Hernan vs. Sandiganbayan

The passage of a new law (Republic Act No. 10951) that reduces the penalties for crimes where the penalty is based on the value of property constitutes an exceptional circumstance that allows the reopening of a final and executory judgment solely for the purpose of modifying the penalty to conform with the new, more favorable law, applying the principle of retroactivity of penal statutes; furthermore, under Republic Act No. 10707, an accused may apply for probation when a non-probationable penalty is modified to a probationable penalty on appeal or review.

The case arose from an audit conducted by the Commission on Audit (COA) in 1996 on the accounts of petitioner Ophelia Hernan, an accountable officer at the Department of Transportation and Communication (DOTC), Cordillera Administrative Region. The audit revealed that two deposit slips totaling ₱92,648.20 lacked bank validation stamps. While petitioner accounted for ₱81,348.20, she failed to explain the whereabouts of ₱11,300.00, leading to a criminal complaint for malversation of public funds under Article 217 of the Revised Penal Code.

• Petitioner Ophelia Hernan was employed by the Department of Transportation and Communication (DOTC), Cordillera Administrative Region (CAR), Baguio City, initially as an accounting clerk in October 1982, and subsequently promoted to Supervising Fiscal Clerk in September 1984, with designation as Cashier, Disbursement and Collection Officer.
• As an accountable officer, petitioner received cash collections from customers for telegraphic transfers, toll fees, and special message fees, which she was required to deposit in the DOTC account at the Land Bank of the Philippines (LBP), Baguio City Branch.
• On December 17, 1996, COA Auditor Maria Imelda Lopez conducted a cash examination and discovered deposit slips dated September 19, 1996 (₱11,300.00) and November 29, 1996 (₱81,348.20) that lacked the LBP stamp of receipt and machine validation.
• Verification with LBP revealed that no deposits were made by petitioner on September 19, 1996 for ₱11,300.00; the only deposit on that date was from the DOTC Ifugao office at the Lagawe branch.
• Petitioner accounted for the ₱81,348.20 remittance but failed to account for the ₱11,300.00; when demanded by COA to pay the amount, she refused, claiming she deposited the money with teller Catalina Ngaosi but left the deposit slips to be validated later, retrieving them at 3:00 PM with only the teller's initials and no machine validation.
• Petitioner claimed she kept the deposit slips in her vault and only discovered the non-remittance during the COA cash count; she filed an estafa complaint against bank personnel which was eventually dismissed.
• The prosecution presented testimonies of COA auditors Maria Lopez and Sherelyn Narag, and LBP employees Rebecca Sanchez, Catalina Ngaosi, and Nadelline Orallo, establishing that the ₱11,300.00 was never credited to the DOTC account.
• The defense presented only petitioner's testimony, failing to present her supervisor Cecilia Paraiso who allegedly accompanied her to the bank, and failed to present documentary evidence during trial to support her claim that the Lagawe deposit was actually hers.

• The Sandiganbayan committed grave abuse of discretion in concluding that the motion to reopen was filed out of time despite extraordinary and exceptional circumstances, specifically the alleged failure of counsel to receive the August 31, 2010 Resolution due to notice being sent to her old office address in La Trinidad, Benguet rather than her new address at the Public Attorney's Office in Tayug, Pangasinan.
• The entry of judgment dated June 26, 2013 was premature because counsel was not properly notified of the Resolution denying the Motion for Reconsideration, citing People v. Chavez.
• The Sandiganbayan erred in finding that the additional evidence intended to be presented (affidavit of John L. Ziganay and deposit slips) had already been passed upon by the trial court, when in fact these were newly discovered evidence showing that the ₱11,300.00 deposit at the Lagawe branch was actually hers and not by Lanie Cabacungan.
• The motions filed were not prohibited second and third motions for reconsideration because they raised new grounds and sought to present additional evidence not previously available.
• The Court should relax the strict application of procedural rules to prevent a miscarriage of justice, as petitioner was prejudiced by the negligence of her former counsel who failed to present crucial witnesses and documents during trial.

• The Office of the Special Prosecutor argued that certiorari under Rule 65 is an improper remedy; the proper remedy is a petition for review on certiorari under Rule 45 since the assailed resolutions are final orders that completely dispose of the proceedings.
• The entry of judgment was not premature; it is the duty of counsel to inform the court officially of any change in address, and the indication of a new address in the Motion for Reconsideration does not constitute proper and adequate notice to the court.
• Petitioner admitted having received the subject resolution "sometime in September or October 2010" and could have informed her counsel thereof; her negligence and that of her counsel in failing to monitor the case status is inexcusable.
• The motion to reopen was properly denied because it was filed after the judgment had become final and executory on June 26, 2013, violating the first requisite of Section 24, Rule 119 that reopening must be before finality of judgment.
• The additional evidence should have been presented during trial before the RTC; the Sandiganbayan correctly ruled that it cannot receive evidence as it is not a trial court.
• The presumption of malversation under Article 217 of the Revised Penal Code was not overcome; petitioner failed to satisfactorily explain the missing funds upon demand.

