Santillano vs. People of the Philippines

A private person may be convicted under Section 3(e) of RA 3019 when he conspires with public officers in the prohibited act, and conspiracy may be established by circumstantial evidence. The private person need not be a public officer because Sec. 4(b) and Sec. 9(a) expressly reach private persons who induce or cause the offense.

Santillano was the proprietor of PBMA Builders, the contractor for infrastructure projects of the Municipality of San Jose, Surigao del Norte. The other accused were Mayor Ruben B. Ecleo, Jr., Municipal Treasurer Arsenia N. Orejas, and Municipal Planning and Development Coordinator Anadelia N. Navarra, who was designated Municipal Engineer. RA 3019 penalizes corrupt practices of public officers, while Sec. 4(b) prohibits any person from knowingly inducing or causing a public official to commit a Sec. 3 offense.

In 1994, Leo Durano, a member of the Sangguniang Bayan of San Jose, Surigao del Norte, requested the Commission on Audit to audit the municipality. A special audit team composed of State Auditors Marcos Torralba, Carlo Miagao Galenzoga, and Victor Azote examined the municipality’s books, records, and related documents and inspected infrastructure projects, including the public market, municipal building, and guest house. At the time, Ecleo, Jr. was mayor, Orejas was municipal treasurer, and Navarra was municipal planning and development coordinator; Santillano was the proprietor of PBMA Builders, the contractor for the projects.

For the public market, the construction was undertaken by PBMA Builders, represented by Santillano, under a negotiated contract covering Phases II to IV; Phase I had earlier been carried out directly by the municipality at a cost of PhP346,639, while the rates for the remaining phases were PhP1,469,500 for Phase II, PhP1,274,000 for Phase III, and PhP1,300,000 for Phase IV, for a total of PhP4,043,500. Santillano submitted programs of work, billings, and progress reports; Navarra certified that she inspected the implementation and that the progress certified by Santillano was correct; Navarra and Ecleo, Jr. recommended payment; Ecleo, Jr. made requests for obligation of allotment and ordered and approved disbursements; Orejas certified availability of funds; and payment amounting to PhP4,008,005 was made to Santillano, evidenced by PBMA Builders official receipts. The audit inspection found discrepancies between project documents and the actual structures: items included in the contract were not executed, some constructed items were not part of the contract and would have needed a supplemental contract, and Santillano claimed payment for Phase II items not included in the contract. A comparative cost analysis yielded an overpricing of PhP444,757.17; the Information in Criminal Case No. 24467 alleged undue injury of PhP444,575.17.

For the municipal building, PBMA Builders was awarded a contract for two phases: PhP1,119,575 for Phase I and PhP2,565,000 for Phase II, for a total of PhP3,684,575. Navarra estimated the individual program of work for Phase I at PhP2,051,387.55. As with the public market, Ecleo, Jr. and Navarra approved Santillano’s billing; Ecleo, Jr. prepared requests for obligation of allotment; Orejas certified availability of funds; the mayor signed and approved disbursement vouchers; and Santillano acknowledged payment through PBMA official receipts. The total payment made amounted to PhP3,849,664, of which the audit team noted an overpayment of PhP165,089. An ocular inspection showed that, contrary to the reported 100% accomplishment, only 37.33% of the construction was finished, and payment had been made for activities not yet started; a comparative cost analysis put the project cost at PhP1,437,024.30, yielding an overpayment of PhP2,412,639.70.

The audit team also found an allotment of PhP300,000 from the Countrywide Development Fund for the repair and rehabilitation of the municipality’s guest house. Ecleo, Jr. approved a cash advance of that amount to Navarra for the project, but State Auditor Torralba learned that the funds were not spent for the municipal guest house; they were used for a private building owned by PBMA. Records with Orejas and a ledger of fixed assets showed that the municipality did not even have its own guest house.

