749 PHIL. 886
MENDOZA, J.:
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:The Sandiganbayan found Valencerina, a high-ranking officer of the Government Service Insurance System (GSIS), guilty of giving unwarranted benefits to Ecobel Land Incorporated (Ecobel) on account of his participation in the unjustified issuance of GSIS Surety Bond GIF No. 029132 (subject bond) covering the amount of Ten Million US Dollars (US$10,000,000.00).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.
30 March 1998In another certification, dated January 14, 1999, it was made to appear that the bond was a genuine, valid and binding obligation of GSIS, to wit:
To Whom It May Concern:
Re: GSIS G(16) GIF Bond No. 029132 Bond Amount: US 10,000,000 Issuing Date: 11 March 1998 Maturing Date: 11 March 2000 Bond Principal: Ecobel Land Incorporated Project Bonded: 26-Storey Commercial/Residential Condominium Ecobel Tower Building
This is to advise that the above-captioned surety bond may be redeemed following a default by the Bond Principal under the procedures set out below (the “DRAWING CONDITIONS”):Upon receipt of the above documentation via courier, GSIS will confirm the default by the Bond Principal and will make full payment under the surety bond within ten (10) New York and London Banking days.
- presentation of original surety bond to GSIS at its office in either Manila or London; together with
- presentation of demand for payment stating non-payment in full or in part by the Bond Principal; and
- notification of assignment to GSIS of US Dollar loan obligations of the Bond Principal
(Sgd.)
ALEX M. VALENCERINA
Cc: SVP A. Mallari
xxx.
14 January 1999Eventually, accused Estela J. Edralin (Edralin), as a representative of Ecobel, signed on February 4, 1999 a Term Loan Agreement with Bear, Stearns International, Ltd. (BSIL). The following month, Ecobel made a drawdown from the loan in the amount of US$9,307,000.00.
To Whom It May Concern:
Re: GSIS G(16) GIF Bond No. 029132 Bond Amount: US 10,000,000 Issuing Date: 11 March 1998 Maturing Date: 11 March 2000 Bond Principal: Ecobel Land Incorporated Project Bonded: 26-Storey Commercial/Residential Condominium Ecobel Tower Building
This is to advise that the captioned surety bond is genuine, authentic, valid and binding obligation of GSIS, and may be transferred to Bear, Sterns (sic) International Ltd. and any of its assignees and Aon Financial Products, Inc. and any of its assignees within the period commencing at the date above. GSIS has no counterclaim, defense or right of set-off with respect to the surety bond provided that DRAWING CONDITIONS have been satisfied.
We confirm that any such transfer requires only written or facsimile notification to GSIS by the then current obligee and confirmation or approval from GSIS is not required.
(Sgd.)
ALEX M. VALENCERINA
Cc: SVP J. Navarette
xxx.
That on or about March 11, 1998, or sometime prior or subsequent thereto, in Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the abovenamed accused ALEX M. VALENCERINA, being then the Vice-President, Technical Services Group (TSG) Marketing and Support Services, General Insurance Group (GIG) of the Government Service Insurance System (GSIS), and therefore a high-ranking official, FERNANDO U. CAMPAÑA, Vice-President for International Operations (IO), London Representative Office (LRO), General Insurance Group, GSIS, and therefore also a high-ranking official, AMALIO A. MALLARI, then Senior Vice President of the General Insurance Group (GIG), GSIS and Member of the GSIS-GIG Investment Committee, and likewise a high ranking official and LETICIA G. BERNARDO, then Department Manager III of the Suretyship Department of the GSIS, and Chairman of the GSIS Underwriting Committee, Bond Reinsurance Treaty, likewise a high-ranking official, while performing their respective official functions and taking advantage of the same and/or using such official offices and functions, conspiring and confederating with private parties JOSEPHINE EDRALIN BORIGHT and ESTELA J. EDRALIN, Incorporators of, and who acted as Chairperson at different periods, of Escobel Land Incorporated, did then and there wilfully, unlawfully and criminally, with evident bad faith and manifest partiality, participate, or contribute to, the release or issuance of Surety Bond GIF NO. 029132 in the amount of Ten Million US Dollars (US$ 10,000,000.00), with Escobel Land, Incorporated then chaired and represented by Josephine Edralin Boright, as the Principal, and Philippine Veterans Bank (PVB) as the supposed Obligee, notwithstanding the legal infirmities and irregularities, as provided by GSIS laws, guidelines, and policies, that attended its release or issuance, which accused public officials are duty-bound to know and therefore comply, viz: (1) Absence of counter-bond prior to issuance as underwriting requirement