Case Summary (G.R. No. 184083)
Key Dates
Important procedural and dispositive dates included in the record: OMB preliminary decision absolving respondents (30 September 2005); OMB denial of motion for reconsideration (25 November 2005); reported dismissal of respondent Dilag from the service (27 April 2006) as referenced by respondents; Court of Appeals Resolutions (28 April 2008 and 6 August 2008).
Applicable Law and Authorities
Constitutional framework: 1987 Constitution applied (decision date is after 1990). Statutes and rules invoked in the decision: Republic Act No. 6770 (The Ombudsman Act of 1989), specifically Section 27; Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees); Administrative Order No. 07, series of 1990 (Rules of Procedure of the Office of the Ombudsman), Section 7; Rules of Court provisions on remedies: Rule 43 (petition for review) and Rule 65 (special civil action for certiorari). Principal jurisprudence cited: Fabian v. Desierto; Barata v. Abalos, Jr.; Brito v. Office of the Deputy Ombudsman for Luzon; Republic v. Francisco; Heirs of Teofilo Gaudiano v. Benemerito; and other precedents quoted in the decision.
Summary of Factual Allegations
Petitioner filed a complaint with the OMB alleging multiple administrative and criminally‑tinged violations by Philracom officials, including: overpayment to racing clubs by failing to deduct the horse‑owner’s prize of the day (alleged overpayment P28,624,235.00); denial and scratching of petitioner’s horses from races by Philracom order; respondent Dilag’s personal purchases (medicines amounting to P13,346.00) and alleged reimbursements passed as promotional expenses without specification, bidding or prior approval; respondent Jose’s alleged ownership of multiple racehorses in violation of Philracom rules; unauthorized diversion of employees’ uniform allowances for a P400,000.00 contract; alleged unlawful purchases for Coggins tests equipment and medicines; failure to implement compulsory drug testing; and other allegations of malversation, falsification and conflict of interest.
Office of the Ombudsman Proceedings and Findings
The OMB’s Preliminary Investigation and Administrative Adjudication Bureau, after investigation, absolved respondents of the brought charges. Key factual and legal determinations by the OMB included: (1) under the MOA Philracom was obligated to reimburse prize money and there was no basis to require deduction of the horse‑owner’s prize of the day; (2) absence of the media consultant contract in petitioner’s submissions warranted dismissal of that charge for lack of proof; (3) removal of petitioner’s horses from a race was justified as a penalty for failure to submit them for a Coggins Test; (4) alleged irregular reimbursements were still subject to post‑audit by the Resident COA auditor making administrative action premature; (5) promotional expenses disbursements were consistent with DBM provisions and within the chairman’s authority; (6) purchases of uniforms were characterized as private transactions between employees and the supplier; (7) denials by respondents regarding purchases for Coggins Test equipment were accepted; (8) respondent Jose’s role was honorary and not subject to RA 6713’s divestment or prohibitions concerning private enterprises regulated by his office; and (9) petitioner failed to establish that implementing horse drug testing was the respondents’ principal duty. The OMB denied petitioner’s motion for reconsideration.
Court of Appeals Proceedings and Ruling
Petitioner filed a petition for certiorari under Rule 65 with the Court of Appeals challenging the OMB decision. The Court of Appeals dismissed the petition on procedural grounds (28 April 2008) for using the wrong mode of appeal, citing Fabian v. Desierto which treats OMB administrative issuances as subject to review by a petition for review under Rule 43 rather than certiorari under Rule 65 when the OMB has imposed penalties (i.e., when the OMB convicts). The Court of Appeals denied reconsideration (6 August 2008). Petitioner then elevated the matter to the Supreme Court.
Issues Presented on Review
Primary issues considered by the Supreme Court: (1) whether the petition for certiorari under Rule 65 was the correct remedy from an OMB decision absolving respondents; (2) whether Section 27 of RA 6770 renders OMB decisions absolving respondents final, executory, and unappealable; (3) whether the Court of Appeals erred in dismissing petitioner’s certiorari petition on procedural grounds; and (4) whether the OMB’s factual findings were susceptible to judicial review for grave abuse of discretion, error of law, fraud, or lack/excess of jurisdiction.
