In Maderazo v. People, the Supreme Court affirmed the Sandiganbayan’s decision, holding petitioners Melchor G. Maderazo and Dionesio R. Veruen, Jr. guilty of violating Section 3(e) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act. The Court found that as public officers, Maderazo and Veruen acted with evident bad faith in disbursing funds for tapping saddles that were never delivered, causing undue injury to the Local Government Unit (LGU) of Caibiran. This ruling underscores the importance of accountability in government transactions and the repercussions for public officials who abuse their positions for personal gain or through negligence.

Fabricated Saddles and Broken Trust: When Public Officials Gamble with Public Funds

The case originated from a questionable transaction in Caibiran, Biliran, where Acting Mayor Melchor G. Maderazo and Acting Municipal Accountant Dionesio R. Veruen, Jr. facilitated the disbursement of funds for 400 tapping saddles without ensuring their delivery. In January 1998, the Sangguniang Bayan authorized the mayor to enter into a negotiated contract for the improvement of the water system. Maderazo then entered into a Job Contract with Artemio Vermug for the fabrication of the tapping saddles. Shockingly, on the same day, Land Bank Check No. 21408930, amounting to P454,036.37, was issued to Vermug upon submission of incomplete and questionable documents. However, Mayor Ramirez, upon resuming his position, discovered that no tapping saddles had been delivered, prompting him to file a complaint against Maderazo, Veruen, and the SB members.

An audit revealed that only 188 pieces of tapping saddles were found, and these were delivered much later than the date of payment. This discrepancy, along with the lack of proper documentation, led to the filing of charges against the involved parties for violation of Section 3(e) of RA 3019. The Ombudsman found probable cause, leading to the indictment of Maderazo, Veruen, and several SB members. The Sandiganbayan ultimately convicted Maderazo and Veruen, finding them guilty beyond reasonable doubt of violating the Anti-Graft and Corrupt Practices Act. The central legal question was whether Maderazo and Veruen’s actions constituted a violation of Section 3(e) of RA 3019, warranting their conviction.

The Supreme Court, in its decision, emphasized the well-established principle that factual findings of the Sandiganbayan are generally conclusive, unless certain exceptions apply. These exceptions include instances where the conclusion is based on speculation, the inference is manifestly mistaken, there is grave abuse of discretion, or the judgment is based on a misapprehension of facts. In this case, the Court found that none of these exceptions were present, and therefore, upheld the Sandiganbayan’s findings. The Court reiterated the essential elements of Section 3(e) of RA 3019, which are:

(a) the accused must be a public officer discharging administrative, judicial, or official functions; (b) he must have acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and (c) his action caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage, or preference in the discharge of his functions.

The Court found that all these elements were present in the case. Maderazo and Veruen, as public officers, ensured the release of payment for the tapping saddles on the same day the Job Contract was executed, despite the fact that the saddles were not delivered. The Supreme Court highlighted the actions of Maderazo and Veruen, stating that “Maderazo processed the Request for Obligation and Allotment instead of the municipal engineer, received the amount of P160,000 on 28 January 1998, and covered up the non-existent tapping saddles by belatedly effecting the delivery of the tapping saddles, which did not even conform to the Job Contract. For his part, Veruen approved the Disbursement Voucher despite the lack of supporting documents, as found upon audit, in violation of his duties. Moreover, Maderazo and Veruen signed the glaringly incomplete and undated Inspection Report.” This established their evident bad faith, defined as a state of mind operating with furtive design, motive, or self-interest.

The Court emphasized the concept of evident bad faith, which requires a showing of a palpably and patently fraudulent purpose or ill motive. Here, the rapid disbursement of funds without ensuring the delivery of goods, coupled with the falsified documents, demonstrated such bad faith. Furthermore, the Court affirmed the finding of conspiracy between Maderazo and Veruen, noting that the crime would not have been possible without their concerted actions. Their roles in processing the disbursement voucher, approving the check, and signing the incomplete inspection report showed a common design to defraud the government.

This ruling is consistent with previous jurisprudence on Section 3(e) of RA 3019. In Lihaylihay v. People of the Philippines, the Court found petitioners guilty of evident bad faith for signing documents with glaring defects and approving “ghost” purchases. Similarly, in Alvizo v. Sandiganbayan, the Court convicted petitioners for conspiracy in the irregular preparation and approval of simulated documents for non-existent projects. These cases underscore the importance of due diligence and integrity in government transactions.

The defense presented an affidavit of desistance executed by Mayor Ramirez, the original complainant. However, the Court dismissed this, reiterating that retractions are generally unreliable and viewed with disfavor. An affidavit of desistance does not automatically lead to the dismissal of a case, especially when the evidence independently establishes the guilt of the accused. The Court emphasized that the prosecution had presented sufficient evidence to prove the guilt of Maderazo and Veruen beyond reasonable doubt, regardless of the retraction.

FAQs

What was the key issue in this case?	The key issue was whether Melchor G. Maderazo and Dionesio R. Veruen, Jr. violated Section 3(e) of Republic Act No. 3019 by disbursing funds for undelivered tapping saddles, thereby causing undue injury to the government.
What is Section 3(e) of RA 3019?	Section 3(e) of RA 3019, also known as the Anti-Graft and Corrupt Practices Act, penalizes public officers who cause undue injury to any party, including the government, or give unwarranted benefits to any private party through manifest partiality, evident bad faith, or gross inexcusable negligence.
What is “evident bad faith” in the context of RA 3019?	“Evident bad faith” refers to a palpably and patently fraudulent purpose or ill motive, implying a conscious and deliberate intent to do wrong or cause injury. It is not mere negligence or poor judgment but a deliberate act of dishonesty.
What evidence did the prosecution present against Maderazo and Veruen?	The prosecution presented evidence showing that Maderazo and Veruen disbursed funds for tapping saddles that were never delivered, processed the disbursement without proper documentation, and signed an incomplete inspection report.
What was the significance of the affidavit of desistance in this case?	The affidavit of desistance executed by Mayor Ramirez was deemed unreliable and did not affect the Court’s decision, as the prosecution had already presented sufficient evidence to prove the guilt of the accused beyond reasonable doubt.
How did the Court define “conspiracy” in this case?	The Court defined “conspiracy” as the concerted actions of Maderazo and Veruen, demonstrating a common design to defraud the government, which was evident in their roles in processing the disbursement voucher, approving the check, and signing the incomplete inspection report.
What is the penalty for violating Section 3(e) of RA 3019?	The penalty for violating Section 3(e) of RA 3019 includes imprisonment, perpetual disqualification from public office, and indemnification for the damages suffered by the injured party.
What is the role of the Sandiganbayan in cases like this?	The Sandiganbayan is a special court in the Philippines that handles cases involving public officials accused of graft and corruption, ensuring that these cases are given due attention and are resolved impartially.
Can factual findings of the Sandiganbayan be appealed to the Supreme Court?	Generally, factual findings of the Sandiganbayan are conclusive upon the Supreme Court, unless certain exceptions apply, such as when the conclusion is based on speculation or there is a grave abuse of discretion.

The Maderazo v. People case reinforces the principle that public office is a public trust, and those who violate this trust will be held accountable. The decision serves as a reminder to public officials to exercise due diligence and integrity in all government transactions, ensuring that public funds are used wisely and for their intended purposes. The Supreme Court’s ruling sends a strong message that corruption and negligence will not be tolerated, and those who engage in such practices will face the full force of the law.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Maderazo v. People, G.R. No. 209845, July 01, 2015