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Naya vs. Abing

*
G.R. No. 146770. February 27, 2003.

ORLANDO P. NAYA, petitioner, vs. SPS. ABRAHAM and

GUILLERMA ABING AND PEOPLE OF THE
PHILIPPINES, respondents.

Criminal Law; Estafa; Appeal; An appeal in a criminal

proceeding throws the whole case open for review and the appellate
court is mandated to correct any error in the appealed judgment.—
Prefatorily, case law has it that an appeal in a criminal
proceeding throws the whole case open for review and the
appellate court is mandated to correct any error in the appealed
judgment, whether this is assigned as an error or has not
assigned as error the issue of whether or not under the
Information petitioner was charged with and may be convicted of
estafa under Article 316, paragraph 2 of the Revised Penal Code.
Same; Same; The gravamen of the crime is the disposition of
legally encumbered real property by the offender under the express
representation that there is no encumbrance thereon.—The
gravamen of the crime is the disposition of legally encumbered
real property by the offender under the express representation that
there is no encumbrance thereon. Hence, for one to be criminally
liable for estafa under the law, the accused must make an express
representation in the deed of conveyance that the property sold or
disposed of is free from any encumbrance.
Same; Same; Elements.—The prosecution is burdened to
allege in the Information and prove the confluence of the following
essential elements of the crime for the accused to be criminally
liable for estafa under Article 316, paragraph 2 of the Revised
Penal Code: Elements: 1. That the thing disposed of be real
property. 2. That the offender knew that the real property was
encumbered, whether the encumbrance is recorded or not. 3. That
there must be express representation by the offender that the real
property is free from encumbrance. 4. That the act of disposing of
the real property be made to the damage of another.

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PETITION for review on certiorari of a decision of the

Court of Appeals.

The facts are stated in the opinion of the Court.

     Wilfredo M. Sentillas for petitioners.
     Pedro Leslie B. Salva for respondents.

______________

* SECOND DIVISION.

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Naya vs. Abing

CALLEJO, SR., J.:

Before us is a Petition for Review on Certiorari under Rule

45 of the 1997 Rules of Civil Procedure, as amended,
1
of the
decision2 rendered by the Court of Appeals affirming the
decision of the Regional Trial Court of Cebu City, Branch
15 convicting Orlando P. Naya of estafa under Article 316,
paragraph 2 of the Revised Penal Code.

The Antecedents

Orlando P. Naya was the owner in fee simple of a parcel of

residential land located in Talisay, Cebu province identified
as Lot 2049-B of the Tal-Ming Estate, with an area of 485
square meters covered by Transfer Certificate
3
of Title No.
65042 issued by the Register of Deeds.
On December 14, 1987, Orlando, as seller, and Abraham
and 4Guillerma Abing, as buyers, entered into a Contract to
Sell, two parcels of land with an area of 400 square meters
for the total price of Sixty Thousand Pesos (P60,000.00).
Under the terms of the Contract to Sell, Orlando, as seller,
agreed that—

(1) After the spouses Abing have paid the amount of

TWENTY THOUSAND PESOS (P20,000.00), the balance
of FORTY THOUSAND PESOS (P40,000.00) payable in
monthly installments of ONE THOUSAND FIFTEEN
AND 74/100 PESOS (P1,015.74), for five (5) years to start
on June 30, 1988 and for every 30th of the month
thereafter.
(2) He shall be at liberty to sell the lots to other persons if the
buyers, spouses Abing fail to make payment of any of the

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installments within sixty (60) days from its due date;

He also bound himself to execute a first deed of sale over

the said property and deliver title to the vendees over said
property free from encumbrance and liens upon full
payment of the purchase price of the property.

______________

1 Penned by Associate Justice Bernardo P. Abesamis, with Associate

Justices Eugenio S. Labitoria and Wenceslao I. Agnir, Jr., concurring.
2 Penned by Judge German G. Lee, Jr. (later appointed Associate
Justice of the Sandiganbayan).
3 Exhibit “D”.
4 Exhibit “A”.

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366 SUPREME COURT REPORTS ANNOTATED

Naya vs. Abing

(3) Upon full payment of purchase price, he shall deliver to

the buyer, spouses Abing, a final Deed of Sale and
Certificate of Title in their names free of encumbrance.

