Monday, January 25, 2016

Loan is not estafa

In the case of LAND BANK OF THE PHILIPPINES vs. LAMBERTO C. PEREZ, NESTOR C. KUN, MA. ESTELITA P. ANGELES-PANLILIO, and NAPOLEON O. GARCIA, G.R. No. 166884, June 13, 2012, the Supreme Court held that “the law does not singularly seek to enforce payment of the loan, as there can be no violation of the right against imprisonment for non-payment of a debt”

Sec. 20, Art. III, Bill of Rights, of the 1987 Constitution provides that “no person shall be imprisoned for debt or non-payment of a poll tax”.

In the case of BETTY GABIONZA and  ISABELITA TAN, COURT OF APPEALS, LUKE ROXAS and EVELYN NOLASCO, G.R. No. 161057, September 12, 2008, the Supreme Court held that nonpayment of a LOAN does not give rise to criminal liability for estafa through misappropriation or conversion. Thus:

“To the benefit of private respondents, the Court of Appeals ruled, citing Sesbreno v. Court of Appeals, 310 Phil. 671 (1995), that the subject transactions are akin to money market placements which partake the nature of a loan, the non-payment of which does not give rise to criminal liability for estafa. X x x. Sesbreno affirmed that a money market transaction partakes the nature of a loan and therefore nonpayment thereof would not give rise to criminal liability for estafa through misappropriation or conversion. X x x. 
Indeed, Sesbreno explains: In money market placement, the investor is a lender who loans his money to a borrower through a middleman or dealer. Petitioner here loaned his money to a borrower through Philfinance. When the latter failed to deliver back petitioner's placement with the corresponding interest earned at the maturity date, the liability incurred by Philfinance was a civil one. X x x.”


“In Alcantara v. Court of Appeals, 462 Phil. 72, 88-89 (2003), this Court, citing People v. Balasa, G.R. Nos. 106357 & 108601-02, September 3, 1998, 295 SCRA 49. explained the meaning of fraud and deceitviz.:

[F]raud in its general sense is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. It is a generic term embracing all multifarious means which human ingenuity can device, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling and any unfair way by which another is cheated. And deceit is the false representation of a matter of fact whether by words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed which deceives or is intended to deceive another so that he shall act upon it to his legal injury.

X x x.”

PEOPLE OF THE PHILIPPINES vs. RICA G. CUYUGANG.R. Nos. 146641-43, November 18, 2002

“x x x.

The transaction between appellant and the Abagat spouses, in our view, was one for a loan of money to be used by appellant in her business and she issued checks to guarantee the payment of the loan. As such, she has the obligation to make good the payment of the money borrowed by her. But such obligation is civil in character and in the absence of fraud, no criminal liability under the Revised Penal Code arises from the mere issuance of postdated checks as a guarantee of repayment. We find appellants allegation, that the Abagat spouses entered into a joint venture agreement with her for the supply of materials with the AFP, is self-serving. But we also note that the trial court convicted appellant on a general allegation that all the elements of estafa under Article 315, 2 (d) of the Revised Penal Code had been proved by the prosecution without making any reference to or giving any proof of the actual fraud that appellant allegedly committed to make her liable for estafa. It is elementary that where an allegation in the information is an essential element of the crime, the same must be proved beyond reasonable doubt to sustain a conviction. In this case, the prosecution did not establish specifically and conclusively the fraud alleged as an element of the offenses charged.
X x x.”

G.R. No. 168217, June 27, 2006

“x x x.

There can be no estafa if the accused acted in good faith because good faith negates malice and deceit (People vs. Ojeda, G.R. Nos. 104238-58, June 3, 2004, 430 SCRA 436). Good faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage.  X x x. It implies honesty of intention and freedom from knowledge of circumstances which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the validity of ones right, ignorance of a superior claim, and absence of intention to overreach another (Philippine National Bank v. De Jesus, G.R. No. 149295, September 23, 2003, 411 SCRA 557, 561). In People v. Gulion, 402 Phil. 653 (2001), the Court held that:

Good faith is a defense to a charge of Estafa by postdating a check. This may be manifested by the accuseds offering to make arrangements with his creditor as to the manner of payment or, as in the present case, averring that his placing his signature on the questioned checks was purely a result of his gullibility and inadvertence, with the unfortunate result that he himself became a victim of the trickery and manipulations of accused-at-large.

X x x.”