G.R. No.

155996               June 27, 2012

PCGG CHAIRMAN MAGDANGAL B. ELMA and PRESIDENTIAL COMMISSION ON GOOD

GOVERNMENT, Petitioners,
vs.
REINER JACOBI, CRISPIN REYES, MA. MERCEDITAS N. GUTIERREZ, in her capacity as
Undersecretary of the Department of Justice, Respondents.

DECISION

BRION, J.:

Before the Court is a petition for certiorari under Rule 65 filed by the Presidential Commission on
Good Government (PCGG) and its former Chairman Magdangal Elma (petitioners) questioning the
1 

resolutions, dated July 17, 2002 and September 20, 2002, of then Undersecretary of Justice Ma.
2  3 

Merceditas N. Gutierrez. The assailed resolutions dismissed the petitioners’ petition for review,
denied the petitioners’ motion for reconsideration and ultimately ruled that no probable cause for
falsification and use of falsified document existed against Atty. Crispin Reyes and Reiner Jacobi
(respondents).

ANTECEDENTS

The records show that on two occasions - evidenced by the December 22, 1988 and May 6, 1991
letters - then PCGG Commissioner, and later Chairman, David M. Castro, purportedly acting for the
4 

PCGG, agreed to pay Jacobi a fee of ten percent (10%) of any amount actually recovered and
legally turned over to the Republic of the Philippines from the ill-gotten wealth of Ferdinand E.
Marcos and/or his family, associates, subordinates and cronies, based on the information and
evidence that Jacobi would furnish the PCGG. Chairman Castro sent another letter dated December
19, 1991 to Jacobi confirming "that actual recovery [of] the Kloten gold account managed by Union
Bank of Switzerland (UBS) subject of [Jacobi’s] information and other efforts done will be properly
compensated as previously committed." We shall collectively refer to these letters as "PCGG
5 

letters."

A few years later, a similar letter dated August 27, 1998 (De Guzman letter) was sent by the new
PCGG Chairman, Felix M. de Guzman, to Jacobi, confirming the PCGG’s promise (as contained in
the PCGG letters) to pay Jacobi and his intelligence group a 10% fee for the US$13.2 billion ill-
gotten wealth of Former President Ferdinand E. Marcos, his family, trustee or fronts in UBS still/now
being claimed and recovered by the Philippine Government. The De Guzman letter reads in full: 6

27 August 1998

Mr. Reiner Jacobi

c/o Business Center
JW Marriott Hotel, Hong Kong

Care: Counsel Crispin T. Reyes

Dear Mr. Jacobi:

I refer to the letters dated 22 December 1988, 6 May 1991 and 19 December 1991 addressed to you
from Mr. David M. Castro, former Chairman of the PCGG, copy (sic) for ready reference.
I hereby confirm the agreement of the PCGG to pay you/your group a ten (10%) percent fee of the
US$13.2 Billions ill-gotten wealth, unexplained or hidden deposits/assets of former President
Ferdinand E. Marcos, his family, trustees or fronts in Union Bank of Switzerland, still/now being
claimed and recovered by the Philippine government which is being assisted/facilitated/realized by
their identification as a result of the findings, information and evidence supplied by you/your group to
the PCGG that is otherwise not known to the Commission from other sources nor previously and
voluntarily disclosed by the Marcoses, their trustees, associates or cronies.

Very truly yours,

FOR THE COMMISSION:

[Signed]
FELIX M. DE GUZMAN [Countersigned by Director Danilo Daniel]
Chairman
FMG/lai 7

d01 8

a. The Sandiganbayan petition

On March 8, 1999, the respondents filed with the Sandiganbayan a verified Petition for Mandamus,
Prohibition and Certiorari (with Prayer for a Writ of Preliminary Mandatory and Prohibitory
Injunction) (Sandiganbayan petition) against the petitioners (docketed as Civil Case No. 006). Atty.
9 

Reyes acted as Jacobi’s counsel. Jacobi did not sign or verify the petition.

The contents of the PCGG letters and the De Guzman letter, among others, were substantially
reproduced in the Sandiganbayan petition and were attached as annexes. (The De Guzman letter
was attached as Annex E). Likewise attached (as Annex G), was a June 24, 1998 letter from PCGG
Chairman Magtanggol Gunigundo (Gunigundo letter), seeking judicial assistance from the Swiss
Ministry of Justice and the Police of Switzerland regarding Marcos-related accounts in UBS. 10

The Sandiganbayan petition began with the alleged commitment of the PCGG to Jacobi (and his
group, including Atty. Reyes ) - as contained in the PCGG letters and the De Guzman letter. It also
11 

cited the reports submitted by Jacobi’s group to the PCGG detailing their ill-gotten- wealth-recovery
12 

efforts and services, as well as their follow-up letters to the government to press for the UBS
13 

account. They alleged that due to their persistence, the PCGG (through Chairman Gunigundo and
Chairman De Guzman) made an official request to the Swiss Ministry of Justice to freeze the
14 

US$13.2 billion UBS account (as of August 25, 1998 ) in the name of Irene Marcos Araneta, alias "I.
15 

Araneta" (UBS account). They claimed that the UBS itself admitted the existence of this account,
16 

and only denied that the account is owned in any way by the Marcoses. 17

The Sandiganbayan petition also strongly questioned Chairman Elma’s appointment and
18 

reappointment of two Swiss "Trojan Horses" lawyers (Peter Cosandey and Martin Kurer) who had
been allegedly blocking the government’s efforts to recover the UBS account by secretly working for
the UBS. It alleged that Chairman Elma was working with these Swiss lawyers to frustrate the
19 

PCGG and its recovery efforts. Specifically, it alleged that:

In not revoking the re-appointment of Martin Kurer as PCGG lawyer despite the honest and sincere
suggestions, pleadings and demands by [Atty. Reyes]; in not pursuing the great efforts of the
Philippine government through Ambassador Tomas T. Syquia to have the account frozen; in
appointing, allowing and in fact abetting Martin Kurer who is associated (sic) and conspiring with
Peter Cosandey in blocking the recovery of said account; [Chairman Elma] has shown beyond
reasonable doubt that he has a personal agenda and is unusually interested in protecting [the UBS
account] for another person or persons, other than the Filipino people. 20

The Sandiganbayan petition prayed:

AFTER NOTICE AND HEARING, to declare the re-appointment of Swiss lawyer Martin Kurer and
Peter Cosandey as having been issued in grave abuse of discretion and highly prejudicial to the
interests of the Philippine Government and the Filipino people and therefore null and void; to order
[Chairman Elma and PCGG] to perform their mandated duty to recover [the UBS account] for the
Filipino people; and to sentence [Chairman Elma] to pay [Atty. Reyes and Jacobi] actual damages
that may be proved during the trial; xxx

On March 15, 1999, Atty. Reyes, through the Anti-Graft League of the Philippines, Inc. (AGLP), filed
a complaint with a similar thrust against Chairman Elma with the Office of the Ombudsman
(Ombudsman complaint). Atty. Reyes attached the Sandiganbayan petition (together with its
21 

annexes) to this complaint. Atty. Reyes alleged that Chairman Elma’s (i) reappointment of Martin
22 

Kurer, despite official information that he had been secretly working for UBS, and (ii) failure to follow-
up the PCGG’s previous official requests to the Swiss authorities were obvious violations of the
provisions of Republic Act No. 3019. 23

Later, Atty. Reyes filed an Urgent Manifestation with the Sandiganbayan, withdrawing the De
24 

Guzman letter and the Gunigundo letter as annexes of the Sandiganbayan petition. A similar
manifestation was filed with the Office of the Ombudsman regarding the Ombudsman
complaint. Atty. Reyes explained that he had been prompted to withdraw these letters after he
25 

learned of reports questioning the authenticity of these documents. Atty. Reyes asserted that Jacobi
had nothing to do with the preparation nor with the attachment of these letters to the Sandiganbayan
petition and to the Ombudsman complaint; thus -

Annex "E" of the [Sandiganbayan Petition] is [the De Guzman letter] which was previously shown to
[Chairman de Guzman] by [Atty. Reyes] before it was used as an annex and he stated that the
statements therein appear to be in the document he has signed. xxx

[Jacobi] had absolutely nothing to do about this Annex "E"

xxx

At any rate, this questionable document is merely a restatement of PCGG Chairman Castro’s
commitment to Mr. Jacobi which is still perfectly binding and enforceable xxx and, further, it is
absolutely immaterial to the main issue in this case.

