LOCAL GOVERNMENT CODE
La Viña DIGEST #117
Arias v. SB
GR. No. 81563 & GR. No. 82512 December 19, 1989
Amado C. Arias & Cresencio D. Data petitioners vs. The
SANDIGANBAYAN, respondents.
Petition to SC
GUTIERREZ, JR., J:
Summary of Facts: Arias (District Engineer) and Data (Chief Auditor), officials
of the Province of Rizal were found guilty by the Sandiganbayan (SB) together
with their subordinates and a private citizen (seller of land) for “having caused
injury to & damage to the Republic of the Philippines” in connection with
scandalous overpricing of land purchased by the Government as right of way
for a floodway project, by allowing & approving the illegal disbursement &
expenditure of public funds. The decision of SB insofar as Arias & Data are
concerned was overturned by the SC based on the reasoning of reliance of
good faith on subordinates.
Facts
Petitioners Arias Arias (District Engineer) and Data (Chief Auditor),
were found guilty by SB for violating sec. 3 (e) of the Anti-Graft Practices Act:
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:
xxxxxxxxx
(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
Arias and Data were convicted by SB violating the above provision
together with their 3 subordinates & 1 private citizen Gutierrez (seller of land)
(6 silang lahat na convicted).
The background of the story dates back in year 1975, when the
Bureau of Public Works planned the “Mangahan Floodway Project” to ease the
perennial floods in some parts of Marikina and Pasig, Metro Manila. This
floodway project will traverse certain portions of Ortigas, where the land sold
by Gutierrez to the Govt (subject matter in this case) was located.
LOCGO Arias v. SB
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2nd Sem, AY 09-10, Prof.
Arias v. SB
The implementation of this floodway project was entrusted to the
Pasig Engineering District headed by Data (District Engineer). In this
regard, Data formed a committee headed by Fernando (Supervising Civil
Engr) as over-all in-charge (Fernando did not face trial and remains at-large)
and 3 other subordinates. The subordinates were Mendoza & Hucom, for
acquisition and improvements, and Jose the Instrument man for surveys
(Mendoza & Jose are 2 other convicted co-accused). This committee was
tasked to inform affected lot owners affected by the floodway project and to
receive and process payments.
Among the lot owners affected was a 19, 004 sq.m. riceland
(subject matter in this case) owned by Agleham, which was previously
owned by parents of Gutierrez (private citizen & convicted co-accused)
from whom Agleham acquired his property. Gutierrez was one of those who
filed an application for payment, holding with her a Special Power of Attorney
allegedly executed by Agleham. In her application, she submitted fake and
falsified documents i.e. Tax Declaration Certificate purporting that the
land was residential with fair market value of P80/sq m.
These documents were submitted to 2 other convicted co-accused --
examined by Arcaya (Admin. Officer) while Cruz (Senior Engineer)
initialed the documents & prepared a Deed of Sale. Cruz later transmitted
them to District Engineer Data. Data and Gutierrez both later signed the Deed
of Sale. These documents were sent to Director Anolin of Bureau of Public
Works, who recommended approval of the Deed of Sale and later returned to
Data’s office. Hence the sale was registered and a TCT was issued in the name
of the Govt.
For this sale, a General Voucher was prepared, for the amount of
P1.5M plus with certifications of Data and his 3 subordinates (Fernando ,Cruz,
and one accountant). This general voucher and other supporting documents
were pre-audited and approved for payment by Arias (Chief Auditor),
petioner and convicted co-accused. Arias then later issued 16 PNB checks
for total sum of P1.5M plus for Gutierrez as payment of property in 1978.
In 1979, an investigation was conducted by the Ministry of National
Defense on this alleged gross overpricing of Agleham’s property. Several
Government employees denied signing the certification and gave sworn
statements. One of them is Oco, an Assistant Mun. Assessor who provided
the genuine Tax Declaration Certificate, showing among others that the
subject property is actually a riceland (but classified as residential) and
overpriced at P80/sq.m. (instead of appraised value of P5/sq.m.) --
showing that the officials of the District Engineering Office falsified them . The
investigators also found that the Deed of Sale was approved by Arias for
payment of P1.5, who didn’t question the altered amount (snowflaked and
amount superimposed) nor checked the veracity of the fake documents.
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 LOCAL GOVERNMENT CODE
Arias v. SB
The case was on trial for 6 years, and SB found 2 petitioners ARIAS &
DATA, their 3 subordinates (CRUZ, JOSE, & ARCAYA) & private citizen
GUTIERREZ guilty of violation of Anti-Graft and Corrupt Practices Act.
Among the 6 convicted accused, only the 2 petitioners, Arias (District
Engineer) and Data (Chief Auditor) appealed.
ISSUE: WON SB petitioners ARIAS and DATA are guilty as co-conspirators in
the conspiracy to cause injury to the Government through the irregular
disbursement and expenditure of public funds. NO
RATIO: No.
1. Under the Sandiganbayan's decision, a department secretary, bureau
chief, commission chairman, agency head, and all chief auditors would
be equally culpable for every crime arising from disbursements which
they have approved. The department head or chief auditor would
be guilty of conspiracy simply because he was the last of a long
line of officials and employees who acted upon or affixed their
signatures to a transaction. Guilt must be premised on a more
knowing, personal, and deliberate participation of each
individual who is charged with others as part of a conspiracy.
2. The Sandiganbayan, without any clear factual basis for doing so
has assumed that the P5.00 per square meter value fixed by the
