G.R. No. 1439 - Castaneda vs. Alemany

In January 2007, upon recommendation by then President Gloria Macapagal-Arroyo, Benito F. Estacio, Jr. (Estacio) was elected as member of the board of directors of Independent Realty Corporation Group of Companies (IRC), which is composed of corporations surrendered by former Marcos crony Jose Y. Campos to the government and supervised by the Presidential Commission on Good Government (PCGG).
Estacio's term was to expire on June 30, 2010, but he continued to serve on the IRC board until December 2010 and was concurrently Vice-President in mid-2010.

Prior to the expiration of Estacio’s term, the IRC board passed Resolution No. 2010-05-181 dated May 21, 2010, granting separation benefits to IRC officers.
Based on this Resolution, Estacio received separation pay amounting to P467,308.20, 14th month pay of P56,870.00, and an extra bonus of P20,000.00, totaling P544,178.20.

Petitioner Luis G. Quiogue, IRC’s General Manager, filed a Complaint-affidavit with the Ombudsman accusing Estacio of violating Section 3 (e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) for receiving the separation benefits causing undue injury to the government.
Quiogue argued that Memorandum Circular No. 40 (April 5, 1993) and Memorandum Circular No. 66 (August 24, 1993) of the Office of the President prescribed that PCGG-nominated directors of sequestered corporations could only receive limited allowances and were not entitled to retirement benefits or profit-sharing unless authorized.

Estacio contended that he was not a public officer and hence the Ombudsman had no jurisdiction over him, asserting that IRC remains a private corporation despite government supervision.
He claimed that MC Nos. 40 and 66 did not apply to him, and that his position as Vice-President did not require presidential approval as he was not a PCGG-nominated director.
He defended the validity of the benefits granted pursuant to the board resolution under the "business judgment rule," done in good faith.

On October 13, 2014, the Ombudsman dismissed the complaint for lack of probable cause, ruling Estacio a public officer by virtue of IRC being a GOCC, owning 481,181 of 481,184 shares.
The Ombudsman found that Estacio’s receipt of benefits was not in the performance of official functions and that there was no manifest partiality, evident bad faith, or gross inexcusable negligence in the board resolution.
The Ombudsman clarified that MC Nos. 40 and 66 apply only to PCGG-nominated directors, and that authorized directors assuming line functions are governed by by-laws and corporate policies per MC No. 175 (1998).
The motion for reconsideration filed by petitioner was denied on March 10, 2015, leading to the filing of the present Petition for Certiorari.

Whether the Ombudsman had jurisdiction over Estacio by virtue of him being a public officer.
Whether there exists probable cause to charge Estacio with violation of Section 3 (e) of RA No. 3019 for receiving separation pay and benefits causing undue injury to the government.
Whether the board resolution granting separation benefits to IRC officers, including Estacio, was tainted with manifest partiality, evident bad faith, or gross inexcusable negligence.
Whether Estacio’s acts constitute corrupt practices under the Anti-Graft and Corrupt Practices Act.