Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 209588 February 18, 2015

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,

vs.
ERIC ROSAURO y BONGCAWIL, Accused-Appellant.

DECISION

PEREZ, J.:

For the consideration of the Court is an appeal of the Decision1 dated 19 June 2013 of the Court of
Appeals (CA) in CA-G.R. CR-H.C. No. 00552- MIN, which affirmed the Judgment2 dated 24
November 2006 of the Regional Trial Court (RTC), Cagayan de Oro City, Branch 25 in Criminal
Case No. 2004-856, finding accused-appellant Eric Rosauro y Bongcawil (accused-appellant) guilty
beyond reasonable doubt of illegal sale of shabu under Sec. 5, Article II of Republic Act No. 9165
(R.A. No. 9165) or the Comprehensive Dangerous Drugs Act of 2002, sentencing him to suffer the
penalty of life imprisonment and ordering him to pay a fine of ₱500,000.00.

In an Amended Information dated 21 February 2005,3 accused-appellant was charged with violation
of Sec. 5, Art. II of R. A. No. 9165, to wit:

That on the 3rd day of July, 2004at about 5:30 o’clock in the afternoon, more or less, at Purok 3,
Barangay Poblacion, Municipality of Villanueva, Province of Misamis Oriental, Republic of the
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, not being
authorized by law to possess and to sell any dangerous drugs, knowingly, willfully and feloniously,
did then and there, sell and convey to a third person, who acted as a decoy in a buy bust operation,
one (1) sachet of shabu, containing 0.04 grams (sic) of shabu, which when examined gave
POSITIVE result to test for the presence of Methamphetamine Hydrochloride (Shabu), a dangerous
drug.4

Upon re-arraignment, accused-appellant pleaded not guilty to the crime charged.5 Thereafter, pre-
trial and trial on the merits ensued.

Based on the records, the prosecution’s version of the facts is as follows:

On October 13, 2002, on the basis of unconfirmed reports that accused-appellant Eric Rosauro
(Rosauro for brevity) was selling and distributing drugs, the Provincial Drug Enforcement Unit of
Misamis Oriental conducted a test-buy operation in the Municipality of Villanueva, Misamis Oriental
using a confidential agent. The confidential agent bought shabu from Rosauro at Purok 2, Barangay
Katipunan, Villanueva, Misamis Oriental. The substance bought from Rosauro was examined by the
PNP crime laboratory and yielded a positive result for Methamphetamine Hydrochloride (commonly
known as shabu).

On July 3, 2004, the police authorities received information that again drugs were being distributed
at Purok 3, Barangay Poblacion, Villanueva, Misamis Oriental. Thus, at 5:30 o’clock in the afternoon,
the Provincial Anti-Illegal Drugs Special Operation Task Unit (PAID-SOTU) elements led by SPO4
Lorenzo Larot and PO3 Juancho Dizon positioned themselves in the house of their confidential
agent.

There, the PAID-SOTU elements saw Rosauro negotiate with the confidential agent. In exchange for
the one (1) sachet of shabu given by Rosauro to the confidential agent, the latter gave him a marked
100-peso bill with serial number YZ7 12579.

After the transaction, Larot and Dizon came out of their hiding place and arrested Rosauro.
Thereafter, the confidential agent handed the sachet to Larot, who taped it, mark edit with the
marking "Exhibit A", and placed it inside his pocket. He also took pictures of Rosauro and the drugs.
In the police station, he prepared a Certificate of Inventory and a Request for Laboratory
Examination. Both the drugs and Rosauro were then turned over to the Crime laboratory.

On the basis of the request made by Larot, Police Chief Inspector Ma. Leocy Mag-abo, the Forensic
Chemical Officer of PNP Crime Laboratory conducted a laboratory examination on the contents of
the sachet, on accused-appellant, and the marked money. The examination of the seized item
yielded positive result for methamphetamine hydrochloride (shabu); while the accused-appellant and
the marked money tested positive for the presence of ultra-violet fluorescent powder.6

For his part, accused-appellant claims that he was merely a victim of instigation:

Accused-appellant Rosauro, on the other hand, tells a different tale. He testified that on July 3, 2004,
the police asset went to his house four (4) times and convinced him to do an errand for him. Rosauro
refused to buy shabu as he did not know where to buy one. It was the confidential informant who told
him to buy the prohibited drug from a certain "Kael" and to deliver it to the former’s house.It was also
the informant who gave the money to Rosauro to buy the shabu. But Rosauro was not able to meet
or buy directly from Kael because it was a young man who got and handed to him the shabu on the
road. When Rosauro went to the house of the confidential informant as instructed, he was arrested
by SPO4 Larot and Dizon. The sachet of shabu was not even recovered from him but from the
confidential informant.7

Finding the evidence of the prosecution sufficient to establish the guilt of accused-appellant, the
RTC rendered a judgment of conviction, viz.:

IN THE LIGHT OF THE FOREGOING, this Court hereby renders Judgment finding accused ERIC
ROSAURO y BONGCAWIL, "guilty" beyond reasonable doubt of the crime charged in the
information for selling and delivering a sachet of shabu to the poseur buyer a Violation of Section 5,
Article II of R.A. 9165 and imposes a penalty of life imprisonment and a fine of Five Hundred
Thousand (PhP 500,000.00) Pesos and to pay the cost.

The accused ERIC B. ROSAURO who has undergone preventive imprisonment shall be credited in
the service of his sentence consisting of deprivation of liberty, with the full time during which he has
undergone preventive imprisonment if the detention prisoner agrees voluntarily in writing to abide by
the same disciplinary rule imposed upon convicted prisoners, except those disqualified by law.

The sachet of shabu, Exh. "A" is confiscated and forfeited in favor of the government to be destroyed
in accordance with law.8

Accused-appellant appealed before the CA, assigning a lone error:

 I

THE COURT A QUO GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT WHEN

HIS GUILT WAS NOT PROVEN BEYOND REASONABLE DOUBT.9

After a review of the records, the CA affirmed the RTC Judgment. The appellate court ruled that
what transpired in the case at bar was an entrapment and not an instigation;10 that all the elements of
illegal sale of regulated or prohibited drugs were duly proven;11 that the non-presentation of the
confidential agent in court is not fatal;12 that the inconsistencies in the testimony of the lone witness
of the prosecution do not affect the result of the case;13 and that the apprehending team was able to
preserve the integrity of the subject drug and that the prosecution was able to present the required
unbroken chain in the custody of the subject drug.14 Thus, the CA held:

WHEREFORE, the Judgment dated November 24, 2006 of the Regional Trial Court, Branch 25,
Cagayan de Oro City in Criminal Case No. 2004-856 is hereby AFFIRMED.15

Accused-appellant is now before the Court seeking a review of his conviction.

After a thorough review of the records, however, we dismiss the appeal.

It is apropos to reiterate here that where there is no showing that the trial court overlooked or
misinterpreted some material facts or that it gravely abused its discretion, the Court will not disturb
the trial court’s assessment of the facts and the credibility of the witnesses since the RTC was in a
better position to assess and weigh the evidence presented during trial. Settled too is the rule that
the factual findings of the appellate court sustaining those of the trial court are binding on this Court,
unless there is a clear showing that such findings are tainted with arbitrariness, capriciousness or
palpable error.16

The RTC and the CA both found the arrest of accused-appellant to be the result of a legitimate
entrapment procedure, and we find nothing in the records as to warrant a contrary finding. In People
v. Bartolome,17 we had the occasion to discuss the legitimacy of a "decoy solicitation," to wit:

It is no defense to the perpetrator of a crime that facilities for its commission were purposely placed
in his way, or that the criminal act was done at the "decoy solicitation" of persons seeking to expose
the criminal, or that detectives feigning complicity in the act were present and apparently assisting its
commission. Especially is this true in that class of cases where the office is one habitually
committed, and the solicitation merely furnishes evidence of a course of conduct.

As here, the solicitation of drugs from appellant by the informant utilized by the police merely
furnishes evidence of a course of conduct. The police received an intelligence report that appellant
has been habitually dealing in illegal drugs. They duly acted on it by utilizing an informant to effect a
drug transaction with appellant. There was no showing that the informant induced the appellant to
sell illegal drugs to him.
1âwphi 1

Similarly, the presentation of an informant as witness is not regarded as indispensable to the

success of a prosecution of a drug-dealing accused. As a rule, the informant is not presented in
court for security reasons, in view of the need to protect the informant from the retaliation of the
culprit arrested through his efforts. Thereby, the confidentiality of the informant’s identity is protected
in deference to his invaluable services to law enforcement. Only when the testimony of the informant
is considered absolutely essential in obtaining the conviction of the culprit should the need to protect
his security be disregarded.18 In the present case, as the buy-bust operation was duly witnessed by
the Provincial Anti-Illegal Drugs Special Operation Task Unit (PAID-SOTU) elements led by SPO4
Lorenzo Larot (SPO4 Larot) and PO3 Juancho Dizon, their testimonies can take the place of that of
the confidential informant.

As to whether accused-appellant’s guilt was established beyond reasonable doubt, we rule in the
affirmative.

In a catena of cases, this Court laid down the essential elements to be duly established for a
successful prosecution of offenses involving the illegal sale of dangerous or prohibited drugs, like
shabu, under Section 5, Article II of R.A. No. 9165, to wit: (1) the identity of the buyer and the seller,
the object of the sale, and the consideration; and (2) the delivery of the thing sold and payment
therefor. Briefly, the delivery of the illicit drug to the poseur-buyer and the receipt of the marked
money by the seller successfully consummate the buy-bust transaction. What is material, therefore,
is the proof that the transaction or sale transpired, coupled with the presentation in court of the
corpus delicti.19

Verily, all the elements for a conviction of illegal sale of dangerous or prohibited drugs were proven
by the prosecution: the identity of accused-appellant as the seller, and that of the confidential
informant as poseur-buyer were established, as well as the exchange of the sachet of shabu and the
marked money. It was also ascertained that the seized item was positive for shabu, a dangerous
drug, and that the same item was properly identified in open court by SPO4 Larot. Moreover, the
₱100.00 bill with serial number YZ712579, or the subject marked money, as well as the living body
of the accused-appellant revealed a positive result for ultraviolet fluorescent powder.

Accused-appellant avers that the prosecution was not able to prove the corpus delicti, and that the
statutory safeguards provided for in Sec. 21 of R.A. No. 9165 were not followed.

Indeed, as we held in People v. Torres,20 equally important in every prosecution for illegal sale of
dangerous or prohibited drugs is the presentation of evidence of the seized drug as the corpus
delicti. The identity of the prohibited drug must be proved with moral certainty. It must also be
established with the same degree of certitude that the substance bought or seized during the buy-
bust operation is the same item offered in court as exhibit. In this regard, paragraph 1, Section 21,
Article II of R. A. No. 9165 (the chain of custody rule) provides for safeguards for the protection of
the identity and integrity of dangerous drugs seized, to wit:

SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered Dangerous Drugs,
Plant Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals,
Instruments/Paraphernalia and/or Laboratory Equipment. – The PDEA shall take charge and have
custody of all dangerous drugs, plant sources of dangerous drugs, controlled precursors and
essential chemicals, as well as instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper disposition in the following manner:

(1) The apprehending team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the
accused or the person/s from whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media and the Department of Justice (DOJ),
and any elected public official who shall be required to sign the copies of the inventory and be given
a copy thereof.

