SECOND DIVISION

G.R. No. 221836, August 14, 2019

ESTHER ABALOS Y PUROC, PETITIONER, v. PEOPLE OF THE PHILIPPINES,

RESPONDENT.

DECISION

REYES, J. JR., J.:

The Case

Petitioner Esther P. Abalos (petitioner) comes to this Court appealing 1 her conviction for
the crime of Estafa rendered by the Court of Appeals (CA) in its Decision dated May 20,
2015,2 in CA-G.R. CR No. 35633, which affirmed the indeterminate penalty of four
years and two months of prision correccional as minimum to 20 years of reclusion
temporal  as maximum and actual damages of P232,500.00 imposed by the Regional
Trial Court (RTC), but modified the legal interest at 6% per annum from finality of the
decision until fully paid.

The Version of the Prosecution

In April 2011, petitioner, who introduced herself as "Vicenta Abalos," accompanied by

Christine Molina (Molina), went to the office of private complainant Elaine D.
Sembrano (Sembrano) at Manulife, Baguio City and offered to her two EastWest
Bank checks for rediscounting. 3 The checks were signed by petitioner in Sembrano's
office, as follows:

Check No. Dated  Amount 

0370031 May 3, 2011    P    17,500.00    
0370032 June 1, 2011     250,000.00    
   P 267,500.004

Sembrano agreed to rediscount the checks upon assurance of petitioner and her
companion, Molina, that they were good checks. 5 Sembrano gave the amount of
P250,000.00 less 7% as interest. Sometime later, she learned from friends that
petitioner's name was Esther and not "Vicenta."6 When Sembrano presented the
checks for payment on due dates, the checks were dishonored. 7 Sembrano then
engaged the services of Benguet Credit Collectors to collect from petitioner.
Petitioner failed to make good the checks such that a demand letter was sent to
petitioner which she received on October 23, 2011. 8 Despite the said demand,
petitioner made a promise to pay, but up to this date, nothing was received by
Sembrano.9 For failure to pay her loans, a complaint for estafa under Article 315 of the
Revised Penal Code (RPC) was filed against petitioner.

The Version of the Defense

Petitioner denied the accusations. She claimed that the checks were issued only as a
collateral for a loan together with the title to a property in the name of "Vicenta
Abalos."10 She stated that she did not personally transact with Sembrano 11 and that it
was Molina who transacted with her and she merely accompanied Molina to Sembrano's
office in April 2011.12 As a requirement for the release of the loan, petitioner was asked
to present as collateral an original certificate of title and a check, which she
agreed.13 When she was informed that the loan was ready, she together with Molina
proceeded to the office of Sembrano purposely to receive the money. 14 Before taking
the money from Sembrano, petitioner was asked to sign a real estate mortgage offering
the title as a collateral to the loan. 15 After she and Molina received the money from
Sembrano, they went to a convenience store where Molina gave petitioner P100,000.00
and petitioner handed back to Molina P20,000.00 as commission. 16 Petitioner insists
that the checks she issued were merely to serve as collateral for the loan and not for
the purpose of rediscounting the same.17

The Ruling of the RTC

On November 29, 2012, the RTC rendered a Decision18 finding petitioner guilty, viz.:

WHEREFORE, all premises duly considered, the [c]ourt finds the accused, GUILTY as
charged. Applying the provisions of the Indeterminate Sentence Law, there being no
aggravating and mitigating circumstance, the accused is hereby sentenced to suffer the
penalty of imprisonment of four (4) years and two (2) months of prision correctional as
minimum to twenty (20) years of reclusion temporal as maximum.

The accused is likewise found to be civilly liable to pay the private complainant the
amount of Php232,500.00 as and by way of actual damages, with legal interest thereon
to be computed from the date of the filing of this case, until the same is fully paid.

SO ORDERED.19

The Ruling of the CA

On appeal, the CA affirmed the conviction, but fixed the rate of interest at 6% per
annum, thus:

WHEREFORE, premises considered, the appeal is DISMISSED. The Decision dated

November 29, 2012 of the Regional Trial Court, Branch 60, Baguio City, in Criminal
Case No. 32571-R, finding [appellant] guilty of [Estafa] is AFFIRMED with
MODIFICATION that appellant is directed to pay private complainant the amount of
P232,500.00 as and by way of actual damages, with legal interest at six percent
(6%) per annum from finality of this Decision until fully paid.

SO ORDERED.20

The CA is convinced that the false pretense of petitioner is apparent when she, together
with her companion knowingly and intelligently misrepresented herself as "Vicenta
Abalos" by showing to Sembrano a Transfer Certificate of Title in the name of Vicenta
Abalos, a BIR ID Card, a Community Tax Certificate all bearing the name of Vicenta
Abalos, and by signing the subject checks as "Vicenta Abalos." These pieces of evidence
assured Sembrano that petitioner can make good the checks she issued as she has the
means to do so prompting her to part with her money. The CA likewise ruled that mere
issuance of a check and its subsequent non-payment is a prima facie  evidence of
deceit.

Dissatisfied, petitioner filed the instant appeal.

