3L\epubHr of tbe ~bilippines

~upretne <lCottrt
;Manila

FIRST DIVISION
BENJAMIN A. UMIPIG, G.R. No. 171359
Petitioner,

-versus-

PEOPLE OF THE PHILIPPINES,

Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - -x
RENATO B. PALOMO and G.R. No. 171755
MARGIE C. MABITAD,
Petitioners,

-versus-

PEOPLE OF THE PHILIPPINES,

Respondent.
X----------------------:------ -X
CARMENCITA FONTANILLA- G.R. No. 171776
PAYABYAB,
Petitioner, Present:

BERSAMIN, J.,
Acting Chairperson,
DEL CASTILLO,
-versus-
VILLARAMA, JR.,
PEREz, and
PERLAS-BERNABE,** JJ.

Promulgated:
PEOPLE OF THE PHILIPPINES,
Respondent.
X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X

Designated Additional Member per Raffle dated July 4, 2012 vice Associate ustice Teresita J.
Leonardo-De Castro who inhibited for being then the Presiding Justice of the Sandiganbayan.
Designated Acting Member of the First Division per Special Order No. 1227 dated May 30, 2012.
Decision 2 G.R. Nos. 171359, 171755
& 171776

DECISION

VILLARAMA, JR., J.:

Before us are consolidated appeals by certiorari under Rule 45 of the

1997 Rules on Civil Procedure,as amended, assailing theJanuary 4, 2006
Decision1and January 30, 2006 and March 1, 2006Resolutions2of the
Sandiganbayan, Fourth Divisionfinding petitioners Benjamin A. Umipig,
Renato B. Palomo, Margie C. Mabitad and Carmencita Fontanilla-Payabyab
guilty of violating Section 3(e) of Republic Act (R.A.) No. 3019, or the
Anti-Graft and Corrupt Practices Act, as amended.

Factual Background

The National Maritime Polytechnic (NMP) is an attached agency of

the Department of Labor and Employment tasked to provide necessary
training to seafarers in order to qualify them for employment.

Sometime in 1995, NMP undertook an expansion program. A pre-

feasibility study conducted by the NMP identified Cavite as a possible site
for the expansion as Cavite is close to the employment market for seafarers.
Thus, NMP dispatched a team to look for a site in Cavite, andasuitable
location consisting of two parcels of land was found at Sta. Cruz de Malabon
Estate in Tanza, Cavite:Lots 1730-C and 1730-D, which areboth covered by
TCT No. T-97296-648 as part of a bigger parcel of land, Lot 1730.3

Petitioner Palomo, then NMP Executive Director, presented for

approval to the NMP Board of Trustees the two parcels of land they
identified. On August 21, 1995, the Board approved the proposal in principle

1
Rollo (G.R. No. 171359), pp. 7-28. Penned by Associate Justice Jose R. Hernandez with Associate
Justices Gregory S. Ong and Rodolfo A. Ponferrada concurring. The assailed decision was rendered in
Criminal Case No. 27477.
2
Id. at 30; rollo (G.R. No. 171776), pp. 74-80.
3
TSN, November 22, 2004, pp. 8-11; Exhibits 21 and 22.
Decision 3 G.R. Nos. 171359, 171755
& 171776

and authorized Palomo to start negotiations for the acquisition of the site in
Cavite and if necessary to pay the earnest money.4

Palomo thereafter began negotiations with Glenn Solis, a real estate

broker, for the purchase of Lots 1730-C and 1730-D. Solis is the Attorney-
in-Fact of the registered owners of said properties by virtue of a Special
Power of Attorney (SPA) executed in his favor.

On November 9, 1995, Palomo,in a handwritten memorandum to

petitioners Umipig, Fontanilla and Mabitad requested them to cause the
release of the sum of Five Hundred Thousand Pesos (P500,000) x x x [as]
EARNEST MONEY for the purchase/acquisition of [a] 5-hectare lot for
NMP extension to Luzonin favor of MR. GLEN[N] SOLIS, holder of
authority documents of the lot ownersand thereby authorized to represent
the owners on their behalf for this purpose.5

On November 10, 1995, Disbursement Voucher No. 101-9511-1114

was prepared for the P500,000 earnest money with Glenn B. Solis as
claimant. Umipig, then NMP Administrative Officer, after receiving the
disbursement voucher and its supporting documents, issued a memorandum
on even date to Palomo enumerating the infirmities of the supporting
documents attached, to wit:

1. Contract to Sell dated January ___ 1995 for lot with TCT No. 97296 is
between Eufrocina Sosa as Vendor and Nilda L. Ramos and six (6)
others co-heir/vendor.
2. Yet the authority to sell dated November 8, 1995 was signed by Nilda
I. Ramos (only) representing herself and her group.
3. The authority to sell is not notarized (dated November 8, 1995) at
P370.00/sq. meter while the offer to NMP dated October 11, 1995 is
for P350.00/sq.m.
4. Tax declaration No. 3908 and 3907 for TCT No. T-16279 and T-
16356 are in the name of Eufrocina Raquero.
5. Xerox copy of TCT No. 97267? is illegible, hence, one can not
establish its relevance to the voucher.

4
Exhibit 18, p. 7.
5
Exhibit 17.
Decision 4 G.R. Nos. 171359, 171755
& 171776

6. That the aforesaid documents are all photocopies/xerox, not certified

as true xerox copies.
7. That the feasibility study being work out by the NEDA and the NMP
for the expansion of NMP to Luzon, is yet to be submitted to the NMP
Board of Trustees for approval.
8. The undersigned signs subject voucher with aforesaid infirmities with
reservations and doubts as to its legality, in compliance with
Management Memo. dated November 9, 1995 for us to release the
voucher.6

Umipig attached to the disbursement voucher his memorandum to

Palomo when he signed Box A thereof. Petitioner Fontanilla-Payabyab, then
Budget Officer, stamped the words Fund Availability, and signed the
voucher with note Subject to clarification as per attached note of AO dated
11/10/95.Petitioner Mabitad, then NMP Chief Accountant, signed Box B of
the voucher, and noted as per findings of AO per attach[ed] memo, with
reservations as to [the] legality of the transaction per observations by
AOV.7Palomo signed Box C as approving officer.8

In response to Umipigs memorandum, Palomo instructed him to clear

up said infirmities and authorized him to arrange a travel to Manila with
their Finance Officer/Accountant to clear these acts once and for all.
Palomo further added that [t]ime is of the essence and [they] might lose out
in this transaction and that the cost of the lot per square meter has been set
at P350 from the beginning.9

On December 10, 1995, a P2,000,000 partial payment was released

for the purchase of Lots 1730-C and 1730-D through Disbursement Voucher
No. 101-9512-082,10 again with Solis as claimant. Umipig signed Box A but
noted Subj. to submission of legal requirements as previously indicated on
Nov[ember] 10, 1995 [Memorandum]. Mabitad signed Box B and noted
w/ reservations as to the legality of the transactions. Palomo signed Box C
as approving officer.
6
Rollo (G.R. No. 171755), p. 156.
7
Exhibit 16-B.
8
Exhibit 16.
9
Supra note 6.
10
Exhibit 8.
Decision 5 G.R. Nos. 171359, 171755
& 171776

On December 21, 1995, a Contract to Sell was executed between

Palomo and Solis over Lots 1730-C and 1730-D with a combined area of
22,296 square meters and a total agreed purchase price ofP7,803,600 orP350
per square meter.Said Contract to Sell eventually ripened into a
consummated sale (referred hereinafter as the first purchase) as TCT No.
T-93623611 for Lot 1730-C and TCT No. T-93623712 for Lot 1730-D are
now registered in the name of NMP, such titles having been issued on
November 21, 2000.

