Carganillo vs. People of the Philippines

The written agreement is the best evidence of the parties’ intention, and a conviction for estafa under Article 315, paragraph 1(b) stands where the accused received money in trust for a specific purpose and failed to deliver the agreed property or return the money upon demand, to the prejudice of the offended party; unsupported claims that the writing did not express the true agreement or that consent was vitiated by fraud do not overcome the written terms.

Teresita Lazaro was a rice trader in Rizal, Nueva Ecija, and Nenita Carganillo was alleged to be an “ahente” or agent in the buy-and-sell of palay. Their arrangement was governed by a “Kasunduan” that fixed a commission and the obligation to deliver palay or return funds. The offense charged is estafa defined and penalized under Article 315, paragraph 1(b) of the Revised Penal Code, as amended.

Teresita Lazaro, a rice trader in Rizal, Nueva Ecija, gave Nenita Carganillo ₱132,000.00 on September 23, 1998 for the purpose of buying palay. Carganillo, alleged to be an “ahente” or agent in the buy-and-sell of palay, agreed to deliver the palay to the Lazaro Palay Buying Station on or before November 28, 1998. According to the “Kasunduan” signed by Carganillo, the parties agreed that for every kilo of palay bought she would earn a commission of twenty centavos (₱0.20); if no palay was purchased and delivered on November 28, she had to return the ₱132,000.00 to Teresita within one week after November 28.

After Teresita failed to receive any palay or the ₱132,000.00 on November 28 and one week thereafter, she made oral and written demands on Carganillo for the return of the money, but the demands were ignored. She filed an affidavit-complaint for estafa before the Fiscal’s Office, and an Information for estafa was thereafter filed in court.

Carganillo pleaded not guilty and denied that she entered into a principal-agent agreement with, or received the ₱132,000.00 from, Teresita. She alleged that she owed Teresita a balance of ₱13,704.32 for fertilizers and rice that she purchased from the latter in 1995 and 1996, and that in November 1996 she was made to sign a blank “Kasunduan” that reflected no written date and amount. She likewise denied personally receiving any written demand letter from Teresita.

The trial court found that the receipts Carganillo presented to prove her loan obligation were vague, undated, and unsigned, and observed that the witnesses who testified that they saw her sign the “Kasunduan” were not even certain of the real transaction between her and Teresita. Both the RTC and the CA credited the “Kasunduan”—which Carganillo admittedly signed—as containing the terms of the agreement; the CA considered her claim that she signed it in blank belied by her admission of the existence or authenticity of the documentary exhibits during the prosecution’s formal offer of evidence and by her own testimony.

• Failure to Prove Guilt Beyond Reasonable Doubt: Petitioner argued that the CA erred in affirming the judgment of conviction despite the prosecution’s failure to prove her guilt of estafa beyond reasonable doubt.
• No Receipt of Money / No Principal-Agent Agreement: Petitioner maintained that she was not engaged in the business of buying and selling palay and that the “Kasunduan” did not contain their real agreement of a simple money loan; she never received the ₱132,000.00 from Teresita.
• Missing Element of Receipt in Trust: Petitioner argued that the prosecution failed to establish all the elements of estafa because an element requires that the offender receive money, goods, or other personal property in trust, on commission, for administration, or under any other obligation involving the duty to deliver or return the same.
• Fraud / Blank Document: Petitioner claimed that Teresita deceived her into signing a blank document, and that she signed the “Kasunduan” even though it had no date and amount written on it because Teresita led her to believe it would be used merely for show purposes with the bank.
• No Personal Written Demand: Petitioner denied personally receiving any written demand letter from Teresita.

• Sufficiency of Prosecution Evidence / Elements of Estafa: Whether the CA erred in affirming the conviction despite the prosecution’s alleged failure to prove beyond reasonable doubt all elements of estafa under Article 315, paragraph 1(b), particularly receipt of the ₱132,000.00 in trust.
• Parol Evidence / True Agreement: Whether the “Kasunduan” failed to express the true agreement of the parties, allowing petitioner to prove a simple money loan.
• Fraud / Vitiated Consent: Whether petitioner’s consent was vitiated by Teresita’s alleged deception in having her sign a blank “Kasunduan.”
• Penalty: Whether the CA correctly imposed the indeterminate penalty for estafa.

• Sufficiency of Prosecution Evidence / Elements of Estafa: No. All elements of estafa under Article 315, paragraph 1(b) were present: petitioner received ₱132,000.00 in trust, misappropriated it by failing to return the amount upon demand, and prejudiced Teresita.
• Parol Evidence / True Agreement: No. The “Kasunduan” was the best evidence of the parties’ intention; petitioner’s evidence did not support her claim that it failed to express a simple loan, and the factual findings affirmed by the CA were accorded finality.
• Fraud / Vitiated Consent: No. The alleged deception was not shown to be causal, serious, and sufficient to lead an ordinarily prudent person into error; petitioner’s own account negated her claim of being tricked.
• Penalty: Yes. The CA’s penalty was in accordance with law, following People vs. Temporada.