Hence, this document marked Annex "E" of the [Sandiganbayan Petition] should be withdrawn, as it
is now hereby withdrawn xxx, from the records of this case.

Further, [Atty.] Reyes has also carefully examined… Annex "G" of the [Sandiganbayan] Petition. He
asked first for a copy of this document sent to Ambassador Syquia in Switzerland but he was
informed that there is no copy in PCGG records. Afterwards, a copy of the document was provided
by a PCGG insider and this is now marked as Annex "G"… Again, [Jacobi] had nothing to do with
this document marked as Annex "G".
[Atty.] Reyes has also carefully examined this document and found that while the statements therein
appear authentic, however, upon closer examination, it seems that the signature thereunder is not
the signature in the original signed by [Chairman Gunigundo] xxx.

Hence, this Annex "G" should be likewise withdrawn…

xxx

If [respondents], particularly counsel Reyes, had known from the very beginning that these
documents are questionable and not trustworthy, of course, they will never use them in this case for
purposes of recovering Marcos UBS account of $13.2 Billions (sic) by PCGG for the people of the
Philippines.

And whenever there is anything wrong or questionable, [respondents] will not hesitate to and will
immediately inform the [Sandiganbayan] accordingly, as, in fact, they are doing now, and it is their
desire to deal with all candor, fairly and honestly, with [the Sandiganbayan] and all courts of the land.
[italics in the original]

b. The PCGG’s reaction

The attachment, as annexes, of the De Guzman letter to the Sandiganbayan petition and to the
Ombudsman complaint elicited a legal response from the PCGG. Based on the affidavits executed
by Chairman De Guzman, Director Danilo Daniel of the Finance and Administration Department of
26 

the PCGG, and Lilia Yanga, what appears as their signatures and initials at the bottom of the De
27  28 

Guzman letter actually pertain to their signatures and initials affixed to another letter (dated August
25, 1998) sent by Chairman De Guzman to the Philippine Ambassador to Switzerland, Tomas
Syquia. This August 25, 1998 letter, however, had nothing to do with any contingency agreement
29 

with Jacobi and/or Atty. Reyes. Lourdes Magno, a Records Officer, and Sisa Lopez also executed
30  31 

affidavits stating that the PCGG has no record of the De Guzman letter. All of these affiants were
then PCGG employees.

In a March 17, 1999 resolution (PCGG resolution), the PCGG stated that the De Guzman letter
32 

does not exist in its records. Chairman De Guzman himself denied any participation in the
33 

preparation of this letter, and said:

34

In connection with Civil Case No. 006 xxx the declaration of Director Danilo R.B. Daniel that the
contents [of the De Guzman letter] is not authentic is hereby confirmed it appearing that the records
of the PCGG bearing on the alleged letter indicates that the signature of the undersigned and the
initials of Dir. Daniel written thereof refers to a letter addressed to Ambassador Tomas Syquia dated
August 25, 1998 and not to the [De Guzman letter addressed] to Mr. Jacobi. [emphasis added]

The PCGG resolution also stated that a Swiss official already denied the existence of the US$13.2
35 

billion UBS account claimed by Jacobi. Ultimately, the PCGG resolved to (i) declare Jacobi’s
arrangement with then Chairman Castro as non-binding and inexistent, and (ii) authorize Chairman
Elma to file appropriate civil and criminal charges against the respondents. 36

In a March 16, 1999 report of the National Bureau of Investigation (NBI), the latter confirmed that the
De Guzman letter was a falsified document as the questioned signatures and entries therein "were
lifted/extracted probably from the original and/or xerox copy" of the August 25, 1998 letter
37 

addressed to Ambassador Syquia.

c. Criminal Complaint

On March 22, 1999, Chairman Elma filed an affidavit-complaint with the Department of Justice
38 

(DOJ), charging the respondents with falsification and with use of falsified document (under Article
171, paragraph 2 and Article 172, paragraphs. 1 and 3 of the Revised Penal Code). The petitioners
attached to the complaint the NBI report and the affidavits of the PCGG employees. 39

On April 5, 1999, Atty. Reyes and the AGLP filed a criminal complaint with the Office of the
40 

Ombudsman against Director Daniel (Daniel Complaint) for his alleged "traitorous mission for [UBS]
and [the] Marcoses against the interest of the Philippine government." The complaint stated the
41 

following particulars surrounding the Gunigundo letter and the De Guzman letter:

Atty. Reyes also informed [Dir. Daniel] that [Atty. Reyes] requested [the] PCGG record section for a
copy of [the Gunigundo letter]… but he was told they had no copy in their records.

And regarding the missing [De Guzman] letter, the statement in the affidavits of [the PCGG
employees] that there is neither a copy of Chairman de Guzman’s letter… is not surprising and
confirms [that] important documents are usually missing.

xxx

Further, about middle of September, 1998, Atty. Reyes again visited [Dir. Daniel] xxx and xxx
inquired about [the] Gunigundo letter… and the [De Guzman] letter… to Reiner Jacobi [which]
merely restated what former PCGG Chairman David Castro committed to Reiner Jacobi. The PCGG
record section said it has no copy. And xxx [Dir. Daniel] said that he will check his records and give
copies if available in his file.

Some days thereafter, again [Atty. Reyes] visited [Dir.] Daniel and he gave me xerox copy of [the]
Gunigundo letter… (marked Annex "G" [of the Sandiganbayan] Petition…) xxx and [Chairman] De
Guzman’s letter… (marked Annex "E" [of the Sandiganbayan] Petition...

I never knew then that xxx [Dir.] Daniel has been working for the Marcoses and UBS in conspiracy
with Swiss "Trojan Horse" Martin Kurer

against the Philippine government. And I learned about it only recently. Hence, before I did not
bother to check the trustworthiness of these documents which he gave me and which I believed all
along to be authentic until my attention was called by negative press reports on this [De Guzman
letter].

But, on the very day I read negative press reports on the authenticity of [Chairman] De Guzman’s
letter xxx, I realized that the two documents (Gunigundo’s letter of June 24th and De Guzman’s letter
of Aug. 27th) given to me by [Dir.] Daniel must have been falsified. xxx

Accordingly, on the same day, Atty. Reyes formally withdrew these two documents marked Annexes
"E" and "G" of the PETITION in Sandiganbayan Case No. 006 xxx from the record of the case. 42

Atty. Reyes imputed the falsification to Director Daniel and claimed good faith in annexing the De
Guzman letter to the Sandiganbayan petition; thus -

[Dir. Daniel] had the means and opportunity to create the [De Guzman letter] which confirmed
PCGG’s contingency fee agreement with Jacobi. [Dir.] Daniel had initialed the letter dated August
25, 1998. It has subsequently been discovered by the NBI that the signatures and initialing of the
genuine letter dated 25 August 1998 have been transposed onto the forged [De Guzman] letter.

Because [Dir.] Daniel had access to the letter dated 25 August 1998, he was in the best position to
forge the [De Guzman] letter. The NBI has stated that the [De Guzman] letter… was a very crude
forgery. Indeed, it is now clear that this was such a crude forgery that it was designed to be
discovered. Likewise, [Dir.] Daniel had access to Gunigundo’s letter of June 19, 1996, hence, he
was also in the best position to forge said [Gunigundo] letter of June 24, 1998 which is also a crude
forgery.

xxxx

In contrast, Jacobi and Reyes have no motive in creating a forged contingency fee agreement
because Jacobi already has a binding agreement with the Philippine government. Indeed, their
subsequent conduct contradicts any suggestion of guilty knowledge. In good faith, they attached the
[De Guzman letter] in their Petition filed against Chairman Elma and the PCGG with the
Sandiganbayan wherein recovery of $13.2 Billion from UBS is the main issue. It is ludicrous to
suggest that Jacobi and Reyes would create a crude forgery and then produce it in contentious court
proceedings when such a forgery is unnecessary to their case and is easily discoverable. Verily, the
obvious forger is [Dir.] Daniel of the PCGG. 43

Atty. Reyes filed his counter-affidavit, adopting the explanation and allegations contained in his
44 

Urgent Manifestation and in the Daniel Complaint in pleading for the dismissal of the criminal case.

