SALES September 24, 2015 1

G.R. No. 162822 August 25, 2005

JAIME
GUINHAWA, Petitioners,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
CALLEJO, SR., J.:
Jaime Guinhawa was engaged in the business of selling brand new
motor vehicles, including Mitsubishi vans, under the business name of
Guinrox Motor Sales. His office and display room for cars were located
along Panganiban Avenue, Naga City. He employed Gil Azotea as his
sales manager.
On March 17, 1995, Guinhawa purchased a brand new Mitsubishi L-300
Versa Van with Motor No. 4D56A-C8929 and Serial No. L069WQZJL07970 from the Union Motors Corporation (UMC) in Paco, Manila. The
van bore Plate No. DLK 406. Guinhawas driver, Leopoldo Olayan, drove
the van from Manila to Naga City. However, while the van was traveling
along the highway in Labo, Daet, Camarines Norte, Olayan suffered a
heart attack. The van went out of control, traversed the highway onto the
opposite lane, and was ditched into the canal parallel to the
highway.1 The van was damaged, and the left front tire had to be
replaced.
The incident was reported to the local police authorities and was
recorded in the police blotter.2 The van was repaired and later offered for
sale in Guinhawas showroom.3
Sometime in October 1995, the spouses Ralph and Josephine Silo
wanted to buy a new van for their garment business; they purchased
items in Manila and sold them in Naga City.4 They went to Guinhawas
office, and were shown the L-300 Versa Van which was on display. The
couple inspected its interior portion and found it beautiful. They no longer
inspected the under chassis since they presumed that the vehicle was

brand new.5 Unaware that the van had been damaged and repaired on
account of the accident in Daet, the couple decided to purchase the van
for P591,000.00. Azotea suggested that the couple make a downpayment
of P118,200.00, and pay the balance of the purchase price by
installments via a loan from the United Coconut Planters Bank (UCPB),
Naga Branch, with the L-300 Versa Van as collateral. Azotea offered to
make the necessary arrangements with the UCPB for the consummation
of the loan transaction. The couple agreed. On November 10, 1995, the
spouses executed a Promissory Note6 for the amount of P692,676.00 as
payment of the balance on the purchase price, and as evidence of the
chattel mortgage over the van in favor of UCPB.
On October 11, 1995, the couple arrived in Guinhawas office to take
delivery of the van. Guinhawa executed the deed of sale, and the couple
paid the P161,470.00 downpayment, for which they were issued Receipt
No. 0309.7They were furnished a Service Manual8 which contained the
warranty terms and conditions. Azotea instructed the couple on how to
start the van and to operate its radio. Ralph Silo no longer conducted a
test drive; he and his wife assumed that there were no defects in the van
as it was brand new.9
On October 12, 1995, Josephine Silo, accompanied by Glenda Pingol,
went to Manila on board the L-300 Versa Van, with Glendas husband,
Bayani Pingol III, as the driver. Their trip to Manila was uneventful.
However, on the return trip to Naga from Manila on October 15 or 16,
1995, Bayani Pingol heard a squeaking sound which seemed to be
coming from underneath the van. They were in Calauag, Quezon, where
there were no humps along the road. 10 Pingol stopped the van in Daet,
Camarines Norte, and examined the van underneath, but found no
abnormalities or defects.11 But as he drove the van to Naga City, the
squeaking
sound
persisted.
Believing that the van merely needed grease, Pingol stopped at a Shell
gasoline station where it was examined. The mechanic discovered that
some parts underneath the van had been welded. When Pingol
complained to Guinhawa, the latter told him that the defects were mere
factory defects. As the defects persisted, the spouses Silo requested that
Guinhawa change the van with two Charade-Daihatsu vehicles within a

SALES September 24, 2015 2

week or two, with the additional costs to be taken from their
downpayment. Meanwhile, the couple stopped paying the monthly
amortization on their loan, pending the replacement of the van. Guinhawa
initially agreed to the couples proposal, but later changed his mind and
told them that he had to sell the van first. The spouses then brought the
vehicle to the Rx Auto Clinic in Naga City for examination. Jesus Rex
Raquitico, Jr., the mechanic, examined the van and discovered that it
was the left front stabilizer that was producing the annoying sound, and
that it had been repaired.12 Raquitico prepared a Job Order containing the
following notations and recommendations:
1. CHECK UP SUSPENSION (FRONT)
2. REPLACE THE ROD END
3. REPLACE BUSHING
NOTE: FRONT STEP BOARD HAS BEEN ALREADY DAMAGED AND
REPAIRED.
NOTE: FRONT LEFT SUSPENSION MOUNTING
SPECIFIED ALIGNMENT/MEASUREMENT13

