G.R. No. 210612 - People vs. Mateo

Case Summary (G.R. No. 210612)

Key Dates and Procedural Posture

Facts began in 2001–2002 (investments made April–May 2002). Informations filed April 11, 2003. Appellant arrested and arraigned February 19, 2004. RTC judgment convicting appellant: October 22, 2008. CA affirmed with modification: July 16, 2012. Notice of Appeal to the Supreme Court filed August 8, 2013; records elevated and appeal resolved by the Supreme Court affirming CA on October 9, 2017.

Factual Background

Geraldine Alejandro, representing herself as Business Center Head of MMG, solicited investments using a brochure and purported Articles of Partnership showing MMG registration with the SEC and large capital contributions by Ervin Mateo as general partner. Complainants invested P50,000 and later P200,000 based on representations of guaranteed 2.5% monthly interest. Investments were covered by a notarized Memorandum of Agreement (MOA) signed by Mateo. Subsequent post-dated checks issued to complainants were dishonored due to closed MMG bank accounts. SEC inquiry showed MMG was not a registered issuer of securities; complainants’ demands for return went unheeded.

Charges and Informations

The Assistant City Prosecutor filed two Informations charging appellant and co-accused with syndicated estafa under Article 315 of the Revised Penal Code in relation to PD 1689. The Informations alleged inducement through false pretenses to invest funds with MMG, misappropriation and conversion of those funds, and operation as a syndicate. On prosecution motion and without defense objection, the Informations were amended to refer to MMG International Holdings Company, Ltd.

Trial Developments

Pre-trial was conducted and the two cases were jointly tried. After the prosecution rested, the defense failed to present evidence despite multiple re-settings; the prosecution moved to submit the case for resolution and the motion was granted. Trial testimony included SEC certification that MMG was not a registered issuer and documentary evidence such as the MOA, Articles of Partnership, brochure, bank signature cards, and Secretary’s Certificate.

RTC Findings and Disposition

The RTC found all elements of syndicated estafa present, convicted Ervin Y. Mateo beyond reasonable doubt, and sentenced him to life imprisonment for each count. The RTC also held Mateo solidarily liable with MMG to pay actual damages (P206,000.00 and P59,702.61) to the private complainants.

Court of Appeals Ruling

The CA affirmed the RTC in toto, holding that PD 1689 contemplates estafa as defined under Article 315(2)(a) of the RPC and that the elements of syndicated estafa were satisfied. The CA found conspiracy among the accused and sufficient evidence of fraudulent representations, misappropriation, and misrepresentations in soliciting investments from the public.

Issues Presented on Appeal to the Supreme Court

Appellant’s supplemental brief raised: (A) whether conviction under Article 315(2)(a) in relation to PD 1689 is proper; (B) whether defraudation was proven beyond reasonable doubt; (C) whether the quantum of proof sufficed; (D) whether a corporate rehabilitation stay (RTC, Branch 256, Muntinlupa) suspended criminal proceedings; and (E) whether the CA committed reversible error in denying reconsideration.

Supreme Court: Applicability of PD 1689 and Article 315(2)(a)

The Supreme Court rejected appellant’s contention that PD 1689 only contemplates estafa under Article 315(1)(b). The Court cited Section 1 of PD 1689 and precedents establishing that estafa by means of deceit under Article 315(2)(a) is among the forms of swindling penalized by PD 1689 when committed by a syndicate and resulting in misappropriation of solicited funds. PD 1689 thus imposes heightened penalties (life to death) for syndicated swindling regardless of amount when the statutory elements are met.

Elements of Estafa (Article 315(2)(a)) and Syndicated Estafa (PD 1689)

The Court reiterated elements of estafa by deceit under Article 315(2)(a): (a) false pretense or fraudulent representation regarding power, qualifications, property, agency, business or imaginary transactions; (b) made prior to or simultaneous with the fraud; (c) reliance by the offended party inducing parting with money; and (d) resulting damage. For syndicated estafa under PD 1689, the Court enumerated: (a) commission of estafa or swindling as defined in Articles 315/316; (b) commission by a syndicate of five or more persons; and (c) defraudation resulting in misappropriation of funds solicited from the public or similar groups.

