Osorio vs. People of the Philippines

A person who receives money for investment in a particular company but diverts it to another without the investor’s genuine consent may be convicted of other deceits under Article 318 of the Revised Penal Code, even if charged with estafa under Article 315(2)(a), because Article 318 is a catch-all provision and the offense proved is necessarily included in the offense charged.

Josefina O. Gabriel was a proprietor of a stall in Paco Market, Manila, while Maria C. Osorio was an agent of Philippine American Life and General Insurance Company (Philam Life) and also a referral agent of Philippine Money Investment Asset Management (PMIAM). Gabriel had availed Philam Life insurance plans through Osorio and had been paying quarterly premiums. The Revised Penal Code distinguishes estafa by false pretenses under Article 315(2)(a), which enumerates specific deceits and “other similar deceits,” from the catch-all offense of other deceits under Article 318; Rule 120, Section 4 of the Revised Rules of Criminal Procedure governs conviction for an offense proved that is included in the offense charged.

Josefina O. Gabriel was a proprietor of a stall in Paco Market, Manila. Sometime in December 2000, Maria C. Osorio visited Gabriel’s store and introduced herself as an agent of the Philippine American Life and General Insurance Company (Philam Life), presenting her company ID and calling card as proof. Osorio offered insurance coverage, but Gabriel asked her to return later as she needed more time to think about the offer. When Osorio returned, Gabriel availed Philam Life’s Tri-Life Plan and Excelife Gold Package, and she consistently paid the quarterly premiums from February 2001 to November 2001.

On November 19, 2001, Osorio offered Gabriel an investment opportunity with Philam Life Fund Management. The proposed investment would be placed under a time deposit scheme and would earn 20% annually. Osorio informed Gabriel that the proceeds of her investment could be channeled to pay for her insurance premiums. Enticed by the offer, Gabriel tendered P200,000.00 to Osorio, who in turn issued Philam Life receipts. A few months later, Gabriel discovered that her insurance policies had lapsed due to non-payment of premiums. When Gabriel confronted Osorio, Osorio assured Gabriel that she would take responsibility.

In May 2002, Gabriel received a letter from Philippine Money Investment Asset Management (PMIAM), thanking her for investing in the company and informing her that her investment would earn interest on a semi-annual basis starting June 20, 2002. Gabriel confronted Osorio on why her investment was diverted to PMIAM. Osorio explained that PMIAM investments would yield a higher rate of return. Displeased, Gabriel asked for a refund of her initial investment. On August 2, 2002, Gabriel received P13,000.00 from PMIAM as evidenced by PMIAM Voucher No. 001854. In spite of this, Gabriel insisted on the refund. Later, PMIAM informed Gabriel that her initial investment and unpaid interest income would be released to her on May 14, 2004, but she was unable to recover it. She then visited the Philam Life office to see Osorio, but Osorio was nowhere to be found; Philam Life referred Gabriel to a certain Atty. Cabugoy, who sent a demand letter to Osorio.

The prosecution presented Gabriel and Alberto G. Fernandez, head of Philam Life’s Business Values and Compliance Department. Fernandez testified that Osorio was a Philam Life agent and that she was allowed to engage in other lines of work. He stated that Osorio should not have issued Philam Life receipts for Gabriel’s P200,000.00 investment; although the receipts were genuine, they should only be issued for insurance premium payments. The defense presented Osorio as its sole witness. Osorio admitted that aside from being a Philam Life agent, she was also a referral agent of PMIAM, and she received P4,000.00 from the company as commission for Gabriel’s investment. She asserted that she initially planned to place Gabriel’s investment in Philam Life but decided later to divert it to PMIAM since the latter offered a higher rate of return. When Osorio informed Gabriel of her decision, Gabriel allegedly gave her consent. Osorio also claimed that her husband failed to recover his P300,000.00 investment in PMIAM due to internal problems with its mother company in the United States.