IS

NOT ON

Josephine Silo filed a complaint for the rescission of the sale and the
refund of their money before the Department of Trade and Industry (DTI).
During the confrontation between her and Guinhawa, Josephine learned
that Guinhawa had bought the van from UMC before it was sold to them,
and after it was damaged in Daet. Subsequently, the spouses Silo
withdrew their complaint from the DTI.
On February 14, 1996, Josephine Silo filed a criminal complaint for
violation of paragraph 1, Article 318 of the Revised Penal Code against
Guinhawa in the Office of the City Prosecutor of Naga City. After the
requisite investigation, an Information was filed against Guinhawa in the
Municipal Trial Court (MTC) of Naga City. The inculpatory portion reads:

The undersigned Assistant Prosecutor of Naga City accuses Jaime

Guinhawa of the crime of OTHER DECEITS defined and penalized under
Art. 318, par. 1 of the Revised Penal Code, committed as follows:
"That on or about October 11, 1995, in the City of Naga, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, being a
motor vehicle dealer using the trade name of Guinhawa Motor Sales at
Panganiban Avenue, Naga City, and a dealer of brand new cars, by
means of false pretenses and fraudulent acts, did then and there willfully,
unlawfully and feloniously defraud private complainant, JOSEPHINE P.
SILO, as follows: said accused by means of false manifestations and
fraudulent representations, sold to said private complainant, as brand
new, an automobile with trade name L-300 Versa Van colored beige and
the latter paid for the same in the amount of P591,000.00, when, in truth
and in fact, the same was not brand new because it was discovered less
than a month after it was sold to said Josephine P. Silo that said L-300
Versa Van had defects in the underchassis and stepboard and repairs
had already been done thereat even before said sale, as was found upon
check-up by an auto mechanic; that private complainant returned said L300 Versa Van to the accused and demanded its replacement with a new
one or the return of its purchase price from said accused but despite
follow-up demands no replacement was made nor was the purchase
price returned to private complainant up to the present to her damage
and prejudice in the amount of P591,000.00, Philippine Currency, plus
other damages that may be proven in court."14
Guinhawa testified that he was a dealer of brand new Toyota, Mazda,
Honda and Mitsubishi cars, under the business name Guinrox Motor
Sales. He purchased Toyota cars from Toyota Philippines, and Mitsubishi
cars from UMC in Paco, Manila.15 He bought the van from the UMC in
March 1995, but did not use it; he merely had it displayed in his
showroom in Naga City.16 He insisted that the van was a brand new unit
when he sold it to the couple. 17 The spouses Silo bought the van and took
delivery only after inspecting and taking it for a road tests. 18His sales
manager, Azotea, informed him sometime in November 1995 that the
spouses Silo had complained about the defects under the left front
portion of the van. By then, the van had a kilometer reading of 4,000

