June 27, 2003 (Guiterrez resolution)- Usec Guiterrez REVERSED

PREJUDICIAL QUESTION the 2 Rances resolutions and ordered the Office of the Chief Prosecutor
DAMAGES DESPITE ACQUITTAL IN CRIM CASES to move for withdrawal of the informations filed at the MTC, Usec
Reyes v. Pearlbank Securities, Inc stated that:
Topic: Probable Cause in Preliminary Investigations; Definition; a. the confirmation advices were only renewals which formed
Determination is an Executive Function part of the earlier loans of Pearlbank
Pearlbank (PEARLBANK) Securities Inc. is engaged in securities b. Ong, Lucena, Briones, Tamundong & Espirutu are
business while Westmont Investment Corp (WINCORP) is operating performed it in good faith
as an investment houses. And one of the services offered by c. Confirmation Advices are not commercial documents
WINCORP to its clients is the arranging and brokering of loans. d. SEC cases is a prejudicial question which involves issues
Petitioner Reyes in here was formally the VP for Operations and that are intimately related to the issues in the present case .
Administration of WINCORP
PEARLBANK alleged that in March 2000, it received letters from Due to that reversal, PEARLBANK filed an MR with a motion praying
persons who invested in WINCORP demanding payment of their that Usec Guiterrez should inhibit herself from the proceedings
matured investment. These investors stated that WINCORP told them Dec 4, 2003 (Dumantong resolution) - DOJ Sec Datumanong issued
the PEARLBANK was the borrower of their investment and that a resolution granting the MR, Dumantong reversed the Guiterrez
WINCORP was unable to pay its investors because PEARLBANK was resolution and reinstated the Rances resolution 1.
unable to pay the loans which were extended by WINCORP. Dumantong stated that:
As proof of the investors’ claim, they presented: a. there is a finding probable cause to charge petitioner and
(a) Confirmation Advices - the period covered was from Jan 25, respondents except for Espirutu because considering the
2000 - April 3 2000 bearing the words “ Borrower: nature of the certifications in question and his unties, he was
PEARLBANK” entitle to rely on the certifications and representations of
(b) SPA and Certifications signed and issued to these investors those in the Treasury group
by WINCORP b. no prejudicial question - the existence of outstanding
obligation of PEARLBANK under its credit line with
PEARLBANK alleged that WINCORP’s act of stating and making it WINCORP was irrelevant & immaterial to the falsifications
appear in several Confirmation Advices, SPA and Certifications that cases and should not be determinative of the criminal cases
PEARLBANK was the borrower of the funds from the investors of c. Admissions of PEARLBANK that the loans were offset
WINCORP, constituted FALSIFICATION of COMMERCIAL and
PRIVATE DOCUMENTS and PEARLBANK also alleged that these Jan 8, 2004- Reyes filed MR of the Dumantong resolution while the
accounts were settled by an offsetting agreement and denied obtaining others filed a separate MR, both of which were denied by Dumantong
loans from Dec 11 1998 - Jan 18 1999.
Pearlbank served a final demand letter from WINCORP asking for full Petitioner appealed to CA via Rule 65 to nullify the Dumantong
accounting of the identities and investment of the investors and alleged resolution still based on the same arguments. While the appeal to the
loan obligations of PEARLBANK with supporting documents CA was pending, petitioner filed an Motion to suspend further
including the purported Confirmation Advices but WINCORP still proceedings before the MTC NCR but CA found that DOJ did not
failed to act on such demand. commit any grave abuse of discretion in finding that there was
probable cause and petitioner’s liability for the crime of falsification
PEARLBANK filed 2 complaints with SEC for full accounting of the could be best treated out at the trial on the merits of the case
investments of WINCORP and PEARLBANK’s alleged loan
obligations to WINCORP Petitioner appeal to SC alleging that there is no probable cause to
Also, Tan (treasurer of Pearlbank) filed a complaint on behalf of charge him for falsification; that the proceedings in the criminal cases
PERALBANK for FALSIFICATION by PRIVATE INDIVIDUALS should be suspending pending resolution of the SEC cases which were
of commercial and private documents before the DOJ transferred to RTC Makati
WINCORP answered to the case filed before the DOJ denying that
there was falsification and stated that WINCORP approved a credit line ISSUE:
in favour of PEARLBANK to which it was renewed and the amount (a) whether or not there is probable cause to file an
was increased from 250M to 850M to which WINCORP issued information for falsification of private and commercial
promissory notes to those additional loans but those PN were never documents against petitioner; and
returned. It also stated that the Confirmation Advices, SPA were (b) whether the two cases before the SEC are prejudicial
prepared in good faith. questions which have to be resolved before the criminal
Jan 2, 2001 - Ong, Lucena, Briones, Espiruted filed a Motion to Admit cases may proceed.
Attached Memorandum before the DOJ, stating that the criminal
complaint against them should be dismissed for LACK of HELD:
PROBABLE CAUSE or SUSPENDED due to the existence of Probable cause are those facts which are sufficient to engender a well-
prejudicial question in the SEC cases founded belief that a crime has been committed and that respondent
June 18, 2001 (Rances resolution 1) - Prosecutor Rances of DOJ is probably guilty thereof—a finding of probable cause needs only
Task Force on Financial fraud (found probable cause) issued a to rest on evidence showing that more likely than not a crime has
resolution recommending the filing of Informations for falsification of been committed by the suspects
commercial and private documents by private individuals against The term does not mean “actual and positive cause” nor does it import
petitioner Reyes, Ong, Briones, Lucena, Espiritu, and Tamundong. absolute certainty. It is merely based on opinion and reasonable
Aug. 21, 2001 - before the expiration for the period of filing an MR, belief. It need not be based on clear and convincing evidence of
informations for falsifications were filed against petitioners before the guilt, not on evidence establishing guilt beyond reasonable doubt, and
MTC relying on the Rances resolution; another MR was filed raising definitely not on evidence establishing absolute certainty of guilt. In
the same issue of lack of probable cause and existence of prejudicial determining probable cause, the average man weighs facts and
question. circumstances without resorting to the calibrations of the rules of
Dec 13, 2001 (Rances resolution 2) - Prosecutor Rances denied the 2 evidence of which he has no technical knowledge—he relies on
MRs; from such denial, they appealed (Petition for review) to the common sense.
Office of DOJ Secretary (Usec Guiterrez)
These findings of probable cause fall within the jurisdiction of the A prejudicial question is defined as one which arises in a case the
prosecutor or fiscal in the exercise of executive power, which the resolution of which is a logical antecedent of the issue involved therein,
courts do not interfere (non-interference) with unless there is and the cognizance of which pertains to another tribunal; The
grave abuse of discretion. The determination of its existence lies prejudicial question must be determinative of the case before the court,
within the discretion of the prosecuting officers after conducting a but the jurisdiction to try and resolve the question must be lodged in
preliminary investigation upon complaint of an offended party. another court or tribunal; The rationale behind the principle of
Thus, the decision whether to dismiss a complaint or not is dependent prejudicial question is to avoid two conflicting decisions.
upon the sound discretion of the prosecuting fiscal.22 He may dismiss - In this case, although arising from same set of facts, issues in the crim
the complaint forthwith, if he finds the charge insufficient in form or and civ cases are different
substance or without any ground. Or he may proceed with the
investigation if the complaint in his view is sufficient and in proper FULLTEXT
form.
THIRD DIVISION
HENCE, the determination of probable cause for the filing of
information in court is an executive function, one that properly G . R . N o. 1 7 1 4 3 5
pertains at the first instance to the public prosecutor and,
ultimately, to the Secretary of Justice, who may direct the filing of Present:
the corresponding information or move for the dismissal of the case—
and, unless made with grave abuse of discretion, findings of the YNARES-SANTIAGO, J.,
Secretary of Justice are not subject to review. Such rule is consistent Chairperson,
with the general rule that criminal prosecutions may not be restrained AUSTRIA-MARTINEZ,
or stayed by injunction, preliminary or final. CHICO-NAZARIO,
In this case, petitioner was not able to convince this Court to deviate NACHURA, and
from the general rule of non- interference. The Court of Appeals did REYES, JJ.
not err in dismissing petitioner’s application for a writ of certiorari,
absent grave abuse of discretion on the part of the DOJ Secretary in Promulgated:
finding probable cause against him for the falsification of commercial
and private documents. July 30, 2008

