CASES DIRECT BRIBERY (Art. 210) [G.R. No. 156685. July 27, 2004] NAZARIO N. MARIFOSQUE, petitioner, vs.

PEOPLE OF THE PHILIPPINES, respondent. DECISION YNARES-SANTIAGO, J.: This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure which assails the decision dated September 23, 2002 and the Resolution dated January 3, 2003 of the Sandiganbayan in Criminal Case No. 17030 finding petitioner Nazario Marifosque guilty beyond reasonable doubt of the crime of direct bribery, defined and penalized under the second paragraph of Article 210 of the Revised Penal Code, as amended. Petitioner was charged with direct bribery in an Information which reads: That on or about October 13, 1990 in Legazpi City, Philippines and within the jurisdiction of this Honorable Court, the abovenamed accused a public officer being a qualified member of the Police Force of Legazpi City, now under the Philippine National Police, taking advantage of his official/public position and committing the crime herein charged in relation to his office, did then and there willfully, unlawfully, and feloniously demand, obtain and/or receive directly from Yu Su Pong1[1] and Hian Hian Sy2[2] the total amount of FIVE THOUSAND EIGHT HUNDRED PESOS (P5,800.00) Philippine Currency in consideration for his recovery from alleged robbers, eighteen Shellane gas filled cylinder/s tanks, to the damage and prejudice of the aforementioned victims in the aforesaid amount. CONTRARY TO LAW.3[3]
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The antecedent facts as culled from the records are as follows: On October 13, 1990 at around 5:00 in the afternoon, Hian Hian Yu Sy and her husband, Arsenio Sy, went to the office of Captain Alberto Salvo, Chief of the Intelligence and Operating Division stationed at the Criminal Investigation Service (CIS) in Region 5, to report the robbery of Shellane tanks at the gasoline station of her father, Yu So Pong, and the alleged extortion attempt by petitioner, Police Sergeant Narciso Marifosque, in exchange for the recovery of the lost items. Captain Salvo and his men set up a plan to entrap the petitioner. Hian Hian Yu Sy prepared the pay-off money in the amount of P4,800.00 and listed down the serial numbers of the bills. The pay-off was scheduled at 7:00 in the evening of that day in Golden Grace Department Store which was owned by Yu So Pong. At around 6:15 p.m., Captain Calvo and his men arrived at the target area and strategically positioned themselves outside the Golden Grace Department Store to await the arrival of the suspect. Shortly thereafter, petitioner Marifosque arrived on board a tricycle. He went inside the store and demanded the money from Hian Hian Yu Sy and Yu So Pong. The latter handed to him the marked money, which was wrapped in a newspaper. When petitioner stepped out of the store, Arsenio Sy gave the pre-arranged signal, whereupon the arresting operatives swooped down upon the suspect and arrested him. Hian Hian Yu Sy testified that petitioner demanded the amount of P7,200.00 but she bargained for P4,800.00 only because that was all she had at the time. She proposed that petitioner return the following morning to pick up the balance. By way of defense, petitioner Marifosque testified that in the morning of October 13, 1990, a police asset came to his house and reported that he witnessed a robbery at the gasoline station of Yu So Pong. Petitioner went to the gasoline station of Yu So Pong and relayed to him the information. Thereafter, petitioner and Yu So Pong proceeded to the police station to report the robbery to the desk officer, PFC Jesus Fernandez, who then dispatched petitioner and a certain Pat. Garcia to conduct an investigation. As they were leaving the police station, the asset approached petitioner asking if he could get P350.00 per cylinder tank as his reward. Petitioner relayed the message to Yu So Pong, who said he was amenable if that [was] the only

way to recover the cylinders and to apprehend the robbers.4[4] Based on information furnished by the asset, the police investigators proceeded to the house of Edgardo Arnaldo in San Roque Legazpi City, where they found the stolen gas tanks. The group loaded the gas tanks into the vehicle. Meanwhile, Arnaldo arrived. Petitioner did not arrest him at that time because he promised to lead them to the other stolen cylinder tanks.5[5] The group returned to the police station where petitioner made a written report of the recovery of the gas tanks. Elmer Arnaldo testified that he worked as an asset of the Legazpi City police force and occasionally received rewards from the police for any information of the criminal activities. On October 13, 1990 at around 4:00 in the morning, he went out to buy bread and saw three individuals stealing gas cylinder tanks in the nearby gasoline station. He later visited petitioner and reported to him the robbery. He went back to his house to feed the chickens. Sometime thereafter, he dropped by the police station to discuss with petitioner the reward of P350.00 per cylinder tank recovered. Petitioner gave him 1,000.00 and told him to return at 6:00 p.m. for the remainder. At 7:00 p.m., he and petitioner went to the store of Yu So Pong to collect the balance of the reward money. Petitioner went inside the store and Arnaldo, who was left outside, saw a woman giving him a folded newspaper. Suddenly, armed men apprehended the petitioner, so he ran away. On September 23, 2002, the Sandiganbayan rendered a decision convicting petitioner of direct bribery, the dispositive portion of which reads:6[6] WHEREFORE, in view of the foregoing and considering that the agreed act, which did not constitute a crime, was executed, judgment is hereby rendered finding the accused NAZARIO MARIFOSQUE Y NUEZ GUILTY beyond reasonable doubt of the crime of Direct Bribery, defined and penalized under the second paragraph of Art. 210 of the Revised Penal Code as amended.
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The accused is sentenced to an indeterminate penalty of imprisonment of 3 years 6 months and 5 days of Prision Correccional medium and maximum periods as the Minimum and 7 years, 8 months and 9 days of Prision Mayor minimum and medium periods as the Maximum considering that there is no mitigating nor aggravating circumstance and a fine in the amount of THREE THOUSAND PESOS (P3,000.00). The accused shall also suffer the penalty of special temporary disqualification. SO ORDERED.7[7] His motion for reconsideration having been denied, petitioner interposes the present appeal raising the following issues: I THE ACT OF PETITIONER RECEIPT OF THE SUMS OF MONEY FOR DELIVERY TO HIS ASSET DOES NOT CONSITUTE AN OFFENSE DEFINED AND PENALIZED UNDER SECOND PARAGRAPH OF ARTICLE 210 OF THE REVISED PENAL CODE, AS AMENDED. II THE HONORABLE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FINDING THE PETITIONER GUILTY BEYOND REASONABLE DOUBT OF THE CRIME OF DIRECT BRIBERY. 8[8] In the first assigned error, petitioner contends that the testimonies of the prosecution witnesses do not demonstrate with certainty that the receipt of the alleged bribe money constitutes the act punishable by the offense as defined by the Revised Penal Code. He draws attention to the following findings of fact by the appellate court, namely: (1) that he was not the one who asked for reward from private complainant Yu So Pong but the asset; and (2) that Hian Hian Yu Sy had no direct knowledge of the alleged transaction, i.e., the demand for money in consideration of the return/recovery of twenty-one
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Shellane gas tanks, between private complainant Yu So Pong and the accused. In the second assigned error, petitioner argues that the prosecution failed to establish his guilt beyond reasonable doubt because there was no competent evidence to prove that the amount was really intended for him and not for his asset. He anchors his defense on the fact that: (1) he merely relayed to Yu So Pong the assets request for a reward money; and (2) Yu So Pong was agreeable to the request. He further contends that the act of receiving money for the asset is not one of those punishable under the law as direct bribery. Petitioner cannot feign innocence and profess good faith since all the indicia point to his guilt and malicious intent. First, petitioner did not introduce his asset or mention his name to Yu So Pong or his daughter at the time of the illegal transaction. His claim that he previously gave P1,000.00 to his asset, which purportedly represented a partial payment of the reward money, was not corroborated by his asset. When he was arrested and interrogated at Camp Ibalon, he made no attempt to present his asset to explain and justify his receipt of the reward money. Instead, he accepted his arrest and investigation with an air of resignation, which is characteristic of a culprit who is caught red-handed. Captain Calvo, one of the arresting CIS officers, testified that petitioner attempted to give back the money to Yu So Pong when they were about to arrest him.9[9] This was a clear showing that he was well aware of the illegality of his transaction. Had he been engaged in a legitimate deal, he would have faced courageously the arresting officers and indignantly protested the violation of his person, which is the normal reaction of an innocent man. Instead, he meekly submitted to the indignity of arrest and went along the eventual investigation with the docility of a man at a loss for a satisfactory explanation. Second, petitioners solicitous and overly eager conduct in pursuing the robbery incident betrays an intention not altogether altruistic. On the contrary, it denotes a corrupt desire on his part to obtain pecuniary benefits from an illegal
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transaction. At the time petitioner was notified by his asset of the robbery incident, he was no longer on duty, having been assigned to the night shift the day before. He was too overzealous to meet with Yu So Pong although the case was already assigned to another police investigator. His justification that he wanted to encourage the victim to pursue the case against the robbers rings hollow and untrue. It is clearly an afterthought. As shown in the testimony of prosecution witness Hian Hian Yu Sy, petitioner met with Yu So Pong for no apparent reason than to demand money. There was no mention of any attempt by him to investigate, much less encourage the victims to file charges against the malefactors. More telling is petitioners persistence in obtaining the monetary reward for the asset although the latter was no longer complaining about the P1,000.00 he supposedly received earlier, thus: Pros. Agcaoili: Since the asset was not complaining at the time, you should not have gone back anymore to Yu So Pong? Accused Marifosque: Why would I not go back? My purpose was to encourage him to pursue the matter. If he would not pursue this matter, then we would be the laughing stock of the thieves we arrested and then we cannot charge them. Q. So Mr. Witness, you went to Yu So Pong after you received the P1,000.00 without any intention to receive additional amount for the asset, am I right? A: No, maam. That was not the purpose. In fact, Yu So Pong had told me earlier to see him again in order to prepare for the cash and to see if an additional amount would be needed for my asset.10[10] While petitioner supposedly supports the reward system, yet he denied that he previously gave incentives to the assets for the recovery of stolen items, to wit:
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PJ: Sometimes you would ask for reward for your assets? A: I myself voluntarily give them a reward.

A I do not know whether P1,000.00 is enough or not. The fact, is, that was the amount I got from Yu So Pong which I gave to my asset. PJ: Was the asset complaining that was not enough? A. No, Your Honor.11[11]

Q: That is not the question. The question is, in the past when you would recover stolen articles, would you ask the owner of the articles to give some incentive or tip to your assets? A: PJ: Next question. Pros. Agcaoili: And, in fact, Mr. Witness, you did not give any incentive to your asset on that incident that happened in the house of Yu So Pong which is the subject matter of this case? A. For that particular case alone, Mr. Yu so Pong gave me something and I gave it to my asset. xxx Pros. Agcaoili In fact, Mr. Witness, you said that these tips were just given as an incentive? A I would be the one to give the incentives to my asset. But in that particular instance, the P1,000.00 which Mr. Yu So Pong gave me, I turned it over to my own asset. Q To your own assessment, Mr. Witness, is P1,000.00 not enough to serve as an incentive to your asset? xxx xxx That has not happened, your Honor.

Third, the conduct of the petitioner during the recovery of the stolen articles leaves much to be desired. He did not apprehend Edgardo Arnaldo or invite him for investigation although the cylinder tanks were found in his possession. His flimsy excuse that the latter promised to deliver additional cylinder tanks is unworthy of credence considering that, as a police officer with years of experience, he should have known that the proper action, under the circumstances, was to at least invite him to the police precinct for investigation. Curiously, the prime suspect Edgardo Arnaldo turned out to be the brother of petitioners police asset who, we recall, directed the police officers to the location of the stashed articles. This strange coincidence may well indicate a conspiracy between the petitioner and the thieves to steal from the victim and later cash in on the recovery of the lost items. In the final analysis, this case boils down to an issue of credibility. In this regard, the prosecution witnesses gave clear and straightforward testimonies. The Sandiganbayan did not err in giving full weight and credence to their version of the events. Petitioners conviction must be affirmed. The crime of direct bribery as defined in Article 210 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.
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There is no question that petitioner was a public officer within the contemplation of Article 203 of the Revised Penal Code, which includes all persons who, by direct provision of law, popular election or appointment by competent authority, shall take part in the performance of public functions in the Philippine Government, or shall perform in said government or any of its branches, public duties as an employee, agent or subordinate official or any rank or class. At the time of the incident, petitioner was a police sergeant assigned to the Legazpi City Police Station. He directly received the bribe money from Yu So Pong and his daughter Hian Hian Yu Sy in exchange for the recovery of the stolen cylinder tanks, which was an act not constituting a crime within the meaning of Article 210 of the Revised Penal Code. The act of receiving money was connected with his duty as a police officer. The instant case falls within the second paragraph of Article 210 of the Revised Penal Code, which is quoted hereunder: Art. 210. Direct Bribery. Any public officer who shall agree to perform an act constituting a crime, in connection with the performance of his official duties, in consideration of any offer, promise, gift or present received by such officer, personally or through the mediation of another, shall suffer the penalty of prision mayor in its minimum and medium periods and a fine of not less than three times the value of the gift, in addition to the penalty corresponding to the crime agreed upon, if the same shall have been committed. If the gift was accepted by the officer in consideration of the execution of an act which does not constitute a crime, and the officer executed said act, he shall suffer the same penalty provided in the preceding paragraph; and if said act shall not have been accomplished, the officer shall suffer the penalties of prision correccional in its medium period and a fine of not less than twice the value of such gift. If the object for which the gift was received or promised was to make the public officer refrain from doing something which it was his official duty to do, he shall suffer the penalties of prision correccional in its maximum period to prision mayor in its

minimum period and a fine not less than three times the value of the gift. In addition to the penalties provided in the preceding paragraphs, the culprit shall suffer the penalty of special temporary disqualification. While the Sandiganbayan imposed the correct prison term in applying the Indeterminate Sentence Law, the amount of the fine is erroneous. Paragraph 1 of Article 210 of the Revised Penal Code, in relation to paragraph 2 thereof, provides that if the act does not constitute a crime, the fine shall not be less than three times the value of the amount received. Evidence shows that petitioner received an aggregate amount of P5,800.00.12[12] He should therefore be ordered to pay a fine not less than 3 times its value. Accordingly, a fine of P18,000.00 is deemed reasonable. WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Sandiganbayan in Criminal Case No. 17030, finding petitioner guilty beyond reasonable doubt of the crime of Direct Bribery and imposing upon him the indeterminate prison term of 3 years, 6 months, and 5 days of prision correccional, as minimum, to 7 years, 8 months, and 9 days of prision mayor, as maximum, is AFFIRMED with the MODIFICATION that the fine is increased to P18,000.00. In addition, petitioner shall suffer the penalty of special temporary disqualification. SO ORDERED.

MALVERSATION OF PUBLIC FUNDS OR PROPERTY (Art. 217)

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YNARES-SANTIAGO, J.: This petition for review seeks to set aside the September 21, 1998 decision and the December 4, 1998 resolution of the Sandiganbayani[1] in Criminal Case No. 16279, convicting petitioner Pablo N. Quion of the crime of malversation of public property as defined and penalized under Article 217 of the Revised Penal Code. The Information filed against accused-appellant reads: That on or about March 14, 1988 or subsequent thereto, in Calinog, Iloilo, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, a public officer, being then the Station Commander of the Calinog, Iloilo PC/INP, and who by reason of the duties of his office is accountable for public properties that come to his possession and control, received in his official capacity the following firearms: two (2) super caliber .38 pistol and their magazines, with Serial Nos. 310136 and 310150, valued at P5,500.00 per pistol, with total value of P11,000.00; and one (1) 12 gauge shotgun, with Serial No. 242446 valued at P4,000.00, and with grave abuse of confidence, did then and there willfully, unlawfully and feloniously apply and convert to his personal use and benefit said firearms to the damage and prejudice of the government in the total amount of Fifteen Thousand Pesos (P15,000.00), Philippine Currency. CONTRARY TO LAW.ii[2] On May 13, 1991, petitioner pleaded not guilty. Petitioner, however, failed to appear when the case was set for pre-trial and trial from July 18, 1991 to February 23, 1993, allegedly due to hypertension.iii[3] The facts as established by the prosecution: Petitioner Police Sergeant Pablo N. Quion was the Station Commander of Calinog, Iloilo, Philippine Constabulary-Integrated National Police (PC-INP), now Philippine National Police (PNP), from February 5, 1987 to March 14, 1988. During his incumbency and by reason of his functions as Station Commander, he was issued the

following firearms and ammunitions under Memorandum Receipts duly signed by him, to wit: Memorandum Receipt dated February 20, 1987: 1 each Pistol Star Cal. 38 Sn 310150 1 each Mag 1 each Pistol Star Cal. 38 Sn 310151 6 Rounds Ammos Cal 38 w/ mag 1 each Pistol Star Cal. 38 [Sn] 310136 6 Rounds Ammos Cal. 38 w/ mag 1 each Rifle M16 armalite Cal. 5.45 Sn 157840 40 Rounds Ammos Cal. 5.56iv[4] Memorandum Receipt dated April 24, 1987: 1 each Shotgun Squire Bingham 12 gauge Sn 242446v[5]

