G.R. No. 154499. February 27, 2004 (Case Brief / Digest)

### Title:
**Alberto V. Reyes, Wilfredo B. Domo-ong, and Herminio C. Principio vs. Rural Bank of San Miguel (Bulacan), Inc.: A Case of Alleged Unprofessionalism and BROKERING**

### Facts:
In a letter dated May 19, 1999, the Rural Bank of San Miguel (Bulacan), Inc. (RBSMI), through its president, charged Alberto V. Reyes and Wilfredo B. Domo-ong, both officials of the Bangko Sentral ng Pilipinas (BSP), with the violation of the Code of Conduct and Ethical Standards for Public Officials and Employees due to their involvement in the bank’s distressed financial condition. RBSMI alleged that the BSP officials used the bank’s condition as a case study in a seminar and engaged in brokering its sale.

The Monetary Board of BSP convened an Ad Hoc Committee to probe the allegations. The investigation uncovered that RBSMI had a history of violations dating back to 1995, identified during a September 1996 examination. Allegations against Reyes included urging RBSMI’s president to consider selling the bank and introducing him to prospective buyers, which RBSMI classified as “brokering.”

The case reached the Supreme Court on a Motion for Reconsideration of the petitioners (Reyes and Domo-ong) against the initial decision which found them liable for unprofessional conduct, and a Motion for Partial Reconsideration by RBSMI contesting the exoneration of Principio.

### Issues:
1. Whether Reyes and Domo-ong were liable for using RBSMI’s financial distress as a case study in a BSP seminar.
2. Whether Reyes engaged in unprofessional conduct by brokering the sale of RBSMI.
3. Whether Principio should be administratively penalized for his actions related to RBSMI examinations.

### Court’s Decision:
The Supreme Court set aside its March 14, 2003 decision, exonerating Reyes, Domo-ong, and Principio from all charges.

1. **Seminar Case Study**: The Court acknowledged that there was no evidence proving the seminar was conducted under the petitioners’ auspices. It was concluded that the Rural Banks Department had no control over the seminar’s content, which was managed by an independent office within BSP.

2. **Alleged Brokering**: The Court ruled Reyes’ actions did not constitute brokering. It interpreted brokering as acting with monetary motivation, which was not evident from Reyes’ introduction of RBSMI’s president to potential buyers. The Court clarified that Reyes’ intention was to assist in a potential bank consolidation or merger, in line with BSP’s policy, rather than to seek personal gain.

3. **Principio’s Liability**: The Court held that Principio’s actions in supervising examinations of RBSMI were within his professional capacity, and there was no evidence of undue haste or unsupported recommendations for imposing penalties.

### Doctrine:
The Case establishes the principle that the actions of higher-ranking officials in public institutions, intended towards institutional or public service objectives, should not be hastily construed as unprofessionalism or misconduct without clear evidence of personal gain or malice. Moreover, it reiterates the jurisprudence on brokering, emphasizing the necessity of monetary consideration for an act to be considered as such.

### Class Notes:
– **Code of Conduct and Ethical Standards for Public Officials and Employees (Republic Act No. 6713)**: emphasizes professionalism and excellence in public service.
– **Brokering**: Legally defined as negotiating contracts relative to property on behalf of others for a commission, which was distinguished in this case from the actions taken by Reyes.
– **Doctrine of Command Responsibility**: This case clarified its relevance in the context of high-ranking officers and the scope of their supervisory responsibilities.

#### Historical Background:
This case reflects the intersection of public administration ethics, the autonomy of regulatory bodies like the BSP, and the balance of oversight versus operational independence. It underscores the dilemmatic nature of actions taken by public officials in the line of duty, questioned within the murky waters of ethics and professional conduct.


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