JOSE T. VILLAROSA, CARLITO T. CAJAYON and PABLO I.

ALVARO, versus - THE

HONORABLE OMBUDSMAN and ROLANDO C. BASILIO
G.R. No. 221418
FACTS:
Private respondent Rolando C. Basilio filed criminal and administrative complaints dated September 23,
2011 with the Ombudsman against petitioners Villarosa, Municipal Mayor; Alvaro, Municipal
Accountant; and Cajayon, Municipal Treasurer; all of San Jose, Occidental Mindoro, for Malversation of
Public Funds defined and penalized under Article 220 of the Revised Penal Code (RPC); violation of
Section 3 (a), ( e ), (g) and (i) of R.A. No. 3019; violation of R.A. No. 8240; grave abuse of authority;
grave misconduct; dishonesty; and conduct prejudicial to the best interest of the service. According to
private respondent Basilio, petitioner Villarosa, together with petitioners Alvaro and Cajayon, approved
the use of the municipality's "Trust Fund" derived from tobacco excise taxes (Tobacco Fund) under R.A.
No. 82403 to finance the regular operations of the municipality. It was also alleged that the expenses of
the municipality which the Tobacco Fund was made to account for were not within the purpose for which
said fund was created. Petitioner Villarosa was further alleged to have procured ten (10) "reconditioned"
multi-cab vehicles amounting to P2, 115,000.00, but the invitation to bid and the contracts executed
therefor did not indicate that said vehicles were "reconditioned." Private respondent Basilio, thus,
theorized that conspiracy attended the commission of the acts complained of because the disbursements
lacked prior budgetary authorization and showed that petitioners misappropriated the funds to the damage
and prejudice of the intended beneficiaries.
In its Joint Resolution6 dated March 23, 2015, the Ombudsman found probable cause to indict petitioners
for Technical Malversation and violation of Section 3 (e) of R.A. No. 3019. It also found petitioners
guilty of grave misconduct, dishonesty and conduct prejudicial to the best interest of the service.
Petitioners filed their motion for reconsideration, but it was denied in the Order dated July 29, 2015 of the
Ombudsman.
ISSUE:
Whether or not the Ombudsman erred in indicting the herein petitioners for the following:
(a) technical malversation; and
(b) violation of section 3 (e) of RA No. 3019
RULING:
On Technical Malversation
The Court ruled in the negative. The Ombudsman did not err in indicting the petitioners for Technical
Malversation.
The crime of Technical Malversation has three (3) elements: "(a) that the offender is an accountable
public officer; (b) that he applies public funds or property under his administration to some public use;
and (c) that the public use for which such funds or property were applied is different from the purpose for
which they were originally appropriated by law or ordinance. "
Respondents were public officers who received from Occidental Mindoro's Congressional Representative
a portion of the province's share in the revenue from the tobacco excise tax for proper administration.
Pursuant to RA 8240, the local government unit's share in the proceeds should be used solely for
cooperative, livelihood and/or agroindustrial projects that enhance the quality of agricultural products,
develop alternative farming systems, or enable tobacco farmers to manage and own post-harvest
enterprises like cigarette manufacturing and byproduct utilization.
Notwithstanding the mandate of the law and the circular, respondents applied the fund to the purchase of
vehicles, Christmas lights, meals and snacks of newly-elected Barangay Captains and SK Chairpersons,
medicines, and gravel and sand. They also used said fund for the maintenance of a PNP vehicle and other
service vehicle, for bus rentals, and various other municipal activities.
The Ombudsman's finding of probable cause to indict petitioners with the crime of Technical
Malversation prevails over their bare allegations of grave abuse of discretion.
On violation of Section 3 (e) of R.A. 3019
This Court, however, finds no probable cause to charge petitioners with violation of Section 3 (e) of R.A.
No. 3019.
The elements of Section 3 (e), R.A. No. 3019 are as follows: (1) the offender is a public officer; (2) the
act was done in the discharge of the public officer's official, administrative or judicial functions; (3) the
act was done through manifest partiality, evident bad faith, or gross inexcusable negligence; and ( 4) the
public officer caused any undue injury to any party, including the Government, or gave any unwarranted
benefits, advantage or preference.
For an act to be considered as exhibiting "manifest partiality," there must be a showing of a clear,
notorious or plain inclination or predilection to favor one side rather than the other. 32 "Partiality" is
synonymous with "bias" which "excites a disposition to see and report matters as they are wished for
rather than as they are. " 33 "Gross negligence has been so defined as negligence characterized by the
want of even slight care, acting or omitting to act in a situation where there is a duty to act, not
inadvertently but wilfully and intentionally with a conscious indifference to consequences in so far as
other persons may be affected. It is the omission of that care which even inattentive and thoughtless men
never fail to take on their own property. "
Contrary to the view of the Ombudsman, the mere act of using government money to fund a project
which is different from what the law states you have to spend it for does not fall under the definition of
manifest partiality nor gross inexcusable negligence. It must always be remembered that manifest
partiality and gross inexcusable negligence are not elements in the crime of Technical Malversation and
simply alleging one or both modes would not suffice to establish probable cause for violation of Section 3
( e) of R.A. No. 3019, for it is well-settled that allegation does not amount to proof. Nor can we deduce
any or all of the modes from mere speculation or hypothesis since good faith on the part of petitioners as
with any other person is presumed. 35 The facts themselves must demonstrate evident bad faith which
connotes not only bad judgment, but also palpably and patently fraudulent and dishonest purpose to do
moral obliquity or conscious wrongdoing for some perverse motive or ill will.

