G.R. No. 199907 - Capulong vs. People

Case Summary (G.R. No. 199907)

Factual Background

The Information alleged that on or about December 10, 1990, in Cabanatuan City, and within the court’s jurisdiction, Spouses Fernando Capulong and Anita M. Capulong committed estafa by having previously chattel mortgaged an Isuzu truck with Plate No. PLV-227 to De Guzman in the amount of P700,000.00. It charged that, through false representation and in conspiracy, the spouses induced De Guzman to lend back the Registration Certificate and the Official Receipt of payment of registration fees of the mortgaged truck, under the pretext that the documents would be used to apply for an additional loan and/or to show the truck to a prospective buyer. It further alleged that once in possession of the documents, the accused concealed or destroyed them, preventing De Guzman from registering the chattel mortgage with the Land Transportation Office (LTO). It added that the spouses replaced the truck’s engine with a different one, and that the concealment and replacement caused De Guzman damage in the amount of P700,000.00, as she could neither register nor foreclose the chattel mortgage due to discrepancies in the engine number indicated in the mortgage documents.

Trial Proceedings in the RTC

After arraignment where the spouses entered not guilty pleas, the case proceeded to trial. De Guzman testified as the lone prosecution witness. She stated that the loan of P700,000.00, carrying an agreed 3% monthly interest, was obtained by the accused on August 7, 1990, and would be due by June 7, 1991. She said that as security, the spouses executed a Chattel Mortgage with Power of Attorney over their ten-wheeler Isuzu cargo truck and delivered the original OR-CR to her. On December 10, 1990, she testified that Anita requested to borrow the OR-CR for one week, claiming it was to apply for an amendment of the registration certificate to increase the truck’s weight or load capacity and to show it to a buyer. De Guzman initially hesitated because the chattel mortgage was not yet registered, but later acceded. She delivered the OR-CR in Cabanatuan City, kept in a bank safety deposit box, and Anita issued a handwritten note as receipt.

De Guzman further testified that after the one-week period elapsed and despite repeated demands, Anita did not return the documents and countered that the loan had already been paid. Anita, however, admitted receiving the P700,000.00 and executing the chattel mortgage, including delivery of the OR-CR, and further admitted borrowing the OR-CR and issuing a handwritten receipt. She denied, in substance, that the documents were withheld, claiming instead that the documents were borrowed in De Guzman’s house in Talavera, Nueva Ecija; that the words “Cab. City” and “12/10/90” in the upper right corner of the receipt were not written by her; and that the OR-CR were returned a week later to De Guzman.

The RTC noted that due to repeated absence of defense counsel, Anita did not finish her testimony and was not cross-examined. It still proceeded with submission for decision based on the evidence on record.

RTC Judgment of Conviction

On August 1, 2003, the RTC convicted only Anita of estafa under Article 315, paragraph 3(c) of the Revised Penal Code and sentenced her under the Indeterminate Sentence Law, fixing prision correccional in its minimum range as the minimum term and reclusion temporal as the maximum term. The RTC also held the spouses jointly and severally liable to pay De Guzman P700,000.00, plus 12% interest per annum from the date of maturity until fully paid.

The RTC held that Anita’s defenses were mere denial and that her denial could not prevail over De Guzman’s positive assertions and the document bearing Anita’s own handwriting. It emphasized that Anita promised to return the OR-CR after one week yet failed to comply. It reasoned that concealment of the OR-CR caused positive injury because De Guzman could not register the chattel mortgage with the LTO and could not foreclose without evidence of ownership embodied in the documents. As to the “Cab. City” notation, the RTC noted that De Guzman admitted she wrote it and explained the reason. On the RTC’s view, injury was established regardless of any purported later effects.

Anita’s subsequent procedural motions in the RTC, including a motion for new trial on grounds of incompetence and negligence of her former counsel, were denied, and her motion based on Solidbank Check No. PA074896 dated September 8, 1992 in the amount of P700,000.00 was also denied as the RTC found it to be not newly discovered because it had been readily available.

Appeal and Ruling of the Court of Appeals

Anita appealed. On November 12, 2010, the Court of Appeals affirmed the conviction but modified the sentence by adjusting the indeterminate imprisonment term to four (4) years and two (2) months of prision correccional as minimum and twenty (20) years of reclusion temporal as maximum.

The CA explained that the documents contemplated in Article 315, paragraph 3(c) were not limited to those emanating from courts or government offices. Citing prior cases such as United States v. Tan Jenjua, United States v. Kilayko, and People v. Dizon, it held that the OR-CR fell within the purview of the penal provision. The CA further reasoned that the truck’s unavailability and the non-return of the documents supported the conclusion that Anita concealed them rather than returned them, and that she should have caused cancellation of the note or made an entry regarding the date of return if she truly returned the documents.

