This case has been cited 2 times or more.
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2008-02-04 |
AZCUNA, J. |
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| &Management The MOA shows that LTFI is "allowed to borrow funds directly from the Provincial Government to fund Lingkod Tarlac Foundation projects provided the projects are livelihood projects under the Rural Industrialization Can Happen Program." Moreover, the agreement stipulates under the "Conditions for Release of Funds" that the Province of Tarlac "shall release in lump sum the appropriate funds for the approved projects covered by individual loan documents upon signing of the respective loan agreement...."[15]In Crim. Case No. 16794, the fund alleged to have been malversed in the amount of P1,180,496.48 represents the discrepancy of the cost of the Juki embroidery machines as listed in the books of LTFI and the amount actually paid to open the letter of credit for the payment of the machines. In the books of LTFI, the cost of the Juki embroidery machines was listed as P8,860,000, while the amount paid to open the letter of credit for the payment of the machines was P7,679,530.52. Petitioner Flores was held liable only up to the amount of P1,132,739.In Crim. Case No. 16795, the fund alleged to have been malversed in the amount of P58,000 is the money left (P47,730) in PNB S/A No. 490-555744-6 after the withdrawal of the purchase price of the Juki embroidery machines, plus interest. The amount of P58,000 was withdrawn upon the authorization of petitioner Flores. The withdrawal was neither reflected as deposit in the bank accounts of LTFI nor spent by it.In both cases, the money trail proven by the prosecution shows that the subject funds or the money used for the purchase of the Juki embroidery machines came from the release of the Province of Tarlac through petitioner Ocampo of NALGU funds in the amount of P11.5 million to LTFI on October 24, 1988. The release of the funds was covered by a loan document in accordance with the MOA which states that the Province of Tarlac "shall release in lump sum the appropriate funds for the approved projects covered by individual loan documents upon signing of the respective loan agreement...."The Report on the Special Audit of LTFI[16] stated: . . . For the period July 1988 to December 1989, LTFI received a total of P56.6 million which consisted of six releases and covered by individual loan agreements, as follows: Date Amount 08 30 88 P7, 000, 000 10 24 88 11,500, 000 12 08 88 1,500, 000 02 22 89 4,000, 000 04 12 89 18,000, 000 06 14 89 12,718, 403 Total P56,618, 403 xxxOn October 24, 1988, the Provincial Government of Tarlac approved and released an amount of P11,500,000 to Lingkod Tarlac Foundation, Inc. (LTFI) for the Rural Industrialization Can Happen (RICH) Program. Of the amount released, P7,023,836 was intended for the purchase of 400 sets embroidery machines for the Embroidery Skills Training Project.[17] Based on the foregoing, it is clear that the funds released by the Province of Tarlac, including the money allegedly malversed by petitioners in Crim. Case Nos. 16794 and 16795, were in the nature of a loan to LTFI.Art. 1953 of the Civil Code provides that "[a] person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality."Hence, petitioner Ocampo correctly argued that the NALGU funds shed their public character when they were lent to LTFI as it acquired ownership of the funds with an obligation to repay the Province of Tarlac the amount borrowed. The relationship between the Province of Tarlac and the LTFI is that of a creditor and debtor. Failure to pay the indebtedness would give rise to a collection suit.The Sandiganbayan convicted petitioner Ocampo of malversation of public funds under Art. 217 of the Revised Penal Code for his "gross and inexcusable negligence" in not setting up safeguards in accordance with Sec. 203(t) of the Local Government Code[18] for the proper handling of the NALGU funds in the hands of LTFI which resulted in the disappearance of P1,132,739 allegedly malversed in Crim. Case No. 16794 and the disappearance of P58,000 in Crim. Case No. 16795.In his petition, petitioner Ocampo states that he made sure that proper safeguards were in place within LTFI to ensure the proper handling of NALGU funds by LTFI. On August 5, 1988, before the Province of Tarlac and LTFI entered into the MOA, LTFI's Articles of Incorporation were amended to add the following: TENTH: That no part of the net income of the Foundation shall inure to the benefit of any member of the Foundation and that at least seventy