TodayisWednesday,June17,2015

RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION

G.R.No.85464October3,1991
DAVIDP.LLORENTE,petitioner,
vs.
THESANDIGANBAYAN(THIRDDIVISION),andPEOPLEOFTHEPHILIPPINES,respondents.
PadillaLawOfficeforpetitioner.

SAMIENTO,J.:p
The petitioner questions the Decision of the Sandiganbayan * holding him civilly liable in spite of an acquittal. The facts are not
disputed:

Atty.LlorentewasemployedinthePCA,apubliccorporation(Sec.1,PD1468)from1975toAugust
31,1986,whenheresigned.HeoccupiedthepositionsofAssistantCorporateSecretaryforayear,
then Corporate Legal Counsel until November 2, 1981, and, finally, Deputy Administrator for
AdministrativeServices,FinanceServices,LegalAffairsDepartments....
As a result of a massive reorganization in 1981, hundreds of PCA employees resigned effective
October31,1981.AmongthemwereMr.Curio,Mrs.Perez,Mr.Azucena,andMrs.Javier(TSN,Oct.
22/87,p.2Exhs.M2,N1,andO1).TheywereallrequiredtoapplyforPCAclearancesinsupport
oftheirgratuitybenefits(Exhs.C,M2,N1,and01).Condition(a)oftheclearanceprovided:
TheclearanceshallbesignedbythePCAofficersconcemedonlywhenthereisnoitem
appearing under "PENDING ACCOUNTABILITY" or after every item previously entered
thereunderisfullysettled.SettlementthereofshallbewritteninREDink.(Exhs.DorD1
and1B)
AftertheclearancewassignedbythePCAofficersconcerned,itwastobeapproved,first,byAtty.
Llorente,inthecaseofarankandfileemployee,orbyCol.Duefias,theactingadministrator,inthe
caseofanofficer,andthenbyAtty.Rodriguez,thecorporateauditor...
NotwithstandingCondition(a)justquoted,theclearancesofMrsPerezandMr.Azucenabothdated
October 30, 1981, were favorably acted upon by the CPA officers concerned, including Mrs. Sotto,
actingfortheaccountingdivision,eveniftheclearancesshowedtheyhadpendingaccountabilitiesto
theGSISandtheUCPB,andsubsequentlyapprovedbyAttys.LlorenteandRodriguez(Exhs.Mand
N). Thereafter, the vouchers for their gratuity benefits, also indicating their outstanding obligations
were approved, among others, by Atty Llorente, and their gratuity benefits released to them after
deductingthoseaccountabilities....
The clearanceof Mrs. Javier of the same date of October 30, 1991 was also signed by all PCA
officers concerned, including Mrs. Sotto even though the former had unsettled obligations noted
thereon,viz'SIS loan P5,387.00 and UCPB car loan P19,705.00, or a total of P25,092.00, and
later on approveed by Col. Dueas, Mrs Javier being an officer, and Atty. Rodriguez "Exh. (O)".
Similariv the, voucher of Mrs Javier for her gratuity benefits likewise recited her accountabilities of
P25,092.00plusP92.000.00,whichwashandwritten.Bothaccountsweredeductedfromhergratuity

