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ESTAFA THROUGH UNFAITHFULNESS AND ABUSE OF CONFIDENCE

Saddul vs. Court of Appeals 192 SCRA 277

Nature: Second Motion for Reconsideration filed by the petitioner, Jose A. Saddul, Jr., praying that
we set aside our resolution of April 16, 1990 denying his petition for review of the decision
promulgated on September 1, 1989 by the Court of Appeals in CA-G.R. CR No. 06234, entitled: "The
People of the Philippines, ...Plaintiff-Appellee vs. Jose A. Saddul, Jr., Accused-Appellant" which
affirmed on appeal the judgment of the Regional Trial Court of Manila, finding him guilty of estafa
under Article 315, par. 1(b) of the Revised Penal Code

Facts: In 1973, the petitioner became a vice-president and director of Amalgamated Motors
(Phils.) Inc. (AMPI for brevity). AMPI was then a wholly-owned subsidiary of British Leyland. It
was the sole distributor in the Philippines of British and Japanese heavy equipment, trucks, farm
implements, spare parts, and other automotive products and machines manufactured by Leyland
International, Land Rover Ltd. (LAND ROVER for brevity), Avelyn Barfourd, Mitsubishi, and
Furokawa Since 1980, Felimon R. Cuevas had been a dealer of AMPI for government sales. In 1981,
he bought into the company and became its majority stockholder and president.
Upon Cuevas' ascendancy in the corporation, Saddul was made a director as well as Executive
Vice-President and General Manager. As such, he was in charge of the operations of the company
and was "delegated" to make sales of some units and spare parts.

As distributor not only of British but also Japanese automotive products, AMPI carried an
inventory of some P15 to P20 million worth of spare parts of the companies it represented in the
Philippines.

In 1985, LAND ROVER supplied P1.5 million worth of spare parts to the Armed Forces of the
Philippines (AFP) through AMPI, but the merchandise were returned to AMPI because they were
not the correct items needed by the AFP. The parts were kept by AMPI pending disposal
instructions from LAND ROVER.

On March 4, 1985, Erwin Lyndsay, LAND ROVER's area manager for Southeast Asia, sent the
following letter to Saddul, Executive Vice-President and General Manager of AMPI, regarding the
spare parts rejected by the AFP:
Saddul sold some of the spare parts (worth P143,085.00) to Rover Motor Parts (a different entity
from LAND ROVER) whose president was Jose P. Garcia. The sales were evidenced by AMPI Sales
Invoices and summarized in the Statement of Accounts dated June 9, 1986 sent by AMPI to Rover
Motor Parts. Payments were made by the buyer to Saddul. AMPI's 20% handling commission on
the sale amounted to P28,617.
Pursuant to LAND ROVER's directive that sale value of these spare parts be "placed into a separate
client account which will be available to LRPE or any other party authorized by LRPE" , Saddul did
not deposit the proceeds of the sales in AMPI's account but held them in trust for LAND ROVER. "

Saddul was "terminated" by AMPI in the early part of 1986 for cause or causes that Cuevas did not
disclose, but, according to Edgar Guilatco, a prosecution witness, Saddul "left the company" . He
thereupon formed his own outfit which he named "Multipart Motors International, Inc." What
appears in the record is that on May 30, 1986, Lyndsay wrote a letter to Saddul enclosing "a note
which effectively authorizes you to act as our distributor" .

On November 10, 1986, Lyndsay wrote a letter to Cuevas requesting for a statement on AMPI's
inventory of British Leyland spare parts. Cuevas replied by telex that some of those spare parts
had been sold by Saddul who did not turn over the proceeds to AMPI, and that he (Cuevas) filed a
criminal case against Saddul "to recover the money so I can remit immediately. On March 26,
1987, Lyndsay sent a reply-telex requesting information as to "which items have been sold and at
what price and which items remain in stock" and sought "a reconciliation of this stock"

On June 3, 1987, based on Cuevas' complaint, an information for estafa in the amount of
P143,085.00 (I.S. No. 86-20607) was filed against Saddul in the Regional Trial Court of Manila.

Despite the advice from Land Rover, AMPI prosecuted the criminal case against Saddul. On August
29, 1988, the trial court rendered a decision finding him guilty of estafa with unfaithfulness or
abuse of confidence (Art. 315, subpar. 1-b, Rev. Penal Code).
Saddul appealed to the Court of Appeals (CA-G.R. CR No. 06234.) On September 1, 1989, the Court
of Appeals affirmed the trial court's decision. Hence, this petition for review.
Held: One of the ways of committing the crime of estafa with unfaithfulness or abuse of confidence
is:

"(b) By misappropriating or converting to the prejudice of another, money, goods, or any other
personal property received by the offender in trust or on commission, or for administration, or
under any other obligation involving the duty to make delivery of or to return the same, even
though such obligation be totally or partially guaranteed by a bond; or by denying having received
such money, goods, or other property." (Art. 315, par. 1 subpar. b, Rev. Penal Code.).
The appropriation or conversion of money or property received, to the prejudice of the owner
thereof, is the essence of estafa through misappropriation (Ramirez, 9 Phil. 67). The words
"convert" and "misappropriate" connote an act of using or disposing of another's property as if it
were one's own, or of devoting it to a purpose or use different from that agreed upon. To
misappropriate to one's own use includes, not only conversion to one's personal advantage, but
also every attempt to dispose of the property of another without right.

Conversion is an unauthorized assumption and exercise of the right of ownership over goods or
personal chattels belonging to another, resulting in the alteration of their condition or the
exclusion of the owner's rights. It takes place when a person actually appropriates the property of
another to his own benefit, use, and enjoyment (Trinidad vs. Court of Appeals, 53 OG 731 citing
Bouvier's Law Dictionary).

The elements of the crime of embezzlement or estafa with abuse of confidence are:
(a) that personal property is received in trust, on commission, for administration or under any
other circumstance involving the duty to make delivery of or to return the same, even though the
obligation is guaranteed by a bond;
(b) that there is conversion or diversion of such property by the person who has so received it or a
denial on his part that he received it;
(c) that such conversion, diversion or denial is to the injury of another, and
(d) that there be demand for the return of the property,
The first element of the crime does not exist in this case because Saddul did not receive the
Leyland Automotive spare parts from Cuevas or AMPI in trust, on commission, for administration,
or under a duty to make delivery of, or return the same. Saddul received the Leyland spare parts
from the AFP in trust for LAND ROVER which authorized him to sell them ("we now authorize you
to undertake the disposal of the parts at the best possible prices available from your local market"
–
Since Saddul did not convert or divert the property (he sold them in accordance with the authority
given to him by Land Rover) nor did he deny that he received them, the second element of the
crime was also not present.

Saddul's failure to deliver the proceeds of the sale of the spare parts to AMPI or Cuevas did not
constitute a conversion or diversion to the injury of the latter who, not being the owner of the
property, incurred no loss and suffered no injury on account of Saddul's retention of the said
proceeds while awaiting Land Rover's instructions regarding the special account where he should
deposit them. Saddul simply complied with the directive in Land Rover's letter of March 4, 1985
that the proceeds be "placed into a separate client account which will be available to LRPE or any
other party authorized by LRPE" (Exh. 1 or F). Implicit in this directive was an injunction not to
deliver the proceeds to AMPI. The third element of the crime charged is absent.
The fourth and final element of demand for the return of the property is also lacking. AMPI or
Cuevas made no demand for the return of the spare parts sold by Saddul because Cuevas knew
that those spare parts were to be sold for the account of Land Rover.

While it is true that under Lyndsay's letter of March 4, 1985 (Exh. 1 or F) AMPI was entitled to a
handling commission of 20% of the sale value of the spare parts (equivalent to P28,617.00) which
Saddul failed to deliver to AMPI, Saddul explained that he subsequently received instructions from
Land Rover to hold the 20% commission until AMPI shall have given an accounting of the
remaining Leyland spare parts (worth P1.2 million) still held by AMPI. (pp. 10, 23-28, tsn,
February 15, 1988.)

