VOL.

515,FEBRUARY8,2007 171
Bavieravs.Paglinawan

G.R.No.170602.February8,2007.*

MANUEL V. BAVIERA, petitioner, vs. STANDARD CHARTERED

BANK, BRYAN K. SANDERSON, THE RIGHT HONORABLE
LORD STEWARTBY, EVAN MERVYN DAVIES, MICHAEL
BERNARD DENOMA, CHRISTOPHER AVEDIS KELJIK,
RICHARD HENRY MEDDINGS, KAI NARGOLWALA, PETER
ALEXANDER SANDS, RONNIE CHI CHUNG CHAN, SIR CK
CHOW,BARRYCLARE,HOKWONPING,RUDOLPHHAROLD
PETER ARKHAM, DAVID GEORGE MOIR, HIGH EDWARD
NORTON, SIR RALPH HARRY ROBINS, ANTHONY WILLIAM
PAUL STENHAM (Standard Chartered Bank Chairman, Deputy
Chairman,andMembersoftheBoard),SHERAZAMMAZARI(Group
Regional Head for Consumer Banking), PAUL SIMON MORRIS,
AJAY KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES,
CHONA REYES, ELLEN VICTOR, RAMONA H. BERNAD,
DOMINGOCARBONELL,JR.,andZENAIDAIGLESIAS(Standard
CharteredBankPhilippinesBranchHeads/Officers),respondents.

Administrative Law Doctrine of Primary Jurisdiction Corporation

Law Securities Regulation Code Criminal Law A criminal charge for
violationoftheSecuritiesRegulationCodeisaspecializeddispute,hence,it
mustfirstbereferredtoanadministrativeagencyofspecialcompetence,i.e.,
theSecuritiesandExchangeCommission,andwherethecomplaintiscriminal
in nature, the Securities and Exchange Commission (SEC) shall endorse the
complaint to the Department of Justice for preliminary investigation and
prosecution.A criminal charge for violation of the Securities Regulation
Code is a specialized dispute. Hence, it must first be referred to an
administrative agency of special competence, i.e., the SEC. Under the
doctrine of primary jurisdiction, courts will not determine a controversy
involving a question within the jurisdiction of the administrative tribunal,
where the question demands the exercise of sound administrative discretion
requiring the specialized knowledge and expertise of said administrative
tribunal to determine technical and intricate matters of fact. The Securities
RegulationCodeisaspeciallaw.Itsenforcementisparticularlyvestedinthe
SEC.

172
172 SUPREMECOURTREPORTSANNOTATED

Bavieravs.Paglinawan

Hence,allcomplaintsforanyviolationoftheCodeanditsimplementingrules
andregulationsshouldbefiledwiththeSEC.Wherethecomplaintiscriminal
in nature, the SEC shall indorse the complaint to the DOJ for preliminary
investigation and prosecution as provided in Section 53.1 earlier quoted. We
thus agree with the Court of Appeals that petitioner committed a fatal
procedural lapse when he filed his criminal complaint directly with the DOJ.
Verily,nograveabuseofdiscretioncanbeascribedtotheDOJindismissing
petitionerscomplaint.

Criminal Procedure The mandate that all criminal actions, either

commenced by a complaint or information shall be prosecuted under the
direction and control of a public prosecutor, is founded on the theory that a
crimeisabreachofthesecurityandpeaceofthepeopleatlarge,anoutrage
against the very sovereignty of the State.Section 5, Rule 110 of the 2000
Rules of Criminal Procedure, as amended, provides that all criminal actions,
commenced by either a complaint or an information, shall be prosecuted
under the direction and control of a public prosecutor. This mandate is
founded on the theory that a crime is a breach of the security and peace of
the people at large, an outrage against the very sovereignty of the State. It
follows that a representative of the State shall direct and control the
prosecution of the offense. This representative of the State is the public
prosecutor,whomthisCourtdescribedintheoldcaseofSuarezv.Platon,80
Phil. 556 (1940) as: [T]he representative not of an ordinary party to a
controversy,butofasovereigntywhoseobligationtogovernimpartiallyisas
compellingasitsobligationtogovernatallandwhoseinterest,therefore,ina
criminal prosecution is not that it shall win a case, but that justice shall be
done.Assuch,heisinapeculiarandverydefinitesenseaservantofthelaw,
thetwofoldaimofwhichisthatguiltshallnotescapeorinnocencesuffers.

