DR. ROGER R. POSADAS and DR. ROLANDO P.

DAYCO, 聽 Petitioners,
vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES,

This case involves two professors in the UP Diliman accused of violation of the Section 3(e) of
Republic Act 3019 (Section 3. Corrupt practices of public officers. ANTI-GRAFT AND CORRUPT PRACTICES
ACT

This is quite an interesting case considering that this case was already decided by the SC in July 17
2013 however, the 2 professors filed 2 separate MRs before the SC, hence the September 2013
ruling

 Petitioner Dr. Roger R. Posadas (Dr. Posadas), a Ph.D. in Relativity Physics

graduate from the University of Pittsburgh, is a longtime professor and former
Dean of the College of Science at the University of the Philippines-Diliman
Campus (UP Diliman).

 He was appointed by the Board of Regents (BOR) of the University of the

Philippines System as UP Diliman Chancellor for a three-year term starting
November 1, 1993 and ending October 31, 1996.
The highest governing body in the UP System is the Board of Regents. Its members are drawn from both the University and the private
and public sectors.

A Chancellor formulates plans and programs and directs administration of college, school, or university, within
authority delegated by governing board. Confers with board of control to plan and initiate programs concerning
organizational, operational, and academic functions of campus, and oversees their execution

 During his term as Chancellor, Dr. Posadas is one of the leading figures in the
emerging inter-disciplinary field of technology management in the Philippines.

 Upon the recommendation of the UP Diliman Task Force on Science and

Technology Assessment, Management and Planning composed of deans and
professors from the various colleges in UP Diliman, the BOR on February 23,
1995 approved the establishment of the Technology Management Center (TMC)
under the direct supervision of the Office of the Chancellor, UP Diliman.

 When the TMC became operational in June 1995, the Task Force on Science and
Technology Assessment, Management and Planning wrote then UP President Dr.
Emil Q. Javier, nominating Dr. Posadas for the position of TMC Director.

 For undisclosed reason, Dr. Posadas declined the nomination and instead he (Dr.
Posadas) designated Prof. Jose Tabbada of the College of Public Administration
as Acting Director of TMC.

 On July 26, 1995, Dr. Posadas submitted to the National Economic and
Development Authority (NEDA) an Application for Funding of his proposed
project entitled "Institutionalization of Technology Management at the
University of the Philippines in Diliman" (TMC Project).

 The TMC Project, to be funded by a grant from the Canadian International

Development Agency (CIDA), aimed to design and develop ten new graduate
courses in technology management for the diploma, master’s and doctoral
programs to be offered by TMC.2

 In an invitation letter dated July 30, 1995 from the President of Hua Qiao
University in Fujian Province, China invited Dr. Posadas and a delegation from
UP Diliman to visit on October 30 to November 6, 1995.
  On October 5, 1995, then Senior Deputy Executive Secretary Leonardo A.
Quisumbing (retired Member of this Court) issued the Authority to Travel for the
UP Diliman delegation headed by Dr. Posadas. Among those who joined the
delegation were Dr. Amaryllis Torres and Dr. Rosario Yu, UP Diliman’s Vice-
Chancellor for Academic Affairs and Vice-Chancellor for Student Affairs,
respectively.4 

 Under Administrative Order (AO) No. 95-170 dated October 24, 1995 (6 DAYS
PRIOR), Dr. Posadas designated petitioner Dr. Rolando P. Dayco (Dr.
Dayco), Vice-Chancellor for Administrative Affairs, as Officer-In-
Charge (OIC) of UP Diliman effective October 30, 1995 until
November 6, 1995. This was followed by AO No. 95-170-A dated
October 27, 1995, which amended the previous order by extending the
OIC designation of Dr. Dayco to November 7, 1995.5
On November 7, 1995, Dr. Dayco appointed Dr. Posadas as Project Director
of UP TMC effective September 18, 1995 up to September 17, 1996.
In another undated "Contract for Consultancy Services" signed by Dr.
Dayco, Dr. Posadas was hired as Consultant for the TMC Project for the
same period.6 
As evidenced by disbursement vouchers and admitted by Dr. Posadas, the latter
received his "honoraria"(P30,000.00 per month) and consultancy fees
(totaling P100,000.00) as Project Director and Consultant of the TMC
Project until May 1996 when the Commission on Audit (COA) raised
questions on the legality of the said fees.7

