G.R. No.

L-16513

January 18, 1921

THE UNITED STATES, plaintiff-appellee, vs.MANUEL

TAMBUNTING, defendant-appellant.
Manuel Garcia Goyena for appellant.Acting Attorney-General Feria
for appellee.
STREET, J.:
This appeal was instituted for the purpose of reversing a judgment of
the Court of First Instance of the city of Manila, finding the accused,
Manuel Tambunting, guilty of stealing a quantity of gas belonging to
the Manila Gas Corporation, and sentencing him to undergo
imprisonment for two months and one day, of arresto mayor, with the
accessories prescribed by law; to indemnify the said corporation in
the sum of P2, with subsidiary imprisonment in case of insolvency;
and to pay the costs.
The evidence submitted in behalf of the prosecution shows that in
January of the year 1918, the accused and his wife became
occupants of the upper floor of the house situated at No. 443, Calle
Evangelista, in the city of Manila. In this house the Manila Gas
Corporation had previously installed apparatus for the delivery of gas
on both the upper and lower floors, consisting of the necessary piping
and a gas meter, which last mentioned apparatus was installed
below. When the occupants at whose request this installation had
been made vacated the premises, the gas company disconnected the
gas pipe and removed the meter, thus cutting off the supply of gas
from said premises.
Upon June 2, 1919, one of the inspectors of the gas company visited
the house in question and found that gas was being used, without the
knowledge and consent of the gas company, for cooking in the
quarters occupied by the defendant and his wife: to effect which a
short piece of iron pipe had been inserted in the gap where the gas
meter had formerly been placed, and piece of rubber tubing had been
used to connect the gas pipe of rubber tubing had been used to
connect the gas pipe in kitchen with the gas stove, or plate, used for
cooking.

At the time this discovery was made, the accused, Manuel

Tambunting, was not at home, but he presently arrived and admitted
to the agent to the gas company that he had made the connection
with the rubber tubing between the gas pipe and the stove, though he
denied making the connection below. He also admitted that he knew
he was using gas without the knowledge of the company and that he
had been so using it for probably two or three months.
The clandestine use of gas by the accused in the manner stated is
thus established in our opinion beyond a doubt; and inasmuch as the
animo lucrandi is obvious, it only remains to consider, first, whether
gas can be the subject to larceny and, secondly, whether the quantity
of gas appropriated in the two months, during which the accused
admitted having used the same, has been established with sufficient
certainty to enable the court to fix an appropriate penalty.
Some legal minds, perhaps more academic than practical, have
entertained doubt upon the question whether gas can be the subject
of larceny; but no judicial decision has been called to our attention
wherein any respectable court has refused to treat it as such. In U.S.
vs. Genato (15 Phil., 170, 175), this court, speaking through Mr.
Justice Torres, said ". . . the right of the ownership of electric current
is secured by article 517 and 518 of the Penal Code; the application
of these articles in cases of subtraction of gas, a fluid used for
lighting, and in some respects resembling electricity, is confirmed by
the rule laid down in the decisions of the supreme court of Spain of
January 20, 1887, and April 1, 1897, construing and enforcing the
provisions of articles 530 and 531 of the Penal Code of that country,
articles identical with articles 517 and 518 of the code in force in
these Islands." These expressions were used in a case which
involved the subtraction and appropriation of electrical energy and the
court held, in accordance with the analogy of the case involving the
theft of gas, that electrical energy could also be the subject of theft.
The same conclusion was reached in U.S. vs. Carlos (21 Phil., 553),
which was also a case of prosecution for stealing electricity.
The precise point whether the taking of gas may constitute larceny
has never before, so far as the present writer is aware, been the
subject of adjudication in this court, but the decisions of Spanish,
English, and American courts all answer the question in the

affirmative. (See U.S. vs. Carlos, 21 Phil., 553, 560.)

In this connection it will suffice to quote the following from the topic
"Larceny," at page 34, Vol. 17, of Ruling Case Law:
There is nothing in the nature of gas used for illuminating purposes
which renders it incapable of being feloniously taken and carried
away. It is a valuable article of merchandise, bought and sold like
other personal property, susceptible of being severed from a mass or
larger quantity and of being transported from place to place. Likewise
water which is confined in pipes and electricity which is conveyed by
wires are subjects of larceny."
As to the amount and value of the gas appropriated by the accused in
the period during which he admits having used it, the proof is not
entirely satisfactory. Nevertheless we think the trial court was justified
in fixing the value of the gas at P2 per month, which is the minimum
charge for gas made by the gas company, however small the amount
consumed. That is to say, no person desiring to use gas at all for
domestic purposes can purchase the commodity at a lower rate per
month than P2. There was evidence before the court showing that the
general average of the monthly bills paid by consumers throughout
the city for the use of gas in a kitchen equipped like that used by the
accused is from P18 to 20, while the average minimum is about P8
per month. We think that the facts above stated are competent
evidence; and the conclusion is inevitable that the accused is at least
liable to the extent of the minimum charge of P2 per month. The
market value of the property at the time and place of the theft is of
court the proper value to be proven (17 R.C.L., p. 66); and when it is
found that the least amount that a consumer can take costs P2 per
months, this affords proof that the amount which the accused took
was certainly worth that much. Absolute certainty as to the full
amount taken is of course impossible, because no meter wad used;
but absolute certainty upon this point is not necessary, when it is
certain that the minimum that could have been taken was worth a
determinable amount.
It appears that before the present prosecution was instituted, the
accused had been unsuccessfully prosecuted for an infraction of
section 504 of the Revised Ordinances of the city of Manila, under a

