G.R. No. 189081 - Dy vs. People

Case Summary (G.R. No. 189081)

Petitioner

Gloria S. Dy

Respondents

People of the Philippines (prosecution)
Mandy Commodities Co., Inc., represented by William Mandy (private complainant)

Key Dates

• May 1996 – Proposal and negotiation of P20 million loan from ICBC
• May 18, 1999–April 4, 2000 – Issuance of 25 bank checks totaling ₱21,706,281.00
• February 1999 – Notice of foreclosure by ICBC
• October 7, 2002 – Filing of estafa complaint before Manila City Prosecutor
• March 3, 2004 – Information for estafa filed in RTC Manila
• November 11, 2005 – RTC acquits petitioner of estafa but orders civil liability
• February 25, 2009 – CA affirms civil liability despite acquittal
• August 10, 2016 – Supreme Court decision

Applicable Law

• 1987 Philippine Constitution (due process, right to property)
• Revised Penal Code (RPC) Art. 315 (estafa), Art. 100 (civil liability ex delicto), Art. 104 (scope of civil liability)
• Civil Code Arts. 29–30 (civil action after acquittal), Art. 1150 (prescription)
• Rules of Court Rules 111 (fusion of civil and criminal), 113 (suspension and consolidation), 120 (effect of acquittal on civil liability)

Facts

Petitioner facilitated MCCI’s purchase of Pantranco property by securing a P20 million ICBC loan, evidenced by promissory note and chattel mortgage over leased warehouses.
Following MCCI’s default, ICBC initiated foreclosure in February 1999. Mandy handed petitioner 25 blank, “payable to cash” checks totaling ₱21.7 million, instructing her to apply them to the loan.
Petitioner contends she cashed the checks and returned the proceeds to Mandy, who later discovered none were remitted to ICBC.
An estafa complaint was filed; the RTC acquitted petitioner for failure to prove misappropriation or conversion but nonetheless ordered her civilly liable for the check amounts. The CA affirmed this civil award.

Issue

Whether an accused acquitted of estafa for lack of proof beyond reasonable doubt may still be held civilly liable ex delicto in the same criminal proceeding when the underlying obligation proved to be contractual.

RTC and CA Rulings

• RTC Manila (Nov. 11, 2005): Acquitted petitioner of estafa, noting no evidence of deceit or conversion; deemed the transaction a loan and nonetheless imposed civil liability of ₱21.7 million.
• CA (Feb. 25, 2009): Held that acquittal on reasonable doubt does not extinguish civil liability ex delicto; affirmed civil liability based on preponderance of evidence.

Supreme Court Ruling

The petition under Rule 45 is granted. The CA decision is reversed. Civil liability ex delicto may only arise from acts constituting a crime; where no estafa exists and the obligation is contractual, civil liability ex contractu must be pursued in a separate civil action.

Legal Analysis

Distinction of Liabilities: Criminal liability punishes breach of state law (proof beyond reasonable doubt); civil liability remedies private injury (preponderance of evidence).
Civil Liability Ex Delicto: RPC Art. 100 and Civil Code Art. 29 allow civil recovery for the same delict, but only if the criminal act is established or acquittal is on reasonable doubt without a finding that the act did not occur.
Limits of Fusion: Rules 111, 113 and 120 fuse actions only for civil liability ex delicto. Obligations arising from contracts (ex contractu) are not included and require independent civil actions.
Jurisprudence: Early cases (Pantig, Singson) re

Case Syllabus (G.R. No. 189081)

Procedural Posture

Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking reversal of the Court of Appeals decision dated February 25, 2009.
The CA affirmed the Regional Trial Court, Manila Branch 33’s November 11, 2005 decision acquitting petitioner Gloria S. Dy of estafa but holding her civilly liable in the amount of ₱21,706,281.00.
The RTC had merged the civil claim for damages with the criminal case and, despite acquittal, ordered civil liability ex delicto for failure to prove guilt beyond reasonable doubt.
Petition raises the question whether civil liability can survive an acquittal for lack of criminal elements when the underlying obligation is contractual (ex contractu).

Facts of the Case

Gloria S. Dy was General Manager of Mandy Commodities Co., Inc. (MCCI) and facilitated its business transactions.
In May 1996, petitioner proposed purchase of a Pantranco property and arranged a ₱20,000,000.00 loan from International China Bank of Commerce (ICBC), secured by a chattel mortgage on MCCI’s warehouse at Numancia Property.
MCCI defaulted; ICBC issued notice of foreclosure in February 1999.
To avert foreclosure, William Mandy instructed petitioner to handle loan payment; MCCI issued 13 Allied Bank and 12 Asia Trust Bank checks payable to “cash” totalling ₱21,706,281.00, which Mandy delivered to petitioner.
Petitioner testified she encashed the checks and returned proceeds to Mandy; Mandy claimed the checks were to be paid directly to ICBC.
ICBC foreclosed the mortgaged property; upon discovery that no payment was made, MCCI filed an Estafa Complaint‐Affidavit on October 7, 2002.
An Information was filed on March 3, 2004; after trial, the RTC acquitted petitioner for failure to prove intent to misappropriate or convert funds, finding instead an oral loan agreement.
Despite acquittal, the RTC ordered civil liability for ₱21,706,281.00; the CA denied petitioner’s appeal of the civil component and her motion for reconsideration.

Issues

Whether civil liability ex delicto can be awarded in a crimina