G.R. No. 219157 - Silver vs. Daray

Case Summary (G.R. No. 219157)

Procedural Posture

Petitioners filed a petition for review to the Supreme Court assailing the Court of Appeals’ Decision (August 14, 2014) sustaining probable cause findings for violation of R.A. No. 6539 and the Court of Appeals’ June 2, 2015 Resolution denying reconsideration. The DOJ had earlier directed filing of informations against certain respondents and later ordered their reinstatement after reinvestigation. The trial court (RTC-Branch 11) issued arrest warrants followed by denial of petitioners’ motion for reconsideration; petitioners sought certiorari relief from the Court of Appeals which was denied, prompting the present petition to the Supreme Court.

Factual Background — Auction, Financing, and Agreements

Petitioner Zenaida Silver, doing business as ZSH Commercial, participated in a BOC auction and became the winning bidder for numerous vehicles and parts. She allegedly obtained financing from Loreto Hao under a Memorandum of Agreement dated February 4, 2005, which contemplated, among other things, a deed of sale in Hao’s favor, profit-sharing and a diminishing-balance loan arrangement. Silver executed a deed of absolute sale purportedly to secure repayment; Hao later paid the bid price at the BOC and the BOC released 95 vehicles and parts to ZSH Commercial.

Factual Background — Movement, Sale, and Dispute

Because many units required repair, the vehicles were moved to a compound for storage and repair. Silver authorized Kenneth Hao (nephew of Loreto Hao) by special power of attorney to act as liaison and to sell the items. Disputes arose: Silver alleged Kenneth disposed of 64 items without accounting; private respondents contend Silver breached payment obligations and later sold vehicles. Certain vehicles were registered in third-party names (including Talattad and Macasindil), and Silver later rescinded the SPA. Allegations escalated into counterclaims including carnapping, qualified theft, estafa, perjury and falsification.

Proceedings Before Prosecutor and DOJ

The City Prosecutor initially dismissed complaints via joint resolution (Nov. 17, 2005). Petitions for review to the DOJ yielded a modified outcome (June 27, 2007) that affirmed dismissals against some respondents but found probable cause against Zenaida Silver, SPO4 Nelson Salcedo and others for violation of R.A. No. 6539, directing filing of criminal informations (eight counts). Those informations were subsequently raffled to RTC-Branch 14 and warrants of arrest were issued; the prosecution later withdrew the informations after reinvestigation and Branch 14 dismissed. On petition for review, the DOJ ordered the reinstatement of the informations (July 10, 2009).

Trial Court Proceedings and Warrants

The eight informations were raffled to RTC-Branch 11 (Crim. Case Nos. 66,237-09 to 66,244-09). By Order dated April 28, 2011, Branch 11 directed issuance of arrest warrants against petitioners and several others, finding probable cause for violations of Section 2 of R.A. No. 6539. The court’s order reflects consideration of the prosecution submissions, relevant DOJ resolutions, a prior Branch 14 order, and a hearing held for determination of probable cause. Petitioners’ motion for reconsideration was denied by Joint Order dated September 14, 2012.

Court of Appeals Review

Petitioners sought certiorari relief alleging the trial judges did not personally determine probable cause and that ownership disputes negate carnapping liability. The Court of Appeals, in its August 14, 2014 decision, dismissed the petition, holding there was no grave abuse of discretion. The CA emphasized that the trial judge personally examined the prosecutor’s report, supporting evidence and pleadings, and conducted a hearing where parties could present evidence. The CA agreed that LTO certificates of registration naming private respondents gave rise to a strong presumption of ownership and that the removal of vehicles under custodia legis without consent constituted a taking under R.A. No. 6539.

Legal Standard for Issuance of Warrant — Constitutional and Rule 112 Requirements

The Supreme Court reiterated that under Article III, Section 2 of the 1987 Constitution and Rule 112, Section 6(a), the trial court judge must personally evaluate the prosecutor’s resolution and the supporting documents and evidence within ten days of filing of the complaint or information. The judge may dismiss, issue a warrant, or, if in doubt, require additional evidence within five days; the judge need not conduct a de novo preliminary hearing but must assess whether the prosecutor’s determination is supported by substantial evidence. Probable cause for arrest is defined as facts and circumstances that would lead a reasonably discreet and prudent person to believe an offense was committed by the person sought to be arrested; the standard is less stringent than proof of guilt beyond reasonable doubt and requires only a prima facie showing.

