Baviera Vs Paglinawan

4/28/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 515
VOL. 515, FEBRUARY 8, 2007 171

Baviera vs. Paglinawan
G.R. No. 170602. February 8, 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,
BARRY CLARE, HO KWON PING, RUDOLPH HAROLD
PETER ARKHAM, DAVID GEORGE MOIR, HIGH
EDWARD NORTON, SIR RALPH HARRY ROBINS,
ANTHONY WILLIAM PAUL STENHAM (Standard
Chartered Bank Chairman, Deputy Chairman, and
Members of the Board), SHERAZAM MAZARI (Group
Regional Head for Consumer Banking), PAUL SIMON
MORRIS, AJAY KANWAL, SRIDHAR RAMAN, MARIVEL
GONZALES, CHONA REYES, ELLEN VICTOR,
RAMONA H. BERNAD, DOMINGO CARBONELL, JR.,
and ZENAIDA IGLESIAS (Standard Chartered Bank-
Philippines Branch Heads/Officers), respondents.
Administrative Law; Doctrine of Primary Jurisdiction;

Corporation Law; Securities Regulation Code; Criminal Law; 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 Securities
and Exchange Commission, and where the complaint is criminal
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
http://central.com.ph/sfsreader/session/000001630a317bdb6a62af76003600fb002c009e/t/?o=False 1/17
said administrative tribunal to determine technical and intricate

matters of fact. The Securities Regulation Code is a special law.
Its enforcement is particularly vested in the SEC.
172
172 SUPREME COURT REPORTS ANNOTATED
Hence, all complaints for any violation of the Code and its
implementing rules and regulations should be filed with the SEC.
Where the complaint is criminal 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, no grave abuse of discretion can be ascribed
to the DOJ in dismissing petitioner’s complaint.
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 crime is a breach of the security
and peace of the people at large, an outrage 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, whom this Court described in the old case of
Suarez v. Platon, 80 Phil. 556 (1940) 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 twofold aim of which is that guilt shall not escape
or innocence suffers.
Same; Preliminary Investigation; Words and Phrases;

“Probable Cause,” Defined; 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.—Concomitant with his authority and
power to control the prosecution of criminal offenses, the public
prosecutor is vested with the discretionary power to determine
whether a prima facie case exists or not. This is done through a
preliminary investigation designed to secure
173
VOL. 515, FEBRUARY 8, 2007 173
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 SCRA 83 (2006), probable cause is
defined as such facts and circumstances that would engender a
wellfounded belief that a crime has been committed and that the
respondent is probably guilty thereof and should be held for trial.
It is the public prosecutor who determines during the preliminary
investigation whether probable cause exists. Thus, the decision
whether or not to dismiss the criminal complaint against the
accused depends on the sound discretion of the prosecutor.
Same; Same; The rule in this jurisdiction is that courts will

not interfere with the conduct of preliminary investigations or
reinvestigations or in the determination of what constitutes
sufficient probable cause for the filing of the corresponding
information against an offender; The prosecutor’s findings 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 interfere with the conduct of preliminary
investigations or reinvestigations or in the determination of what
constitutes sufficient probable cause for the filing of the
corresponding information against an offender. Courts are not
empowered to substitute their own judgment for that of the
executive branch. Differently stated, as the matter of whether to
prosecute or not is purely discretionary on his part, courts cannot
compel a public prosecutor to file the corresponding information,
upon a complaint, where he finds the evidence before him
insufficient to warrant the filing of an action in court. In sum, the
prosecutor’s findings 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.
Same; Same; In determining whether the Department of

Justice committed grave abuse of discretion, it is expedient to know
if the findings of fact of the public prosecutors were reached in an
arbitrary or despotic manner.—Grave abuse of discretion is such
capricious and whimsical exercise of judgment on the part of the
public officer
174
concerned which is equivalent to an excess or lack of jurisdiction.

