VIRGINIA M. GUADINES, Petitioner, vs. SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, Respondents.

G.R. No. 164891               June 6, 2011

VIRGINIA M. GUADINES, Petitioner,
vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, Respondents.

D E C I S I O N

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision¹ promulgated on April 30, 2004 and Resolution² dated August 20, 2004 of the Sandiganbayan convicting petitioner of violation of Section 3(e) of Republic Act (R.A.) No. 3019 or the Anti-Graft and Corrupt Practices Act.

The factual antecedents:

On August 25, 1992, the Provincial Treasurer of Quezon directed the Municipal Treasurer of Polillo, Quezon, Naime Ayuma, to conduct a public bidding for the materials to be used in the repair and construction of Navotas Bridge along Polillo-Burdeos provincial road at Barangay Sibulan. As a result of the bidding held on September 8, 1992, the contract was awarded to V.M. Guadines Construction Supply owned and managed by petitioner Virginia M. Guadines. On October 19, 1992, Purchaser Order No. 2019 was issued by the Provincial Government of Quezon for construction materials in the total price of P83,228.00. On November 13, 1992, the materials consisting of lumber (Macaasim hardwood cut by chainsaw) were stockpiled along the road about five meters away from the Navotas Bridge, and received by Bernie H. Azaula (Azaula).³ Azaula was then Barangay Chairman of Poblacion, Polillo and Member of the Sangguniang Bayan being the President of the Association of Barangay Captains of Polillo.⁴

On November 20, 1992, a team of Department of Environment and Natural Resources (DENR) officials/forest rangers from the Community and Environment Resources (CENR) Polillo Station led by Officer-in-Charge Herminio M. Salvosa confiscated seventy-three (73) pieces of Macaasim lumber (4,172 board feet valued at P41,172.00) which were stockpiled alongside the Polillo-Burdeos road at Barangay Sibulan, approximately five meters away from the Navotas Bridge. They measured the confiscated lumber using Marking Hatchet No. 1742 in which the number 1742 was 1/6 of an inch thick so that when you strike the lumber, the number 1742 will appear on the lumber. They also marked the lumber with the words "DENR CONFISCATED" using white paint. These forest products were confiscated in favor of the government pending submission of certain required documents. No person or entity was apprehended as owner/possessor of the lumber. Since Azaula volunteered to take custody as a public official in the locality, the CENR decided to turn over the seized lumber to him and required him to sign the Seizure Receipt.⁵

On December 14, 1992, the Sangguniang Bayan of Polillo acting upon the petition of some 460 individuals, and after debating on whether to still wait for the DENR officials to ascertain the identity of the contractor involved in the illegally cut timber or to proceed with the construction of the bridge using the confiscated lumber, resolved to formally request the DENR Regional Director to donate the seized lumber so it can be used for the delayed repair and construction of the Navotas Bridge. The logs remained stockpiled near the said bridge, apparently abandoned by its owner.⁶ Later however, the Sanggunian passed a resolution (Kapasiyahan Blg. 24, t. 1993) requesting the Department of Public Works and Highways (DPWH) through Provincial Engineer Abelardo Abrigo to send their personnel to work on the repair and construction of the Navotas Bridge in the earliest possible time.⁷ Azaula was among those members of the Sanggunian who had opposed the proposal to request the DENR Regional Director for the donation of the confiscated lumber, insisting that the contractor (petitioner) be paid for said materials.⁸

In his letter dated January 25, 1993 addressed to Engr. Bert Nierva of the Provincial Engineer’s Office (PEO), Polillo Mayor Rosendo H. Escara requested for assistance in the immediate construction of the Navotas Bridge, citing the approval of Kapasiyahan Blg. 24, t. 1993 by the Sangguniang Bayan. On January 28, 1993, Polillo Municipal Treasurer Naime Ayuma prepared the Inspection Report stating that the materials specified under Purchase Order No. 2019 were delivered by the contractor (V.M. Guadines Construction Supply) and "[r]eceived in good order and condition." The Inspection Report was signed by both Ayuma and Mayor Escara.⁹

