PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. CARLOS P. GO, ACCUSED-APPELLANT.
DE LOS SANTOS, J.:
“That in or about the period comprised from April 14, 1997 up to June 21, 1998, in Quezon City, Philippines, the said accused, being then appointed as PCSO On-Line Lottery (LOTTO) agent and as such is authorized to sell and collect lottery tickets for and in behalf of the PCSO, did then and there wilfully, unlawfully and feloniously defraud the PCSO and its beneficiaries represented by Reynaldo Martin, in the following manner, to wit: said accused, got and received in trust from the said offended party, PCSO lottery tickets for the purpose of selling the same on commission basis, under the express obligation on the part of the said accused of turning over the proceeds of the sale to the PCSO, but said accused, once in possession of the said lottery tickets, far from complying with his obligation as aforesaid, with intent to defraud, unfaithfulness and grave abuse of confidence, failed and refused and still fails and refuses to fulfill his aforesaid obligation despite repeated demands made upon him to do so and instead misapplied, misappropriated and converted the proceeds thereof, to his own personal use and benefit, to the damage and prejudice of the said offended party in the amount of P5,102,235.00 Philippine Currency.
“Contrary to law.” [1]
The accused pleaded not guilty to the crime charged and trial ensued. Private complainant Philippine Charity Sweepstakes Office (PCSO) was represented by the Office of the Government Corporate Counsel before the trial court. PCSO is the government agency authorized under Republic Act No. 1169, as amended, to hold and conduct the Philippine On-Line Lottery, more popularly known as the Lotto.
The antecedent facts show that accused Carlos P. Go filed an application[2] to be an agent of a lotto outlet through a letter received at the Office of the PCSO Chairman and General Manager Manuel Morato on June 27, 1996. Accused also submitted a lease contract of a building known as Aurora Merchandising located at the Tarlac Public Market and its location map as a proposed site of his lotto operation.[3]
In an Evaluation Report dated October 10, 1996, Gen. Rogelio Martin, the Officer-In-Charge for PCSO Angeles City District wrote Chairman Morato that a site inspection of Go’s proposed lotto outlet was conducted, that it met the Criteria for Agency Location and he recommended the approval for terminal installation.[4] On January 22, 1997, Chairman Morato approved the application and informed Mr. Edgardo Ibañez, Vice President for Technical Services of the Philippine Gaming Management Corporation (PGMC), to implement the terminal installation of Go’s outlet.[5] Based on the Rules and Regulations governing the On-Line Lottery, a terminal is defined as a device authorized by the PCSO to function in an on-line, interactive mode with the PCSO on-line lottery computer system, for the purpose of issuing lottery tickets and entering, receiving and processing lottery transactions, including purchases, voiding purchases, validating tickets and transmitting report.[6]
On April 14, 1997, accused Carlos P. Go, with Agency No. 55-04-02- 3, began to operate his lotto outlet. It was agreed that he remit 95% of his collections to PCSO while retaining 5% as his commission. His initial remittance was paid directly to the collecting officer of the PCSO Treasury Department in Manila.[7] He started filling out the “Agent’s Settlement Form”[8] on April 23, 1997. The forms contained Go’s “Agency Number” and the weekly summary report of sold, cancelled and claimed winning tickets. These forms were signed by Go and his representatives and were received by PCSO Angeles District Office. [9]
Earlier, on December 16, 1996, a Memorandum of Agreement[10] was signed by the PCSO and the Land Bank of the Philippines authorizing the PCSO sales agents to deposit the lotto ticket proceeds by either cash, cashier’s or manager’s checks to the account of PCSO maintained at Land Bank. Pursuant to such agreement, accused was required to remit his collection through the Land Bank Angeles City Branch where PCSO opened a sub-account with his name as its agent.
From December 1997 to May 1998, accused failed to make good his obligation on certain weeks since some of his personal checks deposited at the Land Bank Tarlac Branch covering his remittances were dishonored for insufficient funds. On June 16, 1998, the Chief Lottery Operations Officer of PCSO Pampanga Provincial District Office Reynaldo Martin sent accused a demand letter for the amount of P4,833,690.70 still unremitted as of May 31, 1998.[11] For the period of June 1998, accused failed to remit the sales proceeds in the amount of P389,982.60. Subsequently, the PCSO issued a memorandum recommending the suspension of the accused as its authorized on-line lottery agent and the immediate switch-off of his lotto terminal. [12]
On July 20, 1998, in behalf of the PCSO, the Office of the Government Corporate Counsel sent a final demand letter to accused Go.[13] PCSO’s records revealed that accused’s Tarlac outlet collected a total amount of P34,516,733.00 from the lotto ticket sales since April 14, 1997 until June 21, 1998. However, out of the said amount, accused failed to remit the amount of P5,102,235.00 as of July 15, 1998 despite demands by the PCSO.[14] In a letter dated August 10, 1998, Land Bank Department Manager III Rufino S. Cortez informed Mr. Reynaldo Martin that the accused deposited, for the account of the PCSO, nine (9) checks which were dishonored and returned to Go for having been drawn against insufficient funds (DAIF).[15] Due to the accused’s failure to fulfill his obligation, the PCSO filed the complaint at the Office of the City Prosecutor in Quezon City.
