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Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 188487               February 14, 2011

VAN D. LUSPO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 188541

SUPT. ARTURO H. MONTANO and MARGARITA TUGAOEN, Petitioners,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 188556

C/INSP. SALVADOR C. DURAN, SR., Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

D E C I S I O N

NACHURA, J.:

Petitioners, the accused in Sandiganbayan Criminal Case No. 20192, in this consolidated petition for review seek the reversal of the January 19, 2009 decision¹ of the Sandiganbayan, finding them guilty beyond reasonable doubt of violating Section 3(e) of Republic Act (R.A.) No. 3019. Likewise assailed is the Sandiganbayan’s June 30, 2009 resolution² denying their motions for reconsideration.

The Facts

Acting on a report of the Commission on Audit (COA) regarding disbursement irregularities for combat, clothing, and individual equipment (CCIE) in Regions VII and VIII, North Capital Command (CAPCOM), the Philippine National Police-General Headquarters (PNP-GHQ), through the Office of the Inspector General (OIG), conducted an investigation of several officers of the PNP and of a private individual.

The investigation report³ disclosed that, on August 11, 1992, the Office of the Directorate for Comptrollership (ODC) issued two (2) Advices of Sub-Allotment (ASAs), (001-500-138-92 SN 4361 and 001-500-139-92 SN 4362), each amounting to Five Million Pesos (₱5,000,000.00), purportedly for the purchase of CCIE for the North CAPCOM. The ASAs were approved "FOR THE CHIEF [Director General Cesar Nazareno (Nazareno)], PNP" by Director Guillermo Domondon (Domondon), Chief Director of ODC, and signed for him by Police Superintendent Van Luspo (Luspo), Chief, Fiscal Division, Budget and Fiscal Services of the ODC. The ASAs were issued without an approved personnel program from the Directorate for Personnel.⁴

Upon receipt of the ASAs, P/Supt. Arturo Montano (Montano), Chief Comptroller, North CAPCOM, directed Police Chief Inspector Salvador Duran, Sr. (Duran), Chief, Regional Finance Service Unit, North CAPCOM, to prepare and draw 100 checks of ₱100,000.00 each, for a total of ₱10,000,000.00.

The checks were all dated August 12, 1992 and payable respectively to DI-BEN Trading, MT Enterprises, J-MOS Enterprises, and Triple 888 Enterprises, each to receive 25 checks. All enterprises were owned and operated by Margarita Tugaoen (Tugaoen), who collected the proceeds of the checks from the United Coconut Planters Bank (UCPB), Cubao Branch, on August 12, 13, and 14, 1992. ⁵

In a sworn statement dated March 5, 1993 taken by Insp. Felicidad Ramos, a member of the investigating committee, Tugaoen admitted that she did not deliver any CCIE in exchange for the ₱10 million worth of checks, because the amount was allegedly intended as payment for the previously accumulated debts of the PNP.⁶

The nondelivery was confirmed by P/CInsp. Isaias Braga (Braga), Chief Logistics Officer, North CAPCOM, and Rolando Flores, Supply Accountable Officer, North CAPCOM. Both declared that, while they received CCIE in 1992, the same came from the PNP Logistics Command and not from Tugaoen, and that the value of the items they received was just ₱5,900,778.80 and had no relation at all to the ₱10 million CCIE purchase under investigation.⁷ Their statements were corroborated by P/Supt. Jesus Arceo, Chief of the Supply Center of PNP Logistics Command. ⁸

On the basis of the foregoing findings, the investigating team recommended that appropriate complaints be filed against Nazareno, Domondon, Montano, Tugaoen, and Pedro Sistoza (Director Sistoza), Regional Director, North CAPCOM. No reasonable ground was found to implicate Duran in the anomalous transaction, but he was still impleaded in the letter-complaint subsequently filed before the Office of the Deputy Ombudsman for the Armed Forces of the Philippines (OMB-AFP)⁹ (now OMB-Military and Other Law Enforcement Offices [MOLEO]) because he was a cosignatory to the 100 checks.

Although the investigative report did not mention Luspo’s criminal or administrative liability, the OMB-AFP included him in the charge since his signature appeared on the questioned ASAs.

Upon a finding that the abovementioned PNP officials and the private individual conspired to swiftly and surreptitiously execute the "ghost purchase" of the CCIE, the OMB-AFP recommended the filing of the criminal information for 100 counts of Malversation of Public Funds under Article 217 of the Revised Penal Code against them. The OMB-AFP further found that the ASAs were charged against the "Personal Services Fund" instead of the "Maintenance and Other Operating Expense Fund" without the approval of the Department of Budget and Management (DBM). They were released to the North CAPCOM without the corresponding requisition from the Directorate for Logistics of the North CAPCOM as normally observed.¹⁰

On January 26, 1994, the Office of the Special Prosecutor (OSP) approved the resolution of the OMB-AFP, with the modification that the proper offense to be charged was violation of Section 3(e) of R.A. No. 3019, as amended, for only one (1) count. The OSP also cleared Director Sistoza from any participation in the anomalous deal.¹¹ Thusly, the accusatory portion of the Information filed with the Sandiganbayan reads:

That in or about August 1992, and for sometime subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, the above-named public officers, namely: Cesar P. Nazareno, being then the Director General; Guillermo T. Domondon, Director for Comptrollership; Van D. Luspo, Chief, Fiscal Services and Budget Division; Arturo H. Montano, Chief Comptroller, North Capcom and Salvador C. Duran, Sr., Chief, Regional Finance Services Unit (RFSU), North Capcom, all of the Philippine National Police (PNP), while in the performance of their respective official and administrative functions as such, acting with evident bad faith and manifest partiality, conspiring, confederating and mutually helping one another, together with private accused Margarita B. Tugaoen, did then and there willfully, unlawfully and criminally cause undue injury to the government (PNP), by causing the preparation, issuance, release and payment, without supporting documents, of TEN MILLION PESOS (₱10,000,000.00) to DI-BEN TRADING, MT ENTERPRISES, J-MOS ENTERPRISES and TRIPLE 888 ENTERPRISES, all owned and operated by accused Margarita B. Tugaoen, purportedly for the purchase of combat, clothing and individual equipment (CCIE) for use of North Capcom personnel, to which no actual delivery of said CCIE items were ever effected by accused supplier Margarita B. Tugaoen, thereby giving unwarranted benefits to the latter accused, to the damage and prejudice of the Philippine government in the total amount of TEN MILLION (₱10,000,000.00) PESOS, Philippine Currency.