By February 5, 1993, the repair and construction of Navotas Bridge was finished. Upon the request of Azaula, Disbursement Voucher 001-9302-957 was prepared, authorizing the Provincial Treasurer to pay V.M. Guadines Construction Supply the total amount of P83,228.00. On February 18, 1993, petitioner received from the Provincial Treasurer’s Office the amount of P83,228.00 as payment for the lumber and other materials she delivered for the repair and construction of Navotas Bridge.¹⁰

In a Memorandum dated February 26, 1993, CENR Polillo Station OIC Salvosa reported to the CENRO of Real, Quezon that despite warnings from forest rangers, workers headed by Engr. Nierva of the PEO utilized the confiscated lumber in the construction of Navotas Bridge. Salvosa further informed the CENRO that while Engr. Nierva claimed to be acting on official instructions from the Provincial Governor, they were not furnished any copy of such directive or instruction.¹¹ Accordingly, Juan dela Cruz, CENRO of Real, Quezon, prepared a memorandum-report and forwarded the same to the DENR Region IV Executive Director with a request for a lawyer to be sent to their office to assist in the preparation and filing of appropriate charges against the custodian who is the Barangay Chairman of Poblacion, Polillo, Quezon. In a letter dated March 10, 1993, CENRO dela Cruz asked Azaula to explain why he should not be charged with estafa and malversation for disposing the confiscated lumber without legal authority or clearance from the DENR Secretary.¹²

On May 5, 1993, the Provincial Auditor of Quezon directed Edgardo A. Mendoza, State Auditor II, to conduct an investigation regarding the payment made for confiscated lumber used in the repair and construction of Navotas Bridge. After inspecting the site and inventory of the lumber in the newly constructed bridge together with the Municipal Engineer, Mendoza confirmed that these materials were the same ones confiscated by the CENR personnel, differing only in length of the logs used. Mendoza concluded that there was no justification for the government to pay the purchase price of the lumber allegedly delivered by the contractor. Thus, in his final report submitted to the Provincial Auditor, Mendoza recommended that V.M. Guadines Construction be ordered to refund the amount paid by the provincial government and that administrative and criminal actions be filed against said contractor, as well as the public officials who participated in defrauding the government in the amount of P83,228.00 and for violation of the Anti-Graft and Corrupt Practices Act.¹³

On November 15, 1994, a Notice of Disallowance was issued by the Commission on Audit (COA), Lucena City for the amount of P70,924.00. From the original amount of P83,228.00, they deducted the value of the common materials used such as nails and "kawad." The difference represents the value of the confiscated lumber actually used in the construction of the bridge.¹⁴

Subsequently, a complaint was filed before the Office of the Ombudsman by Sangguniang Bayan member May Verzo-Estuita against petitioner, Ayuma, Azaula and Escara for violation of the Anti-Graft and Corrupt Practices Act (OMB 0-93-1388). On April 22, 1994, a Resolution¹⁵ was issued by the Ombudsman recommending the filing of appropriate information against all the respondents for violation of Section 3(e) of R.A. No. 3019. The Ombudsman found to be without merit respondents’ denial that the lumber used in the construction of Navotas Bridge were the same lumber earlier confiscated by the CENR field personnel, noting that Azaula took cognizance of the said materials during the deliberations in the Sangguniang Bayan. Respondents were thus held liable for causing undue injury to the provincial government which was made to pay the amount of P83,228.00 for the confiscated lumber.

The Information charging petitioner, Azaula, Escara and Ayuma with violation of Section 3(e) of R.A. No. 3019 (Criminal Case No. 20878) reads:

That in or about February of 1993, or immediately prior or subsequent thereto, in Polillo, Quezon, and within the jurisdiction of this Honorable Court, accused Bernie H. Azaula, Rosendo N. Escara, Namie V. Ayuma, being the Barangay Captain, Municipal Mayor and Municipal Treasurer, respectively, of Polillo, Quezon, in the exercise of their administrative and/or official functions, with evident bad faith, conspiring and confederating with accused Virginia M. Guadinez, doing business under the V.M. Guadinez Construction Supply, did then and there wi[l]lfully and unlawfully cause undue injury and/or damage to the province of Quezon, by using in the construction of the Navotas Bridge in Sibulan, Polillo, Quezon, confiscated lumber consisting of 73 pieces with a volume of 4,172 board feet, valued at P11,172.00, more or less, and make it appear in a Disbursement Voucher, Delivery Receipt No. 0063, and Inspection Report dated January 28, 1993, that the lumber used in the construction of the Navotas Bridge were purchased from the V.M. Guadinez Construction Supply for P83,228.00, thus enabling accused Virginia Guadinez to receive the said purchase price, to the damage and prejudice of the Province of Quezon, in the aforementioned amount.

