Tayaban vs. People

Public officers who cause the demolition of a government-funded structure without notice to or consultation with the project owner, acting on a resolution passed on the same day as the demolition, are guilty of evident bad faith causing undue injury to the government under Section 3(e) of R.A. No. 3019.

Municipal Mayor Robert Tayaban of Tinoc, Ifugao, submitted a project proposal to Provincial Governor Benjamin Cappleman for the construction of the Tinoc Public Market. The Governor approved the proposal, with the project to be funded by the Cordillera Executive Board (CEB). A bidding was conducted, and private contractor Lopez Pugong won the contract. A formal contract was executed between Pugong and the CEB on March 1, 1989, stipulating that the contractor would build the market according to the plans and specifications provided by the CEB technical staff. Construction commenced in June 1989. A dispute subsequently arose when the municipal officials claimed the market was being erected on the wrong site, while the contractor maintained that Mayor Tayaban himself had pointed out the construction site.

• The Project and the Contract: In 1988, Mayor Tayaban proposed the construction of the Tinoc Public Market to the Governor, who approved it for funding by the CEB. Pugong won the bidding, and a contract was executed on March 1, 1989, between Pugong and the CEB. The contract designated the CEB as the project owner and required construction per CEB specifications. Construction began in June 1989.
• The Location Dispute: Petitioners claimed the contractor built the market on the wrong site, contrary to the location identified by the Sangguniang Bayan. Pugong, however, testified that Mayor Tayaban himself pointed out the construction site. Mayor Tayaban sent a letter (July 31, 1989) and a memorandum (August 3, 1989) to Pugong's laborers directing them to stop construction, but these were not addressed to the CEB or the Governor, who was a regular member of the CEB. Tayaban admitted he never informed the Governor of the specific location desired by the municipality, nor did he inform the Governor or the CEB of the alleged error in location when construction commenced, despite having met the Governor twice in 1989. The Site Development Plan specifying the exact location was completed only in August 1989, well after construction had started.
• The Demolition: On August 15, 1989, the Sangguniang Bayan adopted Resolution No. 20, deciding to demolish the erected structures because the contractor insisted on building on a site not identified by the municipal body. On the same day, petitioners and some men proceeded to the site and demolished the five concrete posts and other improvements. A municipal councilor testified that the demolition was conducted in the morning, while Resolution No. 20 was passed only in the afternoon. No notice of the demolition was given to the CEB or the contractor, and no CEB representative was invited to the Sangguniang Bayan session.
• The Damage: At the time of the demolition, the CEB had already disbursed ₱134,632.80 to Pugong. The destruction of the structures resulted in the stoppage of the project and the wastage of the disbursed government funds.

• Undue Injury Not Proved: Petitioners argued that the element of undue injury was not established because the CEB, the alleged injured party, did not complain or participate in the trial. They contended that Pugong's itemized list of expenses was self-serving and unsupported by receipts, and that Pugong was not mentioned in the Information as an injured party. Undue injury, they asserted, requires proof of actual injury or damage.
• Good Faith: Petitioners maintained that their letters to the contractor and the passage of Resolution No. 20 demonstrated good faith, as the Sangguniang Bayan was acting within its authority. They argued that the CEB's suspension order validated their action and that the CEB's failure to pursue charges against them showed recognition of its own mistake in not coordinating with the municipality.
• Validity of Demolition under Police Power and LOI No. 19: Petitioners argued that the Sandiganbayan erroneously applied the 1991 Local Government Code instead of the 1983 Code. Asserting that Pugong lacked a building permit under P.D. No. 1096, they contended the demolition was a valid implementation of LOI No. 19, which empowers mayors to remove illegal constructions, and a valid exercise of police power under the general welfare clause.
• Credibility of Prosecution Witness: Petitioners challenged the credibility of prosecution witness Abe Belingan, claiming he was not disinterested because he secured a contract for the market's second floor, and that his testimony regarding the Mayor's motive was hearsay. They also alleged political harassment, noting that Pugong's political allies who signed Resolution No. 20 were not charged.

• Undue Injury Established: The OSG and OSP countered that the real party-in-interest is the Republic of the Philippines, making the CEB's failure to file a complaint immaterial. They argued that actual injury to the government was evident from the commencement of construction and the demolition of the structures, and that Pugong also suffered undue injury. Pugong's list of expenses was properly testified to and not merely self-serving.
• Evident Bad Faith: The OSP asserted that petitioners' acts prior to and during the construction demonstrated bad faith.
• Witness Credibility and Selective Prosecution: The OSP maintained that Belingan's contract was insufficient to prove bias. Regarding the exclusion of Pugong's allies from the complaint, the OSP clarified that those councilors did not participate in the actual demolition.

• Undue Injury: Whether the element of undue injury under Section 3(e) of R.A. No. 3019 was sufficiently proved despite the CEB's non-participation in the trial and the alleged lack of receipts for the contractor's expenses.
• Evident Bad Faith: Whether petitioners acted with evident bad faith in causing the demolition of the public market structures.
• Validity of Demolition: Whether the demolition was a valid exercise of police power and justified under P.D. No. 1096 and LOI No. 19, and whether the 1991 Local Government Code was properly applied.
• Credibility of Witnesses: Whether the Sandiganbayan erred in giving credence to the testimony of prosecution witness Abe Belingan.

