Maderazo vs. People of the Philippines

Factual findings of the Sandiganbayan are conclusive on the SC absent any of the recognized exceptions. A conviction under Section 3(e) of RA 3019 stands where public officers, acting in concert, disburse public funds for undelivered goods and approve incomplete and undated supporting documents, thereby acting with evident bad faith and causing undue injury to the government.

Maderazo was the Acting Mayor and Veruen the Acting Municipal Accountant of Caibiran, Biliran, at the time material to the case. Section 3(e) of RA 3019, the provision under which they were charged, penalizes causing undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.

The municipal government of Caibiran, Biliran undertook a project to improve its water system through the fabrication of tapping saddles, with Maderazo serving as Acting Mayor and Veruen as Acting Municipal Accountant. On 21 January 1998, the Sangguniang Bayan of Caibiran, Biliran, composed of Victor Maderazo, Jovencio Pantas, Camilo Go, Nestorio Rosario, Cesar Almen, Florentino Banquilay, Camilo Brasil and Imelda Cuevas, unanimously passed and approved Resolution No. 01, Series of 1998, authorizing the municipal mayor to enter into a negotiated contract with a local fabricator of tapping saddles for the improvement of the water system of Caibiran, Biliran.

On 28 January 1998, Maderazo, the Acting Mayor due to the suspension of Mayor Rodito Ramirez, entered into a Job Contract with Artemio Vermug, proprietor of Vermug Welding Shop. The Job Contract provided that Vermug Welding Shop would fabricate 400 pieces of two-diameter tapping saddles; the LGU of Caibiran would pay Vermug Welding Shop P400.00 for each tapping saddle fabricated; Vermug Welding Shop would complete the fabrication within 30 days after the signing of the Job Contract; and the LGU of Caibiran would pay Vermug Welding Shop the whole amount due upon completion of the orders. On the same day, Acting Municipal Treasurer Domingo Vidal issued Land Bank Check No. 21408930 for P154,036.37 in the name of Vermug upon submission of a Request for Obligation and Allotment, a Disbursement Voucher, Official Receipt No. 0020 issued by Vermug Welding Shop, and an undated Inspection Report certified correct by Victor and Veruen and noted by Maderazo.

On 8 February 1998, Ramirez resumed his position as mayor and found that there were no tapping saddles delivered despite the payment made. On 18 June 1998, Ramirez filed an Affidavit-Complaint, docketed as OMB-VIS CRIM-98-0475, before the Office of the Ombudsman charging Maderazo, Veruen and the SB members with Malversation and violation of RA 3019.

On 20 August 1998, Biliran Provincial Auditor Rogelio C. Abiera directed State Auditor Evangeline C. Bernil and Narciso Brun to conduct a physical inventory and inspection of the tapping saddles. In their report, Bernil and Brun stated that on 25 August 1998 they counted 188 pieces of tapping saddles, consisting of 156 pieces measuring 20 x 1/2" and 32 pieces measuring 40 x 1/2", in the Office of the Municipal Engineer; that the tapping saddles were delivered on 10 August 1998 as alleged by Ramirez and Municipal Engineer Arnulfo Y. Camarines; that one of the supporting documents was an undated Inspection Report certified correct by Victor and Veruen and noted by Maderazo; that a Job Contract was signed between Maderazo and Vermug on 28 January 1998; that the creditor was paid on the same day that the Job Contract was executed; and that there were no Purchase Request, Purchase Order, Delivery Receipts and Acceptance Report attached to the voucher as supporting documents.

The Sandiganbayan found that despite the disbursement of P160,000.00 on 28 January 1998 for 400 pieces of tapping saddles, no tapping saddles were actually delivered to the municipality on that date, as confirmed by Camarines in a Certification that “there was no tapping saddles received or kept by this office as of May 18, 1998.” Vermug testified that he did not deliver or fabricate the 400 pieces of tapping saddles because it was impossible for him to fabricate and deliver them on the same day that the Job Contract was executed on 28 January 1998, and that he never received any cent from the proceeds of the contract because after he had endorsed the Land Bank Check, he returned it to Maderazo upon the latter’s request only to discover later that it was encashed by Vidal from the Land Bank Branch in Naval, Biliran. Vidal corroborated that in the afternoon of 28 January 1998 he encashed the check at the Land Bank Branch in Naval, Biliran at Maderazo’s request, as shown by his signature on the back thereof, and delivered the proceeds to Maderazo. The Sandiganbayan also found no proof or evidence to show that the 400 pieces of tapping saddles allegedly delivered by Vermug were actually installed in the different households of the municipality.

• Appreciation of Facts: Petitioners questioned the conclusions reached by the Sandiganbayan in its appreciation of facts.

• Violation of Section 3(e) of RA 3019: Whether Maderazo and Veruen violated Section 3(e) of RA 3019.

• Violation of Section 3(e) of RA 3019: Yes. All elements were present: Maderazo and Veruen were public officers discharging administrative functions; they acted with evident bad faith; and their actions caused undue injury to the LGU of Caibiran in the amount of P160,000.

