EN BANC

[ G.R. No. 205698, July 31, 2018 ]

HOME DEVELOPMENT MUTUAL FUND (HDMF) PAG-IBIG FUND,
PETITIONER, VS. CHRISTINA SAGUN, RESPONDENT.

[G.R. No. 205780]

DEPARTMENT OF JUSTICE, REP. BY SEC. LEILA DE LIMA, STATE

PROSECUTOR THEODORE M. VILLANUEVA, AND PROSECUTOR
GENERAL CLARO A. ARELLANO, AND THE NATIONAL BUREAU OF
INVESTIGATION (NBI), PETITIONERS, VS. CHRISTINA SAGUN,
RESPONDENT.

[G.R. No. 208744]

DEPARTMENT OF JUSTICE, PETITIONER, VS. DELFIN S. LEE,

RESPONDENT.

[G.R. No. 209424]

HOME DEVELOPMENT MUTUAL FUND (HDMF), PETITIONER, VS.

GLOBE ASIATIQUE REALTY HOLDINGS CORPORATION, DELFIN S.
LEE, IN HIS CAPACITY AS THE PRESIDENT OF THE CORPORATION,
AND TESSIE G. WANG, RESPONDENTS.

[G.R. No. 209446]

PEOPLE OF THE PHILIPPINES, PETITIONER, VS. ALEX M. ALVAREZ,

RESPONDENT.

[G.R. No. 209489]

HOME DEVELOPMENT MUTUAL FUND, PETITIONER, VS. ATTY. ALEX

M. ALVAREZ RESPONDENT.

[G.R. No. 209852]

HOME DEVELOPMENT MUTUAL FUND, (HDMF), PETITIONER, VS.

DELFIN S. LEE, RESPONDENT.
 [G.R. No. 210095]

DEPARTMENT OF JUSTICE, PETITIONER, VS. DELFIN S. LEE,

RESPONDENT.

[G.R. No. 210143]

PEOPLE OF THE PHILIPPINES PETITIONER, VS. DELFIN S. LEE,

RESPONDENT.

[G.R. No. 228452]

HOME DEVELOPMENT MUTUAL FUND (HDMF), PETITIONER, VS.

DEXTER L. LEE, RESPONDENT.

[G.R. No. 228730]

PEOPLE OF THE PHILIPPINES, PETITIONER, VS. DEXTER L. LEE,

RESPONDENT.

[G.R. No. 230680]

CRISTINA SALAGAN, PETITIONER, VS. PEOPLE OF THE PHILIPPINES

AND HOME DEVELOPMENT MUTUAL FUND (HDMF), RESPONDENTS.

DECISION

BERSAMIN, J.:

We hereby consider and resolve the following consolidated appeals by petition for review
on certiorari,[1] namely:

(1) G.R. Nos. 205698, 205780, 209446, 209489, 209852, 210143, 228452 and 228730,
whereby petitioners Department of Justice (DOJ), the People of the Philippines and the
Home Development Mutual Fund (HDMF) assail the decisions[2] of the Court of Appeals
(CA): (i) setting aside the August 10, 2011 Review Resolution of the DOJ insofar as
Christina Sagun (Sagun) is concerned; and (ii) annulling the May 22, 2012 and August
22, 2012 resolutions of the Regional Trial Court, Branch 42, in San Fernando City,
Pampanga (Pampanga RTC), and quashing the warrants of arrest issued against Delfin
Lee, Dexter Lee (Dexter), and Atty. Alex Alvarez (Atty. Alvarez) for lack of probable
cause;

(2) G.R. No. 230680, whereby petitioner Cristina Salagan assails the decision of the CA
dismissing her petition for certiorari and upholding the resolutions dated May 22, 2012
and January 29, 2014 of the Pampanga RTC insofar as finding probable cause for the
crime of syndicated estafa and the issuance of a warrant of arrest against her were
concerned;

(3) G.R. Nos. 208744 and 210095, whereby the DOJ challenges the resolutions of the
CA dismissing its petition for certiorari for being filed out of time;[3] and

(4) G.R. No. 209424, whereby HDMF assails the decision promulgated on October 7,
2013,[4] whereby the CA found no grave abuse of discretion on the part of the Regional
Trial Court, Branch 58, in Makati City (Makati RTC) in issuing its January 31, 2012 final
resolution granting the motion for summary judgment of Globe Asiatique Realty
Holdings, Corp. (Globe Asiatique) and Delfin Lee in Civil Case No. 10-1120
entitled Globe Asiatique Realty Holdings Corporation and Delfin Lee, in his capacity as
President of the Corportion v. Home Development Mutual Fund (HDMF) or Pag-IBIG
Fund, its Board of Trustees and Emma Linda Faria, Officer-in-Charge.

Salient Factual Antecedents

In 2008, Globe Asiatique, through its president Delfin Lee, entered into a Window I-
Contract to Sell (CTS) Real Estate Mortgage (REM) with Buy-back Guaranty take out
mechanism with the HDMF, also known as the Pag-Ibig Fund, for its Xevera Bacolor
Project in Pampanga. Globe Asiatique and HDMF also executed various Funding
Commitment Agreements (FCAs) and Memoranda of Agreement (MOAs). [5]

Under the FCAs, Delfin Lee warranted that the loan applicants that Globe Asiatique
would allow to pre-process, and whose housing loans it would approve, were existing
buyers of its real estate and qualified to avail themselves of loans from HDMF under the
Pag-Ibig Fund; that all documents submitted to the HDMF in behalf of the applicants,
inclusive of the individual titles and the corresponding Deeds of Assignment, were valid,
binding and enforceable; that any person or agent employed by Globe Asiatique or
allowed to transact or do business in its behalf had not committed any act of
misrepresentation; and that in the event of a default of the three-month payment on the
amortizations by said members or any breach of warranties, Globe Asiatique would buy
back the CTS/REM accounts during the first two years of the loan.[6]

The parties further agreed that Globe Asiatique would collect the monthly amortizations
on the loans obtained by its buyers in the first two years of the loan agreements and remit
the amounts collected to HDMF through a Collection Servicing Agreement (CSA). In
this regard, Delfin Lee undertook to maintain at least 90% Performing Accounts Ratio
(PAR) under the CSA.[7]

On June 10, 2008, Delfin Lee proposed the piloting of a Special Other Working Group
(OWG) Membership Program for its Xevera Bacolor Project while the FCA was in
effect. The OWG Membership Program would comprise of HDMF members who were
not formally employed but derived income from non-formal sources (e.g., practicing
professionals, self-employed members, Overseas Filipino Workers (OFWs), and
entrepreneurs). Delfin Lee offered to extend the buy-back guarantee from two to five
years to bolster his position that the project was viable. HDMF eventually entered into
another agreement for this purpose.[8]

Corollary to the foregoing, the parties entered into a second FCA worth P200,000,000.00.
Globe Asiatique likewise undertook that the PAR for all of its projects would be
increased to at least 95%; that the buy-back guaranty for all accounts taken out from the
Xevera Bacolor Project would be increased to five years; that it would assign all its
housing loan proceeds from its other projects to HDMF to cover any unpaid obligations
from the Xevera Project; and that the OWG borrowers, to be eligible for Pag-Ibig
Membership, would be required to present their Income Tax Returns (ITRs) and
affidavits of income.[9]

On July 13, 2009, the parties executed a MOA granting Globe Asiatique an additional
P5,000,000,000.00 funding commitment line for its Xevera Projects in Pampanga on the
condition that Globe Asiatique would maintain a 95% PAR, and that the housing loan
take-outs would be covered by a buy-back guaranty of five years.[10] Section 9 of the
MOA expressly stated, however, that the MOA "supersedes, amends and modifies
provisions of all other previous and existing Agreements that are Inconsistent hereto." [11]

More FCAs were executed between the parties. According to HDMF, the aggregate
amount of P7,007,806,000.00 was released to Globe Asiatique in a span of two years
from 2008 to September 24, 2010, representing a total of 9,951 accounts.[12]

In the course of its regular validation of buyers' membership eligibilities for taking out
loans for the Xevera Project, HDMF allegedly discovered some fraudulent transactions
and false representations purportedly committed by Globe Asiatique, its owners, officers,
directors, employees, and agents/representatives, in conspiracy with HDMF employees.
HDMF invited the attention of Delfin Lee regarding some 351 buyers who surrendered or
withdrew their loans and were no longer interested in pursuing the same, and requested
Globe Asiatique to validate the 351 buyers. Delfin Lee replied that Globe Asiatique was
actually monitoring about 1,000 suspicious buyers' accounts. Subsequently, HDMF
ostensibly found out about an additional 350 buyers who either denied knowledge of
having availed of loans or manifested their intention to terminate their account.[13]

As a result, HDMF revoked the authority of Globe Asiatique under the FCA; suspended
all take-outs for new housing loans; required the buyback of the 701 fraudulent accounts;
and cancelled the release of funds to Globe Asiatique in August 2010.

About a month later, Globe Asiatique discontinued remitting the monthly amortization
collections from all borrowers of Xevera.

Finally, HDMF terminated the CSA with Globe Asiatique on August 31, 2010. [14]

Meanwhile, HDMF continued its post take-out validation of the borrowers, and
discovered that at least 644 supposed borrowers under the OWG Membership Program
who were processed and approved by Globe Asiatique for the take-out by HDMF were
not aware of the loans they had supposedly signed in relation to the Xevera Project; and
assuming they were aware of the loan agreements, they had merely signed the same in
consideration of money given to them by Globe Asiatique; that some borrowers were
neither members of HDMF nor qualified to take out a housing loan from HDMF because
they had insufficient or no income at all or they did not have the minimum number of
contributions in HDMF; and that some of the borrowers did not live in the units they
purchased.[15]

HDMF alleged that at least 805 borrowers could not be located or were unknown in the
addresses they had provided in the loan agreements, or had indicated non-existent
addresses therein; and that it incurred damages totalling P1.04 billion covering the loans
of 644 fraudulent and 805 fake borrowers attributed to the fraudulent and criminal
misrepresentations of Delfin Lee and Globe Asiatique's officials and employees. [16]

The Criminal Charges

Upon the recommendation of the National Bureau of Investigation (NBI), the DOJ
conducted its preliminary investigation against Globe Asiatique, particularly its officers,
namely: Delfin S. Lee, Dexter L. Lee, Ramon Palma Gil, Cristina Salagan, Lerma Vitug,
Tintin Fonclara, Geraldine Fonclara, Revelyn Reyes, Atty. Rod Macaspac, Marvin
Arevalo, Joan Borbon, Christian Cruz, Rodolfo Malabanan, Nannet Haguiling, John
Tungol and Atty. Alex Alvarez on the strength of the complaint-affidavit dated October
29, 2010 filed by Emma Linda B. Faria, then the officer-in-charge (OIC) of the HDMF.
This first complaint alleged the commission of the crime of syndicated estafa constituting
economic sabotage, as defined and penalized under Article 315(2)(a) of the Revised
Penal Code, in relation to Presidential Decree No. 1689 (P.D. No. 1689).[17]

The DOJ formed a panel of prosecutors to investigate the complaint.

On December 10, 2010, the NBI Anti-Graft Division recommended the filing of a second
complaint for syndicated estafa constituting economic sabotage under P.D. No. 1689, in
relation to Article 315(2) of the Revised Penal Code against Delfin Lee and the others.
This second complaint was precipitated by the complaints of supposed Globe Asiatique
clients such as Evelyn Niebres, Catherine Bacani and Ronald San Nicolas, who were
victims of double sale perpetrated by Globe Asiatique.[18]

Also, HDMF brought a complaint against Globe Asiatique and its officers for the
fraudulent take-out of housing loans for bogus buyers.

Subsequently, the DOJ formed yet another panel of prosecutors to conduct another
preliminary investigation.[19]

Upon learning of the filing of the second case in the DOJ, Delfin Lee filed a petition for
the suspension of proceedings pending the outcome of the civil action for specific
performance that he and Globe Asiatique had commenced in the Makati RTC, contending
therein that the issue in the civil case constituted a prejudicial question vis-a-vis the
second DOJ case.

On February 21, 2011, the DOJ panel of prosecutors issued an Omnibus Order denying
Delfin Lee's prayer for suspension of proceedings.

After Delfin Lee's motion for reconsideration was denied on July 5, 2011, he filed his
counter-affidavit ad cautelam in the DOJ.[20]

On August 10, 2011, Prosecutor General Claro A. Arellano approved the Review

Resolution of Senior Deputy State Prosecutor Theodore M. Villanueva, the Chairman of
the DOJ's Task Force on Securities and Business Scam (SDSP Villanueva) pertaining to
the first criminal complaint.[21] It is noted that the investigating prosecutors of the DOJ's
Task Force on Securities and Business Scam had initially recommended the filing of
charges for the crime of estafa defined and penalized under paragraph 2(a) of Article 315
of the Revised Penal Code, in relation to paragraph 2, Section 1 of PD No. 1689, against
Delfin Lee, Sagun, and Cristina Salagan (Salagan). However, SDSP Villanueva
recommended in the Review Resolution the inclusion of Atty. Alvarez and Dexter Lee in
the estafa charge, thereby charging syndicated estafa, with no bail recommended.[22]

Consequently, Delfin Lee filed an amended petition on August 25, 2011 to enjoin the
DOJ from filing the information for syndicated estafa in relation to the first DOJ case.[23]

On September 15, 2011, Sagun filed in the CA her petition for certiorari and prohibition
with prayer for the issuance of a temporary restraining order (TRO) and/or writ of
preliminary injunction to assail the August 10, 2011 Review Resolution of the DOJ (C.A.-
G.R. SP No. 121346).[24]

On his part, Atty. Alvarez resorted to his own petition for review on October 3, 2011 of
the same August 10, 2011 Review Resolution in the DOJ. However, on November 14,
2011, he withdrew his petition following his filing of a petition in the Manila RTC on
October 10, 2011 assailing the same August 10, 2011 Review Resolution. He also filed a
petition for certiorari with the CA on November 15, 2011 to enjoin the DOJ from tiling
the information in the first syndicated estafa case, but he subsequently withdrew the
petition and filed on the same day a petition for injunction and prohibition in the
Caloocan City RTC, Branch 125, to enjoin the DOJ from filing the information in the
first syndicated estafa case and from conducting the preliminary investigation in the
second case.[25]

Proceedings in the Pasig RTC

Prior to the DOJ's issuance of its August 10, 2011 Review Resolution, Delfin Lee initiated
his action for injunction on July 28, 2011 in the Pasig RTC to enjoin the DOJ from
proceeding with the second DOJ case, and reiterated therein that the civil case pending in
the Makati RTC constituted a prejudicial question vis-a-vis the second DOJ case. The
case was docketed as Civil Case No. 73115 entitled Delfin S. Lee v. Department of
Justice.

The Pasig RTC, then presided by Judge Rolando Mislang, granted Delfin Lee's prayer for
the issuance of the TROs on August 16, 2011, and admitted the amended petition on
August 26, 2011.[26]

The Pasig RTC thereafter issued the writ of preliminary injunction under both the
original and the an1ended petitions on September 5, 2011.[27]

Aggrieved, the DOJ filed a petition for certiorari on October 6, 2011 (C.A.-G.R. SP No.
121594), alleging that Judge Mislang had committed grave abuse of discretion in issuing
the writ of preliminary injunction enjoining the filing of the information for
syndicated estafa with respect to the first case and from proceeding with the preliminary
investigation in the second case on the ground of the existence of a prejudicial question.
[28]

On April 16, 2012, the CA granted the DOJ's petition for certiorari in C.A.-G.R. SP No.
121594, and ruled that the facts and issues in the civil case pending in the Makati RTC
were not determinative of the guilt or innocence of Delfin Lee in the cases filed in the
DOJ; hence, it annulled and set aside the writ of preliminary injunction issued by Judge
Mislang.[29]

The adverse ruling in C.A.-G.R. SP No. 121594 was appealed by petition for review
on certiorari. On July 4, 2012, the Court dismissed the appeal because of Delfin Lee's
failure to show any reversible error on the part of the CA in issuing the assailed decision.
The dismissal became final and executory.[30]
Much later on, Delfin Lee learned of the third and fourth criminal complaints filed in the
DOJ. Again, he sought the issuance of a TRO by the Pasig RTC.

On March 21, 2013, Judge Mislang issued the second TRO enjoining the preliminary
investigation of the second, third and fourth criminal complaints.[31]

On April 10, 2013, Judge Mislang issued the writ of preliminary injunction in Civil Case
No. 73115 enjoining the conduct of the preliminary investigation in the second, third and
fourth criminal complaints.[32]

Consequently, the DOJ filed another petition for certiorari, docketed as C.A.-G.R. SP

No. 130409, to annul the writ of preliminary injunction issued on April 10, 2013 by the
Pasig RTC.

Proceedings in the Pampanga RTC

With the lifting of the first writ of preliminary injunction issued by the Pasig RTC, the
DOJ filed a criminal case for syndicated estafa against Delfin Lee, Dexter Lee, Christina
Sagun (Sagun), Cristina Salagan (Salagan), and Atty. Alex Alvarez (Atty. Alvarez) on
April 30, 2012 in the Pampanga RTC. The case was docketed as Criminal Case No.
18480 entitled People of the Philippines v. Delfin Lee, Dexter L. Lee, Christina Sagun,
Cristina Salagan, and Atty. Alex Alvarez.[33]

The information in Criminal Case No. 18480 reads:

That sometime during the period from 10 June 2008 to 24 September 2010, or on dates
prior and subsequent thereto, in the City of San Fernando, Pampanga, and within the
jurisdiction of this Honorable Court, the above-named accused DELFIN S. LEE,
DEXTER L. LEE, CHRISTINA SAGUN[,] CRISTINA SALAGAN and ATTY. ALEX
ALVAREZ, acting as a syndicate formed with the intention of carrying out the unlawful
or illegal act, transaction, enterprise or scheme of soliciting funds from the general
public, each performing a particular act in furtherance of the common design, by way of
take out on housing loans of supposed Pag-IBIG fund members through the use of
fictitious buyers and/or "special buyers" conspiring, confederating and mutually helping
one another, by means of false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of fraud, did then and there wilfully, unlawfully and
feloniously defraud the private complainant HOME DEVELOPMENT MUTUAL
FUND, otherwise known as the Pag-IBIG Fund, in the following manner, to wit: accused
Delfin S. Lee, being the president and chief executive officer of Globe Asiatique Realty
Holdings Corporation (GA), a domestic corporation engaged in real estate development,
did then and there willfully, unlawfully and knowingly enter into funding commitment
agreements and other transactions with the private complainant, wherein said accused
Delfin S. Lee made false and fraudulent representations to the latter that GA has
interested buyers in its Xevera projects in Bacolor and Mabalacat, Pampanga when, in
truth and in fact, said accused knew fully well that the corporation does not have such
buyers, as in fact the said corporation, through accused Delfin S. Lee, Dexter L. Lee,
Christina Sagun, Cristina Salagan and Atty. Alex Alvarez, in conspiracy with one
another, submitted names of fictitious buyers and documents to Pag-IBIG Fund as
housing loan applicants/buyers of GA's Xevera projects in order to obtain, as in fact the
said corporation obtained, through accused Delfin S. Lee, fund releases from HDMF by
way of housing loan take-out of the said fictitious buyers. In addition, the said
corporation, through accused Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina
Salagan and Atty. Alex Alvarez, has also engaged in a "special buyers" scheme whereby
it recruited persons who does not have any intention to buy its housing units in Xevera
but, in exchange for a fee, said "special buyers" lent their names and Pag-IBIG
membership to GA, so that the said corporation could use, as in fact it has used, the
names and Pag-IBIG membership of the said "special buyers" in obtaining fund releases
from HDMF, as the said corporation, through accused Delfin S. Lee, had in fact obtained
fund releases from HDMF, by way of take-out of the supposed housing loans of the
"special buyers", and by reason of the aforesaid false and fraudulent representations of
accused Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina Salagan and Atty. Alex
Alvarez, HDMF was induced to release, through several funding commitment
agreements, to Globe Asiatique Realty Holdings Corporation, through accused Delfin S.
Lee, the total amount of P6,653,546,000.00, more or less, and upon receipt of the
aforesaid amount, the above-named accused did then and there willfully, unlawfully and
feloniously convert, misappropriate and misapply the same, and despite repeated
demands, the above-named accused failed and refused to pay the same, to the damage
and prejudice of the private complainant in the aforesaid amount.

As to the element of deceit, it was found that the documents submitted by GA concerning
the existence and qualifications of its buyers are spurious and/or questionable. It was
uncovered that at least 351 of the supposed buyers have already surrendered or withdrew
their loans and/or are no longer interested in pursuing their loans, while the alleged
buyers for additional 350 Xevera accounts have either denied availing of the loans or
expressed their intention to cancel their respective accounts. Afterwards, documents
obtained by HDMF through special audit conducted on the Xevera Projects disclose that
out of the 8,230 loans taken out by Pag-IBIG, only 39% of the borrowers belong to the
Other Working Group (OWG) category. On the other hand, out of the 10% of the OWG
surveyed/audited, only 1.85% are actually living in the units they purchased, whereas,
83.38% of the acquired units remain unoccupied; 7.69% of the units are closed, 6.15%
are being occupied by third parties; and lastly, 0.92% of the units are yet to be
constructed. The same documents likewise show that: (a) from a random examination of
the units taken out by Pag-IBIG and which are being occupied by third parties, 16 units
are being occupied by in-house buyers - two of whom have fully paid their obligations
with GA; 3 units were leased out by non borrowers; 1 unit is being occupied by a
replacement buyer; and 82% of the borrowers of the units have failed to submit their
respective Income Tax Returns (ITR) which is a mandatory requirement for the approval
of their loan applications, and (b) as a result of the post take-out validation conducted by
HDMF, it was found that 644 borrowers endorsed by GA are not genuine buyers of
Xevera homes while 802 are nowhere to be found; 3 buyers are already deceased; and
275 were not around during the visit, hence, establishing that all of them are fictitious
buyers.

In connection with the "special buyers scheme," it was established that the people
engaged as such have no intention of buying housing units from GA, but merely agreed
to the same after GA's agents sought them out for a fee of P5,000.00. After being paid
such fee, the aforementioned "special buyers" agreed to apply for membership with Pag-
IBIG, on the condition that it is GA that pays for their 24 months installments, so that
they can be qualified to apply for a Pag-IBIG housing loan. Thereafter, these "special
buyers" are made to execute loan and other supporting documents, which are then
submitted to HDMF for take-out of their housing loans for the Xevera projects. After
take-out, GA pays the monthly amortizations of these "special buyers" to Pag-IBIG,
using the payment made to it by Pag-IBIG on the housing loan of GA's Xevera project
buyers. In this wise, GA's Performing Accounts Ration (PAR) reached as high as
99.97%. However, when HDMF stopped fund releases to GA by way of housing loan
take-outs of its buyers, or sometime August 2010, GA started to fail in remitting to
HDMF Pampanga Branch office the monthly housing loan amortizations of its buyers of
Xevera project. Thus, GA's almost 100% monthly collection/remittance rate dropped to
0% or no remittance at all when HDMF stopped its fund releases to GA, thereby
establishing that the monthly amortizations of its borrowers were being paid by GA from
the funds released by HDMF on the housing loans of its Xevera housing project
borrowers.

That in carrying out the aforesaid conspiracy, accused Christina Sagun, head of the
documentation department of Globe Asiatique Realty and Holdings Corp., did then and
there unlawfully, feloniously and knowingly process and approve the housing loan
applications of the said fictitious and "special buyers" of GA, in clear violation of the
terms of conditions of the agreements entered into between HDMF and GA; accused
Dexter L. Lee, did then and there, unlawfully, feloniously and knowingly order
employees of GA to find and recruit "special buyers," and in fact found such special
buyers, in accordance with the aforementioned illegal scheme, and in fact, is a co-
signatory of the checks issued by GA in favor of the said "special buyers;" accused Atty.
Alex Alvarez, did then and there unlawfully, feloniously and knowingly notarize crucial
pieces of documents, consisting, among others, of the buyer's affidavit of income,
promissory note, and developer's affidavit (by Ms. Cristina Sagun) alleging compliance
with the conditions set by HDMF, all of which are essential for the processing and
approval of the purported transaction; and accused CRISTINA SALAGAN, being the
head of GA's accounting department, did then and there unlawfully, feloniously and
knowingly allow the release of the questionable amounts of P5,000.00 as payment to
every fake/fictitious and/or "special buyer" applicant of GA despite knowledge of its
unlawful and illegal nature, to the damage and prejudice of HDMF and/or its members.

CONTRARY TO LAW.[34]
In due course, the respondents separately moved to quash the information and to seek
judicial determination of probable cause.[35]

On May 22, 2012, the Pampanga RTC found probable cause for syndicated estafa and for
the issuance of warrants of arrest, to wit:

PREMISES GIVEN, the Court orders the following:

I. Probable cause for the crime of ESTAFA (ARTICLE 315 [2] [a] of the Revised Penal
Code, in relation to Section 1 of P.D. 1689, as amended, is found against the Accused
DELFIN S. LEE, DEXTER L. LEE, CHRISTINA SAGUN, CRISTINA SALAGAN and
ATTY. ALEX ALVAREZ.

II. Issue Warrant of Arrest against DELFIN S. LEE, DEXTER L. LEE, CHRISTINA
SAGUN, CRISTINA SALAGAN and ATTY. ALEX ALVAREZ.

III. There is NO BAIL RECOMMENDED for each of DELFIN S. LEE, DEXTER L.

LEE, CHRISTINA SAGUN, CRISTINA SALAGAN and ATTY. ALEX ALVAREZ.

The setting (sic) on May 23 and 24, 2010 is (sic) CANCELLED.

SO ORDERED.[36]
Upon notice of the resolution, Delfin Lee filed a Motion to Recall/Quash Warrant of
Arrest and/or Hold in Abeyance their Release to Law Enforcement Agencies Pending
Resolution of this Motion.

On August 22, 2012, the Pampanga RTC denied Delfin Lee's Motion to Recall/Quash
Warrant of Arrest and/or Hold in Abeyance their Release to Law Enforcement Agencies
Pending Resolution of this Motion.[37]

Delfin Lee, Dexter and Salagan moved to reconsider the August 22, 2012 resolution of
the Pampanga RTC.

Without waiting for the resolution of the motion, Delfin Lee filed a petition
for certiorari with prayer for the issuance of a TRO and/or writ of preliminary injunction
in the CA on November 26, 2012 to nullify the resolutions of the Pampanga RTC dated
May 22, 2012 and August 22, 2012 (C.A.-G.R. SP No. 127553).[38]

Meanwhile, Atty. Alvarez also filed a motion for reconsideration of the May 22, 2012
resolution, but the Pampanga RTC denied the motion on August 22, 2012. Thereafter, he
filed a petition for certiorari with the CA to nullify and set aside the May 22, 2012 and
August 22, 2012 resolutions of the Pampanga RTC. The petition was docketed as C.A.-
G.R. SP No. 127690.

Dexter filed his own petition for certiorari in the CA to question the May 22, 2012 and
August 22, 2012 resolutions of the Pampanga RTC, Salagan likewise filed her own
petition for certiorari in the CA alleging grave abuse of discretion on the part respondent
Judge of the Pampanga RTC in issuing the May 22, 2012 resolution denying her second
motion to quash information with prayer to re-determine probable cause and the January
29, 2014 resolution denying her motion for reconsideration.

The Civil Case

(Proceedings before the Makati RTC)

Globe Asiatique and Delfin Lee initiated the complaint for specific performance and
damages against HDMF on November 15, 2010. Docketed as Civil Case No. 10-1120,
[39]
 the case was assigned to Branch 58 of the Makati RTC. Globe Asiatique and Delfin
Lee thereby sought to compel HDMF to accept the proposed replacements of the
buyers/borrowers who had become delinquent in their amortizations, asserting that
HDMF's inaction to accept the replacements had forced Globe Asiatique to default on its
obligations under the MOA and FCAs.[40]

Globe Asiatique and Delfin Lee filed a Motion for Summary Judgment, which the Makati
RTC, after due proceedings, resolved on January 30, 2012, disposing thusly:
WHEREFORE, premises considered, a Summary Judgment is hereby rendered
declaring that:

1. Plaintiff (sic) have proven their case by preponderance of evidence. As such, they are
entitled to specific performance and right to damages as prayed for in the
Complaint, except that the exact amount of damages will have to be determined
during trial proper.

2. Pursuant to the provisions of their MOA amending the continuing FCAs and CSAs,
defendant HDMF is hereby ordered to comply faithfully and religiously with its
obligation under the said contracts, including but not limited to the release of loan take-
out proceeds of those accounts whose Deed[s] of Assignment with Special Power of
Attorney have already been annotated in the corresponding Transfer Certificate of Title
covering the houses and lots purchased by the Pag-IBIG member-borrowers from
plaintiff GARHC as well as the evaluation of the loan applications of those who
underwent or will undergo plaintiff GARHC's loan counselling and are qualified or PAG-
IBIG FUND loans under the MOA and continuing FCAs and process the approval
thereof only if qualified, under the Window 1 Facility as provided for in the MOA and
continuing FCAs;
3. The unilateral cancellation by defendant HDMF of the continuing FCAs specifically
the latest FCAs of December 15, 2009, January 5 and March 17, 2010 and CSA dated 10
February 2009, is hereby SET ASIDE[;]

4. Defendants are ordered to automatically off-set the balance of those listed in Annex
"E" of the Motion for Summary Judgment against the retention money, escrow money,
funding commitment fees, loan takeout proceeds and other receivables of plaintiff
GARHC which are still in the control and possession of defendant HDMF;

5. Defendants are ordered to accept the replacement-buyers listed in Annex "F" of the
Motion for Summary Judgment, which list is unopposed by defendants, without interest
or penalty from the time of defendant HDMF's cancellation of the Collection Servicing
Agreement (CSA) resulting to the refusal to accept the same up to the time that these
replacement buyers are actually accepted by defendant HDMF;

6. Defendants are ordered to release the corresponding Transfer Certificate of Title[s]

(TCTs) of those accounts which are fully paid or subjected to automatic off-setting
starting from the list in Annex "E" of the Motion for Summary Judgment and thereafter
from those listed in Annex "F" thereof and cause the corresponding cancellation of the
annotations in the titles thereof.

Let this case be set for the presentation of evidence on the exact amount of damages that
plaintiffs are entitled to on March 12, 2012 at 8:30 in the morning.

SO ORDERED.[41]
On December 11, 2012, the Makati RTC denied the motion for reconsideration of OIC
Faria and Atty. Berberabe filed through the Yorac Arroyo Chua Caedo and Coronal Law
Firm (the Yorac Law Firm). The trial court held that the Yorac Law Firm was not duly
authorized to represent the HDMF; hence, it treated the motion for reconsideration as a
mere scrap of paper and opined that its filing did not toll the running of the period to
appeal. As to the HDMF, the Makati RTC, noting with approval the manifestation of
Globe Asiatique and Delfin Lee to the effect that the HDMF had not filed a motion for
reconsideration or taken an appeal, deemed the summary judgment final and executory as
to the HDMF.[42]

Aggrieved, the HDMF brought its petition for certiorari (C.A.-G.R. SP No. 128262).

Decisions of the CA

The CA promulgated the separate decisions now under review.

1.
C.A.-G.R. SP No. 130409
 (DOJ petition assailing the April 10, 2013 writ of preliminary injunction issued by
the Pasig RTC)

On June 18, 2013, the DOJ filed the intended petition for certiorari but inadvertently did
not indicate therein the proper docket number for the case thereby causing the assignment
by the CA of a new docket number, specifically C.A.-G.R. SP No. 130409. On June 26,
2013, the CA dismissed the DOJ's petition for certiorari in C.A.-G.R. SP No. 130409 on
the ground that it had not received a motion for extension of time to file the petition.[43]

Meanwhile, on July 8, 2013, the CA issued its resolution in C.A.-G.R. SP No. 130404
denying the DOJ's motion for extension for failure of the DOJ to file the intended petition
for certiorari.

Realizing its error later on, the DOJ immediately filed a manifestation with motion to
admit petition for certiorari to clarify the mix-up and rectify its error. On August 14,
2013, the CA denied the DOJ's manifestation with motion to admit petition for certiorari.

Hence, the DOJ filed a petition docketed as G.R. No. 208744 to assail the resolution
promulgated on July 8, 2013 in C.A.-G.R. SP No. 130404.[44] As to CA-G.R. SP No.
130409, the DOJ moved for reconsideration of the CA's resolution dated June 26, 2013,
but the motion was denied on November 11, 2013.[45]

2.
C.A.-G.R. SP No. 128262
(HDMF Petition assailing the January 30, 2012 and December 11, 2012 resolutions
of the Makati RTC in Civil Case No. 10-1120)

On October 7, 2013, the CA promulgated its decision dismissing the HDMF petition
in C.A.-G.R. SP No. 128262,[46] to wit:
WHEREFORE, there being no grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of public respondent in rendering the assailed Resolution dated
January 30, 2012 containing the Summary Judgment and the Resolution dated December
11, 2012 denying HDMF, Faria and Atty. Berberabe's Motion for Reconsideration, the
instant petition is hereby DISMISSED.

SO ORDERED.
The CA opined that the HDMF had availed itself of the wrong remedy to assail the
January 30, 2012 summary judgment and the December 11, 2012 resolution of the
Makati RTC; and that the certiorari petition did not further show that it had been filed
under the authority of the Office of the Government Corporate Counsel, or by a private
law firm with the necessary pre-requisite conformity of the Government Corporate
Counsel and Commission on Audit.[47]
 3.
C.A.-G.R. SP No. 121346
(Sagun Petition assailing the August 10, 2011 Review Resolution of the DOJ)

In C.A.-G.R. SP No. 121346, the CA opined that respondent Sagun's duties as the
Documentation Head of Globe Asiatique were ministerial in nature and did not require
the employment of much discretion. As the DOJ observed in its assailed Review
Resolution, Sagun's functions were limited to the collation of the documents submitted by
the borrowers/buyers through Globe Asiatique's Marketing Department, and to ensuring
that such documents were complete and duly accomplished, and to the determination and
verification from the HDMF through the submission of Membership Status Verification
whether the borrowers/buyers were really HDMF members, or had updated contributions,
or had no existing housing loans, and were thus qualified to apply for housing loans. The
CA conceded that any errors or oversights, which could occur in the performance of
Sagun's duties, should be attributed to her negligence, as concluded in the Review
Resolution.

While the DOJ asserted that the fraud could have been averted had Sagun not been
negligent, the CA explained that such negligence negated any intent to commit a crime;
hence, Sagun could not have committed the crime of estafa charged. Moreover, the
documents Sagun had reviewed were forwarded to the HDMF for evaluation and
approval; hence, the HDMF had the opportunity and the ultimate prerogative and
discretion on the documents.

Accordingly, the CA disposed in its assailed decision promulgated on October 5, 2012

in C.A.-G.R. SP No. 121346,[48] viz.:
WHEREFORE, premises considered, the Petition for Certiorari and Prohibition is
hereby PARTIALLY GRANTED. Consequently, the subject Review Resolution dated
August 10, 2011 issued by respondent DOJ is SET ASIDE and DISMISSED as against
petitioner Christina Sagun.

SO ORDERED.[49]
4.
C.A.-G.R. SP No. 127553, C.A.-G.R. SP No.127554, and C.A.-G.R. SP No. 127690
(respectively, the Delfin Lee Petition, Dexter Lee Petition and Alvarez Petition
assailing the May 22, 2012 and August 22, 2012 resolutions of the Pampanga RTC)

On October 3, 2013, the CA promulgated its decision on the Alvarez petition (C.A.-G.R.
SP No. 127690),[50] ruling that there was not enough evidence to implicate Atty. Alvarez;
that the RTC had merely listed the documents submitted by the task force and had not
conducted any evaluation of the evidence to determine whether or not Alvarez had
participated in the alleged grand scheme to defraud the HDMF; and that the RTC had
relied solely on the recommendation of the panel of prosecutors, which was insufficient
under prevailing jurisprudence. The disposition was as follows:
WHEREFORE, in view of the foregoing premises, the Petition for Certiorari and the
Supplemental Petition are PARTIALLY GRANTED and the assailed Resolutions dated
May 22, 2012 and August 22, 2012 of the Regional Trial Court, Branch 42 of San
Fernando City, Pampanga in so far as petitioner ALEX M. ALVAREZ is concerned are
hereby annulled and set aside. Accordingly, the warrant of arrest issued against him is
hereby LIFTED, QUASHED/RECALLED.

Meantime, since the evidence do not support the finding of probable cause against
petitioner ALEX M. ALVAREZ, public respondent court is hereby enjoined from
proceeding with Criminal Case No. 18480 as against said petitioner only.

SO ORDERED.[51]
On November 7, 2013, the CA promulgated its decision on Delfin Lee's petition (C.A.-
G.R. SP No. 127553),[52] decreeing:
WHEREFORE, in view of the foregoing, the instant petition is hereby PARTIALLY
GRANTED. The assailed Resolutions dated May 22, 2012 and August 22, 2012 are
hereby ANNULLED and SET ASIDE for the issuance thereof was attended with grave
abuse of discretion on the part of public respondent Hon. Ma. Amifaith S. Fider-Reyes, in
her capacity as the Presiding Judge of the San Fernando, Pampanga RTC - Branch 42.
Consequently, the Warrant of Arrest issued against petitioner Delfin S. Lee is
hereby QUASHED, RECALLED AND LIFTED. Afore-named public respondent
judge is directed to CEASE and DESIST from further proceeding with Criminal Case
No. 18480 insofar as petitioner Delfin S. Lee is concerned.

Furthermore, all government agencies tasked in the enforcement of the said warrant of
arrest including but not limited to the Philippine National Police (PNP), the National
Bureau of Investigation (NBI) and the Bureau of Immigration (BI) are
immediately ENJOINED from implementing the same.

SO ORDERED.[53]
The CA observed that the RTC gravely abused its discretion because its conclusion on
finding probable cause to issue the arrest warrant was in the nature of speculation; that
the RTC had merely relied on the information, the Review Resolution and the six boxes of
documentary evidence to find and conclude that a huge amount of money had been
transferred from the HDMF to Globe Asiatique through a complex scheme that could
only have been attained through the sustained action of people in concert to commit their
criminal intention; that such findings and conclusions were not based on hard facts and
solid evidence as required by jurisprudence; that the report did not mention how many
perpetrators had conspired against the HDMF; that the parts of Delfin Lee and his
supposed cohorts in the supposed fraudulent acts committed against the HDMF had not
been particularly identified; that the conversion of the recommendation from the filing of
simple estafa to syndicated estafa had not been clearly explained in the Review
Resolution; that the RTC had simply adopted such findings without justifying how the
charge could be for syndicated instead of simple estafa; and that the RTC had also issued
the resolution a day immediately after the six boxes of documentary evidence had come
to its knowledge as the trial court.

The CA debunked the HDMF's argument that Delfin Lee had defrauded it into releasing a
considerable sum of money to Globe Asiatique through a complex scheme involving
fraudulent buyers. The CA noted that the Deed of Assignment with Contract to Sell and
Special Power of Attorney executed between Globe Asiatique and the HDMF showed
that the HDMF had been ultimately duty-bound to check the applications of prospective
borrowers and to approve the same; that, consequently, whatever damage the HDMF had
incurred could not be solely ascribed to Delfin Lee; that in fact the DOJ had also
endorsed the Review Resolution to the Ombudsman for the investigation of the HDMF
officers for violation of Republic Act No. 3019; and that it was confusing that Delfin Lee
had been charged separately of another crime instead of being joined with the officers of
the HDMF who had been referred to the Ombudsman for investigation.

On November 16, 2016, the CA promulgated its decision on Dexter's petition (C.A.-G.R.
No. 127554), declaring that the Pampanga RTC had erred in its determination of probable
cause against him;[54] that the Pampanga RTC had gravely abused its discretion when it
based its assessment solely on the Review Resolution of the panel of prosecutors, the
information, and the six boxes of documents presented as evidence by the Prosecution
without making its independent assessment of the documents and other pieces of
evidence to validate the issuance of the arrest warrant issued against Dexter.

The CA disposed thusly:

ACCORDINGLY, on the foregoing reasons, the petition is PARTIALLY GRANTED.
The assailed Resolutions dated May 22, 2012 and August 22, 2012 of Branch 42 of
Regional Trial Court of Pampanga City (sic) are ANULLED and SET ASIDE. Thus, the
Warrant of Arrest issued against petitioner Dexter L. Lee is hereby QUASHED,
RECALLED and LIFTED. Furthermore, the Regional Trial Court, Branch 42 of San
Fernando, Pampanga is directed to CEASE and DESIST from further proceeding with
Criminal Case No. 18480 insofar as petitioner Dexter L. Lee is concerned.

Moreover, all government agencies tasked in the enforcement of the Warrant of Arrest
including but not limited to the Philippine National Police, the National Bureau of
Investigation and the Bureau of Immigration are immediately ENJOINED from
implementing the said Warrant.

SO ORDERED.[55]
5.
C.A.-G.R. SP No. 134573
(Salagan Petition assailing the May 22, 2012 and January 29, 2014 resolutions of the
Pampanga RTC)

Salagan claimed in C.A.-G.R. SP No. 134573 that there was no probable cause to charge
her with the crime of syndicated estafa in view of the decisions promulgated in C.A.-G.R.
SP No. 121346, C.A.-G.R. SP No. 127553, and C.A.-G.R. SP No. 127690 finding that no
probable cause existed against Sagun, Delfin Lee and Atty. Alvarez, respectively, for
syndicated estafa.

The CA declared in C.A.-G.R. SP No. 134573, however, that the respondent Judge did
not gravely abuse her discretion in finding probable cause against Salagan, and upheld
the validity of the information filed in the Pampanga RTC against her; and that the
warrant of arrest had been issued upon probable cause personally determined by the
judge.[56] It ruled that the respondent Judge had properly denied Salagan's second motion
to quash the information with prayer to re-determine probable cause based on a
supervening event considering that Salagan had erroneously assumed that the separate
decisions promulgated by the CA were supervening events that justified the re-
determination of probable cause.[57]

The CA disposed on March 18, 2016 in C.A.-G.R. SP No. 134573:

WHEREFORE, in view of the foregoing, the Petition for Certiorari is DISMISSED.
Accordingly, the Resolution dated May 22, 2012 and Resolution dated January 29, 2014
of the San Fernando, Pampanga RTC, Branch 42 are hereby AFFIRMED insofar as
Accused Cristina Salagan is concerned.

SO ORDERED.[58]
Issues

We simplify the legal issues as follows:

(1) Whether or not the HDMF availed itself of the proper remedy to assail the summary
judgment rendered by the Makati RTC (G.R. No. 209424);
(2) Whether or not there was probable cause for the filing of the information for
syndicated estafa, and for the issuance of the warrants of arrest against the respondents for
that crime (G.R. Nos. 205698, 205780, 209446, 209489, 209852, 210143, 228452,
228730 and 230680); and
(3) Whether or not the conduct of a preliminary investigation could be enjoined (G.R. Nos.
208744 and 210095).

On various dates, the Court issued TROs[59] to enjoin the implementation and
enforcement of the assailed CA decisions and resolutions issued in C.A.-G.R. SP No.
121346, C.A.-G.R. SP No. 127553, C.A.-G.R. SP No. 127554, and C.A.-G.R. SP No.
127690. Inasmuch as the warrants of arrest remained valid nonetheless, Delfin Lee was
arrested by virtue thereof,[60] and was detained in the Pampanga Provincial Jail since his
arrest until this time.[61] The other respondents have remained at large.

Ruling of the Court

We PARTIALLY GRANT the petitions in G.R. No. 205698, G.R. No. 205780, G.R.
No. 209446, G.R. No. 209489, G.R. No. 209852, G.R. No. 210143, G.R. No. 228452,
G.R. No. 228730 and G.R. No. 230680, and, accordingly, MODIFY the assailed
decisions of the CA.

On the other hand, we GRANT the petitions in G.R. No. 209424, G.R. No.
208744, and G.R. No. 210095, and, accordingly, REVERSE the resolutions of the CA
assailed therein.

1.
The January 30,2012 summary judgment was an interlocutory judgment; hence, the
HDMF correctly instituted a petition for certiorari instead of an appeal

The HDMF argues that it correctly instituted the special civil action for certiorari to
assail the resolutions of the Makati RTC dated January 30, 2012 and December 11, 2012
issued in Civil Case No. 10-1120; that the Yorac Law Firm had lawful authority to
represent the HDMF; and that the Makati RTC rendered the questioned resolutions with
grave abuse of discretion amounting to lack or excess of jurisdiction.

The HDMF's arguments are partly meritorious.

1.a.
The January 30, 2012 summary judgment was an interlocutory order

In Civil Case No. 10-1120, Globe Asiatique and Delfin Lee specifically averred separate
causes of action against the HDMF, including that for damages. Thus, they prayed for the
following reliefs, to wit:
PRAYER

WHEREFORE, it is respectfully prayed that after due proceedings, a decision be

rendered by the Honorable Court in favor of the plaintiffs and against the defendants,
ordering the following:

1. With respect to the First Cause of Action, for defendant PAG-IBIG to accept the
replacement of the buyer/borrowers as offered by plaintiff GARHC contained in a
list hereto attached as Annex "O" pursuant to the latter's exercise of this option
under Section 3.7 of the latest Funding Commitment Agreement in relation to the
buyback provision under the Memorandum of Agreement dated 13 July 2009;
 2. With respect to the Second Cause of Action, for defendant PAG-IBIG FUND to
release the pending loan take-outs and amount of retention due plaintiff GARHC
pursuant to the MOA and latest FCA and for all defendants to jointly and
solidarily pay plaintiff GARHC the sum of Php6,562,500.00, representing interest
and penalty payments;

3. With respect to the Third Cause of Action, for defendant PAG-IBIG FUND to
honor the provisions of its MOA the latest FCA and CSA, to set aside the
cancellation of the FCA and CSA, and restore plaintiff GARHC to its rights under
the MOA, latest FCA and CSA;

4. With respect to the Fourth Cause of Action, for defendants to jointly and severally
pay plaintiff GARHC the sum of Php1 Million as and by way of attorney's fees,
Php500,000.00 as and by way of litigation expenses, and cost of suit; and

5. With respect to the Fifth Cause of Action, for defendants to pay exemplary
damages in the amount of Php500,000.00.

Plaintiffs pray for such other reliefs and remedies that the Honorable Court may deem
just and equitable in the premises.[62]
During the proceedings, Globe Asiatique and Delfin Lee filed the motion for summary
judgment, stating the reliefs prayed for, as follows:
PRAYER

WHEREFORE, it is respectfully prayed that after due notice and hearing, an Order be
issued granting the instant Motion for Summary Judgment and simultaneously therewith,
to render the Summary Judgment prayed for, declaring and ordering the following:

1. That plaintiffs have proven their case by preponderance of evidence and, therefore,
are entitled to specific performance and right to damages as prayed for in the
Complaint;

2. That defendants HDMF should faithfully and religiously comply with the pertinent
provisions of the FCAs and CSAs as amended by the MOA under the prevailing
conditions prior to the precipitate unilateral termination thereof by defendant
HDMF, including but not limited to the release of loan take-out proceeds of those
accounts whose DOAs with SPAs have already been annotated in the
corresponding TCTs as well as the evaluation and approval of the loan
applications of those who underwent or will undergo plaintiff GARCH's loan
counselling and arc qualified for PAG-IBIG loans under the MOA and FCAs;

3. That defendant HDMF's unilateral termination of the MOA, FCAs and CSA be
declared illegal and be set aside;
 4. That defendants be ordered to automatically off-set the balance of those listed in
Annex "E" hereof composed of fully-paid buyer-borrowers against the retention
money, escrow money, funding commitment fees, loan take-out proceeds and
other receivables of plaintiff GARHC which are still in the control and possession
of defendant HDMF;

5. That defendants be ordered to accept the replacement-buyers listed in Annex "F"

hereof, without interest or penalty from the time of defendant HDMF's refusal to
accept the same up to the time that these replacement buyers are actually accepted
by defendant HDMF;

6. That defendants be ordered to release the corresponding Transfer Certificate of

Title(s) (TCTs) of those accounts which are fully paid or subjected to automatic
off-setting starting from the. list in Annex "e" of the Motion for Summary
Judgment and thereafter from those listed in Annex "F" thereof and cause the
corresponding cancellation of the annotations in the titles thereof, including that of
complaint-intervenor Tessie G. Wang's titles;

Plaintiffs pray for such other reliefs and remedies that the Honorable Court may deem
just and equitable in the premises.[63]
Globe Asiatique and Delfin Lee did not include the claim for damages among the reliefs
prayed for by their motion for summary judgment.

Granting the motion for summary judgment, the Makati RTC ultimately disposed:
WHEREFORE, premises considered, a Summary Judgment is hereby rendered
declaring that:

1. Plaintiffs have proven their case by preponderance of evidence. As such, they are
entitled to specific performance and right to damages as prayed for in the
Complaint, except that the exact amount of damages will have to be
determined during trial proper.

xxxx

Let this case be set for the presentation of evidence on the exact amount of damages
that plaintiffs are entitled on March 12, 2012 at 8:30 in the morning.

SO ORDERED.[64] (Bold underscoring supplied)

As the foregoing shows, the Makati RTC set the case for the presentation of evidence to
establish the other claims of Globe Asiatique and Delfin Lee stated in their complaint for
specific performance, specifically those pertaining to the fourth and fifth causes of action.
The claims related to damages, which, being still essential parts of the case, would still
have to be established and adjudicated on their merits. Although the recovery of the
damages was dependent on the determination that the HDMF had breached its contract
with Globe Asiatique, it could not yet be said that the Makati RTC had fully disposed of
the case through the summary judgment considering that there were still other reliefs
sought by Globe Asiatique and Delfin Lee yet to be tried and determined either way.
Under the circumstances, the summary judgment was, properly speaking, but
an interlocutory judgment of the Makati RTC.

In this connection, the rule on separate judgments - Section 5, Rule 36 of the Rules of

Court - is relevant. The rule requires the action to proceed as to the remaining but
unresolved claims, to wit:
SEC. 5. Separate judgments. - When more than one claim for relief is presented in an
action, the court, at any stage, upon a determination of the issues material to a particular
claim and all counterclaims arising out of the transaction or occurrence which is the
subject matter of the claim, may render a separate judgment disposing of such claim. The
judgment shall terminate the action with respect to the claim so disposed of and the
action shall proceed as to the remaining claims. In case a separate judgment is
rendered, the court by order may stay its enforcement until the rendition of a subsequent
judgment or judgments and may prescribe such conditions as may be necessary to secure
the benefit thereof to the party in whose favor the judgment is rendered. (Bold
underscoring supplied for emphasis)
A partial summary judgment like that rendered on January 30, 2012 by the Makati RTC
was in the category of a separate judgment. Such judgment did not adjudicate damages,
and still directed that further proceedings be had in order to determine the damages to
which Globe Asiatique and Delfin Lee could be entitled. Section 4, Rule 35 of the Rules
of Court thus came into operation. Section 4 states:
SEC. 4. Case not fully adjudicated on motion. - If on motion under this Rule, judgment
is not rendered upon the whole case or for all the reliefs sought and a trial is
necessary the court at the hearing of the motion, by examining the pleadings and the
evidence before it and by interrogating counsel shall ascertain what material facts exist
without substantial controversy and what are actually and in good faith controverted. It
shall thereupon make an order specifying the facts that appear without substantial
controversy, including the extent to which the amount of damages or other relief is not in
controversy, and directing such further proceedings in the action as are just. The facts so
specified shall be deemed established, and the trial shall be conducted on the controverted
facts accordingly. (Bold underscoring supplied for emphasis)
Worthy to emphasize is that the rendition of a summary judgment does not always result
in the full adjudication of all the issues raised in a case.[65] In such event, a partial
summary judgment is rendered in the context of Section 4, supra. Clearly, such a partial
summary judgment - because it does not put an end to the action at law by declaring that
the plaintiff either has or has not entitled himself to recover the remedy he sues for -
cannot be considered a final judgment. It remains to be an interlocutory judgment or
order, instead of a final judgment, and is not to be dealt with and resolved separately from
the other aspects of the case.
In Pahila-Garrido v. Tortogo,[66] the distinctions between final and interlocutory orders
were delineated thusly:
The distinction between a final order and an interlocutory order is well known. The first
disposes of the subject matter in its entirety or terminates a particular proceeding or
action, leaving nothing more to be done except to enforce by execution what the court has
determined, but the latter does not completely dispose of the case but leaves something
else to be decided upon. An interlocutory order deals with preliminary matters and the
trial on the merits is yet to be held and the judgment rendered. The test to ascertain
whether or not an order or a judgment is interlocutory or final is: does the order or
judgment leave something to be done in the trial court with respect to the merits of the
case? If it does, the order or judgment is interlocutory; otherwise, it is final.
What was the proper recourse against the partial summary judgment?

Considering that the January 30, 2012 partial summary judgment was interlocutory, the
remedy could not be an appeal, for only a final judgment or order could be appealed.
Section 1, Rule 41 of the Rules of Court makes this clear enough by expressly forbidding
an appeal from being taken from such interlocutory judgment or order, to wit:
Section 1. Subject of appeal. - An appeal may be taken from a judgment or final order
that completely disposes of the case, or of a particular matter therein when declared by
these Rules to be appealable.

No appeal may be taken from:

xxxx

(f) A judgment or final order for or against one or more of several parties or in
separate claims, counterclaims, cross-claims and third party complaints, while the
main case is pending, unless the court allows an appeal therefrom; and

xxxx

In any of the foregoing circumstances, the aggrieved party may file an appropriate
special civil action as provided in Rule 65.
Consequently, the interlocutory January 30, 2012 summary judgment could be assailed
only through certiorari under Rule 65 of the Rules of Court. Thus, the HDMF properly
instituted the special civil action for certiorari to assail and set aside the resolutions dated
January 30, 2012 and December 11, 2012 of the Makati RTC.

1.b.
The Yorac Law Firm had no authority to file the HDMF's motion for
reconsideration of the January 30, 2012 summary judgment rendered by the Makati
RTC
The HDMF is a government-owned and -controlled corporation (GOCC) performing
proprietary functions with original charter or created by special law, specifically
Presidential Decree (P.D.) No. 1752, amending P.D. No. 1530.[67] As a GOCC, the
HDMF's legal matters are to be handled by the Office of the Government Corporate
Counsel (OGCC),[68] save for some extraordinary or exceptional circumstances when it is
allowed to engage the services of private counsels, provided such engagement is with the
written conformity of the Solicitor General or the Government Corporate Counsel and the
written concurrence of the Commission on Audit (COA).[69]

In Phividec Industrial Authority v. Capitol Steel Corporation,[70] the Court underscored

that the best evidence to prove the COA's concurrence with the engagement of a private
lawyer or law firm was the written concurrence from the COA itself, viz.:
Petitioners primarily rely on a certified true copy of an Indorsement issued by COA
Regional Office No. 10 as proof of written concurrence on the part of the COA. All that it
contains is a second-hand claim that the COA General Counsel had allegedly concurred
in the retainer contract between PHIVIDEC and Atty. Adaza. The written concurrence
itself which may be the best evidence of the alleged concurrence was not presented. It is
also worth noting that the said Indorsement was dated 4 June 2002, or approximately two
years after the filing of the expropriation case by Atty. Adaza.
The records reveal that although the OGCC authorized the HDMF to engage the services
of the Yorac Law Firm, the HDMF did not sufficiently prove that the written concurrence
of the COA had been obtained.

To substantiate its claim of the COA's concurrence with the engagement of the Yorac
Law Firm's legal services, the HDMF presented the certification dated January 10, 2013,
[71]
 viz.:
CERTIFICATION

This is to certify that the Commission on Audit (COA) has concurred in the Retainer
Agreement entered into by and between the Home Development Mutual Fund (HDMF)
and Yorac, Arroyo, Chua, Caedo & Coronel Law Firm, for the latter to provide legal
services to the HDMF in connection with the cases filed by or against Globe Asiatique
Realty Holdings Corporation, Mr. Delfin S. Lee, its officers, employees and agents, and
such other cases that arose out of or in relation to the Globe Asiatique Realty Holdings
Corporation issues.

This certification is issued to attest to the truth of the foregoing and for whatever legal
purposes it may serve.

10 January 2013
 (signed)
ATTY. FIDELA M. TAN
Corporate Auditor
It is immediately discernible, however, that the certification was merely the attestation by
Atty. Tan that COA had concurred in the retainer agreement entered into by and between
the HDMF and the Yorac Law Firm. Such attestation did not establish the written
concurrence of the COA on the engagement of the Yorac Law Firm because it did not
state that the copy was a correct copy of the original considering that no copy of COA's
written concurrence was actually attached to the January 10, 2013 certification. Also, it
did not thereby appear that Atty. Tan was the custodian of the records of COA. As the
Makati RTC further observed, the attestation had not been made under the official seal of
COA but printed only on the joint letterhead of the HDMF and COA, with the latter's
address being indicated to be in Mandaluyong City when the COA's office was actually
located in Commonwealth Avenue, Quezon City.[72]

Atty. Tan's attestation of the COA's purported concurrence had no evidentiary value due
to its non-conformity with the requirements of Section 24 and Section 25, Rule 132 of
the Rules of Court for presenting the record of a public document, to wit:
Section 24. Proof of official record. - The record of public documents referred to in
paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the officer having the legal custody of
the record, or by his deputy, and accompanied, if the record is not kept in the Philippines,
with a certificate that such officer has the custody. x x x
Section 25. What attestation of copy must state. - Whenever a copy of a document or
record is attested for the purpose of evidence, the attestation must state, in substance, that
the copy is a correct copy of the original, or a specific part thereof, as the case may be.
The attestation must be under the official seal of the attesting officer, if there be any, or if
he be the clerk of a court having a seal, under the seal of such court.(26a)

The foregoing bolstered the fact that the attestation, being at best the second-hand
opinion of Atty. Tan as a corporate auditor who did not have the copy of the supposed
COA concurrence, could not stand as the written concurrence of the COA contemplated
by law for the purpose.

Nonetheless, even if the January 10, 2013 certification was to be regarded as the written
concurrence of the COA, the fact that it was issued and presented after the Yorac Law
Firm had entered its appearance on June 17, 2011 as counsel of the HDMF should not go
unnoticed.[73] Records reveal that as of December 7, 2011, the COA was still in the
process of evaluating the request for the concurrence on the hiring by the HDMF of the
Yorac Law Firm.[74] This forthwith contravened the specific requirement that the written
conformity and acquiescence of the Solicitor General or the Government Corporate
Counsel, and the written concurrence of the COA should first be secured prior to the
hiring or employment of the private lawyer or law firm.[75]
In view of the HDMF's failure to secure the written concurrence of the COA, the Yorac
Law Firm could not have been considered as authorized to represent the HDMF. With the
filing of the HDMF's motion for reconsideration vis-a-vis the January 30, 2012 summary
judgment of the Makati RTC being unauthorized, the CA did not err in upholding the
Makati RTC's treatment of the HDMF's motion as a mere scrap of paper.

1.c
The broader interest of justice and the peculiar legal and equitable circumstances
herein justified the relaxation of technical rules

The import of failing to file the motion for reconsideration on the part of the HDMF
meant that the 60-day period to initiate the petition for certiorari should be reckoned
from its receipt of the assailed January 30, 2012 summary judgment. Since the HDMF
actually filed the petition for certiorari on January 18, 2013, and thus went beyond the
reglementary period, the petition should be dismissed for being filed out of time.

There are instances, however, when the rigidity of the rule requiring the petition
for certiorari to be filed within 60 days from the receipt of the judgment, order, or
resolution sought to be thereby assailed has been relaxed, such as: (1) when the most
persuasive and weighty reasons obtain; (2) when it is necessary to do so in order to
relieve a litigant from an injustice not commensurate with his failure to comply with the
prescribed procedure; (3) in case of the good faith of the defaulting party by immediately
paying within a reasonable time of the default; (4) when special or compelling
circumstances exist; (5) when the merits of the case so demand; (6) when the cause of the
delay was not entirely attributable to the fault or negligence of the party favored by the
suspension of the rules; (7) when there is no showing that the review sought is merely
frivolous and dilatory; (8) when the other party will not be unjustly prejudiced thereby;
(9) m case of fraud, accident, mistake or excusable negligence without the appellant's
fault; (10) when the peculiar legal and equitable circumstances attendant to each case so
require; (11) when substantial justice and fair play are thereby served; (12) when the
importance of the issues involved call for the relaxation; (13) in the exercise of sound
discretion by the court guided by all the attendant circumstances and (14) when the
exceptional nature of the case and strong public interest so demand.[76]

Herein, the broader interest of justice and the attendant peculiar legal and equitable
circumstances dictated that the HDMF's petition for certiorari be resolved on its merits
despite its filing beyond the reglementary period. The HDMF believed in good faith that
it had duly filed the motion for reconsideration vis-a-vis the January 30, 2012 summary
judgment. Although the Makati RTC noted the HDMF's failure to secure the COA's
concurrence, and resolved to treat the HDMF's motion for reconsideration as a mere scrap
of paper, the reglementary period to file the petition for certiorari had already lapsed,
such failure to file on time was not entirely attributable to the fault or negligence of the
HDMF.

2.
There was no probable cause for the filing of the information for
syndicated estafa and for the issuance of the warrants of arrest for
syndicated estafa against respondents

Delfin Lee, Dexter, Sagun and Alvarez were charged with syndicated estafa, along with
Cristina Salagan, on the basis of the findings of the DOJ that Globe Asiatique had
violated its warranties under the FCAs and the July 13, 2009 MOA; that Globe Asiatique
had submitted spurious and questionable documents concen1ing the qualifications of its
buyers; that Globe Asiatique had employed fictitious buyers to obtain funds from the
HDMF; and that Globe Asiatique had failed to remit to the HDMF the monthly housing
loan amortizations of its buyers in the Xevera Project in Pampanga.[77]

The DOJ concluded thusly:

Given the foregoing the above-named respondents may be charged with the crime of
"syndicated estafa" as they fall within the legal definition of a syndicate. A syndicate is
defined as consisting of five or more persons formed with the intention of carrying out
the unlawful or illegal act, transaction, enterprise or scheme and the defraudation results
in the misappropriation of money contributed by stockholders, or members of rural
banks, cooperative, "samahang nayon(s)", or farmers association, or of funds solicited by
corporations/associations from the general public. (Paragraph 1, Section 1, P.D. No.
1689; People of the Philippines v. Vicente Menil, G.R. Nos. 115054-66, September 12,
2009).

xxxx

Having earlier established respondents' commission of estafa, it is pristine clear that the
1st and 2nd elements of the offense of syndicated estafa has already been satisfied in the
instant case. Relative to the 3rd element, we believe that HDMF falls under the entities
listed in P.D. 1689 that can be victimized under such law, as the provision specifically
includes entities which solicited funds from the general public. x x x

It is our considered view that HDMF is, in all respect, a corporation that solicited funds
from the general public, which respondents defrauded through the execution of their
illegal scheme. We find as childish respondents' Delfin and Dexter Lee's argument that
the Pag-Ibig fund is a mandatory contribution and does not fall under the term "solicited
funds from the public." It bears to highlight that P.D. 1689 does not distinguish whether
the solicited fund is a voluntary or mandatory contribution. Rather, the essential point is
that the funds used by HDMF came from the general public.[78]
On its part, the Pampanga RTC found probable cause for the issuance of warrants of
arrest against the respondents only because -
The records would show a huge amount of money that was transferred from the coffers of
the PAG-IBIG FUND and released to the GLOBE ASIATIQUE through a complex
scheme involving fraudulent buyers at a scale and over a period of time that could only
have been accomplished by and through the sustained supervision and action in concert
of a group of persons for the attainment of the same criminal objective. Hence, the Court
finds probable cause for the existence of a syndicated estafa.[79]
The crucial questions before us relate to: (1) the DOJ's finding of probable cause for the
filing of the information against Sagun; and (2) the Pampanga RTC's judicial
determination of probable cause for the issuance of the warrant of arrest against the
respondents.

The concept of probable cause has been discussed in Napoles v. De Lima[80] as follows:
x x x During preliminary investigation, the prosecutor determines the existence of
probable cause for filing an information in court or dismissing the criminal complaint. As
worded in the Rules of Court, the prosecutor determines during preliminary investigation
whether "there is sufficient ground to engender a well-founded belief that a crime has
been committed and the respondent is probably guilty thereof, and should be held for
trial." At this stage, the determination of probable cause is an executive function. Absent
grave abuse of discretion, this determination cannot be interfered with by the courts. This
is consistent with the doctrine of separation of powers.

On the other hand, if done to issue an arrest warrant, the determination of probable cause
is a judicial function. No less than the Constitution commands that "no . . . warrant of
arrest shall issue except upon probable cause to be determined personally by the judge
after examination under oath or affirmation of the complainant and the witnesses he may
produce[.]" This requirement of personal evaluation by the judge is reaffirmed in Rule
112, Section 5 (a) of the Rules on Criminal Procedure:
SEC. 5. When warrant of arrest may issue. -
(a) By the Regional Trial Court. - Within ten (10) days from the filing of the complaint or
information, the judge shall personally evaluate the resolution of the prosecutor and its
supporting evidence. He may immediately dismiss the case if the evidence on record
clearly fails to establish probable cause. If he finds probable cause, he shall issue a
warrant of arrest, or a commitment order when the complaint or information was filed
pursuant to section 6 of this Rule. In case of doubt on the existence of probable cause, the
judge may order the prosecutor to present additional evidence within five (5) days from
notice and the issue must be resolved by the court within thirty (30) days from the filing
of the complaint or information. (Emphasis supplied)
Therefore, the determination of probable cause for filing an information in court and that
for issuance of an arrest warrant are different. Once the information is filed in court, the
trial court acquires jurisdiction and "any disposition of the case as to its dismissal or the
conviction or acquittal of the accused rests in the sound discretion of the Court."
While the courts are generally not permitted to substitute their own judgments for that of
the Executive Branch in the discharge of its function of determining the existence of
probable cause during the preliminary investigation,[81] the intervention of the courts may
be permitted should there be grave abuse of discretion in determining the existence of
probable cause on the part of the investigating prosecutor or the Secretary of Justice.

Thus, in order to settle whether or not the CA correctly reversed the August 10,
2011 Review Resolution of the DOJ insofar as it found probable cause to charge Sagun
with syndicated estafa, and whether or not the warrants of arrest issued against the
respondents should be quashed, it is imperative to discuss the nature of syndicated estafa.

