SECOND DIVISION

[G.R. No. 144784. September 3, 2002.]

PEDRO G. SISTOZA, petitioner, vs. ANIANO DESIERTO in his
capacity as Ombudsman, and ELISEO CO, respondents.

Siegfrid Lapasaran for petitioner.

The Solicitor General for public respondent.
M.A. Aguinaldo & Associates for private respondent.
SYNOPSIS
An adavit-complaint was led with the Oce of the Ombudsman alleging criminal
and administrative charges for violation of Sec. 3, Par. (e), RA 3019, otherwise
known as the Anti-Graft and Corrupt Practices Act, against petitioner Sistoza as
Director of the Bureau of Corrections and ocers and members of its Supply
Division and the Pre-Qualication, Bid and Awards Committee (PBAC), for awarding
the supply of tomato paste to be used by the inmates of the New Bilibid Prison to
Elias General Merchandising, although its bid was higher in price and lower in
quantity than that oered by another bidder. The Oce of the Ombudsman
dismissed the administrative proceedings against petitioner and some of his corespondents therein on the ground that their actions in awarding the supply of
tomato paste to Elias General Merchandising were merely recommendatory.
However, the Ombudsman authorized the ling of appropriate information against
petitioner and his alleged co-conspirators.
The Supreme Court ruled that the acts charged against petitioner did not amount to
manifest partiality, evident bad faith nor gross inexcusable negligence which should
otherwise merit a prosecution for violation of Sec. 3, par (e), RA 3019. It was not
disputed that petitioner relied upon supporting documents apparently dependable
as well as certications of regularity made by responsible public ocers of three
oce divisions of the Bureau of Corrections before axing his signature on the
purchase order. Reliance in good faith by a head of oce on a subordinate upon
whom the primary responsibility rests negated an imputation of conspiracy by gross
inexcusable negligence to commit graft and corruption. As things stand, petitioner is
presumed to have acted honestly and sincerely when he depended upon responsible
assurances that everything was aboveboard since it is not always the case that
second best bidders in terms of price are automatically disqualied from the award
considering that the PBAC reserves the authority to select the best bid not only in
terms of the price oered but other factors as well. The Supreme Court ordered the
dismissal of the criminal case for want of well-founded and reasonable ground to
believe that petitioner violated Sec. 3, par (e), of RA 3019, or for absence of
probable cause therefor.

SYLLABUS
1.
REMEDIAL LAW; CRIMINAL PROCEDURE; PRELIMINARY INVESTIGATION;
CONDUCTED BY OFFICE OF THE SPECIAL PROSECUTOR, AS ORGANIC COMPONENT
OF OFFICE OF THE OMBUDSMAN, FOR CRIMINAL CASES FALLING WITHIN
JURISDICTION OF SANDIGANBAYAN. The preliminary investigation proper, i.e.,
the determination of whether there is reasonable ground to believe that the
accused is guilty of the oense charged and should be subjected to the expense,
rigors and embarrassment of trial, is the function of the prosecution. For criminal
cases falling within the jurisdiction of the Sandiganbayan, it is the Oce of the
Special Prosecutor, as an organic component of the Oce of the Ombudsman, which
exercises investigatory and prosecutory powers.
CIAHDT

2.
ID.; COURTS; PRINCIPLE OF NON-INTERFERENCE; GRAVE ABUSE OF
DISCRETION, EXCEPTION THERETO. As a general rule, this Court does not
interfere with the Ombudsman's determination of the existence or absence of
probable cause. The strict application of this rule, insofar as the Ombudsman is
concerned, is not a trivial matter. In the instant case, we see this principle at work
when the Sandiganbayan deferred to the authority of the prosecution to exercise
investigatory powers when it granted petitioner Sistoza's motion for
reinvestigation. As in every rule, however, there are settled exceptions. Hence, the
principle of non-interference does not apply when there is grave abuse of discretion
which would authorize the aggrieved person to le a petition for certiorari and
prohibition under Rule 65, 1997 Rules of Civil Procedure . There is grave abuse of
discretion where power is exercised in an arbitrary, capricious, whimsical or despotic
manner by reason of passion or personal hostility, patent and gross as to amount to
evasion of positive duty or virtual refusal to perform a duty enjoined by law. When
the Ombudsman does not take essential facts into consideration in the
determination of probable cause, it has been ruled that he gravely abuses his
discretion.
3.
CRIMINAL LAW; REPUBLIC ACT NO. 3019 (ANTI-GRAFT AND CORRUPT
PRACTICES ACT), SECTION 3, PARAGRAPH (e); ELEMENTS. Section 3, par. (e), RA
No. 3019 denes "corrupt practices of public ocers." . . . The elements of the
oense are: (a) The accused is a public ocer or a private person charged in
conspiracy with the former; (b) The public ocer commits the prohibited acts during
the performance of his or her ocial duties or in relation to his or her public
functions; (c) That he or she causes undue injury to any party, whether the
government or a private party; (d) Such undue injury is caused by giving
unwarranted benets, advantage or preference to such parties; and, (e) That the
public ocer has acted with manifest partiality, evident bad faith or gross
inexcusable neglect.
4.
ID.; ID.; ID.; MANIFEST PARTIALITY, EVIDENT BAD FAITH OR GROSS
INEXCUSABLE NEGLECT NOT ESTABLISHED IN CASE AT BAR. The acts charged
against petitioner do not amount to manifest partiality, evident bad faith nor gross
inexcusable negligence which should otherwise merit a prosecution for violation of
Sec. 3, par. (e), RA 3019 . It is not disputed that petitioner relied upon supporting

