SPECIAL SECOND DIVISION

[G.R. No. 206162. February 18, 2019.]

ALEX M. VALENCERINA, petitioner, vs.PEOPLE OF THE PHILIPPINES, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Special Second Division, issued a Resolution dated18 February 2019which reads as follows:

"G.R. No. 206162 (ALEX M. VALENCERINA, petitioner v. PEOPLE OF THE PHILIPPINES, respondent). — This Court resolves a Motion for Reconsideration 1 of this Court's December 10, 2014 Decision, 2 which denied the Appeal by Certiorari of Sandiganbayan's October 11, 2012 Decision 3 and March 1, 2013 Resolution 4 in Criminal Case No. 27474. This Court affirmed the Sandiganbayan's conviction of Alex M. Valencerina (Valencerina) for violation of Section 3 (e) of Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act.

In October 1997, property developer Ecobel Land, Inc. (Ecobel), represented by its Chair, Josephine Boright (Boright), applied for the issuance of a bond with the Government Service Insurance System to guarantee the repayment of a loan worth US$10,000,000.00, supposedly obtained from the Philippine Veterans Bank and to allegedly build a 26-storey commercial/residential Ecobel Condominium Tower Building. 5 The Suretyship Department Manager Leticia Bernardo (Bernardo) gave a checklist of the requirements, which Ecobel then submitted save for the loan agreement. 6

However, the Philippine Veterans Bank rejected Ecobel's proposal to be the obligee of the loan. 7

On December 10, 1997, the Government Service Insurance System Underwriting Committee "'approved in principle' the surety bond application, but subject to 'analysis and evaluation of the project and the offered collaterals.'" 8 These collaterals were Transfer Certificate of Title Nos. 227727 and 66289.

On January 16, 1998, the Underwriting Committee refused Transfer Certificate of Title No. 227727 as collateral as it was already the subject of another mortgage, which was prohibited under the Government Service Insurance System policy. Later, Ecobel presented Transfer Certificate of Title No. 66289 as its collateral. 9

On January 27, 1998, Valencerina, the vice president for marketing and support service of the Government Service Insurance System, 10 prepared a Memorandum upon instructions from Amalio A. Mallari (Mallari), then senior vice president of the Government Service Insurance System General Insurance Group. 11

Addressed to the president and general manager of the Government Service Insurance System, the Memorandum endorsed Ecobel's bond for evaluation by the Government Service Insurance System Investment Committee. It also included Mallari's strong recommendation through a marginal note, which read, "Strong reco. Based on info & collateral herein stated."12

On March 10, 1998, the Investment Committee approved Ecobel's bond. The following day, Boright and Mallari signed Surety Bond General Insurance Fund No. 029132, a high-risk bond. 13 The surety bond stated that the Philippine Veterans Bank is the obligee of the loan, but it lacked the signature of any bank representative. 14 Mallari signed the surety bond even without any document showing the bank's approval. 15

In a March 30, 1998 Certification, Valencerina advised that the bond could be redeemed if Ecobel would default in paying the loan. 16

On January 14, 1999, Valencerina issued a Certification, stating that the bond was a "genuine, valid[,] and binding obligation of [the Government Service Insurance System,] and may be transferred to [Bear Stearns International, Ltd.] and any of its assignees and Aon Financial Products, Inc. and any of its assignees[.]" 17

On February 4, 1999, Ecobel, represented by Estela Edralin (Edralin), signed a Term Loan Agreement with Bear Stearns International, Ltd. (Bear Stearns), a foreign funder. In March, Ecobel made a drawdown from the loan in the amount of US$9,307,000.00. 18

On February 9, 1999, the Suretyship Department's request for facultative reinsurance of the bond was approved by Valencerina. However, he later issued Cancellation Notices after being informed by Atty. Norma M. Saludares (Atty. Saludares) that Transfer Certificate of Title No. 66289 was spurious. In the meantime, Ecobel issued two (2) post-dated checks both dated February 26, 1999: (1) the peso check worth P12,731,520.00, signed by Boright and paid in the Philippines; and (2) the dollar check worth US$330,000.00, signed by Edralin and paid in London. 19

