Frias, Sr. vs. People

A municipal mayor who receives cash advances under his authority and as payee is an accountable public officer required to liquidate or return them, and his failure to do so for two months after the account should have been rendered violates Article 218 of the Revised Penal Code even if he gave the proceeds to another official.

Petitioner Hermes E. Frias, Sr. was the municipal mayor of Capas, Tarlac. Local government officers who by duty possess or have custody of local government funds are accountable for their safekeeping under the Government Auditing Code and the Local Government Code, while Article 218 of the Revised Penal Code criminalizes an accountable officer’s failure to render an account to the COA or provincial auditor for two months after the account should have been rendered.

Petitioner Hermes E. Frias, Sr. was the municipal mayor of Capas, Tarlac. The Information charged him with violation of Article 218 of the Revised Penal Code, alleging that on or about December 18, 1997, or sometime prior or subsequent thereto, in Capas, Tarlac, as an accountable officer and municipal mayor, after the COA required him to settle his disallowed cash advances under Voucher Nos. 101-97-09-878 and 101-97-11-1156 for P50,000 and P950,000, respectively, he willfully, unlawfully, and feloniously failed to render accounts for two months after such accounts should have been rendered, to the damage and prejudice of the government in those amounts. He pleaded not guilty during arraignment; after pre-trial, trial on the merits followed. The prosecution presented Tarlac provincial auditor Lualhati C. Abesamis of the COA as its sole witness.

Abesamis testified that she and her team, in the course of their audit examination covering the period from July 1, 1997 to November 20, 1997, discovered that petitioner, on behalf of the Municipality of Capas, made cash advances amounting to P50,000 and P950,000, or a total of P1,000,000. The P50,000 was covered by Voucher No. 101-97-09-878 dated September 12, 1997 and Land Bank Check No. 157338 payable to Dr. Hermes E. Frias, Sr. dated September 12, 1997; the P950,000 was covered by Voucher No. 101-97-11-1156 dated November 18, 1997 and Land Bank Check No. 254233 payable to Dr. Hermes E. Frias, Sr. dated November 17, 1997. The cash advances were allocated for the maintenance of economic enterprises and the augmentation of the general fund, respectively; according to petitioner, the first account pertained to the maintenance of the Capas public market. Abesamis and her team found the purposes too vague and disallowed the cash advances because petitioner failed to indicate a specific legal purpose.

On December 18, 1997, Abesamis notified petitioner, municipal treasurer Norma R. Panganiban, and municipal accountant Rolando T. Domingo of the disallowance and directed them to settle the P1,000,000 immediately. Neither Panganiban nor Domingo returned the amount. Abesamis then requested petitioner to settle the disallowed cash advances, but he refused on the ground that he had given the proceeds to Panganiban. Abesamis pointed out that the cash advances were made under petitioner’s authority, that the checks were payable to him, and that he admitted receiving them; even if he gave the proceeds to Panganiban, he was still required to return the P1,000,000. Petitioner acknowledged the COA’s notice of disallowance on January 12, 1998. Notwithstanding Abesamis’s demand, petitioner did not account for the cash advance, and Abesamis recommended the filing of the criminal complaint against him.

In his defense, petitioner argued that he was not liable for the cash advances because he did not derive any benefit from them. According to him, Panganiban alone benefited because she used the P1,000,000 to settle her existing deficiencies with the COA. Petitioner pointed out that the COA, upon Abesamis’s recommendation, also filed a criminal complaint against Panganiban.

Petitioner had until January 20, 1998 to settle the disallowed cash advances; to escape liability under Article 218, he should have settled them on or before March 20, 1998. When Abesamis demanded an accounting, petitioner could have compelled Panganiban to render the necessary accounting or prepared it himself, but he did neither. Asked why he did not liquidate the P1,000,000, petitioner gave the excuse that he was too busy preparing for the forthcoming elections and for his defense in a murder case. He never settled the disallowed cash advances.

• Due Process / Sufficiency of Information: Petitioner asserted that he was deprived of due process because the Information against him failed to identify his acts or omissions which constituted a violation of Article 218 of the Revised Penal Code.
• Accountable Public Officer: Petitioner argued that the Sandiganbayan failed to establish that he, a municipal mayor, was an accountable officer and failed to identify the particular law or regulation which required him to render an account.
• Restitution: Petitioner assailed the restitution of P1,000,000 to the Government for lack of legal basis.

• Due Process / Sufficiency of Information: Whether petitioner was deprived of due process because the Information failed to identify the acts or omissions constituting a violation of Article 218 of the Revised Penal Code.
• Accountable Public Officer: Whether the Sandiganbayan established that petitioner, a municipal mayor, was an accountable public officer and identified the particular law or regulation requiring him to render an account.
• Restitution: Whether petitioner is liable to return P1,000,000 to the Government.
• Penalty: Whether the penalty imposed by the Sandiganbayan should be modified under the Indeterminate Sentence Law and Article 218 of the Revised Penal Code.

