G.R. No. 178947, June 26, 2013
VIRGINIA DE LOS SANTOSDIO, AS AUTHORIZED REPRESENTATIVE OF H.S. EQUITIES, LTD., AND WESTDALE ASSETS, LTD., Petitioner, v. THE HONORABLE COURT OF APPEALS, JUDGE RAMON S. CAGUIOA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 74, REGIONAL. TRIAL COURT, OLONGAPO CITY, AND TIMOTHY J. DESMOND, Respondents.
R E S O L U T I O N
[G.R. No. 179079]
PEOPLE OF PHILIPPINES, The Petitioner, v. TIMOTHY J. DESMOND, Respondent.
D E C I S I O N
The foregoing clearly applies in the instant two (2) cases as borne out by the following facts, to with [sic]: (1) Desmond, as the Chairman and Chief Executive Office of SBMEI and in order to persuade Dio to invest, represented that he possessed the necessary influence, expertise and resources (in terms of credit and property) for the project knowing the same to be false as he never had the capital for the project as borne out by his correspondences with Dio; and (2) Dio fell for these misrepresentations and the lure of profit offered by Desmond, thereby being induced to invest the amounts of $1,150,000.00 and $1,000,000.00 to the damage and prejudice of her company.
The elements of the crimes charged were thus established in these cases, namely Dio parted with her money upon the prodding and enticement of respondent on the false pretense that he had the capacity and resources for the proposed project. In the end, Dio was not able to get her money back, thus causing her damage and prejudice. Moreover, such defraudation or misappropriation having been committed by Desmond through his company SBMEI involving funds solicited from Dio as a member of the general public in contravention of the public interest, the probable cause clearly exists to indict Desmond for the crime of Estafa under Article 315 (1)(b) and (2)(a) of the Revised Penal Code in relation to PD No. 1689.31
Criminal Case No. 516-200433
That in or about and sometime in early 2001, in Olongapo City, Philippines, and within the jurisdiction of this Honorable Court, the above- named accused, being the officer of Subic Bay Marine Exploration, Inc. (SBMEI), acting as a syndicate and by means of deceit, did then and there, wilfully, unlawfully and feloniously defraud H.S. EQUITIES LIMITED, represented in this case by Virginia S. Delos Santos-Dio in the following manner, to wit: the said accused by means of false manifestations and fraudulent representations which he made to said Virginia S. Delos Santos-Dio to the effect that he had the expertise and qualifications, as well as the resources, influence, credit and business transaction with the Subic Bay Metropolitan Authority (SBMA) and other financing institutions to ensure the viability of the Subic Bay Marine Exploration Ocean Adventure Project (SBMEOA), which he represented to be a qualified and legally existing investment enterprise with capacity to solicit investment from the general public, by submitting documents for the purpose, which representations he knew to be false and fraudulent and the supporting documents are similarly spurious and were only made in order to induce said Virginia S. Delos Santos-Dio to invest and deliver as in fact she invested and delivered a total amount of One Million One Hundred Fifty Thousand US Dollars ($1,150,000.00) to the said accused on the strength of said manifestations and representations and supporting documents, and said accused, once in possession of the said amount, misapplied, converted and misappropriated the same to his own personal use and benefit, to the damage and prejudice of H.S. Equities Limited in the amount of US $1,150,000.00 or Php57,500,000.00 Pesos, the dollar computed at the rate of Php 50.00 to [US]$1.00 which was the prevailing rate of exchange of a dollar to peso at the time of the commission of the offense.
CONTRARY TO LAW.
Criminal Case No. 515-200434
That in or about and sometime during the period from June 2002 to July 2002, in Olongapo City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there, wilfully, unlawfully and feloniously defraud Westdale Assets, Limited represented in this case by Virginia S. Delos Santos-Dio in the following manner to wit: the said accused received in trust and for administration from the said Virginia S. Delos Santos-Dio the amount of One Million US Dollars ($1,000,000.00) under the express obligation of using the same to pay the loan facility of the Subic Bay Marine Exploration, Inc. (SBMEI) with First Metro Investment Corporation and to fund the construction and development of the Miracle Beach Project but the said accused, once in possession of the said amount, with grave abuse of confidence and with intent to defraud, misapplied, misappropriated and converted the same for his own use and benefit by devoting it to a purpose or use different from that agreed upon and despite repeated demands made upon him to account for and to return the said amount, he failed and refused and still fails and refuses to do so, to the damage and prejudice of the said Westdale Assets, Limited in the amount of US $1,000,000.00 or its equivalent to FIFTY MILLION (Php 50,000,000.00) Pesos, Philippine Currency, the dollar being computed at the rate of Php50.00 to $ 1.00 which was the prevailing rate of exchange at the commission of the offense, to the damage and prejudice of the latter in the aforementioned amount.
