FIRST DIVISION

[ G.R. No. 230669, June 16, 2021 ]

REX SORONGON,[1] PETITIONER, VS. PEOPLE OF THE

PHILIPPINES, RESPONDENT.

DECISION

CAGUIOA, J:

Before the Court is a Petition for Review on Certiorari[2] (Petition) under Rule 45 of the Rules
of Court which seeks the reversal of the Decision[3] dated October 25, 2016 and Resolution[4]
dated February 21, 2017 of the Court of Appeals (CA) in CA-G.R. CR No. 01887.[5] The CA
affirmed the Decision[6] of the Regional Trial Court (RTC), Branch 65, San Miguel, Jordan,
Guimaras in Criminal Case No. 06-0949 finding petitioner Rex Sorongon (petitioner) guilty of
Estafa under Article 315, paragraph 1(b)[7] of the Revised Penal Code (RPC).

The Facts

Petitioner was charged with Estafa under Article 315, paragraph 1(b) of the RPC in an
Information that reads:

"That on or about July 2004, in the Municipality of B[ue]navista, Province of

Guimaras, Philippines, the said accused having received from Nelly Vander Bom[8]
a mixer valued at Twenty Five Thousand (P25,000.00) Pesos under express
obligation of turning over said mixer upon demand and once in possession of said
mixer, far from complying with his obligation with intent to gain and to defraud, the
said accused, did then and there wilfully, unlawfully and feloniously, misappropriate,
misapply and convert the said mixer to his own personal use and benefit to the
damage and prejudice of Nelly Van der Bom, the sum of Twenty Five Thousand
(P25,000.00) Pesos Phil. Currency.

CONTRARY TO LAW."[9]

When arraigned, petitioner pleaded not guilty to the crime charged.[10] Thereafter, trial on the
merits ensued.

Evidence of the Prosecution

During trial, the prosecution presented the testimony of private complainant, Nelly Vander
Bom[11] (Nelly), and those of Francisco Igpuara[12] (Francisco), Arnaldo Marcasote (Arnaldo),
Daren Almarquez (Daren), and Bernaros Andreos Gregorios Keultjes[13] (Bernaros).

Nelly testified that she and her husband, Hans Peter Van der Bom[14] (Hans), hired petitioner, a
civil engineer, to put up a water system for their water refilling business. Sometime in July
2004, after the project was completed, petitioner asked to borrow the subject cement mixer for
his project in Iloilo City. Nelly agreed to lend the cement mixer on the condition that petitioner
would return it as soon as his project is completed.[15] Nelly claimed that petitioner, however,
failed to return her cement mixer when she demanded for it after several months had passed.
She thereafter asked her lawyer to write a formal demand letter to petitioner, but the same also
went unheeded.[16]

The prosecution also presented the testimony of Francisco, a mechanic who did maintenance
work for the equipment owned by Nelly and her husband. Francisco testified that he was
familiar with the subject cement mixer and that only he and petitioner can borrow it from the
Van der Boms. He claimed that Nelly's husband, Hans, told him that petitioner borrowed the
cement mixer and brought it to Iloilo. Francisco admitted to not knowing whether petitioner
returned it.[17]

Arnaldo, an employee of the Van der Boms, also testified about knowing that petitioner
borrowed the cement mixer from the couple. Petitioner allegedly told him that he would bring it
to Iloilo and even asked Arnaldo to teach him and his employees how to operate the equipment.
[18]

Another employee of Nelly and her husband, Daren, testified that she personally knew
petitioner and saw him in July 2004 when he borrowed the cement mixer from the couple. She
allegedly saw that the cement mixer was attached to an owner-type jeepney, to be carted to
petitioner's house in Sto. Rosario. Daren also testified that the Van der Boms purchased the
cement mixer from their friend, Bernaros. She also claimed petitioner did not return it to the
couple.[19]

Finally, the prosecution presented Bernaros, the friend of Nelly and her husband from whom
they purchased the cement mixer. Bernaros testified that the cement mixer was a heavy-duty
equipment made in Germany and had a wider mouth compared to an ordinary mixer. He further
testified that he sold it to the Vander Boms in 2000 for P50,000.00.[20]

Evidence of the Defense

The defense, on the other hand, presented the testimonies of petitioner and Rudy de la Torre[21]
(Rudy), a Barangay Kagawad of Barangay Sto. Rosario, Buenavista, Guimaras.