CONTRARY TO LAW.¹⁶

The aforenamed respondents filed motions for reconsideration and re-investigation with the Ombudsman. In his Order dated January 19, 1995, the Ombudsman recommended that the prosecution of petitioner, Azaula and Escara be continued while the complaint against Ayuma be dropped for insufficiency of evidence. Consequently, Ayuma was ordered excluded from the Information in Criminal Case No. 20878.¹⁷

After trial, the Sandiganbayan rendered its decision convicting petitioner, Escara and Azaula of the crime charged, as follows:

WHEREFORE, in view of all the foregoing, this Court finds accused BERNIE H. AZAULA, ROSENDO N. ESCARA AND VIRGINIA M. GUADINES GUILTY beyond reasonable doubt of violation of Section 3 (e) of R.A. No. 3019, and hereby sentences each of them to suffer the indeterminate penalty of imprisonment of six (6) years and one (1) month, as minimum, to ten (10) years, as maximum. They are also ordered to pay, jointly and severally, the costs of this suit.

Accused Guadines, having unlawfully received the amount of P70,924.00, representing payment for the confiscated lumber, is hereby ordered to return the said amount to the Province of Quezon.

SO ORDERED.¹⁸

In their motion for reconsideration,¹⁹ petitioner and Azaula maintained that the lumber delivered by V.M. Guadines Construction Supply were not the same lumber confiscated by the CENR. They argued that (1) the confiscated lumber does not match the specified size, quality and quantity of the materials needed for the bridge repair/construction project; (2) petitioner purchased the logs from third persons there being no sawmills in the locality, and it is but proper that she be paid for the materials she delivered; and (3) since the municipalities of Polillo and Burdeos have benefited from the repair and construction of the Navotas Bridge, the allegation that the Province of Quezon suffered damage and prejudice is erroneous. As to the Sandiganbayan’s reliance on the statements she made during the Sangguniang Bayan proceedings on December 14, 1992, petitioner vehemently denied making those statements and contended that to give them probative value would violate the rule on res inter alios acta. Petitioner further asserted that she acted in good faith, as in fact no Sangguniang Bayan member interposed an objection to the payment made in her favor.

In its August 20, 2004 Resolution, the Sandiganbayan denied the motions for reconsideration filed by petitioner, Azaula and Escara. The Sandiganbayan noted that petitioner herself admitted in her direct testimony that the lumber she delivered were the ones used in the repair and construction of the Navotas Bridge. Even if the confiscated lumber were undersized, the pieces of lumber could have been bolted together to conform to the required length of 22 feet long. Testimonial evidence also clearly showed that the confiscated lumber were used in the construction of the bridge. As to petitioner’s contention that no damage or injury was caused to the provincial government, the Sandiganbayan held that after confiscation by the DENR, the subject lumber became the property of the National Government and consequently the Municipality of Polillo had no right to utilize the same without authority from the DENR. And since the lumber had already been confiscated, petitioner had no right to receive payment; hence, the payment made in her favor by the Province of Quezon did not produce any legal effect, pursuant to Article 1240²⁰ of the Civil Code. Petitioner’s denial of the statements she made before the Sanggunian was likewise found to be without merit. The certified copy of the minutes taken during the December 14, 1992 session of the Sanggunian being a public document and an official record of the proceedings, is considered prima facie evidence of the facts stated therein. The presumption of regularity and authenticity of public official records had not been overcome and rebutted by the petitioner, there being no competent evidence to support her denial. Further, there was no violation of the res inter alios acta rule because the declarations and admissions made by the accused (petitioner) are being used against her and not against any other individual or third persons. Finally, petitioner’s claim of good faith was rejected by the Sandiganbayan stating that she clearly intentionally took advantage of the government when, despite her knowledge that the lumber delivered to the Province of Quezon was confiscated, she still accepted and received the purchase price paid by the provincial government.²¹

Hence, this petition alleging that the Sandiganbayan gravely abused its discretion in finding that she acted in conspiracy with Azaula and Escara in defrauding the provincial government under their contract for purchase of construction materials.