The abuse of discretion must be as patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a
duty enjoined by law, or to act at all in contemplation of law, as
where the power is exercised in an arbitrary and despotic manner
by reason of passion or hostility. In determining whether 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 despotic manner.
PETITIONS for review on certiorari of the decisions of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Chavez, Miranda, Aseoche Law Offices for petitioner
M.V. Baviera.
Romulo, Mabanta, Buenaventura, Sayoc and Delos
Angeles for respondents.
SANDOVAL-GUTIERREZ, J.:
Before us are two consolidated Petitions for Review on

Certiorari assailing the
1
Decisions of the Court of Appeals
2
in
CAG.R. SP No. 87328 and in CA-G.R. SP No. 85078.
The common factual antecedents of these cases as shown
by the records are:
Manuel Baviera, petitioner in these cases, was the
former head of the HR Service Delivery and Industrial
Relations of Standard Chartered Bank-Philippines (SCB),
one of herein respondents. SCB is a foreign banking
corporation duly li-
_______________
1 Rollo, G.R. No. 168380, Vol. I, pp. 48-62. Penned by Associate Justice
Remedios A. Salazar-Fernando and concurred in by Associate Justice
Rosemarie D. Carandang and Associate Justice Monina Arevalo-Zenarosa.
2 Id., G.R. No. 170602, Vol. I, pp. 63-73. Written by Associate Justice
Juan Q. Enriquez, Jr., with Associate Justice Portia AliñoHormachuelos
and Associate Justice Vicente Q. Roxas, concurring.
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VOL. 515, FEBRUARY 8, 2007 175

censed to engage in banking, trust, and other fiduciary

business in the Philippines. Pursuant to Resolution No.
1142 dated December 3, 1992 of the Monetary Board of the
Bangko Sentral ng Pilipinas (BSP), the conduct of SCB’s
business in this jurisdiction is subject to the following
conditions:
“1. At the end of a one-year period from the date the

SCB starts its trust functions, at least 25% of its
trust accounts must be for the account of non-
residents of the Philippines and that actual foreign
exchange had been remitted into the Philippines to
fund such accounts or that the establishment of
such accounts had reduced the indebtedness of
residents (individuals or corporations or
government agencies) of the Philippines to non-
residents. At the end of the second year, the above
ratio shall be 50%, which ratio must be observed
continuously thereafter;
2. The trust operations of SCB shall be subject to all
existing laws, rules and regulations applicable to
trust services, particularly the creation of a Trust
Committee; and
3. The bank shall inform the appropriate supervising
and examining department of the BSP at the start
of its operations.”
Apparently, SCB did not comply with the above conditions.

Instead, as early as 1996, it acted as a stock broker,
soliciting from local residents 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 SCB-Hong

Kong and SCB-Singapore.
SCB’s counsel, Romulo Mabanta Buenaventura Sayoc
and Delos Angeles Law Office, advised the bank to proceed
with the selling of the foreign securities although
unregistered with the SEC, under the guise of a
“custodianship agreement”;
3
and should it be questioned, it
shall invoke Section 72
_______________
3 SEC. 72. In addition to the operations specifically authorized

elsewhere in this Act, banking institutions other than building and loan
associations may perform the following services:
176

4
of the General Banking Act (Republic Act No. 337). In
sum, SCB was able to sell GTPMF securities worth around
P6 billion to some 645 investors.
However, SCB’s operations did not remain
unchallenged. On July 18, 1997, the Investment Capital
Association of the Philippines (ICAP) filed with the SEC a
complaint alleging
5
that SCB violated the Revised
Securities Act, particularly the provision prohibiting the
selling of securities without prior registration with the
SEC; and that its actions are potentially damaging to the
local mutual fund industry.
In its answer, SCB denied offering and selling securities,
contending that it has been performing a “purely informa-
_______________
a) Receive in custody funds, documents and valuable objects, and

