Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 159395             May 7, 2008

OFFICE OF THE OMBUDSMAN, petitioner,
vs.
COURT OF APPEALS and DR. MERCEDITA J. MACABULOS, respondents.

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review¹ of the Decision² dated 17 March 2003 and the Resolution dated 30 July 2003 of the Court of Appeals in CA-G.R. SP No. 66411.

The Facts

On 31 March 1998, Dr. Minda L. Virtudes (Dr. Virtudes) executed a complaint-affidavit³ charging Dr. Mercedita J. Macabulos (Dr. Macabulos) with dishonesty, grave misconduct, oppression, conduct grossly prejudicial to the best interest of the service and acts unbecoming a public official in violation of the Civil Service Laws and the Code of Conduct and Ethical Standards for Public Officials and Employees.

Dr. Macabulos, who held the position of Medical Officer V at the Department of Education, Culture and Sports, National Capital Region (DECS-NCR), was the Chief of the School Health and Nutrition Unit. Dr. Virtudes was then Supervising Dentist III working under the supervision of Dr. Macabulos. Dr. Virtudes asserted in her complaint that in May 1997, Dr. Macabulos required her to submit dental and medical receipts for the liquidation of Dr. Macabulos' cash advance in the year 1995 amounting to P45,000 for the purchase of dental medicines and supplies. Dr. Virtudes did not submit receipts and invoices considering that she was not yet assigned at the School Health and Nutrition Unit, DECS-NCR when Dr. Macabulos incurred the cash advance.

Because of Dr. Virtudes' failure to produce receipts and invoices, Dr. Macabulos allegedly subjected Dr. Virtudes to several forms of harassment by: 1) denying her request for the purchase of dental supplies and equipment; 2) requiring her and her co-workers to sign an "Attendance Log Book" every time they arrived at the office and again before leaving the office even if they were already using the employees' bundy clock and signing the Attendance Sheet in the office; 3) threatening Dr. Virtudes and her co-workers with transfer of assignment; 4) sending letters to Dr. Virtudes threatening to charge her with insubordination and disrespect; and 5) threatening to kill her and her husband or do other harm to her and her family.

In her counter-affidavit, Dr. Macabulos denied forcing Dr. Virtudes to make a liquidation as the latter was not yet assigned to her unit at the time the cash advance was made. Dr. Macabulos likewise claimed that while the P45,000 cash advance was in her name being the only bonded employee in their unit, it was Dr. Antonia Lopez-Dee (Dr. Dee), who was then the Supervising Dentist, who used the money to purchase medical and dental supplies. Attached to Dr. Macabulos' counter-affidavit was an unnotarized affidavit⁴ of Dr. Dee which admitted, among others, that she requested Dr. Macabulos to make the cash advance.

Dr. Macabulos attributed the filing of the complaint against her to professional jealousy. Dr. Virtudes allegedly resented Dr. Macabulos' order, requiring all employees under her supervision to sign an attendance log book. Dr. Macabulos imposed the new requirement as a remedial measure to curb Dr. Virtudes' alleged practice of leaving the office without permission to engage in private practice at the Philippine Lung Center where Dr. Virtudes' husband was also a dentist. Dr. Macabulos denied that she instigated the transfer of Dr. Virtudes and her two friends to other units and alleged that it was Dr. Virtudes and her friends who requested for the transfer of assignment.

In her reply-affidavit, Dr. Virtudes alleged that Dr. Macabulos, in enforcing the use of the attendance log book, singled her out although there were others who failed to sign the log book. Dr. Virtudes denied engaging in private practice. Dr Virtudes pointed out that she confronted Dr. Dee, who disowned the contents of her alleged affidavit which Dr. Macabulos attached to her counter-affidavit. Dr. Virtudes claimed that it was Dr. Macabulos who made the P45,000 cash advance, improperly spent the amount, and later tried to liquidate the same with the tampered Sales Invoice No. 3366 issued by Medsordent Center to conform to the amount of the cash advance.

On 29 December 2000, Graft Investigation Officer I Ulysis S. Calumpad (GIO I Calumpad) rendered a decision absolving Dr. Macabulos from the administrative charge. However, Overall Deputy Ombudsman Margarito P. Gervacio, Jr. (Overall Deputy Ombudsman Gervacio) disapproved the decision of GIO I Calumpad.