The foregoing sale transaction(first purchase) covering Lots 1730-

C and 1730-D was the subject of Criminal Case No. 26512 filed in the
Sandiganbayan against Umipig, Palomo and Mabitad on February 16, 2001.
On August 6, 2004, the Sandiganbayans Fifth Division rendered a
decision13 acquitting all three accused of the charge of violation of Section 3
(e) of R.A. No. 3019.

After consummating the first purchase,Palomo again negotiated with

Solis for the purchase of two more parcels of land adjacent to the lots subject
of the first purchase: Lot 1731 which was covered by TCT No. 1635614and
registered in the name of the late Eufrocina Raqueo, married to the late
Leoncio Jimenez, and Lot 1732 covered by TCT No. 3581215and registered
in the name of the late Francisco Jimenez, son of Eufrocina Raqueo and
Leoncio Jimenez. Solis this time was armed with two Special Power of
Attorneys(SPAs): one dated April 15, 1996 appearing to have been executed
by the Jimenez heirs, all residents of California, U.S.A., authorizing Teresita
Jimenez-Trinidad to sell Lots 1731 and 1732 and to receive consideration;16
and another dated July 12, 1996 executed by Trinidad authorizing Solis to
sell Lots 1731 and 1732 and to receive consideration.17

11
Exhibit 21.
12
Exhibit 22.
13
Rollo (G.R. No. 171755), pp. 85-118.
14
Exhibit N.
15
Exhibit O.
16
Exhibit C & C-1.
17
Exhibit B & B-1.
Decision 6 G.R. Nos. 171359, 171755
& 171776

On August 1, 1996, Palomo and Solis executed a Contract to Sell18

over Lots 1731 and 1732. It specified a total purchase price of P11,517,100
to be paid as follows:

4.1 P6,910,260 downpayment upon [signing] of [the Contract to Sell].

4.2 Balance after fifteen (15) days upon receipt of approve[d] Extra-
judicial partition of Estate, location plan, reconstitution of owners
copy and signing of Deed of Sale.19

On even date,Disbursement VoucherNo. 101-9608-78720 was

prepared for the downpayment of P6,910,260 with Solis as payee.Fontanilla-
Payabyab stamped the words FUND AVAILABILITY and signed the
voucher. Umipig signed Box A. Mabitad signed Box B, while Palomo
signed Box C as approving officer.

Also on August 1, 1996, a Request for Obligation of Allotments21 was

prepared by Fontanilla-Payabyab for the P6,910,260 down payment.
Mabitad certified that unobligated allotments are available for the
obligation and affixed her signature thereon.On August 2, 1996, NMP
issued Development Bank of the Philippines (DBP) Check No.
000158429522in the amount of P6,910,260payableto Solis. The signatories to
the check were Umipig23and Palomo.24

On December 27, 1996, Disbursement Voucher No. 101-9612-1524

was prepared for P3,303,600 with Solis as payee.Of said amount,
P1,303,600 was for the full payment of the lots under the first purchase
while the remaining P2,000,000 was partial payment of the balance for Lots
1731 and 1732.25Fontanilla-Payabyab stamped the words FUND
AVAILABILITY and signed the voucher. Umipig signed Box A. Mabitad
signed Box B, while Palomo signed Box C as approving officer. On even

18
Exhibit A.
19
Exhibit A-1.
20
Exhibit D.
21
Exhibit E.
22
Exhibit F.
23
Exhibit F-2.
24
Exhibit F-1.
25
Records (Crim. Case No. 27477), Volume I, p. 308; Exhibit 12.
Decision 7 G.R. Nos. 171359, 171755
& 171776

date, NMP issued DBP Check No. 000175200526 in the amount of

P3,303,600 payableto Solis. The signatories to the check were Umipig27 and
Palomo.28

The total payments made for thesecond purchase covering Lots

1731 and 1732 wasP8,910,260.00, which is the subject of the present
controversy.After receivingthese payments, Solis disappearedand
nevershowed up again at the NMP. Palomo even sent Solis three letters dated
March 4, 1998,29August 11, 1998,30 and September 30, 1998,31to follow up
the approved extrajudicial partition of estate, location and/or subdivision plan,
reconstitution of owners copy and signing of Deed of Absolute Sale. Under
the Contract to Sell, the submission of said documents was made a condition
for payment of the balance, being necessaryfor the transfer and registration of
said properties in the name of NMP.

As no reply was received from Solis,Palomo sought the assistance of

the Office of the Solicitor General(OSG) and informed the latter of the
inability to locate Solis.The OSG then inquired with the Philippine Consulate
General in Los Angeles, California as to the genuineness and authenticity of
the SPA that was executed by Urbano Jimenez, et al. authorizing Teresita
Trinidad to sell Lots 1731 and 1732. In a letter32 dated June 11, 1999, Vice
Consul Bello stated that the SPA executed by Urbano Jimenez, et al. and
shown to NMP wasfake. According to Vice Consul Bello, when the
Consulate searched its files for 1996, they found an SPA authorizing the sale
of Lots 1731 and 1732 but it was not the same as the instrument given to
NMP. The genuine SPA33 for said properties, bearing the same date, O.R.
No., Service No., Document No. and Page No. but without wet seal, was
executed by Gloria Potente, Marylu Lupisan and Susan Abundo authorizing

26
Exhibit H.
27
Exhibit H-2.
28
Exhibit H-1.
29
Exhibit J.
30
Exhibit K.
31
Exhibit L.
32
Exhibit I.
33
Exhibit M.
Decision 8 G.R. Nos. 171359, 171755
& 171776

Presbitero J.Velasco, Jr. as attorney-in-fact. The OSG reported the

Consulates findings to Palomo in a letter34 dated June 17, 1999.

On July 19, 1999, Palomo filedan Affidavit-Complaint35against Solis

before the Tacloban City Prosecutors Office for estafa through falsification
of public documents.Upon the request of the Tacloban City Prosecutors
Office, the Commission on Audit (COA) conducted a special audit on the
transactions subject of the complaint filed by Palomo.

Atty. Felix M. Basallaje Jr., State Auditor III of the COA and Resident
Auditor at the NMP, set forth his findings in his Special Audit Report, to wit:

1. Disbursement in the amount of P8,910,260.00 in favor of Mr. Glenn

Solis for the purchase of two lots covered by TCT No. 16356 and TCT
No. 35812 was not supported by a Torrens Title or such other
document that title is vested in the government (NMP) in violation of
Sec. 449 of GAAM Vol. I.36

2. The contract to sell entered between NMP and Mr. Glenn Solis is
tainted with irregularities the parties to the contract not being
authorized as required in Sec. 5 of P.D. 1369 and pertinent provisions
of the Civil Code of the Philippines.37

In the same report, the following persons wereconsidered responsible

for the subject transactions:

1. Mr. Glenn Solis - For acting as vendor of the above

subject property (TCT Nos. 16356
and 35812) without authority from
the owner thereof;

2. Ms. Teresita Jimenez - Formis[re]presentation/conspiring

Trinidad with Mr. Glenn Solis by issuing a
Special Power of Attorney to sell the
above property without authority
from the owner.

3. Mr. Renato B. Palomo- For entering into a contract to sell

Executive Director without authority from the NMP
Board of Directors and by signing
Box C approving of the voucher
as payment.

34
Exhibit 7.
35
Exhibits 6 and 6-a.
36
Exhibit L-1.
37
Exhibit L-2.
Decision 9 G.R. Nos. 171359, 171755
& 171776

4. Benjamin A. Umipig- For signing Box A in certifying

Administrative Officer the payment as lawful.

5. Margie C. Mabitad - For signing Box B certifying as to

Chief Accountant availability of funds, that
expenditure are proper and
supported by documents.

