Source: http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/51945
Timestamp: 2019-04-23 10:31:32+00:00

Document:
EULOGIO MORALES, ROSALIA MORALES AND WILMA HALLARE, PETITIONERS, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.
The drive to rid the government of graft and corruption deserves the support of everyone. Vulgar circumventions of the Anti-Graft Law cannot be countenanced by this Court.
“WHEREFORE, judgment is hereby rendered in this case finding accused Eulogio E. Morales, Wilma Hallare and Rosalia Morales GUILTY beyond reasonable doubt of the crime for Violation of Sec. 3, par. (g) in relation to par. (h) of Republic Act No. 3019, as amended, and after applying the Indeterminate Sentence Law sentences each of them to suffer an imprisonment of six (6) years, as minimum, to eight (8) years, as maximum with perpetual disqualification from public office, and to pay the costs of the suit.
After the prosecution formally offered its evidence, petitioners filed, with leave of court, a Joint Demurrer to Evidence on the grounds of lack of jurisdiction and failure to prove the guilt of the accused. They argued that they were not public officers, because the Olongapo City Water District was not covered by the Civil Service Law. In its July 20, 1993 Resolution, the Sandiganbayan denied their Motion for lack of merit and ordered them to present evidence in their defense.
On September 12, 1997, petitioners filed a Motion for New Trial and/or Motion for Reconsideration, allegedly because of newly discovered evidence.
However, the anti-graft court, in its February 18, 1998 Resolution denied the Motion for utter lack of merit. Thereafter, petitioners filed another Motion for Reconsideration, which was again denied by the Sandiganbayan in its June 1, 1998 Resolution. But in its November 16, 1998 Resolution, it reversed itself and granted petitioners’ second Motion for Reconsideration, set aside the July 29, 1997 Decision, and ordered a new trial.
The Sandiganbayan thereafter rendered the assailed Decision convicting petitioners. Their counsels filed two separate Motions for Reconsideration, both of which were denied in the challenged July 26, 2000 Resolution.
“x x x [S]ometime on August 20, 1986, accused Eulogio E. Morales, in his capacity as [g]eneral [m]anager of OCWD sold a Car Sigma 1979 Model with Motor No. 2M-08206, Chassis No. A-121 UL3695 and Plate No. CAV 962 owned by OCWD in favor of Wilma Hallare, the [f]inance [o]fficer of OCWD for and in consideration of the amount of P4,000.00. Allegedly, the sale was without a board resolution authorizing the sale.
“The prosecution claimed that the galant car was in good running condition, the car-air conditioning unit was functioning with a car stereo and tape desk and had a net book value of P16,105.00.
“The buyer Wilma Hallare on the same date, August 20, 1986 sold this galant car to Rosalia Morales, the wife of [Petitioner] General Manager Eulogio Morales. Thereafter, the car registration was transferred in the name of Rosalia Morales.
‘a. The asset was sold at a relatively low price to the disadvantage of the [w]ater [d]istrict. Not only is the selling price too low compared with prevailing prices for not particular make and model, it is even below the net book value of the car at the time of sale.
‘b. No attempts were made to obtain better prices in a formal auction sale. The supporting bids, all of which are dated ten (10) months prior to the date of sale (and do not indicate the particulars of the bidded item) were submitted by individuals considered to be too close to the [w]ater [d]istrict among them the GM of Subic [w]ater [d]istrict, the OCWD [f]inance [o]fficer (who later became the buyer), and the proprietors of two (2) of the district’s regular suppliers.
‘c. The dilapidated condition or sorry state of the service car which the four (4) buyers depicted in their bids may not be given credence in view of the lack of absence of a formal attestation from a credible body within the [w]ater [d]istrict e.g. [b]oard [r]esolution declaring the item as unserviceable and therefore disposable, or a formal assessment or evaluation by an independent committee.
‘d. No extraordinary loss was recognized by the [w]ater [d]istrict upon the consummation of the sale. This notwithstanding the fact that the subject item was sold at a price lower than the next book value.
“6. That there was a bidding conducted for the disposition of the subject motor vehicle which was already a junked car and totally dilapidated when the winning bidder, [Petitioner] Wilma Hallare, bought it with the intention of dismantling it and to repair the available parts to be sold on profit.
“7. That [Petitioner] Hallare submitted her bid way back in October, 1985 and came to know in December, 1985 that her offer of P4,000.00 for the junk car was the highest bid.
