FIRST DIVISION

March 22, 2017

G.R. No. 200396

MARTIN VILLAMOR y TAYSON, and VICTOR BONAOBRA y GIANAN, Petitioners

vs
PEOPLE OF THE PHILIPPINES, Respondents

DECISION

DEL CASTILLO, J.:

The Constitution guarantees the right of the people to be secure in their persons, houses, papers, and
effects against unreasonable searches and seizures of whatever nature and for any purpose.1 A mere
tip from an unnamed informant does not vest police officers with the authority to barge into private
homes without first securing a valid warrant of arrest or search warrant. While there are instances
where arrests and searches may be made without a warrant, the Court finds that the constitutionally-
protected right against unreasonable searches and seizures was violated in the case at bar.

This Petition for Review under Rule 45 of the Rules of Court seeks to set aside the June 13, 2011
Decision2 of the Court of Appeals (CA) in CA-G.R. CR No. 30457 which affirmed the October 25, 2006
Judgment3 of the Regional Trial Court (RTC), Branch 43 of Virac, Catanduanes in Criminal Case Nos.
3463 and 3464) convicting both petitioners for Violation of Presidential Decree (PD) No.
1602 as amended by Republic Act (RA) No. 9287, otherwise known as "An Act Increasing the Penalties
for Illegal Numbers Games Amending Certain Provisions of PD 1602 and for Other Purposes." Petitioner
Martin T. Villamor (Villamor) was convicted as a collector of bets in the illegal numbers game
of "lotteng" under Section 3(c) of RA 9287, while petitioner Victor G. Bonaobra (Bonaobra) was
convicted as a coordinator, controller, or supervisor under Section 3(d) of the said Jaw. The RTC
sentenced Villamor to suffer the penalty of imprisonment from eight (8) years and one (1) day as
minimum to nine (9) years as maximum, while Bonaobra was sentenced to suffor the penalty of
imprisonment of ten (10) years and one (1) day as minimum to eleven (11) years as maximum.

Factual Antecedents

Villamor was charged with violation of Section 3(c) of RA 9287 for collecting and soliciting bets for an
illegal numbers game locally known as "lotteng' and possessing a list of various numbers, a calculator,
a cellphone, and cash. The charge stemmed from the following lnformation:4

That on or ahout the 17th day of June 2005 in the morning, in barangay Francia, municipality of Virac,
province of Catanduanes, Philippines, \vi thin the jurisdiction of this Honorable Court the said accused
with intent [to] gain thru illegal means did then and there, [ willfully ], unlawfully and feloniously
engage, collect [and] solicit x x x bets for illegal numbers game locally known as "Lotteng" by having
in his possession [a] calculator, cellphone, [list] of various numbers and money and lotteng
paraphernalias.

CONTRARY TO LAW.

Another Information5 was filed in the same court charging Bonaobra with violation of the same law,
committed as follows:

That on or about the 17th day of June 2005 in the morning, in barangay Francia, municipality of Virac,
province of Catanduanes, Philippines, within the jurisdiction of this Honorable Court the said accused
with intent [to] gain thru illegal means did then and there, [willfully], unlawfully and feloniously
maintain and operate illegal numbers game locally known as "lotteng" while in possession of gambling

1
paraphernalias, such as [a] calculator, cellphone, list of various numbers and cash in the amount of
₱1,500.00 representing collection of bets.

CONTRARY TO LAW.

Petitioners filed t1eir respective Motions for Reinvestigation, which were both granted by the RTC.
Subsequently, the Office of the Provincial Prosecutor issued separate Resolutions both dated
September 13, 2005 amending the Informations in both cases.

In the Amended Information, the phrase "acting as a collector" was included to charge Villamor as a
collector in an illegal numbers game. The Amended Information6 provides:

That on or about the 17th day of June 2005 in the morning, in barangay Francia, municipality of Virac,
province of Catanduanes, Philippines, within the jurisdiction of this Honorable Court the said accused
acting as a collector with intent [to] gain thru illegal means[,] did then and there, willfully, unlawfully
and foloniously engage, collect and solicit bets for illegal numbers game locally known as "Lotteng" by
having in his possession [a] calculator, cellphone, [list] of various numbers and money and lotteng
paraphernalias.

CONTRARY TO LAW.

On the other hand, Bonaobra was charged as a manager or operator in the Amended Info1mation, 7 the
incriminatory paragraph of which states:

That on or about the 17th day of June 2005 in the morning, in barangay Francia, municipality of Virac,
province of Catanduanes, Philippines, within the jurisdiction of this Honorable Court the said accused
acting as manager and operator with intent [to] gain thru illegal means did then and there, [willfully],
unlawfully and feloniously maintain and operate illegal numbers game locally known as "lotteng" while
in possession of gambling paraphernalia, such as [a] calculator, cellphone, lists of variott5 numbers
and cash in the amount of ₱l,500,00 representing colleciion of bets.

CONTRARY TO LAW.

When separately arraigned, Villamor, on October 4, 2005 and Bonaobra, on November 29, 2005, both
pleaded not guilty to the respective charges filed against them. After the pre-trial conference, a joint
trial on the merits followed.

Version of the Prosecution

The prosecution presented four witnesses, namely: Domingo Tejerero (Tejerero), Provincial Director,
Police Superintendent Francisco Penaflor (PD Peñaflor), SP04 Severino Malasa, Jr., and POI David
Adrian Saraspi (POI Saraspi). Culled from the records were the following facts:

On June 17, 2005, at around 9:00 a.m., PD Peñaflor received a call from an infonnant regarding an
ongoing illegal numbers game at Barangay Francia, Virac, Catanduanes, specifically at the residence of
Bonaobra. A team composed of PD Peñaflor, Saraspi, PO 1 Rolando Ami, a driver, and a civilian asset
proceeded to Bonaobra's residence to confirm the report.

Upon arrival at the target area, the team parked their service vehicle outside the compound fenced by
bamboo slats installed two inches apart which allowed them to see the goings on inside. According to
the police officers, they saw petitioners in the act of counting bets, described by the Bicol
term "revisar," which means collating and examining numbers placed in "papelitos," which are slips of
paper containing bet numbers, and counting money bets.

When they entered the gate of the compound, they introduced themselves as police officers and
confiscated the items found on the table consisting of cash amounting to ₱l,500.00 in different
denominations, the "papelitos," a calculator, a cellular phone, and a pen. Petitioners were then brought
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to Camp Francisco Camacho where they were investigated for illegal gambling. Subsequently, a case
was filed against the petitioners before the Office of the Provincial Prosecutor.

Version of the Defense

The defense presented six witnesses, namely Villamor, Bonaobra, Demetrio Bonaobra. the brother of
Bonaobra, Florencio Bonaobra (Florencio), the father of Bonaobra, Juan Vargas, and Jonah Bonaobra
(Jonah), the wife of Bonaobra. Their testimonies are summarized below.

On June 17, 2005, at around 8:30 a.m., Villamor went to Bonaobra's house to pay a debt he owed to
the latter's wife, Jonah. At that time, Bonaobra was having coffee with his father Florencio inside their
house. Villamor gave Bonaobra ₱2,000.00 which the latter placed on top of the table. Bonaobra then
went outside the house to answer his cellphone. When Bonaobra was at the door, a man later
identified as PD Peñaflor kicked the fence of Bonaobra's house, grabbed Bonaobra's right arm, and
said, "Caught in the act ka!" Florencio went outside and asked PD Peñaflor if he had a search warrant.
Two more men entered the house and took the money from the table. Petitioners were then made to
board the service vehicle and brought in for investigation at the police headquarters.

Ruling of the Regional Trial Court

On October 25, 2006, the RTC of Virac, Catanduanes, Branch 43 rendered its Judgment finding
petitioners guilty beyond reasonable doubt of committing illegal numbers game locally known
as ''lotteng," a variant of the game Last Two,8 respectively as a collector or agent under Section 3(c),
and as a coordinator, controller, or supervisor under Section 3(d), of RA 9287.

The RTC gave credence to the testimonies of the arresting officers and held that petitioners were
caught in flagrante delicto committing an illegal numbers game locally known as "lotteng," a variant
of Last Two. The RTC held that petitioners were seen by the arresting officers in the act of counting
bets before the arrest was made inside Bonaobra' s compound. 1he petitioners were also caught
holding "'papelitos," which contained the three rows of two-number combinations. Since the winning
combination in "lotteng" is taken from the first two numbers of the winning combinations in the daily
draw of the lotto in the Philippine Charity Sweepstakes, the RTC held that the number combinations
shown in the ''papelitos" were meant to correspond to the lotto results.

The RTC further held that Villamor's participation in the illegal numbers game was that of a collector
since he brought bet money to Bonaobra while the latter was that of a coordinator, controller, or
supervisor after it was shown that he received the money from Villamor.

The dispositive part of the Judgment of the RTC reads:

WHEREFORE, applying the Indeterminate Sentence Law, this Court hereby SENTENCES Martin Villamor
to suffer a penalty of imprisonment from eight (8) years and one (1) day as minimum to nine (9) years
as maximum, and Victor Bonaobra to suffer a penalty of ten (10) years and one (1) day as minimum to
eleven (11) years as maximum. Likewise, the money amounting to ₱l,500.00 and the other personal
properties used as gambling paraphernalia, like the calculator, ballpen and cellular phone are
confiscated in favor of the state.

SO ORDERED9

Ruling of the Court of Appeals

On June 13, 2011, the CA affirmed the RTC's Decision. The CA brushed aside Bonaobra's argument
that his right to due process was violated when he was convicted of a crime different from that with
which he was charged. The CA held that the classification of a maintainer, manager, or operator
includes a coordinator, controller, or supervisor.10 The CA ratiocinated that to hold a maintainer guilty
of the lesser offense of acting as a coordinator will not be violative of his right to be informed of the

3
nature and cause of his accusation since the graver offense of acting as a maintainer necessarily
includes being a coordinator.

With respect to Villamor, the CA gave more weight and credence to the testimonies of the arresting
officer who were presumed to have acted regularly in the performance of their official functions. The
CA held that Villamor' s denials cannot prevail over the positive assertions of the police officers who
caught him in the act of revising and counting bets.

The CA disposed the case as follows:

IN VIEW OF THE FOREGOING, the decision appealed from is affirmed.

SO ORDERED.11

Hence, this Petition.

Issue

The main issue in this case is whether the petitioners' conviction for violation of RA 9287 as collector or
agent under Section 3(c) for Villamor, and as coordinator, controller, or supervisor m1der Section 3(d)
for Bonaobra, should be upheld.

Our Ruling

We find the Petition meritorious.

In criminal cases, an appeal throws the entire "case wide open for review and the reviewing tribunal
can correct errors, though unassigned in the appealed judgment, or even reverse the trial court's
decision [based on] x x x grounds other than those that the parties raised as errors."12

The Court finds that the right of the petitioners against unreasonable searches and seizures was
violated by the arresting officers when they barged into Bonaobra's compound without a valid warrant
of arrest or a search warrant. While there are exceptions to the rule requiring a warrant for a valid
search and seizure, none applies in the case at bar. Consequently, the evidence obtained by the police
officers is inadmissible against the petitioners, the same having been obtained in violation of the said
right.

Section 2, Article Ill of the 1987 Constitution requires a judicial warrant based on the existence of
probable cause before a search and an arrest may be effected by law enforcement agents. Without the
said warrant, a search or seizure becomes unreasonable within the context of the Constitution and any
evidence obtained on the occasion of such unreasonable search and seizure shall be inadmissible in
evidence for any purpose in any proceeding.13 "Evidence obtained and confiscated on the occasion of
such an unreasonable search and seizure is tainted and should be excluded for being the proverbial
fruit of the poisonous tree."14

In this case, the apprehending officers claim that petitioners were caught in flagrante delicto, or
caught in the act of committing an offense. PD Peñaflor and his team of police officers claim that
petitioners were committing the offense of illegal numbers game when they were arrested without a
warrant.

We are not persuaded.

Under Section 5 of Rule 113 of the Rules of Court, a lawful arrest may be effected even without a
warrant of arrest in the following instances:

Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person may, without a
warrant, arrest a person:

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(a) When, in his presence, the person to be arrested has committed, is actually committing, or is
attempting to commit an offense;

(b) When an offense has in fact just been committed, and he has probable cause to believe based on
personal knowledge of facts or circumstances that the person to be arrested has committed it; and

(c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place
where he is serving final judgment or temporarily confined while his case is pending, or has escaped
while being transferred from one confinement to another.

In cases falling under paragraphs (a) and (b) above, the person arrested without a warrant shall be
forthwith delivered to the nearest police station or jail and shall be proceeded against in accordance
with Section 7 of Rule 112.

In warrantless arrests made pursuant to Section 5(a), Rule 113, two elements must concur, namely
"(a) the person to be arrested must execute an overt act indicating that he has just committed, is
actually committing, or is attempting to commit a crime; and (b) such overt act is done in the presence
or within the view of the arresting officer."15

After a judicious review of the records of the case, the Court finds that there was no valid warrantless
arrest on petitioners.1âwphi1 It was not properly established that petitioners had just committed, or
were actually committing, or attempting to commit a crime and that said act or acts were done in the
presence of the arresting officers. Based on the testimonies of PO1 Saraspi and PD Peñaflor, they were
positioned some 15 to 20 meters away from petitioners. PO 1 Saraspi's testimony during cross
examination reveals the following:

ATTY. SAMONTE:

Q While you were outside the compound of Bonaobra, what was your distance to accused Martin
Villamor and Victor Bonaobra?

A More or less fifteen (15) to twenty (20) meters.

Q Is it not that the compound of Bonaobra is surrounded with fence?

A Yes, sir.

Q Bamboo fence, right?

A Yes, sir, without a gate.

Q Are you sure it's without a gate?

A Probably it was open.

Q Can you determine the height of the fence?

A Between 5'7" to 5'9".

Q More than your height?

A Yes, sir.

Q Can you tell us whether you can see what the person is doing inside the compound while you are
outside?

A The fence is made up [sic] of bamboo and there were gaps as far as the fence is concerned that is
why when we alighted from the Frontier we saw what was inside the compound.

5
Q And the space of each bamboo, can you determine [sic]?

A One and half to two inches apart.

Q When you were already outside the compound what were the accused doing?

A They were sitting and they were revising.

Q Were they seated with [sic] a table?

A They were sitting and Victor Bonaobra was without a shirt.

Q What were they holding?

A 'Papelitos'.

Q What else?

A While they were holding 'papelitos' the monies were just on the table.

Q At the distance of 15 to 10 meters can you determine the contents of the 'papelitos'?

A No, sir.

Q So you are not sure whether those are gambling paraphernalia?

A No, sir.

Q Because you do not know the contents of that and you are not sure whether those are gambling
paraphernalia you went inside, is that right?

A After we introduced ourselves that we are [sic] police officers we entered the compound.

Q Meaning to say you were outside the compound and saying you are policemen?

A We entered first and we introduced ourselves.

Q Which is first, going inside or introducing yourselves?

A While entering we were also introducing ourselves simultaneously.

Q When you reached inside, what did you determine?

A We determined that there were lotteng paraphernalia on the table.

Q That is the only time that you determined that those were gambling paraphernalia?

A No, even on the [sic] outside we identified it already.

Q A while ago you said at a distance of 15 to 10 meters you can determine whether they were in
possession of the illegal gambling paraphernalia?

A What I am trying to say is that I cannot identify those that are written on the 'papelitos' at the
distance and I saw the calculator, the money bets.

Q So what you saw within a distance of 15 to 10 meters are calculators, money and cellphone?

A Yes, sir.

Q Do you consider money gambling paraphernalia?

6
A Yes, sir.

Q So every time you see money you will consider that a gambling paraphernalia?

A In other situations.

Q How about calculator, do you consider calculator gambling paraphernalia?

A Yes, sir.

Q When you go to a department store there are calculators, do you consider those calculators
gambling paraphernalia?

A If you are going to consolidate all these items in a table all of these are gambling paraphernalia

Q So when you consolidate these items and papers and calculators, if you see those items at Century
Trading, will you consider those as gambling paraphernalia?16

Considering that 15 to 20 meters is a significant distance between the police officers and the
petitioners, the Court finds it doubtful that the police officers were able to determine that a c1iminal
activity was ongoing to allow them to validly effect an in flagrante delicto warrantless arrest and a
search incidental to a warrantless arrest thereafter. The police officers even admitted that the
compound was surrounded by a bamboo fence 5'7" to 5'9" in height, which made it harder to see what
was happening inside the compound. It appears that the police officers acted based solely on the
information received from PD Peñaflor's informant and not on personal knowledge that a crime had just
been c01m11itted, was actually being committed, or was about to be committed in their presence. The
Court finds it doubtful that the police officers witnessed any overt act before entering the private home
of Bonaobra immediately preceding the arrest. PO1 Saraspi even admitted that from his position
outside the compound, he could not read the contents of the so-called "papelitos;" yet, upon seeing
the calculator, phone, papers and money on the table, he readily concluded the same to be gambling
paraphernalias.

On the part of PD Peñaflor, he likewise admitted that from his position outside the compound, he could
not determine the activities of the persons inside. It was only after he had illegally entered the
compound, since he was not armed with a warrant, that he supposedly saw the gambling
paraphernalia. PD Peñaflor's testimony in this regard is as follows:

Q Can you tell the Honorable Court, Mr. Witness, the distance of the house of Victor Bonaobra to that
place where you parked your vehicle when you arrived in the vicinity?

A When I parked my vehicle in front of the compound because that is a street, the distance from the
street to that place where there is an on-going 'revisar' of 'lotteng', more or less 15 to 20 meters, I
believe, from the gate.

Q So, you did not immediately go inside the compound of Victor Bonaobra?

A Yes, sir. I verified first if there is really [sic] persons in the compound.

Q So, at that distance of 15 to 20 meters, you were able to verify what they were doing on the
particular 1ime, Mt. Witness?

A No, sir.17

During his direct examination, Bonaobra testified that he was only answering his cellphone when PD
Peñaflor barged into his compound and arrested him. The relevant portions of his testimony reveals
the following:

ATTY SAMONTE:
7
Q At around 9:00 a.m. of June 17, 2005, what were you doing if you still remember?

A I stood up and I went out and made [sic] three steps from the door to answer the cellphone and
later on I was surprised when the police whom I could not identify, kicked the door.

Q Mr. Witness, which door [are you] referring to [that] was kicked by the police?

A The gate outside of our fence.

xxxx

Q You said a while ago that the policeman kicked the door of your fence x

xx who was that policeman, if you know him?

A: Provincial Director Peñaflor.

Q: Who was with PD Peñaflor on [sic] that particular time, if any, Mr. Witness?

A Two (2) persons in civilian clothes.

xx xx

Q After PD Peñaflor kicked the door of your fence, what happened next, Mr. Witness?

A He held my hand and he seized my cellphone.

xxxx

Q After PD Peñaflor seized your cellphone, what else did he do?

A He said, "caught in the act."

Q Which comes first, Mr. Witness, the utterance made by PD Peñaflor that you were caught in the act
or the utterance made by your father whether they had a warrant?

A When my father asked them whether they have a warrant.

Q And what was the answer of PD Peñaflor when your father asked that question?

A He said, "caught in the act."

Q And what was the reply of your father?

A My father said that what you am doing is wrong, that is prohibited.

Q And what did PD Peñaflor answered [sic] to your father?

A He shouted at my father, "Di na kailangan yan" (That is not needed).18

From the circumstances above, it is highly suspect that PD Peñaflor had witnessed any overt act
indicating that the petitioners were actually committing a crime. While PD Peñaflor claims that he
caught the petitioners in the act of collecting bets and counting bet money, this observation was highly
improbable given the distance of the police from the petitioners and the fact that the compound was
surrounded by a bamboo fence.

For his part, Villamor claimed that he was at the Bonaobra compound to repay his loan to Jonah. The
prosecution, through Prosecutor Tañon, even admitted this fact during Jonah's direct examination. The
following exchange between the prosecution and the defense was quite revealing:

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ATTY. SAMONTE:

Your Honor, please, [may] I respectfully offer the testimony of Jona[h] Bonaobra to show that she is
the ·wife of Victor Bonaobra; that at around 8:30 a.m. of June 17, 2005 she was inside their residence
at Bonaobra's compound, Francia, Virac, Catanduances and on that particular time and date, Martin
Villamor arrived to pay his debt and she personally witnessed the unlawful act committed by the
policemen who entered their dwelling on that particular lime and date and such other matters relative
thereto, Your Honor.

COURT:

Any comment from the prosecution?

PROS. TAÑON:

We will admit that she is the wife of Victor Bonaobra; that on Jw1e 17, 2005 at 8:30 in the morning
she was inside the residence of Bonaobra's compound; that accused Martin Villamor arrived to pay his
debt. We are to contest on that she personally witnessed the unlawful act.

A1TY. SAMONTE:

To clarify that, the prosecution is admitting the fact that Martin arrived to pay the loan on that
particular day?

PROS. TAÑON:

Yes, Your Honor.

COURT:

Okay, so that we can proceed to the other matters.19 (Emphasis supplied)

From the exchange above, it is clear that the prosecution admitted that Villamor went to Bonaobra's
house to pay his loan to Jonah. Thus, at the exact moment of the arrest, neither Bonaobra, who was
answering his cellphone, nor Villarr1or, who was paying his loan. was performing any overt act
constitutive of a crime.

Verily, the warrantless arrest conducted by PD Peñaflor and his team was unlawful as the same does
not satisfy the requirements of an in flagrante delicto arrest. Consequently, the search and seizure of
the effects found inside the house of Bonaobra are likewise illegal since there could be no valid search
incident to an illegal warrantless arrest. Thus, evidence seized from Bonaobra's house is inadmissible
for being a fruit of the poisonous tree.

The Court is aware that any question regarding the legality of a warrantless arrest must be raised
before arraignment. Failure to do so constitutes a waiver of the right to question the legality of the
arrest especially when the accused actively participated during trial as in this case. However, we have
clarified that such waiver is only confined to the defects of the arrest and not on the inadmissibility of
the evidence seized during an illegal arrest. In People v. Racho,20 the Court held that:

Obviously, this is an instance of seizure of the 'fruit of the poisonous tree', hence, the confiscated item
is inadmissible in evidence consonant with Article III, Section 3(2) of the 1987 Constitution, 'any
evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in
any proceeding'.

Without the confiscated shabu, appellant's conviction cannot be sustained based on the remaining

evidence. Thus, an acquittal is warranted, despite the waiver of appellant of his right to question the
illegality of his arrest by entering a plea and his active participation in the trial of the case. As earlier

9
mentioned, the legality of an arrest affects only the jurisdiction of the court over the person of the
accused. A waiver of an illegal, warrantless arrest does not carry with it a waiver of the inadmissibility
of evidence seized during an illegal warrantless arrest. (Emphasis supplied)

In this case, the prosecution failed to clearly establish the acts that constitute the offense of illegal
gambling as a collector or an agent under Section 3(c), and as a coordinator, controller, or supervisor
under Section 3(d), of RA 9287. Under the said law, a collector or agent is "any person who collects,
solicits or produces bets in behalf of his/her principal for any illegal numbers game who is usually in
possession of gambling paraphernalia." 21 On the other hand, a coordinator, controller, or supervisor is
defined as, ''any person who exercises control and supervision over the collector or agent."22 The
prosecution merely relied on the alleged illegal gambling paraphernalia found and confiscated inside
the house of Bonaobra and not on the specific overt acts that constitute the offense.

All told, the evidence purportedly seized from the Bonaobra compound is inadmissible in evidence since
it was obtained in violation of Section 3(2), Article III of the 1987 Constitution. Since the alleged illegal
gambling paraphernalia is the very corpus delicti of the crime charged, the Court acquits petitioners.

WHEREFORE, the June 13, 2011 Decision of the Court of Appeals in CA-G.R. CR No. 30457 which
affirmed the Judgment of the Regional Trial Court of Virac, Catanduanes, Branch 43 in Criminal Case
Nos. 3463 and 3464 is hereby REVERSED and SET ASIDE. Petitioners Martin Villamor y Tayson and
Victor Bonaobra y Gianan are ACQUITTED and are ordered to be immediately RELEASED from
detention, unless they are confined for any other lawful cause.

The Director of the Bureau of Corrections is DIRECTED to IMPLEMENT this Decision and to report to
this Court the action taken hereon within five days from receipt.

SO ORDERED.

CJ Sereno, J. Leonardo-De Castro, Reyes and Caguioa concur.

SECOND DIVISION

G.R. No. 163553               December 11, 2009

YUN KWAN BYUNG, Petitioner,

vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION, Respondent.

DECISION

CARPIO, J.:

The Case

Yun Kwan Byung (petitioner) filed this Petition for Review1 assailing the Court of Appeals’
Decision2 dated 27 May 2003 in CA-G.R. CV No. 65699 as well as the Resolution 3 dated 7 May 2004
denying the Motion for Reconsideration. In the assailed decision, the Court of Appeals (CA) affirmed
the Regional Trial Court’s Decision4 dated 6 May 1999. The Regional Trial Court of Manila, Branch 13
(trial court), dismissed petitioner’s demand against respondent Philippine Amusement and Gaming
Corporation (PAGCOR) for the redemption of gambling chips.

The Facts

PAGCOR is a government-owned and controlled corporation tasked to establish and operate gambling
clubs and casinos as a means to promote tourism and generate sources of revenue for the
government. To achieve these objectives, PAGCOR is vested with the power to enter into contracts of
every kind and for any lawful purpose that pertains to its business. Pursuant to this authority, PAGCOR

10
launched its Foreign Highroller Marketing Program (Program). The Program aims to invite patrons from
foreign countries to play at the dollar pit of designated PAGCOR-operated casinos under specified terms
and conditions and in accordance with industry practice.5

The Korean-based ABS Corporation was one of the international groups that availed of the Program. In
a letter-agreement dated 25 April 1996 (Junket Agreement), ABS Corporation agreed to bring in
foreign players to play at the five designated gaming tables of the Casino Filipino Silahis at the Grand
Boulevard Hotel in Manila (Casino Filipino). The relevant stipulations of the Junket Agreement state:

1. PAGCOR will provide ABS Corporation with separate junket chips. The junket chips will be
distinguished from the chips being used by other players in the gaming tables.

ABS Corporation will distribute these junket chips to its players and at the end of the playing period,
ABS Corporation will collect the junket chips from its players and make an accounting to the casino
treasury.

2. ABS Corporation will assume sole responsibility to pay the winnings of its foreign players and settle
the collectibles from losing players.

3. ABS Corporation shall hold PAGCOR absolutely free and harmless from any damage, claim or liability
which may arise from any cause in connection with the Junket Agreement.

5. In providing the gaming facilities and services to these foreign players, PAGCOR is entitled to
receive from ABS Corporation a 12.5% share in the gross winnings of ABS Corporation or 1.5 million
US dollars, whichever is higher, over a playing period of 6 months. PAGCOR has the option to extend
the period.6

Petitioner, a Korean national, alleges that from November 1996 to March 1997, he came to the
Philippines four times to play for high stakes at the Casino Filipino. 7 Petitioner claims that in the course
of the games, he was able to accumulate gambling chips worth US$2.1 million. Petitioner presented as
evidence during the trial gambling chips with a face value of US$1.1 million. Petitioner contends that
when he presented the gambling chips for encashment with PAGCOR’s employees or agents, PAGCOR
refused to redeem them.8

Petitioner brought an action against PAGCOR seeking the redemption of gambling chips valued at
US$2.1 million. Petitioner claims that he won the gambling chips at the Casino Filipino, playing
continuously day and night. Petitioner alleges that every time he would come to Manila, PAGCOR would
extend to him amenities deserving of a high roller. A PAGCOR official who meets him at the airport
would bring him to Casino Filipino, a casino managed and operated by PAGCOR. The card dealers were
all PAGCOR employees, the gambling chips, equipment and furnitures belonged to PAGCOR, and
PAGCOR enforced all the regulations dealing with the operation of foreign exchange gambling pits.
Petitioner states that he was able to redeem his gambling chips with the cashier during his first few
winning trips. But later on, the casino cashier refused to encash his gambling chips so he had no
recourse but to deposit his gambling chips at the Grand Boulevard Hotel’s deposit box, every time he
departed from Manila.9

PAGCOR claims that petitioner, who was brought into the Philippines by ABS Corporation, is a junket
player who played in the dollar pit exclusively leased by ABS Corporation for its junket players.
PAGCOR alleges that it provided ABS Corporation with distinct junket chips. ABS Corporation
distributed these chips to its junket players. At the end of each playing period, the junket players
would surrender the chips to ABS Corporation. Only ABS Corporation would make an accounting of
these chips to PAGCOR’s casino treasury.10

As additional information for the junket players playing in the gaming room leased to ABS Corporation,
PAGCOR posted a notice written in English and Korean languages which reads:

11
NOTICE

This GAMING ROOM is exclusively operated by ABS under arrangement with PAGCOR, the former is
solely accountable for all PLAYING CHIPS wagered on the tables. Any financial
ARRANGEMENT/TRANSACTION between PLAYERS and ABS shall only be binding upon said PLAYERS
and ABS.11

PAGCOR claims that this notice is a standard precautionary measure 12 to avoid confusion between
junket players of ABS Corporation and PAGCOR’s players.

PAGCOR argues that petitioner is not a PAGCOR player because under PAGCOR’s gaming rules,
gambling chips cannot be brought outside the casino. The gambling chips must be converted to cash at
the end of every gaming period as they are inventoried every shift. Under PAGCOR’s rules, it is
impossible for PAGCOR players to accumulate two million dollars worth of gambling chips and to bring
the chips out of the casino premises.13

Since PAGCOR disclaimed liability for the winnings of players recruited by ABS Corporation and refused
to encash the gambling chips, petitioner filed a complaint for a sum of money before the trial
court.14 PAGCOR filed a counterclaim against petitioner. Then, trial ensued.

On 6 May 1999, the trial court dismissed the complaint and counterclaim. Petitioner appealed the trial
court’s decision to the CA. On 27 May 2003, the CA affirmed the appealed decision. On 27 June 2003,
petitioner moved for reconsideration which was denied on 7 May 2004.

Aggrieved by the CA’s decision and resolution, petitioner elevated the case before this Court.

The Ruling of the Trial Court

The trial court ruled that based on PAGCOR’s charter, 15 PAGCOR has no authority to lease any portion
of the gambling tables to a private party like ABS Corporation. Section 13 of Presidential Decree No.
1869 or the PAGCOR’s charter states:

Sec. 13. Exemptions -

xxx

(4) Utilization of Foreign Currencies – The Corporation shall have the right and authority, solely and
exclusively in connection with the operations of the casino(s), to purchase, receive, exchange and
disburse foreign exchange, subject to the following terms and conditions:

(a) A specific area in the casino(s) or gaming pit shall be put up solely and exclusively for players and
patrons utilizing foreign currencies;

(b) The Corporation shall appoint and designate a duly accredited commercial bank agent of the
Central Bank, to handle, administer and manage the use of foreign currencies in the casino(s);

(c) The Corporation shall provide an office at casino(s) exclusively for the employees of the designated
bank, agent of the Central Bank, where the Corporation shall maintain a dollar account which will be
utilized exclusively for the above purpose and the casino dollar treasury employees;

(d) Only persons with foreign passports or certificates of identity (for Hong Kong patron only) duly
issued by the government or country of their residence will be allowed to play in the foreign exchange
gaming pit;

(e) Only foreign exchange prescribed to form part of the Philippine International Reserve and the
following foreign exchange currencies: Australian Dollar, Singapore Dollar, Hong Kong Dollar, shall be
used in this gaming pit;

12
(f) The disbursement, administration, management and recording of foreign exchange currencies used
in the casino(s) shall be carried out in accordance with existing foreign exchange regulations, and
periodical reports of the transactions in such foreign exchange currencies by the Corporation shall be
duly recorded and reported to the Central Bank thru the designated Agent Bank; and

(g) The Corporation shall issue the necessary rules and regulations for the guidance and information of
players qualified to participate in the foreign exchange gaming pit, in order to make certain that the
terms and conditions as above set forth are strictly complied with.

The trial court held that only PAGCOR could use foreign currency in its gaming tables. When PAGCOR
accepted only a fixed portion of the dollar earnings of ABS Corporation in the concept of a lease of
facilities, PAGCOR shared its franchise with ABS Corporation in violation of the PAGCOR’s charter.
Hence, the Junket Agreement is void. Since the Junket Agreement is not permitted by PAGCOR’s
charter, the mutual rights and obligations of the parties to this case would be resolved based on
agency and estoppel.16

The trial court found that the petitioner wanted to redeem gambling chips that were specifically used
by ABS Corporation at its gaming tables. The gambling chips come in distinctive orange or yellow
colors with stickers bearing denominations of 10,000 or 1,000. The 1,000 gambling chips are smaller in
size and the words "no cash value" marked on them. The 10,000 gambling chips do not reflect the "no
cash value" sign. The senior treasury head of PAGCOR testified that these were the gambling chips
used by the previous junket operators and PAGCOR merely continued using them. However, the
gambling chips used in the regular casino games were of a different quality.17

The trial court pointed out that PAGCOR had taken steps to warn players brought in by all junket
operators, including ABS Corporation, that they were playing under special rules. Apart from the
different kinds of gambling chips used, the junket players were confined to certain gaming rooms. In
these rooms, notices were posted that gambling chips could only be encashed there and nowhere else.
A photograph of one such notice, printed in Korean and English, stated that the gaming room was
exclusively operated by ABS Corporation and that ABS Corporation was solely accountable for all the
chips wagered on the gaming tables. Although petitioner denied seeing this notice, this disclaimer has
the effect of a negative evidence that can hardly prevail against the positive assertions of PAGCOR
officials whose credibility is also not open to doubt. The trial court concluded that petitioner had been
alerted to the existence of these special gambling rules, and the mere fact that he continued to play
under the same restrictions over a period of several months confirms his acquiescence to them.
Otherwise, petitioner could have simply chose to stop gambling.18

In dismissing petitioner’s complaint, the trial court concluded that petitioner’s demand against PAGCOR
for the redemption of the gambling chips could not stand. The trial court stated that petitioner, a
stranger to the agreement between PAGCOR and ABS Corporation, could not under principles of equity
be charged with notice other than of the apparent authority with which PAGCOR had clothed its
employees and agents in dealing with petitioner. Since petitioner was made aware of the special rules
by which he was playing at the Casino Filipino, petitioner could not now claim that he was not bound
by them. The trial court explained that in an unlawful transaction, the courts will extend equitable relief
only to a party who was unaware of all its dimensions and whose ignorance of them exposed him to
the risk of being exploited by the other. Where the parties enter into such a relationship with the
opportunity to know all of its ramifications, as in this case, there is no room for equitable
considerations to come to the rescue of any party. The trial court ruled that it would leave the parties
where they are.19

The Ruling of the Court of Appeals

In dismissing the appeal, the appellate court addressed the four errors assigned by petitioner.

13
First, petitioner maintains that he was never a junket player of ABS Corporation. Petitioner also denies
seeing a notice that certain gaming rooms were exclusively operated by entities under special
agreement.20

The CA ruled that the records do not support petitioner’s theory. Petitioner’s own testimony reveals
that he enjoyed special accommodations at the Grand Boulevard Hotel. This similar accommodation
was extended to players brought in by ABS Corporation and other junket operators. Petitioner cannot
disassociate himself from ABS Corporation for it is unlikely that an unknown high roller would be
accorded choice accommodations by the hotel unless the accommodation was facilitated by a junket
operator who enjoyed such privilege.21

The CA added that the testimonies of PAGCOR’s employees affirming that notices were posted in
English and Korean in the gaming areas are credible in the absence of any convincing proof of ill
motive. Further, the specified gaming areas used only special chips that could be bought and
exchanged at certain cashier booths in that area.22

Second, petitioner attacks the validity of the contents of the notice. Since the Junket Agreement is
void, the notice, which was issued pursuant to the Junket Agreement, is also void and cannot affect
petitioner.23

The CA reasoned that the trial court never declared the notice valid and neither did it enforce the
contents thereof. The CA emphasized that it was the act of cautioning and alerting the players that was
upheld. The trial court ruled that signs and warnings were in place to inform the public, petitioner
included, that special rules applied to certain gaming areas even if the very agreement giving rise to
these rules is void.24

Third, petitioner takes the position that an implied agency existed between PAGCOR and ABS
Corporation.25

The CA disagreed with petitioner’s view. A void contract has no force and effect from the very
beginning. It produces no effect either against or in favor of anyone. Neither can it create, modify or
extinguish the juridical relation to which it refers. Necessarily, the Junket Agreement, being void from
the beginning, cannot give rise to an implied agency. The CA explained that it cannot see how the
principle of implied agency can be applied to this case. Article 1883 26 of the Civil Code applies only to a
situation where the agent is authorized by the principal to enter into a particular transaction, but
instead of contracting on behalf of the principal, the agent acts in his own name.27

The CA concluded that no such legal fiction existed between PAGCOR and ABS Corporation. PAGCOR
entered into a Junket Agreement to lease to ABS Corporation certain gaming areas. It was never
PAGCOR’s intention to deal with the junket players. Neither did PAGCOR intend ABS Corporation to
represent PAGCOR in dealing with the junket players. Representation is the basis of agency but
unfortunately for petitioner none is found in this case.28

The CA added that the special gaming chips, while belonging to PAGCOR, are mere accessories in the
void Junket Agreement with ABS Corporation. In Article 1883, the phrase "things belonging to the
principal" refers only to those things or properties subject of a particular transaction authorized by the
principal to be entered into by its purported agent. Necessarily, the gambling chips being mere
incidents to the void lease agreement cannot fall under this category.29

The CA ruled that Article 215230 of the Civil Code is also not applicable. The circumstances relating
to negotiorum gestio are non-existent to warrant an officious manager to take over the management
and administration of PAGCOR.31

Fourth, petitioner asks for equitable relief.32

14
The CA explained that although petitioner was never a party to the void Junket Agreement, petitioner
cannot deny or feign blindness to the signs and warnings all around him. The notices, the special
gambling chips, and the separate gaming areas were more than enough to alert him that he was
playing under different terms. Petitioner persisted and continued to play in the casino. Petitioner also
enjoyed the perks extended to junket players of ABS Corporation. For failing to heed these signs and
warnings, petitioner can no longer be permitted to claim equitable relief. When parties do not come to
court with clean hands, they cannot be allowed to profit from their own wrong doing.33

The Issues

Petitioners raise three issues in this petition:

1. Whether the CA erred in holding that PAGCOR is not liable to petitioner, disregarding the doctrine of
implied agency, or agency by estoppel;

2. Whether the CA erred in using intent of the contracting parties as the test for creation of agency,
when such is not relevant since the instant case involves liability of the presumed principal in implied
agency to a third party; and

3. Whether the CA erred in failing to consider that PAGCOR ratified, or at least adopted, the acts of the
agent, ABS Corporation.34

The Ruling of the Court

The petition lacks merit.

Courts will not enforce debts arising from illegal gambling

Gambling is prohibited by the laws of the Philippines as specifically provided in Articles 195 to 199 of
the Revised Penal Code, as amended. Gambling is an act beyond the pale of good morals, 35 and is thus
prohibited and punished to repress an evil that undermines the social, moral, and economic growth of
the nation.36 Presidential Decree No. 1602 (PD 1602),37 which modified Articles 195-199 of the Revised
Penal Code and repealed inconsistent provisions,38 prescribed stiffer penalties on illegal gambling.39

As a rule, all forms of gambling are illegal. The only form of gambling allowed by law is that stipulated
under Presidential Decree No. 1869, which gave PAGCOR its franchise to maintain and operate
gambling casinos. The issue then turns on whether PAGCOR can validly share its franchise with junket
operators to operate gambling casinos in the country. Section 3(h) of PAGCOR’s charter states:

Section 3. Corporate Powers. - The Corporation shall have the following powers and functions, among
others:

xxx

h) to enter into, make, perform, and carry out contracts of every kind and for any lawful purpose
pertaining to the business of the Corporation, or in any manner incident thereto, as principal, agent or
otherwise, with any person, firm, association, or corporation.

xxx

The Junket Agreement would be valid if under Section 3(h) of PAGCOR’s charter, PAGCOR could share
its gambling franchise with another entity. In Senator Jaworski v. Phil. Amusement and Gaming
Corp.,40 the Court discussed the extent of the grant of the legislative franchise to PAGCOR on its
authority to operate gambling casinos:

A legislative franchise is a special privilege granted by the state to corporations. It is a privilege of

public concern which cannot be exercised at will and pleasure, but should be reserved for public control

15
and administration, either by the government directly, or by public agents, under such conditions and
regulations as the government may impose on them in the interest of the public. It is Congress that
prescribes the conditions on which the grant of the franchise may be made. Thus the manner of
granting the franchise, to whom it may be granted, the mode of conducting the business, the charter
and the quality of the service to be rendered and the duty of the grantee to the public in exercising the
franchise are almost always defined in clear and unequivocal language.

After a circumspect consideration of the foregoing discussion and the contending positions of the
parties, we hold that PAGCOR has acted beyond the limits of its authority when it passed on or shared
its franchise to SAGE.

In the Del Mar case where a similar issue was raised when PAGCOR entered into a joint venture
agreement with two other entities in the operation and management of jai alai games, the Court, in an
En Banc Resolution dated 24 August 2001, partially granted the motions for clarification filed by
respondents therein insofar as it prayed that PAGCOR has a valid franchise, but only by itself (i.e. not
in association with any other person or entity), to operate, maintain and/or manage the game of jai-
alai.

In the case at bar, PAGCOR executed an agreement with SAGE whereby the former grants the latter
the authority to operate and maintain sports betting stations and Internet gaming operations. In
essence, the grant of authority gives SAGE the privilege to actively participate, partake and share
PAGCOR’s franchise to operate a gambling activity. The grant of franchise is a special privilege that
constitutes a right and a duty to be performed by the grantee. The grantee must not perform its
activities arbitrarily and whimsically but must abide by the limits set by its franchise and strictly adhere
to its terms and conditionalities. A corporation as a creature of the State is presumed to exist for the
common good. Hence, the special privileges and franchises it receives are subject to the laws of the
State and the limitations of its charter. There is therefore a reserved right of the State to inquire how
these privileges had been employed, and whether they have been abused. (Emphasis supplied)

Thus, PAGCOR has the sole and exclusive authority to operate a gambling activity. While PAGCOR is
allowed under its charter to enter into operator’s or management contracts, PAGCOR is not allowed
under the same charter to relinquish or share its franchise. PAGCOR cannot delegate its power in view
of the legal principle of delegata potestas delegare non potest, inasmuch as there is nothing in the
charter to show that it has been expressly authorized to do so.41

Similarly, in this case, PAGCOR, by taking only a percentage of the earnings of ABS Corporation from
its foreign currency collection, allowed ABS Corporation to operate gaming tables in the dollar pit. The
Junket Agreement is in direct violation of PAGCOR’s charter and is therefore void.

Since the Junket Agreement violates PAGCOR’s charter, gambling between the junket player and the
junket operator under such agreement is illegal and may not be enforced by the courts. Article
201442 of the Civil Code, which refers to illegal gambling, states that no action can be maintained by
the winner for the collection of what he has won in a game of chance.

Although not raised as an issue by petitioner, we deem it necessary to discuss the applicability of
Republic Act No. 948743 (RA 9487) to the present case.

RA 9487 amended the PAGCOR charter, granting PAGCOR the power to enter into special agreement
with third parties to share the privileges under its franchise for the operation of gambling casinos:

Section 1. The Philippine Amusement and Gaming Corporation (PAGCOR) franchise granted under
Presidential Decree No. 1869 otherwise known as the PAGCOR Charter, is hereby further amended to
read as follows:

xxx

16
(2) Section 3(h) is hereby amended to read as follows:

"SEC. 3. Corporate Powers. -

"x x x

"(h) to enter into, make, conclude, perform, and carry out contracts of every kind and nature and for
any lawful purpose which are necessary, appropriate, proper or incidental to any business or purpose
of the PAGCOR, including but not limited to investment agreements, joint venture agreements,
management agreements, agency agreements, whether as principal or as an agent, manpower supply
agreements, or any other similar agreements or arrangements with any person, firm, association or
corporation." (Boldfacing supplied)

PAGCOR sought the amendment of its charter precisely to address and remedy the legal impediment
raised in Senator Jaworski v. Phil. Amusement and Gaming Corp.

Unfortunately for petitioner, RA 9487 cannot be applied to the present case. The Junket Agreement
was entered into between PAGCOR and ABS Corporation on 25 April 1996 when the PAGCOR charter
then prevailing (PD 1869) prohibited PAGCOR from entering into any arrangement with a third party
that would allow such party to actively participate in the casino operations.

It is a basic principle that laws should only be applied prospectively unless the legislative intent to give
them retroactive effect is expressly declared or is necessarily implied from the language used.44 RA
9487 does not provide for any retroactivity of its provisions. All laws operate prospectively absent a
clear contrary language in the text,45 and that in every case of doubt, the doubt will be resolved
against the retroactive operation of laws.46

Thus, petitioner cannot avail of the provisions of RA 9487 as this was not the law when the acts giving
rise to the claimed liabilities took place. This makes the gambling activity participated in by petitioner
illegal. Petitioner cannot sue PAGCOR to redeem the cash value of the gambling chips or recover
damages arising from an illegal activity for two reasons. First, petitioner engaged in gambling with ABS
Corporation and not with PAGCOR. Second, the court cannot assist petitioner in enforcing an illegal act.
Moreover, for a court to grant petitioner’s prayer would mean enforcing the Junket Agreement, which
is void.

Now, to address the issues raised by petitioner in his petition, petitioner claims that he is a third party
proceeding against the liability of a presumed principal and claims relief, alternatively, on the basis of
implied agency or agency by estoppel.

