SECOND DIVISION

[G.R. No. 183345. September 17, 2014.]

MA. GRACIA HAO and DANNY HAO, petitioners, vs. PEOPLE OF

THE PHILIPPINES, respondent.

DECISION

BRION, J : p

Before this Court is the petition for review on certiorari 1 under Rule 45 of the
Rules of Court, filed by Ma. Gracia Hao and Danny Hao (petitioners). They seek
the reversal of the Court of Appeals' (CA) decision 2 dated February 28, 2006 and
resolution 3 dated June 13, 2008 in CA-G.R. SP No. 86289. These CA rulings
affirmed the February 26, 2004 4 and July 26, 2004 5 orders of the Regional Trial
Court (RTC) of Manila, which respectively denied the petitioners' motion to defer
arraignment and motion to lift warrant of arrest. 6
Factual Antecedents
On July 11, 2003 private complainant Manuel Dy y Awiten (Dy) filed a criminal
complaint against the petitioners and Victor Ngo (Ngo) for syndicated estafa
penalized under Article 315 (2) (a) of the Revised Penal Code (RPC), as amended,
in relation with Presidential Decree (PD) No. 1689. 7
Dy alleged that he was a long-time client of Asiatrust Bank, Binondo Branch
where Ngo was the manager. Because of their good business relationship, Dy
took Ngo's advice to deposit his money in an investment house that will give a
higher rate of return. Ngo then introduced him to Ma. Gracia Hao (Gracia), also
known as Mina Tan Hao, who presented herself as an officer of various reputable
companies and an incorporator of State Resources Development Corporation
(State Resources), the recommended company that can give Dy his higher
investment return. 8
Relying on Ngo and Gracia's assurances, Dy initially invested in State Resources
the approximate amount of Ten Million Pesos (P10,000,000.00). This initial
investment earned the promised interests, leading Dy, at the urging of Gracia, to
increase his investment to almost One Hundred Million Pesos (P100,000,000.00).
Dy increased his investments through several checks he issued in the name of
State Resources. 9 In return, Gracia also issued several checks to Dy representing
his earnings for his investment. Gracia issued checks in the total amount of One
Hundred Fourteen Million, Two Hundred Eighty Six Thousand, Eighty Six Pesos
and Fourteen Centavos (P114,286,086.14). All these checks 10 were
subsequently dishonored when Dy deposited them.
Dy sought the assistance of Ngo for the recovery of the amount of the
dishonored checks. Ngo promised assistance, but after a few months, Dy found
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 out that Ngo already resigned from Asiatrust Bank and could no longer be
located. Hence, he confronted Gracia regarding the dishonored checks. He
eventually learned that Gracia invested his money in the construction and realty
business of Gracia's husband, Danny Hao (Danny). Despite their promises to pay,
the petitioners never returned Dy's money. ScEaAD

On July 17, 2003, Dy filed a supplemental affidavit to include in the criminal

complaint Chester De Joya, Allan Roxas, Samantha Roxas, Geraldine Chiong, and
Lyn Ansuas — all incorporators and/or directors of State Resources. 11
On the basis of Dy's complaint 12 and supplemental affidavit, 13 the public
prosecutor filed an information 14 for syndicated estafa against the petitioners
and their six co-accused. The case was docketed as Criminal Case No. 03-219952
and was raffled to respondent RTC of Manila, Branch 40.
Judge Placido Marquez issued warrants of arrest against the petitioners and the
other accused. Consequently, petitioners immediately filed a motion to defer
arraignment and motion to lift warrant of arrest. In their twin motions, they
invoked the absence of probable cause against them and the pendency of their
petition for review with the Department of Justice (DOJ). 15
In its February 26, 2004 order, the trial court denied the petitioners' twin
motions. 16 The petitioners moved for reconsideration but the trial court also
denied this in its July 26, 2004 order.
Consequently, the petitioners filed a petition for certiorari under Rule 65 of the
Rules of Court with the CA.
The CA's Ruling
The CA affirmed the denial of the petitioners' motion to defer arraignment and
motion to lift warrant of arrest.
In determining probable cause for the issuance of a warrant of arrest, a judge is
mandated to personally evaluate the resolution of the prosecutor and its
supporting evidence. 17 The CA noted that Judge Marquez only issued the
warrants of arrest after his personal examination of the facts and circumstances
of the case. Since the judge complied with the Rules, the CA concluded that no
grave abuse of discretion could be attributed to him. 18
In its decision, however, the CA opined that the evidence on record and the
assertions in Dy's affidavits only show probable cause for the crime of simple
estafa, not syndicated estafa. Under PD No. 1689, in order for syndicated estafa
to exist, the swindling must have been committed by five or more persons, and
the fraud must be against the general public or at least a group of persons. In his
complaint-affidavit, Dy merely stated that he relied on the petitioners' false
representations and was defrauded into parting with his money, causing him
damage. 19 Since there was no evidence that State Resources was formed to
defraud the public in general or that it was used to solicit money from other
persons aside from Dy, then the offense charged should only be for simple estafa.
20

