Guadines vs. Sandiganbayan

A private contractor who delivers lumber without the requisite legal documents, knowing that such lumber was confiscated by DENR officials, and who accepts payment from the government for such confiscated lumber, is liable for violation of Section 3(e) of R.A. No. 3019 in conspiracy with public officials, as her acts caused undue injury to the government which had no obligation to pay for confiscated lumber considered as government property.

The petitioner, Virginia M. Guadines, owned and managed V.M. Guadines Construction Supply, a private construction supply business in Polillo, Quezon. The Provincial Government of Quezon, through its Provincial Treasurer, conducted a public bidding for materials to be used in the repair and construction of Navotas Bridge along the Polillo-Burdeos provincial road. The contract was awarded to petitioner's business. The case involves the interplay between government procurement contracts and forestry laws, specifically P.D. No. 705 (the Forestry Code of the Philippines), which authorizes the DENR Secretary or his authorized representative to confiscate forest products illegally cut, gathered, removed, or possessed, and to dispose of the same in accordance with pertinent laws. The Anti-Graft and Corrupt Practices Act (R.A. No. 3019), Section 3(e), penalizes public officers who cause undue injury to any party, including the Government, or give any private party unwarranted benefits, advantage, or preference through manifest partiality, evident bad faith, or gross inexcusable negligence.

On August 25, 1992, the Provincial Treasurer of Quezon directed the Municipal Treasurer of Polillo, Quezon, Naime Ayuma, to conduct a public bidding for materials to be used in the repair and construction of Navotas Bridge along the Polillo-Burdeos provincial road at Barangay Sibulan. The bidding was held on September 8, 1992, and the contract was awarded to V.M. Guadines Construction Supply, owned and managed by petitioner Virginia M. Guadines. On October 19, 1992, Purchase Order No. 2019 was issued by the Provincial Government of Quezon for construction materials in the total price of ₱83,228.00. On November 13, 1992, the materials, consisting of lumber (Macaasim hardwood cut by chainsaw), were stockpiled along the road about five meters away from the Navotas Bridge and received by Bernie H. Azaula, who was then Barangay Chairman of Poblacion, Polillo and a Member of the Sangguniang Bayan.

On November 20, 1992, a team of DENR officials and forest rangers from the CENR Polillo Station, led by Officer-in-Charge Herminio M. Salvosa, confiscated seventy-three (73) pieces of Macaasim lumber (4,172 board feet valued at ₱41,172.00) stockpiled alongside the road. They measured the confiscated lumber using Marking Hatchet No. 1742 and marked the lumber with the words "DENR CONFISCATED" using white paint. No person or entity was apprehended as owner or possessor of the lumber. Since Azaula volunteered to take custody as a public official in the locality, the CENR turned over the seized lumber to him and required him to sign the Seizure Receipt.

On December 14, 1992, the Sangguniang Bayan of Polillo, acting upon the petition of some 460 individuals, resolved to formally request the DENR Regional Director to donate the seized lumber for use in the delayed repair and construction of the Navotas Bridge. Azaula was among those members who opposed the proposal, insisting that the contractor (petitioner) be paid for said materials. The Sanggunian later passed Kapasiyahan Blg. 24, t. 1993 requesting the DPWH to send personnel to work on the bridge. On January 28, 1993, Municipal Treasurer Ayuma prepared the Inspection Report stating that the materials specified under Purchase Order No. 2019 were delivered by the contractor and "[r]eceived in good order and condition," signed by both Ayuma and Mayor Escara. By February 5, 1993, the repair and construction of Navotas Bridge was finished. Upon the request of Azaula, Disbursement Voucher 001-9302-957 was prepared, authorizing the Provincial Treasurer to pay V.M. Guadines Construction Supply the total amount of ₱83,228.00. On February 18, 1993, petitioner received the amount of ₱83,228.00 as payment for the lumber and other materials she delivered.

In a Memorandum dated February 26, 1993, CENR Polillo Station OIC Salvosa reported that despite warnings from forest rangers, workers headed by Engr. Nierva of the PEO utilized the confiscated lumber in the construction of Navotas Bridge. CENRO Juan dela Cruz prepared a memorandum-report and forwarded it to the DENR Region IV Executive Director. On May 5, 1993, the Provincial Auditor directed State Auditor II Edgardo A. Mendoza to conduct an investigation regarding the payment made for confiscated lumber. Mendoza confirmed that the materials used in the bridge were the same ones confiscated by the CENR personnel, and concluded that there was no justification for the government to pay the purchase price. On November 15, 1994, a Notice of Disallowance was issued by the COA for the amount of ₱70,924.00, representing the value of the confiscated lumber actually used in the construction of the bridge after deducting the value of common materials such as nails and "kawad."

