G.R. No. 159922 - Chan vs. Court of Appeals

Case Summary (G.R. No. 159922)

Factual Background

Chan alleged that on January 19, 1998, the DPWH, Office of the District Engineer, Catarman, issued a Notice of Award, through Odejerte, to a contractor, Tuscan Structures and Supplies, for the construction of a five-seater public toilet at Sitio Barikig, Barangay San Miguel, Lavezares, Northern Samar. The contract price was P239,126.95. According to the complaint, the project was later realigned: instead of constructing the toilet, the respondents caused the construction of barangay sports facilities on private property supposedly owned by Nonilon Ebdane and Moises Parane, supported by the cited Tax Declaration Nos. 29013 and 28159.

Chan further alleged that on February 3, 1998, the DPWH, through Perez and Tuscan Structures and Supplies, executed a contract describing the scope of work as excavation—(a) cut and (b) fill—and not sports facilities, yet at the same contract price of P239,126.95. Chan claimed that the project was to be completed within 30 days, but the contractor finished it in 15 days. He also asserted that the project was accepted on March 18, 1998 by Bienvenido Cagsawa, identified as Barangay Captain of Barangay Enriqueta, rather than the chairman of Barangay Urdaneta, where Chan claimed the project was implemented.

Chan contended that the realignment was made without observing the rules and guidelines for realigning government-funded projects. Despite these alleged anomalies, Chan maintained that the contractor received the contract price of P239,126.95, less taxes, based on a disbursement voucher approved by Adongay and Odejerte.

Respondents’ Defenses and Counter-Theory

In their joint counter-affidavit, Adongay and Aleria denied the charges. They alleged that the property where the project was accomplished had been donated by Raymundo A. Daza to Barangay Urdaneta through a Deed of Donation dated October 15, 1997. They asserted that acceptance was made by Barangay Captain Donato Parina on October 31, 1997 pursuant to Resolution No. 04, Series of 1997 of the Sangguniang Barangay of Urdaneta, and thus the property had become barangay-owned.

The respondents alleged that the realignment of funds was approved and in order. They relied on documentary evidence described as communications between the Department of Budget Management (DBM) and the DPWH secretary, and on the claim that the realignment related to sports facilities and/or site purposes in line with existing plans. They characterized the contract as involving site development, a playground, and an initial phase leading to future sports facilities/projects to be implemented by the local government and other government agencies, consistent with plan and specifications.

They also argued that the contractor’s early completion was advantageous to the government because it reduced engineering supervision and administrative overhead expenses. They further asserted that the five-seater toilet project was accepted by Barangay Captain Parina of Barangay Urdaneta on March 18, 1998.

The respondents added that the project’s early completion could qualify for an incentive bonus under Presidential Decree No. 1594. They also maintained that the sports facilities questioned by Chan served as a playground for Day Care children and that there was a newly constructed Day Care Center on the lot, allegedly implemented by DPWH. They attached various documents and photographs and claimed that the project had already been completed and turned over to the barangay through a certificate of acceptance signed by the Barangay Captain of Barangay Urdaneta. They further asserted that the municipality later entered into another contract for a barangay sports facility in July 19, 1999 for P446,825.76.

Supplemental Complaint and Additional Allegations

Chan filed a reply-affidavit with a supplemental complaint against additional persons, including Raymundo A. Daza, Donato Parina, and Bienvenido Cagsawa. Chan alleged that the deed of donation on file in the Regional Trial Court clerk of court of Allen, Northern Samar, was in favor of Barangay Captain of Barangay Enriqueta, Municipality of Lavezares, and not Barangay Urdaneta in the same municipality. On this premise, Chan asserted that the acceptance made by the barangay captain of Barangay Urdaneta had no legal effect.

Chan also invoked Tax Declaration No. 28159, which he said showed the owner of the property as Moises Parane, not Raymundo Daza. Chan further claimed that there was no showing that the Sangguniang Bayan authorized the barangay captain to accept the donation on October 15, 1997, as supposedly required by the Local Government Code, because, he alleged, acceptance via Sangguniang Bayan resolution occurred only on August 1, 1998. He contended that the DBM-approved realignment was for sports facilities and not merely for site purposes, and he asserted that the realignment was contrary to DBM Circular No. 445, Series of 1995.

The supplemental complaint also alleged that Daza, Parina, and Cagsawa conspired with the original respondents to commit crimes such as falsification of documents and use of falsified documents, invoking Section 3(e) of Rep. Act No. 3019.

Rejoinder Evidence and the Scope of Factual Dispute

In their rejoinder-affidavit, Aleria and Adongay asserted that Parane had sold the property to Daza as early as 1997 based on a Deed of Absolute Sale of Coconut Land dated July 8, 1997. They also claimed, through an affidavit of a witness (identified in the text as clerk-typist of a notary public), that the deed of donation executed by Daza in favor of Barangay Enriqueta had been withdrawn and replaced by a deed executed in favor of Barangay Urdaneta, which they said was submitted to DPWH and was the one implemented. They stated that the project still existed and was enjoyed by residents of Barangay Urdaneta and attached the referenced annex documents.

