G.R. No. 81563 - Arias vs. Sandiganbayan

The case involves petitioners Amado C. Arias, then Auditor of the Rizal Engineering District in Pasig, and Cresencio D. Data, then District Engineer of the Pasig Engineering District.

The transaction at issue pertained to the acquisition of land for the Mangahan Floodway Project, a government initiative meant to address perennial flooding in Marikina and Pasig, Metro Manila.

The land, originally classified as “riceland” and assessed at a low value (P5.00 per square meter) in the tax declarations, was reclassified as “residential land” when sold to the Government.

The negotiated purchase involved the execution of a Deed of Sale on April 20, 1978, transfer of title on June 8, 1978, and subsequent processing of a general voucher for payment amounting to P1,520,320.

The approval process followed the customary chain of authority where documents were handled by a committee of subordinates, and the final pre-audit and signing were done by Arias as auditor, with petitioner Data’s role being that of the signing authority on the transaction’s supporting voucher.

Multiple documents in the transaction were found to be irregular or allegedly falsified.

A key tax declaration purportedly valued the land at P5.00 per square meter, which contrasted sharply with the negotiated price of P80.00 per square meter.

Other supporting documents, including certifications and sworn statements, involved alterations, typewritten numbers instead of machine numbering, and antedated registration stamps.

These irregularities raised suspicions regarding the authenticity of the documents and the true market value of the land sold to the Government.

The petitioners were charged under Section 3, paragraph (e) of the Anti-Graft and Corrupt Practices Act for causing undue injury to the Government by approving a transaction that allegedly represented gross overpricing.

Evidence suggested that the committee (comprising other subordinate officials) handled most of the detailed processing and verification, whereas petitioners Arias and Data were noted only for their roles in signing and pre-audit.

The prosecution alleged that there was a conspiracy among the public officers to defraud the Government, yet the extent of the petitioners’ direct and active involvement in planning or executing the fraud remained in question.

The majority opinion emphasized that while irregularities existed, there was insufficient evidence to prove that petitioners Arias and Data intentionally participated in a fraudulent conspiracy.

Conversely, the dissenting opinion (set forth by Justice Grino-Aquino) argued that their failure to exercise due diligence amounted to connivance in the conspiracy, although this view did not prevail in the final decision.

Whether the actions of petitioners, by merely signing and pre-auditing documents as part of routine administrative functions, can establish their participation in a conspiracy to defraud the Government.
Whether reliance on subordinated duties and certifications by the petitioners absolves them from personal culpability in verifying the irregularities present in the supporting documents.
Whether the alleged gross overpricing—based on the conflicting land valuations (P5.00 vs. P80.00 per square meter)—can be conclusively proven to have caused undue injury to the Government.
Whether the evidence on record is sufficient to establish beyond reasonable doubt that the petitioners acted with manifest partiality, evident bad faith, or gross inexcusable negligence.
The appropriateness of employing the conspiracy theory as a basis for conviction when the petitioners’ roles were primarily supervisory and administrative.