G.R. No. 182573 - Shu vs. Dee

Case Summary (G.R. No. 182573)

Key Dates and Applicable Law

Relevant procedural milestones include the NBI investigation and Questioned Documents Report, the City Prosecutor’s resolution (June 25, 1999), the Secretary of Justice’s reversal and denial of reconsideration, the CA’s annulment of the Secretary’s resolution (June 19, 2007) and its resolution (April 4, 2008), and ultimate review by the Supreme Court. Because the decision date is after 1990, the 1987 Philippine Constitution governs constitutional principles invoked (notably due process). Controlling substantive and procedural authorities referenced include Article 171 of the Revised Penal Code (elements of falsification), Section 22 of Rule 132, Rules of Court (permitting court comparison of handwriting), and Section 38(1), Chapter 7, Book IV, Revised Administrative Code (confirming Secretary of Justice’s review power). The decision also applies prior jurisprudence cited in the record.

Factual Background

Two deeds of real estate mortgage were presented to Metrobank — one signed by petitioner in his individual capacity and another signed on behalf of 3A Apparel Corporation — which formed the basis for Metrobank’s foreclosure on properties securing the corporation’s loan. Respondents Dee and So appeared as witnesses to the deeds; Miranda and Magpantay notarized the documents; Macillan submitted the deeds to the Office of the Registrar of Deeds for San Juan. Petitioner alleged forgery/falsification of those deeds and complained to the NBI.

NBI Investigation and Questioned Documents Report

The NBI’s Questioned Documents Division produced Report No. 746-1098 which stated that the signatures on the questioned deeds were not the same as the standard sample signatures unilaterally supplied by petitioner to the NBI. The NBI report was procured during its investigation at petitioner’s request and, as characterized in the record, was recommendatory and inconclusive regarding direct culpability of the respondents.

City Prosecutor’s Resolution

The City Prosecutor of Makati dismissed the complaint for lack of probable cause (June 25, 1999). The prosecutor found the NBI report not conclusive, noting that respondents furnished specimen signatures and documents (from Metrobank) showing striking similarities with the signatures on the questioned deeds. The prosecutor further found that petitioner availed of the credit line and benefited from its proceeds, that sufficient consideration supported the mortgages, and that the passport presented at notarization was used by petitioner without informing the notaries it had been cancelled — a finding given presumptive regularity.

Secretary of Justice’s Reversal

The Secretary of Justice reversed the City Prosecutor. The Secretary afforded significant weight to the NBI questioned documents report, holding it entitled to full faith and credit absent proof of irregularity in the experts’ performance. The Secretary also relied on petitioner’s expert evidence, petitioner’s disclaimer that he did not sign any promissory note, and the lack of proof that petitioner received the loan proceeds — concluding these facts tended to show the petitioner did not execute the subject deeds. The Secretary characterized the City Prosecutor’s finding that the available credit line alone supported petitioner’s execution of the deeds as gratuitous and conjectural, and denied the respondents’ motion for reconsideration.

Court of Appeals Decision

The CA annulled the Secretary’s resolution, reasoning principally that respondents were denied due process in both the NBI investigation (not furnished a copy of the complaint; not required to answer or present countervailing evidence at the NBI stage) and in the Secretary of Justice proceedings (not furnished the petition for review or required to answer or comment). The CA also emphasized that those who had personally investigated (the NBI investigating agent and the city prosecutor) were unconvinced and that the recommendation to file charges originated from higher officials who did not personally investigate; the CA gave weight to the City Prosecutor’s factual findings.

Issues Presented to the Supreme Court

The Supreme Court framed the central issues as whether the respondents were deprived of due process in the investigative and administrative-review stages, and whether the Secretary of Justice committed grave abuse of discretion in reversing the City Prosecutor and finding probable cause for falsification.

Supreme Court’s Analysis on Due Process

The Court emphasized that the essence of due process is the opportunity to be heard, not the mere formality of prior notice. It found that any initial procedural defect before the Secretary of Justice was cured by respondents’ actual filing of a motion for reconsideration with the Secretary (i.e., they had the opportunity to be heard). Regarding the NBI stage, the Court reiterated that the NBI’s functions are investigatory and recommendatory; it lacks judicial or quasi-judicial power to determine probable cause. Consequently, procedural shortcomings at the NBI do not, by themselves, amount to a deprivation of due process because its findings remain subject to prosecutorial and Secretary review. The Court further noted that specimen signatures in Metrobank’s possession were submitted by respondents to the City Prosecutor and were available for examination during preliminary investigation, undermining the claim of an absolute procedural exclusion.

Supreme Court’s Analysis on the Legal Standard for Probable Cause and Falsification

The Court reiterated the standard for probable cause — a reasonable ground for belief, based on facts and circumstances, that a crime has been committed and that the accused is probably guilty — requiring only a prima facie showing and not certainty. It restated the elements of falsification of public documents under Article 171: (1) offender is a private individual or public officer who did not take advantage of official position; (2) commission of any act of falsification enumerated in Article 171; and (3) falsification occurred in a public, official, or commercial document. Applying these standards, the Court concluded that the Secretary of Justice’s holistic review of the record — including the NBI expert

Case Syllabus (G.R. No. 182573)

Title, Court and Nature of Proceeding

Supreme Court decision in G.R. No. 182573, promulgated April 23, 2014; reported at 734 Phil. 204, Second Division.
Decision authored by Justice Brion (BRION, J.).
Action: Rule 45 petition for review on certiorari by petitioner Ray Shu seeking reversal of Court of Appeals (CA) decision dated June 19, 2007 and CA resolution dated April 4, 2008.
Relief sought: Reversal of CA rulings that annulled the Secretary of Justice's resolution finding probable cause for falsification against the respondents.
Concurrence noted: Carpio (Chairperson), Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ., concur.

