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518 Phil. 558


[ G.R. NO. 167234, February 27, 2006 ]




Assailed in this petition for review are the August 31, 2004 Decision[1] of the Court of Appeals which denied the petition filed by petitioner Teodoro C. Borlongan in CA-G.R. SP No. 79324, on the ground of absence of grave abuse of discretion on the part of the Office of the Ombudsman in dismissing the administrative complaint filed by petitioner against respondents Rafael B. Buenaventura and Norberto C. Nazareno; and its February 21, 2005 Resolution[2] denying petitioner's motion for reconsideration.

On June 26, 2001, petitioner, then president of Urban Bank Inc. (UBI), filed a complaint-affidavit against respondent Rafael B. Buenaventura, Governor of the Bangko Sentral Ng Pilipinas (BSP) and Norberto C. Nazareno, President of Philippine Deposit Insurance Corporation (PDIC). Petitioner alleged that on April 26, 2000, Land Bank of the Philippines (LBP) had an existing inter-bank lendings to UBI, part of which was secured by assignment of National Food Authority (NFA) promissory notes.[3] On even date, the Monetary Board of BSP issued a resolution ordering the closure of UBI and appointing PDIC as its receiver. However, instead of administering the properties of UBI for the benefit of all its creditors, respondents gave undue preference to LBP by allowing the latter to enforce collection from UBI on the promissory notes of NFA in the amount of P562,500,000.00, in violation of Sections 16 and 30, of Republic Act No. 7653, the New Central Bank Act. In support of his assertion, petitioner presented a document titled "Confirmation of Outright Purchase of Government Securities" dated April 25, 2000.[4] Said document provides that the LBP confirms that it has purchased from UBI all its rights, titles and interest over the promissory notes of NFA in the total sum of P562,500,000.00.

Petitioner's complaint-affidavit spawned two cases: (1) OMB-0-01-0504, a proceeding for the determination of probable cause for the filing of criminal charges against respondents; and (2) OMB-ADM-0327, the instant administrative case.

On July 1, 2002, the Ombudsman issued an order[5] finding Nazareno guilty of conduct prejudicial to the best interest of the service and imposing upon him the penalty of six months and one day suspension. The complaint was dismissed as to respondent Buenaventura. The Ombudsman held that Buenaventura's membership in the NFA Council and his being a director of PDIC, without proof of participation in any unlawful act, does not make him liable.

In an order[6] dated July 22, 2002, the Ombudsman modified the order of July 1, 2002 and found Nazareno guilty only of simple misconduct with a penalty of one month and one day suspension.

Meanwhile, on July 2, 2002, the Ombudsman dismissed OMB-0-01-0504, for lack of probable cause. Petitioner sought relief before this Court via a petition for certiorari which was however dismissed on July, 25, 2005,[7] considering that the finding by the Ombudsman that there was no probable cause to hold respondents for trial is conclusive and supported by substantial evidence.

Respondent Nazareno and petitioner filed their respective motions for reconsideration of the July 22, 2002 order. On August 21, 2002, the Ombudsman dismissed the administrative complaint against Nazareno, to wit:
The Motion for Reconsideration filed by complainant is denied. Further, the ruling contained in the Resolution dated July 2, 2002 issued in OMB-0-01-0504 is hereby adopted. Accordingly, the Motion for Reconsideration of respondent Nazareno is hereby granted and the charge against him is dismissed.[8]
Petitioner filed a petition for certiorari with the Court of Appeals which denied the petition on August 31, 2004. It held that the Ombudsman committed no grave abuse of discretion in its appreciation of the evidence against respondents. Petitioner moved for reconsideration but was denied on February 21, 2005.

On March 16, 2005, petitioner filed a motion for extension of time to file petition for review on certiorari and paid the corresponding docket and other lawful fees.[9] On April 11, 2005, petitioner passed away.[10] His counsel subsequently filed the petition on April 18, 2005 with notice to the Court of his client's death.[11]

The issue for resolution is whether petitioner's counsel was able to perfect an appeal.

The right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks to avail of the right to appeal must comply with the requirements of the Rules. Non-compliance therewith results in the loss of the right to appeal.[12] The perfection of an appeal in the manner and within the period set by law is not only mandatory, but jurisdictional as well. Failure to perfect an appeal renders the judgment appealed from final and executory.[13]

In an appeal by way of petition for review, the appeal is deemed perfected as to the petitioner upon the timely filing of the petition and the payment of docket and other lawful fees.[14] Sections 1, 2 and 3, Rule 45 of the Rules of Court state:
SECTION 1. Filing of petition with the Supreme Court. - A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.