Informations were filed for violation of Sec. 3(e), RA 3019: Criminal Case No. 24467 and Criminal Case No. 24468 against Ecleo, Jr., Orejas, Navarra, and Santillano, and Criminal Case No. 24469 against Ecleo, Jr. and Orejas. At the arraignment on Aug. 16, 1998, Ecleo, Jr. and Navarra pleaded not guilty; Santillano surrendered during the defense’s presentation of evidence and was arraigned on Dec. 6, 1999 under the Informations in Criminal Case Nos. 24467 and 24468, entering a plea of not guilty, while the proceedings against Ecleo, Jr. and Navarra were held in abeyance. A joint trial was subsequently ordered.

The defense proffered alibi and denial. Navarra testified that in January 1991 she was a municipal project development assistant and that her position showed she had no responsibility to sign official documents; her leave of absence from July to November 1991 supposedly foreclosed any opportunity to sign the certificates of work for Phases II to IV of the public market, and she claimed her signatures were forged, although she admitted signing the programs of work, certificates of work, and disbursement vouchers for the municipal building. Ecleo, Jr. claimed good faith reliance on Navarra’s certification; he admitted indorsing Santillano’s request for a supplemental contract and recommending its approval, and said that when the vice-mayor acted as mayor he signed collection requests and disbursement vouchers based on Navarra’s certification of necessity and lawfulness; he also said he recommended Santillano’s immediate prosecution after the audit, that the Sangguniang Bayan passed Resolution No. 30, Series of 1995 to file a civil case against Santillano, that he represented the municipality in its civil case for breach of contract and damages, and that a compromise agreement was reached with Santillano acknowledging PhP2,856,396.87, on which the RTC of Surigao City rendered judgment. Santillano testified that PBMA Builders had to relocate the public market site because it was too close to the sea and could flood at high tide, with the approval of the municipal development and planning coordinator; he justified the variance between the audit valuation and what he received by additional work on Phase I and invoked PD 1594, which allowed adjustments in billings by as much as 25%; he justified the additional PhP165,089 for the municipal building as approved by the municipal planning and development coordinator; and he denied entering into the compromise agreement, saying he never admitted liability and had filed a petition with the CA to nullify the judicially approved compromise.

The Sandiganbayan found that all the elements of the offense were present in the three cases: for the public market, that Ecleo, Jr. entered into contracts with Santillano for Phases II to IV, that Ecleo, Jr. and Navarra approved and released PhP4,008,005 to Santillano, and that there was an overpayment of PhP444,575.17; for the municipal building, that Ecleo, Jr. entered into an agreement with Santillano for PhP3,684,575, that payments approved and released by Ecleo, Jr. and Navarra amounted to PhP3,849,664, and that there was an overpayment of PhP2,412,639.70; and for the guest house, that PhP300,000 was approved by Ecleo, Jr. and Orejas for the repair of the municipal guest house, that the funds were used for a private building owned by PBMA, and that the municipality did not have a guest house.

• Private Person Under RA 3019: Petitioner argued that he is a private person and not a public officer, and that the Sandiganbayan added the phrase “or a private person charged in conspiracy with the public officer” to the law in order to hold him liable.
• Conspiracy: Petitioner argued that there was no evidence he conspired with his co-accused, citing the Sandiganbayan’s statement that there was no proof of actual agreement among the accused to commit violations of RA 3019.

• Proof of Service: Respondent observed that petitioner failed to implead the Sandiganbayan and to serve a copy of his petition on it, and maintained that service of the petition upon the Sandiganbayan should have been made.

• Procedural Compliance: Whether the petition should be denied for failure to comply with Rule 45 requirements on statement of material dates and proof of service on the Sandiganbayan.
• Private Person’s Liability Under RA 3019: Whether a private person may be held liable under Sec. 3(e) of RA 3019 when charged in conspiracy with public officers.
• Conspiracy: Whether conspiracy was established against Santillano despite the absence of direct proof of actual agreement.
• Penalty: Whether the penalty imposed is within the range prescribed by RA 3019 and the Indeterminate Sentence Law.

