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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 96025

May 15, 1991

OSCAR P. PARUNGAO, petitioner,

vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.
Herminio Z. Canlas for petitioner.

GUTIERREZ, JR., J.:

May the Sandiganbayan, after finding that a municipal treasurer charged with malversation of public funds is not guilty
thereof, nevertheless convict him, in the same criminal case, for illegal use of public funds?
The petitioner, a former municipal treasurer of Porac, Pampanga, was charged with malversation of public funds allegedly
committed as follows:
That on or about the month of September, 1980, or sometime subsequent thereto, in the Municipality of
Porac, Province of Pampanga, Philippines, and within the jurisdiction of this Honorable Court, OSCAR
PARUNGAO, Municipal Treasurer of Porac, Pampanga, hence a public officer having been appointed and
qualified as such, having custody or control of and accountable for the public funds collected and received by
him by reason of the duties of his office, did then and there wilfully, unlawfully, feloniously and with abuse
of confidence, take, appropriate and convert to his own personal use and benefit the amount of ONE
HUNDRED EIGHTY-FIVE THOUSAND TWO HUNDRED FIFTY PESOS (P185,250.00), Philippine
Currency, to the damage and prejudice of the government in the said amount. (Rollo, p. 26)
The petitioner entered a plea of not guilty. During the pretrial conference, he admitted that on September 29, 1980, as
municipal treasurer of Porac, Pampanga, he received from the Ministry of Public Works and Highways the amount of
P185,250 known as the fund for construction, rehabilitation, betterment and improvement (CRBI) for the concreting of
Barangay Jalung Road located in Porac, Pampanga.
The prosecution presented six witnesses and tried to establish that the petitioner misappropriated the fund for his personal
use because while the fund was already completely exhausted, the concreting of Barangay Jalung Road remained unfinished.

In his defense, the petitioner accounted for the P185,250 fund as follows:
1. P126,095.59 was disbursed for materials delivered by the contractor under Voucher Numbers 41-80-12-440 and 41-80-12441 for P86,582.50 and P39,513.09 respectively.
2. P59,154.41 was used to pay, upon the insistence of the then Porac Mayor Ceferino Lumanlan, the labor payrolls of the
different barangays in the municipality.
After hearing, the respondent Sandiganbayan rendered a decision acquitting the petitioner of the crime of malversation of
public funds but convicting him of the crime of illegal use of public funds. The relevant parts of the decision are set forth
below:
The Certificate of Settlement (Exh. 5) issued to the accused certified that his money, property and
accountable forms as Municipal Treasurer of Porac, Pampanga for the period from February 6,1980 to
December 31, 1980, have been audited and found correct. It was signed by Auditor 1 Rolando A. Quibote and
approved by Provincial Auditor Jose C. de Guzman. Being public officers with official duties to perform in
the exercise of the functions of their office, the presumption is in favor of the lawful exercise of their
functions and the regular performance of their duties. (Sec. 5, par. m, Rule 131, Rules of Court). And quite
apart from that presumption of regularity in the performance of official duty which necessarily extends to the
correctness of the said certificate issued in the course of the discharge of such duty, there exists no serious
ground to impugn the aforesaid document in the context of the admission of prosecution witnesses Homer
Mercado and District Engineer Lacsamana regarding the delivery of materials and the grading thereof on the
project site by the contractor, the findings of investigating NBI Agent Azares, that accused Parungao had
submitted disbursement vouchers and supporting documents from the CRBI barangay Jalung fund to the
Provincial Auditor's Office which were audited and found in order by Auditor Quibote, and the
acknowledgments of Emerenciana Tiongco and auditing examiner Jose Valencia that the disbursements of
P86,582.50 and P39,513.09 under vouchers 4180-12-440 and 4180-12-441 were duly entered in accused
Parungao's Treasurer's Journal of Cash Disbursements and Cashbook. The foregoing considerations, and the
presumption of innocence accorded to every accused in a criminal prosecution, would not allow a finding that
the accused appropriated the P185,250.00 fund for his personal use and benefit.
But while the accused could be deemed to have fully accounted for the amount in question, the fact sticks out
from the evidence like a sore thumb that he allowed the use of part of the funds for a purpose other than what
it was intended. The said amount of P185,250.00 was specifically allotted for the concreting of the barangay
Jalung road in Porac, Pampanga. Instead of applying it fully to that particular project, he gave P59,154.41 of
it to the municipal mayor of Porac to pay the labor payrolls of the different barangays of the municipality,
resulting in the non-completion of the project. He thereby violated the following provision of Article 220 of
the Revised Penal Code. (Rollo, pp. 48-49)
The petitioner filed a motion for reconsideration which was denied by the Sandiganbayan, hence this petition for review.
The petitioner raises the following issues:
I. RESPONDENT SANDIGANBAYAN GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK
OF JURISDICTION AND/OR IN EXCESS OF JURISDICTION IN DENYING PETITIONER'S MOTION
FOR RECONSIDERATION AND IN AFFIRMING ITS DECISION FINDING PETITIONER GUILTY OF
TECHNICAL MALVERSATION.
II. RESPONDENT SANDIGANBAYAN GRAVELY ABUSED ITS DISCRETION AMOUNTING TO
LACK OF JURISDICTION AND/OR IN EXCESS OF JURISDICTION IN NOT CONSIDERING IN
FAVOR OF THE PETITIONER DOCUMENTS WHICH ARE MUTE BUT ELOQUENT PROOF OF HIS
INNOCENCE. (Rollo, p. 14)
The petitioner argues that he cannot be convicted of a crime different and distinct from that charged in the information.
The petitioner is correct. As recommended by the Solicitor General in his manifestation, the Court grants the petition.
The 1987 Constitution mandates that the accused, in all criminal prosecutions, shall enjoy the right to be informed of the
nature and cause of accusation against him. (Article III, Section 14 [21) From this fundamental precept proceeds the rule
that the accused may be convicted only of the crime with which he is charged.
An exception to this rule, albeit constitutionally permissible, is the rule on variance in Section 4, Rule 120 of the Rules on

