Section 3(e) of Republic Act No. 3019 states:
SECTION 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:
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(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.
Its elements are as follows:
1. The accused must be a public officer discharging administrative, judicial or official functions;
2. He [or she] must have acted with manifest partiality, evident bad faith or [gross] inexcusable negligence;
3. That his [or her] action caused any undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of his functions.95
As to the second element, there are three modalities for violating Section 3(e) of Republic Act No. 3019. These are "manifest partiality," "evident bad faith," and "gross inexcusable negligence." These modalities are defined in Fonacier v. Sandiganbayan:96
"Partiality" 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. These definitions prove all too well that the three modes are distinct and different from each other. Proof of the existence of any of these modes in connection with the prohibited acts under Section 3(e) should suffice to warrant conviction.
The use of the three phrases "manifest partiality," "evident bad faith" and "gross inexcusable negligence" in the same information does not mean that the indictment charges three distinct offenses but only implies that the offense charged may have been committed through any of the modes provided by the law.97 (Citations omitted)
On the third element, there are two separate component acts which may be committed: "causing undue injury to any party, including the Government" or "giving any private party any unwarranted benefit, advantage or preference." As explained in Coloma, Jr. v. Sandiganbayan:98
In a catena of cases, the Court has held that there are two ways by which a public official violates Section 3 (e) of R.A. No. 3019 in the performance of his functions, namely: (1) by causing undue injury to any party, including the Government; or (2) by giving any private party any unwarranted benefit, advantage or preference. The accused may be charged under either mode or both. The disjunctive term "or" connotes that either act qualifies as a violation of Section 3 (e) of R.A. No. 3019. In other words, the presence of one would suffice for conviction. Further, the term "undue injury" in the context of Section 3 (e) of the R.A. No. 3019 punishing the act of "causing undue injury to any party," has a meaning akin to that civil law concept of "actual damage." Actual damage, in the context of these definitions, is akin to that in civil law.99 (Citations omitted)
In addition, undue injury cannot be merely presumed but must be alleged with specificity and proven with competent evidence:
In Santos v. People, the Court equated 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 - with that civil law concept of "actual damage". As the Court elaborated in Llorente v. Sandiganbayan, to wit:
... Unlike in actions for torts, undue injury in Sec. 3(e) cannot be presumed even after a wrong or a violation of a right has been established. Its existence must be proven as one of the elements of the crime. In fact, the causing of undue injury, or the giving of any unwarranted benefits, advantage or preference through manifest partiality, evident bad faith or gross inexcusable negligence constitutes the very act punished under this section. Thus, it is required that the undue injury be specified, quantified and proven to the point of moral certainty.
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.
In turn, actual or compensatory damages is defined by Article 2199 of the Civil Code as follows:
Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages.
It naturally follows that the rule that should likewise be applied in determining undue injury is that in determining actual damages, the court cannot rely on mere assertions, speculations, conjectures or guesswork, but must depend on competent proof and on the best evidence obtainable regarding specific facts that could afford some basis for measuring compensatory or actual damage.
The foregoing rule is made more concrete in Llorente v. Sandiganbayan. Therein respondent Leticia Fuertes (Fuertes) accused therein petitioner Cresente Llorente (Llorente) of causing her undue injury by delaying the release of salaries and allowances. The Sandiganbayan convicted Llorente based, among others, on the testimony of Fuertes on the distress caused to her family by the delay in the release of her salary. Reversing the conviction of Llorente, the Court held:
Complainant's testimony regarding her family's financial stress was inadequate and largely speculative. Without giving specific details, she made only vague references to the fact that her four children were all going to school and that she was the breadwinner in the family. She, however, did not say that she was unable to pay their tuition fees and the specific damage brought by such nonpayment. The fact that the "injury" to her family was unspecified or unquantified does not satisfy the element of undue injury, as akin to actual damages. As in civil cases, actual damages, if not supported by evidence on record, cannot be considered.100 (Emphasis supplied, citations omitted)
The Ombudsman is correct that the crux of the controversy is the alleged default in the obligations under the RMOA and the party responsible for it.101 Petitioner anchors its charge of violation of Section 3(e) of Republic Act No. 3019 on respondents' failure to comply with their obligations under the RMOA. It also cites respondents' evident bad faith and gross inexcusable negligence in complying with their obligations, which unduly injured petitioner.
There is no question as to the existence of the first element. Respondents are being charged in the performance of their official functions as members of the Board of Directors of BCDA, a government instrumentality. There is doubt, however, as to the second and third elements of the offense charged.