However, this Court has, in many cases, held that while the chain of custody should ideally be
perfect, in reality it is "almost always impossible to obtain an unbroken chain." The most important
factor is the preservation of the integrity and the evidentiary value of the seized items as they will be
used to determine the guilt or innocence of the accused. Hence, the prosecution’s failure to submit in
evidence the physical inventory and photograph of the seized drugs as required under Article 21 of
R. A. No. 9165, will not render the accused’s arrest illegal or the items seized from him
inadmissible.21

The chain of custody is not established solely by compliance with the prescribed physical inventory
and photographing of the seized drugs in the presence of the enumerated persons. The
Implementing Rules and Regulations of R. A. No. 9165 on the handling and disposition of seized
dangerous drugs states:

x x x Provided, further, that non-compliance with these requirements under justifiable grounds, as
long as the integrity and evidentiary value of the seized items are properly preserved by the
apprehending officer/team, shall not render void and invalid such seizures of and custody over said
items.22 (Italics, emphasis, undescoring omitted)

In the case at bar, after the sale was consummated, the confidential informant gave the seized item
to SPO4 Larot who placed tape on the sachet and marked it "Exhibit A." Upon reaching the police
station, SPO4 Larot executed the Certificate of Inventory, as well as the request for laboratory
examination. The request, the specimen, as well as the marked money and accused-appellant were
then brought to the PNP Crime Laboratory for examination. They were received. by SPO2 Ricardo
Maisog, the Receiving Clerk of the PNP Crime Laboratory Office, who then forwarded them to Police
Inspector Ma. Leocy Jabonillo Mag-abo, the Forensic Chemical Officer of the PNP Crime
Laboratory.23 Moreover, the seized item was duly identified by SPO4 Larot in open court as the same
item seized from accused-appellant.

Accused-appellant's guilt having been established, we likewise affirm the penalty imposed by the
RTC and the CA. Under the law, the offense of illegal sale of shabu carries with it the penalty of life
imprisonment to death and a fine ranging from Five Hundred Thousand Pesos (₱500,000.00) to Ten
Million Pesos (₱10,000,000.00), regardless of the quantity and purity of the substance.24 Thus, the
RTC and CA were within bounds when they imposed the penalty of life imprisonment and a fine of
Five Hundred Thousand Pesos (₱500,000.00).

WHEREFORE, premises considered, the present appeal is DISMISSED.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 187951 June 25, 2012

THE WELLEX GROUP, INC., Petitioner,

vs.
SANDIGANBAYAN, Respondent.

DECISION

SERENO, J.:

This is a Petition for Certiorari under Rule 65 seeking to nullify the Resolutions dated 24 September
2008 and 02 April 2009 promulgated by the Sandiganbayan (Special Division) in Criminal Case No.
26558, People of the Philippines v. Joseph Ejercito Estrada.

Petitioner The Wellex Group, Inc. (Wellex) assails the mentioned Resolutions of the Sandiganbayan,
alleging that the latter unduly included 450 million shares of stock of Waterfront Philippines, Inc. in
the forfeiture proceedings ordered under respondent’s Amended Writ of Execution in Criminal Case
No. 26558. Petitioner asserts that the subject shares of stock should not be forfeited as part of the
execution process in the plunder case, because Wellex is not a party to the case. Thus, it avers that
the Sandiganbayan committed grave abuse of discretion in issuing the questioned Resolutions,
which included the shares for forfeiture.

THE FACTS

On 12 September 2007, the Sandiganbayan, through its Special Division, promulgated a Decision in
Criminal Case No. 26558, the plunder case filed against former President Joseph Ejercito Estrada
(former President Estrada). The said Decision found him guilty of the crime of plunder and ordered
the forfeiture of the following:

Moreover, in accordance with Section 2 of Republic Act No. 7080, as amended by Republic Act No.
7659, the Court hereby declares the forfeiture in favor of the Government of the following:

(1) The total amount of Five Hundred Forty Two Million Seven Hundred Ninety One
Thousand Pesos (p545,291,000.00) [sic], with interest and income earned, inclusive of the
amount of Two Hundred Million Pesos (P200,000,000.00), deposited in the name and
account of the Erap Muslim Youth Foundation.

(2) The amount of One Hundred Eighty Nine Million Pesos (P189,000,000.00), inclusive of
interests and income earned, deposited in the Jose Velarde account.

(3) The real property consisting of a house and lot dubbed as "Boracay Mansion" located at
#100 11th Street, New Manila, Quezon City.1

On 25 October 2007, President Arroyo granted former President Estrada executive clemency
through a Pardon, which he accepted on 26 October 2007.2 The Pardon, however, expressly
stipulates as follows: The forfeitures imposed by the Sandiganbayan remain in force and in full,
including all writs and processes issued by the Sandiganbayan in pursuance hereof, except for the
bank account(s) he owned before his tenure as President.3

With this development, the Special Division of the Sandiganbayan on 26 October 2007 ordered the
issuance of a Writ of Execution for the satisfaction of the judgment, which was not covered by the
Executive Clemency granted to former President Estrada.4 On 05 November 2007, the Writ of
Execution5 was issued against him.

On 09 November 2007, former President Estrada filed a Motion to Quash Writ of Execution.6 He
alleged that the Writ of Execution expanded the 12 September 2007 Decision by including within the
scope of forfeiture "any and all" of his personal and real properties. He believes that the added
portion in the writ is tantamount to the imposition of a penalty and is thus a nullity.7

In the plunder case, the Office of the Special Prosecutor filed an Opposition8 to the Motion to Quash
of the former President. It rebutted his averments of movant Estrada and asserted its position that
the Writ of Execution sought to be quashed did not vary the 12 September 2007

Decision of the Sandiganbayan, but in fact only implemented Section 2 of Republic Act No.
7080,9 the Plunder Law, under which his was convicted.10

On 21 January 2008, Wellex wrote a letter11 to Banco de Oro expressing the desire to retrieve the
Waterfront shares the former had used as collateral to secure an earlier loan obligation to Equitable-
PCI Bank. It was at this time that Wellex became aware of the Writ of Constructive

Distraint issued by the BIR to Investment Management Account (IMA) Trust Account No. 101-78056-
1 in relation to the plunder case. While petitioner admits the existence of its loan and acknowledges
Equitable-PCI Bank as the lender, the former wants the mortgaged shares back. Alleging that its
loan obligation for which the shares were given as collateral has been extinguished, petitioner says:

It appears that interest payments on the loan were made for a certain period but these payments
stopped at some point in time. Inquiries resulted in our view that coincident to the stoppage of
interest payments, principal payment of the obligation was made by or on behalf of the borrower, not
to your bank as investment manager, but instead directly to the owner of the account. THE WELLEX
GROUP, INC. is presently interested in retrieving the shares given as security for the loan obligation
which apparently has been extinguished. (Emphasis supplied)12

On 28 January 2008, the Sandiganbayan promulgated a Resolution13 partially granting the Motion to
Quash of former President Estrada. It qualified its ruling by stating that the forfeiture process under
the Plunder Law was limited only to those proven to be traceable as ill-gotten. The dispositive
portion of the 28 January 2008 Resolution reads:

NOW THEREFORE, you are hereby commanded to cause the forfeiture in favor of the government
of the abovementioned amounts and property listed in the said dispositive portion of the decision,
including payment in full of your lawful fees for the service of the writ.

In the event that the amounts or property listed for forfeiture in the dispositive portion be
insufficient or could no longer be found, you are authorized to issue notices of levy and/or
garnishment to any person who is in possession of any and all form of assets that is
traceable or form part of the amounts or property which have been ordered forfeited by this
Court, including but not limited to the accounts receivable and assets found at Banco De Oro
(the successor in interest of Equitable PCI Bank) in the personal IMA Trust Account No. 101-
78056-1 in the name of Jose Velarde (which has been adjudged by the Court to be owned by
former President Joseph Ejercito Estrada and the depositary of the ill-gotten wealth)
consisting of Promissory Notes evidencing the loan of P500,000,000.00 with due date as of
August 2, 2000 and the chattel mortgage securing the loan;

Waterfront shares aggregating 750,000,000 shares (estimated to be worth P652,000,000.00 at

the closing price of P0.87 per share as of January 21, 2008); and Common Trust Fund money
in the amount of P95,759,000.00 plus interest earned thereby.

You are hereby directed to submit a weekly report on your proceedings in the implementation
of this Writ of Execution. (Emphasis supplied)

Pursuant to the 28 January 2008 Resolution, the Sandiganbayan issued an Amended Writ of
Execution on 19 February 2008 directing Sheriff Edgardo A. Urieta, Chief Judicial Staff Officer,
Security and Sheriff Services of the Sandiganbayan, to implement the amended writ and to submit a
weekly report through the Executive Clerk of Court.14

On 22 February 2008, Sheriff Urieta submitted a Sheriff’s Progress Report on the implementation of
the Amended Writ of Execution. The report stated, among others, that Banco de Oro Unibank, Inc.
(BDO), having acquired Equitable PCI-Bank, informed his office that the Jose Velarde

Account was under the Constructive Distraint issued by the Bureau of Internal Revenue (BIR). Thus,
the assets under the said account could not yet be delivered to the Sandiganbayan pursuant to the
Writ of Execution, pending the termination of the investigation conducted by the National
Investigation Division of the BIR.15

On 18 April 2008, BDO filed through its counsel a Manifestation (with Motion for Leave to File
Manifestation) confirming to the Sandiganbayan that the assets of IMA Trust Account No. 101-
78056-1 (as of 02 October 2002) under the name of Jose Velarde remained intact.16 The assets of
the trust account, which included 450 million shares of Waterfront Philippines, was under the
auspices of its Trust Department. Those assets remained on hold by virtue of a Constructive
Distraint issued on January 2001 by the BIR through its then officer in charge, Commissioner Lilian
B. Hefti.17 BDO also sought the guidance of the Sandiganbayan on how to proceed with the
disposition of the subject IMA Trust Account in view of the lien by the BIR and the claim of Wellex.18

On 16 May 2008, the Sandiganbayan held a hearing, in which the parties explained their respective
positions on the propriety of the levy over the subject shares. Thereafter, it ordered the parties to
submit their respective memoranda.19 Only the BIR filed its Memorandum, while petitioner Wellex
failed to file any.20

On 28 May 2008, instead of filing its memorandum, BDO made a submission informing the
Sandiganbayan that the bank had not yet received any payment from Wellex for the latter’s principal
obligation, which was secured by the subject Waterfront shares and covered by a Promissory Note
and a chattel mortgage, both dated 04 February 2000.21

We quote the Certification issued by BDO as follows:

CERTIFICATION
As the Investment Manager of Investment Management Account (IMA) No. 101-78056-1 covered by
the Investment Management Agreement dated February 4, 2000, we hereby certify that we have not
received any principal payment on the loan/investment amounting to PESOS: FIVE

HUNDRED MILLION (P500,000,000.00) granted/made by said account to The Wellex Group, Inc.
covered by the Promissory Note and Chattel Mortgage dated February 4, 2000, as amended on
August 2, 2000 (the "Loan"). Thus, the same remains outstanding in the books of Equitable
PCIBank, Inc. – Trust Banking (now Banco de Oro Unibank-Trust and Investments Group).

