G.R. No. 170618 - Far Eastern Surety and Insurance Co., Inc. vs. People

Case Summary (G.R. No. 170618)

Charge and Information

Petitioner filed a letter-complaint alleging syndicated estafa (Art. 315, No. 2(a), RPC, in relation to P.D. No. 1689) and related offenses, docketed I.S. No. 01-10686. The Information charged the private respondents with estafa by representing that they operated legitimate foreign exchange trading businesses (named entities) and induced petitioner and others to turn over at least US$123,461.14 (or peso equivalent). The accusatory portion alleged the acts were committed “in a syndicated manner consisting of five (5) or more persons,” and asserted the misappropriation involved funds solicited from the public.

Preliminary Proceedings and Probable Cause Determination

On October 10, 2001, the Assistant City Prosecutor found probable cause for syndicated estafa and recommended that the offense be non-bailable; the City Prosecutor approved this finding. An Information was filed the same day and raffled to Branch 96. On November 7, 2001, Judge Bersamin issued an order finding probable cause and approved the non-bailable recommendation, prompting issuance of arrest warrants. Returns indicated that all accused except Tafalla were detained at Makati City Jail.

Arraignment and Motion for Bail

At arraignment on November 20, 2001 the private respondents pleaded not guilty and filed an urgent motion to fix bail. The prosecution filed a comment/opposition (via the private prosecutor with conformity of an Assistant City Prosecutor). Judge Bersamin subsequently reconsidered his earlier ruling concerning bailability.

Judge Bersamin’s December 18, 2001 Order — Legal Reasoning on Syndicate and Bailability

Judge Bersamin reversed his prior non-bailable finding and held the offense to be bailable. He reasoned that P.D. No. 1689 imposes the death penalty or life imprisonment only where the estafa is committed by a “syndicate consisting of five or more persons,” and the Information charged only four persons. The allegation that the acts were committed “in a syndicated manner consisting of five (5) or more persons” could not alter the juridical character of the offense when the Information in its first paragraph accused only four persons. Relying on statutory construction principles, the judge found no syndicate as defined in P.D. No. 1689; accordingly the higher penalty (life to death) could not be imposed. He further analyzed the applicable statutory penalty under the second paragraph of Section 1 of P.D. No. 1689 and Rule 110 (2000 Rules of Criminal Procedure), concluding that because the Information did not specifically allege qualifying or aggravating circumstances, those circumstances could not be considered to elevate the penalty to its maximum (reclusion perpetua). Thus, the medium period of reclusion temporal (16 years and 1 day to 20 years) would govern if convicted, which rendered the offense bailable as a matter of right. Judge Bersamin fixed bail at P150,000.00 each for provisional liberty.

Filing of Bail with Executive Judge Zenarosa and Release

Private respondents posted surety bonds on December 21, 2001 with Executive Judge Monina A. Zenarosa, who approved the bonds and ordered their immediate release unless lawfully held for other causes. Petitioner subsequently sought relief from the Court of Appeals, and a temporary restraining order was issued by a Justice on duty; unknown to petitioner, respondents had already posted bail and been ordered released.

Court of Appeals Proceedings and Decision

Petitioner filed a petition for certiorari in the Court of Appeals (CA), challenging Judge Bersamin’s December 18, 2001 order allowing bail and Judge Zenarosa’s December 21, 2001 approval of the surety bond and respondents’ release. The CA, after considering petitioner’s supplemental petition and arguments regarding the jurisdiction of Judge Zenarosa, found no grave abuse of discretion by either trial judge and denied petitioner’s petition, dismissing it.

Issues Raised to the Supreme Court

Petitioner presented three principal issues: (A) whether the CA’s affirmation that at least five persons must be charged for P.D. No. 1689’s enhanced penalties conflicts with law and Supreme Court precedent; (B) whether the grant of bail violated Section 7, Rule 114 (now Rule 114 as amended) and departed from accepted procedure in determining bailability; and (C) whether the approval of the bail by Judge Zenarosa violated Section 17, Rule 114 (on where bail may be filed) and thus was improper.

Supreme Court’s Analysis — Syndicate Requirement under P.D. No. 1689

The Supreme Court agreed with the CA and Judge Bersamin that P.D. No. 1689’s text and definition control: the enhanced penalty of life imprisonment to death attaches only where the estafa is “committed by a syndicate consisting of five or more persons formed with the intention of carrying out the unlawful … scheme.” The Court rejected petitioner’s argument that “any person” could be read to permit conviction of a single accused for syndicated estafa, emphasizing the need to read the statute as a whole and that definitions provided in the same section are controlling. The Court found the Information’s mere allegation of syndication to be insufficient when the accusatory paragraph specifically named only four persons; therefore the crime as charged could not be characterized as the syndicate form penalized by the higher gravity.

Supreme Court’s Analysis — Bailability under the 1987 Constitution and Rules

Applying Section 13, Article III of the 1987 Constitution (bail except for persons charged with offenses punishable by reclusion perpetua when evidence of guilt is strong) and the amended Rules of Criminal Procedure (Rule 110, secs. 8–9; Rule 114, sec. 4), the Court held that because the Information failed to allege qualifying or aggravating circumstances expressly and specifically, the State could not later invoke them to increase the penalty to reclusion perpetua. Under the second paragraph of Section 1, P.D. No. 1689, absent syndicate status and absent aggravated factors asserted in the Information, the penalty range applicable would be reclusion temporal to reclusion perpetua; but because aggravating circumstances were not alleged, the presumptive applicable penalty was within the medium period

Case Syllabus (G.R. No. 170618)

Nature of the Case and Relief Sought

Petition for review on certiorari filed by Regino Sy Catiis seeking nullification of the Court of Appeals Decision dated June 14, 2002.
Relief sought: annulment of the CA Decision which sustained (a) the RTC, Branch 96, Quezon City Order dated December 18, 2001 allowing private respondents to post bail and (b) the Executive Judge’s Order dated December 21, 2001 approving the surety bond and effecting the release of private respondents.
Petition challenges both the trial court’s determination of bailability and the Executive Judge’s approval of surety bonds and release.

