Criminal Law Cases

G.R. No. L-51370 August 31, 1981
AMADO IZON and JIMMY MILLA petitioners,
vs.
PEOPLE OF THE PHILIPPINES, respondent.

DE CASTRO*, J.:
Petitioners were charged, together with Pedro Divino, in the Circuit Criminal Court, Third Judicial
District, Olongapo City, with Robbery with Violence Against Person, under an information reading as
follows:
That on or about the 8th day of September, 1977, in the City of Olongapo, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused,
conspiring, confederating together and mutually helping one another and by means of
violence and intimidation applied upon the person of Reynaldo Togorio committed by
the accused Jimmy Milla y Castillo and Pedro Divino y Batero who were armed with
bladed weapon which they pointed to one Reynaldo Togorio and used in stabbing him
and the accused Amado Izon y Bartulo who helped in mauling him thereby inflicting
upon said Reynaldo Togorio the following physical injuries, to wit:
Incised wound 2 cm. long and 2 cm. deep lateral aspect upper third arm
right. Incised wound 2 inches long between thumb and index finger left
Abrasion sternoclavicular function along 6 rib left. Linear abrasion 3 cm.
long level of 7th rib, anterior axillary line right
which injuries shall require medical attendance for a period of less than nine (9) days,
barring complications, did then and there wilfully, unlawfully and feloniously take, steal
and carry away one (1) motorized tricycle with motor No. B100-25-648 with Chasis No.
B120-05589 and Plate No. MCH Q4102 or with a total value of P11,000.00, Philippine
Currency belonging to Reynaldo Togorio to the damage and prejudice of the latter in the
aforementioned amount of Pll,000.00. However, the motorized tricycle Zukurmi 120,
Motor No. B1OO-25-648 with Chasis No.B-120-05589 was recovered.
1

Pleading guilty upon arraignment, petitioners were sentenced to the penalty provided in Republic Act
No. 6539 known as Anti-Car-napping Act of 1972 which defines motor vehicle as follows:
Motor vehicle is any vehicle propelled by any power other than muscular power using
the public highways, but excepting road rollers, trolley cars, street sweepers, sprinklers,
lawn mowers, bulldozers, graders, fork-lifts amphibian trucks, and cranes if not used
on public highways, vehicles which run only on rails or tracks, and tractors, trailers and
traction engines of all kinds used exclusively for agricultural purposes. Trailers having
any number of wheels, when propelled or intended to be propelled by attachment to a
motor vehicle, shall be classified as separate motor vehicle with no power
rating.
2
(Emphasis supplied).
Contending that the court a quo erred in imposing the penalty prescribed in the Anti-Carnapping Act of
1972 instead of that prescribed in the Revised Penal Code for simple robbery with violence, because the
information did not allege that the motorized tricycle stolen was using the public highway, so as to make
it a motor vehicle as the term is defined in the carnapping law, and therefore failed to inform them that
they were being charged under the cited statute, in violation of their constitutional right to be informed
of the nature and cause of the accusation against the petitioners came to this Court with the instant
petition for review.
The principal issue thus raised is whether a motorized tricycle is a motor vehicle within the definition
given to the term by the Anti-Carnapping Act of 1972.
As a consequence of their contention that the motorized tricycle is not a motor vehicle under the
definition of the aforecited Act, petitioners also claim that they are not properly informed of the cause
and nature of the accusation against them in violation of their constitutional right.
Petitioners maintain that the tricycle in question is not a "motor vehicle" as the anti-carnapping law
defines the term because it is not licensed to operate on the "public highways." The Solicitor General
contends otherwise with the following argument:
The word "public" means "common to all or many; general; open to common use"
(Black's Law Dictionary 1393 [Revised 4th Ed.]. On the other hand, 'highway' refers to a
'free and public road way, or street; one which every person has the right to use (idem.
at p. 862). lt is clear that a street within a town is a public highway if it is used by the
public. To limit the words "public highways" to a national road connecting the various
towns, as petitioners' suggest (Reply dated January 25, 1980) would create a distinction
which the statute itself does not make. Under petitioners' proposition, a distinction
should be made between motor vehicles operating within a town like the motorized
tricycle involved herein, and those using roads connecting towns. This, however, goes
against the well known maxim that where the law does not distinguish, no distinction
should be made (Robles vs. Zambales Chromite Mining Co., 104 PhiL 688). It is also to be
pointed out that to limit the application of the Act to motor vehicles travelling between
different towns, may lead to absurd results. For example, privately owned motorcycle
used by its owner in travelling from one province to another would be covered by the
law. Upon the other hand, a motorized tricycle (with sidecar) which is more expensive
than the former but operated within towns would not be protected by the law. No
unreasonable intendment should be read into a statute so that an injustice may be
worked or an absurb result produced (In re Moore's Estate, N.Y.S. 2nd 281, 165 Misc.
683). It can be concluded, therefore, that the motorized tricycle involves in this case is a
'motor vehicle' within the ambit of section 2 of the Anti-Carnapping Act of 1972. The
lower court correctly imposed the penalty for violation of said Act on herein
petitioners.
3

We perceive no reason not to accord full validity of the Solicitor General's argument, not even on the
petitioner's submission that a motorized tricycle, not having licensed to use a public highway, is not a
motor, vehicle under the provision of the anti-carnapping act.
From the definition cited by the Government which petitioners admit as authoritative, highways are
always public, free for the use of every person. There is nothing in the law that requires a license to use
a public highway to make the vehicle a "motor vehicle" within the definition given the anti-carnapping
law. If a vehicle uses the streets with or without the required license, same comes within the protection
of the law, for the severity of the offense is not to be measured by what kind of streets or highway the
same is used; but by the very nature of the vehicle itself and the use to which it is devoted. Otherwise,
cars using the streets but still unlicensed or unregistered as when they have just beet bought from the
company, or only on test runs, may be stolen without the penal sanction of the anti-carnapping statute,
but only as simple robbery punishable under the provision of the Revised Penal Code. This obviously,
could not have been the intention of the anti-carnapping law.
Going over the enumerations of excepted vehicle, it would readily be noted that any vehicle which is
motorized using the streets which are public, not exclusively for private use, comes within the concept
of motor vehicle. A tricycle which is not included in the exception, is thus deemed to be that kind of
motor vehicle as defined in the law the stealing of which comes within its penal sanction.
In any event, it is a matter of judicial notice that motorized tricycles are running in droves along
highways admittedly public, as those going to the north like Baguio City. Those motorized tricycles
certainly come within the definition of the law, even under the restricted construction that petitioners
would want given to it. If these tricycles are "motor vehicles" then, there is no cogent reason to treat the
tricycle in question differently.
With the foregoing discussion, it would logically follow that the petitioners complaint of not having been
informed of the nature and cause of the accusation against them and for which they were convicted
upon their plea of guilty, is unfounded, legally and factually.
Again, on tills point, We find the observation of the Solicitor General valid, We have no other course
than to sustain it. Thus —
A perusal of the information (Annex 1 of respondent People's Comment dated
November 16, 1979) readily shows that petitioners were not thereby informed that they
were being accused for violation of the Revised Penal Code. The charge merely
designated the offense as one for: "ROBBERY WITH VIOLENCE AGAINST PERSON." The
facts alleged in the information make out a case of "carnapping". This offense is defined
in section 2 of Republic Act No. 6539 as 'the taking, with intent to gain, of a motor
vehicle belonging to another without the latter's consent, or by means of violence
against or intimidation of persons, or by using force upon things The information clearly
specified that what was taken and carried away was "one (1) motorized tricycle." Herein
petitioners cannot claim that they were misled by the information into pleading guilty. It
is not necessary for the protection of the substantial right of the accused, nor the
effective preparation of his defense, that he be informed of the technical name of the
crime of which he stands charged. He must look to the facts alleged (People vs. Cosare,
95 PhiL 656; U.S. vs. Lim San 17 Phil. 275).
FOR ALL THE FOREGOING, the petition is hereby dismissed. No costs.
4

SO ORDERED.

[G.R. No. 109242. January 26, 1999]
LITO C. MARCELO, petitioner, vs. THE HON. SANDIGANBAYAN (First Division) and the PEOPLE OF THE
PHILIPPINES, respondents.
D E C I S I O N
MENDOZA, J.:
This is a petition for review on certiorari filed by Lito Marcelo from a decision of the Sandiganbayan
(First Division)
[1]
convicting him and two others of qualified theft. The information against them alleges
That on or about February 17, 1989, in the Municipality of Makati, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the accused, ARNOLD PASICOLAN, a public officer, being then
an Emergency Laborer assigned as bag opener at the printed matters section of Makati Central Post
Office, and taking advantage of his official position by having access to the mail matters in conspiracy
with accused RONNIE S. ROMERO and LITO MARCELO, both private individuals, did then and there
wilfully, unlawfully and feloniously with grave abuse of confidence, and with intent of gain and without
the consent of the owners thereof, take, steal and carry away from the Central Post office of Makati one
bag containing assorted mail matters some of them containing U.S. Dollar Bills in the aggregate amount
of $500, or its peso equivalent in the amount of P11,000.00, Philippine Currency, to the damage and
prejudice of the different addressee (sic) or the government in the aforesaid mentioned (sic) amount.
CONTRARY TO LAW.
The facts established during the trial show the following:
On February 10, 1989, Jacinto Merete, a letter carrier in the Makati Central Post Office, disclosed
to his chief, Projecto Tumagan, the existence of a group responsible for the pilferage of mail matter in
the post office.
[2]
Among those mentioned by Merete were Arnold Pasicolan, an emergency laborer
assigned as a bag opener in the Printed Matters Section, and Redentor Aguinaldo, a mail sorter of the
Makati Post Office. Merete likewise described the modus operandi of the group.
For this reason, Tumagan sought the aid of the National Bureau of Investigation (NBI) in
apprehending the group responsible for mail pilferage in the Makati Post Office.
On February 17, 1989, NBI Director Salvador Ranin dispatched NBI agents to Legaspi Village
following a report that the group would stage a theft of mail matter on that day. Tumagan accompanied
a team of NBI agents composed of Senior Agent Arles Vela and two other agents in a private car. They
arrived at Legaspi Village at about 1:00 p.m. They stayed at the corner of Adelantado and Gamboa
Streets, while two other teams of NBI agents waited at Amorsolo Street, near the Esguerra Building.
[3]

At 2:00 p.m., a postal delivery jeep, driven by one Henry Orindai, was parked in front of the
Esguerra Building on Adelantado Street.
[4]
Esguerra Building is located between Adelantado and
Amorsolo Streets. Adelantado and Amorsolo Streets are parallel to each other. The passengers of the
postal delivery jeep were Arnold Pasicolan, Jacinto Merete, and the driver, Henry Orindai.
[5]
Pasicolan
alighted from the jeep bringing with him a mail bag. Merete stayed inside the jeep. Pasicolan then
passed through an alley between Esguerra and Montepino Buildings going towards Amorsolo
St.
[6]
Montepino Building is adjacent to Esguerra Building. The two are separated by the alley. Upon
reaching Amorsolo St., Pasicolan gave the mail bag to two persons, who were later identified as Ronnie
Romero and petitioner Lito Marcelo. The latter transferred the contents of the mail bag (i.e., assorted
mail matter) to a travelling bag. The two then secured the bag to the back of their motorcycle.
[7]

Meanwhile, the NBI team led by agent Vela, upon seeing Pasicolan going towards Amorsolo St.,
moved their car and started towards Amorsolo St. They were just in time to see Pasicolan handing over
the mail bag to Marcelo and Romero.
[8]
At that point, Atty. Sacaguing and Arles Vela arrested the two
accused.
Unaware of the arrest of Romero and Marcelo, Pasicolan went back to the postal delivery jeep and
proceeded toward Pasay Road. The NBI agents followed the postal delivery jeep, overtook it, and
arrested Pasicolan.
[9]

The NBI agents brought Pasicolan, Marcelo, and Romero to their headquarters. They also brought
along with them the motorcycle of Romero and Marcelo and the bag of unsorted mail found in their
possession.
[10]
On their way to the NBI headquarters, they passed by the Makati Central Post Office,
intending to arrest another suspect, Redentor Aguinaldo. However, they were not able to find him
there.
[11]

The unsorted mail seized from Marcelo and Romero consisted of 622 letters.
[12]
The names of the
addressees were listed. They were subsequently notified by the Bureau of Posts to claim their
letters. Many of them, after proper identification, were able to claim their letters. Some letters
contained money.
Romero, Marcelo, and Pasicolan were asked to affix their signatures on the envelopes of the
letters. They did so in the presence of the members of the NBI Administrative and Investigative Staff
and the people transacting business with the NBI at that time. According to Director Ranin, they
required the accused to do this in order to identify the letters as the very same letters confiscated from
them.
[13]

NBI Director Ranin allegedly saw US dollar bills in various denominations of 20, 50, and 100
dollars.
[14]
Vela and the other NBI agents stated in their affidavits that there were dollar bills in the
letters which, if converted to Philippine pesos, at the then exchange rate of P22 to US $1, were
worth P11,000.00.
[15]
The addressees agreed to leave the envelopes of the letters with the NBI. Those
letters which were not claimed were opened in court in the presence of the counsel for the defense. The
letters were found to contain three (3) one dollar bills, one (1) five dollar bill, one (1) twenty dollar bill, a
check for twenty-five dollars, and fifty (50) Saudi Arabian riyals.
[16]

Arnold Pasicolan, Ronnie Romero, and herein petitioner Lito Marcelo were charged with infidelity
in the custody of documents. The case was later withdrawn and another information for qualified theft
was filed before the Sandiganbayan.
On March 8, 1993, the Sandiganbayan found all the accused guilty beyond reasonable doubt as
principals of the crime of qualified theft. The dispositive portion of its decision reads:
WHEREFORE, the Court finds the three accused, Arnold Pasicolan y Mabazza, Ronnie Romero y Santos,
and Lito Mercado [should be Marcelo] y Cruz, guilty, as principals, beyond reasonable doubt of the crime
of qualified theft defined in Article 310, in conjunction with Articles 308 and 309, of the Revised Penal
Code. Accordingly, applying the Indeterminate Sentence Law and considering the aggravating
circumstances of taking advantage of public position, the Court imposes upon Arnold Pasicolan y
Mabazza the penalty ranging from EIGHT (8) years, EIGHT (8) months, and ONE (1) day of Prision mayor,
as minimum, to THIRTEEN (13) YEARS, ONE (1) month, and ELEVEN (11) days of reclusion temporal, as
maximum. Applying again the Indeterminate Sentence Law and there being no aggravating nor
mitigating circumstances, the Court imposes upon Ronnie Romero y Santos and Lito Marcelo y Cruz, the
penalty ranging from SEVEN (7) YEARS, four (4) months, and ONE (1) day of prision mayor, as minimum,
to eleven (11) years, SIX (6) months, and TWENTY-ONE (21) days of prision mayor, as maximum.
Hence, the instant petition for review on certiorari based on the following assignment of errors:
(1) Respondent Honorable Court had wrongly made the crucial finding against petitioner that
he has committed the act charged in conspiracy with each other.
(2) Respondent Honorable Court erred in admitting as evidence of petitioner’s guilt the letters
signed by the accused during custodial investigation without the assistance of counsel, in
utter disregard of his constitutional right.
First. Petitioner says that since the subject of the alleged pilferage was mail matter, only a
government employee may be held guilty of qualified theft unless a private individual was shown to
have been in conspiracy with him. He contends that since he is not a government employee, then he
cannot be charged or held guilty of the crime as there is no proof that he conspired with a postal
employee. The petitioner argues that there is no evidence to prove that he was at any time in
conspiracy with the members of the syndicate inside the post office. In fact, petitioner points out,
Jacinto Merete, Projecto Tumagan, and his co-accused Arnold Pasicolan were one in saying that it was
their first time to see him and Romero on February 17, 1989. Likewise, in the meeting allegedly
conducted by the members of the syndicate, he and Romero were not around nor were their names
mentioned. Petitioner says that although he and Romero knew each other, it was only on February 17,
1989 that they saw each other again in order to see a movie.
We cannot understand petitioner’s theory that, as the subject of the pilferage was mail matter,
only a government employee, presumably of the postal service, can be held liable of qualified
theft. What makes the theft of mail matter qualified is the fact that the subject thereof is mail matter,
regardless of whether the offender is a postal employee or a private individual. This much is clear from
Art. 310 of the Revised Penal Code which provides:
Qualified theft. The crime of theft shall be punished by the penalties next higher by two degrees than
those respectively specified in the next preceding article, if committed by a domestic servant, or with
grave abuse of confidence, or if the property stolen is motor vehicle, mail matter or large cattle or
consists of coconuts taken from the premises of a plantation, fish taken from a fishpond or fishery or if
property is taken on the occasion of fire, earthquake, typhoon, volcanic eruption, or any other calamity,
vehicular accident or civil disturbance.
Thus, as long as the thing stolen is one of those enumerated in Art. 310, the crime is qualified
theft. In this case, it is mail matter. Hence, it is not necessary that petitioner be shown to have been
in conspiracy with a government employee in order to hold him liable for qualified theft.
Be that as it may, conspiracy was proven in this case. NBI agent Arles Vela testified that petitioner
was instrumental in transferring the contents of the mail bag which Pasicolan handed to them to their
travelling bag and that afterward petitioner and his co-accused Romero tied the bag to their motorcycle.
Vela’s testimony was corroborated by Projecto Tumagan, who likewise testified that Romero and
Marcelo transferred the contents of the mail bag to their bags. Although Tumagan said petitioner and
Romero had two bags, thus contradicting Vela’s testimony that petitioner and his co-accused had only
one bag, the inconsistency in the testimonies of these two prosecution witnesses is not really of much
importance. What is important is that Tumagan corroborated Vela’s testimony that petitioner helped in
putting the letters in their bag. The discrepancy could be due to the fact that these two witnesses were
inside a car and were at some distance from the persons they were observing. At any rate, during the
cross-examination, Tumagan said that the contents of the mail bag were transferred to one “other
bag” — implying that there was really just one bag involved.
[17]
Moreover, the defense should have
confronted Tumagan with this inconsistency and asked him to explain. For its failure to do so, the
defense cannot for the first time raise the point in this appeal.
Petitioner Marcelo showed no sign of surprise or hesitation when Pasicolan handed the mail bag to
him and Romero. It was apparent he was acting pursuant to a prior agreement because when the mail
bag was given to him, he got the bag and he and Romero then transferred its contents to their travelling
bag. Petitioner acted in concert with Pasicolan and Romero, thus indicating he was in conspiracy with
them. As the Sandiganbayan said:
The accused appear to have committed the acts charged in conspiracy with each other pursuant to a
pre-conceived plan known to all of them to attain a common goal. Thus, when the postal delivery jeep
stopped near Esguerra Building along Adelantado Street, Pasicolan alighted bringing with him a mail bag,
passed through an alley beside Esquerra Building, and upon reaching Amorsolo Street handed over the
mail bag to Romero and Marcelo who were waiting for him. Upon receiving the mail bag they quickly
opened it and transferred its contents to a bag which Aguinaldo provided for the purpose. No words
were exchanged between Pasicolan, on the other hand, and Romero and Marcelo, on the other, in
effecting the delivery. Pasicolan did not ask if Romero and/or Marcelo were the person or persons sent
to receive the mail bag. These facts indicate that the three accused already knew each other and were
fully aware of what each had to do. And when Romero and Marcelo were arrested for receiving the mail
bag, they said nothing to the NBI. Not even a whimper of protest was heard from them. They appear
resigned to their fate after having been caught red-handed.
Petitioner Marcelo claimed that he and Romero met on February 17, 1989 in order to see a movie;
that when Pasicolan handed four envelopes to Romero, he was across the street buying cigarettes; and
that when he joined Romero, a person identifying himself as an NBI agent arrested them. Marcelo
testified:
[18]

ATTY. CRUZ
Q So you were asked by Ronnie Romero if you will be reporting for work at that time?
A Yes, sir.
JUSTICE HERMOSISIMA
Q What time was this when you were asked by Ronnie Romero?
A 1:00 o’clock in the afternoon.
ATTY. CRUZ
Q What was the reason why you were asked by Ronnie Romero?
A He wanted me to go with him to see a movie.
Q Did he tell you at what place you will see a movie?
A No, sir.
Q What was your reply?
A I told him “yes, I will go with you, anyway I have to go to my work at 10:00 o’clock in the
evening.”
. . . .
Q What happened next Mr. Marcelo?
A Then I rode at the back of his motorcycle and we went straight to Makati. Suddenly we stopped
near a building and I asked him what we will do there and he told me he was going to wait for
somebody there.
. . . .
ATTY. CRUZ
Q What was told to you when you reached there?
WITNESS
A He told me he had to wait for somebody there and I told him to hurry up, “I thought you said we
are going to see a movie”, and he said, “this will not take long”.
Q While at Taguig, were you informed by Ronnie Romero that you will be waiting for somebody
when you reached Makati?
A No, sir.
. . . .
Q And what happened next?
A While we were there I told Ronnie Romero I had to buy cigarette from across the street and after
a while, about half an hour, Ronnie called me I saw somebody handing him about four pieces of
envelopes.
Q How would you describe that envelope?
A It was like the Manila envelope that we see being used by the elementary grades.
Q Was there any distinguishing mark in this envelope?
A No, sir.
Q Were you able to see what was the contents of these envelopes?
A No, sir.
Q That person who handed the envelope to Ronnie, do you know him?
A I do not know him.
Q While that envelope was being handed to Ronnie, you mean to say you were across the street?
A Yes, sir.
Q And so you crossed the street to reach Ronnie?
A Yes, sir.
Q When you crossed the street was the envelope still being handed or already handed to Ronnie?
A It was already handed to him.
Q What happened next?
A After I crossed the street somebody shouted at us identifying himself as NBI, “WE are from the
NBI, do not move”.
The foregoing testimony is contrary to the testimony of Ronnie Romero. Romero said that Redentor
Aguinaldo, a mail sorter, had asked him to meet a person in Makati who would give him an envelope to
be delivered to an unidentified person at the BF Homes Subdivision in Parañaque. Romero’s version is
as follows:
[19]

ATTY. I. CRUZ:
Q And do you know a certain person by the name of Redentor Aguinaldo?
JUSTICE HERMOSISIMA:
Q The accusation against you is that you conspired with your co-accused Arnold Pasicolan and Lito
Marcelo in stealing the articles and things stated in the Information. Why do you say that you
are not part of the conspiracy, what do you mean by that statement?
A Because, sir, I do not know what was the contents of the envelope.
You can proceed now.
ATTY. I. CRUZ:
Q You mentioned of an envelope which you claim not to have known the contents of the
same. Who gave you the envelope?
A Arnold Pasicolan.
Q Do you know Arnold Pasicolan prior to and/or before February 17, 1989?
. . . .
A No, sir.
ATTY. I. CRUZ:
Q When for the first time did you come to know Arnold Pasicolan?
A On February 17, sir.
Q When, where specifically did you come to know him?
A At the NBI office, sir.
Q Now...
JUSTICE HERMOSISIMA:
Q February 17, 1989?
A Yes, Your Honor.
Proceed.
. . . .
ATTY. I. CRUZ:
Q Do you know a certain Redentor Aguinaldo?
A Yes, sir.
JUSTICE HERMOSISIMA:
Q Tell us the circumstances under which you received this envelope?
A I received that envelope given to me by Arnold Pasicolan.
Q If you answer in monosyllable we will not understand. Alright, you tell your story?
A Redentor Aguinaldo on February 17 told me that he is going to give me a job. What I will do is
get the envelope and bring it to a certain subdivision in Las Piñas and somebody will pick it up
and pay me P100.00 for it.
Proceed.
ATTY. I. CRUZ:
Q Now, do you know the person to whom you are to deliver the envelope?
A No, sir.
Q Now, if you do now know the person to whom you will deliver the envelope. JUSTICE
HERMOSISIMA:
You may not cross-examine, tell him to tell us facts.
ATTY. I. CRUZ:
Q Where specifically in the subdivision in Parañaque where you will deliver the envelope?
A BF Homes.
JUSTICE HERMOSISIMA:
Q To what particular person will you supposed to deliver it?
A I was just asked to go to that place and somebody will approach me.
Q To make your story more believable, BF Homes in Parañaque is a very big subdivision. You enter
that subdivision and there will be several persons whom you can see there. How will the person
know that you are carrying an envelope for him. Where were you supposed to deliver it. If you
cannot explain that, we will not believe you?
A In that subdivision, there is a vacant place where there are no houses. It is where I often go.
Q BF Homes subdivision in Parañaque has several vacant lots, how will you know what vacant lot
to proceed to?
A It was pointed to me by Aguinaldo.
Q So, Aguinaldo went with you in the morning of that same day and pointed to you the place?
A In the morning of that same day and he pointed to me the place.
Second. The petitioner contends that the Sandiganbayan erred in admitting in evidence the letters
signed by him because he was asked to sign them during custodial investigation without the assistance
of counsel. The following provisions of the Constitution are invoked by petitioner:
Article III, §12(1). - 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. If the person cannot afford the services of counsel, he must be provided with one.
These rights cannot be waived except in writing and in the presence of counsel.
. . . .
(3) Any confession or admission obtained in violation of this or Section 17 hereof shall be inadmissible in
evidence against him.
§17. No person shall be compelled to be a witness against himself.
Petitioner’s counsel says that the signing of petitioner’s and his co-accused’s names was not
a mere mechanical act but one which required the use of intelligence and therefore constitutes self-
incrimination. Petitioner’s counsel presumably has in mind the ruling in Beltran v. Samson
[20]
to the
effect that the prohibition against compelling a man to be a witness against himself extends to any
attempt to compel the accused to furnish a specimen of his handwriting for the purpose of comparing it
with the handwriting in a document in a prosecution for falsification. “Writing is something more than
moving the body, or the hand, or the fingers; writing is not a purely mechanical act because it requires
the application of intelligence and attention,”
[21]
so it was held.
To be sure, the use of specimen handwriting in Beltran is different from the use of petitioner’s
signature in this case. In that case, the purpose was to show that the specimen handwriting matched
the handwriting in the document alleged to have been falsified and thereby show that the accused was
the author of the crime (falsification) while in this case the purpose for securing the signature of
petitioner on the envelopes was merely to authenticate the envelopes as the ones seized from him and
Ronnie Romero. However, this purpose and petitioner’s signatures on the envelope, when coupled with
the testimony of prosecution witnesses that the envelopes seized from petitioner were those given to
him and Romero, undoubtedly help establish the guilt of petitioner. Since these signatures are actually
evidence of admission obtained from petitioner and his co-accused under circumstances contemplated
in Art. III, §§12(1) and 17 of the Constitution, they should be excluded. For indeed, petitioner and his co-
accused signed following their arrest. Hence, they were at the time under custodial investigation,
defined as questioning initiated by law enforcement officers after a person has been taken into custody
or otherwise deprived of his freedom of action in a significant way.
[22]
Under the Constitution, among
the rights of a person under custodial investigation is the right to have competent and independent
counsel preferably of his own choice and if the person cannot afford the services of counsel, that he
must be provided with one.
However, the letters are themselves not inadmissible in evidence. The letters were validly seized
from petitioner and Romero as an incident of a valid arrest. A ruling that petitioner’s admission that the
letters in question were those seized from him and his companion on February 17, 1989 is inadmissible
in evidence does not extend to the exclusion from evidence of the letters themselves. The letters can
stand on their own, being the fruits of a crime validly seized during a lawful arrest. That these letters
were the ones found in the possession of petitioner and his companion and seized from them was
shown by the testimonies of Vela and Tumagan. Indeed, petitioner and his co-accused were not
convicted solely on the basis of the signatures found on the letters but on other evidence, notably the
testimonies of NBI agents and other prosecution witnesses.
WHEREFORE, the decision of the Sandiganbayan is AFFIRMED.
SO ORDERED.
[G.R. Nos. 132625-31. December 18, 2000]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. NOEL SANDOVAL, accused-appellant.
D E C I S I O N
YNARES-SANTIAGO, J.:
For ravishing his two (2) minor step-daughters, Noel Sandoval was charged in seven (7) separate
Informations with seven (7) counts of Rape, five of which were committed against Teresa Micu, then
thirteen (13) years old, and two counts of statutory rape committed against Victoria “Rhea” Micu, then
only eleven (11) years old as evidenced by her Birth Certificate.
[1]
The Informations were filed before the
Regional Trial Court of Dagupan, Pangasinan, Branch 42, and allege as follows:
In Criminal Case No. 97-01815-D
That on or about May 5, 1995 at barangay Casibong, municipality of San Jacinto, province of Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, by means of
force, threat and intimidation, did then and there, wilfully, unlawfully and feloniously have sexual
intercourse with the undersigned complainant TERESA MICU y FERNANDEZ, against her will and consent,
to the damage and prejudice of the latter.
CONTRARY TO LAW.
In Criminal Case No. 97-01816-D
That on or about May 9, 1995 at barangay Casibong, municipality of San Jacinto, province of Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, by means of
force, threat and intimidation, did then and there, wilfully, unlawfully and feloniously have sexual
intercourse with the undersigned complainant TERESA MICU y FERNANDEZ, against her will and consent
to the damage and prejudice of the latter.
CONTRARY TO LAW.
In Criminal Case No. 97-01817-D
That on or about April 24, 1995 at barangay Casibong, municipality of San Jacinto, province of
Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
by means of force, threat and intimidation, did then and there, wilfully, unlawfully and feloniously have
sexual intercourse with the undersigned complainant TERESA MICU y FERNANDEZ, against her will and
consent, to the damage and prejudice of the latter.
CONTRARY TO LAW.
In Criminal Case No. 97-01818-D
That on or about April 18, 1995 at barangay Casibong, municipality of San Jacinto, province of
Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused,
by means of force, threat and intimidation, did then and there, wilfully, unlawfully and feloniously have
sexual intercourse with the undersigned complainant TERESA MICU y FERNANDEZ, against her will and
consent to the damage and prejudice of the latter.
CONTRARY TO LAW.
In Criminal Case No. 97-01819-D
That on or about May 5, 1995 at barangay Casibong, municipality of San Jacinto, province of Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, by means of
force, threat and intimidation, did then and there, wilfully, unlawfully and feloniously have sexual
intercourse with the undersigned complainant TERESA MICU y FERNANDEZ, against her will and consent
to the damage and prejudice of the latter.
CONTRARY TO LAW.
In Criminal Case No. 97-01820-D
That sometime in April 2, 1997 in the evening thereof, at barangay Casibong, municipality of San Jacinto,
province of Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, being then the stepfather, by means of force, threat and intimidation, did, then and
there, wilfully, unlawfully and feloniously have sexual intercourse in their conjugal house with VICTORIA
“RHEA” F. MICU, who is under twelve (12) years old, against her will and consent, to her damage and
prejudice.
CONTRARY to Art. 335, par. 3 of the Revised Penal Code, in relation to R.A. 7659.
In Criminal Case No. 97-01821-D
That sometime in April 5, 1997 in the evening thereof, at barangay Casibong, municipality of San Jacinto,
province of Pangasinan, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, being then the stepfather, by means of force, threat and intimidation, did, then and
there, wilfully, unlawfully and feloniously have sexual intercourse in their conjugal house with VICTORIA
“RHEA” F. MICU, who is under twelve (12) years old, against her will and consent, to her damage and
prejudice.
CONTRARY to Art. 335, par. 3 of the Revised Penal Code, in relation to R.A. 7659.
Accused-appellant was arraigned on July 23, 1997 for the first five (5) counts of rape, wherein he
pleaded NOT GUILTY. The following day, the Public Prosecutor filed a Motion for Leave to Amend the
five (5) criminal complaints to allege the relationship of the victim and the accused. On July 31, 1997,
accused-appellant was scheduled to be arraigned for the other two (2) counts of rape but he failed to
appear because of lack of notice on the Provincial Warden. At this point, the Public Prosecutor called
the attention of the Court to the Amended Informations he filed in the first five (5) cases, to which
accused-appellant has already been arraigned and has pleaded not guilty on July 23, 1997. Counsel for
the defense objected on the ground that the amendment would prejudice the right of accused-
appellant.
The court a quo ruled that since there was no evidence yet presented, the matter of amendment should
be brought at the proper time after the prosecution has presented its evidence. Thus, the resolution of
the Motion to Amend Information in Criminal Cases Nos. 97-01815-D, 97-01816-D, 97-01817-D, 97-
01818-D and 97-01819-D was held in abeyance. Meanwhile, on August 7, 1997, accused-appellant was
arraigned and pleaded NOT GUILTY to the two (2) counts of statutory rape in Criminal Cases Nos. 97-
01820-D and 97-01821-D. Thereafter, a joint trial of all the seven (7) cases was conducted. The
prosecution presented five (5) witnesses, including the two (2) complainants while on the other hand,
the defense presented three (3) witnesses including the accused-appellant.
On January 9, 1998, the court a quo rendered its decision,
[2]
the dispositive portion of which reads:
WHEREFORE, premises considered, the accused NOEL SANDOVAL is found guilty beyond reasonable
doubt of six (6) counts of the crime of rape in Criminal Cases Nos. 97-01815-D, 97-01816-D, 97-01817-D,
97-01819-D, 97-01820-D and 97-01821-D and is hereby sentenced to suffer the mandatory penalty of
DEATH for each act of rape. In addition, he is ordered to pay P50,000.00 as moral damages for each
case or a total of P300,000.00. Also for each count of rape, he is further ordered to pay P5,000.00 as
exemplary damages as example for the public good or a total of P30,000.00. He is however acquitted in
Criminal Case No. 97-01818-D for insufficiency of evidence.
SO ORDERED.
In view of the penalty imposed, the records were elevated to this Court for automatic review
pursuant to Article 47 of the Revised Penal Code and Rule 122, Section 10 of the Rules of Court.
Accused-appellant seeks the reversal of his conviction on the following grounds:
I
The court a quo erred in convicting the accused-appellant of the crime of Rape on the person of Teresa
Micu and imposing the death penalty upon him notwithstanding the fact that, at the time of the alleged
commission, he was not yet married to the victims’ mother.
II
The court a quo erred in convicting the accused-appellant of the crime of Rape over Rhea Micu,
considering her lack of credibility which finds support in the medical findings of the physician who
examined her.
III
The court a quo erred in awarding damages to the complainants notwithstanding that the latter never
testified to establish the same and the only basis of such on record is the testimony of their aunt, Perlita
Fernandez, who is not their legal guardian.
After a thorough scrutiny of the records of the case at bar, this Court finds that the trial court did
not err in convicting accused-appellant of the crime of rape on the person of Teresa Micu. During her
testimony, she clearly and convincingly established before the court a quo the facts and circumstances
that transpired during the several occasions when accused-appellant raped her.
[3]

