People vs. Centeno

The same acts may serve as basis for conviction of both illegal recruitment and estafa, as they are independent offenses and the conviction of one does not bar the other. Where the actual damages in an estafa case arise from placement fees paid for deployment services, the obligation does not constitute a loan or forbearance of money, and interest is reckoned from the time of judicial demand when the claim is reasonably certain.

The accused-appellant Jose L. Centeno was among six individuals charged in connection with the operations of Frontline Manpower Resources & Placement Company, an unlicensed recruitment agency based in Ermita, Manila. Cecille Amara served as president of the company, while Centeno claimed to be merely an employee despite being named as Amara's business partner in a Memorandum of Agreement. The charges arose from the company's recruitment of Filipino workers for overseas employment in Canada and Australia during the period December 2005 to June 2006, during which placement fees were collected but no workers were deployed. Of the six accused, only Centeno was arrested and tried; the others were not arraigned and their cases were archived.

Sometime in 2005, Ruben Salvatierra went to the office of Frontline Manpower Resources & Placement Company in Ermita, Manila, to apply for work overseas. There he met Jose L. Centeno (the accused-appellant) and Cecille Amara, who informed him that the company could send people abroad as contract workers. Amara told Salvatierra he was qualified to work in Canada and advised him to undergo medical examination and submit the necessary requirements. The accused-appellant assisted Salvatierra and provided him with information relating to the application process, including instructing him to pay the medical fee of P5,000.00 to Jomelyn Ouano, the company's finance manager. Salvatierra principally transacted with Amara, who later instructed him to pay P95,000.00 as placement fee, inclusive of the medical fee already paid. Salvatierra satisfied the fee in full through installments. The accused-appellant assured Salvatierra that he was included in the first batch of employees to be deployed, or at the latest, scheduled to leave on August 16, 2006. In a later meeting, however, the accused-appellant informed Salvatierra and the other applicants of changes in the deployment schedule, but promised that should it later be cancelled, their money would be returned. The company reneged on its commitment.

Salvatierra's testimony was corroborated on its material points by prosecution witnesses Elizabeth Castillo and Revilla Buendia. Castillo was recruited to work as a caregiver in Canada and paid a total of P95,000.00 as placement fee, while Buendia applied for the position of chambermaid in Australia and paid P75,000.00 as processing fee. Castillo and Buendia were promised deployment on August 16, 2006 and August 24, 2006, respectively. The initial schedules were moved to later dates but were eventually cancelled. The last prosecution witness, POEA Officer Johnson Bolivar, attested on the basis of a certification issued by the POEA Director that neither the manpower company nor the accused-appellant was licensed to recruit workers for overseas employment.

For his part, the accused-appellant testified that he was invited by Amara, the company's president, to join the agency for a monthly salary of P30,000.00 plus USD100.00 commission for every applicant he recruited for overseas deployment. Although he was named as Amara's business partner in a Memorandum of Agreement, he claimed he was in reality merely an employee who neither shared in nor contributed to the company's capital. Amara assigned him to register the company with the Securities and Exchange Commission and sent him to Malaysia to secure 100 job orders required for POEA licensing. Upon his return, he found the office empty and in disarray, with people outside asking about Amara's whereabouts. He denied any involvement in the hiring and recruitment of workers abroad, arguing that he was not even allowed to talk to the applicants, and that during his employment he did not receive the agreed salary and commission.

The accused-appellant was the only accused arrested and arraigned; he entered a plea of not guilty. The other accused—Amara, Adora Centeno, Cristy Celis, and Bernardino Navallo—were not arraigned, and their cases were archived. Twelve Informations were filed: two for syndicated illegal recruitment and twelve for estafa, though the RTC ultimately convicted the accused-appellant on two counts of illegal recruitment and three counts of estafa, dismissing the remaining estafa counts for failure of the prosecution to prove guilt beyond reasonable doubt.

• Syndicated Illegal Recruitment: Whether the accused-appellant is guilty beyond reasonable doubt of syndicated illegal recruitment committed in large scale.
• Estafa: Whether the accused-appellant is guilty beyond reasonable doubt of estafa under Article 315, paragraph 2(a) of the Revised Penal Code.
• Modification of Estafa Penalty: Whether the penalty for estafa must be modified in view of R.A. No. 10951.
• Interest on Actual Damages: Whether interest should be imposed on the actual damages awarded and from what date it should be reckoned.

• Syndicated Illegal Recruitment: Yes. All three elements were present: the company lacked a valid POEA license, the accused-appellant engaged in recruitment and placement activities as defined under Article 13(b) of the Labor Code, and the offense was carried out by a group of three or more persons conspiring together against three or more complainants.
• Estafa: Yes. All four elements of estafa by deceit under Article 315, paragraph 2(a) of the RPC were present: false pretenses as to the company's capacity to deploy workers abroad, made prior to or simultaneously with the fraud, reliance by the complainants inducing them to part with their money, and resulting damage.
• Modification of Estafa Penalty: Yes. R.A. No. 10951 retroactively increased the threshold amounts for estafa penalties, reducing the applicable penalty for the amounts involved (P95,000.00 and P70,000.00) to arresto mayor in its maximum period to prision correccional in its minimum period.
• Interest on Actual Damages: Yes. Interest is imposed at 12% per annum from judicial demand (filing of the Informations on February 11, 2008) until June 30, 2013, and 6% per annum from July 1, 2013 until finality of the Decision, and 6% per annum thereafter until full payment, because placement fees are paid for services and do not constitute a loan or forbearance of money.