During trial, Reynaldo Martin testified that the standard procedure for application of lottery agents was done away with respect to accused Go because he was referred by one Captain Jun Santiago of the Presidential Security Group who was a close-in security officer of President Ramos.[16] That was the reason why Go was not made to sign a written agency contract with the PCSO. It was upon his review of the Agent’s Settlement Forms against the bank statements that he discovered that some of the accused’s remittances were covered by personal checks which were later dishonored for insufficient funds. It was not detected earlier since accused regularly submits the Forms together with valid deposit slips from Land Bank. PCSO presumed that these checks were funded and in the form of either cashier’s or manager’s checks per MOA with Land Bank.[17] However, these personal checks were returned to accused Go instead of being forwarded to PCSO.[18] PCSO and its beneficiaries incurred losses due to accused’s continued failure to pay remittances despite demand.
On March 13, 2001, accused-appellant filed a motion for leave to file his demurrer to evidence. In his demurrer to evidence,[19] he prayed for the dismissal of the complaint on the grounds that the alleged offense was not committed within the territorial jurisdiction of the Quezon City trial court and that he was not an agent of PCSO but an independent retailer of lotto tickets, to which the Court a quo denied in an Order dated July 25, 2001.[20]
During trial, accused testified that he was able to obtain the lotto business by approaching Captain Francisco Santiago of the Presidential Security Group who then brought the matter to Chairman Morato. He (Go) was ordered to apply at the PCSO and to submit an application letter with a lease contract and a vicinity map. He was simply told that his site was inspected and approved. He did not receive or sign any documents pertaining to the rules and regulations on on-line lottery allegedly given to lotto operators. He started operating the outlet in April 1997. He had a verbal agreement with the OIC of the PCSO Regional Branch in Pampanga that 95% of the proceeds would be paid to PCSO and 5% would go to him as his profit for selling lottery tickets. He deposited the daily proceeds to his personal account and, as per verbal agreement, deposited 95% of the proceeds every Friday with the Land Bank Tarlac Branch for account of PCSO. The machines were actually operated by his two employees, Agnes Lacsamana and Shalimar, who are now abroad.[21]
He admitted that it was the PCSO which supplied him the tickets but it was the PGMC which actually installed the machines, entrusted them to him and later retrieved them from his store. On January 20, 1998, the Tarlac City Public Market was burned, his lotto outlet was ransacked and the collection of P100,000.00 for that day was taken away. He was informed by the PCSO that he would still be liable for the collections he lost. In November 1997, he started to look for leaders in his campaign for the position of a board member in Tarlac for the May 1998 elections. He was busy campaigning and was not able to monitor his business operations. He admitted that he drafted the application letter to be an agent of a lotto outlet but, at that time, he thought it meant he would just be a seller of lottery tickets.[22]
On September 7, 2004, the trial court convicted accused, thus:
“xxx xxx xxx
“Although no agency agreement was executed by and between PCSO and the accused, there is no reason to doubt that accused was made and considered an agent and he acted as an agent of the PCSO up to the termination of his contract. The absence of a written agreement does not negate the existence of an agency contract. Article 1869 of the Civil Code provides that ‘agency may be express or implied from the acts of the principal, from his silence or lack of action or his failure to repudiate the agency xxx‘ Article 1870 of the same code provides that ‘acceptance by the agent may also be express or implied from his acts which carry out the agency or from his silence or inaction according to the circumstances.’
“The offense charged falls under Article 315, paragraph 1( b) of the Revised Penal Code. The elements of the offense are as follows:
- That money, goods, or other property be received by the offender in trust or on commission, or for administration or under any other obligation involving the duty to make delivery of, or to return the same;
- That there be misappropriation or conversion of any such money or property by the offender or denial on his part of such receipt;
- That such misappropriation or conversion or denial is to the prejudice of another;
- That there is demand made by the offended party to the offender (Tubo vs. People, et. al., 101 Phil 114)
“The above elements are all present in the instant case. Thus, it was proven that accused Go received in trust and on commission lotto tickets with obligation to remit to the PCSO 95% of his collections. Accused misappropriated, misapplied or converted the amount to his own use and benefit to the prejudice and damage of his principal, the PCSO, and that accused failed and refused to remit the amount despite demands by the PCSO (Exh[s]. ‘I’ and ‘O’).
