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G.R.Nos.19501119.September30,2013.

GREGORIO SINGIAN, JR., petitioner, vs. SANDIGANBAYAN


(3RDDIVISION),THEPEOPLEOFTHEPHILIPPINES,andTHE
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT,
respondents.

Remedial Law Criminal Procedure Demurrer to Evidence A


demurrertotheevidenceisanobjectionbyoneofthepartiesinanaction,to
theeffectthattheevidencewhichhisadversaryproducedis

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*SECONDDIVISION.

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452 SUPREMECOURTREPORTSANNOTATED

Singian,Jr.vs.Sandiganbayan(3rdDivision)

insufficient in point of law, whether true or not, to make out a case or


sustaintheissue.Ademurrertotheevidenceisanobjectionbyoneofthe
parties in an action, to the effect that the evidence which his adversary
produced is insufficient in point of law, whether true or not, to make out a
caseorsustaintheissue.Thepartydemurringchallengesthesufficiencyof
the whole evidence to sustain a verdict. The court, in passing upon the
sufficiency of the evidence raised in a demurrer, is merely required to
ascertain whether there is competent or sufficient evidence to sustain the
indictmentortosupportaverdictofguilt.Sufficientevidenceforpurposes
of frustrating a demurrer thereto is such evidence in character, weight or
amount as will legally justify the judicial or official action demanded
according to the circumstances. To be considered sufficient therefore, the
evidence must prove: (a) the commission of the crime, and (b) the precise
degreeofparticipationthereinbytheaccused.
CriminalLawAntiGraftandCorruptPracticesAct(R.A.No.3019)
For one to be successfully prosecuted under Section 3(g) of RA 3019, the
following elements must be proven: 1) the accused is a public officer 2)
the public officer entered into a contract or transaction on behalf of the
government and 3) the contract or transaction was grossly and manifestly
disadvantageoustothegovernment.Foronetobesuccessfullyprosecuted
underSection3(g)ofRA3019,thefollowingelementsmustbeproven:1)
theaccusedisapublicofficer2)thepublicofficerenteredintoacontractor
transaction on behalf of the government and 3) the contract or transaction
was grossly and manifestly disadvantageous to the government. However,
private persons may likewise be charged with violation of Section 3(g) of
RA 3019 if they conspired with the public officer. Thus, if there is an
allegation of conspiracy, a private person may be held liable together with
the public officer, in consonance with the avowed policy of the AntiGraft
andCorruptPracticesActwhichistorepresscertainactsofpublicofficers
and private persons alike which may constitute graft or corrupt practices or
whichmayleadthereto.
Remedial Law Criminal Procedure Demurrer to Evidence The
resolution of a demurrer to evidence should be left to the exercise of sound
judicialdiscretion.At the outset, we emphasize that [t]he resolution of a
demurrer to evidence should be left to the exercise of sound judicial
discretion.Alowercourtsorderofdenialshallnotbedisturbed,thatis,the
appellatecourtswillnotreviewtheprosecu

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VOL.706,SEPTEMBER30,2013 453

Singian,Jr.vs.Sandiganbayan(3rdDivision)

tions evidence and precipitately decide whether such evidence has


established the guilt of the accused beyond a reasonable doubt, unless
accusedhasestablishedthatsuchjudicialdiscretionhasbeengravelyabused,
thereby amounting to a lack or excess of jurisdiction. Mere allegations of
suchabusewillnotsuffice.
Grave Abuse of Discretion Words and Phrases Grave abuse of
discretion is the capricious and whimsical exercise of judgment on the part
of the public officer concerned which is equivalent to an excess or lack of
jurisdiction.Grave abuse of discretion is the capricious and whimsical
exercise of judgment on the part of the public officer concerned which is
equivalenttoanexcessorlackofjurisdiction.Theabuseofdiscretionmust
be so patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law as where the power is exercised in an arbitrary and
despoticmannerbyreasonofpassionorhostility.
Remedial Law Criminal Procedure Prosecution of Offenses The
presenceorabsenceoftheelementsofthecrimeisevidentiaryinnatureand
isamatterofdefensethatmaybepasseduponafterafullblowntrialonthe
merits, and the validity and merits of a partys defense or accusation, as
well as admissibility of testimonies and evidence, are better ventilated
duringtrialproper.Infine,weholdthatthepresenceorabsenceofthe
elementsofthecrimeisevidentiaryinnatureandisamatterofdefensethat
maybepasseduponafterafullblowntrialonthemerits,andthevalidity
and merits of a partys defense or accusation, as well as admissibility of
testimonies and evidence, are better ventilated during trial proper.
Petitioners claims and defenses in his Demurrer to Evidence can best be
tackled during trial. In the presentation of his defense, he shall have the
opportunity to explain or show why he should not be made liable. For
example, if there is any truth to the allegation in his Demurrer of Evidence
thattheDeedofUndertakingwasaltered,orthatthesignaturethereinaffixed
isnothisown,suchthatthereariseseriousdoubtsastohisparticipationin
the execution of said document, this can be resolved only upon proof
presentedduringtrial.Petitionermustpresentevidenceregardingsuchclaim,
thetruthofwhichhecandemonstrateduringtrial.SincethisCourtisnota
trieroffacts,thereisnowaythatthisissuecanberesolvedbythisCourtat
thisstageoftheproceedings.

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454 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

SPECIALCIVILACTIONintheSupremeCourt.Certiorari.
ThefactsarestatedintheopinionoftheCourt.
UranzaandAssociatesforpetitioner.
OfficeoftheSolicitorGeneralforrespondents.