Parties and Caption (as extracted from source)

Petitioner: Regino Sy Catiis.
Respondents: Court of Appeals (17th Division); private respondents Reynaldo A. Patacsil, Enrico D. Lopez, Luzviminda A. Portuguez; and the Bureau of Jail Management and Penology, National Capital Region, Makati City Jail, through its Officer-in-Charge Warden, Chief Insp. Isagani M. Gamino.
Docket references: Supreme Court G.R. No. 153979; Court of Appeals docketed as CA G.R. SP No. 68287; RTC Criminal Case No. Q-01-105430.

Factual Background — Complaint, Investigation and Information

Petitioner filed a letter-complaint dated May 28, 2001 with the Office of the City Prosecutor of Quezon City against Reynaldo A. Patacsil, Enrico D. Lopez, Luzviminda A. Portuguez and Margielyn Tafalla.
Complaint docketed as I.S. No. 01-10686 for violation of Article 315, No. 2(a) of the Revised Penal Code in relation to Presidential Decree No. 1689 (syndicated estafa) and related offenses.
Private respondents (except Tafalla) filed joint counter-affidavits denying the charges.
On October 10, 2001, Assistant City Prosecutor Alessandro D. Jurado issued a Resolution finding probable cause for syndicated estafa against the four named respondents and Tafalla, with a recommendation of no bail. The Resolution was approved by City Prosecutor Claro A. Arellano.
An Information was filed October 10, 2001 before the Regional Trial Court of Quezon City, raffled to Branch 96. The Information alleged, among other things:
- Time and place: “on or about the 3rd week of January 2000 or subsequent thereto in Quezon City.”
- Mode: conspiracy and confederation “in a syndicated manner consisting of five (5) or more persons through corporations registered with the Securities and Exchange Commission (SEC) and/or unregistered foreign entities.”
- Alleged corporate and entity names: Asia Profits Philippines, Incorporation; Winggold Management Philippines Incorporated; Belkin Management Consultancy, Inc.; and/or Belkin Profits Limited or other unregistered foreign entities.
- Alleged fraud: induced complainant and others to deliver at least US$ 123,461.14 or its peso equivalent by fraudulent representations of legitimate foreign exchange trading.
- Alleged knowledge by accused that said corporations/unregistered entities were not licensed or authorized to engage in foreign exchange trading and that representations were false, resulting in damage and prejudice to complainant and others.

Procedural Chronology in the Trial Court

November 7, 2001: Judge Lucas P. Bersamin issued Order finding probable cause against all accused and approved the City Prosecutor’s recommendation that the charge be non-bailable; warrants of arrest issued.
Return on the arrest warrant by PO3 Joselito M. Coronel indicated that, except for Tafalla who remained at large, the accused were detained at Makati City Jail.
November 12, 2001: Notice of hearing setting arraignment for November 20, 2001; private respondents filed an urgent motion to fix bail.
November 20, 2001: At arraignment private respondents entered pleas of not guilty. The prosecution filed comment/opposition to the motion to fix bail through the Private Prosecutor with the conformity of Assistant City Prosecutor Arthur O. Malabaguio.
December 18, 2001: Judge Bersamin issued an Order reconsidering his November 7, 2001 Order and declared the offense bailable; fixed bail at P150,000.00 each for provisional liberty of private respondents.

Trial Court’s Reasoning for Allowing Bail (Judge Bersamin’s Disquisitions)

To impose life imprisonment to death under Sec. 1, P.D. No. 1689, the estafa must be committed by a syndicate as defined by the law: “consisting of five or more persons.”
The Information charged only four persons; therefore, the crime charged could not be considered as committed by a syndicate within the meaning of P.D. No. 1689.
The allegation in the Information that the accused conspired “in a syndicated manner consisting of five (5) or more persons” cannot alter the juridical nature of the offense if the Government chose to indict only four persons.
The trial court rejected the prosecution’s reliance on People v. Romero as misleading in the specific context.
When not committed by a syndicate, under the second paragraph of Sec. 1, P.D. No. 1689 the penalty is reclusion temporal to reclusion perpetua if the fraud exceeds P100,000.00.
Under Rule 110 (2000 Rules of Criminal Procedure), the Information must aver qualifying and aggravating circumstances in ordinary and concise language. The Information in this case did not allege aggravating circumstances, precluding proof and imposition of the maximum penalty of reclusion perpetua.
In absence of aggravating circumstances, the medium period of reclusion temporal (16 years and 1 day to 20 years) would be the relevant penalty, which makes the offense bailable.
Based on the foregoing, Judge Bersamin found the offense bailable and set bail at P150,000.00 each.

Actions Taken by Private Respondents and Interim Court Intervention

Unknown to petitioner, private respondents posted surety bonds on December 21, 2001 with Executive Judge Monina A. Zenarosa.
Executive Judge Zenarosa approved the surety bonds on December 21, 2001 and ordered the immediate release of private respondents “unless held for other lawful cause.”
December 26, 2001: Petitioner filed a petition for certiorari with prayer for temporary restraining order (TRO) and/or writ of preliminary injunction before the Court of Appeals, docketed as CA G.R. SP No. 68287, assailing Judge Bersamin’s Order.
On the same day (December 26, 2001), Associate Justice Romeo J. Callejo Sr., Justice on Duty per Office