People of the Philippines vs. Romeo Chan Reales

The prosecution bears the burden of proving a negative allegation that is an essential element of a crime and cannot shift that burden to the accused merely by characterizing it as a negative averment, absent a prima facie case or circumstances showing that the fact is within the accused’s peculiar knowledge. Where the alleged non-rendition of service by job order workers is the lynchpin of the charges, the prosecution must adduce evidence sufficient to establish that failure; mere documentary irregularities and hearsay affidavits are insufficient.

In 2001, then Governor Milagrosa T. Tan of the Province of Samar designated Romeo Chan Reales as Officer-in-Charge of the Office of the Provincial Administrator, while he concurrently served as Provincial Accountant. His signing authority was expressly limited to three categories: payrolls for salaries and wages, disbursement vouchers for utilities and subscriptions, and personnel remittances to specified government agencies. All other documents requiring the Governor’s signature were to be forwarded to the Governor’s office. For the periods October 1–31, 2005 and November 1–30, 2005, Reales allegedly caused the enrollment of 25 fictitious job order workers in the provincial payrolls and signed the Summary of Payrolls, Daily Time Records, and Time Book and Payroll, thereby enabling the release of ₱76,500.00 in wages. A complaint was later filed by Aurelio A. Bardaje, Jr. of the Provincial Health Office, prompting an Ombudsman investigation.

• Designation and Authority: In 2001, Governor Milagrosa T. Tan designated Reales, the Provincial Accountant, as Officer-in-Charge of the Office of the Provincial Administrator. His authority to sign or approve documents was limited to three categories: payrolls for salaries and wages, disbursement vouchers for utility and communication bills, and personnel remittances to government agencies. All other documents for the Governor’s signature were to be forwarded to the Governor.

• Alleged Payroll Fraud: For the periods October 1–31, 2005 and November 1–30, 2005, Reales allegedly created and enrolled 25 fictitious job order workers in the provincial government’s payrolls. The Summary of Payrolls, Daily Time Records (DTRs), and Time Book and Payroll covering these workers were processed, resulting in the disbursement of ₱76,500.00 in wages. The prosecution asserted that none of the 25 named workers actually reported for work or rendered service, and that Reales himself misappropriated the released funds.

• Documents and Signatures: Reales affixed his signature on the DTRs, the Summary of Payrolls, and the Time Book and Payroll. On the DTRs, he signed above the printed certification “Verified as to the prescribed office hours.” On the Summary of Payrolls, his signature appeared above the name “MILAGROSA T. TAN, Governor” and above his own name as Provincial Accountant. On the Time Book and Payroll, he signed over the printed names “MILAGROSA T. TAN” as Foreman/Timekeeper and Superintendent/Foreman-in-Charge. Special Disbursing Officer/Paymaster Winifreda A. Estremera certified on the Time Book and Payroll that she paid each worker in cash, after they personally presented themselves and signed the roll.

• Complaint and Investigation: Aurelio A. Bardaje, Jr. of the Provincial Health Office filed an affidavit/complaint denouncing purported “illegal transactions of disbursing public money in the guise of Contract of Services of employees.” The Office of the Ombudsman investigated and, finding probable cause, charged Reales and the Provincial Treasurer. After preliminary investigation, two Informations were filed: one for violation of Section 3(e) of R.A. No. 3019, alleging that Reales caused injury to the government by approving disbursement to job order workers who did not render services, and one for malversation through falsification of public documents, alleging misappropriation and falsification of the Time Book and Payroll and Daily Time Records.