CONTRARY TO LAW.
First, the element of misrepresentation or deceit found in par. 2 (a) Article 315 of the Revised Penal Code is absent. It must be emphasized that the promises allegedly made to the complainant by the accused that her company’s investment will significantly increase, clearly appeared in the Subic Bay Marine Exploration, Inc.’s ("SBMEI", for brevity) printed business plan dated January 12, 2001 (Annex "A", Complaint-Affidavit dated 19 April 2004). Verily, this is SBMEI’s representation or "come on" to would-be investors and not a personal assurance of the accused. The fact that accused was the company’s Chief Executive Officer and Chairman of the Board of Directors is of no moment in the absence of any evidence to show that accused personally prepared the business plan thereby making the alleged "rosy picture" his own personal enticements to the complainant. Therefore, there being a dearth of evidence pointing to the accused as author of the SBMEI’s business plan, any misrepresentation or deceit committed cannot be personally attributed to him.
Furthermore, the court cannot find any sufficient evidence that the accused personally assured the complainant about his so-called power, influence and credit with the SBMA and other financial institutions that would supposedly insure the viability and profitability of the project. Note that nowhere in the Complaint-Affidavit of the private complainant are there specific factual allegations that would show that the accused had personal business meetings with the SBMA and said financial institutions. As to how and in what manner and scope accused exercised such alleged power, influence and credit over these juridical entities remain a bare and self-serving averment in the absence of any factual detail or account.
Finally, it cannot be gainsaid [sic] that accused was the one who personally valuated the marine mammals contributed by JV China Incorporated to the Subic Bay Marine Exploration, Inc. as capital amounting to US$3.724 Million. Evidence clearly point to an independent valuation done by a third party namely Beijing Landa Aquarium that valued the marine mammals under the Buy-Out Agreement dated September 9, 1998. Needless to state, the onus is on complainant to controvert this valuation. Again, however, no adequate proof was adduced along this line.
Second, the element of personal misappropriation by the accused under par. 1(b) Article 315 of the Revised Penal Code is likewise not present. While it may be conceded that there was money utilized to pay salaries of expatriates and staff as well as the cost of utilities amounting to US$72,272.00 complainant failed to show that said money was taken from her companies’ investments in SBMEI. It must be pointed out that other than complainant’s bare allegation, there was no document presented categorically stating that the investment of complainant’s companies were earmark for a particular payment or project. Hence, when the investment entered SBMEI’s financial coffers, the same presumably were co-mingled with other monies of the corporation.
Moreover and more revealing, is the fact that again there was no showing that it was accused who personally caused the payment of these expenses allegedly in violation of the objective of the investment. It must be noted that SBMEI is a corporation and not a single proprietorship. Being a corporation, expenses paid of such a kind as utilities and salaries are not authorized personally and solely by the President nor the Chief Executive Officer nor even by the Chairman of the Board for that matter. These are corporate acts that are passed through board resolutions. Hence, these corporate acts can in no way be considered personal acts of the accused. Yet, he was singled out among all 5 members of the Board of Directors who presumably, in the ordinary course of business, approved by resolution the payments of such utilities and salaries. Consequently, there is again insufficiency of evidence that the accused alone caused the payment of these salaries and utilities for the sole purpose of pocketing the
money thereby using the same for personal gain. 40
WHEREFORE, foregoing considered, the subject motion for judicial determination of probable cause is favorably granted. There being no probable cause, the cases against the accused must be dismissed as they are hereby DISMISSED. The motions to issue warrant of arrest and Hold Departure Order as well as the prayer for provisional remedy are necessarily DENIED.
SO ORDERED. 41
In the instant case, the alleged false representations by Desmond which allegedly induced private complainants H.S. Equities, Ltd. ("H.S. Equities") and Dio, to part with their money are not supported by the facts on record. First, the alleged false representation employed by Desmond with respect to his expertise and qualifications in the form of influence, credit and business transactions with the Subic Bay Metropolitan Authority (SBMA) and financial institutions and such resources to enable private complainants to double its investment with SBMEI has not been shown to be false.