documents apparently dependable as well as certications of regularity made by

responsible public ocers of three (3) oce divisions of the Bureau of Corrections
before axing his signature on the purchase order. The fact that petitioner had
knowledge of the status of Elias General Merchandising as being only the second
lowest bidder does not ipso facto characterize petitioner's act of reliance as
recklessly imprudent without which the crime could not have been accomplished.
Albeit misplaced, reliance in good faith by a head of oce on a subordinate upon
whom the primary responsibility rests negates an imputation of conspiracy by gross
inexcusable negligence to commit graft and corruption. As things stand, petitioner is
presumed to have acted honestly and sincerely when he depended upon responsible
assurances that everything was aboveboard since it is not always the case that
second best bidders in terms of price are automatically disqualied from the award
considering that the PBAC reserves the authority to select the best bid not only in
terms of the price oered but other factors as well. Verily, even if petitioner erred in
his assessment of the extrinsic and intrinsic validity of the documents presented to
him for endorsement, his act is all the same imbued with good faith because the
otherwise faulty reliance upon his subordinates, who were primarily in charge of the
task, falls within parameters of tolerable judgment and permissible margins of error.
DECISION
BELLOSILLO, J :
p

There is no question on the need to ferret out and expel public ocers whose acts
make bureaucracy synonymous with graft in the public eye, and to eliminate
systems of government acquisition procedures which covertly ease corrupt practices.
But the remedy is not to indict and jail every person who happens to have signed a
piece of document or had a hand in implementing routine government
procurement, nor does the solution fester in the indiscriminate use of the conspiracy
theory which may sweep into jail even the most innocent ones. To say the least,
this response is excessive and would simply engender catastrophic consequences
since prosecution will likely not end with just one civil servant but must, logically,
include like an unsteady streak of dominoes the department secretary, bureau chief,
commission chairman, agency head, and all chief auditors who, if the awed
reasoning were followed, are equally culpable for every crime arising from
disbursements they sanction.
DAHaTc

Stretching the argument further, if a public ocer were to personally examine

every single detail, painstakingly trace every step from inception, and investigate
the motives of every person involved in a transaction before axing his signature
as the nal approving authority, if only to avoid prosecution, our bureaucracy would
end up with public managers doing nothing else but superintending minute details
in the acts of their subordinates. It is worth noting that while no charges of violation
of Sec. 3, par. (e), of RA 3019 otherwise known as the Anti-Graft and Corrupt
Practices Act, as amended, were led against the responsible ocials of the
Department of Justice and ocers of other government agencies who similarly

approved the procurement subject of the instant petition and authorized the
disbursement of funds to pay for it, all the blame unfortunately fell upon petitioner
Pedro G. Sistoza as then Director of the Bureau of Corrections who merely acted
pursuant to representations made by three (3) oce divisions thereof, in the same
manner that the other ocials who were not charged but who nonetheless
authorized the transaction in their respective capacities, relied upon the assurance
of regularity made by their individual subordinates.
In truth, it is sheer speculation to perceive and ascribe corrupt intent and conspiracy
of wrongdoing for violation of Sec. 3, par. (e), of the Anti-Graft and Corrupt Practices
Act, as amended, solely from a mere signature on a purchase order, although
coupled with repeated endorsements of its approval to the proper authority, without
more, where supporting documents along with transactions reected therein passed
the unanimous approval of equally accountable public ocers and appeared regular
and customary on their face.

Stated otherwise, in situations of fallible discretion, good faith is nonetheless

appreciated when the document relied upon and signed shows no palpable nor
patent, no denite nor certain defects or when the public ocer's trust and
condence in his subordinates upon whom the duty primarily lies are within
parameters of tolerable judgment and permissible margins of error. As we have
consistently held, evidence of guilt must be premised upon a more knowing,
personal and deliberate participation of each individual who is charged with others
as part of a conspiracy.
Furthermore, even if the conspiracy were one of silence and inaction arising from
gross inexcusable negligence, it is nonetheless essential to prove that the breach of
duty borders on malice and is characterized by agrant, palpable and willful
indifference to consequences insofar as other persons may be affected. Anything less
is insuerably decient to establish probable cause. Thus, when at the outset the
evidence oered at preliminary investigation proves nothing more than the
signature of a public ocer and his statements verifying the regularity of prior
procedure on the basis of documents apparently reliable, the prosecution is dutybound to dismiss the adavit-complaint as a matter of law and spare the system
meant to restore and propagate integrity in public service from the embarrassment
of a careless accusation of crime as well as the unnecessary expense of a useless
and expensive criminal trial.
This petition for certiorari and prohibition stemmed from a routine purchase of
tomato paste to be used as ingredient in the austere diet of the inmates of the New
Bilibid Prison. On 10 August 1999 the Pre-Qualication, Bid and Awards Committee
(PBAC) of the Bureau of Corrections oered for public bidding the supply of tomato
paste in addition to other food items for consumption in the month of September.
Among the bidders were RBJJ, PMS Trading Enterprises, Filcrafts Industries, Inc., and
Elias General Merchandising. The specication for tomato paste appearing in the bid
announcement and the bid tender form where it appeared as item 55 was 48/170