Rudy testified that Nelly and her husband filed a complaint in the barangay against petitioner
about unpaid accounts, which included a cement mixer valued at P40,000.00. Considering that
Nelly failed to present any receipts for her claims, Rudy purportedly advised her to just settle
the case amicably. Nelly eventually agreed and the parties signed an amicable settlement in
March 2005.[22]

Petitioner testified that he was employed by the Van der Boms from December 22, 2000 to
March 2004 as the liaison officer of their water refilling business. He denied borrowing the
cement mixer and was surprised when summoned to the barangay. Petitioner corroborated the
testimony of Rudy that he (petitioner) and Nelly reached an amicable settlement before the
barangay. Thereafter, however, he received the complaint in the instant case.[23]

The amicable settlement provided that the parties agreed that thereafter, there will be no
countercharges "related to this case" to be filed "in the future."[24] The minutes of the barangay
proceedings also provided, in part:

1. Complainant alleged that the respondent barrowed (sic) from her various
equipments (sic) such as cement mixer, accessories of a computer and (sic) when she
demanded for the return of the same, respondent failed to do so. She also charged
that certain amount in form of cash advances was not paid by the respondent.

xxxx

4. Complainant agreed to waive her ownership of properties in question in favor of

the respondent provided (sic) no further case or counter charge (sic) will be filed by
the respondent.[25]

Petitioner also testified that in January 2005, he filed a labor case against the Van der Boms
where he submitted the amicable settlement he and Nelly agreed to before the barangay. The
National Labor Relations Commission (NLRC) allegedly took note of petitioner's indebtedness
contained in the settlement agreement and deducted the same from the award it granted in his
favor.[26]

Ruling of the RTC

After trial on the merits, the RTC convicted petitioner of the crime charged in its Decision[27]
dated July 25, 2011, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered finding the

accused GUILTY beyond reasonable doubt of the crime of Estafa, defined and
penalized under Article 315, paragraph 1 (B).

There being no mitigating or aggravating circumstances and applying the

Indeterminate Sentence Law, accused is hereby sentence[d] to suffer a penalty of
imprisonment of Three (3) years of prision correccional to Seven (7) years of prision
mayor and to pay the costs.

The bailbond posted by the accused is ordered cancelled and the accused is ordered
ARRESTED.

SO ORDERED.[28]

In finding petitioner guilty, the RTC found that the prosecution was able to establish that the
subject cement mixer was owned by Nelly and her husband and that petitioner borrowed the
same. The trial court did not give weight to the bare denial of petitioner, noting that the
testimony of Nelly was fully corroborated by witnesses. As such, borrowing a thing necessitates
an express and implied intention to return it and demand by the owner is not required under the
law. The failure to account for the thing borrowed upon demand raises the presumption that the
borrower has misappropriated it.[29]

In this regard, the RTC also noted the admissions made by petitioner. The first was with respect
to having received Nelly's letter demanding the return of the equipment. The second was that
the cement mixer was part of his and Nelly's amicable settlement before the barangay. Hence,
the trial court observed: if indeed petitioner did not borrow the cement mixer, he should have
objected to its inclusion in the agreement. As testified to by Rudy, this agreement was never
repudiated. Petitioner, in fact, even submitted the agreement before the NLRC in relation to his
labor case against the Van der Boms and allowed that its value be deducted from the award
granted to him by the Commission.[30]

The RTC, however, held that petitioner is no longer civilly liable in light of the deduction of the
value of the cement mixer in the award made by the NLRC in favor of petitioner in his labor
case against the Van der Boms.[31]

Ruling of the CA

In the assailed Decision[32] dated October 25, 2016, the CA sustained petitioner's conviction
and held that the prosecution has established his guilt beyond reasonable doubt for the crime of
Estafa.