Criminal Procedure which provides:

Sec. 4. Judgment in case of variance between allegation and proof. When there is variance between the
offense charged in the complaint or information, and that proved or established by the evidence, and the
offense as charged is included in or necessarily includes the offense proved, the accused shall be convicted of
the offense proved included in that which is charged, or of the offense charged included in that which is
proved. (4a)
Section 5 of the same Rule indicates when an offense includes or is included in another:
Sec. 5. When an offense includes or is included in another.An offense charged necessarily includes that
which is proved, when some of the essential elements or ingredients of the former, as this is alleged in the
complaint or information, constitute the latter. And an offense charged is necessarily included in the offense
proved, when the essential ingredients of the former constitute or form a part of those constituting the latter.
(5)
Is the decision of the Sandiganbayan convicting the petitioner of the crime of illegal use of public funds justified by the rule
on variance? Does the crime of malversation of public funds include the crime of illegal use of public funds, or is the former
included in the latter?
To both questions, the Court answers in the negative.
As gleaned from the information, the petitioner, a public officer, was accused of wilfully, unlawfully, feloniously and with
abuse of confidence, taking, appropriating or converting to his own personal use, public funds for which he was accountable.
The alleged acts constitute malversation of public funds punishable under Article 217 of the Revised Penal Code, which
reads:
Art. 217. Malversation of public funds or property. Presumption of malversation.Any public officer
who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the
same, or shall take or misappropriate or shall consent, or through abandonment or negligence, shall permit
any other person to take such public funds or property, wholly or partially, or shall otherwise be guilty of the
misappropriation or malversation of such funds or property, shall suffer: . . .
The essential elements of this crime are:
(a) the offender is a public officer; (b) by reason of his duties he is accountable for public funds and property; and (c) he
appropriates, takes, or misappropriates, or permits other persons to take such public funds or property, or otherwise is guilty
of misappropriation or malversation of such funds or property.
On the other hand, Article 220 of the Revised Penal Code, for which the petitioner was convicted, reads:
Art. 220. Illegal use of public funds or property. Any public officer who shall apply any public fund or
property under his administration to any public use other than that for which such fund or property were
appropriated by law or ordinance shall suffer the penalty of prision correccional in its minimum period or a
fine ranging from one-half to the total of the sum misapplied, if by reason of such misapplication, any
damage or embarrassment shall have resulted to the public service. In either case, the offender shall also
suffer the penalty of temporary special disqualification.
The essential elements of this crime, more commonly known as technical malversation, are:
(a) the offender is an accountable public officer; (b) he applies public funds or property under his administration to some
public use; and (c) the public use for which the public funds or property were applied is different from the purpose for which
they were originally appropriated by law ordinance.
A comparison of the two articles reveals that their elements are entirely distinct and different from the other. In malversation
of public funds, the offender misappropriates public funds for his own personal use or allows any other person to take such
public funds for the latter's personal use. In technical malversation, the public officer applies public funds under his
administration not for his or another's personal use, but to a public use other than that for which the fund was appropriated
by law or ordinance.
Technical malversation is, therefore, not included in nor does it necessarily include the crime of malversation of public funds

