THIRD DIVISION

G.R. No. 140183             July 10, 2003

TEODORO K. KATIGBAK and BIENVENIDO E. MERELOS, petitioners,

vs.
THE SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.

CORONA, J.:

The instant petition for certiorari and prohibition under Rule 65 of the Rules of Court seeks to annul and set aside
the Resolution1 dated April 7, 1999 of the Sandiganbayan's Second Division, in Criminal Case No. 22647 denying
petitioners' motion to dismiss the case against them on demurrer to evidence and the Resolution 2 dated August 9,
1999 which denied their motion for reconsideration.

The antecedent facts show that, on July 18, 1990, the National Housing Authority (NHA) entered into a contract for
the land development of the Pahanocoy Sites and Services, Phase I, in Bacolod City with Arceo Cruz of A.C. Cruz
Construction. After the contract was confirmed by the NHA Board of Directors, the work commenced on August 1,
1990. Before the project could be completed, however, the NHA rescinded the contract on August 29, 1991 and
engaged the services of Jose Cruz of Triad Construction and Development Corporation for the unfinished portion
thereof.

Consequently, Arceo Cruz lodged a complaint with the Office of the Ombudsman. After preliminary investigation,
an information3 was filed with the Sandiganbayan on May 3, 1995, docketed as Criminal Case No. 22647, charging
the petitioners and their co-accused with the crime of violation of Section 3, paragraph (e) of RA 3019, 4 as
amended. Specifically, the petitioners and their co-accused were indicted for having allegedly conspired, through
evident bad faith and manifest partiality, in unilaterally rescinding the contract for land development with the
private complainant, Arceo Cruz, and subsequently awarding the same, without public bidding and at an exorbitant
rate, to private respondent, Jose Cruz, thereby granting unwarranted benefits to said private respondent while
causing damage and undue injury to the government and the private respondent.

On March 20, 1996, the information in Criminal Case No. 22647 was amended to read as follows:

The undersigned Special Prosecution Officers, Office of the Special Prosecutor, hereby accuses ROBERT
ANTHONY P. BALAO, TEODORO K. KATIGBAK, BIENVENIDO MERELOS, HARRY PASIMIO, JOEL LUSTRIA and
JOSE CRUZ, of violation of Section 3 (e), R.A. 3019 as amended, committed as follows:

That on or about March 16, 1992, and for sometime prior or subsequent thereto, in Bacolod City,
Philippines, and within the jurisdiction of this Honorable Court, above-named accused ROBERT ANTHONY
P. BALAO, General Manager and Member of the Board of Directors; TEODORO K. KATIGBAK, Chairman,
Board of Directors and the following members of the Board of Directors, namely: BIENVENIDO MERELOS,
HARRY PASIMIO, and JOEL LUSTRIA, all of the National Housing Authority (NHA) all public officers, while in
the performance of their official functions, committing the offense in relation to their office, and
conspiring and confederating with each other and with accused JOSE CRUZ, General Manager of the Triad
Construction and Development Corporation, did then and there wilfully, unlawfully, criminally and
through evident bad faith and manifest partiality, unilaterally rescind the contract for the land
development of Pahanocoy Sites and Services Project, Phase I of (sic) Bacolod City, an Infrastructure
Development Project of the National Housing Authority which was awarded to A.C. CRUZ CONSTRUCTION
and thereafter awarded the contract for the completion of the remaining civil works in the said NHA
project to TRIAD CONSTRUCTION AND DEVELOPMENT CORPORATION represented by JOSE CRUZ, without
public bidding and at a contract price of P10,027,970.97 which is much more than the estimated cost of
 the remaining project work of P4,963,511.99 to which A.C. CRUZ would have been entitled if the original
contract was not rescinded, thereby causing undue injury to A.C. CRUZ and to the Government.

Contrary to law."5

Upon arraignment, the petitioners and their co-accused, assisted by their counsels, entered the plea of "not guilty"
to the charge in the amended information. Pre-trial was waived by the parties per Order dated March 18, 1997.
Thereafter, trial on the merits ensued during which the prosecution presented four witnesses, namely: Adelino M.
Amurillo, Principal Engineer, stationed at the NHA Management Office on Elliptical Road, Diliman, Quezon City;
Felicisimo F. Lazarte, Jr., Department Manager, NHA Regional Projects Department; Virgilio V. Dacalos, Division
Manager, NHA Regional Projects Department; and private complainant Arceo C. Cruz. The prosecution rested its
case after the admission of its Exhibits "A," "B," "C," "D," "E," "F," "G," "H," "H-1," "J," "K," "L," "M," "N," "O," "Q,"
"R" and "S" with submarkings. The descriptions and the purposes for which each of the said prosecution exhibits
were offered in evidence were specifically stated in the written Formal Offer of Exhibits 6 dated September 22, 1997
quoted hereunder in full:

1) Exhibits "A," "B" and "C" are the Notice of Award dated July 5, 1990, the Contract For Infrastructure
Development of Pahanocoy Sites and Services Project, Phase I, Bacolod City and the Notice to Proceed
dated July 18, 1990, respectively, signed by Arceo C. Cruz as contractor and Monico V. Jacob as General
Manager of National Housing Authority (NHA), Quezon City. The purposes for which these exhibits are
offered is to prove that the private offended party and the NHA have entered into a contract whereby the
latter shall pay the former the amount of P7,686,507.55 to develop road works, drainage, and water
works for a project of NHA located at (sic) Bacolod City and known as Pahanocoy Sites and Services
Project, Phase I, Bacolod City.

2) Exhibit "D" is a Memorandum dated August 1, 1989 addressed to All Concerned Departments/Projects,
issued by Monico V. Jacob, the subject matter of which was the establishment of an "express lane" to
expedite the payment to contractors' claims for accomplished work at the regional projects area as in this
case. That the salient factor in this memorandum is found in paragraph 2 of page 2 thereof which clearly
limited the period for approving and signing by the (NHA) General Manager of claims for payment to only
one (1) working day from the time the claims of a contractor is submitted for approval and signature.

The attached Department Order No. 99 Series of 1991 dated April 19, 1991 issued by the Secretary of
Department of Public Works and Highways, JOSE P. DE JESUS to Exh. D (page 576 of Volume II the record
of the case) is also offered to show that contractors were vested with the right to suspend their work
operations if their claim for payment is not made within the period. Said Department Order declares in
essence that, and we quote for the easy reference of the Honorable Court:

'the contractor will have an option to suspend the work if there is no Government response
within fifteen (15) calendar days from the date of the written notice from the contractor.'

In addition, the purpose of this exhibit and its annex is to show that accused ROBERT ANTHONY P. BALAO
grossly violated the guideline set up by his predecessor Monico V. Jacob. On the other hand this exhibit is
offered to show the good faith and sincerity of the private offended party. Mr. Arceo Cruz, instead of
availing of his right to suspend his work because he was not paid for what he had accomplished went on
to complete his work on the project until illegally stopped and forcibly ejected by the accused.

That lastly, the said exhibit and its annex are also offered to show that inspite of compliance of the private
offended party of the conditions put up by the NHA and the Department of Public Works and Services the
approval and signing of payment was illegally, fraudulently and immorally withheld by the accused Balao.
This illegal act of accused Balao continued even after his own field officers had already signed and
recommended the payment of the private offended party's claim for payment as specified by the NHA's
own guideline.

3) Exhibit "E" is the memorandum addressed to accused Balao as General Manager of NHA dated
February 19, 1992 by field officers. The subject of this memorandum is the recommendation for the
approval and payment of the private offended party(s) claim for the latter's accomplished work described
in his fourth billing in the amount of P1,554,379.55 (NET) which was also again recommended by
accused(s) own field officer in the person of FELICISIMO E. LAZARTE, JR., Manager, Regional Projects
Department.

Exhibit "F" is the Abstract Of the Physical Accomplishment which evidences the work accomplished by the
private offended party worth P2,888,918.29 (GROSS) as of January 20, 1992 as confirmed to (sic) by all
field officers of the NHA namely: NOEL A. LOBRIDO, NHA Supervising Engineer, VIRGILIO V. DACALOS,
Division Manager Visayas, and FELICISIMO E. LAZARTE, JR., Regional Project Department Manager.

Exhibit "G" is the Summary Of Payment Estimate accomplished by the NHA itself, through its Division
Manager, Visayas Division and Manager of the Regional Project Department.

These exhibits are all offered to show that the amount of P2,888,918.30 (GROSS) being claimed by the
private offended party of (sic) his accomplished work from October 1, 1991 to January 20, 1992 was due,
justified, and complete in all the necessary papers needed for its processing and payment.

As it will be later shown in 2nd paragraph, page one of EXHIBIT "E" the NHA field officers in their
memorandum to accused Balao clearly and specifically declared, state and are quote(d) for this Honorable
Court's ready reference:

'Attached as support are pertinent documents and including detailed analysis.'

4) Exhibit "H" is the Voucher of the NHA dated January 27, 1992 which was already processed by the NHA
own personnel in the person (of) Ofelia A. Capistrano upon request of Virgilio Dacalos (Division Manager-
Visayas Division) and certified by Felicisimo E. Lazarte, Jr., Manager RPD setting aside for (sic) the gross
amount of P2,888,918.29, from which the private offended party is claiming as payment the NET amount
of P1,108,288.10 and Exhibit "I" is another Disbursement Voucher by the same NHA field officers showing
a billing of the same gross amount of P2,888,918.29 for which the private offended party has a net claim
of P466,091.49 or a total NET claim of P1,674,379.59 for the two (2) vouchers, the purpose of which is to
show that the claim of Mr. Arceo C. Cruz the private complainant of this case had already been prepared
by all the departments of the NHA concerned but for reasons only known to him was illegally, immorally
and maliciously withheld by the accused Balao.

