Arriola vs. People

In estafa by false pretenses under Article 315(2)(a) of the RPC, the return of the defrauded amount after conviction does not extinguish criminal liability and may be considered an implied admission of guilt under Section 27, Rule 130 of the Rules of Court; furthermore, statements made by an unavailable declarant are admissible as independently relevant statements when offered to prove that such statements were made, not to prove their truth.

Luis T. Arriola, a real estate broker, approached Ingeborg De Venecia Del Rosario in 2001 claiming he was authorized to sell a Tagaytay lot owned by Paciencia G. Candelaria. He presented an authorization letter, a certified copy of the transfer certificate of title, and a fax transmission allegedly from Candelaria who was supposedly in Australia. Del Rosario paid P437,000.00 as full purchase price based on these representations and signed a Deed of Absolute Sale purportedly executed by Candelaria. When Arriola failed to deliver the original documents, Del Rosario discovered through a phone call to Candelaria in Australia that the latter never authorized the sale and was not selling the property. Arriola's subsequent checks to reimburse Del Rosario were dishonored.

• Sometime in 2001, Luis T. Arriola, a real estate broker, met Ingeborg De Venecia Del Rosario and informed her that a lot adjacent to her existing property in Tagaytay City was for sale.
• Arriola showed Del Rosario a letter purportedly from the lot owner Paciencia G. Candelaria authorizing him to sell the property, a certified copy of Transfer Certificate of Title No. 33184, and a fax transmission allegedly from Candelaria in Australia authorizing him to receive payment.
• Del Rosario paid P100,000.00 as earnest money and subsequently paid the balance of P337,000.00, for which Arriola issued a Receipt of Payment dated June 28, 2001.
• Del Rosario signed a Deed of Absolute Sale prepared by Arriola and purportedly signed by Candelaria and witnessed by Sister Adela Arabia.
• Arriola provided only photocopies of the Deed and TCT, promising to deliver originals after notarization.
• After repeated demands, Arriola failed to deliver the original TCT, prompting Del Rosario to demand the return of her money.
• Arriola promised to return P437,000.00 plus 16% interest per annum by January 7, 2002, but reneged on this promise.
• On May 28, 2002, Arriola issued a check dated June 20, 2002 which was dishonored for being drawn from a closed account.
• Del Rosario contacted Candelaria in Australia using the White Pages Telephone Directory and discovered that the number in the purported fax was invalid; Candelaria informed her that she was not selling the property and had not authorized Arriola to sell it.
• On July 11, 2002, Arriola issued another check for P524,000.00 plus P5,000.00 cash, which was again dishonored for insufficient funds.
• Arriola's direct examination was stricken off the record after he consistently failed to appear for cross-examination despite multiple resettings and warnings from the court.
• On October 15, 2007, Arriola paid Del Rosario the amount of P437,000.00 after the RTC conviction.

• The Court of Appeals erred in giving credence to hearsay evidence, specifically the phone conversation between Del Rosario and Candelaria, which was the sole evidence of alleged deceit.
• The Court of Appeals erred in not finding good faith on the part of Arriola when he assumed to return the purchase price plus interest and actually paid the amount demanded by the trial court.
• The Court of Appeals erred in failing to give credence to the defense under the equipoise doctrine, arguing that there was a conflict between the versions of the prosecution and defense regarding the authority to sell.

• The prosecution evidence sufficiently established all elements of estafa by means of deceit under Article 315(2)(a) of the RPC.
• The phone conversation with Candelaria was admissible as an independently relevant statement, not for the truth of the matter asserted but to prove that such statements were actually made.
• The return of the money after conviction does not extinguish criminal liability for a consummated crime of estafa and may be considered an implied admission of guilt.
• The equipoise rule is inapplicable where the evidence of guilt is strong and convincing, and where the accused failed to present his version due to his own negligence in attending trial.

• Procedural Issues: Whether the trial court violated Arriola's right to due process when it struck off his direct testimony for failure to appear for cross-examination; Whether the phone conversation between Del Rosario/Atty. Roa and Candelaria constitutes inadmissible hearsay evidence.
• Substantive Issues: Whether the prosecution proved beyond reasonable doubt the elements of estafa by false pretenses under Article 315(2)(a) of the RPC; Whether Arriola's return of the defrauded amount constitutes good faith negating criminal liability; Whether the equipoise rule applies to favor the accused where there is alleged conflict in evidence.