Petitioner reiterates her argument that the materials she delivered on November 13, 1992 were not the same lumber confiscated by the DENR field personnel on November 20, 1992. The delivered lumber having been left unguarded and unprotected along the national highway, some pieces thereof could have been stolen, which explains why there was a smaller number (73) of confiscated lumber than the actual quantity (99) delivered. In any case, petitioner asserts that the matter was not anymore her concern after she fulfilled her contractual obligation of delivering the specified quantity and quality of lumber. The fact that Ayuma had certified in his Inspection Report that the delivered lumber were received in good order and condition would only mean that there was no "CONFISCATED" marking found thereon. Ayuma need not have foreknowledge of the DENR confiscation to confirm such marking in the course of her physical inspection of the lumber delivered by petitioner.

On the allegation of conspiracy, petitioner contends that evidence is wanting to support the prosecution case against her. A finding of guilt must not be based on speculation, such as the lumber she delivered were the ones confiscated later by the DENR. Indeed, the lumber left along the highway exposed it to possibilities which include substitution. Even if the materials used in the repair and construction of Navotas Bridge bore the DENR marking "CONFISCATED", it cannot automatically mean that those were the same lumber delivered by petitioner, considering that Ayuma had inspected these pieces of lumber and did not see those markings. Moreover, what happened to the lumber after its delivery was no longer within the control of petitioner. Her only responsibility is to deliver the goods stated in the contract she entered with the local government. After receipt of the lumber in good order and condition by the provincial government through its officials which include Ayuma as the Municipal Treasurer, petitioner had already fulfilled her contractual obligation. It was but natural and proper that petitioner be compensated for the lumber she purchased from third persons. The provincial government suffered no damage or injury since the repair and construction of the Navotas Bridge was completed. And assuming for the sake of argument that her lumber were actually confiscated by the DENR, petitioner contends that what should have been filed against her was a case for violation of the Forestry Code and not the Anti-Graft and Corrupt Practices Act.

The petition has no merit.

Well-entrenched is the rule that factual findings of the Sandiganbayan are conclusive upon this Court except where: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts and the findings of fact of the Sandiganbayan are premised on the absence of evidence and are contradicted by the evidence on record.²² Petitioner failed to establish any of the foregoing exceptional circumstances.

On the contrary, the evidence on record clearly showed petitioner’s participation in the anomalous disbursement of government funds in favor of a private contractor for lumber which have been validly seized by CENR forest rangers. The inspection of deliveries and acceptance by the provincial government through Ayuma and Escara who certified in the Inspection Report that lumber delivered by petitioner were found to be "in good order and condition" relates only to the physical aspect and compliance with specifications as to quality, quantity and size of the materials. Said certification did not state whether the lumber delivered by petitioner have been cut or gathered in accordance with existing forestry laws, rules and regulations. Petitioner could have readily substantiated her defense by producing documents, such as permits and Certificate of Timber/Lumber Origin, allegedly secured by persons from whom she bought the lumber, or presenting as witnesses those workers who supposedly cut the trees and hauled the logs. But none of these were presented at the trial. Hence, the prosecution evidence showing the lumber delivered by petitioner to have been illegally cut and gathered, stands unrebutted.

Petitioner was charged with violation of Section 3(e) of R.A. No. 3019, which provides:

SEC. 3. Corrupt practices of public officers. -- In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

x x x x

(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. (Emphasis supplied.)