Statutory Finality and Its Proper Interpretation
The Court analyzed Section 27 of RA 6770 and the OMB Rules (Administrative Order No. 07, Rule III, Section 7) which provide that decisions absolving respondents (and decisions imposing only light penalties) are final and unappealable. The Court reasoned that, logically, if modestly punitive decisions are final and unappealable, decisions absolving respondents should be at least equally final and unappealable. The OMB rules expressly state that where the respondent is absolved of the charge the decision shall be final and unappealable; otherwise decisions become final after administrative windows for reconsideration or judicial remedies expire.
Judicial Review Despite Statutory Finality — Standard and Grounds
The Court reaffirmed the settled exception: decisions of administrative or quasi‑judicial agencies that are declared final and unappealable by statute remain subject to judicial review by certiorari under Rule 65 when the decision is tainted by arbitrariness, gross abuse of discretion, fraud, or legal error — that is, when the administrative body lacks jurisdiction or has committed grave abuse of discretion. The Supreme Court cited Republic v. Francisco and related jurisprudence in stating that where an agency’s findings are supported by substantial evidence they are conclusive; only when there is grave abuse of discretion or a clear failure to perform a duty, or jurisdictional excess or lack, will the courts intervene.
Jurisdictional Forum for Certiorari and the Doctrine Reexamined
The Court reviewed prior decisions on the proper forum for certiorari: Barata (held Court of Appeals proper forum for certiorari against an OMB decision absolving a respondent) and Brito (held that certiorari should be filed directly with the Supreme Court). The Court concluded that Brito’s departure from the doctrine was unwarranted and the Court abandoned the procedural rule enunciated in Brito. The Court reiterated that special civil action for certiorari is within the concurrent original jurisdiction of both the Supreme Court and the Court of Appeals, and in accordance with the hierarchy of courts and established policy, petitions should ordinarily be filed first with the Court of Appeals unless special, important and compelling reasons justify direct invocation of the Supreme Court’s original jurisdiction. Thus petitioner’s filing before the Court of Appeals was procedurally proper.
Application of Standard to the Present Record
Despite concluding that the Court of Appeals was the appropriate forum, the Supreme Court found that petitioner failed to show grave abuse of discretion or other legal grounds warranting judicial nullification of the OMB’s decision. The Court emphasized that the OMB’s decision comprehensively addressed the allegations and that its factual findings were supported by substantial evidence or were otherwise within its discretionary assessment. The Court noted that petitioner’s arguments largely rehashed factual disputes and asked the cour
...continue readingCase Syllabus (G.R. No. 184083)
Procedural Posture and Relief Sought
- Petition for certiorari under Rule 65 assailing Court of Appeals Resolutions dated 28 April 2008 and 6 August 2008 in CA G.R. SP No. 103150, which dismissed petitioner William C. Dagan’s petition from the Decision and Order of the Office of the Ombudsman (OMB) in OMB-C-A-05-0263-F that exonerated respondents.
- The Supreme Court en banc review arises from petitioner’s claim that the Court of Appeals erred in dismissing his Rule 65 certiorari petition and from petitioner’s contention that he was entitled to judicial review of the Ombudsman’s exonerative decision.
Parties and Background Facts
- Petitioner: William C. Dagan, owner of several racehorses that participated in races at Philippine Racing Club, Inc. and Manila Jockey Club, Inc.
- Respondents: Former Chairman and Commissioners of the Philippine Racing Commission (Philracom), specifically named in the source.
- The dispute flows from administrative allegations brought by petitioner against the Philracom officials relating to payments, race entries, purchases, alleged conflicts of interest, and implementation of drug-testing policies.
Complaint‑Affidavit: Allegations and Specific Averments
- Under Philracom-sponsored races, Philracom allegedly undertook payment of all prizes to winning horses or owners, less the allotted horse owner’s prize of the day, with PRCI or MJCI to advance the same; petitioner accuses Philracom of overpaying PRCI and MJCI by ₱28,624,235.00 for failing to deduct the horse owner’s prize of the day.
