PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. TEOFILO G. PANTALEON, JR. AND JAIME F. VALLEJOS, ACCUSED-APPELLANTS.

People of the Philippines versus Pantaleon

The Case

This is the People of the Philippines against Teofilo Pantaleon, Junior and Jaime Vallejos, the former Municipal Mayor and Municipal Treasurer of Castillejos, Zambales. The Sandiganbayan convicted them of three counts of malversation of public funds through falsification of public documents, and they ask the Supreme Court to reverse. The case matters because it fixes the rule on conspiracy and on the presumption that a public officer who cannot account for public funds has put them to personal use, and because it shows how a mayor and a treasurer who sign and pay on vouchers that never passed through the accountant and the budget officer cross the line from irregularity into crime.

Procedural History

Vice Mayor Wilma Billman, several councilors, and Rodolfo Navalta filed joint affidavit-complaints before the Office of the Special Prosecutor of Zambales. The Office of the Special Prosecutor recommended the filing of an Information against the two appellants and Ken Swan Tiu, and the dismissal of the complaint against Engineer Ramos. The Office of the Deputy Ombudsman for Luzon approved the recommendation but dismissed the complaint against Ken Swan Tiu for lack of probable cause, and the Office of the Ombudsman approved that review action. Three separate Informations were then filed before the Sandiganbayan. After arraignment, the Sandiganbayan ordered the appellants preventively suspended for ninety days and denied their motion for reconsideration. The appellants brought a petition for review on certiorari to the Supreme Court, which denied it for lack of merit. After trial on the merits, the Sandiganbayan, in its decision of February 4, 2003, found both appellants guilty beyond reasonable doubt of three counts of the complex crime, sentenced each to reclusion perpetua and perpetual special disqualification for each count, and ordered them to pay fines of 166,242 pesos and 72 centavos, 154,634 pesos and 27 centavos, and 90,464 pesos and 21 centavos, respectively, plus costs. The appellants appealed to the Supreme Court, which reviewed the decision on appeal.

Facts

In January and February of 1998, and again in March of 1998, the Municipality of Castillejos, Zambales paid out public funds on three disbursement vouchers: 166,242 pesos and 72 centavos for the upgrading of barangay roads in Looc, Nagbayan, Magsaysay, and San Pablo; 154,634 pesos and 27 centavos for the upgrading of roads in Looc proper to Casagatan, Nagbayan proper to Angeles, and San Pablo to Sitio San Isidro; and 90,464 pesos and 21 centavos for the construction of market stalls at the public market. Each voucher was supported by a contract with La Paz Construction, certificates of inspection and acceptance, purchase orders, price quotations, and official receipts. Pantaleon, the mayor, approved the vouchers, and Vallejos, the treasurer, paid them.

The prosecution showed that the projects were fictitious. Engineer Ramos, whom Pantaleon had designated acting municipal engineer, testified that he prepared the three programs of work in March of 1998 on the instruction of Vallejos, but was told to place earlier dates on them, and that he never implemented any of the projects. Councilor Aurelio testified that no market stall was built in 1998 and 1999 and no barangay road was upgraded in 1998, and that no infrastructure project could have been made in January of 1998 because it was an election period. Barangay Captain Alberto and Councilor Resty likewise saw no road projects in their areas. Ken Swan Tiu, the owner of La Paz Construction, denied entering into any contract with the municipality and denied receiving any payment, and disowned the signatures on the vouchers.

Nida, the municipal accountant, testified that she reviewed the vouchers only after the amounts had been paid, and that the vouchers did not bear her signature or that of the budget officer. She explained that a voucher must be certified by the local budget officer and the municipal accountant, and that without her signature a voucher is defective for failure to comply with government auditing and accounting rules. She also testified that the voucher numbers and accounting entries were filled up by Vallejos, that the contract attached to one voucher was not notarized, and that no abstract of bids and no authority to enter into a negotiated contract were attached. For the defense, Vallejos admitted paying the vouchers without the accountant's signature because the contractor was demanding payment, and Pantaleon admitted that the Sanggunian never adopted a resolution authorizing him to enter into a negotiated contract, and that he signed the vouchers despite the missing signatures because he considered them unimportant.

Issues

• Whether or not the prosecution proved beyond reasonable doubt that the appellants malversed public funds through falsification of public documents.
• Whether or not the appellants conspired with one another in committing the crime.
• Whether or not the appellants are liable for the amounts stated in the three disbursement vouchers.

