Malversation of Public Funds or Property

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, 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 two hundred pesos.

2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more than two hundred pesos but does not exceed six thousand pesos.

3. The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if the amount involved is more than six thousand pesos but is less than twelve thousand pesos.

4. The penalty of reclusion temporal, in its medium and maximum periods, if the amount involved is more than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the property embezzled.

The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal use. (As amended by RA 1060).

ELEMENTS:
1. That the offender be a public officer (or private person if entrusted with public funds or if in connivance with public officers);
2. That he had the custody or control of funds or property (if not accountable for the funds, crime committed is theft or qualified theft);
3. That those funds or property were public funds or property (even if private funds, they become public if attached, seized, deposited or commingled with public funds); and
4. That he...
a. Appropriated the funds or property
b. Took or misappropriated them
c. Consented or, through abandonment or negligence, permitted any other person to take such public funds or property.

It is not necessary that the offender profited by his malversation. His being remiss in the duty of safekeeping public funds violates the trust reposed.

Public funds taken need not be misappropriated.

Malversation is otherwise called embezzlement.

It can be committed either with malice or through negligence or imprudence (penalty is the same).

In determining whether the offender is a public officer, what is controlling is the nature of his office and not the designation - contemplates public officer who receives money or property from government for which he is bound to account, must have authority to collect or receive

The funds or property must be received in an official capacity. Otherwise, the crime committed is estafa.

Government funds include revenue funds and trust funds. If funds or property placed in custody of public officer, and they are accountable, such funds or property partake nature of a public fund.

A public officer who has qualified charge of gov’t property without authority to part with its physical possession upon order of an immediate superior cannot be held liable under this article.

A qualified charge of properties does not qualify to possession contemplated in the crime of malversation where the possessor is only accountable to his immediate superior and not the government; his superior is the one accountable to the government

Private individuals can also be held liable for malversation under  2 circumstances:
1. when they are in conspiracy with public officers; and
2. when they have charge of national, provincial or municipal funds, revenues or property in any capacity.

In malversation through negligence, the negligence of the accountable public officer must be positively and clearly shown to be inexcusable, approximating fraud or malice. The measure of negligence to be observed is the standard of care commensurate with the occasion.

When malversation is not committed through negligence, lack of criminal intent or good faith is a defense.

The failure of a public officer to have any duly forthcoming public funds or property upon demand, by any authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal use. However, if at the very moment when the shortage is discovered, the accountable officer is notified, and he immediately pays the amount from his pocket, the presumption does not arise.

Returning the embezzled funds is not an exempting circumstance but only mitigating.

There is also no malversation when the accountable officer is obliged to go out of his office and borrow the amount corresponding to the shortage and later, the missing amount is found in an unaccustomed place.

A person whose negligence made possible the commission of malversation by another can be held liable as a principal by indispensable cooperation.

Demand by or damage to the government are not necessary elements of the crime of malversation.

Technical malversation is not included in the crime of malversation.


Presumption of misappropriation:
When a demand is made upon an accountable officer and he cannot produce the fund or property involved, there is a prima facie presumption that he had converted the same to his own use.

There must be indubitable proof that things unaccounted for exists. Audit should be made to determine if there was a shortage. The audit must be complete and trustworthy. If there is a doubt, the presumption does not arise.

People v. Hipol, GR 140549, 7/22/03
The fact that the obligation to deposit the collections of the City Treasurer's Office is not covered by appellant's official job description is of no legal consequence in a prosecution for Malversation. What is essential is that appellant had custody or control of public funds by reason of the duties of his office.

Quizo v. Sandiganbayan
The accused incurred shortage (P1.74) mainly because the auditor disallowed certain cash advances the accused granted to employees. But on the same date that the audit was made, he partly reimbursed the amount and paid it in full three days later. The Supreme Court considered the circumstances as negative of criminal intent. The cash advances were made in good faith and out of goodwill to co-employees which was a practice tolerated in the office. There was no negligence, malice, nor intent to defraud.