The essential elements of this crime are: (1) the accused are public officers or private persons charged in conspiracy with them; (2) said public officers commit the prohibited acts during the performance of their official duties or in relation to their public position; (3) they caused undue injury to any party, whether the government or a private party; (4) such injury is caused by giving unwarranted benefits, advantage or preference to such parties; and (5) the public officers have acted with manifest partiality, evident bad faith or gross inexcusable negligence.²³

We explained the foregoing elements in Santos v. People²⁴:

As may be noted, what contextually is punishable is the act of causing any undue injury to any party, or the giving to any private party of unwarranted benefits, advantage or preference in the discharge of the public officer’s functions. In Uy vs. Sandiganbayan, and again in Santiago vs. Garchitorena, the Court has made it abundantly clear that the use of the disjunctive word "or" connotes that either act of (a) "causing any undue injury to any party, including the Government"; and (b) "giving any private party any unwarranted benefits, advantage or preference," qualifies as a violation of Section 3(e) of R.A. No. 3019, as amended. This is not to say, however, that each mode constitutes a distinct offense but that an accused may be proceeded against under either or both modes.

x x x x

The term "undue injury" in the context of Section 3 (e) of the Anti-Graft and Corrupt Practices Act punishing the act of "causing undue injury to any party," has a meaning akin to that civil law concept of "actual damage." The Court said so in Llorente vs. Sandiganbayan, thus:

In jurisprudence, "undue injury" is consistently interpreted as "actual damage." Undue has been defined as "more than necessary, not proper, [or] illegal;" and injury as "any wrong or damage done to another, either in his person, rights, reputation or property [; that is, the] invasion of any legally protected interest of another." Actual damage, in the context of these definitions, is akin to that in civil law. (Emphasis supplied.)

By accepting payment for delivery of lumber found to be without supporting documents as required by law, petitioner caused undue injury or damage to the provincial government which had no obligation to pay for confiscated lumber considered as government property. In fact, it is only the DENR Secretary or his representative who can dispose of such confiscated lumber in accordance with forestry laws and regulations, pursuant to Section 68-A of Presidential Decree (P.D.) No. 705 (otherwise known as the Forestry Code of the Philippines), as amended by Executive Order No. 277, which provides:

SEC. 68-A. Administrative Authority of the Department Head or His Duly Authorized Representative to Order Confiscation. - In all cases of violations of this Code or other forest laws[,] rules and regulations, the Department Head or his duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water[,] or air in the commission of the offense and to dispose of the same in accordance with pertinent laws, regulations or policies on the matter."

Petitioner’s contention that she should have been instead prosecuted for illegal cutting, gathering and possession of timber or other forest products under Section 68 of P.D. No. 705 ignores the fact that she never came out to claim ownership of the seized lumber until her appearance before the Sangguniang Bayan wherein she pleaded for consideration in the delayed bridge construction project after the DENR confiscated the lumber she delivered. Except for her bare denial, petitioner failed to refute the correctness of the statements she made as reflected in the official minutes of the Sanggunian session held on December 14, 1992, duly certified by the Municipal Secretary and signed by the Sanggunian Members present, to wit:

Ang sumunod na binigyang pahintulot upang magbigay ng kanyang pahayag ay si Gng. Virginia Guadines, ang nagtatapat na Contractor ng tulay ng Barangay Sibulan, o tulay Nabotas ayon sa pagkilala ng DPWH. Ayon sa kanya siya bilang contractor ng nabanggit na proyekto ay nalulungkot sa pagkaabala nito dahilan nga sa nangyaring paghuli ng mga tauhan ng Forestry sa mga kahoy na gagamitin sa tulay. Nalaman din niya na bunga nito ay nagkakaroon ng parang pagpafaction-faction sa Sangguniang Bayan. Nais niyang ipagunita na ito ay isang public knowledge na siya ang nanalong bidder sa ginanap na public bidding na nasabing proyekto at nalalaman ng lahat na siya ay hindi makakapag-provide ng kahoy na gagamitin sa nasabing tulay. Nang mga panahong iyon nga ay kailangang magtungo siya sa Lucban, Quezon para sa pagkoku[m]pleto ng mga kailangang papeles sa nasabing kontrata, kaya’t siya ay nakisuyo ng taong mangangasiwa sa pagkuha ng kahoy. Ngayon na nangyari ang hindi inaasahan ay hinihiling niya na tayo ay magtulungan na maipatapos ang tulay na ito alang-alang sa kapakanan ng mga taong magdaraan sa nasabing tulay oras na ito ay matapos.