We likewise certify that interest payments on the Loan totalling PESOS: EIGHTY MILLION & 00/100
(₱ 80,000,000.00) were received from The Wellex Group, Inc. starting March 6, 2000 until January
29, 2001. No further interest payments were made thereafter. Such interest payments were invested
by the Bank in various investment outlets such that, as of date, it now amounts to PESOS: NINETY
SIX MILLION FOUR HUNDRED EIGHT THOUSAND NINE HUNDRED EIGHTY SEVEN & 90/100
(₱ 96,408,987.90).

This certification is being issued for whatever legal purpose this may serve.

May 28, 2008, Makati City.22 (Emphasis in the original)

On 24 September 2008, the Sandiganbayan promulgated a Resolution dated 15 September 2008

acknowledging the validity of the claim of the BIR against the former President and his spouse for
income tax deficiency. However, the Resolution noted that despite the prior issuance by the BIR of a
Constructive Distraint over the subject trust account, it failed to issue a formal assessment to the
spouses Estrada. The Sandiganbayan noted that the BIR had not yet finished its investigation to
determine the deficiency income tax of the spouses for the taxable year 1999. The anti-graft court
held that it could not wait for the BIR to finish the investigation of the matter before the former could
proceed with the forfeiture of the IMA Trust Account, considering that its Decision convicting the
former President had already become final.23

Thus, the Sandiganbayan ruled that the subject IMA Trust Account was ripe for forfeiture after the
conviction of former President Estrada in the plunder case had become final and executory. The
dispositive portion of its Resolution reads:

WHEREFORE, in the light of the foregoing, Mr. Edgardo Urieta, SB Chief Judicial Officer, Security
and Sheriff Services, this Court, is hereby directed to issue another NOTICE TO DELIVER to Banco
De Oro Unibank, Inc. (formerly BDO-EPCIB, Inc.) for the latter to deliver/remit to this Court the
amount of ONE HUNDRED EIGHTY NINE MILLION SEVEN HUNDRED THOUSAND (₱
189,700,000.00) PESOS, inclusive of interest and income earned, covered by IMA Trust Account
No. 101-78056-1 in the name of Jose Velarde, within fifteen (15) days from receipt thereof.24

On 11 October 2008, the Commissioner of Internal Revenue (CIR), as well as Wellex, filed a Motion
for Reconsideration (MR) of the 24 September 2008 Resolution of the Sandiganbayan.25

On 02 April 2009, the Special Division of the Sandiganbayan promulgated a Resolution26 denying the
MRs filed by the CIR and petitioner Wellex. In denying the MR of the CIR, the Sandiganbayan ruled
that the former’s right to forfeit the subject IMA Trust Account was anchored on the Decision
convicting former President Estrada under the Plunder Law and had already become final and
executory. It ruled that the CIR’s claim over the IMA Trust Account rested on flimsy grounds,
because the assessment issued to the spouses Estrada over an alleged deficiency in their income
tax payment was not yet final. Hence, it concluded that the Constructive Distraint could not defeat
the court’s preferential right to forfeit the assets of the subject IMA Trust Account, which was
included in the Decision on the plunder case.27

The Sandiganbayan also denied the MR of Wellex. It ruled that petitioner failed to rebut the 28 May
2008 BDO Certification, stating that the latter had not yet settled its loan obligation to Equitable-
PCIBank (now BDO). The Sandiganbayan considered the claim of Wellex – that the latter had
already settled its loan obligation to the owner of the account – to have been significantly
contradicted by petitioner’s (a) failure to rebut the said BDO Certification and (b) express admission
that then Equitable-PCIBank was the creditor in the loan transaction for which the shares were used
as collateral.28 Hence, the Sandiganbayan dismissed petitioner’s Opposition to the Notice To Deliver
issued against BDO for the delivery or remittance of the P189,700,000, inclusive of interests and
income earned under IMA Trust Account No. 101-78056-1 under the name of Jose Velarde. The
court even suggested that, for Wellex to retrieve the mortgaged Waterfront shares of stock,
petitioner should pay its outstanding loan obligation to BDO, so that the latter could remit the
payment to the Sandiganbayan.29

Hence, the present Petition before this Court.

THE ISSUES

The following are the issues proffered by petitioner for resolution:

I. THE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK

OR EXCESS OF JURISDICTION IN ISSUING THE RESOLUTION DATED 24

SEPTEMBER 2008 AND THE RESOLUTION DATED 02 APRIL 2009, BOTH OF WHICH UNDULY
EXPANDED THE COVERAGE OF THE 12 SEPTEMBER 2007 DECISION IN CRIMINAL CASE NO.
26558.

II. THE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO

LACK OR EXCESS OF JURISDICTION IN FINDING THAT THE FUND IN THE IMA

ACCOUNT WAS TRACEABLE TO THE P189.7 MILLION ILL-GOTTEN WEALTH DEPOSITED IN

THE JOSE VELARDE ACCOUNT.

A. THE IMA ACCOUNT WAS SOURCED FROM PLACEMENT ACCOUNT NO. 0160-
62501-5.

B. THE PHP500 MILLION FUND IN THE IMA ACCOUNT, WHICH WAS LOANED TO
PETITIONER, WAS NOT SOURCED FROM THE PHP189.7 MILLION ILL-GOTTEN
COMMISSION SUBJECT OF THE FORFEITURE.

OUR RULING

We DENY the Petition of Wellex Group for lack of merit.

The 12 September 2007 Decision of the Sandiganbayan in Criminal Case No. 26558 convicted
former President Estrada of the crime of plunder under Republic Act (R.A.) No. 7080, as amended.
In convicting him in the plunder case the court unmasked him as the beneficial owner of the Jose
Velarde accounts adjudged as ill-gotten wealth. It was also established during the trial of that case
that the ₱ 500 million lent to herein petitioner came from the former President and was coursed
through the said trust account. This fact is supported by documentary as well as the testimonial
evidence coming from the former President himself.

Petitioner does not dispute the loan that was granted to them by then Equitable PCI-Bank (now
BDO) in the amount of P500 million . The loan is evidenced by a Promissory Note and a Chattel
Mortgage dated 4 February 2000 executed between herein petitioner as "Borrower" and then
Equitable PCI-Bank as "Lender."30 The loan transaction was also admitted by Wellex through its legal
counsel’s letter dated 05 November 2008, when it formally demanded the return of the Waterfront
and Wellex shares.31

The 12 September 2007 Decision of the Sandiganbayan in the plunder case highlighted the
testimony of former President Estrada with regard to the circumstances surrounding the P500 million
loan to herein petitioner. It traced the source of the funding to IMA Trust Account No. 101-78056-1 in
the name of Jose Velarde, who turned out to be the former President. The Sandiganbayan held as
follows:

The evidence of the Defense shows that prior to February 4, 2000, the account balance of S/A 0160-
62501-5 of Jose Velarde was P142,763,773.67. (Exh. 127-O) There was therefore not enough funds
in the account to transfer to the Trust Account. Thus, the Debit-Credit Authority could not be
implemented.

Subsequently, a credit memo for P506,416,666.66 was issued in favor of the said Jose Velarde S/A
0160-62501-5 account. As per the testimony of defense witness, Beatriz Bagsit, the amount of
P506,416,666.66 represented the principal and interest of a preterminated placement of S/A 0160-
62501-5. The placement was not in the name of Dichaves but in the name of an account number,
i.e. Account No. 0160-62501-5 and behind that account is Jose Velarde. [TSN, April 18, 2005, p. 37
Eventually the P500,000,000.00 was withdrawn from the savings account in exchange for an MC
payable to trust. [Ibid. pp. 30, 31

Consequently, while the funding for the P500,000,000.00 did not come via the debit-credit authority,
nonetheless,the funding of the P500,000,000.00 came from S/A 0160-62501-5 of Jose Velarde.

Moreover, the debit-credit authority was not implemented because Bagsit kept the debit-credit
authority and did not give it to anybody. [TSN, April 13, 2005, p. 116

Neither does the non-implementation of the Debit-Credit Authority which FPres. Estrada
signed as Jose Velarde disprove the fact that FPres. Estrada admitted that S/A 0160-62501-5
in the name of Jose Velarde is his account when he admitted affixing his signature on the
Debit-Credit Authority as Jose Velarde.

The so-called "internal arrangements" with the bank, involved the use of S/A 0160-62501-5
which had been in existence since August 26, 1999 as the funding source of the
P500,000,000.00 to be placed in the Trust account for lending to Gatchalian. The fact that the
P500,000,000.00 funding was not effected by a debit-credit transaction but by a withdrawal of
P500,000,000.00 from the said S/A 0160-62501-5 proves that the money lentto Gatchalian was
the personal money of FPres. Estrada through the Jose Velarde account of which he is the
owner. As explained by FPres. Estrada, "William Gatchalian is a big businessman. Isang
malaking negosyante at siya po ay may ari ng Wellex group of companies at siya rin po ay isa
sa tumulong sa aming partido noong nakaraang 1998 presidential election." [TSN, May 24,
2006, p. 23
Pres. Estrada further testified: "Hindi lang po dahil doon sa internal arrangement. Hindi lang po dahil
gusto kong tulungan si Mr. William Gatchalian kundi higit po sa lahat ay nakita ko ang kapakanan
noong mahigit na tatlong libong (3000) empleyado na kung sakaling hindi mapapautang si Mr.
William Gatchalian, maaring magsara ang kanyang mga kumpanya at yong mga taong, mahigit
tatlong libong (3,000) empleyado kasama na yong kanilang mga pamilya ay mawawalan ng trabaho.
AT INISIP KO RING NA WALA NAMING (SIC) GOVERNMENT FUNDS NA INVOLVE KAYA HINDI
NA PO AKO NAGDALAWANG ISIP NA PIRMAHAN KO."

Moreover, as pointed out by the Prosecution, there was no need for the internal arrangement since
the loan to Gatchalian could have been extended by EPCIB directly considering that Gatchalian had
put up sufficient collateral for the loan.