5) Exhibit "H-1" is a letter dated August 29, 1991 of accused Balao addressed to the private offended party
informing the latter that his contract with the NHA is being rescinded for the reasons that:

a) private offended party had allegedly unilaterally suspended his work on the project.

b) that the work have suffered negative slippage or unaccomplished work of 59.11 %.

c) That the contract has expired as of July 1, 1991.

That the said exhibit is being offered to show the malice and bad faith of accused Balao whose reasons for
rescinding the contract between the private offended party and the NHA are completely contradictory to
the finding of his own field personnel.
 a) As above mentioned private offended party never suspended his work operation.

b) The work of the private offended party never have (sic) a negative slippage of 59.11%. But
even if granting, though not admitting that there was slippage the same could not be attributable
to the private offended party and could easily be corrected as Exhibits "E," "F," "G," "H" and "H-
1" show remedies were already being taken.

This baseless conclusion is aggravated by the fact that accused Balao never actually personally conducted
his own survey at the project job sites and therefore has no basis to form his own personal conclusion and
ought to have rel(ied) on the written report of his field officers above-mentioned.

c) That the expiry date of the contract was changed by way of extending the same.

6) Exhibit "J" is the private offended party's letter dated October 17, 1991 to accused Balao as General
Manager of NHA requesting the latter to lift his rescission order of the contract for the reasons stated in
the letter. The last paragraph of the last page of this letter stated that and we quote for the easy
reference of the Honorable Court:

'Furthermore in consideration of the actual findings/result of the Inventory Acceptance

Committee with a substantial accomplishment from 01 October 1991 to date, we are requesting
for payment so as it will help our cash flow on the completions of the remaining portion of the
project.'

This exhibit is offered for the purpose of showing that the rescission order of accused Balao has no legal
nor moral basis and his continued refusal to release the payment due to the private offended party
caused and is causing the government and the private offended party more damage and prejudice.

7) Exhibit "K" is a letter dated January 29, 1992 sent by the private offended party to the Board of
Directors of the NHA through its Chairman. The purpose of this exhibit is to show that accused Balao(s)
act of rescinding the NHA contract with the private offended party is illegal and therefore cannot be
justifiably enforced. As testified to by the private offended party, the Board Secretary informed him that
his letter to the Board cannot be calendared and cannot be taken up by the Board in its meeting because
the Board never rescinded the contract between the private offended party and the NHA. That the act of
rescission of the contract according to the Board Secretary, a certain Mr. De las Alas, was the personal act
of accused Balao.

8) Exhibit "L" is a memorandum dated July 14, 1992 by the Management Committee (MANCOM) of the
NHA to its General Manager, accused Balao, recommending for the lifting and the reconsideration of the
latter's rescission order of the contract of the private offended party with the NHA.

We quote the pertinent portion of the memorandum found in the last page thereof for the easy reference
of this Honorable Court:

'Considering the above facts, RPD is recommending that the decision of management rescinding
the contract of A.C. Cruz be reconsidered and he be allowed to bill subject to (sic) the condition
that said contractor will complete the project on or before March 20, 1992 as reflected in the
attached revised PERT/CPM.'

Exhibit "M" is the PERT/CPM of the Estimate For The Remaining Works of Barangay Pahanocoy, Bacolod
City, Pahanocoy Sites and Services Project, Phase I, Bacolod City.
Exhibit "N" is the memorandum to accused Balao as Manager from the Executive Services Group.

Exhibit "O" is the Deed of Assignment executed by the private offended party to US Commercial
Incorporated, a store selling construction materials, etc.

The purpose of (sic) these exhibits (Exhibit "L," "M," "N" and "O") are offered to show that the private
offended party had submitted documents and papers in compliance to the demand of accused Balao and
that inspite of this compliance accused Balao's capricious whims could not be satisfied.

These exhibits are also offered to show the premeditated and malicious scheme of accused Balao to
terminate the contract of the private offended party and to withhold or refuse the latter's claim for
payment for reason to be showed (sic) below.7

(10) Exhibit "Q" is the letter of the private offended party to accused Balao, which is offered to show that
accused Balao continuously refused to reconsider his illegal and immoral acts above-described inspite of
the acts of good faith of the private offended party just to satisfy accused Balao(s) whimsical demands and
even after the unanimous favorable recommendation of his own field officers and inspectors. We quote
the 2nd paragraph of the letter for the easy referral of this Honorable Court:

'Relative to our letter to the Chairman of the NHA-Board of Directors dated 29 January 1992, we
are requesting for a reconsideration and or lifting of the rescission order issued by your office
dated 20 January 1992, however up to this writing we are informed nothing from your office.'