SALES September 24, 2015 3

kilometers.19 He insisted that he did not make any false statement or
fraudulent misrepresentation to the couple about the van, either before or
simultaneous with its purchase. He posited that the defects noticed by
the couple were not major ones, and could be repaired. However, the
couple refused to have the van repaired and insisted on a refund of their
payment for the van which he could not allow. He then had the defects
repaired by the UMC.20 He claimed that the van was never involved in
any accident, and denied that his driver, Olayan, met an accident and
sustained physical injuries when he drove the van from Manila to Naga
City.21 He even denied meeting Bayani Pingol.
The accused claimed that the couple filed a Complaint 22 against him with
the DTI on January 25, 1996, only to withdraw it later. 23 The couple then
failed to pay the amortizations for the van, which caused the UCPB to file
a petition for the foreclosure of the chattel mortgage and the sale of the
van at public auction.24
Azotea testified that he had been a car salesman for 16 years and that he
sold brand new vans.25 Before the couple took delivery of the vehicle,
Pingol inspected its exterior, interior, and underside, and even drove it for
the couple.26 He was present when the van was brought to the Rx Auto
Clinic, where he noticed the dent on its front side. 27 He claimed that the
van never figured in any vehicular accident in Labo, Daet, Camarines
Norte on March 17, 1995.28 In fact, he declared, he found no police record
of a vehicular accident involving the van on the said date. 29 He admitted
that Olayan was their driver, and was in charge of taking delivery of cars
purchased from the manufacturer in Manila.30
On November 6, 2001, the trial court rendered judgment convicting
Guinhawa. The fallo of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
declaring the accused, JAIME GUINHAWA, guilty of the crime of Other
Deceits defined and penalized under Art. 318(1) of the Revised Penal
Code, the prosecution having proven the guilt of the accused beyond
reasonable doubt and hereby imposes upon him the penalty of
imprisonment from 2 months and 1 day to 4 months of Arresto Mayor and

a fine of One Hundred Eighty Thousand Seven Hundred and Eleven

Pesos (P180,711.00) the total amount of the actual damages caused to
private complainant.
As to the civil aspect of this case which have been deemed instituted with
this criminal case, Articles 2201 and 2202 of the Civil Code provides:
"Art. 2201. In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural
and probable consequences of the breach of the obligation, and which
the parties have foreseen or could have reasonably foreseen at the time
the obligation was constituted.
"In case of fraud, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the
non-performance of the obligation."
"Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all
damages which are the natural and probable consequences of the act or
omission complained of. It is not necessary that such damages have
been foreseen or could have reasonably been foreseen by the
defendant."
Thus, accused is condemned to pay actual damages in the amount of
One Hundred Eighty Thousand Seven Hundred and Eleven Pesos
(Php180,711.00), which represents the 20% downpayment and other
miscellaneous expenses paid by the complainant plus the amount of
Nineteen Thousand Two Hundred Forty-One (Php19,241.00) Pesos,
representing the 1st installment payment made by the private
complainant to the bank. Accused is, likewise, ordered to pay moral
damages in the amount of One Hundred Thousand Pesos
(Php100,000.00) in view of the moral pain suffered by the complainant;
for exemplary damages in the amount of Two Hundred Thousand Pesos
(Php200,000.00) to serve as deterrent for those businessmen similarly
inclined to take undue advantage over the publics innocence. As for
attorneys fees, the reasonable amount of One Hundred Thousand Pesos
(Php100,000.00) is hereby awarded.

SALES September 24, 2015 4

SO ORDERED.31
The trial court declared that the accused made false pretenses or
misrepresentations that the van was a brand new one when, in fact, it
had figured in an accident in Labo, Daet, Camarines Norte, and
sustained serious damages before it was sold to the private complainant.

THE COURT A QUO ERRED IN CONVICTING PETITIONER OF THE

CRIME OF OTHER DECEITS AND SENTENCING HIM TO SUFFER
IMPRISONMENT OF TWO MONTHS AND ONE DAY TO FOUR
MONTHS OFARRESTO MAYOR AND TO PAY FINE IN THE AMOUNT
OF P180,711.00.
II

Guinhawa appealed the decision to the Regional Trial Court (RTC) of

Naga City, Branch 19, in which he alleged that:
1. The lower court erred in its finding that the repair works on the left front
portion and underchassis of the van was the result of the accident in
Labo, Camarines Norte, where its driver suffered an attack of
hypertension.
2. The lower court erred in its four (4) findings of fact that accusedappellant made misrepresentation or false pretenses "that the van was a
brand new car," which constituted deceit as defined in Article 318,
paragraph 1 of the Revised Penal Code.
3. The lower court erred in finding accused-appellant civilly liable to
complainant Josephine Silo. But, even if there be such liability, the action
therefor has already prescribed and the amount awarded was
exhorbitant, excessive and unconscionable.32
Guinhawa insisted that he never talked to the couple about the sale of
the van; hence, could not have made any false pretense or
misrepresentation.
On August 1, 2002, the RTC affirmed the appealed judgment.33
Guinhawa filed a petition for review with the Court of Appeals (CA),
where he averred that:
I