Precedent Guidance on Judicial Evaluation of Prosecutor’s Record

The Supreme Court discussed controlling precedents (Soliven, Inting, Lim, Allado, Webb, Roberts Jr.) which clarify that (1) the judge must personally evaluate the prosecution report and its supporting documents (affidavits, transcripts, other materials), (2) the prosecutor’s certification alone is insufficient, and (3) the extent of the judge’s personal examination depends on case circumstances—ranging from cursory to exhaustive inquiry—and the judge must exercise sound discretion. When the record before the judge includes affidavits and supporting documents, reliance on the prosecutorial record may be appropriate; if not, the judge must require further submission or personal examination.

Application of Law to the Present Case — Trial Judges’ Compliance

The Supreme Court found that the orders of Judges Belo and Daray on their faces evidenced personal evaluation of the prosecutor’s reports and supporting evidence. Judge Belo conducted a clarificatory hearing and required submission of pleadings and evidence; Judge Daray carefully reviewed motions, oppositions, replies, rejoinders and position papers in denying reconsideration and observed that issues raised by petitioners were defenses to be proved at trial. Thus both judges independently concluded there was probable cause, in compliance with Section 6(a), Rule 112 and constitutional requirements.

Ownership, Custodia Legis, and Elements of Carnapping

The elements of carnapping (taking of a motor vehicle belonging to another, without consent or by force/violence/intimidation,

Case Syllabus (G.R. No. 219157)

The Case

Petition for Review to the Supreme Court assailing the Court of Appeals issuances in CA-G.R. SP No. 05161-MIN.
Specific assailed CA rulings: Decision dated August 14, 2014 (sustaining trial court's finding of probable cause for violation of RA 6539, the Anti‑Carnapping Act of 1972, against petitioners Zenaida Silver and Nelson Salcedo) and Resolution dated June 2, 2015 (denying petitioners' motion for reconsideration).
The petition challenges the finding of probable cause and the issuance of warrants of arrest; petitioners argue lack of personal determination of probable cause and question the sufficiency of grounds to place them under arrest.

Antecedents — Overview of Dispute and Key Actors

Petitioner Zenaida E. Silver: operator of a motor vehicle buy-and-sell business under the name "ZSH Commercial."
Private respondent Loreto Hao: financier/claimed purchaser who provided funds for the BOC auction bid and entered into agreements with Silver.
Private respondent Kenneth Hao: Loreto Hao’s nephew, granted authority by Silver via Special Power of Attorney to act as liaison and to sell units.
Other private respondents: Atty. Amado L. Cantos, Zenaida Talattad, Maureen Ella M. Macasindil; prosecution and law enforcement actors including SPO4 Nelson Salcedo and Sheriff Abe C. Andres.
Core dispute: ownership, possession, and disposition of motor vehicles and spare parts acquired at a Bureau of Customs (BOC) auction and the alleged unauthorized removal and disposition of vehicles leading to criminal charges including carnapping.

Zenaida Silver’s Affidavit-Complaint (May 10, 2005) — Facts in Petitioner’s Account

