Lim vs. People of the Philippines

In a prosecution for fencing under PD 1612, the prosecution must prove beyond reasonable doubt that a robbery or theft was committed and that the accused knew or should have known that the item was stolen; a conviction cannot rest on a mode of knowledge not alleged in the Information, and a notarized affidavit of ownership from the seller may overcome the statutory presumption of knowledge.

Mariano Lim was the proprietor of Basco Metal Supply, a business dealing in used equipment in Matina, Davao City. The Komatsu Road Grader at the center of the case was allegedly part of the equipment of the Second Rural Road Improvement Project (SRRIP) of the DPWH in Isulan, Sultan Kudarat. The governing statute is Presidential Decree No. 1612, the Anti-Fencing Law of 1979, which defines fencing, creates a presumption of knowledge under Section 5, and imposes a clearance/permit requirement under Section 6 on covered buy-and-sell establishments.

Mariano Lim was the proprietor of Basco Metal Supply, a business in Matina, Davao City that dealt in used equipment. An Information dated June 27, 1997 charged him with violating Presidential Decree No. 1612, the Anti-Fencing Law of 1979. The Information alleged that on or about January 16, 1997, in Davao City, Lim purchased and received for P400,000 one Komatsu Road Grader with chassis model and serial number GD-51R-100049 and engine serial number 6D951-55845, owned by the Second Rural Road Improvement Project (SRRIP) PMO-DPWH of Isulan, Sultan Kudarat, which was lodged for repair at the Facoma Compound of Poblacion Norala, South Cotabato, and that he possessed it knowing it was stolen. The Information alleged damage to the complainant in the grader’s true value of P2,000,000. Lim pleaded not guilty, and trial on the merits followed.

The prosecution presented Engr. Herminio Gulmatico, project engineer of the SRRIP PMO-DPWH of Isulan, Sultan Kudarat, and SPO4 Alfredo T. Santillana. Santillana testified that in January 1997 he was an investigator of the theft and robbery section of Police Precinct No. 3, Talomo, Davao City; that in the afternoon of January 31, 1997, Gulmatico sought assistance in recovering the Komatsu Road Grader; that Gulmatico informed him the equipment could be found at Basco Metal Supply along McArthur Highway; and that after verification, a search warrant was applied for and served at Basco Metal Supply, where the equipment was found. Gulmatico testified that he was the project engineer; that on July 1, 1996 he received the heavy equipment from Engineer Ireneo Veracion, the former project engineer; that sometime in June 1997 the equipment was in the Facoma Compound in Norala, South Cotabato undergoing repairs; that around the third week of January 1997 he was informed the equipment had been removed from the compound by Petronilo Banosing; that he was told it was loaded on a ten-wheeler truck and brought to Davao City at Km. 3 McArthur Highway; and that he proceeded to Davao City and sought the assistance of the Talomo Police Precinct, whose search warrant led to its discovery at Basco Metal Supply.

Gulmatico also testified that on January 26, 1997 he was informed by his driver, Venecio Calderon, that the grader had been lodged for repair in the compound of Petronilo Banosing in the evening of January 26, 1997, and that he reported the matter to the police on January 27, 1997. On cross-examination, however, he admitted that he received no confirmation from the DPWH Manila office as to who purchased the grader; that there were no markings on the unit; that the SRRIP project was funded by the World Bank; and that he received no reply from Project Director Mamaente regarding whether the unit was purchased by the World Bank. The prosecution also presented a Memorandum Receipt, but it did not state that the grader was owned by the DPWH; the portions for date acquired, property number, classification number, and unit value were blank.

Lim was the sole witness for the defense. He testified that he bought the heavy equipment from Petronilo Banosing for P400,000; that Banosing showed him a Certificate of Ownership stating that the equipment was his; and that he checked with the DPWH in Manila and found that the subject heavy equipment was not included in the inventory of the DPWH. He later testified that he purchased the grader on January 17, 1997, as evidenced by a Deed of Sale of the same date, and that he was in the business of buying used equipment, including graders. The trial court assessed the grader’s value at P100,000 because essential parts of the engine were already removed at the time of its discovery, while Lim testified that he paid P400,000.