SEC. 2. Time for filing; extension.–The petition shall be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of the denial of the petitioner's motion for new trial or reconsideration filed in due time after notice of the judgment. On motion duly filed and served, with full payment of the docket and other lawful fees and the deposit for costs before the expiration of the reglementary period, the Supreme Court may for justifiable reasons grant an extension of thirty (30) days only within which to file the petition.

SEC. 3. Docket and other lawful fees; proof of service of petition. - Unless he has theretofore done so, the petitioner shall pay the corresponding docket and other lawful fees to the clerk of court of the Supreme Court and deposit the amount of P500.00 for costs at the time of the filing of the petition. Proof of service of a copy thereof on the lower court concerned and on the adverse party shall be submitted together with the petition.
It is clear from the foregoing that perfection of an appeal by way of a petition for review before the Court is conditioned upon the following requisites: (1) payment of the required docket and other lawful fees; and (2) the filing of the verified petition within 15 days from receipt of the assailed decision or within the extended period granted by the Court.

In the case at bar, petitioner paid the docket and other fees. However, he failed to satisfy the second requisite because he died on April 11, 2005 before he could file the petition. The petition filed and verified by petitioner's counsel is a mere scrap of paper because he no longer has the authority to represent his deceased client. The settled rule is that attorney-client relationship is terminated upon the client's death.[15] A dead client has no personality and cannot be represented by an attorney.[16]

At any rate, even if petitioner was able to perfect an appeal, the same will still not prosper under the doctrine of conclusiveness of judgment. Under this doctrine, which is also known as "preclusion of issues" or "collateral estoppel," issues actually and directly resolved in a former suit cannot again be raised in any future case between the same parties involving a different cause of action.

It may be recalled that the instant administrative complaint is grounded primarily on petitioner's claim that respondents violated Section 30[17] the New Central Bank Act which prohibits the PDIC as receiver, from disposing the assets of a bank placed under receivership, like UBI. In essence, petitioner contended that respondents gave undue preference to LBP over the promissory notes of the NFA, after UBI was already placed under receivership of the PDIC. The evidence presented by petitioner in support of his arguments was the "Confirmation of Outright Purchase of Government Securities." Petitioner further asseverated that in violating Section 30, respondent Buenavetura also violated Section 16[18] of the New Central Bank Act which holds the members of the Monetary Board of BSP liable for any violation of the Act.

However, all these contentions, which were also the basis of the investigation for the existence of probable cause in OMB-0-01-0504, had already been passed upon in Borlongan v. The Office of the Ombudsman,[19] which sustained the Ombudsman's dismissal of the compliant against respondents. It was held in the said case that there was substantial evidence to support the findings of the Ombudsman that respondents did not violate Section 30 of the New Central Bank Act and that no undue preference was given to LBP because the assignment of the NFA notes to LBP was completed on March 29, 2000, before the closure of UBI on April 26, 2000. The right of LBP to collect was held to have arisen from a Deed of Assignment notarized on Mach 29, 2000 and not on the April 25, 2000 Confirmation of Outright Purchase of Government Securities. Pertinent portions of the decision, read:
In a Resolution dated July 2, 2002, Graft Investigation Officer I, Joseph L. Licudan, dismissed Borlongan's complaint for lack of sufficient evidence to warrant a finding of probable cause against respondents, saying, inter alia, thus:
Respondents did not give undue preference to Land Bank of the Philippines when the latter was allowed to enforce collection on the subject National Food Authority Promissory Notes.

The assignment of said NFA notes to LBP was completed on 29 March 2000 before the closure of UBI on 26 April 2000. [A]s of that date, LBP, as assignee, had full rights to enforce collection of the subject NFA notes. Respondent Nazareno merely confirmed LBP's authority to enforce collection on the subject NFA promissory notes on the basis of the perfected Deed of Assignment executed by UBI in favor of LBP, which was notarized on 29 March 2000 or before the closure of UBI.

The "confirmation of outright purchase of Government Securities" relied upon by complainant is not the document that established LBP's rights to collect the proceeds of the NFA notes. It was clear that it was the Deed of Assignment notarized on March 29, 2000, which gave LBP the right to collect. Even without the "Confirmation of Outright Purchase of Government Securities", NFA is duty bound to pay the proceeds of the NFA notes to LBP because of the provisions of the Deed of Assignment, and the fact that LBP has physical possession of the NFA notes.

xxx                                 xxx                                 xxx

Anent the charge of violation 30 of Republic Act No. 7653 (New Central Bank Act) the same has no factual or legal basis as respondents' transactions on the assets or affairs of UBI were in accordance with polices, rules, and procedures in the discharge of respondents' functions and duties as a receiver. This is because the assignment of NFA notes was completed before the closure of UBI.