Same Preliminary Investigation Words and Phrases Probable

Cause, Defined A preliminary investigation is essentially an inquiry to
determinewhether(a)acrimehasbeencommitted,and,(b)whetherthereis
probable cause that the accused is guilty thereof.Concomitant with his
authority and power to control the prosecution of criminal offenses, the
public prosecutor is vested with the discretionary power to determine
whetheraprimafaciecaseexistsornot.Thisisdonethroughapreliminary
investigationdesignedtosecure

173

VOL.515,FEBRUARY8,2007 173
 Bavieravs.Paglinawan

the respondent from hasty, malicious and oppressive prosecution. A

preliminary investigation is essentially an inquiry to determine whether (a) a
crime has been committed and (b) whether there is probable cause that the
accused is guilty thereof. In Pontejos v. Office of the Ombudsman, 483
SCRA83(2006),probablecauseisdefinedassuchfactsandcircumstances
that would engender a wellfounded belief that a crime has been committed
andthattherespondentisprobablyguiltythereofandshouldbeheldfortrial.
Itisthepublicprosecutorwhodeterminesduringthepreliminaryinvestigation
whetherprobablecauseexists.Thus,thedecisionwhetherornottodismiss
thecriminalcomplaintagainsttheaccuseddependsonthesounddiscretionof
theprosecutor.

SameSameTheruleinthisjurisdictionisthatcourtswillnotinterfere
with the conduct of preliminary investigations or reinvestigations or in the
determination of what constitutes sufficient probable cause for the filing of
thecorrespondinginformationagainstanoffenderTheprosecutorsfindings
on the existence of probable cause are not subject to review by the courts,
unless these are patently shown to have been made with grave abuse of
discretion.Given this latitude and authority granted by law to the
investigating prosecutor, the rule in this jurisdiction is that courts will not
interferewiththeconductofpreliminaryinvestigationsorreinvestigationsor
in the determination of what constitutes sufficient probable cause for the
filing of the corresponding information against an offender. Courts are not
empoweredtosubstitutetheirownjudgmentforthatoftheexecutivebranch.
Differently stated, as the matter of whether to prosecute or not is purely
discretionaryonhispart,courtscannotcompelapublicprosecutortofilethe
corresponding information, upon a complaint, where he finds the evidence
beforehiminsufficienttowarrantthefilingofanactionincourt.Insum,the
prosecutors findings on the existence of probable cause are not subject to
reviewbythecourts,unlessthesearepatentlyshowntohavebeenmadewith
graveabuseofdiscretion.

Same Same In determining whether the Department of Justice

committedgraveabuseofdiscretion,itisexpedienttoknowifthefindingsof
fact of the public prosecutors were reached in an arbitrary or despotic
manner.Grave abuse of discretion is such capricious and whimsical
exerciseofjudgmentonthepartofthepublicofficer

174

174 SUPREMECOURTREPORTSANNOTATED

Bavieravs.Paglinawan
concernedwhichisequivalenttoanexcessorlackofjurisdiction.Theabuse
of discretion must be as patent and gross as to amount to an evasion of a
positivedutyoravirtualrefusaltoperformadutyenjoinedbylaw,ortoact
atallincontemplationoflaw,aswherethepowerisexercisedinanarbitrary
anddespoticmannerbyreasonofpassionorhostility.Indeterminingwhether
the DOJ committed grave abuse of discretion, it is expedient to know if the
findings of fact of herein public prosecutors were reached in an arbitrary or
despoticmanner.

PETITIONS for review on certiorari of the decisions of the Court of

Appeals.
ThefactsarestatedintheopinionoftheCourt.
Chavez, Miranda, Aseoche Law Offices for petitioner M.V.
Baviera.
Romulo, Mabanta, Buenaventura, Sayoc and Delos Angeles
forrespondents.

