G.R. No. 142612 - Angeles vs. Secretary of Justice

Background and parties
On November 19, 1996, petitioners Oscar and Emerita Angeles filed a criminal complaint for estafa under Article 315 of the Revised Penal Code against respondent Felino Mercado before the Provincial Prosecution Office of Santa Cruz, Laguna.
Mercado is married to Laura, the sister of Emerita Angeles, making him the Angeles spouses’ brother-in-law.

Antichresis (“sanglaang-perde”) transaction
In November 1992, Mercado induced the Angeles spouses to finance an antichresis contract with landowner Juana Suazo: eight parcels of lanzones-bearing land in Nagcarlan, Laguna, for a five-year term (1993–1997) at P210,000, with Mercado to administer the lands and handle paperwork.
The Angeles spouses resided in Manila on weekdays; Mercado managed the orchard, reporting P46,210 in 1993 (reinvested in more trees), no yield in 1994, and no accounting for 1995. Only after demanding an accounting did the spouses discover the contract was titled solely in the names of Mercado and his wife.

Mercado’s counter-affidavit and partnership claim
Mercado denied estafa, asserting an industrial partnership (“sosyo industrial”) with the Angeles spouses since 1991: the spouses as financiers, Mercado (and his wife) as industrial partners.
He submitted bank receipts of deposits for Emerita Angeles, contracts under his name, and minutes of a barangay conciliation on September 7, 1996, where Oscar Angeles acknowledged a written sosyo industrial agreement with equal profit-sharing.

Province Prosecutor’s resolutions
On January 3, 1997, an initial resolution recommended filing estafa information against Mercado but was issued without considering his counter-affidavit.
After Mercado sought reconsideration, an amended resolution dated February 26, 1997, dismissed the complaint for lack of credible evidence of deceit; a motion for reconsideration was denied on August 4, 1997.

Secretary of Justice resolution
On appeal, the Angeles spouses argued the contract’s sole titling in Mercado’s name proved misappropriation of their P210,000.
By Letter-Resolution No. 155 (February 1, 2000), the Secretary affirmed the dismissal: the spouses failed to prove deliberate deceit; evidence showed they knew the contract was under Mercado’s name and that a partnership existed; misapplication of partnership funds is a civil, not criminal, matter (citing People v. Clarin).

Petition to the Supreme Court
The Angeles spouses filed a Rule 65 petition for certiorari to annul the Secretary’s resolution, alleging grave abuse of discretion and asserting issues on partnership existence, misappropriation, and the propriety of filing estafa information.

Did the Secretary of Justice commit grave abuse of discretion amounting to lack of jurisdiction in dismissing the Angeles spouses’ appeal?
Did a partnership exist between the Angeles spouses and Mercado despite absence of a public instrument or SEC registration?
Assuming a partnership, did Mercado misappropriate the lanzones proceeds and fail to account after the spouses’ demand on September 7, 1996?
Should the Secretary of Justice have ordered the filing of an information for estafa against Mercado?