People vs. Mateo

Estafa by means of deceit under Article 315(2)(a) of the Revised Penal Code is one of the forms of swindling contemplated under Presidential Decree No. 1689, and the penalty of life imprisonment imposed by PD 1689 for syndicated estafa is not altered by Republic Act No. 10951, absent any express or implied legislative intent to repeal the special law.

Ervin Y. Mateo was the sole general partner of MMG International Holdings Co., Ltd., a partnership registered with the Securities and Exchange Commission, with a capital contribution of ₱49,750,000.00. The other accused — Evelyn E. Mateo, Carmelita B. Galvez, Romeo L. Esteban, Galileo J. Saporsantos, and Nenita S. Saporsantos — were limited partners contributing ₱50,000.00 each. The partnership's Amended Articles of Partnership stated its purpose as acquiring, managing, and holding securities and equity participation, but expressly prohibited engagement in stock brokerage or dealership of securities. Notwithstanding this prohibition, the partnership solicited investments from the general public by offering 2.5% monthly interest returns, activities that were ultra vires and for which MMG had no secondary license or permit from the SEC.

In March 2001, private complainant Herminio Alcid, Jr. met Geraldine Alejandro, who introduced herself as the head of the Business Center of MMG International Holdings Co., Ltd. Geraldine was soliciting investments and showed a brochure showcasing MMG's businesses, as well as Articles of Partnership proving that MMG was registered with the Securities and Exchange Commission. The Articles of Partnership identified accused-appellant Ervin Y. Mateo as the sole general partner with a capital contribution of ₱49,750,000.00, while the other accused were listed as limited partners contributing ₱50,000.00 each. Convinced by these representations, Herminio, Jr. invested ₱50,000.00 with MMG on April 20, 2002. The interest and principal were promptly paid, which induced him to invest further. On May 2, 2002, Herminio, Jr. and his father, Herminio Alcid, Sr., made a joint investment of ₱200,000.00. Geraldine also convinced Herminio, Jr.'s sister, Melanie, to invest ₱50,000.00.

The complainants' investments were covered by a notarized Memorandum of Agreement signed by accused-appellant as president of MMG, stipulating that investors would earn 2.5% monthly interest income on their capital. The complainants received post-dated checks covering their investments, but when they attempted to deposit these, the banks informed them that the checks were dishonored because MMG's accounts had already been closed. The complainants demanded the return of their money, but the demands went unheeded. They then filed a complaint with the SEC, where they discovered that MMG was not a registered issuer of securities. The SEC forwarded the complaint to the City Prosecutor of Makati.

On April 11, 2003, the Assistant City Prosecutor filed two separate Informations with the RTC of Makati City charging accused-appellant and his co-accused with syndicated estafa under Article 315 of the RPC in relation to PD 1689. The Informations alleged that the accused, as partners, officers, employees, and/or agents of MMG, conspired to defraud the complainants by falsely representing that they had the power to solicit investments and the capacity to pay guaranteed monthly returns, thereby inducing the complainants to deliver their money, which was then misappropriated. Among all the accused, only accused-appellant was arrested. He was arraigned on February 19, 2004 and pleaded not guilty. After pre-trial, the cases were jointly tried. After the prosecution rested its case, the defense failed to present evidence despite several re-settings, and the case was deemed submitted for resolution upon motion of the prosecution.

The RTC found all elements of syndicated estafa present: MMG was formed by accused-appellant together with five other persons; fraud was committed in inducing the complainants to part with their money; and the fraud resulted in misappropriation of the contributed funds. The RTC convicted accused-appellant, sentencing him to life imprisonment for each count and holding him solidarily liable with MMG to pay actual damages of ₱206,000.00 to Herminio Alcid, Jr. and Herminio Alcid, Sr., and ₱59,702.61 to Melanie Alcid. The CA affirmed the RTC judgment in toto. The defense presented no evidence, and accused-appellant raised his challenges only on appeal, including denying the authenticity of his signatures on the MOA and other documents for the first time at the appellate level.

• Applicability of PD 1689 to Article 315(2)(a): Accused-appellant contended that he could not be convicted of estafa under Article 315(2)(a) of the RPC in relation to PD 1689, arguing that the only kind of estafa contemplated under PD 1689 is that defined under Article 315(1)(b) of the RPC, not the form falling under Article 315(2)(a).
• Failure to Prove Defraudation: Accused-appellant argued that the element of defraudation was not proven beyond reasonable doubt because the prosecution failed to prove that he personally, physically, and actually performed any false pretenses or fraudulent representations against the private complainants.
• Insufficiency of Evidence: Accused-appellant maintained that there was insufficient quantum of proof to warrant his conviction beyond reasonable doubt.
• Stay Order from Corporate Rehabilitation: Accused-appellant contended that he could not be convicted despite the stay order issued by the Commercial Court, RTC, Branch 256, Muntinlupa City, for the corporate rehabilitation of MMG Group including MMG Holdings.
• Acquittal in Other Cases: Accused-appellant insisted that his acquittal in several other cases for the same offense proved that he never committed syndicated estafa.
• Denial of Motions for Reconsideration: Accused-appellant argued that the Court of Appeals committed serious and reversible errors in denying his motion for reconsideration and supplemental motion for reconsideration.