And also to prove that the private offended party never discontinued nor abandoned the project which is
emphasized in his 3rd paragraph and we quote for the ready reference of the Honorable Court:

'In as much as to (sic) the illegal take over of the project inspite of our continuous operation, we
are entitled for (sic) payment of our physical accomplishment as of 20 January 1992 duly
evaluated, signed, concurred and recommended for payment by the Regional Projects
Department.'

And lastly, also to prove that all the required documents demanded from the private offended party had
been satisfied and submitted. We quote the 4th paragraph of the said letter again for the ready reference
of the Honorable Court:

'Hereunder are the following annexes for ready references:

Annex "A" — Letter to the Board dated 29 January 1992.

Annex "B" — Abstract of Physical Accomplishment dated 20 January 1992.

Annex "C" — Recommendation by RPD for Fourth (4th) Partial Payment dated 19 February 1992.

Annex "D" — Vouchers Signed by RPD.'

(11) Exhibit "R" which is the letter of accused Balao to the private offended party Arceo C. Cruz dated July
6, 1992 informing the latter that the NHA Board of Directors had approved the alleged request of the
latter for mutual termination of his contract with the NHA and that the latter has as of date of the
termination of his contract 'has still an acceptable accomplishment work of P573,107.16.'
 The above exhibit is respectfully offer(ed) to show the capacity of accused Balao to resort to a blatant
distortion of facts in order to achieve his malicious designs for the reason that the private offended party
could never had (sic) agreed to any form of mutual agreement to have his contract terminated. On the
contrary, this Honorable Court will note that the private offended party was fighting all the way to have
the rescission or termination of his contract reconsidered or lifted.

This exhibit is also offered to show accused Balao(s) capacity to fabricate fictitious facts just to succeed in
his illegal purpose as shown in this case, that he was able to secure the approval of the NHA Board of his a
(sic) action of terminating the private offended party's contract by misrepresenting to the Board that the
termination was with the consent of the private offended party when in fact he knew this assertion to be
a complete blatant misrepresentation.

The last paragraph of Exh. "R" is also offered to show the damage and prejudice accused Balao had
inflicted on the government and the private offended party as he paid to his co-accused, the late Jose M.
Cruz, his selected and preferred contractor over the offended party the amount of P573,170.16 which he
himself have (sic) already acknowledged is due and payable to the private offended party.

(12) Exhibit "S" is the letter of (sic) Notice To Proceed addressed to the late Jose M. Cruz, as the contractor
appointed by accused Balao to take over the completion of the remaining works of (sic) the Development
of Pahanocoy Sites and Services Project, including that which had already been accomplished by the
private offended party, as sent by accused Balao together with its annex which is a summary of work
description which Jose M. Cruz submitted as the new contractor of the remaining work to be done in the
project for the amount of P9,554.837.22.

The purpose of this exhibit is to show the reason why accused Balao had the contract of Mr. Arceo C. Cruz
illegally rescinded/terminated . . . and that is to favor another contractor in the person of the late Jose
Cruz.

This exhibit and its annex is also offered to prove that accused Balao was able to surreptitiously and
illegally enter into a contract with another contractor, Jose Cruz, to have the remaining work on the
Pahanocoy Sites and Services Project, Phase I, Bacolod City paying the latter P4,591,325.30 more than the
original contractor, herein private offended party, Arceo C. Cruz, would have been paid had he been
allowed to finish the project for the amount of P4,963,511.99, causing damage to the private offended
party by refusing to pay him for the work which he had already accomplished in the amount of
P2,022.242.80 and deprived him of the opportunity to finish his work with the NHA for which he should
have been paid for two (2) million pesos making a total damage of P4,963,511.99 and in addition causing
also the government to pay P5,064,459 more than what it could (sic) have paid to the private offended
party if his contract with the NHA have (sic) not been cancelled and rescinded by accused Balao.

That in the above mentioned exhibits together with the testimony of the private offended party Arceo C.
Cruz and with his witnesses, Virgilio V. Dacalos, Felicisimo F. Lazarte, Jr., and Adelino Amurillo the
prosecution respectfully submit this case for the resolution of the Honorable Court.

On January 12, 1998, the petitioners, through their respective counsels and with prior leave of court, jointly filed a
Demurrer to Evidence8 dated January 9, 1998. Petitioners' demurrer to evidence was adopted by their co-accused
Joel Lustria. For their part, accused Harry Pasimio and Robert Anthony Balao filed their own separate Demurrer to
Evidence dated January 12, 1998 and March 5, 1998, respectively.

