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FIRST DIVISION Injunction.

The application for TRO was denied by SEC Hearing Officer


Soller in an Order dated April 29, 1997.
[G.R. No. 142924. December 5, 2001]
Before the hearing officer could start proceeding with the case, however,
TEODORO B. VESAGAS, and WILFRED D. ASIS, petitioners, vs. The petitioners filed a motion to dismiss on the ground that the SEC lacks
Honorable COURT OF APPEALS and DELFINO RANIEL and HELENDA jurisdiction over the subject matter of the case. The motion was denied on
RANIEL, respondents. August 5, 1997. Their subsequent move to have the ruling reconsidered was
likewise denied. Unperturbed, they filed a petition for certiorari with the SEC
DECISION En Banc seeking a review of the hearing officer’s orders. The petition was
again denied for lack of merit, and so was the motion for its reconsideration in
PUNO, J.: separate orders, dated July 14, 1998 and November 17, 1998, respectively.
Dissatisfied with the verdict, petitioners promptly sought relief with the Court
Before us is the instant Petition for Review on Certiorari assailing the of Appeals contesting the ruling of the Commission en banc. The appellate
Decision, dated July 30, 1999, of the Court of Appeals in CA-G.R. SP No. court, however, dismissed the petition for lack of merit in a Decision
51189, as well as its Resolution, dated March 16, 2000, which denied promulgated on July 30, 1999. Then, in a resolution rendered on March 16,
petitioners’ Motion for Reconsideration. 2000, it similarly denied their motion for reconsideration.

The respondent spouses Delfino and Helenda Raniel are members in good Hence, the present course of action where the petitioners raise the following
standing of the Luz Village Tennis Club, Inc. (club). They alleged that grounds:
petitioner Teodoro B. Vesagas, who claims to be the club’s duly elected
president, in conspiracy with petitioner Wilfred D. Asis, who, in turn, claims “C.1. The respondent Court of Appeals committed a reversible error when it
to be its duly elected vice-president and legal counsel, summarily stripped determined that the SEC has jurisdiction in 03-97-5598.”
them of their lawful membership, without due process of law. Thereafter,
respondent spouses filed a Complaint with the Securities and Exchange “C.2. The respondent Court of Appeals committed a reversible error when it
Commission (SEC) on March 26, 1997 against the petitioners. It was merely upheld the theoretical power of the SEC Hearing Officer to issue a
docketed as SEC Case No. 03-97-5598. In this case, respondents asked the subpoena and to cite a person in contempt (actually a non-issue of the
Commission to declare as illegal their expulsion from the club as it was petition) while it shunted away the issue of whether that hearing officer may
allegedly done in utter disregard of the provisions of its by-laws as well as the hold a person in contempt for not obeying a subpoena where his residence is
requirements of due process. They likewise sought the annulment of the beyond fifty (50) kilometers from the place of hearing and no transportation
amendments to the by-laws made on December 8, 1996, changing the annual expense was tendered to him.”
meeting of the club from the last Sunday of January to November and
increasing the number of trustees from nine to fifteen. Finally, they prayed for In support of their first assignment of error, petitioners contend that since its
the issuance of a Temporary Restraining Order and Writ of Preliminary inception in the 1970’s, the club in practice has not been a corporation. They
add that it was only the respondent spouses, motivated by their own personal have no reason to disturb this factual finding relating to the club’s registration
agenda to make money from the club, who surreptitiously caused its and incorporation.
registration with the SEC. They then assert that, at any rate, the club has
already ceased to be a corporate body. Therefore, no intra-corporate relations Moreover, by their own admission contained in the various pleadings which
can arise as between the respondent spouses and the club or any of its they have filed in the different stages of this case, petitioners themselves have
members. Stretching their argument further, petitioners insist that since the considered the club as a corporation. This admission, under the rules of
club, by their reckoning is not a corporation, the SEC does not have the power evidence, binds them and may be taken or used against them. Since the
or authority to inquire into the validity of the expulsion of the respondent admission was made in the course of the proceedings in the same case, it does
spouses. Consequently, it is not the correct forum to review the challenged not require proof, and actually may be contradicted only by showing that it
act. In conclusion, petitioners put respondent spouses to task for their failure was made through palpable mistake or that no such admission was made.
to implead the club as a necessary or indispensable party to the case. Noteworthy is the “Minute of the First Board Meeting” held on January 5,
1997, which contained the following pertinent portions:
These arguments cannot pass judicial muster.
“11. Unanimously approved by the Board a Resolution to Dissolve the
Petitioners’ attempt to impress upon this court that the club has never been a corporate structure of LVTC which is filed with the SEC. Such resolution
corporation is devoid of merit. It must fail in the face of the Commission’s will be formulated by Atty. Fred Asis to be ready on or before the third week
explicit finding that the club was duly registered and a certificate of of January 1997. Meanwhile, the operational structure of the LVTC will
incorporation was issued in its favor, thus: henceforth be reverted to its former status as an ordinary club/Association.”