The CA held it beyond dispute that petitioner borrowed and received the subject cement mixer
from Nelly. The CA further held that Nelly's act of lending the equipment gave rise to a contract
of commodatum between her and petitioner; in which case, petitioner, as the borrower, did not
acquire ownership over the thing borrowed and had the duty to return the same thing to the
lender, Nelly. Corollary, the phrase "or any other obligation involving the duty to make delivery
of, or to return the same" under Article 315 of the RPC applies in this case as it may refer to a
contract of commodatum.[33]

Moreover, the CA held that following case law, failure to account upon demand for funds or
properties held in trust, is circumstantial evidence of misappropriation. The Court found that
Nelly duly demanded for the return of the cement mixer to her, but petitioner ignored these
demands. Consequently, the failure of petitioner in the case at bar to account for the cement
mixer upon Nelly 's demand constituted circumstantial evidence that he had misappropriated or
converted the thing for his personal use. Petitioner's failure to return the cement mixer
indubitably deprived Nelly the right to use the property, to her prejudice and detriment.[34]

The CA likewise affirmed the trial court's finding that the inclusion of the value of the cement
mixer in the computation of the labor arbiter of the award given in petitioner's favor bolstered
the claim of the prosecution that he borrowed and received the cement mixer and appropriated it
for his personal use.[35]

In the same manner, the CA held that the amicable settlement between petitioner and Nelly did
not exonerate him from criminal liability, as nowhere in the said settlement did Nelly relinquish
her rights or interests over her claims. At any rate, the CA noted, compromise or amicable
settlement entered into after the commission of a crime does not extinguish an accused's
criminal liability since the offense is against the State.[36]

Petitioner moved for reconsideration of the CA Decision, but the same was denied in the
assailed Resolution[37] dated February 21, 2017. Hence, the instant Petition.

Issue

The sole issue for the Court's resolution is whether the lower courts erred in convicting
petitioner of Estafa under Article 315, paragraph 1(b) of the RPC.

The Court's Ruling

The Petition is meritorious.

Preliminarily, determination of guilt is fundamentally a factual issue which the Court generally
does not entertain in a Rule 45 petition. Settled is the rule that factual findings of the trial court
are accorded great weight and respect on appeal, especially when such findings are supported by
substantial evidence on record. There are recognized exceptions to this rule, however, and one
of which is where there has been a misapprehension of facts by the lower courts.[38] This
exception applies in this case.

The trial court and the CA failed to appreciate the fact that the parties had entered into an
amicable settlement prior to the filing of the Information against petitioner. Following
jurisprudence on the effect of novation and compromise in Estafa cases under Article 315,
paragraph 1(b), the amicable settlement between the parties in this case had effectively
prevented the incipient criminal liability of petitioner. Petitioner may have not assigned this as
an error in his petition before the Court, but this is of no moment. The well-settled rule is that an
appeal in a criminal case throws the whole case wide open for review and that it becomes the
duty of the Court to correct such errors as may be found in the judgment appealed from,
whether they are assigned as errors or not.[39]

Indeed, the long-standing general rule is that criminal liability for Estafa is not affected by
payment, indemnification, reimbursement of or compromise as to the amounts misappropriated,
or by the novation of the contract. This is because Estafa is a public offense which must be
prosecuted and punished by the State on its own motion even though complete reparation
should have been made of the damage suffered by the offended party.[40] Since it is committed
against the State, the private offended party may not waive or extinguish the criminal liability
that the law imposes for the commission of the crime.[41]

Nevertheless, in cases involving the type of Estafa under Article 315, paragraph 1 (b), where
there is an underlying contractual relationship or bilateral agreement between the parties which
they can modify or alter,[42] the Court has consistently acknowledged at the same time the
possible effects of novation. The Court held that in these cases, novation may serve to either
prevent the rise of criminal liability, or to cast doubt on the true nature of the original basic
transaction, whether or not it was such that the breach of the obligation would not give rise to
penal responsibility, as when money loaned is made to appear as a deposit, or other similar
disguise is resorted to.[43] The prevention of the rise of criminal liability happens when there is
novation before an Information is filed in court. As the Court first held in People v. Nery[44]
(Nery):

