G.R. No.

199294 July 31, 2013

RALPH LITO W. LOPEZ, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

CARPIO, J.:

The Case

We review1 the ruling2 of the Court of Appeals affirming petitioner's conviction for
estafa.

The Facts

Petitioner Ralph Lito W. Lopez (petitioner) was President and Chief Executive Officer
(CEO) of Primelink Properties and Development Corporation (Primelink), a real estate
developer. On 4 July 1996, Primelink entered into a Joint Venture Agreement
(Agreement) with Pamana Island Resort Hotel and Marina Club, Inc. (Pamana) to
develop a ₱60 million exclusive residential resort with marina (Subic Island Residential
Marina and Yacht Club [Club]), on a 15,000 square-meter portion of an island in
Subic, Zambales (Club site).3 Under the Agreement, Pamana, the Club site owner,
undertook to keep the title over the island where the Club site is located free of
encumbrances. Primelink, for its part, will provide capital and handle marketing
concerns, among others.4 The Club was slated for completion in July 1998. While
promoting the Club locally5 and abroad,6 Primelink commenced selling membership
shares as stipulated in the Agreement.

On 10 October 1996, private complainant Alfredo Sy (Sy), through one of Primelink’s

sales officers, Joy Ragonjan (Ragonjan), placed a reservation to purchase one Club
share for ₱835,999.94 (payable in installments), executed the reservation agreement,
and paid the reservation fee of ₱209,000. Sy fully paid the balance by 19 April 1998.

In March 2002, Sy filed a criminal complaint against petitioner and Ragonjan in the
Pasig City Prosecutor’s Office for estafa. The complaint was grounded on the fact that
the Club remained undeveloped and Primelink failed to return Sy’s payment despite
demands to do so. Sy also discovered that Primelink had no license from the Securities
and Exchange Commission (SEC) to sell securities.

The Pasig City Prosecutor found probable cause to indict petitioner and Ragonjan for
violation of Article 315, paragraph 2(a) of the Revised Penal Code, as amended (Code)7
and filed the Information8 with the Regional Trial Court of Pasig City (trial court).9
Ragonjan remained at large, leaving petitioner to face trial by himself.

During trial, Sy testified that Ragonjan assured him that Primelink was licensed to sell
Club shares.10 On cross-examination. Sy admitted dealing exclusively with Ragonjan
for his reservation and purchase of the Club share.11
The defense presented Atty. Jaime Santiago (Santiago), Primelink comptroller and
drafter of the Agreement, to testify on the circumstances leading to the sale of Club
shares and petitioner’s role in Primelink’s decision to do so.

Petitioner also took the stand, testifying that the Club was a legitimate project of
Primelink and Pamana but whose completion was rendered impossible by Pamana’s
breach of the Agreement, by, among others, mortgaging the Club site to Wesmont
Bank. As a result, Primelink sued Pamana in the Regional Trial Court of Makati
(Branch 59) for damages for breach of the Agreement.12

Petitioner admitted that Primelink sold unregistered shares. He invoked the Agreement
as basis for the undertaking, adding that such is also an "industry practice."13 On
Ragonjan’s dealings with Sy, petitioner stated that Primelink’s sales agents were
instructed to be "honest and candid" with prospective buyers on the status of the
project and on Primelink’s lack of license to sell Club shares.14

The Ruling of the Trial Court

The trial court found petitioner guilty as charged, sentenced him to four years, two
months and one day of prision correccional to twenty years of reclusion temporal and
to indemnify Sy the amount of ₱835,999.94.15 In the trial court’s evaluation –

the evidence on record indubitably shows that the elements of the subject offense are
present in the case. Accused fraudulently offered to sell to private complainant a share
over Subic Island Club, while concealing from the former the material fact that x x x
accused has yet to secure the requisite licenses and registration with the SEC to sell
shares of the project and from the DENR and HLURB to develop and construct the
same. Relying on the accused’s misrepresentations, private complainant paid him the
total amount of Php835,999.94, as consideration but he was never able to gain
possession of a Certificate of Membership given accused’s continued failure to proceed
with the project. x x x.

xxxx

The act of deliberately misrepresenting to the private complainant that Primelink had
the necessary authority or license to pre-sell shares in Subic Island Club, and the act
of collecting money from private complainant only to renege on the promise to turn
over said share and for failure to return the money collected from the private
complainant, despite several demands, are clearly acts attributable to herein accused
Lopez and amount to estafa punishable under Article 315, paragraph 2(a), of the
Revised Penal Code.16

Petitioner appealed to the Court of Appeals.

