MIGUEL COSME, JR., PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

Miguel Cosme versus People of the Philippines

The Case

This is a criminal case in which Miguel Cosme, Junior, was charged with, and convicted of, the crime of estafa, or swindling, for receiving money from a private complainant in trust for the payment of accrued real estate taxes and then failing to apply that money to the purpose for which it was given. The case matters for two reasons. First, it is a clean illustration of the distinction between the two species of estafa under Article 315 of the Revised Penal Code: estafa by unfaithfulness or abuse of confidence, on one hand, and estafa by false pretenses or deceit, on the other. Second, it teaches a constitutional lesson that every bar candidate must carry into criminal procedure: an accused cannot be convicted of a crime, or of a particular mode of committing it, unless that crime and its essential elements are clearly alleged in the information. The Court here corrects the Court of Appeals on exactly that point, even as it affirms the conviction on a different paragraph of the same article.

Procedural History

An information dated January 16, 1996, was filed against Miguel Cosme, Junior, before the Regional Trial Court of Manila, Branch 1. Upon arraignment on June 3, 1997, with the assistance of a counsel de oficio, he pleaded not guilty. After trial, the Regional Trial Court rendered its decision on October 20, 1998, finding him guilty beyond reasonable doubt of estafa under Article 315, paragraph 1, subparagraph b, of the Revised Penal Code. It sentenced him to an indeterminate penalty of twelve years of prision mayor as minimum to twenty years of reclusion temporal as maximum, and ordered him to pay actual damages of 1,800,000 pesos with legal interest from the filing of the action.

Cosme appealed to the Court of Appeals. On June 22, 2001, the Court of Appeals affirmed the conviction but modified it, holding that the estafa was committed under Article 315, paragraph 2, subparagraph a, of the Revised Penal Code, that is, estafa by deceit, and reducing the actual damages to 1,600,000 pesos. His motion for reconsideration was denied in a resolution dated September 10, 2001.

Cosme then filed with the Supreme Court a petition for review on certiorari under Rule 45 of the Rules of Court, assigning as errors the crediting of the private complainant's sole and uncorroborated testimony, the finding that he received the demand letter, and the failure to give credence to his defense. The Office of the Solicitor General argued that the petition raised only questions of fact, which are not proper in a Rule 45 petition. The Supreme Court noted that the petition indeed raised questions of fact and did not fall under any recognized exception, but because an appeal in a criminal case opens the whole case for review, it proceeded to examine the merits.

Facts

On April 9, 1993, Judith Rodriguez and the private complainant, Paul Bunda, entered into a memorandum agreement concerning two lots with an aggregate area of 231,907 square meters situated at Barrio Almanza, Las Pinas, Metro Manila. Under that agreement, Judith Rodriguez agreed to assign and convey forty percent of the lots to Bunda as consideration for his payment of the accrued real estate taxes on the property.

In August 1994, Bunda visited the property and met the accused, Miguel Cosme, Junior, who represented himself as the overseer of the property and who resided there. In September 1994, the two met at the Aurelio Hotel on Roxas Boulevard in Manila. There, Cosme convinced Bunda to entrust to him two million pesos for the payment of the accrued real estate taxes, telling Bunda that he was a nephew of the then incumbent mayor of Las Pinas and had good connections with the mayor's office and with the offices of the treasurer and the assessor. On September 12, 1994, Bunda gave Cosme an initial 100,000 pesos in cash, and another 100,000 pesos in cash on September 14, 1994. Both payments were unreceipted because Cosme told Bunda that receipts were no longer necessary.

On two later occasions, Bunda handed Cosme two checks payable to cash, dated September 28 and October 13, 1994, in the amounts of one million pesos and 600,000 pesos respectively. Cosme encashed both checks. He did not, however, use the money to pay the accrued real estate taxes, but instead misappropriated it for his own use and benefit. In his defense, Cosme did not deny receiving the 1,600,000 pesos, but claimed it was a package deal covering the hiring of security guards, the construction of a steel fence, the facilitation of the tax computation, and the eventual titling of the property. He admitted, however, that he kept no payroll, no receipts, no list of guards, and no record of his expenses.

Issues

• Whether or not the petition for review on certiorari raises only questions of fact, which are not proper subjects of a Rule 45 petition.
• Whether or not the accused may be convicted of estafa by deceit under Article 315, paragraph 2, subparagraph a, of the Revised Penal Code when the information did not allege the specific fraudulent acts or false pretenses constituting that mode of estafa.
• Whether or not the accused was properly charged and convicted of estafa by conversion or misappropriation under Article 315, paragraph 1, subparagraph b, of the Revised Penal Code.
• Whether or not the courts below erred in giving full credence to the sole and uncorroborated testimony of the private complainant.
• Whether or not the failure of the prosecution to prove that the accused received the demand letter bars his conviction for estafa.

Applicable Provisions

Article 315 of the Revised Penal Code, in its first paragraph, defines swindling and provides the penalty:

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

This is the general definition that frames both modes of estafa at issue in the case.

Article 315, paragraph 1, subparagraph b, of the Revised Penal Code, the provision under which the trial court convicted the accused, provides:

By misappropriating or converting, to the prejudice of another, money, goods or any other personal property 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, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property.

