Spouses Llonillo vs. People

An acquittal grounded on reasonable doubt does not bar the award of civil liability based on an independent source of obligation, such as a contract, in the same criminal action, provided the act or omission complained of is the same as or related to that giving rise to civil liability, the issue was raised, the accused had an opportunity to be heard, and liability was proven by preponderance of evidence. For Other Deceits under Article 318(1), conviction requires a false pretense, fraudulent act, or fraudulent pretense made or executed prior to or simultaneously with the fraud and causing damage; no false pretense exists where the purported concealment was known to the complainant or where the allegedly undisclosed arrangements arose after the agreement was executed.

Spouses Enrique and Marites Llonillo owned two buildings consisting of several apartment units at 236 Aguho Street, Barangay Comembo, Makati City. Through their purported agent, Grace Pangan, they offered a sangla-tira arrangement under which a lender would extend a fixed-period loan and, in return, collect the rental from a designated apartment unit as interest. Private complainant Pedro Joel Caspillo was one of the lenders referred by Grace. The criminal charge rested on Article 318(1) of the Revised Penal Code, while the post-acquittal claim implicated Article 29 of the Civil Code and Rules 111 and 120 of the Rules of Court.

Sometime in March 2009, spouses Enrique and Marites Llonillo, through their purported agent Grace Pangan, approached private complainant Pedro Joel Caspillo and offered him a sangla-tira arrangement over apartment units in the two buildings they owned at 236 Aguho Street, Barangay Comembo, Makati City. They represented that they were looking for persons who could lend them money for a fixed period; in return, the lender would be entitled to the rent of a chosen apartment unit as interest at ₱10,000.00 per month, and the principal would be paid at the end of the agreed period. They assured Caspillo that the buildings and lots had no prior liens or encumbrances and showed him the Transfer Certificates of Title covering the properties. On March 30, 2009, Caspillo lent them ₱300,000.00, chose then-unoccupied Unit H, and executed a Memorandum of Agreement acknowledging receipt and setting payment on or before March 20, 2010. The monthly interest was not written into the MOA because Caspillo himself occupied the unit.

About 10 days later, Caspillo put Unit H up for rent and leased it to a friend, who stayed for only a month; he then used the unit for a mini-store, but it proved unprofitable. Marites offered to find a lessee for Unit H and assured Caspillo of the ₱10,000.00 monthly rental. Unit H was thereafter occupied, but Caspillo failed to collect monthly rentals. Investigating, he discovered that the spouses and the occupants of Unit H, Germalyn Josol and Rodrigo Arevalo, Jr., had also entered into sangla-tira arrangements over the same unit. Upon verification with the Registry of Deeds of Makati City, he further discovered that the properties involved in the sangla-tira arrangement were mortgaged to different banks, contrary to the spouses’ alleged representation during negotiation. The period under the MOA lapsed without payment, and Caspillo filed a complaint against the spouses for estafa under Article 318 of the Revised Penal Code.

At trial, Caspillo acknowledged on cross-examination that before entering into the loan agreement, he had been shown two separate certificates of title and that the dorsal portions bore entries showing the property was already mortgaged to a financial institution; he examined the titles and understood that the originals were with the bank because of the mortgage. He later sought to explain that he had seen only photocopies and did not read the annotations because the negotiations were hurried. The Supreme Court treated the earlier categorical trial admission as binding and conclusive.

The spouses denied the charge. Marites testified that she inherited the two four-storey buildings, mortgaged the property to banks to finance construction, and used apartment rentals to amortize the loans. According to her, their agent Grace proposed the sangla-tira arrangement, and Caspillo was one of Grace’s referred lenders; Marites claimed she never met Caspillo and that Grace brokered the entire transaction and prepared the MOA, which was undated and incomplete when presented. She also alleged that of the ₱300,000.00 loan, she received only ₱285,000.00 through Grace. When the spouses suffered business reverses and PS Bank instituted foreclosure proceedings over the property, lessees panicked, some left, and others filed cases; the property was redeemed sometime in March 2012. Enrique admitted the ₱300,000.00 loan but denied representing the property as free from liens and encumbrances, insisting the transaction was a simple loan and that Marites dealt only with Grace; he claimed he met Caspillo only when the latter became a tenant.

The MeTC found the fraudulent representation established because the spouses subjected Unit H to a sangla-tira arrangement with other individuals despite their arrangement with Caspillo, told him he could collect rentals they knew he could not, and suppressed the material fact that Unit H had been rented out to Arevalo, Jr. The RTC and CA likewise treated the spouses’ failure to disclose prior mortgages to banks and other persons as a material misrepresentation that induced Caspillo to part with his money. No rent for Unit H or interest was paid, and the principal was not returned.

