G.R. No. 233653 - People vs. Guanzon y Ceneta

Case Summary (G.R. No. 233653)

Factual Background

In 1988, then Mayor Tayaban submitted a project proposal to provincial governor Benjamin Cappleman for the construction of the Tinoc Public Market. The governor informed Tayaban that the proposal had been approved and that funding would be sourced from the CEB. A bidding was then conducted, and Pugong won the contract.

On March 1, 1989, a formal contract was executed between Pugong, as contractor, and the CEB, as project owner. Construction started in June 1989. On August 15, 1989, the Sangguniang Bayan of Tinoc adopted Resolution No. 20, declaring, in substance, that the constructors had persisted in erecting building pedestals on a site that allegedly did not correspond to the location identified by the municipal body. Resolution No. 20 further resolved that the erected structures were to be demolished so that the public market building could be erected as identified and decided by the Sangguniang Bayan.

That same day, Tayaban and his co-petitioners proceeded to the construction site and demolished the structures and improvements introduced thereon, which resulted in Pugong filing an Affidavit-Complaint.

Procedural History and Information

Following the complaint, an Information dated June 26, 1992 charged petitioners with violation of Section 3(e) of R.A. No. 3019. The Information alleged that, on August 17, 1989 and for sometime prior or subsequent thereto, petitioners, in the performance of their official functions and in evident bad faith and conspiracy, unanimously passed and approved Resolution No. 20, thereby vesting upon themselves authority to demolish the half-finished market construction, and that they themselves personally and actually demolished it to the damage and prejudice of the government, particularly the CEB, as owner of the project.

Upon arraignment on December 14, 1992, petitioners pleaded not guilty. After trial, the Sandiganbayan convicted all accused for violation of Section 3(e), R.A. No. 3019, imposing an indeterminate prison sentence with a minimum of six years and one month and a maximum of eight years, and ordering petitioners to jointly and severally pay the government P134,632.80, without subsidiary imprisonment in case of insolvency. Petitioners’ motion for reconsideration was denied on September 28, 2001, prompting the present petition for review on certiorari.

Issues Framed by Petitioners’ Assignments of Error

Petitioners advanced three principal arguments. First, they contended that the prosecution failed to prove undue injury, an alleged indispensable element under Section 3(e) of R.A. No. 3019, because the supposed injured party, the CEB, did not complain or participate in the trial, and therefore, they argued, injury could not be established without the CEB’s testimony. They further attacked the prosecution’s proof of expenses as self-serving due to lack of receipts and argued that Pugong was not mentioned in the Information as an injured party. Petitioners also asserted that evident bad faith was not established, pointing to alleged efforts to communicate with the contractor and the passage of Resolution No. 20 as evidence of good faith.

Second, petitioners argued that the Sandiganbayan erred by treating their act as unlawful despite their claimed legal authority derived from local government law and police power. In particular, they argued that Resolution No. 20 was a valid legislative act, that the demolition was an implementation of Letter of Instruction (LOI) No. 19, and that it was an exercise of police power under the general welfare clause. They also claimed that the Sandiganbayan erred in applying Sections 56 and 59(a) of the Local Government Code (LGC) of 1991 (R.A. No. 7160) because Resolution No. 20 was adopted in 1989, when the applicable law was the Local Government Code of 1983 (B.P. Blg. 337). Petitioners invoked the alleged failure to secure a building permit as a basis to demolish without a permit under P.D. No. 1096.

Third, petitioners assailed the credibility of prosecution witness Abe Belingan, asserting that he was biased because he had a contract to cement the purported second floor of the market and that his testimony regarding the reason for demolition was hearsay.

Petitioners’ and the Prosecution’s Contentions

Petitioners maintained that Resolution No. 20 was grounded on legitimate municipal authority and that their actions were intended to stop construction in the wrong location, allegedly under LOI No. 19 and police power. They also suggested that the filing of the complaint was a politically motivated harassment, since other councilors who allegedly supported Resolution No. 20 were not included.

The Office of the Solicitor General (OSG) and the Office of the Special Prosecutor (OSP) countered that undue injury had been caused to the Government and that it was immaterial that the CEB did not file the criminal case. They stressed that a complaint for preliminary investigation need not be filed by the “offended party.” They also asserted that Pugong incurred expenses, and that petitioners’ bad faith was demonstrated by their manner of implementation and the lack of due notice to the CEB and contractor. As to witness credibility, the prosecution relied on the rule that the trial court’s assessment of credibility controls absent showing of arbitrariness, abuse of discretion, or palpable error, and that Belingan’s contract relationship did not compel a finding of bias.