DELCASTILLO,J.:
ThegrantordenialofaDemurrertoEvidenceislefttothesound
discretion of the court, and its ruling on the matter shall not be
disturbedintheabsenceofagraveabuseofsuchdiscretion.
ThisPetitionforCertiorariAdCautelam1seekstosetasidethe
August5,2010Resolution2oftheSandiganbayaninCriminalCase
Nos. 2629726305, denying petitioner Gregorio Singian, Jr.s
Demurrer to Evidence3 and the November 18, 2010 Resolution4
denyingreconsiderationthereof.
Antecedents
ThecriminalcasesinvolvedinthepresentPetitionhavebeenthe
subjectofapreviousdispositionoftheCourt,specificallySingian,
Jr. v. Sandiganbayan.5 In said case, the Court made the following
recitaloffacts:

Atty. Orlando L. Salvador was Presidential Commission On Good


GovernmentConsultantondetailwiththePresidentialAdHocCommittee
onBehestLoans(Committee).HewasalsothecoordinatoroftheTechni

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1Rollo,pp.348.
2Id.,atpp.5067pennedbyAssociateJusticeAlexL.Quirozandconcurredinby
AssociateJusticesFranciscoH.Villaruz,Jr.andSamuelR.Martires.
3Id.,atpp.74105.
4Id.,atpp.6872.
5514Phil.536478SCRA348(2005).

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Singian,Jr.vs.Sandiganbayan(3rdDivision)

cal Working Group composed of officers and employees of


government financing institutions to examine and study the reports
and recommendations of the Asset Privatization Trust relating to
loan accounts in all government financing institutions. Among the
accounts acted upon by the Committee were the loans granted to
IntegratedShoe,Inc.(ISI)bythePhilippineNationalBank(PNB).
It would appear that on 18 January 1972, ISI applied for a fiveyear
confirmed irrevocable deferred letter of credit amounting to
US$2,500,000.00(P16,287,500.00)tofinanceitspurchaseofacomplete
lineofmachineryandequipment.Theletterofcreditwasrecommendedto
thePNBBoardofDirectorsbythenSeniorVice[]
President,Mr.ConstantinoBautista.
On 27 January 1972, the PNB approved the loan, subject to certain
stipulations.Thesaidletterofcreditwastobesecuredbythefollowing
collaterals: a) a second mortgage on [a] 10,367square meter lot under
Transfer Certificate of Title No. 218999 with improvements, machinery
and equipment b) machinery and equipment to be imported under the
subjectletterofcreditandc)assignmentofUS$0.50perpairofshoesof
ISIs export sales. It was further subjected to the following pertinent
conditions: a) that the letter of credit be subject to joint and several
signaturesofMr.FranciscoJ.Teodoro,Mrs.LeticiaT.Teodoro,MarfinaT.
Singian,TomasTeodoro,andGregorioSingian,Jr.b)thatISI,whichhasa
paidup capital amounting to P1,098,750.00 as of January 1972, shall
increaseitsauthorizedcapitaltoP5,000,000.00,andintheeventthatcash
receiptsdonotcomeuptotheprojections,orasmayberequiredbythe
bank, ISI will further increase its capitalization and the present
stockholderswillsubscribetotheirpresentholdingsandc)thatISIshall
submitothercollateralsincasetheappraisedvalueofthenewmachinery
andequipmentbeinsufficient.
ISI was further extended the following subsequent loan
accommodations:
1.P1,500,000.00 on 10 February 1972 for the purchase of raw
materials

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Singian,Jr.vs.Sandiganbayan(3rdDivision)
2.P1,000,000.00on18January1973asexportadvance
3.P1,500,000.00on21March1973asexportadvance
4.P600,000.00on06March1974ascreditline
5.P2,500,000.00renewedon15December1976
6.P5,000,000.00on19November1978asexportadvance
7.P1,500,000.00on04August1980asexportadvanceand
8.P7,000,000.00on15December1980alsoasanexportadvance.
The Committee found that the loans extended to ISI bore
characteristics of behest loans specifically for not having been secured
withsufficientcollateralsandobtainedwithunduehaste.
As a result, Atty. Orlando Salvador filed with the Office of the
Ombudsman a sworn complaint dated 20 March 1996, for violation of
Section3,paragraphs(e)and(g),ofRepublicActNo.3019,asamended,
against the following: Panfilo Domingo, former PNB President,
Constantino Bautista, former PNB Senior Vice[]President, Domingo
Ingco,formermemberofthePNBBoardofDirectors,JohnDoes,former
membersofthePNBBoardofDirectors,FranciscoTeodoro,Presidentof
ISI,LeticiaTeodoro,Vice[]PresidentofISI,MarfinaSingian,Incorporator
ofISI,TomasTeodoro,GeneralManagerofISI,andGregorioSingian,Jr.,
ExecutiveVice[]PresidentofISI.Thecomplaint,docketedasOMB096
0967,wasassignedtoGraftInvestigationOfficerIAtty.EdgarR.Navales
(Investigator Navales) of the Evaluation and Preliminary Investigation
Bureau(EPIB)forinvestigation.
xxxx
Hence, the corresponding eighteen (18) Informations against
petitionerandhiscoaccusedforviolationofSection3(e)and(g)ofRep.
ActNo.3019,docketedasCriminalCasesNo.26297toNo.26314,were
filedbeforetheSandiganbayanandwereraffledtotheThirdDivi

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Singian,Jr.vs.Sandiganbayan(3rdDivision)

sionthereof.Theeighteen(18)Informationscorrespondtothenine
(9)loanaccommodationsgrantedtoISI,eachloanbeingthesubject
of two informations alleging violations of both paragraphs of
Section3ofRep.ActNo.3019.6

Thus,hereinpetitionerwaschargedwithninecountsofviolation
of Section 3(e),7 and another nine counts of violation of Section
3(g),8 of Republic Act No. 3019 (RA 3019), or the AntiGraft and
Corrupt Practices Act. Docketed as Criminal Case Nos. 26297
26314,thecasesinvolvedthepurportedgrantingofbehestloansby
the governments Philippine National Bank (PNB) to Integrated
Shoes, Inc. (ISI), in various amounts and on different dates as
aboveenumerated.