SANDOVALGUTIERREZ,J.:

Before us are two consolidated Petitions for Review on Certiorari

assailing
1
the Decisions of the Court of
2
Appeals in CAG.R. SP No.
87328 andinCAG.R.SPNo.85078.
The common factual antecedents of these cases as shown by the
recordsare:
ManuelBaviera,petitionerinthesecases,wastheformerheadofthe
HR Service Delivery and Industrial Relations of Standard Chartered
BankPhilippines (SCB), one of herein respondents. SCB is a foreign
bankingcorporationdulyli

_______________

1 Rollo, G.R. No. 168380, Vol. I, pp. 4862. Penned by Associate Justice
Remedios A. SalazarFernando and concurred in by Associate Justice Rosemarie
D.CarandangandAssociateJusticeMoninaArevaloZenarosa.
2 Id.,G.R. No. 170602, Vol. I, pp. 6373. Written by Associate Justice Juan Q.

Enriquez, Jr., with Associate Justice Portia AlioHormachuelos and Associate

JusticeVicenteQ.Roxas,concurring.

175

VOL.515,FEBRUARY8,2007 175
Bavieravs.Paglinawan

censed to engage in banking, trust, and other fiduciary business in the

Philippines.PursuanttoResolutionNo.1142datedDecember3,1992
oftheMonetaryBoardoftheBangkoSentralngPilipinas(BSP),the
conductofSCBsbusinessinthisjurisdictionissubjecttothefollowing
conditions:
 1. AttheendofaoneyearperiodfromthedatetheSCBstartsits
trustfunctions,atleast25%ofitstrustaccountsmustbeforthe
account of nonresidents of the Philippines and that actual
foreignexchangehadbeenremittedintothePhilippinestofund
such accounts or that the establishment of such accounts had
reduced the indebtedness of residents (individuals or
corporationsorgovernmentagencies)ofthePhilippinestonon
residents.Attheendofthesecondyear,theaboveratioshallbe
50%,whichratiomustbeobservedcontinuouslythereafter
2. ThetrustoperationsofSCBshallbesubjecttoallexistinglaws,
rulesandregulationsapplicabletotrustservices,particularlythe
creationofaTrustCommitteeand
3. Thebankshallinformtheappropriatesupervisingandexamining
departmentoftheBSPatthestartofitsoperations.

Apparently,SCBdidnotcomplywiththeaboveconditions.Instead,as
earlyas1996,itactedasastockbroker,solicitingfromlocalresidents
foreign securities called GLOBAL THIRD PARTY MUTUAL
FUNDS (GTPMF), denominated in US dollars. These securities were
not registered with the Securities and Exchange Commission (SEC).
These were then remitted outwardly to SCBHong Kong and SCB
Singapore.
SCBs counsel, Romulo Mabanta Buenaventura Sayoc and Delos
AngelesLawOffice,advisedthebanktoproceedwiththesellingofthe
foreignsecuritiesalthoughunregisteredwiththeSEC,undertheguiseofa
custodianship
3
agreement and should it be questioned, it shall invoke
Section72

_______________

3 SEC.72.Inadditiontotheoperationsspecificallyauthorizedelsewhereinthis

Act, banking institutions other than building and loan associations may perform
thefollowingservices:

176

176 SUPREMECOURTREPORTSANNOTATED
Bavieravs.Paglinawan
4
oftheGeneralBankingAct(RepublicActNo.337). Insum,SCBwas
able to sell GTPMF securities worth around P6 billion to some 645
investors.
However,SCBsoperationsdidnotremainunchallenged.OnJuly18,
1997,theInvestmentCapitalAssociationofthePhilippines(ICAP)filed
with the SEC5 a complaint alleging that SCB violated the Revised
Securities Act, particularly the provision prohibiting the selling of
securitieswithoutpriorregistrationwiththeSECandthatitsactionsare
potentiallydamagingtothelocalmutualfundindustry.
In its answer, SCB denied offering and selling securities, contending
thatithasbeenperformingapurelyinforma

_______________

a) Receive in custody funds, documents and valuable objects, and rent

safetydepositboxesforthesafeguardingofsucheffects
b) Actasfinancialagentandbuyandsell,byorderofandfortheaccountof
theircustomers,shares,evidencesofindebtednessandallothertypesof
securities
c) Make collections and payments for the account of others and perform
such other services for their customers as are not incompatible with
bankingbusiness
d) Upon prior approval of the Monetary Board, act as managing agent,
adviser, consultant or administrator of investment management
advisory/consultancyaccounts.