The Ruling of the Court of Appeals

The Court of Appeals affirmed the trial court’s ruling in toto. According to the Court of
Appeals –
the RTC correctly found that the Accused-Appellant is guilty beyond reasonable doubt
of Estafa as all its elements are present. The Accused-Appellant made false
representations, through his marketing officer, Ragonjan, by making Sy believe that
the necessary license to sell or permit from the government agencies has been
obtained by their company, Primelink, to sell membership shares in the Club. Sy,
highly trusting of the misrepresentations of the Accused-Appellant and Ragonjan,
willingly parted with his money and bought a membership share in the same. x x x.

xxxx

Were it not for the Accused-Appellant’s fraudulent machinations and false

representations, Sy would not have parted with his money and would not be ripped-off
of his hard-earned money in the amount of ₱835,999.94. x x x. It is also peculiar that
no refund was made to the latter from the start of the trial until this time.17

Hence, this appeal under Rule 45.

Petitioner seeks a re-appraisal of the Court of Appeals’ factual findings, pointing to

facts allegedly overlooked which, if considered, would alter the case’s disposition. He
also assails the Court of Appeals’ appreciation of conspiracy between him and
Ragonjan as speculative, grounded on mere assumptions.18

The Office of the Solicitor General (OSG) prays for the denial of the petition. As a
threshold objection, the OSG contests the propriety of reviewing questions of fact,
considering that the office of a Rule 45 petition is limited to the review of questions of
law only. On the merits, the OSG prays for affirmance of the Court of Appeals’ ruling.

The Issue

The question is whether the Court of Appeals erred in affirming petitioner’s conviction
for estafa under Article 315, paragraph 2(a) of the Code.

The Court’s Ruling

We hold that the Court of Appeals committed no error in affirming petitioner’s

conviction for estafa.

Review of Questions of Fact Improper

We first resolve the threshold issue of the propriety of passing upon questions of fact
in this review. The narrow ambit of review prescribed under Section 1 of Rule 45,19
limiting the scope of our inquiry to questions of law only enforces our ordinary
certiorari jurisdiction efficiently. By sparing the Court from the task of parsing
through factual questions, we are able to swiftly dispose of such appeals. This rule, of
course, admits of exceptions applicable to those rare petitions whose peculiar factual
milieu justifies relaxation of the Rules such as when the Court of Appeals made
erroneous inferences, arrived at a conclusion based on speculation or conjectures, or
overlooked undisputed facts which, if duly considered, lead to a different
conclusion.20 As shown in the discussion below, however, none of these grounds
obtain here. We thus proceed with our review without disturbing the Court of Appeals’
factual findings.

Elements of Estafa Under Article 315, paragraph 2(a)

The Code defines estafa under Article 315, paragraph 2(a), the offense for which
petitioner and Ragonjan stand accused, as follows:

Swindling (estafa). — Any person who shall defraud another 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 fictitious name, or falsely pretending to possess power, influence,

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

This provision lays on the prosecution the burden of proving beyond reasonable doubt
each of the following constitutive elements:

(1) The accused used fictitious name or false pretense that he possesses (a) power, (b)
influence, (c) qualifications, (d) property, (e) credit, (f) agency, (g) business or (h)
imaginary transaction, or other similar deceits;

(2) The accused used such deceitful means prior to or simultaneous with the
execution of the fraud;

(3) The offended party relied on such deceitful means to part with his money or
property; and

(4) The offended party suffered damage.