• Violation of Section 3(e) of RA 3019: The SC began with the rule that factual findings of the Sandiganbayan are conclusive upon the SC except where: (1) the conclusion is 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 a misapprehension of facts; (5) the findings of fact are conclusions without citation of specific evidence on which they are based; and (6) the findings of fact are premised on an absence of evidence on record. Maderazo and Veruen questioned the Sandiganbayan’s appreciation of facts but failed to show that the case fell within any of these exceptions. The SC then applied the elements of Section 3(e): (a) the accused must be a public officer discharging administrative, judicial or official functions; (b) he must have acted with manifest partiality, evident bad faith or gross inexcusable negligence; and (c) his action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage or preference in the discharge of his functions. It was undisputed that Maderazo, as Acting Mayor, and Veruen, as Acting Municipal Accountant, were public officers discharging administrative functions. The evidence established that Maderazo processed the Request for Obligation and Allotment instead of the municipal engineer, received P160,000 on 28 January 1998, and covered up the non-existent tapping saddles by belatedly effecting delivery of tapping saddles that did not even conform to the Job Contract; Veruen approved the Disbursement Voucher despite the lack of supporting documents found upon audit; and both signed the glaringly incomplete and undated Inspection Report. These acts showed evident bad faith, or such state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes. By disbursing P160,000 despite the non-existent tapping saddles, Maderazo and Veruen caused undue injury to the LGU of Caibiran for that amount. Their concerted actions demonstrated a common design and justified the finding of conspiracy. The SC relied on Lihaylihay vs. People of the Philippines, where petitioners were found in evident bad faith for affixing their signatures on disputed documents despite glaring defects and for approving ghost purchases, and on Alvizo vs. Sandiganbayan, where petitioners were convicted under Section 3(e) upon a finding of conspiracy in the irregular preparation, processing, and approval of simulated documents and payment to contractors for nonexistent projects. Finally, as to the affidavit of desistance executed by Ramirez, the SC reiterated that retractions are generally unreliable and are looked upon with considerable disfavor by the courts.

• Section 3(e) of RA 3019 — Elements — The provision penalizes causing undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. The elements are: (a) the accused must be a public officer discharging administrative, judicial or official functions; (b) he must have acted with manifest partiality, evident bad faith or gross inexcusable negligence; and (c) his action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage or preference in the discharge of his functions. The SC found all elements present.
• Evident Bad Faith — Evident bad faith means a state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes. The SC found Maderazo and Veruen acted in evident bad faith by disbursing P160,000 despite non-existent tapping saddles, approving the Disbursement Voucher despite lack of supporting documents, and signing a glaringly incomplete and undated Inspection Report.
• Conspiracy — Conspiracy may be inferred from concerted actions demonstrating a common design. The SC found conspiracy between Maderazo and Veruen because the crime would not have been possible without each other’s participation, as shown by their execution and approval of the Disbursement Voucher, check, and undated Inspection Report.
• Conclusiveness of Sandiganbayan Factual Findings — Factual findings of the Sandiganbayan are conclusive upon the SC except where: (1) the conclusion is 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 a misapprehension of facts; (5) the findings of fact are conclusions without citation of specific evidence on which they are based; and (6) the findings of fact are premised on an absence of evidence on record. The SC applied the rule because petitioners failed to show any exception.
• Retractions/Affidavit of Desistance — Retractions are generally unreliable and are looked upon with considerable disfavor by the courts. The SC reiterated this in addressing the affidavit of desistance executed by Ramirez.

• “Maderazo and Veruen are charged with the crime of violation of Section 3(e) of RA 3019, which has the following essential elements: (a) the accused must be a public officer discharging administrative, judicial or official functions; (b) he must have acted with manifest partiality, evident bad faith or gross inexcusable negligence; and (c) his action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage or preference in the discharge of his functions.” — Sets out the three elements of Section 3(e) that the SC applied to the facts.
• “Verily, Maderazo and Veruen acted in evident bad faith, or such state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes.” — Defines evident bad faith and applies it to the petitioners’ acts.
• “By disbursing P 160,000 despite the non-existent tapping saddles, Maderazo and Veruen caused undue injury to the LGU of Caibiran for the said amount. Their concerted actions, which demonstrate a common design, justify the finding of conspiracy.” — States the undue injury and conspiracy findings.
• “As to the affidavit of desistance executed by Ramirez, we reiterate that retractions are generally unreliable and are looked upon with considerable disfavor by the courts.” — States the SC’s treatment of the affidavit of desistance.

• Lihaylihay vs. People of the Philippines, G.R. No. 191219, 31 July 2013, 702 SCRA 755 — Relied on as precedent for finding evident bad faith where signatures were affixed on disputed documents despite glaring defects and ghost purchases were approved.
• Alvizo vs. Sandiganbayan, 454 Phil. 34 (2003) — Relied on as precedent for conviction under Section 3(e) based on conspiracy in the irregular preparation, processing, and approval of simulated documents and payment to contractors for nonexistent projects.
• Albert vs. Sandiganbayan, 599 Phil. 439 (2009) — Cited for the definition of evident bad faith as a state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes.
• People of the Philippines vs. Soriano, Sr., 570 Phil. 115 (2008) — Cited for the rule that retractions are generally unreliable and are looked upon with considerable disfavor by the courts.
• Sazon vs. Sandiganbayan, 598 Phil. 35 (2009) — Cited for the rule that factual findings of the Sandiganbayan are conclusive on the SC except under the recognized exceptions.
• Mendoza vs. People of the Philippines, 500 Phil. 550 (2005) — Cited for the same rule on the conclusiveness of Sandiganbayan factual findings.
• Suller vs. Sandiganbayan, 454 Phil. 704 (2003) — Cited for the same rule.

• Section 3(e), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Penalizes causing undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. The SC applied its three elements and affirmed the conviction.
• Rule 45, 1997 Rules of Civil Procedure — The petition was filed under Rule 45; the SC denied it and affirmed the Sandiganbayan Decision and Resolution.