For his part, Jacobi, through Atty. Cynthia Peñalosa, denied any participation in the falsification of
the De Guzman letter. He explained:

8. I was informed by [Atty. Reyes] at the time that I received a copy of [the De Guzman letter] that
that letter had been given to [him] by [Dir.] Daniel. The obvious forger is no other than PCGG insider
[Dir.] Daniel xxx.
45

Jacobi added that he and Atty. Reyes have no reason or motive to forge the letter since he already
had an existing contingency fee agreement with the PCGG/Philippine government. Jacobi attached
an affidavit of Chairman Castro confirming the veracity of the PCGG letters. Jacobi stated that the
46 

petitioners’ complaint ignored his work history with the PCGG and the consistency of his conduct
with the agreement he entered into with the Philippine government.
Chairman Elma and the PCGG countered that the respondents’ withdrawal of the falsified letter
cannot extinguish the offenses already committed. The petitioners refuted the respondents’
allegation that Director Daniel was the source of the De Guzman letter per Director Daniel’s affidavit,
to wit:

I am not in a position to give [Atty. Reyes] the falsified [De Guzman] letter xxx to Reiner Jacobi as I
do not have a copy of said letter.

I strongly dispute Jacobi’s statement that "the obvious forger is no other that (sic) the PCGG insider
Danilo Daniel who furnished Attorney Crispin T. Reyes the letter in question." This is absolutely false
and baseless. As I have stated above, I had no participation at all in this spurious letter. If I
participated in this proceeding, why do I need to falsify it. Why not just give them a genuine copy of
the letter. (underlining added)
47 

d. The DOJ’s initial finding: existence of probable cause

In a June 25, 1999 resolution (first resolution), Senior State Prosecutor Jude Romano found
probable cause against the respondents on the basis of two legal presumptions - that (i) the
possessor and user of a falsified document is the forger; and (ii) whoever stands to benefit from the
forgery is the author thereof - which the respondents failed to overthrow. Thus, he recommended the
filing of the corresponding information whose dispositive portion stated; thus -48 

WHEREFORE, premises considered, it is respectfully recommended that informations for

Falsification and Use of Falsified Documents under Article 172 (1) in relation to Article 171(2) and
Article 172 par. 3 of the Revised Penal Code, respectively, be filed against respondents xxx and
another information for Use of Falsified Document under Article 172 par. 3 xxx be filed against [Atty.
Reyes].

Prosecutor Romano rejected Jacobi’s claim (that he had nothing to do with the forged letter or with
its attachment as annex to the Sandiganbayan petition), on the ground that the act of Atty. Reyes, as
Jacobi’s counsel in the Sandiganbayan petition, bound him as client. 49

Atty. Reyes seasonably moved for reconsideration of the first resolution, alleging that neither of the
50 

presumptions relied upon by Prosecutor Romano applies. Jacobi, through Atty. Peñalosa, received
51 

his copy of the first resolution on June 30, 1999. 52

d1. The procedural complications.

On July 13, 1999, the Padilla, Jimenez, Kintanar and Asuncion law firm (Padilla law firm) filed its
53 

Entry of Appearance with Omnibus Motion for Jacobi, requesting for additional time to file an
54 

appropriate pleading. The Entry of Appearance attached the June 29, 1999 letter of Jacobi to Atty.
55 

Alexander Padilla (Padilla letter) of the Padilla law firm, retaining the latter as his "attorney to deal
with the DOJ." The Padilla letter stated that Jacobi has attached a copy of his June 29, 1999 letter
56 

to Atty. Peñalosa (Peñalosa letter). Jacobi did not state the contents of the Peñalosa letter and
neither was a copy of the Peñalosa letter actually attached to the Entry of Appearance.

On July 15, 1999 - the last day to avail of a remedy from the first resolution - Jacobi, through Atty.
Peñalosa, filed an unverified petition for review with the DOJ Secretary. With this development, the
57 

petitioners opposed the Padilla law firm’s earlier request for additional period (to file appropriate
pleading). The petitioners’ opposition notwithstanding, Prosecutor Romano granted the Padilla law
58 

firm’s requests "in the interest of justice" in a July 15, 1999 order. Accordingly, on July 29,
59 

1999, Jacobi (through the Padilla law firm) moved for the reconsideration of the first resolution (first
60 

MR). 61

Meanwhile, in a July 19, 1999 manifestation, Jacobi, through the Padilla law firm, stated that "only
[the Padilla law firm is] authorized to represent [Jacobi] and that any and all other pleadings and
documentations filed or submitted by any other person and counsel, purportedly in and for his
behalf, are manifestly not authorized." 62

In a January 25, 2000 order (second resolution), Prosecutor Romano resolved to deny Jacobi’s first
63 

MR, reasoning as follows:

Records show that on July 13, 1999, [Atty. Padilla] filed an Entry of Appearance with Omnibus
Motion manifesting that he is entering his appearance as counsel for [Jacobi]. xxx

Subsequently, on July 29, 1999, Atty. Padilla filed a Motion for Reconsideration. A perusal of the
records however reveal[s] that a Petition for Review was filed before the Secretary of Justice by Atty.
Cynthia Peñalosa in behalf of [Jacobi] on July 15, 1999. It further appears that no withdrawal of
appearance as counsel or a withdrawal of the Petition was ever filed by said counsel. Thus, Atty.
Peñalosa remains to be a counsel on record of [Jacobi] with Atty. Padilla as co-counsel.

Considering that the respondent has filed a Petition for Review of the [first resolution] that is the
subject of the Motion for Reconsideration, the undersigned in deference to the Secretary of Justice is
constrained to deny the Motion for Reconsideration. [emphases added]

Earlier however (or on January 10, 2000), then Secretary of Justice Serafin Cuevas also resolved to
dismiss Jacobi’s unverified petition for review (Cuevas resolution) for Jacobi’s failure to "submit a
verification of the petition signed by [Jacobi] himself."
64

On March 7, 2000, the Sanidad Abaya Te Viterbo Enriquez and Tan law firm (Sanidad law firm) filed
65 

an Entry of Appearance as "sole and principal counsel" for Jacobi. The Sanidad law firm attached
66 

two facsimile letters of Jacobi: one is dated March 3, 2000, addressed to Prosecutor Romano/Chief
67 

State Prosecutor Jovencito Zuño; and the other is dated June 29, 1999 (which is actually the
68 

Peñalosa letter, supposedly attached to the Padilla law firm’s Entry of Appearance) addressed to
Atty. Peñalosa. Both letters attest to "the lack of authority of Atty. Peñalosa to represent and take
action [for Jacobi] as of [June 29, 1999]" – or before the unverified petition for review was
69 

filed. These facsimile letters do not bear the actual date of their transmission.70

The Sanidad law firm moved for the reconsideration (second MR) of the second resolution, arguing
71 

that Prosecutor Romano erred in refusing to recognize that Atty. Peñalosa had already been validly
discharged upon the subsequent unqualified appearance of the Padilla law firm well before the
unverified petition for review was filed. It cites in support the Padilla law firm’s July 19,
1999 Manifestation. 72

In a March 6, 2001 resolution (third resolution), Chief State Prosecutor Jovencito Zuño (i) approved
the recommendation of Prosecutor Romano to grant Jacobi’s second MR and Atty. Reyes’ pending
motion for reconsideration, and (ii) dismissed the complaint against the respondents. Since both the
73 

second resolution (denying Jacobi’s first MR) and the Cuevas resolution (denying Jacobi’s unverified
petition for review) were not based on the merits, the prosecutors considered Jacobi’s second MR
"in the interest of justice." The prosecutors observed:

[The De Guzman letter] merely confirms the agreement between the PCGG and Jacobi’s group….
The [De Guzman letter] was annexed to [the Sandiganbayan petition] [which] specifically prayed "for
the revocation of the re-appointment of Swiss lawyers and representatives in Switzerland x x x and
to continue, push through and follow up the previous government efforts and take such appropriate
actions called for. xxx

As can be gleaned from the above, the subject letter is not necessary for the successful resolution of
the case. As explained, its annexation to the petition is a surplusage for even without it, the action
was sufficient. There is no logical reason for the respondents to falsify the subject letter knowing fully
well that no benefit would accrue in their favor. It would be different if the action filed was for the
collection of the stipulated 10% fee. The subject letter then becomes very material as it serves as
proof of their right to the fees.
74