• Due Process / Sufficiency of Information: No. Petitioner waived the right to question the Information’s sufficiency by entering a plea and participating in trial; in any event, the Information adequately stated the elements of Article 218.
• Accountable Public Officer: Yes. As municipal mayor, petitioner received and had possession of the cash advances under his authority and as payee, making him accountable under the Local Government Code and Government Auditing Code; Section 347 and COA Circular 97-002 required liquidation.
• Restitution: Yes. Because the cash advances were disallowed and petitioner failed to return the P1,000,000 within the allowable period, the funds were deemed illegally or improperly used, and he was liable to restitute them without prejudice to recovery from solidarily liable persons.
• Penalty: Modified. The SC imposed a minimum of six months of arresto mayor in its maximum period to a maximum of one year, eight months and 20 days of prision correccional in its minimum period, plus a P6,000 fine and P1,000,000 indemnity.

• Due Process / Sufficiency of Information: The SC held that the right to question the sufficiency of an Information is not absolute. An accused waives it if he fails to object upon arraignment or during trial, and evidence presented during trial can cure the defect. Petitioner first questioned the Information only on appeal; he had voluntarily entered a plea and participated in trial. Independently, the Information adequately informed him of the charge: it stated that he was an accountable officer and municipal mayor, identified the two vouchers and amounts, alleged the COA’s requirement to settle the disallowed advances, and alleged failure to render accounts for two months after they should have been rendered. These are the elements of Article 218. Thus, there was no due process violation.

• Accountable Public Officer: Under Section 340 of the Local Government Code, local government officials become accountable either because of the nature of their functions or on account of their participation in the use or application of public funds. Under Section 102 of the Government Auditing Code, the head of an agency is immediately and primarily responsible for all government funds and property pertaining to his agency; under Section 101, every officer whose duties permit or require possession or custody of government funds is accountable for their safekeeping. The Local Government Code also provides that municipal mayors are chief executives of their municipalities. In Barriga vs. Sandiganbayan, the SC held that public officers are accountable if, as part of their duties, they receive public funds or property which they are bound to account for but fail to do so. Petitioner never denied receiving the checks; he admitted that the advances were made under his authority, that he was the payee, and that he received them. As municipal mayor, he received and had possession of the cash advances and was thus accountable. Section 347 of the Local Government Code requires local treasurers, accountants, and other local accountable officers to render their accounts under COA regulations, while Section 5 of COA Circular 97-002 requires liquidation of cash advances, with petty and field operating expenses to be liquidated within 20 days after the end of the year and all cash advances fully liquidated at the end of each year, with any unexpended balance refunded. Petitioner had until January 20, 1998 to settle the disallowed advances; Article 218 criminal liability arose after two months, by March 20, 1998. He did not return the amount. He could have compelled Panganiban to render the necessary accounting or prepared it himself, but he did neither; his excuses that he was busy with the elections and his murder case did not excuse him. He was therefore guilty.

• Restitution: Because the cash advances were disallowed and petitioner failed to return the P1,000,000 within the allowable period, the funds were deemed illegally or improperly used or applied. Section 342 of the Local Government Code provides that an accountable officer is not relieved of liability for illegal or improper use of local funds by acting upon the direction of a superior unless he registers his objection in writing; the superior directing or the department head participating is jointly and severally liable with the accountable officer. Petitioner was liable to restitute the P1,000,000 to the Government without prejudice to his right to recover it from persons who were solidarily liable with him. Article 1217 of the Civil Code allows a solidary debtor who paid to claim from co-debtors the share corresponding to each.

• Penalty: Article 218 of the Revised Penal Code punishes the offense with prision correccional in its minimum period, or a fine ranging from P200 to P6,000, or both. Under the Indeterminate Sentence Law, the maximum penalty is that which could be properly imposed under the Revised Penal Code; absent modifying circumstances, the penalty should be imposed in its medium period. The medium of prision correccional in its minimum period is one year, one month and 11 days to one year, eight months and 20 days. The minimum term is taken from the minimum period of the penalty next lower in degree, arresto mayor in its maximum period, or four months and one day to six months. The SC modified the Sandiganbayan’s penalty to a minimum of six months of arresto mayor in its maximum period to a maximum of one year, eight months and 20 days of the medium of prision correccional in its minimum period, with accessory penalties, and added a P6,000 fine. It also ordered indemnity of P1,000,000 and costs.