to protect the interest of GSIS; 2) Absence of sufficient collateral as underwriting safety requirement, as in fact TCT NO. 227727 had an existing encumbrance; 3) Non-payment of the premium prior to issuance and approval of the Surety Bond as a mandatory legal and safety requirement; (4) Issuance of Surety Bond without the prior approval of the GSIS Board of Trustees required for high-risk bonds regardless of the amount; 5) Absence of a Loan Agreement between the bond principal Ecobel Land Incorporated and the supposed Obligee, Philippine Veterans Bank (PVB); 6) Issuance of the said Surety Bond without prior approval from the Central Bank being a foreign-denominated bond; 7) Non-verification of the collateral/s submitted to ensure non-exposure to risks; AND 8) Insufficient and highly irregular evaluation of the bond application and its supporting documents, or of the character, capacity and capital of the applicant, Ecobel Land Incorporated, and subsequently, or almost a year after the issuance of said Surety Bond, it was discovered that one of two titles submitted as supposed collateral, or TCT No. 66289, was spurious, which discovery came after an acknowledgment was made relative to the supposed premium payment of Ecobel Land Incorporated, which premium payment was made almost a year after the issuance of the Surety Bond, and despite being advised of the cancellation of said Surety Bond, Ecobel Land Incorporated, then already represented by Estela J. Edralin, with the assistance of herein accused public officials, was able to obtain an actual drawdown of Ten Million US Dollars (US $10,000,000.00) from Bear and Stearns International Ltd., and subsequent thereto, despite knowledge of the cancellation of the Surety Bond and return or disregard of the premium payment earlier made, Fernando U. Campaña of the GSIS London Representative Office, received from Estela J. Edralin of Escobel Land Incorporated, the premium payment previously disregarded at the GSIS Manila Office, without the authority or official duty to do so, or even the consent of GSIS, and despite knowledge that Surety Bond No. 029132 was issued with PVB as Obligee and not Bears and Stearns International, Ltd., thereby affording unwarranted benefit, advantage or preference to Ecobel Land Incorporated and/or herein private accused, resulting [in] extreme prejudice to the interest of the government and to exposure to injury in the amount of the actual drawdown of Ten Million US Dollars (US $10,000,000.00)The People, through the Office of the Ombudsman, claimed that all the accused caused the Government injury and/or gave unwarranted benefits to Ecobel when they participated in the issuance of the subject surety bond, despite the obvious legal infirmities and irregularities which attended the same.
CONTRARY TO LAW.
1) | Absence of counter-bond prior to issuance as underwriting requirement to protect the interest of GSIS; |
2) | Absence of sufficient collateral as underwriting safety requirement, as in fact TCT NO. 227727 had an existing encumbrance; |
3) | Non-payment of the premium prior to issuance and approval of the Surety Bond as a mandatory and legal requirement; |
4) | Issuance of the Surety Bond without the prior approval of the GSIS Board of Trustees required for high-risk bonds regardless of the amount; |
5) | Absence of a loan agreement between the bond principal Ecobel and the supposed obligee, Philippine Veterans Bank (PVB); |
6) | Issuance of the saidsSurety bond without prior approval from the Central Bank being a foreign-denominated bond; |
7) | Non-verification of the collateral/s submitted to ensure non-exposure to risks; |
8) | Insufficient and highly irregular evaluation of the bond application and its supporting documents, or of the character, capacity and capital of the applicant, Ecobel Land Incorporated; and |
9) | TCT No. 66289, being one of the collaterals, was found to be spurious. |
IN LIGHT OF ALL THE FOREGOING, the Court hereby renders judgment as follows:Valencerina and Mallari separately moved for reconsideration, but their motions were subsequently denied by the Sandiganbayan in its March 1, 2013 Resolution.
1. Accused ALEX M. VALENCERINA and AMALIO A. MALLARI are found GUILTY beyond reasonable doubt of violation of Section 3 (e) of RA 3019 and, pursuant to Section 9 thereof, are hereby sentenced to suffer the indeterminate penalty of imprisonment of six (6) years and one (1) month as minimum, up to ten (10) years as maximum, with perpetual disqualification from holding office;
2. Accused LETICIA G. BERNARDO and ESTELA J. EDRALIN are hereby ACQUITTED for failure of the prosecution to prove their guilt beyond reasonable doubt.
Considering that the act or omission from which the civil liability might arise did not exist, no civil liability may be assessed against accused Bernardo and Edralin.