CONTRARY TO LAW.¹²

After numerous postponements caused by supervening procedural incidents, Nazareno, Domondon, Luspo, Montano, and Tugaoen were finally arraigned on October 12, 2001. They individually entered a "not guilty" plea.¹³ Duran refused to make any plea during his arraignment on October 26, 2001 hence, a "not guilty" plea was entered for him.¹⁴ During pre-trial, all accused agreed to the following stipulation of facts:

1. That except for accused Margarita Tugaoen, all the accused are public officers at the time stated in the Information;

2. That on August 11, 1992, the Office of the Directorate for Comptrollership of the PNP, issued two (2) Advices of Sub-Allotment (ASAs) in favor of the North CAPCOM in the amount of Five Million Pesos (₱5,000,000.00) each, making a total of TEN MILLION [PESOS] (₱10,000,000.00) for payment of Combat, Clothing, and Individual Equipment (CCIE) of PNP personnel.¹⁵

At the trial, the prosecution presented the following witnesses: 1) Evangeline Candia (Candia), Chief District Inspectorate of the Western Police District, and a member of the committee formed by the PNP to investigate the CCIE anomaly; 2) Felicidad Ramos, also a member of the PNP investigating committee and the one who took the sworn statement of Tugaoen during the investigation proceedings; 3) Romulo Tuscano, Supply Accountable Officer of the PNP; 4) Rafael Jayme, Acting Deputy Inspector General at the Office of the Inspector General of the PNP at the time material in the Information; 5) Emmanuel Barcena, executive employee of the Philippine Clearing House (PCH); 6) Atty. Ismael Andrew Pantua Isip, lawyer of UCPB; and 7) Ma. Cristina Sagritalo-Fortuna, Branch Operations Officer of UCPB, Cubao Branch.¹⁶

The foregoing witnesses’ testimonies, together with documentary pieces of evidence marked as Exhibits "A" to "H-4," sought to establish that Nazareno, Domondon, Luspo, Duran, and Montano acted with evident bad faith and manifest partiality when they failed to observe the logistic requirement of North CAPCOM prior to the preparation of the 2 ASAs; and that they violated GHQ-AFP Circular No. 8 issued on January 25, 1985 when they failed to make any budget proposal relative to the purchase of CCIE for North CAPCOM in 1992. GHQ-AFP Circular No. 8 mandates that the yearly funding requirement of combat clothing should be included in the budget proposals of the concerned unit. ¹⁷

The prosecution further endeavored to prove that the vouchers and related documents pertaining to the procurement of the ₱10 million worth of CCIE did not pass the office of Abelardo Madridejo, Chief Accountant, North CAPCOM.¹⁸ State Auditor Erlinda Cargo of the COA for PNP North CAPCOM also certified that, as of March 23, 1993, the direct payment voucher amounting to ₱10 million intended for the purchase of CCIE was not liquidated because the records thereof were not forwarded to the COA.¹⁹

To substantiate the allegation in the Information that the checks were delivered to Tugaoen and that she received their value, the prosecution submitted the sworn statements of Montano and Tugaoen, and the bank statement prepared by UCPB, Cubao Branch, relative to the account of Tugaoen, reflecting the transactions on August 12, 13, and 14, 1992.²⁰

In a sworn statement executed during the investigation conducted by PNP-GHQ, Montano declared that the checks relative to the ₱10-million ASAs were delivered to Tugaoen who, in turn, acknowledged receipt thereof in her own sworn statement executed before Candia during the investigations conducted by PNP.²¹ Tugaoen likewise admitted that she did not deliver CCIE in exchange for the value of the checks because they were intended to cover the previously accumulated debts of the PNP.²²

On December 16, 2004, the accused filed, upon leave of court,²³ a Consolidated Motion for Demurrer to Evidence,²⁴ arguing in the main the inadmissibility, under the best evidence rule, of the photocopies of the ASAs, the 100 checks, the original printout of the full master list and detail list of the checks from the PHC, and the bank statement prepared by the UCPB, respectively docketed as Exhibits A to A-1, C to C-27, C-28 to C-29c, H to H-4.

Claiming that the investigations conducted by the PNP were custodial in character and not merely administrative, the accused argued that the sworn statements of Tugaoen (Exhibits "D" to "D-5"), Duran (Exhibits "B" to "B-2"), and Montano (Exhibits "F-13" to "F-13-C") should not be admitted in evidence because they were not assisted by counsel when the same were elicited from them.

In its resolution dated May 13, 2005,²⁵ the Sandiganbayan denied the consolidated motion and ruled on the admissibility of the challenged exhibits in this wise:

There have been several instances where the courts have accorded due credence to the admissibility of microfilm copies or photostatic copies of microfilmed documents such as checks and other commercial documents relying on the factual justification that these checks were microfilmed in the ordinary course of business and there is an ample showing that they were accurate and [have] not been substantially altered. x x x.

Thus, if the witnesses presented attested to the fact that the checks are microfilmed in the ordinary course of business and that the photostats have attained acceptable degree of accuracy, the same are no doubt admissible in evidence in lieu of the original, not on the basis of the "best evidence" rule but because they may be considered as entries in the usual or regular course of business. This Court may also want to take judicial notice of the fact that one of the reliable means to preserve checks and other commercial papers and documents is by way of microfilm. x x x.

In his testimony, prosecution witness Emmanuel E. Barcena has sufficiently explained the procedure ordinarily adopted by the Philippine Clearing House when it receives checks from its various clients. According to him, once the Philippine Clearing House (PCH for brevity) receives the checks for processing and captures the same in a microfilm, it generates a report called the Master List and the Detail List. The data are then eventually stored in a tape and are submitted to Citron (a service provider) to enable the latter to transfer the contents of the tape to a microfiche which would then contain all the reports of the PCH. After the transfer of the contents of the tape from the tape or "disc" to microfiche, Citron returns the microfiche to PCH for archive and future purposes. In case of a request from the banks or from the courts for any data regarding past transactions involving checks received by PCH from its clients, the PCH will have a basis where to get the reproduction of the print-out.

Being a disinterested witness for the Prosecution, and there being no proof of any personal motive on his part to misrepresent the facts of the transactions, Barcena has made it clear, for the guidance and information of this Court, the process or procedure his company adopts or undertakes when it receives checks for clearing from different banks. As what he categorically stated, the microfilming of checks is just one of the regular or routinary functions being performed by PCH. Hence, the reproductions or copies of the preserved checks it issues, obtained from its existing records facility such as microfilms, may, therefore, be considered admissible in evidence.²⁶

The court sustained the admissibility of the sworn statements of Tugaoen, Duran, and Montano, explaining that the investigations performed by the PNP were administrative and not custodial in nature because the accused gave their statements only as witnesses and not as individuals implicated in an offense. This inference was further based on the observations that the investigating committee also took the sworn statements of several PNP personnel who were not included in the charge, and that Nazareno and Domondon, who were not among those investigated, were criminally charged.

Trial then resumed for the presentation of evidence for the defense.

None of the accused took the witness stand. The defense did not dispute the events that transpired, but they stressed that they did not commit any prohibited act. To debunk the case for the prosecution, Luspo and his co-accused Domondon presented Leonilo Lapus Dalut (Dalut), Program and Budget Officer of the Directorate for Personnel, PNP, from 1989 until 1993.

Testifying for Luspo and Domondon, Dalut declared that Domondon, as the then Director for Comptrollership, was authorized to sign ASAs for personal services fund – which include CCIE - irrespective of amount and without any prior request from the Directorate for Personnel. This was allegedly shown in the Delegation of Authority²⁷ and its corresponding Schedule of Delegation²⁸ issued by Nazareno on March 20, 1992, pertinent portions of which state:

SUBJECT: Delegation of Authority

TO: All Concerned

x x x x

(2) In order to free the Chief, Philippine National Police of routine decisions so that he can devote his time to more important functions and in order to prepare subordinate officers for greater responsibility so that police service will be delivered more efficiently and effectively, specific authorities of the Chief, PNP are hereby delegated to the Deputy Chief for Administration, Deputy Chief for Operations, The Chief of Directorial Staff, Directors of the Directorial Staff, Regional Directors and Directors of Support Units as per attached tabulation.