assessor in the tax declarations was the correct market value of the
Mangahan property and if the Government purchased the land for
P80.00 a square meter, it follows that it must have suffered undue
injury. In the instant case, the assessor's low evaluation, in the fixing of which the
landowner had no participation, was used for a purpose infinitely more weighty than
mere expropriation of land. It forms the basis for a criminal conviction by the SB.
The Court is not prepared to say that P80.00 to P500.00 a
square meter for land in Pasig in 1978 would be a fair evaluation. The
value must be determined in eminent domain proceedings by a
competent court. We are certain, however, that it cannot be P5.00 a
square meter. Hence, the decision, insofar as it says that the "correct"
valuation is P5.00 per square meter and on that basis convicted that
petitioners of causing undue injury, damage, and prejudice to the
Government because of gross overpricing, is grounded on shaky
foundations.
There can be no overpricing for purposes of a criminal
conviction where no proof adduced during orderly proceedings
has been presented and accepted.
3. BASIC REASON OF SC: We would be setting a bad precedent if a
head of office plagued by all too common problems-dishonest
or negligent subordinates, overwork, multiple assignments or
positions, or plain incompetence is suddenly swept into a
LOCGO Arias v. SB
V http://naomisktichen.multiply.com
2nd Sem, AY 09-10, Prof. La Viña DIGEST #117
Arias v. SB
conspiracy conviction simply because he did not personally
examine every single detail, painstakingly trace every step
from inception, and investigate the motives of every person
involved in a transaction before affixing, his signature as the
final approving authority.
There appears to be no question from the records that
documents used in the negotiated sale were falsified. A key tax
declaration had a typewritten number instead of being machine-
numbered. The registration stampmark was antedated and the land
reclassified as residential instead of ricefield. But were the
petitioners guilty of conspiracy in the falsification and the
subsequent charge of causing undue in injury and damage to
the Government?
We can, in retrospect, argue that Arias should have probed
records, inspected documents, received procedures, and questioned
persons. It is doubtful if any auditor for a fairly sized office
could personally do all these things in all vouchers presented
for his signature. The Court would be asking for the impossible.
All heads of offices have to rely to a reasonable extent 'on their
subordinates and on the good faith of those prepare bids,
purchase supplies, or enter into negotiations. If a department
secretary entertains important visitors, the auditor is not ordinarily
expected to call the restaurant about the amount of the bill, question
each guest whether he was present at the luncheon, inquire whether
the correct amount of food was served and otherwise personally look
into the reimbursement voucher's accuracy, propriety, and sufficiency.
There has to be some added reason why he should examine each
voucher in such detail. Any executive head of even small
government agencies or commissions can attest to the volume
of papers that must be signed. There are hundreds of document
, letters and supporting paper that routinely pass through his
hands. The number in bigger offices or departments is even
more appalling.
There should be other grounds than the mere signature or
approval appearing on a voucher to sustain a conspiracy charge and
conviction.
ARIAS’ PARTICIPATION: Arias joined the Pasig office on July 19, 1978. The
negotiations for the purchase of the property started in 1977. The deed of sale
was executed on April 20, 1978. Title was transferred to the Republic on June
8, 1978. In other words, the transaction had already been
consummated before his arrival. Should the big amount of P1,520,320.00
have caused him to investigate . gate the smallest detains of the transaction?
Yes, if the land was really worth only P5.00 a square meter. However, if
land in Pasig was already worth P80.00 a square meter at the time, no
warning bell of intuition would have sounded an inner alarm. Land along
Ortigas Avenue on the way to Pasig is now worth P20,000.00 to P30,000.00 a
square meter.
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 LOCAL GOVERNMENT CODE 2nd Sem, AY 09-10, Prof. La Viña DIGEST #117
Arias v. SB Arias v. SB

DATA’S PARTICIPATION: The committee he formed determined the

authenticity of the documents presented to them for processing and on the
basis thereof prepared the corresponding deed of sale; thereafter, the
committee submitted the deed of sale together with the supporting documents
to petitioner Data for signing; on the basis of the supporting certified
documents which appeared regular and complete on their face, petitioner Data,
as head of the office and the signing authority at that level, merely signed but
did not approve the deed of sale as the approval thereof was the prerogative of
the Secretary of Public Works for its final approval.

HELD: SB decision SET ASIDE insofar as it convicts and sentences petitioners

Arias & Data. They are both acquitted on grounds of reasonable doubt.
Inadequacy of evidence is not sufficient to warrant a conviction.

DISSENTING OPINION OF GRINO-AQUINO: Conspiracy of Silence and

Inaction - The petitioner's partiality for Agleham/Gutierrez may be inferred
from their having deliberately closed their eyes to the defects and irregularities
of the transaction in his favor and their seeming neglect, if not deliberate
omission, to check, the authenticity of the documents presented to them for
approval. Since partiality is a mental state or predilection, in the absence of
direct evidence, it may be proved by the attendant circumstance instances.

LOCGO Arias v. SB
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and sells Chocolates
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