complaint charging that the accused, not being a registered installer

of gas equipment had placed a gas installation in the house at No.
443, Calle Evangelista. Upon this it is argued for the accused that,
having been acquitted of that charge, he is not now subject to
prosecution for the offense of theft, having been acquitted of the
former charge. The contention is evidently not well-founded, since the
two offenses are of totally distinct nature. Furthermore, a prosecution
for violation of a city ordinance is not ordinarily a bar to a subsequent
prosecution for the same offense under the general law of the land.
(U.S. vs. Garcia Gavieres, 10 Phil., 694.)
The conclusion is that the accused is properly subject to punishment,
under No. 5 of article 518 of the Penal Code, for the gas taken in the
course of two months a the rate of P2 per month. There being no
aggravating or attenuating circumstance to be estimated, it results
that the proper penalty is two months and one day of arresto mayor,
as fixed by the trial court. The judgment will therefore be affirmed,
with costs against the appellant, it being understood that the amount
of the indemnity which the accused shall pay to the gas company is
P4, instead of P2, with subsidiary imprisonment for one day in case of
insolvency. So ordered.
DIGEST:
FACTS:
Respondent Manuel Tambunting and his wife became the occupants of the upper
floor of a house situated in Manila.
In the house, the Manila Gas Corporation had previously installed apparatus for
the delivery of gas on both the upper and lower floors.
When the occupants who requested for the installation vacated the premises, the
gas company disconnected the gas pipe, removed the meter, thus cutting off the
gas supply from the said premises.
Then one day, while Tambunting was away, an inspector of the gas company
discovered that the gas was being used for cooking in quarters of the respondent,
without the knowledge and consent of the gas company.
Tambunting admitted that he was using the gas without the knowledge and
consent of the company for 2-3 months but denied making the connection where
the meter used to be installed.
Later, the gas company sued Tambunting for stealing a quantity of gas belonging
to the Manila Gas Corporation.
The lower court convicted Tambunting of the offense charged.

ISSUE: 1. Whether the taking of gas may constitute larceny (theft or robberry) though it
has never been the subject of adjudication in court.
2. whether the quantity of gas appropriated in the two months, during which the
accused admitted having used the same, has been established with sufficient
certainty to enable the court to fix an appropriate penalty.
HELD: YES.

Gas has character of personal property, thus, it may be subject of theft or robbery.
o There is nothing in the nature of gas used for illuminating purposes which
renders it incapable of being feloniously taken and carried away. It is a
valuable article of merchandise, bought and sold like other personal
property, susceptible of being severed from a mass or larger quantity and
of being transported from place to place. Likewise water which is confined
in pipes and electricity which is conveyed by wires are subjects of larceny.
2. The trial court was justified in fixing the value of the gas at P2 per month,
which is the minimum charge for gas made by the gas company, however
small the amount consumed.
i. There was evidence before the court showing that the general
average of the monthly bills paid by consumers throughout the
city for the use of gas in a kitchen equipped like that used by the
accused is from P18 to 20, while the average minimum is about
P8 per month. We think that the facts above stated are competent
evidence; and the conclusion is inevitable that the accused is at
least liable to the extent of the minimum charge of P2 per month.

G.R. No. 155076

February 27, 2006

LUIS MARCOS P. LAUREL, Petitioner, vs.HON. ZEUS C.

ABROGAR, Presiding Judge of the Regional Trial Court, Makati
City, Branch 150, PEOPLE OF THE PHILIPPINES& PHILIPPINE
LONG DISTANCE TELEPHONE COMPANY, Respondents.
DECISION
CALLEJO, SR., J.:
Before us is a Petition for Review on Certiorari of the Decision 1 of the
Court of Appeals (CA) in CA-G.R. SP No. 68841 affirming the Order
issued by Judge Zeus C. Abrogar, Regional Trial Court (RTC), Makati
City, Branch 150, which denied the "Motion to Quash (With Motion to
Defer Arraignment)" in Criminal Case No. 99-2425 for theft.
Philippine Long Distance Telephone Company (PLDT) is the holder of
a legislative franchise to render local and international
telecommunication services under Republic Act No. 7082. 2 Under
said law, PLDT is authorized to establish, operate, manage, lease,
maintain and purchase telecommunication systems, including
transmitting, receiving and switching stations, for both domestic and
international calls. For this purpose, it has installed an estimated 1.7
million telephone lines nationwide. PLDT also offers other services as
authorized by Certificates of Public Convenience and Necessity
(CPCN) duly issued by the National Telecommunications Commission
(NTC), and operates and maintains an International Gateway Facility
(IGF). The PLDT network is thus principally composed of the Public
Switch Telephone Network (PSTN), telephone handsets and/or
telecommunications equipment used by its subscribers, the wires and
cables linking said telephone handsets and/or telecommunications
equipment, antenna, the IGF, and other telecommunications
equipment which provide interconnections.3
1avvphil.net

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 (the country where the

call is destined). The IPL is linked to switching equipment which is

connected to a PLDT telephone line/number. In the process, the calls
bypass the IGF found at the terminating country, or in some
instances, even those from the originating country.4
One such alternative calling service is that offered by Baynet Co., Ltd.
(Baynet) which sells "Bay Super Orient Card" phone cards to people
who call their friends and relatives in the Philippines. With said card,
one is entitled to a 27-minute call to the Philippines for about 37.03
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. 5
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 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 or any equipment or
device capable of accepting information applying the prescribed
process of the information and supplying the result of this process;
modems or any equipment or device that enables a data terminal

equipment such as computers to communicate with other data

terminal equipment via a telephone line; multiplexers or any
equipment or device that enables two or more signals from different
sources to pass through a common cable or transmission line;
switching equipment, or equipment or device capable of connecting
telephone lines; and software, diskettes, tapes or equipment or
device used for recording and storing information. 7
PLDT also discovered that Baynet subscribed to a total of 123 PLDT
telephone lines/numbers.8 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 P10,185,325.96.9 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. The following are its officers: Yuji Hijioka, a Japanese
national (chairman of the board of directors); Gina C. Mukaida, a
Filipina (board member and president); Luis Marcos P. Laurel, a
Filipino (board member and corporate secretary); Ricky Chan Pe, a
Filipino (board member and treasurer); and Yasushi Ueshima, also a
Japanese national (board member).
Upon complaint of PLDT against Baynet for network fraud, and on the
strength of two search warrants10 issued by the RTC of Makati,
Branch 147, National Bureau of Investigation (NBI) agents searched
its office at the 7th Floor, SJG Building, Kalayaan Avenue, Makati City
on November 8, 1999. Atsushi Matsuura, Nobuyoshi Miyake, Edourd
D. Lacson and Rolando J. Villegas were arrested by NBI agents while
in the act of manning the operations of Baynet. Seized in the
premises during the search were numerous equipment and devices
used in its ISR activities, such as multiplexers, modems, computer
monitors, CPUs, antenna, assorted computer peripheral cords and
microprocessors, cables/wires, assorted PLDT statement of
accounts, parabolic antennae and voltage regulators.
State Prosecutor Ofelia L. Calo conducted an inquest investigation
and issued a Resolution11 on January 28, 2000, finding probable
cause for theft under Article 308 of the Revised Penal Code and
Presidential Decree No. 40112 against the respondents therein,
including Laurel.

