G.R. No. 85464 - Llorente vs. Sandiganbayan

David P. Llorente, the petitioner, was employed by the Philippine Coconut Authority (PCA) from 1975 until his resignation on August 31, 1986.
He held several positions, namely Assistant Corporate Secretary, Corporate Legal Counsel, and finally Deputy Administrator for Administrative Services, Finance Services, and Legal Affairs Departments.
The respondents are the Sandiganbayan (Third Division) and the People of the Philippines.

PCA employees who resigned or were retired were required to secure clearances in order to claim their gratuity benefits.
A key requirement (Condition (a)) stipulated that the clearance could only be signed by the PCA officers if there was no item appearing under “PENDING ACCOUNTABILITY” or only after each such item was fully settled. Settlement had to be written in red ink.
Once signed by the PCA officers, the clearance was to be approved by Atty. Llorente (for rank-and-file employees) or by Col. Duenas (for officers) and then subsequently by Atty. Rodriguez, the corporate auditor.

Clearances for other PCA employees such as Mrs. Perez, Mr. Azucena, and Mrs. Javier, all dated October 30, 1981, were favorably processed despite showing pending accountabilities (e.g., obligations to GSIS and UCPB).
Mrs. Javier’s clearance specifically noted unsettled obligations amounting to a GSIS loan and a UCPB car loan, which were later deducted from her gratuity benefits.
Despite the strict requirements of Condition (a), PCA officers, including Mrs. Sotto from the accounting division, approved these clearances, and the subsequent vouchers for their gratuity benefits were processed following deductions of the outstanding amounts.

Mr. Curio’s clearance, dated November 4, 1981, was initially approved by all PCA officers, including a signature from Mrs. Sotto—even though a handwritten notation indicated pending accountabilities totaling P10,714.78.
When this clearance was submitted to Atty. Llorente for final approval, he refused to do so because he was aware of additional issues:

An affidavit dated November 26, 1981, in which Mr. Curio assumed responsibility for a disallowed amount of cash advances (originally P92,000.00, later noted as P55,000.00).
The existence of other pending obligations that Mr. Curio had on his clearance.

Despite follow-ups by Mr. Curio with Col. Duenas and the Legal Department (which eventually produced a formal report justifying the withholding), the clearance remained unapproved for a considerable period.
On November 21, 1986, Mr. Curio finally secured a new clearance that omitted Condition (a), although pending accountabilities of P10,714.78 still remained.
His voucher for gratuity benefits was subsequently approved and processed—deducting the unresolved obligations—but the resolution came too late, as Mr. Curio suffered significant adverse consequences.

Due to the delay and withholding of his clearance, Mr. Curio was unable to secure gainful employment between December 1981 and December 1986.
His inability to present a valid PCA clearance led to rejection by potential employers like the Philippine Cotton Authority and the Philippine Fish Marketing Administration, each offering a salary of P2,500.00 per month.
At an age when re-employment became increasingly difficult, the delay resulted in financial hardship, with late payment of gratuity benefits causing further monetary loss due to accrued interest and unfavorable exchange rates.
The issue escalated to the filing of an Information on December 10, 1986, for violation of Section 3(c) of the Anti-Graft and Corrupt Practices Act, alleging abuse of position by Atty. Llorente in refusing to issue Mr. Curio’s clearance.

Although the Sandiganbayan acquitted Atty. Llorente criminally on the ground that there was no evidence of evident bad faith, the Court separately addressed his civil liability.
It was held that despite acting within the bounds of legal procedure, Atty. Llorente’s actions, particularly his differential treatment compared to the handling of other employees’ clearances, amounted to abuse of his right.
Based on the principle that even a legal act executed in bad faith may incur civil liability, the petitioner was ordered to pay compensatory damages amounting to P90,000.00.

Whether the petitioner’s acts—though procedurally legal and resulting in criminal acquittal due to the absence of evident bad faith—nonetheless displayed an element of bad faith that justified imposing civil liability.
Whether the practice of approving clearances for some employees while withholding Mr. Curio’s clearance, despite similar pending obligations, constituted wrongful discrimination or abuse of right.
The proper interpretation and application of Condition (a) in the clearance process and whether its rigorous enforcement against Mr. Curio was legally justified.
Whether the Rules of Criminal Procedure, which mandate that a judgment include findings on civil liability even in cases of acquittal unless disproved, were correctly applied in this case.
If the principles under Articles 19 and 27 of the Civil Code, which require the performance of duties with justice and good faith, were violated by the petitioner in his handling of Mr. Curio’s clearance.