Nevertheless, the CA found that the trial court did not commit grave abuse of
discretion in issuing the warrants of arrest against the petitioners as there was
still probable cause to believe that the petitioners committed the crime of simple
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 still probable cause to believe that the petitioners committed the crime of simple
estafa. 21
The Petition
The petitioners submit that an examination of Dy's affidavits shows
inconsistencies in his cited factual circumstances. These inconsistencies,
according to the petitioners, negate the existence of probable cause against them
for the crime charged.
The petitioners also contend that it was only Ngo who enticed Dy to invest his
money. As early as August 1995, State Resources had already been dissolved,
thus negating the assertion that Dy advanced funds for this corporation. 22 They
question the fact that it took Dy almost five years to file his complaint despite
his allegation that he lost almost P100,000,000.00. 23
Lastly, the petitioners claim that the warrants of arrest issued against them were
null and void. Contrary to the trial court's findings, the CA noted in the body of
its decision, that PD 1689 was inapplicable to their case. There was no evidence
to show that State Resources was formed to solicit funds not only from Dy but
also from the general public. Since simple estafa and syndicated estafa are two
distinct offenses, then the warrants of arrest issued to petitioners were
erroneous because these warrants pertained to two different crimes. 24
The Court's Ruling
We resolve to DENY the petition.
Procedural Consideration
We note that the present petition questions the CA's decision and resolution on
the petition for certiorari the petitioners filed with that court. At the CA, the
petitioners imputed grave abuse of discretion against the trial court for the denial
of their twin motions to defer arraignment and to lift warrant of arrest.
This situation is similar to the procedural issue we addressed in the case of
Montoya v. Transmed Manila Corporation 25 where we faced the question of how
to review a Rule 45 petition before us, a CA decision made under Rule 65. We
clarified in this cited case the kind of review that this Court should undertake
given the distinctions between the two remedies. In Rule 45, we consider the
correctness of the decision made by an inferior court. In contrast, a Rule 65
review focuses on jurisdictional errors.
As in Montoya, we need to scrutinize the CA decision in the same context that
the petition for certiorari it ruled upon was presented to it. Thus, we need to
examine the CA decision from the prism of whether it correctly determined
the presence or absence of grave abuse of discretion on the part of the
trial court and not on the basis of whether the trial court's denial of
petitioners' motions was strictly legally correct. In question form, the
question to ask is: did the CA correctly determine whether the trial court
committed grave abuse of discretion in denying petitioners' motions to defer
arraignment and lift warrant of arrest? DCIEac