Applicable Provisions

Article 217 of the Revised Penal Code, as quoted in the decision, defines malversation of public funds:

The penalty of prision mayor in its minimum and medium periods, if the amount involved is more than 6,000 pesos but does not exceed 12,000 pesos. If the amount exceeds the latter, the penalty shall be reclusion temporal in its medium and maximum periods.

This is the crime charged, and its penalty depends on the amount malversed, which is why the Court had to fix the amounts involved.

Article 48 of the Revised Penal Code, on the complex crime, provides:

When a single act constitutes two or more grave or less grave felonies, or when an offense is a necessary means for committing the other, the penalty for the most serious crime shall be imposed, the same to be applied in its maximum period.

This is the provision under which malversation through falsification is punished as one complex crime, with the penalty for the more serious offense in its maximum period.

Article 171 of the Revised Penal Code, on falsification by a public officer, provides:

The penalty of prision mayor and a fine not to exceed 5,000 pesos shall be imposed upon any public officer, employee, or notary who, taking advantage of his official position, shall falsify a document by committing any of the following acts: 1. Counterfeiting or imitating any handwriting, signature or rubric; 2. Causing it to appear that persons have participated in any act or proceeding when they did not in fact so participate; 3. Attributing to persons who have participated in an act or proceeding statements other than those in fact made by them; 4. Making untruthful statements in a narration of facts; 5. Altering true dates; 6. Making any alteration or intercalation in a genuine document which changes its meaning; 7. Issuing in an authenticated form a document purporting to be a copy of an original document when no such original exists, or including in such copy a statement contrary to, or different from, that of the genuine original; or 8. Intercalating any instrument or note relative to the issuance thereof in a protocol, registry, or official book.

This is the falsification that was the necessary means of committing the malversation, done by public officers taking advantage of their positions.

Ruling

On the first issue, the Court held that the prosecution proved the crime beyond reasonable doubt. The elements of malversation are that the offender is a public officer, that he has the custody or control of the funds by reason of his office, that the funds are public, and that he appropriated them or took them or misappropriated them, or that by his negligence he permitted another to take them. The Court applied the presumption that a public officer who has custody of public funds and cannot account for them has put them to personal use. Here the mayor approved and the treasurer paid vouchers for projects that were never done, and the supporting papers were false. The Court also held that the falsification was a necessary means of committing the malversation, so the two formed the complex crime under Article 48.

On the second issue, the Court held that conspiracy was established. The acts of the appellants showed a common design: the mayor approved the vouchers and the treasurer filled up the entries and paid them, both knowing that the accountant and the budget officer had not signed and that the projects were not implemented. In conspiracy, the act of one is the act of all.

On the third issue, the Court held that the amounts stated in the three vouchers were the amounts malversed, and these were the basis of the fines imposed. The Court affirmed the penalties of reclusion perpetua and perpetual special disqualification for each count, and the fines of 166,242 pesos and 72 centavos, 154,634 pesos and 27 centavos, and 90,464 pesos and 21 centavos.

Doctrine

A Bar candidate should retain these rules. First, malversation of public funds under Article 217 requires that the offender be a public officer with custody or control of public funds by reason of his office, and that he appropriate them or take them or misappropriate them, or permit another to take them through negligence. Second, when a public officer cannot account for public funds in his custody, the law presumes that he has put them to personal use. Third, when falsification is a necessary means of committing malversation, the two form a complex crime under Article 48, and the penalty for the more serious offense is imposed in its maximum period. Fourth, conspiracy exists when two or more persons agree to commit a crime and act in furtherance of that agreement, and the act of one is the act of all. Fifth, a disbursement voucher that lacks the certification of the local budget officer and the municipal accountant is defective under government auditing and accounting rules, and a public officer who signs and pays on such a voucher cannot hide behind the excuse that the signatures were unimportant.

Disposition

The Supreme Court affirmed the decision of the Sandiganbayan in all respects, finding both appellants guilty beyond reasonable doubt of three counts of malversation of public funds through falsification of public documents and imposing the penalties and fines stated.

Remember This

The single line worth memorizing is that a public officer who has custody of public funds and cannot account for them is presumed to have put them to personal use, and when falsification is the necessary means, the malversation and the falsification form a complex crime under Article 48. Examiners use this case to test the elements of malversation, the presumption of misappropriation, the complex crime rule, and the rule that the act of one conspirator is the act of all.