• Procedural Compliance: No. The petition was properly denied because Santillano failed to submit a statement of material dates and proof of service on the Sandiganbayan under Rule 45 and SC Circular No. 19-91, and he offered no explanation for the failure.
• Private Person’s Liability Under RA 3019: Yes. A private person may be convicted under Sec. 3(e) of RA 3019 when he conspires with public officers, because Sec. 4(b) and Sec. 9(a) make private persons liable for inducing or causing the offense.
• Conspiracy: Yes. Conspiracy need not be proved by direct evidence; circumstantial evidence showed Santillano received overpayments and issued receipts without a written agreement justifying them.
• Penalty: Yes. The penalty imposed is within Sec. 9(a) of RA 3019 and the Indeterminate Sentence Law.

• Procedural Compliance: Rule 45 requires a statement of material dates and proof of service of the petition on the lower court; SC Circular No. 19-91 dated Aug. 13, 1991 provides that a petition under Rule 45 may be denied outright if there is no proof of service on the lower court, tribunal, or office concerned and on the adverse party under Secs. 3, 5, and 10 of Rule 13. The People observed that Santillano failed to implead the Sandiganbayan and to serve a copy of the petition on it. While the Rules do not require the lower court to be impleaded, proof of service on the lower court is mandated. The SC may relax procedural defects to correct a patent injustice, but the party invoking liberality must at least explain its failure to comply. Santillano’s Reply discussed substantial matters but did not explain why he failed to comply with the requirements on material dates and proof of service. The SC thus found no reason to give due course to the petition.
• Private Person’s Liability Under RA 3019: Sec. 3(e) of RA 3019 does not mention private individuals, but it must be read with Sec. 4(b), which makes it unlawful for any person knowingly to induce or cause a public official to commit any offense defined in Sec. 3, and Sec. 9(a), which punishes any public officer or private person committing any unlawful act or omission under Secs. 3, 4, 5, and 6. The law therefore punishes not only public officers who commit the prohibited acts but also those who induce or cause the public official to commit them. Go vs. Fifth Division, Sandiganbayan affirmed the conviction of a private person and held that the assertion that Sec. 3(g) requires the accused to be a public officer does not preclude its application to private persons charged with conspiring with public officers; Go, citing Luciano vs. Estrella, Singian, Jr. vs. Sandiganbayan, and Domingo vs. Sandiganbayan, held that private persons found acting in conspiracy with public officers may be liable for the applicable offenses under Sec. 3. Santillano’s argument that the Sandiganbayan added an element to the crime therefore lacks merit.
• Conspiracy: Proof of conspiracy need not be direct or actual; Rule 133, Sec. 4 of the Rules of Court allows circumstantial evidence if there is more than one circumstance, the facts from which the inferences are derived are proven, and the combination of all the circumstances produces conviction beyond reasonable doubt. A conviction based on circumstantial evidence can be upheld only if the circumstances proved constitute an unbroken chain leading to one fair and reasonable conclusion pointing to the accused, to the exclusion of all others, as the guilty person, consistent with guilt and inconsistent with any other hypothesis. The finding of conspiracy was not unfounded: in all three criminal cases, the prosecution established that Ecleo, Jr. and Navarra approved overpayments to Santillano; the Sandiganbayan did not give weight to their weak alibi; Arias vs. Sandiganbayan could not be used by Ecleo, Jr. because the documents he had to approve were not so voluminous as to preclude careful study; Navarra’s alibi did not acquit her because she was not precluded from signing the documents while on leave and did not prove forgery; both Ecleo, Jr. and Navarra were parties to an agreement approving disbursement for a bogus municipal guest house without plausible justification. Santillano was on the receiving end of the overpayments and issued receipts for them, and he failed to justify the excessive payments with a written agreement under the Implementing Rules and Regulations of PD 1594. These circumstances led to the conclusion that all three accused acted in a concerted effort to deprive the government of funds. Ecleo, Jr.’s belated suit against Santillano and the alleged compromise did not help him; Santillano denied being a party, and the attempt appeared to cover up the irregular disbursement. The Sandiganbayan’s factual findings are conclusive on the SC absent the established exceptions, and none was present.
• Penalty: Sec. 9(a) of RA 3019 punishes any public officer or private person committing any unlawful act or omission under Secs. 3, 4, 5, and 6 with imprisonment of not less than one year nor more than ten years, perpetual disqualification from public office, and confiscation or forfeiture in favor of the Government of any prohibited interest and unexplained wealth manifestly out of proportion to salary and other lawful income. The Sandiganbayan correctly applied Sec. 1 of the Indeterminate Sentence Law, which provides that for offenses punishable by a law other than the Revised Penal Code, the maximum term of the penalty should not exceed the maximum fixed by said law and the minimum should not be less than the minimum term prescribed by the same. The penalty imposed in all three criminal cases was within the prescribed law.