6. Carmencita Fontanilla - For signing in the voucher for fund

Budget Officer control and in the ROA for
requesting obligation of the above
transactions.38

Atty. Basallajethus made the following recommendations:

1. Disallow in audit all transaction[s] covering payments made to Mr.

Glenn Solis under Voucher No. 101-9608-787 and Voucher No. 101-
9612-1524 with a total amount of P8,910,260.00.

2. Require Mr. Glenn Solis and his principal, Teresita Jimenez Trinidad
to restitute the amount received plus damages by filing a separate civil
suit against the vendor.

3. Institute the filing of appropriate case against parties involved, if

evidence warrants.39

After preliminary investigation, the Tacloban City Prosecutors Office

issued a Resolution40 dated January 25, 2001 finding a prima facie case of
malversation of public funds committed in conspiracy by Solis, Jimenez-
Trinidad, Palomo, Fontanilla-Payabyab, Umipig and Mabitad. Upon review,
the Deputy Ombudsman for the Visayas approved with modification the
resolution of the Tacloban City Prosecutors Officeand recommendedinstead
the prosecution of petitioners for violation of Section 3(e) of R.A. No. 3019,
as amended, or the Anti-Graft and Corrupt Practices Actand the filing of
aseparate Information for Falsification against Solis.41

On May 20, 2002,petitioners were charged with violation of Section

3(e),R.A. No. 3019,under the following Information:

38
Exhibit L-4.
39
Exhibit L-5.
40
Rollo (G.R. No. 171755), pp. 75-79.
41
Id. at 80-84.
Decision 10 G.R. Nos. 171359, 171755
& 171776

That on or about the 1st day of August 1996, and for sometime
prior or subsequent thereto, at Tacloban City, Province of Leyte,
Philippines, and within the jurisdiction of this Honorable Court,
abovenamed accused RENATO B. PALOMO, BENJAMIN A. UMIPIG,
MARGIE C. MABITAD and CARMENCITA FONTANILLA-
PAYABYAB, public officers, being the Executive Director,
Administrative Officer, Chief Accountant and Budget Officer,
respectively, of the National Maritime Polytechnic, stationed at
Cabalawan, Tacloban City, in such capacity committing the offense in
relation to office, conniving, confederating and mutually helping with
each other and with GLENN B. SOLIS and TERESITA JIMENEZ-
TRINIDAD, private individuals, with deliberate intent, with manifest
partiality, evident bad faith and/or gross inexcusable negligence, did then
and there willfully, unlawfully and feloniously enter into a Contract to Sell
with accused GLENN [B.] SOLIS, for the acquisition of two (2) parcels of
land denominated as Lot Nos. 1731 and 1732 covered with Transfer
Certificate of Title Nos. 16356 and 35812, located at Tanza, Cavite, with
an area of 32,906 sq. meters more or less, for a consideration in the
amount of EIGHT MILLION, NINE HUNDRED TEN THOUSAND,
TWO HUNDRED SIXTY PESOS (P8,910,260.00), Philippine Currency,
and consequently in payment thereof issued Development Bank of the
Philippines (DBP) Check Nos. 1584295 dated August 2, 1996, in the
amount of SIX MILLION, NINE HUNDRED TEN THOUSAND, TWO
HUNDRED SIXTY PESOS (P6,910,260.00) Philippine Currency and
1752005, dated December 27, 1996, in the amount of THREE MILLION,
THREE HUNDRED THREE THOUSAND, SIX HUNDRED PESOS,
(P3,303,600.00) Philippine Currency, respectively, through Voucher Nos.
1019608-787 and 101-9612-1524, respectively, despite the absence of a
copy of a Torrens Title of the land in the name of the National Maritime
Polytechnic (NMP) or any document showing that the title is already
vested in the name of the government, as mandated under Section 449 of
the Government Accounting and Auditing Manual, Volume I, and despite
the lack of authority on the part of the accused GLENN B. SOLIS to sell
the said lands not being the real or registered owner and the
fictitious/falsified Special Power of Attorney allegedly issued by accused
TERESITA JIMENEZ-TRINIDAD, resulting to the non-acquisition of the
land by the NMP, thus, accused public officers, in the course of the
performance of their official functions had given unwarranted benefits to
accused private individuals GLENN B. SOLIS and TERESITA
JIMENEZ-TRINIDAD and to the damage and prejudice of the
government particularly, the National Maritime Polytechnic in the amount
aforestated.
42
CONTRARY TO LAW.

Palomo and Mabitad were arraigned on July 22, 2002.43 Umipig and
Fontanilla-Payabyab were arraigned on September 23, 200244 and January

42
Records (Crim. Case No. 27477), Volume I, pp. 1-2.
43
Id. at 60-61.
Decision 11 G.R. Nos. 171359, 171755
& 171776

20, 2004,45respectively. They all pleaded not guilty. Solis and Jimenez-
Trinidad remained at large.

In the Sandiganbayans Pre-Trial Order46 dated January 20, 2004, all

the parties agreed that the following factual and legal issues would be
resolved in the case:

1. Whether or not the act of accused Executive Director Renato Palomo y

Bermes in entering, in behalf of the NMP, into a Contract to Sell with
accused Glenn Solis required prior authority and/or approval from the
Board of Trustees of NMP; and,

2. Whether or not all of the accused conspired and violated Section 3(e)
of R.A. 3019, as amended.47

At the trial, theprosecution presented two witnesses: Atty. Basallaje,

Jr.and Emerita T. Gomez, State Auditor I, also of the COA.

Atty. Basallaje testified on the audit investigation which the COA

Regional Director instructed him to conduct on NMP regarding the
transaction involving Lots 1731 and 1732.He likewise identified the Special
Audit Report he prepared after the investigation, as well as the documents he
had evaluated-- only those documentswhich wereattached to the
endorsement letter from the COA Regional Director and those on file with
him as resident auditor of NMP.48He also testified that he informed the
management of NMP regarding the audit only after it was terminated. He
admitted that he did not read orask for a copy of the minutes of the August
21, 1995 NMP Board of Trustees meeting which the NMP Management
citesas the source of authority for entering the subject transaction. Atty.
Basallaje opined that it was incumbent upon the NMP management to
support their claim that proper authority existed so he did not ask for a
copy.49

44
Id. at 115.
45
Id. at 310.
46
Id. at 303-309.
47
Id. at 308.
48
TSN, June 16, 2004, p. 54.
49
Id. at 47-49.
Decision 12 G.R. Nos. 171359, 171755
& 171776

Emerita Gomez testified that she was assigned at the NMP as auditor
from the COA from November 17, 1985 until October 5, 2003. In the course
of her duties, she recalled having received documents pertaining to the
purchase of Lots 1731 and 1732. Said documents, which she identified in
court, are: (1) Disbursement Voucher No. 101-9608-787 dated August 1,
1996 for partial payment to Glenn Solis of the amount of P6,910,260 to
which a Request for Obligation of Allotments was attached; (2) a certified
true copy of Check No. 0001584295 dated August 2, 1996 in the amount of
P6,910,260 paid to the order of Glenn B. Solis; (3) Contract to Sell; (4)
Special Power of Attorney executed by Teresita Jimenez-Trinidad in favor
of Glenn Solis; (5) Special Power of Attorney purportedly executed by
Urbano Jimenez, et al. in favor of Teresita Jimenez-Trinidad; (6) a certified
true copy of Disbursement Voucher No. 101-9612-1524 dated December 27,
1996 for payment of parcels of land covered by TCT Nos. 16356 and 35812
in the amount of P3,303,600 to Glenn Solis; (7) a certified true copy of
Check No. 001752005 dated December 27, 1996 in the amount of
P3,303,600 paid to the order of Glenn Solis; (8) a letter dated June 11, 1999
by Vice Consul Bello addressed to Atty. Carlos Ortega, Assistant Solicitor
General; (9) TCT No. 16356 RT-1245 in the name of Eufrocina Raqueno;
(10) TCT No. T-35812 in the name of Francisco Jimenez; and (11)
Declaration of Real Property in the name of Eufrocina Raqueo.

