Philippine Supreme Court Jurisprudence > Year 2000 > March 2000 Decisions > G.R. No. 106671 March 30, 2000 - HARRY TANZO v. FRANKLIN M. DRILON, ET AL.:

Before us is a special civil action for certiorari under Rule 65 of the Rules of Court seeking to annul and set aside the April 10, 1992 Resolution of public respondent Secretary of Justice, as well as the latter’s August 6, 1992 Resolution denying the petitioner’s motion for reconsideration. The assailed Resolutions upheld the Quezon City Prosecutor’s dismissal of the criminal complaint for estafa filed by petitioner Harry Tanzo against private respondents Manuel and Mario Salazar.chanrobles.com : chanrobles.com.ph

The facts are:chanrob1es virtual 1aw library

Private respondents are brothers who were engaged in the business of forwarding and transporting "balikbayan" boxes from California, U.S.A to Metro Manila, Philippines. Manuel J. Salazar (hereinafter "Manuel") managed the Philippine side via MANSAL Forwarders, a business registered in his name with principal office at No. 48 Scout Tobias Street, Quezon City. On the other hand, Mario J. Salazar (hereinafter "Mario") handled the U.S. side of the forwarding business as General Manager of M.J.S. International, Inc., a corporation with principal office at No. 3400 Fletcher Drive, Los Angeles, California, U.S.A.

According to the petitioner, sometime in February of 1989, while he was in Los Angeles, California, U.S.A., Mario tried to convince him to invest some money in the said business. Mario had allegedly represented that petitioner’s money will be held in trust and administered by both him and his brother for the exclusive use of their forwarding and transporting business. Petitioner further alleged that Mario promised him a return on his investment equivalent to ten per centum (10%) for one month, at the end of which his money plus interest earned shall be returned to him.

When petitioner returned to the Philippines, it was Manuel’s turn to persuade him to part with his money under the said investment scheme. Eventually convinced by the private respondents’ representations and assurances, petitioner agreed to invest the total amount of US $34,000.00 which he entrusted to his aunt, Liwayway Dee Tanzo, who was residing in the U.S.A. Thus, petitioner issued several personal checks made out to Liwayway Dee Tanzo, 1 or to "Calfed" 2 , or payable to cash 3 , to wit:chanrob1es virtual 1aw library

California Federal

Savings and Loan Asso. Date of Check Amount

Check Numbers

319 August 04, 1989 US$5,000.00

320 August 09, 1989 9,000.00

321 August 09, 1989 9,000.00

322 August 08, 1989 2,000.00

323 August 10, 1989 4,000.00

324 August 14, 1989 5,000.00

Total US $34,000.00 4

Except for California Federal Check No. 322 which was encashed by Mario himself, private respondents received the proceeds of the above checks through Liwayway Dee Tanzo on several occasions in August 1989.

Meanwhile, Mario encountered serious liquidity problems 5 that prompted him to petition the U.S. Bankruptcy Court for a release from his debts on September 27, 1990. He was ordered "released from all dischargeable debts" by the said court on January 25, 1991. 6

Upon the expirations of the thirty (30) day investment period, petitioner demanded from Mario in the States and Manuel in Quezon City proper accounting of his financial investment and/or the return of his capital plus interest earned. At the outset, private respondents avoided their obligation to petitioner by making various excuses but after persistent demands by the latter, Manuel finally admitted that their shipments had encountered some problems with the Bureau of Customs. Thus, on January 29, 1990, Manuel executed a letter authorizing the petitioner to withdraw documents to assist in the release of their shipments from the Bureau of Customs. However, when petitioner attempted to secure the release of the "balikbayan" boxes from the Bureau of Customs, he discovered that the same had actually contained smuggled goods and were accordingly seized and forfeited in favor of the government.chanrobles.com.ph : red

When private respondents continued to ignore petitioner’s demand for the return of his money, the latter filed, on June 31, 1991, a complaint-affidavit for estafa against private respondents before the Office of the Quezon City Prosecutor (hereinafter "prosecutor"). In a resolution dated September 4. 1991 the prosecutor dismissed the said complaint on the ground that" [t]he Quezon City Prosecutor’s Office has no territorial jurisdiction over the offense charged as it was committed not in Quezon City, Philippines." 7 Petitioner’s motion for reconsideration of the said resolution was denied by the prosecutor on the same ground .8

Petitioner then filed a petition for review of the dismissal of his complaint for estafa against private respondents with then Secretary of Justice, Franklin M. Drilon. On April 10, 1992, Acting Secretary of Justice, Eduardo G. Montenegro dismissed the said petition for review in a resolution which reads:chanrob1es virtual 1aw library

An evaluation of the records of the case disclosed that the incident complained of took place in the United States, and under Article 2 of the Revised Penal Code, our courts have no jurisdiction over offenses committed outside the territory of the Philippines. While the rule allows certain exceptions, the facts do not show that the case falls within any of said exceptions. Hence, we are convinced, and hereby hold, that there is no cogent reason to disturb the findings of the Quezon City Prosecutor’s Office in the questioned resolution.