The rule has always been that in the matter of credibility of witnesses, factual findings of the trial
court should be highly respected. The trial judge is in a better position to pass judgment on the
credibility of witnesses, having had the opportunity to personally hear them, observe their deportment
and manner of testifying and detect if they were telling the truth.
[4]
We find no reason to depart from
this rule in this particular case. It should be remembered also that courts usually give credence to the
testimony of a girl who is a victim of sexual assault because, ordinarily, no person would be willing to
undergo the humiliation of a public trial and to testify on the details of her ordeal were it not to
condemn an injustice.
[5]

However, we cannot agree with the trial court’s imposition of the death penalty on accused-
appellant for the rape of Teresa Micu. The pertinent law in effect at the time of commission of the
crimes in this case, Article 335 of the Revised Penal Code, as amended by Section 11 of R.A. 7659,
provides:
ART. 335. When and how rape is committed. --- Rape is committed by having carnal knowledge of a
woman under any of the following circumstances:
1. By using force or intimidation;
x x x x x x x x x
The death penalty shall also be imposed if the crime of rape is committed with any of the following
attendant circumstances:
1. When the victim is under eighteen (18) years of age and the offender is a parent, guardian,
relative by consanguinity or affinity within the third civil degree, or the common law spouse of the
parent of the victim. x x x. (Underscoring ours)
The above-quoted provision states, inter alia, that where the victim of the crime of rape is under
eighteen (18) years of age and the offender is a common-law spouse of the parent of the victim, the
death penalty shall be imposed. This is one of the seven (7) modes enumerated in Section 11 of R.A. No.
7659 which are considered special circumstances specifically applicable to the crime of rape. In the
subsequent cases of People v. Ilao
[6]
and People v. Medina,
[7]
it was ruled that the seven new attendant
circumstances in Section 11 of R.A. No. 7659 “partake of the nature of qualifying circumstances and not
merely aggravating circumstances,” since said qualifying circumstances are punishable by the single
indivisible penalty of death and not by reclusion perpetua to death. A qualifying circumstance increases
it to a higher penalty while an aggravating circumstance affects only the period of the penalty but does
not increase it to a higher degree. Unlike a generic aggravating circumstance which may be proved even
if not alleged, a qualifying aggravating circumstance cannot be proved as such unless alleged in the
information.
A reading of the Information for the rape of Teresa Micu filed against accused-appellant reveals
that he was merely charged with the crime of simple rape. The fact that accused-appellant is the
common-law spouse of the victim’s parent is not alleged in the Information. What was stated therein
was only the minority of the victim. As we have emphasized, the elements of minority of the victim and
her relationship to the offender must be both alleged.
[8]
As such, the special qualifying circumstance
stated in Section 11 of RA 7659 was not properly pleaded in the Information. Thus, the penalty of death
prescribed in RA 7659 can not be imposed on accused-appellant. Indeed, it would be a denial of the
right of the accused to be informed of the charges against him and, consequently, a denial of due
process if he is charged with simple rape and be convicted of its qualified form punishable with death
although the attendant circumstances qualifying the offense and resulting in the capital punishment was
not alleged in the indictment on which he was arraigned.
[9]

The amendment sought by the prosecution of the five informations, in order to allege the
relationship of accused-appellant to the victim, were clearly substantial in character as they had the
effect of changing the crime charged, thereby exposing accused-appellant to a higher penalty. Such
amendment can no longer be done after accused-appellant has pleaded to the Information for simple
rape on July 23, 1997,
[10]
without violating his constitutional rights. Rule 110, Section 14 of the Rules of
Court, provides:
The information or complaint may be amended, in substance or form, without leave of court, at
anytime before the accused pleads; and thereafter and during the trial as to all matters of form, by leave
and at the discretion of the court, when the same can be done, without prejudice to the rights of the
accused. x x x.
In sum, the failure of the prosecution to allege the relationship of the accused to the victim has
effectively removed the crime from the ambit of Section 11 of Republic Act No. 7659, which prescribes
the death penalty when the victim is under eighteen (18) years of age and the offender is a parent,
ascendant, step-parent, guardian, relative by consanguinity or affinity within the third civil degree or the
common-law spouse of the parent of the victim.
[11]
In the recent cases of People v. Calayca,
[12]
People v.
Tabion
[13]
and People v. Acala,
[14]
where the prosecution failed to allege the fact of minority of the victim
in the Informations, we reduced the penalty imposed from death to reclusion perpetua.
Anent the second assigned error, accused-appellant attempts to discredit Rhea Micu, the second
victim, by invoking the findings of the examining physician, Dr. Luisa Cayabyab, to the effect that she
could not tell whether force attended the laceration of Rhea’s organ and that even the tip of her finger
could not reach the said complainant’s cervix when she attempted to check the same.
[15]
According to
accused-appellant, this shows that the victim had never experienced sexual intercourse.
Appellant’s claim is without merit.
A circumspect scrutiny of Dr. Cayabyab’s testimonial declarations discloses that they were not
conclusive. As a matter of fact, the medical examination, standing alone, is not sufficient to prove nor
disprove the fact of rape. On the contrary, her testimony even tended to clarify the apparent conflict
pointed out by accused-appellant, viz:
Q Likewise one of your findings is that her vagina admits one finger, in this finding of yours, it does
not show any force or can be interpreted that there was no force of inserting something on the
vagina of the patient, is that right?
A I cannot say directly that there was no force because the vagina is so elastic like a rubber, sir.
Q And so you can conclude that there was really no force?
A I cannot say that there was no force because as I have said the vaginal canal is so elastic, sir.
COURT
Q There may be force or no force?
A Yes, Your Honor.
Proceed,
ATTY. TAMINAYA
Q When you stated in your findings, “admits one finger”, could you tell this Court that there was
no penis yet or any object that was inserted?
A As I have said, the vaginal canal is so elastic so I cannot say if there was or there was no object
that was inserted, sir.
COURT
Q Was there something introduced into the vagina or inserted inside?
A Maybe yes, maybe no, sir.
Q I think that the hymen can tell you that something was inserted into the vagina because of the
laceration?
A It is possible, sir.
Proceed.
ATTY. TAMINAYA
Q In this case, there was no showing that the hymen was lacerated?
A There was healed laceration, sir.
COURT
Q But whether or not the laceration was caused by force or no force, you could not tell?
A Yes, Your Honor.
[16]

In the crime of rape, complete or full penetration of the complainant’s private part is not
necessary. Neither is the rupture of the hymen essential. What is fundamental is that the entrance or
at least the introduction of the male organ into the labia of the pudendum is proved. The mere
introduction of the male organ into the labia majora of the victim’s genitalia and not the full penetration
of the complainant’s private part consummates the crime.
[17]
More importantly, it has been ruled
in People v. San Juan
[18]
that in crimes against chastity, the medical examination of the victim is not an
indispensable element for the successful prosecution of the crime, as her testimony alone, if credible, is
sufficient to convict the accused thereof.
As found by the court a quo, Rhea’s testimonies were overwhelmingly straightforward, logical and
convincing as to be worthy of belief and impervious to a mere denial by accused-appellant Noel
Sandoval, to wit:
Q Sometime in the evening of April 2, 1997, do you remember where you were?
A Yes, sir.
Q Where were you?
A I was in Brgy. Casibong, San Jacinto, Pangasinan, sir.
Q Where in Brgy. Casibong were you staying?
A In the house of my step-father, sir.
Q Your step-father, you are referring to the accused in this case?
A Yes, sir.
Q While you were in the house of your step-father in the evening of April 2, 1997, where were you
in relation to that house?
A I was inside the house, sir.
Q What were you doing at that precise time?
A I was tending the small child to sleep, sir.
Q What is the name of that small child?
A John, sir.
Q While you were tending the small child by the name of John, what happened next after that?
A While tending, I was able to sleep, sir.
Q Were you awakened?
A Yes, sir.
Q Why were you awakened, could you explain to the Honorable Court?
A I was awaken because somebody went on top of me, sir.
Q When somebody went on top of you, who was that person?
A Noel Sandoval, sir.
Q When Noel Sandoval went on top of you, what happened next after that?
A He removed my shortpant and my pantie, sir.
Q After Noel Salvador removed your shortpant and pantie, what did Noel Sandoval do, if he did
anything?
A After he removed my shortpant and my pantie, Noel Sandoval also removed his pants and brief
and thereafter, he inserted his penis into my vagina, sir.
Q After Noel Sandoval inserted his penis to your vagina, what did Noel Sandoval do, if he did
anything?
A He kissed me, sir.
Q What part of your body did Noel Sandoval kiss you?
A My neck, sir.
Q What else?
A Only my neck, sir.
Q On April 5, 1997, do you remember where you were?
A I was also in the house of my step-father, sir.
Q What were you doing in that precise time of the day?
A I was already asleep then, sir.
Q Were you awakened?
A Yes, sir.
Q Why? Could you explain before the Honorable Court why you were awakened on the evening of
April 5, 1997?
A I was awakened because I felt pain, sir.
Q Why did you feel pain.
A I felt pain inside my vagina, sir.
Q Why? Can you explain before the Honorable Court why you felt pain in your vagina?
A Because my step-father inserted his penis inside my vagina, sir.
Q What part of the house of your step-father did he insert his penis?
A Inside the house, sir.
[19]

It is a well-settled rule that an affirmative testimony is far stronger than a negative testimony,
especially so when it comes from the mouth of a credible witness.
[20]

We agree with the trial court that the evidence for the prosecution has proved beyond reasonable
doubt that Noel Sandoval is guilty of the rape of Rhea Micu. However, as in the other four cases, the
death penalty can not be imposed on him. The prosecution failed to prove that accused-appellant was
legally married to the victim’s mother, in order to substantiate the allegation in the Amended
Informations in Criminal Cases Nos. 01820-D and 01821-D that the accused-appellant is the stepfather
of the victim. In People v. Brigildo,
[21]
a stepdaughter was defined as the daughter of one’s spouse by a
previous marriage or the daughter of one of the spouses by a previous marriage. It is the burden of the
prosecution to prove with certainty the fact that the victim was the stepdaughter of the accused-
appellant to justify the imposition of the death penalty. Corollarily, the prosecution must establish that
accused-appellant is legally married to the victim’s mother. In order that the qualifying circumstances
under Section 11 of R.A. 7659, which raises the penalty of rape to death, can be appreciated, the
circumstances must be both alleged and proved. Accordingly, the proper penalty for the two counts of
rape against Rhea Micu is reclusion perpetua.
Finally, we affirm the trial court’s award of moral and exemplary damages to the complainants
notwithstanding that the latter never testified to establish the same.
The award of moral damages for rape is proper as it is provided in Article 2219 (3) of the Civil
Code. In accordance with prevailing jurisprudence, accused-appellant should be made to pay
P50,000.00, especially considering that the offended parties were of tender age at the time of the
crime.
[22]
In People v. Prades,
[23]
it was ruled that the award of moral damages to the victim is proper
even if there was no proof presented during the trial as basis therefor. The fact that the complainant
suffered the trauma of mental, physical and psychological sufferings which constitute the bases for
moral damages are too obvious to still require the recital thereof at the trial by the victim, since the
Court itself even assumes and acknowledges such agony on her part as a gauge of her credibility.
[24]

On the other hand, exemplary damages may also be awarded in criminal cases as part of the civil
liability if the crime was committed with one or more aggravating circumstances.
[25]
Accused-appellant
being the stepfather of the victims, relationship should be appreciated as an aggravating circumstance
under Article 15 of the Revised Penal Code.
In addition to moral and exemplary damages, civil indemnity must also be awarded to the victims
since it is mandatory upon the finding of the fact of rape.
[26]
The recent judicial prescription is that the
indemnification for the victim shall be in the amount of P50,000.00 for each count of rape if the death
penalty is not imposed.
[27]

WHEREFORE, the decision of the Regional Trial Court of Dagupan, Pangasinan, Branch 42, is
AFFIRMED with the MODIFICATION that accused-appellant Noel Sandoval is found guilty of four (4)
counts of simple rape committed against Teresa Micu and two (2) counts of simple rape committed
against Victoria “Rhea” Micu, and is hereby sentenced to suffer the penalty of RECLUSION PERPETUAfor
each of the six (6) counts.
Further, accused-appellant is ordered to pay P50,000.00 for each of the six (6) counts of rape, or a
total of P300,000.00, as moral damages; P10,000.00 for each of the six (6) counts of rape, or a total of
P60,000.00, as exemplary damages; and P50,000.00 for each of the six (6) counts of rape, or a total of
P300,000.00, as civil indemnity.
SO ORDERED.

G.R. No. 97471 February 17, 1993
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ISABELO PUNO y GUEVARRA, alias "Beloy," and ENRIQUE AMURAO y PUNO, alias "Enry," accused-
appellants.
The Solicitor General for plaintiff-appellee.
Edward C. Castañeda for accused-appellants.

REGALADO, J.:
The primal issue for resolution in this case is whether accused-appellants committed the felony of
kidnapping for ransom under Article 267 of the Revised Penal Code, as charged in the information; or a
violation of Presidential Decree No. 532 (Anti-Piracy and Anti-Highway Robbery Law of 1974), as
contended by the Solicitor General and found by the trial court; or the offense of simple robbery
punished by Paragraph 5, Article 294 of the Revised Penal Code, as claimed by the defense.
In an information dated and filed on May 31, 1989 in the Regional Trial Court of Quezon City, Branch
103, as Criminal Case No. Q-57404 thereof, appellants were charged with kidnapping for ransom
allegedly committed in the following manner:
That on or about the 13th day of January, 1988 in Quezon City, Philippines and within
the jurisdiction of this Honorable Court, the said accused, being then private individuals,
conspiring together, confederating with and mutually helping each other, did, then and
there, wilfully, unlawfully and feloniously kidnap and carry away one MARIA DEL
SOCORRO SARMIENTO y MUTUC * for the purpose of extorting ransom, to the damage
and prejudice of the said offended party in such amount as may be awarded to her
under the provisions of the Civil Code.
1

On a plea of not guilty when arraigned,
2
appellants went to trial which ultimately resulted in a judgment
promulgated on September 26, 1990 finding them guilty of robbery with extortion committed on a
highway, punishable under Presidential Decree No. 532, with this disposition in the fallo thereof:
ACCORDINGLY, judgment is hereby rendered finding the accused ISABELO PUNO and
ENRIQUE AMURAO GUILTY as principals of robbery with extortion committed on a
highway and, in accordance with P.D. 532, they are both sentenced to a jail term
of reclusion perpetua.
The two accused are likewise ordered to pay jointly and severally the offended private
victim Ma. Socorro M. Sarmiento the sum of P7,000.00 as actual damages and P3,000.00
as temperate damages.
3

Before us now in this appeal, appellants contend that the court a quo erred (1) in convicting them under
Presidential Decree No. 532 since they were not expressly charged with a crime therein; (2) in applying
Sections 4 and 5, Rule 120 of the Rules of Court since the charge under said presidential decree is not
the offense proved and cannot rightly be used as the offense proved which is necessarily included in the
offense charged.
4

For the material antecedents of this case, we quote with approval the following counter-statement of
facts in the People's brief
5
which adopted the established findings of the court a quo, documenting the
same with page references to the transcripts of the proceedings, and which we note are without any
substantial divergence in the version proffered by the defense.
This is a prosecution for kidnapping for ransom allegedly done on January 13, 1988 by
the two accused (tsn, Jan. 8, 1990, p. 7).
Mrs. Maria Socorro Mutuc-Sarmiento owns a bakeshop in Araneta Avenue, Quezon City
called Nika Cakes and Pastries. She has a driver of her own just as her husband does
(Ibid., pp. 4-6).
At around 5:00 in the afternoon of January 13, 1988, the accused Isabelo Puno, who is
the personal driver of Mrs. Sarmiento's husband (who was then away in Davao
purportedly on account of local election there) arrived at the bakeshop. He told Mrs.
Socorro that her own driver Fred had to go to Pampanga on an emergency (something
bad befell a child), so Isabelo will temporary (sic) take his place (Id., pp. 8-9).
Mrs. Socorro's time to go home to Valle Verde in Pasig came and so she got into the
Mercedes Benz of her husband with Isabelo on (sic) the wheel. After the car turned right
in (sic) a corner of Araneta Avenue, it stopped. A young man, accused Enrique Amurao,
boarded the car beside the driver (Id., pp. 9-10).
Once inside, Enrique clambered on top of the back side of the front seat and went onto
where Ma. Socorro was seated at the rear. He poke (sic) a gun at her (Id., p. 10).
Isabelo, who earlier told her that Enrique is his nephew announced, "ma'm, you know, I
want to get money from you." She said she has money inside her bag and they may get
it just so they will let her go. The bag contained P7,000.00 and was taken (Id., pp. 11-14).
Further on, the two told her they wanted P100,000.00 more. Ma. Socorro agreed to give
them that but would they drop her at her gas station in Kamagong St., Makati where the
money is? The car went about the Sta. Mesa area. Meanwhile, Ma. Socorro clutched her
Rosary and prayed. Enrique's gun was menacingly storing (sic) at her soft bread (sic)
brown, perfumed neck. He said he is an NPA and threatened her (Id., p.15).
The car sped off north towards the North superhighway. There Isabelo, Beloy as he is
called, asked Ma. Socorro to issue a check for P100,000.00. Ma. Socorro complied. She
drafted 3 checks in denominations of two for P30 thousand and one for P40 thousand.
Enrique ordered her to swallow a pill but she refused (Id., pp. 17-23).
Beloy turned the car around towards Metro Manila. Later, he changed his mind and
turned the car again towards Pampanga. Ma. Socorro, according to her, jumped out of
the car then, crossed to the other side of the superhighway and, after some vehicles
ignored her, she was finally able to flag down a fish vendors van. Her dress had blood
because, according to Ma. Socorro, she fell down on the ground and was injured when
she jumped out of the car. Her dress was torn too (Id., pp. 23-26).
On reaching Balintawak, Ma. Socorro reported the matter to CAPCOM (Id., p. 27).
Both accused were, day after, arrested. Enrique was arrested trying to encash Ma.
Socorro's P40,000.00 check at PCI Bank, Makati. (tsn, Oct. 18, 1989, pp. 10-13)
6

As observed by the court below, the defense does not dispute said narrative of complainant, except
that, according to appellant Puno, he stopped the car at North Diversion and freely allowed complainant
to step out of the car. He even slowed the car down as he drove away, until he saw that his employer
had gotten a ride, and he claimed that she fell down when she stubbed her toe while running across the
highway.
7

Appellants further testified that they brought the Mercedez Benz car to Dolores, San Fernando,
Pampanga and parked it near a barangay or police outpost. They thereafter ate at a restaurant and
divided their loot.
8
Much later, when he took the stand at the trial of this case, appellant Puno tried to
mitigate his liability by explaining that he was in dire need of money for the medication of his ulcers.
9

On these relatively simple facts, and as noted at the start of this opinion, three theories have been
advanced as to what crime was committed by appellants. The trial court cohered with the submission of
the defense that the crime could not be kidnapping for ransom as charged in the information. We
likewise agree.
Prefatorily, it is worth recalling an accepted tenet in criminal law that in the determination of the crime
for which the accused should be held liable in those instances where his acts partake of the nature of
variant offenses, and the same holds true with regard to the modifying or qualifying circumstances
thereof, his motive and specific intent in perpetrating the acts complained of are invaluable aids in
arriving at a correct appreciation and accurate conclusion thereon.
Thus, to illustrate, the motive of the accused has been held to be relevant or essential to determine the
specific nature of the crime as, for instance, whether a murder was committed in the furtherance of
rebellion in which case the latter absorbs the former, or whether the accused had his own personal
motives for committing the murder independent of his membership in the rebellious movement in
which case rebellion and murder would constitute separate offenses.
10
Also, where injuries were
inflicted on a person in authority who was not then in the actual performance of his official duties, the
motive of the offender assumes importance because if the attack was by reason of the previous
performance of official duties by the person in authority, the crime would be direct assault; otherwise, it
would only be physical injuries.
11

In the case at bar, there is no showing whatsoever that appellants had any motive, nurtured prior to or
at the time they committed the wrongful acts against complainant, other than the extortion of money
from her under the compulsion of threats or intimidation. This much is admitted by both appellants,
without any other esoteric qualification or dubious justification. Appellant Puno, as already stated,
candidly laid the blame for his predicament on his need for funds for, in his own testimony, "(w)hile we
were along the way Mam (sic) Corina was telling me "Beloy, I know your family very well and I know that
your (sic) not (a) bad person, why are you doing this?" I told her "Mam, (sic), because I need money and
I had an ulcer and that I have been getting an (sic) advances from our office but they refused to give me
any bale (sic). . . ."
12

With respect to the specific intent of appellants vis-a-vis the charge that they had kidnapped the victim,
we can rely on the proverbial rule of ancient respectability that for this crime to exist, there must be
indubitable proof that
the actual intent of the malefactors was to deprive the offended party of her liberty,
13
and not where
such restraint of her freedom of action was merely an incident in the commission of another offense
primarily intended by the offenders. Hence, as early as United States vs. Ancheta,
14
and consistently
reiterated thereafter,
15
it has been held that the detention and/or forcible taking away of the victims by
the accused, even for an appreciable period of time but for the primary and ultimate purpose of killing
them, holds the offenders liable for taking their lives or such other offenses they committed in relation
thereto, but the incidental deprivation of the victims' liberty does not constitute kidnapping or serious
illegal detention.
That appellants in this case had no intention whatsoever to kidnap or deprive the complainant of her
personal liberty is clearly demonstrated in the veritably confessional testimony of appellant Puno:
Q At what point did Mrs. Sarmiento handed (sic) the bag containing the
P7,000.00 to your nephew?
A Santo Domingo Exit.
Q And how about the checks, where were you already when the checks
was (sic) being handed to you?
A Also at the Sto. Domingo exit when she signed the checks.
Q If your intention was just to robbed (sic) her, why is it that you still did
not allow her to stay at Sto. Domingo, after all you already received the
money and the checks?
A Because we had an agreement with her that when she signed the
checks we will take her to her house at Villa (sic) Verde.
Q And why did you not bring her back to her house at Valle Verde when
she is (sic) already given you the checks?
A Because while we were on the way back I (sic) came to my mind that
if we reach Balintawak or some other place along the way we might be
apprehended by the police. So when we reached Santa Rita exit I told
her "Mam (sic) we will already stop and allow you to get out of the
car."
16

Neither can we consider the amounts given to appellants as equivalent to or in the nature of ransom,
considering the immediacy of their obtention thereof from the complainant personally. Ransom, in
municipal criminal law, is the money, price or consideration paid or demanded for redemption of a
captured person or persons, a payment that releases from captivity.
17
It can hardly be assumed that
when complainant readily gave the cash and checks demanded from her at gun point, what she gave
under the circumstances of this case can be equated with or was in the concept of ransom in the law of
kidnapping. These were merely amounts involuntarily surrendered by the victim upon the occasion of a
robbery or of which she was summarily divested by appellants. Accordingly, while we hold that the
crime committed is robbery as defined in Article 293 of the Code, we, however, reject the theory of the
trial court that the same constitutes the highway robbery contemplated in and punished by Presidential
Decree No. 532.
The lower court, in support of its theory, offers this ratiocination:
The court agrees that the crime is robbery. But it is also clear from the allegation in the
information that the victim was carried away and extorted for more money. The
accused admitted that the robbery was carried on from Araneta Avenue up to the North
Superhighway. They likewise admitted that along the way they intimidated Ma. Socorro
to produce more money that she had with her at the time for which reason Ma.
Socorro, not having more cash, drew out three checks. . . .
In view of the foregoing the court is of the opinion that the crimes committed is that
punishable under P.D. 532 (Anti-Piracy and Anti-Highway Robbery Law of 1974) under
which where robbery on the highway is accompanied by extortion the penalty
is reclusion perpetua.
18

The Solicitor General concurs, with the observation that pursuant to the repealing clause in Section 5 of
said decree, "P.D. No- 532 is a modification of the provisions of the Revised Penal Code, particularly
Article 267 which
are inconsistent with it."
19
Such opinion and complementary submission consequently necessitate an
evaluation of the correct interplay between and the legal effects of Presidential Decree No. 532 on the
pertinent Provisions of the Revised Penal Code, on which matter we are not aware that any definitive
pronouncement has as yet been made.
Contrary to the postulation of the Solicitor General, Presidential Decree No. 532 is not a modification of
Article 267 of the Revised Penal Code on kidnapping and serious illegal detention, but of Articles 306
and 307 on brigandage. This is evident from the fact that the relevant portion thereof which treats of
"highway robbery" invariably uses this term in the alternative and synonymously with brigandage, that
is, as "highway robbery/brigandage." This is but in line with our previous ruling, and which still holds
sway in criminal law, that highway robbers (ladrones) and brigands are synonymous.
20

Harking back to the origin of our law on brigandage (bandolerismo) in order to put our discussion
thereon in the proper context and perspective, we find that a band of brigands, also known as
highwaymen or freebooters, is more than a gang of ordinary robbers. Jurisprudence on the matter
reveals that during the early part of the American occupation of our country, roving bands were
organized for robbery and pillage and since the then existing law against robbery was inadequate to
cope with such moving bands of outlaws, the Brigandage Law was passed.
21

The following salient distinctions between brigandage and robbery are succinctly explained in a treatise
on the subject and are of continuing validity:
The main object of the Brigandage Law is to prevent the formation of bands of robbers.
The heart of the offense consists in the formation of a band by more than three armed
persons for the purpose indicated in art. 306. Such formation is sufficient to constitute a
violation of art. 306. It would not be necessary to show, in a prosecution under it, that a
member or members of the band actually committed robbery or kidnapping or any
other purpose attainable by violent means. The crime is proven when the organization
and purpose of the band are shown to be such as are contemplated by art 306. On the
other hand, if robbery is committed by a band, whose members were not primarily
organized for the purpose of committing robbery or kidnapping, etc., the crime would
not be brigandage, but only robbery. Simply because robbery was committed by a band
of more than three armed persons, it would not follow that it was committed by a band
of brigands. In the Spanish text of art. 306, it is required that the band "sala a los
campos para dedicarse a robar."
22
(Emphasis supplied).
In fine, the purpose of brigandage is, inter alia, indiscriminate highway robbery. If the purpose is only a
particular robbery, the crime is only robbery, or robbery in band if there are at least four armed
participants.
23
The martial law legislator, in creating and promulgating Presidential Decree No. 532 for
the objectives announced therein, could not have been unaware of that distinction and is presumed to
have adopted the same, there being no indication to the contrary. This conclusion is buttressed by the
rule on contemporaneous construction, since it is one drawn from the time when and the circumstances
under which the decree to be construed originated. Contemporaneous exposition or construction is the
best and strongest in the law.
24

Further, that Presidential Decree No. 532 punishes as highway robbery or brigandage only acts of
robbery perpetrated by outlaws indiscriminately against any person or persons on Philippine highways
as defined therein, and not acts of robbery committed against only a predetermined or particular victim,
is evident from the preambular clauses thereof, to wit:
WHEREAS, reports from law-enforcement agencies reveal that lawless elements are still
committing acts of depredation upon the persons and properties of innocent and
defenseless inhabitants who travel from one place to another, thereby disturbing the
peace, order and tranquility of the nation andstunting the economic and social progress
of the people:
WHEREAS, such acts of depredations constitute . . . highway robbery/brigandage which
are among the highest forms of lawlessness condemned by the penal statutes of all
countries;
WHEREAS, it is imperative that said lawless elements be discouraged from perpetrating
such acts of depredaions by imposing heavy penalty on the offenders, with the end in
view of eliminating all obstacles to the economic, social, educational and community
progress of the people. (Emphasis supplied).
Indeed, it is hard to conceive of how a single act of robbery against a particular person chosen by the
accused as their specific victim could be considered as committed on the "innocent and defenseless
inhabitants who travel from one place to another," and which single act of depredation would be
capable of "stunting the economic and social progress of the people" as to be considered "among the
highest forms of lawlessness condemned by the penal statutes of all countries," and would accordingly
constitute an obstacle "to the economic, social, educational and community progress of the people, "
such that said isolated act would constitute the highway robbery or brigandage contemplated and
punished in said decree. This would be an exaggeration bordering on the ridiculous.
True, Presidential Decree No. 532 did introduce amendments to Articles 306 and 307 of the Revised
Penal Code by increasing the penalties, albeit limiting its applicability to the offenses stated therein
when committed on the highways and without prejudice to the liability for such acts if committed.
Furthermore, the decree does not require that there be at least four armed persons forming a band of
robbers; and the presumption in the Code that said accused are brigands if they use unlicensed firearms
no longer obtains under the decree. But, and this we broadly underline, the essence of brigandage
under the Code as a crime of depredation wherein the unlawful acts are directed not only against
specific, intended or preconceived victims, but against any and all prospective victims anywhere on the
highway and whosoever they may potentially be, is the same as the concept of brigandage which is
maintained in Presidential Decree No. 532, in the same manner as it was under its aforementioned
precursor in the Code and, for that matter, under the old Brigandage Law.
25

