G.R. No. 169328 - Alzaga vs. Sandiganbayan

On October 7, 1999, four separate Informations were filed against petitioners Julian A. Alzaga, Meinrado Enrique A. Bello, and Manuel S. Satuito for violation of Section 3(e) of Republic Act (R.A.) No. 3019 arising from alleged irregularities in the purchase of four lots in Tanauan, Batangas by the Armed Forces of the Philippines Retirement and Separation Benefits System (AFP-RSBS).

The informational charges were tied to the manner and circumstances of the transactions involving these lots, suggesting possible irregularities in government-related procurement.

Julian A. Alzaga served as the Head of the Legal Department of AFP-RSBS and held the position of Vice President at the time one of the lot purchases occurred.

Meinrado Enrique A. Bello, who succeeded Alzaga as Head of the Legal Department, was also a Vice President and was in position during the purchase of the remaining three lots.

Manuel S. Satuito, serving as the Chief of the Documentation, was designated as Assistant Vice President of the AFP-RSBS.

Petitioners filed respective Motions to Quash and/or Dismiss the Informations, arguing that:

The AFP-RSBS was a private entity created solely for the benefit of its members and not a government entity.

Their positions and salary grades did not fall within the jurisdiction conferred upon the Sandiganbayan by Section 4 of Presidential Decree (P.D.) No. 1606, as amended by R.A. No. 8249.

On May 27, 2004, the Sandiganbayan initially granted the petitioners’ motions, dismissing the Informations for lack of jurisdiction.

However, on April 25, 2005, the Sandiganbayan reversed its earlier resolution by holding that the AFP-RSBS was, in fact, a government-owned or controlled corporation, and that the positions occupied by petitioners were within the ambit of the law.

A subsequent Motion for Reconsideration filed by the petitioners was denied via a resolution dated August 10, 2005.

The legal debate centered on the proper interpretation of Section 4 of P.D. No. 1606 (as amended by R.A. No. 8249), which gives the Sandiganbayan jurisdiction over officials holding specific executive positions in government-owned or controlled corporations.

The discussion involved the appropriateness of applying the term “managers” to petitioners whose titles were Vice President and Assistant Vice President, and whether these designations were indeed "higher than" or equivalent to those enumerated under the statute.

The nature of the AFP-RSBS itself was under scrutiny; while petitioners claimed it was a private entity, the institutional facts, including its funding mechanism and administrative structure, indicated that it functioned similarly to other government service institutions like the GSIS and SSS.

The AFP-RSBS was established under P.D. No. 361 (1973) and operates as a guarantor of continuous financial support to military retirees, similar in nature to other government social insurance institutions.

Prior decisions such as People of the Philippines v. Sandiganbayan, Ramiscal, Jr. v. Sandiganbayan, and Geduspan v. People were cited to underscore that the public interest imbued the operations of the AFP-RSBS, and that jurisdiction under the statute is determined by the nature of the position held rather than strictly on salary grade.

Key statutory provisions emphasized that the jurisdiction of the Sandiganbayan extends to officials of government-owned or controlled corporations who occupy positions that may not be specifically mentioned by title but are substantively equivalent to those within its purview.

Whether the lower court committed grave abuse of discretion amounting to lack or excess of jurisdiction in deciding, on the merits, the question of whether it had jurisdiction over the persons of the petitioners.
Whether the court erred in determining that the AFP-RSBS is a government-owned or controlled corporation, contrary to the petitioners’ contention that it is a private entity created for the benefit of its members.
Whether the positions held by petitioners Alzaga and Bello (Vice Presidents) and petitioner Satuito (Assistant Vice President) fall within the term “managers” as defined under Section 4(a)(1)(g) of P.D. No. 1606, as amended by R.A. No. 8249, thereby placing them under the jurisdiction of the Sandiganbayan.