Republic of the Philippines partiality in conspiracy with EDUARDO C.

GUEVARRA, a private
SUPREME COURT contractor representing Floters Construction, did then and there
Manila wilfully and unlawfully cause undue injury, by effecting payment in
the amount of P650,000.000 when the actual cost of the public
SECOND DIVISION market of Palapag, Northern Samar, was only P301,754.65,
thereby giving unto the said private contractor unwarranted
benefits to the damage and prejudice of the government in the
total amount of P348,345.35.
G.R. No. 109991 May 22, 1995
Only accused Elias C. Quibal and Antonio U. Deniega were arrested, tried and
convicted. Accused Eduardo C. Guevarra remains at large.
ELIAS C. QUIBAL AND ANTONIO U. DENIEGA, petitioners,
vs.
THE HON. SANDIGANBAYAN (Second Division) and PEOPLE OF THE The evidence on record established the following:
PHILIPPINES, respondents.
On November 27, 1987, the municipality of Palapag, Northern Samar,
represented by its OIC vice-mayor Teodoro C. Bello, entered into a contract 2 with
the Floters Construction Company, represented by accused Eduardo C.
PUNO, J.: Guevarra, for the Construction of the municipal public market. The period for the
completion of the project was one hundred (100) days. The price
Petitioners ELIAS C. QUIBAL and ANTONIO U. DENIEGA, the mayor and was P652,562.60.
treasurer, respectively, of the municipality of Palapag, Northern Samar, and
Eduardo C. Guevarra, a private individual, were charged with violation of Section From February 16, 1988 to April 12, 1988, accused Mayor Quibal and Municipal
3 (e) of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft Treasurer Deniega, issued four (4) PNB checks in favor of the contractor in the
and Corrupt Practices Act. total amount of P650,000.00. However, sometime in June 1988, after receipt of
said payments, the contractor abandoned the project.
The Information 1 against them reads:
On August 31, 1988, a COA Special Audit Team composed of Provincial Auditor
That on or about February 16, 1988, or sometime prior or Marissa Bayona and Engineers Bienvenido Bayani and Robert Bajar inspected
subsequent thereto, in Palapag, Northern Samar, within the the progress of the construction of the Palapag municipal market.3 It discovered
jurisdiction of this Honorable Court, the accused public officers, several irregularities. It found out that only about 36.24% of the construction of
namely, ELIAS C. QUIBAL, Municipal Mayor of Palapag, the municipal market has been completed despite the lapse of the contract
Northern Samar, and ANTONIO U. DENIEGA, then Municipal period of 100 days. The actual cost of the finished work on the project was
Treasurer of Palapag, Northern Samar, while in the discharge of only P301,746.65. Unfinished work on the municipal market, as evaluated,
their public functions, through evident bad faith and manifest cost P348,235.35. It was also established that the contractor had already been
paid P650,000.00 despite the non-completion of the building. The vouchers c) P200,000.00, released on March 14, 1988, also based on a
accompanying said payments were not properly filled-up and the required voucher (Exh. "F"); and
supporting documents were not attached. The disbursement vouchers (Exhibits
"E" to "E-3") submitted by municipal treasurer Deniega to Provincial Auditor d) P50,000.00, released on April 22, 1988 (Exh. "F-1"), also
Bayona were unsigned. Likewise, the payment to the contractor in the amount of based on a similar voucher.
P340,000.00 was not accompanied by any Certificate of Acceptance issued by
the COA. COA rules require such certificate of acceptance if the disbursement But he claimed that he submitted complete and signed vouchers and the required
involves more than P200, 000.00. supporting documents to the Office of the Provincial Auditor. He insisted that the
unsigned vouchers presented in court by the prosecution were not the vouchers
In a letter4 dated January 26, 1989, Provincial Auditor Marissa Bayona submitted which supported the payments they made.
an inspection report to the COA Regional Director recommending that
appropriate legal action be taken against the municipal mayor, treasurer and the For his part, accused mayor Quibal explained that he paid the contractor more
contractor in connection with the construction of the Palapag public market. In a than his accomplished work to enable the latter to immediately purchase
letter5 dated April 7, 1989, the Ombudsman informed Mayor Quibal of the construction materials which were then selling at a low price. He further
charges filed against him by the COA. On May 12, 1989, Mayor Quibal requested maintained that the audit team should have included the value of these
the COA Regional Director for a re-audit of the cost valuation of the said construction materials (still unused at the time of audit) in its evaluation of the
construction project.6 His request was denied. project. He urged that these unused materials were worth approximately
P348,235.35, which would justify his payments to the contractor in the total
Sometime in November 1989, petitioners still continued the construction of the amount of P650,000.00.
municipal market using the stockpile of materials previously purchased by the
contractor and the contractor's retention fee. They completed the construction at After trial on the merits, the Sandiganbayan (Second Division) promulgated, a
the end of December 1989. The municipal government then started leasing the Decision7 finding accused public officials guilty beyond reasonable doubt as co-
market stalls in January 1990. principals of the crime charged. The dispositive portion reads:

The two (2) accused public officers testified in their defense. Accused Deniega, WHEREFORE, premises considered, the Court finds accused
municipal treasurer, admitted that he disbursed the total amount of P650,000.00 Elias Quibal y Capati and Antonio Deniega y Ubas GUILTY
to the contractor, viz: beyond reasonable doubt as co-principals for violation of Section
3, paragraph (e) of Republic Act No. 3019, as amended,
a) P340,000.00, released on February 16, 1988, based on the otherwise known as the Anti-Graft and Corrupt Practices Act, in
voucher (Exhibit "F-3") presented to him by the contractor, which relation to Section 9 (a) thereof, and applying Act No. 4103, as
was duly approved by the mayor. amended, otherwise known as the Indeterminate Sentence Law,
the Court imposes upon each accused the penalties of
b) P60,000.00, released on February 26, 1988; based on the imprisonment ranging from SIX (6) YEARS and ONE (1) MONTH
voucher presented to him by the contractor (Exh- "F-2"); to TEN (10) YEARS and ONE (1) DAY; perpetual disqualification
 from public office; and, to indemnify the Municipality of Palapag, a) NO UNDUE INJURY HAS BEEN CAUSED TO THE
Northern Samar, jointly and severally, the amount of P348,345.35 GOVERNMENT WITH THE FULL COMPLETION OF THE
without subsidiary imprisonment in case of insolvency. PROJECT.

With costs. b) PETITIONERS DID NOT ACT WITH MANIFEST PARTIALITY,

EVIDENT BAD FAITH AND GROSS INEXCUSABLE
Considering that their co-accused Eduardo C. Guevarra has not NEGLIGENCE.
yet been brought within the jurisdiction of this Court up to this
date, let this case be archived as against him without prejudice to We affirm petitioners' conviction.
its revival in the event of his arrest or voluntary submission to the
jurisdiction of this Court. Petitioners were charged with a violation of Section 3 (e) of R.A. 3019, viz:

SO ORDERED.8 Sec. 3. Corrupt practices by public officers. — In addition to acts

or omissions of public officers already penalized by existing law,
The two (2) accused moved for a reconsideration. It was denied. Hence this the following shall constitute corrupt practice of any public officer
petition. and are hereby declared to be unlawful:

Petitioners contend that: xxx xxx xxx

I (e) Causing any undue injury to any party,

including the Government, or giving any private
RESPONDENT SANDIGANBAYAN (SECOND DIVISION) party any unwarranted benefits, advantage or
ERRED IN NOT UPHOLDING THE CONSTITUTIONAL RIGHT preference in the discharge of his official,
OF PETITIONERS TO "DUE PROCESS" BY NOT ALLOWING administrative or judicial functions through
RE-EXAMINATION AND RE-AUDIT OF THE PROJECT WHICH manifest partiality, evident bad faith or gross
HAS ALREADY BEEN COMPLETED AND UTILIZED FOR inexcusable negligence. This provision shall apply
PUBLIC USE. to officers and employees of offices of
government corporations charged with the grant
II of licenses or permits or other concessions.

