PEOPLE OF THE PHILIPPINES, VS. HERMINIO CASAL REYES, MUNICIPAL MAYOR, MA. MARLEY C. DADAY, LEO BAUSING GOMEZ, ARTURO ELUMBA ESTIL

Ruling

Accordingly, in March 2003, a Memorandum of Agreement [8] (MOA) was entered into between the Municipality and the SB members, municipal secretary, budget officer, accountant, and assistant treasurer concerning, among other things, the availment of the latter of loans in the total amount of PHP 1.5 million to be borrowed from the fund allocated for the construction of the municipal building of Loreto which was unexpended, payable in three years through payroll deductions. The pertinent portion thereof states: WHEREAS, that the First Party is the Local Government Unit of Loreto[.] WHEREAS, that the First Party has sufficient funds coming from the Municipal Building set aside for the construction. However, the money will not be utilized in due time and it is only fitting and proper to lend to the Local Officials at a reasonable time. WHEREAS, the amount of [PHP 1.5 million] shall be taken from the money intended for the Municipal Building and it will be borrowed and subject to replenishment. WHEREAS, the SECOND PARTY is very much willing and eager to avail the loan to borrow the amount of [PHP 1.5 million] from the appropriation coming from the Municipal Building which is good for [15] Local Officials at the amount of [PHP] 100,000.00 each purposely to purchase service vehicle for official use of the Local Officials . WHEREAS, that the [PHP] 100,000.00 shall be payable for a period of [three] years through payroll deduction until the principal amount of [PHP] 100,000.00 is fully paid by the loaner. . . . . WHEREAS, that the herein mentioned shall be exclusively used for the intended purpose to suit the needs of the Local Officials in performing their official duties and responsibilities . [9] (Emphasis supplied) The SB also enacted three resolutions, two of which bore the same number, and all of which were approved by Reyes, to wit: Resolution No. 38-2003: "RESOLUTION TO BORROW THE AMOUNT OF [PHP 1.5 MILLION] TAKEN FROM THE MUNICIPAL BUILDING AND SUCH AMOUNT BE GRANTED TO MEMBERS OF THE SANGGUNIANG BAYAN, INCLUDING THE SECRETARY IN THE PURCHASE OF MOTOR VEHICLE AND SUCH AMOUNT IS CONSIDERED AS AN INDIVIDUAL LOAN WHICH IS PAYABLE FOR [THREE] YEARS THROUGH PAYROLL DEDUCTION." [10] Resolution No. 38-2003: "RESOLUTION TO BORROW THE AMOUNT OF [PHP 1.5 MILLION] TAKEN FROM THE MUNICIPAL BUILDING AND SUCH AMOUNT TO BE GRANTED AS A LIVELIHOOD PROJECTS [sic] TO SOME GOVERNMENT EMPLOYEES/OFFICIALS IN A FORM OF LOAN AND PAYABLE FOR A PERIOD OF [THREE] YEARS THROUGH PAYROLL DEDUCTION." [11] Resolution No. 126-2003: "RESOLUTION REQUESTING HON. HERMINIO C. REYES, MUNICIPAL MAYOR AND MR. FILOMENO C. SAUSE, MUNICIPAL TREASURER, TO RELEASE THE [PHP 1.6 MILLION] TO BE DEPOSITED WITH THE LAND BANK OF THE PHILIPPINES IN FAVOR OF LORETO TRANSPORT SERVICES ASSOCIATION, INC. LORETO, AGUSAN DEL SUR." [12] Thereafter, Land Bank of the Philippines (Land Bank), San Francisco Branch, Agusan del Sur, received a July 1, 2003 Letter [13] signed by Municipal Treasurer Filomeno Sali