Article 1869 of the Civil Code states that implied agency is derived from the acts of the principal, from
his silence or lack of action, or his failure to repudiate the agency, knowing that another person is
acting on his behalf without authority. Implied agency, being an actual agency, is a fact to be proved
by deductions or inferences from other facts.47

On the other hand, apparent authority is based on estoppel and can arise from two instances. First, the
principal may knowingly permit the agent to hold himself out as having such authority, and the
principal becomes estopped to claim that the agent does not have such authority. Second, the principal
may clothe the agent with the indicia of authority as to lead a reasonably prudent person to believe
that the agent actually has such authority. 48 In an agency by estoppel, there is no agency at all, but
the one assuming to act as agent has apparent or ostensible, although not real, authority to represent
another.49

The law makes no presumption of agency and proving its existence, nature and extent is incumbent
upon the person alleging it.50 Whether or not an agency has been created is a question to be
determined by the fact that one represents and is acting for another. 51

17
Acts and conduct of PAGCOR negates the existence of an implied agency or an agency by estoppel

Petitioner alleges that there is an implied agency. Alternatively, petitioner claims that even assuming
that no actual agency existed between PAGCOR and ABS Corporation, there is still an agency by
estoppel based on the acts and conduct of PAGCOR showing apparent authority in favor of ABS
Corporation. Petitioner states that one factor which distinguishes agency from other legal precepts is
control and the following undisputed facts show a relationship of implied agency:

1. Three floors of the Grand Boulevard Hotel52 were leased to PAGCOR for conducting gambling
operations;53

2. Of the three floors, PAGCOR allowed ABS Corporation to use one whole floor for foreign exchange
gambling, conducted by PAGCOR dealers using PAGCOR facilities, operated by PAGCOR employees and
using PAGCOR chips bearing the PAGCOR logo;54

3. PAGCOR controlled the release, withdrawal and return of all the gambling chips given to ABS
Corporation in that part of the casino and at the end of the day, PAGCOR conducted an inventory of the
gambling chips;55

4. ABS Corporation accounted for all gambling chips with the Commission on Audit (COA), the official
auditor of PAGCOR;56

5. PAGCOR enforced, through its own manager, all the rules and regulations on the operation of the
gambling pit used by ABS Corporation.57

Petitioner’s argument is clearly misplaced. The basis for agency is representation,58 that is, the agent
acts for and on behalf of the principal on matters within the scope of his authority and said acts have
the same legal effect as if they were personally executed by the principal. 59 On the part of the
principal, there must be an actual intention to appoint or an intention naturally inferable from his
words or actions, while on the part of the agent, there must be an intention to accept the appointment
and act on it.60 Absent such mutual intent, there is generally no agency.61

There is no implied agency in this case because PAGCOR did not hold out to the public as the principal
of ABS Corporation. PAGCOR’s actions did not mislead the public into believing that an agency can be
implied from the arrangement with the junket operators, nor did it hold out ABS Corporation with any
apparent authority to represent it in any capacity. The Junket Agreement was merely a contract of
lease of facilities and services.

The players brought in by ABS Corporation were covered by a different set of rules in acquiring and
encashing chips. The players used a different kind of chip than what was used in the regular gaming
areas of PAGCOR, and that such junket players played specifically only in the third floor area and did
not mingle with the regular patrons of PAGCOR. Furthermore, PAGCOR, in posting notices stating that
the players are playing under special rules, exercised the necessary precaution to warn the gaming
public that no agency relationship exists.1avvphi1

For the second assigned error, petitioner claims that the intention of the parties cannot apply to him as
he is not a party to the contract.

We disagree. The Court of Appeals correctly used the intent of the contracting parties in determining
whether an agency by estoppel existed in this case. An agency by estoppel, which is similar to the
doctrine of apparent authority requires proof of reliance upon the representations, and that, in turn,
needs proof that the representations predated the action taken in reliance.62

There can be no apparent authority of an agent without acts or conduct on the part of the principal and
such acts or conduct of the principal must have been known and relied upon in good faith and as a

18
result of the exercise of reasonable prudence by a third person as claimant, and such must have
produced a change of position to its detriment.63 Such proof is lacking in this case.

In the entire duration that petitioner played in Casino Filipino, he was dealing only with ABS
Corporation, and availing of the privileges extended only to players brought in by ABS Corporation. The
facts that he enjoyed special treatment upon his arrival in Manila and special accommodations in Grand
Boulevard Hotel, and that he was playing in special gaming rooms are all indications that petitioner
cannot claim good faith that he believed he was dealing with PAGCOR. Petitioner cannot be considered
as an innocent third party and he cannot claim entitlement to equitable relief as well.

For his third and final assigned error, petitioner asserts that PAGCOR ratified the acts of ABS
Corporation.

The trial court has declared, and we affirm, that the Junket Agreement is void. A void or inexistent
contract is one which has no force and effect from the very beginning. Hence, it is as if it has never
been entered into and cannot be validated either by the passage of time or by ratification. 64 Article
1409 of the Civil Code provides that contracts expressly prohibited or declared void by law, such as
gambling contracts, "cannot be ratified."65

WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals’ Decision dated 27 May 2003 as
well as the Resolution dated 7 May 2004 as modified by this Decision.

SO ORDERED.

J. Carpio-Morales, Leonardo-De Castro, Del Castillo and Abad concur.

EN BANC

A.M. No. P-08-2553               August 28, 2009

(Formerly A.M. OCA IPI No. 98-455-P)

LEO MENDOZA, Complainant,
vs.
PROSPERO V. TABLIZO, CLERK OF COURT VI, REGIONAL TRIAL COURT, VIRAC,
CATANDUANES, Respondent.

DECISION

PUNO, C.J.:

Complainant Leo Mendoza charged respondent Prospero V. Tablizo, Clerk of Court VI of the Regional
Trial Court of Virac, Catanduanes, in his capacity as Ex-Officio Sheriff, with grave misconduct,
misfeasance, malfeasance and incompetence in a sworn Letter-Complaint1 dated 23 April 1998.

Mendoza, as mortgagee, applied for the satisfaction of the loan obligation of mortgagor David Joson in
an extrajudicial foreclosure which he filed in February 1998. Mendoza had paid the filing fee and the
cost of the publication of the Notice of the Extrajudicial Sale. However, on 10 March 1998, without the
knowledge of the Executive Judge and without notice to Mendoza, Tablizo allegedly cancelled the
auction sale. Mendoza was also allegedly informed, through a letter by a Deputy Sheriff, that the
interest to be charged should not exceed 12% per annum and not as that stipulated in the Deed of
Mortgage. Mendoza later filed another petition for extrajudicial foreclosure against mortgagor spouses
Ricardo and Adelina Abrasaldo but Tablizo allegedly refused to accept the same.

Mendoza alleged that Tablizo's actions violated Supreme Court Administrative Order No. 3, Series of
1984, which vested on the Executive Judge direct supervision over the Clerk of Court in connection
with all applications for extrajudicial foreclosure of mortgage under Act No. 3135, as amended by Act
No. 4118. Mendoza likewise claimed that in another Supreme Court Resolution dated 18 September
19
1984, the Executive Judge and the Clerk of Court are charged with ministerial duties in relation to the
extrajudicial foreclosure of mortgages. Finally, Mendoza cited Central Bank Circular No. 905 which
leaves to the discretion of the lender and the borrower the interest rate to be charged.

In a 1st Indorsement dated 17 August 1998, the Court required Tablizo to file his Comment on the
administrative complaint but the latter did not comply. He also failed to comply despite the 1st Tracer
dated 17 January 2000 which was received by his representative on 7 February 2000 per Registry
Receipt No. 1821.1avvphi1

On 10 December 2001, the Office of the Court Administrator submitted an Agenda Report2 informing
the Court that Tablizo was no longer under the disciplinary powers of the Supreme Court due to his
compulsory retirement effective 4 September 2000. As Tablizo had consistently refused to comment in
other administrative matters filed against him, the Office of the Court Administrator recommended that
if Tablizo's benefits were still unpaid, a fine of ₱5,000.00 should be imposed and deducted from his
benefits.

The Court, in a Resolution 3 issued by the First Division, required the Office of the Court Administrator
to verify whether Tablizo's benefits had already been fully paid. In a Memorandum 4 dated 19 March
2002, the Office of the Court Administrator informed the Court that the records of the Office of the
Administrative Services-Employees Welfare and Benefits Division and the Financial Management Office
show that Tablizo had not filed his application for retirement.

In a Resolution5 dated 6 May 2002, the Court directed the withholding of the amount of ₱50,000.00
from Tablizo's retirement benefits. The Court likewise issued another Resolution 6 referring the case to
the Office of the Court Administrator for evaluation, report and recommendation. In its
Memorandum7 dated 31 July 2008, the Office of the Court Administrator found Tablizo to have waived
his right to defend himself despite the ample opportunity he was given to answer the charges against
him. It construed his silence as an implied admission of the truth of the imputations hurled against him
by Mendoza. It recommended that the case be re-docketed as a regular administrative case and that
Tablizo’s retirement benefits, save his terminal leave benefits, be forfeited, with prejudice to re-
employment in the government service.

We agree with the findings and recommendation of the Office of the Court Administrator.

The failure of Tablizo to appear and answer the charges against him despite all the opportunities he
was given constitutes a waiver of his right to defend himself. As correctly observed in the
Memorandum of the Office of the Court Administrator, in the natural order of things, a man would
resist an unfounded claim or imputation and defend himself. It is totally against human nature to
remain silent and say nothing in the face of false accusations.8 In the case at bar, Tablizo’s silence may
be construed as an implied admission and acknowledgment of the veracity of the allegations stated in
the sworn Letter-Complaint filed by Mendoza – the veracity of which he could have easily debunked
had he come to the fore to assail them. By his silence, he admitted, albeit tacitly, the allegations
subscribed and sworn to by Mendoza that he cancelled the auction sale without the knowledge of the
Executive Judge and without notice to Mendoza, and refused to accept another petition filed by
Mendoza for extrajudicial foreclosure against mortgagor spouses Ricardo and Adelina Abrasaldo. In
both instances, Tablizo failed to discharge his ministerial duties as Ex-Officio Sheriff in applications for
extrajudicial foreclosure under Administrative Order No. 3 dated 19 October 1984 which sets the
procedure to be followed in extrajudicial foreclosure of mortgages, viz.:

1. All application for extra-judicial foreclosure of mortgage under Act 3135, as amended by Act 4118,
and Act 1508, as amended, shall be filed with the Executive Judge, through the Clerk of Court who is
also the Ex-Oficio Sheriff;

2. Upon receipt of an application for extra-judicial foreclosure of mortgage, it shall be the duty of the
Office of the Sheriff to:

20
a) receive and docket said application and to stamp the same with the corresponding file number and
date of filing;

b) collect the filing fees therefor and issue the corresponding official receipt;

c) examine, in case of real estate mortgage foreclosure, whether the applicant has complied with all
the requirements before the public auction is conducted under its direction or under the direction of a
notary public, pursuant to Sec. 4, of Act 3135, as amended;

d) sign and issue certificate of sale, subject to the approval of the executive Judge, or in his absence,
the Vice-Executive Judge; and

e) turn over, after the certificate of sale has been issued to the highest bidder, the complete folder to
the Records Section, Office of the Clerk of Court, while awaiting any redemption within a period of one
(1) year from date of registration of the certificate of sale with the Register of Deeds concerned, after
which the records shall be archived.

3. The notices of auction sale in extra-judicial foreclosure for publication shall be published in a
newspaper of general circulation pursuant to Section 1, Presidential Decree No. 1709, dated January
26, 1977, and non-compliance therewith shall constitute a violation of Section 6 thereof;

4. The Executive Judge shall assign with the assistance of the Clerk of Court and Ex-Oficio Sheriff, the
cases by raffle among the deputy sheriffs, under whose direction the auction sale shall be made.
Raffling shall be strictly enforced in order to avoid unequal distribution of cases and fraternization
between the sheriff and the applicant-mortgagee, such as banking institutions, financing companies,
and others.9

The evidence on record clearly establishes that the first petition filed by Mendoza for extrajudicial
foreclosure against mortgagor David Joson was stamped received and docketed as Foreclosure No.
F0184.10 The corresponding filing fees and cost of publication were paid. The Notice to Parties of
Sheriff’s Public Auction Sale11 and the Notice of Extrajudicial Foreclosure with Auction Sale of Real
Property under Act No. 3135, as amended, were likewise issued by Tablizo. Thus, when Tablizo
cancelled the auction sale for no reason and without the knowledge and consent of the Executive
Judge, he did so in clear violation of his ministerial duties as Ex-Officio Sheriff in applications for
extrajudicial foreclosure under the Administrative Order.

As to the second petition for extrajudicial foreclosure filed by Mendoza against mortgagor spouses
Ricardo and Adelina Abrasaldo which was allegedly refused outright by Tablizo, the evidence on record
shows that the said petition12 was marked with the receiving stamp of the Office of the Clerk of Court
of the Regional Trial Court of Virac, Catanduanes. The same petition also bears the mark "F-0193" at
the upper right-hand corner of the first page. The mark appears to denote that the petition, docketed
as Foreclosure No. F0193, is an Extrajudicial Foreclosure Sale under Act No. 3135, as amended. It
raises valid suspicion, however, why the receiving stamp was left blank despite the docket number
written on the petition. This unexplained act on the part of Tablizo shows another violation of his
ministerial duties as Ex-Officio Sheriff in applications for extrajudicial foreclosure under Administrative
Order No. 3, Series of 1984. We have reminded sheriffs time and again that, as court employees, they
must conduct themselves with propriety and decorum so that their actions must be above suspicion at
all times. As we held in Tagaloguin v. Hingco, Jr., viz.:

x x x the conduct and behavior of everyone connected with an office charged with the dispensation of
justice, from the presiding judge to the sheriff down to the lowliest clerk should be circumscribed with
the heavy burden of responsibility. Their conduct, at all times, must be characterized with propriety
and decorum, but above all else, must be above and beyond suspicion. For every employee of the
judiciary should be an example of integrity, uprightness and honesty.13

21
The acts and omissions of Tablizo in both14 instances fell short of this standard set by the Court. Thus,
for failing to do what was incumbent upon him under the law, we find Tablizo guilty of grave
misconduct, incompetence, malfeasance and misfeasance.

That is not all.

Tablizo’s contumacious refusal to comment on the administrative cases filed against him is glaring
proof of his recalcitrance and stubbornness to obey legitimate orders of the Court, as well as his utter
disregard of the Court's power of administrative supervision over its employees. Respondents in
administrative complaints should comment on all accusations or allegations against them in the
administrative complaints because it is their duty to preserve the integrity of the judiciary.15 This Court,
being the agency exclusively vested by the Constitution with administrative supervision over all courts,
can hardly discharge its constitutional mandate of overseeing judges and court personnel and taking
proper administrative sanction against them if the judge or personnel concerned does not even
recognize its administrative authority.16

In the case at bar, the silence and contumacious refusal of Tablizo to comment on the charges filed
against him aggravate our finding of grave misconduct, incompetence, malfeasance and misfeasance
and leave the Court with no alternative but to uphold the recommendation of the Office of the Court
Administrator to forfeit his retirement benefits, except his accrued leave credits, and with prejudice to
re-employment in the government service. Had it not been for his compulsory retirement, respondent
would have been meted the penalty of dismissal from the service considering that his acts of
unilaterally cancelling the auction sale and refusing to accept a petition for extrajudicial foreclosure
constituted intentional violation of the law and established rules. Further, the Office of the Court
Administrator had significantly noted that this is not the first time that respondent was found guilty of
an administrative offense. On 16 January 2002, he was fined in the amount of ₱2,000.00 for Neglect of
Duty and Incompetence in A.M. No. P-02-1543. On 22 February 2008, he was again fined in the
amount of ₱40,000.00 for Gross Neglect of Duty and Refusal to Perform Official Duty in A.M. No. P-05-
1999. Prior to these sanctions, he was fined in the amount of ₱2,000.00 for Habitual Absenteeism on
18 July 2001 in A.M. No. P-99-1301.

IN VIEW WHEREOF, the Court finds respondent Prospero V. Tablizo, retired Clerk of Court VI of the
Regional Trial Court of Virac, Catanduanes, GUILTY of grave misconduct, incompetence, malfeasance
and misfeasance, with FORFEITURE of retirement benefits, except the accrued terminal leave benefits,
and with prejudice to re-employment in any branch, agency or instrumentality of the government,
including government-owned or controlled corporations.

SO ORDERED.

Quisumbing, Ynares-Santiago, Carpio, Corona, Carpio Morales, Chico-Nazario, Nachura, Leonardo-De

Castro, Brion, Peralta, Bersamin, Del Castillo, and Abad, JJ., concur.
Velasco, Jr., J., no part.

22
 SECOND DIVISION

A.M. No. RTJ-97-1385 January 8, 1998

(formerly OCA IPI No. 96-141-RTJ)

RAMON T. ARDOSA, complainant,
vs.
JUDGE LOLITA O. GAL-LANG and CLERK OF COURT NENITA R. GRIJALDO, Branch 44,
Regional Trial Court, Manila, respondents.

MENDOZA, J.:

This is a complaint against Judge Lolita O. Gal-Lang of the Regional Trial Court at Manila, Branch 44,
for grave abuse of authority, manifest bias, gross ignorance of the law, knowingly rendering all unjust
judgment and grave misconduct and Atty. Nenita R. Grijaldo, branch clerk of court, for grave
misconduct, gross ignorance, disrespect for the Rules of Court, malfeasance, and misfeasance in public
office.

Complainant was complainant in Criminal Case No. 95-146559 for illegal recruitment, which was
assigned to respondent Judge Gal-lang. The prosecutor initially recommended bail for P8,000.00 for
the provisional release of the accused but later changed his recommendation to "no bail."

On December 11, 1995, the accused filed a motion for reinvestigation and prayed that in the meantime
issuance of the warrant of arrest be held in abeyance. It appears, however, that the warrant had
already been issued on that day, although it could not be sewed on the accused (Rene C. Tabia, Ruben
S. Fajardo, Per Jurgensen, Birger Jurgensen, Jose M. Nieto, Edwin Marasigan, Franklin Roger Lee Sun,
Ricardo J. Romulo and Ramon Espejo, of the Maersk Tabacalera Crewing Agency) as they were not at
the Maersk office on 900 Romualdez St., Ermita, Manila.

Upon learning of the issuance of the warrant against them, the accused filed on December 13, 1995 an
Urgent Motion to Recall the Warrant of Arrest. They alleged that the warrant of arrest had been
prematurely issued because they had a pending opposition to the issuance of a warrant of arrest and
motion for reinvestigation. The accused argued that some of them were not officers and members of
the board of the Maersk Tabacalera yet when the act being complained of was allegedly committed.1

Since the prosecutor was present and had been furnished copy of the motion, the judge decided to
hear the motion on the same day it was filed. Complainant also happened to be in court at that time to
file a motion for the issuance of a hold order and an entry of appearance as private prosecutor. He was
persuaded by respondent clerk of court, Nenita Grijaldo, to attend the hearing on the motion.

Complainant appeared in court but requested that the hearing be reset on another day because he had
not been informed of the hearing nor furnished copies of the motion beforehand. He cited the absence
of his counsel. But Judge Gal-lang proceeded with the hearing.2

On December 14, 1995, respondent judge granted the motion of the accused and recalled the warrant
of arrest, even as she ordered a reinvestigation of the case.

On December 20, 1995, complainant, as private prosecutor, moved for a reconsideration of the court's
ruling. The hearing on his motion was held on December 22, 1995. An order purporting to have been
made on the same day was later issued, denying complainant's motion. Complainant claims that he
received a copy of the older only on January 18, 1996 despite the fact that he had been asking the
court for a copy many times before. He accuses respondent judge of antedating her order to make it
appear it had been made shortly after the hearing.

Complainant also takes respondent judge to task for holding a hearing on the motion of the accused
for the recall of the warrant of arrest despite the fact that it was served only on the day of the hearing.
23
Complainant claims that clerk of court Grijaldo, in collusion with the counsel of the accused, inveigled
him to attend the hearing.

In their comment, respondents allege that Judge Gal-lang heard the motion to recall warrant of arrest
on December 13, 1995 because of its urgent character. She points out that anyway the public
prosecutor had been furnished copy of the motion and was present, as were the counsel for the
accused and the complainant himself. Respondents further contend that complainant and his counsel
filed a motion for reconsideration of the order recalling the warrant of arrest without the conformity of
the public prosecutor, who had control of the prosecution of cases, and that during the hearing of his
motion complainant made offensive gestures at the court for which his counsel had to make an
apology.

Respondent judge denies she antedated her order of December 22, 1995 denying complainant's motion
for reconsideration. She claims that she prepared the order in the afternoon of December 22, 1995 but
it was released only on January 3, 1996 because December 22, 1995 was a Friday and, on the next
business day, she went on vacation leave. Copy of the order was sent to complainant and his counsel
by registered mail on January 3, 1996, presumably after respondent had returned from her vacation.
Respondents claim that when complainant followed up the resolution of his motion by phone on
January 8, 1996, he was told that the order had been sent by mail.

Respondents deny that they were prejudiced against complainant. They claim that anyway respondent
judge has inhibited herself from the consideration of the criminal case and there should be no further
question regarding this case. On June 19, 1997 they informed the Court that the criminal case against
the accused had been dismissed by the Regional Trial Court of Manila, Branch 49. The dismissal was
based on the resolution of the Secretary of Justice reversing and setting aside the resolution of the City
Prosecutor of Manila and ordering the withdrawal of the information filed in court against the accused.

The Office of the Court Administrator finds respondent judge guilty of abuse of discretion in hearing the
motion to recall the warrant of arrest on the same day the motion was filed and recommends that
respondent be admonished to be more circumspect and warned that repetition of the incident would be
dealt with more severely. While holding that the provision of Rule 15, §4 on the three-day notice is too
basic for respondent judge not to know, the OCA nonetheless finds respondent judge's liability
somewhat mitigated by the fact that notice of the motion was at least given to complainant. Thus,
Deputy Court Administrator Reynaldo L. Suarez states in his memorandum:

Complainant was never deprived of the fundamental rule of due process which requires that a person
be accorded notice and an opportunity to be heard. (Rubenecia v. CSC, 244 SCRA 640) He was
properly represented by counsels in the persons of Prosecutors Erlinda Alvaro and Nestor Gonzales.
Notice was also served to the Office of the Prosecutor and both parties were allowed to argue during
the hearing of the motions dated December 13, 1995. This will mitigate respondent's actuation.

With respect to respondent clerk of court, the OCA finds no evidence to support the charge against her.

First. Complainant charges that respondent judge antedated her order denying reconsideration of her
previous order recalling the warrant of arrest by making it appear that it was made on December 22,
1995 when the fact was that in the first week of January 1996, when complainant called up the court
to inquire about the resolution of his motion for reconsideration, he was told by respondent judge "to
just wait." As already stated, respondent judge denies the allegation. She claims that her order was
actually prepared on December 22, 1995 but it was mailed to complainant only on January 3, 1996
because she had gone on leave the week after December 22, 1995.

If the order of December 22, 1995 was really made on that day, it is hard to see why a copy could not
have been sent to complainant earlier. The service of orders and other court processes after all is the
ministerial function of the clerk of court. The fact that the judge had to go on leave was not a reason
for court employees to wait for her return. It would therefore appear that the order was prepared only

24
on January 3, 1996 and not on December 22, 1995 as it purports to have been made. Be that as it
may, we find no delay in tile resolution of complainant's motion. Between December 22, 1995 (date of
hearing) and January 3, 1996 (date of mailing of the order) was just 12 days.

Second. We agree with the Office of the Court Administrator that respondent judge committed an
abuse of discretion in hearing the motion of the accused on the same day the motion was filed. Rule
15, §4 of the former Rules of Court states:

Notice. — Notice of a motion shall be served by the applicant to all parties concerned, at least three (3)
days before the hearing thereof, together with a copy of the motion, and of any affidavits and other
papers accompanying it. The court, however, for good cause may hear a motion on shorter notice,
specially on matters which the court may dispose of on its own.

Thus, although a motion may be heard on short notice (i.e., less than three days after it is filed) it
must be for "good cause" shown. In this case, respondent judge defends her decision to hear the
motion of the accused for the recall of the warrant of arrest on the same day it was filed on the ground
that anyway the public prosecutor was present. This is not a good reason for hearing the motion on
short notice. Of course the opposing party must be served a copy of the motion. But the question is
whether he was given sufficient time to prepare for the hearing. That the public prosecutor was
present was a mere happenstance. In fact he asked for fifteen (15) days to comment on the motion to
recall the order of arrest against the accused because obviously he was unprepared.

Indeed the failure to observe the three-day notice rule is not excused by the fact that parties happen
to be present. The only excuse for dispensing with it is if the matter to be heard is urgent. In this case
a hearing on the previous motion of the accused for reinvestigation and their opposition to the issuance
of a warrant of arrest was set the next day, December 14, 1995. There is no reason why the matter
could not just wait for that hearing during which respondent could have also heard the motion to recall
the warrant of arrest. After all, the grounds for the two motions were substantially the same. That the
accused might have appeared to respondent judge to be innocent of the charges, as indeed the case
against them was subsequently dismissed, was no reason for respondent judge to resort to procedural
shortcuts.

Third. Respondent judge contends that complainant's motion for reconsideration of the order of
December 13, 1995 recalling the warrant of arrest did not have the conformity of the public
prosecutor. This is another matter, however. The question here is whether respondent judge delayed
the dispositions of complainant's motion for reconsideration.

Moreover, complainant, through the private prosecutor, had been allowed to intervene. While his
intention was subject to the supervision of the public prosecutor, it cannot be said that opposition to
the recall of the warrant of arrest was something the public prosecutor did not like. The fact is that he
asked for time to oppose or at least comment on the motion to recall the warrant of arrest.

Fourth. As already stated, the OCA finds no evidence to hold respondent clerk of court administratively
liable. Indeed, the only act she is accused of is that of convincing complainant to attend the hearing of
December 13, 1995. Complainant was not forced to attend the hearing by respondent clerk of court. If
he appeared in court on December 13, 1995 it was because he had decided to. His decision was
voluntary.

Considering the foregoing, as recommended by the Office of the Court Administrator, the Court finds
respondent judge GUILTY of misconduct and hereby REPRIMANDS her, with warning that repetition of
the same conduct will be dealt with more severely in the future. The complaint against respondent
clerk of court is dismissed for lack of merit.

SO ORDERED.

Regalado, Puno and Martinez, JJ., concur.

25
 FIRST DIVISION

G.R. No. 155574             November 20, 2006

TIMOTEO A. GARCIA, Petitioner,
vs.
SANDIGANBAYAN, Respondent.

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court which seeks to set
aside and nullify the Decision 1 of the Sandiganbayan dated 6 May 2002 which convicted petitioner
Timoteo A. Garcia of 56 counts of violation of Section 3(b) of Republic Act No. 3019, as amended,
otherwise known as the "Anti-Graft and Corrupt Practices Act," in Criminal Cases Nos. 24042 to 24098
(except 24078), and its Resolution2 dated 2 October 2002 denying petitioner’s Motion for
Reconsideration.

The instant case stemmed from the Complaint of Maria Lourdes Miranda against petitioner, then
Regional Director, Land Transportation Office (LTO), Region X, Gilbert G. Nabo and Nery Tagupa,
employees of the same office, for violation of the Anti-Graft and Corrupt Practices Act for their alleged
frequent borrowing of motor vehicles from Oro Asian Automotive Center Corporation (Company).
Finding probable cause for violation thereof, Graft Investigation Officer II Gay Maggie F. Balajadia-
Violan recommended that petitioner, Gilbert G. Nabo and Nery Tagupa be indicted for violation of
Section 3(b) of Republic Act No. 3019, as amended.

On 14 August 1997, 57 Informations were filed with the Sandiganbayan against petitioner, Gilbert G.
Nabo and Nery Tagupa for violation of Section 3(b) of Republic Act No. 3019, as amended. The
Information in Criminal Case No. 24042 reads:

That on or about the period covering January 9, 1993 to January 10, 1993 or sometime prior thereto,
in Cagayan de Oro City, Philippines, within the jurisdiction of this Honorable Court, the said accused,
TIMOTEO A. GARCIA, GILBERT G. NABO and NERY TAGUPA, being then public officers or employees of
the Land Transportation Office (LTO), Cagayan de Oro City, taking advantage of their respective official
positions, and conspiring, confederating and mutually helping one another and with intent to gain
personal use or benefit, did then and there willfully, unlawfully and feloniously borrow One (1) unit
Asian Automotive Center’s Service Vehicle – Fiera Blue KBK-732, in good running condition, spare tire,
tools from Oro Asian Automotive Corporation, which is engaged in the business of vehicle assembly
and dealership in Cagayan de Oro City, knowing that said corporation regularly transacts with the
accused’s LTO Office for the registration of its motor vehicles, in the reporting of its engine and chassis
numbers as well as the submission of its vehicle dealer’s report and other similar transactions which
require the prior approval and/or intervention of the said accused Regional Director and employees
and/or their said LTO office in Cagayan de Oro City, to the damage and prejudice of and undue injury
to said Oro Asian Automotive Corporation, including complainant Maria Lourdes Miranda.3

The fifty-six other Informations are similarly worded except for the alleged dates of commission of the
offense, and the types/descriptions of the vehicles allegedly borrowed by them. The pertinent data in
the other informations are as follows:

CASE DATE OF COMMISSION TYPE/DESCRIPTION OF

NUMBER VEHICLE

24043 January 16, 1993 to One (1) unit FIERA BLUE

26
 January 17, 1993

24044 January 23, 1993 to One (1) unit FIERA BLUE KBK-732, service
January 24, 1993 vehicle of Asian Automotive Center, in good
running condition with tools, spare tire

24045 February 6, 1993 to One (1) unit FIERA BLUE KBK-732, in good
February 7, 1993 running condition with tools

24046 February 13, 1993 to One (1) unit FIERA BLUE KBK-732, in good
February 14, 1993 running condition

24047 March 13, 1993 to March One (1) unit TOYOTA TAMARAW yellow, KBN-
14, 1993 156, in good running condition, with tools and
spare tire

24048 Morning of March 20, One (1) unit TOYOTA HSPUR YELLOW KBN-156,
1993 to afternoon of with spare tools, in good condition
March 20, 1993

24049 Morning of March 27, One (1) unit TAMARAW HSPUR, yellow in color,
1993 to afternoon of KBN-156, in good condition, with spare tire, with
March 27, 1993 jack and tire wrench

24050 April 24, 1993 to April One (1) unit TAMARAW HSPUR, Yellow in color,
25, 1993 KBN-156, in good condition, with spare tire, jack
and tire wrench

24051 April 25, 1993 and have One (1) unit AERO D VAN KBN-865, maroon in
been returned after use color Asian Automotive Center’s Vehicle, in good
running condition, with spare tire, tools, jack and
tire wrench

24052 May 15, 1993 to May 16, One (1) unit TOYOTA Fierra, yellow in color,
1993 engine no. 4k-0907126, chassis no. CMCI-
109247-C, in good condition, jack, spare tire, tire
wrench

24053 May 29, 1993 to May 30, One (1) unit TAMARAW HSPUR, KBN-156, yellow
1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24054 June 5, 1993 to June 6, One (1) unit TAMARAW HSPUR, KBN-156, yellow
1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24055 June 19, 1993 to June One (1) unit TAMARAW HSPUR, KBN-156, yellow
20, 1993 in color, in good running condition, w/ spare tire,

27
 jack and tire wrench

24056 June 26, 1993 to One (1) unit TAMARAW HSPUR, KBN-156, yellow
morning of June 26, in color, in good running condition, w/ spare tire,
1993 jack and tire wrench

24057 July 17, 1993 to July 18, One (1) unit TAMARAW HSPUR, KBN-156, yellow
1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24058 July 31, 1993 to August One (1) unit TAMARAW HSPUR, KBN-156, yellow
1, 1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24059 July 24, 1993 to July 25, One (1) unit TAMARAW HSPUR, KBN-156, yellow
1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24060 August 7, 1993 to One (1) unit TAMARAW HSPUR, KBN-156, yellow
August 8, 1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24061 August 14, 1993 to One (1) unit TAMARAW HSPUR, KBN-156, yellow
August 15, 1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24062 August 21, 1993 to One (1) unit TAMARAW HSPUR, KBN-156, yellow
August 22, 1993 in color, in good running condition, w/ spare tire,
jack and tire wrench

24063 September 4, 1993 to One (1) unit AERO D HSPUR, KBP-375, white in
September 5, 1993 color, with engine no. C190-484232, Chassis no.
SMM90-6787-C, in good running condition
upholstered seats

24064 Morning of September One (1) unit AERO D HSPUR, KBP-375, white in
11, 1993 to evening of color, in good running condition, upholstered
September 11, 1993 seats, jack, tire wrench, spare tire

24065 September 18, 1993 to One (1) unit AERO D HSPUR, KBP-375, in good
September 19, 1993 running condition, upholstered seats, side view
mirrors, rear view mirror, jack w/ handle, tire
wrench, seats

24066 September 25, 1993 to One (1) unit AERO D HSPUR, KBP-375, good
September 26, 1993 running condition, upholstered seats, side view
mirrors, rear view mirror, jack w/ handle, tire

28
 wrench, seats

24067 October 23, 1993 to One (1) unit AERO D HSPUR, KBP-375, good
October 24, 1993 running condition, upholstered seats, side view
mirrors, rear view mirror, jack w/ handle, tire
wrench, seats

24068 October 30, 1993 to One (1) unit ISUZU, NNJ-917, white in color, in
October 31, 1993 good running condition, side view mirror, jack w/
tire wrench

24069 November 6, 1993 to One (1) unit AERO D HSPUR, KBP-375, good
November 7, 1993 running condition, upholstered seats, side view
mirrors, rear view mirror, jack w/ handle, tire
wrench, seats

24070 November 13, 1993 to One (1) unit AERO D HSPUR, KBP-375, good
November 14, 1993 running condition, upholstered seats, side view
mirrors, rear view mirror, jack w/ handle, tire
wrench, seats

24071 November 27, 1993 to One (1) unit AERO D-II HSPUR, KBP-375, good
November 28, 1993 running condition, jack w/ handle, tire wrench,
spare tire

24072 December 4, 1993 to One (1) unit AERO D-II HSPUR, KBP-375, good
December 5, 1993 running condition, jack w/ handle, tire wrench,
spare tire

24073 December 11, 1993 to One (1) unit AERO D HSPUR, white in color, KBP-
December 12, 1993 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24074 December 18, 1993 to One (1) unit AERO D HSPUR, white in color, KBP-
December 19, 1993 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24075 January 8, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
January 9, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24076 Morning of January 15, One (1) unit AERO D HSPUR, white in color, KBP-
1994 to late afternoon of 375, full in dash instrumentation, jack w/ handle,
January 15, 1994 tire wrench in good running condition.

24077 January 29, 1994 to One (1) unit AERO D HSPUR, KBP-375, white in
January 30, 1994 color, w/o plate number

29
24078 Withdrawn per Court Resolution dated July 3, 1998, p. 103 Crim. Case # 24042

24079 February 5, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
February 6, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24080 February 12, 1994 to One (1) unit AERO D-II HSPUR, KBP-375, in good
February 13, 1994 running condition, jack w/ handle, tire wrench,
spare tire

24081 February 26, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
February 27, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24082 March 4, 1994 to March One (1) unit AERO D HSPUR, white in color, KBP-
5, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24083 March 12, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
March 13, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24084 March 19, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
March 20, 1994 375, full in dash instrumentation, in good running
condition, with jack, tire wrench, spare tire.

24085 April 9, 1994 to April One (1) unit AERO D HSPUR, white in color, KBP-
10, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24086 April 30, 1994 to May One (1) unit AERO D HSPUR, white in color, KBP-
1, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24087 May 7, 1994 to May 8, One (1) unit AERO D HSPUR, white in color, KBP-
1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24088 May 14, 1994 to May One (1) unit AERO D HSPUR, white in color, KBP-
15, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24089 May 21, 1994 to May One (1) unit AERO D HSPUR, white in color, KBP-
22, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24090 June 4, 1994 to June 5, One (1) unit AERO D-II HSPUR, KBP-375, in good
1994 running condition, jack w/ handle, tire wrench,

30
 spare tire

24091 June 11, 1994 to June One (1) unit AERO D-II HSPUR, KBP-375, in good
12, 1994 running condition, jack w/ handle, tire wrench,
spare tire

24092 June 17, 1994 to June One (1) unit AERO D-II HSPUR, KBP-375, in good
19, 1994 running condition, jack w/ handle, tire wrench,
spare tire

24093 July 2, 1994 to July 3, One (1) unit AERO D HSPUR, white in color, KBP-
1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24094 July 23, 1994 to July One (1) unit AERO D HSPUR, white in color, KBP-
24, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition

24095 August 25, 1994 to One (1) unit AERO D VAN with engine no. C190-
August 28, 1994 542416, chassis no. SMM90-8370-C, full in dash
instrumentation, maroon in color with plate no.
KBN-865, in good condition

24096 Morning of September One (1) unit AERO D HSPUR, white in color, KBP-
3, 1994 to afternoon of 375, full in dash instrumentation, jack, tire wrench,
September 3, 1994 in good running condition

24097 September 17, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
September 18, 1994 375, full in dash instrumentation, in good running
condition

24098 November 26, 1994 to One (1) unit AERO D HSPUR, white in color, KBP-
November 27, 1994 375, full in dash instrumentation, jack w/ handle,
tire wrench in good running condition4

On 22 August 1997, the Sandiganbayan issued orders for the arrest of the three accused 5 and for the
holding of their departure from the country.6 On 6 October 1997, petitioner posted a consolidated
surety bond for his provisional liberty.7

In a resolution dated 3 July 1998, the withdrawal of the information in Criminal Case No. 24078 was
granted.8

On 17 August 1998, when arraigned, petitioner and accused Tagupa, assisted by counsel de parte,
pleaded "not guilty" to the charges.9 Accused Nabo remains at large.

On 15 October 1998, pre-trial was concluded.10 Thereafter, trial ensued.

The evidence of the prosecution, as summarized by the Sandiganbayan, are as follows:

ESTANISLAO BARRETE YUNGAO (hereinafter, "Yungao") declared that he was employed as the driver
and liaison officer of the Oro Asian Automotive Center Corporation (hereinafter, "the Company"), an

31
establishment engaged in the assembly of motor vehicles, during the period covering the years 1991 to
1995. As such, Yungao had to officially report to the Land Transportation Office ("LTO") of Cagayan de
Oro City all the engine and chassis numbers prior to the assembly of any motor vehicle. In the process,
the Company had to secure from the LTO a Conduct Permit after a motor vehicle has been completely
assembled, for purposes of carrying out the necessary road testing of the vehicle concerned. After the
said road testing and prior to its eventual sale/disposition, the vehicle has to be first properly
registered with the LTO. Accused Garcia, in his capacity as the Director of the LTO of Cagayan de Oro
City, during all times relevant to the instant cases, was the approving authority on the aforesaid
reportorial requirements and the signatory of the said Conduct Permits.

By reason thereof, Yungao knew accused Garcia since January of 1991. Yungao would always
personally talk to accused Garcia regarding the issuance of the required Conduct Permit for any newly
assembled vehicle. Yungao would secure from accused Garcia as many as 30 to 40 of such permits in a
year.

In the process, accused Garcia would regularly summon Yungao to his office to tell him to inform either
Aurora or Alonzo Chiong, the owners of the Company, that he (accused Garcia) would borrow a motor
vehicle for purposes of visiting his farm. When Yungao could not be contacted, accused Garcia would
personally call up the Company and talk to the owners thereof to borrow the vehicle. Accused Garcia
confided to Yungao that he could not utilize the assigned government vehicle for his own personal use
during Saturdays and Sundays. It was for this reason that he had to borrow vehicles from the Chiongs
to enable him to visit his farm.

Yungao maintained that accused Garcia had been regularly borrowing motor vehicles from the Chiongs
during the period covering January of 1993 up to and until November of 1994. Accused Garcia would
always ask his representative to take the Company’s vehicle on a Saturday morning. However, Yungao
never reported for work on Saturdays; thus, he was not the one who actually released the borrowed
motor vehicles to the representative of accused Garcia. Nonetheless, Yungao would be aware of the
fact that accused Garcia borrowed the vehicles requested because, for every such instance, a
corresponding delivery receipt is issued, which is placed on top of his table for him to place in the
Company’s record files on the following working day. The numerous delivery receipts would show and
indicate the actual number of times accused Garcia had borrowed vehicles from the Company.

Finally, Yungao identified the affidavit which he executed in connection with the subject cases.

On cross-examination, Yungao testified that it was his duty to keep the permits relating to the road
testing of the motor vehicles assembled by the Company. These permits were secured by him from
accused Garcia before the vehicles were eventually put on display or presented to potential buyers.
Although there was a Regulation Officer at the LTO before whom the request for the issuance of a
Conduct Permit is to be presented, Yungao was often told to go straight up to the room of accused
Garcia so that the latter could personally sign the said permit. It was only when accused Garcia is
absent or is not in office that the papers submitted to the LTO were attended to by his assistant.

Yungao testified that accused Garcia would always make his request to borrow the Company’s motor
vehicle verbally and on a Friday. However, Yungao admitted that he was not very familiar with the
signature of accused Garcia, and that the latter’s signature did not appear in any of the delivery
receipts.

During all these years, Yungao could only recall one (1) instance when accused Garcia failed to
approve the Company’s request, and this was a request for an extension of the usual "5-day road test"
period granted to the Company. Nonetheless, the Company found the said disapproval to be
acceptable and proper.

On questions propounded by the Court, Yungao testified that the names and signatures of the persons
who actually received the Company’s vehicles were reflected on the faces of the delivery receipts.

32
However, Yungao does not recognize the signatures appearing on the said delivery receipts, including
those purportedly of accused Tagupa, because Yungao was not present when the vehicles were taken.

The prosecution had intended to present another witness in the person of Ms. Ma. Lourdes V. Miranda
(hereinafter, "Miranda"), who was present at the time Yungao testified. Prior to her presentation,
however, the parties agreed to enter into stipulations and admissions. Thus, it was stipulated that
Miranda was the mother of a child named Jane, who was run over and killed in a vehicular accident;
that the driver of the ill-fated motor vehicle was accused Nabo; that Miranda, thereafter, successfully
traced the said vehicle and eventually discovered the existence of numerous delivery receipts in the
files and possession of the Company; and that said discovery led to the institution of the subject
criminal cases against herein accused. As a result of such admissions and stipulations, the proposed
testimony of Miranda was, thereafter, dispensed with.

AURORA J. CHIONG (hereinafter, "Chiong") declared that she is the Vice-President and General
Manager of the Company, a business establishment engaged in the assembly of motor vehicles. In the
process, the Company has to submit a Dealer’s Report to the LTO prior to the assembly of a motor
vehicle. After the assembly is completed, the Company has to secure a permit from the LTO for
purposes of conducting the necessary road testing of the newly assembled motor vehicle.

In 1993, accused Garcia was the Regional Director of the LTO in Cagayan de Oro City. He was the
officer who approves the needed Conduction Permit of newly assembled motor vehicles. He was also
the LTO officer who approves and signs the Company’s annual LTO Accreditation Certificate.

Chiong recounted that accused Garcia has a farm, and that he would need a vehicle to transport water
thereto. For this purpose, he would, on a weekly basis, borrow from the Company a motor vehicle,
either by asking from Chiong directly through telephone calls or through Yungao, her Liaison Officer.
Everytime accused Garcia would borrow a motor vehicle, the Company would issue a delivery receipt
for such purpose, which has to be signed by the person whom accused Garcia would send to pick up
the motor vehicle. Chiong was usually the company officer who signed the delivery receipt for the
release of the borrowed motor vehicle to the representative of accused Garcia. When she was not in
office, she would authorize her personnel to place [their] initials on top of her name. On several
occasions, Chiong had seen accused Nabo affixing his signature on the delivery receipt before taking
out the borrowed motor vehicles. Chiong was very sure that the driver who picked up the motor
vehicle from the Company was the personnel of accused Garcia because the latter would always call
her up first before sending his representative to get a vehicle. Chiong was likewise very familiar with
the voice of accused Garcia because she had been dealing with him for a long period of time already,
and all the while she had always maintained a cordial relationship with him.

On questions propounded by the Court, Chiong testified that accused Garcia would ask his driver to get
a vehicle on a Saturday at around 6:30 o’clock in the morning. He would return it in the late afternoon
of the same day. There was only one instance when accused Garcia returned the motor vehicle on the
day after, and this was the time when the said vehicle had figured in a vehicular accident which
resulted in the death of a certain Jane, the daughter of Miranda. Chiong was not the complainant in the
said vehicular accident case because she could not afford to offend or antagonize accused Garcia, and
she had always considered the lending of motor vehicles to accused Garcia as a public relation thing.

Chiong clarified that the subject motor vehicles occasionally borrowed by accused Garcia were all
company service cars and not newly assembled vehicles. Finally, she testified that she gets irritated
whenever accused Garcia would ask for a vehicle at a time when she herself would also need it.
However, under the circumstances, she had to give in to his request.11

For the defense, petitioner took the witness stand, while accused Tagupa did not present any evidence.

Petitioner testified that he was the Regional Director of the 10th Regional Office of the LTO from
August, 1987 to December, 1994. He downright denied borrowing any motor vehicle from the

33
Company arguing that his signatures never appeared in the Delivery Receipts12 submitted by the
prosecution.13 He admitted, though, that the Company has been continually transacting business with
his office properly and officially, and has not, even for a single instance, violated any rules with respect
to assembly of motor vehicles, and that there was no reason for the owners of the Company to harbor
any ill-feelings against him.14 He further admitted that he had known Atty. Aurora Chiong, Vice-
President and General Manager of the Company, even before he became Regional Director when he
was still the Chief of the Operations Division. 15 He added that employees of the LTO are used to
borrowing vehicles from their friends and that this practice has been going on prior to his being
Regional Director. He claimed he repeatedly warned his subordinates about the illegality of the same
but they merely turned a deaf ear.16 Lastly, he said his driver, accused Nabo, had, on several
occasions, driven motor vehicles and visited him at his farm, and that he rode with him in going home
without allegedly knowing that the vehicles driven by Nabo were merely borrowed from his (Nabo)
friends.17

On 6 May 2002, the Sandiganbayan promulgated the assailed decision convicting petitioner of fifty-six
counts of violation of Section 3(b) of Republic Act No. 3019, as amended. Accused Tagupa was
acquitted, while the cases against accused Nabo, who remained at large, were archived. The decretal
portion of the decision reads:

WHEREFORE, judgment is hereby rendered finding accused TIMOTEO A GARCIA GUILTY beyond
reasonable doubt of fifty-six (56) counts of violation of Section 3(b) of Republic Act No. 3019,
otherwise known as The Anti-Graft and Corrupt Practices Act. Accordingly, said accused is hereby
sentenced to: (i) in each case, suffer an indeterminate sentence of imprisonment for a period of six (6)
years and one (1) month, as minimum, to twelve (12) years and one (1) month, as maximum; (ii)
suffer all accessory penalties consequent thereto; and (iii) pay the costs.