• Sufficiency of Prosecution Evidence / Elements of Estafa: Under Article 315, paragraph 1(b), estafa by abuse of confidence requires: (a) receipt of money, goods, or other personal property in trust, on commission, for administration, or under any other obligation involving the duty to deliver or return the same; (b) misappropriation or conversion, or denial of receipt; (c) prejudice to another; and (d) demand by the offended party. The Court found all present. The “Kasunduan,” admittedly signed by petitioner, stated that she received ₱132,000.00 in trust for buying palay and obligated her to deliver the palay by November 28, 1998 or return the money one week after. When she failed to deliver or return the amount upon demand, misappropriation and prejudice were established. The CA also held that even a verbal query as to the whereabouts of the money was tantamount to demand, and petitioner failed to refute Teresita’s claim that she went to petitioner’s house to ask for the palay and/or the return of the money. The RTC’s findings that petitioner’s receipts were vague, undated, and unsigned, and that her witnesses were uncertain of the real transaction, were affirmed by the CA and accorded respect and finality.
• Parol Evidence / True Agreement: The agreement or contract between the parties is the formal expression of their rights, duties, and obligations and the best evidence of their intention. When terms are reduced to writing, the writing contains all terms agreed upon, subject to the exceptions in Section 9, Rule 130 of the Rules of Court, including failure of the written agreement to express the true intent of the parties. Petitioner invoked that exception, claiming the “Kasunduan” actually reflected a simple loan. The documentary and testimonial evidence, however, failed to support her claim. The RTC found the receipts vague, undated, and unsigned, and the witnesses uncertain of the real transaction. Because the factual findings were affirmed by the CA, the Court did not disturb them.
• Fraud / Vitiated Consent: For fraud to vitiate consent, the deception must be the causal (dolo causante) inducement to the contract and must be serious, sufficient to impress or lead an ordinarily prudent person into error under the circumstances. Petitioner claimed Teresita deceived her into signing a blank “Kasunduan” for show purposes with the bank. The Court found no vitiated consent: petitioner herself narrated that after she signed the “Kasunduan,” Teresita made her execute a deed of sale over her property, which she refused to sign. This negated her self-serving allegation that she was tricked into signing a blank document, as she was fully aware of the possible implications of signing a document.
• Penalty: The Court quoted People vs. Temporada: for estafa where the amount defrauded exceeds ₱22,000.00, the prescribed penalty is prisión correccional maximum to prisión mayor minimum. The minimum term is taken from the penalty next lower or anywhere within prisión correccional minimum and medium (6 months and 1 day to 4 years and 2 months). The maximum term is taken from the prescribed penalty in its maximum period, adding one year for every ₱10,000.00 in excess of ₱22,000.00, provided the total does not exceed 20 years. The prescribed penalty is divided into three equal portions under Article 65 of the Revised Penal Code; the maximum period is from 6 years, 8 months, and 21 days to 8 years. The incremental penalty is added to anywhere from 6 years, 8 months, and 21 days to 8 years. In computing the incremental penalty, the amount defrauded is subtracted by ₱22,000.00, and the difference is divided by ₱10,000.00, with any fraction discarded. The Court affirmed the CA’s penalty as fully in accordance with law. It also noted Lito Corpuz vs. People of the Philippines, which recognized the perceived injustice in penalties based on 1932 values, but held that the Court cannot modify the range of penalties without impermissibly encroaching on legislative power and engaging in judicial legislation.

• Estafa by abuse of confidence under Article 315, paragraph 1(b), Revised Penal Code — Elements: (a) money, goods, or other personal property received by the offender in trust, on commission, for administration, or under any other obligation involving the duty to make delivery of or return the same; (b) misappropriation or conversion of such money or property, or denial of receipt; (c) prejudice to another; and (d) demand by the offended party. Applied: the “Kasunduan” showed receipt in trust, failure to deliver palay or return the money upon demand, and prejudice to Teresita.
• Parol Evidence Rule — When the terms of an agreement are reduced to writing, the writing is considered to contain all terms agreed upon, and no evidence of such terms other than the contents of the written agreement may be admitted between the parties and their successors in interest. Exceptions under Section 9, Rule 130 include intrinsic ambiguity, mistake or imperfection, failure to express the true intent, validity, or other terms agreed after execution. Applied: petitioner invoked failure to express the true intent, but her evidence failed to support the claim, so the written “Kasunduan” prevailed.
• Fraud as vitiating consent (dolo causante) — Fraud must be the causal inducement to the making of the contract, serious in character, and sufficient to impress or lead an ordinarily prudent person into error, taking into account the circumstances. Applied: no vitiated consent was found; petitioner’s own narration that she refused a later deed of sale negated her claim that she was tricked into signing a blank “Kasunduan.”
• Finality of factual findings affirmed by the Court of Appeals — Where the trial court’s factual findings are affirmed in toto by the Court of Appeals, there is great reason not to disturb them, and they are generally not reviewable by the Supreme Court. Applied: the RTC’s findings on the credibility of the “Kasunduan” and the weakness of petitioner’s receipts and witnesses were affirmed by the CA and respected.
• Penalty for estafa exceeding ₱22,000.00 — The prescribed penalty is prisión correccional maximum to prisión mayor minimum. The minimum term is taken from the penalty next lower or anywhere within prisión correccional minimum and medium; the maximum term is taken from the prescribed penalty in its maximum period, adding one year for every ₱10,000.00 in excess of ₱22,000.00, not exceeding 20 years. The prescribed penalty is divided into three equal portions under Article 65, with the maximum period from 6 years, 8 months, and 21 days to 8 years; the incremental penalty is added within that range. Applied: the CA’s modified penalty was affirmed.
• No judicial legislation on penalties — The Court cannot modify the range of penalties for crimes against property, such as estafa, even if based on values fixed in 1932, because doing so would encroach on the legislative branch and constitute proscribed judicial legislation. Applied: the Court acknowledged the perceived injustice but declined to alter the penalty ranges.

