G.R. No. 156081 - Santos vs. Go

Case Digest (G.R. No. 156081)
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Facts:

Parties and Background

Petitioners: Ferdinand T. Santos, Robert John SobrepeAa, and Rafael P. Perez de Tagle, Jr.—corporate directors and officers of Fil-Estate Properties, Inc. (FEPI).
Respondent: Wilson Go, a client who entered into a Contract to Sell with FEPI.
FEPI’s Role: FEPI entered into a Project Agreement with Manila Southcoast Development Corporation (MSDC) to develop several parcels of land in Nasugbu, Batangas into a first‐class residential, commercial, resort, leisure, and recreational complex. Under the Agreement, FEPI was empowered to market and sell subdivision lots to the public.

Transaction and Contractual Terms

Subject Property: Lot 17, Block 38, measuring approximately 1,079 square meters.
Purchase Price: P4,304,000 with specific payment terms—downpayment of P1,291,200 and a final installment of P840,000 due on April 7, 1997.
Contract to Sell: A standard printed form (a contract of adhesion) prepared by FEPI that stipulated FEPI would execute a final Deed of Sale and deliver the owner’s duplicate copy of the Transfer Certificate of Title (TCT) upon full payment.

Performance and Dispute

Respondent’s Compliance: Wilson Go fully complied with the payment obligations under the contract.
FEPI’s Nonperformance:

FEPI failed to develop the property as promised.
FEPI did not release the TCT to Wilson Go upon complete payment.

FEPI’s Explanation:

The project was temporarily halted due to claims by certain claimants opposing FEPI’s application to exclude the subject properties from the Comprehensive Agrarian Reform Law (CARL).
A cease and desist order from the Department of Agrarian Reform (DAR) further impeded the project's progress.
FEPI assured clients that development would resume once disputes were settled, though these assurances did not satisfy Go.

Initiation of Legal Remedies

Wilson Go’s Actions:

Filed a complaint before the Housing and Land Use Regulatory Board (HLURB) for nonperformance and refund of his payment.
Filed a separate Complaint-Affidavit for estafa under Articles 316 and 318 of the Revised Penal Code with the Office of the City Prosecutor of Pasig City.

Allegations in the Complaint for Estafa:

The Contract to Sell purportedly described FEPI as the owner of the property even though FEPI was acting as a developer with a joint venture arrangement with MSDC.
FEPI misrepresented its ownership status by continuing to treat itself as the owner after receiving full payment, thereby misleading the buyer.

Preliminary Investigation and Subsequent Proceedings

City Prosecutor’s Action:

Initially dismissed the complaint for estafa for insufficiency of evidence based on several findings:

The Contract to Sell did not explicitly state that FEPI was the owner.

ii. No final Deed of Sale had been executed; under the contract and Section 25 of Presidential Decree No. 957, delivery of the TCT was contingent upon full execution of a contract of sale. iii. Jurisdictional issues were raised since disputes involving commercial subdivisions were under the exclusive jurisdiction of the HLURB.

Appeal by Wilson Go:

Go appealed to the Department of Justice (DOJ), which reversed the City Prosecutor’s dismissal by finding probable cause under Article 316(1) of the Revised Penal Code.
The DOJ held that FEPI, by taking payment and performing acts of ownership (e.g., conveying the property), misrepresented its authority despite not being the actual owner.

Petition for Review by Petitioners:

Petitioners filed a petition for review in the Court of Appeals (CA-G.R. SP No. 67388) challenging:

The applicability of Rule 43 of the 1997 Rules of Civil Procedure as a mode of appeal from a resolution of the Secretary of Justice.

ii. The DOJ’s finding of probable cause to indict them for estafa.

The Court of Appeals dismissed the petition for review, holding that Rule 43 did not apply to the Secretary of Justice’s resolution.

Grounds Raised by Petitioners

Rule 43 Issue: Arguing that Rule 43 should cover rulings of the Secretary of Justice and that the public prosecutor’s functions in a preliminary investigation are quasi-judicial in nature.
Substantive Arguments on Estafa:

Petitioners contended that FEPI did not misrepresent its ownership status since it never claimed to be the title owner during the sale; it was acting solely as the developer.
They argued that the absence of deceit, lack of personal acts constituting estafa, and the mere exercise of complying with a DAR cease and desist order could not sustain a finding of estafa.

Relief Sought: Petitioners sought the reversal of both the DOJ’s probable cause finding and the dismissal of their petition for review by the Court of Appeals.

Issues:

Whether a petition for review under Rule 43 of the 1997 Rules of Civil Procedure is a proper mode of appeal from a resolution of the Secretary of Justice directing the filing of an information for estafa.
Whether the conduct and functions performed by the public prosecutor during a preliminary investigation, and the subsequent review by the DOJ, qualify as quasi-judicial activities subject to Rule 43’s appeal mechanism.
Whether the substantive allegations of misrepresentation and estafa against the petitioners can be sustained given the nature of the contractual relationship and the parties’ conduct.

Ruling:

(Subscriber-Only)

Ratio:

(Subscriber-Only)

Doctrine:

(Subscriber-Only)

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