G.R. No. 167982 - Office of the Ombudsman vs. De Sahagun

Case Summary (G.R. No. 167982)

Petitioner

Office of the Ombudsman is the party seeking review of the Court of Appeals decision that set aside the Ombudsman’s administrative orders.

Respondents

Merceditas de Sahagun, Manuela T. Waquiz and Raidis J. Bassig are the public officials charged administratively before the Ombudsman for their participation in the award and award-related acts concerning contracts with Brand Asia, Ltd.

Key Dates

Material dates include: November 13, 1992 (memorandum recommending Brand Asia); November 17 and 23, 1992 (BAC recommendation, Notice of Award, and contract for video documentary); December 1, 1992 (Notice to Proceed); June 2 and 22, 1993 (award and contract for print collaterals); March 7, 1995 (anonymous complaint to PGAC); November 30, 1995 (Henson dismissed by the Office of the President); August 8, 1996 (anonymous complaint to the Ombudsman against the BAC); September 5, 2000 (FFIB filed criminal and administrative charges with the Ombudsman); March 10 and June 24, 2003 (Ombudsman orders imposing administrative sanctions); April 28, 2005 (Court of Appeals decision setting aside the Ombudsman’s orders); August 13, 2008 (Supreme Court decision reversing the CA).

Applicable Law

Primary constitutional basis: the 1987 Philippine Constitution (Article XI references as cited). Statutory provisions and rules relied upon: Republic Act No. 6770 (The Ombudsman Act of 1989), specifically Section 20(5) (exceptions to investigation) and Section 15 (powers of the Ombudsman, including paragraph 3); Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act), notably Sections 3(a), 3(c), and 3(e); Executive Order No. 301 (regulating procurement/public bidding procedures) and Executive Order No. 302 (as referenced in the charges); the Administrative Code of 1987 (on grounds of administrative misconduct); and Administrative Order No. 17 (amending Rule III of the Ombudsman’s Rules of Procedure, clarifying evaluation and discretion regarding Section 20 grounds).

Factual Background

Respondent Bassig recommended commissioning Brand Asia, Ltd. to produce a video documentary and implement a media plan for Intramuros. The BAC, composed of Sahagun (chair) and Waquiz (member), recommended award to Brand Asia; Intramuros Administrator Henson approved, issuing notices of award and notices to proceed and entering into contracts in November 1992 and June 1993. An anonymous complaint led to Henson’s dismissal by the Office of the President for contracting without public bidding, and a later anonymous complaint prompted investigation of the BAC members and other officials.

Administrative and Criminal Proceedings

The FFIB filed criminal and administrative charges with the Ombudsman on September 5, 2000. A graft investigation criminal docket (OMB-0-00-1411) was dismissed on February 27, 2002 for lack of probable cause. In the administrative docket (OMB-ADM-0-00-0721), the investigating officer initially recommended dismissal of respondents, but Ombudsman Simeon V. Marcelo disapproved and, in an Order dated March 10, 2003, found substantial evidence of administrative liability: respondents were found guilty of grave misconduct and dismissed; Rustia was found guilty of simple misconduct and suspended six months. Following a motion for reconsideration, the Ombudsman’s June 24, 2003 Order reduced respondents’ liability to simple misconduct with six-month suspensions without pay; Rustia’s suspension was reduced to three months.

Court of Appeals Decision

The Court of Appeals, in a decision dated April 28, 2005, set aside the Ombudsman’s March 10 and June 24, 2003 Orders. The CA held that: (1) the complaint was filed more than seven years after the acts (1992–1993), thus beyond the one-year period in Section 20(5) of RA 6770, and therefore respondents could no longer be prosecuted administratively; and (2) the Ombudsman’s function is purely recommendatory and it lacks power to directly penalize or dismiss public officials, relying on a passage from Tapiador v. Office of the Ombudsman asserting that under Section 13, Article XI of the 1987 Constitution the Ombudsman can only “recommend” removal.

Issues Presented to the Supreme Court

Two central issues were presented for resolution: (1) whether Section 20(5) of RA 6770 proscribes administrative investigations where the complaint was filed more than one year after the occurrence of the act or omission complained of; and (2) whether the Ombudsman’s powers are merely recommendatory, lacking authority to directly impose administrative penalties on erring government officials and employees.

Supreme Court’s Analysis — Prescription and Section 20(5) of RA 6770

The Court applied settled principles that administrative offenses do not prescribe and that administrative discipline aims to preserve public service integrity rather than to punish. The Court construed Section 20(5) of RA 6770 in light of the statutory language, precedent, and subsequent rule amendments: the provision employs the word “may,” which is permissive and confers discretion, not an absolute bar. Citing precedents such as Melchor v. Gironella and Filipino v. Macabuhay, the Court held that Section 20(5) grants the Ombudsman discretion whether to investigate complaints filed after one year from the occurrence of the act. Administrative Order No. 17 (amending Rule III, AO No. 7) and the amended Rules of Procedure expressly provide that dismissal under Section 20 grounds is discretionary. Consequently, the filing of the complaint more than one year after the acts in 1992–1993 did not, as a matter of law, preclude the Ombudsman from investig

Case Syllabus (G.R. No. 167982)

Citation and Case Identity

Reported as 584 Phil. 119, Third Division, G.R. No. 167982, August 13, 2008.
Decision authored by Justice Austria‑Martinez.
Parties: Office of the Ombudsman (petitioner) versus respondents Merceditas de Sahagun, Manuela T. Waquiz, and Raidis J. Bassig.
Case mode: Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals Decision dated April 28, 2005 in CA‑G.R. SP No. 78008, which had set aside Ombudsman Orders dated March 10, 2003 and June 24, 2003 in OMB‑ADM‑0‑00‑0721.
Notation: The Court of Appeals is deleted from the title per Section 4, Rule 45 of the Rules of Court.

