G.R. No. 235937-40 - Labay vs. Sandiganbayan

Case Summary (G.R. No. 235937-40)

Factual Background

The complaint dated May 11, 2015 was filed by Field Investigation Office I of the Office of the Ombudsman against Petitioner Labay for allegedly participating in the anomalous utilization of the Priority Development Assistance Fund of former Representative Marc Douglas C. Cagas IV. The complaint alleged that funds in the total amount of PHP 6,000,000 were diverted through the Farmer-business Development Corporation, then led by Petitioner Labay, and that the livelihood projects funded thereby were never implemented, constituting so-called “ghost projects.” The matter was docketed as OMB-C-C-15-0152.

Ombudsman Preliminary Investigation and Service Attempts

The Ombudsman issued a Joint Order dated September 1, 2015 directing respondents to file counter-affidavits, but attempts to serve a copy of that order on Petitioner Labay at his office in the National Anti-Poverty Commission and at his last known residence were returned unserved. The Ombudsman proceeded with the preliminary investigation without a counter-affidavit from Petitioner Labay and, in a Resolution dated May 10, 2016, found probable cause to indict him and others for conspiracy to violate Section 3(e), R.A. No. 3019, one count of malversation of public funds, and one count of malversation through falsification.

Petitioner’s Discovery of the Proceedings and Motions Before the Ombudsman

Petitioner Labay first learned of the Ombudsman’s actions in October 2016 from press releases. His daughter, Atty. Jo Blanca P.B. Labay, requested information and, by letter dated October 10, 2016, the Ombudsman furnished copies of its May 10, 2016 Resolution and directed that a motion for reconsideration be filed within five days. Petitioner Labay filed an Omnibus Motion for Reinvestigation and Deferment dated November 16, 2016 requesting copies of the complaint-affidavit and supporting documents and seeking reinvestigation. The Ombudsman denied that motion in an Order dated November 25, 2016, concluding that it had exerted diligent efforts to effect service and that the filing of the omnibus motion cured any defect. Petitioner Labay filed a further omnibus motion for reconsideration dated January 30, 2017, which the Ombudsman denied on February 1, 2017 as a second, impermissible motion.

Filing of Informations and Proceedings Before the Sandiganbayan

The Ombudsman filed four Informations with the Sandiganbayan on March 24, 2017. Petitioner Labay received a copy of the complaint-affidavit and supporting evidence on March 28, 2017 and the filed Informations on April 4, 2017. He then filed an Extremely Urgent Motion on April 5, 2017, seeking reinvestigation and deferment of filing of Informations due to the asserted denial of a complete preliminary investigation. The Sandiganbayan, in its July 10, 2017 resolution, declared the existence of probable cause, ordered warrants of arrest, and denied Petitioner Labay’s motion for reinvestigation for lack of merit. Petitioner Labay filed a Motion for Partial Reconsideration dated August 3, 2017, which the Sandiganbayan denied as pro forma on October 19, 2017.

Petition for Certiorari and Interim Relief

Petitioner Labay brought a petition for certiorari before the Supreme Court, praying for a temporary restraining order and writ of injunction, nullification of the assailed resolutions, remand to the Ombudsman for reinvestigation, and suspension of the criminal proceedings against him pending reinvestigation. The Supreme Court issued a temporary restraining order on March 21, 2018 enjoining the Sandiganbayan from proceeding against Petitioner Labay, and required the Office of the Special Prosecutor to comment. The Office of the Special Prosecutor filed an Entry of Appearance with Comment and moved to dissolve the TRO, arguing that due process had been observed and that Petitioner Labay had opportunities to be heard.

Issue Presented

The dispositive legal question was whether the Sandiganbayan committed grave abuse of discretion amounting to lack or excess of jurisdiction by denying Petitioner Labay’s motion for reinvestigation and by ruling that he was not deprived of due process during the Ombudsman’s preliminary investigation.

The Court’s Ruling

The Court granted the petition. It found that Petitioner Labay’s constitutional right to due process was violated when the Ombudsman failed to furnish him with the complaint-affidavit and its attachments during the preliminary investigation. The Court annulled and set aside the Sandiganbayan resolutions dated July 10, 2017 and October 19, 2017, and ordered the Office of the Special Prosecutor to file motions to withdraw the Informations in the referred criminal cases.