On February 8, 2000, State Prosecutor Calo filed an Information with

the RTC of Makati City charging Matsuura, Miyake, Lacson and
Villegas with theft under Article 308 of the Revised Penal Code. After
conducting the requisite preliminary investigation, the State
Prosecutor filed an Amended Information impleading Laurel (a
partner in the law firm of Ingles, Laurel, Salinas, and, until November
19, 1999, a member of the board of directors and corporate secretary
of Baynet), and the other members of the board of directors of said
corporation, namely, Yuji Hijioka, Yasushi Ueshima, Mukaida, Lacson
and Villegas, as accused for theft under Article 308 of the Revised
Penal Code. The inculpatory portion of the Amended Information
reads:
On or about September 10-19, 1999, or prior thereto, in Makati City,
and within the jurisdiction of this Honorable Court, the accused,
conspiring and confederating together and all of them mutually
helping and aiding one another, with intent to gain and without the
knowledge and consent of the Philippine Long Distance Telephone
(PLDT), did then and there willfully, unlawfully and feloniously take,
steal and use the international long distance calls belonging to PLDT
by conducting International Simple Resale (ISR), which is a method
of routing and completing international long distance calls using lines,
cables, antennae, and/or air wave frequency which connect directly to
the local or domestic exchange facilities of the country where the call
is destined, effectively stealing this business from PLDT while using
its facilities in the estimated amount of P20,370,651.92 to the
damage and prejudice of PLDT, in the said amount.
CONTRARY TO LAW.13
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 claimed that telephone calls with the use
of PLDT telephone lines, whether domestic or international, belong to
the persons making the call, not to PLDT. He argued that the caller
merely uses the facilities of PLDT, and what the latter owns are the
telecommunication infrastructures or facilities through which the call

is made. 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, docketed as Criminal Case
No. 276766.
The prosecution, through private complainant PLDT, opposed the
motion,14 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.15
The prosecution asserted that the use of PLDTs intangible telephone
services/facilities allows electronic voice signals to pass through the
same, and ultimately to the called partys number. It averred that such
service/facility is akin to electricity which, although an intangible
property, may, nevertheless, be appropriated and be the subject of
theft. Such service over a period of time for a consideration is the
business that PLDT provides to its customers, which enables the
latter to send various messages to installed recipients. The service
rendered by PLDT is akin to merchandise which has specific value,
and therefore, capable of appropriation by another, as in this case,
through the ISR operations conducted by the movant and his coaccused.
The prosecution further alleged that "international business calls and
revenues constitute personal property envisaged in Article 308 of the
Revised Penal Code." Moreover, the intangible telephone
services/facilities belong to PLDT and not to the movant and the other
accused, because they have no telephone services and facilities of
their own duly authorized by the NTC; thus, the taking by the movant

and his co-accused of PLDT services was with intent to gain and
without the latters consent.
The prosecution pointed out that the accused, as well as the movant,
were paid in exchange for their illegal appropriation and use of
PLDTs telephone services and facilities; on the other hand, the
accused did not pay a single centavo for their illegal ISR operations.
Thus, the acts of the accused were akin to the use of a "jumper" by a
consumer to deflect the current from the house electric meter, thereby
enabling one to steal electricity. The prosecution emphasized that its
position is fortified by the Resolutions of the Department of Justice in
PLDT v. Tiongson, et al. (I.S. No. 97-0925) and in PAOCTF-PLDT v.
Elton John Tuason, et al. (I.S. No. 2000-370) which were issued on
August 14, 2000 finding probable cause for theft against the
respondents therein.
On September 14, 2001, the RTC issued an Order 16 denying the
Motion to Quash the Amended Information. The court declared that,
although there is no law that expressly prohibits the use of ISR, the
facts alleged in the Amended Information "will show how the alleged
crime was committed by conducting ISR," to the damage and
prejudice of PLDT.
Laurel filed a Motion for Reconsideration 17 of the Order, alleging that
international long distance calls are not personal property, and are
not capable of appropriation. He maintained that business or revenue
is not considered personal property, and that the prosecution failed to
adduce proof of its existence and the subsequent loss of personal
property belonging to another. Citing the ruling of the Court in United
States v. De Guzman,18 Laurel averred that the case is not one with
telephone calls which originate with a particular caller and terminates
with the called party. He insisted that telephone calls are considered
privileged communications under the Constitution and cannot be
considered as "the property of PLDT." He further argued that there is
no kinship between telephone calls and electricity or gas, as the latter
are forms of energy which are generated and consumable, and may
be considered as personal property because of such characteristic.
On the other hand, the movant argued, the telephone business is not
a form of energy but is an activity.

In its Order19 dated December 11, 2001, the RTC denied the movants
Motion for Reconsideration. This time, it ruled that what was stolen
from PLDT was its "business" because, as alleged in the Amended
Information, the international long distance calls made through the
facilities of PLDT formed part of its business. The RTC noted that the
movant was charged with stealing the business of PLDT. To support
its ruling, it cited Strochecker v. Ramirez,20 where the Court ruled that
interest in business is personal property capable of appropriation. It
further declared that, through their ISR operations, the movant and
his co-accused deprived PLDT of fees for international long distance
calls, and that the ISR used by the movant and his co-accused was
no different from the "jumper" used for stealing electricity.
Laurel then filed a Petition for Certiorari with the CA, assailing the
Order of the RTC. He alleged that the respondent judge gravely
abused his discretion in denying his Motion to Quash the Amended
Information.21 As gleaned from the material averments of the
amended information, he was charged with stealing the international
long distance calls belonging to PLDT, not its business. Moreover, the
RTC failed to distinguish between the business of PLDT (providing
services for international long distance calls) and the revenues
derived therefrom. He opined that a "business" or its revenues cannot
be considered as personal property under Article 308 of the Revised
Penal Code, since a "business" is "(1) a commercial or mercantile
activity customarily engaged in as a means of livelihood and typically
involving some independence of judgment and power of decision; (2)
a commercial or industrial enterprise; and (3) refers to transactions,
dealings or intercourse of any nature." On the other hand, the term
"revenue" is defined as "the income that comes back from an
investment (as in real or personal property); the annual or periodical
rents, profits, interests, or issues of any species of real or personal
property."22
Laurel further posited that an electric companys business is the
production and distribution of electricity; a gas companys business is
the production and/or distribution of gas (as fuel); while a water
companys business is the production and distribution of potable
water. He argued that the "business" in all these cases is the
commercial activity, while the goods and merchandise are the
products of such activity. Thus, in prosecutions for theft of certain

