Title: Laurel vs.

Abrogar

Topic: Theft
Case initially filed: Theft against personal property

Facts: PLDT alleges that one of the alternative calling patterns that constitute network fraud and violate
its network integrity is that which is known as International SImple Resale (ISR). ISR is a method of
routing and completing international long distance calls using International Private Leased Lines (IPL),
cables, antenna or air wave or frequency, which connect directly to the local or domestic exchange
facilities of the terminating country (country where the call is destined). The IPL is linked to switching
equipment which is connected to a PLDT telephone line. In the process, the calls bypass the
International Gateway Facility (IGF) which is operated and maintained by PLDT through a Certificate
of Public Convenience and Necessity issued by National Telecommunications Commission.

One such alternative calling service is that offered by Baynet Co., Ltd which sells Bay Super Orient
Card phone cards. With said card, one is entitled to a 27-min call to the Philippines for about 37.03
yen per minute. After dialing the ISR access number indicated in the phone card, the ISR operator
requests the subscriber to give the PIN number also indicated in the phone card. Once the callers
identity (as purchaser of the phone card) is confirmed, the ISR operator will then provide a Philippine
local line to the requesting caller via the IPL. According to PLDT, calls made through the IPL never
pass the toll center of IGF operators in the Philippines. Using the local line, the Baynet card user is able
to place a call to any point in the Philippines, provided the local line is National Direct Dial (NDD)
capable.

PLDT asserts that Baynet conducts its ISR activities by utilizing an IPL to course its incoming
international long distance calls from Japan. The IPL is linked to switching equipment, which is then
connected to PLDT telephone lines/numbers and equipment, with Baynet as subscriber. Through the
use of the telephone lines and other auxiliary equipment, Baynet is able to connect an international long
distance call from Japan to any part of the Philippines, and make it appear as a call originating from
Metro Manila. Consequently, the operator of an ISR is able to evade payment of access, termination or
bypass charges and accounting rates, as well as compliance with the regulatory requirements of the
NTC. Thus, the ISR operator offers international telecommunication services at a lower rate, to the
damage and prejudice of legitimate operators like PLDT.6

PLDT pointed out that Baynet utilized the following its equipment for its ISR activities:

lines, cables, and antennas or equipment or device capable of transmitting air waves or frequency, such
as an IPL and telephone lines and equipment; computers, applying the prescribed process of the
information and supplying the result of this process; modems; multiplexers; switching equipment; and
software, diskettes, and tapes

PLDT also discovered that Baynet subscribed to a total of 123 PLDT telephone lines/numbers. Based
on the Traffic Study conducted on the volume of calls passing through Baynets ISR network which
bypass the IGF toll center, PLDT incurred an estimated monthly loss of P10,185,325.96. Records at the
Securities and Exchange Commission (SEC) also revealed that Baynet was not authorized to provide
international or domestic long distance telephone service in the country. Board is composed of 2
Japanese and 3 Filipinos.

Upon complaint of PLDT for network fraud and on the strength of two search warrants, the NBI
searched Baynet's office at Kalayaan Avenue, Makati. Four were arrested while in the act of manning
the operations. Also seized were equipment used in operating ISR. The four were charged with theft
under Art. 308 of the RPC. After preliminary investigation, the State Prosecutor filed an Amended
Information impleading Laurel ( a partner in the law firm of Ingles, Laurel and Salinas, and until Nov.
19, 1999, a member of the board of directors and corporate secretary of Baynet), and the other
members of the board.

Accused Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)" on the ground that the
factual allegations in the Amended Information do not constitute the felony of theft under Article 308
of the Revised Penal Code. He averred that the Revised Penal Code, or any other special penal law for
that matter, does not prohibit ISR operations. He also asserted that PLDT is compensated for the
callers use of its facilities by way of rental; for an outgoing overseas call, PLDT charges the caller per
minute, based on the duration of the call. Thus, no personal property was stolen from PLDT. According
to Laurel, the P20,370,651.92 stated in the Information, if anything, represents the rental for the use of
PLDT facilities, and not the value of anything owned by it. Finally, he averred that the allegations in
the Amended Information are already subsumed under the Information for violation of Presidential
Decree (P.D.) No. 401 filed and pending in the Metropolitan Trial Court of Makati City.

The prosecution, through private complainant PLDT, opposed the motion, contending that the movant
unlawfully took personal property belonging to it, as follows: 1) intangible telephone services that are
being offered by PLDT and other telecommunication companies, i.e., the connection and
interconnection to their telephone lines/facilities; 2) the use of those facilities over a period of time; and
3) the revenues derived in connection with the rendition of such services and the use of such facilities.