Legal Reasoning

The Court grounded its conclusion on the due process guarantees of Section 1, Article III and Article III, Section 14 of the 1987 Constitution, which include the right to be informed of the nature and cause of the accusation and the presumption of innocence. It reiterated that a preliminary investigation is intended to determine whether there is sufficient ground to engender a well-founded belief that a crime has been committed and that the respondent is probably guilty. The Court invoked Administrative Order No. 07 (Rules of Procedure of the Office of the Ombudsman) and Section 3, Rule 112 of the Revised Rules of Criminal Procedure, both of which require that respondents be served with the complaint and supporting affidavits and be afforded the opportunity to submit counter-affidavits and to examine the evidence on record. The Court found that the Ombudsman attempted service only once at two addresses and, having failed to serve the complaint-affidavit, proceeded on the record without Petitioner Labay’s participation. When Petitioner Labay subsequently requested access to the complaint-affidavit, the Ombudsman furnished only its Resolution finding probable cause and did not provide the underlying complaint-affidavit or permit access to the supporting documents. The Court held that receipt of the Resolution was not equivalent to receipt of the complaint-affidavit and that Petitioner Labay therefore could not effectively frame or marshal a defense or gather counter-evidence. The Court emphasized that suppression or withholding of evidence is sufficient to violate due process and that denial of the requested documents substantially impaired Petitioner Labay’s opportunity to be heard. Given the Ombudsman’s refusal to furnish the complaint-a

Case Syllabus (G.R. No. 235937-40)

Parties and Procedural Posture

Johanne Edward B. Labay filed a Petition for Certiorari under Rule 65, Rules of Court challenging two Sandiganbayan resolutions dated July 10, 2017 and October 19, 2017.
Sandiganbayan, Third Division issued the assailed resolutions in Criminal Case Nos. SB-17-CRM-0642 to 0645 denying a motion for reinvestigation and denying partial reconsideration.
People of the Philippines, through the Office of the Special Prosecutor and the Office of the Ombudsman, opposed the Petition and moved to dissolve the temporary restraining order issued by this Court.

Key Factual Allegations

The complaint dated May 11, 2015 by FIO I, Office of the Ombudsman accused that Priority Development Assistance Fund (PDAF) funds of Representative Marc Douglas C. Cagas IV were channelled to Farmer-business Development Corporation (FDC) and implemented as ghost projects.
Petitioner was alleged to have participated in the scheme as president of FDC and as conduit through the Technology Resource Center (TRC) leading to charges of malversation, falsification, and violations of R.A. No. 3019.
The Ombudsman issued a Joint Order dated September 1, 2015 directing respondents to file counter-affidavits, but copies of the order could not be served on petitioner as he was allegedly no longer at the addresses used for service.

Ombudsman Proceedings

The Ombudsman, after unsuccessful service attempts, proceeded with the preliminary investigation and, in a Resolution dated May 10, 2016, found probable cause to indict petitioner for conspiracy, malversation, and malversation through falsification.
Petitioner learned of the Ombudsman Resolutions only in October 2016 and sought records through counsel who received copies of the May 10, 2016 Resolution on October 10, 2016.
Petitioner filed an Omnibus Motion for Reinvestigation and Deferment of Filing of Information dated November 16, 2016 requesting copies of the complaint-affidavit and supporting documents and a reinvestigation.
The Ombudsman denied the November 25, 2016 motion on the ground that it had exerted diligent efforts to serve petitioner and that the filing of the omnibus motion cured any due process defect.
Petitioner filed a second omnibus motion on January 30, 2017 which the Ombudsman treated as a second motion for reconsideration and denied on February 1, 2017.

Filing of Informations and Trial-Court Proceedings

The Ombudsman filed four Informations with the Sandiganbayan on March 24, 2017 and furnished petitioner copies of the complaint-affidavit and supporting evidence only on March 28, 2017.
Petitioner filed an Extremely Urgent Motion with the Sandiganbayan on April 5, 2017 seeking reinvestigation and suspension of proceedings for denial of a complete preliminary investigation.
The Sandiganbayan in its July 10, 2017 Resolution declared the existence of probable cause, ordered issuance of warrants of arrest (except for the bail-posting principal), and denied petitioner's Motion for Reinvestigation for lack of merit.
Petitioner’s Motion for Partial Reconsideration was denied by the Sandiganbayan in its October 19, 2017 Resolution, leading to the present certiorari petition.

Issues Presented

Whether the Sandiganbayan committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying petitioner’s motion for reinvestigation.
Whether petitioner was deprived of his constitutional right to due process by th