RESTITUTO PALMA GIL AND NESTOR PELAYO, PETITIONERS, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

In a joint decision covering Criminal Case No. 9968, Criminal
Case No. 9969, Criminal Case No. 9970 and Criminal Case No. 9971, the Sandiganbayan convicted Restituto
Palma Gil of the crime of malversation (Criminal Case
No. 9968); Restituto Palma Gil and Eusebio G. Pantillo of the crime
of technical malversation (Criminal Case No. 9969); Restituto Palma Gil and Nestor Pelayo
of the crime of falsification of public/official document (Criminal Case No.
9970); and Restituto Palma Gil of violating section
3(h) of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft
Practices Act (Criminal Case No. 9970). 
The dispositive portion of the decision reads:

“WHEREFORE, the Court finds as follows:

“(1)    The accused, Restituto Palma Gil y Basoc in
Criminal Case No. 9968, guilty beyond reasonable doubt as principal of the
crime of Malversation of Government Property,
punishable under paragraph 4 of Article 217 of the Revised Penal Code, and
there being no modifying circumstances in attendance, hereby sentences him to
suffer an indeterminate penalty ranging from twelve (12) years and one (1) day
of reclusion temporal, as minimum, to twenty (20) years of reclusion
temporal, as maximum; to restitute to the Municipality of Caraga, Davao Oriental, 9,000
board feet of yakal lumber worth P53,100.00.  In case of failure of restitution, said
accused is ordered to pay to the municipality the sum of P53,100.00,
aside from costs.  Further, the accused
is hereby ordered to suffer the penalty of perpetual special disqualification,
and to pay a fine equal to the value of the property embezzled;

“(2)    The accused, Restituto Palma Gil y Basoc and Eusebio Pantillo y Galapo, in Criminal Case No. 9969, guilty beyond reasonable
doubt as co-principals of the crime of Technical Malversation
punishable under Article 220 of the Revised Penal Code, and there being no
modifying circumstances in attendance, hereby sentences them each to ten
percent (10%) of the sum of the amount misapplied, considering that no damage
or embarrassment to the public service has resulted from such
misapplication.  Both accused are also
ordered to pay their proportionate shares of the costs.

“(3)    The accused, Restituto Palma Gil y Basoc,
Nestor Pelayo y Burgos, in Criminal Case No. 9970,
guilty beyond reasonable doubt as co-principals of the crime of Falsification
of Public/Official Documents punishable under paragraph 2 of Article 171 of the
Revised Penal Code, and there being no modifying circumstances in attendance,
hereby sentences them each to suffer an indeterminate penalty ranging from two
(2) years, four (4) months and one (1) day of prision
correctional, as minimum, to six (6) years and one (1) day of prision mayor, as maximum; and to pay a fine of P2,000.00
each, plus their proportionate shares of the costs; and

“(4)    The accused, Restituto Palma Gil y Basoc in
Criminal Case No. 9971, guilty beyond reasonable doubt as principal of the
crime of Violation of Sec. 3(h) of R.A. No. 3019, as amended, and there being
no modifying circums­tances in attendance, hereby sentences him to suffer an
indeterminate penalty ranging from three (3) years and one (1) day as minimum,
to six (6) years and one (1) day as maximum; to further suffer perpetual
disqualification from public office; and to pay the costs.

“The Tanodbayan is hereby
directed to conduct a preliminary investigation to determine the existence of a
probable cause with respect to Exhibits B, C, C-1 and 1, and to file the
necessary informations if so
warranted.

“Let copies of this Decision be
furnished the Minister of Local Government and Community Development, New
City Hall, Quezon City; the Provincial
Governor and Sangguniang Panlalawigan
of Davao Oriental, Mati, Davao Oriental; and the Sangguniang
Bayan, Caraga, Davao Oriental, for their informations
and guidance.” (Rollo – 73613, pp. 131-133)

The four informations filed by the Tanodbayan charged the above-mentioned persons, all public
officers at the time of the alleged commission of the offenses as follows:

Criminal Case No. 9968 (People v. Restituto
Palma Gil) —

“‘That on or about December 3, 1980; in the municipality of Caraga, Province of Davao
Oriental, Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, a public officer, he being th0e Municipal Mayor of said
municipality, officially received eighty (80) cubic meters of yakal logs by means of a Deed of Donation executed by
Consolidated Plywood Industries, Inc., to the Municipality of Caraga, for the construction of Lugusan,
Binogtuan, Nanaingan and Cuta bridges, of said municipality and as such, accountable
for such government property, taking advantage of his public position, with
grave abuse of confidence and in relation thereto, did then and there, wilfully, unlawfully and feloniously take, misappropriate
or embezzle or consent or through abandonment or negligence, permit any other
person to take such government property with an equivalent value in the amount
of ONE HUNDRED SEVENTY-SEVEN THOUSAND (P177,000.00) PESOS, Philippine Currency,
which he appropriated and converted to his personal use and benefit, to the
damage and prejudice of the government in the aforementioned amount.