The Department of Justice (DOJ) Secretary is not precluded from x-------------------------------------------------x

making inferences of fact and conclusions of law which may be
different from, contrary to, or even entirely abandoning, the findings
made by his Undersecretary (Gutierrez) although they were both faced DECISION
with the same evidence and arguments; The purpose of a motion for
reconsideration is precisely to request the court or quasi-judicial body
to take a second look at its earlier judgment and correct any errors it CHICO-NAZARIO, J.:
may have committed therein

- 1st: Dumantong issued the resolution due to the MR filed by

PEARLBANK and such resolution was the result on his In this Petition for Review on Certiorari under Rule 45 of the Revised
acting on the MR. And the purpose of the MR is to request
Rules of Court, petitioner Anthony T. Reyes prays for the reversal of
the court / quasi-judicial body to take a 2nd look at its earlier
judgement and correct any errors the 26 October 2005 Decision[1] and 7 February 2006 Resolution[2] of

- 2nd: Dumantong resolution cannot be said that it was the Court of Appeals in Anthony T. Reyes v. Secretary of the
without bases. Because reviewing Prosecutors Rances
finding probable cause to believe that they were guilty of Department of Justice and Pearlbank Securities, Inc., docketed as CA-
falsification based on essentially the SAME evidence &
G.R. SP No. 90006, ruling that the Secretary of the Department of
arguments
Justice (DOJ) did not commit grave abuse of discretion in
- 3rd: Dumantong exhaustively presented in his resolution the
legal and factual reasons for his reversal of Guiterrez finding probable cause to charge petitioner Reyes with the crime of
resolution which negated the negated the allegation of
petitioner that Dumantong committed GAD falsification of commercial and private documents.

