Gutierrez vs. People of the Philippines

A public officer's unjustified and persistent refusal to pay a valid claim, despite all legal and documentary requirements having been satisfied, constitutes evident bad faith under Section 3(e) of R.A. No. 3019 when it causes specific, quantified undue injury to a private party.

Petitioner Patria C. Gutierrez served as Municipal Mayor of Tiwi, Albay. The late Mayor Naomi Corral, her predecessor, died on April 6, 1996, entitling her surviving spouse, Dr. Bernardo Corral, to claim her gratuity pay under applicable government service death-benefit rules. The Municipal Treasurer, Corazon Pulvinar, was the subject of reports of financial irregularities in the municipality, which prompted Mayor Gutierrez to initiate administrative and criminal proceedings against her. The gratuity pay claim required GSIS approval, municipal budgetary appropriation, and submission of supporting documents before disbursement could be effected.

On April 6, 1996, the Municipal Mayor of Tiwi, Albay, Naomi Corral, passed away. Her husband, Dr. Bernardo Corral, thereafter began processing the application for payment of her gratuity pay. By July 10, 1996, a municipal clearance signed by Municipal Treasurer Corazon Pulvinar and Acting Mayor Vicente Tomas Vera III was issued in favor of the late Mayor Corral, and Acting Mayor Vera likewise issued a certification as to her service record. On August 8, 1996, the Government Service Insurance System (GSIS) approved Dr. Corral's claim for gratuity pay in the amount of ₱352,456.11. The gratuity pay was then included in the proposed annual budget of the Municipality of Tiwi for 1997, prepared by Municipal Budget Officer Julia Rodriguez and approved by Mayor Gutierrez.

Mayor Gutierrez had assumed office as Municipal Mayor on July 11, 1996, and shortly thereafter received reports of irregularities concerning the Office of the Municipal Treasurer. She issued notices to Pulvinar asking her to explain, and issued Office Order No. 16 directing Pulvinar to submit the municipality's financial reports. An election contest was filed against Mayor Gutierrez, and by the end of July 1996, the RTC of Legaspi City issued a Temporary Restraining Order installing Vice Mayor Vera as Acting Mayor. On October 15, 1996, Mayor Gutierrez won the election protest and re-assumed her position. Upon re-assumption, she continued acting on the reports of irregularities, writing to the Department of Finance, Landbank, and the Office of the Ombudsman to report Pulvinar's alleged anomalies, including unliquidated cash advances amounting to ₱2,342,486.92.

Pulvinar issued a letter of explanation on February 12, 1997, stating that the unliquidated amount had been reduced to ₱592,456.11, representing the disbursement of gratuity pay for Mayor Corral and attorney's fees for Dr. Corral's counsel. A COA Audit Report for the year ending December 31, 1996 indicated that the gratuity pay had already been paid. Relying on this report, Mayor Gutierrez on February 18, 1997 instructed Municipal Budget Officer Rodriguez to delete the gratuity pay item from the proposed annual budget, stating that if legal basis was found, it could be passed through a supplemental budget. On February 19, 1997, the Provincial Treasurer's Office found that Pulvinar's remaining unliquidated amount was covered by two separate vouchers and considered valid disbursements. Despite this finding, Mayor Gutierrez still instructed Rodriguez to withhold the release of the gratuity pay until a claim for refund from the GSIS had been obtained.