Indeed, nowhere in the documentary evidence presented by private complainants that allegedly contained the above false representations does it show that it was private respondent himself who made such representation. Notably, the SBMEI’s Business Plan dated January 12, 2001 to which private complainants anchor such allegation does not indicate that the representations made therein came personally from Desmond. In addition, neither does it appear from such document that the statements therein were used as a form of a personal assurance coming from Desmond that private complainants would indeed double the amount they had invested with SBMEI. If at all, we agree with the trial court that statements made in the said business plan were merely a form of enticement to encourage would-be investors from [sic] investing in such kind of business undertaking.
Moreover, we likewise agree with the trial court that no factual allegations were made by private complainants as to how such false pretense of power and influence was made upon them by Desmond and which convinced private complainants to part with their money. It bears stressing that the allegations of false pretense of power and influence in a case of estafa are mere conclusions of law which must be substantiated at the very least by circumstances which would show that the person accused of committing estafa did indeed commit acts of false representations. As the records show, there was no misrepresentation on the part of Desmond that he is the Chairman and Chief Executive Officer of SBMEI which is a corporation engaged in the business of developing marine parks. Significantly, the records likewise show that SBMEI did indeed build and develop a marine park in Subic Bay (Ocean Adventure) for the purposes stated in its business plan and had entered into a long-term lease agreement with SBMA. Documentary evidence in the form of the Report of Independent Auditors to SBMEI shows the amount of investment the corporation had invested in the said business undertaking. For instance, the corporation had invested the amount of P106,788,219.00 in buildings and equipment alone. It has also assets consisting of marine mammals which are necessary for the operation of the marine park. In this respect, we cannot subscribe to private complainants’ contention that there was misrepresentation on the part of private respondent that he had overvalued the worth of the marine mammals it had purchased from Beijing Landa Aquarium Co., Ltd. of the Republic of China. This claim of private complainants of the deceitful acts employed by Desmond in overpricing the value of the marine animals for US$3.724 Million when in fact the sea animals were only valued for one U.S. dollar was not corroborated by the evidence on hand.
x x x x
In the same manner, the facts in the case at bar that would allegedly constitute a criminal charge of estafa under par. 1(b) are wanting. Be it noted that under the said paragraph, estafa with unfaithfulness or abuse of confidence through misappropriation or conversion of the money, goods or any other personal property must be received in trust, on commission, for administration, or under any other obligation which involves the duty to make delivery thereof or to return the same. It is not amiss to note that a perusal of private complainants’ Complaint-Affidavit shows that subject money in the amount of US$1,000,000.00 to be used for the Miracle Beach Project was placed in a special account with Equitable-PCI Bank. As the records show, the said funds were placed by Dio under the control of Fatima Paglicawan, an employee of Westdale, such that, no money can be withdrawn from the special account without the signature of the said employee, Desmond and a certain John Corcoran. Therefore, at such time, it cannot be said that the funds were received for administration or already under the juridical possession of Desmond. Meanwhile, we would like to emphasize that to constitute conversion, it presupposes that the thing has been devoted to a purpose or use different from that agreed upon. Verily, a facial examination of the Journal Voucher and Check Voucher pertaining to the withdrawals made on such account clearly shows that the disbursements were not only authorized by Paglicawan but likewise indicated that the purpose for such withdrawals was to cover payments for BIR taxes and the salaries of local employees and expatriates.
To repeat, these withdrawals as well as the purpose thereof were known to Paglicawan when [sic] she authorized the disbursements. Paglicawan, who was designated by private complainant Dio to control the release of the said funds is presumed to have acted under the latter’s authority. Such miscommunication between Dio and Paglicawan with respect to the purpose of the funds does not make out a case of estafa there being no abuse of confidence or conversion to speak of taking into account that the said funds were released under the presumed authority of private complainants through Paglicawan, and which were indeed used for the purpose for which it was withdrawn. That being the case, there can be no damage or prejudice to Westdale and Dio as there was no disturbance in the property rights of Westdale and Dio in the said funds since the same were used for the purpose for which it was disbursed.