tins-grams to one (1) case. 1

The oers of the respective bidders were embodied in their individual bid tender
forms securely placed inside sealed envelopes. Elias General Merchandising offered a
bid of P1,350.00 for 100/170 tins-grams to one (1) case while RBJJ and PMS Trading
Enterprises tendered their respective bids for the same quantity at the higher prices
of P1,380.10 and P1,380.05 per case. 2 On the other hand, Filcrafts Industries, Inc.,
proered P539.00 for the quantity of 48/198 tins-grams to one (1) case. It appears
that the bid tender form executed by Elias General Merchandising and submitted to
PBAC already indicated a change in the quantity specication from 48/170 tinsgrams to 100/170 tins-grams which PBAC approved as shown by the initials of the
chairman and members thereof. 3 In the same breadth, PBAC rejected the bid of
Filcrafts Industries, Inc., for oering a non-registered brand of tomato paste in the
Philippines and its failure to specify in the bid tender form the country of origin of
the tomato paste it would supply. 4
Based on the abstract of bidding, Elias General Merchandising won the bidding with
its oer of P1,350.00 for 100/170 tins-grams to one (1) case. 5 On 13 August 1999
the Supply Division of the Bureau of Corrections thus prepared the purchase order
(PO No. C-99-0140) for the one (1)-month supply of tomato paste in favor of Elias
General Merchandising. 6 It reected the supplier's winning oer of P1,350.00 for
100/170 tins-grams to one (1) case and no longer the initial specication of 48/170
tins-grams. 7 The Management Division of the Bureau of Corrections passed upon
the purchase order and conrmed the regularity of the procedures previously
undertaken, while the Accounting Division authorized the funding of the purchase
or der. 8 Petitioner Sistoza received the purchase order and its supporting
documents, cursorily read them and thereafter axed his signature on the purchase
order. 9 On 2 September 1999 PBAC issued a resolution noting that Elias General
Merchandising "in all angles . . . greatly complied with the specications provided"
thereby confirming its winning bid for the month-long supply of tomato paste.
Petitioner Sistoza endorsed the winning bid of Elias General Merchandising to the
Department of Justice which initially disapproved the same. 10 The Justice
Department observed that the award to the supplier with only the second lowest
bid was not adequately justied in the 2 September 1999 resolution of the PBAC.
The purchase order was thus returned to the Supply Division which then informed
Elias General Merchandising of the development. The winning bidder replied to the
Supply Division and expressed its willingness to "meet the price of the lowest bidder
for item No. 55, tomato paste which is more or less P1,120.00/box for 100 cans/170
grams." The Supply Division proposed in return the price of P964.12/box of 100
cans/170 grams supposedly matching the lowest bid of Filcrafts Industries Inc. 11
Elias General Merchandising rejected the counter-oer and pegged its price oer at
P1,120.00 for 100 cans/170 grams.
On 29 October 1999 petitioner endorsed to the Department of Justice the purchase
order in favor of Elias General Merchandising and conveyed the supplier's
discounted oer of P1,120.00 for 100 cans/170 grams. He also alluded to the fact
that the tomato paste had been delivered to the New Bilibid Prison and already

consumed by its inmates. For the second time, the Justice Department disapproved
the endorsement notwithstanding the reduced price since Elias General
Merchandising allegedly remained to be only the second lowest bidder. 12
On 29 November 1999 Sistoza endorsed for the third time the purchase order of
tomato paste in favor of Elias General Merchandising to the Department of Justice.
He said
The Pre-Qualication, Bid and Awards Committee in its resolution dated 2
September 1999 states that Item No. 55 (tomato paste) was awarded to
Elias General Merchandise in spite of being the 2nd lowest bidder due to the
fact that the oer of Filcrafts Industries, Inc. does not conform [to] the
specication provided for in the purchase orders. The lowest bidder makes a
counter-oer while Elias General Merchandise complied with all the
requirements and specications set forth [in the] said item. Copy of the said
resolution is attached for your reference. The dealer on its part, since it is
questioned for being awarded to the second lowest bidder, oered to
reduce [its] price from P1,350.00/box (100 tins per box of 170 grams per
tin to P1,120.00/box) . . .

