Edgar Y. Teves and Teresita Z.

Teves, petitioners
vs.
The Sandiganbayan, respondent
GR No. 154182. December 17, 2004

Facts:
That on or about February 4, 1992, and sometime subsequent thereto, in Valencia, Negros Oriental,
Philippines, and within the jurisdiction of this Honorable Court, accused Edgar Y. Teves, a public officer, being
then the Municipal Mayor of Valencia, Negros Oriental, committing the crime-herein charged in relation to,
while in the performance and taking advantage of his official functions, and conspiring and confederating with
his wife, herein accused Teresita Teves, did then and there willfully, unlawfully and criminally cause the
issuance of the appropriate business permit/license to operate the Valencia Cockpit and Recreation Center in
favor of one Daniel Teves, said accused Edgar Y. Teveshaving a direct financial or pecuniary interest therein
considering the fact that said cockpit arena is actually owned and operated by him and accused Teresita
Teves.

On 16 July 2002, the Sandiganbayan promulgated a decision (1) convicting petitioners Edgar and
Teresita Teves of violation of Section 3(h) of the Anti-Graft Law; (2) imposing upon them an indeterminate
penalty of imprisonment of nine years and twenty-one days as minimum to twelve years as maximum; and (3)
ordering the confiscation of all their rights, interests, and participation in the assets and properties of the
Valencia Cockpit and Recreation Center in favor of the Government, as well as perpetual disqualification from
public office.9 The conviction was anchored on the finding that the petitioners possessed pecuniary interest in
the said business enterprise on the grounds that (a) nothing on record appears that Mayor Teves divested
himself of his pecuniary interest in said cockpit; (b) as of April 1992, Teresita Teves was of record the
"owner/licensee" of the cockpit; and (c) since Mayor Teves and Teresita remained married to each other from
1983 until 1992, their property relations as husband and wife, in the absence of evidence to the contrary, was
that of the conjugal partnership of gains. Hence, the cockpit is a conjugal property over which the petitioners
have pecuniary interest. This pecuniary interest is prohibited under Section 89(2) of R.A. No. 7160, otherwise
known as the Local Government Code (LGC) of 1991, and thus falls under the prohibited acts penalized in
Section 3(h) of the Anti-Graft Law.

The Sandiganbayan, however, absolved the petitioners of the charge of causing the issuance of a
business permit or license to operate the Valencia Cockpit and Recreation Center on or about 4 February 1992
for not being well-founded.

On 26 August 2002, the petitioners filed the instant petition for review on certiorari seeking to annul and
set aside the 16 July 2002 Decision of the Sandiganbayan.

Issue:
 Whether or not petitioner Edgar Y. Teves had direct pecuniary or financial interest over the Valencia
cockpit.

Held:

Section 3(h) of the Anti-Graft Law provides:

Section 3. 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:
…
(h) Directly or indirectly having financial or pecuniary interest in any business, contract or
transaction in connection with which he intervenes or takes part in his official capacity, or in
which he is prohibited by the Constitution or by any law from having any interest.

The essential elements set out in the afore-quoted legislative definition of the crime of violation of
Section 3(h) of the Anti-Graft Law are as follows:

1. The accused is a public officer;

2. He has a direct or indirect financial or pecuniary interest in any business, contract, or transaction;
3. He either
a. intervenes or takes part in his official capacity in connection with such interest; or
b. is prohibited from having such interest by the Constitution or by any law.

There are, therefore, two modes by which a public officer who has a direct or indirect financial or
pecuniary interest in any business, contract, or transaction may violate Section 3(h) of the Anti-Graft Law. The
first mode is if in connection with his pecuniary interest in any business, contract or transaction, the public
officer intervenes or takes part in his official capacity. The second mode is when he is prohibited from having
such interest by the Constitution or any law.

We quote herein the Sandiganbayan’s declaration regarding petitioners’ culpability anent the first mode:
 …[T]hat portion of the Information which seeks to indict the spouses Teves for his causing the
issuance of a business permit/license to operate the Valencia cockpit on or about February 4,
1992 is not well-founded.

… Mayor Edgar Teves could not have issued a permit to operate the cockpit in the year 1992
because as of January 1, 1992 the license could be issued only by the Sangguniang Bayan. He may
have issued the permit or license in 1991 or even before that when he legally could, but that is not the
charge. The charge is for acts committed in 1992.14 [Emphasis supplied].