With respect to accused NERY TAGUPA, by reason of the total lack of any evidence against him, he is
hereby ACQUITED.

As for accused Gilbert G. Nabo, considering that he remained at large and jurisdiction over his person
had yet to be acquired, let the case as against him be achieved.18

Petitioner is now before us assigning as errors the following:

1. THE SANDIGANBAYAN ERRED IN HOLDING THAT ALL THE ELEMENTS OF SECTION 3(B) OF
REPUBLIC ACT NO. 3019 WERE PRESENT IN CRIM. CASES NOS. 24042 TO 24098 (EXCEPT 24078)
AND IN FINDING THE HEREIN PETITIONER GUILTY OF FIFTY SIX (56) COUNTS OF VIOLATION
THEREOF;

2. THE SANDIGANBAYAN ERRED IN FINDING THE HEREIN PETITIONER GUILTY BEYOND REASONABLE
DOUBT OF FIFTY SIX (56) COUNTS OF VIOLATION OF SECTION 3(B) OF REPUBLIC ACT NO. 3019 ON
THE BASIS OF FATALLY DEFECTIVE INFORMATIONS WHEREIN THE FACTS CHARGED NEVER
CONSTITUTED AN OFFENSE;

3. THE SANDIGANBAYAN ERRED IN FINDING THE HEREIN PETITIONER GUILTY BEYOND REASONABLE
DOUBT OF FIFTY SIX (56) COUNTS OF VIOLATION OF SECTION 3(B) OF REPUBLIC ACT NO. 3019 ON
THE BASIS OF EVIDENCE WHICH IS INSUFFICIENT TO CONVICT (EVEN FOR A SINGLE COUNT);

4. THE SANDIGANBAYAN ERRED AND IN THE PROCESS VIOLATED THE CONSTITUTIONAL AND LEGAL
RIGHTS OF THE HEREIN PETITIONER WHEN IT SUPPLIED THE DEFICIENCIES IN THE EVIDENCE OF
THE PROSECUTION WITH ASSUMPTIONS WHICH WERE NOT AT ALL SUPPORTED BY THE EVIDENCE ON
RECORD;

5. THE SANDIGANBAYAN ERRED WHEN IT OBSERVED DIFFERENT STANDARDS OF JUSTICE BY

ACQUITTING THE PETITIONER’S CO-ACCUSED TAGUPA AND CONVICTING THE HEREIN PETITIONER
WHEN THE SAME REASONING SHOULD HAVE LED ALSO TO THE ACQUITTAL OF THE PETITIONER.
34
In any criminal prosecution, it is necessary that every essential ingredient of the crime charged must
be proved beyond reasonable doubt in order to overcome the constitutional right of the accused to be
presumed innocent.19 To be convicted of violation of Section 3(b)20 of Republic Act No. 3019, as
amended, the prosecution has the burden of proving the following elements: (1) the offender is a
public officer; (2) who requested or received a gift, a present, a share a percentage, or a benefit (3) on
behalf of the offender or any other person; (4) in connection with a contract or transaction with the
government; (5) in which the public officer, in an official capacity under the law, has the right to
intervene.21

Petitioner maintains that not all the elements of Section 3(b) have been established by the
prosecution. Petitioner focuses primarily on the fourth element. He argues that the prosecution failed
to show the specific transactions of the Company with the LTO of Cagayan de Oro that petitioner
approved and/or intervened in so that he could borrow from, or be lent by, the Company a vehicle.
Inasmuch as he was convicted by the Sandiganbayan of fifty-six counts of violation of Section 3(b) for
allegedly borrowing the Company’s vehicle fifty-six times, the Sandiganbayan, he stresses, should
have at least pointed out what these transactions were. This, petitioner claims, the Sandiganbayan
failed to show with certainty in its decision. Petitioner adds that the prosecution did not even attempt
to introduce evidence to show what contract or transaction was pending before the LTO over which
petitioner had the right to intervene being the Regional Director when, at the period stated in all the
fifty-six informations, he borrowed a vehicle.

We agree with petitioner that the prosecution miserably failed to prove the existence of the fourth
element.1âwphi1 It is very clear from Section 3(b) that the requesting or receiving of any gift, present,
share, percentage, or benefit must be in connection with "a contract or transaction" 22 wherein the
public officer in his official capacity has to intervene under the law. In the case at bar, the prosecution
did not specify what transactions the Company had with the LTO that petitioner intervened in when he
allegedly borrowed the vehicles from the Company. It is insufficient that petitioner admitted that the
Company has continually transacted with his office. What is required is that the transaction involved
should at least be described with particularity and proven. To establish the existence of the fourth
element, the relation of the fact of requesting and/or receiving, and that of the transaction involved
must be clearly shown. This, the prosecution failed to do. The prosecution’s allegation that the
Company regularly transacts with petitioner’s LTO Office for the registration of its motor vehicles, in
the reporting of its engine and chassis numbers, as well as the submission of its vehicle dealer’s report,
and other similar transactions, will not suffice. This general statement failed to show the link between
the 56 alleged borrowings with their corresponding transactions.

Failing to prove one of the other elements of the crime charged, we find no need to discuss the
presence or absence of the elements.

The next question to be resolved is: Can petitioner be convicted of any other crime (i.e., Direct Bribery
or Indirect Bribery) charged in the informations?

The crime of direct bribery as defined in Article 210 23 of the Revised Penal Code consists of the
following elements: (1) that the accused is a public officer; (2) that he received directly or through
another some gift or present, offer or promise; (3) that such gift, present or promise has been given in
consideration of his commission of some crime, or any act not constituting a crime, or to refrain from
doing something which it is his official duty to do; and (4) that the crime or act relates to the exercise
of his functions as a public officer.24 Thus, the acts constituting direct bribery are: (1) by agreeing to
perform, or by performing, in consideration of any offer, promise, gift or present an act constituting a
crime, in connection with the performance of his official duties; (2) by accepting a gift in consideration
of the execution of an act which does not constitute a crime, in connection with the performance of his
official duty; or (3) by agreeing to refrain, or by refraining, from doing something which is his official
duty to do, in consideration of any gift or promise.25

35
In the case under consideration, there is utter lack of evidence adduced by the prosecution showing
that petitioner committed any of the three acts constituting direct bribery. The two prosecution
witnesses did not mention anything about petitioner asking for something in exchange for his
performance of, or abstaining to perform, an act in connection with his official duty. In fact, Atty.
Aurora Chiong, Vice-President and General Manager of the Company, testified that the Company
complied with all the requirements of the LTO without asking for any intervention from petitioner or
from anybody else from said office.26 From the evidence on record, petitioner cannot likewise be
convicted of Direct Bribery.

Can petitioner be found guilty of Indirect Bribery?

Indirect bribery is committed by a public officer who shall accept gifts offered to him by reason of his
office. The essential ingredient of indirect bribery as defined in Article 211 27 of the Revised Penal Code
is that the public officer concerned must have accepted the gift or material consideration. In the case
at bar, was the prosecution able to show that petitioner indeed accepted a gift from the Company? The
alleged borrowing of a vehicle by petitioner from the Company can be considered as the gift in
contemplation of the law. To prove that petitioner borrowed a vehicle from the Company for 56 times,
the prosecution adduced in evidence 56 delivery receipts 28 allegedly signed by petitioner’s
representative whom the latter would send to pick up the vehicle.

The prosecution was not able to show with moral certainty that petitioner truly borrowed and received
the vehicles subject matter of the 56 informations. The prosecution claims that petitioner received the
vehicles via his representatives to whom the vehicles were released. The prosecution relies heavily on
the delivery receipts. We, however, find that the delivery receipts do not sufficiently prove that
petitioner received the vehicles considering that his signatures do not appear therein. In addition, the
prosecution failed to establish that it was petitioner’s representatives who picked up the vehicles. The
acquittal of one of the accused (Nery Tagupa) who allegedly received the vehicles from the Company
further strengthens this argument. If the identity of the person who allegedly picked up the vehicle on
behalf of the petitioner is uncertain, there can also be no certainty that it was petitioner who received
the vehicles in the end.

Factual findings of the Sandiganbayan are conclusive upon this Court except where: (1) the conclusion
is a finding grounded entirely on speculation, surmise and conjectures; (2) the inference made is
manifestly an error or founded on a mistake; (3) there is grave abuse of discretion; (4) the judgment
is based on misapprehension of facts; and (5) the findings of fact are premised on a want of evidence
and are contradicted by evidence on record.29 In the case before us, we are constrained to apply the
exception rather than the rule. We find that the ruling of the Sandiganbayan that petitioners actually
received the vehicles through his representatives is grounded entirely on speculation, surmise, and
conjectures, and not supported by evidence on record. The certainty of petitioner’s receipt of the
vehicle for his alleged personal use was not substantiated.

WHEREFORE, all the above considered, the petition is GRANTED. The Decision of the Sandiganbayan
in Criminal Cases Nos. 24042 to 24077 and 24079 to 24098 is REVERSED and SET ASIDE. For
insufficiency of evidence, the petitioner is hereby ACQUITTED of the crime charged in the
informations. No costs.

SO ORDERED.

Panganiban, C.J., (Chairperson), in the result.

Ynares-Santiago, Austria-Martinez, and Callejo, Sr., JJ., concur.

EN BANC

A.M. No. MTJ-03-1503             November 16, 2006

36
 NATIONAL BUREAU OF INVESTIGATION (NBI), Complainant,
vs.
JUDGE LUISITO T. ADAOAG, Municipal Circuit Trial Court, Gerona-Ramos-Pura,
Tarlac, Respondent.

DECISION

PER CURIAM:

Respondent Judge Luisito T. Adaoag, Acting Presiding Judge of the Municipal Circuit Trial Court,
Gerona-Ramos-Pura, Tarlac, stands charged with (a) serious misconduct for acts constituting direct
bribery in relation to violation of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019), as
amended; and (b) violation of the Court’s August 4, 2003 resolution for issuing a warrant of arrest
while under suspension.

On June 9, 2003, Desiree A. Legario (Legario) filed a Complaint 1 and executed a Sinumpaang
Salaysay2 before the National Bureau of Investigation (NBI) alleging that she was arrested on May 9,
2003 pursuant to a warrant of arrest issued by respondent Judge for violation of Batas Pambansa Blg.
22. PO3 Eddie Galicia (PO3 Galicia), who implemented the warrant, informed Legario that she should
prepare money for her release order. On May 12, 2003, she was released on bail after giving
P1,500.00 to PO3 Galicia and P2,000.00 to respondent Judge. Thereafter, PO3 Galicia advised Legario
to prepare a motion to postpone and a motion to quash, as well as P20,000.00 to be given to
respondent Judge in consideration of the dismissal of the case. This was confirmed by respondent
Judge in a cellular phone conversation with Legario on May 20, 2003.

Instead of delivering the money, Legario sought the help of a television network and of the NBI. Her
Complaint was subscribed before NBI Supervising Agent Atty. Alexander Bautista who took down the
statements of Legario in her Sinumpaang Salaysay which was subscribed before Special Agent Rosauro
Bautista.3

Thereafter, the NBI agents prepared five pieces of P100 bills 4 dusted with fluorescent powder and
mixed them with several bundles of money.5 At around 3:00 p.m. of June 11, 2003, they conducted
the entrapment operation.

Atty. Olga I. Angustia (Atty. Angustia), the NBI agent who posed as the aunt of Legario in the
entrapment operation, testified that on June 11, 2003, she accompanied the latter to the chambers of
respondent Judge where they conversed for about 15 to 20 minutes. Respondent Judge said to
Legario: "mahirap ang maraming kaso, bata ka pa, ayusin mo." At this point, Atty. Angustia handed
the marked money to respondent Judge who received the same after commenting "baka may marka
yan?" Atty. Angustia and Legario immediately left the chambers to give the signal to the other NBI
operatives.6

Special Investigator III Ocampo Criste (Sp. Investigator Criste), testified that after the lady agent gave
the signal, he, together with other NBI agents, entered the chambers of respondent Judge. He
identified himself as an NBI agent and asked respondent Judge to bring out the money from his
pocket. At first, respondent Judge refused but eventually took out the money from his pocket using a
handkerchief. Sp. Investigator Criste added that the entire incident was videotaped.7

On the same day, respondent Judge was brought to the NBI where the dorsal and palmar portions of
his left and right hands were examined and all were found positive for fluorescent powder.8

On June 18, 2003, the NBI forwarded a copy of the investigation records to the Office of the Court
Administrator and informed the Court that on June 12, 2003, respondent Judge was brought to the
Office of the Ombudsman for inquest proceedings docketed as OMB-C-C-03-0346-F.9

37
On August 4, 2003, respondent Judge was suspended pending final outcome of the criminal
proceedings against him.

In a resolution dated September 17, 2003, the Court noted the letter of the Office of the Ombudsman
referring the case of respondent Judge to the Office of the Court Administrator with attached copy of
the June 17, 2003 Order provisionally dismissing the case against respondent Judge to give way to the
Court’s determination of his administrative liability.10

On October 14, 2003, respondent Judge sought clarification whether his suspension is now deemed
lifted in view of the dismissal of his case by the Office of the Ombudsman.11

Meanwhile, the Court received a letter from a certain Ms. Dominga Salazar stating that despite the
August 4, 2003 resolution placing respondent Judge under suspension, the latter issued a warrant of
arrest against her on October 22, 2003 in Criminal Case No. 0118-03.12 Respondent Judge was thus
directed to show cause why he should not be dismissed from service for violating the resolution
suspending him from service.13

On November 22, 2004, the Court referred the matter to Justice Narciso T. Atienza, a Consultant of the
Office of the Court Administrator for investigation, report, and recommendation.14

In his Comment15 to the administrative charge for bribery, respondent Judge denied receiving money
from Legario on May 12, 2003, or extorting any amount or talking to her on the phone on May 20,
2003. As to the June 11, 2003 incident, respondent Judge claimed that on said date, Legario and a
lady companion talked to him inside his chambers regarding her (Legario) pending case. He told the
latter "Areglohin mo yong complainant. Bata ka pa. Sayang ka." Addressing Legario, the lady
companion said, "Ibigay mo na yong apat." Legario brought out an envelope from her bag prompting
him to say "Para ano yan? "Bawal yan! Baka marked money pa yan!" Legario and her lady companion
replied "Hindi," "Pangsigarilyo-Pangmerienda" and hastily went out of the office. He wanted to return
the money, but since he was carrying several records which he intended to take home, he placed the
money inside his pocket hoping that he would be able to catch up with them outside the building.
However, he failed to return the money because the NBI operatives got the same from him on his way
out of office.

At the hearing, respondent Judge testified that Legario left an envelope on his table. Out of curiosity,
he peeked at the envelope and saw P500.00 peso bills which he suspected to have been dusted with
ultra violet powder. He then wrapped said envelope containing the money with a handkerchief and
placed the same in his pocket for the purpose of returning it to Legario. 16 He added that after the latter
and her lady companion left, it took about two minutes before the NBI agents entered his chambers.17

Commenting on the issuance of the arrest warrant in Criminal Case No. 0118-03, respondent Judge
stated that he acted in good faith on the belief that his suspension was deemed lifted considering that
his case before the Office of the Ombudsman had been dismissed.18 At the hearing, respondent Judge
testified that he belatedly noticed the notation in the Order of the Ombudsman that the dismissal of
the criminal case was only provisional.19

On February 22, 2006, Justice Atienza recommended that respondent Judge be (1) dismissed from
service for violation of R.A. No. 3019, as amended, with forfeiture of all benefits except accrued leave
credits and be disqualified for appointment to any public office, including government-owned or
controlled corporations; and (2) fined in the amount of P2,000.00, to be deducted from his accrued
leave credits, for issuing a warrant of arrest in Criminal Case No. 0118-03 while under suspension.

The Court agrees with the recommendations of Justice Atienza. There is substantial evidence showing
that respondent Judge is guilty of serious misconduct for committing acts constituting direct
bribery20 in soliciting and receiving money from Legario in consideration of dismissal of the case filed
against her. Although Legario failed to testify at the hearing, her Complaint and Sinumpaang

38
Salaysay which were admitted as part of the testimony of NBI Supervising Agent Atty. Alexander
Bautista, constitute evidence to support the conclusion that respondent Judge agreed to dismiss the
case against her for material consideration. Verily, in administrative proceedings, as in the instant
case, it is not legally objectionable to resolve a case based solely on position papers, affidavits or
documentary evidence submitted by the parties considering that affidavits of witnesses may take the
place of their direct testimony.21

In the instant case, the intention of respondent Judge to accept the money was clearly established by
his act of pocketing the same.1âwphi1 That he touched the marked bills, contrary to his testimony that
he merely peeked at the envelope, is proven by the results of the laboratory examination that the
palmar and dorsal aspects of his left and right hands were positive for fluorescent powder. It is hard to
believe that he intended to return the money to Legario because, instead of immediately rushing
towards the door to catch up with Legario and return the money, respondent Judge pocketed it.
Indeed, such act shows a resolve to take the money as his own and not to return the same.

Respondent Judge tainted the image of the judiciary to which he owes fealty and the obligation to keep
it all times unsullied and worthy of the people’s trust.22 The Court has time and again admonished
judges to conduct themselves in a manner that is free even from the appearance of impropriety.  For
judicial officers to enjoy the trust and respect of the people, it is necessary that they live up to the
exacting standards of conduct demanded by the profession and by the Code of Judicial Conduct. This is
especially true in the case of judges who, on a daily basis, interact with the public. Their official
conduct, as well as personal behavior should always be beyond reproach.23

Under Rule 140 of the Rules of Court, as amended, this administrative offense is considered serious
and punishable under Section 11, thus:

Sec. 8. Serious charges. – Serious charges include:

1. Bribery, direct or indirect;

xxxx

Sec.11. Sanctions.- A. If the respondent is guilty of a serious charge, any of the following sanctions
may be imposed:

1. Dismissal from the service, forfeiture of all or part of the benefits as the Court may determine, and
disqualification from reinstatement or appointment to any public office, including government-owned or
controlled corporations. Provided, however, That the forfeiture of benefits shall in no case include
accrued leave credits;

2. Suspension from office without salary and other benefits for more than three (3) but not exceeding
six (6) months; or

3. A fine of more than P20,000.00 but not exceeding P40,000.00.

We have consistently imposed the penalty of dismissal on judges found guilty of bribery. In Rafols, Jr.
v. Dizon, Jr.,24 the Court stated the rationale for imposing the severest penalty in such cases, as
follows:

Bribery is classified as a serious charge punishable by, inter alia, dismissal from the service with
forfeiture of benefits and disqualification from re-employment or appointment in any public office
including government-owned or controlled corporations. (NBI v. Reyes, 326 SCRA 109 [2000]). It
constitutes a serious misconduct in office, which this Court condemns in the strongest possible terms.
It is this kind of gross and flaunting misconduct on the part of those who are charged with the
responsibility of administering the law and rendering justice that so quickly and surely erodes the
respect for the law and the courts without which government cannot continue and that tears apart the

39
very bonds of our polity. (Calilung v. Suriaga, 339 SCRA 340 [2000] citing Haw Tay v. Singayao, 154
SCRA 107 [1987]).

Respondent Judge should also be fined in the amount of P2,000.00 for issuing a warrant of arrest while
under suspension.1âwphi1 Said act is a clear violation of the August 4, 2003 resolution placing him
under suspension "pending final outcome of the criminal proceedings against him considering the
evidence is prima facie strong or until further orders from this Court." The dismissal of his case before
the Office of the Ombudsman is only provisional, and cannot be considered to be the "final outcome"
contemplated in the August 4, 2003 resolution.

WHEREFORE, respondent Judge Luisito T. Adaoag, Acting Presiding Judge of Municipal Circuit Trial
Court, Gerona-Ramos-Pura, Tarlac, is found guilty of serious misconduct and is DISMISSED from
service with FORFEITURE of all benefits, except accrued leave credits, with prejudice to his
reemployment in any branch or service of the government including government-owned or controlled
corporations. He is further ordered to pay a fine of P2,000.00, to be deducted from his leave credits,
for issuing a warrant of arrest while under suspension.

SO ORDERED.

Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez,

Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, Garcia, and Velasco, Jr., JJ.,
concur.

EN BANC

A.M. No. RTJ-11-2290               November 18, 2014

[Formerly OCA IPI No. 08-2954-RTJ]

MARILOU T. RIVERA, Complainant,
vs.
JUDGE JAIME C. BLANCAFLOR, REGIONAL TRIAL COURT, BRANCH 26, STA. CRUZ,
LAGUNA, Respondent.

DECISION

PER CURIAM:

Before the Court is the administrative matter that stemmed from the complaint-affidavit 1 filed on July
16, 2008 by Marilou T. Rivera (Rivera) with the Office of the Court Administrator (OCA), charging
Judge Jaime C. Blancaflor [Judge Blancaflor, Regional Trial Court (RTC), Branch 26, Sta. Cruz, Laguna]
with Bribery, Gross Misconduct, Immorality and violation of the Anti-Graft and Corrupt Practices Act
[Republic Act (R.A.) No. 3019].

The Antecedents

The facts — as set out in the final report and recommendation 2 of Associate Justice Remedios A.
Salazar-Fernando (Justice Fernando) of the Court of Appeals — are summarized below.3

Rivera alleged that she had been engaged in assisting litigants to obtain judicial bonds since year
2000. Sometime in February 2008, she asked her daughter Shiela T. De Mata (De Mata), who was also
a bondsman, to help her secure a bail bond for accused Ricardo Catuday (Catuday). Catuday was
charged of violating Section 11 of R. A. No. 9165 (the Comprehensive Dangerous Drugs Act of 2002)
by the Office of the Provincial Prosecutor (OPP) of Laguna.

40
On February 27, 2008, Assistant Provincial Prosecutor Dan B. Rodrigo (Prosecutor Rodrigo)
recommended a bail of 200,000.00 for Catuday who moved to reduce his bail to120,000.00 before the
Office of the Executive Judge, RTC, Sta. Cruz, Laguna. De Mata brought a copy of the motion to
Prosecutor Rodrigo who did not object to the motion and who signified his conformity by writing "no
objection" and affixing his signature and the date "4/14/08" on the face of the motion.4

De Mata thereafter brought the document to the Office of the Clerk of Court (OCC), RTC, Sta. Cruz,
Laguna for the approval of Judge Blancaflor who was then the Executive Judge. De Mata failed to see
Judge Blancaflor; she was told by Dennis Trinidad (Trinidad), a member of the OCC staff, that Judge
Blancaflor was not in the court. Trinidad volunteered to bring the motion to Judge Blancaflor at
Tagpuan Restaurant(in Pila, Laguna that the judge allegedly owned) for the judge’s approval. Trinidad,
however, returned without securing the requested approval. De Mata was told to come back the next
day.

De Mata went back to the OCC the following morning and was advised this time by Gemma Gallardo
(Gemma), another OCC personnel, to personally approach Judge Blancaflor about Catuday’s motion.
De Mata acted as advised, but Judge Blancaflor simply told De Mata that it was not her job to ask for
the motion’s approval and that she should return it to the OCC. De Mata at that point approached a
Kuya Moring, the process server of Branch 27, about her predicament. Kuya Moring introduced her to
Judge Blancaflor’s driver who tried to help, but the judge still refused to act on the motion. De Mata
next approached Manuel Bugain (Bugain), a court employee at Branch 26. Bugain offered to bring the
motion to Judge Blancaflor who was then in Barangay Layugan, Pagsanjan, Laguna. When Bugain
returned, he told De Mata that Judge Blancaflor refused to sign the motion because it did not bear the
signature of Prosecutor Rodrigo.

De Mata went back to Branch 26, together with Councilor Cecil Magana (Magana), whose assistance
she sought upon Bugain’s advice, to secure the requested approval. Whilethe motion was being handed
to Judge Blancaflor, he blurted out: "Hindi granted yan! Magbayad siya ng ₱200,000.00. Ayaw ko ng
drugs! Hindi granted yan!" Frustrated by the turn of events, De Mata returned the unapproved motion
to Rivera.

On May 27, 2008, Rivera brought the motion to Branch 91, RTC, Sta. Cruz, Laguna as Judge Blancaflor
was then out on a seminar. The following day, Judge Divinagracia Ongkeko (Judge Ongkeko), the
Presiding Judge of Branch 91 and Vice-Executive Judge of RTC, Sta. Cruz, Laguna, issued an order
granting Catuday’s motion to reduce bond. Rivera immediately secured a bail bond for Catuday from
the Industrial Insurance Company and presented it to Branch 26 for Catuday’s provisional release.

Still, Judge Blancaflor refused to issue a release order, saying that he never approved Catuday’s
reduced bailbond of ₱120,000.00. Rivera then learned from one Teresa Mirasol (Mirasol) that Judge
Blancaflor refused to approve Catuday’s motion because it was Rivera who was working for it.
According to Mirasol, the information was given to her over the phone by Noralyn Villamar (Villamar),
a.k.a.Macky, allegedly Judge Blancaflor’s live-in partner.

Rivera further alleged that she experienced the same treatment from Judge Blancaflor when she
worked for the approval of the bail of Roel Namplata (Namplata) who was charged with violation of
Section 15 of R.A. No. 9165, also by the OPP, Laguna. Namplata’s recommended bail was ₱60,000.00.
After securing Prosecutor Rodrigo’s consent and with the help of Gemma, she succeeded in securing
Judge Blancaflor’s approval with the handwritten notation: "Approved ₱40,000.00 for surety bond. 3-
27-08 (SGD.) Judge Blancaflor."

After obtaining a bail bond for Namplata, Rivera tried to secure a release order from Judge Blancaflor
who refused to honor the bond as it had been belatedly filed. He even brought back the cost of the
bond to ₱60,000.00. In the afternoon of June 12, 2008, Rivera learned that Judge Blancaflor declared
that he would not release Namplata unless a criminal case is filed against her by Rina Tranilla
(Tranilla), a sister of Namplata. True enough, Tranilla filed a complaint for estafa 5 against Rivera at
41
around 4:00 o’clock that afternoon. The following day, Judge Blancaflor’s order 6 was issued, dated June
10, 2008, for Namplata’s release.

Explaining her difficulties with Judge Blancaflor in relation with her work as a bondsman, Rivera
claimed that the judge harbored ill will against her because of her involvement in Special Proceeding
No. 4605 entitled Arsenio S. Leron, et al. v. Benjamin S. Leron, et al.,then pending before Judge
Blancaflor’s sala. Rivera alleged that she was the attorney-in-fact of one of the defendants in the case,
Dr. Emelita R. Leron (Dr. Leron) who filed on March 2, 2007 a motion for inhibition against Judge
Blancaflor.7 The motion allegedly recited in detail Judge Blancaflor’s misdeeds and gross misconduct,
manifest partiality and indiscretion in fraternizing with clients and litigants in connection with the case.

Rivera further alleged that Judge Blancaflor inhibited himself from the case after she executed an
affidavit attesting to (1) the judge’s recommendation to the plaintiff, Normita Leron, to secure the
services of Atty. Ricardo Pilares, Jr. (Atty. Pilares); (2) the rigging of the raffle of the case to Judge
Blancaflor; and (3) the irregular service of summons to the defendants in the case. Moreover, her son
Byron Torres (Byron) and son-inlaw Ricel De Mata (Ricel)) also executed a joint affidavit8 stating that
Judge Blancaflor "bribed" them not to testify in connection with the motion for inhibition.

Lastly, Rivera maintained that Judge Blancaflor should be charged with immorality for maintaining an
illicit relationship with Villamar, who is not his wife.

In a Supplemental Affidavit,9 dated July 29, 2008, Rivera reiterated her charge that Judge Blancaflor
committed gross misconduct in (1) fraternizing with litigants;(2) maintaining an illicit affair with a
woman not his wife; and (3) exhibiting personal bias and prejudice against her in her efforts to obtain
bail bonds for Catuday and Namplata.

Judge Blancaflor’s Comment

In his Comment10 dated August 26, 2008, Judge Blancaflor denied Rivera’s accusations and dismissed
them as "mere concoctions" of her "fertile imagination."

Judge Blancaflor claimed that neither Rivera nor her daughter approached him regarding Catuday’s and
Namplata’s bail bonds. Even assuming that they did, he refused their requests because they were not
authorized bondsmen or agents of any duly accredited surety company. They were acting as fixers, he
explained; thus, he was justified in denying their requests. Further, Judge Blancaflor claimed that he
strictly observes a policy of refusing to reduce the required bail in drug-related cases even if approval
is recommended by the investigating prosecutor. He could not also order Catuday’s release because it
was Judge Ongkeko who granted his motion to reduce bail; in his view, Judge Ongkeko should also
order Catuday’s release.

Judge Blancaflor considered as "fantastic" Rivera’s account that she and De Mata brought the motions
to reduce bail of Catuday and Namplata to Tagpuan Restaurant in Pila, Laguna for his approval. He
maintained that Rivera’s account was simply untrue because as a matter of policy, he does not allow
court personnel orany other person for thatmatter, to bring the case records or any part thereof
outsidethe court premises. Moreover, he does not own a restaurant in Pila, Laguna, nor a house,
chapel and resort in Pagsanjan, Laguna.

In the Leron case, Judge Blancaflor recalled that Rivera asked him to extend assistance to her boss,
Dr. Leron, a defendant in the case. He denied her request and since then, she started harassing and
blackmailing him and even filed an administrative case against him.

Shortly thereafter, the Lerons (defendants in Special Proceeding No. 4605), with Rivera’s active
participation, started circulating stories against him, which culminated in the filing ofa letter-complaint
before Executive Judge Mary Ann E. Corpus-Mañalac (Judge Corpus-Mañalac) accusing him of bias,
partiality and bribery. The Lerons however eventually withdrew the complaint after being enlightened

42
aboutthe raffle of cases. Also, he had absolutely no involvement in the engagement of Atty. Pilares as
a lawyer in the case as he does not entertain fixers.

Judge Blancaflor brushed off the immorality charge against him. He branded it as malicious and a mere
fabrication of Rivera. He alleged that Rivera even hired a Solomon Ondevilla (Ondevilla) to execute an
affidavit against him,[11]] but Ondevilla subsequently denied that he executed and signed the
affidavit.12

Judge Blancaflor questioned Rivera’s credibility, claiming that she is known for filing fabricated charges
and malicious complaints against lawyers, judges and other public officials, among them, an Atty.
Cayetano Santos.13 Further, she has also been charged with numerous criminal offenses, mostly
swindling or estafa cases and violations of Batas Pambansa Blg. 22, and is known to have an illicit
relationship withdifferent men.

In his Comment14 to Rivera’s supplemental affidavit,15 Judge Blancaflor reiterated his denial of Rivera’s
charges against him. In particular, he took exception to Annex "B" 16 of the supplemental affidavit,
which referred to Namplata’s motion to reduce bail bond and which allegedly carried his marginal note
of approval. Judge Blancaflor claimed that the document was manufactured and was not on file with
the court. He added that the marginal note approving a reduced bail of ₱40,000.00 was forged; even
assuming that it was genuine, it was not a formal order and he still had the discretion on whether
toreduce the ₱60,000.00 recommended bail. By way of a reply-affidavit, 17 Rivera countered that she is
a legitimate bondsman as she is an agent of Genric Insurance and that she is also a swimming
instructor and in business through her "Rivera Swimming Lessons." With respect to Tagpuan
Restaurant, she clarified that the property is registered in the name of Villamar, Judge Blancaflor’s live-
in partner, and that the two also purchased and co-owned several parcels of land in Layugan,
Pagsanjan, Laguna.

Rivera also claimed that Ondevilla withdrew his affidavit relating Judge Blancaflor’s illicit relationship
with Villamar because the two of them threatened to file a case against him and would have him
imprisoned. She stressed that Judge Blancaflor’s attack on her person has nothing to do with the case
she filed against him.

Justice Fernando’s Investigation/Findings/Recommendation

In compliance with the Court’s resolution of August 17, 2011,18 Justice Fernando conducted a thorough
investigation of the complaint, in the course of which, she conducted several hearings, received
affidavits and documentary evidence, heard testimonies of witnesses, and even conducted an ocular
inspection.19

Justice Fernando found Judge Blancaflor guilty of (1) bribery, gross misconduct and violation of R.A.
3019; and (2) immorality. She recommended that the judge be dismissed from the service, with
prejudice to his reinstatement or appointment to any public office, and likewise recommended the
forfeiture of the judge’s retirement benefits, if any.

The OCA Report and Recommendation

On July 24, 2013, the Court referred Justice Fernando’s final report to the OCA for evaluation, report
and recommendation.20 In its memorandum21 of February 25, 2014, the OCA submitted its report to
the Court, adopting the findings and recommendations of Justice Fernando.

The Court’s Ruling

After considering Justice Fernando’s report and the records of the case, we note that she conducted a
very thorough investigation. We uphold her findings and recommendation as we find sufficient basis to
dismiss respondent Judge Blancaflor from the service.

43
Re: charge of bribery, gross misconduct and violation of R.A. No. 3019

The first count against Judge Blancaflor regarding this charge involved his alleged: (1) refusal to
approve Catuday’s motion to reduce bail bond, despite a "no objection" from the prosecutor; (2)
refusal to order Catuday’s release, despite Judge Ongkeko’s grant of the motion; (3) refusal to order
Namplata’s release, despitehis own approval of the motion to reduce bail bond; and (4) offer of money
to Byron and Ricel to prevent them from testifying in the motion for his inhibition in the Leron case.

While Judge Blancaflor has the discretion to approve or disapprove a motion to reduce bail, it appears
from the records that he abused this prerogative in the cases of Catuday and Namplata. Through Judge
Blancaflor’s inaccessibility (he was usually not in the court in the afternoon) 22 and refusal to take action
on their pleas for provisional liberty, Catuday and Namplata and the people working for the approval of
their motions (Rivera and De Mata) suffered inordinate delay and frustrations in securing the motions’
approval. In more ways than one, Judge Blancaflor gave De Mata and Riveraa run-around in Catuday’s
and Namplata’s cases for no plausible reason other than the judge’s strong antipathy towards Rivera.

This is serious misconduct and a violation of the New Code of Judicial Conduct for the Philippine
Judiciary23 which mandates that "judges shall perform their judicial duties without favor, bias or
prejudice,"24 and that they "shall ensure that his or her conduct, both in and out of court, maintains
and enhances the confidence of the public, the legal profession and litigants in the impartiality of the
judge and of the judiciary."25

For instance, when De Mata learned that Judge Blancaflor said that he did not approve Catuday’s
motion for reduction of his bail because Prosecutor Rodrigo was against the motion, she went to see
the prosecutor about it. Prosecutor Rodrigo told her that there was no problem with the motion, so he
signed it, but he did not know why Judge Blancaflor would not approve the motion. De Mata then
asked the help of Magana, yet even with Magana’s intercession, Judge Blancaflor refused to sign the
motion, saying that he did not like drugs. Magana wondered why Catuday’s motion was not approved
when all the other surety bonds were approved. The following testimony of De Mata confirmed the
difficulties De Mata and her mother experienced in their work as bondsmen in Judge Blancaflor’s sala:

xxxx

Q: After Mr. Bugain told you that Judge Blancaflor refuses to sign for the reason that Fiscal Rodrigo
also does not approve of the said motion, what did you do?

A. I went to Fiscal Rodrigo and asked him what was the problem with the motion?

Q: What did Fiscal Rodrigo [tell] you?

A: He said there was really no problem with the motion so he signed it. He did not know why the
motion of Catuday was left pending.

xxxx

Q: During this time, this Mayora was also in branch 26?

A: Yes, ma’m, and she was also wondering why our application cannot be approved while all the other
surety bonds were approved.

Q: Can you tell us who this Mayora is, what is her occupation?

A: She was a councilor, the wife of the previous mayor. If there are people who cannot afford to pay
bail, they ask her for help and she helps people.26

xxxx

44
Judge Blancaflor denied the allegations, contending that Catuday’s motion was not filed with the OCC
and never reached him.27 Justice Fernando found otherwise, citing the Order28 dated May 28, 2008 of
Judge Ongkeko, Vice-Executive Judge of the RTC, Sta. Cruz, Laguna, granting the motion when Judge
Blancaflor was attending a seminar in Tagaytay City. Judge Ongkeko could not have issued the order
had it not been filed with the OCC. But what was more surprising was Judge Blancaflor’s refusal to
acknowledge and to act on the order of approval. This belies Judge Blancaflor’s excuses for not acting
on Catuday’s motion and lends credence to Rivera’s submission that the judge’s refusal was to spite
her.

The same thing happened when Rivera processed Namplata’s bail bond. As the records show, Judge
Blancaflor approved Namplata’s motion for reduction of bail. The judge admitted his approval during
the investigation. When he was asked: "Do you clearly remember Judge that you reduced it as shown
by your signature from ₱60,000,00 to ₱40,000.00 bail?," he answered: "That is correct sir, that day,"
referring to March 27, 2008.29 Yet, he refused to approve Namplata’s temporary release. In fact, in his
Comment to Rivera’s supplemental complaint,30 he disowned the marginal note he made on a copy of
Namplata’s motion reducing his bail bond to ₱40,000.00.

The following exchanges during the investigation further indicate that Judge Blancaflor overstepped
and abused his authority as a judge when he took time to release Namplata, despite his approval of
Namplata’s bail bond at its original amount which he earlier reduced to ₱40.000.00:

J. Fernando:

But you admit you issued a March 27 Order reducing it to ₱40,000.00?

Judge Blancaflor:

The marginal note I admit, Your Honor.

J. Fernando:

Yes, that’s fine.

Atty. Aguirre (Rivera’s, counsel):

Q: The reason Judge Blancaflor why you did not anymore honor your marginal note reducing the
amount from 60 to 40 is that you came to know that it was Waling, the complainant, and her daughter
Shiela who was (sic) following it up with you?

A: That is not correct, sir. What you claim that I did not honor the original marginal note is because I
did not see it in the original file of the case.

Q: But the more important reason Judge is that you came to know that it was the complainant and her
daughter who were following up this bail bond case and when you came to know that follow up of the
complainant and her daughter, you wanted it returned back to 60 because you said it was too long in
coming, the ₱40,000.00 bond, is that correct?

A: That is not correct sir:

Q: And another condition of yours before the bail could be approved by you is that the sister or
Namplata must file a case of estafa against the complainant which she did and one day after, the case
against the complainant for estafa was filed before the Office of the City Prosecutor, you issued the
Order of Release, is that correct?

A: That is not correct. That is your own language, sir.

Q: That is the testimony of the witnesses.31

45
In an effort to justify his errors and omissions in relation to Catuday’s and Namplata’s motions, Judge
Blancaflor argued that he refused to act on the motions because he hates drugs and,in the case of
Namplata, there was a delay in the processing of the bail bond.

We are not at all convinced by Judge Blancaflor’s explanations. His excuses – which were marked by
inconsistencies and typified by his initial denial that he approved Namplata’s motion, only to admit the
approval before Justice Fernando – cannotjustify his failure to act. Action by the judge was clearly
called for by the urgency of the matter before him – the plea for provisional liberty of Catuday and
Namplata who enjoy the right to bail despite the serious offenses they were charged with. His
unexplained refusal in these cases can only support Rivera’s claim that his inaction was due to Rivera’s
intervention in the approval of the motions, a clear sign of his personal bias and prejudice against her.
This, in our view, ispatently a gross misconduct on the part of Judge Blancaflor.

It appears from the records that Judge Blancaflor’s antipathy towards Rivera arose from her
involvement in the Leron case when she testified against the judge in a motion for his inhibition from
the case. The motion must have caused considerable anxiety and concern for the judge so that he
even exerted efforts to neutralize Rivera, to the extent of offering cash to Byron (Rivera’s son) and
Ricel (Rivera’s son-in-law) who executed a joint Affidavit 32 that Judge Blancaflor and Villamar offered
them ₱10,000.00 each and even warned them not to testify atthe hearing on the motion. The two
showed the cash to Rivera and they had the incident entered in the police blotter. 33 In this regard,
Torres and Ricel deposed:

xxxx

1. x x x Kami ay namamasukan kay Armando Q. Torres ("ARMANDO") na tatay ni BYRON at biyenan

na lalaki ni RICEL. Kami ay laging nagkakaroon ng komunikasyon kay Noralyn M. Villamar a.k.a. Macky
("Macky") dahil may mga transaksiyon silang pinag-uusapan ng aming tatay na si Armando.

2. Noong ika-02 Marso 2007, araw ng Biyernes, mga 5:00 – 5:30 ng hapon, tumawag si Macky kay
Byron at sinabi na gusto daw siya makausap nito tungkol sa pagtetestigo nila laban kay Judge Jaime C.
Blancaflor ("Judge Blancaflor"), at sinabihan na pumunta sa bahay nila.

3. Pagdating ni Byron sa bahay nila Macky at Judge Blancaflor sa Brgy. Layugan ng mga bandang 6:00
ng gabi, tinanong ni Macky si Byron "Bakit natin kailangang maglaban?"Nagkunwari akong walang
alam at tumahimik na lang ako.

4. Nilapitan ako (Byron) ni Judge Blancflor at sinabi na: "Byron, ayaw ko tayong mag-kabanggaan.
Kung lilitaw kayo sa hearing sa petsa 6 ay ipapakulongko kayo. Ito ang ten thousand (₱10,000.00), ito
ay hindi suhol. Wag ka lang tumistigo. Kung tetestigo ka, mapipilitan kaming lumaban. Kayang-kaya
kitang gawan ng kaso tulad ng rape at anumang kaso na puwedeng isaksak sa iyo.

5. Pinahabol pa ni Macky na: "Kahit patayan pwede kami."

6. Noong 03 ng Marso 2007, araw ng Sabado, bandang 5:10 ng hapon, pumunta si Macky at si Guillen
Almonte sa bahay ng tatay namin na si Armando sa Brgy. Duhat kung saan kami ay nagtratrabaho.

7. Galit na galit si Macky at sinabi nito kay Armando ngunit nakatingin sa amin: "Pare, bakit ganito?
Ano ang ginawa ng mga bata? Kayong dalawa, tinanggap namin kayo nang maayos sa Layugan."

8. Hindi na kami umimik at hinayaan naming magsalita na lamang si Macky.

9. Sinabi pa ni Macky na: "Huwag na nating patagalin ito. Ayaw kong tayo ang magkabanggaan. Kung
lalaban kayo, lalaban kami hanggang patayan."

10. Nagtangkang umalis si Byron kaya sumigaw si Macky na: "Byron! Huwag kang umiwas. Problema
natin to. Huwag kang umalis!"

46
11. Nag-isip si Byron ng dahilan upang maka-alis. Bago siya nakaalis, pahabol na sinabi ni Macky na:
"Mag-aabot ako ng tulong, huwag lang kayong sumali."

12. Nang nakaalis na si Byron mga bandang 6:00 pm, naglabas ng pera si Macky at inaabot ito kay
Ricel, ngunit hindi niya ito kinuha. Kaya ang ginawa ni Macky ay kinausap si Armando at inilagay ang
pera sa mesa at sinabi na: "Pare, kung ayaw magtiwala ng anak mo sa amin, ito ang ₱20,000.00 para
kay Byron at para kay Ricel. Ikaw na ang bahala. Meron pang kasunod yan kung pipirma sila ng
Affidavit of Desistance."34

In his comment35 on Rivera’s complaint, Judge Blancaflor denied the alleged offer, claiming that the
alleged sums did not come from him but from Armando Torres (Torres) and were "given as support to
his son Byron and son-in-law Ricel." When Rivera saw the ₱20,000.00, she grabbed it from Byron and
proceeded to the police station and made a false story of bribery against him.36 Judge Blancaflor
offered in evidence two affidavits Armando executed37 dated March 6, 2007 and August 22, 2008.

Again, the explanation fails to persuade us. Armando is Rivera’s estranged husband. Their union
produced Byron and De Mata, the wife of Ricel. Rivera and Armando separated in 1983. It was a case
of a marriage turned sour where the spouses filed cases against one another, as Armando himself
stated in his affidavit of August 22, 2008.38 We should not be too quick therefore to admit Armando’s
statements as unvarnished truth, especially when he did not even appear during the investigation to
affirm the statements attributed to him, despite several subpoenas for him to testify, the last one
being on December 6, 2012.39

On the other hand, Rivera and Byron reported the bribery incident to the police. The following
exchanges on what transpired in the police station significantly shed light on this incident and bolstered
Rivera’s claim that Judge Blancaflor committed a serious misconduct in relation with the Leron case,
thus:

Q: Now, do you remember what thisis all about, the incident reported by Byron Torres?

A: It was a threat.

Q. Will you please read it again to refresh your memory?

(Witness reading the blotter)

Q: What you read, the entry in the blotter is in your handwriting?

A. Yes sir.

Q: What do you remember about this ₱10,000.00?

J. Fernando: 10 or 20?

A: ₱10,000.00

J. Fernando: 10 lang?

A: Yes, ₱10,000.00.

Wag siyang aatend sa hearing saa-sais kung hindi sila ang magkakabangga ni Judge Blancaflor. Q:
What is that ₱10,000.00 there?

A: Ang akin pong pagkakaintindi ito ay suhol dahil nakalagay dito hindi ito suhol. Wag kang tumestigo
dahil kung tetestigo ka ay mapipilitan lumaban gawan ka ng kaso. Pag tumestigo siya gagawa siya ng
kaso.

