G.R.Nos.16395758. April7,2009.

MUNIB S. ESTINO and ERNESTO G. PESCADERA, petitioners, vs. PEOPLE OF THE

PHILIPPINES,respondent.

G.R.Nos.16400911. April7,2009.*

ERNESTOG.PESCADERA,petitioner,vs.PEOPLEOFTHEPHILIPPINES,respondent.

Criminal Procedure New Trial NewlyDiscovered Evidence Remand of Cases Rule 121 of the
RulesofCourtallowstheconductofanewtrialbeforeajudgmentofconvictionbecomesfinalwhen
newandmaterialevidencehasbeendiscoveredwhichtheaccusedcouldnotwithreasonablediligence
havediscoveredandproducedatthetrialandwhichifintroducedandadmittedwouldprobablychange
the judgment, and although the documents offered by petitioners are strictly not newly discovered, it
appears to us that the accused were mistaken in their belief that its production during trial was
unnecessary.Weresolvetograntpetitionersachancetoprovetheirinnocencebyremandingthecase
totheSandiganbayanforanewtrialofCriminalCaseNo.26192.Rule121oftheRulesofCourtallows
the conduct of a new trial before a judgment of conviction becomes final when new and material
evidence has been discovered which the accused could not with reasonable diligence have discovered
and produced at the trial and which if introduced and admitted would probably change the judgment.
Although the documents offered by petitioners are strictly not newly discovered, it appears to us that
petitioners were mistaken in their belief that its production during trial was unnecessary. In their
Supplemental Motion and/or Motion for New Trial, they stressed that they no longer presented the
evidence of payment of RATA because Balabaran testified that the subject of the charge was the
nonpayment of benefits under the 1999 budget, without mention of the RATA nor the 1998 reenacted
budget. It seems that they were misled during trial. They were precluded from presenting pieces of
evidencethatmayproveactualpaymentoftheRATAunderthe1998reenactedbudgetbecausethe

_______________

*SECONDDIVISION.

305

VOL.584, 305
APRIL7,2009

Estinovs.People
 prosecutionsevidencewasconfinedtoallegednonpaymentofRATAunderthe1999budget.
Same Same Same Same Procedural Rules and Technicalities Procedural rules can be
suspendedifmattersoflife,liberty,honor,andpropertyareatstake.Wehavesettledthatprocedural
rules can be suspended if matters of life, liberty, honor, and property are at stake, thus: InGinetevs.
CourtofAppeals,wespecificallylaiddowntherangeofreasonswhichmayprovidejustificationsfora
courttoresistastrictadherencetoprocedureandsuspendtheenforcementofproceduralrules.Among
suchreasonsxxxare:(1)mattersoflife,liberty,honororproperty(2)counselsnegligencewithout
any participatory negligence on the part of the client (3) the existence of special or compelling
circumstances(4)themeritsofthecase(5)acausenotentirelyattributabletothefaultornegligence
of the party favored by the suspension of the rules and (6) a lack of any showing that the review
soughtismerelyfrivolousanddilatory.
Criminal Law Malversation of Public Funds The demand to account for public funds must be
addressedtotheaccountableofficer,notalettermadebytheProvincialAuditorrecommendingtothe
Chairperson of the Commission on Audit (COA) to require the Provincial Treasurer of Sulu to remit
all trust liabilities such as Government Service Insurance System (GSIS) premium/loans,
repayments/state insurance, Medicare and Pagibig Without a formal demand, the prima
faciepresumptionofconversionunderArt.217cannotbeapplied.WeagreewithPescaderathatthis
isnotthedemandcontemplatedbylaw.Thedemandtoaccountforpublicfundsmustbeaddressedto
the accountable officer. The abovecited letter was made by the Provincial Auditor recommending to
theChairpersonoftheCOAtorequiretheProvincialTreasurerofSulutoremitalltrustliabilitiessuch
asGSISpremium/loans,repayments/stateinsurance,MedicareandPagibig.Nowhereinthepleadings
didtheSpecialProsecutorrefutethelackofaformaldemanduponPescaderatoaccountfortheGSIS
premiums.Pescaderaevendeniesbeinginformedoftheconductoftheaudit,anassertionwhichwas
notrefutedbytheprosecution.ItcanbeconcludedthenthatPescaderawasnotgivenanopportunityto
explain why the GSIS premiums were not remitted. Without a formal demand, the prima
faciepresumptionofconversionunderArt.217cannotbeapplied.

306

306 SUPREME
COURT
REPORTS
ANNOTATED

Estinovs.People

SameSameElements.TheelementsofArt.217are:(1)theoffenderisapublicofficer,
(2)heorshehascustodyorcontrolofthefundsorpropertybyreasonofthedutiesofhisoffice,(3)
the funds or property are public funds or property for which the offender is accountable, and, most
importantly, (4) the offender has appropriated, taken, misappropriated or consented, or, through
abandonment or negligence, permitted another person to take them. The last and most important
elementofmalversationwasnotprovedinthiscase.ThereisnoproofthatPescaderausedtheGSIS
contributionsforhispersonalbenefit.Theprosecutionmerelyreliedonthepresumptionofmalversation
which we have already disproved due to lack of notice. Hence, the prosecution should have proven
actualmisappropriationbytheaccused.Pescadera,however,emphasizedthattheGSISpremiumswere
applied in the meantime to the salary differentials and loan obligations of Sulu, that is, the GSIS
premiumswereappropriatedtoanotherpublicuse.Thus,therewasnomisappropriationofthepublic
funds for his own benefit. And since the charge lacks one element, we set aside the conviction of
Pescadera.
TINGA,J.,DissentingOpinion:
CriminalLawEvidenceConvictedfelonswillnotpassupthechancetomanufactureexculpatory
evidence created in reaction to the decision that convicted them.The new evidence which accused
desire to introduce is uncomfortably precise, oriented as it is to rebut the justifications cited by the
Sandiganbayan to convict them. Convicted felons will not pass up the chance to manufacture
exculpatoryevidencecreatedinreactiontothedecisionthatconvictedthem.

PETITIONSforreviewoncertiorariofthedecisionandresolutionoftheSandiganbayan.
ThefactsarestatedintheopinionoftheCourt.
PeteQuirinoQuadraforpetitioners.
JuanClimacoP.ElagoIIforAbdulkadilEstino.

307

VOL.584,APRIL7, 307
2009
Estinovs.People

VELASCO,JR., J.:
For review before the Court under Rule 45 are the April 16, 2004 Decision1and June 14,
2004 Resolution2 of the Sandiganbayan in the consolidated Criminal Case Nos. 26192 and
26193 entitledPeople of the Philippines v. Munib S. Estino and Ernesto G. Pescadera. In
G.R. Nos. 16395758, petitioners Munib S. Estino and Ernesto G. Pescadera appeal their
conviction of violation of Section 3(e), Republic Act No. (RA) 3019 or the AntiGraft and
Corrupt Practices Act for failure to pay the Representation and Transportation Allowance
(RATA) of the provincial government employees of Sulu. In G.R. Nos. 16400911, petitioner
PescaderaaloneappealshisconvictionofmalversationofpublicfundsunderArticle217ofthe
Revised Penal Code for failure to remit the Government Service Insurance System (GSIS)
contributionsoftheprovincialgovernmentemployeesamountingtoPhP4,820,365.30.Inthese
consolidatedappeals,petitionersprayfortheiracquittal.

TheFacts

Estino was elected ViceGovernor of Sulu in the May 1998 elections along with Gov.
Abdusakur Tan. On June 23, 1998, this Court issued astatusquoorder in G.R. No. 133676,
suspendingtheeffectsoftheproclamationofGov.TanandorderingViceGov.Estinotoassume
thepositionofGovernoruntilfurtherorders.Thus,EstinoactedasGovernorofSulufromJuly27,
1998uptoMay23,1999whenthisCourtliftedthesuspensionorderagainstGov.Tan.Ernesto
G.Pescadera,ontheotherhand,wasProvincialTreasurerofSuluduringEstinosstintasActing
Governor.3

_______________
 1Rollo(G.R.Nos.16395758),pp.3967.PennedbyAssociateJusticeNorbertoY.Geraldezandconcurred
inbyAssociateJusticesGregoryS.OngandEfrenN.delaCruz.
2Id.,atpp.220221.
3Rollo(G.R.Nos.16400911),p.197.