Section 1 of P.D. No. 1689 defines syndicated estafa in the following manner:

SECTION 1. Any person or persons who shall commit estafa or other forms of swindling
as defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be
punished by life imprisonment to death if the swindling (estafa) is committed by a
syndicate consisting of five or more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in
the misappropriation of money contributed by stockholders or members of rural banks,
cooperative, "samahang nayon(s)", or farmer's association, or of funds solicited by
corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall
be reclusion temporal to reclusion perpetua if the amount of the fraud exceeds 100,000
pesos.
P.D. No. 1689 seeks to impose a harsher penalty on certain forms of swindling, more
particularly, syndicated estafa. The preamble of the decree recites:
WHEREAS, there is an upsurge in the commission of swindling and other forms of
frauds in rural banks, cooperatives, "samahang nayon(s)", and farmers' associations or
corporations/associations operating on funds solicited from the general public;

WHEREAS, such defraudation or misappropriation of funds contributed by stockholders

or members of such rural banks, cooperatives, "samahang nayon(s)", or farmers'
associations, or of funds solicited by corporations/associations from the general public,
erodes the confidence of the public in the banking and cooperative system, contravenes
the public interest, and constitutes economic sabotage that threatens the stability of the
nation;

WHEREAS, it is imperative that the resurgence of said crimes be checked, or at least

minimized, by imposing capital punishment on certain forms of swindling and other
frauds involving rural banks, cooperatives, "samahang nayon(s)", farmers' associations or
corporations/associations operating on funds solicited from the general public.
P.D. No. 1689 condemns the taking by fraud or deceit of funds contributed by members
of rural banks, cooperatives, samahang nayon or farmers' associations, or of funds
solicited by corporations or associations from the general public as such taking poses a
serious threat to the general public. The elements of syndicated estafa are: (a) estafa or
other forms of swindling, as defined in Articles 315 and 316 of the Revised Penal Code,
is committed; (b) the estafa or swindling is committed by a syndicate of five or more
persons; and (c) defraudation results in the misappropriation of moneys contributed by
the stockholders, or members of rural banks, cooperative, samahang nayon(s), or farmers'
associations, or of funds solicited by corporations/associations from the general public. [82]

In relation thereto, Article 315(2)(a) of the Revised Penal Code specifies that:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any means
mentioned herein below shall be punished by:

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

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

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

xxxx
The elements of estafa by means of deceit under Article 315(2)(a) of the Revised Penal
Code are, namely: (a) that there must be a false pretense or fraudulent representation as to
his power, influence, qualifications, property, credit, agency, business or imaginary
transactions; (b) that such false pretense or fraudulent representation was made or
executed prior to or simultaneously with the commission of the fraud; (c) that the
offended party relied on the false pretense, fraudulent act, or fraudulent means and was
induced to part with his money or property; and (d) that as a result thereof, the offended
party suffered damage.[83]

Based on the foregoing elements of syndicated estafa, the Court holds that the CA did not
err in reversing the August 10, 2011 Review Resolution of the DOJ insofar as Sagun was
concerned and in quashing the warrants of arrest issued against the respondents. In the
same manner, we find and so hold that the CA erred in upholding the propriety of the
issuance of the warrant of arrest against Salagan.

2.a
In the case of the respondents, there was no syndicate as defined under P.D. No.
1689

A syndicate is defined by P.D. No. 1689 as consisting of five or more persons formed
with the intention of carrying out the unlawful or illegal act, transaction, enterprise
or scheme.[84] The Court has clarified in Remo v. Devanadera[85] that in order for any
group to be considered a syndicate under P.D. No. 1689 -
x x x [T]he perpetrators of an estafa must not only be comprised of at least five
individuals but must have also used the association that they formed or managed to
defraud its own stockholders, members or depositors. Thus:
On review of the cases applying the law, we note that the swindling syndicate used the
association that they manage to defraud the general public of funds contributed to
the association. Indeed, Section 1 of Presidential Decree No. 1689 speaks of a syndicate
formed with the intention of carrying out the unlawful scheme for the misappropriation of
the money contributed by the members of the association. In other words, only those
who formed [or] manage associations that receive contributions from the general
public who misappropriated the contributions can commit syndicated estafa. x x x.
(Emphasis supplied).

xxxx
Dissecting the pronouncement in Galvez for our present purposes, however, we are able
to come up with the following standards by which a group of purported swindlers may be
considered as a syndicate under PO No. 1689:

1. They must be at least five (5) in number;

2. They must have formed or managed a rural bank, cooperative, "samahang nayon,"
farmer's association or any other corporation or association that solicits funds from
the general public.

3. They formed or managed such association with the intention of carrying out an
unlawful or illegal act, transaction, enterprise or scheme i.e., they used the very
association that they formed or managed as the means to defraud its own
stockholders, members and depositors.

None of the three abovementioned standards for determining the existence of a syndicate
was present.

Delfin Lee, Dexter, Sagun, and Salagan were, respectively, the President/Chief Operating
Officer, Executive. Vice-President, Head of the Documentation Department, and Head of
the Accounting/Finance Department of Globe Asiatique.[86] In view of their number being
under five, the original charge brought against them was only for simple estafa. It was
only in the assailed Review Resolution of August 10, 2011 that SDSP Villanueva
recommended the filing of the charge for syndicated estafa due to the addition of Atty.
Alvarez as a co-respondent, thereby increasing the number of the respondents to at
least five. But Atty. Alvarez was the Manager of the HDMF's Foreclosure
Department[87] whose only connection with Globe Asiatique was by reason of his having
rendered notarial services for the latter.[88] If Atty. Alvarez was not related to Globe
Asiatique either by employment or by ownership, he could not be considered as part of
the syndicate supposedly formed or managed to defraud its stockholders, members,
depositors or the public. This alone immediately removed the
respondents' supposed association from being found and considered as a syndicate in the
context of P.D. No. 1689.

Even assuming that Atty. Alvarez was juridically connected with Globe Asiatique in the
context of P.D. No. 1689, the association of the respondents did not solicit funds from the
general public. Globe Asiatique was incorporated in 1994 as a legitimate real-estate
developer "to acquire by purchase, lease, donation or otherwise, to own, use, improve,
develop, subdivide, sell, mortgage, exchange, lease, develop and hold for investment or
otherwise, real estate of all kinds, whether improve, manage, or otherwise dispose of
buildings, houses, apartments, and other structures of whatever kind, together with their
appurtenances."[89] It is quite notable, too, that there was no allegation about Globe
Asiatique having been incorporated to defraud its stockholders or members. In fact, the
HDMF, the only complainant in the estafa charges, was not itself a stockholder or
member of Globe Asiatique.

Moreover, the DOJ concluded that it was the HDMF itself, not Globe Asiatique, that had
solicited funds from the public, to wit:
x x x HDMF falls under the entities listed in PD 1689 that can be victimized under such
law, as the provisions specifically includes entities which solicited funds from the general
public. x x x

xxxx

It is our considered view that HDMF is, in all respect, a corporation that solicited
funds from the general public, which respondents defrauded through the execution
of their illegal scheme.

We find as childish respondents' Delfin and Dexter Lee's argument that the Pag-ibig
fund is a mandatory contribution and does not fall under the term "solicited funds
from the public." It bears to highlight that P.D. 1689 does not distinguish whether
the solicited fund is voluntary or mandatory contribution. Rather, the essential
point is that the funds used by HDMF came from the general public.[90]
The funds solicited by HDMF from the public were in the nature of their contributions as
members of HDMF and had nothing to do with their being a stockholder or member of
Globe Asiatique.

It is further worth noting that the funds supposedly misappropriated did not belong to
Globe Asiatique's stockholders or members, or to the general public, but to the HDMF.
The pecuniary damage pertained to the FCLs extended to Globe Asiatique through
ostensibly fictitious buyers and unremitted monthly housing loan amortizations for the
Xevera Project in Pampanga that were supposedly collected by Globe Asiatique in behalf
of the HDMF pursuant to the FCLs and MOA.

Based on the established circumstances, therefore, it becomes inevitable for the Court to
affirm the CA's following conclusion that:
x x x [T]he statement made by public respondent that there is probable cause because "x
x x a huge amount of money was transferred from the coffers of respondent HDMF and
released to GA through a complex scheme x x x that could only have been accomplished
by and through the sustained supervision and action in concert of a group of persons for
the attainment of the same criminal objective," to be in the nature of a speculation only
and carries no weight in the determination of probable cause. Jurisprudence dictates that
in the determination of probable cause, the same should be based on hard facts and solid
evidence and not dwell on possibilities, suspicion and speculation. From the afore quoted
paragraph alone, petitioner's (Delfin Lee) participation, if there was any, in the offense
for which he was indicted, was not established or ascertained. Worse, petitioner was not
even named either were his cohorts in the alleged defrauding of respondent HDMF.

Petitioner Lee and his co-accused were charged with syndicated estata. For estafa to have
been committed by a syndicate, the act must be committed by five or more persons. A
considered scrutiny of the assailed Resolution by public respondent which found
probable cause to issue a warrant of arrest against petitioner Lee and his co-accused,
shows that there was no mention that the acts constituting estafa were done by five or
more persons. The resolution merely mentioned "could only have been accomplished by
and through the sustained supervision and action in concert of a group of persons for the
attainment of the same criminal objective."  Moreover, the amount of damage incurred by
respondent HDMF was not ascertained. It goes without saying that public respondent did
not take it upon herself to determine, based on the evidence submitted, the exact amount
of damage incurred by respondent HDMF. Public respondent merely made a sweeping
statement that a huge amount of money was transferred from the coffers of the PAG-
IBIG Fund to GA.
Under the canons of statutory construction, indeed, the determination of the purpose of
the law is a step in the process of ascertaining the intent or meaning of the enactment,
because the reason for the enactment must necessarily shed considerable light on "the law
of the statute," i.e., the intent; hence, the enactment should be construed with reference to
its intended scope and purpose, and the courts should seek to carry out this purpose rather
than to defeat it.[91] Given the rationale and purpose behind the enactment of P.D. No.
1689, it becomes inevitable to conclude that the crime of syndicated estafa can only be
committed by the enumerated groups created for the sole purpose of defrauding its
members through misappropriating the funds solicited from and contributed by them.
Evidently, the evil sought to be prevented by P.D. No. 1689 does not exist in this case.
 2.b
Notwithstanding the absence of a syndicate, the respondents made false
representations that gave rise to probable cause for simple estafa against them

In Galvez v. Court of Appeals,[92] the Court has emphasized that swindling may fall within
the ambit of P.D. No. 1689 if it is committed through an association. On the other hand,
Article 315(2)(a) of the Revised Penal Code applies regardless of the number of the
accused when: (a) the entity soliciting funds from the general public is the victim and not
the means through which the estafa is committed, or (b) the offenders are not owners or
employees who used the association to perpetrate the crime.

Having shown that the alleged misappropriation was not committed through Globe
Asiatique, we now address whether or not the acts of the respondents gave rise to
probable cause for simple estafa under Article 315(2)(a) of the Revised Penal Code.

An examination of the records reveals that there is sufficient basis to support a reasonable
belief that the respondents were probably guilty of simple estafa. The first three elements
of estafa under Article 315(2)(a) of the Revised Penal Code - (a) that there must be a
false pretense or fraudulent representation as to his power, influence, qualifications,
property, credit, agency, business or imaginary transactions; (b) that such false pretense
or fraudulent representation was made or executed prior to or simultaneously with the
commission of the fraud; and (c) that the offended party relied on the false pretense,
fraudulent act, or fraudulent means and was induced to part with his money or property -
obtained in this case.

The nature and character of deceit or fraud were explained in Lateo v. People,[93] to wit:
[F]raud 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. And 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.
The first two elements of estafa under Article 315(2)(a) of the Revised Penal Code are
satisfied if the false pretense or fraudulent act is committed prior to or simultaneously
with the commission of the fraud, it being essential that such false statement or
representation constitutes the very cause or the only motive that induces the offended
party to part with his money.[94]
In this connection, the DOJ underscored in its assailed Review Resolution that the
fraudulent scheme employed by the respondents involved the "special buyers"
arrangement. According to the sinumpaang salaysay of witnesses Francisco de la Cruz
and Veniza Santos Panem, former employees of Globe Asiatique, the "special buyers"
arrangement required:
x x x those who are not yet members of Pag-ibig Fund but who are paid by GA to apply
for, and become members of the Fund in exchange of P5,000.00 so that their
names/membership can be used to take out a housing loan from Pag-ibig of units from
housing projects of GA. They assert that these special buyers have really no intention to
buy housing units from GA projects but merely lend their Pag-ibig Fund membership to
GA for a fee on condition that they will not apply for a loan with Pag-Ibig for a period of
two (2) years. The agents/employees of GA are the ones who recruit these "special
buyers" also for a commission. They explain that once recruited, these "special buyers"
are told to sign loan documents for Pag-Ibig but they will not occupy the housing units
for which they applied for a housing loan. These units taken out by Pag-ibig for GA's
"special buyers" are then sold to real buyers who buy direct from GA. Whenever real
buyers complaint that the units they bought had not yet been taken-out, they are made to
execute an Affidavit of Undertaking that they are willing to assume the balance on the
loan of the "special buyer" and GA will make it appear to Pag-Ibig that the "special
buyer" has changed his mind so that the property could then be transferred to the real
buyer. They further claim that there are more than "special buyers" than real buyers of
GA and that its owners, respondents Delfin and Dexter Lee, themselves ordered the
employees to recruit "special buyers".

Witness Panem also asserted in her Sinumpaang Salaysay that "special buyers" are also
employed by GA in its transactions with banks, like the RCBC and PNB. One of the
enticement for these "special buyers", aside from the P5,000.00 fee, is that they are
assured that they will not pay for the housing loan they applied for with Pag-Ibig as in
fact it is GA that pays for their housing loans. She also alleged that GA's employees
sometimes use fictitious names as "special buyers".[95]
Allegedly using the "special buyers" scheme, Globe Asiatique entered into the FCAs with
the HDMF during the period from August 12, 2008 to July 10, 2009 wherein Globe
Asiatique represented that: (a) the buyers of its real estate projects were members of Pag-
Ibig, hence, qualified to apply for the takeout loans under the Pag-Ibig Housing Loan
Program; (b) the members-borrowers and their respective housing loan applications had
been properly evaluated and approved in accordance with the applicable guidelines of the
Pag-Ibig Housing Loan Program prior to their endorsement to the Pag-Ibig Fund; (c) that
all documents submitted to the Pag-Ibig Fund, inclusive of the individual titles and the
corresponding Deeds of Assignment, were valid, binding, and enforceable in all other
respects that they purported to be; (d) that any person or agent employed or allowed to
transact or do business in its behalf had not committed any act of misrepresentation; and
(e) that all pertinent laws, rules and regulations had been complied with, among others.
[96]
 As the result thereof, the HDMF extended the FCLs in favor of Globe Asiatique
amounting to P2.9 billion.

On July 13, 2009, the MOA was forged between the HDMF and Globe Asiatique for the
latter to again avail of a loan takeout from the HDMF. Accordingly, additional FCAs
were extended to Globe Asiatique totaling P3.55 billion. While the MOA did not contain
the same representations made in the previous FCAs, it nevertheless required Globe
Asiatique to undertake the following corrective measures in case defects in the HDMF
membership and housing loan eligibilities of the buyers should arise, namely:
1) Require the borrower to complete the required number of contributions, in case the
required 24 monthly contributions is not met;

2) Require the borrower to update membership contributions, in case the membership

status is inactive;

3) Require the borrower to update any existing Multi-Purpose Loan (MPL) if its in
arrears or pay in full if the same has lapsed;

4) Buyback the account in case the member has a HDMF housing loan that is
outstanding, cancelled, bought back, foreclosed or subject of dacion-en-pago.[97]
Had Globe Asiatique, through the respondents, not made the foregoing representations
and undertaking, the HDMF would not have entered into the FCAs and granted the loan
takeouts to Globe Asiatique to its damage and prejudice.

We next determine the individual participation of the respondents in the "special buyers"
scheme.

In Ching v. Secretary of Justice,[98] the Court declared that corporate officers or

employees through whose act, default or omission the corporation commits a crime were
themselves individually guilty of the crime. The Court expounded why:
The principle applies whether or not the crime requires the consciousness of wrongdoing.
It applies to those corporate agents who themselves commit the crime and to those, who,
by virtue of their managerial positions or other similar relation to the corporation, could
be deemed responsible for its commission, if by virtue of their relationship to the
corporation, they had the power to prevent the act. Moreover, all parties active in
promoting a crime, whether agents or not, are principals. Whether such officers or
employees are benefited by their delictual acts is not a touchstone of their criminal
liability. Benefit is not an operative fact.
The DOJ aptly noted that the following acts of the respondents rendered them criminally
accountable for perpetrating the "special buyers" scheme and causing pecuniary damage
to the HDMF: Delfin Lee, for signing the FCAs and MOA in behalf of Globe Asiatique,
and the checks issued by Globe Asiatique to the "special buyers" and the HDMF;
[99]
 Dexter, for giving the orders to recruit "special buyers" and co-signing those checks
issued to the special buyers and HDMF;[100] Sagun, head of Globe Asiatiques's
Documentation Department, for collating the documents submitted by the
borrowers/buyers, checking if the same are complete and duly accomplished, and for
verifying whether or not said borrowers/buyers are indeed Pag-Ibig members with
updated contributions or existing housing loans[101] and Salagan, head of Globe
Asiatique's Accounting/Finance Department, for reviewing all requests for payment from
on-site projects and preparing the corresponding checks ensuring that all loan takeouts
are duly recorded, and that amortizations are timely remitted to HDMF.[102]

We agree that the concerted acts of the respondents could manifest a common criminal
design to make it appear that Globe Asiatique had numerous qualified borrowers/buyers
that would satisfy the HDMF's conditions for the loan takeouts. Their acts, taken
collectively, would probably support a charge of conspiracy, and suggest that they
participated in the transactions with a view to furthering the common design and purpose.
[103]

As for Atty. Alvarez, we do not subscribe to the CA's view that his act of notarizing
various documents, consisting of the individual buyer's affidavit of income, promissory
note and developer's affidavit, which were material for the processing and approval of the
transactions,[104] was insufficient to establish his having been part of the conspiracy in the
execution of the "special buyers" scheme. In our view, the DOJ had reasonable basis to
hold against him thusly:
x x x Atty. Alvarez knew, participated and consented to the illegal scheme perpetrated by
respondents Delfin and Dexter Lee, Christina Sagun and Cristina Salagan. It should be
underscored that Atty. Alvarez notarized crucial pieces of documents, consisting of the
buyer's affidavit of income, promissory note, and developer's affidavit (by Ms. Cristina
Sagun) alleging compliance with the conditions set by HDMF, all of which are essential
for the processing and approval of the purported transaction. We also find the defense of
Atty. Alvarez as self-serving, to say the least, considering that part of his job as a notary
public is to ascertain the identity of the affiant appearing before him. As it turns out, a
large number of the said affiants are either fictitious and/or non-existing, thereby
enabling the execution of the grand scheme of his co-respondents. It bears to note that his
actions, apart from evidencing his conspiracy, assent and/or cooperation in the
accomplishment of the fraud, also constitutes a clear violation of Section 7, Paragraph B
(2) of Republic Act No. 6713. also known as the Code of Conduct and Ethical Standards
for Public Officials and Employees.[105]
In view of the foregoing, the amendment of the information to charge simple estafa is
warranted pursuant to Hao v. People,[106] to wit:
With our conclusion that probable cause existed for the crime of simple estafa and that
the petitioners have probably committed it, it follows that the issuance of the warrants of
arrest against the petitioners remains to be valid and proper. To allow them to go scot-
free would defeat rather than promote the purpose of a warrant of arrest, which is to put
the accused in the court's custody to avoid his flight from the clutches of justice.
Moreover, we note that simple estafa and syndicated estafa are not two entirely different
crimes. Simple estafa is a crime necessarily included in syndicated estafa. An offense is
necessarily included in another offense when the essential ingredients of the former
constitute or form a part of those constituting the latter.

Under this legal situation, only a formal amendment of the filed information under
Section 14, Rule 110 of the Rules of Court is necessary; the warrants of arrest issued
against the petitioners should not be nullified since probable cause exists for
simple estafa.
3.
The conduct of the preliminary investigation by the DOJ was invalidly enjoined

In support of its move to reverse and set aside the adverse resolutions of the CA, the DOJ
argues in C.A.-G.R. No. 208744 and C.A.-G.R. No. 210095 that the CA should not have
dismissed its petition for certiorari for being allegedly filed out of time because there
existed special and compelling reasons to justify the relaxation of the procedural rules.
Worthy to note is that the CA had denied petitioner's motion for special extension of time
to file the petition for certiorari because there was no compelling reason to extend the
period for doing so.

Under Section 4,[107] Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC,

any aggrieved party has a non-extendible period of 60 days from receipt of the assailed
decision, order or resolution within which to file the petition for certiorari. The period is
non-extendible to avoid causing any unreasonable delay that would violate the
constitutional rights of parties to the speedy disposition of the case.[108] Regrettably, when
the DOJ finally filed the petition for certiorari during the extended period sought, the
petition lacked the proper docket number due to inadvertence, which prompted the CA to
assign a new docket number to the petition. This move on the part of the CA resulted in
the outright dismissal of the petition for having been filed beyond the reglementary
period.

In view of the obtaining circumstances, we find merit in the DOJ's argument.

In Vallejo v. Court of Appeals,[109] the Court allowed the petition filed almost four months
beyond the reglementary period to proceed. We emphasized therein that meritorious
cases should be allowed to proceed despite their inherent procedural defects and lapses in
keeping with the principle that the rules of procedure were but tools designed to facilitate
the attainment of justice, and that the strict and rigid application of rules that would allow
technicalities to frustrate rather than promote substantial justice must always be avoided.
The Court explained that excusing a technical lapse and affording the parties a review of
the case to attain the ends of justice, instead of disposing of the case on technicality and
thereby causing grave injustice to the parties, would be a far better and more prudent
course of action.
Time and again, the Court, in resolving the OSG's requests for extension, has taken
cognizance of the heavy workload of that office. It should not be any different now.
Worthy to note is that the OSG, representing the DOJ, offered suitable explanations and
apologies, like the associate solicitor in charge of filing the petition having been rushed to
the hospital and thus being denied the opportunity to supervise or see to the filing of the
intended petition. Also, the omission of the docket number from the petition that was
ultimately filed did not look as if it was aimed either to delay the proceedings or to
confuse the CA. The explanation for the delay in the filing of the petition in the CA
tendered by the OSG thereon, coupled with its invocation of liberality or the relaxation of
the rules, was fully acceptable. As such, the petition should be allowed to proceed. We
further find that the CA's dismissal of the petition was disproportionate to the
inadvertence committed considering the substantial merits of the DOJ's case. Verily, the
petition deserves to be given due course and resolved in view of the fact that the
injunction issued by the RTC against the DOJ on the conduct of the preliminary
investigation was a patent nullity on its very face.

We now go to the merits of the petitions in C.A.-G.R. No. 208744 and C.A.-G.R. No.

210095.

The Pasig RTC issued the assailed April 10, 2013 order enjoining the DOJ from
proceeding with the preliminary investigation of the second, third, and fourth complaints
for syndicated estafa against Globe Asiatique, et al. because of its impression that the
summary judgment rendered by the Makati RTC in favor of Globe Asiatique had
effectively removed the indispensable element of damage from the criminal complaints.
[110]
 The Pasig RTC undeniably gravely abused its discretion in issuing the writ of
preliminary injunction.

It is an established judicial policy that injunction cannot be used as a tool to thwart

criminal prosecutions because investigating the criminal acts and prosecuting their
perpetrators right away have always been in the interest of the public. Such policy is
intended to protect the public from criminal acts. The Pasig RTC could not feign
ignorance of such policy, especially considering that the CA's previous ruling against its
issuance of a writ of preliminary injunction had been affirmed by this Court with finality.
The CA also observed then:
[I]njunction will not lie to enjoin a criminal prosecution because public interest requires
that criminal acts be immediately investigated and protected (sic) for the protection of
society. It is only in extreme cases that injunction will lie to stop criminal prosecution.
Public respondent Judge anchored his issuance of the writ on the existence of a
prejudicial question. However, this Court finds that the facts and issues in the Makati
civil case are not determinative of Lee's guilt or innocence in the cases filed before the
DOJ. Verily public respondent Judge committed grave abuse of discretion amounting to
lack of or in excess of jurisdiction when he issued the writ of preliminary injunction
enjoining the DOJ from filing an information of estafa against Lee in the first DOJ case
and from proceeding with the preliminary investigation in the second DOJ case.[111]
We emphasize yet again that the conduct of a preliminary investigation, being executive
in nature, was vested in the DOJ. As such, the injunction issued by the Pasig RTC
inexcusably interfered with the DOJ's mandate under Section 3(2), Chapter 1, Title III,
Book IV of the Administrative Code of 1987 to investigate the commission of crimes and
to prosecute the offenders.

Equally worthy of emphasis is that the ruling of the CA in C.A.-G.R. SP No. 121594
attained finality after the Court reviewed such ruling in G.R. No. 201360. Considering
that the petitions against the DOJ arose from the same factual milieu and sought the same
relief, which was to restrain the DOJ from conducting preliminary investigations against
Globe Asiatique and its officers and employees upon the complaints filed before the DOJ,
and considering further that the cases involved the same parties and reprised the
arguments, the doctrine of the law of the case certainly applied to bar a different outcome.
At the very least, the Pasig RTC should have been very well instructed thereby, and
should have avoided the incongruous situation of ignoring what was already the clear law
of the case.

The doctrine of the law of the case precludes departure in a subsequent proceeding
essentially involving the same case from a rule previously made by an appellate court.
Applying this doctrine, the Court in Land Bank of the Philippines v. Suntay[112] held that:
We underscore that Land Bank v. Suntay (G.R. No. 157903) was the appropriate case for
the determination of the issue of the finality of the assailed RARAD Decision by virtue of
its originating from Land Bank's filing on April 20, 2001 of its petition for judicial
determination of just compensation against Suntay and RARAD Miñas in the RTC sitting
as a Special Agrarian Court. Therein, Suntay filed a motion to dismiss mainly on the
ground that the petition had been filed beyond the 15-day reglementary period as required
by Section 11, Rule XIII of the Rules of Procedure of DARAB. After the RTC granted the
motion to dismiss, Land Bank appealed to the CA, which sustained the dismissal. As a
result, Land Bank came to the Court (G.R. No. 157903), and the Court then defined the
decisive issue to be: "whether the RTC erred in dismissing the Land Bank's petition for
the determination of just compensation."

The Court ruled in favor of Land Bank. For both Land Bank and Suntay (including his
assignee Lubrica), the holding in Land Bank v. Suntay (G.R. No. 157903) became the law
of the case that now controlled the course of subsequent proceedings in the RTC as a
Special Agrarian Court. In Cucueco v. Court of Appeals, the Court defined law of the
case as "the opinion delivered on a former appeal." Law of the case is a term applied to an
established rule that when an appellate court passes on a question and remands the case to
the lower court for further proceedings, the question there settled becomes the law of the
case upon subsequent appeal. It means that whatever is once irrevocably established as
the controlling legal rule or decision between the same parties in the same case continues
to be the law of the case, whether correct on general principles or not, so long as the facts
on which such decision was predicated continue to be the facts of the case before the
court. With the pronouncement in G.R. No. 157903 having undeniably become the law of
the case between the parties, we cannot pass upon and rule again on the same legal issue
between the same parties.[113]
Indeed, the issue submitted for the Pasig RTC's determination had been resolved by the
CA in CA-G.R. SP No. 121594 to the effect that the Pasig RTC could not enjoin the DOJ
from proceeding with the preliminary investigation of the second complaint. As far as the
parties were concerned, therefore, the propriety of the DOJ's conduct of the preliminary
investigation was no longer an unresolved issue. But by issuing the writ of preliminary
injunction yet again to prevent the preliminary investigation of the second and subsequent
complaints by the DOJ, the Pasig RTC acted with manifest whimsicality that amounted to
gross and patent abuse of discretion. Such action was void and ineffectual.

WHEREFORE, the Court GRANTS:

(1) The petition for review on certiorari in G.R. No. 209424 and,
accordingly, ANNULS and SETS ASIDE the decision promulgated on October 7, 2013
by the Court of Appeals in C.A.-G.R. SP No. 128262; REVERSES the resolution of
December 11, 2012 issued in Civil Case No. 10-1120 by the Regional Trial Court,
Branch 58, in Makati City declaring the partial summary judgment rendered on January
30, 2012 final and executory; PRONOUNCES that the partial summary judgment
rendered on January 30, 2012 may still be appealed by the aggrieved party upon rendition
of the final judgment in Civil Case No. 10-1120; and DIRECTS the Regional Trial
Court, Branch 58, in Makati City to conduct further proceedings in Civil Case No. 10-
1120 with dispatch; and

(2) The petitions for review on certiorari in G.R. No. 208744 and G.R. No. 210095 and,

accordingly, REVERSES and SETS ASIDE the resolution promulgated on July 8, 2013
in C.A.-G.R. SP No. 130404 denying the motion for extension of the Department of
Justice, and the resolution promulgated on August 14, 2013 denying the motion to admit
petition for certiorari filed by the Department of Justice; LIFTS and QUASHES the writ
of preliminary injunction issued on April 10, 2013 by the Regional Trial Court, Branch
167, in Pasig City enjoining the preliminary investigation for the second, third and fourth
criminal complaints filed against the respondents on the ground that such writ of
preliminary injunction was issued with grave abuse of discretion amounting to lack of
jurisdiction; DECLARES that the Department of Justice may now resume the
preliminary investigation of the remaining criminal complaints against the respondents
for simple estafa under Article 315(2)(a) of the Revised Penal Code; and ORDERS the
Regional Trial Court, Branch 167, in Pasig City to dismiss Civil Case No. 73115
entitled Delfin S. Lee v. Department of Justice.

The Court PARTIALLY GRANTS the petitions for review on certiorari in G.R. No.

205698, G.R. No. 205780, G.R. No. 209446, G.R. No. 209489, G.R. No. 209852, G.R.
No. 210143, G.R. No. 228452, G.R. No. 228730 and G.R. No. 230680 and, accordingly:

(1) DIRECTS the DEPARTMENT OF JUSTICE to amend the information in

Criminal Case No. 18480 entitled People of the Philippines v. Delfin Lee, Dexter L. Lee,
Christina Sagun, Cristina Salagan, and Atty. Alex Alvarez of the Regional Trial Court
Branch 42, in San Fernando City, Pampanga to charge respondents DELFIN S. LEE,
DEXTER L. LEE, CHRISTINA SAGUN, CRISTINA SALAGAN and ALEX M.
ALVAREZ with simple estafa under Article 315(2)(a) of the Revised Penal Code; and

(2) ORDERS the Presiding Judge of the Regional Trial Court, Branch 42, in San
Fernando City, Pampanga to suspend proceedings in Criminal Case No. 18480 pending
the filing by the DEPARTMENT OF JUSTICE of the amended information as directed
herein, and to try the respondents as the accused in Criminal Case No. 18480 in
accordance therewith, without prejudice to acting on any matter incidental to the conduct
of the trial of a criminal case, including applications for bail.

No pronouncement on costs of suit.

SO ORDERED.

Carpio, Acting C. J., See Dissenting Opinion.

Velasco, Jr., J., concur.
Leonardo-De Castro, J., I join the dissent of Justice Carpio.
Peralta, J., No part.
Del Castillo, J., I join J. Bernabe's separate concurring opinion.
Perlas-Bernabe, J., Please see separate opinion.
Leonen, J., I dissent. See separate opinion.
Jardeleza,** J., No part. No part prior OSG.
Caguioa, J., See separate concurring opinion.
Martires, J., I join the dissenting opinion of J. Carpio.
Tijam, J., Please see separate concurring opinion.
A. Reyes, Jr., J., I join Justice Carpio's dissenting opinion.
Gesmundo, J., I join Justice Bernabe's separate concurring opinion.

NOTICE OF JUDGMENT

Sirs/Mesdames:

Please take notice that on July 31, 2018 a Decision, copy attached herewith, was rendered
by the Supreme Court in the above-entitled cases, the original of which was received by
this Office on August 28, 2018 at 2:30 p.m.

Very truly yours,

(SGD)
EDGAR O.
ARICHETA
  Clerk of Court

**
 No part, due to prior participation as Solicitor General.
[1]
 Rollo, G.R. No. 210143, pp. 4885A-4885B; it is to be noted that on June 7, 2017, the
Court issued a Resolution consolidating G.R. Nos. 228452 and 228730 with the other
related cases.
[2]
 In C.A.-G.R. SP No. 121346, C.A.-G.R. SP No. 127553, C.A.-G.R. SP No. 127554
and C.A.-G.R. SP No. 127690.
[3]
 In C.A.-G.R. SP No. 130409.
[4]
 In C.A.-G.R. SP No. 128262.
[5]
 Rollo (G.R. No. 205698), Vol. I, p. 26.
[6]
 Id. at 16.
[7]
 Id.
[8]
 Id. at 28.
[9]
 Rollo (G.R. No. 209852), Vol. I, p. 17.
[10]
 Rollo (G.R. No. 209424), Vol. II, pp. 598, 600.
[11]
 Id. at 601.
[12]
 Rollo (G.R. No. 205698), Vol. I, p. 30.
[13]
 Id. at 30-31.
[14]
 Id. at 31.
[15]
 Rollo (G.R. No. 209852), Vol. I, p. 18.
[16]
 Id. at 19.
[17]
 Docketed as I.S. No. XVI-INV-10J-00319 entitled National Bureau of Investigation
(NBI)/Home Development Mutual Fund (HDMF) vs. Globe Asiatique Realty Holdings
Corp., et al.
[18]
 Rollo (G.R. No. 209852), Vol. I, p. 20.
[19]
 The case was docketed as NPS No. XV-05-INV-10L-00363 entitled National Bureau
of investigation (NBI)/Evelyn B. Niebres, et al. vs. Globe Asiatique Realty Holdings,
Corp./Delfin S. Lee, et al.
[20]
 Rollo (G.R. No. 209852), Vol. I, p. 21.
[21]
 Id.
[22]
 Rollo (G.R. No. 209446), Vol. I, p. 165.
[23]
 Rollo (G.R. No. 209852), Vol. I, p. 21.
[24]
 Sagun later on impleaded the Pampanga RTC in view of the eventual filing of the
information against her in the RTC of Pampanga on April 30, 2012.
[25]
 Rollo (G.R. No. 209446), Vol. I, p. 15-16.
[26]
 On August 25, 2011, Delfin Lee filed an Amended Petition in the Pasig RTC to enjoin
the filing of the Information for the first syndicated estafa case based on the August 10,
2011 Review Resolution.
[27]
 Rollo (G.R. No. 209852), Vol. I, p. 22.
[28]
 Id.
[29]
 Id. at 23-24.
[30]
 Id. at 24.
[31]
 Rollo (G.R. No. 208744), Vol. I, p. 59
[32]
 Id. at 61-62.
[33]
 Rollo (G.R. No. 209852), Vol. I, p. 24.
[34]
 Id. at 24-27.
[35]
 Id. at 27-29.
[36]
 Id. at 28-29.
[37]
 Id. at 30.
[38]
 Id. at 30-31.
[39]
 Id. at 19.
[40]
 Id. at 20.
[41]
 Id. at 22-23.
[42]
 Rollo (G.R. No. 209424), Vol. I, p. 26.
[43]
 Id. at 64-65.
[44]
 Id. at 65-66.
[45]
 Rollo (G.R. No. 210095), Vol. I, pp. 75-76.
[46]
 Rollo (G.R. No. 209424), Vol. I, pp. 14-34; penned by Associate Justice Stephen C.
Cruz with the concurrence of Associate Justice Elihu A. Ybanez, and Associate Justice
Danton Q. Bueser, while Associate Justice Magdangal M. De Leon and Associate Justice
Myra V. Garcia Fernandez dissented.
[47]
 Id. at 32.
[48]
Rollo (G.R. No. 205698), Vol. I, pp. 24-57; penned by Associate Justice Angelita
Gacutan with the concurrence of Associate Justice Mariflor Punzalan Castillo and
Associate Justice Francisco P. Acosta.
[49]
 ld. at 56-57.
[50]
 Rollo (G.R. No. 209446), Vol. I, pp. 12-32; penned by Associate Justice Edwin D.
Sorongon with the concurrence of Associate Justice Hakim S. Abdulwahid and Associate
Justice Marlene Gonzales-Sison.
[51]
 Id. at 31-32.
[52]
 Rollo (G.R. No. 209852), Vol. I, pp. 15-43; penned by Associate Justice Franchito N.
Diamante and concurred in by Associate Justice Agnes Reyes-Carpio and Associate
Justice Melchor Q.C. Sadang.
[53]
 Id. at 42-43.
[54]
 Rollo (G.R. No. 228730), Vol. I, p. 108.
[55]
 Id. at 112-113.
[56]
 Rollo (G.R. No. 230680). Vol. I, p. 358.
[57]
 Id. at 362.
[58]
 Id. at 365.
[59]
 Rollo (G.R. No. 209446), Vol. VI, pp. 2484-2485, 2754-2755; Rollo (G.R. No.
210143), Vol. X, pp. 4756-4758; Rollo (G.R. No. 228452), Vol. V, pp. 2261.
[60]
 Rollo (G.R. No. 210143), Vol. X, p. 4932.
[61]
 Id. at 5217.
[62]
 Rollo (G.R. No. 209424), Vol. II, pp. 770-773.
[63]
 Rollo (G.R. No. 209424), Vol. III, pp. 1139-1141.
[64]
 Id. at 451-452.
[65]
 Philippine Business Bank v. Chua, G.R. No. 178899, November 15, 2010, 634 SCRA
635, 646-649.
[66]
 G.R. No. 156358, August 17, 2011, 655 SCRA 553.
[67]
 See Home Development Mutual Fund v. Commission on Audit, G.R. No. 142297, June
15, 2004, 432 SCRA 126, 132.
[68]
 Administrative Code of 1987, Book IV, Title III, Chapter 3, Section 10 provides:
SECTION 10. Office of the Government Corporate Counsel. - The Office of the
Government Corporate Counsel (OGCC) shall act as the principal law office of all
government-owned or controlled corporations, their subsidiaries. other corporate
offsprings and government acquired asset corporations and shall exercise control and
supervision over all legal departments or divisions maintained separately and such
powers and functions as are now or may hereafter be provided by law. In the exercise of
such control and supervision, the Government Corporate Counsel shall promulgate rules
and regulations to effectively implement the objectives of the Office.

xxxx
[69]
 See The Law Firm of Laguesma Magsalin Consulta and Gastardo v. Commission on
Audit, G.R. No. 185544, January 13, 2015, 745 SCRA 269, 286-289.
[70]
 G.R. No. 155692, October 23, 1003, 414 SCRA 327, 335.
[71]
 Rollo (G.R. No. 209424), Vol. III, p. 1493.
[72]
 Rollo (G.R. No. 209424), Vol. II, p. 455.
[73]
 Rollo (G.R. No. 209424), Vol. III, p. 1037.
[74]
 Id. at 1225.
[75]
 Oñate v. Commission on Audit, G.R. No. 213660, July 5, 2016, 795 SCRA 661, 666-
667.
[76]
 Republic v. St. Vincent De Paul Colleges, Inc., G.R. No. 192908, August 22, 2012,
678 SCRA 738, 747-750.
[77]
 Rollo (G.R. No. 209852). Vol. I, pp. 411-414.
[78]
 Id. at 420-421.
[79]
 Id. at 236.
[80]
 G.R. No. 213529, July 13, 2016, 797 SCRA 1, 16-18.
[81]
 Callo-Claridad v. Esteban, G.R. No. 191567, March 20, 2013, 694 SCRA 185, 197.
[82]
 People v. Tibayan, G.R. No. 209655-60, January 24, 2015, 746 SCRA 259, 269.
[83]
 Id. at 268.
[84]
 Catiis v. Court of Appeals, G.R. No. 153979, February 9, 2006, 482 SCRA 71, 81.
[85]
 G.R. No. 192925, December 9, 2016, 813 SCRA 610, 633.
[86]
 Rollo (G.R. No. 209852), Vol. I, p. 381.
[87]
 Id. at 402.
[88]
 Id. at 402.
[89]
 Rollo (G.R. No. 209424), Vol. II, p. 754.
[90]
 Rollo (G.R. No. 209852), Vol. I, pp. 420-421.
[91]
 De Castro v. Judicial and Bar Council (JBC), G.R. Nos. 191002, 191032, 191057,
191149, 191342, 191420 and A.M. No. 10-2-5-SC, March 17, 2010, 615 SCRA 666,
742-743.
[92]
 G.R. No. 187919, 187979, 188030, February 20, 2013, 691 SCRA 445, 469.
[93]
 G.R. No. 161651, June 8, 2011, 651 SCRA 262, 275, citing Alcantara v. Court of
Appeals, G.R. No. 147259, November 24, 2003, 416 SCRA 418, 430.
[94]
 Aricheta v. People, G.R. No. 172500, September 21, 2007, 533 SCRA 695, 704.
[95]
 Rollo (G.R. No. 209852), Vol. I, p. 393.
[96]
 Id. at 411-412.
[97]
 Rollo (G.R. No.209424), Vol. II, p. 599.
[98]
 G.R. No. 164317, February 6, 2006, 481 SCRA 609, 636-637.
[99]
 Rollo (G.R. No. 209852), Vol. I, p. 417.
[100]
 Id. at 418.
[101]
 Id.
[102]
 Id.
[103]
 See Zapanta v. People, G.R. Nos. 192698-99, April 22, 2015, 757 SCRA 172, 190-
191.
[104]
 Rollo (G.R. No. 209852), Vol. I, p. 419.
[105]
 Id. at 419-420.
[106]
 G.R. No. 183345, September 17, 2014, 735 SCRA 312, 329-330.
[107]
 Section 4. When and where to file the petition. - The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution. In case a motion
for reconsideration or new trial is timely filed, whether such motion is required or
not, the petition shall be filed not later than sixty (60) days counted from the notice
of the denial of the motion. (Emphasis ours)
[108]
 Manila Electric Company v. N.E. Magno Construction, Inc., G.R. No. 208181,
August 31, 2016, 802 SCRA 51, 59.
[109]
 G.R. No. 156413, April 14, 2004, 427 SCRA 658, 668.
[110]
 Rollo (G.R. No. 208744), Vol. I, p. 62.
[111]
 Rollo (G.R. No. 208744), Vol. II, p. 652.
[112]
 G.R. No. 188376, December 14, 2011, 662 SCRA 614.
[113]
 Id. at 643-644.

DISSENTING OPINION

CARPIO, J.:

This case involves the resolution of this issue: Is the taking of some P6.6 billion from the
PAG-IBIG Fund, through the use of over one thousand fictitious borrowers, applied for
by a private corporation through its corporate officers, simple estafa or syndicated estafa?
The PAG-IBIG Fund, administered by a government corporation, is sourced from
contributions by millions of public and private employees.

The majority holds that this mind-boggling taking of funds is a case of simple estafa. I
dissent for obviously this is a case of syndicated estafa.

Before this Court are consolidated petitions for review filed under Rule 45 of the Rules of
Court. The consolidated cases stemmed from the housing loan accounts taken out from
Home Development Mutual Fund (HDMF) by Globe Asiatique Realty Holdings
Corporation (Globe Asiatique) for its housing projects in Pampanga.

The Facts
In 2008, Globe Asiatique, represented by its president, Delfin S. Lee, negotiated with
HDMF for a Window-1 Contract to Sell/Real Estate Mortgage (CTS-REM) with
Buyback Guaranty take out mechanism for its Xevera Bacolor Project in Pampanga.
Pursuant thereto, Globe Asiatique entered into Funding Commitment Agreements (FCAs)
and Memoranda of Agreement (MOA) with HDMF.

On 10 September 2010, then HDMF Officer-in-Charge (OIC) Emma Faria (Faria) wrote
a letter to the Director of the National Bureau of Investigation (NBI), requesting
assistance in the investigation by HDMF on the housing loan accounts taken out by
Globe Asiatique for Xevera and Sameera projects in Pampanga. In her letter, Faria stated
that HDMF's own validation of Globe Asiatique's accounts revealed that hundreds of
them have been taken out by spurious borrowers while about a thousand more could not
be located.

The NBI conducted its own investigation. On 29 October 2010, the NBI forwarded to the
Department of Justice (DOJ) a letter recommending that a preliminary investigation be
conducted against Delfin S. Lee and others for the crime of syndicated estafa constituting
economic sabotage. The DOJ formed a panel of prosecutors to investigate the complaint
which was docketed as NPS Docket XVI-INV-lOJ-00319, entitled National Bureau of
Investigation (NBI)/Home Development Mutual Fund (HDMF) v. Globe Asiatique
Realty Holdings Corp., Delfin S. Lee, et al. (First Criminal Complaint).

On 15 November 2010, Globe Asiatique and Delfin S. Lee filed before the Makati RTC a
complaint for Specific Performance and Damages against HDMF, its Board of
Trustees and OIC Faria (Makati Civil Case). The Complaint was docketed as Civil
Case No. 10-1120, entitled Globe Asiatique Realty Corp., et al. v. The Home
Development Mutual Fund or PAG-IBIG Fund, et al. and raffled to Makati RTC
Branch 58. The complaint sought to compel HDMF to accept the replacements Globe
Asiatique had proposed to take the place of buyers/borrowers who have become
delinquents in their payments of their loan amortizations.

Meanwhile, on 10 December 2010, the NBI forwarded to the DOJ another letter
recommending the conduct of preliminary investigation against Delfin S. Lee and others
for syndicated estafa based on the complaints of HDMF and Globe Asiatique clients
Evelyn Niebres, Catherine Bacani, and Ronald San Nicolas. Acting on the NBI
recommendation, the DOJ formed a panel of prosecutors to handle the preliminary
investigation of the complaint, which was docketed as NPS Docket No. XVI-INV-10L-
00363, entitled National Bureau of Investigation/Evelyn B. Niebres, et al. v. Globe
Asiatique Realty Corp./Delfin S. Lee, et al. (Second Criminal Complaint). On 18
February 2011, the third criminal complaint for syndicated estafa was filed, docketed
as NPS Docket No. XVI-INV-11B-00063, entitled National Bureau of
Investigation/Jennifer Gloria, et al. v. Globe Asiatique Realty Corp./Delfin S. Lee, et
al. (Third Criminal Complaint). The fourth criminal complaint for syndicated estafa,
docketed as NPS Docket No. XVI-INV-11C-00138, entitled National Bureau of
Investigation/Maria Fatima Kayonas, et al. v. Globe Asiatique Realty Corp./Delfin S.
Lee, et al. (Fourth Criminal Complaint) was filed on 25 March 2011. Delfin S. Lee filed a
petition to suspend the proceedings, which the DOJ denied.

Without awaiting the outcome of the pending DOJ cases, Delfin S. Lee tiled a Petition
for Injunction dated 27 July 2011 before the Pasig RTC to enjoin the DOJ from
continuing with the preliminary investigation in the Second Criminal Complaint.
The case was docketed as Civil Case No. 73115-PSG and raffled to Branch 167 of the
Pasig RTC, presided by Judge Rolando Mislang (Judge Mislang). In his petition, Delfin
S. Lee argued that the Makati Civil Case poses a prejudicial question to the determination
of the Second Criminal Complaint, and thus prayed for the suspension of the proceedings
in the latter case.

In an Order dated 16 August 2011, Judge Mislang of the Pasig RTC granted Delfin S.
Lee's application for TRO, and enjoined the DOJ from continuing with the preliminary
investigation in the Second Criminal Complaint. In its Order dated 26 August 2011, the
Pasig RTC likewise granted Delfin S. Lee's application for TRO to enjoin the DOJ from
filing an Information for syndicated estafa in connection with the First Criminal
Complaint. Thereafter, in its Order dated 5 September 2011, the Pasig RTC issued a
Writ of Preliminary Injunction, restraining the DOJ from filing the Information in
the First Criminal Complaint and from proceeding with the preliminary
investigation in the Second Criminal Complaint.

In a petition docketed as CA-G.R. SP No. 121594, the DOJ assailed the Pasig RTC's
Order dated 5 September 2011. In its Decision dated 16 April 2012, the Court of Appeals
(CA) ruled that no prejudicial question exists and thus annulled the 5 September 2011
Order of the Pasig RTC. On appeal, this Court in its 4 July 2012 Resolution in G.R. No.
201360 affirmed the CA Decision, and thereafter denied Delfin S. Lee's Motion for
Reconsideration. The CA Decision in CA-G.R. SP No. 121594 dated 16 April 2012
became final and executory on 2 January 2013.

In September 2011, HDMF filed before the Pasig RTC a Motion to Inhibit and Leave to
File Motion in Intervention. The DOJ also filed a Motion to Inhibit. In its Order dated 27
January 2012, the Pasig RTC allowed HDMF to intervene but denied the motions to
inhibit.

In the meantime, the DOJ Task Force on Securities and Business Scam issued

a Review Resolution dated 10 August 2011, finding probable cause for
syndicated estafa (NPS Docket No. XVI-INV-10J-00319) against Delfin S. Lee, Dexter
L. Lee, Christina Sagun, Cristina Salagan, and Atty. Alex Alvarez.
On the Makati Civil Case, the Makati RTC issued a Resolution dated 30 January
2012, granting Delfin S. Lee's Motion for Summary Judgment, ruling that Globe
Asiatique was entitled to specific performance and damages, except that the exact
amount of damages will have to be determined during the trial proper. In its
Resolution dated 11 December 2012, the Makati RTC denied the Motion for
Reconsideration filed by HDMF President and Chief Executive Officer Atty.
Darlene Marie Berberabe (Atty. Berberabe) and Faria, and ruled that the Summary
Judgment declared in Civil Case No. 10-1120 is already final and executory against
HDMF. HDMF filed a Petition for Certiorari before the CA, docketed as CA-G.R. SP
No. 128262. In its Decision dated 7 October 2013, the CA dismissed HDMF's petition,
finding no grave abuse of discretion and ruling that HDMF availed of the wrong remedy
to assail the Makati RTC Resolutions and that there was no showing that the petition was
filed under the authority of the Office of the Government Corporate Counsel (OGCC).

In the meantime, Delfin S. Lee filed before the Pasig RTC a Supplemental Petition dated
11 June 2012, seeking to enjoin the DOJ from proceeding with the Third and Fourth
Criminal Complaints, citing the 30 January 2012 Resolution of the Makati RTC in the
Makati Civil Case. On 21 March 2013, the Pasig RTC issued a TRO against the DOJ,
enjoining the latter from proceeding with the preliminary investigation of the Second,
Third, and Fourth Criminal Complaints. Thereafter, in its Order dated 10 April 2013,
the Pasig RTC issued the Writ of Preliminary Injunction, enjoining the DOJ from
continuing with the preliminary investigation of the Second, Third, and Fourth
Criminal Complaints.

On 7 June 2013, the DOJ filed a Motion for Special Extension of Time to File Petition for
Certiorari before the CA (CA-G.R. SP No. 130404). Thereafter, the DOJ filed on 18 June
2013 the Petition for Certiorari, assailing the Pasig RTC Order dated 10 April 2013.
Unfortunately, the petition was inadvertently filed without a docket number, resulting in
the petition being given a new docket number (CA-G.R. SP No. 130409) and raffled to
another ponente and division.

On 8 July 2013, the CA issued a Resolution in CA-G.R. SP No. 130404, denying the
DOJ's Motion for Special Extension of Time to File Petition for Certiorari, stating
that the requested period has lapsed without the petition having been filed. DOJ filed
a Manifestation with Motion to Admit Petition for Certiorari dated 16 July 2013, which
sought reconsideration of the CA's Resolution dated 8 July 2013, and prayed for the
admission of the attached petition. In the Resolution dated 14 August 2013, the CA
denied the motion for being filed out of time.

As regards CA-G.R. SP No. 130409, the CA, in its 26 June 2013 Resolution,

dismissed the Petition for Certiorari filed by the DOJ on 18 June 2013 for being filed
out of time. The CA denied the DOJ's Motion for Reconsideration in the Resolution
dated 11 November 2013.
In the meantime, on 30 April 2012, the criminal information for syndicated estafa against
Delfin S. Lee, Dexter Lee, Atty. Alex Alvarez, Christina Sagun, and Cristina Salagan was
raffled to Pampanga RTC, Branch 42, presided by Judge Maria Amifaith S. Fider-Reyes.
The case was docketed as Criminal Case No. 18480 entitled "People of the Philippines v.
Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina Salagan and Atty. Alex Alvarez."

On 22 May 2012, the Pampanga RTC issued a Resolution, finding probable cause
for the crime of estafa (Article 315(2)(a) of the RPC, in relation to Section 1 of PD
1689, as amended) against Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina
Salagan, and Atty. Alex Alvarez, and issued a warrant of arrest against them with
no bail recommended.

In the Resolution dated 22 August 2012, the Pampanga RTC denied the: (1) Motion
to Recall/Quash Warrant of Arrest and/or Hold in Abeyance their Release to Law
Enforcement Agencies Pending the Resolution of the Motion filed by Delfin S. Lee
and Dexter L. Lee; and (2) Motion to Quash Warrant of Arrest filed by Cristina
Salagan.

On 29 January 2014, the Pampanga RTC issued a Resolution denying Christina

Salagan's Second Motion to Quash Information with Prayer to Re-Determine
Probable Cause Based on Supervening Event.

The Cases

The Court consolidated these cases which involve common questions of law and fact, and
the reliefs sought are intertwined.

G.R. No. 205698

(Home Development Mutual Fund (HDMF) PAG-IBIG Fund, v. Christina Sagun)

This petition for review on certiorari assails the 5 October 2012 Decision and the 11
February 2013 Resolution of the CA in CA-G.R. SP No. 121346. The dispositive portion
of the Decision reads:
WHEREFORE, premises considered, the Petition for Certiorari and Prohibition is hereby
PARTIALLY GRANTED. Consequently, the subject Review Resolution dated August
10, 2011 issued by respondent DOJ is SET ASIDE and DISMISSED as against petitioner
Christina Sagun.

SO ORDERED.[1]
The 10 August 2011 DOJ Review Resolution found probable cause against Delfin Lee,
Dexter L. Lee, Christina Sagun, Cristina Salagan, and Atty. Alex Alvarez for the crime of
syndicated estafa in the First Criminal Complaint and recommended the filing of the
corresponding information against them. The dispositive portion of the DOJ Review
Resolution reads:
WHEREFORE, premises considered, it is most respectfully recommended that this
resolution, finding probable cause against Delfin S. Lee, Dexter L. Lee, Christina Sagun,
Cristina Salagan and Atty. Alex Alvarez for the crime of syndicated estafa, as defined
and penalized under paragraph 2(a) of Article 315 of the Revised Penal Code, in relation
to Section 1 of Presidential Decree No. 1689, be APPROVED and that the corresponding
information against them be filed in court WITH NO BAIL RECOMMENDED. It is
likewise respectfully recommended that the complaint against Ramon P. Palma Gil,
Lerma Vitug, Tintin Fonclara, Geraldine Fonclara, Revelyn Reyes, Rod Macaspac,
Marvin Arevalo, Joan Borbon, Christian Cruz, Rodolfo Malabanan, Nannet Haguiling
and John Tungol, be DISMISSED for lack or insufficiency of evidence and that this
Resolution be referred to the Office of the Ombudsman so that the appropriate
investigation be conducted against the former and present officers of HDMF (Pag-Ibig
Fund).
Petitioner HDMF's Motion for Reconsideration was denied by the CA in its Resolution
dated 11 February 2013.

G.R. No. 205780

(Department of Justice, represented by Sec. Leila De Lima, State Prosecutor Theodore M
Villanueva and Prosecutor General Claro A. Arellano, and the National Bureau of
Investigation v. Christina Sagun)

This petition for review on certiorari filed by the DOJ and NBI likewise seeks to reverse
and set aside the 5 October 2012 Decision and the 11 February 2013 Resolution of the
CA in CA-G.R. SP No. 121346.

G.R. No. 208744

(Department of Justice v. Delfin S. Lee)

This petition for review on certiorari assails the CA Resolutions dated 8 July 2013[2] and
14 August 2013[3] in CA-G.R. SP No. 130404.

On 7 June 2013, the DOJ filed with the CA a Motion for Special Extension of Time to
File Petition for Certiorari, praying for an additional period of ten days from 9 June 2013,
or until 19 June 2013 to file the intended petition. On 18 June 2013, the DOJ filed the
petition, assailing the 10 April 2013 Order of the Pasig RTC (Branch 167) in Civil Case
No. 73115 which granted Delfin S. Lee's application for the issuance of a writ of
preliminary injunction. The assailed Order enjoined the DOJ from continuing with the
preliminary investigation of the Second, Third and Fourth Criminal Complaints, thus:
WHEREFORE, let a writ of preliminary injunction issue enjoining Department of Justice
and any other person or panel under its supervision from continuing with the preliminary
investigation of NPS Docket No. XVI-INV-10L-00363, the Second Criminal Complaint,
NPS Docket No. XVI-INV-11B-00063, the Third Criminal Complaint, and NPS Docket
No. XVI-INV-11C-00138, the Fourth Criminal Complaint.

Petitioner is directed to post a bond in the amount of Php2,000,000.00.[4]

Unfortunately, the petition filed on 18 June 2013 was without a docket number, which
resulted in the petition being given another docket number, namely CA-G.R. SP No.
130409 (instead of CA-G.R. SP No. 130404), and the same was raffled to
another ponente and division.

On 8 July 2013, the CA issued a Resolution in CA-G.R. SP No. 130404, denying the
DOJ's Motion for Extension of Time to File Petition for Certiorari, stating that the
requested period has lapsed without the petition having been filed. The DOJ filed a
Manifestation with Motion to Admit Petition for Certiorari dated 16 July 2013, which
sought reconsideration of the CA's Resolution dated 8 July 2013, and prayed for the
admission of the attached petition. In the Resolution dated 14 August 2013, the CA
denied the motion for being filed out of time. The CA did not consider the petition as
filed on 18 June 2013 since the inexcusable inadvertence of the DOJ in filing the petition
without a docket number resulted in the petition being considered as a freshly filed
petition and given the latest docket number, namely, CA-G.R. SP No. 130409.
Furthermore, the CA found no compelling reason to reconsider the 8 July 2013
Resolution denying the DOJ's Motion for Extension.

G.R. No. 209424

(Home Development Mutual Fund (HDMF) v. Globe Asiatique Realty Holdings
Corporation, Delfin S. Lee, in his capacity as the President of the Corporation, and
Tessie G. Wang)

This petition for review on certiorari assails the CA Decision dated 7 October 2013 in
CA-G.R. SP No. 128262,[5] which upheld the Resolutions dated 30 January 2012 and 11
December 2012 of the Makati RTC in Civil Case No. 10-1120.[6] The dispositive portion
of the CA Decision reads:
WHEREFORE, there being no grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of public respondent in rendering the assailed Resolution dated
January 30, 2012 containing the Summary Judgment and the Resolution dated December
11, 2012 denying the HDMF, Faria and Atty. Berberabe's Motion for Reconsideration,
the instant petition is hereby DISMISSED.

SO ORDERED.[7]
The Makati RTC Resolution dated 30 January 2012 granted the Motion for Summary
Judgment filed by Globe Asiatique and Delfin S. Lee.

HDMF and Faria filed a Motion for Reconsideration through private counsel, the Yorac
Arroyo Chua Caedo & Coronel Law Firm. However, the Makati RTC held that the
Motion for Reconsideration filed by the private counsel in behalf of HDMF is
unauthorized. Atty. Berberabe likewise filed a Motion for Reconsideration. In a
Resolution dated 11 December 2012, the Makati RTC denied the motions for
reconsiderations filed by Faria and Atty. Berberabe for lack of merit. The Makati RTC
further held that the 30 January 2012 Resolution containing the Summary Judgment has
become final, executory, and immutable as to HDMF.

G.R. No. 209446

(People of the Philippines v. Alex M. Alvarez)

This petition for review on certiorari assails the CA Decision dated 3 October 2013 in
CA-G.R. SP No. 127690, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, the Petition for Certiorari and the
Supplemental Petition are PARTIALLY GRANTED and the assailed Resolutions dated
May 22, 2012 and August 22, 2012 of the Regional Trial Court, Branch 42 of San
Fernando City, Pampanga in so far as petitioner ALEX M. ALVAREZ is concerned are
hereby annulled and set aside. Accordingly, the warrant of arrest issued against him is
hereby LIFTED, QUASHED/RECALLED.

Meantime, since the evidence do not support the finding of probable cause against
petitioner ALEX M. ALVAREZ, public respondent court is hereby enjoined from
proceeding with Criminal Case No. 18480 as against said petitioner only.

SO ORDERED.[8]
The 22 May 2012 Resolution of the Pampanga RTC found probable cause for the crime
of estafa (Article 315(2)(a) of the RPC, in relation to Section 1 of PD 1689, as amended)
against Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina Salagan, and Atty. Alex
Alvarez, and issued a warrant of arrest against them with no bail recommended.

In the Resolution dated 22 August 2012, the Pampanga RTC denied the: (1) Motion to
Recall/Quash Warrant of Arrest and/or Hold in Abeyance their Release to Law
Enforcement Agencies Pending the Resolution of the Motion filed by Delfin S. Lee and
Dexter L. Lee; and (2) Motion to Quash Warrant of Arrest filed by Cristina Salagan.

G.R. No. 209489

(Home Development Mutual Fund v. Atty. Alex M. Alvarez)

This petition for review on certiorari filed by HDMF likewise assails the CA Decision
dated 3 October 2013 in CA-G.R. SP No. 127690.

G.R. No. 209852

(Home Development Mutual Fund (HDMF) v. Delfin S. Lee)
This petition for review on certiorari assails the CA Decision dated 7 November 2013 in
CA-G.R. SP No. 127553,[9] which partially granted respondent Delfin S. Lee's Petition for
Certiorari assailing the Resolutions dated 22 May 2012 and 22 August 2012 of the
Pampanga RTC (Branch 42) in Criminal Case No. 18480.[10] The dispositive portion of
the CA Decision reads:
WHEREFORE, in view of the foregoing, the instant petition is hereby PARTIALLY
GRANTED. The assailed Resolutions dated May 22, 2012 and August 22, 2012 are
hereby ANNULLED and SET ASIDE for the issuance thereof was attended with grave
abuse of discretion on the part of public respondent Hon. Ma. Amifaith S. Fider-Reyes, in
her capacity as the Presiding Judge of the San Fernando, Pampanga RTC - Branch 42.
Consequently, the Warrant of Arrest issued against petitioner Delfin S. Lee is hereby
QUASHED, RECALLED AND LIFTED. Afore named public respondent judge is
directed to CEASE and DESIST from further proceeding with Criminal Case No. 18480
insofar as petitioner Delfin S. Lee is concerned.

Furthermore, all government agencies tasked in the enforcement of the said warrant of
arrest including but not limited to the Philippine National Police (PNP), the National
Bureau of Investigation (NBI) and the Bureau of Immigration (BI) are immediately
ENJOINED from implementing the same.

SO ORDERED.[11]
G.R. No. 210095
(Department of Justice v. Delfin S. Lee)

This petition for review on certiorari assails the CA Resolutions dated 26 June 2013 and
11 November 2013 in CA-G.R. SP No. 130409. The 26 June 2013 Resolution dismissed
the Petition for Certiorari filed by the DOJ on 18 June 2013 for being filed out of time.
The CA denied the DOJ's Motion for Reconsideration in the Resolution dated 11
November 2013.

The Petition for Certiorari was filed by the DOJ before the CA to nullify the Order dated
10 April 2013 of Judge Mislang of the Pasig RTC (Branch 167) in Civil Case No. 73115,
enjoining the DOJ from continuing with the preliminary investigation of the second,
third, and fourth criminal complaints against Delfin S. Lee.

G.R. No. 210143

(People of the Philippines v. Delfin S. Lee)

This petition for review on certiorari assails the CA Decision dated 7 November 20I3 in
CA-G.R. SP No. 127553,[12] which partially granted respondent Delfin S. Lee's Petition
for Certiorari, assailing the Resolutions dated 22 May 2012 and 22 August 2012 of the
Pampanga RTC (Branch 42) in Criminal Case No. I8480. This case is related to the case
entitled Home Development Mutual Fund (HDMF) v. Delfin S. Lee (G.R. No. 209852)
which likewise seeks to reverse and set aside the CA Decision dated 7 November 2013 in
CA-G.R. SP No. 127553.

G.R. No. 228452

(Home Development Mutual Fund (HDMF) v. Dexter L. Lee)

This petition for review on certiorari assails the CA Decision dated 16 November 2016 in
CA-G.R. SP No. 127554,[13] partially granting respondent Dexter L. Lee's Petition for
Certiorari assailing the Resolutions dated 22 May 2012 and 22 August 2012 of the
Pampanga RTC (Branch 42) in Criminal Case No. 18480.[14] The dispositive portion of
the CA Decision reads:
ACCORDINGLY, on the foregoing reasons, the petition is PARTIALLY GRANTED.
The assailed Resolutions dated May 22, 2012 and August 22, 2012 of Branch 42 of
Regional Trial Court of Pampanga City are ANNULLED and SET ASIDE. Thus, the
Warrant of Arrest issued against petitioner Dexter L. Lee is hereby QUASHED,
RECALLED and LIFTED. Furthermore, the Regional Trial Court, Branch 42 of San
Fernando Pampanga is directed to CEASE and DESIST from further proceeding with
Criminal Case No. 18480 insofar as petitioner Dexter L. Lee is concerned.

Moreover, all government agencies tasked in the enforcement of the Warrant of Arrest
including but not limited to the Philippine National Police, the National Bureau of
Investigation and the Bureau of Immigration are immediately ENJOINED from
implementing the said Warrant.

SO ORDERED.[15]
G.R. No. 228730
(People of the Philippines v. Dexter L. Lee)

This petition for review on certiorari likewise assails the CA Decision dated 16

November 2016 in CA-G.R. SP No. 127554, partially granting respondent Dexter L.
Lee's Petition for Certiorari assailing the Resolutions dated 22 May 2012 and 22 August
2012 of the Pampanga RTC (Branch 42) in Criminal Case No. 18480. This case is related
to the immediately preceding case entitled Home Development Mutual Fund (HDMF) v.
Dexter L. Lee (G.R. No. 228452) which also seeks to reverse and set aside the CA
Decision dated 16 November 2016 in CA-G.R. SP No. 127554.

G.R. No. 230680

(Cristina Salagan v. People of the Philippines and Home Development Mutual Fund
([HDMF])

This petition for review on certiorari assails the CA Decision dated 18 March 2016 in
CA-G.R. SP No. 134573, affirming the Resolutions dated 22 May 2012 and 29 January
2014 of the Pampanga RTC (Branch 42) in Criminal Case No. 18480 insofar as accused
Salagan is concerned. The dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the Petition for Certiorari is DISMISSED.
Accordingly, the Resolution dated May 22, 2012 and Resolution dated January 29, 2014
of the San Fernando, Pampanga RTC, Branch 42 are hereby AFFIRMED insofar as
Accused Cristina Salagan is concerned.