That testimony of Saddul was not controverted by the complainant. On the contrary, it was
confirmed by Lyndsay's letter dated August 6, 1987 to AMPI or Cuevas (Exh. 2) asking for an
accounting of "balance of the parts held by you . . . upon receipt (of which) ** we will settle your
handling charges at 20% of sales as agreed."
By obeying the instructions of Land Rover to withhold payment of AMPI's 20% handling charge
(P28,617.00) Saddul did not become liable for embezzlement to AMPI for he did not receive that
sum from AMPI. It was part of the price he received from Rover Motor Parts, the buyer of the
spare parts.
Decision: WHEREFORE, the petitioner's motion for reconsideration of the resolution dated April
16, 1990 is granted. The decision dated September 1, 1989, of the Court of Appeals in CA-G.R. No.
06234 is hereby reversed and set aside. The petitioner is acquitted of the crime charged, with
costs de oficio.

TRUST RECEIPTS (P.D. 115)

Allied Banking Corp. vs. Ordonez 192 SCRA 246

Nature: This is a special civil action for Certiorari assailing the interpretation by the Department of
Justice of the penal provision of PD 115, the Trust Receipts Law.

Facts: Philippine Blooming Mills (PBM, for short) thru its duly authorized officer, private
respondent Alfredo Ching, entered into a Trust Receipt Agreement with Allied Bank whereby the
latter as the entruster releases the Dolomites and one Lot High Fired Refractory Sliding Nozzle
Brick to the possession of PBM, the entrustee, for it to sell with the obligation turn over the
proceeds of the sale of the goods, if sold, or to return the same, if unsold within the stated period.
Out of the said obligation resulted an overdue amount of P1,475,274.09. Despite repeated
demands, PBM failed and refused to either turn over the proceeds of the sale of the goods or to
return the same.

Petitioner filed a criminal complaint against private respondent for violation of PD 115 before the
office of the Provincial Fiscal of Rizal. After preliminary investigation, the Fiscal found a prima
facie case for violation of PD 115 on four (4) counts and filed the corresponding information in
court. Private respondent appealed the Fiscal's resolution to the Department of Justice but the
efforts proved to be futile, hence, the case now was brought before the Supreme Court.

Private respondent claimed that PD 115 covers goods which are ultimately destined for sale and
not goods for use in manufacture; that at the time of PBM's application for the issuance of the LC's,
it was not represented to the petitioner that the items were intended for sale, hence, there was no
deceit resulting in a violation of the trust receipts which would constitute a criminal liability.

Issue: Does the penal provision of PD 115 (Trust Receipts Law) apply when the goods covered by
a Trust Receipt do not form part of the finished products which are ultimately sold but are instead,
utilized/used up in the operation of the equipment and machineries of the entrustee-
manufacturer?

Held: Yes.

Rationale: Section 4 of said PD 115 says in part:

"Sec. 4. What constitutes a trust receipt transaction. — A trust receipt transaction, within the
meaning of this Decree, is any transaction by and between a person referred to in this Decree as
the entrustee, and another person referred to in this Decree as the entrustee, whereby the
entruster, who owns or holds absolute title or security interests over certain specified goods,
documents or instruments, releases the same to the possession of the entrustee upon the latter's
execution and delivery to the entruster of a signed document called a 'trust receipt' wherein the
entrustee binds himself to hold the designated goods, documents or instruments in trust for the
entruster and to sell or otherwise dispose of the goods, documents or instruments with the
obligation to turn over to the entruster the proceeds thereof to the extent of the amount owing to
the entruster or as appears in the trust receipt or the goods, documents or instruments
themselves, if they are unsold or not otherwise disposed of, in accordance with the terms and
conditions specified in the trust receipt, . . ."

The trust receipts, there is an obligation to repay the entruster. Their terms are to be interpreted
in accordance with the general rules on contracts, the law being alert in all cases to prevent fraud
on the part of either party to the transaction. The entrustee binds himself to sell or otherwise
dispose of the entrusted goods with the obligation to turn over to the entruster the proceeds if
sold, or return the goods if unsold or not otherwise disposed of, in accordance with the terms and
conditions specified in the trust receipt. A violation of this undertaking constitutes estafa under Sec.
13, PD 115.

The non-payment of the amount covered by a trust receipt is an act violative of the entrustee's
obligation to pay. There is no reason why the law should not apply to all transactions covered by
trust receipts, except those expressly excluded.

Decision: The petition was granted.

Lee vs. Rodil 175 SCRA 100

Nature: this is a petition to reconsider the motion to quash the information charging the accused
of Estafa which was denied twice by the Manila RTC Branch 10.

Facts: the accused in this case was the duly authorized representative of C.S. Lee Enterprises,
Inc..She opened a letter of credit with the Philippine Bank of Communications to purchase certain
merchandise consisting of 23 ctns. Lab. Culture Media in favor of said bank, and right after, they
executed a trust receipt for the aforesaid merchandise. By virtue of which, the said accused
obligated herself to hold said merchandise in trust with liberty to sell the same in cash for the
account of the said bank and to account for the proceeds of the sale thereof, if sold or of returning
the said merchandise to said bank in case of failure to sell the same, on or before October 24, 1982.
But the accused, once in possession of the said merchandise, failed to comply with her aforesaid
obligation despite the lapse of a long period of time and repeated demands made upon her to that
effect. Hence, information was filed against her for the crime of Estafa.

She moved to quash the information however it was denied as well as the motion for
reconsideration.
Petitioner alleged that the violation of a trust receipt agreement does not constitute Estafa
notwithstanding an express provision in the "Trust Receipts Law" (P.D. 115) characterizing such
violation. She attacks P. D. 115 for being unconstitutional. She contends that it is violative of the
constitutional right that "No person shall be imprisoned for debt or non-payment of a poll tax

Issue: whether or not the violation of a trust receipt agreement constitutes the crime of Estafa.

Held: YES.

Rationale: The criminal liability springs from the violation of the trust receipt.

Supreme Court pronounced in the Vintola cases that:

... A letter of credit-trust receipt arrangement is endorsed with its own distinctive features and
characteristics. Under that set-up, a bank extends a loan covered by the letter of credit, with the trust
receipt as a security for the loan. In other words, the transaction involves a loan feature represented
by the letter of credit, and a security feature which is in the covering trust receipt.

Therefore, the loan feature is separate and distinct from the trust receipt. The violation of a trust
receipt committed by disposing of the goods covered thereby and failing to deliver the proceeds of
such sale has been squarely made to fall under Art. 315 (1) (b) of the Revised Penal Code, which
provides:

... Swindling (estafa).-Any person who shall defraud another by any of the means mentioned
herein below shall be punished by:

xxx xxx xxx

1. With unfaithfulness or abuse of confidence, namely:

xxx xxx xxx

b. By misappropriating or converting, to the prejudice of another, money, goods, or any other
personal property received by the offender in trust or on commission, or for administration, or
under any other obligation involving the duty to make delivery of or to return the same, even
though such obligation be totally or partially guaranteed by a bond; or by denying having received
such money, goods, or other property.

The fact that the bank does not become the factual owner of the goods does not make the law
unconstitutional. The language of the above- mentioned penal provision has been clarified by P.D.
115. The person who is prejudiced through the misappropriation or conversion of the goods need
not be the owner, thereof; if such had been the intention of the authors of the Code, the phrase "to
the prejudice of another" would have read "to the prejudice of the owner.”

