G.R. Nos. 204568-83 and 207028-30. April 26, 2023.
HERMAN G. LIMBO, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT. [G.R. Nos. 207028-30] CECILIA LI, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

FACTS

Petitioner Herman G. Limbo was an Assistant Department Manager of the Philippine National Bank (PNB) assigned to its Cagayan de Oro Branch (PNB-CDO). Petitioner Cecilia Li was a valued client of PNB-CDO. Limbo, along with other PNB-CDO officers and employees, was charged with multiple counts of violating Section 3(e) of Republic Act No. 3019 for allegedly giving unwarranted benefits to the bank’s valued clients, including Li. The charges stemmed from the encashment of various checks (CBC, RCBC, PNB checks) negotiated by Li and other clients on April 18, 19, and 20, 1995, without prior clearance from the drawee banks and despite knowledge that the checks were unfunded. The checks were subsequently returned for reasons such as “Account Closed” or “Drawn Against Insufficient Funds” (DAIF), causing undue injury to the government in specified amounts totaling millions of pesos. The Informations alleged that the accused public officers, in the performance of their official functions, conspired with the clients, giving unwarranted benefits through evident bad faith and manifest partiality. Limbo and Li pleaded not guilty. The Sandiganbayan found them guilty, prompting these consolidated petitions.

ISSUE

Whether the Sandiganbayan correctly found petitioners Herman G. Limbo and Cecilia Li guilty beyond reasonable doubt of violating Section 3(e) of R.A. No. 3019 .

RULING

The Supreme Court affirmed the Sandiganbayan’s decision with modifications regarding the penalty. The Court found all elements of Section 3(e) of R.A. No. 3019 present. First, Limbo was a public officer, as PNB was a government-owned and controlled corporation at the time of the offense. Second, the acts were done in the discharge of his official functions. Third, he acted with evident bad faith and manifest partiality. Evident bad faith was shown by Limbo’s deliberate disregard of established bank policies requiring manager’s approval and clearance for out-of-town checks before encashment, and his failure to exercise due diligence given the irregular pattern of large-value check encashments. Manifest partiality was demonstrated by giving unwarranted preference to Li, a valued client, by allowing immediate encashment of uncleared checks contrary to standard procedures. Fourth, these acts caused undue injury to the government, as PNB suffered financial loss when the checks were dishonored. The Court rejected Limbo’s defenses, noting his approval signatures on the checks and his responsibility as an officer. Regarding Cecilia Li, the Court found her conspiracy with the public officers established by her active participation in negotiating the unfunded checks for encashment, benefiting from the scheme, and her knowledge of the irregular process. The Court modified the penalty, imposing an indeterminate sentence of six years and one month as minimum to ten years as maximum for each count, with perpetual disqualification from public office. The civil liability for the amounts stated in the Informations was affirmed with 6% interest per annum from finality until full payment.