(3) Generally, the delegate will sign for the Chief, PNP but he may sign in his own name when appropriate, depending on the circumstances or nature of the communication. The name and signature of the delegate signing for C[/]PNP shall be preceded by "BY COMMAND OF DIRECTOR GENERAL NAZARENO" or "FOR THE CHIEF, PHILIPPINE NATIONAL POLICE," whichever is appropriate.

x x x x

POWER/FUNCTIONS	APPROVING AUTHORITY							REMARKS
COMPTROLLERSHIP AND FINANCE	C. PNP	DCA	DCO	TCDS	DIR STAFF	REG’L DIR	D. ADM OPN SPT UNITS
PNP Budget Proposal and Expenditures	X
Working papers for the PBAC						DC
C. Releases of allotment advices
1. Releases from Comd Reserve regardless of amount	X
2. Releases from Prog amount regardless of amount
a. CMI		X
b. Fixed Expenditures					DC			Upon request of Prog Dir
c. Program Director’s Fund					DC			Upon request of Prog Dir
3. Releases for personnel services (01) irrespective of amount					DC

Dalut explained that "DC" refers to the Directorate for Comptrollership, and that the phrase "Upon request of Prog Dir" means that the Directorate for Personnel requested the DC for the release of funds. But as clearly shown in the schedule of authority, request from the Directorate for Personnel is not a prerequisite to the release of funds for "personnel services 01," irrespective of amount. Dalut clarified that it was not the practice of anyone at the Office of the Director for Personnel to prepare a program chargeable against personnel services before the Director for Comptrollership could release ASAs for "personnel services 01."²⁹

Domondon and Luspo also adopted the December 15, 1998 Order of the OSP³⁰ and the OMB’s June 9, 1999 Memorandum,³¹ both submitted in Criminal Case No. 20185 pending before the Sandiganbayan. Criminal Case No. 20185 pertained to the charge of illegal issuance of ASAs in favor of PNP Regional Command (RECOM) in Baguio, wherein Domondon was one of the co-accused. In that Order, the OMB recommended that Domondon be dropped from the criminal charge upon the finding that there was no need for the DBM’s prior authority before the ODC could release funds for "personnel services 01." In the Memorandum dated June 9, 1999, approved by former Ombudsman Aniano Desierto, OMB’s legal counsel, Sylvia Hazel, made a finding that CCIE purchases could be charged against either Personal Services Fund or Maintenance and Other Operating Expense Fund.

For their part, Montano and Tugaoen reiterated the inadmissibility of the latter’s sworn statements on the ground that a lawyer did not assist her during the investigation proceedings. To buttress Montano and Tugaoen’s claim, P/Supt. Felicidad Ramos Guinto, a member of the team that investigated the North CAPCOM CCIE anomaly, was put on the witness stand. She declared that Tugaoen expressed her desire to be assisted by a counsel of her choice, however, there was no more time for her to retain one.³²

Montano tendered a copy of the provisions of Section 307, Article 5, Title 5, Book III, Volume I of the Government and Auditing Manual issued on January 2, 1992, to show that his acts were in accordance with the rules on expenditures as mandated in the manual.³³

Duran failed to formally offer evidence despite the opportunity given him by the Sandiganbayan. As such, he was declared to have waived his right to do so in an Order dated July 13, 2007.³⁴

The Ruling of the Sandiganbayan³⁵

The anti-graft court found sufficient evidence inculpating Luspo, Duran, Montano, and Tugaoen for conspiring and confederating with one another to deprive the government/PNP of ₱10 million, viz.:

Accused Luspo issued the two (2) ASAs (Exhibits "A," "A-1") without the authority from the Directorate for Comptrollership nor from the Chief PNP. These ASAs eventually became the basis in the drawing of the one hundred checks signed by accused Duran and Montano that effected the release of the funds intended for the purchase of CCIE items to accused Tugaoen. These series of acts spelled nothing but conspiracy which showed their common design in achieving their one common goal to the damage and prejudice of the government.³⁶

Adopting the observations of the Ombudsman (AFP), the Sandiganbayan elaborated:

The swiftness of how the supposed transaction of CCIE items at North CAPCOM was consummated at a record time of two (2) days from the issuance of the ASAs to the encashment of the checks which normally take weeks if not months (with all programming/requisition, the bidding process, series of deliveries, and inherent red tapes) only indicates signs of deep-rooted conspiracy, to wit: 1. issuance of ASA over and above the approved program of ₱6 M for CY 1992 and the charging of the same to funds for personal services (100-10) even without the approval of the DBM; 2. release of ASA to North CAPCOM even without the required programming or corresponding requisition/request therefrom; 3. splitting the supposed payments into 100 checks at ₱100,000.00 each to go around the rule that purchase order, vouchers and checks above ₱100,000.00 be signed by the Regional Director; and 4. the purported documents for the supposed purchases did not go to the usual process of passing to the Chief Accountant for recording/accounting, and the Regional Director for approval.³⁷

The Information was dismissed as to Nazareno in a resolution dated March 20, 2007 on account of his death on December 8, 2005. Be that as it may, the Sandiganbayan discussed his accountability and was found to be blameless. The court ruled that the prosecution failed to substantiate by testimonial or documentary evidence Nazareno’s direct or indirect participation in the anomalous CCIE transaction. There was likewise no showing that he had the opportunity to scrutinize the documents related to the release of the questioned ₱10 million, and that his issuance of the Delegation of Authority preceded the release of the questioned ASAs by a considerable length of time, so as to rule out any misgiving that the former was circulated in order to facilitate the irregular purchases. The Sandiganbayan added that Nazareno’s indictment was only due to command responsibility under the doctrine respondeat superior, which, however, does not exist between police officers and their subordinates.

Domondon was also exonerated because, by virtue of the Delegation of Authority and Schedule of Delegation issued by Nazareno, he (Domondon) was authorized to charge CCIE to "personnel services 01" and to release funds therefor, irrespective of amount, without a request program from the Directorate of Personnel. Thus, he could no longer be faulted if the checks were eventually released to Tugaoen without the required supporting documents nor could he be held liable for the nondelivery of the CCIE. The Sandiganbayan took judicial notice of its September 17, 1999 resolution in Criminal Case No. 20185, dropping Domondon from the criminal information upon the finding that both the OSP’s December 15, 1998 Order and the OMB’s memorandum of June 9, 1999 negated Domondon’s culpability for the crime charged.

Accordingly, the fallo of the January 19, 2009 decision of the Sandiganbayan reads :

WHEREFORE, in the light of all the foregoing, the Court finds accused VAN D. LUSPO, ARTURO H. MONTANO, SALVADOR C. DURAN, SR. and MARGARITA D. TUGAOEN, GUILTY beyond reasonable doubt of the offense of Violation of Section 3(e) of Republic Act No. 3019, and after applying the Indeterminate Sentence Law, there being no aggravating or mitigating circumstances, hereby sentences each of them to suffer the penalty of imprisonment ranging from six (6) years and one (1) month as minimum to ten (10) years as maximum, and to indemnify the Philippine National Police or the government jointly or severally in the amount of Ten Million Pesos (Php 10 Million).

Accused Luspo, Montano and Duran, Sr., being public officers, are henceforth perpetually disqualified from holding public office.

The guilt of accused, GUILLERMO T. DOMONDON, not having been proven beyond reasonable doubt, he is hereby ACQUITTED of the same charge. (The case against accused, Cesar P. Nazareno, has earlier been dismissed in a Resolution dated March 20, 2007 due to his death). Accordingly, let the bond of accused Domondon posted for his provisional liberty be released to him, subject to the usual accounting and auditing procedures of this Court.

The Hold Departure Order dated October 28, 2004, issued against accused Domondon is hereby lifted and set aside.

