denying his motion based on mootness instead of ruling on the merits with respect to the existence of probable cause.[24]

Ruling of the SB

In the Resolution dated May 30, 2014, the SB granted the Motion for Reconsideration and dismissed the case against respondents. In the main, the SB found no probable cause as QUEDANCOR, being a GFI, was exempted from the public bidding requirement under RA 9184, following Executive Order No. (EO) 423.[25] It also found that respondents, as members of the Board, could not be made liable for violation of RA 3019 by the mere act of "noting" the CG-QSP. Thus, the SB held:
WHEREFORE, in light of all the foregoing, accused-movant Luis Ramon P. Lorenzo's Motion for Reconsideration, dated February 13, 2014, is GRANTED. Accordingly, the instant case is hereby ordered DISMISSED as to all the accused, namely: Luis Ramon P. Lorenzo, Nelson C. Buenaflor, Wilfredo B. Domo-ong, Romeo C. Lanciola, Nellie M. Ilas and Jesus M. Simon.

The warrant of arrest issued in this case against accused Lorenzo is ordered QUASHED, and the hold departure order against all the accused by reason of this case is lifted and set aside, and their bonds released, subject to the usual accounting and auditing procedure.

SO ORDERED.[26]
A Motion for Reconsideration was filed by the OMB, through the Office of the Special Prosecutor, which was denied by the SB in a Resolution[27] dated September 4, 2014 for lack of merit.

Hence, this Petition.

Essentially, petitioner questions the Resolution dated May 30, 2014 of the SB on to following grounds: (i) that the SB erred in finding that the transactions of QUEDANCOR are exempted from the provisions of RA 9184 pursuant to EO 423;[28] and (ii) that the SB encroached on the executive determination of probable cause by the OMB when it dismissed the case based on the same defenses and arguments raised by respondents during preliminary investigation.[29]

Issue

Stripped of verbiage, the principal issue is whether the SB committed reversible error in finding no probable cause against respondents for violation of RA 3019.


The Court's Ruling

The Petition is denied.

RA 9184 applicable to procurement
only; no public bidding is required
under the CG-QSP


Preliminarily, petitioner asserts that the SB erred in finding that QUEDANCOR was not covered by the public bidding requirement under RA 9184. The Court agrees.

The SB's conclusion that QUEDANCOR's transactions are exempt from the coverage of RA 9184 rests solely on Section 9 of EO 423, which states:
Section 9. Transactions of Government Financial Institutions. Transactions of government financial institutions in the ordinary course of business shall not be covered by the provisions of this Executive Order. Such transactions shall instead be subject to applicable provisions of law and to guidelines, rules and regulations issued by the Department of Finance. (Emphasis supplied)
Such reading, however, is erroneous inasmuch as it is overly narrow. To recall, based on its title, EO 423 "prescribe[s] the rules and procedure on the review and approval of all government contracts to conform with [RA] 9184." The plain import of Section 9 therefore is that the provisions of EO 423, which merely prescribes certain procedures for approval of contracts, does not apply to transactions of GFIs made in the ordinary course of business. By no stretch of interpretation can it be said that EO 423 excluded in toto such transactions of GFIs from the requirement of public bidding under RA 9184.

In fact, RA 9184 specifically mentions GFIs as "among those government institutions covered by its provisions, to wit:
SEC. 3. Governing Principles on Government Procurement. —All procurement of the national government, its departments, bureaus, offices and agencies, including state universities and colleges, government-owned and/or -controlled corporations, government financial institutions and local government units, shall, in all cases, be governed by these principles:

xx x x

SEC. 5. Definition of Terms. — For purposes of this Act, the following terms or words and phrases shall mean or be understood as follows:

x x x x

(o) Procuring Entity — refers to any branch, department, office, agency, or instrumentality of the government, including state universities and colleges, government-owned and/or -controlled corporations, government financial institutions, and local government units procuring Goods, Consulting Services and Infrastructure Projects. (Emphasis supplied)
Notwithstanding the foregoing, the Court nevertheless finds that the CG-QSP is outside the scope of RA 9184 as there is no procurement involved in the first place.

Section 5(n) of RA 9184 defines procurement as the "acquisition of Goods, Consulting Services, and contracting for Infrastructure Projects" by a procuring entity, and includes the lease of goods and real estate.

Here, QUEDANCOR merely provides credit facilities by which farmer-borrowers may avail of loans in connection with their swine businesses. As summarized by the SB, the CG-QSP simply laid down the step-by-step procedure to be followed in extending such loans, as follows:
The CG-QSP, which was actually issued by accused Buenaflor, was designed to establish a credit program for swine raisers. True to its objective, the guidelines provided mechanisms on how the beneficiaries may avail of the credit facility. Paragraph 3.11.1 of the CG-QSP outlines the program's basic lending mechanisms, as follows:

a. The farmer-borrower shall apply for loan with QUEDANCOR.

b. Upon loan approval, QUEDANCOR issues PO to the farmer- borrower.

c. Farmer-borrower presents the PO to accredited IS [input suppliers] for the delivery inputs.

d. IS coordinates with the QUEDANCOR-LMG (Loans Management Group) for inspection of required facilities of the borrower. The LMG must see to it that the borrower's facilities such as pigpens, feeding trough, waste disposal system, etc. are in place. If in order, QUEDANCOR issues Authority to Load to IS.

e. IS delivers inputs to farmer-borrower.