From the foregoing, the ineluctable conclusion is that the so-called internal arrangement which
allegedly prompted FPres. Estrada to sign the various documents presented to him by Clarissa
Ocampo is a futile attempt to escape the consequence of his admission that he signed as Jose
Velarde which leads to the legal and indisputable conclusion that Pres. Estrada is the owner of the
Jose Velarde Accounts.32 (Emphasis supplied and citations omitted)

From the above findings, it is clear that the funding for the loan to Wellex was sourced from Savings
Account No. 0160-62501-5 and coursed through the IMA Trust Account. This savings account was
under the name of Jose Velarde and was forfeited by the government after being adjudged as ill-
gotten. The trust account can then be traced or linked to an account that was part of the web of
accounts considered by the Sandiganbayan as ill-gotten.

The crux of the problem is whether the Sandiganbayan unduly expanded the scope of its 12
September 2007 Decision when it issued the Resolutions that specified the forfeiture of the assets of
the subject IMATrust Account, including the Waterfront and Wellex shares owned by petitioner.

We rule in the negative and affirm these Resolutions dated 24 September 2008 and 02 April 2009
issued by the Sandiganbayan issued in Criminal Case No. 26558.

When petitioner Wellex contracted the loan from then Equitable PCI-Bank, the former
voluntarilyconstituted a chattel mortgage over its Waterfront shares, with the subsequent addition of
the subject Wellex shares as added security for the loan obligation. Thus, the Wellex loan and the
Chattel Mortgage, which were constituted over the Wellex and Waterfront shares of stock, became
the asset of the aforementioned IMA Trust Account. In this case, the loan transaction between
Wellex and Equitable PCI-Bank, as Investment Manager of the IMA Trust Account, constitutes the
principal contract; and the Chattel Mortgage over the subject shares of stock constitutes the
accessory contract.

It was established during the trial of the plunder case that the source of funding for the loan
extended to Wellex was former President Estrada, who had in turn sourced the fund from S/A 0160-
62501-5 and coursed it through IMA Trust Account 101-78056-1. After his conviction for the crime of
plunder, the IMA Trust Account under the name of Jose Velarde was forfeited. As a consequence,
all assets and receivables of the said trust account were also included in the forfeiture, which was
without any legal basis.

Section 2 of R.A. 7080, as amended, provides for the forfeiture of the wealth proven to be ill-gotten,
as well its interests, thus:

SECTION 2. Definition of the Crime of Plunder; Penalties. — Any public officer who, by himself or in
connivance with members of his family, relatives by affinity or consanguinity, business associates,
subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a
combination or series of overt criminal acts as described in Section 1 (d) hereof in the aggregate
amount or total value of at least Fifty million pesos (P50,000,000.00) shall be guilty of the crime of
plunder and shall be punished by reclusion perpetua to death. Any person who participated with the
said public officer in the commission of an offense contributing to the crime of plunder shall likewise
be punished for such offense. In the imposition of penalties, the degree of participation and the
attendance of mitigating and extenuating circumstances, as provided by the Revised Penal Code,
shall be considered by the court. The court shall declare any and all ill-gotten wealth and their
interests and other incomes and assets including the properties and shares of stocks derived from
the deposit or investment thereof forfeited in favor of the State. (Emphasis supplied)

There is no dispute that the subject shares of stock were mortgaged by petitioner Wellex as security
for its loan. These shares being the subject of a contract that was accessory to the Wellex loan and
being an asset of the forfeited IMA Trust Account, the said shares necessarily follow the fate of the
trust account and are forfeited as well. However, the forfeiture of the said trust account, together with
all its assets and receivables, does not affect the validity of the loan transaction between BDO the
creditor and Wellex the debtor. The loan continues to be valid despite the forfeiture by the
government of the IMA Trust Account and is considered as an asset.

Consequently, the forfeiture had the effect of subrogating the state to the rights of the trust account
as creditor.

We note that even at this point, Wellex generally alleges that it has paid its loan obligation directly to
its principal or creditor without proffering any proof of that payment. Also, petitioner does not reveal
the identity of its alleged principal or creditor to which the former made its payment to extinguish its
loan obligation relevant to this case. These matters render petitioner’s claim of payment highly
doubtful. Thus, the Sandiganbayan was in point when it stated in its 28 January 2008 Resolution in
Criminal Case No. 26558 that the Decision dated 12 September 2007 included forfeiture as a
penalty. In its assailed 02 April 2008 Resolution, it proceeded from the preceding legal premises
when it made a suggestion to petitioner regarding the latter’s intent to retrieve the shares subject of
this Petition, viz:

If Wellex wants to retrieve the collaterals it gave to BDO, it should pay its outstanding loan to BDO
and from the proceeds of the payment, BDO should remit to the Court the amount of
P189,000,000.00 inclusive of interest and income earned.33

Wellex tries to convince this Court that the source of the funding for the former’s loan was the
personal funds of the former President; thus, these funds should not have been forfeited. Petitioner
details in its Petition how the P500 million was sourced and eventually lent to it.34

We are, however, not persuaded by its arguments.We agree with Wellex that the 12 September
2007 Decision of the Sandiganbayan in Criminal Case No. 26558 has become final and executory.
As a consequence, the findings of fact and legal conclusion of the said Decision – that the P500
million was coursed through the Jose Velarde account adjudged as ill-gotten – are now immutable
and unalterable. In addition, petitioner waived its right to correct whatever error it perceived in the
assailed Resolutions, when it failed to submit its memorandum in Criminal Case No. 26558 to settle
the validity of the BIR’s claim over the IMA Trust Account.35

Petitioner also argues that since the dispositive portion of the 12 September 2007 Decision in
Criminal Case No. 26558 does not explicitly mention the IMA Trust Account, its inclusion in the
assailed Resolutions unduly expands the Decision. We do not find merit in this argument.
Forfeiture in a criminal case is considered in personam, similar to a money judgment that runs
against a defendant until it is fully satisfied.36 This criminal forfeiture is considered part of the criminal
proceedings against the defendant, rather than a separate proceeding against the property
itself.37 The scope of criminal forfeiture by the government includes any property, real or personal,
involved in the crime or traceable to the property. The term "involved in" has consistently been
interpreted broadly by courts to include any property involved in, used to commit, or used to facilitate
the crime.38

Petitioner’s interpretation of Section 2 of R.A. 7080 is narrow and rigid and defeats rather than
serves the ends of justice in plunder cases. Section 2 of R.A. 7080 mandates the court to forfeit not
only the ill-gotten wealth, interests earned, and other incomes and assets, but also the properties
and shares of stock derived from the deposit or investment. The Sandiganbayan Decision imposed
the penalty of forfeiture when it convicted the former President Estrada of the crime of plunder. It is
beyond cavil that it found the subject IMA Trust Account traceable to the accounts declared to be ill-
gotten by the former President. Thus, to rigidly construe the mandate of Section 2 of R.A. 7080, as
petitioner would want us to do, is to render the Plunder Law inutile.

In its Resolution dated 28 January 2008 (in Criminal Case No. 26558 from which the assailed
Resolutions subject of this Petition originated), the Sandiganbayan correctly laid the basis of its
Order of forfeiture as follows:

The provision of Section 2 must be interpreted in its entirety and cannot be confined to words and
phrases which are taken out of context. The trunk of the tree of forfeiture under Section 2 is ill-gotten
wealth and the branches of the ill-gotten wealth are the interests, incomes, assets, properties and
shares of stocks derived from or traceable to the deposit or investment of such ill-gotten wealth.

Interpreted otherwise, what should be forfeited are assets in whatever form that are derived or can
be traced to the ill-gotten wealth as defined under sub-pars. 1-6, par. (d), Section 1 of the Plunder
Law. Should Assets (sic) not derived, nor traceable to the ill-gotten wealth be forfeited in favor of the
State, such would result in deprivation of property without due process of law.

xxx xxx xxx

No less than Movant had admitted that while the Decision of the Court includes forfeiture of a
specific sum, the Plunder Law limits this only to property derived or traceable to the instruments or
proceeds of the crime.

Not only does the Plunder Law authorize the forfeiture of the ill-gotten wealth as well as any asset
acquired with the use of the ill-gotten wealth, Section 6 likewise authorizes the forfeiture of these ill-
gotten wealth and any assets acquired therefrom even if they are in the possession of other persons.
Thus, Section 6 provides:

"Section 6. Prescription of Crimes – The crime punishable under this Act shall prescribe in twenty
(20) years. However, the rights of the State to receive properties unlawfully acquired by public
officers from them or from their nominees or transferees shall not be barred by prescription, laches,
or estoppel."39

Even petitioner admits that the amount of P506,416,666.66 was deposited to S/A 0160-62501-5 via
a credit memo, and that P500 million was subsequently withdrawn from the said savings account,
deposited to IMA Trust Account No. 101-78056-1, and then loaned to petitioner. The
Sandiganbayan made a categorical finding that former President Estrada was the real and beneficial
owner of S/A 0160-62501-5 in the name of Jose Velarde.

Grave abuse of discretion has been defined as such capricious and whimsical exercise of judgment
tantamount to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all
in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by
reason of passion or hostility.40 We do not find this situation present in this case to merit the
nullification of the assailed Resolutions.

It is beyond doubt that IMA Trust Account No. 101-78056-1 and its assets were traceable to the
account adjudged as ill-gotten. As such, the trust account and its assets were indeed within the
scope of the forfeiture Order issued by the Sandiganbayan in the plunder case against the former

President. Thus, it did not commit grave abuse of discretion when it ordered the forfeiture of the trust
account in BDO, including the assets and receiveables thereof.

WHEREFORE, we DISMISS the Petition of Wellex for lack of merit and AFFIRM the Resolutions
dated 24 September 2008 and 02 April 2009 promulgated by the Sandiganbayan (SpecialDivision) in
Criminal Case No. 26558, People of the Philippines v. Joseph Ejercito Estrada.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Associate Justice
G.R. No. 140033 January 25, 2002

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
ROGELIO MORENO y REG, accused-appellant.

DAVIDE, JR., C.J.:

Before us for automatic review1 is the Decision2 of 9 August 1999 of the Regional Trial Court, Branch
138, Makati City, in Criminal Case No.99-026 finding accused-appellant Rogelio Moreno y Reg
(hereafter ROGELIO) guilty beyond reasonable doubt of the special complex crime of robbery with
rape and sentencing him to suffer the penalty of death and to pay the amounts of ₱200,000 as moral
damages and ₱1,000 representing the value of the personal property taken from the victim Marites
Felix (hereafter MARITES).

The accusatory portion of the Information3 reads as follows:

That on or about the 8th day of January 1999 in the City of Makati, Metro Manila, Philippines,
a place within the jurisdiction of this Honorable Court, the above-named accused, armed with
a bladed weapon, with intent to gain and by means of violence and intimidation, did then and
there willfully, unlawfully rob, take and divest Marites Felix y Tacadena of one (1) gold ring,
black bag containing one (1)ATM card, one (1) white Burger Machine T-shirt, 30 copies of
Burger Machine coupons, one (1) pocket book, a bible, toothbrush, toothpaste and cash
money in the amount of ₱200.00, all belonging to Marites Felix y Tacadena, to the latter’s
damage and prejudice and the on the occasion of the said robbery and by using force and
intimidation, accused did then and there willfully, unlawfully and feloniously have carnal
knowledge of the complainant Marites Felix y Tacadena against her will and consent.