On March 15, 1988, Police Sergeant Emilio Aviador assumed office as Station Commander of the Calinog, Iloilo, PC-INP, vice petitioner who was transferred to the 322nd Philippine Constabulary Co., at Camp Tirador, Iloilo. After an inventory of the firearms of the Calinog, Iloilo Police Station, it was discovered that petitioner did not turn over the firearms issued to him. Thus, Police Sergeant Aviador sent a radio message to petitioner demanding the return of the unaccounted firearms. Police Sergeant Aviador likewise sought the help of the Provincial Commander/Police Superintendent of the Iloilo PC-INP for the return of said firearms and ammunitions.vi[6] Subsequently, petitioner surrendered one (1) unit M16 armalite rifle with Serial No. 157840 and one (1) pistol cal. 38 with Serial No. 310151 to the 322nd PC Co., at Camp Tirador, Iloilo, which in turn delivered said firearms to the Calinog, Iloilo Police Station. On March 17, 1989, Police Sergeant Aviador recovered the shotgun with Serial No. 242446 from a certain Rudy Penuela, an

alleged asset or informer of petitioner when he was still the Station Commander of Calinog.vii[7] Petitioner failed to return the two remaining .38 caliber pistols with Serial Nos. 310136 and 310150 despite demands of the Calinog Police Station. The value of the unaccounted firearms per the updated cost valuation dated July 30, 1984 of the Ministry of National Defense, amounted to P5,500.00 each, or a total of P11,000.00.viii[8] After the prosecution rested its case, the Sandiganbayan issued an order directing petitioner to present evidence on July 22 and 23, 1983. Petitioner again failed to appear on the scheduled dates despite notice. Hence, the Sandiganbayan considered his absence a waiver of his right to present evidence. Upon motion of the prosecution, the case was submitted for decision. Petitioner filed a motion for reconsideration claiming that he was denied due process, however, the same was denied by the Sandiganbayan.ix[9] Hence, the instant petition for certiorari and prohibition docketed as G.R. No. 113908. Petitioner contended, inter alia, that he was denied due process of law and that the information filed against him does not charge an offense. The petition was denied for lack of merit.x[10] On August 7, 1998, the Sandiganbayan rendered judgment in Criminal Case No. 16279, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered, finding the accused guilty beyond reasonable doubt of the crime of malversation of public properties, more particularly of two .38 Cal. Pistols, with a total value of P11,000.00; and the Court hereby sentences the accused to suffer an indeterminate sentence of imprisonment of six (6) years and one (1) day of prision mayor, as minimum, to ten (10) years and one (1) day of reclusion temporal, as maximum, to pay a fine of P11,000.00 and also to suffer the penalty of perpetual special disqualification; and to pay the costs. SO ORDERED.xi[11]

Petitioners motion for reconsideration was denied and the decretal portion of the August 7, 1998 decision was amended with respect to the penalty, thusWHEREFORE, judgment is hereby rendered, finding the accused guilty, beyond reasonable doubt, of the crime of malversation of public properties, more particularly of two .38 Cal. pistols, with a total value of P11,000.00; and the Court hereby sentences the accused to suffer an indeterminate sentence of imprisonment of six (6) years and one (1) day of prision mayor, as minimum, to twelve (12) years and one (1) day of reclusion temporal, as maximum, to pay a fine of P11,000.00, and also to suffer the penalty of perpetual special disqualification and to pay the costs. SO ORDERED.xii[12] Hence, the instant petition on the following grounds: I THE SANDIGANBAYAN PATENTLY ERRED IN HOLDING THAT PETITIONER IS AN ACCOUNTABLE PUBLIC OFFICER. II THE SANDIGANBAYAN PATENTLY ERRED IN FINDING PETITIONER GUILTY OF MALVERSATION UNDER ARTICLE 217 OF THE REVISED PENAL CODE.xiii[13] The crime of malversation of public funds or property is defined 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, xxx.

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xxx

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reason of said duties, he receives public money or property which he is bound to account.xvii[17] In the case at bar, the delivery to petitioner of the firearms belonging to the Government, by reason of his office as Station Commander of Calinog, Iloilo, PC-INP, necessarily entailed the obligation on his part to safely keep the firearms, use them for the purposes for which they were entrusted to him, and to return them to the proper authority at the termination of his tenure as commander, or on demand by the owner, the duty to account for said firearms.xviii[18] Thus, in Felicilda v. Grospe,xix [19] the Court held a police officer accountable for the firearms issued to him and consequently convicted him for malversation of public property when he failed to produce said firearms upon demand by the proper authority. Article 217 of the Revised Penal Code is designed to protect the government and to penalize erring public officials and conspiring private individuals responsible for the loss of public funds and property by reason of corrupt motives or neglect or disregard of duty. Its all encompassing provision cannot be limited by petitioners absurd interpretation of the provisions of the Administrative Code restricting the application thereof only to government funds and to bonded public officials. Under Article 217 of the Code, the failure of the public officer to have duly forthcoming such public funds or property, upon demand by a duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal use. Considering that petitioner failed to adduce evidence on why he failed to produce, after the expiration of his term and despite lawful demand, the two .38 caliber pistols with Serial Nos. 310136 and 310150 issued to him by reason of his duties as Station Commander of the Calinog, Iloilo, PC-INP, the Sandiganbayan correctly convicted him of malversation of public property. Regarding the imposable penalty, the Sandiganbayan correctly amended the maximum period of petitioners indeterminate penalty from ten (10) years and one (1) day of reclusion temporal to twelve (12) years and one (1) day of reclusion temporal. Under paragraph (3) of Article 217, the penalty for

The failure of the public officer to have duly forthcoming such public funds or property, upon demand by a duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal use. The elements of malversation, essential for the conviction of an accused under the above penal provision are: 1. That the offender is a public officer; 2. That he has the custody or control of funds or property by reason of the duties of his office; 3. That the funds or property are public funds or property for which he is accountable; and

4. That he appropriated, took, misappropriated or consented or through abandonment or negligence, permitted another person to take them.xiv[14] Petitioner does not deny that he received the firearms in question by reason of his office as Station Commander of the Calinog, Iloilo PC-INP, and he failed to return them upon the expiration of his term and despite demand of the new Station Commander. He, however, argues that he cannot be convicted of malversation of public property because he is not an accountable officer within the contemplation of Article 217. Citing the Administrative Code of 1987,xv[15] petitioner alleges that only public officers whose duties require possession or custody of government public funds and are bonded, are considered public accountable officers.xvi[16] The contentions lack merit. 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. To be liable for malversation, an accountable officer need not be a bonded official. The name or relative importance of the office or employment is not the controlling factor. What is decisive is the nature of the duties that he performs and that as part of, and by

malversation where the amount involved is more than P6,000.00 but less than P12,000.00, is prision mayor in its maximum period to reclusion temporal in its minimum period. Since there are no modifying circumstances, penalty shall be imposed in its medium period, i.e., within the range of eleven (11) years, six (6) months and twenty-one (21) days to thirteen (13) years, one (1) month and ten (10) days. The minimum period of the indeterminate penalty shall be within the range of six (6) years and one (1) day to ten (10) years of prision mayor, the penalty next lower in degree to the prescribed penalty. WHEREFORE, in view of all the foregoing, the resolution of the Sandiganbayan in Criminal Case No. 16279, convicting petitioner Pablo N. Quion of the crime of malversation of public property and sentencing him to suffer the indeterminate penalty of imprisonment ranging from six (6) years and one (1) day of prision mayor, as minimum, to twelve (12) years and one (1) day of reclusion temporal, as maximum, as well as the penalty of perpetual special disqualification; and ordering him to pay a fine of P11,000.00, is AFFIRMED. SO ORDERED. [G.R. No. 132926. July 20, 2001] ELVIRA AGULLO, petitioner, vs. SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents. DECISION BUENA, J.: Charged with, tried and convicted in Criminal Case No. 13579 for malversation of public funds, herein petitioner Elvira Agullo, erstwhile Disbursing Officer of the then Ministry of Public Works and Highways (MPWH), Regional Office No. VIII, Candahug, Palo, Leyte, now comes before the High Court to assail the Decisionxx[1] of the Sandiganbayan promulgated on 16 March 1992, and its Resolution dated 11 March 1998, denying petitioners motion for reconsiderationxxi[2] but reducing the penalty imposed on petitioner as follows: WHEREFORE, the Court finds the accused Elvira S. Agullo guilty beyond reasonable doubt of the crime of Malversation of Public Funds, defined and penalized under Article 217,

paragraph 4 of the Revised Penal Code. [There being neither mitigating nor aggravating circumstances, no evidence having been adduced respecting partial or full restitution of the amount malversed,] Considering the absence of any aggravating circumstances and her full restitution by salary deduction, the accused Elvira S. Agullo should be, as she is, hereby sentenced to the indeterminate penalty of, from 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] SEVENTEEN (17) YEARS, FOUR (4) MONTHS and ONE (1) DAY of RECLUSION TEMPORAL, AS MAXIMUM, with the accessory penalties of the law; to pay a fine in the sum of P26,404.26 without subsidiary imprisonment in case of insolvency; to suffer the penalty of Perpetual Special Disqualification and to pay the costs. (Emphasis ours) In an informationxxii[3] dated 30 September 1988, herein petitioner was charged with the crime of malversation of public funds, committed as follows: That on or about the period October 22, 1985 to July 14, 1986, inclusive or within said dates in the Municipality of Palo, Province of Leyte, Philippines, and within the jurisdiction of the Honorable Court, the above-named accused, being then the disbursing officer of then Ministry of Public Works and Highways, Regional Office No. VIII, Candahug, Palo, Leyte, charged with the official custody of public funds thus paid, collected and received by her in her official capacity, and by reason of which duties she is accountable thereof, taking advantage of her official position, did then and there wilfully, unlawfully and feloniously take, convert and misappropriate for her own personal use and benefit the public funds she had in her possession in the amount of Twenty Six Thousand Four Hundred Four Pesos and 26/100 (P26,404.26), belonging to the government of the Republic of the Philippines, to the damage and prejudice of the latter in the aforestated amount. Contrary to law. Upon arraignment, herein petitioner Agullo, assisted by counsel de officio Antonio Manzano, pleaded not guiltyxxiii[4] to the

charge, after which the Sandiganbayan conducted a pre-trial on 11 February 1990 and issued the following Pre-Trial Order:xxiv[5] When this case was called for pre-trial, the accused personally and through her counsel Atty. Antonio Manzano of the CLAO readily entered into stipulations insofar as her official position in government as well as the fact of audit of her accounts are concerned, including therewith the admission that, in all respects the Cash Production Notice and the Examination of her Cash and Accounts which the government marked as Exhibit A was faithful reproduction of the original, and insofar as the contents thereof are concerned, are correct. The accused likewise admitted that she had received a letter of demand, said letter dated July 14, 1986 marked as exhibit B. With this the accused stated that her defense was premised on her having suffered a stroke on October 22, 1985 as a result of which the amount subject of the shortage found in her audit had been lost. The accused also indicated that not only had she immediately replied to the letter by various communications by her or in her behalf protesting the witholding of various amounts due her by way of salaries on the premise that the loss of the amount subject matter of the Information was not chargeable to her as a personal liability. The accused has likewise informed the Court that prior to the incident on October 22, 1985, she had been audited on May 27, 1985 and, after the incident, on December 23, 1985 although she concedes she was also audited on July 14, 1986. Considering that all the documents necessary for the defense of the accused are still to be organized, Atty. Manzano is given ten (10) days from today within which to prepare a proposal for stipulations of facts and, if that is not possible, at least a complete outline of his case together with the marking of the documents he wishes to present which the prosecution might not admit as to the substance thereof though the genuineness of the documents presented might be conceded. With the above, the prosecution may now rest its case and the presentation of the evidence for the defense may take place on

April 5 and 6, and May 17 and 18, 1990, at 8:00 o clock in the morning and 2:00 o clock in the afternoon. The setting for tomorrow is cancelled. SO ORDERED. (Emphasis ours) As borne by the records, the charge of malversation against petitioner germinated from an audit conducted on 14 July 1986 by Ignacio Gerez, Auditing Examiner III, as a result of which a P26,404.26 cash shortage was discovered on petitioners accountability. On the same date, Gerez informed petitioner of said finding of cash shortage and required the latter, through a letter of demand,xxv[6] to produce immediately the missing funds. Further, petitioner was required to submit within 72 hours from receipt a written explanation of the cash shortage. In a letterxxvi[7] dated 25 August 1986, addressed to the Resident Auditor of the MPWH, petitioner complied with the directive by explaining that the cash shortage was, in effect, due to a fortuitous event where the amount could have been stolen/taken by somebody on the day she suffered a stroke on 22 October 1985, near the corner of Juan Luna Street and Imelda Avenue, Tacloban City. In the course of the pre-trial, petitioner Agullo conceded the fact of audit and admittedxxvii[8] the findings in the Report of Cash Examination and the facts set forth in the Letter of Demand. In effect, she admitted the fact of shortage in the amount stated in the Information. Notwithstanding, petitioner Agullo, at all stages of the criminal indictment, persistently professed her innocence of the charge and categorically denied having malversed or converted the public funds in question for her own personal use or benefit.xxviii[9] With petitioners admission of the fact of cash shortage, the prosecution then rested its case.xxix[10] For its part, the defense, in its bid to overturn the presumption of malversation and shatter the prima facie evidence of conversion, offered the testimony of the following witnesses: petitioner Elvira Agullo; Rene Briones Austero, Cashier III of the Department of Public Works and Highways (DPWH), Region VIII; and Engracia

Camposano-Camaoy, Barangay Captain of Hinabuyan, Dagame, Leyte. During trial, the defense offered to present the testimony of witness Austero for the purpose of proving that an amount equal to P26,722.05xxx[11] was withheld from the salary and other compensation of petitioner Agullo. Further, the defense offered the testimony of witness Barangay Captain Camaoy for the purpose of establishing that the accused suffered a heart attack (stroke) on October 22, 1985; that on June 30, 1986, the accused informed her that the accused lost the money for which she (was being) subjected to criminal prosecution x x x; and that between October 22, 1985 and June 30, 1986, there had been no demand upon the accused to produce the money for which she was declared short.xxxi[12] Additionally, the defense presented the following documentary evidence,xxxii[13] all of which were admitted by the Sandiganbayan: Exhibit 1 - Letter dated 25 August 1986 by accused to the Resident Auditor MPWH, Regional Office No. 8, Candahug, Palo, Leyte; Exhibit 2 - Letter dated 22 August 1987 by accused to Engr. Alfredo P. Torres, Regional Director; Exhibit 3- Medical Certificate dated 05 August 1986, issued by Dr. Juan T. Abando, M.D., St. Pauls Hospital, Tacloban City; Exhibit 3-A Verified Medical Certificate dated 19 January 1986, issued by Dr. Juan Abando, notarized on page 02; Exhibit 4- Letter dated 26 December 1986 by accused to the Regional Director; Exhibit 5 Letter dated 19 February 1987 to the Regional Director by Atty. Eric T. De Veyra;

Exhibit 6 Letter dated 15 April 1987 by accused to the Regional Director; Exhibit 7 Letter dated 01 September 1987 of Director Alfredo Torres of DPWH to the Regional Director COA; Exhibit 8 Letter of Accused dated 26 November 1987; Exhibit 9 Affidavit of accused Elvira Agullo; Exhibit 10- Affidavit of witness Engracia Camaoy; Exhibit 11 Letter-Request dated 04 May 1988 of accused to the Regional Director; Exhibit 12 Certification by Mauricio Pacatang; Exhibit 13 Protest of accused against the appointment of Sylvia de la Rosa; Exhibit 14- Letter dated 25 February 1987 to the Manager, Employees Compensation Department, GSIS, Metro Manila; Exhibit 15 Initial Approval of the Employees Compensation Department, GSIS; Exhibit 16 Hospitalization Claim for payment of accused; Exhibit 17 Report of Injury signed and approved by Pablo P. Burgos, Regional Engineering Coordinator and Head of Office; Exhibit 18 Certification issued by PNB Tacloban, thru its Asst. Manager B.L. Telmo; Exhibit 19 Memorandum to accused dated 02 April 1984; Exhibit 20 Memorandum dated 05 May 1990.

At the witness stand, petitioner Agullo unrelentingly maintained her innocence and vehemently denied the accusation against her. Thus, according to petitioner, in the morning of 21 October 1985, she reported for work and prepared an inventory of her cash accountabilityxxxiii[14] as Disbursing Officerxxxiv[15] of the MPWH Regional Office, Candahug, Palo, Leyte. On the same day, petitioner received around thirteen (13) checks in the form of cash advances in her name totaling P26,076.87,xxxv[16] which amount represented salaries of MPWH officials and employees. Around 1:30 PM, petitioner, together with Benjamin Veridiano, driver of MPWH Finance and Management Division, proceeded to the Philippine National Bank (PNB) Tacloban City Branch, on board the MPWH official vehicle, to encash the aforesaid checks. Upon encashment of the checks, petitioner then put the money inside a PNB envelope which she further placed in her bag. From the PNB, petitioner-- who boarded the official vehicle driven by Veridiano for the purpose of proceeding further to the MPWH Regional Officefelt dizziness, chest pain and nausea. As a result of her condition, petitioner Agullo requested driver Veridiano to drop her off at petitioners residence located at 109 Juan Luna Street-- about half a kilometer away from the PNB.xxxvi [17] In the morning of the following day, 22 October 1985, petitioner upon realizing that it was then the third-week payday of the month, and burdened with the thought that she failed to give the salary of the permanent employees strove to report for work despite her weak physical condition. Petitioner Agullo testified that she left her residence alone and brought with her the bag containing the money which she encashed the previous day from the PNB.xxxvii[18] Upon leaving the house with the money inside her bag, she walked the stretch of Juan Luna Street and was able to reach almost the corner of Juan Luna and Imelda Avenuexxxviii[19] a distance of around 50 meters away from her residencexxxix[20] when she was stricken with deep chest painxl[21] and experienced dizziness; her vision blurred and the right part of (her) body (became) heavy to the point that she could not move anymore. At this point, she collapsed and lost consciousness.xli[22]

In the afternoon of the same day, she found herself in a hospital bed of St. Pauls Hospital located about a block away from petitioners residence. Upon inquiry, she was informed that a certain Metro Tacloban Aide by the name of Teresa Lorenzo came to her rescue when she fainted, assisted in rushing her to the hospital, and informed her family about Agullos dire condition and the unfortunate event that befell her.xlii[23] Petitioner was confined in St. Pauls Hospital for over a week from 22 October 1985 to 01 November 1985xliii[24] - under the care of her attending physician, Dr. Juan Abando, who issued the corresponding Medical Certificate pregnant with the following findings: X X X Hypertension complicated with Cerebro Vascular Accident (CVA), Rt. Hemiparesis and Urinary Infection. Condition started apparently 20 hrs. before admission as moderate headache and dizziness, associated with blurring of vision and nausea. Fifteen hrs. prior to admission, she felt weakness of her right half of her body and slurring of speech. Had history of high blood pressure taken last April 1985. B/P= 190/120. On admission B/P= was 230/120; PR= 83/min.; RR= 20/min. Pertinent findings: conscious, coherent, slurred speech, rt. Hemiplegia. Diagnosis: = Malignant hypertension. = CVA with Right Hemiplegia. = Urinary Tract Infection. As to petitioners medical history and physical condition after her stroke, the Sandiganbayan, in its decision, observed from the records: X X X In the past, the accused had likewise suffered a stroke and had undergone medical treatment. A medical certificate, marked as Exhibits 3 and 3-A, attest(s) to the fact that she had a history of high blood pressure and had been undergoing treatment for the said malady. Since her sudden breakdown on