rent safety deposit boxes for the safeguarding of such effects;
b) Act as financial agent and buy and sell, by order of and for the
account of their customers, shares, evidences of indebtedness and
all other types of securities;
c) Make collections and payments for the account of others and
perform such other services for their customers as are not
incompatible with banking business;
d) Upon prior approval of the Monetary Board, act as managing
agent, adviser, consultant or administrator of investment
management advisory/consultancy accounts.
The banks shall perform the services permitted under subsections (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 apart from the banks own assets and liabilities.
The Monetary Board may regulate the operations authorized by this
section in order to insure that said operations do not endanger the interest
of the depositors and other creditors of the banks.
4 Now repealed by The General Banking Law of 2000 (Republic Act No.
8791).
5 Batas Pambansa Blg. 178. Now repealed by Republic Act No. 8799
(The Securities Regulation Code), which took effect on July 19. 2000.
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VOL. 515, FEBRUARY 8, 2007 177

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
Agreement”6 for offshore investments are authorized by
Section 72 of the General Banking Act; that its clients
were the ones who took the initiative to invest in securities;
and it has been acting merely as an agent or “passive order
taker” for them.
On September 2, 1997, the SEC issued a Cease and
Desist Order7against8 SCB, holding that its services violated
Sections 4(a) and 19 of the Revised Securities Act.
Meantime, the SEC indorsed ICAP’s complaint and its
supporting documents to the BSP.
On October 31, 1997, the SEC informed the Secretary of
Finance that it withdrew GTPMF securities from the
market and that it will not sell the same without the
necessary clearances from the regulatory authorities.
Meanwhile, on August 17, 1998, the BSP directed SCB
not to include investments in global mutual funds issued
abroad in its trust investments portfolio without prior
registration with the SEC.
_______________
6 Supra at footnote 3.
7 SEC. 4. Requirement of registration of securities.—(a) No securities,
except of a class exempt under any of the provisions of Section five hereof
or unless sold in any transaction exempt under any of the provisions of
Section six hereof shall be sold or offered for sale or distribution to the
public within the Philippines unless such securities shall have been
registered and permitted to be sold as hereinafter provided.
8 SEC. 19. Registration of brokers, dealers and salesmen.—No broker,

dealer or salesman shall engage in business in the Philippines as such
broker, dealer or salesman or sell any securities, including securities
exempted under this Act, except in exempt transactions, unless he has
been registered as a broker, dealer, or salesman pursuant to the
provisions of this Section.
178

On August 31, 1998, SCB sent a letter to the BSP

confirming that it will withdraw third-party fund products
which could be directly purchased by 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 bank’s
promise of 40% return on his investment and a guarantee
that his money is safe. After six (6) months, however,
petitioner learned that the value of his investment went
down to US$7,000.00. He tried to withdraw his investment
but was persuaded by Antonette de los Reyes of SCB to
hold on to it for another six (6) months in view of the
possibility that the market would pick up.
Meanwhile, on November 27, 2000, the BSP found that
SCB failed to comply with its directive of August 17, 1998.
Consequently, it was fined in the amount of P30,000.00.
The trend in the securities market, however, was
bearish and the worth of petitioner’s investment went down
further to only US$3,000.00.
On October 26, 2001, petitioner learned from Marivel
Gonzales, head of the SCB Legal and Compliance
Department, that the latter had been prohibited by the
BSP to sell GPTMF securities. Petitioner then filed with
the BSP a lettercomplaint demanding compensation for his
lost investment. But SCB denied his demand on the ground
that his investment is “regular.”
On July 15, 2003, petitioner filed with the Department
of Justice (DOJ), represented herein by its prosecutors,
public respondents, a complaint charging the above-named
officers and members of the SCB Board of Directors and
other SCB officials, private respondents, with syndicated
estafa, docketed as I.S. No. 2003-1059.
For their part, private respondents filed the following as
counter-charges against petitioner: (1) blackmail and extor-
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VOL. 515, FEBRUARY 8, 2007 179