SO ORDERED.[16]
For clarity, the cases are discussed jointly in accordance with the resolutions or orders
being ultimately assailed, thus:

I. DOJ Review Resolution dated 10 August 2011

1. G.R. No. 205698 - Home Development Mutual Fund (HDMF) PAG-IBIG Fund v.

Christina Sagun
2. G.R. No. 205780 - Department of Justice, represented by Sec. Leila De Lima,
State Prosecutor Theodore M. Villanueva and Prosecutor General Claro A.
Arellano, and the National Bureau of Investigation v. Christina Sagun

II. Pampanga RTC Resolutions dated 22 May 2012, 22 August 2012, and 29 January
2014

1. G.R. No. 209446 - People of the Philippines v. Alex M. Alvarez

2. G.R. No. 209489 - Home Development Mutual Fund v. Atty. Alex M. Alvarez
3. G.R. No. 209852 - Home Development Mutual Fund (HDMF) v. Delfin S. Lee
4. G.R. No. 210143 - People of the Philippines v. Delfin S. Lee
5. G.R. No. 228452 - Home Development Mutual Fund (HDMF) v. Dexter L. Lee
6. G.R. No. 228730 - People of the Philippines v. Dexter L. Lee
7. G.R. No. 230680 - Cristina Salagan v. People of the Philippines and Home
Development Mutual Fund (HDMF)

III. Pasig RTC Order dated 10 April 2013

1. G.R. No. 208744 - Department of Justice v. Delfin S. Lee

2. G.R. No. 210095 - Department of Justice v. Delfin S. Lee

IV. Makati RTC Resolutions dated 30 January 2012 and 11 December 2012

1. G.R. No. 209424 - Home Development Mutual Fund (HDMF) v. Globe Asiatique

Realty Holdings Corporation, Delfin S. Lee, in his capacity as the President of the
corporation, and Tessie G. Wang

The Issues
 I. Whether the CA erred in setting aside the DOJ Review Resolution dated 10
August 2011 as against Christina Sagun; (G.R. Nos. 205698 and 205780)
II. A. Whether the CA erred in finding no probable cause for syndicated estafa and
for the issuance of arrest warrants against Delfin S. Lee, Dexter L. Lee, and Atty.
Alex M. Alvarez; (G.R. Nos. 209446, 209489, 209852, 210143, 228452, and
228730)
B. Whether the CA (CA-G.R. SP No. 134573) erred in upholding the validity of
the information for syndicated estafa as against Cristina Salagan and the issuance
of the warrant of arrest against her. (G.R. No. 230680)
III. A. Whether the CA erred in dismissing the Petition for Certiorari, assailing the
Pasig RTC Order in Civil Case No. 73115, for being filed out of time; and
B. Whether the Pasig RTC erred in enjoining the DOJ from continuing with the
preliminary investigation of the second, third and fourth criminal complaints;
(G.R. Nos. 208744 and 210095)
IV. A. Whether the CA erred in dismissing the Petition for Certiorari for being the
wrong remedy to assail the Summary Judgment; and
B. Whether the Makati RTC erred in issuing the Summary Judgment in Civil Case
No. 10-1120. (G.R. No. 209424)

I.

1. G.R. No. 205698 - Home Development Mutual Fund (HDMF) PAG-IBIG Fund v.

Christina Sagun    
2. G.R. No. 205780 - Department of Justice, represented by Sec. Leila De Lima,
State Prosecutor Theodore M Villanueva and Prosecutor General Claro A.
Arellano, and the National Bureau of Investigation v. Christina Sagun

G.R. Nos. 205698 and 205780 both question the propriety of the CA's ruling on Sagun's
petition. The petition before the CA questioned the Review Resolution, and not the
issuance of the Information and the trial court's subsequent finding of probable cause.
The issues before this Court in these two cases may be limited to the following: (1)
whether Christina Sagun followed proper procedure, and (2) whether the CA was correct
in proceeding to rule on the validity of the Information and of the issuance of the
warrants of arrest.

I rule for petitioners HDMF and DOJ on both issues. The ponencia did not address the
first issue. There was no mention of Sagun's direct resort to the CA after the release of the
Review Resolution. The ponencia immediately ruled on the second issue and concluded
that there was no probable cause for the filing of the Information for
syndicated estafa and for the issuance of warrants of arrest against respondents Delfin S.
Lee, Dexter Lee, Christina Sagun, Atty. Alex Alvarez, and Cristina Salagan.

Christina Sagun failed to exhaust administrative remedies

Aggrieved parties may appeal from resolutions of prosecutors by filing a verified petition
for review before the Secretary of Justice. The pertinent portions of the rule governing
appeals from resolutions of prosecutors in the National Prosecution Service, otherwise
known as the 2000 NPS Rule on Appeal,[17] provide:
SECTION 1. Scope. - This Rule shall apply to appeals from resolutions of the Chief State
Prosecutor, Regional State Prosecutors and Provincial/City Prosecutors in cases subject
of preliminary investigation/ reinvestigation.

SECTION 2. Where to appeal. An appeal may be brought to the Secretary of Justice

within the period and in the manner herein provided.

SECTION 3. Period to appeal. The appeal shall be taken within fifteen (15) days from
receipt of the resolution, or of the denial of the motion for reconsideration/reinvestigation
if one has been filed within fifteen (15) days from receipt of the assailed resolution. Only
one motion for reconsideration shall be allowed.

SECTION 4. How appeal taken. An aggrieved party may appeal by filing a verified
petition for review with the Office of the Secretary, Department of Justice, and by
furnishing copies thereof to the adverse party and the Prosecution Office issuing the
appealed resolution.
The exception to the general rule will apply only when there is a clear showing of grave
abuse of discretion by the public prosecutor amounting to lack or excess of jurisdiction.
Absent such showing, the courts do not have the power to substitute their judgment for
that of the Secretary of Justice.

In the DOJ's Review Resolution, Christina Sagun's defense is summarized as follows:

Respondent Christina Sagun, for her part, admits that she is the former head of the
Documentation Department of GA since 2007. She asserts that the evidence against her
in the above-entitled complaint is insufficient inasmuch as the complaint failed to
specifically indicate her participation in the alleged crime. She stresses that the
enumeration of her specific participation is an essential requirement of due process and is
necessary for her to effectively prepare her defense and respond to the charges made
against her. She believes that her inclusion in the instant case was in relation to the
alleged second buyers of a property who availed of the loan privileges under the
Window-1 - CTS-REM with buyback guaranty takeout mechanism granted by the HDMF
to GA, namely: Girlie Santos Espanillo, Lerma Cariaga Villaflores, Emily Pagdato
Bandillo, Jennifer Fernando and Marissa Quizon.

She also emphasizes that the function of the Documentation Department in relation to
Window- 1 - CTS-REM with buyback guaranty takeout mechanism of HDMF is
ministerial in nature such as receiving, collating and checking loan documents if they are
complete or not and verifying from Pag-IBIG if buyers/borrowers of GA are Pag-IBIG
members with updated contribution and if they are qualified for a housing loan. In short,
her office does not exercise discretion but merely perfunctory and strictly ministerial
power. She maintains that she had not participated in any transactions with private
complainants Evelyn Niebres, Catherine Bacani and Ronald San Nicolas. Neither had she
made any false statement nor representation to the HDMF.[18]
The DOJ Review Resolution also stated that Christina Sagun prepared the developer's
affidavits that Atty. Alex Alvarez notarized.[19]

The same DOJ Review Resolution set aside Christina Sagun's defense as follows:
By the same token, we hereby thrust aside the defenses raised by Christina Sagun x x x
since, as shown by the Records, they are in the nature of denial which is "an intrinsically
weak defense and which must be buttressed with strong evidence of non-culpability to
merit credibility." Besides, it was clearly established by the evidence that Christina
Sagun, being the head of the Documentation Department, is responsible for (a) collating
and checking if the documents submitted by the borrowers/buyers, through GA's
Marketing Department, are complete and duly accomplished, and (b) determine and
verify from Pag-IBIG, through the submission of Membership Status Verification,
whether or not said borrowers/buyers are indeed Pag-IBIG members, or with updated
contributions, or [have] no existing housing loans, and thus are qualified to apply for
housing loans. x x x. Verily, by the nature of their functions, Christina Sagun x x x
could have prevented the commission of the herein fraud if only they exercised their
functions diligently and in a prudent manner. But they failed and in fact they participated
in the fraudulent scheme. x x x.

In the words of the Court, the rationale for making such officers responsible for the
offense is that, they are vested with the authority and responsibility to devise means
necessary to ensure compliance with the law and, if they fail to do so, are held criminally
accountable; thus, they have a responsible share in the violations of the law. And this
principle applies "[W]hether [sic] or not the crime requires the consciousness of
wrongdoing. It applies to those corporate agents who themselves commit the crime and to
those, who, by virtue of their managerial positions or other similar relation to the
corporation, could be deemed responsible for its commission, if by virtue of their
relationship to the corporation, they had the power to prevent the act. Moreover, all
parties active in promoting a crime, whether agents or not, are principals. Whether such
officers or employees are benefited by their delictual acts is not a touchstone of their
criminal liability. Benefit is not an operative act."

xxxx

Record also shows that during the Board Meeting held on June 20, 2008 wherein the
piloting of the OWG membership program in GA's Xevera Project was discussed, then
CEO Atty. Romero Quimbo admitted the difficulty of monitoring the sources of income
of this group because many of them do not declare their actual earnings such that a credit
investigation will be conducted to verify the authenticity of their income. However,
during the actual implementation of the program, the conduct of such credit investigation
was delegated to GA. In fact, the Agreements subsequently entered into between HDMF
and GA have practically given the latter blanket authority in determining membership
and housing loan eligibility and capacity to pay of its buyers. It was also given the
authority to evaluate, pre-process and approve housing loan applications. The only
control mechanism put in place by HDMF being the post take-out audit or validation
within thirty (30) days after loan take-out. However, the Special Audit Report dated July
26, 2010 (Annex "Q" of the Complaint) clearly established that there was non-validation
or delayed post take-out on the part of HDMF San Fernando, Pampanga Branch, thus,
exposing the Fund to probable loss of some financial investments.[20]
The prerequisite for Sagun's resort to the CA is a clear showing of grave abuse of
discretion by the public prosecutors. Under the present circumstances, however, Sagun
failed to show that the investigating prosecutors abused their discretion, much less
gravely abused their discretion. Sagun, in contrast to her co-respondents in I.S. No.
XVIINV-10J-00319, immediately resorted to judicial review before the CA. Delfin S.
Lee, Dexter Lee, Cristina Salagan, and Atty. Alex Alvarez all filed appeals before the
Secretary of Justice. Unlike Sagun, and despite her protestations about the utterances pre-
judging the case made by the Secretary of Justice, that "time was of the essence," and that
there was "no plain, speedy and adequate remedy in the ordinary course of law," her co-
respondents saw that it was procedurally proper to have the Secretary of Justice re-
examine the Review Resolution.

Sagun employed the wrong remedy in assailing the investigating prosecutor's Review
Resolution, and Sagun never filed an appeal before the Secretary of Justice. Sagun was
never able to validly question the Review Resolution. Thus, both the findings and
conclusion in the Review Resolution, as well as the consequent filing of the Information
against stand. The CA erred in considering Sagun's petition and ruling in her favor.
Sagun's immediate filing of a petition before the CA is a procedural shortcut that merits a
dismissal.

The CA erred in proceeding to rule on the validity of the Information and of the
issuance of the warrant of arrest

The CA wrongfully asserted that when it reviews the DOJ's determination of probable
cause, it makes a judicial determination of probable cause which binds the trial court.

Petitioners have done right in relying on Alcaraz v. Gonzalez:[21]

It bears stressing that in the determination of probable cause during the preliminary
investigation, the executive branch of government has full discretionary authority. Thus,
the decision whether or not to dismiss the criminal complaint against the private
respondent is necessarily dependent on the sound discretion of the Investigating
Prosecutor and ultimately, that of the Secretary of Justice. Courts are not empowered to
substitute their own judgment for that of the executive branch.

The resolution of the Investigating Prosecutor is subject to appeal to the Justice Secretary
who, under the Revised Administrative Code, exercises the power of control and
supervision over said Investigating Prosecutor; and who may affirm, nullify, reverse, or
modify the ruling of such prosecutor. Thus, while the CA may review the resolution of
the Justice Secretary, it may do so only in a petition for certiorari under Rule 65 of the
Rules of Court, solely on the ground that the Secretary of Justice committed grave abuse
of his discretion amounting to excess or lack of jurisdiction.

It bears stressing that the Resolution of the Justice Secretary affirming, modifying or
reversing the resolution of the Investigating Prosecutor is final. Under the 1993 Revised
Rules on Appeals (now the 2000 National Prosecution Service Rules on Appeals),
resolutions in preliminary investigations or reinvestigations from the Justice Secretary's
resolution, except the aggrieved party, has no more remedy of appeal to file a motion for
reconsideration of the said resolution of such motion if it is denied by the said Secretary.
The remedy of the aggrieved party is to file a petition for certiorari under Rule 65 of the
Rules of Court since there is no more appeal or other remedy available in the ordinary
course of law.
Reyes v. Pearlbank Securities, Inc.[22] defines probable cause in the following manner,
and further explains why the courts generally do not review the findings made by the
Secretary of Justice:
Probable cause, for the purpose of filing a criminal information, has been defined as such
facts as are sufficient to engender a well-founded belief that a crime has been committed
and that respondent is probably guilty thereof. The term does not mean "actual and
positive cause" nor does it import absolute certainty. It is merely based on opinion and
reasonable belief. Probable cause does not require an inquiry into whether there is
sufficient evidence to procure a conviction. It is enough that it is believed that the act or
omission complained of constitutes the offense charged.

A finding of probable cause needs only to rest on evidence showing that more likely than
not a crime has been committed by the suspects. It need not be based on clear and
convincing evidence of guilt, not on evidence establishing guilt beyond reasonable doubt,
and definitely not on evidence establishing absolute certainty of guilt. In determining
probable cause, the average man weighs facts and circumstances without resorting to the
calibrations of the rules of evidence of which he has no technical knowledge. He relies on
common sense. What is determined is whether there is sufficient ground to engender a
well-founded belief that a crime has been committed, and that the accused is probably
guilty thereof and should be held for trial. It does not require an inquiry as to whether
there is sufficient evidence to secure a conviction.

These findings of probable cause fall within the jurisdiction of the prosecutor or fiscal in
the exercise of executive power, which the courts do not interfere with unless there is
grave abuse of discretion. The determination of its existence lies within the discretion of
the prosecuting officers after conducting a preliminary investigation upon complaint of
an offended party. Thus, the decision whether to dismiss a complaint or not is dependent
upon the sound discretion of the prosecuting fiscal. He may dismiss the complaint
forthwith, if he finds the charge insufficient in form or substance or without any ground.
Or he may proceed with the investigation if the complaint in his view is sufficient and in
proper form. To emphasize, the determination of probable cause for the filing of
information in court is an executive function, one that properly pertains at the first
instance to the public prosecutor and, ultimately, to the Secretary of Justice, who may
direct the filing of the corresponding information or move for the dismissal of the case.
Ultimately, whether or not a complaint will be dismissed is dependent on the sound
discretion of the Secretary of Justice. And unless made with grave abuse of discretion,
findings of the Secretary of Justice are not subject to review.

For this reason, the Court considers it sound judicial policy to refrain from interfering in
the conduct of preliminary investigations and to leave the Department of Justice ample
latitude of discretion in the determination of what constitutes sufficient evidence to
establish probable cause for the prosecution of supposed offenders. Consistent with this
policy, courts do not reverse the Secretary of Justice's findings and conclusions on the
matter of probable cause except in clear cases of grave abuse of discretion.
The reasons put forward by the CA to justify its substitution of the Pampanga RTC's
determination of probable cause do not amount to grave abuse of discretion. The
Pampanga RTC's determination of probable cause, although in accord with the findings
of the DOJ, did not necessarily rely on the DOJ's resolution alone. Hence, in the absence
of grave abuse of discretion, there is no reason to disturb the Pampanga RTC's
determination of probable cause.

II.

1. G.R. No. 209446 - People of the Philippines v. Alex M. Alvarez

2. G.R. No. 209489 - Home Development Mutual Fund v. Atty. Alex M. Alvarez
3. G.R. No. 209852 - Home Development Mutual Fund (HDMF) v. Delfin S. Lee
4. G.R. No. 210143 - People of the Philippines v. Delfin S. Lee
5. G.R. No. 228452 - Home Development Mutual Fund (HDMF) v. Dexter L. Lee
6. G.R. No. 228730 - People of the Philippines v. Dexter L. Lee
7. G.R. No. 230680 - Cristina Salagan v. People of the Philippines and Home
Development Mutual Fund (HDMF)

Delfin S. Lee and Dexter Lee failed to follow proper procedure

Delfin S. Lee and Dexter Lee's contumacious attitude to our rules of procedure is
demonstrated by the following:
(1) failing to file a motion for reconsideration of the 22 May 2012 resolution of the San
Fernando RTC prior to filing a petition for certiorari before the CA;
(2) filing a petition for certiorari before the CA without waiting for the decision of the
San Fernando RTC on his motions for reconsideration of the 22 August 2012 resolution;
(3) failing to file within the reglementary period a petition for certiorari to assail the 22
May 2012 resolution of the San Fernando RTC; and
(4) repeated instances of forum-shopping.
On 22 May 2012, the San Fernando RTC issued a Resolution which found probable
cause to issue warrants of arrest against Delfin S. Lee and Dexter Lee, among others. On
23 May 2012, Delfin S. Lee and Dexter Lee filed a "Motion to Recall/Quash Warrant of
Arrest and/or Hold in Abeyance their Release to Law Enforcement Agencies Pending
Resolution of this Motion." This Motion to Quash raised the following grounds: lack of
jurisdiction of the San Fernando RTC due to non-payment of filing fees; judicial
interference of the San Fernando RTC with the civil case filed before the Makati RTC;
and lack of probable cause for the crime of syndicated estafa.

Delfin S. Lee and Dexter Lee filed another Motion to Quash dated 3 June 2012. This
second Motion to Quash raised the following grounds: the facts charged in the
Information do not constitute an offense; there is no syndicated estafa because the facts
stated in the Information do not state conspiracy; and judicial interference of the San
Fernando RTC with the civil case filed before the Makati RTC.

The San Fernando RTC denied Delfin S. Lee and Dexter Lee's Motion in a Resolution
dated 22 August 2012. Delfin S. Lee and Dexter Lee filed two Motions for
Reconsideration of the 22 August 2012 Resolution: the first on 8 October 2012, and the
second on 13 October 2012. Delfin S. Lee and Dexter Lee then separately filed a special
civil action for certiorari before the CA (CA-G.R. SP No. 127553 for Delfin S. Lee and
CA-G.R. SP No. 127554 for Dexter Lee) without waiting for any resolution from the San
Fernando RTC. The CA, in its 7 November 2013 Decision in CA-G.R. SP No. 127553,
even stated this deviation from procedure:
On 26 November 2012, without waiting for the resolution of the above-mentioned
Motion, petitioner Lee filed a Petition for Certiorari (With Prayer for the Issuance of a
TRO and/or Writ of Preliminary Injunction) before this Court directed against the
Resolutions dated May 22, 2012 and August 22, 2012 issued by public respondent x x x.
As for Dexter Lee, the CA stated in its 16 November 2016 Decision:
Pending the resolution of the motion before the RTC of Pampanga, petitioner filed a
Petition for Certiorari with prayer of a TRO and/or Writ of Preliminary Injunction before
this Court assailing the May 22, 2012 and August 22, 2012 Resolutions of RTC
Pampanga.
It is hornbook doctrine that a motion for reconsideration must first be filed with the lower
court before resorting to the extraordinary writ of certiorari. A motion for
reconsideration gives the lower court an opportunity to correct the errors imputed to it.
Moreover, the special civil action for certiorari will not lie unless the aggrieved party has
no other plain, speedy and adequate remedy in the course of law. In the present case,
Delfin S. Lee arrogated to himself the determination of whether the filing of a motion for
reconsideration is necessary. However, Delfin S. Lee failed to show any compelling
reason for his non-filing of a motion for reconsideration and his immediate recourse to a
special civil action for certiorari before the CA.

Assuming arguendo that a petition for certiorari was an available remedy to Delfin S.

Lee, he was unable to file the petition within the reglementary period. Delfin S. Lee
received the 22 May 2012 Resolution on 23 May 2012. Pursuant to Section 4 of Rule 65,
he had 60 days, or until 22 July 2012, to file a petition. Delfin S. Lee, however, filed his
petition before the CA only on 26 November 2012, or 127 days after the lapse of the 60-
day deadline. No reason was given for the inordinate delay.

In similar manner, Dexter Lee received the 22 May 2012 Resolution on 23 May 2012.
Pursuant to Section 4 of Rule 65, he had 60 days, or until 22 July 2012, to file a petition.
Dexter Lee, however, filed his petition before the CA only on 23 November 2012, or 124
days after the lapse of the 60-day deadline. Dexter Lee also gave no reason for the
inordinate delay.

With their immediate, yet separate, resort to a special civil action for certiorari, Delfin S.
Lee and Dexter Lee have asked, successively and simultaneously, for judicial relief in
different courts, particularly the San Fernando RTC and the CA, with the same end in
mind: the dismissal of the syndicated estafa case filed against them.

Atty. Alex Alvarez engaged in forum-shopping

Among all respondents, it is Atty. Alex Alvarez who was most brazen in flouting our
rules against forum-shopping. Consider the following:
1. Atty. Alvarez filed a Petition for Review before the Secretary of Justice on 3 October
2011 to assail the DOJ's Review Resolution dated 10 August 2011.

2. While the Petition for Review before the Secretary of Justice was pending, Atty.
Alvarez filed a Petition (With Prayer for the Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction) before the Manila RTC.

3. Atty. Alvarez withdrew the Petition for Review before the Secretary of Justice only on
14 November 2011. The Secretary of Justice has yet to rule upon his withdrawal.

4. On 15 November 2011, Atty. Alvarez filed a petition before the CA docketed as CA-
G.R. SP No. 122076. He prayed that the DOJ cease and desist from filing the Information
in NPS Docket No. XVI-INV-10J-00319 and that he be excluded from the Information
that may be filed in the case.
5. On 23 April 2012, Atty. Alvarez filed a Notice of Withdrawal of Petition in CA-G.R.
SP No. 122076.

6. Still on 23 April 2012, Atty. Alvarez filed a Petition for Injunction and Prohibition
(With Application for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction) before the Caloocan City RTC.

7. Atty. Alvarez filed an undated second petition before the CA, docketed as CA-G.R. SP
No. 127690. He prayed that the Pampanga RTC cease from conducting further
proceedings and that the warrant of arrest issued against him be lifted and suspended.
Throughout his numerous filings, Atty. Alvarez has sought only one end: the dismissal of
the criminal case filed against him. Atty. Alvarez likewise submitted inaccurate
certifications on non-forum shopping in CA-G.R. SP No. 122076, CA-G.R. SP No.
127690, and before the Caloocan City RTC.

Forum-shopping is an act of a party against whom an adverse judgment or order has been
rendered in one forum of seeking and possibly getting a favorable opinion in another
forum, other than by appeal or special civil action for certiorari. It may also be the
institution of two or more actions or proceedings grounded on the same cause on the
supposition that one or the other court would make a favorable disposition. For it to exist,
there should be (a) identity of parties, or at least such parties as would represent the same
interest in both actions; (b) identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and (c) identity of the two preceding particulars such
that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration.[23] The acts of Delfin
S. Lee, Dexter Lee, and Atty. Alex Alvarez that were enumerated in the preceding
paragraphs satisfy all these conditions.

The CA exceeded its certiorari jurisdiction

The CA quashed, recalled, and lifted the warrants of arrest against Delfin S. Lee, Dexter
Lee, and Atty. Alex Alvarez. In doing so, the CA reviewed and weighed the evidence
submitted before the trial court and tried the facts presented before it. It would do well for
the CA to recall that its certiorari jurisdiction is limited to errors of jurisdiction and not
errors of judgment. As we stated in Leviste v. Alameda:[24]
In a petition for certiorari, like that filed by petitioner before the appellate court, the
jurisdiction of the court is narrow in scope. It is limited to resolving only errors of
jurisdiction. It is not to stray at will and resolve questions and issues beyond its
competence, such as an error of judgment. The court's duty in the pertinent case is
confined to determining whether the executive and judicial determination of probable
cause was done without or in excess of jurisdiction or with grave abuse of discretion.
Although it is possible that error may be committed in the discharge of lawful functions,
this does not render the act amenable to correction and annulment by the extraordinary
remedy of certiorari, absent any showing of grave abuse of discretion amounting to
excess of jurisdiction.
It is premature for the CA to rule on the merits of the case prior to the trial on the merits.

Atty. Alex Alvarez's indispensable participation in the crime of syndicated estafa

To emphasize the extent of Atty. Alvarez's participation m this scheme, we quote from
the transcript of the clarificatory questioning of Veniza Santos Panem, an employee of
Globe Asiatique:
Prosecutor x x x Kilala mo ba si Atty. Alvarez?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor Sino si Atty. Alvarez?
Lao
Veniza Santos Siya po ang nagnonotaryo ng mga dokumento sa Globe Asiatique.
Panem
Prosecutor San sya nag-o-opisina?
Lao
Veniza Santos Sa Globe Asiatique po.
Panem
Prosecutor Head office ba?
Lao
Veniza Santos Head office po.
Panem
Prosecutor So siya yung notary public.
Lao
Regular employee? Lagi mo ba syang nakikita don? Ano sa pagkakaalam mo?
Veniza Santos Lagi ko po syang nakikita doon.
Panem
Prosecutor So regular employee siya ng Globe Asiatique?
Lao
Veniza Santos Hindi ko po sure pero lagi ko siyang nakikita.
Panem
Prosecutor Doon mo siya nakikita sa Globe Asiatique.
Lao
Doon sya nag-o-opisina?
Veniza Santos Yes, your Honor.
Panem
Prosecutor Anong year?
Lao
Veniza Santos Hindi ko po sigurado yung year.
Panem
Prosecutor Sa loob ng employment mo sa Globe Asiatique, sinong nauna sa inyo doon bilang
Lao empleyado ng Globe Asiatique?
Veniza Santos Ako po.
Panem
Prosecutor Ikaw. So gaano katagal? Mga one year after? Two years after or bago pumasok si
Lao Atty. Alvarez?
Veniza Santos Hindi ko po sure kung 2007 or 2008 po siya.
Panem
Prosecutor Sabi mo siya yung notaryo?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor Saan siya nag-o-office?
Lao
Veniza Santos Sa amin po.
Panem
Prosecutor Doon sa inyo? May opisina siya doon?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor May sarili siyang kwarto doon?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor Lagi mo siyang makikita doon?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor 8:00 to 5:00? Whole day?
Lao
Veniza Santos Hindi naman po whole day.
Panem
Prosecutor Mga anong oras? Example Monday to Friday ... lagi ba siyang nandoon?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor So hindi siya pala-absent?
Lao
Veniza Santos Minsan naman po wala naman po siya.
Panem
Prosecutor Pero minsan lang, absent siya minsan, kasi nagnonotaryo siya ng mga documents.
Lao
Veniza Santos Meron po siyang secretary na nagno-notaryo.
Panem
Prosecutor Secretary niya nagno-notaryo?
Lao
Veniza Santos Opo.
Panem
Prosecutor Sino yung secretary nya?
Lao
Veniza Santos Si Imelda Saulo po.
Panem
Prosecutor Kapag wala si Atty. Alvarez, si Imelda ang nagno-notaryo?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor Attorney ba si Imelda?
Lao
Veniza Santos Hindi po.
Panem
Prosecutor Ano siya?
Lao
Veniza Santos Hindi ko po alam e.
Panem
Prosecutor Ano ang tawag sa opisina nila?
Lao
Veniza Santos Legal department po.
Panem
Prosecutor Sila sa Legal department sila ni Atty. Alvarez at Imelda Saulo.
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor Yung Legal department malapit sa office nyo?
Lao
Veniza Santos Magkatapat po yung room.
Panem
Prosecutor So kapag pumapasok si Atty. Alvarez, makikita mo?
Lao
Veniza Santos Yes, your Honor.
Panem
Prosecutor Araw-araw ba doon? Madalas mo ba siya [makita] doon?
Lao
Veniza Santos Yes, madalas po.
Panem
Prosecutor Example pumasok siya ngayong Monday, 8 to 5 nandun siya? Kapag pumapasok
Lao siya, usually nandun lang siya sa office?
Veniza Santos Yes, your Honor.
Panem
Prosecutor Nagtatagal ba siya doon?
Lao
Veniza Santos Hindi po. Mga halfday po.
Panem
Prosecutor Halfday. Ano usually morning or afternoon?
Lao
Veniza Santos Morning po.
Panem
Prosecutor So pag lunchtime umaalis na yan. Tapos babalik bukas na.
Lao
Veniza Santos Yes, your Honor.[25]
Panem
Furthermore, the NBI report dated 29 October 2010 stated that:
Upon initial investigation of the sampling of loan folders submitted by Mr. DELFIN LEE
for Globe Asiatique, it was discovered that majority of the fake and/or fraudulent loan
documents were notarized by ATTY. ALEX ALVAREZ, an employee of Pag-IBIG
assigned in its Legal Department and holding office in the HDMF head office. When
invited for questioning by the NBI, ATTY. ALVAREZ admitted that he receives a
monthly salary of P30,000 from Globe Asiatique in exchange for notarizing its
documents (regardless of [illegible]). [Illegible] the borrowers to personally appear before
him as the documents are brought to him for such notarization in batches. He claimed
during the interview that he is not required to secure special permission from the
President of Pag-IBIG to undertake limited practice of law (which includes notarizing
documents) because only those with Salary Grade 23 or lower are required to secure such
permission, and there is no specific provision governing someone like him with Salary
Grade 24.[26]
I cannot countenance Atty. Alvarez's actuations as that of a "mere" notary public. Atty.
Alvarez was the Manager of HDMF's Foreclosure Department with Salary Grade 24.
Despite being Manager of HDMF's Foreclosure Department, Atty. Alvarez ignored the
glaring conflict of interest when he notarized loan applications with HDMF at the office
of Globe Asiatique where he held office part-time, moonlighting as head of the legal
department of Globe Asiatique. Worse, Atty. Alvarez notarized the loan applications
without the personal appearance of the loan applicants. As Manager of HDMF's
Foreclosure Department, he would be foreclosing on loans with fictitious borrowers
based on mortgage documents that he himself notarized. Atty. Alvarez probably thought
that the fictitious loan applicants would never be discovered since as Manager of
HDMF's Foreclosure Department he had control of the foreclosures, and he could just
expeditiously foreclose the mortgages without disclosing the fictitious mortgagees. For a
monthly salary of P30,000 from Globe Asiatique, Atty. Alvarez made wholesale
guarantees that the loan documents and supporting papers were submitted to him by
persons who "personally appeared before him." Any agreement between Globe Asiatique
and HDMF would not have materialized if it were not for Globe Asiatique's submission
of mortgage documents notarized by Atty. Alvarez. Atty. Alvarez's participation in the
entire scheme was a crucial and necessary step in Globe Asiatique's inducement of
HDMF to release the loan proceeds to Globe Asiatique.

Syndicated Estafa

The 22 May 2012 Resolution of the Pampanga RTC found probable cause for the crime
of estafa (Article 315(2)(a) of the RPC, in relation to Section 1 of PD 1689, as amended)
against Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina Salagan, and Atty. Alex
Alvarez, and issued warrants of arrest against them with no bail recommended.

Article 315(2)(a) of the RPC reads:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

xxxx

(2) By means of any of the following false pretenses or fraudulent acts executed prior to
or simultaneously with the commission of the fraud:
(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.
PD 1689, which increased the penalty for estafa, if committed by a syndicate provides:
Section 1. Any person or persons who shall commit estafa or other forms of swindling as
defined in Articles 315 and 316 of the Revised Penal Code, as amended, shall be
punished by life imprisonment to death if the swindling (estafa) is committed by a
syndicate consisting of five or more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in
the misappropriation of money contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)," or farmers association, or of funds solicited by
corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall
be reclusion temporal to reclusion perpetua if the amount of the fraud exceeds 100,000
pesos.
Under Section 1 of PD 1689, the elements of syndicated estafa are: (1) estafa or other
forms of swindling as defined in Articles 315 and 316 of the RPC are committed; (2)
the estafa or swindling is committed by a syndicate of five or more persons; and (3) the
defraudation results in the misappropriation of money contributed by stockholders, or
members of rural banks, cooperative, "samahang nayon(s)," or farmers' associations or of
funds solicited by corporations/associations from the general public.[27]

Under PD 1689, syndicated estafa includes cases where fraud results in the

misappropriation of funds solicited by corporations/associations from the general public.
Thus, the law does not require that the perpetrator or the accused corporation/association
be the one to solicit the funds from the public. The law merely requires that the
"defraudation results in the misappropriation of money x x x or of funds solicited by
corporations/associations from the general public."

The alleged fraud perpetrated resulted in the misappropriation of funds of the HDMF or
PAG-IBIG Fund which is undisputedly a provident fund of the general public. The PAG-
IBIG Fund consists of mandatory contributions solicited by HDMF from all employees in
the public and private sectors. The PAG-IBIG Fund includes the mandatory contributions
of the approximately 28,000 employees of the Judiciary whose contributions were part of
the P2.9 Billion loan proceeds received by Globe Asiatique from HDMF through the nine
(9) FCAs executed by Globe Asiatique with HDMF. These nine FCAs dated 12 August
2008 (P500 Million), 11 December 2008 (P100 Million), 9 January 2009 (P500 Million),
20 February 2009 (P500 Million), 23 April 2009 (P100 Million), 28 April 2009 (P300
Million), 18 May 2009 (P300 Million), 16 June 2009 (P300 Million), and 10 July 2009
(P300 Million), were executed prior to the execution of the MOA on 13 July 2009.
[28]
 Thus, even before the execution of the MOA dated 13 July 2009, which Globe
Asiatique contends relieves it of its warranties, estafa was already consummated.

After the MOA dated 13 July 2009, eight more FCAs were executed between Globe
Asiatique and HDMF totaling P3.55 Billion: 13 July 2009 (P500 Million), 24 September
2009 (P500 Million), 22 October 2009 (P700 Million), 15 December 2009 (P250
Million), 5 January 2010 (P500 Million), 17 March 2010 (P500 Million), 19 March 2010
(P500 Million), and 12 May 2010 (P100 Million).[29] On 24 May 2010, HDMF issued a
Notice to Delfin S. Lee for Globe Asiatique to validate the 351 buyers which were
discovered by HDMF to have either surrendered or withdrawn their loans. In response to
the Notice, Delfin S. Lee admitted that they are monitoring about 1,000 accounts which
are suspected to be from questionable buyers, and that these accounts remain current with
PAG-IBIG because Globe Asiatique had been paying for them. [30] Clearly, Globe
Asiatique tried to cover-up or conceal the defaulting questionable buyers by paying on
their behalf, thus keeping their accounts current. Globe Asiatique is the instrument used
to defraud the HDMF of the PAG-IBIG Fund.

In short, the PAG-IBIG Fund consists of monetary contributions solicited from the
general public by HDMF, which is indisputably a corporate entity. Under Section 13 of
Republic Act No. 7679, "the Fund (HDMF) shall have the powers and functions specified
in this Act and the usual corporate powers." Under Section 14 of the same law, the
"corporate powers and functions of the Fund shall be vested in and exercised by the
Board of Trustees appointed by the President of the Philippines." The PAG-IBIG Fund is
the fund that was defrauded by Delfin S. Lee and his four (4) co-accused through the use,
and submission to HDMF, of loan applications and mortgage documents of fictitious loan
applicants.

No grave abuse of discretion in trial court's determination of probable cause

The Pampanga RTC's determination of probable cause, which was in accord with the
findings of the DOJ, shows no grave abuse of discretion. Hence, the claim of Cristina
Salagan that there was no probable cause to charge her with syndicated estafa deserves
scant consideration.
III. 1. G.R. No. 208744 - Department of Justice v. Delfin S. Lee
       2. G.R. No. 210095 - Department of Justice v. Delfin S. Lee

Procedural rules may be relaxed under exceptional circumstances

I agree with the ponencia that the CA should not have dismissed the petitions for being
filed out of time because there existed special and compelling reasons for the relaxation
of procedural rules.

Rules of procedure are indispensable to facilitate the orderly and speedy adjudication of
cases. Courts are constrained to adhere to procedural rules under the Rules of Court.
Nevertheless, under Section 6 of Rule 1, courts are granted the leeway in interpreting and
applying the rules:
Sec. 6. Construction. - These Rules shall be liberally construed in order to promote their
objective of securing a just, speedy and inexpensive disposition of every action and
proceeding.
However, courts are not given carte blanche authority to interpret rules liberally and the
resort to liberal application of procedural rules remains as the exception to the well-
settled principle that rules must be complied with for the orderly administration of justice.
[31]

Section 4 of Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC,

provides for the period for filing petitions for certiorari:
SECTION 4. When and Where to File the Petition. - The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not, the
petition shall be filed not later than sixty (60) days counted from the notice of the denial
of the motion.

xxxx
Although the provision on motion for extension[32] has been deleted in the amended
Section 4, such omission does not automatically mean that a motion for extension is
already prohibited. As held in Domdom v. Third & Fifth Divisions of the Sandiganbayan:
[33]

That no mention is made in the x x x amended Section 4 of Rule 65 of a motion for

extension, unlike in the previous formulation, does not make the filing of such pleading
absolutely prohibited. If such were the intention, the deleted portion could just have
simply been reworded to state that "no extension of time to file the petition shall be
granted." Absent such prohibition, motions for extension are allowed, subject to the
Court's sound discretion.
The 18 June 2013 Petition for Certiorari was filed before the CA within the extended
period requested by petitioner. However, due to the unintended omission of the docket
number (CA-G.R. SP No. 130404), the petition was assigned a new docket number (CA-
G.R. SP No. 130409) and raffled to another ponente and division. This resulted in the
dismissal of the petition for being filed out of time. As explained by petitioner DOJ, the
procedural lapse was due to inadvertence and not intended to delay the proceedings.
Considering the merits of the petition and having been filed within the extended period
requested, albeit lacking the proper docket number, the CA should have applied the rules
liberally and excused the belated filing.[34] It is more prudent for the court to excuse a
technical lapse to avoid causing grave injustice not commensurate with the party's failure
to comply with the prescribed procedure.[35] Furthermore, the merits of the case may be
considered as a special or compelling reason for the relaxation of procedural rules. [36]

The Pasig RTC disregarded a prior CA and SC ruling on the same issue when it issued
the writ of preliminary injunction

The Petition for Certiorari filed with the CA assailed the 10 April 2013 Order of the
Pasig RTC enjoining the continuation of the preliminary investigation by the DOJ of the
Second, Third, and Fourth Criminal Complaints. The Pasig RTC held that the Summary
Judgment dated 30 January 2012 in Civil Case No. 10-1120 (Makati Civil Case) issued
by the Makati RTC eliminates the element of damage in the criminal complaints against
Delfin S. Lee, which is an integral condition for an estafa case to prosper against the
latter. The Pasig RTC explained:
The Court premised its issuance of the TRO based on the Makati RTC Branch 58
Summary Judgment dated 30 January 2012 and Order dated 11 December 2012 declaring
the same to be final and executory.

The resolution of the Makati Court required intervenor HDMF to honor the terms and
conditions of the Funding Commitment Agreement and other contracts entered into
between the parties. Clearly thus, intervenor HDMF's performance of its obligations
under the Funding Commitment Agreement, Collection Service Agreement and
Memorandum of Agreement eliminates the element of damage in the criminal complaints
against petitioner which is a condition sine qua non for an estafa case to prosper against it
[sic]. Note further that although the Court of Appeals ("CA") Decision dissolving the
Writ of Preliminary Injunction issued by this Court in restraining the second criminal
complaint had been affirmed via a petition for review on certiorari, the subsequent
rendition of the Summary Judgment by the Makati RTC 58 constitutes a supervening
event to enjoin anew the proceedings in the second criminal complaint as the rendition of
which and its eventual finality was clearly not yet extant and could not have been
considered by the CA decision when the same was penned. Furthermore, the CA decision
refers only to the injunction order issued by the Court and not to the Makati RTC 58 case
which is still pending at the time. Reliance therefore on the CA decision as per second
criminal complaint can no longer be made in light of the summary judgment and its
finality. In the same vein, the injunction order should likewise extend to the third and
fourth criminal complaints lodged against herein petitioner for compliance with the
Summary Judgment by intervenor HDMF is concomitant with that of petitioner's
compliance with his own obligations to the buyers considering that the titles of the
private complainants which are presently in the possession of intervenor HDMF ought to
be released and delivered to them, negating the breach being cited by the private
complainants as the underlying premise for the criminal complaints against petitioner.

In essence, the summary judgment held that there can be no fraud and damages, an
essential element for the crime of estafa, because it is HDMF that approved the Pag-Ibig
membership and loan applications of the private complainants.

xxxx

In the case at bar, grave and irreparable damage would be caused to petitioner because he
will most likely be indicted for another non-bailable offense despite the fact that the RTC
Makati 58 already held that he committed no fraud against the private complainants. And
to expose petitioner to unnecessary trauma, hardship, inconvenience, anxiety, and fear
associated with a criminal prosecution amounts to grave and irreparable injury which
must be prevented.

Premises considered, and without prejudice to the final outcome of the certiorari
proceeding pending against the assailed Summary Judgment of the Mak.ati RTC 58 on
the issue of the existence or non-existence of fraud committed by the respondent herein
against intervenor HDMF and/or private complainants, the Court finds at this point in
time that petitioner has an existing and valid right to be protected necessitating the
issuance of an injunctive relief in its favor.

WHEREFORE, let a writ of preliminary injunction issue enjoining the Department of

Justice and any other person or panel under its supervision from continuing with the
preliminary investigation of NPS Docket No. XVI-INV-10L-00363, the Second Criminal
Complaint, NPS Docket No. XVI-INV-11B-00063, the Third Criminal Complaint, and
NPS Docket No. XVI-INV-11C-00138, the Fourth Criminal Complaint.

Petitioner is directed to post a bond in the amount of Php2,000,000.00.[37]

As stated in this 10 April 2013 Order of the Pasig RTC, there was already a prior CA
Decision dated 16 April 2012 in CA-G.R. SP No. 121594 which lifted the previous writ
of preliminary injunction issued by the Pasig RTC in its Order dated 5 September 2011,
restraining the DOJ from proceeding with the preliminary investigation of the Second
Criminal Complaint. The CA ruling annulling the 5 September 2011 Order of the Pasig
RTC for having been issued with grave abuse of discretion was affirmed by this Court in
a Resolution dated 4 July 2012 in G.R. No. 201360. Clearly, the issue of whether the
preliminary investigation of the criminal complaints can be enjoined has already been
ruled upon with finality by this Court, which affirmed the ruling of the CA in CA-G.R.
SP No. 121594, and which decision became final and executory on 2 January 2013. As
ruled by the CA in its Decision dated 16 April 2012 in CA-G.R. SP No. 121594:
Anent the second DOJ case, the resolution of whether GA is entitled to replace the
defaulting buyers/borrowers would not determine the guilt of Lee as the gravamen
of the complaint for estafa filed by Niebres and Bacani against GA and Lee was the
failure of GA to release to them the title to the respective property which they
already paid in full because it turned out that the properties sold to them were
subject of loans under the name of other persons. In the case of San Nicolas, on the
other hand, he was paying for a property that was also a subject of a loan by
another person.

Contrary to public respondent Judge's finding, the acceptance by HDMF of the

replacement buyers that GA is offering will not in any way affect Lee's liability to
Niebres, Bacani, and San Nicolas in selling to them units which were already sold to
other buyers. x x x.

xxxx

What is clear in the second DOJ case is that the properties bought by complainants were
subjects of double sale. The sale by GA of the units, already paid in full by Niebres,
Bacani and still being paid for by San Nicolas, to other individuals created a temporary
disturbance in the rights of the latter as property owners. Even if the Makati RTC would
rule in favor of Lee, Niebres, Bacani and San Nicolas would not qualify as replacement
buyers. Hence, the preemptive resolution of the civil case before the DOJ could conduct a
preliminary investigation in the second DOJ case would not affect the determination of
guilt or innocence of Lee for estafa.

To reiterate, injunction will not lie to enjoin a criminal prosecution because public
interest requires that criminal acts be immediately investigated and protected [sic] for the
protection of society. It is only in extreme cases that injunction will lie to stop criminal
prosecution. Public respondent Judge anchored his issuance of the writ on the existence
of prejudicial question. However, this Court finds that the facts and issues in the
Makati civil case are not determinative of Lee's guilt or innocence in the cases filed
before the DOJ. Verily, public respondent Judge committed grave abuse of discretion
amounting to lack or in excess of jurisdiction when he issued the writ of preliminary
injunction enjoining the DOJ from filing an information for estafa against Lee in the first
DOJ case and from proceeding with the preliminary investigation in the second DOJ
case.[38] (Emphasis supplied)
Unfortunately, the Pasig RTC chose to ignore this ruling and issued again an Order for
another writ of preliminary injunction, enjoining the DOJ from continuing with the
Second, Third, and Fourth Criminal Complaints. It should be stressed that the private
complainants in the Second, Third, and Fourth Criminal Complaints are similarly
situated: all of them are alleged victims of double sales by Globe Asiatique and Delfin S.
Lee. Clearly, the issuance of another writ of preliminary injunction by the Pasig RTC in
its 10 April 2013 Order is a blatant disregard of the decision of this Court (which
affirmed the CA Decision dated 16 April 2012 in CA-G.R. SP No. 121594). The
Summary Judgment rendered by the Makati RTC does not determine the criminal
liability of Delfin S. Lee for syndicated estafa in the Second, Third, and Fourth Criminal
Complaints which involve double sales. Besides, the Summary Judgment merely orders
the HDMF to comply with its obligations under the MOA with Globe Asiatique,
including the acceptance of replacement buyers. The acceptance of replacement buyers
contemplates defaulting buyers/borrowers of their loan and not double sales. The double
sales allegedly perpetuated by Globe Asiatique and Delfin S. Lee in the Second, Third,
and Fourth Criminal Complaints, were never an issue in the Makati Civil Case. In fact,
the private complainants in the Second, Third, and Fourth Criminal Complaints are not
parties to the Makati Civil Case, which was filed by Globe Asiatique and Delfin S. Lee
against HDMF, its Board of Trustees, and OIC Faria. Clearly, the 10 April 2013 Order of
the Pasig RTC is void for having been issued with grave abuse of discretion.

At this juncture, it bears stressing that the general rule is that criminal prosecution may
not be restrained or stayed by injunction or prohibition[39] because public interest requires
the immediate and speedy investigation and prosecution of criminal acts for the
protection of society.[40] With more reason will injunction not lie when the case is still at
the preliminary investigation stage.[41] As the court held in Atty. Paderanga v. Drilon:[42]
Preliminary investigation is generally inquisitorial, and it is often the only means of
discovering the persons who may be reasonably charged with a crime, to enable the fiscal
to prepare his complaint or information. It is not a trial of the case on the merits and has
no purpose except that of determining whether a crime has been committed and whether
there is probable cause to believe that the accused is guilty thereof, and it does not place
the person against whom it is taken in jeopardy.

The institution of a criminal action depends upon the sound discretion of the fiscal. He
has the quasi-judicial discretion to determine whether or not a criminal case should be
filed in court. Hence, the general rule is that an injunction will not be granted to restrain a
criminal prosecution.
However, there are exceptions to this rule, such as:

1. To afford adequate protection to the constitutional rights of the accused;

2. When necessary for the orderly administration of justice or to avoid oppression or
multiplicity of actions;
3. When there is a prejudicial question which is sub judice;
4. When the acts of the officer are without or in excess of authority;
5. Where the prosecution is under an invalid law, ordinance or regulation;
6. When double jeopardy is clearly apparent;
7. Where the court has no jurisdiction over the offense;
8. Where there is a case of persecution rather than prosecution;
9. Where the charges are manifestly false and motivated by the lust for vengeance;
 10. When there is clearly no prima facie case against the accused and a motion to
quash on that ground has been denied;
11. Preliminary injunction has been granted by the Supreme Court to prevent the
threatened unlawful arrest of petitioners.[43]

The Pasig RTC case does not fall under any of these exceptions. Thus, Judge Mislang of
the Pasig RTC should not have issued the writ of preliminary injunction.

To underscore the wrongful actuations of Judge Mislang in handling the HDMF cases
before his sala, this Court dismissed Judge Mislang from the service on 26 July 2016.
[44]
 The pertinent portions of our per curiam decision read:
Judge Mislang issued two (2) TROs, a writ of preliminary injunction and a status
quo order, both of which did not satisfy the legal requisites for their issuance, in gross
violation of clearly established laws and procedures which every judge has the duty and
obligation to be familiar with. The antecedent incidents of the case brought before Judge
Mislang were clear and simple, as well as the applicable rules. Unfortunately, he
miserably failed to properly apply the principles and rules on three (3) points, i.e., the
prematurity of the petition, the inapplicability of the prejudicial question, and the lack of
jurisdiction of the court. His persistent disregard of well-known elementary rules in favor
of Lee clearly reflects his bad faith and partiality.

xxxx

WHEREFORE, PREMISES CONSIDERED, the Court finds Judge Rolando G. Mislang,

Regional Trial Court, Pasig City, Branch 167, GUILTY of Gross Ignorance of the Law in
A.M. No. RTJ-14-2369 and A.M. No. RTJ-14-2372 and ORDERS his DISMISSAL from
the service with FORFEITURE of retirement benefits, except leave credits, and with
prejudice to re-employment in any branch or instrumentality of the government,
including government-owned and controlled corporations.

SO ORDERED.[45]
IV. G.R. No. 209424 - Home Development Mutual Fund (HDMF) v. Globe Asiatique
Realty Holdings Corporation, Delfin S. Lee, in his capacity as the President of the
corporation, and Tessie G. Wang

Petition for certiorari is the proper remedy

In its Decision dated 7 October 2013 in CA-G.R. SP No. 128262, the CA held that a
summary judgment is a final judgment and that the proper remedy for petitioner HDMF
was to file an ordinary appeal under Rule 41 and not a petition for certiorari under Rule
65. The CA noted that the petition filed by HDMF lacks: (1) a written authorization from
the OGCC that the Yorac Arroyo Chua Caedo & Coronel Law Firm or the HDMF Office
of the Legal and General Counsel Group is duly authorized to file the petition; and (2) the
written concurrence of the COA for the OGCC to delegate its duty to represent HDMF to
file the petition. The CA ruled that the HDMF Office of the Legal and General Counsel
Group and the Yorac Arroyo Chua Caedo & Coronel Law Firm had no authority to file
the petition for certiorari. Thus, the CA dismissed the petition for certiorari mainly on
technical grounds.

The CA did not rule on the propriety of the summary judgment, thus:
As to the issue on whether the Summary Judgment as contained in the first assailed
Resolution was rendered in accordance with the law, particularly Rule 35 of the Rules of
Court, and as to the wisdom and correctness of the Summary Judgment, thereby treating
the instant petition as one of appeal, considering that the case involves paramount public
interest, We refuse to dwell on the matter as the same, as elucidated above, is clearly not
the proper subject of the instant petition for certiorari which only province is the
determination of lack or excess of jurisdiction, or grave abuse of discretion amounting to
lack or excess of jurisdiction.[46]
It should be noted that in its 11 December 2012 Resolution, the Makati RTC held that the
Motion for Reconsideration filed by the Yorac Arroyo Chua Caedo & Coronel Law Firm
on behalf of HDMF is unauthorized and may be deemed a mere scrap of paper which
does not toll the running of the period of appeal. The Makati RTC held that for failure of
HDMF to file a valid motion for reconsideration or appeal of the Resolution dated 30
January 2012 containing the summary judgment, such has become "final, executory, and
immutable" insofar as HDMF is concerned.

The dispositive portion of the 11 December 2012 Resolution reads:

WHEREFORE, premises considered, the Court hereby resolves to:

1. DENY the motions for reconsideration of the January 30, 2012 Resolution of this
Court filed by defendants Faria and Atty. Berberabe for lack of merit; and

2. NOTE with approval the Manifestation filed by plaintiffs in connection with the failure
of defendant Home Development Mutual Fund (HDMF) to file a motion for
reconsideration or appeal from the January 30, 2012 Resolution of this Court containing
the Summary Judgment which, except as to the exact amount of damages the plaintiffs
are entitled, finally disposes of this case, rendering the summary judgment herein final,
executory, and immutable as to defendant HDMF.

SO ORDERED.[47]
Clearly, the finality of the judgment as against HDMF necessitates the filing of a petition
for certiorari since a notice of appeal is barred where the judgment sought to be appealed
is already final and executory. As held in Victory Liner, Inc. v. Malinias:[48]
Thus, the MTC judgment became final and executory despite the filing of the Motion for
Reconsideration thereto, as said motion did not toll the period for filing an appeal
therefrom. Yet that did not mean that petitioner was left bereft of further remedies under
our Rules. For one, petitioner could have assailed the MTC's denial of the Motion for
Reconsideration through a special civil action for certiorari under Rule 65 alleging grave
abuse of discretion amounting to lack of jurisdiction on the part of the MTC in denying
the motion. If that remedy were successful, the effect would have been to void the MTC's
denial of the Motion for Reconsideration, thus allowing petitioner to again pursue such
motion as a means towards the filing of a timely appeal.

xxxx

On the other hand, a notice of appeal pursued even with a prior pronouncement by the
trial court that the judgment sought to be appealed was already final is either
misconceived or downright obtuse. It may have been a different matter if the notice of
appeal was undertaken without there being any prior express ruling from the trial court
that the appealed judgment was already final and that statement was instead expressed at
the time the trial court denies the notice of appeal, for at least in that case, the appellant
proceeded with the appeal with the comfort that the trial court had not yet said that the
appeal was barred. However, as in this case, where the trial court already notified would
be appellant that the judgment was already final, executory and thus beyond appeal,
appellant should suffer the consequences if the notice of appeal is nonetheless stubbornly
pursued.
Similarly, in this case, the Motion for Reconsideration filed by HDMF was held
unauthorized by the Makati RTC and deemed a mere scrap of paper which did not toll the
running of the period of appeal. Thus, compared to Faria and Atty. Berberabe whose
motions for reconsideration were denied for lack of merit, the Makati RTC ruled that the
summary judgment is "final, executory, and immutable as to defendant HDMF." In light
of this ruling, HDMF had to file a petition for certiorari, while Faria and Atty. Berberabe
filed their notice of appeal.

Furthermore, where there is absolutely no legal basis for the rendition of a summary
judgment, a petition for certiorari is the appropriate, adequate, and speedy remedy to
nullify the assailed judgment to prevent irreparable damage and injury to a party. As held
in Cadirao v. Judge Estenzo:[49]
Anent the propriety of the remedy availed of by the petitioners, suffice it to state, that
although appeal was technically available to them, certiorari still lies since such appeal
does not prove to be a speedy and adequate remedy. Where the remedy of appeal cannot
afford an adequate and expeditious relief, certiorari can be allowed as a mode of redress
to prevent irreparable damage and injury to a party. Certiorari is a more speedy and
efficacious remedy of nullifying the assailed summary judgment there being absolutely
no legal basis for its issuance. Moreover, the records show that private respondent had
already moved for the issuance of a writ of execution and that respondent Judge merely
held in abeyance resolution of the same pending resolution by this Court of the instant
petition. Clearly then, even if appeal was available to the petitioners, it is no longer
speedy and adequate.
The propriety of certiorari as the more speedy and adequate remedy is underscored by
the fact that respondents Globe Asiatique and Delfin S. Lee have already filed a Motion
for Execution[50] dated 19 March 2013 against HDMF. HDMF contends that if the motion
is granted, HDMF will be required to release hundreds of millions or billions of pesos,
money which came from the hard-earned contributions of HDMF members, in favor of
Globe Asiatique. Moreover, HDMF posits that it will also be compelled to accept the
replacement buyers offered by Globe Asiatique, whose accounts may be equally spurious
as those of the original buyers whose applications were approved by Globe Asiatique. [51]

On the alleged unauthorized representation of the Yorac Arroyo Chua Caedo & Coronel
Law Firm on behalf of HDMF, the records show that the OGCC in fact authorized
HDMF to engage the services of the said private law firm as evidenced by the letters
dated 28 December 2010[52] and 5 December 2011[53] signed by Government Corporate
Counsel Raoul C. Creencia. Furthermore, in the COA Certification dated 10 January
2013,[54] COA Corporate Auditor Atty. Fidela M. Tan attested that the COA has
concurred in the retainer agreement between HDMF and the Yorac Arroyo Chua Caedo
& Coronel Law Firm. Clearly, the Yorac Arroyo Chua Caedo & Coronel Law Firm is
vested with the proper authority to represent HDMF, and was in fact authorized to file the
Motion for Reconsideration dated 17 February 2012 on behalf of HDMF.

Summary Judgment is not proper because there are genuine issues of material facts

The Makati RTC Resolution dated 30 January 2012 granted the Motion for Summary
Judgment filed by Globe Asiatique and Delfin S. Lee against HDMF, and ordered the
latter to comply with its obligations under the MOA, FCAs, and CSAs. The dispositive
portion of the resolution states:
WHEREFORE, premises considered, a Summary Judgment is hereby rendered declaring
that:

1. Plaintiffs have proven their case by preponderance of evidence. As such, they are
entitled to specific performance and right to damages as prayed for in the Complaint,
except that the exact amount of damages will have to be determined during trial proper[;]

2. Pursuant to the provisions of their MOA amending the continuing FCAs and CSAs,
defendant HDMF is hereby ordered to comply faithfully and religiously with its
obligations under the said contracts, including but not limited to the release of loan take-
out proceeds of those accounts whose Deed[s] of Assignment with Special Power of
Attorney have already been annotated in the corresponding Transfer Certificate of Title
covering the houses and lots purchased by the PAG-IBIG member-borrowers from
plaintiff GARHC as well as the evaluation of the loan applications of those who
underwent or will undergo plaintiff GARHC's loan counseling and are qualified for PAG-
IBIG FUND loans under the MOA and continuing FCAs and process the approval
thereof only if qualified, under the Window 1 Facility as provided for in the MOA and
continuing FCAs;

3. The unilateral cancellation by defendant HDMF of the continuing FCAs specifically

the latest FCAs of December 15, 2009, January 5 and March 17, 2010 and CSA dated 10
February 2009, is hereby SET ASIDE[;]

4. Defendants are ordered to automatically off-set the balance of those listed in Annex
"E" of the Motion for Summary Judgment against the retention money, escrow money,
funding commitment fee, loan take-out proceeds and other receivables of plaintiff
GARHC which are still in the control and possession of defendant HDMF;

5. Defendants are ordered to accept the replacement-buyers listed in Annex "F" of the
Motion for Summary Judgment, which list is unopposed by defendants, without interest
or penalty from the time of defendant HDMF's cancellation of the Collection Servicing
Agreement (CSA) resulting to the refusal to accept the same up to the time that these
replacement buyers are actually accepted by defendant HDMF;

6. Defendants are ordered to release the corresponding Transfer Certificate of Title[s]

(TCTs) of those accounts which are fully paid or subjected to automatic off-setting
starting from the list in Annex "E" of the Motion for Summary Judgment and thereafter
from those listed in Annex "F" thereof and cause the corresponding cancellation of the
annotations in the titles thereof.

Let this case be set for the presentation of evidence on the exact amount of damages that
plaintiffs are entitled on March 12, 2012 at 8:30 in the morning.

SO ORDERED.[55]
A summary judgment is a procedural technique designed to promptly dispose of cases
where the facts appear undisputed and certain from the pleadings, depositions,
admissions, and affidavits on record.[56] The purpose of summary judgment is to grant
immediate relief in cases where no genuine triable issue of fact is raised, and thus avoid
needless trials and delays. Summary judgment should not be granted unless the records
show with certainty that there is no disputable issue as to any material fact which would
prevent recovery from the party presenting the motion for summary judgment if a full-
blown trial is conducted. The party who moves for summary judgment has the burden of
proving the absence of any genuine issue as to any material fact or that the issue posed is
patently unsubstantial and does not constitute a genuine issue for trial.[57]

Summary judgment is provided under Rule 35 of the 1997 Rules of Civil Procedure.
Sections 1 and 3 of Rule 35 read:
Section 1. Summary judgment for claimant. - A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief, at any time after the
pleading in answer thereto has been served, move with supporting affidavits, depositions
or admissions for a summary judgment in his favor upon all or any part thereof.

Section 3. Motion and proceedings thereon. - The motion shall be served at least ten (10)
days before the time specified for the hearing. The adverse party may serve opposing
affidavits, depositions, or admissions at least three (3) days before the hearing. After the
hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting
affidavits, depositions, and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
Section 3 of Rule 35 provides two requisites for the grant of a summary judgment: (1)
there must be no genuine issue as to any material fact, except for the amount of damages;
and (2) the party presenting the motion for summary judgment must be entitled to a
judgment as a matter of law. Thus, where the pleadings tender a genuine issue which
requires the presentation of evidence, the rendition of a summary judgment is not proper.
A "genuine issue" is an issue of fact which requires the presentation of evidence as
distinguished from a sham, fictitious, contrived, or false claim.[58]

Contrary to the ruling of the Makati RTC, the pleadings of the parties show the existence
of genuine issues of material facts, rendering the summary judgment improper.

In its Complaint dated 13 November 2010,[59] Globe Asiatique claims that: (1) Globe
Asiatique has the right to replace the buyers/borrowers who have been delinquent for
whatever reason and that the refusal of Pag-IBIG Fund [HDMF] to accept the
replacements violated Globe Asiatique 's rights to exercise the remedies available to it
under the provisions of the MOA and FCA; (2) Pag-IBIG Fund's precipitate cancellation
of the latest FCA and its refusal to release the collectibles/loan take-outs to which Globe
Asiatique is entitled caused the latter's failure to comply with its obligations under the
MOA and FCA; and (3) Pag-IBIG Fund's cancellation of the latest FCA and CSA was
intended to cause Globe Asiatique to fail to comply with its obligations under the MOA
and as a consequence lose its incentives for its good performance for the past years and
the potential to earn under the agreements.

On the other hand, in its Answer with Compulsory Counterclaim dated 8 December 2010,
[60]
 HDMF refutes Globe Asiatique's claims, thus: (1) HDMF has the right to terminate the
agreements because of Globe Asiatique's "grand fraudulent scheme through the creation
of ghost buyers and fabrication of loan documents" which violates the 13 July 2008
MOA and the 5 January 2010 FCA; (2) the alleged defaulting buyers/borrowers sought to
be replaced by Globe Asiatique are in fact fake and fictitious buyers/borrowers; (3) under
Section 3.7 (Buyback of Accounts) of the FCA, the remedy of buyback of accounts can
only be availed of after receipt of the Notice of Buyback, which Pag-IBIG Fund did not
issue for the 400 accounts mentioned by Globe Asiatique in its Complaint, which Globe
Asiatique unilaterally canceled; (4) Section 3.7 of the FCA applies only in case of default
and not when the cause for buyback is fraud or breach by Globe Asiatique of any of its
warranties; (5) the CSA was canceled due to Globe Asiatique's failure to remit the
amortization collections for the periods covering August 2-6, 2010 and August 9-13,
2010; (6) Pag-IBIG Fund canceled the 15 September 2010 FCA because of Globe
Asiatique's failure to: a) buyback CTS accounts, other than the 400 accounts mentioned
in Globe Asiatique's Complaint which Globe Asiatique unilaterally canceled and which
were not subjected to Notices of Buyback by Pag-IBIG Fund; and b) remit the collection
covering monthly installment payments of housing loan accounts under the CSA; and (7)
Globe Asiatique violated its undertaking and warranty under Sections 3.1[61] and 7.1[62] of
the FCA when it approved loan applications which were not eligible under the Pag-IBIG
Housing Loan Program.

It is very apparent from the allegations in the parties' respective pleadings that there exist
relevant genuine issues which require the presentation of evidence and which need to be
resolved in a full-blown trial Summary judgment cannot take the place of trial since the
facts as pleaded by Globe Asiatique are categorically disputed and contradicted by
HDMF.

Thus, the CA Decision dated 7 October 2013 in CA-G.R. SP No. 128262 should be
reversed and the 30 January 2012 and 11 December 2012 Resolutions of the Makati RTC
in Civil Case No. 10-1120 should be annulled and set aside. The case should be
remanded to the Makati RTC for trial on the merits.

For the orderly disposition of these cases, my vote is summarized as follows:

I. DOJ Review Resolution dated 10 August 2011

1. G.R. No. 205698 - Home Development Mutual Fund (HDMF) PAG-IBIG Fund v.

Christina Sagun
2. G.R. No. 205780 - Department of Justice, represented by Sec. Leila De Lima,
State Prosecutor Theodore M. Villanueva and Prosecutor General Claro A.
Arellano, and the National Bureau of Investigation v. Christina Sagun

The petitions filed by HDMF and DOJ should be GRANTED. The 5 October 2012
Decision and the 11 February 2013 Resolution in CA-G.R. SP No. 121346 should
be REVERSED. The Warrant of Arrest issued in Criminal Case No. 18480 before RTC
Branch 42 of San Fernando, Pampanga against Christina Sagun should
be REINSTATED.

II. Pampanga RTC Resolutions dated 22 May 2012 and 22 August 2012

1. G.R. No. 209446 - People of the Philippines v. Alex M. Alvarez

2. G.R. No. 209489 - Home Development Mutual Fund v. Atty. Alex M. Alvarez
3. G.R. No. 209852 - Home Development Mutual Fund (HDMF) v. Delfin S. Lee
 4. G.R. No. 210143 - People the Philippines v. Delfin S. Lee
5. G.R. No. 228452 - Home Development Mutual Fund (HDMF) v. Dexter L. Lee
6. G.R. No. 228730 - People of the Philippines v. Dexter L. Lee
7. G.R. No. 230680 - Cristina Salagan v. People of the Philippines and Home
Development Mutual Fund (HDMF)

The petitions filed by HDMF and OSG should be GRANTED. The 3 October 2013
Decision in CA-G.R. SP No. 127690, the 7 November 2013 Decision in CA-G.R. SP No.
127553, and the 16 November 2016 Decision in CA-G.R. SP No. 127554 should
be REVERSED. The Warrants of Arrest issued in Criminal Case No. 18480 before RTC,
Branch 42 of San Fernando, Pampanga against Delfin S. Lee, Dexter L. Lee, and Atty.
Alex M. Alvarez should be REINSTATED. The petition filed by Cristina Salagan
should be DISMISSED, and the Decision dated 18 March 2016 in CA-G.R. SP No.
134573 should be AFFIRMED.

III. Pasig RTC Order dated 10 April 2013

1. G.R. No. 208744 - Department of Justice v. Delfin S. Lee

2. G.R. No. 210095 - Department of Justice v. Delfin S. Lee

The CA Resolutions dated 14 August 2013 in CA-G.R. SP No. 130404 and the CA
Resolution dated 26 June 2013 in CA-G.R. SP No. 130409 should be REVERSED. The
Order dated 10 April 2013 of the Pasig RTC in Civil Case No. 73115-PSG, issuing the
writ of preliminary injunction enjoining the DOJ from continuing the preliminary
investigation of the Second, Third, and Fourth Criminal Complaints should
be ANNULLED and SET ASIDE.

IV. Makati RTC Resolutions dated 30 January 2012 and 11 December 2012

1. G.R. No. 209424 - Home Development Mutual Fund (HDMF) v. Globe Asiatique

Realty Holdings Corporation, Delfin S. Lee, in his capacity as the President of the
corporation, and Tessie G. Wang

The CA Decision dated 7 October 2013 in CA-G.R. SP No. 128262 should

be REVERSED and the 30 January 2012 and 11 December 2012 Resolutions of the
Makati RTC in Civil Case No. 10-1120 should be ANNULLED and SET ASIDE. The
case should be REMANDED to the Makati RTC for trial on the merits.