The RTC found that a theft was committed when Petronilo Banosing took the heavy equipment from the Facoma Compound in Norala, South Cotabato on January 16, 1997, and that a case for theft was filed; that the stolen equipment was found at Basco Metal Supply, which was in the business of buying used equipment; and that Lim failed to rebut the presumption under PD 1612 because the Certificate of Ownership was self-serving and he should have secured a police clearance. The CA likewise found that Lim was engaged in buying and selling equipment as proprietor of Basco Metal Supply, that he should have exercised more diligence and prudence in ascertaining whether Banosing owned the grader, and that the circumstances of the sale should have put him on guard.

• Non-Proof of Theft / Fugitive Accused: Petitioner argued that the CA erred in convicting him for violation of PD 1612 because the crime of theft had not been proven in court and the person accused of theft was at-large or a fugitive from justice.
• Good Faith Purchaser / Lack of Intent to Gain: Petitioner maintained that the CA erred in convicting him notwithstanding that he was a purchaser for value and in good faith, without intent to gain.
• Memorandum Receipt as Ownership Evidence: Petitioner argued that the CA erred when it considered the DPWH Memorandum Receipt as evidence of ownership of the Komatsu Road Grader.
• Insufficiency of Evidence: Petitioner argued that the CA erred in convicting him even if his guilt was not proven beyond reasonable doubt.

• All Elements Proven: Respondent argued that all the elements for the offense of violation of the Anti-Fencing Law and the guilt of petitioner were established and proved by the prosecution beyond reasonable doubt.
• Rule 45 / Factual Issues: Respondent maintained that the factual issues raised by petitioner do not fall under the recognized exceptions to the rule that only questions of law may be entertained in a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
• Presumption of Regularity Overturned: Respondent argued that the presumption of regularity of the notarized Affidavit of Ownership had been overturned and that ownership of the subject grader was conclusively established by the prosecution.

• Commission of Theft (First Element): Whether the prosecution proved that a theft had been committed.
• Ownership of the Grader: Whether the prosecution sufficiently established DPWH’s ownership of the Komatsu Road Grader.
• Hearsay Testimony: Whether Engr. Gulmatico’s testimony on the alleged theft had probative value despite being based on third-party information.
• Knowledge and Statutory Presumption: Whether petitioner knew or should have known that the grader was stolen, and whether he overcame the presumption under Section 5 of PD 1612.
• Section 6 Clearance/Permit: Whether petitioner was required to secure a police clearance or permit under Section 6 of PD 1612.
• Intent to Gain / Good Faith: Whether petitioner acted without intent to gain as a purchaser for value and in good faith.
• Right to be Informed: Whether petitioner’s conviction violated his right to be informed of the nature and cause of the accusation because the Information alleged “knowing” while the trial court convicted on “should have known.”
• Sufficiency of Evidence: Whether guilt was proven beyond reasonable doubt.

• Commission of Theft (First Element): No. The prosecution failed to establish that theft had been committed; Gulmatico’s testimony was hearsay and no competent evidence proved the taking.
• Ownership of the Grader: No. The prosecution failed to prove DPWH ownership; Gulmatico’s testimony and the Memorandum Receipt did not establish ownership.
• Hearsay Testimony: No. Gulmatico’s statements were hearsay under Rule 130, Section 36, and no exception applied; they had no probative value.
• Knowledge and Statutory Presumption: No. Petitioner overcame the Section 5 presumption by presenting Banosing’s duly notarized Affidavit of Ownership, which enjoyed the presumption of regularity; the prosecution did not rebut it with clear and convincing evidence.
• Section 6 Clearance/Permit: No. Section 6 applies only to covered buy-and-sell establishments dealing in items from unlicensed dealers and offering them for sale to the public; the first and third requisites were not met, and no theft had been reported when petitioner bought the grader.
• Intent to Gain / Good Faith: No. The prosecution did not prove intent to gain or bad faith; petitioner paid P400,000 although the court assessed the grader at P100,000, supporting good faith.
• Right to be Informed: Yes, violated. The Information alleged “knowing” the grader was stolen, but conviction rested on “should have known,” a mode not alleged; every element must be alleged.
• Sufficiency of Evidence: No. The prosecution failed to prove the first and third essential elements beyond reasonable doubt; acquittal was proper.