“We agree with the hearing officer that the grounds raised by petitioner in Similarly, petitioners’ Motion to Dismiss alleged:
their motion to dismiss are factual issues, the veracity of which can only be
ascertained in a full blown hearing. Records show that the association is “1. This Commission has no jurisdiction over the Luz Village Tennis Club not
duly registered with the association and a certificate of incorporation was only because it was not impleaded but because since 5 January 1997, it had
issued. Clearly, the Commission has jurisdiction over the said already rid itself, as it had to in order to maintain respect and decency
association. As to petitioner’s allegation that the registration of the club was among its members, of the unfortunate experience of being a corporate
done without the knowledge of the members, this is a circumstance which was body. Thus at the time of the filing of the complaint, the club had already
not duly proven by the petitioner (sic) in his (sic) motion to dismiss.” dissolved its corporate existence and has functioned as a mere association of
respectable and respecting individual members who have associated
It ought to be remembered that the question of whether the club was indeed themselves since the 1970’s x x x”
registered and issued a certification or not is one which necessitates a factual
inquiry. On this score, the finding of the Commission, as the administrative The necessary implication of all these is that petitioners recognized and
agency tasked with among others the function of registering and administering acknowledged the corporate personality of the club. Otherwise, there is no
corporations, is given great weight and accorded high respect. We therefore cogency in spearheading the move for its dissolution. Petitioners were
therefore well aware of the incorporation of the club and even agreed to get We note that to substantiate their claim of dissolution, petitioners submitted
elected and serve as its responsible officers before they reconsidered only two relevant documents: the Minutes of the First Board Meeting held on
dissolving its corporate form. January 5, 1997, and the board resolution issued on April 14, 1997 which
declared “to continue to consider the club as a non-registered or a non-
This brings us to petitioners’ next point. They claim in gratia argumenti that corporate entity and just a social association of respectable and respecting
while the club may have been considered a corporation during a brief spell, individual members who have associated themselves, since the 1970’s, for the
still, at the time of the institution of this case with the SEC, the club was purpose of playing the sports of tennis x x x.” Obviously, these two
already dissolved by virtue of a Board resolution. documents will not suffice. The requirements mandated by the Corporation
Code should have been strictly complied with by the members of the club.
Again, the argument will not carry the day for the petitioner. The Corporation The records reveal that no proof was offered by the petitioners with regard to
Code establishes the procedure and other formal requirements a corporation the notice and publication requirements. Similarly wanting is the proof of the
needs to follow in case it elects to dissolve and terminate its structure board members’ certification. Lastly, and most important of all, the SEC
voluntarily and where no rights of creditors may possibly be prejudiced, thus: Order of Dissolution was never submitted as evidence.

