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Digest:

FACTS: ENRIQUEZ was Municipal Treasurer, while ESPINOSA was Administrative


Officer and acting Municipal Cashier of the Office of the Municipal Treasurer of Pasig
(Pasig Treasury). They were accused of malversation of public funds amounting to P3,
178,777.41, which shortage was mainly due to a dishonored China Banking Check No.
303100 dated October 7, 1987 in the amount of P3,267,911.10." Said check was
deposited with the Quezon City District Treasury Office as part of the collections of the
Pasig Treasury. The check was dishonored.
On December 3, 1987, a letter of demand was sent to ENRIQUEZ by the Commission
on Audit (COA) to restitute the value of the dishonored check. ENRIQUEZ denied
responsibility for the shortage and pointed to ESPINOSA as the one to whom the letter
of demand should be addressed as the custodian of said check.
The check of P3,267,911.10 was payable to the Municipal Treasurer of Pasig and was
drawn by one "D. Noble". It bears ENRIQUEZs indorsement at the back and was
accompanied by a statement of checks also bearing the initials of ENRIQUEZ. Several
days after, the Quezon City Treasury informed the Pasig Treasury of the dishonor of
CBC Check No. 303100.
After investigation, the NBI, the drawer of subject check was a certain "D. Noble", with
the account (CBC No. 0026813-6) registered in the name of one Leonora Reyes of
EDSA Home Improvement Center, Inc. They found out that initials of ENRIQUEZ were
not written by one and the same person.
It appears that less than a month before the dishonor of the subject check or on
September 23, 1987, ESPINOSA herself had gone to the Quezon City Treasury to make
a deposit of checks and statement of checks. Felisa Cervantes accepted the checks
and the corresponding statements and issued Official Receipt No. 279339 in the
amount of P3,583,084.18. ESPINOSA later returned to Felisa Cervantes and requested
her to cross-out the first figure "3" on the official receipt to conform with the actual
amount of P583,084.18 deposited therein.
When arraigned, on April 23, 1990, ENRIQUEZ and ESPINOSA pleaded not guilty to
the charge. After trial, the Sandiganbayan rendered its judgement that they were guilty
hence the appeal.
ISSUE: Whether or not ENRIQUEZ and ESPINOSA had incurred a shortage in their
accounts as Municipal Treasurer and Administrative Officer/designated as Acting
Cashier.

HELD: No. Enriquez and Espinosa are acquitted by the Supreme Court. The crime of
malversation for which ENRIQUEZ and ESPINOSA had been charged is defined under
Article 217 of the Revised Penal Code.
The elements of malversation under the above penal provision are:
(a) That the offender is a public officer.
(b) That he has the custody or control of funds or property by reason of
the duties of his office.
(c) That those funds or property are public funds or property for which he
is accountable.
(d) That he appropriated, took, misappropriated or consented or, through
abandonment or negligence, permitted another person to take them. [7]
Verily, the first two elements are present in this case. The findings of the Sandiganbayan
that ENRIQUEZ and ESPINOSA are public officers who have the custody or control of
funds or property by reason of the duties of their office are duly supported by the
evidence. It is the last two elements, i.e., whether or not the amount represented in the
dishonored check constituted public funds and whether ENRIQUEZ and/or ESPINOSA
really misappropriated said public funds, where the instant petitions focus
themselves. The Supreme Court is not convinced due to the following reasons: Nexold
First. There is no evidence to prove that the Pasig Treasury incurred a cash shortage in
the amount of P3,178,777.41. As per report of the audit team, the alleged shortage was
computed and based on the value of the dishonored check. Evidence of shortage is
necessary before there could be any taking, appropriation, conversion, or loss of public
funds that would amount to malversation. It makes no sense for any bogus check to be
produced to "cover up" an inexistent malversation.
Second. There is no evidence that ENRIQUEZ or ESPINOSA had received such an
amount which they could no longer produce or account for at the time of the audit.
Third. There is no showing that the subject check was received by the Pasig Treasury in
an official capacity; that there was a duty to receive or collect the said amount; and that
there was an obligation to account for the same.
Fourth. The Sandiganbayan clearly erred in inferring from the incident that transpired on
September 23, 1987, wherein ESPINOSA deposited checks with the Quezon City
Treasury. ESPINOSA has explained that she requested that the correction be made

because she discovered 15 minutes after she was issued the official receipt that the
checks and the accompanying statements of checkshad not been endorsed and signed
by ENRIQUEZ. Moreover, the general rule is that the law will not consider evidence that
a person has done a certain act at a particular time as probative of a contention that he
has done a similar act at another time. This is the rule of res inter alios acta[ found in
Section 34, Rule 130 of the Rules of Court, as amended. Said incident could not even
sufficiently establish a plan or scheme between ENRIQUEZ and ESPINOSA to cover-up
a shortage that has never been proven.
In view of the foregoing, the presumption is that ENRIQUEZ and ESPINOSA are
innocent, and the presumption continues up to the moment their guilt is proved beyond
reasonable doubt. To justify their conviction of the offense charged, the evidence must
establish their guilt to a moral certainty. In the instant case, the proofs on record fall
short of that required criterion. Consequently, the degree of moral certainty required to
justify conviction for this particular offense is sorely wanting and petitioners acquittal
thereof must be adjudged.

