G.R. No. 246787 - Dissenting Opinion

G.R. No. 246787, January 30, 2024,
♦ Decision, Rosario, [J]
♦ Concurring Opinion, Gesmundo, [C.J]
♦ Concurring Opinion, Caguioa, [J]
♦ Concurring Opinion, Hernando, [J]
♦ Concurring Opinion, Lazaro-Javier, [J]
♦ Dissenting Opinion, Gaerlan, [J]
♦ Separate Opinion, J. Lopez, [J]
♦ Concurring and Dissenting Opinion, Dimaampao, [J]
♦ Separate Concurring Opinion, Singh, [J]

SPOUSES ENRIQUE LLONILLO AND MARITES LLONILLO, PETITIONERS,
vs.
PEOPLE OF THE PHILIPPINES, RESPONDENT.

The due process clause enshrined in the Bill of Rights cannot be forsaken for the sake of speed and convenience in the resolution of cases. The rights to be notified and effectively heard reign supreme. An award of civil liability arising from sources other than delict in the same criminal proceeding offends the basic tenets of due process of law, which the Court, as the guardian of the Constitution, must stringently protect.

Spouses Enrique and Marites Llonillo (spouses Llonillo) were charged with the crime of Other Deceits in violation of Article 318 of the Revised Penal Code (RPC). The charge stemmed from the Memorandum of Agreement (MOA) executed between the spouses Llonillo and private complainant Pedro Joel Caspillo (Caspillo), whereby the latter agreed to lend the former PHP 300,000.00. In exchange, the spouses Llonillo undertook to return the principal amount of PHP 300,000.00. Additionally, the spouses Llonillo offered a sangla-tira arrangement, wherein Caspillo will receive a monthly rental of PHP 10,000.00 for apartment Unit H located at No. 236 Aguho Street owned by the spouses Llonillo, as interest.

Purportedly, the spouses Llonillo assured Caspillo that the properties where the unit stood had no liens, which enticed the latter to agree and part with his money. Unfortunately, Caspillo was unable to collect the monthly rentals promised to him. Worse, Caspillo discovered that the spouses Llonillo entered into another sangla-tira arrangement with other persons over Unit H. To his further dismay, he likewise learned that the properties wherein Unit H stood were mortgaged to different banks contrary to the spouses Llonillo's representation that they were unencumbered.

Adding to Caspillo's woes, the spouses Llonillo failed to repay him the PHP 300,000.00 they owed. Angered, Caspillo filed a complaint against the spouses Llonillo for other deceits under Article 318 of the RPC.

The Metropolitan Trial Court1 adjudged the spouses Llonillo guilty beyond reasonable doubt of other deceits. This ruling was affirmed by the Regional Trial Court2 and the Court of Appeals.3

Upon Petition for Review on Certiorari4 of the spouses Llonillo, the ponencia reversed the earlier pronouncements and acquitted them for failure of the prosecution to prove that they made a false pretense prior to or simultaneously with the commission of the alleged fraud against Caspillo. Despite the acquittal, the ponencia ordered the spouses Llonillo to pay Caspillo the principal amount of the loan of PHP 300,000.00.

I concur that the spouses Llonillo must be exonerated of the charge, however, I disagree that the award of PHP 300,000.00 as civil indemnity should be granted in the same criminal proceeding.

It is a basic tenet in criminal law that "[e]very person criminally liable for a felony is also civilly liable."5 Civil liability includes restitution, reparation of the damage caused, and indemnification for consequential damages.6 The civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action, unless the offended party expressly waives the civil action or reserves the right to institute it separately.7 This civil liability ex delicto arises from the same act or omission constituting the crime.

Significantly, Article 29 of the Civil Code states that when the accused in a criminal prosecution is acquitted on the ground that his or her guilt has not been proven beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted and shall only require a preponderance of evidence. As such, even if there is no sufficient proof that the act or omission is criminal beyond reasonable doubt, if there is at least a preponderance of evidence to show that the act or omission caused injury, compensation may be demanded in the same criminal proceeding.8 It is important to note however that the civil liability referred to in Article 29 of the Civil Code pertains to civil liability ex delicto, or that which arose from the very same act or omission as the crime.