The prosecution filed a consolidated Opposition to the Demurrer to Evidence 9 dated December 9, 1998.
On April 13, 1999, the Sandiganbayan promulgated the questioned Resolution 10 dated April 7, 1999 denying the
demurrer to evidence of all the accused.

On May 10, 1999, herein petitioners filed a joint motion for reconsideration 11 which was denied by the
Sandiganbayan in its Resolution12 dated August 9, 1999.

Undaunted, petitioners Teodoro Katigbak and Bienvenido Merelos filed the instant petition for certiorari and
prohibition13 assailing the questioned resolutions of the Sandiganbayan on the following grounds:

THE SANDIGANBAYAN GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR WANT OF JURISDICTION WHEN
IT DENIED PETITIONERS' DEMURRER TO EVIDENCE AND THEIR MOTION FOR RECONSIDERATION, CONSIDERING
THAT NONE OF THE PROSECUTION'S EVIDENCE, BOTH DOCUMENTARY AND TESTIMONIAL, INCRIMINATES
PETITIONERS AS DEMONSTRATED IN THEIR SAID DEMURRER TO EVIDENCE AND SAID RESOLUTIONS DO NOT CITE
ANY INCRIMINATING EVIDENCE AGAINST THEM AND EVEN HOLD THEM CRIMINALLY LIABLE ON MERE BELIEF AND
FOR AN OFFENSE NOT CHARGED IN THE INFORMATION.

II

SAID RESOLUTIONS DEPRIVED HEREIN PETITIONERS OF DUE PROCESS OF LAW, CONSIDERING THAT THE FINDINGS
THEREIN ARE NOT SUPPORTED BY EVIDENCE AND CONTAIN NO EXPLANATIONS OR REASONS THEREFOR.

Petitioners claim, in essence, that respondent court gravely abused its discretion when it denied their motion to
dismiss the case against them on demurrer to evidence despite the fact that the prosecution failed to establish,
either by testimonial or documentary evidence, their participation in the alleged conspiracy to unilaterally rescind
the NHA contract for land development with private complainant Arceo Cruz. The letter 14 dated August 29, 1991
rescinding the contract with the private complainant did not show the participation or concurrence of the
petitioners inasmuch as the same was signed by accused Robert P. Balao alone, in his capacity as general manager
of the NHA. The subsequent letter15 of accused Balao dated July 6, 1992 informing private complainant Cruz of the
"approval" by the NHA Board of Directors of his alleged "request for mutual termination" of the subject contract,
among other things, only showed that the petitioners could not have earlier approved the rescission of the said
contract which was entered into by the parties as early as August 29, 1991. In fact, the purported appeal 16 filed by
the private complainant never reached the NHA Board for its cognizance for the reason that, as testified to by the
private complainant himself, the NHA Board Secretary, a certain Mr. de las Alas, did not include the same in its
(Board) agenda. Being actually in the nature of a motion for reconsideration, the same should have been filed with
the office of the NHA General Manager, herein accused Robert Balao. Private complainant even admitted during
the trial17 that he did not include the petitioners, and the other members of the NHA Board of Directors for that
matter, in his complaint lodged with the Office of the Ombudsman against accused Balao.

The subsequent award of the contract for the completion of the unfinished portion of the land development
project to Triad Construction and Development Corporation, Exhibit "S" of the prosecution or the Notice to
Proceed dated March 16, 1992, did not disclose in any way petitioners' participation therein. On the contrary, the
testimony of the private complainant revealed that it was accused Robert Balao, general manager of the NHA, who
awarded the subject contract to the Triad Construction and Development Corporation without public bidding. In
the absence of any evidence to establish petitioners' participation in or concurrence with not only the rescission of
the subject NHA contract but also the eventual award thereof to private respondent Jose Cruz/Triad Construction,
the charge of conspiracy between the petitioners and their co-accused cannot be sustained.

Furthermore, petitioners assail as violative of due process the ruling of the Sandiganbayan's Resolution dated
August 9, 1999 denying their motion for reconsideration. The court a quo ruled that, even if they did not actively
participate in the commission of the crime, the petitioners could still be held liable therefor through gross
inexcusable negligence. Petitioners emphasize that the information averred that the crime was allegedly
committed by the accused through manifest partiality or evident bad faith and not through gross inexcusable
negligence.