ACCORDINGLY, your petition is dismissed for lack of merit. 9

Dissatisfied, petitioner sought a reconsideration of the above resolution However, the Secretary of Justice denied petitioner’s motion for reconsideration, and stated in a resolution dated August 6, 1992 that:chanrob1es virtual 1aw library



After a careful analysis of the issues raised in your motion and a re-evaluation of the evidence on record, we find no valid reason, to justify a reversal of our previous resolution.

Aside from your bare allegations that there was a trust agreement between you and the respondents, and that deceit and misappropriation which are the important elements of estafa were committed by them in the Philippines, you did not present any concrete or convincing evidence support the same. On the contrary, your own evidence shows that you transacted with Mario Salazar through your aunt. Liwayway Dee Tanzo. This bolsters the claim of Manuel Salazar that the sums of money received by Mario from Liwayway in Los Angeles, California, U.S.A., were simple loans as shown by the loan contracts executed by them in the said place.

WHEREFORE, your motion for reconsideration is hereby denied. 10

Hence, this petition.

Petitioner contends that the Secretary of Justice committed grave abuse of discretion in dismissing the criminal case for estafa against the private respondents on the ground of lack of jurisdiction as the crime charged was actually committed in the United States. 11

At the outset, we must point out that the Secretary of Justice dismissed the criminal charges against the respondents not only for lack of jurisdiction but also, and more importantly because it found petitioner’s evidence insufficient to support his charge of estafa against the private respondents. Thus, the immediate issue for the determination of this Court is whether prima facie evidence exists that the private respondents had committed the crime of estafa and should be held for trial. After all, a finding that petitioners complaint for estafa is not supported by that quantum of evidence necessary to justify the filing of a criminal case in court shall render irrelevant the question of territorial jurisdiction over the offense charged.

A judicious scrutiny of the evidence on record leads us to agree with the Secretary of Justice that the transactions between private respondents, particularly, Mario and the petitioner, were simple loans, and did not constitute a trust agreement, the violation of which would hold the private respondents liable for estafa.

Petitioner failed to present evidence other than his bare assertion that he had invested money in private respondents’ business on the basis of a trust agreement. The photocopies of the checks allegedly subject of the trust agreement did more damage than good to petitioner’s proposition. None of these checks were issued to either Mario or Manuel and were in fact payable to "Liwayway Dee Tanzo", "Calfed" or "Cash." Moreover, only one of these checks was actually encashed by Mario, the rest by Liwayway Dee Tanzo. On the basis of the foregoing alone, private respondents could have completely denied the existence of their liability to petitioner as neither proof in writing nor witnesses exist to substantiate petitioner’s claim of a trust agreement between himself and the private respondents. On the contrary, Manuel does not deny that Mario had indeed received money from the petitioner, albeit claiming that the latter’s liability thereunder is purely civil in nature for being rooted in a simple loan contract. Manuel offered in evidence copies of the contracts of loan entered into between M.J.S. International and Liwayway Dee Tanzo. 12 We agree with the petitioner that these loan contracts do not by themselves prove that his agreement with the private respondents was also a loan. As correctly pointed out by the petitioner, he is not a party to these contracts that clearly stipulate "Liwayway Dee Tanzo" as creditor and "M.J.S. International represented by its General Manager, Mario J. Salazar" as debtor.

These loan contracts may, however, be given evidentiary value in support of Manuel’s claim that the agreement with petitioner was no different from the loan contracts with Liwayway Dee Tanzo. Under the rule of res inter alios acta, evidence that one did or did not do a certain thing at one time is not admissible to prove that he did or did not do the same or similar thing at another time, but it may be received to prove a specific intent or knowledge, identity, plan, system, scheme, habit, custom or usage, and the like. 13

Elaborating thus. we have held that:chanrobles virtuallawlibrary

[C]ollateral facts may be received as evidence under exceptional circumstances, as when there is a rational similarity or resemblance between the conditions giving rise to the fact offered and the circumstances surrounding the issue or fact to be proved. Evidence of similar acts may frequently become relevant, especially in actions based on fraud and deceit, because it sheds light on the state of mind or knowledge of a person, it provides insight into such person’s motive or intent, it uncovers a scheme, design or plan, or it reveals a mistake. 14 (Emphasis supplied).

The series of transactions between M.J.S. International and Liwayway Dee Tanzo were entered into under similar circumstances as those surrounding the contract between petitioner and Mario. Just like the alleged trust agreement between petitioner and Mario, the loan contracts between M.J.S. International and Liwayway Dee Tanzo provide that the creditor shall lend to the debtor a specific amount for use by the latter in its business operations. 15 Petitioner also admits that he entrusted the checks to Liwayway Dee Tanzo for investment in private respondents’ business. This shows that private respondents were transacting directly with Liwayway Dee Tanzo in the usual manner that they conduct business, that is the loan of money for stipulated interest. Hence, private respondents’ modus operandi, if there ever was one, in raising additional capital for M.J.S. International was to borrow money from willing investors. It is thus unlikely, considering the scheme of things, that private respondents would all of a sudden deviate from an established business practice to enter into a trust agreement with the petitioner.