During the trial, the prosecution presented testimonial evidence from Abanica, a Construction Maintenance employee of the PEO, who testified that the lumber used was marked "confiscated" and that Engr. Nierva told him he had an agreement with Azaula. Salvosa testified that he saw the lumber used in the new bridge marked with "DENR CONFISCATED" and hatchet number 1742. Dela Cruz testified about referring the matter to the DENR Regional Executive Director. COA Auditor Mendoza confirmed that the lumber used bore the white paint marking "DENR" and contained hatchet numbers when inspected from under the new wooden bridge. Petitioner presented PO2 Reny I. Marasigan, who testified that lumber confiscated near the Navotas Bridge in 1993 were deposited for safekeeping and were still intact at the back of their building, but Marasigan failed to present proper documents evidencing the official transfer of custody.

• Identity of the Lumber: Petitioner argued that the materials she delivered on November 13, 1992 were not the same lumber confiscated by the DENR field personnel on November 20, 1992, since the delivered lumber left unguarded along the national highway could have been stolen, explaining the smaller number (73) of confiscated lumber than the actual quantity (99) delivered.
• Fulfillment of Contractual Obligation: Petitioner asserted that after delivery and receipt of the lumber in good order and condition by the provincial government through its officials, she had already fulfilled her contractual obligation, and what happened to the lumber after delivery was no longer within her control.
• Lack of Conspiracy: Petitioner contended that evidence was wanting to support the prosecution case against her, and that a finding of guilt must not be based on speculation; even if the materials used bore the DENR marking "CONFISCATED," it cannot automatically mean those were the same lumber she delivered.
• Absence of Damage: Petitioner argued that the provincial government suffered no damage or injury since the repair and construction of the Navotas Bridge was completed, and the municipalities of Polillo and Burdeos benefited from the project.
• Improper Charge: Petitioner contended that assuming her lumber were actually confiscated by the DENR, what should have been filed against her was a case for violation of the Forestry Code, not the Anti-Graft and Corrupt Practices Act.
• Good Faith: Petitioner asserted she acted in good faith, as no Sangguniang Bayan member interposed an objection to the payment made in her favor, and the certification in the Inspection Report that the delivered lumber were received in good order and condition meant there was no "CONFISCATED" marking found thereon.

N/A — The decision does not separately recount the arguments of the respondents (Sandiganbayan and People of the Philippines) beyond the prosecution's evidence and the Sandiganbayan's findings as discussed in the Facts and Ruling Rationale sections.

• Identity of the Lumber: Whether the Sandiganbayan erred in finding that the lumber delivered by petitioner was the same lumber confiscated by the CENR forest rangers and used in the repair and construction of the Navotas Bridge.
• Conspiracy: Whether the Sandiganbayan gravely abused its discretion in finding that petitioner conspired with Azaula and Escara in defrauding the provincial government.
• Undue Injury: Whether the provincial government suffered undue injury or damage when it paid petitioner for the confiscated lumber.
• Good Faith: Whether petitioner acted in good faith in receiving payment for the lumber delivered.
• Proper Charge: Whether petitioner should have been prosecuted under the Forestry Code instead of the Anti-Graft and Corrupt Practices Act.

• Identity of the Lumber: No. The evidence on record clearly showed that the lumber delivered by petitioner was the same lumber confiscated by the CENR forest rangers and used in the bridge construction, as established by the prosecution's documentary and testimonial evidence, including the testimony of Salvosa, Abanica, Dela Cruz, and Mendoza.
• Conspiracy: Yes. Conspiracy was established by petitioner's acts of making delivery to Azaula instead of the provincial government or PEO, evading apprehension for the illegally cut logs, appealing to the local sanggunian for clearance, and later accepting payment with the assistance of Azaula and Escara.
• Undue Injury: Yes. By accepting payment for delivery of lumber found to be without supporting documents as required by law, petitioner caused undue injury or damage to the provincial government, which had no obligation to pay for confiscated lumber considered as government property.
• Good Faith: No. Petitioner's actual knowledge of the absence of supporting legal documents for the lumber she contracted to deliver — which resulted in its confiscation by the CENR personnel — belies her claim of good faith in receiving the payment.
• Proper Charge: No. Petitioner's contention that she should have been prosecuted under the Forestry Code ignores the fact that she never came out to claim ownership of the seized lumber until her appearance before the Sangguniang Bayan, and the charge under Section 3(e) of R.A. No. 3019 was properly brought against her as a private person charged in conspiracy with public officers.