In the meantime, Atty. Peñalosa withdrew as Jacobi’s counsel. She attached to her Notice of
75 

Withdrawal her letters-explanation to Jacobi, disproving her alleged lack of authority to file the
unverified petition for review. In one of her letters, Atty. Peñalosa explained:
You [referring to Jacobi] know… that despite the [Peñalosa letter] (which was faxed to me after I
received a copy of the adverse DOJ Resolution…) You repeatedly requested me to proceed… and
to immediately inform [Atty. Padilla] that it was [you who gave] me authority to prepare/submit the
necessary papers. I then informed [Atty. Padilla] of your decision. Nevertheless… I told [Atty. Padilla
that] I could withdraw from [the] case so he can enter his appearance and make the necessary legal
moves. [Atty. Padilla] said [that] he did not know about your DOJ case and that he was busy and that
I just go ahead with your request that I proceed with the preparation/submission of the papers.

xxxx

On July 15, 1999 which was the last day for the filing of the petition [for review with the DOJ], I asked
you again if we were to proceed and your decision [was] that I file it. Even Dr. David Chaikin, your
lawyer, who was with you at that time and whom you consulted, advised me to proceed. So, the
petition was filed. (Emphases added)
76 

The petitioners moved for reconsideration of the third resolution but its motion was denied in a
77 

January 9, 2002 resolution. Prosecutors Romano and Zuño rejected the petitioners’ argument that
78 

the dismissal of Atty. Peñalosa’s petition for review bars a reconsideration of the second resolution.

It should be noted that the [third resolution] treats, not only of [Jacobi’s] motion for reconsideration,
but likewise that of [Atty. Reyes] which was [seasonably] filed. xxx

Therefore, insofar as the Motion for Reconsideration filed by [Atty. Reyes] is concerned, the same is
still pending and had to be resolved. It is of record that [Atty. Reyes] never filed a petition for review
of the [first resolution]. Hence the [Cuevas petition] dismissing on a mere technicality the Petition for
review filed by Atty. Peñalosa, alleged counsel [of Jacobi], did not affect the pending Motion for
Reconsideration filed by [Atty. Reyes] and did not bar the undersigned from acting thereon.

Insofar as the Motion for Reconsideration filed by [Jacobi] is concerned, the same had to be
resolved principally in the interest of justice xxx.

This case involves the same facts and the same issues for both [Jacobi and Atty. Reyes] such that
injustice could occur should there be two different decisions. xxx

xxx [the] dismissal [of the petition for review] never affected the Motion for reconsideration filed by
[Atty. Reyes] then pending with the undersigned for resolution. Certainly, the resolution of this
motion was within the jurisdiction/authority of the undersigned and the Chief State Prosecutor whose
resolution is subject of reconsideration. xxx [emphasis supplied]
79 

e. The DOJ’s present finding: No probable cause

On April 29, 2002, the PCGG filed a petition for review with the DOJ Secretary. Usec. Gutierrez,
80  81 

acting "for the Secretary of Justice" Hernando Perez, denied the petition for review on the ground
that no prima facie case exists against the respondents. With the denial of the petitioners’ motion for
82 

reconsideration, the petitioners went directly to this Court on a petition for certiorari.
83 

THE PETITIONERS’ POSITION

The petitioners claim that Usec. Gutierrez gravely abused her discretion when she sustained the
impropriety of (i) Jacobi’s simultaneous resort to two different remedies – filing a petition for review
and a motion for reconsideration – through two different counsels and (ii) filing a second motion for
84 
reconsideration of an adverse resolution through another counsel. Jacobi’s first and second MRs
85 

were "purposely devised… to make it appear that Atty. Peñalosa was not authorized to file the
unverified petition for review." 86

The petitioners also claim that the alleged termination of Atty. Peñalosa’s services surfaced only
when - as late as March 2000 - the Sanidad law firm attached to Jacobi’s second MR a copy of the
Peñalosa letter. The petitioners argue that nothing in the records of the case would show that Jacobi
terminated Atty. Peñalosa’s services at any time before she filed the unverified petition for review.
The Padilla law firm’s (i) Entry of Appearance and (ii) July 19, 1999 manifestation, as well as the
Padilla letter attached to these, are silent about the alleged termination of Atty. Peñalosa. These
documents do not contain the Peñalosa letter which supposedly evidences Jacobi’s termination of
Atty. Peñalosa’s services. At any rate, the Padilla and the Peñalosa letters are of dubious
87 

authenticity because they do not contain the actual date of transmittal by Jacobi to their addressees,
as would normally appear at the top edge of a faxed document. 88

The petitioners assert that Atty. Peñalosa was Jacobi’s counsel at the time she filed the unverified
petition for review, citing Prosecutor Romano’s observation in the second resolution and Atty.
Peñalosa’s letters-explanation, attached to her Notice of Withdrawal. The petitioners likewise claim
89 

that since Atty. Peñalosa remained Jacobi’s counsel at the time she filed the petition for review, then
the filing of the first and second MRs by the Padilla law firm and by the Sanidad law firm,
respectively, is highly improper.

The petitioners add that Usec. Gutierrez gravely abused her discretion when she sustained
Prosecutor Romano and Prosecutor Zuño’s grant of Jacobi’s second MR, which effectively (albeit
without authority) overturned the Cuevas resolution, instead of maintaining respect to the appellate
90 

authority of then Secretary Cuevas.

On the issue of probable cause, the petitioners reiterate the findings in the first resolution that the
respondents’ defense of "lack of knowledge [of the forgery] is self-serving and is better ventilated in
a full blown trial." Relying on the presumption that the holder of a forged document is presumed to
91 

be the forger thereof, the petitioners assert that the respondents failed to rebut this presumption with
credible evidence. Since the Sandiganbayan petition seeks to compel the petitioners (as
respondents in Civil Case No. 006) to recover the UBS account, the Sandiganbayan petition was
actually an action to compel recognition of the respondents’ alleged 10% finder’s fee as confirmed in
the De Guzman letter. 92

Citing Choa v. Judge Chiongson, the petitioners add that the withdrawal of the` De Guzman letter
93 

from the Sandiganbayan petition and the Ombudsman complaint cannot negate the criminal liability
that the respondents had already incurred. Criminal liability for knowingly introducing a falsified
document in court is incurred once the document is submitted to the court through its attachment to
the complaint. The respondents cannot likewise claim good faith in withdrawing the De Guzman
94 

letter since the withdrawal was made after Chairman De Guzman denied any participation in the
forged letter and after the NBI confirmed the falsification. 95

THE RESPONDENTS’ POSITION

The respondents question the propriety of the petitioners’ resort to a certiorari petition instead of a
petition for review under Rule 43; they posit that even assuming the remedy of certiorari is proper,
96 

the petition is insufficient in form and substance due to the petitioners’ failure to (i) implead the DOJ
in their petition and (ii) to observe the doctrine of hierarchy of courts.
97  98
Contrary to the petitioners’ remonstration, the assailed resolutions of Usec. Gutierrez were actually
issued for Secretary of Justice Hernando Perez, and therefore, Usec. Gutierrez did not reverse the
Cuevas resolution. The respondents assert that the petitioners cannot compel the prosecutor to
99 

proceed with the case after finding that no probable cause exists against the respondents since the
determination of probable cause involves an exercise of discretion. 100

The respondents add that the petitioners’ failure to present the original of the allegedly forged
document is fatal to their accusations of forgery. At any rate, the presumption of authorship, relied
upon by the petitioners, is inapplicable to and rebutted by Jacobi and Atty. Reyes, respectively: first,
the presumption cannot apply to Jacobi, who was never in possession of the De Guzman letter; he
had no participation in the preparation of the Sandiganbayan petition and he did not even verify it;
and second, Atty. Reyes sufficiently explained how he came into possession of the De Guzman
letter.
101

ISSUES

1. Whether certiorari under Rule 65 is the proper remedy to question the DOJ’s
determination of probable cause.

a. If it is, where should the petition be filed.

2. Whether the DOJ committed grave abuse of discretion.

a. In effectively allowing Jacobi to (i) simultaneously avail of the remedy of a petition

for review and a motion for reconsideration, and (ii) file a second motion for
reconsideration.

b. In finding that no probable cause for falsification and use of falsified document
exists against the respondents?

OUR RULING

The petition lacks merit.