Thebanksshallperformtheservicespermittedundersubsections(a),(b),and
(c) of this section as depositaries or as agents. Accordingly they shall keep the
funds, securities and other effects which they thus receive duly separated and
apartfromthebanksownassetsandliabilities.
TheMonetaryBoardmayregulatetheoperationsauthorizedbythissectionin
ordertoinsurethatsaidoperationsdonotendangertheinterestofthedepositors
andothercreditorsofthebanks.
4 NowrepealedbyTheGeneralBankingLawof2000(RepublicActNo.8791).

5 Batas Pambansa Blg. 178. Now repealed by Republic Act No. 8799 (The
SecuritiesRegulationCode),whichtookeffectonJuly19.2000.

177

VOL.515,FEBRUARY8,2007 177
Bavieravs.Paglinawan

tional function without solicitations for any of its investment outlets

abroad that it has a trust license and the services it renders under the
Custodianship
6
Agreement for offshore investments are authorized by
Section 72 of the General Banking Act that its clients were the ones
whotooktheinitiativetoinvestinsecuritiesandithasbeenactingmerely
asanagentorpassiveordertakerforthem.
On September 2, 1997, the SEC issued a Cease and Desist 7
Order
8
againstSCB,holdingthatitsservicesviolatedSections4(a) and19 of
theRevisedSecuritiesAct.
Meantime, the SEC indorsed ICAPs complaint and its supporting
documentstotheBSP.
On October 31, 1997, the SEC informed the Secretary of Finance
thatitwithdrewGTPMFsecuritiesfromthemarketandthatitwillnotsell
thesamewithoutthenecessaryclearancesfromtheregulatoryauthorities.
Meanwhile, on August 17, 1998, the BSP directed SCB not to
include investments in global mutual funds issued abroad in its trust
investmentsportfoliowithoutpriorregistrationwiththeSEC.

_______________

6 Supraatfootnote3.

7 SEC.4.Requirementofregistrationofsecurities.(a)Nosecurities,exceptof

aclassexemptunderanyoftheprovisionsofSectionfivehereoforunlesssoldin
anytransactionexemptunderanyoftheprovisionsofSectionsixhereofshallbe
soldorofferedforsaleordistributiontothepublicwithinthePhilippinesunless
suchsecuritiesshallhavebeenregisteredandpermittedtobesoldashereinafter
provided.
8 SEC.19.Registrationofbrok ers,dealersandsalesmen.Nobroker,dealeror

salesman shall engage in business in the Philippines as such broker, dealer or

salesman or sell any securities, including securities exempted under this Act,
exceptinexempttransactions,unlesshehasbeenregisteredasabroker,dealer,or
salesmanpursuanttotheprovisionsofthisSection.

178

178 SUPREMECOURTREPORTSANNOTATED
Bavieravs.Paglinawan

OnAugust31,1998,SCBsentalettertotheBSPconfirmingthatitwill
withdrawthirdpartyfundproductswhichcouldbedirectlypurchasedby
investors.
However, notwithstanding its commitment and the BSP directive,
SCB continued to offer and sell GTPMF securities in this country. This
prompted petitioner to enter into an Investment Trust Agreement with
SCB wherein he purchased US$8,000.00 worth of securities upon the
bankspromiseof40%returnonhisinvestmentandaguaranteethathis
moneyissafe.Aftersix(6)months,however,petitionerlearnedthatthe
valueofhisinvestmentwentdowntoUS$7,000.00.Hetriedtowithdraw
hisinvestmentbutwaspersuadedbyAntonettedelosReyesofSCBto
holdontoitforanothersix(6)monthsinviewofthepossibilitythatthe
marketwouldpickup.
Meanwhile,onNovember27,2000,theBSPfoundthatSCBfailed
to comply with its directive of August 17, 1998. Consequently, it was
finedintheamountofP30,000.00.
The trend in the securities market, however, was bearish and the
worthofpetitionersinvestmentwentdownfurthertoonlyUS$3,000.00.
On October 26, 2001, petitioner learned from Marivel Gonzales,
headoftheSCBLegalandComplianceDepartment,thatthelatterhad
been prohibited by the BSP to sell GPTMF securities. Petitioner then
filedwiththeBSPalettercomplaintdemandingcompensationforhislost
investment.ButSCBdeniedhisdemandonthegroundthathisinvestment
isregular.
On July 15, 2003, petitioner filed with the Department of Justice
(DOJ), represented herein by its prosecutors, public respondents, a
complaint charging the abovenamed officers and members of the SCB
Board of Directors and other SCB officials, private respondents, with
syndicatedestafa,docketedasI.S.No.20031059.
For their part, private respondents filed the following as counter
chargesagainstpetitioner:(1)blackmailandextor
179