Ombudsman Resolution of Dismissal for Lack of Probable Cause

On October 27, 2001, the Graft Investigation Officer I Alvin Butch E. Canares issued a resolution recommending the dismissal of the complaint for lack of probable cause to file an Information against the private respondents. The recommendation was approved by the Deputy Ombudsman of the Visayas.

The resolution reasoned that the allegation of non-existent projects had been rebutted by documentary evidence and photographs. It stated that remaining matters to be resolved involved whether the cost of the project of excavation and filling was proper and whether the realignment from a five-seater public toilet to sports facilities was proper under existing rules. The Ombudsman resolution noted the dispute on the proper cost, contrasting the complainant’s alleged self-serving computation with respondents’ presumptive regularity. It emphasized the presumption that public officers enjoy the regularity of official performance, particularly because the projects were stated to have undergone safeguards, including proper audit procedures. It concluded that the realignment’s compliance was supported by approval from the DBM and that the complainant’s personal interpretation of the rules was insufficient to overturn the documentary evidence.

Chan moved for reconsideration, alleging that the investigation officer failed to consider evidence and resolved issues. The Ombudsman denied the motion in a resolution dated February 19, 2002.

Proceedings Before the Court of Appeals

On June 11, 2002, Chan filed a petition for certiorari before the Court of Appeals, assailing the Ombudsman resolutions. He argued, among others, that the Ombudsman erred in dismissing the complaint without resolving “vital issues” such as illegal use of public funds, falsification of public documents, and use of falsified documents; and in prematurely dismissing the case without requiring additional respondents to submit counter-affidavits despite their inclusion. He also contended that the Ombudsman wrongfully treated the realignment and acceptance issues, failed to recognize unwarranted benefit given to Daza by reason of extension of the project to Daza’s adjacent lot, and incorrectly found no excessive payment and proper compliance with realignment rules.

On September 4, 2003, the CA rendered judgment denying due course and dismissing the petition. It held that Chan failed to show grave abuse of discretion by the Ombudsman. It regarded the asserted errors as mere errors of judgment that were not reviewable via certiorari. It also characterized the issues as factual, which were improper for certiorari.

Petition Before the Supreme Court and the Issues Raised

Chan then filed a petition for review on certiorari, assigning issues that included whether the CA decision complied with Section 14, Article VIII of the Constitution, and whether grave abuse of discretion under Rule 65 was properly established. He further alleged that the CA erred in upholding the Ombudsman’s finding of no probable cause for violation of Rep. Act No. 3019.

As to the constitutional compliance issue, Chan claimed the CA failed to peruse each assignment of error and did not clearly state the factual and legal bases for its conclusions, thereby rendering the CA decision void.

Supreme Court’s Evaluation of the CA’s Compliance with Constitutional Requirements

The Court agreed with Chan only insofar as it recognized that Section 14, Article VIII of the Constitution requires courts and quasi-judicial bodies to clearly and distinctly state the facts and the law upon which the decision is based. It reiterated that due process demands that the parties be informed of how and why the decision was reached so that the losing party may intelligently appeal.

However, the Court found that the CA decision, upon cursory reading, contained: (a) a summary of antecedental facts and the Ombudsman proceedings; (b) elucidation on how threshold issues were resolved; and (c) the factual and legal bases supporting its holding. The Court thus determined that the CA did not violate the c

Case Syllabus (G.R. No. 159922)

Armando F. Chan filed an Affidavit-Complaint with the Office of the Ombudsman charging provincial officials with illegal use of public funds, violation of Republic Act No. 3019, and other offenses.
The charged respondents were Hon. Simeon V. Marcelo, in his capacity as Ombudsman, and the private respondents: Antonio A. Odejerte, Serafin V. Perez, Jr., David P. Adongay, Jr., and Virgilio G. Aleria, all from the Department of Public Works and Highways (DPWH) Engineering District in Catarman, Northern Samar.
The Ombudsman dismissed the complaint for lack of probable cause, and Chan pursued certiorari before the Court of Appeals (CA).
The CA denied due course and dismissed the petition, prompting Chan to file a petition for review on certiorari before the Supreme Court.
The Supreme Court ultimately denied the petition due course, with costs against Chan.