Gomez said she was the one who supplied the documents to Atty.
Basallaje when the latter conducted an audit investigation. Shewas also
tasked toencode the Special Audit Report. Gomez likewise identified the
signatures of petitioners Umipig, Fontanilla, Mabitad and Palomo appearing
on the disbursement vouchers and checks she hadpreviously identified, and
claimed that she was familiar with their signatures.50

On the other hand, petitioners testified on their respective defenses, as

follows:

50
TSN, September 6, 2004, pp. 6-22.
Decision 13 G.R. Nos. 171359, 171755
& 171776

Petitioner Palomo related the circumstances surrounding the

transaction involving Lots 1731 and 1732. He testified that his authority for
the negotiation and payment of earnest money to Glenn Solis came from the
Board of Trustees as reflected in the minutes of its August 21, 1995 meeting.
He also admitted that it was Solis who prepared the Contract to Sell and that
he did not try to meet the owner of the property. When the titles were
presented to them,they believed that on their face value, they were in order.
Palomo also said that the adjoining lots were being sold forP1,000 to P2,000
per square meterwhile the selling price of the subject lots was onlyP350 per
square meter. On cross-examination, Palomo admitted that none of the
registered owners are signatories to the SPAs whichSolis presented to him
and that it was only when they could not anymore contact Solis, after the
latter received the payments,that he panicked and tried to check if the
documents shown to him were proper and authentic. He further disclosed
that he did not consider Section 449 of the Government Accounting and
Auditing Manual, Volume I when he transacted with Solis over the
lotspurchased by NMP.51

Petitioner Umipigtestified on his duties as NMP Administrative

Officer and the circumstances relating to the payments made in connection
with the subject lots. He stated that by signing Disbursement Voucher No.
101-9612-1524 dated December 27, 1996, it meansthat the correct procedure
was followed and the voucher was prepared, typed and supported by
complete documents as required. He likewise admitted that before he signed
the voucher, he presumed that everything was in order because said
document had alreadypassed through several offices.

On cross-examination, Umipigsaid that he made objections, as

evidenced by a memorandum,to the payments made for the first purchase
but did not anymore object on the payments pertaining to the second
purchasebecause the Board of Trustees already gave a go signal for their

51
TSN, November 22, 2004, pp. 11-20, 41-55.
Decision 14 G.R. Nos. 171359, 171755
& 171776

purchase. He also cited an alleged COA regulation stating that if the

subordinate objects in writing, he will be exonerated if he is later proven
correct.52

Petitioner Mabitad, meanwhile testified on her duties and

responsibilities as Accountant of NMP and identified several documents
pertaining to the subject lots. She stated that when she signed Box B of the
disbursement vouchers, she certified that funds are available for the purpose
and the supporting documents duly certified in Box A are attached. Like
Umipig, she also made reservations but she only expressed them in those
vouchers pertaining to the first purchase.Mabitad cited Section 106 of the
Government Auditing Code of the Philippines (P.D. No. 1445) which she
claims relieves her from liability when she made her reservations.She also
testified that her only participation in the subject transaction was to certify
that the funds for it are available. She likewise stated that she did not make
any notations in the disbursements for the second purchase because the first
purchase was successful and titles to the lots acquired have been registered
in the name of NMP.53

Petitioner Fontanilla-Payabyab, for her part,testified on her duties and

responsibilities as Budget Officer of NMP.She explained that as budget
officer, she is not required to sign vouchers. She nonetheless signed
Disbursement Voucher Nos. 101-9608-787 and 101-9612-1524 for her own
purpose because she was the one who followed up the release of funds from
the Department of Budget and Management (DBM) so she can track the
available cash balance of NMP as it was her duty to follow up with the DBM
the release of the agencys budget.She further clarified that her signature
does not have the effect of validating or invalidating the voucher. She also
claimedthat even if she is Head of Finance, she cannot influence the

52
TSN, March 8, 2005, pp. 12-18, 23-42.
53
TSN, May 23, 2005, pp. 6-36.
Decision 15 G.R. Nos. 171359, 171755
& 171776

decisions of her subordinates like Mabitad because they have specific jobs
under the COA rules and under other laws.54

On January 4, 2006, the Fourth Division of the Sandiganbayan issued

the assailed decision, the falloof which reads:

ACCORDINGLY, accused RENATO B. PALOMO, BENJAMIN

A. UMIPIG, MARGIE A. MABITAD and CARMENCITA
FONTANILLA-PAYABYAB, are found guilty beyond reasonable doubt
of having violated RA 3019, Sec. 3(e) and are sentenced to suffer the
indeterminate penalty of SIX (6) YEARS AND ONE (1) MONTH AS
MINIMUM AND NINE (9) YEARS AS MAXIMUM, perpetual
disqualification from public office, and to indemnify jointly and severally
the Government of the Republic of the Philippines in the amount of
EIGHT MILLION NINE HUNDRED TEN THOUSAND AND TWO
HUNDRED SIXTY PESOS (Php8,910,260).

Since the Court did not acquire jurisdiction over the person of
accused GLENN B. SOLIS and TERESITA JIMENEZ-TRINIDAD, let
the cases against them be, in the meantime, archived, the same to be
revived upon their arrest. Let an alias warrant of arrest be then issued
against accused GLENN B. SOLIS and TERESITA JIMENEZ-
TRINIDAD.
55
SO ORDERED.

The Sandiganbayans Ruling

In convicting petitioners, the Sandiganbayan ruled that the evidence

on recordclearly shows that petitioners acted with evident bad faith and
gross inexcusable negligence in entering into the Contract to Sell dated
August 1, 1996 with Solis and in disbursing the amount of P8,910,260for the
second purchase.Said courtheld that petitioners violated Section 449 of the
Government Accounting and Auditing Manual since the Contract to Sell
does notsuffice to prove that title is vested in the Government and even
contravenes the requirement that proof of title must support the vouchers.

The Sandiganbayan faulted Palomo for breaking the law and acting
with evident bad faith when he entered into a deal that gave no guarantee
that ownership would be transferred to the Government and that such was
54
Id. at 72-90.
55
Rollo (G.R. No. 171359), pp. 26-27.
Decision 16 G.R. Nos. 171359, 171755
& 171776

obviously disadvantageous to the government. The other petitioners likewise

violated the law when they signed the disbursement vouchers in the absence
of any document that would prove ownership by the Government.The
Sandiganbayan said petitioners cannot claim that they only followed the
terms of the Contract to Sell because they also violated its provisions, the
last disbursement voucher for P2,000,000 having been issued without legal
basis.It pointed out that the Contract to Sell provided that a downpayment of
P6,910,260 must be given upon its signing and the payment of the balance
must be paid 15 days after receipt of several specified documents.
Petitioners, however, released a portion of the balance even without
receiving any of the said documents.

The Sandiganbayan further noted that despite being apprised

ofUmipigs reservations on the legality of the transactions with Solis,
petitioners deliberately proceeded to sign the disbursement vouchers and
made possible the release of the money to Solis. Petitioners thusacted with
gross inexcusable negligencewhen they did not verify theauthenticity of the
SPAs executed by Solis and Trinidad, and released the P2,000,000 for no
valid reason.

The Sandiganbayanalso ruled that the third element undue injury to

the Government as well as giving unwarranted benefits to a private party
was duly proven. Petitioners acts unmistakably resulted in the
Governments loss of P8,910,260 when Solis disappeared after receiving
said amount and also gave Solis unwarranted benefits.