Erroneous advertence is nevertheless made by the court below to the fact that the crime of robbery
committed by appellants should be covered by the said amendatory decree just because it was
committed on a highway. Aside from what has already been stressed regarding the absence of the
requisite elements which thereby necessarily puts the offense charged outside the purview and
intendment of that presidential issuance, it would be absurd to adopt a literal interpretation that any
unlawful taking of property committed on our highways would be covered thereby. It is an elementary
rule of statutory construction that the spirit or intent of the law should not be subordinated to the letter
thereof. Trite as it may appear, we have perforce to stress the elementary caveat that he who considers
merely the letter of an instrument goes but skin deep into its meaning,
26
and the fundamental rule that
criminal justice inclines in favor of the milder form of liability in case of doubt.
If the mere fact that the offense charged was committed on a highway would be the determinant for the
application of Presidential Decree No. 532, it would not be farfetched to expect mischievous, if not
absurd, effects on the corpus of our substantive criminal law. While we eschew resort to a reductio ad
absurdum line of reasoning, we apprehend that the aforestated theory adopted by the trial court falls
far short of the desideratum in the interpretation of laws, that is, to avoid absurdities and conflicts. For,
if a motor vehicle, either stationary or moving on a highway, is forcibly taken at gun point by the
accused who happened to take a fancy thereto, would the location of the vehicle at the time of the
unlawful taking necessarily put the offense within the ambit of Presidential Decree No. 532, thus
rendering nugatory the categorical provisions of the Anti-Carnapping Act of 1972?
27
And, if the scenario
is one where the subject matter of the unlawful asportation is large cattle which are incidentally being
herded along and traversing the same highway and are impulsively set upon by the accused, should we
apply Presidential Decree No. 532 and completely disregard the explicit prescriptions in the Anti-Cattle
Rustling Law of 1974?
28

We do not entertain any doubt, therefore, that the coincidental fact that the robbery in the present case
was committed inside a car which, in the natural course of things, was casually operating on a highway,
is not within the situation envisaged by Section 2(e) of the decree in its definition of terms. Besides, that
particular provision precisely defines "highway robbery/brigandage" and, as we have amply
demonstrated, the single act of robbery conceived and committed by appellants in this case does not
constitute highway robbery or brigandage.
Accordingly, we hold that the offense committed by appellants is simple robbery defined in Article 293
and punished under Paragraph 5 of Article 294 of the Revised Penal Code with prision correccional in its
maximum period to prision mayor in its medium period. Appellants have indisputably acted in
conspiracy as shown by their concerted acts evidentiary of a unity of thought and community of
purpose. In the determination of their respective liabilities, the aggravating circumstances of
craft
29
shall be appreciated against both appellants and that of abuse of confidence shall be further
applied against appellant Puno, with no mitigating circumstance in favor of either of them. At any rate,
the intimidation having been made with the use of a firearm, the penalty shall be imposed in the
maximum period as decreed by Article 295 of the Code.
We further hold that there is no procedural obstacle to the conviction of appellants of the crime of
simple robbery upon an information charging them with kidnapping for ransom, since the former
offense which has been proved is necessarily included in the latter offense with which they are
charged.
30
For the former offense, it is sufficient that the elements of unlawful taking, with intent to
gain, of personal property through intimidation of the owner or possessor thereof shall be, as it has
been, proved in the case at bar. Intent to gain (animus lucrandi) is presumed to be alleged in an
information where it is charged that there was unlawful taking (apoderamiento) and appropriation by
the offender of the things subject of the robbery.
31

These foregoing elements are necessarily included in the information filed against appellants which, as
formulated, allege that they wilfully, unlawfully and feloniously kidnapped and extorted ransom from
the complainant. Such allegations, if not expressly but at the very least by necessary implication, clearly
convey that the taking of complainant's money and checks (inaccurately termed as ransom) was
unlawful, with intent to gain, and through intimidation. It cannot be logically argued that such a charge
of kidnapping for ransom does not include but could negate the presence of any of the elements of
robbery through intimidation of persons.
32

WHEREFORE, the assailed judgment of the trial court is hereby SET ASIDE and another one is rendered
CONVICTING accused-appellants Isabelo Puno y Guevarra and Enrique Amurao y Puno of robbery as
Punished in Paragraph 5 of Article 294, in relation to Article 295, of the Revised Penal Code and
IMPOSING on each of them an indeterminate sentence of four (4) years and two (2) months of prision
correccional, as minimum, to ten (10) years of prision mayor, as maximum, and jointly and severally pay
the offended party, Maria del Socorro M. Sarmiento, the amounts of P7,000.00 as actual damages and
P20,000.00 as moral damages, with costs.
SO ORDERED.
G.R. No. 113547 February 9, 1995
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ANITA BAUTISTA y LATOJA, accused-appellant.

PUNO, J.:
Four (4) separate Informations
1
were filed before the Regional Trial Court of Manila (Branch XLI) against
accused ANITA BAUTISTA y LATOJA, charging her with the crimes of Illegal Recruitment In Large
Scale
2
and Estafa.
3

Upon arraignment on January 29, 1992, accused pleaded NOT GUILTY.
4
The four (4) cases were tried
jointly.
After trial, the court a quo found accused guilty as charged.
5
In the illegal recruitment case, she was
meted the penalty of life imprisonment and ordered to pay P 100,000.00 as fine. In the estafa cases, she
was sentenced from two (2) years, eight (8) months and twenty one (21) days of prision correccional as
minimum, to six (6) years, five (5) months and eleven (11) days of prision mayor as maximum for each
count of estafa, and pay each complainant the amount of P40,000.00 as civil indemnity.
Accused, thru counsel, filed her Notice of Appeal, dated March 6, 1992, indicating her desire to elevate
her case to this Court.
6
The records of the case were, however, transmitted by the trial court to the
Court of Appeals. In its Decision
7
dated November 26, 1993, the appellate court affirmed appellant's
conviction. However, it modified the penalty for the three (3) estafa cases. The dispositive portion of the
decision of the appellate court states:
WHEREFORE, in Criminal Case No. 92-102377, the Court finds accused Anita
Bautista GUILTY BEYOND REASONABLE DOUBT of the crime of illegal recruitment,
described and penalized under Article 13 (b), Article 38 (a) and (b) and Article 39 (a) of
the Labor Code, and imposes upon her the penalty of life imprisonment and fine of
P100,000.00. . . .
Insofar as Criminal Case No. 92-102378, Criminal Case No. 92-102379 and Criminal Case
No. 92-102380, the Court renders judgment, finding accused Anita Bautista GUILTY
BEYOND REASONABLE DOUBT of the crime of estafa, described and penalized under
Article 315 par. 2 (a) of the Revised Penal Code, and sentencing her in each criminal case
to the indeterminate penalty of (sic) from FOUR (4) YEARS and TWO (2) MONTHS of
prision correccional, as minimum, to NINE (9) YEARS of prision mayor, as maximum, and
to pay each complainants Remigio Fortes, Anastacio Amor and Dominador Costales, the
amount of P40,000.00, without subsidiary imprisonment in case of insolvency, with
costs. Accordingly, the penalty imposed upon accused by the lower court isMODIFIED.
IT IS SO ORDERED.
Pursuant to Section 13 of Rule 124, the appellate court elevated to us the records of the case for review.
Notice was given to appellant for her to file additional Brief if she so desires. None was filed in her
behalf.
The facts are as found by the appellate court:
Sometime in August 1991, accused Anita Bautista approached Romeo Paguio at the
latter's restaurant at 565 Padre Faura St., Manila, and offered job openings abroad. At
that time, Paguio had relatives who were interested to work abroad. Accused, who also
operated a restaurant nearby at Padre Faura, informed Paguio that she knew somebody
who could facilitate immediate employment in Taiwan for Paguio's relatives. Accused
Anita Bautista introduced Rosa Abrero to Paguio. Abrero informed him that the
applicants could leave for Taiwan within a period of one-month from the payment of
placement fees. They informed Paguio that the placement fee was P40,000.00 for each
person. Paguio contacted his relatives, complainants Remigio Fortes and Dominador
Costales who were his brothers-in-law, and Anastacio Amor, a cousin, who lost no time
raising the needed money and gave the same to Paguio. The three were to work as
factory workers and were to be paid $850.00 monthly salary each. Paguio gave Rosa
Abrero P20,000.00, which would be used in following up the papers of the
complainants; later he gave accused P40,000.00 and P60,000.00 in separate amounts,
totalling P100,000.00, as the remaining balance. Abrero and accused Bautista promised
Paguio and complainants that the latter could leave for Taiwan before September 25,
1991. As September 25, 1991 approached, accused Bautista informed Paguio and
complainants that there was a delay in the latter's departure because their tickets and
visas had not yet been released. Accused re-scheduled the complainants' departure to
October 10, 1991. Came October 10, 1991, and complainants were still not able to
leave. Paguio then required accused Bautista to sign the "Acknowledgment Receipt,"
dated October 11, 1991, in which accused admitted having received the sum of
P100,000.00 from Paguio, representing payment of plane tickets, visas and other travel
documents (Exhibit A). Paguio asked accused to return complainants' money; accused,
however, promised that complainants could leave for Taiwan before Christmas. From
POEA, Paguio secured a certification, dated January 9, 1992 attesting that Annie
Bautista and Rosa Abrero are not licensed or authorized to recruit workers for overseas
employment (Exhibit B). Complainants Fortes, Amor and Costales, as well as Paguio,
gave their written statements at the Office of the Assistant Chief Directorial Staff for
Intelligence of the WPDC, complaining about their being victims of illegal recruitment by
Rosa Abrero and Annie Bautista (Exhibits C, D, E and F).
The issue boils down to whether or not reasonable doubt exists to warrant the acquittal of appellant
Anita Bautista.
We find none.
The Labor Code defines recruitment and placement as referring to "any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not: Provided that any
person or entity which, in any manner, offers or promises for a fee employment to two or more persons
shall be deemed engaged in recruitment and placement."
8

It is settled that the essential elements of the crime of illegal recruitment in large scale are: (1) the
accused engages in the recruitment and placement of workers, as defined under Article 13 (b) or in any
prohibited activities under Article 34 of the Labor Code; (2) accused has not complied with the
guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of
a license or an authority to recruit and deploy workers, either locally or overseas; and (3) accused
commits the same against three (3) or more persons, individually or a group.
9

For her exculpation, appellant denied she recruited complainants for employment abroad. She claimed
Romeo Paguio was the one who approached her and asked for someone who could help his relatives
work abroad. She thus introduced Rosa Abrero, a regular customer at her restaurant, to Paguio. In turn,
Paguio introduced Abrero to complainants in their subsequent meeting. Further, appellant testified she
was present during the recruitment of complainants since their meeting with Abrero was held at her
restaurant. Appellant likewise stressed she did not receive the amount of P100,000.00, as stated in the
Acknowledgment Receipt, dated October 11, 1991, but merely acknowledged that said sum was
received by Rosa Abrero from Romeo Paguio.
Appellant's defense does not persuade us.
Appellant's active participation in the recruitment process of complainants belies her claim of
innocence. Complainants' recruitment was initiated by appellant during her initial meeting with Romeo
Paguio. She gave the impression to Romeo Paguio and the complainants that her cohort, Rosa Abrero,
could send workers for employment abroad. She introduced Rosa Abrero to Romeo Paguio. Both
women assured the departure of complainants to Taiwan within one month from payment of the
placement fee of P40,000.00 per person. They even claimed that complainants would work as factory
workers for a monthly salary of $850.00 per person. Moreover, it was appellant who informed Romeo
Paguio that complainants' scheduled trip to Taiwan would be on October 10, 1991, instead of the
original departure date of September 25, 1991, due to some problems on their visas and travel
documents.
Her close association with Rosa Abrero is further strengthened by the Acknowledgment Receipt, dated
October 11, 1991, which was prepared by Romeo Paguio for the protection of complainants. The receipt
reads:
ACKNOWLEDGMENT RECEIPT
P100,000.00 October 11, 1991
RECEIVED FROM: ROMEO PAGUIO, the amount of ONE HUNDRED THOUSAND
(P100,000.00) PESOS, Philippine Currency, representing the payment (of) plane ticket,
visa and other travel documents.
CONFORME:
By:
(Sgd.) ROMEO PAGUIO (Sgd.) MRS. ANNIE BAUTISTA
c/o Rosa Abrero
SIGNED IN THE PRESENCE OF:
(Sgd.) Anastacio Amor Remigio Fortes
Dominador Costales
Said receipt shows that appellant collected the P100,000.00 for and in behalf of Rosa Abrero, and
bolsters Romeo Paguio's allegation that he gave P20,000.00 to Rosa Abrero, while the rest was received
by appellant. Notably, in its Decision, dated February 14, 1992, the trial court observed:
The denial(s) made by the accused of any participation in the recruitment of the
complainants do not persuade. The evidence at hand shows that she acknowledged in
writing the receipt of P100,000.00 from witness Romeo Paguio who was all along
representing the complainants in securing employment for them in Taiwan. Her denial
of having actually received the money in the sum of P100,000.00, the receipt of which
she voluntarily signed is not convincing. By her own admission, she is a restaurant
operator. In other words, she is a business woman. As such, she ought to know the
consequences in signing any receipt. That she signed Exh. "A" only goes to show that
fact, as claimed by Romeo Paguio, that she actually received the same.
It is uncontroverted that appellant and Rosa Abrero are not authorized or licensed to engage in
recruitment activities.
10
Despite the absence of such license or authority, appellant participated in the
recruitment of complainants. Since there are at least three (3) victims in this case, appellant is correctly
held criminally liable for illegal recruitment in large scale.
11

We shall now discuss appellant's culpability under the Revised Penal Code, specifically Article 315
thereof, inasmuch as her conviction for offenses under the Labor Code does not avert punishment for
offenses punishable by other laws.
12

The elements of estafa are as follows: (1) that the accused defrauded another (a) by abuse of
confidence, or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary estimation
is caused by the offended party or third party.
In the case at bench, it is crystal clear that complainants were deceived by appellant and Rosa Abrero
into believing that there were, indeed, jobs waiting for them in Taiwan. The assurances given by these
two (2) women made complainants part with whatever resources they have, in exchange for what they
thought was a promising job abroad. Thus, they sold their carabaos, mortgaged or sold their parcels of
land and even contracted loans to raise the much needed money, the P40,000.00 placement fee,
required of them by accused and Rosa Abrero.
The penalty for estafa depends on the amount defrauded. Article 315 of the Revised Penal Code
provides: "the penalty of prision correccional in its maximum period to prision mayor in its minimum
period (or imprisonment ranging from 4 years, 2 months and 1 day to 8 years), if the amount of the
fraud is over P12,000.00 but does notexceed P22,000.00 pesos, and if such amount exceeds the latter
sum, the penalty provided in this paragraph shall be imposed in its maximum period (6 years, 8 months
and 21 days to 8 years), adding one year for each additional P10,000.00 pesos; but the total penalty
which may be imposed shall not exceed twenty years. In such case, and in connection with the accessory
penalties which may be imposed and for the purpose of other provisions of this Code, the penalty shall
be termed prision mayor or reclusion temporal, as the case may be.
The amount defrauded in such estafa case (Criminal Case Nos. 92-102378, 92-102379, 92-102380) is P
40,000.00. As prescribed in Article 315, supra, the penalty should be imposed in the maximum period (6
years, 8 months and 21 days to 8 years) plus one (1) year, there being only one (1) P10,000.00 in excess
of P22,000.00. Applying the Indeterminate Sentence Law, the maximum penalty should be taken from
the aforesaid period, while the minimum term of the indeterminate penalty shall be within the range of
the penalty next lower in degree, that is — prision correccional in its minimum and medium periods
which has a duration of 6 months, 1 day to 4 year and 2 months.
Considering the foregoing, the appellant court correctly imposed the indeterminate penalty of four (4)
years and two (2) months of prision correccional, as minimum, to nine (9) years of prision mayor, as
maximum.
WHEREFORE, premises considered, the decision of the Court of Appeals, finding appellant ANITA
BAUTISTA guilty beyond reasonable doubt of the crimes of Illegal Recruitment in Large Scale (Criminal
Case Nos. 92-102377) and Estafa (Criminal Case Nos. 92-102378, 92-102379, 92-102380) is AFFIRMED.
No Costs.
SO ORDERED.
[G.R. No. 111656. March 20, 1996]
MANUEL MANAHAN, JR., petitioner, vs. HON. COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES, respondents.
D E C I S I O N
VITUG, J.:
Petitioner Manuel L. Manahan, Jr., seeks, in a petition for review on certiorari, the reversal of the
decision
[1]
of the Court of Appeals affirming with modification the judgment of the Regional Trial Court
of Makati, Branch 58,
[2]
which has found him guilty beyond reasonable doubt of the crime of estafa.
On 10 May 1976, petitioner, as lessee, and IFC Leasing and Acceptance Corporation (“IFC”), as
lessor, entered into an Equipment Lease Agreement (Contract No. LC - 2644) o
[3]
ver an Isuzu dump truck
(Motor No. E120-206525 and Serial No. TMK47E-1732972). The lease was for a period of thirty-six (36)
months from May, 1976, at a monthly rental of P3,541.20 with an initial “deposit” of P24,000.00. The
dump truck was delivered to petitioner on 30 April 1976.
[4]
The parties, on 16 September 1976, entered
into another Equipment Lease Agreement (Contract No. LC - 2729) over one unit of Kimco Hough
JH65CN Payloader (Motor No. 10282261 and Serial No. JH65CN8484)
[5]
to last for forty-eight (48)
months beginning September of 1976 at a monthly rental of P5,311.80.
[6]

On 15 March 1977, IFC filed a complaint for a sum of money, with replevin and damages, against
petitioner before the then Court of First Instance of Rizal (Civil Case No. 26078).
[7]
IFC averred that
petitioner had incurred “several defaults” and owed, in rentals and expenses, the sum of P160,110.18 as
of 20 February 1977 on the lease of the dump truck and another P249,975.44 as of 05 March 1977 on
the lease of the payloader. Aside from said amounts, IFC also prayed for 12% interest thereon, plus an
equivalent of 20% of the sum, conformably with the terms of the two lease agreements.
On 03 April 1978, the court
[8]
rendered a decision, the decretal portion of which stated:
“WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant (a)
confirming the right of the plaintiff to the ownership and possession of the personal properties
heretofore described; (b) ordering the defendant to pay the plaintiff:
“(1) On the first cause of action: The sum of P160,110.18, plus interest at 12% from February 20, 1977
until fully paid, and a further amount equivalent to 20% of the amounts due, as attorney’s fees;
“(2) On the second cause of action: The sum of P249,975.44, plus interest thereon at 12% from
March 5, 1977 until fully paid, and the further sum equivalent to 20% of the amount due as attorney’s
fees; and
“(c) To pay the costs.
“SO ORDERED.”
[9]

It would appear that an execution of the decision was not pursued. Instead, on 23 June 1981, IFC’s
counsel, Attorney Jose Redoblado, sent a letter to petitioner about his still unsettled accounts under the
two contracts. Since the demand had not been heeded, IFC, this time, charged petitioner
with estafa. The information was filed on 15 March 1983 and raffled to Branch 58 of the Regional Trial
Court of Makati, it read:
“That in or about and during the period from April 30, 1976 and September 7, 1976, in the Municipality
of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-
named accused, in accordance to a Lease Agreement received from IFC-LEASING AND ACCEPTANCE
CORPORATION One (1) Unit Isuzu Dump Truck and One (1) Unit Kimco Hough JH65CN Payloader all
valued at P110,000.00, with the obligation to pay rentals as agreed upon and to return the said
equipments upon termination of the lease period, but accused far from complying with his obligation,
with intent of gain, grave abuse of confidence and to defraud the herein complainant, did then and
there willfully, unlawfully and feloniously misappropriate, misapply and convert to his own personal use
and benefit the said equipments, and despite demands failed and refused and still fails and refuses to
return the said equipments, to the damage and prejudice of said IFC-LEASING AND ACCEPTANCE
CORPORATION, represented by one ARMANDO M. MARCELO, in the aforementioned amount of
P110,000.00.
“Contrary to law.”
[10]

When arraigned on 25 July 1983, petitioner pleaded “not guilty” to the charge.
At the trial, Melecio Rayosa, records custodian of the IFC, and Leonardo Gado, a security guard and
liaison officer of the Bureau of Land Transportation (“BLT”), were presented by the prosecution at the
witness stand. Rayosa identified the lease agreement covering the Isuzu dump truck
[11]
and the delivery
receipt showing that petitioner received the equipment on 30 April 1976.
[12]
Rayosa said that the
collection department of IFC demanded from petitioner the payment of unpaid monthly rentals, and
that the demand was followed by a letter, dated 23 June 1981, of Atty. Redoblado to petitioner asking
that the letter’s separate accounts under the lease contracts be settled.
[13]
Rayosa confirmed the civil
case previously filed by IFC against petitioner.
[14]
Gado testified, mainly, that the original registration
certificate
[15]
of the Isuzu dump truck was surrendered to the BLT.
[16]

Parenthetically, the payloader, the leased equipment under Contract No. LC-2729, would appear to
have, in fact, been recovered by IFC and later disposed of by it.
Petitioner admitted having entered into the lease contracts with IFC, receiving the subject units and
failing to return the dump truck.
[17]
Apparently, the truck was subleased to one Mr. Gorospe for the
hauling of aggregate materials. After the sublease was terminated, petitioner tried to retake possession
of the unit but he was unsuccessful. Testimony was adduced that in June 1983, malefactors, numbering
about ten persons, allegedly “men of Gorospe and Espino,” dismantled the truck, loaded the parts into
another truck, and left only its chassis. The matter was reported to the barangay captain but “nothing
happened.” Petitioner was furious when informed of the incident but there was not much, he said, that
he could do.
[18]

On 27 July 1989, the trial court rendered its decision convicting petitioner of estafa; hence –
”WHEREFORE, premises considered, the court finds the accused guilty beyond reasonable doubt and
hereby sentences him to an indeterminate penalty of 8 years and 1 day of prison mayor as minimum to
10 years and 1 day of prison mayor as maximum and to indemnify the offended party the amount of
P55,000.00 without subsidiary imprisonment in case of insolvency.
“SO ORDERED.”
[19]

Petitioner appealed to the Court of Appeals contending, among other things, that the fourth
element of the crime of estafa, namely, the misappropriation or conversion by the accused of the thing
received to the prejudice of another, was not present in this case. He averred that his failure to return
the dump truck was due to circumstances beyond his control, and that it was not he but other persons,
particularly Gorospe and Espino and their men, who unlawfully detained the vehicle.
[20]

On 21 May 1993, the Court of Appeals
[21]
promulgated its decision which affirmed, except for the
penalty which was modified, the trial court’s judgment; thus:
“WHEREFORE, judgment is hereby rendered affirming the appealed decision, with the modification that
the proper penalty which the appellant should suffer is the indeterminate penalty of four (4) years and
two (2) months ofprision correccional as minimum, to ten (10) years of prision mayor as
maximum. Costs against appellant.
“SO ORDERED.”
[22]

The appellate court ratiocinated that –
“Under Article 315, subdivision 4, paragraph 1(b) of the Revised Penal Code, the elements of estafa with
abuse of confidence are:
“1) that money, goods, or other personal property be received by the offender in trust, or on
commission, or for administration, or under any obligation involving the duty to make delivery of, or to
return, the same;
“2) that there be misappropriation or conversion of such money or property by the offender, or denial
on his part of such receipt;
“3) that such misappropriation or conversion or denial is to the prejudice of another;
“4) that there is a demand made by the offended party on the offender.
“xxx xxx xxx.
“All the foregoing elements are present in this case. The dump truck, a personal property was received
by the accused who was under obligation to pay rentals as agreed upon and to return the said
equipment upon the termination of the lease period. Accused did not return the equipment to the
offended party as accused subleased it to a certain Mr. Gorospe, although accused has no authority to
sub-lease the equipment to a third person. Granting therefore that Manuel Manahan, Jr. has no
intention of defrauding the owner of the truck, accused certainly committed abuse of confidence when
he sub-leased the equipment without the knowledge and consent of the owner. In sub-leasing the truck
to Mr. Gorospe, accused assumed the right to dispose of it as if it is his (Viada, 446) thereby committing
conversion.’ (p. 3, Appealed Decision)
“The appropriation or conversion of money or property received, to the prejudice of the owner thereof,
is the essence of estafa through misappropriation. The words ‘convert’ and ‘misappropriate’ connote an
act of using or disposing of another’s property as if it were one’s own, or of devoting it to a purpose or
use different from that agreed upon. (Saddul, Jr. vs. Court of Appeals, 192 SCRA 277).
“Appellant’s contention that one element of estafa, that is, misappropriation or conversion, is not
present in the case at bar, is untenable. It must be recalled that under the lease agreement entered into
by and between complainant and appellant, any breach of the lease by the latter as lessee would entitle
the lessor, upon demand, to the return and possession of the vehicle in question (Exh. ‘A’, p. 175,
Records). Admittedly, appellant failed to pay the stipulated monthly rentals. Despite IFC’s demand for
the return of the vehicle and the decision rendered in its (IFC’s)favor in Civil Case No. 26078, appellant,
had failed to give the equipment back its rightful owner. From that time on, appellant Manahan could
already be considered to have committed the crime of estafa. His allegation that he could not return
the chattel because it had been taken by certain persons, namely, Mr. Gorospe and Capt. Espino, fails to
persuade. He received IFC’s demand letter on July 6, 1981 (p. 157, Records). The judgment in Civil Case
No. 26078 confirming said corporation’s right to ownership and possession of the subject leased
equipment was rendered on April 3, 1978 (p. 191, ibid.). The alleged taking of the vehicle was in June,
1983 (TSN, p. 5, March 16, 1988). Had appellant returned the truck to IFC upon the latter’s demand,
such taking of the dump truck by Gorospe, if it were true, would not have occurred. Clearly, accused’s
unexplained failure to return the truck to IFC during all the long time that he undisputably could have
done so constituted abuse of confidence and virtual conversion.
“Appellant’s contention that he did not sublease the truck to another cannot relieve him of any liability
in the present case either. For, during the time that said vehicle remained in the possession of the
appellant, the complainant had been deprived of its right to use the same. In other words, there had
been a disturbance of the property rights of the offended party. To repeat, the words ‘convert’ and
‘misappropriate’ connote an act of using or disposing of another’s property as if it were one’s own.”
[23]

On a motion for reconsideration, the Court of Appeals,
[24]
finding no sufficient reason to modify its
decision, refused to reconsider.
[25]

The petition before us would fault the appellate court in concluding that petitioner is guilty of
estafa given the circumstances heretofore narrated. Petitioner argues that the mere act of subletting
the dump truck to another person without the knowledge and consent of the lessor does not necessarily
constitute estafa.
There is merit in the petition.
There could be no question about the fact that petitioner, in subletting the dump truck, violated
the lease contract with IFC. The pertinent paragraph of the contract, Exhibit A, provided:
“2. UTILITY: The Lessee agrees that the equipment under lease shall be installed and/or utilized at its
premises in Manila or such other places as may be designated in the Schedule, and shall not, under any
circumstances be removed therefrom without the consent of the Lessor first obtained in writing. The
Lessee further agrees not to part with the possession of, sub-lease, pledge, or otherwise encumber or
dispose of the leased equipment; x x x. If Lessee uses or allows the leased property to be used for illegal
purposes or for purpose not permitted under this lease, Lessee agrees to reimburse Lessor for all
damages sustained by Lessor as a result of such misuse including, without limitations, payment of any
fine or fines which may be imposed on Lessor. In addition to, and notwithstanding its right to such
reimbursement, Lessor may in such event at its option cancel this lease by notifying Lessee to (sic) such
cancellation in writing.”
[26]
(Italics supplied.)
Thus, when IFC filed Civil Case No. 26078, it correctly pursued its remedy, and the court, after upholding
IFC, aptly awarded damages to the latter. IFC, however, neither opted to cancel its lease contract with
petitioner nor to see to the execution of the decision in Civil Case No. 26078, the net effect of which
failure was to permit the contract to remain in force in accordance with Article 1659 of the Civil
Code.
[27]
The decision, it should be noted, was promulgated on 03 April 1978 within the period of the
lease contract, i.e., for thirty-six months from May 1976 or until April 1979. IFC’s acquiescence
thereafter to petitioner’s continued possession was, in effect, a continuation of the contract under the
concept of an implied new lease on a month to month basis under Article 1670, of the Civil Code.
[28]
The
contract subsisted until IFC demanded the return of the equipment on 23 June 1981. From that
moment, petitioner could well be made to answer for the corresponding civil liabilities of a possessor in
bad faith,
[29]
such as for the loss or deterioration of the thing leased regardless of the cause of such loss
or deterioration, i.e., whether on account of his fault or not.
But did petitioner likewise incur criminal liability, specifically under Article 315(b) of the Revised
Penal Code, for estafa? Respondents reply in the affirmative, allegedly in petitioner’s –
“x x x misappropriating or converting, to the prejudice of another, money, goods, or any other personal
property received by the offender in trust or on commission, or for administration, or under any other
obligation involving the duty to make delivery of or to return the same, even though such obligation be
totally or partially guaranteed by a bond; or by denying having received such money, goods, or other
property.”
[30]

The elements of this crime are: (a) that personal property is received in trust, on commission, for
administration or under any other circumstance involving the duty to make delivery of or to return the
same, even though the obligation is guaranteed by a bond; (b) that there is conversion or diversion of
such property by the person who has so received it or a denial on his part that he received it; (c) that
such conversion, diversion or denial is to the injury of another; and (d) that there be demand for the
return of the property.
[31]

Petitioner did receive the dump truck from IFC under a lease contract with the specific provision
under paragraph 10 thereof requiring petitioner to return the equipment to IFC “at the expiration of the
period or extended period hereof or earlier termination of (the) agreement.”
[32]
Although a contract of
lease is not fiduciary in nature, still the clause “any other obligation involving the duty to make delivery
of or to return” personal property is broad enough to include a “civil obligation.”
[33]
Equally essential,
however, before the offense can be considered committed, is that the refusal or failure to deliver or
return is, in turn, predicated on misappropriation or conversion by the accused of the subject of the
obligation.
The appellate court has ruled that petitioner’s “unexplained failure to return the truck to IFC during
all the long time that he indisputably could have done so constituted abuse of confidence and virtual
conversion.”
[34]
This conclusion looks to be too sweeping. Although, clearly, petitioner has incurred
default in his obligation to return the leased unit, it is, nonetheless, unrebutted that he did exert all
efforts to recover and retrieve, albeit belatedly and to no avail, the dump truck from Gorospe. The facts
on record contrast, in our view, to the idea of a refusal to comply with an undertaking to return the
property on account of misappropriation or conversion.
Not to be overlooked is that this felony falls under the category of mala in se offenses that require
the attendance of criminal intent. Evil intent must unite with an unlawful act for it to be a felony. Actus
non facit reum, nisi mens sit rea.
[35]
Petitioner might have been an inept businessman in failing to
promptly obtain possession of the dump truck in Tarlac following the expiration of the sublease in favor
of Gorospe; such ineptitude, nevertheless, should not be confused with criminal intent.
[36]