PLDT further posits that business revenues or the income derived in connection with the rendition of
such services and the use of its telephone network, lines or facilities are personal properties under
Article 308 of the Revised Penal Code; so is the use of said telephone services/telephone network, lines
or facilities which allow electronic voice signals to pass through the same and ultimately to the called
partys number. It is akin to electricity which, though intangible property, may nevertheless be
appropriated and can be the object of theft. The use of respondent PLDTs telephone network, lines, or
facilities over a period of time for consideration is the business that it provides to its customers, which
enables the latter to send various messages to intended recipients. Such use over a period of time is
akin to merchandise which has value and, therefore, can be appropriated by another. According to
respondent PLDT, this is what actually happened when petitioner Laurel and the other accused below
conducted illegal ISR operations.

In other words, the business of PLDT was being stolen by Baynet.

Issue :Whether the motion to quash must be granted? Whether or not the term business is personal
property within the meaning of Art. 308 of the RPC?

RTC: Motion to Quash on the ground that the Information does not constitute the offense charged filed
by Laurel was denied, MR denied

CA: Appeal was denied. The CA opined that PLDTs business of providing international calls is
personal property which may be the object of theft, and cited United States v. Carlos28 to support such
conclusion. The tribunal also cited Strochecker v. Ramirez,29 where this Court ruled that one-half
interest in a days business is personal property under Section 2 of Act No. 3952, otherwise known as
the Bulk Sales Law. The appellate court held that the operations of the ISR are not subsumed in the
charge for violation of P.D. No. 401.


Ruling:
We find and so hold that the international telephone calls placed by Bay Super Orient Card holders, the
telecommunication services provided by PLDT and its business of providing said services are not
personal properties under Article 308 of the Revised Penal Code.
An information or complaint for simple theft must allege the following elements: (a) the taking of
personal property; (b) the said property belongs to another; (c) the taking be done with intent to gain;
and (d) the taking be accomplished without the use of violence or intimidation of person/s or force
upon things.
51

One is apt to conclude that "personal property" standing alone, covers both tangible and intangible
properties and are subject of theft under the Revised Penal Code. But the words "Personal property"
under the Revised Penal Code must be considered in tandem with the word "take" in the law. The
statutory definition of "taking" and movable property indicates that, clearly, not all personal properties
may be the proper subjects of theft. The general rule is that, only movable properties which have
physical or material existence and susceptible of occupation by another are proper objects of theft.
5

Thus, movable properties under Article 308 of the Revised Penal Code should be distinguished from
the rights or interests to which they relate. Thus, right to produce oil, good will or an interest in
business, or the right to engage in business, credit or franchise are properties. So is the credit line
represented by a credit card. However, they are not proper subjects of theft or larceny because they are
without form or substance, the mere "breath" of the Congress. On the other hand, goods, wares and
merchandise of businessmen and credit cards issued to them are movable properties with physical and
material existence and may be taken by another; hence, proper subjects of theft.
There is "taking" of personal property, and theft is consummated when the offender unlawfully
acquires possession of personal property even if for a short time; or if such property is under the
dominion and control of the thief. The taker, at some particular amount, must have obtained complete
and absolute possession and control of the property adverse to the rights of the owner or the lawful
possessor thereof.
56
It is not necessary that the property be actually carried away out of the physical
possession of the lawful possessor or that he should have made his escape with it.
57
Neither
asportation nor actual manual possession of property is required. Constructive possession of the thief of
the property is enough.
58

The essence of the element is the taking of a thing out of the possession of the owner without his
privity and consent and without animus revertendi.
59

Taking may be by the offenders own hands, by his use of innocent persons without any felonious
intent, as well as any mechanical device, such as an access device or card, or any agency, animate or
inanimate, with intent to gain. Intent to gain includes the unlawful taking of personal property for the
purpose of deriving utility, satisfaction, enjoyment and pleasure.
60

We agree with the contention of the respondents that intangible properties such as electrical energy and
gas are proper subjects of theft. The reason for this is that gas or electricity are capable of appropriation
by another other than the owner. Gas and electrical energy may be taken, carried away and
appropriated. Electricity, like gas, may be seen and felt. Electricity, the same as gas, is a valuable
article of merchandise, bought and sold like other personal property and is capable of appropriation by
another and being transported. Electric energy is manufactured and sold in determinate quantities at a
fixed price, precisely as are coal, kerosene oil, and gas. It may be conveyed to the premises of the
consumer, stored in cells of different capacity known as an accumulator; or it may be sent through a
wire, just as gas or oil may be transported either in a close tank or forced through a pipe.
Gas and electrical energy should not be equated with business or services provided by business
entrepreneurs to the public. Business does not have an exact definition. Business is referred as that
which occupies the time, attention and labor of men for the purpose of livelihood or profit. It embraces
everything that which a person can be employed.
66
Business may also mean employment, occupation
or profession. Business is also defined as a commercial activity for gain benefit or advantage.
67