On the other hand, Rule 111, Section 2 of the Rules on Criminal Procedure provides an exception to the survival of the civil action. Thus, "... the civil action based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist."9 Jurisprudence further adds that civil liability shall likewise be barred upon proof that the accused did not commit the act or omission imputed to him or her.10

The rules for the recovery of civil liability ex delicto are simplified in Manantan v. Court of Appeals,11 as follows: an acquittal based on reasonable doubt on the guilt of the accused may open the door to civil liability, which only demands a preponderance of evidence, whereas an acquittal on the ground that the accused is not the author of the act or omission complained of closes the door to civil liability, for a person who is not the perpetrator of any act or omission can never be held liable for such act or omission.

Ultimately, the survival of civil liability ex delicto depends on the reason behind the acquittal – whether the crime was possibly committed but reasonable doubt exists on the guilt of the accused, or that no crime was committed at all.

ARTICLE 318. Other deceits. The penalty of arresto mayor and a fine of not less than the amount of the damage caused and not more than twice such amount shall be imposed upon any person who shall defraud or damage another by any other deceit not mentioned in the preceding articles of this chapter.

The crime of other deceits is a catch-all provision that covers all other acts of swindling not falling under Articles 315,12 316,13 and 31714 of the RPC.15

To secure a conviction for other deceits, the prosecution must prove the following elements beyond reasonable doubt: (i) the accused made a false pretense, fraudulent act, or pretense other than those mentioned in Articles 315, 316, and 317 of the RPC; (ii) such false pretense, fraudulent act, or pretense must be made or executed prior to or simultaneously with the commission of the fraud; and (iii) as a result, the offended party suffered damage or prejudice. The gravamen of other deceits is the utterance of a false statement or fraudulent representation that caused the offended party to part with his or her money or property.16

Relatedly, 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 [they] shall act upon it to [their] legal injury."17 In turn, concealment is the fraudulent unlawful intent to hide facts the other party ought to know. While, false representation is the suppression of a material fact a party must, in good faith, disclose.18

In this case, the spouses Llonillo did not defraud Caspillo to part with his money. Caspillo's testimony in open court reveals that at the time he entered into a loan agreement with the spouses Llonillo, he already knew that the properties were mortgaged to various banks. Caspillo testified that he was shown two separate copies of the certificates of title, which he examined. He further admitted that the dorsal portion of the last page of both titles bore an annotation that the properties were mortgaged to a financial institution. Moreover, he was aware that the spouses Llonillo could not present the original titles because they were in the possession of the bank where they were mortgaged. Clearly, the spouses Llonillo did not conceal any fact or make any false representation of a matter of fact.

In the same manner, neither will the spouses Llonillo's act of entering into sangla-tira arrangements with other persons render them liable for other deceits. When the spouses Llonillo and Caspillo executed the MOA in 2009, Unit H was not covered by any sangla-tira agreement with any person, except Caspillo. The subsequent sangla-tira arrangements with other persons were entered into in 2011 and 2012. In other deceits, the false statement or fraudulent representation must occur simultaneously with the commission of the fraud.19

It cannot be gainsaid that without the commission of fraud at the time of the execution of the MOA, there is no crime of other deceits to speak of. To reiterate, the essence of other deceits is the utterance of a false statement or fraudulent representation simultaneously with the fraud that lured the complainant to part with his or her money or property. Consequently, in the absence of criminal fraud, what remains is a loan agreement freely entered by the parties.

In fact, the ponencia exonerates the spouses Llonillo due to the absence of a false pretense. Interestingly, the ponencia acknowledges that the parties entered into a loan agreement, and even attributes the damage or prejudice from the failure of the spouses Llonillo to pay Caspillo "the full amount of their PHP 300,000.00 loan." The ponencia further concludes that the act from which the civil liability might arise is the act of loaning the PHP 300,000.00 and not paying it back on time:

As mentioned, there are three elements of the crime of Other Deceits under Article 318 of the RPC: (a) false pretense, fraudulent act or pretense other than those in (Articles 315, 316, and 317); (b) such false pretense, fraudulent act or pretense must be made or executed prior to or simultaneously with the commission of the fraud; and (c) as a result, the offended party suffered damage or prejudice. In this case, the first and second elements do not exist as there was no false pretense. However, the element of damage still exists: there is no proof that [the Spouses Llonillo] have paid Caspillo the full amount of their PHP 300,000.00 loan. There is still an act from which civil liability might arise: the act of loaning PHP 300,000.00 and not timely paying it back despite demand.20 (Emphasis and underscoring supplied)

Verily, the obligation of the spouses Llonillo to return the amount of PHP 300,000.00 did not arise from a crime, but from a contract of loan. Thus, the obligation to pay back the PHP 300,000.00 is not ex delicto or one that arose from the crime, but ex contractu, one that sprung from the contract of loan. The absence of deceit and false pretense proves that the transaction was purely civil in nature and voluntary on both parties.

Corollary, a finding that the source of the obligation is a contract of loan is completely inconsistent with the commission of other deceits. In other deceits, the victim suffered damage or prejudice because of the false pretense or fraudulent act made or executed by the accused prior to or simultaneously with the commission of the fraud. While in a contract, the victim willingly parted with his or her money upon the expectation of receiving something in return. Thus, in other deceits, the accused's failure to return the money partakes of criminal fraud, whereas in a contract of loan, it merely constitutes a contractual breach. Ultimately, this means that there is no civil liability ex delicto.

Accordingly, Caspillo's predicament of losing PHP 300,000.00 may not be regarded as a "damage or prejudice" caused by a crime. Rather, it was the result of the spouses Llonillo's breach of their civil obligation under the contract of loan to repay Caspillo. Since the obligation to return the amount is not the result of a crime, it may not be enforced in the same criminal proceeding. To recall, Article 29 of the Civil Code which allows the recovery of civil liability in the same criminal proceeding speaks of civil liability ex delicto. It does not contemplate civil liability ex contractu, as in the case at bar. Without the act or omission that constitutes criminal fraud, civil liability ex delicto cannot be awarded as it cannot be sourced from something that does not exist.

The award of civil liability ex contractu in the same criminal proceeding offends the due process clause

Article III, Section 1 of the 1987 Constitution guarantees that no person shall be deprived of life, liberty, or property without due process of law.21 Procedural due process is that which hears before it condemns and proceeds upon inquiry and renders judgment only after trial.22 The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard.23

An award of civil liability arising from sources other than delict in the criminal case offends the basic requirements of due process of law. Naturally, a proceeding that heavily centers on proving the guilt of an accused in a criminal trial will only tangentially touch upon the civil liability that stems from a completely distinct source of obligation.

Remarkably, in Dy v. People,24 this Court painstakingly discussed the deleterious consequences in allowing the civil liability, which did not arise from the crime, to be tried in the same criminal proceeding:

The fears espoused in Dy26 are more real than imaginary. In the erroneously fused action, at the outset of the trial, the spouses Llonillo were completely unaware of the nature and origin of their liability –fraudulent misrepresentations or breach of contract. Worse, all throughout the trial, they focused their defenses on proving the absence of fraud, deceit or concealment. They failed to present counterevidence regarding the amount of the loan, or the terms thereof, which would ultimately be the source of their liability. Overall, they did not have the full opportunity to prepare their appropriate defenses and evidence to protect their interest.

Moreover, the spouses Llonillo were deprived of procedural remedies that would have been available in a civil proceeding, such as a motion to dismiss before the trial, or the opportunity to ascertain what cause of action to look for in the initiatory pleading. Further, they did not have the opportunity to file a cross-claim, a counterclaim or a third-party complaint. These are not simple procedural remedies that may be brushed aside, but they constitute the very heart of the right to be heard and to mount a meaningful defense, as guaranteed by the Constitution.

Similarly, the due process clause applies with equal force to the complainant who is at risk of losing his or her property. In an erroneously fused civil action, the private complainant will likewise be deprived of the chance to fully present evidence in support of his or her arguments.