At any rate, any reasonable doubt must be resolved in favor of the accused. Indispensable for
conviction is –
“x x x such proof ‘to the satisfaction of the court, keeping in mind the presumption of innocence, as
precludes every reasonable hypothesis except that which it is given to support. It is not sufficient for the
proof to establish a probability, even though strong, that the fact charged is more likely to be true than
the contrary. It must establish the truth of the fact to a reasonable and moral certainty - a certainty that
convinces and satisfies the reason and the conscience of those who are to act upon it.’”
[37]

An acquitted person, nevertheless, cannot always escape from civil liability in the attendance of
facts from which such liability might arise.
[38]
Corollarily, an acquittal based on reasonable doubt that the
accused committed the crime charged does not necessarily exempt him from civil liability where a mere
preponderance of evidence is required.
[39]

Petitioner must, therefore, be held responsible for the value (P55,000.00) of the lost dump truck.
WHEREFORE, petitioner is hereby ACQUITTED of the crime of estafa under Article 315 (1) (b) of the
Revised Penal Code but he shall pay the IFC Leasing and Acceptance Corporation the amount of
P55,000.00 representing the value of the lost dump truck with 12% interest per annum from July 1981
(the month following the demand of 23 June 1981) until full payment of said amount. Costs against
petitioner.
SO ORDERED.
[G.R. No. 120949. July 5, 1996]
ARACELI RAMOS FONTANILLA, petitioner, vs. PEOPLE OF THE PHILIPPINES, COURT OF APPEALS, OSCAR
V. SALUD and THELMA C. MERCADO, respondents.
D E C I S I O N
HERMOSISIMA, JR., J.:
This is a petition which seeks the review on certiorari of the decision
[1]
rendered by the Court of
Appeals (Special Fifteenth Division) on March 3, 1995, in CA-G.R. CR No. 14567, which affirmed the
decision
[2]
of the Regional Trial Court, Branch 17, of Cavite City, in Criminal Cases Nos. 298-91 and 299-
91.
Petitioner Araceli Ramos Fontanilla was charged with two (2) crimes of Estafa defined and
penalized under Article 315, paragraph 1(b), of the Revised Penal Code, under the following
Informations:
Criminal Case No. 298-91
"That on or about and during the period from August 30, 1990 until October 25, 1990, in the City of
Cavite, Republic of the Philippines and within the jurisdiction of this Honorable Court, the above-named
accused received in trust from complainant THELMA C. MERCADO the total amount of P70,000.00 with
the understanding that the money will be invested by the accused with the Philtrust Investment
Corporation at a guaranteed interest of .8 percent per working day and with the further understanding
that the amount can be withdrawn anytime through the accused, but the herein accused, once in
possession of the amount, with intent to defraud and with grave abuse of confidence, did, then and
there, wilfully, unlawfully and feloniously misapply, misappropriate and convert the same to her own
personal use and benefit and notwithstanding repeated demands made upon her for the return of the
amount, accused herein failed and refused to do so, to the damage and prejudice of Thelma C. Mercado
in the aforestated amount of P70,000.00.
Contrary to law."
[3]

Criminal Case No. 299-91
"That on or about and during the period from August 3, 1990 until September 4, 1990, in the City of
Cavite, Republic of the Philippines and within the jurisdiction of this Honorable Court, the above-named
accused received in trust from complainant OSCAR V. SALUD the total amount of P50,000.00 with the
understanding that the money will be invested by the accused with the Philtrust Investment Corporation
at a guaranteed interest of .8 percent per working day and with the further understanding that the
amount can be withdrawn anytime through the accused, but the accused herein, once in possession of
the amount, with intent to defraud and with grave abuse of confidence, did, then and there, wilfully,
unlawfully and feloniously misapply, misappropriate and convert the same to her own personal use and
benefit and notwithstanding repeated demands made upon her for the return of the amount, accused
herein failed and refused to do so, to the damage and prejudice of Oscar V. Salud in the aforestated
amount of P50,000.00.
Contrary to law."
[4]

Upon arraignment, the petitioner pleaded "Not Guilty" to both indictments. Joint trial of these
cases, thereafter, ensued.
The evidence disclosed the following facts:
Petitioner Araceli Ramos Fontanilla, then 74 years old, (now 77),
[5]
used to own and manage a
canteen in the Philippine Naval Base in Fort San Felipe, Cavite City. Sometime in the early part of
August, 1990, she enticed and convinced M/Sgt. Oscar V. Salud
[6]
and Thelma C. Mercado
[7]
to invest
money with the Philtrust Investment Corporation, alleging that the investment would yield an interest of
.8 percent per working day, withdrawable anytime. Consequently, on August 3, 1990, Sgt. Salud and
Mercado gave the petitioner, the amounts of P10,000.00 and P5,000.00, respectively, as their initial
investment. Petitioner, accordingly, issued to Sgt. Salud and Mercado certifications,
[8]
acknowledging
receipt of the amounts and stating as well that the money could be withdrawn anytime. As interest
thereon was at the beginning promptly paid by the petitioner, Sgt. Salud added the amount of
P40,000.00
[9]
on September 4, 1990, his total investment, then amounting to P50,000.00. Mercado put
in P30,000.00
[10]
on August 21, 1990 and another P35,000.00
[11]
on October 25, 1990, her investment
then amounting to P70,000.00. All these additional investments of money given to the petitioner were
made under the same terms and conditions, except that the amount of P35,000.00 invested on October
25, 1990 by Mercado was agreed to be withdrawn on December 27, 1990.
[12]

The petitioner religiously paid interest to Sgt. Salud on a weekly basis at first, but she failed to do so
starting on November 19, 1990 until December 27, 1990. Sgt. Salud went to the petitioner's house in
Cavite City to demand payment of the interest due him. On petitioner's bidding, the petitioner's
grandson Ferdinand Fontanilla explained to Sgt. Salud that the unpaid interest on his investment would
be added to his working capital in the amount of P50,000.00. Apparently satisfied with the explanation,
Sgt. acceded and did not persist on his demand.
In January 1991, the petitioner paid Sgt. Salud partial interest but defaulted in the months of
February and March 1991 despite several demands. Exasperated, Sgt. Salud again went to the
petitioner's house and demanded not only the payment of the interest due but also the return of the
principal, and when he was given the runaround, he decided to file, as he did, a complaint with the
police on March 17, 1991 charging the petitioner with Estafa.
[13]

Thelma Mercado's investment appeared also to have gone on smoothly at first as the petitioner
religiously paid Mercado the corresponding interest. However, when Mercado sought to withdraw
P35,000.00 on December 27, 1990 pursuant to their agreement, the petitioner could not pay her the
said amount and, instead, gave her a check in the account of the petitioner's grandson payable on
January 10, 1991. This check was dishonored because its corresponding account had been
closed. When this fact was brought to light, the petitioner promised to pay, and, by way of assurance
showed a letter from Phoenix Investment Corporation addressed to her which indicated that said
corporation would be releasing the money from February 11, 1991 to February 28, 1991.
[14]
Ms.
Mercado clarified in this connection that the petitioner withdrew the amount originally invested with
Philtrust Investment Corporation and deposited the same with the Phoenix Investment
Corporation. The transfer was done without the complainant's knowledge and consent.
[15]
As it turned
out, nothing came out of the petitioner's promises. Hence, she was constrained to file this complaint.
[16]

Cmdr. Nolato, Cmdr. Gandoza, Lt. Sarmiento, Cpo. Godilano and some others were said to have
entrusted their money with the petitioner for investment with Philtrust Investment Corporation. Their
investment suffered the same fate as those of the herein complainants.
[17]

In her defense, the petitioner testified to the effect that complainants had instead made the offer
to lend her money and, when she agreed, complainants gave her the money as evidenced by the
certifications.
[18]
She identified her signatures therein. The said certifications, allegedly prepared by Sgt.
Salud and Mercado, were already signed by them when presented to her for her
signature. Acknowledging receipt of the money, she paid weekly interest thereon in the total amount of
P40,000.00, more or less, or P20,000.00 each Sgt. Salud and Mercado. However, when her business
floundered about the middle part of November, 1990, she could no longer make any payment of
interest. She promised to pay her creditors once she could recover financially. Complainants could not
wait indefinitely and so, they caused to be instituted the present charges.
After trial, the trial court rendered judgment on December 15, 1992 convicting the petitioner in
both cases, the dispositive portion of which reads:
"WHEREFORE, in view of the foregoing, the Court finds the accused Araceli Fontanilla guilty beyond
reasonable doubt of ESTAFA as defined and penalized under Art. 315, par. 1-B in both Criminal Cases
Nos. 298-91 and 299-91 and she is hereby sentenced to an indeterminate term of imprisonment of six
(6) months aresto (sic) mayor as maximum to ten (10) years of prision mayor as maximum to indemnify
the offended party Thelma C. Mercado in the amount of P70,000.00 without subsidiary imprisonment in
case of insolvency in Criminal Case No. 298-91; to undergo an indeterminate term of imprisonment of
six (6) months of aresto (sic) mayor as minimum to eight (8) years ofprision mayor as maximum to
indemnify the offended party Oscar V. Salud the amount of P50,000.00 without subsidiary
imprisonment in case of insolvency in Criminal Case No. 299-91 and to pay the costs in both
instances."
[19]

On appeal, the Court of Appeals affirmed in toto the foregoing judgment of conviction in a decision
dated March 3, 1995.
The petitioner filed a Motion for Reconsideration before the appellate court but the same was
denied in a Resolution,
[20]
dated July 17, 1995.
Hence, this petition for review, anchored on the following grounds.
I
THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING AND HOLDING THAT THE AGREEMENT BETWEEN
THE ACCUSED-APPELLANT AND THE PRIVATE COMPLAINANTS IS NOT A CONTRACT OF LOAN WHICH IS
PATENTLY CONTRARY AND CONFLICTING WITH THE EVIDENCE ON RECORD AND LAW.
II
THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT TOTALLY IGNORED THE UNCONTROVERTED
EVIDENCE ON RECORD WHICH SHOWS THAT ACCUSED-APPELLANT IS THE ONE PAYING THE "INTERESTS"
TO THE PRIVATE COMPLAINANTS AND NOT THE PHILTRUST INVESTMENT CORPORATION WHICH
PROVES THAT THE AGREEMENT BETWEEN THEM IS A CONTRACT OF LOAN.
III
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT ALL THE ELEMENTS OF ESTAFA
AS DEFINED AND PENALIZED UNDER ARTICLE 315 (1) (B) OF THE REVISED PENAL CODE HAVE BEEN
ESTABLISHED BEYOND REASONABLE DOUBT BY THE PROSECUTION IS CONTRARY TO LAW,
JURISPRUDENCE AND EVIDENCE.
IV
THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN FAILING TO CONSIDER THE MITIGATING
CIRCUMSTANCE OF OVER SEVENTY YEARS IN FAVOR OF THE ACCUSED-APPELLANT.
The petitioner maintains that the various sums of money admittedly received by her from private
respondents Mercado and Salud constituted a mere forbearance of money, or a simple loan, the
certifications,
[21]
not having made any reference to any agreement to invest the said sums of money with
Philtrust Investment Corporation, or any understanding to that effect. Additionally, she points out that
it was the petitioner herself and not Philtrust Investment Corporation who agreed to pay interest. Thus,
petitioner claims that, pursuant to Article 1933 and 1953 of the New Civil Code, ownership of the money
delivered passed on to the petitioner and so, it cannot be said that the petitioner received the money in
trust or in fiduciary capacity. So, petitioner argues that no fiduciary relationship has been shown to exist
between the petitioner and the private respondents, and, absent this relationship, the petitioner could
not have committed the crime of estafa through misappropriation or conversion as herein charged.
Evidently, the question posed herein relates to the nature of the transaction and/or agreement
between the petitioner and the private respondents. Both the trial court and the Court of Appeals have
made a determination thereof, and in so doing, gave weight and credence to the testimonies of the
private respondents to the effect that their money was given to the petitioner as investments and also
to the certifications embodying the terms and conditions relative to the said investments. The
respondent court thus ruled that:
"The prosecution established that appellant received in trust the amounts of P70,000.00 and P50,000.00
from complainants Thelma C. Mercado and Sgt. Oscar V. Salud, respectively. According to appellant, the
said amounts should be invested with Philtrust Investment Corporation in her (appellant's) name; that
the said investment would earn an '.8 percent interest per working day' and the '(T)he said amount(s)
can be withdrawn from her (Mrs. Araceli R. Fontanilla) by the investor at anytime.' Such is the tenor of
the 'Certification' issued by the petitioner. x x x"
[22]

and, in rejecting the petitioner's contention that her agreement with the private respondents is a
forbearance of money or a simple loan agreement, stated that:
"Firstly, the agreement between appellant and private complainants is not a contract of loan for
appellant did not acquire ownership of the money which she received from private complainants nor
was she bound to pay to the latter an equal amount of money (Art. 1953, New Civil Code). The money
was entrusted by the private complainants to appellant for the purpose of investing the same in her
own (appellant's) name with the Philtrust Investment Corporation that would yield an .8 percent
interest per working day, with the obligation to return it upon demand by the complainants. x x x
Secondly, since the appellant received the money in trust, as it was entrusted to her for investment with
the obligation to return it upon demand, complainants entrusted to appellant not only the physical
possession but also the juridical possession of the subject money. As such, a fiduciary relationship
existed between complainants and appellant. x x x "
[23]

Well-entrenched is the rule that the findings of fact of the trial court, as well as those of the Court
of Appeals, are accorded great weight and respect and are even binding on this court
[24]
which may only
review and correct errors of law.
[25]
The rule is subject only to a few established or well-defined
exceptions as where the findings of the Court of Appeals and the trial court are contrary to each
other
[26]
or when the inference made by the Court of Appeals on its factual findings is manifestly
mistaken.
[27]
As we perceive nothing in the findings of the Court of Appeals as would make the same an
exception, we shall not therefore disturb the said findings.
Indeed, the aforementioned certifications do not contain any express or written provision regarding
investing private respondents' money with the Philtrust Investment Corporation, but they do show that
the money entrusted by the private respondents to the petitioner was an investment to be managed by
the latter for their account and benefit. Significantly, said certifications are not inconsistent with and
are, in fact, supportive of our conclusion that the petitioner's transaction with the private respondents
was not a simple loan agreement. Furthermore, assuming arguendo that said certifications do not
directly or clearly prove such conclusion, the testimonies of the prosecution witnesses are categorical in
this respect and such testimonies had been found to be credible by the trial court. On the matter of
credibility of witnesses, the court has consistently ruled that evaluation or judgment of the trial court
appertaining thereto is accorded great weight and respect
[28]
and will not generally be interfered with in
the absence of a showing of some fact or circumstance of weight and influence which has been
overlooked or the significance of which has been misinterpreted.
[29]

The fact that the petitioner paid the stipulated interest allegedly from her own pocket is no
argument against our conclusion as above-stated and that the interest paid by the petitioner
represented earnings on private respondents' investment. In fine, we cannot see how such fact could
operate to alter the import of the certifications and the testimonies of the prosecution witnesses which
established that the transaction between the petitioner and the private respondents was not one of
loan or forbearance of money.
The elements of estafa through misappropriation as defined in and penalized under paragraph 1 (b)
of the Revised Penal Code are: (1) that money, goods or other personal property is received by the
offender in trust, or in commission or for administration, or under any other obligation involving the
duty to make delivery of, or to return, the same; (2) that there be misappropriation or conversion of
such money or property by the offender or denial on his part of such receipt; (3) that such
misappropriation or conversion or denial is to the prejudice of another; and (4) that there is a demand
made by offended party on the offender.
[30]

These elements were amply and clearly established in these cases. First, the petitioner received in
trust the money from the private respondents for the particular purpose of investing the same with the
Philtrust Investment Corporation, with the obligation to make delivery thereof upon demand, thereby
creating a fiduciary relationship between them. Second, the petitioner misappropriated private
respondents' money as shown by the fact that she failed to return the same despite demands, and more
importantly, by her own admission that she used the money for her business;
[31]
and, third, the
misappropriation prejudiced the private respondents.
The Court notes, however, that the penalty imposed by the trial court, as affirmed by the Court of
Appeals, is utterly erroneous.
Article 315 of the Revised Penal Code provides:
"Any person who shall defraud another by any of the means mentioned herein below shall be punished
by:
'The penalty of prision correcional in its maximum period to prision mayor in its minimum period, if the
amount of the fraud is over 12,000 but does not exceed 22,000 pesos, and if such amount exceeds the
latter sum, the penalty provided in this paragraph shall be imposed in its maximum period adding one
year for each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed
twenty years. x x x.'"
Under the Indeterminate Sentence Law,
[32]
if the offense is punished by the Revised Penal Code,
such as estafa, the court shall sentence the accused to an indeterminate penalty, the maximum term of
which shall be that which, in view of the attending circumstances, could be properly imposed under the
rules of the Revised Penal Code, and the minimum term of which shall be within the range of the penalty
next lower to that prescribed by the Code for the offense.
[33]

Applying the foregoing rules, the indeterminate penalty that We impose upon petitioner in Criminal
Case No. 298-91 involving the amount of P70,000 shall be four(4) years and two (2) months of prision
correctional as the minimum to twelve (12) years, as the maximum.
In Criminal Case No. 299-91, with P50,000 as the total amount defrauded, the penalty that We
impose is four (4) years and two (2) months of prision correccional as the minimum to ten (10) years, as
the maximum.
The mitigating circumstances of being over seventy years old at the time of the commission of the
crime is merely a generic mitigating circumstance, which is considered only in determining the proper
term (i.e. minimum, medium, maximum) that should be imposed within the range of the prescribed
penalty (i.e., prision correccional, prision mayor, et al.). Sadly for the petitioner, it is not a privileged
mitigating circumstances, which has the clement effect of lowering the imposable penalty by one
degree, thus resulting in a much shorter prison sentence for the petitioner.
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals is hereby AFFIRMED
with the modification that the petitioner is hereby sentenced to an indeterminate penalty of four (4)
years and two (2) months as minimum, to twelve (12) years as maximum in Criminal Case No. 298-91. In
Criminal Case No. 299-92, the petitioner is hereby sentenced to undergo an indeterminate prison term
of four (4) years and two (2) months as minimum, to ten (10) years as maximum.
Costs against the petitioner.
SO ORDERED.

G.R. No. 89252 May 24, 1993
RAUL SESBREÑO, petitioner,
vs.
HON. COURT OF APPEALS, DELTA MOTORS CORPORATION AND PILIPINAS BANK, respondents.
Salva, Villanueva & Associates for Delta Motors Corporation.
Reyes, Salazar & Associates for Pilipinas Bank.

FELICIANO, J.:
On 9 February 1981, petitioner Raul Sesbreño made a money market placement in the amount of
P300,000.00 with the Philippine Underwriters Finance Corporation ("Philfinance"), Cebu Branch; the
placement, with a term of thirty-two (32) days, would mature on 13 March 1981, Philfinance, also on 9
February 1981, issued the following documents to petitioner:
(a) the Certificate of Confirmation of Sale, "without recourse," No. 20496 of one (1)
Delta Motors Corporation Promissory Note ("DMC PN") No. 2731 for a term of 32 days
at 17.0% per annum;
(b) the Certificate of securities Delivery Receipt No. 16587 indicating the sale of DMC PN
No. 2731 to petitioner, with the notation that the said security was in custodianship of
Pilipinas Bank, as per Denominated Custodian Receipt ("DCR") No. 10805 dated 9
February 1981; and
(c) post-dated checks payable on 13 March 1981 (i.e., the maturity date of petitioner's
investment), with petitioner as payee, Philfinance as drawer, and Insular Bank of Asia
and America as drawee, in the total amount of P304,533.33.
On 13 March 1981, petitioner sought to encash the postdated checks issued by Philfinance. However,
the checks were dishonored for having been drawn against insufficient funds.
On 26 March 1981, Philfinance delivered to petitioner the DCR No. 10805 issued by private respondent
Pilipinas Bank ("Pilipinas"). It reads as follows:
PILIPINAS BANK
Makati Stock Exchange Bldg.,
Ayala Avenue, Makati,
Metro Manila
F
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9
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1
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V
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TO Raul Sesbreño
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DENOMINATED CUSTODIAN RECEIPT
This confirms that as a duly Custodian Bank, and upon instruction of PHILIPPINE
UNDERWRITES FINANCE CORPORATION, we have in our custody the following securities
to you [sic] the extent herein indicated.
SERIAL MAT. FACE ISSUED REGISTERED AMOUNT
NUMBER DATE VALUE BY HOLDER PAYEE
2731 4-6-81 2,300,833.34 DMC PHIL. 307,933.33
UNDERWRITERS
FINANCE CORP.
We further certify that these securities may be inspected by you or your duly authorized
representative at any time during regular banking hours.
Upon your written instructions we shall undertake physical delivery of the above
securities fully assigned to you should this Denominated Custodianship Receipt remain
outstanding in your favor thirty (30) days after its maturity.
P
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1

On 2 April 1981, petitioner approached Ms. Elizabeth de Villa of private respondent Pilipinas, Makati
Branch, and handed her a demand letter informing the bank that his placement with Philfinance in the
amount reflected in the DCR No. 10805 had remained unpaid and outstanding, and that he in effect was
asking for the physical delivery of the underlying promissory note. Petitioner then examined the original
of the DMC PN No. 2731 and found: that the security had been issued on 10 April 1980; that it would
mature on 6 April 1981; that it had a face value of P2,300,833.33, with the Philfinance as "payee" and
private respondent Delta Motors Corporation ("Delta") as "maker;" and that on face of the promissory
note was stamped "NON NEGOTIABLE." Pilipinas did not deliver the Note, nor any certificate of
participation in respect thereof, to petitioner.
Petitioner later made similar demand letters, dated 3 July 1981 and 3 August 1981,
2
again asking private
respondent Pilipinas for physical delivery of the original of DMC PN No. 2731. Pilipinas allegedly referred
all of petitioner's demand letters to Philfinance for written instructions, as has been supposedly agreed
upon in "Securities Custodianship Agreement" between Pilipinas and Philfinance. Philfinance did not
provide the appropriate instructions; Pilipinas never released DMC PN No. 2731, nor any other
instrument in respect thereof, to petitioner.
Petitioner also made a written demand on 14 July 1981
3
upon private respondent Delta for the partial
satisfaction of DMC PN No. 2731, explaining that Philfinance, as payee thereof, had assigned to him said
Note to the extent of P307,933.33. Delta, however, denied any liability to petitioner on the promissory
note, and explained in turn that it had previously agreed with Philfinance to offset its DMC PN No. 2731
(along with DMC PN No. 2730) against Philfinance PN No. 143-A issued in favor of Delta.
In the meantime, Philfinance, on 18 June 1981, was placed under the joint management of the Securities
and exchange commission ("SEC") and the Central Bank. Pilipinas delivered to the SEC DMC PN No.
2731, which to date apparently remains in the custody of the SEC.
4

As petitioner had failed to collect his investment and interest thereon, he filed on 28 September 1982 an
action for damages with the Regional Trial Court ("RTC") of Cebu City, Branch 21, against private
respondents Delta and Pilipinas.
5
The trial court, in a decision dated 5 August 1987, dismissed the
complaint and counterclaims for lack of merit and for lack of cause of action, with costs against
petitioner.
Petitioner appealed to respondent Court of Appeals in C.A.-G.R. CV No. 15195. In a Decision dated 21
March 1989, the Court of Appeals denied the appeal and held:
6

Be that as it may, from the evidence on record, if there is anyone that appears liable for
the travails of plaintiff-appellant, it is Philfinance. As correctly observed by the trial
court:
This act of Philfinance in accepting the investment of plaintiff and
charging it against DMC PN No. 2731 when its entire face value was
already obligated or earmarked for set-off or compensation is difficult
to comprehend and may have been motivated with bad faith.
Philfinance, therefore, is solely and legally obligated to return the
investment of plaintiff, together with its earnings, and to answer all the
damages plaintiff has suffered incident thereto. Unfortunately for
plaintiff, Philfinance was not impleaded as one of the defendants in this
case at bar; hence, this Court is without jurisdiction to pronounce
judgement against it. (p. 11, Decision)
WHEREFORE, finding no reversible error in the decision appealed from, the same is
hereby affirmed in toto. Cost against plaintiff-appellant.
Petitioner moved for reconsideration of the above Decision, without success.
Hence, this Petition for Review on Certiorari.
After consideration of the allegations contained and issues raised in the pleadings, the Court resolved to
give due course to the petition and required the parties to file their respective memoranda.
7

Petitioner reiterates the assignment of errors he directed at the trial court decision, and contends that
respondent court of Appeals gravely erred: (i) in concluding that he cannot recover from private
respondent Delta his assigned portion of DMC PN No. 2731; (ii) in failing to hold private respondent
Pilipinas solidarily liable on the DMC PN No. 2731 in view of the provisions stipulated in DCR No. 10805
issued in favor r of petitioner, and (iii) in refusing to pierce the veil of corporate entity between
Philfinance, and private respondents Delta and Pilipinas, considering that the three (3) entities belong to
the "Silverio Group of Companies" under the leadership of Mr. Ricardo Silverio, Sr.
8

There are at least two (2) sets of relationships which we need to address: firstly, the relationship of
petitioner vis-a-visDelta; secondly, the relationship of petitioner in respect of Pilipinas. Actually, of
course, there is a third relationship that is of critical importance: the relationship of petitioner and
Philfinance. However, since Philfinance has not been impleaded in this case, neither the trial court nor
the Court of Appeals acquired jurisdiction over the person of Philfinance. It is, consequently, not
necessary for present purposes to deal with this third relationship, except to the extent it necessarily
impinges upon or intersects the first and second relationships.
I.
We consider first the relationship between petitioner and Delta.
The Court of appeals in effect held that petitioner acquired no rights vis-a-vis Delta in respect of the
Delta promissory note (DMC PN No. 2731) which Philfinance sold "without recourse" to petitioner, to
the extent of P304,533.33. The Court of Appeals said on this point:
Nor could plaintiff-appellant have acquired any right over DMC PN No. 2731 as the same
is "non-negotiable" as stamped on its face (Exhibit "6"), negotiation being defined as the
transfer of an instrument from one person to another so as to constitute the transferee
the holder of the instrument (Sec. 30, Negotiable Instruments Law). A person not a
holder cannot sue on the instrument in his own name and cannot demand or receive
payment (Section 51, id.)
9

Petitioner admits that DMC PN No. 2731 was non-negotiable but contends that the Note had been
validly transferred, in part to him by assignment and that as a result of such transfer, Delta as debtor-
maker of the Note, was obligated to pay petitioner the portion of that Note assigned to him by the
payee Philfinance.
Delta, however, disputes petitioner's contention and argues:
(1) that DMC PN No. 2731 was not intended to be negotiated or otherwise transferred
by Philfinance as manifested by the word "non-negotiable" stamp across the face of the
Note
10
and because maker Delta and payee Philfinance intended that this Note would
be offset against the outstanding obligation of Philfinance represented by Philfinance
PN No. 143-A issued to Delta as payee;
(2) that the assignment of DMC PN No. 2731 by Philfinance was without Delta's consent,
if not against its instructions; and
(3) assuming (arguendo only) that the partial assignment in favor of petitioner was valid,
petitioner took the Note subject to the defenses available to Delta, in particular, the
offsetting of DMC PN No. 2731 against Philfinance PN No. 143-A.
11

We consider Delta's arguments seriatim.
Firstly, it is important to bear in mind that the negotiation of a negotiable instrument must be
distinguished from theassignment or transfer of an instrument whether that be negotiable or non-
negotiable. Only an instrument qualifying as a negotiable instrument under the relevant statute may
be negotiated either by indorsement thereof coupled with delivery, or by delivery alone where the
negotiable instrument is in bearer form. A negotiable instrument may, however, instead of being
negotiated, also be assigned or transferred. The legal consequences of negotiation as distinguished from
assignment of a negotiable instrument are, of course, different. A non-negotiable instrument may,
obviously, not be negotiated; but it may be assigned or transferred, absent an express prohibition
against assignment or transfer written in the face of the instrument:
The words "not negotiable," stamped on the face of the bill of lading, did not destroy its
assignability, but the sole effect was to exempt the bill from the statutory provisions
relative thereto, and a bill, though not negotiable, may be transferred by assignment;
the assignee taking subject to the equities between the original parties.
12
(Emphasis
added)
DMC PN No. 2731, while marked "non-negotiable," was not at the same time stamped "non-
transferable" or "non-assignable." It contained no stipulation which prohibited Philfinance from
assigning or transferring, in whole or in part, that Note.
Delta adduced the "Letter of Agreement" which it had entered into with Philfinance and which should
be quoted in full:
A
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1
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1
9
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0
Philippine Underwriters Finance Corp.
Benavidez St., Makati,
Metro Manila.
Attention: Mr. Alfredo O. Banaria
SVP-Treasurer
GENTLEMEN:
This refers to our outstanding placement of P4,601,666.67 as evidenced by your
Promissory Note No. 143-A, dated April 10, 1980, to mature on April 6, 1981.
As agreed upon, we enclose our non-negotiable Promissory Note No. 2730 and 2731 for
P2,000,000.00 each, dated April 10, 1980, to be offsetted [sic] against your PN No. 143-A
upon co-terminal maturity.
Please deliver the proceeds of our PNs to our representative, Mr. Eric Castillo.
V
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3

