Case Digest (G.R. No. L-3825)
Facts:
Petitioner Apolinar E. Velasco, as President of Federal Films, Inc., entered into a lease with Eugenio Vitan for a 20-year term in Cavite, and later leased Vitan’s Cine Palace to the corporation. On August 8, 1946, Velasco entered into a lease in Manila with the offended party for Cine National, representing that Federal Films, Inc. was the owner of Cine Palace and mortgaging it to secure payment of monthly rent; after taking possession, Velasco paid the initial amount but failed to pay the balance, and when the offended party discovered the property was actually owned by Vitan, he desisted from foreclosure and closed the theater on November 3, 1946, filing a complaint that led to Velasco’s conviction for estafa by the trial court and affirmance by the Court of Appeals.
Velasco challenged the conviction, arguing that no damage was caused or that any damage resulted from the offended party’s negligence, and further contended that the alleged fraudulent representation did not involve the required deceit and did not actually deceive the offended party because the lease would have been entered into even without the representation.
Issues:
- Whether the Court of Appeals erred in convicting petitioner of estafa despite the alleged absence of damage.
- Whether petitioner’s acts constituted the deceit required for estafa.
- Whether the alleged fraudulent representation actually deceived the offended party given that the offended party would allegedly have entered into the lease even without it.
Ruling:
The petition was denied and the Court of Appeals decision was affirmed. The Court held that Velasco mortgaged a property that was not his and therefore the mortgage could not be foreclosed, which established deceit and a violation of Article 816, paragraph 1, of the Revised Penal Code, and that damage resulted because the offended party could not realize anything from the mortgage to satisfy the unpaid rental.
The Court also rejected Velasco’s theory that foreclosure could have been made against Vitan, noting that the Court of Appeals findings did not support that point and that Vitan’s testimony showed at most a conditional non-objection, which did not make him a mortgagor.
Ratio:
For estafa, deceit is shown where petitioner misrepresented ownership by mortgaging property that did not belong to Federal Films, Inc., and the mortgage’s inability to be foreclosed negated any effective security for the unpaid rentals. The Court further reasoned that the mortgaged property covered the unpaid rental amount, so the offended party suffered damage when he could not obtain value from the mortgage.
As to Vitan, the Court ruled that the record did not establish the factual basis for treating Vitan as a mortgagor, and Vitan’s conditional statement did not amount to consent that would transform him into one. Thus, Velasco’s legal defenses failed.
Doctrine:
- The Supreme Court reviews only questions of law in petitions assailing Court of Appeals judgments, as to facts found by the appellate court.
- Mortgaging property not belonging to the mortgagor constitutes deceit and violates Article 816, paragraph 1, of the Revised Penal Code.
- Damage in estafa exists where the offended party cannot realize value from the mortgaged property to satisfy the unpaid obligation.
- A conditional non-objection by the true owner, without more, does not make that owner a mortgagor for purposes of foreclosure and criminal exculpation.