Parties and Procedural Posture

Chan appeared as petitioner, having initiated the administrative-criminal complaint before the Ombudsman.
The Ombudsman was impleaded through Hon. Simeon V. Marcelo, and the DPWH officials were impleaded as private respondents.
The case originated in an Ombudsman proceeding for determination of probable cause for filing criminal informations.
The Ombudsman issued a resolution recommending dismissal, and the Deputy Ombudsman of the Visayas approved it.
Chan sought reconsideration, which the Ombudsman denied.
Chan then filed a petition for certiorari with the CA, assailing the Ombudsman’s dismissal.
The CA dismissed the certiorari petition, holding that grave abuse of discretion was not shown.
Chan elevated the matter to the Supreme Court via petition for review on certiorari, raising both constitutional and grave-abuse issues.

Key Factual Allegations

Chan alleged that on January 19, 1998, DPWH issued a Notice of Award through Odejerte to Tuscan Structures and Supplies for a five-seater public toilet at Sitio Barikig, Barangay San Miguel, Lavezares, Northern Samar.
Chan alleged the contract price was P239,126.95, but the project was realigned so that barangay sports facilities were instead constructed.
Chan claimed the realigned sports facilities were built on private property owned by Nonilon Ebdane and Moises Parane, allegedly evidenced by Tax Declaration Nos. 29013 and 28159.
Chan alleged that on February 3, 1998, DPWH, through Perez, executed a contract describing the scope as excavation (a) cut and (b) fill, and not sports facilities, yet the cost remained P239,126.95.
Chan alleged that the project was to be completed in 30 days, but the contractor finished it in 15 days.
Chan claimed the project was accepted on March 18, 1998 by Bienvenido Cagsawa, Barangay Captain of Barangay Enriqueta, and not by the chairman of Barangay Urdaneta where the project was implemented.
Chan alleged the realignment was made without observing rules and guidelines for realignment of government-funded projects.
Chan asserted that despite the alleged anomalies, the contractor received payment of P239,126.95 (less taxes), supported by a disbursement voucher approved by Adongay and Odejerte.
In a supplemental complaint, Chan charged additional individuals with conspiring and committing falsification and use of falsified documents under Section 3(e) of Republic Act No. 3019.

Defenses and Documentary Bases

Adongay and Aleria denied the charges in a Joint Counter-Affidavit.
They alleged that the property where the project was implemented was donated by Raymundo A. Daza to Barangay Urdaneta via a Deed of Donation dated October 15, 1997.
They alleged barangay ownership was shown by acceptance through Barangay Captain Donato Parina per Resolution No. 04, Series of 1997 of the Sangguniang Barangay.
They asserted the DBM-approved realignment was in order, and that communications between the DBM and DPWH secretary reflected such approval.
They contended the contract scope was for site development, described as a playground and initial phase of future sports facilities to be implemented by local government and other agencies.
They argued that earlier completion benefited the government by reducing engineering supervision and administrative overhead expenses.
They alleged acceptance of the public toilet project on March 18, 1998 was made by Barangay Captain Parina of Barangay Urdaneta.
They invoked Presidential Decree No. 1594 to support the proposition that a contractor may be granted an incentive bonus for completing projects ahead of schedule.
They argued that the sports facilities served as a playground for Day Care school children and that there was a newly constructed Day Care Center on the same lot.
They submitted documents and pictures as annexes to show the existence of other phases and related municipal projects on the property.
They asserted the questioned project was already completed and turned over, citing a Certificate of Acceptance signed by the Barangay Captain of Barangay Urdaneta.
They alleged the municipality later contracted for barangay sports facilities on July 19, 1999 for P446,825.76.

Supplemental Allegations and Rebuttals

Chan further alleged that the deed of donation on file in the Office of the Clerk of Court of the Regional Trial Court of Allen, Northern Samar favored Barangay Enriqueta, not Barangay Urdaneta.
He alleged that Tax Declaration No. 28159 covered the donated property in the name of Moises Parane, not Raymundo Daza.
He argued there was no showing that the Sangguniang Bayan authorized the barangay captain to accept the donation on October 15, 1997, and that acceptance occurred only on August 1, 1998.
Chan asserted that DBM approval for realignment was for sports facilities rather than mere site purposes, contrary to DBM Circular No. 445, Series of 1995.
Aleria and Adongay replied by alleging that Parane sold the property to Daza in 1997, evidenced by a Deed of Absolute Sale of Coconut Land dated July 8, 1997.
They alleged that a prior donation deed executed in favor of Barangay Enriqueta had been withdrawn and replaced by the donation deed in favor of Barangay Urdaneta, which was submitted to DPWH and was the document actually implemented.

Ombudsman Findings and Resolution

On October 27, 2001, the Ombudsman’s Graft Investigation Officer issued a resolution recommending dismissal for lack of probable cause.
The resolution concluded that allegations of non-existent projects were sufficiently rebutted by documentary evidence and photographs submitted by the respondents.
The Ombudsman identified the remaining matters as contesting (a) whether the excavation and filling cost was proper and (b) whether the realignment from a five-seater public toilet to spo