Legal Basis: Section 3(e), R.A. No. 3019

The Court articulated the elements indispensable for conviction under Section 3(e) of R.A. No. 3019: (a) the accused is a public officer discharging administrative or official functions (or private persons charged in conspiracy with them); (b) the prohibited act was committed in relation to the accused’s official functions; (c) the act was done with manifest partiality, evident bad faith, or gross inexcusable negligence; and (d) the act caused undue injury to the government or any private party, or gave any party an unwarranted benefit, advantage, or preference.

The Court also discussed the nature of evident bad faith, explaining that it does not connote bad judgment or negligence. It instead imputes a dishonest purpose or moral obliquity and entails a manifest deliberate intent to do wrong or cause damage. The Court cited jurisprudence for the proposition that bad faith is conscious and furtive, and it partakes of the nature of fraud.

The Court’s Reasoning on Evident Bad Faith

The Court found petitioners’ claim of good faith unpersuasive. It held that Resolution No. 20 was implemented on the same day it was adopted, without due notice of the planned demolition given to the CEB and the private contractor. A councilor witness, Raymundo Madani, testified that Resolution No. 20 was passed in the afternoon of August 15, 1989, after the demolition had already been conducted earlier that morning. This sequencing, the Court held, indicated a deliberate intent to wrongfully cause damage.

The Court further relied on credible evidence that Tayaban pointed out the construction site to Pugong’s laborers when they began construction of the portion that was later demolished. It did not treat Tayaban’s letters and memorandum dated July 31, 1989 and August 3, 1989 as proof of good faith. The Court reasoned that the CEB implemented the project, and petitioners’ grievances should have been addressed to the CEB. The Court noted that petitioners failed to furnish the CEB or the governor with copies of the correspondence and did not demonstrate that Pugong was informed of the contents. Moreover, under the contract, the contractor was obliged to build according to plans and specifications provided by CEB’s technical staff, and the Court stressed that the contract made the CEB the project owner.

The Court also cited petitioners’ admissions as bolstering bad faith. Tayaban admitted that he did not indicate the exact market location when submitting the proposal and did not suggest the location to the governor despite meetings in 1989 and despite being informed that the project had been approved and funded. When Tayaban later discovered the project was allegedly being built in an improper place, he still admitted he did not inform the governor. Petitioners also admitted they never checked with the CEB where the market was intended to be built and that they only informed the CEB in early August 1989, even though Tayaban claimed he knew the exact site as early as April 1989. Additionally, when the Sangguniang Bayan convened on August 15, 1989, it did not invite any representative from the CEB.

From these facts, the Court concluded that petitioners acted with a manifest and deliberate intent to cause damage. It held that their conduct demonstrated more than mere mistake or negligence.

The Court’s Reasoning on Undue Injury to the Government

The Court rejected the argument that undue injury could not be established absent the CEB’s participation in the trial. It held that the Information itself sufficiently identified the injured party as the Government, represented by the CEB, and that the failure of the CEB to initiate the criminal action did not bar prosecution. The Court emphasized that preliminary investigation by the fiscal did not require the complaint to be filed by the “offended party,” and that it was sufficient that Pugong filed the affidavit-complaint for that purpose.

On the merits of injury, the Court found that undue injury was proven to a degree sufficient for conviction. It reasoned that the demolition of concrete posts and other improvements built as part of the foundation constituted clear, substantial evidence of damage to the Government. The Court noted that by the time of the demolition, the CEB had already disbursed P134,632.80 in favor of Pugong for the project, and that rebuilding or resuming construction would require additional expenses. It therefore held that undue injury was proven to the point of moral certainty.

The Court a

Case Syllabus (G.R. No. 233653)

Petitioners Robert Tayaban y Caliplip, Francisco Maddawat y Tayoban, Artemio Balangue y Langa, Francisco Mayumis y Bahel, and Quirino Pana y Cuyahen sought review of the Sandiganbayan Decision dated June 25, 2001 and its Resolution dated September 28, 2001, which denied petitioners’ Motion for Reconsideration.
Respondents were People of the Philippines and the Honorable Sandiganbayan, which convicted petitioners for violation of Section 3(e) of Republic Act (R.A.) No. 3019.

Parties and Procedural Posture

Petitioner Robert Tayaban was the Municipal Mayor of Tinoc, Ifugao.
The other petitioners were Municipal Councilors of Tinoc, Ifugao, who signed and supported the questioned municipal resolution.
Petitioners were charged in the Sandiganbayan through an Information dated June 26, 1992 for Section 3(e) of R.A. No. 3019.
Petitioners pleaded not guilty upon arraignment on December 14, 1992.
After trial, the Sandiganbayan convicted all petitioners and imposed an indeterminate term of imprisonment and joint and several reimbursement to the Government.
Petitioners’ Motion for Reconsideration was denied by the Sandiganbayan on September 28, 2001, prompting the present Petition for Review on Certiorari.