In August 1996, payment of the subject " honoraria" and fees was suspended by COA
Resident Auditor Romeo J. Pulido who noted the following deficiencies:
1. Honoraria were in excess of the rates provided for under the National Compensation Circular
No. 73, dated March 1, 1996, x x x.

2. Legal basis for designating the incumbent Chancellor as Project Director by the Officer-In-
Charge (OIC), considering that the latter can assume the post only in the absence of the former.
An OIC cannot validly designate since the authority to designate/appoint is among the functions
of the Chancellor which cannot be delegated as provided in the University Charter. Moreover, the
authority to appoint can never be delegated since it involves discretion.

3. On the assumption that the designation of the Chancellor as Project Director and Consultant is
valid, collecting the remuneration for both positions amount to double compensation which is
contrary to existing auditing rules and regulations. 8

In a Memorandum9 dated September 16, 1996, UP’s Chief Legal Officer Marichu C.

Lambino addressed the foregoing concerns of COA Auditor Pulido.Atty. Lambino
stated that

(a) the compensation received by Dr. Posadas are in the nature of consultancy fees and hence expressly
exempted by Department of Budget and Management (DBM) National Compensation Circular (NCC) No.
75 dated March 11, 1995;

(b) the TMC Project, being a training program, is likewise exempted from the coverage of NEDA
Guidelines on the Procurement of Consulting Services for Government Projects; and

(c) under Civil Service Commission (CSC) Memorandum Circular (MC) No. 43, series of 1993
"Streamlining and Deregulating Human Resource Development Functions" UP is authorized, without
prior approval from the CSC, to determine the rates of honorarium for government personnel
participating as resource persons, coordinator, and facilitator, in training programs.

On the issue of double compensation, Atty. Lambino pointed out that Dr. Posadas was
appointed Project Director because of managerial expertise, and his skills in supervising
personnel who are involved in an academic undertaking, and as Consultant because of his
expertise in technology management.

Finding these explanations/justifications acceptable, Auditor Pulido lifted the notices of suspension in
September 1997.

However, even before the issuance of the suspension notices, then UP President Dr. Emil Q. Javier,
ordered an investigation on the basis of an administrative complaint filed by Mrs. Ofelia L. Del Mundo, a
staff of the University Library who was detailed at the TMC as its Administrative Officer.

The president of the University of the Philippines is the chief administrator and principal executive officer
of the University of the Philippines. The president is elected for a single six-year term by the University's
eleven-member Board of Regents

On July 24, 1996, President Javier created a Fact-Finding Committee to

gather, review and evaluate pertinent documents regarding certain
transactions of the TMC.10 
After the conduct of a preliminary investigation and finding a prima facie case against the
petitioners, President Javier issued the formal charges 11 for Grave Misconduct and Abuse
of Authority. Pursuant to the University’s "Rules and Regulations on the Discipline of Faculty Members
and Employees approved at the 704th Meeting of the Board of Regents on January 11, 1963," 12 an
Administrative Disciplinary Tribunal (ADT) was constituted, chaired by Atty. Arturo E. Balbastro, a
faculty member of the UP College of Law.

On August 21, 1998, the ADT submitted its Report13 (ADT Case 96-001) to President Javier.
The ADT found petitioners guilty of serious or grave misconduct and recommended the
penalty of dismissal in accordance with CSC Memorandum Circular No. 30, series of 1989, as
well as Article 250 of the University Code. The Report likewise stated that the acts of petitioners for which
they were held administratively liable may warrant prosecution under Section 3(h) and (i) of R.A. No.
3019. Under the Order14 dated August 25, 1998 signed by President Javier, petitioners were dismissed
from the service.