We agree with the Ombudsman that petitioner failed to establish with moral certainty that respondent acted with manifest partiality, evident bad faith or gross inexcusable negligence. Other than bare allegations, petitioner did not present evidence to prove that the BCDA, through the respondents, was not compliant with its obligations in the RMOA. The Ombudsman's finding that the OSAC has been operational since 2005 is supported by evidence on record:
There is no proof the respondents acted with manifest partiality, evident bad faith, or gross inexcusable negligence. BCDA has already established the OSAC, also known as the John Hay Management Corporation (JHMC), as evidenced by the Affidavit of the Manager Zaldy A. Bello, of the Special Economic Zone; and the Memorandum dated 23 May 2005 of the JHMC circulating a copy of the approved policy for accreditation.102 (Citations omitted)
The affidavit of OSAC officer Zaldy A. Bello states:
1. I am the One Stop Action Center (OSAC) Officer, now Special Economic Zone (SEZ) Manager of John Hay Management Corporation (JHMC);
2. The OSAC is located in a building that it shares with the Customs Clearance Area of JHMC beside the Intercontinental Hotel Group Building in Ordoño Drive, Camp John Hay, Baguio City;
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6. By virtue of Memorandum Circular No. 2005-05-001 dated May 23, 2005, which took effect June 1, 2005, it shall be mandatory for all enterprises doing business inside the John Hay Special Economic Zone to seek accreditation with JHMC, hereto attached as Annex "A", thus, said enterprises will file and secure their Permit to Operate with the ONE STOP ACTION CENTER of JHMC in lieu of the Business Permit issued by the City Government of Baguio as provided under the policy guideline and procedure on the accreditation policy, to wit:
"1.3 The application shall be approved upon favourable recommendation of OSAC and subsequent approval of the Vice President and Chief Operating Officer", hereto attached as Annex "B" and Series.103
Petitioner did not present any evidence to prove its assertion that the OSAC was not compliant with the RMOA. It did not even allege the specific permits and licenses that the OSAC supposedly failed to issue beyond the guaranteed 30-day period in the RMOA. In lieu of competent proof, petitioner merely reiterated Article V, Section 1 of the RMOA and that the necessary permits and clearances were not acted upon by the OSAC within the 30-day period to the prejudice of petitioner.104
Petitioner forgets that the issuance of permits, certificates and licenses within 30 days is not an absolute obligation of BCDA. Their issuance is still premised on the complete submission of required documents by CJHDC, its locators, concessionaires, contractors or buyers:
ARTICLE V
LESSOR'S OBLIGATIONS AND WARRANT[I]ES
Section 1. Permits and Licenses. In order to facilitate the implementation of the Project, the LESSOR through the Administrator, shall maintain the operation of OSAC with full authority to process and issue all the business, building and other developmental permits, certificates and licenses, local and national, from all government agencies necessary to facilitate construction and commercial operation in Camp John Hay for the implementation of the Revised Camp John Hay Master Development Plan and the Project which are applicable in the JHSEZ.
LESSOR hereby acknowledges that the OSAC's issuance of these permits and licenses for the LESSEE is essential to the fulfillment of the developmental and financial commitments made by LESSEE herein and therefore warrants that the OSAC shall issue said business, building and other developmental permits, certificates and licenses within thirty (30) days from compliance with the provisions of Sections 3, 4, and 5, Article IV hereof and complete submission of all required documents by the LESSEE, its sub-locators, concessionaires, contractors or buyers as specified in Article IV, Section 3.105 (Emphasis supplied)
Aside from the submission of complete requirements, Article IV, Sections 3 to 5 of the RMOA must likewise be complied with:
ARTICLE IV
JHSEZ ADMINISTRATOR
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Section 3. One Stop Action Center. The One Stop Action Center ("OSAC") shall facilitate the registration, licensing and issuance of permits within the JHSEZ with full authority to process and issue all the business, building and other developmental permits, certificates and licenses, local, and national, from all government agencies to facilitate construction and commercial operations in Camp John Hay. The appropriate government agencies (ie. DTI, LGU, BIR and BOC) shall assign their respective representatives in the OSAC for this purpose....
In relation thereto, the PARTIES shall complete the following actions and deliver the following documents to the OSAC on or before the following specified dates:
a. At least thirty (30) days prior to construction of a particular component or building, the LESSEE, its sub-locators, concessionaires, contractors or buyers, shall submit to the OSAC an application for the issuance of the development and business permit/s supported by detailed engineering and structural plans, and such other documents as may be required in compliance with all the requirements of the government of the Republic of the Philippines such as five (5) sets of documents for the Contract Drawings/Documents Phase signed and sealed by a duly licensed Architect, Civil, Structural, Electrical, and or Mechanical Engineer. Submission of design development documents for specific features shall be in accordance with the Revised Project Implementation Plan Schedule.
b. The OSAC shall review contract drawings/documents and issue the development and business permit/s within thirty (30) days from the complete submission of all required documents of the LESSEE, its sub-locators, concessionaires, contractors or buyers;
c. All physical infrastructure plans shall conform to the approved Revised Camp John Hay Master Development Plan. No deviation from the Revised Camp John Hay Master Development Plan shall be allowed without the prior written consent of the LESSOR.
d. At least thirty (30) days prior to the start of the commercial operations of each facility, the LESSEE, its sub-locators, concessionaires, contractors or buyers shall submit to the OSAC one (1) original and one (1) duplicate copy of the as-built drawings and/or plans for all structures. The OSAC shall review the as-built drawings and/or plans and issue the relevant occupancy permit/s, business permit/s, and/or permit/s to operate within thirty (30) days from complete submission of all required documents of the LESSEE, its sub-locators, concessionaires, contractors or buyers.
