People of the Philippines vs. Jaime Ochoa

A conviction for malversation through negligence may be had under an information charging willful malversation, because the dolo or culpa present in the offense is merely a modality in the perpetration of the same felony under Article 217 of the Revised Penal Code; no violation of the right to be informed arises from a variance between the mode charged and the mode proved. Relatedly, the rights under Section 12(1), Article III of the 1987 Constitution attach only upon custodial investigation and do not extend to statements taken during an administrative investigation conducted by the offended entity's own personnel before the person is taken into custody.

The charge arose from the alleged diversion of P183,805,291.25 in funds of the National Power Corporation (NPC). Jose Ting Lan Uy, Jr., NPC Treasurer, was charged as a public accountable officer, while Ernesto Gamus, Manager of NPC's Loan Management and Foreign Exchange Division (LOMAFED), and Jaime Ochoa, Foreign Trader Analyst of the same division (described in the pre-trial stipulations as Senior Financial Analyst), were charged as public officers. Raul Gutierrez, a private individual engaged as a foreign exchange trader, was the fourth accused and remained at large throughout the proceedings. The indictment proceeded for the complex crime of Malversation through Falsification of Commercial Documents under Articles 217 and 171(8), in relation to Article 48, of the Revised Penal Code.

In July 1990, the National Power Corporation (NPC) became embroiled in a controversy involving the disappearance of P183,805,291.25 of its funds, which were originally on deposit with the Philippine National Bank, NPC Branch, but were subsequently used to purchase two manager's/cashier's checks — the first in the amount of P70,000,000.00 and the second for P113,805,291.25 — in order to comply with NPC's loan obligations to the Asian Development Bank (ADB). Because NPC's debt to the ADB was in yen, NPC was obligated to follow an intricate and circuitous procedure of buying US dollars from a local bank, in this case the United Coconut Planters Bank, T.M. Kalaw Branch (UCPB T.M. Kalaw), which was supposed to remit the US dollars to an off-shore bank, Credit Lyonnais, New York. Credit Lyonnais was then supposed to remit the yen equivalent of the US dollars to a third bank, the Bank of Japan, Tokyo Branch, which would credit the funds to the account of the ADB. The contracts of NPC with the concerned banks were embodied in three Payment Instructions, which included a "value date" of July 13, 1990, the mere arrival of which would trigger the routing procedure culminating in payment to the ADB of the NPC obligation in the agreed foreign currency.

On the value date, Credit Lyonnais remitted Japanese Yen 1,143,316,130.00 to the Bank of Japan, Tokyo Branch. Per the routing procedure, UCPB T.M. Kalaw was supposed to have remitted on the same value date the amount of US$7,740,799.80, but it did not make the agreed remittance despite the fact that PNB had already issued two manager's/cashier's checks for that purpose. Credit Lyonnais therefore received no payment for the funds it had remitted to the Bank of Japan, Tokyo. Both the State and the accused offered explanations for the failure of UCPB T.M. Kalaw to remit the dollar equivalent of P183,805,291.25, and the explanations were diametrically opposed.

According to the prosecution, the accused diverted the funds covered by the two PNB manager's checks by falsifying a commercial document called an "Application for Cashier's Check" (ACC), inserting the account number A/C #111-1212-04 of a private individual after the name of the payee, UCPB T.M. Kalaw Branch. The Payment Instruction issued by NPC instructing PNB to prepare a manager's check to be charged to NPC's savings account allegedly did not contain any account number, and NPC had not authorized the insertion. Through that insertion, the accused allegedly succeeded in diverting the funds from UCPB T.M. Kalaw in favor of Raul Gutierrez alias Raul Nicolas alias George Añonuevo alias Mara Añonuevo, who remained at large.