Let the hold-departure order against accused Bernardo and Edralin by reason of this case be lifted and set aside, and their bonds released, subject to the usual accounting and auditing procedure.
Let a warrant for the arrest of accused Josephine Edralin Boright be issued. Pending her arrest, let this case be archived.
SO ORDERED.[7]
GROUNDSValencerina insists that the complained act of giving unwarranted benefit, preference or advantage in favor of Ecobel with manifest impartiality, evident bad faith or gross negligence was not proved beyond reasonable doubt. He posits that the pieces of evidence, both documentary and testimonial, supporting the Sandiganbayan’s judgment of conviction, were hearsay and incompetent, thus, without probative value and that the Sandiganbayan relied merely on the prosecution’s “xerox” exhibits (referring to the two certifications), which were not properly identified and authenticated, and, therefore, were not the best evidence to prove his guilt. He adds that the prosecution witnesses had no personal knowledge of the contents and due execution of the documents which were relied upon by the Sandiganbayan, including the incidents, transactions and events on which they testified on.
- The Sandiganbayan (First Division) has decided questions of substance not heretofore determined by the Supreme Court; or has decided in a way probably not in accord with law or with applicable decisions of the Supreme Court; or has so far departed from the accepted and usual course of judicial proceedings (Rules of Court, Rule 45, Section 6), as shown by the grounds invoked and discussed hereunder,
- The conclusions, findings and judgment of the Sandiganbayan (First Division) are speculative, surmises or conjectures; or based on misapprehension of facts; or the inferences made are manifestly mistaken, absurd or impossible and rendered in grave abuse of discretion or are beyond the issues of the case at bench (Office of the President, et al. vs. Calimxto R. Cataquiz, G.R. No. 183445, Sept. 14, 2011),
- The Court a quo admitted and relied on xerox copies of documentary exhibits, which were not authenticated by the persons who executed them, and whose originals were not presented in court by respondent, who failed to provide any valid reason for not presenting them, in flagrant violation of the best evidence and other rules of evidence.
- The court a quo gravely erred in considering and relying on the hearsay testimonies of witnesses who had no personal knowledge of the contents or due execution and genuineness of the respondent’s xerox documentary exhibits or of the facts in issue that they testified on.
- The records are bereft of any evidence, and the court a quo did not find any, that Bear Stearns International, Ltd., granted a loan of US $10 million to Ecobel Land, Inc. in London.
5.1. There being no such loan, as corpus delicti of the second mode of committing the offense, there was no crime of graft or corrupt practice under Section 3(e) of RA 3019, by petitioner giving Ecobel unwarranted benefit, preference or advantage, with manifest partiality, evident bad faith or gross inexcusable negligence, 5.2. There being no evidence that Estela J. Edralin obtained loan from Bear Stearns, the court a quo grievously erred when It convicted petitioner for facilitating the inexistent loan with the use of his alleged two (2) certifications, Exhibits “D-14” dated March 30, 1998 and “D-17,” dated January 14, 1999, that Estela J. Edralin did not receive as unwarranted benefit, preference or advantage.
- Even assuming in arguendo that petitioner’s alleged two certifications, exhibits “D-14” dated March 30, 1998 and “D-17,” dated January 14, 1999, are admissible evidence, their issuance alone did not constitute the crime of graft or corrupt practice committed by way of the second mode of violating Section 3(e) of RA 3019.
6.1. The certifications, which are not even attempted or frustrated acts to commit the crime, were not valid documents to transfer GSIS Surety Bond No. G (16) GIF 029132 to Bear Stearns International, Ltd., 6.2. Absent any evidence that the drawing conditions provided in the two (2) certifications, Exhibits “D-14” and “D-17”, were fulfilled or complied therewith, GSIS Surety Bond No. G (16) GIF 29132 was not validly transferred to Bear Stearns International, Ltd.
- Petitioner’s Memorandum dated January 27, 1998, Exhibit “10-Valencerina,” was done in the performance of his duty as Vice-President for Marketing and Support Services, following the approval in principle of Ecobel’s bond application by the Underwriting Committee headed by Leticia G. Bernardo, who was acquitted by the court a quo, and not because he was already “resigned to Ecobel’s side,”
- It was PGM Cesar Sarino, not petitioner, who “advanced” Ecobel’s bond application to INCOM in performance of duties and not because petitioner was “already resigned to Ecobel side” to give Ecobel unwarranted benefit, preference or advantage, who was the lone bond applicant.