Translation:

47
If he testified, he would have a case filed against him.

xxxx

Q: But the signature here of Byron, did he sign it in your presence?

A: Yes sir.

Q: And the witness also signed it in your presence?

A: Yes, sir, in my presence.40

The root cause of the Leron case, as Justice Fernando established and stressed, was the irregular
assignment of the case which was directly brought to Judge Blancaflor’s sala without going through a
raffle. Atty. Arthur Trinidad, Jr. (Atty. Trinidad), then RTC Clerk of Court, Sta. Cruz, Laguna, testified
that the case, Special Proceeding No. 4605, which was filed on November 15, 2006 was not included in
the schedule of raffle of cases for the period November 10 to 30, 2006 and was brought to the judge’s
sala even before the case was supposed tobe raffled on November 30, 2006 because he was made to
understand, based on the judge’s letter to him, that the case — a settlement of estate dispute —
belonged to the Family Court then handled by Judge Blancaflor.41 Due to the judge’s letter, he assumed
that the case was within the jurisdiction of the Family Court so that it was his ministerial duty to
forward the case to Judge Blancaflor’s sala.42

Not only does it appear that Judge Blancaflor intervened in the assignment of the Leron case, he also
had a hand in ensuring who would represent the disputants, by suggesting, in the presence of and with
the active participation of Villamar, that the lawyers for the parties would be Atty. Pilares for the
plaintiffs43 and Atty. Stephen David (Atty. David) for the defendants.44 He even went to the extent of
voicing out how the case should turn out.

Thus, Dr. Leron deposed: "Tinanong ko si Judge Blancaflor kung matatalo ako kahit sabihin ko na wala
naman talaga ang lahat ng hinahanap nila. Sagot ni Judge Blancaflor ‘Pwede, depende sa presentasyon
ng abogado mo.’ Tinanong ko kung sino yong abogado na sinasabi ni Macky. Sagot ni Judge
Blancaflor[,] si [Atty. David] at dinagdag pa niya ‘kumpare ko yan,magaling yan, at taga-Tektite,
madali nating maayos ang kaso.’ Nabanggit din niya na kumpare ni Atty. David si

Atty. Pilares. Sinabi niya pa ‘mas lamang kayo kasi mas alam niyo nangyayari kaysa sa kabila.’"45

Also, Ricel, Rivera’s son-in-law, stated under oath that he saw Judge Blancaflor and plaintiff Gilbert
Leron (Gilbert) during the blessing of the chapel inside the compound of the judge’s house on January
16, 2007 and he overheard Judge Blancaflor assuring Gilbert not to worry about the case saying: "Pare
wag na kayo mag-alala, ayos na ang kaso nyo nina Dr. Leron," while they were drinking beer.46

Judge Blancaflor argued that he had no interest whatsoever in the Leron case as it was forwarded to
Branch 26 in the ordinary course of business since cases falling within the exclusive jurisdiction of the
Family Court are directly forwarded to Branch26, his branch. His letter to Atty. Trinidad should not be
considered against him because he was then a new family court judge. He further argued that he did
not refer Atty. Pilares to the plaintiffs; he even dismissed the case for prematurity and inhibited himself
from the case after it was re-raffled.47

We do not find Judge Blancaflor’s explanations convincing.The circumstances of the Leron case left
Judge Blancaflor no other recourse but to inhibit. As Justice Fernando aptly observed, it was more
prudent for the judge to inhibit than to be placed under a cloud of distrust by the parties. On the
matter of the parties’ legal representation alone, we find credible the statements of Rivera, Dr. Leron
and Ricel that not only did Judge Blancaflor refer lawyers to the parties but, more seriously, he gave
them hints that they would prevail in the case.

48
Judge Blancaflor’s interference in the case in the way just described is not only gross misconduct; it
also constitutes a violation of R.A. No. 3019, the Anti-Graft and Corrupt Practices Act, particularly
Section 3(e) which provides: "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: x x x Causing any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or preference in the discharge of his
official administrative or judicial functions through manifest partiality, evident bad faith or gross
inexcusable negligence x x x."

To be sure, even if Judge Blancaflor inhibited himself from the Leron case, he cannot extricate himself
from the legal mess he brought upon himself. His interference in the case caused an undue injury to
the party who should have prevailed had the case pushed through; and an unwarranted benefit to the
party who should have lost had the case been decided on the merits. Worse, he exhibited evident bad
faith when he gave both parties expectations of winning the case. Thus, there is every reason to find
probable cause against him for violation of R.A. No. 3019.

It is unfortunate that Judge Blancaflor lost sight of the exacting standards demanded of the office of a
judge in the Leroncase. Time and again, judges have been reminded thatas magistrates, they must
comport themselves in such a manner that their conduct, official or otherwise, can bear the most
searching scrutiny of the public that looks up to them as the epitome of integrity and justice. 48 Sad to
state, Judge Blancaflor failed to pass this "searching scrutiny."

Re: charge of immorality

On the charge of immorality – for allegedly maintaining an illicit relationship with Villamar who is nothis
wife – Justice Fernando aptly observed that Judge Blancaflor offered no evidence, except general
denials to disprove his moral indiscretion, which appeared to be widely known in the community at the
time material to the case. As the records show, statements made here and there by witnesses and
personalities drawn into the case confirm the special relationship between Judge Blancaflor and
Villamar such that Villamar had no hesitation in speaking for the judge on matters concerning him and
his work.

The community, it seemed, had accepted them as man and wife, given that they stayed in Layugan,
Pagsanjan, Laguna and owned Tagpuan Restaurant in Pila, Laguna. This restaurant, incidentally, even
became Judge Blancaflor’s extension office, usually in the afternoons, as deposed by Rivera, De Mata,
Byron, Ricel and Judge Blancaflor’s staff whose assistance Rivera and De Mata sought in their effort to
secure the provisional liberty for their clients Catuday and Namplata. The depositions were backed up
by pictures of (1) the places where Tagpuan Restaurant used to stand and where the two were
residing, and (2) the events in the life of the live-in partners. Notably, Exhs. "N," "N-1," and "N-
2"49 were separate camera shots of the place where Tagpuan Restaurant used to stand; Exh. "A-15-
C"50 was a picture of Gilbert, a party in the Leron case, attending the blessing of the chapel inside the
compound of Judge Blancaflor’s house; Exh. "E"51 was a picture of Judge Blancaflor and Villamar
together in a hut located inside the compound of their house in Layugan, Pagsanjan, Laguna,
apparently relaxing; and Exhs. "F," "G," and "H" were pictures of Villamar picking up Judge Blancaflor
from his office at the RTC, Sta. Cruz, Laguna, using her Pajero with plate no. XHF 887.52

Judge Blancaflor belittled the immorality charge, dismissing it as merely a fabrication and a product of
Rivera’s fertile imagination. To substantiate his claim, he cited the withdrawal of Ondevilla’s affidavit
confirming Rivera’s charge that he was maintaining an illicit liaison with Villamar.53

Again, we are not persuaded by the judge’s response. Given the fact that Judge Blancaflor is a person
of authority and his involvement in the "bribery" incident (as revealed by Byron and Ricel whom the
judge even threatened if they would testify against him), we find more credibility in Rivera’s
submission that Ondevilla withdrew his affidavit on the immorality charge because the judge likewise
threatened him.
49
The confluence of the statements of Rivera and the others (Byron, De Mata, Ricel and Mirasol), the
information provided by Judge Blancaflor’s staff, and the exhibits described above, constitute more
than enough support for the immorality charge against Judge Blancaflor. These interwoven pieces of
evidence pointing to the relationship between the judge and Villamar, several of which materialized
over a period of time, could not conceivably have been the result of Rivera’s fabrications. As De Mata
testified during the investigation:

ATTY. SHALIM:

Q: Ms. Witness, you mentioned that Noralyn Villamar is the live-in partner of Judge Blancaflor. How do
you know this?

A: Because Tita Macky herself was the one who told me that Judge Blancaflor is her live-in partner.

xxxx

J. FERNANDO:

Q: If you know, how long have JudgeBlancaflor and Noralyn been living together as live-in partners?

A: 2006, your Honor.

Q: So they started as live-in partners since 2006?

A: June of 2006, Your Honor, because that was when I came back from Manila.

Q: As far as you are concerned, you only learned about it in 2006?

A. Yes , Your Honor.

Q: Have you seen them really living together as live-in partners?

A: No, Your Honor. It was my husband because they were still at Layugan because my husband was
the driver of my father at that time.

xxxx

Q: Are you saying that Judge and Macky are living in Layugan?

A: Yes, Your Honor.

xxxx

Q: Are you sure that Macky told you that Judge Blancaflor is her live-in partner?

A: Yes, Your Honor.

Q: How did she tell you?

A: It was just in a casual way that she told me that Judge is her current live-in partner because
previously it was a Colonel.

Q: So despite the fact that you are not close to Macky, Macky intimidated (sic) to you that Judge
Blancaflor is her live-in-partner?

A: Yes, Your Honor.54

Justice Fernando stressed that Judge Blancaflor did not categorically deny the allegations of an illicit
relationship with Villamar. While he stated that his marriage to his wife NoraLopez was already

50
annulled, the annulment became final only on July 18, 2012 by virtue of an entry of judgment from the
RTC, Br. 199, Las Piñas City. Thus, he was still a married man at the time of his liaison with Villamar.55

For maintaining a relationship with Villamar, Judge Blancaflor crossed the line of a proper and
acceptable conduct as a magistrate and a private person. In Re: Complaint of Mrs. Rotilla A. Marcos
and her children against Judge Ferdinand J. Marcos,56 we said: "x x x The Code of Judicial Ethics
mandates that the conduct of a judge must be free of a whiff of impropriety not only with respect to
his performance of his official duties, but also to his behavior outside his sala and as a private
individual. There is no dichotomy of morality: a public official is also judged by his private morals. The
code dictates that a judge, in order to promote public confidence in the integrity and impartiality of the
judiciary, must behave with propriety at all times. x x x."

In sum, we find substantial evidence to hold Judge Blancaflor guilty as charged. This conclusion, as
correctly observed by Justice Fernando:

x x x jibes with the affidavits and testimonies of complainant Rivera and her witnesses. His acts of
fraternizing with lawyers and litigants, his partiality in the performance of his duties, his act of giving
bribe money to two (2) witnesses to a case in order for them to withdraw, and maintaining an illicit
affair with a woman not his wife tarnished the image of the judiciary. Respondent judge demonstrated
himself to be wanting of moral integrity x x x He is therefore unfit to remain in office and discharge his
functions and duties as judge.57 (Emphasis supplied)

Indeed, as observed by the OCA, it has been established that "[t]he findings of investigating
magistrates on the credibility of witnesses are given great weight by reason of their unmatched
opportunity to see the deportment of the witnesses as they testified."58

Gross misconduct, bribery, violation of R.A. No. 3019 and immorality, all of them constituting
violations of the Code of Judicial Conduct,59 are serious charges under Section 8, Rule 140 of the Rules
of Court punishable under Section 11 of the same Rule by any of the following: (1) dismissal from the
service, forfeiture of the benefits as the Court may determine, and disqualification from reinstatement
or appointment to any public office, including government-owned or controlled corporations; forfeiture
of benefits shall in no case include accrued leave credits; (2) suspension from office without salary and
other benefits for more than three (3) months but not exceeding six (6) months; or (3) a fine of more
than ₱20,000.00 but not exceeding ₱40,000.00.

Considering the gravity of theoffenses committed by Judge Blancaflor, we approve and adopt the
recommendations of Justice Fernando and the OCA for his dismissal from the service, with the
accessory penalties.

WHEREFORE, premises considered, Presiding Judge Jaime C. Blancaflor, Branch 26, Regional Trial
Court, Sta. Cruz, Laguna, is found GUILTY of gross misconduct, violation of the Anti-Graft and Corrupt
Practices Act (R.A. No. 3019) and immorality, constituting serious violations of the Code of Judicial
Conduct under Section 8,Rule 140 of the Rules of Court.

Judge Blancaflor is DISMISSED from the service, with forfeiture of his retirement and other monetary
benefits, except accrued leave credits. He is DISQUALIFIED from reinstatement or appointment to any
public office, including government-owned or controlled corporations.

This ruling shall be without prejudiceto any disciplinary action that may be brought against Judge
Blancaflor as a lawyer under A.M. No. 02-9-02-SC. 60 Accordingly, Judge Blancaflor is directed to
COMMENT within ten (10) days from receipt of this decision and to show cause why heshould not
alsobe suspended, disbarred or otherwise disciplinarily sanctioned as a member of the Philippine Bar.

SO ORDERED.

51
Sereno, C.J., Carpio, Leonardo-De Castro, Brion,  Del Castillo, Villarama, Jr., Mendoza, Reyes, Perlas-
Bernabe, and Leonen, JJ., concur.

Velasco, Jr., J., no part due to prior action in OCA.

Peralta and Bersamin, JJ., on leave.

Perez, J., no part. acted on matter as dep. Crt. Adm.

Jardeleza, J., no part. from colleague.

FIRST DIVISION

G.R. Nos. 147578-85             January 28, 2008

ROLANDO L. BALDERAMA, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and JUAN S. ARMAMENTO, respondents.

x------------------------------------------x

G.R. Nos. 147598-605             January 28, 2008

ROLANDO D. NAGAL, petitioner,
vs.
JUAN S. ARMAMENTO, private respondent
and
THE SPECIAL PROSECUTOR, public respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us are two consolidated petitions for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, seeking to reverse the Joint Decision1 of the Sandiganbayan dated
November 17, 2000 in Criminal Cases Nos. 20669, 20670, 20672, 20674, 20675, 20676, 20677, and
20678; and its Resolution dated March 20, 2001.

52
Rolando L. Balderama, petitioner in G.R. Nos. 147578-85, and Rolando D. Nagal, petitioner in G.R.
Nos. 147598-605, were employed with the Land Transportation Commission (LTO) assigned to the
Field Enforcement Division, Law Enforcement Services. Juan S. Armamento, respondent in both cases,
operates a taxi business with a fleet of ten (10) taxi units.

Acting on complaints that taxi drivers in the Ninoy Aquino International Airport discriminate against
passengers and would transport them to their destinations only on a "contract" basis, the LTO created
a team to look into the veracity of the complaints. Petitioners in these cases were members of the
team, popularly known as "Flying Squad," together with Cipriano L. Lubrica and Cresencio de Jesus.

On July 14, 1992, the team flagged down for inspection an "SJ Taxi" owned by respondent. The team
impounded the taxi on the ground that its meter was defective. However, upon inspection and testing
by the LTO Inspection Division, the results showed that contrary to the report of the team, the meter
waiting time mechanism of the vehicle was not defective and was functioning normally. The vehicle
was released to respondent.

On December 2, 1992, respondent, feeling aggrieved of the malicious impounding of his vehicle, filed
with the Office of the Ombudsman a complaint for bribery and violation of Section 3(e) of Republic Act
(R.A.) No. 3019, as amended,2 against herein petitioners as well as Lubrica and de Jesus. He alleged
that prior to the impounding of his taxi, the four LTO officers had been collecting "protection money"
from him. On February 15, 1992, they went to his office and proposed they would not apprehend his
drivers and impound his vehicles for violations of LTO rules, provided he gives them the amount
of P400.00 every 15th and 30th day of the month. They agreed to the reduced amount of P300.00. On
the same day, he started giving them P300.00 and from then on, every 15th and 30th day of the month
until June 15, 1992. Thereafter, he failed to give them the agreed amount because his business was
not doing well.

Eventually, the Office of the Ombudsman filed with the Sandiganbayan nine (9) Informations for
violations of Article 210 of the Revised Penal Code 3 against petitioners and the other members of the
team, docketed as Criminal Cases Nos. 20669-20677. All the Informations were identically worded,
except the date of the commission of the crimes. For brevity, we reproduce the Information in Criminal
Case No. 20669 as sample, thus:

Criminal Case No. 20669

That on or about February 15, 1992 or for sometime prior thereto in Makati, Metro Manila, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused all public officers, being
all employees of the Land transportation Office assigned with the Field Enforcement Division, Law
Enforcement Services, committing the offense in relation to their office and taking advantage of their
position, did then and there willfully, unlawfully and feloniously solicit, demand and receive from Juan
Armamento, a taxicab operator, the amount of P300.00 in consideration for the said accused refraining
from performing their official duty of conducting inspections on the taxicab units being operated by
said Juan Armamento to determine any possible violation of LTO rules and regulations, thereby causing
Juan Armamento and the public service damage and prejudice.

CONTRARY TO LAW.

They were also charged with violation of Section 3(e) of R.A. No. 3019, as amended. The Information,
docketed as Criminal Case No. 20678, reads:

That on or about July 14, 1992 or for sometime prior or subsequent thereto, in Metro Manila,
Philippines and within the jurisdiction of this Honorable Court, all accused public officers, being
employees of the Land transportation Office, assigned with the Field Enforcement Division, Law
Enforcement Services, while in the discharge of their official administrative functions, did then and
there willfully, unlawfully and criminally cause undue injury to Juan Armamento, a taxicab operator,

53
through evident bad faith by apprehending and impounding one (1) unit of his taxicab with Plate No.
PKD-726 for alleged violation of LTO rules and regulations, in that, its meter is defective (waiting time
not functioning), which was later on established to be not true, thereby depriving said Juan Armamento
of the use of his taxicab unit for about three (3) days and to realize income thereon for the same
period, as well as incur unnecessary expenses in effecting the release of his impounded unit from the
impounding area of the LTO.

CONTRARY TO LAW.

Upon arraignment on June 30, 1994, the accused, assisted by counsel, pleaded not guilty. The cases
were consolidated and tried jointly. Prior thereto, they were suspended pendente lite from the service
for a period of ninety (90) days.

On March 5, 1999, accused de Jesus died. The cases against him were dismissed. The hearing
proceeded against petitioners and Lubrica.

In a Decision dated November 17, 2000, the Sandiganbayan found petitioners and Lubrica guilty of
direct bribery in seven (7) of the nine (9) Informations filed against them and were sentenced in each
count "to suffer the indeterminate penalty of imprisonment of 4 years and 2 months, as minimum, to 5
years, 4 months and 20 days, as maximum, within the range of prision correccional, and to suffer the
penalty of special temporary disqualification." They were further ordered to pay a fine of P300.00
without subsidiary imprisonment in case of insolvency and "to restitute the amount of P300.00 as
alleged in the Informations." They were acquitted in Criminal Cases Nos. 20671 and 20673 for failure
of the prosecution to establish their guilt beyond reasonable doubt.

Petitioners and Lubrica were also convicted in Criminal Case No. 20678 for violation of Section 3(e) of
R.A. No. 3019, as amended, and were sentenced to suffer imprisonment of six (6) years and one (1)
month, as minimum, to ten (10) years and one (1) day, as maximum. They were also disqualified
perpetually from holding public office and were ordered to indemnify the respondent the amount
of P1,500.00, representing his lost income for the 3-day period that the taxi cab remained in the LTO
impounding unit.

Petitioners and Lubrica filed separate motions for reconsideration arguing that they were not yet
grouped as a team on February 15, 1992, hence, there could be no conspiracy. While the motion was
pending resolution, both petitioners filed separate motions for new trial based on an affidavit dated
December 22, 2000 executed by respondent recanting his previous testimony and pointing to Lubrica
and de Jesus as the only culprits.

On March 20, 2001, the Sandiganbayan denied the motions for reconsideration and the motions for
new trial. In denying the motions for reconsideration, the Sandiganbayan ruled:

Anent the second argument, the Supreme Court has made these pronouncements:

Direct proof is not essential to prove conspiracy, as it may be shown by acts and circumstances from
which may logically be inferred the existence of a common design, or may be deduced from the mode
and manner in which the offense was perpetuated. (see People v. Cabiling, 74 SCRA 785; People v.
Tingson, 47 SCRA 243; People v. Alonso, 73 SCRA 484).

Thus, for failure of the accused to controvert prosecution’s evidence that all four of them went to the
office of the private complainant on February 15, 1992 and offered him to refrain from subjecting his
taxi units to apprehension for notation of LTO rules, provided that he comes across with the amount
of P400.00 (later reduced to P300.00) to be delivered twice a month and it was accused Nagal who
received the P300.00 on April 30, 1992, Balderama on May 30, in the presence of de Jesus, Lubrica on
February 15, February 28 together with Nagal, March 30 and June 15, and that in fact, Manimtim
witnessed the incident which occurred on May 15 and February 15, 1992 and saw Balderama and de
Jesus waiting in the mobile car together with Nagal, this Court’s finding of conspiracy holds.
54
In denying the motions for new trial, the Sandiganbayan held:

Retraction of testimonies previously given in Court are viewed with disfavor. As a general rule, a
motion for new trial will not be granted if based on an affidavit of a witness where the effect is to free
the appellant from participation in the commission of the crime. The recantation made by the private
complainant after the conviction of the accused is unreliable and deserves scant consideration.

In the case of People v. Soria, 262 SCRA 739, the Supreme Court declared:

Indeed, it would be dangerous rule to reject the testimony taken before the Court of justice simply
because the witness later changed his mind for one reason or another, for such a rule will make a
solemn trial a mockery and will place the investigation of truth at the mercy of unscrupulous witnesses.
It bears stressing that a testimony in court is made under conditions calculated to discourage and
forestall falsehood.

Both petitioners filed with this Court separate petitions for review on certiorari, both arguing that the
Sandiganbayan erred: (1) in finding that they are guilty of the offenses charged; (2) in holding that
petitioners and their co-accused acted in conspiracy; and (3) in disregarding the recantation made by
respondent.

On January 4, 2003, Lubrica likewise filed with this Court a petition for review on certiorari. In our
Decision dated February 26, 2007, we denied his petition for being late. Our Decision became final and
was recorded in the Book of Entries of Judgments on April 20, 2007.

The sole issue for our resolution is whether the guilt of the accused, now petitioners, in these cases has
been proved by evidence beyond reasonable doubt.

The crime of direct bribery as defined in Article 210 of the Revised Penal Code contains the following
elements: (1) that the accused is a public officer; (2) that he received directly or through another
some gift or present, offer or promise; (3) that such gift, present or promise has been given in
consideration of his commission of some crime, or any act not constituting a crime, or to refrain from
doing something which is his official duty to do; and (4) that the crime or act relates to the exercise of
his functions as a public officer.4

The Sandiganbayan found the above elements of direct bribery present. It was duly established that
the accused demanded and received P300.00 as "protection money" from respondent on several dates.
As against the prosecution’s evidence, all that the accused could proffer was alibi and denial, the
weakest of defenses.

Anent Criminal Case No. 20678, to hold a person liable under Section 3(e) of R.A. No. 3019, the
concurrence of the following elements must be established beyond reasonable doubt by the
prosecution: (1) that the accused is a public officer or a private person charged in conspiracy with the
former; (2) that the said public officer commits the prohibited acts during the performance of his or
her official duties or in relation to his or her public positions; (3) that he or she causes undue injury to
any party, whether the government or a private party; and (4) that the public officer has acted with
manifest partiality, evident bad faith or gross inexcusable negligence.5 The Sandiganbayan found that
petitioners and Lubrica participated directly in the malicious apprehension and impounding of the taxi
unit of respondent, causing him undue injury.6

Settled is the rule that findings of fact of the Sandiganbayan in cases before this Court are binding and
conclusive in the absence of a showing that they come under the established exceptions, among them:
1) when the conclusion is a finding grounded entirely on speculation, surmises and conjectures; 2) the
inference made is manifestly mistaken; 3) there is a grave abuse of discretion; 4) the judgment is
based on misapprehension of facts; 5) said findings of facts are conclusions without citation of specific
evidence on which they are based; and, 6) the findings of fact of the Sandiganbayan are premised on
the absence of evidence on record.7 We found none of these exceptions in the present cases.
55
Petitioners’ prayer for complete acquittal on the strength of respondent’s affidavit of recantation fails to
impress us.

A recantation or an affidavit of desistance is viewed with suspicion and reservation. 8 The Court looks
with disfavor upon retractions of testimonies previously given in court. It is settled that an affidavit of
desistance made by a witness after conviction of the accused is not reliable, and deserves only scant
attention.9 The rationale for the rule is obvious: affidavits of retraction can easily be secured from
witnesses, usually through intimidation or for a monetary consideration. Recanted testimony is
exceedingly unreliable. There is always the probability that it will later be repudiated. 10 Only when
there exist special circumstances in the case which when coupled with the retraction raise doubts as to
the truth of the testimony or statement given, can retractions be considered and upheld. 11 As found by
the Sandiganbayan, "(t)here is indubitably nothing in the affidavit which creates doubts on the guilt of
accused Balderama and Nagal."

WHEREFORE, we DENY the petition. The challenged Decision of the Sandiganbayan dated November
17, 2000 in Criminal Cases Nos. 20669, 20670, 20672, 20674, 20675, 20676, 20677 and 20678
is AFFIRMED in toto.

SO ORDERED.

Puno, C.J., (Chairperson), Corona, Azcuna, and Leonardo-De Castro, JJ., concur.

SECOND DIVISION

G.R. No. 185224               July 29, 2015

AMELIA CARMELA CONSTANTINO ZOLETA, Petitioner,

vs.
THE HONORABLE SANDIGANBAYAN [FOURTH DIVISION] and PEOPLE OF THE
PHILIPPINES, Respondents.

DECISION

BRION, J.:

We resolve the petition for review on certiorari1 filed by petitioner Amelia Carmela Constantino Zoleta
assailing the November 5, 2008 decision2 of the Sandiganbayan (Fourth Division) in Criminal Case No.
28326.

The case stemmed from an anonymous complaint filed against the petitioner, Mary Ann Gadian, and
Sheryll Desiree Tangan before the Office of the Ombudsman-Mindanao (Ombudsman) for participating
in the scheme of questionable grants and donations to fictitious entities using provincial funds. As a
result of this complaint, the Commission on Audit (COA) conducted a special audit in Sarangani
Province. Among the irregularities discovered by the Special Audit Team was a ₱20,000.00 financial
assistance given to Women in Progress (WIP), a cooperative whose members were mostly government
personnel or relatives of the officials of Sarangani Province.

56
The COA Special Audit Team submitted its report to the Ombudsman which, in turn, conducted a
preliminary investigation. Thereafter, the Ombudsman, through the Office of the Special Prosecutor,
charged the petitioner, Vice-Governor Felipe Constantino, Violeta Bahilidad, Maria Camanay, and
Teodorico Diaz with malversation of public funds by falsification of public documents defined and
penalized under Article 217 in relation to Article 171(2) and Article48 of the Revised Penal Code, as
amended, before the Sandiganbayan in an Information which reads: That on January 24, 2002 or prior
or subsequent thereto in Sarangani, Philippines, and within the jurisdiction of this Honorable Court,
accused Felipe Katu Constantino, a high-ranking public officer, being the Vice-Governor of the Province
of Sarangani, Maria D. Camanay, Provincial Accountant, Teodorico F. Diaz, Provincial Board Member,
Amelia Carmela C. Zoleta, Executive Assistant III, all accountable public officials of the Provincial
Government of Sarangani, by reason of the duties of their office, conspiring and confederating with
Violita Bahilidad, private individual, the public officers, while committing the offense in relation to
office, taking advantage of their respective positions, did then and there wilfully, unlawfully and
feloniously take, convert and misappropriate the amount of TWENTY THOUSAND PESOS (₱20,000.00),
Philippine Currency, in public funds under their custody, and for which they are accountable, by
falsifying or causing to be falsified the corresponding Disbursement Voucher No. 101-2002-01-822 and
its supporting documents, making it appear that financial assistance had been sought by Women In
Progress, Malungon, Sarangani, represented by its President, Amelia Carmela C. Zoleta, when in truth
and in fact, the accused knew fully well that no financial assistance had been requested by the said
group and her association, nor did Amelia Carmela C. Zoleta and her association receive the
aforementioned amount, thereby facilitating the release of the above-mentioned public funds in the
amount of TWENTY THOUSAND PESOS (₱20,000.00)through encashment by the accused at Land Bank
of the Philippines (LBP) Check No. 36481 dated January 24, 2002 issued in the name of the Violeta
Bahilidad, which amount they subsequently misappropriated to their personal use and benefit and
despite demand, the said accused failed to return the said amount to the damage and prejudice of the
government and the public interest of the aforesaid sum.

CONTRARY TO LAW.3 (Emphasis in the original.)

On arraignment, the petitioner, Vice-Governor Constantino and Bahilidad pleaded "not guilty." Diaz and
Camanay, on the other hand, remained at large.

On March 22, 2006, the Sandiganbayan issued a Pre-trial Order.4 The People of the Philippines, though
the Office of the Special Prosecutor, filed its Comment and Ex Parte Motion to Include Testimonial
Evidence and Issue to Pre-trial Order5 essentially claiming that the Pre-trial Order did not reflect certain
testimonial evidence "as stated during the Pre-Trial."6

In its Order7 dated April 5, 2006, the Sandiganbayan amended certain portions of the Pre-trial Order.

On April 25, 2006, Vice-Governor Constantino died in a vehicular accident, resulting in the dismissal of
the case against him.

In its decision dated November 5,2008, the Sandiganbayan found the petitioner and Bahilidad guilty
beyond reasonable doubt of the crime charged, and sentenced them to suffer the indeterminate
penalty of fourteen (14) years, eight (8) months and one (1) day, as minimum, to sixteen (16) years,
five (5) months, and eleven (11) days of reclusion temporal, as maximum. It also imposed on them
the additional penalty of perpetual disqualification from holding any public office. The Sandiganbayan
likewise directed them to pay back the Province of Sarangani ₱20,000.00 plus interest, computed from
January 2002 until fully paid.8

The Sandiganbayan held that Vice-Governor Constantino had control and custody of the funds by
reason of his office, and that his signature was needed before a grant, donation, or assistance could be
released to a requesting party. According to the Sandiganbayan, Vice-Governor Constantino approved
the ₱20,000.00 disbursement despite the lack of the required documentation.

57
The Sandiganbayan further ruled that Vice-Governor Constantino conspired with the other accused in
using a dummy organization WIP to facilitate the malversation. It explained that the petitioner, who
was Vice-Governor Constantino’s own daughter and who held the position of Executive Assistant III in
his office, committed the following acts: (a) ordered Mary Ann Gadian, a computer operator at the
Office of the Sangguniang Panlalawigan of Sarangani, to make a letter-request for financial assistance
using a nonexistent cooperative; (b) directed Jane Tangan, the Local Legislative Staff Officer of the
Office of the Vice-Governor, to falsify the signature of WIP’s secretary, Melanie Remulta, on the
request-letter; and (c) certified and approved the disbursement voucher; and then presented it to
Diaz, Camanay, and Vice-Governor Constantino for their respective signatures.

The Sandiganbayan likewise ruled that falsification was a necessary means to commit the crime of
malversation.

THE PETITION FOR REVIEW ON CERTIORARI

In the present petition, the petitioner argued that: (a) the Sandiganbayan’s November 5, 2008
decision in Criminal Case No. 28326 was void because one of its signatories, Justice Gregory Ong, was
not a natural-born Filipino citizen per Kilosbayan Foundation v. Exec. Sec. Ermita, 9 and hence not
qualified to be a Sandiganbayan justice; (b) the totality of evidence presented by the prosecution was
insufficient to overcome the petitioner’s presumption of innocence; and (c) the Sandiganbayan denied
her due process when it issued its Order dated April 5, 2006, amending certain portions of the pre-trial
order without any hearing.

In its Comment,10 the People countered that Kilosbayan merely required Justice Ong to complete "all
necessary steps, through the appropriate adversarial proceedings in court, to show that he is a natural
born Filipino citizen and correct the records of his birth and citizenship." It added that Kilosbayan did
not categorically rule that Justice Ong was not a natural-born Filipino who was disqualified from
accepting an appointment to the position of Associate Justice of this Court. The People further pointed
out that the Court in Topacio v. Ong11 already acknowledged Justice Ong’s actual physical possession
and exercise of the functions of the office of an Associate Justice of the Sandiganbayan.

The People likewise argued that the issue of sufficiency of the prosecution evidence is a question of fact
which is beyond the province of a petition for review on certiorari. It nonetheless maintained that the
Sandiganbayan’s findings were supported by the evidence on record.

On the third issue, the People maintained that a person charged with willful malversation can validly be
convicted of malversation through negligence.

OUR RULING

We DENY the petition.

I. The Sandiganbayan’s November 5, 2008 decision is valid

The petitioner’s reliance in Kilosbayan to challenge the validity of the Sandiganbayan’s decision is
misplaced.

We point out that Kilosbayana rose from a petition for certiorari filed by both Kilosbayan Foundation
and Bantay Katarungan – both non-governmental organizations engaged in public and civic causes –
assailing then President Gloria Macapagal-Arroyo’s appointment of Justice Ong as an Associate Justice
of the Court on the ground that the latter was not a natural born citizen. Contrary to the petitioner’s
claim, Kilosbayan did not rule that Justice Ong was not a natural-born Filipino (and hence unqualified
to assume the position of a Sandiganbayan Justice). The Court merely stated that Justice Ong cannot
accept an appointment to the position of Associate Justice of the Supreme Court or assume the
position of that office, "until he shall have successfully completed all the necessary steps, through the

58
appropriate adversarial proceedings in court to show that he is a natural-born Filipino citizen and
correct the records of his birth and citizenship."12

At any rate, the Court has long settled the issue of Justice Ong’s citizenship. After the Court
promulgated Kilosbayan, Justice Ong immediately filed with the Regional Trial Court (RTC), Branch
264, Pasig City, a petition for the amendment/ correction/ supplementation or annotation of an entry
in [his] Certificate of Birth, docketed as S.P. Proc No. 11767-SJ. In its decision of October 24, 2007,
the RTC13 granted Justice Ong's petition to be recognized as a natural-born Filipino. Consequently, the
RTC directed the Civil Registrar of San Juan, Metro Manila to annotate in the Certificate of Birth of
Justice Ong its (RTC’s) decision.

The RTC denied the motions moving for a reconsideration of its decision.

In its six-page resolution in 2013, the Court En Banc also held that Justice Ong was a natural-born
citizen, thus:

The pronouncements of the Court in both GR No. 179895 and GR No. 180543, and the finality of the
decision rendered by the RTC on October 24, 2007,in S.P. No. 11767-SJrecognizing Justice Ong as a
natural born citizen of the Philippines and directing the correction of the existing records of his birth
and citizenship have already definitively settled the subject of the query posed by SP Villa-Ignacio.14

Even without this ruling, we hold that Justice Ong was a de facto officer during the period of his
incumbency as a Sandiganbayan Associate Justice. A de facto officer is one who is in possession of an
office and who openly exercises its functions under color of an appointment or election, even though
such appointment or election may be irregular. 15 It is likewise defined as one who is in possession of an
office, and is discharging its duties under color of authority, by which is meant authority derived from
an appointment, however irregular or informal, so that the incumbent be not a mere
volunteer.16 Consequently, the acts of the de facto officer are as valid for all purposes as those of a de
jure officer, in so far as the public or third persons who are interested therein are concerned.17

In the light of these considerations, we find no basis to invalidate the November 5, 2008 decision of
the Sandiganbayan in Criminal Case No. 28326.

II. Only questions of law should be raised in a Rule 45 petition

It is settled that the appellate jurisdiction of the Supreme Court over decisions and final orders of the
Sandiganbayan is limited only to questions of law; it does not review the factual findings of the
Sandiganbayan which, as a general rule, are conclusive upon the Court.

A question of law exists when there is doubt or controversy as to what the law is on a certain state of
facts. On the other hand, a question of fact exists when the doubt or controversy arises as to the truth
or falsity of the alleged facts. The resolution of a question of fact necessarily involves a calibration of
the evidence, the credibility of the witnesses, the existence and the relevance of surrounding
circumstances, and the probability of specific situations.18

In the present petition, the petitioner alleges that the presented evidence were insufficient to support a
conviction. She thus seeks a re-evaluation of the Sandiganbayan’s appreciation of the evidence
presented, including the credibility of witnesses and the probative value of their testimonies. The
petitioner likewise wants the Court to take a closer look into her claim that the charges against them
were politically motivated.

To our mind, the Sandiganbayan’s findings that: the testimonies of Gadian and Tangan were credible
and worthy of belief; WPI was an unregistered cooperative; the signatures of the petitioner and her co-
accused on the disbursement voucher were authentic; Remulta’s signature had been forged; and the
charges against the accused were not politically motivated, are questions of fact, as these matters
were resolved after a calibration of the pieces of evidence presented during trial. The Court will not

59
anymore weigh these pieces of evidence in the absence of a clear showing that these findings had been
arrived at arbitrarily or are devoid of support in the records.

At any rate, we hold that the Sandiganbayan correctly convicted the petitioner of the complex crime of
malversation of public funds through falsification of public documents.

Malversation may be committed by appropriating public funds or property; by taking or

misappropriating the same; by consenting, or through abandonment or negligence, by permitting any
other person to take such public funds or property; or by being otherwise guilty of the
misappropriation or malversation of such funds or property.19

The elements common to all acts of malversation under Article 217 of the Revised Penal Code, as
amended, are the following: (a) that the offender be a public officer; (b) that he had custody or control
of funds or property by reason of the duties of his office; (c) that those funds or property were public
funds or property for which he was accountable; and (d) that he appropriated, took, misappropriated
or consented, or through abandonment or negligence, permitted another person to take them. All
these elements have been established by the prosecution.

First, it is undisputed that all the accused, except Bahilidad, are all public officers. A public officer is
defined in the Revised Penal Code as "any person who, by direct provision of the law, popular election,
or appointment by competent authority, shall take part in the performance of public functions in the
Government of the Philippine Islands, or shall perform in said Government or in any of its branches
public duties as an employee, agent, or subordinate official, of any rank or class. Constantino was the
Vice-Governor of Sarangani Province, while the petitioner, Camanay, and Diaz were occupying the
positions of Executive Assistant (at the Office of the Vice-Governor), Provincial Accountant, and
Provincial Board Member, respectively.

Second, the funds misappropriated are public in character, as they were funds belonging to the
Province of Sarangani.

Third, Vice-Governor Constantino and Camanay were accountable public officers. Under the
Government Auditing Code of the Philippines, an accountable public officer is a public officer who, by
reason of his office, is accountable for public funds or property. The Local Government Code expanded
this definition with regard to local government officials. Section 340 of the LGC reads:

Section 340. Persons Accountable for Local Government Funds. – Any officer of the local government
unit whose duty permits or requires the possession or custody of local government funds shall be
accountable and responsible for the safekeeping thereof in conformity with the provisions of this title.
Other local officials, though not accountable by the nature of their duties, may likewise be similarly
held accountable and responsible for local government funds through their participation in the use or
application thereof. (Emphasis ours.)

Local government officials become accountable public officers either (1) because of the nature of their
functions; or (2) on account of their participation in the use or application of public funds.20

As a required standard procedure, the signatures of, among others, the Vice-Governor and the
Provincial Accountant are needed before any disbursement of public funds can be made. No checks can
be prepared and no payment can be effected without their signatures on a disbursement voucher and
the corresponding check. In other words, any disbursement and release of public funds require their
approval. Thus, Constantino and Camanay, in their capacities as Vice-Governor and Provincial
Accountant, had control and responsibility over the subject funds.

Finally, Vice-Governor Constantino and Camanay appropriated, took, misappropriated or consented, or

through abandonment or negligence, permitted another person to take the public funds when they
signed Disbursement Voucher No. 101-2002-01-822. The term voucher, when used in connection with
disbursement of money, implies some instrument that shows on what account or by what authority a
60
particular payment has been made, or that services have been performed which entitle the party to
whom it is issued to payment. Corollarily, when an authorized person approves a disbursement
voucher, he certifies to the correctness of the entries therein, among others: that the expenses
incurred were necessary and lawful, the supporting documents are complete, and the availability of
cash therefor. He also attests that the person who performed the services or delivered the supplies,
materials, or equipment is entitled to payment.21

Notably, the signatures of Camanayand Vice-Governor Constantino also appeared on the Allotment and
Obligation Slip (ALOBS) and in Land Bank Check No. 0000036481, respectively. Their respective
signatures in these documents allowed Bahilidad to encash ₱20,000.00. We also point out that
although the purported request was made by the WIP, the check was made payable to a private
person, that is, Bahilidad. According to Helen Cailing, the leader of the COA Special Audit Team, there
were no supporting documents attached to this disbursement voucher proving that Bahilidad was
indeed the treasurer of WIP.

We also agree with the Sandiganbayan’s ruling that falsification was a necessary means to commit the
crime of malversation. Article 171, paragraphs (2) and (5) of the Revised Penal Code, provides:

ART. 171. Falsification by public officer, employee or notary or ecclesiastic minister. - The penalty of
prision mayor and a fine not to exceed 5,000 pesos shall be imposed upon any public officer,
employee, or notary who, taking advantage of his official position, shall falsify a document by
committing any of the following acts:

xxxx

2. Causing it to appear that persons have participated in any act or proceeding when they did not in
fact so participate;

xxxx

In the present case, the records showed that the petitioner ordered Tangan to sign above the name of
Remulta in the letter-request to make it appear that the latter, as WIP Secretary, consented to the
request for financial assistance. We note, too, that this letter-request was made on January 24, 2002,
but Gadianante dated it to January 7, 2002, so that the transaction would not look suspicious
(considering that both the disbursement voucher and check were also dated January 24, 2002).

The Presence of Conspiracy

Conspiracy exists when two or more persons come to an agreement concerning the commission of a
felony and decide to commit it. Conspiracy does not need to be proven by direct evidence and may be
inferred from the conduct ―before, during, and after the commission of the crime ― indicative of a
joint purpose, concerted action, and concurrence of sentiments. In conspiracy, the act of one is the act
of all. Conspiracy is present when one concurs with the criminal design of another, as shown by an
overt act leading to the crime committed. It may be deduced from the mode and manner of the
commission of the crime.22

In the present case, the records established with moral certainty that the petitioner and her co-
accused acted in concert to achieve a common objective. The presence of conspiracy between the
petitioner and her co-accused was explained by the Sandiganbayan as follows:

xxxx

Moreover, the testimony of Gadian and Tangan indubitably established that accused Constantino and
Zoleta took advantage of their official positions. Zoleta ordered Gadian to make a request using a
nonexistent cooperative. She ordered Tangan to falsify the signature of Remulta in the request letter.
Both followed the directive of Zoleta, being their superior, the Executive Assistant and the daughter of

61
the Vice-Governor who places her initials before the Vice-Governor affixes his own signature. Despite
the irregularity, accused Constantino approved the disbursement. The facts taken together would
prove the existence of conspiracy. Zoleta, as president of an in existent association and a co-terminous
employee at the office of her father, initiated the request for obligation of allotments and certified and
approved the disbursement voucher. There is no doubt that Constantino facilitated the illegal release of
the fund by signing the questioned voucher. Without the signatures of accused Constantino, Zoleta,
and Bahilidad, the amount could not have been disbursed on that particular day. When the voucher
with its supporting documents was presented to accused Constantino, Diaz, and Camanay for approval
and signature, they readily signed them without further ado, despite the lack of proper documentation
and noncompliance of the rules. Zoleta had contact with the payee of the check, Bahilidad, and
received the amount. Their combined acts, coupled with the falsification of the signature of Remulta,
all lead to the conclusion that the accused conspired to defraud the government.

The concurrence of wills or unity of purpose and action between the accused is indubitable.1âwphi1 A
careful scrutiny of the records revealed that indeed: (a) the petitioner signed the letter-request for
financial assistance, and this was approved by Diaz and Vice-Governor Constantino; (b) the ALOBS was
signed by Camanay; (c) Disbursement Voucher No. 101-2002-01-822 was signed by Vice-Governor
Constantino, Diaz and Camanay; and (d) Land Bank Check No. 0000036481 was signed by Vice-
Governor Constantino.

The connivance between the accused is made more glaring by the fact that the entire transaction –
from the letter-request, to the approval of the disbursement voucher, until the processing and release
of the check – was completed in only one day. We note, too, that the disbursement had been approved
even without the required supporting documents such as the Articles of Cooperation and Certificate
from the Cooperative Development Authority. There was also noncompliance with the COA-prescribed
auditing and accounting guidelines on the release of fund assistance to NGOs, such as the required
monitoring and inspection report either by the Office of the Provincial Agriculturist or the Provincial
Engineering Office. As earlier stated, the purported request was made by WIP, but the check was made
payable to Bahilidad (despite the COA’s findings that there were no supporting documents proving that
she was WIP’s treasurer). We are aware that Bahilidad was acquitted by this Court in G.R. No.
18519523 – a case where she questioned her conviction by the Sandiganbayan. This does not preclude
us, however, from ruling that the other accused, i.e., Vice-Governor Constantino, Diaz, Camanay, and
the petitioner, conspired with each other to attain a common objective. We point out that Bahilidad’s
acquittal was anchored on the fact that she had no hand in the preparation, processing or disbursing of
the check issued in her name. It cannot be denied in the present case that the petitioner, Vice-
Governor Constantino, Diaz, and Camanay, all participated in the preparation and processing of
Disbursement Voucher No. 101-2002-01-82224 as evidenced by their respective signatures affixed
there. Sanggunian Panlalawigan Bookbinder25 Gadian, in fact, witnessed Vice-Governor Constantino,
Camanay, and Diaz sign these documents.

In Barriga v. Sandiganbayan,26 we ruled that:

It must be stressed that a public officer who is not in charge of public funds or property by virtue of
her official position, or even a private individual, may be liable for malversation or illegal use of public
funds or property if such public officer or private individual conspires with an accountable public officer
to commit malversation or illegal use of public funds or property.

III. No denial of due process

The petitioner claims that he was denied due process when the Sandiganbayan granted the
prosecution’s motion to amend certain portions of the pre-trial order without any hearing. In essence,
the petitioner argues that she could not be convicted of malversation through consent, abandonment,
or negligence because this allegation was not contained in the Information.

The petitioner’s argument lacks merit.