Key Factual Allegations

Sometime in 1988, then Mayor Tayaban submitted a project proposal to provincial governor Benjamin Cappleman for the construction of the Tinoc Public Market.
The governor approved the proposal and stated that the project would be funded by the Cordillera Executive Board (CEB).
A bidding was conducted and private contractor Lopez Pugong (Pugong) won the contract for the construction of the public market.
On March 1, 1989, a formal contract was executed between Pugong and the CEB as project owner.
Actual construction commenced in June 1989.
On August 15, 1989, the Sangguniang Bayan of Tinoc adopted Resolution No. 20, which resolved to demolish the erected structures to proceed with the public market as identified and decided by the municipal body.
On the same day, petitioners, together with some men, proceeded to the construction site and demolished the structures and improvements introduced thereon.
After the demolition, Pugong filed an Affidavit-Complaint, which led to the Information charging petitioners with violation of Section 3(e) of R.A. No. 3019.

Information and Elements Charged

The Information alleged that petitioners, being public officers and acting in evident bad faith and conspiracy, unanimously passed and approved Resolution No. 20 to vest themselves with authority to demolish the half-finished construction and that they personally carried out the demolition.
The Information identified the alleged injured party as the government, particularly the CEB as the owner of the project.
The Information was couched as acts committed on August 17, 1989 and for some time prior or subsequent thereto, in the municipality of Tinoc, Ifugao.

Statutory Framework

The Court applied Section 3(e) of R.A. No. 3019, which penalizes a public officer who causes undue injury to any party (including the Government) or gives any private party unwarranted benefits, advantage, or preference through manifest partiality, evident bad faith, or gross inexcusable negligence.
The Court reiterated the indispensable elements for conviction under Section 3(e) of R.A. No. 3019, namely:
- the accused was a public officer discharging administrative or official functions, or private persons charged in conspiracy with them;
- the prohibited act was committed during the performance of official duty in relation to the public position;
- the act was done with manifest partiality, evident bad faith, or gross inexcusable negligence;
- the act caused undue injury to the government or any private party, or gave unwarranted benefits, advantage, or preference.

Issues Raised on Review

Petitioners claimed the Sandiganbayan erred in finding bad faith and in concluding that they caused undue injury.
Petitioners asserted that undue injury was not proved because the CEB did not complain or participate in the trial and therefore could not establish injury through testimony.
Petitioners challenged the evidentiary basis of the expenses submitted by Pugong, contending the list was unsupported by receipts and was allegedly self-serving.
Petitioners argued that the Information did not name Pugong as an injured party and that undue injury could only mean actual damage established by proof.
Petitioners maintained that their communications and letters to the contractor’s laborers showed good faith, and that the passage of Resolution No. 20 reflected action by the Sangguniang Bayan within authority.
Petitioners argued that Sections 56 and 59(a) of the 1991 Local Government Code (LGC) of 1991, on review and effectivity of local ordinances and resolutions, were not considered correctly, and that the applicable law at the time was B.P. Blg. 337 (Local Government Code of 1983).
Petitioners asserted that their demolition implementation was justified by Letter of Instruction (LOI) No. 19 and an exercise of police power, linked to the alleged absence of the required building permit under P.D. No. 1096.
Petitioners challenged the credibility and admissibility of testimony by prosecution witness Abe Belingan, alleging bias due to an alleged cementing contract and asserting hearsay about the motive for demolition.
Petitioners also alleged the prosecution was a form of political harassment, claiming that Sangguniang Bayan members who signed Resolution No. 20 and who were alleged political allies of Pugong were not included in the complaint.

Court’s Evaluation of Bad Faith

The Court held that bad faith under Section 3(e) did not mean mere error in judgment or negligence; it signified a dishonest purpose or conscious doing of a wrong.
The Court characterized evident bad faith as a manifest deliberate intent to do wrong or cause damage.
The Court affirmed the Sandiganbayan’s finding that petitioners acted with bad faith in causing the demolition.
The Court relied on the fact that Resolution No. 20 was implemented the same day it was adopted, without due notice to the CEB and the private contractor.
The Court cited testimony from Raymundo Madani, a councilor who signed Resolution No. 20, that the resolution was passed only in the afternoon of August 15, 1989 after the demolition occurred that morning.
The Court also relied on Pugong’s testimony that petitioner Tayaban himself pointed out the site where laborers started construction of the demolished public market when Pugong’s laborers asked where they would erect the market.
The Court found that Tayaban’s July 31, 1989 letter and the August 3, 1989 memorandum to laborers directing them to stop construction did not prove good faith because the CEB was the project implementer and any grievance should have been addressed to the CEB.
The Court noted that petitioners did not provide evidence that they informed the CEB of their objections using the letters and memorandum, and the letters were not addressed to Pugong.
The Court held that the contractor’s men could not be blamed for disregarding directives that were not connected to the con