CONTRARY TO LAW.

Upon arraignment on 25 January 1999, ROGELIO, with the assistance of counsel de oficio, entered
a plea of not guilty.

At the pre-trial, the only fact the parties could agree on was that ROGELIO was wearing a Burger
Machine T-shirt at the time he was arrested. Thereafter trial ensued.

The victim, 20-year-old MARITES, testified that at about 12:45 A.M. of 8 January 1999, as she was
walking along ABC Commercial Complex, Makati, after her duty as service crew of the Burger
Machine outlet located at Guadalupe Nuevo, Makati, she noticed a man behind her. Suddenly, the
man put his arms around her and pointed a fan-knife at her neck. Since the place was illuminated by
streetlights and lights coming from the ABC Commercial Complex, MARITES noticed the tattoos in
his arms and recognized him to be accused-appellant ROGELIO. Prior to 8 January 1999,
ROGELIO would pass by their Burger Machine outlet twice a week, but there was never an occasion
that he bought something from Burger Machine.4

ROGELIO dragged MARITES and at the same time ordered her to follow him to the side of ABC
Complex, which is about five arms-length away from EDSA. MARITES removed her ring from her
bag and gave it to ROGELIO.5 The latter told her, "Mamaya na iyan."6 "[T]hat will come later on
because I will give it back to you but you have to follow me first."7
ROGELIO grabbed MARITES’s long-sleeved shirt, unbuttoned it, and pushed her to the vacant
space behind the car then parked on the side of ABC Complex. He again pointed his knife at her
throat and pulled down her pants. To her plea for mercy, he replied "Huwag kang maingay, kundi
papatayin kita." ROGELIO then removed his pants and again uttered "Huwag kang maingay kundi
sasaksakin kita." Still, she told him that he could get her bag if he needed money, but he replied, "I
do not need money."8

ROGELIO ordered MARITES to open her legs apart or else he would kill her. MARITES was forced
to obey him. ROGELIO then went on top of her with his right hand holding her throat, inserted his
sexual organ into hers, and kept on pumping. After he was through, ROGELIO went again on top of
MARITES and ordered her to put his organ inside her vagina. MARITES said, "Ayoko." At this point,
she heard someone nearby running. ROGELIO forthwith put on his shorts and snatched the
shoulder bag of MARITES, which contained her ATM card, ₱200 cash, a small Bible, coupons of
Burger Machine and T-shirt with Burger Machine markings. He then ran away towards the direction
of the other side of EDSA.9

The vendors who saw MARITES crying as she was walking inquired about what happened to her.
They brought her back to the Burger Machine outlet and called the police. MARITES joined the
police in the search for ROGELIO around the vicinity and to the place where the incident happened.
One of the two policemen saw her ring in said place. They continued to search the vicinity until they
reached Laperal Compound. As they were approaching Guadalupe Bridge, several persons who
were talking to each other scampered away upon seeing MARITES and the police officers. One of
them was ROGELIO, who immediately went inside a house and turned off its lights. With the
assistance of the barangay tanod, the police went to the back portion of the house and saw
ROGELIO, who at the time was wearing a hat and a blue jacket with his head bowed down.10

Upon seeing ROGELIO, MARITES exclaimed: "He is the one." ROGELIO refused to remove his hat
when she tried to remove it. After finally succeeding in removing his hat, MARITES confirmed: "He
[was] the one who raped me." She then removed his jacket and saw under it her T-shirt with Burger
Machine prints at the left sleeve and catsup stains in the front and upper parts of the shirt. This was
the shirt she used in working at their Burger Machine outlet.11

The police brought ROGELIO and MARITES to the police station where MARITES was investigated.
At 9:00 A.M. of the following day, MARITES was examined by Dr. Aurea P. Villena, a medico-legal
officer of the National Bureau of Investigation (NBI).12

Dr. Aurea P. Villena testified that she conducted an examination on MARITES and found that
MARITES sustained contusions on her breasts. She also noted the following:

2) Hymen, intact but distensible and its orifice wide (2.5 cm in diameter) as to allow complete
penetration of an average-sized adult Filipino male organ in full erection without producing
any genital injury;

3) Semenology - positive for human spermatozoa which is highly indicative of recent sexual
intercourse with [a] man.13

SPO3 Quillano Molmisa of the Makati Police Station corroborated the testimony of MARITES that
upon receiving her complaint for rape, he, together with the latter and SPO4 Alejandro Alisangco,
proceeded to the Laperal Compound in Guadalupe, which was known to the police officers as a
hiding place of criminals in that area. ROGELIO ran away upon seeing MARITES and the police
officers. ROGELIO was later found hiding in a kneeling position in Laperal Compound. MARITES
was hysterical as she positively identified ROGELIO. SPO3 Molmisa brought ROGELIO to
the Ospital ng Makati for medical examination before bringing him to the police station.14

Accused-appellant ROGELIO, 19 years old and a resident of Laperal Compound, Guadalupe Viejo,
Makati City, put up the defense of alibi. He testified that on or about 12:45 A.M. of 8 January 1999,
he was sleeping in a folding bed located outside the house owned by his uncle, with whom he had
been living. ROGELIO was roused from sleep by the police. MARITES approached him, took off his
hat and was hysterical when she pointed to him saying, "Iyan nga po iyon, iyan nga po iyon." "Ikaw
ang nangholdap sa akin at nang rape." Then the policemen tied his hands and brought him to
the Ospital ng Makati, together with MARITES.15

ROGELIO did not deny the fact that he was wearing a T-shirt with Burger Machine prints at the time
of his arrest. According to him it had been with him for almost a year prior to the incident. It was
given to him as a souvenir by a friend who worked at the Burger Machine.16

Zaldy Carino, a 17-year-old neighbor and friend of ROGELIO for three years prior to the incident,
testified that between 5:00 and 8:00 P.M. of 7 January 1999 he was playing basketball with
ROGELIO and the latter’s friends. ROGELIO was wearing a Burger Machine T-shirt the whole time
that they were playing basketball. After winning the game, ROGELIO bought some merienda for his
playmates, since he was the one who placed the bet. They stayed in ROGELIO’s house until about
10:00 P.M. when ROGELIO told them that he was going to sleep. After Zaldy and his friends left,
ROGELIO slept in a folding bed located outside the house of his uncle.17

Between 2:00 and 3:00 A.M. of the following day, Zaldy was awakened when he heard noises. He
went out of the house and went to the place where the noise was coming from. He found out that it
came from the place where ROGELIO was sleeping, and he saw ROGELIO being beaten up by four
persons, including a barangay tanod. Zaldy also saw MARITES shouting, crying and claiming that
the T-shirt worn by ROGELIO was hers. ROGELIO and another person by the name of Inteng were
taken away.18

After evaluating the evidence offered by the parties, the trial court gave full faith and credit to the
version of the prosecution, convicted ROGELIO of robbery with rape and appreciated against him
the aggravating circumstance of nocturnity. It disregarded ROGELIO’s defenses of denial and alibi in
view of his positive identification by MARITES as her assailant. Accordingly, in its Decision of 9
August 1999, the trial court decreed as follows:

FOR THE REASONS GIVEN, the Court finds accused Rogelio Moreno y Reg, guilty beyond
reasonable doubt of having committed the special complex crime of robbery with rape,
defined and penalized under Articles 293 and 294 of the Revised Penal Code as amended
by Republic Act No. 7659. Applying Article 63 of the Revised Penal Code, considering the
attendance of the aggravating circumstance of nocturnity and absent any mitigating
circumstance, the Court imposes the penalty of death upon said accused. Accused is
ordered to pay the complainant ₱200,000.00 as and for moral damages plus ₱1,000.00
representing the value of the personal properties taken but not recovered.19

In his Appellant’s Brief, ROGELIO claims that the trial court committed the following errors:

I. … IN FINDING THAT THE GUILT OF THE ACCUSED-APPELLANT FOR THE CRIME

CHARGE HAS BEEN PROVEN BEYOND REASONABLE DOUBT.

II. … IN NOT DECLARING THAT THE ACCUSED-APPELLANT’S CONSTITUTIONAL

RIGHT WAS VIOLATED WHEN HE WAS ARRESTED AND BROUGHT TO THE POLICE
 STATION FOR CUSTODIAL INVESTIGATION WITHOUT THE ASSISTANCE OF AN
INDEPENDENT AND COMPETENT COUNSEL OF HIS CHOICE.

III. … IN APPRECIATING THE AGGRAVATING CIRCUMSTANCE OF NOCTURNITY IN

THE COMMISSION OF THE CRIME CHARGED.

As to the first assigned error, ROGELIO banks on the alleged absence of resistance and struggle by
MARITES as evidenced by the absence of injuries on her person. He likewise argues that it was
improper to charge him with robbery with rape, since the taking of the victim’s property was a mere
afterthought and an independent act from the alleged commission of the crime of rape.

Anent the second assigned error, ROGELIO alleges that when he was arrested, he was not
informed of his right to remain silent, and when he was forced by the policemen to undress and
admit the crime, he was not assisted by an independent and competent counsel.

Finally, on the third assigned error, ROGELIO maintains that the trial court erred in appreciating
against him the aggravating circumstance of nocturnity because the place where the rape took place
was not covered with darkness, and there is no evidence that nighttime was deliberately sought after
by him to carry out a criminal intent.

In the Appellee’s Brief, the Office of the Solicitor General (OSG) argues that ROGELIO’s conviction
was based on the direct testimony of MARITES and not on his alleged admission; in fact, no
evidence on his alleged admission was presented by the prosecution. The OSG supports the trial
court in convicting him of robbery with rape, as the law does not differentiate whether rape is
committed before, during or after the robbery, it being enough that rape accompanied robbery.

The OSG also agrees on the existence of the aggravating circumstance of nighttime, since
ROGELIO waited until 12:45 A.M. of the day in question to accomplish his evil design. It further
asserts that even if the rape and robbery were considered independently, ROGELIO’s sentence for
the rape would still be death because such crime was committed with the use of deadly weapon and
attended by nocturnity. Hence, it prays that the challenged decision of the trial court be affirmed. It,
however, recommends that compensatory damages in the amount of ₱75,000 be awarded to
MARITES and the moral damages be reduced to ₱50,000.

We are convinced beyond any shadow of doubt that ROGELIO succeeded in having carnal
knowledge of MARITES with the use of force and intimidation. When he first put his arms around
her, he had a fan-knife in his possession directed towards her neck. As he was on top of her, his
hand was on her throat and he threatened to stab and kill her should she create a noise. Fear of
further injury overpowered and stifled her attempt to resist the sexual assault. MARITES might have
failed to resist ROGELIO’s advances, but such failure was a manifestation of involuntary submission,
not of consent. In any event, force or intimidation itself is sufficient justification for a woman’s failure
to offer resistance. It is well settled that physical resistance need not be established in rape when
intimidation is exercised upon the victim and the latter submits herself against her will to the rapist’s
advances because of fear for her life and personal safety.20 Thus, the law does not impose a burden
on the rape victim to prove resistance. What needs only to be proved by the prosecution is the use
of force or intimidation by the accused in having sexual intercourse with the victim.21

This court has frequently held that in rape cases, the conduct of a woman immediately following the
alleged assault is of utmost importance. In this case, MARITES immediately reported the incident to
the police, accompanied them in looking for her assailant, and upon seeing him she immediately
identified him as her rapist. Thereafter, she underwent police investigation and submitted to a
physical examination of her private parts by a medico-legal officer. Her conduct negated fabrication
or prevarication on her part.22

We cannot, however, sustain ROGELIO’s conviction of robbery with rape.