The novation theory may perhaps apply prior to the filing of the criminal
information in court by the state prosecutors because up to that time the original trust
relation may be converted by the parties into an ordinary creditor-debtor situation,
thereby placing the complainant in estoppel to insist on the original trust. But after
 the justice authorities have taken cognizance of the crime and instituted action in
court, the offended party may no longer divest the prosecution of its power to exact
the criminal liability, as distinguished from the civil. The crime being an offense
against the state, only the latter can renounce it (People vs. Gervacio, 54 Off. Gaz.
2898; People vs. Velasco, 42 Phil. 76; U.S. vs. Montañes, 8 Phil. 620).[45]

In Nery, the complainant entrusted diamond rings to the accused to be sold by her on
commission. The accused, however, neither turned over any proceeds of the sale of the items
nor returned them. During the pendency of the case before the trial court, the accused executed
a deed in favor of the complainant. The deed contained the promise of accused to pay her debt
and committing that in the event that she failed to comply with the said compromise, the case
filed against her by the private complainant would push through. When the accused later raised
the defense of novation, therefore, the Court rejected the same on the ground that the purported
novation occurred after the criminal case had already been instituted and while it was already
pending trial.

The Court further emphasized in Nery that in order for novation to effectively prevent the
incipience of criminal liability, its concept under the Civil Code has to be followed as well.
Thus:

Even in Civil Law the acceptance of partial payments, without further change in the
original relation between the complainant and the accused, can not produce
novation. For the latter to exist, there must be proof of intent to extinguish the
original relationship, and such intent can not be inferred from the mere acceptance of
payments on account of what is totally due. Much Jess can it be said that the
acceptance of partial satisfaction can effect the nullification of a criminal liability
that is fully matured, and already in the process of enforcement. Thus, this Court has
ruled that the offended party's acceptance of a promissory note for x x x all or part of
the amount misapplied does not obliterate the criminal offense (Camus vs. Court of
Appeals, 48 Off. Gaz. 3898).[46]

Novation in the Civil Code is found in Article 1291, which provides that novation arises when
there is a substitution of an obligation by a subsequent one that extinguishes the first, either by
changing the object or the principal conditions, or by substituting the person of the debtor, or by
subrogating a third person in the rights of the creditor.[47] For a valid novation to take place,
there must therefore be: (a) a previous valid obligation; (b) an agreement of the parties to make
a new contract; (c) an extinguishment of the old contract; and (d) a valid new contract.[48]

Novation, likewise, is never presumed. For it to be effective, it is imperative that the

extinguishment be so declared in unequivocal terms, or that the old and the new obligations be
on every point incompatible with each other. In case of only slight modifications, the old
obligation would still prevail.[49] The Court, in Quinto v. People[50] (Quinto), has so elaborated:

There are two ways which could indicate, in fine, the presence of novation and
thereby produce the effect of extinguishing an obligation by another which
substitutes the same. The first is when novation has been explicitly stated and
declared in unequivocal terms. The second is when the old and the new obligations
are incompatible on every point. The test of incompatibility is whether or not the two
obligations can stand together, each one having its independent existence. If they
cannot, they are incompatible and the latter obligation novates the first. Corollarily,
changes that breed incompatibility must be essential in nature and not merely
accidental. The incompatibility must take place in any of the essential elements of
the obligation, such as its object, cause or principal conditions thereof; otherwise, the
change would be merely modificatory in nature and insufficient to extinguish the
original obligation.[51] (Italics in the original)

Quinto also involved the receipt of jewelry by the accused from the complainant for the purpose
of selling the same on commission basis and with the express obligation on the part of the
accused to turn over the proceeds of the sale thereof, or to return the said jewelry, if not sold.
The accused interposed the defense that the agreement between her and the complainant was
effectively novated when the latter consented to receive payment on installments directly from
the buyers of the jewelry. The Court disagreed, concluding that there has never been any animus
novandi between or among the parties. It explained that the changes alluded to by the accused
consisted only in the manner of payment. There was really no substitution of debtors since the
complainant merely acquiesced to the payment but did not give her consent to enter into a new
contract.

