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FIRST DIVISION

VICENTE S. CENZON, G.R. No. 164337


Petitioner,

Present:
- versus -
PANGANIBAN, C.J.
Chairperson,
HON. SALVADOR ABAD YNARES-SANTIAGO,
SANTOS as Acting Presiding AUSTRIA-MARTINEZ,
Judge, RTC of Makati City, CALLEJO, SR., and
Branch 143, HON. ASSISTANT CHICO-NAZARIO, JJ.
CITY PROSECUTOR ANDRES
MARCOS in his capacity as
Public Prosecutor of the City
Prosecutors Office of Makati Promulgated:
City and MARGARITA C. SIA,
Respondents. June 27, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari with prayer for Temporary


Restraining Order and/or Preliminary Mandatory Injunction, assailing the 26
February 2004 Decision[1] and the 30 June 2004 Resolution[2] of the Court of
Appeals in CA-G.R. SP No. 72570, which affirmed the 15 February 2002[3] and 17
June 2002[4] Orders of the Regional Trial Court (RTC), Branch 143, Makati City,
in Criminal Case No. 01-2709-10, allowing the amendment of the informations
therein from NO BAIL RECOMMENDED to BAIL SET AT P60,000.00.

The facts, as culled from the evidence on record, follow:


Petitioner Vicente S. Cenzon is a member of the Board of Directors of Honig
Sugar Trading Corp. (Honig). On the other hand, private respondent Margarita C.
Sia is the president of South Pacific Sugar Corp. (South Pacific).

On 23 February 2000, petitioner Cenzon filed with the Makati City


Prosecution Office, four complaint-affidavits[5] against private respondent Sia for
violation of Batas Pambansa Blg. 22 and Estafa under Article 315, par. 2(d) of the
Revised Penal Code, alleging that the checks issued by South Pacific, through
private respondent Sia, were dishonored upon due presentment for having been the
subject of a stop payment order (SPO), and for having been drawn against
insufficient funds (DAIF). Despite demands made upon private respondent Sia and
South Pacific to pay the amounts represented by the face value of the subject
checks, the same remained unheeded.

The particulars of the subject checks are, to wit:

CHECK NO. DATE AMOUNT


HRR 0005306682 31 January 1999 P15,840,000.00
HRR 0005306773 24 May 1999 P42,625,000.00
HRR 0005306775 24 May 1999 P 9,180,000.00
HRR 0005306774 24 May 1999 P91,776,970.00

On 31 August 2000, the Makati City Prosecution Office issued a


Resolution[6] recommending the dismissal of the complaint for Estafa, and the
filing of informations for four counts of violation of Batas Pambansa Blg. 22, and
further recommending bail of P30,000.00 for each count.

On appeal by petitioner Cenzon to the Department of Justice


(DOJ), Resolution[7] dated 31 August 2001 was issued, reversing and setting aside
the Resolution dated 31 August 2000, and directing the Makati City Prosecution
Office to file two informations for Estafa under Article 315, par. 2(d)[8] of the
Revised Penal Code, as amended by Presidential Decree No. 818,[9]against private
respondent Sia. In accordance therewith, Makati City Prosecutor Edgardo Hirang
filed on 10 December 2001 with the RTC, two informations[10] against private
respondent Sia for violations of Article 315, par. 2(d) of the Revised Penal Code,
as amended by Presidential Decree No. 818. The two informations involved Check
No. HRR 0005306682 and Check No. HRR 0005306774, which covered the
amounts of P15,840,000.00 and P91,776,970.00, respectively. The City Prosecutor
recommended NO BAIL. The cases were docketed as Criminal Case Nos. 01-2709
and 2710, and subsequently consolidated as Criminal Case No. 01-2709-2710.

On 11 December 2001, the RTC issued an Order[11] directing the issuance of


a warrant of arrest against private respondent Sia. On 29 January 2002, the RTC
suspended the proceedings a quo for the reason that private respondent Sia had a
pending Motion for Reconsideration with the DOJ Secretary, questioning the
latters finding of probable cause. Subsequently, in the hearing of 15 February
2002, the public prosecutor moved for the amendment of the informations from
NO BAIL RECOMMENDED to BAIL SET AT P60,000.00 for each count of
Estafa. The amendment was sought on the strength of DOJ Department Circular
No. 74, issued on 6 November 2001, which specified the amount of bail to be
recommended, in cases of Estafa under Article 315, par. 2(d), as amended by
Presidential Decree No. 818. The RTC granted the public prosecutors Motion, as
contained in the assailed Order[12]of 15 February 2002.

Private prosecutors Motion for Reconsideration of the 15 February


2002 Order was denied by the RTC, in the Order[13] dated 17 June
2002. Aggrieved, petitioner Cenzon filed with the Court of Appeals, a Petition
for Certiorari, imputing to the RTC, grave abuse of discretion amounting to lack or
excess of jurisdiction in authorizing the amendment of the informations to allow
private respondent Sia to post bail.

In the assailed Decision of 26 February 2004, the Court of Appeals affirmed


the RTC, ratiocinating that the offense by which private respondent Sia is charged
is not punishable by reclusion perpetua, and as such, she is entitled to bail. The
appellate court, relying on the pronouncements in People v.
[14] [15]
Hernando and People v. Panganiban, ratiocinated in the following manner:

Based on the foregoing, it is clear that all persons are entitled to bail, as a
matter of right, provided that one is not charged with an offense punishable by
death, reclusion perpetua, or life imprisonment. In the case at bench, We agree
with the private respondent, and concurred in by no less than the Solicitor
General, that the offense by which she is being charged is not punishable
by reclusion perpetuaand so she is entitled to bail. Thus, the respondent judge is
not guilty of grave abuse of discretion in allowing the amendment of the
informations to allow accused-respondent Sia to post bail.

This was clearly illustrated in the leading case of People vs. Hernando and
reiterated in People vs. Panganiban, where it was clarified that reclusion
perpetua is not the prescribed penalty for the offense as used in PD No. 818, to
wit:
xxx xxx xxx

Hence, if the amount of the fraud exceeds twenty-two


thousand pesos, the penalty of reclusion temporal is imposed in its
maximum period, adding one year for each additional ten thousand
(P10,000.00) pesos but the total penalty shall not exceed thirty (30)
years, which shall be termed reclusion perpetua. As used
herein, RECLUSION PERPETUA IS NOT THE PRESCRIBED
PENALTY FOR THE OFFENSE. It merely describes the penalty
actually imposed on account of the amount of the fraud involved,
which exceeds twenty two thousand (P22,000.00) pesos.
(Emphasis Ours.)
Precisely, this is the reason why DOJ Circular No. 74 came into effect, to
guide all prosecutors in recommending the amount of bail to be fixed. Public
Prosecutor Marcos thus correctly moved for the amendment of the informations,
and the respondent judge judiciously allowed it to conform with the DOJ circular
brought about by the new jurisprudence on the matter. Clearly, the ruling in
People vs. Reyes cited by the petitioner is deemed superseded.

Moreover, as cited by the petitioner himself, courts are advised that they
must not only be aware but should consider the Bail Bond Guide due to its
significance in the administration of criminal justice. Settled also is the rule that,
while not controlling, official opinions of the justice secretary are persuasive.[16]

In the same vein, petitioner Cenzons Motion for Reconsideration thereon


was denied by the appellate court for lack of merit, in the Resolution dated 30 June
2004.

Elevating the matter before this Court via the instant Petition for Review,
petitioner Cenzon submits the following grounds for its allowance, viz:

I
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A
WAY NOT IN ACCORD WITH THE ESTABLISHED CONSTITUTIONAL
MANDATE THAT NO DOCTRINE OR PRINCIPLE OF LAW LAID DOWN
BY THE COURT IN A DECISION RENDERED EN BANC OR IN DIVISION
MAY BE MODIFIED OR REVERSED EXCEPT BY THE COURT
SITTING EN BANC.

II

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A


WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE BY SOLELY
RELYING ON THE CASES OF PEOPLE V. HERNANDO AND PEOPLE
V. PANGANIBAN WHICH INVOLVE FACTS DIFFERENT FROM THE
PRESENT CASE.[17]

Petitioner Cenzon endeavors to build his case by invoking People v.


