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REPUBLIC OF THE PHILIPPINES

OFFICE OF THE CITY PROSECUTOR


CEBU CITY

ORIENT ZENITH LENDING CORP.


Represented by Cesar Ordiz
Complainant, I.S. No. _______
versus - For: ESTAFA

ELENO MARI FIGURACION aka. Lino Figuracion


AND JOCELYN FIGURACION aka. Joscel Figuracion
Respondent.
x---------------------------------x

COMPLAINT-AFFIDAVIT

THE UNDERSIGNED COMPLAINANT respectfully alleges:

1. COMPLAINANT. – The complainant is ORIENT ZENITH LENDING CORPORATION a duly organized


corporation under Philippine laws and, for purposes of this criminal complaint, with postal address at: 4
Junquera St. Cebu City, represented by Ceasar Ordiz, Of legal age, Pilipino with the same office address as
stated above.

2. RESPPONDENT. – The respondents are spouses ELENO MARI P. FIGURACION AND JOCELYN C.
FIGURACION all of legal age, married, Pilipino , and residing at 441 P. Fatima st. Cebu City , where
summons and notices may be served, to wit:

3. NATURE OF THE CRIMINAL COMPLAINT. - This is a criminal complaint for ESTAFA committed
thru deceit and false pretenses involving the sum of One Million and Five Hundred Thousand Pesos
(P1,500,000.00) arising from Real Estate Contract entered by respondents spouse to the complainant.

4. ULTIMATE FACTS. (judicial affidavit form)

I. PRELIMINARY INFORMATION.

A. NAME AND OTHER PERSONAL CIRCUMSTANCES OF THE WITNESS.

Name : Cesar Ordiz


Age : legal age;
Address : 4 Junquera St. Cebu City;
Occupation : Office worker
Language : English ,Tagalog and Visayan.

B. LAWYER WHO CONDUCTED OR SUPERVISED THE EXAMINATION OF THE WITNESS.


Name : Atty. Reynaldo A. Ornopia

Address : 11 flr. Regus, Equicom Tower Maguikay Mandaue City

Place of Examination: Maguikay Mandaue City

II. OFFER.

The testimony of the witness Jeager Bartido Sienes is being offered to prove the:

1. To prove that he is the researcher in the office of atty. Reynaldo A. Ornopia

2. To proved that on July 7, 2017 in the afternoon , he is in the office of attorney Reynaldo A. Ornopia
at MSC building located at Maguikay Mandaue City;

3. To proved that on the said date mention above, the security guard of the building namely Mr. Cuyos
delivered a letter address for atty. Reynaldo A. Ornopia.

4. To proved that the said letter delivered by security guard Cuyos was the decision of the labor case
with case no. ____________.

4. To other matters in relation to this case;

III. JUDICIAL AFFIDAVIT PROPER.

I, Eugene Sablada , legal age , married, Filipino, with office address at 4 Junquera St. Cebu City , under
oath, depose:

1. Q – Please state your name, age, residence, and occupation of the witness.

A– I am ,Eugene Sablada ,legal age , married, Filipino, with office address at 4 Junquera St., Cebu
City,

2. Q- Why are you here now?

A – To give a sworn statement by way of a judicial affidavit, the


same to constitute as my direct testimony, in the above-captioned
case.

3. Q – In what language do you want your examination to be conducted?

A– This judicial affidavit is prepared in English.

4. Q – Do you undertake to answer the questions to be asked of you, fully conscious that you will do
so under oath, and that you may face criminal liability for false testimony or perjury?

A -Yes.

5. Q– Let us now proceed to the above criminal case. Where were you connected at present?
A – I am connected with the office of atty. Reynaldo A. Ornopia, whose previous office was located at MSC
building Maguikay Mandaue city.

6. Q – What is your position in that office.

A—I,m the researcher.

7. Q- As a researcher , What is your task?

A– I do some researched work pertaining to the cases of the clients of atty. Ornopia.

8. Q- Do you know spouses Helen Lim , the complainant of the above case?

A – Yes , I know her;

9. Q – Why do you her?

A– I know her being one of the client of atty. Reynaldo A. Ornopia.

10. Q – where were you on July 7, 2017?

A- I am in the office of atty. Reynaldo A. Ornopia.

11. Q - What happen next?

A - At about 1:30 pm, the security guard (Mr. Cuyos) of the building arrived in the office bringing and
delivered a letter for atty. Ornopia.

12. Q. What happen next?

A - That the said letter came from the office of National Labor relation commission.

13. Q. What happen next?

A – That I open the letter and found out that it is a decision of the labor case Helen Lim.

14. Q – What else?

A – Then I informed atty. Ornopia that there is a decision from NLRC delivered by the security guard.

15. Q – What happen next?

A – That I heared atty. Reynaldo A. Ornopia who called Nonoy Letaba about the decision and he send him
to the office of Helen Lim because he live near the place of Mrs. Lim.

Nothing Follows.

IN WITNESS WHEREOF I hereunto set my hand this ____day of ______, 2019 at Mandaue City.

EUGEN SABLADA
Affiant

SUBSCRIBED and sworn to before me in ____________ on ____day , 2019, affiant showing


his/her competent proof of identity, to wit
Notary Public

Doc. No. __
Page No. __
Book No. __
Series of 2019.

V. SWORN ATTESTATION OF THE LAWYER WHO CONDUCTED OR SUPERVISED THE


EXAMINATION OF THE WITNESS.

The undersigned ATTY. REYNALDO A. ORNOPIA ., of legal age, married, and with law office address at
Pusok Lapulapu City , under oath, deposes and states:

1. He assisted the affiant in making judicial affidavit to serve as his counter affidavit in the above-entitled
case;

2. He faithfully recorded or caused to be recorded the questions he asked and the


corresponding answers that the above-named witness gave;

3. Neither he nor any other person then present or assisting him coached the witness regarding the
latter's answers; and

4. He conducted the examination of the witness at his law office located at Pusok Mandaue City.

Atty. Reynaldo A. Ornopia


Affiant

SUBSCRIBED and sworn to before me in ______________ on _____day _________, 2018, affiant


showing his/her competent proof of identity, to wit: SSS Member ID No. xxx.

Notary Public

Doc. No. ___


Page No. ___
Book No. ___
Series of 2018

Copt Furnished:
4.11. For the record, and to form part hereof, by incorporation and reference, attached hereto are copies of the
following supporting documents, to wit:

X x x.

5. DISCUSSION.

APPLICABLE LAWS
5.1. Article 315 of the Revised Penal Code on deceit/swindling (estfa) provides any person who shall defraud
another by any of the means mentioned therein shall be punished by the penalty of prision correccional in
its maximum period to prision mayor in its minimum period, if the amount of the fraud is over 12,000 pesos
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; provided that the fraud be
committed by any of the following means:
1. With unfaithfulness or abuse of confidence, namely:
X x x.
(b) By 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.
2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions, or by means of other similar
deceits.
X x x.
(a) By pretending to have bribed any Government employee, without prejudice to the action
for calumny which the offended
party may deem proper to bring against the offender. In this case, the offender shall be
punished by the maximum period of the penalty.
(b) By post-dating a check, or issuing a check in payment of an obligation when the offender
had no funds in the bank, or his funds deposited therein were not sufficient to cover the
amount of check. The failure of the drawer of the check to deposit the amount necessary to
cover his check within three (3) days from receipt of notice from the bank and/or the payee
or holder that said check has been dishonored for lack of insufficiency of funds shall be
prima facie evidence of deceit constituting false pretense or fraudulent act. (As amended
by Republic Act No. 4885, approved June 17, 1967.)
5.2. Article 316 (other forms of swindling) of the Revised Penal Code provides that the penalty of arresto mayor
in its minimum and medium periods and a fine of not less than the value of the damage caused and not
more than three times such value, shall be imposed upon “any person who, to the prejudice of
another, shall execute any fictitious contract.”

5.3. Article 318 (other deceits) of the Revised Penal Code provides that the penalty of arresto mayor and a fine
of not less than the amount of the damage caused and not more than twice such amount shall be imposed
upon any person who shall defraud or damage another by “any other deceit not mentioned in the
preceding articles of this chapter.”

