Deed of Absolute Sale that the lot in question is free from all liens and

encumbrances, when it was not so in fact.

As fraud involves acts or spoken or written words by a party to mislead another into
believing a fact-to be true when it is not in fact that express warranty in the Deed of
Absolute Sale covering the lot in question (Exhibit B) that said land is "free from all
liens and encumbrances" constitutes the false representation or deceit and one of
the elements giving rise to the crime of estafa. (People vs. Galsim 107 Phil. 303).

Our laws do not compel a vendee to make an inquiry or to undertake an

investigation in the Office of the Register of Deeds, to ascertain the status of the
property involved. The vendee can rely on the manifestations made to him by his
vendor whom he can presume to be trustworthy. What is important is that the
vendee must be dealt with in good faith by his vendor and the conduct of the
petitioner herein in connection with the sale of the subject lot manifestly disclose
the contrary. The suppression of material information and the false representations
by petitioner that the property which complainant paid for is free from liens and
encumbrances is clearly a deception to put off or forestall the petitioner's
appellants' concommittant obligation to deliver a clear title to the land sold.

That on or about the 16th day of June, 1994, at Puerto Princesa City, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, conspiring and
confederating together and mutually helping one another, after having received the
amount of P309,000.00 as payment of the 99 tanks of refilled fire extinguisher (sic)
from the City Government of Puerto Princesa, through deceit, fraud and
misrepresentation, did then and there willfully, unlawfully and feloniously defraud
one Chito Federico in the following manner, to wit: said accused, well knowing that
Chito Federico agent of LM Industrial Commercial Enterprises is entitled to 50%
commission of the gross sales as per their Dealership Contract or the amount
of P154,500.00 as his commission for his sale of 99 refilled fire extinguishers
worth P309,000.00, and accused once in possession of said amount of P309,000.00
misappropriate, misapply and convert the amount of P154,500.00 for their own
personal use and benefit and despite repeated demands made upon them by
complainant to deliver the amount ofP154,500.00, accused failed and refused and
still fails and refuses to do so, to the damage and prejudice of said Chito Federico in
the amount of P154,500.00, Philippine Currency. [20]

After holding trial, the RTC rendered its Judgment on 05 May 1997 finding
petitioners guilty beyond reasonable doubt as co-principals of the crime of estafa
defined and penalized in Article 315(1)(b) of the Revised Penal Code. Estafa, under
the said provision, is committed by

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

1. With unfaithfulness or abuse of confidence, namely:

(a)

(b) By misappropriating or converting, to the prejudice of another, money, goods, or

any other personal property received by the offender in trust or on commission, or
for administration, or under any other obligation involving the duty to make delivery
of or to return the same, even though such obligation be totally or partially
guaranteed by a bond; or by denying having received such money, goods, or other
property;

In the same Judgment, the RTC expounded on its finding of guilt, thus

For the afore-quoted provision of the Revised Penal Code to be committed, the
following requisites must concur:

1. That money, goods or other personal property be received by the

offender in trust, or on commission, or for administration, or under any
other obligation involving the duty to make delivery of, or to return, the
same;

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

by the offender, or denial on his part of such receipt;

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

another; and

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

This Court finds the instant Petition impressed with merit. Absent herein are two
essential elements of the crime of estafa by misappropriation or conversion
under Article 315(1)(b) of the Revised Penal Code, namely: (1) That
money, goods or other personal property be received by the offender in
trust, or on commission, or for administration, or under any other
obligation involving the duty to make delivery of, or to return, the same;
and (2) That there be a misappropriation or conversion of such money or
property by the offender.

The elements of estafa or swindling under paragraph 2 (a) of Article 315 of the
Revised Penal Code18 are the following:

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

2. That such false pretense, fraudulent act or fraudulent means must be

made or executed prior to or simultaneously with the commission of the
fraud.

3. 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.
 4. That as a result thereof, the offended party suffered damage. 19

It is not true that Honesta did not suffer any damage because she merely borrowed the
money, and that she showed no proof that she issued a check to pay said debt. 22 The
prosecution clearly showed that Bichara had sent a demand letter to Honesta asking for
payment.23 Honesta had borrowed P322,500 from Bichara for which she assuredly must
repay. This constitutes business loses to her and, in our view, actual damages as
contemplated under Article 315, par. 2 (a).