In a letter from Atty. Fernando U. Campaña (Atty. Campaña) of the Government Service Insurance System-London Office, which the Government Service Insurance System received on May 6, 1999, the Philippine National Bank-London Office was advised to remit US$200,625.00 to Philippine National Bank-Manila Office. 20

Atty. Saludares informed Valencerina about the Ecobel bond premium received by the Government Service Insurance System-London Office. She advised him to refund the payment to Ecobel because the bond was already canceled and the post-dated check for the premium payment was invalidated. 21 On June 20, 1999, the Government Service Insurance System issued a Bond Cancellation Advice to reverse Ecobel's premium payment. 22

On March 7, 2000, URSA Minor Limited, an assignee of Bear Stearns, demanded payment from Ecobel. Subsequently, a Notice of Failure was sent informing the Government Service Insurance System of Ecobel's failure to pay the obligation which became due on March 9, 2000. 23

On April 5, 2000, Aon Financial Products, Inc., another assignee of Bear Stearns, sent a Notice of Demand to then Finance Secretary Pardo de Tavera, calling on the guarantee of the government under the bond. 24

Hence, an Information was filed before the Sandiganbayan against Valencerina, Atty. Campaña, Mallari, Bernardo, Boright, and Edralin, for violating Section 3 (e) of the Anti-Graft and Corrupt Practices Act. They allegedly caused the government injury and/or gave unwarranted benefits to Ecobel when they participated in the issuance of the surety bond, despite obvious legal infirmities. 25 All but Boright pleaded not guilty to the crime charged, as he has remained at large. 26

Atty. Campaña's case was later dismissed in the Sandiganbayan's August 3, 2003 Resolution. 27

In its October 11, 2012 Decision, 28 the Sandiganbayan found Valencerina and Mallari guilty beyond reasonable doubt, while acquitting Bernardo and Edralin.

The Sandiganbayan found that Valencerina submitted the application to the Investment Committee despite knowing that the obligee was not the Philippine Veterans Bank, as misrepresented by Ecobel, but a foreign funder. 29 It ruled that in his position, he must have known that Ecobel could not be granted the surety bond to guarantee payment of foreign loans, as the Government Service Insurance System could only issue one if it was in the government's interest. 30

The Sandiganbayan also noted that in issuing the Certifications, which were needed to facilitate the foreign loan, Valencerina participated in the loan negotiation between Ecobel and Bear Stearns. It also took against him his declaration that the bond was fully secured by collaterals despite knowing that they were defective. 31

As such, the Sandiganbayan found that Valencerina "unjustifiably gave preference to Ecobel[.]" 32

Valencerina and Mallari separately moved for reconsideration, but their Motions were denied by the Sandiganbayan. 33

Thus, Valencerina filed before this Court an appeal by certiorari. 34

In its December 10, 2014 Decision, 35 this Court denied the appeal. In affirming the Sandiganbayan ruling, this Court ruled that the elements of Section 3 (e) of the Anti-Graft and Corrupt Practices Act were established.

Hence, Valencerina filed this Motion for Reconsideration. 36

Petitioner argues that the surety bond never became valid and enforceable since the Philippine Veterans Bank "did not accept being the obligee of the bond[.]" 37 Because the bond was not valid and perfected, he asserts that there was no unwarranted benefit or undue advantage caused to any party, absolving him of liability. 38

Petitioner also contends that he did not participate in the preparation, issuance, approval, and release of the surety bond. He argues that as the chief marketing official, he had no hand in evaluating or reviewing the surety bond applications, 39 claiming that he took in good faith Ecobel's bond application, which had the requisite collaterals from the Underwriting Committee's recommendation. Similarly, he avers that he prepared the Memorandum in the regular performance of his duties. He adds that he did not participate, let alone vote, in the deliberations and meetings of the Underwriting and Investment Committees. 40

Petitioner further argues that he only knew of the infirmities of the Ecobel collaterals almost a year after the surety bond had been issued. Upon learning of it, he immediately canceled the bond and returned the check intended as payment for the bond's first-year premium. 41 He also contends that the two (2) Certifications he had made contained only bare facts about the bond, and had no guarantees beyond what it carried on its face. 42