He again appealed for the approval of the purchase order emphasizing that the
tomato paste had been used for the subsistence of the inmates of the New Bilibid
Prison for the month of September.
On 8 December 1999 Undersecretary of Justice Ramon J. Liwag nally approved the
purchase order for the tomato paste in favor of Elias General Merchandising at the
reduced price of P1,120.00 per case for two hundred fteen (215) cases or a total of
P240,800.00. Consequently, Disbursement Voucher No. 99100393 was prepared by
the Bureau of Corrections for the obligation of P240,800.00 and Land Bank Check
No. 082195-QQ dated 17 December 1999 was paid to Elias General Merchandising.
On 22 September 1999 while eorts to secure the approval of the purchase order
were being undertaken, respondent Eliseo Co, a perennial bidder for supply of food
items of the New Bilibid Prison, led an adavit-complaint with the Oce of the
Ombudsman alleging criminal and administrative charges for violation of Sec. 3 par.
(e), RA 3019 , otherwise known as the Anti-Graft and Corrupt Practices Act, against
petitioner Pedro G. Sistoza as Director of the Bureau of Corrections and ocers and
members of its Supply Division and PBAC. 13 He claimed that Sistoza and his sta
conspired with each other to cause undue injury to the government and the
inmates of the New Bilibid Prison by giving undue advantage to Elias General
Merchandise although its bid was higher in price and lower in quantity than that
offered by Filcrafts Industries, Inc.
On 7 July 2000 the Oce of the Ombudsman dismissed the administrative
proceedings, docketed as OMB-ADM-0-99-1130, against petitioner Sistoza and some
of his co-respondents therein on the ground that their actions in awarding the
supply of tomato paste to Elias General Merchandising, although its bid was not the
lowest, were merely recommendatory and that they were eectively scrutinized
and validated when the award was eventually approved by the Department of

Justice.
On 29 November 1999, after counter-adavits and supporting documents had been
led in the criminal proceedings, docketed as OMB-Case No. 0-99-1985, the
Evaluation and Preliminary Investigation Bureau (EPIB), Oce of the Ombudsman,
issued a resolution recommending the prosecution of petitioner Sistoza and his corespondents therein with the exception of the Chief of the Supply Division for
violation of Sec. 3, par. (e), RA 3019 . The EPIB asserted that a failure of bidding
should have been decreed since Elias General Merchandising did not comply with
the original specication of 48/170 tins-grams when it submitted a bid of 100/170
tins-grams in the same manner that Filcrafts Industries, Inc., did not abide by
several provisions of the bid announcement and that the oer of Elias General
Merchandising should have been rejected since it tendered a price higher than the
bid of Filcrafts Industries, Inc. The EPIB concluded that these anomalies were fairly
obvious from supporting documents showing why and how the supply of tomato
paste was awarded to Elias General Merchandising and that Sistoza with no greater
eort than to look casually at these documents would have discovered the
irregularity of the award.

On 29 March 2000 the Oce of the Special Prosecutor (OSP), Oce of the
Ombudsman, rendered a memorandum concurring with the ndings of the EPIB in
its Resolution of 29 November 1999. It stressed the deviation of the oer of the
supposed winning bidder from the specication of 48/170 tins-grams and the
seemingly irregular preparation of the purchase order ahead of the 2 September
1999 PBAC Resolution formally awarding the supply of tomato paste to Elias
General Merchandising. The OSP also claimed that petitioner Sistoza failed to
disclose in any of his endorsements of the bidding to the Department of Justice that
the discounted oer of Elias General Merchandising at P1,120.00 for 100 cans/170
grams was still higher than the price quoted by Filcrafts Industries, Inc., a fact which
petitioner could have easily found out and conveyed from the counter-proposal
made by the Supply Division to Elias General Merchandising at P964.12/box of 100
cans/170 grams purportedly to match the lowest bid of Filcrafts Industries, Inc.
On 8 May 2000 the Oce of the Chief Legal Counsel, Oce of the Ombudsman,
recommended approval of the 29 March 2000 OSP Memorandum . On 7 June 2000
the Ombudsman authorized the ling of the appropriate Information against Sistoza
and his alleged co-conspirators. On 14 June 2000 the Information was led with the
Sandiganbayan, docketed as Crim. Case No. 26072, accusing Sistoza of the
following acts
That on or about August 10, 1999 or immediately prior or subsequent
thereto, in Muntinlupa City, Metro Manila, Philippines and within the
jurisdiction of this Honorable Court, accused . . . together with accused
Director PEDRO SISTOZA and Supply Division Chief . . . conspiring and
confederating with one another, while in the performance of their ocial
duties, did then and there willfully, unlawfully and criminally, with manifest
partiality and evident bad faith made it possible for Elias General

Merchandising to qualify and be the winning bidder in the supply of tomato

paste for the subsistence of prisoners for the month of September 1999 . .
. accused PEDRO SISTOZA, knowing fully well that Elias General Merchandise
was only the second lowest bidder and that the subsequent oer by the
said supplier of the reduced price of P1,120.00 for 100/170 grams per case
was still higher than the oer of Filcrafts Industries, Inc. at P964.12 for
100/170 grams per case as computed by accused [Supply Division Chief],
still recommended the approval of Purchase Order No. 0-99-140 to the
Department of Justice and subsequently resulted in the approval thereof,
hence Disbursement Voucher No. 9910093 in the amount of P240,800.00
was approved by accused PEDRO SISTOZA, and Land Bank Check No.
082195-QQ was issued to Elias General Merchandising, thereby giving said
supplier unwarranted benet, advantage and preference of the Government
in the amount of P46,381.95 . . .