SO ORDERED.³⁸

Luspo,³⁹ Duran,⁴⁰ Montano and Tugaoen⁴¹ separately moved for reconsideration, but their motions were denied in a consolidated Resolution dated June 30, 2009.⁴²

On July 14, 2009 Luspo filed a petition for certiorari docketed as G.R. No. 118487. Montano, Tugaoen and Duran followed suit on July 21, 2009. Montano and Tugaoen’s joint petition for certiorari was docketed as G.R. No. 188541, while Duran’s petition was docketed as G.R. No. 188556. In our Resolution of August 19, 2009⁴³ the three petitions were consolidated, assailing as they do similar Sandiganbayan Decision and Resolution.

The Issues

In G.R. No. 188487, Luspo ascribes the following errors to the Sandiganbayan:

THE SANDIGANBAYAN’S FINDING THAT THE PETITIONER WAS GUILTY BEYOND REASONABLE DOUBT OF THE OFFENSE OF VIOLATION OF SECTION 3(e) OF REPUBLIC ACT NO. 3019 WAS NOT SUPPORTED BY EVIDENCE ON RECORD.

THE PROSECUTION HAS NOT PRESENTED EVIDENCE WHICH COULD OVERCOME THE PETITIONER’S PRESUMPTION OF INNOCENCE.

THE SANDIGANBAYAN ERRED IN DENYING PETITIONER’S MOTION FOR RECONSIDERATION OF ITS JANUARY 19, 2009 DECISION.⁴⁴

In G.R. No. 188541, Montano and Tugaoen raise the following grounds for their exoneration:

THE SANDIGANBAYAN GRAVELY ERRED AND GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT THE PETITIONERS ARE DUTY-BOUND TO PROVE THAT THERE WERE DELIVERIES OF CCIE DESPITE THE PROSECUTION’S ALLEGATION IN THE INFORMATION THAT THERE WAS NO DELIVERY OF CCIE ITEMS, AND IN HOLDING THAT IT IS THE PETITIONERS’ DUTY TO PROVE THAT THERE WERE DELIVERIES; AND IN SHIFTING ITS BURDEN OF PROVING THE ELEMENTS OF THE CRIME AS ALLEGED IN THE INFORMATION, AND IN HOLDING THAT ACCUSED WILLFULLY SUPPRESSED THEIR TESTIMONIES BECAUSE THOSE ARE ADVERSE TO THEM BY THEIR FAILURE TO TAKE THE WITNESS STAND;

THE SANDIGANBAYAN GRAVELY ERRED IN BASING ITS FINDING OF EXISTENCE OF CONSPIRACY AND ITS JUDGMENT OF CONVICTION ON THE BASIS OF SURMISES AND CONJECTURES BY ADOPTING AND RELYING UPON THE FINDINGS OF THE OMBUDSMAN DURING PRELIMINARY INVESTIGATIONS, IN UTTER DISREGARD OF THE CONSTITUTIONAL MANDATE THAT EVERY DECISION OF A COURT SHALL STATE EXPRESSLY AND DISTINCTLY, THE FACTS AND THE LAW UPON WHICH IT IS BASED;

THE SANDIGANBAYAN GRAVELY ERRED IN HOLDING THAT THE INVESTIGATIONS CONDUCTED ON PETITIONERS ARE NOT CUSTODIAL INVESTIGATION AND IN NOT HOLDING THAT THE SWORN STATEMENTS TAKEN BY THE INVESTIGATING OFFICERS DURING INVESTIGATIONS ARE INADMISSIBLE IN EVIDENCE FOR BEING VIOLATIVE OF THE CONSTITUTIONAL RIGHTS OF PETITIONERS, PARTICULARLY THEIR RIGHT TO COUNSEL;

THE SANDIGANBAYAN GRAVELY ERRED AND GRAVELY ABUSED ITS DISCRETION IN ADMITTING IN EVIDENCE AND IN GIVING THE MERE XEROX COPIES OF THE CHECKS WHICH WERE MERELY CONDITIONALLY MARKED, PROVATIVE (SIC) VALUE, AND DESPITE PROSECUTION’S FAILURE TO COMPLY WITH ITS COMMITMENT TO SUBMIT OR PHYSICALLY PRODUCE THE ORIGINALS THEREOF;

THE SANDIGANBAYAN GRAVELY ERRED AND GRAVELY ABUSED ITS DISCRETION IN NOT ACQUITTING THE ACCUSED AND IN BASING THE JUDGMENT OF CONVICTION ON INSUFFICIENT EVIDENCE OR ON MERE PRIMA FACIE EVIDENCE, WHEN WHAT IS MANDATORILY REQUIRED IS EVIDENCE THAT ESTABLISHES THE GUILT OF THE ACCUSED BEYOND REASONABLE DOUBT;

THE SANDIGANBAYAN GRAVELY ERRED AND GRAVELY ABUSED ITS DISCRETION IN ORDERING PETITIONERS JOINTLY AND SEVERALLY LIABLE WITH LUSPO AND DURAN TO INDEMNIFY THE PHILIPPINE NATIONAL POLICE OR THE GOVERNMENT, IN THE SUM OF ₱10,000,000.00, DESPITE ABSENCE OF ANY FINDING WHO ACTUALLY APPROPRIATED THE ENTIRE SUM OR ANY PART OF SAID AMOUNT.⁴⁵

In G.R. No. 188556, Duran faults the Sandiganbayan in this manner:

THE SANDIGANBAYAN GRAVELY ERRED IN RULING THAT PETITIONER WAS IN CONSPIRACY WITH HIS CO-ACCUSED.

THE SANDIGANBAYAN GRAVELY ERRED IN RULING THAT PETITIONER WAS NOT MERELY PERFORMING A MINISTERIAL FUNCTION AND AS SUCH INCURS NO CRIMINAL LIABILITY FOR SUCH MINISTERIAL ACT.

THE SANDIGANBAYAN GRAVELY ERRED IN NOT ADHERING TO THE FINDINGS OF THE PNP INVESTIGATING COMMITTEE, WHICH FOUND NO PROBABALE CAUSE AGAINST PETITIONER.

THE SANDIGANBAYAN GRAVELY ERRED IN FINDING PETITIONER GUILTY BEYOND REASONABLE DOUBT OF VIOLATING R.A. NO. 3019, AS AMENDED, OTHERWISE KNOWN AS THE ANTI-GRAFT AND CORRUPT PRACTICES ACT.⁴⁶

The Ruling of the Court

Petitioners were found by the Sandiganbayan to have violated Section 3(e) of R.A. No. 3019, which provides, as follows:

Section 3. Corrupt practices of public officers. – In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

x x x x

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith, or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

In Cabrera v. Sandiganbayan,⁴⁷ we explained that there are two ways for a public official to violate this provision in the performance of his functions, namely: (a) by causing undue injury to any party, including the government; or (b) by giving any private party any unwarranted benefits, advantage, or preference. In that case, we enumerated the essential elements of the offense, viz.:

1. The accused must be a public officer discharging administrative, judicial, or official functions;

2. He must have acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and

3. His action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage, or preference in the discharge of his functions.

There is no dispute that herein petitioners, except for Tugaoen, are all public officers at the time stated in the Information. On the other hand, the indictment against Tugaoen, a private individual, is sanctioned by Section 1 of R.A. No. 3019, thus:

Section 1. Statement of policy. – It is the policy of the Philippine Government, in line with the principle that a public office is a public trust, to repress certain acts of public officers and private persons alike which constitute graft or corrupt practices or which may lead thereto.