Guillerma Abing remitted to Orlando the amount of

P20,000.00 as downpayment and the amount of P2,000.00 a
month, even in excess of the monthly amount of P1,015.74
agreed upon in the Contract to Sell. The following monthly
installment payments were received by Orlando Naya and
his agent Loreta Bacaltos:

Exhibit Number Date Amount

     Exhibit “B” dated June 25, 1988 P 2,000.00
     Exhibit “B-2” dated July 30, 1988 2,000.00
     Exhibit “B-3” dated Sept. 3, 1988 2,000.00
     Exhibit “B-4” dated Oct. 1, 1988 2,000.00
     Exhibit “B-5” dated Nov. 5, 1988 2,000.00
     Exhibit “B-6” dated Dec. 3, 1988 2,000.00
     Exhibit “B-7” dated Jan. 7, 1989 2,000.00

Unknown to Guillerma Abing, Orlando Naya executed on

January 13, 1989 a Deed of Absolute Sale over Lot 2049-B
and his other lots in favor of William Po for the price of
P200,000.00, 5 receipt of which Orlando Naya
acknowledged. Orlando represented in said deed that he
was the lawful owner of the properties, free from all taxes
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and encumbrances and that the properties were

untenanted. Said deed was registered with the Register of
Deeds on December 5, 1989 and on said date, Transfer
Certificate of Title No. 67775 was issued by the Register of
Deeds in favor and under the name of William Po, as
vendee.
However, Orlando never told the Spouses of said sale to
William Po. Nevertheless, Guillerma Abing continued
remitting to Orlando amounts in partial payments of the
purchase price of the lots for which he issued receipts:

Exhibit “B-8” dated Jan. 23, 1989 5,000.00

Exhibit “B-9” dated April 3, 1989 4,000.00
Exhibit “B-10” dated June 3, 1989 2,000.00
Exhibit “B-11” dated June 23, 1989 2,000.00

______________

5 Exhibit “E”.

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VOL. 398, FEBRUARY 27, 2003 367

Naya vs. Abing

Exhibit “B-12” dated Sept. 1, 1989 4,000.00

Exhibit “B-13” dated Dec. 24, 1989 3,000.00
P34,000.00

Guillerma Abing had paid Orlando Naya the total amount

of Fifty-Four Thousand Pesos (P54,000.00) inclusive of the
Twenty Thousand Pesos (P20,000.00) which she had paid
upon the signing of the Contract to Sell.
On December 27, 1989, Orlando consented to the
construction by Abraham Abing, the husband of Guillerma
Abing, of a fence and a residential house or warehouse in
the subject lots. The Spouses purchased hollow blocks for
their fence for the price of P40,000.00.
The Spouses were flabbergasted when during the
construction of the fence, William Po evicted them. The
construction materials for the house of the couple remained
unused.
The Spouses Abing subsequently learned that Orlando,
on January 13, 1989, had sold the subject lots to William
Po for the amount of Two Hundred Thousand Pesos
(P200,000.00) and that the latter had6 already secured a
title over the property under his name.
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On February 28, 1992, Guillerma Abing executed an

affidavit and, through her counsel, filed a criminal-
complaint for estafa against Orlando and Loreta Bacaltos
with the Office of the Provincial Prosecutor.
On March 17, 1992, Loreta Bacaltos filed her counter-
affidavit alleging, inter alia, that she was not the proper
party liable to private respondent Abing as she was not the
owner of the subject property, and that she only acted as an
agent of seller Orlando Naya; more, she had no knowledge
of the properties covered by the Contract to Sell.
After the requisite preliminary investigation, an
Information was filed against Orlando with the Regional
Trial Court for estafa which reads:

“The undersigned accuses Orlando Naya of the crime of Estafa,

under Article 316, paragraph 2, of the Revised Penal Code,
committed as follows:

______________

6 Rollo, pp. 15-17.

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368 SUPREME COURT REPORTS ANNOTATED

Naya vs. Abing

That sometime in the month of November 1989, more or less, in

the Municipality of Talisay, Province of Cebu, Philippines, and
within the jurisdiction of this Honorable Court, the above-named
accused, with intent to defraud, knowing that Lot 2049-B (Lot 5
and 6) which is a portion of Lot No. 2049, under Transfer
Certificate of Title No. 65042, of a subdivision plan, located at
Tabunok, Talisay, Cebu, with a total area of 400 square meters,
were already encumbered, did then and there willfully, unlawfully
and feloniously sell, cede, transfer and convey or dispose of the
same real properties to Mr. William Po, to the damage and
prejudice of Guillerma Abing in the total amount of P92,000.00
Pesos, Philippine Currency.7
CONTRARY TO LAW.”