[1]
 Rollo (G.R. No. 205698), Vol. I, pp. 56-57.
[2]
 Rollo (G.R. No. 208744), p. 122.
[3]
 Id. at 118-121.
[4]
 Id. at 198.
[5]
 Home Development Mutual Fund v. The Hon. Eugene S. Paras, in his official capacity
as the Presiding Judge of Branch 58 of the Regional Trial Court of Makati, Globe
Asiatique Realty Holdings Corporation, Delfin S. Lee, in his capacity as President of the
corporation and Tessie G. Wang.
[6]
 Globe Asiatique Realty Holdings Corporation and Delfin S. Lee, in his capacity as
President of the corporation v. Home Development Mutual Fund (HDMF) or PAG-IBIG
Fund, its Board of Trustees and Emma Linda Faria, Officer-in-Charge.
[7]
 Rollo (G.R. No. 209424), Vol. I, pp. 14-34.
[8]
 Rollo (G.R. No. 209446), Vol. I, pp. 31-32.
[9]
 Delfin Lee v. Ma. Amifaith S. Fider-Reyes in her capacity as Presiding Judge of RTC
Br. 42, San Fernando, Pampanga, People of the Philippines, and Home Development
Mutual Fund (HDMF).
[10]
 People v. Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina Salagan, and Atty.
Alex Alvarez, docketed as Criminal Case No. 18480 for syndicated estafa under Article
315(2)(a) of the RPC in relation to Section 1 of PD 1689, as amended.
[11]
 Rollo (G.R. No. 209852), Vol. I, pp. 42-43.
[12]
 Delfin S. Lee v. Ma. Amifaith S. Fider-Reyes in her capacity as Presiding Judge of
RTC Br. 42, San Fernando, Pampanga, People of the Philippines, and Home
Development Mutual Fund (HDMF).
[13]
 Dexter L. Lee v. Ma. Amifaith S. Fider-Reyes in her capacity as Presiding Judge of
RTC Br. 42, San Fernando, Pampanga, People of the Philippines, and Home
Development Mutual Fund (HDMF).
[14]
 People of the Philippines v. Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina
Salagan, and Atty. Alex Alvarez, docketed as Criminal Case No. 18480 for
syndicated estafa under Article 315(2)(a) of the RPC in relation to Section 1 of PD 1689,
as amended.
[15]
 Rollo (G.R. No. 228730), pp. 32-33.
[16]
 Rollo (G.R. No. 230680), Vol. I, p. 365.
[17]
 DOJ Department Circular No. 70 dated 6 July 2000.
[18]
 Review Resolution, pp. 19-20.
[19]
 Id. at 41.
[20]
 Id. at 40-41, 44-45. Boldfacing in the original.
[21]
 533 Phil. 796, 807-808 (2006). Italicization in the original.
[22]
 582 Phil. 505, 518-520 (2008)
[23]
 Santos v. COMELEC, 447 Phil. 760 (2003).
[24]
 640 Phil. 620, 650-651 (2010).
[25]
 Rollo (G.R. No. 209446), pp. 2550-2563.
[26]
 Id. at 722.
[27]
 Belita v. Sy, 788 Phil. 581, 588-589 (2016); People v. Tibayan, 750 Phil. 910, 920
(2015).
[28]
 Rollo (G.R. No. 209424), p. 810.
[29]
 Id. at 812.
[30]
 Id. at 814.
[31]
 People v. Espinosa, 731 Phil. 615, 627-628 (2014), citing Building Care
Corp./Leopard Security & Investigation Agency v. Macaraeg, 700 Phil. 749, 755 (2012).
[32]
 Prior to its deletion in the amendment, Section 4 of Rule 65 provides that "No
extension of time to file the petition shall be granted except for the most compelling
reason and in no case exceeding fifteen (15) days."
[33]
 627 Phil. 341, 347-348 (2010).
[34]
 In Castells v. Saudi Arabian Airlines, 716 Phil. 667, 673-674 (2013), the Court cited
the case of Labao v. Flores, 649 Phil. 213, 222-223 (2010), for the list of exceptions to
the strict application of procedural rules, thus:
(1) most persuasive and weighty reasons;

(2) to relieve a litigant from an injustice not commensurate with his failure to comply
with the prescribed procedure;

(3) good faith of the defaulting party by immediately paying within a reasonable time
from the time of default;

(4) the existence of special or compelling circumstances; (5) the merits of the case;

(6) a cause not entirely attributable to the fault or negligence of the party favored by the
suspension of the rules;

(7) a lack of any showing that the review sought is merely frivolous or dilatory;

(8) the other party will not be unjustly prejudiced thereby;

(9) fraud, accident, mistake or excusable negligence without appellant's fault;

(10) peculiar legal and equitable circumstances attendant to each case;

(11) in the name of substantial justice and fair play;

(12) importance of the issues involved; and

(13) exercise of sound discretion by the judge guided by all the attendant circumstances.
[35]
 Philippine Bank of Communications v. Court of Appeals, G.R. No. 218901, 15
February 2017, 818 SCRA 68, citing Tanenglian v. Lorenzo, 573 Phil. 472 (2008).
[36]
 Bases Conversion Dev't. Authority v. Reyes, 711 Phil. 631, 643 (2013), citing Twin
Towers Condominium Corp. v. Court of Appeals, 446 Phil. 280, 298-299 (2003).
[37]
 Rollo (G.R. No. 208744), pp. 196-198.
[38]
 Id. at 650-652.
[39]
 Camanag v. Guerrero, 335 Phil. 945 (1997); Atty. Paderanga v. Hon. Drilon, 273
Phil. 290 (1991).
[40]
 Domingo v. Sandiganbayan, 379 Phil. 708 (2000).
[41]
 Samson v. Secretary Guingona, Jr., 401 Phil. 167 (2000); Guingona v. The City Fiscal
of Manila, 222 Phil. 119 (1985).
[42]
 273 Phil. 290, 296 (1991).
[43]
 People v. Grey, 639 Phil. 535, 551 (2010), citing Brocka v. Ponce Enrile, 270 Phil.
271, 276-277 (1990). (Citations omitted)
[44]
 Department of Justice v. Mislang, 791 Phil. 219 (2016).
[45]
 Id. at 228-229, 232.
[46]
 Rollo (G.R. No. 209424), p. 32.
[47]
 Id. at 459.
[48]
 551 Phil. 273, 290-292 (2007).
[49]
 217 Phil. 93, 102 (1984).
[50]
 Rollo (G.R. No. 209424), pp. 1868-1882.
[51]
 Id. at 271.
[52]
 Id. at 1494-1495. The letter dated 28 December 2010 states:
This refers to your request for authority to engage the services of external counsel who
will handle the cases filed by or against Globe Asiatique Holdings Corp.

In view thereof, and pursuant to Office of the Government Corporate Counsel (OGCC)
Memorandum Circular 1, Series of 2002 in conjunction with Republic Act 3838 and
Memorandum Circular 9 dated 29 August 1998, Home Development Mutual Fund
(HDMF) is hereby authorized to engage the services of Raquel Wealth A. Taguian and
Yorac Arroyo Chua Caedo & Coronel Law Firm to handle the aforesaid cases, subject to
the control and supervision of the OGCC. This authority does not amount to an
endorsement of the compensation of the lawyers to be engaged, which we leave to the
sound discretion of management mindful of Commission on Audit rules and regulations.

xxxx
[53]
 Id. at 1496-1497. The letter dated 28 December 2010 states:
This confirms and ratifies the engagement of external counsel for the handling of the
cases filed by or against the Globe Asiatique Holdings Corporation, and such other cases
that arose out of or in relation to the Globe Asiatique Corporation issues.

In view thereof, and pursuant to this Office's Memorandum Circular 1, Series of 2002 in
conjunction with Republic Act 3838 and Memorandum Circular 9 dated 29 August 1998,
we confirm and ratify the engagement of Yorac Arroyo Chua Caedo & Coronel Law
Firm to handle such cases, subject to the control and supervision of this Office. This
authority does not amount to an endorsement of the compensation of the lawyers to be
engaged, which we leave to the sound discretion of management mindful of Commission
on Audit rules and regulations.

xxxx
[54]
 Id. at 1493. The COA Certification states:
This is to certify that the Commission on Audit (COA) has concurred in the Retainer
Agreement entered into by and between the Home Development Mutual Fund (HDMF)
and Yorac Arroyo Chua Caedo & Coronel Law Firm, for the latter to provide legal
services to the HDMF in connection with the cases filed by or against Globe Asiatique
Realty Holdings Corporation, Mr. Delfin S. Lee, its officers, employees and agents, and
such other cases that arose out of or in relation to the Globe Asiatique Realty Holdings
Corporation issues.
[55]
 Id. at 451-452.
[56]
 Phil. Countryside Rural Bank (Liloan, Cebu), Inc. v. Taring, 603 Phil. 203 (2009).
[57]
 YKR Corporation v. Philippine Agri-Business Center Corp., 745 Phil. 666, 685-686
(2014), citing Viajar v. Judge Estenzo, 178 Phil. 561, 573 (1979).
[58]
 Phil. Countryside Rural Bank (Liloan, Cebu), Inc. v. Toring, supra note 56; Nocom v.
Camerino, 598 Phil. 214 (2009).
[59]
 Rollo (G.R. No. 209424), pp. 753-774.
[60]
 Id. at 776-831.
[61]
 Section 3.1. The DEVELOPER shall receive, evaluate, process and approve the
housing loan applications of its member-buyers in accordance with the applicable
Guidelines of the Pag-IBIG Housing Loan Program. The DEVELOPER shall likewise be
responsible for the annotation of the Deeds of Assignment with Special Power of
Attorney (DOA with SPA)/Loan and Mortgage Agreement (LMA) for accounts covered
by the CTS and REM respectively, on the Individual Certificates of Title covering the
house and lot units subject of the loan with the appropriate Register of Deeds (RD), and
shall deliver the complete mortgage folders to Pag-IBIG Fund.
[62]
 Section 7.1. LOAN EVALUATION - The DEVELOPER warrants that the member-
borrowers and their respective housing loan applications have been properly evaluated
and approved in accordance with the applicable Guidelines of the Pag-IBIG Housing
Loan Program prior to their endorsement to Pag-IBIG Fund.
 SEPARATE OPINION

PERLAS-BERNABE, J.:

I. G.R. Nos. 205698, 205780, 209446, 209489, 209852, 210143, 228452, 228730, and
230680.

These petitions commonly relate to the determination of probable cause against herein
respondents Delfin S. Lee (Delfin Lee), Dexter L. Lee (Dexter Lee), Christina Sagun
(Sagun), Cristina Salagan (Salagan), and Atty. Alex M. Alvarez (Alvarez; collectively
respondents). In particular:

(a) The petitions in G.R. Nos. 205698[1] and 205780[2] were respectively filed by

petitioners, the Home Development Mutual Fund (HDMF; also known as Pag-IBIG) and
the Department of Justice (DOJ), to assail the Court of Appeals' (CA) Rulings [3] in CA-
G.R. SP No. 121346 which set aside the DOJ's Review Resolution [4] dated August 10,
2011 finding probable cause to indict Sagun, among others, for the crime of
syndicated estafa, and ordered the dismissal of the case and the quashal of the warrant of
arrest issued against her;

(b) The petitions in G.R. Nos. 209446[5] and 209489[6] were respectively filed by

petitioners, the People of the Philippines (People) and HDMF, to assail the CA's
Ruling[7] in CA-G.R. SP No. 127690 which annulled and set aside the Regional Trial
Court (RTC) of Pampanga, Branch 42's (Pampanga RTC) May 22, 2012 Resolution[8] and
August 22, 2012 Resolution[9] judicially finding probable cause against Alvarez, inter
alia, for the same crime of syndicated estafa, and hence, ordered the dismissal of the case
and the quashal of the warrant of arrest issued against him;

(c) The petitions in G.R. Nos. 209852[10] and 210143[11] were respectively filed by HDMF

and the People to assail the CA's ruling[12] in CAG.R. SP No. 127553 which also annulled
and set aside the aforesaid Pampanga-RTC's May 22, 2012 Resolution[13] and August 22,
2012 Resolution[14] judicially finding probable cause against Delfin Lee, inter alia, for the
same crime of syndicated estafa, and ordered the dismissal of the case and the quashal of
the warrant of arrest issued against him;

(d) The petitions in G.R. Nos. 228452[15] and 228730[16] were respectively filed by HDMF

and the People to assail the CA's Ruling[17] in CA-G.R. SP No. 127554 which also
annulled and set aside the Pampanga-RTC Resolutions[18] judicially finding probable
cause against Dexter Lee, inter alia, for the same crime of syndicated estafa, and ordered
the dismissal of the case and the quashal of the warrant of arrest issued against him; and
(e) The petition in G.R. No. 230680[19] filed by Salagan assails the CA's March 18, 2016
Decision[20] and March 16, 2017 Resolution[21] in CA-G.R. SP No. 134573 which affirmed
the Pampanga-RTC's May 22, 2012 Resolution[22] and January 29, 2014 Resolution,
[23]
 and accordingly, upheld the latter court's finding of probable cause for
syndicated estafa and issuance of warrant of arrest insofar as Salagan is concerned.

These cases stemmed from the HDMF's filing of a Complaint-Affidavit[24] for

syndicated estafa, as defined and penalized under Article 315 (2) (a) of the Revised Penal
Code (RPC) in relation to Presidential Decree No. (PD) 1689,[25] and the National Bureau
of Investigation's (NBI) referral letter dated October 29, 2010,[26] by virtue of which, the
DOJ conducted a preliminary investigation[27] against respondents, along with several
others. In brief, it was alleged that Delfin Lee, as the President and Chief Executive
Officer of petitioner Globe Asiatique Realty Holdings Corporation (GA), entered into
funding commitment agreements and other transactions with HDMF wherein he made
false and fraudulent representations to HDMF that GA had interested buyers in its Xevera
projects in Bacolor and Mabalacat, Pampanga, when in truth, Delfin Lee knew fully well
that the corporation did not have such buyers.[28] The fraud against HDMF was allegedly
perpetrated by the submission by GA of names of fictitious buyers and documents to
HDMF as part of certain housing loan applications that led to fund releases by HDMF in
favor of GA.[29] In addition, GA purportedly employed a "special buyers" scheme
whereby it recruited persons who did not have any intention to buy its housing units in
Xevera, but, in exchange for a fee, lent their names and Pag-IBIG membership to GA so
that the said corporation could use the same in obtaining fund releases from HDMF. [30] As
stated in the Information, Delfin Lee, together with Dexter Lee, Sagun, and Salagan, in
their respective capacities as Executive Vice-President/Chief Finance Officer/Treasurer,
Documentation Department Head, and Accounting/Finance Department Head of GA,
[31]
 as well as Alvarez, as Foreclosure Department Manager of HDMF, [32] acted as a
syndicate formed with the intention of carrying out the unlawful or illegal act,
transaction, enterprise or scheme of soliciting funds from the general public, each
performing a particular act in furtherance of the common design.

After due proceedings, the DOJ issued a Review Resolution [33] dated August 10, 2011
(DOJ Review Resolution) finding probable cause to indict respondents for the crime
complained of. The DOJ found that the elements of syndicated estafa are present in the
instant case, considering that: (a) GA entered into various Funding Commitment
Agreements (FCAs)[34] and a Memorandum of Agreement (MOA)[35] with HDMF
whereby the former warranted, inter alia, that the borrowers are bonafide Pag-IBIG
members who had been properly evaluated and approved in accordance with the
guidelines of Pag-IBIG Housing Loan Program; (b) by virtue of the said FCAs and
MOA, HDMF was induced to release to GA the aggregate amount of P7,007,806,000.00;
(c) GA had reneged on said warranties as it, among others, employed fictitious buyers to
be able to obtain said funds from HDMF; (d) when HDMF discovered such irregularities
and stopped its fund releases to GA, the latter's almost 100% monthly
collection/remittance stopped as well, thereby strongly indicating that the monthly
amortizations being remitted by GA were being paid from the fund releases it was
receiving from HDMF; and (e) HDMF was prejudiced in the amount of
P6,653,546,000.00 which has yet to be returned by GA.[36]

Accordingly, the Information[37] for syndicated estafa was filed before the Pampanga-

RTC.[38] Later, the said court, in a Resolution[39] dated May 22, 2012, judicially
determined the existence of probable cause against respondents, and consequently,
ordered the issuance of warrants of arrest against them. Through various proceedings in
different fora, respondents assailed the finding of probable cause against them, and
eventually, such issue was raised before the Court through the aforesaid petitions.

The ponencia partially granted the petitions in G.R. Nos. 205698, 205780, 209446,

209489, 209852, 210143, 228452, 228730, and 230680 in that it found probable cause to
prosecute Delfin Lee, Dexter Lee, Sagun, Salagan, and Alvarez for simple estafa only, as
defined and penalized under Article 315 (2) (a) of the RPC, and accordingly, directed the
DOJ to amend the respondents' Information to reflect such indictment.
The ponencia ruled that there is sufficient basis to support a reasonable belief that
respondents, namely: Delfin Lee, Dexter Lee, Sagun, Salagan, and Alvarez were
probably guilty of simple estafa. It ratiocinated that through the representations and
undertakings made by GA in its "special buyers" scheme, these respondents were able to
induce HDMF in entering into the various FCAs to the latter's damage and prejudice.
The ponencia went on to particularize the respondents' individual acts which made them
criminally accountable for perpetrating the "special buyers" scheme, as follows: (a)
Delfin Lee, for signing the FCAs and MOA in behalf of GA, and the checks issued by
GA to the "special buyers" and HDMF; (b) Dexter Lee, for giving the orders to recruit
"special buyers" and co-signing those checks issued to the "special buyers" and HDMF;
(c) Sagun, as head of GA's Documentation Department, for collating the documents
submitted by the borrowers/buyers, checking if the same are complete and duly
accomplished, and verifying whether or not the said borrowers/buyers are indeed Pag-
IBIG members with updated contributions or existing housing loans; (d) Salagan, as head
of GA's Accounting/Finance Department, for reviewing all requests for payment from on-
site projects and preparing the corresponding checks, ensuring that all loan takeouts are
duly recorded, and that amortizations are timely remitted to HDMF; and (e) Alvarez, for
notarizing crucial pieces of documents purportedly from affiants who turned out to be
fictitious and/or non-existing, which directly led to HDMF releasing its funds to GA. [40]

However, the ponencia held that respondents cannot be indicted for syndicated estafa,

pointing out that the association of the said respondents did not solicit funds from the
general public as there was no allegation that GA had been incorporated to defraud its
stockholders or members, and that in fact, the only complainant in the estafa charges is a
single juridical entity, i.e., HDMF, which is not a stockholder or member of GA.[41]
Stripped of its technicalities[42] and as will be explained hereunder, I agree with
the ponencia in: (a) finding probable cause to indict respondents Delfin Lee, Dexter Lee,
Sagun, Salagan, and Alvarez for simple estafa only, and not syndicated estafa; and (b)
directing the DOJ to amend the Information against them accordingly.

Article 315 (2) (a) of the RPC reads:

Art. 315. Swindling (estafa). - Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

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

qualifications, property, credit, agency, business or imaginary transactions; or by means
of other similar deceits.
The elements of estafa as contemplated in this provision are the following: (a) that there
must be a false pretense or fraudulent representation as to his power, influence,
qualifications, property, credit, agency, business or imaginary transactions; (b) that such
false pretense or fraudulent representation was made or executed prior to or
simultaneously with the commission of the fraud; (c) that the offended party relied on the
false pretense, fraudulent act, or fraudulent means and was induced to part with his
money or property; and (d) that, as a result thereof, the offended party suffered damage.
[43]

In relation thereto, Section 1 of PD 1689 states that syndicated estafa is committed as

follows:
Section I. Any person or persons who shall commit estafa or other forms of swindling as
defined in Articles 315 and 316 of the Revised Penal Code, as amended, shall be
punished by life imprisonment to death if the swindling (estafa) is committed by a
syndicate consisting of five or more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in
the misappropriation of money contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)," or farmers' association, or funds solicited by
corporations/associations from the general public.
Thus, the elements of syndicated estafa are: (a) estafa or other forms of swindling, as
defined in Articles 315 and 316 of the RPC, is committed; (b) the estafa or swindling is
committed by a syndicate of five (5) or more persons; and (c) defraudation results in the
misappropriation of moneys contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)," or farmers' association, or of funds solicited by
corporations/associations from the general public.[44]
With these in mind, it is my opinion that there is probable cause to believe
that estafa under Article 315 (2) (a) of the RPC was committed by all of the respondents,
considering that HDMF was induced to enter into various FCAs and a MOA with GA
based on its understanding that GA would only process the applications of bona fide Pag-
IBIG members who have been properly evaluated and approved in accordance with the
program's housing guidelines. Because of the execution of such FCAs and MOA, HDMF
released funds to GA via numerous loan takeouts for the latter's Xevera Project.
However, unknown to HDMF, GA implemented fraudulent designs, such as the "special
buyers" scheme, to make it appear that it had various buyers/borrowers for the Xevera
Project, when in truth, most of such buyers/borrowers were fictitious, not qualified to
avail of such loans, or even persons who merely signed documents in exchange for
money offered to them by GA. Case law states that:
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.[45]
In this case, HDMF was evidently prejudiced by the scheme employed by GA, through
its officers and agents, as HDMF unduly released public funds to GA, which it had yet to
recover. In fact, as soon as HDMF stopped its fund releases to GA, the latter's Performing
Accounts Ratio for the Xevera Project went from 95% to 0%.

Notably, the foregoing is based on either undisputed facts or the audit findings conducted
by HDMF functionaries. Anent the latter, the audit conducted by HDMF was made
pursuant to its investigatory powers which is incidental to its power "[t]o ensure the
collection and recovery of all indebtedness, liabilities and/or accountabilities, including
unpaid contributions in favor of the Fund arising from any cause or source or whatsoever,
due from all obligors, whether public or private x x x" under Section 13 (q) of Republic
Act No. (RA) 9679,[46] known as "Home Development Mutual Fund Law of 2009,
otherwise known as Pag-IBIG (Pagtutulungan sa Kinabukasan: Ikaw, Bangko,
Industriya at Gobyerno) Fund." Therefore, it cannot be denied that the audit was an
official function, which hence, must be accorded the presumption of regularity. Case law
states that "[t]he presumption of regularity of official acts may be rebutted by affirmative
evidence of irregularity or failure to perform a duty. The presumption, however, prevails
until it is overcome by no less than clear and convincing evidence to the contrary. Thus,
unless the presumption is rebutted, it becomes conclusive. Every reasonable intendment
will be made in support of the presumption and in case of doubt as to an officer's act
being lawful or unlawful, construction should be in favor of its lawfulness."[47]

In an attempt to shift the "blame" on HDMF for not properly verifying the
borrowers/buyers submitted by GA, it has been contended that upon the execution of the
MOA, GA was already relieved of its warranties: (a) on the proper evaluation and
approval of loans of the borrowers/buyers; and (b) against misrepresentation of its
agents/employees for loan accounts evaluated and approved by GA.
However, this contention is untenable, considering the inescapable fact that at the time
of the execution of the MOA on July 13, 2009, GA had already executed around nine
(9) different FCAs with HDMF, with the latter having released funds amounting to
more or less P2.9 Billion for the purpose. As such, the crime of estafa was, in all
reasonable likelihood, already consummated even before the execution of the MOA.

Furthermore, even assuming arguendo that the provisions of the MOA indeed superseded

GA's aforesaid warranties and that the obligation to evaluate and approve the loan
applications of the borrowers/buyers of the Xevera Project was already with HDMF, GA
remains bound to undertake corrective measures to address any defects regarding the
membership and housing loan eligibility of its buyers:
In cases where defects in HDMF membership and housing loan eligibility of the buyer
are found, the DEVELOPER shall undertake the following corrective measures to
address the same:

1) Require the borrower to complete the required number of contributions, in case the required
24 monthly contributions is not met;
2) Require the borrower to update membership contributions, in case the membership status is
inactive;
3) Require the borrower to update any existing Multi-Purpose Loan (MPL) if [it] is in arrears
or pay in full if the same has lapsed;
4) Buyback the account in case the member has a HDMF housing loan that is outstanding,
cancelled, bought back, foreclosed or subject to [dacion en pago].[48]
Aside from these obligations, it goes without saying that the GA is obliged to only
provide and process the applications of legitimate buyers. Verily, it would be nonsensical
to suppose that HDMF would release funds to GA had it known that the list of
borrowers/buyers and the accompanying documents submitted to it by the latter were
fraudulent or fictitious.

Moreover, the HDMF's failure to prevent the fraudulent maneuverings allegedly

employed by GA - whether through the negligence of its staff or otherwise - does not
negate the fact that fraud was committed against the former. The scheme's discovery is
already after the fact and hence, does not discount the posterior commission of fraud. At
any rate, it should be highlighted that HDMF, is a government-owned and controlled
corporation (GOCC)[49] and hence, an instrumentality of the State. Thus, the rule that the
State is not bound by the omission, mistake or error of its officials or agents [50] applies.

As for the respondents' respective roles in the fraudulent scheme establishing the
existence of probable cause against them, I fully agree with - and thus, need not repeat -
the ponencia's findings. In light of the foregoing, it is my submission that there is
probable cause to believe that all respondents, i.e., Delfin Lee, Dexter Lee, Sagun,
Salagan, and Alvarez, conspired and confederated with one another in order to commit
the fraudulent acts against HDMF. In this regard, jurisprudence instructs that "in
determining whether conspiracy exists, it is not sufficient that the attack be joint and
simultaneous for simultaneousness does not of itself demonstrate the concurrence of will
or unity of action and purpose which are the bases of the responsibility of the assailants.
What is determinative is proof establishing that the accused were animated by one and
the same purpose."[51]

That it was GA and HDMF - both corporate entities - which dealt with each other, and
not respondents in their personal capacities, does not eliminate the latter's criminal
liabilities in this case, if so established after trial. Jurisprudence provides that "if the
violation or offense is committed by a corporation, partnership, association or other
juridical entities, the penalty shall be imposed upon the directors, officers,
employees or other officials or persons responsible for the offense. The penalty
referred to is imprisonment, the duration of which would depend on the amount of the
fraud as provided for in Article 315 of the [RPC]. The reason for this is obvious:
corporation, partnership, association or other juridical entities cannot be put in jail.
However, it is these entities which are made liable for the civil liabilities arising from the
criminal offense. This is the import of the clause 'without prejudice to the civil liabilities
arising from the criminal offense.'"[52]

Also, it deserves pointing out that while respondents do not deny the existence of
fictitious/non-existent buyers and that loan documents were falsified/simulated, they
disclaim knowledge of the fraudulent scheme committed against HDMF, as it was
allegedly its rogue agents which actually defrauded GA. Clearly, the foregoing
constitutes denial and as such, is a matter of defense, the merits of which are better
threshed out during trial.[53]

Finally, it is important to elucidate that the RTC of Makati City, Branch 58's (Makati-
RTC) January 30, 2012 Resolution in Civil Case No. 10-1120 granting GA and Delfin
Lee's motion for summary judgment, and consequently, its complaint for specific
performance and damages against HDMF has no bearing, considering its fundamental
disparities with the present case. In particular, Civil Case No. 10-1120 involves a cause
of action arising from the contractual relations of GAl Delfin Lee and HDMF, which is
adjudged under the evidentiary threshold of preponderance of evidence. On the contrary,
this case (stemming from Criminal Case No. 18480) only seeks to determine whether
probable cause exists to file a criminal case in court against the accused. The ruling in the
former cannot be thus binding on the latter. At any rate, the ruling in Civil Case No. 10-
1120 was premised on the fact that the July 13, 2009 MOA supposedly superseded,
amended, and modified the provisions of the FCAs in that the power to approve the
housing applications had already been removed from GA and in turn, was relegated to
only loan counseling. Therefore, HDMF cannot renege on the performance of their
contract on the ground that the defaulting buyers were fictitious and spunous.

As previously stated, the MOA was executed on July 13, 2009, and at that time, GA had
already executed around nine (9) different FCAs with HDMF, with the latter having
released funds amounting to more or less P2.9 Billion for the purpose.[54] Thus, even prior
to the said amendment, the commission of fraud and the resulting damage to HDMF had,
in all reasonable likelihood, already existed, which, in turn, means that the crime
of estafa had already been probably consummated. The probable consummation of the
crime is not erased by the succeeding partial novation[55] of the contract between the
parties. Case law dictates that criminal liability for estafa is not affected by compromise
or novation of contract, for it is a public offense which must be prosecuted and punished
by the Government on its own motion even though complete reparation should have been
made of the damage suffered by the offended party.[56] A criminal offense is committed
against the People and the offended party may not waive or extinguish the criminal
liability that the law imposes for the commission of the offense.[57]

In light of the foregoing, the first element of syndicated estafa has been shown to be

present. Correlatively, as the estafa was allegedly committed by at least five (5)
individuals, there exists a "syndicate" within the purview of PD 1689, and thus, the
second element of syndicated estafa is likewise present. However, the third and last
element of syndicated estafa, as discussed by the ponencia,[58] is not present in this case.

As earlier stated, the third element of syndicated estafa is that the defraudation results in
the misappropriation of moneys contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)," or farmers' association, or of funds solicited by
corporations/associations from the general public. Essentially, the wide-scale
defraudation of the public through the use of corporations/associations is the gravamen of
syndicated estafa. This is clearly inferred from the "Whereas Clauses" of PD 1689 which
read:
WHEREAS, there is an upsurge in the commission of swindling and other forms of
frauds in rural banks, cooperatives, "samahang nayon(s)", and farmers' associations or
corporations/associations operating on funds solicited from the general public;

WHEREAS, such defraudation or misappropriation of funds contributed by stockholders

or members of such rural banks, cooperatives, "samahang nayon(s)", and farmers'
[association], or of funds solicited by corporations/associations from the general
public, erodes the confidence of the public in the banking and cooperative system,
contravenes the public interest, and constitutes economic sabotage that threatens the
stability of the nation;

WHEREAS, it is imperative that the resurgence of said crimes be checked, or at least

minimized, by imposing capital punishment on certain forms of swindling and other
frauds involving rural banks, cooperatives, "samahang nayon(s)", and farmers'
[association] or corporations/associations operating on funds solicited from the general
public[.][59]
After a careful study of this case, I find the third element to be lacking. Based on the
allegations of the complaint, it is apparent that the thrust thereof is respondents' purported
defraudation of HDMF which induced it to release funds. This is not a criminal case filed
by members of the general public, such as buyers of the Xevera Project, claiming that
rural banks, cooperatives, "samahang nayon(s)," and farmers' association or
corporations/associations solicited funds from them, but later on resulted into them being
defrauded. To be sure, the fact that the funds released by HDMF are in the nature of
public funds does not mean that syndicated estafa was committed. The operative factor is
whether or not the fraud was committed against the general public. On this point, the case
of Galvez v. CA[60] illumines, among others, that PD 1689 does not apply when,
regardless of the number of the accused, (a) the entity soliciting funds from the general
public is the victim and not the means through which the estafa is committed, or (b) the
offenders are not owners or employees who used the association to perpetrate the crime,
in which case, Article 315 (2) (a) of the Revised Penal Code applies:
In sum and substance and by precedential guidelines, we hold that, first, Presidential
Decree No. 1689 also covers commercial banks; second, to be within the ambit of the
Decree, the swindling must be committed through the association, the bank in this case,
which operate on funds solicited from the general public; third, when the number of the
accused are five or more, the crime is syndicated estafa under paragraph 1 of the
Decree; fourth, if the number of accused is less than five but the defining element of the
crime under the Decree is present, the second paragraph of the Decree applies; x x x fifth,
the Decree does not apply regardless of the number of the accused, when, (a) the
entity soliciting funds from the general public is the victim and not the means
through which the estafa is committed, or (b) the offenders are not owners or
employees who used the association to perpetrate the crime, in which case, Article
315 (2) (a) of the Revised Penal Code applies.[61]
In so far as this case is concerned, it is undoubted that the private complainant is HDMF;
not the general public who claim to have been defrauded through the use of any juridical
entity. Therefore, respondents cannot be indicted for syndicated estafa. Instead, they can
be indicted only for simple estafa under Article 315 (2) (a) of the RPC for the reasons
above explained.

Although the Information filed before the RTC and the consequent warrants of arrest
issued against respondents were for the crime of syndicated estafa, and not for
simple estafa, the case of Spouses Hao v. People[62] teaches that said issuances remain
valid but a formal amendment of the Information should be made:
With our conclusion that probable cause existed for the crime of simple estafa and that
the petitioners have probably committed it, it follows that the issuance of the warrants
of arrest against the petitioners remains to be valid and proper. To allow them to go
scot-free would defeat rather than promote the purpose of a warrant of arrest, which is to
put the accused in the court's custody to avoid his flight from the clutches of justice.

Moreover, we note that simple estafa and syndicated estafa are not two entirely different

crimes. Simple estafa is a crime necessarily included in syndicated estafa. An offense is
necessarily included in another offense when the essential ingredients of the former
constitute or form a part of those constituting the latter.

Under this legal situation, only a formal amendment of the filed information under
Section 14, Rule 110 of the Rules of Court is necessary; the warrants of arrest issued
against the petitioners should not be nullified since probable cause exists for
simple estafa.[63] (Emphases and underscoring supplied)
Accordingly, it is my position that respondents should instead be indicted for
simple estafa only. For this purpose, the DOJ should be directed to amend the
Information so as to charge respondents accordingly. Meanwhile, the warrants of arrest
issued against them must stand.

II.G.R. No. 209424.

The petition in G.R. No. 209424[64] was filed by HDMF against GA, Delfin Lee, and
respondent Tessie G. Wang (Wang; a purported fully-paid buyer of 22 houses and lots in
GA's Xevera Project)[65] assailing the CA's ruling[66] in CA-G.R. SP No. 128262. In the
said case, the CA upheld the Makati-RTC's January 30, 2012 Resolution[67] in Civil Case
No. 10-1120 granting the motion for summary judgment filed by GA, et al. and thereby,
ordered HDMF to comply with its obligations under the MOA, FCAs, and Collection
Servicing Agreements. Dissatisfied, HDMF filed a motion for reconsideration, [68] which
was, however, denied by the Makati-RTC in a December 11, 2012 Resolution [69] on the
ground that the same was filed by HDMF's engaged private counsel, Yorac Arroyo Chua
Caedo & Coronel Law Firm (Yorac Law), without, however, the requisite approval of the
Office of the Government Corporate Counsel (OGCC) and the Commission on Audit

(COA); hence, the RTC treated the motion as a mere scrap of paper which did not toll the
running of the period of appeal.[70] Consequently, HDMF filed a petition
for certiorari[71] before the CA, which was dismissed mainly on the following grounds:
(a) the certiorari petition is not the proper remedy, considering that the Makati-RTC's
ruling was in the nature of a final judgment and hence, subject to an ordinary appeal
under Rule 41 of the Rules of Court;[72] and (b) the Makati-RTC did not gravely abuse its
discretion in dismissing HDMF's motion for reconsideration as it failed to comply with
the rules, among others, the requisite authorization from the OGCC and the COA. [73]

In ruling for the grant of G.R. No. 209424, the ponencia prefatorily held that the
Resolution[74] dated January 30, 2012 of the Makati-RTC which granted summary
judgment in GA, et al.'s favor is, strictly speaking, only a partial summary judgment
rendered in the context of Section 4, Rule 35[75] of the Rules of Court. It then explained
that such Resolution only resolved the issue of whether or not GA, et al. were entitled to
specific performance, and explicitly stated that the issue on the proper amount of
damages to be awarded to them shall still be subject to a presentation of evidence. Since
there is still a matter to be resolved by the Makati-RTC, such Resolution partakes of the
nature of an interlocutory order. As such, HDMF correctly availed of the remedy of filing
a petition for certiorari before the CA.[76]

The ponencia further found that Yorac Law Firm failed to sufficiently prove that it had
the authority to represent HDMF in the proceedings before the Makati-RTC. In this
regard, it pointed out that since HDMF is a GOCC, it may only engage private counsels
with the written conformity of the Solicitor General or the Government Corporate
Counsel and the written concurrence of the COA. Unfortunately, however, Yorac Law
Firm was only able to provide a Certification[77] dated January 10, 2013 signed by the
Office of the Supervising Auditor, COA Corporate Auditor Atty. Fidela M. Tan (Atty.
Tan), stating that the COA purportedly authorized HDMF to engage Yorac Law Firm as
private counsel. According to the ponencia, this cannot be given evidentiary weight not
only because it is merely an attestation that the COA supposedly concurred in the
HDMF's retainer agreement with Yorac Law Firm, but also because it failed to comply
with Sections 24 and 25, Rule 132[78] of the Rules of Court.[79]

Finally, the ponencia recognized that since Yorac Law Firm was not authorized to appear
on behalf of HDMF before the Makati-RTC proceedings, the motion for reconsideration
it filed before such court did not toll the reglementary period for the filing of a petition
for certiorari before the CA. Ordinarily, such petition filed by HDMF before the CA
should be dismissed for being filed out of time. However, the ponencia held that in the
broader interest of justice, as well as the peculiar legal and equitable circumstances in this
case, the petition for certiorari before the CA should not be dismissed outright due to
strict adherence to technical rules of procedure, but must be resolved on its merits.
Hence, the ponencia ordered the remand of the case to the CA for the determination of
the propriety of the Makati-RTC's issuance of a partial summary judgment. [80]

While I concur with the ponencia insofar as it found that HDMF correctly availed of the
remedy of certiorari before the CA, I respectfully disagree with its ruling that Yorac Law
Firm had no authority to act as counsel on HDMF's behalf, and that the Makati-RTC must
be directed to conduct further proceedings in Civil Case No. 10-1120 with dispatch so
that the aggrieved party may appeal the Makati-RTC's issuance of a partial summary
judgment in said case.

The general rule is that GOCCs, such as HDMF, are enjoined to refrain from hiring
private lawyers or law firms to handle their cases and legal matters. However, in
exceptional cases, the written conformity and acquiescence of the Solicitor General or the
Government Corporate Counsel, as the case may be, and the written concurrence of the
COA shall first be secured before the hiring or employment of a private lawyer or law
firm.[81]

In this case, these written authorizations were complied with by HDMF. Records show
that Atty. Tan issued a Certification[82] that the COA concurred in the engagement by
HDMF of Yorac Law Firm as its private counsel.[83] The said certification is presumed to
have been issued by the said officer in the regular performance of her duties and hence,
should be deemed valid, absent any showing to the contrary. Besides, as pointed out by
one of the dissenting justices before the CA, if the Makati-RTC was uncertain about the
authority of private counsel to represent HDMF, "fairness and prudence dictate that the
[same] be given a chance to provide the form of proof acceptable to the
RTC,"[84] especially considering the public interest involved in this case. To note, records
show that the only party who objected to Yorac Law Firm's representation of HDMF was
respondent Wang, who filed a motion to expunge[85] on the sole ground of lack of COA
conformity. This motion was never resolved by the Makati-RTC,[86] hence, leaving
HDMF in the dark on the merits of the motion to expunge and on the necessity to submit
further proof of the COA's authorization. Meanwhile, anent the approval of the OGCC,
records disclose that the same was procured through the letters dated December 28,
2010[87] and December 5, 2011[88] signed by Government Corporate Counsel Raoul C.
Creencia.[89] In fine, it was grave error for the Makati-RTC to deny the HDMF's motion
for reconsideration.

In light of the foregoing submissions and under ordinary circumstances, court procedure
dictates that the case be remanded for a resolution on the merits. However, when there is
already enough basis on which a proper evaluation of the merits may be had - as in this
case, considering the copies of various pleadings and documents already in the
possession of the Court the Court may dispense with the time-consuming procedure of
remand in order to prevent further delays in the disposition of the case and to better serve
the ends of justice.[90] Thus, I hereby submit that the Court may already resolve the issue
of the propriety of the Makati-RTC 's issuance of a partial summary judgment in this
case.

Jurisprudence is clear that "[s]ummary judgment is not warranted when there are genuine
issues which call for a full blown trial. The party who moves for summary judgment has
the burden of demonstrating clearly the absence of any genuine issue of fact, or that the
issue posed in the complaint is patently unsubstantial so as not to constitute a genuine
issue for trial. Trial courts have limited authority to render summary judgments and may
do so only when there is clearly no genuine issue as to any material fact. When the facts
as pleaded by the parties are disputed or contested, proceedings for summary judgment
cannot take the place of trial."[91]

A perusal of the pleadings filed by the parties in Civil Case No. 10-1120 would show that
genuine issues of fact were raised,[92] and thus, negated the remedy of summary judgment.
As encapsulated in the dissent before the CA, these genuine issues are: (a) whether GA
was limited to conduct loan counseling instead of loan approval under the agreements;
(b) whether GA, in fact, conducted loan approvals instead of mere loan counseling; (c)
whether HDMF may buyback accounts despite the absence of a notice to buyback from
HDMF; (d) whether HDMF refused to release collectibles under the agreements; (e)
whether GA is guilty of fraud; (f) whether HDMF had factual basis to cancel the CSAs
and FCAs; and (g) whether GA's acts were constitutive of breach of its warranties under
the agreements.[93] Clearly, the Makati-RTC could not turn a blind eye on these triable
material factual issues by the mere expedient of saving that the Julv 13, 2009 MOA
superseded the provisions of the FCAs and thus, relegated GA's authoritv to mere loan
counseling, and therefore, rendered it unaccountable (or the defaulting buyers, who
turned out to be fictitious and spurious. Surely, the alleged shift of GA's authority to
mere loan counseling - assuming the same to be true still does not definitively settle the
foregoing issues and hence, cannot be the sole consideration to grant GA, et al.'s
complaint for specific performance.[94] As such, the Makati-RTC's rulings were evidently
tainted with grave abuse of discretion, and hence, correctly assailed by HDMF through a
petition for certiorari.

For these reasons, it is my view that since it is already apparent from the records that the
Makati-RTC erroneously rendered a partial summary judgment, it is but proper to order a
remand of the case to the same court for the conduct of trial on the merits.

III. G.R. Nos. 208744 and 210095.

To recount, the petition in G.R. No. 208744[95] was filed by the DOJ against Delfin Lee to
assail the CA's July 8, 2013[96] and August 14, 2013[97] Resolutions in CA-G.R. SP No.
130404 which essentially disallowed the DOJ's petition for certiorari for being filed out
of time. In this case, the DOJ sought to nullify the Order[98] dated April 10, 2013 of the
Regional Trial Court of Pasig City, Branch 167 (Pasig-RTC) in Civil Case No. 73115
enjoining the DOJ's preliminary investigation in the criminal cases entitled "National
Bureau of Investigation/Evelyn B. Niebres, et al. v. Globe Asiatique Realty Corp./Delfin
S. Lee, et al." (NPS Docket No. XVI-INV-10L-00363; Niebres Complaint), "National
Bureau of Investigation/Jennifer Gloria (Gloria), et al. v. Globe Asiatique Realty
Corp./Delfin S. Lee, et al. (NPS Docket No. XVI-INV-11B-00063), and National Bureau
of Investigation/Maria Fatima Kayona (Kayona), et al. v. Globe Asiatique Realty
Corp./Delfin S. Lee, et al." (NPS Docket No. XVI-INV-11C-00138) for
syndicated estafa.[99]

On the other hand, the petition in G.R. No. 210095[100] was filed by the DOJ also against
Delfin Lee to assail the CA's June 26, 2013[101] and November 11, 2013[102] Resolutions in
CA-G.R. SP No. 130409 which likewise dismissed the DOJ's petition for certiorari for
being filed out of time. The petition docketed as CA-G.R. SP No. 130409 is the same
petition as that in CA-G.R. SP No. 130404, which was its initial docket number. The
problem arose when the petition in CA-G.R. SP No. 130404 was filed by the DOJ
without indicating the proper docket number by inadvertence. This prompted the CA to
assign a new docket number to the petition, i.e., CA-G.R. SP No. 130409, and the raffling
thereof to another ponente and division.[103] Eventually, the petition was dismissed
outright for having been filed out of time.[104]

Verily, I agree with the ponencia's holding in G.R. Nos. 208744 and 210095, considering

that it is clear that the DOJ never intended to flout the rules nor employ any dilatory or
underhanded tactic as its failure to state the initial docket number to its certiorari petition
was by sheer inadvertence. As such, the CA should have relaxed the rules and allowed
the filing of said petition, following case law which states that "[l]apses in the literal
observance of a rule of procedure will be overlooked when they arose from an honest
mistake, [and] when they have not prejudiced the adverse party."[105]

More importantly, the Pasig-RTC gravely abused its discretion in enjoining[106] the

preliminary investigation of the aforesaid criminal cases mainly on the basis of Makati-
RTC's ruling in Civil Case No. 10-1120 - which, as already adverted to, should be subject
to re-evaluation. Clearly, the Pasig-RTC's reliance on such basis is misplaced because
such civil case involves a cause of action arising from the contractual relations of
GA/Delfin Lee and HDMF; whereas the preliminary investigation proceedings in the
aforementioned criminal cases seek to determine whether probable cause exists to file
criminal cases in court against the accused, this time based on the alleged double sales
fraudulently perpetrated against the home-buyers/private complainants Niebres, Gloria,
and Kayona, et al. Given the unmistakable variance in issues, and considering too that the
evidentiary thresholds applied in civil cases are different from criminal cases, the ruling
in the former would not be binding on the latter.

Thus, for these reasons, I agree with the ponencia's ruling that the April 10, 2013 writ of
preliminary injunction of the Pasig-RTC should be lifted and quashed. The conduct of
preliminary investigation in the three other (3) criminal complaints against Delfin Lee,
among others, docketed as NPS Docket No. XVI-INV-10L-00363, NPS Docket No.
XVI-INV-11B-00063, and NPS Docket No. XVI-INV-11C-00138 for
syndicated estafa should not have been enjoined. As such, the rulings of the Pasig-RTC
and the CA regarding this matter should be rectified.

CONCLUSION

In conclusion, I hereby vote as follows:

(a) The petitions in G.R. Nos. 205698, 205780, 209446, 209489, 209852, 210143, 228452,
228730, and 230680 should be PARTLY GRANTED. For the reasons discussed in this
Opinion, the public prosecutor should be DIRECTED to amend the Information in
Criminal Case No. 18480 so as to charge respondents Delfin S. Lee, Dexter L. Lee,
Christina Sagun, Cristina Salagan, and Atty. Alex M. Alvarez only for simple estafa, and
not syndicated estafa. Meanwhile, the warrants of arrest issued against them STAND;
(b) The petition in G.R. No. 209424 should be GRANTED. The Decision dated October 7,
2013 of the Court of Appeals (CA) in CA-G.R. SP No. 128262, affirming the Resolutions
dated January 30, 2012 and December 11, 2012 of the Regional Trial Court of Makati,
 Branch 58 (Makati-RTC) in Civil Case No. 10-1120, should be REVERSED and SET
ASIDE. A new one should be ENTERED directing the REMAND of the case to the
Makati-RTC for the conduct of a full-blown trial on the merits; and
(c) The petitions in G.R. Nos. 208744 and 210095 should be GRANTED. The Resolution
dated August 14, 2013 in CA-G.R. SP No. 130404 and the Resolution dated June 26, 2013
in CAG.R. SP No. 130409 of the CA, affirming the Resolution dated April 10, 2013 of the
Regional Trial Court of Pasig City, Branch 167 in Civil Case No. 73115, should
be REVERSED and SET ASIDE. Consequently, the April 10, 2013 writ of preliminary
injunction issued by the said court should be LIFTED and QUASHED. The Department of
Justice should be allowed to proceed with the preliminary investigation of the three (3)
criminal complaints against Delfin S. Lee, among others, docketed as NPS Docket No.
XVI-INV-10L-00363, NPS Docket No. XVI-INV-11B-00063, and NPS Docket No. XVI-
INV-11C-00138.

[1]
 Rollo (G.R. No. 205698), Vol. I, pp. 111-198.
[2]
 Rollo (G.R. No. 205780), Vol. I, pp. 8-82.
[3]
 See CA Decision dated October 5, 2012 and CA Resolution dated February 11, 2013,
both penned by Associate Justice Angelita A. Gacutan with Associate Justices Mariflor
Punzalan Castillo and Francisco P. Acosta concurring. Rollo (G.R. No. 205698), Vol. I,
pp. 24-57 and 59-74.
[4]
 Id. at 405-451. Penned by OIC, Senior Deputy State Prosecutor Theodore M.
Villanueva and approved by Prosecutor General Claro A. Arellano.
[5]
 Rollo (G.R. No. 209446), Vol. I, pp. 42-148.
[6]
 Rollo (G.R. No. 209489), Vol. I, pp. 36-150.
[7]
 Rollo (G.R. No. 209446), Vol. I, pp. 153-173. Penned by Associate Justice Edwin D.
Sorongon with Associate Justices Hakim S. Abdulwahid and Marlene Gonzales-Sison
concurring.
[8]
 Id. at 237-255. Penned by Judge Maria Amifaith S. Fider-Reyes.
[9]
 This resolves the motion for reconsideration of Alvarez only. Id. at 256-260.
[10]
 Rollo (G.R. No. 209852), Vol. I, pp. 45-135.
[11]
 Rollo (G.R. No. 210143), Vol. I, pp. 49-161.
[12]
 See CA Decision dated November 7, 2013 penned by Associate Justice Franchito N.
Diamante with Associate Justices Agnes Reyes Carpio and Melchor Q. C. Sadang
concurring. Rollo (G.R. No. 209852), Vol. I, pp. 192-220.
[13]
 Id. at 254-272.
[14]
 This resolves the motions of Delfin Lee and Dexter Lee. Id. at 273-285.
[15]
 Rollo (G.R. No. 228452), Vol. I, pp. 3-120.
[16]
 Rollo (G.R. No. 228730), Vol. I, pp. 36-148.
[17]
 See CA Decision dated November 16, 2016 penned by Associate Justice Ramon Paul
L. Hernando with Associate Justices Jose C. Reyes, Jr. and Stephen C. Cruz
concurring. Rollo (G.R. No. 228452), Vol. I, pp. 144-164.
[18]
 Id. at 209-227 and 228-240.
[19]
 Rollo (G.R. No. 230680) Vol. I, pp. 3-92.
[20]
 Id. at 343-369. Penned by Associate Justice Ramon A. Cruz with Associate Justices
Rodil V. Zalameda and Henri Jean Paul B. Inting concurring.
[21]
 Id. at 370-372.
[22]
 Id. at 114-132.
[23]
 See id. at 22.
[24]
 The Complaint-Affidavit dated October 29, 2010 was filed by the Officer-in-Charge
of HDMF, Emma Linda B. Farria; rollo (G.R. No. 205698), Vol. I, pp. 339-350.
[25]
 Entitled "INCREASING THE PENALTY FOR CERTAIN FORMS OF SWINDLING
OR ESTAFA" (April 6, 1980).
[26]
 See preliminary investigation report dated October 29, 2010; rollo (G.R. No. 205698),
Vol. I, pp. 330-338.
[27]
 See report dated December 10, 2010; id. at 400-404.
[28]
 See rollo (G.R. No. 205698), Vol. II, p. 613.
[29]
 See id.
[30]
 See id. at 614.
[31]
 Rollo (G.R. No. 205698), Vol. I, p. 407.
[32]
 Id. at 428.
[33]
 Id. at 405-451.
[34]
 See id. at 414.
[35]
 Dated July 13, 2009. Rollo (G.R. No. 205698), Vol. IV, pp. 2055-2060.
[36]
 See rollo (G.R. No. 205698), Vol. I, pp. 436-441.
[37]
 Dated August 25, 2011. Rollo (G.R. No. 205698), Vol. II, pp. 612-616.
[38]
 Docketed as Criminal Case No. 18480.
[39]
 Rollo (G.R. No. 209466), Vol. I, pp. 237-255.
[40]
 See ponencia, pp. 43-44.
[41]
 See id. at 36-40.
[42]
 The procedural flaws in the petitions filed by Sagun, Delfin Lee, Dexter Lee, and
Alvarez in G.R. Nos. 205698, 205780, 209446, 209489, 209852, 210143, 228452,
228730, and 230680 have been adequately addressed by Senior Associate Justice Antonio
T. Carpio in his Dissenting Opinion (see pp. 14-23), which discussion I fully subscribe to.
[43]
 People v. Tibayan, 750 Phil. 910, 919 (2015), citing People v. Chua, 695 Phil. 16, 32
(2012).
[44]
 Id. at 269, citing Galvez v. CA, 704 Phil. 463, 472 (2013).
[45]
 Galvez v. CA, id. at 470; citation omitted.
[46]
 Entitled "AN ACT FURTHER STRENGTHENING THE HOME DEVELOPMENT
MUTUAL FUND, AND FOR OTHER PURPOSES," approved on July 21, 2009.
[47]
 Bustillo v. People, 634 Phil. 547, 556 (2010).
[48]
 See Section 3 (c) of the July 13, 2009 MOA; rollo (G.R. No. 205698), Vol. IV, p.
2057.
[49]
 See RA 9679.
[50]
 China Banking Corp. v. Commission of Internal Revenue, G.R. No. 172509, February
4, 2015, 749 SCRA 525, 539.
[51]
 People v. Gerero, G.R. No. 213601, July 27, 2016, 798 SCRA 702, 707, citing Quidet
v. People, 632 Phil. 1, 11-12 (2010).
[52]
 Ong v. CA, 449 Phil. 691, 710 (2003); emphasis and underscoring supplied.
[53]
 See Shu v. Dee, 734 Phil. 204, 216-217 (2014).
[54]
 See rollo (G.R. No. 205698), Vol. I, p. 414.
[55]
 "[T]he effect of novation may be partial or total. There is partial novation when there
is only a modification or change in some principal conditions of the obligation. It is total,
when the obligation is completely extinguished." (Ong v. Bogñalbal, 533 Phil. 139, 156
[2006]).
[56]
 See Metropolitan Bank and Trust Company v. Reynando, 641 Phil. 208, 220 (2010).
[57]
 People v. Gervacio, 102 Phil. 687, 688 (1957).
[58]
 See ponencia, pp. 36-39.
[59]
 Emphases and underscoring supplied.
[60]
 See supra note 44.
[61]
 Id. at 474-475; citations omitted, emphasis and underscoring supplied.
[62]
 743 Phil. 204 (2014).
[63]
 Id. at 219-220; citations omitted.
[64]
 Rollo (G.R. No. 209424), Vol. I, pp. 143-283.
[65]
 See id. at 299.
[66]
 See Decision dated October 7, 2013, penned by Associate Justice Stephen C. Cruz (id.
at 14-34). Associate Justices Elihu A. Ybañez and Danton Q. Bueser issued their
respective Separate Concurring Opinions (id. at 37-40 and 35-36); while Associate
Justices Magdangal M. De Leon and Myra V. Garcia-Fernandez issued separate
Dissenting Opinions (id. at 41-63 and 64-68).
[67]
 Rollo (G.R. No. 209424), Vol. II, pp. 433-452. Rollo (G.R. No. 209852), Vol. I, pp.
296-315. Penned by Presiding Judge Eugene C. Paras.
[68]
 Dated February 24, 2012. Rollo (G.R. No. 209424), Vol. III, pp. 1264-1296.
[69]
 Rollo (G.R. No. 209424), Vol. II, pp. 453-459.
[70]
 See id. at 455-457.
[71]
 Dated January 14, 2013. Rollo (G.R. No. 209424), Vol. I, pp. 347-431.
[72]
 See id. at 306-308 and 311.
[73]
 See id. at 310.
[74]
 Rollo (G.R. No. 209424), Vol. II, pp. 433-452. Rollo (G.R. No. 209852), Vol. I, pp.
296-315. Penned by Presiding Judge Eugene C. Paras.
[75]
 Section 4, Rule 35 of the Rules of Court reads:
Section 4. Case not fully adjudicated on motion. - If on motion under this Rule, judgment
is not rendered upon the whole case or for all the reliefs sought and a trial is necessary,
the court at the hearing of the motion, by examining the pleadings and the evidence
before it and by interrogating counsel shall ascertain what material facts exist without
substantial controversy and what are actually and in good faith controverted. It shall
thereupon make an order specifying the facts that appear without substantial controversy,
including the extent to which the amount of damages or other relief is not in controversy,
and directing such further proceedings in the action as are just. The facts so specified
shall be deemed established, and the trial shall be conducted on the controverted facts
accordingly.
[76]
 See ponencia, pp. 23-27.
[77]
 Rollo (G.R. No. 209424), Vol. IV., p. 1493.
[78]
 Sections 24 and 25, Rule 132 of the Rules of Court read:
Section 24. Proof of official record. - The record of public documents referred to in
paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the officer having the legal custody of
the record, or by his deputy, and accompanied, if the record is not kept in the Philippines,
with a certificate that such officer has the custody. If the office in which the record is kept
is in foreign country, the certificate may be made by a secretary of the embassy or
legation, consul-general, consul, vice-consul, or consular agent or by any officer in the
foreign service of the Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office.

Section 25. What attestation of copy must state. - Whenever a copy of a document or

record is attested for the purpose of the evidence, the attestation must state, in substance,
that the copy is a correct copy of the original, or a specific part thereof, as the case may
be. The attestation must be under the official seal of the attesting officer, if there be any,
or if he be the clerk of a court having a seal, under the seal of such court.
[79]
 See ponencia, pp. 28-31.
[80]
 See id. at 31-32 and 49.
[81]
 See PHIVIDEC Industrial Authority v. Capitol Steel Corporation, 460 Phil. 493, 503
(2003), citing Memorandum Circular No. 9 dated August 27, 1998.
[82]
 Rollo (G.R. No. 209424), Vol. IV, p. 1493.
[83]
 Pertinent portions of the January 10, 2013 Certification read:
This is to certify that the Commission on Audit (COA), has concurred in the Retainer
Agreement entered into by and between the Home Development Mutual Fund (HDMF)
and Yorac, Arroyo, Chua, Caedo & Coronel Law Firm, for the latter to provide legal
services to the HDMF in connection the cases filed by or against Globe Asiatique Realty
Holdings Corporation, Mr. Delfin S. Lee, its officers, employees and agents and such
other cases that arose out of or in relation to the Globe Asiatique Realty Holdings
Corporation issues.

This certification is issued to attest to the truth of the foregoing and for whatever legal
purposes it may serve. (Id.)
[84]
 Rollo (G.R. No. 209424), Vol. I, p. 51.
[85]
 Dated December 9, 2011. Rollo (G.R. No. 209424), Vol. III, pp. 1214-1224.
[86]
 Rollo (G.R. No. 209424), Vol. I, p. 206.
[87]
 Rollo (G.R. No. 209424), Vol. III, pp. 1494-1495.
[88]
 Id. at 1496-1497.
[89]
 See id at 1494 and 1496. Pertinent portions of the December 28, 2010 and December
5, 2011 letters read:
December 28, 2010 letter
This refers to your request for authority to engage the services of external counsel who
will handle the cases filed by or against the Globe Asiatique Holdings Corp.

In view thereof, and pursuant to Office of the Government Corporate Counsel (OGCC)
Memorandum Circular I, Series of2002 in conjunction with Republic Act 3838 and
Memorandum Circular 9 dated August 29, 1998, Home Development Mutual Fund
(HDMF) is hereby authorized to engage the services of x x x Yorac Arroyo Chua Caedo
& Coronel Law Firm to handle the aforesaid cases, subject to the control and supervision
of the OGCC.

December 5, 2011 letter

This confirms and ratifies the engagement of external counsel for the handling of the
cases filed by or against the Globe Asiatique Holding Corporation, and such other cases
that arose out of or in relation to the Globe Asiatique Corporation Issues.

In view thereof, and pursuant to the Office's Memorandum Circular I, Series of 2002 in
conjunction with Republic Act 3838 and Memorandum Circular 9 dated 29 August 1998,
we confirm and ratify the engagement of Yorac Arroyo Chua Caedo & Coronel Law
Firm to handle such cases and the submissions of the law firm in connection therewith,
subject to the control and supervision of the OGCC.
[90]
 See Jolo's Kiddie Cars/Fun4Kids/Marlo U. Cabili v. Caballa, G.R. No. 230682,
November 29, 2017, citing Sy-Vargas v. The Estate of Rolando Ogsos, Sr., G.R. No.
221062, October 5, 2016, 805 SCRA 438, 448.
[91]
 Nocom v. Camerino, 598 Phil. 214, 233-234 (2009).
[92]
 See rollo (G.R. No. 209424), Vol. I, pp. 56-59.
[93]
 See Dissenting Opinion of CA Justice Magdangal M. De Leon; id. at 59.
[94]
 Dated November 13, 2010. Rollo (G.R. No. 209424), Vol. II, pp. 753-774.
[95]
 Rollo (G.R. No. 208744). Vol. I, pp. 28-87.
[96]
 See CA Minute Resolution issued by Executive Clerk of Court III Caroline G.
Ocampo-Peralta, MNSA; id. at 122.
[97]
 Id. at 118-121. Penned by Associate Justice Francisco P. Acosta with Associate
Justices Fernanda Lampas Peralta and Angelita A. Gacutan concurring.
[98]
 Id. at 195-198. Penned by Judge Rolando G. Mislang.
[99]
 See id. at 33.
[100]
 Rollo (G.R. No. 210095). Vol. I, pp. 35-131.
[101]
 Id. at 136-137. Penned by Associate Justice Amelita G. Tolentino with Associate
Justices Ramon R. Garcia and Danton Q. Bueser concurring.
[102]
 Id. at 139-142.
[103]
 See id. at 139-140.
[104]
 Id. at 137.
[105]
 Aguam v. CA, 388 Phil. 587, 595 (2000).
[106]
 While case law in Samson v. Guingona (401 Phil. 167, 172 [2000]) provides that
criminal cases may be enjoined in the following instances: (1) when the injunction is
necessary to afford adequate protection to the constitutional rights of the accused; (2)
when it is necessary for the orderly administration of justice or to avoid oppression or
multiplicity of actions; (3) when there is a prejudicial question which is subjudice; (4)
when the acts of the officer are without or in excess of authority; (5) where the
prosecution is under an invalid law, ordinance or regulation; (6) when double jeopardy is
clearly apparent; (7) where the Court has no jurisdiction over the offense; (8) where it is a
case of persecution rather than prosecution; (9) where the charges are manifestly false
and motivated by the lust for vengeance; and (10) when there is clearly no prima
facie case against the accused and a motion to quash on that ground has been denied;
none of these are applicable in the instant case.

DISSENTING OPINION

LEONEN, J.:

I join Senior Associate Justice Antonio T. Carpio in his dissent. I write separately to
contribute to a more exhaustive understanding of syndicated estafa as defined by
Presidential Decree No. 1689.

There was probable cause to file informations for syndicated estafa and to issue

corresponding warrants of arrest against Delfin S. Lee (Delfin), Dexter L. Lee (Dexter),
Christina Sagun (Sagun), Cristina Salagan (Salagan), and Atty. Alex M. Alvarez (Atty.
Alvarez). Hence, it was error for the Court of Appeals to set aside the August 10, 2011
Review Resolution of the Department of Justice, to annul and set aside the May 22, 2012
and August 22, 2012 Resolutions penned by Judge Ma. Amifaith S. Fider-Reyes (Judge
Fider-Reyes) of Branch 42, Regional Trial Court, San Fernando City, Pampanga in
Criminal Case No. 18480, and, lastly, to lift, quash, and recall the warrants of arrest
issued pursuant to Judge Fider-Reyes' resolutions.

I take exception to the ponencia's emphasis on the number of individuals who can be

charged and how this number is supposedly determinative of the offense committed by
Delfin, Dexter, Sagun, and Salagan. The ponencia explains how Atty. Alvarez should
supposedly be excluded from the charge of estafa,[1] as "his act of notarizing various
documents, . . . that were material for the processing and approval of the transactions,
was insufficient to establish his having been part of the
conspiracy."[2] The ponencia notes that with Atty. Alvarez's exclusion, only four (4)
individuals remain to be charged. It maintains that a case for syndicated estafa may not be
prosecuted considering that those who remain could not be considered as a syndicate. [3]

Articles 315 and 316 of the Revised Penal Code penalize estafa and other forms of
swindling, respectively.[4] Presidential Decree No. 1689 deals with heavier penalties when
the acts penalized by Articles 315 and 316 are "committed by a syndicate":
Section 1. Any person or persons who shall commit estafa or other forms of swindling as
defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished
by life imprisonment to death if the swindling (estafa) is committed by a syndicate
consisting of five or more persons formed with the intention of carrying out the unlawful
or illegal act, transaction, enterprise or scheme, and the defraudation results in the
misappropriation of money contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)", or farmers' association, or of funds solicited by
corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall be
reclusion temporal to reclusion perpetua if the amount of the fraud exceeds 100,000
pesos.[5]
Thus, syndicated estafa exists if the following elements are present:
1) [E]stafa or other forms of swindling as defined in Articles 315 and 316 of the [Revised
Penal Code] was committed; 2) the estafa or swindling was committed by a syndicate of
five or more persons; and 3) the fraud resulted in the misappropriation of moneys
contributed by stockholders, or members of rural banks, cooperatives, "samahang
nayon[s]," or farmers associations or of funds solicited by corporations/associations from
the general public.[6]
The recital of elements demonstrates that two (2) additional elements qualify swindling
into syndicated estafa. The first is "commi[ssion] by a syndicate." The second is
misappropriation. The object of this misappropriation, in turn, can be either of two (2)
categories of funds. The first category is "moneys contributed by stockholders, or
members of rural banks, cooperatives, 'samahang nayon(s)', or farmers['] associations."
The second category is "funds solicited by corporations/associations from the general
public."

Concerning the first additional element of "commi[ssion] by a syndicate," Section 1 of

Presidential Decree No. 1689 proceeds to identify when a syndicate exists. There is a
syndicate when there is a collective of five (5) or more individuals, the intent of which is
the "carrying out [of] the unlawful or illegal act, transaction, enterprise or scheme."

While Section 1 specifies a minimum number of individuals acting out of a common

design to defraud so that a syndicate may be deemed to exist, it does not specify the
number of individuals who must be charged for syndicated estafa at any given time. At
no point does Section 1 require a minimum of five (5) individuals to stand trial for
syndicated estafa. Likewise, it does not state that, failing in any such threshold,
prosecution cannot prosper.

Indeed, contingencies may make it so that even if five (5) or more individuals acted in
concert to defraud, not everyone involved in the common scheme can stand trial. While
some may have been brought into custody, others may remain at large. Some individuals
who were part of the scheme may have predeceased the institution of a criminal action.
Likewise, some conspirators may remain unidentified even when acts attributable to them
have been pinpointed. Exigencies such as these cannot frustrate prosecution under
Presidential Decree No. 1689. To hold otherwise would be to render Presidential Decree
No. 1689 impotent. Prosecution can then be conveniently undermined by a numerical
lacuna that is not the essence of an offense otherwise demonstrably committed.

What is critical is not the number of individuals actually available for or identified to
stand trial, but a showing that a deceit mentioned in Articles 315 and/or 316 of the
Revised Penal Code was committed by five (5) or more individuals acting in concert. For
as long as this is shown, coupled with the requisite misappropriation, prosecution and
conviction can proceed.

The primary task of investigators and prosecutors, then, is to demonstrate the fraudulent
scheme employed by five (5) or more individuals. Once this is established, it is their task
to demonstrate how an individual accused took part in effecting that scheme. When an
individual's participation is ascertained, he or she may be penalized for
syndicated estafa independently of his or her collaborators. Thus, an information may
conceivably be brought against even just a single individual for as long that information
makes averments on the scheme perpetrated by that person with at least four (4) other
collaborators, as well as the nature of that person's participation in the scheme.

