G.R. No. 149335 - Montemayor vs. Bundalian

Case Summary (G.R. No. 149335)

Key Dates and Procedural Milestones

Letter-complaint filed (addressed to Filipino Consulate, San Francisco): July 15, 1995.
Grant Deed (transferring property to petitioner and wife): dated May 27, 1993.
PCAGC investigation period: May 29, 1996 to March 13, 1997.
Administrative Order (Office of the President) ordering dismissal adopted PCAGC recommendation: August 24, 1998.
Court of Appeals decision affirming PCAGC/Executive action: April 18, 2001.
Supreme Court disposition: petition for review dismissed (case reviewed under the 1987 Constitution as decision date is after 1990).

Applicable Law and Legal Authorities

1987 Constitution (framework for administrative agencies and the Ombudsman’s role in acting on complaints “in any form and manner”).
Republic Act No. 3019, Section 8 (prohibiting unexplained wealth and providing administrative sanction).
Executive Order No. 151 (creating the Philippine Commission Against Graft and Corruption, PCAGC), which authorized the PCAGC to investigate complaints filed in any form against presidential appointees.
Administrative standards referenced by precedent: rules on administrative due process; burden of proof and substantial evidence; standards for judicial review of administrative findings (e.g., gross abuse of discretion, fraud, or error of law).

Factual Allegations

The complainant alleged that petitioner and his wife purchased a house and lot at 907 North Bel Aire Drive, Burbank, Los Angeles, California, in 1993, with a down payment of US$100,000, and that petitioner could not have afforded the property on his government salary. The complaint included: (a) a Grant Deed (May 27, 1993) transferring the property from sellers David and Judith Tedesco to petitioner and his wife; (b) a Special Power of Attorney executed by petitioner and his wife appointing Estela Fajardo as attorney-in-fact for completion of the purchase; and (c) a media column alleging hidden and unexplained wealth.

Petitioner’s Explanation and Evidence

Petitioner’s principal contention was that the true owner and financier of the Burbank property was his sister-in-law, Estela Fajardo, who purportedly had mortgage restrictions preventing direct purchase and therefore had title placed in petitioner’s and his wife’s names to assist the family’s immigration plans. Petitioner submitted a counter-affidavit, his service record, checks allegedly issued by Fajardo for amortizations, and referenced prior dismissals of related cases by the Ombudsman. Petitioner did not file SALNs for 1992–1994 and did not submit his SALNs, ITRs nor an affidavit from Fajardo to the PCAGC despite repeated requests.

PCAGC Investigation, Findings, and Recommendation

The PCAGC conducted an investigation and found that the property was acquired for US$195,000 (approximately P3.9M at the 1993 exchange rate). It compared this acquisition to petitioner’s declared annual income (P168,648.00 in 1993 from his service record) and concluded the acquisition was manifestly out of proportion to his salary. The PCAGC characterized petitioner’s explanation as largely unsubstantiated and self-serving, noted petitioner’s failure to produce SALNs and ITRs, and observed that counsel engaged in forum shopping. The PCAGC invoked the presumption adverse to a party who willfully suppresses evidence and recommended dismissal from service pursuant to Section 8 of R.A. No. 3019 with forfeiture of benefits.

Administrative Action and Subsequent Appeals

The Office of the President concurred with the PCAGC’s findings and recommendation and issued Administrative Order No. 12 ordering petitioner’s dismissal and forfeiture of benefits. Petitioner’s motion for reconsideration was denied. The Court of Appeals affirmed the administrative action. Petitioner then filed a petition for review with the Supreme Court contesting procedural and substantive aspects of the administrative proceedings and arguing that prior dismissals by the Ombudsman rendered the PCAGC proceedings moot.

Issues Raised Before the Court

Whether petitioner was denied due process in the PCAGC investigation, particularly because the complaint was unverified and the complainant did not appear for confrontation or cross-examination.
Whether petitioner’s guilt (unexplained wealth) was proved by substantial evidence.
Whether dismissal of parallel charges by the Ombudsman rendered the PCAGC administrative case moot or barred by res judicata.

Due Process Analysis

The Court applied administrative due process principles: the essential requirement is the opportunity to be heard and to explain one’s side before judgment. The Court found that petitioner was afforded due process because he participated throughout the proceedings, was represented by counsel, filed a counter-affidavit, submitted documents, attended hearings, sought reconsideration of Administrative Order No. 12, and pursued judicial remedies in the Court of Appeals. Efforts were made by the PCAGC to notify the complainant, but his Philippine address could not be located. The Court also observed that administrative bodies may investigate complaints filed in any form (including unverified complaints) pursuant to EO No. 151 and related constitutional directives applicable to the Ombudsman and analogous investigative practices in administrative settings. Technical rules of evidence and strict judicial due process standards do not fully apply in administrative investigations; the opportunity to be heard suffices.

Burden of Proof and Standard of Review

The Court reiterated established administrative law principles: the burden to establish allegations lies with the complainant and must be met by substantial evidence (relevant evidence that a reasonable mind might accept as adequate). In reviewing administrative findings, courts must respect factual determinations supported by substantial evidence, should not reweigh evidence or assess witness credibility, and may set aside administrative decisions only upon proof of gross abuse of discretion, fraud, or an error of law. These principles limit judicial intervention into the sufficiency-of-evidence determinations made by administrative agencies.