Verily, P.D. 115 is a declaration by the legislative authority that, as a matter of public policy, the
failure of a person to turn over the proceeds of the sale of goods covered by a trust receipt or to
return said goods if not sold is a public nuisance to be abated by the imposition of penal sanctions.
As held in Lozano vs. Martinez, (146 SCRA 323,338):

... certainly it is within the authority of the lawmaking body to prescribe certain acts deemed
pernicious and inimical to public welfare. Acts mala in se are not the only acts that the law can
punish. An act may not be considered by society as inherently wrong, hence, not malum in se but
because of the harm that it inflicts on the community, it can be outlawed and criminally punished
as malum prohibitum. The State can do this in the exercise of its police power.

In fine, P.D. 115 is a valid exercise of police power and is not repugnant to the constitutional
provision on non-imprisonment for non-payment of debt.

Decision: The trial court's orders were AFFIRMED and the case was remanded to the trial court for
further proceedings.

ESTAFA THROUGH FALSE PRETENSES, FRAUDULENT ACTS OR MEANS

People of the Philippines vs. Ong 204 SCRA 942

Nature: an appeal from the decision of the RTC convicting the accused Ong for the crime of Estafa
and was sentenced to suffer the penalty of Reclusion Perpetua.
Facts: Accused Dick Ong was one of the depositors of the Home Savings Bank and Trust Company.
On separate dates, the accused made several deposits to his account. However, before these
checks were cleared, he was allowed to withdraw from his account with the bank. The
corresponding withdrawal slip was signed and approved by Lino Morfe, then the Branch Manager,
and accused Lucila Talabis, the Branch Cashier. Because of that, the four accused were charged of
Estafa defined under No. 2 (d) of Article 315 of the Revised Penal Code.

RTC found Ong guilty of the crime charged on which he appealed directly with the Supreme Court.
The three others were acquitted.
Tthe accused-appellant alleges that based on the testimonies of co-accused Lucila Talabis and
Ricardo Villaran, he did not employ any deceit or fraud on the Bank because the practice of deposit
and withdrawal against uncleared checks and uncollected deposits was tolerated by it. As soon as
he learned of the dishonor of the subject checks, he offered to pay the amounts thereof and put up
as security his property. The subject checks were not in payment of an obligation but were
deposited in his savings account. He was merely a general indorser of the subject checks and this
being the case, his obligations as such, if any, should be governed by Section 66 of the Negotiable
Instruments Law. The subject checks were issued or drawn by his customers and paid to him. He
could not have had any knowledge as to the sufficiency of their funds in the drawee banks.
These allegation were all contradicted by the Solicitor General.

Issue: whether or not the accused was guilty of the crime charged.

Held: NO.

Rationale: All the elements of Estafa under No. 2 (d) was not sufficiently proven except the first
part of the first element.

The following are the elements of this kind of estafa: (1) postdating or issuance of a check in
payment of an obligation contracted at the time the check was issued; (2) lack or insufficiency of
funds to cover the check; and (3) damage to the payee thereof.

The first element has two parts namely, “postdating or issuance of a check” and “in payment of an
obligation contracted at the time the check was issued." On this subject matter, Fernando
Esguerra, Intemal Auditor of the Bank and a witness for the prosecution, testified that two of those
checks deposited were actually coming from the Ong’s account upon which he signed as the
drawee. Thus, the fact established by the prosecution and adopted by the trial court is that the
subject checks were either issued or indorsed by the accused-appellant.

Regarding the second part of the first element of Article 315, paragraph 2(d) of the Revised Penal
Code, the accused-appellant alleged that when he deposited the subject checks in his savings
account, it was clearly not in payment of an obligation to the Bank. This single argument of the
accused-appellant spells tilting the scale to his advantage. In several cases, We were categorical
that bank deposits are in the nature of irregular deposits. They are really loans because they earn
interest. All kinds of bank deposits, whether fixed, savings, or current are to be treated loans and
are to be covered by the law on loans. Current and savings deposits are loans to a bank because it
can use the same.

The evidence for the prosecution proved that the Bank on its own accorded him a drawn against
uncollected deposit (DAUD) privilege without need of any pretensions on his part. Moreover, this
privilege was not only for the subject checks, but for other past transactions. Fernando Esguerra
and Felix Hocson even testified that in some instances prior to July 1, 1980, especially where the
depositor is an important client, the Bank relaxed its rule and internal policy against uncleared
checks and uncollected deposits, and allowed such depositor to withdraw against his uncleared
checks and uncollected deposits. Admittedly, the accused-appellant was one of the important
depositors of the Bank. Granting, in gratia argumenti, that he had in fact acted fraudulently, he
could not have done so without the active cooperation of the Banks employees. Therefore, since
Lucila Talabis and Ricardo Villaran were declared innocent of the crimes charged against them,
the same should be said for the accused-appellant. True it is that the Bank suffered damage in the
amount of P575,504.00 but the accused-appellant's liability thereon is only civil.

Decision: The accused-appellant is acquitted of the crime charged against him but ordered to pay
the aforementioned amount.

BOUNCING checks (B.P. 22)

Nierras vs Dacuycuy 181 SCRA 1

Nature: this is a petition for certiorari assailing the dismissal of the motion to quash the
information.
Facts: It appears that petitioner, a customer of Pilipinas Shell Petroleum Corporation, purchased
oil products from it. Simultaneous with the delivery of the products, he issued nine (9) checks in
payment thereof. Upon presentation to the Philippine National Bank at Naval, Leyte, said checks
were dishonored for the reason that his account was already closed. Thereafter, Pilipinas Shell
Petroleum Corporation repeatedly demanded of petitioner either to deposit funds for his checks
or pay for the oil products he had purchased but he failed and refused to do either. Because of this
Shell Corporation filed two charges against him namely Estafa and violation of BP Blg 22.

Petitioner argues that he would be placed in double jeopardy as all the elements of estafa under
Article 315 (2-d) of the Revised Penal Code are also present in that crime punishable under Batas
Pambansa Bilang 22 namely (1) "the postdating or issuance of a check in payment of an obligation
contracted at the time the check was issued; (2) lack or insufficiency of funds to cover the check
and (3) damage to the payee thereof."

Issue: can petitioner be held liable for the nine criminal cases for violation of Batas Pambansa Blg.
22, and separately also be held liable for the crime of estafa under Article 315 (2-d) of the Revised
Penal Code for the issuance of the same bouncing checks?

Held: YES.

Rationale: Petitioner is charged with two distinct and separate offenses. What petitioner failed to
mention in his argument is the fact that deceit and damage are essential elements in Article 315
(2-d) Revised Penal Code, but are not required in Batas Pambansa Bilang 22. Under the latter law,
mere issuance of a check that is dishonored gives rise to the presumption of knowledge on the
part of the drawer that he issued the same without sufficient funds and hence punishable which is
not so under the Penal Code.

While the filing of the two sets of Information under the provisions of Batas Pambansa Bilang 22
and under the provisions of the Revised Penal Code, as amended, on estafa, may refer to identical
acts committed by petitioner, the prosecution thereof cannot be limited to one offense, because a
single criminal act may give rise to a multiplicity of offenses and where there is variance or
differences between the elements of an offense in one law and another law as in the case at bar
there will be no double jeopardy because what the rule on double jeopardy prohibits refers to
identity of elements in the two (2) offenses. Otherwise stated prosecution for the same act is not
prohibited. What is forbidden is prosecution for the same offense. Hence, the mere filing of the two
(2) sets of information does not itself give rise to double jeopardy.
Decision: Petition was dismissed for lack of merit.

Lao vs Court of Appeals G.R. No. 119178 June 20, 1997

Nature: This case is a petition assailing the Decision of Respondent Court of Appeals dismissing
the appeal of petitioner and affirming the decision of the Regional Trial Court of Manila, Branch 33
convicting her for two counts of violation of the Bouncing Checks Law.