We find nothing in his "Letter of Agreement" which can be reasonably construed as a prohibition upon
Philfinance assigning or transferring all or part of DMC PN No. 2731, before the maturity thereof. It is
scarcely necessary to add that, even had this "Letter of Agreement" set forth an explicit prohibition of
transfer upon Philfinance, such a prohibition cannot be invoked against an assignee or transferee of the
Note who parted with valuable consideration in good faith and without notice of such prohibition. It is
not disputed that petitioner was such an assignee or transferee. Our conclusion on this point is
reinforced by the fact that what Philfinance and Delta were doing by their exchange of their promissory
notes was this: Delta invested, by making a money market placement with Philfinance, approximately
P4,600,000.00 on 10 April 1980; but promptly, on the same day, borrowed back the bulk of that
placement, i.e., P4,000,000.00, by issuing its two (2) promissory notes: DMC PN No. 2730 and DMC PN
No. 2731, both also dated 10 April 1980. Thus, Philfinance was left with not P4,600,000.00 but only
P600,000.00 in cash and the two (2) Delta promissory notes.
Apropos Delta's complaint that the partial assignment by Philfinance of DMC PN No. 2731 had been
effected without the consent of Delta, we note that such consent was not necessary for the validity and
enforceability of the assignment in favor of petitioner.
14
Delta's argument that Philfinance's sale or
assignment of part of its rights to DMC PN No. 2731 constituted conventional subrogation, which
required its (Delta's) consent, is quite mistaken. Conventional subrogation, which in the first place is
never lightly inferred,
15
must be clearly established by the unequivocal terms of the substituting
obligation or by the evident incompatibility of the new and old obligations on every point.
16
Nothing of
the sort is present in the instant case.
It is in fact difficult to be impressed with Delta's complaint, since it released its DMC PN No. 2731 to
Philfinance, an entity engaged in the business of buying and selling debt instruments and other
securities, and more generally, in money market transactions. In Perez v. Court of Appeals,
17
the Court,
speaking through Mme. Justice Herrera, made the following important statement:
There is another aspect to this case. What is involved here is a money market
transaction. As defined by Lawrence Smith "the money market is a market dealing in
standardized short-term credit instruments (involving large amounts) where lenders and
borrowers do not deal directly with each other but through a middle manor a dealer in
the open market." It involves "commercial papers" which are instruments "evidencing
indebtness of any person or entity. . ., which are issued, endorsed, sold or transferred or
in any manner conveyed to another person or entity, with or without recourse". The
fundamental function of the money market device in its operation is to match and bring
together in a most impersonal manner both the "fund users" and the "fund
suppliers." The money market is an "impersonal market", free from personal
considerations. "The market mechanism is intended to provide quick mobility of money
and securities."
The impersonal character of the money market device overlooks the individuals or
entities concerned. The issuer of a commercial paper in the money market necessarily
knows in advance that it would be expenditiously transacted and transferred to any
investor/lender without need of notice to said issuer. In practice, no notification is given
to the borrower or issuer of commercial paper of the sale or transfer to the investor.
xxx xxx xxx
There is need to individuate a money market transaction, a relatively novel institution in
the Philippine commercial scene. It has been intended to facilitate the flow and
acquisition of capital on an impersonal basis. And as specifically required by Presidential
Decree No. 678, the investing public must be given adequate and effective protection in
availing of the credit of a borrower in the commercial paper market.
18
(Citations omitted;
emphasis supplied)
We turn to Delta's arguments concerning alleged compensation or offsetting between DMC PN No. 2731
and Philfinance PN No. 143-A. It is important to note that at the time Philfinance sold part of its rights
under DMC PN No. 2731 to petitioner on 9 February 1981, no compensation had as yet taken place and
indeed none could have taken place. The essential requirements of compensation are listed in the Civil
Code as follows:
Art. 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other;
(2) That both debts consists in a sum of money, or if the things due are consumable,
they be of the same kind, and also of the same quality if the latter has been stated;
(3) That the two debts are due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by
third persons and communicated in due time to the debtor. (Emphasis supplied)
On 9 February 1981, neither DMC PN No. 2731 nor Philfinance PN No. 143-A was due. This was explicitly
recognized by Delta in its 10 April 1980 "Letter of Agreement" with Philfinance, where Delta
acknowledged that the relevant promissory notes were "to be offsetted (sic) against [Philfinance] PN
No. 143-A upon co-terminal maturity."
As noted, the assignment to petitioner was made on 9 February 1981 or from forty-nine (49) days
before the "co-terminal maturity" date, that is to say, before any compensation had taken place.
Further, the assignment to petitioner would have prevented compensation had taken place between
Philfinance and Delta, to the extent of P304,533.33, because upon execution of the assignment in favor
of petitioner, Philfinance and Delta would have ceased to be creditors and debtors of each other in their
own right to the extent of the amount assigned by Philfinance to petitioner. Thus, we conclude that the
assignment effected by Philfinance in favor of petitioner was a valid one and that petitioner accordingly
became owner of DMC PN No. 2731 to the extent of the portion thereof assigned to him.
The record shows, however, that petitioner notified Delta of the fact of the assignment to him only on
14 July 1981,
19
that is, after the maturity not only of the money market placement made by petitioner
but also of both DMC PN No. 2731 and Philfinance PN No. 143-A. In other words, petitioner notified
Delta of his rights as assignee after compensation had taken place by operation of law because the
offsetting instruments had both reached maturity. It is a firmly settled doctrine that the rights of an
assignee are not any greater that the rights of the assignor, since the assignee is merely substituted in
the place of the assignor
20
and that the assignee acquires his rights subject to the equities — i.e., the
defenses — which the debtor could have set up against the original assignor before notice of the
assignment was given to the debtor. Article 1285 of the Civil Code provides that:
Art. 1285. The debtor who has consented to the assignment of rights made by a creditor
in favor of a third person, cannot set up against the assignee the compensation which
would pertain to him against the assignor, unless the assignor was notified by the
debtor at the time he gave his consent, that he reserved his right to the compensation.
If the creditor communicated the cession to him but the debtor did not consent thereto,
the latter may set up the compensation of debts previous to the cession, but not of
subsequent ones.
If the assignment is made without the knowledge of the debtor, he may set up the
compensation of all credits prior to the same and also later ones until he had knowledge
of the assignment. (Emphasis supplied)
Article 1626 of the same code states that: "the debtor who, before having knowledge of the assignment,
pays his creditor shall be released from the obligation." In Sison v. Yap-Tico,
21
the Court explained that:
[n]o man is bound to remain a debtor; he may pay to him with whom he contacted to
pay; and if he pay before notice that his debt has been assigned, the law holds him
exonerated, for the reason that it is the duty of the person who has acquired a title by
transfer to demand payment of the debt, to give his debt or notice.
22

At the time that Delta was first put to notice of the assignment in petitioner's favor on 14 July 1981,
DMC PN No. 2731 had already been discharged by compensation. Since the assignor Philfinance could
not have then compelled payment anew by Delta of DMC PN No. 2731, petitioner, as assignee of
Philfinance, is similarly disabled from collecting from Delta the portion of the Note assigned to him.
It bears some emphasis that petitioner could have notified Delta of the assignment or sale was effected
on 9 February 1981. He could have notified Delta as soon as his money market placement matured on
13 March 1981 without payment thereof being made by Philfinance; at that time, compensation had yet
to set in and discharge DMC PN No. 2731. Again petitioner could have notified Delta on 26 March 1981
when petitioner received from Philfinance the Denominated Custodianship Receipt ("DCR") No. 10805
issued by private respondent Pilipinas in favor of petitioner. Petitioner could, in fine, have notified Delta
at any time before the maturity date of DMC PN No. 2731. Because petitioner failed to do so, and
because the record is bare of any indication that Philfinance had itself notified Delta of the assignment
to petitioner, the Court is compelled to uphold the defense of compensation raised by private
respondent Delta. Of course, Philfinance remains liable to petitioner under the terms of the assignment
made by Philfinance to petitioner.
II.
We turn now to the relationship between petitioner and private respondent Pilipinas. Petitioner
contends that Pilipinas became solidarily liable with Philfinance and Delta when Pilipinas issued DCR No.
10805 with the following words:
Upon your written instruction, we [Pilipinas] shall undertake physical delivery of the
above securities fully assigned to you —.
23

The Court is not persuaded. We find nothing in the DCR that establishes an obligation on the part of
Pilipinas to pay petitioner the amount of P307,933.33 nor any assumption of liability in solidum with
Philfinance and Delta under DMC PN No. 2731. We read the DCR as a confirmation on the part of
Pilipinas that:
(1) it has in its custody, as duly constituted custodian bank, DMC PN No. 2731 of a
certain face value, to mature on 6 April 1981 and payable to the order of Philfinance;
(2) Pilipinas was, from and after said date of the assignment by Philfinance to petitioner
(9 February 1981),holding that Note on behalf and for the benefit of petitioner, at least
to the extent it had been assigned to petitioner by payee Philfinance;
24

(3) petitioner may inspect the Note either "personally or by authorized representative",
at any time during regular bank hours; and
(4) upon written instructions of petitioner, Pilipinas would physically deliver the DMC PN
No. 2731 (or a participation therein to the extent of P307,933.33) "should this
Denominated Custodianship receipt remain outstanding in [petitioner's] favor thirty (30)
days after its maturity."
Thus, we find nothing written in printers ink on the DCR which could reasonably be read as converting
Pilipinas into an obligor under the terms of DMC PN No. 2731 assigned to petitioner, either upon
maturity thereof or any other time. We note that both in his complaint and in his testimony before the
trial court, petitioner referred merely to the obligation of private respondent Pilipinas to effect the
physical delivery to him of DMC PN No. 2731.
25
Accordingly, petitioner's theory that Pilipinas had
assumed a solidary obligation to pay the amount represented by a portion of the Note assigned to him
by Philfinance, appears to be a new theory constructed only after the trial court had ruled against him.
The solidary liability that petitioner seeks to impute Pilipinas cannot, however, be lightly inferred. Under
article 1207 of the Civil Code, "there is a solidary liability only when the law or the nature of the
obligation requires solidarity," The record here exhibits no express assumption of solidary liability vis-a-
vis petitioner, on the part of Pilipinas. Petitioner has not pointed to us to any law which imposed such
liability upon Pilipinas nor has petitioner argued that the very nature of the custodianship assumed by
private respondent Pilipinas necessarily implies solidary liability under the securities, custody of which
was taken by Pilipinas. Accordingly, we are unable to hold Pilipinas solidarily liable with Philfinance and
private respondent Delta under DMC PN No. 2731.
We do not, however, mean to suggest that Pilipinas has no responsibility and liability in respect of
petitioner under the terms of the DCR. To the contrary, we find, after prolonged analysis and
deliberation, that private respondent Pilipinas had breached its undertaking under the DCR to petitioner
Sesbreño.
We believe and so hold that a contract of deposit was constituted by the act of Philfinance in
designating Pilipinas as custodian or depositary bank. The depositor was initially Philfinance; the
obligation of the depository was owed, however, to petitioner Sesbreño as beneficiary of the
custodianship or depository agreement. We do not consider that this is a simple case of a
stipulation pour autri. The custodianship or depositary agreement was established as an integral part of
the money market transaction entered into by petitioner with Philfinance. Petitioner bought a portion of
DMC PN No. 2731; Philfinance as assignor-vendor deposited that Note with Pilipinas in order that the
thing sold would be placed outside the control of the vendor. Indeed, the constituting of the depositary
or custodianship agreement was equivalent to constructive delivery of the Note (to the extent it had
been sold or assigned to petitioner) to petitioner. It will be seen that custodianship agreements are
designed to facilitate transactions in the money market by providing a basis for confidence on the part
of the investors or placers that the instruments bought by them are effectively taken out of the pocket,
as it were, of the vendors and placed safely beyond their reach, that those instruments will be there
available to the placers of funds should they have need of them. The depositary in a contract of deposit
is obliged to return the security or the thing deposited upon demand of the depositor (or, in the
presented case, of the beneficiary) of the contract, even though a term for such return may have been
established in the said contract.
26
Accordingly, any stipulation in the contract of deposit or
custodianship that runs counter to the fundamental purpose of that agreement or which was not
brought to the notice of and accepted by the placer-beneficiary, cannot be enforced as against such
beneficiary-placer.
We believe that the position taken above is supported by considerations of public policy. If there is any
party that needs the equalizing protection of the law in money market transactions, it is the members of
the general public whom place their savings in such market for the purpose of generating interest
revenues.
27
The custodian bank, if it is not related either in terms of equity ownership or management
control to the borrower of the funds, or the commercial paper dealer, is normally a preferred or
traditional banker of such borrower or dealer (here, Philfinance). The custodian bank would have every
incentive to protect the interest of its client the borrower or dealer as against the placer of funds. The
providers of such funds must be safeguarded from the impact of stipulations privately made between
the borrowers or dealers and the custodian banks, and disclosed to fund-providers only after trouble
has erupted.
In the case at bar, the custodian-depositary bank Pilipinas refused to deliver the security deposited with
it when petitioner first demanded physical delivery thereof on 2 April 1981. We must again note, in this
connection, that on 2 April 1981, DMC PN No. 2731 had not yet matured and therefore, compensation
or offsetting against Philfinance PN No. 143-A had not yet taken place. Instead of complying with the
demand of the petitioner, Pilipinas purported to require and await the instructions of Philfinance, in
obvious contravention of its undertaking under the DCR to effect physical delivery of the Note upon
receipt of "written instructions" from petitioner Sesbreño. The ostensible term written into the DCR (i.e.,
"should this [DCR] remain outstanding in your favor thirty [30] days after its maturity") was not a
defense against petitioner's demand for physical surrender of the Note on at least three grounds: firstly,
such term was never brought to the attention of petitioner Sesbreño at the time the money market
placement with Philfinance was made; secondly, such term runs counter to the very purpose of the
custodianship or depositary agreement as an integral part of a money market transaction; and thirdly, it
is inconsistent with the provisions of Article 1988 of the Civil Code noted above. Indeed, in principle,
petitioner became entitled to demand physical delivery of the Note held by Pilipinas as soon as
petitioner's money market placement matured on 13 March 1981 without payment from Philfinance.
We conclude, therefore, that private respondent Pilipinas must respond to petitioner for damages
sustained by arising out of its breach of duty. By failing to deliver the Note to the petitioner as
depositor-beneficiary of the thing deposited, Pilipinas effectively and unlawfully deprived petitioner of
the Note deposited with it. Whether or not Pilipinas itself benefitted from such conversion or unlawful
deprivation inflicted upon petitioner, is of no moment for present purposes.Prima facie, the damages
suffered by petitioner consisted of P304,533.33, the portion of the DMC PN No. 2731 assigned to
petitioner but lost by him by reason of discharge of the Note by compensation, plus legal interest of six
percent (6%) per annum containing from 14 March 1981.
The conclusion we have reached is, of course, without prejudice to such right of reimbursement as
Pilipinas may havevis-a-vis Philfinance.
III.
The third principal contention of petitioner — that Philfinance and private respondents Delta and
Pilipinas should be treated as one corporate entity — need not detain us for long.
In the first place, as already noted, jurisdiction over the person of Philfinance was never acquired either
by the trial court nor by the respondent Court of Appeals. Petitioner similarly did not seek to implead
Philfinance in the Petition before us.
Secondly, it is not disputed that Philfinance and private respondents Delta and Pilipinas have been
organized as separate corporate entities. Petitioner asks us to pierce their separate corporate entities,
but has been able only to cite the presence of a common Director — Mr. Ricardo Silverio, Sr., sitting on
the Board of Directors of all three (3) companies. Petitioner has neither alleged nor proved that one or
another of the three (3) concededly related companies used the other two (2) as mere alter egos or that
the corporate affairs of the other two (2) were administered and managed for the benefit of one. There
is simply not enough evidence of record to justify disregarding the separate corporate personalities of
delta and Pilipinas and to hold them liable for any assumed or undetermined liability of Philfinance to
petitioner.
28

WHEREFORE, for all the foregoing, the Decision and Resolution of the Court of Appeals in C.A.-G.R. CV
No. 15195 dated 21 march 1989 and 17 July 1989, respectively, are hereby MODIFIED and SET ASIDE, to
the extent that such Decision and Resolution had dismissed petitioner's complaint against Pilipinas Bank.
Private respondent Pilipinas bank is hereby ORDERED to indemnify petitioner for damages in the
amount of P304,533.33, plus legal interest thereon at the rate of six percent (6%) per annum counted
from 2 April 1981. As so modified, the Decision and Resolution of the Court of Appeals are hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
[G.R. No. 106357. September 3, 1998]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee vs. PRISCILLA BALASA, NORMITA VISAYA, GUILLERMO
FRANCISCO, NORMA FRANCISCO and ANALINA FRANCISCO, accused. NORMA FRANCISCO,
GUILLERMO FRANCISCO and ANALINA FRANCISCO, accused-appellants.
[G.R. Nos. 108601-02. September 3, 1998]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee vs. PRISCILLA BALASA, NORMITA VISAYA, GUILLERMO
FRANCISCO, NORMA FRANCISCO and ANALINA FRANCISCO, Accused. NORMA FRANCISCO,
GUILLERMO FRANCISCO and ANALINA FRANCISCO, accused-appellants.
D E C I S I O N
ROMERO, J.:
“Avarice, mother of crimes, greedy for more the more she possesses, eversearching open-mouthed for
gold.”
[1]

Greed has always been one of man’s failings. The hope of greater gain has lured many a man to
throw caution, and his common sense, to the wind. This human foible, known to many, has been
exploited throughout the ages by con men, charlatans and cheats to bilk the gullible public of their hard-
earned money. History has thus seen the unraveling of various disingenuous stratagems which are at
bottom nothing but scams. The case at hand once again proves that “a sucker is born every minute.”
Totoong walang pagkaubos sa ating daigdig ang mga taong nanlilinlang. Hindi magkakagayon
naman kung walang nagpapalinlang. Dahil sa kanilang malaking hangarin na magkamal ng kimpal kimpal
na kayamanan, pinapasukan nila ang mga kaduda-dudang alok ng mga mapagsamantala na kung sila ay
mamuhunan ng kaunting salapi, ito ay tutubo ng malaki sa ilang araw lamang. Kaya’t napakaraming mga
tao ang nagagantso. Hindi masasabing mga hangal o dili kaya’y mga maralita na walang gaanong pinag-
aralan ang mga nabibiktima. Kahit ang mga maykaya at matataas sa ating lipunan ay napaglalaruan
din. Milyun-milyong salapi ang nahuhuthot sa kanila, hindi ng mga masakim na magnanakaw, kundi ng
kanila na ring mga kasamahan sa tinatawag na “alta sociedad.” Mismong mga kaibigan at kapanatag ng
loob ang naguudyok sa kanilang sumali sa mga pakana na magpapayaman sa kanila. Higit namang
nakakaawa kapag ang naloloko ay iyong nangungutang lamang at nagbabakasakali na ang ilang daan nila
ay magiging libo.
Itong kapasiyahang ito ng Mataas na Hukuman ay nagbababalang muli. Magpakaingat-ingat ang
lahat. Ang naghahangad ng kagitna, isang salop ang nawawala.
Iyon namang nanlilinlang. Walang gawaing masama na hindi nabubunyag rin. Totoong mahigpit
ang ating batas na pumaparusa sa mga ganyang hindi na natututo, lalo’t higit kung ang mga salarin ay
mga sindikato.
Tunghayan natin kung papaano naganap ang gawang panloloko sa mga taga Palawan ng mga dayo
lamang.
On July 6, 1989, the Panata Foundation of the Philippines, Inc., a non-stock, non-profit corporation
with principal address at San Miguel, Puerto Princesa, Palawan, was registered with the Securities and
Exchange Commission, under S.E.C. Reg. No. 165565. Its ten incorporators were Priscilla Balasa, Normita
Visaya, Analina Francisco, Lolita Gelilang, Cynthia Ang, Norma Francisco, Purabel Espidol, Melinda
Mercado, Rodolfo Ang, Jr. and Teresa G. Carandang. Five incorporators, namely, Priscilla Balasa, Normita
Visaya, Analina Francisco, Lolita Gelilang and Cynthia Ang were named first trustees.
In addition, the management of the foundation was entrusted to Priscilla Balasa, as president and
general manager; Normita Visaya as corporate secretary and head comptroller; Norma Francisco as
cashier; Guillermo Francisco as the disbursing officer; and Analina Francisco as treasurer. The latter also
doubled as a typist of the Foundation.
On the other hand, the employees of the foundation were the tellers Rosemarie Balasa, Sylvia
Magnaye, Judith Ponciano, Jessica Buaya, Rosario Arciaga, Paul Francisco, Enriquita Gabayan and Anita
Macmac. The comptrollers, Ruth Jalover, Almarino Agayo, and Avelina Yan were under the supervision
of Normita Visaya. Nelia Daco, one of the clerks assigned outside, was the one in direct contact with the
depositors.
The Foundation’s purposes, as stated in its by-laws, were as follows:
1. Uplift members’ economic condition by way of financial or consultative basis (sic);
2. To encourage members in a self-help program;
3. To grant educational assistance;
4. To implement the program on the Anti-Drug campaign;
5. To acquire facilities either by or through purchase, lease, bequest of donations, equipments
(sic), machineries (sic) and supplies for purposes of carrying out its business operation or
hold such real or personal properties as may be convenient and proper in order to achieve
the purpose of this corporation;
6. To cooperate with other organizations, institutions with similar activities for purposes of
carrying out its business; and
7. To organize seminars or conferences specially in the rural areas and other selected cities.”
[2]

After obtaining its SEC registration, the foundation immediately swung into operation. It sent out
brochures soliciting deposits from the public, assuring would-be depositors that their money would
either be doubled after 21 days or trebled after 30 days. Priscilla Balasa also went around convincing
people to make deposits with the foundation at their office at the Diaz Apartment, Puerto Princesa.
The modus operandi for investing with the foundation was as follows:
When a person would deposit an amount, the amount would be taken by a clerk to be given to the
teller. The teller would then fill up a printed form called a “slot.” These “slots” were part of a booklet,
with one booklet containing one hundred “slots.” A “slot,” which resembled a check, contained the
following data:
PANATA FOUNDATION Control No. ___33____
(Logo) OF THE PHILIPPINES INC. Date 12-5-87 / Dec. 26, 1987
PFOPI Puerto Princesa, Palawan Amount P__500.00
SEC Reg. No. 165565
M__CHESTER MONREAL______________________________
Address___RPC_____________________________________________
Share____FIVE___
Amount in words ___FIVE HUNDRED PESOS Only_____
(Sgd.) __(Sgd.)____________
Signature of Member PRISCILLA BALASA
President / Manager
No. 30333
[3]

The control number indicated the number of the “slot” in a booklet, while the space after “date”
would contain the date when the slot was acquired, as well as the date of its maturity. The amount
deposited determined the number of shares, one share being equivalent to one hundred pesos. The
depositor had the discretion when to affix his signature on the space provided therefor. Some would
sign their slot only after payment on maturity, while others would sign as soon as they were given the
slot. However, without the control number and the stamp of the teller, duly signed or initialed, no
depositor could claim the proceeds of his deposit upon maturity.
[4]

After the slot had been filled up by the teller, he would give it to the clerk assigned outside. The
clerk would then give the slot to the depositor. Hence, while it was the teller who prepared and issued
the slot, he had no direct contact with the depositor. The slots handed to a depositor were signed
beforehand by the president of the foundation.
Every afternoon, the comptrollers would take the list of depositors made by the tellers with the
amounts deposited by each, and have these typed. Norma Francisco would then receive from the
tellers the amounts deposited by the public. It was also her job to pay the salaries of the foundation’s
employees. For his part, Guillermo Francisco would release money whenever a deposit would mature as
indicated in the slots.
According to the foundation’s rules, an investor could deposit up to P5,000.00 only, getting a slot
corresponding thereto. Anyone who deposited more than that amount would, however, be given a slot
but the slot had to be in the name of another person or several other persons, depending upon the
amount invested.
[5]
According to Sylvia Magnaye, a foundation teller, all deposits maturing in August
1989 were to be tripled. For such deposits, the slots issued were colored yellow to signify that the
depositor would have his deposit tripled. Deposits that would mature subsequent to August were only
given double the amount deposited.
[6]
However, there were times when it was the depositor who would
choose that his deposit be tripled, in which case, the deposit would mature later.
[7]

The amounts received by the foundation were deposited in banks. Thus, a foundation teller would,
from time to time, go to PNB, PCI Bank, DBP and the Rural Bank of Coron to deposit the collections in a
joint account in the names of Priscilla Balasa and Norma Francisco.
Initially, the operation started with a few depositors, with most depositors investing small amounts
to see whether the foundation would make good on its promise. When the foundation paid double or
triple the amounts of their investment at maturity, most not only reinvested their earnings but even
added to their initial investments. As word got around that deposits could be doubled within 21 days, or
tripled, if the period lasted for more than 30 days, more depositors were attracted. Blinded by the
prospect of gaining substantial profits for nothing more than a minuscule investment, these investors,
like previous ones, were lured to reinvest their earnings, if not to invest more.
Most would invest more than P5,000.00, the investment limit set by the foundation. Priscilla Balasa
would, however, encourage depositors to invest more than P5,000.00, provided that the excess was
deposited under the name of others. She assured the depositors that this was safe because as long as
the depositor was holding the slots, he was the “owner” of the amount deposited. Most investors then
deposited amounts in the names of their relatives.
At the outset, the foundation’s operations proceeded smoothly, as satisfied investors collected
their investments upon maturity. On November 29, 1989, however, the foundation did not
open. Depositors whose investments were to mature on said date demanded payments but none was
forthcoming. On December 2, 1989, Priscilla Balasa announced that since the foundation’s money had
been invested in the stock market, it would resume operations on December 4, 1989. On that date, the
foundation remained closed. Depositors began to demand reimbursement of their deposits, but the
foundation was unable to deliver.
Consequently, sixty-four informations, all charging the offense of estafa, as defined in Presidential
Decree No. 1689, were filed against Priscilla Balasa, Normita Visaya, Norma Francisco, Guillermo
Francisco, Analina Francisco and eight other persons, mostly incorporators and employees of the Panata
Foundation, before the Regional Trial Court of Palawan. Fourteen cases, including Criminal Case Nos.
8429 and 8751, were raffled off to Branch 52. Two more cases, Criminal Case Nos. 8704 and 8749, were
similarly assigned to it. Of the sixteen cases assigned to Branch 52, eight were, with the consent of the
accused, provisionally dismissed for lack of evidence.
In Criminal Case No. 8429, the information charging the accused with the crime of estafa “as
amended by PD 1689” was filed on December 12, 1989. The accused in this case were: Priscilla Balasa,
Almarino Agayo, Norma Francisco, Normita Visaya, Paul Francisco, Nelia Daco, Ruth Jalover,
[8]
Guillermo
Francisco, Candido Tolentino, Jr., Rosemarie Balasa,
[9]
Ricardo del Rosario, Emelita Gabayan, Rosario
Arciaga, Jessica Buaya, Avelina Yan, Anita Macmac, Gina Gabaldon, Ronaldo Belo, Fernando Cadauan,
Lolita Gelilang, Cynthia Ang, Judith Ponciano, Sylvia Magnaye,
[10]
Analina Francisco and Sulpio Nabayan.
As amended on February 16, 1990, the information in this case reads as follows:
“That sometime on (sic) December, 1989, the above-named accused being the Manager and employees
of the PANATA Foundation of the Philippines, Inc., with office at No. 20 Diaz Apartment, Manalo
Extension, Puerto Princesa City, Philippines, and within the jurisdiction of this Honorable Court, the said
accused conspiring and confederating with one another and operating as a syndicate, did then and there
wilfully, unlawfully and feloniously defraud one Estrella San Gabriel y Lacao by means of false
representation and fraudulent means which they made to said Estrella San Gabriel to the effect that as
an investor/subscriber to the PANATA Foundation, Inc. which is a non-stock corporation allegedly
registered with the SEC under Registration No. 165565 and by means of other similar deceit induce the
said Estrella San Gabriel to give and deliver to the said accused the amount of P5,500.00 as her
investment in said foundation, and by manifestation and misrepresentation by the said accused that the
said invested amount will be doubled or tripled within a certain period of days said accused knowing
fully well that their manifestation and representations were false and fraudulent as they are made only
for the purpose of obtaining as in fact they obtained the amount with intent to defraud misapply,
misappropriate and convert the said amount for their own personal use and benefit, to the damage and
prejudice of said Estrella San Gabriel in the amount of P5,500.00, Philippine Currency.
CONTRARY TO LAW and penalized under Presidential Decree No. 1689.”
Likewise, in Criminal Case No. 8704, the information, filed on May 23, 1990, charged Priscilla
Balasa, Norma Francisco, Guillermo Francisco, Normita Visaya, Analina Francisco, Lolita Gelilang, Cynthia
Ang, Rodolfo Ang, Jr., Purable Espidol, Melinda Mercado, Almarino Agayo, Candido Tolentino, Jr.,
Ricardo del Rosario, Fernando Caduan, Paul Francisco and Teresita Carandang with the crime of estafa
“as amended by Presidential Decree No. 1689” as follows:
“That sometime in July, 1989 to December 1989, the above-named accused being then the Manager,
incorporators, members of the board of trustees, officers and employees of the PANATA FOUNDATION
OF THE PHIL., INC. with Office No. 20 Diaz Apartment, Manalo Extension, Puerto Princesa City,
Philippines and within the jurisdiction of this Honorable Court, the said accused conspiring,
confederating together and mutually helping one another, and operating as a syndicate, did then and
there wilfully, unlawfully and feloniously defraud, the complainant Conchita Bigornia, by means of false
pretenses/representation and fraudulent means which they made to said Conchita Bigornia to the effect
that as depositor/subscriber to the PANATA FOUNDATION OF THE PHIL., INC., which is a non-stock
corporation allegedly registered with the SEC under Registration No. 165565 and by means of other
similar deceit induce the said Conchita Bigornia, to give and deliver to the said accused the amount of
TWENTY FOUR THOUSAND ONE HUNDRED (P24,100.00) PESOS, Philippine Currency, as his/her
deposit/subscription in said Foundation, and by manifestation and misrepresentation by the said
accused that the said deposited/subscription amount will be doubled or tripled within a certain period
of days said accused knowing fully well that this manifestation were (sic) false and fraudulent as they are
made only for the purpose of obtaining as in fact they obtained the amount of TWENTY FOUR
THOUSAND ONE HUNDRED PESOS (P24,100.00) from the said (Conchita Bigornia) and the said accused
once in possession of the said amount with intent to defraud, misapply, misappropriate and convert the
said amount for their own personal use and benefit, to the damage and prejudice of the said Conchita
Bigornia in the amount aforestated.
CONTRARY TO LAW and penalized under P. D. No. 1689.”
Similar informations were filed against the same persons in Criminal Cases Nos. 8749 and
8751. The complainant in Criminal Case No. 8749, complainant Shiela San Juan, was allegedly defrauded
of P25,800.00 while in Criminal Case No. 8751, the amount of P6,800.00 was allegedly defrauded from
Benjamin Yangco.
In like manner, similarly worded informations in Criminal Case Nos. 8734 and 8428, raffled off to
Branch 50, alleged that Elisia Mensias was defrauded in the amount of P4,500.00 and Alfonso and
Prescilla Lacao defrauded in the amount of P58,850.00, respectively.
After the filing of the informations, warrants for the arrest of the defendants in the corresponding
criminal cases were issued. However, only Priscilla Balasa, Normita Visaya, Guillermo Francisco, Norma
Francisco and Analina Francisco were arrested, the rest of the defendants having gone into hiding.
On arraignment, the arrested defendants all pleaded not guilty to the crimes charged but before
the presentation of prosecution evidence, Priscilla Balasa and Normita Visaya escaped from police
custody. With their escape, only the spouses Guillermo and Norma Francisco were called to present
evidence on behalf of the defense. Analina Francisco, being a deaf-mute, was not called to the witness
stand due to the lack of a competent interpreter. The spouses, in denying criminal liability, presented
the following facts:
Priscilla Balasa, Normita Visaya, and Analina Francisco, full-blooded sisters, are the common
children of appellant spouses Guillermo and Norma Francisco. Before the Panata Foundation started
operations in July 1989, Priscilla had been living with her parents in San Mateo, Isabela. Analina, on the
other hand, was living with their elder sister, Normita, in Manila. Priscilla, however, left for Palawan in
June 1989.
Sometime thereafter, Guillermo Francisco received a letter from Priscilla asking him to come to
Palawan to provide her company, the latter’s husband having left for abroad as a
seaman. Consequently, Francisco came to Palawan sometime in August 1989 to live with Priscilla at the
Diaz Apartment in Puerto Princesa. Norma Francisco also came to Palawan in August, purportedly to
visit Priscilla’s daughter, whom she missed. Analina likewise came to Palawan from Manila in August.
Guillermo denies participation in the commission of the crime charged. In his testimony, he limits
his participation in the foundation’s activities to paying the holders of matured slots. It was the
comptroller, Ruth Jalover, who would give him the record on which to base the remittances he would
make.
[11]
The money he disbursed was not always in his possession, as it would have to come from the
bank. It was Sylvia Magnaye who would withdraw the money from the bank while it was Nelia Daco
who would directly receive money from the people. Thus, not even once did he participate in the
process of receiving money. His daughters Priscilla Balasa and Normita Visaya performed other jobs in
the operation of the foundation while his other daughter, Analina Francisco, only typed documents. He
knew that the foundation helped people who received money from it.
[12]
Although the primary purpose
of the foundation was to help the needy, Guillermo testified having knowledge of only one recipient
thereof, the church of Aborlan.
In her testimony, Norma Francisco also denied complicity in the crime charged, claiming that she
only did household chores in Puerto Princesa. She alleged that sometimes, she would “help the
tellers.” However, because Ruth Jalover was educated and she was not, the former would sometimes
become the “acting manager of her daughter.” Sylvia Magnaye, her daughter’s sister-in-law and a
permanent employee of the foundation, was one of the tellers who would deposit and withdraw from
the bank. The eight tellers of the foundation all applied for their jobs with Priscilla but it was Normita
who interviewed them. However, Normita was only a clerk in the foundation while Analina would type
whatever work Ruth Jalover would give her. While Norma had no official position in the foundation, her
husband, Guillermo, was the paymaster. During her stay in Puerto Princesa, she knew of no other
business that her daughter Priscilla was engaged in except the foundation and a paluwagan, which she
ran together with a certain Manny Diaz. Norma knew that the foundation was a charitable institution
that had helped a lot of people. She did not help Ruth Jalover in the same way that she helped Sylvia
Magnaye with her job as teller, but she had nothing to do with the keeping of records. She knew that
money came from the tellers, who got the money from Nelia Daco, the one receiving money from
prospective investors.
[13]