• Private persons may be liable under RA 3019 for conspiracy with public officers — Although Sec. 3(e) speaks of public officers, Sec. 4(b) makes it unlawful for any person knowingly to induce or cause a public official to commit a Sec. 3 offense, and Sec. 9(a) punishes any public officer or private person committing the unlawful acts under Secs. 3, 4, 5, and 6. The SC applied this to Santillano, the private contractor, because he was charged with conspiring with the municipal officials.
• Conspiracy may be proved by circumstantial evidence — Direct proof of an actual agreement is not required. Under Rule 133, Sec. 4, circumstantial evidence suffices if (a) there is more than one circumstance, (b) the facts from which the inferences are derived are proven, and (c) the combination of all the circumstances produces conviction beyond reasonable doubt. The SC applied this to the overpayments, receipts, approvals, and lack of written justification.
• Circumstantial evidence must form an unbroken chain — A conviction based on circumstantial evidence can be upheld only if the circumstances proved constitute an unbroken chain leading to one fair and reasonable conclusion pointing to the accused, to the exclusion of all others, as the guilty person; the circumstances must be consistent with each other, consistent with guilt, and inconsistent with any other hypothesis except guilt. The SC found the chain established.
• Factual findings of the Sandiganbayan are conclusive on the SC — They are conclusive subject to exceptions: (1) the conclusion is grounded entirely on speculations, surmises, 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 (5) the findings are premised on the absence of evidence and are contradicted by evidence on record. The SC found none of the exceptions present.
• Proof of service on the lower court is mandatory — Under Rule 45 and SC Circular No. 19-91, a petition may be denied outright if there is no proof of service on the lower court, tribunal, or office concerned and on the adverse party. Relaxation requires at least an explanation for noncompliance. The SC denied due course because Santillano did not explain his failure.
• Arias doctrine on reliance on subordinates is not a blanket defense — The SC said Ecleo, Jr. could not use Arias vs. Sandiganbayan because the documents he approved were not so voluminous as to preclude him from studying each one carefully.

• “Clearly, the law punishes not only public officers who commit prohibited acts enumerated under Sec. 3, but also those who induce or cause the public official to commit those offenses. This is supported by Sec. 9, which includes private persons as liable for violations under Secs. 3, 4, 5, and 6.” — The passage states the basis for holding a private person liable under RA 3019 in conspiracy with public officers.
• “Proof of conspiracy need not be direct or actual. Indeed, prosecutors would be hard-pressed to secure a conviction for those charged under RA 3019 if direct evidence were required to be established.” — The passage rejects Santillano’s argument that the absence of direct proof of agreement negated conspiracy.
• “A judgment of conviction based on circumstantial evidence can be upheld only if the circumstances proved constitute an unbroken chain that leads to one fair and reasonable conclusion pointing to the accused, to the exclusion of all others, as the guilty person, that is, the circumstances proved must be consistent with each other, consistent with the hypothesis that the accused is guilty, and at the same time inconsistent with any other hypothesis except that of guilty.” — The passage sets the standard for circumstantial evidence used to prove conspiracy.
• “The factual findings of the Sandiganbayan are conclusive on this Court, subject to established exceptions, among them: (1) the conclusion is a finding grounded entirely on speculations, surmises, 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 (5) the findings of fact of the Sandiganbayan are premised on the absence of evidence and are contradicted by evidence on record.” — The passage explains why the SC deferred to the Sandiganbayan’s factual findings.