“CONTRARY TO LAW.” (Rollo – 73613-16, p. 49)

Criminal Case No. 9969 – (People v. Restituto
Palma Gil and Eusebio
Pantillo) —

“That on or about the 3rd day of July, 1981, in the
municipality of Caraga, Davao
Oriental, Philippines and within the jurisdiction of this Honorable Court, the
above-mentioned accused, public officers, namely, Restituto
Palma Gil, a Municipal Mayor of Caraga, Davao Oriental and Eusebio G. Pantillo, a Municipal Treasurer of said municipality and as
such, taking advantage of their public positions and in relation thereto, and
without authority of law, did then and there wilfully,
unlawfully and feloniously, conspiring, confederating and helping one another
diverted and applied a public fund under their administration, which was
appropriated for the Capital Improvement Program (CIP) of the Municipality of Caraga in the fiscal year 1981, in the amount of P78,00.00
to a public use, other than that for which said fund was appropriated by law.

“CONTRARY TO LAW.” (Rollo – 73613-16, p. 50)

Criminal Case No. 9970 – (People v. Restituto
Palma Gil and Nestor Pelayo) -?

“That on or about the 8th day of July, 19, 1981, in the
Municipality of Caraga, Davao
Oriental, Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, public officers, Restituto Palma
Gil being the Municipal Mayor of Caraga, Davao Oriental, and Nestor Pelayo,
being the Municipal Secretary of said municipality, taking advantage of their
positions and in relation thereto, did then and there wilfully,
unlawfully and feloniously conspiring, confederating and helping one another
caused the preparation and issuance of a resolution of the Sangguniang
Bayan of Caraga, Davao Oriental by making it appear that the Sangguniang Bayan had prepared a
Resolution No. 47-81 approving and concurring the reversion and reappropriation of the amount of P78,000.00 which fund was
used for the Capital Improvement Program (CIP) of Caraga,
Davao Oriental when they did not in fact so
participate because in truth and in fact said SB Resolution No. 47-81 refers to
the appropriation of P1,000.00 from the Infrastructure Program of the
Municipality of Caraga and said amount was a
municipal aid to the BOA Primary School, Caraga, Davao Oriental.

“CONTRARY TO LAW.” (Rollo – 73613-16, pp. 50-51)

Criminal Case No. 9971 – (People v. Restituto
Palma Gil) —

“That on or about June to August, 1981, in the Municipality of
Caraga, Davao Oriental,
Philippines and within the jurisdiction of this Honorable Court, the
above-named accused, a public officer, he being the Municipal Mayor of Caraga, Davao Oriental, taking
advantage of his public position and in relation thereto, did then and there wilfully, unlawfully and feloniously directly or indirectly
having financial or pecuniary interest in the business contract or transaction
in connection with which he intervenes or takes part in his official capacity
as Mayor such as, in the hauling of 2,531 bags of cement and other materials
intended for various projects of the Municipality of Caraga,
Davao Oriental, by using his two (2) units of cargo
trucks charging trucking fees thereof worth in the total sum of P26,265.10
which acts is (sic) prohibited by the Constitution or any existing laws, to the
damage and prejudice of the government in the aforesaid sum of P26,265.10.

“CONTRARY TO LAW.” (Rollo – 73613-16, pp. 51-52)

By agreement of the parties, separate hearings were held subject
to the condition that the testimony of a witness called to the stand by either
the prosecution or the defense would pertain to any one or two or three or all
of the four (4) cases.

As stated earlier, the Sandiganbayan
found all the accused guilty as charged. 
The Sandiganbayan’s joint decision in these
cases is now the subject matter of these consolidated petitions filed by all
the accused.

The petitioners assign the following errors:

A

THE SANDIGANBAYAN ERRED IN CONVICTING MAYOR PALMA
GIL OF MALVERSATION IN G.R. NO. 73613 BY RELYING ON THE ALLEGED WEAKNESS OF HIS
CLAIM THAT HE SUPPLIED THE LUMBER USED TO BUILD A CUTA
BRIDGE RATHER THAN ON THE STRENGTH
OF THE PROSECUTION EVIDENCE.

B

THE SANDIGANBAYAN ERRED IN CONVICTING MAYOR PALMA
GIL AND TREASURER PANTILLO IN G.R. NO. 73614 OF TECHNICAL MALVERSATION DESPITE
ABSENCE OF EVIDENCE TO SHOW THAT INCLUSION OF PROJECTS IN THE CIP, OR CAPITAL
IMPROVEMENT PROGRAM, IS EQUIVAQLENT TO APPROPRIATING BY LAW OR ORDINANCE A
SPECIFIC PUBLIC FUND TO A SPECIFIC PUBLIC USE AS REQUIRED IN ARTICLE 220 OF THE
REVISED PENAL CODE.  IN ANY EVENT, THE
SANDIGANBAYAN OVERLOOKED THE SIGNIFICANT FACTS AND LEGAL ISSUE THAT (1) USE OF
P78,000.00 FROM THE CIP FOR OTHER MUNICIPAL PROJECTS
WAS MADE PURSUANT TO ORDINANCE AND THE CONSEQUENT DISBURSEMENTS WERE APPROVED
BY THE PROVINCIAL AUDITOR, AND (2) THAT THE CIP PROJECTS WERE EVENTUALLY
ACCOMPLISHED.