• Applicability of PD 1689: The Office of the Solicitor General argued that PD 1689 contemplates estafa as defined and penalized under Article 315(2)(a) of the RPC, and that all elements of syndicated estafa were present.
• Existence of Fraud and Deceit: The OSG maintained that accused-appellant and his partners employed a uniform pattern of fraud — presenting the "Alliance" brochure showcasing supposed businesses, misrepresenting their technical capacity, and falsely promising 2.5% monthly returns — to entice investors, and that MMG's registration with the SEC was procured only to give a semblance of legitimacy to the partnership.
• Conspiracy: The OSG argued that conspiracy existed among the accused, as they formed the partnership, had access to MMG's bank accounts, composed the Board of Directors managing MMG's transactions, and each participated indispensably in the fraudulent scheme.

• Scope of PD 1689: Whether accused-appellant may be convicted of estafa under Article 315(2)(a) of the RPC in relation to PD 1689.
• Proof of Defraudation: Whether the element of defraudation was proven beyond reasonable doubt by the prosecution.
• Sufficiency of Evidence: Whether there is sufficient quantum of proof to warrant conviction beyond reasonable doubt.
• Effect of Stay Order: Whether accused-appellant may be convicted despite the stay order issued by the commercial court for the corporate rehabilitation of MMG Group.
• Propriety of Denying Motions for Reconsideration: Whether the Court of Appeals committed serious and reversible errors in denying the motion for reconsideration and supplemental motion for reconsideration.
• Applicability of RA 10951: Whether the amendatory provisions of Republic Act No. 10951 apply to the present case, thereby altering the penalty imposed under PD 1689.

• Scope of PD 1689: Yes. Estafa by means of deceit under Article 315(2)(a) of the RPC is one of the kinds of swindling contemplated under PD 1689, as settled in prior jurisprudence.
• Proof of Defraudation: Yes. The element of defraudation was proven beyond reasonable doubt; conspiracy among the accused rendered direct personal participation by accused-appellant unnecessary, and his signatures on the MOA and other documents evidenced his involvement.
• Sufficiency of Evidence: Yes. Both the RTC and CA found the prosecution's evidence sufficient, and no cogent reason existed to depart from those findings.
• Effect of Stay Order: No, the stay order does not bar conviction. Criminal proceedings against corporate officers charged in their individual capacities need not be suspended during corporate rehabilitation.
• Propriety of Denying Motions for Reconsideration: No reversible error was committed. Accused-appellant's acquittal in other cases involved different parties, factual milieus, and sets of evidence.
• Applicability of RA 10951: No. RA 10951 did not repeal or amend the penalty provisions of PD 1689, as no express or implied legislative intent to do so was shown.

• Scope of PD 1689: Section 1 of PD 1689 penalizes estafa or other forms of swindling as defined in Articles 315 and 316 of the RPC when committed by a syndicate of five or more persons and resulting in the misappropriation of funds solicited from the general public. The Court found that it has been settled in a number of cases — People vs. Balasa, People vs. Menil, Galvez vs. Court of Appeals, and People vs. Tibayan — that estafa under Article 315(2)(a) is one of the kinds of swindling contemplated under PD 1689. Accused-appellant's contention that only Article 315(1)(b) estafa was covered was therefore rejected.

• Proof of Defraudation: The elements of estafa by means of deceit under Article 315(2)(a) are: (a) a false pretense or fraudulent representation as to power, influence, qualifications, property, credit, agency, business, or imaginary transactions; (b) such false pretense was 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) the offended party suffered damage. The elements of syndicated estafa under PD 1689 are: (a) estafa or swindling under Articles 315 and 316 is committed; (b) committed by a syndicate of five or more persons; and (c) defraudation results in misappropriation of funds solicited from the general public. The Court found all elements present: MMG's incorporators and directors, comprising more than five persons, made false representations regarding a lucrative investment opportunity; the representations were made prior to or simultaneously with the fraud; the complainants relied on them and invested; and the money was misappropriated. The partnership's solicitation of investments was ultra vires, as its Amended Articles of Partnership expressly prohibited stock brokerage or dealership of securities, and the SEC certified that MMG was not a registered issuer of securities. As to accused-appellant's argument that he did not personally transact with the complainants, the Court found conspiracy was established: the accused formed the partnership, had access to bank accounts, composed the Board of Directors, and each participated indispensably. In conspiracy, the act of one is the act of all, and it is not essential that all conspirators took a direct part in every act. Accused-appellant's direct participation was evidenced by his being named sole general partner in the Articles of Partnership, his signatures on the MOA, the Secretary's Certificate, and bank signature cards. His belated denial of his signatures on appeal — on documents that were notarized — was given no weight, and the Court held that facsimile signatures are valid in banking, financial, and business transactions.

