Today is Tuesday, September 08, 2020

Constitution Statutes Executive Issuances Judicial Issuances Other Issuances Jurisprudence International Legal Resources AUSL Exclusive

SECOND DIVISION

August 16, 2017

G.R. No. 217777

PRISCILLA Z. ORBE, Petitioner,

vs.
LEONORA O. MIARAL,, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for review on certiorari1 under Rule 45 of the Rules of Court seeks to annul the 24 September 2014
Decision2 and the 24 March 2015 Resolution3 of the Court of Appeals in CA-G.R. SP No. 134555, which annulled
and set aside the 27 August 20134 and 7 January 20145 Orders of the Regional Trial Court (RTC) of Quezon City,
Branch 104.

The RTC Orders denied the Motion to Withdraw Information6 for Estafa filed by Quezon City Prosecutor Donald T.
Lee in Criminal Case Q- 12-174206, entitled People of the Philippines v. Leonora O. Miaral, et al.

The Facts

On 6 March 1996, Leonora O. Miaral (respondent) agreed to engage in the garment exportation business with her
sister, Priscilla Z. Orbe (petitioner). They executed a partnership agreement7 where they agreed to contribute Two
Hundred Fifty Thousand Pesos (₱250,000.00) each to Toppy Co., Inc. and Miaral Enterprises, and to equally divide
the profits they may earn. The partnership agreement reads:

Agreement

Agreement is executed [on the] 6111 day of March 1996 by:

Mrs. Nora 0. Miaral

11-0 Legaspi Towers, R[o]xas Blvd., Mla.
as (Party [A])

and Mrs. Priscilla Orbe of No._, Villa

Verde Subd., Novaliches, Quezon City
as (Party B).

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 1 of 9
 Both parties agreed on the ff:

Both parties A & B shall invest ₱250,000.00 each in cash & or goods into a buying & selling of stock
lots of garments to be exported to the United States particularly in Los Angeles, California. Authorized
purchaser may be Party A or B;

That the exportation of garments shall be done by Toppy Co., Inc. using Toppy’s available quota;

That the importation of garments shall be done by Miaral Enterprises in U.S.A.

That whatever income in sales both retail & wholesale shall be divided into equal share after deducting
all expenses in export & import including taxes & sea/air freight expenses in connection with the buying
and selling of stocks & garments.

That this Contract is renewable yearly as both parties may wish.

Conforme:

(Sgd.) (Sgd.)
Party A Party B

Signed in the presence of

Petitioner initially invested the amount of One Hundred Eighty-Three Thousand Nine Hundred Ninety-Nine Pesos
(₱183,999.00).8 She subsequently tendered the amount of Twenty Thousand Pesos (₱20,000.00) for the payment
of salaries of the workers at the factory.9

On one trip to the United States of America in April of 1996, respondent told petitioner that petitioner could join
respondent, her daughter Anne Kristine, and her granddaughter Ara in the trip to the United States. Respondent
convinced petitioner to pay for the plane tickets of respondent, Anne Kristine and Ara amounting to Two Thousand
Seventy One Dollars (US$2,071.00) with a promise to pay petitioner once they arrive in the United States.10

Upon arrival, respondent issued three (3) checks drawn in a bank in the United States as payment. However, one of
the checks was dishonored for having been drawn against insufficient funds.11 Petitioner likewise discovered that
there was no exportation of garments to the United States or any other transactions in the United States that took
place.

Petitioner demanded from respondent and Anne Kristine the total payment of Two Hundred Three Thousand Nine
Hundred Ninety-Nine Pesos (₱203,999.00) and One Thousand Dollars (US$1,000.00). Despite demands,
respondent and Anne Kristine failed to return the money.12

On 7 February 2011, petitioner filed a complaint13 for estafa against respondent and Anne Kristine before the Office
of the City Prosecutor (OCP) of Quezon City.