After the prosecution had adduced its testimonial evidence,

it filed on September 2, 1993 its Formal Offer of Evidence.
The accused did not offer any objection to the documentary
evidence of the prosecution. On February 4, 1994, the trial
court issued an order admitting all the documentary
evidence of the prosecution. The trial court set the case for
continuation of trial for Orlando Naya to adduce his

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evidence on March 23, 1994 at 8:30 a.m. However, on said

date and time, his counsel failed to appear. The trial court
issued an order declaring that accused had waived his right
to adduce evidence in his behalf.
On June 23, 1994, the trial court rendered judgment
finding the accused guilty beyond reasonable doubt of
estafa defined and penalized in Article 316, paragraph 2 of
the Revised Penal Code, the decretal portion of which
reads:

“WHEREFORE, in view of all the foregoing evidences, arguments,

and considerations, this court hereby finds the accused Orlando
Naya GUILTY beyond reasonable doubt of the crime of Estafa as
penalized under Art. 316 of the Revised Penal Code as he is
hereby sentenced to serve imprisonment of two (2) months and
one (1) day to four (4) months of arresto mayor in its minimum
and medium periods and to pay a fine of P92,000.00 and to
indemnify the offended party, Guillerma Abing the sum of
P92,000.00 representing the value of the land sold and to
reimburse the offended party by way of consequential damages
the sum of P40,000.00 and the hollow block fence that was
constructed by the complainant with the full consent and
authority of Orlando Naya, the accused herein. The accused is
also required to pay the amount of P50,000.00 in the concept of
moral damages to the offended party, Guillerma Abing and
P20,000.00 exemplary damages and attorney’s fees of P5,000.00
in addition to the

______________

7 Original Records, Criminal Case No. CBU-28824, p. 1.

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Naya vs. Abing

appearance fees of the lawyer of the accused after computing and

counting the same. 8
IT IS SO ORDERED.”

Petitioner appealed to the Court of Appeals which rendered

judgment affirming the decision of the trial court.
In his petition, he assails the decision of the trial court
contending that:

1) THE TRIAL COURT ERRED IN HOLDING THAT THE

CONVEYANCE EXECUTED BY THE ACCUSED IN
FAVOR OF WILLIAM PO CONSTITUTES THE CRIME

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OF ESTAFA AS AGAINST THE PRIVATE

COMPLAINANT.
2) THE TRIAL COURT ERRED IN CONVICTING THE
ACCUSED BASED ON9
THE EVIDENCE ADDUCED BY
THE PROSECUTION.

Prefatorily, case law has it that an appeal in a criminal

proceeding throws the whole case open for review and the
appellate court is mandated to correct any error in the
appealed judgment, whether this is assigned as an error or
has not assigned as error the issue of whether or not under
the Information petitioner was charged with and may be
convicted of estafa under Article 316, paragraph 2 of the
Revised Penal Code.
This Court will first consider and resolve said issue.
Section 14(2) of Article III of the 1987 Constitution
provides that an accused has the right to be informed of the
nature and cause of the accusation against him. Indeed,
Section 6, Rule 110 of the Revised Rules of Criminal
Procedure requires that the acts or omissions complained of
as constituting the offense must be alleged in the
Information. Section 8 of said rule provides that the
Information shall state the designation of the offense given
by the statute and aver the acts or omissions constituting
the offense. The real nature of the crime charged is
determined by the facts alleged in the Information and not
by the title or designation 10of the offense contained in the
caption of the Information. It is fundamental that every
element of which the offense is comprised must be alleged
in the Information. What facts and circumstances are
necessary to be

______________

8 Original Records, pp. 82-83.

9 Rollo, p. 9.
10 People v. Escosio, 220 SCRA 475 (1993).

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370 SUPREME COURT REPORTS ANNOTATED

Naya vs. Abing

alleged in the Information must be determined by reference

to the definition
11
and the essential elements of the specific
crimes.
Article 316, paragraph 2 of the Revised Penal Code
reads:
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Art. 316. Other forms of swindling.—The penalty of arresto mayor

in its minimum and medium periods and a fine of not less than
the value of the damage caused and not more than three times
such value, shall be imposed upon:
...
2. Any person who, knowing that the real property is
encumbered, shall dispose of the same, although such
encumbrance be not recorded;

The law was taken from Article 455 of the Spanish Penal
Code of 1850 which reads:

En la misma pena incurrirá el que dispusiere de una cosa como

libre, sabiendo que estaba gravada.

