Case Summary (G.R. No. 165003)
Petitioner
Ma. Gracia Hao and Danny Hao, charged with syndicated estafa under Article 315(2)(a) of the Revised Penal Code, as amended, in relation to PD 1689.
Respondent
The People of the Philippines.
Key Dates
• July 11, 2003 – Original criminal complaint filed.
• July 17, 2003 – Supplemental affidavit adding co-accused.
• February 26, 2004 & July 26, 2004 – RTC orders denying motions to defer arraignment and lift arrest warrants.
• February 28, 2006 & June 13, 2008 – CA decision and resolution affirming the RTC.
• September 17, 2014 – Supreme Court decision date (1987 Constitution applies).
Applicable Law
• 1987 Constitution, Art. III, Sec. 2 (probable-cause requirement).
• Revised Rules of Criminal Procedure: Rule 112 § 5 (warrant issuance), Rule 116 § 11(c) (arraignment suspension), Rule 110 § 14 (amendment of information).
• Revised Penal Code Art. 315(2)(a) (estafa by means of deceit).
• PD 1689 (syndicated estafa).
• Rule 45 (petition for review on certiorari), Rule 65 (certiorari).
Factual Background
Manuel Dy entrusted approximately ₱10 million—later increased to nearly ₱100 million—to State Resources upon the advice of Victor Ngo and assurances by Ma. Gracia Hao of high returns. State Resources issued checks totalling over ₱114 million, all dishonored on deposit. Dy discovered that petitioners diverted funds into Danny Hao’s construction and realty business. After Ngo became unavailable, Dy filed a complaint for syndicated estafa, naming petitioners and others. The RTC issued arrest warrants and denied petitioners’ motions to defer arraignment and lift warrants; the CA affirmed.
Court of Appeals Ruling
The CA held that:
- The trial judge personally evaluated the prosecutor’s resolution and evidence, satisfying Rule 112 § 5.
- Probable cause for simple estafa existed even if not for syndicated estafa, because there was no showing that State Resources defrauded the general public or solicited funds beyond Dy.
- No grave abuse of discretion attended the issuance of warrants.
Petitioners’ Contentions
• Affidavit inconsistencies and delays in Dy’s complaint undermine probable cause.
• State Resources was dissolved in 1995, negating its existence during the alleged fraud.
• Distinction between simple and syndicated estafa renders the warrants void.
• Their pending DOJ petition should indefinitely suspend arraignment.
Supreme Court Ruling
Procedural Consideration
Review under Rule 45 focuses on whether the CA correctly determined the absence of grave abuse of discretion by the RTC in denying motions to defer arraignment and lift warrants.
Judicial Determination of Probable Cause
Under the Constitution and Rule 112 § 5, the judge must personally assess the prosecutor’s findings. Judge Marquez conducted such review, and petitioners failed to present contrary evidence. Probable cause need only show the likelihood—not proof—of guilt.
Elements of Estafa by Deceit
Article 315(2)(a) requires:
- False pretenses or fraudulent acts;
- Execution of the deceit prior to or simultaneous with the fraud;
- Victim’s reliance causing him to part with money;
- Resulting damage.
Dy’s allegations satisfy these elements: petitioners misrepresented State Resources’ existence and prospects, secured investments, issued checks that bounced, and diverted funds into an unrelated business.
Syndicated Estafa Analysis
PD 1689 syndication elements:
- Estafa under Art. 315 RPC;
- Commission by fiv
Case Syllabus (G.R. No. 165003)
Factual Antecedents
- In July 2003, Manuel Dy y Awiten (“Dy”) filed a criminal complaint for syndicated estafa under Article 315(2)(a) of the Revised Penal Code, as amended by PD 1689, against Ma. Gracia Hao, Danny Hao, and Victor Ngo.
- Dy, a long‐time client of Asiatrust Bank, relied on Ngo’s advice and Gracia’s representations to invest initially ₱10 million in State Resources Development Corporation (“State Resources”), purportedly promising higher returns.
- Encouraged by early gains, Dy increased his investments to nearly ₱100 million through multiple checks; in turn, Gracia issued checks totalling ₱114,286,086.14 to represent purported earnings.
- All Gracia’s checks were dishonored upon deposit. Dy then learned that his funds had been diverted to Danny Hao’s construction and realty business and that State Resources had been dissolved as early as August 1995.
- Dy filed a supplemental affidavit on July 17, 2003, adding six incorporators and/or directors of State Resources as co‐accused.
Procedural History
- The public prosecutor filed Information for syndicated estafa (Criminal Case No. 03-219952) in RTC Manila, Branch 40; Judge Marquez issued warrants of arrest against the petitioners and co‐accused.
- Petitioners moved to defer arraignment and lift warrants for lack of probable cause and pending DOJ review; RTC denied both motions in orders dated February 26 and July 26, 2004.
- Petitioners sought certiorari relief before the Court of Appeals (CA-G.R. SP No. 86289); on February 28, 2006 (decision) and June 13, 2008 (resolution), the CA affirmed the RTC, finding no grave abuse of discretion and concluding only simple estafa was supported by probable cause.
- Petitioners filed a petition for review on certiorari under Rule 45 before the Supreme Court.
Issues Presented
- Did the Court of Appeals correctly find that the RTC did not commit grave abuse of discretion in denying the motions to defer arraignment and to lift warrants of arrest?
- Was there probable cause for the issuance of warrants for estafa, and if so, was the charge properly characterized as syndicated or simple estafa?
- Were the arraignm