• Undue Injury: Undue injury to the government was proven to a moral certainty. The CEB's non-participation in the trial does not negate the injury, as a criminal complaint need not be filed by the offended party. The unceremonious demolition of the structures, which resulted in the wastage of ₱134,632.80 already disbursed by the government and necessitated additional expenses to rebuild, constitutes substantial injury. Proof of the exact quantum of damage is not essential, provided the injury is substantial and not merely negligible.
• Evident Bad Faith: Evident bad faith was established by petitioners' manifest deliberate intent to cause damage. This was demonstrated by the precipitate implementation of Resolution No. 20 on the same day it was adopted, without notice to the CEB or the contractor; the fact that the demolition occurred in the morning before the Resolution was passed in the afternoon; the failure to inform the CEB or the Governor of the location dispute despite multiple opportunities; and Mayor Tayaban's admission that he did not specify the location in the project proposal and only completed the Site Development Plan in August 1989, after construction had begun.
• Validity of Demolition: The demolition was not justified. The 1991 LGC was correctly held inapplicable, as the 1983 LGC was the prevailing law at the time. However, reliance on P.D. No. 1096 and LOI No. 19 was deemed an afterthought, as Resolution No. 20 and the prior letters cited only the wrong location as the reason for the demolition, not the lack of a building permit. The demolition was not a valid exercise of police power because it contravened R.A. No. 3019. Furthermore, the general welfare clause could not justify the summary abatement, as the structure was not a nuisance per se affecting immediate safety, and petitioners failed to consult the proper authority (CEB) or conduct a hearing.
• Credibility of Witnesses: The Sandiganbayan's assessment of witness credibility is binding, absent arbitrariness or palpable error. Belingan's contract for the second floor does not compellingly prove bias, and no improper motive to perjure was shown.

• Elements of Section 3(e) of R.A. No. 3019 — To constitute a violation, the following must be established: (1) the accused is a public officer discharging administrative or official functions; (2) the prohibited act was committed during the performance of official duty; (3) the officer acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and (4) the action caused undue injury to the government or any private party, or gave any party unwarranted benefit, advantage, or preference. The Court applied these elements to find that the municipal officials' acts satisfied all requisites.
• Evident Bad Faith — Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud. It contemplates a state of mind affirmatively operating with furtive design or with some motive of self-interest or ill will for ulterior purposes. Evident bad faith connotes a manifest deliberate intent to do wrong or cause damage. The Court applied this definition to petitioners' hasty and uncommunicated demolition of the market.
• Undue Injury under R.A. No. 3019 — Proof of the extent or quantum of damage is not essential, it being sufficient that the injury suffered or benefits received can be perceived to be substantial enough and not merely negligible. The Court relied on this to uphold the finding of undue injury despite the lack of receipts for the contractor's expenses, focusing on the government funds wasted due to the demolished structures.

• "Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud." — Defines evident bad faith in the context of anti-grraft laws.
• "Under prevailing jurisprudence, proof of the extent or quantum of damage is not essential, it being sufficient that the injury suffered or benefits received can be perceived to be substantial enough and not merely negligible." — Clarifies the standard for proving undue injury under Section 3(e).
• "Neither can petitioners seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings. This principle applies to nuisances per se, or those which affect the immediate safety of persons and property and may be summarily abated under the undefined law of necessity." — Limits the application of summary abatement under the general welfare clause to nuisances per se.

• Matalam v. Sandiganbayan, G.R. No. 165751 — Followed for the enumeration of the indispensable elements of Section 3(e) of R.A. No. 3019.
• Llorente, Jr. v. Sandiganbayan, 350 Phil. 820 (1998) — Distinguished. In Llorente, the private complainant eventually received the withheld salaries, and no other loss was specified, rendering the injury speculative. In the present case, the destruction of the concrete posts constituted clear and substantial evidence of undue injury to the government.
• Soriquez v. Sandiganbayan; Cabrera v. Sandiganbayan; Fonacier v. Sandiganbayan — Followed for the doctrine that proof of the quantum of damage is not essential, provided the injury is substantial and not negligible.
• City of Manila v. Laguio, Jr., G.R. No. 118127 — Followed for the principle that the exercise of police power by a local government is invalid if it contravenes law, and that summary abatement without judicial proceedings applies only to nuisances per se.

• 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 unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. Applied as the core basis for petitioners' conviction.
• Section 9, Republic Act No. 3019 — Prescribes the penalty of imprisonment for not less than six years and one month nor more than 15 years, perpetual disqualification from public office, and confiscation or forfeiture of prohibited interest/unexplained wealth. Applied to determine the penalty, including the imposition of perpetual disqualification.
• Sections 56 and 59(a), Republic Act No. 7160 (1991 Local Government Code) — Provide for the review of municipal resolutions by the Sangguniang Panlalawigan and the effectivity of such resolutions. Declared inapplicable because the act occurred in 1989, before the 1991 LGC took effect.
• Batas Pambansa Blg. 337 (Local Government Code of 1983) — The prevailing law at the time of the passage of Resolution No. 20. Noted to lack counterpart provisions to Sections 56 and 59(a) of the 1991 LGC.
• Presidential Decree No. 1096 (National Building Code of the Philippines) — Requires a building permit for construction or demolition. Petitioners' reliance on this was deemed an afterthought.
• Letter of Instruction No. 19 — Empowers certain public officials to remove illegal constructions built without permits. Petitioners' reliance on this was deemed an afterthought, as the lack of a permit was never mentioned in Resolution No. 20 or the prior letters.

Ynares-Santiago, Callejo, Sr., Chico-Nazario, Nachura