Elements of Use of, and Reliance on, False Pretenses

by Petitioner and Sy, Respectively

The Information filed against petitioner and Ragonjan alleges that they conspired to
use two false pretenses on Sy to defraud him on 10 October 1996, namely, that "[1]
Subic Island Club would be developed by Primelink and that [2] the latter was duly
authorized to sell membership certificates." We find merit in petitioner’s contention
that the prosecution failed to prove the element of use of false pretense regarding the
first allegation. Nevertheless, we find the evidence sufficient to prove the use of false
pretense on the second allegation.

Allegation on the Club’s Development not "False"

It is impossible to determine from the records the category of false pretense the
prosecution wished the first allegation to belong. Undoubtedly, it concerns Primelink’s
capability to develop the Club. Use of false pretense of capability is, however, not
penalized under Section 2(a) of Article 315. The category approximating the allegation
in question is false pretense of power (to develop the Club). We proceed with our
analysis using such category as frame of reference.21

Without need of passing upon the question whether Ragonjan’s representations to Sy

on 10 October 1996 bind petitioner, we resolve the threshold question whether her
alleged statement that the Club will be finished by July 1998 was in the first place
false. The Court of Appeals grounded its affirmative answer on the fact that the Club
remained unfinished even after the lapse of its target completion date in July 1998.
Section 2(a) of Article 315, however, requires that the false pretense be used "prior to
or simultaneous with the execution of the fraud," that is, on 10 October 1996. The
crux of this issue then, is whether before or at that time, Primelink possessed no
power (capability) to develop the Club, rendering Ragonjan’s statement false.

A review of the records compels a negative answer. When Sy reserved to buy a Club
share on 10 October 1996, barely three months had passed after Primelink, a duly
incorporated real estate developer, signed the Agreement with Pamana, another real
estate developer, to develop the Club. Four months after Sy bought a Club share,
Primelink promoted the Club here and abroad and continued selling Club shares.22
All the while, Primelink released funds to finance the project’s initial expenses, a
portion of which Pamana was ordered to repay by a Makati court after the project was
aborted.23

These facts negate the conclusion that on or before 10 October 1996, petitioner and
Ragonjan knew that the Club was a bogus project. At that time, the Project was on-
course as far as Primelink was concerned. It was only after 10 October 1996 that
Primelink encountered problems with Pamana, rendering impossible the Club’s
completion.24

False Pretense on Primelink’s Qualification to

Pre-sell Club Shares Proven Beyond Reasonable Doubt

There is no mistaking that the claim made by Ragonjan to Sy that Primelink was
authorized to sell membership shares is false - Primelink held no license to sell
securities at the time Sy bought a Club share on 10 October 1996 or afterwards. Such
alleged false representation, which Sy relied upon to buy the share, belongs to the
category of false pretense of qualification (to sell securities) under Section 2(a) of
Article 315.

Petitioner seeks exculpation for the use of such false pretense by raising the following
arguments: (1) Ragonjan’s representation to Sy does not bind him for lack of proof that
he conspired with Ragonjan;25 (2) the contract Sy entered into with Primelink was not
a sale of a Club share but a reservation to buy one;26 (3) even if the contract involved
the sale of a Club share, petitioner is not liable because (a) Ragonjan’s representation
amounted to a warranty which, not having been reduced in writing as required in the
reservation agreement, does not bind Primelink,27 and (b) at the time Sy bought the
Club share, there was no law requiring Primelink to obtain a license from the SEC to
sell Club shares.28

These contentions lack merit.

First. Petitioner was no bystander in Primelink’s sale of unregistered shares. Santiago,
Primelink’s comptroller and drafter of the Agreement, testified as witness for petitioner
that after Primelink’s Board of Directors approved the sale of the unregistered Club
shares, petitioner "encouraged and instructed" the sale of "many shares,"29 no doubt
to raise as much capital for the Club as possible. This was the context of Sy’s
purchase of a Club share from Primelink.