“Sec. 118. Voluntary dissolution where no creditors are affected.- If We now resolve whether the dispute between the respondents and petitioners
dissolution of a corporation does not prejudice the rights of any creditor is a corporate matter within the exclusive competence of the SEC to decide. In
having a claim against it, the dissolution may be effected by majority vote of order that the commission can take cognizance of a case, the controversy must
the board of directors or trustees and by a resolution duly adopted by the pertain to any of the following relationships: a) between the corporation,
affirmative vote of the stockholders owning at least two-thirds (2/3) of the partnership or association and the public; b) between the corporation,
outstanding capital stock or at least two-thirds (2/3) of the members at a partnership or association and its stockholders, partners, members, or officers;
meeting to be held upon call of the directors or trustees after publication of the c) between the corporation, partnership, or association and the state as far as
notice of time, place and object of the meeting for three (3) consecutive weeks its franchise, permit or license to operate is concerned; and d) among the
in a newspaper published in the place where the principal office of said stockholders, partners or associates themselves. The fact that the parties
corporation is located; and if no newspaper is published in such place, then in involved in the controversy are all stockholders or that the parties involved are
a newspaper of general circulation in the Philippines, after sending such notice the stockholders and the corporation, does not necessarily place the dispute
to each stockholder or member either by registered mail or by personal within the loop of jurisdiction of the SEC. Jurisdiction should be determined
delivery at least 30 days prior to said meeting. A copy of the resolution by considering not only the status or relationship of the parties but also the
authorizing the dissolution shall be certified by a majority of the board of nature of the question that is the subject of their controversy.
directors or trustees and countersigned by the secretary of the corporation.
The Securities and Exchange Commission shall thereupon issue the certificate We rule that the present dispute is intra-corporate in character. In the first
of dissolution.” place, the parties here involved are officers and members of the club.
Respondents claim to be members of good standing of the club until they were
purportedly stripped of their membership in illegal fashion. Petitioners, on the
other hand, are its President and Vice-President, respectively. More The enactment of R.A. 8799, otherwise known as the Securities Regulation
significantly, the present conflict relates to, and in fact arose from, this Code, however, transferred the jurisdiction to resolve intra-corporate
relation between the parties. The subject of the complaint, namely, the legality controversies to courts of general jurisdiction or the appropriate Regional Trial
of the expulsion from membership of the respondents and the validity of the Courts, thus:
amendments in the club’s by-laws are, furthermore, within the Commission’s
jurisdiction. “5.2. The Commission’s jurisdiction over all cases enumerated under
Section 5 of Presidential Decree No. 902-A is hereby transferred to the
Well to underscore is the date when the original complaint was filed at the Courts of general jurisdiction or the appropriate Regional Trial Court:
SEC, which was March 26, 1997. On that date, the SEC still exercised quasi- Provided, that the Supreme Court in the exercise of its authority may
judicial functions over this type of suits. It is axiomatic that jurisdiction is designate the Regional trial Court branches that shall exercise jurisdiction
conferred by the Constitution and by the laws in force at the time of the over these cases. The Commission shall retain jurisdiction over pending cases
commencement of the action. In particular, the Commission was thereupon involving intra-corporate disputes submitted for final resolution which should
empowered, under Sec. 5 of P.D. 902-A, to hear and decide cases involving be resolved within one (1) year from the enactment of this Code. The
intra-corporate disputes, thus: Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.”
“SEC. 5. In addition to the regulatory and adjudicative functions of the
Securities and Exchange Commission over corporations, partnerships and On August 22, 2000, we issued a resolution, in A.M. No. 00-8-10-SC, wherein
other forms of association registered with it as expressly granted under we “DIRECT(ed) the Court Administrator and the Securities and Exchange
existing laws and decrees, it shall have original and exclusive jurisdiction Commission to cause the actual transfer of the records of such cases and all
to hear and decide cases involving: other SEC cases affected by R.A. No. 8799 to the appropriate Regional Trial
Courts x x x.” We also issued another resolution designating certain branches
xxx of the Regional Trial Court to try and decide cases formerly cognizable by the
SEC. Consequently, the case at bar should now be referred to the appropriate
b) Controversies arising out of intra-corporate or partnership relations, Regional Trial Court.
between and among stockholders, members or associates; between any or all
of them and the corporation, partnership or association of which they are the Before we finally write finis to the instant petition, however, we will dispose
stockholders, members or associates, respectively; and between such of the two other issues raised by the petitioners.
corporation, partnership or association and the state insofar as it concerns their
individual franchise or right to exist as such entity; First is the alleged failure of the respondents to implead the club as a
necessary or indispensable party. Petitioners contend that the original
x x x.” complaint should be dismissed for not including the club as one of the
respondents therein. Dismissal is not the remedy for non-joinder of parties.
Under the Rules, the remedy is to implead the non-party, claimed to be IN VIEW WHEREOF, finding no cogent reason to disturb the assailed
necessary or indispensable, in the action, thus: Decision, the petition is DENIED. In conformity with R.A. 8799, SEC Case
No. 03-97-5598, entitled “Delfino Raniel and Helenda Raniel v. Teodoro B.
“SEC. 11. Misjoinder and non-joinder of parties. – Neither misjoinder nor Vesagas and Wilfred D. Asis” is referred to the Regional Trial Court of the
non-joinder of parties is a ground for dismissal of an action. Parties may be Ninth Judicial Region, Branch 33 located in Agusan del Norte (Butuan City),
dropped or added by order of the court on motion of any party or on its own one of the designated special commercial courts pursuant to A.M. No. 00-11-
initiative at any stage of the action and on such terms as are just. Any claim 03-SC.
against a misjoined party may be severed and proceeded with separately.”
SO ORDERED.
The other issue is with regard to the alleged oppressive subpoenas and orders
issued by Hearing Officer Soller, purportedly without or in excess of Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ.,
authority. In light of PD 902-A’s repeal, the need to rule on the question of the concur.
extent of the contempt powers of an SEC hearing officer relative to his
authority to issue subpoenas and orders to parties involved in intra-corporate Entitled “Delfino Raniel and Helenda Raniel v. Teodoro B. Vesagas and
cases, or potential witnesses therein has been rendered academic. The Wilfred D. Asis.”
enactment of RA 8799 mooted this issue as SEC hearing officers, now bereft
of any power to resolve disputes, are likewise stripped of their power to issue Petition for Review on Certiorari, p. 10; Rollo, p. 25.
subpoenas and contempt orders incidental to the exercise of their quasi-
judicial powers. Ibid., p. 18; Ibid., p. 33.

At any rate, it taxes our credulity why the petitioners insist in raising this issue Order, Annex D, Petition for Review, CA-G.R. No. 51189, p. 3; C.A. Rollo, p.
in the case at bar. The so-called oppressive subpoenas and orders were not 30.
directed to them. They were issued to the club’s secretary, Purita Escobar,
directing her to appear before the Commission and bring certain documents of SEC. 26. Admissions of a party. – The act, declaration or omission of a party
the club, that were supposedly under her possession or control. It is obvious as to relevant fact may be given in evidence against him. (Section 26, Rule
that the petitioners are not the proper parties to assail the oppressiveness of the 130, Rules of Court.)
subpoenas or the orders, and impugn their validity. Elementary is the
principle that only those who expect to be adversely affected by an order can SEC. 4. Judicial admissions. – An admission, verbal or written, made by a
complain against it. It is their addressee, Purita Escobar, who can assail their party in the course of the proceedings in the same case, does not require
alleged oppressiveness. Petitioners’ protestation has therefore no legal leg to proof. The admission may be contradicted only by showing that it was made
stand on. through palpable mistake or that no such admission was made. (Section 4,
Rule 129, Rules of Court.)
Attached as an annex of the herein petition and as annex of their petition filed Section 11, Rule 3, 1997 Rules of Civil Procedure.
with Court of Appeals.
With Judge Victor A. Tomaneng, presiding.
Minutes of the First Board Meeting, Annex “1”, Petition, p. 1; Rollo, p. 71.