The Regional Trial Court found that Gabriel was induced to part with her money through Osorio’s misrepresentation that it would be invested in Philam Life, a company with an established reputation. It rejected Osorio’s defense that Gabriel later consented to the placement, finding that when Gabriel was informed of the placement with PMIAM, she had no other choice but to agree.

• Failure to Prove Estafa Elements: Petitioner asserted that not all the elements of estafa under Article 315(2)(a) of the Revised Penal Code were established by the prosecution, and that only damage on the part of the private complainant was proven.
• Absence of Deceit: Petitioner argued that she did not employ any deceit in soliciting private complainant’s investment, as nothing in the records showed that she used a fictitious name or pretended to possess power, agency, or certain qualifications; Fernandez even admitted that she was a Philam Life agent.
• Good Faith and Consent: Petitioner claimed that she acted in good faith when she decided to place private complainant’s investment in PMIAM, that she did not conceal this from private complainant, and that private complainant later agreed to the placement.
• Factual Review: Petitioner conceded that the case involved mixed questions of fact and law, but claimed that the Court is authorized to undertake a factual review if the findings of the lower courts do not conform to the evidence on record.

• Factual Issue / Rule 45: Respondent claimed that the main issue raised by petitioner is factual in nature and thus beyond the scope of review in a Rule 45 petition.
• No Error in Conviction: Respondent argued that even if the Court undertakes a factual review, the lower courts did not err in convicting petitioner of estafa.
• Misrepresentation and Inducement: Respondent maintained that petitioner misrepresented to private complainant that the latter’s investment would be placed in Philam Life and that its proceeds would be channeled to pay for her insurance premiums, and that this misrepresentation caused private complainant to part with her money.

• Nature of Review: Whether the Supreme Court may undertake a factual review despite the Rule 45 limitation to questions of law.
• Estafa under Article 315(2)(a): Whether petitioner’s acts constitute estafa by means of deceit under Article 315(2)(a) of the Revised Penal Code.
• Other Deceits under Article 318: Whether petitioner may be convicted of other deceits under Article 318 of the Revised Penal Code despite being charged under Article 315(2)(a).
• Consent and Good Faith: Whether private complainant’s alleged consent or ratification of the PMIAM investment negates criminal liability.
• Penalty: Whether the imposable penalty should be arresto mayor and a fine under Article 318.

• Nature of Review: Yes. The determination of whether deceit or fraud is present in estafa is a question of fact, and petitioner’s contention that the lower courts’ findings did not conform to the evidence was well-taken; the Court reviewed the records.
• Estafa under Article 315(2)(a): No. The prosecution failed to prove the specific false pretense or fraudulent representation under Article 315(2)(a); there was no fictitious name, no false claim of agency, and no proof that petitioner pretended to possess authority to solicit investments.
• Other Deceits under Article 318: Yes. The misrepresentation that the money would be invested in Philam Life and that its proceeds would pay premiums, reinforced by Philam Life receipts, constituted other deceit under Article 318; that offense is necessarily included in the charge, so conviction under the variance rule is proper.
• Consent and Good Faith: No. The alleged ratification was not genuine consent; private complainant asked for a refund, her policies had lapsed, and she was trapped with no other choice but to agree.
• Penalty: The penalty is arresto mayor in its medium period, two months and one day to four months, and a fine of P200,000.00; the Indeterminate Sentence Law is inapplicable because the maximum term does not exceed one year.

• Nature of Review: Rule 45, Section 1 of the Rules of Court limits petitions for review to questions of law, and the factual findings of the trial court, especially when affirmed by the Court of Appeals, are binding. A question of law arises when doubt or difference exists as to what the law is on a certain set of facts; a question of fact pertains to the truth or falsity of alleged facts and includes an assessment of the probative value of evidence. Whether deceit or fraud is present in estafa is a question of fact because it involves review of the lower court’s appreciation of the evidence. Petitioner conceded that the case involved mixed questions but claimed factual review was authorized if the findings did not conform to the evidence; this contention was well-taken, so the records were reviewed.