Also, in Metropolitan Bank and Trust Company v. Reynado,[52] the respondents were charged
with Estafa under Article 315, paragraph 1(b) for conniving with the bank's client, Universal
Converter Philippines, Inc. (Universal), to make huge withdrawals against uncleared regional
check deposits and without prior approval of the bank's head office. Before the Information was
filed in court, however, the bank and Universal entered into a Debt Settlement Agreement.
Thus, the issue that confronted the Court was whether the execution of the Debt Settlement
Agreement precluded the bank from holding respondents liable to stand trial for Estafa under
Article 315, paragraph 1(b). In ruling in the negative, the Court held that the execution of the
Debt Settlement Agreement did not prevent the incipience of the criminal liability of
respondents.[53] It explained:

Even if the instant case is viewed from the standpoint of the law on contracts, the
disposition absolving the respondents from criminal liability because of novation is
still erroneous.

Under Article 1311 of the Civil Code, "contracts take effect only between the parties,
their assigns and heirs, except in case where the rights and obligations arising from
the contract are not transmissible by their nature, or by stipulation or by provision of
law." The civil law principle of relativity of contracts provides that "contracts can
only bind the parties who entered into it, and it cannot favor or prejudice a third
person, even if he is aware of such contract and has acted with knowledge thereof."

In the case at bar, it is beyond cavil that respondents are not parties to the
agreement. The intention of the parties thereto not to include them is evident
either in the onerous or in the beneficent provisions of said agreement. They are
not assigns or heirs of either of the parties. Not being parties to the agreement,
respondents cannot take refuge therefrom to bar their anticipated trial for the
crime they committed. It may do well for respondents to remember that the
criminal action commenced by petitioner had its genesis from the alleged fraud,
unfaithfulness, and abuse of confidence perpetrated by them in relation to their
positions as responsible bank officers. It did not arise from a contractual dispute or
matters strictly between petitioner and Universal. This being so, respondents
cannot rely on subject settlement agreement to preclude prosecution of the
offense already committed to the end of extinguishing their criminal liability or
prevent the incipience of any liability that may arise from the criminal offense.
This only demonstrates that the execution of the agreement between petitioner and
Universal has no bearing on the innocence or guilt of the respondents.[54] (Emphasis
supplied)

Simply put, there was no attempt to compromise, settle, or novate the criminal liability of the
respondents in the above case at any point in time. The Debt Settlement Agreement, while
executed before the Information against respondents was filed in court, did not include them as
parties. Consequently, respondents cannot benefit therefrom and the original trust relations
between them and the bank remained unchanged.

In yet another case involving a violation under Article 315, paragraph 1(b), Degaños v. People,
[55] the accused was charged with Estafa for misappropriating the pieces of jewelries entrusted
to her by the complainants to be sold on commission. The accused argued that his partial
payments to the complainants novated his contract with them from agency to loan, thereby
converting his liability from criminal to civil. He insisted that his failure to complete his
payments prior to the filing of the complaint-affidavit by the complainants notwithstanding the
fact that the complainants later required him to make a formal proposal before the barangay
authorities on the payment of the balance of his outstanding obligations confirmed that novation
had occurred. The Court disagreed with the argument of the accused, expounding once again on
the nature and role of novation in a criminal prosecution. It so held that although the novation of
a contract of agency to make it one of sale may relieve an offender from an incipient criminal
liability, that did not happen in the said case, for the partial payments and the proposal to pay
the balance the accused made during the barangay proceedings were not at all incompatible with
his liability under the agency that had already attached. Rather than converting the agency to
sale, therefore, he even thereby confirmed his liability as the sales agent of the complainants.