Attached as Annex G of their petition with the Court of Appeals.

Motion to Dismiss, Annex G, Petition, p. 1; Rollo, p. 63.

Section 118, Batas Pambansa Blg. 68, Corporation Code of the Philippines.

Resolution, Annex 2, Petition, p. 74.

Bernardo, Sr., v. Court of Appeals, 263 SCRA 660 (1996).

Mainland Construction Co., Inc. v. Movilla, 250 SCRA 290 (1995).

Viray v. Court of Appeals, 191 SCRA 308 (1990).

Orosa v. Court of Appeals, 193 SCRA 391 (1991).

Section 5, P.D. No. 902-A.

Section 5.2, R.A. 8799, Securities Regulation Code.

A.M. No. 00-8-10-SC. -- In Re: Transfer of Cases from the Securities and
Exchange Commission to the Regular Courts Pursuant to R.A. No. 8799,
August 22, 2000.

A.M. No. 00-11-03-SC. -- Resolution Designating Certain Branches of


Regional Trial Courts to Try and Decide Cases Formerly Cognizable by the
Securities and Exchange Commission.
Regional Trial Court, Pasay City, to bring the said “shabu” as evidence in
Criminal Case No. 92-2097, entitled People vs. Ong Foo de la Cruz. The
THIRD DIVISION first two subpoenas were for the hearings held on January 27, 1993 and
January 29, 1993 during which police escorts accompanied the accused to
[G.R. No. 139282. September 4, 2000] help secure the subject evidence. On these two occasions, he was
accompanied by three police officers, namely: Crime Investigator II
ROMEO DIEGO y DE JOYA, petitioner, vs. The SANDIGANBAYAN and Zosimo Escobar, SPO3 Oscar Bacani and SPO3 Isalvanor Casissid. Thus,
PEOPLE OF THE PHILIPPINES, respondents. the “shabu” was twice brought to the court but was not presented in
evidence since the hearings were postponed. In both instances, the
DECISION accused also asked Presiding Judge Sayo whether he could turn over the
evidence to the custody of the court. The latter, however, refused to
GONZAGA-REYES, J.: accept the “shabu” for the reason that the court did not have a vault to
secure the same. In going to the Regional Trial Court at Pasay City, the
Romeo Diego Y De Joya, herein petitioner, was convicted as principal in the accused and his companions would leave Camp Crame at about 7:30 a.m.
crime of Malversation of Public Property by the Sandiganbayan in its and they would take EDSA to F.B. Harrison, which would lead them to
Decision dated February 22, 1999 in Criminal Case No. 21655. On July 7, the courthouse.
1999, the Sandiganbayan issued a Resolution denying petitioner’s Motion for
Reconsideration of the said decision. Hence, this appeal by certiorari of the By virtue of the third subpoena, the accused again left his office to go to
decision and resolution of the Sandiganbayan. the RTC at Pasay City with the five-and-a-half kilos (5.5 kgs.) of “shabu”
on February 9, 1993, again leaving at around 7:30 a.m. As usual, he took
The criminal case against petitioner stems from these undisputed facts as EDSA to F.B. Harrison towards the Pasay City courthouse. Unlike the
summarized by the Sandiganbayan, to wit: two previous trips to the said courthouse, however, the accused travelled
alone on that fateful day of February 9, 1993. In addition, unlike the two
“Accused Romeo Diego started his career in the Philippine National other previous trips, which were uneventful, accused was waylaid by
Police as an Auto Mechanic way back in 1950. Through the years, he rose holduppers along F.B. Harrison, about fifty (50) meters from the
to the rank of Police Superintendent (equivalent rank of Lt. Colonel). At courthouse. The holduppers blocked the path of accused’s Beetle and two
the time of the loss of the “shabu”, the accused was the Evidence holduppers alighted from their vehicle, a dark blue box type Lancer with
Custodian of the National Capital Region, Criminal Investigation Service plate number PGM or PGN 44? One of the holduppers, armed with a .45
Command at Camp Crame, Quezon City. On November 27, 1992, he caliber pistol, approached from the passenger side of the accused’s
received for safekeeping forty (40) self-sealed transparent plastic bags of vehicle and told the accused, “Huwag kang papalag. Madidisgrasya ka
methamphetamine hydrochloride or “shabu” with an estimated street lang.” The holdupper then asked for accused’s ignition keys and
value of Five Million Pesos (P5,000,000.00). As custodian of the said eyeglasses, opened the passenger door of the vehicle, grabbed the bag
“shabu”, he received a total of three (3) subpoenas from Branch 111, containing the “shabu” placed at the vehicle’s front passenger floor. The
holduppers immediately left the scene of the crime and accused reported 2. That on November 27, 1992, accused Romeo de Joya Diego received for
the incident to Judge Sayo of Branch 111 of the Regional Trial Court and safekeeping one (1) small cartoon (sic) containing forty (40) self-sealed
to his office at the CIS, to Major Gil Meneses, in particular. The accused plastic bags of ‘SHABU’ with a street value of Five Million Pesos
then testified in court before Judge Sayo regarding the loss of the “shabu” (5,000,000.00) (sic).
and immediately reported the robbery to the Pasay City where he gave his
statement (Exhibit “1”) regarding the incident on F.B. Harrison St. (sic)” 3. That on February 9, 1993 he (accused Romeo de Joya Diego) was
subpoenaed to appear and bring the subject ‘SHABU’ to Branch 111, Regional
Petitioner was charged with Malversation of Public Property in an Information Trial Court, Pasay City.
that reads:
4. That at about 7:20 A.M. February 9, 1993, before he left for the Court he
“That on or about February 9, 1993, along F.B. Harrison St., Pasay City, sought the assistance of SPO 3 Isalvanor Casidsid to escort him. However, the
Philippines, and within the jurisdiction of this Honorable Court, the latter was not available because he had also been subpoenaed to appear before
above-named accused, a public officer being then the Evidence Custodian Regional Trial Court (sic) Mariano Umali of Pasig.
of the National Capital Regional Office - PNPCIBC, and as such, by
reason of his office and duties is responsible and accountable for public 5. That accused failed to deliver the subject ‘SHABU’ before the Court on