forms of energy, it is the electricity or gas which is alleged to be

stolen and not the "business" of providing electricity or gas. However,
since a telephone company does not produce any energy, goods or
merchandise and merely renders a service or, in the words of PLDT,
"the connection and interconnection to their telephone lines/facilities,"
such service cannot be the subject of theft as defined in Article 308 of
the Revised Penal Code.23
He further declared that to categorize "business" as personal property
under Article 308 of the Revised Penal Code would lead to absurd
consequences; in prosecutions for theft of gas, electricity or water, it
would then be permissible to allege in the Information that it is the
gas business, the electric business or the water business which has
been stolen, and no longer the merchandise produced by such
enterprise.24
Laurel further cited the Resolution of the Secretary of Justice in Piltel
v. Mendoza,25 where it was ruled that the Revised Penal Code,
legislated as it was before present technological advances were even
conceived, is not adequate to address the novel means of "stealing"
airwaves or airtime. In said resolution, it was noted that the
inadequacy prompted the filing of Senate Bill 2379 (sic) entitled "The
Anti-Telecommunications Fraud of 1997" to deter cloning of cellular
phones and other forms of communications fraud. The said bill "aims
to protect in number (ESN) (sic) or Capcode, mobile identification
number (MIN), electronic-international mobile equipment identity
(EMEI/IMEI), or subscriber identity module" and "any attempt to
duplicate the data on another cellular phone without the consent of a
public telecommunications entity would be punishable by law." 26 Thus,
Laurel concluded, "there is no crime if there is no law punishing the
crime."
On August 30, 2002, the CA rendered judgment dismissing the
petition.27 The appellate court ruled that a petition for certiorari under
Rule 65 of the Rules of Court was not the proper remedy of the
petitioner. On the merits of the petition, it held that while business is
generally an activity
which is abstract and intangible in form, it is nevertheless considered
"property" under Article 308 of the Revised Penal Code. 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.
Laurel, now the petitioner, assails the decision of the CA, contending
that THE COURT OF APPEALS ERRED IN RULING THAT THE
PERSONAL PROPERTY ALLEGEDLY STOLEN PER THE
INFORMATION IS NOT THE "INTERNATIONAL LONG DISTANCE
CALLS" BUT THE "BUSINESS OF PLDT."
THE COURT OF APPEALS ERRED IN RULING THAT THE TERM
"BUSINESS" IS PERSONAL PROPERTY WITHIN THE MEANING
OF ART. 308 OF THE REVISED PENAL CODE.30
Petitioner avers that the petition for a writ of certiorari may be filed to
nullify an interlocutory order of the trial court which was issued with
grave abuse of discretion amounting to excess or lack of jurisdiction.
In support of his petition before the Court, he reiterates the
arguments in his pleadings filed before the CA. He further claims that
while the right to carry on a business or an interest or participation in
business is considered property under the New Civil Code, the term
"business," however, is not. He asserts that the Philippine
Legislature, which approved the Revised Penal Code way back in
January 1, 1932, could not have contemplated to include international
long distance calls and "business" as personal property under Article
308 thereof.
In its comment on the petition, the Office of the Solicitor General
(OSG) maintains that the amended information clearly states all the
essential elements of the crime of theft. Petitioners interpretation as
to whether an "international long distance call" is personal property
under the law is inconsequential, as a reading of the amended
information readily reveals that specific acts and circumstances were

alleged charging Baynet, through its officers, including petitioner, of

feloniously taking, stealing and illegally using international long
distance calls belonging to respondent PLDT by conducting ISR
operations, thus, "routing and completing international long distance
calls using lines, cables, antenna and/or airwave frequency which
connect directly to the local or domestic exchange facilities of the
country where the call is destined." The OSG maintains that the
international long distance calls alleged in the amended information
should be construed to mean "business" of PLDT, which, while
abstract and intangible in form, is personal property susceptible of
appropriation.31 The OSG avers that what was stolen by petitioner
and his co-accused is the business of PLDT providing international
long distance calls which, though intangible, is personal property of
the PLDT.32
For its part, respondent PLDT asserts that personal property under
Article 308 of the Revised Penal Code comprehends intangible
property such as electricity and gas which are valuable articles for
merchandise, brought and sold like other personal property, and are
capable of appropriation. It insists that the business of international
calls and revenues constitute personal property because the same
are valuable articles of merchandise. The respondent reiterates that
international calls involve (a) the intangible telephone services that
are being offered by it, that is, the connection and interconnection to
the telephone network, lines or facilities; (b) the use of its telephone
network, lines or facilities over a period of time; and (c) the income
derived in connection therewith. 33
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. 34
The petition is meritorious.
The issues for resolution are as follows: (a) whether or not the
petition for certiorari is the proper remedy of the petitioner in the
Court of Appeals; (b) whether or not international telephone calls
using Bay Super Orient Cards through the telecommunication
services provided by PLDT for such calls, or, in short, PLDTs
business of providing said telecommunication services, are proper
subjects of theft under Article 308 of the Revised Penal Code; and (c)
whether or not the trial court committed grave abuse of discretion
amounting to excess or lack of jurisdiction in denying the motion of
the petitioner to quash the amended information.
On the issue of whether or not the petition for certiorari instituted by
the petitioner in the CA is proper, the general rule is that a petition for
certiorari under Rule 65 of the Rules of Court, as amended, to nullify
an order denying a motion to quash the Information is inappropriate
because the aggrieved party has a remedy of appeal in the ordinary
course of law. Appeal and certiorari are mutually exclusive of each
other. The remedy of the aggrieved party is to continue with the case
in due course and, when an unfavorable judgment is rendered, assail
the order and the decision on appeal. However, if the trial court
issues the order denying the motion to quash the Amended
Information with grave abuse of discretion amounting to excess or
lack of jurisdiction, or if such order is patently erroneous, or null and
void for being contrary to the Constitution, and the remedy of appeal
would not afford adequate and expeditious relief, the accused may
resort to the extraordinary remedy of certiorari. 35 A special civil action
for certiorari is also available where there are special circumstances
clearly demonstrating the inadequacy of an appeal. As this Court held
in Bristol Myers Squibb (Phils.), Inc. v. Viloria:36
Nonetheless, the settled rule is that a writ of certiorari may be granted
in cases where, despite availability of appeal after trial, there is at
least a prima facie showing on the face of the petition and its annexes