THE COURT A QUO ERRED IN ORDERING PETITIONER TO PAY

PRIVATE
COMPLAINANT P180,711.00
AS
DOWNPAYMENT, P19,241.00 AS FIRST INSTALLMENT WITH UCPB
NAGA, P100,000.00
AS
MORAL
DAMAGES, P200,000.00
AS
EXEMPLARY DAMAGES AND P100,000.00 AS ATTORNEYS FEES.34
On January 5, 2004, the CA rendered judgment affirming with
modification the decision of the RTC. The fallo of the decision reads:
WHEREFORE, premises considered, the instant petition is hereby
partially granted insofar as the following are concerned: a) the award of
moral damages is hereby REDUCED to P10,000.00 and b) the award of
attorneys fees and exemplary damages are hereby DELETED for lack of
factual basis. In all other respects, We affirm the decision under review.
Costs against petitioner.
SO ORDERED.35
The CA ruled that the private complainant had the right to assume that
the van was brand new because Guinhawa held himself out as a dealer
of brand new vans. According to the appellate court, the act of displaying
the van in the showroom without notice to any would-be buyer that it was
not a brand new unit was tantamount to deceit. Thus, in concealing the
vans true condition from the buyer, Guinhawa committed deceit.
The appellate court denied Guinhawas motion for reconsideration,
prompting him to file the present petition for review on certiorari, where
he contends:

SALES September 24, 2015 5

I
THE COURT A QUO ERRED IN NOT HOLDING THAT THE
INFORMATION CHARGED AGAINST PETITIONER DID NOT INFORM
HIM OF A CHARGE OF OTHER DECEITS.
II
THE COURT A QUO ERRED IN HOLDING THAT PETITIONER
EMPLOYED FRAUD OR DECEIT AS DEFINED UNDER ARTICLE 318,
REVISED PENAL CODE.
III
THE COURT A QUO ERRED IN NOT CONSIDERING
CIRCUMSTANCES POINTING TO THE INNOCENCE OF
PETITIONER.36

THE
THE

The issues for resolution are (1) whether, under the Information, the
petitioner was charged of other deceits under paragraph 1, Article 318 of
the Revised Penal Code; and (2) whether the respondent adduced proof
beyond reasonable doubt of the petitioners guilt for the crime charged.
The petitioner asserts that based on the allegations in the Information, he
was charged with estafa through false pretenses under paragraph 2,
Article 315 of the Revised Penal Code. Considering the allegation that
the private complainant was defrauded of P591,000.00, it is the RTC, not
the MTC, which has exclusive jurisdiction over the case. The petitioner
maintains that he is not estopped from assailing this matter because the
trial courts lack of jurisdiction can be assailed at any time, even on
appeal, which defect cannot even be cured by the evidence adduced
during the trial. The petitioner further avers that he was convicted of other
deceits under paragraph 1, Article 318 of the Revised Penal Code, a
crime for which he was not charged; hence, he was deprived of his
constitutional right to be informed of the nature of the charge against him.
And in any case, even if he had been charged of other deceits under
paragraph 1 of Article 318, the CA erred in finding him guilty. He insists

that the private complainant merely assumed that the van was brand
new, and that he did not make any misrepresentation to that effect. He
avers that deceit cannot be committed by concealment, the absence of
any notice to the public that the van was not brand new does not amount
to deceit. He posits that based on the principle of caveat emptor, if the
private complainant purchased the van without first inspecting it, she
must suffer the consequences. Moreover, he did not attend to the private
complainant when they examined the van; thus, he could not have
deceived them.
The petitioner maintains that, absent evidence of conspiracy, he is not
criminally liable for any representation Azotea may have made to the
private complainant, that the van was brand new. He insists that the
respondent was estopped from adducing evidence that the vehicle was
involved in an accident in Daet, Camarines Norte on March 17, 1995,
because such fact was not alleged in the Information.
In its comment on the petition, the Office of the Solicitor General avers
that, as gleaned from the material averments of the Information, the
petitioner was charged with other deceits under paragraph 1, Article 318
of the Revised Penal Code, a felony within the exclusive jurisdiction of
the MTC. The petitioner was correctly charged and convicted, since he
falsely claimed that the vehicle was brand new when he sold the same to
the private complainant. The petitioners concealment of the fact that the
van sustained serious damages as an aftermath of the accident in Daet,
Camarines Norte constituted deceit within the meaning of paragraph 1 of
Article 318.
The Information filed against the petitioner reads:
That on or about October 11, 1995, in the City of Naga, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, being a
motor vehicle dealer using the trade name of Guinhawa Motor Sales at
Panganiban Avenue, Naga City, and dealer of brand new cars, by means
of false pretenses and fraudulent acts, did then and there, willfully,
unlawfully and feloniously defraud private complainant, JOSEPHINE P.
SILO, as follows: said accused by means of false manifestations and