This is the mode of estafa by unfaithfulness or abuse of confidence, and the Court holds that the information adequately alleged all of its essential elements.

Article 315, paragraph 2, subparagraph a, of the Revised Penal Code, the provision under which the Court of Appeals convicted the accused, provides:

By using a fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions; or by means of other similar deceits.

This is the mode of estafa by false pretenses or deceit, and the Court holds that the information failed to allege the specific acts of deceit required for a conviction under it.

Section 9, Rule 110 of the Rules of Court, in the version in force when the information was filed, provides:

Section 9. Cause of accusation. The acts or omissions complained of as constituting the offense must be stated in ordinary and concise language without repetition, not necessarily in the terms of the statute defining the offense, but in such form as is sufficient to enable a person of common understanding to know what offense is intended to be charged and enable the court to pronounce judgment.

This is the procedural standard against which the sufficiency of the information is measured, and it is the basis for the Court's ruling that the deceit mode was never properly charged.

Ruling

On the first issue, the Court held that the petition indeed raised questions of fact, since the Supreme Court in a Rule 45 petition reviews only errors of law and is not a trier of facts. The recognized exceptions, such as findings grounded on speculation or contradicted by the evidence, were not present. On this ground alone, the petition should have been dismissed. But because an appeal in a criminal case opens the whole case for review, the Court proceeded to the merits.

On the second issue, the Court ruled that the accused could not be convicted of estafa by deceit under Article 315, paragraph 2, subparagraph a. The Court of Appeals had located the deceit in Cosme's pretending to have influence and connections with the assessor's and treasurer's offices. But the information contained only conclusions of fraud and did not allege the specific fraudulent acts that induced the complainant to part with his money. The information must embody the essential elements of the crime charged so that the accused can prepare his defense. Since the prosecution failed to allege the essential elements of estafa by deceit, conviction under that mode was improper.

On the third issue, the Court held that the trial court correctly found the accused properly charged with estafa under Article 315, paragraph 1, subparagraph b. The elements of this mode are that money or property is received by the offender in trust or under an obligation to deliver or return it, that there is misappropriation or conversion or a denial of receipt, and that this is to the prejudice of another. The information alleged all three. The Court quoted the information's allegation that the accused received the sum in trust under the express obligation to settle the accrued real estate taxes, and that he misappropriated and converted the same to his own use and benefit.

On the fourth issue, the Court held that the trial and appellate courts did not err in crediting the private complainant. The trial court had the unique opportunity to observe the demeanor of witnesses, and its assessment, affirmed by the Court of Appeals, is conclusive absent arbitrariness. The absence of any improper motive on the part of the sole witness tended to show that his testimony was worthy of full faith. Truth is established not by the number of witnesses but by the quality of their testimonies. The accused's own defense failed the test of human experience: a legitimate businessman who claimed to have hired ten guards and built a fence kept no payroll, no receipts, and no records at all, and his tax order of payment was dubious on its face.

On the fifth issue, the Court held that demand is not an element of the felony nor a condition precedent to the filing of a criminal complaint for estafa. The accused may be convicted if the prosecution proves misappropriation or conversion. Failure to account upon demand is merely circumstantial evidence of misappropriation, and here the accused failed to account for the money given to him in trust.

Doctrine

First, an accused cannot be convicted of a crime, or of a particular mode of committing it, unless the crime and its essential elements are clearly charged in the information. The constitutional right to be informed of the nature and cause of the accusation requires that the information state the acts or omissions constituting the offense, not mere conclusions of fraud.

Second, estafa under Article 315, paragraph 1, subparagraph b, requires three elements: that money or property is received in trust or under an obligation to deliver or return it; that there is misappropriation or conversion, or a denial of receipt; and that this is to the prejudice of another.

Third, estafa under Article 315, paragraph 2, subparagraph a, requires that a false pretense or fraudulent act be made prior to or simultaneously with the fraud, that the offended party relied on it and was induced to part with his money, and that he suffered damage. The specific deceit must be alleged in the information.

Fourth, demand is not an element of estafa and is not a condition precedent to the criminal complaint. Failure to account upon demand is only circumstantial evidence of misappropriation.

Fifth, the trial court's assessment of the credibility of witnesses is accorded great respect and is conclusive when affirmed by the Court of Appeals, absent arbitrariness. Truth is established not by the number of witnesses but by the quality of their testimonies.

Disposition

The Supreme Court denied the petition and affirmed the conviction of Miguel Cosme, Junior, for estafa under Article 315, paragraph 1, subparagraph b, of the Revised Penal Code, with the modification that the actual damages were reduced to 1,600,000 pesos with legal interest from the filing of the action until fully paid.

Remember This

The single line worth memorizing is this: an accused cannot be convicted of estafa by deceit unless the information alleges the specific false pretenses that induced the victim to part with his money, but he may be convicted of estafa by misappropriation if the information alleges the elements of trust, conversion, and prejudice. Examiners like to use this case to test the distinction between the two modes of estafa under Article 315 and the constitutional rule that the information must charge the essential elements of the offense.