• Lack of Jurisdiction: Petitioners argued that the criminal case should have been dismissed for lack of jurisdiction over the case and over their persons because the Information did not bear the written authority or approval of the chief prosecutor or deputy prosecutor, in violation of Rule 112, Section 4, paragraph 3 of the Revised Rules of Criminal Procedure and as directed in Quisay vs. People.
• Inapplicability of Fraudulent Concealment: Petitioners maintained that any alleged failure to disclose material information under the Civil Code could not apply to the loan arrangement involving possession or sangla-tira, since Caspillo possessed the premises for two years and used them as a siomai and rice store; they claimed the case was used to collect the loan and was filed to avoid payment of filing fees.
• Possession of the Premises: Petitioners argued that the CA erroneously found that Caspillo failed to possess the premises when his own testimony showed he used the premises for two years.
• No Conviction for Future Act, Uncharged Allegations, or Simple Loan: Petitioners contended that they could not be convicted based on a future act or event occurring two years after the MOA, based on allegations not stated in the Information in violation of due process, or based on a simple loan that is not a crime.

• Criminal Liability for Nondisclosure: The prosecution maintained that the spouses’ nondisclosure of the bank mortgages and of the other persons’ sangla-tira arrangements led Caspillo to believe he would be entitled to the rentals of Unit H, and that this misrepresentation induced him to enter the agreement and part with ₱300,000.00.

• Jurisdiction over the Information: Whether the MeTC had jurisdiction to hear, try, and decide the case despite the purported absence of the chief prosecutor’s or deputy prosecutor’s written authority on the Information.
• Criminal Liability for Other Deceits: Whether the spouses’ guilt for Other Deceits under Article 318(1) of the Revised Penal Code was proven beyond reasonable doubt, given Caspillo’s admission that he knew of the bank mortgages and the subsequent timing of the sangla-tira arrangements.
• Civil Liability After Acquittal: Whether the spouses may be held civilly liable for the ₱300,000.00 loan in the same criminal action despite their acquittal.

• Jurisdiction over the Information: Yes. The MeTC had jurisdiction. The doctrine in Quisay was abandoned by Gomez vs. People; the absence of prosecutor approval on the face of the Information does not divest the trial court of jurisdiction and may be waived or cured.
• Criminal Liability for Other Deceits: No. The prosecution failed to prove guilt beyond reasonable doubt. Caspillo admitted knowing the properties were mortgaged to banks, and the sangla-tira arrangements with Arevalo, Jr. and Josol occurred only in 2011 and 2012, after the 2009 MOA, so no false pretense was made prior to or simultaneously with the fraud.
• Civil Liability After Acquittal: Yes. The spouses were civilly liable for ₱300,000.00 with interest. The acquittal was based on failure of proof beyond reasonable doubt, and civil liability sourced from contract may be adjudged in the same criminal action under Article 29 of the Civil Code, Rule 120, and Padilla.

• Jurisdiction over the Information: Petitioners relied on Quisay vs. People, but that doctrine was abandoned in Gomez vs. People. Under Gomez, the handling prosecutor’s authority, particularly as it does not appear on the face of the Information, has no connection to the trial court’s power to hear and decide the case. The deficiency is merely formal, may be cured, and may be waived through silence, acquiescence, or failure to raise it during arraignment or before entering a plea. It is sufficient that the investigating prosecutor’s resolution recommending filing bears the imprimatur of the required superior prosecutor. The MeTC therefore had jurisdiction.
• Criminal Liability for Other Deceits: Article 318(1) requires three elements: a false pretense, fraudulent act, or pretense other than those in Articles 315, 316, and 317; made or executed prior to or simultaneously with the commission of the fraud; and resulting damage or prejudice. A false pretense is an intentional false statement concerning a material matter of fact, while fraudulent concealment hides facts the other party ought to know. The false statement must be the very cause or only motive for the complainant’s parting with property. Here, Caspillo’s trial testimony was a judicial admission that he already saw the mortgage annotations on the titles and knew the originals were with the bank; this admission contradicted his later assertion that he did not read the annotations because negotiations were hurried. Judicial admissions are conclusive absent palpable mistake. Thus, no fraud was established from the mortgage nondisclosure. The MeTC’s alternative basis, subjecting Unit H to sangla-tira arrangements with other persons, also failed because those arrangements with Arevalo, Jr. and Josol came in 2011 and 2012, after the 2009 MOA. Accordingly, no false pretense existed prior to or simultaneously with the fraud. Damage remained, but the first two elements were absent.
• Civil Liability After Acquittal: Under Article 29 of the Civil Code and Rule 120, Section 2 of the Rules of Court, an acquittal on reasonable doubt does not by itself bar civil liability for the same act or omission; the judgment must determine whether the act from which civil liability might arise did not exist. Padilla vs. Court of Appeals, an En Banc decision, holds that courts may adjudge civil liability in the same criminal case where an acquittal is pronounced. Civil liability survives when sourced from other obligations such as law, contract, quasi-contract, or quasi-delict. The Court set parameters for awarding such liability: the act or omission complained of must be the same as or related to that giving rise to civil liability; the civil liability must have been raised; the accused must have had an opportunity to be heard; and liability must be established by preponderance of evidence. Here, the source was the MOA contract; the loan was related to the acts complained of; civil liability was raised; the spouses admitted the loan and had every opportunity to prove payment but submitted no proof; and preponderance showed the principal remained unpaid. Civil liability was therefore adjudged with interest.