Proof of Fraud, Misrepresentation, and Ultra Vires Acts

The Court accepted prosecutorial showing that MMG represented extensive business operations in a brochure and promised 2.5% monthly returns without proof of legitimate business activities. The SEC certification established MMG was not a registered issuer and lacked authority to solicit public funds. The Amended Articles of Partnership prohibited stock brokerage or securities dealership; yet MMG solicited investments—acts characterized as ultra vires and deceptive. Testimonial and documentary evidence demonstrated a uniform scheme of deception using the brochure and MOA to induce investments.

Conspiracy and Joint Liability

The Court affirmed findings of conspiracy: the partnership structure, access of incorporators/directors to MMG bank accounts, inclusion of appellant as sole general partner with large capital contribution in partnership documents, appellant’s alleged signatures on MOA and bank documents, and recognition/use of facsimile/stamped signatures by the bank established indispensable cooperation. The Court applied the principle that when conspiracy exists, the act of one conspirator is the act of all; therefore it was unnecessary to prove appellant personally made the initial fraudulent representations.

Signatures, Facsimile Signatures, and Evidence of Participation

The Court addressed appellant’s denial that signatures were his and his claim they were facsimile. It observed that facsimile signatures are valid in banking/financial transactions; the MOA was notarized and appellant only disputed authenticity on appeal. The same facsimile/stamped signatures were used to open MMG bank accounts where appellant was an authorized signatory. The Court concluded appellant could not deny the binding effect of those signatures and that they supported his participation in the scheme.

Effect of Corporate Rehabilitation Stay on Crimina

Case Syllabus (G.R. No. 210612)

Parties and Nature of Case

Plaintiff-Appellee: People of the Philippines.
Accused and Respondents: Ervin Y. Mateo (accused-appellant), Evelyn E. Mateo, Carmelita B. Galvez, Romeo L. Esteban, Galileo J. Saporsantos and Nenita S. Saporsantos.
Criminal charges: Syndicated estafa under Article 315 of the Revised Penal Code (RPC) in relation to Presidential Decree No. 1689 (PD 1689).
Relief sought on appeal: Accused-appellant Ervin Y. Mateo filed an ordinary appeal to assail the Court of Appeals decision that affirmed with modification the Regional Trial Court judgment finding him guilty of syndicated estafa and sentencing him to life imprisonment for each count and ordering payment of actual damages to private complainants.

Relevant Chronology and Case Numbers

Initial events began in March 2001 and investments in 2002.
Informations filed by the Assistant City Prosecutor of Makati City on April 11, 2003.
Cases docketed as Criminal Case Nos. 03-2936 and 03-2987; part of a larger set of similar cases totaling 209.
Arraignment of Ervin Y. Mateo: February 19, 2004 (plea: not guilty).
RTC rendered judgment finding Mateo guilty: October 22, 2008.
Court of Appeals decision affirming RTC: July 16, 2012.
Notice of Appeal to the Supreme Court filed: August 8, 2013; CA gave due course and elevated records: CA Resolution dated August 29, 2013.
Supreme Court resolution noting supplemental briefs allowed: March 5, 2014; supplemental brief by accused-appellant filed June 30, 2014.
Supreme Court final decision: October 09, 2017 (G.R. No. 210612).