that: (a) the trial court issued the order with grave abuse of discretion
amounting to lack of or in excess of jurisdiction; (b) appeal would not
prove to be a speedy and adequate remedy; (c) where the order is a
patent nullity; (d) the decision in the present case will arrest future
litigations; and (e) for certain considerations such as public welfare
and public policy.37
In his petition for certiorari in the CA, petitioner averred that the trial
court committed grave abuse of its discretion amounting to excess or
lack of jurisdiction when it denied his motion to quash the Amended
Information despite his claim that the material allegations in the
Amended Information do not charge theft under Article 308 of the
Revised Penal Code, or any offense for that matter. By so doing, the
trial court deprived him of his constitutional right to be informed of the
nature of the charge against him. He further averred that the order of
the trial court is contrary to the constitution and is, thus, null and void.
He insists that he should not be compelled to undergo the rigors and
tribulations of a protracted trial and incur expenses to defend himself
against a non-existent charge.
Petitioner is correct.
An information or complaint must state explicitly and directly every act
or omission constituting an offense38 and must allege facts
establishing conduct that a penal statute makes criminal; 39 and
describes the property which is the subject of theft to advise the
accused with reasonable certainty of the accusation he is called upon
to meet at the trial and to enable him to rely on the judgment
thereunder of a subsequent prosecution for the same offense. 40 It
must show, on its face, that if the alleged facts are true, an offense
has been committed. The rule is rooted on the constitutional right of
the accused to be informed of the nature of the crime or cause of the
accusation against him. He cannot be convicted of an offense even if
proven unless it is alleged or necessarily included in the Information
filed against him.
As a general prerequisite, a motion to quash on the ground that the
Information does not constitute the offense charged, or any offense
for that matter, should be resolved on the basis of said allegations
whose truth and veracity are hypothetically committed; 41 and on

additional facts admitted or not denied by the prosecution. 42 If the

facts alleged in the Information do not constitute an offense, the
complaint or information should be quashed by the court. 43
We have reviewed the Amended Information and find that, as
mentioned by the petitioner, it does not contain material allegations
charging the petitioner of theft of personal property under Article 308
of the Revised Penal Code. It, thus, behooved the trial court to quash
the Amended Information. The Order of the trial court denying the
motion of the petitioner to quash the Amended Information is a patent
nullity.
On the second issue, 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. The construction by the respondents of
Article 308 of the said Code to include, within its coverage, the
aforesaid international telephone calls, telecommunication services
and business is contrary to the letter and intent of the law.
The rule is that, penal laws are to be construed strictly. Such rule is
founded on the tenderness of the law for the rights of individuals and
on the plain principle that the power of punishment is vested in
Congress, not in the judicial department. It is Congress, not the
Court, which is to define a crime, and ordain its punishment. 44 Due
respect for the prerogative of Congress in defining crimes/felonies
constrains the Court to refrain from a broad interpretation of penal
laws where a "narrow interpretation" is appropriate. The Court must
take heed to language, legislative history and purpose, in order to
strictly determine the wrath and breath of the conduct the law
forbids.45 However, when the congressional purpose is unclear, the
court must apply the rule of lenity, that is, ambiguity concerning the
ambit of criminal statutes should be resolved in favor of lenity.46
Penal statutes may not be enlarged by implication or intent beyond
the fair meaning of the language used; and may not be held to
include offenses other than those which are clearly described,
notwithstanding that the Court may think that Congress should have
made them more comprehensive.47 Words and phrases in a statute

are to be construed according to their common meaning and

accepted usage.
As Chief Justice John Marshall declared, "it would be dangerous,
indeed, to carry the principle that a case which is within the reason or
mischief of a statute is within its provision, so far as to punish a crime
not enumerated in the statute because it is of equal atrocity, or of
kindred character with those which are enumerated. 48 When
interpreting a criminal statute that does not explicitly reach the
conduct in question, the Court should not base an expansive reading
on inferences from subjective and variable understanding. 49
Article 308 of the Revised Penal Code defines theft as follows:
Art. 308. Who are liable for theft. Theft is committed by any person
who, with intent to gain but without violence, against or intimidation of
persons nor force upon things, shall take personal property of another
without the latters consent.
The provision was taken from Article 530 of the Spanish Penal Code
which reads:
1. Los que con nimo de lucrarse, y sin violencia o intimidacin en
las personas ni fuerza en las cosas, toman las cosas muebles ajenas
sin la voluntad de su dueo.50
For one to be guilty of theft, the accused must have an intent to steal
(animus furandi) personal property, meaning the intent to deprive
another of his ownership/lawful possession of personal property
which intent is apart from and concurrently with the general criminal
intent which is an essential element of a felony of dolo (dolus malus).
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. 52 As
explained by Cuelo Callon: "Cosa juridicamente es toda sustancia
corporal, material, susceptible de ser aprehendida que tenga un valor
cualquiera."53
According to Cuello Callon, in the context of the Penal Code, only
those movable properties which can be taken and carried from the
place they are found are proper subjects of theft. Intangible properties
such as rights and ideas are not subject of theft because the same
cannot be "taken" from the place it is found and is occupied or
appropriated.
Solamente las cosas muebles y corporales pueden ser objeto de
hurto. La sustraccin de cosas inmuebles y la cosas incorporales (v.
gr., los derechos, las ideas) no puede integrar este delito, pues no es
posible asirlas, tomarlas, para conseguir su apropiacin. El Codigo
emplea la expresin "cosas mueble" en el sentido de cosa que es
susceptible de ser llevada del lugar donde se encuentra, como
dinero, joyas, ropas, etctera, asi que su concepto no coincide por
completo con el formulado por el Codigo civil (arts. 335 y 336). 54
Thus, movable properties under Article 308 of the Revised Penal
Code should be distinguished from the rights or interests to which
they relate. A naked right existing merely in contemplation of law,
although it may be very valuable to the person who is entitled to
exercise it, is not the subject of theft or larceny.55 Such rights or
interests are intangible and cannot be "taken" by another. 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, as explained by this Court in United
States v. Carlos61 and United States v. Tambunting, 62 based on
decisions of the Supreme Court of Spain and of the courts in England
and the United States of America, gas or electricity are capable of
appropriation by another other than the owner. Gas and electrical
energy may be taken, carried away and appropriated. In People v.
Menagas,63 the Illinois State Supreme Court declared that 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. It is a valuable
article of merchandise, bought and sold like other personal property,
susceptible of being severed from a mass or larger quantity and of

