GR 154499; (February, 2004) (Digest)
G.R. No. 154499 ; February 27, 2004
ALBERTO V. REYES, WILFREDO B. DOMO-ONG and HERMINIO C. PRINCIPIO, petitioners, vs. RURAL BANK OF SAN MIGUEL (BULACAN), INC., represented by HILARIO P. SORIANO, President and Principal Stockholder, respondent.
FACTS
Respondent Rural Bank of San Miguel (RBSMI) filed an administrative complaint against petitioners, BSP officials, for alleged violation of Republic Act No. 6713 (Code of Conduct and Ethical Standards). The charges stemmed from two primary incidents. First, petitioners were accused of using RBSMI’s distressed financial condition as a case study in a BSP seminar. Second, they were alleged to have engaged in “brokering” the sale of RBSMI by introducing its president to potential buyers after the bank was found to have serious violations during BSP examinations and was ordered to pay substantial fines.
The BSP’s Monetary Board created an Ad Hoc Committee to investigate. The investigation revealed that RBSMI had a history of major violations. Petitioner Reyes, as Deputy Governor, was alleged to have urged RBSMI’s president to sell the bank and introduced him to officials of other banks. However, affidavits from these potential buyers indicated that the meetings never progressed beyond exploratory talks due to mismatched intentions (total sale versus joint venture). RBSMI also contested the penalties imposed, which were later conditionally reversed by the Monetary Board pending further study.
ISSUE
Whether petitioners Alberto V. Reyes and Wilfredo B. Domo-ong are administratively liable for violation of the standards of professionalism under R.A. No. 6713 .
RULING
No. The Supreme Court granted the Motion for Reconsideration, set aside its prior Decision, and exonerated all petitioners. The Court clarified that liability for the seminar case study could not be imputed to Reyes and Domo-ong based merely on their supervisory positions. The seminar was conducted by the BSP’s Resource Management Sector, a separate department not under the petitioners’ direct control. The principle of command responsibility requires a clear showing of negligence in the supervision of subordinates, which was not established. The petitioners’ administrative oversight was limited to their own sector.
Regarding the “brokering” charge, the Court found no evidence that petitioners acted with malicious intent or for personal gain. Their actions of introducing potential investors were within the scope of their regulatory functions, aimed at addressing the bank’s distressed condition—a matter of legitimate concern for the BSP. The Court emphasized the need to grant BSP officials flexibility and insulation from vexatious suits to preserve the central bank’s institutional independence and autonomy in performing its vital regulatory mandate. The administrative complaint was dismissed.