In a letter dated October 10, 1992 addressed to the Office of the Court Administrator, complainant Angelina Gano, Chairperson of the Hapao Multi-Purpose Cooperative, Inc., charged respondent Elizabeth Leonen, Court Stenographer I in the First Municipal Circuit Trial Court of Banaue-Hungduan, Province of Ifugao, with alleged malversation of the amount of P30,000.00^[1] entrusted to her by complainant.

The records show that the Hapao Multi-Purpose Cooperative, Inc., (hereinafter referred to as the "cooperative") initiated a complaint before the Barangay Lupon of Hapao in Hungduan, Ifugao, docketed as Barangay Case No. 17, Series of 1991, against one Ester Humiding for breach of contract involving the sale of a house and lot owned by the latter. After conciliation hearings were conducted by the Barangay Lupon, an arbitration award was rendered on December 27, 1991 wherein the parties were ordered to comply with the terms of said contract of sale.^[2] On January 16, 1992, the cooperative, through its manager, Ramon Himmiwat, filed a petition with the Municipal Circuit Trial Court of Banaue-Hungduan, where respondent was then holding office as Court Stenographer I, for the issuance of a writ of execution in view of Ester Humiding's refusal to comply with the arbitration award.^[3]

As prayed for, the corresponding writ of execution was issued by the said court on January 20, 1992.^[4] The Board of Directors of the cooperative thereafter authorized Angelina Gano to deposit with the municipal treasurer the amount of P30,000.00 to be applied as partial payment of the purchase price of the house and lot. According to Gano, she went to the office of the Municipal Treasurer of Banaue on January 16, 1992 to turn over the amount but as the treasurer was out of town, she instead entrusted the amount to respondent Elizabeth Leonen upon the representations of the latter that the municipal trial court was authorized to accept the money in behalf of the municipal treasurer to whom said amount would thereafter be remitted. As acknowledgment and proof of the deposit, respondent later gave complainant what purported to be Official Receipt No. 2745380G, dated January 27, 1992^[5] supposedly signed by Assistant Municipal Treasurer Billy La Madrid and Provincial Treasurer Samuel Marinay.

Subsequently, the cooperative and Ester Humiding entered into an amicable settlement, as a consequence of which Humiding sought the transfer to her of the P30,000.00 which had ostensibly been remitted earlier by Angelina Gano to the municipal treasurer through respondent. To her surprise, the aforesaid Billy La Madrid informed her that no deposit of said amount was ever made with the municipal treasury.^[6] When she thereafter went to the municipal circuit trial court to withdraw the amount, respondent admitted that she had used the money for personal purposes.^[7] Upon further inquiries, Gano learned that the supposed official receipt which respondent had given to her was fake and that the signatures thereon, specifically those of La Madrid and Samuel Marinay, were falsified.^[8]

In a Second Indorsement dated November 11, 1992, Deputy Court Administrator Juanito A. Bernad referred the matter to Executive Judge Segundo B. Catral of the Regional Trial Court of Lagawe, Ifugao for investigation, report and recommendation. In the course of the investigation, respondent sought to settle the case with complainant, when the hearings were re-set several times. During that period, in a promissory note dated February 27, 1993, respondent undertook to refund the amount that she had misappropriated. On May 14, 1993, she was able to return P4,000.00 and, later, P2,000.00 to the cooperative through Angelina Gano.^[9]

It now appears that respondent failed thereafter to pay the remaining amount. Executive Judge Catral eventually set and conducted hearings on the matter on September 27, 1993 and October 12, 1993. Aside from complainant Angelina Gano, the aforementioned Billy La Madrid, Ramon Himmiwat, and the chairman of the Barangay Lupon that was constituted in Barangay Case No. 17, Norberto Gaddang, appeared thereat as witnesses for complainant. Respondent, on the other hand, did not appear despite due notice, hence no refutation was made of the allegations against her.