being transported from place to place. Electrical energy may,

likewise, be taken and carried away. It is a valuable commodity,
bought and sold like other personal property. It may be transported
from place to place. There is nothing in the nature of gas used for
illuminating purposes which renders it incapable of being feloniously
taken and carried away.
In People ex rel Brush Electric Illuminating Co. v. Wemple, 64 the Court
of Appeals of New York held that 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. Having
reached the premises of the consumer, it may be used in any way he
may desire, being, like illuminating gas, capable of being transformed
either into heat, light, or power, at the option of the purchaser. In
Woods v. People,65 the Supreme Court of Illinois declared that there is
nothing in the nature of gas used for illuminating purposes which
renders it incapable of being feloniously taken and carried away. It is
a valuable article of merchandise, bought and sold like other personal
property, susceptible of being severed from a mass or larger quantity
and of being transported from place to place.
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 the claims of the OSG
and respondent PLDT, the petitioner is not charged of stealing
P20,370,651.95 from said respondent. Said amount of
P20,370,651.95 alleged in the Amended Information is the aggregate
amount of access, transmission or termination charges which the
PLDT expected from the international long distance calls of the
callers with the use of Baynet Super Orient Cards sold by Baynet Co.
Ltd.
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.
In this modern age of technology, telecommunications systems have
become so tightly merged with computer systems that it is difficult to
know where one starts and the other finishes. The telephone set is
highly computerized and allows computers to communicate across
long distances.71 The instrumentality at issue in this case is not
merely a telephone but a telephone inexplicably linked to a
computerized communications system with the use of Baynet Cards
sold by the Baynet Card Ltd. The corporation uses computers,
modems and software, among others, for its ISR. 72
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. For instance, the sale of food
by restaurants is usually referred to as "service," although an actual
sale is involved.74 It may also mean the duty or labor to be rendered
by one person to another; performance of labor for the benefit of
another.75 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 it was the intent of the Philippine Legislature, in 1930, to include
services to be the subject of theft, it should have incorporated the
same in Article 308 of the Revised Penal Code. The Legislature did
not. In fact, the Revised Penal Code does not even contain a
definition of services.
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. The Pennsylvania Criminal Statute now
penalizes theft of services, thus:
(a) Acquisition of services. -(1) A person is guilty of theft if he intentionally obtains services for
himself or for another which he knows are available only for
compensation, by deception or threat, by altering or tampering with
the public utility meter or measuring device by which such services
are delivered or by causing or permitting such altering or tampering,
by making or maintaining any unauthorized connection, whether
physically, electrically or inductively, to a distribution or transmission
line, by attaching or maintaining the attachment of any unauthorized
device to any cable, wire or other component of an electric, telephone
or cable television system or to a television receiving set connected
to a cable television system, by making or maintaining any
unauthorized modification or alteration to any device installed by a
cable television system, or by false token or other trick or artifice to
avoid payment for the service.

In the State of Illinois in the United States of America, theft of labor or

services or use of property is penalized:
(a) A person commits theft when he obtains the temporary use of
property, labor or services of another which are available only for hire,
by means of threat or deception or knowing that such use is without
the consent of the person providing the property, labor or services.
In 1980, the drafters of the Model Penal Code in the United States of
America arrived at the conclusion that labor and services, including
professional services, have not been included within the traditional
scope of the term "property" in ordinary theft statutes. Hence, they
decided to incorporate in the Code Section 223.7, which defines and
penalizes theft of services, thus:
(1) A person is guilty of theft if he purposely obtains services which he
knows are available only for compensation, by deception or threat, or
by false token or other means to avoid payment for the service.
"Services" include labor, professional service, transportation,
telephone or other public service, accommodation in hotels,
restaurants or elsewhere, admission to exhibitions, use of vehicles or
other movable property. Where compensation for service is ordinarily
paid immediately upon the rendering of such service, as in the case
of hotels and restaurants, refusal to pay or absconding without
payment or offer to pay gives rise to a presumption that the service
was obtained by deception as to intention to pay; (2) A person
commits theft if, having control over the disposition of services of
others, to which he is not entitled, he knowingly diverts such services
to his own benefit or to the benefit of another not entitled thereto.
Interestingly, after the State Supreme Court of Virginia promulgated
its decision in Lund v. Commonwealth, 80 declaring that neither time
nor services may be taken and carried away and are not proper
subjects of larceny, the General Assembly of Virginia enacted Code
No. 18-2-98 which reads:
Computer time or services or data processing services or information
or data stored in connection therewith is hereby defined to be
property which may be the subject of larceny under 18.2-95 or
18.2-96, or embezzlement under 18.2-111, or false pretenses under

 18.2-178.
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.
Significantly, a prosecution under the law shall be without prejudice to
any liability for violation of any provisions of the Revised Penal Code
inclusive of theft under Rule 308 of the Revised Penal Code and
estafa under Article 315 of the Revised Penal Code. Thus, if an
individual steals a credit card and uses the same to obtain services,
he is liable of the following: theft of the credit card under Article 308 of
the Revised Penal Code; violation of Republic Act No. 8484; and
estafa under Article 315(2)(a) of the Revised Penal Code with the
service provider as the private complainant. The petitioner is not
charged of estafa before the RTC in the Amended Information.

