CASE DIGEST

G.R. No. 112584 May 23, 1997

DOMINGO INGCO, ERNESTO MAGBOO and HERMINIO ALCASID, Petitioners, v. SANDIGANBAYAN,

Respondent.

FACTS:

Petitioners Domingo Ingco, Ernesto Magboo and Herminio Alcasid have lodged the instant civil action of
certiorari and prohibition, with prayer for temporary restraining order, to nullify the resolution, dated 07
October 1993 and 08 November 1993, of the Sandiganbayan which denied petitioners' motion to quash
the information and motion for a consideration of the denial.

The case began when, on 26 May 1987, Domingo Ingco, a former Vice-President of the Philippine
National Bank ("PNB"), was charged, along with top officials of Cresta Monte Shipping Corporation,
namely, its Chairman of the Board of Directors Ernesto Magboo and its President Herminio Alcasid, by
PNB before the Presidential Blue-Ribbon Committee with violation of Republic Act No. 3019 ("Anti-Graft
and Corrupt Practices Act"). The matter was at once referred to the Office of the Ombudsman (as a
complaint on 26 May 1987).

Ingco et al were charged of conspiring and confederating to acquire and get approval for bank loans
(dated 1977 and 1978) of US$13.4M in total without proper evaluation and disadvantageous to the
government, and thereby falls in the category of behest loans. The loaner defaulted in payment with
more than 500M PhP uncollected.

On 21 July 1993, an information was filed with the Sandiganbayan for violation of Section 3(e), in
relation to Section 3(g), of R.A. 3019, as amended, against herein petitioners.

Petitioners moved for the quashal of the information on the ground, inter alia, that the facts alleged in
the information did not constitute an offense under the invoked law, and that the offense charged, in
any case, had already prescribed. Expectedly, the motion was opposed by the prosecution.

ISSUE/S:

The appeal hinges on the resolution of two main issues:

(1) whether or not the offense has already prescribed, and

(2) whether or not the facts charged under the information indeed constitute an offense.

DECISION/RULING:
1.) On the issue of prescription, the Court affirms the holding of the Sandiganbayan that the offense
has not as yet prescribed. Although, it is true that more than ten years have elapsed from the
time of the alleged commission of the offense on 22 September 1977 and/or 27 March 1978 to
the date of filing of the information on 21 July 1993, the then applicable 10-year prescriptive
period has, however, been effectively suspended by the filing of the complaint on 26 May 1987
with the Ombudsman.
2.) The information against Domingo Ingco expressed that he had favorably recommended the
approval of the application for loan of Cresta Monte Shipping Corporation in the amount of US
$5.91 million and US $7.5 million, notwithstanding that: [a] Cresta Monte had a capitalization of
only P1 million; [b] no project feasibility study was conducted; [c] the PNB Credit Department
submitted an adverse comment; and [d] the collaterals for the loans were deficient. With regard
to the other petitioners, Ernesto Magboo and Herminio Alcasid, the information alleged that
their joint and several signatures and those of their spouses, in violation of the terms and
conditions of the loan, were not given.

In gist, the information would have it that petitioner Ingco should be made criminally liable for
the grant by the PNB of the loans to Cresta Monte under what had been so claimed as
"manifestly and grossly disadvantageous terms and conditions" to the bank's damage and
prejudice. Petitioner Ingco might have been a ranking official of PNB but, unassailably, he
neither had the title nor the authority to conclude and bind the bank to the questioned
transactions. Like any other corporate banking institution, PNB's affairs were directed and its
properties managed and preserved and its corporate powers exercised by its Board of
Directors.

Concomitantly, it was the President of the Bank who had the power and duty to execute all
contracts and to enter into all authorized transactions in behalf of the Bank. Ingco's role was
confined to a mere evaluation and study of the loan applications and thereafter to make his
report and give his recommendation to the Board of Directors. The Board certainly was under
no obligation or compulsion to approve and to favorably act on the recommendation.

It is probable, evident in retrospect, that Ingco has had a wrong appreciation of and even a poor
assessment on the loan application of Monte Cresta, but it is not much more than an error of
judgment. It would be hard to accept, let alone to render a firm verdict, that such an error, to
which all public officials are, at one time or another, susceptible of making in their years of
service to the government, would constitute the crime contemplated in Section 3(e), in relation
to Section 3(g), of R.A. No. 3019.

Neither of petitioners Magboo and Alcasid is a public officer. Independently of Ingco, they
cannot be prosecuted under the provisions of the law in question. The remedy of the PNB
against them would lie elsewhere.

WHEREFORE, the petition is GRANTED, and the questioned resolutions, dated 07 October 1993
and 08 November 1993, are hereby also SET ASIDE. No costs.