On March 31, 1992, Branch 50 of the Regional Trial Court of Palawan issued a joint decision in
Criminal Case Nos. 8734 and 8428 finding the accused guilty of the crime charged and of having acted in
conspiracy in committing the same. Finding no aggravating or mitigating circumstances in the
commission of the crime, the trial court decreed thus:
“WHEREFORE, AND IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby rendered
finding all the accused in the 2 above-entitled cases guilty as principals of the crime of estafa as the
same is defined and penalized under the Revised Penal Code.
a. In Criminal Case No. 8428 accused Priscilla Balasa, Normita Visaya, Analina Francisco, Guillermo
Francisco and Norma Francisco are hereby sentenced to suffer the penalty of reclusion perpetua as
well as to pay the costs. The accused are jointly and severally ordered to pay the offended party
Alfonso Lacao the sum of Fifty Eight Thousand Eight Hundred Fifty (P58,850.00) Pesos and to pay the
further sum of Thirty Thousand Pesos (P30,000.00) as and for moral damages;
b. In Criminal Case No. 8734, accused Normita Visaya, Analina Francisco, Norma Francisco and
Guillermo Francisco are hereby sentenced to suffer the penalty of reclusion perpetua as well as to
pay the costs. They are furthermore ordered jointly and severally to indemnify the offended party
Elisea Mensias the sum of Four Thousand Five Hundred (P4,500.00) Pesos as well as to pay the
additional sum of Fifteen Thousand (P15,000.00) Pesos as and for moral damages.
The cases against the accused Almarino Agayo, Paul Francisco, Candido Tolentino, Jr., Ricardo del
Rosario, Jessica Buaya, Fernando Cadauan, Lolita Gelilang, Cynthia Ang, Rodolfo Ang, Jr., Purable Espidol,
Melinda Mercado, and Teresit Carandang who remained at large up to the present time are hereby
ordered archived to be reinstated in the docket of this Court as soon as they shall have been arrested or
surrendered voluntarily to the jurisdiction of this Court.
SO ORDERED.”
On the other hand, Branch 52 rendered separate decisions in the cases assigned to it. Thus, on
October 14, 1991, the trial court, in Criminal Case No. 8429 rendered a decision, the dispositive portion
of which reads as follows:
“WHEREFORE, premises considered, judgment is hereby rendered finding co-accused PRISCILLA BALASA,
NORMITA VISAYA, GUILLERMO FRANCISCO, and NORMA FRANCISCO guilty beyond reasonable doubt as
co-principals of the crime of estafa committed by a syndicate in violation of Section 1 of Presidential
Decree No. 1689, and each of the aforenamed accused is sentenced to reclusion perpetua; to pay to
Estrella Lacao San Gabriel, jointly and severally, by way of restitution, the sum of P5,500.00.00, with
interest thereon of 12% per annum from December, 1989, until fully paid; and to pay the costs.
On grounds of reasonable doubt engendered by lack of sufficiently clear and convincing evidence as
against her, co-accused Analina Francisco is acquitted of the offense charged.
SO ORDERED.”
Although Branch 52 rendered separate decisions in the cases assigned to it, all had essentially the
same disposition — imposing the penalty of reclusion perpetua upon each of the convicted accused —
only the name of the offended party and the amount to be restituted varied. Thus, in Criminal Case No.
8704,
[14]
the trial court ordered the accused to pay Conchita Bigornia by way of restitution, the amount
of P24,200.00 with interest thereon of 12% per annum from December 1989. In Criminal Case No.
8749,
[15]
the same convicted accused were ordered to restitute Shiela San Juan the amount of
P25,800.00 plus 12% per annum from December 1989. In Criminal Case No. 8751,
[16]
the convicted
accused were ordered to restitute Benjamin Yangco the amount of P6,800.00 with 12% interest per
annum from December 1989.
Guillermo and Norma Francisco filed notices of appeal in Criminal Case Nos. 8429, 8704, 8749 and
8751. Their appeal was docketed as G.R. No. 106357. Likewise, the joint decision in Criminal Case Nos.
8734 and 8428 was appealed to this Court by Guillermo Francisco, Norma Francisco, Analina Francisco,
and Normita Visaya, docketed herein as G.R. Nos. 108601-02. Noting Normita Visaya’s escape from
police custody after arraignment, the Court, on August 15, 1994, and pursuant to Section 8, Rule 124 of
the Revised Rules of Court, ordered the dismissal of her appeal on the ground of abandonment. The
Court also considered Priscilla Balasa’s conviction to be final and executory, in light of her escape from
police custody. It also ordered the issuance of a warrant for the arrest of Normita Visaya and an alias
warrant of arrest against Priscilla Balasa.
On October 16, 1993, appellants’ counsel, Atty. Agustin Rocamora, filed an appellants’ brief in G.R.
No. 106357. Thereafter, appellants appointed the Maramba and Mamauag Law Office as new counsel in
substitution of Atty. Rocamora. On November 2, 1994, new counsel filed a motion to consolidate G.R.
No. 106357 and G. R. Nos. 108601-02. On December 7, 1994, the Court granted the motion and ordered
the consolidation of the two cases. On the same day, counsel for appellants submitted a consolidated
appellants’ brief.
In G.R. No. 106357, counsel for appellants raise the following errors:
1.The trial court erred in convicting the appellants despite the total absence of evidence
against them;
2.The trial court erred in ruling that conspiracy existed on the basis of the relationship of the
appellants to the principal accused; and
3.The trial court erred in convicting appellants despite their prior conviction for the same
offense in Criminal Case No. 8429.
On the other hand, the brief filed by appellants in the consolidated cases mainly argues that they
cannot be convicted of the crime defined in Presidential Decree No. 1689 because the informations filed
against them alleged prejudice against the complaining witnesses, not against the national, provincial, or
city economy nor was evidence presented therefor.
Appellants’ conviction must, however, be sustained, the issues raised being devoid of merit. The
number and diversity of issues raised by appellants impel us to discuss the points raised seriatim.
For the first assignment of error, we hold that the elements of the crime defined and penalized by
P.D. No. 1689 have been proven beyond reasonable doubt in these appealed cases. The informations
filed against appellants alleged that by means of false representation or false pretenses and through
fraudulent means, complainants were defrauded of various amounts of money by the accused. Article
315, paragraph 2 (a) of the Revised Penal Code provides that swindling or estafa by false pretenses or
fraudulent acts executed prior to or simultaneously with the commission of the fraud is committed by
“using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit,
agency, business or imaginary transactions, or by other similar deceits.” The elements of estafa under
this penal provision are: (1) the accused defrauded another by means of deceit and (2) damage or
prejudice capable of pecuniary estimation is caused to the offended party or third party.
[17]
It is
indisputable that the foundation failed to return the investments of the complaining witnesses, hence it
is undeniable that the complainants suffered damage in the amount of their unrecouped investments.
What needs elucidation is whether or not the element of defraudation by means of deceit has been
established beyond reasonable doubt.
Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts,
omissions, and concealment involving a breach of legal or equitable duty, trust, or confidence justly
reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken
of another.
[18]
It is a generic term embracing all multifarious means which human ingenuity can device,
and which are resorted to by one individual to secure an advantage over another by false suggestions or
by suppression of truth and includes all surprise, trick, cunning, dissembling and any unfair way by which
another is cheated.
[19]
On the other hand, deceit is the false representation of a matter of fact whether
by words or conduct, by false or misleading allegations, or by concealment of that which should have
been disclosed which deceives or is intended to deceive another so that he shall act upon it to his legal
injury.
[20]

In pursuit of their agenda, appellants established a foundation which, by its articles of
incorporation, was established, allegedly to “uplift members’ economic condition by way of financial or
consultative basis.” Organized as a non-stock, non-profit charitable institution, its funds were to be
obtained through membership dues and such other assessments as may be agreed upon by its board of
directors.
[21]
Furthermore, the modus operandi
[22]
of the foundation, duly signed by Priscilla Balasa,
provided that:
“Funding
Any funding requirements to finance the operation of the association shall be done through the
collection of membership fees, dues, donations, bequests and other assessments. The amount of which
shall be subject to the approval of the general membership of the association.
Likewise, all funds in-flows would be used exclusively to carry out the purposes for which the
FOUNDATION is established and would not inure to the benefit of any single member of the
FOUNDATION.
The operations personnel shall come from volunteers among its members and should the need arise,
hiring of additional personnel be resorted to.”
In contravention of these by-laws and modus operandi, the people behind the foundation enticed
people to “deposit or invest” funds in the foundation under a “double or treble your deposit”
scheme. These investment activities were clearly ultra vires acts or acts beyond the foundation’s
authority. Evidently, SEC registration was obtained only for the purpose of giving a semblance of
legitimacy to the foundation; that the foundation’s business was sanctioned by the government; and
that it was allowed by law to accept deposits. This pretension was carried out even on the slots it
issued, the foundation’s S.E.C. registry number being indicated thereon.
In carrying out the charade, the manager went to the extent of delivering a speech and personally
encouraging people to deposit or invest in the foundation. Alfonso Lacao, a complainant and
prosecution witness, testified:
“Q: Have you heard of this so called Panata Foundation?
A: Yes, ma’am I heard it from my friends who are talking about this Panata Foundation they even
informed me that the manager of this Panata Foundation is calling for a meeting for all
depositors and prospective depositors on Saturday afternoon.
Q: With that information did you get interested in the proposed meeting being called by this Panata
Foundation?
A: I was curious and came Saturday I went to the office of the Panata Foundation to attend the
meeting.
Q: And at that time where was this office located?
A: At Diaz Apartment, Manalo Extension, Puerto Princesa City.
Q: Did you attend that meeting?
A: Yes ma’am.
Q: Whom did you see sponsoring that meeting on that particular day?
A: Upon arrival I saw a woman delivering her message to the depositors and to the prospective
depositors. I asked a friend of me (sic) who is that woman and he informed me that she is the
manager of the Panata Foundation Priscilla Balasa.
x x x x x x x x x
Q: What was Priscilla Balasa doing if any in that particular meeting?
A: In her message she was convincing all the people there to make their deposit to the Panata
Foundation because according to her they were sent here to help the people of Puerto Princesa
City and the people of Palawan.
Q: Aside from that what did Priscilla Balasa tell those people who attended the meeting?
A: She was assuring the people that they must not be afraid to deposit their money because they
will not be fooling around with them.
x x x x x x x x x
Q: And did Priscilla Balasa tell those persons attending the meeting what would happen with the
money they will deposit with the Panata Foundation?
A: She was telling the people that you could deposit the money and it will be doubled within 21
days. I was further informed that the maximum amount to be deposited is P5,000.00.
Q: You stated a while ago that the amount deposited will be doubled after 21 days?
A: Yes ma’am.
Q: Aside from that what else if any did Priscilla Balasa tell the public who attended that meeting?
A: She was telling the public to make ease with their deposit because they were sent here to help
the people of Puerto Princesa City and Palawan.
Q: Did she tell the public as to where the money would be coming from?
A: Right that moment she was not able to tell the public.”
[23]

On cross-examination, Mr. Lacao testified:
“Q: But did it not occur to your mind considering your past experience to investigate or cause the
investigation of this Panata Foundation considering your connection as to whether they are in a
position to make double your money investment specially so they are not engage (sic) in
business, so to speak?
A: Once I overheard the manager say when she was there telling the people around the depositors
that their money is being invested in a world bank.”
[24]

Priscilla Balasa, thus, promised the credulous public quick financial gains on their investments. The
foundation even printed brochures proclaiming the merits of the foundation’s investment
scheme.
[25]
Likewise, to bolster the illusion that indeed, the foundation was legitimate, the claim was
made that deposits would be invested abroad in a world bank, with said transactions allegedly enabling
the foundation to double or treble depositors’ investments. The evidence, however, proves the
contrary. Sylvia Magnaye, one of the tellers, testified:
“Q: Other than to issue slots, do you know what other phase of operation in running the Panata
Foundation during the time that you were employed?
A: No sir, I can only observe that issuing of slots.
Q: Madam Witness, aside from issuing slots, there is only the activity of the foundation that you are
well aware of?
A: Sometimes they also sent me to deposit.
Q: The deposit of the amount collected in the bank, is that correct?
A: I do not know but they just send me to deposit amounts.
Q: But you do not know in what other business activity other than the matter of collecting money
and issuance of slots you do not know if the Panata Foundation is involved in any business
activity?
A: Yes, sir.
Q: You do not know whether the foundation receives money regularly from any other source?
A: I do not know sir.”
[26]

On cross-examination, she testified:
“Q: You mentioned Madam Witness, that on several occasions you were asked to deposit certain
amounts in the bank, do you remember having told the Court that?
A: Right, sir.
Q: Do you remember how many banks these deposited amounts were if you remember?
A: I deposited at PNB, PCIBank, and DBP and Rural Bank of Coron.
Q: Do you remember in whose names you deposited these amounts you deposited?
A: In the name of the joint account of Priscilla Balasa and Norma Francisco.”
[27]

The testimonial evidence presented by the prosecution proves that appellants employed fraud and
deceit upon gullible people to convince them to invest in the foundation. It has been held that where
one states that the future profits or income of an enterprise shall be a certain sum, but he actually
knows that there will be none, or that they will be substantially less than he represents, the statement
constitutes actionable fraud where the hearer believes him and relies on the statement to his
injury.
[28]
That there was no profit forthcoming can be clearly deduced from the fact that the foundation
was not engaged nor authorized to engage in any lucrative business to finance its operation. It was not
shown that it was the recipient of donations or bequest with which to finance its “double or triple your
money” scheme, nor did it have any operating capital to speak of when it started operations.
Parenthetically, what appellants offered the public was a “Ponzi scheme,” an investment program
that offers impossibly high returns and pays these returns to early investors out of the capital
contributed by later investors.
[29]
Named after Charles Ponzi who promoted the scheme in the 1920s, the
original scheme involved the issuance of bonds which offered 50% interest in 45 days or a 100% profit if
held for 90 days. Basically, Ponzi used the money he received from later investors to pay extravagant
rates of return to early investors, thereby inducing more investors to place their money with him in the
false hope of realizing this same extravagant rate of return themselves. This was the very same scheme
practiced by the Panata Foundation.
However, the Ponzi scheme works only as long as there is an ever-increasing number of new
investors joining the scheme. To pay off the 50% bonds Ponzi had to come up with a one-and-a-half
times increase with each round. To pay 100% profit he had to double the number of investors at each
stage, and this is the reason why a Ponzi scheme is a scheme and not an investment strategy. The
progression it depends upon is unsustainable. The pattern of increase in the number of participants in
the system explains how it is able to succeed in the short run and, at the same time, why it must fail in
the long run. This game is difficult to sustain over a long period of time because to continue paying the
promised profits to early investors, the operator needs an ever larger pool of later investors.
[30]
The idea
behind this type of swindle is that the “con-man” collects his money from his second or third round of
investors and then absconds before anyone else shows up to collect. Necessarily, these schemes only
last weeks, or months at most.
[31]

Note should also be taken of the fact that appellants used “slots” in their operation. These slots are
actually securities,
[32]
the issuance of which needs the approval of the Securities and Exchange
Commission. Knowing fully well that the S.E.C. would not approve the issuance of securities by a non-
stock, non-profit organization, the operators of the Ponzi scheme, nevertheless, applied for registration
as a foundation, an entity not allowed to engage in securities.
Finally, if the foundation were indeed legitimate, the incorporators, outside of the members of the
Francisco family, would not have escaped from the clutches of the law. If the foundation and its
investment scheme were legal, then it behooved them to come out and testify for their own
exoneration. The wicked flee when no man pursueth: but the righteous are bold as a lion.
[33]

In their defense, appellants would shift the blame on the investors. Invoking the legal principle
of caveat emptor, they maintain that it was the investors’ own greed that did them in, implying that the
depositors should have known that no sensible business could afford to pay such extravagant
returns. Having investigated the foundation and its activities, the investors should fault themselves, not
the appellants, for investing in the foundation despite the patent impossibility of its claims.
The contention is untenable. The fact that the buyer makes an independent investigation or
inspection has been held not to preclude him from relying on the representation made by the seller
where the seller has superior knowledge and the falsity of such representation would not be apparent
from such examination or inspection, and, a fortiori, where the efforts of a buyer to learn the true
profits or income of a business or property are thwarted by some device of the seller, such efforts have
been held not to preclude a recovery.
[34]
It has often been held that the buyer of a business or property
is entitled to rely on the seller’s statements concerning its profits, income or rents. The rule — that
where a speaker has knowingly and deliberately made a statement concerning a fact the falsity of which
is not apparent to the hearer, and has thus accomplished a fraudulent result, he cannot defend against
the fraud by proving that the victim was negligent in failing to discover the falsity of the statement — is
said to be peculiarly applicable where the owner of the property or a business intentionally makes a
false statement concerning its rents, profits or income. The doctrine of caveat emptor has been held
not to apply to such a case.
[35]

The second assignment of error is likewise devoid of merit. Appellants deny the existence of a
conspiracy in the perpetration of the fraudulent scheme, charging that mere relationship does not prove
conspiracy. Guillermo Francisco further maintains that he was not even an incorporator of the
foundation.
The evidence adduced by the prosecution confirms the existence of a conspiracy among the
appellants in committing the crime charged. The fact that Guillermo Francisco was not an incorporator
of the foundation does not make him any less liable for the crime charged. By his own admission, he
participated in the foundation’s activities by serving as its paymaster. Because he is father and husband
to three of the organizers of the foundation, it is not farfetched to presume that he was aware of its
operations. By his active cooperation, he showed a community of design with the incorporators of the
foundation, thereby making him a co-conspirator and equally liable for the crime charged. His voluntary
and indispensable cooperation was a concatenation of the criminal acts performed by his co-
accused.
[36]
In this regard, appellant Guillermo Francisco is not being implicated as a co-conspirator
solely because he is the father of the principal proponent of the Ponzi scheme. He is held liable as a
conspirator because of his indispensable act of being the paymaster of the foundation.
Likewise, Norma Francisco’s bare denial cannot exempt her from complicity. Denials of an accused
cannot be accorded greater evidentiary weight than the positive declarations of credible witnesses who
testify on affirmative matters.
[37]
Moreover, her efforts to show that she was a mere housewife who
simply helped in her daughter’s “business” is refuted by the prosecution witnesses. Ruth Jalover
testified:
“Q: Madam Witness, do you know a person by the name of Norma Francisco?
A: Yes sir.
Q: And how did you come to know her Madam Witness?
A: She is my co-employee at the Panata Foundation sir.
Q: What was her job in the Panata Foundation?
A: She was the one who received the money from our tellers every afternoon.”
[38]

Sylvia Magnaye, on the other hand, testified:
“Q: Madam Witness, do you know a person by the name of Norma Francisco?
A: Yes sir.
Q: How did you come to know her Madam Witness?
A: She is our former cashier sir.
Q: In the Panata Foundation?
A: Yes sir.”
[39]

On cross-examination, she further testified:
“Q: Now, I would like to direct your attention also to the other accused, Norma Francisco. You stated
that she is your cashier, do you remember having done that?
A: Yes sir.
Q: When you say she is the cashier, do you mean to say that she is the one who pays out money or
amounts to the employees Madam Witness?
A: Yes sir.”
[40]

Aside from being the cashier, Norma Francisco was also an incorporator of the
foundation. Likewise, the money invested in the foundation was deposited in joint bank accounts in
Priscilla Balasa’s name and hers. Norma Francisco’s activities would thus show a community of design
with the other accused making her a co-conspirator and equally liable for the crime charged. Her
voluntary and indispensable cooperation concurred with the criminal acts performed by her co-accused.
As for Analina Francisco, however, the evidence adduced as to her complicity in the nefarious
scheme is far from conclusive. While she was an incorporator and treasurer of the foundation, there is
no denying the fact that she is a deaf-mute. As such, she is incapable of communicating and conveying
her thoughts to the complaining witnesses and other depositors. This casts serious doubt on whether
she could be deemed to have similarly conspired and confederated with the other accused. As Branch
52 pointed out, on paper she might have been in the thick of the foundation’s operation — being an
incorporator and treasurer. We are not, however, convinced that she was actually involved in the
sinister scheme. In fact, she was given the manual task of typing papers, despite her being the treasurer
of the foundation. Her disability might have been the principal reason for giving her that job – she was
literally deaf and mute to the nefarious activities going on in the foundation that she did not pose a
danger to it. Furthermore, it is well settled that where the acts of an accused are capable of two
interpretations, that which is in consonance with innocence should prevail.
With respect to the third assignment of error, appellants cannot raise the defense of double
jeopardy for which the following requisites must concur: (1) a first jeopardy must have attached prior to
the second; (2) the first jeopardy must have been validly terminated; (3) the second jeopardy must be
for the same offense, or the second offense includes or is necessarily included in the offense charged in
the first information, or is an attempt to commit the same or a frustration thereof.
[41]
In the instant case,
the offense charged in Criminal Case No. 8429 is different from the offense charged in the other cases.
While these cases arose out of the same scheme, the fraudulent acts charged were committed against
different persons, hence they do not constitute the same offense.
Lastly, appellants assert that they cannot be convicted under P.D. No. 1689. They contend that the
following requisites must concur for conviction under P.D. No. 1689: (1) that estafa is committed under
Articles 315 or 316 of the Revised Penal Code; (2) by a syndication of five or more persons; (3) against a)
stockholders or members of rural banks, cooperatives, or samahang nayon; b) corporations or
associations the funds of which are solicited from the general public; and (4) such defraudation erodes
the confidence of the public in the banking and cooperative systems, contravenes public interest, and
(5) constitutes economic sabotage that threatens the stability of the nation.”
[42]

In support of their argument, appellants point out that there could not have been economic
sabotage under the facts of the case because the total amount of P125,400.00 allegedly embezzled “by
the other accused (not herein appellants),” did not weaken or threaten national economic stability. To
emphasize that point, appellants enumerate the revenue collections of Palawan and Puerto Princesa
City, “for dearth of a better reference,” from 1987 to 1992 showing that the revenue collections for
1989 alone amounted to P75,002,499,19. Appellants assert that as compared to such revenue
collection in 1989, the amount allegedly embezzled was negligible. As such, the crime committed in this
case was not of the same genre as the “Agrix” and “Dewey Dee” scams that “spurred the birth of P.D.
No. 1689.”
[43]

Appellants, in a desperate attempt to avoid conviction, grasp at straws. The law upon which
appellants have been charged and convicted reads as follows:
PRESIDENTIAL DECREE NO. 1689
INCREASING THE PENALTY FOR CERTAIN FORMS OF SWINDLING OR ESTAFA.
WHEREAS, there is an upsurge in the commission of swindling and other forms of frauds in rural banks,
cooperatives, “samahang nayon(s)”, and farmers’ associations or corporations/associations operating
on funds solicited from the general public;
WHEREAS, such defraudation or misappropriation of funds contributed by stockholders or members of
such rural banks, cooperatives, “samahang nayon(s)”, or farmers’ associations, or of funds solicited by
corporations/associations from the general public, erodes the confidence of the public in the banking
and cooperative system, contravenes the public interest, and constitutes economic sabotage that
threatens the stability of the nation;
WHEREAS, it is imperative that the resurgence of said crimes be checked, or at least minimized, by
imposing capital punishment on certain forms of swindling and other frauds involving rural banks,
cooperatives, “samahang nayon(s)”, farmers’ associations or corporations/associations operating on
funds solicited from the general public;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby decree and order as follows:
SEC. 1. Any person or persons who shall commit estafa or other forms of swindling as defined in Article
315 and 316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if
the swindling (estafa) is committed by a syndicate consisting of five or more persons formed with the
intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme, and the
defraudation results in the misappropriation of moneys contributed by stockholders, or members of
rural banks, cooperatives, “samahang nayon(s)”, or farmers associations, or of funds solicited by
corporations/associations from the general public.
When not committed by a syndicate as above defined, the penalty imposable shall be reclusion
temporal to reclusion perpetua if the amount of the fraud exceeds 100,000 pesos.
SEC. 2. This decree shall take effect immediately.
DONE in Manila, Philippines, this 6
th
day of April, in the year of Our Lord, nineteen hundred and eighty.
Under this law, the elements of the crime are: (a) estafa or other forms of swindling as defined in
Articles 315 and 316 of the Revised Penal Code is committed; (b) the estafa or swindling is committed by
a syndicate, and (c) defraudation results in the misappropriation of moneys contributed by stockholders,
or members of rural banks, cooperatives, “samahang nayon(s),” or farmers associations, or of funds
solicited by corporations/associations from the general public. These are the only elements of the crime
under Section 1 of the decree. The two other “ingredients” added by appellants to constitute the crime
of economic sabotage under P.D. No. 1689 have been taken from the “whereas” clause or preamble of
the law. A preamble is not exactly an essential part of an act as it is an introductory or preparatory
clause that explains the reasons for the enactment, usually introduced by the word
“whereas.”
[44]
InPeople v. Purisima,
[45]
we explained that the preamble serves as the key to the intent
and spirit of the decree. It enumerates the facts or events justifying the promulgation of the decree and
the sanctions for the acts prohibited therein. As such, although it is an aid in interpretation, the
preamble of an act or decree is not the law subject thereof. Appellants’ novel theory must, therefore, be
given short shrift by this Court.
Assuming arguendo that the preamble was part of the statute, appellants’ contention that they
should not be held criminally liable because it was not proven that their acts constituted economic
sabotage threatening the stability of the nation remains too flimsy for extensive discussion. As the
preamble of P.D. No. 1689 shows, the act prohibited therein need not necessarily threaten the stability
of the nation. It is sufficient that it “contravenes public interest.” Public interest was affected by the
solicitation of deposits under a promise of substantial profits, as it was people coming from the lower
income brackets who were victimized by the illegal scheme.
Similarly, the fact that the entity involved was not a rural bank, cooperative, samahang nayon or
farmers’ association does not take the case out of the coverage of P.D. No. 1689. Its third “whereas
clause” states that it also applies to other “corporations/associations operating on funds solicited from
the general public.” The foundation fits into these category as it “operated on funds solicited from the
general public.” To construe the law otherwise would sanction the proliferation of minor-league
schemers who operate in the countryside. To allow these crimes to go unabated could spell disaster for
people from the lower income bracket, the primary target of swindlers.
Again, P.D. No. 1689 penalizes offenders with life imprisonment to death regardless of the amount
involved, provided that a syndicate committed the crime. A syndicate is defined in the same law as
“consisting of five or more persons formed with the intention of carrying out the unlawful or illegal act,
transaction, enterprise or scheme.” If the offenders are not members of a syndicate, they shall
nevertheless be held liable for the acts prohibited by the law but they shall be penalized by reclusion
temporal to reclusion perpetua if the amount of the fraud is more than one hundred thousand pesos
(P100,000.00).
In the instant case, a syndicate perpetrated the Ponzi scheme. The evidence shows that at least
five persons — Priscilla Balasa, Normita Visaya, Norma Francisco, Guillermo Francisco, and the other
incorporators of the foundation — collaborated, confederated and mutually helped one another in
directing the foundation’s activities.
In its decision in Criminal Case Nos. 8428 and 8734, Branch 50 found that the “accused
numbering 5 who composed the Francisco Family together with others acted and operated as a
syndicate as defined under P.D. No. 1689 and should be held liable therefor.”
[46]
However, it imposed
the penalty of reclusion perpetua, the penalty imposable under the second paragraph of Section 1 of
P.D. No. 1689 — where the offenders are not members of a syndicate and the amount involved is more
than P100,000.00. The existence of a syndicate having been proved, the crime falls under the first
paragraph of Section 1 of P.D. No. 1689, with an imposable penalty of life imprisonment to
death. Hence, the imposition of reclusion perpetua is incorrect. Given the absence of aggravating or
mitigating circumstances, the lesser penalty, or life imprisonment, should have been meted out.
[47]

Branch 52, likewise, ruled that the accused committed the offense of estafa by a syndicate under
P.D. No. 1689. Therefore appellants, due to the absence of mitigating or aggravating circumstances,
should have been punished with life imprisonment. However, in the dispositive portion of its decision in
the four cases assigned to it, Branch 52 imposed the penalty of reclusion perpetua instead.
The Court finds this an opportune time to restate that the penalties of life imprisonment
and reclusion perpetua are not the same. Thus:
“While `life imprisonment’ may appear to be the English translation of reclusion perpetua, in reality, it
goes deeper than that. First, `life imprisonment’ is invariably imposed for serious offenses penalized by
special laws, while reclusion perpetua is prescribed under The Revised Penal Code. Second, `life
imprisonment,’ unlike reclusion perpetua, does not carry with it any accessory penalty. Third, `life
imprisonment’ does not appear to have any definite extent or duration, while reclusion perpetua entails
imprisonment for at least thirty (30) years after which the convict becomes eligible for pardon, although
the maximum period thereof shall in no case exceed forty (40) years.”
[48]

WHEREFORE, premises considered, the decisions appealed from are hereby AFFIRMED in so far as
appellants GUILLERMO and NORMA FRANCISCO are convicted for violation of the first paragraph of
Section 1 of Presidential Decree No. 1689 and ordered to restitute to complainants the amounts they
have been defrauded, subject to the MODIFICATION that appellants GUILLERMO and NORMA
FRANCISCO shall each suffer the penalty of life imprisonment for each violation of the same law under
the corresponding criminal cases. Appellant ANALINA FRANCISCO is hereby ACQUITTED of the crimes
charged under Criminal Case Nos. 8428 and 8734 on ground of reasonable doubt and her immediate
release from custody is ordered unless she is being held on other legal grounds.
Let a copy of this Decision be furnished the Department of Justice and the Philippine National
Police in order that the arrest of Priscilla Balasa, Normita Visaya and the others who have so far eluded
the law shall be effected with dispatch.
SO ORDERED.