“The contention of the accused that he was an independent retailer of lotto tickets is not supported by the evidence. He was treated as an agent throughout the whole period of his dealings with the PCSO. There is no evidence that the PCSO ever operated through independent retailers.
“Accused Go vigorously contends that the instant case does not fall within the jurisdiction of this Court as all the transactions he made with the PCSO were done outside Quezon City. He points out that the Agent’s Settlement Form and the receipts of his payments (Exhs. “3” to “62”) were all addressed at San Marcelino St., Ermita, Manila. The Court finds no merit on this posture of the accused. While indeed the address of the PCSO main office was in Manila when he started his operations, the PCSO office was moved to E. Rodriguez St., Quezon City sometime in November 1997. The use of old forms by the PCSO collecting agents will not alter the fact that during the later part of his operations, the PCSO main office was already located in Quezon City. The defense’ own evidence (Exhibit “I”) indicate that the Office of the PCSO is located in Quezon City and the venue of litigations between the PCSO and its agents shall be in Quezon City. Moreover, the Office of the Government Corporate Counsel which made the final demand upon the accused is located in Quezon City. In short, the violation of complainant’s right committed by the accused extended not only to all the places in Central Luzon where parts of the transaction were done, but also to Quezon City where accused failed to settle his obligations. This in essence is the ruling of the Supreme Court in the case of Barrameda vs. Court of Appeals and Lolita Watanabe (G.R. 96428, Sept. 2, 1999) where part of the offense happened in Japan, but demand was made upon the accused in Pasay City when she arrived from Japan. It was held that that the Pasay City RTC had jurisdiction to try the case.
“The penalty for the crime of estafa by misappropriation or conversion by an agent, is defined in Article 315 of the Revised Penal Code as follows:
‘The penalty of prision correcional in its maximum period to prision mayor in its minimum period if the amount of the fraud is over 12,000 but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos, but the total penalty which may be imposed shall not exceed twenty years. In such case, and in connection with accessory penalties which may be imposed and for the purpose of the other provisions of this code, the penalty shall be termed prision mayor or reclusion temporal as the case may be.’
“In addition to the Criminal liability, the accused shall be civilly liable to the extent of P5,102,235.00 less any payment he may have made after the filing of the instant case.
“WHEREFORE, premises considered, judgment is hereby rendered finding the accused Carlos Go guilty beyond reasonable doubt of the crime of estafa defined and penalized under Article 315, paragraph 1(b) of the Revised Penal Code and hereby sentences him to suffer the penalty of twelve (12) years of prision mayor, as minimum, to twenty (20) years of reclusion temporal, as maximum and to indemnify the PCSO the amount of P5,102,255.00 less any payment he may have made after the filing of this case.
“SO ORDERED.”[23]
Hence, this appeal where appellant raises the following errors allegedly committed by the Court a quo:
“A. The Trial Court committed reversible error in finding that the instant case is within its territorial jurisdiction.
“B. The Trial Court committed reversible error in finding that the elements of estafa, particularly those stated in Article 315, paragraph 1(b) of the Revised Penal Code, exist in the case at bar.”[24]
Appellant insists that he was tried in the wrong venue and must be acquitted on the ground of lack of jurisdiction. Rule 110 of Section 15 (a) of the Revised Rules of Criminal Procedure provides that a criminal action shall be instituted and tried in the territory where the offense was committed or where any of its essential ingredients occurred. However, the prosecution failed to present any evidence that he transacted with the PCSO in Quezon City or that any of the crime’s elements occurred therein since the PCSO’s head office at the time of the said transactions was at 970 San Marcelino St., Ermita, Manila. His lotto outlet and the banks where he deposited payments are all located in Tarlac City. He was not in Quezon City at the time demand was made by the Office of the Government Corporate Counsel.
Accused-appellant argues that the prosecution failed to prove beyond reasonable doubt that he is liable for estafa. He insists that he is a mere independent retailer who bought tickets from PCSO and resold the same to the public at a greater price. His business relationship with PCSO is different from the other lotto operators who were subjected to the usual contracts and agreements. There was no misappropriation since he used his own money in operating the outlet and PCSO makes him liable for any loss of sales proceeds. It was the PGMC and not the PCSO which installed the lotto machines. There was no written agency agreement between PCSO and him as there was even no response letter accepting his offer to operate a lotto business. Appellant operated his lotto business only from April 1997 to June 14, 1998 or way before the Agency Agreement form was implemented among lotto operators. Hence, its terms and conditions are not applicable to him.
