G. R. No. 142738 - December 14, 2001
DR. HONORATA BAYLON, Petitioner, v. OFFICE OF THE OMBUDSMAN AND SANDIGANBAYAN, Respondents.
Before this Court is a petition2 assailing the decision of the Ombudsman 3 for having been issued with grave abuse of discretion. The decision disapproved a recommendation of the Special Prosecutor4 for the dismissal of the criminal case against petitioner Dr. Honorata G. Baylon (hereafter, Dr. Baylon) and co-accused, and approved a memorandum5 recommending the prosecution of the criminal case. The petition prays that the Sandiganbayan be enjoined from further proceedings in the criminal case.
In 1993, the Secretary of Health appointed Dr. Baylon as the Program Manager of the Government's National Voluntary Blood Donation Program (hereafter, the blood program).6 The National Kidney and Transplant Institute (hereafter, NKTI) was the lead agency of the blood program. In the same year, the Department of Health (hereafter, DOH), assisted by the USAID made a study on the safety of the Philippine blood banking system.
On February 3, 1994, the DOH called a meeting of all the managers of the department's several programs. During the meeting, a comprehensive work plan for a new project "STOP D.E.A.T.H.: Hospitals for Philippines 2000" (hereafter, the project) was discussed. The blood program was one of the six (6) new programs included in the project.
A week later,7 on February 11, 1994, the DOH allotted two million pesos (P2,000,000.00) to the NKTI as start-up money for the blood program.8 The official disbursement was made on February 18, 1994.9
On February 18, 1994, the DOH issued Department Order Nos. 73-f and 73-g, series of 1994.10 Department Order No. 73-f launched the project. The sum of fifty-one million pesos (P51,000,000.00) was allocated for the blood program.11 Department Order No. 73-g created an Executive Committee and a National Secretariat for the Project.12
On February 24, 1994, Secretary of Health Juan M. Flavier revealed to the public the results of the USAID study, to wit:
The events led to an acute shortage of blood available to the public as the commercial blood banks intentionally refused to sell blood in retaliation to the closure order. Thus, Secretary Flavier instructed the immediate implementation of the voluntary blood donation system as the only alternative source of blood.
The NKTI expedited the installation of the blood program. On March 8 and 17, 1994, requisition vouchers for the initial purchase of containers for blood were issued.13
On March 8, 1994, NKTI decided to purchase Terumo blood bags for immediate distribution to the regional hospitals and medical centers.
On March 16, 1994, NKTI obtained a quotation of the prices of blood bags (Terumo brand) from FVA-Exim Trading (hereafter, FVA). FVA is the exclusive distributor of Terumo blood bags and the only supplier which could supply all sizes of the blood bags.
The prices quoted were:14
On March 29, 1994, upon NKTI's request, FVA submitted a quotation at reduced prices, thus:15
In March 1995, the Commission on Audit (hereafter, COA) through its Resident Auditor, Ms. Blesida Gutierrez, disallowed in post-audit the above purchase on the ground that the NKTI failed to conduct a public bidding. The COA Auditor averred that the cost of the blood bags was overpriced and grossly disadvantageous to the government. The COA auditor made a comparison of the prices of the blood bags quoted by FVA to NKTI with the prices offered to other medical institutes such as the Philippine National Red Cross (PNRC), Mother Seaton and to Our Lady of Fatima,16 to wit:
Based on the above price differences, the COA concluded that the government incurred a total loss of one million nine hundred sixty four and three hundred and four pesos and seventy centavos (P1,964,304.70) arising from the transaction between NKTI and FVA. We quote the NKTI Annual Audit Report for the year 1995 prepared by the COA:
On February 4, 1997, a complaint-affidavit was filed with the Ombudsman17 against Dr. Baylon and other DOH officials. The complaint-affidavit alleged criminal and administrative charges:18
On March 17, 1999, a panel composed of members of the Evaluation and Preliminary Investigation Bureau (hereafter, EPIB),28 Office of the Ombudsman issued a resolution recommending29 that the complaint for violation of the anti-graft law against petitioner and her co-accused be dismissed for insufficiency of evidence. According to the resolution:30
A review of the resolution of the EPIB panel was made and on August 9, 1999, the Assistant Ombudsman, EIO, Abelardo L. Aportadera, Jr. in a memorandum to Ombudsman Aniano A. Desierto made the following recommendations:31
The memorandum further recommended that:32
On October 15, 1999, the Special Prosecutor filed with the Sandiganbayan33 an information for violation of Section 3(e), R. A. No. 301934 against Dr. Baylon and co-accused, Alano, Javier and Prado. We quote:35
On November 5, 1999, Dr. Baylon filed with the Sandiganbayan a motion for reconsideration and/or reinvestigation.36
On November 9, 1999, the Sandiganbayan ordered the Office of the Ombudsman to conduct a reinvestigation of the case and suspended further proceedings pending review.37