• Prosecution Evidence: The prosecution presented six witnesses: (1) Provincial Budget Officer Myrgie D. Ko, who issued a certification that relevant documents were no longer available; (2) Provincial Accountant Tommy Roger M. Ragaodao, Jr., who attested that hiring documents could not be located; (3) Human Resource Management Officer-in-Charge Juliet T. Dayap, who produced Reales’s employment records but could not retrieve contracts or personal data sheets of the emergency laborers despite diligent search; (4) State Auditor Atty. Helen O. Fabra, who could not obtain obligation and disbursement vouchers; (5) Disbursing Officer Winifreda A. Estremera, who testified that she personally released wages only upon presentment of a special power of attorney and worker’s ID, but acknowledged that the workers’ individual signatures appeared on the Time Book and Payroll; and (6) Ombudsman Investigator Julius N. Oballo, who opined that Reales’s signatures on the DTRs, Summary of Payrolls, and Time Book and Payroll were the same and demonstrated falsification. Documentary exhibits included the Summary of Payrolls, Time Book and Payroll, and DTRs. The affidavits of complainant Bardaje and witness Rondita Ordoña were offered but the affiants were not presented in court.

• Defense: Reales denied the charges. He claimed he could not recall signing every DTR due to the voluminous documents he handled. He asserted that he relied in good faith on the prior verification by department heads, and that he signed the verification portion of the DTRs as authorized. He maintained that the wages were actually received by the named employees, and that no direct proof of falsification or misappropriation was adduced.

• Sandiganbayan Ruling: The anti-graft court convicted Reales on both counts. It held that the prosecution proved the negative allegation that the 25 workers never rendered work, shifting the burden to Reales to rebut it, which he failed to do. It found evident bad faith in his signing of the documents across multiple phases of the payroll process, and concluded that all elements of Section 3(e) and malversation through falsification were present. It appreciated the mitigating circumstance of voluntary surrender.

• Failure to Prove Ghost Employees: Reales contended that the prosecution failed to prove beyond reasonable doubt that the job order workers were non-existent or did not render services, an essential element of the charges. The documents relied upon merely reflected his signature in the course of his duties, and no testimonial or documentary evidence directly established the absence of work.

• Absence of Evident Bad Faith: Reales maintained that his signatures were affixed as part of his designated functions as Officer-in-Charge and did not demonstrate manifest deliberate intent to commit wrongdoing or cause damage. He argued that any lapses were, at worst, errors in judgment and not fraudulent acts.

• Inadmissibility of Affidavits: Reales objected to the admission of the affidavits of Bardaje and Ordoña as hearsay, since neither affiant testified in court and was subjected to cross-examination.

• Good Faith and Regular Payroll Process: Reales invoked the regularity of the payroll process, asserting that he signed documents only after department heads had already approved them, and that he had no personal knowledge of the workers’ actual performance.

• Prosecution’s Proof of Negative Allegation: The Office of the Ombudsman argued that the prosecution successfully proved that the 25 job order workers were ghost employees through the documentary exhibits showing Reales’s signatures on the DTRs, Summary of Payrolls, and Time Book and Payroll, coupled with the testimony of Investigator Oballo that the signatures were identical and constituted falsification. The failure to locate any hiring documents and the absence of the workers’ signatures on the DTRs further supported the negative allegation.

• Shifting of Burden: The Ombudsman contended that because the negative averment did not permit direct proof and the facts were more immediately within Reales’s knowledge, the burden shifted to him to prove that the workers actually rendered service.

• Evident Bad Faith and Malversation: The prosecution maintained that Reales’s multiple signatures across all phases of the payroll process—from timekeeping to approval—demonstrated evident bad faith and facilitated the disbursement of public funds to non-existent persons, constituting both graft and malversation through falsification. The presumption of malversation arose from his failure to account for the funds.

• Admissibility of Evidence: The Ombudsman insisted that the affidavits were admissible and that Reales’s objections went to probative value rather than admissibility.

• Prosecution’s Burden for Negative Averment: Whether the Sandiganbayan erred in ruling that the prosecution’s allegation that the job order workers did not render service was a negative averment that shifted the burden of proof to the accused.

• Proof of Ghost Employees: Whether the evidence on record proved beyond reasonable doubt that the 25 job order workers were ghost employees who did not actually report for work.