The following year, the Sangguniang Bayan of Tiwi passed a re-aligned budget that again included the gratuity pay, which Mayor Gutierrez approved and signed on August 8, 1998. Because payment had still not been made after several years, Dr. Corral sent a demand letter on September 15, 1998. Mayor Gutierrez responded that no documents relating to the claim had been submitted to her office. Dr. Corral replied on September 22, 1998, stating that all required documents had already been submitted, and nonetheless re-submitted them. Meanwhile, a Bureau of Local Government Finance Memorandum Report dated October 8, 1998 found that Pulvinar's unliquidated cash advances arose from failure to prepare liquidation papers, contrary to auditing rules but not constituting malversation, and recommended a 15-day suspension. Unsatisfied, Mayor Gutierrez continued filing reports against Pulvinar with the DOF Secretary and the Deputy Ombudsman for Luzon. On May 28, 1999, the Office of the Ombudsman for Luzon dismissed the complaint against Pulvinar for lack of probable cause. On July 9, 2003, the COA wrote to Mayor Gutierrez confirming that as of December 31, 2002, the gratuity pay and attorney's fees remained outstanding, and the Municipal Accountant confirmed that the appropriated funds had not yet been released.

Dr. Corral filed a criminal case against Mayor Gutierrez before the Sandiganbayan for violation of Section 3(e) of R.A. No. 3019. The Information charged that on or about February 24, 1997, or sometime prior or subsequent thereto, Mayor Gutierrez, through manifest partiality, evident bad faith, or gross inexcusable negligence, willfully refused without just cause to release or pay the gratuity pay of the late Mayor Corral in the amount of ₱352,456.11, knowing that all required documents for its release had been submitted, thereby causing undue injury to the complainant. Mayor Gutierrez pleaded not guilty. During pre-trial, the parties stipulated that she was Municipal Mayor of Tiwi, Albay in 1998; that Dr. Corral was the husband of the late Naomi Corral; that Naomi Corral died on April 6, 1996; that on July 25, 1998, the Sangguniang Bayan passed Resolution No. 14-98 appropriating funds for the gratuity benefits; and that Mayor Gutierrez approved Resolution No. 14-98. The Sandiganbayan found her guilty beyond reasonable doubt, concluding that her refusal to pay was attended by evident bad faith, as shown by her "meandering strategy" to unduly delay payment and her pursuit of cases against Pulvinar that had already been dismissed, and that undue injury was suffered by Dr. Corral and his family, who were entitled to the gratuity pay which remained unpaid.

• No Prohibited Act: Petitioner argued that she did not commit any prohibited act, as her refusal to pay was motivated by prudence in light of reports of numerous anomalies in the Office of the Municipal Treasurer.
• No Evident Bad Faith: Petitioner maintained that her refusal was part of her quest for answers and that taking numerous precautions cannot be considered bad faith or partiality. She claimed that if she were motivated by bad faith, she could have simply denied Dr. Corral's claim outright.
• No Undue Injury: Petitioner argued there was no undue injury within the contemplation of law because when it was found that the gratuity pay was unpaid, she took steps to have it paid, but it was Dr. Corral who failed to follow up on the claim.
• Unfair Inferences: Petitioner contended that the Sandiganbayan based its conviction on unfair inferences: (1) the perceived lack of empathy towards Mayor Corral is not an element of the offense; (2) her referral for investigation of Pulvinar's acts should not have been perceived as a "meandering strategy"; and (3) the lack of required documents is a valid reason for nonpayment, and the loss of documents should not be taken against her since she is not the custodian thereof.

• Proper Scope of Review: Whether the petition raises questions of fact outside the purview of a Rule 45 petition and whether any exception to the conclusiveness of Sandiganbayan factual findings applies.
• Elements of Section 3(e): Whether the Sandiganbayan erred in holding that all the elements of violation of Section 3(e) of R.A. No. 3019 were proven.
• Erroneous Inferences: Whether the Sandiganbayan erred in basing its conviction on erroneous and unfair inferences against petitioner.

• Proper Scope of Review: No. The petition raises questions of fact — specifically whether the prosecution proved guilt beyond reasonable doubt — which are outside the purview of a Rule 45 petition, and none of the recognized exceptions to the conclusiveness of Sandiganbayan factual findings were demonstrated.
• Elements of Section 3(e): No. All three elements were duly proven: Mayor Gutierrez was a public officer discharging administrative functions; her persistent refusal to pay despite GSIS approval, appropriations, and complete documentation constituted evident bad faith; and the nonpayment of ₱352,456.11 caused undue injury to Dr. Corral and his family.
• Erroneous Inferences: No. The supposed unfair inferences do not relate to the elements of the crime and do not affect the Sandiganbayan's findings that resulted in conviction.