C

THE SANDIGANBAYAN ERRED IN CONVICTING MAYOR PALMA
GIL AND NESTOR PELAYO IN G.R. NO. 73615 AND 73642 OF FALSIFICATION OF
SANGGUNIANG BAYAN RESOLUTION NO. 47-81 WHEN IT OVERLOOKED MATTERS OF SUBSTANCE
IN EVALUATING THE EVIDENCE.

D

THE SANDIGANBAYAN ERRED IN CONVICTING MAYOR PALMA
GIL IN G.R. NO. 73616 OF VIOLATING R.A. 3019, SEC. 3 (H) BY NOT PROPERLY
APPRECIATING UNDISPUTED FACTS CONSISTENT WITH INNOCENCE SHOWING THAT THE
ACCUSED DID NOT PARTICIPATE IN THE CONTRACT IN QUESTION, OR SHARE IN THE
BENEFITS THEREOF CONTRARY TO ESTABLISHED DECISIONS PARTICULARLY IN LIM YHI LUYA
V. COURT OF APPEALS, 78 O.G. NO. 25, PP. 3208-3233 AND
INSTEAD RELIED ON WEAK AND INCOMPLETE CIRCUMSTANTIAL EVIDENCE.

E

THE SANDIGANBAYAN ERRED IN ALL THE CASES IN REFUSING TO CONSIDER
THAT THE PROSECUTION OF THE ACCUSED NOTWITHSTANDING THE ACCOMPLISHMENT OF
PUBLIC PROJECTS INVOLVED IN THE ABSENCE OF GAIN OR BENEFIT DERIVED BY MAYOR
PALMA GIL IN THE HAULING CONTRACT SUBJECT OF G.R. NO. 73616, WAS POLITICALLY
MOTIVATED.  (pp. 15-17, Petitioners’
Brief)

The assigned errors submitted in G.R. Nos. 73613-16 are
substantially the same as those submitted in G.R. No. 73642.

The petitions clearly indicate that the petitioners question the
conclusions of the Sandiganbayan insofar as its
appreciation of the facts is concerned.

Under Section 7 of Presidential Decree No. 1606 in relation to
Rule 45 of the Revised Rules of Court, the factual findings of the Sandiganbayan are generally binding upon this Court.  This general rule is, however, subject to
some exceptions, among them:  1) When the
conclusion is a finding grounded entirely on speculation, surmise and
conjectures; 2) the inference made is manifestly mistaken; 3) there is a grave
abuse of discretion; 4) the judgment is based on misapprehension of facts; 5)
said findings of facts are conclusions without citation of specific evidence on
which they are based and 6) the findings of fact of the Sandiganbayan
are premised on the absence of evidence on record.  (Cesar v. Sandiganbayan,
134 SCRA 105 [1985])

The petitioners contend that these cases fall under the exception
to the general rule because the Sandiganbayan’s
findings are contrary to the established facts and it has overlooked matters of
substance in the evaluation of the evidence.

G.R. No. 73613 (Criminal Case
No. 9968)

It is not disputed that 80 cubic meters of yakal
logs were donated by the Consolidated Plywood Industries, Inc. to the
municipality of Caraga as evidenced by a deed of
donation dated December 31, 1980 (Exhibit “L”); that Mayor Restituto Palma Gil by virtue of Resolution No. 122-80 of
the Sangguniang Bayan
of the municipality accepted the donation and that the logs were deposited in
the mayor’s premises.

The logs were intended “for use as bridge materials of the Lugusan, Binogtuan, Nanaingan and Cuta
Bridge” as stated in the deed
of donation.

The evidence on record shows that the donated logs were not used
in the Cuta bridge as
construction on this bridge was already completed in July 1980 before the
donation of logs for the purpose could materialize.  None of the logs were used in the Lugusan and the Binogtuan bridges
because there was no program of work on the former bridge while the latter
bridge is semi-concrete in nature.  It
was only in the repair of Nanaingan bridge wherein part of the donated logs were used.  Instead, the resulting excess lumber was used
in other municipal projects.  The
petitioners felt that no irregularities were committed in using the donated
logs on other pressing projects since according to then Governor Rabat of Davao Oriental who facilitated the donation,
the mayor “had a wide discretion in the use of the logs.” (p. 81, Rollo – G.R. No. 73642).  Thus, the excess lumber, after the completion
of repairs on Nanaingan bridge, was used in the
following municipal projects:  1)
municipal high school building; 2) mini grandstand; 3) shade house; 4) part of
the public market; and 5) 9,000 board feet were used to replace the quantity of
lumber which the mayor had earlier purchased and advanced for the construction
of the Cuta bridge, the high school building, the
shade house, and the public market.