• Elements of Other Deceits under Article 318(1) — Article 318 is a catch-all provision covering deceits not falling under Articles 315, 316, and 317. Conviction requires: (a) a false pretense, fraudulent act, or pretense other than those in Articles 315, 316, and 317; (b) the false pretense or fraudulent act must be made or executed prior to or simultaneously with the fraud; and (c) the offended party suffered damage or prejudice. A false pretense is an intentional false statement concerning a material matter of fact and may be established by conduct and acts as well as by words. Fraudulent concealment hides facts the other party ought to know, and suppression of a material fact that a party is bound in good faith to disclose is equivalent to a false representation. The false statement or fraudulent representation must be the very cause or only motive for the complainant’s parting with property.
• Judicial admissions — Judicial admissions made by a party during trial in the same case are conclusive and require no further evidence to prove them. They are legally binding unless shown to have been made through palpable mistake or that no such admission was made.
• Prosecutorial approval and jurisdiction (Gomez vs. People) — The absence of the provincial, city, or chief state prosecutor’s signature or approval on the face of an Information does not divest the court of jurisdiction over the person of the accused or the subject matter. The deficiency is merely formal, may be cured at any stage, and may be waived through silence, acquiescence, or failure to raise it during arraignment or before entering a plea. It is sufficient that the investigating prosecutor’s resolution recommending the filing bears the imprimatur of the approving prosecutor.
• Civil liability after acquittal (Article 29 and Padilla doctrine) — An acquittal on reasonable doubt does not extinguish civil liability arising from sources other than the delict. In the same criminal action, civil liability may be adjudged if: (1) the act or omission complained of in the criminal action is the same as or related to the act or omission giving rise to civil liability; (2) civil liability was raised in the criminal action; (3) the accused was given an opportunity to be heard on that point; and (4) civil liability was established by preponderance of evidence. The surviving obligation may be sourced from law, contract, quasi-contract, or quasi-delict. Civil liability based on delict is extinguished only if the final judgment declares that the act or omission from which civil liability might arise did not exist.

• "All told, the handling prosecutor's authority, particularly as it does not appear on the face of the Information, has no connection to the trial court's power to hear and decide a case. Hence, Sec. [3(d)], Rule 117, requiring a handling prosecutor to secure a prior written authority or approval from the provincial, city or chief state prosecutor before filing an Information with the courts, may be waived by the accused through silence, acquiescence, or failure to raise such ground during arraignment or before entering a plea. If, at all, such deficiency is merely formal and can be cured at any stage of the proceedings in a criminal case." — This passage, quoting Gomez vs. People, states the ratio for rejecting the jurisdictional challenge to the Information.
• "For an accused to be held criminally liable under Article 318, the following elements must exist: (a) [The accused makes a] false pretense, fraudulent act or pretense other than those in [Articles 315, 316, and 317]; (b) such false pretense, fraudulent act or pretense must be made or executed prior to or simultaneously with the commission of the fraud; and (c) as a result, the offended party suffered damage or prejudice." — This states the controlling elements of Other Deceits under Article 318(1).
• "Judicial admissions made by parties during trial in the same case are conclusive and do not require further evidence to prove them. 'They are legally binding on the party making them except when it is shown that they have been made through palpable mistake, or that no such admission was made,' neither of which exists in this case." — This passage was used to hold Caspillo to his admission that he knew of the bank mortgages despite his later contrary explanation.
• "The award of civil liability based on sources other than the delict can be made in the same criminal action, subject to the following conditions: (1) the act or omission complained of in the criminal action is the same or is related to the act or omission giving rise to the civil liability; (2) the civil liability of the accused was raised in the criminal action; (3) the accused was given the opportunity to be heard on this point; and (4) the civil liability of the accused was established by a preponderance of evidence." — This is the Court’s four-part framework for adjudging civil liability from non-delictual sources after an acquittal.

