ZACARIA A. CANDAO, ABAS A. CANDAO AND ISRAEL B.

HARON, Petitioners
-versusPEOPLE OF THE PHILIPPINES AND SANDIGANBAYAN, Respondents
G.R. Nos. 186659-710, October 19, 2011
Facts:
Commission on Audit conduct an audit investigation on the financial transactions and operations of ORGARMM for the period July 1992 to March 1993. It was found that illegal withdrawals were made from the
depository accounts of the agency through the issuance of checks payable to the order of petitioner Israel B.
Haron (Disbursing Officer II) without the required disbursement vouchers.
COA demanded from petitioner Haron to produce and restitute to the ARMM-Regional Treasurer
immediately the full amount of P21M and submit his explanation together with the official receipt issued
by the ARMM Regional Treasurer in acknowledgment of such restitution.
Ombudsman filed in the Sandiganbayan criminal cases for malversation of public funds against the
following ORG-ARMM officials/employees: Zacaria A. Candao (Regional Governor), Israel B. Haron
(Disbursing Officer II), Abas A. Candao (Executive Secretary) and Pandical M. Santiago (Cashier).
At their arraignment, all accused pleaded not guilty to the charge of malversation. In the meantime,
accused Santiago died and consequently the case against him was dismissed.
The prosecutions lone witness was Heidi L. Mendoza,COA State Auditor IV. She testified that their
expanded audit disclosed the illegal withdrawals of funds from the PNB and Treasury accounts of ORGARMM involving 52 checks issued without the required disbursement vouchers.
In response, the Finance and Budget Management Services of ORG-ARMM informed the audit team that
the vouchers were already submitted to COA Resident Auditor. Mendoza then personally verified from
Gagwis who denied having received the subject vouchers and issued a certification to that effect.
On cross-examination, witness Mendoza was asked if the audit team had informed the office or parties
concerned that they are going to be audited (entry conference). She replied that this was a sensitive
assignment, recalling that they were threatened after their identities were established during the earlier audit
of the same office such that she had to be brought back to Manila. At that time, the Regional Governor was
accused Candao. Hence, during the expanded audit, the team was unable to proceed as in ordinary
situations. While they did an entry conference during the previous main audit, they were unable to do so at
the time of the expanded audit. Again for security reasons, the team also did not conduct an exit conference
after field work; they would be risking their lives if they discuss there and then their findings. Due to threat
to her life, it was her team supervisor (Naranjo) and member (Roxas) who personally retrieved the
documents in Cotabato City. She admitted the belated submission of original vouchers to the COA central
office but these are without supporting documents.
For the accused, the first witness was Nick Luz Aduana testified that his functions then include the
supervision and overseeing of the three divisions: Budget, Accounting and Management. When report of
the audit team came out, he was surprised because they were not informed of the audit. He was familiar
with the 52 checks because the disbursement vouchers passed through his office. He identified the vouchers
presented by the defense as the ones processed by their division with the corresponding amounts reflected
therein. Insofar as the expanded audit is concerned, they were not given the opportunity to defend the case
as they were not given the so-called exit conference.
The next witness, Rosalinda G. Gagwis, former COA Resident Auditor, testified that in she was the Chief
of the Operation and Review Division (ORD), which at the time has jurisdiction over ORG-ARMM;
Among her duties was to conduct a post-audit of the financial transactions of ORG-ARMM. In the course
of the expanded audit of ORG-ARMM, she was requested to issue the Certification stating that she has not
received the January to March 1993 vouchers as stated in the letter of Haron. She said that upon seeing the
bundles of vouchers being submitted to her office, she immediately refused to accept, and sort of washed
her hands by telling her staff that they were no longer incharge of ORG-ARMM. She did not actually
scan those documents and examine their contents. She also did not receive the Monthly Report of
Disbursements from said office.
The Sandiganbayan found petitioner Haron guilty beyond reasonable doubt of malversation of public funds
under Article 217 of the Revised Penal Code, as amended, committed in conspiracy with petitioners Zacaria
A. Candao and Abas A. Candao.
The Sandiganbayan found no merit in petitioners claim that the subject checks were covered by existing
disbursement vouchers which were belatedly submitted and received by the COA Central Office. It said
that had those vouchers really existed at the time of the 52 withdrawals petitioners made, petitioner Haron
could have readily produced them when required to do so by the special audit team.
Issue:
1.
2.

WON SBN committed a reversible error in convicting the accused petitioners for the crime of
malversation of public funds despite proof positive that there were disbursement vouchers except
that the COA refused to accept much less examine the same.
WON SBN committed a reversible error in not applying the equipoise rule which if applied
would have resulted in the acquittal of the accused-petitioners.

3.

WON the SBN committed a reversible error in convicting accused petitioners Zacaria A. Candao
and Abas A. Candao despite the fact that the charge of conspiracy which is their only link to the
offenses herein has not been proven beyond reasonable doubt.