Appellant also asserts that PCSO’s witness Reynaldo Martin even denied that the signatures appearing in the Agent’s Settlement Forms belonged to appellant. The alleged bounced checks issued as payments to PCSO were not even signed by him. At most, appellant is merely civilly indebted to PCSO for the monetary amount that he allegedly failed to deliver to PCSO absent any showing that he had malicious intent to renege from the same. There was no proof that he intended to defraud PCSO since he continued to pay the latter up to the period his operations were stopped. Generally, in the offense of estafa, the elements of malice and fraud are never presumed and should be proven. Further, it is a matter of humanitarian principle that no person shall be imprisoned for debt.[25] He started failing to meet his obligations to PCSO after the Tarlac Public Market was gutted by fire and his lotto outlet was ransacked.[26]
In its Appellee’s brief, the Office of the Solicitor General asserts that the Quezon City trial court has jurisdiction as alleged in the information. The offended party’s principal place of business is located in Quezon City which is of judicial notice and that demand was made by counsel whose office is located in Quezon City.
It argues that all the elements of estafa were proven since an agency agreement existed between appellant and PCSO. As an agent of PCSO, appellant had physical and juridical possession of the lotto tickets. He merely collected and held the sales proceeds of lotto tickets in trust while receiving 5% commission for selling them. The PCSO retained ownership of the tickets while it was the public who bought the lotto tickets. Misappropriation may be proven by either direct or circumstantial evidence. It posits that appellant failed to deliver the funds held in trust and, instead, deposited worthless checks to the PCSO Land Bank account. Despite demand, he failed to settle his obligation or render an accounting causing damage and prejudice to PCSO in the amount of P5,102,235.00.[27]
The appeal is bereft of merit.
The crime of estafa is a continuing or transitory offense which may be prosecuted at the place where any of the essential elements of the crime took place.[28] One of the essential elements of estafa is damage or prejudice to the offended party. PCSO Pampanga acts as collecting arm which then remits payments to its main office in Quezon City. Since the appellee PCSO has its principal office at E. Rodriguez Avenue in Quezon City, the Quezon City trial court has jurisdiction over the case.
The prosecution need only establish the concurrence of the following elements in this kind of estafa through misappropriation or with abuse of confidence, to wit: (1) that money, goods, or their personal property be received by the offender in trust, or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return the same; (2) that there be misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (3) that such misappropriation or conversion or denial is to the prejudice of another; and (4) that there is a demand made by the offended party to the offender.
Despite the absence of an expressly written contract of agency, We agree with the Court a quo that there is no reason to doubt that appellant was made and considered an agent and that he acted as an agent of the PCSO up to the time his lotto terminal was switched off. Agency may be express or implied from the acts of the principal, from his silence or lack of action or failure to repudiate the agency whereas acceptance by an agent may also be express or implied from his acts which carry out the agency or from his silence or inaction according to the circumstances.[29]
The PCSO’s acts of inspecting the proposed outlet, installing the necessary machinery at the proposed outlet and supplying the lottery tickets are implied acts of constituting the appellant as its agent in the on-line lottery operation. It also exercised its power of control by suspending and switching off appellant’s terminal. Accused was also proven to have applied as an agent of a lotto outlet and was deemed to have accepted such agency based on his acts of operating the lotto outlet upon installation of the machines, filling out and signing the Agent’s Settlement Forms and remitting the proceeds to Land Bank sub-account according to the schedule required by PCSO. A scrutiny of the Agent’s Settlement Form, Exhibit “F”, shows that the agent’s name is Carlos Go and the agent’s signature appearing therein is similar to the signature of the accused appearing in his letter where he signified his intention to be a lotto agent.[30]
Contrary to appellant’s assertion that he is an independent retailer, We find that accused-appellant, as an accredited lotto agent, was authorized to sell the PCSO’s on-line lottery tickets to the public at large, entrusted to receive and collect the sales proceeds with the obligation to deliver the same to PCSO although he is entitled to retain 5% thereof as his commission. As its lotto agent, he failed and refused to remit the sales proceeds which properly belonged to his principal, the PCSO, despite the latter’s written demands.