charged in the information.

Since the acts constituting the crime of technical malversation were not alleged in the information, and since technical
malversation does not include, or is not included in the crime of malversation of public funds, he cannot resultantly be
convicted of technical malversation.
The Sandiganbayan found that the petitioner had not taken, appropriated nor converted the CRBI fund for his personal use
and benefit. It, however, was of the belief that based on the evidence given during trial, the petitioner was guilty of technical
malversation. What the respondent court should have done was to follow the procedure laid down in Section 11, Rule 119 of
the Rules on Criminal Procedure.
Sec. 11. When mistake has been made in charging the proper offense When it becomes manifest at any
time before judgment, that a mistake has been made in charging the proper offense, and the accused cannot
be convicted of the offense charged, or of any other offense necessarily included therein, the accused shall
not be discharged, if there appears to be good cause to detain him. In such case, the court shall commit the
accused to answer for the proper offense and dismiss the original case upon the filing of the proper
information.(12a)
The Sandiganbayan therefore erred in not ordering the filing of the proper information against the petitioner, and in
convicting him of technical malversation in the original case for malversation of public funds.
Ordinarily, the Court's recourse would be to acquit the petitioner of the crime of illegal use of public funds without
prejudice, but subject to the laws on prescription, to the filing of a new information for such offense.
Considering however that all the evidence given during the trial in the malversation case is the same evidence that will be
presented and evaluated to determine his guilt or innocence in the technical malversation case in the event that one is filed
and in order to spare the petitioner from the rigors and harshness compounded by another trial, not to mention the
unnecessary burden on our overloaded judicial system, the Court deems it best to pass upon the issue of whether or not the
petitioner indeed is guilty of illegal use of public funds.
The petitioner alleged that the amount of P59,154.41, which was actually intended for the concreting of the Barangay Jalung
Road, was used to defray the labor payrolls of the different barangays of the municipality of Porac and presented documents
fully supporting the disbursement. This allegation was not rebutted by the prosecution.
The Sandiganbayan found him guilty of technical malversation.
However, Article 220 of the Revised Penal Code provides that for technical malversation to exist it is necessary that public
funds or properties had been diverted to any public use other than that provided for by law or ordinance. (Emphasis
supplied. See Palma Gil v. People of the Philippines, 177 SCRA 229 [1989])
The testimony of the prosecution witness Armando Lacsamana, as summarized by the Sandiganbayan, is as follows:
. . . The Province of Pampanga receives an annual CRBI (Construction, Rehabilitation, Betterment and
Improvement) fund. In 1980, Barangay Jalung, Porac, was one of the recipients of the fund in the amount of
P185,250.00. CRBI funds are released to the provincial treasurer and withdrawn by the municipal treasurer of
the municipality where a project is to be implemented. With regard to the CRBI fund for Barangay Jalung,
their office, through Engr. Anselmo Fajardo, conferred with the barangay captain on what project the
barangay wanted to undertake. It was agreed that the fund be utilizied for concreting the barangay Jalung
road. (TSN May 9, 1989, pp. 3-5). The project to be implemented having been determined, their office
prepared a program of work (Exh. 1-10) which included the following supporting documents:
1. Chart for an item of work (Exh. I-11);
2. Schedule of equipment (Exh. I-12)
3. Schedule of equipment and labor (Exhs. I-13, I-14, I-15);
4. Working schedule for laborers and technical men (Exh. I-16);
5. Schedule of materials (Exh. I-17);