On due process, the CA rejected Anita’s claim. It found that despite counsel’s failures to object during a motion to strike testimonies granted on May 23, 2002, counsel had sought to lift an order and Anita was allowed to testify in a subsequent hearing. It observed that Anita’s counsel again failed to appear on March 21, 2003, after the trial court had warned that the case would be deemed submitted if both the accused and counsel failed to appear. It treated Anita’s asserted “newly discovered evidence” as insufficient, noting that Solidbank Check No. PA074896 existed long before the filing of the Information on February 28, 1995, and that belated payment did not extinguish criminal liability for estafa.

Anita’s motion for reconsideration was denied in the December 22, 2011 Resolution.

Issues Raised by Petitioner

In the Supreme Court, Anita pressed for either outright acquittal or, alternatively, remand for a new trial. She argued that the CA erred in (i) refusing to relax the Rule 45 limitation to questions of law; (ii) not acquitting her because the elements of estafa under Article 315, paragraph 3(c) were allegedly absent; (iii) not acquitting despite alleged payment of obligations; and (iv) not remanding for re-trial because she was allegedly deprived of her day in court.

Supreme Court’s Ruling on the Merits

The petition was denied. The Court reiterated that fraud and injury are the two essential elements in every estafa case. It restated the general elements of estafa and identified the relevant mode for the charge—Article 315, paragraph 3(c)—which criminalizes defrauding another through fraudulent means consisting of the removal, concealment, or destruction of “court record, office files, document or any other papers.”

The Court then addressed Anita’s contention that no competent proof established that she removed, concealed, or destroyed the documents contemplated by the penal provision, and that such documents must contain evidence of indebtedness. It held that neither Article 315, paragraph 3(c) nor its historical antecedent Article 535, paragraph 9 of the Spanish Penal Code required that the documents be evidence of indebtedness. It observed that the old provision broadly covered “any process, record, document, or any other paper of any character whatsoever,” while the modern provision refers to “documents or any other papers” without limiting them to instruments evidencing debts. It further held that even assuming the requirement existed, Anita could not be acquitted because the evidence of indebtedness did not rest solely on a promissory note. In a chattel mortgage of a vehicle, the Court held that the OR-CR should be treated as evidence of the indebtedness because they are integral parts of the chattel mortgage documents and indispensable for effective foreclosure.

The Court explained the practical effect of non-return of OR-CR in a chattel mortgage context. It stated that if the mortgagor defaults, the mortgaged property is sold at public auction to satisfy the obligation. However, the encumbrance must be annotated with the chattel mortgage registries, including the LTO and the Register of Deeds. The LTO procedure requires, among other things, presentation of original copies of the certificate of registration and the latest receipt of payment of required charges, and even physical inspection of the vehicle by the district office. The Court reasoned that a businesswoman such as Anita was expected to know these procedures. The Court held that the record showed the OR-CR were never returned by Anita. It discounted Anita’s self-serving testimony because it was not corroborated by other testimonial or documentary evidence and was further impaired by her failure to undergo cross-examination due to counsel’s repeated absence. It also found implausible the claim that De Guzman would incur the expense and inconvenience of litigating a prosecution spanning more than twenty years if her complaint was fabricated.

On intent to defraud, the Court held that fraudulent intent is ordinarily proven through conduct and circumstances, and may be inferred from facts. It found that Anita’s failure to comply with her promise to return the original OR-CR, her misrepresentation that she had already delivered the documents, and the replacement of the truck’s engine without De Guzman’s knowledge, together with the unknown whereabouts of the vehicle, established intent

Case Syllabus (G.R. No. 199907)

The petition sought review on certiorari under Rule 45 to annul the Court of Appeals (CA) Decision dated November 12, 2010 and Resolution dated December 22, 2011 affirming the conviction of Anita Capulong for estafa.
The CA had affirmed with modification the Regional Trial Court (RTC) Decision dated August 1, 2003 convicting the appellant under Article 315, par. 3(c) of the Revised Penal Code (RPC), and modified the indeterminate sentence.
The RTC additionally ordered the Spouses Capulong to pay Francisca P. de Guzman PHP 700,000.00, plus 12% interest per annum, but the Supreme Court later deleted this civil liability portion.

Parties and Procedural Posture

The appellant was Anita Capulong, convicted of estafa for concealing loan-related documents.
The respondent was the People of the Philippines, represented in the criminal prosecution through the relevant appellate review.
The information was filed against the appellant together with her husband, Fernando Capulong, as co-accused Spouses Capulong.
The RTC convicted only Anita on August 1, 2003, while Fernando was not convicted in the RTC judgment as reflected in the CA and Supreme Court discussion.
The appellant’s conviction was affirmed with modification by the CA in CA-G.R. CR No. 28713 on November 12, 2010.
The appellant’s motion for reconsideration before the CA was denied in the Resolution dated December 22, 2011.
The appellant then filed the Rule 45 petition before the Supreme Court, raising issues on evidence, criminal elements, and alleged deprivation of day in court.