SALES September 24, 2015 6

fraudulent representations, sold to said private complainant, as brand
new, an automobile with trade name L-300 Versa Van colored beige and
the latter paid for the same in the amount of P591,000.00, when, in truth
and in fact, the same was not brand new because it was discovered less
than a month after it was sold to said Josephine P. Silo that said L-300
Versa Van had defects in the underchassis and stepboard and repairs
have already been done thereat even before said sale, as was found
upon check-up by an auto mechanic; that private complainant returned
said L-300 Versa Van to the accused and demanded its replacement with
a new one or the return of its purchase price from said accused but
despite follow-up demands no replacement was made nor was the
purchase price returned to private complainant up to the present to her
damage and prejudice in the amount of P591,000.00, Philippine
Currency, plus other damages that may be proven in court.

As can be gleaned from its averments, the Information alleged the

essential elements of the crime under paragraph 1, Article 318 of the
Revised Penal Code.

CONTRARY TO LAW.37

This provision was taken from Article 554 of the Spanish Penal Code
which provides:

Section 6, Rule 110 of the Rules of Criminal Procedure requires that the
Information must allege the acts or omissions complained of as
constituting the offense:
SEC. 6. Sufficiency of complaint or information. A complaint or
information is sufficient if it states the name of the accused; the
designation of the offense given by the statute; the acts or omissions
complained of as constituting the offense; the name of the offended party;
the approximate date of the commission of the offense; and the place
where the offense was committed.
When an offense is committed by more than one person, all of them shall
be included in the complaint or information.
The real nature of the offense charged is to be ascertained by the facts
alleged in the body of the Information and the punishment provided by
law, not by the designation or title or caption given by the Prosecutor in
the Information.38 The Information must allege clearly and accurately the
elements of the crime charged.39

The false or fraudulent representation by a seller that what he offers for

sale is brand new (when, in fact, it is not) is one of those deceitful acts
envisaged in paragraph 1, Article 318 of the Revised Penal Code. The
provision reads:
Art. 318. Other deceits. The penalty of arresto mayor and a fine of not
less than the amount of the damage caused and not more than twice
such amount shall be imposed upon any person who shall defraud or
damage another by any other deceit not mentioned in the preceding
articles of this chapter.

El que defraudare o perjudicare a otro, usando de cualquier engao que

no se halle expresado en los artculos anteriores de esta seccin, ser
castigado con una multa del tanto al duplo del perjuicio que irrogare; y en
caso de reincidencia, con la del duplo y arresto mayor en su grado medio
al mximo.
For one to be liable for "other deceits" under the law, it is required that the
prosecution must prove the following essential elements: (a) false
pretense, fraudulent act or pretense other than those in the preceding
articles;
(b) such false pretense, fraudulent act or pretense must be made or
executed prior to or simultaneously with the commission of the fraud; and
(c) as a result, the offended party suffered damage or prejudice. 40 It is
essential that such false statement or fraudulent representation
constitutes the very cause or the only motive for the private complainant
to part with her property.
The provision includes any kind of conceivable deceit other than those
enumerated in Articles 315 to 317 of the Revised Penal Code. 41 It is

SALES September 24, 2015 7

intended as the catchall provision for that purpose with its broad scope
and intendment.42
Thus, the petitioners reliance on paragraph 2(a), Article 315 of the
Revised Penal Code is misplaced. The said provision reads:

Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts

and Municipal Circuit Trial Courts in Criminal Cases. Except in cases
falling within the exclusive original jurisdiction of Regional Trial Courts
and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:

2. By means of any of the following false pretenses or fraudulent acts

executed prior to or simultaneously with the commission of the fraud:

(1) Exclusive original jurisdiction over all violations of city or municipal

ordinances committed within their respective territorial jurisdiction; and

(a) By using fictitious name, or falsely pretending to possess power,

influence, qualifications, property, credit, agency, business or imaginary
transactions; or by means of other similar deceits.