• Proper Scope of Review: As a rule, the Court does not review factual questions in petitions under Rule 45. Appeals from the Sandiganbayan must involve only questions of law, and the Sandiganbayan's factual findings are conclusive subject to limited exceptions: (1) the conclusion is grounded entirely on speculations, surmises, or 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 (5) the findings of fact are premised on the absence of evidence and contradicted by evidence on record. The petition is anchored on whether the prosecution established guilt beyond reasonable doubt — a question of fact. Mayor Gutierrez did not allege grave abuse of discretion or misapprehension of facts. Her argument regarding unfair inferences does not relate to the elements of the crime and thus does not affect the Sandiganbayan's findings. Even assuming arguendo that an exception applies justifying review, the petition still fails on the merits.

• Elements of Section 3(e): The first element is undisputed — Mayor Gutierrez was Municipal Mayor of Tiwi, Albay at the time material to the case. As to the second element, Section 3(e) provides three modes of commission: manifest partiality, evident bad faith, or gross inexcusable negligence. "Evident bad faith" connotes not only bad judgment but also palpably and patently fraudulent and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive or ill will, contemplating a state of mind affirmatively operating with furtive design or self-interest. The Sandiganbayan found, and the Court agreed, that Mayor Gutierrez's refusal constituted evident bad faith. As early as July 10, 1996, a clearance of money and property accountability was issued for Mayor Corral; on August 8, 1996, the GSIS approved the payment; appropriations had been made; and all documents had been submitted and re-submitted by Dr. Corral. There was no reason to instruct deletion of the gratuity pay from the annual budget and to order withholding of payment not once but twice. Her pursuit of cases against Pulvinar, which were dismissed, could have been ventilated in proper channels without adversely affecting payment to Dr. Corral. Her series of acts were delaying tactics showing dishonest purpose and sinister motivation. As to the third element, undue injury under Section 3(e) is akin to the civil law concept of actual damage and must be specified, quantified, and proven to the point of moral certainty. The nonpayment of ₱352,456.11 is definite and quantified, and after twenty-five years remains unpaid, clearly demonstrating undue injury to Dr. Corral and his family.

• Erroneous Inferences: A plain reading of the petition reveals that the supposed unfair inferences do not relate to the elements of the crime. The perceived lack of empathy, the characterization of her referrals as a "meandering strategy," and the issue of lost documents do not affect the Sandiganbayan's findings that all elements of Section 3(e) were established. Accordingly, these arguments do not warrant reversal.

• Elements of Section 3(e), R.A. No. 3019 — To convict an accused under Section 3(e), the prosecution must prove beyond reasonable doubt: (1) the accused is a public officer discharging administrative, judicial, or official functions; (2) the accused acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and (3) the action caused undue injury to any party, including the Government, or gave any private party unwarranted benefits, advantage, or preference. All three elements were found present in this case.

• Evident Bad Faith — Evident bad faith connotes not only bad judgment but also palpably and patently fraudulent and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive or ill will. It contemplates a state of mind affirmatively operating with furtive design or with some motive of self-interest, ill will, or ulterior purposes. The Court applied this definition to find that Mayor Gutierrez's persistent refusal to pay, despite all requirements being satisfied, constituted a dishonest purpose and sinister motivation.

• Undue Injury as Actual Damage — Undue injury in the context of Section 3(e) of R.A. No. 3019 should be equated with the civil law concept of "actual damage." It cannot be presumed even after a wrong or violation of a right has been established; its existence must be proven as an element of the crime. The undue injury must be specified, quantified, and proven to the point of moral certainty. The Court applied this by finding the nonpayment of ₱352,456.11 to be a definite and quantified injury.