Ochoa, for his part, asserted in his defense that there was no evidence that he committed any of the acts alleged in the information, particularly the intercalation on the ACC; that he deposited the checks subsequently issued or that he received the proceeds thereof; or that he conspired with any of his co-accused. He claimed that his conviction was based on his alleged sworn statement and the transcript of stenographic notes of a supposed interview with him by NPC personnel, and on the report of the National Bureau of Investigation (NBI). He maintained that he signed the sworn statement while confined at the Philippine Heart Center and upon assurance that it would not be used against him, and that he was not assisted by counsel nor apprised of his constitutional rights when he executed the affidavit.

On the sworn statement, the prosecution presented Atty. Lamberto P. Melencio, who testified that he saw appellant at the hospital to show him the prepared statement and to verify from him the truth of its contents; that he asked appellant to go over the document before affixing his signature thereto; and that he inquired whether appellant had been coerced or intimidated by anybody when the statement was taken. Appellant denied that he was coerced or intimidated, affirmed the contents of the document as a true reflection of his statements, and signed the same. Dr. Teresita Sadava, appellant's own witness, testified that appellant was confined for three days and, when queried whether "ischemic heart disease" had any emotional or psychological effect, gave the inconclusive reply that it "may or may not." The Sandiganbayan observed that although appellant was supposedly violated and repulsed by the alleged falsity of the affidavit, it was strange that he, an officer then occupying the position of Foreign Trader Analyst of the NPC, felt it unnecessary to execute another affidavit retracting the same after his recovery from illness. As to the NBI Investigation Report, the prosecution presented the team leader of the NBI investigators who conducted the investigation, although his testimony was dispensed with after the parties stipulated on the existence and due execution of the report, albeit without admitting the truth of its contents.

• Variance Between Charge and Proof / Right to Be Informed: Appellant insisted that he could not be convicted under the allegations in the information without violating his constitutional right to due process and to be informed of the accusation against him, pointing out that the information alleged willful and intentional commission of the acts complained of while the judgment found him guilty of inexcusable negligence amounting to malice.
• Inadmissibility of the Sworn Statement — Custodial Investigation Rights: Appellant contended that his conviction was based on his sworn statement, the transcript of stenographic notes from which the sworn statement was taken, and the NBI Report, which are incompetent evidence; that the sworn statement was taken without the benefit of counsel, in violation of his constitutional right under Section 12, Article III of the 1987 Constitution; that he signed it while confined at the Philippine Heart Center and upon assurance that it would not be used against him; and that he was not assisted by counsel nor apprised of his constitutional rights when he executed the affidavit.
• Application of Galman vs. Pamaran: Appellant invoked Galman vs. Pamaran in insisting that the constitutional safeguard should have been applied notwithstanding that he was not yet arrested or under detention at the time, and invited attention to the pronouncement that "the right to counsel is available if a person is in custody, even if he is not a suspect; or even if not yet in custody but he is a suspect."
• Hearsay — Sworn Statement: Appellant advanced that even if his sworn statement were admissible, its contents were not sufficient to sustain a conviction, because although the statement was supposedly gathered from the transcript of stenographic notes of the conversation between him and Atty. Bagcal, neither Atty. Bagcal nor the person who actually prepared the sworn statement was presented, rendering the statement hearsay.
• Unfitness to Execute the Sworn Statement: Appellant disclaimed the authenticity of his sworn statement, insisting that at the time he signed the document he was confined in the hospital and therefore not physically and mentally fit to assess the significance of his signature.
• Hearsay — NBI Report and Transcript of Stenographic Notes: Appellant contended that both the NBI Investigation Report and the transcript of stenographic notes are hearsay for having been made extra-judicially.
• Absence of Overt Acts / Lack of Conspiracy: Appellant asserted that there was no evidence that he committed any of the acts alleged in the information, particularly the intercalation on the ACC; that he deposited the checks subsequently issued or received the proceeds thereof; or that he conspired with any of his co-accused.