RESPONDENT SANDIGANBAYAN (SECOND DIVISION) Violation of Section 3 (e) of R.A. 3019 requires proof of the following facts, viz:
ERRED IN NOT RESOLVING THAT THE GUILT OF THE
PETITIONERS HAS NOT BEEN PROVEN BEYOND
REASONABLE DOUBT BECAUSE —
 1. The accused is a public officer discharging administrative or Petitioners' acts and omissions are, to say the least, grossly negligent. Gross
official functions or private persons charged in conspiracy with negligence is the pursuit of a course of conduct which would naturally and
them; reasonably result in injury. It is an utter disregard of or conscious indifference to
consequences. 11 In cases involving public officials, there is gross negligence
2. The public officer committed the prohibited act during the when a breach of duty is flagrant and palpable. 12
performance of his official duty or in relation to his public position
In the case at bench, petitioners' acts and omissions demonstrated an utter lack
3. The public officer acted with manifest partiality, evident bad of care in enforcing the contract for the construction of the public market and a
faith or gross, inexcusable negligence; and reckless disregard of the COA rules and regulations regarding disbursement of
municipal funds. Petitioners contend that they released P650,000.00 of the
4. His action caused undue injury to the Government or any contract price to enable the contractor to take advantage of the low cost of
private party, or gave any party any unwarranted benefit, construction materials prevailing at that time. Plainly, petitioners' act violates the
advantage or preference to such parties. 9 provision of the contract requiring that payment shall be made on the basis of the
percentage of completion of the project. Moreover, as correctly pointed out by the
Sandiganbayan:
Petitioners insist that their guilt has not been proved beyond reasonable doubt for
they did not act with manifest partiality, evident bad faith or gross, inexcusable
negligence nor did they cause any injury or damage to the municipal government . . . The escalation of prices of construction materials which
for the construction of the municipal market was eventually completed. allegedly prompted Quibal to pay the contractor prematurely is
not a justification that would absolve the accused public officers
from criminal liability. The parties could have included an
We reject these contentions.
escalation clause in the contract. . . . Moreover, there is a law
which authorizes the adjustment of contract price (R. A. 5979, as
The construction of the municipal market should have been finished on March 7, amended by PD No. 454).
1988. At the time of the audit on August 31, 1988, however, only 36.24% of the
construction of the market has been completed .Yet, out of the contract price of
xxx xxx xxx
P652,562.60, petitioners already raid the contractor a total of P650,000.00. In so
doing, petitioners disregarded the provision in the contract that payment should
be based on the percentage of work accomplishment. Moreover, the contract Petitioners also insist that no undue injury or damage or caused to the municipal
provided that in case of delay in the completion of the project, the contractor shall government considering the later completion of the public market.
be liable for liquidated damages at the rate of 1/10 of 1% of the contract price per
day of delay. 10 Petitioners did not impose this provision against the contractor. By We cannot share this myopic view. The construction of the municipal market was
their acts, petitioners clearly acted with manifest partiality and evident bad faith completed only at the end of December 1989 when it should have been finished
relative to the construction of the municipal market. by March 7, 1988. This unnecessary delay of almost two (2) years caused
considerable monetary loss to the municipal government in the form of monthly
rentals. The least that petitioners should have done was to enforce the penalty
clause of the contract (providing for payment of liquidated damages in case of disputed, which also served as basis for the accused to insist on
breach) when the contractor failed to meet his deadline on March 7, 1988. a review or re-audit" . . . ; (e) "Such conclusion of the COA arose
Instead of doing so, petitioners even made two (2) additional payments to the from many errors committed during the audit examination. . . .
contractor (on March 14 and April 22, 1988) in the total sum of P250,000.00.
Thus, it cannot be the successfully argued that the acts and omissions of xxx xxx xxx
petitioners did not cause damage injury to the municipal government.
By the denial of the re-audit, petitioner was, as claimed by him,
Finally, to bolster their claim of denial of due process, petitioners cite the case not given the right to be fully heard before the charge was filed
of Tinga v. People of the Philippines. 13 Petitioners' reliance on the Tinga case is against him at a time when the records were still available and
misplaced. In said case, we ruled that Tinga was denied due process when the past transactions still fresh in the memory of all concerned. He
Commission on Audit refused to conduct a re-evaluation of the accountabilities of was given the chance to defend before the Sandiganbayan yes,
Tinga. The ruling was based on the Court's finding that COA's evaluation of but as said Court itself observed "Tinga continued to pursue his
Tinga's accountabilities was replete with errors, thus: quest for a re-audit in his honest belief that he had not malversed
any government funds. In the process, many but not all
The Sandiganbayan Decision is replete with findings of errors in disbursement vouchers were located in the office of the Municipal
the audit made of petitioner's accountability. Thus, it said: (a) "We Treasurer of Bogo, Cebu, . . . ." Perhaps, if he had been re-
are not prepared to repeat the same mistake as the audit team audited and his accountability reviewed, a different result may
and prefer to credit Catalino Y. Tinga for said sum of P12,654.80 have been produced.
deductible from his alleged shortage" . . . ; (b) the claim of the
defense that Tinga was a victim of robbery is fully supported . . . Petitioners also claim that considering the value of the unused stockpile of
resulting in a total loss of P10,708.14 . . . . The COA auditing construction materials and supplies, a re-audit would prove that the payment they
team ought to have credited the accused in this amount in his made was justified and that the actual cost of the project at the time of the initial
total accountability for the accused never pocketed to his benefit inspection is indeed P650,000.00. We hold that the suggested re-audit would not
this amount lost . . . ; (c) Court records indubitably attest to the exonerate the petitioners. The re-audit cannot blur the fact that undue damage
fact that Laurencio R. Masong, collection clerk of the Municipal has already been caused to the municipal government in view of the delay in the
Treasurer's office of Bogo, Cebu, failed to turn over to the construction of the municipal market and the failure of the petitioners to enforce
accused collections in the total sum of P7,398.30 in October the penalty clause in the construction contract.
1976, for which reason said employee was charged and
convicted of the crime of Malversation of Public Funds . . . . Why IN VIEW WHEREOF, the appealed Decision is hereby AFFIRMED in toto. Costs
then should the COA auditors include the said sum in the against petitioners.
accountability of Tinga? . . . ; (d) "We find it relevant to observe
that a careful examination of Exh. "L-1" shows that the entry for
SO ORDERED.
withdrawal of voucher no. . . . has two circles with a cross inside
before and after the entry, indicating a cancellation or mistake
thereat . . . . Thus, the sum of P30,000 appears to be honestly Narvasa, C.J., Regalado and Mendoza, JJ., concur.