- The court a quo violated petitioner’s constitutional rights to be informed of the charge against him and to due processes of law by finding him guilty of violating Section 3 (E) of RA 3019 under the second mode, that is, for allegedly giving Ecobel unwarranted benefit, preference or advantage, with manifest partiality considering that the Amended Information accused him of committing the offense under the first mode, which is for participating and contributing to the issuance of the questioned surety bond and causing undue injury to the government.
9.1. Petitioner was not validly accused or charged for violation of Section 3 of RA 3019. 9.2. Violation of petitioner’s constitutional rights to be informed of the accusation against him and to due process of law.
- The court a quo erred when it assumed jurisdiction over, in violation of the doctrine of territoriality of criminal laws, and considered incidents and term loan agreement relative to the loan for US 10 Million Dollars that Ecobel Land, Inc. would have obtained in London from Bear Stearns International, Ltd.
- Respondent failed to prove beyond reasonable doubt all elements of the crime of giving to Ecobel unwarranted benefit, preference or advantage, with manifest partiality, evident bad faith or gross inexcusable negligence, which is punishable under Section 3 (e) of RA 3019.[8]
Being the Vice-President for Marketing and Support Services of GSIS, Valencerina was no doubt a public officer, and the alleged acts complained of were done while he was in office.
(1) the offender is a public officer; (2) the act was done in the discharge of the public officer’s official, administrative or judicial functions; (3) the act was done through manifest partiality, evident bad faith, or gross inexcusable negligence; and (4) the public officer caused any undue injury to any party, including the Government, or gave any unwarranted benefits, advantage or preference.
[As defined], “[p]artiality” is synonymous with “bias” which “excites a disposition to see and report matters as they are wished for rather than as they are.” “Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud.” “Gross negligence has been so defined as negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but wilfully and intentionally with a conscious indifference to consequences in so far as other persons may be affected. It is the omission of that care which even inattentive and thoughtless men never fail to take on their own property.” [18]In this case, Valencerina clearly extended, with evident bad faith, undue advantage to Ecobel in the process of issuing and negotiating the subject bond. His act of endorsing Ecobel’s application to the PGM despite his knowledge that the obligee of the loan was not PVB but a foreign lender, clearly shows his disregard for the policy of GSIS requiring the existence of governmental interest in the transaction. In the observation of the GSIS audit team, as it appeared in a report before the Sandiganbayan, PVB was merely used to show that GSIS has an insurable interest in the loan. The truth, however, is that BSIL was the funder and obligee of the credit sought to be guaranteed by the bond.
In addition, Valencerina’s declaration in the same memorandum to the PGM that the bond was fully secured by collaterals, strengthens the conclusion that he was in bad faith. As correctly observed by the Sandiganbayan, the collaterals presented by Ecobel appeared to be questionable. TCT No. 227727 had an existing mortgage while TCT No. 66289 was found to be spurious since it was different from what was on file with the Registry of Deeds of Lipa City. These circumstances clearly show that Valencerina failed to thoroughly review Ecobel’s compliance with GSIS policies before endorsing the application to the PGM. Thus, his endorsement of Ecobel’s application was nothing but a conscious doing of a wrong and a breach of his duty to uphold not only the interest of the GSIS but also of the Republic. It is clearly an indication of bad faith on his part as he should have realized that his position required the utmost prudence knowing that to guarantee a high-risk loan was, as the name implied, highly risky on the part of GSIS and could very well affect the entire membership of the system.
Q And on that basis you have made that statement in this memorandum and you are telling that to the Court? A Yes, I did, sir. Q You are also alleged to have knowledge even at that time that the Ecobel who applied for payment guarantee bond would have foreign funder, do you confirm that? A Yes, sir, I was informed by Mr. Mallari about it, sir. Q You know for a fact that an official of the GSIS, one requirement in the issuance of surety bond, you would see to it that there is a government interest in the transaction, do you remember that? A Yes, sir. Q And yet in spite of your knowledge that eventually this bond would have a foreign funder, you made the endorsement to the President and General manager of the GSIS? A My information from Mr. Mallari is that the funds would have to be coursed to the Veterans Bank since the Philippine Veterans Bank is a government bank, it carries with it insurable interest of the government.[19]
30 March 1998It appears now that without these letters, BSIL would not have approved and granted the loan to Ecobel. It was even affirmed therein the validity of the obligation of GSIS under the subject bond, despite Valencerina knowing at that time that the bond had not been secured by adequate collaterals, and that the premium payment for reinsurance had not been paid. Records show that the said premium was paid only on February 26, 1999, or almost a year after the issuance of the bond. This would necessarily render the bond void because an insurance policy is valid only if the actual premium is paid.[20]
To Whom It May Concern:This is to advise that the above-captioned surety bond may be redeemed following a default by the Bond Principal under the procedures set out below (the “DRAWING CONDITIONS”):
Re: GSIS G(16) GIF Bond No. 029132 Bond Amount: US 10,000,000 Issuing Date: 11 March 1998 Maturing Date: 11 March 2000 Bond Principal: Ecobel Land Incorporated Project Bonded: 26-Storey Commercial/Residential Condominium Ecobel Tower Building Upon receipt of the above documentation via courier, GSIS will confirm the default by the Bond Principal and will make full payment under the surety bond within ten (1) New York and London Banking days.