DIGEST:
FACTS: 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, Agullo, being then the disbursing officer of then
Ministry of Public Works and Highways, Regional Office No. VIII, Candahug, Palo, Leyte
is charged with malversation of public funds amounting to P26,404.26.
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,[6] to produce immediately the missing funds.
In a letter[7] dated 25 August 1986, 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.
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).
ISSUE: Whether or not the accused utilized the public funds for personal use based on
prima facie evidence.
HELD: No. 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.
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. [28]
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.
WHEREFORE, premises considered, the instant petition is granted. The decision of the
Sandiganbayan is reversed and set aside.

THIRD DIVISION
[G.R. No. 119239. May 9, 2000]
FRANCISCO ENRIQUEZ y CRUZ, petitioner, vs. PEOPLE OF THE PHILIPPINES,
and SANDIGANBAYAN, respondents.
[G.R. No. 119285. May 9, 2000]
CARMENCITA G. ESPINOSA, petitioner, vs. The HONORABLE SANDIGANBAYAN,
and PEOPLE OF THE PHILIPPINES, respondents.
DECISION
GONZAGA_REYES, J.:
The instant petitions for review on certiorari seek the reversal of the Sandiganbayans
decision of February 28, 1995, in Criminal Case No. 14385, convicting herein petitioners
Francisco C. Enriquez (ENRIQUEZ) and Carmencita G. Espinosa (ESPINOSA) of the

crime of malversation of public funds, defined in Article 217(4) of the Revised Penal
Code.
The essential antecedents as can be gathered from the documentary and testimonial
evidence are the following: Sclex
ENRIQUEZ was Municipal Treasurer, while ESPINOSA was Administrative Officer and
acting Municipal Cashier of the Office of the Municipal Treasurer of Pasig (Pasig
Treasury). By virtue of Local Government Audit Order No. 88-01-3, an audit team
headed by Carmencita Antasuda as team leader conducted an audit examination of the
cash and accounts of the Pasig Treasury covering the period from May 4, 1987 to
November 30, 1987. The audit disclosed, among other things, "accused Enriquezs
accounts contained a shortage amounting toP3,178,777.41, which shortage was mainly
due to a dishonored China Banking Check No. 303100 dated October 7, 1987 in the
amount of P3,267,911.10." Said check was deposited with the Quezon City District
Treasury Office (Quezon City Treasury) as part of the collections of the Pasig Treasury.
The check was dishonored for the following reasons: (a) it was not received in payment
of any tax; (b) it was not acknowledged by an official receipt; (c) the account against
which it was drawn was under garnishment; (d) the signatory therein was not authorized
to sign; and (e) it was drawn against insufficient funds. Xlaw
On December 3, 1987, a letter of demand was sent to ENRIQUEZ by the Commission
on Audit (COA) to restitute the value of the dishonored check. In a reply dated
December 5, 1987, ENRIQUEZ denied responsibility for the shortage and pointed to
ESPINOSA as the one to whom the letter of demand should be addressed as the
custodian of said check
China Banking Check No. 303100 dated October 7, 1987 in the amount
of P3,267,911.10 was payable to the Municipal Treasurer of Pasig and was drawn by
one "D. Noble". The check bears ENRIQUEZs indorsement at the back and was
accompanied by a statement of checks also bearing the initials of ENRIQUEZ. The
subject check was transmitted from the Pasig Treasury to the Quezon City Treasury as
the official district treasury for municipal deposits. According to Benito Buenviaje, a
casual janitor of the Pasig Treasury, on October 15, 1987, ENRIQUEZ instructed him to
get the bundled checks from his table and to deliver them to the Quezon City Treasury.
He could not recall how many checks were taken from the table of the municipal
treasurer because they were already bundled. Benito Buenviaje was issued two official
receipts, one of which, O. R. No. 279451, was in the amount of P3,308,774.44, and
included the amount of the dishonored check.