• Commission of Theft (First Element): Fencing requires as its first element that a crime of robbery or theft has been committed. Theft under Article 308 of the Revised Penal Code requires (1) taking of personal property; (2) the property belongs to another; (3) the taking is done with intent to gain; (4) the taking is without the owner’s consent; and (5) the taking is accomplished without violence against or intimidation of persons or force upon things. The CA correctly ruled that conviction of the principal in theft is not necessary for fencing, but the prosecution still had to prove that theft was committed. It failed. Gulmatico did not establish DPWH ownership, and his testimony on the alleged taking was hearsay. Thus the first element was not established.
• Ownership of the Grader: The prosecution failed to prove DPWH’s ownership. Gulmatico testified that the grader was assigned to his office in 1989 and lost ten years later, and that he received it from the previous project engineer under a Memorandum Receipt. On cross, he admitted no confirmation from DPWH Manila as to who purchased it, no markings, World Bank funding, and no reply from Project Director Mamaente. The Memorandum Receipt did not state DPWH ownership; the date acquired, property number, classification number, and unit value were blank. At best, it showed Gulmatico received the grader for safekeeping and responsibility. The DPWH was expected to have a database, and its failure to present sufficient proof of ownership placed doubt on its claim. Thus ownership was not established.
• Hearsay Testimony: Section 36, Rule 130 requires witnesses to testify only on facts of personal knowledge; otherwise testimony is hearsay. Hearsay has no probative value unless an exception applies. Gulmatico’s statements on the alleged theft were based on information from third persons—his driver Venecio Calderon, Basilio Elaga, Ronnie Digdigan, and others—none of whom were presented to testify under oath. None of the exceptions applied. The trial court therefore erred in giving probative value to his testimony.
• Knowledge and Statutory Presumption: The third element requires that the accused knew or should have known that the item was derived from robbery or theft. The trial court and CA ruled that Lim failed to rebut the presumption under PD 1612. The Supreme Court disagreed. Lim presented a duly notarized Affidavit of Ownership from Petronilo Banosing. A notarized document is a public document that enjoys the presumption of regularity; it is prima facie evidence of the truth of the facts stated and a conclusive presumption of existence and due execution, and can be overcome only by clear and convincing evidence. The prosecution did not present such evidence. Ownership of the grader was not conclusively established by the prosecution; Gulmatico could not confirm it, and the Memorandum Receipt failed to establish it. Lim thus overcame the presumption, and the third element was wanting.
• Section 6 Clearance/Permit: The RTC and CA ruled that Lim should have secured a police clearance under Section 6 of PD 1612. Section 6 applies only when three conditions are met: (1) the person, store, establishment, or entity is in the business of buying and selling any good, article, item, object, or anything of value; (2) the item was obtained from an unlicensed dealer or supplier; and (3) the item is to be offered for sale to the public. The first and third requisites were not met. It was not established that Lim was engaged in the business of buy and sell, nor that he intended to sell or was actually selling the grader to the public. The CA’s presumption that he was engaged in buy and sell was unsupported; the grader was found in several pieces and different locations within his compound. Moreover, requiring a police clearance was futile because no police report of the alleged theft existed when the grader was offered to Lim. Lim purchased it on January 17, 1997 by a Deed of Sale of the same date; Gulmatico discovered the alleged theft only on January 26, 1997 and reported it on January 27, 1997, ten days after the sale. Even if Lim had secured a clearance, it would not have shown the grader was stolen.
• Intent to Gain / Good Faith: The fourth element requires intent to gain for the accused or another. The prosecution did not establish it. The trial court assessed the grader at P100,000 because engine parts were missing, while Lim testified he paid P400,000. The disparity showed Lim believed in good faith in Banosing’s representations, since it is contrary to common human experience for a businessman to pay much more than the actual value unless made to believe otherwise. There was also no proof that Lim intended to sell the grader to the public. Good faith and lack of intent to gain negated the offense.
• Right to be Informed: The Information alleged that Lim possessed the grader “knowing that said Komatsu Road Grader was stolen,” corresponding to the first part of the third element—actual knowledge. The trial court convicted him on the ground that he “should have known” that the grader was stolen, corresponding to the second part of the third element. Every element constituting the offense must be alleged in the Information; the accused cannot be convicted of an offense unless it is charged or necessarily included. A variance between allegation and proof is fatal if material and prejudicial. Convicting Lim on a mode of knowledge not alleged violated his constitutional right to be informed of the nature and cause of the accusation.
• Sufficiency of Evidence: In criminal prosecutions, the burden is on the prosecution to establish guilt beyond reasonable doubt and to prove each and every element of the crime charged in the Information. The Information must correctly reflect the charges before conviction. The prosecution failed to prove the first and third essential elements of fencing. Lim was therefore entitled to acquittal based on insufficiency of evidence and reasonable doubt.