In his report of November 26, 1993, the investigating judge recommended the dismissal of respondent from the government service after finding sufficient evidence to warrant her severance for gross dishonesty.^[10] Subscribing to the findings and conclusions of Executive Judge Catral, Deputy Court Administrator Juanito A. Bernad likewise recommends her dismissal from the ranks of the judiciary's employees. In a resolution dated March 14, 1994, this matter was referred to the Court En Banc for resolution.

Public service requires the utmost integrity and strictest discipline. Thus, a public servant must exhibit at all times the highest sense of honesty and integrity. No less than the Constitution sanctifies the principle that a public office is a public trust, and enjoins all public officers and employees to serve with the highest degree of responsibility, integrity, loyalty, and efficiency.^[11] The Code of Conduct and Ethical Standards For Public Officials and Employees additionally provides that every public servant shall at all times uphold public interest over his or her personal interest.^[12]

Respondent Elizabeth Leonen lamentably had not been true to these high and lofty ideals so essential to the proper and effective administration of any government. There is no dispute about the fact that respondent, through deceit, received the amount in trust from complainant Angelina Gano, specifically by the former's deliberate misrepresentations to the latter that the court where she worked was authorized to accept the same for the municipal treasurer.^[13] She knew only too well that there was no such authority. In furtherance of her nefarious designs, she issued to Angelina Gano a simulated receipt, complete with the falsified signatures of treasury officers, thereby inducing Gano to believe that the money could lawfully be deposited with the court.

Respondent's deceitful issuance of the falsified receipt was exposed by Billy La Madrid who executed a sworn affidavit, which he later affirmed at the hearing conducted on October 12, 1993, attesting to the fact that such "official receipt" is really fictitious and that the same was never issued nor signed by him. Moreover, no remittance was made to his office of the amount turned over to respondent by Angelina Gano. Respondent's dishonest conduct was further compounded by her peculation of the money which was only given to her in trust. Not even the restitution of the whole amount, which respondent failed to do, can erase her administrative culpability, not to speak of her criminal liability.

By her reprehensible acts of gross dishonesty and duplicity, respondent has undermined the public's faith in our courts and, ultimately, in the administration of justice.^[14] Her continued employment in the Government must, therefore, be terminated at once. As this Court held in Re: Josefina V. Palon, etc.,^[15] the conduct required of court personnel, from the presiding judge to the lowliest clerk, must always be beyond reproach and circumscribed with the heavy burden of responsibility as to let them be free from any suspicion that may taint the judiciary.

ACCORDINGLY, respondent Elizabeth Leonen is hereby DISMISSED for gross dishonesty and grave misconduct prejudicial to the best interest of the service, with forfeiture of all retirement benefits and with prejudice to reemployment in any national or local office or agency of the Government, including government-owned or controlled corporations, effective upon receipt by her of this resolution.

Respondent is further ORDERED to return to complainant Angelina Gano, for and in representation of the Hapao Multi-Purpose Cooperative, Inc., the amount of P24,000.00 likewise upon receipt of this resolution. Should respondent fail to comply herewith, complainant may resort to other appropriate remedies therefor.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Vitug, and Kapunan, JJ., concur.

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^[1] Rollo, 1, Exhibit C.

^[2] Ibid., 14, 21-23, Exhibit A.

^[3] Ibid., Exhibit I.

^[4] Ibid., 17, Exhibit J.

^[5] Ibid., 16, Exhibit E.

^[6] Ibid., 6, Exhibit B.

^[7] TSN, September 27, 1993, 15.

^[8] Rollo, 9, Exhibit L; TSN, October 12, 1993, 3-5.

^[9] Ibid., 43-44, Exhibits G and H; TSN, September 27, 1993, 10.

^[10] Ibid., 49-H to 49-K.

^[11] Section 1, Article XI, 1987 Constitution.

^[12] Section 2, Republic Act No. 6713.

^[13] Rollo, 49-D to 49-F.

^[14] Unknown Municipal Councilor of Sto. Domingo, Nueva Ecija vs. Alomia, Jr., A.M. No. P-91-660, August 7, 1992, 212 SCRA 330.

^[15] A.M. No. 92-8-027-SC, September 2, 1992, 213 SCRA 219.