While the right to equal protection of the law requires that litigants are
treated in an equal manner by giving them the same rights under similar Pearlbank Securities, Inc. (PEARLBANK) is a domestic
circumstances, it may not be perversely used to justify desistance by
the authorities from prosecution of a criminal case, just because not all corporation engaged in the securities business.
of those who are probably guilty thereof were charged. Citing the case
of Webb v De Leon: “[T]he prosecution of crimes appertains to the
executive department of government whose principal power and Westmont Investment Corporation (WINCORP) is a
responsibility is to see that our laws are faithfully executed. A
necessary component of this power to execute our laws is the right to domestic corporation operating as an investment house. Among the
prosecute their violators. The right to prosecute vests the prosecutor
with a wide range of discretion—the discretion of whether, what and services rendered by WINCORP to its clients in the ordinary course of
whom to charge, the exercise of which depends on a smorgasboard of
factors which are best appreciated by prosecutors x x x.” its business as an investment house is the arranging and brokering of
loans. Petitioner Anthony T. Reyes was formerly the Vice President PEARLBANK covering such loans were allegedly all stamped

for Operations and Administration of WINCORP.[3] cancelled. It denied obtaining loans from WINCORP or its

lenders/investors from the period 11 December 1998 to 18 January

PEARLBANK alleged that in March 2000, it received 1999 due to the fact that there was no valid and effective grant of a

credit facility in favor of PEARLBANK during the said period.

various letters from persons who invested in WINCORP demanding

payment of their matured investments, which WINCORP failed to pay,

On 3 April 2000, PEARLBANK served on WINCORP a
threatening legal action. According to these investors, WINCORP
final demand letter asking for a full and accurate accounting of the
informed them that PEARLBANK was the borrower of their identities and investments of the lenders/investors and the alleged loan

investments. WINCORP alleged that it was unable to repay its obligations of PEARLBANK, with the supporting records and

investors because of the failure of its fund borrowers, one of which was documents including the purported Confirmation Advices.

PEARLBANK, to pay the loans extended to them by WINCORP. As

WINCORP, however, still did not heed the demands of
proof of their claims, the investors presented Confirmation
PEARLBANK and failed to produce the loan agreement documents it
Advices,[4] Special Powers of Attorney and Certifications signed and
allegedly executed with the latter.
issued to them by WINCORP.

On 7 April 2000, PEARLBANK filed two complaints with

The period covered by these Confirmation Advices was from the Securities and Exchange Commission (SEC) against Ong and

several John Does for full and accurate accounting of the investments
25 January 2000 to 3 April 2000, with said Confirmation Advices
of WINCORP and of PEARLBANKs alleged loan obligations to
bearing the words Borrower: PEARLBANK Securities, Inc.
WINCORP and/or its investors. The cases were docketed as SEC

Cases No. 04-00-6590 and 04-00-6591.

PEARLBANK denied having any outstanding loan

obligation with WINCORP or its investors.

On 6 September 2000, Juanita U. Tan, Treasurer of

PEARLBANK, filed a complaint on behalf of

In reaction to the accusations against it, PEARLBANK
PEARLBANK for falsification by private individuals of
immediately wrote Antonio T. Ong, WINCORP President, demanding
commercial and private documentsbefore the DOJ. The case was
an explanation as to how and why PEARLBANK was made to appear
docketed as I.S. No. 2000-1491. Named respondents in the complaint
to be involved in its transactions. According to PEARLBANK, it did
were the officers and directors of WINCORP, to wit: petitioner herein
not get any reply from WINCORP.
Anthony T. Reyes, Antonio T. Ong, Gilda C. Lucena,[5] Nemesio R.

Briones, Loida C. Tamundong,[6] Eric R.G. Espiritu,

PEARLBANK alleged that WINCORPs acts of stating and
and John or Jane Does.
making it appear in several Confirmation Advices, Special Powers of

Attorney and Certifications that PEARLBANK was the borrower of

In answer to the complaint of PEARLBANK in I.S. No.
funds from the lenders/investors of WINCORP constituted
2000-1491, WINCORP, through Ong, explained that among the
falsification of commercial and private documents.
services offered by WINCORP was the arranging and/or brokering of
loans for clients. Upon application of PEARLBANK, WINCORP
While PEARLBANK admitted obtaining loans from
agreed to arrange and/or broker loans on behalf of the former. Thus, in
WINCORP, it alleged that these accounts were settled by way of an
a meeting of its Board of Directors on 28 November 1995, WINCORP
offsetting arrangement. Thus, the promissory notes executed by
approved a credit line in favor of PEARLBANK in the amount On 18 June 2001, Prosecutor Estherbella N. Rances of the

of P250M. DOJ Task Force on Financial Fraud issued a Review Resolution

recommending the filing of Informations for falsification of

According to Ong, pursuant to this Credit Line Agreement, commercial and private documents by private individuals against

PEARLBANK was able to obtain, through the brokerage of petitioner Reyes, Ong, Briones, Lucena, Espiritu, and Tamundong.

