G.R. No. 248699 , February 05, 2025
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. JEORGE EJERCITO ESTREGAN, ARLYN LAZARO-TORRES, TERRYL GAMIT-TALABONG, KALAHI U. RABAGO, ERWIN P. SACLUTI, GENER C. DIMARANAN, AND MARILYN M. BRUEL, ACCUSED-APPELLANTS.

FACTS

In 2009, the United Boatmen Association of Pagsanjan (UBAP) filed a complaint before the Office of the Ombudsman against Municipality of Pagsanjan, Laguna Mayor Jeorge Ejercito Estregan, Vice-Mayor Crisostomo B. Vilar, Municipal Councilors Arlyn Lazaro-Torres, Terryl Gamit-Talabong, Kalahi U. Rabago, Erwin P. Sacluti, Gener C. Dimaranan, and Ronaldo C. Sablan, as well as private individual Marilyn M. Bruel, proprietor of First Rapids Care Ventures (FRCV). The complaint alleged that the accused public officials unlawfully entered into a Memorandum of Agreement (MOA) for Accident Protection and Assistance (APA) with Bruel’s FRCV without public bidding and despite FRCV not having a Certificate of Authority from the Insurance Commission. After preliminary investigation, the Ombudsman found probable cause for violation of Section 3(e) of Republic Act No. 3019 . An Information was filed before the Sandiganbayan accusing them of conspiring and acting with manifest partiality, evident bad faith, and/or gross inexcusable negligence by giving unwarranted benefit to Bruel/FRCV through the MOA, which was ratified by the Sangguniang Bayan despite the lack of public bidding under R.A. No. 9184 and FRCV’s lack of license from the Insurance Commission. The accused pleaded not guilty. The parties stipulated that the Sangguniang Bayan passed Municipal Ordinance No. 15-2008 authorizing Mayor Estregan to enter into a contract for APA services; FRCV submitted a written proposal; and on October 23, 2008, Estregan entered into the MOA with FRCV, which the SB ratified via Municipal Resolution No. 056-2008. The prosecution presented a witness from the Insurance Commission who identified a Letter-Opinion stating the MOA was a contract of insurance. The defense presented evidence that the APA program was needed due to accidents; public consultations were held; insurance companies like Philamlife and Oriental were contacted but were unable or unwilling to meet all requirements; FRCV’s proposal was found satisfactory and presented to the SB; and the funds for the program were sourced from the boat ride service fee, held in trust by the Municipal Treasurer, not from the general fund.

ISSUE

Whether the Sandiganbayan correctly convicted the accused-appellants of violation of Section 3(e) of Republic Act No. 3019 .

RULING

The Supreme Court reversed the Sandiganbayan Decision and acquitted all accused-appellants. The Court found that the prosecution failed to prove the elements of violation of Section 3(e) of R.A. No. 3019 beyond reasonable doubt. Specifically, the prosecution did not establish that the accused acted with manifest partiality, evident bad faith, or gross inexcusable negligence. The evidence showed that the accused public officials acted in good faith and with due diligence: they identified a public need for accident protection, conducted consultations, sought proposals, and chose FRCV after finding other insurance companies unsuitable. The act of entering into the MOA without public bidding was justified because the transaction involved the disbursement of a special trust fund, not public funds from the municipal treasury, thus falling under an exception to the requirement of public bidding under R.A. No. 9184 . Furthermore, the Court clarified that while the MOA constituted a contract of insurance, the lack of a Certificate of Authority for FRCV did not, by itself, establish criminal liability under R.A. No. 3019 without proof of corrupt intent or gross negligence. The presumption of innocence prevailed as the prosecution’s evidence did not overcome reasonable doubt.