Petitioner attempts to distance himself from the transaction between Ragonjan and Sy
by claiming that Ragonjan violated standing company policy to be "candid" to buyers
by disclosing Primelink’s lack of license. We find this unpersuasive. In the first place,
petitioner failed to present independent proof of such company policy, putting in
serious doubt the veracity of his claim. Secondly, it is improbable for Ragonjan to take
it upon herself to fabricate the serious claim that Primelink was a licensed securities
dealer in violation of company policy, in the process risking her employment. It is
more consistent with logic and common sense to hold that Ragonjan followed company
policy in giving assurances to Sy that Primelink was licensed to sell Club shares. After
all, Primelink stood to attract more investments if it presented itself to the public as a
licensed securities dealer. Indeed, Sy was emphatic in his claim that he bought a Club
share for P0.8 million because he was "convinced that there was a license to sell."30

Petitioner’s direct hand in the unlicensed selling of Club shares, coupled with
Ragonjan’s position in Primelink’s organizational and sales structure, suffices to prove
petitioner’s liability under the allegation of use of false pretense of qualification. With
Santiago’s testimony on petitioner’s central role in the sale of unregistered Primelink
shares, further proof of conspiracy between petitioner and Ragonjan is superfluous.

Second. There is no merit in the argument that Ragonjan’s assurance to Sy of

Primelink’s status as a licensed securities dealer amounts to a warranty, and thus
required, under the warranty clause of the reservation agreement, to be reduced in
writing. The warranty clause, which provides –

Any representation or warranty made by the agent who handled this sale not
embodied herein shall not bind the company, unless reduced in writing and confirmed
by the President or the Chairman of the Board.31

refers to warranties on the terms of the share sold, not to the capacity of Primelink to
sell Club shares. Indeed, the fact that "the seller has the right to sell the thing at the
time when ownership is to pass," is implied in sales,32 dispensing with the need to
expressly state such in the contract. Further, the clause operates to shield Primelink
from claims of violation of unwritten warranties, not its officers from criminal liability
for making fraudulent representation on Primelink’s authority to sell Club shares.

Third. It is futile for petitioner to recast, at this late stage of the proceedings, the
nature of the contract between Primelink and Sy as a "reservation agreement" and not
a contract of sale. At no time during the trial did the defense present any evidence to
support this theory, having consistently characterized the contract as a "pre-selling" of
Club share.33 Indeed, the very warranty clause in the reservation agreement
petitioner invokes to exculpate himself refers to the transaction as "sale."
Fourth. Contrary to petitioner’s submission, there was a law effective at the time Sy
bought the Club share on 10 October 1996, requiring sellers of securities such as the
non-proprietary membership certificate sold by Primelink to Sy34 to register with the
SEC the sale of such security and obtain a permit to sell. Relevant portions of Batas
Pambansa Blg. 178 (BP 178), which took effect on 22 November 1982 and superseded
by Republic Act No. 8799 only on 8 August 2000, provide:

Sec. 4. Requirement of registration of securities. — (a) No securities, x x x, shall be

sold or offered for sale or distribution to the public within the Philippines unless such
securities shall have been registered and permitted to be sold as hereinafter provided.

xxxx

Sec. 8. Procedure for registration. — (a) All securities required to be registered under
subsection (a) of Section four of this Act shall be registered through the filing by the
issuer or by any dealer or underwriter interested in the sale thereof, in the office of the
Commission, of a sworn registration statement with respect to such securities x x x.

xxxx

If after the completion of the aforesaid publication, the Commission finds that the
registration statement together with all the other papers and documents attached
thereto, is on its face complete and that the requirements and conditions for the
protection of the investors have been complied with, x x x, it shall as soon as feasible
enter an order making the registration effective, and issue to the registrant a permit
reciting that such person, its brokers or agents, are entitled to offer the securities
named in said certificate, with such terms and conditions as it may impose in the
public interest and for the protection of investors. (Emphasis supplied)