October 22, 1985, the right part of her body became paralyzed and her speech has been impaired. She was advised by her doctor to undergo physical therapy and to take medicine regularly. She was advised not to report for work during such time that she was under recuperation. Only on February 2, 1986 did she start to report for work, although at irregular intervals, until the date of the audit, July 14, 1986. Striking down the defense as incredible and without basis, the Sandiganbayan rendered its assailed decision, convicting petitioner Agullo of the crime of malversation of public funds, ratiocinating principally that no evidence has been presented linking the loss of the government funds with the alleged sudden heart attack of the accused (herein petitioner). We do not agree. By and large, the pieces of evidence presented against petitioner in this case do not fulfill the test of moral certainty and may not be deemed sufficient to support a conviction.xliv[25] Records reveal that evidence for the prosecution consisted solely of the Report of Cash Examination,xlv[26] dated 14 July 1986, which was presented by the prosecution to prove the cash shortage in the amount of P26,404.26, on petitioner Agullos accountability as Disbursing Officer of the then MPWH. Likewise, the prosecution presented the Letter of Demandxlvi[27] dated 14 July 1986 signed by Auditing Examiner III Ignacio Gerez. Aside from the aforementioned documents, the prosecution opted not to present a single witness to buttress its bid for conviction and relied merely on the prima facie evidence of conversion or presumption of malversation under Article 217, paragraph (4) of the Revised Penal Code, to wit: ART. 217. Malversation of public funds or property Presumption of malversation X X X 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. Stated otherwise, the evidence for the prosecution, upon which the Sandiganbayan riveted its judgment of conviction, was limited to documents to wit, the Report of Cash Examination and Letter of Demand. As could be readily gleaned from the assailed decision, the verdict adjudging herein petitioner guilty of the crime of malversation was anchored solely on the presumption provided under Article 217, paragraph 4 of the Revised Penal Code, which prima facie evidence, in turn, was rooted loosely on the documentary evidence presented by the prosecution, to wit; the Report of Cash Examination and Letter of Demandpieces of evidence which the defense concededly admitted, but which, to our mind, do not suffice to convict the petitioner beyond reasonable doubt of the crime charged. Thus, in a string of categorical pronouncements, this Court has consistently and emphatically ruled that the presumption of conversion incarnated in Article 217, paragraph (4) of the Revised Penal Code is by its very nature rebuttable. To put it differently, the presumption under the law is not conclusive but disputable by satisfactory evidence to the effect that the accused did not utilize the public funds or property for his personal use, gain or benefit. Accordingly, if the accused is able to present adequate evidence that can nullify any likelihood that he had put the funds or property to personal use, then that presumption would be at an end and the prima facie case is effectively negated. This Court has repeatedly said that when the absence of funds is not due to the personal use thereof by the accused, the presumption is completely destroyed; in fact, the presumption is never deemed to have existed at all.xlvii [28] Applying the foregoing principle, the prosecution in the instant case upon whose burden, as in Diaz vs. Sandiganbayan,xlviii [29] was laden the task of establishing by proof beyond reasonable doubt that petitioner had committed the offense charged, mainly relied on the statutory presumption aforesaid and failed to present any substantial piece of evidence to

indicate that petitioner had used the funds for personal gain. Worth noting is that the Sandiganbayan, in its impugned decision, admitted that conversion or the placing of malversed government funds to personal uses has, indeed, not been proven in the case at bar.xlix[30] Perhaps realizing such gaping hole, the Sandiganbayan nonetheless leaped into the conclusion, albeit erroneous, that herein petitioner was just the same guilty of malversation invoking the prima facie evidence stated in Article 217, paragraph (4) of the Revised Penal Code. On this score, the rule of general application is that the factual findings of the Sandiganbayan are conclusive on this court. However, such rule admits of settled exceptions, among others: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts; and (5) the findings of fact of the Sandiganbayan are premised on a want of evidence and are contradicted by evidence on record.l[31] On this matter, the Sandiganbayans conclusion that there is no evidence to show that the accused was then carrying the sum of P26,404.26 in her person when she allegedly collapsed at Juan Luna Street, Tacloban City, is to say the least, without factual basis and not duly supported by evidence. On the stark contrary, the records are extant, as petitioner Agullo, in fact, testified on the witness stand that she had the money with her when she suffered a stroke and collapsed on the streets of Tacloban City on 22 October 1985. Records likewise reveal that the amount of P327.39, which is the difference between P26,404.26li[32] and P26,076.87,lii[33] represents the salary of Mr. Alcober, Jr., Administrative Officer of the DPWH in Candahug, who made a telephone call to petitioner for the latter to bring the sum of P327.39, together with the payroll. In the case before us, the Sandiganbayan undoubtedly disregarded or overlooked certain evidence of substance which, to a large extent, bear considerable weight in the adjudication of

petitioners guilt or the affirmation of her constitutional right to be presumed innocent until proven otherwise. Upon thorough scrutiny of the evidence adduced by both prosecution and defense, we hold that petitioner Agullo has satisfactorily overcome and rebutted by competent proof, the prima facie evidence of conversion so as to exonerate her from the charge of malversation. To this end, petitioner presented evidence that satisfactorily prove that not a single centavo of the missing funds was used for her own personal benefit or gain. True enough, the evidence adduced by the defense reveals sufficient circumstances to establish the strongest degree of probability that the public funds subject of the criminal indictment for malversation was lost during that fateful day of 22 October 1985, where petitioner Agullo suffered a stroke on the streets of Tacloban City as she was then on her way to the MPWH Regional Office. In fact, the records though insensate, clearly reveal that the prosecution admitted that petitioner suffered a stroke on the streets of Tacloban on 22 October 1985. As to the prosecutions allegation that no evidence exists regarding loss of the public funds, this postulation is belied by the records as petitioner herself testified on the stand that she had the money subject of inquiry when she collapsed and lost consciousness as a result of the stroke. To us, this circumstance coupled with the other peculiarities attendant in the instant case and further considering the palpable failure of the prosecution to adduce other evidence to clearly establish conversion suffice to make the mind uneasy as to Agullos guilt, notwithstanding the prima facie evidence established by law against herein petitioner, which by no means dispenses with the need of proving guilt beyond reasonable doubt."liii[34] After all, mere absence of funds is not sufficient proof of conversion. Neither is the mere failure of the accused to turn over the funds at any given time sufficient to make even a prima facie case. Conversion must be affirmatively proved, either by direct evidence or by the production of facts from which conversion necessarily follows.liv[35]

Truly, these serve as strong considerations that seriously impair the basis upon which is founded the legal presumption of personal misappropriation of money or property of accountable officers who fail to have forthcoming, such money or property when so demanded by a duly authorized official.lv[36] Verily, a finding of prima facie evidence of accountability does not shatter the presumptive innocence the accused enjoys because, before prima facie evidence arises, certain facts [have still to be] proved; the trial court cannot depend alone on such an evidence, because precisely, it is merely prima facie. It must still satisfy that the accused is guiltybeyond reasonable doubt of the offense charged. Neither can it rely on the weak defense the latter may adduce.lvi[37] Notably, the Sandiganbayan, in convicting petitioner, obviously relied more on the flaws and deficiencies in the evidence presented by the defense, not on the strength and merit of the prosecutions evidence.lvii[38] This course of action is impermissible for the evidence of the prosecution clearly cannot sustain a conviction in an unprejudiced mind.lviii[39] All told, this Court, through the scholarly ponencia of Mr. Justice Isagani Cruz in People vs. De Guzman,lix[40] inked in vivid prose the premium accorded to the right of an accused to be presumed innocent until the contrary is proved, to wit: The constitutional presumption of innocence is not an empty platitude meant only to embellish the Bill of Rights. Its purpose is to balance the scales in what would otherwise be an uneven contest between the lone individual pitted against the People of the Philippines and all the resources at their command. Its inexorable mandate is that, for all the authority and influence of the prosecution, the accused must be acquitted and set free if his guilt cannot be proved beyond the whisper of doubt. Hence, in light of the satisfactory explanation proffered by the defense and in view of the impotency of the prosecutions evidence, petitioners constitutional right to be presumed innocent necessarily thrives. Corollarily, the prima facie evidence of conversion in the instant case, withers, so to speak, like a petrified twig wilted in the scorching heat of the noonday sun.

WHEREFORE, premises considered, the instant petition is granted. ACCORDINGLY, the decision of respondent Sandiganbayan dated 16 March 1992 and its Resolution dated 18 March 1998, are hereby REVERSED and SET ASIDE. Petitioner Elvira Agullo is hereby ACQUITTED on grounds of reasonable doubt. MOREOVER, the DPWH is hereby directed to refund petitioner the sum of Three Hundred Seventeen Pesos and Seventy Nine Centavos (P317.79) representing the amount overdeducted from petitioners salary, cost of living allowance and other emoluments. SO ORDERED. [G.R. No. 116754. March 17, 2000] MORONG WATER DISTRICT, petitioner, vs. OFFICE OF THE DEPUTY OMBUDSMAN, WIFRED L. PASCASIO, RAUL R. ARNAU, ABELARDO L. APORTADERA, JR., FRANCISCO VILLA, EDGARD STA. MARIA and EMMA CENSON, respondents. Sc DECISION GONZAGA_REYES, J.: Assailed in this petition for certiorari is the Resolution13[1] dated 28 March 1994 of the Office of the Ombudsman which dismissed the case for violation of R.A. 3019, the Anti-Graft and Corrupt Practices Act, and Article 217 of the Revised Penal Code filed against private respondents Edgard Sta. Maria and Emma Censon by herein petitioner Morong Water District. Likewise assailed is the Order14[2] dated dated 27 May 1994 denying petitioners motion for reconsideration. The facts of the case are as follows: Scmis Private respondent Edgard Sta. Maria, was the former General Manager of petitioner Morong Water District in San Pedro, Morong, Rizal. Private respondent Emma Censon was the advisor of the Local Water Utilities Administration assigned to petitioner
13 14

Morong Water District. Respondents Wilfred L. Pascasio, Raul R. Arnau, Abelardo L. Aportadera, Jr. and Francisco Villa are officials of the Office of the Ombudsman who are included as respondents in their official capacities as the public officers who promulgated the questioned resolution and order. On 3 August 1993, Edgard Sta. Maria, while still the General Manager of MOWAD, received from petitioner a cash advance of P33,190.7315[3] representing an initial release of funds for the design and execution of the Wawa pipeline extension project in Morong, Rizal. On 5 August 1992, as shown by a journal voucher16[4] issued by petitioner, Sta. Maria submitted a partial liquidation of expenses amounting to P15,000.00 against the cash advance of P33,190.73. Respondent Sta. Maria allegedly used the money as payment for the design, including the pipelaying scheme, service connection detail, and the interconnection detail, of the Sitio Wawa Pipeline Extension. The liquidation report was supported by a Reimbursement Expense Receipt17[5] indicating that the P15,000.00 was paid to and received by a certain Engineer Ricardo Reyes. On 10 November 1992, Sta. Maria made a final liquidation of expenses amounting to P16,790.40. The amount was used for the Paglabas Pipeline Extension in compliance with the request of the Municipal Mayor. As indicated in the journal voucher18[6] supporting the transaction, the diversion of funds was authorized by the Board of directors in a Board Meeting held on 9 October 1992. Mis sc On 14 December 1992, Sta. Maria was ousted as General Manager of petitioner Morong Water District.

On 24 September 1993, Maximo San Diego, petitioners officerin-charge, filed a complaint19[7] before the Office of the Ombudsman-Luzon against private respondents Sta. Maria and Censon for alleged violations of R.A. 3019, the Anti-Graft and Corrupt Practices Act and Article 217 of the Revised Penal Code on malversation of public funds. The complaint stated that respondents Sta. Maria and Censon confederated with one another and took advantage of their official positions as General Manager and Advisor, respectively, of the Morong Water District in taking from the funds of the said office the amount of P33,190.75 for the purpose of paying for the design of MOWAD Wawa, San Juan, Morong project. The complaint alleged that no such design was made, and that respondents made it appear that the amount of P15,000.00 was given to a certain Engineer Ricardo Reyes when in fact, they personally pocketed the aforesaid amount and the rest was spent in installing the water connections of the new market site of Morong, Rizal. As proof, petitioner attached the joint affidavit20[8] of its Bookkeeper, Cashier and Finance Manager and a certification21[9] from the Local Water Utilities Administration that no person by the name of engineer Ricardo Reyes has ever been employed by their agency. Respondents denied the charges in their respective counteraffidavits. Mis spped In her counter-affidavit, respondent Emma Censon denied receiving the amount of P15,000.00 as charged. She claimed that she was not the custodian of petitioners funds and that she did not have any participation in the preparation and execution of disbursement vouchers covering the release of funds.22[10] For his part, respondent Edgard Sta. Maria stated in his counteraffidavit that he was forcibly ousted as petitioners General Manager on 14 December 1992 due to the criminal and

15 16 17 18

19 20 21 22

administrative complaints he lodged against some members of petitioners Board of directors. In view of their subsequent indictment, the said officials vowed to get even with him by filing various complaints against him. With respect to the design for the Wawa Project, he claimed that he sent a letter dated March 29, 1993 to the Chairman of the Board, Mr. Aniceto Mateo, informing him that the original detailed design plans and drawings of the project were left at petitioners office. He likewise averred that the present complaint is closely interrelated with another case, docketed as Civil Case No. 492M, pending with the Regional Trial Court of Morong, Rizal.23[11] On March 28, 1994, public respondent, through Graft Investigation Officer Aleu A. Amante, issued the questioned Resolution dismissing the compliant. The resolution stated that "(a)fter a meticulous examination of the records of the case, there is no sufficient evidence to establish a probable cause for malversation or violation of RA 3019."24[12]Spped On 6 May 1994, petitioner filed a motion for Reconsideration25[13] of the above Resolution. On May 27, 1994, public respondent, through Graft Investigation Officer Wilfredo L. Pacasio, issued the questioned Order dismissing the Motion for Reconsideration. The Order first noted that the motion for reconsideration did not raise any new issues and did not adduce any newly discovered evidence. Instead of dismissing the motion outright on this ground, the Office of the Ombudsman made an extended discussion of the issues raised by petitioner. It was emphasized that the evidence on record, particularly the "journal voucher" and "reimbursement expense receipt", indubitably disclosed that the sum allegedly misappropriated had, in fact, been duly liquidated by the respondents. Moreover, the Ombudsman stated that the version of the respondents was more logical, natural and believable. Finally, public respondent states that the allegation of conspiracy had not been fully substantiated and thus, the
23 24 25

inclusion and joiner of respondent Emma Censon had no legal justification. Public respondent thus dismissed the motion for reconsideration and affirmed its Resolution dated 28 March 1994. Petitioner now comes to us by way of the instant Petition for Certiorari. Petitioner grounds the instant petition on the following allegation: Jo spped "(The) Hon. Office of the Deputy Ombudsman acted arbitrarily, whimsically and with grave abused (sic) of discretion and authority dismissed OMB Case No. 0-93-2579 when in the conduct of the preliminary investigation Respondents biasely (sic) disregarded the evidence in the record which clearly established a prima facie case of malversation as supported by the facts, the law and existing jurisprudence."26[14] There is no merit in the petition. At the outset, a reading of the petition shows that the issues raised refer primarily to the findings of fact made by the respondent public officials. On this point, it must be stressed that any appeal or application for remedy against a decision or finding of the Office of the Ombudsman may only be entertained by the Supreme Court, on pure question of law.27[15] Section 14 of Republic Act No. 6770, the Ombudsman Act of 1989, provides that "(n)o court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman, except the Supreme Court on pure question of law." Moreover, Section 27 of the said Act provides further that "(f)indings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive." A thorough examination of the questioned Order and Resolution of the Office of the Ombudsman and the records of the case reveal that the findings of fact made by the Ombudsman are supported by substantial evidence on record. Spped jo

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Petitioners main contention in its complaint before the Office of the Ombudsman is that private respondents conspired with each other in withdrawing the amount of P33,190.75 from the coffers of petitioner and then pocket P15,000.00 for their own personal use.28[16] On this point, we note with approval the following pronouncement of the Office of the Ombudsman: "After a meticulous examination of the records of the case, the undersigned finds that there is no sufficient evidence to establish a probable cause for malversation or violation of R.A. 3019 for that matter, and that respondents are probably guilty thereof. There is no question that respondent Edgard Sta. Maria is the payee of Cash Voucher No. 3150 dated August 3, 1992. On the face of the said cash voucher, it is disclosed that it was prepared by the Bookkeeper, certified as to the availability of funds by the Finance Officer and the check prepared by the Cashier. It is also disclosed by the same document that the cash advance was to be used for the design and execution of Project Wawa Pipeline Extension. As regards, therefore, to the participation of respondent Emma Censon it is very clear that she has nothing to do with the cash advance of P33,190.73. With respect to respondent Edgard Sta. Maria, obviously he has the duty to liquidate the said cash advance. However, complainants Annex "B" which is a general ledger of account, disclose that the amount of P16,790.40 was diverted to Paglabas Pipeline Extension, but which diversion was authorized by the Board of Directors as per Board Meeting of October 9, 1992. It is worthy to note that this general ledger was signed by complainants witnesses, the Bookkeeper and the Finance Manager, in the same manner that they affixed signatures on the cash voucher, together with the cashier. Miso Going back to respondent Sta. Marias duty to liquidate or account for the said cash advance, the evidence of complainant also shows that the
28