Zenaida Silver participated in BOC auction (General Santos City) on February 10, 2005; she entered a bid of P5,790,100.00 and was the winning bidder for several vehicles and assorted parts.
She obtained a loan from Loreto Hao to cover the bid; loan arrangements were embodied in a Memorandum of Agreement dated February 4, 2005 containing specific terms:
- Execution of a deed of sale in Hao’s favor indicating purchase price of P7,527,100.00 as security for the loan.
- Five percent (5%) of profits from resale to go to Loreto Hao as loan payment.
- After full payment, proceeds to be divided 70% to Silver and 30% to Hao.
- Loan payment to follow a diminishing balance arrangement.
- Silver to furnish a detailed pricelist of units.
- Expenses for transport, lot rentals, and other necessary expenses to be on Hao’s account, although Silver might advance them.
Silver executed a deed of absolute sale but claims Hao did not actually release the loan; Hao allegedly paid the bid price directly to the BOC and the receipt was issued in the name of ZSH Commercial.
Ninety‑five (95) units of motor vehicles and various parts and accessories were released by the BOC to ZSH Commercial.
Many units required repair; on suggestion of Loreto Hao, the units were transferred to the Honasan Compound in Panacan, Davao City.
Silver authorized Kenneth Hao (by special power of attorney) to sell items and act as liaison; subsequently Silver alleges Kenneth disposed of sixty‑four (64) items without her knowledge or accounting.
Total sales allegedly reached P10,094,000.00, exceeding amounts owed to Hao.
Silver alleges Loreto and Kenneth Hao caused registrations of several vehicles in names of third persons, including respondents Zenaida Talattad and Maureen Ella Macasindil.
Silver rescinded the SPA issued to Kenneth Hao; despite rescission, Loreto, Kenneth, and cohorts allegedly continued to remove and dispose of remaining vehicles.
Silver characterizes the conduct of private respondents and cohorts as grave coercion, qualified theft, and carnapping.

Loreto Hao’s Counter-Affidavit and Counter-Charges (June 23, 2005) — Facts in Respondent’s Account

Hao asserts Silver's initial bid at BOC January 26, 2005 was invalidated for failure to pay within 48 hours; a subsequent auction occurred February 10, 2005 where Silver entered the winning bid on his behalf after he was told he was disqualified.
Hao avers he financed the enterprise and gave Silver two manager’s checks for P5,212,530.00 and P579,130.00 respectively.
Silver allegedly executed a Deed of Absolute Sale and Assignment of Rights dated February 12, 2005 in Hao’s favor covering the vehicles and spare parts.
Hao took possession and transported items via container vans; Silver was to liquidate expenses by selling to her “sure buyers,” but she suggested repairs first to command higher prices and agreed to shoulder repair expenses.
BOC allegedly held back twelve (12) vehicles and two (2) container vans because Silver had an unpaid balance; Silver withdrew the two vans containing spare parts and sold them for P120,960.00, giving Hao a check for P114,912.00 (his share).
Hao wrote the BOC declaring Silver sold all vehicles and spare parts to him; BOC released Certificates of Payment over ninety‑five (95) vehicles to him.
Suspecting deception, Hao decided to sell the merchandise to others to recoup investment and revoked the Memorandum of Agreement dated February 4, 2005.
Agreement dated March 17, 2005 purportedly gave Hao sole ownership over the vehicles and spare parts and provided Silver a P20,000.00 discount/commission for each vehicle sold.
Silver executed an irrevocable Special Power of Attorney dated March 17, 2005 in favor of Kenneth Hao to facilitate withdrawal from the BOC.
Hao moved the units to his Obrero compound to save storage costs.
Silver later sent letters cancelling documents including the SPA; on April 19, 2005, security reported Silver and companions with two policemen forcibly attempted to enter the compound to retrieve vehicles; they were stopped by locking the gate and Hao produced papers which the police respected.
As a result, Hao countercharged Silver with perjury, falsification, estafa, qualified theft, and carnapping. The carnapping allegation pertained to Silver’s alleged withdrawal of eleven (11) vehicles from the BOC without his knowledge or consent.

Civil and Related Proceedings — Replevin and Custodia Legis

Silver filed complaints for recovery of possession (replevin) before different branches of the RTC in Davao City; one such complaint was raffled to RTC‑Branch 16.
RTC‑Branch 16 issued an Order dated October 17, 2005 commanding Sheriff Abe Andres to seize twenty‑two (22) motor vehicles and place them under custodia legis.
Sheriff Andres succeeded in seizing nine (9) vehicles and moved them to a compound at Diversion Road, Buhangin, Davao City.
Silver and companions later caused eight (8) of those vehicle