Before going into the substance of the petition, we shall first resolve the procedural questions the
respondents raised.

I. Procedural aspects

a. Rule 65 is the proper remedy to assail the DOJ’s determination of the presence or absence of
probable cause

The respondents claim that a petition for review under Rule 43 is the proper remedy in questioning
the assailed DOJ resolutions.

The respondents are mistaken.

By weighing the evidence submitted by the parties in a preliminary investigation and by making an
independent assessment thereof, an investigating prosecutor is, to that extent, performing functions
of a quasi-judicial nature in the conduct of a preliminary investigation. However, since he does not
make a determination of the rights of any party in the proceeding, or pronounce the respondent’s
guilt or innocence (thus limiting his action to the determination of probable cause to file an
information in court), an investigating prosecutor’s function still lacks the element of
102 

adjudication essential to an appeal under Rule 43.

103 

Additionally, there is a "compelling reason" to conclude that the DOJ’s exclusion from the
enumeration of quasi-judicial agencies in Rule 43 of the Rules of Court is deliberate. In Orosa v.
Roa, we observed:
104 

There is compelling reason to believe, however, that the exclusion of the DOJ from the list is
deliberate, being in consonance with the constitutional power of control lodged in the President over
executive departments, bureaus and offices. This power of control, which even Congress cannot
limit, let alone withdraw, means the power of the Chief Executive to review, alter, modify, nullify, or
set aside what a subordinate, e.g., members of the Cabinet and heads of line agencies, had done in
the performance of their duties and to substitute the judgment of the former for that of the latter.

Being thus under the control of the President, the Secretary of Justice, or, to be precise, his decision
is subject to review of the former. In fine, recourse from the decision of the Secretary of Justice
should be to the President, instead of the CA, under the established principle of exhaustion of
administrative remedies. x x x. Notably, Section 1 x x x of Rule 43 includes the Office of the
President in the agencies named therein, thereby accentuating the fact that appeals from rulings of
department heads must first be taken to and resolved by that office before any appellate recourse
may be resorted to. [citations omitted, emphasis ours]

However, Memorandum Circular No. 58 of the Office of the President bars an appeal from the
105 

decisions/orders/resolutions of the Secretary of Justice on preliminary investigations of criminal

cases via a petition for review, except for those involving offenses punishable by reclusion perpetua
to death. Therefore, a party aggrieved by the DOJ’s resolution - affirming or reversing the finding of
106 

the investigating prosecutor in a preliminary investigation involving an offense not punishable by

reclusion perpetua to death - cannot appeal to the Office of the President and is left without any
plain, speedy and adequate remedy in the ordinary course of the law. This leaves a certiorari petition
as the only remedial avenue left. However, the petitioner must allege and show that the DOJ acted
107 

with grave abuse of discretion in granting or denying the petition for review.

We also reject the respondents’ allegation that the present petition suffers from a fatal procedural
defect for failure to implead the DOJ (or its appropriate official) as an indispensable party.

Unlike a Rule 45 petition, one filed under Rule 65 petition requires the petitioner to implead as public
respondent the official or agency whose exercise of a judicial or quasi-judicial function is allegedly
108 

tainted with grave abuse of discretion. Contrary to the respondents’ assertion, the petition for
109 

certiorari filed by the petitioners with the Court impleaded Usec. Gutierrez, who, as then Justice
Undersecretary, issued the assailed resolutions "for the Secretary of Justice." While the DOJ did not
formally enter its appearance in this case, or file any comment or memoranda, the records show that
the Court issued resolutions, addressed to the DOJ as a party, to submit the appropriate responsive
pleadings. As an extraordinary remedy, Rule 65 of the Rules of Court does not require that
110 

summons be issued to the respondent; the service upon him of an order to file its Comment or
Memorandum is sufficient. 111

b. The doctrine of hierarchy of courts not inflexible

Conceding the remedial propriety of the present petition, the respondents nevertheless assert that
under the doctrine of hierarchy of courts, the present petition should have been filed with the Court
of Appeals (CA), which has concurrent jurisdiction with the Supreme Court to issue the extra-
ordinary writ of certiorari.

We agree with the respondents.

In Vergara, Sr. v. Judge Suelto, the Court laid down the judicial policy expressly disallowing a direct
112 

recourse to this Court because it is a court of last resort. The Court stressed that "[w]here the
issuance of an extraordinary writ is also within the competence of [another court], it [must be in that
court] that the specific action for the writ’s procurement must be presented." The rationale behind the
policy arises from the necessity of preventing (i) inordinate demands upon the Court's time and
attention which are better devoted to those matters within its exclusive jurisdiction, and (ii) further
overcrowding of the Court's docket. 113

People v. Cuaresma and subsequent jurisprudence later reaffirmed this policy, stating that a direct
114 

invocation of the Court’s original jurisdiction may be allowed only if there are special and important
reasons clearly and specifically set out in the petition or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our primary
jurisdiction.
115

In the present case, the petitioners have not advanced any special and important reason or reasons
why direct recourse to this Court should be allowed, considering the availability of a certiorari petition
with the CA; nor do we find exceptional and compelling circumstances in the present petition to
apply the exception to the judicial policy. However, if only to avoid further delay – by leniently
116 

reading the petition, and assuming import to, the allegation that the respondents falsified a document
that forms part of the PCGG’s official records of its correspondence with a Philippine diplomatic
official – we deem it of practical necessity to resolve the case on its merits.117

c. Grave abuse of discretion: procedural aspect of the DOJ’s determination of lack of probable cause

The petitioners argue that since Atty. Peñalosa was still Jacobi’s counsel of record at the time she
filed the unverified petition for review, Jacobi could not disown the act of his counsel by simply
availing of another remedy through another counsel. Consequently, the dismissal of Jacobi’s
unverified petition for review - albeit on a technical ground - rendered the first resolution as the final
determination of the existence of probable cause against the respondents.

The mere filing of a notice of appearance of a new counsel does not automatically give rise to the
presumption that the present counsel of record has already been substituted or that his authority has
been withdrawn. Therefore, absent a formal withdrawal of appearance filed by Atty. Peñalosa, the
Padilla law firm is considered merely as a collaborating counsel and its entry of appearance does
remove from Atty. Peñalosa the authority to file, when she did, the petition for review with the
DOJ. Even Jacobi impliedly admitted that Atty. Peñalosa was still his counsel at the time she filed
118 

the petition for review by not addressing the issue of her authority to file it and by conveniently
choosing to keep silent (thus impliedly agreeing with) regarding her account of the filing of the
petition.

Contrary to the petitioners’ claim, records bear out that the Padilla law firm had attached the
Peñalosa letter to its July 19, 1999 manifestation, showing that Jacobi already terminated Atty.
Peñalosa’s services as of June 29, 1999 (or before the unverified petition for review was filed).
However, since this Manifestation was filed with the DOJ only on July 20, 1999, Atty. Peñalosa’s
119 

earlier filing of the petition for review cannot be considered unauthorized. While the filing of this July
19, 1999 manifestation would have the effect of discharging Atty. Peñalosa, it cannot undo her act
120 

which was valid and effective at the time it was done. 121
All things considered, the factual peculiarities of this case do not lead us to adopt the petitioners’
position.

Under Department Circular No. 70 of the DOJ, an aggrieved party may appeal the resolution of the
122 

city or provincial prosecutor to the Secretary of Justice upon receipt either of the questioned
resolution or of the denial of a motion for reconsideration of the questioned resolution. Logically, the
filing of a petition for review is deemed a waiver of the more expedient remedy of asking for
reconsideration from the investigating prosecutor.

Notwithstanding the irregularity that would result in availing two remedies in succession, Prosecutor
Romano granted Jacobi’s request (through the Padilla law firm) for an additional period within which
to file an appropriate pleading, glossing over the petition for review filed on the same date (July 15,
1999) with the Secretary of Justice. Accordingly, Jacobi filed his first MR on July 29, 1999, through
the Padilla law firm.

Upon discovery of Jacobi’s previously filed petition for review, Prosecutor Romano refused to
entertain Jacobi’s first MR "in deference to the Secretary of Justice." (Unfortunately, the then
123 

Secretary of Justice subsequently denied Jacobi’s petition for review based solely on a procedural
defect, i.e., Jacobi failed to verify the petition).