Several days after, the Quezon City Treasury informed the Pasig Treasury of the
dishonor of CBC Check No. 303100. The check was deposited by the Quezon City
Treasury under Account No. 6 with the PNB, Cubao Branch, for credit to the Pasig
Treasury but it was dishonored and returned on October 21, 1987 for the reasons
above-mentioned.
The then Mayor Mario Raymundo of Pasig sent a letter-request to the NBI to conduct an
investigation of the alleged shortage and Atty. Federico Opinion, Jr., Chief of the Special
Action Unit of the NBI was designated, together with two (2) other agents to conduct the
investigation. As found by the NBI, the drawer of subject check was a certain "D.
Noble", with the account (CBC No. 0026813-6) registered in the name of one Leonora
Reyes of EDSA Home Improvement Center, Inc. In the course of the investigation, Atty.
Opinion furnished Eliodoro Constantino, Senior Document Examiner of the NBI, the
initials of accused Enriquez appearing in the subject check and the statement of checks,
together with standards of comparison consisting of several documents. A comparative
examination by the NBI Questioned Document Expert of the specimens submitted
revealed that the questioned and standard sample specimen initials of ENRIQUEZ were
not written by one and the same person. Xsc
It appears that less than a month before the dishonor of the subject check or on
September 23, 1987, ESPINOSA herself had gone to the Quezon City Treasury to make
a deposit of checks and statement of checks. Felisa Cervantes, Computer Operator of
the Quezon City Treasury, accepted the checks and the corresponding statements and
issued Official Receipt No. 279339 in the amount of P3,583,084.18. ESPINOSA later
returned to Felisa Cervantes and requested her to cross-out the first figure "3" on the
official receipt to conform with the actual amount of P583,084.18 deposited therein.
In an Information dated February 5, 1990, ENRIQUEZ together with ESPINOSA were
charged with Malversation of Public Funds committed as follows: Sc
"That during the period from May 4, 1987 to November 30, 1987, or on
dates subsequent thereto, in the Municipality of Pasig, Metro Manila,
Philippines, and within the jurisdiction of this Honorable Court, the said
accused Francisco C. Enriquez being then the Municipal Treasurer of
Pasig, Metro Manila, Carmencita Espinosa then the Administrative Officer
I and designated as Cashier in the Office of the Municipal Treasurer of
Pasig, Metro Manila and Belinda Santos[1], a Clerk in the Realty Tax
Section and designated as Asst. Cashier in the Treasurers Office of
Pasig, Metro Manila, duly appointed/designated and qualified as such,
hence, all accountable officers by reason of the duties of their respective
offices, accountable for the funds and properties received by them in their

official positions as such, conspiring and confederating with each other


and taking advantage of their official positions with wanton disregard of
auditing laws, rules and regulations, did then and there willfully, unlawfully
and feloniously and with grave abuse of confidence, misappropriate,
misapply and convert to their own personal use and benefit the amount of
THREE MILLION ONE HUNDRED SEVENTY EIGHT THOUSAND
SEVEN HUNDRED SEVENTY-SEVEN AND 41/100 (P3,178,777.41),
Philippine currency, from the said public funds received by them in their
respective official positions aforementioned in the Office of the Municipal
Treasurer of Pasig, Metro Manila , to the damage and prejudice of the
government.
CONTRARY TO LAW."[2]
When arraigned, on April 23, 1990, ENRIQUEZ and ESPINOSA pleaded not guilty to
the charge. After trial, the Sandiganbayan rendered its judgment, promulgated on
February 28, 1995, convicting ENRIQUEZ and ESPINOSA, thusly: Scmis
"WHEREFORE, judgment is hereby rendered finding both accused
Francisco Enriquez y Cruz and Carmencita Espinosa y Gonzales GUILTY
beyond reasonable doubt as co-principals in the offense of Malversation of
Public Funds, as defined and penalized under Article 217, paragraph 4 of
the Revised Penal Code and crediting each of them with the mitigating
circumstance of voluntary surrender, without any aggravating
circumstance in offset, and applying the Indeterminate Sentence Law,
each of them is hereby sentenced to suffer the indeterminate penalty
ranging from TEN (10) YEARS and ONE (1) DAY of prision mayor, as the
minimum, to SEVENTEEN (17) YEARS, FOUR (4) MONTHS and ONE (1)
DAY of reclusion temporal, as the maximum; to further suffer perpetual
special disqualification; to pay, jointly and severally, the Government of the
Republic of the Philippines in the same amount of P3,178,177.41, and to
pay their proportional share of the costs of the action.
SO ORDERED."[3]
Accused ENRIQUEZ and ESPINOSA blamed each other for the shortage. ENRIQUEZ
tried to show that he is not the custodian of the funds of the municipality and that it is
ESPINOSA and the deceased co-accused Belinda Santos who had custody and
safekeeping over the funds and the keys to the vault. For her part, ESPINOSA claimed
that it was accused ENRIQUEZ and Imelda San Agustin, the duly appointed cashier
who are the ones responsible for the alleged shortage. The Sandiganbayan found that