Reyes,[18] and the 2000 Bail Bond Guide of the DOJ.According to petitioner
Cenzon, the 2000 Bail Bond Guide of the DOJ recommends NO BAIL for Estafa
under Article 315, par. 2(d) of the Revised Penal Code, as amended by Presidential
Decree No. 818, if the amount of the fraud is P32,000.00 or over. It is petitioner
Cenzons theory that NO BAIL is recommended in such cases, because the penalty
prescribed therein is reclusion perpetua.[19] Petitioner Cenzon posits that the 2000
Bail Bond Guide of the DOJ was made pursuant to Section 13,[20] Article III of the
1987 Constitution, which provides that crimes punishable by reclusion perpetua to
death, when evidence of guilt is strong, are not bailable.

Further, petitioner Cenzon asseverates that in Reyes, the Court En


Banc declared that Presidential Decree No. 818, which took effect as early as 1975,
provided for the penalty of reclusion perpetua where bouncing checks of the
requisite amount are involved.[21] Proceeding therefrom, it is petitioner Cenzons
contention that, in the assailed Decision of 26 February 2004, the Court of Appeals
erroneously relied on DOJ Department Circular No. 74,[22] which disregards the
rule that Estafa under Article 315, par. 2(d) of the Revised Penal Code, as amended
by Presidential Decree No. 818, where the amount of the fraud is P32,000.00 or
above is non-bailable.

Finally, petitioner Cenzon maintains that the ruling in Reyes which was
rendered En Banc cannot be declared superseded by the subsequent cases
of Hernando and Panganiban, as the latter cases were rendered by divisions of this
Court. Citing Section 4(3),[23] Article VIII of the Constitution, petitioner Cenzon
argues that Hernando and Panganiban cannot overturn Reyes because no doctrine
or principle of law laid down by the Court in a decision rendered En Banc or in
division may be modified or reversed except by the Court sitting En Banc.

The issue presented for our consideration is, whether private respondent Sia,
who is charged with Estafa under Article 315, par. 2(d)[24] of the Revised Penal
Code, as amended by Presidential Decree No. 818, for having issued bouncing
checks in the amounts of P91,776,970.00 and P15,840,000.00, may be granted bail,
as a matter of right, in accordance with DOJ Department Circular No. 74, dated 6
November 2001.
At the outset, attention must be called to Section 4, Rule 114 of the Revised
Rules of Criminal Procedure, which provides:

SEC. 4. Bail, a matter of right; exception. All persons in custody shall be


admitted to bail as a matter of right, with sufficient sureties, or released on
recognizance as prescribed by law or this Rule (a) before or after conviction by
the Metropolitan Trial Court, Municipal Trial Court, Municipal Trial Court in
Cities, or Municipal Circuit Trial Court, and (b) before conviction by the Regional
Trial Court of an offense not punishable by death, reclusion perpetua, or life
imprisonment.

Thus, it must be asked, is private respondent Sia charged with an offense


punishable by reclusion perpetua?

The issue that confronts us is not novel. Perforce, in Panganiban, we settled


that the term, reclusion perpetua, as utilized in Presidential Decree No. 818,
merely describes the penalty imposed on account of the amount of the fraud
involved. The unequivocal import in Presidential Decree No. 818[25] is that, if the
amount of the fraud exceeds twenty-two thousand pesos (P22,000.00), the penalty
of reclusion temporal is imposed in its maximum period, adding one year for each
additional ten thousand (P10,000.00) pesos, but the total penalty shall not exceed
thirty (30) years, which shall be termed reclusion perpetua. Taking our legal
bearings from the Panganiban case, we stress that the use of the term reclusion
perpetua in Presidential Decree No. 818 is merely to describethe penalty imposed,
but not the prescribed penalty thereof.

To reiterate, we quote hereunder, our pronouncement in Panganiban:

Finally, some clarifications on the imposable penalty. The trial court


convicted accused-appellant to reclusion perpetua, following the amendment to
Article 315, par. 2(d) of the Revised Penal Code by Presidential Decree No. 818,
which increased the penalty for estafa committed by means of bouncing checks.

Presidential Decree No. 818 provides:

SECTION 1. Any person who shall defraud another by means of


false pretenses or fraudulent acts as defined in paragraph 2(d) of the
Revised Penal Code, as amended by Republic Act No. 4885, shall be
punished by:

1st. The penalty of reclusion temporal 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 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 reclusion perpetua;

xxxx

As used in Presidential Decree No. 818, reclusion perpetua is not the


prescribed penalty for the offense, but merely describes the penalty actually
imposed on account of the amount of the fraud involved, which
exceeds P22,000.00.[26] (Underscoring supplied.)

The Court, in Hernando was just as succinct in pronouncing that the


term reclusion perpetua as used in Presidential Decree No. 818, merely describes
the penalty actually imposed on account of the amount of the fraud involved,
which exceeds twenty two thousand (P22,000.00) pesos.[27] As used in Presidential
Decree No. 818, reclusion perpetua is not the prescribed penalty for the offense.[28]

Moreover, the Court, thru an En Banc Resolution, dated 26 February 2002,


in Jovencio Lim and Teresita Lim v. People,[29]pronounced that bail is allowed for
the crime of Estafa under Article 315, par. 2(d), as amended by Presidential Decree
No. 818.[30]Petitioners therein were charged with the offense of Estafa under
Article 315, par. 2(d) of the Revised Penal Code, as amended by Presidential
Decree No. 818, for having issued two postdated checks involving the amounts
of P365,750.00 and P429,000.00. We allowed aforesaid petitioners to post bail in
accordance with the provisions of DOJ Circular No. 74, dated 6 November 2001.

In Lim, we said that the intendment and provision of DOJ Circular No. 74
was to benefit the accused. Indeed, it is a principle of statutory construction that
penal laws are liberally construed in favor of the accused and strictly against the
State.[31] In like manner, we must also apply DOJ Circular No. 74 to herein private
respondent Sia.

We find inapplicable the case of Reyes. In Reyes, the question was whether
therein accused who was convicted, inter alia, of Estafa under Article 315, par.
2(d) of the Revised Penal Code and sentenced therefore to serve twenty-two years
of reclusion perpetua, with its accessory penalties and liability for indemnification,
may be allowed to remain on bail during the pendency of her appeal from said
conviction.[32] Comparatively, what is before us is an accused charged with Estafa
under paragraph 2(d), Article 316 of the Revised Penal Code. Clearly, Reyes is not
on all fours with the case at bar. Instead, it is the later case of Lim which finds
application.

Our Resolution in Lim, dated 26 February 2002, and issued by the Court En
Banc settled the issue anent the allowance of bail in cases involving Estafa under
paragraph 2(d), Article 316 of the Revised Penal Code. As earlier stated,
in Lim, we allowed the accused therein to post bail, and we upheld DOJ
Department Circular No. 74, citing Hernando. In the more recent case of Poblete v.
Court of Appeals,[33] the Court underscored once more with definitive
pronouncement the application of DOJ Department Circular No. 74 in cases
involving the crime of Estafa under Art. 315, par. 2(d) of the Revised Penal Code,
as amended by Presidential Decree No. 818. Stare decisis et non quieta movera.

We said in Poblete, thus:

It was definitively resolved when the Court adopted Department of Justice (DOJ)
Circular No. 74 ordaining that bail be allowed for the crime of Estafa under Art.
315, par. 2(d), as amended by P.D. 818, thru an En Banc Resolution dated
February 26, 2002 in the case of Jovencio Lim and Teresita Lim v. People of
the Philippines, et al., G.R. No. 149276. The salient portion of the Resolution
reads:

"(3) Where the amount of fraud is P32,000.00 or over in


which the imposable penalty is reclusion temporal to reclusion
perpetua, bail shall be based on reclusion temporal maximum,
pursuant to Par. 2(a) of the 2000 Bail Bond Guide, multiplied
by P2,000.00 plus an additional of P2,000.00 for every P10,000.00
in excess of P22,000.00; Provided, however, that the total amount
of bail shall not exceed P60,000.00."[34]

We are similarly not impressed with petitioner Cenzons reliance on the 2000
Bail Bond Guide of the DOJ. Evidently, Department Circular No. 74 of the DOJ
amended the 2000 Bail Bond Guide, the salient provisions thereof, reads thus:

WHEREAS, under the 2000 Bail Bond Guide, no bail is recommended for
estafa under Art. 315 2(d), RPC, as amended by PD 818, as well as for Qualified
Theft when the amount of fraud or the value of the property involved is
P32,000.00 or over;
WHEREAS, such policy has already been overtaken and rendered
untenable by the new jurisprudence, particularly the ruling in People vs.
Hernando, 317 SCRA 621 (1999);

WHEREFORE, in estafa under Art. 315 2(d), as amended by PD 818, and


Qualified Theft, the bail to be recommended shall be governed by the following
rules:

A. FOR ESTAFA (ART. 315, 2(d), RPC, as amended by PD 818:

1) Where the amount of fraud involved does not exceed P22,000.00, bail
shall be computed based on the applicable provisions of the 2000 Bail
Bond Guide.