• Identity of the Lumber: The Court found that the Sandiganbayan's factual findings are conclusive upon the Court except in certain exceptional circumstances, none of which petitioner established. The prosecution's documentary and testimonial evidence satisfactorily established that it was petitioner's lumber which were later confiscated by CENR forest rangers and used in the bridge repair and construction. The CENR officials prepared the Confiscation Report and Seizure Receipt as part of their official duties and testified in court detailing the incident. Two other witnesses corroborated their declaration that the confiscated lumber were actually used in the bridge construction. Abanica testified that the lumber used was marked "confiscated," Salvosa testified that he saw the lumber marked with "DENR CONFISCATED" and hatchet number 1742, and COA Auditor Mendoza confirmed that the lumber used bore the white paint marking "DENR" and contained hatchet numbers. Petitioner's witness, PO2 Marasigan, failed to present proper documents evidencing the official transfer of custody of the seized lumber to the PNP station, and he himself signed the Confiscation Report and Seizure Receipt as part of the apprehending team.
• Conspiracy: The Court applied the principle that when defendants by their acts aimed at the same object, one performing one part and the other performing another part so as to complete it, with a view to the attainment of the same object, and their acts though apparently independent were in fact concerted and cooperative, the court will be justified in concluding that said defendants were engaged in a conspiracy. Petitioner's participation and cooperation was indispensable in defrauding the government. Her acts of making delivery to Azaula instead of the provincial government or PEO, evading apprehension for the illegally cut logs, pursuing clearance for the release of the products by appealing to the local sanggunian, and later accepting payment with the assistance of Azaula and Escara clearly showed her complicity in the anomalous disbursement.
• Undue Injury: The Court cited the essential elements of the crime under Section 3(e) of R.A. No. 3019: (1) the accused are public officers or private persons charged in conspiracy with them; (2) said public officers commit the prohibited acts during the performance of their official duties or in relation to their public position; (3) they caused undue injury to any party, whether the government or a private party; (4) such injury is caused by giving unwarranted benefits, advantage or preference to such parties; and (5) the public officers have acted with manifest partiality, evident bad faith or gross inexcusable negligence. The Court explained, citing Santos vs. People, that "undue injury" is consistently interpreted as "actual damage," akin to the civil law concept. By accepting payment for delivery of lumber found to be without supporting documents as required by law, petitioner caused undue injury or damage to the provincial government, which had no obligation to pay for confiscated lumber considered as government property. Only the DENR Secretary or his representative can dispose of such confiscated lumber pursuant to Section 68-A of P.D. No. 705.
• Good Faith: The Court held that petitioner's actual knowledge of the absence of supporting legal documents for the lumber she contracted to deliver — which resulted in its confiscation by the CENR personnel — belies her claim of good faith. The Court cited the minutes of the Sangguniang Bayan session of December 14, 1992, which revealed that petitioner was fully aware of the confiscation of her lumber stockpiled along the Polillo-Burdeos provincial road. The Court accorded full recognition to the minutes as the official repository of what actually transpires in every proceeding, citing De los Reyes vs. Sandiganbayan. The certified copy of the minutes, being a public document and an official record of the proceedings, is considered prima facie evidence of the facts stated therein.
• Proper Charge: The Court held that petitioner's contention that she should have been prosecuted for illegal cutting, gathering and possession of timber under Section 68 of P.D. No. 705 ignores the fact that she never came out to claim ownership of the seized lumber until her appearance before the Sangguniang Bayan. The Court also noted that basic is the rule that provisions of existing laws and regulations are read into and form an integral part of contracts, more so in the case of government contracts. It is an implied condition in the subject contract that petitioner as private contractor would comply with pertinent forestry laws and regulations on the cutting and gathering of the lumber she undertook to supply the provincial government.