ENRIQUEZ and ESPINOSA in conspiracy with each other misappropriated public funds
in their custody and sought to cover up the shortages already existing in the municipal
treasurys collections by depositing the subject China Banking Corporation check in the
amount of P3,178,777.41. The Sandiganbayan, in its assailed decision, ratiocinated
thus:
"xxx xxx xxx.
From the narration of the evidence, testimonial and documentary, adduced
by both accused Enriquez and Espinosa in their defense, it appears that
certain circumstances of paramount importance have been ignored or
overlooked by the defense, considering the foregoing admitted facts on
record, which are, that the instant prosecution is for Malversation of Public
funds and that once a shortage in said funds had been established, it is
the accountable officer (or officers) who bear(s) the obligation to submit a
satisfactory explanation as to why he (or they) should not be held
accountable therefor (Article 217, Revised Penal Code).
These circumstances have not been thoroughly nor diligently delved into
by either of the accused, who were apparently more concentrated in
pointing to each other and shifting the blame for the appearance and/or
introduction into the municipal treasurers accounts of a check in the
amount of P3,267,911.10 drawn against the China Banking Corporation,
dated October 7, 1987 (Exhibit E). As testified to by prosecution witness
Auditor Carmelita Antasuda, said check was made to form part of the
collections of the municipal treasurer, sometime in October 1987, despite
the fact that there was no official receipt appearing to have been issued
for it and neither does it appear to have been issued in payment of taxes
or obligations due to the municipality of Pasig. Afterwards, said check,
bearing accused Enriquez indorsement at the back, was included in a
statement of checks (Exhibit P) prepared in the Pasig Municipal
Treasurers Office for transmittal to, and deposit with, the Quezon City
Treasurers Office, the latter being the official district treasury for municipal
deposits. Missc
The statement of the checks (Exhibit P), together with the check in
question (Exhibit E), and another statement of checks (Exhibit 7-Espinosa)
was admittedly brought by Benito Buenviaje, a casual janitor in the
municipal treasurers office, upon the instruction of accused Enriquez to
the Quezon City Treasurers Office and received thereat on October 15,
1987. Buenviaje was issued two official receipts, one of which, O. R. No.

279451 (Exhibit 7-b-Enriquez), was in the amount of P3,308,774.44, which


included the dishonored check (Exhibit M-1, Page 2 par. 3). The check
was deposited by the Quezon City Treasury Office under Account No. 6
with the PNB, Cubao, Branch, for credit to the Pasig municipal treasury
but it was dishonored and returned on October 21, 1987 because the
account was under garnishment and the check had an unauthorized
signatory (Exhibit E-2). As found by the NBI, the drawer of the said check
was a certain "D. Noble", with the account (CBC No. 0026813) being in
the name of one Leonora Reyes of EDSA Home Improvement Center, Inc.
(Exhibit M-1, page 3, par. 5).
Hence, as of October 15, 1987, the municipal collections had a virus
fatally imbedded within it, a wayward private check which cannot lawfully
be credited to the municipal treasury or to the accountability of either of
the accused herein, as primary and secondary accountable officers.
Worse, on September 23, 1987, accused Espinosa had tried to foist a
similar scam by personally bringing to the District Treasury in Quezon City
bundles of checks listed in three (3) statements of checks, dated
September 15, 1987 and signed by accused Enriquez, totaling
P583,084.18 (Exhibits 22, 22-a and 22-b-Espinosa). While the total
amount on the adding machine tapes when presented, wasP3,583,084.18,
as testified to by Maria Felisa Cervantes (TSN, pp. 6-31, May 21, 1991),
with accused Espinosa being issued Official Receipt No. 279339 (Exhibits
11-to11-d-Enriquez), she later returned to Cervantes and said she had
committed a mistake and had Cervantes cross out the figure 3" in said
receipt to conform with the actual amount of the checks which was
P583,084.18 only.
Coupled with the same scenario that transpired on October 15, 1987 with
respect to the dishonored CBC Check in the amount of P3,267,911.10
(Exhibit E), which likewise reached the Quezon City Treasurers Office
thru a statement of checks signed by accused Enriquez (Exhibit P), then it
can logically be presumed that during the months of September and
October, 1987, both accused Enriquez and Espinosa were already aware
of an impending shortage in their accountabilities in the neighborhood of
P3-million and were attempting to conceal or cover-up this shortage
through the same modus operandi. Misspped
The audit examination which was conducted on December 1, 1987
(Exhibit D) covered the period from May 4, 1987 to November 30, 1987.
The shortage of P3,178,777.41 was arrived at as follows:

"Accountability:
Beginning Balance, May
4, 1987 P 17,843,0007.26
Add: Collections and
Withdrawals 184,065.858.18
Total P 201,908,865.44
Less: Disbursements and
Deposits 194,433,214.14
Balance of Accountability P 7,475,651.30
Cash and Valid Cash Items 4,296,873.89
Shortage P 3,178,177.41
The shortage is accounted for as follows:
Disallowed cash item CBC
Check #303100 P 3,267,911.10
Overrecording of withdrawals ( 100,018.10)
Underrecording of withdrawals 10,001.18
Underremittance of collections 1,410.55
Overremittance of collections ( 539.00)
Overrecording of deposits 10.40
Overfooting of expenditures .53
Overfooting of collections ( .04)
Underfooting of collections ( .80