2) Where the amount of fraud involved is more than P22,000.00 but less
than P32,000.00, bail shall be based on the maximum period of the
imposable penalty of reclusion temporal multiplied by P2,000.00.

3) Where the amount of fraud is P32,000.00 or over in which the


imposable penalty is reclusion temporal to reclusion perpetua, bail
shall be based on reclusion temporal maximum, pursuant to Par. 2(a)
of the 2000 Bail Bond Guide, multiplied by P2,000.00, plus an
additional of P2,000.00 for every P10,000.00 in excess of P22,000.00;
Provided, however, that the total amount of bail shall not
exceed P60,000.00. (Underscoring supplied.)

From the foregoing, if the amount of fraud is P122,000.00 or over, as in the


case at bar, the amount of bail is P60,000.00.

WHEREFORE, the petition is hereby DENIED. The Decision dated 26 February


2004 and Resolution dated 30 June 2004 of the Court of Appeals in CA-G.R. SP
No. 72570, which affirmed the Orders dated 15 February 2002 and 17 June 2002
of the Regional Trial Court, Branch 143, Makati City, allowing the amendment of
the informations in Crim. Case No. 01-2709-10, from NO BAIL
RECOMMENDED to BAIL SET AT P60,000.00 are AFFIRMED. Costs against
petitioner.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice
WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ


Associate Justice Associate Justice

ROMEO J. CALLEJO, SR.


Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that


the conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice
[1]
Penned by Associate Justice Delilah Vidallon-Magtolis with Associate Justices Jose L. Sabio, Jr. and Hakim S.
Abdulwahid, concurring; Rollo, pp. 48-53.
[2]
Id. at 55.
[3]
Penned by Acting Presiding Judge Salvador S. Abad Santos; Id. at 504.
[4]
Id. at 513-514.
[5]
Id. at 67-89.
[6]
Id. at 336-341.
[7]
Records, Vol. I, pp. 8-10.
[8]
Article 315, par. 2(d) reads:

ART. 315. Swindling (estafa) x x x

xxxx

(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.
[9]
Entitled, Amending Article 315 of the Revised Penal Code by Increasing the Penalties for Estafa
Committed by Means of Bouncing Checks.
[10]
The first information averred, thus:

That on or about the 27th day of November, 1998, in the City of Makati, Metro Manila, Philippines
and within the jurisdiction of this Honorable Court, the abovenamed accused, being then the authorized
signatory of South Pacific Sugar Corporation, with intent to defraud, by means of deceit and false
representation committed prior to or simultaneously with the fraudulent act, did then and there wilfully
(sic), unlawfully and feloniously make out and issue United Coconut Planters Bank Check No. HRR
0005306682 postdated January 31, 1999 in the amount of P15,840,000.00 in exchange for 11,000 fifty[-
]kilogram bags of sugar respondent received from the complainant, Honig Sugar Corporation represented
by Vicente S. Cenzon knowing that at the time of its issue she has insufficient funds in or credit with the
drawee bank to cover the full amount of the check such that when said check was presented for payment to
the drawee bank, the same was dishonored for the reason PAYMENT STOPPED DAUD and the accused,
despite notice to make good the said check or pay the amount thereof within three (3) days from receipt of
notice of dishonor of such check failed and refused to do so, to the damage and prejudice of the said
complainant Honig Sugar Corporation in the aforementioned amount of P15,840,000.00. (Records, Vol. I,
p. 4.)

The second information reads:

That on or about the 16th day of November, 1998, in the City of Makati, Metro Manila, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, being then the authorized
signatory of South Pacific Sugar Corporation with intent to defraud, by means of deceit and false
representation committed prior to or simultaneously with the fraudulent act, did then and there wilfully
(sic), unlawfully and feloniously make out and issue United Coconut Planters Bank Check No. HRR
0005306774 postdated May 24, 1999 in the amount of P91,776,970.00 in exchange for 91,776 fifty[-
]kilogram bags of sugar respondent received from the complainant, Honig Sugar Corporation represented
by Vicente S. Cenzon knowing that at the time of its issue she has insufficient funds in or credit with the
drawee bank to cover the full amount of the check such that when said check was presented for payment to
the drawee bank, the same was dishonored for the reason PAYMENT STOPPED-DAIF and the accused,
despite notice to make good the said check or pay the amount thereof within three (3) days from receipt of
notice of dishonor of such check failed and refused to do so, to the damage and prejudice of the said
complainant Honig Sugar Corporation in the aforementioned amount of P91,776,970.00. (Id. at 2.)
[11]
Records, Vol. II, p. 389.
[12]
Id. at 606.
[13]
Id. at 683-683A.
[14]
375 Phil. 1078 (1999).
[15]
390 Phil. 673 (2000).
[16]
Rollo, pp. 737-738.
[17]
Id. at 646-647.
[18]
G.R. Nos. 101127-31, 7 August 1992, 212 SCRA 402.
[19]
Rollo, pp. 24-25.
[20]
Section 13, Art. III of the 1987 Constitution reads:

Sec. 13. All persons, except those charged with offenses punishable by reclusion perpetua when
evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to bail shall not be impaired even when the privilege of
the writ of habeas corpus is suspended. Excessive bail shall not be required.
[21]
Rollo, pp. 25-26.
[22]
See CA rollo, pp. 480-496.
[23]
Section 4(3), Article VIII of the 1987 Constitution provides:

Sec. 3. Cases or matters heard by a division shall be decided or resolved with the concurrence of a
majority of the Members who actually took part in the deliberations on the issues in the case and voted
thereon, and in no case, without the concurrence of at least three of such Members. When the required
number is not obtained, the case shall be decided en banc: Provided, that no doctrine or principle of law
laid down by the court in a decision rendered en banc or in division may be modified or reversed except by
the court sitting en banc.
[24]
Article 315, paragraph 2(d) reads:

ART. 315. Swindling (estafa)

(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.
[25]
Sec. 1 of Presidential Decree No. 818 reads:

Section 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 reclusion temporal 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 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 reclusion perpetua;

2nd. The penalty of prision mayor in its maximum period, if the amount of the fraud is over 6,000
pesos but does not exceed 12,000 pesos;

3rd. The penalty of prision mayor in its medium period, if such amount is over 200 pesos but does
not exceed 6,000 pesos; and,
4th. By prision mayor in its maximum period, if such amount does not exceed 200 pesos.

[26]
People v. Panganiban, supra note 15 at 689-690.
[27]
People v. Hernando, supra note 14 at 1093.
[28]
Id.
[29]
G.R. No. 149276, 26 February 2002.
[30]
See also Poblete v. Court of Appeals, G.R. No. 128859, 29 June 2004, 433 SCRA 39, 42.
[31]
See People v. Garcia, 85 Phil. 651, 656 (1950), citing STATUTORY CONSTRUCTION, Crawford, pp. 460-
462.
[32]
People v. Reyes, supra note 18 at 404.
[33]
Supra note 30.
[34]
Id. at 42.
SECOND DIVISION

RAFAEL H. GALVEZ and G.R. No. 187919


KATHERINE L. GUY,

Petitioners,

-versus-

HON. COURT OF APPEALS and


ASIA UNITED BANK,

Respondents.

x------------------------x

ASIA UNITED BANK,


G.R. No. 187979
Petitioner,

-versus-

GILBERT G. GUY, PHILIP LEUNG,


KATHERINE L. GUY, RAFAEL H. GALVEZ
and EUGENIO H. GALVEZ, JR.,

Respondents.

x--------------------------x

GILBERT G. GUY, PHILIP LEUNG and


EUGENIO H. GALVEZ, JR.,

Petitioners, G.R. No. 188030


Present:

CARPIO, J.,

-versus- Chairperson,

BRION,

PEREZ,

SERENO, and

ASIA UNITED BANK, REYES, JJ.