308

308 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

Pursuant to Commission on Audit (COA)ARMM Office Order No. 99165 dated August
26, 1999, a special audit team was created upon the request of the Provincial Government of
Sulu.AnauditofthedisbursementvouchersandpayrollsfortheperiodstartingJuly27,1998up
to May 23, 1999 was then conducted by COA State Auditor II Mona U. Balabaran and her
team.TheCOASpecialAuditReportstatedthattherewereanomaliesinthepaymentofsalary
differentials, allowances, and benefits, among others. The Ombudsman then filed three
informationsagainstpetitioners,asfollows:

CRIMINALCASENO.26192
That sometime in or about January to May 1999, or shortly prior or subsequent thereto, in Jolo,
Sulu and within the jurisdiction of this Honorable Court, accused Munib S. Estino and Ernesto G.
Pescadera,bothhighrankingpublicofficers,beingtheViceGovernorandProvincialTreasurerofSulu,
respectively,takingadvantageoftheirofficialpositionsandactinginrelationtotheirofficialfunctions,
conspiring and confederating with each other, did there and then willfully, unlawfully and feloniously,
causeundueinjurytotheemployeesoftheProvincialGovernmentofSuluthroughevidentbadfaithby
failing to pay them their salary differentials, Additional Compensation Allowance (ACA), Personal
EmergencyandRepresentationAllowance(PERA),RepresentationandTravelAllowance(RATA),Mid
yearBonus,CashGiftandClothingAllowanceinthetotalamountofP8,435,625.34.
CONTRARYTOLAW.
CRIMINALCASENO.26193
ThatsometimeinoraboutJuly1998toMay1999,orshortlypriororsubsequentthereto,inJolo,
Sulu and within the jurisdiction of this Honorable Court, accused Munib S. Estino and Ernesto G.
Pescadera,bothhighrankingpublicofficers,beingtheViceGovernorandProvincialTreasurerofSulu,
respectively,takingadvantageoftheirofficialpositionsandactinginrelationtotheirofficialfunctions,
conspiringandconfederatingwitheachother,didthereandthen,willfully,unlawfullyandfeloniously,
take,convertandmisappropriatetheGSISmonthlycontributionsandloanamortizationscollectedfrom
theprovincialemployeesintheamountof

309

VOL.584,APRIL7, 309
2009
Estinovs.People

P4,820,365.30 for their own personal benefit or advantage to the damage and prejudice of the said
employeesandthegovernmentaswell.
CONTRARYTOLAW.
CRIMINALCASENO.26194
That sometime in or about May 1999, or shortly prior or subsequent thereto, in Jolo, Sulu and
within the jurisdiction of this Honorable Court, accused Munib S. Estino and Ernesto G. Pescadera,
both high ranking public officers, being the Vice Governor and Provincial Treasurer of Sulu,
respectively,takingadvantageoftheirofficialpositionsandactinginrelationtotheirofficialfunctions,
conspiringandconfederatingwitheachother,didthereandthen,willfully,unlawfullyandfeloniously,
cause undue injury to the government through evident bad faith by withdrawing from Philippine
National BankJolo Branch the amount of P21.5 million on 07 May 1999 out of the Internal Revenue
Allotment of P28,268,578.00 which was deposited to the account of Sulu Provincial Government on
thesamedayandusingthesaidamounttopayvariousexpenseswithout,however,specifyingwhat
theexpensesareinviolationofexistinggovernmentaccountingrules.
CONTRARYTOLAW.4

Petitionerspleadednotguiltytotheoffenseschargedintheinformations.

CriminalCaseNo.26192

DuringtrialintheSandiganbayan,Balabarantestifiedthatbasedonthedisbursementvouchers
and payrolls she and her team examined for the period January to May 1999, the Provincial
Government of Sulu failed to pay the provincial government employees their salary differentials,
AdditionalCompensationAllowance(ACA),PersonalEmergencyandRepresentationAllowance
(PERA),andotherbenefitsthattheDepartmentofBudgetandManagementconfirmedtothe

_______________

4Rollo(G.R.Nos.16395758),pp.4041.

310

310 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

specialauditteamthatfundswerereleasedtotheProvincialGovernmentofSuluforJanuaryto
May1999sotherewasnoreasonwhythemoneywasnotreleasedtotheemployeesandthat
thefundsreleasedcamefromtheinternalrevenueallotment(IRA)oftheprovincialgovernmentfor
the1999budget.TheprosecutionsubmittedthatthisfailureviolatedSec.3(e)ofRA3019which
provides:

Section 3. Corrupt practices of public officers.In addition to acts or omissions of public

officersalreadypenalizedbyexistinglaw,thefollowingshallconstitutecorruptpracticesofanypublic
officerandareherebydeclaredtobeunlawful:
xxxx
(e) Causinganyundueinjurytoanyparty,includingtheGovernment,orgivinganyprivateparty
any unwarranted benefits, advantage or preference in the discharge of his official administrative or
judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This
provisionshallapplytoofficersandemployeesofofficesorgovernmentcorporationschargedwiththe
grantoflicensesorpermitsorotherconcessions.

In his defense, Estino testified that when he assumed office as Acting Governor of Sulu, he
calledforageneralmeetingofalltheheadsofdepartments,aswellasofficialsandemployeesto
informthemthattheremainingmoneyoftheprovincialgovernmentwasPhP47only.Hefurther
informedthemofthependingamortizationfortheloanfromthePhilippineNationalBank(PNB)
payablefromApriltoJune1998,andsuggestedthatthesalarydifferentialsofallthegovernment
employees be paid first while the GSIS remittance be deferred since the pending IRA for the
provincialgovernmentwasnotyetreleased.AstotheACA,PERA,andclothingallowance,he
saidthatthesewerenotpaidbecausethebudgetfor1999wasnotyetapprovedandtherewas
noprovisionforthoseitemsinthe1998budget.Thebudgetfor1999wasapprovedonlyonJune
17,1999whenEstinowasnolongertheActingGovernor.TheRATA,ontheotherhand,was
providedforin

311

VOL.584,APRIL7, 311
2009
Estinovs.People

the1998budgethence,the1998budgetwasusedinpayingtheRATA.5
Pescaderatestifiedthattheemployeesbenefitswerenotpaidbecausethe1999budgetwas
notyetapprovedthen.Also,hesaidthattherewasnoappropriationforACAandPERAinthe
1998budgetthattheRATAfor1999waspaidthatthecashgift,midyearbonus,andclothing
allowancefortheperiodJanuarytoMay1999werenotpaidastheseweresupposedtobepaid
inDecember1999andthathewastheProvincialTreasurerofSuluuptoMay1999only.6
The Sandiganbayan found petitioners not guilty with regard to the charge of nonpayment of
PERA, ACA, cash gift, midyear bonus, and clothing allowance. The court found that the
Provincial Government of Sulu did operate under the 1998 reenacted budget which had no
appropriationforPERAandACA.PetitionerswerenotheldliablefornonpaymentoftheYear
EndBonusandCashGiftbecausethesemaybegivenfromMay1toMay31ofeachyear,while
Estino held office as Acting Governor until May 23, 1999 and Pescadera was the Provincial
TreasureruntilMay1999.Astotheclothingallowance,noevidencewaspresentedastowhenit
shouldbegiventotheemployees.PaymentforthesalarydifferentialsforJanuarytoMay1999
couldnotalsobedonesincethe1999budgetwasnotyetapproved.7
As regards the RATA, the Sandiganbayan held that petitioners defense of payment was an
affirmativeallegationthatrequiredproof.Thecourtstated:

xxx[N]oconvincingevidencewaspresentedbythedefensetosupporttheirclaimthattheypaid
the same. Although accused Pescadera testified that Exhibits 3O to 3T, 3W, 3X, 3HH
and3IIwerevouchersshowingpaymentofRATAforthemonthof

_______________

5Id.,atp .44.
6Id.,atp .45.
 7Id.,atp .47.

312

312 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

May1999forvariousofficersoftheProvincialGovernmentofSulu,thesamewerenotsignedbythe
claimantsthereof.
ThereisbudgetforthepaymentofRATA.TheIRApertainingtotheprovincewasregularlyreleased.
The nonpayment thereof constitutes a conscious and deliberate intent to perpetrate an injustice to the
officialsoftheProvincialGovernmentofSulu.Evidentbadfaiththereforeexists.
xxxx
Intheinstantcase,failuretopaytheRATAconstitutesaninactionwhichcausedactualdamagetothe
officials entitled thereto, the amount of which was equivalent to the actual amount of the RATA that
wasduethemfortheperiodJanuarytoMay1999.
The information alleged that the two accused committed this offense by conspiring and confederating
with each other. In conspiracy, it is essential that there must be unity of purpose and unity in the
execution of the unlawful objective. These were present in the instant case. Both accused knew that
theyfailedtopaytheRATAtotheofficersentitledthereto.8

TheaforesaidjudgmentisthesubjectoftheappealdocketedasG.R.Nos.16395758.

CriminalCaseNo.26193

AuditorBalabarantestifiedthattheGSISpremiumsforthegovernmentandpersonalshareof
officialsandemployeesoftheProvincialGovernmentofSuluweredeductedfromtheirsalaries,
butuponconfirmationwiththeBranchManageroftheGSISinJolo,theauditteamlearnedthat
theGSISpremiumswerenotremitted.AccordingtoEstino,however,theauditreportsshowed
that he and Pescadera did not malverse the funds of the Provincial Government. In addition,
Pescadera testified that when Estino assumed office as Acting Governor, the Provincial
Government of Sulu was already indebted to the GSIS for its failure to remit the said GSIS
monthlyremittanceswhichamountedtoPhP4million.

_______________

8Id.,atpp.4849.