WINCORP, loans from several lenders/investors in the total amount

of P324,050,474.24 for which PEARLBANK issued promissory notes On 21 August 2001, prior to the expiry of the period to file a

from 1995 to 1996. The Credit Line Agreement was renewed for motion for reconsideration, Informations for Falsification of

another year or up to 25 October 1996. PEARLBANK made payments, Commercial and Private Documents under paragraphs 1 and 2, Article

leaving a balance of around P300M on the loan. On 28 April 1997, the 172,[7] in relation to paragraph 2 of Article 171[8] of the Revised Penal

Credit Line Agreement was amended and the credit line was increased Code, were filed against petitioner, Ong, Briones, Lucena, Espiritu,

from P250M to P850M. On 11 December 1998, PEARLBANK and Tamundong before Branch 2 of the Metropolitan Trial Court

arranged with WINCORP to transact additional loans from lenders in (MTC) of Manila apparently relying on the Rances resolution dated 18

the amount of P200M, the proceeds of which were deposited in the June 2001. The cases were docketed as Criminal Cases No. 365255-

account of Farmix Fertilizers, Inc., a corporation wholly owned and/or 88.

controlled by Manuel Tankiansee and Juanita Uy Tan. Following the

previous procedure, WINCORP prepared the promissory notes On 28 August 2001, petitioner filed a motion for

corresponding to the additional loans, totaling P200M, and forwarded reconsideration of the 18 June 2001 Resolution of Prosecutor

said documents to PEARLBANK. WINCORP maintains, however, Rances. He raised the issues earlier brought up by Ong, Briones,

that the promissory notes were never returned. WINCORP issued the Lucena, Espiritu and Tamundong, contending there was lack of

standard Confirmation Advices to the lenders of PEARLBANK for probable cause and that there existed a prejudicial question. The other

said loans. Although the promissory notes were stamped terminated or respondents in the criminal complaint filed a separate joint motion for

cancelled, the renewal promissory notes were not sent back/returned reconsideration on 4 September 2001.[9]

by PEARLBANK to WINCORP.

Meanwhile, on 13 November 2001, petitioner filed an

From the foregoing, WINCORP asserted that PEARLBANK was Urgent Motion to Suspend Proceedings and to Defer Arraignment of

accurately designated as the borrower from the lenders/investors. The Accused before the MTC of Manila where the criminal cases were

Confirmation Advices, Special Powers of Attorney, and Certifications pending, leading to the cancellation of the arraignment scheduled for

it issued to the lenders/investors, indicating PEARLBANK as the 21 November 2001.

borrower, were prepared in good faith and in accordance with the

records of WINCORP. Hence, the officers and directors named as Citing no cogent reason to modify or reverse the assailed 18

respondents in I.S. No. 2000-1491 who prepared, signed, and reviewed June 2001 Resolution, Prosecutor Rances denied the two motions for

such documents denied having falsified them. reconsideration filed by petitioner and his co-respondents in a

Resolution issued on 13 December 2001.

On 2 January 2001, Ong, Lucena, Briones, Tamundong and

Espiritu filed a Motion to Admit Attached Memorandum before the Ong, Briones, Lucena, Espiritu, and
DOJ, asserting that the criminal complaint against them should be Tamundong appealed the 13 December 2001 Resolution[10] to the

dismissed for lack of probable cause or suspended due to the existence Office of the DOJ Secretary while petitioner filed a Petition for Review

of a prejudicial question involving the SEC cases. with the same office.[11]
 Prosecutors Review Resolution dated 18 June
On 27 June 2003, Undersecretary (Usec.) Ma. Merceditas N. 2001 is hereby REINSTATED, with the
MODIFICATION that respondent ERIC R.G.
Gutierrez (representing the Office of the DOJ Secretary) resolved the
ESPIRITU should be excluded. The Chief State
appeal and Petition for Review in a joint Resolution reversing the Prosecutor is directed to cause the amendment of
the informations filed against said respondent
Resolutions dated 18 June 2001 and 13 December 2001 of Prosecutor Espiritu by excluding him therefrom, and to report
the action taken hereon within ten (10) days from
Rances. In ruling that the complaint in I.S. No. 2000-1491 should be receipt hereof.[15]
dismissed, Usec. Gutierrez took into consideration the following:

(1) That the confirmation advices were mere In said Resolution, DOJ Secretary Datumanong explained that while
renewals forming part of the earlier loans of Eric R. G. Espiritu was one of the signatories of the Certifications,
PEARLBANK under an existing credit line
agreement; considering the nature of the certifications in question and his duties

(2) That [petitioner, Ong, Lucena, Briones, and functions, it would appear that he was entitled to rely on the
Tamundong, and Espiritu] are mere
Certifications and representations of those in the Treasury group. The
employees of WINCORP performing
perfunctory functions in good faith; DOJ Secretary ratiocinated that there was no prejudicial question
(3) That Confirmation Advices are not involved, since the existence of an outstanding obligation on the part
commercial documents;
of PEARLBANK under its Credit Line with WINCORP was irrelevant
(4) That SEC Case No. 0400-6590, is a
and immaterial to the falsification cases, and shall not be determinative
prejudicial question, involving issues which
are intimately related to the issues in the of the outcome of said falsification cases. Explaining further, he said
present case.
that it was clear from the admissions of respondents therein that the

loans reflected in the Confirmation Advices, which appeared to be new

Thus, the Office of the DOJ Secretary ordered the Office of the Chief
loans, were matched against the alleged outstanding loans of
State Prosecutor to move for the withdrawal of the Informations from
complainant.
the MTC.[12]

On 8 January 2004, petitioner filed a motion for reconsideration of the

PEARLBANK filed a motion for reconsideration with the Office of the
4 December 2003 Resolution of the DOJ Secretary.[16]
DOJ Secretary for the setting aside of its 27 June 2003 Resolution, with
On the other hand, his co-respondents filed a separate motion for
a motion[13] praying that DOJ Usec. Gutierrez inhibit herself from the
reconsideration on 16 January 2004. [17]
proceedings.