On 22 June 2000 Sistoza led with the Sandiganbayan a motion for reinvestigation
and suspension of proceedings therein. The court a quo granted reinvestigation and
referred the matter to the Ombudsman but denied the prayer for suspension of the
proceedings. Accordingly, on 11 July 2000 Sistoza led an amplied motion for
reconsideration with the Oce of the Special Prosecutor but this was also denied on
8 August 2000. On 25 August 2000 the Ombudsman armed the denial. Hence,
this petition.
On 18 October 2000 this Court issued a temporary restraining order enjoining the
Sandiganbayan from conducting further proceedings in Crim. Case No. 26072
against petitioner Sistoza in order not to render the instant petition academic and
futile.
Petitioner Sistoza argues that he had no active participation in the award of the
supply of tomato paste to Elias General Merchandising and that his involvement
was limited to signing the purchase order for this food item. He claims that upon
receipt of the purchase order, he cursorily perused the document and readily axed
his signature on it since the purchase order had already passed the scrutiny of three
(3) oce divisions of the Bureau of Corrections, namely, the Supply Division,
Management Division and Accounting Division. He concludes that as a matter of law
his signature on the purchase order, without more, does not prove any violation of
Sec. 3, par. (e), RA 3019.
It is settled that the preliminary investigation proper, i.e., the determination of
whether there is reasonable ground to believe that the accused is guilty of the
oense charged and should be subjected to the expense, rigors and embarrassment
of trial, is the function of the prosecution. 14 For criminal cases falling within the
jurisdiction of the Sandiganbayan, it is the Oce of the Special Prosecutor, as an
organic component of the Oce of the Ombudsman, which exercises investigatory
and prosecutory powers. Concomitantly, as a general rule, this Court does not
interfere with the Ombudsman's determination of the existence or absence of
probable cause. The strict application of this rule, insofar as the Ombudsman is
concerned, is not a trivial matter. In the instant case, we see this principle at work
when the Sandiganbayan deferred to the authority of the prosecution to exercise

investigatory powers
reinvestigation.

when

it

granted

petitioner

Sistoza's

motion

for

As in every rule, however, there are settled exceptions. Hence, the principle of noninterference does not apply when there is grave abuse of discretion 15 which would
authorize the aggrieved person to le a petition for certiorari and prohibition under
Rule 65, 1997 Rules of Civil Procedure . There is grave abuse of discretion where
power is exercised in an arbitrary, capricious, whimsical or despotic manner by
reason of passion or personal hostility, patent and gross as to amount to evasion of
positive duty or virtual refusal to perform a duty enjoined by law. 16 When the
Ombudsman does not take essential facts into consideration in the determination of
probable cause, it has been ruled that he gravely abuses his discretion. 17
Section 3, par. (e), RA No. 3019 denes "corrupt practices of public ocers." It
provides
In addition to acts or omissions of public ocers already penalized by
existing law, the following shall constitute corrupt practices of any public
ocer and are hereby declared to be unlawful . . . (e) Causing any undue
injury to any party, including the Government, or giving any private party
any unwarranted benets, advantage or preference in the discharge of his
ocial administrative or judicial functions through manifest partiality, evident
bad faith or gross inexcusable negligence. This provision shall apply to
ocers and employees of oces or government corporations charged with
the grant of licenses or permits or other concessions.

The elements of the oense are: (a) The accused is a public ocer or a private
person charged in conspiracy with the former; (b) The public ocer commits the
prohibited acts during the performance of his or her ocial duties or in relation to
his or her public functions; (c) That he or she causes undue injury to any party,
whether the government or a private party; (d) Such undue injury is caused by
giving unwarranted benets, advantage or preference to such parties; and, (e) That
the public ocer has acted with manifest partiality, evident bad faith or gross
inexcusable neglect. Evidently, mere bad faith or partiality and negligence per se
are not enough for one to be held liable under the law since the act of bad faith or
partiality must in the rst place be evident or manifest, respectively, while the
negligent deed should both be gross and inexcusable. It is further required that any
or all of these modalities ought to result in undue injury to a specified party. 18
We note that the Information against petitioner Sistoza, while specifying manifest
partiality and evident bad faith, does not allege gross inexcusable negligence as a
modality in the commission of the oense charged. An examination of the
resolutions of the Ombudsman would however conrm that the accusation against
petitioner is based on his alleged omission of eort to discover the supposed
irregularity of the award to Elias General Merchandising which it was claimed was
fairly obvious from looking casually at the supporting documents submitted to him
for endorsement to the Department of Justice. And, while not alleged in the
Information, it was evidently the intention of the Ombudsman to take petitioner to
task for gross inexcusable negligence in addition to the two (2) other modalities

mentioned therein. At any rate, it bears stressing that Sec. 3, par. (e), RA 3019 , is
committed either by dolo or culpa and although the Information may have alleged
only one (1) of the modalities of committing the oense, the other mode is deemed
included in the accusation to allow proof thereof. 19
In the instant case, there is no direct evidence that petitioner Sistoza acted in
conspiracy with the ocers and members of the PBAC and the other implicated
public ocials. He did not himself participate in the bidding procedures nor was he
involved in the award of the supply of tomato paste to Elias General Merchandising.
Plainly, the accusation against him rests upon his signature on the purchase order
and his repeated endorsements thereof notwithstanding his knowledge that the
winning bidder did not oer the least price. The Ombudsman concluded that these
acts constituted manifest partiality, evident bad faith, or even gross inexcusable
negligence resulting in undue injury to the government.
SCaEcD

We disagree with the conclusions of the Oce of the Ombudsman. We have

meticulously analyzed the arguments raised by the parties in the various pleadings
and motions, together with their documentary evidence, which all formed the basis
for the issuance of the questioned resolutions, and we are convinced that no
probable cause exists to warrant the ling of charges against petitioner Sistoza for
violation of Sec. 3, par. (e), RA 3019.