Although the words “como libre” meaning “free from

encumbrance” do not appear in the English text of the
Revised Penal Code, nonetheless, the same are deemed
incorporated in the Revised Penal Code. The gravamen of
the crime is the disposition of legally encumbered real
property by the offender under the express representation
that there is no encumbrance thereon. Hence, for one to be
criminally liable for estafa under the law, the accused must
make an express representation in the deed of conveyance
that the property sold or disposed of is free from any
encumbrance.
The prosecution is burdened to allege in the Information
and prove the confluence of the following essential
elements of the crime for the accused to be criminally liable
for estafa under Article 316, paragraph 2 of the Revised
Penal Code:

Elements:

1. That the thing disposed of be real property.

2. That the offender knew that the real property was
encumbered, whether the encumbrance is recorded or not.
3. That there must be express representation by the offender
that the real property is free from encumbrance.

______________

11 Balitaan v. Court of First Instance, et al., 115 SCRA 729 (1982).

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4. That the act of disposing

12
of the real property be made to
the damage of another.

However, there is no allegation in the Information that

petitioner expressly represented in the sale of the subject
property to William Po that the said property was free from
any encumbrance. Irrefragably, then, petitioner was not
charged with estafa under Article 316, paragraph 2 of the
Revised Penal Code. Hence, the trial court committed a
reversible error in finding petitioner guilty beyond
reasonable doubt of estafa under said provision and that
the Court of Appeals likewise erred in affirming the
decision of the trial court on appeal.
Petitioner avers that the Court of Appeals erred in
ordering him to pay the amount of P94,000.00 by way of
actual damages. He posits that he is not liable for moral
and exemplary damages and attorney’s fees.
We agree in part with petitioner. Notwithstanding the
reversal of his conviction for estafa, petitioner is
nevertheless liable to private respondents for their
payments of the subject lots in the total amount of
P54,000.00 and the value of hollow blocks used in the
construction of their fence in the amount of P40,000.00.
Petitioner is also liable to private respondents for moral
damages it appearing in the record that petitioner acted in
evident bad faith and succeeded in defrauding private
respondents. The latter purchased the subject lots and paid
the price therefor with the undertaking of petitioner that
upon payment in full of the purchase price of the property,
petitioner will execute the final Deed of Absolute Sale over
the property and cause the issuance under their names the
title over the subject property without any liens or
encumbrances. However, petitioner hoodwinked private
respondents and sold the property to William Po. Although
petitioner was no longer the owner of the property, he
continued receiving from private respondents their partial
payments for the property. Worse, petitioner even allowed
private respondents to cause the construction of a fence
around the perimeter of the property although he had
already sold the property to William Po. Fraud and bad
faith of petitioner having been proved by the prosecution,
petitioner is liable to private respondents for moral
damages in the amount of

______________

12 Reyes, Revised Penal Code, 1981 ed., Book II, p. 786.

372

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Naya vs. Abing

P40,000.00 13and for exemplary damages in the amount of

P20,000.00.
IN LIGHT OF ALL THE FOREGOING, the petition is
partially GRANTED. The decision of the Court of Appeals
affirming the decision of the Regional Trial Court of Cebu
City, Branch 15, convicting petitioner of estafa under
Article 316, paragraph 2 of the Revised Penal Code is
REVERSED. Petitioner is hereby ordered to pay to private
respondents the amount of P94,000.00 as actual damages,
the amount of P40,000.00 as moral damages, P20,000.00 as
exemplary damages and P20,000.00 as attorney’s fees.
Costs against petitioner.
SO ORDERED.

          Bellosillo (Chairman), Mendoza, Quisumbing and

Austria-Martinez, JJ., concur.

Petition partially granted.

Note.—Settled it is in our jurisprudence that there can

be no estafa through negligence. (Lim vs. Court of Appeals,
271 SCRA 12 [1997])

——o0o——

______________

13 Bart Osmeña & Associates v. Court of Appeals, et al., 120 SCRA 395
(1983).

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