• Estafa under Article 315(2)(a): Article 315(2)(a) punishes defraudation by false pretenses or fraudulent acts executed prior to or simultaneously with the fraud, including use of a fictitious name, falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or other similar deceits. The elements are: (a) a false pretense or fraudulent representation as to power, influence, qualifications, property, credit, agency, business or imaginary transactions; (b) made prior to or simultaneously with the fraud; (c) the offended party relied on it and was induced to part with money or property; and (d) damage. The prosecution failed to prove the first element under the specific modalities. Petitioner neither used a fictitious name nor misrepresented herself as a Philam Life agent; she presented her company ID and calling card, and Fernandez admitted she had been a Philam Life agent as of December 2000. There was no proof she pretended to possess authority to solicit investments for Philam Life Fund Management; Fernandez only stated that issuing Philam Life receipts for the P200,000.00 investment was improper because receipts were for insurance premium payments. Absent contrary evidence, petitioner was presumed authorized to solicit money for investment purposes. Deceit under Article 315(2)(a) must be proven beyond reasonable doubt; Aricheta vs. People illustrated that failure to prove the alleged false representation precludes criminal liability. The false representations actually made—that the money would be invested in Philam Life Fund Management and that proceeds could pay insurance premiums—induced private complainant to part with funds and stop paying premiums, and the Philam Life receipts led her to believe the money was invested. These representations, however, fell beyond the scope of “other similar deceits” under Article 315(2)(a). Guinhawa vs. People interpreted that phrase as limited by ejusdem generis to acts of the same nature as those specifically enumerated, not all kinds of deceit.

• Other Deceits under Article 318: Article 318 is broad and intended as a catch-all provision covering all other kinds of deceit not falling under Articles 315, 316, and 317. Its elements are: (a) a false pretense, fraudulent act or pretense other than those in Articles 315, 316, and 317; (b) made or executed prior to or simultaneously with the commission of the fraud; and (c) the offended party suffered damage or prejudice. All elements were present. Petitioner falsely represented that the money would be invested in Philam Life and that proceeds would pay insurance premiums; this induced private complainant to part with funds and disregard premium payments; because petitioner deviated by placing the investment in another company, the insurance policies lapsed. The case differed from money market transactions where dealers are usually given full discretion on where to place client investments. In MERALCO vs. Atilano, the ruling explained that a dealer given discretion may only face civil liability for deviation, but a dealer obliged to place investments only in designated securities may face civil and criminal prosecution. Here, the investment was originally agreed to be in Philam Life. Although charged under Article 315(2)(a), petitioner could be convicted under Article 318. As a rule, an accused can only be convicted of the crime charged, but Rule 120, Section 4 provides that when there is variance between the offense charged and that proved, and the offense charged is included in or necessarily includes the offense proved, the accused shall be convicted of the offense proved included in the charge, or of the offense charged included in the offense proved. Sales vs. Court of Appeals upheld conviction under Article 318 despite a charge under Article 315(2)(d), because the elements of other deceits also constitute an element of estafa by deceit and the right to be informed was not violated. In this case, Article 318 is necessarily included in Article 315(2)(a).

• Consent and Good Faith: The defense that private complainant eventually consented to the PMIAM investment deserved scant consideration. Records showed she asked for a refund when she discovered the investment was placed in PMIAM. The alleged ratification hardly qualified as genuine consent. When she discovered the transaction, her insurance policies had already lapsed, and she was trapped in a difficult situation where she could potentially lose another investment; thus, she had no other choice but to agree. The lack of genuine consent was further evidenced by her repeated requests for a refund even after receiving the first tranche of interest income.

• Penalty: Article 318 imposes arresto mayor and a fine not less than the amount of damage caused and not more than twice such amount. This penalty for paragraph 1 was retained by Republic Act No. 10951. The damage caused was P200,000.00. There being no aggravating or mitigating circumstances, the penalty is arresto mayor in its medium period, two months and one day to four months, and a fine of P200,000.00. The Indeterminate Sentence Law is inapplicable because the maximum term of imprisonment does not exceed one year.