Facts: Petitioner, Lina Lim Lao was a junior officer of Premiere Investment House (Premiere) in its
Binondo Branch. As such officer, she was authorized to sign checks for and in behalf of the
corporation. In the course of the business, she met complainant Father Artelijo Pelijo, the
provincial treasurer of the Society of the Divine Word through Mrs. Rosemarie Lachenal, a trader
for Premiere. Father Palijo was authorized to invest donations to the society and had been
investing the society's money with Premiere. Father Palijo had invested a total of P514,484.04.
And with this he received some checks in payment of interests as a return from such investment.
However , upon presentation for encashment, the same were dishonored for the reason "Drawn
Against Insufficient Funds" (DAIF).

Father Palijo immediately made demands on premiere to pay him the necessary amounts. He first
went to the Binondo Branch but was referred to the Cubao Main Branch where he was able to talk
with the President, Mr. Cariño. For his efforts, he was paid P5,000.00. Since no other payments
followed, Father Palijo wrote Premiere a formal letter of demand subsequently; Premiere was
placed under receivership and was not able to pay. Private Complainant Palijo filed an affidavit-
complaint against Petitioner Lina Lim Lao and Teodulo Asprec for violation of B.P. 22. After
preliminary investigation, three Informations charging Lao and Asprec with the offense defined in
the first paragraph of Section 1, B.P. 22.

In her defense, she contended that had no actual knowledge of whether such checks were funded
as she was just doing her regular duties by signing blank checks with the name of the payee and
the amount drawn to be filled later by another signatory. Also, when checks so signed are
dishonored due to insufficiency of funds, the notice of dishonor was sent to the main office of the
corporation. According to her, that does not constitute a valid notice to her who holds office in a
separate branch and who had no actual knowledge thereof.

Issues:
1. May an employee who, as part of her regular duties, signs blank corporate checks — with
the name of the payee and the amount drawn to be filled later by another signatory —
 and, therefore, does so without actual knowledge of whether such checks are funded, be
held criminally liable for violation of Batas Pambansa Bilang 22 (B.P. 22), when checks so
signed are dishonored due to insufficiency of funds?
2. Does a notice of dishonor sent to the main office of the corporation constitute a valid
notice to the said employee who holds office in a separate branch and who had no actual
knowledge thereof? In other words, is constructive knowledge of the corporation, but not
of the signatory-employee, sufficient?

Held 1: After a thorough review of the case at bar, the Court found that Petitioner Lina Lim Lao did
not have actual knowledge of the insufficiency of funds in the corporate accounts at the time she
affixed her signature to the checks involved in this case, at the time the same were issued, and
even at the time the checks were subsequently dishonored by the drawee bank.

The scope of petitioner's duties and responsibilities did not encompass the funding of the
corporation's checks; her duties were limited to the marketing department of the Binondo branch.
Under the organizational structure of Premiere Financing Corporation, funding of checks was the
sole responsibility of the Treasury Department. Furthermore, the Regional Trial Court itself found
that, since Petitioner Lina Lim Lao was often out in the field taking charge of the marketing
department of the Binondo branch, she signed the checks in blank as to name of the payee and the
amount to be drawn, and without knowledge of the transaction for which they were issued. As a
matter of company practice, her signature was required in addition to that of Teodulo Asprec, who
alone placed the name of the payee and the amount to be drawn thereon.

Since Petitioner Lina Lim Lao signed the checks without knowledge of the insufficiency of funds,
knowledge she was not expected or obliged to possess under the organizational structure of the
corporation, she may not be held liable under B.P. 22. For in the final analysis, penal statutes such
as B.P. 22 "must be construed with such strictness as to carefully safeguard the rights of the
defendant . . ." The element of knowledge of insufficiency of funds having been proven to be
absent, petitioner is therefore entitled to an acquittal.
There can be no prima facie evidence of knowledge of insufficiency of funds in the instant case
because no notice of dishonor was actually sent to or received by the petitioner.

Held 2: The notice of dishonor may be sent by the offended party or the drawee bank. The trial
court itself found absent a personal notice of dishonor to Petitioner Lina Lim Lao by the drawee
bank based on the unrebutted testimony of Ocampo "(t)hat the checks bounced when presented
with the drawee bank but she did not inform anymore the Binondo branch and Lina Lim Lao as
there was no need to inform them as the corporation was in distress." The Court of Appeals
affirmed this factual finding. Pursuant to prevailing jurisprudence, this finding is binding on this
Court.
Indeed, this factual matter is borne by the records. The records show that the notice of dishonor
was addressed to Premiere Financing Corporation and sent to its main office in Cubao, Quezon
City. Furthermore, the same had not been transmitted to Premiere's Binondo Office where
petitioner had been holding office.

Likewise no notice of dishonor from the offended party was actually sent to or received by
Petitioner Lao.
Because no notice of dishonor was actually sent to and received by the petitioner, the prima facie
presumption that she knew about the insufficiency of funds cannot apply. Section 2 of B.P. 22
clearly provides that this presumption arises not from the mere fact of drawing, making and
issuing a bum check; there must also be a showing that, within five banking days from receipt of
the notice of dishonor, such maker or drawer failed to pay the holder of the check the amount due
thereon or to make arrangement for its payment in full by the drawee of such check.

Decision: The accused was acquitted.

People v. Ojeda (2004)

FACTS: Cora Abella Ojeda used to buy fabrics (telas) from complainant Ruby Chua. For the three
years approximately she transacted business with Chua,appellant used post dated checks to pay
for the fabrics she bought. On November 5, 1983, appellant purchased from Chua various fabrics
and textile materials worthP228,306 for which she issued 22 post dated checks bearing different
dates and amounts. The 22 checks were all dishonored. Demands were allegedly made to make
good the dishonoured checks, to no avail. Estafa and BP 22 charges were thereafter filed against
Ojeda. The trial court convicted appellant of the crime of estafa as defined and penalized under
paragraph 2(d) of Article 315 of the Revised Penal Code (RPC), and sentenced her to reclusion
perpetua. The trial court also convicted appellant of violation of BP 22 for issuing bouncing checks.
However, the court a quo held her guilty of only 14 counts out of the 22 bouncing checks issued.

HELD: Under paragraph 2(d) of Article 315 ofthe RPC, as amended by RA 4885, 20 the elements of
estafa are: (1) a check is post dated or issued in payment of an obligation contracted at the time it
is issued; (2) lack or insufficiency of funds to cover the check; (3) damage to the payee thereof.
Deceit and damage are essential elements of the offense and must be established by satisfactory
proof to warrant conviction. Thus, the drawer of the dishonored check is given three days from
receipt of the notice of dishonour to cover the amount of the check. Otherwise a prima facie
presumption of deceit arises.The prosecution failed to prove deceit in this case. The prima facie
presumption of deceit was successfully rebutted by appellant's evidence of goodfaith, a defense in
estafa by postdating a check. Good faith may be demonstrated, for instance, by a debtor's offer to
arrange a payment scheme with his creditor. In this case, the debtor not only made arrangements
for payment; as complainant herself categorically stated,the debtor-appellant fully paid the entire
amount of the dishonored checks.It must be noted that our Revised Penal Code was enacted to
penalize unlawful acts accompanied by evil intent denominated as crimes mala in se. The principal
consideration is the existence of malicious intent. There is a concurrence of freedom,
intelligenceand intent which together make up the "criminal mind"behind the "criminal act." Thus,
to constitute a crime,the act must, generally and in most cases, beaccompanied by a criminal
intent. Actus non facitreum, nisi mens sit rea. No crime is committed if themind of the person
performing the act complained of isinnocent. As we held in Tabuena vs. Sandiganbayan:XXXThe
rule was reiterated in People v. Pacana,although this case involved falsification of
publicdocuments and estafa:"Ordinarily, evil intent must unite with anunlawful act for there to be
a crime. Actus non facitreum, nisi mens sit rea. There can be no crime whenthe criminal mind is
wanting."American jurisprudence echoes the sameprinciple. It adheres to the view that criminal
intent inembezzlement is not based on technical mistakes as tothe legal effect of a transaction
honestly entered into,and there can be no embezzlement if the mind of theperson doing the act is
innocent or if there is nowrongful purpose.The accused may thus prove that he acted ingood faith
and that he had no intention to convert themoney or goods for his personal benefit. We
areconvinced that appellant was able to prove the absenceof criminal intent in her transactions
with Chua. Hadher intention been tainted with malice and deceit,appellant would not have exerted
extraordinary effortto pay the complainant, given her own business andfinancial reverses