Respondent.

Promulgated:

April 25, 2012

x ----------------------------------------------------------------------------------------x

DECISION

PEREZ, J.:

THE FACTS
In 1999, Radio Marine Network (Smartnet) Inc. (RMSI) claiming to do
business under the name Smartnet Philippines[1]and/or Smartnet Philippines, Inc.
(SPI),[2] applied for an Omnibus Credit Line for various credit facilities with Asia
United Bank (AUB). To induce AUB to extend the Omnibus Credit Line, RMSI,
through its directors and officers, presented its Articles of Incorporation with its
400-peso million capitalization and its congressional telecom franchise. RMSI was
represented by the following officers and directors occupying the following
positions:

Gilbert Guy - Exec. V-Pres./Director

Philip Leung - Managing Director

Katherine Guy - Treasurer

Rafael Galvez - Executive Officer

Eugenio Galvez, Jr. - Chief Financial Officer/Comptroller

Satisfied with the credit worthiness of RMSI, AUB granted it a P250 million
Omnibus Credit Line, under the name of Smartnet Philippines, RMSIs Division. On
1 February 2000, the credit line was increased to P452 million pesos after a third-
party real estate mortgage by Goodland Company, Inc.,[3] an affiliate of Guy Group
of Companies, in favor of Smartnet Philippines,[4]was offered to the
bank. Simultaneous to the increase of the Omibus Credit Line, RMSI submitted a
proof of authority to open the Omnibus Credit Line and peso and dollar accounts
in the name of Smartnet Philippines, Inc., which Gilbert Guy, et al. represented as
a division of RMSI,[5] as evidenced by the letterhead used in its formal
correspondences with the bank and the financial audit made by SGV & Co., an
independent accounting firm. Attached to this authority was the Amended
Articles of Incorporation of RMSI, doing business under the name of Smartnet
Philippines, and the Secretarys Certificate of SPI authorizing its directors, Gilbert
Guy and Philip Leung to transact with AUB.[6] Prior to this major transaction,
however, and, unknown to AUB, while RMSI was doing business under the name
of Smartnet Philippines, and that there was a division under the name Smartnet
Philippines, Gilbert Guy, et al. formed a subsidiary corporation, the SPI with a
paid-up capital of only P62,500.00.

Believing that SPI is the same as Smartnet Philippines - the division of RMSI
- AUB granted to it, among others, Irrevocable Letter of Credit No. 990361 in the
total sum of $29,300.00 in favor of Rohde & Schwarz Support Centre Asia Ptd.
Ltd., which is the subject of these consolidated petitions. To cover the liability of
this Irrevocable Letter of Credit, Gilbert Guy executed Promissory Note No.
010445 in behalf of SPI in favor of AUB. This promissory note was renewed twice,
once, in the name of SPI (Promissory Note No. 011686), and last, in the name of
Smartnet Philippines under Promissory Note No. 136131, bolstering AUBs belief
that RMSIs directors and officers consistently treated this letter of credit, among
others, as obligations of RMSI.

When RMSIs obligations remained unpaid, AUB sent letters demanding


payments. RMSI denied liability contending that the transaction was incurred
solely by SPI, a corporation which belongs to the Guy Group of Companies, but
which has a separate and distinct personality from RMSI. RMSI further claimed
that while Smartnet Philippines is an RMSI division, SPI, is a subsidiary of RMSI,
and hence, is a separate entity.

Aggrieved, AUB filed a case of syndicated estafa under Article 315 (2) (a) of
the Revised Penal Code in relation to Section 1 of Presidential Decree (PD) No.
1689 against the interlocking directors of RMSI and SPI, namely, Gilbert G. Guy,
Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr., before
the Office of the City Prosecutor of Pasig City.

AUB alleged that the directors of RMSI deceived it into believing that SPI
was a division of RMSI, only to insist on its separate juridical personality later on
to escape from its liabilities with AUB. AUB contended that had it not been for the
fraudulent scheme employed by Gilbert Guy, et al., AUB would not have parted
with its money, which, including the controversy subject of this petition,
amounted to hundreds of millions of pesos.
In a Resolution dated 3 April 2006,[7] the Prosecutor found probable cause
to indict Gilbert G. Guy, et al. for estafa but dismissed the charge of violation of
PD No. 1689 against the same for insufficiency of evidence, thus:
WHEREFORE, it is recommended that respondents be charged for ESTAFA under
Article 315, par. 2(a) of the Revised Penal Code, and the attached information be filed
with the Regional Trial Court in Pasig City, with a recommended bail of P40,000.00 for
each respondent.

It is further recommended that the charge of violation of P.D. 1689 against the
said respondents be dismissed for insufficiency of evidence.[8]

Accordingly, an Information dated 3 April 2006[9] was filed against Gilbert


Guy, et al. with the Regional Trial Court of Pasig City.
Both parties, i.e., the AUB and Gilbert Guy, et al., filed their respective
Petitions for Review with the Department of Justice (DOJ) assailing the 3 April
2006 Resolution of the Office of the City Prosecutor of Pasig City.
In a Resolution dated 15 August 2006,[10] the DOJ reversed the City
Prosecutors Resolution and ordered the dismissal of the estafa charges against
Gilbert Guy, et al. for insufficiency of evidence.

The AUBs Motion for Reconsideration was denied, constraining it to assail


the DOJ Resolution before the Court of Appeals (CA).

The CA partially granted AUBs petition in a Decision dated 27 June 2008,


thus:

WHEREFORE, the instant petition is GRANTED, finding probable cause against


private respondents for the crime of ESTAFAunder Article 315, par 2 (a) of the Revised
Penal Code. The assailed Resolution dated August 15, 2006 of the Department of Justice
is REVERSED AND SET ASIDE, subject to our ruling that the private respondents are not
liable under P.D. 1689. The April 3, 2006 Resolution of Assistant City Prosecutor Paudac
is hereby REINSTATED.[11]
Aggrieved, Gilbert Guy, Philip Leung and Eugenio H. Galvez Jr. (in G.R. No.
188030) and separately, Rafael Galvez and Katherine Guy (in G.R. No. 187919)
filed the present petitions before this Court assailing the CA Decision which
reinstated the City Prosecutors Resolution indicting them of the crime of
estafa. The AUB also filed its own petition before us, docketed as G.R. No.
187979, assailing the Court of Appeals Decision for dismissing the charge in
relation to Section 1 of PD No. 1689.

Hence, these consolidated petitions.

Gilbert Guy, et al. argue that this case is but a case for collection of sum of
money, and, hence, civil in nature and that no fraud or deceit was present at the
onset of the transaction which gave rise to this controversy, an element
indispensable for estafa to prosper.[12]

AUB, on the other, insists that this controversy is within the scope of PD No.
1689, otherwise known as syndicated estafa. It contends that Guy, et al., induced
AUB to grant SPIs letter of credit to AUBs damage and prejudice by misleading
AUB into believing that SPI is one and the same entity as Smartnet Philippines
which AUB granted an Omnibus Credit Transaction. After receiving and profiting
from the proceeds of the aforesaid letter of credit, Gilbert Guy, et al. denied and
avoided liability therefrom by declaring that the obligation should have been
booked under SPI as RMSI never contracted, nor authorized the same. It is on this
premise that AUB accuses Gilbert Guy, et al. to have committed the crime
of estafa under Article 315 (2) (a) of the Revised Penal Code in relation to PD No.
1689.