benefits,andthebalancereleasedtoheronNovember16,1981.Thevoucherpassedpostauditby
Atty.RodriguezonDecember1,1981(Exhs.L,
L1,L2,andL3).
The said P92,000.00 was the disallowed portion of the cash advances received by Mr. Curio in
connectionwithhisdutiesas"supercargo"inthedistributionofseednutsthroughoutthecountry.He
received them through and in the name of Mrs. Javier from the UCPB. When the amount was
disallowed, the UCPB withheld from the PCA certain receivables the latter, in turn, deducted the
sameamountfromthegratuitybenefitsofMrs.Javier,shebeingprimarilyliabletherefor(Exhs,L,L
1, L2, and L3), At the time of the deduction, the additional liquidation papers had already been
submittedandwereinprocess.Justincaseshewouldnotbesuccessfulinhavingtheentireamount
wiped out, she requested Mr. Curio, who admittedly received it, to execute, as he did, an affidavit
datedNovember26,1981,inwhichheassumedwhateverportionthereofmightnotbeallowed...
The clearance of Mr. Curio dated November 4,1981, (Exh. D or D1) likewise favorably passed all
officers concerned, including Mrs. Sotto, the latter signing despite the notation handwritten on
December8,1981,thatMr.Curiohadpendingaccountabilities,namely:GSISloan2,193.74,201
accountsreceivableP3,897.75,andUCPBloanP3,623.49,oratotalofP10,714.78.However,
when the clearance was submitted to Atty. Llorente for approval, he refused to approve it. For this
reason,theclearancewasheldupinhisofficeanddidnotreachAtty.Rodriguez,...
ThereasongivenbyAtty.LlorentewasthatwhentheclearancewaspresentedtohimonDecember
8, 1981, he was already aware of the affidavit dated November 26, 1981, in which Mr. Curio
assumedtopayanyresidualliabilityforthedisallowedcashadvances,whichatthetime,December
8,1981,stoodatP92,000.00(Exhs.2and2A).Moreover,Mr.Curiohadotherpendingobligations
noted on his clearance totalling Pl0,714.98 (Exh. 1a). To justify his stand, Atty. Llorente invoked
Condition(a)oftheclearance(Exhs.DandIB),which,hesaid,was"verystringent"andcouldnot
beinterpretedinanyotherway...
On December 1, 1982, Mr. Curio brought the matter of his unapproved clearance to Col. Dueas
(Exh. G), who referred it to the Legal Department, which was under Atty. Llorente as Deputy
Administrator for legal affairs. After followup in that department, Mr. Curio received the answer of
Col.DueasdatedFebruary11,1983,sayingthattheclearancewasbeingwithhelduntiltheformer
settled his alleged accountability for P92,000.00 reduced already to P56,000.00 (Exh. I). Mr. Curio
elevatedthemattertotheChairmanofthePCABoard,whoindorsedittoCol.Dueas,who,inturn,
sentittotheLegalDepartment.Thistimethelatter,throughitsManager,ManuelF.Pastor,Jr.,first
cousin of Atty. Llorente, submitted a formal report under date of August 14, 1986, to the PCA
Chairman,justifyingtheactiontakenbyAtty.LlorenteandCol.Dueas(Exh.12).ThePCAChairman
did not respond in writing, but advised Mr. Curio to wait for the resolution of the Tanodbayan with
which he (Mr. Curio) had filed this case initially against Atty. Llorente and, later on, against Col.
Duerias also. On August 31, 1986, Atty. Llorente resigned from the PCA the clearance, however,
couldnotbeissuedbecause,accordingtothePCACorporateLegalCounsel,ArthurJ.Liquate,the
PCAdidnotwanttopreempttheTanodbayan.OnNovember12,1986,thelatterdecidedtoinstitlite
thiscaseincourt...
Nine days thereafter, or on November 21, 1986, Mr. Curio accomplished another clearance, which
nolongerimposedCondition(a)ofhisearlierclearance(Exh.E).Thenewclearancewasapproved,
even if he still had pending accountabilities, totalling P10,714.78 that had remained unsettled since
December1981.Hisvoucherwasalsoapproved,andhisgratuitybenefitspaidtohiminthemiddle
of December 1986, after deducting those obligations (Exh. F). Nothing was mentioned anymore
aboutthedisallowedcashadvancesofP92,000.00,whichhadbeenreducedtoP55,000.00...
Between December 1981 and December 1986, Mr. Curio failed to get gainful employment as a
result, his family literally went hungry, In 1981, he applied for work with the Philippine Cotton
Authority, but was refused, because he could not present his PCA clearance. The same thing
happenedwhenhesoughtemploymentwiththePhilippineFishMarketingAdministrationinJanuary
1982. In both prospective employers, the item applied for was P2,500.00 a month. At that time, he
wasonlyabout45yearsoldandstillcompetitiveinthejobmarket.Butin1986,beingalreadypast50
years,hecouldnolongerbehiredpermanently,therebeingaregulationtothateffect.Hispresent
employmentwiththePhilippinePortsAuthority,whichstartedonMarch16,1987,wascasualforthat
reason. Had his gratuity benefits been paid in 1981, he would have received a bigger amount,
considering that since then interest had accrued and the foreign exchange rate of the peso to the
dollarhadgoneup...1