• Variance Between Charge and Proof (Right to Be Informed): Whether an accused charged in the information with willful and intentional malversation may be validly convicted of malversation through inexcusable negligence without violating his constitutional right to due process and to be informed of the accusation against him.
• Custodial Investigation Rights: Whether the sworn statement taken during an administrative investigation conducted by NPC personnel, before appellant was taken into custody, is inadmissible for having been obtained without the assistance of counsel and without appellant having been apprised of his constitutional rights under Section 12(1), Article III of the 1987 Constitution.
• Hearsay — Sworn Statement: Whether the sworn statement is hearsay and insufficient to sustain a conviction where neither Atty. Bagcal nor the person who actually prepared the sworn statement was presented as a witness.
• Hearsay — NBI Investigation Report and Transcript of Stenographic Notes: Whether the NBI Investigation Report and the transcript of stenographic notes are hearsay for having been made extra-judicially.

• Variance Between Charge and Proof (Right to Be Informed): No. Malversation may be committed either through a positive act of misappropriation or passively through negligence, and since dolo and culpa are merely modalities of the same felony under Article 217 of the Revised Penal Code, conviction for malversation through negligence is proper even under an information charging willful malversation.
• Custodial Investigation Rights: No. The rights under Section 12(1), Article III of the 1987 Constitution begin to operate only upon custodial investigation, and the sworn statement was taken during NPC's administrative investigation and before appellant was taken into custody.
• Hearsay — Sworn Statement: No. The prosecution presented Atty. Lamberto P. Melencio, who showed appellant the prepared statement and verified from him the truth of its contents, and the sworn statement is a duly notarized document enjoying the presumption of regularity.
• Hearsay — NBI Investigation Report and Transcript of Stenographic Notes: No. The parties stipulated on the existence and due execution of the NBI Investigation Report, and the prosecution presented the team leader of the NBI investigators who conducted the investigation.

• Variance Between Charge and Proof (Right to Be Informed): The Court began from the elements of malversation, as stated in Barriga vs. Sandiganbayan: (a) the offender is a public officer; (b) he has the custody or control of funds or property by reason of the duties of his office; (c) the funds or property involved are public funds or property for which he is accountable; and (d) he has appropriated, taken or misappropriated, or has consented to, or through abandonment or negligence, permitted the taking by another person of such funds or property. Malversation may thus be committed either through a positive act of misappropriation of public funds or property or passively through negligence by allowing another to commit such misappropriation. To sustain the charge, there must either be criminal intent or criminal negligence, and while the prevailing facts may not show that deceit attended the commission of the offense, this does not preclude the reception of evidence to prove negligence, because both are equally punishable under Article 217. More pointedly, the felony involves breach of public trust, and whether it is committed through deceit or negligence, the law makes it punishable and prescribes a uniform penalty therefor. Accordingly, even when the information charges willful malversation, conviction for malversation through negligence may still be adjudged if the evidence ultimately proves that mode of commission. Quoting Cabello vs. Sandiganbayan, the Court reiterated that malversation is committed either intentionally or by negligence; that the dolo or culpa present in the offense is only a modality in the perpetration of the felony; and that even if the mode charged differs from the mode proved, the same offense of malversation is involved and conviction thereof is proper. The Court noted that the question was neither novel nor of first impression, citing Samson vs. Court of Appeals, where an accused charged with willful or intentional falsification was validly convicted of falsification through negligence on the theory that the greater includes the lesser offense and that the situation was one of variance between allegation and proof, and People vs. Consigna, which applied the same rationale to the felony of malversation.