In the case at bar, the prosecution heavily focused on proving the elements of deceit and fraud. On the other hand, the MOA and the terms of the loan were only tangentially discussed. Caspillo was not given the full opportunity to present all his monetary claims against the spouses Llonillo. In fact, the judgment failed to award Caspillo all damages that he would have been entitled to pursuant to the terms of the loan agreement.(awÞhi( The ponencia only awarded the principal amount of the loan, notwithstanding the fact that Caspillo was likewise entitled to the monthly rentals of Unit H, as interest. Moreover, in a civil action, Caspillo would have been allowed to file a claim for other damages aside from the amount owed him. Certainly, a civil action for collection of sum of money would have provided a better venue where the terms of the loan and other relevant details may be fully threshed out.

The En Banc Estafa case of People v Pantig27 and subsequent pronouncements, forbid the recovery of civil liability ex contractu in the same criminal proceeding

Interestingly, in a string of cases involving Estafa, a crime which necessarily includes other deceits, it was held that the action to recover civil liability in the same criminal proceeding strictly refers to civil liability ex delicto. It by no means, includes a civil liability arising from a different source of obligation, such as a contract. Where the civil liability is ex contractu, the court hearing the criminal case is bereft of authority to award damages.28

Notably, in Pantig,29 this Court sitting En Banc resolved the issue regarding the recovery of civil liability ex contractu in the same criminal trial which acquitted the accused. Finding that the civil liability did not arise from the crime but from a contract of loan, this Court strictly forbade the recovery of civil liability in the same criminal proceeding and thus ordered the filing of a separate civil action for the recovery of the amount owed:

The trial court found as a fact that the sum of ₱1,200, ordered to be paid in the judgment of acquittal, was received by the defendant-appellant as loan. This finding is inconsistent with the existence of the criminal act charged in the information. The liability of the defendant for the return of the amount so received arises from a civil contract, not from a criminal act, and may not be enforced in the criminal case.

The portion of the judgment appealed from, which orders the defendant-appellant to pay the sum of [PHP] 1,200 to the offended party, is hereby revoked, without prejudice to the filing of a civil action for the recovery of the said amount.30 (Emphasis supplied)

Applying the same precedent, People v. Singson,31 stringently held that when there is no proven deceit or fraud, there is no crime of estafa. Thus, any civil liability may be established in a separate civil case.

Following suit, Dy,32 ruled that without the element of misappropriation or conversion, the transaction between the parties was in reality a contract of loan. Hence, the civil liability arising from the loan partakes of a civil liability ex contractu and may not be recovered in the same criminal proceeding.33

Echoing the same pronouncement, Estate of Honorio Poblador, Jr. v. Manzano,34 held that absent the element of fraud, there could be no misappropriation or conversion to speak of that would justify the charge of Estafa. As such, there is no civil liability ex delicto.

In a similar vein, Spouses Ricardo and Carmelita Tayamen v. People35 enunciated that the civil liability which does not arise from the crime must be claimed in a separate civil action. The amount sought to be recovered, which was the consideration for the sale, may not be awarded in the criminal case where the elements of the crime were not duly proven.

Espousing the same view, Wong v. Wong,36 underscored that there could be no civil liability ex delicto in the absence of a crime. Correspondingly, without the crucial elements of the crime, civil liability may not be recovered in the same criminal case.

Indubitably, the aforementioned cases involved an acquittal for the criminal case of Estafa (which necessarily includes other deceits). Finding that the civil liability in said cases stemmed from a contract, this Court forbade recovery in the same criminal case. These pronouncements should be applied to the case at bar, which is on all fours with the cited cases.

All told, without the elements of other deceits, civil liability ex delicto cannot be awarded, as it cannot be sourced from something that does not exist. Equally important, in a criminal prosecution, the mighty powers and resources of the State are all stacked against the accused. To tilt the scales evenly, the Constitution affords the accused protection through the due process clause – a potent assurance to be notified and heard. These sacred rights cannot be conveniently brushed aside on the pretext of speed and convenience in the disposition of the case. Concededly, a separate civil proceeding for the recovery of civil liability ex contractu may entail more time, yet this precious time allows the accused to fully thresh out his or her defenses and avail of all legal remedies for his or her protection.

FOR THESE REASONS, I vote to delete the award of PHP 300,000.00 and order the civil liability arising from the loan contract to be resolved in the appropriate civil proceeding.