The registration requirement under BP 178 applies to all sales of securities "including
every contract of sale or disposition of a security,"35 regardless of the stage of
development of the project on which the securities are based. No amount of "industry
practice" works to amend these provisions on pre-sale registration.1âwphi1

Nor can petitioner rely on G.G. Sportswear Mfg. Corp. v. World Class Properties,
Inc.36 to evade criminal liability. That case involved an action for rescission and
refund filed before the Housing and Land Use Regulatory Board (HLURB) by a
condominium buyer against the developer for breach contract. The HLURB Arbiter
rescinded the contract for lack of license of the developer to sell condominium units.
The HLURB Board of Commissioners modified the Arbiter’s ruling by denying
rescission, holding, among others, that the developer’s acquisition of license before the
filing of the complaint mooted the prayer for rescission. On appeal, this Court
affirmed. Here, Primelink never acquired a license to sell from the SEC, unlike in G.G.
Sportswear. Thus, G.G. Sportswear is clearly not applicable to the present case.

On the Element of Damage Sustained by Sy

Petitioner contends that Sy sustained damage only for ₱209,000, the amount he paid
upon signing the reservation agreement on 10 October 1996 as alleged in the
Information, and not ₱835,999.94, the price of the Club share. Alternatively, petitioner
argues that he neither received nor profited from the payments made by Sy.
Petitioner's contention would hold water if Sy did not buy a Club share. Sy, however,
not only paid the reservation fee, which constituted five percent ( 5%) of the share
price,37 he also paid the balance in installments, evidenced by receipts the
prosecution presented during trial.

Lastly, unlike estafa under paragraph 1 (b) of Article 315 of the Code, estafa under
paragraph 2( a) of that provision does not require as an element of the crime proof that
the accused misappropriated or converted the swindled money or property. All that is
required is proof of pecuniary damage sustained by the complainant arising from his
reliance on the fraudulent representation. The prosecution in this case discharged its
evidentiary burden by presenting the receipts of the installment payments made by Sy
on the purchase price for the Club share.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 31 January 2011
and the Resolution dated 9 November 2011 of the Court of Appeals.

SO ORDERED.

JURISDICTIONAL EFFECT OF RA NO. 10951

MARLO CAMPANILLA·SUNDAY, DECEMBER 16, 2018·READING TIME: 5

MINUTESPublic

The Revised Penal Code fixed the value of the property malversed or stolen, or the
amount of fraud, on which the penalties for malversation, robbery by using force upon
thing, theft and estafa based, taking into consideration the minimum wage rate on
January 1, 1932, the date of the effectivity of the Code. One of the amendatory effects
of RA No. 10951 to the Code is to adjust such value of the property or amount of fraud
on the basis of the minimum wage rate prevailing in 2017 when this law was enacted.
As a consequence, the penalties for these crimes were drastically reduced. For
example, under the original version of Article 309 of the Revised Penal Code, penalty
for theft the value of which exceeds P12,000 is prision mayor its minimum and
medium periods. However, RA No. 10951 has adjusted such amount from P12,000 to
P1.2 million.

Because of the reduction of the penalties for certain crimes, the jurisdiction of the
courts is modified. Certain crimes, which were previously within the jurisdiction of the
Regional Trial Court, are now jurisdictionally cognizable by the inferior court.

Under Article 217 of the Revised Penal Code as amended by RA No. 1060, if the
amount involved in the malversation exceeds P200, the case is cognizable with the
Regional Trial Court; if the amount does not exceed P200, the case belongs to the
inferior court. RA No. 10951 has amended this provision by increasing this amount
from P200 to P40,000. However, this rule is subject to the jurisdiction of the
Sandiganbayan over crimes committed by public officer with the salary grade of 27
and other public officers specified in RA No. 10660.
Under the original version of Articles 308 and 315 of the Revised Penal Code, the line
that separates the jurisdiction of the Regional Trial Court and inferior court for theft
and estafa is P12,000. Under RA No. 10951, that line was increased to P1.2 million for
theft and to 2.4 million for estafa. As a consequence, RA No. 10951 has substantially
expanded the jurisdiction of inferior courts over the crimes of theft and estafa. The
Regional Trial Court will only have jurisdiction for theft where the value of the property
exceeds P1.2 million and estafa where the amount of fraud exceeds P2.4 million.