percent (70%) of the funds shall be used for the projects and not more than thirty percent (30%) of said funds shall be used for administrative purposes. Petitioner Ocampo argues that since he had resigned from LTFI both as chairperson and as trustee on June 22, 1988, he ceased to become accountable for the handling of the NALGU funds after the same were loaned to LTFI pursuant to the MOA dated August 8, 1988. Consequently, he may not be held criminally liable for disbursements made by LTFI since he had nothing to do with its operations after his resignation.Malversation may be committed by appropriating public funds or property; by taking or misappropriating the same; by consenting, or through abandonment or negligence, by permitting any other person to take such public funds or property; or by being otherwise guilty of the misappropriation or malversation of such funds or property.[19]The essential elements common to all acts of malversation under Art. 217 of the Revised Penal Code[20] are: (a) That the offender be a public officer; (b) That he had the custody or control of funds or property by ;reason of the duties of his office;; (c) That those funds or property were ;public; funds or property for which he was accountable; (d) That he appropriated, took, misappropriated or consented or, through abandonment or negligence, permitted another person to take them.[21] There can be no malversation of public funds by petitioner Ocampo in the instant cases since the loan of P11.5 million transferred ownership and custody of the funds, which included the sum of money allegedly malversed, to LTFI for which Ocampo could no longer be held accountable. Thus, contrary to the allegation of the Office of the Special Prosecutor, petitioner Ocampo cannot be held culpable for malversation committed through negligence in adopting measures to safeguard the money of the Province of Tarlac, since the same were neither in his custody nor was he accountable therefor after the loan to LTFI.Thus, petitioner Flores, as the executive director of LTFI, cannot also be held liable for malversation of public funds in a contract of loan which transferred ownership of the funds to LTFI making them private in character. Liwanag v. Court of Appeals[22] held: . . . in a contract of loan once the money is received by the debtor, ownership over the same is transferred. Being the owner, the borrower can dispose of it for whatever purpose he may deem proper. The Sandiganbayan erred when it stated that the intention of the parties was for the funds to remain public, citing the MOA which allegedly provided, thus: The Province shall have the right to have access to all resources and records of either LTF[I] or BUILD and may conduct COA examination or audit on any or all matter affecting the loans or assets covered by this agreement and funds from the Province of Tarlac. A review of the MOA did not show the presence of such provision. But the cited provision is contained in the TMOA, which was later entered into by the Province of Tarlac, LTFI and BUILD, whereby LTFI transferred part of its obligation to BUILD.What is controlling in the instant cases is that the parties entered into a contract of loan for each release of NALGU funds. The second release on October 24, 1988 included the subject funds in controversy. By virtue of the contract of loan, ownership of the subject funds was transferred to LTFI making them private in character, and therefore not subject of the instant cases of malversation of public funds.The Court notes that the obligation of LTFI to repay the NALGU Funds of P56,618,403 obtained by it from the Province of Tarlac pursuant to the MOA was extinguished as follows: (1) BUILD assumed LTFI's principal loan of P40 million; (2) LTFI ceded, transferred and assigned to the Province of Tarlac all the rights and interests of LTFI in certain loans including interests, certificate of time deposit and certain Juki embroidery machines in the total amount of P16,618,403. | |||||
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2008-02-04 |
AZCUNA, J. |
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| Thus, petitioner Flores, as the executive director of LTFI, cannot also be held liable for malversation of public funds in a contract of loan which transferred ownership of the funds to LTFI making them private in character. Liwanag v. Court of Appeals[22] held:. . . in a contract of loan once the money is received by the debtor, ownership over the same is transferred. Being the owner, the borrower can dispose of it for whatever purpose he may deem proper. | |||||