• Elements of Fencing under PD 1612 — Fencing requires: (1) a crime of robbery or theft has been committed; (2) the accused, not a principal or accomplice in the robbery or theft, buys, receives, possesses, keeps, acquires, conceals, sells or disposes, or buys and sells, or in any manner deals in any article, item, object, or anything of value derived from the proceeds of the crime; (3) the accused knows or should have known that the article, item, object, or thing of value was derived from the proceeds of robbery or theft; and (4) intent to gain for himself or another. The Court applied this test and found the first and third elements unproved.
• Proof of Theft in Fencing; Principal’s Conviction Not Required — Conviction of the principal in the crime of theft is not necessary for an accused to be convicted of fencing, but the prosecution must still prove that a theft was committed. The Court found the prosecution failed to establish theft because ownership and the taking were not competently proved.
• Hearsay Rule and Personal Knowledge — Under Section 36, Rule 130, witnesses may testify only on facts of which they have personal knowledge; otherwise, their testimony is hearsay and inadmissible. Hearsay has no probative value unless an exception applies. Gulmatico’s testimony on the alleged theft was based on third-party information and was therefore hearsay.
• Presumption of Regularity of Notarized Documents — A document acknowledged before a notary public is a public document that enjoys the presumption of regularity; it is prima facie evidence of the truth of the facts stated and a conclusive presumption of its existence and due execution. To overcome the presumption, evidence must be clear and convincing. The notarized Affidavit of Ownership from Banosing overcame the Section 5 presumption against Lim.
• Section 5 Presumption of Knowledge in Fencing — The possessor of proceeds of robbery or theft is presumed to have knowledge that the items were stolen, but the presumption may be rebutted. Lim rebutted it with the notarized Affidavit of Ownership; the prosecution did not overcome the affidavit with clear and convincing evidence.
• Section 6 Clearance/Permit Requirement — Section 6 of PD 1612 requires covered stores, establishments, or entities dealing in the buy and sell of goods obtained from an unlicensed dealer or supplier to secure a police clearance before offering the items for sale to the public. It applies only if (1) the person or entity is in the business of buying and selling; (2) the item was obtained from an unlicensed dealer or supplier; and (3) the item is to be offered for sale to the public. The first and third conditions were absent.
• Right to be Informed of the Nature and Cause of the Accusation — Every element constituting the offense must be alleged in the Information. An accused cannot be convicted of an offense unless it is charged or necessarily included, and a material variance between allegation and proof is fatal. The Information alleged “knowing” but the conviction rested on “should have known,” violating this right.
• Burden of Proof in Criminal Cases — The prosecution bears the burden of proving the guilt of the accused beyond reasonable doubt and must prove each and every element of the crime charged in the Information. Failure to prove the first and third elements of fencing required acquittal.

• "The following are the essential elements of the crime of fencing: 1. A crime of robbery or theft has been committed; 2. The accused, who is not a principal or accomplice in the commission of the crime of robbery or theft, buys, receives, possesses, keeps, acquires, conceals, sells or disposes, or buys and sells, or in any manner deals in any article, item, object or anything of value, which has been derived from the proceeds of the said crime; 3. The accused knows or should have known that the said article, item, object or anything of value has been derived from the proceeds of the crime of robbery or theft; and: 4. There is on the part of the accused, intent to gain for himself or for another." — This is the Court’s canonical statement of the elements of fencing under PD 1612, which controlled the analysis of whether the conviction could stand.
• "Sec. 36, Rule 130 of the Rules of Court provides that witnesses can testify only with regard to facts of which they have personal knowledge; otherwise, their testimonies would be inadmissible for being hearsay." — The Court used this rule to reject Engr. Gulmatico’s testimony on the alleged theft because it was based on information from third persons not presented in court.
• "It is well settled that a document acknowledged before a notary public is a public document that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution. To overcome this presumption, there must be presented evidence that is clear and convincing." — This passage supplied the standard for evaluating Banosing’s notarized Affidavit of Ownership and for holding that Lim overcame the statutory presumption of knowledge.
• "No matter how conclusive and convincing the evidence of guilt may be, an accused cannot be convicted of any offense unless it is charged in the information on which he is tried or is necessarily included therein." — The Court invoked this principle to hold that Lim’s conviction violated his right to be informed because the Information alleged “knowing” while the trial court convicted on “should have known.”

