G.R. No.

143591 May 5, 2010

TEODORO C. BORLONGAN, JR., CORAZON M. BEJASA, ARTURO E. MANUEL, JR., ERIC L. LEE, P.
SIERVO H. DIZON, BENJAMIN DE LEON, DELFIN C. GONZALES, JR., and BEN YU LIM, JR., Petitioners,
vs.
MAGDALENO M. PEÑA and HON. MANUEL Q. LIMSIACO, JR., as Judge Designate of the Municipal Trial
Court in Cities, Bago City, Respondents.

FACTS:

Respondent Pena instituted a civil case for recovery of agent’s compensation and expenses, damages and
attorney’s fees against Urban Bank and petitioners before the RTC. Petitioners filed a Motion to dismiss, including
several documents as evidence. Atty Pena claims that the documents were falsified. He subsequently filed his
Complaint-Affidavit with the City Prosecutor.

The prosecutor found probable cause and the Informations were filed before MTCC. Warrants of arrest were
issued for the petitioners / accused. Upon the issuance of the warrant of arrest, petitioners immediately posted
bail as they wanted to avoid embarrassment, being then officers of Urban Ban. On the scheduled date for the
arraignment, despite the petitioners’ refusal to enter a plea, the court a quo entered a plea of “Not Guilty” for them.
The accused questioned the validity of the warrant of arrest. However, the trial court ruled that posting of bail
constitutes a waiver of any irregularity in the issuance of a warrant of arrest.

ISSUE:
Can the petitioners still question the validity of the warrant of arrest despite posting bail? YES

HELD:
The erstwhile ruling of this Court was that posting of bail constitutes a waiver of any irregularity in the issuance of
a warrant of arrest, that has already been superseded by Section 26, Rule 114 of the Revised Rule of Criminal
Procedure. The principle that the accused is precluded from questioning the legality of the arrest after arraignment
is true only if he voluntarily enters his plea and participates during trial, without previously invoking his objections
thereto.

Moreover, considering the conduct of the petitioner after posting her personal bail bond, it cannot be argued that
she waived her right to question the finding of probable cause and to assail the warrant of arrest issued against
her by the respondent judge. There must be clear and convincing proof that the petitioner had an actual intention
to relinquish her right to question the existence of probable cause. When the only proof of intention rests on what
a party does, his act should be so manifestly consistent with, and indicative of, an intent to voluntarily and
unequivocally relinquish the particular right that no other explanation of his conduct is possible. x x x.

Herein petitioners filed the Omnibus Motion to Quash, Recall Warrants of Arrest and/or For Reinvestigation on the
same day that they posted bail. Their bail bonds likewise expressly contained a stipulation that they were not
waiving their right to question the validity of their arrest. On the date of their arraignment, petitioners refused to
enter their plea due to the fact that the issue on the legality of their arrest is still pending with the Court. Thus,
when the court a quo entered a plea of not guilty for them, there was no valid waiver of their right to preclude them
from raising the same with the Court of Appeals or this Court. The posting of bail bond was a matter of imperative
necessity to avert their incarceration; it should not be deemed as a waiver of their right to assail their arrest.
G.R. No. 180165 April 7, 2009

METROPOLITAN BANK & TRUST COMPANY, Petitioner,

vs.
HON. SECRETARY OF JUSTICE RAUL M. GONZALES, OLIVER T. YAO and DIANA T. YAO, Respondents.
G.R. No. 178947 June 26, 2013

VIRGINIA DE LOS SANTOS-DIO, as authorized representative of H.S. EQUITIES, LTD., and WESTDALE
ASSETS, LTD., Petitioner,
vs.
THE HONORABLE COURT OF APPEALS, JUDGE RAMON S. CAGUIOA, in his capacity as Presiding
Judge of Branch 74, Regional Trial Court, Olongapo City, and TIMOTHY J. DESMOND, Respondents.

x-----------------------x

G.R. No. 179079

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
TIMOTHY J. DESMOND, Respondent.