G.R. No. 105213 December 4, 1996
ERLINDA DE LA CRUZ, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

PANGANIBAN, J.:p
Denial of the instant appeal is appropriate in light of the well-entrenched doctrine upholding
factual findings of the trial court when affirmed by the Court of Appeals. This Court likewise
takes occasion to reiterate the computation of the indeterminate penalty to be applied in estafa
cases where the amount defrauded exceeds P22,000.00.
This petition for review on certiorari seeks a review and reversal of the February 28, 1992
Decision
1
of the respondent Court of Appeals
2
which affirmed petitioner's conviction for estafa
under Article 315, paragraph 2(a) of the Revised Penal Code. Insisting on her innocence,
petitioner claims that the aforesaid Decision is "contrary to the rules of evidence and
established jurisprudence".
3

The Facts
On February 21, 1990, the City Prosecutor of Quezon City filed an Information charging
petitioner with the crime of estafa, thus:
4

That in or about and during the period comprised from August 28, 1989 to September 4,
1989, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused with intent of gain, by means of false pretenses or fraudulent
acts executed prior to or simultaneously with the commission of the fraud, did then and
there wilfully, unlawfully and feloniously defraud one VICTOR V. BELLOSILLO, in the
following manner, to wit: on the dates and place aforementioned, said accused by
means of false manifestations and fraudulent representations to the effect that she had
the power, influence and capacity to secure and effect the release of five (5) container
vans of used engines of different brands with the Bureau of Customs, knowing said
manifestations and representations to be false and fraudulent, induced the said
complainant to give and deliver, as in fact, the latter gave and delivered to said accused
the total sum of P715,000.00, Philippine Currency, as payment for the demurrage and
storage dues for the five (5) container vans of used engines, which amount once in
possession and far from complying with her aforesaid obligation, despite repeated
demands therefor, with intent to defraud, the said accused misapplied, misappropriated
and converted the same to her own personal use and benefits, to the damage and
prejudice of said offended party in the total amount aforementioned and in such
amount as may be awarded to him under the provisions of the New Civil Code.
The respondent Court adopted the statement of facts prepared by the trial court,
5
as follows:
6

Sometime in August, 1989, the private complainant was introduced to the accused by
Johny Cruz and Gabby Viudez at the Maxim's Restaurant located at the corner of T.M.
Kalaw Street and Roxas Boulevard, Manila.
This meeting resulted into the accused proposing to the private complainant a business
transaction which was reduced into an Agreement of Undertaking dated August 16,
1989, between them, whereby the accused, as seller, undertook to cause the release
from the Bureau of Customs of 832 pieces of used gasoline engines and spare parts
which the private complainant, as buyer, agreed to pay for P700,000.00. (Exh. 1).
As agreed therein, after the accused explained to the private complainant the procedure
of the transaction, the private complainant paid to the accused the amount of
P300,000.00, upon the signing of the agreement on August 16, 1989, the balance of
P400,000.00, payable within three (3) day(s) after the date of the completion of the
delivery of the merchandise. (Exh. l-E).
The next day, the accused and the private complainant met at Gate I of the South
Harbor to facilitate the release of the merchandise. Because the merchandise cannot be
released for lack of certain signatures, the accused did not pay the storage fees to the 7-
R Port Services, Inc. at the Port of Manila, and she, consequently, told the private
complainant to wait for three (3) days. But the private complainant cannot wait.
Consequently, the Agreement of Undertaking was not consummated.
So, the accused, showing the bill of lading to the private complainant, propositioned (to)
him that she will, instead, work for the release of used engines contained in five (5)
container vans which she pointed to him.
The private complainant told the accused that he will think about it.
Later, however, the accused was able to convince the private complainant after telling
him that an importer who owns the five (5) vans will pay her the amount of P1.8 million
after their release which she can easily do so as a custom's broker considering that she
has influence and connections in the Bureau of Customs having been connected there
as a representative of a broker. She told the private complainant that if he will fund the
payment of the demurrage and storage fees of the five (5) container vans, his money
will be doubled.
For this purpose, the accused gave to the private complainant a calling card wherein it is
stated that she is the General Manager of the E.B. Gardiola Customs Brokerage, the
licensed broker.
Because of these representations made by the accused to the private complainant, the
latter agreed to fund the release of the five (5) container vans containing used engines.
As a consequence, the private complainant, in addition to the amount of P300,000.00
which was already given by the private complainant to the accused because of the
Agreement of Undertaking, gave an additional amount of P100,000.00 to the accused at
Santie's Retaurant at Timog Avenue, Quezon City, for which the accused signed a receipt
for P400,000.00 on August 28, 1989, as having received the said amount from the
private complainant as expenses for the payment of demurrage and storage fees for the
release of five (5) container vans of used gasoline engines from the Bureau of Customs,
to be delivered on or before that week. (Exh. A, Exh. 2).
The accused failed, however, to deliver the used engines as he (sic) committed. And,
when the private complainant asked her why, the accused said that the transaction was
not yet facilitated at the Bureau of Customs.
Meanwhile, the accused also interested the private complainant for the release of a
Mercedes Benz car which she said can be done together with the five (5) container vans
of used engines, if the additional amount of P140,000.00 is given by the private
complainant.
The private complainant raised this amount by pawning certain valuables, for which the
accused signed a receipt on August 31, 1989, for P140,000.00, as expenses for
demurrage and storage fees for the release of the Mercedes Benz car. (Exh. B, Exh. 4).
But, still the Mercedes Benz car and the five (5) container vans of used engines were not
delivered by the accused, on the excuse that there was still lacking the amount of
P175,000.00 for demurrage and storage fees.
The private complainant also gave this amount to the accused who signed a receipt for
P175,000.00, on September 4, 1989, as additional storage fees of the five (5) container
vans for used engines. (Exh. C, Exh. 3).
But neither the five (5) container vans of used engines or the Mercedes Benz car was
delivered by the accused to the private complainant up to the present, notwithstanding
her promises to do so, and inspite of the repeated demands from the private
complainant.
The trial court, in its decision dated November 29, 1990, found petitioner guilty:
7

ACCORDINGLY, judgment is hereby rendered convicting the accused, ERLINDA DE LA
CRUZ, of the crime of Estafa, defined and penalized in Article 315, paragraph 2 (a) of the
Revised Penal Code, and in accordance therewith, taking into consideration the
Indeterminate Sentence Law, there being no mitigating or aggravating circumstances
which attended the commission of the offense, the said accused is sentenced to suffer
an indeterminate penalty of imprisonment of from FOUR (4) YEARS and TWO (2)
MONTHS of prision correccionalin its medium period, as the minimum, to EIGHT (8)
YEARS of prision mayor in its minimum period, as the maximum, plus 69 years
considering that the amount defrauded by the accused exceeds the sum of P22,000.00,
computed at one (1) year for each additional P10,000.00 out of the P693,000.00 excess
thereof, but the penalty to be suffered by the accused shall not exceed twenty (20)
years; with all the accessory penalties provided for by law; to indemnify private
complainant Victor B. Bellosillo the amount of P715,000.00, and to pay the costs.
Petitioner appealed the foregoing judgment of conviction to respondent Court. But finding her
allegations superficial, contradicted by the sincere and candid testimony of the complainant and
unsupported by the evidence established on record, respondent Court disposed of the appeal as
follows:
8

WHEREFORE, the judgment of conviction herein appealed from is AFFIRMED, and the
indeterminate penalty imposed by the lower court on appellant is clarified so as to read:
From four (4) years and two (2) months of prision correcional as
minimum to 20 years of reclusion temporal as maximum.
The same judgment is AFFIRMED in all other respects, with costs against appellant
Erlinda de la Cruz.
Petitioner's motion for reconsideration was denied by respondent Court in two Resolutions
dated April 23, 1992 and May 15, 1992.
9

The Issues
The petitions flails the respondent Court for the following errors:
10

1. Respondent Court of Appeals erred in holding that accused employed false
pretense or influence and connection as a way of defrauding the private
complainant.
2. The respondent Court of Appeals erred in holding that the business
transaction entered into by the accused with the private complainant was
fraudulently designed to damage the latter.
3. Respondent Court of Appeals erred in holding that there was no error in the
judgment of the trial court.
In her petition, which she adopted as her memorandum,
11
petitioner discusses these alleged
errors simultaneously. At bottom, she merely challenges the factual findings of the trial court, as
affirmed by the respondent Court of Appeals. In her 3-page "Arguments and Discussions," she
claims that the "prosecution FAILED to prove its affirmative allegations in the indictment
regarding the elements of the crime as well as the attendant circumstances."
The Court's Ruling
Factual Findings Are Final and Binding
It is doctrinal that the findings of facts of the Court of Appeals affirming those of the trial court
are accorded great respect, even finality, by this Court. In Juan Castillo, et al. vs. Court of
Appeals, et al.,
12
we ruled that :
Prevailing jurisprudence uniformly holds that findings of facts of the trial court,
particularly when affirmed by the Court of Appeals, are binding upon this Court.
"The general rule is that factual findings of lower courts are
accorded respect by [the Supreme Court] on review of their
decisions. . . ." (Lim vs. Court of Appeals, 229 SCRA 616, 621
[February 3, 1994].)
". . . Findings of fact made by a trial court are accorded the
highest degree of respect by an appellate tribunal and, absent a
clear disregard of the evidence before it than can otherwise
affect the results of the case, those findings should not be
ignored . . ." (Navallo vs. Sandiganbayan, 234 SCRA 175, 185-186
[July 18, 1994].)
"The petition is bereft of merit and merely raises factual issues,
the determination of which is best left to the trial court. Well-
settled is the rule that findings of fact of the trial court and the
Court of Appeals are not to be disturbed on appeal and are
entitled to great weight and respect (Tay Chun Suy vs. Court of
Appeals, 229 SCRA 151 [1993]. . . ." (Verdejo vs. Court of
Appeals, 238 SCRA 781, 784 [December 5, 1994].)
"It is settled rule that the findings of fact of trial courts are given
great weight on appeal because they are in a better position to
examine the real evidence, and observe the demeanor of the
witnesses, and can therefore discern if they are telling the truth
or not. . . ." (People vs. Cabalhin, 231 SCRA 486, 496 [March 28,
1994].)
It is likewise very basic that only errors of law and not of fact are reviewable by this Court in petitions for
review oncertiorari under Rule 45, which is the very rule relied upon by petitioner.
Well settled is the rule that the jurisdiction of this Court in cases brought before it from
the Court of Appeals is limited to the review or revision of errors of law and not to
analyze or weigh the evidence all over again. The findings of fact of the Court of Appeals
are thus final and conclusive, except in some cases as where such findings are contrary
to those of the trial court, as in this case where the Court of Appeals and the trial court
are hopelessly opposed to each other on their respective findings concerning the issues
presented.
13

The issue raised is factual. As a rule, the jurisdiction of this Court in cases brought to it
from the Court of Appeals is limited to the review and revision of errors of law allegedly
committed by the appellate court, as its findings of fact are deemed conclusive. This
Court is not bound to analyze and weigh all over again the evidence already considered
in the proceedings below. This rule, however, is not without exceptions, one of which is
when there is a conflict between the factual findings of the Court of Appeals and the
trial court which necessitates a review of such factual findings.
14

If only for the above settled doctrines, this Court — considering the scant discussion and puerile
arguments raised by petitioner, whose counsel did not even bother to file a memorandum as
required in our Resolution of October 19, 1992 — could have given this petition short shrift and
could have dismissed the case outright. In any event and in the interest of justice, the Court
deliberated carefully on various aspects of the case and decided to discuss the merits of the case
in a full decision.
First Issue: Use of False Pretense or Influence Established
Petitioner contends that she employed no false pretense or fraudulent acts upon private
complainant. On the contrary, she insists that the parties merely entered into a partnership or
business transaction, and she could not be held liable for estafa for her failure to produce
profits. However, this contention was ably disposed of by the respondent Court, thus:
Accused-appellant insists in her brief that there was no false pretense on her part and
that she and the private complainant simply entered into a business transaction, and
this was admitted by the latter himself (p.14, her Brief). Yes, private complainant
admitted that he did enter into a business transaction with appellant, but this
transaction was induced and attended by her representations, which turned out to be
false, that she had strong influence and connections with the Bureau of Customs to
obtain release of the five (5) vans of merchandise in question by simply paying the
demurrage and storage charges, which she would pay with complainant's money, and
after their release, his money would be doubled. This, private complainant stated again
and again on direct examination, on cross, and in answering questions from the court,
with apparent sincerity and candor. We quote:
"When we met, she said she has strong influence and right connections
with the Bureau of Customs and she has brokerage." (p. 7, tsn Sept. 24,
1990)
"She sweet-talked me and was able to convince me. . . . She told me
that it will take only three working days, then it will be released. . . . She
was able to convince me by her sweet-talk. . . . I agreed and when
August 28, I gave out some money to her . . . P400,000.00 cash. . . ." (pp.
11-13, id.)
"Because Your Honor I was convinced by her sweet words.
. . . she just convinced me of her sweet word. . . . Yes, Your Honor. She
said that she have the right influence and connections. So I was
convinced by her. . . . I would just pay for the storage and demurrage
and the money would be multiplied by two (2)." (pp. 7-9, tsn Oct. 1990)
"What she says was if I gave her the money it will doubled, my money
will be double. . . . She (just) told me to produce money. She told me
she had influence and connection. That was our transaction." (p.
11, id.).
"Her participation was her influence." (p. 29, id.)
The elements of estafa are as follows: (1) that the accused defrauded another (a) by abuse of
confidence, or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary
estimation is caused to the offended party or third party.
15

Petitioner's deceit through false pretenses is clearly shown by her having assured private
complainant that she "possessed power, influence and qualifications" to cause the release of
the five (5) container vans of used engines. She made private complainant believe that his
money would be used to pay for storage and demurrage fees with the Bureau of Customs, and
yet she could not produce any proof that she had actually paid the amount to said government
office. As found by the respondent Court:
16

In fact, another cogent piece of evidence of the deception practiced by appellant on
private complainant is that while she claimed that she paid the latter's money to the
Bureau of Customs as demurrage and storage charges on the five (5) container vans in
question, when pressed by the lower court to produce the corresponding receipts, all
she could show at the next hearing was a receipt for P266,027.50 for the payment of
storage charges on five containers to 7-R Port Services, Inc. on September 8, 1989 (Exh.
"7"). But according to this receipt, the consignee of the containers on which storage
charges were paid was the "Ever Sun Coml (Commercial) Trading", and that the broker
of the shipment was "same", meaning, also Ever Sun Comml. Trading. The brokerage of
which appellant was the general manager was B. Gardiola Customs Brokerage (Exh.
"D"). Obviously, then, the receipt for storage charges Exh. "7" does not refer to any
transaction that appellant had as broker, and certainly, it had nothing to do with the five
(5) container vans involved in this case, and this is borne out by the fact that appellant
never mentioned in her entire testimony that the consignee of said five (5) container
vans in question was Ever Sun Coml. Trading. On the other hand, she claimed that she
was the broker of the importer of said five (5) container vans. If she was, why was she
unable to present any papers like the bill of lading and other shipping documents
covering said shipment?
Second Issue: Fraudulent Design Established
From the above, the ineludible conclusion is that petitioner received the money with no
intention of facilitating the release of the container vans and the car. Obviously, her
representation that she possessed influence was actually false and was resorted to by her to
deceive and inveigle the naive complainant into parting with his money. In estafa by means of
deceit under subdivision 2(a) of Article 315, the pretense of the accused that he possesses
power or influence is false.
1
7
Private complainant's testimony cannot be discredited merely because he initially admitted that
the money would be used for obtaining used engines, but later on claimed that said money
would be used to pay storage and demurrage fees. Petitioner herself admitted that she had
convinced the offended party to provide money to secure the delivery of 832 pieces of used
gasoline engines and spare parts contained in one van.
18
When this agreement fell through,
private complainant, by petitioner's fraudulent pretensions of alleged possession of power and
influence over the government authorities, was again persuaded to part with the additional
sums of P100,000.00, P140,000.00 and P175,000.00 on different occasions, in addition to the
P300,000.00 he had earlier advanced. The amount defrauded totalled P715,000.00, supposedly
used in payment of storage and demurrage fees of the five (5) container vans and one (1)
Mercedes Benz car.
From the above narration, we are fully convinced that both the fraudulent design utilized by the
petitioner, as well as the offense itself, had been proven beyond reasonable doubt. The act
committed by petitioner constitutes the crime of estafa defined and punished under Article 315,
par 2 (a) of the Revised Penal Code.
Penalty Applicable
The penalty for estafa depends on the amount defrauded. Article 315 of the Revised Penal Code
provides that "the penalty of prision correccional in its maximum period to prision mayor in its
minimum period (or imprisonment ranging from 4 years, 2 months and 1 day to 8 years), if the
amount of the fraud is over P12,000.00 but does not exceed P22,000.00 pesos, and if such
amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its
maximum period (6 years, 8 months and 21 days to 8 years), adding one year for each additional
P10,000.00 pesos; but the total penalty which may be imposed shall not exceed twenty years. In
such case, and in connection with the accessory penalties which may be imposed and for the
purpose of the other provisions of this Code, the penalty shall be termed prision mayor or
reclusion temporal, as the case may be."
19

Inasmuch as the amount of P715,000.00 is P693,000.00 more than the abovementioned
benchmark of P22,000.00, then, adding one year for each additional P10,000.00, the maximum
period of 6 years, 8 months and 21 days to 8 years of prision mayor minimum would be
increased by 69 years, as computed by the trial court. But the law categorically declares that the
maximum penalty should be not more than 20 years. The maximum penalty then shall not
exceed 20 years of reclusion temporal. Under the Indeterminate Sentence Law, the minimum
term of the indeterminate penalty should be within the range of the penalty next lower in
degree to that prescribed by the Code for the offense committed, which is prision correccional.
Finding no error in the penalty proposed by the Solicitor General and imposed by the
respondent Court, we thus sustain it.
WHEREFORE, premises considered, the petition is hereby DENIED for utter lack of merit, and the
Decision appealed from is AFFIRMED in toto.
SO ORDERED.
G.R. No. 75954 October 22, 1992
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DAVID G. NITAFAN, Presiding Judge, Regional Trial Court, Branch 52, Manila, and K.T. LIM alias
MARIANO LIM, respondents.

BELLOSILLO, J.:
Failing in his argument that B.P. 22, otherwise known as the "Bouncing Check Law", is
unconstitutional,
1
private respondent now argues that the check he issued, a memorandum check, is in
the nature of a promissory note, hence, outside the purview of the statute. Here, his argument must
also fail.
The facts are simple. Private respondent K.T. Lim was charged before respondent court with violation of
B.P. 22 in an Information alleging ––
That on . . . January 10, 1985, in the City of Manila . . . the said accused did then and
there wilfully, unlawfully and feloniously make or draw and issue to Fatima Cortez
Sasaki . . . Philippine Trust Company Check No. 117383 dated February 9, 1985 . . . in the
amount of P143,000.00, . . . well knowing that at the time of issue he . . . did not have
sufficient funds in or credit with the drawee bank . . . which check . . . was subsequently
dishonored by the drawee bank for insufficiency of funds, and despite receipt of notice
of such dishonor, said accused failed to pay said Fatima Cortez Sasaki the amount of said
check or to make arrangement for full payment of the same within five (5) banking days
after receiving said notice.
2

On 18 July 1986, private respondent moved to quash the Information of the ground that the facts
charged did not constitute a felony as B.P. 22 was unconstitutional and that the check he issued was a
memorandum check which was in the nature of a promissory note, perforce, civil in nature. On 1
September 1986, respondent judge, ruling that B.P. 22 on which the Information was based was
unconstitutional, issued the questioned Order quashing the Information. Hence, this petition for review
on certiorari filed by the Solicitor General in behalf of the government.
Since the constitutionality of the "Bouncing Check Law" has already been sustained by this Court
in Lozano v.Martinez
3
and the seven (7) other cases decided jointly with it,
4
the remaining issue, as
aptly stated by private respondent in his Memorandum, is whether a memorandum check issued
postdated in partial payment of a pre-existing obligation is within the coverage of B.P. 22.
Citing U.S. v. Isham,
5
private respondent contends that although a memorandum check may not differ
in form and appearance from an ordinary check, such a check is given by the drawer to the payee more
in the nature of memorandum of indebtedness and, should be sued upon in a civil action.
We are not persuaded.
A memorandum check is in the form of an ordinary check, with the word "memorandum", "memo" or
"mem" written across its face, signifying that the maker or drawer engages to pay the bona fide holder
absolutely, without any condition concerning its presentment.
6
Such a check is an evidence of debt
against the drawer, and although may not be intended to be presented,
7
has the same effect as an
ordinary check, 8 and if passed to the third person, will be valid in his hands like any other check.
9

From the above definition, it is clear that a memorandum check, which is in the form of an ordinary
check, is still drawn on a bank and should therefore be distinguished from a promissory note, which is
but a mere promise to pay. If private respondent seeks to equate memorandum check with promissory
note, as he does to skirt the provisions of B.P. 22, he could very well have issued a promissory note, and
this would be have exempted him form the coverage of the law. In the business community a
promissory note, certainly, has less impact and persuadability than a check.
Verily, a memorandum check comes within the meaning of Sec. 185 of the Negotiable Instruments Law
which defines a check as "a bill of exchange drawn on a bank payable on demand." A check is also
defined as " [a] written order or request to a bank or persons carrying on the business of banking, by a
party having money in their hands, desiring them to pay, on presentment, to a person therein named or
bearer, or to such person or order, a named sum of money," citing 2 Dan. Neg. Inst. 528; Blair
v. Wilson, 28 Gratt. (Va.) 170; Deener v. Brown,1 MacArth. (D.C.) 350; In re Brown, 2 Sto. 502, Fed. Cas.
No. 1,985. See Chapman v. White, 6 N.Y. 412, 57 Am. Dec 464.
10
Another definition of check is that is
"[a] draft drawn upon a bank and payable on demand, signed by the maker or drawer, containing an
unconditional promise to pay a sum certain in money to the order of the payee," citing State
v.Perrigoue, 81 Wash, 2d 640, 503 p. 2d 1063, 1066.
11

A memorandum check must therefore fall within the ambit of B.P. 22 which does not distinguish but
merely provides that "[a]ny person who makes or draws and issues any check knowing at the time of
issue that he does not have sufficient funds in or credit with the drawee bank . . . which check is
subsequently dishonored . . . shall be punished by imprisonment . . ." (Emphasis supplied ).
12
Ubi lex no
distinguit nec nos distinguere debemus.
But even if We retrace the enactment of the "Bouncing Check Law" to determine the parameters of the
concept of "check", We can easily glean that the members of the then Batasang Pambansa intended it
to be comprehensive as to include all checks drawn against banks. This was particularly the ratiocination
of Mar. Estelito P. Mendoza, co-sponsor of Cabinet Bill No. 9 which later became B.P. 22, when in
response to the interpellation of Mr. Januario T. Seño, Mr. Mendoza explained that the draft or order
must be addressed to a bank or depository,
13
and accepted the proposed amendment of Messrs.
Antonio P. Roman and Arturo M. Tolentino that the words "draft or order", and certain terms which
technically meant promissory notes, wherever they were found in the text of the bill, should be deleted
since the bill was mainly directed against the pernicious practice of issuing checks with insufficient or no
funds, and not to drafts which were not drawn against banks.
14

A memorandum check, upon presentment, is generally accepted by the bank. Hence it does not matter
whether the check issued is in the nature of a memorandum as evidence of indebtedness or whether it
was issued is partial fulfillment of a pre-existing obligation, for what the law punishes is the issuance
itself of a bouncing check
15
and not the purpose for which it was issuance. The mere act of issuing a
worthless check, whether as a deposit, as a guarantee, or even as an evidence of a pre-existing debt,
is malum prohibitum.
16

We are not unaware that a memorandum check may carry with it the understanding that it is not be
presented at the bank but will be redeemed by the maker himself when the loan fall due. This
understanding may be manifested by writing across the check "Memorandum", "Memo" or "Mem."
However, with the promulgation of B.P. 22, such understanding or private arrangement may no longer
prevail to exempt it from penal sanction imposed by the law. To require that the agreement surrounding
the issuance of check be first looked into and thereafter exempt such issuance from the punitive
provision of B.P. 22 on the basis of such agreement or understanding would frustrate the very purpose
for which the law was enacted — to stem the proliferation of unfunded checks. After having effectively
reduced the incidence of worthless checks changing hands, the country will once again experience the
limitless circulation of bouncing checks in the guise of memorandum checks if such checks will be
considered exempt from the operation of B.P. 22. It is common practice in commercial transactions to
require debtors to issue checks on which creditors must rely as guarantee of payment. To determine the
reasons for which checks are issued, or the terms and conditions for their issuance, will greatly erode
the faith the public responses in the stability and commercial value of checks as currency substitutes,
and bring about havoc in trade and in banking communities.
17

WHEREFORE, the petition is GRANTED and the Order of respondent Judge of 1 September 1986 is SET
ASIDE. Consequently, respondent Judge, or whoever presides over the Regional Trial Court of Manila,
Branch 52, is hereby directed forthwith to proceed with the hearing of the case until terminated.
SO ORDERED.

G.R. No. 87416 April 8, 1991
CECILIO S. DE VILLA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, HONORABLE JOB B. MADAYAG,
and ROBERTO Z. LORAYES, respondents.
San Jose Enriquez, Lacas Santos & Borje for petitioner.
Eduardo R. Robles for private respondent.

PARAS, J.:p
This petition for review on certiorari seeks to reverse and set aside the decision * of the Court of
Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071 entitled "Cecilio S. de Villa vs. Judge
Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the petition for certiorari filed therein.
The factual backdrop of this case, as found by the Court of Appeals, is as follows:
On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional Trial
Court of the National Capital Judicial Region (Makati, Branch 145) with violation of Batas
Pambansa Bilang 22, allegedly committed as follows:
That on or about the 3rd day of April 1987, in the municipality of
Makati, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, did, then and there
willfully, unlawfully and feloniously make or draw and issue to ROBERTO
Z. LORAYEZ, to apply on account or for value a Depositors Trust
Company Check No. 3371 antedated March 31, 1987, payable to herein
complainant in the total amount of U.S. $2,500.00 equivalent to
P50,000.00, said accused well knowing that at the time of issue he had
no sufficient funds in or credit with drawee bank for payment of such
check in full upon its presentment which check when presented to the
drawee bank within ninety (90) days from the date thereof was
subsequently dishonored for the reason "INSUFFICIENT FUNDS" and
despite receipt of notice of such dishonor said accused failed to pay said
ROBERTO Z. LORAYEZ the amount of P50,000.00 of said check or to
make arrangement for full payment of the same within five (5) banking
days after receiving said notice.
After arraignment and after private respondent had testified on direct examination,
petitioner moved to dismiss the Information on the following grounds: (a) Respondent
court has no jurisdiction over the offense charged; and (b) That no offense was
committed since the check involved was payable in dollars, hence, the obligation
created is null and void pursuant to Republic Act No. 529 (An Act to Assure Uniform
Value of Philippine Coin and Currency).
On July 19, 1988, respondent court issued its first questioned orders stating:
Accused's motion to dismiss dated July 5, 1988, is denied for lack of
merit.
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided
they are either drawn and issued in the Philippines though payable
outside thereof, or made payable and dishonored in the Philippines
though drawn and issued outside thereof, are within the coverage of
said law. The law likewise applied to checks drawn against current
accounts in foreign currency.
Petitioner moved for reconsideration but his motion was subsequently denied by
respondent court in its order dated September 6, 1988, and which reads:
Accused's motion for reconsideration, dated August 9, 1988, which was
opposed by the prosecution, is denied for lack of merit.
The Bouncing Checks Law is applicable to checks drawn against current
accounts in foreign currency (Proceedings of the Batasang Pambansa,
February 7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City
Fiscal) Jesus F. Guerrero's The Ramifications of the Law on Bouncing
Checks, p. 5). (Rollo, Annex "A", Decision, pp. 20-22).
A petition for certiorari seeking to declare the nullity of the aforequoted orders dated July 19, 1988 and
September 6, 1988 was filed by the petitioner in the Court of Appeals wherein he contended:
(a) That since the questioned check was drawn against the dollar account of petitioner
with a foreign bank, respondent court has no jurisdiction over the same or with
accounts outside the territorial jurisdiction of the Philippines and that Batas Pambansa
Bilang 22 could have not contemplated extending its coverage over dollar accounts;
(b) That assuming that the subject check was issued in connection with a private
transaction between petitioner and private respondent, the payment could not be
legally paid in dollars as it would violate Republic Act No. 529; and
(c) That the obligation arising from the issuance of the questioned check is null and void
and is not enforceable with the Philippines either in a civil or criminal suit. Upon such
premises, petitioner concludes that the dishonor of the questioned check cannot be said
to have violated the provisions of Batas Pambansa Bilang 22. (Rollo, Annex "A", Decision,
p. 22).
On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion of which reads:
WHEREFORE, the petition is hereby dismissed. Costs against petitioner.
SO ORDERED. (Rollo, Annex "A", Decision, p. 5)
A motion for reconsideration of the said decision was filed by the petitioner on February 7, 1989 (Rollo,
Petition, p. 6) but the same was denied by the Court of Appeals in its resolution dated March 3, 1989
(Rollo, Annex "B", p. 26).
Hence, this petition.
In its resolution dated November 13, 1989, the Second Division of this Court gave due course to the
petition and required the parties to submit simultaneously their respective memoranda (Rollo,
Resolution, p. 81).
The sole issue in this case is whether or not the Regional Trial Court of Makati has jurisdiction over the
case in question.
The petition is without merit.
Jurisdiction is the power with which courts are invested for administering justice, that is, for hearing and
deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA 147 [1988]).
Jurisdiction in general, is either over the nature of the action, over the subject matter, over the person
of the defendant, or over the issues framed in the pleadings (Balais vs. Balais, 159 SCRA 37 [1988]).
Jurisdiction over the subject matter is determined by the statute in force at the time of commencement
of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]).
The trial court's jurisdiction over the case, subject of this review, can not be questioned.
Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that:
Sec. 10. Place of the commission of the offense. The complaint or information is
sufficient if it can be understood therefrom that the offense was committed or some of
the essential ingredients thereof occured at some place within the jurisdiction of the
court, unless the particular place wherein it was committed constitutes an essential
element of the offense or is necessary for identifying the offense charged.
Sec. 15. Place where action is to be instituted. (a) Subject to existing laws, in all criminal
prosecutions the action shall be instituted and tried in the court of the municipality or
territory where the offense was committed or any of the essential ingredients thereof
took place.
In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the case of Lim vs. Rodrigo, 167
SCRA 487 [1988]), the Supreme Court ruled "that jurisdiction or venue is determined by the allegations
in the information."
The information under consideration specifically alleged that the offense was committed in Makati,
Metro Manila and therefore, the same is controlling and sufficient to vest jurisdiction upon the Regional
Trial Court of Makati. The Court acquires jurisdiction over the case and over the person of the accused
upon the filing of a complaint or information in court which initiates a criminal action (Republic vs.
Sunga, 162 SCRA 191 [1988]).
Moreover, it has been held in the case of Que v. People of the Philippines (154 SCRA 160 [1987] cited in
the case of People vs. Grospe, 157 SCRA 154 [1988]) that "the determinative factor (in determining
venue) is the place of the issuance of the check."
On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of Justice, citing the case
of People vs. Yabut (76 SCRA 624 [1977], laid down the following guidelines in Memorandum Circular
No. 4 dated December 15, 1981, the pertinent portion of which reads:
(1) Venue of the offense lies at the place where the check was executed and delivered;
(2) the place where the check was written, signed or dated does not necessarily fix the
place where it was executed, as what is of decisive importance is the delivery thereof
which is the final act essential to its consummation as an obligation; . . . (Res. No. 377, s.
1980, Filtex Mfg. Corp. vs. Manuel Chua, October 28, 1980)." (See The Law on Bouncing
Checks Analyzed by Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 &
12, October-December, 1983, p. 14).
It is undisputed that the check in question was executed and delivered by the petitioner to herein
private respondent at Makati, Metro Manila.
However, petitioner argues that the check in question was drawn against the dollar account of
petitioner with a foreign bank, and is therefore, not covered by the Bouncing Checks Law (B.P. Blg. 22).
But it will be noted that the law does not distinguish the currency involved in the case. As the trial court
correctly ruled in its order dated July 5, 1988:
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either
drawn and issued in the Philippines though payable outside thereof . . . are within the
coverage of said law.
It is a cardinal principle in statutory construction that where the law does not distinguish courts should
not distinguish. Parenthetically, the rule is that where the law does not make any exception, courts may
not except something unless compelling reasons exist to justify it (Phil. British Assurance Co., Inc. vs. IAC,
150 SCRA 520 [1987]).
More importantly, it is well established that courts may avail themselves of the actual proceedings of
the legislative body to assist in determining the construction of a statute of doubtful meaning (Palanca
vs. City of Manila, 41 Phil. 125 [1920]). Thus, where there is doubts as to what a provision of a statute
means, the meaning put to the provision during the legislative deliberation or discussion on the bill may
be adopted (Arenas vs. City of San Carlos, 82 SCRA 318 [1978]).
The records of the Batasan, Vol. III, unmistakably show that the intention of the lawmakers is to apply
the law to whatever currency may be the subject thereof. The discussion on the floor of the then
Batasang Pambansa fully sustains this view, as follows:
xxx xxx xxx
THE SPEAKER. The Gentleman from Basilan is recognized.
MR. TUPAY. Parliamentary inquiry, Mr. Speaker.
THE SPEAKER. The Gentleman may proceed.
MR. TUPAY. Mr. Speaker, it has been mentioned by one of the
Gentlemen who interpellated that any check may be involved, like U.S.
dollar checks, etc. We are talking about checks in our country. There are
U.S. dollar checks, checks, in our currency, and many others.
THE SPEAKER. The Sponsor may answer that inquiry.
MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this check
may be a check in whatever currency. This would not even be limited to
U.S. dollar checks. The check may be in French francs or Japanese yen or
deutschunorhs. (sic.) If drawn, then this bill will apply.
MR TUPAY. So it include U.S. dollar checks.
MR. MENDOZA. Yes, Mr. Speaker.
xxx xxx xxx
(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.
G.R. No. 108738 June 17, 1994
ROBERTO CRUZ, petitioner,
vs.
COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, respondents.
Arsenio N. Mercado for petitioner.
The Solicitor General for the People of the Philippines.