Vaca vs CA, 298 SCRA 658

FACTS:
Eduardo Vaca is the president and owner of Ervine International while Fernando Nieto, Vaca’s
son-in-law, is the firm’s purchasing manager. They issued a check to the General Agency for
Reconnaissance, Detection and Security (GARDS) and drawn against China Bank. When the check
was presented to the bank on March 29, 1988 for deposit, the check was dishonored for
insufficiency of funds. On April 13, 1988, petitioners issued a new check to replace the
dishonored check.
ISSUE:
1.) Whether or not petitioners had knowledge of lack of funds
2.) Whether or not damage to the payee is an element of the crime
3.) Whether the sentence of imprisonment can be deleted
HELD:
1.) Yes. Section 2 of BP 22 provides “The making, drawing & issuance of a check payment of which
is refused by the drawee because of insufficient funds . . . shall be prima facie evidence of
knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder
thereof the amount due thereon, or makes arrangement for payment in full by the drawee of such
check within 5 banking days after receiving notice that such check has not been paid by the
drawee. Even if such check was intended to replace the bad one, its issuance on April 13, 1988 15
days after petitioners had been notified on March 29, 1988 of the dishonor of their previous
check—cannot negate the presumption that petitioners knew of the insufficiency of funds to cover
the amount of their previous check. Section 2 of BP 22 requires that such check be given within 5
days from the notice of dishonor to them.
2.) No. The petitioners contended that this case was simply a result of a misunderstanding & that
GARDS did not really suffered damage thus they should be acquitted. Even if the payee suffered no
damage as a result of the issuance of the bouncing check, the damage to the integrity of the
banking system cannot be denied. Damage to the payee is not an element of the crime punished in
BP 22.
3.) Petitioners are first-time offenders. They are Filipino entrepreneurs who presumably
contribute to the national economy. In this case we believe that a fine in an amount equal to
double amount of the check involved is an appropriate penalty to impose on each of the
petitioners.
Note: In this case, the Court recognized the contribution of Filipino entrepreneurs to the national
economy; and that to serve the ends of criminal justice, instead of the 1 year imprisonment, a fine
of double the amount of the check involved was imposed as penalty. This was made to redeem
valuable human material and prevent unnecessary deprivation of personal liberty and economic
usefulness with due regard to the protection of the social order.

OTHER DECEITS

Villaflor vs. Court of appeals 192 SCRA 680

Nature: the case was a petition to review on Certiorari the decision of the Court of Appeals
affirming with modification the judgment of the trial court convicting the petitioner for the crime
of Estafa under Article 318 of the Revised Penal Code.

Facts: Complainant Mariano Locsin is a businessman and deals in real estate transactions. He has
known appellant Ricardo Villaflor for some time and on two occasions he had extended small
loans to him. Sometime on June 1967, the accused borrowed one thousand pesos from the
complainant and executed a chattel mortgage on his Opel car which it turned out to be also
mortgaged with Northern Motors. The accused failed to pay the loan on the due date despite
repeated demands, hence a charge for Estafa under Article 318 of the RPC was filed against him.
Before the trial continued, the complainant agreed to have in his possession two sewing machines
as another security for the loan. But still it remained unpaid.

The accused pointed out that there was no deceit employed by him because the mortgage was
executed at the instance of the complainant. He also alleged that the receipt of the sewing
machines amounts to payment of the loan.
Issue:
1. Whether or not accused employed false representations and false pretenses in obtaining
the loan from the complainant.
2. Whether or not the receipt of the sewing machines by the complainant amounts to the
payment of loan, thus extinguishing the obligation.

Held 1: The assurance made by the accused that the car offered as a security had never been
encumbered and his failure to disclose to Locsin that said car was previously mortgaged to the
Northern Motors, Co., constitute deception.

Held 2: The allegation of the accused was bereft of merit because a debt is not to be understood to
have been paid unless the thing or service in which the obligation consists has been paid
completely delivered or rendered, as the case may be.

Decision: The assailed judgment was affirmed.

Veloso vs Sandiganbayan 187 SCRA 504

Nature: This is a petition to review the decision of the Second Division of the Sandiganbayan in
Crim Cases Nos. 2073-2095 and 33233345 insofar as it finds petitioner Jose R. Veloso guilty as co-
principal in the complex crimes of Estafa thru Falsification of Public Documents, as defined and
penalized under Article 318 and 171, paragraph 4, in relation to Article 48, of the Revised Penal
Code.

Facts: an audit was conducted by the Commission on Audit and it found out that there were
anomalies in the Siquijor Highway Engineering District (SHED) and conspiracy between the
suppliers and certain government officials and employees. Because of this, he and other officials
and employees were charged with forty-six (46) counts of Estafa thru Falsification of Public
Documents.

Petitioner denied being a co-conspirator alleging his non- participation in the conspiracy and his
good faith in attaching his signature to the documents involved. He contends that it has not been
shown that he falsified any of the documents which the Sandiganbayan found to be falsifications.
Thus, while he admits that he signed the general vouchers, he claims that his act of doing so was
merely ministerial considering that all the supporting papers and documents were submitted and
attached to the vouchers. He continues that he could not question the veracity of the prepared
Letters of Advice of Allotments (LAA) and Sub-Advices of Cash Disbursement Ceiling (SACDC)
since these documents, with the program of work accompanying them and other inspection
reports, gave him the go-signal to pass them in audit. Thus, he claims that the vouchers would
have been cleared even without his signature as they were supported by the required documents
and certifications.

Issue: whether or not petitioner's participation in the criminal conspiracy has been established
beyond reasonable doubt.

Held: YES.

Rationale: None of the accused regional and district officials can claim good faith or reliance on the
regularity of the documents processed and signed by them or on the presumption that their
subordinates and/or superiors have acted regularly, since by the very nature of their duties, they
should have known or realized by mere scrutiny of the documents or by the exercise of ordinary
diligence that there were irregularities or anomalies reflected on their very faces. This is
simplified by several circumstances patent on said documents, to wit, the irregular funding of the
LAAs the improper charging to prior year's obligations; the unauthorized and/or improper action
by officials on the supporting documents; the lack or incompleteness of supporting documents,
and the splitting of payments. Neither can the accused-contractors claim good faith likewise and
reliance on the actuations of their co-accused public officials since they knew fully well that their
participation in the transactions under question were only make believe or a farce and that their
names, business standing and signatures were only utilized, with their whole-hearted cooperation,
in seeking the consummation of their plans to defraud the government.

Petitioner, as resident auditor of the SHED was tasked with ensuring the regularity of all
transactions that are subject to his review. In these cases, he had before him, for his signature,
vouchers that were patently irregular, supported by similarly irregularly issued documents, which
he should not have passed in audit. Instead of refusing to affix his signature and reporting the
irregularities to his superiors, as he was duty bound to do, he turned a blind eye and signed the
documents, completing the process that led to the consummation of the crime.

He can not rely on the excuse that his subordinates have already initialed the documents for his
signature because his function, as their superior, is to check on their work and to ensure that they
do it correctly. Otherwise, if his signature was a superfluity, petitioner would be serving no useful
purpose in occupying his position of resident auditor.
Petitioner does not dispute the finding that there were anomalies in Neither does he dispute the
existence of a conspiracy between the suppliers and certain government officials and employees.
What he vehemently denies is the Sandiganbayan's finding that he was a conspirator.