62
Malversation is committed either intentionally or by negligence. The dolo or the culpa present in the
offense is only a modality in the perpetration of the felony. Even if the mode charged differs from the
mode proved, the same offense of malversation is involved and conviction thereof is proper. All that is
necessary for conviction is sufficient proof that the accountable officer had received public funds, that
he did not have them in his possession when demand therefor was made, and that he could not
satisfactorily explain his failure to do so. Direct evidence of personal misappropriation by the accused is
hardly necessary as long as the accused cannot explain satisfactorily the shortage in his accounts.27

In People v. Consigna, et al.,28 the Court first ruled that an accused charged with wilful malversation
can be validly convicted of malversation through negligence where the evidence sustains the latter
mode of perpetrating the offense.

Similarly, in People v. Ochoa,29 the Court stated that [e]ven when the Information charges wilful
malversation, conviction for malversation through negligence may still be adjudged if the evidence
ultimately proves that mode of commission of the offense.

In Tubola, Jr. v. Sandiganbayan,30 we affirmed the accused’s conviction of malversation of public funds
under Article 217 of the Revised Penal Code, and reasoned out as follows:

Besides, even on the putative assumption that the evidence against petitioner yielded a case of
malversation by negligence but the information was for intentional malversation, under the
circumstances of this case his conviction under the first mode of misappropriation would still be in
order. Malversation is committed either intentionally or by negligence. The dolo or the culpa present in
the offense is only a modality in the perpetration of the felony. Even if the mode charged differs from
the mode proved, the same offense of malversation is involved and conviction thereof is proper. A
possible exception would be when the mode of commission alleged in the particulars of the indictment
is so far removed from the ultimate categorization of the crime that it may be said due process was
denied by deluding the accused into an erroneous comprehension of the charge against him. That no
such prejudice was occasioned on petitioner nor was he beleaguered in his defense is apparent from
the records of this case. (Underscoring and emphasis in the original.)

The Proper Penalty

We modify the maximum term of the penalty imposed on the petitioner by the Sandiganbayan, from
sixteen (16) years, five (5) months, and eleven (11) days to eighteen (18) years, two (2) months, and
twenty one (21) days of reclusion temporal, in accordance with Articles 48 and 21 7 of the Revised
Penal Code, as amended, in relation to the Indeterminate Sentence Law.31 WHEREFORE, in the light of
all the foregoing, we DENY the petition. Accordingly, we AFFIRM the November 5, 2008 decision of the
Sandiganbayan (Fourth Division) in Criminal Case No. 28326 with the MODIFICATION that the
maximum term of the penalty imposed on the petitioner be increased from sixteen ( 16) years, five
( 5) months, and eleven (11) days to eighteen (18) years, two (2) months and twenty one (21) days
of reclusion temporal.

SO ORDERED.

Carpio, (Chairperson), Mendoza, Perlas-Bernabe,* and Leonen, JJ., concur.

FIRST DIVISION

G.R. No. 184908               July 3, 2013

MAJOR JOEL G. CANTOS, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

63
VILLARAMA, JR., J.:

Petitioner Major Joel G. Cantos appeals the Decision1 of the Sandiganbayan in Criminal Case No. SB-
07-A/R-0008, which affirmed with modification the judgment2 of the Regional Trial Court (RTC) of
Manila, Branch 47, convicting him of the crime of Malversation of Public Funds under Article 217 of the
Revised Penal Code, as amended.

In an Information3 dated February 19, 2003, Major Cantos was charged as follows:

That on or about December 21, 2002 or sometime prior or subsequent thereto, in the City of Manila,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, a public
officer, being then the Commanding Officer of the 22"d Finance Service Center, based in the
Presidential Security Group, Malacañang Park, Manila and as such is accountable for public funds
received and/or entrusted to him by reason of his office, acting in relation to his office and taking
advantage of the same, did then and there, willfully, unlawfully and feloniously take, misappropriate
and convert to his personal use and benefit the amount of THREE MILLION TWO HUNDRED SEVENTY
THOUSAND PESOS (₱3,270,000.00), Philippine Currency, from such public funds received by him by
reason of his Office to the damage and prejudice of the Government in the aforestated amount.

CONTRARY TO LAW.

Upon motion by the prosecution, the trial court issued an Order4 granting the amendment of the date
of the commission of the offense from December 21, 2002 to December 21, 2000, the error being
merely clerical. When arraigned, Major Cantos entered a plea of not guilty.5

At the trial, the prosecution presented as witness Major Eligio T. Balao, Jr.6 He testified that on
December 21, 2000, he reported for duty as Disbursing Officer at the 22nd Finance Service Unit (FSU),
Presidential Security Group (PSG), Malacañang Park, Manila. At that time, he did not notice any
unusual incident in the office. He picked up some Bureau of Internal Revenue (BIR) forms which he
filed with the BIR Office at the Port Area, Manila. He returned to the office at around 10:00 a.m. At
around 12:00 noon, his commanding officer, Major Cantos, called him to his office and informed him
that the money he (Major Cantos) was handling, the Special Duty Allowance for the month of
December, and other Maintenance Operating Expenses in the amount of more or less ₱3 Million was
missing from his custody. Shocked, he asked Major Cantos where he kept the money, to which the
latter replied that he placed it in the steel cabinet inside his room. He then inquired why Major Cantos
did not use the safety vault, but Major Cantos did not reply.7

Major Balao further testified that Major Cantos asked him to get a screwdriver so he went out of the
office and got one from his vehicle. He gave the screwdriver to Major Cantos, who used it to unscrew
the safety vault. Then, he left the office and handed the screwdriver to Sgt. Tumabcao.

After a few minutes, Major Cantos instructed him to go to the house of Major Conrado Mendoza in
Taguig to get the safety vault’s combination number. However, Major Mendoza was not around. When
he returned to the office at around 4:00 p.m., the National Bureau of Investigation (NBI) personnel
took his fingerprints. He learned that all the personnel of the 22nd FSU were subjected to
fingerprinting. Thereafter, Col. Espinelli tried to force him to admit that he took the money, but he
maintained that he was not the one who took it.8

In his defense, Major Cantos testified that on July 2000, he was assigned as the Commanding Officer
of the 22nd FSU of the PSG, Malacañang Park, Manila. His duty was to supervise the disbursement of
funds for the PSG personnel and to perform other finance duties as requested by the PSG Commander,
Gen. Rodolfo Diaz. On December 19, 2000, he received a check from Director Aguas in the amount of
₱1,975,000 representing the Special Allowance of PSG personnel. Accompanied by two personnel, he
went to the Land Bank branch just across Pasig River and encashed the check. He placed the money in
a duffel bag and kept it inside the steel cabinet in his office together with the ₱1,295,000 that was

64
earlier also entrusted to him by Gen. Diaz. Major Cantos added that as far as he knows, he is the only
one with the keys to his office. Although there was a safety vault in his office, he opted to place the
money inside the steel cabinet because he was allegedly previously informed by his predecessor, Major
Conrado Mendoza, that the safety vault was defective. He was also aware that all personnel of the
22nd FSU had unrestricted access to his office during office hours.9

Major Cantos also narrated that on December 20, 2000, he arrived at the office at around 9:00 a.m.
and checked the steel filing cabinet. He saw that the money was still there. He left the office at around
4:00 p.m. to celebrate with his wife because it was their wedding anniversary. On the following day,
December 21, 2000, he reported for work around 8:30 a.m. and proceeded with his task of signing
vouchers and documents. Between 9:00 a.m. to 10:00 a.m., he inspected the steel cabinet and
discovered that the duffel bag which contained the money was missing. He immediately called then
Capt. Balao to his office and asked if the latter saw someone enter the room. Capt. Balao replied that
he noticed a person going inside the room, but advised him not to worry because he is bonded as
Disbursing Officer.10

In a state of panic, Major Cantos asked for Capt. Balao’s help in finding the money. Capt. Balao asked
him how the money was lost and why was it not in the vault, to which he replied that he could not put
it there because the vault was defective. Capt. Balao then suggested that they should make it appear
that the money was lost in the safety vault. In pursuit of this plan, Capt. Balao went out of the office
and returned with a pair of pliers and a screwdriver. Upon his return, Capt. Balao went directly to the
vault to unscrew it. At this point, Major Cantos told him not to continue anymore as he will just inform
Gen. Diaz about the missing funds. Major Cantos was able to contact Gen. Diaz through his mobile
phone and was advised to just wait for Col. Espinelli. When Col. Espinelli arrived at the office, Col.
Espinelli conducted an investigation of the incident.11

Lt. Col. Al I. Perreras, Executive Officer of the Judge Advocate General Office (JAGO), likewise
conducted an investigation of the incident. His testimony was however dispensed with as the counsels
stipulated that he prepared the Investigation Report, and that if presented, the same would be
admitted by defense counsel.12 It likewise appears from the evidence that Police Inspector Jesus S.
Bacani of the Philippine National Police (PNP) administered a polygraph examination on Major Cantos
and the result showed that he was telling the truth.13

On April 27, 2007, the RTC rendered a decision convicting Major Cantos of the crime charged, to wit:

WHEREFORE, in view of the foregoing premises, the Court finds the accused Major Joel G. Cantos
GUILTY beyond reasonable doubt of the crime of Malversation of Public Funds, under paragraph 4 of
Article 217 of the Revised Penal Code, and, there being no mitigating or aggravating circumstance
present, hereby sentences him to an indeterminate penalty of imprisonment for a period of ten (10)
years and one (1) day of Prision Mayor, as minimum, to Eighteen (18) Years, eight (8) months and one
(1) day of Reclusion Temporal, as maximum; to reimburse the AFP Finance Service Center, Presidential
Security Group, Armed Forces of the Philippines the amount of Three Million Two Hundred Seventy
Thousand Pesos (₱3,270,000.00); to pay a fine of Three Million Two Hundred Seventy Thousand Pesos
(₱3,270,000.00); to suffer perpetual special disqualification from holding any public office; and to pay
the costs.

SO ORDERED.14

In rendering a judgment of conviction, the RTC explained that although there was no direct proof that
Major Cantos appropriated the money for his own benefit, Article 217 of the Revised Penal Code, as
amended, provides that the failure of a public officer to have duly forthcoming any public funds or
property with which he is chargeable, upon demand by any duly authorized officer, shall be prima facie
evidence that he has put such missing funds or property to personal uses. The RTC concluded that
Major Cantos failed to rebut this presumption.

65
Aggrieved, Major Cantos appealed to the Sandiganbayan questioning his conviction by the trial court.

On July 31, 2008, the Sandiganbayan promulgated the assailed Decision, the dispositive portion of
which reads as follows:

IN VIEW OF THE FOREGOING, the Decision promulgated on May 3, 2007 in Criminal Case No. 03-
212248 of the Regional Trial Court, National Capital Judicial Region, Branch 47, Manila finding the
accused-appellant Major Joel G. Cantos GUILTY beyond reasonable doubt of the crime of Malversation
of Public Funds under Article 217 of the Revised Penal Code is hereby AFFIRMED, with the modification
that instead of being convicted of malversation through negligence, the Court hereby convicts the
accused of malversation through misappropriation. The penalty imposed by the lower court is also
likewise AFFIRMED.

SO ORDERED.15

The Sandiganbayan sustained the ruling of the RTC. It held that in the crime of malversation, all that is
necessary for conviction is proof that the accountable officer had received public funds and that he did
not have them in his possession when demand therefor was made. There is even no need of direct
evidence of personal misappropriation as long as there is a shortage in his account and petitioner
cannot satisfactorily explain the same. In this case, the Sandiganbayan found petitioner liable for
malversation through misappropriation because he failed to dispute the presumption against him. The
Sandiganbayan noted that petitioner’s claim that the money was taken by robbery or theft has not
been supported by sufficient evidence, and is at most, self-serving.

Contending that the Sandiganbayan Decision erred in affirming his convicting, Major Cantos filed a
motion for reconsideration. In its Resolution16 dated October 6, 2008, however, the Sandiganbayan
denied the motion.

Hence, the present petition for review on certiorari. Petitioner assails the Decision of the
Sandiganbayan based on the following grounds:

I.

THE HONORABLE SANDIGANBAYAN ERRED IN AFFIRMING PETITIONER'S CONVICTION FOR

MALVERSATION DESPITE ABSENCE OF EVIDENCE SHOWING THAT THE FUNDS WERE CONVERTED TO
THE PERSONAL USE OF PETITIONER.

II.

THE HONORABLE SANDIGANBAYAN ERRED IN AFFIRMING PETITIONER'S CONVICTION ON THE BASIS

OF THE MERE PRESUMPTION CREATED BY ARTICLE 217, PARAGRAPH 4, OF THE REVISED PENAL CODE
IN VIEW OF THE ATTENDANT CIRCUMSTANCES IN THE PRESENT CASE.17

Essentially, the basic issue for our resolution is: Did the Sandiganbayan err in finding petitioner guilty
beyond reasonable doubt of the crime of malversation of public funds?

Petitioner argues that mere absence of funds is not sufficient proof of misappropriation which would
warrant his conviction. He stresses that the prosecution has the burden of establishing his guilt beyond
reasonable doubt. In this case, petitioner contends that the prosecution failed to prove that he
appropriated, took, or misappropriated, or that he consented or, through abandonment or negligence,
permitted another person to take the public funds.

On the other hand, the People, represented by the Office of the Special Prosecutor (OSP), argues that
petitioner, as an accountable officer, may be convicted of malversation of public funds even if there is
no direct evidence of misappropriation. The OSP asserts that the only evidence required is that there is
a shortage in the officer’s account which he has not been able to explain satisfactorily.

66
The petition must fail.

The Sandiganbayan did not commit a reversible error in its decision convicting petitioner of
malversation of public funds, which is defined and penalized under Article 217 of the Revised Penal
Code, as amended, as follows:

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:

xxxx

4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is
more than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds
the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special
disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the
property embezzled.

The failure of a public officer to have duly forthcoming any public funds or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put
such missing funds or property to personal use. (Emphasis and underscoring supplied.)

Thus, the elements of malversation of public funds under Article 217 of the Revised Penal Code are:

1. that the offender is a public officer;

2. that he had the custody or control of funds or property by reason of the duties of his office;

3. that those funds or property were public funds or property for which he was accountable; and

4. that he appropriated, took, misappropriated or consented or, through abandonment or negligence,

permitted another person to take them.18

We note that all the above-mentioned elements are here present. Petitioner was a public officer
occupying the position of Commanding Officer of the 22nd FSU of the AFP Finance Center, PSG. By
reason of his position, he was tasked to supervise the disbursement of the Special Duty Allowances
and other Maintenance Operating Funds of the PSG personnel, which are indubitably public funds for
which he was accountable. Petitioner in fact admitted in his testimony that he had complete control
and custody of these funds. As to the element of misappropriation, indeed petitioner failed to rebut the
legal presumption that he had misappropriated the fees to his personal use.

In convicting petitioner, the Sandiganbayan cites the presumption in Article 217 of the Revised Penal
Code, as amended, which states that the failure of a public officer to have duly forthcoming any public
funds or property with which he is chargeable, upon demand by any duly authorized officer, is prima
facie evidence that he has put such missing fund or property to personal uses. The presumption is, of
course, rebuttable. Accordingly, if petitioner is able to present adequate evidence that can nullify any
likelihood that he put the funds or property to personal use, then that presumption would be at an end
and the prima facie case is effectively negated.

In this case, however, petitioner failed to overcome this prima facie evidence of guilt.1âwphi1 He failed
to explain the missing funds in his account and to restitute the amount upon demand. His claim that
the money was taken by robbery or theft is self-serving and has not been supported by evidence. In
fact, petitioner even tried to unscrew the safety vault to make it appear that the money was forcibly
67
taken. Moreover, petitioner’s explanation that there is a possibility that the money was taken by
another is belied by the fact that there was no sign that the steel cabinet was forcibly opened. We also
take note of the fact that it was only petitioner who had the keys to the steel cabinet. 19 Thus, the
explanation set forth by petitioner is unsatisfactory and does not overcome the presumption that he
has put the missing funds to personal use.

Malversation is committed either intentionally or by negligence. The dolo or the culpa present in the
offense is only a modality in the perpetration of the felony. Even if the mode charged differs from the
mode proved, the same offense of malversation is involved and conviction thereof is proper.20 All that
is necessary for conviction is sufficient proof that the accountable officer had received public funds,
that he did not have them in his possession when demand therefor was made, and that he could not
satisfactorily explain his failure to do so. Direct evidence of personal misappropriation by the accused is
hardly necessary as long as the accused cannot explain satisfactorily the shortage in his accounts.21 To
our mind, the evidence in this case is thoroughly inconsistent with petitioner's claim of innocence.
Thus, we sustain the Sandiganbayan's finding that petitioner's guilt has been proven beyond
reasonable doubt.

WHEREFORE, the petition is DENIED. The Decision dated July 31, 2008 of the Sandiganbayan in
Criminal Case No. SB-07-A/R-0008 convicting Major Joel G. Cantos of the crime of Malversation of
Public Funds is AFFIRMED and UPHELD.

With costs against the petitioner.

SO ORDERED.

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Reyes, JJ., concur.

THIRD DIVISION

G.R. No. 178626               June 13, 2012

CECILIA U. LEGRAMA, Petitioner,
vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari assailing the Decision1 dated January 30, 2007 of the
Sandiganbayan in Criminal Case No. 25204 finding petitioner guilty of the crime of Malversation of
Public Funds, and the Resolution2 dated May 30, 2007 denying petitioner’s motion for reconsideration.

The factual and procedural antecedents are as follows:

On September 5, 1996, the Office of the Provincial Auditor of the Commission on Audit (COA) for the
Province of Zambales issued PAO Office No. 96-093 directing an Audit Team composed of State Auditor
1 Virginia D. Bulalacao, State Auditor 1 Teresita Cayabyab and Auditing Examiner II Lourdes Castillo,
to conduct an examination of the cash and account of petitioner Cecilia Legrama, the Municipal
Treasurer of the Municipality of San Antonio, Zambales.

After the audit, the COA prepared a Special Cash Examination Report on the Cash and Accounts of Ms.
Cecilia U. Legrama4 dated October 1, 1996. The report contained the findings that petitioner’s cash

68
accountability was short of ₱289,022.75 and that there was an unaccounted Internal Revenue
Allotment (IRA) in the amount of ₱863,878.00, thereby showing a total shortage in the amount of
₱1,152,900.75. Included in the shortage is the amount of ₱709,462.80, representing the total amount
of various sales invoices, chits, vales, and disbursement vouchers, 5 which were disallowed in the audit
for lack of supporting documents. From the total amount of the shortage, petitioner was able to
restitute the initial amount of ₱60,000.00,6

Consequently, petitioner and Romeo D. Lonzanida (Lonzanida), the Municipal Mayor of San Antonio,
Zambales at the time the audit was conducted, were charged in an Information7 dated December 15,
1998 with the crime of Malversation of Public Funds. The accusatory portion of which reads:

That on or about October 1, 1996 and for sometime prior or subsequent thereto, in the Municipality of
San Antonio, Province of Zambales, Philippines and within the jurisdiction of this Honorable tribunal,
the above named accused ROMEO D. LONZANIDA, being then Municipal Mayor of San Antonio,
Zambales, in connivance and conspiracy with co-accused CECILIA U. LEGRAMA, being then Municipal
Treasurer of San Antonio, Zambales, who, as such, is accountable for public funds received and/or
entrusted to her by reason of her office, both, while in the performance of their respective official
functions, taking advantage of their official positions, and committing the offense in relation to their
respective functions, did then and there, wilfully, unlawfully, feloniously and with grave abuse of
confidence, take, misappropriate and convert to their personal use and benefit, the amount of
₱1,152,900.758 from such public funds, to the damage of the government, in the aforesaid amount.

CONTRARY TO LAW.

Both petitioner and Lonzanida voluntarily surrendered and posted their respective cash bonds.

Upon arraignment, petitioner and Lonzanida pleaded not guilty to the offense charged; hence, trial on
the merits ensued.

To establish its case, the prosecution presented the testimony of the Audit Team leader, Virginia D.
Bulalacao. On the other hand, the defense presented both the testimonies of petitioner and Lonzanida.
After the parties have submitted their respective pleadings and evidence, the Sandiganbayan rendered
a Decision9 acquitting Lonzanida. However, the tribunal concluded that petitioner malversed the total
amount of ₱1,131,595.05 and found her guilty of the crime of Malversation of Public Funds and
sentenced her accordingly the dispositive portion of the Decision reads:

WHEREFORE, premises considered, for failure of the prosecution to prove his guilt beyond reasonable
doubt, accused ROMEO D. LONZANIDA, is hereby acquitted of the instant crime charged.

The Hold Departure Order issued against him is hereby ordered lifted. The cash bond which he posted
to obtain his provisional liberty is hereby ordered returned to him subject to the usual auditing and
accounting procedures.

Accused CECILIA U. LEGRAMA is hereby declared guilty beyond reasonable doubt of the crime of
Malversation of Public Funds.

The amount involved in the instant case is more than Php22,000.00. Hence, pursuant to the provisions
of Article 217 of the Revised Penal Code, the penalty to be imposed is reclusion temporal in its
maximum period to reclusion perpetua.

Considering the absence of any aggravating circumstance and the presence of two mitigating
circumstances, viz., accused Legrama’s voluntary surrender and partial restitution of the amount
involved in the instant case, and being entitled to the provisions of the Indeterminate Sentence Law,
she is hereby sentenced to suffer an indeterminate penalty of 4 years, 2 months and 1 day of prision
correccional, as minimum, to 10 years and 1 day of prision mayor, as maximum.

69
Further, she is ordered to pay the amount of Php299,204.65, representing the balance of her incurred
shortage after deducting therein the restituted amount of Php832,390.40 and the Php200.00 covered
by an Official Receipt dated August 18, 1996 issued in the name of the Municipality of San Antonio
(Exhibit "22"). She is also ordered to pay a fine equal to the amount malversed which is
Php1,131,595.05 and likewise suffer the penalty of perpetual special disqualification and to pay costs.

SO ORDERED.10

In convicting petitioner of the crime charged against her, the Sandiganbayan concluded that the
prosecution established all the elements of the crime of malversation of public funds. Although
petitioner was able to restitute the total amount of ₱832,390.40, 11 petitioner failed to properly explain
or justify the shortage in her accountability. However, the same conclusion against petitioner’s co-
accused was not arrived at by the court, considering that there was no evidence presented to prove
that he conspired with the petitioner in committing the crime charged.

Petitioner filed a Motion for Reconsideration,12 but it was denied in the Resolution13 dated May 30, 2007.

Hence, the petition assigning the following errors:

I.

THE HONORABLE SANDIGANBAYAN ERRED AND GRAVELY ABUSED ITS DISCRETION IN CONVICTING
THE ACCUSED CECILIA U. LEGRAMA BEYOND REASONABLE DOUBT OF THE CRIME OF MALVERSATION
AND IN DIRECTING THE ACCUSED TO PAY THE AMOUNT OF PHP299,204.65 AND A FINE EQUAL TO
THE AMOUNT MALVERSED WHICH IS PHP1,131,595.05.

II.

THE HONORABLE SANDIGANBAYAN ERRED AND GRAVELY ABUSED ITS DISCRETION IN CONVICTING
THE ACCUSED CECILIA U. LEGRAMA BEYOND REASONABLE DOUBT OF THE CRIME OF MALVERSATION
IN NOT FINDING THAT SHE SUCCEEDED TO OVERTHROW THE PRIMA FACIE EVIDENCE OF
CONVERSION/MISAPPROPRIATION UNDER ARTICLE 217 OF THE REVISED PENAL CODE AND IN
REJECTING HER EXPLANATION AS REGARDS THE VOUCHERS AND "VALE."14

Petitioner argues that the Sandiganbayan failed to consider the testimonial and documentary exhibits
presented to support her claim that she did not appropriate or misappropriate for her use and benefit
the subject fund nor did she allow her co-accused to use the said fund without the proper
acknowledgment such as receipts, vales or sign chits. Petitioner maintains that she has satisfactorily
explained the shortage on the basis of the documentary evidence submitted.

As for her failure to make the necessary liquidation of the amount involved, petitioner posits that this
is not attributable to her, considering that before she could make the proper liquidation, she was
already relieved from duty and was prevented by the COA team from entering her office.

On its part, respondent maintains that petitioner’s failure to account for the shortage after she was
demanded to do so is prima facie proof that she converted the missing funds to her personal use. It
insists that the prosecution has sufficiently adduced evidence showing that all the elements of the
crime of Malversation of public funds are present in the instant case and that it was proper for the
Sandiganbayan to convict her of the crime charged.

The petition is bereft of merit.

Malversation of public funds is defined and penalized in 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
70
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:

1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in
the misappropriation or malversation does not exceed 200 pesos.

2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more
than 200 pesos but does not exceed 6,000 pesos.

3. The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if
the amount involved is more than 6,000 pesos but is less than 12,000 pesos.

4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is
more than 12,000 pesos but is less than 22,000 pesos. If the amount exceeds the latter, the penalty
shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special
disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the
property embezzled.

The failure of a public officer to have duly forthcoming any public funds or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put
such missing funds or property to personal use.

Malversation may be committed by appropriating public funds or property; by taking or

misappropriating the same; by consenting, or through abandonment or negligence, by permitting any
other person to take such public funds or property; or by being otherwise guilty of the
misappropriation or malversation of such funds or property.15 The essential elements common to all
acts of malversation under Article 217 of the Revised Penal Code are:

(a) That the offender be a public officer;

(b) That he had the custody or control of funds or property by reason of the duties of his office;

(c) That those funds or property were public funds or property for which he was accountable; and

(d) That he appropriated, took, misappropriated or consented, or through abandonment or negligence,

permitted another person to take them.

More importantly, in malversation of public funds, the prosecution is burdened to prove beyond
reasonable doubt, either by direct or circumstantial evidence, that the public officer appropriated,
misappropriated or consented, or through abandonment or negligence, permitted another person to
take public property or public funds under his custody. Absent such evidence, the public officer cannot
be held criminally liable for malversation. Mere absence of funds is not sufficient proof of conversion;
neither is the mere failure of the public officer to turn over the funds at any given time sufficient to
make even the prima facie case. In fine, conversion must be proved. However, an accountable officer
may be convicted of malversation even in the absence of direct proof of misappropriation so long as
there is evidence of shortage in his account which he is unable to explain.16

Under Article 217, a presumption was installed that upon demand by any duly authorized officer, the
failure of a public officer to have duly forthcoming any public funds or property – with which said
officer is accountable – should be prima facie evidence that he had put such missing funds or
properties to personal use. When these circumstances are present, a "presumption of law" arises that
there was malversation of public funds or properties as decreed by Article 217.17 To be sure, this
presumption is disputable and rebuttable by evidence showing that the public officer had fully
accounted for the alleged cash shortage.
71
In the case at bar, after the government auditors discovered the shortage and informed petitioner of
the same,18 petitioner failed to properly explain or justify the shortage that was subject to her
accountability. Petitioner denied that she put the amount involved to personal use and presented
various sales invoice, chits, vale forms, and disbursement voucher to prove her claim.19 Petitioner even
went further by testifying that the total amount of ₱681,000.00 appearing in a disbursement
voucher20 were cash advances given to the mayor during the height of the Mt. Pinatubo eruption.
However, the date when the eruption occurred was way before the period subject of the audit. As aptly
found by the court a quo:

This Court takes judicial notice that the Mt. Pinatubo erupted in June 1991, and has not erupted again
up to the present.1âwphi1 As stated earlier, the COA audit conducted on the account of accused
Legrama covers the financial transactions of the municipality from June 24, 1996 to September 4,
1996. Therefore, the said cash advances, which accused Legrama confirmed were given to accused
Lonzanida "during the height of the Mt. Pinatubo eruption," which occurred five years before the
subject audit, are not expenses of the municipality during the period of audit covered in the instant
case. As it is, it has been disallowed by the COA for lack of necessary supporting papers. Even if the
said disbursement voucher had been completely accomplished, and granting that all the necessary
supporting documents had been attached thereto, it would nonetheless be disallowed because it covers
a transaction which is not subject of the audit.21

xxxx

In her defense, accused Legrama testified that except for the expenses she incurred for her official
travels, she did not put the amount involved in the instant case to personal use. As proof of her claim,
she produced and painstakingly identified in open court each and every sales invoice, chit, vale and the
disbursement voucher which are likewise the evidence of the prosecution marked as Exhibits "B-3" to
"B-3NN" (Exhibits "1" to "1-NN") and in addition, presented various sales invoice, chit and vale form
marked as Exhibits "3" to "72," all in the total amount of Php1,169,099.22, an amount more than what
is involved in the instant indictment.22

To reiterate, the subject of the audit from which the instant case stemmed from are financial
transactions of the municipality from June 24, 1996 to September 4, 1996. Therefore, official receipts,
chits or vales, even if they are in the name of the municipality, but nonetheless issued to it for
transactions as far back as the year 1991 are immaterial to the instant case. It is sad and even
deplorable that accused Legrama, in an attempt to extricate herself from liability, tried to deceive this
Court in this manner. Having obtained a degree in Bachelor of Science Major in Accounting and being
the municipal treasurer for eight (8) years, accused Legrama is presumed to be aware that she
knowingly attempted to deceive this Court.23

Undoubtedly, all the elements of the crime are present in the case at bar. First, it is undisputed that
petitioner was the municipal treasurer at the time material to this case. Second, it is the inherent
function of petitioner, being the municipal treasurer, to take custody of and exercise proper
management of the local government’s funds. Third, the parties have stipulated during the pre-trial of
the case that petitioner received the subject amount as public funds 24 and that petitioner is accountable
for the same.25 Fourth, petitioner failed to rebut the prima facie presumption that she has put such
missing funds to her personal use.

Verily, in the crime of malversation of public funds, all that is necessary for conviction is proof that the
accountable officer had received the public funds and that he failed to account for the said funds upon
demand without offering sufficient explanation why there was a shortage. In fine, petitioner’s failure to
present competent and credible evidence that would exculpate her and rebut the prima facie
presumption of malversation clearly warranted a verdict of conviction.

72
As for the appropriate penalty, since the amount involved is more than ₱22,000.00, pursuant to the
provisions of Article 217 of the Revised Penal Code, the penalty to be imposed is reclusion temporal in
its maximum period to reclusion perpetua.

However, as aptly concluded by the Sandiganbayan, petitioner enjoys the mitigating circumstances of
voluntary surrender and restitution. Although restitution is akin to voluntary surrender, 26 as provided
for in paragraph 727 of Article 13, in relation to paragraph 1028 of the same Article of the Revised Penal
Code, restitution should be treated as a separate mitigating circumstance in favor of the accused when
the two circumstances are present in a case, which is similar to instances where voluntary surrender
and plea of guilty are both present even though the two mitigating circumstances are treated in the
same paragraph 7, Article 13 of the Revised Penal Code.29 Considering that restitution is also
tantamount to an admission of guilt on the part of the accused, it was proper for the Sandiganbayan to
have considered it as a separate mitigating circumstance in favor of petitioner.

Taking into consideration the absence of any aggravating circumstance and the presence of two
mitigating circumstance, i.e., petitioner’s voluntary surrender and partial restitution of the amount
malversed,30 the prescribed penalty is reduced to prision mayor in its maximum period to reclusion
temporal in its medium period, which has a range of ten (10) years and one (1) day to seventeen (17)
years and four (4) months. In accordance with paragraph 1, Article 64 of the Revised Penal Code31 and
considering that there are no other mitigating circumstance present, the maximum term should now be
the medium period of prision mayor maximum to reclusion temporal medium, which is reclusion
temporal minimum and applying the Indeterminate Sentence Law, the minimum term should be
anywhere within the period of prision correccional maximum to prision mayor medium. Hence, the
penalty imposed needs modification. Accordingly, petitioner is sentenced to suffer the indeterminate
penalty of four (4) years, two (2) months and one (1) day of prision correccional, as minimum, to
twelve (12) years, five (5) months and eleven (11) days of reclusion temporal, as maximum.

WHEREFORE, premises considered, the petition is DENIED. The Decision dated January 30, 2007 and
the Resolution dated May 30, 2007 of the Sandiganbayan are AFFIRMED with MODIFICATION.
Petitioner is hereby sentenced to suffer the indeterminate penalty of four (4) years, two (2) months
and one (1) day of prision correccional, as minimum term, to twelve (12) years, five (5) months and
eleven (11) days of reclusion temporal, as maximum term.

SO ORDERED.

Abad, Villarama, Jr.,** Mendoza, and Perlas-Bernabe, JJ., concur.

Peralta, J., (Acting Chairperson),*

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:
73
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 41-80-12-441 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

74
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:

75
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)

76
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

77
particularly provided for by law or ordinance. There is no dispute that the money was spent for a public
purpose—payment 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, Griño-
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

78
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.1âwphi1 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

x x x           x x x          x x x

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

x x x           x x x          x x x

3.6. Barangay Roads P397,232,000

x x x           x x x          x x x

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

x x x           x x x          x x x

5.4. Barangay Roads and Bridges P239,288,000

x x x           x x x          x x x

79
(Emphasis supplied)

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 Code.

FIRST DIVISION

G.R. No. 162489               June 17, 2015

BERNARDO U. MESINA, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

BERSAMIN, J.:

Under review is the decision promulgated on July 24, 2003,1 whereby the Court of Appeals (CA)
affirmed with modification the judgment rendered by the Regional Trial Court (RTC), Branch 120, in
Caloocan City convicting the petitioner of malversation as defined and penalized under Article 217,
paragraph 4 of the Revised Penal Code.2

Antecedents

On July 9, 1998, an information was filed in the RTC charging the petitioner with qualified theft. Upon
his motion, he was granted a reinvestigation. On September 17, 1998, after the reinvestigation, an
amended information was filed charging him instead with malversation of public funds, the amended
information alleging thusly:

That on or about the 6th day of July 1998, in Caloocan City, Metro Manila, and within the jurisdiction of
this Honorable Court, the said above-named accused, being then an employee of [the] City Treasurer's
Office, Caloocan City, and acting as Cashier of said office, and as such was accountable for the public
funds collected and received by him (sic) reason of his position, did then and there willfully, unlawfully
80
and feloniously misappropriated, misapplied and embezzled and convert to his 0~11personal use and
benefit said funds in the sum of ₱167,876.90, to the damage and prejudice of the City Government of
Caloocan in the aforementioned amount of ₱167,876.90.

CONTRARY TO LAW.3

The CA adopted the RTC's summary of the facts, as follows:

x x x that in the afternoon of July 6, 1998 between 1 :00 and 2:00 o'clock, herein accused Bernardo
Mesina then Local Treasurer Officer I of the Local Government of Caloocan City went to the so called
Mini City Hall located at Carnarin Road, District I, Caloocan City for purposes of collection. While
thereat, Ms. Rosalinda Baclit, Officer-In-Charge of collection at said onice, turned over/remitted to
Mesina the weeks' collection for the period covering the month of June 1998 representing, among
others, the Market Fees' collection, Miscellaneous fees, real property taxes, Community Tax Receipts
(cedula) and the 'Patubig' (local water system) collection all amounting to ₱468,394.46 (Exhs. 'K' and
'K-2', 'L' - 'L-2', 'M', 'M-2', 'N' - 'N-2', 'O' - '0-2', 'P' - 'P-2', 'Q' - 'Q-2', 'R', 'R-2', 'S' -· 'S-2', 'T' - 'T0-2',
'U' - 'U-2', 'V' - 'V-2', 'W', 'W-2', 'X' -- 'X-2', and 'Y' - 'Y-2'). After counting the cash money, the (sic)
were bundled and placed inside separate envelopes together with their respective liquidation
statements numbering about thirteen (13) pieces signed by both Ms. Irene Manalang, OIC of the Cash
Receipt Division, and herein accused Mesina acknowledging receipt and collection thereof (Exhs, 'K-1 ',
'M-3', 'N-3', 'P-3', 'Q-3', 'R-3', T-3', 'U-3', 'V-3', 'W-3 ', 'X-3 ', and 'Y-3 '). Thereafter, Bernardo Mesina
together with his driver left the Mini City I-Jail and proceeded to City Hall Main.

Later that same afternoon, Ms. Baclit received several phone calls coming from the Main City Hall. At
around 3:00 o'clock, Mrs. Josie Sanilla, secretary of City Treasurer Carolo V. Santos, called up the Mini
City Hall confirming the collection of the 'Patubig' by Mr. Bernardo Mesina. Thirty (30) minutes
thereafter, Mrs. Elvira Coleto, Local Treasurer Operation Officer II of the Main City Hall called up to
inform Ms. Baclit that the supposed 'Patubig' collection amounting to P.167,870.90 (Exh. 'K-2') was not
remitted. Also, Bernardo Mesina phoned Ms. Baclit telling the latter that he did not receive the 'Patubig'
collection. Alarmed by these telephone calls she just received, Ms. Baclit then immediately consulted
the documents/liquidation statements supposedly signed by Mesina acknowledging receipt and
collection thereof, however, all efforts to locate and retrieved (sic) these records proved futile at that
moment.

Meanwhile, City Treasurer Carolo V. Santos, after having been informed by Mrs. Irene Manalang of the
discrepancy in the collection, summoned both Ms. Baclit and Bernardo Mesina to his office at the Main
City Hall for an inquiry relative to the missing ₱167,870.90 'Patubig' collection. And as the two (2),
Baclit and Mesina, insisted on their respective versions during said confrontation, City Treasurer
Santos, in the presence of the Chief of the Cash Disbursement Division, Administrative Officers and
Local Treasurer's Operation Officer II Mrs. Coleto, then ordered Mesina's vault scaled pending further
investigation.

The following morning July 7, 1998, Caloocan City Mayor Reynaldo O. Malonzo called for an immediate
probe of the matter. Present during the investigation at the Mayor's Office were Ms. Baclit, accused
Bernardo Mesina, City Auditor Chito Ramirez, City Treasurer Santos as well as the representative from
the different offices concerned. Again, when asked by Mayor Malonzo as to whether or not [t]he
'Patubig' collection was collected and/or remitted, Mesina stood fast in his denial of having received the
same; Ms. Baclit on the other hand positively asserted the remittance and collection thereof by
Bernardo Mesina.

Thereafter, they all proceeded to the cashier's room where Mesina had his safe and thereat, in the
presence of COA State Auditor III Panchito Fadera, Cashier IV-CTO Fe. F. Sanchez, Administrative
Officer IV Lourdes Jose, LTOO II Elvira M. Coleto, accused Bernardo Mesina and LTOO II Rosalinda
Baclit, Mesina's vault was opened and a cash count and/or physical count of the contents thereof was
conducted. Found inside were the following, to wit: I) coins amounting to ₱107.15; 2) coins amounting
81
to ₱50.47; 3) coins amounting to ₱127.00; 4) coins amounting to ₱64.1 O; 5) cash with tape
amounting to ₱770.00; 6) spoiled bills amounting to ₱440.00; 7) bundled bills amounting to
₱20,500.00. Also found inside were the Report of Collection by the Liquidating Officer (RCLO) in the
amount of ₱123,885.55 as well as the original and duplicate copies of the daily sum of collections of
accountable form under the name of one Racquel Ona dated March 31, 1998 amounting to
₱123,885.55 (six (6) copies of vales/chits) Exhs. 'Z', 'Z-1' and 'Z-2'). In addition thereto, the cash
amount of ₱67,900.00 then withheld by the City Cashier pending this investigation, was turned over to
the said auditing team, thus, the total cash money audited against accused Mesina amounted to
₱89,965.72 (sic) (Exhs. 'BB' and 'BB-1').

In the afternoon of July 7, 1998, at about 5:00 o'clock, Mses. Rosalinda Baclit and Maria Luisa Canas
all went to the SID Caloocan City Police Station to have their separate sworn statements taken (Exhs.
'E', 'E-1 ', 'D', 'D-1 ', 'F', and 'F-1 '). Mmes. Lorna Palomo-Cabal, Divina Dimacali-Sarile and Victoria
Salita Vda. De Puyat likewise executed a joint sworn affidavit (Exhs. 'G', 'G-1', 'G-2', and 'G-3') in
preparation for the filing of appropriate criminal charge against Bernardo Mesina.

The following day, July 8, 1998, Mamerto M. Manahan, Panchito Fadera and Carolo V. Santos also
executed their respective affidavits in relation to the incidents at bar (Exhs. 'A', 'A-1 ', 'A-2'; Exhs. 'B',
and 'B-1'; Exhs. 'C', and 'C-1'). Meanwhile, the statement of collection supposedly signed by accused
Mesina was finally recovered at Rosalinda Baclit's desk hidden under a pile of other documents. (Rollo,
pp. 74-75)4

The Defense presented the oral testimony of the petitioner and documentary evidence. 5 He admitted
collecting the total amount of ₱468,394.46 from Baclit, including the subject patubig collection totaling
to ₱167,976.90, but adamantly denied misappropriating, misapplying, and embezzling the patubig
collection, maintaining that the patubig collection was found complete in his vault during the
inspection. He explained that he deliberately kept the collection in his vault upon learning that his wife
had suffered a heart attack and had been rushed to the hospital for immediate medical treatment. He
believed that he did not yet need to remit the amount to the OIC of the Cash Receipt Division because
it was still to be re-counted. He claimed that when he returned to the Main City Hall that same day his
vault was already sealed.6 He said that the accusation was politically motivated. In support of his claim
of innocence, he cited his numerous awards and citations for honesty and dedicated public service.7

On November 8, 2001, the RTC found the petitioner guilty beyond reasonable doubt of the crime of
malversation, disposing:

WHEREFORE, premises considered, this Court finds the accused BERNARDO MESINA Y UMALI guilty
beyond reasonable doubt of the crime of Malversation as defined and penalized under Article 217
paragraph 4 of the Revised Penal Code and hereby sentences him to suffer an indeterminate penalty of
twelve (12) years and one (1) day of prision mayor as minimum to twenty (20) years of reclusion
temporal as maximum.

The Court further imposes a penalty of perpetual disqualification to hold public office and a fine of
₱167,876.90 upon the accused.

SO ORDERED.8

On July 24, 2003, the CA affirmed the RTC's decision, with modification as to the amount of fine
imposed,9 decreeing:

WHEREFORE, foregoing premises considered, the Decision dated November 8, 2001 of the Regional
Trial Court, Branch 120, Caloocan City in Criminal Case No. C-54217 is affirmed with modification in
the sense that the fine is reduced from 1!167,876.98 to ₱37,876.98. Costs against accused-appellant.

SO ORDERED.

82
Issues

In his appeal, the petitioner submits for consideration the following:

I. WHETHER THE COURT OF APPEALS ERRED IN AFFIRMING WITH MODIFICATION THE CONVICTION
OF PETITIONER ACCUSED-APPELLANT OF THE CRIME OF MAL VERSA TION NOTWITHSTANDING THAT:

a. it had admitted in evidence the testimony of prosecution witness ELVIRA COLITO that she saw,
when accused-appellant 's vault was opened, to have seen (sic) the bundles of the missing Patubig
collections of more than Ps130,000.00 (sic), and thus, in effect, there was no misappropriation, as one
of the elements of the crime of malversation;

b. that it erred and completely misapprehended and failed to appreciate the true meaning of the
testimony of the said witness of seeing inside the vault more than Ps130, 000. 00 in bundles by
treating/and/or (sic) appreciating the same as exactly Ps130, 000. 00 flat without appreciating the
words more than, thus guilty of erroneous inference surmises and conjectures; c. that it overlooked
and completely disregarded that inside the vault was the sum of Ps20,500.00 in bundles also [Exh. "BB
and B-1 "j regarding contents of the vault or the total sum of Ps22, 065. 72 testified to by Panchito
Madera (sic), Head of the Audit Team;

d. the Court of Appeals gravely erred to surmise and at least look on the lack from the lists of
inventories of the vault the more than Ps130,000.00 in bundles and why it was not listed among the
moneys found inside the accused-appellant 's vault;

e. doubts and inconsistencies existing therefrom shall remained (sic) favorable to the accused-
appellant pursuant to applicable jurisprudence;

II. THAT THE COURT OF APPEALS ERRED ON A (SIC) QUESTIONS OF LAW, THAT THE INVESTIGATION
CONDUCTED BY THE GROUP OF MAYOR MALONZO, THE TREASURER, THE ADMINISTRATOR, THE CITY
AUDITOR, CHIEF OF DIVISIONS AND THE AUDIT PROCEEDINGS ARE NULL AND VOID DUE:

A. Accused-appellant was not informed of his constitutional right to assistance of counsel as mandated
by the Constitution;

B. The audit proceedings did not comply strictly with the Manual of Instructions to Treasurers and
Auditors and other Guidelines, thus null and void,'

C. Thus, the presumption of juris tantum in Art. 127 of the Revised Penal Code is overcome firmly
supported by the discovery of the missing money and further the conclusions of the Court of Appeals
was against established jurisprudence enunciated in the case of TINGA vs.

PEOPLE OF THE PHILIPPINES, No. L-57650, [160 SCRA 483};

III. WHETHER THE COURT OF APPEALS WAS FATALLY WRONG IN NOT APPL YING EVIDENCE OF GOOD
MORAL CHARACTER TO ACQUIT AND EXONERATE PETITIONER ACCUSED-APPELLANT IN VIOLATION
OF RULE 130, SEC. 46, OF THE RULES OF COURT. A. Notwithstanding, not only are the evidence weak,
but its findings or discovery of "more than Ps130,000.00 inside the vault is subject to double
interpretations, and/or double alternative or probabilities, thus the presumption of innocence will be
adopted.10

Ruling of the Court

The appeal has no merit.

The crime of malversation of public funds charged herein is defined and penalized under Article 217 of
the Revised Penal Code, as amended, as follows:

83
Article 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:

xxxx

4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is
more than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds
the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special
disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the
property embezzled.

The failure of a public officer to have duly forthcoming any public funds or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put
such missing funds or property to personal use. (As amended by R.A. No. 1060)

The crime of malversation of public funds has the following elements, to wit: (a) that the offender is a
public officer; (b) that he had the custody or control of funds or property by reason of the duties of his
office; (c) that the funds or property were public funds or property for which he was accountable; and
(d) that he appropriated, took, misappropriated or consented or, through abandonment or negligence,
permitted another person to take them.11

The elements of the crime charged were duly established against the petitioner.