• Estafa by False Pretenses under Article 315(2)(a) — Estafa by means of deceit under Article 315(2)(a) requires a false pretense or fraudulent representation as to power, influence, qualifications, property, credit, agency, business or imaginary transactions; made prior to or simultaneously with the fraud; relied upon by the offended party who is induced to part with money or property; and resulting damage. The false pretense may consist of using a fictitious name, pretending to possess the enumerated qualifications, or other similar deceits. The phrase “other similar deceits” is limited by ejusdem generis to acts of the same nature as those specifically enumerated. In this case, the specific modalities were not proven, and the actual misrepresentations fell outside “other similar deceits.”

• Other Deceits under Article 318 — Article 318 is a catch-all provision intended to cover all other kinds of deceit not falling under Articles 315, 316, and 317. Its elements are: (a) a false pretense, fraudulent act or pretense other than those in Articles 315, 316, and 317; (b) made or executed prior to or simultaneously with the commission of the fraud; and (c) the offended party suffered damage or prejudice. The provision applies to the misrepresentation that money would be invested in a particular company when it is instead diverted to another without genuine consent.

• Variance Between Allegation and Proof — Under Rule 120, Section 4 of the Revised Rules of Criminal Procedure, when there is a variance between the offense charged and that proved, and the offense charged is included in or necessarily includes the offense proved, the accused may be convicted of the offense proved included in the charge, or of the offense charged included in the offense proved. The doctrine allowed conviction under Article 318 despite the charge under Article 315(2)(a), because Article 318 is necessarily included in Article 315(2)(a).

• Ejusdem Generis — Where a statement ascribes things of a particular class or kind accompanied by words of a generic character, the generic words are limited to things of a similar nature with those particularly enumerated unless the context indicates otherwise. The principle limited “other similar deceits” under Article 315(2)(a) to acts of the same nature as the specific false pretenses enumerated.

• Money Market Transactions and Dealer Discretion — In money market transactions, a dealer is given discretion on where investments are to be placed absent any agreement with or instruction from the investor to place the investments in specific securities. If the investor enters into an investment contract obliging the dealer to place investments only in designated securities, a dealer who deviates from the specified instruction may be exposed to civil and criminal prosecution; if there is no stipulation for placement on designated securities, the deviation may only give rise to a civil action for recovery. The doctrine was distinguished because the investment here was specifically agreed to be placed in Philam Life.

• Genuine Consent / Ratification — Alleged ratification does not qualify as genuine consent where the offended party discovers the transaction only after her insurance policies had lapsed, is trapped in a difficult situation where she could potentially lose another investment, and has no other choice but to agree. Repeated requests for a refund further negate genuine consent.

• Question of Law vs. Question of Fact under Rule 45 — A question of law arises when doubt or difference exists as to what the law is on a certain set of facts; a question of fact pertains to the truth or falsity of alleged facts and includes assessment of the probative value of evidence. The determination of whether deceit or fraud is present in estafa is a question of fact, but factual review may be undertaken when the findings do not conform to the evidence on record.

• “Persons who receive money for investment in a particular company but divert the same to another without the investor's consent may be held criminally liable for other deceits under Article 318 of the Revised Penal Code. Article 318 of the Revised Penal Code is broad in scope intended to cover all other kinds of deceit not falling under Articles 315, 316, and 317 of the Revised Penal Code.” — This passage states the core ruling and characterizes Article 318 as a catch-all provision for other deceits.

• “The false representations committed by petitioner in this case fall beyond the scope of 'other similar deceits' under Article 315(2)(a) of the Revised Penal Code. The phrase 'other similar deceits' in Article 315(2)(a) of the Revised Penal Code has been interpreted in Guinhawa v. People as limited to acts of the same nature as those specifically enumerated.” — This passage is the ratio for why the misrepresentations did not constitute estafa under Article 315(2)(a) and why the phrase is limited by ejusdem generis.