313

VOL.584,APRIL7, 313
2009
Estinovs.People

Pescadera stated that Estino called a general assembly of all the officers and employees of the
provincial government to discuss the cash operation of Sulu. In that meeting, the officers and
employeesdecidedtoprioritizethepaymentofthesalarydifferentialsfirst,followedbytheloan
amortization to the PNB, and lastly, the GSIS remittances. Pescadera added that the provincial
governmentintendedtopayorremittheaccruedGSISmonthlyremittancesassoonasthecash
positionoftheprovinceimprovesandthe10%oftheIRAisreleased.9
Before the Sandiganbayan, the prosecution charged petitioners with malversation of public
fundsunderArt.217oftheRevisedPenalCode.TheSandiganbayanconsequentlyexonerated
EstinobutconvictedPescadera.Thecourtheld:

In the case at bar, there was evidence that GSIS contributions for the period July 1998 to May
1999 consisting of employee share and loan amortizations were deducted from the salaries of the
employees of the province. The 1998 reenacted budget provided for GSIS Premiums (Government
Share) and the IRA for the province was regularly released by the DBM. These GSIS contributions
werenotremitted.InfactcontrarytoaccusedEstinosclaim,ProvincialAuditorNoraA.Imlanstated
inher1998and1999AnnualAuditReportthattheProvinceofSuluhadunremittedGSIScontributions
forCY1998and1999.
Accused Pescadera, being then the Provincial Treasurer, was the public officer charged with the
disbursement of GSIS funds for remittance to the GSIS. He failed to disburse and to remit it to the
GSISatthetimeitbecamedue.HefailedtoaccountforitupondemandbyProvincialAuditorNoraA.
ImlanandbytheSpecialAuditTeam.Itisnowincumbentupontheaccusedtorebutthepresumption
ofconversion.
xxxx
However,noevidencewaspresentedtosupporttheclaimthattheemployeesagreedtoprioritizethe
paymentofPNBloanamortization.Evenifthereweresuchanagreement,itwouldstillbecont

_______________

9Id.,atp p .4950.

314

314 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

rary to Section 6(b) of the Government Service Insurance System Act of 1997 (R.A. 8291) which
provides:
EachemployershallremitdirectlytotheGSIStheemployeesandemployerscontributions
within the first ten (10) days of the calendar month to which the contributions apply. The
remittance by the employer of the contributions to the GSIS shall take priority over and above
thepaymentofanyandallobligations,exceptsalariesandwagesofitsemployees.
Insufficiency of funds of the province is not a valid defense. The fact remained that the GSIS
contributions consisting of employee share and loan amortizations were deducted from the salaries of
theemployees.
Whileitwastruethatthebudgetfor1999wasapprovedonlyonJune2,1999,itwasalsotruethat
onJanuarytoMay1999,theprovinceofSuluoperatedunderthe1998reenactedbudget.Further,the
reenactedbudgetprovidedforGSISPremiums(GovernmentShare).TheDBMletterdatedOctober28,
1999 (Exhibit A39) and Summary of Releases of IRA for July 1998 to May 1999 (Exhibit A40)
clearlyshowedthattheIRApertainingtotheprovincewasregularlyreleased.
Moreover,prosecutionwitnessMonaBalabarancorrectlytestifiedthattheTrialBalance,Journalof
ChecksIssuedandReportofChecksIssuedshowedonlythesumtotalofallthemoneytransactionsof
theProvinceofSulu.Thesereportsdidnotcontainthecashstatusvisvisthemandatoryobligations
andthedetailsonwherethefundoftheprovincewasspent.Clearly,accusedPescaderawasnotable
torebutthepresumptionofconversion.10

With respect to Estino, however, the Sandiganbayan did not find any conspiracy with
Pescadera. The court held that it was Pescaderas duty as the Provincial Treasurer to advise
Estino, then Acting Governor, and other local government officials regarding the disposition of
localgovernmentfundsandothermattersrelatedtopublicfinance.ItwasfoundthatPescadera
failedtoinformEstinothattheGSIScontributionsmustberemitteddirectlytotheGSISwithinthe
first10days

_______________

10Id.,atpp.5456.

315

VOL.584,APRIL7, 315
2009
Estinovs.People

of the calendar month following the month to which the contributions apply.11 Also, the
Sandiganbayan explained that even if Estino was Pescaderas cosignatory in the checks, mere
signature or approval is not enough to sustain a finding of conspiracy, based on Sabiniano v.
CourtofAppeals.12
PescaderasappealofhisconvictionisthesubjectofG.R.Nos.16400911.

CriminalCaseNo.26194

Anent the last charge, Balabaran testified that internal control was violated when petitioners
signed the vouchers without the signature of Provincial Accountant Nestor Lozano. As a result,
thetransactionswerenotrecordedinthebookofaccounts.Shefurtherstatedthattheamountof
cashinthetrialbalancewasoverstated.Theauditteamdidnotexaminethemonthlytrialbalance,
thejournalandanalysisofobligations,thejournalofchecksissued,thereportofchecksissued,
andthejournalofcashdisbursementbecauseallthesedocumentsmerelycontainedthesumtotal,
whereasthedisbursementvouchersandpayrollsstatedtheparticulartransactionsthattranspired
whichcouldhelpthemdiscoveranyanomaly.13
PetitionerswerechargedwithviolationofRA3019,Sec.3(e).Inhisdefense,Estinotestified
that the disbursement vouchers for the PhP 21.5 million cash advances he approved were
supported with documents that the 5% of the 10% retention of the IRA of the national
governmentwaspaidonlyinMay2002andthathewasauthorizedbytheProvincialBoardto
withdrawPhP21.5milliononMay7,1999.Pescadera,ontheotherhand,testifiedthatthecash
advances amounting to PhP 21.5 million from the PNB was accompanied by vouchers and
supportingdocumentsthatthesaid
_______________

11Id.,atpp.5657.
12G.R.No.76490,October6,1995,249SCRA24.
13Rollo(G.R.Nos.16395758),pp.5758.

316

316 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

amount was used in paying specific obligations of the Provincial Government of Sulu that the
signatureoftheprovincialaccountantdidnotappearonthecashadvancesandvouchersbecause
during the withdrawal of the amounts, the provincial accountant was out of town and that the
provincialauditorofSuluallowedsaidcashadvances.14
RA 3019, Sec. 3(e) has three elements: (1) the accused is a public officer discharging
administrative, judicial, or official functions (2) the accused must have acted with manifest
partiality, evident bad faith, or inexcusable negligence and (3) the accuseds action caused any
undue injury to any party, including the government, or giving any private party unwarranted
benefits,advantage,orpreferenceinthedischargeofhisorherfunctions.
TheSandiganbayanfoundonlythefirsttwoelementsinthiscase.First,petitionerswerepublic
officers at the time in question.Second, bad faith was evident in petitioners act of withdrawing
amounts without the signature of the provincial accountant. This violated Sec. 344 of the Local
Government Code and Secs. 157 and 168 of the Government Accounting and Auditing
Manual.Nevertheless,thegovernmentdidnotsufferactualdamagesfromthewithdrawalofPhP
21.5 million. While said cash advances did not specify the particulars of payment, the
documentary exhibits attached to the cash advances, i.e., disbursement vouchers, Request for
ObligationofAllotment,SummaryofPayrolls,TimeBook,andPayrolls,sufficientlyitemizedthe
obligationstobepaidbythecashadvances.Sincetheprosecutionfailedtoproveanydamageor
injurytotheProvincialGovernmentofSulu,petitionerswereacquittedofthecrimecharged.15

_______________

14Id.,atp.58.
15Id.,atpp.5965.

317

VOL.584,APRIL7, 317
2009
Estinovs.People

TheRulingoftheSandiganbayan
ThedispositiveportionoftheSandiganbayansApril16,2004judgmentreads:
WHEREFORE:
I. InCriminal Case No. 26192, the Court finds accused MUNIB S. ESTINO and ERNESTO G.
PESCADERA, both GUILTY, beyond reasonable doubt, for violation of Sec. 3(e) of R.A. 3019, and
pursuanttoSection9thereof,andareherebysentencedtosufferthepenaltyof:
(A) Imprisonmentof,afterapplyingtheIndeterminateSentenceLaw,six(6)yearsandone(1)month
asminimum,uptofifteen(15)years,asmaximumand,
(B) PerpetualDisqualificationfromPublicOffice.
II. InCriminal Case No. 26193, this Court finds accusedERNESTO G. PESCADERA, GUILTY,
beyond reasonable doubt, of the crime of malversation of public funds, and is hereby sentenced to
sufferthepenaltyof:
(A) Imprisonment of, after applying the Indeterminate Sentence Law, twelve (12) years, five (5)
months and eleven (11) days of reclusion temporal, as minimum, up to twenty years (20) years
ofreclusionperpetua,asmaximum
(B) PerpetualSpecialDisqualification
(C) Fine of FOUR MILLION EIGHT HUNDRED TWENTY THOUSAND THREE HUNDRED
SIXTYFIVEPESOSANDTHIRTYCENTAVOS(Php4,820,365.30),withsubsidiaryimprisonmentin
caseofinsolvency
(D) Alltheaccessorypenaltiesprovidedforunderthelawand,
(E) Topaythecostofthesuit.
Accused PESCADERA is likewise ordered to restitute the amount of FOUR MILLION EIGHT
HUNDRED TWENTY THOUSAND THREE HUNDRED SIXTYFIVE PESOS AND THIRTY
CENTAVOS(Php4,820,365.30)totheProvincialGovernmentofSulu.