Investigating further, the Ombudsman required Dr. Dee to confirm her statements in her unnotarized affidavit dated 14 September 1998. In reply, Dr. Dee disowned the statements in her unnotarized affidavit. In her sworn affidavit⁵ dated 9 May 2001, Dr. Dee stated that although she signed the unnotarized affidavit dated 14 September 1998, the contents of the first page were entirely different from the one attached by Dr. Macabulos in her counter-affidavit. Dr. Dee asserted that as Supervising Dentist, her job involved the requisition of the necessary health and dental supplies but not the purchasing of supplies which was done by the purchasing unit of the School Health and Nutrition Unit which was under Dr. Macabulos. Dr. Dee denied encashing the check for P45,000 which was in the name of Dr. Macabulos. Dr. Dee likewise denied purchasing the supplies indicated in the Medsordent Center sales invoice which was submitted by Dr. Macabulos to liquidate her P45,000 cash advance.

In a Memorandum⁶ dated 13 June 2001, Graft Investigation Officer II Julita M. Calderon (GIO II Calderon) reversed the decision of GIO I Calumpad. GIO II Calderon found Dr. Macabulos guilty of dishonesty, falsification, grave misconduct, conduct grossly prejudicial to the best interest of the service and violation of reasonable office rules and regulations defined and penalized under the Civil Service Laws. The Memorandum, approved by Overall Deputy Ombudsman Gervacio and Ombudsman Aniano A. Desierto, imposed upon Dr. Macabulos the penalty of dismissal from government service.

On 11 July 2001, Dr. Macabulos filed a motion for reconsideration, which was denied in an Order dated 26 July 2001.

On 31 August 2001, Dr. Macabulos filed a petition for review with the Court of Appeals. On 17 March 2003, the Court of Appeals rendered a decision, the dispositive portion of which reads:

The Ruling of the Court of Appeals

The Court of Appeals held that under Section 20(5) of Republic Act No. 6770 (RA 6770),⁸ the Office of the Ombudsman (Ombudsman) can no longer investigate the complaint since the acts complained of were committed more than one year from the filing of the complaint. The Court of Appeals found irregular the reversal of the earlier decision of GIO I Calumpad, absolving Dr. Macabulos from the administrative charge, mainly on the basis of the recantation of Dr. Dee of her previous statements contained in an affidavit.

The Court of Appeals held that Dr. Macabulos' retirement from government service did not render the administrative case moot and academic.

Lastly, citing Section 27 of RA 6770, the Court of Appeals ruled that the Memorandum Order dated 13 June 2001 of the Ombudsman, imposing upon Dr. Macabulos the penalty of dismissal from government service, is not immediately executory.

The Issues

Petitioner raises the following issues:

The Ruling of the Court

We find the petition meritorious. The Court of Appeals should have granted the motion for intervention filed by the Ombudsman. In its decision, the appellate court not only reversed the order of the Ombudsman but also delved into the investigatory power of the Ombudsman. Since the Ombudsman was not impleaded as a party when the case was appealed to the Court of Appeals in accordance with Section 6, Rule 43 of the Rules of Court,¹⁰ the Ombudsman had no other recourse but to move for intervention and reconsideration of the decision in order to prevent the undue restriction of its constitutionally mandated investigatory power.¹¹

Prescription

The Court of Appeals held that under Section 20(5) of RA 6770, the Ombudsman is already barred by prescription from investigating the complaint since it was filed more than one year from the occurrence of the complained act. We find this interpretation by the appellate court unduly restrictive of the duty of the Ombudsman as provided under the Constitution to investigate on its own, or on complaint by any person, any act or omission of any public official or employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient.¹²

Section 20 of RA 6770 reads:

The use of the word "may" is ordinarily construed as permissive or directory, indicating that a matter of discretion is involved.¹³ Thus, the word "may," when used in a statute, does not generally suggest compulsion. The use of the word "may" in Section 20(5) of RA 6770 indicates that it is within the discretion of the Ombudsman whether to conduct an investigation when a complaint is filed after one year from the occurrence of the complained act or omission.

In Filipino v. Macabuhay,¹⁴ the Court interpreted Section 20(5) of RA 6770 in this wise:

Moreover, Section 20 of RA 6770 has been clarified by Administrative Order No. 17¹⁶ (AO 17), which amended Administrative Order No. 07 (AO 07), otherwise known as the Rules of Procedure of the Office of the Ombudsman. Section 4, Rule III¹⁷ of the amended Rules of Procedure of the Office of the Ombudsman reads:

Thus, in this case, even if the complaint was filed more than one year after the alleged occurrence of the act complained of, it was within the discretion of the Ombudsman whether to pursue the investigation or dismiss the complaint.