Then again, we agree with the trial court that there is no sufficient evidence adduced to support the criminal charges of estafa against Desmond. As pointed out by the trial court, while private respondent is the Chairman and Chief Executive Officer of SBMEI, there is no showing that he had personally and solely authorized the application of the above funds for the payment of expenses not directly connected with the Miracle Beach Project. Nor does it appear that as Chairman and Chief Executive Officer, Desmond has been appointed to execute, on his own, such corporate acts.45 (Citations omitted)
We reiterate that preliminary investigation should be distinguished as to whether it is an investigation for the determination of a sufficient ground for the filing of the information or it is an investigation for the determination of a probable cause for the issuance of a warrant of arrest. The first kind of preliminary investigation is executive in nature. It is part of the prosecution's job. The second kind of preliminary investigation which is more properly called preliminary examination is judicial in nature and is lodged with the judge.
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 if the accused had already been arrested, pursuant to a warrant issued by the judge who conducted preliminary investigation or when the complaint or information was filed pursuant to Section 7 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 and underscoring supplied)
1Rollo (G.R. No. 178947), pp. 54-87; rollo (G.R. No. 179079), pp. 9-33.cralawlibrary
2Rollo (G.R. No. 178947), pp. 96-110; rollo (G.R. No. 179079), pp. 36-50. Penned by Associate Justice Rodrigo V. Cosico, with Associate Justices Edgardo F. Sundiam and Celia C. Librea-Leagogo, concurring.cralawlibrary
3Rollo (G.R. No. 178947), pp. 112-117; rollo (G.R. No. 179079), pp. 51-56.cralawlibrary
4 HS Equities and Westdale are both foreign companies organized and registered under the laws of the
British Virgin Islands. Rollo (G.R. No. 178947), p. 57.cralawlibrary
5Rollo (G.R. No. 179079), pp. 87-90.cralawlibrary
6 Id. at 91-93.cralawlibrary
7 Id. at 81, 87-90.cralawlibrary
8 See Complaint-Affidavit in I.S. No. 04-M-992, id. at 79-84.cralawlibrary
9Rollo (G.R. No. 178947), p. 141; rollo (G.R. No. 179079), p. 86.cralawlibrary
10Rollo (G.R. No. 178947), pp. 145-147.cralawlibrary
11 Id. at 148-167.cralawlibrary
12 Id. at 156.cralawlibrary
13 See Minutes of Annual Stockholders Meeting and Minutes of Organizational Meeting of the Board of
Directors, id. at 172 & 175.cralawlibrary
14 Id. at 176-177.cralawlibrary
15 Id. at 178-179.cralawlibrary
16Rollo (G.R. No. 178947), p. 180; rollo (G.R. No. 179079), p. 114.cralawlibrary
17Rollo (G.R. No. 178947), p. 220; rollo (G.R. No. 179079), p. 111.cralawlibrary
18Rollo (G.R. No. 178947), p. 184.cralawlibrary
19Rollo (G.R. No. 179079), p. 125.cralawlibrary
20 See Complaint-Affidavit (I.S. No. 04-M-993), id. at 109-113.cralawlibrary
21Rollo (G. R. No. 179079), pp. 115-118.cralawlibrary
22 Id. at 112 & 120.cralawlibrary
23Rollo (G.R. No. 178947), p. 216; rollo (G.R. No. 179079), p. 83.cralawlibrary
24Rollo (G.R. No. 178947), pp. 212-217 & 218-222; rollo (G.R. No. 179079), pp. 79-84 & 109-113.cralawlibrary
25 ART. 315. Swindling (estafa). - Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished
x x x x
2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:cralavvonlinelawlibrary
(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.