As for the alleged violation of Sec. 16 of the same law, the same has no application in the proffered criminal action. The said section applies obviously to administrative infractions but never as a punitive measure for it does not provide a penalty of imprisonment or imposition of fines in case of violation. To be liable under it, it must be proven that the alleged illegal act was committed with deliberateness, which is difficult to prove. With respect to negligence and the like, the culprit should be found guilty first.

In the case before us, it was not shown that there was willful violation of the law, neither was it indicated that the respondents have been found guilty of negligence.
x x x x

A perusal of the records shows that the findings of fact by the Office of the Ombudsman are supported by substantial evidence, hence the same should be considered conclusive.
The foregoing factual findings in Borlongan v. The Office of the Ombudsman, bind the disposition of the factual issues in the instant case under the principle of conclusiveness of judgment. For one, both the probable cause proceeding and the present administrative case require the same quantum of evidence, i.e., substantial evidence or that evidence that a reasonable mind might accept as adequate to support a conclusion.[20] For another, the factual backdrop in Borlongan v. The Office of the Ombudsman, which the Court declared as insufficient to hold respondents for trial, is the same set of facts that confronts the Court in the instant controversy.

Similarly, in Baylon v. Fact-Finding Intelligence Bureau,[21] petitioner and her co-accused were absolved from administrative liability, considering, inter alia, a previous ruling of the Court that the evidence relied upon by the Ombudsman, which incidentally is the same evidence presented in the administrative case, shows that there exists no probable cause for the filing of criminal charges against them, thus –
This Court takes note of special circumstances relative to the case at bar. The Decision of this Court in G.R. No. 142738 categorically declared the lack of probable cause to indict petitioner for the same acts constitutive of the administrative charge against her, hence, it ordered the Sandiganbayan to dismiss the criminal case against petitioner and her co-accused. In the same vein, the COA Decision No. 2001-11 found no irregularity in the purchases by the NKTI of the blood bags from FVA and thus it lifted its previous disallowance of the payments to said purchases. Such determinations in favor of petitioner by other fora, independent they may be from the administrative action against her, serve as added reasons to warrant the taking of a hard look at the Ombudsman's Memorandum Reviews.
In sum, the Court finds that the denial of the instant petition is proper.

WHEREFORE, based on the foregoing, the petition is DENIED.


Panganiban, C.J., (Chairman), Austria-Martinez, Callejo, Sr. and Chico-Nazario, JJ., concur.

Rollo, pp. 26-36. Penned by Associate Justice Jose C. Reyes, Jr., and concurred in by now Presiding Justice Ruben T. Reyes and Associate Justice Perlita J. Tria Tirona.

[2] Id. at 37.

[3] Ombudsman, records (OMB-ADM-0327), p. 0003.

[4] Id. at 0017.

[5] CA rollo, pp. 65-70.

[6] Id. at 71-72.

[7] Borlongan v. The Office of the Ombudsman, G.R. No. 159754, July 25, 2005, SC E-Library.

[8] CA rollo, p. 75.

[9] Rollo, pp. 2-7.

[10] Id. at 40.

[11] Id. at 10.

[12] Neypes v. Court of Appeals, G.R. No. 141524, September 14, 2005, SC E-Library.

[13] Air France Philippines v. Leachon, G.R. No. 134113, October 12, 2005, SC E-Library.

[14] Id.

[15] Gonzaga v. Villanueva, Jr, A.C. No. 1954, July 23, 2004, 435 SCRA 1, 9.

[16] Laviña v. Court of Appeal, G.R. Nos. 78295 and 79917, April 10, 1989, 171 SCRA 691, 702.

[17] Pertinent portion of the provision, states:
x x x x
The receiver shall immediately gather and take charge of all assets and liabilities of the institution, administer the same for the benefit of its creditors, and exercise the general powers of a receiver under the Revised Rules of Court but shall not, with the exception of administrative expenditures, pay or commit any act that will involve the transfer or disposition of any asset of the institution x x x.

[18] Sec. 16. Responsibility. – Members of the Monetary Board, officials, examiners, and employees of the Bangko Sentral who willfully violate this Act or who are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary diligence in the performance of his duties shall be held liable for any loss or injury suffered by the Bangko Sentral or other banking institutions as a result of such violation, negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary diligence.

[19] Supra, note 7.

[20] Baylon v. Fact-Finding Intelligence Bureau, 442 Phil. 217, 235 (2002).

[21] Id. at 232.

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