P16,790.40 was duly receipted by the Filacon Enterprises for the amount of 4 rolls of P.S. Tubing (32 pieces) 1 x 100 cm. It cannot be said therefore, that the amount of P16,790.40 was misappropriated by respondent Sta. Maria for his personal benefit. As to the remaining balance of P15,000.00 which allegedly was pocketed by respondent instead of using the same in payment in payment of the design for the Wawa project, there also appears a reimbursement expense receipt which is attached by the complainant as its Annex "D." The same was signed by a certain civil engineer Ricardo Reyes. The latter attested that he received the amount as partial payment for the design. Complainants claim that Ricardo Reyes is a fictitious person is based on the certification from the Local Water Utilities Administration that he is not an employee therein. The reimbursement expense receipt did not however state that Engineer Ricardo Reyes is an employee of LWUA. Hence, the certification of said agency will not be conclusive evidence of Ricardo Reyes being a fictitious person, as there was no representation of said fact in the reimbursement receipt."29[17] The above-quoted portion of the questioned resolution clearly shows that the findings of the Office of the Ombudsman regarding the liability of private respondents are supported by substantial evidence. The conclusion that the amounts allegedly malversed by private respondents were actually liquidated by them finds support not only in the evidence of private respondents but even in the evidence submitted by petitioner in its complaint. Such factual findings of the Office of the Ombudsman deserve due respect from the Supreme Court and should not be disturbed on appeal.30[18] Despite a clear showing that the issues involved in the instant petition are factual, petitioner, nonetheless, invokes the power of the court to reverse the decision of the Ombudsman by
29 30

alleging that the Office of the Ombudsman acted with grave abuse of discretion and authority. Petitioner claims that the public respondents acted arbitrarily and whimsically in disregarding the evidence on record which allegedly clearly show a prima facie case for malversation. Nex old We have closely examined the issues raised in the present petition, the arguments in support thereof, as well as the comments of the respondents thereon and the reply thereto and we find that the petition fails to show a grave abuse of discretion or any act without or in excess of jurisdiction on the part of private respondents. The public respondents act of dismissing the complaint against herein private respondents is neither whimsical or capricious. In fact, the complaint of petitioner was taken up by the Office of the Ombudsman in two extended discussions. Such fact virtually dispels any allegation that arbitrariness or abuse of discretion attended the resolution of petitioners complaint. The act of the Ombudsman is dismissing the complaint is an exercise of the Ombudsmans powers based upon constitutional mandate and the courts should not interfere with such exercise.31[19] The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the functions of the Court will be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it. One final point. Petitioner likewise contends that the Office of the Ombudsman erred in stating that demand from the Commission on Audit to settle or liquidate the amount is needed before a case for malversation can mature. Citing the case of U.S. vs. Saberon,32[20] the petitioner argues that demand need not be made by the Commission on Audit as it is sufficient that there is a law or regulation requiring the public officer to render an accounting. Mani kx

There is merit in petitioners contention although his reliance on the cited case is misplaced. The Saberon case is not applicable as it deals with a violation of Article 218 of the Revised Penal Code for failure of accountable officers to render accounts. On the other hand, the instant case involves a violation of Article 217 of the Revised Penal Code for malversation of public funds and property which is entirely separate and distinct from Article 218. Petitioner should have cited the case of People vs. Tolentino33[21] which held that previous demand is not necessary for violation of article 217 in spite of the last paragraph of the said provision. The last paragraph of article 217 provides only for a rule of procedural law. More recently, in the case of Nizurtado vs. Sandiganbayan,34[22] the Court stated in this regard that "(d)emand merely raises a prima facie presumption that missing funds have been put to personal use. The demand itself, however, is not an element of, and not indispensable to constitute, malversation." Maniks Be that as it may, this is still no reason to overturn the assailed Order and Resolution of the Office of the Ombudsman. The holding of the Office of the Ombudsman that no demand was made by the Commission on Audit is not the main reason why petitioners complaint was dismissed. As stated previously, the Office of the ombudsman dismissed the complaint as it found that there was no sufficient evidence to establish probable cause against private respondents for malversation or violation of R.A. 3019. In sum, the order and the Resolution of the Ombudsman are based on substantial evidence. In dismissing the complaint of petitioner, we cannot say that the Ombudsman committed grave abuse of discretion so as to call for the exercise of our supervisory powers over him. This court is not a trier of facts. As long as there is substantial evidence in support of the Ombudsmans decision, that the decision will not be overturned.35[23]

33 31 32 34 35

WHEREFORE, premises considered, the instant petition is DISMISSED. The Resolution dated March 28, 1994 and the Order dated May 27, 1994 of the Office of the Ombudsman are hereby AFFIRMED. SO ORDERED. Manikan [G.R. No. 103501-03. February 17, 1997] LUIS A. TABUENA, petitioner, vs. HONORABLE SANDIGANBAYAN, and THE PEOPLE OF THE PHILIPPINES, respondents. [G.R. No. 103507. February 17, 1997] ADOLFO M. PERALTA, petitioner, vs. HON. SANDIGANBAYAN (First Division), and THE PEOPLE OF THE PHILIPPINES, represented by the OFFICE OF THE SPECIAL PROSECUTOR, respondents. DECISION FRANCISCO, J.: Through their separate petitions for review,lx[1] Luis A. Tabuena and Adolfo M. Peralta (Tabuena and Peralta, for short) appeal the Sandiganbayan decision dated October 12, 1990,lxi[2] as well as the Resolution dated December 20, 1991lxii[3] denying reconsideration, convicting them of malversation under Article 217 of the Revised Penal Code. Tabuena and Peralta were found guilty beyond reasonable doubt of having malversed the total amount of P55 Million of the Manila International Airport Authority (MIAA) funds during their incumbency as General Manager and Acting Finance Services Manager, respectively, of MIAA, and were thus meted the following sentence: (1) In Criminal Case No. 11758, accused Luis A. Tabuena is sentenced to suffer the penalty of imprisonment of seventeen (17) years and one (1) day of reclusion temporal as minimum to twenty (20) years of reclusion temporal as maximum, and to pay a fine of TWENTY-FIVE MILLION PESOS (P25,000,000.00), the amount malversed. He shall also reimburse the Manila International Airport Authority the sum of TWENTY-FIVE MILLION PESOS (P25,000,000.00). In addition, he shall suffer the penalty of perpetual special disqualification from public office.

(2) In Criminal Case No. 11759, accused Luis A. Tabuena is sentenced to suffer the penalty of imprisonment of seventeen (17) years and one (1) day of reclusion temporal as minimum, and twenty (20) years of reclusion temporal as maximum, and to pay a fine of TWENTY-FIVE MILLION PESOS (P25,000,000.00), the amount malversed. He shall also reimburse the Manila International Airport Authority the sum of TWENTY-FIVE MILLION PESOS (P25,000,000.00). In addition, he shall suffer the penalty of perpetual special disqualification from public office. (3) In Criminal Case No. 11760, accused Luis A. Tabuena and Adolfo M. Peralta are each sentenced to suffer the penalty of imprisonment of seventeen (17) years and one (1) day of reclusion temporal as minimum and twenty (20) years of reclusion temporal as maximum and for each of them to pay separately a fine of FIVE MILLION PESOS (P5,000,000.00) the amount malversed. They shall also reimburse jointly and severally the Manila International Airport Authority the sum of FIVE MILLION PESOS (P5,000,000.00). In addition, they shall both suffer the penalty of perpetual special disqualification from public office. A co-accused of Tabuena and Peralta was Gerardo G. Dabao, then Assistant General Manager of MIAA, has remained at large. There were three (3) criminal cases filed (nos. 11758, 11759 and 11760) since the total amount of P55 Million was taken on three (3) separate dates of January, 1986. Tabuena appears as the principal accused - he being charged in all three (3) cases. The amended informations in criminal case nos. 11758, 11759 and 11760 respectively read: That on or about the 10th day of January, 1986, and for sometime subsequent thereto, in the City of Pasay, Philippines, and within the jurisdiction of this Honorable Court, accused Luis A. Tabuena and Gerardo G. Dabao, both public officers, being then the General Manager and Assistant General Manager, respectively, of the Manila International Airport Authority (MIAA), and accountable for public funds belonging to the MIAA, they

being the only ones authorized to make withdrawals against the cash accounts of MIAA pursuant to its board resolutions, conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriate the amount of TWENTY FIVE MILLION PESOS (P25,000,000.00) from MIAA funds by applying for the issuance of a managers check for said amount in the name of accused Luis A. Tabuena chargeable against MIAAs Savings Account No. 274-500-354-3 in the PNB Extension Office at the Manila International Airport in Pasay City, purportedly as partial payment to the Philippine National Construction Corporation (PNCC), the mechanics of which said accused Tabuena would personally take care of, when both accused well knew that there was no outstanding obligation of MIAA in favor of PNCC, and after the issuance of the abovementioned managers check, accused Luis A. Tabuena encashed the same and thereafter both accused misappropriated and converted the proceeds thereof to their personal use and benefit, to the damage and prejudice of the government in the aforesaid amount. CONTRARY TO LAW. xxx That on or about the 16th day of January, 1986, and for sometime subsequent thereto, in the City of Pasay, Philippines and within the jurisdiction of this Honorable Court, accused Luis A. Tabuena and Gerardo G. Dabao, both public officers, being then the General Manager and Assistant General Manager, respectively, of the Manila International Airport Authority (MIAA), and accountable for public funds belonging to the MIAA, they being the only ones authorized to make withdrawals against the cash accounts of MIAA pursuant to its board resolutions, conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriate the amount of TWENTY FIVE MILLION PESOS (P25,000,000.00) from MIAA funds by applying for the issuance of a managers check for said amount in the name of accused Luis A. Tabuena chargeable against MIAAs Savings Account No. 274-500-354-3 in the PNB Extension Office at the Manila International Airport in Pasay City, purportedly as partial payment to the Philippine National

Construction Corporation (PNCC), the mechanics of which said accused Tabuena would personally take care of, when both accused well knew that there was no outstanding obligation of MIAA in favor of PNCC, and after the issuance of the abovementioned managers check, accused Luis A. Tabuena encashed the same and thereafter both accused misappropriated and converted the proceeds thereof to their personal use and benefit, to the damage and prejudice of the government in the aforesaid amount. CONTRARY TO LAW. xxx That on or about the 29th day of January, 1986, and for sometime subsequent thereto, in the City of Pasay, Philippines, and within the jurisdiction of this Honorable Court, accused Luis A. Tabuena and Adolfo M. Peralta, both public officers, being then the General Manager and Acting Manager, Financial Services Department, respectively, of the Manila International Airport Authority (MIAA), and accountable for public funds belonging to the MIAA, they being the only ones authorized to make withdrawals against the cash accounts of MIAA pursuant to its board resolutions, conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriate the amount of FIVE MILLION PESOS (P5,000,000.00) from MIAA funds by applying for the issuance of a managers check for said amount in the name of accused Luis A. Tabuena chargeable against MIAAs Savings Account No. 274-500-354-3 in the PNB Extension Office at the Manila International Airport in Pasay City, purportedly as partial payment to the Philippine National Construction Corporation (PNCC), the mechanics of which said accused Tabuena would personally take care of, when both accused well knew that there was no outstanding obligation of MIAA in favor of PNCC, and after the issuance of the above-mentioned managers check, accused Luis A. Tabuena encashed the same and thereafter both accused misappropriated and converted the proceeds thereof to their personal use and benefit, to the damage and prejudice of the government in the aforesaid amount.

CONTRARY TO LAW. Gathered from the documentary and testimonial evidence are the following essential antecedents: Then President Marcos instructed Tabuena over the phone to pay directly to the presidents office and in cash what the MIAA owes the Philippine National Construction Corporation (PNCC), to which Tabuena replied, Yes, sir, I will do it. About a week later, Tabuena received from Mrs. Fe Roa-Gimenez, then private secretary of Marcos, a Presidential Memorandum dated January 8, 1986 (hereinafter referred to as MARCOS Memorandum) reiterating in black and white such verbal instruction, to wit: Office of the President of the Philippines Malacaang January 8, 1986 MEMO TO: The General Manager Manila International Airport Authority You are hereby directed to pay immediately the Philippine National Construction Corporation, thru this Office, the sum of FIFTY FIVE MILLION (P55,000,000.00) PESOS in cash as partial payment of MIAAs account with said Company mentioned in a Memorandum of Minister Roberto Ongpin to this Office dated January 7, 1985 and duly approved by this Office on February 4, 1985. Your immediate compliance is appreciated. MARCOS. [4] The January 7, 1985 memorandum of then Minister of Trade and Industry Roberto Ongpin referred to in the MARCOS Memorandum, reads in full:
lxiii

MEMORANDUM For : The President : Minister Roberto V. Ongpin : 7 January 1985 : Approval of Supplemental Contracts and

From Date Subject

Request for Partial Deferment of Repayment of PNCCs Advances for MIA Development Project May I request your approval of the attached recommendations of Minister Jesus S. Hipolito for eight (8) supplemental contracts pertaining to the MIA Development Project (MIADP) between the Bureau of Air Transport (BAT) and Philippine National Construction Corporation (PNCC), formerly CDCP, as follows: 1. 12 2 2. 13 Supplemental Contract No. 5,758,961.52 Supplemental Contract No. P11,106,600.95 Package Contract No.

3. Supplemental Contract No. 14 Package Contract No. 2 4. Supplemental Contract No. 15 5. Supplemental Contract No. 16 Package Contract No. 2 6. Supplemental Contract No. 17 Package Contract No. 2 7. Supplemental Contract No. 18 Package Contract No. 2 8. Supplemental Contract No. 3 6,110,115.75 8,821,731.08 233,561.22 4,586,610.80 1,699,862.69

(Sgd.) FERDINAND

Package Contract No. II

16,617,655.49

(xerox copies only; original memo was submitted to the Office of the President on May 28, 1984) In this connection, please be informed that Philippine National Construction Corporation (PNCC), formerly CDCP, has accomplishment billings on the MIA Development Project aggregating P98.4 million, inclusive of accomplishments for the aforecited contracts. In accordance with contract provisions, outstanding advances totalling P93.9 million are to be deducted from said billings which will leave a net amount due to PNCC of only P4.5 million. At the same time, PNCC has potential escalation claims amounting to P99 million in the following stages of approval/evaluation: Approved by Price Escalation Committee P 1.9 million (PEC) but pended for lack of funds Endorsed by project consultants and 30.7 million currently being evaluated by PEC Submitted by PNCC directly to PEC and 66.5 million currently under evaluation Total P99.1 million There has been no funding allocation for any of the above escalation claims due to budgetary constraints. The MIA Project has been completed and operational as far back as 1982 and yet residual amounts due to PNCC have not been paid, resulting in undue burden to PNCC due to additional cost of money to service its obligations for this contract. To allow PNCC to collect partially its billings, and in consideration of its pending escalation billings, may we request for His Excellencys approval for a deferment of the repayment of PNCCs advances to the extent of P30 million corresponding to about 30% of P99.1 million in escalation claims of PNCC, of which P32.5 million has been officially recognized by MIADP consultants but could not be paid due to lack of funding.Korte

Our proposal will allow BAT to pay PNCC the amount of P34.5 million out of existing MIA Project funds. This amount represents the excess of the gross billings of PNCC of P98.4 million over the undeferred portion of the repayment of advances of P63.9 million. (Sgd.) ROBERTO V. ONGPIN Ministerlxiv[5] In obedience to President Marcos verbal instruction and memorandum, Tabuena, with the help of Dabao and Peralta, caused the release of P55 Million of MIAA funds by means of three (3) withdrawals. The first withdrawal was made on January 10, 1986 for P25 Million, following a letter of even date signed by Tabuena and Dabao requesting the PNB extension office at the MIAA - the depository branch of MIAA funds, to issue a managers check for said amount payable to Tabuena. The check was encashed, however, at the PNB Villamor Branch. Dabao and the cashier of the PNB Villamor branch counted the money after which, Tabuena took delivery thereof. The P25 Million in cash were then placed in peerless boxes and duffle bags, loaded on a PNB armored car and delivered on the same day to the office of Mrs. Gimenez located at Aguado Street fronting Malacaang. Mrs. Gimenez did not issue any receipt for the money received. Similar circumstances surrounded the second withdrawal/encashment and delivery of another P25 Million, made on January 16, 1986. The third and last withdrawal was made on January 31, 1986 for P5 Million. Peralta was Tabuenas co-signatory to the letterrequest for a managers check for this amount. Peralta accompanied Tabuena to the PNB Villamor branch as Tabuena requested him to do the counting of the P5 Million. After the counting, the money was placed in two (2) peerless boxes which were loaded in the trunk of Tabuenas car. Peralta did not go with Tabuena to deliver the money to Mrs. Gimenez office at Aguado Street. It was only upon delivery of the P5 Million that

Mrs. Gimenez issued a receipt for all the amounts she received from Tabuena. The receipt, dated January 30, 1986, reads: Malacaang Manila January 30, 1986 RECEIVED FROM LOUIE TABUENA THE TOTAL AMOUNT OF FIFTY FIVE MILLION PESOS (P55,000,000.00) as of the following dates: Jan. 10 - P25,000,000.00 Jan. 16 Jan. 30 25,000,000.00 5,000,000.00

With the rejection by the Sandiganbayan of their claim of good faith which ultimately led to their conviction, Tabuena and Peralta now set forth a total of ten (10) errorslxv[6] committed by the Sandiganbayan for this Courts consideration. It appears, however, that at the core of their plea that we acquit them are the following: 1) the Sandiganbayan convicted them of a crime not charged in the amended informations, and 2) they acted in good faith. Anent the first proposition, Tabuena and Peralta stress that they were being charged with intentional malversation, as the amended informations commonly allege that: x x x accused x x x conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriated the amount of x x x. But it would appear that they were convicted of malversation by negligence. In this connection, the Courts attention is directed to p. 17 of the December 20, 1991 Resolution (denying Tabuenas and Peraltas motion for reconsideration) wherein the Sandiganbayan said: x x x xxx xxx

(Sgd.) Fe Roa-Gimenez The disbursement of the P55 Million was, as described by Tabuena and Peralta themselves, out of the ordinary and not based on the normal procedure. Not only were there no vouchers prepared to support the disbursement, the P55 Million was paid in cold cash. Also, no PNCC receipt for the P55 Million was presented. Defense witness Francis Monera, then Senior Assistant Vice President and Corporate Comptroller of PNCC, even affirmed in court that there were no payments made to PNCC by MIAA for the months of January to June of 1986. The position of the prosecution was that there were no outstanding obligations in favor of PNCC at the time of the disbursement of the P55 Million. On the other hand, the defense of Tabuena and Peralta, in short, was that they acted in good faith. Tabuena claimed that he was merely complying with the MARCOS Memorandum which ordered him to forward immediately to the Office of the President P55 Million in cash as partial payment of MIAAs obligations to PNCC, and that he (Tabuena) was of the belief that MIAA indeed had liabilities to PNCC. Peralta for his part shared the same belief and so he heeded the request of Tabuena, his superior, for him (Peralta) to help in the release of P5 Million.