The Prosecution proved, firstly, that the petitioner was a public officer with the position of Local
Treasurer Officer I of Caloocan City; secondly, that by reason of his position, he was tasked to collect
fees and taxes regularly levied by the Mini City Hall, including market fees, miscellaneous fees, real
property taxes, and the subject patubig collection; and, thirdly, that all of the fees and taxes collected
were unquestionably public funds for which he was accountable.

As to the fourth element of misappropriation, the petitioner did not rebut the presumption that he had
misappropriated the patubig collection to his personal use. He had earlier feigned ignorance of having
received the patubig collection when he phoned Ms. Baclit to tell her that he did not receive the
collection. He still insisted that he had not received the sum from Ms. Baclit when the City Treasurer
summoned them both. His denial continued until the next day when City Mayor Malonzo himself asked
them both about the matter. Only after the petitioner's vault was finally opened did he declare that the
collection was intact inside his vault. Even then, the actual amount found therein was short by 1!
37,876.98. Conformably with Article 217 of the Revised Penal Code, supra, the failure of the petitioner
to have the patubig collection duly forthcoming upon demand by the duly authorized officer was prima
facie evidence that he had put such missing fund to personal use. Although the showing was merely
prima facie, and, therefore, rebuttable, he did not rebut it, considering that he not only did not account
for the collection upon demand but even steadfastly denied having received it up to the time of the
inspection of the sealed vault. Under the circumstances, he was guilty of the misappropriation of the
collection.

Malversation is committed either intentionally or by negligence. The dolo or the culpa is only a modality
in the perpetration of the felony. Even if the mode charged differs from the mode proved, the same
offense of malversation is still committed; hence, a conviction is proper.12 All that is necessary for a
conviction is sufficient proof that the accused accountable officer had received public funds or property,
and did not have them in his possession when demand therefor was made without any satisfactory
explanation of his failure to have them upon demand. For this purpose, direct evidence of the personal

84
misappropriation by the accused is unnecessary as long as he cannot satisfactorily explain the inability
to produce or any shortage in his accounts.13 Accordingly, with the evidence adduced by the State
being entirely incompatible with the petitioner's claim of innocence, we uphold the CA's affirmance of
the conviction, for, indeed, the proof of his guilt was beyond reasonable doubt.

The petitioner bewails the deprivation of his constitutionally guaranteed rights during the investigation.
He posits that a custodial investigation was what really transpired, and insists that the failure to inform
him of his Miranda rights rendered the whole investigation null and void. We disagree with the
petitioner's position.

According to People v. Marra,14 custodial investigation involves any questioning initiated by law

enforcement authorities after a person is taken into custody or otherwise deprived of his freedom of
action in any significant manner. The safeguards during custodial investigation begin to operate as
soon as the investigation ceases to be a general inquiry into a still unsolved crime, and the
interrogation is then focused on a particular suspect who has been taken into custody and to whom the
police would then direct interrogatory questions that tend to elicit incriminating statements. The
situation contemplated is more precisely described as one where -After a person is arrested and his
custodial investigation begins a confrontation arises which at best may be termed unequal. The
detainee is brought to an army camp or police headquarters and there questioned and cross-examined
not only by one but as many investigators as may be necessary to break down his morale. He finds
himself in a strange and unfamiliar surrounding, and every person he meets he considers hostile to
him. The investigators are well-trained and seasoned in their work. They employ all the methods and
means that experience and study has taught them to extract the truth, or what may pass for it, out of
the detainee. Most detainees are unlettered and are not aware of their constitutional rights.

And even if they were, the intimidating and coercive presence of the officers of the law in such an
atmosphere overwhelms them into silence x x x.15

Contrary to the petitioner's claim, the fact that he was one of those being investigated did not by itself
define the nature of the investigation as custodial. For him, the investigation was still a general inquiry
to ascertain the whereabouts of the missing patubig collection. By its nature, the inquiry had to involve
persons who had direct supervision over the issue, including the City Treasurer, the City Auditor, the
representative from different concerned offices, and even the City Mayor. What was conducted was not
an investigation that already focused on the petitioner as the culprit but an administrative inquiry into
the missing city funds. Besides, he was not as of then in the custody of the police or other law
enforcement office.

Even as we affirm the CA, we have to clarify the penalty imposed in terms of the Indeterminate
Sentence Law.1âwphi1

Section 1 of the Indeterminate Sentence Law states that an indeterminate sentence is imposed on the
offender consisting of a maximum term and a minimum term. 16 The maximum term is the penalty
properly imposed under the Revised Penal Code after considering any attending circumstance; while
the minimum term is within the range of the penalty next lower than that prescribed by the Revised
Penal Code for the offense committed. Conformably with the instructions on the proper application of
the Indeterminate Sentence law in malversation reiterated in Zafra v. People: 17 (a) the penalties
provided under Article 217 of the Revised Penal Code constitute degrees; and ( b) considering that the
penalties provided under Article 217 of the Revised Penal Code arc not composed of three periods, the
time included in the prescribed penalty should be divided into three equal portions, each portion
forming a period, pursuant to Article 65 of the Revised Penal Code.18 With the amount of ₱37,876.98
ultimately found and declared by the CA to have been misappropriated exceeding the ₱22,000.00
threshold, the imposable penalty is reclusion temporal in its maximum period to reclusion perpetua
(that is, 17 years, four months and one day to reclusion perpetua), the minimum period of which is 17
years, four months and one to 18 years and eight months, the medium period of which is 18 years,
eight months and one day to 20 years, and the maximum period is reclusion perpetua.
85
Accordingly, the maximum of the indeterminate sentence of the petitioner is the medium period in
view of the absence of any aggravating or mitigating circumstances, while the minimum of the
indeterminate sentence shall be taken from the penalty next lower, which is reclusion temporal in its
minimum and medium periods (i.e., from 12 years and one day to 17 years and four months). Hence,
the indeterminate sentence for the petitioner is modified to 12 years and one day of reclusion
temporal, as minimum, to 18 years, eight months and one day of reclusion temporal, as maximum.

In addition, the Court notes that both lower courts did not require the petitioner to pay the amount of
₱37,876.98 subject of the malversation. That omission was plain error that we should now likewise
correct as a matter of course, for there is no denying that pursuant to Article 100 of the Revised Penal
Code, every person criminally liable for a felony is also civilly liable. The omission, if unchecked and
unrevised, would permanently deprive the City of Caloocan of the misappropriated amount. Such
prejudice to the public coffers should be avoided.

The Court has justifiably bewailed the omissions by the lower courts in this respect, and has seen fit to
point out in Zafra v. People:

One more omission by the CA and the R TC concerned a matter of law. This refers to their failure to
decree in favor of the Government the return of the amounts criminally misappropriated by the
accused. That he was already sentenced to pay the fine in each count was an element of the penalties
imposed under the Revised Penal Code, and was not the same thing as finding him civilly liable for
restitution, which the RTC and the CA should have included in the judgment. Indeed, as the Court
emphasized in Bacolod v. People, it was "imperative that the courts prescribe the proper penalties
when convicting the accused, and determine the civil liability to be imposed on the accused, unless
there has been a reservation of the action to recover civil liability or a waiver of its recovery,"
explaining the reason for doing so in the following manner:

It is not amiss to stress that both the R TC and the CA disregarded their express mandate under
Section 2, Rule 120 of the Rules of Court to have the judgment, if it was of conviction, state: "(1) the
legal qualification of the offense constituted by the acts committed by the accused and the aggravating
or mitigating circumstances which attended its commission; (2) the participation of the accused in the
offense, whether as principal, accomplice, or accessory after the fact; (3) the penalty imposed upon
the accused; and (4) the civil liability or damages caused by his wrongful act or omission to be
recovered from the accused by the offended party, if there is any, unless the enforcement of the civil
liability by a separate civil action has been reserved or waived." Their disregard compels us to act as
we now do lest the Court be unreasonably seen as tolerant of their omission. That the Spouses Cogtas
did not themselves seek the correction of the omission by an appeal is no hindrance to this action
because the Court, as the final reviewing tribunal, has not only the authority but also the duty to
correct at any time a matter of law and justice.

We also pointedly remind all trial and appellate courts to avoid omitting reliefs that the parties are
properly entitled to by law or in equity under the established facts. Their judgments will not be worthy
of the name unless they thereby fully determine the rights and obligations of the litigants. It cannot be
otherwise, for only by a full determination of such rights and obligations would they be true to the
judicial office of administering justice and equity for all. Courts should then be alert and cautious in
their rendition of judgments of conviction in criminal cases. They should prescribe the legal penalties,
which is what the Constitution and the law require and expect them to do. Their prescription of the
wrong penalties will be invalid and ineffectual for being done without jurisdiction or in manifest grave
abuse of discretion amounting to lack of jurisdiction. They should also determine and set the civil
liability ex delicto of the accused, in order to do justice to the complaining victims who are always
entitled to them. The Rules of Court mandates them to do so unless the enforcement of the civil
liability by separate actions has been reserved or waived.19

Under the law, the civil liability of the petitioner may involve restitution, reparation of the damage
caused, and indemnification for consequential damages.20 Given that his obligation requires the
86
payment of the amount misappropriated to the City of Caloocan, the indemnification for damages is
through legal interest of 6% per annum on the amount malversed, reckoned from the finality of this
decision until full payment.21

WHEREFORE, the Court AFFIRMS the decision promulgated on July 24, 2003 finding petitioner
BERNARDO U. MESINA guilty beyond reasonable doubt of malversation of public funds subject to the
MODIFICATIONS that: (a) he shall suffer the indeterminate penalty of 12 years and one day of
reclusion temporal, as minimum, to 18 years, eight months and one day of reclusion temporal, as
maximum, and pay a fine of ₱37,876.98; and (b) he shall further pay to the City of Caloocan the
amount of ₱37,876.98, plus interest thereon at the rate of 6% per annum, reckoned from the finality
of this decision until the amount is fully paid.

The petitioner shall pay the costs of suit.

SO ORDERED.

Sereno, C. J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ., concur.

THIRD DIVISION

G.R. No. 158413               February 8, 2012

CELSO M. MANUEL, EVANGELISTA A. MERU, FLORANTE A. MIANO, and PEOPLE OF THE

PHILIPPINES, Petitioners,
vs.
HON. SANDIGANBAYAN (FOURTH DIVISION), MELCHOR M. MALLARE and ELIZABETH
GOSUDAN, Respondents.

x---------------------------------------------x

G.R. No. 161133

MELCHOR M. MALLARE and ELIZABETH GOSUDAN, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

MENDOZA, J.:

These consolidated petitions question an interlocutory order of the Sandiganbayan as well as its
decision and resolution in Criminal Case No. 25673 for malversation of public funds, entitled People of
the Philippines v. Melchor M. Mallare and Elizabeth M. Gosudan.

In the earlier petition, G.R. No. 158413, the petitioners, Celso M. Manuel, Evangelista A. Meru and
Florante A. Miano (petitioners), question the May 20, 2002 Resolution1 of the Sandiganbayan granting
the Motion to Re-open Proceedings filed by the accused after their conviction in the September 17,
2001 Decision2 of the said tribunal.

87
In G.R. No. 161133, the petitioners are the accused assailing the (1) September 17, 2001 Decision of
the Sandiganbayan finding them guilty beyond reasonable doubt of the crime charged; (2) the July 21,
2003 Resolution3 affirming the conviction after reception of additional evidence in the re-opened
proceedings; and (3) the November 13, 2003 Resolution4 denying their motion for reconsideration.

The Consolidated Facts on Record

On October 4, 1999, an Information5 was filed before the Sandiganbayan charging Melchor M.

Mallare (Mallare) and Elizabeth M. Gosudan (Gosudan), Mayor and Treasurer, respectively, of the
Municipality of Infanta, Pangasinan with the crime of Malversation of Public Funds, defined and
penalized under Article 217 of the Revised Penal Code. The Information reads:

That on or about 17 August 1998, and for sometime prior thereto, in the Municipality of Infanta,
Province of Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, Melchor M. Mallare, being the Mayor of the said Municipality and a high ranking
official, and Elizabeth M. Gosudan, being the Treasurer of the said Municipality and an accountable
officer of public funds of said municipality by reason of the duties of her office, while in the
performance and taking advantage of their official and administrative functions, conspiring and
confederating with or mutually helping each other, with grave abuse of confidence, did then and there
willfully, unlawfully and feloniously appropriate, take or misappropriate, or permit any other person to
take wholly or partially, public funds in the custody of the accused Municipal Treasurer Gosudan
amounting to PESOS: ONE MILLION FOUR HUNDRED EIGHTY SEVEN THOUSAND ONE HUNDRED
SEVEN AND 40/100 (₱ 1,487,107.40), when said accused disbursed, or authorized, allowed, consented
or tolerated the disbursement, of public funds in the amounts of: (1) ₱ 995,686.09 for unlawful
personal loans to several municipal officials and employees including themselves; (2) ₱ 291,421.31 for
payments without the requisite appropriation; and (3) ₱ 200,000 for withdrawals recorded as cash
disbursement, said disbursement being in violation of the Constitution, law, rules and regulation, to the
damage and prejudice of the Government and public interest.

CONTRARY TO LAW.

The Information ascribed to Mallare and Gosudan (accused) the following acts of alleged unlawful
disbursement, constituting the elements of the crime of Malversation of Public Funds, to wit: 1) ₱
995,686.09 for unlawful personal loans to several municipal officials and employees including
themselves; 2) ₱ 291,421.31 for payments without the requisite appropriation; and 3) ₱ 200,000.00
for withdrawals recorded as cash disbursements.

Upon being arraigned on January 4, 2000, the accused pleaded "Not Guilty." During the pre-trial, the
parties stipulated and agreed: 1) that the accused were public officers; 2) that there was an audit
report; 3) that there was restitution in the amount of ₱ 110,000.00; 4) that there was a written
demand on the accused to pay the shortage; and 5) that the shortage was in the amount of ₱
1,487,107.40.

The issues posed before the Sandiganbayan were the following:

(1) Whether or not accused Municipal Treasurer Elizabeth M. Gosudan committed the crime of
Malversation of Public Funds when she granted personal loans to the municipal officials and employees,
including herself and her co-accused Municipal Mayor Melchor M. Mallare, from the municipal funds,
despite the fact that the full amount of said loan had been completely reimbursed or restituted at the
exit conference.

(2) Whether or not accused Municipal Mayor Melchor M. Mallare has conspired with his co-accused
Municipal Treasurer Gosudan in the commission of the crime of Malversation of Public Funds.

88
During the trial, the prosecution presented several documents and the lone testimony of Emelie S.
Ritua, State Auditor II of the Commission on Audit (COA). The defense, on the other hand, presented
their own documents and Gosudan as its only witness.

On September 17, 2001, the Sandiganbayan rendered a decision finding Mallare and Gosudan guilty
beyond reasonable doubt of the crime of Malversation of Public Funds. The dispositive portion of the
decision reads:

WHEREFORE, the herein two (2) accused, MELCHOR M. MALLARE and ELIZABETH M. GOSUDAN, are
hereby found GUILTY beyond reasonable doubt of the crime of MALVERSATION OF PUBLIC FUNDS,
defined and penalized under the first paragraph, subparagraph 4, Article 217, Revised Penal Code, and
each of them is sentenced under the Indeterminate Sentence Law to suffer the penalty of
imprisonment of from Thirteen (13) Years and Four (4) Months, as minimum, to Nineteen (19) Years
and Four (4) Months, as maximum, both of reclusion temporal, and also to suffer the penalty of
perpetual special disqualification. Further, accused Melchor M. Mallare is hereby sentenced to pay a
fine of ₱ 300,998.59, accused Elizabeth M. Gosudan to pay a fine of ₱ 774,285.78, and both to pay the
costs.

SO ORDERED.6

In reaching said determination, the Sandiganbayan gave the following reasons:

Going now to the essential elements of the crime of Malversation of Public Funds, the following facts
must concur:

(1) That the accused is a public officer;

(2) That he/she had custody and/or control of funds

by reason of his/her office;

(3) That the funds involved were public funds for

which he/she is accountable; and

(4) That he/she appropriated or consented, or through abandonment or through negligence, permitted
another person to take said public funds.

On the first element, as borne by the record of this case, and as specifically stipulated by the parties
per the Pre-Trial Order, dated 7 February 2000, the accused Melchor M. Mallare and Elizabeth M.
Gosudan are public officers at the time of the commission of the alleged offense, the former being the
Municipal Mayor and the latter the Municipal Treasurer of Infanta, Pangasinan. On the second and third
elements, as Municipal Treasurer, accused Gosudan had the duty to have custody and the obligation to
exercise proper management of the municipal funds of Infanta, Pangasinan, and accused, Mallare, as
the local chief executive, is responsible for the supervision of all government funds and property
pertaining to his agency, the Municipality of Infanta, Pangasinan.

Anent the fourth element, the record is replete with evidence showing that accused Treasurer Gosudan
herself admitted that she gave the "missing" amount to several municipal officials and employees, as
witness the following facts:

1. Per the testimony of COA Auditor Emelie S. Ritua on the witness stand, when she and her audit
team told the Treasurer "to produce immediately the missing funds and to explain why the shortage
have [had] occurred x x x [s]he told [them] that she [could]not produce immediately a part of the
shortage because they were loaned out to some of the officials and employees;" and that [s]he
presented to them an informal list of the officials and employees who were granted IOUs or ‘vales’" or
"pautang."
89
2. The fact of the accused Treasurer having given the subject amounts to the municipal officials and
employees named in the "unofficial list" is not denied by her, as the lone witness for the prosecution,
she and her counsel merely insisting that the amounts were not given as loans but as "vales" or
"pautang."

3. The confirmation letters prepared by COA Auditor Ritua wherein the persons named in the accused
Treasurer’s "informal list" of borrowers acknowledged by their signatures at the bottom thereof that
they have "outstanding loan balance from her," further prove beyond reasonable doubt that said
accused Treasurer loaned out to said persons amounts from the municipal funds.

4. The insistence of accused Treasurer Gosudan that the subject amounts that she gave to the
aforenamed persons, including herself and the accused Mayor, were not "loans" but were "vales"
"pautang," "salary advances" "cash advances," "travel expenses," "gasoline expenses" and/or "funds
used for purchase of spare parts of municipal vehicle" – is belied by her own admission that the
amounts of these "vales" were not covered by the required vouchers (with supporting papers) signed
by accused Municipal Mayor Mallare and were not entered in the cash book because they were "not an
official cash advance," and she could no longer remember what particular amount is for which specific
purpose.

5. The foregoing naked claims and admissions of accused Treasurer Gosudan lead Us to the inevitable
conclusion that the amounts she gave to the municipal officials and employees, including herself and
her co-accused Mayor Mallare, were nothing but personal loans taken from the cash account of the
Municipality of Infanta, Pangasinan.

6. As already stated earlier, the full amount of the "shortages" found by the COA audit team (which
constitute the subject personal loans, as already determined) was fully restituted (according to COA
Auditor Ritua) or reimbursed (according to accused Gosudan), as shown in Official Receipts all issued in
the name of accused Gosudan.7

The Sandiganbayan further stated that Gosudan’s acts of allowing other persons to borrow municipal
funds constituted solid proof of malversation. In the case of Mallare, his act of getting or accepting the
subject loan for himself in the amount of ₱ 300,998.59 from Gosudan amounted to a conspiracy with
the latter in the commission of the crime of malversation. The full restitution of the total amount of the
loaned public funds did not exonerate Mallare and Gosudan because the crime of Malversation of Public
Funds was already consummated upon the latter’s granting of the loans, and upon the former’s
acceptance and taking of the amounts lent to him. Restitution of the loaned amounts could only
mitigate their civil liabilities, not exonerate them from criminal liability. The pertinent portions of the
Sandiganbayan Decision read as follows:

The foregoing discussion leads us to the inevitable conclusion that accused Municipal Treasurer
Gosudan committed the crime of Malversation of Public Funds when she extended loans or cash
advances to herself and several of her co-employees including her co-accused Mayor Mallare, in the
total amount of ₱ 774,285.78.

On the part of accused Municipal Mayor Melchor M. Mallare, it is true that not an iota of evidence was
introduced to show that he conspired with accused Treasurer Gosudan in giving loans to all the
municipal officials and employees named in the confirmation letters, other than that to himself. Hence,
he cannot be faulted for the grant of said loans by his co-accused municipal treasurer. However, his act
of getting or accepting the loan for himself in the amount of ₱ 300,998.59 from accused Treasurer
Gosudan, as acknowledged by him in the confirmation letter that he signed, is a concrete proof of his
having conspired with her in the commission of the crime of Malversation of Public Funds in the said
amount.

The full restitution of the total amount of the loaned public funds does not exonerate the herein two
accused, because the crime of Malversation of Public Funds was consummated upon accused Treasurer

90
Gosudan’s granting of the loans, and upon accused Mayor Mallare’s acceptance and taking of the
amount thus loaned to him. The restitution of the loaned amounts thereafter will not exonerate said
accused, and can merely mitigate their civil liabilities which, however, they have fully settled when the
whole amount of the loan was restituted.8

Insisting on their innocence, Mallare and Gosudan filed a motion for reconsideration 9 but it was denied
in a resolution10 dated November 16, 2001.

On January 9, 2002, Mallare and Gosudan filed their Motion To Re-Open Proceedings 11 arguing that
their counsel committed a misjudgment by not presenting Mallare at the witness stand. Such
circumstance justified re-opening of proceedings to avoid a miscarriage of justice. The Ombudsman
Prosecutor filed his Comment/Opposition12 contending that the subject motion to re-open proceedings
was without merit because it was filed late and after the decision convicting the accused had already
attained finality.

On May 20, 2002, the Sandiganbayan issued its Resolution 13 granting the Motion To Re-open
Proceedings and allowing the reception of Mallare’s testimony. The grant of the subject motion was
based 1) on Section 24, Rule 119 of the Revised Rules of Court on Criminal Procedure; and 2) in the
interest of justice. The Sandiganbayan wrote :

Section 24, Rule 119 of the Revised Rules of Court on Criminal Procedure, provides that:

Section 24. Reopening. – At any time before finality of conviction, the judge may, motu propio or upon
motion, with hearing in either case, reopen the proceedings to avoid a miscarriage of justice. The
proceedings shall be terminated within thirty (30) days from the order granting it.

While it may be true , as ably argued by the prosecution, that an accused has only one day after
receipt of the resolution denying the motion for reconsideration, to file an appeal, after which the
decision attains finality, the same rule does not apply to cases falling within the jurisdiction of the
Sandiganbayan.

Under Rule 45, Section 2 of the Revised Rules of Procedure, a party desiring to appeal by certiorari
from a judgment or a final order or resolution of the Sandiganbayan may file within fifteen (15) days
from notice of the judgment or final order or resolution appealed from, or of the denial of the
petitioner’s motion for reconsideration filed in due time after notice of the judgment.

Otherwise put, if a motion for reconsideration is filed, the 15-day reglementary period within which to
appeal the decision of the Sandiganbayan is reckoned from the date the party who intends to appeal
received the order denying the motion for reconsideration.

In the case at bar, since the motion for reconsideration was filed on October 2, 2001 of the decision
promulgated on September 17, 2001, and the motion for reconsideration’s denial dated November 13,
2001 was only received on December 5, 2001, the instant Motion to Reopen the Proceedings which was
filed on December 20, 2001, may still be entertained, since the period of fifteen (15) days begun to
run all over again from notice of the denial of the resolution. Hence, the decision convicting the
accused has not yet attained finality.

Secondly, and more importantly, accused-movants’ plights would certainly result in a miscarriage of
justice if the same were not harmonized with justice and the facts. No less than their liberty is at stake
here. They face a jail term of thirteen (13) years and four (4) months to nineteen (19) years and four
(4) months. And, if they have to spend this long stretch in prison, their guilt must be established
beyond reasonable doubt. They cannot lose their liberty because their former lawyer pursued a
carelessly contrived strategy of not presenting herein-accused-movant Mallare to testify, which thus
forbade him to air his side. Under the circumstances, higher interests of justice and equity demand
that herein accused be not penalized for the costly importuning of their previous lawyer, since their
only fault was to repose their faith and entrust their innocence to him. Losing liberty, therefore, on
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default or miscalculation of a lawyer should be frowned upon despite the fiction that a client is bound
by the mistakes of his lawyer.

x x x           x x x          x x x

Most assuredly, therefore, the better part of discretion is to admit and appreciate herein accused-
movant Mallare’s testimony. Without prejudging, however, the result of such appreciation, accused-
movant Mallare’s testimony prima facie appears strong when considered with the fact, that the amount
of ₱ 300,998.59 which he admitted (as shown by his "CONFORME" in Exh. "K") as his outstanding loan
balance, was supposedly used for a public purpose, and such fact was actually testified to by his co-
accused Elizabeth Gosudan. It was his understanding then, when he signed the pro-forma confirmation
letter, that he was merely informing the COA Auditors the amount of his cash advance as basis later
for liquidation or settlement, and not an admission of a personal loan.

x x x           x x x          x x x

Hence, if only to truly make the courts really genuine instruments in the administration of justice, We
believe, in order to assure against any possible miscarriage of justice resulting from accused-movant
Mallare’s failure to present his side of the story, through no fault of his, that this case be reopened for
reception of evidence and appreciation of his testimony.14

With the Sandiganbayan’s May 20, 2002 Resolution granting the re-opening of the proceedings,
Mallare completed his testimony and the defense rested its case on September 11, 2002.

On June 10, 2003, Celso M. Manuel, Evangelista A. Meru and Florante A. Miano (petitioners) filed a
petition for certiorari with prayer for the issuance of a writ of preliminary injunction and/or temporary
restraining order dated May 30, 2003, docketed as G.R. No. 158413, particularly assailing the
Sandiganbayan’s Order granting the re-opening of the subject criminal case.

Thereafter, on July 21, 2003, the Sandiganbayan issued a resolution, 15 affirming its September 17,
2001 Decision which convicted Mallare and Gosudan of the crime of Malversation of Public Funds
beyond reasonable doubt after its reception of additional evidence during the re-opened proceedings.
The dispositive portion of the resolution reads:

WHEREFORE, the Court finds no cogent reason to disturb or amend the Court’s Decision promulgated
on September 17, 2001.

SO ORDERED.16

The Sandiganbayan ruled, among others, that Mallare’s testimony at the re-opened proceedings was
just an afterthought and could not be given greater weight as to reverse his conviction.

On November 13, 2003, the Sandiganbayan issued a resolution 17 denying Mallare’s motion for
reconsideration.

On December 17, 2003, the Office of the Solicitor General (OSG) filed its Comment 18 praying that the
petition in G.R. No. 158413 be given due course.

On January 16, 2004, Mallare and Gosudan filed a petition for review docketed as G.R. No. 16133
where one of the grounds raised was the Sandiganbayan’s alleged misunderstanding of the nature of a
motion for the reopening of the proceedings, and its eventual granting of said motion.

On March 16, 2004, petitioners in G.R. No. 158413 filed an urgent motion to consolidate their case
with G.R. No. 161133.

On April 15, 2009, this Court issued a Resolution 19 directing the consolidation of G.R. No. 158413 with
G.R. No. 161133.

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The petition in G.R. No. 158413 raises the following issues:

1) WHETHER OR NOT THE MOTION TO REOPEN THE PROCEEDINGS WAS PROPER?

2) WHETHER OR NOT THE MOTION TO REOPEN THE PROCEEDINGS TOLLED THE RUNNING OF THE
PERIOD TO APPEAL?

3) WHETHER OR NOT THE RESPONDENT COURT HAD JURISDICTION OVER THE CASE WHEN IT
GRANTED PRIVATE RESPONDENTS’ MOTION TO REOPEN THE PROCEEDINGS?

4) WHETHER OR NOT RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING

TO LACK OR IN EXCESS OF JURISDICTION FOR GRANTING THE MOTION TO REOPEN THE
PROCEEDINGS?20

On the other hand, the petition in G.R. No. 161133 raises the following grounds:

UPON THE RECORD, SUBSTANTIAL AND CREDIBLE EVIDENCE EXISTS, WHICH APPEARS TO HAVE
BEEN OVERLOOKED OR DISREGARDED, RAISING A REASONABLE DOUBT OF THE GUILT OF THE
PETITIONERS AT THE VERY LEAST, AND JUSTIFYING, UNDER WELL- ESTABLISHED RULE, THE
EXERCISE OF THE POWER OF THE SUPREME COURT TO REVIEW THE FINDINGS OF FACT OF THE
SANDIGANBAYAN.

II

THE APPEALED D E C I S I O N AND R E S O L U T I O NS OF THE SANDIGANBAYAN ARE BASED ON A

MISAPPREHENSION OF THE EVIDENCE – PARTICULARLY EXHIBIT "K" – THUS LEADING TO ITS
ERRONEOUS CONCLUSIONS AND MISTAKEN INFERENCES.

III

THE SANDIGANBAYAN MISUNDERSTOOD THE NATURE OF A MOTION FOR THE REOPENING OF

PROCEEDINGS, WHICH IT IRONICALLY GRANTED, AND DID NOT PROPERLY CONSIDER THE
ADDITIONAL EXCULPATORY EVIDENCE PRESENTED BY MALLARE, AND MISAPPLIED A SUPREME COURT
D E C I S I O N IN DISMISSING THE ADDITIONAL EVIDENCE.21

G.R. No. 158413

Petitioner’s argument

In G.R. No. 158413, petitioners argue that the motion to re-open proceedings was improper because
the earlier filing of a motion for reconsideration by the accused precluded them from filing a
subsequent motion to re-open proceedings. Petitioners contend that the motion to re-open proceedings
was in reality a second motion for reconsideration prohibited by the rules. The ground invoked by the
accused in the motion, like the failure of Mallare to take the witness stand, should have been raised
prior to or simultaneous with the filing of the motion for reconsideration because that ground had been
in existence at the time of the filing of the motion for reconsideration.

Moreover, petitioners in this case insist that the motion to re-open the proceedings did not toll the
running of the period to appeal. They claim that the accused received a copy of the order denying their
motion for reconsideration on December 5, 2001. The accused, however, failed to appeal to this Court
in accordance with Rule 45 of the New Rules of Court after the denial of their motion for
reconsideration. Instead, the accused filed a motion to re-open proceedings which was not allowed by
the rules. Considering that the filing of the motion to re-open did not toll the running of the period to
file a petition for review, the judgment of conviction became final as of December 21, 2001. Petitioners
likewise stress that the motion to re-open proceedings was not a petition for review contemplated

93
under Rule 45 of the New Rules of Court that could be filed within fifteen (15) days from receipt of the
order denying the motion for reconsideration. Hence, the Sandiganbayan should not have accepted,
entertained or acted on the motion to re-open the proceedings filed after December 6, 2001.

G.R. No. 161133

Petitioners’ argument

Petitioners Mallare and Gosudan argue that the Sandiganbayan’s decision convicting them of the crime
of Malversation of Public Funds was based on a misapprehension of the evidence because it did not
particularly appreciate the nature and purpose of the "reimbursement expense receipt" (RER) which
required the signatures of the officials and employees before Gosudan could give a cash advance. What
was extended by Gosudan to certain officials and employees were not loans but reimbursement
expenses such as cash advances for traveling expenses, purchase of spare parts and salary advances.

The accused lament that the Sandiganbayan ignored and misappreciated the testimony of Mallare
given after the re-opening of the proceedings. It was their contention that Mallare did not conspire with
Gosudan, and that the money he received from Gosudan was not used for a personal, but for a public,
purpose. Mallare claims that he did not get or accept a loan for himself and that he gave good and
valid reasons to justify how the amount of ₱ 300,998.00 was spent, none of which was for his personal
use.

The accused further argue that there was full restitution made within a reasonable time, which the COA
auditors acknowledged.

People’s argument

The prosecution claims that the Sandiganbayan’s decision and resolutions took into consideration all
the evidence on record, testimonial and documentary, presented by the prosecution and the defense
during the hearings of the case. It likewise argues that all the elements of the crime of Malversation of
Public Funds were present in this case considering that 1) Mallare and Gosudan were public officers
being the Mayor and Municipal Treasurer, respectively, of Infanta, Pangasinan; 2) Gosudan, as
Municipal Treasurer, had custody of public funds thereby making her accountable for these funds; 3)
Godusan granted loans to herself and her co-employees; and 4) Mallare signed the confirmation letter
stating that he had outstanding loans received from Gosudan.

The Court’s Verdict

Considering that the Sandiganbayan had issued its July 21, 2003 Resolution affirming its September
17, 2001 decision, which convicted Mallare and Gosudan of the crime of Malversation of Public Funds
beyond reasonable doubt, the Court need not pass upon the technical issues in G.R. No. 158413.

The only standing issue now is whether or not the Sandiganbayan was correct in finding Mallare and
Gosudan guilty beyond reasonable doubt of the crime of Malversation of Public Funds.

The Court has carefully reviewed the records and found no reason to disturb the Sandiganbayan’s
decision of conviction against Mallare and Gosudan for the crime of Malversation of Public Funds,
defined and penalized under Article 217 of the Revised Penal Code, as amended, as follows:

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:

1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in
the misappropriation or malversation does not exceed two hundred pesos.
94
2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more
than two hundred pesos but does not exceed six thousand pesos.

3. The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if
the amount involved is more than six thousand pesos but is less than twelve thousand pesos.

4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is
more than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds
the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special
disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the
property embezzled.

The failure of a public officer to have duly forthcoming any public fund or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put
such missing funds or property to personal uses.

To sustain a criminal conviction for the crime of Malversation of Public Funds under Article 217 of the
Revised Penal Code, as amended, all the following elements must be present:

1. That the offender is a public officer;

2. That he had custody or control of funds or property by reason of the duties of his office;

3. That those funds or property were public funds or property for which he was accountable; and

4. That he appropriated, took, misappropriated or consented or, through abandonment or negligence,

permitted another person to take them.

Mallare and Gosudan were

accountable for public funds

or property

The accountability for public funds or property of municipal mayors and treasurers was well-discussed
in the case of People of the Philippines v. Teofilo G. Pantaleon, Jr.,22 as follows:

The funds for which malversation the appellants stand charged were sourced from the development
fund of the municipality. They were funds belonging to the municipality, for use by the municipality,
and were under the collective custody of the municipality’s officials who had to act together to disburse
the funds for their intended municipal use. The funds were therefore public funds for which the
appellants as mayor and municipal treasurer were accountable.

Vallejos, as municipal treasurer, was an accountable officer pursuant to Section 101(1) of P.D. No.
1445 which defines an accountable officer to be "every officer of any government agency whose duties
permit or require the possession or custody of government funds or property shall be accountable
therefor and for the safekeeping thereof in conformity with law." Among the duties of Vallejos as
treasurer under Section 470(d)(2) of Republic Act No. 7160 is "to take custody and exercise proper
management of the funds of the local government unit concerned."

Pantaleon, as municipal mayor, was also accountable for the public funds by virtue of Section 340 of
the Local Government, which reads:

Section 340. Persons Accountable for Local Government Funds. — Any officer of the local government
unit whose duty permits or requires the possession or custody of local government funds shall be
accountable and responsible for the safekeeping thereof in conformity with the provisions of this title.
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Other local officials, though not accountable by the nature of their duties, may likewise be similarly
held accountable and responsible for local government funds through their participation in the use or
application thereof.

In addition, municipal mayors, pursuant to the Local Government Code, are chief executives of their
respective municipalities. Under Section 102 of the Government Auditing Code of the Philippines, he is
responsible for all government funds pertaining to the municipality:

Section 102. Primary and secondary responsibility. – (1) The head of any agency of the government
is immediately and primarily responsible for all government funds and property pertaining to his
agency.

Unquestionably, the source of the subject funds taken by Mallare and Gosudan came from the
municipal funds. As Municipal Mayor and Treasurer, respectively, they had the sworn duty to safely
keep said funds and disburse the same in accordance with standard procedure because the subject
funds belong to the municipality and must only be used for the benefit of the municipality. The
standard practice in the disbursement of public funds is that they cannot be released and disbursed
without the signatures of the Mayor and the Treasurer. In this case, the written approvals of Mallare
and Gosudan were essential before any release and disbursement of municipal funds could be made.
This was quite clear in Pantaleon where it was further written:

As a required standard procedure, the signatures of the mayor and the treasurer are needed before
any disbursement of public funds can be made. No checks can be prepared and no payment can be
effected without their signatures on a disbursement voucher and the corresponding check. In other
words, any disbursement and release of public funds require their approval. The appellants, therefore,
in their capacities as mayor and treasurer, had control and responsibility over the funds of the
Municipality of Castillejos.

Hence, any unlawful disbursement or misappropriation of the subject funds would make them
accountable.

Mallare and Gosudan appropriated, took, misappropriated or consented or, through abandonment or
negligence, permitted another person to take them

The Court agrees with the Sandiganbayan’s ruling that there was more than enough evidence to prove
that Gosudan abused her position as Municipal Treasurer of Infanta, Pangasinan, by committing the
crime of Malversation of Public Funds when she gave out loans in the total amount of ₱ 774,285.78 to
several co-employees including herself. Gosudan does not deny the fact that she extended thirteen
(13) loans to the following borrowers including herself:23

Name Position Amount Exhibit

Onofre M. Mayo Municipal Assessor ₱ 55,000.00 "D"

Daisy M. Ofalza Social Development Officer 53,842.00 "E"

Marivic M. Fortes Clerk II 50,000.00 "F"

Elena M. Mores S.B. Secretary 46,420.19 "G"

Manolito P. Monta Budget Officer 2,500.00 "H"

Luzviminda Maniago Municipal Accountant 17,200.00 "I"

96
 Elizabeth M. Gosudan Municipal Treasurer 75,000.00 "J"

Melchor M. Mallare Municipal Mayor 300,998.59 "K"

Marle M. Mas S.B. Member 115,625.00 "L"

Faustina Pagarigan Agricultural Technologist 500.00 "M"

Pedro M. Mallare Private Secretary 2,500.00 "N"

Anacleto Montero ABC President 50,000.00 "O"

Manuel Domalanta Chief of Police 5,200.00 "P"

When COA Auditor Emilie S. Ritua (Ritua) requested Gosudan to immediately produce the missing
funds and to explain why there was a shortage in the accounting of municipal funds, she failed to
immediately do so. The best that she could do was to explain that the subject amount was lent to the
said municipal officials and employees.24 Gosudan presented an informal list of the borrowers who were
granted "vales" or "pautang" and, who, in turn, gave IOUs.25

The confirmation letters prepared by the audit team of Ritua showed the written acknowledgment of
the said borrowers that they had outstanding loan balances from Gosudan.26 Gosudan also admitted
that these loans were neither covered by supporting vouchers signed by the Municipal Mayor nor
officially entered in the cash book as official cash advances. Worse, she could no longer remember the
particular amount loaned and the specific purpose therefor.27

In the crime of malversation, all that is necessary for conviction is sufficient proof that the accountable
officer had received public funds, that he did not have them in his possession when demand therefor
was made, and that he could not satisfactorily explain his failure to do so. Direct evidence of personal
misappropriation by the accused is hardly necessary in malversation cases.28

Clearly, the subject loans that Gosudan extended to the said municipal officials and employees
including herself were unofficial and unauthorized loans and, therefore, anomalous in nature. The
Sandiganbayan was correct in ruling that said loans were nothing but personal loans taken from the
cash account of the Municipality of Infanta, Pangasinan. Gosudan unlawfully disbursed funds from the
coffers of the municipality and, therefore, guilty of the crime of Malversation of Public Funds.

Like Gosudan, Mallare is also guilty of the same crime for accepting or getting for himself the loan
amount of ₱ 300,998.59 from Gosudan as evidenced by his written acknowledgment in the COA Audit
Team’s confirmation letter. His acceptance of the subject loan amount of ₱ 300,998.59 without any
supporting official voucher is proof that there was a conspiracy in the illegal disbursement of the
subject loan amounts.

Conspiracy exists when two or more persons come to an agreement concerning the commission of a
felony and decide to commit it. Conspiracy need not be proved by direct evidence and may be inferred
from the conduct of the accused before, during and after the commission of the crime, which are
indicative of a joint purpose, concerted action and concurrence of sentiments. In conspiracy, the act of
one is the act of all. Conspiracy is present when one concurs with the criminal design of another,
indicated by the performance of an overt act leading to the crime committed. It may be deduced from
the mode and manner in which the offense was perpetrated.

In this case, petitioners Zacaria A. Candao and Abas A. Candao were co-signatories in the subject
checks issued without the required disbursement vouchers. Their signatures in the checks, as

97
authorized officials for the purpose, made possible the illegal withdrawals and embezzlement of public
funds in the staggering aggregate amount of ₱ 21,045,570.64.29

This Court takes note of the following findings made by the Sandiganbayan regarding the supposed
disbursement vouchers presented by Mallare when he testified at the re-opening proceedings. Thus:

Finally, the Court’s resolution to uphold and sustain the September 17, 2001 conviction of the two
accused was buttressed by a closer scrutiny of documentary evidence presented during the trial when
the case was re-opened, more particularly, Exhibits "2-Mallare" and "3-Mallare," which were the
supposed disbursement vouchers for the public funds received by the accused Mayor Mallare from the
Municipality of Infanta, Pangasinan.

The Court noticed the irregularities of the two disbursement vouchers. Said vouchers appear to have
been spurious, fabricated and/or falsified, and therefore, the Court did not give any probative value to
these documentary exhibits. The following are the reasons:

a) The disbursement vouchers did not have the required control number in the space provided for it;

b) The two disbursement vouchers were totally prepared, approved, and signed by accused Mayor
Mallare alone;

c) The Government Accounting and Auditing Manual requires:

Sec. 168. Basic Requirements applicable to classes of disbursements. – The following basic
requirements shall be complied with:

CERTIFICATE OF AVAILABILITY OF FUND – Existence of lawful appropriation, the unexpended balance

which, free from other obligations, is sufficient to cover the expenditure, certified as available by an
accounting officer or any other official required to accomplish the certificate.

The accounting entries in the two vouchers were totally missing. Expectedly, the certification for the
availability of funds in the disbursement voucher was not signed by the accountant.

d) It did not conform with the regulations on disbursement of expenses that were enumerated at the
back portion of the disbursement voucher form, which, among others, required the following:

i) The voucher number shall be indicated on the face of the voucher and on every supporting
documents;

ii) Attach original supporting documents, bill, invoices, purchase orders, etc., to the voucher;

iii) Paid vouchers including its supporting documents, shall be perforated and conspicuously stamped
PAID;

iv) The "RECEIVED FROM" portion shall be accomplished only after the three signatories in the voucher
are secured and only upon actual receipt of payment.

e) There were no supporting documents to establish validity of claim. The submission of documents
and other evidence was required to establish the validity and correctness of the claim for payment.

Therefore, despite the additional evidence presented by accused Mayor Mallare, said accused failed to
overcome the overwhelming evidence proffered by the prosecution which established the guilt of the
accused beyond reasonable doubt.30 1âwphi1

Finally, the Court is in accord with the Sandiganbayan’s ruling that the full restitution of the lent public
funds cannot exonerate Mallare and Gosudan from the crime charged because payment does not
extinguish criminal liability.

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It bears stressing that the full restitution of the amount malversed will not in any way exonerate an
accused, as payment is not one of the elements of extinction of criminal liability. Under the law, the
refund of the sum misappropriated, even before the commencement of the criminal prosecution, does
not exempt the guilty person from liability for the crime. At most, then, payment of the amount
malversed will only serve as a mitigating circumstance akin to voluntary surrender, as provided for in
paragraph 7 of Article 13 in relation to paragraph 10 of the same Article of the Revised Penal Code.31

WHEREFORE, the petition is DENIED. The September 17, 2001 decision of the Sandiganbayan in
Criminal Case No. 25673 for Malversation of Public Funds is AFFIRMED.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Abad, and Perlas-Bernabe, JJ., concur.

39

THIRD DIVISION

G.R. No. 175074               August 31, 2011

JESUS TORRES, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

PERALTA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the Resolution 1 dated
September 6, 2006 and Resolution dated October 17, 20062 of the Court of Appeals (CA) in CA-G.R. CR
No. 29694.

The factual and procedural antecedents are as follows:

In an Information3 dated November 15, 1994, petitioner Jesus U. Torres was charged with the crime of
Malversation of Public Funds before the Regional Trial Court (RTC), Branch 42, Virac, Catanduanes, the
accusatory portion of which reads:

That on or about the 27th day of April 1994, or sometime subsequent thereto, in the Municipality of
Virac, Catanduanes, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, a public officer, being then the Principal of Viga Rural Development High School, Viga,
Catanduanes, and as such by reason of his office and duties is responsible and accountable for public
funds entrusted to and received by him, to wit: PNB Checks (sic) Nos. C-983182-Q for ₱42,033.32; C-
983183-Q for ₱95,680.89; C-983184-Q for ₱58,940.33, all dated April 26, 1994 in the total amount of
ONE HUNDRED NINETY-SIX THOUSAND SIX HUNDRED FIFTY-FOUR PESOS and FIFTY-FOUR
CENSTAVOS (₱196,654.54), Philippine Currency, representing salaries, salary differentials, additional
compensation allowance and Personal Emergency Relief Allowance from January to March 1994 of the
employees of the said school, taking advantage of his position and committing the offense in relation
to his office, encashed said checks with the Philippine National Bank, Virac, Catanduanes Branch and
once in possession of the money, did then and there willfully, unlawfully and feloniously and with grave
99
abuse of confidence, misapply, misappropriate, embezzle and convert to his personal use and benefit
the aforementioned amount of money, to the damage and prejudice of the Government.

Contrary to law.

Upon his arraignment, petitioner pleaded not guilty to the crime charged. Consequently, trial on the
merits ensued.