The second element provides the different modes by which the crime may be committed, which are "manifest partiality," "evident bad faith," or "gross inexcusable negligence."⁴⁸ Manifest partiality and evident bad faith connote that the crime is committed by dolo, while gross inexcusable negligence indicates its commission through culpa.⁴⁹ In the recent Albert v. Sandiganbayan,⁵⁰ we reiterated the definitions of such modalities, viz.:

There is "manifest partiality" when there is a clear, notorious, or plain inclination or predilection to favor one side or person rather than another. "Evident bad faith" connotes not only bad judgment but also palpably and patently fraudulent and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive or ill will. "Evident bad faith" contemplates a state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes. "Gross inexcusable negligence" refers to negligence characterized by the want of even the slightest care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with conscious indifference to consequences insofar as other persons may be affected.⁵¹

Evident bad faith and manifest partiality are imputed to Luspo, Duran, and Montano when they caused the preparation, issuance, release, and payment of ₱10,000,000.00, without supporting documents, to DI-BEN Trading, MT Enterprises, J-MOS Enterprises, and Triple 888 Enterprises, all owned and operated by Tugaoen.

Owing to the different functions discharged by petitioners, it is imperative to discuss their individual participation in the scheme that siphoned ₱10 million from the PNP funds.

Luspo, the then Chief of the Fiscal Services and Budget Division of the ODC, is indicted for having allegedly issued the ASAs without prior authority from his superior, Domondon, Chief Directorate for Comptrollership. His issuance and signing thereof were allegedly made without a prior program request from the Office of the Directorate for Personnel as mandated by the logistic requirements of the PNP. Likewise, he supposedly violated GHQ-AFP Circular No. 8 issued on January 25, 1985 when he failed to make any budget proposal relative to the purchase of CCIE for North CAPCOM in 1992. He also allegedly charged the amount of the ASAs to "Personal Services Fund" without a realignment authority from the DBM. These, according to the prosecution, are badges of evident bad faith and of manifest partiality towards Tugaoen that led to a ₱10 million injury to the coffers of the PNP.

It bears emphasis that the charge against Luspo’s co-accused Domondon consisted of the same omissions. Both offered similar documentary and testimonial pieces of evidence for their exoneration, but the same were appreciated only in Domondon’s favor. The Sandiganbayan shelved Luspo’s claim that he was authorized by Domondon to sign the ASAs in the former’s behalf, and tagged the same as self-serving and unsubstantiated.

In its consolidated comment, respondent People of the Philippines, represented by the OMB through the OSP, harks back to the Sandiganbayan’s conclusion and lobbies for its affirmation.

We disagree with the Sandiganbayan.

A perusal of the records at our and the Sandiganbayan’s wherewithal reveals the contrary and had the trial court expanded the range of its probing, it would not have arrived at divergent conclusions regarding the two accused.

Generally, factual findings of the anti-graft court are conclusive upon the Supreme Court, except where: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts and the findings of fact of the Sandiganbayan are premised on the absence of evidence and are contradicted by evidence on record.⁵²

The last instance attends in the instant case. Clear and unmistakable in the August 30, 1993 resolution of the OMB-AFP⁵³ is the crucial detail that, on January 31, 1991, Domondon issued a Memorandum delegating to Luspo and a certain Supt. Reynold Osia (Osia) the authority to sign for him (Domondon) and on his behalf, allotments for personal services in the amount not exceeding Five Million Pesos (₱5,000,000.00), and in his absence, the amount of ₱20,000,000.00. This was, in fact, the hammer that drove the nail and linked Domondon to the conspiracy theory advanced by the prosecution.

As previously mentioned, the Sandiganbayan absolved Domondon of any liability in the issuance of the ASAs by virtue of the Delegation of Authority and Schedule of Delegation issued by Nazareno, authorizing him (Domondon) to charge CCIE to "personnel services 01," and to release funds therefor, irrespective of amount, without need for a prior request program from the Directorate of Personnel. The Sandiganbayan also took judicial notice of the OMB Order dated December 15, 1998 and Memorandum dated June 9, 1999 of the OMB’s legal counsel in Criminal Case No. 20191, stating that Domondon committed no prohibited act in authorizing the issuance of the ASAs for RECOM since GHQ-AFP Circular No. 8 allowed the charging of CCIE to either the Personal Services Fund or Maintenance and Other Operating Expense Fund.

The Sandiganbayan ruled that these pieces of evidence debunked the prosecution’s allegation that the ASAs were charged against Personal Services Fund without the necessary realignment authority from the DBM. As such, the court negated Domondon’s culpability for the crime charged. We see no reason to treat Luspo differently because the authority delegated by Nazareno to Domondon inevitably passed down to the latter’s sub-delegate, Luspo.

The ensuing disquisitions should enlighten.

In general, national government agencies (NGAs), such as the PNP, receive their yearly budgetary allocation from the DBM through an Advice of Allotment.⁵⁴ The amount represented therein is, in turn, distributed/sub-allocated by NGAs to their support units or departments through the issuance of an ASA (also known as Sub-Allotment Advice). In the PNP, the power to sub-allocate the agency’s funds is vested by R.A. 6975 in the PNP Chief, viz.:

Sec. 26. Powers, Functions and Term of Office of the PNP Chief. — The command and direction of the PNP shall be vested in the Chief of the PNP who shall have the power to direct and control tactical as well as strategic movements, deployment, placement, utilization of the PNP or any of its units and personnel, including its equipment, facilities and other resources.⁵⁵ (Emphasis supplied.)

The law also empowers the PNP Chief to delegate his myriad duties and authority to his subordinates, with respect to the units under their respective commands:

Such command and direction of the Chief of the PNP may be delegated to subordinate officials with respect to the units under their respective commands, in accordance with the rules and regulation prescribed by the Commission.⁵⁶

This was observed through the organizational structure of the PNP. Administrative and operational support units were put in place to assist the PNP Chief in the command and direction of the police force. One such unit is the ODC, which assists the PNP Chief with the management of the financial resources of the PNP. Among the specific functions of this office are:⁵⁷

1. To coordinate with the Directorial Staff of the National Headquarters (NHQ)-PNP for the supervision and preparation of different PNP projects and programs and for the integration of such projects and programs to the overall PNP program; and

2. To supervise and manage the preparation of the PNP budget estimates based on data submitted by Program Directors and to justify the same before reviewing authorities.

Under the ODC’s wing is the Fiscal Services and Budget Division, charged with the implementation of the plans, policies, rules, and regulations governing disbursement and collection of funds for the PNP.⁵⁸

In sum, the Office of the Directorate for Comptrollership assists the PNP Chief in determining how the PNP funds will be sub-allocated to the regional commands and their support units. Any determination made would then be executed by the Fiscal Services and Budget Division by issuing an ASA with Nazareno’s signature as the chief financial director of the PNP, in favor of the appropriate command or support unit.

Section 26 of R.A. No. 6975 also empowers the PNP Chief to issue implementing policies for the micromanagement of the entire force, viz.:

The Chief of the PNP shall also have the power to issue detailed implementing policies and instructions regarding personnel, funds, properties, records, correspondence and such other matters as may be necessary to effectively carry out the functions, powers and duties of the Bureau. The Chief of the PNP shall be appointed by the President from among the senior officers down to the rank of chief superintendent, subject to confirmation by the Commission on Appointments: Provided, That the Chief of the PNP shall serve a term of office not to exceed four (4) years: Provided, further, That in times of war or other national emergency declared by Congress, the President may extend such term of office. (Emphasis supplied.)

In the exercise of such power, Nazareno issued a letter-directive on March 20, 1992, entitled "Delegation of Authority," wherein he delegated to his subordinate officers several of his customary authority, ranging from the approval or disapproval of projects to the signing of correspondence and working papers in his behalf.