On the contrary, what the evidence shows is that accused Tabuena delivered the P55 Million to people who were not entitled thereto, either as representatives of MIAA or of the PNCC.Sclaw It proves that Tabuena had deliberately consented or permitted through negligence or abandonment, some other person to take such public funds. Having done so, Tabuena, by his own narration, has categorically demonstrated that he is guilty of the misappropriation or malversation of P55 Million of public funds. (Underscoring supplied.)

To support their theory that such variance is a reversible flaw, Tabuena and Peralta argue that: 1) While malversation may be committed intentionally or by negligence, both modes cannot be committed at the same time. 2) The Sandiganbayan was without jurisdiction to convict them of malversation of negligence where the amended informations charged them with intentional malversation.lxvi[7] 3) Their conviction of a crime different from that charged violated their constitutional right to be informed of the accusation.lxvii[8] We do not agree with Tabuena and Peralta on this point. Illuminative and controlling is Cabello v. Sandiganbayanlxviii[9] where the Court passed upon similar protestations raised by therein accused-petitioner Cabello whose conviction for the same crime of malversation was affirmed, in this wise: x x x 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. x x x. In Samson vs. Court of Appeals, et. al., we held that an accused charged with willful or intentional falsification can validly be convicted of falsification through negligence, thus: While a criminal negligent act is not a simple modality of a willful crime, as we held in Quizon vs. Justice of the Peace of Bacolor, G.R. No. L-6641, July 28, 1995, but a distinct crime in our Penal Code, designated as a quasi offense in our Penal Code, it may however be said that a conviction for the former can be had under an information exclusively charging the commission of a willful offense, upon the theory that the greater includes the

lesser offense. This is the situation that obtains in the present case. Appellant was charged with willful falsification but from the evidence submitted by the parties, the Court of Appeals found that in effecting the falsification which made possible the cashing of the checks in question, appellant did not act with criminal intent but merely failed to take proper and adequate means to assure himself of the identity of the real claimants as an ordinary prudent man would do. In other words, the information alleges acts which charge willful falsification but which turned out to be not willful but negligent. This is a case covered by the rule when there is a variance between the allegation and proof, and is similar to some of the cases decided by this Tribunal. xxx Moreover, Section 5, Rule 116, of the Rules of Court does not require that all the essential elements of the offense charged in the information be proved, it being sufficient that some of said essential elements or ingredients thereof be established to constitute the crime proved. x x x. The fact that the information does not allege that the falsification was committed with imprudence is of no moment for here this deficiency appears supplied by the evidence submitted by appellant himself and the result has proven beneficial to him. Certainly, having alleged that the falsification has been willful, it would be incongruous to allege at the same time that it was committed with imprudence for a charge of criminal intent is incompatible with the concept of negligence. Subsequently, we ruled in People vs. Consigna, et. al., that the aforestated rationale and arguments also apply to the felony of malversation, that is, that an accused charged with willful malversation, in an information containing allegations similar to those involved in the present case, can be validly convicted of the same offense of malversation through negligence where the evidence sustains the latter mode of perpetrating the offense. Going now to the defense of good faith, it is settled that this is a valid defense in a prosecution for malversation for it would negate criminal intent on the part of the accused. Thus, in the

two (2) vintage, but significant malversation cases of US v. Catolicolxix[10] and US v. Elvia,lxx[11] the Court stressed that: To constitute a crime, the act must, except in certain crimes made such by statute, be accompanied by a criminal intent, or by such negligence or indifference to duty or to consequences as, in law, is equivalent to criminal intent. The maxim is actus non facit reum, nisi mens sit rea - a crime is not committed if the mind of the person performing the act complained of is innocent. The rule was reiterated in People v. Pacana,lxxi[12] although this case involved falsification of public documents and estafa: Ordinarily, evil intent must unite with an unlawful act for there to be a crime. Actus non facit reum, nisi mens sit rea. There can be no crime when the criminal mind is wanting. American jurisprudence echoes the same principle. It adheres to the view that criminal intent in embezzlement is not based on technical mistakes as to the legal effect of a transaction honestly entered into, and there can be no embezzlement if the mind of the person doing the act is innocent or if there is no wrongful purpose.lxxii[13] The accused may thus always introduce evidence to show he acted in good faith and that he had no intention to convert.lxxiii[14] And this, to our mind, Tabuena and Peralta had meritoriously shown. In so far as Tabuena is concerned, with the due presentation in evidence of the MARCOS Memorandum, we are swayed to give credit to his claim of having caused the disbursement of the P55 Million solely by reason of such memorandum. From this premise flows the following reasons and/or considerations that would buttress his innocence of the crime of malversation. First. Tabuena had no other choice but to make the withdrawals, for that was what the MARCOS Memorandum required him to do. He could not be faulted if he had to obey and strictly comply with the presidential directive, and to argue otherwise is something easier said than done. Marcos was undeniably Tabuenas superior the former being then the President of the Republic who unquestionably exercised control

over government agencies such as the MIAA and PNCC.lxxiv[15] In other words, Marcos had a say in matters involving intergovernment agency affairs and transactions, such as for instance, directing payment of liability of one entity to another and the manner in which it should be carried out. And as a recipient of such kind of a directive coming from the highest official of the land no less, good faith should be read on Tabuenas compliance, without hesitation nor any question, with the MARCOS Memorandum. Tabuena therefore is entitled to the justifying circumstance of Any person who acts in obedience to an order issued by a superior for some lawful purpose.lxxv[16] The subordinate-superior relationship between Tabuena and Marcos is clear. And so too, is the lawfulness of the order contained in the MARCOS Memorandum, as it has for its purpose partial payment of the liability of one government agency (MIAA) to another (PNCC). However, the unlawfulness of the MARCOS Memorandum was being argued, on the observation, for instance, that the Ongpin Memo referred to in the presidential directive reveals a liability of only about P34.5 Million. The Sandiganbayan in this connection said: Exhibits 2 and 2-a (pages 1 and 2 of the memorandum of Min. Ongpin to the President dated January 7, 1985) were mainly: a.) for the approval of eight Supplemental Contracts; and b.) a request for partial deferment of payment by PNCC for advances made for the MIAA Development Project, while at the same time recognizing some of the PNCCs escalation billings which would result in making payable to PNCC the amount of P34.5 million out of existing MIAA Project funds. Thus: xxx To allow PNCC to collect partially its billings, and in consideration of its pending escalation billings, may we request for His Excellencys approval for a deferment of repayment of PNCCs advances to the extent of P30 million corresponding to about 30% of P99.1 million in escalation claims of PNCC, of

which P32.6 million has been officially recognized by MIADP consultants but could not be paid due to lack of funding. Our proposal will allow BAT to pay PNCC the amount of P34.5 million out of existing MIA Project funds. This amount represents the excess of the gross billings of PNCC of P98.4 million over the undeferred portion of the repayment of advances of P63.9 million. While Min. Ongpin may have, therefore recognized the escalation claims of the PNCC to MIAA to the extent of P99.1 million (Exhibit 2a), a substantial portion thereof was still in the stages of evaluation and approval, with only P32.6 million having been officially recognized by the MIADP consultants. If any payments were, therefore, due under this memo for Min. Ongpin (upon which President Marcos Memo was based) they would only be for a sum of up to P34.5 million.lxxvi[17] xxx xxx xxx V. Pres. Marcos order to Tabuena dated January 8, 1986 baseless. Not only was Pres. Marcos Memo (Exhibit 1) for Tabuena to pay P55 million irrelevant, but it was actually baseless. This is easy to see. Exhibit 1 purports to refer itself to the Ongpin Memorandum (Exhibit 2, 2-a); Exhibit 1, however, speaks of P55 million to be paid to the PNCC while Exhibit 2 authorized only P34.5 million. The order to withdraw the amount of P55 million exceeded the approved payment of P34.5 million by P20.5 million. Min. Ongpins Memo of January 7, 1985 could not therefore serve as a basis for the Presidents order to withdraw P55 million.lxxvii[18] Granting this to be true, it will not nevertheless affect Tabuenas good faith so as to make him criminally liable. What is more significant to consider is that the MARCOS Memorandum is patently legal (for on its face it directs payment of an

outstanding liability) and that Tabuena acted under the honest belief that the P55 million was a due and demandable debt and that it was just a portion of a bigger liability to PNCC. This belief is supported by defense witness Francis Monera who, on direct examination, testified that: ATTY ANDRES Q Can you please show us in this Exhibit 7 and 7-a where it is indicated the receivables from MIA as of December 31, 1985? A As of December 31, 1985, the receivables from MIA is shown on page 2, marked as Exhibit 7-a, sir, P102,475,392.35. xxx xxx x x x.lxxviii[19]

ATTY. ANDRES Q Can you tell us, Mr. Witness, what these obligations represent? WITNESS A These obligations represent receivables on the basis of our billings to MIA as contract-owner of the project that the Philippine National Construction Corporation constructed. These are billings for escalation mostly, sir. Q What do you mean by escalation?

A Escalation is the component of our revenue billings to the contract-owner that are supposed to take care of price increases, sir. xxx x.lxxix[20] ATTY ANDRES Q When you said these are accounts receivable, do I understand from you that these are due and demandable? xxx xx

Yes, sir.lxxx[21]

Thus, even if the order is illegal if it is patently legal and the subordinate is not aware of its illegality, the subordinate is not liable, for then there would only be a mistake of fact committed in good faith.lxxxi[22] Such is the ruling in Nassif v. Peoplelxxxii[23] the facts of which, in brief, are as follows: Accused was charged with falsification of commercial document. A mere employee of R.J. Campos, he inserted in the commercial document alleged to have been falsified the word sold by order of his principal. Had he known or suspected that his principal was committing an improper act of falsification, he would be liable either as a co-principal or as an accomplice. However, there being no malice on his part, he was exempted from criminal liability as he was a mere employee following the orders of his principal.lxxxiii[24] Second. There is no denying that the disbursement, which Tabuena admitted as out of the ordinary, did not comply with certain auditing rules and regulations such as those pointed out by the Sandiganbayan, to wit: a) [except for salaries and wages and for commutation of leaves] all disbursements above P1,000.00 should be made by check (Basic Guidelines for Internal Control dated January 31, 1977 issued by COA) b) payment of all claims against the government had to be supported with complete documentation (Sec. 4, P.D. 1445, State Auditing Code of the Philippines). In this connection, the Sandiganbayan observed that: There were no vouchers to authorize the disbursements in question. There were no bills to support the disbursement. There were no certifications as to the availability of funds for an unquestionably staggering sum of P55 Million.lxxxiv[25] c) failure to protest (Sec. 106, P.D. 1445) But this deviation was inevitable under the circumstances Tabuena was in. He did not have the luxury of time to observe

all auditing procedures of disbursement considering the fact that the MARCOS Memorandum enjoined his immediate compliance with the directive that he forward to the Presidents Office the P55 Million in cash. Be that as it may, Tabuena surely cannot escape responsibility for such omission. But since he was acting in good faith, his liability should only be administrative or civil in nature, and not criminal. This follows the decision in Villacorta v. Peoplelxxxv[26] where the Court, in acquitting therein accused municipal treasurer of Pandan, Catanduanes of malversation after finding that he incurred a shortage in his cash accountability by reason of his payment in good faith to certain government personnel of their legitimate wages, leave allowances, etc., held that: Nor can negligence approximating malice or fraud be attributed to petitioner. If he made wrong payments, they were in good faith mainly to government personnel, some of them working at the provincial auditors and the provincial treasurers offices. And if those payments ran counter to auditing rules and regulations, they did not amount to a criminal offense and he should only be held administratively or civilly liable. Likewise controlling is US v. Elvialxxxvi[27] where it was held that payments in good faith do not amount to criminal appropriation, although they were made with insufficient vouchers or improper evidence. In fact, the Dissenting Opinions reference to certain provisions in the revised Manual on Certificate of Settlement and Balances - apparently made to underscore Tabuenas personal accountability, as agency head, for MIAA funds - would all the more support the view that Tabuena is vulnerable to civil sanctions only. Sections 29.2 and 29.5 expressly and solely speak of civilly liable to describe the kind of sanction imposable on a superior officer who performs his duties with bad faith, malice or gross negligence and on a subordinate officer or employee who commits willful or negligent acts x x x which are contrary to law, morals, public policy and good customs even if he acted under order or instructions of his superiors. Third. The Sandiganbayan made the finding that Tabuena had already converted and misappropriated the P55 Million when he delivered the same to Mrs. Gimenez and not to the PNCC,

proceeding from the following definitions/concepts of conversion: Conversion, as necessary element of offense of embezzlement, being the fraudulent appropriation to ones own use of anothers property which does not necessarily mean to ones personal advantage but every attempt by one person to dispose of the goods of another without right as if they were his own is conversion to his own use. (Terry v. Water Improvement Dist. No. 5 of Tulsa County, 64 p. 2d 904, 906, 179 Okl. 106) - At p. 207, Words and Phrases, Permanent Edition 9A. Conversion is any interference subversive of the right of the owner of personal property to enjoy and control it. The gist of conversion is the usurpation of the owners right of property, and not the actual damages inflicted. Honesty of purpose is not a defense. (Ferrera v. Parks, 23 p. 883, 885 19 Or. 141) - At page 168, id. xxx xxx xxx The words convert and misappropriate connote an act of using or disposing of anothers property as if it were ones own. They presuppose that the thing has been devoted to a purpose or use different from that agreed upon. To appropriate to ones own use includes not only conversion to ones personal advantage but every attempt to dispose of the property of another without right. People vs. Webber, 57 O.G. p. 2933, 2937 By placing them at the disposal of private persons without due authorization or legal justification, he became as guilty of malversation as if he had personally taken them and converted them to his own use.

People vs. Luntao, 50 O.G. p. 1182, 1183lxxxvii[28] We do not agree. It must be stressed that the MARCOS Memorandum directed Tabuena to pay immediately the Philippine National Construction Corporation, thru this office, the sum of FIFTY FIVE MILLION...., and that was what Tabuena precisely did when he delivered the money to Mrs. Gimenez. Such delivery, no doubt, is in effect delivery to the Office of the President inasmuch as Mrs. Gimenez was Marcos secretary then. Furthermore, Tabuena had reasonable ground to believe that the President was entitled to receive the P55 Million since he was certainly aware that Marcos, as Chief Executive, exercised supervision and control over government agencies. And the good faith of Tabuena in having delivered the money to the Presidents office (thru Mrs. Gimenez), in strict compliance with the MARCOS Memorandum, was not at all affected even if it later turned out that PNCC never received the money. Thus, it has been said that: Good faith in the payment of public funds relieves a public officer from the crime of malversation. xxx xxx xxx