The Sandiganbayan concedes that part of the donated logs were indeed used in the aforesaid
projects.  However, it did not give
credence to the mayor’s allegation that he had earlier advanced 9,000 board
feet for the construction of the Cuta bridge and the other municipal projects.  The court said:

“x x x
[T]he excess lumber, after the construction of Nanaingan
Bridge in 1981 was disposed of as follows: 
he took 9,000 board feet as replacement of the Lumber used in Cuta Bridge which he paid for, and the rest were used in
municipal projects like the mini grandstand, high school building, shade house
and partly in the public market.  Which means that Mayor Palma Gil must be held guilty of malversation of 9,000 board feet of yakal
lumber.  It does not matter if he
really bought the lumber used in the construction of Cuta Bridge
or not because no proof was introduced during the trial to that effect, other
than his say so (sic).  What is clear and
convincing is the testimony of prosecution witness Luis Madanlo
to the effect that in August or September, 1980, he and several others were
hired by Mayor Palma Gil to handsaw logs into lumber of which 9,000 board feet
were transported to Cuta through the Ministry of
Public Highways trucks for the construction of the Cuta Bridge.  (See t.s.n.,
July 23, 1985, pp. 8-9).

“Also clear and convincing is the testimony of prosecution
witness Juan Ferrando who swore that he sent a
written complaint to the District Forester of the Bureau of Forest Development
stationed at Lumbajon, Bagangon,
Davao Oriental, about illegal cutting of yakal timber at Sacuan, Manurigao, Caraga, during March
and April, 1980, by Luis Madanlo and another person,
these two having been hired by Mayor Palma Gil to handsaw the said logs for use
in the construction of Cuta Bridge.  The written complaint was dated October 6, 1980.  (See Exhibit FF).  This complaint was followed by a telegram
from the said witness on December 22,
1980 complaining about the inaction of the same district forester
and his men.  (See Exhibit GG).

Thus, the evidence adduced in Criminal Case No. 9968 is:  that the Cuta
Bridge was constructed in June or July, 1980 with the use of 9,000 board feet
of yakal lumber which were cut from the public
forests at Sacuan, Manurigao,
Caraga, Davao Oriental, and
that 9,000 board feet of yakal lumber were
appropriated by Mayor Palma Gil out of the donation which he received for the
municipality from the Consolidated Plywood Industries, Inc., for which he is
answerable under Article 217 of the Revised Penal Code.  Considering that the price of yakal lumber in Caraga at the
time was P5.90 per board feet, the 9,000 board feet which Mayor Palma Gil
misappropriated is P53,100.00 for which he must be
condemned under paragraph 4 of the aforesaid provision of the Revised Penal
Code.” (Rollo– 73642, pp. 106-108)

We rule that the testimonies of Luis Madanlo
and Juan Ferrando did not prove beyond reasonable
doubt the guilt of the mayor.  In fact,
their testimonies even bolster the mayor’s defense.  Thus, Madanlo’s
testimony to the effect that he was hired and paid by the mayor
to handsaw logs into lumber intended for the Cuta bridge gave credence to the mayor’s stand that he advanced
his own money to construct Cuta bridge.  This procedure is not at all unusual because
according to Teodoro Palma Gil, a former governor and
a former assemblyman of Davao Oriental, a
“municipal mayor may commence a municipal project without a previously
approved appropriation, even using his own personal funds which he reimbursed
later out of funds appropriated, subject to rules and regulations of
accounting.” (p. 93, Rollo, G.R. NO. 73642) The mayor’s testimony that before he made the replacement,
he first consulted Governor Rabat and was told to use the excess in any project
of the town was not rebutted. 
Furthermore, the mayor, a businessman was considered one of the richest
in the town and could well afford to advance his own money for municipal
projects.

As regards Ferrando’s complaints of
illegal cutting of yakal against the mayor which he
filed with the District Forester of the Bureau of Forest Development, suffice
it to state that, by Ferrando’s own admission, no
action was taken against the mayor.  Considering
the constitutional presumption of innocence accorded to the accused in criminal
cases, we assume that no action was taken in the illegal cutting case because
there was no sufficient basis for such action. 
This belies the credence given to the alleged source of the logs as
testified by Ferrando.

All these factors tend to show that the prosecution did not prove
beyond reasonable doubt the charge of malversation
against the mayor.  The mayor
satisfactorily explained that the donated logs were disposed of to construct
municipal projects.  Hence, it was
incumbent upon the prosecution to prove otherwise.  This, it failed to do.  There is absolutely no showing that the
petitioners sold the excess lumber or used it for private purposes or otherwise
profited from the same.  On the contrary,
he fully accounted for the lumber because the municipal projects where it was
used were actually constructed.

As pointed out by the petitioners, complainant Juan Ferrando himself credited the accused with having
constructed bridges and making land transportation possible between Caraga and the provincial capital of Mati,
Davao Oriental. 
When Davao Oriental was still part of Davao province, Caraga was accessible only by ferry service.  After 1967, roads and bridges had to be
started.  The Sandiganbayan
summarized the testimony on this point as follows:

“As mayor, he has constructed buildings and other
infrastructure projects for the Municipality of Caraga,
like the Cuta Bridge which was accomplished in July,
1980; the Binogtuan Bridge which was finished in
1982-83; the Nanaingan Bridge in 1981-82; the Lugusan Bridge in 1983-84; the concreting of Balante and Osmena Streets in the
town proper; the construction of a two-storey building for the municipal high
school, the mini grandstand with basketball court, the mini-shade house and the
extension of the park.  (Rollo of G.R. Nos. 73613-16, p. 95)

It is true that all that is needed to find a public officer
guilty of malversation is a failure to produce funds
or property for which he is accountable, on demand.  However, if the funds or property were
validly used for public purposes naturally they can no longer be produced.