On 1 March 2005, DOJ Secretary Datumanong denied both motions

On 4 December 2003, DOJ Secretary Simeon Datumanong
for reconsideration.
issued a Resolution granting the motion for reconsideration of

PEARLBANK.[14]
Petitioner sought recourse with the Court of Appeals via a Petition

for Certiorari under Rule 65 of the 1997 Revised Rules of

In effect, DOJ Secretary Datumanong reversed the 27 June 2003
Court, docketed as CA-G.R. No. 90006. Petitioner sought the
Resolution of Usec. Gutierrez and reinstated the 18 June
nullification of the 4 December 2003 DOJ Resolution based on the
2001 Resolution of Prosecutor Rances finding probable cause to
following arguments:
charge petitioner and other respondents in I.S. No. 2000-149, except

for Eric R. G. Espiritu, for the crime of falsification of commercial and (a) petitioner did not make any untruthful
statements in the Confirmation Advices
private documents: since [PEARLBANK] allegedly has an
outstanding obligation with Westmont
Investment Corporation;
WHEREFORE, the resolution dated 27 June 2003
(Resolution No. 283, Series of 2003) is hereby
REVERSED and SET ASIDE. The Chief State
 (b) WINCORPs Confirmation Advices II.
subject of the falsification case were not
commercial documents; and THE CONSTITUTION EXPRESSLY
PROVIDES THAT NO PERSON SHALL BE
(c) a prejudicial question exists warranting DENIED THE EQUAL PROTECTION OF THE
the suspension of proceedings in the LAWS. HOWEVER, THE COURT OF
falsification case. APPEALS COUNTENANCED THE DOJS
VIOLATION OF SUCH CONSTITUTIONAL
RIGHT OF PETITIONER WHEN THE DOJ
DISMISSED THE CHARGES AGAINST MR.
During the pendency of the petition for certiorari with the ERIC R. G. ESPIRITU AND YET FOUND
PROBABLE CAUSE AGAINST HEREIN
Court of Appeals, petitioner filed an Urgent Ex Parte Motion to
PETITIONER EVEN AS BOTH ARE
Suspend Further Proceedings before the same MTC Court on 11 July SIMILARLY SITUATED.

2005, contending that Criminal Case Nos. 365255 to 88 should be

suspended, since he had filed a pending Petition for Certiorari under

III.
Rule 65 of the Rules of Court with the Court of Appeals to annul the 4

December 2003 and 1 March 2005 Resolution of the DOJ. THE COURT OF APPEALS DEPARTED FROM
THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS WHEN IT UPHELD
THE DOJ RESOLUTIONS WHICH DID NOT
ONLY FAIL TO CONSIDER THE EVIDENCE
ON RECORD. LIKEWISE, THE COURT OF
APPEALS SANCTIONED THESE
On 26 October 2005, the Court of Appeals promulgated its RESOLUTIONS WHICH WERE NOT IN
ACCORD WITH EXISTING LAW AND
Decision dismissing CA-G.R. No. 90006. The appellate court found SUPREME COURT DECISIONS ON
PREJUDICIAL QUESTIONS.
that the DOJ Secretary did not commit grave abuse of discretion in

finding that there was probable cause for holding that petitioner was IV.

guilty of the offense charged. It noted that the Informations were THE COURT OF APPEALS COMMITTED
SERIOUS LEGAL ERROR AND DEPARTED
already filed against petitioner before Branch 2 of the MTC of the FROM THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS
National Capital Region (NCR), and petitioners liability for the crime WHEN IT UPHELD THE DOJS
of falsification of commercial and private documents could best be CLASSIFICATION OF THE CONFIRMATION
ADVICES SUBJECT OF THE CASE A QUO AS
threshed out at the trial on the merits of the case. COMMERCIAL DOCUMENTS, A
CLASSIFICATION WHICH IS CONTRARY TO
ITS OWN EARLIER DETERMINATION AND
THAT OF THE DOJ.
On 7 February 2006, the Court of Appeals issued a Resolution denying
petitioners motion for reconsideration.
Essentially, petitioner avers that his rights to due process and

Petitioner thus filed this Petition for Review on Certiorari under Rule equal protection of the law were jeopardized when DOJ Secretary

45 of the Revised Rules of Court, making the following assignment of Datumanong issued his 4 December 2004 Resolution affirming the

errors: finding of probable cause against him and the other respondents in I.S.