Factual Background and How the Scheme Operated

Initiating contact: In March 2001, private complainant Herminio Alcid, Jr. met Geraldine Alejandro, who introduced herself as head of the Business Center of MMG International Holdings Co., Ltd. (MMG) and solicited investments.
Promotional materials: Geraldine showed a brochure titled "Alliance" showcasing numerous purported MMG businesses (condotel, realty, schools, manufacturing, insurance, retail, film, shipping, etc.) and showed Articles of Partnership indicating MMG’s registration with the SEC and identifying Ervin Y. Mateo as a general partner contributing P49,750,000.00.
Investment inducements and returns: Investors were promised a guaranteed 2.5% monthly interest return; investors were given notarized Memorandum of Agreement (MOA) signed by accused-appellant which stated MMG was represented by its President (accused-appellant) and investors would earn 2.5% monthly interest.
Initial investments and payments: Herminio, Jr. invested P50,000.00 on April 20, 2002 and subsequently, due to prompt payments, made a larger joint investment with his father of P200,000.00 on May 2, 2002; Melanie (Herminio, Jr.’s sister) invested P50,000.00 later.
Post-dated checks and dishonor: Complainants received post-dated checks covering investments, but banks informed them the checks were dishonored because MMG accounts were already closed.
Attempts to recover funds failed: Complainants’ demands for return of money were unheeded.
SEC involvement: Complainants discovered MMG was not a registered issuer of securities; SEC forwarded the complaint to the City Prosecutor of Makati.

Contents of the Informations and Subsequent Amendment

Informations charged accused-appellant and co-accused with syndicated estafa, setting forth dates, complainant names and amounts obtained.
Charging averments included false pretenses/fraudulent acts claiming authority to solicit and accept investments and guarantee monthly returns of 2.5%, inducing complainants to invest specified sums which were then misappropriated.
On prosecution motion, without defense objection, the Informations were amended to read that the accused were "being partners, officers, employees and/or agents of MMG, International Holdings Company, Ltd."

Trial, Default of Defense Presentation, and Submission

Pre-trial conducted; Criminal Case Nos. 03-2936 and 03-2987 were jointly tried.
After the prosecution rested, the defense failed to present evidence despite multiple re-settings.
On motion of the prosecution, case was deemed submitted for resolution.

RTC Judgment (October 22, 2008) — Findings and Sentence

RTC found Ervin Y. Mateo guilty beyond reasonable doubt of syndicated estafa under Article 315 of the RPC in relation to PD 1689 in both Criminal Case Nos. 03-2936 and 03-2987.
Sentence: Life imprisonment for each count.
Civil liability: Mateo held solidarily liable with MMG International Holdings Company, Ltd. to pay actual damages — P206,000.00 to Herminio Alcid Jr. and Sr. (Crim. Case No. 03-2936) and P59,702.61 to Melanie Alcid (Crim. Case No. 03-2987).
RTC’s finding that elements of syndicated estafa were present:
- MMG was formed by Mateo and five others;
- Mateo and co-accused committed fraud inducing private complainants to part with money;
- Fraud resulted in misappropriation of complainants' contributions.

Court of Appeals Ruling (July 16, 2012)

CA affirmed the RTC judgment in toto.
CA held that PD 1689 contemplates estafa as defined under Article 315, paragraph 2(a) of the RPC.
CA agreed that all elements of syndicated estafa were established and found existence of conspiracy among accused.

Issues Presented by Accused-Appellant on Appeal to the Supreme Court

A. Whether accused-appellant may be convicted of estafa under Article 315(2)(a) in relation to PD 1689.
B. Whether the element of defraudation was proven beyond reasonable doubt by prosecution.
C. Whether the quantum of proof is sufficient to warrant conviction beyond reasonable doubt.
D. Whether accused-appellant may be convicted despite a stay order issued by the Commercial Court, RTC Branch 256, Muntinlupa City, in a corporate rehabilitation petition covering MMG Group.
E. Whether the Court of Appeals committed reversible errors in denying motions for reconsideration.

Supreme Court’s Conclusion on Whether PD 1689 Covers Article 315(2)(a) Estafa

The Supreme Court rejected accused-appellant’s contention that PD 1689 only contemplates Article 315(1)(b) estafa and not Article 315(2)(a).
The Court cited Section 1 of PD 1689 which punishes "estafa or other forms of swindling as defined in Article 315 and 316 of the Revised Penal Code" committed by a syndicate of five or more persons, indicating inclusion of the kinds of estafa under Article 315(2)(a).
The Court referenced prior cases establishing that estafa under Article 315(2)(a) is contemplated by PD 1689.

Elements of Estafa (Article 315(2)(a)) and Syndicated Estafa (PD 1