VOL.515,FEBRUARY8,2007 179
Bavieravs.Paglinawan

tion, docketed as I.S. No. 20031059A and blackmail and perjury,

docketedasI.S.No.20031278.
OnSeptember29,2003,petitioneralsofiledacomplaintforperjury
against private respondents Paul Simon Morris and Marivel Gonzales,
docketedasI.S.No.20031278A.
On December 4, 2003, the SEC issued a Cease and Desist Order
against SCB restraining it from further offering, soliciting, or otherwise
sellingitssecuritiestothepublicuntilthesehavebeenregisteredwiththe
SEC.
Subsequently,theSECandSCBreachedanamicablesettlement.
OnJanuary20,2004,theSEClifteditsCeaseandDesistOrderand
approved the P7 million settlement offered by SCB. Thereupon, SCB
made a commitment not to offer or sell securities without prior
compliancewiththerequirementsoftheSEC.
On February 7, 2004,
9
petitioner filed with the DOJ a complaint for
violationofSection8.1 oftheSecuritiesRegulationCodeagainstprivate
respondents,docketedasI.S.No.2004229. 10
On February 23, 2004, the DOJ rendered its Joint Resolution
dismissingpetitionerscomplaintforsyndicatedestafainI.S.No.2003
1059privaterespondentscomplaintforblackmailandextortioninI.S.
No. 20031059A private respondents complaint for blackmail and
perjury in I.S. No. 20031278 and petitioners complaint for perjury
against

_______________

9 Sec.8.RequirementofRegistrationofSecurities:

8.1. Securities shall not be sold or offered for sale or distribution within the Philip p ines,
withoutaregistrationstatementduly filedwithandap p rovedby theCommission.Priorto
such sale, information on the securities, in such form and with such substance as the
Commissionmay p rescribe,shallbemadeavailabletoeachp rosp ectivep urchaser.

10 Vol.I,Rollo,G.R.No.170602,pp.451473.
 180

180 SUPREMECOURTREPORTSANNOTATED
Bavieravs.Paglinawan

privaterespondentsMorrisandGonzalesinI.S.No.20031278A.
11
Meanwhile,inaResolution datedApril4,2004,theDOJdismissed
petitioners complaint in I.S. No. 2004229 (violation of Securities
RegulationCode),holdingthatitshouldhavebeenfiledwiththeSEC.
Petitioners motions to dismiss his complaints were denied by the
DOJ. Thus, he filed with the Court of Appeals a petition for certiorari,
docketed as CAG.R. SP No. 85078. He alleged that the DOJ acted
withgraveabuseofdiscretionamountingtolackorexcessofjurisdiction
indismissinghiscomplaintforsyndicatedestafa.
He also filed with the Court of Appeals a separate petition for
certiorariassailingtheDOJResolutiondismissingI.S.No.2004229for
violationoftheSecuritiesRegulationCode.Thispetitionwasdocketedas
CAG.R. SP No. 87328. Petitioner claimed that the DOJ acted with
graveabuseofdiscretiontantamounttolackorexcessofjurisdictionin
holdingthatthecomplaintshouldhavebeenfiledwiththeSEC.
OnJanuary7,2005,theCourtofAppealspromulgateditsDecision
dismissing the petition. It sustained the ruling of the DOJ that the case
shouldhavebeenfiledinitiallywiththeSEC.
Petitioner filed a motion for reconsideration but it was denied in a
ResolutiondatedMay27,2005.
Meanwhile,onFebruary21,2005,theCourtofAppealsrenderedits
DecisioninCAG.R.SPNo.85078(involvingpetitionerschargesand
respondentscountercharges)dismissingthepetitiononthegroundthat
the purpose of a petition for certiorari is not to evaluate and weigh the
partiesevidencebuttodeterminewhethertheassailedResolutionofthe
DOJ was issued with grave abuse of discretion tantamount to lack of
jurisdiction.Again,petitionermovedfora