Attached thereto is a tabulation of the delegatee-directors and the tasks entrusted to them. Pertinent to this controversy are pages 12 to 23 of the tabulation, showing, among others:

POWER/FUNCTIONS	APPROVING AUTHORITY							REMARKS
COMPTROLLERSHIP AND FINANCE	C. PNP	DCA	DCO	TCDS	DIR STAFF	REG’L DIR	D. ADM OPN SPT UNITS
PNP Budget Proposal and Expenditures	X
Working papers for the PBAC						DC
C. Releases of allotment advices
1. Releases from Comd Reserve regardless of amount	X
2. Releases from Prog regardless of amount
a. CMI		X
b. Fixed Expenditures					DC			Upon request of Prog Dir
c. Program Director’s Fund					DC			Upon request of Prog Dir
3. Releases for personnel services (01) irrespective of amount					DC

As testified to by defense witness Dalut, "DC" referred to Director for Comptrollership, who, at that time, was Domondon.

Domondon thereafter sub-delegated such authority to his subordinates Luspo and Osia, through a memorandum dated January 31, 1991. Relying on the memorandum, Luspo signed ASA Nos. 001-500-138-92 SN 4361 and 001-500-139-92 SN 4362 on August 11, 1992, releasing ₱10 million from the Personal Services Fund in favor of North CAPCOM for the purchase of CCIE.

The OSP questions the validity of the sub-delegation, arguing that Domondon cannot further delegate an already delegated task. The contention is untenable.

We reckon the kind of duties discharged by public officers.

Public officers exercise discretionary and/or ministerial duties. A duty is discretionary if the officer is allowed to determine how and when it is to be performed and to decide this matter one way or the other and be right either way.⁵⁹ It is not susceptible to delegation because it is imposed by law as such, and the public officer is expected to discharge it directly and not through the intervening mind of another.⁶⁰

On the other hand, a ministerial duty is one that requires neither the exercise of official discretion nor judgment.⁶¹ It connotes an act wherein nothing is left to the discretion of the person executing it.⁶² It is practically a mechanical act;⁶³ hence, what can be done by the delegate may be sub-delegated by him to others.⁶⁴

Based on the foregoing yardstick, was the task delegated by Nazareno to Domondon discretionary or ministerial?

A reading of the significant provisions of the "Delegation of Authority" discloses that the duty delegated to Domondon was merely ministerial.

2. In order to free the Chief, Philippine National Police of routine decisions so that he can devote his time to more important functions and in order to prepare subordinate officers for greater responsibility so that police service will be delivered more efficiently and effectively, specific authorities of the Chief, PNP are hereby delegated to the Deputy Chief for Administration, Deputy Chief for Operations, The Chief of Directorial Staff, Directors of the Directorial Staff, Regional Directors and Directors of Support Units as per attached tabulation.

3. Generally, the delegate will sign for the Chief, PNP but he may sign in his own name when appropriate, depending on the circumstances or nature of the communication. The name and signature of the delegate signing for C. PNP shall be preceded by "BY COMMAND OF DIRECTOR GENERAL NAZARENO" or "FOR THE CHIEF, PHILIPPINE NATIONAL POLICE", whichever is appropriate.

7. For the purpose of this Letter-Directive, the term authority shall be understood to mean authority to sign for the C. PNP; the power to require and receive submission; the right to approve or disapprove; the right to give final decisions; and the right to direct and to expect compliance. The authorities conferred/delegated in this Letter-Directive are those of the C. PNP, and therefore authorities inherent to the function of the delegatee are not covered by this publication. x x x

8. Decision/final actions on matters within the normal or inherent functions/authority of the Directorial Staff, Service Staff, PNP Administrative and Operational Support Units and Regional Directors shall be done at their respective levels. In this connection, the Directors of the Directorial Staff are reminded that they are inherently vested with authority to determine the actions to be taken by the Command in their specific fields of interest or responsibility.⁶⁵

Based on these provisions of Nazareno’s letter-directive, the phrase "release funds for personnel services 01" should be construed to mean that the duty delegated to Domondon was merely to sign ASAs in behalf of Nazareno to effect the release of funds.

Nazareno could not have referred to the actual authority of directing when and to whom the funds would be released because the same was already inherent in Domondon’s functions as the former’s aide in administering the funds of the PNP.

As mentioned earlier, Domondon, as the Chief Director of the Office of the Directorate for Comptrollership, assists the PNP Chief in determining how the PNP funds would be sub-allocated to the regional commands and their support units. Any determination made by Domondon and Nazareno would then be implemented by Luspo, as the head of Fiscal Services and Budget Division, by preparing an ASA and then submitting the same to Nazareno for his signature. To shorten the process, Nazareno delegated the routine act of affixing his signature to the ASA to his financial assistant, Domondon.

Verily then, the duty delegated by Nazareno to Domondon was the ministerial duty of signing ASAs to effect the release of funds. Being merely ministerial, Domondon was allowed to sub-delegate, as he did sub-delegate, the task to his subordinate, Luspo. As such, the signature affixed by Luspo to the ASAs had the same effect as if it was made by Nazareno himself.

Therefore, Luspo, in the same manner as Domondon, had satisfactorily adduced evidence of good faith to overturn and repudiate the imputation of evident bad faith against him. He committed no prohibited act in signing and issuing the assailed ASAs because there is ample documentary and testimonial evidence showing that:

(1) Luspo was duly authorized by Domondon to release personal services funds by signing ASAs in the latter’s behalf. Luspo’s signature in the ASAs is attributable to Domondon who, in turn, was authorized by Nazareno to release funds for personnel services through the issuance of an ASA.

(2) Contrary to the prosecution’s contention, the issuance of ASAs by the ODC in favor of PNP regional commands did not have to be preceded by a program request from the Office of the Directorate for Personnel as shown in the Delegation of Authority and its Schedule of Delegation issued by Nazareno on March 20, 1992; and

(3) There is no need for the DBM’s prior authority before the ODC can release funds for "personnel services 01," under which CCIE are categorized, as shown by GHQ Circular No. 8 dated October 24, 1985, issued by the then Acting Chief of the PNP, Fidel V. Ramos (Ramos). The circular was the basis of the OMB in recommending the dismissal of Criminal Case No. 20185 with respect to Domondon. The accusations in Criminal Case No. 20185 against Domondon read: "accused Domondon, in conspiracy with his co-accused, without prior authority from the Department of Budget and Management (DBM), released or caused to be released sums of money for the purchase of Combat Clothing and Individual Equipment." The Sandiganbayan adopted the OMB’s recommendation and dropped Domondon as an accused in both cases, and took judicial notice of such ruling when it absolved Domondon from the charges in Criminal Case No. 20192, subject of the instant petition.

In addition, the Government Accounting and Auditing Manual⁶⁶ classifies combat clothing under the category of "personal services fund."

The prosecution alleged that Luspo failed to observe the logistic requirements of North CAPCOM in 1992 when he signed and issued the ASAs. To buttress this claim, Exhibits "F-15" to "F-16-E" were submitted.

Exhibit "F-15" is an undated "Logistics Assessment," while Exhibit "F-16" is a 6-page more detailed version dated January 4, 1993. Both were prepared for the North CAPCOM by Braga, then Assistant Regional

Director, North CAPCOM. The assessment indicated that, in 1992, North CAPCOM received from PNP-GHQ, ₱2,067,123.00 in terms of Allotment Advices, and ₱32,986,523.07 in terms of supplies and equipment. In particular, the acquired CCIE amounted to ₱5,900,778.80. We do not see the relevance of these exhibits to the purpose for which they were offered.