318

318 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

With respect to MUNIB S. ESTINO, for failure of the Prosecution to prove his [guilt] beyond
reasonabledoubt,heisherebyorderedACQUITTEDofthecrimeofmalversationofpublicfunds.
III. InCriminalCaseNo.26194,forfailureoftheProsecutiontoprovetheguiltofaccusedMUNIB
S. ESTINO and ERNESTO G. PESCADERA beyond reasonable doubt, both accused are hereby
orderedACQUITTED.16

PetitionersfiledaMotionforReconsiderationandaSupplementalMotionforReconsideration
and New Trial which were denied in the June 14, 2004 Sandiganbayan Resolution. Thus, they
filedthesepetitions.

TheIssues
WHETHER OR NOT PETITIONERS FAILED TO PAY THE RATA AND ARE THUS GUILTY OF
VIOLATINGSEC.3(e)OFRA3019
WHETHER OR NOT PETITIONER PESCADERA IS GUILTY OF MALVERSATION OF PUBLIC
FUNDSFORFAILURETOREMITTHEGSISCONTRIBUTIONS

TheCourtsRuling

G.R.Nos.16395758
 PetitionersEstinoandPescaderapointoutthatthebasisoftheinformationforCriminalCase
No.26192wastheCOAReport,whichreads:

2. On the allegation that no payments were intended for the salary differentials, ACA,
PERA and other benefits of employees of the Provincial Government of Sulu for the period
coveredfromJanuary,1999toMay,1999
It was noted that no benefits were paid to the employees of Sulu Provincial Office for the period
coveredfromJanuary,1999toMay,1999basedonthesubmittedpaiddisbursementvouchers(Annex
E).

_______________

16Id.,atp p .6566.

319

VOL.584,APRIL7, 319
2009
Estinovs.People

For the month of May 1999, the Provincial Government of Sulu received a total allotment
ofP28,268,587.00, which includes January, 1999 to April, 1999 releases for IRA differentials (See
AnnexB).Theamountintendedforthesaidbenefitsweredisbursedotherthanspecificpurposefor
whichtheseareappropriated(AnnexC).17

PetitionersnotethattheCOAReportdoesnotstatethattheydidnotpaytheRATAunderthe
reenacted budget of 1998. The prosecution witness, Auditor Balabaran, testified that the COA
ReportpertainstothenonpaymentofACA,PERA,andotherbenefitsprovidedforinthe1999
budget.The1999budget,however,wasnotapprovedduringtheincumbencyofEstinoasActing
Governor.InthecrossexaminationofBalabaran,shetestifiedasfollows:
CROSSEXAM INATION:
(Atty.Quadra)
Q. Ishowtoyou,M adamWitness,yourAuditReportdatedJanuary12,2000,andIcallyourattentiononthe
findinginpage5thereofwhichreads:Ontheallegationthatnopaymentsweremadeintendedforthesalary
[differentials],ACA,PERA,andotherbenefitsoftheemployeesoftheProvincialGovernmentofSulufor
theperiodcoveredfromJanuary1999toM ay1999.Now,itisstatedherethatnopaymentsofthesaid
benefits of the employees were made from January 1999 to M ay 1999. M y question is, when you said
benefits of the employees you are referring to the benefits of the employees provided for in the 1999
Budget?PleasegooverthisReport.
(Witnesslookingatthedocument)
A. Youwantmetoexplain?
AJPalattao: Whatbenefitareyoureferring?
A. Wearereferringtothebenefitsthatwastobepaid,yourHonor,theACA,thePERA,andtheotherbenefits.

_______________

17Id.,atp.226.

320
 320 SUPREME
COURT
REPORTS
ANNOTATED
Estinovs.People

Q. Yes,andthosebenefitsthatyouarereferringtoarethebenefitsprovidedforintheAnnualBudgetforthe
Year1999?
AJPalattao: Areyoureferringtoabenefitgrantedtotheemployeesunderthe1999AnnualBudget?Yesorno?
A. Thebenefitsthatareintendedtotheemployeesfortheyear1999.
Q. 1999.Youarenotreferringtothebenefitsoftheemployeesprovidedforinthe1998budget?
A. Yes,itisveryclear,January1999toM ay1999.
Q. Itisonlyin1999?
A. Yes,Sir.[TSN,p.5December6,2000] 18

PetitionersinsistthatthereisenoughevidencetoshowthattheRATAprovidedforinthe1998
reenactedbudgetwaspaidfortheperiodJanuarytoMay1999.IntheirSupplementalMotionfor
Reconsideration and Motion for New Trial, petitioners presented to the Sandiganbayan a
CertificationdatedMay11,2002issuedbytheProvincialAuditorAbdurasadJ.Undain,stating
thattheRATAfortheperiodJanuarytoMay1999waspaidtotheofficialsentitledtoitandthat
theGSISpremiumspertainingtoprioryearswerealsosettledbytheProvincialGovernmentof
Sulu. In support of this certification, petitioners submitted sworn statements of the provincial
officialsentitledtoRATA,statingthattheywerepaidsuchallowancefromJanuarytoMay1999
and that they did not have any complaint to its alleged nonpayment.19 They also submitted 99
certified true copies of the Disbursement Vouchers showing the payment of the RATA from
January to May 1999 provided for in the 1998 reenacted budget. Petitioners presented these
vouchers only in their Supplemental Motion for Reconsideration and/or Motion for New Trial
allegedlybecausetheythoughtthattheCOAReportpertainedonlytothebenefitsprovidedinand
tobepaidwith

_______________

18Id.,atpp.2223.
19Id.,atpp.2429.

321

VOL.584,APRIL7, 321
2009
Estinovs.People

the 1999 budget. They may have been misled when Auditor Balabaran did not testify on the
allegednonpaymentoftheRATAforJanuarytoMay1999withthereenactedbudgetof1998.
AnenttheSandiganbayansfindingthatthevouchersshowingpaymentofRATAforMay1999
were not signed by the claimants, petitioners explain that the actual release of RATA is the
responsibilityofthecashieroftheprovince.Petitionersclaimthattheycouldnotbefaultedforthe
failure of the cashier to require the claimants to sign the receipt of payment. Furthermore, the
claimants in Exhibits 3O to 3T, 3W, 3X, 3HH, and 3II all executed sworn
statementsthattheyreceivedtheirRATA.
Petitioners further point out that the Sandiganbayan justices who heard and tried their case
were not the ones who rendered the questioned decision. The trial was conducted by Justices
NarcisoS.Nario,RodolfoG.Palattao,andNicodemoT.Ferrer,whilethedecisionwasrendered
byJusticesGregoryT.Ong,NorbertoY.Geraldez,andEfrenN.delaCruz.
On the other hand, the Office of the Special Prosecutor asserts that the petition should be
dismissedbecauseitraisesquestionsoffactnotproperinanappealbycertiorari.Italsoasserts
the following: Even if the petition is given due course, there are factual and legal bases for the
conviction. Although the term RATA was not mentioned in the COA Report, said allowance
wascontemplatedbytheauditorsintheiruseofthetermbenefits.Also,theswornstatementsof
theofficialsontheirreceiptoftheRATAandthecertificationoftheProvincialAuditortotheeffect
that the RATA has been paid are belated and unsubstantiated. These were submitted only in
petitionersSupplementalMotionforReconsideration,thusimplyingthatpaymentsoftheRATA
were made after the conviction of petitioners. Likewise, the unsigned disbursement vouchers
deservenomeritbecause of the irregularities in these documents. Some do notbearthedorsal
portionofthevouchersorthesignatureoftheProvincialAuditor,while

322

322 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

othersweresignedbypersonsotherthantheclaimantswithoutanyproofoftheirauthorityfrom
theprincipals.ThevouchersalsoshowthattheRATAwaspaidincashinsteadofthroughchecks
inviolationofPresidentialDecreeNo.1445.

TheCaseShouldbeRemandedtotheSandiganbayan

Petitioners defense is anchored on their payment of RATA, and for this purpose, they
submitted documents which allegedly show that they paid the RATA under the 1998 reenacted
budget.TheyalsoclaimthattheCOAReportdidnotsufficientlyprovethattheydidnotpaythe
RATA because the alleged disbursement vouchers, which were supposed to be annexed to the
COAReportasproofofnonpaymentofRATA,werenotsubmittedwithsaidreport.
Weresolvetograntpetitionersachancetoprovetheirinnocencebyremandingthecasetothe
Sandiganbayan for a new trial of Criminal Case No. 26192. Rule 121 of the Rules of Court
allowstheconductofanewtrialbeforeajudgmentofconvictionbecomesfinalwhennewand
material evidence has been discovered which the accused could not with reasonable diligence
havediscoveredandproducedatthetrialandwhichifintroducedandadmittedwouldprobably
change the judgment.20 Although the documents offered by petitioners are strictly not newly
discovered,itappearstousthatpetitionersweremistakenintheirbeliefthatitsproductionduring
trial

_______________

20RulesofCourt,Rule121,Sec.2provides:
 SEC. 2. Groundsforanewtrial.Thecourtshallgrantanewtrialonanyofthefollowinggrounds:
(a) Thaterrorsoflaworirregularitiesprejudicialtothesubstantialrightsoftheaccusedhavebeen
committedduringthetrial
(b) That new and material evidence has been discovered which the accused could not with
reasonablediligencehavediscoveredandproducedatthetrialandwhichifintroducedandadmitted
wouldprobablychangethejudgment.