Substantial Evidence Proving Guilt of Dr. Macabulos

Contrary to the appellate court's ruling, there was substantial evidence to hold Dr. Macabulos administratively liable. In the Memorandum dated 13 June 2001, the Ombudsman found that Dr. Macabulos purchased dental items (dentrate and castone) which were not included in the DECS Dental Program, using the P45,000 cash advance intended for the DECS Dental Program. Dr. Macabulos was required to refund the amount for items which were disallowed by the Commission on Audit (COA). Furthermore, the cash advance made on 28 March 1995 which was allegedly used for purchases made on 9 September 1995, was only liquidated in September 1997. The delay in the liquidation of the cash advance was a violation of Section 89 of Presidential Decree No. 1445 (PD 1445).¹⁸ The Ombudsman also found that the dental supplies allegedly purchased were neither inspected nor received by the Supply and Property Unit of DECS-NCR.¹⁹

Upon further investigation by the Ombudsman, it was also discovered that Dr. Macabulos misled the Ombudsman by submitting a falsified affidavit of Dr. Dee to support Dr. Macabulos' claim that it was Dr. Dee who requested the cash advance, encashed the check, and bought dental supplies. In her subsequent sworn affidavit, Dr. Dee stated that when she was made to sign the other affidavit, the contents of the first page were entirely different from the one submitted by Dr. Macabulos. Dr. Dee denied encashing the check which was under the name of Dr. Macabulos. As then Supervising Dentist, Dr. Dee's job was to request for health and dental supplies but the purchasing of supplies was done by the purchasing unit of the School Health and Nutrition Unit which was under Dr. Macabulos. Contrary to Dr. Macabulos' claim, Dr. Dee emphatically denied that she purchased dental supplies using the P45,000 cash advance of Dr. Macabulos.

Indeed, the records reveal that on 13 March 1998, the DECS-NCR Resident COA Auditor issued an Audit Observation Memorandum (Audit Memorandum),²⁰ stating that Invoice No. 3366 of Medsordent Center purportedly issued on 9 September 1995 in the amount of P45,015 was deliberately tampered to conform to the amount of cash advance sought to be liquidated by Dr. Macabulos. The Audit Memorandum also stated that the items dentrate and castone, which are generally used by dental practitioners in making dental impression, were not included in the DECS Dental Program. Dr. Macabulos then reimbursed the P2,037.50 representing the price of dentrate and castone which COA disallowed. However, on 3 November 1998, the Resident Auditor, by virtue of Section 52(2) of PD 1445,²¹ issued a management letter opening the account of Dr. Macabulos. On 3 February 1999, Dr. Macabulos paid P42,962.50²² as final settlement of her cash advance.²³

Thus, it appears from the records that Dr. Macabulos tried to liquidate with a tampered invoice the cash advance she made two years earlier. The tampered invoice also contained certain items which COA disallowed because the items were not included in the Medical and Dental Program of DECS-NCR. It is highly questionable whether the dental supplies purportedly purchased from Medsordent Center were really distributed to the regional office and the division offices since the Supply Officer of the DECS-NCR issued a certification that the items enumerated in the invoice were neither inspected nor received by the Supply and Property Unit. Furthermore, to evade responsibility, Dr. Macabulos submitted a falsified affidavit of Dr. Dee to make it appear that it was Dr. Dee who requested the cash advance to purchase dental supplies. After the COA issued a management letter opening Dr. Macabulos' account, Dr. Macabulos had to reimburse not only the amount of the disallowed items but also the whole amount of the cash advance.

Clearly, there was substantial evidence to hold Dr. Macabulos liable for dishonesty, falsification, grave misconduct, conduct grossly prejudicial to the best interest of the service, and violation of reasonable office rules and regulations defined and penalized under the Civil Service Laws. Under Section 27 of RA 6770, findings of fact by the Ombudsman when supported by substantial evidence are conclusive.

Penalty of Dismissal and its Accessory Penalties

In Resolution No. 91-1631 dated 27 December 1991, the Civil Service Commission (CSC) promulgated the Omnibus Civil Service Rules and Regulations (Omnibus Rules), pursuant to Section 12(2), Chapter 3, Title I(A), Book V of Executive Order No. 292 (EO 292).²⁴ Under Section 22, Rule XIV of the Omnibus Rules, dishonesty, falsification of official document, and grave misconduct are grave offenses punishable by dismissal. Conduct grossly prejudicial to the best interest of the service is also a grave offense punishable by suspension for 6 months and 1 day to 1 year for the first offense while violation of reasonable office rules and regulations is only a light offense punishable by reprimand for the first offense. Under Section 17 of Rule XIV of the Omnibus Rules, if the respondent is found guilty of two or more charges or counts, the penalty to be imposed should be that corresponding to the most serious charge or count and the rest shall be considered as aggravating circumstances. Although the CSC, through Resolution No. 99-1936 dated 31 August 1999, adopted the new "Uniform Rules in Administrative Cases in the Civil Service" (Uniform Rules), which took effect on 27 September 1999, the penalties imposed for the offenses charged in this case are the same under the new Uniform Rules.²⁵ Thus, the Ombudsman correctly imposed upon Dr. Macabulos the penalty of dismissal.