• Evident Bad Faith: Whether Reales’s act of signing the Daily Time Records, Summary of Payrolls, and Time Book and Payroll constituted evident bad faith within the meaning of Section 3(e) of Republic Act No. 3019.

• Malversation and Falsification: Whether the prosecution established beyond reasonable doubt the elements of malversation of public funds through falsification of public documents, including the misappropriation element and the requisite falsification.

• Prosecution’s Burden for Negative Averment: The general rule is that the prosecution bears the burden of proving a negative allegation that is an essential element of the crime. The exception—that the burden shifts when the negative does not permit direct proof and the facts are more immediately within the accused’s knowledge—did not apply. The rendition of work by the 25 job order workers was not shown to be a fact peculiarly within Reales’s exclusive knowledge, and the prosecution failed to establish even a prima facie case of non-rendition. The Sandiganbayan erred in prematurely shifting the burden to the accused.

• Proof of Ghost Employees: The evidence was insufficient to sustain a finding of guilt beyond reasonable doubt. The Daily Time Records showed only that the workers did not sign them, not that they failed to render work. Reales’s signature appeared on the verification portion, which bore the printed phrase “Verified as to the prescribed office hours,” consistent with his explanation of a ministerial check. Oballo’s testimony was contradictory: he initially asserted that the signatures constituted falsification of the workers’ signatures, but later admitted they were verifications. The affidavits of Bardaje and Ordoña were hearsay, as the affiants were not presented in court for cross-examination. Even if considered, Ordoña merely stated she had “not seen” the workers, not that they did not exist or work. Dayap’s inability to retrieve hiring documents proved only unavailability, not non-existence. The record therefore did not establish that the workers were ghosts.

• Evident Bad Faith: No evident bad faith was proven. Evident bad faith requires manifest deliberate intent to do wrong or cause damage, spurred by a corrupt motive. Reales’s signatures on the DTRs, Summary of Payrolls, and Time Book and Payroll were consistent with his verification and approval duties under his limited authority. At most, his signing the certification portion instead of the verification portion was a mistake. There was no showing of a fraudulent purpose, conscious wrongdoing, or perverse motive. Reasonable doubt existed as to whether his actions were animated by bad faith. Consequently, the second element of Section 3(e) was not established.

• Malversation and Falsification: The prosecution failed to prove the fourth element of malversation—appropriation, taking, or misappropriation of public funds. No demand was shown, so the presumption under Article 217 of the Revised Penal Code did not arise. The documentary evidence did not demonstrate that Reales received or pocketed the wages. The Time Book and Payroll, on its face, showed that 25 different workers signed and received their wages, as certified by Disbursing Officer Estremera, whose testimony on the mode of payment was contradictory and unreliable. The alleged falsification under Article 171(2) (causing it to appear that persons participated when they did not) and Article 171(4) (making untruthful statements in a narration of facts) was not proven, as the predicate fact of the workers’ non-existence remained unproven. The signatures on the public documents, standing alone, did not conclusively establish tampering or feigned participation. The prosecution’s evidence did not overcome the presumption of innocence.

• Burden of Proof for Negative Allegations — When a criminal charge is predicated on a negative allegation, or a negative averment is an essential element of the crime, the prosecution has the burden to prove the charge. The exception—allowing the burden to shift to the accused—applies only where the negative does not permit direct proof or where the facts are more immediately within the accused’s knowledge. In such cases, the prosecution must still establish at least a prima facie case from the best evidence obtainable. (People v. Manalo; People v. Pajenado)

• Evident Bad Faith under Section 3(e) of R.A. No. 3019 — Evident bad faith entails manifest deliberate intent on the part of the accused to do wrong or to cause damage; it must be shown that the accused was spurred by a corrupt motive. Mistakes, however patent, committed by a public officer are not actionable absent a clear showing of malice or gross negligence amounting to bad faith.