5.4. Further, B.P. Blg. 22 (Bouncing Checks Law) provides:

5.4.1. Any person who makes or draws and issues any check to apply on account or for value, knowing at the time
of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such
check in full upon its presentment, which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer,
without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less
than thirty days but not more than one (1) year or by fine of not less than but not more than double the
amount of the check which fine shall in no case exceed Two Hundred Thousand pesos, or both such fine
and imprisonment at the discretion of the court.

5.4.2. The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee
bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit
to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing
thereon, for which reason it is dishonored by the drawee bank.

5.4.3. Where the check is drawn by a corporation, company or entity, the person or persons who actually signed
the check in behalf of such drawer shall be liable under this Act.

5.4.4. The making, drawing and issuance of a check payment of which is refused by the drawee because of
insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the
check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker
or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by
the drawee of such check within five (5) banking days after receiving notice that such check has not been
paid by the drawee.

5.4.5. It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon
presentment, to cause to be written, printed or stamped in plain language thereon, or attached thereto, the
reason for drawee's dishonor or refusal to pay the same: Provided, That where there are no sufficient funds
in or credit with such drawee bank, such fact shall always be

explicitly stated in the notice of dishonor or refusal. In all prosecutions under this Act, the introduction in
evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written
thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the
making or issuance of said check, and the due presentment to the drawee for payment and the dishonor
thereof, and that the same was properly dishonored for the reason written, stamped or attached by the
drawee on such dishonored check.

5.4.6. Notwithstanding receipt of an order to stop payment, the drawee shall state in the notice that there were
no sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact."

5.5. BP Blg. 22 enumerates the elements of the crime to be

(1) the making, drawing and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds
in or credit with the drawee bank for the payment of the check in full upon its presentment; and

(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor
for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

There is deemed to be a prima facie evidence of knowledge on the part of the maker, drawer or issuer of
insufficiency of funds in or credit with the drawee bank of the check issued if the dishonored check is
presented within 90 days from the date of the check and the maker or drawer fails to pay thereon or to make
arrangement with the drawee bank for that purpose.

5.5.1. The statute has created the prima facie presumption evidently because "knowledge" which involves a state
of mind would be difficult to establish. The presumption does not hold, however, when the maker, drawer
or issuer of the check pays the holder thereof the amount due thereon or makes arrangement for payment
in full by the drawee bank of such check within 5 banking days after receiving notice that such check has
not been paid by the drawee bank. Section 2 of B.P. Blg. 22 clearly provides that this presumption arises
not from the mere fact of drawing, making and issuing a bum check; there must also be a showing that,
within five banking days from receipt of the notice of dishonor, such maker or drawer failed to pay the
holder of the check the amount due thereon or to make arrangement for its payment in full by the drawee
of such check.

LATEST APPLICABLE JURISPRUDENCE: ESTAFA

5.6. In PEOPLE OF THE PHILIPPINES vs. VIRGINIA BABY P. MONTANER, G.R.


No. 184053, August 31, 2011, the accused was convicted for the crime of Estafa as defined and penalized
under paragraph 2(d), Article 315 of the Revised Penal Code. The Information alleged that on or about May
17, 1996 in the Municipality of San Pedro, Province of Laguna and within the jurisdiction of this Honorable
Court accused Virginia (Baby) P. Montaner did then and there willfully, unlawfully and feloniously defraud
one Reynaldo Solis in the following manner: said accused by means of false pretenses and fraudulent acts
that her checks are fully funded draw, make and issue in favor of one Reynaldo Solis ten (10) Prudential
Bank Checks, all having a total value of FIFTY THOUSAND PESOS (P50,000.00) and all aforesaid checks
were postdated June 17, 1996 in exchange for cash knowing fully well that she has no funds in the drawee
bank and when the said checks were presented for payment the same were dishonored by the drawee bank
on reason of “ACCOUNT CLOSED” and despite demand accused failed and refused to pay the value thereof
to the damage and prejudice of Reynaldo Solis in the aforementioned total amount of P50,000.00.

To exculpate herself from criminal liability, accused Virginia Baby P. Montaner denied the allegations that
she issued ten (10) checks in private complainant’s favor claiming that the ten (10) checks were borrowed
from her by one Marlyn Galope because the latter needed money. She gave the ten checks to Galope, signed
the same albeit the space for the date, amount and payee were left blank so that the checks cannot be used
for any negotiation. She further told Galope that the checks were not funded. When she learned that a case
was filed against her for estafa, she confronted Marlyn Galope and the latter told her that money will not be
given to her if she will not issue the said checks. She has no knowledge of the notice of dishonor sent to her
by private complainant and claimed that her husband, who supposedly received the notice of dishonor left
for abroad in July 1996 and returned only after a year, that is, in 1997.

In a Decision dated April 8, 2003, the trial court convicted appellant for the crime of estafa as defined and
penalized under paragraph 2(d), Article 315 of the Revised Penal Code and sentenced her to suffer an
indeterminate penalty of imprisonment from twelve (12) years of prision mayor as minimum to twenty-
two (22) years of reclusion perpetua as maximum and to indemnify complainant Reynaldo Solis in the
amount of P50,000.00.

Appellant elevated the case to the Court of Appeals but the adverse ruling was merely affirmed by the
appellate court in its Decision dated February 12, 2008.

Hence, appellant interposed an appeal before the Supreme Court and put forth a single assignment of error:
THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSED–APPELLANT GUILTY BEYOND
REASONABLE DOUBT OF THE CRIME OF ESTAFA UNDER ARTICLE 315, PAR. 2 (D) OF THE REVISED
PENAL CODE.

Appellant maintains that she entrusted the subject checks, purportedly signed in blank, to Marilyn Galope
(Galope) out of pity in order for the latter to secure a loan. Thus, there is purportedly no certainty beyond
reasonable doubt that she issued the checks purposely to defraud Reynaldo Solis (Solis) into lending her
money. She further claims that no transaction had ever transpired between her and Solis. Admitting that
she may have been imprudent, she nonetheless insists that her simple imprudence does not translate to
criminal liability.

The Supreme Court was not persuaded.

The Court cited Paragraph 2(d), Article 315 of the Revised Penal Code provides:
ART. 315. Swindling (estafa). – Any person who shall defraud another by any of the means
mentioned hereinbelow x x x:

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

xxxx

(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no
funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The
failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days
from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for
lack or insufficiency of funds shall be prima facieevidence of deceit constituting false pretense or fraudulent
act.

According to the Court, the elements of estafa under paragraph 2(d), Article 315 of the Revised
Penal Code are: (1) the postdating or issuance of a check in payment of an obligation contracted at the time
the check was issued; (2) lack of sufficiency of funds to cover the check; and (3) damage to the payee. [1]

In the said case, the prosecution sufficiently established appellant’s guilt beyond reasonable doubt
for estafa under paragraph 2(d), Article 315 of the Revised Penal Code. According to Solis’s clear and
categorical testimony, appellant issued to him the 10 postdated Prudential Bank checks, each in the amount
of P5,000.00 or a total of P50,000.00, in his house in exchange for their cash equivalent.

From the circumstances, the Court held that it was evident that Solis would not have
given P50,000.00 cash to appellant had it not been for her issuance of the 10 Prudential Bank
checks. These postdated checks were undoubtedly issued by appellant to induce Solis to part with his
cash. However, when Solis attempted to encash them, they were all dishonored by the bank because the
account was already closed.

Solis wrote appellant a demand letter dated October 13, 1996 which was received by appellant’s
husband to inform appellant that her postdated checks had bounced and that she must settle her obligation
or else face legal action from Solis. Appellant did not comply with the demand nor did she deposit the
amount necessary to cover the checks within three days from receipt of notice. This gave rise to a prima
facie evidence of deceit, which is an element of the crime of estafa, constituting false pretense or fraudulent
act as stated in the second sentence of paragraph 2(d), Article 315 of the Revised Penal Code.

As for appellant’s claims that she merely entrusted to Galope the blank but signed checks
imprudently, without knowing that Galope would give them as a guarantee for a loan, the Court viewed
such statements with the same incredulity as the lower courts.

Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must
be credible in itself – such as the common experience and observation of mankind can approve as probable
under the circumstances. The Court has no test of the truth of human testimony, except its conformity to
our knowledge, observation and experience. Whatever is repugnant to these belongs to the miraculous and
is outside judicial cognizance.[2]

Appellant wished to impress upon the Court that she voluntarily parted with her blank but signed
checks not knowing or even having any hint of suspicion that the same may be used to defraud anyone who
may rely on them. Verily, appellant’s assertion defies ordinary common sense and human experience, the
Court stated.
Moreover, the Court added, it is elementary that denial, if unsubstantiated by clear and convincing
evidence, is negative and self-serving evidence which has far less evidentiary value than the testimony of
credible witnesses who testify on affirmative matters.[3] It agreed with the lower courts that appellant’s
bare denial cannot be accorded credence for lack of evidentiary support. As aptly noted by the trial court,
appellant’s failure to produce Galope as a witness to corroborate her story is fatal to her cause. In all, the
Court of Appeals committed no error in upholding the conviction of appellant for estafa. Hence, the
Supreme Court AFFIRMED the two decisions of both the trial court and the appellate court.

LATEST APPLICABLE JURISPRUDENCE: B.P. BLG. 22

5.7. In EUMELIA R. MITRA vs. PEOPLE OF THE PHILIPPINES and FELICISIMO S.


TARCELO, G.R. NO. 191404, July 5, 2010, the petitioner Eumelia R. Mitra (Mitra)was the Treasurer,
and Florencio L. Cabrera (deceased), Jr. was the President, of Lucky Nine Credit Corporation (LNCC), a
corporation engaged in money lending activities. Between 1996 and 1999, private respondent Felicisimo S.
Tarcelo (Tarcelo)invested money in LNCC. As the usual practice in money placement transactions, Tarcelo
was issued checks equivalent to the amounts he invested plus the interest on his investments by Mitra and
Cabrera, were issued by LNCC to Tarcelo.

When Tarcelo presented these checks for payment, they were dishonored for the reason “account
closed.” Tarcelo made several oral demands on LNCC for the payment of these checks but he was frustrated.
Constrained, in 2002, he caused the filing of seven informations for violation of Batas Pambansa Blg. 22
(BP 22) in the total amount of P925,000.00 with the MTCC in Batangas City.

After trial on the merits, the MTCC found Mitra and Cabrera guilty of the charges and ordered them
to respectively pay the mandated fines for each violation and with subsidiary imprisonment in all cases, in
case of insolvency and it further adjudged them civilly liable and ordered them to pay, in solidum, private
complainant Felicisimo S. Tarcelo the amount of NINE HUNDRED TWENTY FIVE THOUSAND
PESOS (P925,000.000).

Mitra and Cabrera appealed to the Batangas RTC contending that: they signed the seven checks in
blank with no name of the payee, no amount stated and no date of maturity; they did not know when and
to whom those checks would be issued; the seven checks were only among those in one or two booklets of
checks they were made to sign at that time; and that they signed the checks so as not to delay the
transactions of LNCC because they did not regularly hold office there. The RTC affirmed the MTCC
decision.

Meanwhile, Cabrera died. Mitra alone filed a petition for review with the Court of Appeals claiming,
among others, that there was no proper service of the notice of dishonor on her. The Court of Appeals
dismissed her petition for lack of merit.

Mitra went up to the Supreme Court on a petition for review and submitted the issues: WHETHER
OR NOT THE ELEMENTS OF VIOLATION OF BATAS PAMBANSA BILANG 22 MUST BE
PROVED BEYOND REASONABLE DOUBT AS AGAINST THE CORPORATION WHO OWNS
THE CURRENT ACCOUNT WHERE THE SUBJECT CHECKS WERE DRAWN BEFORE
LIABILITY ATTACHES TO THE SIGNATORIES; and WHETHER OR NOT THERE IS PROPER
SERVICE OF NOTICE OF DISHONOR AND DEMAND TO PAY TO THE PETITIONER AND
THE LATE FLORENCIO CABRERA, JR.

The Supreme Court denied the petition.

The Court held that a check is a negotiable instrument that serves as a substitute for money and as
a convenient form of payment in financial transactions and obligations. The use of checks as payment
allows commercial and banking transactions to proceed without the actual handling of money, thus, doing
away with the need to physically count bills and coins whenever payment is made. It permits commercial
and banking transactions to be carried out quickly and efficiently. But the convenience afforded by checks
is damaged by unfunded checks that adversely affect confidence in our commercial and banking activities,
and ultimately injure public interest.

BP 22 or the Bouncing Checks Law was enacted for the specific purpose of addressing the problem
of the continued issuance and circulation of unfunded checks by irresponsible persons. To stem the harm
caused by these bouncing checks to the community, BP 22 considers the mere act of issuing an unfunded
check as an offense not only against property but also against public order. [4] The purpose of BP 22 in
declaring the mere issuance of a bouncing check as malum prohibitum is to punish the offender in order to
deter him and others from committing the offense, to isolate him from society, to reform and rehabilitate
him, and to maintain social order.[5] The penalty is stiff. BP 22 imposes the penalty of imprisonment for
at least 30 days or a fine of up to double the amount of the check or both imprisonment and fine.

Specifically, BP 22 provides:

SECTION 1. Checks Without Sufficient Funds. — Any person who makes or draws and issues any
check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds
in or credit with the drawee bank for the payment of such check in full upon its presentment, which check
is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been
dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop
payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or
by a fine of not less than but not more than double the amount of the check which fine shall in no case
exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with
the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to
maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from
the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually
signed the check in behalf of such drawer shall be liable under this Act.

SECTION 2. Evidence of Knowledge of Insufficient Funds. — The making, drawing and issuance
of a check payment of which is refused by the drawee because of insufficient funds in or credit with such
bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of
knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the
amount due thereon, or makes arrangements for payment in full by the drawee of such check within five
(5) banking days after receiving notice that such check has not been paid by the drawee.

Mitra posited in the petition that before the signatory to a bouncing corporate check can be held
liable, all the elements of the crime of violation of BP 22 must first be proven against the corporation. The
corporation must first be declared to have committed the violation before the liability attaches to the
signatories of the checks.

The Court stated that it found itself unable to agree with Mitra’s posture. The third paragraph of
Section 1 of BP 22 reads: "Where the check is drawn by a corporation, company or entity, the person or
persons who actually signed the check in behalf of such drawer shall be liable under this Act." This
provision recognizes the reality that a corporation can only act through its officers. Hence, its wording is
unequivocal and mandatory – that the person who actually signed the corporate check shall be held liable
for a violation of BP 22. This provision does not contain any condition, qualification or limitation.

The Court cited the case of Llamado v. Court of Appeals,[6] where it ruled that the accused was
liable on the unfunded corporate check which he signed as treasurer of the corporation. He could not invoke
his lack of involvement in the negotiation for the transaction as a defense because BP 22 punishes the mere
issuance of a bouncing check, not the purpose for which the check was issued or in consideration of the
terms and conditions relating to its issuance. In this case, Mitra signed the LNCC checks as treasurer.
Following Llamado, she must then be held liable for violating BP 22.
Another essential element of a violation of BP 22 is the drawer’s knowledge that he has insufficient
funds or credit with the drawee bank to cover his check. Because this involves a state of mind that is difficult
to establish, BP 22 creates the prima faciepresumption that once the check is dishonored, the drawer of the
check gains knowledge of the insufficiency, unless within five banking days from receipt of the notice of
dishonor, the drawer pays the holder of the check or makes arrangements with the drawee bank for the
payment of the check. The service of the notice of dishonor gives the drawer the opportunity to make good
the check within those five days to avert his prosecution for violating BP 22.

Mitra alleged that there was no proper service on her of the notice of dishonor and, so, an essential
element of the offense is missing. This contention, the Court said, raised a factual issue that was not proper
for review. It is not the function of the Court to re-examine the finding of facts of the Court of Appeals. Our
review is limited to errors of law and cannot touch errors of facts unless the petitioner shows that the trial
court overlooked facts or circumstances that warrant a different disposition of the case [7]or that the
findings of fact have no basis on record. Hence, with respect to the issue of the propriety of service on Mitra
of the notice of dishonor, the Court gives full faith and credit to the consistent findings of the MTCC, the
RTC and the CA.