It is also not essential that an accused be formally named or identified as an affiliate such
as by being a director, trustee, officer, stockholder, employee, functionary, member, or
associate of the corporation or association used as an artifice for the fraudulent scheme.
As with the inordinate fixation on the number of individuals being prosecuted, insisting
on such an affiliation can also conveniently frustrate the ends of justice. A cabal of
scammers can then nominally exclude one (1) of their ilk from their organized vehicle
and already be beyond Presidential Decree No. 1689's reach, regardless of the excluded
collaborator's actual participation in their fraudulent designs.

Presidential Decree No. 1689 contemplates not only corporations but also associations as
avenues for misappropriation. Affiliation with corporations whether as a director, trustee,
officer, stockholder, or member is carefully delineated by law. In contrast, associations
and affiliations with them are amorphous. Any number of individuals can organize
themselves into a collective. Their very act of coming together with an understanding to
pursue a shared purpose suffices to make them an association. A regulatory body's
official recognition of their juridical existence and their collective's competence to act as
its own person is irrelevant.

Presidential Decree No. 1689's similar treatment of associations with corporations rebuffs
the need for an accused's formally designated relationship with the organization which
was used to facilitate the fraudulent scheme. The statutory inclusion of the term
"association," which is without a specific restrictive legal definition unlike the term
"corporation," manifests the law's intent to make as inclusive as practicable its
application. It exhibits the law's intent to not otherwise be strangled by prohibitive
technicalities on organizational membership.

II

Senior Associate Justice Carpio's dissent details how Atty. Alvarez should not be
considered a mere notary public so detached from the fraudulent scheme that is subject of
these consolidated petitions. Indeed, it would be foolhardy to discount the gravity of the
offense committed by dwelling on Atty. Alvarez's nominal lack of "relat[ion] to Globe
Asiatique either by employment or by ownership."[7]

The ponencia acknowledges that Atty. Alvarez was not affiliated with Globe Asiatique
Realty Holdings Corporation (Globe Asiatique) as he was Home Development Mutual
Fund's employee and not Globe Asiatique's employee or stockholder. Specifically, he was
the Manager of Home Development Mutual Fund's Foreclosure Department.[8] As Senior
Associate Justice Carpio emphasizes, Atty. Alvarez's position at Home Development
Mutual Fund and his simultaneous "moonlighting as head of the legal department of
Globe Asiatique,"[9] at whose headquarters he even held office, incriminates, rather than
exonerates, him.

Evidently, with his continuing employment at Home Development Mutual Fund, Atty.
Alvarez could not be simultaneously employed by Globe Asiatique, let alone be formally
declared the head of its legal department. This anomaly should not frustrate his liability
alongside Delfin, Dexter, Sagun, and Salagan. If at all, it should aggravate his liability
because knowing fully well that he was in no position to render services for Globe
Asiatique, and that doing so amounted to a conflict of interest, Atty. Alvarez went ahead
and did so anyway. His knowing notarization of documents concerning mortgages which
he may himself foreclose shows malicious intent. Worse, his services for Globe Asiatique
did not amount to innocuous, run of the mill tasks but were an integral component of the
overarching fraudulent scheme. In Senior Associate Justice Carpio's words:
Any agreement between Globe Asiatique and HDMF would not have materialized if it
were not for Globe Asiatique's submission of mortgage documents notarized by Atty.
Alvarez. Atty. Alvarez's participation in the entire scheme was a crucial and necessary
step in Globe Asiatique's inducement of HDMF to release the loan proceeds to Globe
Asiatique.[10]
The ponencia's emphasis on how Atty. Alvarez should be segregated from Delfin,
Dexter, Sagun, and Salagan is misplaced. His circumstances should not be used to reduce
the persons accused to a number short of the threshold maintained by the ponencia. The
absurdity of Atty. Alvarez's personal condition cannot conveniently deter prosecution for
syndicated estafa.

III

Granting that Atty. Alvarez cannot be held liable as an integral cog to the uncovered
fraudulent apparatus, his exclusion does not ipso facto negate the existence of a syndicate
of at least five (5) individuals who worked to carry out an illegal scheme through which
funds solicited from the general public were misappropriated. Even Atty. Alvarez's
hypothetical exclusion does not negate syndicated estafa.

The fraudulent scheme uncovered in this case did not merely involve Delfin, Dexter,
Sagun, Salagan, and Atty. Alvarez. A defining feature of the scheme was the use of
"special buyers" who were induced by a fee to enlist for a Home Development Mutual
Fund membership and then to lend their names and memberships to Globe Asiatique. It
was Globe Asiatique's use of these spurious members' names and memberships which
enabled it to siphon funds from Home Development Mutual Fund through fund releases
by way of take-out of the special buyers' supposed housing loans.[11]

Such an elaborate machination could not have been exclusively carried out by four (4)
individuals. The plot's basic design demanded the involvement of persons other than
Delfin and Dexter and high-level executives Sagun and Salagan. At the lowest rungs of
the mechanism to effect the plot to involve special buyers were agents who recruited,
paid, and induced each of the special buyers to enlist for Home Development Mutual
Fund membership, and to allow their names and memberships to be used. At an
intermediate level were officers who oversaw the operational aspects of the scheme.
Apart from the plot's basic configuration, the sheer scale to which it appears to have been
effected also belies the exclusive involvement of four (4) individuals. As the information
subject of Criminal Case No. 18480 underscored, "644 borrowers endorsed by [Globe
Asiatique] are not genuine buyers of Xevera [H]omes while 802 are nowhere to be found;
3 buyers are already deceased; and 275 were not around during the visit, hence,
establishing that all of them are fictitious buyers."[12] The carrying out of the scheme was
simply too broad to have merely been the result of four (4) persons' exclusive handiwork.

The fraudulent scheme where at least five (5) individuals collaborated is clear to see.
Atty. Alvarez's convenient dislocation from the ranks of Globe Asiatique's employees is
too far-fetched to be indulged. But even if he were to be excluded, the operation of a
fraudulent syndicate cannot be discounted. This Court should not render itself blind and
condone a miscarriage of justice merely on account of a numerical artifice. Five (5)
persons accused, minus one (1) absurdly discharged, do not erase the elaborate stratagem
by a syndicate wherein Delfin, Dexter, Sagun, and Salagan are, thus far, the ones
identified to have been on top, but which also indispensably involved many others.

IV

I also cannot agree to the assertion that there could not be syndicated estafa because "the
association of respondents did not solicit funds from the general public"[13] and that "it
was . . . not Globe Asiatique, that solicited funds from the public."[14]

The ponencia reasons that it was not Globe Asiatique but Home Development Mutual
Fund that solicited funds from the pub1ic.[15] It adds that "[t]he funds solicited by [Home
Development Mutual Fund] from the public were in the nature of their contributions as
members of [Home Development Mutual Fund], and had nothing to do with their being a
stockholder or member of Globe Asiatique."[16] Thus, "the funds supposedly
misappropriated did not belong to Globe Asiatique's stockholders or members, or to the
general public, but to [Home Development Mutual Fund]."[17]

The ponencia overemphasizes the technicality of Home Development Mutual Fund's

separate and distinct juridical personality at the expense of a proper appreciation of the
gravity of the offense involved.

Republic Act No. 9679, or the Home Development Mutual Fund Law of 2009,
emphasizes the "provident character" of the Home Development Mutual Fund, thus:
Section 10. Provident Character. - The Fund shall be private in character, owned wholly
by the members, administered in trust and applied exclusively for their benefit. All the
personal and employer contributions shall be fully credited to each member, accounted
for individually and transferable in case of change of employment. They shall earn
dividends as may be provided for in the implementing rules. The said amounts shall
constitute the provident fund of each member, to be paid to him, his estate or
beneficiaries upon termination of membership, or from which peripheral benefits for the
member may be drawn.
As a provident fund, Home Development Mutual Fund relies on the required remittance
of savings by its members. Membership is either mandated or voluntary. Its mandated
membership consists of all private individuals covered by the Social Security System, all
public employees covered by the Government Service Insurance System, uniformed
personnel in the Armed Forces of the Philippines, the Philippine National Police, the
Bureau of Jail Management and Penology, the Bureau of Fire Protection, and all Filipinos
employed by foreign employers regardless of their place of deployment.[18] Voluntary
membership is open to Filipinos aged 18 to 65.[19]

It is true that Home Development Mutual Fund has a personality distinct and separate
from its members and exercises competencies independently of them. However,
considering its provident character and its membership base, it is incorrect to say that the
misappropriated funds in this case are Home Development Mutual Fund's alone and not
the general public's. By Republic Act No. 9679's express language and Home
Development Mutual Fund's membership base, that is, practically the same as the general
public, it is erroneous to insulate Globe Asiatique from the general public by
hyperbolizing Home Development Mutual Fund's role as an intervening layer between
them.

In asserting that Glebe Asiatique neither solicited funds from the general public nor
committed misappropriation, the ponencia similarly fails to account for how Globe
Asiatique used and manipulated Home Development Mutual Fund. While it is true that
the funds collected, and eventually misappropriated, from Home Development Mutual
Fund members were in the nature of their contributions which did not accrue to Globe
Asiatique, the essence of the fraudulent scheme was that Globe Asiatique used Home
Development Mutual Fund as a medium for its pilferage.

The fraudulent scheme could not have been effected had Globe Asiatique not been
enabled to act for and on behalf of Home Development Mutual Fund. The ponencia's
own recital of facts acknowledges that under the Funding Commitment Agreements,
Globe Asiatique pre-processed housing loans and even collected monthly amortizations
on the loans obtained by its buyers.[20] Under its special buyers scheme, it even enticed
non-members of Home Development Mutual Fund to avail of its membership.

Globe Asiatique's commission by Home Development Mutual Fund is precisely what

enabled its fraudulent scheme. The machination of Delfin and his compatriots turned on
Globe Asiatique's delegation to act for Home Development Mutual Fund.
The ponencia ignores this devious agency and insists on Home Development Mutual
Fund's distinct identity. As with its emphasis on the number of individuals charged, it
again places a primacy on technicality at the expense of the essence of Presidential
Decree No. 1689. Such disregard compels me to differ from its conclusions on the
existence of probable cause to indict for syndicated estafa and to issue corresponding
warrants of arrest for Delfin S. Lee, Dexter L. Lee, Christina Sagun, Cristina Sa1agan,
and Atty. Alex M. Alvarez.

ACCORDINGLY, I vote to GRANT the petitions subject of G.R. Nos. 205698, 205780,
209446, 209489, 209852, 210143, 228452, and 228730.

The October 5, 2012 Decision and February 11, 2013 Resolution of the Court of Appeals
in CA-G.R. SP No. 121346, the October 3, 2013 Decision of the Court of Appeals in CA-
G.R. SP No. 127690, the November 7, 2013 Decision of the Court of Appeals in CA-
G.R. SP No. 127553, and the November 16, 2016 Decision of the Court of Appeals in
CA-G.R. SP No. 127554 must be REVERSED.

The warrants of arrest issued by Branch 42, Regional Trial Court, San Fernando City,
Pampanga against Christina Sagun, Delfin S. Lee, Dexter L. Lee, and Atty. Alex Alvarez
must be REINSTATED.

[1]
 Ponencia, p. 38 and 44-45.
[2]
 Id. at 44.
[3]
 Id. at 36-40.
[4]
 REV. PEN. CODE, arts. 315 and 316.

Article 315. Swindling (estafa). - Any person who shall defraud another by any of the
means mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years.
In such cases, and in connection with the accessory penalties which may be imposed and
for the purpose of the other provisions of this Code, the penalty shall be termed prision
mayor or reclusion temporal, as the case may be.

2nd. The penalty of prision correccional in its minimum and medium periods, if the
amount of the fraud is over 6,000 pesos but does not exceed 12,000 pesos;

3rd. The penalty of arresto mayor in its maximum period to prision correccional in its
minimum period, if such amount is over 200 pesos but does not exceed 6,000 pesos; and
4th. By arresto mayor in its medium and maximum periods, if such amount does not
exceed 200 pesos, provided that in the four cases mentioned, the fraud be committed by
any of the following means:

1. With unfaithfulness or abuse of confidence, namely:

(a) By altering the substance, quantity, or quality of anything of value which the offender shall
deliver by virtue of an obligation to do so, even though such obligation be based on an
immoral or illegal consideration.
(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.
(c) By taking undue advantage of the signature of the offended party in blank, and by writing
any document above such signature in blank, to the prejudice of the offended party or any
third person.

2.
3. By means of any of the following false pretenses or fraudulent acts executed prior
to or simultaneously with the commission of the fraud:

(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.
(b) By altering the quality, fineness or weight of anything pertaining to his art or business.
(c) By pretending to have bribed any Government employee, without prejudice to the action for
calumny which the offended party may deem proper to bring against the offender. In this
case, the offender shall be punished by the maximum period of the penalty.
(d) By postdating a check, or issuing a check in payment of an obligation when the offender
had no funds in the bank, or his funds deposited therein were not sufficient to cover the
amount of the check. The failure of the drawer of the check to deposit the amount necessary
to cover his check within three (3) days from receipt of notice from the bank and/or the
payee or holder that said check has been dishonored for lack or insufficiency of funds shall
be prima facie evidence of deceit constituting false pretense or fraudulent act. (As amended
by R.A. 4885, approved June 17, 1967.)
(e) By obtaining any food, refreshment or accommodation at a hotel, inn, restaurant, boarding
house, lodging house, or apartment house and the like, without paying therefor, with intent
to defraud the proprietor or manager thereof, or by obtaining credit at a hotel, inn,
restaurant, boarding house, lodging house or apartment house by the use of any false
pretense, or by abandoning or surreptitiously removing any part of his baggage from a hotel,
inn, restaurant, boarding house, lodging house, or apartment house after obtaining credit,
food, refreshment, or accommodation therein without paying for his food, refreshment or
accommodation. (As amended by Com. Act No. 157, enacted November 9, 1936.)
 4.
5. Through any of the following fraudulent means:

(a) By inducing another, by means of deceit, to sign any document.

(b) By resorting to some fraudulent practice to insure success in a gambling game.
(c) By removing, concealing or destroying, in whole or in part, any court record, office files,
document or any other papers.
Article 316. Other forms of swindling. - The penalty of arresto mayor in its minimum
and medium periods and a file of not less than the value of the damage caused and not
more than three times such value, shall be imposed upon:

1. Any person who, pretending to be the owner of any real property, shall convey,
sell, encumber or mortgage the same.

2. Any person who, knowing that real property is encumbered, shall dispose of the
same, although such encumbrance be not recorded.

3. The owner of any personal property who shall wrongfully take it from its lawful
possessor, to the prejudice of the latter or any third person.

4. Any person who, to the prejudice of another, shall execute any fictitious contract.

5. Any person who shall accept any compensation given him under the belief that it
was in payment of services rendered or labor performed by him, when in fact he
did not actually perform such services or labor.

6. Any person who, while being a surety in a bond given in a criminal or civil action,
without express authority from the court or before the cancellation of his bond or
before being relieved from the obligation contracted by him, shall sell, mortgage,
or, in any other manner, encumber the real property or properties with which he
guaranteed the fulfillment of such obligation.
[5]
 Pres. Decree No. 1689 (1980), sec. 1.
[6]
 Belita v. Sy, 788 Phil. 580, 589 (2016) [Per J. Perez, Third Division], citing Hao v.
People, 743 Phil. 204 [Per J. Brion, Second Division].
[7]
 Ponencia, p. 38.
[8]
 Id.
[9]
 Dissenting Opinion, J. Carpio, p. 27.
[10]
 Id.
[11]
 Ponencia, pp. 11-13.
[12]
 Id. at 12.
[13]
 Id. at 38.
[14]
 Id.
[15]
 Id.
[16]
 Id. at 39.
[17]
 Id.
[18]
 Per Home Development Mutual Fund's official website
<http://www.pagibigfund.gov.ph>, mandatory membership is for:

 All employees who are or ought to be covered by the Social Security System
(SSS), provided that actual membership in the SSS shall not be a condition
precedent to the mandatory coverage in the Fund. It shall include, but are not
limited to:
   
o A private employee, whether permanent, temporary, or provisional who is
not over sixty (60) years old;
   
o A household helper earning at least P1,000.00 a month. A household helper
is any person who renders domestic services exclusively to a household
such as a driver, gardener, cook, governess, and other similar occupations;
   
o A Filipino seafarer upon the signing of the standard contract of employment
between the seafarer and the manning agency, which together with the
foreign ship owner, acts as the employer;
   
o A self-employed person regardless of trade, business or occupation, with an
income of at least P1,000.00 a month and not over sixty (60) years old;

o An expatriate who is not more than sixty (60) years old and is compulsorily
covered by the Social Security System (SSS), regardless of citizenship,
nature and duration of employment, and the manner by which the
compensation is paid. In the absence of an explicit exemption from SSS
coverage, the said expatriate, upon assumption of office, shall be covered
by the Fund.
 o An expatriate shall refer to a citizen of another country who is living and
working in the Philippines.

 All employees, who are subject to mandatory coverage by the Government Service
Insurance System (GSIS) regardless of their status of appointment, including
members of the Judiciary and constitutional commissions;

 Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire
Protection, the Bureau of Jail Management and Penology, and the Philippine
National Police;

 Filipinos employed by foreign-based employers, whether they are deployed here

or abroad or a combination thereof.
[19]
 Per Home Development Mutual Fund's official website
<http://www.pagibigfund.gov.ph>, voluntary membership is for:

An individual at least 18 years old but not more than 65 years old may register with the
Fund under voluntary membership. However, said individual shall be required to comply
with the set of rules and regulations for Pag-IBIG members including the amount of
contribution and schedule of payment. In addition, they shall be subject to the eligibility
requirements in the event of availment of loans and other programs/benefits offered by
the Fund.

The following shall be allowed to apply for voluntary membership:

• Non-working spouses who devote full time to managing the household and family
affairs, unless they also engage in another vocation or employment which is subject to
mandatory; coverage, provided the employed spouse is a registered Pag-IBIG member
and consents to the Fund membership of the non-working spouse;

• Filipino employees of foreign government or international organization, or their wholly-

owned instrumentality based in the Philippines, in the absence of an administrative
agreement with the Fund;

• Employees of an employer who is granted a waiver or suspension of coverage by the

Fund under RA 9679;

• Leaders and members of religious groups;

• A member separated from employment, local or abroad, or ceased to be self-employed
but would like to continue paying his/her personal contribution. Such member may be a
pensioner, investor, or any other individual with passive income or allowances;

• Public officials or employees, who are not covered by the GSIS such as Barangay
Officials, including Barangay Chairmen, Barangay Council Members, Chairmen of the
Barangay Sangguniang Kabataan, and Barangay Secretaries and Treasurers;

• Such other earning individuals/groups as may be determined by the Board by rules and
regulation.
[20]
 Ponencia, p. 5.

SEPARATE CONCURRING OPINION

CAGUIOA, J.:

I concur with the ponencia insofar as it finds no probable cause to charge and arrest

respondents Delfin S. Lee (Delfin Lee), Dexter L. Lee (Dexter Lee), Christina Sagun
(Sagun), Atty. Alex M. Alvarez (Alvarez) and Cristina Salagan (Salagan) for the crime of
syndicated estafa penalized under Presidential Decree 1689 (PD 1689).[1] I share
the ponencia's view that respondents do not qualify as a syndicate as defined in PD 1689.

Under the Revised Penal Code (RPC), any person who shall defraud another by any of
the means set forth in Articles 315 and 316 shall be liable for estafa.

On April 6, 1980, President Ferdinand E. Marcos issued PD 1689 which treats the crime
of syndicated estafa. Section 1 thereof, which incorporates Articles 315 and 316 by
reference, reads:
SECTION 1. Any person or persons who shall commit estafa or other forms of swindling
as defined in Articles 315 and 316 of the [RPC], as amended, shall be punished by life
imprisonment to death if the swindling (estafa) is committed by a syndicate consisting of
five or more persons formed with the intention of carrying out the unlawful or illegal act,
transaction, enterprise or scheme, and the defraudation results in the misappropriation of
moneys contributed by stockholders, or members of rural banks, cooperatives,
"samahang nayon(s)", or farmers' associations, or of funds solicited by
corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall
be reclusion temporal to reclusion perpetua if the amount of the fraud exceeds 100,000
pesos.
Hence, to sustain a charge for syndicated estafa, the following elements must be
established: (i) estafa or other forms of swindling as defined in Articles 315 and 316 of
the RPC is committed; (ii) the estafa or swindling is committed by a syndicate of five or
more persons; and (iii) defraudation results in the misappropriation of money contributed
by stockholders, or members of rural banks, cooperatives, "samahang nayon(s)," or
farmers' associations or of funds solicited by corporations/associations from the general
public.[2]

The resolution of the Petition requires the examination of the second and third elements.

Second Element

In concurrence with the ponencia, and with the separate opinions of Senior Associate
Justice Antonio T. Carpio and Associate Justice Estela M. Perlas-Bernabe, I find that the
evidence presented against Alvarez establish his participation as the fifth conspirator in
the fraudulent scheme subject of the charge.

To note, the Information in Criminal Case No. 18480 charging respondents with
syndicated estafa, implicates Alvarez under the following terms:
xxxx

That in carrying out the aforesaid conspiracy x x x accused x x x Alvarez, did then and
there unlawfully, feloniously and knowingly notarize crucial pieces of documents,
consisting, among others, of the buyer's affidavit of income, promissory note, and
developer's affidavit (by Ms. Cristina Sagun) alleging compliance with the conditions set
by [Home Development Mutual Fund (HDMF)], all of which are essential for the
processing and approval of the purported transaction; x x x.[3]
As aptly explained by Justice Carpio, Alvarez admitted during the course of investigation
that he notarized documents[4] for Globe Asiatique Realty Holdings Corporation (GA) in
exchange for a fixed monthly fee even as he was employed as manager of HDMF's
Foreclosure Department,[5] and that he often notarized these documents in GA's head
office during the same period.[6]

Notably, these acts became subject of the case entitled Alex M. Alvarez v. Civil Service
Commission and Home Development Fund, docketed as G.R. No. 224371.[7] Therein, the
Court found Alvarez liable for grave misconduct, dishonesty and conduct prejudicial to
the best interest of the service, and thus, dismissed Alvarez from service with finality. [8]

Again, as Justice Carpio astutely observes, Alvarez, being the manager of HDMF's
Foreclosure Department, evidently knew that the documents he was notarizing for GA
(e.g., Affidavits of Income, Contracts to Sell and promissory notes, among others) were
essential for the processing and approval of the housing loans in question. In the words of
Justice Carpio, this glaring conflict of interest, coupled with the NBI's finding that
majority of the documents corresponding to the fictitious accounts had been notarized by
Alvarez,[9] show that he had knowledge of the fraudulent scheme perpetrated by GA, and
had actively participated therein.

In this connection, Associate Justice Leonen opines that Section 1 of PD 1689 does not
specify the number of individuals who must be charged for an act of fraud to qualify as
syndicated estafa, but requires only that the number of individuals acting out of a
common design to defraud be at least five,[10] since certain contingencies may prevent all
individuals involved from standing trial.[11] Hence, he stresses that the primary task of
investigators and prosecutors in such cases is to "demonstrate the fraudulent scheme
employed by five or more individuals,"[12] and, thereafter, "to demonstrate how an
individual accused took part in effecting that scheme."[13]

Justice Leonen's observations are well-taken. Indeed, the identification of the individuals
involved in the perpetration of syndicated estafa and the determination of the nature of
their participation are tasks that lie with investigators and prosecutors. Indeed, it is
possible to demonstrate the existence of a fraudulent scheme employed by five or more
individuals without having to bring each of them to trial. However, it bears emphasis that
at the point when the identity and participation of the individual perpetrators are
determined to the extent sufficient to demonstrate the fraudulent scheme, investigators
and prosecutors are left with no reason to drop said individuals from the criminal charge
and exclude them from trial. And should the investigators and prosecutors fail, or decide
not to include these known malefactors in the charge of syndicated estafa, then the Court
is left with no alternative but to determine the sufficiency of the said charge only on the
basis of the number of malefactors so included as accused - this number going into the
very definition of the law as to what constitutes syndicated estafa.

In any case, I submit that the second element of syndicated estafa is already satisfied in
view of Alvarez's participation in the fraudulent scheme, as discussed.

Third Element

Considering that the fraudulent scheme in question was perpetrated by an entity which
does not solicit funds from the general public, I find that the third element of
syndicated estafa is absent. Thus, I likewise concur with the ponencia in this respect.

In Galvez v. Court of Appeals[14] (Galvez), Asia United Bank (AUB) charged private

respondents therein with syndicated estafa for having deceived AUB into granting their
corporation, Radio Marine Network Smartnet, Inc. (RMSI), a P250-million Omnibus
Credit Line based on the misrepresentation that RMSI had sufficient capital and assets to
secure the financial accommodation. Resolving the case, the Court ruled that fraud only
qualifies as syndicated estafa under PD 1689 when the corporation or association through
which it is committed is an entity which receives contributions from the general public:
On review of the cases applying the law, we note that the swindling syndicate used the
association that they manage to defraud the general public of funds contributed to the
association. Indeed, Section 1 of [PD] 1689 speaks of a syndicate formed with the
intention of carrying out the unlawful scheme for the misappropriation of the money
contributed by the members of the association. In other words, only those who formed
and manage associations that receive contributions from the general public who
misappropriated the contributions can commit syndicated estafa.

[Respondents], however, are not in any way related either by employment or ownership
to AUB. They are outsiders who, by their cunning moves were able to defraud an
association, which is the AUB. Theirs would have been a different story, had they
been managers or owners of AUB who used the bank to defraud the public
depositors.

This brings to fore the difference between the case of Gilbert Guy, et al., and that
of People v. Balasa, People v. Romero, and People v. Menil, Jr.

In People v. Balasa, the accused formed the Panata Foundation of the Philippines, Inc., a

non-stock/non-profit corporation and the accused managed its affairs, solicited deposits
from the public and misappropriated the same funds.

We clarified in Balasa that although, the entity involved, the Panata Foundation, was not
a rural bank, cooperative, samahang nayon or farmers' association, it being a corporation,
does not take the case out of the coverage of [PD] 1689. [PD] 1689's third "whereas
clause" states that it also applies to other "corporations/associations operating on funds
solicited from the general public." It is this pronouncement about the coverage of
"corporations/associations" that led us to the ruling in our [April 25, 2012] Decision that
a commercial bank falls within the coverage of [PD] 1689. We have to note though, as
we do now, that the Balasa case, differs from the present petition because while
in Balasa, the offenders were insiders, i.e., owners and employees who used their
position to defraud the public, in the present petition, the offenders were not at all related
to the bank. In other words, while in Balasa the offenders used the corporation as the
means to defraud the public, in the present case, the corporation or the bank is the
very victim of the offenders.

Balasa has been reiterated in People v. Romero, where the accused Martin Romero and
Ernesto Rodriguez were the General Manager and Operation Manager, respectively, of
Surigao San Andres Industrial Development Corporation, a corporation engaged in
marketing which later engaged in soliciting funds and investments from the public.

A similar reiteration was by People v. Menil, Jr., where the accused Vicente Menil, Jr.
and his wife were proprietors of a business operating under the name ABM Appliance
and Upholstery. Through ushers and sales executives, the accused solicited investments
from the general public and thereafter, misappropriated the same.[15] (Emphasis supplied)
Based on the foregoing, I find that the third element of syndicated estafa does not obtain.
To recall, the misappropriated funds in this case pertain to HDMF. While such funds
were undoubtedly solicited from the general public, it bears emphasizing that HDMF
was not the corporate vehicle used to perpetrate the fraud. Rather, HDMF was the
subject of the fraudulent scheme perpetrated by GA. These facts, taken together,
place the present case beyond the scope of PD 1689.

Justice Carpio is of the position that PD 1689 does not require that the perpetrator or the
accused corporation/association be the one to solicit funds from the public, so long as the
defraudation results in the misappropriation of money or of funds solicited by
corporations/associations from the general public.[16] With all due respect, I disagree. The
limited scope of PD 1689 is discemable from its "whereas clauses":
WHEREAS, there is an upsurge in the commission of swindling and other forms of
frauds in rural banks, cooperatives, "samahang nayon(s)", and farmers' associations
or corporations/associations operating on funds solicited from the general public;

WHEREAS, such defraudation or misappropriation of funds contributed by stockholders

or members of such rural banks, cooperatives "samahang nayon(s)", or farmers'
associations, or of funds solicited by corporations/associations from the general
public, erodes the confidence of the public in the banking and cooperative system,
contravenes the public interest, and constitutes economic sabotage that threatens
the stability of the nation;

WHEREAS, it is imperative that the resurgence of said crimes be checked, or at least

minimized, by imposing capital punishment on certain forms of swindling and other
frauds involving rural banks, cooperatives, "samahang nayon(s)", farmers' associations or
corporations/associations operating on funds solicited from the general public[.]
(Emphasis supplied)
The "whereas clauses" are clear - PD 1689 is intended to cover swindling and other forms
of frauds involving corporations or associations operating on funds solicited from the
general public. To relax the third element of syndicated estafa in the present case is to
adopt a liberal interpretation of PD 1689 to respondents' detriment; this cannot be done
without doing violence to the well-established rule on the interpretation of criminal and
penal statutes.

The early case of People v. Garcia[17] lends guidance:

x x x "Criminal and penal statutes must be strictly construed, that is, they cannot be
enlarged or extended by intendment, implication, or by any equitable considerations. In
other words, the language cannot be enlarged beyond the ordinary meaning of its terms in
order to carry into effect the general purpose for which the statute was enacted. Only
those persons, offenses, and penalties, clearly included, beyond any reasonable
doubt, will be considered within the statute's operation. They must come clearly
within both the spirit and the letter of the statute, and where there is any reasonable
doubt, it must be resolved in favor of the person accused of violating the statute; that is,
all questions in doubt will be resolved in favor of those from whom the penalty is
sought." x x x[18] (Emphasis supplied)
The absence of the third element takes GA's fraudulent scheme outside of the scope of
PD 1689. Nevertheless, such absence does not have the effect of absolving
respondents herein of criminal liability, as the fraudulent scheme remains
punishable under Article 315 of the RPC.

I find that the allegations in the Information, coupled with the evidence offered thus far,
establish the existence of probable cause to charge and try respondents for the crime of
simple estafa under the RPC, particularly under Article 315(2)(a)[19] thereof due to
respondents' involvement in the implementation of GA's "Special Other Working Group
Membership Program" (SOWG).[20]

Respondents insist that GA's duty to warrant the veracity of its buyer-borrowers'
qualifications had been rendered inexistent by the Memorandum of Agreement dated July
13, 2009 (MOA), owing to the summary judgment rendered by the Regional Trial Court
(RTC) of Makati in Civil Case No. 10-1120[21] which provides, in part:
The MOA dated [July 13, 2009] entered into between [GA] and defendant HDMF which
was duly approved by the Board of Trustees of the latter, without any doubt, effectively
superseded, amended, and modified the provisions  of the  continuing  [Funding
Commitment Agreements (FCAs)] and [Collection Servicing Agreements] which are
inconsistent with its provisions specifically in the following areas of concern:

a. Warranty of the developer on the approval of loan applications of [HDMF]

member-borrowers who bought houses and lots from the Xevera Bacolor and
Mabalacat projects of [GA] considering that under the MOA, (GA] is limited to
loan counseling;

b. Warranty against any misrepresentation of the employees or agents of [GA] in

connection with the latter's evaluation and approval of loan accounts due to the
fact that under the MOA, [GA] is limited to loan counseling; and

c. Right to unilateral termination of the contracts because under the MOA, the
contracts can only be terminated upon mutual consent of both parties.[22]

Respondents posit that GA could not have made any false representations which would
have impelled HDMF to approve the loan applications of its buyer-borrowers, so as to
render them liable for simple estafa under Article 315(2)(a) of the RPC.

I disagree. I find, as do the majority, that GA's systematic endorsement of fictitious and
unqualified buyer-borrowers serves as sufficient basis to hold the respondents liable for
simple estafa - which liability stands regardless of whether GA's warranties under the
Funding Commitment Agreements (FCAs) remained in effect.

To recall, the elements of simple estafa under Article 315(2)(a) are: (i) there must be a
false pretense or fraudulent representation as to the offender's power, influence,
qualifications, property, credit, agency, business or imaginary transactions; (ii) that such
false pretense or fraudulent representation was made or executed prior to or
simultaneously with the commission of the fraud; (iii) that the offended party relied on
the false pretense, fraudulent act, or fraudulent means and was induced to part with his
money or property; and (iv) that, as a result thereof, the offended party suffered damage.
[23]
 In order for simple estafa of this kind to exist, the false pretense or fraudulent
representation must be made prior to, or at least simultaneous with, the delivery of the
thing subject of the fraud, it being essential that such false statement or representation
constitutes the very cause or motive which induces the victim to part with his/her money.
[24]

With respect to the element of false pretense or fraudulent representation, the Court's
ruling in Preferred Home Specialties Inc. v. Court of Appeals[25] is instructive:
A "representation" is anything which proceeds from the action or conduct of the party
charged and which is sufficient to create upon the mind a distinct impression of fact
conducive to action. "False" may mean untrue, or designedly untrue, implying an
intention to deceive, as where it is applied to the representations of one inducing another
to act to its own injury. "Fraudulent" representations are those proceeding from, as
characterized by fraud, the purpose of which is to deceive. "False pretense" means any
trick or device whereby the property of another is obtained.[26]
To be sure, there is nothing in Article 315 which requires that the matter falsely
represented be the subject of an obligation or warranty on the part of the offender. It is
sufficient that the false representation made by the offender had served as the driving
force in the victim's defraudation.

On this score, it bears stressing that HDMF agreed to adopt GA's proposed SOWG on the
basis of Delfin Lee's representations that a significant number of buyers had expressed
interest in purchasing units in its Xevera Projects. In fact, after having secured billions of
pesos under the first nine (9) FCAs executed between August 12, 2008 and July 10, 2009,
Delfin Lee sought to further secure, as he did secure, additional funding commitment
lines through an accelerated loan take-out process, under the guise of a "rapid and notable
increase in the number of buyers" for GA's Xevera Projects.

However, as was later admitted by Delfin Lee himself, at least one thousand (1,000) of
the buyer-borrowers which GA had endorsed to HDMF were questionable. Worse, Delfin
Lee likewise admitted that these questionable accounts were kept current not by the
buyer-borrowers on record, but by GA itself.[27] In turn, the subsequent audit
conducted by HDMF revealed that: (i) only 1.85% of the sampled accounts under the
SOWG category were actually occupied by their corresponding buyer-borrowers; (ii)
83.38% of acquired units under the SOWG category were unoccupied; and (iii) 7.69% of
accounts under the SOWG category had been closed. These figures account for at least
296 anomalous SOWG accounts out of the 320 accounts HDMF sampled during the
audit, which, in turn, constitutes 10% of the total number of SOWG accounts booked by
GA.[28] What is even more telling is the fact that GA's remittance rate immediately fell
from 100% to 0% a month after HDMF suspended loan take-outs m favor of GA's buyers
due to its alarming findings.[29]

The sheer volume of anomalous SOWG accounts is indicative of willful and fraudulent
misrepresentation on the part of GA, for while the endorsement of a handful of fictitious
and/or inexistent buyer-borrowers may reasonably result from negligence or even mere
oversight, the endorsement such accounts in the hundreds clearly shows the employment
of an elaborate scheme to defraud, and assumes the nature and character of fraud and
deceit constitutive of simple estafa under Article 315(2)(a):
[F]raud, 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 devise, 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. And 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.[30] (Emphasis
supplied)
To my mind, this elaborate scheme could not have been possible without the complicity
of the respondents, given the volume of transactions and amount of money involved in its
perpetration. Hence, the respondents should accordingly be charged and made to stand
trial.

Moreover, Justice Perlas-Bernabe correctly notes that even if it is assumed, arguendo,

that the MOA had the effect of negating GA's warranties under the FCAs anent its buyer-
borrowers' qualifications, no less than nine (9) FCAs implementing the SOWG
arrangement had nevertheless been executed prior to the execution of the MOA.
Accordingly, the offense of simple estafa had already been consummated in respect
of these nine (9) FCAs, which account for the staggering amount of Two Billion Nine
Hundred Million Pesos (P2,900,000,000.00) in loan proceeds.

On the basis of the foregoing, I vote that the petitions docketed as G.R. Nos. 205698,
205780, 209446, 209489, 209852, 210143, 228452, 228730 and 230680 be GRANTED
IN PART, and that the public prosecutor be directed to amend the Information to reflect
the correct charge of simple estafa, under Article 315(2)(a) of the RPC. Let the warrants
of arrest against respondents Delfin S. Lee, Dexter L. Lee, Christina Sagun, and Cristina
Salagan STAND, and the warrant of arrest against Atty. Alex M. Alvarez be
deemed REINSTATED.

I concur with the ponencia insofar as it GRANTS the petition docketed as G.R. No.

209424, and DIRECT the remand of Civil Case No. 10-1120 entitled Globe Asiatique
Realty Holdings, Corp. et al. v. The Home Development Mutual Fund or Pag-Ibig Fund,
et al. to the Regional Trial Court of Makati City, Branch 58 for further proceedings.

Finally, I concur with the ponencia insofar as it GRANTS the petitions docketed as G.R.

Nos. 208744 and 210095, and LIFTS the Writ of Preliminary Injunction dated April 10,
2013 issued by the Regional Trial Court of Pasig City, Branch 167.

[1]
 In relation to Article 315 of the RPC.
[2]
 Galvez v. Court of Appeals, 704 Phil. 463, 472 (2013) [Per J. Perez, Special Second
Division].
[3]
 As quoted in the ponencia, p. 13.
[4]
 Including, among others, Affidavits of Income, Contracts to Sell, promissory notes,
Deeds of Assignment and Certificates of Acceptance.
[5]
 Based on the NBI Report dated October 29, 2010, see J. Carpio, Dissenting Opinion, p.
25, citing rollo (G.R. No. 209446), Vol. II, p. 722.
[6]
 Based on the transcript of clarificatory questioning of Ms. Veniza Santos Panem, see J.
Carpio, Dissenting Opinion, id. at 23-25, citing rollo, Vol. VI (G.R. No. 209446), pp.
2550-2563.
[7]
 G.R. No. 224371, September 19, 2016 (Unsigned Resolution).
[8]
 Id.
[9]
 See J. Carpio, Dissenting Opinion, pp. 25-26.
[10]
 See J. Leonen, Dissenting Opinion, p. 4.
[11]
 Id. at 5.
[12]
 Id.
[13]
 Id.
[14]
 Supra note 2.
[15]
 Id. at 473-474.
[16]
 See J. Carpio, Dissenting Opinion, p. 27.
[17]
 85 Phil. 651 (1950) [Per J. Tuason, En Banc].
[18]
 Id. at 656.
[19]
 RPC, Article 315(2)(a) provides:

ART. 315. Swindling (estafa). - Any person who shall defraud another by any of the
means mentioned hereinbelow x x x:

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

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

qualifications, property, credit, agency, business or imaginary transactions; or by means
of other similar deceits.
[20]
 See ponencia, p. 40.
[21]
 Entitled Globe Asiatique Realty Holdings Corporation and Delfin Lee (in his capacity
as President of the Corporation) v. Home Development Mutual Fund (HDMF) or Pag-
Ibig Fund, its Board of Trustees and Emma Linda Faria, Officer in Charge, for Specific
Performance and Damages.
[22]
 Rollo (G.R. No. 209424), Vol. II, p. 447.
[23]
 People v. Baladjay, G.R. No. 220458, July 26, 2017, p. 7 [Per J. Velasco, Jr., Third
Division].
[24]
 See Preferred Home Specialties Inc. v. Court of Appeals, 514 Phil. 574, 597-598
(2005) [Per J. Callejo, Sr., Second Division].
[25]
 Id.
[26]
 Id. at 598-599.
[27]
 Rollo (G.R. No. 205698), Vol. I, p. 334.
[28]
 Figures culled from the results of the HDMF special audit, as narrated by the NBI in
its Preliminary Investigation Report dated October 29, 2010 (see rollo [G.R. No.
205698], Vol. I, p. 334).
[29]
 Rollo (G.R. No. 205698), Vol. I, p. 334.
[30]
 Lateo v. People, 666 Phil. 260, 273-274 (2011) [Per J. Nachura, Second Division]
cited in the ponencia, p. 40; see also Republic v. Mega Pacific eSolutions. Inc., 788 Phil.
160, 196-197 (2016) [Per C.J. Sereno, First Division].

SEPARATE OPINION

TIJAM, J.:

In 2008, Globe Asiatique Realty Holdings Corporation (GA), through its president Delfin
Lee, entered into Funding Commitment Agreements (FCA) with Home Development
Mutual Fund (HDMF) wherein it represented having interested buyers in its Xevera
Projects in Pampanga. Under the arrangement, GA's supposedly existing buyers would be
the loan applicants. GA will pre-process the loan applications and in case of default in the
amortization, GA would buy back the loan accounts. This was followed by a second
FCA, where the borrowers would be composed of Special Other Working Group (OWG)
or those HDMF members who are not formally employed. In 2009, GA and HDMF
executed a Memorandum of Agreement (MOA) for an additional funding commitment
line. More FCAs were executed, reaching an aggregate amount of P7,007,806,000.00
released to GA.

HDMF subsequently discovered that some supposed borrowers under the OWG were not
aware of the loans they supposedly obtained and that some borrowers were neither
members of HDMF nor qualified to avail of housing loan. Consequently, HDMF revoked
the authority of GA under the FCA, suspended all take-outs for new housing loans,
required the buy-back of the 701 fraudulent accounts, and cancelled the release of fund to
GA.

These events led to:

(a) In October 2010, HDMF, through its officer-in-charge Faria, filed a complaint for
syndicated estafa against GA's officers Delfin Lee and several others [1st DOJ
Complaint].

(b) In November 2010, GA and Delfin Lee filed a complaint for specific performance
against HDMF before Regional Trial Court (RTC) of Makati [Civil Case]. They sought to
compel HDMF to accept the replacements they proposed in lieu of the buyers who
became delinquent in their amortizations.

(c) 2nd, 3rd and 4th Department of Justice (DOJ) criminal complaints against respondents
were filed.

1st DOJ Complaint:

The DOJ issued its Review Resolution recommending the filing of estafa against Delfin
Lee, Christina Sagun (Sagun), Christina Salagan (Salagan), Dexter Lee and Atty. Alex
M. Alvarez (Atty. Alvarez) with no bail.

Sagun filed a certiorari petition with the Court of Appeals (CA) while Atty. Alvarez filed
his injunction petition with RTC Caloocan to enjoin DOJ from filing the information.

The CA partially granted Sagun's petition. It held that Sagun's functions were limited to
collation of documents. It dismissed the complaint as against Sagun and ordered the
quashal of the arrest warrant issued against her.

On the other hand, GA clients, claiming to be victims of double sale made by GA, also
filed a complaint for syndicated estafa against respondents. [2nd DOJ Complaint]

Delfin Lee filed an injunction petition with RTC Pasig to enjoin the DOJ from
proceeding with the 2nd DOJ Complaint on the ground that the Civil Case for specific
performance case constitutes a prejudicial question.

The RTC Pasig issued Temporary Restraining Order (TRO) and Writ of Preliminary
Injunction (WPI). DOJ filed a certiorari petition with CA. CA granted
DOJ certiorari petition. Delfin Lee appealed to Us. We denied appeal which became
final.

DOJ thus filed criminal case for syndicated estafa against Delfin Lee, Dexter Lee, Sagun,
Salagan and Atty. Alvarez with the RTC Pampanga.

The RTC Pampanga found probable cause for syndicated estafa and ordered the issuance
of warrants of arrest.
Delfin Lee, Dexter Lee and Salagan moved for reconsideration. Atty. Alvarez also moved
for reconsideration.

Pending resolution of his motion for reconsideration, Delfin Lee filed a certiorari petition
with the CA. Atty. Alvarez, Dexter Lee and Salagan also filed their
respective certiorari petitions with the CA.

The CA partially granted Delfin Lee's and Atty. Alvarez's petition and quashed the arrest
warrants issued against them. The CA dismissed Salagan's petition.

Hence, the petitions (People v. Alvarez, G.R. No. 209446; HDMF v. Alvarez, G.R. No.
209489; HDMF v. Delfin Lee, G.R. No. 209852; People v. Delfin Lee, G.R. No.
210143; People v. Dexter Lee, G.R. No. 228730; HDMF v. Dexter Lee, G.R. No. 228452;
and Salagan v. People and HDMF, G.R. No. 230680).

Civil Case for specific performance:

GA and Delfin Lee filed a complaint for specific performance and damages, seeking to
compel HDMF to accept the replacements they had proposed in lieu of the
buyers/borrowers who had become delinquent in their amortization and asserting that
HDMF's inaction to accept the replacement forced GA to default on its obligations under
the MOA and FCAs, against HDMF.

The RTC Makati rendered a summary judgment in favor of GA and Delfin Lee.

Faria and Atty. Berberabe's motion for reconsideration filed by the Yorac Law Firm was
denied due to the latter's lack of authority from HDMF. Supposedly, HDMF itself did not
moved for reconsideration.

HDMF filed its certiorari petition with the CA.

The CA dismissed HDMF petition. In ruling so, the CA held that HDMF availed of the
wrong remedy to assail a summary judgment and that the certiorari petition was not filed
under the authority of the OGCC.

Hence, the petition (HDMF v. GA, G.R. No. 209424).

2nd, 3rd and 4th DOJ complaints:

To enjoin the 2nd, 3rd, and 4th DOJ complaints, Delfin Lee prayed for the issuance of a
TRO with the RTC Pasig.

The RTC Pasig issued TRO and WPI against the conduct of the preliminary investigation
in the 2nd, 3rd and 4th DOJ Complaints. It held that the summary judgment rendered by the
RTC Makati effectively removed the element of damage in the criminal complaints.

DOJ filed certiorari petition with the CA, but denied the petition for having been filed
out of time.

Hence, the petitions (DOJ v. Delfin Lee, G.R. No. 208744; DOJ v. Delfin Lee, G.R. No.
210095).

I concur with the ponencia ordering the formal amendment of the Information from
syndicated estafa to simple estafa and that the arrest warrants remain valid.

To determine if the first paragraph of Section 1 of Presidential Decree (P.D.) No. 1689
applies, two questions must be determined: first, whether HDMF funds may be the
subject of syndicated estafa; and second, whether respondents, as GA officials, fall under
the definition of who may commit syndicated estafa.

As to the first question, the HDMF funds may be the subject of syndicated estafa.

Under paragraph 1 of Section 1, P.D. No. 1689, the funds misappropriated must be:

1) moneys contributed by stockholders or members of rural banks, cooperative, samahang

nayons or farmers' associations, or
2) funds solicited from the general public.

Section 10 of Republic Act (R.A) No. 9679 or the HDMF Law of 2009 describes the
HDMF fund as "private in character, owned wholly by the members, administered in trust
and applied exclusively for their benefit." The personal and employer contributions are to
be fully credited to each member and shall earn dividends. The fund also constitutes as a
provident fund of each member, to be paid upon termination of membership. In other
words, HDMF funds are funds held in trust for the member and are provident funds to be
paid to the member, or his estate or beneficiaries, upon termination of his membership.
As in the nature of provident funds, the HDMF funds operate as a savings scheme
consisting of contributions from the members in monetary form which, in turn, earns
dividends, may be used as a loan facility and provides supplementary welfare benefit to
members. It is akin to funds held by banks, which is still wholly owned by the depositor
but is loaned to the bank which the latter may use/invest and thus earns interest for the
depositor. In other words, HDMF funds may thus properly be regarded as moneys
contributed by HDMF members which may be the subject of syndicated estafa.

Nevertheless, as to the second question, the respondents GA officials do not fall under the
definition of who may commit syndicated estafa. Jurisprudence, as it stands, particularly
in Galvez, et al. v. Court of Appeals, et al.,[1] requires that the syndicate must have used
the association that they manage to defraud the general public of the funds contributed to
the association, to wit:
[W]e note that the swindling syndicate used the association that they manage to defraud
the general public of funds contributed to the association. Indeed, Section 1 of
Presidential Decree No. 1689 speaks of a syndicate formed with the intention of carrying
out the unlawful scheme for the misappropriation of the money contributed by the
members of the association. In other words, only those who formed [or] manage
associations that receive contributions from the general public who misappropriated the
contributions can commit syndicated estafa.[2]
Otherwise stated, the syndicate must have used the rural banks, cooperative, samahang
nayons or farmers' associations they formed, owned, or managed to misapropriate the
moneys contributed by their stockholders or members, or the syndicate must have used
the corporation or association they formed, owned, or managed to misappropriate the
funds it solicited from the general public.

Here, the GA officials admittedly did not form, own or manage HDMF. It was neither
alleged in the Information that the GA officials used HDMF to defraud the general
public. Since it was HDMF (the "association" holding the moneys contributed by its
members) which is the victim and the juridical person used by the syndicate to defraud,
P.D. No. 1689 does not apply.

Finally, independently of whether the threshold number of accused, i.e., five, is met (on
whether Atty. Alvarez should properly be included or not), the fact remains that four out
of the five accused are neither owners nor employees of HDMF. This places the instant
case outside the scope of P.D. No. 1689.

Since the elements of simple estafa appear to be present, respondents, including Atty.

Alvarez of the HDMF, should be charged of simple estafa. The arrest warrants against
them stand, and if quashed, should be reinstated.

I concur with ponencia reversing the CA Decision denying HDMF's certiorari petition
against RTC Makati's summary judgment but, instead, of remanding to CA, the case
should be remanded to RTC Makati for disposition on the merits.

The RTC Makati gravely abused its discretion when it rendered a summary judgment in
the Civil Case for specific performance when it actually deemed that the issue as to
damages necessitates further proceedings.

As suggested by Justice Estela M. Perlas-Bernabe, there is no need to remand the case to

the CA to determine if the RTC Makati gravely abused its discretion especially so when
proper evaluation of the merits may be had as when copies of various pleadings and
documents are in possession of the Court. Instead, the case should be remanded to RTC
Makati for further proceedings.
The Court's ruling charging respondents of simple estafa and affirming the validity of the
arrest warrants does not pre-empt nor render moot the Civil Case for specific
performance. Suffice to say that the instant petitions deal with the determination of the
probable guilt of respondents for the crime of simple estafa; while the Civil Case simply
determines contractual breach.

Under these premises, I vote as follows:

(1) The petitions in G.R. Nos. 205698, 205780, 209446, 209489, 209852, 210143, 228452,
228730 and 230680 should be PARTIALLY GRANTED in that the Department of Justice
is DIRECTED to amend the Information in Criminal Case No. 18480 so as to charge
respondents for simple estafa. The warrants of arrest issued REMAIN VALID;
(2) The petition in G.R. No. 209424 should be GRANTED. The Decision dated October 7,
2013 of the Court of Appeals in CA-G.R. SP No. 128262, affirming the Resolutions dated
January 30, 2012 and December 11, 2012 of the Regional Trial Court of Makati, Branch 58
in Civil Case No. 10-1120 should be REVERSED and SET ASIDE. A new one should be
entered directing the REMAND of the case to RTC Makati for disposition on the merits;
(3) The petitions in G.R. Nos. 208744 and 210095 should be GRANTED, since the writ of
preliminary injunction issued by the Regional Trial Court of Pasig City, Branch 167, which
enjoined the preliminary investigation for the second, third and fourth criminal complaints
filed against respondents was tainted with grave abuse of discretion amounting to lack of
jurisdiction.

[1]
 704 Phil. 463 (2013).
[2]
 Id. at 473.

THIRD DIVISION
[ G.R. No. 192925, December 09, 2016 ]
JOSE RIZAL L. REMO, REYNALDO G. PANALIGAN, TITA L. MATULIN,
ISAGANI CASALME, CIPRIANO P. ROXAS, CESARIO S. GUTIERREZ,
CELSO A. LANDICHO AND EDUARDO L. TAGLE, PETITIONERS, V. THE
HONORABLE SECRETARY OF JUSTICE AGNES VST
DEVANADERA,HONORABLE JUDGE DANILO SANDOVAL, HONORABLE
CITY PROSECUTOR CARLOS BALLELOS, BATANGAS II ELECTRIC
COOPERATIVE, INC., RUPERTO H. MANALO, NATIONAL
ELECTRIFICATION ADMINISTRATION, LOURDES CRUZ, VIRGINIA
BORJA, EDGAR DE GUZMAN AND RODULFO CANLAS, RESPONDENTS.
DECISION
PEREZ, J.:

This case is an appeal[1] from the decision[2] dated 18 February 2010 and

resolution[3] dated 16 July 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 110838.

The facts:

Prelude: BATELEC II, the Contracts, the NEA Audit

The Batangas II Electric Cooperative, Inc. (BATELEC II) is a cooperative engaged in the
distribution and transmission of electric power to certain parts of the Batangas province.
[4]
 It was organized and duly registered as a non-profit electric cooperative with the
National Electrification Administration (NEA), pursuant to Presidential Decree (PD) No.
269, on 12 August 1977.

BATELEC II began its operations on 24 April 1978.

***

In 2004, BATELEC II entered into two (2) contracts that required it to spend a total of
P81,100,000.00.

The first contract was entered into by BATELEC II with the I-SOLV Technologies, Inc.
(ITI),[5] as represented by its president Manuel Ferdinand Trinidad (Trinidad). The
contract was for the enterprise-wide automation and computerization of BATELEC II.
Pursuant to the said contract, BATELEC II obligated itself to pay an aggregate amount of
P75,000,000.00[6] to ITI in exchange of the total computerization solutions to be provided
by the latter.

The second contract, on the other hand, was with the Supertrac Motors Corporation
(Supertrac) and it was for the procurement of ten (10) boom trucks by BATELEC II.
Under such contract, BATELEC II agreed to pay the sum of P6,100,000.00 to Supertrac
as consideration for the ten (10) boom trucks to be supplied by the latter.[7] Supertrac was
represented in the contract by its president, Rodrigo B. Bangayan (Bangayan).

***

In 2005, a NEA audit report[8]found the ITI and Supertrac contracts as having been
replete with various irregularities and violations of NEA guidelines. Among the
irregularities and anomalies noted in the said audit report were:[9]

A. Re: the ITI Contract

 1. The decision to computerize BATELEC II was immediately implemented
by the cooperative's directors without any documented comprehensive
technical study or project design.

2. The award of the computerization contract to ITI was not preceded by

competitive bidding as required by NEA regulations.

3. The directors of BATELEC II directly participated in the award of the

computerization contract to ITI. Such participation thus violates NEA
Bulletin No. 35 under Prohibition No. 2, which states that the members of
the board of directors of an electric cooperative "[s]hould not xxx involve
themselves on functions that [do not] inherently belong to [m]anagement
such as, for example, material purchases and procurement. x x x they
should not sit as members of the [electric cooperative] 's bid[s] and
awards committee but should confine themselves to laying down policies
for [m]anagement's guidance."[10]

4. ITI is grossly unqualified to perform the P75,000,000.00 computerization

contract:

i. ITI was registered with the Securities and Exchange Commission

(SEC) only on 6 April 2004 or just nine (9) days before the contract.

ii. ITI is undercapitalized for the venture. Its authorized capital stock is
only worth P1,000,000.00, of which only a quarter—or merely
P250,000.00—has been subscribed. Of its subscribed capital stock,
only P62,500.00 is actually paid.

5. The computerization contract was implemented without prior approval

from the NEA.

B. Re: the SMC Contract

1. The boom trucks of Supertrac were overpriced. Supertrac sells a boom

truck at P610,000.00 per unit. A similar boom truck sold by a similar
company[11] only sells at P320,000.00.

2. The bidding process that preceded the award of the boom trucks contract to
Supertrac appears to be rigged. There are indications that three (3) of the
four (4) companies that participated in the bid i.e., Supertrac, the Sapphire
Motors Corporation (SMC) and the Road & Tracks Motor Corporation
(RTMC), are actually related, if not totally the same, companies:
 i. The business address of the RTMC and the home address of one of
its directors is the same as the home address of Bangayan—the
president of Supertrac and the home addresses of two (2) directors of
SMC.

ii. Ms. Rosalinda Accad is both the director of Supertrac and SMC.

iii. The delivery receipts nos. 3294, 3295, 3366 and 3337 that was
issued by Supertrac to evidence its delivery of four (4) of the ten
boom trucks to BATELEC II, were signed by Ms. Judith Sioco
(Sioco) and approved by Ms. Ginalyn Valenton (Valenton). Sioco
was also the signatory to the bid proposal of RTMC, while Valenton
is also branch head of SMC.

***

Spurred by the audit report's findings, some members-consumers of BATELEC II filed

before the NEA an administrative complaint[12] charging the directors of the cooperative
who approved the ITI and Supertrac contracts with gross mismanagement and corruption.
Among those charged in the complaint were then BATELEC II directors and now herein
petitioners Reynaldo G. Panaligan, Isagani S. Casalme, Cesario S. Gutierrez, Celso A.
Landicho, Tita L. Matulin, Jose Rizal L. Remo, Cipriano P. Roxas and Eduardo L. Tagle.
[13]

On 5 October 2006, the NEA rendered a decision ordering, among others, the removal of
petitioners as directors of BATELEC II as well as the filing of appropriate criminal and
civil actions against them by the remaining directors of BATELEC II.

On 9 October 2006, the NEA,[14] in conjunction with its decision, issued an

order[15] directing the remaining directors[16] of BATELEC II, led by private respondent
Ruperto H. Manalo (Manalo), to reorganize and elect a new set of officers for the
cooperative immediately.

Pursuant to the 9 October 2006 order of the NEA, the remaining directors of BATELEC
II conducted an election on 10 October 2006. In that election, Manalo was voted as new
president of BATELEC II.[17]

The Criminal Complaint, the Resolution of the OCP and

Criminal Cases No. 0503-2007 and 0504-2007

In the meantime, Manalo and the other private respondents[18] (Manalo et al.)—acting

ostensibly for and on behalf of BATELEC II—filed a criminal complaint against
petitioners, Trinidad and Bangayan before the Office of the City Prosecutor (OCP) of
Lipa City. The complaint was docketed in the OCP as I.S. Nos. 07-0552 to 0553.
The complaint accused petitioners, Trinidad and Bangayan of having committed the
crime of syndicated estafa under Presidential Decree (PD) No. 1689 in relation to Article
315(1)(b) of the Revised Penal Code (RPC). Manalo et al. alleged that petitioners,
Trinidad and Bangayan acted in conspiracy, and as a syndicate, to defraud BATELEC II
by way of the highly irregular and anomalous ITI and Supertrac contracts.[19] According
to Manalo et al., the implementation of such contracts have led to the misappropriation of
millions and millions of pesos worth of funds of BATELEC II.

Preliminary investigation thereafter ensued.

On 9 November 2007, the OCP[20] issued a resolution[21] in I.S. Nos. 07-0552 to 0553. In

the said resolution, the OCP found probable cause to hail petitioners to court albeit only
for two (2) counts of simple estafa under Article 315(1)(b) of the RPC. The OCP,
however, absolved Trinidad and Bangayan on the ground of lack of evidence against
them. The dispositive portion of the resolution thus reads:[22]

WHEREFORE, premises considered, let informations for violation of Article 315 1 (b)
of the Revised Penal Code for two (2) counts be filed in the proper court against
[petitioners] Reynaldo G. Panaligan, Tita L. Matulin, Jose Rizal [L.] Remo, Isagani S.
Casalme, Cipriano P. Roxas, Cesario S. Gutierrez, Celso A. Landicho and Eduardo L.
Tagle.

The complaint against respondents Ferdinand Trinidad and Rodrigo Bangayan is hereby
DISMISSED for insufficiency of evidence.

Pursuant to the OCP resolution, two (2) informations[23] for simple estafa under Article

315(1)(b) of the RPC were filed against petitioners before the Regional Trial Court
(RTC) of Lipa City. Both informations were raffled to Branch 12, presided by Judge
Danilo S. Sandoval (Judge Sandoval). The information pertaining to the estafa committed
in relation with the ITI contract was docketed as Criminal Case No. 0503-2007 whereas
that pertaining to the estafa committed in relation with the Supertrac contract was
docketed as Criminal Case No. 0504-2007.

Petitions For Review Before the Justice Secretary

and the Flip-Flopping Resolutions

The filing of the informations notwithstanding, petitioners and Manalo still filed their
respective petitions for review assailing the OCP resolution before the Secretary [24] of the
Department of Justice (DOJ).

In their petition for review,[25] petitioners challenged, among others, the OCP's finding of
probable cause for simple estafa against them. Petitioners insist upon their absolute
innocence of any crime and pray for the dismissal of the complaint against them.
In his petition for review, on the other hand, Manalo sought to question the OCP's
absolution of Trinidad and Bangayan and also its downgrading of the indictable offense
from syndicated estafa to simple estafa. Manalo maintained that petitioners, Trinidad and
Bangayan should all be charged with the crime of syndicated estafa.[26]

On 26 November 2008, the DOJ Secretary issued a resolution[27] dismissing petitioners'

petition for review for lack of merit and favoring Manalo's petition. The DOJ Secretary
agreed with Manalo's assertion that petitioners, Trinidad and Bangayan should all be
charged and be so charged with the crime of syndicated estafa. Thus, in his resolution, the
DOJ Secretary ordered the modification of the OCP resolution and directed the filing in
court of two (2) separate informations for syndicated estafa—one against petitioners and
Trinidad and another against petitioners and Bangayan. The dispositive portion of the
resolution accordingly provides:[28]

WHEREFORE, the assailed Resolution is hereby MODIFIED and that the

Investigating State Prosecutors are directed to file Two (2) Separate Informations in
Court, to wit:

1. Information for Syndicated Estafa under Presidential Decree 1689 in

relation to Article 315 paragraph 1 (b) of the Revised Penal Code against
[petitioners] Reynaldo Panaligan, Jose Rizal Remo, Tita Matulin, Isagani
Casalme, Cipriano Roxas, Cesario Gutierrez, Celso Landicho, Eduardo [L.]
Tagle and Manuel Ferdinand Trinidad.

2. Information for Syndicated Estafa under Presidential Decree 1689 in

relation to Article 315 paragraph 1 (b) of the Revised Penal Code against
[petitioners] Reynaldo Panaligan, Jose Rizal Remo, Tita Matulin, Isagani
Casalme, Cipriano Roxas, Cesario Gutierrez, Celso Landicho, Eduardo L.
Tagle and Rodrigo Bangayan.

SO ORDERED.

Petitioners, Trinidad and Bangayan all filed their respective motions for reconsideration
from the above resolution.

On 28 January 2009, the DOJ Acting Secretary issued a resolution[29] granting

Trinidad's motion for reconsideration. In the said resolution, the DOJ Secretary held that
there is not enough evidence presented during the preliminary investigation that
sufficiently establishes that Trinidad was in conspiracy with the petitioners. [30] Hence, in
the resolution, the DOJ Secretary ordered the exclusion of Trinidad from the informations
for syndicated estafa that were required to be filed pursuant to the 26 November 2008
resolution.
On 24 February 2009, petitioners filed a new motion praying for the resolution of the
issues raised in their original motion for reconsideration (motion to resolve issues). [31]

On 6 May 2009, the DOJ Secretary issued a resolution[32] granting Bangayan's motion
for reconsideration. In the said resolution, the DOJ Secretary ordered the exclusion of
Bangayan from the informations for syndicated estafa that were required to be filed
pursuant to the 26 November 2008 resolution. The resolution based its absolution of
Bangayan on the ground that he, like Trinidad, was not shown to have conspired with
petitioners regarding the approval of the Supertrac contract.[33]

On 2 June 2009, the DOJ Secretary issued an order[34] denying petitioners' motion for
reconsideration.

On 4 June 2009, however, the DOJ Secretary issued another resolution;[35] this time,
acting upon the petitioners' motion to resolve issues. In this resolution, the DOJ Secretary
ordered the charges to be filed against petitioners, pursuant to the 26 November 2008
resolution, to be downgraded from syndicated estafa to mere simple estafa under Article
315 paragraph 1 (b) of the RPC.

Aggrieved by the 4 June 2009 resolution, Manalo et al. filed a motion for
reconsideration.

On 28 July 2009, the DOJ Secretary[36] issued a resolution[37] granting Manalo et al.'s

motion for reconsideration. In another flip flop, the DOJ Secretary opined that Trinidad
and Bangayan should both be charged along with the petitioners and the charge against
them ought to be syndicated estafa. Hence, in this resolution, the DOJ Secretary reverted
back to the original disposition under the 26 November 2008 resolution and again
required the filing of two (2) informations for syndicated estafa—one against petitioners
and Trinidad and another against petitioners and Bangayan.

Trinidad and Bangayan each filed a motion for reconsideration from the 28 July 2009
resolution.[38]

The Amendment of the Informations, the Issuance of Warrants of Arrests

and the Exclusion Anew of Trinidad and Bangayan

On the other hand, the OCP filed before the RTC amended informations in Criminal Case
Nos. 0503-2007 and 0504-2007 on 7 October 2009.[39] The amended informations were
filed in compliance with the 28 July 2009 resolution of the DOJ Secretary, thus:

1. In Criminal Case No. 0503-2007, the OCP filed an amended information

for syndicated estafa under PD No. 1689 in relation to Article 315(1)(b) of the
RPC against petitioners and Trinidad, and
 2. In Criminal Case No. 0504-2007, the OCP filed an amended information
for syndicated estafa under PD No. 1689 in relation to Article 315(1)(b) of the
RPC against petitioners and Bangayan.

On even date, the RTC, through Judge Sandoval, forthwith issued an order[40] admitting
the amended informations and directing the issuance of warrants of arrest against the
petitioners, Trinidad and Bangayan.

Subsequently, however, the DOJ Acting Secretary issued resolutions [41] granting the
motions for reconsideration of Trinidad and Bangayan and ordered their exclusion anew
from the amended informations. The RTC, for its part, eventually approved of such
exclusion.

Petitioners' Certiorari to the CA,

the Ruling of the CA and the Present Appeal

Upset by the turn of events, petitioners filed with the CA a petition

for certiorari[42] challenging the validity of: (a) the 28 July 2009 resolution of the DOJ
Secretary and (b) the warrants of arrest issued by the RTC in Criminal Case Nos. 0503-
2007 and 0504-2007. This petition was docketed as CAG.R. SP No. 110838.

Petitioners allege that the 28 July 2009 resolution of the DOJ Secretary and the warrants
of arrest issued by the RTC have been products of grave abuse of discretion. They
specifically claim:[43]

1. The DOJ Secretary gravely abused its discretion when it ordered the filing of
informations for syndicated estafa, despite the fact that not all the elements of such
crime, or even of simple estafa, has been established in this case:

a. Manalo et al. presented no evidence establishing that petitioners

misappropriated or converted funds of BATELEC II. The funds of
BATELEC II were duly paid to Supertrac and ITI pursuant to the contracts
and it was never shown that petitioners had been in conspiracy with either
corporation.

b. Even assuming the existence of estafa, petitioners cannot be considered as a

"syndicate" pursuant to PD No. 1689 since they never formed themselves
into a corporation or cooperative with the sole purpose of defrauding the
public.

c. Moreover, there is no evidence showing that the funds used in the Supertrac
and ITI contracts were derived from contributions paid by members of
BATELEC II.
 2. Judge Sandoval likewise gravely abused his discretion when he issued the
warrants of arrest almost immediately after the amended informations; relying
merely on the resolution of the prosecutors and the DOJ Secretary and without
making a personal determination of the existence of probable cause as required by
the Constitution.

