"x x x.
The respondents are being charged with estafa under Article 315, paragraphs 1(a), 1(b) and 2(a) of the Revised Penal Code. To be held liable for estafa under Article 315, paragraph 1(b) of the Revised Penal Code[22] (estafa by conversion or misappropriation), the following elements must concur:
(1) that money, goods, or other personal properties are received by the offender in trust, or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return, the same;
(2) that there is a misappropriation or conversion of such money or property by the offender or denial on his part of such receipt;
(3) that such misappropriation or conversion or denial is to the prejudice of another; and
(4) that there is a demand made by the offended party on the offender.[23]
The records show that MERALCO failed to prove that the respondents indeed misappropriated or converted its investments. As the handling prosecutor found, aside from the Minutes of the June 8, 2000 Meeting, MERALCO did not present any evidence that would prove that MERALCO indeed gave specific instructions for CIPI to invest only in GS or CPs of the Lopez Group.
According to the CA, the said Minutes do not have any probative value for being hearsay because they attest to the existence of an agreement purportedly entered into between respondent Atilano and Lopez whose testimony was never presented in evidence. While respondent Atilano explicitly denied having received any specific instructions from MERALCO on how its investments would be placed, MERALCO failed to present any contrary evidence. MERALCO could have presented in evidence the testimony of Lopez to prove that he gave specific instructions to CIPI to place its investments only in GS or CPs of the Lopez Group, but it failed to do so.
Absent any proof of specific instructions, CIPI cannot be said to have misappropriated or diverted MERALCO’s investments. We take note that in money market transactions, the dealer is given discretion on where investments are to be placed, absent any agreement with or instruction from the investor to place the investments in specific securities.
Money market transactions may be conducted in various ways. One instance is when an investor enters into an investment contract with a dealer under terms that oblige the dealer to place investments only in designated securities. Another is when there is no stipulation for placement on designated securities; thus, the dealer is given discretion to choose the placement of the investment made. Under the first situation, a dealer who deviates from the specified instruction may be exposed to civil and criminal prosecution; in contrast, the second situation may only give rise to a civil action for recovery of the amount invested.
On the other hand, to be held liable under Article 315, paragraph 2(a) of the Revised Penal Code[24] (estafa by means of deceit), the following elements must concur:
(a) that there must be a false pretense or fraudulent representation as to his power, influence, qualifications, property, credit, agency, business or imaginary transactions;
(b) that such false pretense or fraudulent representation was made or executed prior to or simultaneously with the commission of the fraud;
(c) that the offended party relied on the false pretense, fraudulent act, or fraudulent means and was induced to part with his money or property; and
(d) that, as a result thereof, the offended party suffered damage.[25]
MERALCO argued that the respondents are guilty of falsely pretending that they possess power, influence and qualifications to buy GS and CPs of the Lopez Group, to induce MERALCO to part with its investment. We rule that the argument has no basis precisely because no evidence exists showing that CIPI made false representations regarding its capacity to deal with MERALCO’s investments. In fact, the records will show that respondent Atilano disclosed CIPI’s liquidity problems to MERALCO even before MERALCO placed its investment. We agree with the prosecutor’s finding that aside from its allegations, MERALCO failed to present any evidence showing that any of the respondents made any fraudulent misrepresentations or false statements prior to or simultaneously with the delivery of MERALCO’s funds to CIPI.
Finally, apart from its sweeping allegation that the respondents misappropriated or converted its money placements, the handling prosecutor found that MERALCO failed to establish, by evidence, the particular role or actual participation of each respondent in the alleged criminal act. Neither was it shown that they assented to its commission. “It is basic that only corporate officers shown to have participated in the alleged anomalous acts may be held criminally liable.”[26]
x x x."