Total P 3,178,777.42
It would appear probable, therefore, that even as early as May and prior to
October 15, 1987, the shortage had already existed in the municipal
accounts, traceable to and aggravated by over-recording/under-recording
of withdrawals, under-remittance/over-remittance or collections, overrecording of deposits, over-footing of expenditures, overfooting/underfooting of collections and, most importantly, the dishonored
CBC Check for P3,267,911.10 (Exhibit E). Since the total accountability
of P7,475,651.30, as found by the audit team less cash and valid cash
items amount to P4,296,873.89 still resulted in a shortage
of P3,178,777.42 then the only logical and plausible conclusion to be
arrived at is that collections were, indeed, short between May 4, 1987 and
November 30, 1987 and, consequently, efforts had to be exerted by
accused Enriquez and Espinosa, even including resort to extra-legal
measures, to conceal and/or cover-up the missing public funds. Naturally,
such measures can only be resorted to and utilized by the personnel
therein who would be held responsible for any shortage that would
ultimately be found. They are accused Enriquez, the primary accountable
officer, being the municipal treasurer, and accused Espinosa and the late
accused Belinda Tuao-Santos, whom he had designated as Cashier and
Assistant Cashier as early as December 3, 1984 (Exhibit C-1), and who
performed the duties appurtenant thereto despite the appointment of
Imelda San Agustin as Cashier on July 1, 1987 (Exhibit 1-Espinosa). As to
why accused Enriquez still allowed accused Espinosa, and the late
accused Santos, whose actual appointments were those of Administrative
Officer I and Revenue Collection Clerk, respectively (Exhibits C and A), to
continue discharging the duties and functions of Cashier and Asst. Cashier
after July 1, 1987, only he can explain. The burden, likewise, is on him to
explain why he allowed all three of them (San Agustin, Espinosa and
Santos) to perform over-lapping work and permitted a situation to arise
where accountability could not be pin-pointed for collections, cash-counts
and remittances." Spped
xxx xxx xxx
"As reflected on the record, accused Enriquez and Espinosa were
engaged in mutual recriminations, with the former pointing to the latter,
and the latter pointing to the former and Imelda San Agustin, as the ones
responsible for the irregular entry and receipt of the dishonored CBC
Check for P3,278,161.10 (Exhibit E) as part of the municipal collections,

with accused Enriquez even denying his signatures/initials on the check


itself and the statement of check (Exhibit P), through which said
dishonored check was remitted to the Quezon City Treasurers Office. But,
as We have previously pointed out, for purposes of the instant
prosecution, it is completely and entirely immaterial and irrelevant as to
who received said CBC check and who remitted the same as part of the
municipal collections. What should be explained is why no official receipt
was issued therefor and wherein will be seen the nature and purpose for
the issuance of the check and why it had to be utilized for covering up
shortages already existing in the municipal treasurys collections.
There being no evidence on record to the contrary, then We can logically
presume that the dishonored check (Exhibit E) had been utilized for either
of these objectives, to wit: (a) it was surreptitiously encashed with the
municipal treasury through a revenue collection clerk or someone
performing collection tasks, most probably accused Santos, and after
which the check was included in the Daily Statements of Collections, or (b)
it was borrowed from the account holder, Leonora Reyes, or from one D.
Noble who was in possession thereof, for the specific purpose of coveringup missing collections in the municipal treasury. Either way, the
transaction was irregular and improper, as were other transactions in said
office. As pointed out by Auditor Antasuda in her Memorandum for the
Chairman, COA, dated July 15, 1988 (Exhibit F-1), the audit examination
revealed that not all the checks in the municipal treasury were deposited
intact; there were delayed deposits of collections; it took one month or
more for collections to be deposited with the District Treasurer; the cash
balances always exceeded the cash reserve limit; cash was transferred
from one fund to another with check collections being used to replace the
transferred cash; there were loose controls and no control records in the
handling of dishonored checks, and delayed issuance of receipts on check
payments, among many other defects and deficiencies (Exhibit F-1 a)." [4]
xxx xxx xxx.
Through their separate petitions for review, ENRIQUEZ and ESPINOSA come to this
Court for relief respectively raising numerous and lengthy assigned errors which we
shall summarize herein. For ENRIQUEZ, that the Sandiganbayan erred in convicting
him: 1. despite absence of proof of the missing funds; 2. despite the overwhelming and
unrebutted evidence that he had no participation in the negotiation of the subject check;
and 3. despite the inherent weakness of the prosecution evidence. For ESPINOSA, that
the Sandiganbayan erred in convicting her: 1. considering she was not an accountable

officer at the time the alleged shortage was incurred; 2. there was no proof that she tried
to conceal or cover-up the missing public funds; 3. there was no proof that she
collected, misappropriated or spent the missing funds for her own personal benefit; and
4. the prosecution failed to prove her guilt beyond reasonable doubt. Jospped
The arguments boil down to whether or not ENRIQUEZ and ESPINOSA had incurred a
shortage in their accounts as Municipal Treasurer and Administrative Officer/designated
as Acting Cashier, respectively, which they had attempted to conceal through a bad
check. Sppedjo
In Diaz vs. Sandiganbayan,[5] this Court held:
"Generally, the factual findings of the Sandiganbayan are conclusive upon
this Court but there are established exceptions to that rule, such
as, sans preclusion:, when (1) the conclusion is a finding grounded
entirely on speculation, surmise and conjecture; (2) the inference made is
manifestly an error or founded on a mistake; (3) there is grave abuse of
discretion; (4) the judgment is based on misapprehension of facts; and (5)
the findings of fact are premised on a want of evidence and/or
contradicted by evidence on record. In these instances, this Court is
bound to review the facts in order to avoid a miscarriage of justice." [6]
We could do no less than to re-examine the evidence on record considering that the
decision of the Sandiganbayan, pertinent portions of which we have quoted earlier,
appears to be grounded on probabilities and conjecture. Miso
After an assiduous scrutiny of the pleadings and the evidence, testimonial and
documentary, the Court is convinced that the acquittal of ENRIQUEZ and ESPINOSA
must be decreed.
The crime of malversation for which ENRIQUEZ and ESPINOSA had been charged is
defined under Article 217 of the Revised Penal Code, its pertinent provisions read:
"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."

xxx xxx xxx.


