G.R. No. 20995. October 30, 1923

The provincial fiscal of Cebu filed with the court below the following
information:

“The undersigned accuses Chong Chuy Limgobo and Lim Kan of the crime of fraud
committed as follows: That in or about the month of February, 1922, in the
municipality of Cebu, Province of Cebu, the accused Chong Chuy Limgobo, being
the owner of a soap factory and a merchant by profession, with a commercial
establishment at No. 114, Juan Luna Street, city of Cebu, Province of Cebu, P.
I., did willfully, intentionally, maliciously, and feloniously abscond with all
of his property, simulating a conveyance and transfer of all his business,
including a shed and soap factory, in favor of one Lim Kan, who is a brother of
the accused Chong Chuy Limgobo, for the sole purpose of defrauding his lawful
creditors who, by reason of said simulation of sale, were prejudiced in their
interests, because from the date of said fraudulent conveyance, it was, and
would be, impossible for them to collect their respective credits against said
Chong Chuy Limgobo, due to his absconding with all of his property and his
actual condition of fictitious and meditated insolvency. That the accused Lim
Kan has directly cooperated, as principal, in the commission of this crime by
accepting the conveyance of the property and business of his brother and
coaccused Chong Chuy Limgobo, with knowledge that the same was fictitious and
fraudulent and was made for the purpose of defrauding the latter’s lawful
creditors. Contrary to article 523 of the Penal Code.”

To this information the attorney for the defendants interposed a demurrer,
alleging that article 523 of the Penal Code, for which the defendants are
prosecuted, has been repealed by section 71 of Act No. 1956 known as the
Insolvency Law.

After a hearing upon the demurrer, the lower court, without deciding the
question whether or not said article 523 of the Penal Code was in force,
dismissed the information, holding that the facts alleged therein do not
constitute the crime defined in article 523 of the Penal Code, on the ground
that in order for said article to be applicable and for the said crime to exist
as defined therein, it is necessary that the accused should depart and
physically conceal his property, and that real property such as that mentioned
in the information could not be the subject-matter of fraudulent
concealment.

From this ruling of the court below the prosecuting attorney took this appeal
and now submits to this court for consideration the following: (a) That
the lower court erred in holding that the facts alleged in the information do
not constitute the crime of concealment, defined in article 523 of the Penal
Code, on the ground that in order for this article to be applicable and the
concealment to exist, it is necessary that the accused should depart and
physically conceal his personal, not real, property, such as that in question;
and (b) that the lower court erred in sustaining the demurrer to the
information filed by defendants’ counsel and dismissing said information.

According to a decision of the supreme court of Spain of June 10, 1885, the
crime of fraudulent concealment penalized by article 536 of the Code of Spain,
which is in accord with article 523 of the Philippine Code, is committed by any
means whereby any property of the debtor is made to disappear, for the purpose
of evading the fulfillment of the obligations and liabilities contracted with
one or more creditors to the damage of the latter, it not being an essential
element of said crime that the debtor should depart or abscond in some way at
the same time that he abstracts said property, because neither the meaning of
the word “concealment” authorizes such an interpretation, nor is it in line with
the procedures provided in the compiled Spanish legislation. Neither is it
necessary that the property concealed be personal property, so that it may be
physically concealed, as was held by the supreme court of Spain in the
decisions, among others, of October 29, 1886, April 6 1897, and February 28,
1906.

The Attorney-General maintains that there is no conflict between section 71
of the Insolvency Law and article 523 of the Penal Code. The former requires for
its application that the criminal act should have been committed after the
institution of insolvency proceedings; whereas, the latter contains no such
requirement, nor makes it necessary that the defendant should have been adjudged
bankrupt or insolvent, as was held by the supreme court of Spain in a decision
of March 13, 1882, in which it is held that article 536 of the Code of Spain
from which 523 of ours was taken, does not require that the concealment be
attended by the circumstance of the accused being bankrupt or insolvent in order
that he may be convicted and punished for this crime.

We agree with the Attorney-General that section 71 of the Insolvency Law and
article 523 of the Penal Code are not incompatible, and this being the case, we
are of the opinion that the facts alleged in the information constitute the
crime defined in said article 523 of the Penal Code.

In view of all of the foregoing, the order appealed from is revoked, and the
demurrer to the information overruled and it is ordered that the record be
remanded to the court of origin for further proceedings in accordance with law.
So ordered.

Johnson, Street, Malcolm, Avanceña, Johns, and
Romualdez, JJ., concur.