• "Under Article 315, paragraph 1(b) of the Revised Penal Code, as amended, the offense of estafacommitted with abuse of confidence requires the following elements: (a) that money, goods or other personal property is received by the offender in trust or on commission, orfor administration, or under any other obligation involving the duty to make delivery of or to return the same[;] (b) that there be misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt[;] (c) that such misappropriation or conversion or denial is to the prejudice of another; and (d) there is demand by the offended party to the offender." — This passage states the elements of estafa by abuse of confidence, the controlling rule applied to affirm the conviction.
• "It is settled that the agreement or contract between the parties is the formal expression of the parties’ rights, duties, and obligations and is the best evidence of the parties’ intention.Thus, when the terms of an agreement have been reduced into writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement." — This passage articulates the parol evidence rule, which the Court used to uphold the “Kasunduan” over petitioner’s claim of a simple loan.
• "For fraud to vitiate consent, the deception employed must be the causal (dolo causante) inducement to the making of the contract, and must be serious in character. It must be sufficient to impress or lead an ordinarily prudent person into error, taking into account the circumstances of each case." — This passage defines the standard for fraud as a ground to vitiate consent, which the Court applied to reject petitioner’s claim of deception.
• "This Court, however, cannot modify these range of penalties in our decisions, as such action would be an impermissible encroachment upon the power of the legislative branch of government and would constitute proscribed judicial legislation." — This passage explains why the Court affirmed the statutory penalty despite recognizing the perceived injustice in penalties based on outdated monetary values.

• Aw vs. People, G.R. No. 182276, March 29, 2010, 617 SCRA 64 — Cited for the elements of estafa under Article 315, paragraph 1(b) of the Revised Penal Code.
• Gamboa, Rodriguez, Rivera & Co., Inc. vs. Court of Appeals, G.R. No. 117456, May 6, 2005, 458 SCRA 68, 73 — Cited for the parol evidence rule: a written agreement is the best evidence of the parties’ intention and contains all terms agreed upon.
• Uriarte, et al. vs. People, G.R. No. 137344, January 30, 2001, 350 SCRA 580 — Cited for the rule that factual findings of the trial court affirmed in toto by the Court of Appeals are accorded respect and finality.
• Woodhouse vs. Halili, 93 Phil. 526, 537 (1953) — Cited for the requirement that fraud, to vitiate consent, must be the causal inducement to the contract.
• Mayor vs. Belen, G.R. No. 151035, June 3, 2004, 430 SCRA 561, 565 — Cited for the requirement that fraud must be sufficient to lead an ordinarily prudent person into error.
• People vs. Temporada, G.R. No. 173473, December 17, 2008, 574 SCRA 258, 302 — Cited for the computation of the penalty for estafa where the amount defrauded exceeds ₱22,000.00.
• Lito Corpuz vs. People of the Philippines, G.R. No. 180016, April 29, 2014 — Cited for the recognition of the perceived injustice in penalties for crimes against property based on 1932 values, while holding that the Court cannot modify them without judicial legislation.

• Article 315, paragraph 1(b), Revised Penal Code, as amended — Defines and penalizes estafa committed with abuse of confidence; the Court applied its four elements to affirm petitioner’s conviction.
• Article 315, paragraph 2(d), Revised Penal Code — Cited in the penalty discussion as prescribing prisión correccional maximum to prisión mayor minimum when the amount defrauded exceeds ₱22,000.00.
• Section 9, Rule 130, Rules of Court — Lists exceptions to the parol evidence rule, including failure of the written agreement to express the true intent of the parties; petitioner invoked this exception but failed to support it.
• Article 1344, Civil Code — Provides that fraud must be serious and not employed by both contracting parties to make a contract voidable; cited in rejecting petitioner’s claim of vitiated consent.
• Article 65, Revised Penal Code — Cited in the penalty computation for dividing the prescribed penalty into three equal portions to determine the maximum period.
• Indeterminate Sentence Law — Applied by the RTC in imposing the original sentence, which the CA later modified.
• Rule 45, Rules of Court — Basis for petitioner’s petition for review on certiorari before the Supreme Court.

Antonio T. Carpio (Chairperson), Mariano C. Del Castillo, Jose Catral Mendoza, and Marvic M.V.F. Leonen concurred. No separate concurring opinions are summarized in the text.