Lihaylihay vs. People

Public officers who certify and approve documents for non-existent purchases through evident bad faith, despite glaring irregularities such as tampered dates and incomplete certifications, commit a violation of Section 3(e) of RA 3019, resulting in undue injury to the government; the Arias doctrine does not apply where circumstances demand higher circumspection from approving officers.

The case arose from a Commission on Audit special audit report revealing irregularities in PNP procurement, prompting an internal PNP investigation into alleged "ghost" purchases of combat, clothing, and individual equipment (CCIE) worth P133,000,000 from the PNP Service Store System to the PNP General Services Command, leading to charges against multiple PNP officers for corrupt practices under RA 3019.

On January 3, 6, 8, 9, and 10, 1992, PNP officers, including petitioners Vinluan (Chairman of the Inspection and Acceptance Committee) and Lihaylihay (Inspector in the Directorate for Comptrollership), conspired to facilitate ghost purchases of CCIE items worth P8,000,000 through 16 funded Requisition and Invoice Vouchers (RIVs) split into P500,000 each to evade higher authority review; Vinluan signed 16 certificates of acceptance despite incomplete details and tampered dates on seven RIVs altering 1991 to 1992; Lihaylihay certified Inspection Report Forms as correct despite no deliveries; payments were made via checks dated January 15, 1992, to PNP SSS, but no items were received by GSC Supply Accountable Officer Dante Mateo or distributed to end-users, as evidenced by absent entries in Reports of Public Property Purchased; the transactions caused P8,000,000 undue injury to the government.

Petitioners argued that their conviction was improper as they acted in good faith by relying on subordinates' preparations without personal examination of details, invoking the Arias doctrine that heads of office cannot be held liable for conspiracy merely for approving documents; they claimed deliveries were made to GSC SAO Mateo and end-users like Narcotics Command, and that the prosecution failed to prove bad faith or conspiracy beyond reasonable doubt; they also challenged the admissibility of evidence under the best evidence rule due to reliance on photocopies showing alterations.

The prosecution, represented by the People, argued that all elements of Section 3(e) of RA 3019 were proven, including petitioners' status as public officers, evident bad faith through signing tampered and incomplete documents for ghost purchases, and resulting P8,000,000 injury to the government; conspiracy was established by their concerted actions in certifying non-existent deliveries; the Arias doctrine does not apply due to evident irregularities like tampered dates and splitting of transactions that should have prompted scrutiny; evidence authenticity was stipulated except for checks, and alterations were observable without originals.

• Procedural Issues: - Whether the Sandiganbayan erred in admitting prosecution evidence despite stipulations on authenticity and the best evidence rule, and whether questions of fact like proof beyond reasonable doubt are reviewable by the Supreme Court.
• Substantive Issues: - Whether petitioners' actions constituted evident bad faith and conspiracy in violating Section 3(e) of RA 3019, causing undue injury through ghost purchases, and whether the Arias doctrine applies to exculpate them given the irregularities in the documents.

• Procedural: - The Supreme Court held that only questions of law are reviewable on appeal from Sandiganbayan, deeming its factual findings conclusive absent exceptions; evidence admissibility was proper as parties stipulated to documents' existence and authenticity except checks, waiving objections, and general forgery appearance was observable without originals under the best evidence rule.
• Substantive: - The Court affirmed the conviction, finding all elements of Section 3(e) of RA 3019 present: petitioners as public officers acted with evident bad faith by certifying tampered and incomplete documents for non-existent P8,000,000 CCIE purchases, leading to government injury; conspiracy was shown by common design in approvals; Arias doctrine distinguished due to irregularities like tampered dates, incomplete certifications, and transaction splitting that demanded higher scrutiny, as in Cruz and Bacasmas cases.

• Elements of Violation of Section 3(e), RA 3019 — Requires (a) public officer discharging functions, (b) acting with manifest partiality, evident bad faith, or gross negligence, and (c) causing undue injury or unwarranted benefit; applied here to hold petitioners liable for bad faith in certifying ghost purchases, proving all elements through document irregularities and non-delivery evidence.
• Conspiracy in Criminal Cases — Exists where concerted actions show common design without needing detailed averments in indictment; used to link petitioners' certifications and approvals as unified effort in facilitating fraudulent transactions, justifying joint liability.
• Arias Doctrine — Heads of office not liable for conspiracy merely for approving subordinates' documents without personal detailed examination; distinguished and not applied in this case due to exceptional irregularities (tampered dates, splitting) that required greater circumspection, as exceptions carved in Cruz and Bacasmas.

• "Unlike in Arias, however, there exists in the present case an exceptional circumstance which should have prodded petitioner, if he were out to protect the interest of the municipality he swore to serve, to be curious and go beyond what his subordinates prepared or recommended." — From Cruz v. Sandiganbayan, cited to emphasize need for scrutiny amid evident discrepancies.
• "Petitioners cannot hide behind our declaration in Arias v. Sandiganbayan just because they did not personally examine every single detail before they, as the final approving authorities, affixed their signatures to certain documents." — From Bacasmas v. Sandiganbayan, applied to reject reliance on the doctrine given petitioners' responsibilities.

• Arias v. Sandiganbayan — Referenced as general rule exculpating approving officers absent conspiracy proof or need for further examination; distinguished here due to irregularities prompting higher scrutiny.
• Cruz v. Sandiganbayan — Cited as precedent carving exception to Arias where document discrepancies (e.g., payee mismatches) should alert officers to investigate; followed to hold petitioners liable for ignoring similar evident defects.
• Bacasmas v. Sandiganbayan — Invoked to affirm that officers with duty to examine vouchers cannot invoke Arias when reasons for detail review exist; applied to underscore petitioners' responsibility in procurement approvals.
• People v. Atienza — Cited for outlining elements of Section 3(e), RA 3019 violation; used as controlling precedent to confirm presence of bad faith and injury elements.
• Lazarte, Jr. v. Sandiganbayan — Referenced for conspiracy requirements in indictments; illustrative of how common design suffices without detailed particulars.

• Section 3(e), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Defines corrupt practice as causing undue injury through evident bad faith in official functions; directly applied to convict petitioners for approving ghost purchases, establishing all elements including bad faith and government loss of P8,000,000.