G.R. No. 156125 - Munoz, Jr. vs. Ramirez

The case involves petitioners Elias C. Quibal, Municipal Mayor of Palapag, Northern Samar, and Antonio U. Deniega, Municipal Treasurer of Palapag, Northern Samar, charged with the violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act).
A private individual, Eduardo C. Guevarra—representing Floters Construction—was also implicated but remains at large; only Quibal and Deniega were arrested, tried, and convicted.

On November 27, 1987, the municipality of Palapag, represented by its OIC vice-mayor Teodoro C. Bello, executed a contract with Floters Construction, represented by Guevarra, for the construction of a municipal public market.
The contract stipulated a completion period of 100 days for a project priced at P652,562.60, with payments to be released in accordance with the percentage of work accomplished.
Between February 16, 1988 and April 12, 1988, Quibal and Deniega issued four checks totaling P650,000.00 to the contractor, even though evidence later showed that only 36.24% of the work had been completed.

A COA Special Audit Team, on August 31, 1988, inspected the progress of the municipal market’s construction and found that the work was significantly behind schedule.
The audit revealed that the actual cost of the work completed was only P301,746.65, while unfinished portions were valued at P348,235.35.
The contractor had been fully paid (P650,000.00) despite the incomplete construction, and supporting documents exhibited numerous irregularities:

Disbursement vouchers (Exhibits “E” to “E-3”) were improperly filled or unsigned.
Payments exceeding the P200,000.00 threshold were not accompanied by the required Certificate of Acceptance, contravening COA rules.

In January 1989, Provincial Auditor Marissa Bayona submitted an inspection report recommending legal action against the public officials and the contractor.
On April 7, 1989, the Ombudsman formally notified Mayor Quibal of the charges filed against him.
Despite a request by Quibal on May 12, 1989 for a re-audit of cost valuation, this appeal was denied.
In November 1989, the construction resumed with available materials; the market was eventually completed in December 1989 and began operations with market stall leasing in January 1990.

Deniega claimed that the complete and signed vouchers with the necessary supporting documents had been properly submitted to the Office of the Provincial Auditor.
Mayor Quibal defended his actions by arguing that the additional payments allowed the contractor to purchase construction materials at lower prices and that the unused stockpile—valued at approximately P348,235.35—should be credited against the total payment.

The Sandiganbayan (Second Division) found Quibal and Deniega guilty beyond reasonable doubt as co-principals in the commission of the offense.
The court held that the premature and excessive releases of funds, disregarding the contractual stipulation of payment based upon the percentage of work accomplished, constituted manifest partiality and evident bad faith.
The decision imposed penalties including imprisonment (from 6 years and 1 month to 10 years and 1 day), perpetual disqualification from public office, and the indemnification of P348,345.35 to the municipal government.

Petitioners argued that their constitutional right to due process was violated by not allowing a re-examination and re-audit of a project that was completed and already in use.
They contended that reconsideration of the project's cost and the proper valuation of unused materials could have exonerated them.

They further asserted that no undue injury was caused to the government since the municipal market was eventually completed, albeit with a delayed timeline and apparent contractual breaches.