Evaluation of Ownership Evidence and Reasoning

Although petitioner asserted non-ownership, he admitted the Grant Deed and the SPA were in his name and the name of his wife. Petitioner’s evidence failed to substantiate his explanation: there was no affidavit or testimony from Estela Fajardo confirming ownership or funding; the checks offered did not negate ownership because payments may have been made through an attorney-in-fact; and most critically, petitioner produced a loan statement indicating he obtained a loan from World Savings and Loan Association for US$195,000 on June 23, 1993 — a docum

Case Syllabus (G.R. No. 149335)

Case Citation and Procedural Posture

G.R. No. 149335; Decision promulgated July 01, 2003 by the Supreme Court, Third Division; ponente: Puno, J.
Petition for review on certiorari from the Court of Appeals Decision dated April 18, 2001, which affirmed the Office of the President’s Administrative Order No. 12 ordering petitioner’s dismissal for unexplained wealth.
Administrative Order No. 12 issued by the Office of the President on August 24, 1998, ordering dismissal with forfeiture of all government benefits; motion for reconsideration denied; appeal to the Court of Appeals dismissed (Decision dated April 18, 2001).
PCAGC investigation conducted from May 29, 1996 until March 13, 1997; original complaint dated July 15, 1995.
Related Ombudsman cases cited in the record: OMB-0-94-1172, OMB-0-94-1329 and OMB-0-94-1560; Consolidated Investigation Report of the Ombudsman attached by petitioner to his counter-affidavit.
Administrative body involved: Philippine Commission Against Graft and Corruption (PCAGC), created by Executive Order No. 151 (January 11, 1994) and subsequently abolished by Executive Order No. 253 (July 18, 2000).

Factual Background

Complainant: Luis Bundalian addressed an unverified letter-complaint dated July 15, 1995 to the Philippine Consulate General in San Francisco, California, alleging unexplained wealth in violation of Section 8, R.A. No. 3019.
Accusation: Petitioner Edillo C. Montemayor, then OIC-Regional Director, Region III, DPWH, was accused of acquiring unexplained wealth, specifically purchase of a house and lot at 907 North Bel Aire Drive, Burbank, Los Angeles, California.
Purchase detail alleged by complainant: In 1993 petitioner and his wife purchased the property, making a down payment of US$100,000.00; total purchase price later identified by PCAGC as US$195,000.00.
Additional accusation: Complainant alleged petitioner amassed wealth from lahar funds and other public works projects and that petitioner’s in-laws in California had poor credit standing and could not have bought the property for petitioner.
Documents attached to the complainant’s letter: (a) Grant Deed dated May 27, 1993 conveying the subject property to petitioner and his wife; (b) Special Power of Attorney (SPA) executed by petitioner and his wife in California appointing Estela D. Fajardo as attorney-in-fact to complete the purchase; (c) newspaper column excerpt (Manila Bulletin, “Beatwatch” by Lito A. Catapusan) alleging a multimillionaire DPWH employee who traveled abroad, purchased a California house, appointed a woman via SPA to manage it, and had hidden/unexplained wealth in the Philippines and the U.S.

Proceedings Before PCAGC

The Philippine Consulate General in San Francisco indorsed the complaint and attached documents to the PCAGC for investigation.
PCAGC conducted investigation from May 29, 1996 to March 13, 1997; petitioner participated through counsel, filed pleadings and a counter-affidavit, and submitted documents.
PCAGC repeatedly required petitioner to submit his Statement of Assets, Liabilities and Net Worth (SALN), Income Tax Returns (ITRs) and Personal Data Sheet; petitioner ignored these directives and submitted only his Service Record and other documents.
PCAGC attempted to notify the complainant, but complainant’s Philippine address could not be ascertained; complainant did not appear in hearings nor send a representative.

Petitioner’s Defense and Evidence

Petitioner, through counsel, filed a counter-affidavit asserting that the real owner of the Burbank property was his sister-in-law, Estela Fajardo.
Explanation proffered: In 1991, petitioner’s wife inquired about possible emigration to the U.S.; an immigration lawyer advised that owning U.S. real property would be advantageous. Estela Fajardo offered to buy the Burbank property but could not put it in her name because of a mortgage provision prohibiting acquisition of another property; she proposed to put the title in petitioner and his wife’s names to support their emigration plans and to circumvent her mortgage restriction.
Petitioner submitted checks allegedly issued by Estela Fajardo as payments for the property’s amortizations.
Petitioner also attached the Consolidated Investigation Report of the Ombudsman dismissing similar charges for insufficiency of evidence.
Petitioner admitted the Grant Deed over the property was in his name and did not deny the existence and due execution of the Grant Deed and the SPA naming Estela Fajardo as attorney-in-fact.
Petitioner’s Service Record reflected annual income of P168,648.00 in 1993; when PCAGC requested petitioner’s SALNs for 1992–1994, the Deputy Ombudsman for Luzon informed PCAGC that petitioner failed to file SALNs for those years.
Documentary developments: loan statement showing a loan from World Savings and Loan Association for US$195,000.00 dated June 23, 1993; a Quitclaim Deed executed by petitioner and his wife on May 30, 1996 donating the Burbank property to Estela and Rose Fajardo.

PCAGC Findings and Recommendation

PCAGC findings summarized:
- Petitioner purchased the house and lot in Burbank for US$195,000.00 (equivalent to P3.9 million at prevailing 1993 exchange rate); sale evidenced by Grant Deed.
- Petitioner’s 1993 annual income (P168,648.00) was insufficient to afford the Burbank purchase.
- Petitioner’s explanation that Estela Fajardo was the real owner was found unusual, largely unsubstantiated, unbelievable and self-serving.
- Petitioner’s refusal to submit SALNs and ITRs despite repeated directives raised the presumption that willfully suppressed evidence would be adverse if produced.
- PCAGC observed that petitioner’s counsel focused efforts on plead