To begin with, before manifest partiality, evident bad faith or gross inexcusable
negligence may even be considered, the Office of the Ombudsman should determine
with certainty the facts indicative of the modalities of committing a transgression of
the statute.
Simply alleging each or all of these methods is not enough to establish probable
cause, for it is well settled that allegation does not amount to proof. Nor can we
deduce any or all of the modes from mere speculation or hypothesis since good faith
on the part of petitioner as with any other person is presumed. The facts themselves
must demonstrate evident bad faith which 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. 20
On the other hand, gross inexcusable negligence does not signify mere omission of
duties nor plainly the exercise of less than the standard degree of prudence. Rather,
it 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 indierence to consequences insofar as
other persons may be aected. 21 It entails the omission of care that even
inattentive and thoughtless men never fail to take on their own property, and in
cases involving public officials it takes place only when breach of duty is flagrant and
devious. 22
Clearly, the issue of petitioner Sistoza's criminal liability does not depend solely
upon the allegedly scandalous irregularity of the bidding procedure for which

prosecution may perhaps be proper. For even if it were true and proved beyond
reasonable doubt that the bidding had been rigged, an issue that we do not confront
and decide in the instant case, this pronouncement alone does not automatically
result in nding the act of petitioner similarly culpable. It is presumed that he acted
in good faith in relying upon the documents he signed and thereafter endorsed. To
establish a prima facie case against petitioner for violation of Sec. 3, par. (e), RA
3019, the prosecution must show not only the defects in the bidding procedure, a
circumstance which we need not presently determine, but also the alleged evident
bad faith, gross inexcusable negligence or manifest partiality of petitioner in axing
his signature on the purchase order and repeatedly endorsing the award earlier
made by his subordinates despite his knowledge that the winning bidder did not
oer the lowest price. Absent a well-grounded and reasonable belief that petitioner
perpetrated these acts in the criminal manner he is accused of, there is no basis for
declaring the existence of probable cause.
As dened above, the acts charged against petitioner do not amount to manifest
partiality, evident bad faith nor gross inexcusable negligence which should
otherwise merit a prosecution for violation of Sec. 3, par. (e), RA 3019 . It is not
disputed that petitioner relied upon supporting documents apparently dependable
as well as certications of regularity made by responsible public ocers of three (3)
oce divisions of the Bureau of Corrections before axing his signature on the
purchase order. In Alejandro v. People , 23 evident bad faith was ruled out because
the accused gave his approval to the questioned disbursement after relying on the
certication of the bookkeeper on the availability of funds for the expenditure and
since the act of relying upon a subordinate's certication of regularity cannot be
considered gross inexcusable negligence. In Magsuci v. Sandiganbayan 24 this Court
similarly rejected the theory of criminal liability where the head of oce in
discharging his official duties relied upon an act of his subordinate.
The fact that petitioner had knowledge of the status of Elias General Merchandising
as being only the second lowest bidder does not ipso facto characterize petitioner's
act of reliance as recklessly imprudent without which the crime could not have been
accomplished. 25 Albeit misplaced, reliance in good faith by a head of oce on a
subordinate upon whom the primary responsibility rests negates an imputation of
conspiracy by gross inexcusable negligence to commit graft and corruption. 26 As
things stand, petitioner is presumed to have acted honestly and sincerely when he
depended upon responsible assurances that everything was aboveboard since it is
not always the case that second best bidders in terms of price are automatically
disqualied from the award considering that the PBAC reserves the authority to
select the best bid not only in terms of the price oered but other factors as well. 27
In fact, while we do not decide the truth of this assertion, it is worth noting that the
PBAC Chairman and members would allege that Filcrafts Industries, Inc., oered an
unacceptable and unusable product as its bid, 28 a representation upon which
petitioner could have relied upon in assessing the propriety of the process handled
by his co-workers in the Bureau of Corrections.
Verily, even if petitioner erred in his assessment of the extrinsic and intrinsic
validity of the documents presented to him for endorsement, his act is all the same