Evidence for the Prosecution

[Petitioner] Jesus Torres y Uchi was the principal of Viga Rural Development High School (VRDHS). On
April 26, 1994, he directed Edmundo Lazado, the school’s collection and disbursing officer, to prepare
the checks representing the teachers’ and employees’ salaries, salary differentials, additional
compensation allowance (ACA) and personal emergency relief allowance (PERA) for the months of
January to March, 1994. Lazado prepared three (3) checks in the total amount of ₱196,654.54, all
dated April 26, 1994, viz: PNB Check Nos. C-983182-Q for ₱42,033.32; C-983183-Q for ₱95,680.89;
C-983184-Q for ₱58,940.33 (Exhs. "A", "B" and "C"). The [petitioner] and Amador Borre, Head
Teacher III, signed the three (3) checks (TSN, Aug. 30, 2001, pp. 4-8).

Upon the instruction of the [petitioner], Lazado endorsed the checks and handed them to the accused.
It was the custom in the school for Lazado to endorse the checks representing the teachers’ salaries
and for the accused to encash them at PNB, Virac Branch and deliver the cash to Lazado for
distribution to the teachers (Id., pp. 12-17).

The following day, April 27, 1994, the accused encashed the three (3) checks at PNB, Virac Branch but
he never returned to the school to deliver the money to Lazado (Id., pp. 8-9).4

Evidence for the Defense

The [petitioner] admitted that he encashed the subject checks at PNB, Virac Branch in the morning of
April 27, 1994 but instead of going back to the school, he proceeded to the airport and availed of the
flight to Manila to seek medical attention for his chest pain. Two (2) days after, around 4:30 o’clock in
the morning of April 29, 1994, while he and his nephew were on the road waiting for a ride, three (3)
armed men held them up and took his bag containing his personal effects and the proceeds of the
subject checks. He reported the incident to the police authorities, but he failed to recover the money
(TSN, Nov. 12, 2002, pp. 11-25).5

On August 31, 2005, after finding that the prosecution has established all the elements of the offense
charged, the RTC rendered a Decision 6 convicting petitioner of the crime of Malversation of Public
Funds, the decretal portion of which reads:

WHEREFORE, the Court finds the accused Jesus Torres y Uchi GUILTY beyond reasonable doubt of the
crime of malversation of public funds as defined and penalized under Article 217 of the Revised Penal
Code, and hereby sentences him to suffer the indeterminate penalty of imprisonment ranging from 12
years and 1 day of reclusion temporal, as minimum, and to 18 years, 8 months and 1 day of reclusion
temporal, as maximum; to suffer the penalty of perpetual special disqualification; and to pay the fine
of ₱196,654.54 with subsidiary imprisonment in case of insolvency.

SO ORDERED.7

On September 8, 2005, petitioner filed his Notice of Appeal, 8 where it was indicated that he was
seeking recourse and appealing the decision of the RTC before the Court of Appeals.

On February 10, 2006, petitioner filed a Manifestation and Motion 9 acknowledging that he filed the
appeal before the wrong tribunal. Petitioner eventually prayed, among other things, that the case be
referred to the Sandiganbayan for appropriate action.

100
In its Comment10 filed on June 29, 2006, the Office of the Solicitor General prayed that the appeal be
dismissed outright, since transmittal to the proper court, in cases of erroneous modes of appeal, are
proscribed.

On September 6, 2006, the CA issued a Resolution dismissing the appeal, the dispositive portion of
which reads:

WHEREFORE, pursuant to the provisions of Section 2, Rule 50 of the Rules and Section 4 of SC Circular
No. 2-90, the instant appeal hereby is DISMISSED OUTRIGHT for lack of jurisdiction.

SO ORDERED.11

Petitioner filed a Motion for Reconsideration, 12 but was denied in the Resolution 13 dated October 17,
2006.

Hence, the petition raising the sole error:

Whether the honorable court of appeals erred in dismissing the petitioner’s appeal outright instead of
certifying the case to the proper court.14

Petitioner maintains that he inadvertently filed the notice of appeal before the Court of Appeals instead
of the Sandiganbayan. Petitioner implores that the Court exercise its sound discretion and prerogative
to relax compliance to sound procedural rules and to decide the case on the merits, considering that
from the beginning, he has been candid and straightforward about the fact that the case was
wrongfully filed with the Court of Appeals instead of the Sandiganbayan.

The petition is without merit.

Paragraph 3, Section 4 (c) of Republic Act No. 8249 (RA 8249),15 which defined the jurisdiction of the
Sandiganbayan, provides:

The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions

or orders of the regional trial courts whether in the exercise of their own original jurisdiction or of their
appellate jurisdiction as herein provided.16

Hence, upon his conviction, petitioner’s remedy should have been an appeal to the Sandiganbayan.
There is nothing in said paragraph which can conceivably justify the filing of petitioner’s appeal before
the Court of Appeals instead of the Sandiganbayan. Clearly, the Court of Appeals is bereft of any
jurisdiction to review the judgment petitioner seeks to appeal.17

It must be emphasized, however, that the designation of the wrong court does not necessarily affect
the validity of the notice of appeal. However, the designation of the proper court should be made
within the 15-day period to appeal. Once made within the said period, the designation of the correct
appellate court may be allowed even if the records of the case are forwarded to the Court of Appeals.
Otherwise, Section 2, Rule 50 of the Rules of Court would apply,18 the relevant portion of which states:

Sec. 2. Dismissal of improper appeal to the Court of Appeals. – x x x

An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court,
but shall be dismissed outright.19

In the case at bar, petitioner sought correction of the error in filing the appeal way beyond the
expiration of the period to appeal the decision. The RTC promulgated its Decision on August 31, 2005.
Petitioner filed his Notice of Appeal on September 8, 2005. Petitioner tried to correct the error only on
February 10, 2006 when he filed his Manifestation and Motion. Clearly, this is beyond the 15-day
period to appeal from the decision of the trial court. Therefore, the CA did not commit any reversible
error when it dismissed petitioner’s appeal for lack of jurisdiction.

101
Besides, even if we look into the merits of his arguments, the case is doomed to fail. Contrary to
petitioner’s argument, We find that he is an accountable officer within the contemplation of Article
21720 of the Revised Penal Code, hence, is untenable.

An accountable public officer, within the purview of Article 217 of the Revised Penal Code, is one who
has custody or control of public funds or property by reason of the duties of his office. 21 The nature of
the duties of the public officer or employee, the fact that as part of his duties he received public money
for which he is bound to account and failed to account for it, is the factor which determines whether or
not malversation is committed by the accused public officer or employee. Hence, a school principal of a
public high school, such as petitioner, may be held guilty of malversation if he or she is entrusted with
public funds and misappropriates the same.1avvphi1

Petitioner also posits that he could not be convicted under the allegations in the Information without
violating his constitutional right to be informed of the accusations against him. He maintains that the
Information clearly charged him with intentional malversation and not malversation through
negligence, which was the actual nature of malversation for which he was convicted by the trial court.
This too lacks merit.

Malversation may be committed either through a positive act of misappropriation of public funds or
property, or passively through negligence.22 To sustain a charge of malversation, there must either be
criminal intent or criminal negligence, and while the prevailing facts of a case may not show that deceit
attended the commission of the offense, it will not preclude the reception of evidence to prove the
existence of negligence because both are equally punishable under Article 217 of the Revised Penal
Code.23

More in point, the felony involves breach of public trust, and whether it is committed through deceit or
negligence, the law makes it punishable and prescribes a uniform penalty therefor. Even when the
Information charges willful malversation, conviction for malversation through negligence may still be
adjudged if the evidence ultimately proves the mode of commission of the offense.24 Explicitly stated –

x x x [E]ven on the putative assumption that the evidence against petitioner yielded a case of
malversation by negligence, but the information was for intentional malversation, under the
circumstances of this case, his conviction under the first mode of misappropriation would still be in
order. Malversation is committed either intentionally or by negligence. The dolo or the culpa present in
the offense is only a modality in the perpetration of the felony. Even if the mode charged differs from
mode proved, the same offense of malversation is involved and conviction thereof is proper. x x x25

WHEREFORE, premises considered, the petition is DENIED. The Resolutions dated September 6,
2006 and October 17, 2006 of the Court of Appeals in CA-G.R. CR No. 29694 are AFFIRMED.

SO ORDERED.

Abad, Mendoza, and Sereno,*  JJ., concur.

Velasco, Jr., J., (Chairperson), please see separate concurring opinion.

102
40

FIRST DIVISION

G.R. No. 121099 February 17, 1999

FIDEL T. SALAMERA, petitioner,
vs.
SANDIGANBAYAN, FIRST DIVISION, respondent.

PARDO, J.:

The case is an appeal via certiorari taken by petitioner from a decision of the Sandiganbayan and its
resolution convicting him of malversation of public property defined and penalized in Article 217 in
relation to Article 217 of the Revised Penal Code, and appreciating the mitigating circumstance of full
restitution, imposing upon him the indeterminate sentence of two (2) years four (4) months and one
(1) day of prision correccional, as maximum; to six (6) years and one (1) day of prision mayor, as
maximum; the penalty of perpetual special disqualification, and a fine of P5,000.00, the value of the .
38 Cal. Smith & Wesson revolver, with Serial No. 879886.

We reverse.

The facts may be related as follows:

On February 2, 1988, petitioner was elected to and assumed the position of mayor of the municipality
of Casiguran, province of Aurora.

Later that month, he received from Casiguran Barangay Captain 1 Antonio Benavidez one .38 Caliber
Smith & Wesson Revolver, with Serial No. 879886. The gun was owned by and licensed to Ponciano
Benavidez, an uncle of Antonio, who mortgaged it to him. Petitioner placed the gun in an attache case.

After about a week, petitioner together with his security men, went to Manila, and brought with them
the attache case with the gun in it. On their return to the province, their car was stopped at a spot
checkpoint in Quezon City, where Pat. Alfredo B. Villanueva of the Quezon City Police saw the revolver.
On petitioner's instruction, his security men surrendered the gun to police officer Villanueva.

Back in the municipality of Casiguran, Ponciano Benavidez, the licensed owner of the gun claimed it
from petitioner. The latter informed Ponciano that the gun was confiscated by the Quezon City Police.

On September 30, 1988, Ponciano Benavidez filed with the office of the Provincial Prosecutor of Aurora
a complaint for theft against petitioner and Antonio Benavidez.

On December 13, 1988, Ponciano Benavidez filed with the Department of Local Government, an
administrative complaint against petitioner for abuse of authority, ignorance of the law and conduct
unbecoming of a public servant.

On January 20, 1989, the Provincial Prosecutor of Aurora dismissed the case for theft.

On April 6, 1989, complainant Ponciano Benavidez filed a complaint for theft against petitioner with the
Office of the Ombudsman in Manila.

On August 21, 1990, during the investigation of the administrative case by the Sangguniang
Panlalawigan of Aurora, complainant Ponciano Benavidez executed an affidavit of desistance
acknowledging that petitioner had paid the value of the gun, and withdrawing the administrative case
and the criminal case he filed against petitioner with the Ombudsman.

On August 22, 1990, the Sangguniang Panlalawigan approved a resolution dismissing the
administrative case against petitioner.
103
On March 9, 1992, the Ombudsman approved the filing by Special Prosecution Officer Prospero G.
Pelayo of an information against petitioner for malversation of public funds, which was duly filed on
March 12, 1992, with the Sandiganbayan, Manila.

On March 30, 1992, the Sandiganbayan issued a warrant of arrest. On March 30, 1992, petitioner
posted a cash bail of P20,000.00, which he deposited with the provincial treasurer of Aurora, duly
approved by Regional Trial Court Judge Filemon N. Tan of Baler, Aurora. 2

Upon arraignment on June 1, 1992, before the Sandiganbayan, First Division, petitioner entered a plea
of not guilty, and accordingly, the court scheduled the case for pre-trial conference.

Meantime, on or about August 14, 1992, petitioner was able to contact Pat. Villanueva in Camp
Karingal, Quezon City. The latter said that he returned the gun to Patrolman Orgas, one of petitioner's
security men on the very next day after he had confiscated it. Unfortunately, Pat. Orgas did not inform
petitioner about the recovery of the gun, and, at the time Villanueva so informed petitioner, Pat. Orgas
had died.

At the pre-trial conference held on August 28, 1992, the prosecution and the accused (petitioner
herein) assisted by counsel de parte, entered into a stipulation of facts signed by them, as follows:

1. At all times relevant to this case, the accused was the Mayor of the Municipality of Casiguran,
Aurora;

2. That in the exercise of his functions as Mayor, the accused had the occasion to confiscate one .38
caliber Smith & Wesson revolver with Serial No. 879886 from Barangay Captain Antonio Benavidez;

3. This weapon was actually owned by Ponciano Benavidez, the value of which the parties have not
agreed upon;

4. That the accused confiscated this weapon in the performance of his official functions and was,
therefore, in custody thereof in his capacity as such;

5. That demand was made from the accused by Ponciano Benavidez sometime in June of 1988 to
produce the above-mentioned firearm but the accused failed to do so;

6. That at a subsequent time, the accused and Ponciano Benavidez went to the offices of the Quezon
City Police Department in search of this weapon;

7. That there has been restitution of the value of the firearm by the accused to the complaining
witness Ponciano Benavidez although there is disagreement as to the amount of the restitution;

8. That the following affidavits were executed:

a. By complaining witness Ponciano Benavidez indicating his desistance from further prosecution
thereof for reasons stated therein;

b. By Alfredo Villanueva of the Quezon City Police Department purporting to describe the circumstances
under which he allegedly confiscated the weapon in question from the accused Mayor.

Further to the above stipulations, the Government now marks the following exhibit which is admitted
by the accused:

Exhibit "A" — a xerox copy of the License to Carry Firearm No. 0188490, issued by Necesitas Katigbak
of the Firearm and Explosives Unit, to Ponciano Benavidez involving .38 caliber Smith & Wesson
revolver with SN 879886.

The accused for his part has marked the following exhibits:

104
Exhibit "1" — The Order of the Fiscal dated January 20, 1989, dismissing the charge of Theft, which is
Annex "1" to the Supplemental Affidavit;

Exhibit "2" — The administrative complaint filed by the complaining witness dated December 13, 1988,
which is Annex "2" to the Supplemental Affidavit;

Exhibit "3" — The Complaint for the filing of the case before the Ombudsman on April 6, 1989, which is
Annex "3" to the Supplemental Affidavit;

Exhibit "4" — The investigation before the Sangguniang Panlalawigan dated August 21, 1990 at Baler,
Aurora, wherein the owner of the gun submitted his affidavit of desistance and admitting therein that
he was paid for the loss of the gun, which is Annex "4" to the Supplemental Affidavit;

Exhibit "5" — the Affidavit of Desistance executed by the owner of the gun dated August 21, 1990,
marked as Annex "5" to the Supplemental Affidavit, wherein the owner of the gun admitted that he
verified the loss of the gun to be true and also admitted that the equivalent amount in cash and in kind
for the .38 caliber revolver was paid to him, for which he promised to dismiss the criminal case and the
administrative case.

Exhibit "6" — the Minutes of the Sanggunian Panlalawigan of Aurora dated August 22, 1990, which
decided to dismiss the administrative case, which is marked as Annex "6" to the Supplemental
Affidavit;

Exhibit "7" — the Resolution of the Investigating Fiscal for the Ombudsman dated February 24, 1992,
which is marked as Annex "7" to the Supplemental Affidavit;

Exhibit "8" — the Resolution of the Ombudsman, which is marked as Annex "8" to the Supplemental
Affidavit;

Exhibit "9" — a copy of the Order of Arrest issued by the Sandiganbayan, marked as Annex "9" to the
Supplemental Affidavit;

Exhibit "10" — the payment of the Bond for the provisional release of the accused, marked as Annex
"10" to the Supplemental Affidavit;

Exhibit "11" — the Joint Affidavit of the Chairman of the Sangguniang Panlalawigan and a certain
Angelito Salamera stating that they were present when payment was made for the gun to the owner,
which is marked as Annex "11" to the Supplemental Affidavit;

Exhibit "12" — the Affidavit executed by Alfonso Villanueva dated August 14, 1992, wherein he
admitted that he had confiscated the gun at a checkpoint in Quezon City, which is marked as Annex
"12" to the Supplemental Affidavit;

Exhibit "13" — the Affidavit executed by Antonio Benavidez dated July 30, 1989, which is marked as
Annex "13" to the Supplemental Affidavit.

On June 30, 1993, the prosecution formally presented as its evidence Exhibit "A" 3 and upon the
admission thereof, rested its case.

On the other hand, the defense presented two (2) witnesses including petitioner.

After the testimony of the witnesses on July 21, 1993, the court gave the defense counsel ten (10)
days to formally offer his evidence in writing. In time, the defense formally offered its exhibits, and on
Septepber 6, 1993, the court admitted all exhibits except Exhibits 11 and 13, which were rejected for
being hearsay.

105
On February 17, 1995, more than a year after the case was submitted for decision, the Sandiganbayan
promulgated its decision, the decretal portion of which narrated in the opening paragraph of this
opinion.

On March 3, 1995, petitioner filed a motion for reconsideration of the decision; However, on July 5,
1995, the Sandiganbayan denied the motion.

Hence, this appeal.

On October 4, 1995, the Court required respondent to file its comment on the petition. On January 4,
1996, the Office of the Special Prosecutor filed its comment on the petition for review. On January 30,
1996, the Solicitor General also filed his comment.

We give due course to the petition.

To begin with, petitioner is charged with malversation under Article 217 in relation to Article 222 of the
Revised Penal Code, providing as follows:

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 of malversation of such funds or property, shall suffer:

1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in
the misappropriation or malversation does not exceed two hundred pesos.

2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more
than 200 pesos but does not exceed 6,000 pesos.

3. The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if
the amount involved is more than 6,000 pesos but is less than 12,000 pesos.

4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is
more than 12,000 pesos but is less than 22,000 pesos. If the amount exceeds the latter, the penalty
shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special
disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the
property embezzled.

The failure of a public officer to duly forthcoming any public funds or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put
such missing funds or property to personal uses. (As amended by Rep. Act No. 1060, approved June
12, 1954).

Art. 222. Officers included in the preceding provisions. — The provisions of this chapter shall apply to
private individuals who, in any capacity whatever, have charge of any insular, provincial or municipal
funds, revenues, or property and to any administrator or depository of funds or property attached,
seized or deposited by public authority, even if such property belongs to a private individuals.

One essential element of the crime of malversation is that a public officer must take public funds,
money or property, and misappropriate it to his own private use or benefit. There must be asportation
of public funds money or property, akin to the taking of another's property in theft. The funds money
or property taken must be public funds or private funds impressed with public attributes or character
for which the public officer is accountable.

106
In this case, Antonio Benavidez voluntarily turned over the gun, a .38 caliber Smith & Wesson
revolver, to petitioner mayor of the town of Casiguran, Aurora. Antonio surrendered the gun to the
mayor. The gun was duly licensed. It was not seized or confiscated. Antonio obtained possession of the
gun from Ponciano Benavidez, an uncle of his, who was the owner and licensee of the gun. Ponciano
mortgaged it to Antonio.

The elements of malversation, essential for the conviction of an accused, under the above penal
provisions are that —

(a) the offender is a public officer;

(b) he has the custody or control of funds or property by reason of the duties of his office;

(c) the funds or property involved are public funds or property for which he is accountable; and

(d) he has appropriated, taken or misappropriated, or has consented to, or through abandonment or
negligence permitted, the taking by another person of, such funds or property. 4

The question may be asked: Did Antonio's surrender of the gun to petitioner mayor invest the gun with
public character sufficient to consider the gun as public property for which the mayor is accountable?
There was no reason to surrender or confiscate the gun. It was duly licensed to Ponciano Benavidez.
The license is not transferable. Antonio could not validly possess the gun. He should have returned the
gun to Ponciano, the licenced owner or surrendered it to the local police or to the Constabulary
Provincial Commander. By turning over the gun to petitioner mayor, the gun did not become public
property because it was not intended for public use or purpose nor was it lawfully sized. The gun
continued to be private property, that is why the gun owner rightfully asked for its return to him, not
to be turned over to the public coffer or treasury. Petitioner's failure to return the gun after demand by
the private owner did not constitute a prima facie evidence of malversation. The property was private
and the one who demanded its return was a private person, not a person in authority. The
presumption of conversion will not apply.

A respected author in Criminal Law wrote "Malversation can only be committed by a public official who
has charge of public funds or property by virtue of his official position. A public official not responsible
for public funds or property and without authority to safeguard the same can not be convicted of
malversation." 5

What is more, the gun was confiscated by a police officer at a checkpoint in Quezon City. The
policeman should have turned over the confiscated gun to the Constabulary Firearm and Explosive
Unit, in Camp Crame, Quezon City. Instead, he returned the gun to a security aide of petitioner mayor,
as a "favor" to the mayor. The security aide died in the meantime, and, apparently, the gun got lost.
Assuming that the loss was due to petitioner's fault or negligence, he is not criminally liable for
malversation through negligence because there was no evidence of public funds or property to the use
or benefit of the accused. The legal presumption of malversation created by a demand for restitution of
public funds or property is not applicable because the gun was private property and a public officer
entitled to its possession did not make the demand for its return.

The presumption takes the place of affirmative proofs showing the actual conversation. It obviates the
necessity of proving acts of conversation; a thing most extremely difficult to do. If in a particular case
a demand was made upon an accountable public official to produce the funds in his custody and he
failed to do so, the presumption thereby arising would render unnecessary further proof of
conversation. The disappearance of public funds in the hands of the accountable public officer is prima
facie evidence of its conversation. Here, there is no presumption of conversion nor evidence of actual
conversion.

107
Nevertheless, petitioner made restitution of the value of the value of the gun to the private owner,
Ponciano Benavidez. Obviously, petitioner did not malverse the gun by dolo or culpa to his private use
or benefit.

One more point. Admittedly, there was no evidence submitted to the court of the value of the gun to
enable the court to fix the penalty to be imposed on the accused. Assuming that petitioner malversed
the gun, in malversation, the penalty for the offense is defendent on the value of the public funds,
money or property malversed. In this case, the Sandiganbayan did not base the penalty on the
minimum value of the gun in the absence of evidence of its true worth. It took judicial notice of its
market value and estimated its "reasonable value" at P5,000.00. This is a grievous error.

The Sandiganbayan could not take judicial notice of the value of the gun. It must be duly proved in
evidence as a fact. The court can not take judicial notice of a disputed fact. The court may take judicial
notice of matters of public knowledge, or which are capable of unquestionable demonstration, or ought
to be known to judges because of of their judicial functions. Otherwise, the court must receive
evidence of disputeds facts with notice to the parties. This is an innovation introduced in the Revised
Rules of Evidence the Supreme Court adopted on July 1, 1989, which should not be unknown to the
lower
courts. 9 The new rule of evidence governs this case, since it was decided in 1995, six years after its
effectivity.

WHEREFORE, the Court hereby REVERSES the appealed decision and resolution of the Sandiganbayan
in its Criminal Case No. 17563, and ACQUITS the accused Fidel Salamera y Torres, with costs de oficio.

The Court orders the Sandiganbayan to forthwith cancel the cash bail of the accused, and immediately
reimburse the amount to him.

SO ORDERED.

Davide, Jr., C.J., Melo and Kapunan. JJ., concur.

41

THIRD DIVISION

G.R. No. 192330               November 14, 2012

ARNOLD JAMES M. YSIDORO, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

ABAD, J.:

This case is about a municipal mayor charged with illegal diversion of food intended for those suffering
from malnutrition to the beneficiaries of reconsideration projects affecting the homes of victims of
calamities.

The Facts and the Case

The Office of the Ombudsman for the Visayas accused Arnold James M. Ysidoro before the
Sandiganbayan in Criminal Case 28228 of violation of illegal use of public propertry (technical
malversation) under Article 220 of the Revised Penal Code.1

108
The facts show that the Municipal Social Welfare and Development Office (MSWDO) of Leyte, Leyte,
operated a Core Shelter Assistance Program (CSAP) that provided construction materials to indigent
calamity victims with which to rebuild their homes. The beneficiaries provided the labor needed for
construction.

On June 15, 2001 when construction for calamity victims in Sitio Luy-a, Barangay Tinugtogan, was
70% done, the beneficiaries stopped reporting for work for the reason that they had to find food for
their families. This worried Lolita Garcia (Garcia), the CSAP Officer-in-Charge, for such construction
stoppage could result in the loss of construction materials particularly the cement. Thus, she sought
the help of Cristina Polinio (Polinio), an officer of the MSWDO in charge of the municipality’s
Supplemental Feeding Program (SFP) that rationed food to malnourished children. Polinio told Garcia
that the SFP still had sacks of rice and boxes of sardines in its storeroom. And since she had already
distributed food to the mother volunteers, what remained could be given to the CSAP beneficiaries.

Garcia and Polinio went to petitioner Arnold James M. Ysidoro, the Leyte Municipal Mayor, to seek his
approval. After explaining the situation to him, Ysidoro approved the release and signed the withdrawal
slip for four sacks of rice and two boxes of sardines worth P3,396.00 to CSAP. 2 Mayor Ysidoro
instructed Garcia and Polinio, however, to consult the accounting department regarding the matter. On
being consulted, Eldelissa Elises, the supervising clerk of the Municipal Accountant’s Office, signed the
withdrawal slip based on her view that it was an emergency situation justifying the release of the
goods. Subsequently, CSAP delivered those goods to its beneficiaries. Afterwards, Garcia reported the
matter to the MSWDO and to the municipal auditor as per auditing rules.

On August 27, 2001 Alfredo Doller, former member of the Sangguniang Bayan of Leyte, filed the
present complaint against Ysidoro. Nierna Doller, Alfredo's wife and former MSWDO head, testified that
the subject SFP goods were intended for its target beneficiaries, Leyte’s malnourished children. She
also pointed out that the Supplemental Feeding Implementation Guidelines for Local Government Units
governed the distribution of SFP goods.3 Thus, Ysidoro committed technical malversation when he
approved the distribution of SFP goods to the CSAP beneficiaries.

In his defense, Ysidoro claims that the diversion of the subject goods to a project also meant for the
poor of the municipality was valid since they came from the savings of the SFP and the Calamity Fund.
Ysidoro also claims good faith, believing that the municipality’s poor CSAP beneficiaries were also in
urgent need of food. Furthermore, Ysidoro pointed out that the COA Municipal Auditor conducted a
comprehensive audit of their municipality in 2001 and found nothing irregular in its transactions.

On February 8, 2010 the Sandiganbayan found Ysidoro guilty beyond reasonable doubt of technical
malversation. But, since his action caused no damage or embarrassment to public service, it only fined
him P1,698.00 or 50% of the sum misapplied. The Sandiganbayan held that Ysidoro applied public
property to a pubic purpose other than that for which it has been appropriated by law or ordinance. On
May 12, 2010 the Sandiganbayan denied Ysidoro’s motion for reconsideration. On June 8, 2010 Ysidoro
appealed the Sandiganbayan Decision to this Court.

The Questions Presented

In essence, Ysidoro questions the Sandiganbayan’s finding that he committed technical malversation.
He particularly raises the following questions:

1. Whether or not he approved the diversion of the subject goods to a public purpose different from
their originally intended purpose;

2. Whether or not the goods he approved for diversion were in the nature of savings that could be used
to augment the other authorized expenditures of the municipality;

3. Whether or not his failure to present the municipal auditor can be taken against him; and

109
4. Whether or not good faith is a valid defense for technical malversation.

The Court’s Rulings

One. The crime of technical malversation as penalized under Article 220 of the Revised Penal Code 4 has
three elements: a) that the offender is an accountable public officer; b) that he applies public funds or
property under his administration to some public use; and c) that the public use for which such funds
or property were applied is different from the purpose for which they were originally appropriated by
law or ordinance.5 Ysidoro claims that he could not be held liable for the offense under its third element
because the four sacks of rice and two boxes of sardines he gave the CSAP beneficiaries were not
appropriated by law or ordinance for a specific purpose.

But the evidence shows that on November 8, 2000 the Sangguniang Bayan of Leyte enacted Resolution
00-133 appropriating the annual general fund for 2001.6 This appropriation was based on the executive
budget7 which allocated P100,000.00 for the SFP and P113,957.64 for the Comprehensive and
Integrated Delivery of Social Services8 which covers the CSAP housing projects.9 The creation of the two
items shows the Sanggunian’s intention to appropriate separate funds for SFP and the CSAP in the
annual budget.

Since the municipality bought the subject goods using SFP funds, then those goods should be used for
SFP’s needs, observing the rules prescribed for identifying the qualified beneficiaries of its feeding
programs. The target clientele of the SFP according to its manual 10 are: 1) the moderately and severely
underweight pre-school children aged 36 months to 72 months; and 2) the families of six members
whose total monthly income is P3,675.00 and below.11 This rule provides assurance that the SFP would
cater only to the malnourished among its people who are in urgent need of the government’s limited
resources.

Ysidoro disregarded the guidelines when he approved the distribution of the goods to those providing
free labor for the rebuilding of their own homes. This is technical malversation. If Ysidoro could not
legally distribute the construction materials appropriated for the CSAP housing beneficiaries to the SFP
malnourished clients neither could he distribute the food intended for the latter to CSAP beneficiaries.

Two. Ysidoro claims that the subject goods already constituted savings of the SFP and that, therefore,
the same could already be diverted to the CSAP beneficiaries. He relies on Abdulla v. People12 which
states that funds classified as savings are not considered appropriated by law or ordinance and can be
used for other public purposes. The Court cannot accept Ysidoro’s argument.

The subject goods could not be regarded as savings. The SFP is a continuing program that ran
throughout the year. Consequently, no one could say in mid-June 2001 that SFP had already finished
its project, leaving funds or goods that it no longer needed. The fact that Polinio had already
distributed the food items needed by the SFP beneficiaries for the second quarter of 2001 does not
mean that the remaining food items in its storeroom constituted unneeded savings. Since the
requirements of hungry mouths are hard to predict to the last sack of rice or can of sardines, the view
that the subject goods were no longer needed for the remainder of the year was quite premature.

In any case, the Local Government Code provides that an ordinance has to be enacted to validly apply
funds, already appropriated for a determined public purpose, to some other purpose. Thus:

SEC. 336. Use of Appropriated Funds and Savings. – Funds shall be available exclusively for the
specific purpose for which they have been appropriated. No ordinance shall be passed authorizing any
transfer of appropriations from one item to another. However, the local chief executive or the presiding
officer of the sanggunian concerned may, by ordinance, be authorized to augment any item in the
approved annual budget for their respective offices from savings in other items within the same
expense class of their respective appropriations.

110
The power of the purse is vested in the local legislative body. By requiring an ordinance, the law gives
the Sanggunian the power to determine whether savings have accrued and to authorize the
augmentation of other items on the budget with those savings.

Three. Ysidoro claims that, since the municipal auditor found nothing irregular in the diversion of the
subject goods, such finding should be respected. The SB ruled, however, that since Ysidoro failed to
present the municipal auditor at the trial, the presumption is that his testimony would have been
adverse if produced. Ysidoro argues that this goes against the rule on the presumption of innocence
and the presumption of regularity in the performance of official functions.

Ysidoro may be right in that there is no basis for assuming that had the municipal auditor testified, his
testimony would have been adverse to the mayor. The municipal auditor’s view regarding the
transaction is not conclusive to the case and will not necessarily negate the mayor’s liability if it
happened to be favorable to him. The Court will not, therefore, be drawn into speculations regarding
what the municipal auditor would have said had he appeared and testified.

Four. Ysidoro insists that he acted in good faith since, first, the idea of using the SFP goods for the
CSAP beneficiaries came, not from him, but from Garcia and Polinio; and, second, he consulted the
accounting department if the goods could be distributed to those beneficiaries. Having no criminal
intent, he argues that he cannot be convicted of the crime.1âwphi1

But criminal intent is not an element of technical malversation. The law punishes the act of diverting
public property earmarked by law or ordinance for a particular public purpose to another public
purpose. The offense is mala prohibita, meaning that the prohibited act is not inherently immoral but
becomes a criminal offense because positive law forbids its commission based on considerations of
public policy, order, and convenience.13 It is the commission of an act as defined by the law, and not
the character or effect thereof, that determines whether or not the provision has been violated. Hence,
malice or criminal intent is completely irrelevant.14

Dura lex sed lex. Ysidoro’s act, no matter how noble or miniscule the amount diverted, constitutes the
crime of technical malversation. The law and this Court, however, recognize that his offense is not
grave, warranting a mere fine.

WHEREFORE, this Court AFFIRMS in its entirely the assailed Decision of the Sandiganbayan in Criminal
Case 28228 dated February 8, 2010.

SO ORDERED.

42

THIRD DIVISION

G.R. No. 156427             January 20, 2006

AMANDO TETANGCO, Petitioner
vs.
THE HON. OMBUDSMAN and MAYOR JOSE L. ATIENZA, JR., Respondents.

DECISION

QUISUMBING, J.:

This petition for certiorari seeks to annul and set aside the Order,1 dated April 16, 2002, of public
respondent Ombudsman in OMB-CC-02-0151-C which dismissed the Complaint of petitioner Amando
Tetangco against private respondent Mayor Jose L. Atienza, Jr., for violation of Article 220 2 of the
Revised Penal Code (RPC). Also assailed is the Order,3 dated August 1, 2002, denying the motion for
reconsideration.
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On March 8, 2002, petitioner filed his Complaint before the Ombudsman alleging that on January 26,
2001, private respondent Mayor Atienza gave P3,000 cash financial assistance to the chairman
and P1,000 to each tanod of Barangay 105, Zone 8, District I. Allegedly, on March 5, 2001, Mayor
Atienza refunded P20,000 or the total amount of the financial assistance from the City of Manila when
such disbursement was not justified as a lawful expense.

In his Counter-Affidavit, Mayor Atienza denied the allegations and sought the dismissal of the
Complaint for lack of jurisdiction and for forum-shopping. He asserted that it was the Commission on
Elections (COMELEC), not the Ombudsman that has jurisdiction over the case and the same case had
previously been filed before the COMELEC. Furthermore, the Complaint had no verification and
certificate of non-forum shopping. The mayor maintained that the expenses were legal and justified,
the same being supported by disbursement vouchers, and these had passed prior audit and
accounting.

The Investigating Officer recommended the dismissal of the Complaint for lack of evidence and merit.
The Ombudsman adopted his recommendation.

The Office of the Ombudsman, through its Over-all Deputy Ombudsman, likewise denied petitioner’s
motion for reconsideration.

Before us, petitioner assigns for resolution a single issue:

WHETHER OR NOT THE RESPONDENT OMBUDSMAN COMMITTED GRAVE ABUSE OF DISCRETION

WHEN IT DISMISSED THE CRIMINAL CHARGE AGAINST RESPONDENT MAYOR ATIENZA FOR
VIOLATION OF ART. 220 OF THE RPC DESPITE THE EXISTENCE OF A PRIMA FACIE CASE AND
PROBABLE CAUSE TO INDICT HIM FOR THE CRIME CHARGED OR, AT THE VERY LEAST, FOR
VIOLATION OF SEC. 3(e) OF R.A. NO. 3019 (ANTI-GRAFT AND CORRUPT PRACTICES ACT).4

The sole issue is, did the Ombudsman commit grave abuse of discretion in dismissing the Complaint?

Petitioner insists that Mayor Atienza illegally disbursed public funds when he gave the aforementioned
financial assistance to the chairman and tanods of Barangay 105 since the disbursement was not
authorized by law or ordinance, which the Ombudsman did not consider when it dismissed the
Complaint of petitioner. According to petitioner, the dismissal by the Ombudsman was capricious since
the evidence on record was clear that the mayor was guilty of graft and corruption.5

The Ombudsman, through the Solicitor General, contends that it did not abuse its discretion and there
was also no probable cause against private respondent for violation of Art. 220 of the RPC.6

For his part, Mayor Atienza avers that there was no grave abuse of discretion on the part of the
Ombudsman when it dismissed the Complaint.7

After considering the submissions of the parties, we find that the petition lacks merit. No grave abuse
of discretion is attributable to the Ombudsman.

It is well-settled that the Court will not ordinarily interfere with the Ombudsman’s determination of
whether or not probable cause exists except when it commits grave abuse of discretion. 8 Grave abuse
of discretion exists where a power is exercised in an arbitrary, capricious, whimsical or despotic
manner by reason of passion or personal hostility so patent and gross as to amount to evasion of
positive duty or virtual refusal to perform a duty enjoined by, or in contemplation of law.9 Thus, we
held in Roxas v. Vasquez,10

… this Court’s consistent policy has been to maintain non-interference in the determination of the
Ombudsman of the existence of probable cause, provided there is no grave abuse in the exercise of
such discretion. This observed policy is based not only on respect for the investigatory and prosecutory
powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well.

112
Otherwise, the functions of the Court will be seriously hampered by innumerable petitions assailing the
dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to
complaints filed before it, in much the same way that the courts would be extremely swamped with
cases if they could be compelled to review the exercise of discretion on the part of the fiscals or
prosecuting attorneys each time they decide to file an information in court or dismiss a complaint by a
private complainant.

In this case, the action taken by the Ombudsman cannot be characterized as arbitrary, capricious,
whimsical or despotic. The Ombudsman found no evidence to prove probable cause. Probable cause
signifies a reasonable ground of suspicion supported by circumstances sufficiently strong in themselves
to warrant a cautious man’s belief that the person accused is guilty of the offense with which he is
charged.11 Here, the Complaint merely alleged that the disbursement for financial assistance was
neither authorized by law nor justified as a lawful expense. Complainant did not cite any law or
ordinance that provided for an original appropriation of the amount used for the financial assistance
cited and that it was diverted from the appropriation it was intended for.

The Complaint charges Mayor Atienza with illegal use of public funds. On this matter, Art. 220 of the
Revised Penal Code provides:

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 damages or embarrassment shall have resulted to the public service. In either
case, the offender shall also suffer the penalty of temporary special disqualification.

If no damage or embarrassment to the public service has resulted, the penalty shall be a fine from 5 to
50 percent of the sum misapplied.

The elements of the offense, also known as technical malversation, are: (1) the offender is an
accountable public officer; (2) he applies public funds or property under his administration to some
public use; and (3) 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 or ordinance. It is clear 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.12 To constitute the crime, there must be a
diversion of the funds from the purpose for which they had been originally appropriated by law or
ordinance.13 Patently, the third element is not present in this case.

Conformably then with Section 2, Rule II of the Rules of Procedure of the Office of the
Ombudsman,14 the Investigating Officer may recommend the outright dismissal of a complaint if he
finds the same devoid of merit.15 That is exactly what happened in this case. Thus, no abuse of
discretion, much less grave abuse, may be attributed to the respondent Ombudsman.

WHEREFORE, the instant petition is DISMISSED for lack of merit. No pronouncement as to costs.

SO ORDERED.

FIRST DIVISION

43

G.R. No. 197567               November 19, 2014

GOVERNOR ENRIQUE T. GARCIA, JR., Petitioner,

vs.

113
 OFFICE OF THE OMBUDSMAN, LEONARDO B. ROMAN, ROMEO L. MENDIOLA, PASTOR P.
VICHUACO, AURORA J. TIAMBENG, and NUMERIANO G. MEDINA, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for certiorari1 are the Resolution2 dated May 30, 2006 and the Order3 dated
October 9, 2009 of the Office of the Ombudsman (Ombudsman) in OMB-L-C-05-0084-A, which
dismissed the criminal complaint against herein respondents for lack of probable cause.

The Facts

The present case stemmed from a Complaint-Affidavit4 filed by herein petitioner Enrique T. Garcia, Jr.
(Garcia), incumbent Provincial Governor of the Province of Bataan (Province), before the Ombudsman,
docketed as OMB-L-C-05-0084-A, against respondents former Provincial Governor Leonardo B. Roman
(Roman), former Executive Assistant Romeo L. Mendiola (Mendiola), former Provincial Treasurer Pastor
P. Vichuaco (Vichuaco), former Budget Officer Aurora J. Tiambeng (Tiambeng), and
incumbent5 Provincial Accountant Numeriano G. Medina (Medina), all of the Provincial Capitol of
Bataan, charging them with Malversation of Public Funds through Falsification of Public Documents
under Article 217 in relation to Article 171 of the Revised Penal Code (RPC) and violation of Section 3,
paragraphs (a) and (e) of Republic Act No. (RA) 3019, or the "Anti-Graft and Corrupt Practices Act,"
inter alia.

Also charged were incumbent6 Provincial Engineer Amelia R. De Pano (De Pano), Assistant Provincial
Engineer Angelito A. Rodriguez (Rodriguez), Engineer Noel G. Jimenez (Jimenez), and Architect
Bernardo T. Capistrano (Capistrano), as well as Noel Valdecañas7 (Valdecañas), the owner and
manager of V.F. Construction of Balanga City.

The essential allegations in the Complaint-Affidavit are as follows:

On November 3, 2003, Roman, being the Provincial Governor at that time, entered into a
contract8 with V.F. Construction, as represented by Valdecañas, for the construction of a mini-theater
at the Bataan State College - Abucay Campus, Abucay, Bataan (project) for the contract price of
₱3,660,000.00.9

Thereafter, or on February 23, 2004, Roman signed and issued a Certificate of Acceptance, 10 stating
that the project was "100% completed in accordance with plans and specification[s]" per the
Accomplishment Report11 and Certification,12 both dated February 20, 2004, prepared and signed by
Capistrano, Jimenez, Rodriguez, and De Pano. Valdecañas also affixed his signature on the said
Accomplishment Report and later executed an Affidavit13 dated May 26, 2004 stating that the project
was 100% completed.

In view of the project’s purported completion, two (2) Land Bank of the Philippines checks 14 (Land
Bank checks) – each in the amount of ₱1,655,318.18 (or ₱3,310,636.36 in total) – were respectively
issued by Roman and Vichuaco on April 30 and June 2, 2004 in favor of V.F. Construction. The
issuances were made pursuant to two (2) separate Disbursement Vouchers15 prepared and issued by
De Pano, Medina, and Vichuaco, and approved for payment by Roman. In addition, an Allotment and
Obligation Slip16 (ALOBS) was issued, prepared, and signed by De Pano, Tiambeng, and Medina to
reimburse V.F. Construction for the cost of the labor and materials utilized for the construction of the
project. Tiambeng also certified in the ALOBS the "existence of [an] appropriation" for the said
project.17 Meanwhile, Mendiola prepared all the supporting documents for the approval and release of
the funds therefor, and submitted the same to Roman for his signature.18

The receipts issued by V.F. Construction dated May 5, 200419 and June 3, 200420 show that it received
the payments for the project.

114
Notwithstanding the various documents attesting to the project’s supposed completion, as well as the
disbursement of funds in payment therefor, Garcia – Roman’s successor as Provincial Governor –
authorized the inspection of the project sometimein August 2004 and discovered that while its
construction was indeed commenced, it remained unfinished as reflected in a Memorandum
Report21 dated August 24, 2004.

Hence, Garcia filed the above-mentioned Complaint-Affidavit against, among others, respondents,
who, in response, proffered their individual defenses.22

For his part, Roman cited political enmity between him and Garcia as the reason for the filing of the
complaint.23 He defended the genuineness of the project, averring that it was not a "ghost project" as,
in fact, substantial work had been done thereon.24 He ascribed the falsehood in this case to the
Accomplishment Report and Certification dated February 20, 2004, as well as Valdecañas’s Affidavit,
which all stated that the project was 100% completed, claiming that he had no participation in their
preparation and execution25 and that he only signed the Disbursement Vouchers after finding no
irregularities on the said documents.26

Similarly, Mendiola denied any participation in the preparation and execution of any of the documents
involved in the project.27

On the other hand, Vichuaco admitted having signed the Disbursement Vouchers and Land Bank
checks, from which the project was funded, but denied having any knowledge that the construction
thereof was not yet completed.28 He claimed to have signed the Disbursement Vouchers only after
having ascertained that De Pano and Medina, in their official capacities, had already signed the same,
and ventured that he would not have done so had he known that the project was not yet complete.29

Medina also admitted having signed the Disbursement Vouchers and ALOBS, but claimed that he did so
after a thorough examination of the supporting documents, i.e., the Accomplishment Report and
Certification. He stated that he was not informed that the project was not yet completed when he
signed the Disbursement Vouchers and the ALOBS, adding that the project was already substantially
completed when Garcia prevented further work on the same.30 He further insisted that the project was
covered by a corresponding appropriation.31

Meanwhile, Tiambeng claimed that, as the Budget Officer of Bataan at the time, she verified that there
was a corresponding appropriation for the project. Thus, she signed the ALOBS, which she claimed was
a ministerial duty on her part.32 In this regard, she posited that she would not have signed the same
had she known that there was no appropriation for the project.33

As for the other officials charged, namely, De Pano, Rodriguez, Jimenez, and Capistrano, they
collectively admitted having signed the Accomplishment Report and Certification, but maintained that
they did so only after the same had been reviewed by the other provincial engineers. 34 Valdecañas, for
his part, denied35 the allegations against him and claimed that Medina borrowed his contractor’s
accreditation in order to participate in the bidding for the project. He pointed out that it was Medina
who actually participated in the bidding process and that his signature appearing on the documents
pertaining to the project was falsified.36 He added that he was out of the country when payments for
the project were made.37

The Ombudsman Ruling

In a Resolution38 dated May 30, 2006, the Ombudsman found probable cause to indict De Pano,
Rodriguez, Jimenez, and Capistrano for the crime of Falsification of Public Documents by making it
appear through the aforesaid Certification and Accomplishment Report that the project had already
been completed when the same was only partially constructed. The Ombudsman held that their report
was necessary for the issuance of a certification for the disbursement of funds therefor.39

115
On the other hand, the Ombudsman cleared respondents from liability on the ground of insufficiency of
evidence, reasoning that "mere signature on a voucher or certification is not enough" to establish any
conspiracy among them which would warrant their conviction. 40 Relying on the doctrine enunciated in
the case of Arias v. Sandiganbayan 41 (Arias) which states that "[a]ll heads of offices have to rely to a
reasonable extent on their subordinates and on the good faith ofthose who prepare bids, purchase
supplies, or enter into negotiations," 42 the Ombudsman held that there was "no direct and strong
evidence that [Roman] participated in the fraudulent act/transaction"43 and that his act, together with
that of the other respondents, was protected by the "legal presumption of good faith and
regularity,"44 which Garcia failed to overcome.