Clearly, given his acts and omissions in auditing the documents, which related not only to one but
to several transactions, petitioner's participation in the conspiracy to defraud the Government has
been established beyond reasonable doubt. It is well-settled that there need not be direct evidence
of the existence and details of the conspiracy. Like the guilt of the individual offender, the
existence of a conspiracy and a conspirator's participation may be established through
circumstantial evidence

Decision: The petition was denied.

ARSON
01 People v Murcia (Ayesha)
PEOPLE OF THEPHILIPPINES, Plaintiff-Appellee,
vs
JESSIE VILLEGAS MURCIA, Accused-Appellant.
March 9, 2010
Perez, J.

FACTS:
 Eulogio Quilates (Eulogio) is the owner of a two-storey house in Paringao, Bauang, La
Union.
 occupants of his house:
o sister Felicidad Quilates (Felicidad)
o another sister Alicia Manlupig (Alicia)
o nephew Herminio Manlupig (Herminio)
o appellant, Jessie Murcia, adopted son of Felicidad
 around 3:30 p.m. of 24 March 2004, appellant was drinking with his cousin Herminio and
brothers-in-law Joey Viduya and Ricky Viduya (Ricky) in front of their house. Appellant
and Herminio were arguing over the matter of caring for Felicidad while the latter was
confined in the hospital. Appellant was then seen going inside the house to get a bolo.
When he emerged from the house 10mins later, he ran after Herminio but the latter
managed to escape unscathed. Appellant again went back to the house.
 Ricky resumed drinking after pacifying appellant and Herminio. He then saw smoke
coming from the room of appellant and as he was about to enter the house, he met
 appellant at the door. Appellant apparently tried to stab Ricky but was unsuccessful.
Ricky witnessed appellant stab Felicidad and Alicia.
 Herminio also saw the smoke and peeped through the small window of the house; he
witnessed appellant burning some clothes and boxes in the sala. Herminio immediately
went inside the house to save his personal belongings. Upon emerging from the house,
Herminio saw his mother, Alicia, bloodied.
 Alicia testified that she was sitting on a chair near the toilet when she saw smoke coming
out of appellant’s room. Before she could react, appellant came charging at her and
stabbed her. She sustained wounds on her upper thigh, arms, below her breast and on
her ear. Alicia was still able to ask for help, and her daughter-in-law brought her to the
hospital.
 Eulogio heard a commotion while he was cooking in the second floor of the house. When
Eulogio went down, he already saw smoke coming from the room of appellant. He then
saw Felicidad near the comfort room located outside the house and was bleeding from
her mouth. As he was about to help Felicidad, he met appellant who was then holding a
knife. Eulogio immediately ran away.
 Upon seeing Herminio, appellant immediately attacked him with a knife. However,
Herminio and Ricky were able to pin appellant down. Before they could retaliate, the
barangay captain arrived at the scene. As a result, eight (8) houses were razed.
INFO
 Information dated 6 April 2004, appellant was accused of the crime of arson
“did then and there willfully, unlawfully and feloniously set fire and burn a residential house knowing
the same to be inhabited by one FELICIDAD M. QUILATES burning and killing said FELICIDAD M.
QUILATES as well as burning and damaging nine (9) other neighboring houses in the process, to the
damage and prejudice of said house-owners in the aggregate amount of THREE MILLION PESOS
(Php3,000,000.00), Philippines Currency, as well as to the damage and prejudice of the heirs of
FELICIDAD QUILATES.
The charge is qualified by the resulting death of Felicidad M. Quilates.”
 another Information for frustrated homicide (Alicia Manlupig)
DEFENSE
 Appellant as lone witness
 He stated that while he was having a drinking spree, he saw Felicidad go inside the house
to get a glass of water. He followed her and gave her water. He noticed Felicidad light a
gas lamp. He then went back to his friends and resumed drinking. He got into a heated
argument with Herminio. The latter struck him in the head. He immediately went inside
the house to get a weapon. He was able to get a bolo, went back outside and hit Herminio.
The latter ran away and appellant chased him. Appellant met Alicia and confronted her
about the actuations of Herminio. But Alicia cursed him. Appellant thereafter hit her with
the knife. Appellant then fell on the ground and lost consciousness because, apparently,
he was struck by something in the back. Appellant denied setting the house on fire.
RTC
 guilty beyond reasonable doubt of the crime of arson as charged and defined under Art.
320 of the Revised Penal Code, as amended by R.A. No. 7659, extreme penalty of death
  guilty beyond reasonable doubt of the crime of frustrated homicide as charged and he is
hereby sentenced to suffer the indeterminate penalty of FOUR (4) YEARS of prision
correccional as minimum, to TEN (10) YEARS of prision mayor as maximum
CA affirmed, but reduced the penalty from death to reclusion perpetua
ISSUE: WoN accused is guilty of arson (YES, simple arson)

HELD: guilty beyond reasonable doubt of the crime of arson and sentencing him to reclusion
perpetua is AFFIRMED with MODIFICATIONS:
 indemnify the heirs of Felicidad Quilates the amount of P50,000.00 as moral damages;
P50,000.00 as death indemnity; and P25,000.00 as temperate damages
 P10,000.00 as actual damages in favor of the heirs of Felicidad Quilates is deleted
 pay Eulogio Quilates the amount of P200,000.00 as temperate damages.
 award of P250,000.00 as actual damages in favor of Eulogio Quilates is deleted (because
alleged amount of house, not certain, cant rely solely on Eulogio’s assumption).

RATIO:
 note: Appellant admitted to the crime of frustrated homicide, hence the review is limited
to the crime of arson.
 In the prosecution for arson, proof of the crime charged is complete where the
evidence establishes: (1) the corpus delicti, that is, a fire because of criminal agency; and
(2) the identity of the defendant as the one responsible for the crime. In arson, the corpus
delicti rule is satisfied by proof of the bare fact of the fire and of it having been
intentionally caused. Even the uncorroborated testimony of a single eyewitness, if
credible, is enough to prove the corpus delicti and to warrant conviction
o The photographs, evidencing the charred remains of the houses, established the
occurrence of the fire.
 rules on evidence and principles in jurisprudence have long recognized that the accused
may be convicted through circumstantial evidence
Section 4 of Rule 133 of the Rules of Court provides:
Section 4. Circumstantial evidence, when sufficient.─ Circumstantial evidence is sufficient for
conviction if:
(a) There is more than one circumstance;
(b) The facts from which the inferences are derived are proven; and
(c) The combination of all the circumstances is such as to produce a conviction beyond reasonable
doubt.
 While nobody directly saw appellant burn the house, these circumstances would yield to
a logical conclusion that the fire that gutted eight (8) houses was authored by appellant.
o Murcia returned inside E. Quilates’ house after chasing H. Manlupig with a bolo and
after being pacified by R. Viduya and J. Viduya;
 o during the resumption of their drinking session, R. Viduya and H. Manlupig saw a
thick smoke emanating from E. Quilates’ house particularly the window of accused-
appellant Murcia’s room in the ground floor;
o Manlupig peeped through the said window and saw accused-appellant Murcia
throwing cartons of clothes into the fire. Meanwhile, E. Quilates, who was then
cooking at the second floor, went downstairs and saw the fire coming from the
room occupied by accused-appellant Murcia in the ground floor;
o R. Viduya saw accused-appellant Murcia stabbing F. Quilates and A. Manlupig,
among other persons. E. Quilates saw his sister F. Quilates with blood oozing from
her mouth. Accused-appellant Murcia met him at the ground brandishing a knife at
him which prevented him from helping the wounded F. Quilates and forced him to
run away for safety. E. Quilates’ other sister, A. Manlupig, was also seen wounded
and lying unconscious in the canal; and
o houses of E. Quilates and his neighbors were razed by fire and the commission of
the crime of arson resulted in the demise of F. Quilates whose remains were
burned beyond recognition
 as to credibility of the witnesses: on matters involving the credibility of witnesses, the
trial court is in the best position to assess the credibility of witnesses since it has
observed firsthand their demeanor, conduct and attitude under grilling examination.
o SC finds no cogent reason to depart from the findings of the lower courts
o Court does not discount the fact that there was a fight between appellant and
Herminio which preceded the occurrence of the fire. However, it cannot be
presumed that Herminio will automatically give a false testimony against
appellant. His testimony, having withstood cross-examination, has passed the
scrutiny of the lower courts and was held to be credible.
 ARSON
two categories of arson; based on the kind, character and location of the property burned,
regardless of the value of the damage caused
 Destructive Arson under Article 320 of RPC: malicious burning of structures, both public
and private, hotels, buildings, edifices, trains, vessels, aircraft, factories and other
military, government or commercial establishments by any person or group of persons
 Simple Arson under PD 1316: covers houses, dwellings, government buildings, farms,
mills, plantations, railways, bus stations, airports, wharves and other industrial
establishments
A close examination of the records, as well as description of the crime as stated in the information,
reveals that the crime committed is in fact simple arson because the burned properties are
residential houses. Penalty is reclusion perpetua to death. With the repeal RA 9346, reclusion
perpetua.