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 under the above penal provision are:
(a) That the offender is a public officer.
(b) That he has the custody or control of funds or property by reason of
the duties of his office.
(c) That those funds or property are public funds or property for which he
is accountable.
(d) That he appropriated, took, misappropriated or consented or, through
abandonment or negligence, permitted another person to take them. [7]
Verily, the first two elements are present in this case. The findings of the Sandiganbayan
that ENRIQUEZ and ESPINOSA are public officers who have the custody or control of
funds or property by reason of the duties of their office are duly supported by the
evidence. It is the last two elements, i.e., whether or not the amount represented in the
dishonored check constituted public funds and whether ENRIQUEZ and/or ESPINOSA
really misappropriated said public funds, where the instant petitions focus themselves.
We are constrained to conclude that the prosecution, upon whose burden was laden the
task of establishing proof beyond reasonable doubt that petitioners had committed the
offense charged, failed to discharge this obligation. The Sandiganbayan found the
denials of the accused and their acts of shifting the blame and passing the responsibility
for the dishonored check to each other as unacceptable and indicative of their guilt.
However, it must be emphasized that although the evidence for the defense may be
characterized as weak, criminal conviction must come from the strength of the
prosecutions evidence and not from the weakness of the defense. [8] We are not
convinced that the evidence in this case has proven beyond reasonable doubt that the
accused are guilty of the crime charged for reasons stated hereunder: Nexold
First. There is no evidence to prove that the Pasig Treasury incurred a cash shortage in
the amount of P3,178,777.41, which amount, incidentally, is even less than the amount
of the dishonored check. As per report of the audit team, the alleged shortage was
computed and based on the value of the dishonored check. We reproduce again the

pertinent portion of the audit examination relied upon by the Sandiganbayan to establish
the shortage:
"The shortage is accounted for as follows:
Disallowed cash item CBC
Check #303100 P 3,267,911.10
Overrecording of withdrawals ( 100,018.10)
Underrecording of withdrawals 10,001.18
Underremittance of collections 1,410.55
Overremittance of collections ( 539.00)
Overrecording of deposits 10.40
Overfooting of expenditures .53
Overfooting of collections ( .04)
Underfooting of collections ( .80
Total P3,178,777.42"[9]
As stated in the assailed decision, it was only the drawn check, based on the audit
examination that brought about the shortage. It was palpable error for the
Sandiganbayan to conclude that the check which the audit team had pinpointed as the
shortage due to its dishonor was at the same time, intended and used by ENRIQUEZ
and ESPINOSA to "cover up" shortages in the funds allegedly in their custody. The
shortage must be clearly established as a fact, i.e., that over and above the funds found
by the auditor in the actual possession of the accountable officers, there is an additional
amount of P3,178.777.42 which could no longer be produced or accounted for at the
time of audit. Evidence of shortage is necessary before there could be any taking,
appropriation, conversion, or loss of public funds that would amount to malversation. It
makes no sense for any bogus check to be produced to "cover up" an inexistent
malversation.[10]
Indeed, no less than the sole witness for the prosecution, audit team leader, Carmelita
Antasuda, who conducted the cash count and cash examination of the Pasig Treasury,

testified that based on their audit examination, it was only the subject check that brought
about the shortage. Her testimony on this point goes:
Q: Now, your examination covered the months from May to November,
1987, were you able to determine whether in May there were already
missing funds from the Treasury of Pasig?
A: In our examination we cannot determine if there were missing funds
prior to our cut-off date.
Q: In other words from the months of May, June, July, August and
September, there was not shown or you were not able to discover whether
there had been losses already during those months?
A: No sir.
Q: In your testimony last Friday you related to us that only checks were
remitted from Pasig to Quezon City Treasury and the cash collections
were retained in Pasig to take care of payments for local obligations, is
that right?
A: Yes sir.
Q: Now, you also stated that you were not able to determine whether
checks or cash or whether just cash was supposed to have been lost; is
that right?
A: Yes sir.
Q: Now, if a check, as you also said is payable always to the Municipal
Treasury of Pasig, is that right?
A: Yes sir.
Q: If a check was lost, the record of the Municipal Treasurer of Pasig
would record the payment as record the obligations of the payee as
unpaid; is that right?
A: When was the check was lost.
Q: Supposing a check was paid to the Municipal Treasurer of Pasig was
lost or was not encashed?