On November 25, 1999, the Sandiganbayan arraigned the petitioner, and she pleaded "not guilty."38
On January 18, 2000, acting on the motion for reconsideration, the Office of the Special Prosecutor found that there was no overpricing, therefore, there could be no injury to the government and recommended thus:39
On February 9, 2000, the Office of the Legal Counsel, Office of the Ombudsman, submitted to the Ombudsman a memorandum stating that Dr. Baylon and her co-accused did not exercise ordinary prudence in ascertaining and verifying the prices offered by FVA Ex-Im Trading to medical institutions imbued with public interest. Dr. Baylon and her co-accused did not exert their best efforts at obtaining the best deal for the government and that such inaction indicated their gross inexcusable negligence. The memorandum stated that there appears to be no cogent reason to reverse the memorandum of August 9, 1999 finding probable cause against Dr. Baylon and her co-accused. The memorandum recommended thus:40
On February 20, 2000, Ombudsman Aniano A. Desierto approved the above-quoted memorandum and ordered that the case be assigned to another prosecutor for its aggressive prosecution.41
Hence, this petition.42
On June 4, 2001, co-accused43 Dr. Filoteo A. Alano moved to intervene in the case.44
On June 21, 2001, in a written decision, the COA allowed Dr. Filoteo A. Alano's request to lift the previous audit disallowance in the amount of six million six thousand and one hundred thirty three pesos and fifty four centavos (P6,006,133.54) representing the cost of the blood bags that NKTI purchased from FVI. According to the COA decision, the COA came to the following conclusions: First, the purchase of the Terumo blood bags without public bidding is not violative of P. D. 1594, R. A. 1760 and COA Circular No. 85-55A as the supplies were to be used in connection with a project or activity that cannot be delayed without causing detriment to public service and the materials are sold by an exclusive distributor who does not have sub-dealers selling at lower prices for which no suitable substitute can be obtained. Second, to determine if the price is excessive and thus not advantageous to the government, a canvass should have been made by the auditor as required by COA Memorandum No. 97-012, which it failed to do. The COA decided thus:45
On July 25, 2001, we noted the motion for intervention filed by Dr. Filoteo A. Alano and required the parties to comment on the motion.46
On August 27, 2001, petitioner Dr. Baylon interposed no objection to Dr. Filoteo A. Alano's motion to intervene.47
On October 15, 2001, the Office of the Ombudsman filed its comment on the motion for intervention stating that it is devoid of merit.48
We decide the case on the merits.
The issue raised is whether the Ombudsman acted with grave abuse of discretion amounting to lack or excess of jurisdiction in finding probable cause against Dr. Baylon and co-accused for violation of Section 3(e), R. A. No. 3019, as amended, and in ordering their prosecution before the Sandiganbayan.
The Court's Ruling
We find the petition meritorious. We find it unnecessary to pass upon the motion for intervention of Dr. Filoteo A. Alano as this ruling will benefit him, whether or not the motion is granted.
As a general rule, this Court does not interfere with the Ombudsman's determination of the existence of probable cause.49 However, this non-interference does not apply when there is grave abuse in the exercise of such discretion.50 In such a situation, the petitioner may file a petition for certiorari under Rule 65 of the Revised Rules of Court.51 There is "grave abuse of discretion" where "a power is exercised in an arbitrary, capricious, whimsical52 or despotic manner by reason of passion or personal hostility so patent and gross as to amount to evasion of positive duty or virtual refusal to perform a duty enjoined by, or in contemplation of law.53
In the case at bar, there is no showing of probable cause. "Probable cause" signifies a reasonable ground of suspicion supported by circumstances sufficiently strong in themselves to warrant a cautious man's belief that the person accused is guilty of the offense with which he is charged.54 The grounds for suspicion must be reasonable and supported by sufficiently strong circumstances.55
The law violated is R. A. No. 3019, Section 3(e). It provides,
There are two ways of violating Section 3(e), Republic Act No. 3019, to wit: (a) by causing any undue injury to any party, including the Government; and (b) by giving any private party unwarranted benefit, advantage or preference.56
In order to be held guilty of violating Section 3(e), R. A. No. 3019, the act of the accused that caused undue injury must have been done with evident bad faith or with gross inexcusable negligence.57 Bad faith per se is not enough for one to be held liable under the law, the "bad faith" must be "evident."58
The elements of the offense, essential for the conviction of an accused under Section 3(e), R. A. No. 3019, are as follows:
We note the absence of some essential elements of the offense charged, to wit:
(1) There was no undue injury to the Government.