In their counter-affidavit,14 respondent and Anne Kristine denied petitioner's allegations and claimed, among others,
that the partnership agreement they entered into rules out a successful prosecution for estafa. They also claimed
that the action had already prescribed since the complaint was filed 15 years after the agreement. They contended
that it was petitioner who owed them the amount of Two Hundred Seven Thousand Eighty-Seven Pesos and Sixty-
Five Centavos (₱207,087.65) because she issued several checks in the name of respondent and Anne Kristine.
Lastly, they alleged that Anne Kristine could not be held liable because she was merely acting under her mother's
direction.

In her reply-affidavit,15 petitioner claimed that the twenty-four (24) checks amounting to Two Hundred Seven
Thousand Eighty-Seven Pesos and Sixty-Five Centavos (₱207,087.65) were only borrowed from her as an
accommodation party, and that it was respondent who ordered her to close her account with the Republic Planters

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 2 of 9
 Bank.

The OCP of Quezon City issued a Resolution dated 15 July 2011,16 the dispositive portion of which reads:

WHEREFORE, it is respectfully recommended that, upon approval of this Resolution, the attached Information for
Estafa under Article 315, paragraph 2(a) of the Revised Penal Code be filed against respondents Leonora O. Miaral
and Anne Kristine O. Miaral.17

Respondent and Anne Kristine filed a Motion for Reconsideration with Motion for Inhibition18 dated 27 January 2012,
on the ground that petitioner failed to establish the elements of the crime charged. Subsequently, they filed a Motion
to Suspend Proceedings and to Lift/Recall Warrant of Arrest19 on 14 February 2012.

On 10 August 2012, the OCP of Quezon. City issued a Resolution resolving the Motion for Reconsideration with
Motion for Inhibition filed by respondent and Anne Kristine, assailing the 15 July 2011 Resolution, the dispositive
portion of which reads:

Premises considered, the resolution dated July 15, 2011 is hereby set aside on the ground that the transaction
between the parties is civil in nature. The attached Motion to Withdraw Information against movants in Crim. Case
No. Q-12-174206 is to be filed in court for the purpose.20

Accordingly, the City Prosecutor filed with the RTC a Motion to Withdraw Information.21 On 27 August 2013, the RTC
issued an Order22 denying the Motion to Withdraw Information, and directing the arraignment of respondent and
Anne Kristine.

On 14 October 2013, respondent and Anne Kristine moved for the reconsideration of said Order.23 On 30 October
2013, petitioner filed her corresponding comment,24 contending that the alleged partnership entered into by the
parties merely existed on paper. In fact, respondent and Anne Kristine deceived her into contributing substantial
sums of money for a sham investment. The Motion for Reconsideration was denied by the RTC in its Order dated 7
January 2014.25

The Ruling of the Court of Appeals

On 25 March 2014, respondent filed with the Court of Appeals a Petition for Certiorari26 under Rule 65 of the Rules
of Court, assailing the Orders of the RTC dated 27 August 2013 and 7 January 2014. In its Decision27 dated 24
September 2014, the Court of Appeals granted the petition, and reversed and set aside the assailed Orders of the
RTC. It further directed the RTC to issue an order for the withdrawal of the Information for estafa against respondent
and Anne Kristine.28

Petitioner filed a Motion for Reconsideration29 dated 18 October 2014 which was denied by the Court of Appeals on
24 March 2015.30

Hence, this petition.

The Issues

Petitioner presents the following issues in this petition:

1. Whether the Court of Appeals committed reversible error in ruling that the RTC committed grave abuse of
discretion amounting to lack or excess of jurisdiction;

2. Whether the Court of Appeals committed reversible error in reversing and setting aside the 27 August 2013 and 7
January 2014 Orders of the RTC, and in directing the issuance of an Order for the Withdrawal of the Information for
estafa against respondent and Anne Kristine; and

3. Whether the action for estafa penalized under Article 315 2(a) of the Revised Penal Code has been barred by
prescription.

The Ruling

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 3 of 9
 The petition is meritorious.

The Court of Appeals erred in overturning

the Orders of the RTC and in ruling that the
RTC gravely abused its discretion when it
denied the Motion to Withdraw Information.