_______________

11 Vol.I,Rollo,G.R.No.168380,pp.24143.

181

VOL.515,FEBRUARY8,2007 181
Bavieravs.Paglinawan

reconsiderationbutitwasdeniedinaResolutionofNovember22,2005.
Hence,theinstantpetitionsforreviewoncertiorari.
For our resolution is the fundamental issue of whether the Court of
AppealserredinconcludingthattheDOJdidnotcommitgraveabuseof
discretion in dismissing petitioners complaint in I.S. 2004229 for
violation of Securities Regulation Code and his complaint in I.S. No.
20031059forsyndicatedestafa.

G.R.No168380Re:I.S.No.2004229
ForviolationoftheSecuritiesRegulationCode

Section53.1oftheSecuritiesRegulationCodeprovides:

SEC.53.Investigations,InjunctionsandProsecutionofOffenses.
53.1.TheCommissionmay,initsdiscretion,makesuchinvestigationas
itdeemsnecessarytodeterminewhetheranypersonhasviolatedorisabout
toviolateanyprovisionofthisCode,anyrule,regulationororderthereunder,
oranyruleofanExchange,registeredsecuritiesassociation,clearingagency,
otherselfregulatoryorganization,andmayrequireorpermitanypersontofile
with it a statement in writing, under oath or otherwise, as the Commission
shalldetermine,astoallfactsandcircumstancesconcerningthemattertobe
investigated. The Commission may publish information concerning any such
violations and to investigate any fact, condition, practice or matter which it
maydeemnecessaryorpropertoaidintheenforcementoftheprovisionsof
this Code, in the prescribing of rules and regulations thereunder, or in
securinginformationtoserveasabasisforrecommendingfurtherlegislation
concerning the matters to which this Code relates: Provided,however, That
any person requested or subpoenaed to produce documents or testify in any
investigationshallsimultaneouslybenotifiedinwritingofthepurposeofsuch
investigation:Provided,further,Thatallcriminalcomplaintsforviolationsof
thisCodeandtheimplementingrulesandregulationsenforcedoradministered
bytheCommissionshallbereferredtotheDepartment

182

182 SUPREMECOURTREPORTSANNOTATED
Bavieravs.Paglinawan

of Justice for preliminary investigation and prosecution before the proper

court: Provided, furthermore, That in instances where the law allows
independent civil or criminal proceedings of violations arising from the act,
the Commission shall take appropriate action to implement the same:
Provided,finally,Thattheinvestigation,prosecution,andtrialofsuchcases
shallbegivenpriority.

The Court of Appeals held that under the above provision, a criminal
complaintforviolationofanylaworruleadministeredbytheSECmust
firstbefiledwiththelatter.IftheCommissionfindsthatthereisprobable
cause,thenitshouldreferthecasetotheDOJ.Sincepetitionerfailedto
comply with the foregoing procedural requirement, the DOJ did not
gravelyabuseitsdiscretionindismissinghiscomplaintinI.S.No.2004
229.
AcriminalchargeforviolationoftheSecuritiesRegulationCodeisa
specialized dispute. Hence, it must first be referred to an administrative
agency of special competence, i.e., the SEC. Under the doctrine of
primary jurisdiction, courts will not determine a controversy involving a
question within the jurisdiction of the administrative tribunal, where the
question demands the exercise of sound administrative discretion
requiring the specialized knowledge and expertise of said administrative
12
tribunal to determine technical and intricate matters of fact. The
SecuritiesRegulationCodeisaspeciallaw.Itsenforcementisparticularly
vested in the SEC. Hence, all complaints for any violation of the Code
anditsimplementingrulesandregulationsshouldbefiledwiththeSEC.
Where the complaint is criminal in nature, the SEC shall indorse the
complaint to the DOJ for preliminary investigation and prosecution as
providedinSection53.1earlierquoted.

_______________

12 Saavedra, Jr. v. Securities and Exchange Commission, G.R. No. 80879,

March 21, 1988, 159 SCRA 57, 62, citing Pambujan Sur United Mine Work ers v.
SamarMiningCo.,Inc.,94Phil.932(1954).