Section 33 of Republic Act No. 8792, Electronic Commerce Act of

2000 provides:
Sec. 33. Penalties. The following Acts shall be penalized by fine
and/or imprisonment, as follows:
a) Hacking or cracking which refers to unauthorized access into or
interference in a computer system/server or information and
communication system; or any access in order to corrupt, alter, steal,
or destroy using a computer or other similar information and
communication devices, without the knowledge and consent of the
owner of the computer or information and communications system,
including the introduction of computer viruses and the like, resulting
on the corruption, destruction, alteration, theft or loss of electronic
data messages or electronic documents shall be punished by a
minimum fine of One hundred thousand pesos (P100,000.00) and a
maximum commensurate to the damage incurred and a mandatory
imprisonment of six (6) months to three (3) years.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
assailed Orders of the Regional Trial Court and the Decision of the
Court of Appeals are REVERSED and SET ASIDE. The Regional
Trial Court is directed to issue an order granting the motion of the
petitioner to quash the Amended Information.
SO ORDERED.
DIGEST

FACTSLaurel was charged with Theft under Art. 308 of

the RPC for allegedly taking, stealing, and using PLDT's
international long distance calls by conducting
International Simple Resale (ISR) a method of outing
and completing international long-distance calls using
lines, cables, antennae, and/or air wave frequency which
connect directly to the local/domestic exchange facilities
of the country where the call is destined. PLDT alleged
that this service was stolen from them using their own
equipment and caused damage to them amounting to

P20,370,651.92.PLDT alleges that the international calls

and business of providing telecommunication or
telephone service are personal properties capable of
appropriation and can be objects of theft.
ISSUEWON Laurel's act constitutes Theft
HELDArt.308, RPC: Theft is committed by any person
who, with intent to gain but without violence against, or
intimidation of persons nor force upon things, shall take
personal property of another without the latters
consent.
Elements of Theft under Art.308, RPC:
1.
2.
3.
4.
5.

There be taking of Personal Property;

Said Personal Property belongs to another;
Taking be done with Intent to Gain;
Taking be done without the owners consent;
No violence against, or intimidation of, persons or
force upon things
Personal Property anything susceptible of
appropriation and not included in Real Property
Thus, the term personal property as used in Art.308,
RPC should be interpreted in the context of the Civil
Code's definition of real and personal property.
Consequently, any personal property, tangible or
intangible, corporeal or incorporeal, capable of
appropriation may be the subject of theft (*US v Carlos;
US v Tambunting; US v Genato*), so long as the same is
not included in the enumeration of Real Properties under
the Civil Code.

The only requirement for personal property to capable of

theft, is that it be subject to appropriation.
Art. 416 (3) of the Civil Code deems Forces of
Nature which are brought under the control of science,
as Personal Property.
The appropriation of forces of nature which are brought
under control by science can be achieved by tampering
with any apparatus used for generating or measuring
such forces of nature, wrongfully redirecting such forces
of nature from such apparatus, or using any device to
fraudulently obtain such forces of nature.
In the instant case, the act of conducting ISR operations
by illegally connecting various equipment or apparatus
to PLDTs telephone system, through which petitioner is
able to resell or re-route international long distance calls
using PLDTs facilities constitute Subtraction.
Moreover, interest in business should be classified as
personal property since it is capable of appropriation,
and not included in the enumeration of real properties.
Therefore, the business of providing telecommunication
or telephone service are personal property which can be
the object of theft under Art. 308 of the RPC. The act of
engaging in ISR is an act of subtraction penalized
under the said article.
While international long-distance calls take the form of
electrical energy and may be considered as personal
property, the said long-distance calls do not belong to
PLDT since it could not have acquired ownership over

such calls. PLDT merely encodes, augments, enhances,

decodes and transmits said calls using its complex
communications infrastructure and facilities.
Since PLDT does not own the said telephone calls, then it
could not validly claim that such telephone calls were
taken without its consent.
What constitutes Theft is the use of the PLDT's
communications facilities without PLDT's consent. The
theft lies in the unlawful taking of the telephone services
& businesses.
The Amended Information should be amended to show
that the property subject of the theft were services and
business of the offended party.

G.R. No. L-41643

July 31, 1935

B.H. BERKENKOTTER, plaintiff-appellant, vs.CU UNJIENG E

HIJOS, YEK TONG LIN FIRE AND MARINE INSURANCE
COMPANY, MABALACAT SUGAR COMPANY and THE PROVINCE
SHERIFF OF PAMPANGA, defendants-appellees.

Briones and Martinez for appellant.Araneta, Zaragoza and Araneta

for appellees Cu Unjieng e Hijos.No appearance for the other
appellees.
VILLA-REAL, J.:
This is an appeal taken by the plaintiff, B.H. Berkenkotter, from the
judgment of the Court of First Instance of Manila, dismissing said
plaintiff's complaint against Cu Unjiengs e Hijos et al., with costs.
In support of his appeal, the appellant assigns six alleged errors as
committed by the trial court in its decision in question which will be
discussed in the course of this decision.
The first question to be decided in this appeal, which is raised in the
first assignment of alleged error, is whether or not the lower court
erred in declaring that the additional machinery and equipment, as
improvement incorporated with the central are subject to the
mortgage deed executed in favor of the defendants Cu Unjieng e
Hijos.
It is admitted by the parties that on April 26, 1926, the Mabalacat
Sugar Co., Inc., owner of the sugar central situated in Mabalacat,
Pampanga, obtained from the defendants, Cu Unjieng e Hijos, a loan
secured by a first mortgage constituted on two parcels and land "with
all its buildings, improvements, sugar-cane mill, steel railway,
telephone line, apparatus, utensils and whatever forms part or is
necessary complement of said sugar-cane mill, steel railway,
telephone line, now existing or that may in the future exist is said
lots."
On October 5, 1926, shortly after said mortgage had been
constituted, the Mabalacat Sugar Co., Inc., decided to increase the
capacity of its sugar central by buying additional machinery and
equipment, so that instead of milling 150 tons daily, it could produce
250. The estimated cost of said additional machinery and equipment
was approximately P100,000. In order to carry out this plan, B.A.
Green, president of said corporation, proposed to the plaintiff, B.H.
Berkenkotter, to advance the necessary amount for the purchase of
said machinery and equipment, promising to reimburse him as soon
as he could obtain an additional loan from the mortgagees, the herein