Probable Cause for the Issuance of

a Warrant of Arrest
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 Under the Constitution 26 and the Revised Rules of Criminal Procedure, 27 a judge
is mandated to personally determine the existence of probable cause after his
personal evaluation of the prosecutor's resolution and the supporting evidence
for the crime charged. These provisions command the judge to refrain from
malting a mindless acquiescence to the prosecutor's findings and to conduct his
own examination of the facts and circumstances presented by both parties.
Section 5 (a) of Rule 112, grants the trial court three options upon the filing of
the criminal complaint or information. He may: a) dismiss the case if the
evidence on record clearly failed to establish probable cause; b) issue a warrant of
arrest if it finds probable cause; or c) order the prosecutor to present additional
evidence within five days from notice in case of doubt on the existence of
probable cause. 28
In the present case, the trial court chose to issue warrants of arrest to the
petitioners and their co-accused. To be valid, these warrants must have been
issued after compliance with the requirement that probable cause be personally
determined by the judge. Notably at this stage, the judge is tasked to merely
determine the probability, not the certainty, of guilt of the accused . In
doing so, he need not conduct a de novo hearing; he only needs to personally
review the prosecutor's initial determination and see if it is supported by
substantial evidence. 29
The records showed that Judge Marquez made a personal determination of the
existence of probable cause to support the issuance of the warrants. The
petitioners, in fact, did not present any evidence to controvert this. As the trial
court ruled in its February 26, 2004 order:
The non-arrest of all the accused or their refusal to surrender practically
resulted in the suspension of arraignment exceeding the sixty (60) days
counted from the filing of co-accused De Joya's motions, which may be
considered a petition for review, and that of co-accused Spouses Hao's
own petition for review. This is not to mention the delay in the resolution
by the Department of Justice. On the other hand, co-accused De
Joya's motion to determine probable cause and co-accused
Spouses Hao's motion to lift warrant of arrest have been
rendered moot and academic with the issuance of warrants of
arrest by this presiding judge after his personal examination of
the facts and circumstances strong enough in themselves to
support the belief that they are guilty of the crime that in fact
happened. 30 [Emphasis ours]

Under this situation, we conclude that Judge Marquez did not arbitrarily issue the
warrants of arrest against the petitioners. As stated by him, the warrants were
only issued after his personal evaluation or the factual circumstances that led
him to believe that there was probable cause to apprehend the petitioners for
their commission of a criminal offense.
Distinction between Executive and
Judicial Determination of Probable
Cause
In a criminal prosecution, probable cause is determined at two stages. The first is
at the executive level, where determination is made by the prosecutor during the
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 preliminary investigation, before the filing of the criminal information. The
second is at the judicial level, undertaken by the judge before the issuance of a
warrant of arrest.
In the case at hand, the question before us relates to the judicial determination
of probable cause. In order to properly resolve if the CA erred in affirming the
trial court's issuance of the warrants of arrest against the petitioners, it is
necessary to scrutinize the crime of estafa, whether committed as a simple
offense or through a syndicate.
The crime of swindling or estafa is covered by Articles 315-316 of the RPC. In
these provisions, the different modes by which estafa may be committed, as well
as the corresponding penalties for each are outlined. One of these modes is
estafa by means of deceit. Article 315 (2) (a) of the RPC defines how this
particular crime is perpetrated:
2. By means of any of the following false pretenses or fraudulent acts
executed prior to or simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess
power, influence, qualifications, property, credit, agency,
business or imaginary transactions, or by means of other
similar deceits.

Under this provision, estafa has the following elements: 1) the existence of a
false pretense, fraudulent act or fraudulent means; 2) the execution of the false
pretense, fraudulent act or fraudulent means prior to or simultaneously with the
commission of the fraud; 3) the reliance by the offended party on the false
pretense, fraudulent act or fraudulent means, which induced him to part with his
money or property; and 4) as a result, the offended party suffered damage. 31
As Dy alleged in his complaint-affidavit, Ngo and Gracia induced him to invest
with State Resources and promised him a higher rate of return. 32 Because of his
good business relationship with Ngo and relying on Gracia's attractive financial
representations, Dy initially invested the approximate amount of
P10,000,000.00.
This first investment earned profits. Thus, Dy was enticed by Gracia to invest
more so that he eventually advanced almost P100,000,000.00 33 with State
Resources. Gracia's succeeding checks representing the earnings of his
investments, however, were all dishonored upon deposit. 34 He subsequently
learned that the petitioners used his money for Danny's construction and realty
business. 35 Despite repeated demands and the petitioners' constant assurances
to pay, they never returned Dy's invested money and its supposed earnings. 36
These cited factual circumstances show the elements of estafa by means of
deceit. The petitioners induced Dy to invest in State Resources promising higher
returns. But unknown to Dy, what occurred was merely a ruse to secure his
money to be used in Danny's construction and realty business. The petitioners'
deceit became more blatant when they admitted in their petition that as early as
August 1995, State Resources had already been dissolved. 37 This admission
strengthens the conclusion that the petitioners misrepresented facts regarding
themselves and State Resources in order to persuade Dy to part with his money
for investment with an inexistent corporation.
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 These circumstances all serve as indicators of the petitioners' deceit. "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." 38
Thus, had it not been for the petitioners' false representations and promises, Dy
would not have placed his money in State Resources, to his damage. These
allegations cannot but lead us to the conclusion that probable cause existed as
basis to arrest the petitioners for the crime of estafa by means of deceit.
HADTEC