A significant point that should be appreciated at this juncture is that Atty. Reyes himself had a validly
filed motion for reconsideration since he had been alleged to be not only a lawyer, but a co-
conspirator of Jacobi in the offenses sought to be charged. It must be considered, too, that the
petitioners’ accusations against the respondents arose from the same set of disputed (and
undisputed) facts whose resolution, for purposes of determination of probable cause, could not be
considered independently of one another. The prosecutors apparently forgot about Atty. Reyes’
motion for reconsideration when they recognized the petition for review Jacobi earlier filed and in
ruling on Jacobi’s first MR.

From this perspective, Prosecutor Zuño’s March 6, 2001 ruling on Jacobi’s second MR and on Atty.
Reyes’ first MR cannot be appreciated as grave abuse of discretion. While it seemingly violated
established rules of procedure, it provided ample justification therefor – the avoidance of possibility
of two conflicting rulings on two motions treating of the same inseparable subject matter.

We remind the petitioners that when the technical rules of procedure desert its proper office as an
aid to justice and becomes a great hindrance to the attainment of justice, its invocation deserves the
least consideration from this Court. Rules of procedure must yield, when proper and under justifiable
causes and/or circumstances (as what has been done in the present case), in the interest of
substantial justice.

In these lights, we cannot likewise agree with the petitioners’ remonstrations that Usec. Gutierrez
improperly overruled the resolution of former Secretary Cuevas. As the respondents pointedly
countered, the assailed resolutions were issued by Usec. Gutierrez "for the Secretary of Justice,"
who at the time was no longer Secretary Cuevas. Absent any allegation and proof of any acquired
124 

vested right, the discretion exercised by a former alter-ego cannot tie the hands of his successor in
office since cabinet secretaries are mere projections of the Chief Executive himself. 125

With the procedural issues cleared, we now resolve the ultimate issue of whether probable cause
exists to charge the respondents with falsification and use of falsified documents.

II. Substantive aspect

a. Determination of probable cause, an executive function

The necessary component of the Executive’s power to faithfully execute the laws of the land is the
State’s self-preserving power to prosecute violators of its penal laws. This responsibility is primarily
lodged with the DOJ, as the principal law agency of the government. The prosecutor has the
126 

discretionary authority to determine whether facts and circumstances exist meriting reasonable belief
that a person has committed a crime. The question of whether or not to dismiss a criminal complaint
is necessarily dependent on the sound discretion of the investigating prosecutor and, ultimately, of
the Secretary (or Undersecretary acting for the Secretary) of Justice. Who to charge with what
127 

crime or none at all is basically the prosecutor’s call.

Accordingly, the Court has consistently adopted the policy of non-interference in the conduct of
preliminary investigations, and to leave the investigating prosecutor sufficient latitude of discretion in
the determination of what constitutes sufficient evidence to establish probable cause. Courts cannot
128 

order the prosecution of one against whom the prosecutor has not found a prima facie case; as a
rule, courts, too, cannot substitute their own judgment for that of the Executive. 129

In fact, the prosecutor may err or may even abuse the discretion lodged in him by law. This error or
abuse alone, however, does not render his act amenable to correction and annulment by the
extraordinary remedy of certiorari. To justify judicial intrusion into what is fundamentally the domain
of the Executive, the petitioner must clearly show that the prosecutor gravely abused his discretion
130 

amounting to lack or excess of jurisdiction in making his determination and in arriving at the
conclusion he reached. This requires the petitioner to establish that the prosecutor exercised his
power in an arbitrary and despotic manner by reason of passion or personal hostility; and it must be
so patent and gross as to amount to an evasion or to a unilateral refusal to perform the duty enjoined
or to act in contemplation of law, before judicial relief from a discretionary prosecutorial action may
131 

be obtained. All these, the petitioner failed to establish.

b. Lack of probable cause for falsification

For purposes of filing an information in court, probable cause refers to facts and circumstances
sufficient to engender a well-founded belief that a crime has been committed and that the
respondents probably committed it. To guide the prosecutor’s determination, a finding of probable
cause needs only to rest on evidence showing that, more likely than not, a crime has been
committed and that it was committed by the accused; the quantum of proof to establish its existence
is less than the evidence that would justify conviction, but it demands more than bare suspicion. 132

No definitive basis to determine probable cause has been established, except to consider the
attendant facts and circumstances according to the prosecutor’s best lights. No law or rule states
133 

that probable cause requires a specific kind of evidence. No formula or fixed rule for its
determination exists. Probable cause is determined in the light of conditions obtaining in a given
situation. In going through the process, the prosecutor should carefully calibrate the issues of facts
134 

presented to him to the end that his finding would always be consistent with the clear dictates of
reason.135

In the present case, the petitioners rely on the jurisprudential presumption that a holder of a forged
document is himself the forger, and should be charged under Article 171, paragraph 2 and Article
136 

172, paragraphs 1 and 3 of the Revised Penal Code.

137 

I. The presumption’s roots in jurisprudence

In the 1906 case of U.S. v. Castillo, the Court laid down the rule that the utterance or use of a
138 

forged instrument, when unexplained, is strong evidence tending to establish that the user himself
(or herself) either forged the instrument or caused it to be forged. In this case, the accused merely
denied ever presenting the forged check to the complainant or receiving the amount it represented;
the Court found no merit in these denials. In People v. De Lara (a 1924 case), the Court again
139 

applied the presumption after finding the explanation of the accused – on how he came into
possession of checks that were subsequently encashed – to be "unusual and unreasonable as to
carry conviction."140

In People v. Domingo (1926), the Court applied the presumption because a few days after the
141 

certificate of title (over a property) was loaned to the accused, a forged deed of sale covering the
property was executed by two alleged vendors. The Court ruled that the failure of the accused to
explain what she did with the certificate of title loaned to her could only lead to the inference that she
placed the certificate of title in the hands of her confederates as without the certificate, the forgery
could not have been accomplished.

In People v. Astudillo (1934), the Court clarified that for the presumption to apply, the use of the
142  143 

forged document must be accompanied by these circumstances: the use is so closely connected in
time with the forgery, or the user may be proved to have the capacity to undertake the forgery, or
144 

such close connection with the forgers to create a reasonable link. These additional circumstances
have been loosely applied in subsequent cases.

In Alarcon v. Court of Appeals (1967), the Court applied the presumption after considering the
145 

"patent irregularity in the transaction" and the "extraordinary interest" of the accused in the property
146 

covered by the forged document/s in holding that "no reasonable and fair[-]minded man" would say
that the accused had no knowledge of the falsification. Sarep v. Sandiganbayan (1989 case), gave 147 

occasion for the ruling that since the accused was the only person who stood to benefit by the
falsification of the document found in his possession, the presumption of authorship of the
falsification applies in the absence of contrary convincing proof by the accused. 148

In the more recent (1992) Caubang v. People, the accused - who claimed to have the authority to
149 

transact (in behalf of an entity) with a government agency in Manila - attempted to overthrow the
presumption of authorship against him by alleging intervening circumstances from the time he
arrived in Manila until the transaction with the government agency was made. The accused claimed
the he did not carry the forged document when he arrived in Manila and that third persons (including
a "fixer") actually transacted with the government. Allegedly, these claims disproved that he had any
knowledge or inference in the making of the submitted forged document. Rejecting this claim, the
Court ruled that:

[U]tilizing a fixer as part of the scenario becomes a convenient ploy to divert the mind of the court
from the more plausible inference that the accused-petitioner engineered the spurious [document].

xxxx

Even if the allegation that some other person [did the transaction] was true, the accused-petitioner
would still be subjected to the same conclusion.

xxxx

Having been the one responsible for the filing of the registration papers, including the means he felt
necessary to accomplish the registration, the accused must likewise be accountable therefor. As the
authorized representative, he is deemed to have been the one in custody or possession, or at least
the one who has gotten hold even for a short while, of the papers which included the [falsified
document]. That he knew of the execution of the statement is a possibility not too difficult to imagine
under the circumstances.

xxxx

The [submission] of the previously inexistent document [with the government] subjects the accused-
petitioner to the inference that he used it as part of the registration papers. In the absence of a
credible and satisfactory explanation of how the document came into being and then filed with the
[government agency], the accused is presumed to be the forger [.] (italics supplied)
150 

In Dava v. People (1991), involving an accused who misrepresented to his friend that he had no
151 

driver’s license and thereafter induced his friend to deal with "fixers" so that he could have a driver’s
license, the Court ruled that the "patent irregularity" that attended the procurement of the license
152 

cannot escape the conclusion that the accused knew that the license he obtained was fake and that
he acted as a principal by inducement in the falsification of the license.