tion, docketed as I.S. No. 2003-1059-A; and blackmail and

perjury, docketed as I.S. No. 2003-1278.
On September 29, 2003, petitioner also filed a complaint
for perjury against private respondents Paul Simon Morris
and Marivel Gonzales, docketed as I.S. No. 2003-1278-A.
On December 4, 2003, the SEC issued a Cease and
Desist Order against SCB restraining it from further
offering, soliciting, or otherwise selling its securities to the
public until these have been registered with the SEC.
Subsequently, the SEC and SCB reached an amicable
settlement.
On January 20, 2004, the SEC lifted its Cease and
Desist Order and approved the P7 million settlement
offered by SCB. Thereupon, SCB made a commitment not
to offer or sell securities without prior compliance with the
requirements of the SEC.
On February 7, 2004, petitioner filed 9
with the DOJ a
complaint for violation of Section 8.1 of the Securities
Regulation Code against private respondents, docketed as
I.S. No. 2004229.
On February
10
23, 2004, the DOJ rendered its Joint
Resolution dismissing petitioner’s complaint for
syndicated estafa in I.S. No. 2003-1059; private
respondents’ complaint for blackmail and extortion in I.S.
No. 2003-1059-A; private respondents’ complaint for
blackmail and perjury in I.S. No. 2003-1278; and
petitioner’s complaint for perjury against
_______________
9 Sec. 8. Requirement of Registration of Securities:
8.1. Securities shall not be sold or offered for sale or distribution within the
Philippines, without a registration statement duly filed with and approved by the
Commission. Prior to such sale, information on the securities, in such form and
with such substance as the Commission may prescribe, shall be made available to
each prospective purchaser.
10 Vol. I, Rollo, G.R. No. 170602, pp. 451-473.
180

private respondents Morris and Gonzales in I.S. No.

20031278-A. 11
Meanwhile, in a Resolution dated April 4, 2004, the
DOJ dismissed petitioner’s complaint in I.S. No. 2004-229
(violation of Securities Regulation Code), holding that it
should have been filed with the SEC.
Petitioner’s motions to dismiss his complaints were
denied by the DOJ. Thus, he filed with the Court of
Appeals a petition for certiorari, docketed as CA-G.R. SP
No. 85078. He alleged that the DOJ acted with grave abuse
of discretion amounting to lack or excess of jurisdiction in
dismissing his complaint for syndicated estafa.
He also filed with the Court of Appeals a separate
petition for certiorari assailing the DOJ Resolution
dismissing I.S. No. 2004-229 for violation of the Securities
Regulation Code. This petition was docketed as CA-G.R. SP
No. 87328. Petitioner claimed that the DOJ acted with
grave abuse of discretion tantamount to lack or excess of
jurisdiction in holding that the complaint should have been
filed with the SEC.
On January 7, 2005, the Court of Appeals promulgated
its Decision dismissing the petition. It sustained the ruling
of the DOJ that the case should have been filed initially
with the SEC.
Petitioner filed a motion for reconsideration but it was
denied in a Resolution dated May 27, 2005.
Meanwhile, on February 21, 2005, the Court of Appeals
rendered its Decision in CA-G.R. SP No. 85078 (involving
petitioner’s charges and respondents’ counter charges)
dismissing the petition on the ground that the purpose of a
petition for certiorari is not to evaluate and weigh the
parties’ evidence but to determine whether the assailed
Resolution of the DOJ was issued with grave abuse of
discretion tantamount to lack of jurisdiction. Again,
petitioner moved for a
_______________
11 Vol. I, Rollo, G.R. No. 168380, pp. 241-43.
181
VOL. 515, FEBRUARY 8, 2007 181

reconsideration but it was denied in a Resolution of

November 22, 2005.
Hence, the instant petitions for review on certiorari.
For our resolution is the fundamental issue of whether
the Court of Appeals erred in concluding that the DOJ did
not commit grave abuse of discretion in dismissing
petitioner’s complaint in I.S. 2004-229 for violation of
Securities Regulation Code and his complaint in I.S. No.
2003-1059 for syndicated estafa.
G.R. No 168380 Re: I.S. No. 2004-229

For violation of the Securities Regulation Code
Section 53.1 of the Securities Regulation Code provides:
“SEC. 53. Investigations, Injunctions and Prosecution of Offenses.

