G.R. No. 207606 - Office of the Ombudsman vs. Hermosura

The private complainant is Brenda Ortiz, a businesswoman engaged in the lending business.
The respondent is Teodora T. Hermosura, also known as Teodora Cornelio, who served as a Computer Operator II at the University of Makati (UMAK) until her approved optional retirement on June 15, 2008.

In 2005, the respondent initially borrowed P10,000.00 from Ortiz.
The loan was renewed several times, and prompt repayments led to a growing trust and friendship between the parties.
Based on this trust, Ortiz engaged the respondent as her agent in the lending business.
Under the agency arrangement, the respondent was responsible for:

Extending loans or providing loan accommodations to clients at an agreed interest rate;
Identifying potential borrowers and assessing their creditworthiness;
Collecting loan installments from the borrowers and remitting the same to Ortiz; and
Receiving a commission equal to five percent (5%) of the total amount collected.

The process functioned smoothly until 2007 when the respondent began to fail in remitting the collections to Ortiz.
Ortiz attempted to contact the respondent, eventually discovering her new phone number through an employee of UMAK.
A meeting held in a Pasay City restaurant led to the respondent allegedly admitting that the unremitted collections were used for her personal needs; she promised to settle her obligation.
After this meeting, the respondent became unreachable.

Following her inability to collect the owed sums, Ortiz sent two demand letters via her counsel, warning of possible legal action if the money—amounting to over P40,000,000.00—was not returned.
Ortiz then filed an administrative complaint against the respondent for dishonesty.
The respondent, in her counter-affidavit, denied the allegations, repudiated the agency contract by asserting that their relationship was that of a business venture (with her as the industrial partner and Ortiz as the capitalist), and claimed difficulties in obtaining payments from borrowers due to high interest rates and strict salary deduction policies imposed by institutions.
Additionally, the respondent maintained that she had already remitted the sum of P65,693,770.00 to Ortiz.

On January 29, 2010, the Ombudsman rendered a Decision finding the respondent guilty of dishonesty, rejecting her contention that the administrative complaint was time-barred since it was filed after her retirement.
The Ombudsman noted that the respondent failed to present evidence supporting her claim of payment and that her explanations concerning collection difficulties were unsubstantiated.
Based on Section 23, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order No. 292, the respondent was penalized for a grave offense of dishonesty:

An Order dated October 14, 2010, denying the respondent’s motion for reconsideration followed.

On October 23, 2012, the CA reversed the Ombudsman’s Decision, ruling that the respondent could not be held administratively liable because she had already retired—thus, she was not a subject of an administrative complaint filed after her separation from government service.
The CA’s reasoning leaned on the notion that a validly severed public servant is not answerable for acts after termination, citing established cases such as Office of the Court Administrator v. Juan and others.
The CA further denied the Ombudsman’s motion for reconsideration in its Resolution dated May 23, 2013.

The Office of the Ombudsman, dissatisfied with the CA’s reversal and reasoning, filed the present petition for review on certiorari challenging the decisions of the CA.
Central to the dispute is whether the respondent’s voluntary optional retirement was designed to pre-empt the filing of the administrative complaint and if she should, therefore, be held administratively liable for dishonesty.

Whether the Ombudsman could have taken cognizance of the administrative complaint against the respondent given that she had availed of optional retirement several months before the complaint was filed.
Whether the respondent’s act of retirement was voluntary or a stratagem to forestall impending administrative sanctions.

Whether the respondent should be held administratively liable for the charge of dishonesty despite her retirement.
Whether her actions—namely, the failure to remit collected funds and subsequent unavailability—constitute an administrative offense warranting discipline.

How existing case law, particularly Office of the Ombudsman v. Andutan, Jr., applies to situations where a public official’s separation from service might preclude or permit administrative proceedings.