The Informations9 covering Section 3(e) charged that Panfilo


The Informations9 covering Section 3(e) charged that Panfilo
Domingo (Domingo), then PNB Director/President/Vice President
(Europe) Domingo C. Ingco (Ingco), then PNB Director and
Constantino Bautista (Bautista), then PNB Senior Executive Vice
President, while in the performance of their official functions and
takingadvantageoftheirofficialposi

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6Id.,atpp.539543.
7 Section3.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:
xxxx
(e)Causinganyundueinjurytoanyparty,includingtheGovernment,orgiving
anyprivatepartyanyunwarrantedbenefits,advantageorpreferenceinthedischargeof
his official administrative or judicial functions through manifest partiality, evident
bad faith or gross inexcusable negligence. This provision shall apply to officers and
employeesofofficesorgovernmentcorporationschargedwiththegrantoflicensesor
permitsorotherconcessions.
8 g) Entering, on behalf of the Government, into any contract or transaction
manifestlyandgrosslydisadvantageoustothesame,whetherornotthepublicofficer
profitedorwillprofitthereby.
9 Rollo, pp. 134136, 140142, 146148, 152154, 158160, 164166, 170172, 176
178,182184.

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458 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

tions,conspiredwithprivateindividuals,specificallyofficersofISI,
including petitioner, who was ISIs Executive Vice President, in
willfully, unlawfully and criminally causing undue injury to the
government and giving unwarranted benefits, advantage and
preferencetoISIbyaccommodatingandgrantingseveralloansand
advances to the latter, despite knowing that it lacked sufficient
capitalization, or failed to give adequate collateral or raise its
workingcapitaltosecurethegovernmentsinterestincaseitfailed
topaysaidloans,asinfactitfailedtopaytheseloans.
On the other hand, the Informations10 covering Section 3(g)
chargedtheaboveindividuals,includingpetitioner,withconspiring,
confederating,andwillfully,unlawfullyandcriminallyenteringinto
the abovementioned loan transactions which are grossly and
manifestlydisadvantageoustothegovernment,forlackofsufficient
capitalizationoradequatecollateral,andforfailureofISItoraiseits
workingcapitaltosecurethegovernmentsinterestincaseitfailed
topaysaidloans,whichindeedISIfailedtopay.
OnJanuary27,2004,petitionerenteredapleaofnotguiltyonall
counts. All the other accused were arraigned as well, except for
Bautista,whopassedawaypriortohisscheduledarraignment.
OnApril29,2005,theSandiganbayandismissedCriminalCase
Nos.2630626314.11OnOctober6,2007,theaccusedIngcopassed
away as a result, the cases against him were dismissed as well.
AccusedDomingolikewisepassedawayonJune26,2008resulting
in an October 29, 2008 Resolution wherein the Sandiganbayan
droppedthecasesagainsthim.
Trial with respect to the remaining cases ensued. For its
testimonial evidence, the prosecution called to the stand nine
witnesses:

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10Id., at pp. 131133, 137139, 143145, 149151, 155157, 161163, 167169, 173
175,179181.
11CoveringSection3(e)ofRepublicActNo.3019.

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1.Director Danilo R.V. Daniel, then Coordinator of the


TechnicalWorkingGrouponBehestLoans(TWG)andDirectorof
the Research Division of the Presidential Commission on Good
Government (PCGG), who testified on the investigation conducted
by the TWG of the ISI account and on various documents relative
thereto, including the Fourteenth (14th) Report of Presidential Ad
Hoc FactFinding Committee on Behest Loans12 (Ad Hoc
Committee) dated July 15, 1993 which he drafted, and which
characterizedtheISIaccountasabehestloan13
2.Atty. Reginald Bacolor from the Legal Department,
Privatization Management Office of the Asset Privatization Trust
(APT),whotestifiedonthedeeds,documentsandtitlescoveringthe
foreclosed properties offered as collaterals in the ISI account and
thereaftersoldbythegovernmentthroughtheAPT14
3.Atty.EdwinFlorV.Barroga,thenDeputyRegistrarofDeeds
of Binangonan, Rizal, who testified on the property offered as
collateral by ISI, which was the subject of a prior encumbrance to
theGovernmentServiceInsuranceSystem(GSIS)15
4.Atty. Cinderella Benitez, Securities Counsel II of the
SecuritiesandExchangeCommission(SEC),whotestifiedonISIs
SEC documents, specifically its capitalization and financial status.
SheidentifiedcertifiedcopiesofISIsArticlesofIncorporation,By
Laws,AmendedArticlesofIncorporation,CertificatesofIncreaseof
CapitalStock,etc.16
5.Atty.MaryAnnB.Morales,SECSecuritiesCounselIIIfrom
its Registration and Monitoring Department, who likewise testified
onISIsSECdocuments.SheidentifiedISIs

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12Rollo,pp.304309.
13Id.,atpp.5859.
14Id.,atp.60.
15Id.,atp.61.
16Id.,atpp.5657.

