THE PEOPLE OF THE PHILIPPINES, PLAINTIFF AND APPELLANT, VS. PASTOR SUPNAD, ET AT., ACCUSSED AND APPELLEE.

This was originally an appeal interposed by the State, from the
decision of the Court of First Instance of Manila, dismissing the
above-entitled case, which the Court of Appeals certified to this
Court, because the issues raised are purely legal.

On June 5, 1959, the Office of the City Fiscal filed an Information
charging Pastor L Supnad and Brigida M. Ungos of Violation of Par. 2,
of Article 316, of the Revised Penal Code, worded as follows—

. “That on or about the 2nd day of’ December 1958
and for some time prior and subsequent thereto, in the City of Manila,
Philippines, the said accused, conspiring and confederating
together and helping each other, did then and there willfully,
unlawfully and feloniously defraud Teresa Bautista in the following
manner, to wit: tooth said accused, well knowing that the 2-story
residential house of strong materials owned by them located on Block
No. Sec. 1, Barrio Fugoso, at 958 Wagas St., corner of Callejon
Hinahon, Barrio Fugoso, in said City, has been mortgaged by them to
said Teresa Bautista for P2,500.0O and well knowing that the same
cannot be encumbered, alienated or disposed of during the existence of
said mortgage without the prior written consent of said Teresa
Bautista, willfully, unlawfully and feloniously and knowingly sold,
transferred and conveyed the same house by way of absolute sale to one
Daraian Vasquez for £7,000,00 by making it appear to the latter that
the same is free from all liens and encumbrances of whatever nature,
thereby defrauding the said Teresa Bautista in the aforesaid sum of
P2.500.00 Philippine currency.”

After the arraignment, to which both pleaded not guilty, the
accused, in a manifestation, dated March 28, 1960, raised the issue of
prejudicial question. The trial court ordered the parties to submit
memoranda on such issue. In the memorandum filed by counsel for the
accused on April 7, 1960, he contended, among others, that the court
should indefinitely suspend the case, because in Civil Case No. 39224,
entitled Teresa Bautista and Eduardo Dava, plaintiffs vs. Pastor
Supnad, Brigida Ungos and Damian Vasquez, defendants” which was decided
by the CFI of Manila, said Court made the following observations.

“* * *The fact remains, however, that when bamian
Vasquez bought the house, he1 knew of the existence of the mortgage in
favor of Teresa Bautista and it is tut just and fair that he should pay
the amount,of the indebtedness because he bought-said property, fully
kn’owing that Pastor L. Supnad had obtained a loan In the cum of
P2,500.00 from Teresa Bautista with the said house as security. It is
true that Damian Vasquez, on the witness stand, denied having met
Teresa Bautista, as alleged by her, but the Court nevertheless, gives
full credit to her testimony.”

Accused further argued that the above findings, which are now the
issues raised in the appeal to the Court of Appeals, in the civil
case,, constitute a prejudicial question affecting the criminal case.
On May 7, 1960, .the trial court rendered judgment, the pertinent
portions of. which read—

“There is no allegation that any fraud or
misrepresentation’ was perpetrated on the buyer Damian Vasquez or’ that
the latter suffered any damage.

The Court of Appeals has held
that for the class of estafa under Article, 316, paragraph 2, of the
Revised Penal Code to exist, it is, essential that the fraud or deceit
he practiced on the vended at the time of the sale. The penal provision
in question docs not comprehend a supposed misrepresentation on the
mortgagee of the property. It was reasoned out that if the mortgage is
recorded, thb party who would be deceived and would suffer damage,
would be the vendee and not the mortgagee or encumbrancer. If, on the
other hand, the mortgage is not recorded, damage to the mortgagee may
or may not arise.  In case there is nio damage, there, is no crime of
estafa as the element of damage is lacking. If there is damage, the
liability of, the vendor only arises if he committed fraud or practiced
deceit upon the mortgagee (People vs. Mariano, CA-50 Off. Gaz., Supp.
4, p. 21), The misrepresentation or fraud must consist in making the
complainant believe that the property was free from encumbrance when
such is wot the case, (People V8-, Fabricante, CA-53 Off. Gaz.,
3&10). There is nothing in the. above quoted information which
charges the accused with, having exercised sucli.a misrepresentation or
fraud, upon the offended party, T«ress» Bautista. Indeed, as the
mortgagee, it may not be said that.she was unaware of the existence of
such encumbrance.

Wherefore, finding that the facts alleged
in the information d

In the Court of Appeals, the People submitted only one issue, i.e.,
whether the facts alleged in the information constitute or not an
offense.

Considering that the mortgage is not registered, the mortgagee’
Teresa Bautista. is damaged. The Revised Penal Code provides— .

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

* * *

2.
Any person who, knowing that real property is encumbered, shall dispose
of the same,1 although such encumbrance be not recorded”

The instant case falls within the purview of the dear provision of
law cited, under Which the appellees were prosecuted. Appellees sold
the property in question to Damian Vasquez knowing that the same, was
mortgaged to Teresa Bautista, although such encumbrance be not
recorded. The mortgagee who was prejudiced, had come to the court to
vindicate her right as an offended party. The ground for dismissal of
the case is that the facts alleged in the information do not constitute
an offense. This being the case, the sufficiency of the information
must have , to be determined solely upon such facts as alleged therein.
The facts as found by the court in the civil case which, ‘ 6y the way,
is not final, because it is pending appeal in the Court of Appeals, can
not be considered as a prejuv dieial question. At most, they would
‘merely constitute as a defense in the criminal case, which must be
substantiated during the trial. A cursory reading of the information,
heretofore quoted, shows that sufficient allegations have been set
forth, to render appellees’ acts, a violation of par. 2, section 316 of
the Revised Penal Code.

The appellees rely upon the case of People vs. Mariano, CA-40 Off.
Gaz., Supp. 4, p. 91, cited by the trial court in its decision, portion
of which has heretofore been reproduced. We have gone over the case and
We find the game not to be an authority for the appellees, but rather
an authority in support of the People’s contention. For in said
decision (Mariano case), the Court of Appeals stated1—

“If no damage should result from the sale, no crime
ol estafa would be committed by the vendor as the element of damage
would 1 then be lacking. If, as a result of the eale, the parly who has
a lien upon the property or for whose betuifit an encumbrance was _
created or cimstituted should suffer damages, the vendor should ho
criminally liable should he have misrepresented, committed frwtld or
practiced framed upon such party.”

In the instant case, the party who has a lien upon the property in
question or for whose benefit the mortgage was credited or constituted
is the mortgagee (Teresa Bau-tista), and the expression “such party”
refers to the mortgagee herself. While the appellees as the vendors,
had not made misrepresentations to the mortgagee, because the mortgagee
know of the encumbrance made in. her favox% still the vendors-appellees
committed or practiced fraud upon her, because appellees sold to the
vendee the property which they had- previously mortgaged to the
mortgagee (herein offended party), without her knowledge and consent.
So that, “if it can be proven as charged and which is in fact charged
in the information that the mortgagee suffered damages in the amount of
P2,500.00; by the act of the vendors in misrepresenting to the vendee
that the real property in question (house) was unencumbered, well
knowing that it was encumbered in favor of the mortgagee, .then, the
vendee could be held liable.

In view liereof, We hold that the trial court erred in haying
dismissed the information on the ground that the facts alleged therein
do not constitute an offense.

The decision appealed from is set aside, and the case is remanded to
the court of origin for further and appropriate proceedings. “Without
pronouncement as to costs.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon., Regala, and Makalintal JJ., concur.