Under Section 9, Rule XIV of the Omnibus Rules, the penalty of dismissal from service carries with it the cancellation of eligibility, forfeiture of leave credits and retirement benefits, and the disqualification for reemployment in the government service.²⁶ However, under the new Uniform Rules, forfeiture of leave credits was deleted as an accessory penalty. Thus, under Section 58, Rule IV of the Uniform Rules, the penalty of dismissal shall carry with it the cancellation of eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the government service, unless otherwise provided in the decision.

Similarly, Section 10, Rule III of the Rules of Procedure of the Office of the Ombudsman, as amended by AO 17, provides that "the penalty of dismissal from the service shall carry with it that of cancellation of eligibility, forfeiture of retirement benefits, and the perpetual disqualification for reemployment in the government service, unless otherwise provided in the decision."

In this case, since Dr. Macabulos has already retired from the government service, her retirement benefits are forfeited but she is still entitled to receive her leave credits. She is also perpetually disqualified for reemployment in the government service and her civil service eligibility is cancelled.

Penalty of Dismissal is Executory Pending Appeal

The Court of Appeals held that the order of the Ombudsman imposing the penalty of dismissal is not immediately executory. The Court of Appeals applied the ruling in Lapid v. Court of Appeals,²⁷ that all other decisions of the Ombudsman which impose penalties that are not enumerated in Section 27 of RA 6770 are neither final nor immediately executory.

In Lapid v. Court of Appeals, the Court anchored its ruling mainly on Section 27 of RA 6770, as supported by Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman. The pertinent provisions read:

Section 27 of RA 6770:

Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman (AO 07):

The Court held in Lapid v. Court of Appeals that the Rules of Procedure of the Office of the Ombudsman "mandate that decisions of the Office of the Ombudsman where the penalty imposed is other than public censure or reprimand, suspension of not more than one month salary are still appealable and hence, not final and executory."²⁸

Subsequently, on 17 August 2000, the Ombudsman issued Administrative Order No. 14-A (AO 14-A),²⁹ amending Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman. The amendment aims to provide uniformity with other disciplining authorities in the execution or implementation of judgments and penalties in administrative disciplinary cases involving public officials and employees. Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman, as amended by AO 14-A, reads:

On 15 September 2003, AO 17 was issued, amending Rule III of the Rules of Procedure of the Office of the Ombudsman. Thus, Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman was further amended and now reads:

Hence, in the case of In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong, Secretary of DPWH,³⁰ the Court noted that Section 7 of AO 17 provides for execution of the decisions pending appeal, which provision is similar to Section 47 of the Uniform Rules on Administrative Cases in the Civil Service.³¹

More recently, in the 2007 case of Buencamino v. Court of Appeals,³² the primary issue was whether the decision of the Ombudsman suspending petitioner therein from office for six months without pay was immediately executory even pending appeal in the Court of Appeals. The Court held that the pertinent ruling in Lapid v. Court of Appeals has already been superseded by the case of In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong, Secretary of DPWH, which clearly held that decisions of the Ombudsman are immediately executory even pending appeal.

Based on the foregoing, we hold that the Ombudsman's order imposing the penalty of dismissal on Dr. Macabulos was immediately executory even pending appeal in the Court of Appeals.

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 17 March 2003 and the Resolution dated 30 July 2003 of the Court of Appeals in CA-G.R. SP No. 66411. We REINSTATE the Memorandum Order dated 13 June 2001 and the Order dated 26 July 2001 of the Office of the Ombudsman, dismissing Dr. Mercedita J. Macabulos from the government service. Since Dr. Mercedita J. Macabulos has already retired from the government service, her retirement benefits are forfeited except her accrued leave credits. She is also perpetually disqualified for reemployment in the government service and her civil service eligibility is cancelled.

SO ORDERED.

Puno, C.J., Chairperson, Azcuna, Velasco, Jr.*, Leonardo-de Castro, JJ., concur.

Footnotes