In its Comment,18 respondent People of the Philippines contends that the evidence presented by the prosecution
established the guilt of the petitioners and their co-accused beyond reasonable doubt. In order to show the
existence of conspiracy involving the petitioners and their co-accused, public respondent states that, on August 29,
1991, accused Robert Balao sent a letter to private complainant, Arceo Cruz, informing the latter that he (Balao)
was rescinding the subject contract for abandonment of the project with negative slippage (unfinished portion) of
59.11% as of the stipulated date of completion thereof. The NHA Board of Directors of which petitioners Katigbak
and Merelos were chairman and member respectively, later approved the termination of the contract through
Board Resolution No. 2453 dated March 12, 1992, using as a ground therefor the "mutual agreement of the
parties." However, the private complainant neither suspended work on nor abandoned the project, as he
continuously worked thereon until he was forced to vacate the premises by the private respondent Jose Cruz/Triad
Construction on January 20, 1992. This fact is evident from the Abstract of Physical Accomplishment 19 which was
signed by all concerned field officers of the NHA, namely: Supervising Engineer Noel Lubrido and prosecution
witnesses Virgilio Dacalos and Felicisimo Lazarte, Jr. both of the NHA Regional Projects Department. Moreover,
there is no evidence that private complainant ever requested the "mutual termination" of the contract. On the
contrary, he even wrote accused Balao on October 17, 1991 and asked him to reconsider the rescission of the
contract but the latter instructed him to file an appeal with the NHA Board which later approved the termination of
the contract allegedly upon mutual agreement of the parties.

Anent the subsequent award to private respondent Jose Cruz/Triad Construction of the contract for the unfinished
portion of the project without public bidding, the evidence shows that accused Balao was the one who entered
into such contract in his capacity as general manager of the NHA. The said contract was approved by his co-
accused members of the NHA Board of Directors in the same Board Resolution No. 2453 dated March 12, 1992 for
a contract price of P9,554,837.22.20 The value of the subsequent contract was P4,591,325.30 21 more than what
private complainant would have been paid had he been allowed to finish the project.

Even on the assumption that respondent Sandiganbayan misappreciated the evidence presented, the error was
one of law that could only be reviewed through an appeal; it did not constitute grave abuse of discretion
correctable by certiorari.

By way of reply,22 petitioners insist that there was no proof that they participated in nor conspired with their co-
accused in the rescission of the subject contract and the award thereof to the private respondent. Under the
circumstances, the remedy of certiorari is proper because the assailed resolutions of the respondent court were
not supported by evidence, thus constituting a whimsical and capricious exercise of judgment.

A demurrer to evidence is an objection by one of the parties in an action to the effect that the evidence his
adversary produced is insufficient in point of law, whether true or not, to make out a case or sustain the issue. The
party demurring challenges the sufficiency of the whole evidence to sustain a verdict. For its part, the court, in
passing upon the sufficiency of the evidence raised in a demurrer, is merely required to ascertain whether there is
competent or sufficient evidence to sustain the indictment or to support a verdict of guilt. 23

A judicial action on a motion to dismiss on demurrer to evidence rests within the sound discretion of the court. 24 In
addition, an order denying a demurrer to evidence is interlocutory. It is not appealable. Neither can it be the
subject of a petition for certiorari in the absence of grave abuse of discretion or excess of jurisdiction, or an
oppressive exercise of judicial authority. 25 And, as correctly stressed by the public respondent, unless there is grave
abuse of discretion amounting to lack of jurisdiction, respondent Sandiganbayan's denial of petitioners' motion to
dismiss on demurrer to evidence may not be disturbed and may only be reviewed in the ordinary courts of law by
an appeal after trial.26
Hence, the issue to be resolved is whether or not respondent Sandiganbayan committed grave abuse of discretion
when it denied petitioners' motion to dismiss on demurrer to evidence.

Section 3 paragraph e of RA. 3019, as amended, provides:

Section 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already
penalized by existing law, the following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:

xxx             xxx             xxx

(e) Causing any undue injury to any party, including the Government, or giving any private party any
unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial
functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government corporations charged with the grant of
licenses or permits or other concessions.

In order to be held liable for violation of Section 3 paragraph (e) of RA 3019, as amended, the following elements
must concur: (1) the accused is a public officer discharging administrative, judicial or official functions; (2) he must
have acted with manifest partiality, evident bad faith or inexcusable negligence; and (3) his action has caused
undue injury to any party, including the Government, or has given any party any unwarranted benefit, advantage
or preference in the discharge of his functions.27

Private complainant Arceo Cruz28 testified that he entered into a contract with the NHA for the land development
of Pahanocoy Sites and Services, Phase I, in Bacolod City. Before he could finish the project, the NHA, through its
general manager, accused Robert Balao, unilaterally rescinded the contract for the reason that he was allegedly
behind schedule, which private complainant denied. Consequently, private complainant was not paid his fourth
billing in the amount of P2,888,918.29. His subsequent motion for reconsideration was not acted upon by accused
Balao who instead advised private complainant to appeal to the NHA Board. Private complainant's appeal,
however, was not even considered since the NHA Board Secretary, a certain Mr. de las Alas, did not include the
matter in the agenda. According to de las Alas,29 the rescission of the contract was the decision of accused Balao
alone. With this information, private complainant returned to accused Balao who recommended, this time, that he
bring his appeal to the management committee of the NHA. Private complainant did, again to no avail. Realizing
the futility of his efforts, private complainant engaged the legal services of a lawyer to file a formal complaint with
the Office of the Ombudsman, for which he agreed to pay 30% of any recovery.