The above case law instructs us that if a person had in his possession (actual or constructive) a
falsified document and made use of it, taking advantage of it and/or profiting from such use, the
presumption that he authored the falsification also applies. 153

These cited cases, however, already involve a determination of the guilt or innocence of an accused,
requiring the application of the rigid standard of moral certainty. In a preliminary investigation that
merely inquires into the probability of guilt of a respondent, no reason exists why the same
presumption cannot apply mutatis mutandis, taking into account the different level of certainty
demanded.

Where the evidence before the investigating prosecutor jibes with the factual premises necessary
154 

for the application of the presumption of authorship, a prima facie case for falsification under Article
155 

171 of the Revised Penal Code is created. Correspondingly, the legal presumption gives rise to the
necessity for the presentation of contrary evidence by the party (against whom the presumption
applies) to overcome the prima facie case established; otherwise, the existence of probable cause
156 

cannot be disputed. 157

Based on these standards, the twin-issue we confront is whether the presumption applies and
whether the facts giving rise to it have been adequately rebutted by the respondents.

ii. The legal presumption does not apply to Jacobi

Jacobi argues that the presumption of authorship does not apply to him because he never became a
possessor or holder of the De Guzman letter.

The De Guzman letter shows that Jacobi was its intended addressee although it was sent in "care"
of Jacobi’s then counsel, Atty. Reyes. Unlike the PCGG letters, whose authenticity the petitioners do
not dispute, the De Guzman letter recognized Atty. Reyes as Jacobi’s counsel in his dealing with the
PCGG. The petitioners do not dispute, too, Atty. Reyes’ representation to the PCGG as Jacobi’s
counsel in several correspondences he had sent, confirming that he had been acting in such
capacity.

The relation of an attorney and a client is in many respects one of agency and the general rules of
ordinary agency apply. The extent of authority of a lawyer, when acting on behalf of his client outside
of court, is measured by the same test applied to an ordinary agent. Accordingly, even if we go by
158 

Atty. Reyes’ account of how the De Guzman letter surfaced, Jacobi, at least, had constructive
possession of the De Guzman letter. Being a mere extension of the personality of the principal
(client), the agent’s (lawyer’s) possession is considered that of the principal’s. 159

However, possession of the falsified letter is not enough to trigger the application of the presumption
of authorship; the use of the document and the existence of any of the circumstances previously
160 

discussed is still necessary.

In the present case, Jacobi’s use of the De Guzman letter is placed in doubt considering (i) that he
was not in the country when the Sandiganbayan petition - containing the De Guzman letter - was
filed, and (ii) the absence of his signature in the Sandiganbayan petition and in its verification. There
is also a seven-month interval between the date of the De Guzman letter and the filing of the
Sandiganbayan petition. Cognizant of these facts, the petitioners theorized that Jacobi and Atty.
Reyes acted in conspiracy in coming up with a falsified De Guzman letter. The petitioners claim that
161 

the attachment of the De Guzman letter to the respondents’ Sandiganbayan petition was precisely
aimed at compelling the PCGG to recognize Jacobi’s (and his group’s) 10% contingent fee
arrangement with the PCGG and, ultimately, recovering it in the same action.

The petitioners’ claim fails to persuade us. The petitioners ignore the professional relationship
existing between Jacobi and Atty. Reyes at the time the Sandiganbayan petition was filed. The
existence of this relationship necessarily calls for a different appreciation of the facts established
during the preliminary investigation than it would if no such relationship existed. Under Rule 138 of 162 

the Rules of Court, matters of ordinary judicial procedure are within the exclusive authority of the
attorney. These include such questions as what action or pleading to file, what should be the theory
of the case, and how the claim (or defense) may be proved and those affecting the sufficiency,
relevancy and materiality of certain pieces of evidence. The annexation of the De Guzman letter in
163 

the Sandiganbayan petition and the Ombudsman complaint falls within these matters. Even Atty.
Reyes himself explained that Jacobi had no participation in the preparation of the Sandiganbayan
petition, much less in the attachment as annex of the De Guzman letter. 164

Without determining the validity of Jacobi’s supposed arrangement with the PCGG, a reading of the
Sandiganbayan petition does not support the petitioner’s theory of conspiracy. In filing the
Sandiganbayan petition, the respondents seek to compel the petitioners to perform their duty to
recover the ill-gotten wealth of the Marcoses. With or without the agreement, the performance of this
duty is a tasked imposed by law on the PCGG; the performance of this duty is what the
Sandiganbayan petition speaks of in plain terms.

Then, too, the DOJ found nothing to support the petitioners’ allegation of conspiracy or of
inducement on Jacobi’s part. Likewise, the Court cannot find any reason why the respondents
should file the Sandiganbayan petition to compel the petitioners to recognize their alleged contingent
fee arrangement. To begin with, the records do not show that the petitioners ever disputed the
validity of this arrangement - as evidenced likewise by the PCGG letters, which are of similar import
165 

as the De Guzman letter and whose authenticity the petitioners impliedly admitted at the time the
respondents filed the Sandiganbayan petition.

Yet again, the existence of several letters and reports made by the respondents to the PCGG,
regarding the UBS account and the respondents’ activities in connection therewith, shows that the
PCGG was at least aware of the respondents’ efforts to assist in the recovery efforts of the
government, in general, and of the PCGG, in particular. Therefore, forging a letter that would simply
be evidence of an implied agreement for those services hardly makes any sense. 166
Considering the inapplicability of the presumption of authorship and the dearth of evidence to
support the allegation of conspiracy, much less of evidence directly imputing the forgery of the De
Guzman letter to Jacobi, we find no grave abuse of discretion on the part of the DOJ in absolving
him.

iii. The presumption in forgery was sufficiently explained by Atty. Reyes

Atty. Reyes does not seriously dispute the application of the presumption of authorship as to him
167 

since he was in possession, and made use, of the forged De Guzman letter, but offers an
explanation on the circumstances of such possession and use. On the other hand, the petitioners
dispute the adequacy of his explanation and impute grave abuse of discretion on the part of Usec.
Gutierrez for surmising that the De Guzman letter "must have been ‘doctored’ in the PCGG." 168

What constitutes satisfactory explanation from the possessor and user of a forged document must
be adjudged on a case to case basis, consistent with the twin-purposes of a preliminary
investigation - viz: first, to protect the State from having to conduct useless and expensive trials;
169 

and second, to protect the respondent from the inconvenience, expense and burden of defending
himself in a formal trial, unless a competent officer shall have first ascertained the probability of his
guilt. Since the determination of probable cause lies within the prosecutor’s discretion, the
170 

soundness of the explanation (to rebut the prima facie case created by the presumption of
authorship) is likewise left to the prosecutor’s discretion. Unless his determination amounted to a
capricious and whimsical exercise of judgment evidencing a clear case of grave abuse of discretion,
courts must defer to the prosecutor’s finding.

We do not find grave abuse of discretion in the present case. By capitalizing on Usec. Gutierrez’s
assumption that the questioned letter must have been "doctored" in the PCGG, the petitioners
turned a blind eye to the assumption’s factual premise. We quote Usec. Gutierrez’s discussion on
this point, thus -

We have perused the NBI report; and our attention is caught by the statement therein that the
"typewritten name and signature of FELIX M. DE GUZMAN, the typewritten entries ‘Chairman’,
‘FMG/lai’, ‘dol’, and the handwritten entries ‘5c Records’, ‘8/27’ were lifted/extracted probably from
the original and/or xerox copy from the original of a typewritten letter addressed to the Hon. Tomas
L. Syquia, Philippine Ambassador to Switzerland dated 25 August 1998."

Since it is the PCGG that has the only copy of Chairman De Guzman’s letter to Ambassador Syquia
(except of course the Ambassador) in its files bearing the same distinguishing entries from where the
[De Guzman] letter was "lifted/extracted", we cannot see our way clear how the falsification can be
attributed to respondent Reyes. It is more credible that the questioned letter must have been
"doctored" in the PCGG, which is the repository of all official communications of former Chairman De
Guzman, and passed to [Atty. Reyes] who accepted the same not knowing its falsity. (Emphasis
171 

added.)