Finally, the Sandiganbayan held that the facts established conspiracy

among the petitioners because the unlawful disbursementscould not have
been madehad they not affixed their signatures on the disbursement
vouchers and checks. When petitionersthussigned the vouchers, they made it
appear that disbursements were valid when, in fact, they were not. Since
each of the petitioners contributed to attain the end goal, it can be concluded
Decision 17 G.R. Nos. 171359, 171755
& 171776

that their acts, taken collectively, satisfactorily prove the existence of

conspiracy among them.

The motions for reconsideration filed by Palomo, Payabyab and

Mabitad were denied by the Sandiganbayan in its Resolution dated March 1,
2006. Umipigs motion for reconsideration was likewise denied under the
Resolution dated January 30, 2006.

These consolidated petitions were filed by Umipig (G.R. No. 171359),

Payabyab (G.R. No. 171776), Palomo and Mabitad (G.R. No. 171755).

Petitioners Arguments

Petitioners question the application of Section 449 of the Government

Accounting and Auditing Manualas said provisiondoes not categorically say
that disbursement vouchers for the acquisition of land may not be signed
unless title to the land is already in the name of Republic of the Philippines,
or unless there is another document showing that title is already vested in the
Government. They argue that the provision rather contemplates a situation
where the evidence of ownership comes after the purchase or when the
transaction has been consummated. They likewise contend that even if they
were not charged under the Government Accounting and Auditing Manual,
it is the regulation on which the finding of guilt was based and upon which
they were held to have acted with evident bad faith and gross inexcusable
negligence.

Umipig, Palomo and Mabitad alsoassert that no law, rule or regulation

requires them to exercise a higher degree of diligence other than that of a
good father of the family. Umipig adds that while his failure to repeat his
reservations might be construed as an omission of duties, such omission
cannot by any stretch of imagination be construed as negligence
characterized by the want of even the slightest care, or omitting to act in
a situation where there is a duty to act, not inadvertently but willfully and
intentionally . He further contends that he treated the first purchase and
Decision 18 G.R. Nos. 171359, 171755
& 171776

the subject contract as one single transaction as both were for one expansion
program of the NMP and the lands subject of said acquisitions were
contiguous. Thus, he did not see the need to repeat his written
reservations.He also argues that there is no evidence that he and his co-
petitioners acted in conspiracy as there was no proof of a chain of
circumstances showing that each acted as a part of a complete whole.

Palomo and Mabitad, meanwhile assert thatthe SPAs in favor of Solis

and Trinidad appeared to be in order and Palomo had no reason to doubt
their authenticity. Accordingly, Palomo cannot be considered negligent or
in bad faith, and should instead be presumed to have acted in good faith in
the performance of his official duty. As with Mabitad, it is argued that she
signed the vouchers as Chief Accountant whose signature is required by
Section 86 of the State Audit Code which concerns the certification of the
proper accounting official of the agency concerned that the funds have been
duly appropriated for the purpose and the amount necessary to cover the
proposed contract is available for expenditure and account thereof, subject to
verification by the auditor concerned. Thus in signing the voucher, she
merely certified as to the availability of funds which is a ministerial duty on
her part. She also cites Section 106 of the Government Auditing Code of the
Philippines since she made a prior reservationon the vouchers pertaining to
the first purchase.Palomo and Mabitad further submit that they have no prior
knowledge of perceived infirmities contrary to what was found by the
Sandiganbayan, pointing out that inUmipigs Memorandum, there was no
mention that the SPAs could possibly be fake. They contend that it was the
falsified SPAs that resulted in the filing of charges against them so the
determination of conspiracy should revolve around the acts of falsification
committed by Solis and Trinidad; hence, it was petitioners who were the
victims of said conspirators.

Finally, Fontanilla-Payabyab reiterates that her signature on the

subject vouchers was not a requirement for the disbursement as it was only a
tracking or monitoring entry on the current cash position of NMP so that she
Decision 19 G.R. Nos. 171359, 171755
& 171776

can follow up the next cash allocation release from the DBM. She insists
that the disbursement could have been made even without her signature. She
also questions the finding of gross negligence on her part since it was not
within her competence to determine the legality or illegality of a transaction.
Further, she argues that even assuming she was indeed negligent, such
finding precludes a ruling of conspiracy since the latter requires intentional
participation.

Our Ruling

Petitioners were charged with violation of Section 3(e) of R.A. No.

3019 or the Anti-Graft and Corrupt Practices Act, as amended, which reads:

Section 3. Corrupt practices of public officers. Inaddition 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:

xxxx

(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.

xxxx

The essential elements of Section 3(e) of R.A.No. 3019, as amended,

are as follows:

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 any undue injury to any party, including the
government, or gave any private party unwarranted benefits, advantage
or preference in the discharge of his functions.56

56
Albert v. Sandiganbayan, G.R. No. 164015, February 26, 2009, 580 SCRA 279, 289-290.
Decision 20 G.R. Nos. 171359, 171755
& 171776

The Court finds it no longer necessary to discuss at length the first

elementas it is not disputed, having been stipulated by the parties during pre-
trial that during the material time and date alleged in the Information,
Palomo was the Executive Director, Umipig was the Administrative Officer,
Mabitad was Chief Accountant and Fontanilla-Payabyab was the Budget
Officer of NMP.The third element of undue injury to the Government is
likewise a non-issue since it was likewise stipulated during pre-trial that
after payments totaling P8,910,260 were made to Solis for the subject lots,
the latter disappeared and the SPAs he showed to NMP were found to be
fake. Clearly, this is a quantifiable loss for the Government since NMP was
not able to acquire title over the subject lots. Thus, the controversy lies in the
second element of the crime charged.

Palomoacted with evident bad

faithand gross inexcusable
negligence;Umipig and
Mabitad were grosslynegligent
in the performance oftheir
duties

The second element provides the different modes by which the crime
may be committed, that is, through manifest partiality, evident bad faith,
or gross inexcusable negligence. There is manifest partiality when there
is a clear, notorious, or plain inclination or predilection to favor one side or
person rather than another.57 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.58 Evident bad faith contemplates a state of mind affirmatively
operating with furtive design or with some motive of self-interest or ill will
or for ulterior purposes.59Gross 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

57
Id. at 290, citing Alvizo v. Sandiganbayan, 454 Phil. 34, 72 (2003).
58
Id., citing Sistoza v. Desierto, 437 Phil. 117, 132 (2002).
59
Id., citing Air France v. Carrascoso, et al., 124 Phil. 722, 737 (1966).
Decision 21 G.R. Nos. 171359, 171755
& 171776

but willfully and intentionally, with conscious indifference to consequences

insofar as other persons may be affected.60These three modes are distinct and
different from each other. Proof of the existence of any of these modes
would suffice.61

We sustain the Sandiganbayans finding of evident bad faith on the

part of Palomo who had no authority to effect substantial payments --
P8,910,260.00 out of the total consideration of P11,517,100.00 -- for the
lots to be purchased by NMP. The Minutes of the NMP Board meeting of
August 21, 1995, which was cited by Palomo, states:

The chairman after consulting the members of the board indicated

that the presentation was approved in principle. The chairman indicated
that Mr. Palomo is authorized to start negotiations for the acquisition of
the site in Cavite and if necessary to pay the earnest money.62

Article 1482 of the Civil Code states that: Whenever earnest money
is given in a contract of sale, it shall be considered as part of the price and as
proof of the perfection of the contract. The earnest money forms part of the
consideration only if the sale is consummated upon full payment of the
purchase price. Hence, there must first be a perfected contract of sale before
we can speak of earnest money.63

Palomo requested for the release ofdown payment in the amount of

P6,910,260.00 notwithstanding that no contract of sale had yet been
consummated, as only a contract to sell was executed by the supposed
attorney-in-fact of the vendors, Solis. As earlier mentioned, the Contract to
Sell over Lots 1731 and 1732 stipulated that the balance of the total
consideration is to be paid 15 days after receipt of the approved [e]xtra-
judicial partition of Estate, location plan, reconstitution of owners copy and
signing of [the] Deed of Sale. This clearly indicates that the parties agreed
to execute the contract of sale only after the full payment of the purchase