defendants Cu Unjieng e Hijos. Having agreed to said proposition

made in a letter dated October 5, 1926 (Exhibit E), B.H. Berkenkotter,
on October 9th of the same year, delivered the sum of P1,710 to B.A.
Green, president of the Mabalacat Sugar Co., Inc., the total amount
supplied by him to said B.A. Green having been P25,750.
Furthermore, B.H. Berkenkotter had a credit of P22,000 against said
corporation for unpaid salary. With the loan of P25,750 and said
credit of P22,000, the Mabalacat Sugar Co., Inc., purchased the
additional machinery and equipment now in litigation.
On June 10, 1927, B.A. Green, president of the Mabalacat Sugar Co.,
Inc., applied to Cu Unjieng e Hijos for an additional loan of P75,000
offering as security the additional machinery and equipment acquired
by said B.A. Green and installed in the sugar central after the
execution of the original mortgage deed, on April 27, 1927, together
with whatever additional equipment acquired with said loan. B.A.
Green failed to obtain said loan.
Article 1877 of the Civil Code provides as follows.
ART. 1877. A mortgage includes all natural accessions,
improvements, growing fruits, and rents not collected when the
obligation falls due, and the amount of any indemnities paid or due
the owner by the insurers of the mortgaged property or by virtue of
the exercise of the power of eminent domain, with the declarations,
amplifications, and limitations established by law, whether the estate
continues in the possession of the person who mortgaged it or
whether it passes into the hands of a third person.
In the case of Bischoff vs. Pomar and Compaia General de Tabacos
(12 Phil., 690), cited with approval in the case of Cea vs. Villanueva
(18 Phil., 538), this court laid shown the following doctrine:
1. REALTY; MORTGAGE OF REAL ESTATE INCLUDES
IMPROVEMENTS AND FIXTURES. It is a rule, established by the
Civil Code and also by the Mortgage Law, with which the decisions of
the courts of the United States are in accord, that in a mortgage of
real estate, the improvements on the same are included; therefore, all
objects permanently attached to a mortgaged building or land,
although they may have been placed there after the mortgage was

constituted, are also included. (Arts. 110 and 111 of the Mortgage
Law, and 1877 of the Civil Code; decision of U.S. Supreme Court in
the matter of Royal Insurance Co. vs. R. Miller, liquidator, and
Amadeo [26 Sup. Ct. Rep., 46; 199 U.S., 353].)
2. ID.; ID.; INCLUSION OR EXCLUSION OF MACHINERY, ETC.
In order that it may be understood that the machinery and other
objects placed upon and used in connection with a mortgaged estate
are excluded from the mortgage, when it was stated in the mortgage
that the improvements, buildings, and machinery that existed thereon
were also comprehended, it is indispensable that the exclusion
thereof be stipulated between the contracting parties.
The appellant contends that the installation of the machinery and
equipment claimed by him in the sugar central of the Mabalacat
Sugar Company, Inc., was not permanent in character inasmuch as
B.A. Green, in proposing to him to advance the money for the
purchase thereof, made it appear in the letter, Exhibit E, that in case
B.A. Green should fail to obtain an additional loan from the
defendants Cu Unjieng e Hijos, said machinery and equipment would
become security therefor, said B.A. Green binding himself not to
mortgage nor encumber them to anybody until said plaintiff be fully
reimbursed for the corporation's indebtedness to him.
Upon acquiring the machinery and equipment in question with money
obtained as loan from the plaintiff-appellant by B.A. Green, as
president of the Mabalacat Sugar Co., Inc., the latter became owner
of said machinery and equipment, otherwise B.A. Green, as such
president, could not have offered them to the plaintiff as security for
the payment of his credit.
Article 334, paragraph 5, of the Civil Code gives the character of real
property to "machinery, liquid containers, instruments or implements
intended by the owner of any building or land for use in connection
with any industry or trade being carried on therein and which are
expressly adapted to meet the requirements of such trade or industry.
If the installation of the machinery and equipment in question in the
central of the Mabalacat Sugar Co., Inc., in lieu of the other of less
capacity existing therein, for its sugar industry, converted them into

real property by reason of their purpose, it cannot be said that their

incorporation therewith was not permanent in character because, as
essential and principal elements of a sugar central, without them the
sugar central would be unable to function or carry on the industrial
purpose for which it was established. Inasmuch as the central is
permanent in character, the necessary machinery and equipment
installed for carrying on the sugar industry for which it has been
established must necessarily be permanent.
Furthermore, the fact that B.A. Green bound himself to the plaintiff
B.H. Berkenkotter to hold said machinery and equipment as security
for the payment of the latter's credit and to refrain from mortgaging or
otherwise encumbering them until Berkenkotter has been fully
reimbursed therefor, is not incompatible with the permanent character
of the incorporation of said machinery and equipment with the sugar
central of the Mabalacat Sugar Co., Inc., as nothing could prevent
B.A. Green from giving them as security at least under a second
mortgage.
As to the alleged sale of said machinery and equipment to the plaintiff
and appellant after they had been permanently incorporated with
sugar central of the Mabalacat Sugar Co., Inc., and while the
mortgage constituted on said sugar central to Cu Unjieng e Hijos
remained in force, only the right of redemption of the vendor
Mabalacat Sugar Co., Inc., in the sugar central with which said
machinery and equipment had been incorporated, was transferred
thereby, subject to the right of the defendants Cu Unjieng e Hijos
under the first mortgage.
For the foregoing considerations, we are of the opinion and so hold:
(1) That the installation of a machinery and equipment in a mortgaged
sugar central, in lieu of another of less capacity, for the purpose of
carrying out the industrial functions of the latter and increasing
production, constitutes a permanent improvement on said sugar
central and subjects said machinery and equipment to the mortgage
constituted thereon (article 1877, Civil Code); (2) that the fact that the
purchaser of the new machinery and equipment has bound himself to
the person supplying him the purchase money to hold them as
security for the payment of the latter's credit, and to refrain from
mortgaging or otherwise encumbering them does not alter the

permanent character of the incorporation of said machinery and

equipment with the central; and (3) that the sale of the machinery and
equipment in question by the purchaser who was supplied the
purchase money, as a loan, to the person who supplied the money,
after the incorporation thereof with the mortgaged sugar central, does
not vest the creditor with ownership of said machinery and equipment
but simply with the right of redemption.
Wherefore, finding no error in the appealed judgment, it is affirmed in
all its parts, with costs to the appellant. So ordered.