“Article 217 of the Revised Penal Code provides that it shall
be prima facie evidence of malversation
when a public officer fails to have duly forthcoming any public funds or
property for which he is chargeable on demand by any duly authorized
officer.  That presumption of guilt is
founded on human experience and is valid. (Albores v.
Court of Appeals, 132 SCRA 604)

“In malversation, all that is
necessary to prove is that the defendant received in his possession public
funds, that he could not account for them and did not have them in his
possession and that he could not give a reasonable excuse for the disappearance
of the same.  An accountable public officer may be
convicted even if there is no direct
evidence of misappropriation and the only
evidence is that there is shortage in
his accounts which he has not been
able to explain satisfactorily.  (De Guzman v. People, 119 SCRA 337 [1982]).” (Bacasnot
v. Sandiganbayan, 155 SCRA 379, 382-383 [1987])  (Emphasis supplied)

There being a satisfactory explanation of the shortage, the
presumption of guilt disappears.

G.R. NOS. 73614, 73615, and 73642

(Criminal Cases
Nos. 9969 and 9970)

In  convicting Mayor Palma
Gil and Municipal Treasurer Eusebio G. Pantillo of the crime of technical malversation
and Mayor Palma Gil and Municipal Secretary Nestor Pelayo
of the crime of falsification of document, the Sandiganbayan
relied on the supposed several flaws in the claims of the defense which
engendered in the mind of the Court serious doubts as to the truth of the
testimonies of the witnesses.

This is incorrect.

The well-entrenched principle is that the prosecution must rely
on the strength of its evidence and not on the weakness of the defense.  Following this principle, we find, on the
contrary, that there are flaws in the evidence of the prosecution which
engender reasonable doubt in our minds as to the culpability of the
petitioners.

We next take up the falsification charge against Mayor Palma Gil
and Municipal Secretary Nestor Pelayo.

In this regard, the court relied heavily on complainant Ferrando’s testimony to the effect that he was not able to
secure from the provincial secretary a copy of Resolution 47-81, the reversion
resolution and the alleged refusal of the municipal secretary to give him a
copy of the subject Resolution.

These facts even if true are not convincing proof of the
non-existence of Resolution 47-81 which reverts P78,000.00 of Capital
Improvement Program (CIP) funds to fund new projects.  Although it is a standard operating procedure
that copies of all resolutions of the Sangguniang
Bayan must be forwarded to the Provincial
Secretary, this is not conclusive proof that copies of resolutions not found in
the custody of the Provincial Secretary are non-existent.  This is a matter of procedure taken after
the passage of the resolution by the Sangguniang
Bayan. 
The point of query must be whether or not the Sanggunian
Bayan really passed such a reversion
Resolution.

The Sangguniang Bayan was then composed of the mayor, the
vice-mayor, Sangguniang Bayan
members, the president of the association of barangay
captains and the president of the Kabataang Barangay.

Exhibit B, which is a certified true copy of Resolution No. 47-81
of the Sangguniang Bayan
of Caraga approved the recommendation of the
Municipal Development Committee embodied in the committee’s Resolution No. 1-81
to divert P78,000.00 of Community Improvement Program
(CIP) funds to other projects namely: 
mini?grandstand, shade house and part of the municipal park.  It appears that except for Randy Cosme, the president of the Kabataang
Barangay all members of the Sangguniang
Bayan were present.  The evidence also shows that all except
Vice-Mayor Bantayan admit that the revision
Resolution was taken up and passed during the regular session on July 8, 1981.

The Vice-Mayor who testified for the prosecution stated that he
came to know of the existence of the resolution reverting P78,000.00 during the
month of August, 1981, yet he did not take any action; that in the same month
municipal secretary Nestor Pelayo approached him at
his residence and requested him to sign an already prepared resolution which
appeared to have been taken up on July 8, 1981 with him (Bantayan)
as the sponsor and which pertained to the P78,000.00 reversion of municipal
funds; that he did not agree with the proposition so he refused to sign the
resolution; and that Exhibit C, a copy of a resolution appropriating P1,000.00
for the Boa Primary School is the resolution which was actually taken up and
approved on July 8, 1981 and which was numbered Resolution 47-81.

Far from making him a star witness for conviction, the statements
made by Vice-Mayor Bantayan cast doubt on his
credibility.  If he knew as early as
August 1981, the falsification of the Resolution why then did he not take
action against his political opponent? 
Why did he wait for a private citizen in the person of Ferrando to investigate the matter?  Furthermore, his statement that he was
approached by Municipal Secretary Pelayo as regards
the reversion Resolution must be totally discredited because Resolutions of the
Sangguniang Bayan
are signed by only two persons:  the secretary
who certifies to its correctness and the presiding officer who attests
thereto.  When this particular resolution
was adopted, the presiding officer was the mayor who was then present during
the session.

