G.R. No. L-35645 - People vs. V.M. Ruiz

Petitioners Domingo Ingco, Ernesto Magboo, and Herminio Alcasid filed a civil action for certiorari and prohibition.
They sought to nullify resolutions of the Sandiganbayan dated 07 October 1993 and 08 November 1993, which denied their motions to quash the information and for reconsideration.
The petition was filed in connection with allegations arising from the grant of loans by the Philippine National Bank (PNB) to Cresta Monte Shipping Corporation.

An amount of US$5.91 million approved on 22 September 1977 by Board Resolution No. 703 for the purchase of two cargo vessels from Japan.
An amount of US$7.5 million approved on 27 March 1978 by Board Resolution No. 642 for the purchase of two brand-new oceangoing vessels from Japan.

A guaranty by the National Investment and Development Corporation (NIDC), a wholly-owned subsidiary of PNB, which already circulated within the bank’s corporate structure.
The joint and several signatures of petitioners (in the case of the first loan) and their spouses, with noted deficiencies in the documentation—especially with the second loan where the signatures were submitted a year after the loan’s approval.

The factual findings by the Committee on Behest Loans under the Office of the Special Prosecutor detailed:

Cresta Monte Shipping Corporation’s background, incorporation details, and operational history (engaging in domestic and overseas shipping, operating multiple vessels, etc.).
The sequence of obtaining two loan accommodations from PNB, including the collateral and security arrangements involving chattel mortgages on vessels and pledges of stock.

Loans were approved without a proper project feasibility study, even though adverse remarks existed in the Credit Department’s evaluation.
The collateral security and guaranty submitted (from NIDC) were insufficient and effectively illusory given the interrelations between PNB and NIDC.
Petitioners, in conspiracy, influenced the approval of loans under manifestly disadvantageous terms, thereby causing undue injury to the Government.

Denied any conspiracy with Magboo and Alcasid.
Asserted that the commercial viability of the project was thoroughly evaluated and received a rating of “B-1” (indicating good quality).
Claimed that he was not responsible for the alleged deficiencies regarding the collection of the joint and several signatures, as such operational matters fell under the International Department.
Maintained that there was no collateral deficiency at the time the loans were granted and that the NIDC, as a guarantor, was suitably credible.

On 26 May 1987, PNB charged Ingco along with high-ranking officials of Cresta Monte before the Presidential Blue Ribbon Committee, which later led to a referral to the Office of the Ombudsman.
The subsequent resolutions and findings by the Committee on Behest Loans described the loans as behest loans—transactions allegedly influenced by high government officials that resulted in manifest prejudice to the Government.
On 21 July 1993, an information was filed with the Sandiganbayan charging the petitioners with violations of Section 3(e) in relation to Section 3(g) of Republic Act No. 3019 (the Anti-Graft and Corrupt Practices Act), highlighting:

The recommendation and subsequent approval of the loans despite clear deficiencies (capitalization, feasibility study, adverse comments, collateral defects).
The alleged conspiracy among a public officer (Ingco) and private individuals (Magboo and Alcasid) leading to the disbursement of the loans.

Whether the loans were indeed behest loans granted under undue pressure and subject to manifest irregularities.
Whether proper safeguards and corporate procedures were bypassed during the approval process, thereby exposing the Government to undue detriment.

Although the alleged offenses occurred in 1977/1978, questions arose regarding prescription since the information was filed in 1993.
It was argued that the filing of the complaint with the Ombudsman on 26 May 1987, as well as subsequent actions, tolled or suspended the prescriptive period, ensuring the offense had not prescribed.

Whether the alleged offenses had prescribed given more than ten years had elapsed between the commission of the acts (1977/1978) and the filing of the information (1993).
Whether the filing of the complaint with the Ombudsman effectively tolled the running of the prescriptive period.

Whether the facts charged in the information—specifically, the alleged conspiracy to secure loans on manifestly and grossly disadvantageous terms—constitute an offense under Section 3(e) in relation to Section 3(g) of Republic Act No. 3019.
Whether the essential elements (bad faith, manifest partiality, undue injury to the Government, and the improper conduct in entering into disadvantageous transactions) are adequately and clearly specified in the information.

Whether the conduct of Senior Vice-President Domingo Ingco, as merely a recommendatory officer in the approval process, rises to the level of criminal liability.
Whether petitioners Ernesto Magboo and Herminio Alcasid, being private individuals and not public officers, can be held criminally liable under the provisions of the Anti-Graft law.