imbued with good faith because the otherwise faulty reliance upon his subordinates,
who were primarily in charge of the task, falls within parameters of tolerable
judgment and permissible margins of error. Stated dierently, granting that there
were aws in the bidding procedures, an issue which we leave to the
Sandiganbayan to decide as against the other accused therein, there was no cause
for petitioner Sistoza to complain nor dispute the choice nor even investigate
further since neither the defects in the process nor the unfairness or injustice in the
actions of his subalterns are denite, certain, patent and palpable from a perusal of
the supporting documents. Benjamin N. Cardozo would have explained that "
[w]hen . . . we speak of the law as settled, though, no matter how great the
apparent settlement, the possibility of error in the prediction is always present."
Given that the acts herein charged failed to demonstrate a well-grounded belief that
petitioner had prima facie foreknowledge of irregularity in the selection of the
winning bid other than the alleged fact that such bid was not the lowest, we cannot
conclude that he was involved in any conspiracy to rig the bidding in favor of Elias
General Merchandising.
The instant case brings to the fore the importance of clearly dierentiating between
acts simply negligent and deeds grossly and inexcusably negligent punishable under
Sec. 3, par. (e), of the Anti-Graft and Corrupt Practices Act. 29 While we do not
excuse petitioner's manner of reviewing the award of the supply of tomato paste in
favor of Elias General Merchandising, whereby he cursorily perused the purchase
order and readily axed his signature upon it, since he could have checked the
supporting documents more lengthily, it is our considered opinion that his actions
were not of such nature and degree as to be considered brazen, agrant and
palpable to merit a criminal prosecution for violation of Sec. 3, par. (e), of RA 3019 .
To paraphrase Magsuci v. Sandiganbayan , 30 petitioner might have indeed been lax
and administratively remiss in placing too much reliance on the ocial documents
and assessments of his subordinates, but for conspiracy of silence and inaction to
exist it is essential that there must be patent and conscious criminal design, not
merely inadvertence, under circumstances that would have pricked curiosity and
prompted inquiries into the transaction because of obvious and denite defects in its
execution and substance. To stress, there were no such patent and established aws
in the award made to Elias General Merchandising that would have made his silence
tantamount to tacit approval of the irregularity.
It is also too sweeping to conclude the existence of conspiracy from the
endorsements made by petitioner Sistoza to the Department of Justice of the result
of the bidding. Fairly evident is the fact that this action involved the very functions
he had to discharge in the performance of his ocial duties. Furthermore, contrary
to the allegation that petitioner misrepresented key facts to the Department of
Justice, it is clear that his references to the price oered by Elias General
Merchandising and the rejection of the bid of Filcrafts Industries, Inc., were
supported by documents noted in and attached to his endorsements. Hence, there
was no way by which the approving authority, i.e., the Department of Justice, could
have been misled by him. Clearly, to prosecute him for violation of Sec. 3, par. (e),
RA 3019 , on the basis of his endorsements would be the same as pegging his
criminal liability on a mere signature appearing on the document. In Sabiniano v.

Court of Appeals, 31 we held that a signature on a voucher, check or warrant, even if

required by law to be axed thereon, is not enough to sustain a nding of
conspiracy among public ocials and employees charged with defraudation. We
further ruled
. . . Proof, not mere conjectures or assumptions, should be proered to
indicate that the accused had taken part in, to use this Court's words in
Arias v. Sandiganbayan , the "planning, preparation and perpetration of the
alleged conspiracy to defraud the government" for, otherwise, any "careless
use of the conspiracy theory (can) sweep into jail even innocent persons
who may have (only) been made unwitting tools by the criminal minds" really
responsible for that irregularity . . . 32

Since petitioner had no reason to doubt the validity of the bidding process and given
the urgency of the situation since the tomato paste had by then been delivered and
consumed by the inmates of the New Bilibid Prison, we certainly cannot infer
malice, evident bad faith or gross inexcusable negligence from his signing of the
purchase order and endorsing the same to the Department of Justice. Considering
that his duties as Director of the Bureau of Corrections entailed a lot of
responsibility not only on the management side but also in the rehabilitation and
execution of convicted prisoners, public relations and other court-imposed duties, it
is unreasonable to require him to accomplish direct and personal examination of
every single detail in the purchase of a month-long supply of tomato paste and to
carry out an in-depth investigation of the motives of every public ocer involved in
the transaction before axing his signature on the pro-forma documents as
endorsing authority.

To illustrate the detailed work that this proposition would have entailed, the tomato
paste was only item 55 in a partial list of sixty-four (64) other food items for the
month of September alone. In the instant case, petitioner has no duty to go beyond
the verication of the PBAC and to personally authenticate the procedures
previously undertaken. To compel him to perform such task, i.e., review personally
the bidding procedure for each of these items in all cases and instances as the
Ombudsman seems to suggest, would have meant consuming all his time attending
only to the meals of prisoners. Necessarily, since workload is expectedly heavy,
duties have to be delegated among the dierent oces for utmost eciency in the
prison system, an organizational scheme upon which petitioner was entitled to trust
and rely upon for the discharge of his own duties. Indeed the Ombudsman gravely
abused its discretion when he found probable cause against petitioner Sistoza
despite the presence of essential facts negating evident bad faith, manifest
partiality and gross inexcusable negligence, which were all disregarded.
Having thus concluded, the only remaining issue is whether this Court can direct
the Sandiganbayan to dismiss Crim. Case No. 26072 as against petitioner Sistoza.
This will not be the rst time that we order the dismissal of a criminal case being
heard by a trial court for want of probable cause, and there is no reason not to
prescribe the same justied outcome in the instant petition. In Cabahug v. People 33

where this Court ordered the dismissal of a criminal case pending before the
Sandiganbayan for absence of probable cause, we declared
While it is the function of the Ombudsman to determine whether or not the
petitioner should be subjected to the expense, rigors and embarrassment of
trial, he cannot do so arbitrarily. This seemingly exclusive and unilateral
authority of the Ombudsman must be tempered by the Court when powers
of prosecution are in danger of being used for persecution. Dismissing the
case against the accused for palpable want of probable cause not only
spares her the expense, rigors and embarrassment of trial, but also
prevents needless waste of the courts' time and saves the precious
resources of the government . . . . [T]he very purpose of a preliminary
investigation is to shield the innocent from precipitate, spiteful and
burdensome prosecution . . . [and] spare the innocent the trouble, expense
and torment of a public trial [as well as] unnecessary expense on the part of
the State for useless and expensive trials. Thus, when at the outset the
evidence cannot sustain a prima facie case or that the existence of probable
cause to form a sucient belief as to the guilt of the accused cannot be
ascertained, the prosecution must desist from inicting on any person the
trauma of going through a trial.