Moreover, petitioner insists that the documentary evidence presented before the Sandiganbayan were only photocopies, not admissible secondary evidence. 43 He claims that the prosecution did not even attempt to prove their due execution, 44 and that he has repeatedly objected to the documents' presentation during trial. 45

Furthermore, petitioner claims that no damage or injury to the government or to any party resulted from the issuance of the surety bond because not a single centavo was spent by the Government Service Insurance System for the bond. 46

Petitioner further points out that since his co-accused Edralin, who was the party deemed to have received the unwarranted benefit, was acquitted, then ultimately, the unwarranted benefit was not proven. 47

The issue for this Court's resolution is whether or not the guilt of petitioner Alex M. Valencerina was proven beyond reasonable doubt.

The Motion for Reconsideration is denied.

Petitioner merely rehashed the issues he raised in his initial Petition, which have already been sufficiently resolved by this Court in its December 10, 2014 Decision.

In convicting petitioner, the Sandiganbayan and this Court determined that the elements of the offense were duly established. The elements of the violation of Section 3 (e) of the Anti-Graft and Corrupt Practices Act were laid down in Ampil v. Office of the Ombudsman: 48

(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. 49

The first two (2) elements are proven as petitioner was then the vice president for marketing and support services of the Government Service Insurance System. There is no question that he was a public officer and the alleged acts were done while he was in office. 50

The third and last elements were also established.

For the third element to be established, an act must be done through manifest partiality, evident bad faith, or gross inexcusable negligence, the commission of which is either by dolo or culpa. Furthermore, proof of any of these modes is enough to convict under Section 3 (e) of the Anti-Graft and Corrupt Practices Act. 51 This Court defined these modalities:

There is "manifest partiality" when there is a clear, notorious or plain inclination or predilection to favor one side or person rather than another. "Evident bad faith" connotes not only bad judgment but also palpably and patently fraudulent and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive or ill will. It contemplates a state of mind affirmatively operating with furtive design or with some motive or self-interest or ill will or for ulterior purposes. "Gross inexcusable negligence" refers to negligence characterized by the want of even the slightest care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with conscious indifference to consequences insofar as other persons may be affected. 52 (Emphasis in the original)

Petitioner contends that he had no participation in the preparation, issuance, approval, or release of the surety bond. He says that he had no responsibility to evaluate the applications for surety bond, nor review evaluations already made by the Underwriting Committee. He points out that he made no guarantees beyond what the bond provided on its face. 53

However, an evaluation of the case shows that in issuing and negotiating the surety bond, petitioner acted in evident bad faith as he extended undue advantage to Ecobel.

The records show that he endorsed Ecobel's application despite knowing that the obligee of the loan was not the Philippine Veterans Bank, but a foreign lender. Petitioner himself testified that at the time he endorsed the application, Mallari had already informed him that Ecobel would have a foreign funder. 54 This shows his disregard of the Government Service Insurance System policy that requires the existence of government interest in the transaction before a bond may be approved. He cannot escape responsibility and claim that he had no hand in the approval of the surety bond.

Moreover, petitioner's statement in the Memorandum that the bond was fully secured by collaterals, when it was not, supports the conclusion that he had acted in bad faith. As the chief marketing official, petitioner must be aware that he is required to practice utmost prudence in guaranteeing a high-risk bond. Yet, in endorsing Ecobel's application, he failed to thoroughly review Ecobel's compliance with the requirements. That he belatedly knew that the collaterals were defective further proves his negligence.

As we stated in our Decision, petitioner's duties as vice president for marketing and support services were not merely perfunctory. He knew that the surety bond may only be issued if the government had an interest in the transaction, and that the bond must be secured by adequate collaterals. 55 This demonstrates Valencerina's conscious commission of a wrong.

Contrary to petitioner's claim, the two (2) Certifications he issued contained guarantees that the surety bond was a "genuine, authentic, valid[,] and binding obligation . . . and may be transferred to Bear, Stearns (sic) International Ltd. and any of its assignees[.]" 56 He issued these Certifications despite knowing that the obligee of the loan should have been the Philippine Veterans Bank. This refutes petitioner's defense that he was in good faith in issuing the Certifications, and that the Certifications contained only the bare facts about the bond.