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Singian,Jr.vs.Sandiganbayan(3rdDivision)

General Information Sheets, Schedule of Stockholders, Subscribed


and PaidUp Capital, Certificate of Corporate Filing/ Information,
etc. She testified, among others, that as of 1973, ISIs subscribed
capital stock was only P1.6 million, while its paidup capital was
merelyP1,298,750.0017
6.CesarLuisPargas,ofthePrivatizationManagementOffice,
APT, custodian of ISIs loan documents, who testified on and
brought with him the loan documents, deeds, titles, notes, etc.
coveringtheISIaccount18
7.Claro Bernardino, Senior Manager of PNBs Human
Resource Group, who brought the personnel records/certificates of
employmentoftheaccusedDomingoandIngco19
8.Ramonchito Bustamante, Manager of the Loans and
ImplementingServicesDivisionofPNB,expertwitnessonbanking
policyandPNBsloanpolicies,aswellasISIsloandataand20
9.Stephen Tanchuling, Chief Administrative Officer of the
Records Division of the Research Department of the PCGG,
custodian of documents turned over to PCGG by the Ad Hoc
Committee. He testified that his function was to authenticate
documentsinhiscustody,whichconsistedofrecordstransmittedto
the Ad Hoc Committee by different government agencies. He
identifiedaswelltheExecutiveSummary21of theISIaccount the
Fourteenth (14th) Report of Presidential Ad Hoc FactFinding
Committee on Behest Loans dated July 15, 1993 the Executive
Summary of the Ad Hoc Committee Findings and other relevant
documents.22

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17Id.,atp.58.
18Id.,atp.55.
19Id.,atpp.5758.
20Id.,atpp.5960.
21Id.,atpp.295303.
22Id.,atp.62.

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For its documentary evidence, the prosecution presented the


following,amongothers:
1)Photocopy of the Fourteenth (14th) Report of Presidential
AdHocFactFindingCommitteeonBehestLoans23whichlistedISI
asamongthecorporationswithloansobtainedfromthegovernment
or government banks (in this case, PNB) which were found to
possessthecharacteristicsofabehestloan
2)PhotocopyofanExecutiveSummaryofFindingsoftheAd
HocCommittee,24detailingtheparticularsoftheISIaccount
3)PhotocopyofthecertifiedtruecopyoftheJanuary10,1972
Memorandum25 from Bautista to the PNB Board of Directors,
detailing Bautistas findings and recommendations regarding ISIs
application for a $2.5 million (P16,287,500.00) letter of credit for
thepurposeofpurchasingmachineryandequipmentforanewshoe
factorythenbeingbuiltinBataan.
4)Certified photocopy of a Deed of Undertaking and
Conformity to Bank Conditions26 (Deed of Undertaking) dated
March24,1972executedbyISIinfavorofPNB
5)CertifiedphotocopyofaDeedofAssignment27datedMarch
24,1972,assigning$0.50perpairofshoesofallexportsalesofISI
infavorofPNB
6)Certified photocopy of Chattel Mortgage with Power of
Attorney28executedbyISIinfavorofPNB
7)Certified true copy of Certificate of Filing of Certificate of
IncreaseofCapitalStock29issuedbytheSECdatedFebru

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23Id.,atpp.305309.
24Id.,atpp.295303.
25Id.,atpp.258268.
26Id.,atpp.286291.
27Id.,atpp.292293.
28SeeFormalOfferofExhibits,id.,atpp.197219,atp.200.
29Id.,atp.294.

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462 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

ary 6,1974,showing that ISI increased its authorized capital stock


fromP3milliontoP7millionand
8)CertifiedtruecopyoftheByLawsofIntegratedPacific,Inc.
(ISIspredecessorcorporation).30
After the presentation of its testimonial and documentary
evidence,theprosecutionresteditscaseandfileditsFormalOfferof
Exhibits.31 The respondent court admitted in toto the States
documentaryexhibits.
PetitionersDemurrertoEvidence
On February 17, 2010, petitioner, with prior leave, filed a
DemurrertoEvidence32anchoredonthefollowinggrounds:(1)lack
ofproofofconspiracywithanyPNBofficial(2)thecontractswith
PNBcontainedprovisionsthatarebeneficial,andnotmanifestlyand
grosslydisadvantageous,tothegovernment(3)theloanscouldnot
be characterized as behest loans because they were secured by
sufficient collaterals and ISI increased its capitalization and (4)
assuming the loans are behest loans, petitioner could not be held
liableforlackofanyparticipation.33
In particular, petitioner claimed that the prosecution failed to
adduce evidence of conspiracy to defraud the government because
his coaccused from PNB had no power to approve the alleged
behestloansthatifatheoryofconspiracyweretobepursued,then
all the members of the PNBs Board of Directors at the time the
loansandcreditaccommodationstoISIwereapproved,andnotonly
DomingoandIngco, should have beenimpleaded as they were the
oneswhodirectedPNBsaffairsthattheprosecutionfailedtoshow
thatheexercised

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30Id.,atpp.272285.
31Id.,atpp.197219.
32Id.,atpp.74105.
33Id.,atpp.7476.

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any kind of influence over PNBs Board of Directors in order to


ensurethegrantofthe loans and accommodations applied for and
for failure to present evidence that the accused colluded with each
otherinenteringintotheloanagreementsandaccommodations.
Petitioner contended further that the contracts and agreements
entered into by and between PNB and ISI were standard contracts
used by PNB in its dealings with its clients that the terms thereof
werecouchedinwordsandfashionedinamannerthatfavoredthe
bankthattheagreementsguaranteedrepaymentoftheloanandthe
putting up of sufficient collateral, and provided for interest and
penalties in the event of breach, and thus were not grossly and
manifestlydisadvantageoustothegovernment.
Next, petitioner argued that the subject loans were not
undercollateralized that ISI was not undercapitalized as the
corresponding increase in its authorized capital stock and paidup
capital was timely made and that the loans could not have been
characterizedasbehestloansconsideringthefollowingstipulations:
a) the assets intended for acquisition through the letter of credit
would serve as the collateral therefor b) the officers and majority
stockholders of ISI were made jointly and severally liable for its
obligations c) ISI may not declare dividends while the loans are
subsistingd)PNBisgiventherighttodesignateitsComptrollerin
ISI and e) even if it is assumed for the sake of argument that the
subjectloanswereundercollateralized,thisfactstandingalone
doesnotmakeforabehestloan,asthepresenceofatleasttwo(2)
criteria out of the eight enumerated in Presidential Memorandum
OrderNo.61datedNovember9,1992isrequiredtocharacterizethe
loansasbehestloans.
Assuming that the loan agreements are behest loans, petitioner
claimed that he may not be held liable because his indictment was
based solely on the Deed of Undertaking which was altered such
that his name was stricken out and instead the name Gregorio T.
Teodorowasinsertedthatthe