• “In the present case, the crime of other deceits under Article 318 of the Revised Penal Code is necessarily included in the crime of estafa by means of deceit under Article 315(2)(a) of the Revised Penal Code. Therefore, petitioner may be convicted of other deceits under Article 318 of the Revised Penal Code.” — This passage applies the variance rule and justifies conviction under Article 318 despite the charge under Article 315(2)(a).

• “The ratification allegedly given by private complainant hardly qualifies as genuine consent. When private complainant discovered the transaction, her insurance policies had already lapsed. She was trapped in a difficult situation where she could potentially lose another investment. Thus, she had no other choice but to agree to the placement.” — This passage rejects the defense of consent or ratification and explains why the alleged agreement was not genuine.

• Aricheta vs. People, 560 Phil. 170 (2007) — Cited to show that in estafa by deceit, the alleged false representation must be proven beyond reasonable doubt; the accused was acquitted where the prosecution failed to prove the alleged false representation. Used to explain the element of deceit.

• Guinhawa vs. People, 505 Phil. 383 (2005) — Interpreted “other similar deceits” under Article 315(2)(a) as limited by ejusdem generis to acts of the same nature as those specifically enumerated; also cited for the elements of other deceits under Article 318.

• MERALCO vs. Atilano, 689 Phil. 394 (2012) — Explained money market transactions and dealer discretion; distinguished because here the investment was specifically agreed to be placed in Philam Life, not left to the dealer’s discretion.

• Sales vs. Court of Appeals, 247-A Phil. 38 (1988) — Upheld conviction under Article 318 despite a charge under Article 315(2)(d) under the variance rule; no violation of the right to be informed because the elements of other deceits also constitute an element of estafa by deceit.

• Sy vs. People, 632 Phil. 276 (2010) — Cited for the elements of estafa under Article 315(2)(a).

• Navarrete vs. People, 542 Phil. 496 (2007) — Cited for the constitutional guarantee that an accused shall be informed of the nature and cause of the accusation.

• Pascual vs. Burgos, 776 Phil. 169 (2016) — Cited for the rule that factual findings of the trial court, as affirmed by the Court of Appeals, are binding and for the distinction between questions of law and fact.

• Article 315, paragraph 2(a), Revised Penal Code — Defines estafa by false pretenses or fraudulent acts, including use of a fictitious name, falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or other similar deceits. The specific modalities were not proven, and the actual misrepresentations fell outside “other similar deceits.”

• Article 318, Revised Penal Code — Defines other deceits as a catch-all offense for defrauding or damaging another by any other deceit not mentioned in the preceding articles; imposes arresto mayor and a fine of not less than the damage caused and not more than twice such amount. Applied to convict petitioner.

• Republic Act No. 10951, Section 86 — Amended Article 318 but retained the penalty of arresto mayor and fine for the first paragraph. Applied to petitioner’s penalty.

• Rule 120, Section 4, Revised Rules of Criminal Procedure — Provides for judgment in case of variance between allegation and proof; allows conviction of the offense proved if included in the offense charged, or of the offense charged if included in the offense proved. Applied to convict under Article 318 despite the charge under Article 315(2)(a).

• Rule 45, Section 1, Rules of Court — Limits petitions for review to questions of law. Discussed in resolving whether the Court could review the factual issue of deceit.

• Constitutional guarantee that an accused shall be informed of the nature and cause of the accusation — Cited as the basis for the rule that an accused can only be convicted of the crime charged; no violation was found because Article 318 is necessarily included in Article 315(2)(a).

• Indeterminate Sentence Law — Cited as inapplicable because the maximum term of imprisonment does not exceed one year.

Velasco, Jr. (Chairperson), Bersamin, Martires, and Gesmundo, JJ., concur.