At issue, therefore, is whether or not there is probable cause to prosecute


Gilbert Guy, et al. for the crime of syndicated estafaon the basis of fraudulent acts
or fraudulent means employed to deceive AUB into releasing the proceeds of
Irrevocable Letter of Credit No. 990361 in favor of SPI.
Our Ruling

This controversy could have been just a simple case for collection of sum of
money had it not been for the sophisticated fraudulent scheme which Gilbert
Guy, et al. employed in inducing AUB to part with its money.
Records show that on 17 February 1995, Radio Marine Network, Inc. (Radio
Marine) amended its corporate name to what it stands today Radio Marine
Network (Smartnet), Inc. This was a month after organizing its subsidiary
corporation the Smartnet Philippines, Inc. with a capital of only P62,500.00.[13] A
year earlier, Gilbert Guy, et al., established Smartnet Philippines as a division of
Radio Marine under which RMSI operated its business.

It was, however, only on 26 March 1998, when the Securities and Exchange
Commission approved the amended corporate name, and only in October 1999
did RMSI register Smartnet Philippines as its business name with the Department
of Trade and Industry.[14]

It is in this milieu that RMSI transacted business with AUB under the name
Smartnet Philippines and/or SPI.

Article 315 (2) (a) of the Revised Penal Code provides:

Art. 315. Swindling (estafa) any person who shall defraud another by any of the
means mentioned herein below x x x :

xxxx
2. By means of any of the following false pretenses or fraudulent acts executed
prior to or simultaneous 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. x x x.

The elements of estafa by means of deceit are the following:

a. That there must be a false pretense, fraudulent act or fraudulent means;

b. That such false pretense, fraudulent act or fraudulent means must be made or
executed prior to or simultaneously with the commission of the fraud;

c. That the offended party must have relied on the false pretense, fraudulent act, or
fraudulent means, that is, he was induced to part with his money or property
because of the false pretense, fraudulent act, or fraudulent means;

d. That as a result thereof, the offended party suffered damage.[15]

First, Gilbert Guy, Philip Leung, Katherine Guy, Rafael Galvez and Eugene
Galvez, Jr., interlocking directors of RMSI and SPI, represented to AUB in their
transactions that Smartnet Philippines and SPI were one and the same entity.
While Eugene Galvez, Jr. was not a director of SPI, he actively dealt with AUB in
his capacity as RMSIs Chief Financial Officer/Comptroller by falsely representing
that SPI and RMSI were the same entity. Gilbert Guy, Philip Leung, Katherine Guy,
Rafael Galvez, and Eugene Galvez, Jr. used the business names Smartnet
Philippines, RMSI, and SPI interchangeably and without any distinction. They
successfully did this by using the confusing similarity of RMSIs business name, i.e.,
Smartnet Philippines its division, and, Smartnet Philippines, Inc. the subsidiary
corporation. Further, they were able to hide the identity of SPI, by having almost
the same directors as that of RMSI.In order to let it appear that SPI is the same as
that of Smartnet Philippines, they submitted in their application documents of
RMSI, including its Amended Articles of Incorporation,[16] third-party real estate
mortgage of Goodland Company[17] in favor of Smartnet Philippines, and audited
annual financial statement of SGV & Co.[18] Gilbert Guy, et al. also used RMSI
letterhead in their official communications with the bank and the contents of
these official communications[19] conclusively pointed to RMSI as the one which
transacted with the bank.

These circumstances are all indicia of deceit. 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.[20]

Second, the intent to deceive AUB was manifest from the start. Gilbert
Guy et al. laid down first all the necessary materials they need for this deception
before defrauding the bank by first establishing Smartnet Philippines as a division
of Radio Marine under which Radio Marine Network Inc. operated its
business.[21] Then it organized a subsidiary corporation, the SPI, with a capital of
only P62,000.00.[22] Later, it changed the corporate name of Radio Marine
Network Inc. into RMSI.[23]
Undoubtedly, deceit here was conceived in relation to Gilbert Guy, et
al.s transaction with AUB. There was a plan, documented in corporations papers,
that led to the defraudation of the bank. The circumstances of the directors and
officers acts in inserting in Radio Marine the name of Smartnet; the creation of its
division Smartnet Philippines; and its registration as business name as Smartnet
Philippines with the Department of Trade and Industry, together with the
incorporation of its subsidiary, the SPI, are indicia of a pre-conceived scheme to
create this elaborate fraud, victimizing a banking institution, which perhaps, is the
first of a kind in Philippine business.
We emphasize that fraud in its general sense, is deemed to comprise
anything calculated to deceive, including all acts, omissions, and concealment
involving a breach of legal duty 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.[24] 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.[25]

As early as 1903, in U.S. v. Mendezona,[26] we held that an accused may be


convicted for estafa if the deceit of false pretense is committed prior to or
simultaneous with fraud and is the efficient cause or primary consideration which
induced the offended party to part with his money or property.

Third, AUB would not have granted the Irrevocable Letter of Credit No.
990361, among others, had it known that SPI which had only P62,500.00 paid-up
capital and no assets, is a separate entity and not the division or business name of
RMSI. Gilbert Guy, et al. however, contends that the transaction subject in this
controversy is a letter of credit and not a loan, hence, SPIs capital does not
matter.[27] This was also the contention of the DOJ in reversing the Resolution of
the City Prosecutors Office of Pasig. The DOJ contended that:

It is also noted that the subject transaction, one of the several series of transactions
between complainant AUB and SPI, is not a loan transaction. It is a letter of credit
transaction intended to facilitate the importation of goods by SPI. The allegation as to
the lack of capitalization of SPI is therefore immaterial and irrelevant since it is a letter
of credit transaction. The seller gets paid only if it delivers the documents of title over
the goods to the bank which issued the letter of credit, while the buyer/importer
acquires title to the goods once it reimburses the issuing bank. The transaction secures
the obligation of the buyer/importer to the issuing bank. [28]

It is true that ordinarily, in a letter of credit transaction, the bank merely


substitutes its own promise to pay for the promise to pay of one of its customers,
who in turn promises to pay the bank the amount of funds mentioned in the
letters of credit plus credit or commitments fees mutually agreed upon. Once the
issuing bank shall have paid the beneficiary after the latters compliance with the
terms of the letter of credit, the issuing bank is entitled to reimbursement for the
amount it paid under the letter of credit.[29]

In the present case, however, no reimbursement was made outright,


precisely because the letter of credit was secured by a promissory note executed
by SPI. The bank would have not agreed to this transaction had it not been
deceived by Gilbert Guy, et al.into believing the RMSI and SPI were one and the
same entity. Guy and his cohorts acts in (1) securing the letter of credit
guaranteed by a promissory note in behalf of SPI; and, (2) their act of
representing SPI as RMSIs Division, were indicia of fraudulent acts because they
fully well know, even before transacting with the bank, that: (a) SPI was a
separate entity from Smartnet Philippines, the RMSIs Division, which has the
Omnibus Credit Line; and (b) despite this knowledge, they misrepresented to the
bank that SPI is RMSIs division. Had it not for this false representation, AUB would
have not granted SPIs letter of credit to be secured with a promissory note
because SPI as a corporation has no credit line with AUB and SPI by its own, has
no credit standing.
Fourth, it is not in dispute that the bank suffered damage, which, including
this controversy, amounted to hundreds of millions of pesos.

It is worth emphasizing that under Section 1, Rule 112 of the Revised Rules
on Criminal Procedure, the function of a preliminary investigation is to determine
whether there is a sufficient ground to engender a well-grounded belief that a
crime x x x has been committed and that the respondent is probably guilty
thereof and should be held for trial.[30]

A finding of probable cause needs only to rest on evidence showing that


more likely than not, the accused committed the crime.[31] Preliminary
investigation is not the occasion for the full and exhaustive display of the parties'
evidence.[32] It is for the presentation of such evidence only as may engender a
well-founded belief that an offense has been committed and that the accused is
probably guilty thereof.[33] The validity and merits of a party's accusation or
defense, as well as admissibility of testimonies and evidence, are better ventilated
during the trial proper.[34]
We, therefore, sustain the findings of the CA and the City Prosecutors
Resolution finding that probable cause exists against Gilbert Guy, et al. for the
crime of estafa under Article 315 (2)(a) of the Revised Penal Code and that Gilbert
Guy, et al. are probably guilty thereof and should be held for trial. AUBs
voluminous documents submitted to this Court overcome this difficulty and
established that there is sufficient ground to engender a well-grounded belief that
a crime has been committed and that the respondents are probably guilty thereof
and should be held for trial.