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464 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

accounteemortgagorassignor under said deed was ISI that the


obligationswereassumedbyISIthatISIhadalreadyfullycomplied
withallitsobligationsunderthedeedandthathewasnotamember
of ISIs Board of Directors, which alone was tasked as ISIs
governingbody with the observance of the obligations set forth
under the deed nor may he seek to compel action thereon at a
stockholdersmeeting,asheisnotashareholderofISIeither.
Finally,petitionerclaimedthattheAdHocCommitteedocuments
specifically the Executive Summary and Fourteenth (14th)
Report of Presidential Ad Hoc FactFinding Committee on Behest
Loansareinadmissiblefornotbeingphotocopiesoftheoriginals,
butmerecopiesofphotocopiesinthecustodyofthePCGGandthat
theywerepreparedandissuedbyindividualswhohavenopersonal
knowledge of the facts and circumstances which transpired during
theproceedingsadvertedto.
Petitioner thus prayed that as against him, Criminal Case Nos.
2629726305bedismissedforinsufficiencyofevidence.
ProsecutionsOpposition
InitsOpposition,34theprosecutioninsistedthatconspiracymay
beinferredfromthefollowingpatternofevents:
a.Thefrequencyoftheloansorclosenessofthedatesatwhichtheyweregranted
b.Thequantityoftheloansgranted
c.Thefailureof[PNB]toverifyandtotakeanyactionon[ISIsfailure]toputup
additionalcapitalizationandadditionalcollateralsand
d.Theeventualabsenceofanyactionby[PNB]tocollectfullpaymentfromISI.35

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34Id.,atpp.525539.
35Id.,atp.531.

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The prosecution noted that without ISI putting up additional


capitalizationorcollateral,PNBkeptgrantingloanstoit,suchthat
in 1973, its indebtedness already rose to P16,360,000.00 while its
capital stock stood at only P7 million that petitioner is intimately
connected with the incorporators and officers of ISI Leticia
Teodoroishismotherinlaw,whileFranciscoTeodoroishisfather
inlaw and Marfina TeodoroSingian is his wife that as of 1983,
ISIs debt to PNB amounted to P71,847,217.00, as a result of the
undercapitalized and undercollateralized loans extended to it and
thatassignatorytotheDeedofUndertaking,petitionerassumedthe
obligationsofasurety.
Finally, the prosecution noted that petitioners arguments in his
DemurrertoEvidenceconstitutemattersofdefensewhichshouldbe
passedupononlyaftertrialonthemerits.
RulingoftheSandiganbayan
On August 5, 2010, the Sandiganbayan issued the first assailed
Resolution,whichdecreedasfollows:

WHEREFORE, considering all the foregoing, this Court


DENIES the Demurrer to Evidence filed by accused Gregorio
Singian, Jr. as the evidence for the prosecution sufficiently
established the essential elements of the offense charged and
overcamethepresumptionofinnocenceinfavorofsaidaccused.
SOORDERED.36

PetitionersMotionforReconsideration37havingbeendeniedon
PetitionersMotionforReconsideration37havingbeendeniedon
November 18, 2010 by the respondent court, he filed the present
PetitionforCertiorari.

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36Id.,atp.67.Emphasesintheoriginal.
37Id.,atpp.109130.

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466 SUPREMECOURTREPORTSANNOTATED
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Issues
Petitionerraisesthefollowingissues:

THE RESPONDENT SANDIGANBAYAN ACTED WITH GRAVE


ABUSEOFDISCRETIONAMOUNTINGTOLACKOREXCESS
OF JURISDICTION WHEN IT ISSUED THE ASSAILED
[RESOLUTIONS]XXXCONSIDERINGTHAT:
I.
THEFIRSTELEMENTOFSECTION3(G)OFR.A.3019ISNOT
PRESENT BECAUSE THE EXISTENCE OF CONSPIRACY IS
NEGATEDBYTHEFACTTHATTHEPUBLICOFFICERSWHO
WERE RESPONSIBLE FOR GRANTING THE LOANS IN
QUESTION WERE NEVER CHARGED, ACCUSED OR
INCLUDED IN THE INFORMATIONS SUBJECT OF THESE
CASES.
II.
EVEN IF IT IS PRESUMED, PURELY IN GRATIA
ARGUMENTIS, THAT A CONSPIRACY ATTENDED THE
GRANT OF THE QUESTIONED LOANS TO ISI, THERE IS,
NEVERTHELESS, NO OVERT ACT ATTRIBUTABLE TO THE
PETITIONER THAT EVEN REMOTELY JUSTIFIES HIS
INCLUSION IN THE PROSECUTIONS CONSPIRACY
DRAGNET.
III.
THE PROSECUTIONS EXHIBITS C (ALSO MARKED AS
EXHIBIT RR) AND QQ WHICH THE PROSECUTION
FOISTED TO MAKE IT APPEAR THAT THE CREDIT
ACCOMMODATIONS SUBJECT OF THE CRIMINAL CASES
BELOW ARE BEHEST LOANS, DO NOT HAVE ANY
PROBATIVEVALUEANDARECOMPLETELYINADMISSIBLE
BECAUSE THEY ARE UNDISPUTABLY AND BLATANTLY
HEARSAY.38

