SAMUEL U. LEE vs. KBC BANK, N.V.

SAMUEL U. LEE vs. KBC BANK, N.V.
G.R. No. 164673, January 15, 2010

Carpio, J.:

Facts: idas Diversified Export Corporation (MDEC) obtained a $1,400,000 loan from KBC Bank N.V. (KBC Bank), a Belgian corporation licensed to do business in the Philippines. Samuel U. Lee (Lee), assistant treasurer and director of MDEC, executed a promissory note in favor of KBC Bank and a deed of assignment transferring all of MDEC’s rights over Confirmed Purchase Order No. MTC-548 issued by Otto Versand, a company based in Germany, and covered a shipment of girl’s basic denim jeans amounting to $1,863,050 to KBC Bank. MDEC obtained another loan, amounting to $65,000, from KBC Bank. Maybelle L. Lim (Lim), treasurer and assistant secretary of MDEC, executed a promissory note in favor of KBC Bank and a deed of assignment transferring all of MDEC’s rights over Confirmed Purchase Order No. WC-128 issued by Otto Versand, and covered a shipment of boy’s bermuda jeans amounting to $841,500 to KBC Bank.
MDEC was considered in default in paying the $65,000 loan on 30 January 1998. KBC Bank sent a letter to Otto Versand verifying the validity of Confirmed Purchase Order Nos. MTC-548 and WC-128. Otto Versand sent a facsimile message to KBC Bank stating that (1) it did not issue the purchase orders, (2) it did not order or receive the items covered by the purchase orders, and (3) it would not pay MDEC any amount.

In a complaint-affidavit, Liza M. Pajarillo, manager of the corporate division of KBC Bank, charged Lee and Lim of estafa. In his Resolution, State Prosecutor Josefino A. Subia (State Prosecutor Subia) found the existence of probable cause and recommended that two counts of estafa be filed against Lee and Lim. Accordingly, two informations for estafa against Lee and Lim were filed with the RTC. After finding probable cause, Judge Winlove M. Dumayas (Judge Dumayas) of the RTC issued warrants of arrest against Lee and Lim. Lee and Lim filed a petition for review with the Department of Justice. In his Resolution, Secretary Hernando B. Perez (Secretary Perez) directed the withdrawal of the informations filed against Lee and Lim. Secretary Perez held that the facsimile message constituted hearsay evidence. KBC Bank filed a motion for reconsideration with the Department of Justice. In a motion filed with the RTC, Assistant City Prosecutor Nora C. Sibucao (Assistant City Prosecutor Sibucao) prayed for the withdrawal of the informations filed against Lee and Lim. Judge Dumayas granted Assistant City Prosecutor Sibucao’s motion to withdraw the informations against Lee and Lim. KBC Bank filed with the Court a petition for review on certiorari under Rule 45 of the Rules of Court. In a Resolution, the Court referred the petition to the Court of Appeals pursuant to Section 6, Rule 56 of the Rules of Court. In his Resolution Secretary Simeon A. Datumanong denied KBC Bank’s 2 August 2002 motion for reconsideration. In its 10 February 2004 Decision, the Court of Appeals set aside Judge Dumayas’ 26 March 2003 Order holding that the Court thereby acquires jurisdiction over the case, which is the authority to hear and determine the case. Hence, this present petition.

Issue: Whether or not the trial court did not abdicate its duty to determine the sufficiency of the prosecution’s reason for withdrawing the informations.

Held: Court is not impressed. Whether the facsimile message is admissible in evidence and whether the element of deceit in the crime of estafa is present are matters best ventilated in a full-blown trial, not in the preliminary investigation.

Once a case is filed with the court, any disposition of it rests on the sound discretion of the court. The trial court is not bound to adopt the resolution of the Secretary of Justice, since it is mandated to independently evaluate or assess the merits of the case. Reliance on the resolution of the Secretary of Justice alone would be an abdication of its duty and jurisdiction to determine a prima facie case. The trial court may make an independent assessment of the merits of the case based on the affidavits and counter-affidavits, documents, or evidence appended to the Information; the records of the public prosecutor, which the court may order the latter to produce before the court; or any evidence already adduced before the court by the accused at the time the motion is filed by the public prosecutor.

Judge Dumayas’ failure to make his own evaluation of the merits of the case violates KBC Bank’s right to due process and constitutes grave abuse of discretion. Judge Dumayas’ order granting the Motion to Withdraw the informations is void.