On 18 February 2010, the CA rendered a decision[44] in CA-G.R. SP No. 110838

dismissing the certiorari petition of petitioners. It ascribed no grave abuse of discretion
either on the part of the DOJ Secretary for her 28 July 2009 resolution or on the part of
Judge Sandoval for his warrants of arrest.

Petitioners moved for reconsideration, but the CA remained steadfast.[45]

Hence, this appeal.

OUR RULING

The facts upon which the DOJ Secretary premised its finding of probable cause against
petitioners are clear and not disputed.

The petitioners were the directors of BATELEC II that approved, for the said
cooperative, the contracts with ITI and Supertrac. The contracts required BATELEC II to
pay a total ofll81,000,000.00 to ITI and Supertrac in exchange for the system-wide
computerization of the cooperative and for ten (10) boom trucks. It was, however, alleged
that petitioners—in approving the ITI and Supertrac contracts—have committed undue
haste, violated various NEA guidelines and paid no regard to the disadvantageous
consequences of the said contracts to the interests of BATELEC II in general.

Meanwhile, it has been established that Trinidad and Bangayan—the presidents of ITI
and Supertrac, respectively—have not been in conspiracy with petitioners insofar as the
approval of the contracts were concerned.[46]

From the foregoing, the DOJ Secretary held that petitioners ought to be indicted for two
counts of syndicated estafa under PD No. 1689 in relation to Article 315(1)(b) of the
RPC.

We disagree.

Our review of the established facts vis-a-vis the applicable laws and jurisprudence had
made it clear that such indictment could not have been based on any valid finding of
probable cause: first, as the petitioners cannot be regarded as a "syndicate" under PD No.
1689 and second, as they could not even be considered to have committed
simple estafa under Article 315(1)(b) of the RPC.
We find then that the finding of probable cause against petitioners to be grossly
erroneous. The petitioners were right. The 28 July 2009 resolution of the DOJ Secretary,
their indictment and, necessarily, the warrants of arrest issued against them were indeed
products of grave abuse of discretion. All must be, as they should have been, set aside.

Hence, we grant the instant appeal.

We begin with the basics.

Any person who causes pecuniary damage upon another through any of the acts of abuse
of confidence or of deceit, as enumerated in Article 315 of the RPC, commits the crime
of estafa or swindling. One of such acts of abuse of confidence is that specified in Article
315(1)(b) of the RPC, viz:[47]

(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.

Broken down, estafa under Article 315(1)(b) of the RPC has the following elements:[48]

1. That money, goods or other personal property is 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;

2. That there be misappropriation or conversion of such money or property by the

offender or denial on his part of such receipt;

3. That such misappropriation or conversion or denial is to the prejudice of

another; and

4. That there is a demand made by the offended party on the offender.

The crime known as syndicated estafa, on the other hand, is set forth and penalized by
Section 1 of PD No. 1689. The said section reads:

Section 1. Any person or persons who shall commit estafa or other forms of swindling as
defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished
by life imprisonment to death if the swindling (estafa) is committed by a syndicate
consisting of five or more persons formed with the intention of carrying out the unlawful
or illegal act, transaction, enterprise or scheme, and the defraudation results in the
misappropriation of moneys contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)", or farmers' associations, or of funds solicited by
corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall be
reclusion temporal to reclusion perpetua if the amount of the fraud exceeds 100,000
pesos.

In essence, syndicated estafa is but the commission of any kind of estafa under Article

315 of the RPC (or other forms of swindling under Article 316) with two (2) additional
conditions: one, the estafa or swindling was perpetrated by a "syndicate" and two,
the estafa or swindling resulted in the "misappropriation of money contributed by
stockholders, or members of rural banks, cooperative, samahang nayon(s), or farmers
association, or of funds solicited by corporations/associations from the general public."
Thus, in People v. Balasa,[49] we detailed the elements of syndicated estafa as follows:

1. Estafa or other forms of swindling as defined in Articles 315 and 316 of the
Revised Penal Code is committed;

2. The estafa or swindling is committed by a syndicate; and

3. The defraudation results in the misappropriation of moneys contributed by

stockholders, or members of rural banks, cooperatives, samahang nayon(s), or
farmers associations, or of funds solicited by corporations/associations from the
general public.

The penalty for syndicated estafa under PD No. 1689 is significantly heavier than that of
simple estafa under Article 315 of the RPC.[50] The penalty irnposable for
simple estafa follows the schedule under Article 315 and is basically dependent on the
value of the damage or prejudice caused by the perpetrator, but in no case can it exceed
twenty (20) years imprisonment.[51] Syndicated estafa, however, is punishable by life
imprisonment to death regardless of the value of the damage or prejudiced caused.

II

The first reason why the finding of probable cause for syndicated estafa against
petitioners cannot stand is because they, under the circumstances, cannot be considered as
a "syndicate" under PD No. 1689. As stated in the foregoing discussion, in order to
commit the crime of syndicated estafa, the estafa must be committed by a "syndicate" as
contemplated by the law.

In PD No. 1689, the term syndicate is described as "consisting of five or more persons
formed with the intention of carrying out the unlawful or illegal act, transaction,
enterprise or scheme x x x." By itself, however, such description can be vague and
somewhat confusing. Indeed, going by the description alone, one can be led into the
inference that an estafa committed by five conspiring persons against any of the
stockholders or members of the associations mentioned under PD No. 1689 would
automatically give rise to the crime of syndicated estafa. But is such inference really what
the law contemplates?

Fortunately, the true import of the term "syndicate" has already been elucidated upon by
relevant jurisprudence. Drawing from textual clues from the statute itself, our case law
answers the foregoing query with a clear no.

Syndicate Must Be Five or More

Persons Who Used The Association
That They Formed or Managed to
Defraud Its Own Stockholders,
Members or Depositors.

Our resolution in the case of Galvez v. Court of Appeals, et al.[52] points us in the right
direction. In Galvez, a criminal complaint for syndicated estafa was filed against five
individuals who were the interlocking directors of two corporations that purportedly
defrauded a commercial bank. Acting on such complaint, the city prosecutor issued a
resolution finding probable cause to indict the directors for simple estafa under Article
315(2)(a) of the RPC, but not for syndicated estafa. This resolution was subsequently
reversed by the DOJ Secretary upon review, but was ultimately sustained by the CA
on certiorari. In its appeal to this Court, the commercial bank raised the question of
whether the city prosecutor was correct in not charging the directors with
syndicated estafa.

Galvez resolved the question in the affirmative. Citing the text of Section 1 of PD No.
1689 as well as previous cases that applied the said law, Galvez declared that in order to
be considered as a syndicate under PD No. 1689, the perpetrators of an estafa must not
only be comprised of at least five individuals but must have also used the association
that they formed or managed to defraud its own stockholders, members or
depositors. Thus:[53]

On review of the cases applying the law, we note that the swindling syndicate used the
association that they manage to defraud the general public of funds contributed to
the association. Indeed, Section 1 of Presidential Decree No. 1689 speaks of a syndicate
formed with the intention of carrying out the unlawful scheme for the misappropriation of
the money contributed by the members of the association. In other words, only those
who formed [or] manage associations that receive contributions from the general
public who misappropriated the contributions can commit syndicated estafa. xxx.
(Emphasis supplied).
Hence, Galvez held that since the directors therein were "outsiders" or were not affiliated
in any way with the commercial bank whose funds they allegedly misappropriated, they
cannot be charged with syndicated estafa but only of simple estafa under Article 315(2)
(a) of the RPC.

Dissecting the pronouncement in Galvez for our present purposes, however, we are able
to come up with the following standards by which a group of purported swindlers may be
considered as a syndicate under PO No. 1689:

1. They must be at least five (5) in number;[54]

2. They must have formed or managed[55] a rural bank, cooperative, "samahang

nayon," farmer's association or any other corporation or association that solicits
funds from the general public.[56]

3. They formed or managed such association with the intention of carrying out an
unlawful or illegal act, transaction, enterprise or scheme[57] i.e., they used the very
association that they formed or managed as the means to defraud its own
stockholders, members and depositors.[58]

Guided by the foregoing standards, we shall now venture to apply the same to the instant
case.

Petitioners Do Not Constitute a

Syndicate; They Did Not Use
BATELEC II as a Means to Defraud
Its Members of their Contributions

There is no doubt that petitioners met the first and second standards under Galvez:
petitioners are more than five (5) in number and they, as its directors, had management of
BATELEC II—an electric cooperative. What is lacking on the part of the petitioners is
the third standard. Petitioners do not constitute a syndicate under PD No. 1689, as
they never used BATELEC II as a means to defraud its members.

To satisfy the third standard under Galvez, it must be established that the purported
swindlers used the very association they formed or managed to defraud its members.
Since the association contemplated by PD No. 1689 must be one that "solicit[s] fund
from the general public," it follows that the fraud committed through such association
must pertain to its receipt of contribution or solicitation from its stockholders,
members or the public. Such kind of fraud is evidently missing in the case at bench:

First. It is undisputed that the contributions of the members of BATELEC II were paid to
the latter not out of any fraudulent act, transaction or scheme. As admitted by Manalo et
al., the "contributions" of the members of BATELEC II comprise of their payments for
the electricity being supplied by the cooperative.[59] In other words, the contributions of
the members of BATELEC II were received by the latter through legitimate
transactions.

Second. As BATELEC II received the contributions of its members via legitimate

transactions, it cannot be said that the petitioners had used the cooperative to commit
fraud on any of its members. Any alleged misuse of such contributions committed by
petitioners after BATELEC II has already received them through legal means would not
constitute as defraudation committed through the cooperative, but would merely be
an act of mismanagement committed against it. Clearly then, the third standard
of Galvez was not met.

Verily, petitioners cannot be considered as a syndicate under PD No. 1689. They,

therefore, cannot also be charged with syndicated estafa under the said law.[60]

III

There is, however, a more fundamental reason why the finding of probable cause against
petitioners should fail. The petitioners, under the circumstances, could not even be
considered to have committed simple estafa under Article 315(1)(b) of the RPC.

The first two (2) elements of estafa under Article 315(1)(b) of the RPC do not exist by
the factual circumstances of this case.

As Directors of BATELEC II that

Approved the IT/ and Supertrac Contracts,
Petitioners Did Not Receive Funds of the
Cooperative; They Don't Have Juridical
Possession of Cooperative Funds

The first element of estafa under Article 315(1)(b) of the RPC is that the offenders must
have received money, goods or other personal property—(a) in trust (b) on commission
(c) for administration or (d) under any obligation involving the duty to make delivery of,
or to return the same. This element is absent in this case since petitioners did not receive
any of the funds of BATELEC II as such.

While petitioners, as directors of BATELEC II, may be said to be vested with control
over how the cooperative spends its funds,[61] the same cannot be considered as receipt
and possession of such funds under Article 315(1)(b) of the RPC. This is so because
petitioners—even in their capacities as directors of BATELEC—do not acquire juridical
possession of the funds of the cooperative.
Juridical possession is the type of possession that is acquired by the transferee of a thing
when he receives the same under the circumstances mentioned in Article 315(1)(b) of the
RPC.[62] When juridical possession is acquired, the transferee obtains such right over the
thing that he can set up even against its owner.[63] This is what petitioners lack.

Petitioners, despite their collective authority as directors to authorize expenditures for

BATELEC II, do not have juridical possession over the funds of the cooperative. They
simply do not have any right over such funds that they can set up against BATELEC II.

Clearly, petitioners cannot be considered to have received BATELEC II funds under the
circumstances mentioned in Article 315(1)(b) of the RPC. The first element
of estafa under the same provision is, therefore, absent.

There is no Misappropriation or
Conversion of the Funds of BATELEC II

But even assuming that the first element of estafa under Article 315(1)(b) of the RPC is
present in this case, a finding of probable cause against petitioners is still bound to
collapse. This is so because the second element of estafa under the said article is just the
same non-existent.

The second element of estafa under Article 315(1)(b) of the RPC requires that there must
be misappropriation or conversion of the money or property received by the offender or a
denial on his part of such receipt. The terms misappropriation or conversion, in the
context of the article on point, connotes "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."[64] This element was not established in this case:

First. In approving the ITI and Supertrac contracts, the petitioners merely exercised their
prerogative—as directors of the cooperative—to enter into contracts that they deem to be
beneficial for BATELEC II.[65] Though the petitioners may have committed certain
lapses, errors in judgment or even violations of NEA guidelines in making such approval,
these do not have the effect of rendering the contracts with ITI and Supertrac illegal or
void ab initio. Hence, from a strictly legal perspective, any payment made by BATELEC
II pursuant to such contracts—backed as they were by the proper board approvals [66]—
cannot per se be deemed a misappropriation or conversion of the cooperative's funds.

Second. Manalo et al. presented absolutely no evidence that the funds of BATELEC II
were not spent in accordance with the ITI and Supertrac contracts as approved by the
petitioners. In other words, there was no proof that the funds of the cooperative had been
paid to persons or for purposes other than those to whom and for which the said funds
ought to be paid under the contracts. As the evidence stands, no one but ITI and Supertrac
received BATELEC II funds.
Third. Moreover, the absolution of both Trinidad and Bangayan—on the ground that they
were not in conspiracy with the petitioners—greatly undermines any potential inference
of misappropriation or conversion on the part of the petitioners. It negates the possibility
that petitioners could have used the ITI and Supertrac contracts to embezzle funds from
the cooperative. More significantly, it indirectly proves petitioners' good faith in
approving the ITI and Supertrac contracts.

Verily, petitioners cannot be considered to have misappropriated or converted BATELEC

II funds. The second element of estafa under the same provision is, therefore, nil.

Without Misappropriation or Conversion,

Any Prejudice Caused Upon BATELEC II
May Only Give Rise to Civil Liability

Without proof of misappropriation or conversion, the finding that petitioners may have
committed the crime of estafa under Article 315(1)(b), much less of syndicated estafa,
obviously, cannot hold. As we have seen, the evidence of Manalo et al. only tends to
establish that petitioners have committed various lapses and irregularities in approving
the ITI and Supertrac contracts and that such lapses and irregularities, in turn, caused
some prejudice to BATELEC II. Such evidence, by itself, is certainly not enough for
purposes of criminal prosecution for estafa.

Given the evidence at hand, petitioners, at most, may only be held civilly liable for the
prejudice sustained by BATELEC II[67] subject to defenses petitioners may raise.

IV

We thus come to the disposition of this case.

We hold that the CA erred when it found that the DOJ Secretary did not commit grave
abuse of discretion in issuing 28 July 2009 resolution in I.S. Nos. 07-0552. In view of the
absolute dearth of evidence supporting the finding of probable cause against petitioners,
we indeed find that the said resolution had been the product of such abuse of discretion.
Consequently, we must set aside the decision of the CA and direct the incumbent
Secretary of Justice to withdraw the informations filed against petitioners pursuant to the
28 July 2009 resolution.

The warrants of arrest issued against petitioners in Criminal Case Nos. 0503-2007 and
0504-2007 must too be lifted, as a necessary consequence of the invalidity of the
indictment against them.

WHEREFORE, premises considered, the petition is hereby GRANTED. We hereby

render a decision as follows:
 1. REVERSING and SETTING ASIDE the decision dated 18 February 2010 and
resolution dated 16 July 2010 of the Court of Appeals (CA) in CA-G.R. SP No.
110838;

2. SETTING ASIDE the resolution dated 28 July 2009 of the Secretary of the

Department of Justice in I.S. Nos. 07-0552 to 0553 and DIRECTING the
Secretary of Justice to issue a resolution dismissing the criminal complaint
docketed as I.S. Nos. 07-0552 to 0553 before the Office of City Prosecutor of Lipa
City for lack of probable cause and lack of merit;

3. DIRECTING the incumbent Secretary of the Department of Justice to file motion

to dismiss the informations in Criminal Case Nos. 0503-2007 and 0504-2007 with
the Regional Trial Court of Lipa City, Branch 12, and to ask for the LIFTING of
the warrants of arrest issued against petitioners pursuant to the 7 October 2009
Order of the said RTC of Lipa City.

Let a copy of this Decision be served to the Regional Trial Court, Branch 12, of Lipa City
for its consideration.

SO ORDERED.

Velasco, Jr., (Chairperson), Leonardo-De Castro,[*] Reyes and Jardeleza, JJ., concur.

December 16, 2016

NOTICE OF JUDGMENT

Sirs / Mesdames:

Please take notice that on December 9, 2016 a Decision, copy attached hereto, was
rendered by the Supreme Court in the above-entitled case, the original of which was
received by this Office on December 16, 2016 at 11:00 a.m.

Very truly yours,

 
(SGD) WILFREDO V. LAPITAN
Division Clerk of Court

 
[*]
 Designated as Additional Member in lieu of Associate Justice Diosdado M. Peralta per
Raffle dated December 7, 2016.
[1]
 Rollo, pp. 12-83. The appeal was filed as a Petition for Review on Certiorari under
Rule 45 of the Rules of Court.
[2]
 Id. at 318-337. The decision was penned by Associate Justice Florito S. Macalino for
the Eleventh Division of the Court of Appeals with Associate Justices Hakim S.
Abdulwahid and Normandie B. Pizarro, concurring.
[3]
 Id. at 339-340. The resolution was penned by Associate Justice Florito S. Macalino for
the Former Eleventh Division of the Court of Appeals with Associate Justices Hakim S.
Abdulwahid and Normandie B. Pizarro, concurring.
[4]
 Id. at 422-425, 422, see Articles of Incorporation of BATELEC II.
[5]
 Now known as Smart Technologies, Incorporated.
[6]
 See rollo, p. 320. Payable in twenty-two (22) monthly installments at P3,500,000.00
for the first 21 months and P1,500,000.00 for the 22nd month.
[7]
 Rollo, p. 323.
[8]
 Id. at 511-549; the 2004 Audit Report issued by the NEA on 18 March 2005. The
reports contains the results of the audit it conducted on the accounts and transactions of
BATELEC II for the period of 1 April2001 to 30 September 2004.
Rollo, pp. 511-549; excerpts of the audit is found in the NEA decision dated 5 October
2006 in NEA ADM. Case No. 01-05-05.
[9]
 Id.
[10]
 CA rollo, pp. 171-176, 176; NEA Bulletin No. 35 dated 18 June 1990.
[11]
 The audit report identified the Star Motors Corporation.
[12]
 Rollo, pp. 506-510.
[13]
 The other directors of BATELEC II who were charged in the administrative complaint
were Ruben Calinisan, Gerardo Hernandez, Ireneo Montecer, Tirso M. Ramos, Jr.
[14]
 Via then NEA Administrator Edita S. Bueno
[15]
 CA rollo, p. 740.
[16]
 Namely, private respondent Ruperto H. Manalo, Atty. Natalio M. Panganiban, Mr.
Leovino O. Hidalgo, Mr. Gonzalo O. Bantugon, Mr. Adrian G. Ramos, Mr. Dakila P.
Atienza and Mr. Michael Angelo C. Rivera.
[17]
 CA rollo, p. 741; via BATELEC II Board Resolution No. 001, s. 2006.

Petitioners would challenged the 9 October 2006 order of the NEA via a petition
for certiorari with the CA. Such petition was dismissed by the CA through its decision
dated 15 December 2006. Undeterred, petitioners appealed the CA's decision before this
Court. This appeal was docketed as G.R. No. 175736.

On 12 April 2016, we issued a decision in G.R. No. 175736 denying petitioners' appeal
and affirming the CA's decision as well as the NEA order. (See G.R. No. 175736, 12
April 2016)
[18]
 Namely, private respondents Lourdes C. Cruz, Virginia B. Borja, Edgar A. de Guzman
and Rodulfo B. Gelas (Canlas, in other parts of the records).
[19]
 Rollo, pp. 85-103, 89; see Resolution of the OCP dated 9 November 2007 in I.S. Nos.
07-0552 to 0553.
[20]
 Thru State Prosecutors Florencio D. Dela Cruz, Jr. and Nolibien N. Quiambao who
were designated as acting city prosecutors of Lipa City under Department Order No. 713
dated 23 August 2007 of the Department of Justice.
[21]
 Id. at 85-103.
[22]
 Id. at 101.
[23]
 Rollo, pp. 607-611, 659-661; both dated 9 November 2007.
[24]
 Then, Secretary Raul M. Gonzales.
[25]
 CA rollo, pp. 96-102; dated 26 November 2007.
[26]
 Rollo, pp. I 36-161, 159; see Resolution of the DOJ Secretary dated 26 November
2008 in I.S. Nos. 07-0552 to 0553.
[27]
 Id. at 131-161.
[28]
 Id. at 160.
[29]
 Id. at 690-693.
[30]
 Id.
[31]
 Id. at 694-704.
[32]
 Id. at 208-211.
[33]
 Id.
[34]
 Id. at 729-732.
[35]
 Id. at 733-737.
[36]
 Then Acting Secretary Agnes VST Devanadera.
[37]
 Rollo, pp. 756-777.
[38]
 Id. at 778-779; petitioners also filed their motion for reconsideration, but the same was
denied by the DOJ Secretary via a resolution dated 28 September 2009.
[39]
 See CA rollo, pp. 363-367.
[40]
 Rollo, pp. 420-421.
[41]
 Id. at 307-311 and 312-317; Bangayan's motion for reconsideration was granted via a
resolution dated 12 October 2009; Trinidad's motion for reconsideration was granted via
a resolution dated 12 November 2009.
[42]
 CA rollo, pp. 7-51.
[43]
 Id.
[44]
 Rollo, pp. 318-337.
[45]
 Id. at 339-340.
[46]
 Supra note 41. See further rollo, pp. 690-693 and 208-211.
[47]
 REVISED PENAL CODE (RPC) or Act No. 3815.
[48]
 Corpuz v. People of the Philippines, G.R. No. 180016, 29 April 2014, 724 SCRA 1,
31-32.
[49]
 G.R. No. 106357, 3 September 1988.
[50]
 This is equally true in the case of other forms of swindling under Article 316 of the
RPC, which is only punishable by arresto mayor in its minimum to medium periods and
a fine of not less tha the value of the damage caused but not more three times such value.
[51]
 Article 315 of the RPC.
[52]
 704 Phil. 463 (2013).
[53]
 Id. at 473.
[54]
 Section 1 of PD No. 1689.
[55]
 365 Phil. 531, 543 (1999).
[56]
 See Section 1 of PD No. 1689 in relation to Galvez v. Court of Appeals, supra note 52.
[57]
 Supra note 54.
[58]
 Supra note 52 at 474.
[59]
 Rollo, pp. 446, 482; see Comment of private respondent Manalo.
[60]
 Cf. People v. Romero, supra note 55 at 539 and People v. Menil, Jr., 394 Phil. 433,
441 (2000). The second paragraph of Section 1 of PD No. 1689 will only apply if the
group of swindlers does not meet the first standard but satisfies the second and third
standards of Galvez.
[61]
 Section 24 of PD No. 269, as amended, provides:

SECTION 24. Board of Directors.-

(a) The Management of a Cooperative shall be vested in its Board, subject to the
supervision and control of NEA which shall have the right to be represented and to
participate in all Board meetings and deliberations and to approve all policies and
resolutions.

xxxx
[62]
 387 Phil. 15, 25 (2000).
[63]
 Id. at 26.
[64]
 700 Phil. 632, 640 (2012).
[65]
 Supra note 61.
[66]
 CA rollo, pp. 355-356; BATELEC II Board Resolution No. 04-067 for the ITI
contract and BATELEC II Board Resolution No. 04-111 for the Supertrac contract.
[67]
 34 Phil. 227 (1916).

EN BANC
[ G.R. No. 173473, December 17, 2008 ]
PEOPLE OF THE PHILIPPINES, APPELLEE, VS. BETH TEMPORADA,
APPELLANT.

DECISION

YNARES-SANTIAGO, J.:

Before us for review is the February 24, 2006 Decision[1] of the Court of Appeals (CA),
affirming with modification the May 14, 2004 Decision[2] of the Regional Trial Court
(RTC) of Manila, Branch 33, convicting accused-appellant Beth Temporada of the crime
of large scale illegal recruitment, or violation of Article 38 of the Labor Code, as
amended, and five (5) counts of estafa under Article 315, par. (2)(a) of the Revised Penal
Code (RPC).

The antecedents, as found by the appellate court, are as follows:

From September 2001 to January 2002, accused Rosemarie "Baby" Robles, Bernadette
Miranda, Nenita Catacotan and Jojo Resco and appellant Beth Temporada, all employees
of the Alternative Travel and Tours Corporation (ATTC), recruited and promised
overseas employment, for a fee, to complainants Rogelio Legaspi, Jr. as technician in
Singapore, and Soledad Atle, Luz Minkay, Evelyn Estacio and Dennis Dimaano as
factory workers in Hongkong. The accused and appellant were then holding office at
Dela Rosa Street, Makati City but eventually transferred business to Discovery Plaza,
Ermita, Manila. After complainants had submitted all the requirements consisting of their
respective application forms, passports, NBI clearances and medical certificates, the
accused and appellant, on different dates, collected and received from them placement
fees in various amounts, viz: a) from Rogelio Legaspi, Jr. – 57,600.00; b) from Dennis
Dimaano – P66,520.00; c) from Evelyn Estacio – P88,520.00; d) from Soledad Atle –
P69,520.00 and e) from Luz Minkay – P69,520.00. As none of them was able to leave
nor recover the amounts they had paid, complainant lodged separate criminal complaints
against accused and appellant before the City Prosecutor of Manila. On November 29,
2002, Assistant City Prosecutor Restituto Mangalindan, Jr. filed six (6) Informations
against the accused and appellant, one for Illegal Recruitment in Large Scale under
Article 38 (a) of the Labor Code as amended, and the rest for five (5) counts
of estafa under Article 315 paragraph 2 (a) of the Revised Penal Code.
The Information for large scale illegal recruitment reads:

Criminal Case No. 02-208371:

"The undersigned accuses ROSEMARIE "BABY" ROBLES, BERNADETTE M.

MIRANDA, BETH TEMPORADA, NENITA CATACOTAN and JOJO RESCO x x x.

That in or about and during the period comprised between the months of September 2001
and January 2002, inclusive, in the City of Manila, Philippines, the said accused,
representing themselves to have the power and capacity to contract, enlist and transport
Filipino workers for employment abroad, did then and there willfully, unlawfully for a
fee, recruit and promise employment to REGELIO A. LEGASPI, JR., DENNIS T.
DIMAANO, EVELEYN V. ESTACIO, SOLEDAD B. ATTE and LUZ MINKAY
without first having secured the required license from the Department of Labor and
Employment as required by law, and charge or accept directly or indirectly from said
complainant[s] the amount of PH57,600.00, PH66,520.00, PH88,520.00, PH69,520.00,
PH69,520.00, respectively, as placement fees in consideration for their overseas
employment, which amounts are in excess of or greater than that specified in the
scheduled of allowable fees prescribed of the POEA and without reasons and without
fault of the said complainants, failed to actually deploy them and failed to reimburse
them the expenses they incurred in connection with the documentation and processing of
their papers for purposes of their deployment.

Contrary to law."
Except for the name of private complainant and the amount involved, the five (5)
Informations for estafa contain substantially identical averments as follows:
Criminal Case No. 02-208372:

"The undersigned accuses ROSEMARIE "BABY" ROBLES, BERNADETTE M.

MIRANDA, BETH TEMPORADA, NENITA CATACOTAN and JOJO RESCO x x x.

That in or about and during the period comprised between November 23, 2001 and
January 12, 2002, inclusive, in the City of Manila, Philippines, the said accused,
conspiring and confederating together and helping one another, did then and there
willfully, unlawfully and feloniously defraud ROGELIO A. LEGASPI, JR., in the
following manner, to wit: the said accused, by means of false manifestations and
fraudulent representations which they made to said ROGELIO A. LEGASPI, JR., prior to
and even simultaneous with the commission of the fraud, to the effect that they have the
power and capacity to recruit and employ ROGELIO A. LEGASPI, JR., as technician in
Singapore and could facilitate the processing of the pertinent papers if given the
necessary amount to meet the requirements thereof, induced and succeeded in inducing
said ROGELIO A. LEGASPI, JR., to give and deliver, as in fact he gave and delivered to
said accused the amount of P57,600.00 on the strength of said manifestations and
representations said accused well knowing that the same were false and fraudulent and
were made solely for the purpose of obtaining, as in fact they did obtain the amount of
P57,600.00, which amount, once in their possession, with intend to defraud, they
willfully, unlawfully and feloniously misappropriated, misapplied and converted the
same to their own personal use and benefit, to the damage and prejudice of said
ROGELIO A. LEGASPI, JR. in the aforesaid amount of P57,000.00 Philippine Currency.

Contrary to law."
The other four (4) Informations for estafa involve the following complainants and
amounts:
1. DENNIS T. DIMAANO P66,520.00
2. EVELYN V. ESTACIO P88,520.00
3. SOLEDAD B. ATLE P69,520.00
4. LUZ T. MINKAY           P69,520.00[3]        
Only appellant was apprehended and brought to trial, the other accused remained at large.
Upon arraignment, appellant pleaded not guilty and trial on the merits ensued. After joint
trial, on May 14, 2004, the RTC rendered judgment convicting appellant of all the
charges:
WHEREFORE, the prosecution having established the GUILT of accused Beth
Temporada BEYOND REASONABLE DOUBT, judgment is hereby rendered
CONVICTING the said accused, as principal of the offenses charged and she is
sentenced to suffer the penalty of LIFE IMPRISONMENT and a fine of Five Hundred
Thousand Pesos (P500,000.00) for illegal recruitment; and the indeterminate penalty of
four (4) years and two (2) months of prision correctional as minimum, to nine (9) years
and one (1) day of prision mayor, as maximum for the estafa committed against
complainant Rogelio A. Legaspi, Jr.; the indeterminate penalty of four (4) years and two
(2) months of prision correctional as minimum to ten (10) years and one day of prision
mayor as maximum each for the estafas committed against complainants, Dennis
Dimaano, Soledad B. Atte and Luz T. Minkay; and the indeterminate penalty of four (4)
years and two (2) months of prision correctional as minimum, to eleven (11) years and
one (1) day of prision mayor as maximum for the estafa committed against Evelyn
Estacio.

The accused is also ordered to pay jointly and severally the complainants actual damages
as follows:

1. Rogelio A. Legaspi Jr. P57,600.00

2. Dennis T. Dimaano   66,520.00
3. Evelyn V. Estacio   88,520.00
4. Soledad B. Atte   66,520.00
5. Luz T. Minkay   69,520.00
[4]
SO ORDERED.
In accordance with the Court's ruling in People v. Mateo,[5] this case was referred to the
CA for intermediate review. On February 24, 2006, the CA affirmed with modification
the Decision of the RTC:
WHEREFORE, with MODIFICATION to the effect that in Criminal Cases Nos. 02-
208373, 02-208375, & 02-208376, appellant is sentenced to suffer the indeterminate
penalty of six (6) years of prision correccional maximum, as minimum, to ten (10) years
and one (1) day of prision mayor maximum, as maximum; and in Criminal Case No. 02-
208374, she is sentenced to suffer the indeterminate penalty of eight (8) years and one (1)
day of prision mayor medium, as minimum, to twelve (12) years and one (1) day
of reclusion temporal minimum, as maximum, the appealed decision is AFFIRMED in all
other respects.[6]
Before this Court, appellant ascribes the lone error that the trial court gravely erred in
finding her guilty of illegal recruitment and five (5) counts of estafa despite the
insufficiency of the evidence for the prosecution.

We affirm the Decision of the CA, except as to the indeterminate penalties imposed for
the five (5) counts of estafa.

Article 13(b) of the Labor Code defines recruitment and placement thusly:

ART. 13. Definitions. – x x x

(b)    "Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which, in any manner, offers or promises for a
fee, employment to two or more persons shall be deemed engaged in recruitment and
placement.
To constitute illegal recruitment in large scale, three (3) elements must concur: (a) the
offender has no valid license or authority required by law to enable him to lawfully
engage in recruitment and placement of workers; (b) the offender undertakes any of the
activities within the meaning of "recruitment and placement" under Article 13(b) of the
Labor Code, or any of the prohibited practices enumerated under Article 34 of the said
Code (now Section 6 of R.A. No. 8042); and, (c) the offender committed the same
against three (3) or more persons, individually or as a group.[7]

In the case at bar, the foregoing elements are present. Appellant, in conspiracy with her
co-accused, misrepresented to have the power, influence, authority and business to obtain
overseas employment upon payment of a placement fee which was duly collected from
complainants Rogelio Legaspi, Dennis Dimaano, Evelyn Estacio, Soledad Atle and Luz
Minkay. Further, the certification[8] issued by the Philippine Overseas Employment
Administration (POEA) and the testimony of Ann Abastra Abas, a representative of said
government agency, established that appellant and her co-accused did not possess any
authority or license to recruit workers for overseas employment. And, since there were
five (5) victims, the trial court correctly found appellant liable for illegal recruitment in
large scale.

Appellant insists that she was merely an employee of ATTC and was just "echoing the
requirement of her employer." She further argues that the prosecution failed to prove that
she was aware of the latter's illegal activities and that she actively participated therein. In
essence, she controverts the factual findings of the lower courts.

The contention is untenable.

An employee of a company or corporation engaged in illegal recruitment may be held

liable as principal, together with his employer, if it is shown that he actively and
consciously participated in illegal recruitment.[9] Appellant actively took part in the illegal
recruitment of private complainants. Rogelio Legaspi testified that after introducing
herself as the General Manager of ATTC, appellant persuaded him to apply as a
technician in Singapore and assured him that there was a job market therefor. In addition
to the placement fee of P35,000.00 which he paid to accused Bernadette Miranda, he also
handed the amount of P10,000.00 to appellant who, in turn, issued him a receipt for the
total amount of P45,000.00. Upon the other hand, Soledad Atle and Luz Minkay, who
applied as factory workers in Hongkong through co-accused, Emily Salagonos, declared
that it was appellant who briefed them on the requirements for the processing of their
application, and assured them and Dennis Dimaano of immediate deployment for jobs
abroad. For her part, Evelyn Estacio testified that aside from the placement fee of
P40,000.00 that she paid to co-accused "Baby" Robles in connection with her purported
overseas employment, she also gave appellant P10,000.00 for which she was issued a
receipt for the amount of P5,000.00.

The totality of the evidence, thus, established that appellant acted as an indispensable
participant and effective collaborator of her co-accused in the illegal recruitment of
complainants. As aptly found by the CA:
Without doubt, all the acts of appellant, consisting of introducing herself to complainants
as general manager of ATTC, interviewing and entertaining them, briefing them on the
requirements for deployment and assuring them that they could leave immediately if they
paid the required amounts, unerringly show unity of purpose with those of her co-accused
in their scheme to defraud private complainants through false promises of jobs abroad.
There being conspiracy, appellant shall be equally liable for the acts of her co-accused
even if she herself did not personally reap the fruits of their execution. We quote with
approval the trial court's findings on the matter:
"xxx It is clear that said accused conspired with her co-accused Rosemarie "Baby"
Robles, Bernadette M. Miranda, Nenita Catacotan, and Jojo Resco in convincing
complainants xxx to apply for overseas jobs and giving complainants Soledad Atle, Luz
Minkay and Dennis Dimaano guarantee that they would be hired as factory workers in
Hongkong, complainant Rogelio Legaspi, as Technician in Singapore and Evelyn Estacio
as quality controller in a factory in Hongkong, despite the fact that the accused was not
licensed to do so.

It should be noted that all the accused were connected with the Alternative Travel and
Tours Corporation (ATTC). Accused Beth Temporada introduced herself as ATTC's
General Manager. Saod accused was also the one who received the P10,000.00 given by
complainant Rogelio Legaspi, Jr. and the P10,000.00 given by complainant Evelyn
Estacio as payment for their visa and plane ticket, respectively." [10]
Consequently, the defense of appellant that she was not aware of the illegal nature of the
activities of her co-accused cannot be sustained. Besides, even assuming arguendo that
appellant was indeed unaware of the illegal nature of said activities, the same is hardly a
defense in the prosecution for illegal recruitment. Under The Migrant Workers and
Overseas Filipinos Act of 1995, a special law, the crime of illegal recruitment in large
scale is malum prohibitum and not malum in se.[11]  Thus, the criminal intent of the
accused is not necessary and the fact alone that the accused violated the law warrants her
conviction.[12]

In the instant case, we find no reason to depart from the rule that findings of fact of the
trial court on the credibility of witnesses and their testimonies are generally accorded
great respect by an appellate court. The assessment of credibility of witnesses is a matter
best left to the trial court because it is in the position to observe that elusive and
incommunicable evidence of the witnesses' deportment on the stand while testifying,
which opportunity is denied to the appellate courts.[13]  Further, there is no showing of any
ill-motive on the part of the prosecution witnesses in testifying against appellant. Absent
such improper motive, the presumption is that they were not so actuated and their
testimony is entitled to full weight and credit.

Section 7(b) of R.A. No. 8042 prescribes the penalty of life imprisonment and a fine of
not less than P500,000.00 nor more than P1,000,000.00 for the crime of illegal
recruitment in large scale or by a syndicate. The trial court, therefore, properly meted the
penalty of life imprisonment and a fine of P500,000.00 on the appellant.

Anent the conviction of appellant for five (5) counts of estafa, we, likewise, affirm the
same. Well-settled is the rule that a person convicted for illegal recruitment under the
Labor Code may, for the same acts, be separately convicted for estafa under Article 315,
par. 2(a) of the RPC.[14]  The elements of estafa are: (1) the accused defrauded another by
abuse of confidence or by means of deceit; and (2) the offended party or a third party
suffered damage or prejudice capable of pecuniary estimation.[15]  The same evidence
proving appellant's criminal liability for illegal recruitment also established her liability
for estafa. As previously discussed, appellant together with her co-accused defrauded
complainants into believing that they had the authority and capability to send
complainants for overseas employment. Because of these assurances, complainants
parted with their hard-earned money in exchange for the promise of future work abroad.
However, the promised overseas employment never materialized and neither were the
complainants able to recover their money.

While we affirm the conviction for the five (5) counts of estafa, we find, however, that
the CA erroneously computed the indeterminate penalties therefor. The CA deviated from
the doctrine laid down in People v. Gabres;[16] hence its decision should be reversed with
respect to the indeterminate penalties it imposed. The reversal of the appellate court's
Decision on this point does not, however, wholly reinstate the indeterminate penalties
imposed by the trial court because the maximum terms, as determined by the latter, were
erroneously computed and must necessarily be rectified.

The prescribed penalty for estafa under Article 315, par. 2(d) of the RPC, when the
amount defrauded exceeds P22,000.00, is prisión correccional maximum to prisión
mayor minimum. The minimum term is taken from the penalty next lower or anywhere
within prisión correccional minimum and medium (i.e., from 6 months and 1 day to 4
years and 2 months). Consequently, the RTC correctly fixed the minimum term for the
five estafa cases at 4 years and 2 months of prisión correccional since this is within the
range of prisión correccional minimum and medium.

On the other hand, the maximum term is taken from the prescribed penalty of prisión
correccional maximum to prisión mayor minimum in its maximum period, adding 1 year
of imprisonment for every P10,000.00 in excess of P22,000.00, provided that the total
penalty shall not exceed 20 years. However, the maximum period of the prescribed
penalty of prisión correccional maximum to prisión mayor minimum is not prisión
mayor minimum as apparently assumed by the RTC. To compute the maximum period of
the prescribed penalty, prisión correccional maximum to prisión mayor minimum should
be divided into three equal portions of time each of which portion shall be deemed to
form one period in accordance with Article 65[17] of the RPC. Following this procedure,
the maximum period of prisión correccional maximum to prisión mayor minimum is
from 6 years, 8 months and 21 days to 8 years.[18]  The incremental penalty, when proper,
shall thus be added to anywhere from 6 years, 8 months and 21 days to 8 years, at the
discretion of the court.[19]

In computing the incremental penalty, the amount defrauded shall be subtracted by

P22,000.00, and the difference shall be divided by P10,000.00. Any fraction of a year
shall be discarded as was done starting with the case of People v. Pabalan[20] in
consonance with the settled rule that penal laws shall be construed liberally in favor of
the accused. The doctrine enunciated in People v. Benemerito[21] insofar as the fraction of
a year was utilized in computing the total incremental penalty should, thus, be modified.
In accordance with the above procedure, the maximum term of the indeterminate
sentences imposed by the RTC should be as follows:
In Criminal Case No. 02-208372, where the amount defrauded was P57,600.00, the RTC
sentenced the accused to an indeterminate penalty of 4 years and 2 months of prisión
correccional as minimum, to 9 years and 1 day of prisión mayor as maximum. Since the
amount defrauded exceeds P22,000.00 by P35,600.00, 3 years shall be added to the
maximum period of the prescribed penalty (or added to anywhere from 6 years, 8 months
and 21 days to 8 years, at the discretion of the court). The lowest maximum term,
therefore, that can be validly imposed is 9 years, 8 months and 21 days of prisión mayor,
and not 9 years and 1 day of prisión mayor.

In Criminal Case Nos. 02-208373, 02-208375, and 02-208376, where the amounts
defrauded were P66,520.00, P69,520.00, and P69,520.00, respectively, the accused was
sentenced to an indeterminate penalty of 4 years and 2 months of prisión correccional as
minimum, to 10 years and 1 day of prisión mayor as maximum for each of the aforesaid
three estafa cases. Since the amounts defrauded exceed P22,000.00 by P44,520.00,
P47,520.00, and P47,520.00, respectively, 4 years shall be added to the maximum period
of the prescribed penalty (or added to anywhere from 6 years, 8 months and 21 days to 8
years, at the discretion of the court). The lowest maximum term, therefore, that can be
validly imposed is 10 years, 8 months and 21 days of prisión mayor, and not 10 years and
1 day of prisión mayor.

Finally, in Criminal Case No. 02-208374, where the amount defrauded was P88,520.00,
the accused was sentenced to an indeterminate penalty of 4 years and 2 months of prisión
correccional as minimum, to 11 years and 1 day of prisión mayor as maximum. Since the
amount defrauded exceeds P22,000.00 by P66,520.00, 6 years shall be added to the
maximum period of the prescribed penalty (or added to anywhere from 6 years, 8 months
and 21 days to 8 years, at the discretion of the court). The lowest maximum term,
therefore, that can be validly imposed is 12 years, 8 months and 21 days of reclusión
temporal, and not 11 years and 1 day of prisión mayor.

Response to the dissent.

In the computation of the indeterminate sentence for estafa under Article 315, par. 2(a) of
the Revised Penal Code (RPC), the Court has consistently followed the doctrine
espoused in Pabalan and more fully explained in Gabres. The dissent argues
that Gabres should be reexamined and abandoned.

We sustain Gabres.

I.

The formula proposed in the Dissenting Opinion of Mr. Justice Ruben T. Reyes, i.e., the
maximum term shall first be computed by applying the incremental penalty rule, and
thereafter the minimum term shall be determined by descending one degree down the
scale of penalties from the maximum term, is a novel but erroneous interpretation of the
ISL in relation to Article 315, par. 2(a) of the RPC. Under this interpretation, it is not
clear how the maximum and minimum terms shall be computed. Moreover, the legal
justification therefor is not clear because the meaning of the terms "penalty," "prescribed
penalty," "penalty actually imposed," "minimum term," "maximum term," "penalty next
lower in degree," and "one degree down the scale of penalties" are not properly set out
and are, at times, used interchangeably, loosely and erroneously.

For purposes of this discussion, it is necessary to first clarify the meaning of certain terms
in the sense that they will be used from here on. Later, these terms shall be aligned to
what the dissent appears to be proposing in order to clearly address the points raised by
the dissent.

The RPC provides for an initial penalty as a general prescription for the felonies defined
therein which consists of a range of period of time.  This is what is referred to as the
"prescribed penalty." For instance, under Article 249[22] of the RPC, the prescribed
penalty for homicide is reclusión temporal which ranges from 12 years and 1 day to 20
years of imprisonment. Further, the Code provides for attending or modifying
circumstances which when present in the commission of a felony affects the computation
of the penalty to be imposed on a convict. This penalty, as thus modified, is referred to as
the "imposable penalty." In the case of homicide which is committed with one ordinary
aggravating circumstance and no mitigating circumstances, the imposable penalty under
the RPC shall be the prescribed penalty in its maximum period. From this imposable
penalty, the court chooses a single fixed penalty (also called a straight penalty) which is
the "penalty actually imposed" on a convict, i.e., the prison term he has to serve.

Concretely, in U.S. v. Saadlucap,[23] a pre-ISL case, the accused was found guilty of

homicide with a prescribed penalty of reclusión temporal. Since there was one ordinary
aggravating circumstance and no mitigating circumstances in this case, the imposable
penalty is reclusión temporal in its maximum period, i.e., from 17 years, 4 months and 1
day to 20 years. The court then had the discretion to impose any prison term provided it is
within said period, so that the penalty actually imposed on the accused was set at 17
years, 4 months and 1 day of reclusión temporal,[24] which is a single fixed penalty, with
no minimum or maximum term.

With the passage of the ISL, the law created a prison term which consists of a minimum
and maximum term called the indeterminate sentence.[25]  Section 1 of the ISL provides
—
SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the
Revised Penal Code, or its amendments, the court shall sentence the accused to an
indeterminate sentence the maximum term of which shall be that which, in view of the
attending circumstances, could be properly imposed under the rules of said Code, and the
minimum which shall be within the range of the penalty next lower to that prescribed by
the Code for the offense; x x x.
Thus, the maximum term is that which, in view of the attending circumstances, could be
properly imposed under the RPC. In other words, the penalty actually imposed under
the pre-ISL regime became the maximum term under the ISL regime. Upon the
other hand, the minimum term shall be within the range of the penalty next lower to the
prescribed penalty. To illustrate, if the case of Saadlucap was decided under the ISL
regime, then the maximum term would be 17 years, 4 months and 1 day of reclusión
temporal and the minimum term could be anywhere within the range of prisión mayor (6
years and 1 day to 12 years) which is the penalty next lower to reclusión temporal.
Consequently, an indeterminate sentence of 10 years of prisión mayor as minimum to 17
years, 4 months and 1 day of reclusión temporal as maximum could have possibly been
imposed.

If we use the formula as proposed by the dissent, i.e., to compute the minimum term
based on the maximum term after the attending or modifying circumstances are
considered, the basis for computing the minimum term, under this interpretation, is the
imposable penalty[26] as hereinabove defined. This interpretation is at odds with Section 1
of the ISL which clearly states that the minimum of the indeterminate sentence shall be
"within the range of the penalty next lower to that prescribed by the Code for the
offense." Consequently, the basis for fixing the minimum term is the prescribed penalty,
[27]
 and not the imposable penalty.

In People v. Gonzales,[28] the Court held that the minimum term must be based on the
penalty prescribed by the Code for the offense "without regard to circumstances
modifying criminal liability."[29] The Gonzales' ruling that the minimum term must be
based on the prescribed penalty "without regard to circumstances modifying criminal
liability" is only a restatement of Section 1 of the ISL that the minimum term shall be
taken from within the range of the penalty next lower to the prescribed penalty (and from
nowhere else).[30]

Further, the dissent proceeds from the erroneous premise that its so-called "regular
formula" has generally been followed in applying the ISL. To reiterate, according to the
dissent, the "regular formula" is accomplished by first determining the maximum term
after considering all the attending circumstances; thereafter, the minimum term is arrived
at by going one degree down the scale from the maximum term. As previously discussed,
this essentially means, using the terms as earlier defined, that the minimum term shall be
taken from the penalty next lower to the imposable penalty (and not the prescribed
penalty.) In more concrete terms and using the previous example of homicide with one
ordinary aggravating circumstance, this would mean that the minimum term for homicide
will no longer be based on reclusión temporal (i.e., the prescribed penalty for homicide)
but reclusión temporal in its maximum period (i.e., the imposable penalty for homicide
with one ordinary aggravating circumstance) so much so that the minimum term shall be
taken from reclusión temporal in its medium period (and no longer from prisión
mayor) because this is the penalty next lower to reclusión temporal in its maximum
period. The penalty from which the minimum term is taken is, thus, significantly
increased. From this example, it is not difficult to discern why this interpretation
radically departs from how the ISL has generally been applied by this Court. The
dissent's "regular formula" is, therefore, anything but regular.

In fine, the "regular formula" espoused by the dissent deviates from the ISL and
established jurisprudence and is, thus, tantamount to judicial legislation.

II.

There is no absurdity or injustice in fixing or "stagnating" the minimum term within the
range of prisión correccional minimum and medium (i.e., from 6 months and 1 day to 4
years and 2 months). Preliminarily, it must be emphasized that the minimum term taken
from the aforementioned range of penalty need not be the same for every case
of estafa when the amount defrauded exceeds P12,000.00. In People v. Ducosin,[31] the
Court provided some guidelines in imposing the minimum term from the range of the
penalty next lower to the prescribed penalty:
We come now to determine the "minimum imprisonment period" referred to in Act No.
4103. Section 1 of said Act provides that this "minimum which shall not be less than the
minimum imprisonment period of the penalty next lower to that prescribed by said Code
for the offense."[32]  We are here upon new ground. It is in determining the "minimum"
penalty that Act No. 4103 confers upon the courts in the fixing of penalties the widest
discretion that the courts have ever had. The determination of the "minimum" penalty
presents two aspects: first, the more or less mechanical determination of the extreme
limits of the minimum imprisonment period; and second, the broad question of the factors
and circumstances that should guide the discretion of the court in fixing the minimum
penalty within the ascertained limits.

xxxx

We come now to the second aspect of the determination of the minimum penalty, namely,
the considerations which should guide the court in fixing the term or duration of the
minimum period of imprisonment. Keeping in mind the basic purpose of the
Indeterminate Sentence Law "to uplift and redeem valuable human material, and prevent
unnecessary and excessive deprivation of personal liberty and economic usefulness"
(Message of the Governor-General, Official Gazette No. 92, vol. XXXI, August 3, 1933),
it is necessary to consider the criminal, first, as an individual and, second, as a member of
society. This opens up an almost limitless field of investigation and study which it is the
duty of the court to explore in each case as far as is humanly possible, with the end in
view that penalties shall not be standardized but fitted as far as is possible to the
individual, with due regard to the imperative necessity of protecting the social order.
Considering the criminal as an individual, some of the factors that should be considered
are: (1) His age, especially with reference to extreme youth or old age; (2) his general
health and physical condition; (3) his mentality, heredity and personal habits; (4) his
previous conduct, environment and mode of life (and criminal record if any); (5) his
previous education, both intellectual and moral; (6) his proclivities and aptitudes for
usefulness or injury to society; (7) his demeanor during trial and his attitude with regard
to the crime committed; (8) the manner and circumstances in which the crime was
committed; (9) the gravity of the offense (note that section 2 of Act No. 4103 excepts
certain grave crimes — this should be kept in mind in assessing the minimum penalties
for analogous crimes).

In considering the criminal as a member of society, his relationship, first, toward his
dependents, family and associates and their relationship with him, and second, his
relationship towards society at large and the State are important factors. The State is
concerned not only in the imperative necessity of protecting the social organization
against the criminal acts of destructive individuals but also in redeeming the individual
for economic usefulness and other social ends. In a word, the Indeterminate Sentence
Law aims to individualize the administration of our criminal law to a degree not
heretofore known in these Islands. With the foregoing principles in mind as guides, the
courts can give full effect to the beneficent intention of the Legislature.[33]
Admittedly, it is possible that the court, upon application of the guidelines in Ducosin,
will impose the same minimum term to one who commits an estafa involving P13,000.00
and another involving P130 million. In fact, to a lesser degree, this is what happened in
the instant case where the trial court sentenced the accused to the same minimum term of
4 years and 2 months of prisión correccional in Criminal Case Nos. 02-208372, 02-
208373, 02-208375, 02-208376, and 02-208374 where the amounts defrauded were
P57,600.00, P66,520.00, P69,520.00, P69,520.00 and P88,520.00, respectively. 
However, there is no absurdity and injustice for two reasons.

One, while it is possible that the minimum term imposed by a court would be the same,
the maximum term would be greater for the convict who committed estafa involving
P130 million (which would be 20 years of reclusion temporal) than the convict who
swindled P13,000.00 (which could be anywhere from prisión correccional maximum
to prisión mayor minimum or from 4 years, 2 months and 1 day to 8 years).[34]  Assuming
that both convicts qualify for parole after serving the same minimum term, the convict
sentenced to a higher maximum term would carry a greater "burden" with respect to the
length of parole surveillance which he may be placed under, and the prison term to be
served in case he violates his parole as provided for in Sections 6[35] and 8[36] of the ISL.
Under Section 6, the convict shall be placed under a period of surveillance equivalent to
the remaining portion of the maximum sentence imposed upon him or until final release
and discharge by the Board of Pardon and Paroles. Further, the convict with the higher
maximum term would have to serve a longer period upon his re-commitment in prison in
case he violates his parole because he would have to serve the remaining portion of the
maximum term, unless the Board of Pardon and Paroles shall, in its discretion, grant a
new parole to the said convict as provided for in Section 8.

Although the differences in treatment are in the nature of potential liabilities, to this
limited extent, the ISL still preserves the greater degree of punishment in the RPC for a
convict who commits estafa involving a greater amount as compared to one who
commits estafa involving a lesser amount. Whether these differences in treatment are
sufficient in substance and gravity involves a question of wisdom and expediency of
the ISL that this Court cannot delve into.

Two, the rule which provides that the minimum term is taken from the range of the
penalty next lower to the prescribed penalty is, likewise, applicable to other offenses
punishable under the RPC. For instance, the minimum term for an accused guilty of
homicide with one generic mitigating circumstance vis-à-vis an accused guilty of
homicide with three ordinary aggravating circumstances would both be taken
from prisión mayor — the penalty next lower to eclusion temporal. Evidently, the
convict guilty of homicide with three ordinary aggravating circumstances committed a
more perverse form of the felony. Yet it is possible that the court, after applying the
guidelines in Ducosin, will impose upon the latter the same minimum term as the accused
guilty of homicide with one generic mitigating circumstance. This reasoning can be
applied mutatis mutandis to most of the other offenses punishable under the RPC. Should
we then conclude that the ISL creates absurd results for these offenses as well?

In fine, what is perceived as absurd and unjust is actually the intent of the legislature to
be beneficial to the convict in order to "uplift and redeem valuable human material, and
prevent unnecessary and excessive deprivation of personal liberty and economic
usefulness."[37]  By the legislature's deliberate design, the range of penalty from which the
minimum term is taken remains fixed and only the range of penalty from which the
maximum term is taken changes depending on the number and nature of the attending
circumstances. Again, the reason why the legislature elected this mode of beneficence to
a convict revolves on questions of wisdom and expediency which this Court has no
power to review. The balancing of the State's interests in deterrence and retributive
justice vis-à-vis reformation and reintegration of convicts to society through penal laws
belongs to the exclusive domain of the legislature.

III.

People v. Romero,[38] De Carlos v. Court of Appeals,[39] Salazar v. People,[40] People v.

Dinglasan[41] and, by analogy, People v. Dela Cruz[42] do not support the formula being
proposed by the dissent.
The instant case involves a violation of Article 315, par. 2(a) of the RPC. [43] The penalty
for said violation is—
ARTICLE 315. Swindling (Estafa). — Any person who shall defraud another by any of
the means mentioned hereinbelow shall be punished by:

1st. The penalty of prisión correccional in its maximum period to prisión mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years.
In such cases, and in connection with the accessory penalties which may be imposed and
for the purpose of the other provisions of this Code, the penalty shall be termed prisión
mayor or reclusión temporal, as the case may be. x x x
In contrast, Romero, De Carlos, and Salazar involved violations of Article 315 of the
RPC as amended by Presidential Decree (P.D.) No. 1689[44] because: (1) the funds
defrauded were contributed by stockholders or solicited by corporations/associations
from the general public, (2) the amount defrauded was greater than P100,000.00, and (3)
the estafa was not committed by a syndicate. Section 1 of P.D. No. 1689 provides—
Sec. 1. Any person or persons who shall commit estafa or other forms of swindling as
defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished
by life imprisonment to death if the swindling (estafa) is committed by a syndicate
consisting of five or more persons formed with the intention of carrying out the unlawful
or illegal act, transaction, enterprise or scheme, and the defraudation results in the
misappropriation of money contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)", or farmers association, or of funds solicited by
corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall
be reclusión temporal to reclusión perpetua if the amount of the fraud exceeds
100,000 pesos. (Emphasis supplied)
Since the prescribed penalty is reclusión temporal to reclusión perpetua, the minimum
terms were taken from prisión mayor, which is the penalty next lower to the prescribed
penalty.[45]  As can be seen, these cases involved a different penalty structure that does
not make use of the incremental penalty rule due to the amendatory law. Thus, the
comparison of these cases with Gabres is improper.

Meanwhile, in Dinglasan, the felony committed was estafa through bouncing checks

which is punishable under Article 315 par. 2(d) of the RPC as amended by Republic
Act (RA) No. 4885[46] —
Sec. 1. Section Two, Paragraph (d), Article Three hundred fifteen of Act Numbered
Thirty-eight hundred and fifteen is hereby amended to read as follows:
"Sec. 2. By means of any of the following false pretenses or fraudulent acts executed
prior to or simultaneously with the commission of the fraud:

"(d)   By postdating a check, or issuing a check in payment of an obligation when the

offender had no funds in the bank, or his funds deposited therein were not sufficient to
cover the amount of the check. The failure of the drawer of the check to deposit the
amount necessary to cover his check within three (3) days from receipt of notice from the
bank and/or the payee or holder that said check has been dishonored for lack or
insufficiency of funds shall be prima facie evidence of deceit constituting false pretense
or fraudulent act."
and P.D. No. 818[47] —
Sec. 1. Any person who shall defraud another by means of false pretenses or fraudulent
acts as defined in paragraph 2(d) of Article 315 of the Revised Penal Code, as amended
by Republic Act No. 4885, shall be punished by:

1st. The penalty of reclusión temporal if the amount of the fraud is over 12,000 pesos
but not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty
provided in this paragraph shall be imposed in its maximum period, adding one year for
each additional 10,000 pesos but the total penalty which may be imposed shall in no case
exceed thirty years. In such cases, and in connection with the accessory penalties which
may be imposed under the Revised Penal Code, the penalty shall be termed reclusión
perpetua; x x x (Emphasis supplied)
Here, the prescribed penalty of prisión correccional maximum to prisión
mayor minimum was increased to reclusión temporal by the amendatory law.
Consequently, the penalty next lower to reclusión temporal is prisión mayor from which
the minimum term was taken. This is the reason for the higher minimum term in this case
as compared to Gabres. In fact, Dinglasan is consistent with Gabres—
Since the face value of Check No. 029021, for which appellant is criminally liable
for estafa, exceeds P22,000, the penalty abovecited must be "imposed in its maximum
period, adding 1 year for each additional P10,000." Pursuant to People vs. Hernando,
G.R. No. 125214, Oct. 28, 1999, an indeterminate sentence shall be imposed on the
accused, computed favorably to him. In this case, the indeterminate sentence should be
computed based on the maximum period of reclusión temporal as maximum, which is
from 17 years, 4 months, and 1 day to 20 years. The minimum period of the sentence
should be within the penalty next lower in degree as provided in the Revised Penal
Code, i.e., prisión mayor, which is from 6 years and 1 day to 12 years
imprisonment. Considering that the excess of the fraud committed, counting from the
base of P22,000, is only P4,400, which is less than the P10,000 stated in P.D. 818, there
is no need to add one year to the maximum penalty abovecited.[48] (Emphasis supplied)
As in Gabres, the penalty next lower (i.e., prisión mayor) was determined without
considering in the meantime the effect of the amount defrauded in excess of P22,000.00
on the prescribed penalty (i.e., reclusión temporal).
Finally, Dela Cruz involved a case for qualified theft. The prescribed penalty for
qualified theft is two degrees higher than simple theft. Incidentally, the penalty structure
for simple theft[49] and estafa is similar in that both felonies (1) requires that the
prescribed penalty be imposed in its maximum period when the value of the thing stolen
or the amount defrauded, as the case may be, exceeds P22,000.00, and (2) provides for an
incremental penalty of 1 year imprisonment for every P10,000.00 in excess of
P22,000.00. It should be pointed out, however, that the prescribed penalty for simple theft
is prisión mayor minimum and medium while in estafa it is lower at prisión
correccional maximum to prisión mayor minimum.

Being two degrees higher, the prescribed penalty for qualified theft is, thus, reclusión
temporal medium and maximum, while the minimum term is taken from the range
of prisión mayor maximum to reclusión temporal minimum, which is the penalty next
lower to reclusión temporal medium and maximum. The penalty next lower to the
prescribed penalty is determined without first considering the amount stolen in excess of
P22,000.00 consistent with Gabres. In fact, Dela Cruz expressly cites Gabres—
Applying the Indeterminate Sentence Law, the minimum of the indeterminate penalty
shall be anywhere within the range of the penalty next lower in degree to that prescribed
for the offense, without first considering any modifying circumstance attendant to
the commission of the crime. Since the penalty prescribed by law is reclusión
temporal medium and maximum, the penalty next lower would be prisión mayor in its
maximum period to reclusión temporal in its minimum period. Thus, the minimum of the
indeterminate sentence shall be anywhere within ten (10) years and one (1) day to
fourteen (14) years and eight (8) months.

The maximum of the indeterminate penalty is that which, taking into consideration the
attending circumstances, could be properly imposed under the Revised Penal Code. Since
the amount involved in the present case exceeds P22,000.00, this should be taken as
analogous to modifying circumstances in the imposition of the maximum term of the
full indeterminate sentence, not in the initial determination of the indeterminate
penalty. (citing Gabres) Thus, the maximum term of the indeterminate penalty in this
case is the maximum period of reclusión temporal medium and maximum, which ranges
from eighteen (18) years, two (2) months, and twenty one (21) days to twenty (20) years,
as computed pursuant to Article 65, in relation to Article 64 of the Revised Penal Code.
[50]
 (Emphasis supplied)
Clearly, none of these cases supports the Dissenting Opinion's thesis that the
minimum term should be computed based on the maximum term. Quite the
contrary, Dinglasan and Dela Cruz are consistent with Gabres.

IV.

The argument that the incremental penalty rule should not be considered as analogous to
a modifying circumstance stems from the erroneous interpretation that the "attending
circumstances" mentioned in Section 1 of the ISL are limited to those modifying
circumstances falling within the scope of Articles 13 and 14 of the RPC. Section 1 of the
ISL is again quoted below —
SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the
Revised Penal Code, or its amendments, the court shall sentence the accused to an
indeterminate sentence the maximum term of which shall be that which, in view of the
attending circumstances, could be properly imposed under the rules of said Code,
and the minimum which shall be within the range of the penalty next lower to that
prescribed by the Code for the offense; x x x (Emphasis supplied)
The plain terms of the ISL show that the legislature did not intend to limit "attending
circumstances" as referring to Articles 13 and 14 of the RPC. If the legislature intended
that the "attending circumstances" under the ISL be limited to Articles 13 and 14, then it
could have simply so stated. The wording of the law clearly permits other modifying
circumstances outside of Articles 13 and 14 of the RPC to be treated as "attending
circumstances" for purposes of the application of the ISL, such as quasi-recidivism under
Article 160[51] of the RPC. Under this provision, "any person who shall commit a felony
after having been convicted by final judgment, before beginning to serve such sentence,
or while serving the same, shall be punished by the maximum period of the penalty
prescribed by law for the new felony." This circumstance has been interpreted by the
Court as a special aggravating circumstance where the penalty actually imposed is taken
from the prescribed penalty in its maximum period without regard to any generic
mitigating circumstances.[52]  Since quasi-recidivism is considered as merely a special
aggravating circumstance, the penalty next lower in degree is computed based on the
prescribed penalty without first considering said special aggravating circumstance as
exemplified in People v. Manalo[53] and People v. Balictar.[54]

The question whether the incremental penalty rule is covered within the letter and spirit
of "attending circumstances" under the ISL was answered in the affirmative by the Court
in Gabres when it ruled therein that the incremental penalty rule is analogous to a
modifying circumstance.

Article 315 of the RPC pertinently provides —

ARTICLE 315. Swindling (Estafa). — Any person who shall defraud another by any of
the means mentioned hereinbelow shall be punished by:

1st. The penalty of prisión correccional in its maximum period to prisión mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years.
In such cases, and in connection with the accessory penalties which may be imposed and
for the purpose of the other provisions of this Code, the penalty shall be termed prisión
mayor or reclusión temporal, as the case may be. x x x
Under Gabres, prisión correccional maximum to prisión mayor minimum is the
prescribed penalty[55] for estafa when the amount defrauded exceeds P22,000.00. An
amount defrauded in excess of P22,000.00 is effectively considered as a special
aggravating circumstance in the sense that the penalty actually imposed shall be taken
from the prescribed penalty in its maximum period without regard to any generic
mitigating circumstances. Consequently, the penalty next lower in degree is still based on
the prescribed penalty without in the meantime considering the effect of the amount
defrauded in excess of P22,000.00.

What is unique, however, with the afore-quoted provision is that when the amount
defrauded is P32,000.00 or more, the prescribed penalty is not only imposed in its
maximum period but there is imposed an incremental penalty of 1 year imprisonment for
every P10,000.00 in excess of P22,000.00, provided that the total penalty which may be
imposed shall not exceed 20 years. This incremental penalty rule is a special rule
applicable to estafa and theft. In the case of estafa, the incremental penalty is added to the
maximum period of the prescribed penalty (or to anywhere from 6 years, 8 months and
21 days to 8 years) at the discretion of the court, in order to arrive at the penalty actually
imposed (i.e., the maximum term, within the context of the ISL).

This unique characteristic of the incremental penalty rule does not pose any obstacle to
interpreting it as analogous to a modifying circumstance, and, hence, falling within the
letter and spirit of "attending circumstances" for purposes of the application of the ISL.
Under the wording of the ISL, "attending circumstances" may be reasonably interpreted
as referring to such circumstances that are applied in conjunction with certain rules in the
Code in order to determine the penalty to be actually imposed based on the prescribed
penalty of the Code for the offense. The incremental penalty rule substantially meets this
standard. The circumstance is the amount defrauded in excess of P22,0000.00 and the
incremental penalty rule is utilized to fix the penalty actually imposed. At its core, the
incremental penalty rule is merely a mathematical formula for computing the penalty to
be actually imposed using the prescribed penalty as starting point. Thus, it serves the
same function of determining the penalty actually imposed as the modifying
circumstances under Articles 13, 14, and 160 of the RPC, although the manner by which
the former accomplishes this function differs with the latter. For this reason, the
incremental penalty rule may be considered as merely analogous to modifying
circumstances. Besides, in case of doubt as to whether the incremental penalty rule falls
within the scope of "attending circumstances" under the ISL, the doubt should be
resolved in favor of inclusion because this interpretation is more favorable to the
accused following the time-honored principle that penal statutes are construed strictly
against the State and liberally in favor of the accused.[56] Thus, even if the Dissenting
Opinion's interpretation is gratuitously conceded as plausible, as between Gabres and the
dissent's interpretation, Gabres should be sustained since it is the interpretation more
favorable to the accused.
 V.

The claim that the maximum term should only be one degree away from the minimum
term does not make sense within the meaning of "degrees" under the RPC because
the minimum and maximum terms consist of single fixed penalties. At any rate, the
point seems to be that the penalty from which the minimum term is taken should only be
one degree away from the penalty from which the maximum term is taken.