People vs Baluntong
PEOPLE OF THE PHILIPPINES
vs
FERDINAND T. BALUNTONG
March 15, 2010
Carpio Morales, J.

FACTS:

 July 31, 1998 (10:30 pm): 12 year old Jovelyn Santos was sleeping in the house of her
grandmother Celerina Solangon at Brgy. Dangay, Roxas, Oriental Mindoro.
 She was awakened by heat emanating from the walls of the house.
 She then roused her cousin Dorecyll and together they went out of the house.
 Jovelyn saw Baluntong (appellant) putting dry hay (dayami) around the house near the
terrace where the fire started, but appellant ran away when he saw her and Dorecyll.
 Appellant’s neighbor, Felicitas Sarzona, also saw appellant near Celerina’s house after it
caught fire, following which, appellant fled on seeing Jovelyn and Dorecyll.
 Felicitas also saw Celerina, who was at a neighbor’s house before the fire started, enter
the burning house and resurface with her grandsons Alvin and Joshua.
 Celerina and Alvin sustained third degree burns which led to their death. Joshua
sustained second degree burns.
Appellant’s Defense: ALIBI
According to hiM, he, on his mother Rosalinda’s request, went to Caloocan City on July 15, 1998
(16 days before the incident) and stayed there until February 1999. Rosalinda corroborated
appellant’s alibi.
RTC: GUILTY of the complex crime of DOUBLE MURDER WITH FRUSTRATED MURDER; DEATH
CA: AFFIRMED RTC, but reduced the penalty to RECLUSION PERPETUA in light of RA 9346 and
by additionally awarding exemplary damages to the heirs of the victims, as well as temperate
damages to Joshua representing his hospitalization
ISSUE: Whether or not appellant is guilty of Double Murder with Frustrated Murder (NO; Simple
Arson)
HELD: Baluntong is found GUILTY of SIMPLE ARSON under Sec. 3 (2) of PD 1613 and is
sentenced to suffer the penalty of RECLUSION PERPETUA with no eligibility for parole.
Damages: P50,000 to the heirs (civil indemnity); P16,500 (actual damages for burial expenses);
P8,500 (temperate damages for hospitalization expenses); P25,000 (temperate damages to the
heirs of Celerina); P25,000 (temperate damages to Joshua Savariz)
RATIO:
APPELLANT’S CONTENTIONS:
 Appellant raised doubt on prosecution witness Felicitas’ claim that she saw appellant
fleeing away from the burning house, it being then 10:30 p.m. and, therefore, dark.
 He raises doubt too on Jovelyn’s claim that she saw appellant, given her failure to ask him
to stop putting dried hay around the house if indeed her claim were true.
SC:
There should be no doubt on prosecution witnesses Felicitas’ and Jovelyn’s positive identification
of their neighbor-herein appellant as the person they saw during the burning of the house, given,
among other things, the illumination generated by the fire. (refer to the transcript of the cross-
examination)
In determining the offense committed by appellant, the Court referred to PEOPLE vs MALNGAN:
“In cases where both burning and death occur, in order to determine what crime/crimes
was/were perpetrated – whether arson, murder or arson and homicide/murder, it is de rigueur to
ascertain the main objective of the malefactor:
(a) if the main objective is the burning of the building or edifice, but death results by reason or
on the occasion of arson, the crime is simply arson, and the resulting homicide is absorbed;

(b) if, on the other hand, the main objective is to kill a particular person who may be in a
building or edifice, when fire is resorted to as the means to accomplish such goal the crime
committed is murder only; lastly,

(c) if the objective is, likewise, to kill a particular person, and in fact the offender has already
done so, but fire is resorted to as a means to cover up the killing, then there are two separate and
distinct crimes committed – homicide/murder and arson.”
Presidential Decree (P.D.) No. 1613, “Amending the Law on Arson,” reads:
Section 3. Other Cases of Arson. ─ The penalty of Reclusion Temporal to Reclusion Perpetua shall
be imposed if the property burned is any of the following:
xxxx
2. Any inhabited house or dwelling;

 There was no showing that appellant’s main objective was to kill Celerina and her
housemates and that the fire was resorted to as the means to accomplish the goal.
 In her Affidavit executed on August 11, 1998, Felicitas stated that what she knew is that
Celerina wanted appellant, who was renting a house near Celerina’s, to move out.
Absent any concrete basis then to hold that the house was set on fire to kill the occupants,
appellant cannot be held liable for double murder with frustrated murder.
This is especially true with respect to the death of Celerina, for even assuming arguendo that
appellant wanted to kill her to get even with her in light of her alleged desire to drive him out of
the neighboring house, Celerina was outside the house at the time it was set on fire. She merely
entered the burning house to save her grandsons.
As it was not shown that the main motive was to kill the occupants of the house, the crime would
only be arson, the homicide being a mere consequence thereof, hence, absorbed by arson.
When there is variance between the offense charged in the complaint or information and that
proved, and the offense charged is included or necessarily includes the offense proved, conviction
shall be for the offense proved which is included in the offense charged, or the offense charged
which is included in the offense proved.
Under Section 5 of P.D. 1613, the penalty of reclusion perpetua to death is imposed when death
results. In the light of the passage of Republic Act No. 9346, the penalty should be reclusion
perpetua.
ON DAMAGES:
Since the trial court awarded the duly proven actual damages of P16,500.00 representing burial
expenses, the award of compensatory damages of P50,000.00 does not lie. It is gathered from the
evidence, however, that Alvin was hospitalized for 5 days, hence, an award of P8,500.00 as
temperate damages for the purpose would be reasonable.
As for the award to Alvin of moral damages, the records do not yield any basis therefor.
The appellate court awarded exemplary damages “to the heirs of the victims,” clearly referring to
the deceased Celerina and Alvin. Absent proof of the presence of any aggravating circumstances,
however, the award does not lie.
When death occurs due to a crime, the grant of civil indemnity requires no proof other than the
death of the victim. The heirs of Celerina are thus entitled to an award of P50,000.00 as civil
indemnity ex delicto. And so are Alvin’s.
The appellate court’s award of temperate damages of P25,000.00 to Joshua is in order.

MALICIOUS MISCHIEF

Caballes vs Department of Agrarian Reform 168 SCRA 247

Nature: the case was a petition for certiorari seeking the annulment of an Order issued by the
public respondent Ministry of Agrarian Reform, now the Department of Agrarian Reform (DAR),
through its then Minister, the Hon. Heherson Alvarez, finding the existence of a tenancy
relationship between the herein petitioner and the private respondent and certifying the criminal
case for malicious mischief filed by the petitioner against the private respondent as not proper for
trial.