Ruling:
The petition has no merit.
Article 217 of the Revised Penal Code, as amended, provides:
Art. 217. Malversation of public funds or property Presumption of malversation. - Any public officer who, by
reason of the duties of his office, is accountable for public funds or property, shall appropriate the same, or shall
take or misappropriate or shall consent, or through abandonment or negligence, shall permit any other person to
take such public funds or property, wholly or partially, or shall otherwise be guilty of the misappropriation or
malversation of such funds or property, shall suffer:
1.
The penalty of prision correccional in its medium and maximum periods, if the amount involved in
the misappropriation or malversation does not exceed two hundred pesos.
2.
The penalty of prision mayor in its minimum and medium periods, if the amount involved is more
than two hundred pesos but does not exceed six thousand pesos.
3.
The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if
the amount involved is more than six thousand pesos but is less than twelve thousand pesos.
4.
The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is
more than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds
the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification
and a fine equal to the amount of the funds malversed or equal to the total value of the property embezzled.
The failure of a public officer to have duly forthcoming any public fund or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such
missing funds or property to personal uses.
The following elements are essential for conviction in malversation cases:
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.
All the foregoing elements were satisfactorily established by the prosecution in this case. Petitioners
have not rebutted the legal presumption that with the Disbursing Officers (Haron) failure to account
for the illegally withdrawn amounts covered by the subject checks when demanded by the COA, they
misappropriated and used the said funds for their personal benefit.
Petitioners however assert that their convictions were based solely on the Sandiganbayans conclusion that
the vouchers submitted by the defense were illegal or irregular, whereas the informations simply alleged
their absence or non-existence. They contend that said court could not have validly assessed the
disbursement vouchers as to their legality because that duty pertains to the COA which refused and failed to
examine the same. Had the court allowed the COA to evaluate and make a ruling on the validity of the
vouchers, the result would have been different and most probably they would have been acquitted of the
crime charged. Court was not persuaded by petitioners asseveration.
The Sandiganbayan categorically ruled that the disbursement vouchers were inexistent at the time of the
issuance of the subject checks and expanded special audit based on its findings that: (1) petitioner Haron
could not produce the vouchers upon demand by the COA; (2) Resident Auditor Gagwis certified at about
the same time that to date she has not received the vouchers mentioned in the supposed transmittal letters;
(3) the entries in the duly certified Report of Checks Issued by Deputized Disbursing Officer (RCIDDO)
showed that there were indeed entries of checks issued with Haron as payee but no disbursement voucher
numbers as these were either lacking, detached or missing, and which were verified by the audit team as
corresponding to the subject 52 checks issued and signed by petitioners and encashed by petitioner Haron
who received the money withdrawn from the government depositary accounts; (4) FBMS Chief Corpus
testified that he discovered the supposed vouchers still there at his office filing cabinet when these
supposedly have already been submitted to the COA Resident Auditor; and (5) the supposed original
disbursement vouchers belatedly submitted to the COA central office were undated and unnumbered with
no supporting documents as required by COA Circular
In fine, the Sandiganbayan committed no reversible error in holding that the testimonial and
documentary evidence presented by the petitioners failed to overcome the prima facie evidence of
misappropriation arising from Harons failure to give a satisfactory explanation for the illegal
withdrawals from the ARMM funds under his custody and control. Petitioners likewise did not
accomplish the proper liquidation of the entire amount withdrawn, during the expanded audit or any
time thereafter. There is therefore no merit in petitioners argument that the Sandiganbayan erred in
not applying the equipoise rule.
Under the equipoise rule, where the evidence on an issue of fact is in equipoise or there is doubt on which
side the evidence preponderates, the party having the burden of proof loses. The equipoise rule finds
application if the inculpatory facts and circumstances are capable of two or more explanations, one of
which is consistent with the innocence of the accused and the other consistent with his guilt, for then the
evidence does not fulfill the test of moral certainty, and does not suffice to produce a conviction. 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.
As to the liability of petitioners Zacaria A. Candao and Abas A. Candao, the Sandiganbayan
correctly ruled that they acted in conspiracy with petitioner Haron to effect the illegal withdrawals
and misappropriation of ORG-ARMM funds.
In this case, petitioners Zacaria A. Candao and Abas A. Candao were co-signatories in the subject checks
issued without the required disbursement vouchers. Their signatures in the checks, as authorized officials
for the purpose, made possible the illegal withdrawals and embezzlement of public funds in the staggering
aggregate amount of P21M
Petitioners Zacaria A. Candao and Abas A. Candao assail their conviction as co-conspirators in the crime of
malversation contending that their only participation was in the ministerial act of signing the checks. Court
disagrees with such postulation.
Petitioners Zacaria A. Candao and his Executive Secretary Abas A. Candao are both accountable
public officers within the meaning of Article 217 of the Revised Penal Code, as amended. No checks
can be prepared and no payment can be effected without their signatures on a disbursement voucher
and the corresponding check. In other words, any disbursement and release of public funds require
their approval, as in fact checks issued and signed by petitioner Haron had to be countersigned by
them. Their indispensable participation in the issuance of the subject checks to effect illegal
withdrawals of ARMM funds was therefore duly established by the prosecution and the
Sandiganbayan did not err in ruling that they acted in conspiracy with petitioner Haron in
embezzling and misappropriating such funds.
Besides, even on the putative assumption that the evidence against petitioner yielded a case of malversation
by negligence but the information was for intentional malversation, under the circumstances of this case his
conviction under the first mode of misappropriation would still be in order. Malversation is committed
either intentionally or by negligence. The dolo or the culpa present in the offense is only a modality in the
perpetration of the felony. Even if the mode charged differs from the mode proved, the same offense of
malversation is involved and conviction thereof is proper. A possible exception would be when the mode of
commission alleged in the particulars of the indictment is so far removed from the ultimate categorization
of the crime that it may be said due process was denied by deluding the accused into an erroneous
comprehension of the charge against him. That no such prejudice was occasioned on petitioner nor was he
beleaguered in his defense is apparent from the records of this case.
WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.