• Custodial Investigation Rights: Paragraph 1, Section 12, Article III of the 1987 Constitution requires that any person under investigation for the commission of an offense shall have the right to be informed of his right to remain silent and to have competent and independent counsel preferably of his own choice, rights that cannot be waived except in writing and in the presence of counsel. The "investigation" contemplated by the provision refers to a "custodial" investigation where a suspect has already been taken into police custody and the investigating officers begin to ask questions to elicit information and confessions or admissions from the suspect. Custodial investigation involves any questioning initiated by law enforcement authorities after a person is taken into custody or otherwise deprived of his freedom of action in any significant manner, and the rule begins to operate at once as soon as the investigation ceases to be a general inquiry into an unsolved crime and direction is then aimed upon a particular suspect who has been taken into custody and to whom the police would then direct interrogatory questions tending to elicit incriminating statements. The rights enumerated are therefore not available before government investigators enter the picture; the protective mantle does not extend to admissions made during an administrative investigation, to admissions or confessions made to a private individual, to a verbal admission made to a radio announcer who was not part of the investigation, to a mayor approached as a personal confidante and not in his official capacity, to a spontaneous statement not elicited through questioning by the authorities, or to a person undergoing an audit examination because an audit examiner is not a law enforcement officer. Applying these yardsticks, the flaw in appellant's argument became immediately apparent: his statement was taken during the administrative investigation of NPC's audit team and before he was taken into custody, so that the inquiry was still a general inquiry into an unsolved offense and there was as yet no specific suspect. He could not claim that he was in police custody, because he was confined at the Philippine Heart Center and gave the statement to NPC personnel, not to police authorities, and nothing on record supported his claim that his statements were extorted from him. On Galman vs. Pamaran, the Court explained that although it held therein that the constitutional protection covers admissions as well as confessions, the ruling was qualified by the statement that what is being eschewed is the evil of "extorting" a confession from the mouth of the person being interrogated, "extorting" meaning compelling or coercing a confession or information by any means serving to overcome the power of resistance or making the confession or admission involuntary. The Court likewise noted that jurisprudence under the 1987 Constitution has consistently held, following Escobedo, the stricter view that the rights begin to be available only when the person is already in custody. Finally, the contemporaneous conduct of an NBI investigation did not extricate appellant, because the essence of the constitutional safeguard is protection from coercion, the interview was conducted by NPC personnel for NPC's administrative investigation, and any NBI investigation is a proceeding separate, distinct and independent from the NPC inquiry.

• Hearsay — Sworn Statement: The argument was rejected as puerile. The prosecution presented Atty. Lamberto P. Melencio, who saw appellant at the hospital to show him the prepared statement and to verify from him the truth of its contents; he testified that he asked appellant to go over the document before affixing his signature thereto and inquired whether appellant had been coerced or intimidated by anybody when the statement was taken. Appellant denied that he was coerced or intimidated, affirmed the contents of the document as a true reflection of his statements, and signed the same. The sworn statement is a duly notarized document which has in its favor the presumption of regularity and can be contradicted only by clear and convincing evidence; without such evidence, the presumption of regularity, the evidentiary weight conferred upon the public document with respect to its execution, as well as the statements and the authenticity of the signatures thereon, stand. Appellant's disclaimer that he was physically and mentally unfit to assess the significance of his signature collided with the testimony of his own witness, Dr. Teresita Sadava, who stated that he was confined for three days and who, when queried whether "ischemic heart disease" had any emotional or psychological effect, gave the inconclusive reply that it "may or may not." The Sandiganbayan's observation was also noted: although supposedly violated and repulsed by the alleged falsity of the affidavit, it was strange that appellant, who was astute in business matters as Foreign Trader Analyst of the NPC, nevertheless felt it unnecessary to execute another affidavit retracting the same after his recovery from illness. The Court reiterated that evidence to be believed must not only proceed from the mouth of a credible witness, but must be credible in itself, such as common experience and observation of mankind can approve as probable under the circumstances.

• Hearsay — NBI Investigation Report and Transcript of Stenographic Notes: The record showed that the prosecution presented the team leader of the NBI investigators who conducted the investigation, although his testimony was dispensed with as the parties stipulated on the existence and due execution of the NBI Investigation Report, albeit without admitting the truth of its contents. If at all, the admission of the report's existence is an acknowledgment that it is neither spurious nor counterfeit. On the whole, given the paucity of substance in the arguments advanced by appellant to prop up his cause, the appeal had to fall.

