CRIMINAL LAW; Estafa by means of False Pretenses under Article 315, paragraph 2(a) of the Revised Penal Code

Lopez v. People, G.R. No. 199294, 31 July 2013

Use of False Pretense of Capability not covered by Article 315 paragraph 2(a)

“The Information filed against petitioner and Ragonjan alleges that they conspired to use two false pretenses on Sy to defraud him on 10 October 1996, namely, that ‘[1] Subic Island [Club] would be developed by Primelink and that [2] the latter was duly authorized to sell membership certificates.’ We find merit in petitioner's contention that the prosecution failed to prove the element of use of false pretense regarding the first allegation. Nevertheless, we find the evidence sufficient to prove the use of false pretense on the second allegation.

Allegation on the Club's Development not "False"

It is impossible to determine from the records the category of false pretense the prosecution wished the first allegation to belong. Undoubtedly, it concerns Primelink's capability to develop the Club. Use of false pretense of capability is, however, not penalized under Section 2 (a) of Article 315. The category approximating the allegation in question is false pretense of power (to develop the Club). We proceed with our analysis using such category as frame of reference.” (Emphasis and underscoring supplied)

Further proof of conspiracy not necessary because witness already testified as to the central role played by the accused in the sale of unregistered shares

"First. Petitioner was no bystander in Primelink's sale of unregistered shares. Santiago, Primelink's comptroller and drafter of the Agreement, testified as witness for petitioner that after Primelink's Board of Directors approved the sale of the unregistered Club shares, petitioner "encouraged and instructed" the sale of "many shares," no doubt to raise as much capital for the Club as possible. This was the context of Sy's purchase of a Club share from Primelink.

Petitioner attempts to distance himself from the transaction between Ragonjan and Sy by claiming that Ragonjan violated standing company policy to be "candid" to buyers by disclosing Primelink's lack of license. We find this unpersuasive. In the first place, petitioner failed to present independent proof of such company policy, putting in serious doubt the veracity of his claim. Secondly, it is improbable for Ragonjan to take it upon herself to fabricate the serious claim that Primelink was a licensed securities dealer in violation of company policy, in the process risking her employment. It is more consistent with logic and common sense to hold that Ragonjan followed company policy in giving assurances to Sy that Primelink was licensed to sell Club shares. After all, Primelink stood to attract more investments if it presented itself to the public as a licensed securities dealer. Indeed, Sy was emphatic in his claim that he bought a Club share for P0.8 million because he was "convinced that there was a license to sell."

Petitioner's direct hand in the unlicensed selling of Club shares, coupled with Ragonjan's position in Primelink's organizational and sales structure, suffices to prove petitioner's liability under the allegation of use of false pretense of qualification. With Santiago's testimony on petitioner's central role in the sale of unregistered Primelink shares, further proof of conspiracy between petitioner and Ragonjan is superfluous.” (Emphasis and underscoring supplied)

License to Sell or Capacity to Sell is implied in sales and is different from warranties

“Second. There is no merit in the argument that Ragonjan's assurance to Sy of Primelink's status as a licensed securities dealer amounts to a warranty, and thus required, under the warranty clause of the reservation agreement, to be reduced in writing. The warranty clause, which provides —

Any representation or warranty made by the agent who handled this sale not embodied herein shall not bind the company, unless reduced in writing and confirmed by the President or the Chairman of the Board. 

refers to warranties on the terms of the share sold, not to the capacity of Primelink to sell Club shares. Indeed, the fact that "the seller has the right to sell the thing at the time when ownership is to pass," is implied in sales, dispensing with the need to expressly state such in the contract. Further, the clause operates to shield Primelink from claims of violation of unwritten warranties, not its officers from criminal liability for making fraudulent representation on Primelink's authority to sell Club shares.” (Emphasis and underscoring supplied)

Misappropriation or Conversion of money or property not required in Estafa by Means of False Pretenses

“Lastly, unlike estafa under paragraph 1 (b) of Article 315 of the Code, estafa under paragraph 2 (a) of that provision does not require as an element of the crime proof that the accused misappropriated or converted the swindled money or property. All that is required is proof of pecuniary damage sustained by the complainant arising from his reliance on the fraudulent representation. The prosecution in this case discharged its evidentiary burden by presenting the receipts of the installment payments made by Sy on the purchase price for the Club share.” (Emphasis and underscoring supplied)