The special complex crime of robbery with rape defined in Article 293 in relation to paragraph 2 of
Article 294 of the Revised Penal Code, as amended, employs the clause "when the robbery shall
have been accompanied with rape." In other words, to be liable for such crime, the offender must
have the intent to take the personal property of another under circumstances that makes the taking
one of robbery, and such intent must precede the rape.23 If the original plan was to commit rape, but
the accused after committing the rape also committed robbery when the opportunity presented itself,
the robbery should be viewed as a separate and distinct crime.24

A painstaking assessment of the evidence in this case convinces us that ROGELIO committed two
separate offenses of rape and theft, and not the special complex crime of robbery with rape.
Immediately after ROGELIO put his arms around MARITES and directed the knife at her neck, he
dragged MARITES to the vacant space in ABC Commercial Complex and removed her clothes.
These acts clearly showed that ROGELIO had in mind sexual gratification. This intent was further
established by the fact that when MARITES offered to give her ring to ROGELIO, the latter did not
take it and instead replied, "Mamaya na iyan"25 ; "That will come later on because I will give it back to
you but you have to follow me first."26 Again, when ROGELIO removed his pants, MARITES told him
to get her bag if he needed money; but ROGELIO replied "I do not need money."27 After giving vent to
his lustful desire, he snatched the victim’s shoulder bag, which was then on her right foot, and then
he ran away.28 Clearly then, the taking of personal property was not the original evil plan of
ROGELIO. It was an afterthought following the rape.

Significantly, the constitutive element of violence or intimidation against persons in robbery was not
present at the time of the snatching of the shoulder bag of MARITES. The force or intimidation
exerted by ROGELIO against the victim was for a reason foreign to the fact of the taking of the
bag.29 It was for the purpose of accomplishing his lustful desire. Hence, it cannot be considered for
the purpose of classifying the crime as robbery. Accused-appellant may thus be held liable for
simple theft only, in addition to the crime of rape.

The alibi and denial of ROGELIO cannot prevail over the testimony of MARITES positively
identifying him. MARITES had an adequate look at ROGELIO’s features during the assault. She
deliberately looked at ROGELIO’s face while he was pumping on top of her. She was determined to
never forget his face and to make him pay for the crime he has done. MARITES even emphasized in
her testimony that she had the occasion to see the tattoos in ROGELIO’s arms, his pimpled face and
the triple V prints on his shirt, which was later found in ROGELIO’s knapsack. She recognized him
as one who would pass by the Burger Machine outlet in Guadalupe twice a week. Indeed, it is the
most natural reaction for victims of criminal violence to strive to see the looks and faces of their
assailants and observe the manner in which the crime was committed. Most often the face and body
movements of the assailant create lasting impressions which cannot be easily erased from the
victim’s memory.30

It is doctrinally settled that alibi and denial are worthless and cannot prevail over positive
identification that is categorical, consistent and without any showing of ill-motive on the part of the
witness.31 Accused’s bare denial amounted to nothing more than negative and self-serving evidence
unworthy of weight in law.32 His defense of alibi will not prosper either for his failure to prove that he
was at some other place at the time the crime was committed and that it was physically impossible
for him to be at the locus criminis at the time.33 He claimed he was sleeping in Laperal Compound
which is just a 5-minute walk from the locus criminis. It was not therefore impossible for him to be at
the crime scene at the time the crime was committed.

However, the trial court erred in appreciating the aggravating circumstance of nocturnity or nighttime.
For nocturnity to be properly appreciated, it must be shown that it facilitated the commission of the
crime and that it was purposely sought for by the offender. By and of itself, nighttime is not an
aggravating circumstance. In the instant case, no sufficient evidence was offered to prove that
ROGELIO deliberately sought the cover of darkness to accomplish his criminal design. In fact, the
victim testified that there were streetlights and lights from the ABC Commercial Complex.34 That the
crime scene was dark is negated by the victim’s testimony that he was able to see the face of the
accused and even the "marking NFC and the nos. 555" in his dark shirt.35 Moreover, the aggravating
circumstance of nocturnity was not alleged in the information.36 Section 8 of Rule 110 of the Revised
Rules of Criminal Procedure, which took effect on 1 December 2000, requires that the complaint or
information must specify the qualifying and aggravating circumstances attending the commission of
the crime charged. This provision being favorable to the accused may be given retroactive effect.37

We do not subscribe to the assertion of the OSG that should rape be considered as a separate
offense, it would be qualified by the circumstance of "use of a deadly weapon" in the commission
thereof. A reading of the information discloses no allegation that the rape was committed with the
use of a deadly weapon. The circumstance "armed with a bladed weapon" alleged in the information
refers to the robbery. Hence, it cannot serve to qualify the crime of rape.

The issue of failure by the arresting officers to inform ROGELIO of his constitutional rights and to
afford him the benefit of counsel during the custodial investigation requires strong and convincing
evidence because of the presumption that the law enforcers acted in the regular performance of their
official duties.38 Besides, even granting arguendo that the constitutional requirements were not
observed, the same is of no significance because it does not appear that ROGELIO executed a
statement or confession.39 Then, too, as correctly pointed out by the OSG, the conviction of
ROGELIO was not on the basis of any extrajudicial confession but on the testimony of MARITES
and other evidence.

Now, on the penalty.

For the crime of rape, now punished under Article 266-A of the Revised Penal, as amended by R.A.
No. 8353 otherwise known as the Anti-Rape Law, which is the governing law in this case, the
penalty is reclusion perpetua. As to the civil aspect of the case, the trial court’s award of ₱200,000
as moral damages should be reduced to ₱50,000 conformably with the current jurisprudence. In
rape cases, moral damages are awarded without need of proof of the victim’s mental, physical, and
psychological sufferings, for these are too obvious to still require their recital at the trial by the
victim.40 MARITES is also entitled to an award of ₱50,000 as indemnity ex delicto.

For the crime of theft, the penalty shall be based on the value of the thing stolen. Except for the
money in the amount of ₱200, no evidence was presented by the prosecution as regards the value
of the other stolen personal properties. Hence, the basis of the penalty is ₱200.41 Under Article 309(4)
of the Revised Penal Code, any person guilty of theft shall be punished by arresto mayor in its
medium period to prision correccional in its minimum period if the value of the property stolen is over
P50 but does not exceed ₱200. Since there are neither mitigating nor aggravating circumstance, we
shall impose the penalty in its medium period,42 which is arresto mayor in its maximum period whose
duration is four (4) months and one (1) day to six (6) months. As to the award of ₱1,000 representing
the value of the personal properties taken from MARITES, the same should be reduced to ₱200
representing the actual cash contained in the stolen bag MARITES, there being no sufficient proof
as regards the actual value of the other stolen personal properties.
ACCORDINGLY, the 9 August 1999 Decision of the Regional Trial Court of Makati City, Branch 138,
in Criminal Case No. 99-026 is hereby AFFIRMED with MODIFICATIONS. As modified, accused-
appellant ROGELIO MORENO y REG is hereby declared guilty beyond reasonable doubt of two
separate crimes of rape and of theft and is hereby sentenced as follows:

1. For the crime of rape, to suffer the penalty of reclusion perpetua and pay complainant
MARITES FELIX the amounts of ₱50,000 as civil indemnity and ₱50,000 as moral damages;
and

2. For the crime of theft, to suffer the penalty of six (6) months of arresto mayor and pay the
victim the sum of ₱200.

No costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 93849 December 20, 1991

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
DICK ONG y CHAN, LINO MORFE y GUTIERREZ, RICARDO VILLARAN and LUCILA TALABIS,
accused, DICK ONG y CHAN, accused-appellant.

The Solicitor General for plaintiff-appellee.

Leoncio T. Mercado for accused-appellant.

MEDIALDEA, J.:

The accused, Dick Ong y Chan, Lino Morfe y Gutierrez, Ricardo Villaran and Lucila Talabis, were
charged with the crime of estafa in Criminal Case No. 44080 before the Regional Trial Court of
Manila, Branch 35. The information filed in said case reads, as follows (pp. 8-9, Rollo):

That in (sic) or about and during the period comprised between December 6, 1978 and
January 31, 1979, both dates inclusive, in the City of Manila, Philippines, the said accused,
conspiring and confederating together and helping one another, did then and there wilfully,
unlawfully and feloniously defraud the Home Savings Bank in the following manner, to wit:
the said accused Dick Ong y Chan, by means of false manifestations and fraudulent
representations which he made to the management of the Home Savings Bank, Aurea
Annex Branch, located at 640 Rizal Avenue, Sta. Cruz, in said City, to the effect that the
following checks, to wit:

NAME OF CHECK NUMBER PAYBLE DATE AMOUNT

TO

Metropolitan Bank & Trust 82508 Cash 1-30-79 P49,500.00

Co

Equitable Bank 27624961 do. do. 14,569.00

Phil. Bank of Comm T1907249 do. do. 59,600.00

-do- T1907249 do. do. 67,400.00

China Banking Corp. QCO86174A do. 1-31-79 69,850.00

Pacific Banking Corp. PCB 238056 do. 1-31-79 60,890.00

S

Producers Bank of the Phil. C 987955 do. do. 49,090.00

Equitable Banking 27624963 do. do. 14,965.00

Phil. Bank of Comm. 1915852 do. do. 63,900.00

-do- 1915855 do. do. 59,800.00

-do- 1915856 do. do. 65,880.00

or all in the total amount of P575,504.00, are good and covered with sufficient funds in the
banks, and by means of other similar deceits with the conspiracy of his co-accused Lino
Morfe y Gutierrez, Ricardo Villaran and Lucila Talabis, in their capacities as officer-in-charge,
branch accountant and bank branch cashier, respectively, of said bank (Home Savings
Bank), induced and succeeded in inducing the management of the said bank to accept said
checks as deposits, all the said accused well knowing that his (Dick Ong y Chan's)
representations and manifestations are false and untrue and were made solely for the
purpose of defrauding the said bank, and, in accordance with the conspiracy, his co-accused
Lino Morfe y Gutierrez, Ricardo Villara and Lucila Talabis, facilitated the opening of a
savings account in the name of accused Dick Ong y Chan and, thereafter, approved said
deposits; that on the strength of such deposits made and the opening of an account, the said
accused were able to withdraw the total amount of P575,504.00, which once in their
possession, with intent defraud, they thereafter wilfully, unlawfully and feloniously
misappropriated, misapplied and converted to their own personal use and benefit, to the
damage and prejudice of said Home Savings Bank in the said amount of P575,504.00,
Philippine Currency.

