FIRST DIVISION
[G. R. No. 112985. April 21, 1999]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs. MARTIN L. ROMERO and ERNESTO C. RODRIGUEZ, accused-appellants.
D E C I S I O N
PARDO, J.:
The case before
the Court is an appeal of accused Martin L. Romero and Ernesto C. Rodriguez
from the Joint Judgment[1] of the Regional Trial Court, Branch
2, Butuan City, convicting each of them of estafa under Article 315, par. 2 (d)
of the Revised Penal Code, in relation
to Presidential Decree No. 1689, for widescale swindling,
and sentencing each of them to suffer the penalty of life imprisonment and
to jointly and severally pay Ernesto A.
Ruiz the amount of one hundred fifty thousand pesos (P150,000.00), with
interest at the rate of twelve percent (12%) per annum, starting September 14,
1989, until fully paid, and to pay ten thousand pesos (P10,000.00), as moral
damages.
On October 25,
1989, Butuan City acting fiscal Ernesto M. Brocoy filed with the Regional Trial
Court, Butuan City, an Information against the two (2) accused for estafa,[2] as follows:
“That on or about September 14,
1989, at Butuan City, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused being the General Manager and
Operation Manager which solicit funds from the general public for investment,
conspiring, confederating together and mutually helping one another, by means
of deceit and false pretense, did then and there willfully, unlawfully and
feloniously deliberately defraud one Ernesto A. Ruiz by convincing the latter
to invest his money in the amount of P150,000.00 with a promise return of 800%
profit within 21 days and in the
process caused the issuance of Butuan City Rural Rural [sic] Bank Check
No. 158181 postdated to October 5, 1989 in the amount of One Million Two
Hundred Thousand Pesos (P1,200,000.00) Philippine Currency, that upon
presentation of said check to the drawee bank for payment the same was
dishonored and that notwithstanding repeated demands made on said accused to
pay and/or change the check to cash, they consistently failed and refused and
still fail and refuse to pay or redeem the check, to the damage and prejudice
of the complainant in the aforestated amount of P1,200,000.00.”[3]
On the same day,
the city fiscal filed with the same court another information against the two
(2) accused for violation of Batas Pambansa Bilang 22, arising from the
issuance of the same check.[4]
On January 11,
1990, both accused were arraigned before the Regional Trial Court, Branch 5,[5] Butuan City, where they pleaded not
guilty to both informations.
The prosecution
presented its evidence on January 10, 1991, with complainant, Ernesto A. Ruiz,
and Daphne Parrocho, the usher/collector of the corporation being managed by
accused, testifying for the
prosecution.
On August 12,
1991, the defense presented its only witness, accused Martin L. Romero.
On November 13,
1992, the parties submitted a joint stipulation of facts, signed only by their
respective counsels. Thereafter, the
case was submitted for decision.
On March 30,
1993, the trial court promulgated a Joint Judgment dated March 25, 1993. The trial court acquitted the accused in
Criminal Case No. 3806[6] based on reasonable doubt, but
convicted them in Criminal Case No. 3808[7] and accordingly sentenced each of
them, as follows:
“IN VIEW OF THE FOREGOING, the
Court hereby renders judgment, finding or declaring -
“(a) Accused Martin L. Romero and
Ernesto C. Rodriguez innocent on reasonable doubt in Criminal Case No. 3806,
for violation of Batas Pambansa Bilang 22;
“(b) Accused Martin L. Romero and
Ernesto C .Rodriguez guilty beyond reasonable doubt in Criminal Case No. 3808
for estafa under P.D. 1689 for wide scale [sic] swindling and accordingly
sentences them to suffer life imprisonment (Section 1 P.D. 1689) and ordered
jointly and severally to return to Ernesto A. Ruiz the amount of One Hundred Fifty Thousand Pesos (P150,000.00) with interest thereon at the
rate of Twelve percent (12%) per annum starting from September 14, 1989 until
fully paid and to pay the amount of Ten Thousand Pesos (P10,000.00) as moral
damages.
“In the service of their sentence,
the accused pursuant to R.A. 6127, shall be credited for the preventive
imprisonment they have undergone (PP vs. Ortencio, 38 Phil 941; PP vs. Gabriel,
No. L-13756, October 30, 1959, cited in Gregorio’s “Fundamentals of Criminal
Law Review”, P. 178, Seventh Edition, 1985).”[8]
On March 31,
1993, accused filed their notice of appeal, which the trial court gave due
course on April 5, 1993. On March 16,
1994, this Court ordered the accused to file their appellants’ brief.
Accused-appellants
filed their brief on October 30, 1995, while the Solicitor General filed the
appellee’s brief on March 8, 1996.