funds or properties entrusted or received by him, by means of gross said date (February 9, 1993) neither was it (the subject ‘SHABU’) returned to
negligence, did then and there wilfully (sic), unlawfully, and feloniously the evidence room of the NCR, CISC, PAP, Camp Crame, Quezon City.
fail to take the necessary precautions to adequately secure and safeguard
the safe delivery of one (1) small carton containing forty (40) self-sealed 6. That accused testified on said date (February 9, 1993) before the RTC,
transparent plastic bags of “shabu” with total gross weight of 5,900 Branch 111, Pasay City, Re lost (sic) of subject ‘SHABU’.”
grams, valued at FIVE MILLION (P5,000,000.00) PESOS, Philippine
currency, to the Court, resulting to the loss of the said ‘shabu’, to the Trial then ensued. On March 6, 1995, the prosecution manifested that it was
damage and prejudice of the Government in the aforesaid amount.” not presenting any testimonial evidence and rested its case upon orally
offering its exhibits. After the prosecution had rested its case, the prosecution
On February 1, 1995, before the commencement of the trial, the prosecution and defense again agreed to a stipulation of facts, thus:
and the defense entered into a Stipulation of Facts, agreeing to the following:
“1. That the accused Romeo Diego gave his statement marked as Exhibit 1
“1. That at all times relevant to this case, accused Romeo de Joya Diego was before SPO2 Rodolfo O. Diza on February 9, 1993, which consists of three (3)
then evidence custodian of the National Capital Region (NCR), Criminal pages, 1-A being the date of the statement and the signature being Exhibit 1-
Investigation Service Command (CISC), Philippine National Police (PNP), B;
Camp Crame, Quezon City.
2. That a Certification was issued by RTC Presiding Judge Sofronio G. Sayo
on January 27, 1995 in Criminal Case No. 92-2097 entitled People of the
Philippine versus Eng. Foo de la Cruz, it being understood that the Second - WHETHER OR NOT, ASSUMING THAT THE BURDEN OF
prosecution does not admit the truth of the contents of the certification; EVIDENCE WAS PROPERLY SHIFTED TO PETITIONER, THE
EXPLANATION HE RELIED UPON FOR THE LOSS OF THE SUBJECT
3. The due genuineness and due execution of Exhibit 3, together with “SHABU” IS SUFFICIENT TO EXONERATE HIM FROM LIABILITY
submarkings, which is the transcript of stenographic notes taken in Criminal FOR THE OFFENSE CHARGED;
Case No. 92-2097, entitled People of the Philippines versus Eng. Foo de la
Cruz, consisting of forty-two pages.” Third - WHETHER OR NOT, ASSUMING WITHOUT ADMITTING, THAT
PETITIONER IS GUILTY AS CHARGED, THE SUPPOSED ESTIMATED
After the defense had presented its witnesses and exhibits, the Sandiganbayan “STREET VALUE” OF THE SUBJECT “SHABU” IS A PROPER BASIS
rendered its judgment of conviction, the dispositive portion of which reads: FOR THE ASSESSMENT OF THE PENALTY IMPOSABLE IN THE
PREMISES; and
“WHEREFORE, the Court hereby renders judgment finding accused
Superintendent Romeo Diego y De Joya GUILTY beyond reasonable doubt as Fourth - WHETHER OR NOT THE GUILT OF PETITIONER OF (sic) THE
principal in the crime of Malversation of Public Property, as defined and OFFENSE CHARGED HAS BEEN PROVED BY EVIDENCE BEYOND
penalized under paragraph 4 of Article 217 of the Revised Penal Code; and REASONABLE DOUBT.
considering the mitigating circumstance of voluntary surrender, hereby
sentences the accused to suffer an indeterminate penalty of imprisonment The petition has no merit.
ranging from TEN (10) YEARS and ONE (1) DAY of prision mayor, as
minimum, to SEVENTEEN (17) YEARS, FOUR (4) MONTHS and ONE (1) Petitioner contends that there was a virtual reversal of the normal order of
DAY of reclusion temporal, as maximum; to pay a fine of FIVE MILLION presentation of evidence during the trial when the Sandiganbayan required
PESOS (P5,000,000.00); to suffer the penalty of perpetual special him, as accused, to put up his defense when the prosecution rested its case
disqualification from holding any public office; and, to pay the costs.” relying only on its exhibits and the stipulation of facts. However, the records
of this case and the petition itself reveal that the trial in the Sandiganbayan
Petitioner now assails the judgment in this appeal, relying on the following proceeded in the order prescribed by Rule 119, Section 3 of the Rules of
grounds: Court. The prosecution’s reliance on the stipulation of facts and its exhibits,
without offering any testimonial evidence, is an exercise of its prosecutorial
First - WHETHER OR NOT THE EVIDENCE ADDUCED BY THE prerogative. If petitioner truly believed that the evidence of the prosecution
PROSECUTION IN THE PRACTICALLY REVERSE PROCEDURE OF was inherently weak such that it failed to establish his culpability for the
PRESENTATION ADOPTED BY IT IS SUFFICIENT TO PROVE THE crime charged, then he should have filed a Demurrer to Evidence to dismiss
ESSENTIAL ELEMENTS OF THE CRIME CHARGED IN THE the case. However, instead of taking this course of action, petitioner entered
INFORMATION; into another stipulation of facts and presented his evidence. Petitioner cannot
now belatedly claim that the Sandiganbayan supposedly caused the onus
probandi to shift to him, the accused in a criminal case, when petitioner 3. The penalty of prision mayor in its maximum period to reclusion temporal
himself acquiesced to the regular order of the proceedings. in its minimum period, if the amount involved is more than 6,000 pesos but is
less than 12,000 pesos.
Petitioner bewails the prosecution’s reliance on the stipulation of facts. It
bears stress that the stipulation of facts is a judicial admission and in the 4. The penalty of reclusion temporal in its medium and maximum periods, if
absence of a showing that “(1) the admission was made through palpable the amount involved is more than 12,000 pesos but is less than 22,000 pesos.
mistake”, or that “(2) no such admission was made, the admissions bind the If the amount exceeds the latter, the penalty shall be reclusion temporal in its
declarant”. maximum period to reclusion perpetua.

