Title
Duterte vs. Sandiganbayan
Case
G.R. No. 130191
Decision Date
Apr 27, 1998
Duterte and De Guzman charged under Anti-Graft Act for a rescinded Davao City computerization contract; SC dismissed case due to procedural lapses, lack of due process, and no valid contract.
computer contract
preliminary investigation
due process

Case Summary (G.R. No. 130191)

Factual Background

The City Government of Davao launched the Davao City Local Automation Project in 1990 and appointed a Computerization Program Committee chaired by Benjamin C. De Guzman to evaluate computer systems and procure equipment and services. The Committee recommended Goldstar computers, exclusively distributed in the Philippines by Systems Plus, Inc. (“SPI”). Negotiations with SPI produced a contract with a total cost of P 11,656,810.00, which the Sangguniang Panlungsod approved by Resolution No. 1402 and Ordinance No. 173 on November 5, 1990 and authorized Mayor Rodrigo R. Duterte to sign the contract. A downpayment of P 1,748,521.58 was released on November 8, 1990. Following concerns raised by a citizen complaint and after a proposal from Goldstar to cancel the contract, the parties mutually rescinded the contract on May 6, 1991 and the downpayment was refunded. The Commission on Audit conducted a special audit and issued SAR No. 91-05 on May 31, 1991 recommending rescission and citing alleged violations of procurement and auditing laws and regulations. The City later procured alternative computers upon the recommendation of the National Computer Center.

Proceedings Before the Ombudsman and the Special Audit

After SAR No. 91-05, the Anti-Graft League–Davao City Chapter filed an unverified complaint on August 1, 1991 (OMB-3-91-1768) alleging violations of R.A. No. 3019 and other laws. On October 9, 1991, Graft Investigation Officer Pepito A. Manriquez requested the Special Audit Team to submit affidavits to substantiate the complaint pursuant to A.O. No. 07, Rule II, Sec. 4(a), but before those affidavits were furnished the investigating officer on November 12, 1991 directed petitioners to file “verified point-by-point comment under oath” on the allegations in Civil Case No. 20,550-91 and on SAR No. 91-05. The Special Audit Team’s affidavits were eventually filed with the Ombudsman on December 4, 1991 but copies were not furnished to petitioners.

Filing of Information and Motions in the Sandiganbayan

Based on a memorandum of Special Prosecution Officer Lemuel M. De Guzman dated February 8, 1996 recommending prosecution under Sec. 3(g), R.A. No. 3019, the Ombudsman authorized the filing of an information. The information dated February 8, 1996 and docketed as Criminal Case No. 23193 charged petitioners with having willfully and criminally entered into a negotiated contract with Systems Plus, Inc. for P 11,656,810.00 which was alleged to be manifestly and grossly disadvantageous to the government, citing alleged overpricing and absence of public bidding. Petitioners filed motions for reconsideration and supplemental motions in February and March 1996, which the Ombudsman denied on March 19, 1996. Petitioners filed a Motion to Quash on June 18, 1997 which the Sandiganbayan denied by order dated June 27, 1997, and denied their motion for reconsideration by resolution dated August 5, 1997. Arraignment had been set for July 25, 1997 before the Sandiganbayan.

Issues Presented to the Supreme Court

The petition questioned whether the Sandiganbayan committed grave abuse of discretion in denying the Motion to Quash and the motion for reconsideration on grounds that: (1) petitioners were effectively deprived of a preliminary investigation as required by A.O. No. 07, Rule II; (2) there was an inordinate delay in terminating the preliminary investigation that violated the constitutional right to due process and the right to speedy disposition under Section 16, Article III, 1987 Constitution; and (3) there was no sufficient basis in fact or law to charge petitioners under Sec. 3(g), R.A. No. 3019 because petitioner Duterte acted in good faith and the contract had been rescinded such that there was no manifestly and grossly disadvantageous contract.

Petitioners’ Arguments

Rodrigo R. Duterte and Benjamin C. De Guzman argued that the procedures of preliminary investigation were not observed because they were required only to file comments on an earlier civil complaint and on the COA Special Audit Report instead of being furnished complaint-affidavits and being asked to file counter-affidavits; that they were thereby deprived of the adversarial preliminary investigation contemplated by A.O. No. 07; that the Office of the Ombudsman unduly delayed final action for approximately four years between the filing of their comments in 1992 and the filing of the information in 1996, prejudicing their right to a speedy disposition; and that on the merits the charge under Sec. 3(g) lacked the necessary element that the accused entered into a contract on behalf of the government because the contract had been rescinded on May 6, 1991.

Sandiganbayan’s Reasoning Below

The Sandiganbayan accepted the Ombudsman’s position that petitioners had an opportunity to be heard by filing motions for reconsideration of the Ombudsman’s resolution authorizing the filing of the information and therefore any defect in the preliminary investigation had been remedied by those motions. The Sandiganbayan concluded that it was not empowered to authorize a reinvestigation on the ground of inadequacy of the preliminary investigation or to revisit the prosecutorial appreciation of the evidence and ordered arraignment.

Supreme Court’s Ruling

The Supreme Court granted the petition, held that the preliminary investigation was not conducted in accordance with A.O. No. 07, Rule II, Secs. 2 and 4, and found a violation of petitioners’ right to due process and to a speedy disposition of their case. The Court held that the November 12, 1991 order directing petitioners merely to file comments on the civil complaint and SAR No. 91-05 did not satisfy the procedural requisites of a preliminary investigation because the complainant’s affidavits were not attached and petitioners were not required to file counter-affidavits. The Court further found that the four-year delay between petitioners’ submission of comments in February 1992 and the memorandum recommending filing in February 1996 was inordinate and prejudicial. Finally, the Court ruled that the information failed to establish the second element of Sec. 3(g), R.A. No. 3019 because the contract had been mutually rescinded on May 6, 1991 and thus no contract remained for petitioners to have entered into on behalf of the government.

Legal Basis and Reasoning

The Court emphasized that a preliminary investigation, as regulated by A.O. No. 07, Rule II, Sec. 4, requires that where a complaint is unverified or based only on official reports the complainant must submit affidavits, that an investigating officer must attach the affidavits and other supporting documents to the order directing the respondent to submit counter-affidavits, and that the procedure is adversarial in nature. The Court reiterated precedent that a preliminary investigation is a substantive component of due process and a judicial inquiry that must afford the opportunity to be heard and the production and weighing of evidence (citing decisions including Olivas v. Office of the Ombudsman, Rodis, Sr. v.

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