In the interest of a fair and just prosecution we cannot decree otherwise.

WHEREFORE, the instant Petition for Certiorari and Prohibition is GRANTED. The 29
November 1999 Resolution and 29 March 2000 Memorandum and allied issuances
of the Oce of the Ombudsman resolving to charge petitioner PEDRO G. SISTOZA
with violation of Sec. 3, par. (e), of RA 3019 as amended, otherwise known as the
Anti-Graft and Corrupt Practices Act, as he was thereafter indicted, are REVERSED
and SET ASIDE. For want of well-founded and reasonable ground to believe that
petitioner PEDRO G. SISTOZA violated Sec. 3, par. (e), of RA 3019 as amended, or
for absence of probable cause therefor, the Sandiganbayan is ORDERED to DISMISS
forthwith Crim. Case No. 26072, entitled "People of the Philippines v. Pedro Sistoza
y Guimmayen, et al.," only as against accused PEDRO G. SISTOZA, herein petitioner.
The 18 October 2000 temporary restraining order of this Court enjoining the
Sandiganbayan from conducting further proceedings in Crim. Case No. 26072
against petitioner PEDRO G. SISTOZA is made PERMANENT. This Decision is without
prejudice to the continuation of the proceedings in Crim. Case No. 26072, promptly
and without delay, insofar as the other accused therein are concerned. No
pronouncement as to costs.
HETDAC

SO ORDERED.

Mendoza, Quisumbing and Austria-Martinez, JJ., concur.

Footnotes
1.

Record, pp. 143, 160.

2.

Id., p. 160.

3.

Ibid.

4.

Id., p. 143.

5.

Id., p. 160.

6.

Ibid.

7.

Ibid.

8.

Rollo, p. 6.

9.

Id., p. 7.

10.

1st Indorsement dated 6 October 1999 issued by Undersecretary of Justice

Ramon J. Liwag.

11.

Record, p. 162.

12.

2nd Indorsement dated 29 November 1999 issued by Undersecretary of Justice

Ramon J. Liwag.

13.

Impleaded in the complaint were Chief of the Supply Division Isabelita C. Martinez,
PBAC Chairman Zorayda A. Ocampo and PBAC members Corazon Bravo,
Bienvenida Tupas, Kabungsuan Makilala, Angelina Palnetinos and Ramon Loyola.

14.

Cabahug v. People, G.R. No. 132816, 5 February 2002.

15.

Ibid.

16.
17.

Baylon v. Oce of the Ombudsman and the Sandiganbayan , G.R. No. 142738,
14 December 2001.
Ibid.

18.

In Gallego v. Sandiganbayan , G.R. No. 57841, 30 July 1982, 115 SCRA 793, we
held that the phrases "manifest partiality," "evident bad faith" and "gross
inexcusable negligence" describe the dierent modes by which the oense
penalized in Section 3 (e) of RA 3019 may be committed; in Llorente v.
Sandiganbayan, G.R. No. 122166, 11 March 1998, 287 SCRA 382, " undue injury"
was dened as actual damage capable of proof and actually proven with a
reasonable degree of certainty and does not include speculative damages which
are too remote to be included in an accurate estimate of the loss or injury.

19.

Applying by analogy our ruling in Cabello v. Sandiganbayan , G.R. No. 93885, 14

May 1991, 197 SCRA 94, where an accused charged with willful malversation was
validly convicted of the same felony of malversation through negligence when the
evidence merely sustained the latter mode of perpetrating the oense, it was said
that a conviction for a criminal negligent act can be had under an information
exclusively charging the commission of a willful oense upon the theory that the
greater includes the lesser oense; Kimpo v. Sandiganbayan , G.R. No. 95604, 29
April 1994, 232 SCRA 53.

20.

Llorente v. Sandiganbayan, see Note 18.

21.

Victoria v. Mongaya, A.M. No. P-00-1436, 19 February 2001, 352 SCRA 12.

22.

Ibid.

23.

G.R. No. 81031, 20 February 1989, 170 SCRA 400.

24.

G.R. No. 101545, 3 January 1995, 240 SCRA 13.

25.

See People v. Rodis , 105 Phil. 1294 (1959).

26.

See Note 24.

27.

28.
29.

A.C. Esguerra and Sons v. Aytona , No. L-18751, 28 April 1962, 4 SCRA 1245;
C&C Commercial Corporation v. Menor , No. L-28360, 27 January 1983, 120 SCRA
112; Filipinas Engineering and Machine Shop v. Ferrer , No. L-31455, 28 February
1985, 135 SCRA 25.
Record, p. 143.
See Note 21 for an illustration of the distinction between simple negligence and
gross inexcusable negligence.

30.

See Note 24.

31.

319 Phil. 92 (1995).

32.

Id., p. 98.

33.

See Note 14.