• Sufficiency of Evidence: The Court reviewed the evidence and found no cogent reason to depart from the RTC and CA findings. Accused-appellant's acquittal in other cases did not compel acquittal here, as those cases involved different parties, factual milieus, and sets of evidence. The prosecution's failure in those cases did not negate the sufficiency of evidence in the present case.

• Effect of Stay Order: Citing Rosario vs. Co and Panlilio vs. RTC, the Court ruled that criminal proceedings need not be suspended during corporate rehabilitation. The prime purpose of a criminal action is to punish the offender, and it would be absurd for one who engaged in criminal conduct to escape punishment by the mere filing of a rehabilitation petition. The officers were charged in their individual capacities, and the rehabilitation receiver's functions were not compromised. Any civil liability award would merely be subject to the stay order's execution provisions.

• Propriety of Denying Motions for Reconsideration: The Court found no reversible error in the CA's denial. The argument based on acquittal in other cases was rejected as those cases involved different parties and evidence.

• Applicability of RA 10951: RA 10951 was enacted to adjust amounts or values of property and damage on which penalties are based for various crimes under the RPC. Section 85 of RA 10951 mentions PD 1689 as one of the laws amending Article 315. However, PD 1689 is a special law enacted for the specific purpose of defining and penalizing syndicated estafa, imposing life imprisonment to death regardless of the amount involved when committed by a syndicate. The Court found no manifest intent in RA 10951 to repeal or alter the penalty for syndicated estafa. Implied repeals are not favored, and a special law cannot be repealed or altered by a subsequent general law by mere implication. Absent an express repeal, a subsequent law cannot be construed as repealing a prior one unless irreconcilable inconsistency or repugnancy exists. The Court found neither inconsistency nor absolute incompatibility between PD 1689 and RA 10951.

• Syndicated Estafa under PD 1689 — The elements are: (a) estafa or other forms of swindling as defined in Articles 315 and 316 of the RPC is committed; (b) the estafa or swindling is committed by a syndicate of five or more persons formed with the intention of carrying out an unlawful or illegal act, transaction, enterprise, or scheme; and (c) defraudation results in the misappropriation of money contributed by stockholders, members of rural banks, cooperatives, "samahang nayon(s)," or farmers' associations, or of funds solicited by corporations/associations from the general public. The penalty is life imprisonment to death regardless of the amount involved when committed by a syndicate. The Court applied this doctrine by finding that MMG, formed by six persons including accused-appellant, solicited funds from the general public through fraudulent representations and misappropriated the same.

• Estafa by Means of Deceit (Article 315(2)(a), RPC) — The elements are: (a) a false pretense or fraudulent representation as to power, influence, qualifications, property, credit, agency, business, or imaginary transactions; (b) such false pretense was made or executed prior to or simultaneously with the commission of the fraud; (c) the offended party relied on the false pretense and was induced to part with money or property; and (d) as a result, the offended party suffered damage. The Court found all elements satisfied by the representations made through the "Alliance" brochure, the promise of 2.5% monthly returns, and the misrepresentation that MMG was authorized to solicit investments.

• Conspiracy Doctrine — When there is conspiracy, the act of one is the act of all. It is not essential that there be actual proof that all conspirators took a direct part in every act; it is sufficient that they acted in concert pursuant to the same objective. The Court applied this to hold that accused-appellant need not have personally transacted with the complainants, given the finding of conspiracy among all accused in operating MMG's fraudulent investment scheme.

• Validity of Facsimile Signatures — A facsimile signature, produced by mechanical means, is recognized as valid in banking, financial, and business transactions. The Court applied this to reject accused-appellant's challenge to the signatures on the MOA and bank documents, noting that the bank recognized and used these facsimile signatures without complaint from the accused.

• Non-Suspension of Criminal Proceedings During Corporate Rehabilitation — Criminal proceedings against corporate officers charged in their individual capacities need not be suspended by a stay order issued in corporate rehabilitation proceedings. The Court applied this doctrine, citing Rosario vs. Co and Panlilio vs. RTC, to reject accused-appellant's argument that the stay order barred his conviction.

• Implied Repeal Not Favored — A special law cannot be repealed, amended, or altered by a subsequent general law by mere implication. For an implied repeal, a substantial conflict must exist between the new and prior laws; the two laws must be absolutely incompatible. The Court applied this principle to hold that RA 10951 did not repeal or amend PD 1689's penalty provisions, as no irreconcilable inconsistency existed between the two.