Nalalaman niya na siya ay mayroong pagkukulang, nguni’t hinihiling niya sa Sangguniang Bayan na bigyan na siya ng konsiderasyon sa pangyayaring ito , total ay pinapayagan na pala ngayon ang pagputol ng kahoy kung gagamitin sa mga government projects. Ang nabanggit na kautusan ay noon pa palang Nobyembre 1992 ipinalabas, kaya nga lamang ay hindi agad niya nalaman. Siya naman ay taos[-]puso ang pagtulong sa pamahalaang bayan ng Polillo at basta at nakabalita siya ng proyektong maaaring ang makikinabang ay ang ating bayan ay kanyang ginagawa kahi’t minsan nga ay nagdudukot bulsa siya para maiparating ito sa ating bayan.²⁵

We find no grave abuse of discretion on the part of the Sandiganbayan when it cited the pertinent portions of the minutes of the Sangguniang Bayan session of December 14, 1992, as evidence of petitioner’s statements concerning the lumber she delivered which were confiscated by the CENR for lack of requisite legal documents. These statements revealed that petitioner was fully aware of the confiscation of her lumber stockpiled along the Polillo-Burdeos provincial road, after she had delivered the same. We have previously underscored the importance of the minutes of formal proceedings when the court is confronted with conflicting claims of parties as to the truth and accuracy of the matters taken up therein. In De los Reyes v. Sandiganbayan, Third Division,²⁶ this Court held:

Thus, the Court accords full recognition to the minutes as the official repository of what actually transpires in every proceeding. It has happened that the minutes may be corrected to reflect the true account of a proceeding, thus giving the Court more reason to accord them great weight for such subsequent corrections, if any, are made precisely to preserve the accuracy of the records. In light of the conflicting claims of the parties in the case at bar, the Court, without resorting to the minutes, will encounter difficulty in resolving the dispute at hand.²⁷

Apart from petitioner’s own statements, the Sandiganbayan’s finding that it was petitioner’s lumber which were later confiscated by CENR forest rangers and used in the bridge repair and construction, was satisfactorily established by the prosecution’s documentary and testimonial evidence. As part of their official duties and following standard procedure, they prepared the Confiscation Report and Seizure Receipt, and testified in court detailing the incident. Two other witnesses corroborated their declaration that the confiscated lumber were actually used in the repair and construction of the Navotas Bridge.

Johnny V. Abanica, a Construction Maintenance employee of the PEO, testified that sometime in February 1993, his supervisor, Engr. Felixberto Nierva, informed him that they were going to construct the Navotas Bridge. Upon arriving at the site, he noticed that the lumber they were going to use was marked "confiscated." He then reminded Nierva that they might get into trouble because of it but Engr. Nierva told him that he already have an agreement with Azaula. Thereafter, he and his companions started demolishing the old bridge. He executed a Sinumpaang Salaysay on September 25, 1993 in connection with the confiscated lumber.²⁸

Salvosa who led the CENR team who seized the lumber, likewise testified that in February 1993, upon being verbally informed by their field personnel, Forest Rangers Odelon Azul, Arnel F. Simon and Edwin Hernandez, he went to the construction site. He saw for himself that the lumber used in the new bridge were marked with "DENR CONFISCATED" and hatchet number 1742. Thereafter, he prepared a Memorandum-Report addressed to the CENR of Real, Quezon informing the latter of utilization of confiscated lumber without prior approval of their office and despite repeated warnings from their forest rangers, which report was endorsed to the DENR Regional Director.²⁹

Dela Cruz, the CENRO of Real, Quezon, also testified that after receiving the Memorandum-Report of Salvosa, he informed the Regional Executive Director, DENR-Region IV about the matter with the recommendation that a legal officer be sent to Polillo to assist them in filing the proper complaint. He also wrote Azaula requiring him to explain but since Azaula did not respond to his letter, the case was referred to their legal division.³⁰