During the
pendency of the appeal, on November 12, 1997, accused Ernesto Rodriguez died.[9] As a consequence of his death
before final judgment, his criminal and civil liability ex delicto, were
extinguished.[10]
Complainant
Ernesto A. Ruiz was a radio commentator of Radio DXRB, Butuan City. In August, 1989, he came to know the
business of Surigao San Andres Industrial Development Corporation (SAIDECOR),
when he interviewed accused Martin Romero and Ernesto Rodriguez regarding the
corporation’s investment operations in Butuan City and Agusan del Norte. Romero was the president and general manager
of SAIDECOR, while Rodriguez was the operations manager.
SAIDECOR started
its operation on August 24, 1989 as a marketing business. Later, it engaged in
soliciting funds and investments from the public. The corporation guaranteed an 800% return on investment within
fifteen (15) or twenty one (21) days.
Investors were given coupons containing the capital and the return on
the capital collectible on the date agreed upon. It stopped operations in September, 1989.
On September 14,
1989, complainant Ernesto A. Ruiz went to SAIDECOR office in Butuan City to
make an investment, accompanied by his friend Jimmy Acebu, and SAIDECOR
collection agent Daphne Parrocho. After
handing over the amount of one hundred fifty thousand pesos (P150,000.00) to
Ernesto Rodriguez, complainant received a postdated Butuan City Rural Bank check
instead of the usual redeemable coupon.
The check indicated P1,000,200.00 as the amount in words, but the amount
in figures was for P1,200,000.00, as the return on the investment. Complainant
did not notice the discrepancy.
When the check
was presented to the bank for payment on October 5, 1989, it was dishonored for
insufficiency of funds, as evidenced by the check return slip issued by the
bank.[11] Both accused could not be located
and demand for payment was made only sometime in November 1989 during the
preliminary investigation of this case.
Accused responded that they had no money.
Daphne Parrocho,[12] testified that on September 14,
1989, complainant, with his friend Jimmy Acebu, approached her to invest the
amount of P150,000.00 at SAIDECOR. As
she has reached her quota, and therefore, no longer authorized to receive the
amount, she accompanied them to the office of SAIDECOR at Ong Yiu District,
Butuan City. Accused Ernesto Rodriguez
accepted the investment and issued the check signed by him and Martin Romero.
For their
defense, accused Martin Romero[13] testified that on September 14,
1989, he issued a check in the amount of P1,200,000.00 corresponding to the
total of the P150,000.00 investment and the 800% return thereon. He claimed that the corporation had a
deposit of fourteen million pesos (P14,000,000.00) at the time of the issuance
of the check and four million pesos (P4,000,000.00) at the time SAIDECOR
stopped operations. Romero knew these
things because he used to monitor the funds of the corporation with the
bank. He was not aware that the check
he issued was dishonored because he never had the occasion to meet the
complainant again after the September 14, 1989 transaction. He only came to know about this when the
case was already filed in court sometime in the second or third week of January
1990.[14]
In this appeal,
both accused did not deny that complainant made an investment with SAIDECOR in
the amount of P150,000.00. However,
they denied that deceit was employed in the transaction. They assigned as
errors: (1) their conviction under P.D. 1689 due to the prosecution’s failure
to establish their guilt beyond reasonable doubt; and (2) the trial court’s
failure to consider the joint stipulation of facts in their favor.[15] There is no merit in this
appeal. We sustain accused-appellant’s
conviction.
Under paragraph
2 (d) of Article 315, as amended by R.A. 4885,[16] the elements of estafa are: (1) a
check was postdated or issued in payment of an obligation contracted at the time
it was issued; (2) lack or
insufficiency of funds to cover the check; (3) damage to the payee thereof.[17]
The prosecution has satisfactorily established all these elements.
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 confidences justly reposed, resulting in damage to another, or
by which an undue and unconscientious advantage is taken of another.[18] 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.[19]
Deceit is a
specie of fraud. It is actual fraud,
and consists in any false representation or contrivance whereby one person
overreaches and misleads another, to his hurt.
Deceit excludes the idea of mistake.[20] There is deceit when one is misled,
either by guide or trickery or by other means, to believe to be true what is
really false.[21] In this case, there was deception
when accused fraudulently represented to complainant that his investment with
the corporation would have an 800% return in 15 or 21 days.
Upon receipt of
the money, accused-appellant Martin Romero issued a postdated check. Although
accused-appellant contends that sufficient funds were deposited in the bank
when the check was issued, he presented no officer of the bank to substantiate
the contention. The check was dishonored when presented for payment, and the
check return slip submitted in evidence indicated that it was dishonored due to
insufficiency of funds.