Lest it be misunderstood, we reiterate that this Courts finding of probable


cause is grounded on fraud committed through deceit which surrounded Gilbert
Guy, et al. transaction with AUB, thus, violating Article 315 (2) (a) of the Revised
Penal Code; it is neither their act of borrowing money and not paying them, nor
their denial thereof, but their very act of deceiving AUB in order for the latter to
part with its money. As early as the Penal Code of Spain, which was enforced in
the Philippines as early as 1887 until it was replaced by the Revised Penal Code in
1932, the act of fraud through false pretenses or similar deceit was already being
punished. Article 335 of the Penal Code of Spain punished a person who
defrauded another by falsely pretending to possess any power, influence,
qualification, property, credit, agency or business, or by means of similar
deceit.[35]
Anent the issue as to whether or not Gilbert Guy, et al. should be charged
for syndicated estafa in relation to Section 1 of PD No. 1689, which states that:

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 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.
We hold that the afore-quoted law applies to the case at bar, for the
following reasons:

Under Section 1 of PD No. 1689, the elements of syndicated estafa are:


(a) estafa or other forms of swindling as defined in Artilce 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 stockholders, or members of rural
banks, cooperatives, samahang nayon[s], or farmers associations or of funds
solicited by corporations/associations from the general public.[36]

First, as defined under Section 1 of PD No. 1689, a syndicate consists of five


or more persons formed with the intention of carrying out the unlawful or illegal
act, transaction, enterprise or scheme. Five (5) accused, namely, Gilbert G. Guy,
Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr. were,
(a) all involved in the formation of the entities used to defraud AUB; and (b) they
were the officers and directors, both of RMSI and SPI, whose conformities paved
the way for AUB to grant the letter of credit subject of this case, in AUBs honest
belief that SPI, as Gilbert Guy, et al. represented, was a mere division of RMSI. As
already discussed, although Eugenio Galvez, Jr. was not a director of SPI, he,
together with Gilbert Guy and Philip Leung, actively participated in the scheme
through their signed correspondences with the bank and their attendance in the
meetings with executives of AUB.[37] Rafael Galvez and Katherine Guy, on the
other hand, were the directors of RMSI and SPI who caused and authorized
Gilbert Guy and Philip Leung to transact with AUB.[38]
Second, while these corporations were established presumably in
accordance with law, it cannot be denied that Gilbert G. Guy, Rafael H. Galvez,
Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr. used these corporations
to carry out the illegal and unlawful act of misrepresenting SPI as a mere division
of RMSI, and, despite knowing SPIs separate juridical personality, applied for a
letter of credit secured by SPIs promissory note, knowing fully that SPI has no
credit line with AUB. The circumstances of the creation of these entities and their
dealings with the bank reveal this criminal intent to defraud and to deceive AUB.
Third, the fact that the defraudation of AUB resulted to misappropriation of
the money which it solicited from the general public in the form of deposits was
substantially established.[39] Section 3.1 of the General Banking Law defines banks
as entities engaged in the lending of funds obtained in the form of deposits. The
Old General Banking Act (R.A. No. 337) gave a fuller picture of the basic banking
function of obtaining funds from the public by way of deposits and the lending of
these funds as follows:

Sec 2. Only entities duly authorized by the Monetary Board of the Central Bank may
engage in the lending of funds obtained from the public through the receipt of deposits
of any kind, and all entities regularly conducting such operations shall be considered as
banking institutions, xxxx.

Gilbert Guy et al. want this Court to believe that AUB, being a commercial
bank, is beyond the coverage of PD No. 1689. We hold, however, that a bank is a
corporation whose fund comes from the general public. P.D. No. 1689 does not
distinguish the nature of the corporation. It requires, rather, that the funds of
such corporation should come from the general public. This is bolstered by the
third whereas clause of the quoted law which states that the same also applies to
other corporations/associations operating on funds solicited from the general
public. This is precisely the very same scheme that PD No. 1689 contemplates that
this species of estafabe checked or at least be minimized by imposing capital
punishment involving funds solicited by corporations/associations from the
general public because this erodes the confidence of the public in the banking and
cooperative system, contravenes public interest and constitutes economic
sabotage that threatens the stability of the nation.[40]

Hence, for the stated reasons, we applied the law in People v. Balasa,[41] a
non-stock/non-profit corporation the Panata Foundation of the Philippines,
Inc. We held that PD No. 1689 also applies to other corporations/associations
operating on funds solicited from the general public.
In People v. Romero,[42] we also applied the law to a stock corporation
engaged in marketing, the Surigao San Andres Industrial Development
Corporation. Likewise, in People v. Menil,[43] we applied the law to another
marketing firm known as ABM Appliance and Upholstery.
In these cited cases, the accused used the legitimacy of their entities to
perpetrate their unlawful and illegal acts. We see no reason not to apply this law
to a banking institution, a corporation imbued with public interest, when a clear
reading of the PD 1689 reveals that it is within its coverage.

WHEREFORE, the Decision of the Court of Appeals dated 27 June 2008 in


CA-G.R. SP No. 97160 is hereby AFFIRMEDwith MODIFICATION that Gilbert G.
Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy and Eugenio H. Galvez, Jr. be
charged for SYNDICATED ESTAFA under Article 315 (2) (a) of the Revised Penal
Code in relation to Section 1 of Presidential Decree No. 1689.

SO ORDERED.

JOSE PORTUGAL PEREZ


Associate Justice

WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION MARIA LOURDES P. A. SERENO Associate


Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified


that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court.

RENATO C. CORONA
Chief Justice
[1]
Rollo in G.R. No. 188030, p. 111.
[2]
In Civil Case No. 68366, RMSI filed a complaint, claiming that it was doing business under the name Smartnet
Philippines and Smartnet Philippines, Inc. Id. at 486.
[3]
Goodland Co., Inc. v Asia United Bank, G.R. Nos. 195546 and 195561, 14 March 2012.
[4]
Rollo in G.R. No. 188030, p. 471.
[5]
Id. at 472.
[6]
Id.
[7]
Rollo in G.R. No. 187919, pp. 137-148.
[8]
Id. at 148.
[9]
Filed before the Regional Trial Court of Pasig City, entitled People of the Philippines v. Gilbert Guy et
al., Branch 57, docketed as Criminal Case No. 133010-PSG. Id. at 53
[10]
Rollo in G.R. No. 188030, p. 398.
[11]
Penned by Associate Justice Vicente Veloso, with Associate Justices Rebecca de Guia-Salvador and Apolinario
D. Bruselas, Jr., concurring. Rollo in G.R. No. 187919, pp. 8-41.
[12]
Rollo in G.R. No. 188030, p. 16.
[13]
Incorporated on 24 January 1995. Rollo in G.R. No. 187919, p. 294.
[14]
Rollo in G.R. No. 188030, p. 111.
[15]
Montano v. People, 423 Phil. 141, 147-148 (2001).
[16]
Rollo in G.R. No. 188030, pp. 458-467.
[17]
Id. at 114.
[18]
Id. at 494-502.
[19]
Id. at. 481, 492-493, 502, 505, 507-512.
[20]
People v. Balasa, 356 Phil. 362. 382-383 (1998).
[21]
Rollo in G.R. No. 188030, p. 381.
[22]
Id. at 89-100.
[23]
Id. at 101.
[24]
Id. at 382.
[25]
Id. citing Alleje v. Court of Appeals, G.R. No. 107152, 25 January 1995, 240 SCRA 495, 500 citing further
Blacks Law Dictionary., 4th Edition., p. 788 (1951).
[26]
2 Phil. 353 (1903).
[27]
Rollo in G.R. No. 188030, p. 22.
[28]
Resolution of the Department of Justice. Rollo in G.R. No. 188030, p. 201.
[29]
Prudential Bank v. IAC, 216 SCRA 257 (1992).
[30]
Webb v. Hon. De Leon, 317 Phil. 758. 777 (1995).
[31]
Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Hon. Desierto, 375 Phil. 697 (1999).
[32]
Id.
[33]
Id.
[34]
Id.
[35]
Lozano v. Martinez, G.R. No. 63419, 18 December 1986, 146 SCRA 323, 332.
[36]
People v. Balasa,supra note 20 at 395-396.
[37]
Rollo in G.R. No. 188030, pp. 149-160.
[38]
Id. at 115.
[39]
Section 95. Definition of Deposit Substitutes. The term deposit substitutes is defined as an alternative form of
obtaining funds from the public, other than deposits, xxx.
[40]
Preamble of PD No 1689:
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;
[41]
Supra note 20.
[42]
365 Phil. 531 (1999).
[43]
G.R. Nos. 11504-66, 12 September 2000, 340 SCRA 125.
SECOND DIVISION

[G.R. No. 146770. February 27, 2003]

ORLANDO P. NAYA, petitioner, vs. SPS. ABRAHAM and GUILLERMA


ABING AND PEOPLE OF THE PHILIPPINES, respondents.