Factual Background

Petitioner Ray Shu is President of 3A Apparel Corporation.
Petitioner filed complaint with the National Bureau of Investigation (NBI) alleging falsification of two deeds of real estate mortgage submitted to Metropolitan Bank and Trust Company (Metrobank).
The two deeds: one purportedly signed by petitioner in his personal capacity and the other purportedly signed by him on behalf of 3A Apparel Corporation.
Respondents identified as Metrobank employees: Jaime T. Dee and Edwin So signed the two deeds as witnesses; Ramon S. Miranda and Enriqueto I. Magpantay notarized the respective deeds; Larry Macillan’s signature appears on the deeds in his capacity submitting them to the Office of the Registrar of Deeds for San Juan, Metro Manila.
Based on the questioned deeds, Metrobank foreclosed two properties securing 3A Apparel Corporation’s loan.

NBI Investigation and Questioned Documents Report

NBI conducted investigation and its Questioned Documents Division issued Questioned Documents Report No. 746-1098.
The report stated that the signatures of the petitioner on the questioned deeds are not the same as the standard sample signatures the petitioner submitted to the NBI.
The questioned documents report compared solely the sample signatures unilaterally submitted by the petitioner with the signatures on the two deeds.
At least one examination of signatures of the petitioner appearing in several documents in Metrobank’s possession revealed that petitioner’s signatures in the questioned deeds are genuine (as noted in the source summary).

City Prosecutor Proceeding and Ruling

NBI filed complaint with City Prosecutor of Makati charging respondents with forgery and falsification of public documents, supported by the NBI questioned documents report.
In a resolution dated June 25, 1999, the city prosecutor found no probable cause and dismissed the complaint for lack of merit.
City prosecutor’s reasoning:
- The questioned documents report is not conclusive; it only shows that the sample signatures submitted solely by the petitioner differ from signatures on the questioned deeds.
- Evidence not considered by NBI, presented to city prosecutor and not disputed by petitioner, proved that the same person executed the questioned deeds.
- Similarities in specimen signatures submitted by respondents and signatures on the deeds were described as so striking that even a layman could see they were written by one and the same person.
- Documents showed petitioner availed of the credit line and benefited from its proceeds; sufficient consideration supported the execution of the two deeds of mortgage.
- City prosecutor found that the petitioner used his passport when executing the deeds before notaries Miranda and Magpantay, without informing them that the passport had been cancelled, thereby presuming regularity in notaries’ performance.
Petitioner appealed the city prosecutor’s resolution to the Secretary of Justice.

Secretary of Justice Ruling

Secretary of Justice reversed the city prosecutor’s dismissal and found probable cause for falsification against respondents.
Secretary’s rationale:
- The city prosecutor failed to consider the evidentiary value of the NBI questioned documents experts’ findings.
- The NBI finding is entitled to full faith and credit absent proof of irregularity in experts’ duties.
- The expert evidence, petitioner’s disclaimer that he did not sign any promissory note, and the lack of proof of receipt of loan proceeds tended to prove petitioner did not execute the deeds.
- The Secretary considered the complainant’s evidence more credible than respondents’ supporting documents.
- The Secretary characterized the city prosecutor’s finding that petitioner’s credit line with Metrobank constituted sufficient consideration as gratuitous and conjectural.
The Secretary denied respondents’ motion for reconsideration.

Court of Appeals Ruling

Respondents filed a petition for certiorari with the CA alleging grave abuse of discretion by the Secretary of Justice.
CA granted respondents’ petition, annulled the Secretary’s resolution, and found respondents were denied due process before the NBI and the Secretary of Justice.
CA’s factual observations and conclusions:
- During NBI proceedings, respondents were not furnished a copy of the complaint, not required to file an answer, nor required to present countervailing evidence; all evidence at NBI level was provided by petitioner.
- During proceedings before Secretary of Justice, respondents were not furnished with the petition for review filed by petitioner and were not required to file an answer nor to comment.
- Investigating NBI agent and city prosecutor, who were directly involved and examined evidence, were convinced evidence was insufficient for filing charges; the recommendation to file came from NBI chiefs and the Secretary who did not personally investigate.
- CA affirmed city prosecutor’s findings as he had examined documents, including respondents’ evidence that NBI did not consider.
CA denied petitioner’s motion for reconsideration; petitioner filed timely certiorari with the Supreme Court.

Issues Presented to the Supreme Court

Whether the CA erred in annulling the Secretary of Justice’s resolution that found probable cause for falsification and in concluding that respondents were denied due process.
Whether the Secretary of Justice committed grave abuse of discretion in reversing the city prosecutor’s dismissal.
Whether the NBI questioned documents report and expert findings were properly given weig