The Sandiganbayan found that the charge against Mayor Teves for causing the issuance of the
business permit or license to operate the Valencia Cockpit and Recreation Center is "not well-founded." This it
based, and rightly so, on the additional finding that only the Sangguniang Bayan could have issued a permit to
operate the Valencia Cockpit in the year 1992. Indeed, under Section 447(3)15 of the LGC of 1991, which took
effect on 1 January 1992, it is the Sangguniang Bayan that has the authority to issue a license for the
establishment, operation, and maintenance of cockpits. Unlike in the old LGC, Batas Pambansa Blg. 337,
wherein the municipal mayor was the presiding officer of the Sangguniang Bayan,16 under the LGC of 1991, the
mayor is not so anymore and is not even a member of the Sangguniang Bayan. Hence, Mayor Teves could not
have intervened or taken part in his official capacity in the issuance of a cockpit license during the material
time, as alleged in the information, because he was not a member of the Sangguniang Bayan.

A fortiori, there is no legal basis to convict Teresita Teves as a co-conspirator in the absence of a
finding that Mayor Teves himself is guilty of the offense charged. In short, the Sandiganbayan correctly
absolved the petitioners of the charge based on the first mode. And there is no need to belabor this point.

The Sandiganbayan, however, convicted the petitioners of violation of Section 3(h) of the Anti-Graft
Law based on the second mode. It reasoned that the evidence overwhelmingly evinces that Mayor Teves had
a pecuniary interest in the Valencia Cockpit, which is prohibited under Section 89(2) of the LGC of 1991.

The evidence for the prosecution has established that petitioner Edgar Teves, then mayor of Valencia,
Negros Oriental, owned the cockpit in question. In his sworn application for registration of cockpit filed on 26
September 198319 with the Philippine Gamefowl Commission, Cubao, Quezon City, as well as in his renewal
application dated 6 January 198920 he stated that he is the owner and manager of the said cockpit. Absent any
evidence that he divested himself of his ownership over the cockpit, his ownership thereof is rightly to be
presumed because a thing once proved to exist continues as long as is usual with things of that nature.  His
affidavit dated 27 September 1990 declaring that effective January 1990 he "turned over the management of
the cockpit to Mrs. Teresita Z. Teves for the reason that [he] could no longer devote a full time as manager of
the said entity due to other work pressure" is not sufficient proof that he divested himself of his ownership over
the cockpit. Only the management of the cockpit was transferred to Teresita Teves effective January 1990.
Being the owner of the cockpit, his interest over it was direct.

Even if the ownership of petitioner Edgar Teves over the cockpit were transferred to his wife, still he
would have a direct interest thereon because, as correctly held by respondent Sandiganbayan, they remained
married to each other from 1983 up to 1992, and as such their property relation can be presumed to be that of
conjugal partnership of gains in the absence of evidence to the contrary. Article 160 of the Civil Code provides
that all property of the marriage is presumed to belong to the conjugal partnership unless it be proved that it
pertains exclusively to the husband or to the wife. And Section 143 of the Civil Code declares all the property
of the conjugal partnership of gains to be owned in common by the husband and wife. Hence, his interest in
the Valencia Cockpit is direct and is, therefore, prohibited under Section 89(2) of the LGC of 1991, which
reads:
Section 89. Prohibited Business and Pecuniary Interest. – (a) It shall be unlawful for any local
government official or employee, directly or indirectly, to:
…
(2) Hold such interests in any cockpit or other games licensed by a local government
unit…. [Emphasis supplied].

The offense proved, therefore, is the second mode of violation of Section 3(h) of the Anti-Graft Law,
which is possession of a prohibited interest.

WHEREFORE, premises considered, the 16 July 2002 Decision of the Sandiganbayan, First Division, in
Criminal Case No. 2337 is hereby MODIFIED in that (1) EDGAR Y. TEVES is convicted of violation of Section
3(h) of Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act, for possession of pecuniary or
financial interest in a cockpit, which is prohibited under Section 89(2) of the Local Government Code of 1991,
and is sentenced to pay a fine of P10,000; and (2) TERESITA Z. TEVES is hereby ACQUITTED of such
offense.