323

VOL.584,APRIL7, 323
2009
Estinovs.People

wasunnecessary.IntheirSupplementalMotionand/orMotionforNewTrial,theystressedthat
theynolongerpresentedtheevidenceofpaymentofRATAbecauseBalabarantestifiedthatthe
subjectofthechargewasthenonpaymentofbenefitsunderthe1999budget,withoutmentionof
theRATAnorthe1998reenactedbudget.Itseemsthattheyweremisledduringtrial.Theywere
precludedfrompresentingpiecesofevidencethatmayproveactualpaymentoftheRATAunder
the 1998 reenacted budget because the prosecutions evidence was confined to alleged
nonpaymentofRATAunderthe1999budget.
Inthisinstance,weareinclinedtogiveamorelenientinterpretationofRule121,Sec.2on
newtrialinviewofthespecialcircumstancessufficienttocastdoubtastothetruthofthecharges
against petitioners. The situation of the petitioners is peculiar, since they were precluded from
presentingexculpatoryevidenceduringtrialuponthehonestbeliefthattheywerebeingtriedfor
nonpaymentofRATAunderthe1999budget.Thisbeliefwasbasedonnolessthanthetestimony
of the prosecutions lone witness, COA Auditor Mona Balabaran. Even Associate Justice
PalattaooftheSandiganbayanhadtoclarifyfromBalabaranwhichbudgetshewasreferringto.
Balaraban, however, made it very clear that the unpaid benefits were those provided under the
1999budget,towit:
AJPalattao: Areyoureferringtoabenefitgrantedtotheemployeesunderthe1999AnnualBudget?Yesorno?
A. Thebenefitsthatareintendedtotheemployeesfortheyear1999.
Q. 1999.Youarenotreferringtothebenefitsoftheemployeesprovidedforinthe1998budget?
A. Yes,itisveryclear,January1999toM ay1999.
Q. Itisonlyin1999?

324

324 SUPREME
COURT
REPORTS
ANNOTATED
Estinovs.People

A. Yes,Sir.[TSN,p.5December6,2000] 21(Emphasissupplied.)

Fromtheforegoingdiscourse,itisunderstandablehowpetitionerscouldhavethoughtthatthey
need not present any more evidence to prove payment of the RATA under the 1998 budget.
Apparently,theCOAAuditorwhopreparedthereportandtestifiedonitestablishedthatthetrial
wasaboutnonpaymentofbenefitsunderthe1999budget.Thatbudgetwasnotapprovedduring
petitionersstintinSulu.Facedwithconviction,nevertheless,theydeserveachancetoprovetheir
innocence.Thisopportunitymustbemadeavailabletotheaccusedineverypossiblewayinthe
interestofjustice.Hence,petitionersshouldbeallowedtoprovetheauthenticityofthevouchers
theysubmittedandotherdocumentsthatmayabsolvethem.Aremandofthecaseforanewtrial
is in order. This procedure will likewise grant the prosecution equal opportunity to rebut
petitionersevidence.
In granting petitioners motion for new trial, we reiterate our pronouncement in Cano v.
People:

Itisxxxequallysettledthatrulesofprocedurearenottobeappliedinaveryrigid,technicalsense
andareusedonlytohelpsecuresubstantialjustice.Ifatechnicalandrigidenforcementoftherulesis
made,theiraimwouldbedefeated.Theyshouldbeliberallyconstruedsothatlitigantscanhaveample
opportunitytoprovetheirclaimsandthuspreventadenialofjusticeduetotechnicalities.22

More importantly, we have settled that procedural rules can be suspended if matters of life,
liberty,honor,andpropertyareatstake,thus:

InGinetevs.CourtofAppeals,wespecificallylaiddowntherangeofreasonswhichmayprovide
justificationsforacourttoresistastrictadherencetoprocedureandsuspendtheenforcementof

_______________

21Supranote18.
22G.R.No.155258,October7,2003,413SCRA92,98.

325

VOL.584,APRIL7, 325
2009
Estinovs.People

procedural rules. Among such reasons x x x are: (1) matters of life, liberty, honor or property (2)
counselsnegligencewithoutanyparticipatorynegligenceonthepartoftheclient(3)theexistenceof
specialorcompellingcircumstances(4)themeritsofthecase(5)acausenotentirelyattributableto
the fault or negligence of the party favored by the suspension of the rules and (6) a lack of any
showingthatthereviewsoughtismerelyfrivolousanddilatory.23

Wehavealsoheldthat:

Unquestionably,theCourthasthepowertosuspendproceduralrulesintheexerciseofitsinherent
power,asexpresslyrecognizedintheConstitution,topromulgaterulesconcerningpleading,practice
and procedure in all courts. In proper cases, procedural rules may be relaxed or suspended in the
interest of substantial justice, which otherwise may be miscarried because of a rigid and formalistic
adherencetosuchrules.xxx
xxxx
Wehavemadesimilarrulingsinothercases,thus:
Beitrememberedthatrulesofprocedurearebutmeretoolsdesignedtofacilitatetheattainmentof
justice.Theirstrictandrigidapplication,whichwouldresultintechnicalitiesthattendtofrustraterather
than promote substantial justice, must always be avoided. x x x Time and again, this Court has
suspended its own rules and excepted a particular case from their operation whenever the higher
interestsofjusticesorequire.24

WhiletheinformationstatesthattheaccusedfailedtopaytheRATAsometimeinoraboutJanuary
to May 1999, there was no mention which budget the RATA was supposed to be sourced.
PetitionersreliedontheCOAAuditorstestimonythattheywerebeingtriedfornonpaymentof
benefitsunder

_______________

23PhilippineEconomicZoneAuthorityv.GeneralMillingCorporation,G.R.No.131276,August2,2005
(EnBancResolution).
24Agotev.Lorenzo,G.R.No.142675,July22,2005,464SCRA60,6970citingSolicitorGeneral,etal.v.
TheMetropolitanManilaAuthority,G.R.No.102782,December11,1991,204SCRA837,842843.

326

326 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

the1999budget.TheSpecialAuditReportdoesnotalsodistinguishthebudgetsourcebutupon
the testimony of Balabaran, it was established that the source was the 1999 budget. Balabaran
verifiedthiswhencrossexaminedbySandiganbayanJusticePalattao.Thisdistinctionismaterial
becauseconvictionoracquittaldependsonwhichbudgetsourcetheinformationreferredto.Thus,
even if the 1998 budget was automatically reenacted in 1999, if the trial was clearly about the
nonpaymentofbenefitsunderthe1999budgetasestablishedbytheprosecution,thenpetitioners
couldnotbefaultedforproceedingaccordingly.Theprosecutioncouldhavebeenclearerabout
thebudgetsourcethroughredirectexaminationofBalabaranbutitdidnotchoosetodoso.As
always in criminal cases, the burden is on the prosecution to establish guilt beyond reasonable
doubt based on sufficient information. It is not the responsibility of the accused to produce
exculpatory evidence in a trial that does not demand it, as in this peculiar case where the
prosecutionfailedtobeclearabouthowtheyhaveallegedlybeennegligentinpayingemployee
benefits.
TheevidencesoughttobeintroducedbythepetitionerswerepresentedintheirSupplemental
MotionforReconsideration.Obviously,itwasaftertheirconvictionthatpetitionersrealizedtheir
mistakeandbelatedlypresentedtheirevidencewhichconsistof(1)acertificationdatedMay11,
2004byAbdurasadJ.Undain,ProvincialAuditorofSulu,attestingtothepaymentoftheRATA
for the period January to May 1999 to officials of Sulu who were entitled to such benefit (2)
disbursementvouchersshowingpaymentofRATAtoprovincialemployeesofSulufortheperiod
JanuarytoMay1999and(3)swornstatementsfromtheclaimantsoftheRATAattestingtotheir
receipt of RATA from January to May 1999. The Sandiganbayan noted how some of the
disbursementvoucherswerenotsignedbytheclaimants.Petitioners,however,werenotgiventhe
chance to explain this alleged irregularity. The Sandiganbayan also completely disregarded the
swornstatementsfromtheclaimantsoftheRATAwhich
 327

VOL.584,APRIL7, 327
2009
Estinovs.People

statethattheydidnothaveanycomplainttoitsallegednonpayment.Itshouldberememberedthat
petitionersarebeingchargedwithviolationofSec.3(e)ofRA3019,anelementofwhichisundue
injury to any party. If the claimants of the RATA, the supposed injured parties, state that they
receivedtheRATAandhavenocomplaintstoitsnonpayment,thentheseswornstatementscould
absolvepetitioners.Thesedocumentsshouldbeweighedproperly,itsauthenticitydulyestablished
bytheaccused,andtheprosecutionshouldbegiventhechancetorebutthesepiecesofevidence.
Sincewearenotatrieroffacts,weshouldremandthiscasetotheSandiganbayan.
Asthecourtoflastresort,wecannotandshouldnotbehastyinconvictingtheaccusedwhen
therearefactualcircumstancesthatcouldsavethemfromimprisonment.Inthiscase,theaccused
shouldbeaffordedthechancetoprovetheauthenticityofdocumentswhichhaveatendencyto
provetheirinnocence.Proceduralrulesshouldbeinterpretedliberallyorevensetasidetoserve
the ends of justice. Hence, we order the remand of Criminal Case No. 26192 to the
Sandiganbayanforanewtrial.
G.R.Nos.16400911
PetitionerPescaderasdefenseconsistsoftwoarguments:(1)thattheelementsofthecrimeof
malversationunderArt.217oftheRevisedPenalCodewerenotpresentand(2)thathisfailure
toremittheGSIScontributionswasduetotheprioritizationofotherobligationsoftheProvincial
GovernmentofSulu.
Pescaderaclaimsthattheelementsofthecrimeofmalversationwerenotmetbecausethere
wasnodemandonhimbytheProvincialAuditororbytheSpecialAuditTeamtoaccountforthe
GSIScontributions.Hesubmitsthattheprimafaciepresumptionofmalversationisnotapplicable
when no written demand for accounting was given to him. Assuming that there was a demand,
thereisallegedlynodirectevidence
328