Applying the foregoing discussion to the case at bar, the Court finds that the original contract of
commodatum between the herein parties was effectively novated when they entered into an
amicable settlement before the barangay in March 2005, which amicable settlement came about
before the Information for Estafa against petitioner was filed in January 2006.[56] To reiterate,
the subject of the amicable settlement were the unpaid accounts which petitioner supposedly
owed Nelly and her husband. The purpose of the proceedings, in other words, was to settle these
monetary or civil liabilities of petitioner to the spouses Van der Bom. These unpaid accounts
included the value of the cement mixer and some other personal properties, as well as alleged
loans and cash advances which petitioner and his wife had borrowed from the couple.[57]

Correlatively, in January 2005 or prior to the barangay proceedings in March 2005, the lawyer
of the Van der Boms wrote a demand letter to petitioner about the supposed monetary liabilities
which he incurred from the couple. The amount of P25,000.00 representing the amount of the
cement mixer which petitioner obtained from the couple in 2004 was among those listed, along
with other sums which were all included in the unpaid accounts made subject of the barangay
proceedings.[58] Also, in his testimony before the trial court, the Pangkat Chairman, Rudy de la
Torre, affirmed that the cement mixer was included as a subject matter before the barangay
proceedings.[59]

The amicable settlement stipulated, in no uncertain terms, that the parties agreed that they
would desist from filing countercharges in the future.[60] Contrary to the findings of the CA, as
well, the minutes of the proceedings further revealed that Nelly agreed to waive her ownership
of the properties subject of their dispute in favor of petitioner. Unmistakably, one of these
properties was the cement mixer. Again, the pertinent portions of the minutes of the barangay
proceedings provide:

1. Complainant alleged that the respondent barrowed (sic) from her various
equipments (sic) such as cement mixer, accessories of a computer and (sic) when
she demanded for the return of the same, respondent failed to do so. She also
charged that certain amount in form of cash advances was not paid by the
respondent.

xxxx

4. Complainant agreed to waive her ownership of properties in question in

favor of the respondent provided (sic) no further case or counter charge (sic) will
be filed by the respondent.[61] (Emphasis supplied)

Moreover, the waiver made by Nelly was on the condition that petitioner would not file any
case or countercharge against Nelly in the future.[62] Petitioner kept to his end of this bargain.
The labor case which he filed against the couple was not a violation of the agreement since it
was filed in January 2005, or prior to the barangay proceedings in March 2005.

With Nelly waiving her ownership over the cement mixer in favor of petitioner in exchange for
the concession that he would refrain from filing any case against her in the future, there was
clearly an implied novation of the original contract of commodatum between her and petitioner.
[63] The waiver effectively extinguished the original contract of petitioner and Nelly and, in its
stead, a new contract in the form of the amicable settlement they executed before the barangay,
emerged. The intention to extinguish the old obligation might not have been done expressly, but
considering that the new contract of the parties was, by all accounts, incompatible with their
original contract of commodatum, novation had effectively occurred. The incompatibility was
far from being merely incidental or modificatory as the original bailor-bailee relationship
between the parties was altogether severed. While ownership by the bailor over the thing loaned
is not an indispensable requirement in commodatum as Article 1938 of the Civil Code very well
provides that the bailor in commodatum need not be the owner of the thing loaned, it is
important to note in this case, however, that the waiver over the ownership of the property,
which was the very object of the original contract of the parties, was made in favor of petitioner.
This went against a well-established concept in commodatum that ownership of the thing loaned
does not pass to the borrower.[64]

In plain terms, prior to the filing of the Information in court, Nelly had already renounced or
relinquished her ownership over the property subject of the criminal case in favor of petitioner.
Consequently, therefore, the elements of the crime of Estafa under Article 315, paragraph 1(b)
of the RPC became nonexistent. These elements are:

(1) the offender receives the money, goods or other personal property in trust, or on
commission, or for administration, or under any other obligation involving the
duty to deliver, or to return, the same;
   
(2) the offender misappropriates or converts such money or property or denies
receiving such money or property;
   
(3) the misappropriation or conversion or denial is to the prejudice of another; and
   
(4) the offended party demands that the offender return the money or property.