• "Suffice it to say that it has been settled in a number of cases that estafa, as defined under Article 315 (2)(a) of the RPC, is one of the kinds of swindling contemplated under PD 1689." — This passage establishes the controlling rule that estafa by means of deceit falls within the coverage of PD 1689, resolving the central statutory interpretation issue of the case.

• "When there is conspiracy, the act of one is the act of all. It is not essential that there be actual proof that all the conspirators took a direct part in every act. It is sufficient that they acted in concert pursuant to the same objective." — This formulation of the conspiracy doctrine was applied to hold accused-appellant liable despite his lack of direct personal dealings with the complainants, and is frequently cited in Philippine conspiracy jurisprudence.

• "There is no reason why criminal proceedings should be suspended during corporate rehabilitation, more so, since the prime purpose of the criminal action is to punish the offender in order to deter him and others from committing the same or similar offense, to isolate him from society, reform and rehabilitate him or, in general, to maintain social order." — This passage, quoted from Panlilio vs. RTC, defines the principle that corporate rehabilitation stay orders do not bar criminal prosecution of corporate officers, a doctrine of significant practical importance in white-collar criminal cases.

• "A special law cannot be repealed, amended or altered by a subsequent general law by mere implication." — This statement articulates the canonical rule on implied repeal as applied to the relationship between PD 1689 and RA 10951, establishing that the penalty for syndicated estafa under the special law remains undisturbed.

• People vs. Balasa, 356 Phil. 362 (1998) — Cited as controlling authority for the proposition that estafa under Article 315(2)(a) of the RPC is one of the kinds of swindling contemplated under PD 1689.
• People vs. Menil, 394 Phil. 433 (2000) — Cited for the same proposition on the scope of PD 1689, and for the definition of fraud and deceit in the context of estafa.
• Galvez vs. Court of Appeals, 704 Phil. 463 (2013) — Cited as authority for the elements of syndicated estafa under PD 1689 and for the coverage of Article 315(2)(a) estafa.
• People vs. Tibayan, 750 Phil. 910 (2015) — Cited as additional authority confirming that estafa under Article 315(2)(a) is contemplated under PD 1689.
• People vs. Daud, 734 Phil. 698 (2014) — Cited for the conspiracy doctrine that the act of one is the act of all and that direct participation by every conspirator in every act is not essential.
• Rosario vs. Co, 585 Phil. 236 (2008) — Cited as authority for the principle that criminal proceedings should not be suspended during corporate rehabilitation.
• Panlilio vs. RTC, Branch 51, City of Manila, 656 Phil. 453 (2011) — Cited and extensively quoted for the doctrine that criminal prosecution of corporate officers is not barred by a corporate rehabilitation stay order.
• Heirs of Lourdes Saez Sabanpan vs. Comorposa, 456 Phil. 161 (2003) — Cited for the validity of facsimile signatures in banking, financial, and business transactions.
• Manzano vs. Hon. Valera, 354 Phil. 66 (1998) — Cited for the principles that implied repeals are not favored and that a special law cannot be repealed by a general law by mere implication.
• Catiis vs. Court of Appeals, 517 Phil. 294 (2006) — Cited for the proposition that PD 1689 penalizes offenders with life imprisonment to death regardless of the amount involved when committed by a syndicate.

• Article 315(2)(a), Revised Penal Code — Defines estafa by means of deceit: by falsely pretending to possess power, influence, qualification, property, credit, agency, business, or imaginary transactions, or by means of other similar deceits. The Court found that all elements of this provision were satisfied by the false representations made by MMG's officers regarding their authority to solicit investments and capacity to pay guaranteed returns.
• Article 315(1)(b), Revised Penal Code — Defines estafa by misappropriating or converting money, goods, or personal property received in trust, on commission, or for administration. Accused-appellant argued this was the only form of estafa contemplated under PD 1689; the Court rejected this argument.
• Section 1, Presidential Decree No. 1689 — Defines and penalizes syndicated estafa, imposing life imprisonment to death when estafa under Articles 315 and 316 of the RPC is committed by a syndicate of five or more persons and results in misappropriation of funds solicited from the general public. The Court applied this provision to sustain the conviction and penalty.
• Section 85, Republic Act No. 10951 — Mentions PD 1689 as one of the laws amending Article 315 of the RPC. The Court examined this provision to determine whether RA 10951 altered the penalty for syndicated estafa and concluded it did not.
• Articles 315 and 316, Revised Penal Code — Referenced in Section 1 of PD 1689 as the source offenses that, when committed by a syndicate, are elevated to syndicated estafa. The Court confirmed that both articles fall within the coverage of PD 1689.

Justice Antonio T. Carpio (Chairperson), Justice Estela M. Perlas-Bernabe, Justice Alfredo Benjamin S. Caguioa, and Justice Andres B. Reyes, Jr. concurred in the decision.