FACTS:
Virginia De Los Santos-Dio (Dio), the majority stockholder of H.S. Equities, Ltd. (HS Equities) and authorized
representative of Westdale Assets, Ltd. (Westdale), was introduced to Desmond, the Chairman and Chief
Executive Officer (CEO) of the Subic Bay Marine Exploratorium, Inc. (SBMEI), and the authorized representative
of Active Environments, Inc. and JV China, Inc. (JV China), the majority shareholder of SBMEI. Dio, on behalf of
HS Equities, decided to invest in SBMEI’s Ocean Adventure Marine Park (Ocean Adventure), a theme park to be
constructed at the Subic Bay Freeport Zone which, when operational, would showcase live performances of false-
killer whales and sea lions. In this relation, Dio claimed that Desmond led her to believe that SBMEI had a capital
of US$5,500,000.00, inclusive of the value of the marine mammals to be used in Ocean Adventure, and also
guaranteed substantial returns on investment. Desmond even presented a Business Plan. While no Certificate of
Stock was issued either to HS Equities or to Dio, HS Equities was expressly granted minority protection rights in
a subsequent Subscription and Shareholders Agreement stating that there shall be “a nominee of the Subscriber
to be elected as Treasurer/Chief Financial Officer, who may not be removed by the Board of Directors without the
affirmative vote of the Subscriber.” Dio was appointed as its Treasurer. The parties later executed two (2) Investor’s
Convertible Promissory Notes. Dio, this time on behalf of Westdale, invested in a separate business venture,
called the Miracle Beach, which involved the development of a resort owned by Desmond adjoining Ocean
Adventure. They agreed that the said investment would be used to settle SBMEI’s loan obligation to First Metro
Investment Corporation and for the construction of 48 lodging units/cabanas. However, when the corresponding
subscription agreement was presented to Dio by SBMEI for approval, it contained a clause stating that the “funds
in the Subscription Bank Account” were also to be used for the funding of Ocean Adventure’s Negative Cash Flow
This was in conflict with the exclusive purpose and intent of Westdale’s investment in Miracle Beach and as such,
Dio refused to sign the subscription agreement.
Dio further claimed that she found out that, contrary to Desmond’s representations, SBMEI actually had no
capacity to deliver on its guarantees, and that in fact, as of 2001, it was incurring losses which prompted her to
call for an audit investigation. Consequently, Dio discovered that, without her knowledge and consent, Desmond
made certain disbursements from Westdale’s special account, meant only for Miracle Beach expenditures (special
account), and diverted therein for the operating expenses of Ocean Adventure. When Desmond refused to execute
an undertaking to return the diverted funds, Dio, in her capacity as Treasurer of SBMEI, suspended the release of
the remaining funds in the aforesaid special account. Eventually, after Dio was ousted as Director and Treasurer
of SBMEI, she filed 2 criminal complaints, for Estafa (a) through false pretenses and (b) with unfaithfulness or
abuse of confidence through misappropriation or conversion both against Desmond before the Olongapo City
Prosecutor’s Office. After the preliminary investigation, the City Prosecutor issued a Resolution finding probable
cause against Desmond. The RTC ruled in favour of Desmond and declared that no probable cause exists for the
crimes charged against him since the elements of estafa were not all present. The CA upheld the RTC’s authority
to dismiss a criminal case if in the process of determining probable cause for issuing a warrant of arrest, it also
finds the evidence on record insufficient to establish probable cause.

ISSUE:

Whether the CA erred in finding no grave abuse of discretion on the part of the RTC when it dismissed the subject
information for lack of probable cause.
RULING:
Yes. Determination of probable cause may be either executive or judicial.
The first is made by the public prosecutor, during a preliminary investigation, where he is given broad discretion
to determine whether probable cause exists for the purpose of filing a criminal information in court. The second is
one made by the judge to ascertain whether a warrant of arrest should be issued against the accused. In this
respect, the judge must satisfy himself that, on the basis of the evidence submitted, there is a necessity for placing
the accused under custody in order not to frustrate the ends of justice. If the judge, therefore, finds no probable
cause, the judge cannot be forced to issue the arrest warrant.
In other words, once the information is filed with the court and the judge proceeds with his primordial task of
evaluating the evidence on record, he may either: (a) issue a warrant of arrest, if he finds probable cause; (b)
immediately dismiss the case, if the evidence on record clearly fails to establish probable cause; and (c) order the
prosecutor to submit additional evidence, in case he doubts the existence of probable cause.

Applying these principles, the Court finds that the RTC’s immediate dismissal, as affirmed by the CA, was improper
as the standard of clear lack of probable cause was not observed.