Pedro Benogsudan, the then municipal
development coordinator of the municipality
of Caraga
also testified that he was present during the Sangguniang
Bayan session held on July 8, 1981 but no reversion resolution was
passed.  This testimony should not be
given credence as against the positive statements of the presiding officer and
the members considering that he was not a member of the Sangguniang
Bayan. 
Moreover, Vice-Mayor Bantayan who was actually
present during the session did not confirm Benogsudan’s
presence.  On the other hand, the other
member’s of the Sangguniang Bayan
were one in saying that Benogsudan was not present
during the session.  It was explained by
the mayor that members of the Municipal Development Committee of which Benogsudan is a member may attend the session of the Sangguniang Bayan if they are
required by the mayor or if they ask permission from the mayor.  In this particular session, Benogsudan never asked permission to attend the
session.  Neither was he required to
attend the session.

Another factor which negates Benogsudan’s
credibility is the fact that he also claimed that the Municipal Development
Committee never met on July 3, 1981
and, therefore, never passed Resolution No. 1-81, which paved the way for the
enactment of the reversion Resolution. 
Significantly, even the prosecution does not believe him because no
charges for the falsification of this Resolution were filed against the members
of the committee namely, Kagawad Pedro de Guzman,
Municipal Treasurer Pantillo, the Secretary of the
Committee, Mr. Adelito Lozano and Mayor Palma Gil who
is the Chairman.  In fact, in the
complaint filed by Ferrando against the petitioners
with the Tanodbayan, he never questioned the validity
of Resolution 1-81 of the Municipal Development Committee which recommended the
reversion of P78,000.00 CIP funds to other municipal
projects.  He stated:

xxx                            xxx                               xxx

“4.     On July 3, 1981,
the Municipal Development Committee of the Municipality of Caraga
approved Resolution No. 1-81 reverting the appropriations for the CIP projects
mentioned in paragraph 3 hereof and re-appropriated the amounts as follows x x x.” (Exhibit 2, p. 2)

As regards the prosecution’s insistence that Resolution No. 47-81
refers to the appropriation of P1,000.00 municipal aid to the Boa Primary
School, and not the reversion resolution as was indicated in a copy of
Resolution No. 47-81 which Ferrando secured from the
provincial secretary, municipal secretary Pelayo
explained:  1) during the month of July,
1981, copies of the resolutions taken up in the July 8, 1981 session of the Sangguniang Bayan
were distributed to the different officers like the municipal treasurer, the
provincial auditor and the provincial secretary; 2) the assignment of the
number to resolutions of the Sangguniang Bayan is done when the minutes of the session are
transcribed by the clerk; 3) he assigned said numbers of the resolutions
previously passed; 4) that when the barangay captain
of Boa asked for a copy of the resolution appropriating P1,000.00 for his
school, he discovered that there were two (2) resolutions bearing the same
number, that is 47-81 which is the reversion resolution and the Boa resolution,
hence in order to distinguish one from the other, he added “A” to the
latter resolution and placed his initial “P” after it, but he did not
alter the contents thereof.

These two resolutions were adopted in the July 8, 1981 session of the Sangguniang
Bayan as reflected in the minutes of the
session (Exhibit 1).  Hence, the
municipal secretary’s explanations as regards the same number (47-81)
designating the two (2) resolutions appear plausible and satisfactory.  Apparently, this confusion resulting from two
resolutions having the same number became known and was taken advantage of by some
persons to file a complaint for falsification against the mayor and the
municipal secretary.

Anent the technical malversation
charge, the Sandiganbayan said:

“x x x
[With the falsified Resolution which, in effect, is void ab
initio, accused Mayor Restituto
Palma Gil, in confederation with accused treasurer, Eusebio
G. Pantillo, without authority of law, and taking
advantage of their positions, diverted and applied CIP funds of the
Municipality of Caraga in the amount of P78,000.00 to a public use, other than that for which said fund
was appropriated by law.

“The Court is satisfied that Mayor Palma Gil advanced amounts
for the construction of the mini grandstand, shade house and part of the
municipal park although the total of said amounts was not revealed.  And although the diverted amount was paid to
him to reimburse him for his expenses, we are willing to concede that the crime
he committed in confederation with the accused Eusebio
Pantillo, who knew all along that Resolution No. 1-81
of the Municipal Development Committee is non-existent, (Accused Eusebio Pantillo is a member of
the Committee) is technical malversation under the
provisions of Article 220 of the Revised Penal Code.” (Rollo
– 73642, pp. 120-121)

We reiterate our finding regarding the existence of Resolution
No. 1-81 of the Municipal Development Committee which recommended the reversion
of P78,000.00 of CIP funds earlier set aside for the construction of a guest
house and market layout and initial improvement for other projects namely – a
mini grandstand, multi­purpose shade house and park stage expansion.

Governor Rabat testified on the nature of CIP funds as
follows:  1) that what is programmed is
not always implemented as changes may be made depending on circumstances; 2)
that appropriations for one project may be re-appropriated or directed to other
projects upon the passage of the proper resolution by the Sangguniang
Bayan.