On September 3, 1998, Atty. Carmelita Yadao-Guno in her capacity as General Counsel of UP formally
endorsed the findings and recommendations of the ADT to the Ombudsman. 15 The case was docketed as
OMB-0-98-1843.

Meanwhile, the BOR at its 1126th meeting on November 26, 1998, resolved petitioners’ appeal in ADT
Case 96-001, as follows:

1. The Board affirmed the ADT decision finding the respondents guilty of grave misconduct and
imposed on them the penalty of forced resignation with the accessory penalties defined in the
Omnibus Rules Implementing Book V of Executive Order 292 and other Pertinent Civil Service
Laws - i.e., cancellation of eligibility, forfeiture of all leave credits and retirement benefits, and
disqualification from government service for one year.

2. If after one year they should reapply to the University, they must render an apology to the
University and their reappointments will be subject to Board approval.

3. The respondents are permanently disqualified from holding any administrative position in the
University.

4. The decision takes effect immediately.16

Satisfied with the BOR’s action, petitioners caused the withdrawal of their appeal before the CSC. 17

On June 9, 1999, the Evaluation and Preliminary Investigation Bureau of the Office of
Ombudsman recommended the dismissal of the charges against petitioners for
insufficiency of evidence.

However, said recommendation was disapproved by then Ombudsman Aniano A. Desierto

who ordered that petitioners be indicted (charge) for violation of Section 3(e) of R.A. No.
3019 and Section 7(b) in relation to Section 11 of R.A. No. 6713. 18

Hence, information were filed against Posadas and Dayco before the Sandiganbayan

committing the crime herein charged in relation to, while in the performance and taking advantage of
their official and administrative functions, and conspiring and confederating with and mutually helping
each other, did then and there willfully, unlawfully and criminally give unwarranted benefits, privilege or
advantage to accused POSADAS, when accused DAYCO appointed or designated accused POSADAS as a
Project Director of the lone project

likewise violative of the law, rules and regulations against multiple positions, double compensation and
retroactivity of appointment, thereby causing undue injury to the Government in the amount of
PESOS: THREE HUNDRED SIXTY THOUSAND (P360,000.00), to the damage and
prejudice of the Government.

1) the petition was DISMISSED. The Decision dated June 28, 2005 of the
Sandiganbayan in Criminal Cases Nos. 25465-66 is hereby AFFIRMED and
UPHELD.
Assoc Justice Villarama Jr. –PONENTE (July 13 2013)

2) November 27, 2013

In a separate MR by Dr. Posadas and Dr Dayco of the SC decision dated

July 17, 2013, the SC held that the prosecution did not prove unwarranted
benefit or undue injury.

The Court resolves to GRANT the motions for reconsideration of the petitioners and to
vacate their conviction on the ground of failure of the State to prove their guilt beyond
reasonable doubt.

ISSUE: W/N petitioners are liable for causing injury to the Government with evident
of bad faith in appointing Dr. Posadas as Project Director and designating him Project
Consultant of the TMC Project.

HELD:

The prosecution also failed to prove that Dr. Dayco gave Dr. Posadas "unwarranted
advantage" as a result of the appointments in question. The honoraria he received
cannot be considered "unwarranted" since there is no evidence that he did not
discharge the additional responsibilities that such appointments entailed.

the Supreme Court resolves to GRANT the motions for reconsideration of the
petitioners and to vacate their conviction on the ground of failure of the State to prove
their guilt beyond reasonable doubt.