Not every unauthorized payment of public funds is malversation. There is malversation only if the public officer who has custody of public funds should 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. Where the payment of public funds has been made in good faith, and there is reasonable ground to believe that the public officer to whom the fund had been paid was entitled thereto, he is deemed to have acted in good faith, there is no criminal intent, and the payment, if it turns out that it is unauthorized, renders him only civilly but not criminally liable.lxxxviii[29] Fourth. Even assuming that the real and sole purpose behind the MARCOS Memorandum was to siphon-out public money for the personal benefit of those then in power, still, no criminal

liability can be imputed to Tabuena. There is no showing that Tabuena had anything to do whatsoever with the execution of the MARCOS Memorandum. Nor is there proof that he profited from the felonious scheme. In short, no conspiracy was established between Tabuena and the real embezzler/s of the P55 Million. In the cases of US v. Acebedolxxxix[30] and Ang v. Sandiganbayan,xc[31] both also involving the crime of malversation, the accused therein were acquitted after the Court arrived at a similar finding of non-proof of conspiracy. In Acebedo, therein accused, as municipal president of Palo, Leyte, was prosecuted for and found guilty by the lower court of malversation after being unable to turn over certain amounts to the then justice of the peace. It appeared, however, that said amounts were actually collected by his secretary Crisanto Urbina. The Court reversed Acebedos conviction after finding that the sums were converted by his secretary Urbina without the knowledge and participation of Acebedo. The Court said, which we herein adopt: No conspiracy between the appellant and his secretary has been shown in this case, nor did such conspiracy appear in the case against Urbina. No guilty knowledge of the theft committed by the secretary was shown on the part of the appellant in this case, nor does it appear that he in any way participated in the fruits of the crime. If the secretary stole the money in question without the knowledge or consent of the appellant and without negligence on his part, then certainly the latter can not be convicted of embezzling the same money or any part thereof.xci[32] In Ang, accused-petitioner, as MWSS bill collector, allowed part of his collection to be converted into checks drawn in the name of one Marshall Lu, a non-customer of MWSS, but the checks were subsequently dishonored. Ang was acquitted by this Court after giving credence to his assertion that the conversion of his collections into checks were thru the machinations of one Lazaro Guinto, another MWSS collector more senior to him. And we also adopt the Courts observation therein, that: The petitioners alleged negligence in allowing the senior collector to convert cash collections into checks may be proof of poor judgment or too trusting a nature insofar as a superior officer is concerned but there must be stronger evidence to

show fraud, malice, or other indicia of deliberateness in the conspiracy cooked up with Marshall Lu. The prosecution failed to show that the petitioner was privy to the conspirational scheme. Much less is there any proof that he profited from the questioned acts. Any suspicions of conspiracy, no matter how sincerely and strongly felt by the MWSS, must be converted into evidence before conviction beyond reasonable doubt may be imposed.xcii[33] The principles underlying all that has been said above in exculpation of Tabuena equally apply to Peralta in relation to the P5 Million for which he is being held accountable, i.e., he acted in good faith when he, upon the directive of Tabuena, helped facilitate the withdrawal of P5 Million of the P55 Million of the MIAA funds. This is not a sheer case of blind and misguided obedience, but obedience in good faith of a duly executed order. Indeed, compliance to a patently lawful order is rectitude far better than contumacious disobedience. In the case at bench, the order emanated from the Office of the President and bears the signature of the President himself, the highest official of the land. It carries with it the presumption that it was regularly issued. And on its face, the memorandum is patently lawful for no law makes the payment of an obligation illegal. This fact, coupled with the urgent tenor for its execution constrains one to act swiftly without question. Obedientia est legis essentia. Besides, the case could not be detached from the realities then prevailing. As aptly observed by Mr. Justice Cruz in his dissenting opinion: We reject history in arbitrarily assuming that the people were free during the era and that the judiciary was independent and fearless. We know it was not; even the Supreme Court at that time was not free. This is an undeniable fact that we can not just blink away. Insisting on the contrary would only make our sincerity suspect and even provoke scorn for what can only be described as our incredible credulity.xciii[34] But what appears to be a more compelling reason for their acquittal is the violation of the accuseds basic constitutional right to due process. Respect for the Constitution, to borrow

once again Mr. Justice Cruzs words, is more important than securing a conviction based on a violation of the rights of the accused.xciv[35] While going over the records, we were struck by the way the Sandiganbayan actively took part in the questioning of a defense witness and of the accused themselves. Tabuena and Peralta may not have raised this as an error, there is nevertheless no impediment for us to consider such matter as additional basis for a reversal since the settled doctrine is that an appeal throws the whole case open to review, and it becomes the duty of the appellate court to correct such errors as may be found in the judgment appealed from whether they are made the subject of assignments of error or not.xcv[36] Simply consider the volume of questions hurled by the Sandiganbayan. At the taking of the testimony of Francis Monera, then Senior Assistant Vice President and Corporate Comptroller of PNCC, Atty. Andres asked sixteen (16) questions on direct examination. Prosecutor Viernes only asked six (6) questions on cross-examination in the course of which the court interjected a total of twenty-seven (27) questions (more than four times Prosecutor Viernes questions and even more than the combined total of direct and cross-examination questions asked by the counsels). After the defense opted not to conduct any re-direct examination, the court further asked a total of ten (10) questions.xcvi[37] The trend intensified during Tabuenas turn on the witness stand. Questions from the court after Tabuenas cross-examination totalled sixty-seven (67).xcvii[38] This is more than five times Prosecutor Viernes questions on cross-examination (14), and more than double the total of direct examination and cross-examination questions which is thirty-one (31) [17 direct examination questions by Atty. Andres plus 14 cross-examination questions by Prosecutor Viernes]. In Peraltas case, the Justices, after his cross-examination, propounded a total of forty-one (41) questions.xcviii[39] But more importantly, we note that the questions of the court were in the nature of cross examinations characteristic of confrontation, probing and insinuation.xcix[40] (The insinuating type was best exemplified in one question addressed to Peralta, which will be underscored.) Thus we beg to quote in length from the transcripts pertaining to witness Monera, Tabuena and Peralta. (Questions from the Court are marked with asterisks and italicized for emphasis.)

(MONERA) (As a background, what was elicited from his direct examination is that the PNCC had receivables from MIAA totalling P102,475,392.35, and although such receivables were largely billings for escalation, they were nonetheless all due and demandable. What follows are the cross-examination of Prosecutor Viernes and the court questions). CROSS-EXAMINATION BY PROS. VIERNES Q You admit that as shown by these Exhibits 7 and 7-a, the items here represent mostly escalation billings. Were those escalation billings properly transmitted to MIA authorities? A I dont have the documents right now to show that they were transmitted, but I have a letter by our President, Mr. Olaguer, dated July 6, 1988, following up for payment of the balance of our receivables from MIA, sir. *AJ AMORES *Q This matter of escalation costs, is it not a matter for a conference between the MIA and the PNCC for the determination as to the correct amount? A I agree, your Honor. As far as we are concerned, our billings are what we deemed are valid receivables. And, in fact, we have been following up for payment. *Q This determination of the escalation costs was it accepted as the correct figure by MIA? A I dont have any document as to the acceptance by MIA, your Honor, but our company was able to get a document or a letter by Minister Ongpin to President Marcos, dated January 7, 1985, with a marginal note or approval by former President Marcos. *PJ GARCHITORENA *Q Basically, the letter of Mr. Ongpin is to what effect?

A The subject matter is approval of the supplementary contract and request for partial deferment of payment for MIA Development Project, your Honor. *Q It has nothing to do with the implementation of the escalation costs? A The details show that most of the accounts refer to our escalations, your Honor. *Q Does that indicate the computation for escalations were already billed or you do not have any proof of that? A Our subsidiary ledger was based on billings to MIA and this letter of Minister Ongpin appears to have confirmed our billings to MIA, your Honor. *AJ AMORES *Q Were there partial payments made by MIA on these escalation billings? A Based on records available as of today, the P102 million was reduced to about P56.7 million, if my recollection is correct, your Honor. *PJ GARCHITORENA

P44.4 million all in all. And you deduct that from the P102 million, the remaining balance would be about P57 million. *PJ GARCHITORENA *Q What you are saying is that, for all the payments made on this P102 million, only P2 million had been payments in cash? A Yes, your Honor.

*Q The rest had been adjustments of accounts, assignments of accounts, or offsetting of accounts? A *Q Yes, your Honor. This is as of December 31, 1985?

A The P102 million was as of December 31, 1985, your Honor, but the balances is as of August 1987. *Q We are talking now about the P44 million, more or less, by which the basic account has been reduced. These reductions, whether by adjustment or assignment or actual delivery of cash, were made after December 31, 1985? WITNESS

*Q Were the payments made before or after February 1986, since Mr. Olaguer is a new entrant to your company? WITNESS A The payments were made after December 31, 1985 but I think the payments were made before the entry of our President, your Honor. Actually, the payment was in the form of: assignments to State Investment of about P23 million; and then there was P17.8 million application against advances made or formerly given; and there were payments to PNCC of about P2.6 million and there was a payment for application on withholding and contractual stock of about P1 million; that summed up to

Yes, your Honor.

*Q And your records indicate when these adjustments and payments were made? A Yes, your Honor.

*AJ AMORES *Q You said there were partial payments before of these escalation billings. Do we get it from you that there was an admission of these escalation costs as

computed by you by MIA, since there was already partial payments? A Yes, your Honor.

A *Q A

The records will indicate that, your Honor. Except that you were not asked to bring them? Yes, your Honor.

*Q How were these payments made before February 1986, in case or check, if there were payments made? A The P44 million payments was in the form of assignments, your Honor. *PJ GARCHITORENA *Q The question of the Court is, before December 31, 1985, were there any liquidations made by MIA against these escalation billings? A I have not reviewed the details of the record, your Honor. But the ledger card indicates that there were collections on page 2 of the Exhibit earlier presented. It will indicate that there were collections shown by credits indicated on the credit side of the ledger. *AJ AMORES *Q Your ledger does not indicate the manner of giving credit to the MIA with respect to the escalation billings. Was the payment in cash or just credit of some sort before December 31, 1985? A Before December 31, 1985, the reference of the ledger are official receipts and I suppose these were payments in cash, your Honor. *Q Do you know how the manner of this payment in cash was made by MIA? A I do not know, your Honor.

*Q At all events, we are talking of settlement or partial liquidation prior to December 31, 1985? A Yes, your Honor.

*PJ GARCHITORENA *Q Subsequent thereto, we are talking merely of about P44 million? A *Q A Yes, your Honor, as subsequent settlements. After December 31, 1985? Yes, your Honor.

*Q And they have liquidated that, as you described it, by way of assignments, adjustments, by offsets and by P2 million of cash payment? A Yes, your Honor.

*AJ AMORES *Q Your standard operating procedure before December 31, 1985 in connection with or in case of cash payment, was the payment in cash or check? A *Q A I would venture to say it was by check, your Honor. Which is the safest way to do it? Yes, your Honor.

*PJ GARCHITORENA *Q But your records will indicate that?

*PJ GARCHITORENA

*Q A

And the business way? Yes, your Honor.

*Q A

As of what date? The letter is dated January 7, 1985, your Honor.

PJ GARCHITORENA Continue. PROS VIERNES Q You mentioned earlier about the letter of former Minister Ongpin to the former President Marcos, did you say that that letter concurs with the escalation billings reflected in Exhibits 7 and 7-a? WITNESS A The Company or the management is of the opinion that this letter, a copy of which we were able to get, is a confirmation of the acceptance of our billings, sir. Q This letter of Minister Ongpin is dated January 7, 1985, whereas the entries of escalation billings as appearing in Exhibit 7 are dated June 30, 1985, would you still insist that the letter of January 1985 confirms the escalation billings as of June 1985? A The entries started June 30 in the ledger card. And as of December 31, 1985, it stood at P102 million after payments were made as shown on the credit side of the ledger. I suppose hat the earlier amount, before the payment was made, was bigger and therefore I would venture to say that the letter of January 7, 1985 contains an amount that is part of the original contract account. What are indicated in the ledger are escalation billings. *PJ GARCHITORENA *Q A sir. We are talking about the letter of Minister Ongpin? The letter of Minister Ongpin refers to escalation billings,

PJ GARCHITORENA Continue. PROS. VIERNES Q In accordance with this letter marked Exhibit 7 and 7a, there were credits made in favor of MIA in July and November until December 1985. These were properly credited to the account of MIA? WITNESS A Yes, sir.

Q In 1986, from your records as appearing in Exhibit 7-a, there were no payments made to PNCC by MIA for the months of January to June 1986? A Yes, sir.

Q And neither was the amount of P22 million remitted to PNCC by MIA? A Yes, sir.

PROS VIERNES That will be all, your Honor. PJ GARCHITORENA Redirect? ATTY ANDRES No redirect, your Honor.

*PJ GARCHITORENA Questions from the Court. *AJ AMORES *Q From your records, for the month of January 1986, there was no payment of this escalation account by MIA? WITNESS A Yes, your Honor. But on page 2 of Exhibit 7 there appears an assignment of P23 million, that was on September 25, 1986. *Q But that is already under the present administration? A After February 1986, your Honor.

A Yes, your Honor. There were subsequent settlements. P23 million is just part of the P44 million. *Q And what you are saying is that, PNCC passed the account to State Investment. In other words, State Investment bought the credit of MIA? A Yes, your Honor.

*Q And the amount of credit or receivables sold by PNCC to State Investment is P23 million? A *Q Yes, your Honor. Is there a payback agreement?

A I have a copy of the assignment to State Investment but I have not yet reviewed the same, your Honor. *AJ AMORES

*Q But before February, in January 1986, there was no payment whatsoever by MIA to PNCC? A Per record there is none appearing, your Honor.

*Q As of now, is this obligation of MIA, now NAIA, paid to PNCC? A There is still a balance of receivables from MIA as evidenced by a collection letter by our President dated July 6, 1988, your Honor. The amount indicated in the letter is P55 million. PJ GARCHITORENA Any clarifications you would like to make Mr. Estebal?

*PJ GARCHITORENA *Q The earliest payment, whether by delivery of cash equivalent or of adjustment of account, or by assignment, or by offsets, when did these payments begin? A Per ledger card, there were payments in 1985, prior to December 31, 1985, your Honor. *Q After December 31, 1985?

ATTY ESTEBAL None, your Honor. PJ GARCHITORENA Mr. Viernes?

A There appears also P23 million as credit, that is a form of settlement, your Honor. *Q This is as of September 25?

PROS VIERNES No more, your Honor. PJ GARCHITORENA The witness is excused. Thank you very much Mr. Monera. x x x.c[41] (TABUENA) (In his direct examination, he testified that he caused the preparation of the checks totalling P55 Million pursuant to the MARCOS Memorandum and that he thereafter delivered said amount in cash on the three (3) dates as alleged in the information to Marcos private secretary Mrs. Jimenez at her office at Aguado Street, who thereafter issued a receipt. Tabuena also denied having used the money for his own personal use.) CROSS-EXAMINATION BY PROS. VIERNES Q The amount of P55 million as covered by the three (3) checks Mr. Tabuena, were delivered on how many occasions? A Three times, sir.

A I remember it was on the 31st of January, your Honor. What happened is that, I did not notice the date placed by Mrs. Gimenez. *Q Are you telling us that this Exhibit 3 was incorrectly dated? A Yes, your Honor.

*Q Because the third delivery was on January 31st and yet the receipt was dated January 30? A Yes, your Honor.

*Q When was Exhibit 3 delivered actually by Mrs. Gimenez? A January 31st, your Honor.

PJ GARCHITORENA Continue. PROS VIERNES Q A You did not go to Malacaang on January 30, 1986? Yes, sir, I did not.

Q And so, on the first two deliveries, you did not ask for a receipt from Mrs. Gimenez? A Yes, sir.

Q Do you know at whose instance this Exhibit 3 was prepared? A I asked for it, sir.

Q It was only on January 30, 1986 that this receipt Exhibit 3 was issued by Mrs. Gimenez? A Yes, sir.

Q You asked for it on January 31, 1986 when you made the last delivery? A Yes, sir.

*PJ GARCHITORENA *Q So January 30 is the date of the last delivery?

Q Did you see this Exhibit 3 prepared in the Office of Mrs. Gimenez?

Yes, sir.

Q Did you actually see Mrs. Gimenez signing this receipt Exhibit 3? A No, sir, I did not. She was inside her room.

Q This receipt was typewritten in Malacaang stationery. Did you see who typed this receipt? A No, sir. What happened is that, she went to her room and when she came out she gave me that receipt. *PJ GARCHITORENA *Q What you are saying is, you do not know who typed that receipt? WITNESS A Yes, your Honor.

Q So, she was in her room and when she came out of the room, she handed this receipt to you already typed and signed? A Yes, sir.

*AJ HERMOSISIMA *Q So, how did you know this was the signature of Mrs. Gimenez? WITNESS A Because I know her signature, your Honor. I have been receiving letters from her also and when she requests for something from me. Her writing is familiar to me. *Q So, when the Presiding Justice asked you as to how you knew that this was the signature of Mrs. Gimenez and you answered that you saw Mrs. Gimenez signed it, you were not exactly truthful? A What I mean is, I did not see her sign because she went to her room and when she came out, she gave me that receipt, your Honor. PJ GARCHITORENA That is why you have to wait for the question to be finished and listen to it carefully. Because when I asked you, you said you saw her signed it. Be careful Mr. Tabuena. WITNESS Yes, your Honor. PJ GARCHITORENA

*Q Are you making an assumption that she typed that receipt? A *Q A Yes, your Honor, because she knows how to type. Your assumption is that she typed it herself? Yes, your Honor.

PJ GARCHITORENA Proceed. PROS. VIERNES Q This receipt was prepared on January 31, although it is dated January 30? A Q 3? A Yes, sir, because I was there on January 31st. In what particular place did Mrs. Gimenez sign this Exhibit In her office at Aguado, sir.

Continue. PROS VIERNES

*Q So you know that the total amount to be delivered was P55 million? A Yes, your Honor.

Q Was there another person inside the office of Mrs. Gimenez when she gave you this receipt Exhibit 3? A Nobody, sir.

PJ GARCHITORENA Response by Mr. Peralta to the testimony of Mr. Tabuena. ATTY. ESTEBAL We are adopting the testimony of Mr. Tabuena and we will also present the accused, your Honor. *AJ DEL ROSARIO *Q From whom did you receive the Presidents memorandum marked Exhibit 1? Or more precisely, who handed you this memorandum? A Mrs. Fe Roa Gimenez, your Honor.

Q I noticed in this receipt that the last delivery of the sum of P55 million was made on January 30. Do we understand from you that this date January 30 is erroneous? A Yes, sir, that January 30 is erroneous. I noticed it only afterwards. This should be January 31st, sir. PROS VIERNES That will be all, your Honor. PJ GARCHITORENA Redirect? ATTY. ANDRES No redirect, your Honor. *PJ GARCHITORENA Questions from the Court. *AJ HERMOSISIMA *Q Why did you not ask for a receipt on the first and second deliveries? A Because I know that the delivery was not complete yet, your Honor. *PJ GARCHITORENA

*Q Did you ask Mrs. Fe Gimenez for what purpose the money was being asked? A The money was in payment for the debt of the MIA Authority to PNCC, your Honor. *Q If it was for the payment of such obligation why was there no voucher prepared to cover such payment? In other words, why was the delivery of the money not covered by any voucher?
Calrky

A The instruction to me was to give it to the Office of the President, your Honor. *PJ GARCHITORENA *Q Be that as it may, why was there no voucher to cover this particular disbursement?

A I was just told to bring it to the Office of the President, your Honor. *AJ DEL ROSARIO

A He called me up earlier, a week before that, that he wants to me pay what I owe the PNCC directly to his office in cash, your Honor. *PJ GARCHITORENA

*Q Was that normal procedure for you to pay in cash to the Office of the President for obligations of the MIAA in payment of its obligation to another entity? WITNESS

*Q

By I OWE, you mean the MIAA?

WITNESS A A No, your Honor, I was just following the Order to me of the President. *PJ GARCHITORENA *Q A So the Order was out of the ordinary? Yes, your Honor. Yes, your Honor.

*AJ DEL ROSARIO *Q A And what did you say in this discussion you had with him? I just said, Yes, sir, I will do it/

*Q Were you the one who asked for a memorandum to be signed by him? A No, your Honor.

