LEODEGARIO R. BASCOS, JR. AND ELEAZAR B. PAGALILAUAN, PETITIONERS, VS. ENGR. JOSE B. TAGANAHAN AND OFFICE OF THE OMBUDSMAN, RESPONDENTS.

Bascos versus Taganahan

The Case

This is a petition for review on certiorari brought by Leodegario Bascos, Junior and Eleazar Pagalilauan against Engineer Jose Taganahan and the Office of the Ombudsman. The petitioners were officials of the National Food Authority who were found administratively liable for dishonesty and dismissed from the service. The case matters because it fixes the standard for the administrative offense of dishonesty in the acceptance of a government project, and because it teaches how the Supreme Court weighs findings of fact made by the Ombudsman and affirmed by the Court of Appeals.

Procedural History

Jose Taganahan filed a complaint-affidavit with the Office of the Ombudsman, which gave rise to an administrative case for dishonesty and grave misconduct against the petitioners and a certain Tomas Escarez. The Office of the Ombudsman rendered a decision finding the petitioners guilty of dishonesty and imposing dismissal from the service, while dismissing the complaint against Escarez. The petitioners moved for reconsideration and reinvestigation, which was denied. They then went up to the Court of Appeals by petition for review under Rule 43. The Court of Appeals initially dismissed the petition on a technical ground concerning the verification and certification of non-forum shopping, but later set that aside and reinstated the petition. On the merits, the Court of Appeals affirmed the decision and the order of the Ombudsman, and denied reconsideration. The petitioners then elevated the matter to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

On the fourteenth of December, year two thousand, the National Food Authority entered into a contract with Alheed International Trading Corporation for the supply, delivery, installation and commissioning of two rice mills, for a total contract price of nineteen million three hundred ninety-eight thousand and forty-two pesos. Seventy percent of the price was payable upon delivery, and the remaining thirty percent after installation, testing and commissioning, and upon issuance by the proper field office of a Certificate of Final Acceptance. The contract required, among other things, testing with load for at least eight hours of continuous operation for three times, and provided that no substitution of materials or equipment would be made without the written approval of the Administrator.

Engineer Taganahan, assigned to the Technical Services Directorate, traveled to San Jose, Occidental Mindoro to conduct test-milling. He reported that the test could not be completed because the generator broke down, that some components were undelivered or uninstalled, and that some did not conform to specifications. He recommended that the thirty percent balance be deferred. Despite this, the petitioners submitted to the accounting department the voucher for full payment, attaching certifications that the rice mill had been fully installed and conformed to specifications. Payment was released to Alheed Corporation.

Internal audit reports later cited numerous violations of the contract and of specifications, including non-delivery of a bucket elevator, unauthorized changes in dimensions, undersized wiring, and failure to conduct the required training. The petitioners were unable to sufficiently refute these findings. The Ombudsman found that the certifications presupposed actual inspection and testing, and that the discovery of defects after their issuance revealed that no actual inspection had taken place.

Issues

• Whether or not the petitioners are guilty of dishonesty for issuing certifications of conformity and inspection despite knowledge of the lack of actual inspection and of non-conformity with specifications.
• Whether or not the findings of the Office of the Ombudsman, affirmed by the Court of Appeals, are supported by substantial evidence.
• Whether or not the penalty of dismissal from the service was properly imposed.

Applicable Provisions

Section 8 of Presidential Decree Number 971, as adopted by the Civil Service Commission, defines the offense of dishonesty:

Dishonesty is the concealment or distortion of the truth in a matter of fact relevant to one's office or connected with the performance of his duties.

This definition is the measure of the petitioners' liability, since their certifications concealed the true state of the project from the authority that released payment.

Section 52, paragraph A, subparagraph 1 of Rule IV of the Uniform Rules on Administrative Cases provides the penalty:

Dishonesty is punishable by dismissal from the service.

This is the provision under which the Ombudsman meted the penalty of dismissal on the petitioners.

Ruling

On the first issue, the Court held that the petitioners were indeed guilty of dishonesty. Their certifications that the rice mill had been fully installed and conformed to specifications presupposed actual inspection and testing. Yet the defects were discovered only after the certifications were issued, which revealed that no actual inspection had taken place. The petitioners had full knowledge of the deviations, as shown by their own admissions of non-compliance with the test-milling requirement, and by the audit findings they failed to refute. Pagalilauan further acted in two capacities, as TSD Engineer and as Project Manager, without sufficient authority.

On the second issue, the Court held that the findings of the Ombudsman were supported by substantial evidence and were affirmed by the Court of Appeals. The Court does not disturb such findings absent a showing of grave abuse of discretion.

On the third issue, the Court held that the penalty of dismissal was proper under the Uniform Rules, since dishonesty is a grave offense punishable by dismissal.

Doctrine

Dishonesty, as an administrative offense, is the concealment or distortion of the truth in a matter of fact relevant to one's office or connected with the performance of his duties. A public officer who issues a certification of conformity or inspection without actual inspection, knowing that the project does not conform to specifications, is guilty of dishonesty. The findings of the Ombudsman, when supported by substantial evidence and affirmed by the Court of Appeals, are binding on the Supreme Court. Dishonesty is punishable by dismissal from the service under the Uniform Rules on Administrative Cases.

Disposition

The Supreme Court denied the petition and affirmed the decision and resolution of the Court of Appeals, thereby sustaining the dismissal of the petitioners from the service.

Remember This

The single line worth memorizing is that a certification of conformity without actual inspection is dishonesty, because it conceals the truth in a matter relevant to one's office. Examiners like to use this case to test the definition of dishonesty and the deference given to the factual findings of the Ombudsman.