Business, like services in business, although are properties, are not proper subjects of theft under the
Revised Penal Code because the same cannot be "taken" or "occupied." If it were otherwise, as claimed
by the respondents, there would be no juridical difference between the taking of the business of a
person or the services provided by him for gain, vis--vis, the taking of goods, wares or merchandise,
or equipment comprising his business.
68
If it was its intention to include "business" as personal
property under Article 308 of the Revised Penal Code, the Philippine Legislature should have spoken in
language that is clear and definite: that business is personal property under Article 308 of the Revised
Penal Code.
69

We agree with the contention of the petitioner that, as gleaned from the material averments of the
Amended Information, he is charged of "stealing the international long distance calls belonging to
PLDT" and the use thereof, through the ISR, contrary to stealing 20 million pesos as the aggregate
amount of access and transmission charges expected from users of Baynet.
In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal property
without the consent of the owner thereof, the Philippine legislature could not have contemplated the
human voice which is converted into electronic impulses or electrical current which are transmitted to
the party called through the PSTN of respondent PLDT and the ISR of Baynet Card Ltd. within its
coverage. When the Revised Penal Code was approved, on December 8, 1930, international telephone
calls and the transmission and routing of electronic voice signals or impulses emanating from said calls,
through the PSTN, IPL and ISR, were still non-existent. Case law is that, where a legislative history
fails to evidence congressional awareness of the scope of the statute claimed by the respondents, a
narrow interpretation of the law is more consistent with the usual approach to the construction of the
statute. Penal responsibility cannot be extended beyond the fair scope of the statutory mandate.
70

Respondent PLDT does not acquire possession, much less, ownership of the voices of the telephone
callers or of the electronic voice signals or current emanating from said calls. The human voice and the
electronic voice signals or current caused thereby are intangible and not susceptible of possession,
occupation or appropriation by the respondent PLDT or even the petitioner, for that matter. PLDT
merely transmits the electronic voice signals through its facilities and equipment. Baynet Card Ltd.,
through its operator, merely intercepts, reroutes the calls and passes them to its toll center. Indeed, the
parties called receive the telephone calls from Japan.
The conduct complained of by respondent PLDT is reminiscent of "phreaking" (a slang term for the
action of making a telephone system to do something that it normally should not allow by "making the
phone company bend over and grab its ankles"). A "phreaker" is one who engages in the act of
manipulating phones and illegally markets telephone services.
73
Unless the phone company replaces
all its hardware, phreaking would be impossible to stop. The phone companies in North America were
impelled to replace all their hardware and adopted full digital switching system known as the Common
Channel Inter Office Signaling. Phreaking occurred only during the 1960s and 1970s, decades after
the Revised Penal Code took effect.
The petitioner is not charged, under the Amended Information, for theft of telecommunication or
telephone services offered by PLDT. Even if he is, the term "personal property" under Article 308 of
the Revised Penal Code cannot be interpreted beyond its seams so as to include "telecommunication or
telephone services" or computer services for that matter. The word "service" has a variety of meanings
dependent upon the context, or the sense in which it is used; and, in some instances, it may include a
sale. In the case of PLDT, it is to render local and international telecommunications services and such
other services as authorized by the CPCA issued by the NTC. Even at common law, neither time nor
services may be taken and occupied or appropriated.
76
A service is generally not considered property
and a theft of service would not, therefore, constitute theft since there can be no caption or
asportation.
77
Neither is the unauthorized use of the equipment and facilities of PLDT by the petitioner
theft under the aforequoted provision of the Revised Penal Code.
78

If taking of telecommunication services or the business of a person, is to be proscribed, it must be by
special statute
79
or an amendment of the Revised Penal Code. Several states in the United States, such
as New York, New Jersey, California and Virginia, realized that their criminal statutes did not contain
any provisions penalizing the theft of services and passed laws defining and penalizing theft of
telephone and computer services.
In the State of Alabama, Section 13A-8-10(a)(1) of the Penal Code of Alabama of 1975 penalizes theft
of services:
"A person commits the crime of theft of services if: (a) He intentionally obtains services known by him
to be available only for compensation by deception, threat, false token or other means to avoid payment
for the services "
In the Philippines, Congress has not amended the Revised Penal Code to include theft of services or
theft of business as felonies. Instead, it approved a law, Republic Act No. 8484, otherwise known as the
Access Devices Regulation Act of 1998, on February 11, 1998. Under the law, an access device means
any card, plate, code, account number, electronic serial number, personal identification number and
other telecommunication services, equipment or instrumentalities-identifier or other means of account
access that can be used to obtain money, goods, services or any other thing of value or to initiate a
transfer of funds other than a transfer originated solely by paper instrument. Among the prohibited acts
enumerated in Section 9 of the law are the acts of obtaining money or anything of value through the use
of an access device, with intent to defraud or intent to gain and fleeing thereafter; and of effecting
transactions with one or more access devices issued to another person or persons to receive payment or
any other thing of value. Under Section 11 of the law, conspiracy to commit access devices fraud is a
crime. However, the petitioner is not charged of violation of R.A. 8484.