DECISION
CALLEJO, SR., J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, of the decision rendered by the Court of
Appeals[1] affirming the decision[2] of the Regional Trial Court of Cebu City, Branch 15
convicting Orlando P. Naya of estafa under Article 316, paragraph 2 of the Revised
Penal Code.

The Antecedents

Orlando P. Naya was the owner in fee simple of a parcel of residential land located
in Talisay, Cebu province identified as Lot 2049-B of the Tal-Ming Estate, with an area
of 485 square meters covered by Transfer Certificate of Title No. 65042 issued by the
Register of Deeds.[3]
On December 14, 1987, Orlando, as seller, and Abraham and Guillerma Abing, as
buyers, entered into a Contract to Sell,[4] two parcels of land with an area of 400 square
meters for the total price of Sixty Thousand Pesos (P60,000.00). Under the terms of the
Contract to Sell, Orlando, as seller, agreed that -
(1) After the spouses Abing have paid the amount of TWENTY THOUSAND
PESOS (P20,000.00), the balance of FORTY THOUSAND PESOS
(P40,000.00) payable in monthly installments of ONE THOUSAND
FIFTEEN AND 74/100 PESOS (P1,015.74), for five (5) years to start
on June 30, 1988 and for every 30th of the month thereafter.
(2) He shall be at liberty to sell the lots to other persons if the buyers, spouses
Abing fail to make payment of any of the installments within sixty (60)
days from its due date;
He also bound himself to execute a first deed of sale over the said property and
deliver title to the vendees over said property free from encumbrance and liens upon full
payment of the purchase price of the property.
(3) Upon full payment of purchase price, he shall deliver to the buyer, spouses
Abing, a final Deed of Sale and Certificate of Title in their names free
of encumbrance.
Guillerma Abing remitted to Orlando the amount of P20,000.00 as downpayment
and the amount of P2,000.00 a month, even in excess of the monthly amount of
P1,015.74 agreed upon in the Contract to Sell. The following monthly installment
payments were received by Orlando Naya and his agent Loreta Bacaltos:

Exhibit Number Date Amount

Exhibit B dated June 25, 1988 P 2,000.00

Exhibit B-2 dated July 30, 1988 2,000.00

Exhibit B-3 dated Sept. 3, 1988 2,000.00

Exhibit B-4 dated Oct. 1, 1988 2,000.00

Exhibit B-5 dated Nov. 5, 1988 2,000.00

Exhibit B-6 dated Dec. 3, 1988 2,000.00

Exhibit B-7 dated Jan. 7, 1989 2,000.00

Unknown to Guillerma Abing, Orlando Naya executed on January 13, 1989 a Deed
of Absolute Sale over Lot 2049-B and his other lots in favor of William Po for the price of
P200,000.00, receipt of which Orlando Naya acknowledged.[5] Orlando represented in
said deed that he was the lawful owner of the properties, free from all taxes and
encumbrances and that the properties were untenanted. Said deed was registered with
the Register of Deeds on December 5, 1989 and on said date, Transfer Certificate of
Title No. 67775 was issued by the Register of Deeds in favor and under the name of
William Po, as vendee.
However, Orlando never told the Spouses of said sale to William Po. Nevertheless,
Guillerma Abing continued remitting to Orlando amounts in partial payments of the
purchase price of the lots for which he issued receipts:

Exhibit B-8 dated Jan. 23, 1989 5,000.00

Exhibit B-9 dated April 3, 1989 4,000.00

Exhibit B-10 dated June 3, 1989 2,000.00

Exhibit B-11 dated June 23, 1989 2,000.00


Exhibit B-12 dated Sept. 1, 1989 4,000.00

Exhibit B-13 dated Dec. 24, 1989 3,000.00

P34,000.00

Guillerma Abing had paid Orlando Naya the total amount of Fifty-Four Thousand
Pesos (P54,000.00) inclusive of the Twenty Thousand Pesos (P20,000.00) which she
had paid upon the signing of the Contract to Sell.
On December 27, 1989, Orlando consented to the construction by Abraham Abing,
the husband of Guillerma Abing, of a fence and a residential house or warehouse in the
subject lots. The Spouses purchased hollow blocks for their fence for the price of
P40,000.00.
The Spouses were flabbergasted when during the construction of the fence, William
Po evicted them. The construction materials for the house of the couple remained
unused.
The Spouses Abing subsequently learned that Orlando, on January 13, 1989, had
sold the subject lots to William Po for the amount of Two Hundred Thousand Pesos
(P200,000.00) and that the latter had already secured a title over the property under his
name.[6]
On February 28, 1992, Guillerma Abing executed an affidavit and, through her
counsel, filed a criminal-complaint for estafa against Orlando and Loreta Bacaltos with
the Office of the Provincial Prosecutor.
On March 17, 1992, Loreta Bacaltos filed her counter-affidavit alleging, inter
alia, that she was not the proper party liable to private respondent Abing as she was not
the owner of the subject property, and that she only acted as an agent of seller Orlando
Naya; more, she had no knowledge of the properties covered by the Contract to Sell.
After the requisite preliminary investigation, an Information was filed against
Orlando with the Regional Trial Court for estafa which reads:

The undersigned accuses Orlando Naya of the crime of Estafa, under Article 316,
paragraph 2, of the Revised Penal Code, committed as follows:

That sometime in the month of November 1989, more or less, in the Municipality of
Talisay, Province of Cebu, Philippines, and within the jurisdiction of this Honorable
Court, the above-named accused, with intent to defraud, knowing that Lot 2049-B
(Lot 5 and 6) which is a portion of Lot No. 2049, under Transfer Certificate of Title
No. 65042, of a subdivision plan, located at Tabunok, Talisay, Cebu, with a total area
of 400 square meters, were already encumbered, did then and there willfully,
unlawfully and feloniously sell, cede, transfer and convey or dispose of the same real
properties to Mr. William Po, to the damage and prejudice of Guillerma Abing in the
total amount of P92,000.00 Pesos, Philippine Currency.
CONTRARY TO LAW. [7]

After the prosecution had adduced its testimonial evidence, it filed on September 2,
1993 its Formal Offer of Evidence. The accused did not offer any objection to the
documentary evidence of the prosecution. On February 4, 1994, the trial court issued an
order admitting all the documentary evidence of the prosecution. The trial court set the
case for continuation of trial for Orlando Naya to adduce his evidence on March 23,
1994 at 8:30 a.m. However, on said date and time, his counsel failed to appear. The
trial court issued an order declaring that accused had waived his right to adduce
evidence in his behalf.
On June 23, 1994, the trial court rendered judgment finding the accused guilty
beyond reasonable doubt of estafa defined and penalized in Article 316, paragraph 2 of
the Revised Penal Code, the decretal portion of which reads:

WHEREFORE, in view of all the foregoing evidences, arguments, and considerations,


this court hereby finds the accused Orlando Naya GUILTY beyond reasonable doubt
of the crime of Estafa as penalized under Art. 316 of the Revised Penal Code as he is
hereby sentenced to serve imprisonment of two (2) months and one (1) day to four (4)
months of arresto mayor in its minimum and medium periods and to pay a fine of
P92,000.00 and to indemnify the offended party, Guillerma Abing the sum of
P92,000.00 representing the value of the land sold and to reimburse the offended party
by way of consequential damages the sum of P40,000.00 and the hollow block fence
that was constructed by the complainant with the full consent and authority of
Orlando Naya, the accused herein. The accused is also required to pay the amount of
P50,000.00 in the concept of moral damages to the offended party, Guillerma Abing
and P20,000.00 exemplary damages and attorneys fees of P5,000.00 in addition to the
appearance fees of the lawyer of the accused after computing and counting the same.