The records show that in 1994, the price of Terumo blood bags offered by FVA and accepted by NKTI was in fact lower than the price offered to other government hospitals. The price comparison is as follows:60
From the above table, it can be seen that NKTI was able to secure the Terumo blood bags from FVA at a price advantageous to the government.
We further note that when the COA made a finding that the government suffered a loss,61 comparing the prices at which the bags were offered to PNRC, Mother Seaton and Our Lady of Fatima with the prices offered to NKTI, it committed a significant error. The prices compared cover two different years. The COA based its findings on prices offered in 1995, whereas the actual purchase of the blood bags was made by NKTI in 1994.62
The COA recognized its own error and reversed itself in its decision of June 21, 2001, when it lifted the audit disallowance in so far as the procurement of the Terumo blood bags by NKTI from FVI is concerned.63 We cannot ignore the reasons behind this, reasons that we accept in this decision as well.
The fact is that NKTI chose FVA as its supplier since it is the sole distributor of Terumo blood bags, and no sub-dealer or dealer could offer the bags at lower prices or at better conditions.64 The choice of the Terumo brand was also sufficiently explained. Reputable medical institutions such as St. Luke's Medical Center, The Lung Center of the Philippines, Makati Medical Center, Philippine Children's Medical Center and Cardinal Santos Medical Center use the Terumo brand and have attested to its superior qualities compared with other brands, thus:65
(2) Even assuming there was injury to the Government, there was no bad faith or inexcusable negligence on the part of petitioner.
Here, there is no evident bad faith on the part of petitioner and her co-accused. "Bad faith" does not simply connote bad moral judgment or negligence. There must be some dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a sworn duty through some motive or intent or ill will. It partakes of the nature of fraud.66 It contemplates a state of mind affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior purposes.67
Neither is there "gross negligence." "Gross negligence" is characterized by the want of even slight care, acting or omitting to act in a willful or intentional manner displaying a conscious indifference to consequences as far as other persons may be affected.68
We cannot discount the fact that a sense of urgency drove petitioner to purchase the Terumo blood bags. The project could not be delayed without causing detriment to the public service. There was a shortage in the blood supply available to the public. To determine whether there was bad faith, these essential facts should not have been ignored. When the Ombudsman did not take these facts into consideration in the determination of probable cause, he gravely abused his discretion. When the Ombudsman chose not to dismiss the case despite the recommendations of the EPIB dated March 17, 1999 and the findings of the Special Prosecutor, dated January 18, 2000, he unduly harassed petitioner and her co-accused.
The petitioner was merely doing her job and only acted in response to an emergency brought about by the shortage in the blood supply available to the public. The shortage in the blood supply available to the public was a matter recognized and addressed by Secretary of Health Juan M. Flavier. Secretary Flavier attests that he "directed the NKTI to do something about the situation and immediately fast-track the implementation of the Voluntary Blood Donation Program of the government in order to prevent further deaths owing to the lack of blood."69 In fact, more than finding fault in petitioner's quick action, she and her co-accused, should be commended for acting "promptly" and "diligently"70 in response to a crisis.
In National Center for Mental Health Management v. COA,71 we found that respondent COA committed grave abuse of discretion when it "discarded rather hastily, if not unfairly, the factors that were actually taken into account by petitioners before the purchases were effected." We find that the same haste and unfairness exist in the case at bar. In the afore-cited case, the Court characterized expenditures as relative, adopting the comment of then COA Chairman Francisco Tantuico, Jr., to wit:72
The urgency of the situation, and the good faith of petitioner and her co-accused are attested to by then Secretary of Health, now Senator, Juan M. Flavier. He states:73
Above premises considered, we fail to see how the purchases of the Terumo blood bags were made in bad faith or with gross negligence.
The Ombudsman's grave abuse of discretion is further made obvious by the fact that the charges against Secretary Flavier were dropped,74 but the charges against petitioner, Dr. Baylon and her co-accused were not. The basis for this is not seen in the records, indicating arbitrariness on the part of respondent Ombudsman.
The facts of the case also readily show that the circumstances surrounding the purchase of Terumo blood bags exempted it from the requirement of a public bidding. Executive Order No. 301, Section 1 provides:
WHEREFORE, we GRANT the petition. We REVERSE and SET ASIDE the resolution of the Ombudsman dated February 28, 2000, finding probable cause. We ORDER the Sandiganbayan TO DISMISS forthwith Criminal Case No. 25703 against petitioner and her co-accused with costs de oficio.
Davide, Jr., C . J ., Puno, Kapunan, and Ynares-Santiago, JJ ., concur.
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