Meanwhile, in July 1992, private complainant received a letter from accused Balao stating falsely that his "request
for mutual termination" of the contract was "approved" by the NHA Board. The truth was, up to that point, private
complainant was earnestly seeking a reconsideration of the rescission of the contract.

Private complainant admits that the sum of P573,107.60 was the monetary value of his work accomplishment as of
July 1992. However, his total collectible from the NHA as of said date amounted to P2,888,918.29 for the reason
that he continued working on the project pending his motion for reconsideration upon the suggestion of Engineers
Lazarte, Jr. and Dacalos,30 the latter being directly in charge of the project. These NHA officials believed that the
government could economize if the NHA had to pay P2,888,918.29 only, representing the balance due the private
complainant, compared to the contract price of P9,554,837.22 for the unfinished portion of the project awarded,
without public bidding, to private respondent Jose Cruz/Triad Construction.

Due to the unilateral rescission of the contract by accused Balao, private complainant was blacklisted and unable
to secure any project for at least two years until he was awarded a project in Lanao del Sur worth P50 million.
While in Mindanao, private complainant was kidnapped for 56 days. His frightful experience affected him and his
family so much that he claimed moral damages of P5 million in addition to the amount of P2,888,918.29
representing the unpaid balance from the NHA plus interest, and actual damages of P15,000.

On cross-examination, the private complainant admitted that he did not include the petitioners and the other
members of the NHA Board of Directors in his complaint at the Office of the Ombudsman. The contract which was
supposed to be completed in 120 days was commenced on July 18, 1990 and hence, the same was already
terminated when it was rescinded on August 29, 1991. Private complainant explained that an extension was being
worked out before the rescission but he could not work on the project until after the contractor in the neighboring
NHA project completed the excavation and gathering of filling materials from his project site in Phase I Pahanocoy
Sites and Services, Bacolod City. He reiterated that he was not behind schedule, much less that he abandoned the
project.

Prosecution witness Adelino M. Amurillo,31 Principal Engineer assigned at the NHA head office along Elliptical Road,
Diliman, Quezon City, testified that he was instructed by his superior to locate the official documents sought. in a
subpoena issued by the Sandiganbayan. He coordinated with the NHA office in Bacolod City and searched the steel
cabinets in his office, after which he was instructed by his superior to present the official documents in court. He
disclosed that there was no official custodian of the official records in their office and that anybody who needed
the files simply had to look for them in the proper cabinet where they were stored. With respect to perfected NHA
contracts, for instance, the Finance Section had custody of the relevant documents. The official documents he
presented in court consisted of prosecution Exhibits "A," "B," "C," "E," "F," "H," "H-1," "I," "J", "K," "M," "Q" and
"R."

Prosecution witness Felicisimo F. Lazarte, Jr.32 identified his signatures appearing on Exhibits "E," "F," "G," and "H"
in his capacity as Department Manager, NHA Regional Projects Department. However, he denied having affixed the
signatures above his typewritten names in. Exhibits "L" and "P" of the prosecution. He identified the same as that
of his subordinate, Virgilio Dacalos, whose signature was very familiar to him.

For his part, prosecution witness Virgilio Dacalos, 33 Division Manager, NHA Regional Projects Department, testified
that his basic responsibility was to conduct overall supervision of the NHA operations in the Visayas region. In the
absence of his superior, prosecution witness Lazarte, Jr., he ensured the continuity of operations by affixing his
signature over the typewritten name of Lazarte on official documents. He identified his signatures appearing above
his typewritten name in Exhibits "E," "F," "G," "H" and "H-1." He also recognized his signatures over the
typewritten name of Felicisimo Lazarte, Jr. in Exhibits "L" and "P." This prosecution witness stated that petitioners
Katigbak and Merelos had no participation in the preparation of all the documents he identified in court.

The foregoing testimonies of the prosecution witnesses did not disclose any role played by the petitioners in the
so-called "conspiracy loop" alleged by the public respondent in its Comment. The testimony of private complainant
Arceo Cruz dwelt principally on the acts of accused Robert Balao in unilaterally rescinding the contract for land
development with the private complainant and then awarding the contract for the unfinished portion of the
project, without public bidding and at an exorbitant rate, to private respondent Jose Cruz/Triad Construction. The
same testimony also told of the damage suffered by the private complainant because of the acts of accused Balao.
Nowhere, however, in his said testimony did it appear that petitioners participated in the decision to rescind the
subject contract and to award the unfinished portion of the project to the private respondent. On the contrary,
private complainant even absolved the petitioners of any participation in the complained acts of their co-accused
Balao by admitting that he never accused any member of the NHA Board of Directors of anything in his complaint
filed with the Office of the Ombudsman.34

