G.R. No. 192723 June 5, 2017
LEOVIGILDO A. DE CASTRO, Petitioner, vs. FIELD INVESTIGATION OFFICE, OFFICE OF THE OMBUDSMAN and the COMMISSIONER OF CUSTOMS, Respondents.

FACTS

Petitioner Leovigildo A. De Castro, a long-time employee of the Bureau of Customs, was administratively charged with Dishonesty and Grave Misconduct. The charges stemmed from a lifestyle check conducted by the Ombudsman’s Field Investigation Office (FIO), which alleged that his assets and expenses from 1974 to 2004, totaling approximately ₱30.8 million, were manifestly disproportionate to his and his wife’s combined declared income of about ₱10.8 million for the same period. The FIO attributed to him several high-value assets registered under the names of his adult children, including real properties, vehicles, and corporate investments, arguing that his children had no independent income to acquire them.
De Castro defended himself by asserting that all properties he and his spouse legally acquired were properly declared in their Statements of Assets, Liabilities and Net Worth (SALNs). He contended that the assets under his children’s names were legitimately owned by them, financed through their own means, including inheritances, business ventures, and financial support from other relatives. He also argued that the Ombudsman’s computation of his family’s travel expenses was speculative. The Ombudsman found him guilty and imposed the penalty of dismissal, which the Court of Appeals affirmed.

ISSUE

Whether the Ombudsman and the Court of Appeals erred in finding De Castro guilty of Dishonesty and Grave Misconduct based on an alleged manifest disproportion between his family’s income and their assets.

RULING

The Supreme Court granted the petition and reversed the findings of the Ombudsman and the Court of Appeals. The Court held that the administrative charges were not supported by substantial evidence. The legal logic centered on the principle that in cases of unexplained wealth, the burden is on the state to prove that the assets are unlawfully acquired. The FIO’s case relied heavily on the presumption that assets under the names of De Castro’s adult children should be attributed to him simply because they were acquired during his employment. The Court found this presumption legally untenable.
The Court emphasized that the children were all of legal age at the time of the acquisitions and were not legally obligated to be included in De Castro’s SALN. The Ombudsman failed to present concrete evidence, such as tracing the funds used for the purchases to De Castro’s accounts, to substantiate the claim that he was the true beneficial owner. Mere suspicion or conjecture, without proof of illegal sourcing of funds, is insufficient to establish administrative liability for Dishonesty or Grave Misconduct. The speculative estimation of travel costs was also deemed an unreliable basis for concluding a manifest disproportion. Consequently, the Court ruled that the elements of the offenses were not proven by substantial evidence, warranting De Castro’s exoneration.