Zacaria Candao vs.

People of the Philippines and Sandiganbayan

G.R. Nos. 186659-710, October 19, 2011

Facts: On August 5, 1993, Chairman Pascasio S. Banaria of the Commission on Audit (COA)
constituted a team of auditors from the central office to conduct an Expanded Special Audit of
the Office of the Regional Governor, Autonomous Region for Muslim Mindanao (ORG-
ARMM). It was found that illegal withdrawals were made without the required disbursement
vouchers. Chairman Banaria demanded from petitioner to produce and restitute to the ARMM-
Regional Treasurer immediately the full amount and submit his explanation.

Thereafter, the Office of the Special Prosecutor, Office of the Ombudsman-Mindanao, 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). They were charged with violation of Article 217 of the Revised Penal Code, as
amended, under the following informations with identical allegations except for the varying date,
number and amount of the check involved in each case.

Sandiganbayan ruling: By Decision dated October 29, 2008, 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 who were likewise sentenced to imprisonment and ordered to pay a fine
equivalent to the amount of the check in each case.

The Sandiganbayan noted that petitioners presented no proof that the cash advances intended for
"peace and order campaign" were spent for public purposes, as in fact the alleged disbursement
vouchers did not indicate any detail as to the nature of the expense/s such as purchase of
equipment, services, meals, travel, etc. and there were no supporting documents such as the
Request for Issuance of Voucher, Purchase Request and Inspection Report of the items
supposedly purchased. More importantly, the vouchers were not accomplished in accordance
with existing COA circulars because they are unnumbered and undated. Hence, the belatedly
submitted vouchers are of doubtful veracity or origin, nay, a fabricated evidence or, as pointed
out by the prosecution, "self-serving or an afterthought, belatedly prepared to give the illegal
disbursements amounting to the aggregate amount of more than P21M, a semblance of
regularity."21 As to the JAO and Certification dated August 18, 1998 issued by Chief Accountant
Fontanilla, the Sandiganbayan found there is nothing therein to indicate the particular
disbursement voucher that corresponds to each of the subject 52 checks which were neither
reflected in the JAO.

With respect to petitioners assertion that the audit conducted by the COA special audit team was
incomplete and tainted as it did not follow procedures because the person audited were not
notified thereof, the Sandiganbayan found these allegations unsubstantiated as in fact at the start
of the audit on August 24, 1993, the audit team thru their team leader State Auditor Naranjo,
informed the management of ORG-ARMM thru the COA Resident Auditor of the expanded
special audit to be conducted as they even requested for the original copies of the disbursement
vouchers together with their complete supporting documents covering the 52 checks. But despite
said letter, the ORG-ARMM failed to heed the audit teams request. For the failure of petitioner
Haron to account for the funds involved in the illegal withdrawals when asked to do so, the
presumption arose that he misappropriated the same, which presumption was not overcome by
defense evidence.

On the respective liabilities of petitioners Zacaria A. Candao and Abas A. Candao, the
Sandiganbayan held that by their act of co-signing the subject checks, petitioner Haron was able
to consummate the illegal withdrawals without the required disbursement vouchers of the
amounts covered by the 43 checks (for Abas) and 9 checks (for Zacaria). Thus, by their
collective acts, said court concluded that petitioners conspired to effect the illegal withdrawals of
public funds which, when required by the COA to be properly accounted for, petitioners failed to
do so.

Issue: Whether the Sandiganbayan committed a reversible error in not applying the "Equipoise
Rule" which if applied would have resulted in the acquittal of the accused-petitioners.

Held: No. 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. Such is not the situation in this case because the
prosecution was able to prove by adequate evidence that Disbursing Officer Haron failed to
account for funds under his custody and control upon demand, specifically for the
P21,045,570.64 illegally withdrawn from the said funds. 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.