_______________
38Id.,atpp.2223.

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Singian,Jr.vs.Sandiganbayan(3rdDivision)

PetitionersArguments
Essentially,petitionerreiteratesallhisargumentsinhisDemurrer
to Evidence and Motion for Reconsideration of the respondent
courtsdenialthereof.Heemphasizes,however,thathehadnothing
todowiththeapplicationandgrantofthequestionedloans,sincehe
was never a member of ISIs Board of Directors which, under the
lawandISIbylaws,hadthesolepowerandauthoritytoapproveand
obtain loans and give collaterals to secure the same nor is he a
stockholderofISI.Norhasitbeenshownfromthetestimonialand
documentary evidence that as Executive Vice President, he
participatedinISIsloanandcredittransactions,orthatheactively
participatedinthecommissionofthecrimesofwhichheischarged.
Withoutsuchproof,petitionerbelievesthathemaynotbecharged
withconspiracy.
Petitioner adds that no evidence was presented as well to show
that he had any participation in PNBs failure to verify and take
action against ISI to compel it to put up additional capital and
collaterals,orthathewasresponsibleforPNBsfailuretocollector
securefullpaymentoftheISIcredit.
Finally, petitioner justifies his resort to certiorari on the
argument that the collective acts of the prosecution and the
respondentcourtconstituteadenialofhisconstitutionalrighttodue
process, which gives ground for the availment of the extraordinary
remedy.39
RespondentsArguments
In its Comment,40 the prosecution asserts that the respondent
court did not commit grave abuse of discretion in denying the
DemurrertoEvidencearguingthatinpetitioners

_______________
39CitingToledo,Jr.v.People,174Phil.58285SCRA355(1978).
40Rollo,pp.461497.

468

468 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

case, all the elements under Section 3(g) exist to hold petitioner
liable. It adds that petitioner was part of the conspiracy to defraud
the government, as evidenced by his participation and signature in
theDeedofUndertaking,thetermsofwhichISIviolatedandPNB
failedtoenforce.
On the other hand, the PCGG in its Comment41 adopts the
arguments of the prosecution and asserts that the respondent court
arrivedatitsconclusionaftercarefulexaminationoftherecordand
the evidence, which justify a finding sustaining petitioners
indictment.ItaddsthatalltheelementsofthecrimeunderSection
3(g) have been proved, which thus justifies a denial of petitioners
DemurrertoEvidence.
OurRuling
TheCourtdismissesthePetition.
Demurrertoevidence
Ademurrertotheevidenceisanobjectionbyoneoftheparties
in an action, to the effect that the evidence which his adversary
producedisinsufficientinpointoflaw,whethertrueornot,tomake
out a case or sustain the issue. The party demurring challenges the
sufficiencyofthewholeevidencetosustainaverdict.Thecourt,in
passinguponthesufficiencyoftheevidenceraisedinademurrer,is
merelyrequiredtoascertainwhetherthereiscompetentorsufficient
evidencetosustaintheindictmentortosupportaverdictofguilt.42
Sufficient evidence for purposes of frustrating a demurrer
thereto is such evidence in character, weight or amount as will
legallyjustifythejudicialorofficialactiondemandedaccordingto
thecircumstances.Tobeconsideredsufficient

_______________
41Id.,atpp.549568.
42Soriquezv.Sandiganbayan(FifthDivision),510Phil.709,716474SCRA222,
228(2005).

469

VOL.706,SEPTEMBER30,2013 469
Singian,Jr.vs.Sandiganbayan(3rdDivision)

therefore,theevidencemustprove:(a)thecommissionofthecrime,
and(b)theprecisedegreeofparticipationthereinbytheaccused.43
ElementsofSection3(g),RA3019
ForonetobesuccessfullyprosecutedunderSection3(g)ofRA
3019, the following elements must be proven: 1) the accused is a
public officer 2) the public officer entered into a contract or
transaction on behalf of the government and 3) the contract or
transaction was grossly and manifestly disadvantageous to the
government.44 However, private persons may likewise be charged
withviolationofSection3(g)ofRA3019iftheyconspiredwiththe
publicofficer.Thus,ifthereisanallegationofconspiracy,aprivate
person may be held liable together with the public officer, in
consonance with the avowed policy of the AntiGraft and Corrupt
PracticesActwhichistorepresscertainactsofpublicofficersand
privatepersonsalikewhichmayconstitutegraftorcorruptpractices
orwhichmayleadthereto.45
TheSandiganbayanfoundcompetent
orsufficientevidencetosustainthe
indictmentortosupportaverdictof
guiltforviolationofSection3(g),
RA3019
The Sandiganbayan found that the prosecution presented
sufficient or competent evidence to establish the three material
elementsofSection3(g)ofRA3019.First,althoughpeti

_______________
43Gutibv.CourtofAppeals,371Phil.293,305312SCRA365,376(1999).
44Navav.Palattao,531Phil.345,372499SCRA745,771(2006).
45Gov.Sandiganbayan,G.R.No.172602,April16,2009,585SCRA404,405406.