• Procedural Issues:
  • Whether a petition for certiorari under Rule 65 is the proper remedy to assail final orders of the Sandiganbayan denying motions to reopen a case, or whether the proper remedy is a petition for review on certiorari under Rule 45.
  • Whether the entry of judgment was premature due to alleged lack of notice to counsel where notice was sent to the old address on record.
  • Whether the motion to reopen and subsequent petition for reconsideration constitute prohibited second and third motions for reconsideration under Section 5, Rule 37 of the Rules of Court.
  • Whether the Sandiganbayan committed grave abuse of discretion in denying the motion to reopen on the ground that it was filed after finality of judgment.
• Substantive Issues:
  • Whether the passage of Republic Act No. 10951, which reduced the penalties for malversation involving amounts not exceeding ₱40,000.00, constitutes an exceptional circumstance warranting the reopening of a final and executory judgment to modify the penalty imposed.
  • Whether the reduced penalty under Republic Act No. 10951 applies retroactively to final judgments of conviction.
  • Whether petitioner is entitled to the benefits of the Probation Law under Republic Act No. 10707 as a result of the modified penalty.

• Procedural:
  • Certiorari under Rule 65 is an improper remedy when the assailed orders are final orders that completely dispose of the proceedings; the proper remedy is a petition for review on certiorari under Rule 45 of the Rules of Court.
  • The entry of judgment was not premature; courts cannot be expected to take judicial notice of every change of counsel's address, and it is the duty of counsel to officially inform the court of any change in address. The indication of a new address in a motion does not constitute proper notice. Moreover, petitioner admitted receiving the resolution and had the responsibility to inform her counsel.
  • The motions filed constitute prohibited pleadings; courts look to the substance rather than the title of pleadings, and the "Urgent Motion to Reopen" and "Petition for Reconsideration" were in effect second and third motions for reconsideration raising grounds already previously passed upon.
  • The Sandiganbayan did not commit grave abuse of discretion in denying the motion to reopen because it was filed on July 26, 2013, after the judgment became final on June 26, 2013, and the requirements of Section 24, Rule 119 (reopening before finality) were not met.
• Substantive:
  • While the doctrine of finality of judgment generally renders final judgments immutable and unalterable, the passage of Republic Act No. 10951 constitutes an exceptional circumstance warranting the reopening of the case solely to modify the penalty to conform with the new law.
  • Republic Act No. 10951 applies retroactively to final judgments because it is favorable to the accused; under Article 22 of the Revised Penal Code, penal laws are retroactive provided they do not prejudice substantial rights or enable the conviction of the accused for an act not previously penalized.
  • For malversation involving ₱11,300.00 (not exceeding ₱40,000.00), the penalty is modified from prision mayor to prision correccional in its medium and maximum periods (2 years, 4 months and 1 day to 6 years).
  • With one mitigating circumstance (voluntary surrender) and no aggravating circumstances, the maximum term is fixed at 3 years, 6 months and 20 days of prision correccional, and the minimum term under the Indeterminate Sentence Law is fixed at 6 months of arresto mayor.
  • Under Section 1 of Republic Act No. 10707 (amending Presidential Decree No. 968), an accused may apply for probation when a judgment imposing a non-probationable penalty is modified through the imposition of a probationable penalty (not more than 6 years maximum imprisonment).

• Doctrine of Finality of Judgment — Judgments that have become final and executory are immutable and unalterable; they may no longer be modified in any respect. Exceptions include correction of clerical errors, nunc pro tunc entries causing no prejudice, void judgments, and circumstances transpiring after finality rendering execution unjust and inequitable. In this case, the passage of a favorable amendatory law (RA 10951) constitutes an exceptional circumstance warranting modification of the penalty despite finality.
• Retroactivity of Penal Laws — Penal laws are given retroactive effect provided they are favorable to the accused and do not prejudice substantial rights or enable conviction for an act not previously penalized. The Court applied RA 10951 retroactively to reduce the penalty even though the judgment was already final and executory.
• Presumption of Malversation — Under Article 217 of the Revised Penal Code, the failure of a public officer to have duly forthcoming any public funds with which he is chargeable, upon demand by any duly authorized officer, constitutes prima facie evidence that he has put such missing funds to personal use. This presumption prevails unless the accused satisfactorily explains the loss or shortage.
• Duty to Inform Court of Change of Address — It is the duty of counsel to officially inform the court of any change in address; in the absence of such notice, service of orders and resolutions must be made at the last address of counsel on record. Courts cannot be expected to take judicial notice of counsel's new address indicated merely in pleadings.
• Prohibited Pleadings — Courts look to the substance rather than the title of pleadings. A motion styled as a "Motion to Reopen" that seeks reconsideration of a final judgment and raises previously passed upon grounds is treated as a prohibited second or third motion for reconsideration under Section 5, Rule 37 of the Rules of Court.