Lastly, COA Auditor Mendoza, who, along with the Municipal Engineer of Polillo, was tasked to investigate the purchase of the materials used in the repair and construction of the Navotas Bridge after the completion of the project, also confirmed that the lumber used bore the white paint marking "DENR" and contained hatchet numbers when they inspected the same from under the new wooden bridge. He prepared three reports explaining his findings. He then recommended to the Provincial Auditor that the money paid to the supplier be refunded to the government and that administrative and criminal actions be instituted against the supplier and the concerned public officials. Consequently, the COA disallowed the payment of the amount of P70,924.00, deducting from the original amount of P83,228.00 the amount paid for common materials such as kawad and nails. The lumber used in the new bridge consisted of 3,172 board feet while the volume of the confiscated lumber was around 4,000 board feet.³¹

In support of her claim that the lumber she delivered were not those confiscated by the CENR personnel, petitioner presented as witness PO2 Reny I. Marasigan of the PNP Polillo Station. Marasigan testified that he issued a certification dated June 9, 2000 stating that the lumber confiscated near the Navotas Bridge in 1993 were deposited for safekeeping and are still intact at the back of their building. These rotting lumber on the ground were photographed by petitioner.³² However, Marasigan failed to present proper documents evidencing the official transfer of custody of the seized lumber by the CENRO to their headquarters. In fact, Marasigan signed the Confiscation Report and Seizure Receipt as part of the apprehending team³³ while it was Azaula who signed as the "Receiving Officer."³⁴ Moreover, prosecution witnesses Salvosa and his forest rangers, as well as Abanica and Mendoza, all categorically declared that the lumber confiscated near the Navotas Bridge on November 20, 1992 were used in the repair and construction of the bridge.

As to petitioner’s contention that the subsequent confiscation of the lumber she delivered, even if true, was no longer her concern because she had already fulfilled her contractual undertaking to provide the lumber for the bridge repair and construction, the same is untenable.

Basic is the rule that provisions of existing laws and regulations are read into and form an integral part of contracts, moreso in the case of government contracts. Verily, all contracts, including Government contracts, are subject to the police power of the State. Being an inherent attribute of sovereignty, such power is deemed incorporated into the laws of the land, which are part of all contracts, thereby qualifying the obligations arising therefrom.³⁵ Thus, it is an implied condition in the subject contract for the procurement of materials needed in the repair and construction of the Navotas Bridge that petitioner as private contractor would comply with pertinent forestry laws and regulations on the cutting and gathering of the lumber she undertook to supply the provincial government.

Petitioner’s actual knowledge of the absence of supporting legal documents for the lumber she contracted to deliver to the provincial government -- which resulted in its confiscation by the CENR personnel -- belies her claim of good faith in receiving the payment for the said lumber.1âwphi1

When the defendants by their acts aimed at the same object, one performing one part, and the other performing another part so as to complete it, with a view to the attainment of the same object, and their acts though apparently independent, were in fact concerted and cooperative, indicating closeness of personal association, concerted action and concurrence of sentiments, the court will be justified in concluding that said defendants were engaged in a conspiracy.³⁶ In this case, the finding of conspiracy was well-supported by evidence.

Indeed, petitioner’s participation and cooperation was indispensable in defrauding the government of the amount paid for the said confiscated lumber. Without doubt, her acts in making delivery to Azaula instead of the provincial government or PEO, evading apprehension for the illegally cut logs and yet pursuing clearance for the release of the said products by appealing to the local sanggunian, and later accepting payment with the assistance of Azaula and Escara -- all clearly showed her complicity in the anomalous disbursement of provincial government funds allocated for the bridge repair/construction project. Consequently, the Sandiganbayan did not err in finding her guilty of violation of Section 3(e) of R.A. No. 3019 and ordering her to return the amount corresponding to the payment for the confiscated lumber used in the construction of the Navotas Bridge, the same materials delivered by the petitioner under her contract with the provincial government.

The penalty for violation of Section 3(e) of R.A. No 3019 is "imprisonment for not less than six years and one month nor more than fifteen years, and perpetual disqualification from public office."³⁷ Under the Indeterminate Sentence Law, if the offense is punished by special law, as in the present case, an indeterminate penalty shall be imposed on the accused, the maximum term of which shall not exceed the maximum fixed by the law, and the minimum not less than the minimum prescribed therein.³⁸ In view of the attendant circumstances, we hold that the penalty imposed by the Sandiganbayan is in accord with law and jurisprudence.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated April 30, 2004 and Resolution dated August 20, 2004 of the Sandiganbayan in Criminal Case No. 20878 are AFFIRMED.