No. 2000-1491, and reversing the earlier 27 June 2003 Resolution of

I.
his Office, which ordered the dismissal of the complaint of
THE COURT OF APPEALS SANCTIONED A PEARLBANK, there being no new evidence presented between the
DEPARTURE FROM ACCEPTED AND
USUAL COURSE OF JUDICIAL two Resolutions. He further accuses the DOJ Secretary of violating his
PROCEEDINGS WHEN IT ALLOWED THE
ARBITRARY AND CAPRICIOUS EXERCISE right to the equal protection of the law by dismissing the charges
BY THE DOJ OF ITS POWER TO DETERMINE against Espiritu, another respondent in I.S. No. 2000-1491, but not
PROBABLE CAUSE. THE DOJ COMMITTED
GRAVE ABUSE OF DISCRETION IN ISSUING those against him. He insists that the charges against him must be
ITS 4 DECEMBER 2003 AND 1 MARCH
2005 RESOLUTIONS. dismissed, arguing that he and Espiritu are similarly situated.
 ground to engender a well-founded belief that a crime has been

Petitioner prays that the Court nullify and set aside the Court committed, and that the accused is probably guilty thereof and should

of Appeals Decision dated 26 October 2005 and Resolution dated 7 be held for trial. It does not require an inquiry as to whether there is

February 2006 in CA-G.R. No. 90006, there being no probable cause sufficient evidence to secure a conviction.

to charge him with the crimes of falsification of commercial and

private documents. He further alleges that the proceedings in Criminal These findings of probable cause fall within the jurisdiction of the

Cases No. 365255-88 should be suspended pending resolution of the prosecutor or fiscal in the exercise of executive power, which the

two SEC Cases which have now been transferred to the jurisdiction of, courts do not interfere with unless there is grave abuse of discretion.

and are now pending before, the Regional Trial Courts of Makati on The determination of its existence lies within the discretion of the

the ground that the these cases constitute a prejudicial question. prosecuting officers after conducting a preliminary investigation upon

complaint of an offended party. Thus, the decision whether to dismiss

This Court finds the present petition to be without merit and a complaint or not is dependent upon the sound discretion of the

accordingly denies the same. prosecuting fiscal.[22] He may dismiss the complaint forthwith, if he

finds the charge insufficient in form or substance or without any

The issues presented by petitioner may be narrowed down to two: ground. Or he may proceed with the investigation if the complaint in
(a) whether or not there is probable cause to file an
his view is sufficient and in proper form. To emphasize, the
information for falsification of private and
commercial documents against petitioner; and determination of probable cause for the filing of information in court

(b) whether the two cases before the SEC are is an executive function, one that properly pertains at the first instance
prejudicial questions which have to be resolved
before the criminal cases may proceed. to the public prosecutor and, ultimately, to the Secretary of Justice,

who may direct the filing of the corresponding information or move

for the dismissal of the case.[23] Ultimately, whether or not a complaint

Probable cause, for the purpose of filing a criminal information, has
will be dismissed is dependent on the sound discretion of the Secretary
been defined as such facts as are sufficient to engender a well-founded
of Justice.[24] And unless made with grave abuse of discretion, findings
belief that a crime has been committed and that respondent is probably
of the Secretary of Justice are not subject to review.[25]
guilty thereof.[18] The term does not mean actual and positive cause nor

does it import absolute certainty. It is merely based on opinion and

For this reason, the Court considers it sound judicial policy to refrain
reasonable belief. Probable cause does not require an inquiry into
from interfering in the conduct of preliminary investigations and to
whether there is sufficient evidence to procure a conviction. It is
leave the Department of Justice ample latitude of discretion in the
enough that it is believed that the act or omission complained of
determination of what constitutes sufficient evidence to establish
constitutes the offense charged. [19]
probable cause for the prosecution of supposed offenders. Consistent

with this policy, courts do not reverse the Secretary of Justices findings
A finding of probable cause needs only to rest on evidence showing
and conclusions on the matter of probable cause except in clear cases
that more likely than not a crime has been committed by the
of grave abuse of discretion. [26]
suspects. It need not be based on clear and convincing evidence of

guilt, not on evidence establishing guilt beyond reasonable doubt, and

The restraint exercised by this Court in interfering with the
definitely not on evidence establishing absolute certainty of guilt.[20] In
determination of probable cause by the prosecutor, unless there is
determining probable cause, the average man weighs facts and
grave abuse of discretion, is only consistent with the general rule that
circumstances without resorting to the calibrations of the rules of
criminal prosecutions may not be restrained or stayed by injunction,
evidence of which he has no technical knowledge. He relies on
preliminary or final. There are, however, exceptions to this
common sense.[21] What is determined is whether there is sufficient
rule, [27] none of which are obtaining in the case now before us.
 the motion for reconsideration of PEARLBANK. The purpose of a

In the present case, petitioner was not able to convince this Court to motion for reconsideration is precisely to request the court or quasi-

deviate from the general rule of non-interference. The Court of judicial body to take a second look at its earlier judgment and correct

Appeals did not err in dismissing petitioners application for a writ any errors it may have committed therein.

of certiorari, absent grave abuse of discretion on the part of the DOJ

Secretary in finding probable cause against him for the falsification of Second, it cannot be said that DOJ Secretary Datumanongs

commercial and private documents. final ruling is entirely without basis when, in fact, Reviewing