In this case, the finding of the Ombudsman falls short of that quantum of proof necessary to establish the
fact that petitioners acted with manifest partiality or there was a failure to show that there was a clear,
notorious or plain inclination or predilection on the part of the petitioners to favor one side rather than the
other.

G.R. No. 158413               February 8, 2012

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

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

x---------------------------------------------x
G.R. No. 161133

MELCHOR M. MALLARE and ELIZABETH GOSUDAN, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

FACTS:

On October 4, 1999, an Information  was filed before the Sandiganbayan charging Melchor M.
Mallare (Mallare) and Elizabeth M. Gosudan (Gosudan), Mayor and Treasurer, respectively, of the
Municipality of Infanta, Pangasinan with the crime of Malversation of Public Funds, defined and
penalized under Article 217 of the Revised Penal Code. The Information reads:

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

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

ISSUE: Whether or not the Sandiganbayan was correct in finding Mallare and Gosudan guilty beyond
reasonable doubt of the crime of Malversation of Public Funds.

HELD:

The Court ruled in the affirmative. the Sandiganbayan was correct in finding Mallare and Gosudan guilty
beyond reasonable doubt of the crime of Malversation of Public Funds.

The Court explained, to sustain a criminal conviction for the crime of Malversation of Public Funds under
Article 217 of the Revised Penal Code, as amended, all the following elements must be present:

1. That the offender is a public officer;

2. That he had custody or control of funds or property by reason of the duties of his office;
 3. That those funds or property were public funds or property for which he was accountable; and

4. That he appropriated, took, misappropriated or consented or, through abandonment or

negligence, permitted another person to take them.

Unquestionably, the source of the subject funds taken by Mallare and Gosudan came from the municipal
funds. As Municipal Mayor and Treasurer, respectively, they had the sworn duty to safely keep said funds
and disburse the same in accordance with standard procedure because the subject funds belong to the
municipality and must only be used for the benefit of the municipality. The standard practice in the
disbursement of public funds is that they cannot be released and disbursed without the signatures of the
Mayor and the Treasurer. In this case, the written approvals of Mallare and Gosudan were essential before
any release and disbursement of municipal funds could be made.

Hence, any unlawful disbursement or misappropriation of the subject funds would make them
accountable.

Mallare and Gosudan appropriated, took, misappropriated or consented or, through abandonment or
negligence, permitted another person to take them

In the crime of malversation, all that is necessary for conviction is sufficient proof that the accountable
officer had received public funds, that he did not have them in his possession when demand therefor was
made, and that he could not satisfactorily explain his failure to do so. Direct evidence of personal
misappropriation by the accused is hardly necessary in malversation cases.

Clearly, the subject loans that Gosudan extended to the said municipal officials and employees including
herself were unofficial and unauthorized loans and, therefore, anomalous in nature. The Sandiganbayan
was correct in ruling that said loans were nothing but personal loans taken from the cash account of the
Municipality of Infanta, Pangasinan. Gosudan unlawfully disbursed funds from the coffers of the
municipality and, therefore, guilty of the crime of Malversation of Public Funds.

Like Gosudan, Mallare is also guilty of the same crime for accepting or getting for himself the loan
amount of ₱ 300,998.59 from Gosudan as evidenced by his written acknowledgment in the COA Audit
Team’s confirmation letter. His acceptance of the subject loan amount of ₱ 300,998.59 without any
supporting official voucher is proof that there was a conspiracy in the illegal disbursement of the subject
loan amounts.

Finally, the Court is in accord with the Sandiganbayan’s ruling that the full restitution of the lent public
funds cannot exonerate Mallare and Gosudan from the crime charged because payment does not
extinguish criminal liability.

It bears stressing that the full restitution of the amount malversed will not in any way exonerate an
accused, as payment is not one of the elements of extinction of criminal liability. Under the law, the
refund of the sum misappropriated, even before the commencement of the criminal prosecution, does not
exempt the guilty person from liability for the crime. At most, then, payment of the amount malversed
will only serve as a mitigating circumstance akin to voluntary surrender, as provided for in paragraph 7 of
Article 13 in relation to paragraph 10 of the same Article of the Revised Penal Code.