Payment to the IS by Quedancor is conditioned upon the presentation of the joint acceptance and delivery receipt showing that the farmer-borrower had received the inputs from the IS.

From the foregoing process, along with the rest of the provisions in the CG-QSP, it is clear that the only aim of accused Buenaflor for the issuance of the CG-QSP is to provide a swine program for the farmers and to set a general policy and procedure on how the beneficiaries will go about it. x x x[30]
To recall, QUEDANCOR is a financial institution created principally for the purposes of inventory financing of production inputs and facilities. In this regard, based on the foregoing guidelines, QUEDANCOR, by lending money to farm-borrowers, cannot be said to have engaged in the procurement or acquisition of goods or services from input suppliers. As aptly observed by the SB:
x x x Public bidding was precluded in the CG-QSP not to purposely skirt the requirements of RA 9184, but because there were reasons to rely on that the purchase of swine inputs was not within the ambit of the Procurement Act. The CG-QSP intended to provide the farmers/borrowers a "loan in money" and not a "loan in kind." Had the CG-QSP envisioned a "loan in kind", it would have included provisions for the establishment and maintenance of storage and inventories. As the Court sees it, the aim for the policy that Quedancor should be the one to pay the chosen IS instead of directly giving the loan proceeds to the borrower was to ensure that the borrowed money was truly chanelled (sic) to the purpose for which the loan was intended.[31]
Thus, petitioner's argument that respondents are liable for dispensing with the public bidding requirement in the CG-QSP has no more leg to stand on.

No probable cause for violation of
Section 3(e) of RA 3019


The Court notes that at the center of the Petition lies the ultimate question of whether there was indeed probable cause for violation of RA 3019 against respondents. However, to resolve such question — which hinges on the sufficiency of evidence to engender a well-founded belief that a crime was committed and respondents are probably guilty thereof — requires a re-evaluation of the evidence adduced.

At this juncture, it bears stressing that questions of fact are outside the ambit of the Court's review in appeals by certiorari under Rule 45 of the Rules. Moreover, it is settled that findings of fact by the trial court deserve great weight and respect and should not be disturbed on appeal, unless these are facts of weight and substance that were overlooked or misinterpreted and that would materially affect the disposition of the case.[32] While the Court has allowed a relaxation of the Rules in this respect, the case fails to present an occasion to apply such exception.

Nonetheless, even if the foregoing procedural hurdles were to be set aside, the Court finds no probable cause extant in this case for the violation of Section 3(e)of RA 3019.

Petitioner's theory is that respondents, by "noting" the CG-QSP and in so doing, dispensing with public bidding under RA 9184, are guilty of manifest partiality, evident bad faith, and gross inexcusable negligence;[33] and that by "noting" the CG-QSP, they took part in a "conspiracy of silence and inaction" with respondent Buenaflor, the proponent of the CG-QSP, which caused undue injury to the Government.[34]

The Court is not impressed.

Firstly, as already discussed above, the CG-QSP does not involve procurement; thus, the fact that no public bidding was conducted as a result cannot be imputed to respondents. More importantly, it must be recalled that QUEDANCOR first sought the opinion of the OGCC precisely on this matter. That respondents relied on Opinion No. 21 of the OGCC — which definitively held that QUEDANCOR was not engaged in procurement by giving out loans to farmers — cannot be taken against them. At the very least, their effort to secure an opinion from the OGCC is a strong indication of good faith in "noting" the CG-QSP.

Secondly, the only tangible act committed by respondents, except for respondent Buenaflor, was their collective act of "noting" the CG-QSP. Nothing more. It bears stressing that the act of "noting" is starkly different from "issuing and adopting" the CG-QSP, as alleged in the Information.[35] On this score, the Court adopts the following disquisition of the SB:
Verily, "noting" is not the same as issuing/adopting." When the Board noted on that meeting the CG-QSP, it simply recognized that there was such a memorandum/guidelines without necessarily taking action on it. In the cases of DBP v. Spouses Ong, and in Cojuangco, Jr. v. Palma, the Supreme Court ruled that "noted" is not tantamount to approval. In DBP, the High Court held:
True it is that the signature of branch manager Lagrito appears below the typewritten word "NOTED" at the bottom of respondents' offer to purchase dated May 25, 1988. By no stretch of imagination, however, can the mere "NOTING" of such offer be taken to mean an approval of the supposed sale. Quite the contrary, the very circumstance that the offer to purchase was merely "NOTED" by the branch manager and not "approved", is a clear indication that there is no perfected contract of sale to speak of.
and in Cojuangco, Jr., the Supreme Court held:
Obviously, respondents arguments that we affirmed such resolution when we "noted" it is certainly misplaced. In Re: Problem of Delays in Cases Before the Sandiganbayan, we held that the term "noted" means that the Court has merely taken cognizance of the existence of an act or declaration, without exercising a judicious deliberation or rendering a decision on the matter. It does not imply agreement or approval, x x x.
Indeed, a closer look at the CG-QSP discloses that the imprimatur of the Governing Board was not needed for its implementation. It was issued, as far as the Board was concerned, only for the "guidance of 'All Concerned[']." The Court does not share the view of the Office of the Ombudsman in its Resolution, dated July 12, 2013, that the accused members of Quedancor Governing Board (assuming that they had nothing to do with the issuance and implementation of the CG-QSP) were nevertheless grossly and inexcusably negligent because of their indifference and inaction, considering their mandate to direct the affairs and business of Que[d]ancor, and to manage and preserve its properties. There is no manifest partiality, evident bad faith or gross inexcusable negligence to speak of in the mere issuance and/or adoption of the CG-QSP.[36] (Emphasis supplied)
Thus, even the very act alleged in the Information is unsupported by the evidence. Other than the minutes of the meeting of the Board held on April 1, 2004,[37] there was no other evidence adduced to show that respondents "issued and adopted" the CG-QSP. Hence, the principal inquiry of whether respondents committed the acts spelled-out in the Information is perforce answered in the negative.

