G.R. No. 9945 - People vs. Udarbe

Case Summary (G.R. No. 9945)

Facts Found by the Trial Court

The trial court made the following specific factual findings, which the appellate court accepted: Udarbe was municipal president from October 28, 1912; while presiding the municipal council adopted Regulation No. 7 (Dec. 9, 1912) providing that current leaseholders of fishpond sections could continue by paying the fixed rental, subject to others bidding if preferential rights were waived; on December 16, 1912, Udarbe presided at the auction and his participation in the bidding for section No. 102 was recorded, with that section adjudicated to him as highest bidder for P2 per year; he paid the municipal treasurer P2 on January 10, 1913; he continued in the lease of section No. 102 through December 1913; on December 20, 1913 he transferred the lease to his nephew, Miguel Udarbe.

Defendant’s Position and Evidentiary Contentions

Udarbe contended that he already held the lease of section No. 102 before his appointment as municipal president and therefore merely continued an existing private right; he also asserted he did not participate in the December 16, 1912 bidding. The defense relied further on two Attorney-General opinions (1902 and 1909) to argue that the statute should not be construed to criminalize the conduct alleged. The trial court found the defendant’s assertion of a preexisting lease not sufficiently proven; instead the documentary minute of December 16, 1912 showed he was awarded the lease while presiding.

Legal Issue Presented

Whether a municipal officer who, by reason of his office, participates in municipal deliberations and actions, may become directly or indirectly interested in a contract or business of the municipality — here, the leasing of municipal property — without violating section 28 of the Municipal Code (as amended by Act No. 663), and whether the facts proved constituted a penal offense under that provision.

Statutory Text, Purpose, and Analogous Penal Provision

Section 28 of the Municipal Code, as amended, proscribes that no municipal officer “shall be directly or indirectly interested in any contract work, or cockpits, or any other permitted games and amusements, or business of the municipality, or in the purchase of any real estate or any other property belonging to the corporation,” with violation punishable by imprisonment not less than six months nor more than two years. The statute’s purpose is to prevent conflicts of interest, the subordination of municipal interests to private interests of officers, and the risk of fraud or favoritism in transactions where municipal officers influence the terms, award, or administration of municipal contracts or leases. Article 397 of the Penal Code was cited as an analogous provision penalizing a public officer who becomes interested in any contract or operation in which he must intervene by reason of his office; the court treated this as harmonizing with the policy behind section 28.

Court’s Analysis of Evidence and Application of Law

The court emphasized documentary proof: Minute No. 54 (Dec. 16, 1912) established that Udarbe presided over the auction and was adjudicated section No. 102 as highest bidder. The court rejected the defense claim that he held the lease prior to his appointment because the Minute Book did not substantiate that assertion. Even if he had held the lease prior to appointment, the court reasoned that continuing to enjoy or renew such a lease while presiding over council resolutions (notably the Dec. 9, 1912 regulation granting preferential rights to incumbent leaseholders) created the same conflict the statute seeks to prevent. The court found Udarbe’s active participation in adopting a rule that advantaged incumbent leaseholders, and then bidding and obtaining the lease while presiding, demonstrated precisely the kind of conflict of interest and possibility of unfair advantage that section 28 forbids. The court also noted his subsequent transfer of the lease to a nephew, and his prior excuse from deliberation on Resolution No. 202 (Dec. 15, 1913) as evidence he understood the delicate nature of the matter — an understanding that made his earlier conduct more culpable.

Treatment of Attorney‑General Opinions and Precedent

The defense relied on two Attorney‑Genera

Case Syllabus (G.R. No. 9945)

Citation, Court, and Date

Reported at 28 Phil. 382.
G.R. No. 9945.
Decision delivered November 12, 1914.
Decision authored by Justice Araullo.
Justices Arellano, C. J., Torres, Carson, and Moreland concurred.