Facts: In 1975, before the sale in favor of the Caballes spouses, private respondent Bienvenido
Abajon constructed his house on a portion of the said landholding, paying a monthly rental of
P2.00 to the owner, Andrea Millenes. The landowner likewise allowed Abajon to plant on a portion
of the land, agreeing that the produce thereof would be shared by both on a fitfy-fifty basis. From
1975-1977, Abajon planted corn and bananas on the landholding. In 1978, he stopped planting
corn but continued to plant bananas and camote. During those four years, he paid the P2.00 rental
for the lot occupied by his house, and delivered 50% of the produce to Andrea Millenes.
Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda
Caballes, told Abajon that the poultry they intended to build would be close to his house and
pursuaded him to transfer his dwelling to the opposite or southern portion of the landholding.
Abajon offered to pay the new owners rental on the land occupied by his house, but his offer was
not accepted. Later, the new owners asked Abajon to vacate the premises, saying that they needed
the property. But Abajon refused to leave. The parties had a confrontation before the Barangay
Captain of Lawaan in Talisay, Cebu but failed to reach an agreement. All the efforts exerted by the
landowners to oust Abajon from the landholding were in vain as the latter simply refused to
budge.

On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating that immediately
after she reprimanded Abajon for harvesting bananas and jackfruit from the property without her
knowledge, the latter, with malicious and ill intent, cut down the banana plants on the property
worth about P50.00. A criminal case for malicious mischief was filed against Abajon and which
was docketed as Criminal Case No. 4003. Obviously, all the planting on the property, including that
of the banana plants, had been done by Abajon. On September 30, 1982, upon motion of the
defense in open court pursuant to PD 1038, the trial court ordered the referral of the case to the
Regional Office No. VII of the then MAR for a preliminary determination of the relationship
between the parties. As a result, the Regional Director of MAR Regional VII, issued a certification 1
dated January 24, 1 983, stating that said Criminal Case No. 4003 was not proper for hearing on
the bases of the following findings:

That herein accused is a bona-fide tenant of the land owned by the complaining witness, which is
devoted to bananas;
That thin case is filed patently to harass and/or eject the tenant from his farmholding, which act is
prohibited by law; and
That this arose out of or is connected with agrarian relations.

From these factual findings, the DAR concluded that Abajon was a tenant of Andrea Millenes, the
former owner, who had testified that she shared the produce of the land with Abajon as truer
thereof. Thus, invoking Sec. 10 of RA 3844, as amended, which provides that "[T]he agricultural
leasehold relation under this Code shall not be extinguished by mere expiration of the term or period
in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the
landholding"; and that "(I)n case the agricultural lessor sells, alienates or transfers the legal
possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights
and substituted to the obligations of the agricultural lessor," the MAR ruled that 'the new owners
are legally bound to respect the tenancy, notwithstanding their claim that the portion tilled by
Abajon was small, consisting merely of three (3) meters wide and twenty (20) meters long, or a
total of sixty (60) square meters.
Issues: Whether or not the accused is liable for malicious mischief.

Held: The elements of the crime of malicious mischief are:

1. The offender deliberately caused damage to the property of another;

2. The damage caused did not constitute arson or crimes involving destruction;
3. The damage was caused maliciously by the offender.

The private respondent can not be held criminally liable for malicious mischief in cutting the
banana trees because, as an authorized occupant or possessor of the land, and as planter of the
banana trees, he owns said crops including the fruits thereof The private respondent's possession
of the land is not illegal or in bad faith because he was snowed by the previous owners to enter
and occupy the premises. In other words, the private respondent worked the land in dispute with
the consent of the previous and present owners. Consequently, whatever the private respondent
planted and cultivated on that piece of property belonged to him and not to the landowner. Thus,
an essential element of the crime of malicious mischief, which is "damage deliberately caused to
the property of another," is absent because the private respondent merely cut down his own
plantings.

Decision: The assailed resolution was set aside and the criminal case was dismissed.

ARTICLE 332 EXEMPTION

JOSE R. VELOSO v. SANDIGANBAYAN and PEOPLE
Cortes, J. July 16, 1990 G.R. No. 89043-65
Doctrine
Summary

Facts
Petitioner (District Auditor/SHED Resident Auditor), along with other officers and employees of
the Ministry of Public Highways Central Office, Regional Office No. VII and Siquijor Highway
Engineering District (SHED), and some contractors were charged with 46 counts of Estafa thru
Falsification of Public Documents, as defined and penalized under A318 (Other Deceits) and
A171(4) in relation to A48 of the RPC
• Accused were being held liable for defrauding the Government in the amount of P982,207.60
through the illegal and unauthorized issuance of fake Letters of Advice of Allotments (LAAs) and
Cash Disbursement Ceilings (CDCs) and tampering and falsifications of General Vouchers (GVs)
and supporting documents.
• Sandiganbayan found petitioner guilty as co-principal of the crime charged. His liability
emanated from his irregular and improper processing, pre-audit and approval of all the GVs based
on irregular/fake supporting papers and he knew that these were illegally funded and improperly
charged to the prior year’s obligations. He also engaged in “Splitting” so that he would be the one
to pass the GVs in audit when such should have been forwarded to the COA Regional Auditor for
action/review
• Petitioner does not dispute the existence of anomalies in the SHED nor the existence of a
conspiracy between the suppliers and certain government officials and employees.

Ratio/Issues
Whether petitioner’s participation in the criminal conspiracy has been established beyond
reaonable doubt. YES
• Under a COA circular, petitioner is authorized to countersign checks and warrants in amounts
not exceeding P50,000 in each case. All GVs exceeding said amount should be processed, pre-
audited and approved by the Regional Auditor of COA.
• In this case, accused district officials split GVs involved in the fake LAA in the amount of
P200,000 into 3 separate transactions involving the amounts of P48, 480, P48, 480 and
P48,189.60, Otherwise, the Regional COA Auditor, who might be averse to joining the conspiracy,
may find that the latter GVs were the result of inexistent programs of work, illegal funding,
irregular/non-existent bidding, fictitious deliveries and inspection and other anomalies.
• Sandiganbayan considered such “Splitting” as an integral and/or essential element/link in the
conspiracy to defraud the government inasmuch as such practices were consciously and
deliberately resorted to in order to hide the massive and stupefying misappropriations being
undertaken by the accused.
• Petitioner: Claims innocence and good faith in attaching his signature to the documents. His act
was merely ministerial. He could not question the veracity of the prepared LAAs and CDCs since
such documents gave him the go-signal to pass them in audit.
• Sandiganbayan rejected such arguments. Accused cannot rely on the regularity of the documents
or on the presumption that their subordinates and/or superiors have acted regularly, since, by the
very nature of their duties, they should have known/realized by mere scrutiny of the documents
or by the exercise of ordinary diligence that there were irregularities/anomalies reflected on their
very faces.
• Petitioners acts and omissions in auditing the documents which related not only to one but to
several transactions clearly established his participation in the conspiracy to defraud the
government beyond reaonsable doubt. There need not be direct evidence of the existence and
details of the conspiracy, as conspiracy and a conspirator’s participation may be established
through circumstantial evidence.
• Petitioner was tasked with ensuring the regularity of all transactions that are subject to his
review. In these cases, he had before him GVs that were patently irregular which he should not
have passed in audit, however, he merely turned a blind eye and signed the documents,
completing the process that led to the consummation of the crime.
• He cannot rely on the excuse that his subordinates have already initialed to documents for his
signature because his function as their superior is to check on their work and to ensure that they
do it correctly.
• The number of transactions in which petitioner is involved and the magnitude of the amount
involved also negate the proposition that he was merely careless/negligent in the performance of
his functions.
Decision Decision of Sandiganbayan is AFFIRMED.