A perusal of the PCSO’s demand letter to accused-appellant as well as bank statements reveals that no remittances were credited to appellee’s account due to the dishonor of appellant’s insufficiently funded personal checks covering weekly remittances for the periods of December 8-14, 1997; January 5-11, 1998; February 9-15, 1998; March 9-15, 1998; March 31-April 5, 1998; April 27, 1998-May 3, 1998; May 4 – 10, 1998; May 18- 24, 1998 and May 25 – May 31, 1998. The said documents belie his allegation that he started to fail in his obligation to pay on January 20, 1998 when the Tarlac Public Market was burned and his lotto outlet ransacked. Despite demand, appellant failed to render an accounting or make any cash or check deposits to cover the dishonored checks.
In the face of appellee’s documentary evidence, such as appellant’s application letter, computation of shortage and demand letters addressed to accused, appellant merely denied the existence of any agency agreement between him and the PCSO, alleged the lack of jurisdiction of the Quezon City trial court and asserted that he regularly remitted payments to PCSO as shown by the Agent’s Settlement Forms. He offered no clarification concerning the unremitted collections.
Accused-appellant insists that the prosecution failed to show malice and fraud to make him liable for estafa. He claims he had no malicious intent to defraud appellee and is merely civilly indebted for the monetary obligation he failed to deliver.
We disagree. As explained by the Supreme Court in the case of Filadams Pharma, Inc. vs.. Court of Appeals[31], the essence of estafa under Article 315 (1)(b) of the Revised Penal Code is the appropriation or conversion of money or property received, to the prejudice of the owner thereof. It takes place when a person actually appropriates the property of another for his own benefit, use and enjoyment. The failure of the accused to account, upon demand, for the funds or the property held by him in trust is circumstantial evidence of the conversion of the property. Justice Vitug, in the case of Dayawon vs. Badilla[32], explained that the criminal intent to defraud need not be established since it is the “breach of confidence or infidelity in the conversion or diversion of trust funds that takes the place of the usual element, in other forms of estafa, of fraud or deceit.”
Applying the Indeterminate Sentence Law, the minimum term of appellant’s indeterminate sentence should be lowered by one degree than the penalty prescribed by the Code and the maximum penalty should be the penalty that can be properly imposed in view of the attending circumstances. Since Article 315 (1)(b) provides that the total penalty which may be imposed shall not exceed twenty years, the trial court correctly imposed twenty years of reclusion temporal as the maximum of his penalty. However, the minimum term should have been within the range of prision correccional in its minimum and medium periods.
WHEREFORE, premises considered, the appeal is hereby DISMISSED and the assailed decision is hereby AFFIRMED with the MODIFICATION that the accused-appellant is hereby sentenced to an indeterminate penalty of Four (4) years and Two (2) months of prision correccional as minimum, to twenty (20) years of reclusion temporal as maximum. The accused-appellant is also ordered to indemnify the Philippine Charity Sweepstakes Office the amount of P5,102,235.00 less any payment he may have made after the filing of this case.
SO ORDERED.
Lampas-Peralta and Dimaranan-Vidal, JJ., concur.
[1] Rollo, pp. 6-7
[2] Exhibit “B”; Records, p.103
[3] Exhibits “B-2” and “B-3”; Records, pp. 104-105
[4] Exhibit “C”; Records, p.106
[5] Exhibit “D”; Records, p. 107
[6] Exhibit “E-1”; Records, p. 109
[7] Exhibit “F-1”; Records, p. 117
[8] Exhibit “F”; Records, p. 116
[9] Exhibits “3”-“62”; Records, pp. 310-380
[10] Exhibit “H”; Records, pp. 143-152
[11] Exhibit “I”; Records, p. 153
[12] Exhibit “K”; Records, p.155
[13] Exhibit “O”; Records, p. 168
[14] Records, p. 7
[15] Exhibit “N”; Records, p. 158
[16] TSN July 18, 2000, p. 4
[17] ibid, p. 10
[18] TSN, May 30, 2000, pp. 8-14
[19] Records, pp. 186-
[20] Records, pp. 230-231
[21] TSN September 6, 2002, pp. 2-5
[22] TSN March 28, 2003, pp. 12-17
[23] Decision, Rollo, pp. 67-69
[24] Appellant’s Brief; Rollo, p. 29
[25] ibid, Rollo, pp. 43-60
[26] Reply Brief; Rollo, p. 124
[27] Appellee’s Brief; Rollo, pp. 96-105
[28] Buaya vs. Polo, 169 SCRA 471, 475 (1989)
[29] Articles 1879 and 1870, Civil Code of the Philippines
[30] Records, p. 116
[31] 426 SCRA 460, 468 (2004)
[32] 339 SCRA 702, 706(2000)