BUENCAMINO CRUZ, PETITIONER, VS. THE HONORABLE SANDIGANBAYAN AND THE PEOPLE OF THE PHILIPPINES, RESPONDENTS.

Buencamino Cruz versus Sandiganbayan and the People of the Philippines

The Case

This is the story of a municipal mayor, Buencamino Cruz, who was convicted by the Sandiganbayan of violating Section 3(e) of the Anti-Graft and Corrupt Practices Act, and who came to the Supreme Court asking to be acquitted. The case matters because it teaches the exact reach of Section 3(e): who may be prosecuted under it, what the Information must allege, when a public officer may hide behind the good faith of his subordinates, and why the subsequent refund of public money does not erase the crime. It is a staple for questions on graft, on the Arias doctrine, and on the penalty clause of a special law.

Procedural History

After the audit investigation, an Information for violation of Section 3(e) of the Anti-Graft Law was filed with the Sandiganbayan. On arraignment, Cruz pleaded not guilty, and trial followed. The Sandiganbayan, in a decision dated 30 January 1998, found him guilty beyond reasonable doubt and sentenced him to imprisonment of seven years and one month, as minimum, to ten years of prision mayor as maximum, with perpetual disqualification from holding public office. Cruz moved for reconsideration, and the Sandiganbayan denied it in a resolution dated 14 July 1998. Cruz then came to the Supreme Court through a petition for review on certiorari under Rule 45 of the Rules of Court, asking that the decision and the resolution be set aside.

Facts

Buencamino Cruz served as municipal mayor of Bacoor, Cavite, in 1991 until his term ended in the middle of 1992. After the May 1992 local elections, the newly proclaimed mayor, Victor Miranda, asked for an audit investigation of the municipality's 1991 to 1992 financial transactions. Acting on that request, the Commission on Audit created a Special Audit Team.

The team discovered anomalous and irregular transactions, the most serious being the purchase of construction materials covered by two sales invoices in the aggregate amount of 54,542 pesos and 56 centavos, for which payment out of municipal funds was made twice, in favor of Kelly Lumber and Construction Supply. The double payments were accomplished through two disbursement vouchers. Cruz signed both vouchers, and he encashed the two corresponding checks, both of which were payable to his order.

The audit findings were embodied in a lengthy report, and on that basis Cruz was charged. At trial, Cruz admitted signing the vouchers and encashing the checks, but claimed he was not aware of the double payment and that it was the treasurer's duty to verify deliveries and payments. Kelly Lumber later refunded the full amount of 54,542 pesos and 56 centavos to the municipality. The Sandiganbayan nonetheless convicted him, stressing that the checks for the municipality's purchases were made payable not to the supplier but to the mayor himself, and that he encashed them.

Issues

• Whether or not the Information was fatally defective because it did not allege that the accused was an officer charged with the grant of licenses or permits or other concessions.
• Whether or not there was a fatal variance between the allegation in the Information that Kelly Lumber was paid twice and the proof at trial that the excess payment went to the petitioner.
• Whether or not the petitioner may invoke the Arias doctrine and rely on the good faith of his subordinates who prepared the vouchers and checks.
• Whether or not the prosecution established evident bad faith, or in the alternative gross and inexcusable negligence, on the part of the petitioner.
• Whether or not the refund by Kelly Lumber extinguished criminal liability or negated injury to the government.
• Whether or not the penalty imposed by the Sandiganbayan was proper.

Applicable Provisions

Section 3(e) of Republic Act Number 3019, the Anti-Graft and Corrupt Practices Act, provides:

Sec. 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 declared to be unlawful: xxx xxx xxx 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.

This is the very provision under which Cruz was charged and convicted, and its last sentence is the source of his first defense.

Section 9 of Republic Act Number 3019, on penalties, provides:

SECTION 9. Penalties for violations - (a) Any public officer or private person committing any of the unlawful acts or omission enumerated in Sections 3, 4, 5 and 6 of this Act shall be punished with imprisonment for not less than six years and one month nor more than fifteen years, perpetual disqualification from public office, and confiscation or forfeiture in favor of the Government of any prohibited interest and unexplained wealth manifestly out of proportion to his salary and other lawful income.

This fixes the range of imprisonment and explains why the Court corrected the Sandiganbayan's use of the term prision mayor.

Ruling

On the first issue, the Court held that the Information was not defective. Section 3(e) applies to any public officer, without distinction or qualification, and the last sentence does not restrict it to officers charged with granting licenses and permits. The Court also noted that the Local Government Code empowers municipal mayors to issue licenses and permits, and that matters of law are deemed incorporated in the Information.

On the second issue, the Court held that there was no fatal variance. An Information need only state the ultimate facts, and evidentiary facts need not be alleged because they are matters of defense. The Court quoted its ruling in Socrates versus Sandiganbayan:

Evidentiary facts need not be alleged in the information because these are matters of defense. Informations need only state the ultimate facts; the reasons therefor could be proved during the trial.

On the third issue, the Court held that the Arias doctrine did not apply. Arias allows a head of office to rely to a reasonable extent on his subordinates, but only where there is no added reason to be suspicious. Here there was such a reason: the checks were payable to Cruz himself even as the vouchers were in the name of Kelly Lumber. That discrepancy should have alerted him and prompted him to examine the documents with circumspection.

On the fourth issue, the Court held that the finding of evident bad faith was a question of credibility for the trial court, and that in any event the offense may be committed even without bad faith, provided the negligence is both gross and inexcusable. The Court quoted Sistoza versus Desierto:

Evidently, mere 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.

On the fifth issue, the Court held that the refund did not erase the injury, because public money was used by someone else for about two years without authority and without interest, and because refund is not among the causes that totally extinguish criminal liability under Article 89 of the Revised Penal Code.

On the sixth issue, the Court held that the penalty was correct in severity but wrongly labeled. Republic Act Number 3019 is a special law that does not provide for the penalty of prision mayor, so the Court modified the decision to state the prison term plainly, from seven years and one month, as minimum, to ten years, as maximum.

Doctrine

A prosecution under Section 3(e) of the Anti-Graft Law lies against any public officer, regardless of whether he is charged with the grant of licenses, permits, or other concessions; the last sentence of the provision is merely clarificatory. An Information need only allege the ultimate facts constituting the offense, and evidentiary details may be proved at trial. Under the Arias doctrine, a head of office may rely to a reasonable extent on the good faith of his subordinates, but that reliance fails where an exceptional circumstance puts him on guard. A violation of Section 3(e) may be committed through gross and inexcusable negligence even absent evident bad faith. The refund of the amount does not extinguish criminal liability nor negate the injury to the government. Finally, where a special law prescribes its own penalty, the technical names of penalties under the Revised Penal Code, such as prision mayor, do not apply.

Disposition

The petition was denied and the Sandiganbayan's decision and resolution were affirmed, with the modification that Cruz was sentenced to a prison term of seven years and one month, as minimum, to ten years, as maximum, with perpetual disqualification from holding public office.

Remember This

Remember the single line: the checks were payable to the mayor while the vouchers were in the supplier's name, and that discrepancy is the added reason that defeats the Arias defense. Examiners use this case for the elements of Section 3(e), the Arias doctrine and its exception, and the rule that a refund does not extinguish criminal liability.