In view of the foregoing and the unfortunate fact that petitioner has failed to present controverting evidence, this Court is constrained to adopt private respondents’ position that the agreement between Mario and the petitioner was in the nature of a simple loan agreement.

Therefore, petitioner’s contention that private respondents have committed the crime of estafa.

1. With unfaithfulness or abuse of confidence, namely:chanrob1es virtual 1aw library



b) 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; 16

necessarily fails. This Court has ruled that when the relation is purely that of debtor and creditor, the debtor cannot be held liable for the crime of estafa, under the above quoted provision, by merely refusing to pay or by denying the indebtedness. 17 The reason behind this rule is simple. In order that a person can be convicted of estafa under Article 315, par. 1(b) of the Revised Penal Code, it must be proven that he has the obligation to deliver or return the same money, goods or personal property that he has received. The obligation to deliver exactly the same money, that is, bills or coins, is non-existent in a simple loan of money because in the latter, the borrower acquires ownership of the money borrowed. 18 Being the owner, the borrower can dispose of the thing borrowed and his act will not be considered misappropriation thereof. 19

In the alternative, petitioner accuses private respondents of committing the crime of estafa under Article 315, par. 2(a) of the Revised Penal Code which provides as follows:chanrob1es virtual 1aw library

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud

(a) 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.

Specifically; petitioner contends that he was deceived by private respondents to part with his money on their representation that the same would be held in trust for investment in their legitimate freight business only to find out later on that private respondents used his money for the illicit activity of smuggling prohibited goods into the Philippines. 20

This contention cannot be sustained for lack of evidence. Petitioner claims that private respondents used his money for smuggling. The fact, however, that several shipments from M.J.S. International Freight Services to Mansal Forwarders were seized and forfeited by the Bureau of Customs for containing smuggled items does not prove that petitioner’s money was indeed used by private respondents in the said illegal activity. Petitioner himself admits that he and his relatives were regular clients of private respondents since 1988. 21 It cannot, thus, be doubted that the private respondents were likewise engaged in a legitimate forwarding business in which business petitioner’s money could have actually been invested.chanrobles virtual lawlibrary

The letter issued by Manuel authorizing petitioner to withdraw documents covering the containers that were later seized by the Bureau of Customs bears little weight in view of the fact that the same was not even presented before the prosecutor and the Secretary of Justice. Further, as correctly pointed out by the private respondents, it is a mere blank form that does not even indicate petitioner’s name as authorized bearer. 22

As we have explained earlier, the true nature of the contract between petitioner and private respondents was that of a simple loan. In such a contract, the debtor promises to pay to the creditor an equal amount of money plus interest if stipulated. 23 It is true that private respondents failed to fulfill their promise to petitioner to return his money plus interest at the end of one month. However, mere non-compliance of a promise to perform a thing does not constitute deceit 24 because it is hard to determine and infer a priori the criminal intent to the person promising. 25 In other words, deceit should be proved and established by acts distinct from and independent of, the non-compliance of the promise, 26 and this, petitioner failed to do.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.chanrobles.com : law library

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

Endnotes:

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1. California Federal checks nos. 319, 323 and 324 were payable to the order of Liwayway Dee Tanzo, Rollo, pp. 22, 26-27.

2. California Federal check no. 321 was payable to "Calfed" or California Federal Savings and Loan Association, Rollo, p. 24.

3. California Federal checks nos. 320 and 322 were payable to cash. Rollo, pp. 23 and 25.

4. Rollo, p. 5.

5. Rollo, p. 92.

6. Rollo, p. 131.

7. Rollo, p. 36.

8. Rollo, p. 39.

9. Rollo, p. 20.

10. Rollo, p. 21.

11. Rollo, p. 8.

12. Rollo, pp. 125-130.

13. Section 34, Rule 130 of the Rules of Court.

14. Cruz v. Court of Appeals, 293 SCRA 239, 255 (1998).

15. Rollo, pp. 125-130.

16. Article 315, par. 1(b) of the Revised Penal Code.

17. Yam v. Malik, 94 SCRA 30, 35 (1979) citing U.S. v. Ibañez, 19 Phil. 559 (1911).

18. Art. 1953 of the Civil Code. — A person who receives a loan of money or any other fungible thing acquires the ownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.

19. Yam v. Malik, supra at pp. 34-35.

20. Rollo, p. 15.

21. Rollo, p. 4.

22. Rollo, p. 28.

23. Supra, see note 18.

24. Gregorio, A., FUNDAMENTALS OF CRIMINAL LAW REVIEW 810 (9th ed., 1997), citing People v. Villarin, 50 O.G. 262.

25. Ibid., citing People v. Yee, CA-G.R,. No. 21602-R, Oct. 2, 1958.

26. Supra, see note 20.