“8. That b[e]cause [Petitioner] Hallare had only P3,000.00 at that time, he asked [Petitioner] Eulogio Morales, [g]eneral [m]anager of the Olongapo City Water District, to pay P3,000.00 first and the balance to be paid the following month thru salary deduction, to which [Petitioner] Morales agreed.
“9. That [Petitioner] Hallare was able to fully pay her bid price of P4,000.00 on December 10, 1985 as evidenced by Cash Receipt No. 11148 dated December 10, 1985 of the Olongapo City Water District.
“10. That while the sale was, in effect, consummated on December 10, 1985, however, [Petitioner] Hallare did not ask for the immediate execution of the corresponding deed of sale nor was the Certificate of Registration covering the car given to her as she was not in need of said documents because her intention was to dismantle the car and sell the usable parts thereof. Besides, the practice of the Olongapo City Water District was not to execute a deed of sale on junk materials it sold.
“11. That [Petitioner] Hallare then pulled out the junk car from the junkyard of the OCWD and brought it to the repair shop. She spent P2,000.00 to P3,000.00 more but the car remained unserviceable because of other defects of the car that needed repair which would entail additional expenses. So she temporarily stopped the repair of the car until 5 to 6 months l[a]ter when she confided to [Petitioner] Rosalia Morales about her financial problem and her desire to borrow P4,000.00 from the latter.
“Mrs. Morales agreed to lend her P4,000.00 provided it should be paid on or before August 15, 1986. At that time, [Petitioner] Hallare had a prospective buyer of the car, she went to [Petitioner] Eulogio Morales to ask for the deed of sale because she intended to sell the car.
“Upon advice of [Petitioner] Eulogio Morales, [Petitioner] Hallare caused the preparation of the deed of sale in her favor and presented it to [Petitioner] Eulogio Morales for signature on August 20, 1986. However, her prospective buyer backed out and because her debt of P4,000.00 to Mrs. Morales remained unpaid since August 15, 1986, she told Mrs. Morales ‘Ma’am sa iyo na yung kotse.’ So she caused the preparation of another deed of sale of the car in favor of Mrs. Morales; however, Mrs. Morales did not accept the deed of sale and told [Petitioner] Hallare just to keep it and pay her debt later on as soon as she had a new buyer. Hence, [Petitioner] Hallare kept the two (2) deeds of sale inside her desk.
“13. That [Petitioner] Hallare was the [f]inance [o]fficer of OCWD in October, 1985 and she knew for a fact that their Office had a policy then that employees were allowed to buy junk materials or equipments of the OCWD provided the same was ready for disposal. At the time, the car subject of this case was already a part of the various junk materials of OCWD.
“However, the said policy was stopped sometime on January 17, 1986 because a Board Resolution was passed prohibiting the employees from enga[g]ing in any business directly with the OCWD.
“14. [Petitioner] Wilma Hallare submitted her bid for the subject car and paid the first partial payment before the passage of Resolution No. 03-86 prohibiting all employees of the water district and their relatives from engaging in business, directly or indirectly in and with OCWD.
In its August 28, 1997 Decision, the Sandiganbayan ruled that jurisdiction over the subject matter in criminal cases was properly determined by the law in effect at the time of the commencement of the action. Davao City Water District v. Civil Service Commission -- the governing jurisprudence when the Information against them was filed on February 18, 1992 -- had classified water districts as corporations created pursuant to a special law (PD 198, as amended), and their officials and employees as public officers covered by the Civil Service Law.
The Sandiganbayan also held that the sale of the subject car for P4,000 was grossly and manifestly disadvantageous to the government because, at the time of sale, its book value was P16,088. Petitioners Eulogio Morales and Wilma Hallare intervened in their official capacity in the transaction as OCWD general manager and finance officer, respectively. The pecuniary interest of Eulogio Morales in the vehicle became evident when his wife, Petitioner Rosalia Morales, bought the car from Hallare.
Despite the reception of additional evidence for petitioners, the Sandiganbayan again convicted them in its May 15, 2000 Decision. Whether the Deeds of Sale evidencing the transfer of the car were made on the same date or on different dates was inconsequential. In all these transactions, the intended beneficiaries were the Morales spouses. The Deeds were executed during the effectivity of Resolution No. 03-86 dated January 17, 1986, prohibiting employees of OCWD and their relatives from directly or indirectly engaging in business with OCWD.