60
Id.
61
Soriquez v. Sandiganbayan, G.R. No. 153526, October 25, 2005, 474 SCRA 222, 229.
62
Exhibit R-1.
63
Government Service Insurance System v. Lopez, G.R. No. 165568, July 13, 2009, 592 SCRA 456, 469,
citing Serrano v. Caguiat G.R. No. 139173, February 28,2007, 517 SCRA 57, 66.
Decision 22 G.R. Nos. 171359, 171755
& 171776

price by the buyer and the corresponding submission by the seller of the
documents necessary for the transfer of registration of the lots sold. We
have held that where the vendor promises to execute a deed of absolute sale
upon the completion by the vendee of the payment of the price, the contract
is only a contract to sell. Such stipulation shows that the vendor reserved
title to the subject property until full payment of the purchase price.64

There being no perfected contract of sale, Palomo had no authority to

effect substantial payments for the second purchase. That partial payments
on the first purchase was similarly made upon a mere contract to sell, is of
no moment; it must be noted that such contract to sell (first purchase)
eventually ripened into a consummated sale and titles over Lots 1730-C and
1730-D have been actually transferred in the name of NMP. The second
purchase transaction, however, was not consummated despite the
unauthorized down payment of P6,910,260.00. Even worse, funds were
disbursed to pay for the balance despite non-receipt of the specified transfer
documents.

Evident bad faith connotes a manifest deliberate intent on the part of

the accused to do wrong or cause damage.65Mere bad faith or partiality and
negligence per se are not enough for one to be held liable under the law
since the act of bad faith or partiality must in the first place be evident or
manifest, respectively, while the negligent deed should both be gross and
inexcusable.66Negligence consists in the disregard of some duty imposed by
law; a failure to comply with some duty of care owed by one to another.67
Negligence is want of care required by the circumstances. It is a relative or
comparative, not an absolute term and its application depends upon the

64
Nabus v. Pacson, G.R. No. 161318, November 25, 2009, 605 SCRA 334, 352.
65
Reyes v. Atienza, G.R. No. 152243, September 23, 2005, 470 SCRA 670, 683.
66
Constantino v. Sandiganbayan (First Division), G.R. Nos. 140656 & 184482, September 13, 2007, 533
SCRA 205, 222, citing Sistoza v. Desierto, 437 Phil. 117, 130 (2002).
67
F.S. Tantuico, Jr., State Audit Code Philippines Annotated, First Ed., p. 529, citing Murillo v.
Mendoza, 66 Phil. 689, 699 (1938); 28 R.C.L., pp. 752, 753; Moreno; Santos v. Rustia, 90 Phil. 358,
362 (1951); and Corpus Juris, Vol. 45, Sec. 582.
Decision 23 G.R. Nos. 171359, 171755
& 171776

situation of the parties, and the degree of care and vigilance which the
circumstances reasonably impose.68

Palomos bad faith was evident not only in the disbursement of

substantial payment upon a mere contract to sell -- whereas the NMP Board
granted him express authority only to start negotiations and pay earnest
money if needed -- but also in the disbursement of P1,000,000.00 partial
balance despite non-submission by Solis of the specified transfer documents.
As correctly observed by the Sandiganbayan, Palomo failed to give a
satisfactory explanation on the matter during cross-examination, thus:

PROS. CORESIS

Q In the contract to sell which I have shown to you earlier it is stated

here that the balance is to be paid fifteen (15) days upon receipt of
the approved extra judicial partition of the estate, location plan,
reconstitution of owners copy and signing of the deed of sale, do
you confirm this?

A Yes, sir.

Q At the time that you paid the second payment which was
amounting to P3 million and part of that was for the contract to
sell, there was no deed of sale executed by Glenn B. Solis in
favor of National Maritime Polytechnic, am I correct? On
December 27 there was none?

A I cannot recall.

Q You cannot recall because there was in fact none, am I correct?

A It could be, sir.

xxxx

Q And the balance is supposed to be paid 15 days upon receipt of the

extra-judicial partition and the signing of the deed of sale, is that
correct?
69
A Yes, sir. (Emphasis supplied.)

Palomo also committed gross inexcusable negligence in failing to

protect the interest of the government in causing the release of substantial
sums to Solis despite legal infirmities in the documents presented by the said

68
Id. at 529-530, citing U.S. v. Juanillo, 23 Phil. 212, 223 (1912); Moreno.
69
Rollo (G.R. No. 171359), pp. 19-20.
Decision 24 G.R. Nos. 171359, 171755
& 171776

broker.He cannot seek exoneration by arguing that he merely followed the

stipulated terms of payment in the contract to sell. Applicable provisions of
existing laws aredeemed written and incorporated in every government
contract, hence it is the contractual stipulations which must conform to and
not contravene the law and not the other way around. By entering into a
contract that does not guarantee the transfer of ownership to the
Government, petitioner violated Sec. 449 of the Government Accounting
and Auditing Manual (GAAM) which provides:

Section 449. Purchase of land. Land purchased by agencies of

the Government shall be evidenced by a Torrens Title drawn in the name
of the Republic of the Philippines, or such other document satisfactory to
the President of the Philippines that the title is vested in the Government.

These titles and documents shall accompany the vouchers covering

the purchase of land, after which they shall be forwarded to the Records
Management and Archives Office.

The above rule requires public officers authorized to transact with

private landowners not only to ensure that lands to be purchased by
Government are covered by a Torrens title, but also that the sellers are the
registered owners or their duly authorized representatives. For otherwise,
there can be no assurance that title would be vested in the Government by
virtue of the purchase. Thus, while the provision does not require a title
already issued in the name of the Government at the time of the actual
purchase, accountable officers should, at the very least, exercise such
reasonable diligence so that the titles and documents accompanying the
vouchers are genuine and authentic, and the private parties to the contract
had the legal right to transmit ownership of the land being bought by the
Government. In accordance with sound accounting rules and practice
therefore, it is mandatory for such purchase of land by the government
agency or instrumentality to be evidenced by a Torrens title in the name of
the Government, or such other document that is satisfactory to the President
of the Philippines, to show that the title is vested in the Government.
Decision 25 G.R. Nos. 171359, 171755
& 171776

Petitioners act of disbursing funds in the absence of documents

sufficient to vest title in NMP, the government instrumentality buying the
subject lots, failed to comply with the above statutory requirement. The
authenticity of the SPAs supposedly showing the authority of the alleged
attorney-in-fact, Jimenez-Trinidad, and the latters sub-agent, Solis, had not
been properly verified. The purchase by NMP, which already made
substantial or almost full payment of the price, was evidenced only by a
contract to sell executed by Solis who was later discovered lacking authority
to do so, the SPA in favor of Jimenez-Trinidad being a fake document.

The settled rule is that, persons dealing with an assumed agent are
bound at their peril, and if they would hold the principal liable, to ascertain
not only the fact of agency but also the nature and extent of authority.70 In
this case, Palomo dealt with Solis who was a mere sub-agent of the alleged
attorney-in-fact of the registered owners, a certain Jimenez-Trinidad, under
an SPA which was notarized abroad. At the very least, therefore, Palomo
should have exercised reasonable diligence by ascertaining such fact of
agency and sub-agency, knowing that he is dealing with a mere broker and
not the registered owners themselves who are residents of a foreign country.
As noted by the Sandiganbayan, it took only a letter-query sent by the OSG
to Consul Bello to verify the authenticity of the SPA document shown by
Solis, purportedly executed by the registered owners in favor of Jimenez-
Trinidad who in turn executed another SPA in favor of Solis. This was the
prudent course for Palomo considering that in the first purchase transaction,
Umipig had already noted legal infirmities in the documents presented by
Solis. It must also be stressed that at the time Palomo transacted again with
Solis for the second purchase in April 1996, the first purchase had not yet
resulted in the transfer of title to NMP of Lots 1730-C and 1730-D which
took place only later in the year 2000. As it turned out, the SPA for
Jimenez-Trinidad presented by Solis was found to be fake. Palomo was
indeed grossly negligent in failing to verify the authority of the alleged

70
See Litonjua, Jr. v. Eternit Corporation, G.R. No. 144805, June 8, 2006, 490 SCRA 204, 224.
Decision 26 G.R. Nos. 171359, 171755
& 171776

attorney-in-fact, Jimenez-Trinidad, and simply relied on the representations

of Solis who was not directly authorized by the registered owners.