Oddly, no pronouncement was made with regard to the criminal charges against Valdecañas.45

Dissatisfied, Garcia moved for reconsideration,46 citing the Commission on Audit’s (CoA) Audit
Observation Memorandum (AOM) No. 2005-004-100 (2004)47 dated April 21, 2005 (CoA Memo), which
stated that the project had no source of funds, thus rendering the contract therefor void and the
payments made therefor illegal.48 Moreover, by approving and effecting the payment of the project
despite its non-completion and the absence of an allotment therefor, Garcia claimed that respondents,
who acted in conspiracy with each other, should beheld liable this time for the crime of Technical
Malversation under Article 22049 of the RPC.50

In an Order51 dated October 9, 2009, the Ombudsman denied Garcia’s motion for reconsideration,
hence, this certiorari petition.

The Issue Before the Court

The central issue for the Court’s resolution is whether or not the Ombudsman gravely abused its
discretion in dismissing all the criminal charges against respondents for lack of probable cause. In his
certiorari petition, Garcia maintains that the findings in the CoA Memo are sufficient to establish
probable cause and to hold respondents for trial for the crimes of Technical Malversation, Malversation
of Public Funds through Falsification of Public Documents, and for Violation of Section 3 (e) of RA
3019.52 As it appears, the other criminal and administrative charges contained in his complaint-
affidavit53 were not anymore discussed in the said petition.Thus, the Court is constrained to confine its
analysis only to what has been alleged therein.

The Court's Ruling

The petition is partly meritorious.

I.

The present Constitution and RA 6770,54 otherwise known as the "Ombudsman Act of 1989," have
endowed the Office of the Ombudsman with wide latitude, in the exercise ofits investigatory and
prosecutorial powers, to pass upon criminal complaints involving public officials and
employees.55 Hence, as a general rule, the Court does not interfere with the Ombudsman’s findings and
respects the initiative and independence inherent in its office, which "beholden to no one, acts as the
champion of the people and the preserver of the integrity of the public service."56

The foregoing principle does not, however, apply when the Ombudsman’s ruling is tainted with grave
abuse of discretion, subjecting the same to certiorari correction. Among other instances, the
Ombudsman may be deemed to have gravely abused its discretion when it unjustifiably fails to take
essential facts and evidence into consideration in the determination of probable cause.57 It may also be
committed when the Ombudsman patently violates the Constitution, the law or existing jurisprudence.
Indeed, any decision, order or resolution of a tribunal tantamount to overruling a judicial
pronouncement of the highest Court is unmistakably grave abuse of discretion.58

116
Legally classified, such misdeeds fall squarely within the concept of grave abuse of discretion which is
defined as the capricious and whimsical exercise of judgment on the part of the public officer
concerned, which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be so
patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law as where the poweris exercised in an arbitrary
and despotic manner by reason of passion or hostility.59

Applying these principles to thiscase, the Court finds that the Ombudsman gravely abused its
discretion when it disregarded the CoA Memo and patently misapplied existing jurisprudence –
particularly, the Ariascase – in ruling that there was no probable cause for the crime of Violation of
Section 3 (e),60 RA 3019. Accordingly, respondents should be indicted for such. However, the same
does not hold true for the other crimes of Technical Malversation and Malversation of PublicFunds
through Falsification of Public Documents for reasons that will be hereinafter discussed.

II.

Probable cause, for the purpose of filing a criminal information, exists when the facts are sufficient to
engender a well-founded belief that a crime has been committed and that the respondent is probably
guilty thereof. To engender a well-founded belief that a crime has been committed, and to determine if
the suspect is probably guilty of the same, the elements of the crime charged should, in all reasonable
likelihood, be present. This is based on the principle that every crime is defined by its elements,
without which there should be, at the most, no criminal offense.61

The elements of the crime of Violation of Section 3 (e), 62 RA 3019 are as follows: (a) the offender must
be a public officer discharging administrative,judicial, or official functions; (b) he must have acted with
manifest partiality, evident bad faith or gross inexcusable negligence; and (c) his action caused any
undue injury to any party, including the government, or gave any private party unwarranted benefits,
advantage or preference in the discharge of his functions.63

Considering the findings contained in the CoA Memo, which the Ombudsman, however, disregarded, it
is quite clear that all the foregoing elements are, in all reasonable likelihood, present with respect to
respondents’ participation in this case.

Respondents, who were all public officers at the time of the alleged commission of the crime –
particularly, as provincial officials of Bataan discharging administrative functions (first element) –
apparently acted with manifest partiality, evident bad faith – or, at the very least, gross inexcusable
negligence – when they issued the pertinent documents and certifications that led to the diversion of
public funds to a project that had no proper allotment, i.e., the mini-theater project (second element).
The absence of such allotment not only renders invalid the release of funds therefor but also taints the
legality of the project’s appropriation64 as well as the Province’s contract with V.F. Construction. As the
CoA Memo pertinently explains:

Four contracted infrastructure projects and a financial assistance extended to [the] barangay by your
administration amounting to ₱5,404,000 and ₱100,000, respectively, were found devoid of valid
appropriations. Of the amounts, ₱4,992,750 was already paid while the remaining balance of ₱511,250
was lodged to Accounts Payable. The non-existence of valid appropriations rendered the contracts void
and the payments illegal.

The said projects were among the 19 provided with appropriations totalling ₱14,005,000 in the
[P]rovince’s 2003 Closing Budgets embodied under Ordinance No. A-6 and approved by the
Sangguniang Panlalawigan in its Resolution No. 54 on February 23, 2004.

The validity of the appropriations and the subsequent transactions were not considered in audit due
tolack of legal basis, to wit:

a. No sources of funds for the ₱14.005M appropriation rendering it invalid

117
The ₱43,487,527.16 computed source/available balance for the ₱14,005,000 appropriation was already
used as the beginning available balance in the computation of the Estimated Revenues and Receipts
considered in the earlier approved CY 2004 Annual General Fund Budget contained in Appropriation
Ordinance No. 2 and passed under S.P. Resolution No. 6 on January 12, 2004 (Please see Annex A
[with the heading "Supplemental Appropriations of ₱14,005,000. CY 2003 Closing Budget]). Sec. 321
of RA 7160 provides, among others, that:

"No ordinance providing for a supplemental budget shall be enacted, except when supported by funds
actually available as certified by the local treasurer or by new revenue sources."

b. Non-release of allotments for the ₱14.005 M appropriation

Allotment is the authorizationissued by the Local Chief Executive (LCE) to a department/office of the
LGU, which allows it to incur obligations, for specified amounts, within the appropriation ordinance.
(Sec. 08, Manual on the NGAS for LGUs, Volume I).

As verified from the Accounting and Budget offices, no allotments were released for the projects, hence
the incurrence of the obligations were not authorized. In spite of this, the amount of ₱14,005,000 was
taken up among the continuing appropriations/allotments in CY 2004. Also, Allotment and Obligation
Slips (ALOBS) which serve as the LGU commitments to pay were certified for eight of the projects in
the amount of ₱7,816,000.65 (Emphases and underscoring supplied)

To be clear, the nineteen (19) projects mentioned in the CoA Memo were listed under "Annex
B"66 thereof entitled "Schedule of Contracted Projects and Financial Assistance Out ofInvalid
Appropriations, CY 2004," all of which had no allotments issued. First and foremost on the list is the
construction of the mini-theater project. A similar CoA memorandum, AOM No. 2004-2667 dated
September 6, 2004, which was also ignored by the Ombudsman, contains the same audit results with
regard to the lack of a valid allotment for the project. Thus, absent compliance with this basic
requirement, the authorizations made by respondents in relation to the project were therefore prima
facie tainted with illegality, amounting to either manifest partiality, evident bad faith, or, at the very
least, to gross inexcusable negligence. Indeed, it is reasonable to expect that respondents – being the
Province’s accountable officers at that time – had knowledge of the procedure on allotments and
appropriations. Knowledge of basic procedure is part and parcel of respondents’ shared fiscal
responsibility under Section 305 (l) of RA 7160, viz.:

Section 305. Fundamental Principles.- The financial affairs, transactions, and operations of local
government units shall be governed by the following fundamental principles:

xxxx

(l) Fiscal responsibility shall beshared by all those exercising authority over the financial affairs,
transactions, and operations of the local government units; x x x.

Hence, unless the CoA’s findings are substantially rebutted, the allotment’s absence should have
roused respondents’ suspicions, as regards the project’s legality, and, in consequence, prevented them
from approving the disbursements therefor. This is especially true for Roman, who, as the Local Chief
Executive of the Province at that time, was primarily charged with the issuance of allotments. 68 As
such, he was in the position to know if the allotment requirement had, in the first place, been complied
with, given that it was a pre-requisite before the project could have been contracted.

In addition, the Court observes the same degree of negligence on the part of respondents in seemingly
attesting to the project’s 100% completion when such was not the case. The erroneous certification
rendered the disbursements made by the Province suspect as V.F. Construction had still to fulfill its
contractual obligations to the Province and yet were able to receive full payment.

118
Considering that the illegal diversion of public funds for the mini theafter project would undermine the
execution of other projects legitimately supported by proper allotments, it is quite obvious that undue
injury on the part of the Province and its residents would be caused. Likewise, considering that V.F.
Construction had already received full payment for a project that had yet to be completed,it also
appears that a private party was given unwarranted benefits by respondents inthe discharge of their
functions (third element).

Thus, with the elements of the crime of Violation of Section 3 (e), RA 3019 herein ostensibly present,
the Court hereby holds that the Ombudsman committed grave abuse of discretion whenit dismissed
said charge against respondents.

That the Ombudsman had not, in any manner, mentioned the two (2) CoA AOMs, i.e., AOM Nos. 2005-
004-100 (2004) (i.e., the CoA Memo) and 2004-26, in its ruling leads the Court to believe that it
deliberately failed to consider the same. As the Court sees it, these are significant pieces of evidence
which should not have been casually ignored. This stems from a becoming respect which all
government agencies should accord to the CoA’s findings. Verily, being the constitutionally-mandated
audit arm of the government, the CoA is vested with broad powers over all accounts pertaining to
government revenue and expenditures and the uses of public funds and property. 69 As held in the case
of Belgica v. Ochoa, Jr.:70

[I]t is the general policy of the Court to sustain the decisions of administrative authorities, especially
onewhich is constitutionally-created, such as the CoA, not only on the basis of the doctrine of
separation of powers but also for their presumed expertise in the laws they are entrusted to enforce.
Findings of administrative agencies are accorded not only respect but also finality when the decision
and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of
discretion. It is only when the CoA has acted without or in excess of jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, that this Court entertains a petition questioning
its rulings.71

With the weight accorded to the CoA’s findings, the Ombudsman should have, at the very least,
explained its reasons as to why the two (2) CoA AOMs had no bearing in this case. However, no such
explanation was herein made. As such, the Court holds that the Ombudsman committed grave abuse
of discretion in this respect.

Palpable too is the Ombudsman’s grave abuse of discretion by its misplaced reliance on the Arias
doctrine.1âwphi1

The factual circumstances which led to the Court’s ruling in Arias were such that there was nothing else
in the documents presented before the head of office therein that would haverequired the detailed
examination of each paper or document, viz.:

We can, in retrospect, argue that Arias should have probed records, inspected documents, received
procedures, and questioned persons. It is doubtful if any auditor for a fairly-sized office could
personally do all these things in all vouchers presented for his signature. The Court would be asking for
the impossible. All heads of offices have to rely to a reasonable extent on their subordinates and on the
good faith of those who prepare bids, purchase supplies, or enter into negotiations. If a department
secretary entertains important visitors, the auditor isnot ordinarily expected to call the restaurant
aboutthe amount of the bill, question each guest whether he was present at the luncheon, inquire
whether the correct amount of food was served, and otherwise personally look into the reimbursement
voucher’s accuracy, propriety, and sufficiency. There has to be some added reason why he should
examine each voucher in such detail. Any executive head of even small government agencies or
commissions can attest to the volume ofpapers that must be signed. x x x.72 (Emphasis supplied)

Simply put, when a matter is irregular on the document’s face, so much so that a detailed examination
becomes warranted, the Arias doctrine is unavailing.

119
Here, it cannot be denied that the absence of an allotment for the project already rendered all related
documents/transactions irregular on their face. By this fact alone, respondents ought to have known
that something was amiss. To echo the CoA Memo, Section 321 of RA 7160 provides, among others,
that "[n]o ordinance providing for a supplemental budget shall be enacted, except when supported by
funds actually availableas certified by the local treasurer or by new revenue sources." Section 8,
Chapter 3 of the Manual on the NGAS for LGUs, Volume I further defines an "[a]llotment [as] the
authorizationissued by the Local Chief Executive (LCE) to a department/office of the LGU, which allows
it to incur obligations, for specified amounts, within the appropriation ordinance." Since the mini-
theater project was an appropriation made in a supplemental budget, then there should have been
funds certified to be actually available for such appropriation to even be made. However, as the CoA
found, no such funds were certified as available. Likewise, the project had no supporting allotment,
which means thatthere was basically no authority for the provincial officials, i.e., respondents, to even
incur the obligations under the V.F. Construction contract, much morefor them to disburse the funds in
connection therewith. Section 344 of RA 7160 provides:

Section 344. Certification on, and Approval of, Vouchers.- No money shall be disbursed unless the local
budget officer certifies to the existence of appropriation that has been legally made for the purpose,
the local accountant has obligated said appropriation, and the local treasurer certifies to the availability
of funds for the purpose. x x x.

xxxx

With these apparent irregularities, it is quite perplexing how the Ombudsman could have applied the
Arias doctrine in support of its ruling, especially with respect to the charge of Violation of Section 3 (e),
RA 3019. Thus, by patently misapplying existing jurisprudence, the Court finds that the Ombudsman
also committed a grave abuse of discretion on this score and its ruling, in these aspects, must
bereversed and set aside. In fine, the Ombudsman is ordered to file in the proper court the necessary
Information against respondents for violating Section 3 (e), RA 3019.

That being said, the Court proceeds to discuss the other charges contained in Garcia’s petition. III.

As earlier stated, Garcia, in his petition, also seeks that respondents be indicted for the crimes of
Technical Malversation, and Malversation of Public Funds through Falsification of Public Documents.
However, unlike the charge for the crime of Violation of Section 3 (e), RA 3019, the Court is unable to
render the same disposition.

First, while Garcia insists upon the sufficiency of his evidence to indict respondents for Technical
Malversation, the Court cannot pass upon this issue, considering that the Complaint-Affidavit filed
before the Ombudsman originally charged respondents not with Technical Malversation under Article
22073 of the RPC, but with Malversation of Public Funds through Falsification of Public Documents,
defined and penalized under Article 217,74 in relation to Article 17175 of the RPC, a complex crime.76 It
bears stressing that the elements of Malversation of Public Funds are distinctly different from those of
Technical Malversation. In the crime of Malversation of Public Funds, the offender misappropriates
public funds for his own personal useor allows any other person to take such public funds for the
latter’s personal use. On the other hand, 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.77 Technical Malversation does not include, or
is not necessarily included in the crime of Malversation of Public Funds.78

Since the acts supposedly committed by respondents constituting the crime of Technical Malversation
were not alleged in the Complaint Affidavit and the crime for which respondents raised their respective
defenses was not Technical Malversation, the petition must perforce be denied on this score.
Otherwise, the Court would be sanctioning a violation of respondents’ constitutionally-guaranteed right
to be informed of the nature and cause of the accusation against them, so as to deny them a
reasonable opportunity to suitably prepare their defense.79
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Finally, with respect to the chargeof Malversation of Public Funds through Falsification of Public
Documents, the Court observes that there lies no evidence which would give a prima facieindication
that the funds disbursed for the project were misappropriated for any personal use. The CoA Memo
shows that the Province’s funds were used for a public purpose, i.e., the mini-theater project, albeit
without any allotment issued therefor. Garcia also fails to convince the Court that the Province’s funds
were diverted to some personal purpose. Failing in which, the Court cannot pronounce that the
Ombudsman committed a grave abuse of discretion in dismissing such charge.

As it stands, Garcia’s petition is granted only in part as respondents should be indicted for the lone
crime of Violation of Section 3 (e), RA 3019 for the reasons above-discussed. It must, however, be
clarified that the dismissal of the charge of Technical Malversation is without prejudice to its proper re-
filing unless barred by prescription, considering that such dismissal was based merely on procedural
grounds and is not, in any way, tantamount to an acquittal. WHEREFORE, the petition is PARTLY
GRANTED. The Resolution dated May 30, 2006 and the Order dated October 9, 2009 of the Office of
the Ombudsman in OMB-L-C-05-0084-A, insofar as they dismissed the criminal charge against
respondents Leonardo B. Roman, Romeo L. Mendiola, Pastor P. Vichuaco, Aurora J. Tiambeng, and
Numeriano G. Medina (respondents), for Malversation of Public Funds through Falsification of Public
Documents, are AFFIRMED. However, the said Resolution and Order, insofar as they dismissed the
criminal charge against respondents for violation of Section 3 (e), Republic Act No. (RA) 3019 or the
"Anti-Graft and Corrupt Practices Act" are REVERSED and SET ASIDE. The Ombudsman is ORDERED to
file in the proper court the necessary Information for violation of Section 3 (e), RA 3019 against
respondents. Finally, for reasons herein discussed, the criminal charge against respondents for
Technical Malversation is DISMISSED, without prejudice to its proper re-filing.

SO ORDERED.

44

SECOND DIVISION

G.R. No. 165132               March 7, 2012

OFFICE OF THE OMBUDSMAN, Petitioner,

vs.
NELLIE R. APOLONIO, Respondent.

DECISION

BRION, J.:

Through a petition for review on certiorari,1 petitioner Office of the Ombudsman (Ombudsman) seeks
the reversal of the decision2 dated March 23, 2004 of the Court of Appeals (CA) in CA-G.R. SP No.
73357 and the resolution dated August 23, 2004, which dismissed the Ombudsman’s Motion for
Reconsideration. The assailed decision annulled and set aside the decision of the Ombudsman dated
August 16, 20023 (docketed as OMB ADM-0-01-0405), finding Dr. Nellie R. Apolonio guilty of grave
misconduct and dishonesty.

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THE FACTUAL ANTECEDENTS

Dr. Apolonio served as the Executive Officer of the National Book Development Board (NBDB) from
1996 to August 26, 2002. As NBDB’s executive officer, Dr. Apolonio supervised NBDB’s Secretariat and
managed its day-to-day affairs.4

In December 2000, NBDB’s Governing Board approved the conduct of a Team Building Seminar
Workshop for its officers and employees. The workshop was scheduled to be a two-day event, to be
held on December 20-21, 2000.5

On March 29, 1995, the Department of Budget and Management (DBM) issued National Budget Circular
No. 4426 prescribing a ₱900.00 limit for each participant per day in any seminar/workshop/conference
undertaken by any government agency. In compliance with the circular, the NBDB disbursed the
amount of ₱108,000.00 to cover the ₱1,800.00 allowance of the 60 employees for the two-day event.7

Prior to the conduct of the workshop, some of the employees/participants approached Dr. Apolonio to
ask whether a part of their allowance, instead of spending the entire amount on the seminar, could be
given to them as cash. Dr. Apolonio consulted Rogelio Montealto, 8 then Finance and Administrative
Chief of NBDB, about the proposal and the possible legal repercussions of the proposal. Concluding the
proposal to be legally sound and in the spirit of the yuletide season, Dr. Apolonio approved the
request.9 Thus, after the end of the workshop, SM gift cheques were distributed to the participants in
lieu of a portion of their approved allowance.10

Proceedings before the Ombudsman

On August 24, 2001, Nicasio I. Marte, an NBDB Consultant, filed a complaint against Dr. Apolonio and
Mr. Montealto before the Ombudsman. The complaint alleged that Dr. Apolonio and Mr. Montealto
committed grave misconduct, dishonesty and conduct prejudicial to the best interest of the service for
the unauthorized purchase and disbursement of the gift cheques. Mr. Marte alleged that the NBDB’s
Governing Board never authorized the disbursement of the funds for the purchase of the gift cheques
and that the purchases were never stated in Dr. Apolonio’s liquidation report.11

In her response, Dr. Apolonio invoked good faith12 in the purchase of the gift cheques, having in mind
the best welfare of the employees who, in the first place, requested the use of part of the budget for
distribution to the employees.

On April 3, 2002,13 Graft Investigation Officer (GIO) Plaridel Oscar J. Bohol found Dr. Apolonio and Mr.
Montealto administratively liable for conduct prejudicial to the best interest of the service, but
exonerated them from the charges of grave misconduct and dishonesty. GIO Bohol recommended the
imposition of suspension for six (6) months and one (1) day without pay.

GIO Bohol’s recommendation was not acted favorably by then Acting Ombudsman Margarito Gervacio,
Jr. who adopted the recommendation of GIO Julita M. Calderon. GIO Calderon’s recommendation was
embodied in a memorandum dated August 16, 2002.14 In her memorandum, GIO Calderon found Dr.
Apolonio and Mr. Montealto guilty of gross misconduct and dishonestly, in addition to the charge of
conduct grossly prejudicial to the best interest of the service. Consequently, GIO Calderon
recommended that Dr. Apolonio and Mr. Montealto be dismissed from the service.15

GIO Calderon found that Dr. Apolonio illegally converted the use of her cash advance, which was solely
intended for the workshop, for the purchase of the gift cheques. In doing so, she "abused her authority
as the Executive Director of NBDB [and] disregarded the authority of the Board."16 GIO Calderon
described Dr. Apolonio’s act as a criminal act of technical malversation. 17 Further, even if a clamor
among the participants occurred, the clear provisions of Section 89 of Presidential Decree No. (PD)
1445, otherwise known as the "Government Auditing Code of the Philippines," prohibit Dr. Apolonio
from releasing the cash advance for a purpose other than that legally authorized. 18 The supposed
"noble purpose" for the technical malversation does not negate the illegality of the act.
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On August 21, 2002, the Acting Ombudsman approved the findings of GIO Calderon, thereby imposing
the penalty of removal against Dr. Apolonio. The Acting Ombudsman likewise denied Dr. Apolonio’s
motion for reconsideration on September 18, 2002. This prompted Dr. Apolonio to file a petition for
review on certiorari in the CA.

Proceedings before the CA

On March 23, 2004, the CA granted the petition, adjudicating the following issues in Dr. Apolonio’s
favor.

First, the Ombudsman does not possess the power to directly impose the penalty of removal against a
public official. In reaching this conclusion, the CA cited Section 13(3), Article XI of the Constitution
which shows that the Ombudsman only possesses recommendatory functions in the removal,
suspension, demotion, fine, censure or prosecution of erring government officials and employees.19 The
CA addressed Section 21 of Republic Act No. (RA) 6770, otherwise known as "The Ombudsman Act of
1989." It held that RA 6770 "cannot rise above the Constitution"20 and since it conflicts with the
provisions of Section 13(3), Article XI, the Ombudsman’s authority to impose penalties against public
officials or employees remains to be merely recommendatory.21

Second, Dr. Apolonio undeniably realigned a portion of the budget allotted for the workshop for the
purchase of the gift cheques. The CA noted, however, that not only is there no evidence that Dr.
Apolonio pocketed any amount from the realignment, but her decision to purchase the gift cheques
was "greatly influenced" by the appeal of the employee/participants. Thus, the CA held that Dr.
Apolonio did not intend to violate the law for a corrupt purpose, thereby negating the Ombudsman’s
findings that she committed grave misconduct.22

The CA likewise found that Dr. Apolonio’s acts do not constitute dishonesty because it was not shown
that she has predisposition to lie, defraud and deceive which are inimical to the interests of the public
service.23 Since she was motivated by the pleas of the employees and in the spirit of the yuletide
season, her actions lack an evil or corrupt motive. 24 Dr. Apolonio is, therefore, only liable for conduct
prejudicial to the best interest of the service, the conclusion reached and recommended by GIO Bohol.
The CA imposed the penalty of suspension for six (6) months, but due to her retirement from the
service, the amount corresponding to her salary for six months was deducted from her retirement
benefits.25

On April 16, 2004, the Ombudsman moved to intervene and reconsider the decision of the CA.
Although the CA granted the motion to intervene, it denied the motion for reconsideration in a
Resolution dated August 23, 2004.

THE OMBUDSMAN’S ARGUMENTS

In this petition, the Ombudsman maintains that the CA erred when it reversed the former’s decision
and held Dr. Apolonio only responsible for conduct prejudicial to the best interest of the service. The
Ombudsman maintains that Dr. Apolonio is guilty of grave misconduct for intentionally failing to secure
proper authorization from the NBDB’s Governing Board.26 That Dr. Apolonio was motivated by
"humanitarian considerations" due to the holidays is irrelevant because she "deliberately ignored the
limits of her own authority by allowing public funds to be converted to private use[.]" 27 Citing Ferriols v.
Hiam,28 the Ombudsman argues that the misappropriation of funds by an accountable officer for "her
personal benefit" constitutes dishonesty and serious misconduct prejudicial to the best interest of the
service. The Ombudsman further cites Section 168, Title 4, Article 1 of the Government Accounting and
Auditing Manual which clearly limits the "[u]se of moneys appropriated solely for the specific purpose
for which appropriated, and for no other, except when authorized by law or by a corresponding
appropriating body."29

123
The Ombudsman further takes issue with the CA’s findings that grave misconduct and dishonesty were
not proven because Dr. Apolonio did not gain from the transaction. In support of this assertion, the
Ombudsman points to an "apparent dissimilarity in the amounts actually received by the seminar
participants"30 from the amount appropriated for the workshop. Further, Dr. Apolonio herself was a
recipient of the gift cheques. Clearly, she profited from the illegal conversion of funds as well.

Addressing the Court’s obiter dictum31 in Tapiador v. Office of the Ombudsman,32 the Ombudsman
argues that the case has become moot because it found Dr. Apolonio guilty of conduct prejudicial to
the best interest of the service. To be sure, the Ombudsman likewise cited RA 6770 which gives it the
authority to "assess and impose commensurate administrative penalt[ies.]"33

DR. APOLONIO’S ARGUMENTS

Dr. Apolonio supports the CA decision on the limits of the Ombudsman’s authority to impose sanctions
on public officials, citing Section 13, Article XI of the Constitution and the deliberations of the
Constitutional Commission on this provision.34 According to her, the Constitution only grants the
Ombudsman recommendatory powers for the removal of a public official. 35 Thus, RA 6770, which
grants the Ombudsman actual powers to directly impose the penalty of removal, is unconstitutional
since it gives powers to the Ombudsman not granted by the Constitution itself. 36 Consequently, it was
erroneous for the CA to uphold GIO Bohol’s decision to impose a six-month suspension on her since the
Constitution only grants recommendatory powers to the Ombudsman.

THE ISSUES IN THIS PETITION

Based on the submissions of the parties, two issues are before us for resolution:

(1) Does the Ombudsman have the power to directly impose the penalty of removal from office against
public officials?

(2) Do Dr. Apolonio’s acts constitute Grave Misconduct?

THE COURT’S RULING

We rule in the Ombudsman’s favor and partially grant the petition.

The Ombudsman has the power to directly impose administrative penalties, including removal from
office

The Ombudsman has the power to impose the penalty of removal, suspension, demotion, fine,
censure, or prosecution of a public officer or employee, in the exercise of its administrative disciplinary
authority. The challenge to the Ombudsman’s power to impose these penalties, on the allegation that
the Constitution only grants it recommendatory powers, had already been rejected by this Court.

The Court first rejected this interpretation in Ledesma v. Court of Appeals,37 where the Court, speaking
through Mme. Justice Ynares-Santiago, held:

The creation of the Office of the Ombudsman is a unique feature of the 1987 Constitution. The
Ombudsman and his deputies, as protectors of the people, are mandated to act promptly on
complaints filed in any form or manner against officers or employees of the Government, or of any
subdivision, agency or instrumentality thereof, including government-owned or controlled corporations.
Foremost among its powers is the authority to investigate and prosecute cases involving public officers
and employees, thus:

Section 13. The Office of the Ombudsman shall have the following powers, functions, and duties:

124
(1) Investigate on its own, or on complaint by any person, any act or omission of any public official,
employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or
inefficient.

Republic Act No. 6770, otherwise known as The Ombudsman Act of 1989, was passed into law on
November 17, 1989 and provided for the structural and functional organization of the Office of the
Ombudsman. RA 6770 mandated the Ombudsman and his deputies not only to act promptly on
complaints but also to enforce the administrative, civil and criminal liability of government officers and
employees in every case where the evidence warrants to promote efficient service by the Government
to the people.

The authority of the Ombudsman to conduct administrative investigations as in the present case is
settled. Section 19 of RA 6770 provides:

SEC. 19. Administrative Complaints. – The Ombudsman shall act on all complaints relating, but not
limited to acts or omissions which:

(1) Are contrary to law or regulation;

(2) Are unreasonable, unfair, oppressive or discriminatory;

(3) Are inconsistent with the general course of an agency’s functions, though in accordance with law;

(4) Proceed from a mistake of law or an arbitrary ascertainment of facts;

(5) Are in the exercise of discretionary powers but for an improper purpose; or

(6) Are otherwise irregular, immoral or devoid of justification.

The point of contention is the binding power of any decision or order that emanates from the Office of
the Ombudsman after it has conducted its investigation. Under Section 13(3) of Article XI of the 1987
Constitution, it is provided:

Section 13. The Office of the Ombudsman shall have the following powers, functions, and duties:

xxxx

(3) Direct the officer concerned to take appropriate action against a public official or employee at fault,
and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure
compliance therewith. (Emphasis supplied)38

Dr. Apolonio’s invocation of our obiter dictum in Tapiador was likewise rejected in Ledesma, viz.:

Petitioner insists that the word "recommend" be given its literal meaning; that is, that the
Ombudsman’s action is only advisory in nature rather than one having any binding effect,
citing Tapiador v. Office of the Ombudsman, thus:

Besides, assuming arguendo, that petitioner [was] administratively liable, the Ombudsman has no
authority to directly dismiss the petitioner from the government service, more particularly from his
position in the BID. Under Section 13, subparagraph (3), of Article XI of the 1987 Constitution, the
Ombudsman can only "recommend" the removal of the public official or employee found to be at fault,
to the public official concerned.

For their part, the Solicitor General and the Office of the Ombudsman argue that the word
"recommend" must be taken in conjunction with the phrase "and ensure compliance therewith." The
proper interpretation of the Court’s statement in Tapiador should be that the Ombudsman has the
authority to determine the administrative liability of a public official or employee at fault, and direct

125
and compel the head of the office or agency concerned to implement the penalty imposed. In other
words, it merely concerns the procedural aspect of the Ombudsman’s functions and not its jurisdiction.

We agree with the ratiocination of public respondents. Several reasons militate against a literal
interpretation of the subject constitutional provision. Firstly, a cursory reading of Tapiador reveals that
the main point of the case was the failure of the complainant therein to present substantial evidence to
prove the charges of the administrative case. The statement that made reference to the power of the
Ombudsman is, at best, merely an obiter dictum and, as it is unsupported by sufficient explanation, is
susceptible to varying interpretations, as what precisely is before us in this case. Hence, it cannot be
cited as a doctrinal declaration of this Court nor is it safe from judicial examination.39

In denying Tapiador and the reasoning in that case, Ledesma traced the constitutional mandate of the
Ombudsman, as expressed in the intent of its framers and the constitutionality of RA 6770, viz.:

The provisions of RA 6770 support public respondents’ theory. Section 15 is substantially the same as
Section 13, Article XI of the Constitution which provides for the powers, functions and duties of the
Ombudsman. We draw attention to subparagraph 3, to wit:

SEC. 15. Powers, Functions and Duties. – The Office of the Ombudsman shall have the following
powers, functions and duties:

xxxx

(3) Direct the officer concerned to take appropriate action against a public officer or employee at fault
or who neglects to perform an act or discharge a duty required by law, and recommend his removal,
suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith; or enforce its
disciplinary authority as provided in Section 21 of this Act: Provided, That the refusal by any officer
without just cause to comply with an order of the Ombudsman to remove, suspend, demote, fine,
censure, or prosecute an officer or employee who is at fault or who neglects to perform an act or
discharge a duty required by law shall be a ground for disciplinary action against said officer[.]
(Emphasis supplied)

We note that the proviso above qualifies the "order" "to remove, suspend, demote, fine, censure, or
prosecute" an officer or employee – akin to the questioned issuances in the case at bar. That the
refusal, without just cause, of any officer to comply with such an order of the Ombudsman to penalize
an erring officer or employee is a ground for disciplinary action, is a strong indication that the
Ombudsman’s "recommendation" is not merely advisory in nature but is actually mandatory within the
bounds of law. This should not be interpreted as usurpation by the Ombudsman of the authority of the
head of office or any officer concerned. It has long been settled that the power of the Ombudsman to
investigate and prosecute any illegal act or omission of any public official is not an exclusive authority
but a shared or concurrent authority in respect of the offense charged. By stating therefore that the
Ombudsman "recommends" the action to be taken against an erring officer or employee, the provisions
in the Constitution and in RA 6770 intended that the implementation of the order be coursed through
the proper officer, which in this case would be the head of the BID.

It is likewise apparent that under RA 6770, the lawmakers intended to provide the Office of the
Ombudsman with sufficient muscle to ensure that it can effectively carry out its mandate as protector
of the people against inept and corrupt government officers and employees. The Office was granted
the power to punish for contempt in accordance with the Rules of Court. It was given disciplinary
authority over all elective and appointive officials of the government and its subdivisions,
instrumentalities and agencies (with the exception only of impeachable officers, members of Congress
and the Judiciary). Also, it can preventively suspend any officer under its authority pending an
investigation when the case so warrants.

126
The foregoing interpretation is consistent with the wisdom and spirit behind the creation of the Office
of the Ombudsman. The records of the deliberations of the Constitutional Commission reveal the
following:

MR. MONSOD:

Madam President, perhaps it might be helpful if we give the spirit and intendment of the Committee.
What we wanted to avoid is the situation where it deteriorates into a prosecution arm. We wanted to
give the idea of the Ombudsman a chance, with prestige and persuasive powers, and also a chance to
really function as a champion of the citizen.

However, we do not want to foreclose the possibility that in the future, The Assembly, as it may see fit,
may have to give additional powers to the Ombudsman; we want to give the concept of a pure
Ombudsman a chance under the Constitution.

MR. RODRIGO:

Madam President, what I am worried about is if we create a constitutional body which has neither
punitive nor prosecutory powers but only persuasive powers, we might be raising the hopes of our
people too much and then disappoint them.

MR. MONSOD:

I agree with the Commissioner.

MR. RODRIGO:

Anyway, since we state that the powers of the Ombudsman can later on be implemented by the
legislature, why not leave this to the legislature?

MR. MONSOD:

Yes, because we want to avoid what happened in 1973. I read the committee report which
recommended the approval of the 27 resolutions for the creation of the office of the Ombudsman, but
notwithstanding the explicit purpose enunciated in that report, the implementing law – the last one,
P.D. No. 1630 —did not follow the main thrust; instead it created the Tanodbayan, x x x.

xxxx

MR. MONSOD: (reacting to statements of Commissioner Blas Ople):

May we just state that perhaps the honorable Commissioner has looked at it in too much of an
absolutist position, The Ombudsman is seen as a civil advocate or a champion of the citizens against
the bureaucracy, not against the President. On one hand, we are told he has no teeth and he lacks
other things. On the other hand, there is the interpretation that he is a competitor to the President, as
if he is being brought up to the same level as the President.

With respect to the argument that he is a toothless animal, we would like to say that we are promoting
the concept in its form at the present, but we are also saying that he can exercise such powers and
functions as may be provided by law in accordance with the direction of the thinking of Commissioner
Rodrigo. We did not think that at this time we should prescribe this, but we leave it up to Congress at
some future time if it feels that it may need to designate what powers the Ombudsman need in order
that he be more effective. This is not foreclosed.

So, his is a reversible disability, unlike that of a eunuch; it is not an irreversible disability. (Emphasis
supplied)

127
It is thus clear that the framers of our Constitution intended to create a stronger and more effective
Ombudsman, independent and beyond the reach of political influences and vested with powers that are
not merely persuasive in character. The Constitutional Commission left to Congress to empower the
Ombudsman with prosecutorial functions which it did when RA 6770 was enacted. In the case of Uy v.
Sandiganbayan, it was held:

Clearly, the Philippine Ombudsman departs from the classical Ombudsman model whose function is
merely to receive and process the people’s complaints against corrupt and abusive government
personnel. The Philippine Ombudsman, as protector of the people, is armed with the power to
prosecute erring public officers and employees, giving him an active role in the enforcement of laws on
anti-graft and corrupt practices and such other offenses that may be committed by such officers and
employees. The legislature has vested him with broad powers to enable him to implement his own
actions. x x x. [emphasis and underscoring ours, citations excluded]40

The conclusion reached by the Court in Ledesma is clear: the Ombudsman has been statutorily granted
the right to impose administrative penalties on erring public officials. That the Constitution merely
indicated a "recommendatory" power in the text of Section 13(3), Article XI of the Constitution did not
deprive Congress of its plenary legislative power to vest the Ombudsman powers beyond those stated.

We affirmed and consistently applied this ruling in the cases of Gemma P. Cabalit v. Commission on
Audit-Region VII,41 Office of the Ombudsman v. Masing,42 Office of the Ombudsman v. Court of
Appeals,43 Office of the Ombudsman v. Laja,44 Office of the Ombudsman v. Court of Appeals,45 Office of
the Ombudsman v. Lucero,46 and Office of the Ombudsman v. Court of Appeals.47

To be sure, in the most recent case of Gemma P. Cabalit v. Commission on Audit-Region VII,48 this
Court reiterated the principle behind the grant of such powers to the Ombudsman, viz.:

The provisions in R.A. No. 6770 taken together reveal the manifest intent of the lawmakers to bestow
on the Office of the Ombudsman full administrative disciplinary authority. These provisions cover the
entire gamut of administrative adjudication which entails the authority to, inter alia, receive
complaints, conduct investigations, hold hearings in accordance with its rules of procedure, summon
witnesses and require the production of documents, place under preventive suspension public officers
and employees pending an investigation, determine the appropriate penalty imposable on erring public
officers or employees as warranted by the evidence, and, necessarily, impose the said penalty.  Thus, it
is settled that the Office of the Ombudsman can directly impose administrative sanctions. (emphasis
ours, citations excluded)

Contrary to the Ombudsman’s submissions, however, Dr. Apolonio is guilty of simple misconduct, not
grave misconduct or conduct prejudicial to the best interest of the service

We disagree with both the CA’s and the Ombudsman’s findings. Instead, we find Dr. Apolonio guilty of
simple misconduct.

At the outset, the Court notes that no questions of fact are raised in these proceedings. Both the
Ombudsman and Dr. Apolonio concede that the latter appropriated funds intended for the workshop to
a purpose other than the one stated and approved by the NBDB. Therefore, the only issue to be
determined is whether the purchase of the gift cheques constitutes a grave misconduct or, as found by
the CA, conduct prejudicial to the best interest of the service. As already stated, we find Dr. Apolonio
guilty of neither, and instead hold her liable for simple misconduct.

In Civil Service Commission v. Ledesma,49 the Court defined misconduct as "a transgression of some
established and definite rule of action, more particularly, unlawful behavior or gross negligence by a
public officer." We further stated that misconduct becomes grave if it "involves any of the additional
elements of corruption, willful intent to violate the law or to disregard established rules, which must be
established by substantial evidence."50 Otherwise, the misconduct is only simple.51 Therefore, "[a]

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person charged with grave misconduct may be held liable for simple misconduct if the misconduct does
not involve any of the additional elements to qualify the misconduct as grave."52

In Civil Service Commission v. Ledesma,53 respondent was found guilty of simple misconduct by this
Court when she accepted amounts meant for the payment of Environmental Compliance Certificates
and failed to account for ₱460.00. The Court noted that "[d]ismissal and forfeiture of benefits,
however, are not penalties imposed for all infractions, particularly when it is a first offense." 54 Despite
evidence of misconduct in her case, the Court emphasized that "[t]here must be substantial evidence
that grave misconduct or some other grave offense meriting dismissal under the law was committed."55

Further, in Monico K. Imperial, Jr. v. Government Service Insurance System,56 the Court considered
Imperial’s act of approving the salary loans of eight employees "who lacked the necessary contribution
requirements" under GSIS Policy and Procedural Guidelines No. 153-99 as simple misconduct. It
refused to categorize the act as grave misconduct because no substantial evidence was adduced to
prove the elements of "corruption," "clear intent to violate the law" or "flagrant disregard of
established rule" that must be present to characterize the misconduct as grave.

As in the cases of Civil Service Commission v. Ledesma 57 and Imperial, Dr. Apolonio’s use of the funds
to purchase the gift cheques cannot be said to be grave misconduct.

First, Dr. Apolonio’s actions were not attended by a willful intent to violate the law or to disregard
established rules. Although the Court agrees that Dr. Apolonio’s acts contravene the clear provisions of
Section 89 of PD 1445, otherwise known as the "Government Auditing Code of the Philippines," such
was not attended by a clear intent to violate the law or a flagrant disregard of established
rules.58 Several circumstances militate in favor of this conclusion.

Dr. Apolonio merely responded to the employees’ clamor to utilize a portion of the workshop budget as
a form of Christmas allowance. To ensure that she was not violating any law, Dr. Apolonio even
consulted Mr. Montealto, then Finance and Administrative Chief of the NBDB, on the possible legal
repercussions of the proposal. Likewise, aside from receiving the same benefit, there is no evidence in
the record that Dr. Apolonio unlawfully appropriated in her favor any amount from the approved
workshop budget. Therefore, we see no willful intent in Dr. Apolonio’s actions.

Second, we disagree with the Ombudsman’s insinuations that Dr. Apolonio’s acts may be considered
technical malversation and, therefore, constitute a crime. In Parungao v. Sandiganbayan, et al.,59 the
Court held that in the absence of a law or ordinance appropriating the public fund allegedly technically
malversed for another public purpose, an accused did not commit technical malversation as set out in
Article 220 of the Revised Penal Code.60 In that case, the Court acquitted Oscar P. Parungao (then a
municipal treasurer) of the charges of technical malversation even though he used funds allotted (by a
Department of Environment and Natural Resources circular) for the construction of a road project and
re-allocated it to the labor payroll of different barangays in the municipality. The Court held that since
the budget for the construction of the road was not appropriated by a law or by an ordinance for that
specified public purpose, the re-allocation of the budget for use as payroll was not technical
malversation.

Similarly, in this case, the budget allocation for the workshop was neither appropriated by law nor by
ordinance since DBM National Budget Circular No. 442 is not a law or an ordinance. Even if it had been,
however, it must be noted that DBM National Budget Circular No. 442 only prescribed the amounts to
be used for any workshop, conference or seminar.1âwphi1 It did not appropriate the specific amounts
to be used in the event in question.

Therefore, when Dr. Apolonio approved the purchase of the gift cheques using a portion of the
workshop’s budget, her act did not amount to technical malversation. Moreover, if her acts did, in fact,
constitute technical malversation, the Ombudsman ought to have filed a criminal case against her for
violation of Article 220 of the Revised Penal Code.

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We cannot likewise agree with the CA’s findings that Dr. Apolonio’s acts constitute merely as conduct
prejudicial to the best interest of the service. In Manuel v. Judge Calimag, Jr.,61 we held, viz.:

Misconduct in office has been authoritatively defined by Justice Tuazon in Lacson v. Lopez in these
words: "Misconduct in office has a definite and well-understood legal meaning. By uniform legal
definition, it is a misconduct such as affects his performance of his duties as an officer and not such
only as affects his character as a private individual. In such cases, it has been said at all times, it is
necessary to separate the character of the man from the character of the officer x x x[.] It is settled
that misconduct, misfeasance, or malfeasance warranting removal from office of an officer must have
direct relation to and be connected with the performance of official duties amounting either to
maladministration or willful, intentional neglect and failure to discharge the duties of the office x x x[.]
More specifically, in Buenaventura v. Benedicto, an administrative proceeding against a judge of the
court of first instance, the present Chief Justice defines misconduct as referring ‘to a transgression of
some established and definite rule of action, more particularly, unlawful behavior or gross negligence
by the public officer.’" [emphasis supplied, citations excluded]

Therefore, if a nexus between the public official’s acts and functions is established, such act is properly
referred to as misconduct. In Dr. Apolonio’s case, this nexus is clear since the approval of the cash
advance was well within her functions as NBDB’s executive officer.62

Contrast her situation, for example with the case of Cabalitan v. Department of Agrarian
Reform,63 where we held that "the offense committed by the employee in selling fake Unified Vehicular
Volume Program exemption cards to his officemates during office hours was not grave misconduct, but
conduct prejudicial to the best interest of the service." Further contrast Dr. Apolonio’s case
with Mariano v. Roxas,64 where "the Court held that the offense committed by a [CA] employee in
forging some receipts to avoid her private contractual obligations, was not misconduct but conduct
prejudicial to the best interest of the service because her acts had no direct relation to or connection
with the performance of her official duties."

CONCLUSION

Thus, we hold that Dr. Apolonio is guilty of simple misconduct. Although her actions do not amount to
technical malversation, she did violate Section 89 of PD 1445 when she approved the cash advance
that was not authorized by the NBDB’s Governing Board. Further, since the approval of the cash
advance was an act done pursuant to her functions as executive officer, she is not merely guilty of
conduct prejudicial to the best interest of the service.

WHEREFORE, we PARTIALLY GRANT the Office of the Ombudsman’s petition for review on certiorari,
and MODIFY the decision of the Court of Appeals in CA-G.R. SP No. 73357. We find Dr. Nellie R.
Apolonio GUILTY of SIMPLE MISCONDUCT. In the absence of any showing that this is her second
offense for simple misconduct, we impose the penalty of SUSPENSION for SIX MONTHS against Dr.
Apolonio,65 but due to her retirement from the service, we order the amount corresponding to her six-
month salary to be deducted from her retirement benefits.

No pronouncement as to costs.

SO ORDERED.

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