With costs against petitioner.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:

CONCHITA CARPIO MORALES
Associate Justice
Chairperson

ARTURO D. BRION Associate Justice

LUCAS P. BERSAMIN Associate Justice

ROBERTO A. ABAD^*
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONCHITA CARPIO MORALES
Associate Justice
Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes
^* Designated additional member per Special Order No. 997 dated June 6, 2011.

¹ Rollo, pp. 33-73. Penned by Associate Justice Ma. Cristina G. Cortez-Estrada and concurred in by Presiding Justice Minita V. Chico-Nazario (who was appointed to this Court and now retired) and Associate Justice Teresita V. Diaz-Baldos.

² Id. at 74-86. Penned by Associate Justice Ma. Cristina G. Cortez-Estrada and concurred in by Associate Justices Teresita V. Diaz-Baldos and Jose R. Hernandez.

³ TSN, September 20, 2001, pp. 8-9; Exhibits "6" and "7".

⁴ Id. at 14.

⁵ TSN, March 31, 1998, pp. 4-8, 10-19; TSN, July 28, 1998, pp. 2-4, 10, 12-13; Exhibits "A," "B," "C" and "S".

⁶ Exhibits "O" and "P".
⁷ Exhibit "BB-3".
⁸ TSN, September 20, 2001, pp. 23-25.
⁹ Exhibits "F" and "I".

¹⁰ TSN, September 20, 2001, pp. 28-30; Exhibits "D" and "X".

¹¹ Exhibit "M".

¹² TSN, March 31, 1998, pp. 21-22; TSN, March 30, 1998, pp. 5, 7-15; Exhibits "G" and "H".

¹³ TSN, December 12, 1997, pp. 4-24; Exhibits "U," "V" and "W".

¹⁴ Id. at 25-28. Exhibit "Y".
¹⁵ Rollo, pp. 87-92.
¹⁶ Id. at 93-94.
¹⁷ Id. at 95-133.
¹⁸ Id. at 72.
¹⁹ Id. at 167-172.

²⁰ Art. 1240. Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.

²¹ Rollo, pp. 81-85.

²² Ong v. People, G.R. No. 176546, September 25, 2009, 601 SCRA 47, 53, citing Suller v. Sandiganbayan, G.R. No. 153686, July 22, 2003, 407 SCRA 201, 208.

²³ Dugayon v. People, G.R. No. 147333, August 12, 2004, 436 SCRA 262, 272.
²⁴ G.R. No. 161877, March 23, 2006, 485 SCRA 185, 194-195, 197.
²⁵ Exhibit "O-2".
²⁶ G.R. No. 121215, November 13, 1997, 281 SCRA 631, 638.

²⁷ Cited in Regidor, Jr. v. People, G.R. Nos. 166086-92, February 13, 2009, 579 SCRA 244, 267.

²⁸ TSN, November 25, 1998, pp. 3-7.
²⁹ TSN, March 31, 1998, pp. 20-22.
³⁰ TSN, March 30, 1998, pp. 10-15.
³¹ TSN, December 12, 1997, pp. 5-28.
³² TSN, July 8, 2003, pp. 3-9; Exhibits "25" to "35".
³³ Exhibits "A" and "B".
³⁴ Exhibit "A-2".

³⁵ Bartolome C. Fernandez, Jr., A Treatise on Government Contracts Under Philippine Law, 2003 Rev. Ed., p. 39, citing Central Bank v. Cloribel, No. L-26971, April 11, 1972, 44 SCRA 307, 318.

³⁶ Baldebrin v. Sandiganbayan, G.R. Nos. 144950-71, March 22, 2007, 518 SCRA 627, 639.

³⁷ Ong v. People, supra note 22 at 56, citing Section 9, R.A. No. 3019.

³⁸ Ong v. People, id. at 56-57, citing Nacaytuna v. People, G.R No. 171144, November 24, 2006, 508 SCRA 128, 135.