Petitioner further argues that because the surety bond was not perfected, and there was no proof that Bear Stearns actually granted Ecobel the loan — which would be the corpus delicti — then no offense was committed.

This Court has already resolved this issue. To reiterate, the corpus delicti is not anchored on whether a loan was granted to Ecobel, but on the giving of unwarranted preference or benefit to another with evident bad faith, manifest partiality, or gross inexcusable negligence.

Petitioner cannot escape liability by arguing that since the Philippine Veterans Bank did not accept to be the obligee of the bond, there is no valid, perfected bond. This Court has found that the surety bond's nullity was precisely brought about by his actions. Had he not acted the way he did, this would not even have existed. 57 Because the Government Service Insurance System policy requires high-risk bonds to be secured by a counter-bond, Ecobel asked Philippine Veterans Bank to be the obligee of the bond. When the bank refused to accept the proposal, Ecobel sought Bear Stearns to be its obligee instead. Petitioner, then, cannot argue that there is no perfected bond. The prosecution was able to prove that petitioner gave unwarranted preference to Ecobel in issuing the surety bond. This is sufficient to warrant petitioner's conviction.

This Court also gives credence to the findings of the audit investigation team, which disclosed that Ecobel failed to pay the loan from Bear Stearns. This led to several demands upon the Government Service Insurance System to pay the obligation. Ecobel, therefore, received unwarranted benefit through the unjustified actions of the high-ranking officers of the Government Service Insurance System.

Additionally, petitioner cannot use the acquittal of his co-accused as a defense. This Court has held in Gonzales v. Presiding Judge of Branch I of RTC of Bohol58 that "[i]t does not necessarily follow under our rules of criminal procedure that once a co-accused is acquitted the other accused should also be exculpated because precisely the purpose of trial is to determine the liability of each of the accused." 59 Edralin's acquittal does not necessarily mean that there was no recipient of unwarranted benefit, or that the unwarranted benefit had not been proven.

Petitioner also claims that no damage or injury to the government or to any party resulted from the surety bond's issuance as the Government Service Insurance System did not spend a single centavo for it. 60

However, this Court has held that a violation of Section 3 (e) of the Anti-Graft and Corrupt Practices Act requires that the act resulted in undue injury to another party, and that this injury cannot be presumed even after a wrong has been established. 61

Here, damage and injury to the government is proven. Ecobel was able to use the surety bond and actually benefit from it when the foreign funder gave it US$10,000,000.00. Bear Stearns is now after this bond and even demanded that the Government Service Insurance System pay its obligation. State auditors recommended that it set up a US$10,000,000.00 contingency fund to make good of its surety bond. 62

Lastly, petitioner asserts that the Sandiganbayan merely relied on photocopies of the documents, which were not properly identified and authenticated. As such, these must have no probative value.

The Revised Rules on Evidence provides that if the original document is unavailable, its contents may be proved by secondary evidence by showing proof of its: (1) execution or existence of the original; (2) loss and destruction of the original or its non-production in court; and (3) the unavailability of the original is not due to bad faith on the part of the offeror. 63 The correct order of proof is as follows: existence, execution, loss, and lastly, contents. 64

This matter is not new. As this Court has already ruled, petitioner's argument is untenable as he himself adopted the documents' contents during trial and admitted that he issued the same Certifications. He testified:

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. 65

When petitioner testified on the contents of the Certifications, he also admitted that the documents exist and that he duly executed them. He even used the Certifications to build his defense that what he stated there were mere statements of facts and procedures. Contrary to his claim, petitioner bolstered the Certifications' existence, even explaining why he issued them.

All told, this Court does not find any reason to overturn its Decision convicting petitioner. He is guilty beyond reasonable doubt of violating Section 3 (e) of the Anti-Graft and Corrupt Practices Act.

WHEREFORE, the Motion for Reconsideration is DENIED. This Court's December 10, 2014 Decision is AFFIRMED.

SO ORDERED."

