G.R. No. 158413 & 161133; February 8, 2012
CELSO M. MANUEL, ET AL. and PEOPLE OF THE PHILIPPINES, Petitioners, vs. HON. SANDIGANBAYAN, MELCHOR M. MALLARE and ELIZABETH GOSUDAN, Respondents. (Consolidated with G.R. No. 161133)

FACTS

Melchor M. Mallare, the Mayor, and Elizabeth M. Gosudan, the Municipal Treasurer, of Infanta, Pangasinan, were charged with Malversation of Public Funds under Article 217 of the Revised Penal Code. The Information alleged they conspired to unlawfully disburse municipal funds totaling ₱1,487,107.40 through unauthorized personal loans to officials and employees, payments without appropriation, and irregular cash withdrawals. During pre-trial, the parties stipulated that the accused were public officers, an audit report existed, a written demand was made, and the shortage was the stated amount. The Sandiganbayan, after trial, convicted both accused in a September 17, 2001 Decision.
Subsequently, the Sandiganbayan granted the accused’s Motion to Re-open Proceedings to present additional evidence. After receiving this evidence, the court issued a July 21, 2003 Resolution affirming its prior conviction. The accused then filed a petition assailing the conviction, while other petitioners (Manuel, et al.) filed a separate petition questioning the propriety of the order to re-open the proceedings.

ISSUE

The primary issue is whether the Sandiganbayan correctly convicted Mallare and Gosudan of Malversation of Public Funds.

RULING

The Supreme Court affirmed the conviction. The legal logic centered on the established elements of malversation and the nature of the evidence. The parties had stipulated to the first three elements: the accused were public officers who had custody or control of public funds for which they were accountable. The Court found the fourth element—that the accused appropriated, consented to, or permitted the taking of said funds—was proven beyond reasonable doubt.
The defense of good faith and lack of criminal intent was rejected. The Court held that the unauthorized disbursements for personal loans and other purposes constituted unlawful personal use of public funds, which by law (Article 217, RPC) gives rise to a presumption of malversation. The accused failed to rebut this presumption. The fact that the funds were later fully restituted does not extinguish criminal liability; it merely serves as a mitigating circumstance akin to voluntary surrender. The Court also found no merit in the challenge to the re-opening of proceedings, as it was within the Sandiganbayan’s discretion and the additional evidence did not alter the outcome. Thus, the petitions were denied, and the Sandiganbayan’s decision was affirmed.