—
53. 1. The Commission may, in its discretion, make such
investigation as it deems necessary to determine whether any
person has violated or is about to violate any provision of this
Code, any rule, regulation or order thereunder, or any rule of an
Exchange, registered securities association, clearing agency, other
selfregulatory organization, and may require or permit any
person to file with it a statement in writing, under oath or
otherwise, as the Commission shall determine, as to all facts and
circumstances concerning the matter to be investigated. The
Commission may publish information concerning any such
violations and to investigate any fact, condition, practice or
matter which it may deem necessary or proper to aid in the
enforcement of the provisions of this Code, in the prescribing of
rules and regulations thereunder, or in securing information to
serve as a basis for recommending further legislation concerning
the matters to which this Code relates: Provided, however, That
any person requested or subpoenaed to produce documents or
testify in any investigation shall simultaneously be notified in
writing of the purpose of such investigation: Provided, further,
That all criminal complaints for violations of this Code and the
implementing rules and regulations enforced or administered by
the Commission shall be referred to the Department
182

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, That the
investigation, prosecution, and trial of such cases shall be given
priority.”
The Court of Appeals held that under the above provision,

a criminal complaint for violation of any law or rule
administered by the SEC must first be filed with the latter.
If the Commission finds that there is probable cause, then
it should refer the case to the DOJ. Since petitioner failed
to comply with the foregoing procedural requirement, the
DOJ did not gravely abuse its discretion in dismissing his
complaint in I.S. No. 2004-229.
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
12
to determine technical and intricate matters of
fact. The Securities Regulation Code is a special law. Its
enforcement is particularly vested in the SEC. Hence, all
complaints for any violation of the Code and its
implementing rules and regulations should be filed with
the SEC. Where the complaint is criminal in nature, the
SEC shall indorse the complaint to the DOJ for preliminary
investigation and prosecution as provided in Section 53.1
earlier quoted.
_______________
12 Saavedra, Jr. v. Securities and Exchange Commission, G.R. No.

80879, March 21, 1988, 159 SCRA 57, 62, citing Pambujan Sur United
Mine Workers v. Samar Mining Co., Inc., 94 Phil. 932 (1954).
183
VOL. 515, FEBRUARY 8, 2007 183

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, no grave
abuse of discretion can be ascribed to the DOJ in
dismissing petitioner’s complaint.
G.R. No. 170602 Re: I.S. No. 2003-1059 for

Syndicated Estafa
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
13
shall direct and
control the prosecution of the offense. This representative
of the State is the public prosecutor, whom 14
this Court
described in the old case of Suarez v. 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 twofold aim of which is
that guilt shall not escape or innocence suffers.”
Concomitant with his authority and power to control the

prosecution of criminal offenses, the public prosecutor is
vested with the discretionary power
15
to determine whether
a prima facie case exists or not. This is done through a
pre-
_______________
13 Tan, Jr. v. Gallardo, G.R. Nos. 41213-14, October 5, 1976, 73 SCRA

306, 310.
14 80 Phil. 556 (1940).
15 Zulueta v. Nicolas, 102 Phil. 944 (1958).
184

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 (b)
whether16 there is probable cause that the accused is guilty
17
thereof. In Pontejos v. Office of the Ombudsman,
probable cause is defined as such facts and circumstances

that would engender a wellfounded belief that a crime has
been committed and that the respondent is probably guilty
thereof and should be held for trial. It is the public
prosecutor who determines during the preliminary
investigation whether probable cause exists. Thus, the
decision whether or not to dismiss the criminal complaint
against the accused depends on the sound discretion of the
prosecutor.
Given this latitude and authority granted by law to the
investigating prosecutor, the rule in this jurisdiction is that
courts will not interfere with the conduct of preliminary
investigations or reinvestigations or in the determination
of what constitutes sufficient probable cause for the filing 18
of the corresponding information against an offender.
Courts are not empowered to substitute19 their own
judgment for that of the executive branch. Differently
stated, as the matter of whether to prosecute or not is
purely discretionary on his part, courts cannot compel a
public prosecutor to file the corresponding information,
upon a complaint, where he finds the evidence before him
insufficient to warrant the filing of an action in court. In
sum, the
_______________
16 Ching v. Secretary of Justice, G.R. No. 164317, February 6, 2006, 481

