Case Summary (G.R. No. 183161)
Background of the Loan Application
On October 24, 1997, ECOBEL Land, Inc. applied for a medium-term loan from the Government Service Insurance System (GSIS) for the construction of a condominium, but the loan was denied due to insufficient collateral and lack of experience in property development amid the Asian financial crisis. Following this, ECOBEL sought a surety bond from GSIS to guarantee a loan from the Philippine Veterans Bank (PVB).
Processing of the Surety Bond
GSIS initially approved ECOBEL's bond application; however, the collateral offered—identified as a second mortgage—was found inadequate. Mallari, as the Senior Vice-President of GSIS, endorsed the bond application, which the GSIS Investment Committee subsequently approved on March 10, 1998, despite various procedural deficiencies, including the absence of essential documentation required under GSIS guidelines.
Cancellation of the Bond
The bond was ultimately canceled on February 12, 1999, following the discovery that the collateral, a land certificate from Lipa City, was fake. Despite the cancellation, ECOBEL proceeded to secure a loan using the bond, drawing substantial amounts without adherence to the stipulated conditions.
Investigation and Charges
In the aftermath, the Ombudsman initiated investigations based on findings of irregularities in the bond’s issuance, leading to administrative and criminal complaints against Mallari and other GSIS officials, identifying them for grave misconduct.
Rulings of the Ombudsman
The Ombudsman found Mallari administratively liable for simple neglect of duty in 2005, later modifying this to grave misconduct, which resulted in his dismissal from service. Mallari's motions for reconsideration were denied, leading him to appeal to the Court of Appeals.
Decision of the Court of Appeals
On June 6, 2008, the Court of Appeals exonerated Mallari, asserting that the Ombudsman failed to provide substantial evidence to justify the penalty of grave misconduct. The CA found that Mallari's signature on the bond did not lead to any legal obligation because PVB never formally agreed to be an obligee.
Grounds of Petition
The Office of the Ombudsman contested the CA’s ruling, claiming it disregarded established facts and laws. The Ombudsman highlighted the evidence supporting the guilty findings against Mallari concerning adherence to procedural requirements and grave negligence in duty.
Supreme Court's Resolution
The Supreme Court agreed with the Ombudsman, highlighting that substantial evidence demonstrated Mallari's involvement in the irregularities surrounding the bond issuance. The Court reinforced definitions of misconduct and em
...continue readingCase Syllabus (G.R. No. 183161)
Case Citation
- G.R. No. 183161
- December 03, 2014
- 749 Phil. 224
Parties Involved
- Petitioner: Office of the Ombudsman
- Respondent: Amalio A. Mallari
Case Background
- This case involves a petition for review on certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure contesting the June 6, 2008 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 92109, which exonerated Mallari from administrative charges of grave misconduct in Administrative Case No. OMB-ADM-0-00-0547.
Antecedents
- Loan Application and Denial: On October 24, 1997, ECOBEL Land, Inc. applied for a loan from the Government Service Insurance System (GSIS) to construct a condominium. The loan was denied due to insufficient collateral and lack of development track record, especially during the Asian financial crisis.
- Surety Bond Application: ECOBEL then sought a surety bond to secure a loan with Philippine Veterans Bank (PVB). The bond application was approved in principle on December 10, 1997, subject to further evaluation.
- Collateral Issues: The collateral offered was rejected as a second mortgage, prompting a request for additional collateral.
- Mallari's Involvement: Mallari, as Senior Vice-President of GSIS, endorsed the bond application. He later presented a proposal to the Investment Committee (INCOM), which approved the bond on March 10, 1998. The bond was issued on March 11, 1998.
- Irregularities in Issuance: It was later revealed that the collateral submitted was counterfeit, and the bond was cancelled by GSIS on February 12, 1999. Despite this, ECOBEL subsequently secured a loan using the bond.
Investigation and Charges
- Following the bond's issuance and its subsequent m