In D.M. Consunji, Inc. v. Esguerra,[28] we defined grave Prosecutor Rances had earlier made a similar finding on 18 June 2001

abuse of discretion in this wise: that there was probable cause to believe that petitioner and the other

respondents in I.S. No. 2000-1491 were guilty of falsification of

By grave abuse of discretion is meant, such
capricious and whimsical exercise of judgment as commercial and private documents, based on essentially the same
is equivalent to lack of jurisdiction. The abuse of
evidence and arguments.
discretion must be grave as where the power is
exercised in an arbitrary or despotic manner by
reason of passion or personal hostility and must be
so patent and gross as to amount to an evasion of And finally, DOJ Secretary Datumanong exhaustively
positive duty or to a virtual refusal to perform the
duty enjoined by or to act at all in contemplation presented in his 4 December 2004 the legal and factual reasons for his
of law.
reversal of the 27 June 2003 Resolution of DOJ Usec. Gutierrez, which

negated petitioners assertion of capriciousness, whimsicality, or

Contrary to the claims of petitioner, the Court of Appeals did arbitrariness on his part.
not perfunctorily or mechanically deny his Petition

for Certiorari therein. A comprehensive review of the assailed Equally without merit is petitioners assertion that upon dismissal of the
Decision of the appellate court readily reveals that it considered and charges against his co-respondent Espiritu, those against him must
judiciously passed upon all the arguments presented by both parties likewise be dismissed. Petitioner insists that if the charges against an
before finally decreeing the dismissal of petitioners Petition accused rest upon the same evidence used to charge a co-accused, the
for Certiorari. dismissal of the charges against the former should benefit the latter.

Although no new evidence was presented by the parties from This is flawed reasoning, a veritable non sequitur.
the time the first Resolution was issued by DOJ Usec. Gutierrez on 7

June 2003 until the second Resolution was issued by DOJ Secretary Suffice it to say that it is indubitably within the discretion of
Datumanong on 4 December 2004, the DOJ Secretary is not precluded the prosecutor to determine who must be charged with what crime or
from making inferences of fact and conclusions of law which may be for what offense. In Webb v. De Leon[29] in which the petitioners
different from, contrary to, or even entirely abandoning, the findings questioned the non-inclusion of Alfaro in the Information for rape with
made by DOJ Usec. Gutierrez although they were both faced with the homicide filed against them, despite Alfaros alleged conspiratorial
same evidence and arguments. participation in the crime charged, this Court pronounced that:

[T]he prosecution of crimes appertains to the

First, it must be noted that DOJ Secretary Datumanong executive department of government whose
issued his Resolution of 4 December 2004 upon the filing by principal power and responsibility is to see that our
laws are faithfully executed. A necessary
PEARLBANK of a motion for reconsideration of the Resolution dated component of this power to execute our laws is the
right to prosecute their violators. The right to
7 June 2003 of DOJ Usec. Gutierrez entirely dismissing its prosecute vests the prosecutor with a wide range
of discretion---the discretion of whether, what and
complaint. The 4 December 2004 Resolution, therefore, of DOJ
whom to charge, the exercise of which depends on
Secretary Datumanong was the result of his acting on, and granting of,
 a smorgasboard of factors which are best
appreciated by prosecutors x x x. or issues raised in the civil case, the guilt or innocence of the accused

would necessarily be determined.[33]

It comes into play generally in a situation in which a civil action and a

While the right to equal protection of the law requires that litigants are
criminal action are both pending and there exists in the former an issue
treated in an equal manner by giving them the same rights under similar
which must be preemptively resolved before the criminal action may
circumstances,[30] it may not be perversely used to justify desistance by
proceed, because howsoever the issue raised in the civil action is
the authorities from prosecution of a criminal case, just because not all
resolved would be determinative juris et de jure of the guilt or
of those who are probably guilty thereof were charged.
innocence of the accused in the criminal case.[34]

Petitioner further insists that the proceedings in SEC Cases

The rationale behind the principle of prejudicial question is to avoid
No. 04-00-6590 and No. 04-00-6591, now pending before the RTC of
two conflicting decisions. Based on Section 7 of the same rule, it has
Makati[31] (civil cases), warrant the suspension of Criminal Cases No.
two essential elements:
365255-88. (criminal cases).

Sec. 7. Elements of prejudicial question. - The

We disagree. elements of a prejudicial question are: (a) the
previously instituted civil action involves an issue
similar or intimately related to the issue raised in
the subsequent criminal action, and (b) the
Under Rule 111 of the Revised Rules of Court, a criminal action may resolution of such issue determines whether or not
the criminal action may proceed.
be suspended upon the pendency of a prejudicial question in a civil

action, to wit:
In Sabandal v. Tongco,[35] this Court had the opportunity to further
Sec. 6. Suspension by reason of prejudicial
expound on the resolution of prejudicial questions in this manner:
question. - A petition for suspension of the
criminal action based upon the pendency of a
prejudicial question in a civil action may be filed If both civil and criminal cases have similar issues
in the office of the prosecutor or the court or the issue in one is intimately related to the issues
conducting the preliminary investigation. When raised in the other, then a prejudicial question
the criminal action has been filed in court for trial, would likely exist, provided the other element or
the petition to suspend shall be filed in court for characteristic is satisfied. It must appear not only
trial, and shall be filed in the same criminal action that the civil case involves the same facts upon
at any time before the prosecution rests. which the criminal prosecution would be based,
but also that the resolution of the issues raised in
the civil action would be necessarily determinative
of the guilt or innocence of the accused. If the
A prejudicial question is defined as one which arises in a case the
resolution of the issue in the civil action will not
resolution of which is a logical antecedent of the issue involved therein, determine the criminal responsibility of the
accused in the criminal action based on the same
and the cognizance of which pertains to another tribunal. [32] facts, or there is no necessity that the civil case be
determined first before taking up the criminal case,
therefore, the civil case does not involve a
prejudicial question. Neither is there a prejudicial
The prejudicial question must be determinative of the case before the
question if the civil and the criminal action can,
court, but the jurisdiction to try and resolve the question must be according to law, proceed independently of each
other.
lodged in another court or tribunal. It is a question based on a fact