Discussion

1. The appointments were in good faith

 an honest belief in the validity of one's right, ignorance of a superior claim and absence of
intention to overreach anothe

The bad faith that Section 3(e) of Republic 3019 requires, said this Court, does not simply connote bad
judgment or negligence. It imputes a dishonest purpose, some moral obliquity, and a conscious doing of a
wrong. Indeed, it partakes of the nature of fraud. 2

Here, admittedly, Dr. Dayco appears to have taken advantage of his brief designation as OIC Chancellor
to appoint the absent Chancellor, Dr. Posadas, as Director and consultant of the TMC Project. But it
cannot be said that Dr. Dayco made those appointments and Dr. Posadas accepted them, fraudulently,
knowing fully well that Dr. Dayco did not have that authority as OIC Chancellor.
All indications are that they acted in good faith. They were scientists, not lawyers, hence unfamiliar with
Civil Service rules and regulations. The world of the academe is usually preoccupied with studies,
researches, and lectures. Thus, those appointments appear to have been taken for granted at UP. It did
not invite any immediate protest from those who could have had an interest in the positions. It was only
after about a year that the COA Resident Auditor issued a notice of suspension covering payments out of
the Project to all UP personnel involved, including Dr. Posadas.

Still, in response to this notice, the UP Diliman Legal Office itself rendered a legal opinion that "confirmed
the authority of Dr. Dayco, while he was OIC Chancellor, to appoint Dr. Posadas as project director and
consultant of the TMC Project." Not only this, the COA Resident Auditor, who at first thought that the OIC
Chancellor had no power to make the designations, later accepted the Legal Office’s opinion and
withdrew the Notices of Suspension of payment that he issued. All these indicate a need for the Court to
reexamine its position that Dr. Dayco and Dr. Posadas acted in bad faith in the matter of those
appointments.

2. Dr. Dayco chose the most qualified for the project

The next question is whether Dr. Dayco, believing in good faith that he had the authority to make the
questioned designations, acted with "manifest partiality" in choosing Dr. Posadas among all possible
candidates as TMC Director and Consultant. The answer is no.

There is "manifest partiality" when there is a clear, notorious, or plain inclination or predilection to favor
one side or person rather than another.3 Here, the prosecution presented no evidence whatsoever that
others, more qualified than Dr. Posadas, deserve the two related appointments. The fact is that he was
the best qualified for the work:

First, Dr. Posadas originated the idea for the project and so he had every reason to want it to succeed.

Second, he worked hard to convince the relevant government offices to arrange funding for the project,
proof that he was familiar with the financial side of it as well.

Third, the members of the Task Force on Science and Technology Assessment, Management and Policy
—his own peers—nominated Dr. Posadas as Director of the UP Technology Management Center.

Fourth. The work fell within his area of expertise—technical management—ensuring professionalism in
the execution of the project.

In the world of the academe, that project was the equivalent of Dr. Posadas’ thesis. Thus, since he was a
natural choice to head the same, it beats the mind that such choice could be regarded as one prompted
by "manifest partiality."

3. The misstep was essentially of the administrative kind

The worst that could be said of Dr. Dayco and Dr. Posadas is they showed no sensitivity to the fact that,
although Dr. Dayco may have honestly believed that he had the authority to make those appointments, he
was actually appointing his own superior, the person who made him OIC Chancellor, however qualified he
might be, to those enviable positions. But this should have been treated as a mere administrative offense
for:

First. No evidence was adduced to show that UP academic officials were prohibited from receiving
compensation for work they render outside the scope of their normal duties as administrators or faculty
professors.

Second. COA disallowances of benefits given to government personnel for extra services rendered are
normal occurrences in government offices. They can hardly be regarded as cause for the filing of criminal
charges of corruption against the authorities that granted them and those who got paid.

Section 4 of the COA Revised Rules of Procedure merely provides for an order to return what was
improperly paid. And, only if the responsible parties refuse to do so, may the auditor then (a) recommend
to COA that they be cited for contempt; (b) refer the matter to the Solicitor General for the filing of the
appropriate civil action; and (c) refer it to the Ombudsman for the appropriate administrative or criminal
action.4 Here, Dr. Dayco and Dr. Posadas were not given the chance, before they were administratively
charged, to restore what amounts were paid since the Resident Director withdrew his notice of
disallowance after considering the view of the UP Diliman Legal Office.
If the Court does not grant petitioners’ motions for reconsideration, the common disallowances of benefits
paid to government personnel will heretofore be considered equivalent to criminal giving of "unwarranted
advantage to a private party," an element of graft and corruption. This is too sweeping, unfair, and
unwise, making the denial of most benefits that government employees deserve the safer and better
option.

