Khan, Jr. vs.

Office of the Ombudsman

G.R. No. 125296, July 20,2006

FACTS:

Private respondents Rosauro Torralba and Celestine Bandala charged petitioners before
the Deputy Ombudsman (Visayas) for violation of RA 3019. They accused petitioners of using their
positions in PAL to secure a contract for Synergy Service Corporation, a corporation engaged in
hauling and janitorial service in which they were shareholders.

Petitioners filed an omnibus motion to dismiss the complaint but in the resolution it was
dismiss by the Deputy Ombudsman.

Petitoners appealed the order to the ombudsman and raised the same issues but was
again dismiss by the Ombudsman.

Petition for certiorari, with prayer for issuance of a temporary restraining order, petitioners
assail the orders (July 13,1989 & February 22,1996), claiming that public respondents acted
without jurisdiction and/or grave abuse of discretion in proceeding with the investigation of the case
against them although they were officers of a private corporation and not public officers.

ISSUE:

WON public respondents Deputy Ombudsman have jurisdiction over petitioners Ismael G. Khan, Jr.
and Wenceslao L. Malabanan, former officers of the Philippines Airlines (PAL), for violation of RA
3019 (the Anti-Graft and Corruption Practice Act)

HELD:

No, according to the 1987 Constitution specifically Art.XI,Sec.13(2) stating the powers and
function of the Office of the Ombudsman The Office of the Ombudsman shall have the power, to
direct, upon complaint or at its own instance, any government-owned and controlled corporation
with original charter, to perform and expedite any act or duty required by law, or to stop, prevent,
and correct any abuse or impropriety in the performance of duties. The Office of the Ombudsman
exercises jurisdiction over public officials/employees of the government corporations, although the
government later on acquired the controlling interest in PAL, it did not have an original charter and
its officers/employees could not be investigated and/or prosecuted by the ombudsman.

The case Quimpo is not applicable to the case at bar because the government acquired
PETROPHIL to perform functions related to government programs and policies on oil. Its purpose
was for governmental functions certainly not the case with PAL where there was no governmental
functions at all were involved.
 The term government-owned or controlled corporations in the 1973 Constitution was
qualified by the 1987 Constitution to refer only to those with original charters. PAL being originally a
private corporation seeded by private capital and created under the general corporation law, does
not fall within the jurisdiction powers of the Ombudsman.

Petitioners as officers of PAL were not public officers. A public officer is an individual
invested with portion of the sovereign function of the government, to be exercised by him for the
benefit of the public. They are those endowed with the exercise of sovereign executive, legislative,
or judicial functions.

WHEREFORE, the petition is hereby GRANTED. Public respondents Deputy

Ombudsman (Visayas) and Office of the Ombudsman are restrained from proceeding with
the investigation or prosecution of the complaint against the petitioners for violation of RA
3019. Accordingly, their assailed orders of July 13,1989 and February 22,1996 respectively,
are SET ASIDE and ANNULLED.