distinct and separate from the crime, but so intimately connected with
There is no prejudicial question here.
it that it determines the guilt or innocence of the accused; and for it to

suspend the criminal action, it must appear not only that said case
We note that the Informations filed in the criminal cases
involves facts intimately related to those upon which the criminal
charge petitioner and his other co-accused with falsification of
prosecution would be based, but also that in the resolution of the issue
commercial and private documents under paragraph 1 of Article 172,

in relation to paragraph 2 of Article 171 of the Revised Penal Code;

 without force and effect or if
and paragraph 2 of Article 172, in relation to paragraph 2 of Article PEARLBANK is entitled to be relieved
of the legal effects thereof;
171 of the Revised Penal Code, in signing and/or issuing the

questioned Confirmation Advices, Special Powers of Attorney and (3) whether or not defendants therein are
liable for damages to PEARLBANK as
Certifications on behalf of WINCORP, stating therein that a consequence of this alleged fraudulent
scheme.[37]
PEARLBANK owed the third parties (lenders and investors). Each of

the Informations[36] alleged that the therein named accused:

A cursory reading of the above-mentioned issues would
x x x confederating and conspiring together, did show that, although apparently arising from the same set of facts, the
then and there willfully, unlawfully and feloniously prepare,
execute and sign a Confirmation Advice of WINCORP x x issues in the criminal and civil cases are clearly different from one
x to make it appear in the said commercial document that
PEARLBANK SECURITIES, INC., a corporation legally another. Furthermore, the issues in the civil cases are not determinative
established, is a borrower of WINCORP, having allegedly
of the issues in the criminal cases.
secured and granted a loan in the amount of x x x when in
truth and in fact, the said accused well knew that
PEARLBANK SECURITIES, INC. had not secured nor had
been granted said loan on the date above-mentioned, and Petitioner particularly calls attention to the purported
having falsified said document in the manner stated, the said
accused issued a copy of the said document, which has not prejudicial issue in the civil cases: whether PEARLBANK has
been notarized before a notary public or other person legally
outstanding loan obligations to WINCORP or its
authorized to do so, the accused issued the said document to,
and was received by one Tiu K. Tiac to the damage and stockholders/investors.Although said issue may be related to those in
prejudice of PEARLBANK SECURITIES, INC.,
represented by its Treasurer and Director Juanita U. Tan. the criminal cases instituted against petitioner, we actually find it

immaterial to the resolution of the latter.

The principal issue to be resolved in the criminal cases is

whether or not petitioner committed the acts referred to in the That PEARLBANK does have outstanding loans with

Informations, and whether or not these would constitute falsification WINCORP or its stockholders/investors is not an absolute defense in,

of commercial and private documents under the law. and would not be determinative of the outcome of, the criminal

cases.Even if the RTC so rules in the civil cases, it would not

In contrast, the issues to be resolved in SEC Case No. 04-00- necessarily mean that these were the very same loan transactions

6591 are as follows: reflected in the Confirmation Advices, Special Powers of Attorney and
(1) whether or not Tankiansee Certifications issued by WINCORP to its stockholders/investors,
is entitled to the accounting and
disclosure pursuant to Section 74, totally relieving petitioner and his other co-accused from any criminal
Tile VII of the Corporation Code of the
Philippines; liability for falsification. The questioned documents specifically made

(2) whether or not Tankiansee it appear that PEARLBANK obtained the loans during the first four
is entitled to be furnished copies of the months of the year 2000. Hence, in the criminal cases, it is not enough
records or documents demanded from
WINCORP; that it be established that PEARLBANK has outstanding loans with

(3) whether or not WINCORP is liable to WINCORP or its stockholders/investors, but also that these loans were
Tankiansee for damages.
acquired by PEARLBANK as WINCORP made it to appear in the

questioned documents it issued to its stockholders/investors. This only

SEC Case No. 04-00-6590 involves the following issues: demonstrates that the resolution of the two civil cases is not juris et de

jure determinative of the innocence or guilt of the petitioner in the

(1) whether or not PEARLBANK has
loan obligations with WINCORP or its criminal cases.
stockholders;

(2) whether or not the subject

Confirmation Advices and other related Finally, we note that the criminal cases were already instituted and
documents should be declared to be pending before the MTC. Petitioner would have the opportunity to
present the arguments and evidence in his defense in the course of the

trial of said cases which will now proceed by virtue of this Decision.

WHEREFORE, premises considered, the instant Petition for Review

on Certiorari is DENIED. The Decision dated 26 October 2005

and Resolution dated 7 February 2006 of the Court of Appeals in CA-

G.R. No. 90006 are hereby AFFIRMED. Costs against petitioner.