• Procedural: The Court held that Arriola was not deprived of due process. The records showed he had been fairly notified and warned of the consequences of his continued non-appearance. The striking off of his direct testimony was proper under Section 3(c), Rule 10 of the Rules of Court when a party willfully fails to appear for cross-examination. Regarding the hearsay issue, the Court ruled that Del Rosario's testimony about her conversation with Candelaria was admissible as an independently relevant statement under the doctrine of independently relevant statements, offered not to prove the truth of Candelaria's assertions but to prove that such statements were made, which was circumstantially relevant to establish Arriola's lack of authority.
• Substantive: The Court affirmed Arriola's conviction for estafa. It held that: (1) The Authorization letter only gave Arriola authority to receive payment, not to sell the property, and being a real estate broker, he knew or should have known that a special power of attorney is required for selling real estate under Articles 1874 and 1878(5) of the Civil Code; (2) The signatures on the Authorization, fax transmission, and Deed of Absolute Sale showed glaring discrepancies, rendering the documents highly suspect; (3) The return of money after the consummation of estafa does not extinguish criminal liability and may be considered an implied admission of guilt under Section 27, Rule 130 of the Rules of Court; (4) Good faith cannot be appreciated where Arriola, a professional broker, knowingly acted beyond his authority; (5) The equipoise rule is inapplicable where the evidence does not admit of two interpretations, as the prosecution's evidence was overwhelming while Arriola failed to present his version due to his own fault. The penalty was modified pursuant to Republic Act No. 10951 to an indeterminate sentence of two months and one day of arresto mayor to one year and one day of prision correccional.

• Doctrine of Independently Relevant Statements — Statements made by a person not available for cross-examination are admissible not to prove the truth of the facts asserted therein, but to prove that such statements were made, which may be circumstantially relevant to the issue. The Court applied this to admit Del Rosario's testimony regarding Candelaria's denial of authorizing the sale, treating it as primary evidence of the fact that such denial was made, which corroborated Arriola's lack of authority.
• Equipoise Rule — Where the evidence on an issue of fact is in equipoise or there is doubt on which side the evidence preponderates, the party having the burden of proof loses. This rule applies only when the inculpatory facts are capable of two explanations, one consistent with innocence and the other with guilt. The Court held this inapplicable because the evidence overwhelmingly established guilt, and Arriola failed to present his version due to his own absences.
• Special Power of Attorney for Sale of Real Estate — Under Articles 1874 and 1878(5) of the Civil Code, an authority to sell real estate must be contained in a special power of attorney with clear and unmistakable language; an authority merely to receive payment does not imply authority to sell.

• "Evidence is called hearsay when its probative force depends, in whole or in part, on the competency and credibility of some persons other than the witness by whom it is sought to produce it."
• "Regardless of the truth or falsity of a statement, when what is relevant is the fact that such statement has been made, the hearsay rule does not apply and the statement may be shown."
• "Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another."
• "The return by the accused of money belonging to the private complainant will not reverse a consummated act of Estafa. Quite the contrary, such action may even uphold a conviction."
• "Good faith is 'an elusive idea, taking on different meanings and emphases as we move from one context to another.' It is, in general, a state of mind consisting in honesty in belief or purpose, faithfulness to one's duty or obligation, observance of reasonable commercial standards of fair dealing in a given trade or business, absence of intent to defraud or seek unconscientious advantage, or a belief in one's legal title or right."

• People v. Umapas — Cited for the doctrine of independently relevant statements, explaining that testimony regarding statements made by another person is admissible if offered to prove the fact that such statement was made, not to establish the truth of the fact asserted.
• People v. Balasa — Cited for the definition of fraud and deceit in the context of estafa, describing fraud as comprising anything calculated to deceive and deceit as false representation of a matter of fact which deceives or is intended to deceive another so that he shall act upon it to his legal injury.
• Salazar v. People — Distinguished by the Court; involved estafa by misappropriation under Article 315(1)(b) and held that the transaction was a simple sale with delay giving rise only to civil liability, whereas the present case involved estafa by false pretenses under Article 315(2)(a) with no valid contract existing due to lack of authority.
• Tin v. People — Cited for the definition and application of the equipoise rule, explaining that it applies only where evidence is in equipoise or capable of two explanations, one consistent with innocence and one with guilt.
• Seguritan v. People and People v. Dejolde, Jr. — Cited for the proper application of Republic Act No. 10951 in modifying the penalties for estafa under Article 315 of the RPC.

• Article 315, Paragraph 2(a), Revised Penal Code — Defines and penalizes estafa by means of false pretenses or fraudulent acts, specifically by falsely pretending to possess power, influence, qualifications, property, credit, agency, business or transactions. The Court used this to convict Arriola for falsely pretending to possess agency to sell the property.
• Section 36, Rule 130, Rules of Court — Provides that testimony must be confined to personal knowledge and excludes hearsay evidence. The Court discussed this to explain the general rule and its exception regarding independently relevant statements.
• Section 27, Rule 130, Rules of Court — Provides that in criminal cases, an offer of compromise by the accused may be received in evidence as an implied admission of guilt. The Court applied this to Arriola's return of the money and issuance of checks as implied admissions of guilt.
• Articles 1874 and 1878(5), Civil Code — Require a special power of attorney for the sale of real estate and specify that an authority to sell must be clear and unmistakable. The Court cited these to establish that Arriola's authorization to merely receive payment did not constitute authority to sell.
• Republic Act No. 10951 — Adjusted the amount thresholds for penalties under Article 315 of the RPC. The Court applied Section 85 thereof to modify the penalty from the range imposed by the RTC and CA.