In this case, petitioner duly admitted in the stipulation of facts, entered into In all cases, persons guilty of malversation shall also suffer the penalty of
during the pre-trial, that the subject shabu worth five million pesos perpetual special disqualification and a fine equal to the amount of the funds
(P5,000,000.00) was in his custody for safekeeping; that petitioner was malversed or equal to the total value of the property embezzled.
subpoenaed to bring the shabu to Branch 111, Regional Trial Court, Pasay
City Court; that petitioner failed to deliver the shabu before said court and that The failure of a public officer to have duly forthcoming any public funds or
neither was it returned to the evidence room. The mere fact that petitioner property with which his chargeable, upon demand by any duly authorized
failed to account for the shabu under his custody raises the rebuttable officer, shall be prima facie evidence that he has put such missing funds or
presumption that he malversed the subject shabu. Article 217 of the Revised property to personal uses. (As amended by Rep. Act No. 1060).”
Penal Code states that:
The fundamental issue thus to be considered is whether or not petitioner was
“Art. 217. Malversation of public funds or property--Presumption of able to successfully overturn the foregoing presumption. We hold that based
malversation. -- Any public officer who, by reason of the duties of his office, on the testimony of petitioner and the judicial admissions embodied in the
is accountable for public funds or property, shall appropriate the same, or shall stipulation of facts, the presumption stands unrebutted.
take or misappropriate or shall consent, or through abandonment or
negligence, shall permit any other person to take such public funds or All of the four elements of malversation are present in the case at bar, and
property, wholly or partially, or shall otherwise be guilty of the these elements are:
misappropriation or malversation of such funds or property, shall suffer:
1. That the offender is a public officer;
1. The penalty of prision correccional in its medium and maximum periods, if
the amount involved in the misappropriation or malversation does not exceed 2. That he has the custody or control of funds or property by reason of the
200 pesos. duties of his office;