We also concur with the Sandiganbayans finding that Umipig and

Mabitad are guilty of gross inexcusable negligence in the performance of
their duties.

The GAAM provides for the basic requirements applicable to all

classes of disbursements that shall be complied with,71 to wit:

a) Certificate of Availability of Fund.Existence of lawful

appropriation, the unexpended balance of which, free from other
obligations, is sufficient to cover the expenditure, certified as
available by an accounting officer or any other official required to
accomplish the certificate.

Use of moneys appropriated solely for the specific purpose

for which appropriated, and for no other, except when authorized
by law or by a corresponding appropriating body.

b) Approval of claim or expenditure by head of office or his duly

authorized representative.

c) Documents to establish validity of claim. Submission of

documents and other evidences to establish the validity and
correctness of the claim for payment.

d) Conformity of the expenditure to existing laws and regulations.

72
e) Proper accounting treatment.

Pursuant to COA Circular No. 92-38973 dated November 3, 1992, Box

A shall be signed by the responsible Officer having direct supervision and
knowledge of the facts of the transaction.74

Umipig, as signatory to Box A of Disbursement Voucher Nos. 101-

9608-787 and 101-9612-1524 caused the release of P8,910,260 to Solis,
certifying that Expenses, Cash Advance necessary, lawful and incurred
under [his] direct supervision. By making such certification, Umipig

71
See Lucman v. Malawi, G.R. No. 159794, December 19, 2006, 511 SCRA 268, 282.
72
GOVERNMENT ACCOUNTING AND AUDITING MANUAL, Sec. 168.
73
Restating with modifications COA Circular No. 81-55, dated February 23, 1981, and prescribing the
use of the Disbursement Voucher, General Form No. 5(A).
74
Id., 2 (I).
Decision 27 G.R. Nos. 171359, 171755
& 171776

atteststo the transactions legality and regularity, which signifies that he had
checked all the supporting documents before affixing his signature. If he
had indeed exercised reasonable diligence, he should have known that
Palomo exceeded the authority granted to him by the Board, and that the
SPAs presented by Solis needed further verification as to its authenticity
since his authority to sell was given not by the registered owners themselves
but by another person (Jimenez-Trinidad) claiming to be the attorney-in-fact
of the owners.

Had Umipig made the proper inquiries, NMP would have discovered
earlier that the SPA in favor of Jimenez-Trinidad was fake and the unlawful
disbursement of the P8,910,260 would have been prevented. Such
nonchalant stance of Umipig who admitted to have simply presumed
everything to be in order in the second purchase and failed to scrutinize the
documents presented by Solis in violation of the accounting rules including
Sec. 449 of the GAAM, constitutes gross negligence. His reliance on the
earlier written reservations/objections he submitted to Palomo during the
first purchase will not excuse his negligent acts. The second purchase was a
separate and distinct transaction from the first purchase, involving different
parcels of land and registered owners. The infirmities he had already
observed in the first purchase should have made Umipig more circumspect
in giving his approval for the disbursements in the second purchase.
Additionally, the limited authority granted by the NMP Board to Palomo
should have impelled Umipig to be more prudent in the second purchase, as
it might expose the government to even greater damage or loss if the
expenditure is later proved to have no legal basis.

As for Mabitad, she signed Box Battesting that [a]dequate available

funds/budgetary allotment in the amount x x x; expenditure properly
certified; supported by documents marked (x) per checklist x x x; account
codes proper; previous cash advance liquidated/accounted for. Box B is
Decision 28 G.R. Nos. 171359, 171755
& 171776

accomplished by the Accountant or other equivalent officials in the

government-owned or controlled corporation.75

At the trial, Mabitad affirmed that her signature in Box B means that
the expenditure is certified. She however admitted having merely relied on
Umipigs certification that the transactions were legal. Mabitad further
asserted that with respect to disbursement vouchers, her responsibilities are
merely certifying that funds are available for the purpose and check if the
supporting documents which were duly certified in Box A are attached to the
voucher. But contrary to her statement suggesting that her act of signing the
disbursement voucher was ministerial, as signatory to the said document she
is not precluded from raising questions on the legality or regularity of the
transaction involved, thus:

3. Document Checklist at the Back of the Voucher

The checklist at the back of the voucher enumerates the mandatory

minimum supporting documents for the selected transactions.

It should be clear, however, that the submission of the supporting

documents enumerated under each type of transaction does not preclude
reasonable questions on the funding, legality, regularity, necessity or
economy of the expenditure or transaction.Such questions may be raised
by any of the signatories to the voucher.

The demand for additional documents or equivalents should be in

writing. A blank space is provided for additional requirements, if any, and
if authorized by any law or regulation. If the space is insufficient, separate
76
check may be used and attached to the voucher. (Emphasis supplied.)

It bears stressing that Umipig and Mabitad are accountable officers,

the nature of their accountability under the Government Auditing Code of
the Philippines (P.D. No. 1445) was described as follows:

Accountable. (a) Having responsibility or liability for cash or

other property held in trust or under some other relationship with another.
(b) [government accounting] Personally liable for improper payments;
said of a certifying or disbursing officer. (c) Requiring entry on the
books of account; said of a transaction not yet recorded, often with
reference to its timing. (d) Responsible.

75
Id., 2 (J).
76
Id., 3.
Decision 29 G.R. Nos. 171359, 171755
& 171776

Accountable officer. An officer who, by reason of the duties of

77
his office, is accountable for public funds or property. (Emphasis and
underscoring supplied.)

As such accountable officers, Umipig and Mabitad are cognizant of

the requirement in Sec. 449 of the GAAM that purchase of land shall be
evidenced by titles or such document of transfer of ownership in favor of the
government. The Court cannot uphold their own interpretation of said
provision which would require evidence of title or transfer of ownership to
Government merely for archiving and recording purposes, as the
requirement is intended to protect the interest of the government. By
approving the release of payment under disbursement vouchers supported
only by a contract to sell executed by a mere sub-agent, Umipig and Mabitag
committed gross negligence resulting in the loss of millions of pesos paid to
a bogus land broker. The Sandiganbayan therefore did not err in convicting
them under Section 3 (e) of R.A. No. 3019.

Umipig and Mabitad nevertheless tried to seek refuge in Sec. 106 of

P.D. No. 1445 or the Government Auditing Code of the Philippines, which
provides:

Section 106.Liability for acts done by direction of superior officer.

Noaccountable officer shall be relieved from liability by reason of his
having acted under the direction of a superior officer in paying out,
applying, or disposing of the funds or property with which he is
chargeable, unless prior to that act, he notified the superior officer in
writing of the illegality of the payment, application, or disposition. The
officer directing any illegal payment or disposition of the funds or
property shall be primarily liable for the loss, while the accountable officer
who fails to serve the required notice shall be secondarily liable.

