ESTHER ABALOS Y PUROC, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.

Abalos versus People of the Philippines

The Case

This is the case of Esther Abalos, who came to the Supreme Court asking that her conviction for estafa be set aside. She had been found guilty of defrauding Elaine Sembrano by issuing two unfunded EastWest Bank checks, which she signed in Sembrano's presence while passing herself off as "Vicenta Abalos." The case matters for two reasons. First, it teaches the precise elements of estafa by issuing a bad check under Article 315, paragraph 2, subparagraph d of the Revised Penal Code, and how deceit must be the efficient cause of the defraudation. Second, it is a working lesson on retroactivity: how the Court compares the old penalty under the Revised Penal Code with the new penalty under Republic Act Number 10951, and chooses whichever is more favorable to the accused.

Procedural History

The Regional Trial Court of Baguio City, Branch 60, tried the petitioner for estafa and, on November 29, 2012, rendered a judgment of conviction. The trial court sentenced her to an indeterminate penalty of four years and two months of prision correccional as minimum to twenty years of reclusion temporal as maximum, and ordered her to pay actual damages of 232,500 pesos with legal interest from the filing of the case until full payment.

The petitioner appealed to the Court of Appeals. In its decision dated May 20, 2015, the Court of Appeals dismissed the appeal and affirmed the conviction, modifying only the interest by fixing it at six percent per annum from finality of the decision until fully paid. Still dissatisfied, the petitioner elevated the matter to the Supreme Court by way of a petition for review on certiorari under Rule 45.

Facts

In April 2011, the petitioner, introducing herself as "Vicenta Abalos" and accompanied by Christine Molina, went to the office of Elaine Sembrano at Manulife in Baguio City. She offered two EastWest Bank checks for rediscounting: one dated May 3, 2011 for 17,500 pesos, and another dated June 1, 2011 for 250,000 pesos, for a total of 267,500 pesos. The petitioner signed the checks in Sembrano's office. Sembrano agreed to rediscount them upon the assurance of the petitioner and Molina that the checks were good, and she released 250,000 pesos, less seven percent as interest.

Sometime later, Sembrano learned from friends that the petitioner's real name was Esther, not Vicenta. When she presented the checks for payment on their due dates, both were dishonored. She engaged the services of Benguet Credit Collectors, and a demand letter was sent to the petitioner, who received it on October 23, 2011. Despite the demand and her promise to pay, nothing was ever paid.

The petitioner's defense was that the checks were issued merely as collateral for a loan, together with a certificate of title in the name of Vicenta Abalos; that she did not personally transact with Sembrano, as it was Molina who dealt with her; and that the checks were never meant for rediscounting. The trial court rejected this defense and convicted her, and the Court of Appeals affirmed.

Issues

• Whether or not the Court of Appeals erred in finding the petitioner guilty of estafa when the real transaction between the parties was civil and not criminal in nature.
• Whether or not the element of deceit was established beyond reasonable doubt, considering that the checks were allegedly issued only as collateral and not as the inducement for the release of the money.
• Whether or not the inconsistency between Sembrano's affidavit and her testimony in open court is a ground for acquittal.
• Whether or not the penalty under Republic Act Number 10951 should be applied retroactively in place of the penalty under the Revised Penal Code.

Applicable Provisions

Article 315, paragraph 2, subparagraph d of the Revised Penal Code, as amended by Republic Act Number 4885, defines the offense charged:

ART. 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by: x x x x 2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud: x x x x (d) By [postdating] a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.

This is the very provision under which the petitioner was convicted, and its three-day rule supplies the prima facie presumption of deceit that the Court invokes against her.

Article 315 of the Revised Penal Code, as it stood before Republic Act Number 10951, fixed the graduated penalties for estafa:

ART. 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned herein below shall be punished by: 1st. The penalty of prision correccional 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 cases, and in connection with the 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.

This is the old scale against which the Court measures the imposable penalty for the amount of 232,500 pesos.

Section 85 of Republic Act Number 10951 amended the same article and adjusted the amounts:

SEC. 85. Article 315 of the same Act, as amended by Republic Act No. 4885, Presidential Decree No. 1689, and Presidential Decree No. 818, is hereby further amended to read as follows: ART. 315. Swindling (estafa). — x x x x x x x Any person who shall defraud another by means of false pretenses or fraudulent acts as defined in paragraph 2(d) hereof shall be punished by: 4th. The penalty of prision mayor in its medium period, if such amount is over Forty thousand pesos (P40,000) but does not exceed One million two hundred thousand pesos (P1,200,000).