470

470 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

tionerisaprivateperson,hewasshowntohaveconnivedwithhis
coaccused. Second, ISI and PNB entered into several loan
transactions and credit accommodations. Finally, the loan
transactionsproveddisadvantageoustothegovernment.
Thereisnograveabuseofdis
cretiononthepartoftheSandi
ganbayanindenyingpetitioners
DemurrertoEvidence
Attheoutset,weemphasizethat[t]heresolutionofademurrer
to evidence should be left to the exercise of sound judicial
discretion. A lower courts order of denial shall not be disturbed,
that is, the appellate courts will not review the prosecutions
evidence and precipitately decide whether such evidence has
established the guilt of the accused beyond a reasonable doubt,
unlessaccusedhasestablishedthatsuchjudicialdiscretionhasbeen
gravely abused, thereby amounting to a lack or excess of
jurisdiction.Mereallegationsofsuchabusewillnotsuffice.46
Grave abuse of discretion is the capricious and whimsical
exercise of judgment on the part of the public officer concerned
whichisequivalenttoanexcessorlackofjurisdiction.Theabuseof
discretionmustbesopatentandgrossastoamounttoanevasionof
apositivedutyoravirtualrefusaltoperformadutyenjoinedbylaw,
or to act at all in contemplation of law as where the power is
exercisedinanarbitraryanddespoticmannerbyreasonofpassion
orhostility.47
In this case, petitioner miserably failed to present an iota of
evidence to show that the Sandiganbayan abused, much more,
gravelyabused,itsdiscretionindenyingpetitioners

_______________
46Alarillav.Sandiganbayan,393Phil.143,154338SCRA485,494495(2000).
47Singian,Jr.v.Sandiganbayan,supranote5atpp.545546p.357.

471

VOL.706,SEPTEMBER30,2013 471
Singian,Jr.vs.Sandiganbayan(3rdDivision)

DemurrertoEvidence.WeagreewiththePCGGsobservationthat
the Sandiganbayan arrived at its conclusion after a careful and
deliberateexaminationandassessmentofalltheevidencesubmitted.
AcloserscrutinyoftheassailedResolutionswouldindeedshowthat
the Sandiganbayan meticulously discussed both testimonial and
documentary evidence presented by the prosecution.48 It was only
after a careful analysis of the facts and evidence presented did the
respondentcourtlaydownitsfindingsandconclusions.49
Based on the evidence presented, the Sandiganbayan was
convinced that all three elements of Section 3(g), RA 3019 were
satisfactorily established. It found that PNB and ISI entered into
several contracts or loan transactions. The Sandiganbayan also
assessedthatpetitionerconspiredwithhiscoaccusedindefrauding
the government considering (1) the frequency of the loans or
closenessofthedatesatwhichtheyweregranted(2)thequantityof
theloansgranted(3)thefailureofthebanktoverifyandtotakeany
action on the failure of ISI to put up additional capitalization and
additionalcollateralsand(4)theeventualabsenceofanyactionby
the Bank to collect full payment from ISI.50 The Sandiganbayan
ratiocinatedthat

xxxtheloanssubjectofthiscaserefertonotjustonebutseveral
loans.Thefirsttwoloansweregrantedinaspanoftwomonthsxxx
ThefirstloanwasintheamountofP16,287,500.00whenthecapital
stock of ISI amounted to only P1,000,000.00. This was followed by
twoadditionalloans[in]JanuaryandMarch1973xxxthenanother
loan x x x in the following year x x x. Two years later x x x ISI
obtained another loan x x x which was succeeded by an additional
loanxxx.Still,ISIwasgrantedtwomoreloansxxx.

_______________
48Rollo,pp.5562.
49Id.,atpp.6267.
50Id.,atp.63.

472

472 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

xxxx
However,allloanssubjectofthiscaseweregranteddespitefailure
ofISItoraiseitsworkingcapital,andtoputupadditionalcollateral.
The Certificate of Filing of Amended Articles of Incorporation and
the Amended Articles of Incorporation likewise show that ISI last
increased its authorized capital stock to P7,000,000.00 on April 27,
1973, when the indebtedness of the corporation was already
P16,360,000.00. Indeed, it would appear that inaction on the part of
the PNB to notify ISI to further increase its capital and the
corresponding inaction on the part of ISI to comply with its
undertakingindicateconspiracybetweentheaccused.
Accusedmovant further negates his liability by asserting that his
namedoesnotappearintheDeedofUndertaking,andneitherhashe
signed the same. A cursory examination of the Deed, however,
reveals otherwise. It also bears stressing at this point that as he has
never denied his position as Executive Vice[] President of ISI, he
would undeniably have participation in its transactions, especially
whereloanaccommodationsofthecorporationareconcerned.51

The Sandiganbayan also found that the loan transactions were


grossly and manifestly disadvantageous to the government. Based
onthedocumentaryevidencepresentedbytheprosecution,itnoted
that ISI was undercapitalized while the loans were
undercollateralized.Italsonotedthatthegovernmentwasonlyable
to foreclose properties amounting to P3 million whereas ISIs
indebtednessstoodatmorethanP71million.
Based on the foregoing, we find no showing that the
conclusionsmadebythe[Sandiganbayan]onthesufficiencyofthe
evidenceoftheprosecutionatthetimetheprosecution

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51Id.,atpp.6365.

473

VOL.706,SEPTEMBER30,2013 473
Singian,Jr.vs.Sandiganbayan(3rdDivision)

rested its case, [were] manifestly mistaken.52 The Sandiganbayan


did not exercise its judgment in a whimsical or capricious manner.
Asweaptlyheld:
Giventhesufficiencyofthetestimonialanddocumentaryevidence
against petitioner, it would, therefore, be premature at this stage of
the proceedings to conclude that the prosecutions evidence failed to
establishpetitionersparticipationintheallegedconspiracytocommit
the crime. Likewise, the Court cannot, at this point, make a
categoricalpronouncementthattheguiltofthepetitionerhasnotbeen
provenbeyondreasonabledoubt.Asthereiscompetentandsufficient
evidencetosustaintheindictmentforthecrimecharged,itbehooves
petitioner to adduce evidence on his behalf to controvert the
asseverations of the prosecution. Withal, respondent court did not
gravelyabuseitsdiscretionwhenitfoundthattherewasaprimafacie
case against petitioner warranting his having to go forward with his
defensiveevidence.
The determination of the sufficiency or insufficiency of the
evidence presented by the prosecution as to establish a prima facie
case against an accused is left to the exercise of sound judicial
discretion. Unless there is a clear showing of a grave abuse of
discretionamountingtolackorexcessofjurisdiction,thetrialcourts
denial of a motion to dismiss or a demurrer to evidence may not be
disturbed.53

