Case Analysis

Tile: Laurel v. Abrogar (483 SCRA 243)

G.R. No. 155076, February 27, 2006

I-PARTIES

Philippine Long Distance Telephone Company (PLDT)-Private respondent(the petitioner in the

initial proceeding)
HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial Court, Makati City, Branch 150
whose decision is sought to be reversed in the case. -Respondent

Luis Marcos P. Laurel board member and corporate secretary of Baynet Co., Ltd. (Baynet)-
now Petitioner(one of the respondent or co-accused in the case filed by PLDT)

II-PRIOR PROCEEDINGS

An information was filed by the state prosecutor impleading Laurel and other respondents of
theft under Article 308 of RPC. Accused Laurel filed a "Motion to Quash (with Motion to Defer
Arraignment)". The RTC issued an Order denying the Motion to Quash the Amended Information.
RTC also denied his Motion for Reconsideration. Laurel then filed a Petition for Certiorari with the
CA, assailing the Order of the RTC. The CA dismissed the petition. Laurel, now the petitioner, assails
the decision of the CA before the SC.

III-THEORIES OF THE PARTIES

PLDT claims that herein petitioner together with his co-accused conspired together in order
to 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 with out the priors consent.

Laurel however alleged that the 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 caller’s 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.

IV-OBJECTIVE OF THE PARTIES

PLDT wishes for the petitioner to be impleaded for committing theft and the loss they've
suffered be respectively reimbursed or returned to them.

Laurel on the other hand, prays that the motion to quash be granted as the factual basis of
herein private repondent as stated in their complaint does not fall within the ambit of Art. 308 of
the RPC.

V-KEY FACTS

>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. 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.

>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

>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.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.

>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.

>Laurel moved to quash said complaint as the property (service/business)contemplated by herein

private respondent is not the one embraced in ART 308 of RPC nor any special law for that matter.
Laurel further cited the Resolution of the Secretary of Justice in Piltel v. Mendoza,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." Thus,
Laurel concluded, "there is no crime if there is no law punishing the crime."

>The RTC as well as the CA however dismissed his motion. Thus he filed a motion for certiorari
before the SC alleging the following: the respondent judge gravely abused his discretion in denying
his Motion to Quash the Amended Information. 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."

VI-ISSUE

WHETHER OR NOT THE PROPERTY CONTeMPLATED BY HEREIN PRIVATE RESPONDENT FALLS

WITHIN THE AMBIT OF ART. 308 OF RPC, thus no network fraud exist.

VII-HOLDING

NO, THE KIND OF PERSONAL PROPERTY CONTEMPLATED BY SAID ARTICLE DOES NOT COVER
THE 'BUSINESS OR SERVICE' RENDERED BY PRIVATE RESPONDENT.

VIII-RATIODECIDENDI

The court finds 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 rule is that,
penal laws are to be construed strictly. It is Congress, not the Court, which is to define a crime,
and ordain its punishment. 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. And only when the congressional purpose is unclear
that court my rule on its lenity.

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 latter’s consent.

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.

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.

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.

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. 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.
 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.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.Neither asportation nor actual manual possession of property is required. Constructive possession
of the thief of the property is enough.

Taking may be by the offender’s 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.

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. Business may also mean employment, occupation or profession.
Business is also defined as a commercial activity for gain benefit or advantage.
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-à-vis, the taking of goods, wares or merchandise, or equipment
comprising his business. 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.

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.

OBITERDICTUM? In Examining foreign statutes, the courts found that other states
specifically included “business/services” to be one of a “personal property” as implemented
therein. 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.

IX-DISPOSITION
 Petition is granted. The assailed decision of RTC and CA is hereby reversed and ser aside.
The Regional Trial Court is directed to issue an order granting the motion of the petitioner to quash
the Amended Information.