6. Schedule of equipment (I-18);

7. Summary of the project (Exh. I-1 9). (TSN May 9, 1989, pp. 6-7). (Rollo, pp. 38-39)
Lacsamana's testimony shows that the CRBI fund is a general fund, and the utilization of this fund specifically for the
concreting of the Barangay Jalung Road was merely an internal arrangement between the Department of Public Works and
Highways and the barangay captain and was not particularly provided for by law or ordinance. There is no dispute that the
money was spent for a public purposepayment of the wages of laborers working on various projects in the municipality. It
is pertinent to note the high priority which laborers' wages enjoy as claims against the employers' funds and resources. In the
absence of a law or ordinance appropriating the CRBI fund for the concreting of the Barangay Jalung Road, the petitioner
cannot be declared guilty of the crime of illegal use of public funds.
WHEREFORE, the petition is hereby GRANTED. The decision of the Sandiganbayan is REVERSED. The petitioner is
ACQUITTED of the crime of illegal use of public funds.
SO ORDERED.
Fernan C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento, Grio-Aquino, Medialdea,
Regalado and Davide, Jr., JJ., concur.

Separate Opinions
FELICIANO, J., concurring and dissenting:
I concur in the result reached in this case, to the extent that the Court is setting aside the decision of the public respondent
Sandiganbayan. I agree that the Sandiganbayan cannot legally convict petitioner Parungao for violation of Article 220 of the
Revised Penal Code, considering that the information filed in this case was for violation of Article 217 of the Revised Penal
Code. It appears from an examination of the elements of the offenses penalized respectively by Articles 217 and 220 of the
Revised Penal Code, that malversation of public funds under Article 217 is not necessarily included in, and does not
necessarily include, the illegal use of public funds under Article 220 of the same Code, and vice versa.
At the same time, I have great difficulty with the position taken by Mr. Justice Gutierrez who, instead of setting aside the
Sandiganbayan decision without prejudice to the filing of an information under Article 220 of the Revised Penal Code,
undertook to determine the merits of the case as if such an information had in fact been filed. As I understand it, the decision
of the Court acquits petitioner Parungao of the crime of illegal use of public funds for the reason that there appears no law
or ordinance which dedicates the funds involved in this case to "the concreting of the Barangay Jalung Road:"
Lacsamana's testimony shows that the CRBI fund is a general fund, and the utilization of this fund
specifically for the concreting of the Barangay Jalung Road is merely an internal arrangement between the
Department of Public Works and highways and the Barangay Captain and was not particularly provided for
by law or ordinance. . . . In the absence of a law or ordinance appropriating the CRBI fund for the concreting
of the Barangay Jalung Road, the petitioner cannot be declared guilty of the crime of illegal use of public
fund.
If there was indeed no law or ordinance appropriating the CRBI fund for the concreting of Barangay Jalung Road, then it
appears to me that there was here a violation of the constitutional provision that "[n]o money shall be paid out of the
Treasury except in pursuance of an appropriation made by law," (Article VI [29] [1], 1987 Constitution). If there were no
appropriation by law or ordinance stating (however generally) that P185,250.00 of the CRBI funds shall or may be devoted
to the concreting of the Barangay Jalung Road, then legally no part of the CRBI fund (and not just P59,154.41 [out of the
P185,250.00] which was used to defray labor payrolls of different barangays for different projects) could be disbursed for
that particular purpose.
I would suggest that the People of the Philippines be given an opportunity, in a new prosecution under an appropriate
information for violation of Article 220 of the Revised Penal Code, to prove that there was in fact statutory authority for the
disbursement of the CRBI funds indicating, in terms which may be more or less general in character, that such funds may be
devoted to the concreting of the Barangay Jalung Road. That possibility appears to be foreclosed by the decision here being
reached by the Court.
Examination of our statute books shows that, prima facie, there was a law appropriating the CRBI funds (including the