• Quisay vs. People, 778 Phil. 481 (2016) — Relied upon by petitioners but abandoned by Gomez vs. People on the issue of prosecutorial approval and jurisdiction.
• Gomez vs. People, 889 Phil. 915 (2020) — Controlling authority; held that lack of prosecutor approval on the face of an Information does not divest the court of jurisdiction and that the deficiency is formal and waivable.
• Osorio vs. People, 834 Phil. 768 (2018) — Cited for the broad, catch-all nature of Article 318 and its elements.
• Marcos vs. People, G.R. No. 252839, November 10, 2021 — Followed for the definitions of false pretense and fraudulent concealment.
• Guinhawa vs. People, 505 Phil. 383 (2005) — Followed for the elements of Other Deceits and the illustration of fraudulent concealment; reiterated that the false representation must be the very cause or only motive for parting with property.
• Hun Hyung Park vs. Eung Won Choi, 850 Phil. 807 (2019) — Cited for the conclusiveness of judicial admissions made during trial.
• De Guzman vs. Alvia, 96 Phil. 558 (1955) — Followed for the rule that a civil action is not extinguished absent a final declaration that the fact from which civil liability might arise did not exist.
• Padilla vs. Court of Appeals, 214 Phil. 492 (1984) — En Banc controlling precedent allowing courts to adjudge civil liability in the same criminal case where an acquittal is pronounced.
• De Leon, Jr. vs. Roqson Industrial Sales, Inc., G.R. No. 234329, November 23, 2021 — Followed for the principle that Article 29 contemplates an act or omission from which liability may arise based on sources of obligation independent of the delict.
• First Producers Holdings Corporation vs. Co, 391 Phil. 441 (2000) — Cited for allowing an accused to invoke all defenses pertaining to civil liability in the criminal action.

• Article 318, first paragraph, Revised Penal Code — Punishes Other Deceits with arresto mayor and a fine; applied as the offense charged. Conviction requires a false pretense, prior or simultaneous execution, and resulting damage, none of which was proven beyond reasonable doubt.
• Article 29, Civil Code — Provides that when an accused is acquitted because guilt was not proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted and requires only preponderance of evidence; applied to sustain the spouses’ civil liability despite acquittal.
• Article 100, Revised Penal Code — States that every person criminally liable for a felony is also civilly liable; cited in relation to the rules governing civil liability arising from crimes.
• Article 1157, Civil Code — Enumerates the sources of obligations: law, contracts, quasi-contracts, and quasi-delicts; the spouses’ surviving liability was based on contract, specifically the MOA.
• Rule 112, Section 4, paragraph 3, Rules of Criminal Procedure — Requires prior written authority or approval before an Information is filed; under Gomez, violation of this requirement was not jurisdictional and could be waived.
• Rule 111, Section 1(a) and Section 2, Rules of Court — Governs the implied institution of the civil action with the criminal action and provides that extinction of the penal action does not carry with it extinction of the civil action; applied to the spouses’ civil liability.
• Rule 120, Section 2, Rules of Court — Governs the contents of judgments, including acquittal judgments; requires the court to determine whether the act or omission from which civil liability might arise did not exist, and authorized the civil award in this case.

Associate Justices Zalameda and Marquez concurred. Chief Justice Gesmundo and Associate Justices Caguioa, Hernando, and Lazaro-Javier filed concurring opinions. Associate Justice Singh filed a separate concurring opinion, and Associate Justice J. Lopez filed a separate opinion. Associate Justices Inting, M. Lopez, and Kho, Jr. joined the concurring and dissenting opinion of Justice Dimaampao.

• Associate Justice Gaerlan — Dissented; the principal text does not reproduce the dissenting grounds.
• Senior Associate Justice Leonen — Dissented and joined Justice Dimaampao; the principal text does not reproduce the dissenting grounds.
• Associate Justice Dimaampao — Filed a concurring and dissenting opinion; the principal text does not reproduce the grounds.