Under Section 5, Rule 110 of the Rules of Court, all criminal actions commenced by a complaint or information shall
be prosecuted under the direction and control of the prosecutor. As the representative of the State, the public
prosecutor determines in a preliminary investigation whether there is probable cause that the accused committed a
crime.31 Probable cause is defined as "such facts and circumstances that will engender a well-founded belief that a
crime has been committed and that respondent is probably guilty thereof, and should be held for trial."32

The general rule is that in the conduct of a preliminary investigation, the prosecutor is given a wide latitude of
discretion to determine what constitutes sufficient evidence as will establish probable cause.33 However, when the
respondent establishes that the prosecutor committed grave abuse of discretion amounting to lack or excess of
jurisdiction in determining whether there is probable cause, the courts may interfere. Under the doctrine of
separation of powers, the courts have no right to decide matters where full discretionary authority has been
delegated to the Executive Branch, or to substitute their own judgements for that of the. Executive Branch, in the
absence of grave abuse of discretion.34 The abuse of discretion must be "so patent and gross as to amount to an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law,
such as where the power is exercised in an arbitrary or despotic manner by reason of passion or hostility."35

In this case, the OCP found that no probable cause existed against respondent and Anne Kristine for the
commission of the crime of estafa. In its Resolution36 dated 10 August 2012, relying mainly on the case of United
States v. Clarin,37 the OCP found that there was a partnership agreement between the parties, thus resolving that
the failure of a partner to account for partnership funds may only give rise to a civil obligation, not a criminal case for
estafa. The OCP held:

After a careful and more circumspect evaluation of the evidence on record in relation to the issues in the Motion for
Reconsideration, provisions of law involved and pertinent jurisprudence on the matter, we find the existence of a
partnership agreement between complainant and her sister, respondent Leonora O. Miaral to have been duly
established. The Agreement signed by them on March 6, 1996 clearly speaks for itself, among others a
₱250,000.00 investment each with equal profit sharing minus all expenses. It also defined in unequivocal terms the
buy and sell business, exporting of garments to be undertaken by respondent Leonora Miaral’s Toppy Co. Inc. and
importation of garments by Miaral Enterprises in the United States.

Such being the case, Estafa either by means of deceit or misappropriation will not lie against respondents, because
"partners are not liable for estafa of money or property received for the partnership when the business commenced
and profits accrued." (U.S. vs. Clarin, 17 P[h]il. 85). It was further held in said case that "when two or more persons
bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits
among themselves, a contract is formed which is a partnership."

Furthermore, "failure of a partner to account for partnership funds may give rise to a civil obligation only not estafa."
(People vs. Alegre, Jr., C.A. 48 O.G. 5341) x x x.38

We disagree with the ruling of the Court of Appeals when it sustained the OCP on the issue of whether there is
probable cause to file an Information. The OCP was in the best position to determine whether or not there was
probable cause that the crime of estafa was committed. However, the OCP erred gravely, amounting to grave abuse
of discretion, when it applied United States v. Clarin39 as basis for dismissing the complaint for lack of probable
cause. United States v. Clarin has already been superseded by Liwanag v. Court of Appeals.40

In Clarin, four individuals entered into a contract of partnership for the business of buying and selling mangoes.
When one of the partners demanded from the other three the return of his monetary contribution, this Court ruled
that "the action that lies with the [capitalist] partner x x x for the recovery of his money is not a criminal action for
estafa, but a civil one arising from the partnership contract for a liquidation of the partnership and a levy on its
assets, if there should be any."41 Simply put, if a partner demands his money back, the duty to return the contribution
does not devolve on the other partners; the duty now belongs to the partnership itself as a separate and distinct

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 4 of 9
 personality.

In 1997, a case with similar circumstances was decided differently. In Liwanag v. Court of Appeals,42 three
individuals entered into a contract of partnership for the business of buying and selling cigarettes. They agreed
that one would contribute money to buy the cigarettes while the other two would act as agents in selling. When the
capitalist partner demanded from the industrial partners her monetary contribution because they stopped informing
her of business updates, this time, this Court held the industrial partners liable for estafa.