Bar Exam Question (1994)

Randy, an NBI agent, was issued by the NBI an Armalite rifle (Ml6) and a Smith and Wesson Revolver. Cal. 38. After a year, the NBI Director made an inspection of all the firearms issued. Randy, who reported for work that morning, did not show up during the inspection. He went on absence without leave (AWOL). After two years, he surrendered to the NBI the two firearms issued to him. He was charged with malversation of government property before the Sandiganbayan. Randy put up the defense that he did not appropriate the Armalite rifle and the revolver for his own use, that the delay in accounting for them does not constitute conversion and that actually the firearms were stolen by his friend, Chiting. Decide the case.

Suggested Answer:

Randy is guilty as charged under Art. 217, RPC. He is accountable for the firearms they issued to him in his official capacity. The failure of Randy to submit the firearms upon demand created the presumption that he converted them for his own use. Even if there is no direct evidence of misappropriation, his failure to account for the government property is enough factual basis for a finding of malversation. Indeed, even his explanation that the guns were stolen is incredible. For if the firearms were actually stolen, he should have reported the matter immediately to the authorities. (People vs. Baguiran ,20 SCRA 453; Felicilda us. Grospe, GR No. 10294, July 3, 1992)

Bar Exam Question (1999)

What constitutes the crime of malversation of public funds or property? 

Suggested Answer:

Malversation of public funds or property is committed by any public officer who, by reason of the duties of his office, is accountable for public funds or property, 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. (Art, 217, RPC)

Bar Exam Question (1999)

A Municipal Treasurer, accountable for public funds or property, encashed with public funds private checks drawn in favor of his wife. The checks bounced, the drawer not having enough cash in the drawee bank. The Municipal Treasurer, in encashing private checks from public funds, violated regulations of his office. Notwithstanding restitution of the amount of the checks, can the Municipal Treasurer nevertheless be criminally liable? What crime did he commit? Explain. 

Suggested Answer:

Yes, notwithstanding the restitution of the amount of the check, the Municipal Treasurer will be criminally liable as
restitution does not negate criminal liability although it may be considered as a mitigating circumstance similar or analogous to voluntary surrender. (People vs. Velasquez, 73 Phil 98), He will be criminally liable for malversation.
However, if the restitution was made immediately, under vehement protest against an imputation of malversation and without leaving the office, he may not be criminally liable.

Bar Exam Question (2001)

Alex Reyes, together with Jose Santos, were former warehousemen of the Rustan Department Store. In 1986, the PCGG sequestered the assets, fund, and properties of the owners-incorporators of the store, alleging that they constitute "Ill-gotten wealth" of the Marcos family. Upon their application, Reyes and Santos were appointed as fiscal agents of the sequestered firm and they were given custody and possession of the sequestered building and its contents, including various vehicles used in the firm's operations. After a few months, an inventory was conducted and it was discovered that two (2) delivery vans were missing. After demand was made upon them, Reyes and Santos failed to give any satisfactory explanation why the vans were missing or to turn them over to the PCGG; hence, they were charged with Malversation of Public Property. During the trial, the two accused claimed that they are not publicly accountable officers and, if any crime was committed, it should only be Estafa under Art. 315, par. l(b) of the Revised Penal Code. What is the proper offense committed? State the reason(s) for your answer. 

Suggested Answer:

The proper offense committed was Malversation of Public Property, not estafa, considering that Reyes and Santos, upon their application, were constituted as "fiscal agents" of the sequestered firm and were "given custody and possession" of the sequestered properties, including the delivery vans which later they could not account for. They were thus made the depositary and administrator of properties deposited by public authority and hence, by the duties of their office/position, they are accountable for such properties. Such properties, having been sequestered by the Government through the PCGG, are in custodia legis and therefore impressed with the character of public property, even though the properties belong to a private individual (Art. 222, RPC). The failure of Reyes and Santos to give any satisfactory explanation why the vans were missing, is prima facie evidence that they had put the same to their personal use.