The logistical assessment prepared by Braga is a year-end review of the financial and material allotments received by the command. It is not an internal issuance or circular in the PNP that carries the obligatory force of duty. It is a mere report on the logistical conditions of North CAPCOM. Evident bad faith connotes more than a mere violation of a report.

The prosecution further averred that the issuance and signing of the ASAs had no budgetary basis and justification, because the purchase of CCIE was not included in North CAPCOM’s budget proposal for 1992. GHQ-AFP Circular No. 8, issued on January 25, 1985, directs that the yearly funding requirement for combat clothing should be included in budget proposals.

GHQ-AFP Circular No. 8 was issued by Ramos on January 25, 1985 upon the order of the Minister of Defense. When the PNP was created in 1991, it was intended to be "civilian in character" and free from any military influence. Verily, the 1985 issuance of an AFP-Chief would no longer have any binding effect on the officials of PNP.

The finding of the Sandiganbayan that the ASAs were issued over and above the approved ₱6,000,000.00 CCIE budget for calendar year 1992 was not supported by evidence on record. The prosecution did not present any document showing the PNP or the North CAPCOM’s budgetary program for 1992.

To repeat, bad faith does not simply connote bad moral judgment or negligence. It is a manifest deliberate intent on the part of an accused to do wrong or to cause damage.⁶⁷ There is nothing on record to show that Luspo was spurred by any corrupt motive or that he received any material benefit when he signed the ASAs.

There is likewise no proof that Luspo acted with palpable bias or favor towards Tugaoen. The prosecution failed to show that it was Luspo’s duty to search for, negotiate and contract with suppliers. The only deduction extant from the prosecution’s evidence is that, being then the Chief of the Fiscal Services and Budget Division of the Office of the Directorate for Comptrollership, it was Luspo’s duty to distribute the funds allocated to the PNP by the DBM by the issuance of an ASA in favor of the force’s regional commands. Once the funds were released from his custody through the ASAs, his responsibility ceased and it then devolved upon the recipients of the ASA to see to it that the funds were legally and properly disbursed for the purpose for which they were released. He had no control over the disbursement, and thus, he could not be blamed if the funds were eventually expended for unauthorized or illegal purposes.

Lastly, the prosecution cannot link Luspo as a conspirator to defraud the PNP/government on the strength merely of his signature, nor can a valid assumption be made that he connived with Duran and Montano, who subsequently disbursed the ASAs.

Proof, not mere conjectures or assumptions, should be proferred to indicate that the accused had taken part in, x x x the "planning, preparation and perpetration of the alleged conspiracy to defraud the government" for, otherwise, any "careless use of the conspiracy theory (can) sweep into jail even innocent persons who may have (only) been made unwitting tools by the criminal minds" really responsible for that irregularity.⁶⁸

Again, Luspo committed no prohibited act; neither did he violate any law, rule, or internal order when he signed the ASAs. Logically, his signature in the ASAs cannot be considered as an overt act in furtherance of one common design to defraud the government.

Given the above premises, the acquittal of Luspo is inevitable.

Unfortunately, the immediately preceding disquisition does not apply to Duran, Montano, and Tugaoen.

After receiving the ASAs, Montano instructed Duran to prepare and draw 100 checks for ₱100,000.00 each for four (4) payees, DI-BEN Trading, MT Enterprises, J-MOS Enterprises, and Triple 888 Enterprises, the supposed suppliers of the CCIE. The checks were all dated August 12, 1992 and signed by both Montano and Duran. Montano thereafter released them to Tugaoen, the owner of the four enterprises, without the required liquidating and supporting documents mandated by Section 4(6) of Presidential Decree (P.D.) No. 1445, which provides that claims against government funds shall be supported by complete documentation. In the succeeding days, Tugaoen encashed the checks with UCPB, without delivering in exchange a single piece of CCIE for the uniformed personnel of North CAPCOM.

The Sandiganbayan found indications of bad faith and manifest partiality in Montano’s and Duran’s actions. We agree.

The essential element of bad faith is evident in Montano’s and Duran’s failure to prepare and submit the required documentation ordinarily attendant to procurement transactions and government expenditures, as mandated by Section 4(6) of P.D. No. 1445, which states that claims against government funds shall be supported by complete documentation.

Among these requirements are: certification of availability of funds from the command’s chief accountant;⁶⁹ papers relating to public bidding, like the advertisement for bids and certification of the result of the bidding;⁷⁰ purchase orders; delivery receipts; certificate of availability of fund signed by the chief accountant and verified by the auditor; and disbursement and requisition vouchers.⁷¹ Their absence in the disbursement of ₱10 million is supported by evidence on record.

Abelardo F. Madridejo, Chief Accountant of North CAPCOM, in a Certification dated March 23, 1993, attested that "the vouchers and allied documents pertaining to the procurement of Combat, Clothing and Individual Equipment in the amount of ₱10,000,000.00 did not pass [his] office for appropriate action."⁷²

The PNP Chief Directorate for Material Services, P/Supt. Jesus Arceo, likewise declared that no document was submitted to the PNP Logistics Services relative to the procurement of ₱10 million worth of CCIE for North CAPCOM.⁷³

These statements were corroborated by State Auditor Erlinda Cargo of COA-PNP North CAPCOM when she stated that, as of March 23, 1993, no records pertaining to the purchase of ₱10 million CCIE were forwarded to the COA.⁷⁴1avvphi1

More significantly, the February 11, 1993 sworn statement of Braga declared that North CAPCOM did not officially receive the ₱10,000,000.00 ASAs issued by the ODC, supposedly intended for the purchase of CCIE. As affirmed by Braga, North CAPCOM received CCIE allocations worth only ₱5,900,778.80 in 1992, and the same were received in kind and not in the form of ASAs. ⁷⁵

Duran avers that his signing of the checks was a mere ministerial act in compliance with Montano’s directives and upon reliance on the latter’s assurance that their issuance was supported by appropriate documents.

The contention has no merit. The 100 checks were made payable to only 4 enterprises at 25 checks each. This should have sounded alarm bells in the mind of any reasonably judicious accountable officer, such as Duran, to inquire into the veracity of the transaction concerned. But he did not even bother to demand that the "alleged" supporting documents be forwarded to him, in conformity with disbursement rules, to verify the legality or propriety of the claim.

Under Section 106 of P.D. No. 1445, an accountable officer who acts under the direction of a superior officer in paying out or disposing of funds is not exempt from liability unless he notified the superior officer in writing of the illegality of the payment or disposition. Duran made no such notification. Instead, he disregarded all disbursement, auditing, and accounting policies, effectively facilitating the illegal transaction. He did not require the submission of a procurement contract, a certificate of requisition, or vouchers before drawing and signing the checks. He merely mechanically affixed his signature when he was supposed to act with discernment. As the Chief of the Regional Finance Service Unit of the North CAPCOM, he was an accountable officer and had control and supervision over the funds of the command against which the checks were drawn.

To support his claim of good faith, Montano tendered a copy of the provisions of Section 307, Article 5, Title 5, Book III, Volume I, of the Government and Auditing Manual issued on January 2, 1992, to show that he complied with the Rules on expenditures mandated in the manual. The Rule actually compounds his guilt. We quote the text in full:

Sec. 307. Combat clothing of military personnel and members of para-military forces assigned or detailed with combat units. - The issuance of combat clothing to personnel assigned to combat units shall be guided by the following:

a. Military personnel assigned in combat units are issued authorized combat clothing in kind (GHQ Cir. 3, Feb. 17, 1988).

b. To be entitled to initial combat clothing and subsequent annual combat clothing, military personnel and members of para-military forces must have completed at least six (6) consecutive months tour of duty with a unit engaged in actual combat operations. This additional clothing shall not be granted more often than once every twelve (12) months. The individual clothing record of the military personnel shall be the basis to determine whether the individual was issued this combat clothing or not.

c. The unit commander shall attach a certification to the requisition and issue voucher (RIV), stating therein that the military personnel and members of his unit were actually engaged in combat operations for not less than forty five (45) days within the six (6)-month period for which combat clothing is claimed and have not received said clothing items during the period covered.