The introduction of the two Deeds of Sale dated October 6, 1986 and December 9, 1987, aside from the two other Deeds both dated August 20, 1986, only highlighted the irregularity of the sale and petitioners’ propensity to lie. The anti-graft court also ruled that Eulogio’s claim of lack of knowledge of the sale of the car to his wife was unbelievable.
“I. With due respect, the Honorable Sandiganbayan reversibly erred in holding that the Olongapo City Water District was a public corporation or government-owned or controlled corporation whose employees are covered by the Civil Service Law and, therefore, under the jurisdiction of said court, when the truth is that said water district was a private corporation and therefore its employees are private not subject to the jurisdiction of said court, on the date the alleged offense was committed by the petitioners.
“II. With due respect, the conviction of the petitioners is contrary to the provisions of the Constitution which prohibits ex post facto laws and which guarantees equal protection of the laws.
Petitioners claim that the Sandiganbayan had no jurisdiction over the subject matter of their case, because on August 20, 1986 -- the date when the alleged crime was committed -- the prevailing ruling was Metro Iloilo Water District v. National Labor Relations Commission. The Court had ruled therein that water districts were private corporations, and that their employees were not subject to the Civil Service Law. Hence, petitioners concluded that the anti-graft court had no jurisdiction over the crime allegedly committed by them.
We disagree. A review of relevant jurisprudence reveals the infirmity of their contention. Baguio Water District v. Trajano, promulgated on February 20, 1984, ruled that employees and officers of water districts were covered by the Civil Service Law. This ruling was echoed in Tanjay Water District v. Gabaton. The ruling in Baguio Water was reversed in Metro Iloilo Water District v. NLRC. In 1991, however, the Court -- in Davao City Water District v. Civil Service Commission -- returned to the ruling in Baguio Water.
Petitioners are clearly mistaken in their claim, because the prevailing jurisprudence when the crime was committed in 1986 was Baguio Water, not the Metro Iloilo Water which was promulgated in 1990.
Petitioners argue that Metro Iloilo should be applied, not Davao City Water, because the jurisdiction of a court in criminal cases should be determined by the law in force at the time of the commission of the crime charged.
The Anti-Graft and Corrupt Practices Law was passed on August 17, 1960. Hence, it cannot be seriously contended that petitioners were accused of a crime that was not punishable at the time it was committed.
Metro Iloilo Water would have been applicable to petitioners in accordance with the rule allowing retroactivity of laws favorable to the accused. But this ruling was subsequently abandoned in Davao City Water in which the Court, invoking Baguio Water, held that water districts were government-controlled corporations, and their employees were covered by the Civil Service Law. The clear import of that reversion was to place employees of water districts under the Anti-Graft Law and thus within the jurisdiction of the Sandiganbayan.
Davao City Water holds that water districts fall under the general term government-owned or -controlled corporations with original charters or those created by a special law and not by the Corporation Code; hence, they are covered by the Civil Service Law.
Presidential Decree No. 198 is a special law applicable only to the different water districts created pursuant thereto. While it is true that a resolution of a local sanggunian is necessary for the final creation of a district, PD 198 is the very law that gives a water district juridical personality. Being an original charter, it defines the primary purpose and the basic organizational setup of a water district. Further, Section 25 of this law, which exempts employees of water districts from the Civil Service Law, was repealed by PD No. 1479, which took effect on June 11, 1978.
Besides, petitioners do not really pose a novel question. It is well-settled that the jurisdiction of a court to try a criminal case is to be determined by the law in force at the time of the institution of the action, not at the time of the commission of the crime. The Information in the instant case was filed in 1992 when Davao City Water was the prevailing ruling.
Similarly well-settled is the rule that the Sandiganbayan exercises exclusive original jurisdiction in all cases involving “violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act x x x.” In case private individuals are charged as co-principals, accomplices or accessories -- together with public officers or employees, including those employed in government-owned or -controlled corporations -- they shall be tried jointly with those public officers and employees.
We are not persuaded. The quoted Resolution provides the distinction between that case and the one at bar. Lizaso concerned acts committed during the effectivity of the Metro Iloilo Water ruling. The case at bar, however, concerns acts committed during the effectivity of the Baguio Water District ruling.