Third. In other government offices, the case against Dr. Dayco and Dr. Posadas would have been treated
as purely of an administrative character. The problem in their case, however, is that other factors have
muddled it. The evidence shows that prior to the incident Dr. Posadas caused the administrative
investigation of UP Library Administrative Officer Ofelia del Mundo for grave abuse of authority, neglect of
duty, and other wrong-doings. This prompted Professor Tabbada, the Acting UP TMC Director, to resign
his post in protest. In turn, Ms. Del Mundo instigated the UP President to go after Dr. Posadas and Dr.
Dayco. Apparently, the Office of the Ombudsman played into the intense mutual hatred and rivalry that
enlarged what was a simple administrative misstep.

Fourth. The fault of Dr. Dayco and Dr. Posadas, who spent the best parts of their lives serving UP, does
not warrant their going to jail for nine to twelve years for what they did. They did not act with manifest
partiality or evident bad faith. Indeed, the UP Board of Regents, the highest governing body of that
institution and the most sensitive to any attack upon its revered portals, did not believe that Dr. Dayco and
Dr. Posadas committed outright corruption. Indeed, it did not dismiss them from the service; it merely
ordered their forced resignation and the accessory penalties that went with it.

The Board did not also believe that the two deserved to be permanently expelled from UP.1âwphi1 It
meted out to them what in effect amounts to mere suspension for one year since the Board practically
invited them to come back and teach again after one year provided they render a public apology for their
actions. The Board of Regents did not regard their offense so morally detestable as to totally take away
from them the privilege of teaching the young.

4. The prosecution did not prove unwarranted benefit or undue injury

Section 3(e) of Republic Act 3019 (Section 3. Corrupt practices of public officers. ANTI-GRAFT AND
CORRUPT PRACTICES ACT

requires the prosecution to prove that the appointments of Dr. Posadas caused "undue
injury" to the government or gave him "unwarranted benefits."

 Violation of Section 3(e) of RA No. 3019, the elements of which are as follows:

1. The accused must be a public officer discharging administrative, judicial or official

functions;

2. He must have acted with manifest partiality, evident bad faith or gross inexcusable
negligence; and

3. That his action caused any undue injury to any party, including the government, or
giving any private party unwarranted benefits, advantage or preference in the discharge
of his functions

This Court has always interpreted "undue injury" as "actual damage." What is more,
such "actual damage" must not only be capable of proof; it must be actually proved with
a reasonable degree of certainty. A finding of "undue injury" cannot be based on flimsy
and non-substantial evidence or upon speculation, conjecture, or guesswork. 5 The
Court held in Llorente v. Sandiganbayan 6 that the element of undue injury cannot be
presumed even after the supposed wrong has been established. It must be proved as
one of the elements of the crime.

Undue injury must be specified, quantified and proven to the point of moral
certainty.

Here, the majority assumed that the payment to Dr. Posadas of ₱30 000.00 monthly as
TMC Project Director caused actual injury to the Government. The record shows,
however, that the ₱247 500.00 payment to him that the COA Resident Auditor
disallowed was deducted from his terminal leave benefits. 7

The prosecution also failed to prove that Dr. Dayco gave Dr. Posadas "unwarranted
advantage" as a result of the appointments in question. The honoraria he received
cannot be considered "unwarranted" since there is no evidence that he did not
discharge the additional responsibilities that such appointments entailed.

WHEREFORE, the Court resolves to GRANT the motions for reconsideration of the
petitioners and to vacate their conviction on the ground of failure of the State to prove
their guilt beyond reasonable doubt.