IT IS SO ORDERED. [8]

Petitioner appealed to the Court of Appeals which rendered judgment affirming the
decision of the trial court.
In his petition, he assails the decision of the trial court contending that:

1) THE TRIAL COURT ERRED IN HOLDING THAT THE CONVEYANCE


EXECUTED BY THE ACCUSED IN FAVOR OF WILLIAM PO CONSTITUTES
THE CRIME OF ESTAFA AS AGAINST THE PRIVATE COMPLAINANT.

2) THE TRIAL COURT ERRED IN CONVICTING THE ACCUSED BASED ON


THE EVIDENCE ADDUCED BY THE PROSECUTION. [9]

Prefatorily, case law has it that an appeal in a criminal proceeding throws the whole
case open for review and the appellate court is mandated to correct any error in the
appealed judgment, whether this is assigned as an error or has not assigned as error
the issue of whether or not under the Information petitioner was charged with and may
be convicted of estafa under Article 316, paragraph 2 of the Revised Penal Code.
This Court will first consider and resolve said issue. Section 14(2) of Article III of the
1987 Constitution provides that an accused has the right to be informed of the nature
and cause of the accusation against him. Indeed, Section 6, Rule 110 of the Revised
Rules of Criminal Procedure requires that the acts or omissions complained of as
constituting the offense must be alleged in the Information. Section 8 of said rule
provides that the Information shall state the designation of the offense given by the
statute and aver the acts or omissions constituting the offense. The real nature of the
crime charged is determined by the facts alleged in the Information and not by the title
or designation of the offense contained in the caption of the Information. [10] It is
fundamental that every element of which the offense is comprised must be alleged in
the Information. What facts and circumstances are necessary to be alleged in the
Information must be determined by reference to the definition and the essential
elements of the specific crimes.[11]
Article 316, paragraph 2 of the Revised Penal Code reads:

Art. 316. Other forms of swindling. - The penalty of arresto mayor in its minimum
and medium periods and a fine of not less than the value of the damage caused and
not more than three times such value, shall be imposed upon:

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

The law was taken from Article 455 of the Spanish Penal Code of 1850 which
reads:

En la misma pena incurrir el que dispusiere de una cosa como libre, sabiendo que
estaba gravada.

Although the words como libre meaning free from encumbrance do not appear in
the English text of the Revised Penal Code, nonetheless, the same are deemed
incorporated in the Revised Penal Code. The gravamen of the crime is the disposition of
legally encumbered real property by the offender under the express representation that
there is no encumbrance thereon. Hence, for one to be criminally liable for estafa under
the law, the accused must make an express representation in the deed of conveyance
that the property sold or disposed of is free from any encumbrance.
The prosecution is burdened to allege in the Information and prove the confluence
of the following essential elements of the crime for the accused to be criminally liable for
estafa under Article 316, paragraph 2 of the Revised Penal Code:

Elements:
1. That the thing disposed of be real property.
2. That the offender knew that the real property was encumbered, whether the
encumbrance is recorded or not.
3. That there must be express representation by the offender that the real property
is free from encumbrance.
4. That the act of disposing of the real property be made to the damage of another.[12]
However, there is no allegation in the Information that petitioner expressly
represented in the sale of the subject property to William Po that the said property was
free from any encumbrance. Irrefragably, then, petitioner was not charged with estafa
under Article 316, paragraph 2 of the Revised Penal Code. Hence, the trial court
committed a reversible error in finding petitioner guilty beyond reasonable doubt of
estafa under said provision and that the Court of Appeals likewise erred in affirming the
decision of the trial court on appeal.
Petitioner avers that the Court of Appeals erred in ordering him to pay the amount of
P94,000.00 by way of actual damages. He posits that he is not liable for moral and
exemplary damages and attorneys fees.
We agree in part with petitioner. Notwithstanding the reversal of his conviction
for estafa, petitioner is nevertheless liable to private respondents for their payments of
the subject lots in the total amount of P54,000.00 and the value of hollow blocks used in
the construction of their fence in the amount of P40,000.00. Petitioner is also liable to
private respondents for moral damages it appearing in the record that petitioner acted in
evident bad faith and succeeded in defrauding private respondents. The latter
purchased the subject lots and paid the price therefor with the undertaking of petitioner
that upon payment in full of the purchase price of the property, petitioner will execute
the final Deed of Absolute Sale over the property and cause the issuance under their
names the title over the subject property without any liens or encumbrances. However,
petitioner hoodwinked private respondents and sold the property to William Po.
Although petitioner was no longer the owner of the property, he continued receiving
from private respondents their partial payments for the property. Worse, petitioner even
allowed private respondents to cause the construction of a fence around the perimeter
of the property although he had already sold the property to William Po. Fraud and bad
faith of petitioner having been proved by the prosecution, petitioner is liable to private
respondents for moral damages in the amount of P40,000.00 and for exemplary
damages in the amount of P20,000.00.[13]
IN LIGHT OF ALL THE FOREGOING, the petition is partially GRANTED. The
decision of the Court of Appeals affirming the decision of the Regional Trial Court of
Cebu City, Branch 15, convicting petitioner of estafa under Article 316, paragraph 2 of
the Revised Penal Code is REVERSED. Petitioner is hereby ordered to pay to private
respondents the amount of P94,000.00 as actual damages, the amount of P40,000.00
as moral damages, P20,000.00 as exemplary damages and P20,000.00 as attorneys
fees.
Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing and Austria-Martinez, JJ., concur.

[1]
Penned by Associate Justice Bernardo P. Abesamis, with Associate Justices Eugenio S. Labitoria and
Wenceslao I. Agnir, Jr., concurring.
[2]
Penned by Judge German G. Lee, Jr. (later appointed Associate Justice of the Sandiganbayan).
[3]
Exhibit D.
[4]
Exhibit A.
[5]
Exhibit E.
[6]
Rollo, pp. 15-17.
[7]
Original Records, Criminal Case No. CBU-28824, p. 1.
[8]
Original Records, pp. 82-83.
[9]
Rollo, p. 9.
[10]
People v. Escosio, 220 SCRA 475 (1993).
[11]
Balitaan v. Court of First Instance, et al., 115 SCRA 729 (1982).
[12]
Reyes, Revised Penal Code, 1981 ed., Book II, p. 786.
[13]
Bart Osmea & Associates v. Court of Appeals, et al., 120 SCRA 395 (1983).
Republic of the Philippines
SUPREME COURT
Manila

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 Decision1 of the Court of Appeals (CA), affirming with modification the May 14, 2004
Decision2 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 estafacontain 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 P69,520.003

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

SO ORDERED.4

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 certification8 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 6517 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. Pabalan20 in consonance with the
settled rule that penal laws shall be construed liberally in favor of the accused. The doctrine enunciated in People v. Benemerito21 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 24922 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 penalty26 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 635 and 836 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. Dinglasan41 and, by analogy, People v. Dela Cruz42 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.
168944 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. 488546–

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. 81847–

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 theft49 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
correccionalmaximum 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 temporalminimum, 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 16051 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. Manalo53 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 penalty55 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.56Thus, 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 reasonable60 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.

CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING ANTONIO T. CARPIO


Associate Justice Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA


Associate Justice Associate Justice

CONCHITA CARPIO MORALES ADOLFO S. AZCUNA


Associate Justice Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO


Associate Justice Associate Justice

PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA


Associate Justice Associate Justice

RUBEN T. REYES TERESITA J. LEONARDO-DE CASTRO


Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice

Footnotes

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.

See Aquino and Griño-Aquino, The Revised Penal Code, Vol. 1, 1997 ed., pp. 772-773; Padilla, Criminal Law: Revised Penal
27

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).

Cases involving privileged mitigating circumstances would, likewise, deviate from this general rule since the maximum term
57

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).