JUSTICE ESCAREAL:
Q: While in the possession of?
ATTY. SANCHEZ:
Q: Of the Treasurer of Pasig, meaning it did not enter the cash collections,
the encashment of the checks did not enter the treasurer of Pasig would
not the obligation for which that amount in check was paid be recorded as
still unpaid?
A: I would like to clear that. When payments are made in the Municipal
Treasurer of Pasig through checks it is automatically issued an official
receipt for that payment and the check and. and the fact that it is already
issued an official receipt it follows that the taxpayer had already paid the
amount of his tax.
JUSTICE ESCAREAL:
Q: In this particular case, did you find any official receipt issued for the
check?
A: None, Your Honor. There has been no official receipt issued to that
particular check.
Q: In the name of the drawer Dean Noble you did not find any official
receipt?
A; No sir.
Q: There was no receipt for Mr. Noble in the record of the Treasury of
Pasig?
A: None, Your Honor.
JUSTICE ESCAREAL:
You may now proceed.
ATTY. SANCHEZ:

Q: Now, if these cash collections were lost where the object of whatever
manipulation that was done according to the charge in this case only cash
collections is not the basis of your statement in your recommendation
number 1 in Exhibit F, your report is not the basis of that recommendation
of yours the fact that these cash collections were lost?
A: In our examination, sir the result that the shortage was on a check
corresponding to the amount of the check and it is that check which we
disallowed so we do not know if it was cash or it was that check that was
cashed that was taken only that we know that it was that check that we
disallowed in audit and it is that check that resulted in the shortage."[11]
Equally revealing from the above-quoted testimony of Carmelita Antasuda is her
declaration that they could not identify whether it was cash or check that was lost. This
admission by the audit team leader necessarily weakens the reliability of the audit
findings. The respondent court itself gathered from Antasudas cross-examination as
follows: Manikx
"The cashbook that they examined covered the months of May to
November 1987 and they conduct cash examinations twice a year. Based
on their review, Auditor Diche conducted two cash counts from May to
November 1987, one in September 23, 1987 and another on October 9,
1987 but she does not know what were the results of her cash counts.
They were not able to find out as to when the check (Exhibit E) was
actually entered in the municipal treasury because the collection voucher
does not bear any collection pertaining to said check. Neither were they
able to discover whether there had been losses during the months from
May to September 1987. In fact, there has been no official receipt issued
for the said check. They did not find anything irregular in the statements of
checks turned over to them by Imelda Augustin.xxx" [12]
Evidently, the audit examination lacked the thoroughness and completeness required by
the Manual of Instructions to Treasurers and Auditors and Other Guidelines.
[13]
In People vs. Tinga[14], the Court had occasion to state:
"At this juncture, it may not be amiss to state that considering the gravity
of the offense of Malversation of Public Funds, just as government
treasurers are held to strict accountability as regards funds entrusted to
them in a fiduciary capacity, so also should examining COA auditors act
with greater care and caution in the audit of the accounts of such
accountable officers to avoid the perpetration of any injustice. Accounts

should be examined carefully and thoroughly "to the last detail," "with
absolute certainty" in strict compliance with the Manual of Instructions. x x
x."
Apparently, the Sandiganbayan relied on the statutory presumption that the "[f]ailure of
a public officer to have duly forthcoming any public funds 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." It must be emphasized that
the prima facie presumption arises only if there is no issue as to the accuracy,
correctness, and regularity of the audit findings and if the fact that funds are missing is
indubitably established.[15] In the instant case, audit team leader Carmelita Antasuda
could not even equivocally state whether it was cash or check that was lost, if at all
there was any, belying the accuracy and correctness of the teams audit report.
Second. There is no evidence that ENRIQUEZ or ESPINOSA had received such an
amount which they could no longer produce or account for at the time of the audit. The
Sandiganbayan merely speculated that it was "surreptitiously encashed with the
municipal treasury through a revenue collection clerk or someone performing collection
tasks" or "it was borrowed from the account holder for the purpose of covering-up
missing collections." In its own words the subject check was a "wayward private check
which cannot lawfully be credited to the municipal treasury or to the accountability of
either of the accused herein, as primary and secondary accountable officers." [16] For this
reason, the Sandiganbayan had to rely on its cover-up theory which is not plausible
from the evidence on record. Maniks
Third. There is no showing that the subject check was received by the Pasig Treasury in
an official capacity; that there was a duty to receive or collect the said amount; and that
there was an obligation to account for the same. The evidence submitted, just to the
contrary, would point out that the subject check was not issued in payment of taxes or
obligations due to the municipality and consequently no official receipt was issued for it.
Indeed, the subject check never formed a portion of the public funds of the municipality
for which either ENRIQUEZ or ESPINOSA are accountable for. Manikan
Fourth. The Sandiganbayan clearly erred in inferring from the incident that transpired on
September 23, 1987, wherein ESPINOSA deposited checks with the Quezon City
Treasury for which she was issued an official receipt in the amount of P3,583,084.18,
but which she later corrected to conform to the actual amount of the checks
as P583,084.18, as indicative of amodus operandi to cover-up a shortage in the amount
of P3 million. ESPINOSA has explained, and her testimony remains unrebutted, that
she requested that the correction be made because she discovered 15 minutes after
she was issued the official receipt that the checks and the accompanying statements of