• Syndicated Illegal Recruitment: The three elements of syndicated illegal recruitment in large scale were established. First, it was undisputed that Frontline Manpower Resources & Placement Company had no license or authority to engage in recruitment and placement, as evidenced by the POEA certification identified by POEA Officer Bolivar. Second, the accused-appellant engaged in recruitment and placement as defined under Article 13(b) of the Labor Code, which covers any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, including referrals, contract services, promising or advertising for employment. The CA's factual findings, quoted with approval, detailed the accused-appellant's acts: misrepresenting that they represented an agency in Australia, directly handling the processing of applications, giving departure schedule details and promising refunds, stating that applicants had completed Pre-Departure Orientation Seminar, participating in meetings at the agency, and issuing a certification attesting to Buendia's slot for deployment. Where conspiracy is established, it is not necessary that each offender directly participated in every act of recruitment or placement; it is sufficient that they acted in concert pursuant to the same objective. Third, the offense was carried out by a group of three or more persons conspiring together, and was committed against three or more complainants (Salvatierra, Castillo, and Buendia), satisfying both the syndicate and large-scale elements. Syndicated illegal recruitment committed by a syndicate or in large scale constitutes economic sabotage under Section 7(b) of R.A. No. 8042, penalized by life imprisonment and a fine of not less than P500,000.00 nor more than P1,000,000.00.

• Estafa: The same acts supporting the illegal recruitment conviction also established all four elements of estafa by deceit under Article 315, paragraph 2(a) of the RPC. The accused-appellant and his co-accused made false pretenses and fraudulent representations as to the company's capacity to deploy workers abroad; these representations were made prior to and simultaneously with the commission of the fraud; the private complainants relied on these representations and were induced to part with their placement fees; and the complainants suffered damage when none were deployed and the fees remained unreturned. The Court reaffirmed that the same acts may serve as basis for conviction of both illegal recruitment and estafa, as they are independent offenses and the conviction of one does not bar the other.

• Modification of Estafa Penalty: While the conviction for estafa was affirmed, the penalty required modification pursuant to R.A. No. 10951, Section 100 of which provides for retroactive effect insofar as it is favorable to the accused. Section 85 of R.A. No. 10951 amended Article 315 of the RPC, increasing the threshold amounts for the penalty tiers. The amounts involved—P95,000.00 each in Criminal Case Nos. 08-259344 and 08-259346, and P70,000.00 in Criminal Case No. 08-259351—all fall under the amended provision covering amounts over P40,000.00 but not exceeding P1,200,000.00, which carries the penalty of arresto mayor in its maximum period to prision correccional in its minimum period. In the absence of modifying circumstances, the maximum penalty is within the medium period of arresto mayor maximum to prision correccional minimum, and the minimum penalty is one degree lower—arresto mayor minimum and medium. The accused-appellant was accordingly sentenced to the indeterminate penalty of four (4) months of arresto mayor as minimum to one (1) year and eight (8) months of prision correccional as maximum for each count of estafa.

• Interest on Actual Damages: The Court took the opportunity to review conflicting jurisprudence on the reckoning period for interest on actual damages in estafa cases. Applying the framework from Nacar vs. Gallery Frames, the first question is whether the obligation constitutes a "loan or forbearance of money." Forbearance refers to arrangements where a person acquiesces to the temporary use of his money pending the happening of certain events. The payment of placement fees is not a loan or forbearance of money, as it is given in consideration of the performance of a service—the deployment of the complainants for work abroad. Because the transaction does not involve a loan or forbearance, interest may be imposed at the discretion of the court at 6% per annum, commencing from the time the claim is made judicially or extrajudicially when the demand can be established with reasonable certainty. Here, the amounts paid as placement fees were undisputed and alleged in the complaint, so interest was reckoned from the time of judicial demand—the filing of the Informations on February 11, 2008. Following Nacar, interest was imposed at 12% per annum from February 11, 2008 until June 30, 2013, and 6% per annum from July 1, 2013 until the finality of the Decision. The total amount thereafter earns 6% per annum until full payment, as the interim period constitutes a forbearance of credit. Where the transaction is not a loan or forbearance and the amount is disputed or cannot be easily determined, interest commences only from the finality of the court's decision until fully paid.

• Dual conviction for illegal recruitment and estafa — The same acts may serve as basis for the conviction of a person both of illegal recruitment and estafa under Article 315, paragraph 2(a) of the RPC. The conviction of one does not bar the other, as they are independent offenses and the result of one does not affect the other. The Court applied this doctrine to sustain the accused-appellant's conviction on both charges arising from the same recruitment activities.