P185,250.00 here involved) for the construction or improvement or repair of barangay roads including the Barangay Jalung
Road here involved.
P.D. No. 702, promulgated on 16 May 1975, created the Bureau of Barangay Roads under the Department of Public
Highways.1wphi1 The Bureau of Barangay Roads includes
the Construction, Rehabilitation, Betterment and Improvement CRBI Division which was given the
responsibility for exercising technical supervision over all the activities relating to construction,
rehabilitation, betterment and improvement of feeder roads and bridges, establish[ing] policy guidelines;
extend[ing] consultative services and set[ting] standards and procedures for construction, rehabilitation,
betterment and improvement works. (Section 4 [3], P.D. No. 702)
Section 5 of this statute provides as follows:
Sec. 5. Appropriations. All national funds appropriated and programmed by the Department of Public
Highways for the construction, rehabilitation, betterment, improvement and maintenance of barangay roads
and bridges including the shares of provinces, cities, municipalities and the allocation for the maintenance of
farm-to-market or feeder roads and bridges within a barangay area, from the Highway Special Fund, shall be
released to the Department of Public Highways which shall then sub-allot them to the barangays but
construction and maintenance shall be under the supervision of the Department of Public Highways through
the Bureau of Barangay Roads. (Emphasis supplied)
It appears that the CRBI fund referred to in the decision of the Court formed part of the "Highway Special Fund" which in
turn formed part of the legislative appropriations pertaining to the Department of Public Highways "for the construction, etc.
of barangay roads and bridges."
In Batas Pambansa Blg. 40, the General Appropriations Act, January 1-December 31, 1980, there were included in the
appropriations for the then Ministry of Public Highways the following items:
Current Operating Expenditures
xxx

xxx

xxx

3.0. Maintenance and Repair. For maintenance and repair of national roads and bridges, toll roads, operation
of quarries, asphalt and batching plants, aid to provincial, city, and municipal roads and bridges, and
barangay roads and bridges P1,250,156,000
xxx

xxx

xxx

xxx

xxx

xxx

3.6. Barangay Roads P397,232,000

Capital Outlays
5.0. Construction, Rehabilitation and Improvement. For construction, rehabilitation and improvement of
national roads and bridges, aid to provincial, city and municipal roads and bridges, barangay roads and
bridges P810,467,000
xxx

xxx

xxx

xxx

xxx

5.4. Barangay Roads and Bridges P239,288,000

xxx
(Emphasis supplied)
Code The lump-sum of P397,232,000 for maintenance and repair of barangay roads is broken down into sub-sums for each
of the several Regions: for Region I (which includes Pampanga), the amount of P55,442,000 was appropriated (General
Appropriations Act, CY 1980, p. 366). The lump-sum of P239,288,000 for construction, rehabilitation and improvement of
barangay roads and bridges was similarly broken down on a region-to-region basis, Region I being allocated the sum of

P1,889,040 (Ibid., p. 368-369).

It appears to me that the CRBI fund for barangay roads referred to in the decision of the Court formed part of the above
items of appropriation.
I am aware that the Solicitor General has recommended acquittal of accused Parungao in this case. However, the Solicitor
General did not distinguish between setting aside the decision of the Sandiganbayan as insupportable under the information
actually filed in this case, on the one hand, and, on the other hand, treating this case as if an information for violation of
Article 220 of the Revised Penal Code had in fact been filed and acquitting Parungao thereunder on the merits.
I, therefore, dissent from the majority opinion to the extent that it acquits petitioner Parungao on the merits of an information
for violation of Article 220 of the Revised Penal Code, which information has not yet in fact been filed.
In sum, I believe the decision of the Sandiganbayan should be set aside without prejudice to the right of the Government to
file another information this time for violation of Article 220 of the Revised Penal Code. As shown above, that there was a
violation of Article 220 is clear, at least prima facie, from the record, even though there was no evil intent (Understood as
conversion of public funds to personal uses) on the part of petitioner Parungao. Such an evil intent is not an element of the
offense of illegal use of public funds defined and penalized in Article 220 of the Revised Penal.
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