We now address the issue of whether estafa in this case was committed through
a syndicate.
Under Section 1 of PD No. 1689, 39 there is syndicated estafa if the following
elements are present: 1) estafa or other forms of swindling as defined in Articles
315 and 316 of the RPC was committed; 2) the estafa or swindling was
committed by a syndicate of five or more persons; and 3) the fraud resulted in
the misappropriation of moneys contributed by stockholders, or members of rural
banks, cooperatives, "samahang nayon[s]," or farmers associations or of funds
solicited by corporations/associations from the general public. 40
The factual circumstances of the present case show that the first and second
elements of syndicated estafa are present; there is probable cause for violation of
Article 315 (2) (a) of the RPC against the petitioners. Moreover, in Dy's
supplemental complaint-affidavit, he alleged that the fraud perpetrated against
him was committed, not only by Ngo and the petitioners, but also by the other
officers and directors of State Resources. The number of the accused who
allegedly participated in defrauding Dy exceeded five, thus satisfying the
requirement for the existence of a syndicate.
However, the third element of the crime is patently lacking. The funds
fraudulently solicited by the corporation must come from the general public. In
the present case, no evidence was presented to show that aside from Dy, the
petitioners, through State Resources, also sought investments from other people.
Dy had no co-complainants alleging that they were also deceived to entrust their
money to State Resources. The general public element was not complied with.
Thus, no syndicated estafa allegedly took place, only simple estafa by means of
deceit.
Despite this conclusion, we still hold that the CA did not err in affirming the trial
court's denial of the petitioners' motion to lift warrant of arrest.
A warrant of arrest should be issued if the judge after personal evaluation of the
facts and circumstances is convinced that probable cause exists that an offense
was committed.
Probable cause for the issuance of a warrant of arrest is the existence of such
facts and circumstances that would lead a reasonably discreet and prudent
person to believe that an offense was committed by the person sought to be
arrested. 41 This must be distinguished from the prosecutor's finding of probable
cause which is for the filing of the proper criminal information. Probable cause for
warrant of arrest is determined to address the necessity of placing the accused
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 under custody in order not to frustrate the ends of justice. 42
In People v. Castillo and Mejia, 43 we explained the distinction between the two
kinds of probable cause determination:
There are two kinds of determination of probable cause: executive and
judicial. The executive determination of probable cause is one made
during preliminary investigation. It is a function that properly
pertains to the public prosecutor who is given a broad
discretion to determine whether probable cause exists and to
charge those whom he believes to have committed the crime
as defined by law and thus should be held for trial. Otherwise
stated, such official has the quasi-judicial authority to determine whether
or not a criminal case must be filed in court. Whether or not that
function has been correctly discharged by the public prosecutor, i.e.,
whether or not he has made a correct ascertainment of the existence
of probable cause in a case, is a matter that the trial court itself does
not and may not be compelled to pass upon.
The judicial determination of probable cause, on the other
hand, is one made by the judge to ascertain whether a
warrant of arrest should be issued against the accused. The
judge must satisfy himself that based on the evidence submitted, there
is necessity for placing the accused under custody in order not to
frustrate the ends of justice. If the judge finds no probable cause, the
judge cannot be forced to issue the arrest warrant. 44 [Emphasis ours]

