G.R. No. L-68268 November 12, 1986
FELIX VILLACORTA, petitioner, vs. PEOPLE OF THE PHILIPPINES and SANDIGANBAYAN, respondents.

FACTS

Petitioner Felix Villacorta was the Municipal Treasurer of Pandan, Catanduanes. An audit conducted by the Commission on Audit in 1978 revealed a total cash shortage of P71,930.35 in his accountability. Consequently, he was charged with Malversation of Public Funds before the Sandiganbayan. The prosecution established that the shortage was computed by comparing his total cash accountability against the actual cash and valid cash items found during the audit. The alleged shortage largely consisted of “chits” or vouchers representing cash advances and payments made to various municipal officials and employees, including the mayor, for salaries, wages, travel expenses, and other operational costs.
The Sandiganbayan, after trial, convicted Villacorta but found him liable only for a reduced amount of P30,995.94. It later amended the penalty, appreciating the mitigating circumstances of voluntary surrender and full restitution of this amount. Villacorta filed this Petition for Certiorari, seeking acquittal. He argued that the disallowed payments were made in good faith to government personnel and that he did not put the funds to personal use, as evidenced by subsequent restitution made by the employees who received the advances.

ISSUE

Whether the Sandiganbayan erred in convicting petitioner of Malversation of Public Funds under Article 217 of the Revised Penal Code.

RULING

The Supreme Court acquitted petitioner Villacorta. The legal logic centered on the prima facie evidence rule under Article 217, which presumes misappropriation when a public officer fails to have public funds forthcoming upon demand. The Court held that Villacorta successfully rebutted this presumption. The evidence showed that the alleged shortage arose from payments and cash advances made to government personnel for official purposes, such as salaries and travel expenses. These transactions, though potentially violative of auditing rules, were not for Villacorta’s personal gain.
Crucially, the recipients of these “chits” subsequently redeemed them and made restitution, demonstrating that the funds were not embezzled but were used for public purposes, albeit through irregular procedures. The Court also noted that Villacorta had a substantial actual balance deposit with the Provincial Treasurer, further negating criminal intent. The practice of issuing such chits was also tolerated during his predecessor’s term. Since the element of personal misappropriation was not proven beyond reasonable doubt, and his actions constituted at most administrative or civil liability for improper disbursements, no criminal offense of malversation was committed. Therefore, his conviction was reversed.