• Malversation — Modes of Commission and Variance Between Charge and Proof — Article 217 of the Revised Penal Code punishes malversation whether committed through a positive act of misappropriation (dolo) or passively through negligence (culpa) by allowing another to commit the misappropriation. Its elements are: (a) the offender is a public officer; (b) he has the custody or control of funds or property by reason of the duties of his office; (c) the funds or property involved are public funds or property for which he is accountable; and (d) he has appropriated, taken or misappropriated, or has consented to, or through abandonment or negligence permitted the taking by another person of, such funds or property. Because dolo and culpa are merely modalities of the same felony and the law prescribes a uniform penalty, an accused charged with willful malversation may be convicted of malversation through negligence where the evidence proves that mode; the greater includes the lesser offense, and the variance between allegation and proof does not offend the right to be informed of the accusation.
• Custodial Investigation Rights — Under Section 12(1), Article III of the 1987 Constitution, the rights to remain silent and to competent and independent counsel attach only upon custodial investigation, which involves any questioning initiated by law enforcement authorities after a person is taken into custody or otherwise deprived of his freedom of action in any significant manner, and which begins once the investigation ceases to be a general inquiry into an unsolved crime and focuses on a particular person as a suspect. The rights are not available before government investigators enter the picture and do not extend to admissions made during an administrative investigation, to admissions to private individuals, or to a person undergoing an audit examination, an audit examiner not being a law enforcement officer. What the safeguard eschews is the "extorting" of a confession or admission — that is, compelling or coercing one by any means serving to overcome the power of resistance or making the admission involuntary.
• Presumption of Regularity of Notarized Documents — A duly notarized sworn statement enjoys the presumption of regularity and may be contradicted only by clear and convincing evidence; absent such evidence, the presumption of regularity, the evidentiary weight conferred upon the public document with respect to its execution, and the authenticity of the signatures thereon stand.
• Stipulation on Existence and Due Execution — A stipulation on the existence and due execution of a report, without admitting the truth of its contents, is an acknowledgment that the document is neither spurious nor counterfeit; it does not, however, operate as an admission of the truth of the matters stated therein.
• Credibility of Evidence — Evidence to be believed must not only proceed from the mouth of a credible witness, but must be credible in itself, such as common experience and observation of mankind can approve as probable under the circumstances.

• "Even when the information charges willful malversation, conviction for malversation through negligence may still be adjudged if the evidence ultimately proves that mode of commission of the offense." — This is the ratio decidendi on the due process and right-to-be-informed issue; it disposes of the objection that the mode of commission proved must correspond to the mode alleged in the information.
• "Malversation is committed either intentionally or by negligence. The dolo or the culpa present in the offense is only a modality in the perpetration of the felony. Even if the mode charged differs from mode proved, the same offense of malversation is involved and conviction thereof is proper." — Quoted by the Court from Cabello vs. Sandiganbayan, this is the canonical formulation of the rule that dolo and culpa are mere modalities of malversation and that a variance between the mode charged and the mode proved does not bar conviction.
• "Succinctly stated, custodial investigation refers to the critical pre-trial stage when the investigation ceases to be a general inquiry into an unsolved crime but has begun to focus on a particular person as a suspect." — This passage supplies the working definition of custodial investigation on which the Court relied in holding that Section 12(1), Article III did not apply to the sworn statement taken during NPC's administrative investigation.
• "It need not be overemphasized that the sworn statement is a duly notarized document which has in its favor the presumption of regularity and, thus, it can be contradicted only by clear and convincing evidence." — This states the evidentiary rule that defeated appellant's attempt to disclaim the authenticity and contents of his sworn statement.