Key Factual Allegations

The Information alleged that on or about December 10, 1990, in Cabanatuan City, the accused Spouses Capulong induced Francisca P. de Guzman to lend PHP 700,000.00 through false representations.
The accused allegedly induced De Guzman to release the Registration Certificate and the Official Receipt of payment of registration fees for their chattel mortgaged Isuzu truck as part of a scheme to enable an increased loan and/or prospective sale.
The information further alleged that after obtaining possession of the documents, the accused concealed or destroyed the registration certificate and official receipt, preventing De Guzman from registering the chattel mortgage with the Land Transportation Office (LTO).
The information also alleged that the truck’s motor was later replaced with a different one, which allegedly rendered the chattel mortgage ineffective for foreclosure purposes because of the mismatch of motor numbers.
The prosecution relied primarily on De Guzman as the lone witness.
De Guzman testified that she initially loaned money on the basis of a written arrangement with 3% monthly interest, securing the transaction with a chattel mortgage and delivery of OR-CR.
De Guzman further testified that on December 10, 1990, Anita borrowed the OR-CR for about a week, claiming she would amend the certificate of registration and show the documents to a prospective buyer.
De Guzman testified that despite expiration and repeated demands, the documents were not returned, and that Anita countered that the loan had been paid.
The appellant admitted receipt of the loaned amount, execution of a chattel mortgage, delivery of OR-CR, and issuance of a handwritten receipt for the loaned documents.
The appellant claimed that the OR-CR were borrowed in De Guzman’s residence and returned after a week, and she asserted that certain entries on the receipt were not written by her.
The defense did not finish the appellant’s testimony and did not have it cross-examined due to repeated absence of counsel, and the case was decided on the evidence on record.

RTC Proceedings and Trial Outcomes

The RTC held that the appellant’s defense amounted to a mere denial and found it insufficient against the complainant’s positive assertion.
The RTC considered it significant that the receipt for the borrowed documents was in the appellant’s own handwriting.
The RTC found that the appellant promised to return the documents after one week and then failed to comply, concluding that the appellant had concealed the documents after receiving them.
The RTC ruled that concealment caused positive injury because De Guzman could not register the chattel mortgage with the LTO and could not foreclose without the documents necessary to establish ownership and enable proper registration/annotations.
The RTC reasoned that without the OR-CR, the chattel mortgage could not be effectively enforced for foreclosure.
The RTC also treated the unresolved status of the documents and truck motor concealment as supporting proof of the elements of the offense.
The RTC applied the Indeterminate Sentence Law and initially sentenced the appellant to imprisonment based on prision mayor minimum to an upper range, consistent with the penalty structure it adopted under the conviction.
The RTC ordered the Spouses Capulong to pay De Guzman jointly and severally PHP 700,000.00 plus 12% interest from maturity until fully paid.
The appellant sought a new trial based on alleged incompetence and negligence of former counsel, which the RTC denied.
The appellant also claimed newly discovered evidence in the form of Solidbank Check No. PA074896 dated September 8, 1992 for PHP 700,000.00, which the RTC rejected as a check that was “forgotten” rather than “newly discovered.”
The RTC proceeded to render judgment, after the CA later modified the sentence.

CA Ruling and Modifications

The CA affirmed the conviction for estafa under Article 315, par. 3(c) of the RPC and modified the sentence.
The CA held that the OR-CR fell within the “court record, office files, document or any other papers” contemplated by Article 315, par. 3(c), relying on United States v. Tan Jenjua, United States v. Kilayko, and People v. Dizon.
The CA viewed the absence of the motor vehicle and the failure to return the documents as evidence of concealment and fraudulent design.
The CA reasoned that if the appellant truly returned the documents, she should have caused cancellation of the note or made an entry of the return date.
The CA found no deprivation of due process, noting that counsel’s procedural failures did not negate notice and opportunity: a petition to lift an order was granted, and the appellant was allowed to testify.
The CA found that the appellant’s counsel failed to appear at key hearings despite warnings, and that the case was deemed submitted when the appellant and counsel did not appear.
The CA held that the Solidbank check was not newly discovered because it existed before the filing of the information dated February 28, 1995.
The CA further stated that even if the check qualified as newly discovered evidence, reimbursement or belated payment would not extinguish criminal liability for estafa.
The CA modified the penalty to an indeterminate term of four (4) years and two (2) months of prision correccional as minimum, to twenty (20) years of reclusion temporal as maximum.

Issues Raised by Appellant

The appellant argued for relaxation of the restriction of raising only questions of law under Rule 45, citing alleged grave reversible error and abuse of disc