Contrary to law.

On October 15, 1979, the prosecution moved for the dismissal of the case, insofar as accused Lino
Morfe y Gutierrez is concerned, on the ground that after a reinvestigation, it was found that the
evidence against him is not sufficient to sustain the allegations contained in the information (p. 54,
Records). On October 31, 1979, the trial court granted the motion (p. 6 Records).

Upon being arraigned, the remaining three (3) accused entered the plea of not guilty to the crime
charged. After trial on the merits, the trial court rendered its decision on January 11, 1990, the
dispositive portion of which reads, as follows (p. 26, Rollo):

WHEREFORE, judgment is rendered: (1) pronouncing accused DICK ONG y CHAN guilty
beyond reasonable doubt, as principal, of ESTAFA defined under No. 2 (d) of Article 315 of
the Revised Penal Code, as amended by Republic Act 4885, and penalized under the lst
paragraph of the same Code as amended by Presidential Decree No. 818, and sentencing
said accused to RECLUSION PERPETUA; (2) ACQUITTING accused Lucila Talabis and
Ricardo Villaran, their guilt of (sic) the felony charged against them not having been
established beyond reasonable doubt; (3) ordering accused Dick Ong to pay the Home
Saving Bank and Trust Company the sum of P559,381.34 as partial reparation of the
damage caused to said Bank; (4) ordering forfeited in favor of the Home Savings Bank and
Trust Company the sum of P16,122.66 the positive balance remaining outstanding in
Savings Account No. 6-1981 of accused Dick Ong with, and in the possession of, said Bank
to complete the reparation of the damage caused by Dick Ong to the Bank; (5) ordering
accused Dick Ong to pay one-third (1/3) of the costs; and (6) ordering two-thirds (2/3) of the
costs charged de oficio.

SO ORDERED.
On February 15, 1990, the accused-appellant filed a motion for reconsideration. On March 22, 1990,
he filed a supplemental memorandum in support of the motion for reconsideration. On April 3, 1990,
said motion was denied for lack of merit (pp. 575-576, Records). Hence, the present appeal by Dick
Ong y Chan.

The facts of this case were summarized by the trial court, as follows (pp. 18-20, Rollo):

Accused Dick Ong was one of the depositors of the Home Savings Bank and Trust Company
in its Aurea Annex Branch at Rizal Avenue, Sta. Cruz, Manila, hereafter, to be referred to as
the Bank. He opened his savings account on December 6, 1978, under the Bank's Saving
Account No. 6-1981, with an initial deposit of P22.14 in cash and P10,000.00 in (a) check.

On the same date, December 6, 1978, without his check undergoing the usual and
reglamentary (sic) clearance, which normally takes about five working days, Dick Ong was
allowed to withdraw from his savings account with the Bank the sum of P5,000.00. The
corresponding withdrawal slip was signed and approved by Lino Morfe, then the Branch
Manager, and accused Lucila Talabis, the Branch Cashier.

That initial transaction was followed by other similar transactions where Dick Ong, upon
depositing checks in his savings account with the Bank, was allowed to withdraw against
those uncleared checks and uncollected deposits. The withdrawals were authorized and
approved by accused Ricardo Villaran and Lucila Talabis, sometimes jointly, sometimes by
aither (aic) of them alone, and at other times by one of them together with another official of
the Bank. But all of those uncleared checks deposited by Dick Ong prior to January 3, 1979
and against which he was allowed to withdraw were subsequently honored and paid by the
drawee banks. (TSN, Mar. 9, 1981, pp. 101-104; TSN, Mar. 18, 1981, pp. 144 -146.)

On January 30, 1979, Dick Ong issued and deposited in his savings account with the Bank
the following checks:

Drawee Bank Check No. Payee Amount

1. Metropolitan Bank & Trust Co. 82508 Cash P49,500.00

2. Equitable Bank 27624961 Cash 14,569.00

3. Phil. Bank of Comm. T-1907265 Cash 59,600.00

4. Phil. Bank of Comm. T-1907249 Cash 67,400.00

TOTAL P191,069-
00

Afterwards but before these checks could be cleared and the Bank could collect their
amounts from the drawee banks, Lucila Talabis allowed and approved the withdrawal of Dick
Ong against the amounts of said checks. (TSN, Mar. 18, 1981, pp. 47-48.)

On the following day, January 31, 1979, Dick Ong also issued and deposited in his savings
account with the Bank the following check;

Drawee Bank Check No. Payee Amount

 1. China Banking Corporation QC08617A Cash P69,850.00

2. Pacific Banking Corporation PCB238056 S Cash 60,890.00

3. Producers Bank of the Phil. C987955 Cash 49,090.00

4. Equitable Banking 27624963 Cash 14,965.00

5. Phil. Bank of 1915852 Cash 63,9000.009

Communications

6. Phil. Bank of 1915855 Cash 59,860.00

Communications

7. Phil. Bank of 1915856 Cash 65,880.00

Communications

TOTAL P384,435.00

Subsequently, but before said seven checks were cleared and the Bank had collected their
amounts, Lucila Talabis and then officer in charge of the Bank Grace Silao allowed and
approved the withdrawals of Dick Ong against the amounts of these seven checks.
(TSN, lbid., pp. 47-48.)

However, when the Bank presented those eleven checks issued and deposited by Dick Ong
on January 30, 1979 and January 3l, 1979 and against which he made withdrawals against
(sic) their amounts, to their respective drawee banks for payment, they were all dishonored
for lack or insufficiency of funds. (TSN, Jan. 7, 1981, pp. 90-101; TSN, May 8, 1981, pp. 74-
75.)

The accused-appellant neither took the witness stand to testify in his behalf, nor presented any
witness to testify in his favor. Instead, he offered the following documents (p. 20, Rollo):

1. Exhibit 1 — Ong. — The letter dated June 27, 1980 of the Central Bank Governor to all
banks authorized to accept demand deposits, enjoining strict compliance with Monetary
Board Resolution No. 2202 dated December 21, 1979, prohibiting, as a matter of policy,
drawing against uncollected deposits effective July 1, 1980.

2. Exhibit 2 — Ong. — The Memorandum of the Central Bank Governor dated July 9, 1980,
to all banks for their guidance, that Monetary Board Resolution No. 2202 dated December
21, 1979, prohibiting, as a matter of policy, drawing against uncollected deposits effective
July 1, 1980, covers drawing against demand deposits as well as withdrawals from savings
deposits.

3. Exhibits 3 — Ong. — and 3-a. — Clippings from the Bulletin Today issue on July 25, 1980
regarding on (sic) ban on DAUD (drawn against uncollected deposits) effective July 1, 1980,
and the one-day loan which replaced the DAUD arrangement.

4. Exhibit 4 — Ong. — The sworn statement of Lino Morfe before the METROCOM taken on
February 11, 1979.
 5. Exhibit 5 — Ong. — The letter dated July 6, 1979, of Lino Morfe to the Assistant Fiscal of
Manila, transmitting his (Morfe's) affidavit.

6. Exhibits 5-a — Ong to 5-a-3-Ong. — Affidavit of Lino Morfe sworn on June 28, 1979.

7. Exhibit 5-b — Ong. — The Bank's Memorandum dated January 31, 1979, to all Branch
Manager/Extension Office O.I.C. (sic) requiring them to furnish the Head Office of the Bank
every Monday and Thursday with a list of all "drawn against" and "encashment"
acommodations (sic) of P1,000.00 and above granted by the Branch during the week.

8. Exhibit 6 — Ong. — The sworn statement of accused Dick Ong.

On the other hand, accused Lucila Talabis admitted that she approved the withdrawals of the
accused-appellant against uncleared checks. However, she explained that her approval thereof was
in accordance with the instruction of then bank manager Lino Morfe; that this accommodation given
or extended to the accused-appellant had been going on even before she started giving the same
accommodation; that this was common practice in the bank; that she approved those withdrawals
together with one other bank official, namely, either the bank manager, the bank accountant, the
other bank cashier, or the bank assistant cashier; and that they reported those withdrawals against,
and the dishonor of, the subject checks always sending copies of their reports to the head office.

Accused Ricardo Villaran testified on his behalf that the accused-appellant was able to withdraw
against his uncleared checks because of the accommodations extended to him by bank officials Lino
Morfe, co-accused Lucila Talabis, Grace Silao, Precy Salamat, and Cora Gascon; that this practice
of drawing against uncollected deposits was a common practice in branches of the Bank; that on
December 14, 1978, the accused-appellant withdrew the sum of P75,000.00 against his uncleared
checks; that on December 21, 1978, the accused-appellant deposited several checks in the total
amount of P197,000.00 and withdrew on the same date the sum of P120,000.00; that on January
23, 1979, the accused-appellant again deposited several checks in the aggregate sum of
P260,000.00 and withdrew also on the same date, the amount of P28,000.00; and that he (Villaran)
approved these three withdrawals of the accused-appellant against his uncollected deposits.

In this appeal, the accused-appellant assigns the following errors committed by the trial court:

1) it concluded that the withdrawals against the amounts of the subject checks before clearance and
collection of the corresponding amounts thereof by the depository bank from the drawee banks is
deceit or fraud constituting estafa under Article 315, paragraph 2(d) of the Revised Penal Code, in
the total absence of evidence showing criminal intent to defraud the depository bank; and not a case
which is civil in nature governed solely by the Negotiable Instruments Law;

2) it stated that he issued and deposited the subject checks when he is not the issuer, maker, nor
drawer thereof but merely an indorser; hence, his liability, if any, is that of a general indorser under
the Negotiable Instruments Law;

3) it convicted him on mere presumption, without any evidence that he had prior knowledge of the
lack or insufficiency of funds in the drawee banks to cover the amounts of the subject checks; and

4) it failed to consider that a general indorser under the Negotiable Instruments Law warrants
payment of the value of the checks indorsed by him; no damage could have been suffered by the
depository bank because he had offered payment thereof.
To support the aforementioned assignment of errors, the accused-appellant alleges that based on
the testimonies of co-accused Lucila Talabis and Ricardo Villaran, he did not employ any deceit or
fraud on the Bank because the practice of deposit and withdrawal against uncleared checks and
uncollected deposits was tolerated by it. As soon as he learned of the dishonor of the subject
checks, he offered to pay the amounts thereof (see pp. 48-49, tsn of Felix Hocson, May 8, 1981) and
put up as security his property. The subject checks were not in payment of an obligation but were
deposited in his savings account. He was merely a general indorser of the subject checks and this
being the case, his obligations as such, if any, should be governed by Section 66 of the Negotiable
Instruments Law. * The subject checks were issued or drawn by his customers and paid to him. He
could not have had any knowledge as to the sufficiency of their funds in the drawee banks.