On December 10, 1986, an Information for violation of Section 3(c) of the AntiGraft and Corrupt Practices Act
wasfiledagainstthepetitioner:
That on or about December 8, 1981 and/or subsequent thereto, in Quezon City, Philippines, and
withinthejurisdictionofthisHonorableCourt,accusedDavidPastorLlorente,DeputyAdministrator
forthePhilippineCoconutAuthority(PCA),andassuchwasempoweredamongotherstoapprove
clearancesofemployeesthereat,takingadvantageofhisposition,throughevidentbadfaith,didthen
andthere,wilfullyandunlawfullyrefusetoissueacertificateofclearancetoHerminigildoM.Curio,
anemployeethereat,whowasforcedtoresignasaresultoftheabolitionofhisitempursuanttothe
1981reorganizationofthePCA,resultinginhisdeprivationtoreceivehisgratuitybenefitsamounting
toP29,854.90,andtosecureemploymentwithotherofficestohisdamageandprejudice,andthatof
thepublicservice.
CONTRARYTOLAW.
Manila,Philippines,December10,1986.2
As indicated at the outset, the Sandiganbayan acquitted the petitioner in the absence of any evidence that he
actedinbadfaith.3TheSandiganbayancitedthreeconsiderationsthatprecludedbadfaith:
First,whenAtty.LlorentewithheldfavorableactionontheclearanceonandafterDecember8,1981,
therewasstillthepossibility,remotethoughitwaswhenviewedafterthefact,thattheaccountability,
which Mrs. Javier was primarily liable therefor and which was fully settled by deduction from her
gratuitybenefitsonNovember16,1981(Exhs.L,L1,L2,and
L3),wouldbereinstatedandchargeddirectlytoMr.Curio,forthelatterexecutedonNovember26,
1981, an affidavit assuming responsibility for the obligation to the extent of the amount finally
disallowed, and the affidavit was on December 8, 1981, already pending consideration by the PCA
management(Exhs.2and2A).
Second, Atty. Llorente was appointed Deputy Administrator for administrative services, finance
services, and legal affairs departments only on November 2,1981 (TSN, March 9/87, p. 3). Being
newinhisjob,itwasbutnaturalthathewaszealousintheperformanceofhisfunctionsinfact,
overzealousintheprotectionofthePCAinterests,evenifthatprotectionwasnotnecessary,asthe
P92,000.00accountabilityhadalreadybeenpaid(SeeExh.12,4thparagraph).
Finally, Atty. Llorente was officiously, though incidentally, taking care also of the interest of Mrs.
Javier who, justice and equity demanded, should not be made to shoulder the P92,000.00
unliquidatedcashadvances,forthereasonthatitwasMr.Curiowhoadmittedlyspentthemorwho,
attheveryleast,shouldbeabletogetreimbursementofwhatshepaid,totallyorpartially,fromhis
gratuitybenefits(SeeExh.5,pp.23).4
The Sandiganbayan, as we also indicated earlier, took the petitioner to task civilly, and ordered him to pay
"compensatory damages" in the sum of P90,000.00. According to the Sandiganbayan, the petitioner was guilty
nonethelessofabuseofrightunderArticle19oftheCivilCodeandasapublicofficer,hewasliablefordamages
sufferedbytheaggrievedparty(underArticle27).
The petitioner claims that the Sandiganbayan's Decision is erroneous even if the Sandiganbayan acquitted him
therein,becausehewasneverinbadfaithasindeedfoundbytheSandiganbayan.
Under the 1985 Rules of Criminal Procedure, amending Rules 110 through 127 of the Rules of Court, the
judgment of the court shall include, in case of acquittal, and unless there is a clear showing that the act from
whichthecivilliabilitymightarisedidnotexist,"afindingonthecivilliabilityoftheaccusedinfavoroftheoffended
party."5Theruleisbasedontheprovisionsofsubstantivelaw,6thatifacquittalproceedsfromreasonabledoubt,acivilaction,liesnonetheless.
The challenged judgment found that the petitioner, in refusing to issue a certificate of clearance in favor of the
privateoffendedparty,HerminigildoCurio,didnotactwith"evidentbadfaith,"oneoftheelementsofSection3(e)
ofRepublicActNo.3819.7Weagreewithtilejudgment,insofarasitfoundlackofevidentbadfaithbythepetitioner,forthereasonscitedtherein

basicallv, because the petitioner was acting within the bounds of law in refusing to clear Curio although "[t]he practice was that the clearance was
neverthelessapproved,andthentheamountoftheunsettledobligationwasdeductedfromthegratuitybenefitsoftheemployee."8

WealsoagreewiththeSandiganbaya(althoughtheSandiganbayandidnotsayit)thatalthoughthepetitionerdid
notactwithevidentbadfaith,heactedwithbadfaithnevertheless,forwhichheshouldrespondfordamages.
The records show that the office practice indeed in the Philippine Coconut Authority was to clear the employee