328 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

showingmisappropriationofPhP4,820,365.30.Heassertsthathedidnotwithdrawsuchamount
fromtheprovincialgovernmentfunds.Hesubmitteddocumentsthatshowhowthefundsofthe
ProvincialGovernmentofSuluwerespentfromJuly1998toMay23,1999.Thesedocuments
consisted of the monthly trial balance from August 31, 1998 to May 31, 1999 certified true
copiesofthejournalofchecksissuedfromJuly1998toMay7to30,1999certifiedtruecopies
oftheTreasurersJournalCashDisbursementsfromAugust1998toFebruary1999andannual
Audit Report for 1998 and 1999. Pescadera claims that the COA Special Audit Team merely
examinedthedisbursementvouchersandthepayrollsandfoundthattheonlyirregularitywasthe
nonremittanceoftheGSIScontributionsandloanamortization.
 Art.217oftheRevisedPenalCodeprovides:

Art. 217. Malversation of Public Funds or PropertyPresumption 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 consent, or through abandonment or
negligence, shall permit any other person to take such funds or property, wholly or partially, or shall
otherwisebeguiltyofthemisappropriationofsuchfundsorproperty,shallsuffer:
xxxx
Thefailureofapublicofficertohavedulyforthcominganypublicfundsorpropertywithwhichhe
ischargeable,upondemandbyanydulyauthorizedofficer,shallbeprimafacieevidencethathehasput
suchmissingfundsorpropertytopersonaluses.

There is no dispute that Pescadera is a public officer who has control or custody of public
funds and, thus, accountable for them. As to whether Pescadera misappropriated the GSIS
premiums,hearguesthatthepresumptionofmalversationdoesnotapplybecausetherewasno
demandonhim.
The Sandiganbayan held that Pescadera failed to account for the GSIS premiums when
demandwasmadebyProvincialAuditorNoraImlanandtheSpecialAuditTeam,citingEx

329

VOL.584,APRIL7, 329
2009
Estinovs.People

hibit12c.Pescaderapointsout,however,thatExhibit12creferredtotheStateAuditors
OpinionontheFinancialStatementshereinreproduced:

The auditor rendered a qualified opinion on the fairness of the presentation of the financial
statements due to managements failure to conduct physical inventory on its fixed assets and
inventoriesasdiscussedinfindingno.1andinabilitytoconductinspectionontheinfraprojectsunder
the20%DevelopmentFund.
SUMMARYOFSIGNIFICANTFINDINGS
ANDRECOMMENDATIONS
Duringtheyearunderaudit,thefollowingarethefindingsandrecommendations,towit:
xxxx
2. Nonremittances[in]1998ofvarioustrustliabilitiesinviolationoflaws,rules,andregulations.
Require the Provincial Treasurer to remit all trust liabilities such as GSIS premiums/loans
repayments/stateinsurance,MEDICAREANDPAGIBIG.25

We agree with Pescadera that this is not the demand contemplated by law. The demand to
accountforpublicfundsmustbeaddressedtotheaccountableofficer.Theabovecitedletterwas
made by the Provincial Auditor recommending to the Chairperson of the COA to require the
Provincial Treasurer of Sulu to remit all trust liabilities such as GSIS premium/loans,
repayments/state insurance, Medicare and Pagibig. Nowhere in the pleadings did the Special
Prosecutor refute the lack of a formal demand upon Pescadera to account for the GSIS
premiums.Pescaderaevendeniesbeinginformedoftheconductoftheaudit,anassertionwhich
was not refuted by the prosecution. It can be concluded then that Pescadera was not given an
opportunitytoexplainwhytheGSISpremiumswerenotremitted.Withoutaformaldemand,

_______________

25Rollo(G.R.Nos.16400911),pp.2021.

330

330 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

theprimafaciepresumptionofconversionunderArt.217cannotbeapplied.
While demand is not an element of the crime of malversation,26 it is a requisite for the
applicationofthepresumption.Withoutthispresumption,theaccusedmaystillbeprovedguilty
underArt.217basedondirectevidenceofmalversation.Inthiscase,theprosecutionfailedtodo
so.ThereisnoproofthatPescaderamisappropriatedtheamountforhispersonaluse.
TheelementsofArt.217are:(1)theoffenderisapublicofficer,(2)heorshehascustodyor
controlofthefundsorpropertybyreasonofthedutiesofhisoffice,(3)thefundsorpropertyare
public funds or property for which the offender is accountable, and, most importantly, (4) the
offender has appropriated, taken, misappropriated or consented, or, through abandonment or
negligence, permitted another person to take them. The last and most important element of
malversation was not proved in this case. There is no proof that Pescadera used the GSIS
contributions for his personal benefit. The prosecution merely relied on the presumption of
malversation which we have already disproved due to lack of notice. Hence, the prosecution
should have proven actual misappropriation by the accused. Pescadera, however, emphasized
that the GSIS premiums were applied in the meantime to the salary differentials and loan
obligations of Sulu, that is, the GSIS premiums were appropriated to another public use. Thus,
therewasnomisappropriationofthepublicfundsforhisownbenefit.Andsincethechargelacks
oneelement,wesetasidetheconvictionofPescadera.
WHEREFORE,theDecisiondatedApril16,2004oftheSandiganbayaninCriminalCaseNo.
26192isSETASIDEandthecaseisREMANDEDtotheSandiganbayanfornewtrialonthe
allegednonpaymentofRATA.TheDecisiondated

_______________

26Madarangv.Sandiganbayan,G.R.No.112314,March28,2001,355SCRA525,532533.

331

VOL.584,APRIL7, 331
2009
Estinovs.People

April 16, 2004 of the Sandiganbayan in Criminal Case No. 26193 is REVERSED and SET
ASIDE, and Ernesto G. Pescadera is ACQUITTED of the charge against him. Costs against
petitioners.
SOORDERED.

Quisumbing(Chairperson)andBrion,JJ.,concur.
CarpioMorales,J.,IjointheDissentofJ.Tinga.
Tinga,J.,PleaseseeDissentingOpinion.

CONCURRINGANDDISSENTINGOPINION

TINGA, J.:
Theconsolidatedpetitionsareappealsfroman16April2004DecisionoftheSandiganbayan
which convicted petitioners Munib Estino and Ernesto Pescadera in Criminal Case No. 26192,
andpetitionerPescaderaaloneinCriminalCaseNo.26193.ThepetitionsinG.R.No.163957
58 concern Criminal Case No. 26192, while the petitions in G.R. No. 16400911 involve
CriminalCaseNo.26193.IconcurwiththedraftponenciawithrespecttoitsrulinginG.R.Nos.
16400911 and will not dwell on those petitions in this opinion. However, with due respect, I
submitthatthemajoritysrulingthatthepetitionersaccused(accused)areentitledtoaremandof
Criminal Case No. 26192 is without legal basis. Because the majority has voted to grant the
petitionsinG.R.Nos.16395798,Irespectfullydissent.
To recall, in Criminal Case No. 26192, the accused were adjudged guilty by the
SandiganbayanforviolationofSection3(e)ofRep.ActNo.3019,whichspecificallypenalizes
[c]ausinganyundueinjurytoanyparty,includingtheGovernment,orgivinganyprivatepartyany
unwarranted benefits, advantage or preference in the discharge of his official, administrative or
judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.
Under
332

332 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

Section 3(e), the elements of the offense are: (1) that the accused are public officers or private
personschargedinconspiracywiththem(2)thatsaidpublicofficerscommittheprohibitedacts
duringtheperformanceoftheirofficialdutiesorinrelationtotheirpublicpositions(3)thatthey
causeundueinjurytoanyparty,whethertheGovernmentoraprivateparty(4)thatsuchinjuryis
causedbygivingunwarrantedbenefits,advantageorpreferencetosuchpartiesand(5)thatthe
public officers have acted with manifest partiality, evident bad faith or gross inexcusable
negligence.1
In particular, the Sandiganbayan found that accused failed to pay the employees of the
Provincial Government of Sulu their Representation and Travel Allowances (RATA), for which
there was a budget allocation for. In their defense, accused submitted vouchers which allegedly
showedthepaymentofRATAforthemonthofMay1999.However,theSandiganbayanpointed
outthatsaidvoucherswerenotsignedbytheclaimants.TheSandiganbayanalsotooknoteofthe
testimonyofMonaBalabaran(Balabaran),aCommissiononAuditStateAuditor,whowaspart
of the special audit team that audited the disbursement vouchers and payrolls of the provincial
governmentofJolo,Sulufortheperiod27July1998to23May1999.Balabaranwasamongthe
signatoriestotheSpecialAuditReportdated12January2000.TheReport,ExhibitA2forthe
prosecution,concludedthatnobenefitswerepaidtotheemployeesofSuluProvincialOfficefor
theperiodcoveredfromJanuary1999toMay1999basedonthesubmittedpaiddisbursement
vouchers.2
Somecontextisnecessarywithrespecttothebudgetsituationduringtheperiodinquestion.
Thenationalgovernmentencounteredconsiderabledelayinenactingabudgetfor1999,andthe
new1999budgetwasapprovedonlyon17June1999.From1January1999until16June1999,
thegovernment

_______________

1SeeValenciav.Sandiganbayan,G.R.No.141336,29June2004,433SCRA88,96.
2Records,pp.206207.