In this case, the OCP erred gravely when it based its conclusion on the Clarin case. Liwanag applies to the
partnership agreement executed between petitioner and respondent. Petitioner's initial contributions of ₱183,999.00
and ₱20,000.00 were all for specific purposes: for the buying and selling of garments and for the salaries of the
factory workers, respectively. When respondent failed to account for these amounts or to return these amounts to
petitioner upon demand, there is probable cause to hold that respondent misappropriated the amounts and had not
used them for their intended purposes. The Information for estafa should thus proceed.

In Liwanag, this Court held:

Thus, even assuming that a contract of partnership was indeed entered into by and between the parties, we have
ruled that when money or property [had] been received by a partner for a specific purpose (such as that
obtaining in the instant case) and he later misappropriated it, such partner is guilty of estafa.43 (Emphasis
supplied)

Furthermore, the RTC made its own independent assessment whether or not probable cause exists that the crime
was committed by respondent and Anne Kristine. When the RTC is confronted with a Motion to Withdraw
Information on the ground of lack of probable cause, its duty is to make an independent assessment of the totality of
the evidence presented by both parties, including affidavits, counter-affidavits, evidence appended to the complaint,
and records produced by the OCP on court order.44 "Independent assessment" does not mean mere approval or
disapproval of the prosecution's stand; it also means that the RTC must itself be convinced that indeed there is or
there is no sufficient evidence against the accused.45

Both the 27 August 2013 and 7 January 2014 Orders of the RTC were based on facts and allegations of both
parties. The RTC held:

From the evidence adduced by the parties, the Court finds that there is probable cause that the crime charged was
committed by the accused when they convinced the complainant to invest money in a business partnership which
appears to be non-existent. It was not controverted that Leonora received the total amount of ₱183,999.00 from the
complainant. Accused failed to present evidence to show the existence of a business partnership apart from
relying on the Agreement dated March 6, 1996. Neither was there any evidence presented showing that
complainant's money was used to purchase garments to be sold abroad. Basic is the rule that one who alleges
must prove. In this case, the accused failed to establish, by clear and convincing evidence, their defense of
partnership.46 (Emphasis supplied)

The question is not so much whether the RTC has the authority to grant or not to grant the OCP's Motion to
Withdraw Information, because it has such authority, but whether, in the exercise of that authority, the RTC acted
justly and fairly.47 This Court finds that it did.

The action for estafa penalized under paragraph 2(a),

Article 315 of the Revised Penal Code
has not yet been barred by prescription.

Under Article 315 of the Revised Penal Code, the penalty for estafa shall be determined by the amount allegedly
swindled by the accused. The first paragraph of Article 315 reads:

ART. 315. Swindling (estafa). - Any person who shall defraud another by any of the means mentioned hereinbelow
shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount
of the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if such amount exceeds the latter sum,
the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 5 of 9
 additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In such
cases, and in connection with the accessory penalties which may be imposed under the provisions of this Code, the
penalty shall be termed prision mayor or reclusion temporal, as the case may be. (Emphasis supplied)

The total amount allegedly swindled by respondent is ₱203,999.00 for the buying of garments and workers' salaries
plus US$ 1,000.00for the plane tickets which exceeds ₱22,000.00. Taking into consideration the whole amount with
the additional one year for each additional ₱10,000.00, the penalty imposable on respondent shall be prision mayor
in its maximum period to reclusion temporal, the total penalty not exceeding twenty (20) years.

Under Article 25 of the Revised Penal Code, the penalties of prision mayor and reclusion temporal are included in
the enumeration of afflictive penalties. Furthermore, Article 90 of the Revised Penal Code states that crimes
1âwphi1

punishable by afflictive penalties, such as the crime of estafa, prescribe in fifteen (15) years.

The said prescriptive period is computed under Article 91 of the Revised Penal Code, as follows:

ART. 91. Computation of prescription of offenses. - The period of prescription shall commence to run from the day
on which the crime is discovered by the off ended party, the authorities, or their agents, and shall be interrupted by
the filing of the complaint or information, and shall commence to run again when such proceedings terminate without
the accused being convicted or acquitted, or are unjustifiably stopped for any reason not imputable to him.

xxxx

In this case, the fifteen-year prescriptive period commenced in April 1996 when the petitioner discovered that one of
the checks that respondent issued as payment was dishonored for having been drawn against insufficient funds. At
around that time, petitioner likewise discovered that there was no buying, selling and exportation of garments or any
other transactions that took place in the United States.