Even assuming
for the sake of argument that the check was dishonored without any fraudulent
pretense or fraudulent act of the drawer, the latter’s failure to cover the
amount within three days after notice creates a rebuttable presumption of
fraud.[22]
Admittedly (1)
the check was dishonored for insufficiency of funds as evidenced by the check
return slip; (2) complainant notified accused of the dishonor; and (3) accused
failed to make good the check within three days. Presumption of deceit remained
since accused failed to prove otherwise. Complainant sustained damage in the
amount of P150,000.00.
Accused-appellant
also contends that had the trial court admitted the Admission and Stipulation
of Facts of November 9, 1992, it would prove that SAIDECOR had sufficient funds
in the bank.
Accused-appellant
relies on the fact that there was a discrepancy between the amount in words and
the amount in figures in the check that was dishonored. The amount in words was
P1,000,200.00, while the amount in figures was P1,200,000.00. It is admitted
that the corporation had in the bank
P1,144,760.00 on September 28,1989, and P1,124,307.14 on April 2, 1990. The check was presented for payment on
October 5, 1989. The rule in the Negotiable Instruments Law is that when there
is ambiguity in the amount in words and the amount in figures, it would be the
amount in words that would prevail.[23]
However, this
rule of interpretation finds no application in the case. The agreement was
perfectly clear that at the end of twenty one (21) days, the investment of
P150,000.00 would become P1,200,000.00.
Even if the trial court admitted the stipulation of facts, it would not
be favorable to accused-appellant.
The factual
narration in this case established a kind of Ponzi scheme.[24] This is “an investment swindle in which high profits are promised
from fictitious sources and early investors are paid off with funds raised from
later ones.” It is sometimes called a pyramid scheme because a broader base of
gullible investors must support the structure as time passes.
In the recent case
of People vs. Priscilla Balasa,[25] this Court held that a transaction
similar to the case at hand is not an investment strategy but a gullibility
scheme, which works only as long as there is an ever increasing number of new
investors joining the scheme. It is
difficult to sustain over a long period of time because the operator needs an
ever larger pool of later investors to continue paying the promised profits to
early investors. The idea behind this type of swindle is that the “con-man”
collects his money from his second or third round of investors and then
absconds before anyone else shows up to collect. Necessarily, these schemes only last weeks, or months at most,
just like what happened in this case.
The Court notes
that one of the accused-appellants, Ernesto Rodriguez, died pending appeal.
Pursuant to the doctrine established in People vs. Bayotas,[26] the death of the accused pending appeal of his
conviction extinguishes his criminal liability as well as the civil liability ex
delicto. The criminal action is extinguished inasmuch as there is no longer
a defendant to stand as the accused, the civil action instituted therein for
recovery of civil liability ex delicto is ipso facto extinguished,
grounded as it is on the criminal case. Corollarily, the claim for civil
liability survives notwithstanding the death of the accused, if the same may
also be predicated on a source of obligation other than delict.[27]
Thus, the
outcome of this appeal pertains only to the remaining accused-appellant, Martin
L. Romero. The trial court considered
the swindling involved in this case as having been committed by a syndicate[28] and sentenced the accused to life
imprisonment based on the provisions of Presidential Decree 1689, which
increased the penalty for certain forms of swindling or estafa.[29] However, the prosecution failed to
clearly establish that the corporation was a syndicate, as defined under the
law. The penalty of life imprisonment
cannot be imposed. What would be
applicable in the present case is the second paragraph of Presidential Decree
No. 1689, Section 1, which provides that:
“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.”
Article 77 of
the Revised Penal Code on complex penalties provides that “whenever the penalty
prescribed does not have one of the forms specially provided for in this
Code, the periods shall be distributed, applying by analogy the
prescribed rules,” that is, those in Articles 61 and 76.[30] Hence, where as in this case, the
penalty provided by Section 1 of Presidential Decree No. 1689 for estafa under
Articles 315 and 316 of the Code is reclusion temporal to reclusion
perpetua, the minimum period thereof is twelve (12) years and one (1) day
to sixteen (16) years of reclusion temporal; the medium period is
sixteen (16) years and one (1) day to twenty (20) years of reclusion
temporal; and the maximum period is reclusion perpetua.
In the case at
bar, no mitigating or aggravating circumstance has been alleged or proved. Applying the rules in the Revised Penal Code
for graduating penalties by degrees[31] to determine the proper period,[32] the penalty for the offense of
estafa under Article 315, 2(d) as amended by P.D. 1689 involving the amount of
P150,000.00 is the medium of the period of the complex penalty in said Section
1, that is, sixteen (16) years and one (1) day to twenty (20) years. This penalty, being that which is to be
actually imposed in accordance with the rules therefor and not merely imposable
as a general prescription under the law, shall be the maximum range of the
indeterminate sentence.[33] The minimum thereof shall be taken,
as aforesaid, from any period of the penalty next lower in degree, which is, prision
mayor.