- presentation of original surety bond to GSIS at its office in either Manila or London; together with
- presentation of demand for payment stating non-payment in full or in part by the Bond Principal; and
- notification of assignment to GSIS of US Dollar loan obligations of the Bond Principal
(Sgd.)
ALEX M. VALENCERINA
Cc: SVP A. Mallarixxx xxx xxx
14 January 1999
To Whom It May Concern:
Re: GSIS G(16) GIF Bond No. 029132 Bond Amount: US 10,000,000 Issuing Date: 11 March 1998 Maturing Date: 11 March 2000 Bond Principal: Ecobel Land Incorporated Project Bonded: 26-Storey Commercial/Residential Condominium Ecobel Tower Building
This is to advise that the captioned surety bond is genuine, authentic, valid and binding obligation of GSIS, and may be transferred to Bear, Sterns (sic) International Ltd. and any of its assignees and Aon Financial Products, Inc. and any of its assignees within the period commencing at the date above. GSIS has no counterclaim, defense or right of set-off with respect to the surety bond provided that DRAWING CONDITIONS have been satisfied.
We confirm that any such transfer requires only written or facsimile notification to GSIS by the then current oblige and confirmation or approval from GSIS is not required.
(Sgd.)
ALEX M. VALENCERINA
Cc: SVP J. Navarette
xxx.
By testifying as to the contents of the certifications he himself signed, Valencerina, in effect, admitted that the said documents exist and that the same were duly executed by him. He himself built upon the said documents to draw his defense that the certifications were mere statements of facts and procedures. He did not contradict their existence but even went further to elaborate as to the reasons behind their issuance. As such, the Court cannot give merit to his position that, being mere photocopies, the certifications could not be relied on in determining his culpability. Conversely, the testimonies of the prosecution witnesses, assuming they had no personal knowledge of the contents and due execution of the said documents, would now be a superfluity as he himself used the certifications to forward his defense.
Q The prosecution offered a document purportedly a Certification by one Alex Valencerina dated March 30, 1998 which the prosecution marked as Exhibit D-14 which I am now showing you. Could you please go over this document and inform the Honorable Court if you are aware of such a document? A Yes, sir, I am aware of this document, sir. Q Now, this is a certification prepared by one Alex Valencerina. Are you the same Alex Valencerina who prepared this particular document? A Yes, sir. It is me, sir. Q Why did you prepare this document? A This document was prepared upon the request of Senior Vice-President Amalio Mallari to simply draft a statement of facts and procedures in relation to the bond itself, Ecobel bond. Q We noticed, Mr. Valencerina, that this document was addressed to “To Whom It May Concern”. Could you inform the Honorable Court why you addressed it to “To whom it may concern”? A It is actually a generic statement, simply a statement of facts and procedures and it is basically a GSIS policy, for information only. Q And what are the facts and procedures that you are referring to which you mentioned in this particular memorandum? A These are actually referring to the drawing conditions which actually refer to the event in which case there is a default in the bond. So are the documents that must be presented by the obligee. Q Are you referring to this bond which is mentioned in this memorandum, Bond No. 092132, issued on March 11, 1998 and maturing on 11 March 2000? A Yes, sir, I am referring to that particular transaction, sir. Q The prosecution also marked Exhibit “D-17”. It was testified to by a witness and offered in evidence by the prosecution which is a memorandum by one Alex M. Valencerina dated 14 January 1999. Could you please go over this memorandum and inform the Honorable Court if you are aware of that memorandum? A Yes, sir, I am aware of this letter. Q Why did you prepare this memorandum? A Again, this letter or this memorandum actually is requested upon by my Senior Vice-President Amalio Mallari, sir. Q Again, this is addressed only “To whom it amy concern” and not to anybody in particular. Why did you address it only to “To whom it may concern”? A Again, it is a statement of facts and procedures which practically govern the policies of the GSIS, sir.[24] (Emphases supplied)