Material Facts

On November 13, 1992, respondent Raidis J. Bassig, Chief of the Research and Publications Division of the Intramuros Administration, submitted a memorandum to Intramuros Administrator Edda V. Henson recommending the commissioning of Brand Asia, Ltd. to produce a video documentary for television and to implement a media plan and marketing support services for Intramuros.
On November 17, 1992, the Intramuros Administration Bids and Awards Committee (BAC), composed of Merceditas de Sahagun (Chairman), Manuela T. Waquiz and Dominador C. Ferrer, Jr. (members), submitted a recommendation to Administrator Henson to award the contract to Brand Asia, Ltd.; Henson approved and issued a Notice of Award the same day.
On November 23, 1992, Henson and Brand Asia, Ltd. executed a contract of service to produce a video documentary for TV airing; a Notice to Proceed was issued December 1, 1992.
On June 2, 1993, the BAC (with Augusto P. Rustia as an additional member) recommended award to Brand Asia, Ltd. for print collaterals; Henson approved the same day and issued a Notice of Award/Notice to Proceed.
On June 22, 1993, Henson and Brand Asia, Ltd. executed a contract for print collaterals.

Administrative and Criminal Complaints; Prior Sanctions Against Henson

On March 7, 1995, an anonymous complaint was filed with the Presidential Commission Against Graft and Corruption (PGAC) against Henson regarding the Brand Asia contracts.
On November 30, 1995, the Office of the President dismissed Henson from the service upon PGAC recommendation, finding that the contracts were entered into without required public bidding and in violation of Section 3(a) and (e) of R.A. No. 3019 (Anti‑Graft and Corrupt Practices Act).

Complaints Against Respondents; Dockets and Initial Proceedings

On August 8, 1996, an anonymous complaint was filed with the Ombudsman against the BAC in relation to the contracts for which Henson had been dismissed.
On September 5, 2000, the Fact‑Finding Intelligence Bureau (FFIB) filed criminal and administrative charges against respondents, Ferrer, and Rustia for violation of Section 3(a) and (c) of R.A. No. 3019 in relation to Section 1 of Executive Order No. 302, and for alleged grave misconduct, conduct grossly prejudicial to the best interest of the service, and gross violation of Rules and Regulations under the Administrative Code of 1987. The administrative docket was OMB‑ADM‑0‑00‑0721; the criminal docket was OMB‑0‑00‑1411.
OMB‑0‑00‑1411 (criminal docket) was dismissed on February 27, 2002 for lack of probable cause.

Ombudsman Investigation, Recommended Disposition and Final Orders

Graft Investigation Officer II Joselito P. Fangon issued a proposed Decision dated June 19, 2002 recommending dismissal in OMB‑ADM‑0‑00‑0721.
Ombudsman Simeon V. Marcelo disapproved the proposed dismissal and, in an Order dated March 10, 2003, found substantial evidence to hold respondents administratively liable for having awards that failed to undergo required public bidding under Executive Order No. 301 (dated July 26, 1987).
The March 10, 2003 Order found respondents and Ferrer guilty of grave misconduct and dismissed them from service; Rustia was found guilty of simple misconduct and suspended for six months without pay.
Respondents and Rustia filed a Motion for Reconsideration on March 17, 2003.
In an Order dated June 24, 2003, Ombudsman Marcelo partially granted reconsideration: respondents and Ferrer were found guilty only of simple misconduct and suspended for six months without pay; Rustia’s suspension was reduced to three months.

Court of Appeals Proceedings and Ruling

Dissatisfied, respondents filed a Petition for Review with the Court of Appeals challenging the Ombudsman’s Orders dated March 10, 2003 and June 24, 2003.
On April 28, 2005, the Court of Appeals issued a Decision setting aside the Ombudsman’s Orders.
The CA held two principal grounds for setting aside the Ombudsman Orders:
- That respondents could no longer be prosecuted because the complaint was filed more than seven years after the imputed acts (November 1992 and June 1993) and thus beyond the one‑year period under Section 20(5) of R.A. No. 6770 (The Ombudsman Act of 1989).
- That the Ombudsman’s function was purely recommendatory and it lacked the power to directly penalize erring government officials and employees. The CA relied on a statement from this Court in Tapiador v. Office of the Ombudsman characterizing the Ombudsman’s removal authority as recommendatory.

Issues Presented to the Supreme Court

Whether Section 20(5) of R.A. No. 6770 prohibits administrative investigations in cases filed more than one year after the commission of the acts complained of.
Whether the Ombudsman’s powers over erring government officials and employees are merely recommendatory and not punitive — i.e., whether the Ombudsman can directly impose administrative sanctions such as dismissal or suspension.

Supreme Court Holding (Disposition)

The petition is GRANTED.
The Decision dated April 28, 2005 of the Court of Appeals in CA‑G.R. SP No. 78008 is REVERSED and SET ASIDE.
The Order dated June 24, 2003 of the Office of the Ombudsman is REINSTATED.
The Supreme Court ruled for the petitioner Office of the Ombudsman on both issues