checks[17] had not been endorsed and signed by ENRIQUEZ. Moreover, the general rule
is that the law will not consider evidence that a person has done a certain act at a
particular time as probative of a contention that he has done a similar act at another
time. This is the rule of res inter alios acta[18] found in Section 34, Rule 130 of the Rules
of Court, as amended.[19] Said incident could not even sufficiently establish a plan or
scheme between ENRIQUEZ and ESPINOSA to cover-up a shortage that has never
been proven. Oldmiso
In view of the foregoing, the presumption is that ENRIQUEZ and ESPINOSA are
innocent, and the presumption continues up to the moment their guilt is proved beyond
reasonable doubt. To justify their conviction of the offense charged, the evidence must
establish their guilt to a moral certainty. In the instant case, the proofs on record fall
short of that required criterion. Consequently, the degree of moral certainty required to
justify conviction for this particular offense is sorely wanting and petitioners acquittal
thereof must be adjudged.
To repeat, the only facts established by the evidence against ENRIQUEZ is that he
instructed Benito Buenviaje to deliver the bundled checks placed on his desk which
apparently included the bogus check. His intials appearing thereon were found to be
forged by the NBI. On the other hand, the acts established against ESPINOSA
consisted of what transpired at the Quezon City Treasury on September 23, 1987. We
cannot, however, derive from these circumstances, without more, a conclusion that
ENRIQUEZ and ESPINOSA pocketed an amount of more than 3 million pesos from the
funds in their capacity as accountable public officers and, to prevent discovery, had
caused the issuance of the bogus check to cover up the shortage. Ncm
There would appear to have been lapses or deficiencies in the observance of auditing
rules and regulations in the handling of the funds of the municipal treasury e. g. delay in
deposits of collections, cash balances exceeding cash reserve limit, loose controls and
no control records, etc. as pointed out by the audit team, and questions as to how a
private check was bundled together with legitimate collections of the Pasig Treasury for
transmittal to the Quezon City Treasury, but the same do not warrant a finding of
criminal culpability, which requires proof beyond reasonable doubt on the part of
ENRIQUEZ and ESPINOSA. However, the Chairman of the Commission on Audit
should be apprised of this decision for whatever action he may deem appropriate.
WHEREFORE, the decision of the Sandiganbayan (Second Division) promulgated on
February 28, 1995 is REVERSED and SET ASIDE, and the petitioners Francisco C.
Enriquez and Carmencita G. Espinosa are ACQUITTED of the charge of malversation
of public funds under Article 217(4) of the Revised Penal Code. The Division Clerk of

Court is directed to furnish the Chairman of the Commission on Audit copies of this
decision. Ncmmis
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur.
Purisima, J., abroad-no part.
SECOND DIVISION
[G.R. No. 132926. July 20, 2001]
ELVIRA AGULLO, petitioner, vs. SANDIGANBAYAN
PHILIPPINES, respondents.

and

PEOPLE

OF

THE

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 Decision [1] of the
Sandiganbayan promulgated on 16 March 1992, and its Resolution dated 11 March
1998, denying petitioners motion for reconsideration [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 information[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 guilty[4] to the charge, after which the Sandiganbayan conducted
a pre-trial on 11 February 1990 and issued the following Pre-Trial Order: [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 governmentas 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, [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 letter[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
admitted[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.[9]
With petitioners admission of the fact of cash shortage, the prosecution then rested
its case.[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 P26,722.05[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.[12]
Additionally, the defense presented the following documentary evidence, [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 accountability[14] as Disbursing Officer[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,[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.
[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.[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
Avenue[19] a distance of around 50 meters away from her residence [20] when she was
stricken with deep chest pain [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.[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. [23] Petitioner was
confined in St. Pauls Hospital for over a week from 22 October 1985 to 01 November
1985[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.[25] Records reveal that evidence for the prosecution consisted solely of
the Report of Cash Examination,[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 Demand[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 orpresumption of malversation under Article 217,
paragraph (4) of the Revised Penal Code, to wit:
ART. 217. Malversation of public funds or propertyPresumption 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. [28]
Applying the foregoing principle, the prosecution in the instant case upon whose
burden, as in Diaz vs. Sandiganbayan,[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.[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. [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 P26,404.26 [32] and P26,076.87,[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."[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.[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. [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 doubtof the offense charged. Neither can it rely on the weak defense the
latter may adduce.[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. [38] This course of action is impermissible for the
evidence of the prosecution clearly cannot sustain a conviction in an unprejudiced
mind.[39]
All told, this Court, through the scholarly ponencia of Mr. Justice Isagani Cruz
in People vs. De Guzman,[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.
Bellosillo (Chairman), Mendoza, and De Leon, JJ., concur.
Quisumbing, J., on official business.