With our conclusion that probable cause existed for the crime of simple estafa
and that the petitioners have probably committed it, it follows that the issuance
of the warrants of arrest against the petitioners remains to be valid and proper.
To allow them to go scot-free would defeat rather than promote the purpose of a
warrant of arrest, which is to put the accused in the court's custody to avoid his
flight from the clutches of justice. AHcCDI

Moreover, we note that simple estafa and syndicated estafa are not two entirely
different crimes. Simple estafa is a crime necessarily included in syndicated
estafa. An offense is necessarily included in another offense when the essential
ingredients of the former constitute or form a part of those constituting the
latter. 45
Under this legal situation, only a formal amendment of the filed information
under Section 14, Rule 110 of the Rules of Court 46 is necessary; the warrants of
arrest issued against the petitioners should not be nullified since probable cause
exists for simple estafa.
Suspension of Arraignment
Under Section 11 (c), Rule 116 of the Rules of Court, an arraignment may be
suspended if there is a petition for review of the resolution of the prosecutor
pending at either the DOJ, or the Office of the President. However, such period of
suspension should not exceed sixty (60) days counted from the filing of
the petition with the reviewing office.
As the petitioners alleged, they filed a petition for review with the DOJ on
November 21, 2003. Since this petition had not been resolved yet, they claimed
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 that their arraignment should be suspended indefinitely.
We emphasize that the right of an accused to have his arraignment suspended is
not an unqualified right. In Spouses Trinidad v. Ang, 47 we explained that while
the pendency of a petition for review is a ground for suspension of the
arraignment, the Rules limit the deferment of the arraignment to a period of 60
days reckoned from the filing of the petition with the reviewing office. It follows,
therefore, that after the expiration of the 60-day period, the trial court is
bound to arraign the accused or to deny the motion to defer
arraignment. 48
As the trial court found in its February 26, 2004 order, the DOJ's delay in
resolving the petitioners' petition for review had already exceeded 60 days. Since
the suspension of the petitioners' arraignment was already beyond the period
allowed by the Rules, the petitioners' motion to suspend completely lacks any
legal basis.
As a final note, we observe that the resolution of this case had long been delayed
because of the petitioners' refusal to submit to the trial court's jurisdiction and
their erroneous invocation of the Rules in their favor. As there is probable cause
for the petitioners' commission of a crime, their arrest and arraignment should
now ensue so that this case may properly proceed to trial, where the merits of
both the parties' evidence and allegations may be weighed.
WHEREFORE, premises considered, we hereby DENY the petition and AFFIRM
WITH MODIFICATION the February 28, 2006 decision and June 13, 2008
resolution of the Court of Appeals in CA-G.R. SP No. 86289. We hereby order that
petitioners Ma. Gracia Hao and Danny Hao be charged for simple estafa under
Article 315 (2) (a) of the Revised Penal Code, as amended and be arraigned for
this charge. The warrants of arrest issued stand.
SO ORDERED.
Carpio, Del Castillo, Villarama, Jr. * and Leonen, JJ., concur.
Footnotes
* Designated as Acting Member in lieu of Associate Justice Jose C. Mendoza, per
Special Order No. 1767 dated August 27, 2014.

1. Rollo, pp. 3-41.

2. Penned by Associate Justice Amelita G. Tolentino, and concurred in by Associate
Justices Portia Aliño Hormachuelos and Vicente S.E. Veloso; id. at 45-59.

3. Id. at 61-63.
4. Id. at 172-176.
5. Id. at 186-187.
6. Id. at 160-171.

7. Increasing the Penalty for Certain Forms of Swindling or Estafa.

8. Rollo, p. 64.

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 9. Id. at 68-70.
10. Id. at 71-84.
11. Id. at 87.