• Elements of Violation of Section 3(e) of R.A. No. 3019 — The essential elements are: (1) the accused are public officers or private persons charged in conspiracy with them; (2) said public officers commit the prohibited acts during the performance of their official duties or in relation to their public position; (3) they caused undue injury to any party, whether the government or a private party; (4) such injury is caused by giving unwarranted benefits, advantage or preference to such parties; and (5) the public officers have acted with manifest partiality, evident bad faith or gross inexcusable negligence. The Court applied these elements to find petitioner liable as a private person charged in conspiracy with public officers.
• "Undue Injury" as "Actual Damage" — The term "undue injury" in the context of Section 3(e) of the Anti-Graft and Corrupt Practices Act has a meaning akin to the civil law concept of "actual damage." "Undue" has been defined as "more than necessary, not proper, [or] illegal," and "injury" as "any wrong or damage done to another, either in his person, rights, reputation or property [; that is, the] invasion of any legally protected interest of another." The Court applied this doctrine in finding that the provincial government suffered actual damage when it paid for confiscated lumber.
• Conspiracy Through Concerted Acts — When defendants by their acts aimed at the same object, one performing one part and the other performing another part so as to complete it, with a view to the attainment of the same object, and their acts though apparently independent were in fact concerted and cooperative, indicating closeness of personal association, concerted action and concurrence of sentiments, the court will be justified in concluding that said defendants were engaged in a conspiracy. The Court applied this doctrine to find that petitioner's acts of delivering lumber to Azaula, evading apprehension, appealing to the sanggunian, and accepting payment with the assistance of Azaula and Escara established conspiracy.
• Conclusiveness of Sandiganbayan Factual Findings — Factual findings of the Sandiganbayan are conclusive upon the Supreme Court except where: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts and the findings of fact of the Sandiganbayan are premised on the absence of evidence and are contradicted by the evidence on record. The Court applied this doctrine in declining to disturb the Sandiganbayan's findings.
• Minutes of Proceedings as Official Repository — The Court accords full recognition to the minutes as the official repository of what actually transpires in every proceeding. Minutes may be corrected to reflect the true account of a proceeding, giving the Court more reason to accord them great weight for such subsequent corrections, if any, are made precisely to preserve the accuracy of the records. The Court applied this doctrine in giving weight to the minutes of the Sangguniang Bayan session of December 14, 1992, which contained petitioner's statements admitting knowledge of the confiscation.
• Laws Read Into Government Contracts — Provisions of existing laws and regulations are read into and form an integral part of contracts, more so in the case of government contracts. All contracts, including government contracts, are subject to the police power of the State, which is deemed incorporated into the laws of the land that are part of all contracts, thereby qualifying the obligations arising therefrom. The Court applied this doctrine in holding that it was an implied condition in the subject contract that petitioner would comply with pertinent forestry laws and regulations.

• "In jurisprudence, 'undue injury' is consistently interpreted as 'actual damage.' Undue has been defined as 'more than necessary, not proper, [or] illegal;' and injury as 'any wrong or damage done to another, either in his person, rights, reputation or property [; that is, the] invasion of any legally protected interest of another.' Actual damage, in the context of these definitions, is akin to that in civil law." — This passage defines the controlling interpretation of "undue injury" under Section 3(e) of R.A. No. 3019, which the Court applied to find that the provincial government suffered actual damage when it paid for confiscated lumber.
• "When the defendants by their acts aimed at the same object, one performing one part, and the other performing another part so as to complete it, with a view to the attainment of the same object, and their acts though apparently independent, were in fact concerted and cooperative, indicating closeness of personal association, concerted action and concurrence of sentiments, the court will be justified in concluding that said defendants were engaged in a conspiracy." — This passage states the doctrine of conspiracy through concerted acts, which the Court applied to find petitioner's participation and cooperation indispensable in defrauding the government.
• "Basic is the rule that provisions of existing laws and regulations are read into and form an integral part of contracts, moreso in the case of government contracts. Verily, all contracts, including Government contracts, are subject to the police power of the State. Being an inherent attribute of sovereignty, such power is deemed incorporated into the laws of the land, which are part of all contracts, thereby qualifying the obligations arising therefrom." — This passage establishes the doctrine that forestry laws and regulations were implied conditions in petitioner's contract with the provincial government, negating her claim of good faith.
• "Thus, the Court accords full recognition to the minutes as the official repository of what actually transpires in every proceeding. It has happened that the minutes may be corrected to reflect the true account of a proceeding, thus giving the Court more reason to accord them great weight for such subsequent corrections, if any, are made precisely to preserve the accuracy of the records." — This passage supports the Court's reliance on the minutes of the Sangguniang Bayan session as evidence of petitioner's statements admitting knowledge of the confiscation of her lumber.