• Accountable public officer — A local government official is accountable either because of the nature of his functions or because of his participation in the use or application of public funds; the head of an agency is immediately and primarily responsible for all government funds and property pertaining to the agency. The SC applied this to a municipal mayor who received cash advances under his authority and as payee, even if he gave the proceeds to the municipal treasurer.
• Waiver of objection to sufficiency of Information — The right to question an Information’s sufficiency is not absolute; it is waived if the accused fails to object at arraignment or during trial, and trial evidence may cure the defect. The SC applied this because petitioner pleaded and participated in trial before raising the issue on appeal.
• Liquidation and return of disallowed cash advances — An accountable officer must liquidate cash advances within the periods fixed by COA rules; if disallowed, the officer must return the amount. Failure to render an account or return the amount for two months after the account should have been rendered violates Article 218 of the Revised Penal Code. The SC applied this because petitioner had until January 20, 1998 to settle and became criminally liable by March 20, 1998.
• Solidary liability for illegal use of local funds — An accountable officer is not relieved of liability for illegal or improper use of local funds by acting on a superior’s direction unless he registers a written objection; the superior or department head participating is jointly and severally liable. The SC applied this to hold petitioner liable to restitute P1,000,000 without prejudice to recovery from solidarily liable persons.
• Indeterminate Sentence Law in Article 218 cases — The maximum term is taken from the penalty properly imposed under the Revised Penal Code, absent modifying circumstances in its medium period; the minimum is taken from the penalty next lower in degree. The SC applied this to modify the penalty and add the fine.

• “The right to question the sufficiency of an Information is not absolute. An accused is deemed to have waived this right if he fails to object upon his arraignment or during trial. In either case, evidence presented during trial can cure the defect in the Information.” — The SC used this to reject petitioner’s due process challenge because he first questioned the Information only after pleading and trial.
• “Local government officials become accountable public officers either (1) because of the nature of their functions or (2) on account of their participation in the use or application of public funds.” — This is the SC’s formulation of accountability under Section 340 of the Local Government Code, applied to the municipal mayor who received the cash advances.
• “All cash advances shall be fully liquidated at the end of each year. Except for petty cash funds, the accountable officer shall refund any unexpended balance to the Cashier/Collecting Officer who will issue the necessary official receipt.” — The SC cited this COA Circular 97-002 rule to establish the duty to liquidate and refund, which petitioner failed to do.
• “Petitioner is liable to restitute the P1,000,000 to the Government without prejudice, however, to his right to recover it from persons who were solidarily liable with him.” — This states the restitution holding and preserves petitioner’s recourse against solidarily liable persons.

• Barriga vs. Sandiganbayan, G.R. Nos. 161784-86, April 26, 2005, 457 SCRA 301 — Followed; held public officers accountable if, as part of their duties, they receive public funds or property bound to account for but fail to do so.
• People vs. Galido, G.R. No. 148689-92, March 30, 2004, 426 SCRA 502 — Cited for the rule that an accused waives objection to the Information’s sufficiency by failing to object at arraignment or during trial and that trial evidence may cure the defect.
• Arriola vs. Sandiganbayan, G.R. No. 165711, June 30, 2006, 494 SCRA 344 — Cited in support of the accountable-officer rule under the Government Auditing Code.

• Article 218, Revised Penal Code — Criminalizes an accountable officer’s failure to render an account to the COA or provincial auditor for two months after the account should have been rendered; penalizes with prision correccional in its minimum period, or a fine from P200 to P6,000, or both. Applied to convict petitioner and fix the penalty.
• Section 340, Local Government Code — Makes any local government officer whose duty permits or requires possession or custody of local government funds accountable and responsible for safekeeping; other local officials may be held accountable through participation in the use or application of funds. Applied to hold petitioner accountable as municipal mayor.
• Section 444(a), Local Government Code — Provides that the municipal mayor is the chief executive of the municipal government. Applied to identify petitioner as the head of the municipality.
• Section 101, Government Auditing Code — Makes every officer whose duties permit or require possession or custody of government funds accountable for them and their safekeeping. Applied to petitioner.
• Section 102, Government Auditing Code — Makes the head of an agency immediately and primarily responsible for all government funds and property pertaining to his agency. Applied to petitioner as municipal mayor.
• Section 347, Local Government Code — Requires local treasurers, accountants, and other local accountable officers to render their accounts within the time, form, style, and content and under the regulations prescribed by the COA. Applied to petitioner’s duty to liquidate.
• Section 5, COA Circular No. 97-002 — Requires accountable officers to liquidate cash advances, with petty and field operating expenses to be liquidated within 20 days after the end of the year and all cash advances fully liquidated at the end of each year, with any unexpended balance refunded. Applied to set petitioner’s January 20, 1998 deadline.
• Section 342, Local Government Code — Provides that an accountable officer is not relieved of liability for illegal or improper use of local funds by acting on a superior’s direction unless he registers a written objection; the superior or participating department head is jointly and severally liable. Applied to hold petitioner liable to restitute the P1,000,000.
• Article 1217, Civil Code — Provides that payment by one solidary debtor extinguishes the obligation and that the payer may claim from co-debtors the share corresponding to each. Applied to make petitioner’s restitution liability without prejudice to recovery from solidarily liable persons.
• Indeterminate Sentence Law — Requires the maximum penalty to be that which could be properly imposed under the Revised Penal Code and the minimum to be taken from the penalty next lower in degree. Applied to modify the penalty.
• Article 43, Revised Penal Code — Provides the accessory penalties of prision correccional. Applied through the accessory penalties in the sentence.
• Rule 125 in relation to Rule 45, Rules of Court — Governs the petition for review on certiorari filed by petitioner. Applied as the procedural vehicle for the SC’s review.