2. The penalty of prision mayor in its minimum and medium periods, if the 3. That the funds or property are public funds or property for which he is
amount involved is more than 200 pesos but does not exceed 6,000 pesos. accountable; and
4. That he appropriated, took, misappropriated or consented or through no doubt that the accused was aware of the dangers posed in transporting such
abandonment or negligence, permitted another person to take them. a large amount of “shabu” subject of the instant case. As a matter of fact, he
(Emphasis ours) deemed it indispensable to secure, as he did, the assistance of three police
officers in the previous instances as escorts in transporting the “shabu” to and
Petitioner is a public officer who had custody of the shabu by reason of his from the courthouse in Pasay City. His knowledge of such dangers was further
official duties as Evidence Custodian of the National Capital Regional Office revealed in his very own testimony before the court, thus:
of the Philippine National Police - Criminal Investigation Service Command
(NCRO, PNP-CISC). The shabu was public property for which petitioner was J. Lagman:
accountable. While the evidence on record fail to show that petitioner
misappropriated said public property for his personal aggrandizement, the Q: When you found that there was nobody to escort you, why did you not
evidence points to the conclusion that the loss of the shabu to armed men was take steps to inform the Court that you could not come considering the
through petitioner’s negligence. volume of the shabu that you will bring to the Court and considering the
enormity of the case that you are supposed to attend?
Malversation is committed either intentionally or by negligence. The
Sandiganbayan in this case ruled that the loss of the shabu was due to A: My eagerness was to bring the evidence to the Court and turn it over to
petitioner’s gross negligence, a factual finding that is as a rule conclusive them because that is dangerous.
upon this Court. In cases involving public officials, there is gross negligence
when a breach of duty is flagrant and palpable. What makes petitioner’s gross Q: It was very dangerous for you to carry the shabu alone from your office
negligence more pronounced is the fact that he was fully aware of the need to to the Court as you said now, is that correct? In spite of that, you took it
transport the shabu with police escorts but despite the knowledge of the peril upon yourself to bring the shabu alone considering the danger that you said
involved in the transportation of illegal drugs, petitioner took it upon himself was lurking outside?
to deliver the subject shabu without police escort, despite the fact that the
shabu involved is valued at five million pesos (P5,000,000.00), weighing 5.5 A: Yes, sir.
kilograms and packed in 40 sealed transparent plastic bags. The sheer nature,
value, and amount of the contraband should have alerted petitioner, an Undoubtedly, the danger posed of transporting the “shabu” was so real and
experienced evidence custodian, to the risk that organized criminals might apparent that the accused had previously tried to turn over the same to the
attempt to forcibly take away the shabu. Petitioner’s diligence unmistakably custody of the Regional Trial Court in Pasay City in order that he be relieved
fell short of that required by the circumstances. of the burden of securing the same. His knowledge of such danger,
notwithstanding, the accused proceeded to Pasay City without the
We cite with approval the following findings of the Sandiganbayan: indispensable police escorts necessary to secure the “shabu”. He failed to take
the necessary steps to procure police escorts when SPO3 Isalvanor Casidsid
“Indeed, the accused had miserably failed to exercise the necessary was unavailable. The fact that he failed to organize the requisite police escorts
precautions to secure the safekeeping of the “shabu” under his care. There is on the day or days prior to the court date when he could have done so is
already an indication of the accused’s laxity in the performance of his duties. nature of the object under the custody of petitioner and its street value posed
Such laxity became even worse when he decided to proceed to Pasay City, risks. One of these risks is that the shabu could be taken forcibly by armed
bringing along with him the “shabu”, without police escorts. The alleged fact men, a risk that petitioner was in fact preparing against. The possibility of
that he waited for thirty (30) minutes to look for an alternate escort, without losing the shabu to armed men was evidently a foreseeable event.
taking any further action, is insufficient to absolve accused from liability.
Neither is the accused’s fear of being cited for contempt sufficient justification By all accounts, petitioner had previously undertaken certain measures to
for his irresponsible actions. He certainly could explain to the judge’s safeguard the transportation of the shabu. In fact, during his first trip to the
satisfaction his failure to appear in court as required. court he was accompanied by police escorts; he suggested that the shabu be
deposited with the court, which the court denied due to the absence of a vault;
In the case at bench, the accused could have pursued other options to ensure petitioner tried to look for a police escort on the day he was rescheduled to
the security of the “shabu”. The accused would have waited until alternative deliver the shabu in court, but allegedly to no avail; and he decided to
escorts arrived at the office. A simple telephone call to the office of Judge transport the shabu alone and incognito. Petitioner’s actions underscore the
Sayo informing the latter that the accused would be late would have sufficed. fact that he was fully aware of the inherent danger in transporting the shabu, a
Under the circumstances, the judge would have understood the accused’s fact that defeats his claim that the loss of the shabu to armed robbers was a
predicament and could have called the case at a later hour. Another option is fortuitous event.
not to have gone to the court if no escorts could be procured. Again, a
telephone call to the office of the judge would again have probably sufficed to Concededly, the presence of police escorts would not have necessarily
allay his fears of being cited for contempt. Simply put, the accused failed to deterred the robbers from taking the shabu, but in such a case, petitioner
take all possible actions to ensure the security of the “shabu”; he left too many would have shown due diligence that would controvert his own liability. True,
stones unturned, so to speak. petitioner is not expected to match a holdupper gun for gun. However, what is
simply expected of him is to exhibit a standard of diligence commensurate
Furthermore, the court notes that the accused carried only a gun of a mere with the circumstances of time, person and place.
caliber .22. Indeed, if he were to truly secure his valuable cargo, as was his
bounden duty, he should have carried a more powerful firearm and maybe The scale of the damage sustained by the government because of the loss of
more than one such firearm, the need therefor having become more the shabu cannot be overemphasized. The estimated street value of the shabu
compelling considering that he was to travel alone. It is a matter of common is five million pesos (P5,000,000.00) and the circulation of this illegal
experience that holduppers normally carry high powered firearms.” substance in the market is a major setback in the effort of government to curb
drug addiction. We are thus in complete agreement with the Sandiganbayan
In a last ditch effort to skirt the issue of gross negligence imputed against that the unnecessary risks taken by petitioner in transporting the subject shabu,
petitioner, petitioner claims that the robbery was a fortuitous event. This leading to the eventual loss of this prohibited substance, cannot be
argument must likewise fail since the loss of the shabu to armed men is by no countenanced.
means a fortuitous event. A fortuitous event is defined as an occurrence which
could not be foreseen or which though foreseen, is inevitable. Again, the very
Lastly, petitioner contends that the illegal nature of the shabu prevents the Rollo, pp. 44-46.
courts from basing the penalty on its value. We hold that the Sandiganbayan
did not commit a grievous error when it imposed the penalty based on the Records, p. 313.
value of the shabu. In malversation, the penalty for the offense is dependent
Ibid., p. 56.
on the value of the public funds, money or property malversed. Generally,
when the value is disputed, the court is proscribed from taking judicial notice Ibid., p. 71.
of the value and must receive evidence of the disputed facts with notice to the
parties. However, in the case at bar, the value of the shabu is not in dispute. Ibid., pp. 222-223.
Petitioner subscribed to the stipulation of facts that the street value of the
shabu is five million pesos (P5,000,000.00). As stated earlier, statements Rollo, p. 17.
embodied in the stipulation of facts are judicial admissions and are thereby
binding on the declarant. There is no indication that the admission as to the Sec. 3. Order of trial.-The trial shall proceed in the following order:
value of the shabu was made through palpable mistake and petitioner does not
deny having made such an admission. Thus, the stipulated value of the shabu (a) The prosecution shall present evidence to prove the charge and, in the
is not an improper basis for the imposition of the penalty. proper case, the civil liability.