The defense postulated that there was no demand served upon the accused, said denial deserves
scant consideration. Positive allegation of the prosecution that a demand letter was served upon the accused
prevails over the denial made by the accused. Though, having denied that there was no demand letter
served on April 10, 2000, however, the prosecution positively alleged and proved that the
questioned demand letter was served upon the accused on April 10, 2000, that was at the
time they were attending Court hearing before Branch I of this Court. In fact, the prosecution
had submitted a Certification issued by the other Branch of this Court certifying the fact that the accused
were present during the April 10, 2010 hearing. With such straightforward and categorical testimony of the
witness, the Court believes that the prosecution has achieved what was dismally lacking in the three (3)
cases of Betty King, Victor Ting and Caras – evidence of the receipt by the accused of the demand
letter sent to her. The Court accepts the prosecution’s narrative that the accused refused to sign the same
to evidence their receipt thereof. To require the prosecution to produce the signature of the accused on said
demand letter would be imposing an undue hardship on it. As well, actual receipt acknowledgment is not
and has never been required of the prosecution either by law or jurisprudence. [emphasis supplied]

With the notice of dishonor duly served and disregarded, there arose the presumption that Mitra
and Cabrera knew that there were insufficient funds to cover the checks upon their presentment for
payment. In fact, the account was already closed.

To reiterate the elements of a violation of BP 22 as contained in the above-quoted provision, the


Court said, a violation exists where:

1. a person makes or draws and issues a check to apply on account or for value;

2. the person who makes or draws and issues the check knows at the time of issue that he does not have sufficient
funds in or credit with the drawee bank for the full payment of the check upon its presentment; and

3. the check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have
been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to
stop payment. [8]

The Court added that there was no dispute that Mitra signed the checks and that the bank
dishonored the checks because the account had been closed. Notice of dishonor was properly given, but
Mitra failed to pay the checks or make arrangements for their payment within five days from notice. With
all the above elements duly proven, Mitra cannot escape the civil and criminal liabilities that BP 22 imposes
for its breach.[9]
6. PRAYER.

WHEREFORE, premises considered, it is respectfully prayed that after notice and hearing the
respondent be indicted for ESTAFA and VIOLATION OF B.P. BLG. 22 to protect/preserve the right/interest
of the complainant to recover his claim of Five Million Pesos (P5,000,000.00), plus exemplary
damages of P100,000.00, moral damages of P100,000.00, attorney’s fees of P125,000.00
plus 5% of the recoverable amounts, and costs of suit.

X x x City, October 18, 2011.

Xxx
Complainant
LTO Driver’s License No.
__________________
Expiring on _________

Assisted By:

LASERNA CUEVA-MERCADER LAW OFFICES


Counsel for the Complainant
Unit 15, Star Arcade. C.V. Starr Ave.
Philamlife Village, Las Pinas City 1740
Tel. No. 8725443; Fax No. 8462539.

MANUEL J. LASERNA JR.


Roll No. 33640, 4/27/85
IBP Lifetime Member No. 1907
IBP Leyte Chapter
PTR 1016909, 1/7/11, Las Pinas City
MCLE Compliance No. IV-1326, 2/3/11

SUBSCRIBED and sworn to before in Muntinlupa City me this ___ day of October 2011,
affiant/complainant showing his official identification document as stated above.

Administering Assistant City Prosecutor

Annexes: “A” to “L“, supra.

[1] Cajigas v. People, G.R. No. 156541, February 23, 2009, 580 SCRA 54, 63.
[2] People v. Garin, 476 Phil. 455, 474 (2004); People v. Samus, 437 Phil. 645, 659 (2002).
[3] Gomba v. People, G.R. No. 150536, September 17, 2008, 565 SCRA 396, 400, citing People v. Magbanua, G.R.
No. 133004, May 20, 2004, 428 SCRA 617, 630.
[4] Lozano v. Martinez, 230 Phil. 406, 428 (1986).
[5] Rosario v. Co, G.R. No. 133608, August 26, 2008, 563 SCRA 239, 253.
[6] 337 Phil. 153, 160 (1997).
[7] American Home Assurance Company v. Chua, 368 Phil. 555, 569 (1999).
[8] Rigor v. People, 485 Phil. 125, 139 (2004).
[9] In Gosiaco v. Ching, G.R. No. 173807, April 16, 2009, 585 SCRA 471, 483, we held an accused
corporate officer free from civil liability for the corporate debt after the lower court acquitted the accused of
criminal liability under BP 22. Note that this is a totally different case from the present case as the issue
here is both criminal and civil liability.
Posted by Atty. Manuel J. Laserna Jr. at 6:45 PM
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G.R. No. 204280, November 09, 2016 - EVELYN V. RUIZ, Petitioner, v. BERNARDO F. DIMAILIG,
Respondent.

SPECIAL EN BANC

G.R. No. 204280, November 09, 2016

EVELYN V. RUIZ, Petitioner, v. BERNARDO F. DIMAILIG, Respondent.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari assails the October 22, 2012 Decision1 of the Court of Appeals (CA) in
CA-GR. CV No. 95046 which reversed and set aside the November 26,2009 Decision2 and the March 19,
2010 Order3 of the Regional Trial Court (RTC) of Cavite City, Branch 16 in Civil Case No. N-7573. The CA
declared void the Real Estate Mortgage (REM) constituted on the property covered by Transfer Certificate of
title (TCT) No. T-361747.

Factual Antecedents

Respondent Bernardo F. Dimailig (Bernardo) was the registered owner of a parcel of land covered by TCT
No. T-361747 located in Alapan, Imus, Cavite.4 In October 1997, he entrusted the owner's copy of the said
TCT to his brother, Jovannie,5 who in turn gave the title to Editha Sanggalang (Editha), a broker, for its
intended sale. However, in January 1998, the property was mortgaged to Evelyn V. Ruiz (Evelyn) as
evidenced by a Deed of REM6 without Bernardo's knowledge and consent. Hence, Bernardo instituted this
suit for annulment of the Deed of REM.7

In her Answer,8 Evelyn contended that she met Jovannie when she inspected the subject property and
assured her that Bernardo owned the property and his title thereto was genuine. She further claimed that
Jovannie mortgaged the property to her. She also insisted that as a mortgagee in good faith and for value,
the REM cannot be annulled and that she had the right to keep the owner's copy of TCT No. T-361747 until
the loan was fully paid to her.

During pre-trial the parties arrived at the following stipulations:9


1. That x x x it was not [Bernardo] who signed as mortgagor in the subject Deed of Real Estate Mortgage.

2. That there was a demand letter sent to [Evelyn] x x x to cause a release of mortgage on the subject
property.

3. The x x x controversy [was referred] to the Barangay for conciliation and mediation.

[4.] That Jovannie x x x is the brother of [Bernardo]. chanroblesv irt uallawl ibra ry

Thereafter, trial on the merits ensued.

Bernardo testified that when he went abroad on October 19, 1997, he left the owner's copy of the TCT of the
subject property to Jovannie as they intended to sell the subject property.10 However, on January 26, 1998,
a REM was executed on the subject property. Bernardo argued that his alleged signature appearing therein
was merely forged11 as he was still abroad at that time. When he learned in September or November 1998
that Editha mortgaged the subject property, he personally told Evelyn that the REM was fake and demanded
the return of his title. Not heeding his request, he filed a complaint for estafa through falsification of public
document against Editha and Evelyn. The criminal case against Evelyn was dismissed12 while Editha was
found guilty as charged.13

Jovannie also took the witness stand. He testified that sometime in December 1997, Editha convinced him to
surrender the owner's copy of TCT No. T-361747 which she would show her buyer.14Subsequently, however,
Editha informed him that she misplaced the title. Hence, he executed in August 199815 an affidavit of loss
and registered it with the Register of Deeds (RD).16 In September 1998, Editha finally admitted that the title
was not lost but was in Evelyn's possession because of the REM.17Upon learning this, Jovannie inquired from
Evelyn if Editha mortgaged Bernardo's property to her. Purportedly, Evelyn confirmed said mortgage and
told him that she would not return the owner's copy of TCT No. T-361747 unless Editha pay the
loan,18 Jovannie also alleged that he told Evelyn that Bernardo's alleged signature in the REM was not
genuine since he was abroad at the time of its execution.19