To enable the
complainant to obtain means, diversion or amusements that will serve to
alleviate the moral sufferings undergone by him, by reason of the failure of
the accused to return his money, moral damages are imposed against
accused-appellant Martin L. Romero in the amount of twenty thousand pesos
(P20,000.00).[34] To serve as an example for the
public good, exemplary damages are awarded against him in the amount of fifteen
thousand pesos (P15,000.00).[35]
WHEREFORE, the Court hereby AFFIRMS WITH
MODIFICATION the appealed judgment. The Court hereby sentences
accused-appellant Martin Romero to suffer an indeterminate penalty of ten (10)
years and one (1) day of prision mayor, as minimum, to sixteen (16) years and
one (1) day of reclusion temporal, as maximum, to indemnify Ernesto A.
Ruiz in the amount of one hundred fifty thousand pesos (P150,000.00) with
interest thereon at six (6%) per centum per annum from September 14, 1989,
until fully paid, to pay twenty thousand pesos (P20,000.00) as moral damages and
fifteen thousand pesos (P15,000.00), as exemplary damages, and the costs.
SO ORDERED.
Davide, Jr.,
C.J.,Melo, and Kapunan ,
JJ., concur.
Ynares-Santiago,
J. no
part.
[1] Joint Judgment, dated March 25, 1993, Rollo,
pp.15-23.
[2]
Docketed as Criminal Case No. 3808.
[3] Rollo, p. 7.
[4]
Docketed as Criminal Case No. 3806.
[5]
During the arraignment of the accused the presiding judge of Branch 5, Regional Trial Court, Butuan City was Hon.
Edelwina C. Pastoral.
[6] Violation of Batas Pambansa Bilang 22.
[7]
Violation of Article 315, par. 2 (d) of the Revised Penal Code, in relation to
Presidential Decree 1689.
[8]
Joint Judgment, Rollo, pp. 92-93.
[9]
Rollo, p. 170.
[10]
People vs. Tugbang, 196 SCRA 341, 345 citing People vs. Satorre, 72 SCRA
439.
[11]
Original Records, Criminal Case. No. 3808, p. 41-42.
[12]
tsn, January 10, 1991.
[13]
tsn, August 12, 1991.
[14]
tsn, August 12, 1991, Rollo, p. 206.
[15]
Rollo, pp. 72-85.
[16] Article 315. Swindling (estafa)- Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:
1. x x x
2. By means of any of the following false pretenses or fraudulent acts executed prior to or simulatneously with the commission of the fraud:
(a) x x x
(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 RA 4885, B.P.
22 and P.D. 1689).
[17]
Jovita Sales vs. Court of Appeals, 164 SCRA 717, 721, citing the case of
People vs. Sabio, 86 SCRA 568.
[18]
37 Am Jur 2d §1, p. 19.
[19]
People vs. Priscilla Balasa, G.R. No. 106357;
G.R. Nos. 108601-02, September
3, 1998.
[20] 37 Am Jur 2d §2, p. 20.
[21]
Quirico Abela vs. Cesario C. Golez,
131 SCRA 12.
[22]
Reyes, The Revised Penal Code, Book II, p. 697, citing the explanatory
note of Senate Bill No. 413; Article 315, par. 2(d), Revised Penal Code, as
amended by Republic Act 4885; Vallarta vs. Court of Appeals, 150 SCRA
336, 343.
[23]
Section 17, Act No. 2031.
[24]
Named after Charles Ponzi who promoted the scheme in the 1920s, the original
scheme involved the issuance of bonds which offered 50% interest in 45 days or
a 100% profit if held for 90 days.; People vs. Priscilla Balasa, supra.
[25]
People vs. Priscilla Balasa, supra.
[26]
236 SCRA 239, 251.
[27]
People vs. Bayotas, supra.
[28]
A syndicate consists of five or more persons formed with the intention of carrying
out the unlawful or illegal act, transaction, enterprise or sheme, 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 funds solicited
by corporations/associations from the general publis.[Section 1, P.D. 1689].
[29]
There was a need to provide for higher penalty to prevent acts of defraudation or misappropriation of
funds solicited by
corporations/associations from the general public which 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. [Preamble, P.D.
1689]
[30]
People vs. Lian, 255 SCRA 532, on p.541.
[31]
Article 61, Revised Penal Code.
[32]
Article 64, Ibid.
[33]
People vs. Lian, supra, on p. 542.
[34]
Prudenciado vs. Alliance Transport System, Inc., 148 SCRA 440, 449.
[35]
Lopez vs. Pan American World Airways, 16 SCRA 431.