x x x x
26 Act No. 3815, as amended.cralawlibrary
27 ART. 315. Swindling (estafa). - Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished
x x x x
1. With unfaithfulness or abuse of confidence, namely:cralavvonlinelawlibrary
x x x x
(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;chanroblesvirtualawlibrary
x x x x
28 See Counter-Affidavit, rollo (G.R. No. 178947), pp. 223-244.cralawlibrary
29 See Reply-Affidavit, id. at 245-250.cralawlibrary
30Rollo (G.R. No. 178947), pp. 251-254; rollo (G.R. No. 179079), pp. 135-138. Penned by City
Prosecutor Prudencio B. Jalandoni.cralawlibrary
31 Id. at 253-254.cralawlibrary
32Rollo (G.R. No. 178947), pp. 255-256 & 257-258; rollo (G.R. No. 179079), pp. 139-140 & 141-142.cralawlibrary
33Rollo (G.R. No. 178947), pp. 255-256; rollo (G.R. No. 179079), pp. 139-140.cralawlibrary
34Rollo (G.R. No. 178947), pp. 257-258; rollo (G.R. No. 179079), pp. 141-142.cralawlibrary
35Rollo (G.R. No. 178947), pp. 259-271; rollo (G.R. No. 179079), pp. 143-155.cralawlibrary
36Rollo (G.R. No. 178947), pp. 274-276; rollo (G.R. No. 179079), pp. 156-158.cralawlibrary
37Rollo (G.R. No. 178947), pp. 277-284; rollo (G.R. No. 179079), pp. 159-167.cralawlibrary
38Rollo (G.R. No. 178947), pp. 286-291; rollo (G.R. No. 179079), pp. 168-173.cralawlibrary
39Rollo (G.R. No. 178947), pp. 307-309; rollo (G.R. No. 179079), pp. 190-192. Penned by Executive Judge Ramon S. Caguioa.cralawlibrary
40Rollo (G.R. No. 178947), pp. 307-308; rollo (G.R. No. 179079), pp. 190-191.cralawlibrary
41Rollo (G.R. No. 178947), p. 309; rollo (G.R. No. 179079), p. 192.cralawlibrary
42Rollo (G.R. No. 178947), pp. 320-343; rollo (G.R. No. 179079), pp. 194-217.cralawlibrary
43Rollo (G.R. No. 178947), pp. 350-393.cralawlibrary
44Rollo (G.R. No. 178947), pp. 96-110; rollo (G.R. No. 179079), pp. 36-50.cralawlibrary
45Rollo (G.R. No. 178947), pp. 105-109; rollo (G.R. No. 179079), pp. 45-49.cralawlibrary
46Rollo (G.R. No. 178947), pp. 112-117; rollo (G.R. No. 179079), pp. 51-56.cralawlibrary
47People v. Castillo, G.R. No. 171188, June 19, 2009, 590 SCRA 95, 105-106.cralawlibrary
48 Id. at 106.cralawlibrary
49Leviste v. Alameda, G.R. No. 182677, August 3, 2010, 626 SCRA 575, 609.cralawlibrary
50 G.R. No. 168811, November 28, 2007, 539 SCRA 147.cralawlibrary
51 Id. at 157, citing People v. Inting, G.R. No. 88919, July 25, 1990, 187 SCRA 788, 794. See also AAA v. Carbonell, G.R. No. 171465, 8 June 2007, 524 SCRA 496.cralawlibrary
52 1987 PHILIPPINE CONSTITUTION, Article III, Section 2.cralawlibrary
53 Formerly Section 6(a) of Rule 112. The deletion of Section 5 concerning the power of MTC judges to conduct preliminary investigation through the issuance of Administrative Matter No. 05-8-26-SC dated August 30, 2005 caused a renumbering of the subsequent sections beginning with Section 6.cralawlibrary
54 See also Ong v. Genio, G.R. No. 182336, December 23, 2009, 609 SCRA 188, 196-197.cralawlibrary
55 SEC. 5(a), Rule 112, Revised Rules of Criminal Procedure, as amended by A. M. No. 05-8-26-SC.cralawlibrary
56 RIANO, W.B., Criminal Procedure (The Bar Lecture Series), 2011 Ed., p. 190.cralawlibrary
57 The elements of estafa through false pretenses under Article 315, paragraph 2(a) of the RPC are:cralavvonlinelawlibrary
(1) that the accused made false pretenses or fraudulent representations as to his power, influence, qualifications, property, credit, agency, business or imaginary transactions; (2) that the false pretenses or fraudulent representations were made prior to or simultaneous with the commission of the fraud; (3) that the false pretenses or fraudulent representations constitute the very cause which induced the offended party to part with his money or property; (4) that as a result thereof, the offended party suffered damage. See Ansaldo v. People, G.R. No. 159381, March 26, 2010, 616 SCRA 556, 564.cralawlibrary
58 The elements of estafa with abuse of confidence through misappropriation or conversion under Article 315 1(b) of the RPC are: (1) that money, goods or other personal property be 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 demand made by the offended party on the offender. See Burgundy Realty Corporation v. Reyes, G.R. No. 181021, December 10, 2012, 687 SCRA 524, 532-533.cralawlibrary
59People v. CA, G.R. No. 126005, January 21, 1999, 301 SCRA 475, 488.