• Conclusiveness of Sandiganbayan Factual Findings on Appeal — In appeals from Sandiganbayan decisions, only questions of law may be raised; factual findings of the Sandiganbayan are conclusive upon the Supreme Court, subject to limited exceptions: (1) findings grounded on speculations, surmises, or conjectures; (2) manifestly mistaken inference; (3) grave abuse of discretion; (4) judgment based on misapprehension of facts; and (5) findings premised on absence of evidence and contradicted by evidence on record. The Court found that none of these exceptions were invoked or demonstrated.

• "Undoubtedly, Mayor Gutierrez's series of acts are delaying tactics against the payment of the gratuity pay, which show a dishonest purpose and sinister motivation on her part." — This passage articulates the Court's conclusion on the second element, characterizing the petitioner's conduct as constituting evident bad faith through a pattern of deliberate delay.

• "Undue injury in the context of Section 3(e) of R.A. No. 3019 should be equated with the civil law concept of 'actual damage.' Unlike in actions for torts, undue injury in Sec. 3(e) cannot be presumed even after a wrong or a violation of a right has been established. Its existence must be proven as one of the elements of the crime." — This passage restates the doctrinal standard for proving undue injury under Section 3(e), requiring specification, quantification, and moral certainty — a formulation frequently cited in anti-graft jurisprudence.

• "In appeals from the Sandiganbayan decisions, only questions of law and not issues of fact may be raised." — This passage states the procedural rule governing appeals from the Sandiganbayan, delineating the boundary between reviewable legal questions and conclusive factual findings.

• Zapanta vs. People, 759 Phil. 156 (2015) — Controlling precedent on the rule that appeals from the Sandiganbayan involve only questions of law and that the Sandiganbayan's factual findings are conclusive on the Supreme Court, subject to five enumerated exceptions. The Court applied this to find that the petition raised questions of fact outside Rule 45's scope.

• Fuentes vs. People, 808 Phil. 586 (2017) — Cited for the proposition that Section 3(e) provides three modes of commission — manifest partiality, evident bad faith, and gross negligence — and for the definitions of each term drawn from Coloma, Jr. vs. Sandiganbayan.

• Coloma, Jr. vs. Sandiganbayan, 744 Phil. 214 (2014) — Cited within Fuentes for the canonical definitions of "partiality," "bad faith," and "gross negligence" as modes of committing the offense under Section 3(e).

• Rivera vs. People, 749 Phil. 124 (2014) — Cited for the doctrine equating undue injury under Section 3(e) with the civil law concept of actual damage, requiring that injury be specified, quantified, and proven to the point of moral certainty.

• Martel vs. People, G.R. Nos. 224720-23, Feb. 2, 2021 — Cited as the source of the current formulation of the three elements of violation of Section 3(e) of R.A. No. 3019.

• Tiongco vs. People, G.R. Nos. 218709-10, Nov. 14, 2018 — Cited for the principle that there are two ways a public official violates Section 3(e): by causing undue injury to any party, or by giving any private party unwarranted benefits, advantage, or preference.

• Section 3(e), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Prohibits public officers from causing undue injury to any party, including the Government, or giving 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 by finding all three elements satisfied: Mayor Gutierrez was a public officer, acted with evident bad faith, and caused undue injury to Dr. Corral through nonpayment of ₱352,456.11.

• Rule 45, Rules of Court — Governs petitions for review on certiorari, limiting review to questions of law. The Court applied this rule to hold that the petition raised questions of fact — whether the prosecution proved guilt beyond reasonable doubt — which are outside Rule 45's purview, and that none of the exceptions to the conclusiveness of Sandiganbayan factual findings were demonstrated.

Hernando (Acting Chairperson), Intting, Gaerlan, and Dimaampao, JJ., concurred. Perlas-Bernabe, S.A.J., was on official leave.