*AJ DEL ROSARIO *Q Did you file any written protest with the manner with which such payment was being ordered? A *Q No, your Honor. Why not? A He told me verbally in the telephone that the Order for the payment of that obligation is forthcoming, your Honor. I will receive it. *Q Is this the first time you received such a memorandum from the President? A Yes, your Honor.

*Q After receiving that verbal instruction for you to pay MIAAs obligation with PNCC, did you not on your own accord already prepare the necessary papers and documents for the payment of that obligation?

A Because with that instruction of the President to me, I followed, your Honor. *Q Before receiving this memorandum Exhibit 1, did the former President Marcos discuss this matter with you? A *Q Yes, your Honor. When was that?

*Q And was that the last time also that you received such a memorandum? A Yes, your Honor.

*Q Did you not inquire, if not from the President, at least from Mrs. Gimenez why this procedure has to be followed instead of the regular procedure? A: No, sir.

Yes, your Honor.

*AJ HERMOSISIMA *Q Why were you not made to pay directly to the PNCC considering that you are the Manager of MIA at that time and the PNCC is a separate corporation, not an adjunct of Malacaang? WITNESS

*AJ DEL ROSARIO *Q A Why did you not ask? I was just ordered to do this thing, your Honor.

*AJ HERMOSISIMA *Q A *Q You said there was an I OWE YOU? Yes, your Honor. Where is that I OWE YOU now?

A I was just basing it from the Order of Malacaang to pay PNCC through the Office of the President, your Honor. *Q Do you know the President or Chairman of the Board of PNCC? A Yes, your Honor.

A All I know is that we owe PNCC the amount of P99.1 million, your Honor. MIAA owes PNCC that amount. *Q A Was this payment covered by receipt from the PNCC? It was not covered, your Honor.

*Q How was the obligation of MIAA to PNCC incurred. Was it through the President or Chairman of the Board? A PNCC was the one that constructed the MIA, your Honor.

*Q Was the obligation incurred through the President or Chairman of the Board or President of the PNCC? In other words, who signed the contract between PNCC and MIAA? A Actually, we inherited this obligation, your Honor. The one who signed for this was the former Director of BAT which is General Singzon. Then when the MIA Authority was formed, all the obligations of BAT were transferred to MIAA. So the accountabilities of BAT were transferred to MIAA and we are the ones that are going to pay, your Honor. *Q Why did you agree to pay to Malacaang when your obligation was with the PNCC? A I was ordered by the President to do that, your Honor.

*Q So the obligation of MIAA to PNCC was not, for the record, cancelled by virtue of that payment? A Based on the order to me by the former President Marcos ordering me to pay that amount to his office and then the mechanics will come after, your Honor. *Q A Is the PNCC a private corporation or government entity? I think it is partly government, your Honor.

*PJ GARCHITORENA *Q That is the former CDCP?

*Q You agreed to the order of the President notwithstanding the fact that this was not the regular course or Malacaang was not the creditor? A I saw nothing wrong with that because that is coming from the President, your Honor. *Q The amount was not a joke, amounting to P55 million, and you agreed to deliver money in this amount through a mere receipt from the private secretary? A I was ordered by the President, your Honor.

Yes, your Honor.

*Q And prior to your joining the MIA, did you ever work for the government? A No, your Honor.

*Q So, is it correct for us to say that your joining the MIA in 1968 as its Manager was your first employment with the government? A Yes, your Honor.

*PJ GARCHITORENA *Q There is no question and it can be a matter of judicial knowledge that you have been with the MIA for sometime? A *Q A *Q Yes, your Honor. Prior to 1986? Yes, your Honor. Can you tell us when you became the Manager of MIA?

*Q While you were Manager of MIA, did you have other subsequent concurrent positions in the government also? A I was also the Chairman of the Games and Amusement Board, your Honor. *Q But you were not the executive or operating officer of the Games and Amusement Board? A I was, your Honor.

*Q As Chairman you were running the Games and Amusement Board? A Yes, your Honor.

A I became Manager of MIA way back, late 1968, your Honor. *Q Long before the MIA was constituted as an independent authority? A Yes, your Honor.

*Q What else, what other government positions did you occupy that time? A I was also Commissioner of the Game Fowl Commission, your Honor. *PJ GARCHITORENA

*PJ GARCHITORENA *Q And by 1986, you have been running the MIA for 18 years? WITNESS *Q That is the cockfighting?

WITNESS

A *Q A *Q A *Q A

Yes, your Honor. Here, you were just a member of the Board? Yes, your Honor. So you were not running the commission? Yes, your Honor. Any other entity? No more, your Honor.

WITNESS A Yes, your Honor.

*Q As a matter of fact, sometimes we consider it inefficient, sometimes we consider it foolish, but we know there is reason in this apparent madness of the COA and so we comply? A Yes, your Honor.

*Q And more than anything else the COA is ever anxious for proper documentation and proper supporting papers? A *Q A Yes, your Honor. Sometimes, regardless of the amount? Yes, your Honor.

*Q As far as you can recall, besides being the Manager of the MIA and later the MIAA for approximately 18 years, you also ran the Games and Amusement Board as its executive officer? A Yes, your Honor.

*Q And you were a commissioner only of the Game Fowl Commission? A *Q A Yes, your Honor. Who was running the commission at that time? I forgot his name, but he retired already, your Honor.

*Q Now, you have P55 million which you were ordered to deliver in cash, not to the creditor of the particular credit, and to be delivered in armored cars to be acknowledged only by a receipt of a personal secretary. After almost 18 years in the government service and having had that much time in dealing with COA people, did it not occur to you to call a COA representative and say, What will I do here? A I did not, your Honor.

*Q All of us who joined the government, sooner or later, meet with our Resident COA representative? A Yes, your Honor.

*PJ GARCHITORENA *Q Did you not think that at least out of prudence, you should have asked the COA for some guidance on this matter so that you will do it properly? WITNESS A What I was going to do is, after those things I was going to tell that delivery ordered by the President to the COA, your Honor.

*PJ GARCHITORENA *Q And one of our unfortunate experience (sic) is when the COA Representative comes to us and says: Chairman or Manager, this cannot be. And we learn later on that COA has reasons for its procedure and we learn to adopt to them?

*Q That is true, but what happened here is that you and Mr. Dabao or you and Mr. Peralta signed requests for issuance of Managers checks and you were accommodated by the PNB Office at Nichols without any internal documentation to justify your request for Managers checks? A Yes, your Honor.

*Q And usually our best defense is that these activities are properly documented? A Yes, your Honor.

*Q Of course we had no intimation at that time that Mr. Marcos will win the elections but even then, the Daily Express, which was considered to be a newspaper friendly to the Marcoses at that time, would occasionally come with so-called expose, is that not so? A Yes, your Honor.

*Q In this particular instance, your witnesses have told us about three (3) different trips from Nichols to Aguado usually late in the day almost in movie style fashion. I mean, the money being loaded in the trunk of your official car and then you had a back-up truck following your car? A *Q A Yes, your Honor. Is that not quite a fearful experience to you? I did not think of that at that time, your Honor.

*Q And worst, you had the so-called mosquito press that would always come out with the real or imagined scandal in the government and place it in the headline, do you recall that? A Yes, your Honor.

*PJ GARCHITORENA *Q You did not think it fearful to be driving along Roxas Boulevard with P25 million in the trunk of your car? WITNESS A We have security at that time your Honor.

*PJ GARCHITORENA *Q Under these circumstances, did you not entertain some apprehension that some disloyal employees might leak you out and banner headline it in some mosquito publications like the Malaya at that time? WITNESS A No, your Honor.

ATTY. ANDRES Your Honor, the P25 million was in the armored car; only P5 million was in the trunk of his car. *PJ GARCHITORENA Thank you for the correction. Even P1 million only. How much more with P5 million inside the trunk of your car, was that not a nervous experience? A As I have said, your Honor, I never thought of that.

*PJ GARCHITORENA I bring this up because we are trying to find out different areas of fear. We are in the government and we in the government fear the COA and we also fear the press. We might get dragged into press releases on the most innocent thing. You believe that? A Yes, your Honor.

PJ GARCHITORENA

Thank you very much, Mr. Tabuena. You are excused. x x x.ci[42] (PERALTA)

WITNESS A Yes, sir, an order was given to me by Mr. Tabuena.

*PJ GARCHITORENA (He testified on direct examination that he co-signed with Tabuena a memorandum request for the issuance of the Managers Check for P5 Million upon order of Tabuena and that he [Peralta] was aware that MIAA had an existing obligation with PNCC in the amount of around P27 Million. He affirmed having accompanied Tabuena at the PNB Villamor Branch to withdraw the P5 Million, but denied having misappropriated for his own benefit said amount or any portion thereof.) CROSS-EXAMINATION BY PROS VIERNES Q Will you please tell the Honorable Court why was it necessary for you to co-sign with Mr. Tabuena the request for issuance of Managers check in the amount of P5 million? A At that time I was the Acting Financial Services Manager of MIAA, sir, and all withdrawals of funds should have my signature because I was one of the signatories at that time. Q As Acting Financial Services Manager of MIAA, you always co-sign with Mr. Tabuena in similar requests for the issuance of Managers checks by the PNB? A That is the only occasion I signed, sir. Was that marked in evidence? WITNESS Yes, your Honor. *PJ GARCHITORENA What exhibit? WITNESS I have here a copy, your Honor. This was the order and it was marked as exhibit N.

PROS VIERNES It was marked as Exhibit M, your Honor. Q How did you know there was an existing liability of MIAA in favor of PNCC at that time? A Because prior to this memorandum of Mr. Tabuena, we prepared the financial statement of MIAA as of December 31, 1985 and it came to my attention that there was an existing liability of around P27,999,000.00, your Honor. Q When was that Financial Statement prepared?

Q Did you say you were ordered by Mr. Tabuena to sign the request? A Yes, sir, and I think the order is part of the exhibits. And based on that order, I co-signed in the request for the issuance of Managers check in favor of Mr. Luis Tabuena. PROS VIERNES Q Was there a separate written order for you to co-sign with Mr. Tabuena?

A I prepared it around January 22 or 24, something like that, of 1986, sir.

Q Is it your usual practice to prepare the Financial Statement after the end of the year within three (3) weeks after the end of the year? A Yes, sir, it was a normal procedure for the MIAA to prepare the Financial Statement on or before the 4th Friday of the month because there will be a Board of Directors Meeting and the Financial Statement of the prior month will be presented and discussed during the meeting. *PJ GARCHITORENA *Q This matter of preparing Financial Statement was not an annual activity but a monthly activity? A Yes, your Honor.

And that will be Exhibit? ATTY. ANDRES Exhibit 2 and 2-A, your Honor. PROS VIERNES Q You also stated that you were with Mr. Tabuena when you withdrew the amount of P5 million from the PNB Extension Office at Villamor? A Yes, sir.

Q Why was it necessary for you to go with him on that occasion? A Mr. Tabuena requested me to do the counting by million, sir. So what I did was to bundle count the P5 million and it was placed in two (2) peerless boxes. Q Did you actually participate in the counting of the money by bundles? A Q Yes, sir. Bundles of how much per bundle?

*Q This Financial Statement you prepared in January of 1986 recapitulated the financial condition as of the end of the year? A Yes, your Honor.

PJ GARCHITORENA Continue. PROS VIERNES Q You made mention of a request for Escalation Clause by former Minister Ongpin. Did you personally see that request? A When this order coming from Mr. Tabuena was shown to me, I was shown a copy, sir. I have no file because I just read it. Q It was Mr. Tabuena who showed you the letter of Minister Ongpin? A Yes, sir.

A If I remember right, the bundles consisted of P100s and P50s, sir. Q A No P20s and P10s? Yes, sir, I think it was only P100s and P50s.

*PJ GARCHITORENA *Q A If there were other denominations, you can not recall? Yes, your Honor.

*PJ GARCHITORENA

PROS VIERNES Q A Q In how many boxes were those bills placed?

Q So, even if it was already after 5:00 oclock in the afternoon, you still went back to your office at MIA? A Yes, sir.

The P5 million were placed in two (2) peerless boxes, sir. PROS VIERNES And you also went with Mr. Tabuena to Aguado? That will be all, your Honor. PJ GARCHITORENA Redirect?

A No, sir, I was left behind at Nichols. After it was placed at the trunk of the car of Mr. Tabuena, I was left behind and I went back to my office at MIA. Q But the fact is that, this P5 million was withdrawn at passed 5:00 oclock in the afternoon? A I started counting it I think at around 4:30, sir. It was after office hours. But then I was there at around 4:00 oclock and we started counting at around 4:30 p.m. because they have to place it in a room, which is the office of the Manager at that time. Q And Mr. Tabuena left for Malacaang after 5:00 oclock in the afternoon of that date? A Yes, sir. After we have counted the money, it was placed in the peerless boxes and Mr. Tabuena left for Malacaang. PROS VIERNES Q And you yourself, returned to your office at MIA?

ATTY. ESTEBAL No redirect, your Honor. *PJ GARCHITORENA Questions from the Court. *AJ DEL ROSARIO *Q Did you not consider it as odd that your obligation with the PNCC had to be paid in cash? WITNESS A Based on the order of President Marcos that we should pay in cash, it was not based on the normal procedure, your Honor. *Q And, as Acting Financial Services Manager, you were aware that all disbursements should be covered by vouchers? A Yes, your Honor, the payments should be covered by vouchers. But then, inasmuch as what we did was to prepare a request to the PNB, then this can be covered by Journal Voucher also.

WITNESS A Q Yes, sir. Until what time do you hold office at the MIA?

A Usually I over-stayed for one (1) or two (2) hours just to finish the paper works in the office, sir.

*Q Was such payment of P5 million covered by a Journal Voucher? A *Q A Yes, your Honor. Did you present that Journal Voucher here in Court? We have a copy, your Honor.

should be made through the Office of the president, I accepted the receipt given by Mrs. Fe Gimenez to Mr. Tabuena. *Q After receiving that receipt, did you prepare the necessary supporting documents, vouchers, and use that receipt as a supporting document to the voucher? A *Q Your Honor, a Journal Voucher was prepared for that. How about a disbursement voucher?

*Q Do you have a copy or an excerpt of that Journal Voucher presented in Court to show that payment? A We have a copy of the Journal Voucher, your Honor.

A Inasmuch as this was a request for Managers check, no disbursement voucher was prepared, your Honor. *AJ DEL ROSARIO *Q Since the payment was made on January 31, 1986, and that was very close to the election held in that year, did you not entertain any doubt that the amounts were being used for some other purpose? ATTY. ESTEBAL With due respect to the Honorable Justice, we are objecting to the question on the ground that it is improper. *AJ DEL ROSARIO I will withdraw the question. *PJ GARCHITORENA What is the ground for impropriety? ATTY. ESTEBAL This is not covered in the direct examination, and secondly, I dont think there was any basis, your Honor. *PJ GARCHITORENA

*Q Was this payment of P5 million ever recorded in a cashbook or other accounting books of MIAA? A The payment of P5 million was recorded in a Journal Voucher, your Honor. *PJ GARCHITORENA *Q In other words, the recording was made directly to the Journal? WITNESS A Yes, your Honor.

*Q There are no other separate documents as part of the application for Managers Check? A Yes, your Honor, there was none.

*AJ DEL ROSARIO *Q After the payment was made, did your office receive any receipt from PNCC? A I was shown a receipt by Mr. Tabuena, the receipt given by Mrs. Fe Roa Gimenez, your Honor. Inasmuch as the payment

Considering the withdrawal of the question, just make the objection on record. *AJ HERMOSISIMA *Q As a Certified Public Accountant and Financial Manager of the MIAA, did you not consider it proper that a check be issued only after it is covered by a disbursement voucher duly approved by the proper authorities? A Your Honor, what we did was to send a request for a Managers check to the PNB based on the request of Mr. Tabuena and the order of Mr. Tabuena was based on the Order of President Marcos. *PJ GARCHITORENA *Q In your capacity as Financial Services Manager of the MIAA, did you not think it proper to have this transaction covered by a disbursement voucher? WITNESS A Based on my experience, payments out of cash can be made through cash vouchers, or even though Journal Vouchers, or even through credit memo, your Honor. *AJ HERMOSISIMA *Q This was an obligation of the MIAA to the PNCC. Why did you allow a disbursement by means of check in favor of Mr. Luis Tabuena, your own manager? A We based the payment on the order of Mr. Tabuena because that was the order of President Marcos to pay PNCC through the Office of the President and it should be paid in cash, your Honor. *Q You are supposed to pay only on legal orders. Did you consider that legal? ATTY. ESTEBAL

With due respect to the Honorable Justice, the question calls for a conclusion of the witness. *PJ GARCHITORENA Considering that the witness is an expert, witness may answer. WITNESS A The order of president Marcos was legal at that time because the order was to pay PNCC the amount of P5 million through the Office of the President and it should be paid in cash, your Honor. And at that time, I know for a fact also that there was an existing P.D. wherein the President of the Republic of the Philippines can transfer funds from one office to another and the PNCC is a quasi government entity at that time. *AJ HERMOSISIMA *Q Are you saying that this transaction was made on the basis of that P.D. which you referred to? A I am not aware of the motive of the President, but then since he is the President of the Philippines, his order was to pay the PNCC through the Office of the President, your Honor. *Q As Financial Manager, why did you allow a payment in cash when ordinarily payment of an obligation of MIAA is supposed to be paid in check? A I caused the payment through the name of Mr. Tabuena because that was the order of Mr. Tabuena and also he received an order coming from the President of the Philippines at that time, your Honor. *PJ GARCHITORENA *Q Mr. Peralta, are not Journal Vouchers merely entries in the Journals to correct certain statements of accounts earlier made in the same journal?