SCRA 609.
17 G.R. Nos. 158613-14, February 22, 2006, 483 SCRA 83, 92.
18 Glaxosmithkline Philippines, Inc. v. Malik and Ateeque, G.R. No.
166824, August 17, 2006, 499 SCRA 268, 272-273, citing Punzalan v. Dela
Peña and Cagara , 434 SCRA 601 (2004).
19 Alcaraz v. Gonzales, G.R. No. 164715, September 20, 2006, 502 SCRA
518, 529, citing Metropolitan Bank and Trust Company v. Tonda, 392
Phil. 797; 338 SCRA 254 (2000).
185
VOL. 515, FEBRUARY 8, 2007 185

prosecutor’s findings on the existence of probable cause are

not subject to review by the courts, unless these are
patently shown
20
to have been made with grave abuse of
discretion.
Grave abuse of discretion is such capricious and
whimsical exercise of judgment on the part of the public
officer concerned which is equivalent to an excess or lack of
jurisdiction. The abuse of discretion must be as patent and

gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law, or to act
at all in contemplation of law, as where the power is
exercised in an arbitrary
21
and despotic manner by reason of
passion or hostility.
In determining whether 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
despotic manner.
The Court of Appeals held that petitioner’s evidence is
insufficient to establish probable cause for syndicated
estafa. There is no showing from the record that private
respondents herein did induce petitioner by false
representations to invest in the GTPMF securities. Nor did
they act as a syndicate to misappropriate his money for
their own benefit. Rather, they invested it in accordance
with his written instructions. That he lost his investment is
not their fault since it was highly speculative.
Records show that public respondents examined
petitioner’s evidence with care, well aware of their duty to
prevent material damage to his constitutional right to
liberty and fair play. In Suarez previously cited, this Court
made it clear that a public prosecutor’s duty is two-fold. On
one hand, he is
_______________
20 Glaxosmithkline Philippines, Inc. v. Malik and Ateeque, supra, p.

273, citing Cabaling v. People, 376 SCRA 113 (2002).
21 Soria v. Desierto, G.R. Nos. 153524-25, January 31, 2005, 450 SCRA
339. 345, citing Duero v. Court of Appeals, 373 SCRA 11 (2002), Perez v.
Office of the Ombudsman, 429 SCRA 357 (2004).
186

bound by his oath of office to prosecute persons where the

complainant’s evidence is ample and sufficient to show
prima facie guilt of a crime. Yet, on the other hand, he is
likewise duty-bound to protect innocent22 persons from
groundless, false, or malicious prosecution.
Hence, we hold that the Court of Appeals was correct in
dismissing the petition for review against private
respondents and in concluding that the DOJ did not act
with grave abuse of discretion tantamount to lack or excess

of jurisdiction.
On petitioner’s complaint for violation of the Securities
Regulation Code, suffice it to state that, as aptly declared
by the Court of Appeals, he should have filed it with the
SEC, not the DOJ. Again, there is no indication here that
in dismissing petitioner’s complaint, the DOJ acted
capriciously or arbitrarily.
WHEREFORE, we DENY the petitions and AFFIRM the
assailed Decisions of the Court of Appeals in CA-G.R. SP
No. 87328 and in CA-G.R. SP No. 85078. Costs against
petitioner.
SO ORDERED.
Puno (C.J., Chairperson), Azcuna and Garcia, JJ.,

concur.
Corona, J., On Leave.
Petitions denied, assailed decisions affirmed.
Notes.—Even assuming that party-list representatives

comprise a sufficient number and have agreed to designate
common nominees to the HRET and the CA, their primary
recourse clearly rests with the House of Representatives
and not with the Supreme Court. Under the doctrine of
primary jurisdiction, prior recourse to the House of
Representatives is
_______________
22 Vda. de Bagatua v. Revilla and Lombos, 104 Phil. 392 (1958).
187
VOL. 515, FEBRUARY 8, 2007 187