The following testimony of Ramirez clearly established that petitioner falsely

represented that he has the capacity to cause the subdivision of the property; that false
pretenses induced her (Ramirez) to entrust her TCT to petitioner; and that as a result
thereof, Ramirez suffered damage to the extent of P300,000.00, thus:

That sometime in the second week of December, 1993, in the municipality of

Meycauayan, province of Bulacan, Philippines, and within the jurisdiction of this
Honorable Court, the said accused Joy Lee Recuerdo, with intent to gain and by
means of deceit, false pretenses and fraudulent manifestations, and pretending to
have sufficient funds with the Unitrust, Makati Commercial Center Branch, did
then and there willfully, unlawfully and feloniously prepare, draw, make and issue
the following postdated checks, to wit:

Check No Date Amount

014355 April 5, 1994 P22,000.00
014356 May 5, 1994 22,000.00
014357 June 5, 1994 22,000.00 with the total
014358 July 5, 1994 22,000.00 amount
of P132,000.00
014359 August 5, 1994 22,000.00
drawn against
014360 September 5, 1994 22,000.00
the said bank,
and deliver the said checks to the complaining witness Yolanda G. Floro as
payment for pieces of jewelry she obtained from the said complainant, knowing
fully well at the time the checks were issued that her representations were false
for she had no sufficient funds in the said bank, so much that upon presentment of
the said checks with the said bank for encashment, the same were dishonored and
refused payment for having been drawn against an Account Closed, and inspite of
repeated demands to deposit with the said bank the amount of P132,000.00, the
said accused failed and refused to do so, to the damage and prejudice of the said
Yolanda G. Floro in the said amount ofP132,000.00.

in payment of various fabrics and textile materials all in the total amount
of P228,306.60 which the said accused ordered or purchased from the said RUBY
CHUA on the same day; that upon presentation of the said checks to the bank for
payment, the same were dishonored and payment thereof refused for the reason
Account Closed, and said accused, notwithstanding due notice to her by the said
Ruby Chua of such dishonor of the said checks, failed and refused and still fails and
refuses to deposit the necessary amount to cover the amount of the checks to the
damage and prejudice of the said RUBY CHUA in the aforesaid amount
of P228,306.60, Philippine currency.

The Informations charging Ojeda for violation of BP 22 were similarly

worded except for the amounts of the checks, the check numbers and the
dates of the checks:

That on or about the first week of November 1983, in the City of Manila, Philippines,
the said accused did then and there wilfully, unlawfully and feloniously make or draw
and issue to RUBY CHUA to apply on account or for value Rizal Commercial
Banking Corp. Check No. 041784 dated November 18, 1983 payable to Ruby Chua in
the amount of P5,392.34, said accused well knowing that at the time of issue
he/she/they did not have sufficient funds in or credit with the drawee bank or payment
of such check in full upon its presentment, which check, when presented for payment
within ninety (90) days from the date thereof was subsequently dishonored by the
drawee bank for insufficiency of funds, and despite receipt of notice of such dishonor,
said accused failed to pay said complainant the amount of said check or to make
arrangement for full payment of the same within five (5) banking days after receiving
said notice.

Chua later presented to the bank for payment check no. 033550 dated November 5, 1983 in the
amount of P17,100[3] but it was dishonored due to Account Closed.[4] On April 10, 1984, Chua
deposited the rest of the checks but all were dishonored for the same reason.[5] Demands were
allegedly made on the appellant to make good the dishonored checks, to no avail.

DECEIT AND DAMAGE AS

ELEMENTS OF ESTAFA

Under paragraph 2 (d) of Article 315 of the RPC, as amended by RA 4885,

the elements of estafa are: (1) a check is postdated or issued in payment of
[20]

an obligation contracted at the time it is issued; (2) lack or insufficiency of

funds to cover the check; (3) damage to the payee thereof. Deceit and
damage are essential elements of the offense and must be established by
satisfactory proof to warrant conviction. Thus, the drawer of the dishonored
[21]

check is given three days from receipt of the notice of dishonor to cover the
amount of the check. Otherwise a prima facie presumption of deceit arises.
Estafa Through Issuance of Unfunded Checks
The crime of Estafa is punished under the Revised Penal Code. One can be held guilty for Estafa by means of
issuing a bouncing check with the use of false pretenses or fraudulent acts executed prior to or simultaneously with
the commission of the fraud:

“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. (Article 315(2)(d) of the
Revised Penal Code as amended by R.A. 4885)”

cannot be held liable for estafa because the check was issued in payment of a pre-existing
debt. As mentioned earlier, estafa through the issuance of a bouncing check can be
committed only if the check was issued in payment of an obligation contracted at the time
the check was issued. Note however that while there is no estafa, nevertheless, Marian can
be held liable for another crime, which will be discussed below.