G.R. No. 98262-63, January 10, 1994
CLARO B. NARCISO, petitioner, vs. SANDIGANBAYAN, and PEOPLE OF THE PHILIPPINES, respondents.

FACTS

Petitioner Claro B. Narciso, Officer-in-Charge of the Municipal Treasurer’s Office of Vallehermoso, Negros Oriental, was convicted by the Sandiganbayan of malversation of public funds. Two audit examinations were conducted during his tenure. The first audit in May 1983 revealed a BPI Family Bank Check for P14,500.00, drawn by Felicito Tan for real estate tax payment, entered in his cashbook but not yet deposited; no shortage was found. When the check was later deposited in June 1983, it was dishonored due to a signature discrepancy. Narciso then changed his cashbook entry to reflect the amount as an “account receivable.” The second audit on August 1, 1983, following the dishonor, declared a shortage of P14,500.00. Based on this, auditors inferred Narciso had a hand in the spurious check to cover a shortage. After a fact-finding inquiry where tax collector Lolito Sedicta stated he gave the check to Narciso because “there was an audit,” formal charges were filed years later. Two informations were filed: one for Malversation (Crim. Case No. 13435) and one for Falsification of a Public Document (Crim. Case No. 13864). At trial, the prosecution presented Auditor Kho and Atty. Proceso Remullo, Jr., but did not present vital witnesses Sedicta (who had gone into hiding) or Felicito Tan. The Sandiganbayan acquitted Narciso of falsification but convicted him of malversation, applying the presumption under Article 217 of the Revised Penal Code that a shortage establishes malversation. Narciso appealed, arguing the presumption was misapplied as there was no evidence he had custody of the P14,500.00 allegedly malversed.

ISSUE

Whether the Sandiganbayan erred in convicting Narciso of malversation by applying the presumption of malversation under Article 217 of the Revised Penal Code, despite an absence of evidence proving he had custody of the P14,500.00 or that a shortage existed from funds actually received.

RULING

Yes. The Supreme Court reversed the Sandiganbayan’s decision and acquitted Narciso. The Court held that the presumption of malversation under Article 217 applies only when an accountable officer fails to have duly forthcoming public funds or property upon demand. Here, the evidence failed to establish that Narciso had actually received the P14,500.00 as part of the public funds in his custody. The only established facts were that he received a check for that amount, entered it in his cashbook, and the check was later dishonored. The shortage declared by the auditors was based solely on the dishonored check being treated as a cash item, not on proof of an actual missing sum from funds previously accounted for. Without evidence that Narciso had custody of and failed to produce the specific P14,500.00 in public funds, the presumption of malversation cannot arise. The Court further reasoned that since the Sandiganbayan itself found no evidence linking Narciso to the issuance of the spurious check, the logical conclusion that he used it to “cover-up” a shortage fails. Absent proof of a shortage or conversion of funds, the crime of malversation was not proven beyond reasonable doubt.