In particular, there is no longer any duty or obligation on the part of petitioner to deliver or
return the cement mixer to Nelly or to any other person for that matter because the ownership
thereof had already been transferred to petitioner by Nelly's waiver and renunciation in his
favor. It follows, too, that there is no longer any prejudice caused to another.

Perforce, with the new obligation under the amicable settlement between Nelly and petitioner
having the effect of novating their old obligation, Nelly is now estopped from insisting on the
latter. Accordingly, any incipient criminal liability of petitioner involving his failure to return
the cement mixer was effectively averted.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed October 25,
2016 Decision and February 21, 2017 Resolution of the Court of Appeals in CA-G.R. CR No.
01887, which affirmed the July 25, 2011 Decision of the Regional Trial Court, Branch 65, San
Miguel, Jordan, Guimaras in Criminal Case No. 06-0949 finding petitioner Rex Sorongon guilty
beyond reasonable doubt of Estafa, are REVERSED and SET ASIDE. Petitioner Rex
Sorongon is hereby ACQUITTED of the crime charged against him. Let an entry of judgment
be issued immediately.

SO ORDERED.

Gesmundo, C.J., (Chairperson), Carandang, Zalameda, and Gaerlan, JJ., concur.

[1] Rex Soroñgon in some parts of the rollo.

[2] Rollo, pp. 9-24.

[3]
Id. at 27-43. Penned by Associate Justice Pablito A. Perez, with Associate Justices Pamela
Ann Abella Maxino and Gabriel T. Robeniol concurring.

[4] Id. at 45-46.

[5] Also CA-G.R. CEB-CR No. 01887 in some parts of the rollo.

[6]
Id. at 47-66. Dated July 25, 2011, promulgated on February 17, 2012 and penned by Judge
Merlin D. Deloria.

[7] Also Article 315 sub-paragraph 1(b), Article 315, Sub-Section 1(B), and Art. 315 Sec. 1(b)
in some parts of the rollo.

[8] Nelly Mijares Van Der Bom in some parts of the rollo.
[9] Rollo, p. 28.

[10] Id.

[11] Van Der Bom in some parts of the rollo.

[12] Francisco Ygpuara in some parts of the rollo.

[13] Ben in some parts of the rollo.

[14] Hans Van der Bom in some parts of the rollo.

[15] Rollo, pp. 29, 52-53.

[16] Id. at 29, 48.

[17] Id. at 48.

[18] Id.

[19] Id. at 49.

[20] Id.

[21] Id. at 50.

[22] Id.

[23] Id. at 51.

[24] Records, p. 308.

[25] Id. at 310.

[26] Rollo, pp. 16, 51.

[27] Supra note 6.

[28] Id. at 66.

[29] Id. at 55-56.

[30] Id. at 56-65.

[31] Id. at 66.

[32] Supra note 3.

[33] Id. at 33.

[34] Id. at 34.

[35] Id. at 36.

[36] Id. at 37.

[37] Supra note 4.

[38] See Macayan, Jr. v. People, G.R. No. 175842, March 18, 2015, 753 SCRA 445, 458-459.

[39]
Lapi v. People, G.R. No. 210731, February 13, 2019, 892 SCRA 680, 688, citing Ferrer v.
People, 518 Phil. 196, 220 (2006).

[40]See Metropolitan Bank and Trust Company v. Reynado, G.R. No. 164538, August 9, 2010,
627 SCRA 88, 98-99, citing Firaza v. People, G.R. No. 154721, March 22, 2007, 518 SCRA
681, 694; Recuerdo v. People, G.R. No. 168217, June 27, 2006, 493 SCRA 517, 536; People v.
Moreno, 373 Phil. 336, 349 (1999); and People v. Ladera, 398 Phil. 588, 602 (2000).

[41] Tamayo v. People, G.R. No. 174698, July 28, 2008, 560 SCRA 312, 324.