(retiree) and deduct his accountabilities from his gratuity benefits. There seems to be no debate about the
existence of this practice (the petitioner admitted it later on) and in fact, he cleared three employees on the
conditionthattheirobligationsshouldbedeductedfromtheirbenefits.9Wequote:
Confrontedwiththeseevidence(sic),Atty.Llorenteconceded,albeitgrudgingly,theexistenceofthe
practicebytheaccountingdivisionofnotcomplyingwithCondition(a).He,however,claimedthathe
learnedofthepracticeonlyduringthetrialofthecaseandthathemusthaveinadvertentlyapproved
the clearances of Mrs. Perez, Mr. Azucena, and possibly others who were similarly situated (TSN,
March9/88,pp.45).Thistheevidencebelies.First, he himself testified that when the clearance of
Mr.CuriowaspresentedtohiminDecember1981,italreadyborethesignatureofMrs.Sottoofthe
accountingdivisionandthenotationsetoppositehernameabouttheoutstandingaccountabilitiesof
Mr. Curio but he (Atty. Llorente) significantly did not ask her why she signed the clearance (TSN,
Nov. 24/87, pp. 2425). Second, in that month, Atty. Llorente approved Mrs. Perez's and Mr.
Azucena's vouchers showing that hey has pending obligations to the GSIS and the UCPB, which
werebeingdeductedfromtheirgratuitybenefits.Attachedtothosevouchersweretheclearancesas
supporting documents (Exhs. M2 and N1 TSN, Dec. 7/87, pp. 13,23). And third, in the same
month, Atty. Llorente was already aware of the cae of Mrs. Javier whose clearance and voucher
were, according to him, preciselywithheld because of her unsettled accountability for the cash
advancesofP92,000.00,butherelaterongivenduecourseandhergratuitybenefitsreleasedon
November16,1981,minusthatamount(TSN,Nov.24/87,pp.3132Exhs.L,L1,L2andL3).
The cash advances of P92,000.00 were the primary obligation of Mrs. Javier, since they were
secured through her and in her name from the UCPB. That was why they were charged to and
deducted from, her gratuity benefits. Consequently, as early as that date and in so far as the PCA
andtheUCPBwereconcerned,theaccountabilitywasalreadyfullypaid.Theassumptionofresidual
liabilitybyMr.CurioforthecashadvancesonNovember26,1981,wasamatterbetweenhimand
Mrs.Javier(Exhs.2and2A).10
ThegeneralruleisthatthisCourtisboundbythefindingsoffactoftheSandiganbayan.11
Aswesaid,theactsofthepetitionerwerelegal(thatis,pursuanttoprocedures),asheinsistsinthispetition,yet
itdoesnotfollow,aswesaid,thathisactsweredoneingoodfaith.Foremphasis,hehadnovalidreasonto"go
legal" all of a sudden with respect to Mr. Curio, since he had cleared three employees who, as the
Sandiganbayan found, "were all similarly circumstanced in that they all had pending obligations when, their
clearanceswerefiledforconsideration,warrantingsimilarofficialaction."12
TheCourtisconvincedthatthepetitionerhadunjustlydiscriminatedagainstMr.Curio.
Itisnodefensethatthepetitionerwasmotivatedbynoillwill(agrudge,accordingtotheSandiganbayan),since
the facts speak for themselves. It is no defense either that he was, after all, complying merely with legal
proceduressince,asweindicated,hewasnotasstrictwithrespecttothethreeretiringotheremployees.There
canbenootherlogicalconclusionthathewasactingunfairly,nomore,noless,toMr.Curio.
ItistheessenceofArticle19oftheCivilCode,underwhichthepetitionerwasmadetopaydamages,together
withArticle27,thattheperformanceofdutybedonewithjusticeandgoodfaith.InthecaseofVelayo vs. Shell
Co.ofthePhilippines,13weheldthedefendantliableunderArticle19fordisposingofitspropertvaperfectlylegalactinordertoescapethe
reachofacreditor.Intwofairlymorerecentcases,Sevillavs.CourtofAppeals14andValenzuelavs.CourtofAppeals,15weheldthataprincipalisliable
underArticle19interminatingtheagencyagain,alegalactwhenterminatingtheagencywoulddeprivetheagentofhislegitimatebusiness.