KAPUNAN, J.:
The sole issue to be resolved in the instant petition is whether or not petitioner is liable for violation of
Batas Pambansa Bilang 22 for issuing a check knowing he does not have credit with drawee bank and
thereafter claiming that the said check was not intended for circulation and negotiation, the same
having been issued only to serve as mere evidence or memorandum of indebtedness.
The relevant antecedents are as follows, viz:
Complaining witness Andrea Mayor is a businesswoman engaged, among others, in granting interest-
bearing loans and in rediscounting checks.
1
Sometime in 1987, she was introduced to herein petitioner,
Roberto Cruz who at that time was engaged in the business of selling ready-to-wear clothes at the Pasay
Commercial Center.
2
From then on, petitioner has been borrowing money from Mayor.
3
On March 15,
1989, petitioner borrowed from Andrea Mayor one hundred seventy six thousand pesos
(P176,000.00).
4
On April 6, 1989, Mayor delivered the said amount to petitioner himself in the latter’s
stall at the Pasay Commercial Center. Cruz, in turn, issued Premiere Bank Check No. 057848 postdated
April 20, 1989 for same amount.
5
When the check matured, complaining witness presented it to the
drawee bank for payment but the same was dishonored and returned for reason "account closed."
When notified of the dishonor, petitioner promised to pay his obligation in cash. No payment was made,
hence, an information for violation of Batas Pambansa Bilang 22 was filed against the petitioner.
6

Upon arraignment, petitioner entered a plea of not guilty.
7

At the pre-trial, petitioner admitted the existence of the check.
8

During trial, the prosecution presented two (2) witnesses, Andrea Mayor, herein complainant, and
Marcelo Ladao, a representative of Premiere Development Bank.
Andrea Mayor testified that she is a businesswoman engaged in the business, among others, of
rediscounting checks and lending money at an interest of 3% to 5% monthly; that she came to know the
accused Roberto Cruz through the latter’s sisters sometime in 1987; that the accused is engaged in the
RTW business at the Pasay Commercial Center; that she rediscounted some of the checks of the accused
in previous transactions as shown by Exhibits "C," "C-1" to "C-3," in the amounts of P20,000.00,
P5,000.00, P9,000.00, and P5,000.00 respectively, which were personal checks issued by the accused for
the sums he borrowed and which checks bounced when presented for payment but were paid in cash by
the accused when the latter was notified of the dishonor.
9

Complaining witness Andrea Mayor further testified that on March 15, 1989, accused told her that he
needed P176,000.00 and asked to be lent the said amount; that complainant gave the accused the said
amount at the latter’s store at the Pasay City Commercial Center; that accused, in turn, issued a
check
10
for the same amount; that the check was signed in her presence and she was told that accused
might be able to pay before the due date on April 20, 1989; that the check was dishonored upon
presentment by the drawee bank; that accused was notified of the dishonor and he promised to raise
the amount on May 15, 1989; that accused failed to make good his commitment, hence, she consulted a
lawyer and caused the preparation of a complaint.
11

Marcelo Ladao, a representative of Premiere Development Bank, testified that accused opened Current
Account No. 0101-00250-5 on May 15, 1987 and, accordingly, affixed three (3) signatures on the
signature card provided by the bank for account applicants; that the said account was closed on October
2, 1989 and that accused was duly advised of the said closure by the Branch Manager of the Pasay City
Branch. Ladao, likewise, identified the stamp marked on the face of the check in question, which stamp
indicated that the account of the depositor is already closed.
12
On cross-examination, the same witness
explained that the subject account was closed at the discretion of the branch manager and that closure
is normally a result of a series of checks issued without sufficient funds.
13

The accused testified in his defense and proffered the defense of denial. He denied (a) having issued the
subject check; (b) the signature "R. Cruz" appearing thereon as his; and (c) knowing complainant Andrea
Mayor and existence of previous transactions with her.
14
He declared that he saw the check in question
for the first time only on January 16, 1991 when it was showed to him by the fiscal and that he never
met Andrea Mayor before.
15
He admitted, however, opening Current Account No. 0101-00250-37 with
Premiere Development Bank.
16

The trial court rejected accused’s defense and rendered judgment as follows, to wit:
IN VIEW OF THE FOREGOING, accused is hereby found guilty beyond reasonable doubt
of the offense charged in the information, and conformably with the penal provision of
Batas Pambansa Blg. 22, accused is hereby sentenced to suffer the straight penalty of
one (1) year imprisonment and to indemnify the offended party in the amount of
P176,000.00, Philippine Currency. With costs.
17

Aggrieved by the ruling, petitioner appealed the case to the Court of Appeals.
On January 26, 1993, the Court of Appeals rendered judgment affirming the trial court’s decision.
18

Now petitioner comes to this Court by way of a petition for review on certiorari seeking the reversal of
the respondent court’s decision. Petitioner cites the following for allowance of his petition, viz:
A. Respondent Court Committed Reversible Error and Grave Abuse Of Discretion
Amounting To Lack Or Excess Of Jurisdiction in Affirming The Finding of The Trial Court
On The Basis Of Surmises, Conjectures and Unfounded Conclusions.
xxx xxx xxx
B. Respondent Court Gravely Erred In Holding The Petitioner Liable Under BP No. 22,
Despite Knowledge of the Complaining Witness That The Account Had Long been
Closed.
xxx xxx xxx
C. Respondent Court Gravely Erred In Holding That The "Complete Turnabout" of the
Petitioner, As Claimed By The Solicitor General, Rendered Petitioner’s Appeal Devoid of
Merit.
xxx xxx xxx
19

Petitioner, in this case, cannot seem to make up his mind. First, he denies having issued the questioned
check, then, he claims that when he issued the same, it was more in the nature of a memorandum of
indebtedness and, as such, does not fall within the purview of Batas Pambansa Blg. 22.
However, the issuance of the check subject of the present case is no longer at issue since the petitioner
himself, on appeal to the respondent court, admitted having issued the check after he received the
amount of P176,000.00 from the complaining witness. Therefore, the only issue in the case at bench is
whether or not petitioner can be convicted for violation of B.P. 22.
We answer in the affirmative.
A check issued as an evidence of debt, though not intended to be presented for payment has the same
effect of an ordinary check,
20
hence, falls within the ambit of B.P. 22 which merely provides that "any
person who makes or draws and issues any check to apply for an account or for value, knowing at the
time of issue that he does not have sufficient funds in or credit with the drawee bank . . . which check is
subsequently dishonored by the drawee bank for insufficiency of funds on credit . . . shall be punished
by imprisonment
. . ."
21

When a check is presented for payment, the drawee bank will generally accept the same regardless of
whether it was issued in payment of an obligation or merely to guarantee the said obligation. What the
law punishes is the issuance of a bouncing check
22
not the purpose for which it was issued nor the term
and conditions relating to its issuance. The mere act of issuing a worthless check is malum
prohibitum.
23
This point has been made clear by this Court, thus:
It is now settled that Batas Pambansa Bilang 22 applies even in cases where dishonored
checks are issued merely in the form of a deposit or a guarantee. The enactment in
question does not make any distinction as to whether the checks within its
contemplation are issued in payment of an obligation or merely to guarantee the said
obligation. In accordance with the pertinent rule of statutory construction, inasmuch as
the law has not made any distinction in this regard, no such distinction can be made by
means of interpretation or application. Furthermore, the history of the enactment of
subject statute evinces the definite legislative intent to make the prohibition all-
embracing, without making any exception from the operation thereof in favor of a
guarantee. This intent may be gathered from the statement of the sponsor of the bill
(Cabinet Bill No. 9) which was enacted later into Batas Pambansa Bilang 22, when it was
introduced before the Batasan Pambansa, that the bill was introduced to discourage the
issuance of bouncing checks, to prevent checks from becoming "useless scraps of paper"
and to restore respectability to checks, all without distinction as to the purpose of the
issuance of the checks,. The legislative intent as above said is made all the more clear
when it is considered that while the original text of Cabinet Bill No. 9, supra, had
contained a proviso excluding from the coverage of the law a check issued as a mere
guarantee, the final version of the bill as approved and enacted by the Committee on
the Revision of Laws in the Batasan deleted the abovementioned qualifying proviso
deliberately for the purpose of making the enforcement of the act more effective
(Batasan Record, First Regular Session, December 4, 1978, Volume II, pp.
1035-1036).
Consequently, what are important are the facts that the accused had deliberately issued
the checks in question to cover accounts and that the checks in question to cover
accounts and that the checks were dishonored upon presentment regardless of whether
or not the accused merely issued the checks as a guarantee. (pp. 4-5, Dec. IAC) [pp. 37-
38, Rollo].
24

The importance of arresting the proliferation of worthless checks need not be underscored. The
mischief created by unfunded checks in circulation is injurious not only to the payee or holder, but to
the public as well. This harmful practice "can very well pollute the channels of trade and commerce,
injure the banking system and eventually hurt the welfare of society and the public interest."
25

Petitioner likewise opines that the payee, herein complaining witness, was aware of the fact that his
account with Premiere Development Bank was closed. He claims that the payee’s knowledge verily
supports his contention that he did not intend to put the said check in circulation much less ensure its
payment upon presentment.
Knowledge of the payee of the insufficiency or lack of funds of the drawer with the drawee bank is
immaterial as deceit is not an essential element of an offense penalized by B.P. 22. As already
aforestated, the gravamen of the offense is the issuance of a bad check,
26
hence, malice and intent in
the issuance thereof are inconsequential. Moreover, the fact that the check issued is restricted is
likewise of no moment. Cross checks or restricted checks are negotiable instruments within the
coverage of B.P. 22.
Petitioner, on appeal, changed his theory from complete denial that he issued the questioned check to
an admission of its issuance without intent to circulate or negotiate it. Such a change of theory however,
cannot be allowed. When a party adopts a certain theory, and the case is tried and decided upon that
theory in the court below, he will not be permitted to change his theory on appeal for to permit him to
do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair
play, justice and due process.
27

Finally, the issue raised primarily involves a question of fact. Our jurisdiction in cases brought to us from
the Court of Appeals is limited to reviewing the errors of law imputed to the latter, its findings of fact
being conclusive. Therefore, barring any showing that the findings complained of are totally devoid of
support in the record, such findings must stand.
28
After a careful consideration of the records, we
sustain the conclusion of the respondent court.
WHEREFORE, premises considered, the instant petition is DISMISSED and the questioned decision of the
respondent court is hereby AFFIRMED en toto. Costs against the petitioner.
SO ORDERED.
G.R. No. L-12597 August 30, 1917
THE UNITED STATES, Plaintiff-Appellee, vs. FRANCISCO MALONG, Defendant-Appellant.
L. Porter Hamilton for appellant.
Assistant Attorney-General Gloria for appellee.
MALCOLM, J.:
The accused was charged in the Court of First Instance of the city of Manila with the crime of estafa
committed within the jurisdiction of the city. He was convicted and sentenced to one year eight months
and twenty-one days of presidio correccional, with the accessory penalties of article 58 of the Penal
Code, to make restitution to the offended parties Pedro Leonen and Bonifacia Rodriguez of the land
described in Exhibit A and the documents corresponding thereto, and to pay the costs. From this
judgment he has appealed making eight assignments of error, all of which either concern the sufficiency
of the proof or appellant's contention that if any crime was committed, it was falsification of a private
document and not estafa.chanroblesvirtualawlibrary chanrobles virtual law library
Pedro Leonen and Bonifacia Rodriguez are a husband and wife, residents of the municipality of
Umingan, Province of Pangasinan. Both are illiterate. They are the owners of three parcels of registered
land located in their home municipality. Desiring to mortgage their property in the amount of P6,000,
they came to the city of Manila, and through the connivance of the accused were induced to sign the
documents appearing as Exhibits A and B. They executed Exhibit A under the belief that it was a power
of attorney in favor of the accused. They executed Exhibit B in ratification of Exhibit A before a notary
public. On different occasions, the accused told the offended parties that the land described in the
document which they had signed had been mortgaged to the National Bank and that within a short time
they would secure the corresponding amount. It later appeared that Exhibit A, which the complainants
in their ignorance thought only to be a power of attorney was in reality a bill of sale of their property for
P4,000 to the accused. The lower court found that as against the prominent facts which have just been
narrated, the accused has not succeeded in demonstrating that this was a valid sale of the property in
question by the complainants to the accused. We are shown no reason which would justify us in
interfering with the findings of the court.chanroblesvirtualawlibrary chanrobles virtual law library
Do the proven facts establish the crime of estafa or the crime of falsification of a private
document? chanrobles virtual law library
The amount involved would, under the supposition that the offense is estafa, place the fraud under
paragraph 3 of article 534 of the Penal Code. As supplementary to this provision, paragraph 7 of the
following article provides for the imposition of the penalty upon "any person who shall commit a fraud
by inducing another, by means of deceit, to sign any document." The documents in question, Exhibits A
and B, were signed by the complainants. Did the accused employ deceit to get the complainants to so
sign? The answer is plain that if we accept the findings of the trial court then the accused made
misrepresentations to mislead the complainants as to the character of the documents executed by
them. There is no intimation to the effect that the documents were read over to the parties thereto in a
language which they understood. Is injury to complainants necessary also to be shown in order to
constitute estafa under the portion of the Penal Code we are construing? A decision of the Supreme
Court of Spain of December 24, 1891, holds that, "in order that the crime defined in paragraph 7 of
article 548 of the Penal Code (535 of our Code) may exist, it is necessary that with the object to deceive
a person, he be made to subscribe, with deceit, a certain document, i. e., that at the moment of putting
his signature thereon he was induced by error as to the import, concept, or importance of the document
affecting the will of the signer when he expressed his consent thereto in that manner." chanrobles
virtual law library
But, admitting that according to the settled jurisprudence, the essential elements of the crime of estafa
are: (1) the deceit employed to defraud another, which we have discussed, and (2) the injury caused
thereby (U. S. vs. Berry [1905], 5 Phil. Rep., 370), are we justified in finding that the complainants have
suffered damage? Surely, there was at least disturbance in the property rights of the complainants. In
the leading case of U. S. vs. Goyenechea ([1907], 8 Phil. Rep., 117), it was said that, "this fact, by itself,
and without it being necessary to deal with any other considerations of material fact herein, always
constitutes real and actual damage, and is positive enough under rule of law to produce one of the
elements constituting the offense, the crime of estafa." chanrobles virtual law library
As general corroborative authority to the conclusion toward which we are progressing is the
unpublished opinion of this court in U. S. vs. Valdeo (R. G. No. 8796, promulgated on December 2, 1913,
not published), in which Mr. Justice Torres, speaking for the court, found facts nearly identical to those
now before us to constitute estafa. (See also U. S.vs. Barnes [1904], 3 Phil. Rep., 704; U. S. vs. Berry
[1905], 5 Phil. Rep., 370; and U. S.vs. Pimentel [1910], 15 Phil. Rep., 416.) chanrobles virtual law library
We hold that the accused is guilty of the crime of estafa as penalized by article 534 paragraph 3 in
connection with article 535 paragraph 7 of the Penal Code. The judgment of the trial court is accordingly
affirmed with the costs. The documents marked Exhibits A and B are hereby declared null and void. So
ordered.c
G.R. No. L-16961 September 19, 1921
THE UNITED STATES, plaintiff-appellee,
vs.
NIEVES DE VERA Y GAYTE, defendant and appellant.
Antonio Gonzalez for appellant.
Acting Attorney-General Tuason for appellee.
VILLAMOR, J.:
The appellant was tried in the Court of First Instance of Manila under the following information:
The undersigned accuses Nieves de Vera y Gayte and John Doe (the latter name is fictitious, his
true name being unknown) of the crime of theft committed as follows:
That on or about the 20th day of February, 1920, in the city of Manila, Philippine Islands, the
said accused conspiring and confederating and cooperating with each other, did willfully,
unlawfully and criminally and through craft, take and carry away, with intent of gain and without
the consent of the owner, a gold bar weighing 559.7 grams and worth P587.68, and P200 in
bank notes of different denominations, to the damage and prejudice of Pepe (Igorot), owner of
the bar and money aforementioned, in the total sum of P787.68, Philippine currency, equivalent
to 3,938.4 pesetas.
Contrary to law.
After the proper proceeding, the trial court found the accused guilty of the crime of theft and defined
and punished in article 518, paragraph 2, of the Penal Code, without any circumstance modifying the
liability, and sentenced her to eight months and twenty-one days of prison correccional, to indemnify
the offended party in the sum of P201,20, to suffer subsidiary imprisonment in case of insolvency, and
to pay costs.
From the record it appears that on the 20th of February, 1920, three Igorots named Jose II, Balatan, and
Pepe were on the Escolta, of this city, trying to dispose of a bar of gold when an Ilocano invited them to
go to his house, stating that there was a woman there who would buy the precious metal. they
accompanied the Ilocano to the house indicated by him where they met a woman, the accused herein,
who apparently, was desirous of buying the gold and requested them to hand it to her so that she might
take it to a silversmith and have it examined, stating that she would return within a short time to report
the result. The Igorot Pepe, who was the owner of the bar of gold, thereupon handed it to her, together
with P200 in bank notes which her requested to her to have changed into silver coins were more
desirable in the Mountain Province. The woman then left the house at about 12 o'clock on that day,
asking the Igorots to wait there. But the woman did not return. They waited in vain for hours for her and
at nightfall they agreed that one of them should remain on watch while the other two went to the
Meisic police station to report the matter. The police acted promptly and effectively. The policeman
Jose Gonzales, assigned to take charge of the case, soon identified the woman who had taken away the
bar of gold, by the description which the Igorots had given him, and at a few minutes after 11 o'clock he
already was in a house on Calle Barcelona, examining the accused as to the whereabout of the bar of
gold and the bank notes of the Igorots. As the woman gave evasive answers, it became necessary to ask
for assistance from the office of the police, and shortly thereafter, two other policemen, Mr. Abbot and
one Ronas, arrived, who took the woman to the house at No. 541 Calle Regidor, followed by Gonzales
and the three Igorots. There the bar of gold divided into three pieces was found wrapped in a
handkerchief and placed inside the water tank of a water-closet. The accused requested one Mamerta
de la Rosa to let her have P150 which she in turn handed to the policeman.
According to Exhibit B, which is a certificate issued by the Bureau of Science, the bar of gold delivered to
the accused weighed 559.7 grammes and was worth P587.68 at the rate of P1.05 per gramme; whereas,
the three bars found by the police weighed only 416 grammes, and were therefore, 143.7 grammes
short. Of the P200 bank notes delivered to the accused, she returned only P150.
In view of the above stated facts, which appear in the cause to have been duly proven, the accused was
sentenced by the court a quo to the penalty already mentioned.
Counsel for the accused contends, that as the evidence does not establish the essential elements of
theft, the crime charged in the information, but those of the crime of estafa, the judgment appealed
from should be reversed. Counsel for the prosecution holds that the evidence adduced during the trial
of the case show that the accused is guilty of the crime of estafa, and as she cannot be convicted for this
crime for the reason that the information upon which she was arraigned was for the crime of theft, the
essential elements of which are different from those of estafa, he recommends the remanding of the
case to the court of origin for proper proceeding in accordance with law.
The argument advanced in support of the contention of the defense is that the goods misappropriated
were not taken by the accused without the consent of the owner who had delivered them to her
voluntarily, and this element being lacking, it cannot be the crime of theft.
It is well to remember the essential elements of the crime of theft, as expounded in the textbooks,
which are as follows: First, the taking of personal property, second, that the property belongs to
another; third, that the taking away be done with intent of gain; fourth, that the taking away be done
without consent of the owner; and fifth, that the taking away be accomplished without violence or
intimidation against persons or force upon things.
The commentators on the Spanish Penal Code, from which ours was adopted, lay great stress on the
first element which is the taking away, that is, getting possession, laying hold of the thing, so that, as
Viada says if, the things is not taken away, but received and then appropriated or converted without the
consent of the owner, it may be any other crime, that of estafa for instance, but in no way that of theft,
which consists in the taking away of the thing, that is, in removing it from the place where it is kept by
the legal owner, without the latter's consent, of the legitimate owner.
Viada (vol. 3, p. 426, 4th ed.) presents the following question which he himself solves:
In the case of the sale of goods which are usually tried, measured, or weighed; such as, wine, oil,
wheat, etc., if, after the sale, but before the measuring or weighing, a part of the goods covered
by the contract is taken by the purchaser, does he commit the crime of theft defined and
punished in this article?
While it is true that the purchase and sale is perfected from the moment that the contracting
parties agree on the goods to be sold, and the price, the title being thereupon transferred to the
purchaser, yet there is an exception to this rule, and that is the case where the goods sold are
the kind which are usually tried, measured, or weighed. (Law 24, Tit. V, Part 5.) In this case, as
the goods are not sold in bulk, but by the weight or measurement, the sale is not perfected,
since the risk or deterioration of the goods is not shifted to the buyer until it is measured or
weighed; in leaving the risk of the goods sold to the vendor until said operation is completed,
applying the maxim res perit domino, it was evidently the intention of the legislator that until
then the transfer of the ownership was not effected: it is true that there exists a promise which
binds the vendor, and which, if broken, would give the purchaser the right to demand delivery
of the goods upon payment of its price, after the same had been measured or weighed, or to
claim indemnity for damages; but it also true that until the goods sold are delivered, no definite
change of ownership takes place, and the sale is not so to speak finally perfected; and for this
same reason, where after the sale, but prior to the measuring or weighing, the purchaser takes
away fraudulently, that is, with intent of gain, a part of the goods covered by the contract, this,
is evidently , theft, with all its essential elements, as it cannot be reasonably argued that the
purchaser has taken what is his own. In the French decisions the question has been solved in the
same way, the reasons above set forth having taken as the basis therefor. (See Decision of the
Court of Cessation, rendered March 24, 1860.)
In discussing one of the elements of the crime of the theft, that is, the intent of the offender to gain by
the things appropriated, Groizard (vol. 6, pp. 263 and 264) says:
The fraudulent character of the appropriation is well determined by the requirement that the
act be prompted by the intent of gain, and that the things appropriated be another's property.
Hence the necessity of resorting in many cases to the provisions of the civil law to enable one to
conclude, by closely investigating in whom the ownership is vested, whether or not the crime of
theft has been committed. The contract of purchase and sale, for instance, is perfected as
between the vendor and the vendee and is binding on both of them, when they come to an
agreement as to the thing and the price. But the ownership passes from the vendor to the
vendee only when the thing is delivered. If before this takes place the purchaser converts the
whole or a part of the thing sold, he must be dealt with as guilty of theft, notwithstanding his
undeniable right to demand and obtain the carrying out of the contract. On the other hand, if
the owner of a thing is in the lawfull possession of another, take it away with or without
employing violence, intimidation or force, will commit neither robbery nor theft, although he
may, and must be criminally responsible for another kind of offense "Rei nostrae furtum facere
non possumus."
Adopting the same point of view of the two cited authors, let us suppose that A, a farmer in the Province
of Bulacan, agrees to sell B a certain quantity of rice at a certain price per picul. A ships several sacks of
the grain which B receives in his warehouse. If, prior to the measuring required before the payment of
the agreed price, B takes a certain quantity of rice from the different sacks, there can be no doubt that
he is guilty of the crime of theft. Now, it may be asked: Did not B receive the sacks of rice shipped to him
by A? — Yes. And did A voluntarily deliver the sacks for rice he owned by shipping them to B? — Yes.
Was the taking of the rice by B from the different sacks done with A's consent? — No.
This shows, to our mind, that the theory of the defense is untenable, according to which, when the
things is received and then appropriated or converted to one's own use without the consent of the
owner, the crime committed is not that of theft.
So far, as we have been able to find, there is in the Spanish decisions a case decided by the supreme
court of Spain which support our opinion. Viada presents this case in Question No. XXXI. (Vol. 3, p. 433,
4th ed.)
Is the shepherd, who takes away and converts to his own use several head of the cattle under
his care, guilty of the crime of estafa, within case No. 5, of article 548, or of theft, defined and
punished in article 533, No. 2, of the Code? — The Supreme Court has decide that it was this
latter and more serious crime that was committed: "Considering that the crime of theft is
committed when one, with intent of gain, and without using violence or intimidation against
persons, or force upon things, takes away personal property of another without the owner's
consent; and in the present case Manuel Diaz Castilla undoubtedly committed the crime
defined, for, with intent of gain, he took away two bucks and a female goat, against the will of
his master, the owner of the said cattle, which were under his care as shepherd: Considering
that, in holding that the crime committed was that of theft and not of estafa, as claimed by the
appellant, ignorant of the true elements which constitute the latter crime, the lower court did
not commit any error of law, nor violate any legal provision, as contended by defendant's
counsel in support of this appeal." (Decision rendered June 23, 1886, published in the Gazette of
September 16, p. 189.)
In the above cited case, did the shepherd receive the cattle which were under his care? — Undoubtedly.
Were the cattle voluntarily delivered by the owner to the shepherd? — It is to be presumed. Did the
shepherd have the consent of the owner when he took away some of the cattle and converted them to
his own use? — No. In this case of the shepherd, as in the example given, the crime committed was that
of theft, notwithstanding the fact that the thing was misappropriated had been delivered voluntarily by
the owner to the supposed he, who disposes of it without the owner's consent. And this is so because
the delivery of the cattle to the shepherd does not have the effect of transferring the judicial possession
of, or title to, the cattle thus delivered, just as the delivery of the rice does not have such effect, the
possession of, and title to, the thing to be presumed to remain in the vendor, until the sale is completely
consummated.
The American decisions an textbooks on "larceny," a crime which has the same characteristics as those
oaf theft under our Penal Code, contain abundant illustrations of the question raised in the present
case.
The intention of the owner to part with his property is the gist and essence of the offense of theft
(larceny), and the vital point on which the crime hinges and is to be determined.
A felonious taking necessary in the crime of larceny, and generally speaking, a taking which is done with
the consent or acquiescence of the owner of the property is not felonious. But is the owner parts with
the possession thereof for a particular purpose, and the person who receives the possession avowedly
for that purpose has the fraudulent intention to make use of it as the means of converting it to his own
use, and does so convert it, this is larceny, for in such case, the fraud supplies the place of the trespass in
the taking, or, as otherwise stated, the subsequent felonious conversion of the property by the alleged
thief will relate back and make the taking and conversion larceny. And it has been said that the act goes
farther than the consent, and may be fairly said to be against it. If money is given to a person to be
applied to a particular purpose, it is larceny for the receiver to appropriate it to his own use which was
not the purpose contemplated by the owner. Obtaining money under the false pretense that it is to be
bet on a horse race, and with the intent at the time to convert it to the bailee's own use, the race being
a mere sham to aid this purpose, is larceny. The rule has been applied also to cases in which a person
takes a piece of money from another to change, and keeps it with the unlawful intent to convert it and
refuses to deliver the money given to him or the change therefore, on demand; and the fact that the
taking was open and from the owner is of no consequence, if the intent to steal existed. This is so for the
reason that the delivery of money to another for the sole purpose of getting it changed is a parting with
the custody only and not the amount does not relieve him from liability for the larceny of the entire
amount given him.
Where the parties are engaged in a cash sale the whole transaction is incomplete until the payment is
completed; and the possession of the goods remains in the seller and that of the money in the buyer,
until they are simultaneously exchanged. If, in such case, the buyer gets control of the goods and makes
off with them without paying for them, he is guilty of larceny. And conversely if the seller gets the
money and refuses to give up the goods, it is larceny. Thus, where one surrenders up his watch with the
understanding that he is immediately to receive 50 dollars for it, the keeping of the watch without
payment of money is larceny. (chamberlain vs. State, 25 Tex, App., 398; 8 S. W., 474.) and where a
tradesman handed good to a customer to examine and the latter ran away with them, he was held guilty
of larceny. (Rex vs. Chissers, T. Raym., 275.) Similarly, where one unloaded onions which he owned on
the premises of a prospective buyer, who thereupon refused to pay for the onions or to allow the seller
to remove them, it was held larceny, as the owner never intended to part with the possession of the
onions until he received his money therefor. (Reg. vs. Slowly, 12 Cox C. C., 269; 27 L. T. Rep., N. S., 803).
One, waiting in crowd to purchase a railway ticket, requested another nearer the ticket office to buy a
ticket for her, handing him the money to pay for it. He made off with money and was held guilty of
larceny. (Reg. vs Thompson, 9 Cox C. C., 244; 8 Jur., N. S., 1184, L. and C., 225; 32 L. J. M. C., 53; 7 L. T.
Rep., N. S., 432; 11 Wkly. Rep., 40: 25 Cyclopedia of Law and Procedure, pp. 25 and 26.)
For the foregoing reasons, we are of the opinion, and so hold, that the crime proven in the cause to
have been committed by the appellant by appropriating the gold bar delivered to her for examination,
and by converting to her own use, without the consent of the owner, the bank notes which had been
handed her to be exchanged for silver coins, is that of theft, defined and punished in article 518,
paragraph 2, of the Penal Code. And the appealed judgment being in accordance with law, it must be, as
is hereby, affirmed with costs against the appellant. So ordered.