Procedural Posture

Information filed in the Court of First Instance of Ilocos Sur dated March 25, 1914, charging Clemente Udarbe with violation of section 28 of the Municipal Code (as amended by section 1 of Act No. 663).
Trial court (Court of First Instance) rendered judgment on April 4, 1914, finding defendant guilty and sentencing him to six months' imprisonment and payment of costs.
Defendant appealed to the Supreme Court, contending errors in the trial court’s findings of fact and law and that the proven facts did not constitute a violation of section 28.

Statutory Provision Charged

Section 28 of the Municipal Code, as amended by section 1 of Act No. 663, provided that: "No municipal officer shall be directly or indirectly interested in any contract work, or cockpits, or any other permitted games and amusements, or business of the municipality, or in the purchase of any real estate or any other property belonging to the corporation."
Violation of the provision is punishable by imprisonment for not less than six months nor more than two years.

Core Facts Proven at Trial

Clemente Udarbe was appointed municipal president of Magsingal on October 28, 1912, and entered upon the duties of that office that same day.
Under his presidency the municipal council, on December 9, 1912, approved Regulation No. 7 for leasing fishponds; Article 10 provided that existing leaseholders (including section 102 among others) should continue in their leases so long as they paid the rental fixed for each section, without prejudice to granting leases to others if the leaseholders waived their preferential right (Exhibit 1 of the defense).
An auction/bidding for fishpond sections was held on December 16, 1912, in the municipal town hall; Minute No. 54, series of 1912 (folios noted) records that the accused presided over and participated in that auction and bidding.
Minute No. 54 shows the defendant took part in bidding for section No. 102 of the Pagsanaan fishpond and that that section was adjudicated to him as the highest bidder for the sum of two pesos a year.
The defendant paid the municipal treasurer of Magsingal on January 10, 1913, the sum of P2 as the price for the lease of section No. 102 for the remainder of that year.
The defendant continued in the lease of section No. 102 from its adjudication (December 16, 1912) through December 1913 — i.e., throughout the year 1913 — while still holding the municipal presidency (he remained municipal president on March 30, 1914, at trial).
On December 15, 1913, Resolution No. 202 (Exhibit 2 of the defense) regarding concession to existing leaseholders to transfer the enjoyment of leases was adopted at a session from which the defendant excused himself on grounds of delicacy.
On December 20, 1913, the defendant transferred the lease of the relevant section (described as transferred to section No. 19 in Resolution No. 206, back of folio 85 of the Minute Book, Exhibit A) to Miguel Udarbe, his nephew — the court infers this transferred section is the same as No. 102 (both being in Pagsanaan Lake and defendant not shown to hold any other section there).

Defendant’s Principal Contentions and Defenses

The defendant asserted as his defense that the trial court erred in various findings of fact and in declaring those facts to constitute a clear violation of section 28.
He claimed that when he was appointed municipal president (October 28, 1912) he already held the lease to section No. 102 and therefore did not take part in the December 1912 bidding; he asserted continuity of lease by virtue of the municipal council resolution (Regulation No. 7, Article 10) that allowed existing leaseholders to continue upon payment of the fixed rental.
He presented Exhibit 4 (the resolution) and other minutes to support that he was an existing leaseholder entitled to preferential continuation.
In his brief, the defense cited two Attorney-General opinions (May 5, 1909 and May 22, 1902) to argue that section 28 should not be construed to prohibit his actions.

Evidence Relied On by the Prosecution and Court Findings on Evidence

Minute Book entries (Minute No. 54, series of 1912; folios cited, Exhibit A of the prosecution) recorded the auction of December 16, 1912, and show the accused presided over and participated in the bidding and was adjudged the highest bidder for section No. 102 at two pesos a year.
Payment record showing defendant paid the municipal treasurer on January 10, 1913, the sum of P2 as the price for the lease.
Municipal council minutes (Regulation No. 7, December 9, 1912; Article 10) and later resolutions (Resolution No. 202, December 15, 1913; Resolution No. 206, December 20, 1