Finally, it is worthy to note that whatever damage allegedly suffered by some farmers under the CG-QSP — aside from being highly speculative — already goes into the implementation stage of the swine program of QUEDANCOR. As aptly highlighted by the SB, the Court is not prepared to find respondents criminally liable for the results of the execution of the CG-QSP, when their only participation was to "note" the basic framework of the loaning procedure.[38] To hold them accountable for any and all problems relating to the implementation of the CG-QSP would not only be unreasonable, but patently unjust. Absent further proof of ulterior and malicious motives behind the respondents' otherwise benign act of "noting" the CG-QSP, the Court is compelled to affirm the SB's dismissal of the criminal case for lack of probable cause.

WHEREFORE, premises considered, the Petition is hereby DENIED. The Resolutions dated May 30, 2014 and September 4, 2014 in Case No. SB-13-CRM-0958 are AFFIRMED.

SO ORDERED. (PERLAS-BERNABE, J., on official leave)

[i] Also referred to as "Nelson Cabrera Buenaflor" in some parts of the rollo.

[ii] Also referred to as "Wilfredo Borreros Domo-ong" and "Wilfredo B. Domoong" in some parts of the rollo.

[iii]Also referred to as "Romeo Cabibi Lanciola" in some parts of the rollo.

[iv] Also referred to as "Nellie Mintu Ilas" in some parts of the rollo.

[1] Rollo, pp. 43-74.

[2] Id. at 75-88. Penned by Associate Justice Efren N. De La Cruz, with Associate Justices Rodolfo A. Ponferrada and Rafael R. Lagos concurring.

[3] Id. at 100-102.

[4] Id. at 566. Signed by Associate Justices Efren N. De La Cruz, Rafael R. Lagoa and Napoleon E. Inoturan.

[5] AN ACT REORGANIZING THE QUEDAN GUARANTEE FUND BOARD, RENAMING IT, AS QUEDAN AND RURAL CREDIT GUARANTEE CORPORATION, ENLARGING ITS POWERS AND RESOURCES TO SUPPORT FARMERS AND RURAL ENTERPRISES, AND FOR OTHER PURPOSES OTHERWISE KNOWN AS THE "QUEDAN AND RURAL CREDIT GUARANTEE CORPORATION ACT," April 13, 1992.

Sec. 3(q), RA 10000, entitled AN ACT PROVIDING FOR AN AGRICULTURE AND AGRARIAN REFORM CREDIT AND FINANCING SYSTEM THROUGH BANKING INSTITUTIONS OTHERWISE KNOWN AS "THE AGRI-AGRA REFORM CREDIT ACT OF 2009," February 23, 2010.

[7] Id.

[8] Rollo, p. 47.

[9] Id. at 212-219.

[10] Id. at 80-81.

[11] Id. at 349.

[12] An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government and for Other Purposes otherwise known as the "Government Procurement Reform Act," January 18, 2003.

[13] Id. at 401-403.

[14] Id. at 403.

[15] Id. at 220-237.

[16] Rollo, pp. 238-258.

[17] Id. at 256-257.

[18] Id. at 483-485.

[19] Id. at 483-484.

[20] Id. at 52, 549-565.

[21] Id. at 566.

[22] Id.

[23] Id. at 75.

[24] See id. at 75-76.

[25] Repealing Executive Order No. 109-A dated September 18, 2003 Prescribing the rules and Procedures on the Review and approval of All government Contracts to Conform with Republic Act No. 9184, otherwise known as "The Government Procurement reform Act," April 30, 2005.

[26] Rollo, pp. 87-88.

[27] Id. at 100-102.

[28] See id. at 57-59.

[29] Id. at 55.

[30] Id. at 82.

[31] Id. at 84.

[32] Almojuela v. People, 734 Phil. 636, 651 (2014).

[33] See rollo, pp. 62-64.

[34] Id. at 62-63.

[35] Id. at 484.

[36] Id. at 81-82.

[37] Id. at 80-81.

[38] Id. at 83.

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