183

VOL.515,FEBRUARY8,2007 183
Bavieravs.Paglinawan

WethusagreewiththeCourtofAppealsthatpetitionercommittedafatal
procedural lapse when he filed his criminal complaint directly with the
DOJ.Verily,nograveabuseofdiscretioncanbeascribedtotheDOJin
dismissingpetitionerscomplaint.

G.R.No.170602Re:I.S.No.20031059for
SyndicatedEstafa

Section 5, Rule 110 of the 2000 Rules of Criminal Procedure, as

amended, provides that all criminal actions, commenced by either a
complaintoraninformation,shallbeprosecutedunderthedirectionand
controlofapublicprosecutor.Thismandateisfoundedonthetheorythat
acrimeisabreachofthesecurityandpeaceofthepeopleatlarge,an
outrage against the very sovereignty of the State. It follows that a
representativeoftheStateshalldirectandcontroltheprosecutionofthe
13
offense. ThisrepresentativeoftheStateisthepublicprosecutor,whom
14
thisCourtdescribedintheoldcaseofSuarezv.Platon, as:

[T]he representative not of an ordinary party to a controversy, but of a

sovereignty whose obligation to govern impartially is as compelling as its
obligation to govern at all and whose interest, therefore, in a criminal
prosecution is not that it shall win a case, but that justice shall be done. As
such, he is in a peculiar and very definite sense a servant of the law, the
twofoldaimofwhichisthatguiltshallnotescapeorinnocencesuffers.

Concomitant with his authority and power to control the prosecution of

criminal offenses, the public prosecutor is vested with the discretionary
15
power to determine whether a primafacie case exists or not. This is
donethroughapre

_______________

13 Tan,Jr.v.Gallardo,G.R.Nos.4121314,October5,1976,73SCRA306,310.

14 80Phil.556(1940).

15 Zuluetav.Nicolas,102Phil.944(1958).

184

184 SUPREMECOURTREPORTSANNOTATED
Bavieravs.Paglinawan

liminary investigation designed to secure the respondent from hasty,

malicious and oppressive prosecution. A preliminary investigation is
essentially an inquiry to determine whether (a) a crime has been
committed and 16
(b) whether there is probable cause that the17accused is
guilty thereof. In Pontejos v. Office of the Ombudsman, probable
causeisdefinedassuchfactsandcircumstancesthatwouldengendera
wellfounded belief that a crime has been committed and that the
respondentisprobablyguiltythereofandshouldbeheldfortrial.Itisthe
public prosecutor who determines during the preliminary investigation
whether probable cause exists. Thus, the decision whether or not to
dismissthecriminalcomplaintagainsttheaccuseddependsonthesound
discretionoftheprosecutor.
Given this latitude and authority granted by law to the investigating
prosecutor,theruleinthisjurisdictionisthatcourtswillnotinterferewith
the conduct of preliminary investigations or reinvestigations or in the
determinationofwhatconstitutessufficientprobablecauseforthefilingof
18
the corresponding information against an offender. Courts are not
empowered19
to substitute their own judgment for that of the executive
branch. Differentlystated,asthematterofwhethertoprosecuteornot
is purely discretionary on his part, courts cannot compel a public
prosecutortofilethecorrespondinginformation,uponacomplaint,where
he finds the evidence before him insufficient to warrant the filing of an
actionincourt.Insum,the

_______________

16 Chingv.SecretaryofJustice,G.R.No.164317, February 6, 2006, 481SCRA

609.
17 G.R.Nos.15861314,February22,2006,483SCRA83,92.

18 Glaxosmithk line Philippines, Inc. v. Malik and Ateeque, G.R. No. 166824,
August 17, 2006, 499 SCRA 268, 272273, citing Punzalan v. Dela Pea and
Cagara,434SCRA601(2004).
19 Alcarazv.Gonzales,G.R.No.164715,September20,2006,502SCRA518,529,

citingMetropolitanBank andTrustCompanyv.Tonda,392 Phil. 797338 SCRA

254(2000).