• Santos vs. People, G.R. No. 161877, March 23, 2006, 485 SCRA 185 — Cited as controlling authority explaining the elements of Section 3(e) of R.A. No. 3019 and the interpretation of "undue injury" as actual damage.
• Uy vs. Sandiganbayan — Cited in Santos vs. People for the proposition that the disjunctive word "or" in Section 3(e) connotes that either act of causing undue injury or giving unwarranted benefits qualifies as a violation.
• Santiago vs. Garchitorena — Cited in Santos vs. People for the same proposition regarding the disjunctive "or" in Section 3(e).
• Llorente vs. Sandiganbayan — Cited for the definition of "undue injury" as "actual damage" in the context of Section 3(e).
• Ong vs. People, G.R. No. 176546, September 25, 2009, 601 SCRA 47 — Cited for the rule on conclusiveness of Sandiganbayan factual findings and the penalty for violation of Section 3(e).
• Suller vs. Sandiganbayan, G.R. No. 153686, July 22, 2003, 407 SCRA 201 — Cited in Ong vs. People for the exceptions to the rule on conclusiveness of Sandiganbayan factual findings.
• Dugayon vs. People, G.R. No. 147333, August 12, 2004, 436 SCRA 262 — Cited for the essential elements of the crime under Section 3(e) of R.A. No. 3019.
• De los Reyes vs. Sandiganbayan, G.R. No. 121215, November 13, 1997, 281 SCRA 631 — Cited for the doctrine that minutes of formal proceedings are the official repository of what actually transpires.
• Regidor, Jr. vs. People, G.R. Nos. 166086-92, February 13, 2009, 579 SCRA 244 — Cited in connection with the De los Reyes doctrine on minutes of proceedings.
• Baldebrin vs. Sandiganbayan, G.R. Nos. 144950-71, March 22, 2007, 518 SCRA 627 — Cited for the doctrine on conspiracy through concerted and cooperative acts.
• Central Bank vs. Cloribel, No. L-26971, April 11, 1972, 44 SCRA 307 — Cited for the principle that laws are read into and form an integral part of contracts, including government contracts.
• Nacaytuna vs. People, G.R. No. 171144, November 24, 2006, 508 SCRA 128 — Cited for the application of the Indeterminate Sentence Law to offenses punished by special law.

• Section 3(e), R.A. No. 3019 (Anti-Graft and Corrupt Practices Act) — The provision penalizing public officers who cause undue injury to any party, including the Government, or give any private party unwarranted benefits, advantage or preference in the discharge of official functions through manifest partiality, evident bad faith or gross inexcusable negligence. The Court applied this provision to convict petitioner as a private person charged in conspiracy with public officers.
• Section 9, R.A. No. 3019 — The provision prescribing the penalty of imprisonment for not less than six years and one month nor more than fifteen years, and perpetual disqualification from public office, for violation of Section 3(e). The Court applied this in affirming the Sandiganbayan's imposed penalty.
• Section 68-A, P.D. No. 705 (Forestry Code of the Philippines), as amended by Executive Order No. 277 — The provision granting the DENR Secretary or his duly authorized representative the administrative authority to order confiscation of forest products illegally cut, gathered, removed, or possessed or abandoned, and to dispose of the same in accordance with pertinent laws. The Court applied this provision to hold that only the DENR Secretary or his representative could dispose of the confiscated lumber, and the provincial government had no right to utilize the same without authority.
• Section 68, P.D. No. 705 — The provision penalizing illegal cutting, gathering, and possession of timber or other forest products. The Court distinguished this provision from Section 3(e) of R.A. No. 3019 in rejecting petitioner's argument that she should have been prosecuted under the Forestry Code.
• Article 1240, Civil Code — The provision stating that payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it. The Sandiganbayan applied this provision in holding that since the lumber had already been confiscated, petitioner had no right to receive payment, and the payment made in her favor did not produce any legal effect.
• Indeterminate Sentence Law — The law providing that if the offense is punished by special law, an indeterminate penalty shall be imposed on the accused, the maximum term of which shall not exceed the maximum fixed by the law, and the minimum not less than the minimum prescribed therein. The Court applied this in affirming the penalty imposed by the Sandiganbayan.
• Rule 45, 1997 Rules of Civil Procedure — The procedural rule under which the petition for review on certiorari was filed, which limits the Court's review to questions of law.

• Carpio Morales, J. (Chairperson)
• Brion, J.
• Bersamin, J.
• Abad, J. (designated additional member per Special Order No. 997 dated June 6, 2011)

N/A — No dissenting opinions were noted in the provided case text.