This is the new scale that the petitioner asks the Court to apply retroactively, and the Court must compare it with the old one to see which is more favorable to her.

Ruling

On the first issue, the Court held that the petitioner's liability is not merely civil but criminal. The elements of estafa under Article 315, paragraph 2, subparagraph d are: first, postdating or issuing a check in payment of an obligation contracted at the time the check was issued; second, lack of sufficient funds to cover the check; third, knowledge on the part of the offender of such circumstances; and fourth, damage to the complainant. All four were established beyond reasonable doubt. The checks were dishonored for the reason "account closed," and the petitioner, who was not the owner of the account, knew that she had no knowledge whether the checks were sufficiently funded. Damage to Sembrano followed.

On the second issue, the Court held that deceit was established from the very beginning, when the petitioner misrepresented herself as Vicenta Abalos, the owner of the checks. She signed the checks in Sembrano's presence, showed an identification card and a community tax certificate in that name, and displayed a transfer certificate of title registered under the name of Vicenta Abalos, all to assure Sembrano of her capacity to pay. The Court stressed that deceit must be the efficient cause of the defraudation, and here it was: were it not for the false pretense, Sembrano would not have parted with her money. The Court also held that the prima facie presumption of deceit arises when the drawer of the dishonored check fails to pay within three days from receipt of the notice of dishonor.

On the third issue, the Court held that the discrepancy between Sembrano's affidavit, which spoke of rediscounting, and her testimony, which spoke of collateral, does not warrant acquittal. For a discrepancy to serve as a basis for acquittal, it must refer to significant facts vital to the guilt or innocence of the accused; an inconsistency that has nothing to do with the elements of the crime cannot reverse a conviction. The Court added that even if the checks were mere collateral, the petitioner still committed deceit when she failed to disclose that the checks were not hers and were not sufficiently funded.

On the fourth issue, the Court compared the two penalties. Under the Revised Penal Code, the penalty ranged from six months and one day as minimum to twenty years as maximum. Under Republic Act Number 10951, the penalty would be six years and one day of prision mayor as minimum to eight years, eight months and one day of prision mayor as maximum. The Court held that the law with retroactive effect applies only insofar as it is favorable to the accused, and here the Revised Penal Code penalty, with its much lower minimum, is more beneficial. The Court quoted its own reasoning in Hisoler versus People:

At any rate, even if the maximum period imposable upon the petitioner under the RPC in this case is higher than that under R.A. No. 10951, the Court finds that the benefits that would accrue to the petitioner with the imposition of a lower minimum sentence outweighs the longer prison sentence and is more in keeping with the spirit of the Indeterminate Sentence Law.

The Court therefore affirmed the penalty imposed by the trial court and the Court of Appeals, and modified only the interest: twelve percent per annum from the filing of the Information until June 30, 2013, and six percent per annum from July 1, 2013 until finality of the decision, with the total amount earning six percent per annum from finality until full payment.

Doctrine

Estafa under Article 315, paragraph 2, subparagraph d of the Revised Penal Code requires four elements: the issuance of a check in payment of an obligation contracted at the time of issuance; lack of sufficient funds; knowledge of that lack on the part of the offender; and damage to the complainant. Deceit and damage are essential, and deceit must be the efficient cause of the defraudation, meaning the issuance of the check must have induced the offended party to surrender money or property. The failure of the drawer to deposit the amount necessary to cover the check within three days from receipt of notice of dishonor is prima facie evidence of deceit. A discrepancy in the prosecution's evidence is a ground for acquittal only if it refers to significant facts vital to guilt or innocence. Finally, Republic Act Number 10951 applies retroactively only insofar as it is favorable to the accused, and where the old penalty carries a lower minimum, the old penalty prevails, in keeping with the spirit of the Indeterminate Sentence Law.

Disposition

The Court affirmed the conviction and the penalty of four years and two months of prision correccional as minimum to twenty years of reclusion temporal as maximum, and modified only the interest on the 232,500 pesos award as described above.

Remember This

The single line to memorize: deceit must be the efficient cause of the defraudation, and the issuance of the check must be what induced the victim to part with money or property. Examiners like to use this case on the elements of estafa by bad check, on the prima facie presumption of deceit from the three-day notice rule, and on the retroactive application of Republic Act Number 10951 measured by what is most favorable to the accused.