But as already explained, the written reservations made by Umipig

and Mabitad were done only for the first purchase and not the second
purchase subject of this case. There was clearly no written notice to Palomo
regarding their questions on the legality of payments for the second
purchase, either in the voucher itself or in a separate letter/memorandum.
Umipigs defense that he had treated the first and second purchases as a

77
F.S. Tantuico, Jr., State Audit Code Philippines Annotated, p. 529.
Decision 30 G.R. Nos. 171359, 171755
& 171776

single transaction and thus his previous written objections still stand,
deserves scant consideration.His certification as the accountable officer
having knowledge of facts of the subject transactionis required each time a
disbursement voucher is processed. The reason is that an accountable
officer is charged with due diligence to ensure that every expenditure is
justified and followed the proper procedure.

The negligent acts of Palomo, Umipig and Mabitad thus rendered

them personally liable for the loss incurred by the Government in the failed
transaction, in accordance with Section 105 of P.D. No. 1445 which
provides that [e]very officer accountable for government funds shall be
liable for all losses resulting from the unlawful deposit, use, or application
thereof and for all losses attributable to negligence in the keeping of the
funds.

Conspiracy Proven

In Alvizo v. Sandiganbayan,78 this Court said:

Direct proof is not essential to show conspiracy. It need not be

shown that the parties actually came together and agreed in express terms
to enter into and pursue a common design. The existence of the assent of
minds which is involved in a conspiracy may be, and from the secrecy of
the crime, usually must be, inferred by the court from proof of facts and
circumstances which, taken together, apparently indicate that they are
merely parts of some complete whole. If it is proved that two or more
persons aimed by their acts towards the accomplishment of the same
unlawful object, each doing a part so that their acts, though apparently
independent, were in fact connected and cooperative, indicating a
closeness of personal association and a concurrence of sentiments, then a
conspiracy may be inferred though no actual meeting among them to
concert means is proved. Thus, the proof of conspiracy, which is
essentially hatched under cover and out of view of others than those
directly concerned, is perhaps most frequently made by evidence of a
chain of circumstances only. (Emphasis supplied.)

Although a conspiracy may be deduced from the mode and manner by

which the offense was perpetrated,it must, like the crime itself, be proven

78
G.R. Nos. 98494-98692, etc., July 17, 2003, 406 SCRA 311, 374-375.
Decision 31 G.R. Nos. 171359, 171755
& 171776

beyond reasonable doubt.79 Mere knowledge, acquiescence or approval is

not enough without a showing that the participation was intentional and with
a view of furthering a common criminal design or purpose.80

In this case, the evidence on record clearly supports the finding of

conspiracy among petitioners Umipig, Mabitad and Palomo who all
authorized the payments on the second purchase in utter disregard of the
requirement in Section 449 of the GAAM, and with gross negligence in
failing to ascertain the authority of Solis to sell the same. The damage or
injury to the government would have been prevented, had Umipig, Mabitad
and Palomo exercised reasonable diligence in transacting with Solis and
examining the supporting documents before approving the disbursements in
payment of the purchase price of Lots 1731 and 1732.Indeed, the fraudulent
transaction would not have succeeded without the cooperation of all the
petitioners whose signatures on the corresponding vouchers made possible
the release of payments to Solis despite legal infirmities in the supporting
documents he submitted.

Umipig and Mabitad deliberately disregarded the rules, the limited

authority granted by the NMP Board to Palomo, and the fact that Solis had
earlier submitted questionable documents in the first purchase. Umipig and
Mabitad cannot justify their laxity in the second purchase simply because the
first sale of Lots 1730-C and 1730-D was eventually consummated and titles
thereto had been transferred to NMP. It must be noted that NMP secured
titles to the said lots under the first purchase only in November 2000, long
after Umipig and Mabitad gave their approval for subsequent disbursements
for Lots 1731 and 1732 for which Solis submitted a fake SPA. Their
participation thus went beyond mere knowledge and acquiescence to the
illegal disbursements in the second purchase. Umipig and Mabitad even

79
Grefalde v. Sandiganbayan, G.R. Nos. 136502 & 136505, December 15, 2000, 348 SCRA 367, 389,
citing De la Pea v. Sandiganbayan, G.R. Nos. 89700-22, October 1, 1999, 316 SCRA 25, 36and
People v. Marquita, G.R. Nos. 119958-62, March 1, 2000, 327 SCRA 41, 51.
80
Id.
Decision 32 G.R. Nos. 171359, 171755
& 171776

signed as instrumental witnesses in the Contract to Sell covering Lots 1731

and 1732.

Umipig and Mabitad further authorized the release of partial balance

in the amount of P1,000,000.00 also approved by Palomo, notwithstanding
that the required transfer documents were not submitted by Solis as
stipulated in the Contract to Sell. Hence, aside from causing damage or
injury to the Government, Umipig, Palomo and Mabitad also gave
unwarranted benefits to Solis who -- assuming he had the requisite authority
from the owners to sell Lots 1731 and 1732 had no right to receive any
portion of the balance until his submission of the required transfer
documents to the buyer, NMP.

Fontanilla-Payabyab
not liable under
Sec. 3 (e) of R.A. No. 3019

As to Fontanilla-Payabyab, her signature appears on the questioned

vouchers above her name which was stamped on the vouchers together with
the statement FUND AVAILABILITY, and not in Boxes A, B or C. Such
signature, however, neither validates nor invalidates the vouchers and this
was not disputed by Mabitad who testified that Fontanilla-Payabyabs
signature as budget officer on the disbursement vouchers is not considered
part of standard operating procedure.

Although Fontanilla-Payabyab was the Head of Finance with Mabitad

as one of her subordinates, the prosecution failed to establish that her
responsibilities include reviewing her subordinates certifications in
disbursement vouchers.As Fontanilla-Payabyabs signature on the voucher
was a mere superfluity, it is unnecessary for this Court to make a
determination of negligence on her part. Her purpose in doing so, i.e., to
monitor the budget allocated and utilized/disbursed, is likewise immaterial
considering that her act of signing the voucher did not directly cause the
Decision 33 G.R. Nos. 171359, 171755
& 171776

damage or injury. Consequently, there is no basis to hold her liable under

Section 3 (e) of R.A. No. 3019.

Penalty 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.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.

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.

Civil Liability

An offense as a general rule causes two 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.81 Having caused
injury or loss to the Government by their gross inexcusable negligence and
evident bad faith, petitioners Palomo, Mabitad and Umipig are thus liable to
restitute the amount of P8,910,260 that was paid to Solis.

WHEREFORE, the Decisiondated January 4, 2006 and Resolutions

dated January 30, 2006 and March 1, 2006 of the Sandiganbayan, Fourth

81
Shafer v. Judge, RTC of Olongapo City, Br. 75, No. L-78848, November 14, 1988, 167 SCRA 386,
392.
Decision G.R. Nos. 171359, 171755
& 171776

Division in Criminal Case No. 27477 are hereby AFFIRMED with

MODIFICATION. The conviction of petitioners Benjamin A. Umipig,
Margie C. Mabitad and Renato B. Palomo under Section 3 (e) of R.A. No.
3019 is UPHELD while the conviction of petitioner Carmencita Fontanilla-
Payabyab is REVERSED as she is hereby ACQUITTED of the said
charge.

With costs against petitioners Benjamin A. Umipig in G.R. No.

171359 and Renato B. Palomo and Margie C. Mabitad in G.R. No. 171755.

Costs de ojicio in G.R. No. 171776.

SO ORDERED.

"'~
IN S. VILLA
, '-

A: JR.
Associate Justi

WE CONCUR:

ustice
Acting Chairperson

L!~~ILLO Associate Justice

J

ESTELA ~M::fs-BERNABE
Associate Justice
 I
Decision 35 G.R. Nos, 171359, 171755
& 171776

ATTESTATION

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.

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the
Division Acting 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.

ANTONIO T.b~O
Senior Associate Justice
- -J

(Per Section 12, R.A. 296,

The Judiciary Act of 1948, as amended)