On the other hand, Evelyn maintained that she was a mortgagee in good faith. She testified that sales
agents - Editha, Corazon Encarnacion, and a certain Parani, - and a person introducing himself as
''Bernardo" mortgaged the subject property to her for P300,000.00 payable within a period of three
months.20 She asserted that even after the expiration of said period, "Bernardo" failed to pay the loan.21

Evelyn narrated that before accepting the mortgage of the subject property, she, the sales agents, her aunt,
and “Bernardo," visited the property. She pointed out that her companions inspected it while she stayed in
the vehicle as she was still recuperating from an operation.22 She admitted that she neither verified from the
neighborhood the owner of the property nor approached the occupant thereof.23

Moreover, Evelyn asserted that when the Deed of REM was executed, the person who introduced himself as
Bernardo presented a community tax certificate and his picture as proof of identity.24 She admitted that she
did not ask for any identification card from "Bernardo."25 cral awred

Contrary to the allegation in her Answer that Jovannie mortgaged the property, Evelyn clarified that she met
Jovannie for the first time when he went to her house and told her that Bernardo could not have mortgaged
the property to her as he was abroad.26

Corazon Abella Ruiz (Corazon), the sister-in-law of Evelyn, was presented to corroborate her testimony.
Corazon averred that in January 1998, she accompanied Evelyn and several others in inspecting the subject
property.27 The day after the inspection, Evelyn and "Bernardo'' executed the Deed of REM in the office of a
certain Atty. Ignacio; Evelyn handed P300,000.00 to Editha, not to "Bernardo;"28 in turn, Editha handed to
Evelyn the owner's copy of TCT No. T-361747.29

Ruling of the Regional Trial Court

On November 26, 2009, the RTC dismissed the Complaint. It held that while Bernardo was the registered
owner of the subject property, Evelyn was a mortgagee in good faith because she was unaware that the
person who represented himself as Bernardo was an impostor. It noted that Evelyn caused the verification of
the title of the property with the RD and found the same to be free from any lien or encumbrance. Evelyn
also inspected the property and met Jovannie during such inspection. Finally, the RTC declared that there
was no showing of any circumstance that would cause Evelyn to doubt the validity of the title or the
property covered by it. In fine, Evelyn did all that was necessary before parting with her money and entering
Into the REM.

On March 19, 2010, the RTC denied Bernardo's Motion for Reconsideration. Thus, he appealed to the CA.

Ruling of the Court of Appeals

On October 22, 2012, the CA rendered the assailed Decision reversing and setting aside the RTC Decision.
The decretal portion of the CA Decision reads: ChanRobles Vi rtualaw lib rary

WHEREFORE, the appeal is GRANTED. The assailed dispositions of the RTC are REVERSED and SET ASIDE.
Tile complaint of Bernardo F. Dimailig is GRANTED. The Deed of Real Estate Mortgage constituted on the real
property covered by TCT No. T-361747 of the Registry of Deeds for the Province of Cavite, registered in his
name, is DECLARED null and void. Evelyn V. Ruiz is ORDERED to reconvey or return to him the owner's
duplicate copy of the said title. His claims for the payment of attorney's fees and costs of suits are DENIED.
Costs against Evelyn V. Ruiz.

SO ORDERED.30

The CA held that the "innocent purchaser (mortgagor in this case) for value protected by law is one who
purchases a titled land by virtue of a deed executed by the registered owner himself, not by a forged
deed."31 Since the Deed of REM was forged, and the title to the subject property is still in the name of the
rightful owner, and the mortgagor is a different person who only pretended to be the owner, then Evelyn
cannot seek protection from the cloak of the principle of mortgagee in good faith. The CA held that in this
case, ''the registered owner will not personally lose his title."32

The CA further decreed that Evelyn's claim of good faith cannot stand as she failed to verify the real identity
of the person introduced by Editha as Bernardo. It noted that the impostor did not even exhibit any
identification card to prove his identity; and, by Evelyn's admission, she merely relied on the representation
of Editha relative to the identity of "Bernardo." It also held that Evelyn transacted only with Editha despite
the fact that the purported owner was present during the inspection of the property, and during the
execution of the REM.

In sum, the CA ruled that for being a forged instrument, the Deed of REM was a nullity, and the owner's
copy of TCT No. T-361747 must be returned to its rightful owner, Bernardo.

Issue

Hence, Evelyn filed this Petition raising the sole assignment of error as follows: ChanRoble sVirt ualawli bra ry

[T]he Court of Appeals erred in holding that petitioner is not a mortgagee in good faith despite the presence
of substantial evidence to support such conclusion of fact.33

Petitioner’s Arguments

Petitioner insists that she is a mortgagee in good faith. She claims that she was totally unaware of the
fraudulent acts employed by Editha, Jovannie, and the impostor to obtain a loan from her. She stresses that
a person dealing with a property covered by a certificate of title is not required to look beyond what appears
on the face of the title.

Respondent's Arguments
Bernardo, on his end, contends that since the person who mortgaged the property was a mere impostor,
then Evelyn cannot claim that she was a mortgagee in good faith. This is because a mortgage is void where
the mortgagor has no title at all to the property subject of such mortgage.

Bernardo asserts that there were circumstances that should have aroused suspicion on the part of Evelyn
relative to the mortgagor's title over the property. He specifies that throughout the negotiation of the
mortgage, Evelyn transacted only with Editha, not with "Bernardo," despite the fact that Editha and the
other real estate agents who assisted Evelyn in the mortgage transaction were not armed with a power of
attorney.

Bernardo likewise stresses that although Evelyn caused the inspection of the subject property, she herself
admitted that she did not alight from the vehicle during the inspection, and she failed to verify the actual
occupant of the property.

Our Ruling

The Petition is without merit.

As a rule, the issue of whether a person is a mortgagee in good faith is not within the ambit of a Rule 45
Petition. The determination of presence or absence of good faith, and of negligence factual matters, which
are outside the scope of a petition for review on certiorari.34 Nevertheless, this rule allows certain exceptions
including cases where the RTC and the CA arrived at different or conflicting factual findings,35as in the case
at bench. As such, the Court deems it necessary to re-examine and re-evaluate the factual findings of the
CA as they differ with those of the RTC.

No valid mortgage will arise unless the mortgagor has a valid title or ownership over the mortgaged
property. By way of exception, a mortgagee can invoke that he or she derived title even if the mortgagor's
title on the property is defective, if he or she acted in good faith. In such instance, the mortgagee must
prove that no circumstance that should have aroused her suspicion on the veracity of the mortgagor's title
on the property was disregarded.36

Such doctrine of mortgagee in good faith presupposes "that the mortgagor, who is not the rightful owner of
the property, has already succeeded in obtaining a Torrens title over the property in his name and that,
after obtaining the said title, he succeeds in mortgaging the property to another who relies on what appears
on the said title."37 In short, the doctrine of mortgagee in good faith assumes that the title to the subject
property had already been transferred or registered in the name of the impostor who thereafter transacts
with a mortgagee who acted in good faith. In the case at bench, it must be emphasized that the title
remained to be registered in the name of Bernardo, the rightful and real owner, and not in the name of the
impostor.

The burden of proof that one is a mortgagee in good faith and for value lies with the person who claims such
status. A mortgagee cannot simply ignore facts that should have put a reasonable person on guard, and
thereafter claim that he or she acted in good truth under the belief that the mortgagor's title is not
defective.38 And, such good faith entails an honest intention to refrain from taking unconscientious
advantage of another.39

In other words, in order for a mortgagee to invoke the doctrine of mortgagee in good faith, the impostor
must have succeeded in obtaining a Torrens title in his name and thereafter in mortgaging the property.
Where the mortgagor is an impostor who only pretended to be the registered owner, and acting on such
pretense, mortgaged the property to another, the mortgagor evidently did not succeed in having the
property titled in his or her name, and the mortgagee cannot rely on such pretense as what appears on the
title is not the impostor's name but that of the registered owner.40

In this case, Evelyn insists that she is a mortgagee in good faith and for value. Thus, she has the burden to
prove such claim and must provide necessary evidence to support the same. Unfortunately, Evelyn failed to
discharge her burden.
First, the Deed of REM was established to be a forged instrument. As aptly discussed by the CA, Bernardo
did not and could not have executed it as he was abroad at the time of its execution, to wit: ChanRobles Vi rtua lawlib rary

Verily, Bernardo could not have affixed his signature on the said deed on January 26, 1998 for he left the
Philippines on October 19, 1997, x x x and only returned to the Philippines on March 21, 1998. Not only
that, his signature on his Seafarer's Identification and Record Book is remarkably different from the
signature on the assailed mortgage contract. The variance is obvious even to the untrained eye. This is
further bolstered by Evelyn's admission that Bernardo was not the one who represented himself as the
registered owner of the subject property and was not the one who signed the questioned contract. Thus,
there can be no denying the fact that the signature on the Deed of Real Estate Mortgage was not affixed or
signed by the same person.41

In fact, during pre-trial, both parties agreed that it was not Bernardo who signed as the mortgagor in the
Deed of REM. It was only an impostor - representing himself as Bernardo - who mortgaged the property.
This impostor is not only without rightful ownership on the mortgaged property, he also has no Torrens title
in his own name involving said property.