WHEREFORE, we AFFIRM the appealed decision of the Sandiganbayan (b) The accused may present evidence to prove his defense, and damages, if
convicting the accused Romeo Diego Y de Joya of Malversation of Public any, arising from the issuance of any provisional remedy in the case.
Property and imposing upon him the indeterminate penalty of imprisonment
ranging from ten (10) years and one (1) day of prision mayor, as minimum, to (c) The parties may then respectively present rebutting evidence only, unless
seventeen (17) years, four (4) months and one (1) day of reclusion temporal, the court, in furtherance of justice, permits them to present additional
as maximum in view of the mitigating circumstance of voluntary surrender; to evidence bearing upon the main issue.
pay a fine of five million pesos (P5,000,000.00); and to suffer the penalty of
perpetual special disqualification from holding any public office. (d) Upon admission of the evidence, the case shall be deemed submitted for
decision unless the court directs the parties to argue orally or to submit
Costs against petitioner. memoranda.

SO ORDERED. (e) However, when the accused admits the act or omission charged in the complaint or
information but interposes a lawful defense, the order of trial may be modified accordingly.
Melo, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.
Section 4 of Rule 129 of the Rules of Court states:
Per Associate Justice Narciso S. Nario, Sr. and concurred in by Associate Justices Sabino R.
de Leon and Rodolfo G. Palattao, Fourth Division, Sandiganbayan. “SEC. 4. Judicial Admissions. ---An admission, verbal or written, made by a party in the
course of the proceedings in the same case, does not require proof. The admission may be
contradicted only by showing that it was made through palpable mistake or that no such 2. The penalty of prision mayor in its minimum and medium periods, if the
admission was made”. amount involved is more than 200 pesos but does not exceed 6,000 pesos.
Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal
Revenue, G.R. No. 134467, November 17, 1999.
3. The penalty of prision mayor in its maximum period to reclusion temporal
in its minimum period, if the amount involved is more than 6,000 pesos but is
Records, pp. 56-57. less than 12,000 pesos.

Salamera vs. Sandiganbayan, 217 SCRA 303 (1999), p. 227. 4. The penalty of reclusion temporal in its medium and maximum periods, if
the amount involved is more than 12,000 pesos but is less than 22,000 pesos.
Cabello vs. Sandiganbayan, 197 SCRA 94 (1991), p. 103. If the amount exceeds the latter, the penalty shall be reclusion temporal in its
maximum period to reclusion perpetua.
Diaz vs. Sandiganbayan, 302 SCRA 118 (1999), p. 137.
In all cases, persons guilty of malversation shall also suffer the penalty of
Quibal vs. Sandiganbayan, 244 SCRA 224 (1995), p. 232.
perpetual special disqualification and a fine equal to the amount of the funds
malversed or equal to the total value of the property embezzled.
Rollo, pp. 52-55.

Article 1174, Civil Code. The failure of a public officer to have duly forthcoming any public funds or
property with which his chargeable, upon demand by any duly authorized
Article 217, Revised Penal Code. officer, shall be prima facie evidence that he has put such missing funds or
property to personal uses. (As amended by Rep. Act No. 1060).” (Emphasis
Salamera, supra note12, p. 229. ours)

“Art. 217. Malversation of public funds or property-- Presumption of malversation. Any


public officer who, by reason of the duties of his office, is accountable for public funds or
property, shall appropriate the same, or shall take or misappropriate or shall consent, or
through abandonment or negligence, shall permit any other person to take such public funds
or property, wholly or partially, or shall otherwise be guilty of the misappropriation or
malversation of such funds or property, shall suffer:

1. The penalty of prision correccional in its medium and maximum periods, if


the amount involved in the misappropriation or malversation does not exceed
200 pesos.

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