Facts:

The case revolves around Alfredo L. Azarcon, the petitioner, who owned and operated an earth-moving business that provided hauling services to the Paper Industries Corporation of the Philippines (PICOP) in Mangagoy, Surigao del Sur. On May 25, 1983, the Bureau of Internal Revenue (BIR) issued a Warrant of Distraint for the personal property of one Jaime Ancla, a sub-contractor working with Azarcon, who had outstanding tax liabilities. Subsequently, on June 17, 1985, Azarcon received a Warrant of Garnishment that required him to surrender and remit to the BIR property belonging to Ancla, which he acknowledged by signing a receipt for an Isuzu dump truck.

As per this receipt, Azarcon assumed responsibilities for safekeeping the truck until further orders from the BIR. Azarcon later expressed his desire to relinquish this responsibility due to Ancla's withdrawal of equipment from his custody. The BIR's Regional Director, Jose Batausa, noted Azarcon's failure to follow

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Facts:

Petitioner’s Business and Engagement with PICOP

• Petitioner Alfredo L. Azarcon, a private individual, owned and operated an earth-moving business specializing in hauling dirt and ore.
• His services were contracted by the Paper Industries Corporation of the Philippines (PICOP) at its Mangagoy, Surigao del Sur concession.
• On occasions, Azarcon subcontracted services (e.g., Jaime Ancla’s involvement) resulting in shared responsibilities over equipment and property.

Entry of the Bureau of Internal Revenue (BIR) and the Warrant of Distraint

• On May 25, 1983, a Warrant of Distraint of Personal Property was issued by the Main Office of the BIR directed to the Regional Director of Revenue Region 10, Butuan City.
• The warrant mandated the distraint of goods belonging to Jaime Ancla—a subcontractor and delinquent taxpayer—ordering Azarcon to transfer or surrender the goods to the BIR.
• On June 17, 1985, Azarcon received the warrant, and by signing a receipt he committed to keeping the property (an Isuzu dump truck with specific identifiers) intact and not disposing of it without proper authority.

Developments in Custody and Attempts to Relinquish Responsibility

• Subsequent to signing the receipt, Azarcon expressed his intent to cancel any responsibility over the truck by submitting a letter dated November 21, 1985, to the BIR.
• The instigation for cancellation arose when it appeared that Jaime Ancla intended to cease operations, evidenced by the alleged surreptitious withdrawal of the equipment.
• Despite his notice, later communications from the Regional Director (May 27, 1986) reaffirmed Azarcon’s responsibility in safeguarding and preserving the property as mandated by the original warrant.

Alleged Misappropriation and Emergence of Criminal Charges

• A progress report by a Revenue Document Processor in June 1986 indicated that Ancla was renting out the truck to another contractor, prompting a suggestion for reissuance of the warrant.
• Instead of acting on the suggestion, Director Batausa subsequently filed a letter-complaint on January 22, 1988, after a lapse of more than one year from the report.
• The Provincial Fiscal forwarded the complaint to the Office of the Tanodbayan, which then deputized a Tanodbayan prosecutor to conduct a preliminary investigation beginning August 22, 1988.
• On January 12, 1990, Special Prosecution Officer Victor Pascual filed an information charging both Azarcon and Ancla with malversation of public funds or property (under Article 217 in relation to Article 222 of the Revised Penal Code).

Proceedings Before the Sandiganbayan

• Petitioner Azarcon filed several motions, including a motion for reinvestigation (granted May 22, 1991), a motion to dismiss on jurisdictional grounds (filed March 25, 1992 but denied May 18, 1992), and later a motion for leave to file demurrer to evidence (denied November 16, 1992).
• After the evidence presentation concluded on February 15, 1993, the Sandiganbayan rendered its Decision on March 8, 1994, convicting Azarcon for malversation of public funds and imposing imprisonment, indemnification, a fine, and special perpetual disqualification.
• Subsequently, Azarcon, through new counsel, filed a motion for new trial/reconsideration (March 23, 1994) which was subsequently denied on December 2, 1994, leading to the present petition.

Issue:

Jurisdictional Question

• Whether the Sandiganbayan has jurisdiction over a private individual (Azarcon) who is charged with malversation of public funds solely on the basis of having been designated as custodian of distrained property by the BIR.
• Whether the construction of Azarcon’s signing of the receipt for the distrained property qualifies as an appointment converting him into a public officer.

Statutory and Legal Interpretation

• Whether the legal framework, specifically the provisions of P.D. No. 1606 and Article 203 of the Revised Penal Code, support the contention that a private individual can be deemed a public officer.
• Whether the absence of express statutory authority in the National Internal Revenue Code to constitute private individuals as depositaries of distrained property invalidates the contention of public officer status.

Evidentiary and Procedural Considerations

• Whether there was sufficient proof that the distrained property originally belonged to Jaime Ancla, thus substantiating the application of malversation of public funds over its conversion for personal gain.
• Whether the BIR’s procedure in handling the distrained property adhered to statutory mandates, thereby affecting the legitimacy of the ensuing proceedings.

Fundamental Query

• Whether the essence of the controversy—i.e., the transformation of a private individual into a public officer by mere designation—holds constitutional and statutory validity under Philippine law.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)