Simply put, for being a forged instrument, the Deed of REM is a nullity and conveys no title.42

Second, Evelyn cannot invoke the protection given to a mortgagee in good faith. As discussed, the title to
the subject property remained registered in the name of Bernardo. It was not transferred to the impostor's
name when Evelyn transacted with the latter. Hence, the principle of mortgagee in good faith finds no
application; correspondingly, Evelyn cannot not seek refuge therefrom.

Third, even assuming that the impostor has caused the property to be titled in his name as if he had rightful
ownership thereof, Evelyn would still not be deemed a mortgagee in good faith. This is because Evelyn did
not take the necessary steps to determine any defect in the title of the alleged owner of the mortgaged
property. She deliberately ignored pertinent facts that should have aroused suspicion on the veracity of the
title of the mortgagor "Bernardo."43

One, while ''Bernardo" introduced himself to Evelyn as the owner of the property, he did not present any
proof of identification. To recall, he only exhibited his community tax certificate and a picture when he
introduced himself to Evelyn. “Bernardo's" failure to sufficiently establish his identity should have aroused
suspicion on the part of Evelyn whether the person she was transacting with is the real Bernardo or a mere
impostor. She should have investigated further and verified the identity of "Bernardo" but she failed to do
so. She even admitted that she did not at all ask for any identification card from "Bernardo."

Two, Evelyn also ignored the fact that "Bernardo" did not participate in the negotiations/transactions leading
to the execution of the Deed of REM. Notably, no power of attorney was given to Editha who supposedly
transacted in behalf of Bernardo. Despite "Bernardo's" presence during the ocular inspection of the property
and execution of the mortgage contract, it was Editha who transacted with Evelyn. As gathered from the
testimony of Corazon, after the execution of the deed, Evelyn handed the loan amount of P300,000.00 to
Editha, not to "Bernardo," and it was Editha who handed to Evelyn the owner's copy of TCT No. T-361747.

Three, Evelyn likewise failed to ascertain the supposed title of "Bernardo" over the property. Evelyn
admitted that during the ocular inspection, she remained in the vehicle. She did not inquire from the subject
property's occupant or from the occupants of the surrounding properties if they knew "Bernardo" and
whether or not he owned the subject property.

Notably, the RTC misapprehended certain facts when it held that Evelyn inspected the property and met
Jovannie during the inspection. By her own account, Evelyn clarified that she met Jovannie for the first time
only when the latter visited her house to inform her that an impostor mortgaged Bernardo's property to her.

Four, the Court observes that Evelyn hastily granted the loan and entered into the mortgage contract. As
also testified by Corazon, a day after the supposed ocular inspection on the property, Evelyn and "Bernardo"
executed the Deed of REM even without Evelyn verifying the identity of the property's occupant as well as
the right of the mortgagor, if any, over the same. Indeed, where the mortgagee acted with haste in granting
the loan, without first determining the ownership of the property being mortgaged, the mortgagee cannot be
considered as an innocent mortgagee in good faith.44
Thus, considering that the mortgage contract was forged as it was entered into by Evelyn with an impostor,
the registered owner of the property, Bernardo, correspondingly did not lose his title thereon, and Evelyn did
not acquire any right or title on the property and cannot invoke that she is a mortgagee in good faith and for
value.45

WHEREFORE, the Petition is DENIED. Accordingly, the October 22, 2012 Decision of the Court of Appeals
in CA-G.R. CV No. 95046 is AFFIRMED.

SO ORDERED.

Carpio, J., (Chairperson), Brion, and Leonen, JJ., concur.


Mendoza, J., on official leave.

Endnotes:

1
CA rollo, pp. 70-81; penned by Associate Justice Normandie B. Pizarro and concurred in by Associate
Justices Remedios A. Salazar-Fernando and Manuel M. Barrios.

2
Records, pp. 124-133; penned by Judge Manuel A. Mayo.

3
Id. at 144.

4
Id. at 6.

5
Spelled in some parts of the records as Giovannie, Giovani, Jiovannie or Jovanie.

6
Records, pp. 8-9.

7
Id. at 1-5.

8
Id. at 16-19.

9
Id. at 33-34.

10
TSN, January 9, 2006, pp. 17, 20-A.

11
Id. at 25.

12
Id. at 30-31, 33-35, 37-39.

13
TSN, July 3, 2007, p. 5.

14
TSN, August 15, 2005, p. 18.

15
TSN, October 3, 2005, p, 36.

16
TSN, August 15, 2005, pp. 22-25.

17
Id. at 25.

18
TSN, October 3, 2005, pp. 13, 29.

19
TSN, August 15, 2005, pp. 12-16.
20
TSN, December 4, 2006, pp. 11-13.

21
Id. at 22-23.

22
Id. at 15-18.

23
Id. at 56-59.

24
Id. at 21-22.

25
cralaw red Id. at 59.

26
Id. at 60-64.

27
TSN, February 16, 2009, pp. 5-6.

28
Id. at 9-14.

29
Id.at 17.

30
CA rollo, p. 80.

31
Id. at 77.

32
Id. at 78.

Rollo, p, 8.
33

Claudio v. Spouses Saraza, G.R. No. 213286, August 26, 2015.


34

Ligtas v. People, G.R. No. 200571, August 17, 2015, 767 SCRA 1, 15.
35

Heirs of Gregorio Lopez v. Development Bank of the Philippines, G.R. 193551, November 19, 2014, 741
36

SCRA 153, 166-167.

Claudio v. Spouses Saraza, supra note 34; bold-facing omitted.


37

Republic v. Spouses de Guzman, 383 Phil. 151, 162 (2000).


38

Claudio v. Spouses Saraza, supra note 34.


39

40
See Ereña v. Querrer-Kauffman, 525 Phil. 381, 400 (2006).

41
CA rollo, p. 76.

Claudio v. Spouses Saraza, supra note 34.


42

43
Id.

44
See Land Bank of the Philippines v. Poblete, 704 Phil. 610, 623-624 (2013).

Ereña v. Querrer-Kauffman, supra note 40 at 403.


