G.R. No. 146770 - Naya vs. Spouses Abing

Case Summary (G.R. No. 146770)

Factual Background

Under the Contract to Sell, petitioner agreed that the spouses Abing would pay a P 20,000.00 downpayment and the balance of P 40,000.00 in monthly installments of P 1,015.74 starting on June 30, 1988 and on the thirtieth of each subsequent month. Petitioner further undertook that after full payment of the purchase price, he would execute a final Deed of Sale and deliver title in the spouses’ names free from encumbrances and liens. The contract also allowed petitioner to sell the lots to other persons if the buyers failed to pay installments within sixty days from the due date.

The spouses Abing paid the downpayment of P 20,000.00 and remitted monthly payments, sometimes in amounts exceeding the contractual monthly installment. Petitioner and his agent, Loreta Bacaltos, received these payments, and the record showed receipts covering payments from June 25, 1988 through December 24, 1989. In total, the spouses Abing paid P 54,000.00, inclusive of the downpayment.

Despite these payments, petitioner executed on January 13, 1989 a Deed of Absolute Sale over Lot 2049-B and his other lots in favor of William Po for P 200,000.00, acknowledging receipt of the price and representing in the deed that he was the lawful owner free from taxes and encumbrances and that the properties were untenanted. The sale was registered on December 5, 1989, and Transfer Certificate of Title No. 67775 was issued in favor of William Po.

Petitioner did not inform the spouses Abing of the sale to William Po. The spouses Abing continued making partial payments to petitioner, and petitioner continued accepting them. On December 27, 1989, petitioner consented to the construction by Abraham Abing of a fence and a residential house or warehouse on the subject lots. The spouses purchased hollow blocks for the fence for P 40,000.00. During construction, William Po evicted the spouses, and the construction materials for the house remained unused.

The spouses later learned that petitioner had sold the lots to William Po and that the latter had secured title in his name. Accordingly, the spouses’ payments and construction expenditures were rendered ineffective by petitioner’s undisclosed prior conveyance.

Filing of the Criminal Complaint and Preliminary Investigation

On February 28, 1992, Guillerma Abing executed an affidavit and, through counsel, filed a criminal complaint for estafa against petitioner and Loreta Bacaltos with the Office of the Provincial Prosecutor. On March 17, 1992, Bacaltos submitted a counter-affidavit asserting, among other points, that she was not the proper party liable because she was not the owner of the subject property and that she acted only as petitioner’s agent, without knowledge of the properties covered by the Contract to Sell.

After the preliminary investigation, the prosecutor filed an Information charging petitioner with estafa under Article 316, paragraph 2 of the Revised Penal Code, alleging that in November 1989, more or less, in Talisay, Cebu, petitioner knowingly disposed of real property that was allegedly already encumbered to William Po, to the damage and prejudice of Guillerma Abing, in the total amount of P 92,000.00.

Trial Court Proceedings and Conviction

During trial, the prosecution adduced testimonial evidence and filed a Formal Offer of Evidence on September 2, 1993. Petitioner did not object to the documentary evidence, and the trial court admitted the prosecution’s documents on February 4, 1994.

The trial court scheduled continuation of trial for March 23, 1994, but petitioner’s counsel failed to appear. The trial court issued an order declaring that petitioner had waived the right to present evidence. On June 23, 1994, the trial court rendered judgment finding petitioner guilty beyond reasonable doubt of estafa under Article 316, paragraph 2 and sentenced him to imprisonment of two (2) months and one (1) day to four (4) months of arresto mayor and to pay a fine of P 92,000.00. It also ordered payment of P 92,000.00 as indemnity to Guillerma Abing representing the value of the land sold, reimbursement of P 40,000.00 for hollow block fence constructed by the complainant with petitioner’s consent, P 50,000.00 as moral damages, and P 20,000.00 as exemplary damages plus attorneys fees of P 5,000.00.

Appellate Review and Petitioner’s Arguments

Petitioner appealed to the Court of Appeals, which affirmed the trial court’s conviction. In his petition, petitioner contended that the trial court erred in holding that the conveyance to William Po constituted estafa against the private complainant. He also argued that the trial court erred in convicting him based on the prosecution’s evidence.

The Court treated as a prefatory matter the question whether petitioner could be convicted of estafa under Article 316, paragraph 2, considering the sufficiency of the Information. The Court noted constitutional and procedural requirements that an accused must be informed of the nature and cause of the accusation, and that the Information must allege the acts or omissions constituting the offense, including the essential elements, guided by the doctrine that the real nature of the crime is determined by the facts alleged rather than the caption.

The Court’s Ruling on the Sufficiency of the Information

The Court examined Section 14(2), Article III of the 1987 Constitution and Rule 110 of the Rules of Criminal Procedure, emphasizing that every element of the offense must be alleged in the Information. It then quoted Article 316, paragraph 2 of the Revised Penal Code, explaining that the gravamen of this form of other forms of swindling lies in the disposition of legally encumbered real property by the offender while making an express representation that the property is free from any encumbrance, even if the encumbrance is unrecorded.

Accordingly, the prosecution had to allege and prove the confluence of essential elements, including: (a) that the thing disposed of is real property; (b) that the offender knew the real property was encumbered; (c) that there must be an express representation by the offender that the real property is free from encumbrance; and (d) that the act of disposing was made to the damage of another.

Applying this framework, the Court held that the Information lacked any allegation that petitioner had expressly represented in the sale to William Po that the property was free from encumbrance. On that basis, the Court concluded that petitioner was not charged with estafa under Article 316, paragraph 2. As a consequence, the trial court committed reversible error in convicting petitioner under that provision, and the Court of Appeals erred in affirming the conviction.