As a general rule, the application of modifying circumstances, the majority being generic
mitigating and ordinary aggravating circumstances, does not result to a maximum term
fixed beyond the prescribed penalty. At most, the maximum term is taken from the
prescribed penalty in its maximum period. Since the maximum term is taken from the
prescribed penalty and the minimum term is taken from the next lower penalty, then, in
this limited sense, the difference would naturally be only one degree. Concretely, in the
case of homicide with one ordinary aggravating circumstance, the maximum term is
taken from reclusión temporal in its maximum period which is within the prescribed
penalty of reclusión temporal, while the minimum term is taken from prisión
mayor which is the penalty next lower to reclusión temporal; hence, the one-degree
difference observed by the dissent.

In comparison, under the incremental penalty rule, the maximum term can exceed the
prescribed penalty. Indeed, at its extreme, the maximum term can be as high as 20 years
of reclusión temporal while the prescribed penalty remains at prisión
correccional maximum to prisión mayor minimum, hence, the penalty next lower to the
prescribed penalty from which the minimum term is taken remains at anywhere
within prisión correccional minimum and medium, or from 6 months and 1 day to 4
years and 2 months. In this sense, the incremental penalty rule deviates from the afore-
stated general rule.[57]

However, it is one thing to say that, generally, the penalty from which the minimum term
is taken is only one degree away from the penalty from which the maximum term is
taken, and completely another thing to claim that the penalty from which the minimum
term is taken should only be one degree away from the penalty from which the maximum
term is taken.

The one-degree difference is merely the result of a general observation from the

application of generic mitigating and ordinary aggravating circumstances in the RPC in
relation to the ISL. Nowhere does the ISL refer to the one-degree difference as an
essential requisite of an "attending circumstance." If the application of the incremental
penalty rule deviates from the one-degree difference, this only means that the law itself
has provided for an exception thereto. Verily, the one-degree difference is a mere
consequence of the generic mitigating and ordinary aggravating circumstances created by
the legislature. The difficulty of the dissent with the deviation from its so-called one-
degree difference rule seems to lie with the inability to view these "attending
circumstances" as mere artifacts or creations of the legislature. It does not make sense to
argue that the legislature cannot formulate "attending circumstances" that operate
differently than these generic mitigating and ordinary aggravating circumstances, and
that, expectedly, leads to a different result from the one-degree difference—for it would
be to say that the creator can only create one specie of creatures. Further, it should be
reasonably assumed that the legislature was aware of these special circumstances, like the
incremental penalty rule or privileged mitigating circumstances, at the time it enacted the
ISL as well as the consequent effects of such special circumstances on the application of
said law. Thus, for as long as the incremental penalty rule is consistent with the letter and
spirit of "attending circumstances" under the ISL, there is no obstacle to its treatment as
such.

VI.

Much has been said about the leniency, absurdity and unjustness of the result
under Gabres; the need to adjust the minimum term of the indeterminate penalty to make
it commensurate to the gravity of the estafa committed; the deterrence effect of a stiffer
imposition of penalties; and a host of other similar reasons to justify the reversal
of Gabres. However, all these relate to policy considerations beyond the wording of the
ISL in relation to the RPC; considerations that if given effect essentially seek to rewrite
the law in order to conform to one notion (out of an infinite number of such notions) of
wisdom and efficacy, and, ultimately, of justice and mercy.

This Court is not the proper forum for this sort of debate. The Constitution forbids it, and
the principle of separation of powers abhors it. The Court applies the law as it finds it and
not as how it thinks the law should be. Not too long ago in the case of People v.
Veneracion,[58] this Court spoke about the dangers of allowing one's personal beliefs to
interfere with the duty to uphold the Rule of Law which, over a decade later, once again
assumes much relevance in this case:
Obedience to the rule of law forms the bedrock of our system of justice. If judges, under
the guise of religious or political beliefs were allowed to roam unrestricted beyond
boundaries within which they are required by law to exercise the duties of their office, the
law becomes meaningless. A government of laws, not of men excludes the exercise of
broad discretionary powers by those acting under its authority. Under this system, judges
are guided by the Rule of Law, and ought "to protect and enforce it without fear or
favor," resist encroachments by governments, political parties, or even the interference of
their own personal beliefs.[59]
VII.

Mr. Justice Adolfo S. Azcuna proposes an interpretation of the incremental penalty rule
based on the phrases "shall be termed prisión mayor or reclusión temporal, as the case
may be" and "for the purpose of the other provisions of this Code" found in the last
sentence of said rule, viz:
ARTICLE 315. Swindling (Estafa). — Any person who shall defraud another by any of
the means mentioned hereinbelow shall be punished by:

1st. The penalty of prisión correccional in its maximum period to prisión mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall not exceed twenty
years. In such cases, and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code, the penalty shall
be termed prisión mayor or reclusión temporal, as the case may be. x x x (Emphasis
supplied)
While this interpretation is plausible, Gabres should still be sustained because in
construing penal statutes, as between two reasonable[60] but contradictory constructions,
the one more favorable to the accused should be upheld, which in this case is Gabres.
The reason for this rule is elucidated in an eminent treatise on statutory construction in
this wise:
It is an ancient rule of statutory construction that penal statutes should be strictly
construed against the government or parties seeking to enforce statutory penalties and in
favor of the persons on whom penalties are sought to be imposed. This simply means
that words are given their ordinary meaning and that any reasonable doubt about the
meaning is decided in favor of anyone subjected to a criminal statute. This canon of
interpretation has been accorded the status of a constitutional rule under principles of due
process, not subject to abrogation by statute.

The rule that penal statutes should be strictly construed has several justifications based on
a concern for the rights and freedoms of accused individuals. Strict construction can
assure fairness when courts understand it to mean that penal statutes must give a clear
and unequivocal warning, in language people generally understand, about actions that
would result in liability and the nature of potential penalties. A number of courts have
said:
... the rule that penal statutes are to be strictly construed ... is a fundamental principle
which in our judgment will never be altered. Why? Because the lawmaking body owes
the duty to citizens and subjects of making unmistakably clear those acts for the
commission of which the citizen may lose his life or liberty. Therefore, all the canons of
interpretation which apply to civil statutes apply to criminal statutes, and in addition there
exists the canon [of strict construction] .... The burden lies on the lawmakers, and
inasmuch as it is within their power, it is their duty to relieve the situation of all doubts.

xxxx
Additionally, strict construction protects the individual against arbitrary discretion by
officials and judges. As one judge noted: "the courts should be particularly careful that
the bulwarks of liberty are not overthrown, in order to reach an offender who is, but
perhaps ought not to be, sheltered behind them."

But also, for a court to enforce a penalty where the legislature has not clearly and
unequivocally prescribed it could result in judicial usurpation of the legislative
function. One court has noted that the reason for the rule is "to guard against the
creation, by judicial construction, of criminal offenses not within the contemplation of the
legislature." Thus the rule requires that before a person can be punished his case must be
plainly and unmistakably within the statute sought to be applied. And, so, where a statute
is open to more than one interpretation, it is strictly construed against the state. Courts
further rationalize this application of the rule of strict construction on the ground that it
was not the defendant in the criminal action who caused ambiguity in the statute. Along
these same lines, courts also assert that since the state makes the laws, they should be
most strongly construed against it.[61] (Emphasis supplied; citations omitted)
Thus, in one case, where the statute was ambiguous and permitted two reasonable
interpretations, the construction which would impose a less severe penalty was adopted.
[62]

WHEREFORE, the Decision of the Court of Appeals is MODIFIED with respect to the

indeterminate penalties imposed on appellant for the five (5) counts of estafa, to wit:

  (1) In Criminal Case No. 02-208372, the accused is sentenced to an indeterminate

penalty of 4 years and 2 months of prisión correccional as minimum, to 9 years, 8
months and 21 days of prisión mayor as maximum.
 
  (2) In Criminal Case Nos. 02-208373, 02-208375, and 02-208376, the accused is
sentenced to an indeterminate penalty of 4 years and 2 months of prisión
correccional as minimum, to 10 years, 8 months and 21 days of prisión mayor as
maximum for each of the aforesaid three estafa cases.
 
  (3) In Criminal Case No. 02-208374, the accused is sentenced to an indeterminate
penalty of 4 years and 2 months of prisión correccional as minimum, to 12 years,
8 months and 21 days of reclusión temporal as maximum.

In all other respects, the Decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

Carpio, Austria-Martinez, Carpio Morales, Tinga,  Nachura, Leonardo-De Castro,

and Brion, JJ., concur.
Puno, C.J., Pls. see Dissent.
Quisumbing, Azcuna, and Chico-Nazario, JJ., joins in the dissent of C.J. Puno.
Corona, J., filed a Separate Opinion.
Velasco, Jr., and Reyes, JJ., see dessenting opinion.

[1]
 CA rollo, pp. 121-136. Penned by Associate Justice Rebecca de Guia-Salvador, with
Associate Justices Amelita G. Tolentino and Aurora Santiago-Lagman, concurring.
[2]
 Penned by Hon. Reynaldo G. Ros.
[3]
 CA rollo, pp. 121-124.
[4]
 Id. at 125-26.
[5]
 G.R. Nos. 147678-87, July 7, 2004, 433 SCRA 640.
[6]
 CA rollo, p. 135.
[7]
 People v. Gamboa, G.R. No. 135382, September 29, 2000, 341 SCRA 451, 458.
[8]
 Exhibits "A," "L," and "L-1."
[9]
 People v. Cabais, G.R. No. 129070, March 16, 2001, 354 SCRA 553, 561.
[10]
 CA rollo, pp. 9-10.
[11]
 Supra note 7 at 462.
[12]
 Id.
[13]
 People v. Guambor, G.R. No. 152183, January 22, 2004, 420 SCRA 677, 683.
[14]
 People v. Ballesteros, G.R. Nos. 116905-908, August 6, 2002, 386 SCRA 193, 212.
[15]
 Id. at 213.
[16]
 335 Phil. 242 (1997).
[17]
 ARTICLE 65. Rule in Cases in Which the Penalty is Not Composed of Three Periods.
— In cases in which the penalty prescribed by law is not composed of three periods, the
courts shall apply the rules contained in the foregoing articles, dividing into three equal
portions the time included in the penalty prescribed, and forming one period of each of
the three portions.
[18]
 People v. Saley, G.R. No. 121179, July 2, 1998, 291 SCRA 715, 753-754.
[19]
 Id. at 755.
[20]
 331 Phil. 64 (1996).
[21]
 332 Phil. 710, 730-731 (1996).
[22]
 ARTICLE 249. Homicide. — Any person who, not falling within the provisions of
article 246 shall kill another without the attendance of any of the circumstances
enumerated in the next preceding article, shall be deemed guilty of homicide and be
punished by reclusión temporal.
[23]
 3 Phil. 437 (1904).
[24]
 Id. at 440.
[25]
 The penalty is considered "indeterminate" because after the convict serves the
minimum term, he or she may become eligible for parole under the provisions of Act No.
4103, which leaves the period between the minimum and maximum term indeterminate
in the sense that he or she may, under the conditions set out in said Act, be released from
serving said period in whole or in part. (People v. Ducosin, 59 Phil. 109, 114 [1933])
[26]
 In the other portions of the dissent though, there is also the impression that the basis is
the penalty actually imposed as hereinabove defined. Whether it is the imposable penalty
or penalty actually imposed, the dissent's interpretation contravenes the ISL because the
minimum term should be fixed based on the prescribed penalty.
[27]
 See Aquino and Griño-Aquino, The Revised Penal Code, Vol. 1, 1997 ed., pp. 772-
773; Padilla, Criminal Law: Revised Penal Code Annotated, 1988 ed., pp. 211-214.
[28]
 73 Phil. 549 (1941).
[29]
 Id. at 552.
[30]
 The dissent cites several cases to establish that Gonzales has not been followed in
cases outside of estafa. An examination of these cases reveals that this assertion is
inaccurate.

1. Sabang v. People, G.R. No. 168818, March 9, 2007, 518 SCRA 35; People v.

Candaza, G.R. No. 170474, June 16, 2006, 491 SCRA 280; People v.
Concepcion, G.R. No. 169060, February 6, 2007, 514 SCRA 660; People v.
 Hermocilla, G.R. No. 175830, July 10, 2007, 527 SCRA 296; People v.
Abulon, G.R. No. 174473, August 17, 2007, 530 SCRA 675.

Gonzales was applied in these cases.

2. People v. Miranda, G.R. No. 169078, March 10, 2006, 484 SCRA 555; Garces v.
People, G.R. No. 173858, July 17, 2007, 527 SCRA 827—belongs to the class of
cases involving accessories and accomplices as well as the frustrated and
attempted stages of a felony.

Strictly speaking, these cases do not deviate from Gonzales. Here, the prescribed
penalty for the principal and consummated stage, respectively, should be merely
viewed as being lowered by the proper number of degrees in order to arrive at the
prescribed penalties for accomplices and accessories as well as the frustrated and
attempted stages of a felony. In turn, from these prescribed penalties, the minimum
term is determined without considering in the meantime the modifying
circumstances, as in Gonzales.

3. Garces v. People, G.R. No. 173858, July 17, 2007, 527 SCRA 827—belongs to
the class of cases involving privileged mitigating circumstances.

These cases are, to a certain extent, an exception to the rule enunciated

in Gonzales. Here, the prescribed penalty is first reduced by the proper number of
degrees due to the existence of a privileged mitigating circumstance. As thus
reduced, the penalty next lower in degree is determined from which the minimum
term is taken. To the extent that the privileged mitigating circumstance, as a
modifying circumstance, is first applied to the prescribed penalty before the
penalty next lower in degree is determined, these cases deviate from Gonzales.
However, this interpretation is based on the special nature of a privileged
mitigating circumstance as well as the liberal construction of penal laws in favor
of the accused. If the privileged mitigating circumstance is not first applied to the
prescribed penalty before determining the penalty next lower in degree from which
the minimum term is taken, it may happen that the maximum term of the
indeterminate sentence would be lower than the minimum term, or that the
minimum and maximum term would both be taken from the same range of penalty
—absurdities that the law could not have intended. These special considerations
which justified a deviation from Gonzales are not present in the instant case. As
will be shown later, Gabres is a reasonable interpretation of the ISL in relation to
Article 315, par. 2(a) of the RPC, and any contrary interpretation would be
unfavorable to the accused.
[31]
 59 Phil. 109 (1933).
[32]
 This wording of Act No. 4103 was later amended to the current wording "minimum
which shall be within the range of the penalty next lower to that prescribed by the Code
for the offense" by Act No. 4225.
[33]
 Supra note 31 at 116-118.
[34]
 Similarly, in the instant case, the maximum term imposed on the accused increased as
the amount defrauded increased in the various criminal cases filed against her as a
consequence of the incremental penalty rule.
[35]
 Sec. 6. Every prisoner released from confinement on parole by virtue of this Act shall,
at such times and in such manner as may be required by the conditions of his parole, as
may be designated by the said Board for such purpose, report personally to such
government officials or other parole officers hereafter appointed by the Board of
Indeterminate Sentence for a period of surveillance equivalent to the remaining portion of
the maximum sentence imposed upon him or until final release and discharge by the
Board of Indeterminate Sentence as herein provided. The officials so designated shall
keep such records and make such reports and perform such other duties hereunder as may
be required by said Board. The limits of residence of such paroled prisoner during his
parole may be fixed and from time to time changed by the said Board in its discretion. If
during the period of surveillance such paroled prisoner shall show himself to be a law-
abiding citizen and shall not violate any of the laws of the Philippine Islands, the Board
of Indeterminate Sentence may issue a final certificate of release in his favor, which shall
entitle him to final release and discharge.
[36]
 Sec. 8. Whenever any prisoner released on parole by virtue of this Act shall, during
the period of surveillance, violate any of the conditions of his parole, the Board of
Indeterminate Sentence may issue an order for his re-arrest which may be served in any
part of the Philippine Islands by any police officer. In such case the prisoner so re-
arrested shall serve the remaining unexpired portion of the maximum sentence for which
he was originally committed to prison, unless the Board of Indeterminate Sentence shall,
in its discretion, grant a new parole to the said prisoner.
[37]
 Supra note 31 at 117.
[38]
 G.R. No. 112985, April 21, 1999, 306 SCRA 90.
[39]
 G.R. No. 103065, August 16, 1999, 312 SCRA 397.
[40]
 G.R. No. 149472, October 15, 2002, 391 SCRA 162.
[41]
 G.R. No. 133645, September 17, 2002, 389 SCRA 71.
[42]
 383 Phil. 213 (2000).
[43]
 Estafa committed 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.
[44]
 Effective April 6, 1980.
[45]
 See Article 61 of the RPC.
[46]
 Effective June 17, 1967.
[47]
 Effective October 22, 1975.
[48]
 Supra note 41 at 80.
[49]
 ARTICLE 309. Penalties. — Any person guilty of theft shall be punished by:

1. The penalty of prisión mayor in its minimum and medium periods, if the value of
the thing stolen is more than 12,000 pesos but does not exceed 22,000 pesos; but if
the value of the thing stolen exceeds the latter amount, the penalty shall be the
maximum period of the one prescribed in this paragraph, and one year for each
additional ten thousand pesos, but the total of the penalty which may be imposed
shall not exceed twenty years. In such cases, and in connection with the accessory
penalties which may be imposed and for the purpose of the other provisions of this
Code, the penalty shall be termed prisión mayor or reclusión temporal, as the case
may be. x x x
[50]
 Supra note 42 at 227-228.
[51]
 ARTICLE 160. Commission of Another Crime During Service of Penalty Imposed for
Another Previous Offense — Penalty. — Besides the provisions of rule 5 of article 62,
any person who shall commit a felony after having been convicted by final judgment,
before beginning to serve such sentence, or while serving the same, shall be punished by
the maximum period of the penalty prescribed by law for the new felony.

Any convict of the class referred to in this article, who is not a habitual criminal, shall be
pardoned at the age of seventy years if he shall have already served out his original
sentence, or when he shall complete it after reaching said age, unless by reason of his
conduct or other circumstances he shall not be worthy of such clemency.
[52]
 See People v. Perete, 111 Phil. 943, 947 (1961).
[53]
 G.R. No. L-55177, February 27, 1987, 148 SCRA 98, 110.
[54]
 G.R. No. L-29994, July 20, 1979, 91 SCRA 500, 511.

The dissent argues that the use of quasi-recidivism as an example of an "attending

circumstance" which is outside the scope of Article 14 of the RPC is inappropriate
because quasi-recidivism is sui generis. The argument is off-tangent. The point is simply
that quasi-recidivism is not found under Article 14 of the RPC yet it is treated as an
"attending circumstance" for purposes of the application of the ISL in relation to the
RPC. Hence, there are "attending circumstances" outside the scope of Articles 13 and 14
of the RPC. For the same reason, the incremental penalty rule is a special rule outside of
Article 14 which, as will be discussed later on, serves the same function as modifying
circumstances under Articles 13 and 14 of the RPC. See also Reyes, L.B., The Revised
Penal Code, 14th ed., 1998, p. 766.
[55]
 The common thread in the RPC is to fix the prescribed penalty as the starting point for
determining the prison sentence to be finally imposed. From the prescribed penalty, the
attending circumstances are then considered in order to finally fix the penalty actually
imposed. Further, the designation of a prescribed penalty is made in individual articles, or
prescribed penalties are individually designated in separate paragraphs within a single
article. Under Article 315, the penalty for estafa when the amount defrauded is over
P12,000.00 but does not exceed P22,000.00 and when such amount exceeds P22,000.00
is lumped within the same paragraph. Thus, the penalty of prisión
correccional maximum to prisión mayor minimum may be reasonably considered as the
starting point for the computation of the penalty actually imposed, and hence, the
prescribed penalty when the amount defrauded exceeds P22,000.00. As will be discussed
shortly, the amount defrauded in excess of P22,000.00 may then be treated as a special
aggravating circumstance and the incremental penalty as analogous to a modifying
circumstance in order to arrive at the penalty actually imposed consistent with the letter
and spirit of the ISL in relation to the RPC.
[56]
 People v. Ladjaalam, 395 Phil. 1, 35 (2000).
[57]
 Cases involving privileged mitigating circumstances would, likewise, deviate from
this general rule since the maximum term would be taken from a penalty lower than the
prescribed penalty. See note 13.
[58]
 G.R. Nos. 119987-88, October 12, 1995, 249 SCRA 244.
[59]
 Id. at 251.
[60]
 The aforesaid phrases are broad enough to justify Mr. Justice Azcuna's interpretation,
however, they are vague enough not to exclude the interpretation under Gabres. The said
phrases may be so construed without being inconsistent with Gabres. (See Articles 90
and 92 of the RPC)
[61]
 3 Sutherland Statutory Construction § 59:3 (6th ed.)
[62]
 Id. citing Buzzard v. Commonwealth, 134 Va. 641, 114 S.E. 664 (1992).

SEPARATE OPINION

CORONA, J.:

  A man cannot suffer more punishment than the

law assigns, but he may suffer less. – William
Blackstone[1]
 
  For when lenity and cruelty play for a kingdom,
the gentler gamester is the soonest winner. –
William Shakespeare[2]

The application of the Indeterminate Sentence Law is one of the more complicated and
confusing topics in criminal law. It befuddles not a few students of law, legal scholars
and members of the bench and of the bar.[3] Fortunately, this case presents a great
opportunity for the Court to resolve with finality a controversial aspect of the application
and interpretation of the Indeterminate Sentence Law. It is an occasion for the Court to
perform its duty to formulate guiding and controlling principles, precepts, doctrines or
rules.[4] In the process, the matter can be clarified, the public may be educated and the
Court can exercise its symbolic function of instructing bench and bar on the extent of
protection given by statutory and constitutional guarantees.[5]

The fundamental principle in applying and interpreting criminal laws, including the
Indeterminate Sentence Law, is to resolve all doubts in favor of the accused. In dubio pro
reo. When in doubt, rule for the accused. This is in consonance with the constitutional
guarantee that the accused ought to be presumed innocent until and unless his guilt is
established beyond reasonable doubt.[6]

Intimately intertwined with the in dubio pro reo principle is the rule of lenity. It is the
doctrine that "a court, in construing an ambiguous criminal statute that sets out multiple
or inconsistent punishments, should resolve the ambiguity in favor of the more lenient
punishment."[7]
Lenity becomes all the more appropriate when this case is viewed through the lens of the
basic purpose of the Indeterminate Sentence Law "to uplift and redeem valuable human
material, and prevent unnecessary and excessive deprivation of personal liberty and
economic usefulness."[8] Since the goal of the Indeterminate Sentence Law is to look
kindly on the accused, the Court should adopt an application or interpretation that is more
favorable to the accused.

It is on the basis of this basic principle of criminal law that I respectfully submit this
opinion.

THE BONE OF CONTENTION

The members of the Court are unanimous that accused-appellant Beth Temporada was
correctly found guilty beyond reasonable doubt of the crimes of illegal recruitment
and estafa by the Regional Trial Court of Manila, Branch 33 and the Court of Appeals.
However, opinions differ sharply on the penalty that should be imposed on accused-
appellant for estafa. In particular, there is a debate on how the Indeterminate Sentence
Law should be applied in a case like this where there is an incremental penalty when the
amount embezzled exceeds P22,000 (by at least P10,000).

In this connection, the relevant portion of Article 315 of the Revised Penal Code
provides:
ART. 315. Swindling (estafa). – Any person who shall defraud another by any means
mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its
minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed
22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one year for each additional
10,000 pesos; but the total penalty which may be imposed shall in no case exceed twenty
years. In such case, and in connection with the accessory penalties which may be
imposed under the Revised Penal Code, the penalty shall be termed prision
mayor to reclusion temporal, as the case may be.

x x x          x x x          x x x
On the other hand, the relevant portion of the Indeterminate Sentence Law provides:
SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the
Revised Penal Code, or its amendments, the court shall sentence the accused to an
indeterminate sentence the maximum term of which shall be that which, in view of the
attending circumstances, could be properly imposed under the rules of the said Code, and
the minimum which shall be within the range of the penalty next lower to that prescribed
by the Code for the offense; x x x
Jurisprudence shows that there are two schools of thought on the incremental penalty
in estafa vis-à-vis the Indeterminate Sentence Law. Under the first school of thought, the
minimum term is fixed at prision correccional while the maximum term can reach up
to reclusion temporal. This is the general interpretation. It was resorted to in People v.
Pabalan,[9] People v. Benemerito,[10] People v. Gabres[11] and in a string of cases.[12]

On the other hand, under the second school of thought, the minimum term is one
degree away from the maximum term and therefore varies as the amount of the
thing stolen or embezzled rises or falls. It is the line of jurisprudence that
follows People v. De la Cruz.[13] Among the cases of this genre are People v. Romero,
[14]
 People v. Dinglasan[15] and Salazar v. People.[16]

The Court is urged in this case to adopt a consistent position by categorically discarding
one school of thought. Hence, our dilemma: which of the two schools of thought should
we affirm?

THE FIRST SCHOOL OF THOUGHT IS

MORE FAVORABLE TO THE ACCUSED

Under the Indeterminate Sentence Law, in imposing a sentence, the court must determine
two penalties composed of the "maximum" and "minimum" terms, instead of imposing a
single fixed penalty.[17] Hence, the indeterminate sentence is composed of a maximum
term taken from the penalty imposable under the Revised Penal Code and a minimum
term taken from the penalty next lower to that fixed in the said Code.

The maximum term corresponds to "that which, in view of the attending circumstances,
could be properly imposed under the rules of the [Revised Penal] Code." Thus, "attending
circumstances" (such as mitigating, aggravating and other relevant circumstances) that
may modify the imposable penalty applying the rules of the Revised Penal Code is
considered in determining the maximum term. Stated otherwise, the maximum term is
arrived at after taking into consideration the effects of attendant modifying
circumstances.

On the other hand, the minimum term "shall be within the range of the penalty next lower
to that prescribed by the [Revised Penal] Code for the offense." It is based on the penalty
prescribed by the Revised Penal Code for the offense without considering in the
meantime the modifying circumstances.[18]

The penalty prescribed by Article 315 of the Revised Penal Code for the felony
of estafa (except estafa under Article 315(2)(d))[19] is prision correccional in its
maximum period to prision mayor in its minimum period if the amount of the fraud is
over P12,000 but does not exceed P22,000. If it exceeds P22,000, the penalty provided in
this paragraph shall be imposed in its maximum period. Moreover, where the amount
embezzled is more than P22,000, an incremental penalty of one year shall be added for
every additional P10,000.

Thus, the Revised Penal Code imposes prision correccional in its maximum period
to prision mayor in its minimum period (or a period of four years, two months and one
day to eight years) if the amount of the fraud is more than P12,000 but not more than
P22,000. If it exceeds P22,000, the penalty is imposed in its maximum period (or a period
of six years, 8 months and 21 days to eight years) with an incremental penalty of one year
for each additional P10,000 subject to the limitation that the total penalty which may be
imposed shall in no case exceed 20 years.

Strictly speaking, the circumstance that the amount misappropriated by the offender is
more than P22,000 is a qualifying circumstance. In People v. Bayot,[20] this Court defined
a qualifying circumstance as a circumstance the effect of which is "not only to give the
crime committed its proper and exclusive name but also to place the author thereof in
such a situation as to deserve no other penalty than that especially prescribed for said
crime." Applying the definition to estafa where the amount embezzled is more than
P22,000, the amount involved ipso jure places the offender in such a situation as to
deserve no other penalty than the imposition of the penalty in its maximum period plus
incremental penalty, if warranted.[21] In other words, if the amount involved is more than
P22,000, then the offender shall be sentenced to suffer the maximum period of the
prescribed penalty with an incremental penalty of one year per additional P10,000.

However, People v. Gabres considered the circumstance that more than P22,000 was

involved as a generic modifying circumstance which is material only in the determination
of the maximum term, not of the minimum term:
Under the Indeterminate Sentence Law, the maximum term of the penalty shall be "that
which, in view of the attending circumstances, could be properly imposed" under the
Revised Penal Code, and the minimum shall be "within the range of the penalty next
lower to that prescribed" for the offense." The penalty next lower should be based on the
penalty prescribed by the Code for the offense, without first considering any modifying
circumstance attendant to the commission of the crime. The determination of the
minimum penalty is left by law to the sound discretion of the court and it can be
anywhere within the range of the penalty next lower without any reference to the periods
into which into which it might be subdivided. The modifying circumstances are
considered only in the imposition of the maximum term of the indeterminate
sentence.

The fact that the amounts involved in the instant case exceed P22,000.00 should not be
considered in the initial determination of the indeterminate penalty; instead, the matter
should be so taken as analogous to modifying circumstances in the imposition of the
maximum term of the full indeterminate sentence. This interpretation of the law
accords with the rule that penal laws should be construed in favor of the accused.
Since the penalty prescribed by law for the estafa charged against accused-appellant
is prision correccional maximum to prision mayor minimum, the penalty next lower
would then be prision correccional minimum to medium. Thus, the minimum term of the
indeterminate sentence should be anywhere within six (6) months and one (1) day to four
(4) years and two months while the maximum term of the indeterminate sentence should
at least be six (6) years and one (1) day because the amounts involved exceeded
P22,000.00, plus an additional one (1) year for each additional P10,000.00. (emphasis
supplied)
If the circumstance that more than P22,000 was involved is considered as a qualifying
circumstance, the penalty prescribed by the Revised Penal Code for it will be the
maximum period of  prision correccional in its maximum period to prision mayor in its
minimum period. This has a duration of six years, 8 months and 21 days to eight years.
The penalty next lower (which will correspond to the minimum penalty of the
indeterminate sentence) is the medium period of prision correccional in its maximum
period to prision mayor in its minimum period, which has a duration of five years, five
months and 11 days to six years, eight months and 20 days.[22]

If the circumstance is considered simply as a modifying circumstance (as in Gabres), it

will be disregarded in determining the minimum term of the indeterminate sentence. The
starting point will be prision correccional maximum to prision mayor minimum and the
penalty next lower will then be prision correccional in its minimum to medium periods,
which has a duration of six months and one day to four years and two months.

From the foregoing, it is more favorable to the accused if the circumstance (that more
than P22,000 was involved) is to be considered as a modifying circumstance, not as a
qualifying circumstance. Hence, I submit that the Gabres rule is preferable.

On the contrary, the second school of thought is invariably prejudicial to the accused. By
fixing the minimum term of the indeterminate sentence to one degree away from the
maximum term, the minimum term will always be longer than prision correccional in its
minimum to medium periods.

Worse, the circumstance (that more than P22,000 was embezzled) is not a modifying
circumstance but a part of the penalty, if adopted, will mean that the minimum term of
the indeterminate sentence will never be lower than the medium period of prision
correccional in its maximum period to prision mayor in its minimum period, the penalty
next lower to the maximum period of  prision correccional in its maximum period
to prision mayor in its minimum period.

THE SECOND SCHOOL OF THOUGHT

AND   ITS   SHORTCOMINGS

The primary defect of the so-called second school of thought is that it contradicts the in
dubio pro reo principle. It also violates the lenity rule. Instead, it advocates a stricter
interpretation with harsher effects on the accused. In particular, compared to the first
school of thought, it lengthens rather than shortens the penalty that may be imposed on
the accused. Seen in its proper context, the second school of thought is contrary to the
avowed purpose of the law that it purportedly seeks to promote, the Indeterminate
Sentence Law.

The second school of thought limits the concept of "modifying circumstance" to either a
mitigating or aggravating circumstance listed under Articles 13 and 14 of the Revised
Penal Code. It contends that the respective enumerations under the said provisions are
exclusive and all other circumstances not included therein were intentionally omitted by
the legislature. It further asserts that, even assuming that the circumstance that more than
P22,000 was embezzled may be deemed as analogous to aggravating circumstances under
Article 14, the said circumstance cannot be considered as an aggravating circumstance
because it is only in mitigating circumstances that analogous circumstances are allowed
and recognized.[23] The second school of thought then insists that, since the circumstance
that more than P22,000 was involved is not among those listed under Article 14, the said
circumstance is not a modifying circumstance for purposes of the Indeterminate Sentence
Law.

The second school of thought therefore strictly construes the term "attending
circumstances" against the accused. It refuses to recognize anything that is not expressed,
takes the language used in its exact meaning and admits no equitable consideration.

To the point of being repetitive, however, where the accused is concerned, penal statutes
should be interpreted liberally, not strictly.

The fact that there are two schools of thought on the matter by itself shows that there is
uncertainty as to the concept of "attending" or "modifying" circumstances. Pursuant to
the in dubio pro reo principle, the doubt must be resolved in favor of the accused and not
against him.

Moreover, laws must receive sensible interpretation to promote the ends for which they
are enacted.[24] The meaning of a word or phrase used in a statute may be qualified by the
purpose which induced the legislature to enact the statute. The purpose may indicate
whether to give a word or phrase a restricted or expansive meaning. [25] In construing a
word or phrase, the court should adopt the interpretation that best serves the manifest
purpose of the statute or promotes or realizes its object.[26] Where the language of the
statute is fairly susceptible to two or more constructions, that which will most tend to
give effect to the manifest intent of the lawmaker and promote the object for which the
statute was enacted should be adopted.[27] Taken in conjunction with the lenity rule, a
doubtful provision of a law that seeks to alleviate the effects of incarceration ought to be
given an interpretation that affords lenient treatment to the accused.
The Indeterminate Sentence Law is intended to favor the accused, particularly to shorten
his term of imprisonment.[28] The reduction of his period of incarceration reasonably helps
"uplift and redeem valuable human material, and prevent unnecessary and excessive
deprivation of personal liberty and economic usefulness." The law, being penal in
character, must receive an interpretation that benefits the accused. [29] This Court already
ruled that "in cases where the application of the law on indeterminate sentence would be
unfavorable to the accused, resulting in the lengthening of his prison sentence, said law
on indeterminate sentence should not be applied."[30] In the same vein, if an interpretation
of the Indeterminate Sentence Law is unfavorable to the accused and will work to
increase the term of his imprisonment, that interpretation should not be adopted. It is also
for this reason that the claim that the power of this Court to lighten the penalty of lesser
crimes carries with it the responsibility to impose a greater penalty for grave penalties is
not only wrong but also dangerous.

Nowhere does the Indeterminate Sentence Law prescribe that the minimum term of the
penalty be no farther than one degree away from the maximum term. Thus, while it may
be true that the minimum term of the penalty in an indeterminate sentence is generally
one degree away from the maximum term, the law does not mandate that its application
be rigorously and narrowly limited to that situation.

THE PROPER INDETERMINATE

PENALTIES IN THESE CASES

From the above disquisition, I respectfully submit that the prevailing rule, the so-called
first school of thought, be followed. With respect to the indeterminate sentence that may
be imposed on the accused, I agree with the position taken by Madame Justice Consuelo
Ynares-Santiago.

Accordingly, I vote that the decision of the Court of Appeals be AFFIRMED with the
following modifications:

  (1) in Criminal Case No. 02-208372, the accused be sentenced to an indeterminate

penalty of 4 years and 2 months of prision correccional as minimum, to 9 years, 8
months and 21 days of prision mayor as maximum;
 
  (2) in Criminal Case Nos. 02-208373, 02-208375, and 02-208376, the accused be
sentenced to an indeterminate penalty of 4 years and 2 months of prision
correccional as minimum, to 10 years, 8 months and 21 days of prision mayor as
maximum for each of the aforesaid three estafa cases and
 
  (3) in Criminal Case No. 02-208374, the accused be sentenced to an indeterminate
penalty of 4 years and 2 months of prision correccional as minimum, to 12 years,
8 months and 21 days of prision mayor as maximum.
[1]
 Commentaries on the Laws of England 92.
[2]
 King Henry The Fifth, Act 3, Scene 6, Line 11.
[3]
 A survey of criminal law jurisprudence will show that among the portions of the ruling
of trial courts and the appellate court that are most commonly corrected by this Court is
the application of the Indeterminate Sentence Law. In fact, even this Court has grappled
with the matter. (See People v. Moises, [160 Phil. 845 (1975)] overruling People v.
Colman [103 Phil. 6 (1958)]; People v. Gonzales [73 Phil. 549 (1942)]
overturning People v. Co Pao [58 Phil. 545 (1933)] and People v. Gayrama (60 Phil. 796
(1934)] and People v. Mape [77 Phil. 809 (1947)] reversing People v. Haloot [64 Phil.
739 (1937)] which followed the Co Pao ruling.)
[4]
 See Salonga v. Cruz Paño, 219 Phil. 402 (1985).
[5]
 Id.
[6]
 See Section 14 (2), Constitution.
[7]
 Black's Law Dictionary, Eighth Edition (2004), p. 1359.
[8]
 People v. Ducosin, 59 Phil. 109 (1933).
[9]
 331 Phil. 64 (1996).
[10]
 332 Phil. 710 (1996).
[11]
 335 Phil. 242 (1997).
[12]
 These cases include People v. Hernando, 375 Phil. 1078 (1999), People v. Menil, 394
Phil. 433 (2000), People v. Logan, 414 Phil. 113 (2001), People v. Gallardo, 436 Phil.
698 (2002), Garcia v. People, 457 Phil. 713 (2003) and Vasquez v. People, G.R. No.
159255, 28 January 2008, 542 SCRA 520.
[13]
 383 Phil. 213 (2000).
[14]
 365 Phil. 531 (1999).
[15]
 437 Phil. 621 (2002).
[16]
 439 Phil. 762 (2002).
[17]
 People v. Ducosin, supra.
[18]
 People v. Gonzales, supra note 3.
[19]
 The penalty for estafa under Article 315(2)(d) is provided under PD 818 (Amending
Article 315 of the Revised Penal Code by Increasing the Penalties for Estafa Committed
by Means of Bouncing Checks).
[20]
 64 Phil. 269 (1937).
[21]
 This is similar to the effect of the circumstance that the offender intended to aid the
enemy by giving notice or information that is useful to the enemy in the crime of
correspondence with hostile country under Article 120(3) of the Revised Penal Code
(which necessitates the imposition of reclusion perpetua to death) or of the circumstance
that the offender be a public officer or employee in the crime of espionage under Article
117 of the Revised Penal Code (which requires the imposition of the penalty next higher
in degree than that generally imposed for the crime).
[22]
 See Article 61(5) of the Revised Penal Code. If the penalty is any one of the three
periods of a divisible penalty, the penalty next lower in degree shall be that period next
following the given penalty. Thus, the penalty immediately inferior to prision mayor in
its maximum period is prision mayor in its medium period (People v. Co Pao, supra note
3). If the penalty is reclusion temporal in its medium period, the penalty next lower in
degree is reclusion temporal in its minimum period (People v. Gayrama, supra note
3). The penalty prescribed by the Revised Penal Code for a felony is a degree. If the
penalty prescribed for a felony is one of the three periods of a divisible penalty, that
period becomes a degree, and the period immediately below is the penalty next
lower in degree (Reyes, Luis B., The Revised Penal Code, Book Two, Fifteenth Edition
[2001], p. 700).
[23]
 In particular, Article 13(10) expressly provides that "any other circumstances of a
similar nature and analogous to those above mentioned" are treated as mitigating. Article
14, however, does not have a similar provision.
[24]
 Lo Cham v. Ocampo, 77 Phil. 636 (1946).
[25]
 Krivenko v. Register of Deeds, 79 Phil. 461 (1947).
[26]
 Muñoz & Co. v. Hord, 12 Phil. 624 (1909).
[27]
 Ty Sue v. Hord, 12 Phil. 485 (1909).
[28]
 People v. Nang Kay, 88 Phil. 515 (1951).
[29]
 Id.
[30]
 Id.

SEPARATE DISSENTING OPINION

AZCUNA, J.:

I join the Chief Justice in his dissent.

The penalty for estafa is a unique one, in a class by itself.  The penalty prescribed by law
depends on the amount involved.  If it does not exceed P22,000, it is the penalty stated in
par. 2(a) of Art. 315 of the Revised Penal Code, i.e., prision correccional maximum
to prision mayor minimum.  If it exceeds P22,000, it is that penalty plus one year for
every P10,000, but in no case more than 20 years.  Then the law states that in that event
the penalty should be "termed" prision mayor or reclusion temporal, "as the case may
be."

Accordingly, if the amount involved is, say, P500 Million, the penalty prescribed by law
is reclusion temporal.  Hence, the penalty one degree lower than that is prision
mayor and it is within this one-degree lower penalty, i.e., prision mayor, that the
minimum of the indeterminate sentence
is to be fixed.

D I S S E N T I N G    O P I N I O N

VELASCO, J.:

I join the dissent of Chief Justice Reynato S. Puno.

It is clear that if the amount of fraud is over PhP 12,000 but does not exceed PhP 22,000,
the penalty prescribed by Article 315 of the Revised Penal Code is prision
correccional in its maximum to prision mayor in its minimum.  Applying the
Indeterminate Sentence Law (ISL), the RPC prescribed penalty will constitute the
maximum period and the penalty next lower is prision correccional in its minimum to
medium periods (6 months and 1 day to 4 years and 2 months).  The ISL gives the judge
the discretion in fixing the minimum penalty within the penalty next lower than the RPC
prescribed penalty.  Thus, the judge for an estafa involving over PhP 12,000 but not
exceeding PhP 22,000 can prescribe the penalty of 4 years and 2 months as minimum
period.

On the other hand, for the crime of estafa involving an amount exceeding PhP 22,000,
which can go as high as several millions of pesos, the majority view posits that the RPC
prescribed penalty is still prision correccional in its maximum period to prision mayor in
its minimum period as the minimum period and the adjusted penalty based on the formula
of 1 year per every PhP 10,000 but not to exceed 20 years is the maximum period. Thus
following this line of reasoning, it admits that the penalty next lower would be prision
correccional in its minimum and medium periods. Applying the ISL, the minimum
period for an estafa of over PhP 22,000 can very well be 4 years and 2 months—exactly
the same minimum penalty for estafa involving over PhP 12,000 but not exceeding PhP
22,000.

This result would be at war with the principle that the penalty for estafa is strictly based
on the value or amount involved.[1]  This doctrine is captured in the graduation of
penalties under Article 315(1), thus:

Article 315 Amount Penalty

th
4  par. Less than P200.00 Arresto Mayor in its
medium and maximum
period
3rd par. Over P200.00 but less Arresto Mayor in its
than P6,000.00 maximum period to prision
correccional in its minimum
period
2nd par. Over P6,000.00 but less Prision correccional in its
than P12,000.00 minimum and medium
period
1st par. Over P12,000.00 but less Prision correccional in its
than P22,000.00 maximum period to prision
mayor in its minimum
period
1st par. Over P22,000.00 add 1 (should be Prision Mayor or
year Reclusion Temporal)
It is obvious that the intent of the legislators in enacting Art. 315 of the RPC is to impose
a penalty for estafa that is graduated—the graduation being based on the amount of the
fraud.  The higher the amount, the higher is the period of imprisonment.  If we apply the
First School of Thought which the majority adopted, then the minimum period under ISL
for estafa from less than PhP 12,000 up to PhP 22,000 and the estafa exceeding PhP
22,000 will always be taken from within the range of prision correccional minimum and
medium (i.e., from 6 months and 1 day to 4 years and 2 months).  Thus, a swindler of a
lesser amount (from PhP 12,000 to PhP 22,000) could be imprisoned for the same
minimum term as a swindler of millions. This should not be the case. Justice demands
that crime be punished and that the penalty imposed be commensurate with the offense
committed.[2]

I submit that principle of proportionality between the offense committed and the penalty
imposed finds application in determining the penalty for the crime of estafa.  The penalty
for estafa must always be commensurate with the amount defrauded.[3]  If the concept of
proportionality between the offense committed and the sanction imposed is not strictly
adhered to, then unfairness and injustice will inevitably result.

It is a general rule of statutory construction that a law should not be so construed as to

produce an absurd result.[4]  The law does not intend an absurdity or that an absurd
consequence shall flow from its enactment.  If the words of the statute are susceptible of
more than one meaning, the one that has a logical construction should be adopted over
the one that will produce an absurdity.    Statutes should receive a sensible construction,
such as will give effect to the legislative intention and so as to avoid an unjust or an
absurd conclusion.[5]  Indeed a ridiculous situation will arise if a swindler of millions and
a con man of less than PhP 22,000 will receive the same minimum sentence of 4 years
and 2 months.

Worse, not only is the swindler of millions entitled to a very low penalty, he might very
well even be qualified to avail of probation.  A suspended execution of the penalty for a
"big time" swindler could not have been intended by the framers of the Revised Penal
Code.

The majority anchors its position on the postulate that all doubts should be resolved in
favor of the accused.  This principle however cannot prevail over the purpose or intent of
the law.  Undeniably the intendment of the law is to impose on the swindlers a higher
penalty depending on the amount of fraud.  This is easily deducible from the formula of
imposing an additional one year of imprisonment for every PhP 10,000 over the threshold
amount of PhP 22,000.  If such was not the intent, then the RPC could have easily
provided a penalty of prision mayor in its medium and maximum periods
for estafa involving more than PhP 22,000 and above.  The legislators, however, insisted
on a higher penalty, clearly revealing an intent impose a harsher punishment for big time
"estafadors."

Another point that has to be elucidated is the proposition of the majority that the
maximum period of the penalty for estafa of more than PhP 22,000 is determined by
using the formula of one (1) year for every additional PhP 10,000 while the minimum
period is prision correccional in its maximum period to prision mayor in its minimum
period.  This is the only penalty, if accepted as correct, that has a fixed maximum period
but a minimum period which is composed of two (2) periods—prision correccional in its
maximum to prision mayor in its minimum period.  Nowhere in the RPC or special laws
can we find a penalty prescribed in that manner.  Undoubtedly, this is not the prescribed
penalty for estafa of more than PhP 22,000.

I concur with the view that Art. 315(1) that the penalty for estafa of more than PhP
22,000 is a single fixed penalty of either prision mayor or reclusion temporal.

I submit that the starting point for the computation of estafa of over PhP 22,000 should be
the penalty of eight (8) years based on the phrase in Article 315(1) that "the penalty
provided in this paragraph shall be imposed in the maximum."  8 years of imprisonment
is prision mayor in its minimum period.  Then we apply the formula of adding one (1)
year for every additional PhP 10,000.  To illustrate:

Amount of Fraud Imprisonment

Over 22T to 32T 9 years (prision mayor)
Over 32T to 42T 10 years
Over 42T to 52T 11 years
Over 52T to 62T 12 years
Over 62T to 72T 13 years (reclusion temporal)
Over 72T to 82T 14 years
Over 82T to 92T 15 years
Over 92T to 102T 16 years
Over 102T to 112T 17 years
Over 112T to 122T 18 years
Over 122T to 132T 19 years
Over 132T to 142T 20 years
If the amount of the fraud is from PhP 22,001 to PhP 62,000 then the penalty is
simply prision mayor.  If the threshold PhP 62,000 is reached, then the penalty
is reclusion temporal.  The penalty cannot by express terms of the law, go higher
than reclusion temporal in its maximum of 20 years.  In other words, the penalty
for estafa involving an amount over PhP 22,000 up to PhP 142,000 and above is a single
fixed penalty or straight penalty of either prision mayor or reclusion
temporal depending on the amount.  This is clear from Art. 315, 1st par.:
In such cases, and in connection with the accessory penalties which may be imposed and
for the purpose of the other provisions of this Code, the penalty shall be termed prision
mayor  or reclusion temporal, as the case may be; x x x (emphasis supplied.)
Given the above perspective, it is quite easy to compute the ISL.  If the penalty is prision
mayor, the penalty next lower to that fixed by the RPC is prision correccional.  If the
penalty is reclusion temporal, then the penalty next lower is prision mayor.  The judge
will determine the maximum period by taking into consideration the attendant
circumstances and the minimum shall be within the range of the next lower penalty.

With the foregoing mode of computation, for estafa of more than PhP 22,000 up to PhP
62,000, the penalty is 12 years of prision mayor.  Applying the ISL, the penalty next
lower is prision correccional—6 months, 1 day to 6 years.  The judge has the discretion
to fix the minimum within the range of prision correccional. However, since the
maximum minimum penalty under ISL for estafa involving PhP 12,000 but not to exceed
PhP 22,000, is 4 years and 2 months, then the minimum period for estafa of an amount
over PhP 22,000 can be made higher than 4 years and 2 months.  This way, the
imposition of penalties under Art. 315(1) will be in harmony with the principle of
proportionality that the penalty must be commensurate to the gravity of the offense and in
line with the graduation of penalties under Art. 315.

For estafa involving more than PhP 62,000, then the penalty is a single fixed penalty
of reclusion temporal while the penalty next lower is prision mayor.  Thus the minimum
period is any penalty within 6 years and 1 day to 12 years.  The minimum period will
undoubtedly be higher than the minimum period of 4 years and 2 months which has been
fixed for estafa involving more than PhP 12,000 but not exceeding PhP 22,000.  This
manner of computation would be more in keeping with the intent of the framers of the
Revised Penal Code.

Hence, my dissent.

[1]
 U.S. v. Fernandez, 9 Phil. 199 (1907); U.S. v. Leaño, 6 Phil. 368 (1906).
[2]
 Echegaray v. Secretary of Justice, 310 SCRA 96, 138 (1999), Separate Opinion of J.
Vitug citing Record of the House of Representatives re: House Bill No. 62, which later
evolved into the Death Penalty Law, R.A. 7659, now repealed by R.A. 9346.
[3]
 People v. Pascua, Aviguetero and Soliven, G.R. No. 125081, October 3, 2001; People
v. Benemerito, G.R. No. 120389, November 21, 1996.
[4]
 Ang Giok Chip v. Springfield, No. L-33637, December 31, 1931; Paras v. COMELEC,
G.R. No. 123169, November 4, 1996.
[5]
 Corsico, Jr. v. NLRC, G.R. No. 118432, May 23, 1997.

EN BANC
[ G.R. No. L-45490, November 20, 1978 ]
THE PEOPLE OF THE PHILIPPINES, PETITIONER, VS. HON. JOSE
SABIO, SR., CITY JUDGE OF CAGAYAN DE ORO AND RANULFO M.
SALAZAR, RESPONDENTS.

[G.R. NO. L-45711. NOVEMBER 20, 1978]

TAN TAO LIAP, ALIAS JIMMY TAN, PETITIONER, VS. THE COURT OF
APPEALS AND PEOPLE OF THE PHILIPPINES, RESPONDENTS.

[G.R. NO. L-42971. NOVEMBER 20, 1978]

DAYLINDA A. LAGUA, PETITIONER, VS. HON. VICENTE M. CUSI, JR.,

AS JUDGE OF THE COURT OF FIRST INSTANCE OF DAVAO CITY, THE
CITY FISCAL OF DAVAO, GEMPESAW HARDWARE AND PEOPLE OF
THE PHILIPPINES, RESPONDENTS.

DECISION

CONCEPCION JR., J.:

For review on certiorari are: (1) the order of the City Court of Cagayan de Oro dated
January 6, 1977 which granted the motion to quash the information for estafa filed
against the accused in Criminal Case No. 33867, "People of the Philippines vs. Ranulfo
Salazar" (L-45490); (2) the decision of the Court of Appeals in case CA-G.R. No. 16195-
Cr, "People of the Philippines vs. Tan Tao Liap" (L-45711) which affirmed the decision
of the City Court of Pasay City convicting the accused of the crime of estafa, and (3) the
order of the Court of First Instance of Davao City in Criminal Case No. 2023, entitled
"People of the Philippines vs. Daylinda Lagua" (L-42971) dated December 23, 1975
which denied petitioner's motion to quash. These cases are jointly considered in view of
the similarity of the issue involved and which is whether or not the issuance of a
postdated check, which is subsequently dishonored for insufficiency of funds, in payment
of a pre-existing obligation constitutes estafa as defined and penalized under Article 315,
par. 2(d) of the Revised Penal Code as amended by Republic Act No. 4885 and
Presidential Decree No. 818.

G.R. No. L-45490:

The circumstances leading to this case are brief and undisputed. On May 29, 1975, the
complainants, Ramon Yap and Tommy Pacana, leased to the accused, Ranulfo Salazar,
the "Tanguili Night Club" situated in Cagayan de Oro City, for the monthly rental of
P2,000.00. On May 23, 1976, Ranulfo Salazar paid P500.00 in cash and P1,500.00 in
check (PBC Check No. C179-4555 postdated May 31, 1976) to Ramon Yap for the rental
of the premises corresponding to the period from April 15 to May 15, 1976. However,
when the check was presented to the bank for payment, the same was dishonored for lack
of funds to cover the same. For failure of Ranulfo Salazar to make good his obligation,
complainants instituted a suit for estafa against him, and on June 10, 1976, the First
Assistant City Fiscal of Cagayan de Oro City filed with the City Court of Cagayan de Oro
(for preliminary investigation) the following information:

"That on or about May 23, 1976, in Cagayan de Oro City, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, by means of false
pretenses or fraudulent acts executed prior to or simultaneously with the commission of
the fraud, with intent to defraud and knowing that he had no money to pay, did then and
there wilfully, unlawfully and feloniously issue a Philippine Banking Corporation Check
No. C179 for P1,500.00 in favor of Ramon Yap dated May 31, 1976, in payment of
and/or representing accused monthly rental of the Tanguili Night Club for April 15, 1976
to May 15, 1976, knowing fully well that said accused had no funds in the bank or the
funds deposited by him is not sufficient to cover the amount of said check as evidence by
the fact that when said check was presented for encashment, it bounces or was
dishonored for reason that there is no funds available and despite demands made, accused
failed and refused and still fails and refuses to make good or pay the same, to the damage
and prejudice of the offended party in the aforementioned sum of P1,500.00, Philippine
Currency."[1] 

On August 6, 1976, Ranulfo Salazar filed a motion to quash the information alleging:

“1. That the facts charged do not constitute an offense; and

 
“2. That the accused is not the drawer or the person who issued PBC Check No. C179-
4555 in the amount of P1,500.00 subject matter of this litigation in favor of the
complainant."[2] 

An opposition to the said motion to quash was filed by the prosecution and after the
parties were heard in oral argument, the City Court issued an order dated January 6, 1977
granting the motion to quash by ruling that since the check was issued in payment of a
pre-existing obligation, no estafa was committed. Petitioner now seeks the nullity of said
order on the ground that the same is not in accord with law, being an erroneous
interpretation of the provision of Article 315, paragraph 2(d) of the Revised Penal Code
and of Rule 112 of the Rules of Court.

G.R. No. L-45711:

The record shows that the petitioner Tan Tao Liap and the complainant were old friends.
On several occasions from January to July, 1972, Tan Tao Liap borrowed money from
Ngo Cheng which amounted to P9,000.00. It was only in the early part of August, 1972
that Ngo Cheng demanded from Tan Tao Liap the payment of his indebtedness plus the
sum of P500.00 as interest.[3]  Tan Tao Liap informed Ngo Cheng that he did not have
sufficient funds to pay but that he might possibly be able to settle the debt about the end
of the month as he was then expecting to receive some money at that time. Tan Tao Liap
further proposed to pay the loan on a staggered basis and Ngo Cheng agreed to this
proposal on the condition, however, that Tan Tao Liap would issue him three (3) checks,
namely: (1) Check No. 7-442560 dated August 24, 1972 for P3,000.00; (2) Check No.
7442561 dated August 31, 1972 for P3,000.00 and (3) Check No. 7442562 dated
September 1, 1972, for P3,500.00, all drawn against his account with the Consolidated
Bank and Trust Company at Soler St., Manila.[4]  The first check was deposited by Ngo
Cheng with the Associated Bank at Pasay City and it was duly paid and cleared by the
Consolidated Bank as Tan Tao Liap was able to deposit sufficient funds to cover the
same.[5]  Subsequently, however, Tan Tao Liap suffered business reverses and so what he
did was to inform Ngo Cheng not to deposit the second and third checks which were to
mature on August 31, 1972 and September 1, 1972, respectively, because of his inability
to raise the amounts to cover said checks. As an alternative, Tan Tao Liap proposed to
pay the balance in monthly installments of P300.00 until such time that he could raise
enough funds. Ngo Cheng, however, turned down the offer and even told Tan Tao Liap
that he was going to file a criminal case against him if he failed to deposit the amount for
the two remaining checks.[6]  At the instance of Ngo Cheng, Tan Tao Liap was charged by
the City Fiscal of Pasay City with the crime of estafa on January 24, 1973 for issuing the
third check (No. 7-442562, dated September 1, 1972, for P3,500.00) which was
dishonored for lack of funds.

On November 9, 1973, the City Court rendered its decision convicting Tan Tao Liap of
the crime of estafa despite its finding that the check was issued in payment of a pre-
existing obligation.[7]  Subsequently, Tan Tao Liap appealed the said decision to the Court
of Appeals. However, on October 26, 1976, the Court of Appeals rendered judgment
affirming that of the City Court of Pasay City. Not satisfied with the decision of the Court
of Appeals, Tan Tao Liap now seeks a review thereof by this Court alleging that:

"THE COURT OF APPEALS ERRED IN CONSTRUING ARTICLE 315 OF THE

REVISED PENAL CODE AS HOLDING PETITIONER LIABLE FOR ESTAFA FOR
HAVING ISSUED A BAD CHECK EVEN IF THE CHECK HAD BEEN ISSUED IN
PAYMENT OF A PRE-EXISTING DEBT."

G.R. No. L-42971:

The petitioner, Daylinda A. Lagua, is engaged in the logging business in Davao City
under the business name "Manuel P. Lagua Logging Enterprises". Since October of 1973,
the Lagua Enterprises had been buying their logging supplies and hardware on credit
from the Gempesaw Hardware in Davao City, managed by Marcos Chua. The items
delivered on credit to the Lagua Enterprises by the Gempesaw Hardware for the period
from October, 1973 to June 20, 1974 amounted to P28,601.54. Demands were made for
its payment and sometime in July, 1974, Daylinda Lagua issued Equitable Banking
Corporation Check No. 22711219A, in the amount of P30,000.00, payable to Marcos
Chua and postdated August 24, 1974, the difference in the amount being the accrued
interests on the amount of P28,601.54, in payment of the obligation. Upon presentment
after its due date, the said check was dishonored by the drawee bank for insufficient
funds. Accordingly, a letter was sent to Daylinda Lagua demanding payment therefor, but
she failed to pay. Consequently, an information was filed before the Court of First
Instance of Davao City charging her with estafa, defined and penalized under Article 315,
par. 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885, committed
as follows:

"That on or about August 24, 1974, in the City of Davao, Philippines, and within the
jurisdiction of this Honorable Court, the above-mentioned accused, well knowing that she
did not have sufficient funds in the bank, did then and there wilfully, unlawfully and
feloniously and with intent to gain issue and made out an Equitable Banking Corporation
Check No. 22711219A dated August 24, 1974 in the amount of P30,000.00 in payment of
an obligation from the Gempesaw Hardware owned by Marcos Chua; that upon pre-
sentation of the above-mentioned check to the bank for encashment, the same was
dishonored for insufficiency of funds and despite repeated demands made upon said
accused to make good the above-mentioned check, the same refused and failed to make
payment, to the damage and prejudice of the said Gempesaw Hardware owned by Marcos
Chua in the aforementioned amount of P30,000.00."[8] 

The case was docketed in the Court of First Instance of Davao City as Criminal Case No.
2023.

Upon arraignment, Daylinda Lagua pleaded not guilty. Thereafter, trial proceeded and the
prosecution adduced its evidence, after which the accused filed a motion to dismiss the
case,[9]  claiming that upon the facts adduced in the case, it would appear that the
postdated check was issued in payment of a pre-existing obligation and, therefore,
no estafa was committed according to the rule enunciated in the cases of People vs.
Lilius[10] and People vs. Fortuno.[11]

The prosecution opposed the motion alleging that the rule stated in the Lilius  case had
been superseded by Republic Act No. 4885, so that the crime of estafa is committed upon
the issuance of a postdated check, subsequently dishonored, whether the issuance be in
payment of a pre-existing obligation, or for an obligation contracted at the time the check
was issued, when the issuance is attended by deceit constituting false pretense or
fraudulent act.[12]

The motion to dismiss the case was denied on December 23, 1975, [13] and the motion for
its reconsideration[14] was also denied on February 2, 1976.[15] Whereupon, Daylinda
Lagua instituted the present petition.

As stated, the issue for determination is whether or not the issuance of a postdated check,
which is subsequently dishonored for insufficiency of funds, in payment of a pre-existing
obligation, constitutes estafa as defined and penalized under Article 315, par. 2(d) of the
Revised Penal Code, as amended by Republic Act No. 4885 and Presidential Decree No.
818.

Prior to its amendment, Article 315, par. 2(d) of the Revised Penal Code, read:

"Art. 315. Swindling (estafa).- Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

xxx xxx xxx

 
"2. By means of any of the following false pretenses or fraudulent acts executed prior to
or simultaneously with the commission of the fraud:

xxx xxx xxx

"(d) By postdating a check, or issuing a check in payment of an obligation the offender

knowing that at the time he had no funds in the bank, or the funds deposited by him were
not sufficient to cover the amount of the check, and without informing the payee of such
circumstances."

Under said provisions, it was the rule that the mere issuance of a check with knowledge
on the part of the drawer that he had no funds to cover its amount and without informing
the payee of such circumstances, does not constitute the crime of estafa if the check was
intended as payment of a pre-existing obligation. The reason for the rule is that deceit, to
constitute estafa, should be the efficient cause of the defraudation and as such should
either be prior to, or simultaneous with the act of fraud.[16]

In 1967, the law was amended by Republic Act No. 4885, eliminating the phrases "the
offender knowing that at the time he had no funds in the bank" and "and without
informing the payee of such circumstances." However, a presumption was included. The
pertinent provisions of the law, as amended, now reads:

"Art. 315. Swindling (estafa).- Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

xxx xxx xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneously with the commission of the fraud:

xxx xxx xxx

 

"(d) By postdating a check, or issuing a check in payment of an obligation when the

offender had no funds in the bank, or his funds deposited therein were not sufficient to
cover the amount of the check. The failure of the drawer of the check to deposit the
amount necessary to cover his check within three (3) days from receipt of notice from the
bank and/or the payee or holder that said check has been dishonored for lack or
insufficiency of funds shall be prima facie evidence of deceit constituting false pretense
or fraudulent act."

A comparative analysis of the two provisions will readily show that what has been
established under the amendment is the prima facie  evidence of deceit constituting false
pretense or fraudulent act in case the drawer fails to deposit the necessary amount within
three (3) days from notice of dishonor from the bank and/or payee or holder of the check.
Likewise, the amendment has eliminated the requirement under the previous provision
for the drawer to inform the payee that he had no funds in the bank or the funds deposited
by him were not sufficient to cover the amount of the check.[17]  Moreover, what is
significant to note is that the time or occasion for the commission of the false pretense or
fraudulent act has not at all been changed by the amendment. The false pretense or
fraudulent act must be executed prior to or simultaneously with the commission of the
fraud. Thus, under 315, paragraph 2(d) of the Revised Penal Code, as amended by
Republic Act No. 4885, the following are the elements of estafa: (1) post dating 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. Now, it is asked: Is there deceit and damage when a bad check is issued in
payment of a pre-existing obligation? It is clear that under the law, the false pretense or
fraudulent act must be executed prior to or simultaneously with the commission of the
fraud. To defraud is to deprive some right, interest, or property by deceitful device.[18]  In
the issuance of a check as payment for a pre-existing debt, the drawer derives no material
benefit in return as its consideration had long been delivered to him before the check was
issued. In short, the issuance of the check was not a means to obtain a valuable
consideration from the payee. Deceit, to constitute estafa should be the efficient cause of
the defraudation.[19] Since an obligation has already been contracted, it cannot be said that
the payee parted with his property or that the drawer has obtained something of value as a
result of the postdating or issuance of the bad check in payment of a pre-existing
obligation.[20]

Finally, considering the absence of an express provision in the law, the postdating or
issuance of a bad check in payment of a pre-existing obligation cannot be penalized
as estafa by means of deceit, otherwise, the legislature could have easily worded the
amendatory act to that effect. Since the language of the law is plain and unambiguous,
We find no justification in entering into further inquiries for the purpose of ascertaining
the legislative intent.[21] Moreover, laws that impose criminal liability are strictly
construed.[22] The rule, therefore, that the issuance of a bouncing check in payment of a
pre-existing obligation does not constitute estafa has not at all been altered by the
amendatory act.[23]

The issue of jurisdiction was also raised by the petitioner in the case of People vs. Sabio,
G.R. No. L-45490. It is contended that the City Court, acting pursuant to its authority to
conduct preliminary investigations, cannot dismiss the case as a motion to quash can only
be availed of in a regular trial where the court has jurisdiction to try the offense. It is
further alleged that the purpose of a preliminary investigation is merely to determine a
probable cause and not to rule on difficult questions of law. We see no merit in these
contentions. There is no dispute that the information was filed before the City Court for
purposes of preliminary investigation only, as the offense falls under the exclusive
jurisdiction of the Court of First Instance. The check involved amounts to P1,500.00,
hence, the imposable penalty for the offense is prision mayor in its medium period or an
imprisonment ranging from eight (8) years and one (1) day to ten (10) years.[24] Under
Section 78 of Republic Act No. 521, as amended by Republic Act No. 3969, the City
Court of Cagayan de Oro City is authorized to conduct preliminary investigation.[25] 
When a power is conferred upon a court or judicial officer, it is deemed that all the means
necessary to carry it into effect are included therein.[26] The power, therefore, conferred
upon the City Court of Cagayan de Oro City to conduct preliminary investigations carries
with it the power to draw a conclusion after the investigation. It has been held that in the
preliminary investigation proper, the Justice of the Peace may discharge the defendant if
he finds no probable cause to hold the defendant for trial. But if he finds a probable
cause, it is his duty to bind over the defendant to the Court of First Instance for trial on
the merits.[27]  Moreover, the purpose of a preliminary investigation is to secure the
innocent against hasty, malicious and oppressive prosecutions, and to protect him from
open and public accusation of a crime.[28] The City Court, therefore, acted within its
jurisdiction in granting the motion to quash the information filed in this case.

WHEREFORE, in view of all the foregoing, judgment is hereby rendered:

1. Dismissing the petition in case G.R. No. L-45490 for lack of merit;

2. Reversing the decision of the Court of Appeals in case G.R. No. L-45711, and
acquitting the petitioner of the crime charged; and

3. Dismissing Criminal Case No. 2023, entitled "People vs. Daylinda Lagua".

No pronouncement as to costs.

SO ORDERED.
Castro, C.J., Teehankee, Muñoz Palma, Aquino, Santos, Fernandez, and Guerrero, JJ.,
concur.

Fernando, J., concurs in L-45711 and L-42971 (Criminal Case No. 2023) but dissents in
L-45490 as explained in a separate opinion.

Barredo, J., concurs and dissents in a separate opinion.

Makasiar, J., joins Justice Barredo in a concurring and dissenting opinion with Justice
Antonio in his dissent.

Antonio, J., dissents in separate opinion re-construction of Art. 315, 29d of the Rev. Penal
Code as amended.