• Norma Dizon-Pamintuan vs. People of the Philippines, G.R. No. 111426, July 11, 1994, 234 SCRA 63 — Cited for the essential elements of fencing under PD 1612.
• People of the Philippines vs. Erlindo Yam-Id alias “Ely,” G.R. No. 126116, June 21, 1999 — Cited for the rule that an appeal in a criminal case opens the whole action for review on any question, including those not raised by the parties.
• Luis Marcos Pi Laurel vs. Hon. Zeus C. Abrogar, Presiding Judge of the Regional Trial Court, Makati City, Branch 150, People of the Philippines & Philippine Long Distance Telephone Company, G.R. No. 155076, January 13, 2009 — Cited for the definition and elements of theft under Article 308 of the Revised Penal Code.
• Melanio Mallari y Liberato vs. People of the Philippines, G.R. No. 153911, December 10, 2004 — Cited for the rule that hearsay evidence has no probative value unless it falls within an exception.
• Rogelio Dantis vs. Julio Maghinang, Jr., G.R. No. 191696, April 10, 2013 — Cited for the reasons underlying the exclusion of hearsay evidence: absence of cross-examination, absence of demeanor evidence, and absence of oath.
• Ocampo vs. Land Bank of the Philippines, G.R. No. 164968, July 3, 2009, 591 SCRA 562, 571-572 — Cited for the presumption of regularity of notarized documents and the clear and convincing evidence needed to overcome it.
• Ariddya vs. People of the Philippines, G.R. No. 168486, June 27, 2006 — Cited for the rule that every element of the offense must be alleged in the Information and that a material variance between allegation and proof is fatal; footnote 36 also identifies Noe S. Andaya vs. People of the Philippines, G.R. No. 168486, June 27, 2006 for the same principle.

• Presidential Decree No. 1612, Section 3(a) — The RTC applied the Indeterminate Sentence Law in relation to this provision in imposing the penalty; the Supreme Court reversed the conviction, rendering the penalty moot.
• Presidential Decree No. 1612, Section 5 — Creates the presumption that a person in possession of proceeds of robbery or theft has knowledge that the items were stolen. The Court held Lim overcame this presumption by presenting Banosing’s duly notarized Affidavit of Ownership.
• Presidential Decree No. 1612, Section 6 — Requires covered stores, establishments, or entities dealing in the buy and sell of goods obtained from an unlicensed dealer or supplier to secure a clearance or permit from the station commander before offering the items for sale to the public. The Court held it inapplicable because Lim was not shown to be engaged in buy and sell and did not intend to sell the grader to the public; no theft had been reported when he purchased it.
• Revised Penal Code, Article 308 — Defines theft and its elements. The Court used it to explain the first element of fencing and found the prosecution failed to establish theft.
• Rules of Court, Rule 130, Section 36 — Provides that witnesses can testify only on facts of personal knowledge; otherwise, their testimony is inadmissible hearsay. The Court applied it to reject Gulmatico’s testimony on the alleged theft.
• Rules of Court, Rule 45 — Governs the Petition for Review on Certiorari filed by Lim. The Court entertained the petition and reversed the CA.
• Constitutional right to be informed of the nature and cause of the accusation — The decision invoked this right without quoting a specific constitutional article, holding that every element must be alleged in the Information and that a conviction cannot rest on a mode of knowledge not alleged.

Peralta, Perez, Reyes, and Perlas-Bernabe, JJ., concur. Perlas-Bernabe, J. was an additional member per raffle dated September 15, 2014.