People vs. Nicolas
necessary before petitioners may bring the instant case to

the court. (Pimentel, Jr. vs. House of Representatives
Electoral Tribunal, 393 SCRA 227 [2002])
The doctrine of primary jurisdiction precludes a court
from arrogating unto itself the authority to resolve a
controversy the jurisdiction over which is initially lodged
with an administrative body of special competence. (Gala
vs. Ellice AgroIndustrial Corporation, 418 SCRA 431
[2003])
——o0o——
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4/28/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 515

VOL. 515, FEBRUARY 8, 2007 171

G.R. No. 170602. February 8, 2007.*

MANUEL V. BAVIERA, petitioner, vs. STANDARD

Administrative Law; Doctrine of Primary Jurisdiction;

said administrative tribunal to determine technical and intricate

172 SUPREME COURT REPORTS ANNOTATED

Baviera vs. Paglinawan

Criminal Procedure; The mandate that all criminal actions,

Same; Preliminary Investigation; Words and Phrases;

committed, and, (b) whether there is probable cause that the

VOL. 515, FEBRUARY 8, 2007 173

Baviera vs. Paglinawan

the respondent from hasty, malicious and oppressive prosecution.

Same; Same; The rule in this jurisdiction is that courts will

subject to review by the courts, unless these are patently shown to

Same; Same; In determining whether the Department of

174 SUPREME COURT REPORTS ANNOTATED

Baviera vs. Paglinawan

concerned which is equivalent to an excess or lack of jurisdiction.

PETITIONS for review on certiorari of the decisions of the

Before us are two consolidated Petitions for Review on

VOL. 515, FEBRUARY 8, 2007 175

censed to engage in banking, trust, and other fiduciary

“1. At the end of a one-year period from the date the

Apparently, SCB did not comply with the above conditions.

(SEC). These were then remitted outwardly to SCB-Hong

3 SEC. 72. In addition to the operations specifically authorized

176 SUPREME COURT REPORTS ANNOTATED

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

VOL. 515, FEBRUARY 8, 2007 177

tional function” without solicitations for any of its

8 SEC. 19. Registration of brokers, dealers and salesmen.—No broker,

178 SUPREME COURT REPORTS ANNOTATED

On August 31, 1998, SCB sent a letter to the BSP

VOL. 515, FEBRUARY 8, 2007 179

tion, docketed as I.S. No. 2003-1059-A; and blackmail and

9 Sec. 8. Requirement of Registration of Securities:

10 Vol. I, Rollo, G.R. No. 170602, pp. 451-473.

180 SUPREME COURT REPORTS ANNOTATED

Baviera vs. Paglinawan

private respondents Morris and Gonzales in I.S. No.

11 Vol. I, Rollo, G.R. No. 168380, pp. 241-43.

VOL. 515, FEBRUARY 8, 2007 181

reconsideration but it was denied in a Resolution of

G.R. No 168380 Re: I.S. No. 2004-229

Section 53.1 of the Securities Regulation Code provides:

“SEC. 53. Investigations, Injunctions and Prosecution of Offenses.

182 SUPREME COURT REPORTS ANNOTATED

of Justice for preliminary investigation and prosecution before the

arising from the act, the Commission shall take appropriate

The Court of Appeals held that under the above provision,

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

VOL. 515, FEBRUARY 8, 2007 183

We thus agree with the Court of Appeals that petitioner

G.R. No. 170602 Re: I.S. No. 2003-1059 for

Section 5, Rule 110 of the 2000 Rules of Criminal

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