• "Let it be remembered that the doctrine of finality of judgment is grounded on the fundamental principle of public policy and sound practice that, at the risk of occasional error, the judgment of courts and the award of quasi-judicial agencies must become final on some definite date fixed by law."
• "Indeed, every litigation must come to an end once a judgment becomes final, executory and unappealable. Just as a losing party has the right to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of his case by the execution and satisfaction of the judgment, which is the 'life of the law.'"
• "It is, therefore, their responsibility to check the status of their case from time to time."
• "Indeed, when exceptional circumstances exist, such as the passage of the instant amendatory law imposing penalties more lenient and favorable to the accused, the Court shall not hesitate to direct the reopening of a final and immutable judgment, the objective of which is to correct not so much the findings of guilt but the applicable penalties to be imposed."
• "For as long as it is favorable to the accused, said recent legislation shall find application regardless of whether its effectivity comes after the time when the judgment of conviction is rendered and even if service of sentence has already begun."

• People v. Chavez, 411 Phil. 482 (2001) — Cited by petitioner to support the claim that entry of judgment without receipt of resolution is premature; distinguished by the Court because in Chavez the non-receipt was through no fault of the party, whereas here the non-receipt was attributable to counsel's and petitioner's negligence.
• Spouses Bergonia v. Court of Appeals, 680 Phil. 334 (2012) — Cited for the rule that certiorari is available only if there is no appeal or any other plain, speedy, and adequate remedy; used to establish that Rule 45 (petition for review) is the proper remedy for final orders, not Rule 65.
• Garrucho v. Court of Appeals, 489 Phil. 150 (2005) — Cited for the doctrine that it is the duty of counsel to officially inform the court of a change in address; failure to do so means service must be made at the last address on record.
• Justice Angeles v. Hon. Gaile, 661 Phil. 657 (2011) — Cited for the enumeration of exceptions to the doctrine of finality of judgment.
• De Leon v. Public Estates Authority, 640 Phil. 594 (2010) — Cited for the principle that every litigation must come to an end once a judgment becomes final.
• Apo Fruits Corporation v. Court of Appeals, 622 Phil. 215 (2009) — Cited for the rule that final judgments are immutable and unalterable.
• People v. Morilla, 726 Phil. 244 (2014) — Cited for the rule that penal laws favorable to the accused have retroactive effect.

• Rule 65, Rules of Court — Governs certiorari as an extraordinary remedy; held improper when the assailed resolution is a final order.
• Rule 45, Rules of Court — Governs petitions for review on certiorari; held to be the proper remedy for assailing final orders of the Sandiganbayan.
• Section 5, Rule 37, Rules of Court — Prohibits second motions for reconsideration; the Court applied this by looking to the substance rather than the title of the pleadings filed by petitioner.
• Section 24, Rule 119, Rules of Court — Sets the five requisites for reopening a case before finality of judgment, which petitioner failed to satisfy.
• Article 217, Revised Penal Code (as amended by RA No. 10951) — Defines malversation of public funds and establishes the presumption of malversation; Section 40 of RA 10951 reduced the penalty to prision correccional for amounts not exceeding ₱40,000.
• Article 22, Revised Penal Code — Provides for the retroactivity of penal laws when favorable to the accused.
• Article 64, Revised Penal Code — Rules for the application of penalties containing three periods; applied by the Court to determine the proper period considering the presence of one mitigating circumstance.
• Republic Act No. 10951 — An Act Adjusting the Amount or the Value of Property and Damage on which a Penalty is Based; the passage of this law constituted the exceptional circumstance warranting reopening.
• Republic Act No. 10707 — Amended the Probation Law (PD 968) to allow application for probation when a non-probationable penalty is modified to a probationable penalty on appeal or review.
• Presidential Decree No. 968 (Probation Law of 1976) — As amended by RA 10707, governs the grant of probation.
• A.M. No. 12-11-2-SC (Guidelines For Decongesting Holding Jails) — Cited in the Court's directives regarding the immediate release of accused who have served the minimum imposable penalty under the new law.