• Elements of syndicated illegal recruitment in large scale — The offense requires: (a) the offender does not have a valid license or authority to engage in recruitment and placement of workers; (b) the offender undertakes any of the recruitment and placement activities defined in Article 13(b) of the Labor Code or engages in prohibited practices under Section 6 of R.A. No. 8042; and (c) the illegal recruitment is carried out by a group of three or more persons conspiring and/or confederating with one another. Illegal recruitment is committed in large scale when committed against three or more persons individually or as a group. Where conspiracy is established, it is not necessary that each offender directly participated in every act of recruitment or placement; acting in concert pursuant to the same objective suffices.

• Nacar framework on legal interest — When an obligation not constituting a loan or forbearance of money is breached, interest on damages may be imposed at 6% per annum at the court's discretion. Interest begins to run from the time the claim is made judicially or extrajudicially when the demand can be established with reasonable certainty. When the judgment becomes final and executory, the rate is 6% per annum from finality until satisfaction, the interim period being deemed equivalent to a forbearance of credit. Prior to July 1, 2013, the applicable rate was 12% per annum pursuant to BSP-MB Circular No. 799.

• Forbearance of money distinguished from payment for services — Forbearance refers to arrangements other than loan agreements where a person acquiesces to the temporary use of his money pending certain events or conditions. Transactions involving the performance of services—such as construction contracts, messengerial services, delivery of goods, contracts of carriage, and trucking agreements—do not partake of loan or forbearance of money. The payment of placement fees in illegal recruitment cases is consideration for deployment services and therefore does not constitute a loan or forbearance, making interest reckonable from judicial demand when the claim is reasonably certain.

• "It has previously been ruled that the same acts may serve as basis for the conviction of a person both of Illegal Recruitment and Estafa under Article 315 paragraph 2(a) of the RPC. The conviction of one does not bar the other. They are independent offenses and the result of one does not affect the other." — This passage articulates the doctrine permitting dual conviction for illegal recruitment and estafa based on the same acts, a principle frequently invoked in illegal recruitment cases.

• "Applied in this case, the payment of placement fee is not a loan or forbearance of money as it is in consideration of the performance of a service, that is the deployment of the private complainants for work abroad." — This statement resolves the threshold question under the Nacar framework for determining the reckoning period of interest on actual damages in estafa cases involving placement fees, classifying such payments as consideration for services rather than forbearance of money.

• "Consequently, if those conditions are breached, said person is entitled not only to the return of the principal amount paid, but also to compensation for the use of his money which would be the same rate of legal interest applicable to a loan since the use or deprivation of funds therein is similar to a loan." — This passage defines the concept of forbearance of money as applied in Philippine jurisprudence, distinguishing it from transactions involving payment for services.

• People vs. Sison, 816 Phil. 8 (2017) — Followed for the elements of syndicated illegal recruitment and the definition of illegal recruitment as giving the impression of capacity to send workers abroad without government authority.
• People vs. Daud, 724 Phil. 698 (2014) — Followed for the doctrine that the same acts may support conviction for both illegal recruitment and estafa, as they are independent offenses.
• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Controlling precedent applied for the framework on legal interest, including the distinction between loan/forbearance of money and other obligations, and the applicable rates (12% prior to July 1, 2013; 6% thereafter).
• Federal Builders, Inc. vs. Foundation Specialists, Inc., 742 Phil. 433 (2014) — Followed for the definition of forbearance of money, used to determine whether placement fees constitute a loan or forbearance for purposes of reckoning interest.

• Section 6, R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) — Defines illegal recruitment and the prohibited practices; applied to establish that the accused-appellant engaged in recruitment and placement activities without the required license.
• Section 7(b), R.A. No. 8042 — Prescribes the penalty of life imprisonment and a fine of not less than P500,000.00 nor more than P1,000,000.00 for illegal recruitment constituting economic sabotage; applied to impose the penalty for the two counts of syndicated illegal recruitment.
• Article 13(b), Labor Code of the Philippines — Defines "recruitment and placement" as any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, including referrals, contract services, promising or advertising for employment; applied to determine whether the accused-appellant's acts constituted recruitment and placement.
• Article 315, paragraph 2(a), Revised Penal Code — Defines and penalizes estafa by deceit through false pretenses or fraudulent representations; applied to convict the accused-appellant of three counts of estafa.
• Section 85, R.A. No. 10951 — Amended Article 315 of the RPC by increasing the threshold amounts for estafa penalties; applied retroactively to reduce the penalty for the estafa counts involving P95,000.00 and P70,000.00.
• Section 100, R.A. No. 10951 — Provides for retroactive effect of the law insofar as it is favorable to the accused; applied to justify the modification of the estafa penalty.
• Article 64(1), Revised Penal Code — Provides that in the absence of modifying circumstances, the maximum penalty should be within the medium period; applied to determine the proper imposition of the reduced estafa penalty.
• Article 70, Revised Penal Code — Governs the successive service of penalties; applied in the RTC disposition for multiple convictions.
• Article 29, Revised Penal Code — Provides credit for preventive imprisonment; applied to grant the accused-appellant full time of detention as credit.

Hernando, J. (Acting Chairperson) and Inting, J., concurred. Perlas-Bernabe, J. and Carandang, J., were on official leave.