ZACARIA A. CANDAO, ABAS A. CANDAO AND ISRAEL B. HARON, PETITIONERS, VS. PEOPLE OF THE PHILIPPINES AND SANDIGANBAYAN, RESPONDENTS.

Candao versus People of the Philippines

The Case

This is the case of Candao versus People of the Philippines, a petition for review on certiorari brought by Zacaria Candao, Abas Candao, and Israel Haron against the People of the Philippines and the Sandiganbayan. The petitioners were convicted of malversation of public funds under Article 217 of the Revised Penal Code, as amended, and they ask the Supreme Court to overturn that conviction. The case matters to a Bar candidate for two reasons. First, it is a working illustration of the elements of malversation and of the presumption that arises when a public officer fails to account for public funds. Second, and more importantly for the computation of penalties, it teaches how to build an indeterminate sentence when the penalty prescribed by law is not composed of three periods — a point the Court itself had to correct on reconsideration.

Procedural History

The petitioners were charged before the Sandiganbayan in a long series of criminal cases for malversation of public funds. After trial, the Sandiganbayan, in its Decision dated October 29, 2008, found the petitioners guilty beyond reasonable doubt of malversation under Article 217, paragraph 4 of the Revised Penal Code, as amended. The petitioners moved for reconsideration, but the Sandiganbayan denied the motion in its Resolution dated February 20, 2009. The petitioners then elevated the matter to the Supreme Court by petition for review on certiorari. On October 19, 2011, the Court rendered a Decision affirming with modifications the conviction. The petitioners filed a motion for reconsideration of that Decision. The Court found no compelling reason to reverse its earlier ruling, but it accepted the suggestion of Justice Bersamin to correct the maximum of the indeterminate sentence, which the earlier Decision had erroneously fixed at seventeen years and four months of reclusion temporal medium. The Court then issued the present resolution denying the motion for reconsideration and amending the penalty discussion and the dispositive portion.

Facts

The petitioners were public officers who were entrusted with public funds. They were charged with malversation of public funds for failing to account for those funds. The amounts involved exceeded twenty-two thousand pesos, which placed the offense under the higher penalty bracket of Article 217.

After trial, the Sandiganbayan found them guilty beyond reasonable doubt. The Commission on Audit finally determined the total amount of the malversed funds to be twenty-one million, forty-five thousand, five hundred seventy pesos and sixty-four centavos.

The petitioners challenged the conviction before the Supreme Court. The Court affirmed the conviction but had to revisit the penalty. On reconsideration, the Court corrected the maximum of the indeterminate sentence, because the penalty prescribed for malversation when the amount exceeds twenty-two thousand pesos is not composed of three periods.

Issues

• Whether or not the petitioners are guilty beyond reasonable doubt of malversation of public funds under Article 217, paragraph 4 of the Revised Penal Code, as amended.
• Whether or not the Sandiganbayan imposed the correct penalty, specifically the correct maximum of the indeterminate sentence, when the penalty prescribed by law is not composed of three periods.
• Whether or not the petitioners are entitled to the benefit of the three-fold rule in the service of their sentences.

Applicable Provisions

Article 217, paragraph 4 of the Revised Penal Code, as amended, fixes the penalty for malversation where the amount involved exceeds twenty-two thousand pesos. It bears on the case because it is the very provision under which the petitioners were convicted and sentenced:

Under Article 217, paragraph 4 of the Revised Penal Code, as amended, the penalty of reclusion temporal in its maximum period to reclusion perpetua shall be imposed if the amount involved exceeds P22,000.00, in addition to fine equal to the funds malversed.

Article 65 of the Revised Penal Code governs the division of a penalty that is not composed of three periods. It bears on the case because it is the rule the Court used to correct the maximum of the indeterminate sentence:

Pursuant to Article 65 of the Revised Penal Code, when the penalty prescribed by law is not composed of three periods, the court shall apply the rules contained in the articles of the Revised Penal Code preceding Article 65, dividing into three equal portions of time included in the penalty prescribed, and forming one period of each of the three portions.

Article 70 of the Revised Penal Code, as amended, provides the three-fold rule in the service of sentences. It bears on the case because the Court expressly extended its benefit to the petitioners:

In the service of their respective sentences, the petitioners shall be entitled to the benefit of the three-fold rule as provided in Article 70 of the Revised Penal Code, as amended.

Ruling

On the first issue, the Court denied the petition for lack of merit and affirmed the conviction. The Sandiganbayan's finding of guilt beyond reasonable doubt for malversation of public funds under Article 217, paragraph 4 was sustained.

On the second issue, the Court corrected the penalty. The penalty for malversation where the amount exceeds twenty-two thousand pesos is reclusion temporal in its maximum period to reclusion perpetua. That penalty is not composed of three periods. Following Article 65, the Court divided the time included in the penalty into three equal portions. Because reclusion perpetua is indivisible, it is at once the maximum period, while reclusion temporal in its maximum period is divided into two to determine the medium and minimum periods. The Court laid out the periods as follows:

Minimum period - 17 years, 4 months, and 1 day to 18 years, 8 months; Medium period - 18 years, 8 months, and 1 day to 20 years; Maximum period - Reclusion perpetua

With no aggravating or mitigating circumstance present, the maximum of the indeterminate sentence must be taken from the medium period, that is, from eighteen years, eight months, and one day to twenty years. Applying the Indeterminate Sentence Law, the minimum penalty, which is one degree lower from the maximum imposable penalty, falls within the range of prision mayor maximum to reclusion temporal medium, or ten years and one day to seventeen years and four months. The Court thus concluded that the penalty imposed by the Sandiganbayan was proper and correct.

On the third issue, the Court held that in the service of their respective sentences, the petitioners are entitled to the benefit of the three-fold rule under Article 70 of the Revised Penal Code, as amended.

Doctrine

Malversation of public funds under Article 217, paragraph 4 of the Revised Penal Code, as amended, is punished by reclusion temporal in its maximum period to reclusion perpetua when the amount involved exceeds twenty-two thousand pesos, in addition to a fine equal to the funds malversed. When the penalty prescribed by law is not composed of three periods, the court must apply Article 65 and divide the time included in the penalty into three equal portions, forming one period for each portion. Because reclusion perpetua is indivisible, it is at once the maximum period, while reclusion temporal in its maximum period is divided into two to fix the medium and minimum periods. Absent any modifying circumstance, the maximum of the indeterminate sentence is taken from the medium period. Under the Indeterminate Sentence Law, the minimum is one degree lower than the maximum imposable penalty. Finally, a convict is entitled to the benefit of the three-fold rule under Article 70 in the service of his sentences.

Disposition

The motion for reconsideration was denied, and the petition for review on certiorari was denied for lack of merit. The conviction was affirmed with modification: in addition to the fine, the petitioners were ordered to pay, jointly and severally, to the Republic of the Philippines through the ARMM Regional Treasurer, the total amount of twenty-one million, forty-five thousand, five hundred seventy pesos and sixty-four centavos as restitution, with costs against the petitioners.

Remember This

Memorize this line: when the penalty is not composed of three periods, Article 65 requires dividing it into three equal portions, and since reclusion perpetua is indivisible, it is at once the maximum period. Examiners use this case to test the computation of the indeterminate sentence for malversation and the application of the three-fold rule.