12. Id. at 64-66.

13. Id. at 87-90.
14. Id. at 157-159.
15. Id. at 47.
16. Id. at 48.

17. Id.
18. Id. at 51.
19. Id. at 55-56.
20. Id. at 58.

21. Id. at 50.

22. Id. at 29-30.
23. Id. at 36.
24. Id. at 37-40.
25. G.R. No. 183329, August 27, 2009, 597 SCRA 334.

26. Article III, Section 2. The right of the people to be secure in their persons, houses,
papers, and effects against unreasonable searches and seizures of whatever
nature and for any purpose shall be inviolable, and no search warrant or
warrant of arrest shall issue except upon probable cause to be determined
personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the
place to be searched and the persons or things to be seized.
27. Rule 112, Section 5. When warrant of arrest may issue. — (a) By the Regional
Trial Court. — Within ten (10) days from the filing of the complaint or
information, the judge shall personally evaluate the resolution of the prosecutor
and its supporting evidence. He may immediately dismiss the case if the
evidence on record clearly fails to establish probable cause. If he finds probable
cause, he shall issue a warrant of arrest, or a commitment order if the accused
has already been arrested pursuant to a warrant issued by the judge who
conducted the preliminary investigation or when the complaint or information
was filed pursuant to section 6 of this Rule. In case of doubt on the existence of
probable cause, the judge may order the prosecutor to present additional
evidence within five (5) days from notice and the issue must be resolved by the
court within thirty (30) days from the filing of the complaint or information.
28. People v. Hon. Dela Torre-Yadao, G.R. Nos. 162144-54, November 13, 2012, 685
SCRA 264, 287.
29. People v. CA, Cerbo and Cerbo, G.R. No. 126005, January 21, 1999, 301 SCRA
475, 486.
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 30. Rollo, p. 175.
31. RCL Feeders Pte., Ltd. v. Hon. Perez, 487 Phil. 211, 220-221 (2004).

32. Rollo, p. 64.

33. Id.
34. Id.
35. Id. at 65.
36. Id.

37. Id. at 30.

38. Galvez and Guy v. Hon. Court of Appeals , G.R. Nos. 187919, 187979, 188030,
April 25, 2012, 671 SCRA 222, 232.
39. Section 1. Any person or persons who shall commit estafa or other forms of
swindling as defined in Article 315 and 316 of the Revised Penal Code, as
amended, shall be punished by life imprisonment to death if the swindling
(estafa) is committed by a syndicate consisting of five or more persons formed
with the intention of carrying out the unlawful or illegal act, transaction,
enterprise or scheme, and the defraudation results in the misappropriation of
money contributed by stockholders, or members of rural banks, cooperative,
"samahang nayon(s)", or farmers association, or of funds solicited by
corporations/associations from the general public.
40. People v. Balasa, 356 Phil. 362, 395-396 (1998).
41. Allado v. Diokno, G.R. No. 113630, May 5, 1994, 232 SCRA 192, 199-200.
42. Mendoza v. People, G.R. No. 197293, April 21, 2014.
43. G.R. No. 171188, June 19, 2009, 590 SCRA 95.

44. Id. at 105-106.

45. Ssgt. Pacoy v. Hon. Cajigal, 560 Phil. 598, 609 (2007).
46. Section 14. Amendment or substitution. — A complaint or information may be
amended, in form or in substance, without leave of court, at any time before
the accused enters his plea. After the plea and during the trial, a formal
amendment may only be made with leave of court and when it can be done
without causing prejudice to the rights of the accused.
However, any amendment before plea, which downgrades the nature of the offense
charged in or excludes any accused from the complaint or information, can be
made only upon motion by the prosecutor, with notice to the offended party
and with leave of court. The court shall state its reasons in resolving the motion
and copies of its order shall be furnished all parties, especially the offended
party. (n)
If it appears at anytime before judgment that a mistake has been made in charging
the proper offense, the court shall dismiss the original complaint or information
upon the filing of a new one charging the proper offense in accordance with
section 19, Rule 119, provided the accused would not be placed in double
jeopardy. The court may require the witnesses to give bail for their appearance
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 at the trial. (14a)
47. G.R. No. 192898, January 31, 2011, 641 SCRA 214.
48. Id. at 218.

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