333

VOL.584,APRIL7, 333
2009
Estinovs.People

and the Province of Sulu automatically operated under the reenacted 1998 budget. The
petitionerstenureasViceGovernorandProvincialTreasurerendedon23May1999,orweeks
beforethenewbudgetwasapproved.Accordingly,theycouldnothavebeenresponsibleforany
disbursements sourced from the new 1999 budget, a fact which the Sandiganbayan
acknowledgedinitsDecision.
Atthesametime,theantigraftcourtstillfoundaccusedliableforfailuretopaytheRATAfrom
JanuarytoMay1999onthepremisethatunderthereenacted1998budgetwhichwasoperative
during those months, there were appropriations for the payment of RATA to the provincial
employees.
Before this Court, the accused are making it appear that they were erroneously assumed
during trial that they were being tried for failing to pay the RATA out of the new 1999 budget.
Becauseofthaterroneousassumption,theywereprecludedduringtrialfromsubmittingevidence
thatprovedtheypaidouttheRATAoutofthereenacted1998budget.
The majority rules that accused are entitled to submit their new evidence to prove their
innocencethrougharemandofthecasetotheSandiganbayan.Thisconclusionisjustifiedinthis
manner:

xxxAlthoughthedocumentsofferedbyaccusedarestrictlynotnewlydiscovered,itappearstous
that accused were mistaken in their belief that its production during trial was unnecessary. In their
Supplemental Motion and/or Motion for New Trial, they stress that they no longer presented the
evidenceofpaymentofRATAbecause[StateAuditor]Balabarantestifiedthatthesubjectofthecharge
was the nonpayment of benefits under the 1999 budget, without mention of the RATA nor the 1998
reenacted budget. It seems that they were misled during trial. They were precluded from presenting
pieces of evidence that may prove actual payment of the RATA under the 1998 reenacted budget
because the prosecutions evidence was confined to alleged nonpayment of RATA under the 1999
budget.3
_______________

3Draftponencia,p.16.

334

334 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

Itakeexceptiontotheseconclusions,forthefollowingreasons:
First. Under Section 2, Rule 121 of the 2000 Rules of Criminal Procedure, the accused
maybegrantedanewtrialonanyofthefollowinggrounds:(1)thaterrorsoflaworirregularities
prejudicialtothesubstantialrightsoftheaccusedhavebeencommittedduringthetrialor(2)that
new and material evidence has been discovered which the accused could not with reasonable
diligencehavediscoveredandproducedatthetrialandwhichifintroducedandadmittedwould
probablychangethejudgment.4
The majority concedes that the evidence which the accused now seeks to be introduced is
strictlynotnewlydiscovered.5Theaccuseddonotevenbothertoofferanyargumentthatthe
evidence is new and material, or that they could not with reasonable diligence have discovered
andproducedthesameatthetrial.Instead,theyclaimthattheywereactuallymisledduringthe
trialastothetruenatureofthechargesagainstthemandthussawnoneedtosubmitthenow
challengedevidenceinthecourseofthetrial.
Thusly,thereisnoproceduralrulethatsanctionstherecoursenowsoughtbytheaccused.The
majorityattemptstoestablishonebyallowingforamorelenientinterpretationofRule121,Sec.
2onnewtrialinviewofthespecialcircumstancessufficienttocastdoubtastothetruthofthe
chargesagainstpetitioners.6Withduerespect,Isubmitthatnosuchspecialcircumstancesexist
inthiscase.
Second. According to the Information in Criminal Case No. 26192, the accused were
chargedasfollows:

ThatsometimeinoraboutJanuarytoMay1999,orshortlypriororsubsequentthereto,inJolo,
Suluandwithinthe

_______________

4SeeRulesofCriminalProcedure,Rule121,Sec.2.
5Seenote3.
6Supranote3at16.

335

VOL.584,APRIL7, 335
2009
Estinovs.People
jurisdiction of this Honorable Court, accused Munib S. Estino and Ernesto G. Pescadera, both high
rankingpublicofficers,beingtheViceGovernorandProvincialTreasurerofSulu,respectively,taking
advantage of their official positions and acting in relation to their official functions, conspiring and
confederating with each other, did there and then, willfully, unlawfully and feloniously, cause undue
injury to the employees of the Provincial Government of Sulu through evident bad faith byfailing to
pay them theirsalary differentials, Additional Compensation Allowance (ACA), Personal Emergency
and Representation Allowance (PERA), Representation and Travel Allowance (RATA), MidYear
Bonus,CashGiftandClothingAllowanceinthetotalamountofP8,435,625.34.
CONTRARYTOLAW.7

Accused have been duly and unequivocally informed that they were being charged for the
failuretotheprovincialemployeesofSulutheirRATA,amongotherbenefits,sometimeinorabout
January to May of 1999. Because the Information is written the way it is, it is impossible for
accused to claim that they were misled into not presenting evidence establishing that they either
paid out the RATA, or that they paid out such RATA from January to May of 1999. The
Information duly alerted accused that they were being made accountable to pay out the RATA
fromJanuarytoMayof1999.
Third. Under Section 323 of the Local Government Code, if the localsanggunian is still
unabletopasstheordinanceauthorizingtheannualappropriationsafterninety(90)daysfromthe
beginning of the fiscal year, the ordinance authorizing the appropriations of the preceding year
shallbedeemedreenactedandshallremaininforceandeffectuntilthenewbudgetisenacted.
ThatsituationapparentlyoccurredinSuluin1999,wherethenewbudgetwasenactedonlyon17
June1999,orsixmonthsafterthestartofthefiscalyear1999.
The majority harps on a purported distinction between payment of RATA under the 1998
reenactedbudgetandpaymentofRATAunderthe1999budget,positingthattheevi

_______________

7Rollo,p.40.

336

336 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

dence of the prosecution was confined only to alleged nonpayment of RATA under the 1999
budget.
However, the Special Audit Report8 which was duly presented as evidence for the
prosecutionunequivocallystates,torepeat:

It was noted that no benefits were paid to the employees of Sulu Provincial Office for the period
coveredfromJanuary,1999toMay,1999basedonthesubmittedpaiddisbursementvouchers.(Annex
E)9

TheSpecialAuditReportstandsasevidencedulypresentedofthenonpaymentofRATAfor
the period from January to May of 1999. It cannot be claimed that there the evidence of the
prosecutionwasconfinedonlytononpaymentofRATAunderthe1999budget,sincetheSpecial
Audit Report is proof that accused failed to pay out the RATA from January to May 1999, a
periodduringwhichthelocalgovernmentofSuluwasoperatingunderthe1998reenactedbudget.
This evidence for the prosecution likewise aligns with the charge under the Information that
accusedfailedtopayouttheRATAfromJanuarytoMayof1999.
The majoritys distinction would have mattered if accused were specifically charged in the
InformationwithfailingtopayouttheRATAoutoftheappropriationsprovidedinthenew1999
budget. That is not what the Information or the Special Audit Report provides, as they were
chargedwithfailingtopayouttheRATAfromJanuarytoMay1999withoutqualificationastothe
source of the appropriation. The majoritys distinction would have also mattered if the only
evidence presented during trial by the prosecution was limited to proving that accused failed to
payouttheRATAfromtheappropriationsofthenew1999budget.TheSpecialAuditReportis
proofthattheevidencesubmittedwasnotmerely

_______________

8Records,pp.203208.
9Id.,atp.207.