• Samson vs. Court of Appeals, 103 Phil. 277 (1958) — Held that an accused charged with willful or intentional falsification may validly be convicted of falsification through negligence, on the theory that the greater includes the lesser offense and that the situation is one of variance between allegation and proof; relied upon by the Court as the doctrinal anchor for permitting the same variance in malversation cases.
• People vs. Consigna, 122 Phil. 293 (1965) — Applied the Samson rationale to the felony of malversation, holding that an accused charged with willful malversation, under an information containing allegations similar to the present case, may be validly convicted of malversation through negligence where the evidence sustains the latter mode of perpetrating the offense.
• Cabello vs. Sandiganbayan, G.R. No. 93885, May 14, 1991, 197 SCRA 94 — Followed and quoted as the source of the rule that malversation is committed either intentionally or by negligence, that dolo or culpa is only a modality in the perpetration of the felony, and that conviction is proper even if the mode charged differs from the mode proved.
• Diaz vs. Sandiganbayan, 361 Phil. 789 (1999) — Cited for the holding that even on the assumption that the evidence yielded a case of malversation by negligence while the information was for intentional malversation, conviction under the first mode of misappropriation would still be in order.
• Barriga vs. Sandiganbayan, G.R. Nos. 161784-86, April 26, 2005, 457 SCRA 301 — Cited for the enumeration of the essential elements of malversation.
• Galman vs. Pamaran, 138 SCRA 294 (1985) — Invoked by appellant but qualified by the Court: while the constitutional protection covers admissions as well as confessions, what is eschewed is the evil of "extorting" a confession from the mouth of the person being interrogated, and no extortion was shown on the record.
• People vs. Dueñas, Jr., G.R. No. 151286, March 31, 2004, 426 SCRA 666 — Cited for the definition of custodial investigation as the critical pre-trial stage when the investigation ceases to be a general inquiry into an unsolved crime and has begun to focus on a particular person as a suspect.
• People vs. Ayson, G.R. No. 85215, July 7, 1989, 175 SCRA 216 — Cited for the holding that admissions made during the course of an administrative investigation by Philippine Airlines do not come within the purview of Section 12 of Article III.
• Navallo vs. Sandiganbayan, G.R. No. 97214, July 18, 1994, 234 SCRA 175 — Cited for the holding that the constitutional provision on custodial investigation does not extend to a person undergoing an audit examination because an audit examiner is not a law enforcement officer.
• Barcenas vs. Tomas, G.R. No. 150321, March 31, 2005, 454 SCRA 593 — Cited for the presumption of regularity of notarized documents and the requirement of clear and convincing evidence to contradict them.
• People vs. Calumpang, G.R. No. 158203, March 31, 2005, 454 SCRA 719 — Cited for the rule that evidence to be believed must not only proceed from the mouth of a credible witness but must be credible in itself.

• Article 217, Revised Penal Code — Defines and penalizes malversation of public funds or property. The Court relied on it in holding that malversation may be committed either intentionally or through negligence, that dolo and culpa are equally punishable, and that the law prescribes a uniform penalty regardless of the mode of commission.
• Article 171(8), Revised Penal Code — Penalizes falsification of commercial documents, the means by which the malversation was allegedly committed in the amended Information.
• Article 48, Revised Penal Code — Governs complex crimes; the amended Information charged malversation through falsification of commercial documents as a complex crime under Articles 217 and 171(8), in relation to Article 48.
• Section 12(1), Article III, 1987 Constitution — Guarantees the rights of any person under investigation for the commission of an offense to be informed of his right to remain silent and to have competent and independent counsel preferably of his own choice, rights that cannot be waived except in writing and in the presence of counsel. Held inapplicable because the sworn statement was taken during NPC's administrative investigation and before appellant was taken into custody.
• Section 13, Article VIII, 1987 Constitution — Requires the certification that the conclusions of the Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division; recited in the Court's certification signed by Chief Justice Davide, Jr.

Hilario G. Davide, Jr. (Chief Justice); Leonardo A. Quisumbing; Antonio T. Carpio; Adolfo S. Azcuna. No separate concurring opinions are reflected in the text.