In short, Usec. Gutierrez simply found Atty. Reyes’ explanation – that the De Guzman letter was
handed to him by Director Daniel – consistent with the premise of her assumption and sufficient to
disregard the DOJ’s previous finding of probable cause.

Additionally, we observe that along with the De Guzman letter, Atty. Reyes also withdrew the
Gunigundo letter from the Sandiganbayan petition because of the questionable authenticity of the
signature it carried. When Atty. Reyes tried to obtain a copy of this letter from the PCGG, he was
informed that the PCGG had no copy of this letter. Interestingly, the absence of a copy of the De
Guzman letter in the PCGG’s records was the core of the statements in the affidavits of the PCGG
employees, attached to support the petitioners’ complaint. 172

The petitioners place too much reliance on the findings contained in the first resolution, blurring their
view of the function of a motion for reconsideration. It is precisely the office of a motion for
reconsideration to give an agency making a quasi-judicial determination an opportunity to correct
173 

any error it may have committed through a misapprehension of facts or misappreciation of the
evidence, leading to a reversible conclusion at the administrative level. The petitioners have not
174 

shown that in arriving at the assailed resolutions (which sustained the prosecutor’s reversal of the
first and second resolutions), Usec. Gutierrez gravely abused her discretion which would warrant a
corrective action from the Court.

c. Lack of probable cause for knowingly introducing a falsified document

Neither does probable cause exist against the respondents for the crime of introducing a falsified
document in a judicial proceeding, punished under the last paragraph of Article 172 of the Revised
Penal Code.  The accused’s knowledge of the falsity of the document, which he introduced in a
1âwphi1

judicial proceeding, is one of the elements of this crime. In the present case, not an iota of evidence
175 

was presented to show the respondents’ knowledge of the falsity of the De Guzman letter at the time
it was annexed to the Sandiganbayan petition. On this point alone, the petitioners’ reliance on Choa
v. Judge Chiongson is misplaced. 176 

Given all the extant circumstances of the case, coupled with the immediate withdrawal of the De
Guzman letter, the resulting credit given by Usec. Gutierrez to the respondents’ defense-
explanations must be respected.

d. The PCGG’s role in the governmental scheme vis-à-vis the Court’s general policy of non-
interference

As a final observation, we draw attention to the fact that the PCGG is a unique legal creature with a
unique mandate. It was created by President Corazon Aquino pursuant to her extraordinary
legislative powers after she declared a revolutionary government. The PCGG’s charter, Executive
Order (E.O.) No. 1, was the very first executive order she issued. E.O. No.1 created the PCGG and
charged it with the task of assisting the President in the "recovery of all ill-gotten wealth"
accumulated by former President Marcos, his relatives and cronies. To accomplish its "gigantic task
of recovering the plundered wealth of the nation," E.O. No. 1 granted the PCGG ample powers and
177 

authority.
178

In no time, the President issued E.O. No. 2, authorizing the PCGG "to request and appeal to foreign
179 

governments" where the ill-gotten wealth might be found "to freeze them and otherwise prevent their
transfer, conveyance, encumbrance, concealment or liquidation" in the meantime that the legality of
their acquisition was determined. Indeed, the recovery of this "ill-gotten wealth" of former President
Marcos, his relatives and cronies is not only a matter of right but the paramount duty of the
government.

Viewed from the uniqueness of the PCGG’s creation and role, on one hand, and the general policy
of the Courts not to interfere with the prosecutor’s evaluation of the sufficiency of evidence that
would establish probable cause, on the other hand, we find it unfortunate, if not disturbing, how the
respondents’ documented efforts to assist the PCGG in the recovery of the ill-gotten wealth (given
the staggering amount involved particularly in the UBS account) and how the concerns they raised
that allegedly hamper the government’s efforts, would end up as a legal warfare between two camps
supposedly on the same side.
The seriousness of Atty. Reyes’ allegations of irregularities should have served as a warning signal
180 

to the PCGG which carries a critical role in our people’s remedial efforts in addressing the causes
that gave rise to the EDSA revolution. The PCGG’s success, if any and if at all, cannot be
downplayed. To be sure, the PCGG’s silence in the face of these accusations (except to
characterize the respondents’ defensive assaults as an "undeserved gibe" ) raises a lot of
181 

unanswered questions and appears to justify the allegations of political motivation behind the
criminal charges against the respondents.

In sum, under the circumstances and the other observations made, the Court cannot but rule that the
petitioners failed to establish the existence of grave abuse of discretion justifying judicial
interference.

WHEREFORE, we hereby DISMISS the petition.

SO ORDERED.

PCGG v. Jacobi [G.R. No. 155996. June 27, 2012]

03OCT
PCGG CHAIRMAN MAGDANGAL B. ELMA and PCGG, petitioners,
vs.
REINER JACOBI, CRISPIN REYES, MERCEDITAS N. GUTIERREZ, in her capacity as Undersecretary of
DOJ, respondent.

[G.R. No. 155996. June 27, 2012]

FACTS:

There were several letters showing that there exists agreement between PCGG and respondent Jacobi
entitling the latter of incentive percentage for efforts in recovering ill-gotten wealth of the Marcoses.
Respondent Jacobi filed before the Sandiganbayan thru his counsel Atty. Reyes a petition for mandamus,
prohibition and certiorari (with prayer for injunction) against PCGG for allegedly re-hiring two “trojan
horse” consultants preventing the enforcement of claims against the Marcoses. Another similar thrust
was filed before the Ombudsman against PCGG in violation of R.A. No. 3019, with a later manifestation
of withdrawing a letter because Jacobi is allegedly part of said letter. PCGG claimed that said that the
letter is a falsified document there being nothing on their records that such ever existed. PCGG through
Chairman Elma filed before the DOJ criminal complaint under Art.171 par.2 and Art. 172 pars.1 and 3 of
RPC against respondents. No summons were issued to respondents. DOJ found no probable cause on
the complaint and the case was dismissed.

ISSUES:

Remedial Law

 1. Whether certiorari under Rule 65 is the proper remedy to question the DOJ’s determination of

probable cause.

a) If it is, where should the petition be filed.

2. Whether the DOJ committed grave abuse of discretion.

a) In (i) effectively allowing Jacobi to simultaneously avail of the remedy of a petition for review and a
motion for reconsideration, and (ii) file a second motion for reconsideration.

b) In finding that no probable cause for falsification and use of falsified document exists against the
respondents

RULINGS:

Remedial Law

(1)

(a)  No. The respondents are mistaken in their claim that petition for review under Rule 43 is the proper
remedy. By weighing the evidence submitted by the parties in a preliminary investigation and by making
an independent assessment thereof, an investigating prosecutor is, to that extent, performing functions
of a quasi-judicial nature in the conduct of a preliminary investigation. However, since he does not make
a determination of the rights of any party in the proceeding, or pronounce the respondent’s guilt or
innocence (thus limiting his action to the determination of probable cause to file an information in
court), an investigating prosecutor’s function still lacks the element of adjudication essential to an
appeal under Rule 43.

As an extraordinary remedy, Rule 65 of the Rules of Court does not require that summons be issued to
the respondent; the service upon him of an order to file its Comment or Memorandum is sufficient. But
it is required that this be filed before the Court of Appeals and not directly to SC under the doctrine of
hierarchy of courts. SC’s original jurisdiction may be allowed only if there are special and important
reasons clearly and specifically set out in the petition or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of its primary jurisdiction.

(2)

(a)  No. The ruling on Jacobi’s second MR and on Atty. Reyes’ first MR cannot be appreciated as grave
abuse of discretion. While it seemingly violated established rules of procedure, it provided ample
justification therefor – the avoidance of possibility of two conflicting rulings on two motions treating of
the same inseparable subject matter.

(b)  No. The existence of several letters and reports made by the respondents to the PCGG, shows that
the PCGG was at least aware of the respondents’ efforts to assist in the recovery efforts of the
government, in general, and of the PCGG, in particular. Therefore, forging a letter that would simply be
evidence of an implied agreement for those services hardly makes any sense. Considering the
inapplicability of the presumption of authorship and the dearth of evidence to support the allegation of
conspiracy, much less of evidence directly imputing the forgery of the De Guzman letter to Jacobi, SC
found no grave abuse of discretion on the part of the DOJ in absolving respondent Jacobi.