However, Regional Trial Court despite the passage of RA No. 10951 retains jurisdiction
over qualified theft unless the value of the property stolen is less than P500 and estafa
through issuance of bouncing check.

Under the original version of Article 299 of the Revised Penal Code, the inferior court
had jurisdiction over robbery in inhabited house, public building or edifice devoted to
religious worship if the amount of the property stolen is less than P2.50 and the
offender is not armed. However, RA No. 10951 has increased the amount to P50,000.
But despite the passage of RA No. 10952, the inferior court retains its jurisdiction over
robbery in uninhabited house or private building under Article 302 of the Code.

The amendatory effects of RA No. 10951 are either favorable to the accused (e.g.
reduction of penalties for theft) or prejudicial to the accused (e.g. increasing the
amount of fine for unjust vexation or alarm and scandal). If a provision of RA No.
10951 is favorable to the accused, it shall be given a retroactive effect. Section 100 of
RA No. 10951 provides: “This Act shall have retroactive effect to the extent that it is
favorable to the accused or person serving sentence by final judgment.” If a provision
of RA No. 10951 is prejudicial to the accused, it shall be given a prospective effect.
Article 29 of the Revised Penal Code provides: “No felony shall be punishable by any
penalty not prescribed by law prior to its commission.”

However, the expansion of the jurisdiction of the inferior court as an incidental effect
of the reduction of penalties for certain crimes under RA No. 10951 is neither
favorable nor prejudicial to the accused since their rights under the Constitution and
law shall be accorded regardless of whether the cases involving such crimes are within
the jurisdiction of the Regional Trial Court or inferior court. Since the jurisdictional
modification is neither favorable nor prejudicial to the accused, the rules on
retroactivity under Section 100 of RA No. 10951 and on prospectivity under Article 21
of the Revised Penal Code are not applicable.

The rule on imposition of penalty should not be confused with the rule on
determination of jurisdiction. If what is involved is imposition of penalty, the provision
of RA No. 10951 shall be given a retroactive effect if it is favorable to the accused; or
prospective effect if it is prejudicial. If what is involved is the determination of
jurisdiction, the applicable rules are Section 101 of RA No. 10951 and jurisprudential
rule on time of institution of criminal action.

Section 101 of RA No. 10951 provides: “For cases pending before the courts upon the
effectivity of this Act where trial has already started, the courts hearing such cases
shall not lose jurisdiction over the same by virtue of this Act.” Under OCA Circular No.
19-2018 dated January 31, 2018, the term “trial” in Section 101 of RA No. 951 which
in part states, “where trial has already started, the Courts having such cases shall not
lose jurisdiction over the same” is deemed to include arraignment.

Thus, where the accused has already been arraigned as of September 16, 2017 (date
of effectivity of RA No. 10951), the Regional Trial Court shall not lose jurisdiction even
though the penalty for the crime charged under Revised Penal Code as amended by RA
No. 10951 is now not more than 6 years of imprisonment. On the other hand, where
the accused has not been arraigned as of September 16, 2017, the Regional Trial
Court shall lose jurisdiction if the penalty for the crime charged under the Code as
amended by RA no. 10951 is reduced to not more than 6 years of imprisonment.

However, if the crime was committed prior to September 16, 2017 but the information
was filed after such date, Section 101 of RA No. 10951 is not applicable since the case
is not yet pending upon the effectivity of this law. Hence, the jurisprudential rule that
that the jurisdiction of the court to hear and decide a case is conferred by the law in
force at the time of the institution of the action (People vs. Benipayo, G.R. No. 154473,
April 24, 2009) applies. In sum, if the penalty for the crime charged under RA No.
10951 is not more than 6 years of imprisonment at the time of the institution of
criminal action, the inferior court shall have jurisdiction over the same.