337

VOL.584,APRIL7, 337
2009
Estinovs.People

confinedtoprovingthattheunpaidRATAcamefromthenew1999budget.
Thedistinctionmayhavealsobeenmaterialifinfactthe1998budgetreenactedfor1999had
notprovidedforthepaymentofRATA.Insuchacase,petitionerscouldhavevalidlyreliedonthe
distinction,claimingtheyhadnofiscalmeanstopaytheRATAwhileinofficefromJanuarytoMay
of 1999, and that they were no longer holding office at the time the 1999 budget was finally
enactedon16June1999.Yetitisundisputedbyallpartiesthatthereenacted1998budgetdid
provideforthepaymentofRATAtotheSulugovernmentemployees.
Fourth. Itwouldbeincredibleforaccusedtoassumeallalongingoodfaiththattheywere
being tried for failing to pay the RATA out of the reenacted 1998 budget. That was the only
budgetinoperationfromJanuarytoMayof1999,theperiodsspecifiedintheInformationagainst
them. Moreover, they very well knew that their tenure as Acting Governor and Provincial
Treasurerhadexpiredwellbeforethe1999budgetfinallycameintoeffectandthattheyhadno
opportunitytoexpendpublicfundsfromthatsource.
Thereasonwhytheyhavetoinsistonsuchignoranceisthattheyneedsomemodicumofa
reasontosneakinthenewevidencetheyfailedtopresentduringtrial.Hence,theploywithout
manifestbasisthattheyweremisledduringtrialastothenatureofthechargesagainstthem.This
claim is anchored on a supposed admission by Balabaran during her testimony before the
SandiganbayanthattheaccusedwereinvestigatedandchargedforfailingtopaytheRATAoutof
the1999budget.HereunderisthecitedtestimonyofBalabaran,asquotedinthepetition:
Q. Ishowtoyou,M adamWitness,yourAuditReportdatedJanuary12,2000,andIcallyourattentiononthe
findinginpage5thereofwhichreads:Ontheallegationthatnopaymentsweremadeintendedforthesalary
differentials,ACA,PERA,andotherbenefitsoftheemployeesof
 338

338 SUPREME
COURT
REPORTS
ANNOTATED
Estinovs.People

the Provincial Government of Sulu for the period covered from January 1999 to M ay 1999. Now, it is stated
herethatnopaymentsofthesaidbenefitsoftheemployeesweremadefromJanuary1999toM ay1999.
M yquestionis,whenyousaidbenefitsoftheemployeesyouarereferringtothebenefitsoftheemployees
providedforinthe1999Budget?PleasegooverthisReport.
(Witnesslookingatthedocument)
A. Youwantmetoexplain?
AJPALATTAO:
Whatbenefitareyoureferring?
A. Wearereferringtothebenefitsthatwastobepaid,yourHonor,theACA,thePERA,andtheotherbenefits.
Q. Yes,andthosebenefitsthatyouarereferringtoarethebenefitsprovidedforintheAnnualBudgetforthe
Year1999?
AJPALATTAO:
Areyoureferringtoabenefitgrantedtotheemployeesunderthe1999AnnualBudget?Yesornot?
A. Thebenefitsthatareintendedtotheemployeesfortheyear1999.
Q. 1999.Youarenotreferringtothebenefitsoftheemployeesprovidedforinthe1998budget?
A. Yes,itisveryclear,January1999toM ay1999.
Q. Itisonlyin1999?
A. Yes,Sir. 10

ThispassagecannotbetakenasadefinitiveindicationthatthePeopleofthePhilippineswas
confiningitsprosecutionofaccusedforfailingtopaytheRATAoutofthe1999budget.Notably,
thislineofquestioningwasnotprefacedwithanydistinctionbetweenthe1998reenactedbudget
andthe1999budget.Thewitnessmayhaveverywellunderstoodthequestionsasreferringtothe
yearwhenthebenefitsshouldhavebeenpaidout,andnotthetechnicalsourceofsuchfunding.
PerhapsthispassagemayhavebornematerialityhadBala

_______________

10Rollo,pp.1314.

339

VOL.584,APRIL7, 339
2009
Estinovs.People

baranstestimonybeenthesoleevidencepresentedagainsttheaccusedtoestablishtheirfailureto
dulyreleasetheRATAbenefits,butitisnot.
Moreover,accusedcannotlegitimatelyclaimthatBalabaranssupposedadmissionsomehow
precludedthemfrompresentingevidencethattheydidreleasetheRATAbenefitssourcedfrom
thereenacted1998budget.TheInformation,aswellastheSpecialAuditReport,areunequivocal
inaccusingaccusedoffailingtoreleasetheRATAbenefitswhiletheywereinofficefromJanuary
to May of 1999. Since the only budget for Sulu in effect during that period was the reenacted
1998budget,accusedverywellknewwhenthetrialbeganthatitwasfortheirfailuretodisburse
theRATAoutofsuchreenactedbudget,andnoother,thattheywerebeingcalledtoaccount.In
nowaycouldBalabaranstestimonyhaveamendedtheInformationortheSpecialAuditReport,
or somehow reoriented respondents as to the true nature of the charges no matter what the
Informationsaid.
Fifth. The new evidence which accused desire to introduce is uncomfortably precise,
orientedasitistorebutthejustificationscitedbytheSandiganbayantoconvictthem.Convicted
felonswillnotpassupthechancetomanufactureexculpatoryevidencecreatedinreactiontothe
decisionthatconvictedthem.
ThenewevidencewhichaccusedsubmittedintheirSupplementalMotionforReconsideration
before the Sandiganbayan consists of: (1) a certification dated 11 May 2004 (or after the
convictionoftheaccused)byAbdurasadJ.Undain,ProvincialAuditorofSulu,attestingthatthe
RATAfortheperiodJanuarytoMay1999ofallofficialsofSuluwhowereentitledtosuchbenefit
hadbeenpaidoutand(2)approximatelyeightythree(83)DisbursementVoucherspurportedly
provingthepaymentofRATAtoseveralSuluprovincialemployeesfromJanuarytoApril1999.
Notably,accusedhaddulyintroducedintoevidencesimilardisbursementvouchers,coveringthe
monthofMay1999,buttheSandiganbayan
340

340 SUPREMECOURT
REPORTS
ANNOTATED
Estinovs.People

discounted such evidence, noting that the same were not signed by the claimants thereof.11 It
bearsnoticethatthistime,theJanuaryAprildisbursementvouchersaccusednowwanttoenter
intoevidencearesignedbytheclaimantsthereof.12
The observations of the Office of the Solicitor General with respect to the JanuaryApril
disbursementvouchersbearsrepeating:

2. Aside from not being part of the evidence presented, a cursory examination of said
disbursementvouchersrevealedthatthesamesufferfromnumerousirregularities.Theydonotbearthe
dorsal portion of the vouchers nor the signature of the Provincial Auditor. It therefore cannot be
determinedifthesamewereliquidatedandpassedonauditbytheCommissiononAudit.
3. Many of the vouchers do not contain the signatures of the supposed claimants and/or
recipients.Someweresignedfortheclaimantsbypersonswhoneglectedtoattachanyproofoftheir
authoritytososigninbehalfoftheirprincipals.
4. The vouchers also showed that in patent violation of Presidential Decree No. 1445, the RATA
werepaidincashinsteadofthroughchecks.
5. Itbearsmentioningatthispointthatifindeed,aspetitionersclaim,theRATAwerepaidduring
theirincumbency,itwouldhavebeenlogicaltopresentasevidenceinthismannerandintheirfavor,if
not the aforementioned disbursement vouchers and sworn statements, at least the pertinent payroll
whicheveryrecipientgovernmentofficialisrequiredtosignbywayofacknowledgmentofreceiptof
theRATA.Andyet,inconceivably,petitionersneglectedtodoso.13

ItmaybethatsincethisCourtisnotatrieroffact,wewillnotbeinapositiontoaffirmthese
factualallegationsoftheOSG,evenifthesecanbefaciallyconfirmeduponexamining

_______________

11Id.,atp.48.
12Seeid.,atpp.125209.
13Id.,atpp.382383.

341

VOL.584,APRIL7, 341
2009
Estinovs.People

theaforementionedvouchers.Nonetheless,thequestionbeforeusissimplywhetheraccusedmay
beentitledtoanewtrial,eventhoughtheRulesofCriminalProceduresquarelyrejecttheirlegal
arguments. Our allowing a new trial for the accused rests solely on our beneficence, and may
ultimatelydependonourbeliefwhetheraccusedargumentsunsettleourbeliefthattheyareguilty
beyond reasonable doubt. Unfortunately for them, I am convinced that despite the purported
newevidence,theintroductionofwhichhasutterlynobasisinlaw,accusedareguiltybeyond
reasonable doubt and the disposition of the Sandiganbayan in Criminal Case No. 26192 is
correct.
I VOTE to DENY the petitions in G.R. Nos. 16395758 and affirm the convictions in
Criminal Case No. 26192. I concur with the majority in granting the petitions in G.R. Nos.
16400911andacquittingpetitionerErnestoPescaderainCriminalCaseNo.26193.

JudgmentinCriminalCaseNo.26192datedApril16,2004setaside,caseremandedto
Sandiganbayan.JudgmentdatedApril16,2004inCriminalCaseNo.26193reversedand
setaside,ErnestoG.Pescaderaacquitted.

Notes.It is obvious to the eyes that the phrase fraud upon government means any
instanceoractoftrickeryordeceitagainstthegovernmentandcannotbereadrestrictivelysoas
tobeequivalenttomalversationoffundsasthisiscoveredbytheprecedingphraseanyoffense
involving...publicfundsorproperty.(Mirandavs.Sandiganbayan,464SCRA165[2005])
Ascustodianofcourtfundsandrevenues,ClerksofCourthavealwaysbeenremindedoftheir
duty to immediately deposit the various funds received by them to the authorized government
depositoriesfortheyarenotsupposedtokeepfundsintheircustody.(Commission on Audit
RegionVIvs.Pamposa,525SCRA471[2007])
o0o