G.R. No. 191240 - Castillo vs. Salvador

Cristina B. Castillo (petitioner) initiated a petition for review on certiorari challenging the Court of Appeals’ decision regarding the civil aspect of a case involving alleged fraud.
The underlying dispute arose from respondent Phillip R. Salvador, along with his brother Ramon Salvador, being charged with estafa under Article 315, paragraph 2(a) of the Revised Penal Code for allegedly defrauding Cristina Castillo of US$100,000.00 by inducing her to invest in a remittance business.
Although criminal proceedings were brought against both brothers, respondent was ultimately acquitted of the crime of estafa while his brother Ramon was acquitted for insufficiency of evidence.

Cristina Castillo and Phillip Salvador became acquainted in December 2000 through a common friend, from which a close personal and business relationship developed.
Castillo testified that she was engaged in various business ventures including real estate, education, boutique operations, and trading.
Respondent claimed a background in freight and remittance business, bolstered by his association with prominent personalities such as Jinggoy Estrada and Rudy Fernandez, which led to his representations regarding business prospects overseas.
The relationship between Castillo and Salvador deepened to the extent that Castillo later financed Salvador’s bid for a vice-mayoralty race in Mandaluyong and provided him with personal financial support.

Discussions were held about engaging in a remittance business, where Castillo became significantly involved by funding exploratory trips:

In March 2001, Castillo, her husband, Salvador, and a third party traveled to Hong Kong where Salvador’s popularity among Filipino domestic helpers was noted.
In April 2001, a subsequent trip to Bangkok further affirmed claims of Salvador’s influence among overseas Filipinos.

Castillo gave amounts such as US$10,000.00 for the Hong Kong trip and another US$10,000.00 for the Bangkok trip.
In August 2001, during a trip to Palau arranged to observe a remittance business led by Roy Singun, Castillo advanced US$20,000.00.

In December 2001, alongside her mother and Ramon Salvador, Castillo registered the “Phillip Salvador Freight and Remittance International Limited” in Hong Kong, securing the required business documents and renting an office space in Tsimshatsui, Kowloon.

It was agreed among the parties that any profits from the prospective business would be equally shared, with Salvador handling marketing in Hong Kong, Ramon managing operations in the Philippines, and Castillo financing the venture.
Notwithstanding the registration and initial arrangements, the business never became operational.
In May 2002, when Castillo had finally raised a total of US$100,000.00 specifically as capital for the business, she handed over the money to Salvador at her mother’s residence—a transaction witnessed by her disabled half-brother, Enrico Tan—but the money was never returned.
Castillo maintained that the US$100,000.00 was intended solely for the business’ operational expenses, yet Salvador later admitted the funds were used to settle other personal obligations.

Castillo’s testimonies revealed that she financed not only the business venture but also personal expenses for Salvador, including monthly allowances and contributions during his campaigns, based on her deep personal attachment and trust.
Respondent’s version conflicted with Castillo’s accounts, as he denied receiving certain amounts (for example, US$10,000.00 for travel expenses and US$20,000.00 for the Palau trip) while acknowledging some transactions like the P100,000.00 given for a separate transaction involving heart-shaped earrings.
There were inconsistencies regarding the source of the funds, the manner in which they were transferred (no receipts or proper documentation were produced), and the overall conduct of Castillo which, according to the Court of Appeals, was at odds with that of a person who had been defrauded.

At trial, the Regional Trial Court (RTC) found Salvador guilty of estafa and sentenced him accordingly.
Respondent appealed his conviction to the Court of Appeals, which reversed the RTC decision on February 11, 2010, acquitting him on the grounds that the prosecution failed to establish guilt beyond reasonable doubt.
Castillo then filed the present petition for review regarding the civil liability aspect, arguing that even though the criminal conviction was reversed, there still should have been an award for damages based on the evidence of misappropriation.

Whether the absence of a criminal conviction (acquittal based on reasonable doubt) precludes the imposition of civil liability on the respondent for the alleged misappropriation of US$100,000.00.
Whether the evidence adduced by Castillo establishes by a preponderance of evidence that the respondent received and misapplied the funds intended for the remittance business.
Whether the Court of Appeals erred in its findings regarding the absence of documentary evidence and the inconsistencies in Castillo’s testimony, particularly in light of the business-like nature of the transaction.
Whether the failure to obtain a receipt for the transaction undermines Castillo’s claim that the money was given for a business purpose rather than as a loan or gift.