185

VOL.515,FEBRUARY8,2007 185
Bavieravs.Paglinawan

prosecutorsfindingsontheexistenceofprobablecausearenotsubject
to review by the courts, unless these
20
are patently shown to have been
madewithgraveabuseofdiscretion.
Graveabuseofdiscretionissuchcapriciousandwhimsicalexerciseof
judgmentonthepartofthepublicofficerconcernedwhichisequivalent
to an excess or lack of jurisdiction. The abuse of discretion must be as
patentandgrossastoamounttoanevasionofapositivedutyoravirtual
refusaltoperformadutyenjoinedbylaw,ortoactatallincontemplation
of law, as where the power is exercised21
in an arbitrary and despotic
mannerbyreasonofpassionorhostility.
IndeterminingwhethertheDOJcommittedgraveabuseofdiscretion,
itisexpedienttoknowifthefindingsoffactofhereinpublicprosecutors
werereachedinanarbitraryordespoticmanner.
TheCourtofAppealsheldthatpetitionersevidenceisinsufficientto
establishprobablecauseforsyndicatedestafa.Thereisnoshowingfrom
the recordthatprivate respondents herein did induce petitioner byfalse
representationstoinvestintheGTPMFsecurities.Nordidtheyactasa
syndicatetomisappropriatehismoneyfortheirownbenefit.Rather,they
invested it in accordance with his written instructions. That he lost his
investmentisnottheirfaultsinceitwashighlyspeculative.
Recordsshowthatpublicrespondentsexaminedpetitionersevidence
with care, well aware of their duty to prevent material damage to his
constitutionalrighttolibertyandfairplay.InSuarezpreviouslycited,this
Courtmadeitclearthatapublicprosecutorsdutyistwofold.Onone
hand,heis

_______________

20 Glaxosmithk linePhilippines,Inc.v.Malik andAteeque,supra,p.273,citing

Cabalingv.People,376SCRA113(2002).
21 Soriav.Desierto,G.R.Nos.15352425,January31,2005,450SCRA339.345,

citing Duero v. Court of Appeals, 373 SCRA 11 (2002), Perez v. Office of the
Ombudsman,429SCRA357(2004).

186

186 SUPREMECOURTREPORTSANNOTATED
 Bavieravs.Paglinawan

boundbyhisoathofofficetoprosecutepersonswherethecomplainants
evidenceisampleandsufficienttoshowprimafacieguiltofacrime.Yet,
ontheotherhand,heislikewisedutyboundtoprotectinnocentpersons
22
fromgroundless,false,ormaliciousprosecution.
Hence,weholdthattheCourtofAppealswascorrectindismissing
thepetitionforreviewagainstprivaterespondentsandinconcludingthat
theDOJdidnotactwithgraveabuseofdiscretiontantamounttolackor
excessofjurisdiction.
On petitioners complaint for violation of the Securities Regulation
Code,sufficeittostatethat,asaptlydeclaredbytheCourtofAppeals,
he should have filed it with the SEC, not the DOJ. Again, there is no
indication here that in dismissing petitioners complaint, the DOJ acted
capriciouslyorarbitrarily.
WHEREFORE, we DENY the petitions and AFFIRM the assailed
Decisions of the Court of Appeals in CAG.R. SP No. 87328 and in
CAG.R.SPNo.85078.Costsagainstpetitioner.
SOORDERED.

Puno(C.J.,Chairperson),AzcunaandGarcia,JJ.,concur.
Corona,J.,OnLeave.

Petitionsdenied,assaileddecisionsaffirmed.

Notes.Even assuming that partylist representatives comprise a

sufficientnumberandhaveagreedtodesignatecommonnomineestothe
HRETandtheCA,theirprimaryrecourseclearlyrestswiththeHouseof
RepresentativesandnotwiththeSupremeCourt.Underthedoctrineof
primaryjurisdiction,priorrecoursetotheHouseofRepresentativesis

_______________

22 Vda.deBagatuav.RevillaandLombos,104Phil.392(1958).

187

VOL.515,FEBRUARY8,2007 187
Peoplevs.Nicolas

necessary before petitioners may bring the instant case to the court.
(Pimentel, Jr. vs. House of Representatives Electoral Tribunal, 393
SCRA227[2002])
Thedoctrineofprimaryjurisdictionprecludesacourtfromarrogating
unto itself the authority to resolve a controversy the jurisdiction over
which is initially lodged with an administrative body of special
competence.(Galavs.ElliceAgroIndustrialCorporation,418SCRA
431[2003])
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