Civil Liability After the Reversal of Criminal Conviction

Although the Court reversed the conviction for estafa, it held that petitioner remained liable to the private respondents for the payments made under the Contract to Sell and for the value of the hollow blocks used in the fence. The Court ordered petitioner to pay the spouses Abing the total of P 54,000.00 representing their payments and P 40,000.00 representing the hollow blocks’ value.

The Court also sustained awards of moral and exemplary damages on the basis that the record established petitioner’s evident bad faith and successful fraud. It stressed that the spouses had purchased the lots and paid with petitioner’s undertaking that the final deed and title would be delivered in their names free from liens or encumbrances upon full payment. The Court found that petitioner deceived them by selling the property to William Po while continuing to accept partial payments. It further noted that petitioner allowed the spouses to construct a fence around the property despite already having sold the lots to William Po. With fraud and bad faith found, the Court ruled that petitioner was liable for moral damages of P 40,000.00 and for exemplary damages of P 20,000.00.

On attorneys’ fees, the Court awarded P 20,000.00, while it also specified the total actual damages ordered as P 94,000.00 and adjusted the damages structure in light of the reversal of the criminal conviction.

Disposition

The Court granted the petition in part. It reversed the decision of the Court of Appeals that affirmed the trial court’s conviction of petitioner for estafa under Article 316

Case Syllabus (G.R. No. 146770)

The case arose from a Petition for Review on Certiorari under Rule 45 contesting a Court of Appeals decision that affirmed a Regional Trial Court conviction of Orlando P. Naya for estafa under Article 316, paragraph 2 of the Revised Penal Code.
The petitioner sought review of both the conviction itself and the monetary awards imposed by the trial court and affirmed on appeal.
The Court treated the appeal as opening review of errors even if not specifically assigned, and first resolved whether the Information supported conviction under Article 316, paragraph 2.

Parties and Procedural Posture

Orlando P. Naya acted as the petitioner.
Spouses Abraham and Guillierma Abing acted as private respondents and the offended parties.
People of the Philippines acted as respondent through the criminal prosecution for estafa.
The Regional Trial Court of Cebu City, Branch 15 convicted the petitioner after he failed to adduce evidence when ordered to proceed on the scheduled trial date.
The Court of Appeals affirmed the RTC decision.
The petitioner advanced arguments that the trial court erred in treating the conveyance to William Po as estafa and in convicting him based on the prosecution evidence.

Key Factual Allegations

The petitioner owned in fee simple a residential land in Talisay, Cebu, identified as Lot 2049-B of the Tal-Ming Estate, with an area of 485 square meters, covered by TCT No. 65042.
On December 14, 1987, the petitioner and the Spouses Abing executed a Contract to Sell for two parcels of land with an aggregate area of 400 square meters for a total price of P 60,000.00.
The contract required the spouses to pay P 20,000.00 as downpayment and the balance of P 40,000.00 in monthly installments of P 1,015.74 for five years beginning June 30, 1988, with payments due on every thirtieth of the month thereafter.
The contract allowed the petitioner to sell the lots to others if the spouses failed to make payments within 60 days from due date, and bound him to execute a first deed of sale and deliver title to the vendees free from encumbrance and liens upon full payment.
The spouses paid P 20,000.00 upon signing and then remitted monthly payments in excess of the contractual monthly installment, which the petitioner and his agent Loreta Bacaltos received.
Unbeknownst to the spouses, the petitioner executed on January 13, 1989 a Deed of Absolute Sale over Lot 2049-B and his other lots in favor of William Po for P 200,000.00, representing that the properties were free from taxes and encumbrances and were untenanted.
The sale to William Po was registered on December 5, 1989, and TCT No. 67775 was issued in William Po’s name.
The petitioner did not inform the spouses of the sale, yet they continued paying the petitioner partial amounts evidenced by receipts totaling P 54,000.00 inclusive of the downpayment.
On December 27, 1989, the petitioner consented to the construction by Abraham Abing of a fence and a residential house or warehouse on the lots.
During the fence construction, William Po evicted the spouses, and the construction materials for the house remained unused.
The spouses later learned that the petitioner had sold the lots to William Po and that the latter had obtained title.
On February 28, 1992, the spouse Guillierma Abing executed an affidavit and filed a criminal complaint for estafa against the petitioner and Loreta Bacaltos with the Office of the Provincial Prosecutor.
Loreta Bacaltos submitted a counter-affidavit asserting she was not the proper party because she was only an agent and had no knowledge of the property covered by the Contract to Sell.
After preliminary investigation, an Information was filed charging the petitioner with estafa under Article 316, paragraph 2, with allegations that the properties were already encumbered.

Information and Charging Theory

The Information alleged that in November 1989 the petitioner, with intent to defraud, willfully disposed of Lot 2049-B to William Po to the damage and prejudice of Guillierma Abing, in the total amount of P 92,000.00.
The charging allegation stated that the petitioner knew that Lot 2049-B was already encumbered, whether by reason of the phrasing in the Information or as treated by the prosecution.
The Information did not allege that the petitioner made an express representation in the sale that the property was free from encumbrance.
The Court reiterated that the nature of the crime depends on the facts alleged in the Information, not on the caption or designation of the offense.
The Court treated the case as presenting a constitutional and procedural notice issue under Sec. 14(2), Art. III, 1987 Constitution, and under Rule 110, Secs. 6 and 8, requiring the acts or omissions constituting the offense to be alleged.

Statutory Framework

The Court applied Sec. 14(2), Art. III, 1987 Constitution to the requirement that an accused must be informed of the nature and cause of the accusation.
The Court invoked Rule 110, Sec. 6 and Rule 110, Sec. 8 to stress that the Information must state the acts or omissions constituting the offense.
The