45
chanroblesv irt uallawl ibra ry
Estafa – The Case of Dishonesty and Deceit
by Atty. Joseph Plazo | Feb 6, 2016 | Criminal Law, Remedial Law | 0 comments
“Estafador!”
How often have we heard this exclamation between business partners? Deceit, breach of trust,
abuse of confidence, severe dishonesty. These constitute the crime of estafa.
Elements of Estafa in the Philippines
Estafa exists when two factors concur:
 One person is damaged by the acts of another and;
 The acts by the latter caused damage to the former is consummated by through trickery. Deceit
includes false pretense or abuse of trust in which case the damaged party parts with property or
money that the offender eventually gains for himself.
Estafa is Mala in Se
Deceit that results in material damage is inherently evil and must be punished. In the case of estafa,
the penalty is imprisonment and a fine. The most severe punishment is levied for monetary damage
exceeding P12,000.00.
The excerpted provision on estafa follows
Art. 315. Swindling (estafa). — Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period,
if the amount of the fraud is over 12,000 pesos 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. In such cases, and in connection with the accessory
penalties which may be imposed under the provisions of this Code, the penalty shall be termed
prision mayor or reclusion temporal, as the case may be.
How Does One Commit the Crime of Estafa
The felonious act of estafa presupposes abuse of confidence. Critical is that one of the parties
reposes trust and confidence in the offender. Let’s take an example.
Estafa commited by abuse of trust
Mark, the offender, has the obligation to hold the victim’s property in trust for the victim and the
offender is mandated to return the same property back to the victim. Estafa is thereby
consummated when the offender, instead of returning or delivering the same, misappropriates the
property.
Misappropriation entails that the offender uses the property as if it were his own, or uses the
property in a manner different from what had been previously agreed upon.
Let us assume that Mark was given the authority to take Vic’s Toyota86 in trust to be housed for 30
days and oil-changed. Instead of complying with the agreement, Mark takes the car for several joy
rides until it breaks down. Not only does he fail to repair the vehicle, he abandons the unit and hides
from the owner.
Mark is guilty of estafa.
Estafa commited by deceit
Estafa may also be committed by deceit. The most common method involves the use of false
pretenses to fool the victim into believing that the offender has the qualifications, power or influence
to do something, and the victim, relying on such pretenses, parts with his property or money. Let’s
look at an example.
Joy approaches a travel agency to contract the application for a visa. The agency’s representative
collects fees and promises to render the same within five days. Unknown to Joyce, the
representative never had the intention of rendering such service. When the due date arrives, Joy is
informed that the application had been denied.
The representative is guilty of estafa and the company employing Joy can be held subsidiarily liable.
In both cases, the victim suffers damage, which value can be ascertained by the courts.
Where does the aggrieved file the Estafa Case
Estafa has two essential elements which must concur. First element is deceit , or abuse of
confidence; and the second element is damage. As estafa is a continuing crime, the action may be
filed in any court where any of its essential elements were committed.
Thus, if deception or abuse of confidence was made in Quezon City and damage was caused
in Taguig, then the case may be filed either in Manila or in Makati.
Estafa Examples and Reasoning
Estafa By Deceit Example
Estafa can be commited by deceit whereby the offender misrepresents facts to the victim and the
latter relies on said misrepresenation, thereby parting with property or money. Damage ensues.
The case of Rosita Sy vs. People of the Philippines, GR No. 183879, April 14, 2010.sees Rosita
Sy charged with estafa for having deceived Felicidad Navarro. Rosita promised to process
Felicidad’s employment in Taiwan if Felicidad can pay her PHP120, 000.00. Felicidad agreed
contracted the job to Rosita. Therafter, Rosita gave false documents to Felicidad to be used by the
latter for her application. The Taiwanese authorities rejected the false documents. Rosita was
charged with estafa at the RTC
After due process at the lower court level, the Supreme Court ruled that Rosita should be held liable
for estafa by means of deceit. According to the Supreme Court, all the elements of estafa by
deceit were present.
First, Rosita falsely pretended that she had the qualifications to faciliate Felicidad’s employment in
Taiwan. Second Felicidad relied on Rosita misrepresentation, and paid her the amount of P120,
000.00. However, despite Felicidad’s payment, Rosita’s promises did not happen. So, the
transaction has caused damage to Felicidad.
It is easy to tell when there is estafa. Know the Elements:
 there should be an offender who represents himself to be someone who he
really is not, or to be someone capable of doing something which he really cannot
 and there should be a victim who believed and relied on the false representations of the offender.
What completes estafa is the damage that is caused to the victim who gave money or property
because he believed in the false representations of the offender.
Estafa by Abuse of Confidence
The case of Asiatrust is cited for the following example.
Sometime in the early part of 1997, petitioner Anthony Ng, then engaged in the business of building
and fabricating telecommunication towers under the trade name “Capitol Blacksmith and Builders,”
applied for a credit line of PhP 3,000,000 with Asiatrust Development Bank, Inc. (Asiatrust).

On May 30, 1997, Asiatrust approved petitioner’s loan application. Petitioner was then required to
sign several documents, among which are the Credit Line Agreement, Application and Agreement
for Irrevocable L/C, Trust Receipt Agreements,4 and Promissory Notes. Though the Promissory
Notes matured on September 18, 1997, the two (2) aforementioned Trust Receipt Agreements did
not bear any maturity dates as they were left unfilled or in blank by Asiatrust.

After petitioner received the goods, consisting of chemicals and metal plates from his suppliers, he
utilized them to fabricate the communication towers ordered from him by his clients which were
installed in three project sites, namely: Isabel, Leyte; Panabo, Davao; and Tongonan.
As petitioner realized difficulty in collecting from his client Islacom, he failed to pay his loan to
Asiatrust. Asiatrust then conducted a surprise ocular inspection of petitioner’s business through
Villarva S. Linga, Asiatrust’s representative appraiser. Linga thereafter reported to Asiatrust that he
found that approximately 97% of the subject goods of the Trust Receipts were “sold-out and that
only 3 % of the goods pertaining to PN No. 1963 remained.

On March 16, 1999, Remedial Account Officer Ma. Girlie C. Bernardez filed a Complaint-Affidavit
before the Office of the City Prosecutor of Quezon City.

Consequently, on September 12, 1999, an Information for Estafa, as defined and penalized under
Art. 315, par. 1(b) of the RPC in relation to Sec. 3, PD 115 or the Trust Receipts Law, was filed with
the RTC. The said Information reads:

That on or about the 30th day of May 1997, in Quezon City, Philippines, the above-named petitioner,
did then and there willfully, unlawfully, and feloniously defraud Ma. Girlie C. Bernardez by entering
into a Trust Receipt Agreement with said complainant whereby said petitioner as entrustee received
in trust from the said complainant various chemicals in the total sum of P4.5 million with the
obligation to hold the said chemicals in trust as property of the entruster with the right to sell the
same for cash and to remit the proceeds thereof to the entruster, or to return the said chemicals if
unsold; but said petitioner once in possession of the same, contrary to his aforesaid obligation under
the trust receipt agreement with intent to defraud did then and there misappropriated, misapplied
and converted the said amount to his own personal use and benefit and despite repeated demands
made upon him, said petitioner refused and failed and still refuses and fails to make good of his
obligation, to the damage and prejudice of the said Ma. Girlie C. Bernardez in the amount of
P2,971,650.00, Philippine Currency.

Upon arraignment, petitioner pleaded not guilty to the charges. Thereafter, a full-blown trial ensued.

During the pendency of the abovementioned case, conferences between petitioner and Asiatrust’s
Remedial Account Officer, Daniel Yap, were held. Afterward, a Compromise Agreement was drafted
by Asiatrust. One of the requirements of the Compromise Agreement was for petitioner to issue six
(6) postdated checks. Petitioner, in good faith, tried to comply by issuing two or three checks, which
were deposited and made good. The remaining checks, however, were not deposited as the
Compromise Agreement did not push through.

For his defense, petitioner argued that: (1) the loan was granted as his working capital and that the
Trust Receipt Agreements he signed with Asiatrust were merely preconditions for the grant and
approval of his loan; (2) the Trust Receipt Agreement corresponding to Letter of Credit No. 1963 and
the Trust Receipt Agreement corresponding to Letter of Credit No. 1964 were both contracts of
adhesion, since the stipulations found in the documents were prepared by Asiatrust in fine print; (3)
unfortunately for petitioner, his contract worth PhP 18,000,000 with Islacom was not yet paid since
there was a squabble as to the real ownership of the latter’s company, but Asiatrust was aware of
petitioner’s receivables which were more than sufficient to cover the obligation as shown in the
various Project Listings with Islacom, Smart Communications, and Infocom; (4) prior to the Islacom
problem, he had been faithfully paying his obligation to Asiatrust as shown in Official Receipt Nos.
549001, 549002, 565558, 577198, 577199, and 594986,6 thus debunking Asiatrust’s claim of fraud
and bad faith against him; (5) during the pendency of this case, petitioner even attempted to settle
his obligations as evidenced by the two United Coconut Planters Bank Checks7 he issued in favor of
Asiatrust; and (6) he had already paid PhP 1.8 million out of the PhP 2.971 million he owed as per
Statement of Account dated January 26, 2000.