(2) Exclusive original jurisdiction over all offenses punishable with

imprisonment not exceeding six (6) years irrespective of the amount of
fine, and regardless of other imposable accessory or other penalties,
including the civil liability arising from such offenses or predicated
thereon, irrespective of kind, nature, value or amount thereof: Provided,
however, That in offenses involving damage to property through criminal
negligence, they shall have exclusive original jurisdiction thereof.

The fraudulent representation of the seller, in this case, that the van to be
sold is brand new, is not the deceit contemplated in the law. Under the
principle of ejusdem generis, where a statement ascribes things of a
particular class or kind accompanied by words of a generic character, the
generic words will usually be limited to things of a similar nature with
those particularly enumerated unless there be something in the context to
the contrary.43
Jurisdiction is conferred by the Constitution or by law. It cannot be
conferred by the will of the parties, nor diminished or waived by them.
The jurisdiction of the court is determined by the averments of the
complaint or Information, in relation to the law prevailing at the time of the
filing of the criminal complaint or Information, and the penalty provided by
law for the crime charged at the time of its commission.
Section 32 of Batas Pambansa Blg. 129, as amended by Republic Act
No. 7691, provides that the MTC has exclusive jurisdiction over offenses
punishable with imprisonment not exceeding six years, irrespective of the
amount of the fine:

Since the felony of other deceits is punishable by arresto mayor, the MTC
had exclusive jurisdiction over the offense lodged against the petitioner.
On the merits of the petition, the Court agrees with the petitioners
contention that there is no evidence on record that he made direct and
positive representations or assertions to the private complainant that the
van was brand new. The record shows that the private complainant and
her husband Ralph Silo were, in fact, attended to by Azotea. However, it
bears stressing that the representation may be in the form of words, or
conduct resorted to by an individual to serve as an advantage over
another. Indeed, as declared by the CA based on the evidence on record:
Petitioner cannot barefacedly claim that he made no personal
representation that the herein subject van was brand new for the simple
reason that nowhere in the records did he ever refute the allegation in the
complaint, which held him out as a dealer of brand new cars. It has thus
become admitted that the petitioner was dealing with brand new vehicles
a fact which, up to now, petitioner has not categorically denied.
Therefore, when private complainant went to petitioners showroom, the
former had every right to assume that she was being sold brand new

SALES September 24, 2015 8

vehicles there being nothing to indicate otherwise. But as it turned out,
not only did private complainant get a defective and used van, the vehicle
had also earlier figured in a road accident when driven by no less than
petitioners own driver.44
Indeed, the petitioner and Azotea obdurately insisted in the trial court that
the van was brand new, and that it had never figured in vehicular
accident. This representation was accentuated by the fact that the
petitioner gave the Service Manual to the private complainant, which
manual
contained the warranty terms and conditions, signifying that the van was
"brand new." Believing this good faith, the private complainant decided to
purchase the van for her buy-and-sell and garment business, and even
made a downpayment of the purchase price.
As supported by the evidence on record, the van was defective when the
petitioner sold it to the private complainant. It had ditched onto the
shoulder of the highway in Daet, Camarines Norte on its way from Manila
to Naga City. The van was damaged and had to be repaired; the rod end
and bushing had to be replaced, while the left front stabilizer which gave
out a persistent annoying sound was repaired. Some parts underneath
the van were even welded together. Azotea and the petitioner deliberately
concealed these facts from the private complainant when she bought the
van, obviously so as not to derail the sale and the profit from the
transaction.
The CA is correct in ruling that fraud or deceit may be committed by
omission. As the Court held in People v. Balasa:45
Fraud, in its general sense, is deemed to comprise anything calculated to
deceive, including all acts, omissions, and concealment involving a
breach of legal or equitable duty, trust, or confidence justly reposed,
resulting in damage to another, or by which an undue and
unconscientious advantage is taken of another. It is a generic term
embracing all multifarious means which human ingenuity can device, and
which are resorted to by one individual to secure an advantage over
another by false suggestions or by suppression of truth and includes all