To evade culpability, Montano should have presented a "requisition and issue voucher" to justify his disbursement of ₱10,000,000.00 for the supposed purchase of CCIE. But this he did not do. He only advanced denials and roundabout alibis to surmount the concrete evidence of the prosecution.

Indeed, there is ample evidence proving beyond reasonable doubt that Duran and Montano were propelled by evident bad faith in preparing and issuing 100 checks to facilitate a fictitious and fraudulent transaction and Tugaoen, in accepting the checks and receiving their value without giving in exchange a single piece of CCIE.

Duran’s and Montano’s palpable bias in favor of Tugaoen is shown by their failure to support and justify the checks issued to Tugaoen’s enterprises with the obligatory paper trail relative to the conduct of public bidding or any procurement contract.

As aptly discerned by the Sandiganbayan, the acts of Duran, Montano and Tugaoen evince a bold and unabashed conspiracy scheme to defraud the government of ₱10 million:

[T]he drawing of one hundred checks in the amount of one hundred thousand pesos each by [petitioners] Duran and Montano, on that same day of August 12, 1992, eloquently bespeaks of splitting of payments, too glaring to be ignored. These one hundred checks could have been consolidated into four (4) checks only considering that there were only four (4) business establishments with which they claim to have transacted with.⁷⁶

As defined in COA Circular No. 76-41 dated July 30, 1976, splitting, in its literal sense, means dividing or breaking up into separate parts or portions, or an act resulting in fissure, rupture, or breach. Within the sphere of government procurement, splitting is associated with requisitions, purchase orders, deliveries, and payments. One form of splitting is the breaking up of payments which consist in making two or more payments for one or more items involving one purchase order. Splitting is intended to do away with and circumvent control measure, such as the reviewing authority of a superior official. In this case, the ASA of ₱10,000,000.00 was split by Duran and Montano into 100 checks of ₱100,000.00 each to elude the reviewing authority of Director Sistoza.

The last essential element of the offense, damage or injury to the government, is amply substantiated by the certification executed by Romulo Tuscano of the PNP Logistic Support Service, indicating that there is no available record regarding the delivery of ₱10 million worth of CCIE for North CAPCOM in 1992.⁷⁷

In fact, Tugaoen herself admitted that she did not deliver any CCIE in exchange for her receipt of ₱10 million. The admissibility of such statement was exhaustively discussed by the Sandiganbayan in its May 13, 2005 resolution, and we adopt its findings therein.

At any rate, even if we were to hold that the investigation conducted by the PNP was custodial in nature, the improprieties that Tugaoen bewail would not prevail against strong and overwhelming evidence showing her and her co-conspirators’ guilt. Allegations of impropriety committed during custodial investigation are material only when an extrajudicial admission or confession is the basis of conviction.⁷⁸ In the present case, the conviction of Montano, Duran, and Tugaoen was not deduced solely from Tugaoen’s admission, but from the confluence of evidence showing their guilt beyond reasonable doubt.lavvphil

In the same vein, the issue on the admissibility of the photocopies of the ASAs, the 100 checks, the original printout of the full master list and detail list of the checks from the PHC, and the bank statement prepared by UCPB⁷⁹ is of no moment.

Penal and Civil Liability For Violation of Section 3(e), R.A. No. 3019

The penalty for violation of Section 3(e) of R.A. No. 3019 is "imprisonment for not less than six years and one month nor more than fifteen years, and perpetual disqualification from public office."⁸⁰ Under the Indeterminate Sentence Law, if the offense is punishable by a special law, as in the present case, an indeterminate penalty shall be imposed on the accused, the maximum term of which shall not exceed the maximum fixed by the law, and the minimum not less than the minimum prescribed therein.⁸¹

There being no aggravating and mitigating circumstances in this case, the Sandiganbayan correctly imposed the indeterminate prison term of six (6) years and one (1) month, as minimum, to ten (10) years and one (1) day, as maximum, with perpetual disqualification from public office.

Duran, Montano, and Tugaoen shall be solidarily liable for the restitution of the ₱10,000,00.00 that they defrauded from the funds of the PNP. An offense as a general rule causes two (2) classes of injuries - the first is the social injury produced by the criminal act which is sought to be repaired through the imposition of the corresponding penalty, and the second is the personal injury caused to the victim of the crime, which injury is sought to be compensated through indemnity, which is civil in nature.⁸²

WHEREFORE, foregoing considered, the conviction of Salvador Duran, Sr., Arturo Montano, and Margarita Tugaoen in Sandiganbayan Criminal Case No. 20192 is hereby AFFIRMED.

The conviction of Van Luspo in Criminal Case No. 20192 is REVERSED and SET ASIDE, and he is hereby ACQUITTED. The bailbond posted for his provisional liberty is hereby CANCELLED.

Salvador Duran, Sr., Arturo Montano, and Margarita Tugaoen are further ORDERED to jointly and severally indemnify the Philippine National Police of Ten Million Pesos (₱10,000,000.00).

SO ORDERED.

ANTONIO EDUARDO B. NACHURA
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice

ARTURO D. BRION* Associate Justice

ROBERTO A. ABAD Associate Justice

JOSE CATRAL MENDOZA
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

* Additional member in lieu of Associate Justice Diosdado M. Peralta, who took no part in the case due to prior participation in the initial proceedings before the Sandiganbayan.

¹ Rollo (G.R. No. 188487), pp. 16-75.

² G.R. No. 188487, id. at 87-94.

³ Common Exhibit for the parties; marked as Exhibit "F" for the prosecution and as Exhibit "7" for the defense.

⁴ Exhibits "A" and "A-1".

⁵ Exhibit "H" and its sub-markings.

⁶ Exhibit "D"and its sub-markings.

⁷ Exhibits "F-14" to "F-14-B," and Exhibits "F-17" to "F-17-B."

⁸ Exhibit "F-18."

⁹ Presently referred to as OMB-MOLEO (Military and other Law Enforcement Offices.)

¹⁰ Resolution dated August 30, 1993, Records, Vol. I, pp. 10-22.

¹¹ Id. at 4-9.

¹² Id. at 1-2.

¹³ Id. at 335-339, 341.

¹⁴ Id. at 350-352.

¹⁵ Id. at 387.

¹⁶ Prosecution’s Formal Offer of Evidence, Records, Vol. II, pp. 150-159.

¹⁷ Exhibit "G" inclusive of its sub-markings.

¹⁸ Exhibit "F-19."

¹⁹ Exhibit "F-20."

²⁰ Exhibit "H" inclusive of its sub-markings.

²¹ Exhibit "F-13" inclusive of its sub-markings.

²² Sworn Statement of Margarita Tugaoen executed on March 5, 1993, Exhibit "D" inclusive of its sub-markings.

²³ Records, Vol. II, pp. 353.

²⁴ Id. at 369-396.

²⁵ Records, Vol. III, pp. 4-24.

²⁶ Id. at 16-18.

²⁷ Exhibits "6" to "6-A."

²⁸ Exhibits "6-B" to "6-Q."

²⁹ Pages 51-54 of the Sandiganbayan’s January 19, 2009 decision, supra note 1.

The Lawphil Project - Arellano Law Foundation

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