Very truly yours,

(SGD.) MARIA LOURDES C. PERFECTODivision Clerk of CourtBy:

TERESITA AQUINO TUAZONDeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 405-429.

2.Id. at 348-372. The Decision was penned by Associate Justice Jose Catral Mendoza, and concurred in by Associate Justices Antonio T. Carpio, Presbitero J. Velasco, Jr. (now a retired member of this Court), Martin S. Villarama, Jr. (now a retired member of this Court), and Marvic M.V.F. Leonen of the Second Division, Supreme Court.

3.Id. at 68-127. The Decision was penned by Associate Justice Efren N. Dela Cruz, and concurred in by Associate Justices Rodolfo A. Ponferrada and Rafael R. Lagos of the First Division, Sandiganbayan, Quezon City.

4.Id. at 128-139. The Resolution was penned by Associate Justice Efren N. Dela Cruz and concurred in by Associate Justices Rodolfo A. Ponferrada and Rafael R. Lagos of the First Division, Sandiganbayan, Quezon City.

5.Id. at 349.

6.Id.

7.Id. at 118.

8.Id. at 349.

9.Id. at 350.

10.Id. at 11.

11.Id. at 350.

12.Id.

13.Id.

14.Id. at 70.

15.Id. at 118.

16.Id. at 350-351.

17.Id. at 351.

18.Id. at 352.

19.Id.

20.Id. at 265 and 352.

21.Id. at 265.

22.Id. at 265 and 352.

23.Id. at 81 and 352.

24.Id. at 352.

25.Id. at 352-355. These infirmities include: (1) Absence of counter-bond prior to issuance as underwriting requirement to protect the interest of the Government Service Insurance System; (2) Absence of sufficient collateral as underwriting safety requirement, as Transfer Certificate of Title 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 prior approval of the Government Service Insurance System 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; (6) Issuance of the 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; (8) Insufficient and highly irregular evaluation of the bond application and its supporting documents, or of the character, capacity, and capital of Ecobel; and (9) Transfer Certificate of Title No. 66289, being one (1) of the collaterals, was found to be spurious.

26.Id. at 355.

27.Id.

28.Id. at 68-127.

29.Id.

30. Id. at 355.

31. Id. at 355-356.

32. Id. at 123.

33. Id. at 356.

34. Id. at 8-67.

35. Id. at 348-372.

36. Id. at 405-429.

37. Id. at 409.

38. Id.

39. Id. at 411.

40. Id.

41. Id. at 414.

42. Id. at 419.

43. Id. at 420.

44. Id.

45. Id. at 425-427.

46. Id. at 421-422.

47. Id. at 423.

48. 715 Phil. 733 (2013) [Per J. Perez, Second Division].

49. Id. at 755.

50. Rollo, p. 362.

51. Reyes v. People, 641 Phil. 91, 104 (2010) [Per J. Bersamin, Third Division] citing Fonacier v. Sandiganbayan, 308 Phil. 660 (1994) [Per J. Vitug, En Banc].

52. Abubakar v. People, G.R. Nos. 202408, 202409, & 202412, June 27, 2018, <http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64405> [Per J. Leonen, First Division] citing Uriarte v. People, 540 Phil. 477, 494-495 (2006) [Per J. Callejo, Sr., First Division].

53. Rollo, pp. 410-411.

54. Id. at 95-96.

55. Id. at 364.

56. Id. at 365-366.

57. Id. at 370.

58. 264 Phil. 463 (1990) [Per C.J. Fernan, Third Division].

59. Id. at 470.

60. Rollo, p. 421.

61. See Llorente, Jr. v. Sandiganbayan, 350 Phil. 820 (1998) [Per J. Panganiban, First Division].

62. Rollo, p. 474 citing the testimony of Ma. Cristina Dimagiba, TSN, August 21, 2008.

63. RULES OF COURT, Rule 130, sec. 5 provides:

   SECTION 5. When original document is unavailable. — When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its contents in some authentic document, or by the testimony of witnesses in the order stated.

64. Citibank, N.A. Mastercard v. Teodoro, 458 Phil. 480, 489 (2003) [Per J. Panganiban, Third Division].

65. Rollo, p. 368.