In other words, really what you are telling us is that, a Journal Voucher is to explain a transaction was otherwise not recorded. WITNESS

The question is misleading on the ground that what the witness stated earlier is that the Journal Voucher in this particular case was supported, your Honor. *PJ GARCHITORENA

Yes, your Honor. Overruled, may answer. WITNESS A The transaction was fully documented since we have the order of the General Manager at that time and the order of President Marcos, your Honor. *Q Are you saying the Order of the General Manager is an adequate basis for the movement of money? A Yes, your Honor, because at that time we have also a recorded liability of P27 million. *Q We are not talking of whether or not there was a liability. What we are saying is, is the order of the General Manager by itself adequate with no other supporting papers, to justify the movement of funds? A Yes, your Honor. The order of Mr. Luis Tabuena was based on our existing liability of P27,931,000.00, inasmuch as we have that liability and I was shown the order of President Marcos to pay P5 million through the Office of the President, I considered the order of Mr. Luis Tabuena, the order of President Marcos and also the existing liability of P27 million sufficient to pay the amount of P5 million. Inasmuch as there is also an escalation clause of P99.1 million, the payment of P5 million is fully covered by those existing documents. *PJ GARCHITORENA You keep flooding us with details we are not asking for. We are not asking you whether or not there was valid obligation. We are not asking you about the escalation clause. We are asking you whether or not this particular order of Mr. Tabuena is an adequate basis to justify the movement of funds?

*Q Therefore, when you said that a Journal Voucher here is proper, you are saying it is proper only because of the exceptional nature of the transactions? A Yes, your Honor.

*Q In other words, as an Accountant, you would not normally authorize such a movement of money unless it is properly documented? ATTY. ESTEBAL With due respect to the Honorable Presiding Justice, I think the question is misleading because what the witness stated is... *PJ GARCHITORENA Be careful in your objection because the witness understands the language you are speaking, and therefore, you might be coaching him. ATTY. ESTEBAL No, your Honor. I am also an accountant that is why I could say that... *PJ GARCHITORENA Please be simple in your objection. ATTY. ESTEBAL

WITNESS When we pay, your Honor, we always look for the necessary documents and at that time I know for a fact that there was this existing liability. *PJ GARCHITORENA When we ask questions and when we answer them, we must listen to the question being asked and not to whatever you wanted to say. I know you are trying to protect yourself. We are aware of your statement that there are all of these memoranda. *Q By your disbursement of such amount, you are saying that the order of Mr. Tabuena by itself is adequate? WITNESS A As far as I am concerned, your Honor, inasmuch as we have a liability and I was shown the Order of President Marcos to pay PNCC through his office, I feel that the order of the General Manager, the order of President Marcos, and also the memorandum of Minister Ongpin are sufficient to cause the payment of P5 million. *PJ GARCHITORENA *Q This Presidential Decree which authorizes the President to transfer funds from one department to another, is this not the one that refers to the realignment of funds insofar as the Appropriation Act is concerned? WITNESS A Because at that time, your Honor, I have knowledge that the President is authorized through a Presidential Decree to transfer government funds from one office to another. *PJ GARCHITORENA

*Q Under the Appropriation Act. Are payments of debts of the MIAA covered by the Appropriation Act? A I think the liability was duly recorded and appropriations to pay the amount is..... (interrupted) *PJ GARCHITORENA *Q Tell me honestly, is your answer responsive to the question or are you just throwing words at us in the hope that we will forget what the question is? A No, your Honor.

*Q Are you telling us that the debts incurred by MIAA are covered by the Appropriations Act so that the payment of this debt would be in the same level as the realignment of funds authorized the President? Or are you telling as you did not read the Decree? A I was aware of that Decree, your Honor.

*PJ GARCHITORENA Mr. Estebal, will you include in your memorandum what are the Decrees authorizing this movement of funds? ATTY. ESTEBAL Yes, your Honor. *PJ GARCHITORENA *Q It is true that President Marcos was the President, but he was not an officer of the MIAA, was he? A No, your Honor.

*Q In fact, for purposes of internal control, you have different officers and different officials in any company either government or private, which are supposed to check and balance each other, is it not? A Yes, your Honor.

Yes, your Honor.

*Q Therefore, as co-signatory, you are expected to exercise your judgment as to the propriety of a particular transaction? A Yes, your Honor.

*Q So that when disbursements of funds are made, they are made by authority of not only one person alone so that nobody will restrain him? A Yes, your Honor.

*Q And this is something you know by the nature of your position and because you are a Certified Public Accountant? A Yes, your Honor.

*Q These checks and balances exist in an entity so that no one person can dispose of funds in any way he likes? A Yes, your Honor.

*AJ DEL ROSARIO *Q You admit that the payment of P5 million and P50 million were unusual in the manner with which they were disposed? A Yes, your Honor.

*Q And in fact, the purpose for having two (2) signatories to documents and negotiable documents is for the same purpose? A Yes, your Honor.

*Q Did you submit a written protest to the manner in which such amount was being disposed of? A A written protest was not made, your Honor, but I called the attention of Mr. Tabuena that since this payment was upon the order of President Marcos, then I think as President he can do things which are not ordinary. *Q If you did not prepare a written protest, did you at least prepare a memorandum for the record that this was an extraordinary transaction? A I called the attention of Mr. Tabuena that this was an extra-ordinary transaction and no written note, your Honor. PJ GARCHITORENA

*PJ GARCHITORENA *Q In other words, the co-signatories counter check each other? WITNESS A Yes, your Honor.

*Q In your case, you would be the counter check for Mr. Tabuena? A Yes, your Honor.

Thank you very much Mr. Peralta, you are excused. x x x.cii[43] This Court has acknowledged the right of a trial judge to question witnesses with a view to satisfying his mind upon any material point which presents itself during the trial of a case over which he presides.ciii[44] But not only should his

*Q In other words, even if Mr. Tabuena is the Manager, you as Financial Services Manager and as counter signatory are in a position to tell Mr. Tabuena, I am sorry, you are my superior but this disbursement is not proper and, therefore, I will not sign it., if in your opinion the disbursement is not proper?

examination be limited to asking clarificatory questions,civ[45] the right should be sparingly and judiciously used; for the rule is that the court should stay out of it as much as possible, neither interfering nor intervening in the conduct of the trial.cv[46] Here, these limitations were not observed. Hardly in fact can one avoid the impression that the Sandiganbayan had allied itself with, or to be more precise, had taken the cudgels for the prosecution in proving the case against Tabuena and Peralta when the Justices cross-examined the witnesses, their crossexaminations supplementing those made by Prosecutor Viernes and far exceeding the latters questions in length. The cold neutrality of an impartial judge requirement of due process was certainly denied Tabuena and Peralta when the court, with its overzealousness, assumed the dual role of magistrate and advocate. In this connection, the observation made in the Dissenting Opinion to the effect that the majority of this Court was unduly disturbed with the number of court questions alone, is quite inaccurate. A substantial portion of the TSN was incorporated in the majority opinion not to focus on numbers alone, but more importantly to show that the court questions were in the interest of the prosecution and which thus depart from that common standard of fairness and impartiality. In fact, it is very difficult to be, upon review of the records, confronted with numbers without necessarily realizing the partiality of the Court. In US v. De Sisto (2 Cir., 1961, 289 F 2d 833), for example, a new trial was required because the trial judge, as in this case, indulged in extensive questioning of defendant and his witnesses, and the reviewing court also had to amplify on numbers to bolster this. It was pointed out in the De Sisto case that the judge asked 3,115 questions of all witnesses, the prosecutor asked but 1,381, defense counsel 3,330. The judges questions to the defendant De Sisto totalled 306, the prosecutors 347, and the defense counsels, 201. After referring to these figures, the court stated: . . . It is indeed an impressive proportion, but no such mathematical computation is of itself determinative. However, taking all this in conjunction with the long and vigorous examination of the defendant himself by the judge, and the repeated belittling by the judge of defendants efforts to establish the time that Fine left the pier, we fear that in its zeal for arriving at the facts the court here conveyed to the jury too strong an impression of the courts belief in the defendants

probable guilt to permit the jury freely to perform its own function of independent determination of the facts. x x x The majority believes that the interference by the Sandiganbayan Justices was just too excessive that it cannot be justified under the norm applied to a jury trial, or even under the standard employed in a non-jury trial where the judge is admittedly given more leeway in propounding questions to clarify points and to elicit additional relevant evidence. At the risk of being repetitious, we will amplify on this via some specific examples. Based on the evidence on record, and on the admission of Tabuena himself, the P55 million was delivered to the Presidents Office thru Mrs. Gimenez, in obedience to the Presidential directive. One Sandiganbayan Justice, however, hurled the following questions to Peralta: AJ DEL ROSARIO Q: Since the payment was made on January 31, 1986, and that was very close to the election held in that year, did you not entertain any doubt that the amounts were being used for some other purposes? ATTY. ESTEBAL With due respect to the Honorable Justice, We are objecting to the question on the ground that it is improper. AJ DEL ROSARIO I will withdraw the question. PJ GARCHITORENA What is the ground for impropriety? ATTY. ESTEBAL

This is not covered in the direct examination, and secondly, I dont think there was any basis, Your Honor. PJ GARCHITORENA Considering the withdrawal of the question, just make the objection on record. Nothing from the preceding questions of counsels or of the court would serve as basis for this question. How then, can this be considered even relevant? What is the connection between the payment made to the Presidents office and the then forthcoming presidential snap election? In another instance, consider the following questions of Presiding Justice Garchitorena: *PJ GARCHITORENA *Q Mr. Peralta, are not Journal Vouchers merely entries in the Journals to correct certain statements of accounts earlier made in the same journal? xxx *Q In other words, really what you are telling us is that, a Journal Voucher is to explain a transaction was otherwise not recorded. xxx *Q Therefore, when you said that a Journal Voucher here is proper, you are saying it is proper only because of the exceptional nature of the transactions? xxx *Q In other words, as an Accountant, you would not normally authorize such a movement of money unless it is properly documented? ATTY. ESTEBAL

With due respect to the Honorable Presiding Justice, I think the question is misleading because what the witness stated is... *PJ GARCHITORENA Be careful in your objection because the witness understands the language you are speaking, and therefore, you might be coaching him. ATTY. ESTEBAL No, your Honor. I am also an accountant that is why I could say that... *PJ GARCHITORENA Please be simple in your objection. ATTY. ESTEBAL The question is misleading on the ground that what the witness stated earlier is that the Journal Voucher in this particular case was supported, your Honor. *PJ GARCHITORENA Overruled, may answer. WITNESS A The transaction was fully documented since we have the order of the General Manager at that time and the order of President Marcos, your Honor. *Q Are you saying the Order of the General Manager is an adequate basis for the movement of money? *Q We are not talking of whether or not there was a liability. What we are saying is, is the order of the General Manager by itself adequate with no other supporting papers, to justify the movement of funds?

*PJ GARCHITORENA You keep flooding us with details we are not asking for. We are not asking you whether or not there was valid obligation. We are not asking you about the escalation clause. We are asking you whether or not this particular order of Mr. Tabuena is an adequate basis to justify the movement of funds? *PJ GARCHITORENA When we ask questions and when we answer them, we must listen to the question being asked and not to whatever you wanted to say. I know you are trying to protect yourself. We are aware of your statement that there are all of these memoranda. *Q By your disbursement of such amount, you are saying that the order of Mr. Tabuena by itself is adequate? *PJ GARCHITORENA *Q This Presidential Decree which authorizes the President to transfer funds from one department to another, is this not the one that refers to the realignment of funds insofar as the Appropriation Act is concerned? *PJ GARCHITORENA *Q Under the Appropriation Act. Are payments of debts of the MIAA covered by the Appropriation Act? *PJ GARCHITORENA *Q Tell me honestly, is your answer responsive to the question or are you just throwing words at us in the hope that we will forget what the question is? xxx *Q Are you telling us that the debts incurred by MIAA are covered by the Appropriations Act so that the payment of this debt would be in the same level as the realignment of funds

authorized the President? Or are you telling as you did not read the Decree? *PJ GARCHITORENA Mr. Estebal, will you include in your memorandum what are the Decrees authorizing this movement of funds? ATTY. ESTEBAL Yes, your Honor. *PJ GARCHITORENA *Q It is true that President Marcos was the President, but he was not an officer of the MIAA, was he? *Q In fact, for purposes of internal control, you have different officers and different officials in any company either government or private, which are supposed to check and balance each other, is it not? *Q So that when disbursements of funds are made, they are made by authority of not only one person alone so that nobody will restrain him? *Q These checks and balances exist in an entity so that no one person can dispose of funds in any way he likes? *Q And in fact, the purpose for having two (2) signatories to documents and negotiable documents is for the same purpose? *PJ GARCHITORENA *Q In other words, the co-signatories counter check each other? *Q In your case, you would be the counter check for Mr. Tabuena? *Q In other words, even if Mr. Tabuena is the Manager, you as Financial Services Manager and as counter signatory are in a

position to tell Mr. Tabuena, I am sorry, you are my superior but this disbursement is not proper and, therefore, I will not sign it., if in your opinion the disbursement is not proper? *Q Therefore, as co-signatory, you are expected to exercise your judgment as to the propriety of a particular transaction? *Q And this is something you know by the nature of your position and because you are a Certified Public Accountant?cvi[47] How can these questions be considered clarificatory when they clearly border more on cross-examination questions? Thus, the Dissenting Opinions focus on the distinction between the two kinds of trial to justify the Sandiganbayans active participation in the examination of petitioners Tabuena and Peralta and witness Monera, with due respect, appears insignificant to this case. Let it, therefore, be emphasized anew that: A trial judge should not participate in the examination of witnesses as to create the impression that he is allied with the prosecution.cvii[48] We doubt not that the sole motive of the learned judge was to ascertain the truth of the transaction, but it is never proper for a judge to discharge the duties of a prosecuting attorney. However anxious a judge may be for the enforcement of the law, he should always remember that he is as much judge in behalf of the defendant accused of crime, and whose liberty is in jeopardy, as he is judge in behalf of the state, for the purpose of safeguarding the interests of society.cviii[49] Ordinarily it is not good practice for the presiding judge himself to examine witnesses at length. The circumstances may be such in a given case as to justify the court in so doing....This court, however, has more than once said that the examination of witnesses is the more appropriate function of counsel, and the instances are rare and the conditions exceptional which will justify the presiding judge in conducting an extensive examination. It is always embarrassing for counsel to object to what he may deem improper questions by the court. Then, in conducting a lengthy examination, it would be almost impossible

for the judge to preserve a judicial attitude. While he is not a mere figurehead or umpire in a trial, and it is his duty to see that justice is done, he will usually not find it necessary to conduct such examinations. The extent to which this shall be done must largely be a matter of discretion, to be determined by the circumstances of each particular case, but in so doing he must not forget the function of the judge and assume that of an advocate....cix[50] While it is true that the manner in which a witness shall be examined is largely in the discretion of the trial judge, it must be understood that we have not adopted in this country the practice of making the presiding judge the chief inquisitor. It is better to observe our time-honored custom of orderly judicial procedure, even at the expense of occasional delays....The judge is an important figure in the trial of a cause, and while he has the right, and it is often his duty, to question witnesses to the end that justice shall prevail, we can conceive of no other reason, for him to take the trial of the cause out of the hands of counsel.cx[51] The examination of witnesses is the more appropriate function of counsel, and it is believed the instances are rare and the conditions exceptional in a high degree which will justify the presiding judge in entering upon and conducting an extended examination of a witness, and that the exercise of a sound discretion will seldom deem such action necessary or advisable.cxi[52] He [the judge] may properly intervene in a trial of a case to promote expedition, and prevent unnecessary waste of time, or to clear up some obscurity, but he should bear in mind that his undue interference, impatience, or participation in the examination of witnesses, or a severe attitude on his part toward witnesses, especially those who are excited or terrified by the unusual circumstances of a trial, may tend to prevent the proper presentation of the cause, or the ascertainment of the truth in respect thereto.cxii[53] The impartiality of the judge his avoidance of the appearance of becoming the advocate of either one side or the

other of the pending controversy is a fundamental and essential rule of special importance in criminal cases....cxiii[54] Our courts, while never unmindful of their primary duty to administer justice, without fear or favor, and to dispose of these cases speedily and in as inexpensive a manner as is possible for the court and the parties, should refrain from showing any semblance of one-sided or more or less partial attitude in order not to create any false impression in the minds of the litigants. For obvious reasons, it is the bounden duty of all to strive for the preservation of the peoples faith in our courts.cxiv[55] Time and again this Court has declared that due process requires no less than the cold neutrality of an impartial judge. Bolstering this requirement, we have added that the judge must not only be impartial but must also appear to be impartial, to give added assurance to the parties that his decision will be just. The parties are entitled to no less than this, as a minimum guaranty of due process.cxv[56] We are well aware of the fear entertained by some that this decision may set a dangerous precedent in that those guilty of enriching themselves at the expense of the public would be able to escape criminal liability by the mere expedient of invoking good faith. It must never be forgotten, however, that we render justice on a case to case basis, always in consideration of the evidence that is presented. Thus, where the evidence warrants an acquittal, as in this case, we are mandated not only by the dictates of law but likewise of conscience to grant the same. On the other hand, it does not follow that all those similarly accused will necessarily be acquitted upon reliance on this case as a precedent. For the decision in this case to be a precedent, the peculiar circumstances and the evidence that led to the petitioners acquittal must also be present in subsequent cases. Furthermore, as between a mere apprehension of a dangerous precedent and an actual violation of constitutionally enshrined rights, it is definitely the latter that merits our immediate attention. For the most dangerous precedent arises when we allow ourselves to be carried away by such fears so that it becomes lawful to sacrifice the rights of an accused to calm the

fearful. In our eagerness to bring to justice the malefactors of the Marcos regime, we must not succumb to the temptation to commit the greatest injustice of visiting the sins of the wrongdoers upon an innocent. WHEREFORE, in view of the foregoing, herein petitioners Luis A. Tabuena and Adolfo M. Peralta are hereby ACQUITTED of the crime of malversation as defined and penalized under Article 217 of the Revised Penal Code. The Sandiganbayan Decision of October 12, 1990 and the Resolution dated December 20, 1991 are REVERSED and SET ASIDE. SO ORDERED.

ILLEGAL USE OF PUBLIC FUNDS (Art. 220)

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