[1]
 p. 4, rollo of L-45490.
[2]
 p. 19, ibid.
[3]
 pp. 5-7, tsn. of September 7, 1973.
[4]
 pp. 7-8, Id.
[5]
 p. 13, Id.
[6]
 p. 14, Id.
[7]
 Decision of the City Court of Pasay City.
[8]
 Annex "E", p. 43, rollo of L-42971.
[9]
 Annex "C", p. 17, Id.
[10]
 59 Phil. 339.
[11]
 73 Phil. 407.
[12]
 Annex "F", p. 45, Id.
[13]
 Annex "A", pp. 14, Id.
[14]
 Annex "D", p. 31, Id.
[15]
 Annex "B", p. 15, Id.
[16]
 People vs. Lilius, supra; People vs. Fortuno, supra.
[17]
 Congressional Record, Senate, Vol. II, No. 37, March 20, 1967, 931-937.
[18]
 People vs. Quesada, 60 Phil. 515.
[19]
 People vs. Fortuno, supra.
[20]
 People vs. Lilius, supra.
[21]
 Velasco vs. Lopez, 1 Phil. 720.
[22]
 People vs. Manantan, 115 Phil. 657; Neidlinger vs. State, 88 S.E. 687; Crawford, The
Constitution of Statutes, 460.
[23]
 "The amendment does not seem to have revoked the rule that issuing a bad check in
payment of a pre-existing obligation does not constitute estafa under par. 2(d)." (Aquino,
The Revised Penal Code, Vol. VIII, 1977 ed., 1611)
[24]
 Art. 315, Revised Penal Code, as amended by Presidential Decree No. 818, dated
October 22, 1975.
[25]
 "Section 78. Jurisdiction of the City Court.- The City Court shall have like jurisdiction
in civil and cri-minal cases and the same incidental powers as are at present conferred by
law upon jurisdiction of the municipal courts of capital of provinces and city courts of
chartered cities. It may also conduct preliminary investigation for any offense, without
regard to the limits of punishment, and may release, or commit and bind over any person
charged with such offense to secure his appearance before the proper court."
(Underscoring supplied)
[26]
 Biron vs. Cea, 73 Phil. 673.
[27]
 Ngo Hoc vs. Aquino, 72 Phil. 90; U.S. vs. Banzuela, 31 Phil. 564; Biron vs. Cea,
supra.
[28]
 People vs. Monton, G.R. No. L-33906, May 23, 1968.

CONCURRING IN L-45711 AND L-42971, BUT DISSENTING IN L-45490

FERNANDO, J.:
With due recognition of the merit that attaches to the opinion of the Court, ably penned
by Justice Hermogenes Concepcion Jr., I regret that I cannot yield concurrence to the
conclusion reached by the majority of my brethren: "The rule, therefore, that the issuance
of a bouncing check in payment of a pre-existing obligation does not constitute estafa has
not at all been altered by the amendatory act."[1] It follows therefore that I must cast a
dissenting vote as far as L-45490[2]  is concerned. Notwithstanding the divergence of view
as to the full force and effectivity that in my opinion should be accorded Republic Act
No. 4885, I am in agreement with my brethren insofar as the reversal of the decision of
the Court of Appeals in L-45711[3] and the order of respondent Judge in L-42971[4] for
reasons other than that given in the opinion of the Court. I shall explain why.

1. It does not admit of doubt that the legislative purpose of Republic Act No. 4885 was
precisely to cure an evil prevailing in the business world about the propensity to issue
checks without sufficient funds. The legislative body, after a thorough consideration of
the matter, gave its approval to the amendment in question as a way to minimize, if not
totally eradicate, that serious malady, the effect of which was to reduce well-nigh to
vanishing point the negotiability of checks. Even if it were admitted that there could have
been a more felicitous choice of language, still this Court, after a more sympathetic
consideration, could have been led, without doing violence to language, to give it force
and effectivity. This excerpt from the recent case of Bocobo v. Estanislao[5] finds
pertinence: "As noted in Sarcos v. Castillo: 'It is fundamental that once the policy or
purpose of the law has been ascertained, effect should be given to it by the judiciary.
From Ty Sue v. Hord, decided in 1909, it has been our constant holding that the choice
between conflicting theories falls on that which best accords with the letter of the law and
with its purpose. The next year, in an equally leading decision, United States v. Toribio,
there was a caveat against a construction that would tend "to defeat the purpose and
object of the legislator." Then came the admonition in Riera v. Palmaroli, against an
application so narrow "as to defeat the manifest purpose of the legislator." This was
repeated in the latest case, Commissioner of Customs v. Caltex, in almost identical
language.' Such an excerpt was quoted with approval in Automotive Parts and Equipment
Company v. Lingrad. It is of the essence of judicial duty then to construe statutes to
reflect fidelity to such a concept. In the apt language of Frankfurter: ‘A decent respect for
the policy of Congress must save us from imputing to it a self-defeating, if not
disingenuous purpose.'"[6]

2. The above conclusion, from my standpoint, receives reinforcement from a fundamental

civil law concept that the Court is not to refrain from utilizing a legal methodology
explicitly recognizing the generative capacity of legislation. In plainer terms, a distinction
has been made between the common law which has traditionally frowned on legislation
encroaching on its terrain[7]  and the civil law based as it usually is on a comprehensive
code, the result of legislation embodying as much as possible principles of the widest
generality and therefore enabling the judiciary to give it the most hospitable scope and, if
necessary, even a latitudinarian construction. As was pointed out by Bean: "Civil law
theorists, like their Anglo-American counterparts, have claimed a completeness and
universality for their own principles. Unlike the common law, however, the source of
those legal principles is not judicial precedent, but rather a legislatively enacted civil
code. In orthodox civil law theory, the statute is conceived of as being the most
satisfactory and perfect method of realizing justice,' and as the 'unique source of judicial
decisions.' When no rule can be found which expressly covers a particular problem, civil
law courts seek to discern from a statute or from a course of legislation, one or more
principles which can be applied to situations substantially similar or analogous to (but not
expressly covered by) the terms of the legislation. The formal concepts, in the German
system, have been explained as follows: 'The principles that are basic to the Code carry
the germ of further development in themselves. This development is by way of analogy.
If a case is not regulated in the law but a legally similar case is regulated, then this
provision is decisive in the deciding of the first case (Gesetzesanalogie) * * *. If no result
can be reached through this process of analogy, then the decision must be drawn from the
spirit of the whole law (Recht) considered as one system (Rechtsanalogie).[8]  It would be,
in my view, more consistent with the interpretation of legislation amending the Revised
Penal Code, the Spanish origin of which is still discernible, if that approach would be
followed in the determination of whether or not the amendment in question really did
attain its purpose. From such a standpoint, certainly my answer must differ from that
reached by the majority of my brethren. It may not be amiss to state that one of the most
eminent legal craftsmen to sit in the United States Supreme Court, the late Justice John
Harlan, was partial to this particular civil law methodology as reflected by his opinions
in Welsh v. United States[9] and Moragne v. States Marine Lines, Inc.[10]  If even in a
common law jurisdiction, there is receptivity to such a liberal spirit in the construction of
statutes, it would seem to me that there should not be the least hesitancy on the part of the
highest tribunal of this country when it considers an amendatory act to the Revised Penal
Code to manifest a similar attitude.

3. In the light of the above, I am left with no choice except to dissent in L-45490. As far
as L-45711 is concerned however, I concur in the decision reached, as there was no proof
of criminal intent on the part of petitioner Tan Tao Liap. According to the opinion of
Justice Concepcion Jr.: "Subsequently, however, Tan Tao Liap suffered business reverses
and so what he did was to inform Ngo Cheng not to deposit the second and third checks
which were to mature on August 31, 1972 and September 1, 1972, respectively, because
of his inability to raise the amounts to cover said checks. As an alternative, Tan Tao Liap
proposed to pay the balance in monthly installments of P300.00 until such time that he
could raise enough funds. Ngo Cheng, however, turned down the offer and even told Tan
Tao Liap that he was going to file a criminal case against him if he failed to deposit the
amount for the two remaining checks. At the instance of Ngo Cheng, Tan Tao Liap was
charged by the City Fiscal of Pasay City with the crime of estafa on January 24, 1973 for
issuing the third check (No. 7-442562, dated September 1, 1972, for P3,500.00) which
was dishonored for lack of funds."[11] An acquittal is certainly called for, it being evident
that the element of mens rea was conspicuous by its absence.
I am likewise persuaded to concur in L-42971 due to a circumstance which for me
militates against the conclusion that there was criminal intent. From the opinion of the
Court, it would appear that the prosecution had rested its case. Then came a motion to
dismiss. It was denied. To my mind, however, the very fact of compelling a debtor to
issue a post-dated check should be construed as a sufficient warning to the creditor that
the former might not be able to honor his commitment. To give him thereafter the right of
harassment, thus transforming the prosecutor's office into a collection agency and
enlisting the aid of the judicial branch, runs counter to my understanding of what a penal
statute stands for. The very pressure exerted by the creditor could suffice to deprive
effectively the freedom of choice on the part of a debtor hard-pressed to keep his business
going. That does not give rise, in my view, to that degree of culpability that calls for
criminal liability. Hence my concurrence.

[1]
 Opinion of the Court, 13.
[2]
 People of the Philippines v. Hon. Jose Sabio, Jr., et al.
[3]
 Tan Tao Liap v. Court of Appeals.
[4]
 Daylinda A. Lagua v. Hon. Vicente M. Cusi, Jr., et al.
[5]
 L-30458, August 31, 1916, 72 SCRA 520.
[6]
 Ibid, 524-525. Ty Sue is reported in 12 Phil. 485; Toribio in 15 Phil. 85 (1910); Riera
in 40 Phil. 105 (1919); Caltex in 106 Phil. 829 (1959); Automotive Parts, L-26406,
October 31, 1969, in 30 SCRA 248. The citation from Justice Frankfurter comes from
Nardone v. United States, 308 US 338, 341 (1939).
[7]
 Cf. Pollock, Essays in Jurisprudence and Ethics 85 (1882) and Pound, Common Law
and Legislation, 21 Harv. Law Rev. 383 (1908).
[8]
 Bean, The Legitimacy of Civil Law Reasoning in the Common Law, 82 Yale Law
Journal 258, 265-266 (1972). The quotation is from Charmont & Chausse in their
Commentary on the French Civil Code as quoted in A. Von Mehren, The Civil Law
System: Cases and Materials for the Comparative Study of Law 60 (1957).
[9]
 398 US 333 (1970).
[10]
 Ibid, 375.
[11]
 Opinion of the Court, 5-6.
 CONCURRING AND DISSENTING OPINION

BARREDO, J.:

I dissent because I believe that the doctrine on which the majority opinion predicates its
conclusion in all these three cases bears reexamination and should in fact be abandoned.
With particular reference, however, to G.R. No. L-45711, I concur in the acquittal of the
petitioner Tan Tao Liap on other grounds hereunder stated.

To my mind, the proposition that the issuing of a bouncing check in payment of a pre-
existing obligation is not estafa is as inaccurate in theory as it is unrealistic. It is not in
accord with the juridical concept of criminal fraud; it ignores the injury to the public
interest involved in the impairment of the acceptability and negotiability of checks as an
instrument of trading and commerce, which can conceivably approximate the economic
havoc that could arise from loss of confidence in treasury notes as legal tender.

I am almost certain that the whole business community in the Philippines will be shocked
by the seeming apathy of the Court in the face of the widespread clamor for relief from
the appalling situation which bouncing checks have brought about in our country. Mr.
Norberto Katigbak whom the Court has designated as amicus curiae precisely to assess
Us on the effects of that unquestionably irregular and injurious practice on commerce and
finance has underlined the staggering data that the amount involved in it had already
reached 200 million pesos daily before the Central Bank banned overdrafts, after which
the amount went down to the still enormous total of from 50 to 80 millions daily, and
there is no telling it will not rise again. To be sure, the Supreme Court is not supposed to
yield to the demands of any particular sector interested in the outcome of a case -- not
even to apparent public opinion -- where the tenor and meaning of existing legislation
does not permit such accommodation. Generally, the needed remedy in such
happenstance would lie within the province of the legislature. But when a situation that
by its nature ought to be covered by the criminal law tends to turn from bad to worse
because of a judicial construction of the pertinent codal or statutory provisions leaving
the door open to the perpetration with impunity of an act that is within the general
character of the prohibited ones, I feel very strongly that the Court should take a second
hard look at its past pronouncements and try to see if there is, within the ambit of its
authority, any logical and realistic way of meeting the emerging or ensuing evil, playing,
as it were, the role that a legendary little girl did to plug a hole in dikes of Holland.
Indeed, it cannot be doubted that the proliferation of bouncing checks has been due to the
immunity that the doctrine of no-estafa-in-bouncing-checks-issued-in-payment-of-pre-
existing-obligations has created in favor of criminal opportunists. It is high time We
examined and studied such doctrine again to find out if it is really as sound as it should be
and to scuttle it if it is not so.
The doctrine relied upon by the majority was first enunciated in People vs. Lilius, 59 Phil.
339 thus:

"Inasmuch as these last three checks Exhibits B, C and F were issued in payment of a
debt, even granting that the appellant issued them without sufficient funds to cover the
amount thereof, and furthermore, that he acted fraudulently in issuing them, such act does
not constitute the offense of estafa. The appellant obtained nothing under said checks. His
debt, for the payment of which said checks were issued, had been contracted prior to such
issuance. Hence the deceit, if there was any in the issuance of the questioned checks, did
not precede the defraudation. On the other hand, the record does not show that the debt
had been contracted through fraud. (Decisions of the Supreme Court of Spain of
December 18, 1889, June 9, 1891, and January 16, 1906.)"

Later, in People vs. Quesada, 60 Phil. 515, the ruling was:

"Under the Revised Penal Code postdating a check, or issuing it in payment of an

obligation, the offender knowing that at the time he had no funds in the bank, or the funds
deposited by him in the bank were not sufficient to cover the amount of the check, and
without informing the payee of such circumstances (Posfechando un cheque, o
librandolo contra un banco en pago de una obligacion, sabiendo que al tiempo de
hacerlo no tenia fondos, o no los tenia suficientes en dicho banco, sin advertir de tales
circunstancias al tomador) is not a crime in itself. It is a part of article 315, which defines
and punishes various forms of estafa or swindling. The payee or the person receiving the
check must be defrauded by the act of the offender (article 315, No. 2 [d], Revised Penal
Code). To defraud is to deprive of some right, interest, or property by a deceitful device,
and No. 2 of article 315 provides that the false pretenses or fraudulent acts therein
mentioned must be executed prior to or simultaneously with the commission of the
fraud."

Still later, in People vs. Fortuno, 73 Phil. 407, it appeared that appellant "Fidel Fortuno
rented from 'El Hogar Filipino' a room in the Crystal Arcade; and the rental having
become due, he issued in favor of the latter a check for P60 drawn against the Bank of the
Commonwealth. This check was, upon presentation to the bank for payment, dishonored
for lack of funds." Holding that there was no estafa under these circumstances, this Court
ruled:

 
"The issuance of a check with knowledge on the part of the drawer that he has no funds to
cover its amount and without informing the payee of such circumstance, does not
constitute the crime of estafa if the check was intended as payment of a pre-existing
obligation, as in the instant case. The reason for this rule is that deceit, to
constitute estafa, should be the efficient cause of the defraudation and as such should
either be prior to, or simultaneous with, the act of fraud. (Cf. People vs. Lilius, 59 Phil.,
339, 342; People vs. Quesada, 60 Phil., 515, 520.)"

Accordingly, the majority now holds that "(S)ince (in the circumstances contemplated) an
obligation has already been contracted, it cannot be said that the payee parted with his
property or that the drawer has obtained something of value as a result of the post-dating
or issuance of the bad check in payment of a pre-existing obligation."

In other words, the majority asserts in effect that when a check issued in payment of a
pre-existing obligation bounces, the payee suffers no defraudation. I submit that such
view does not conform with the more realistic juridical concept of defraudation in the
jurisprudence on estafa, which is undoubtedly more in consonance with the moral
implications of the admittedly deceitful act involved and, importantly, with the
negotiability and acceptability that checks should maintain as an indispensable instrument
of convenience and security in trade and commerce.

There can be no debate in that the "postdating or issuing of a check in payment of an

obligation when the offender had no funds therein, or his funds deposited therein were
not sufficient to cover the amount of the check" is a false pretense or a fraudulent act,
which in itself is already something to abhore. It is so characterized by Article 315, 2 (d)
of the Revised Penal Code. This truth notwithstanding, the existing jurisprudence in this
Court which the majority wants to perpetuate holds that there is no estafa when the
obligation that is paid is a pre-existing one, for two reasons: (1) In such an instance, there
is no damage or injury caused to the creditor and (2) the damage or injury that might be
suffered by the payee, if any, would always be subsequent to the issuing of the check,
hence the defraudation would not be prior to or simultaneous with the false pretense of
issuing a worthless check as required by the text of the first part of Article 315, 2 (d)
quoted in the majority opinion.

I cannot agree. As I see it, the flaw in such holding springs from the fact that it
unnecessarily relates the requisite defraudation or damage only and exclusively to the
pre-existing obligation, which naturally precedes the issuing of the check and remains in
a general sense unaffected by its bouncing. Thus, it is argued in some quarters that the
issuing of a check in payment of a pre-existing obligation is just the equivalent of
drawing and issuing a promissory note, which when unpaid on its due date gives rise to
only a civil liability.
I do not see it that way. When someone makes a promise to pay a pre-existing obligation
on a given date, whether such promise be verbal or in writing -- as in a promissory note --
it is obvious that the creditor takes it as nothing more than an assurance -- let us concede
-- based however on a mere expectancy, such that when the expectancy fails to
materialize and the debtor does not pay, the creditor does not feel deceived, even if he is
naturally disappointed. Indeed, the creditor may in such event even suffer some kind of
damage, as, when in anticipation of the promised payment, he contracts his own
obligations predicated on the fulfillment of the promise and then he cannot comply
because the promised payment does not materialize. Still, there would be no estafa,
simply because in that case, there is no deceit but only the frustration of a hope born of
the best of intentions.

But there is no parity between a promissory note, on the one hand, and a check, on the
other. A check is a formal and definite representation that the drawer has money in the
bank sufficient to cover the amount thereof on the date appearing thereon or whenever it
should be duly presented to the bank for encashment. It does not merely connote an
expectancy, it is a positive assertion of a fact, in the sense of an unconditional or absolute
assurance that there would not be any hindrance to its being honored by the drawee bank.
This fundamental point is to me self-evident.

Now, as I have already stated, the act of issuing a check when the drawer knows he does
not have sufficient funds that can cover the amount thereof in the bank constitutes deceit,
a false pretense, a fraudulent act. Under the law, all that is needed to make it criminal and
a estafa is that there be proof of damage. And in this regard, the majority holds that "in
the issuance of a check as payment for a pre-existing obligation, the drawer derives no
material benefit in return as its consideration had long been delivered to him before the
check was issued", for which reason, following Lilius, Quesada and Fortuno, it is claimed
there is no estafa, since "the issuance of the check was not a means to obtain a valuable
consideration from the payee."

Again, I disagree. The majority's pose ignores the rule long settled in this jurisdiction --
as early as 1907 -- that damage in estafa does not have to be either pecuniary or material.
Disturbance of property rights is enough. (United States vs. Goyonochea, 8 Phil.
117; United States vs. Malong, 36 Phil. 821; United States vs. Sevilla, 43 Phil. 186
and People vs. Santiago, 54 Phil. 814.) In Santiago, supra, there was a reverse situation,
because it was the accused who thru false pretenses was able to secure a check which
however he never cashed or used. The Court held that although the check was not cashed,
there was damage sufficient for estafa since in the meanwhile before the check could be
cancelled, the drawer was unable to make use of the amount covered thereby, which is a
realistic view. Now, similarly, it cannot be disputed that the receipt of a check by any
person in payment of an obligation creates a new situation in the property rights of the
recipient not only in relation to the satisfaction of the very obligation supposed to be paid
but also in his other transactions and activities which somehow might have been made to
depend precisely on the encashment of the check. The subsequent realization that the
check is worthless correspondingly disturbs that situation. Thus, as very wisely held in
the cases just cited, it cannot be truly said that the creditor is not damaged by the deceitful
act of issuing the check with knowledge that it is worthless. I should also add importantly
it is not necessary that some material benefit should have been derived by the debtor from
his fraudulent act. According to Viada, quoting from the decision of the Supreme Court
of Spain of April 7, 1888:

"CUESTION 2. Sera condicion precisa del delito de estafa que con ella logre su autor
un lucro determinado, o bastara que con la misma se haya inferido un perjuicio a otra
persona? -El Tribunal Supremo ha declarado que basta esto ultimo: 'Considerando que
no es condicion integrante del delito de estafa que su autor reporte para si propio
determinado o conocido lucro, sino que se realiza siempre que por virtud de engaño
generico o especifico, o de acto estimado por la Ley equivalente, se causa
intencionalmente perjuicio a otra persona en su patrimonio, etc.' (S. de 17 de Abril de
1888, Gaceta de 4 de agosto. )" (6 Viada, Codigo Penal Comentado, 374.)  

In other words, the defraudation in the estafa thru fraudulent acts defined in the Penal
Code does not necessarily refer to the taking by the accused from the offended party of
anything as long as the latter suffers some kind of damage in consequence of his false
pretense.

Stated otherwise, my fundamental position is that the Court does not have to adhere to the
precedents in Lilius, Quesada and Fortuno, but on the contrary, should overrule them,
because the damage or injury that should be the criterion in determining whether or not
there is estafa when a bouncing check is issued in payment of a pre-existing obligation
need not be that related to the pre-existing obligation but rather, to that suffered by the
creditor subsequent to the issuing of the check. Under this view, it is obvious that as
required by Article 315, 2 (d), the false pretense or fraudulent act of issuing the fundless
check is prior to the damage or defraudation.

It is to me inconceivable that with all the care, wisdom and perspicacity that went into the
preparation of the Revised Penal Code, such a widely known malpractice of issuing
bouncing checks necessarily causing damage to the parties concerned, if only in the
disturbance of their property rights, could have been left out without any punitive
sanction by the lawmakers, thereby deliberately leaving the same not only unpunished
but, on the contrary, encouraged, to the great detriment of the commercial and banking
community. I deny that those who framed the Revised Penal Code could have been guilty
of such an unpardonable omission, especially when it is considered that precisely to be
sure that no fraudulent act should escape due punishment, in Article 318, the Code
expressly penalizes "any person who shall defraud or damage another by any other deceit
not mentioned in the preceding articles of this chapter". In other words, read properly, the
Revised Penal Code punishes as estafa all kinds of frauds and false pretenses causing
damage to another. In my humble view, therefore, the seeming impotency today of those
aggrieved by the issuance of bouncing checks to prosecute those responsible therefor is
not in truth due to any fault of those who made the law. It is the jurisprudence -- faulty, in
my considered opinion -- the majority is upholding that is to blame. In a word, the
remedy is in Our hands. I cannot see any reason why We cannot act accordingly, when it
is part of Our responsibility to see to it that the laws are construed and interpreted to
enhance and protect the public interest. It is high time We tore down the sanctuary We
have accorded veritable estafadores and engañadores thru Our decisions in the past,
unless We are prepared to be entrapped in a pocket of quicksand of Our own making.

The foregoing discussion makes it unnecessary for me to elucidate at length on the effects
of the so-called Padilla amendment. I can only say that said amendment has
correspondingly facilitated the prosecution of any violation of Article 315, 2 (d) by
providing for a presumption of bad faith in the event a check is not made good within the
three-day period therein prescribed, where the payee has not been duly advised, upon its
issuance, of a possibility that the same might not be fully funded. But it is not very clear
to me that the presumption it has thus created can be deemed to retroact to the time of the
contracting of the preexisting obligation, as seems to be the theory being upheld in some
respectable sectors of the judiciary and of the bar.

My vote, therefore, is to grant the petition in G.R. No. L-45490 and to order respondent
court to proceed with the trial of the accused, Ranulfo M. Salazar, for estafa under Article
315, 2 (d) as construed above; and to deny also the petition in G.R. No. L-42971 and to
sustain the order of denial complained of.

In G.R. No. L-45711, I concur in the judgment acquitting the petitioner Tan Tao Liap, not
because of the doctrine of pre-existing obligations but on the ground that his issuance of
the checks in question was practically the product of coercion and so, faced with the
inability to make good two of said checks, he frankly informed the payee, his creditor,
before the latter could negotiate the same, of the business reverses he had suffered,
thereby showing good faith. There was actually no deceit in this case.

Makasiar J., concurs.

DISSENTING OPINION

ANTONIO, J.:

I dissent for the following reasons:

The decision of the Supreme Court of Spain of December 18, 1889, which was the basis
of the rule enunciated in People v. Lilius[1]  that the deceit must precede and be the
efficient cause of the def-raudation, was actually predicated on the provisions of Article
548 of the Spanish Penal Code. The same is true with the decisions of the Supreme Court
of Spain of June 9, 1891 and January 16, 1906, cited in the Lilius case.

Article 548 of the Spanish Penal Code states:

"1.° El que defraudare a otros usando de nombre fingido, atribuyéndose poder,

influencia o cualidades supuestas, aparentando bienes, crédito, comision, empresa o
negociaciones imaginarias, o valiéndose de cualquier otro engaño semejante que no sea
de los expresados en los casos siguientes."

The afore-cited paragraph 1 of Article 548 of the Spanish Penal Code is the same as
paragraph 1 of Article 535 of the Penal Code of Spain which was in force in the
Philippines until the Penal Code was revised. Article 535, paragraph 1 of the Penal Code
provides:

"The penalties prescribed by the next preceding article shall be imposed upon:

(1) Any person who shall defraud another by the use of any fictitious name, or by falsely
pretending to possess any power, influence, qualification, property, credit, agency, or
business, or by means of any similar deceit other than those hereinafter enumerated."

The same penal proviso is now embodied in paragraph 2(a) of Article 315 of the Revised
Penal Code which provides:

"2. By means of any of the following false pretenses or fraudulent acts executed prior to

or simultaneously with the commission of the fraud:

(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." (Italics supplied.)
This is the class of estafa committed through fraudulent means, to wit, use of fictitious
names, etc. in order to obtain gain or advantage. As a general rule, in order to constitute
deceit there must be a false representation to a matter of fact, a positive assertion of
falsehood—which false statement or fraudulent representation must necessarily be made
prior to or simultaneously with the delivery of the property, it being essential that such
deceit, or fraudulent representation constitute the very cause or the only motive which
induces the offended party to part with the thing.

Thus, delivery by the drawer to the payee of a fictitious draft with a fixed period for
payment in exchange for a sum of money received from the latter, the drawer having
neither credit nor funds at the place and with the person against whom the bill is drawn,
payment being refused upon due presentation, was held as estafa under Article 535, No.
1, of the old Penal Code penalizing fraud thru false pretenses.[2]  Similarly, where checks
are issued by the defendant and he receives the money for them, and then he stops
payment on the checks and does not return the money, and at the time he cashed the
checks he intended to stop payment on them, the same was also considered
as estafa under the same penal provision.[3] The Court also considered the following as
instances of estafa under false pretenses, viz.: (a) where one signs a check with a
fictitious name, falsely pretending that said check could be encashed, and then on the
strength of such false pretense, obtains from the offended party money in exchange for
the worthless check, he is guilty of estafa under the aforesaid article;[4]  or (b) where a
person falsely signs a check as an unremarried widow for the purpose of encashing a U.S.
Veterans pension check, although her right to the pension has been extinguished because
of her remarriage, she is also guilty of estafa under this article.[5]

Since the issuance of worthless checks in exchange for cash or other valuable
consideration was already considered as estafa  under false pretenses defined in
paragraph 1 of Article 535 of the Penal Code which was in force in the Philippines, it
would therefore be more in conformity with logic and sound reason to conclude that Act
No. 3313 which was approved on December 3, 1926 was intended to cover other
fraudulent acts. Act No, 3313 was incorporated as paragraph 10 of Article 535 of the old
Penal Code. It provides thus:

"Art. 535. The penalties prescribed by the next preceding article shall be imposed upon:

xxx xxx xxx

 
10. Any person who in his own name or as an officer or member of a corporation, entity,
or partnership shall issue a check or any other commercial document against a bank
established or that may hereafter be established in these Islands in payment of a debt, or
for any other valuable consideration knowing that he does not have at the time of its
issuance sufficient provision of funds in the bank to cover its amount, or, having such
funds, shall maliciously and feloniously sign his check differently sum the signature
registered at the bank as his authentic signature, in order that the bank shall refuse to pay
the same; or shall issue a postdated check and at the date set for the payment of it,
the drawer of the check does not have sufficient deposit  in the bank to pay for the check.
And any person who shall endorse in his own name or as an officer or member of a
corporation, entity or partnership a check or any other commercial document payable
upon demand or at some subsequent date knowing that the drawer of the instrument does
not have sufficient funds in the bank against which it was drawn." (As added by Act No.
3313. Italics supplied.)

A careful analysis of the provisions of paragraph 10 of Article 535 will indicate that
the estafa defined and penalized under paragraph 10 is distinct and different from
the estafa  thru false pretenses defined and penalized in paragraph 1 of the same article.
Thus, under paragraph 10 of Article 535, "the issuance of a check or any other
commercial document against a bank * * * in payment of a debt, or for any other
valuable consideration", where the person issuing it (1) knows that he does not have at
the time of its issuance sufficient funds in the bank to cover the amount of the check; or
(2) having such funds, shall maliciously and feloniously sign his check differently from
the signature registered at the bank as his authentic signature, in order that the bank shall
refuse to pay the check; or (3) postdates the check, and "at the time set for the payment of
it, the drawer of the check does not have sufficient deposit in the bank to pay for the
check" constitutes swindling or estafa and, therefore, subject to penal sanctions. The
phrase "in payment of a debt" presupposes the existence of a prior obligation for the
extinguishment or payment of which the check is issued. The fraud, therefore, consists in
the fraudulent payment of the obligation, not in the contracting of the obligation. The
false pretense or fraudulent act of issuing the worthless check to pay the obligation
precedes the damage, which precisely materialized upon the dishonor of the check.

The Code Committee, in revising the Spanish Penal Code on estafa, placed paragraph 10
of Article 535 of the old Penal Code as Section 2, paragraph (d) of Article 315 of the
Revised Penal Code. The phrase "in payment of a debt, or any other valuable
consideration" in Act No. 3313 was simplified by the Code Committee
and substituted with the phrase "in payment of an obligation".

However, in People v. Fontana,[6] citing People v. Quesada,[7] and People v. Lilius, supra,

it was held that the issuance of a worthless check intended as payment of a pre-existing
obligation is not estafa, as the deceit should be the efficient cause of the defraudation and
as such it must be prior to or simultaneous with the commission of the fraud.
It was precisely to rectify this anomalous situation that Senate Bill No. 413 was
introduced by Senator Ambrosio Padilla. Thus, the explanatory note of Senate Bill No.
413 reads:

"The issuance of checks as negotiable instruments has been abused by persons who have
no bank deposits or have insufficient funds to cover the amounts of said checks. This bad
practice has been utilized by drawers of checks to defraud innocent payees or indorsees.
It disturbs banking transactions. It impairs the negotiability of checks. It is true that a
check may be dishonored without any fraudulent pretense or fraudulent act of the drawer.
Hence, the drawer is given three days to make good the said check by depositing the
necessary funds to cover the amount thereof. Otherwise, a prima facie presumption will
arise as to the existence of fraud, which is an element of the crime of estafa.

"The public interest, particularly the regularity of commercial payments thru checks,

would justify the immediate approval of this bill." (Italics supplied.)

In his brief sponsorship speech, Sen. Padilla stated:

"In the same vein, it has been held that if the check is used in payment of an existing
obligation, it can not be considered as estafa, even if the obligor had the fraudulent intent
of issuing a check without funds and he knows that his check will be dishonored by the
drawee bank. Now, this practice of issuing bouncing checks has had a very deleterious
effect on our commercial transaction(s). As a matter of fact, even tax obligations are
being paid by taxpayers whose checks are not good. And it has been reported once that
even the Bureau of Internal Revenue has received a number of checks amounting to
substantial amounts which are covered by bad checks, and the drawers of these checks
are really animated by fraudulent intent to deceive the payee, to disturb banking
transactions and to impair the negotiability and acceptability of checks as negotiable
instruments.

"I was paying once certain fees to the City of Manila with my check, thru a messenger and
I was informed that my check, or other checks of the same import, would not be
acceptable because the fees should be paid in cash. I believe that this is not a good
practice, because we should encourage the use of checks. However, if the use of checks
can be abused and misused without any liability on the part of the drawer and to the great
prejudice of the payee, then this obnoxius practice of not accepting checks even in
the payment of taxes and fees may become the rule.

"So. Mr. President, I submit that public interest, particularly the regularity of commercial
payments by checks, would justify the amendment of Article 315, Section 2, paragraph
(d) of the Revised Penal Code as proposed in this bill." (Congressional Record of the
Senate, Vol. II, No. 37, p. 932; pp. 2-3 of xerox copy of Congressional Record submitted
by the Solicitor General, Italics supplied.)

"Senator Padilla: * * * The intention precisely is to discourage persons from

making use of this device of issuing checks — not to pay their just obligations  but to
embarrass the payee as well as commercial transactions." (at p. 935, see p. 9 of xerox
copy of Congressional Record submitted by the Solicitor General; Memorandum of
Amicus Curiae, pp. 12-13. Italics supplied.)

It was, therefore, obvious from the discussions on the floor of the Senate that it was the
intention of Congress to eliminate the two defenses available under the old provision
which practically nullified the penal sanction of estafa thru the issuance of bouncing
checks, to wit: (a) that the check was issued in payment of a pre-existing obligation; or
(b) that the drawer of the check informed the payee that his funds deposited in the bank
may not be sufficient to cover the amount of his check. The clear legislative intent was to
penalize as estafa not only the issuance of a worthless check at the time of contracting an
obligation, but also the payment in a fraudulent  manner of an obligation already existing.
The provision in question is not only concerned with the offense of obtaining money or
property by false pretense. The making or uttering of the check and its dishonor is
sufficient. For defraudation can take place not only at the time of contracting the
obligation, but also at the time it is supposed to be paid. This fact is reflected by the
procedural rule that the venue for the crime of estafa may be either in the place where the
obligation was contracted or in the place where the check is dishonored. To hold that it is
only the issuance of a bouncing check at the time of contracting  the obligation that is
punishable under paragraph 2(d) of Article 315 of the Revised Penal Code would render
this provision as a mere surplusage, because this overt act is already covered by
paragraph 2(a) of the same Article 315.

Senate Bill No. 413, as approved by the Senate and concurred in by the House of
Representatives, was signed into law by President Ferdinand E. Marcos on June 17, 1967,
and became Republic Act No. 4885. Subsequently, on October 22, 1975, President
Marcos promulgated Presidential Decree No. 818, increasing the penalties
for estafa committed thru the issuance of bouncing checks.
The provisions of paragraph 2 of Article 315 of the Revised Penal Code, invoked as the
basis of the contention that the check should be issued and delivered prior to or
simultaneously with the contracting of the obligation, states: "By means of any of the
following false pretenses or fraudulent acts executed prior to or simultaneously with the
commission of the fraud." It must be noted that the phrase "that the obligation must be
contracted at the time of the issuance of the check" does not appear in any text of the law.
[8]

The term "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. [9] The term
"commission of the fraud" means the "swindling" or defraudation of the victim, who is
the payee of the bouncing check. The word "fraud" does not refer to the "false pretense
or the fraudulent act", for that would be redundancy or surplusage.

The contracting of an obligation necessarily carries with it a promise  to pay such

obligation. Thus, when a person borrows money from another or purchases a thing on
credit, he does so always with the promise to pay the debt or the article purchased. This
promise may be an honest one, made in all good faith, with the clear intention of
fulfilling it. Thus, if such good faith is shown, mere delay or inability to pay later on due
to unavoidable circumstances on the part of the debtor does not make him criminally
liable for estafa. On the other hand, the promise may be a fraudulent one, made in bad
faith, with no intention to pay the debt at all, even from the beginning. In such a case, the
promise is a mere false pretense, a positive assertion of falsehood to induce the creditor
to lend the money or the trader to deliver the goods. This "false pretense" would be prior
to or simultaneous with the contracting of the obligation. There cannot be any doubt that
in such a case, the false pretense may be considered as the very cause or the only motive
which induced the offended party to part with the thing. This could be a case
of estafa under Article 315, paragraph 2(d) of the Revised Penal Code.

But fraudulent intent may not be easily ascertainable, in the absence of any overt act.
Since fraud is a state of mind, it need not be proved by direct evidence but may be
gathered from the nature of the act or from the circumstances of the case. Indeed, the
character of the promise depends on the intention, the good or bad faith of the promissor,
which, being subjective, is incapable of direct proof. There is no question that the
legislature may, by appropriate legislation, create rules of evidence under which natural
inferences from certain facts may become presumption of law. For example,
the failure of a public officer to have duly forthcoming any public funds or property of
which he is chargeable, upon demand by any duly authorized officer, is considered prima
facie evidence of malversation.[10] Hence, the second sentence of paragraph 2(d) of
Article 315 supplies the legal presumption which would show prima facie  that the
promise made upon contracting the obligation is a mere false pretense or a positive
assertion of a falsehood. The rule under paragraph 2(d) of Article 315 that "the failure of
the drawer of the check to deposit the amount necessary to cover his check within three
(3) days from receipt of notice from the bank and/or the payee or holder that said check
has been dishonored for lack or insuffiency of funds shall be prima facie evidence of
deceit" is a rule of evidence and no more. It is intended to provide for prima facie 
evidence for the prosecution in such a way that whenever a person issues a postdated
check or a check when he had no funds in the bank or his funds are insufficient to cover
the check, and fails to make good the check within three (3) days from receipt of the
notice of dishonor---the law creates the presumption that he acted with deceit  or
fraudulent intent. There cannot be any doubt also that the legislature may penalize the
issuance of worthless checks, although the payee takes the check in payment of a pre-
existing debt. This is precisely the purpose of this amendment which was enacted in
furtherance of the public policy regarding this special sort of commercial fraud.
The dishonor of the check in either case is the consummation of the defraudation or the
commission of the fraud, within the intendment of the requirement that the "false pretense
or fraudulent acts must be executed prior to or simultaneously with the commission of the
fraud."

It has been argued that there could not be estafa because the offended party does not
suffer any damage as a result of the dishonor of the check, as the existing obligation is
not discharged. It can scarcely be argued with reason that under such circumstances, the
crime of the offending party would, in any wise, be lessened because of the fact that the
existing obligation is not extinguished. The issuance of the worthless check serves the
purpose of delaying any action on the transaction, and constitutes at least a detriment or
prejudice to the payee of the check. It is possible that the payee may deposit the same
and, relying thereon, issue his own check to a third party in connection with a transaction
or agreement which he may have had with the latter. It is not difficult to perceive the
mischievous results that may ensue from the dishonor or rejection of the first check. His
own check may bounce as a result thereof, rendering him liable for any damage or
prejudice which the third party may suffer as a consequence. It has been held that a check
implies a contract on the part of the drawer that he has funds in the hand of the drawee
for its payment or presentation.[11]  It cannot be questioned that the dishonor of a
merchant's or trader's check is tantamount or analogous to a slander of his trade or
business, imputing to him insolvency or bad faith.[12]

In any event, as early as March 22, 1907, this Court held that mere "disturbance" in
property rights "constitutes real and actual damage, and is positive enough under a rule of
law to produce one of the elements constituting the crime of estafa.[13]  Again, in a
subsequent case promulgated on August 30, 1917, this Court reiterated the principle in
Goyenechea that mere disturbance of the property rights of the complainants is
considered real and actual damage within the intendment of the penal law on estafa.
[14]
 The same principle was re-affirmed in People v. Santiago,[15] where this Court stated:
 

"The appellant contends that as the check was not cashed by the Bank of the Philippine
Islands, and no attempt was made to cash it, no crime has been committed. The check
issued to the defendant by the offended party was payable to 'cash', and therefore,
negotiable. While the defendant had said check in his possession, the offended party
could not dispose of the amount for which it was made out, and this was, at least,
temporary prejudice sufficient to constitute estafa (U.S. vs. Goyenechea, 8 Phil. 117; U.S.
vs. Malong, 36 Phil. 821)." (At p. 816).

Statistically, the greater bulk of dishonored checks consists of those issued in payment of
pre-existing obligations. It was obviously because of this that the President of the
Philippines promulgated Presidential Decree No. 818, increasing the penalty
for estafa committed under paragraph 2(d) of Article 315 of the Revised Penal Code. To
quote pertinent portions of the decree, particularly the "whereases":

"WHEREAS, reports received of late indicate an upsurge of estafa (swindling) cases

committed by means of bouncing checks.

"WHEREAS, if not checked at once, this criminal act would erode the people's
confidence in the use of negotiable instruments as a medium of commercial transaction
and consequently result in the retardation of trade and commerce and the undermining of
the banking system of the country.

"WHEREAS, it is vitally necessary to arrest and curb the rise in this kind of estafa cases
by increasing the existing penalties provided therefor. * * *."

According to Mr. Norberto Katigbak, a well known financial columnist who appeared as
"amicus curiae", the approximate total value of bouncing checks per day was close to 200
million pesos, and thereafter when overdrafts were banned by the Central Bank, it
averaged between 50 million to 80 million pesos a day. According to him, the great
volume of bouncing checks has made access to credit more difficult, hampered the
expansion of business, and disrupted normal business transactions, with consequential
serious repercussions on the economy; thus the explanatory note in Senate Bill No. 413,
in P.D. No. 818, that "the issuance of checks as negotiable instruments have
been abused by persons who have no funds or insufficient funds * * * to defraud innocent
payees * * *". These practices disturbs banking transactions. It impairs the people's
confidence in the use of negotiable instruments as a medium of commercial transaction
and consequently results in the retardation of trade and commerce, and the undermining
of the banking system. The public policy, in furtherance of which Republic Act No. 4885
was enacted, is therefore clearly manifest.

The first and fundamental duty of the courts is the application of the law according to its
express terms, interpretation being called for only when such literal application is
impossible. The construction of the statute should be made with reference to its purpose,
and in harmony and in conformity therewith, in order to aid, advance, promote, support
and effectuate such aim, motive, aspirations or object. A construction which would
operate to impair, pervert, frustrate, thwart, or nullify the very purpose of the statute
should be avoided.[16]  This rule is applicable to penal statutes. Indeed, the canon that
penal laws are to be strictly construed “is not an inexorable command to override
common sense and evident statutory purpose."[17] Certainly, we cannot shut our eyes to
notorious mischiefs which the law is intended to suppress.

At any rate, it is my considered opinion that the reprehensible act of issuing bouncing
checks, albeit in payment of pre-existing obligations, should not go unpunished. At the
very least, it should be penalized under Article 318 of the Code, which reads as follows:

"Art "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.

xxx xxx xxx

The foregoing section is suppletory to the preceding provisions of the Code on estafa and
should be applied whenever the elements of deceit and prejudice are present. [18]

Makasiar, J., concurs.

[1]
 No. 38774, December 23, 1933, 59 Phil. 339.
[2]
 U.S. v. Mendezona, No. 4211, Nov. 18, 1908, 12 Phil. 72.
[3]
 Article 535, paragraph 1, of the old Penal Code; U.S. v. Lee Cheng Poe, 39 Phil. 466,
No. 13969, Jan. 15, 1919.
[4]
 People v. Bisquera, 51 O.G. 248.
[5]
 People v. Samonte, L-12733, Apr. 29, 1959, 105 Phil. 1288.
[6]
 No. 48458, Nov. 7, 1941, 73 Phil. 407.
[7]
 No. 40846, Sept. 1, 1934, 60 Phil. 515.
[8]
 Act No. 3313; Act No. 315, par. 2(d) of Act No. 3815; and Republic Act No. 4885.
[9]
 37 Am. Jur. 2d. 19, at Sec. 19.
[10]
 Article 217, Revised Penal Code, as amended by Republic Act No. 1060.
[11]
 Bull v. First Nat. Bank, 123 U.S. 105, 31 L. ed. 92.
[12]
 Araneta v. Bank of America, L-25414, July 30, 1971, 40 SCRA 144.
[13]
 U.S. v. Goyenechea, No. 3307, March 22, 1907, 8 Phil. 117.
[14]
 U.S. v. Malong, No. 12597, Aug. 30, 1917, 36 Phil. 821.
[15]
 No. 32455, Aug. 6, 1930, 54 Phil. 814.
[16]
 73 Am. Jur. 2d. 360.
[17]
 Ibid., pp. 456-457.
[18]
 Decision, Supreme Court of Spain, July 9, 1896; Hidalgo, Codigo Penal 878.

[ G.R. No. L-57170, November 19, 1982 ]

KO BU LIN, PETITIONER, VS. COURT OF APPEALS AND PEOPLE OF
THE PHILIPPINES, RESPONDENTS.

[G.R. No. L-53663, November 19, 1982]

LOLITA BAÑARES, PETITIONER, VS. COURT OF APPEALS AND

PEOPLE OF THE PHILIPPINES, RESPONDENTS.

DECISION
MELENCIO-HERRERA, J.:

Separate Decisions of the Court of Appeals are sought to be reversed through these two
appeals by Certiorari  filed by petitioners Ko Bu Lin (in G.R. No. L-57170), and Lolita
Bañares (in G.R. No. L-53663), involving Article 315 of the Revised Penal Code
on Estafa, and the doctrine of double jeopardy.

The Petitions were initially denied by the former First Division of the Court, but, on
Motions for Reconsideration filed by both petitioners, and after referral of both cases to
the Court en banc due to failure to get the concurrence of five members within the
Division, the Court en banc resolved to give due course.

G. R. No. L-57170

Petitioner Ko Bu Lin was charged in Criminal Case No. 6959 of the Court of First
Instance of Manila, Branch XL, with Estafa under the following Information: 

"That on or about the 5th day of May, 1970, in the City of Manila, Philippines, the said
accused did then and there willfully, unlawfully and feloniously defraud one Go Song
Hiap in the following manner, to wit: the said accused, by means of false manifestations
and fraudulent representations which he made to said Go Song Hiap to the effect that he
(accused) has 23,000 bags of cement for sale of 94 pounds each in his bodega at 1332
Tayabas, Manila, all valued at P33,500.00; that said bags of cement are ready for delivery
anytime to the buyer upon demand and that he (accused) is willing to issue Check No.
BA-HO 345479A which has sufficient funds in the bank of Asia as a cover check to
guaranty the quality of cement which Go Song Hiap may encash on May 25, 1970 if the
cement is not of the standard quality, and by means of other deceits of similar import, in-
duced and succeeded in inducing the said Go Song Hiap to deliver the sum of P33,500.00
as payment for the said 23,000 bags of cement, which said accused received well
knowing that he has no cement and that he has no sufficient money in the bank to back up
his cover check which sums of money, once in his possession, in spite of repeated
demands made upon him to return the said amount of P33,500.00 or deliver the 23,000
bags of cement, he refused and failed, and still fails and refuses to do so, and instead
misappropriated, misapplied and converted the said amount to his personal use and
benefit, to the damage and prejudice of the said Go Song Hiap in the aforesaid sum of
P33,500.00, Philippine currency."

After trial, the lower Court convicted petitioner of Estafa under Article 315, 2(d) of the
Revised Penal Code (by issuance of bouncing checks).

On appeal, respondent Court of Appeals affirmed conviction but penalized the accused
instead under Article 315, 2(a) (thru false pretenses or similar deceits). Two Motions for
Reconsideration having been denied, petitioner interposed the instant appeal
by Certiorari.

G.R. No. L-53663

Petitioner Lolita Bañares was accused of Estafa in Criminal Case No. 1772 of the Court
of First Instance, Negros Occidental, Branch III, under an Information reading: 

"That on or about, the 2nd and 3rd week of June, 1974, in the municipality of San
Enrique, province of Negros Occidental, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, having received in trust from one Dolores
Centeno assorted jewelries worth P92,100.00 on consignment basis, with the condition to
return the same within one (1) month from receipt thereof if unsold or the money value of
the same if sold, far from complying with her said obligation, with abuse of confidence
and with intent to defraud, did then and there, wilfully, unlawfully and feloniously
misappropriate, misapply and convert to her own personal use and benefit the proceeds
thereof after said jewelries were sold and disposed of, and in order to cover up her
aforesaid unlawful and felonious act, well knowing that she no longer had any deposit
with the banks herein below mentioned having already closed her account with said
banks issued and delivered to said Dolores Centeno the following postdated checks
drawn against the banks hereinbelow mentioned: 

xxx    xxx       xxx       xxx 

xxx    xxx       xxx       xxx 

which checks, when presented for payment, were dishonored and not paid for the reason
stated in the foregoing, to the damage and prejudice of said Dolores Centeno in the total
amount of NINETY-TWO THOUSAND ONE HUNDRED PESOS (P92,100.00),
Philippine currency."

The Trial Court convicted her of Estafa under Article 315 2(d) of the Revised Penal Code
(by issuance of bad checks) as follows: 

"IN VIEW OF ALL THE FOREGOING, the Court finds the accused guilty, beyond
reasonable doubt, of the crime of estafa as so defined and penalized under Article 315,
par. 2(d) of the Revised Penal Code, as amended by Republic Act 4885 and as further
amended by Presidential Decree No. 818 and sentences her to suffer an indeterminate
imprisonment of Eight (8) years and One (1) day of prision mayor, as minimum, to
Twenty-two (22) years and eight (8) months of reclusion perpetua, as maximum, to
indemnify the offended party in the amount of Ninety Two Thousand One Hundred Pesos
(P92,100.00), without subsidiary imprisonment in case of insolvency, and to pay the
costs."
On appeal, respondent Court modified the lower Court judgment and convicted her
instead of Estafa under Article 315, 1(b) (by misappropriation or conversion). The
decretal portion of that Decision reads: 

"WHEREFORE, this Court finds the appellant Lolita Bañares GUILTY beyond
reasonable doubt for the crime of ESTAFA as defined and penalized under Article 315,
paragraph 1 (b) of the Revised Penal Code and she is hereby sentenced to suffer the
indeterminate penalty of imprisonment of, from FOUR (4) YEARS and TWO (2)
MONTHS of prision correccional as minimum, to FIFTEEN (15) YEARS of reclusion
temporal as maximum, and to indemnify the offended party in the sum of P92,100.00 but
without subsidiary imprisonment in case of insolvency, and to pay the costs."

After denial of her Motions for Reconsideration, the accused filed this Petition for
Review on Certiorari.

Petitioner Ko Bu Lin argues that when he pleaded not guilty upon arraignment, he was
exposed to the jeopardy of conviction of Estafa by means of false pretenses [Art. 315,
parag. 2(a)], or by issuing a check with no funds [ibid., parag. 2(d)], or both; that the
Trial Court's findings appearing in the body of the judgment that "he cannot be said to
have falsely pretended or fraudulently acted in selling the 23,000 bags of cement to Go
Song Hiap" and that "Article 315, No. 2(a) of the Revised Penal Code does not apply to
this case" exonerated him from the charge of Estafa thru false pretenses [Art. 315, 2(a)]
and was as good as an acquittal although omitted from the dispositive portion of the
Decision; that said acquittal is final and the Appellate Court cannot therefore be justified
in reopening his acquittal; that because he never disputed said findings of the Trial Court
and concentrated his appeal on his conviction under Art. 315, 2(d), nor did the
prosecution appeal from said findings, the Court of Appeals went beyond the limits of the
assigned errors and the facts upon which conviction was based, thus depriving him of his
day in Court and denying him his right to due process in his appeal.

Petitioner Lolita Bañares contends that the Information charged her with two separate and
distinct offenses of Estafa: that defined and penalized under Art. 315, 1(b), Revised Penal
Code, or Estafa through misappropriation, and that defined and penalized under Art.
315, 2(d), Revised Penal Code, or Estafa through issuance of bouncing checks, thereby,
she was already placed in jeopardy of being convicted of both offenses; that when the
trial Court chose to convict her of only the Estafa defined and penalized under Art.
315, 2(d), it necessarily "impliedly acquitted" her of Estafa under Art. 315, 1(b), Revised
Penal Code; that her said "implied acquittal" of Estafa through misappropriation was
immediately final; that she appealed only from the judgment convicting her
of Estafa through issuance of bouncing checks, so, what was opened up for review was
only the case concerning Estafa through issuance of bouncing checks; that the Court of
Appeals went beyond the limits of its power contrary to the constitutional guarantee
against double jeopardy.
The decisive issue is whether or not respondent Appellate Court erred in convicting
petitioner Ko Bu Lin of Estafa by means of false pretenses [Art. 315, parag. 2(a)], and
petitioner Lolita Bañares of Estafa by misappropriation or conversion [Art. 315, parag.
1(b)], when the Trial Courts had allegedly "impliedly acquitted" them of the said offenses
when they were respectively found guilty of Estafa through the issuance of bouncing
checks [Art. 315, parag. 2(d)].

It must be conceded that the elements of Estafa committed by means of the issuance of

bouncing checks /Art. 315, 2(d)/, of which petitioners were convicted by the Trial Court,
are different from the elements constituting Estafa by means of false pretenses /Art. 315,
2(a)/, of which Ko Bu Lin was convicted by the Court of Appeals, and from the elements
constituting Estafa by means of misappropriation or conversion under Article 315, 1(b),
of which Lolita Bañares was convicted by the same Appellate Court.

What is of vital importance to determine is whether or not petitioners were convicted of

crimes charged in the Informations as embraced within the allegations contained therein.
A reading of the Informations yields an affirmative answer. The Information filed against
Ko Bu Lin sufficiently charges Estafa through false pretenses. So does the Information
filed against Lolita Bañares sufficiently charge Estafa through misappropriation or
conversion. There was no ambiguity in the Informations, and the accused could
adequately prepare for their defense. Petitioners having been adequately informed of the
nature and cause of the accusation against them, petitioners could be convicted of the said
offenses, the same having been proved. Petitioners have not been deprived of any
constitutional right.

It is inaccurate for petitioners to contend that the Informations filed against them exposed
them to conviction for two offenses. The Informations are not duplicitous ones. The fact
is that the different means of commission have been specifically spelled out. As held in
the case of Jurado vs. Suy Yan[1] , per Makasiar, J., with almost identical facts as in the
Ko Bu Lin case: 

"The allegations in the information are clear and do not charge the accused with two
offenses. As contended by the City Fiscal of Iligan City, the information accuses the
defendant of only one estafa committed by false pretenses under paraggraph 2 of Article
315 of the Revised Penal Code, but specifically describes the false pretenses or deceitful
acts employed by the accused in perpetrating the offense, namely, his falsely pretending
to possess property, credit or business under subparagraph (a) of the aforesaid paragraph
2 of Article 315 and by postdating a check or issuing such check in payment of an
obligation knowing that he had no sufficient funds in the bank to cover the amount of the
check, without informing the payee of such circumstances, under sub-paragraph (d) of the
same paragraph 2 of Article 315. It is emphasized herein that subparagraphs (a) and (d) of
Article 315 of the Revised Penal Code are two of the five false pretenses or fraudulent
acts that can be employed and were actually employed in this case by the accused to
commit the one crime of estafa charged against him in the information."

By parity of reasoning, the same can be said in Lolita Bañares' case although separate
sections, Article 315, 2(d) and Article 315, 1(b) are involved. 

"We reiterate the earlier jurisprudence that where an offense may be committed in any of
the different modes and the offense is alleged to have been committed in two or more
modes specified, the indictment is sufficient, notwithstanding the fact that the different
means of committing the same offense are prohibited by separate sections of the statute.
The allegation in the information of the various ways of committing the offense should be
regarded as a description of only one offense and the information is not thereby rendered
defective on the ground of multifariousness." (ibid.)

One of the earlier jurisprudence referred to is U.S. vs. Tolentino[2] , which held: 

"It is a well-settled rule in considering indictments that where an offense may be

committed in any of several nodes, and the offense, in any particular instance, is alleged
to have been committed in two or more modes specified, it is sufficient to prove the
offense committed in any one of them, provided that it be such as to constitute the
substantive offense."

Besides, the appellants having gone to trial, without objection, on Informations they
allege as charging duplicitous offenses, they may be deemed as having waived the right
secured to them under Section 12, Rule 110 of the Rules of Court.[3]

Invocation of the constitutional immunity from double jeopardy is misplaced. When the
petitioners appealed from the sentence of the Trial Court, they waived the constitutional
safeguard against double jeopardy and threw the whole case open to the review of the
Appellate Court, which is then called upon to render such judgment as the law and justice
dictate, whether favorable or unfavorable to them,[4] and whether they are made the
subject of assignments or error or not.[5]  Petitioners' appeal conferred upon the Appellate
Court full jurisdiction and rendered it competent to examine the records, revise the
judgment appealed from, increase the penalty and cite the proper provision of the penal
law.[6] Also explicit in this regard is Section 11, Rule 124 of the Rules of Court: 

"Power of appellate Court on appeal. - Upon appeal from a judgment of the Court of
First Instance, the appellate court may reverse, affirm, or modify the judgment and
increase or reduce the penalty imposed by the trial court, remand the case to the Court of
First Instance for new trial or re-trial, or dismiss the case." (Emphasis supplied)

A case in point is that of Lontoc vs. People,[7]  aptly cited by the Solicitor General. In that
suit, the accused was charged with having committed the complex crime of Estafa thru
Falsification of a Public Document. The Court of First Instance found him guilty only of
Falsification thru Reckless Imprudence and sentenced him to suffer 4 months and 1 day
of arresto mayor. The accused appealed to the Court of Appeals which, after reviewing
the evidence, found him guilty of the original charge of Estafa thru Falsification of a
Public Document and sentenced him to an indeterminate penalty of from 8 years and 1
day to 10 years, 8 months, and 1 day of prision mayor, and to pay a fine of P200.00 and
costs. When the case was elevated to this Tribunal on Petition for Review on Certiorari,
the main question of law involved was: "could the Court of Appeals legally find the
appellant guilty of Estafa thru Falsification of a Public Document as originally charged
against him after the lower Court had found him guilty only of Falsification through
Reckless Imprudence, thereby acquitting him of Estafa?" This Court affirmed the finding
of the Court of Appeals and held: 

"We find that the decision of the Court of Appeals convicting the petitioner of the higher
offense with which he was charged in the Court of First Instance is in accordance with
the ruling laid down by this Court in a long line of decisions, from U.S. vs. Abijan, 1
Phil. 83, to People vs. Olfindo, 47 Phil. 1, which has been embodied in statutory form in
section 11 of Rule 120 above quoted. The reason behind this rule is that when an accused
appeals from the sentence of the trial court, he waives the constitutional safeguard against
double jeopardy and throws the whole case open to the review of the appellate court,
which is then called upon to render such judgment as law and justice dictate, whether
favorable or unfavorable to the appellant. This rule is too well known for any lawyer to
ignore. But if the numerous cases wherein this Court has convicted the appellants of a
higher offense or has increased the penalty imposed on them by the trial court, have not
been seen by some lawyers for accused-appellants as a red light indicative of danger or
risk, let the bitter experience of the herein petitioner serve as a perpetual reminder to
others to heed the moral lesson of the proverbs with which this opinion is prefaced."[8]

but modified the penalty imposed by the Court of Appeals for being erroneous.

The proposition submitted by petitioner, Lolita Bañares, that the appeal to the Court of
Appeals is "limited only to the judgment or sentence of conviction and does not affect the
implied acquittal, which was immediately final", is unavailing. The power of the
Appellate Court on appeal cannot be thus constricted. Petitioner's appeal was unqua-
lified. 

"x x x the rule is well-settled that when an accused unqualifiedly appeals from a sentence
of the trial court; as did the accused in this case – he waives the constitutional safeguard
against double jeopardy and throws the whole case open to the review of the appellate
court, which is then called upon to render such judgment as law and justice dictate,
whether favorable to the appellant or not."[9]
There was no implied acquittal to speak of, only one offense of Estafa having been
sufficiently charged in each Information. The Information in the Ko Bu Lin case merely
speaks of a "willingness" to issue "a cover check to guaranty the quality of the cement".
While the Information in the Bañares case alleges that the checks were issued "to cover
up a felonious and unlawful act." Absent is an essential element in Estafa through the
issuance of bouncing checks that the check be issued in payment of an obligation. But
even if there were implied acquittal, following the Lontoc case, the pertinent excerpt
from which has been quoted herein-above, there is no impediment to conviction by the
Court of Appeals even for a higher offense with which an accused has been charged.

For the same reason neither can petitioner, Ko Bu Lin, successfully claim that he was
"denied due process of law in his appeal because the Court of Appeals went beyond the
limits of his assigned errors and the facts upon which his conviction under sub-section
(d), paragraph 2 of Article 315 of the Revised Penal Code, as amended, is predicated." As
earlier stressed, whether raised in the assignments of error or not, the entire case is open
for full review.[10]

In sum, respondent Court of Appeals did not err in modifying the respective judgments of
the Trial Courts by finding Ko Bu Lin guilty of Estafa under Article 315 (2)(a), and
Lolita Bañares under Article 315 (1)(b), both of the Revised Penal Code.

WHEREFORE, denying petitioners' Motions for Reconsideration, both Petitions are

hereby dismissed, and the sentences of conviction respectively affirmed, without
pronouncement as to costs.

SO ORDERED.

Fernando, C.J., Teehankee, Concepcion, Jr., Plana, Escolin, Vasquez,

Relova, and Gutierrez, Jr., JJ., concur.

Makasiar and Guerrero, JJ., joins J. De Castro in his dissenting opinion.

Abad Santos, J., the petition as are based on frivolous grounds and should have been
summarily dismissed. They raised questions similar to how many angels can stand on the
point of a needle.

Aquino, J., no part.

[1]
 38 SCRA 663 (1971).
[2]
 5 Phil. 682 (1906).
[3]
 Sec. 12. Duplicity of offense. - A complaint or information must charge but one
offense, except only in those cases in which existing laws prescribe a single punishment
for various offense.
[4]
 People vs. Carreon, 115 Phil. 245 (1962).
[5]
 U.S. vs. Abijan, 1 Phil. 83 (1902); People vs. Olfindo, 47 Phil. 1 (1924); Suy Sui vs.
People, 92 Phil. 685 (1953).
[6]
 U.S. vs. Abijan, supra.
[7]
 74 Phil. 513 (1943).
[8]
 74 Phil. 519-520.
[9]
 People vs. Carreon, 115 Phil. 242, 245 (1962).
[10]
 Suy Sui vs. People, supra.

DISSENTING OPINION

DE CASTRO, J.:

I beg to dissent.

To my mind, the information[*]  is a duplicitous one because it charges two different

offenses, namely: (1) estafa by abuse of confidence, particularly estafa through
misappropriation or conversion under Article 315, paragraph 1 (b) of the Revised Penal
Code; and (2) estafa by means of false pretenses or fraudulent acts,
specifically estafa through issuance of bouncing checks under Article 315, paragraph 2
(d) of the said Code.

There seems to be no question that the trial court convicted the accused (petitioner
herein) only of the second charge. As such, having been charged and tried of estafa on
two counts and convicted only under the second charge, the accused is thereby
necessarily, albeit impliedly, acquitted of the first. When the accused appealed from the
judgment, it could only be from the judgment of conviction, not from that of acquittal. No
one in his right mind would appeal from a decision of acquittal. Moreover, legally
speaking, a decision of acquittal is immediately final, inappealable and executory. There
is nothing more to be done therewith. If no appeal was taken with respect thereto, then
the Court of Appeals had no jurisdiction to convict and impose the penalty for the said
charge.
I am of the opinion that it is not correct to say that the appeal throws the whole case open
for review, to the extent of giving the Court of Appeals jurisdiction to convict and impose
the proper penalty for the first charge of estafa. This would be a clear violation of the
right against double jeopardy. There is no waiver either of this right since the appeal is
limited only to the charge of which petitioner was convicted, as explained above.

What justifies the rule that an appeal in a criminal case throws open the whole case for
review is that the appeal constitute a waiver of the right of double jeopardy. However, an
appeal from a judgment of conviction as to one offense would not reopen the judgment of
acquittal for another offense charged in the same information. If in the case cited, [1] for
the complex crime of estafa through falsification, the judgment convicted the accused
only of falsification, but on appeal, the accused was found guilty of the complex crime
of estafa through falsification, this was legally feasible because only one offense was
charged, so the judgment was on that one complex crime, which may legally be modified,
because the judgment, as modified, will still be the same judgment on the single charge
of a complex crime. It will at once be noted in the case just cited, that the accused therein
was convicted of a lesser offense included within the higher offense of which the accused
was originally charged. In other words, the appellate jurisdiction of the Court of Appeals
to review the case when the right to appeal is exercised by the accused is limited only to
the offense of which he was convicted and from which judgment he has appealed,
excluding the other offense of which the accused has been acquitted though charged in
the same information, the latter not having been appealed, nor is it included in the former;
it is entirely separable therefrom.

Moreover, the falsification in the case cited in the main opinion, may be only considered
as the means of committing the estafa, and is not separable as a simple felony in itself but
is always an integral part of the complex crime of estafa through falsification. It could be
equated to a mere aggravating circumstance, which even if not found to be existent by the
trial court, may be found existent by the appellate court if the evidence warrants such
finding. Thus when it comes to mere aggravating circumstances, even if the trial court
failed to consider any, the appellate court may do so, even if as a result the penalty would
be raised by the appellate court. This is not violative of the principle against double
jeopardy, and the appellate court may increase the penalty, there being a waiver of the
right by the appeal taken by the accused, and the case is thrown open for a complete
review without violating the double jeopardy rule.

But if by way of illustration, A is charged with double murder for the killing of X and Y,
and the judgment of the trial court is to convict A only for the death of X, nothing having
been said of the killing of Y, and the indemnities awarded are only for the heirs of X, the
judgment is if not express at least implied, one of acquittal insofar as the killing of Y is
concerned. If the judgment is appealed, then the appellate court may not convict A for the
killing of Y, although it may convict or acquit A for the killing of X.
As between the two sets of cases illustrated above, it is the last one to which the instant
case is similar in all material aspects. The same rule as intimated to be applicable thereto
should therefore, apply to the case at bar. This means that the Court of Appeals could not
legally and validly convict petitioner for the first charge of estafa (abuse of confidence)
after she had been already acquitted thereof by the trial court.

What should also be given proper significance is the fact that petitioner's conviction for
the charge of estafa for having issued bouncing checks in payment of the obligation to
complainant, as to the price of the jewelries, is so erroneous on its face, in the light of the
established jurisprudence on the matter that petitioner is compelled to appeal the
judgment of conviction. In a manner of speaking, the accused is forced to appeal not as a
voluntary act, as to constitute waiver of the right against double jeopardy. Accordingly,
as already intimated, it would not be accurate to say that the appeal threw the whole case
open for review, including the fact that petitioner had been acquitted of the first charge
of estafa (abuse of confidence). It was only with the second charge of estafa (issuing
bouncing checks) that the Court of Appeals acquired jurisdiction and may affirm, modify
or reverse the judgment with respect only to said offense, which in the light of existing
jurisprudence,[2]  should be to reverse the conviction, and the Court of Appeals did. The
result would be for the petitioner to stand acquitted of both charges by the trial court
of estafa through misappropriation or conversion, and by the Court of Appeals,
of estafa through issuance of bouncing checks in payment of a pre-existing objection.

Accordingly, I vote to grant the petition and to set aside the decision of the Court of
Appeals in so far as it convicts the petitioner of the first charge of estafa committed by
abuse of confidence.

[*]
 For simplicity and convenience, this dissent focused on the case of petitioner Lolita
Bañares although, by reason of similarity on the essential facts of the two (2) cases,
whatever is said with respect to the case of petitioner Bañares may likewise be applicable
to the case of petitioner Ko Bu Lin.
[1]
 Lontoc v. People, 74 Phil 513.
[2]
People v. Sabio, Jr., 86 SCRA 568 and cases cited therein.