Similarly,wehavealsoruledthat:

When there is no showing of such grave abuse, certiorari is not


the proper remedy. Rather, the appropriate recourse from an order
denyingademurrertoevidenceis

_______________
52Resosov.Sandiganbayan,377Phil.249,257319SCRA238,245(1999).
53Soriquezv.Sandiganbayan(FifthDivision),supranote42atpp.718719p.230.

474

474 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

forthecourttoproceedwiththetrial,afterwhichtheaccusedmay
file an appeal from the judgment of the lower court rendered after
such trial. In the present case, we are not prepared to rule that the
Sandiganbayan has gravely abused its discretion when it denied
petitioners demurrer to evidence. Public respondent found that the
prosecutions evidence satisfactorily established the elements of the
crime charged. Correspondingly, there is nothing in the records of
this case nor in the pleadings of petitioner that would show
otherwise.54

At this juncture, it is worth mentioning that the issues raised


herein are almost the same as those raised by petitioner before the
CourtwhenhequestionedtheSandiganbayansdenialofhisMotion
forRedeterminationofExistenceofProbableCause.55Inresolving
forRedeterminationofExistenceofProbableCause.55Inresolving
petitioners contention that he should not be made liable for ISIs
failuretoputupadditionalcapitalizationandcollateralsbecausehe
isnotamemberoftheBoardofDirectors,theCourtdeclaredthat:

True, the power to increase capitalization and to offer or give


collateral to secure indebtedness are lodged with the corporations
[B]oardof[D]irectors.However,thisdoesnotmeanthattheofficers
of the corporation other than the [B]oard of [D]irectors cannot be
made criminally liable for their criminal acts if it can be proven that
they participated therein. In the instant case, there is evidence that
petitioners participated in the loan transactions when he signed the
undertaking.xxx56

Anent the issue regarding the sufficiency of ISIs collateral, we


alsodeclaredthesametobeamatterofdefensewhich

_______________
54Alarillav.Sandiganbayan,supranote46atpp.154155p.495.
55SeeSingian,Jr.v.Sandiganbayan,supranote5atpp.544545pp.355356.
56Id.,atp.551pp.362363.

475

VOL.706,SEPTEMBER30,2013 475
Singian,Jr.vs.Sandiganbayan(3rdDivision)

should be best ventilated in a fullblown trial.57 Moreover, we


declaredthat

Fifth.Itispetitionersviewthattheprosecutionfailedtoadduce
evidencethathetookpartinanyconspiracyrelativetothegrantofthe
loan transactions. Suffice it to state that the alleged absence of any
conspiracyamongtheaccusedisevidentiaryinnatureandisamatter
of defense, the truth of which can be best passed upon after a full
blowntrialonthemerits.58

Infine,weholdthatthepresenceorabsenceoftheelementsof
thecrimeisevidentiaryinnatureandisamatterofdefensethatmay
be passed upon after a fullblown trial on the merits, and the
validity and merits of a partys defense or accusation, as well as
admissibility of testimonies and evidence, are better ventilated
during trial proper.59 Petitioners claims and defenses in his
Demurrer to Evidence can best be tackled during trial. In the
presentationofhisdefense,heshallhavetheopportunitytoexplain
orshowwhyheshouldnotbemadeliable.Forexample,ifthereis
anytruthtotheallegationinhisDemurrerofEvidencethattheDeed
of Undertaking was altered, or that the signature therein affixed is
not his own, such that there arise serious doubts as to his
participationintheexecutionofsaiddocument,thiscanberesolved
only upon proof presented during trial. Petitioner must present
evidence regarding such claim, the truth of which he can
demonstrateduringtrial.SincethisCourtisnotatrieroffacts,there
isnowaythatthisissuecanberesolvedbythisCourtatthisstageof
theproceedings.

_______________
57Id.,atp.550p.362.
58Id.,atpp.551552pp.363364.
59Andresv.JusticeSecretaryCuevas,499Phil.36,4950460SCRA38,5253
(2005)seealsoLeev.KBCBankN.V.,G.R.No.164673,January15,2010,610SCRA
117,129.

476

476 SUPREMECOURTREPORTSANNOTATED
Singian,Jr.vs.Sandiganbayan(3rdDivision)

Inlightoftheforegoing,theCourtfindsthattherespondentcourt
did not commit grave abuse of discretion in denying petitioners
Demurrer to Evidence it was done in the proper exercise of its
jurisdiction.
WHEREFORE,thePetitionisDISMISSED.
SOORDERED.

Brion(Actg.Chairperson),Abad,**PerezandPerlasBernabe,
JJ.,concur.

Petitiondismissed.

Notes.Having denied the accused local officials demurrer to


evidence,theSandiganbayanwasjustifiedinlikewisedenyingtheir
motiontobeallowedtopresentevidenceintheirdefense.(DeJesus,
Sr.vs.SandiganbayanFourthDivision,644SCRA241[2011])
Thecourt,intheexerciseofitssounddiscretion,mayrequireor
allow the prosecution to present additional evidence (at its own
initiative or upon a motion) after a demurrer to evidence is filed.
(People vs. Sandiganbayan [Fourth Division], 665 SCRA 89
[2012])
o0o

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**PerRaffledatedSeptember30,2013.
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