- On the day of a particular race, petitioner’s horses were denied participation and scratched from the race by order of Philracom.
- Respondent Dilag allegedly purchased various medicines for personal use and benefit amounting to ₱13,346.00.
- Respondent Dilag allegedly caused disbursement of Philracom funds as reimbursements for promotional expenses without specifying the nature of promotions and without necessary public bidding and prior Philracom approval.
- Respondent Jose allegedly owned, and appears to still own, at least eleven racehorses, allegedly in gross violation of Philracom rules and policies.
- Respondent Dilag allegedly entered into a contract for purchase of Philracom employees’ uniforms amounting to ₱400,000.00 taken from employees’ uniform allowance without their consent.
- Respondent Dilag allegedly purchased equipment and medicines purportedly for implementing Philracom’s policy to conduct Coggins Tests on all racehorses, purchases reportedly amounting to more than ₱200,000.00 per release.
- Respondent Dilag and other commissioners allegedly repeatedly failed and refused, without lawful justification, to implement compulsory drug testing for possible use of prohibitive substances on all racehorses.
Administrative Charges Formulated by the Ombudsman
- Overpayment (alleged failure to deduct horse owner’s prize of the day resulting in ₱28,624,235.00 overpayment to racing clubs).
- Improper hiring of a media consultant.
- Oppressive scratching (denial of participation of petitioner’s horses).
- Malversation/illegal use of funds (unjustified reimbursements and promotional disbursements).
- Unlawful purchases of employees’ uniforms and purchases for Coggins test equipment and medicines.
- Conflict of interest and non‑divestment of business interest (particularly regarding respondent Jose’s alleged racehorse ownership).
- Refusal or neglect to implement drug testing on racehorses.
Office of the Ombudsman Proceedings and Decision (Preliminary Investigation)
- Date of Ombudsman preliminary investigation Decision and Order: 30 September 2005; the Office absolved respondents of charges of grave misconduct, oppression, dishonesty, serious irregularities and violation of laws.
- Overpayment charge: OMB held that under the Memorandum of Agreement (MOA) Philracom was obligated to reimburse prize money; nothing in the MOA supported petitioner’s contention that the horse owner’s prize of the day should be deducted or withheld by Philracom.
- Improper hiring of media consultant: dismissed for failure of petitioner to submit a copy of the contract.
- Oppressive scratching (removal from race): justified by OMB as a penalty for not submitting the horses for a Coggins Test.
- Alleged malversation/illegal use of funds and questioned reimbursements: OMB found it premature to make an administrative case because the questioned reimbursements were still subject to a post‑audit by the Resident Commission on Audit (COA) Auditor of Philracom.
- Promotional expenses: disproved by the fact that the Department of Budget and Management (DBM) had been providing funds for promotional expenses and the Philracom Chairman was the rightful officer to disburse such funds.
- Unlawful purchases of employees’ uniforms: OMB accepted respondents’ explanation that the purchase of uniforms was a private transaction between employees and the awarded supplier.
- Purchases for Coggins Test equipment and medicines: OMB accepted respondents’ denial of any such purchases.
- Conflict of interest and non‑divestment: OMB ruled that respondent Jose is not covered by the prohibition in RA No. 6713 regarding ownership, control, management or employment in a private enterprise regulated or supervised by the office because he did not appear connected in any capacity with racing clubs and held his Philracom position in an honorary capacity; thus he was not covered by the Section 9 divestment requirement.
- Neglect in implementing drug testing: OMB disregarded the charge because petitioner failed to show it was respondents’ principal duty to implement such testing.
Motion for Reconsideration and OMB Denial
- Petitioner filed a motion for reconsideration/reinvestigation; on 25 November 2005, the Office of the Ombudsman denied the motion for lack of merit.
- The Office of the Ombudsman addressed the motion’s arguments seriatim in its Order denying reconsideration.