• Presumption of Malversation — Requisite of Demand — A demand by a duly authorized officer is not an element of malversation but is a requisite for the application of the prima facie presumption under Article 217 of the Revised Penal Code. Without proof of demand, the prosecution must rely on direct evidence of misappropriation.

• Strength of the Prosecution’s Case — In criminal cases, conviction must rest on the strength of the prosecution’s evidence, not on the weakness of the defense. Mere speculations and probabilities cannot substitute for proof required to establish guilt.

• Reasonable Doubt Standard — Where inculpatory facts are susceptible of two or more interpretations, one of which is consistent with the innocence of the accused, the evidence does not fulfill the test of moral certainty required for conviction.

• “The general rule is that if a criminal charge is predicated on a negative allegation, or a negative averment is an essential element of a crime, the prosecution has the burden to prove the charge. … Where the negative of an issue does not permit of direct proof, or where the facts are more immediately within the knowledge of the accused, the onus probandi rests upon him.” — This passage articulates the rule on negative allegations and the narrow exception, which the Court found inapplicable.

• “Because evident bad faith entails manifest deliberate intent on the part of the accused to do wrong or to cause damage, it must be shown that the accused was ‘spurred by any corrupt motive.’ Mistake[s], no matter how patently clear, committed by a public officer are not actionable ‘absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith.’” — This defines the stringent standard for evident bad faith.

• “In criminal cases, the overriding consideration is not whether the court doubts the innocence of the accused, but whether it entertains a reasonable doubt as to his or her guilt. If there exists even one iota of doubt, the Court is under a longstanding legal injunction to resolve the doubt in favor of the accused.” — The Court underscores the constitutional presumption of innocence and the reasonable doubt standard.

• “His conviction must rest not on the weakness of the defense but on the strength of the prosecution. Mere speculations and probabilities cannot substitute for proof required to establish the guilt of an accused.” — This reiterates the burden of proof in criminal proceedings.

• People v. Manalo, 300 Phil. 317 (1994) — Applied to distill the rule on proving negative averments and the exceptions; the Court relied on its articulation that the prosecution must first establish a prima facie case before any burden shift.

• People v. Pajenado, 142 Phil. 702 (1970) — Followed for the proposition that a negative fact asserted by the prosecution must be duly proven if it is an essential ingredient of the offense.

• Baya v. Sandiganbayan (2nd Division), 876 Phil. 57 (2020) — Cited for the elements of a violation of Section 3(e) of R.A. No. 3019.

• Maamo v. People, 801 Phil. 627 (2016) — Followed for the elements of malversation and the rule that demand is a prerequisite for the statutory presumption of malversation.

• Rep. of the Phils. v. Marcos-Manotok, 681 Phil. 380 (2012); Lim v. People, 797 Phil. 215 (2016) — Applied for the rule that affidavits are hearsay when the affiants are not presented in court and subjected to cross-examination.

• Section 3(e), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — The provision penalizing public officers who cause undue injury or give unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. The Court found that not all elements were proved beyond reasonable doubt, particularly evident bad faith.

• Article 217, Revised Penal Code (Malversation of Public Funds) — The provision defining malversation and establishing the presumption of malversation upon failure to have funds forthcoming upon demand. The Court held that the fourth element (appropriation/misappropriation) was not proven, and the presumption was not triggered due to the absence of demand.

• Article 171, Revised Penal Code (Falsification by Public Officer) — Specifically paragraphs 2 (causing it to appear that persons participated when they did not) and 4 (making untruthful statements in a narration of facts). The Court ruled that the falsification was not established because the non-participation of the job order workers was not proven.

• Article 48, Revised Penal Code (Complex Crimes) — Applied by the Sandiganbayan to charge malversation through falsification as a complex crime. The Supreme Court’s acquittal on both predicate offenses rendered the complex crime charge unsubstantiated.

Caguioa (Chairperson), Inting, and Gaerlan, JJ., concurred.

• Singh, J. — Filed a dissenting opinion. The content of the dissent was not included in the available text.