The fifteen-year period was interrupted on 7 February 2011 when petitioner filed a complaint for estafa against
respondent and Anne Kristine before the OCP of Quezon City. In People v. Olarte,48 "the filing of the complaint, even
if it be merely for purposes of preliminary examination or investigation, should and does interrupt the period of
prescription of the criminal responsibility, even if the court where the complaint or information is filed cannot try the
case on its merits."

As of the filing of the complaint on 7 February 2011, the prescriptive period had run for fourteen (14) years and ten
(10) months. Thus, the fifteen-year period has not yet prescribed.

WHEREFORE, we GRANT the petition. We REVERSE the 24 September 2014 Decision and the 24 March 2015
Resolution of the Court of Appeals in CA-G.R. SP No. 134555. We REINSTATE the Orders of the Regional Trial
Court of Quezon City, Branch 104, dated 27 August 2013 and 7 January 2014, directing the arraignment of Leonora
0. Miaral and Anne Kristine Miaral. The case against Leonora O. Miaral and Anne Kristine Miaral may still proceed
because prescription has not set in.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

DIOSDADO M. PERALTA
Associate Justice

(on official leave)

ESTELA M. PERLAS-BERNABE
ALFREDO BENJAMIN S. CAGUIOA
Associate Justice
Associate Justice

ANDRES B. REYES, JR.

Associate Justice

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 6 of 9
 ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

Pursuant to the Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes
*
On official leave.
1
Rollo, pp. 12-30.
2
Id. at 37-51. Penned by Associate Justice Victoria Isabel A. Paredes, with Associate Justices Isaias P.
Dicdican and Agnes Reyes-Carpio concurring.
3
Id. at 53-54.
4
Id. at 80-83. Penned by Presiding Judge Catherine P. Manodon.
5
Id. at 84-85.
6
Id. at 170.
7
Id. at 90-91.
8
Id. at 92.
9
Id. at 93.
10
Id. at 14.
11
Id. at 94.
12
Id. at 96.
13
Id. at 87-89.
14
Id. at 98-100.
15
Id. at 107-108.
16
Id. at 112-115.
17
Id. at 115.
18
Id. at 116-120.

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 7 of 9
 19
Id. at 147-148.
20
Id. at 166-169.
21
Id. at 170.
22
Id. at 80-83.
23
Id. at 171-184.
24
Id. at 203-207.
25
Id. at 84-85.
26
Id. at 55-79.
27
Id. at 37-51.
28
Id. at 53-54.
29
Id. at 186-196.
30
Id. at 53-54.
31
Sanrio Company Ltd v. Lim, 569 Phil. 630, 639 (2008).
32
Metropolitan Bank and Trust Company v. Reynado, 641 Phil. 208, 222 (2010), citing Baviera v. Paglinawan,
544 Phil. 107, 120 (2007).
33
Glaxosmithkline Philippines, Inc. v. Malik, 530 Phil. 662, 668-669 (2006), citing Punzalan v. Dela Pena, 478
Phil. 771, 781 (2004).
34
Callo-Claridad v. Esteban, 707 Phil. 172, 183 (2013), citing Metropolitan Bank and Trust Company v. Tobias
III, 680 Phil. 173, 186 (2012).
35
Id.
36
Rollo, pp. 166-169.
37
17 Phil. 84 (1910).
38
Rollo, p. 168.
39
Supra note 37.
40
346 Phil. 211 (1997).
41
Supra note 37, at 86.
42
Supra note 40.
43
346 Phil. 211, 217 (1997).
44
Ledesma v. Court of Appeals, 344 Phil. 207, 217 (1997).
45
Fuentes v. Sandiganbayan, 527 Phil. 58, 65 (2006).
46
Rollo,p. 82
47
Id. at 44-45.

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 8 of 9
 48
125 Phil. 895, 902 (1967).

The Lawphil Project - Arellano Law Foundation

https://lawphil.net/judjuris/juri2017/aug2017/gr_217777_2017.html 9/8/20, 10:16 AM

Page 9 of 9