surprise, trick, cunning, dissembling and any unfair way by which another
is cheated. On the other hand, deceit is the false representation of a
matter of fact whether by words or conduct, by false or misleading
allegations, or by concealment of that which should have been disclosed
which deceives or is intended to deceive another so that he shall act
upon it to his legal injury.46
It is true that mere silence is not in itself concealment. Concealment
which the law denounces as fraudulent implies a purpose or design to
hide facts which the other party sought to know. 47 Failure to reveal a fact
which the seller is, in good faith, bound to disclose may generally be
classified as a deceptive act due to its inherent capacity to
deceive.48 Suppression of a material fact which a party is bound in good
faith to disclose is equivalent to a false representation. 49 Moreover, a
representation is not confined to words or positive assertions; it may
consist as well of deeds, acts or artifacts of a nature calculated to
mislead another and thus allow the fraud-feasor to obtain an undue
advantage.50
Fraudulent nondisclosure and fraudulent concealment are of the same
genre. Fraudulent concealment presupposes a duty to disclose the truth
and that disclosure was not made when opportunity to speak and inform
was presented, and that the party to whom the duty of disclosure, as to a
material fact was due, was induced thereby to act to his injury.51
Article 1389 of the New Civil Code provides that failure to disclose facts
when there is a duty to reveal them constitutes fraud. In a contract of
sale, a buyer and seller do not deal from equal bargaining positions when
the latter has knowledge, a material fact which, if communicated to the
buyer, would render the grounds unacceptable or, at least, substantially
less desirable.52 If, in a contract of sale, the vendor knowingly allowed the
vendee to be deceived as to the thing sold in a material matter by failing
to disclose an intrinsic circumstance that is vital to the contract, knowing
that the vendee is acting upon the presumption that no such fact exists,
deceit is accomplished by the suppression of the truth.53

SALES September 24, 2015 9

In the present case, the petitioner and Azotea knew that the van had
figured in an accident, was damaged and had to be repaired.
Nevertheless, the van was placed in the showroom, thus making it
appear to the public that it was a brand new unit. The petitioner was
mandated to reveal the foregoing facts to the private complainant. But the
petitioner and Azotea even obdurately declared when they testified in the
court a quo that the vehicle did not figure in an accident, nor had it been
repaired; they maintained that the van was brand new, knowing that the
private complainant was going to use it for her garment business. Thus,
the private complainant bought the van, believing it was brand new.
Significantly, even when the petitioner was apprised that the private
complainant had discovered the vans defects, the petitioner agreed to
replace the van, but changed his mind and insisted that it must be first
sold.
The petitioner is not relieved of his criminal liability for deceitful
concealment of material facts, even if the private complainant made a
visual inspection of the vans interior and exterior before she agreed to
buy
it
and
failed to inspect its under chassis. Case law has it that where the vendee
made only a partial investigation and relies, in part, upon the
representation of the vendee, and is deceived by such representation to
his injury, he may maintain an action for such deceit. 54 The seller cannot
be heard to say that the vendee should not have relied upon the
fraudulent concealment; that negligence, on the part of the vendee,
should not be a defense in order to prevent the vendor from unjustifiably
escaping with the fruits of the fraud.
In one case,55 the defendant who repainted an automobile, worked it over
to resemble a new one and delivered it to the plaintiff was found to have
warranted and represented that the automobile being sold was new. This
was found to be "a false representation of an existing fact; and, if it was
material and induced the plaintiff to accept something entirely different
from that which he had contracted for, it clearly was a fraud which, upon
its discovery and a tender of the property back to the seller, [it] entitled
the plaintiff to rescind the trade and recover the purchase money." 56