Ruling of the Trial Court


After trial on the merits, the RTC, on May 29, 2001, rendered a Decision, finding petitioner guilty of
the crime of Estafa. The fallo of the Decision reads as follows:
WHEREFORE, judgment is hereby rendered finding the petitioner, Anthony L. Ng GUILTY beyond
reasonable doubt for the crime of Estafa defined in and penalized by Article 315, paragraph 1(b) of
the Revised Penal Code in relation to Section 3 of Presidential Decree 115, otherwise known as the
Trust Receipts Law, and is hereby sentenced to suffer the indeterminate penalty of from six (6)
years, eight (8) months, and twenty one (21) days of prision mayor, minimum, as the minimum
penalty, to twenty (20) years of reclusion temporal maximum, as the maximum penalty.

The petitioner is further ordered to return to the Asiatrust Development Bank Inc. the amount of Two
Million, Nine Hundred Seventy One and Six Hundred Fifty Pesos (P2,971,650.00) with legal rate of
interest computed from the filing of the information on September 21,1999 until the amount is fully
paid.

The Ruling of the Supreme Court

The Supreme Court reversed the findings of the Regional Trial Court and found that that petitioner is
not liable for Estafa both under the RPC and PD 115.

The key ground is that Goods Were Not Received in Trust

The first element of Estafa under Art. 315, par. 1(b) of the RPC requires that the money, goods or
other personal property must be 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 it. But
as we already discussed, the goods received by petitioner were not held in trust. They were also not
intended for sale and neither did petitioner have the duty to return them. They were only intended for
use in the fabrication of steel communication towers.

There is No Misappropriation of Goods or Proceeds

The second element of Estafa requires that there be misappropriation or conversion of such money
or property by the offender, or denial on his part of such receipt.

This is the very essence of Estafa under Art. 315, par. 1(b). The words “convert” and
“misappropriated” 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. To misappropriate for one’s
own use includes not only conversion to one’s personal advantage, but also every attempt to
dispose of the property of another without a right.

Petitioner argues that there was no misappropriation or conversion on his part, because his liability
for the amount of the goods subject of the trust receipts arises and becomes due only upon receipt
of the proceeds of the sale and not prior to the receipt of the full price of the goods.

Petitioner is correct. Thus, assuming arguendo that the provisions of PD 115 apply, petitioner is not
liable for Estafa because Sec. 13 of PD 115 provides that an entrustee is only liable for Estafa when
he fails “to turn over the proceeds of the sale of the goods x x x covered by a trust receipt to the
extent of the amount owing to the entruster or as appears in the trust receipt x x x in accordance with
the terms of the trust receipt.”

The trust receipt entered into between Asiatrust and petitioner states:
In case of sale I/we agree to hand the proceeds as soon as received to the BANK to apply against
the relative acceptance (as described above) and for the payment of any other indebtedness of
mine/ours to ASIATRUST DEVELOPMENT BANK.19 (Emphasis supplied.)

Clearly, petitioner was only obligated to turn over the proceeds as soon as he received payment.
However, the evidence reveals that petitioner experienced difficulties in collecting payments from his
clients for the communication towers. Despite this fact, petitioner endeavored to pay his
indebtedness to Asiatrust, which payments during the period from September 1997 to July 1998 total
approximately PhP 1,500,000. Thus, absent proof that the proceeds have been actually and fully
received by petitioner, his obligation to turn over the same to Asiatrust never arose.

What is more, under the Trust Receipt Agreement itself, no date of maturity was stipulated. The
provision left blank by Asiatrust is as follows:

x x x and in consideration thereof, I/we hereby agree to hold said goods in Trust for the said Bank
and as its property with liberty to sell the same for its account within ________ days from the date of
execution of the Trust Receipt x x x20

In fact, Asiatrust purposely left the space designated for the date blank, an action which in ordinary
banking transactions would be noted as highly irregular. Hence, the only way for the obligation to
mature was for Asiatrust to demand from petitioner to pay the obligation, which it never did.

Again, it also makes the Court wonder as to why Asiatrust decided to leave the provisions for the
maturity dates in the Trust Receipt agreements in blank, since those dates are elemental part of the
loan. But then, as can be gleaned from the records of this case, Asiatrust also knew that the capacity
of petitioner to pay for his loan also hinges upon the latter’s receivables from Islacom, Smart, and
Infocom where he had ongoing and future projects for fabrication and installation of steel
communication towers and not from the sale of said goods. Being a bank, Asiatrust acted
inappropriately when it left such a sensitive bank instrument with a void circumstance on an
elementary but vital feature of each and every loan transaction, that is, the maturity dates. Without
stating the maturity dates, it was impossible for petitioner to determine when the loan will be due.

Moreover, Asiatrust was aware that petitioner was not engaged in selling the subject goods and that
petitioner will use them for the fabrication and installation of communication towers. Before granting
petitioner the credit line, as aforementioned, Asiatrust conducted an investigation, which showed that
petitioner fabricated and installed communication towers for well-known communication companies
to be installed at designated project sites. In fine, there was no abuse of confidence to speak of nor
was there any intention to convert the subject goods for another purpose, since petitioner did not
withhold the fact that they were to be used to fabricate steel communication towers to Asiatrust.
Hence, no malice or abuse of confidence and misappropriation occurred in this instance due to
Asiatrust’s knowledge of the facts.

Furthermore, Asiatrust was informed at the time of petitioner’s application for the loan that the
payment for the loan would be derived from the collectibles of his clients. Petitioner informed
Asiatrust that he was having extreme difficulties in collecting from Islacom the full contracted price of
the towers. Thus, the duty of petitioner to remit the proceeds of the goods has not yet arisen since
he has yet to receive proceeds of the goods. Again, petitioner could not be said to have
misappropriated or converted the proceeds of the transaction since he has not yet received the
proceeds from his client, Islacom.
This Court also takes judicial notice of the fact that petitioner has fully paid his obligation to Asiatrust,
making the claim for damage and prejudice of Asiatrust baseless and unfounded. Given that the
acceptance of payment by Asiatrust necessarily extinguished petitioner’s obligation, then there is no
longer any obligation on petitioner’s part to speak of, thus precluding Asiatrust from claiming any
damage. This is evidenced by Asiatrust’s Affidavit of Desistance21 acknowledging full payment of
the loan.

Reasonable Doubt Exists

In the final analysis, the prosecution failed to prove beyond reasonable doubt that petitioner was
guilty of Estafa under Art. 315, par. 1(b) of the RPC in relation to the pertinent provision of PD 115 or
the Trust Receipts Law; thus, his liability should only be civil in nature.

While petitioner admits to his civil liability to Asiatrust, he nevertheless does not have criminal
liability. It is a well-established principle that person is presumed innocent until proved guilty. To
overcome the presumption, his guilt must be shown by proof beyond reasonable doubt. Thus, we
held in People v. Mariano22 that while the principle does not connote absolute certainty, it means
the degree of proof which produces moral certainty in an unprejudiced mind of the culpability of the
accused. Such proof should convince and satisfy the reason and conscience of those who are to act
upon it that the accused is in fact guilty. The prosecution, in this instant case, failed to rebut the
constitutional innocence of petitioner and thus the latter should be acquitted.

At this point, the ruling of this Court in Colinares v. Court of Appeals is very apt, thus:

The practice of banks of making borrowers sign trust receipts to facilitate collection of loans
and place them under the threats of criminal prosecution should they be unable to pay it may
be unjust and inequitable, if not reprehensible. Such agreements are contracts of adhesion
which borrowers have no option but to sign lest their loan be disapproved. The resort to this
scheme leaves poor and hapless borrowers at the mercy of banks, and is prone to
misinterpretation x x x.23
Such is the situation in this case.
Asiatrust’s intention became more evident when, on March 30, 2009, it, along with petitioner, filed
their Joint Motion for Leave to File and Admit Attached Affidavit of Desistance to qualify the Affidavit
of Desistance executed by Felino H. Esquivas, Jr., attorney-in-fact of the Board of Asiatrust, which
acknowledged the full payment of the obligation of the petitioner and the successful mediation
between the parties.
From the foregoing considerations, we deem it unnecessary to discuss and rule upon the other
issues raised in the appeal.
WHEREFORE, the CA Decision dated August 29, 2003 affirming the RTC Decision dated May 29,
2001 is SET ASIDE. Petitioner ANTHONY L. NG is hereby ACQUITTED of the charge of violation of
Art. 315, par. 1(b) of the RPC in relation to the pertinent provision of PD 115.
SO ORDERED.