The Sangguniang Bayan through Resolution No. 47-81 approved the
recommendation to divert P78,000.00 of CIP funds to other projects.  The Sangguniang
Bayan found that the mayor actually advanced his
personal money to begin these other projects which were completed and that the
reverted CIP funds were used to reimburse the mayor for some of his expenses.

Under these circumstances, we find no legal basis to convict the
mayor and the municipal treasurer of technical malversation
under Article 220 of the Revised Penal Code.

Article 220 of the Revised Penal Code provides that for technical
malversation to exist it is necessary that public
funds or properties had been diverted to any public use other than that
provided for by law or ordinance.  In
this instant case, this requirement is not present because as explained by
Governor Rabat, CIP funds by nature are not earmarked for a particular project
but are for community improvement purposes.

G.R. NO. 73616
– CRIMINAL CASE NO. 9971

In finding the mayor guilty of violating section 3(h) of the
Anti-Graft Law (Republic Act No. 3019, as amended) the Sandiganbayan
dwelt on circumstances which convinced the court that the mayor is guilty as
charged.

The record shows that to prove the mayor’s violation of the
Anti-Graft Law, the prosecution presented the testimonies of Cayetano Iturralde and Rogelio Bacalla:

“Cayetano Iturralde
executed an affidavit, Exhibit R, the contents of which he affirmed except as
to paragraph 10 thereof which he clarified by executing a supplemental
affidavit, Exhibit R-1 before he came to Manila to testify in the instant
cases.  In Exhibit R, he declared that he
is the operator of the CMI Trucking with one (1) cargo truck under ‘TH’
denomination; that sometime in June, 1981, Mayor Palma Gil’s driver by the name
of Roger approached him with the information that the said mayor is awarding to
him a contract to haul cement and other materials intended for Caraga; that he told Roger he could not accept the contract
because he has only one (1) unit which he is using for previous contracts; that
Roger informed him that the two (2) cargo trucks of Mayor Palma Gil may be used
by him; that he agreed and Mayor Palma Gil’s two (2) cargo trucks were used to
haul lumber, G.I. corrugated iron sheets, cement, nails, round bars, M.T.,
Drums, diesel oil and hardware, wherein tracking fees in the amount of P16,577.10
were paid by the government after he issued the waybills for said cargoes; that
the payments were collected by Mayor Palma Gil through Roger who gave the
information that the Mayor needed the money for certain obligations; that there
are many more cargoes for the municipality of Caraga
which needed hauling, to which he consented provided quarterly taxes in the
amount of P800.00 be paid by the Mayor; and that more cargoes were hauled with
the use of Mayor Palma Gil’s cargo trucks wherein the sum of P9,688.00 was paid
by the Ministry of Public Highways in trucking fees which he himself collected
and deposited with the Philippine National Bank, and after deducting his travel
expenses, he issued a check for P9,617.56 payable to Monte Chavez Shell
Marketing who is a creditor of Mayor Palma Gil.

“In Exhibit R-1, Cayetano Iturralde stated that the transactions concerning the use
of Mayor Restituto Palma Gil’s cargo trucks were
negotiated by Rogelio Bacalla, alias ‘Roger’, who is
Mayor Palma Gil’s driver, and not by the mayor himself.

“Cross-examined on the two (2) affidavits which was agreed
upon by the parties as his direct testimony, Cayetano
Iturralde declared thus:  that he never had any direct contract with
Mayor Palma Gil in connection with the use of the latter’s cargo trucks; that
he never gave any amount to Mayor Palma Gil but to the gasoline station and the
receipts were handed to Roger; that during the hauling operations, he was the
one referred to as truck operator; that the check in payment of the first
hauling operation was not withdrawn by him; that Mayor Palma Gil’s trucks were
used for about three months; and that he presumed that Roger had authority to
use the trucks because previous to the hauling, he had occasion to pass by
Mayor Palma Gil’s house and he was informed by the Mayor that the trucks were
entrusted to Roger.

“Rogelio Bacalla is a driver by
occupation.  As of April, 1981, he was a
driver of an ISUZU cargo truck bearing Plate No. T-RD-904 which is one (1) of
two (2) cargo trucks of RPG Trucking owned and operated by Mayor Restituto Palma Gil. 
The driver of the other truck which is a HINO was Eliseo
Gania.  He and Eliseo Gania are paid on a
percentage basis:  25% of the net income
of the truck in case the charterer is a private
person, and 30% if the hauling is for the government.  Government hauling contracts are entered into
by Mayor Palma Gil, owner of the trucking business.  One such contract was sometime in April 23,
1981, wherein Mayor Palma Gil was authorized by the Property Custodian of the
Office of the Highway District Engineer at Mati, Davao Oriental to withdraw 1,320 bags of cement from the Bacnotan Consolidated Industries, Inc. in Davao City for use in the concreting of San Salvador
Street, Caraga, Davao
Oriental (See Exhibit 10).  In
fulfillment of the contract, he made six (6) trips to Davao City
during the month of May, 1981 carrying each time 200 bags of cement.  Gate passes, like Exhibits Y, Y-1 and Y-2
were issued by the Property Custodian, Mr. Benjamin C. Ongteco,
and at the Bacnotan Cement Industries, Inc., Delivery
Receipts and Withdrawal Slips like Exhibits Z, Z-1, Z-2 and Z-3 are signed by
him.  The government paid P1,600.00 for every load of 200 bags which was collected by
Mayor Palma Gil, owner of the cargo trucks, through his checker, Teody Selerio.