WebelievethatthepetitionerisliableunderArticle19.
The Court finds the award of P90,000.00 to be justified bv Article 2202 of the Civil Code, which holds the
defendant liable for all "natural and probable" damages. Hennenegildo Cunct presented evidence that as a
consequenceofthepetitioner'srefusaltoclearhim,hefailedtolandajobatthePhilippineCottonAuthorityand
Philippine First Marketing Authority. He also testified that a job in either office would have earned him salary of
P2,500.00 a month, or P150,000.00 in five years. Deducting his probable expenses of reasonably about
P1,000.00amonthorP60,000.00infiveyears,thepetitioneroweshimatotalactualdamagesofP90,000.00
WHEREFORE,premisesconsidered,thePetitionisDENIED.Nopronouncementastocosts.
ITISSOORDERED.
Fernan, C.J., Narvasa, MelencioHerrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, GrioAquino,
Medialdea,RegaladoandDavide,Jr.,JJ.,concur.


#Footnotes
1Rollo,6266.
2Id.,4950.
3Inthecaseofmejoradavs.Sandiganbayan,Nos.5706572,June30,1987,151SCRA399,the
CourtcitedthreeelementsmakingupviolationsofSection3(e)oftheAntiGraftLaw:"First,thatthe
accusedmustbeapublicofficerchargedwiththedutyofgrantinglicensesorpermitsorother
concessions.Petitionercontendsthatinasmuchasheisnotchargedwiththedutyofgranting
licenses,permitsorotherconcessions,thenheisnottheofficercontemplatedbySection3(e).
Section3citedaboveenumeratesinelevensubsectionsthecorruptpracticesofanypublicofficers
declaredunlawful.Itsreferenceto"anypublicofficer"iswithoutdistinctionorqualificationandit
specifiestheactsdeclaredunlawful.WeagreewiththeviewadoptedbytheSolicitorGeneralthatthe
lastsentenceofparagraph(e)isintendedtomakecleartheinclusionofofficersandemployeesof
officesorgovernmentcorporationswhich,undertheordinaryconceptof"publicofficers"maynot
comewithintheterm.Itisastrainedconstructionoftheprovisiontoreaditasapplyingexclusivelyto
publicofficerschargedwiththedutyofgrantinglicensesorpermitsorotherconcessions.
Thefirstelement,therefore,ofSection3(c)isthattheaccusedmustbeapublicofficer.This,the
informationsdidnotfailtoallege.
Second,thatsuchpublicofficercausedundueinjurytoanyparty,includingtheGovernment,orgave
anyprivatepartyunwarrantedbenefits,advantageorpreferenceinthedischargeofhisofficial
administrativeorjudicialfunctions.
PetitionerdeniesthattherewasinjuryordamagecausedtheGovenimentbecausethepayments
wereallegedlymadeonthebasisofadocumentsolelymadebytheHighwayDistrictEngineerto
whichpetitionerhadnohandinpreparing.Thefact,however,isthatthegovernmentsufferedundue
injuryasaresultofthepetitioner'shavinginflatedthetrueclaimsofcomplainantswhichbecamethe
basisofthereportsubmittedbytheHighwayDistrictEngineertotheRegionalDirectorofthe
DepartmentofHighwaysandwhicheventuallybecamethebasisofpayment.Hiscontentionthathe
hadnoparticipationisbeliedbythefactthatasarightofwayagent,hisdutywaspreciselyto
negotiatewithpropertyownerswhoareaffectedbyhighwayconstructionsforthepurposeof
compensatingthem.
Onthepartofthecomplainants,theinjurycausedtothemconsistsintheirbeingdivestedofalarge
proportionoftheirclaimsandreceivingpaymentinanamountevenlowerthantheactualdamage
theyincurred.Theyweredeprivedofthejustcompensationtowhichtheyareentitled.
Third,theinjurytoanyparty,orgivinganyprivatepartyanyunwarrantedbenefits,advantageor
preferencewasdonethroughmanifestpartiality,evidentbadfaithorgrossinexcusablenegligence."
(Supra,405406.)
4Rollo,Id.,.72.
5RULESOFCOURT,Rule120,sec.2.
6CIVILCODE,art.29.
7SeeMejoradavs.Sandiganbayan,supra.
8Rollo,Id.,53,
9Id.,70,71,75.
10Id.,7071.
11Castillovs.Sandiganbayan,Nos.5235257,June20,1987,151SCRA425.
12Rollo,Id.,71.

13120Phil.187(1956).
14Nos.L4118283,April15,1988,160SCRA171.
155G.R.No.83122,October19,1990,190SCRA1.
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