WILSON P. CHAM, PETITIONER, VS. HON. RAUL M. GONZALEZ IN HIS CAPACITY AS THE SECRETARY OF JUSTICE AND RODOLFO S. SANDEL, ALEXIS D. SANDEL AND KATHERINE D. SANDEL, RESPONDENTS.

Cham versus Gonzalez

The Case

This is a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, brought by Wilson P. Cham against the Secretary of Justice, Raul M. Gonzalez, and against Rodolfo Sandel, Alexis Sandel and Katherine Sandel. Cham asks the Supreme Court to annul two resolutions of the Secretary of Justice which, on reconsideration, withdrew the earlier directive to file an information for estafa against the Sandels. The case matters because it fixes the narrow room for judicial interference with the prosecutor's finding of probable cause, and because it shows how the element of deceit in estafa by false pretense is tested at the preliminary investigation stage.

Procedural History

Cham filed a complaint-affidavit with the Office of the City Prosecutor of Quezon City, docketed as I.S. Number 01-8284, accusing the Sandels of estafa under Article 315, paragraph 2(a) of the Revised Penal Code. On October 15, 2001, the City Prosecutor issued a resolution dismissing the complaint on the ground that the parties had entered into a civil transaction, a case of sale by installment, so that the remedies of the Civil Code were available to the complainant. Cham's motion for reconsideration was denied on April 11, 2002. He then appealed to the Secretary of Justice.

On December 15, 2004, Secretary of Justice Gonzalez reversed the City Prosecutor. He ruled that the false representation constituted estafa and directed the City Prosecutor to file an information against the three Sandels. On motion for reconsideration filed by the private respondents, the Secretary of Justice, on May 16, 2005, reconsidered and set aside his own resolution and directed the City Prosecutor to cause the withdrawal of any information filed pursuant to it. Cham's motion for reconsideration was denied on October 27, 2005. Hence this petition for certiorari before the Supreme Court.

Facts

Sometime in September 1996, the Sandels represented to Cham that they absolutely owned a parcel of land containing an area of 27,098 square meters located in Bulac, Santa Maria, Bulacan, and induced him to buy it. On January 28, 1997, Cham and the Sandels executed a Contract to Sell. Cham paid a total of 2,709,800 pesos as fifty percent downpayment, evidenced by various checks, plus cash of 135,490 pesos received under a voucher dated November 24, 1996.

Cham later came to know that the Sandels owned only a portion of the property, about one and one fourth hectares or around 12,500 square meters, as shown in a Kasulatan ng Bilihang Tuluyan dated July 26, 1972 executed by the spouses Ulpiano Diaz and Cornelia Mateo in favor of Remedios Diaz, wife of Rodolfo Sandel. Cham demanded the return of his money through a demand letter dated January 22, 2001, but the Sandels refused.

In the preliminary investigation, the Sandels produced a document called Partihang Labas Sa Hukuman Na May Pagtatakwil Ng Karapatan, executed by the co-heirs of Remedios Diaz Sandel before a notary public on May 9, 1976, whereby they relinquished their rights over the subject property in her favor. A copy was filed with the Records Management and Archives Office. They also produced tax declarations from 1951 to 2000, which from 1977 were issued in the name of Remedios Diaz Sandel and covered the entire 27,098 square meters. Cham countered with an affidavit of Oscar Cruz denying his signature on the Partihan, and with later tax declarations in the names of Yolanda Cruz, Jesusa Castillo and Julieta Castillo.

Issues

• Whether or not the Secretary of Justice committed grave abuse of discretion amounting to lack or excess of jurisdiction in setting aside his earlier resolution directing the filing of an information for estafa against the private respondents.

Applicable Provisions

Article 315, paragraph 2(a) of the Revised Penal Code, as described in the decision, defines the estafa charged, and its element of deceit is the very point on which the probable cause finding turns:

Under the class of estafa defined in Article 315(2)(a), the element of deceit is indispensable, which deceit consists of the false statements or fraudulent representation of the accused, made prior to, or at least simultaneously with, the delivery of the thing by the victim, it being essential that such false statement or fraudulent representation constitutes the very cause or the only motive that induces the complainant to part with the thing of value.

Rule 65 of the 1997 Rules of Civil Procedure supplies the remedy invoked, certiorari on the ground of grave abuse of discretion, which the Court measures against the standard it states:

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility which must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

Ruling

The Court held that the petition has no merit. On the sole issue, the Secretary of Justice did not commit grave abuse of discretion. The Court stressed that preliminary investigation proper, meaning the determination of whether there is reasonable ground to believe that the accused is guilty and should be subjected to the expense, rigors and embarrassment of trial, is the function of the prosecution. Absent a clear showing that the investigating officer acted with grave abuse of discretion, courts will not interfere with the officer's findings.

The Court found factual and legal bases for the Secretary's ruling. Deceit is indispensable in estafa by false pretense, and the Sandels presented documents negating any intent to deceive. Cham's reliance on the 1972 Kasulatan was misplaced, because the 1976 Partihan, executed before a notary public and filed with the National Archives, showed that the co-heirs relinquished their rights in favor of Remedios Diaz Sandel. Being a notarized document, it carries the presumption of regularity, and the lone affidavit of Oscar Cruz, executed only on August 19, 2005, was insufficient to overthrow that presumption; the other parties to the Partihan did not assail their signatures.

The tax declarations from 1951 to 2000, issued in the name of Remedios Diaz Sandel from 1977 and covering the entire 27,098 square meters, were consistent with the Partihan. The later tax declarations invoked by Cham were of little probative value because they were unsigned by the supposed approving authority and their dates were not clearly indicated. All told, the private respondents appeared to be of the honest belief that they had a real right over the entire property, barring a conclusion of ill motive or intent to defraud. Bad faith and fraud are allegations of fact that demand clear and convincing proof, which Cham failed to show.

Doctrine

• The determination of probable cause in preliminary investigation is the function of the prosecution; courts will not interfere absent a clear showing of grave abuse of discretion.
• Grave abuse of discretion means capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, or exercise of power in an arbitrary or despotic manner by reason of passion or personal hostility, so patent and gross as to amount to an invasion of positive duty or a virtual refusal to perform the duty enjoined.
• In estafa under Article 315, paragraph 2(a), deceit is indispensable and must be the very cause or the only motive inducing the victim to part with the thing of value.
• Bad faith and fraud are allegations of fact that demand clear and convincing proof.
• A notarized document is a public document that carries the presumption of regularity with respect to its due execution, and a lone affidavit of forgery is insufficient to overthrow it.

Disposition

The petition for certiorari was dismissed, and the resolutions of the Secretary of Justice directing the withdrawal of any information against the private respondents stand.

Remember This

Memorize this line: probable cause is the prosecutor's call, and courts strike it down only for grave abuse of discretion, meaning capricious and whimsical judgment equivalent to lack of jurisdiction. Examiners use this case on the boundaries of judicial review of the Secretary of Justice's resolutions, and on the deceit element of estafa by false pretense tested at preliminary investigation.