“He ceased to be a driver of Mayor Palma Gil when he received
a note (See Exhibit BB) dated May 2,
1982 ordering him to hand over the Isuzu truck to Rolly Tumandao.  In obedience to the note, he delivered the
truck to Rolly Tumandao who
signed a receipt for it on May 4, 1982
(See Exhibit AA).  And to prove that he
was a driver of Mayor Palma Gil, there is a certification addressed to him as
driver of RPG Trucking, informing him that Teodorico Selerio has been reinstated as checker (See Exhibit
CC).  (pp. 67-70, G.R. No. 73642)

The mayor was convicted for violating section 3(h) of the
Anti-Graft Law, to wit:

“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 hereby declared to be unlawful:

xxx                               xxx                            xxx

x x x“(h)
Directly or indirectly having financial or pecuniary interest in any business,
contract or transaction in connection with which he intervenes or takes part in
his official capacity, or in which he is prohibited by the Constitution or by
any law from having any interest.”

This section contemplates actual intervention in
the transaction in which the accused has financial or pecuniary interest in
order that liability may attach.  (See
Trieste, Sr. v. Sandiganbayan, 145 SCRA 508 [1986])
This does not appear clearly in the instant case.  The contract to haul cement and other
materials was given to Iturralde not by the mayor but
by Roger Bacalla. 
Nowhere in the testimony of Roger Bacalla did
he categorically state that the mayor authorized him to award the contract to Iturralde.  Iturralde, on the other hand, repeatedly stated that he
never had direct contact with the mayor as regards the contract and that it was
Bacalla who told him that the mayor awarded the
contract to him.  Iturralde
only assumed the authority of Bacalla on the belief
that the mayor entrusted his cargo truck to Bacalla.

On the other hand, petitioner Palma Gil admitted that he gave one
of his cargo trucks to Bacalla for the latter’s use
in his charcoal business on condition that Bacalla
should maintain the truck and haul, free of charge, the products of his
farm.  He testified that he used his
trucks to carry on his private business before he became mayor; and that he
sent a checker to check on Bacalla’s business
transactions and for fear that his truck may be apprehended by the TRAFCON
because said truck was only for private use, he got back the truck.  However, he denied 1) Bacalla’s
claim of having hauled the government cement from Davao
City to Caraga with the use of his trucks and with
him (the mayor) “receiving” a certain percentage from the parcels or
from the payment received by Bacalla; 2) having any
arrangement with any cement factory in Davao City or
the office of the district engineer in Mati for the
hauling of cement allotted to Caraga; and 3) having
any account with any Shell gasoline station in Davao
City.

Considering the defense testimony and Iturralde’s
testimony that he never directly had any transaction with the mayor as regards
the hauling contract plus Bacalla’s unexplained
silence on whether or not he was authorized by the mayor to transact business
with Iturralde, there arise reasonable doubts as to
the mayor’s culpability for violating section 3(h) of the Anti-Graft Law.

One important factor overlooked by the respondent court in
appraising the testimonies of prosecution and defense witnesses is the
political or partisan motivation behind the filing of charges.  While political differences may prod some
persons to reveal the commission of offenses which may, otherwise, remain
hidden, it is also true that partisan considerations may taint the testimonies
of witnesses who want to put down a political opponent at all costs.  Evidence pro and con should, therefore, be
more carefully weighed against each other. 
As pointed out by Mayor Palma Gil, he ran under the banner of the
Mindanao Alliance against the chosen KBL candidate.  The vice-mayor whom he charges with active
interest in his being convicted and who would become mayor in his stead is a
KBL stalwart.  Obviously, the petitioner
was not in the good graces of the powers that be at the time.  Ferrando, who filed
the charges as a taxpayer interested in the proper disbursement of public funds
was shown to be a delinquent taxpayer.

The petitioners state that funds for construction projects in
distant municipalities like Caraga are slow in
coming.  Therefore, local officials have to
be more resourceful and should show more initiative.  The bridges, mini-grandstand, shade house,
and stage park had to be rushed because Governor Rabat
and the whole Sangguniang Panlalawigan were going to hold a session with the Sangguniang Bayan
of Caraga immediately before the town fiesta on July 16, 1981.  In the light of the evidence in these cases,
we agree with the petitioners that the Sandiganbayan
overlooked matters of substance which engender reasonable doubt as to the guilt
of the petitioners.

WHEREFORE, the instant petitions are GRANTED.  The decision rendered by the Sandiganbayan in Criminal Cases Nos. 9968, 9969, 9970 and
9971 finding the petitioners guilty as charged is hereby SET ASIDE and
reversed.  A new judgment is rendered
ACQUITTING the petitioners of the offenses charged against them on grounds of
reasonable doubt with costs de officio.

SO ORDERED.

Fernan, C.J., Narvasa,
Melencio-Herrera, Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Cortes, Grino-Aquino,
Medialdea, and
Regalado, JJ., concur.