[42] See People v. Tanjutco, No. L-23924, April 29, 1968, 23 SCRA 361, 373.

[43]
Degaños v. People, G.R. No. 162826, October 14, 2013, 707 SCRA 438, 451-452, citing
People v. Nery, No. L-19567, February 5, 1964, 10 SCRA 244, 247.

[44] Id.

[45] Id. at 247.

[46] Id. at 247-248.

[47]Heirs of Servando Franco v. Gonzales, G.R. No. 159709, June 27, 2012, 675 SCRA 96,
106-107.

[48] Id. at 107.

[49] See Degaños v. People, supra note 43, at 449-450.

[50] G.R. No. 126712, April 14, 1999, 305 SCRA 708.

[51] Id. at 715-716.

[52] Supra note 40.

[53] The Court in this case upheld the general rule that a compromise or settlement entered into
after the commission of the crime does not extinguish accused's liability for Estafa. The Court
cited several cases to support its holding, to wit:

x x x In Firaza v. People and Recuerdo v. People, this Court ruled that in a crime of
Estafa, reimbursement or belated payment to the offended party of the money
swindled by the accused does not extinguish the criminal liability of the latter. We
also held in People v. Moreno and in People v. Ladera that "criminal liability for
estafa is not affected by compromise or novation of contract, for it is a public
offense which must be prosecuted and punished by the Government on its own
motion even though complete reparation should have been made of the damage
suffered by the offended party." Similarly in the case of Metropolitan Bank and Trust
Company v. Tonda cited by petitioner, we held that in a crime of estafa,
reimbursement of or compromise as to the amount misappropriated, after the
commission of the crime, affects only the civil liability of the offender, and not his
criminal liability. (Id. at 98-99.)

Notably, however, the above-cited cases, save for Tonda, did not involve the kind of
Estafa in Article 315 paragraph 1(b), where there is an underlying original obligation
which can be novated. Firaza and Recuerdo involved violations under Article 315
paragraph 2(d), particularly on issuing checks despite full knowledge that they were
worthless. In the same vein, Moreno, and Ladera both involved violations under
Article 315 paragraph 2(a) for employing false pretenses in undertaking recruitment
of others for employment abroad.
 Tonda, on the other hand, did involve a violation under Article 315 paragraph 1(b) in
relation to the Trust Receipts Law. The parties attempted to enter into a loan
restructuring agreement which entailed the respondents opening a savings account
and depositing checks therein to pay the entire principal obligation of the
outstanding trust receipts account. The Court found that the parties failed to reach a
settlement because they failed to agree on the terms of the loan restructuring
agreement. The bank's purported acknowledgment of its receipt of the checks made
no reference to the trust receipt obligations of the parties, and the Court said that it
cannot be presumed to be anything more than an ordinary bank deposit. Clearly, in
this case, the underlying original contractual obligation of the parties was not
effectively modified so as to extinguish any incipient criminal culpability arising
therefrom.

[54] Metropolitan Bank and Trust Company v. Reynado, supra note 40, at 100-101.

[55] Supra note 43.

[56] Rollo, p. 11.

[57] TSN, August 18, 2009, p. 6.

[58] Records, p. 16; Annex A of Demand Letter; Exhibit B; Exhibit 7.

[59] TSN, August 18, 2009, p. 24.

[60] Supra note 24.

[61] Supra note 25.

[62] Id.

[63] Art. 1933 of the Civil Code provides that in commodatum, the bailor retains the ownership
of the thing loaned. One cannot lend a thing he does not own.

[64] See CIVIL CODE, Art. 1933 which provides:

ART. 1933. By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a certain time and
return it, in which case the contract is called a commodatum; or money or other
consumable thing, upon the condition that the same amount of the same kind and
quality shall be paid, in which case the contract is simply called a loan or mutuum.
Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.

In commodatum the bailor retains the ownership of the thing loaned,
while in simple
loan, ownership passes to the borrower.

Source: Supreme Court E-Library | Date created: February 15, 2022

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