Petitioners contend that their conviction under Section 3(g) of the Anti-Graft Law was erroneous, because the sale price had not been grossly or manifestly disadvantageous to the government. They aver that the subject car was already junk and was no longer in good running condition.
As earlier discussed, Petitioners Eulogio Morales and Wilma Hallare -- being the general manager and the finance officer, respectively, of the OCWD -- are public officers. Petitioner Rosalia Morales is the wife of the general manager of OCWD and the subsequent buyer of the same car under the second Deed of Sale. The subject car in this case was sold to Hallare by Eulogio Morales in his official capacity -- via the August 20, 1986 Deed of Sale (Exh. “C”) -- for only P4,000, when its book value at the time of the sale was P16.088 (Exh. “B-1”).
The gross and manifest disadvantage of the sale to the government is shown by the following facts, which were stated in the Operations Audit Report: (1) the subject car was sold at a very low price, well below its book value; (2) there was no attempt to obtain a better price in a formal auction; (3) the supporting bids were dated ten months prior to the date of sale without any indication of the particulars of the item for bidding, and those bids were submitted by individuals considered to be close to petitioners; (4) there was no board resolution declaring the item as unserviceable and disposable, and neither was a formal assessment or evaluation made by an independent body; (5) no extraordinary loss was recognized by the water district upon the consummation of the sale; and (5) the existence of the second Deed of Absolute Sale shows the simulated nature of the first, while the execution of both documents on the same date proves that the interested party was no less than the general manager.
Besides, the question of the actual value of the subject car at the time of sale, being factual in nature, is best resolved by the Sandiganbayan. Generally, factual findings of the anti-graft court are conclusive upon the Supreme Court. Since the Sandiganbayan had pegged the value of the car at time of the sale at P16,088, the P4,000 selling price quoted to Petitioner Hallare -- without bidding or auction and without any authorizing board resolution to sell it -- was in itself proof of the gross and manifest disadvantageousness of the sale to the water district and, thus, to the government.
Petitioners aver that the sale of the subject car on December 10, 1985, proven by Official Receipt No. 11148 of same date (Exh. “5-A”), exempts them from criminal liability. They contend that OCWD Board Resolution No. 03-86, which prohibited employees from purchasing junk materials belonging to OCWD, was passed only on January 17, 1986.
We disagree. We cannot fault the Sandiganbayan for not giving any evidentiary value to the said Receipt as proof of the date of the perfection of the sale of the car. Such date alleged by petitioners is convincingly contradicted by the August 20, 1986 Deed of Absolute Sale.
However, assuming arguendo that the sale was perfected earlier than the effectivity of Resolution 03-86, petitioners are still criminally liable, because Hallare sold the same car to the wife of the general manager of the water district on the same date, August 20, 1986. This second sale was made in violation of Section 3(h) of the Anti-Graft Law. As aptly ruled by the Sandiganbayan, Rosalia Morales bought the subject vehicle with her husband’s knowledge and consent. In the normal course, a wife consults her husband about purchasing a car. Knowing that her husband was a public officer, it would be reasonable to assume that she would consult him before buying any property that had once belonged to the water district where he was a key official.
Eulogio’s intervention in the transaction is proven by his signature in the August 20, 1986 Deed of Absolute Sale (Exh. “C”) and in the October 6, 1986 Deed of Sale (Annex “A” to the Motion for New Trial and/or Motion for Reconsideration). Not only did he sign the Deed of Sale in representation of the OCWD as its general manager, he also signed without authority from its board of directors. This transaction was pursued despite Resolution No. 03-86, dated January 17, 1986, prohibiting OCWD employees and their relatives from engaging in transactions with the water district. The controversial sale would not have pushed through were it not for Eulogio and Hallare’s involvement.
In view of the foregoing, we concur with the Sandiganbayan that the scheme resorted to by petitioners was tainted with graft and corruption. The chain of transactions was resorted to because the general manager of OCWD could not directly, validly and legally sell the subject car to himself or to his wife. Obviously, the second sale was a vulgar circumvention of the prohibition in the Anti-Graft Law.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.
Puno, (Chairman), Sandoval-Gutierrez and Carpio, JJ., concur.
 Written by Justice Godofredo L. Legaspi and concurred in by Justices Edilberto G. Sandoval (Division chairman) and Raoul V. Victorino (member); rollo, pp. 26-48.