The testimony of prosecution witness Adelino M. Amurillo was presented only for the purpose of identifying the
official documents which were the subject of the subpoena sent to the NHA central office on Elliptical Road,
Diliman, Quezon City, specifically Exhibits "A," "B," "C," "E," "F," "H," "H-1," "I," "J," "K," "M," "Q" and "R" of the
prosecution.
Prosecution witness Felicisimo Lazarte, Jr. identified his signatures appearing in Exhibits "E" (Memorandum dated
February 19, 1992 of Virgilio V. Dacalos); "F" (Abstract of Physical Accomplishments); "G" (Summary of Payment
Estimates); and "H" (Disbursement Voucher dated January 27, 1992) as well as his participation in the preparation
of the said documents. On the other hand, prosecution witness Virgilio Dacalos identified his signatures appearing
in the same Exhibits "E," "F," "G," "H" and "H-1" of the prosecution, including those appearing in Exhibits "L" and
"P" which he affixed in behalf of his superior Felicisimo Lazarte, Jr. In addition, Dacalos affirmed that petitioners
Katigbak and Merelos had no participation in any of the official documents he identified in court.

A careful scrutiny of the documentary evidence adduced by the prosecution does not support the charge of
violation of Section 3, paragraph (e) of RA 3019, as amended, in the instant information against the petitioners.
Significantly, the said pieces of documentary evidence were offered only for the purpose of establishing the
participation and liability of their co-accused, Robert Balao, as noted in the written Formal Offer of Exhibits 35 of the
prosecution dated September 22, 1997. The same was prepared and signed by Atty. Nicanor V. Villarosa, counsel
of the private complainant, with the written approval of Prosecutor Manuel M. Corpuz of the Office of the Special
Prosecutor. In this connection, the rule is explicit that courts should consider the evidence only for the purpose for
which it is offered.36

The prosecution relies heavily on NHA Board Resolution No. 2453 dated March 12, 1992 to establish the alleged
conspiracy between the petitioners and their co-accused. This resolution purportedly approved the cancellation of
the NHA contract for land development with the private complainant on the ground of "mutual termination" and
the award of the contract for the unfinished portion of the project to the private respondent Jose Cruz/Triad
Construction. However, the Court is bothered by the unexplained failure of the prosecution to include in its formal
offer of exhibits such a very vital piece of evidence in proving the existence of the alleged conspiracy among the
petitioners.

We emphasize that any evidence a party desires to submit for the consideration of the court must formally be
offered by him. Such a formal offer is necessary because it is the duty of the judge to rest his findings of fact and
his judgment strictly on the evidence offered by the parties at the trial; and no finding of fact can be sustained if
not supported by such evidence. Documents not regularly received in evidence during the trial will not be
considered in disposing of the issues in an action. Hence, we have held that:

When a party offers a particular documentary instrument as evidence during trial, he must specify the purpose for
which the document or instrument is offered. He must also describe and identify the document, and offer the
same as an exhibit so that the other party may have an opportunity of objecting to it. The offer of evidence is
necessary because it is the duty of the judge to rest his findings of facts and his judgment only and strictly upon the
evidence offered by the parties at the trial. Such offer may be made orally or in writing sufficient to show that the
party is ready and willing to submit the evidence to the court. 37

In view of the complete absence of evidence, both testimonial and documentary, to prove the liability of the
petitioners for the crime charged in the information, we find no basis for respondent Sandiganbayan's conclusion
in its assailed Resolution dated April 7, 1999 "that the prosecution has sufficiently proven the allegations in the
Amended Information and the elements of the offense" as against herein petitioners. Since the petitioners
satisfactorily demonstrated that the prosecution had failed to prove the crime charged against them, respondent
Sandiganbayan's denial of their motion to dismiss the instant criminal case on demurrer to evidence constituted
grave abuse of discretion. The denial was a capricious and whimsical exercise of judgment equivalent to lack of
jurisdiction.38

Indeed, there remains no further reason to hold the petitioners for trial. They have the right to be protected
against hasty, malicious and oppressive prosecution; to be secure from an open and public accusation of a crime
and from the trouble, expense and anxiety of a public trial. Similarly situated is the State, which must be shielded
at all times from useless and expensive litigations that only contribute to the clogging of court dockets and take a
heavy toll on its limited time and meager resources.39
WHEREFORE, in view of the foregoing, the instant petition for certiorari and prohibition is hereby GRANTED. The
assailed resolutions of the Sandiganbayan in Criminal Case No. 22647 denying petitioners' demurrer to evidence
are REVERSED and SET ASIDE. No pronouncement as to costs.

SO ORDERED.