• Go vs. Fifth Division, Sandiganbayan, G.R. No. 172602, April 13, 2007, 521 SCRA 270 — Controlling precedent; affirmed that private persons conspiring with public officers may be liable under RA 3019.
• Luciano vs. Estrella, 145 Phil. 448 (1970) — Cited in Go as part of the line of cases holding private persons in conspiracy liable under RA 3019.
• Singian, Jr. vs. Sandiganbayan, G.R. Nos. 160577-94, December 16, 2005, 478 SCRA 348 — Cited in Go for the same rule on private-person liability in conspiracy.
• Arias vs. Sandiganbayan, G.R. No. 81563, December 19, 1989, 180 SCRA 309 — Distinguished/not applied to Ecleo, Jr.; reliance on subordinates did not excuse him because the documents were not voluminous.
• Mangangey vs. Sandiganbayan, G.R. Nos. 147773-74, February 18, 2008, 546 SCRA 51 — Cited for the circumstantial-evidence standard and unbroken-chain requirement.
• Pareño vs. Sandiganbayan, G.R. Nos. 107119-20 & 108037-38, April 17, 1996, 256 SCRA 242 — Cited for the exceptions to the finality of the Sandiganbayan’s factual findings.
• Fonacier vs. Sandiganbayan, G.R. No. 50691, December 5, 1994, 238 SCRA 655 — Cited on the application of the Indeterminate Sentence Law.
• Cirineo Bowling Plaza, Inc. vs. Sensing, G.R. No. 146572, January 14, 2005, 448 SCRA 175 — Cited on the requirement that a party seeking relaxation of procedural rules must explain its noncompliance.

• Section 3(e), Republic Act No. 3019 — Defines the corrupt practice of 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; this was the offense charged.
• Section 4(b), Republic Act No. 3019 — Makes it unlawful for any person knowingly to induce or cause a public official to commit any offense defined in Sec. 3; applied to hold Santillano, a private person, liable in conspiracy.
• Section 9(a), Republic Act No. 3019 — Punishes any public officer or private person committing any unlawful act or omission under Secs. 3, 4, 5, and 6 with imprisonment of one year to ten years, perpetual disqualification, and confiscation/forfeiture; applied to the penalty.
• Section 4, Rule 133, Rules of Court — Circumstantial evidence is sufficient for conviction if there is more than one circumstance, the facts from which the inferences are derived are proven, and the combination of all the circumstances produces conviction beyond reasonable doubt; applied to prove conspiracy.
• Sections 4(b) and 5, Rule 45, in relation to Section 5(d), Rule 56, and Section 13, Rule 13, Rules of Court — Require a statement of material dates and proof of service of the petition on the lower court and adverse party; Santillano failed to comply.
• Supreme Court Circular No. 19-91, dated August 13, 1991 — Provides that a petition under Rule 45 may be denied outright if there is no proof of service on the lower court, tribunal, or office concerned and on the adverse party; applied to deny due course.
• Section 1, Indeterminate Sentence Law — For offenses punishable by a law other than the Revised Penal Code, the maximum term must not exceed the maximum fixed by law and the minimum must not be less than the minimum prescribed; applied to uphold the penalty.
• Presidential Decree No. 1594 — Invoked by Santillano to justify additional billings up to 25%; the SC noted he failed to show a written agreement under its Implementing Rules and Regulations.