On the petitioners insistence that the private complainant was proscribed

from charging him with estafa based on the principle of caveat emptor,
case law has it that this rule only requires the purchaser to exercise such
care and attention as is usually exercised by ordinarily prudent men in
like business affairs, and only applies to defects which are open and
patent to the service of one exercising such care. 57 In an avuncular case,
it was held that:
The rule of caveat emptor, like the rule of sweet charity, has often
been invoked to cover a multitude of sins; but we think its protecting
mantle has never been stretched to this extent. It can only be applied
where it is shown or conceded that the parties to the contract stand on
equal footing and have equal knowledge or equal means of knowledge
and there is no relation of trust or confidence between them. But, where
one party undertakes to sell to another property situated at a distance
and of which he has or claims to have personal knowledge and of which
the buyer knows nothing except as he is informed by the seller, the buyer
may rightfully rely on the truth of the sellers representations as to its
kind, quality, and value made in the course of negotiation for the purpose
of inducing the purchase. If, in such case, the representations prove to be
false, neither law nor equity will permit the seller to escape responsibility
by the plea that the buyer ought not to have believed him or ought to
have applied to other sources to ascertain the facts. 58
It bears stressing that Azotea and the petitioner had every opportunity to
reveal to the private complainant that the van was defective. They
resolved to maintain their silence, to the prejudice of the private
complainant, who was a garment merchant and who had no special
knowledge of parts of motor vehicles. Based on the surrounding
circumstances, she relied on her belief that the van was brand new. In
fine, she was the innocent victim of the petitioners fraudulent
nondisclosure or concealment.
The petitioner cannot pin criminal liability for his fraudulent omission on
his general manager, Azotea. The two are equally liable for their
collective fraudulent silence. Case law has it that wherever the doing of a
certain act or the transaction of a given affair, or the performance of

SALES September 24, 2015 10

certain business is confided to an agent, the authority to so act will, in
accordance with a general rule often referred to, carry with it by
implication the authority to do all of the collateral acts which are the
natural and ordinary incidents of the main act or business authorized. 59
The MTC sentenced the petitioner to suffer imprisonment of from two
months and one day, as minimum, to four months of arresto mayor, as
maximum. The CA affirmed the penalty imposed by the trial court. This is
erroneous. Section 2 of Act 4103, as amended, otherwise known as the
Indeterminate Sentence Law, provides that the law will not apply if the
maximum term of imprisonment does not exceed one year:
SEC. 2. This Act shall not apply to persons convicted of offenses
punished with death penalty or life-imprisonment; to those convicted of
treason, conspiracy or proposal to commit treason; to those convicted of
misprision of treason, rebellion, sedition or espionage; to those convicted
of piracy; to those who are habitual delinquents; to those who shall have
escaped from confinement or evaded sentence; to those who having
been granted conditional pardon by the Chief Executive shall have
violated the terms thereof; to those whose maximum term of
imprisonment does not exceed one year, not to those already sentenced
by final judgment at the time of approval of this Act, except as provided in
Section 5 hereof. (As amended by Act No. 4225.)

one year or less, and the maximum exceeds one year. For example, the
trial court may impose an indeterminate penalty of six months of arresto
mayor, as minimum, to two years and four months of prision correccional,
as maximum, since the maximum term of imprisonment it imposed
exceeds one year. If the trial court opts to impose a penalty of
imprisonment of one year or less, it should not impose an indeterminate
penalty, but a straight penalty of one year or less instead. Thus, the
petitioner may be sentenced to a straight penalty of one year, or a
straight penalty of less than one year, i.e., ten months or eleven months.
We believe that considering the attendant circumstances, a straight
penalty of imprisonment of six months is reasonable.
Conformably with Article 39 in relation to paragraph 3, Article 38 of the
Revised Penal Code, the petitioner shall suffer subsidiary imprisonment if
he has no property with which to pay the penalty of fine.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The
assailed Decision and Resolution areAFFIRMED WITH MODIFICATION.
Considering the surrounding circumstances of the case, the petitioner is
hereby sentenced to suffer a straight penalty of six (6) months
imprisonment. The petitioner shall suffer subsidiary imprisonment in case
of insolvency.
Costs against the petitioner.

In this case, the maximum term of imprisonment imposed on the

petitioner was four months and one day ofarresto mayor. Hence, the
MTC was proscribed from imposing an indeterminate penalty on the
petitioner. An indeterminate penalty may be imposed if the minimum of
the
penalty
is

SO ORDERED.