 Erroneously spelled “Mallare” in the Motion for Extension of Time to File Petition for Review on Certiorari dated August 4, 2000.
 Ibid., pp. 50-52 & 54.
 Records, Vol. I, p. 100.
 Penned by Justice Roberto M. Lagman with the concurrence of Justices Jose S. Balajadia (Division chairman) and Harriet O. Demetriou (member); records, Vol. II, pp. 480-497.
 Penned by Justice Harriet O. Demetriou with the concurrence of Justices German G. Lee Jr. and Godofredo L. Legaspi, members; id., pp. 656-662.
 Penned by Justice Godofredo L. Legaspi with the concurrence of Justices German G. Lee Jr. (acting chairman) and Anacleto D. Badoy Jr.; id., pp. 723-725.
 Justice Edilberto G. Sandoval replaced Justice Lee Jr as division chairman and Justice Alfredo J. Gustilo replaced Justice Badoy Jr. as member; id., pp. 774-775.
 Roberto A. Abad of Abad & Associates (Records, Vol. II, pp. 907-920) and Atty. Manuel R. Castro (ibid., pp. 921-929); but the former, as lead counsel of petitioners, adopted the second Motion as part of petitioners’ Motion for Reconsideration (id., p. 979).
 Justice Raoul V. Victorino replaced Justice Gustillo Jr.; id., pp. 1006-1007.
 Assailed Decision, pp. 9-12; rollo, pp. 34-37.
 Petitioners’ Memorandum, pp. 4-7; rollo, pp. 148-151.
 201 SCRA 593, September 13, 1991.
 Annex “A”; records, Vol. II, p. 576.
 Annex “C”; id., p. 578.
 This case was deemed submitted for resolution on August 28, 2001, upon this Court’s receipt of petitioners’ Memorandum.
 Atty. Manuel R. Castro of Castro Castro & Associates signed the Memorandum.
 Petitioner’s Memorandum, pp. 7-8; rollo, pp. 151-152. Original in upper case.
 GR No. 85760, Minute Resolution dated May 16, 1990.
 127 SCRA 730, 733, February 20, 1984.
 172 SCRA 253, 261, April 17, 1989.
 201 SCRA 593, 601, September 13, 1991.
 Bernas, The Constitution of the Republic of the Philippines: A Commentary, 1987 ed., pp. 487-488.
 §16, RA 3019; “Annotation on the Anti-Graft Laws,” Atty. Ambrosio R. Blanco, 5 SCRA 975, 976, August 30, 1962.
 Davao City Water, supra, p. 605.
 §6 provides for the formation and the name to be used by the water district.
 §8 prescribes the number and qualifications of the members of its Board of Directors; §9, 3(b) & 10 provide for their appointment and nominations; §11, for their term of office; and §13, for the compensation and personal liability.
 Davao City Water, supra, pp. 600-601.
 People v. Velasco, 252 SCRA 135, 147, January 23, 1996; Azarcon v. Sandiganbayan, 268 SCRA 747, 757, February 26, 1997.
 Lacson v. Executive Secretary, 301 SCRA 298, 313, January 20, 1993; Azarcon v. Sandiganbayan, ibid., p. 757.
 Azarcon v. Sandiganbayan, supra, p. 758.
 Petitioners’ Memorandum, p. 12; rollo, p. 157.
 Duterte v. Sandiganbayan, 289 SCRA 721, 745, April 27, 1998; Marcos v. Sandiganbayan (First Division), 297 SCRA 95, 107, October 6, 1998; Froilan v. Sandiganbayan, 328 SCRA 351, 361, March 17, 2000; Sajul v. Sandiganbayan, 345 SCRA 248, 255, November 20, 2000.
 Marcos v. Sandiganbayan (First Division), supra, p. 147, per Purisima, J.; Sajul v. Sandiganbayan, id., pp. 267-268, per Kapunan, J.
 TSN, November 23, 1992, pp. 12-13.
 Alleged bids submitted by petitioners, Envelop of Exhibits.
 Enriquez v. People, 331 SCRA 538, 552, May 9, 2000; Rueda Jr. v. Sandiganbayan, 346 SCRA 341, 351-352, November 29, 2000.
 298 SCRA 196, 205, October 21, 1998, per Davide Jr., J.
 Records, Vol. II, p. 576.
 Exh. “E,” Envelop of Exhibits.

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