The Office of the Solicitor General disputes the allegations of the accused-appellant. According to it,
by reason of the accused-appellant's antecedent acts of issuing and depositing check and
withdrawing the amounts thereof before clearing by the drawee banks, which checks were later
honored and paid by drawee banks, he was able to gain the trust and confidence the Bank, such
that the practice, albeit contrary to sound banking policy, was tolerated by the Bank. After thus
having gained the trust and confidence of the Bank, the accused-appellant issued and deposited the
subject checks, the amounts of which he later withdrew, fully aware that he had no sufficient funds to
cover the amounts of said checks in the drawee banks. Contrary to the accused-appellant's
allegation, the trial court found that he issued and deposited the subject checks in his savings
account. As drawer of the subject checks, the accused-appellant had the obligation to maintain
funds in his current account in the drawee banks sufficient to cover the amounts thereof or, in case
of dishonor, to deposit within three (3) days from receipt notice of dishonor, the amounts necessary
to cover the check. The testimony of Felix Hocson, Senior Vice President and Treasurer of the Bank,
apart from being hearsay, does not prove that the accused-appellant made an offer to pay the
amounts covered by the subject checks. Even assuming arguendo that accused-appellant made an
offer to pay the amounts covered by the subject checks, said offer is not sufficient to rebut the prima
facie evidence of deceit. There is no showing that the accused-appellant deposited the amounts
necessary to cover the subject checks within three (3) days from receipt of notice from Bank and/or
the payee or holder that said checks have been dishonored. The damage suffered by the Bank
consists in its inability to make use of the P575,504.00 it had delivered to the accused-appellant.

We are convinced that the accused-appellant is innocent of the crime charged against him.

Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885,
provides:

Art. 315. Swindling (estafa) — Any person who shall defraud another by any of the means
mentioned hereinbelow shall be punished by:

..., provided that in the four cases mentioned, the fraud be committed by any of the
following means:

xxx xxx xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior
to or simultaneously with the commission of the fraud:

xxx xxx xxx

(d) By post-dating 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.

The following are the elements of this kind of estafa: (1) postdating or issuance of a check in
payment of an obligation contracted at the time the check was issued; (2) lack or
insufficiency of funds to cover the check; and (3) damage to the payee thereof (People v.
Tugbang, et al;, G.R. No. 76212, April 26, 1991; Sales v. Court of Appeals, et al., G.R. No. L-
47817, August 29, 1988, 164 SCRA 717; People v. Sabio, Sr., etc., et al., G.R. No. L-45490,
November 20, 1978, 86 SCRA 568). Based thereon, the trial court concluded that the guilt of
the accused-appellant has "been duly established by the required quantum of evidence
adduced by the People against (him)" (p. 22, Rollo). We shall confine Our discussion only on
the first element because there is no argument that the second and third elements are
present in this case. For an orderly discussion of this element, We will divide it into two (2)
parts: first, "postdating or issuance of a check," and second, "in payment of an obligation
contracted at the time the check was issued."

Inasmuch as the first part of the first element of Article 315 paragraph 2(d) of the Revised
Penal Code is concerned with the act of "postdating or issuance of a check," the accused-
appellant raises the defense that he was neither the issuer nor drawer of the subject checks,
but only an indorser thereof. Thus, his liability, if any, should be governed by the provision of
the Negotiable Instruments Law, particularly Section 66 thereof, supra. Also, he could not
have had any knowledge as to the sufficiency of the drawers' funds in their respective banks.
The Office of the Solicitor General contend's that the trial court found as a fact that the
accused-appellant issued the subject checks.

The contention of the Office of the Solicitor General is accurate only in part. In the trial
court's disquisition on the liability of the accused-appellant, it said (p. 22, Rollo):

There is no question that on January 30, 1979, accused Dick Ong issued or used
and indorsed, and deposited in his Savings Account No. 6-1981 with the Bank the
four checks ... .

There is likewise no dispute that on the following date, January 31, 1979, Dick
Ong issued or used and indorsed, and deposited in his savings account with the
Bank seven checks ... . (emphasis supplied)

On this subject matter, Fernando Esguerra, Intemal Auditor of the Bank and a witness for the
prosecution, testified that (pp. 101-103, tsn, January 7, 1981):

Court —

Q: You mentioned these checks, Mr. Witness. Did you or anybody for that
matter ever verify the actual depositors of these checks whether it is Mr. Dick
Ong himself.?

A: Yes, Your Honor. Our Vice-President for Bank Operations verified said
checks and found out that one of or rather, two of those checks are in the
account of Mr. Dick Ong but the other checks are not in his account.
Court —

Q: In other words, there are checks where the depositor himself was also Mr.
Dick Ong?

A: Could I go over the checks, Your Honor.

Q: Is it indicated there?

A: Yes, Your Honor, it.is.

Q: All right, go over the checks.

A: There is one check, Your Honor. It is a China Banking Corporation check

in the amount of P69,850.00 (Witness referring to Exhibit "Z").

Q: Now, why do you say that the current checking account or current account
was opened by Mr. Dick Ong himself.

A: Because he is the drawer of the check, Your Honor.(emphasis supplied)

Thus, the fact established by the prosecution and adopted by the trial court is that the
subject checks were either issued or indorsed by the accused-appellant.

In the case of People v. Isleta, et al., 61 Phil. 332, which was recently reiterated in
the case of Zagado v. Court of Appeals, G.R. No. 76612, September 29, 1989, 178
SCRA 146, We declared the accused-appellant, who only negotiated the check
drawn by another, guilty of estafa. This case of People v. Isleta, et al. was relied
upon by the trial court in its order dated April 3, 1990, which denied the accused-
appellant's motion for reconsideration based on the same defense. The trial court
erred in doing so. It must have overlooked the ratio decidendi of the aforementioned
case. We held the accused-appellant therein guilty of estafa because he "had guilty
knowledge of the fact that (the drawer) had no funds in the bank when he negotiated
the (subject) check" (at p. 334). In the present case, the prosecution failed to prove
that the accused-appellant had such knowledge with respect to the subject checks
that he indorsed. In applying Our decisions, it is not enough that courts take into
account only the facts and the dispositive portions thereof. It is imperative that the
rationale of these decisions be read and comprehended thoroughly.

It goes without saying that with respect to the subject checks wherein the accused-
appellant was the issuer/drawer, the first part of the first element of Article 315,
paragraph 2(d) of the Revised Penal Code is applicable. However, this statement will
lose its significance in Our next discussion.

Regarding the second part of the first element of Article 315, paragraph 2(d) of the
Revised Penal Code, the accused-appellant alleges that when he deposited the
subject checks in his savings account, it was clearly not in payment of an obligation
to the Bank. The Office of the Solicitor General misses this point of the accused-
appenant.
This single argument of the accused-appellant spells tilting the scale to his
advantage. In several cases, We were categorical that bank deposits are in the
nature of irregular deposits. They are really loans because they earn interest. All
kinds of bank deposits, whether fixed, savings, or current are to be treated loans and
are to be covered by the law on loans. Current and savings deposits are loans to a
bank because it can use the same (Serrano v. Central Bank of the Philippines, et al.,
G.R. No. 30511, February 14, 1980, 96 SCRA 96; Gullas v. Philippine National Bank,
62 Phil. 519; Central Bank of the Philippines v Morfe, etc., et al., G.R. No. L-38427,
March 12, 1975, 63 SC 114; Guingona, Jr., et al. v. The City Fiscal of Manila, et al.
G.R. No. 60033, April 4, 1984, 128 SCRA 577).

The elements of estafa in general are: (1) that the accused defrauded another (a) by
abuse of confidence, or (b) by means of deceit; and (2) that damage or prejudice
capable of pecuniary estimation is caused to the offended party or third person.
Aside from the elements that We have discussed earlier, in the crime of estafa by
postdating or issuing a bad check, deceit and damage are essential elements of the
offense and have to be established with satisfactory proof to warrant conviction (U.S
v. Rivera, 23 Phil. 383; People, et al. v. Grospe, etc., et al., G.R No. 74053-54,
January 20, 1988,157 SCRA 154; Buaya v. Polo etc., et al., G.R. No. 75079, January
26, 1989, 169 SCRA 471).

In this connection, the Office of the Solicitor General advances the view that by
reason of the accused-appellant's antecedent acts of issuing and depositing checks,
and withdrawing the amounts thereof before clearing by the drawee banks, which
checks were later honored and paid by the drawee banks, he was able to gain the
trust and confidence of the Bank, such that the practice, albeit contrary to sound
banking policy, was tolerated by the Bank. After thus having gained the trust and
confidence of the Bank, he issued and deposited the subject checks, the amounts of
which he later withdrew, fully aware that he had no sufficient funds to cover the
amounts of said checks in the drawee banks.

This view is not supported by the facts of this case. Rather, the evidence for the
prosecution proved that the Bank on its own accorded him a drawn against
uncollected deposit (DAUD) privilege without need of any pretensions on his part (pp.
7-8, supra). Moreover, this privilege was not only for the subject checks, but for other
past transactions. Fernando Esguerra and Felix Hocson even testified that in some
instances prior to July 1, 1980, especially where the depositor is an important client,
the Bank relaxed its rule and internal policy against uncleared checks and
uncollected deposits, and allowed such depositor to withdraw against his uncleared
checks and uncollected deposits. Admittedly, the accused-appellant was one of the
important depositors of the Bank (pp. 24-25, Rollo). Granting, in gratia argumenti,
that he had in fact acted fraudulently, he could not have done so without the active
cooperation of the Banks employees. Therefore, since Lucila Talabis and Ricardo
Villaran were declared innocent of the crimes charged against them, the same
should be said for the accused-appellant (see People v. Jalandoni, G.R. No. 57555,
May 30, 1983, 122 SCRA 588). True it is that the Bank suffered damage in the
amount of P575,504.00 but the accused-appellant's liability thereon is only civil.

One additional statement made by the trial court in its decision requires correction. It
said that "[t]he circumstances that the drawer of a check had insufficient or no funds
in the drawee bank to cover the amount of his check at the time of its issuance and
he did not inform the payee or holder of such fact, are sufficient to make him liable
for estafa" (p. 23, Rollo). This statement is no longer controlling. We have clarified in
the case of People v. Sabio, Sr., etc., et al., supra, that Republic Act No. 4885 has
eliminated the requirement under the old provision for the drawer to inform the payee
that he had no funds in the bank or the funds deposited by him were not sufficient to
cover the amount of the check.

We, therefore, find that the guilt of the accused-appellant for the crime of estafa
under Article 315, paragraph 2(d) of the Revised Penal Code has not been proven
beyond reasonable doubt. However, We find him civilly liable to the bank in the
amount of P575,504.00, less the balance remaining in his savings account with it (p.
26, Rollo), with legal interest from the date of the filing of this case until full payment.

ACCORDINGLY, the decision and order appealed from are hereby SET ASIDE. The
accused-appellant is ACQUITTED of the crime charged against him but ordered to
pay the aforementioned amount. No costs.

SO ORDERED.

Narvasa, C.J. (Chairman), Cruz, Feliciano and Griño-Aquino, JJ., concur.