Section 4. JHSEZ rules and regulations. The implementing rules and regulations and operating manual of the JHSEZ formulated in coordination with concerned government agencies by the LESSOR and/or the ADMINISTRATOR and LESSEE shall be made an integral part of this Agreement.
Section 5. Compliance with JHSEZ rules and regulations. LESSEE hereby expressly acknowledges the jurisdiction, power and authority of the ADMINISTRATOR to enforce the rules and regulations governing the JHSEZ. The LESSEE agrees to abide by all the rules and regulations of the JHSEZ. Any material violation of such rules and regulations and the failure to remedy such violation within sixty (60) days from receipt of written notice thereof shall be a cause for the termination of this Agreement.106
The Petition is bereft of any allegations that petitioner submitted all the requirements and complied with Article IV, Sections 3 to 5 of the RMOA. Equally telling is petitioner's failure to refute respondents' material allegation that the delay in the issuance of petitioner's permits, clearances, and licenses, was due to its failure to submit complete requirements.107 As petitioner failed refute this material allegation, it is effectively admitted. Hence, without its submission of complete documentary requirements, petitioner had no right to demand the issuance of permits, clearances, and licenses within 30 days. There being no established violation of the RMOA, petitioner's alleged undue injury has no leg to stand on.
Assuming a violation of the RMOA has been established, We agree with the Ombudsman that petitioner failed to establish the undue injury from the acts of respondent.108
Petitioner asserts that it suffered undue injury when it assumed the consideration of the RMOA amounting to P2,686,481,644.00 without respondents' issuance of permits and clearances, in violation of the RMOA.109 In addition, it claims that it lost "great amounts of unrealized profits" because of respondents' inaction to its letter requests.110
However, the allegation of "great amounts of unrealized profits" is based on conjectures and speculation. Petitioner did not submit competent proof which could have allowed the Ombudsman to determine and measure the actual damage it supposedly suffered.
Neither is petitioner's assumption of the P2,686,481,644.00 consideration of the RMOA sufficient to establish undue injury. Records show that such amount represents petitioner's unpaid rental obligations under the 1996 Lease Agreement and subsequent Agreements with BCDA. Petitioner expressly acknowledged this in Section 3 of the RMOA:
Section 3. Acknowledgement and Settlement by LESSEE of prior obligations under the 19 October 1996 Lease Agreement, the 14 July 2000 MOA, and the 18 July 2003 MOA. LESSEE hereby acknowledges its obligations under the 19 October 1996 Lease Agreement, the 14 July 2000 MOA, and the 18 July 2003 MOA for the years 1999 to 30 June 2008 amounting to Pesos: Two Billion Six Hundred Eighty Six Million Four Hundred Eighty One Thousand Six Hundred Forty Four (PHP2,686,481,644.00) inclusive of interest as summarized in Annex A hereof and subject to the provisions of Sections 4 and 6, Article I hereof, PARTIES have mutually agreed to settle the acknowledged obligations under the preceding paragraph[.]111
In agreeing to pay its due and demandable obligations, petitioner did not suffer any undue injury. The RMOA was executed for the benefit of both parties to continue the lease and restructure payments of petitioner's rental arrears. There being no sufficient allegation and proof of undue injury, petitioners failed to establish the third element for violation of Section 3(e) of Republic Act No. 3019.
Thus, the Ombudsman did not gravely abuse its discretion in finding no probable cause for violation of Section 3 (e) of Republic Act No. 3019 due to petitioner failure to prove that respondents acted in evident bad faith and gross negligence resulting in undue injury.
Xxx."
THIRD DIVISION
[ G.R. No. 225565, January 13, 2021 ]
CAMP JOHN HAY DEVELOPMENT CORPORATION, REPRESENTED BY MANUEL T. UBARRA, JR., PETITIONER, VS. OFFICE OF THE OMBUDSMAN, ARNEL PACIANO D. CASANOVA, FELICITO C. PAYUMO, ZORAYDA AMELIA C. ALONZO, TERESITA A. DESIERTO, MA. AURORA GEOTINA-GARCIA, FERDINAND S. GOLEZ, ELMAR M. GOMEZ AND MAXIMO L. SANGIL, RESPONDENTS.