The Issue

Petitioner submits for the Court's consideration the lone issue that —

THE [CA] ERRED IN FINDING THAT PETITIONER IS GUILTY OF ESTAFA

CONSIDERING THAT THE REAL TRANSACTION BETWEEN THE PARTIES, AS
DEFINED BY LAW, IS NOT CRIMINAL IN NATURE, BUT CIVIL ONLY. 21

Petitioner insists that not all elements of estafa were established. The element of deceit
and/or false pretenses are lacking because the issuance of the checks was not the
factor that induced private complainant to grant the loan, but the intercession made by
Molina and the interest to be earned on the money lent. 22 It was Molina who
maneuvered the transaction with private complainant by assuring the latter that
petitioner will pay the loan.23

Petitioner also zeroed-in on the irreconcilable conflict between Sembrano's affidavit and
her testimony in open court. In her affidavit, Sembrano stated that the checks were
offered to her for rediscounting, while her testimony in open court, she admitted that
the checks were used for collaterals.24 This inconsistency put doubt on the testimony of
Sembrano, but strengthened petitioner's claim that the checks were meant to be
collaterals of the loan which are supposed to be encashed only upon non-payment. 25

The Ruling of the Court

As can be inferred from the records, petitioner was convicted of estafa under Article
315, paragraph 2(d) of the RPC,26 which provides:

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

2. By means of any of the following false pretenses or fraudulent acts executed prior to
or simultaneously with the commission of the fraud:

xxxx

(d) By [postdating] a check, or issuing a check in payment of an obligation when the offender
had no funds in the bank, or his funds deposited therein were not sufficient to cover the
amount of the check. The failure of the drawer of the check to deposit the amount
necessary to cover his check within three (3) days from receipt of notice from the bank
and/or the payee or holder that said check has been dishonored for lack or insufficiency of
funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.
(As amended by R.A. [No.] 4885, approved June 17, 1967.)

This kind of estafa is committed by any person who shall defraud another by false
pretenses or fraudulent acts executed prior to or simultaneously with the commission of
the fraud. The elements are: (1) postdating or issuing a check in payment of an
obligation contracted at the time the check was issued; (2) lack of sufficient funds to
cover the check; (3) knowledge on the part of the offender of such circumstances; and
(4) damage to the complainant. 27

The prosecution was able to establish beyond reasonable doubt all the aforesaid
elements of estafa.

There is no question that petitioner issued two checks in the total amount of
P267,500.00 in payment for an obligation. The issued checks have insufficient funds as
proven by the fact that they were dishonored for the reason "account closed." Because
petitioner knew too well that she was not the owner of the check, petitioner had no
knowledge whether the checks were sufficiently funded to cover the amount drawn
against the checks. Petitioner did not inform Sembrano about the insufficiency/lack of
funds of the checks. Thus, upon presentment for payment, the checks were eventually
dishonored causing damages to Sembrano in the total amount of P267,500.00, 28 as
what was reflected in the issued checks.

What sets apart the crime of estafa from the other offense of this nature (i.e., Batas
Pambansa Bilang 22) is the element of deceit. Deceit has been defined as "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." 29

In Juaquico v.People30 the Court reiterated that in the crime of estafa by postdating or

issuing a bad check, deceit and damage are essential elements of the offense and have
to be established with satisfactory proof to warrant conviction. To constitute estafa,
deceit must be the efficient cause of the defraudation, such that the issuance of the
check should be the means to obtain money or property from the payer 31 resulting to
the latter's damage. In other words, the issuance of the check must have been the
inducement for the surrender by the party deceived of his money or property. 32
The element of deceit was established from the very beginning when petitioner
misrepresented herself as Vicenta Abalos, the owner of the check. To fortify the
misrepresentation, petitioner issued and signed the checks in front of
Sembrano33 presumably to show good faith on her part. Petitioner also showed
Sembrano documents such as an Identification Card and Community Tax Certificate to
prove that she is Vicenta Abalos. And lastly, she showed a transfer certificate of title of
a land registered under the name of "Vicenta Abalos" presumably guaranteeing her
capability to pay. As observed by the RTC, at the outset, petitioner's fraudulent scheme
was already evident.

The misrepresentation of petitioner assured Sembrano that she is indeed dealing with
Vicenta Abalos who has sufficient means and property, and the capacity to make good
the issued checks. It is safe to say that Sembrano was induced to release the money to
petitioner relying on the latter's false pretense and fraudulent act. Evidently,
petitioner's act of issuing a worthless check belonging to another who appears to have
sufficient means is the efficient cause of the deceit and defraudation. Were it not for the
said circumstance, Sembrano would not have parted with her money. At any rate
a  prima facie  presumption of deceit arises when the drawer of the dishonored check is
unable to pay the amount of the check within three days from receipt of the notice of
dishonor.34

In its last ditch effort to enfeeble the case against her, petitioner pointed out the
inconsistency in the evidence of the prosecution specifically with the testimonies of
Sembrano herself. In her affidavit, Sembrano stated that the checks were offered to her
for rediscounting, while her testimony in open court, she admitted that the checks were
used for collaterals.35 For a discrepancy to serve as basis for acquittal, it must refer to
significant facts vital to the guilt or innocence of the accused. An inconsistency, which
has nothing to do with the elements of the crime, cannot be a ground to reverse a
conviction.36 The inconsistency referred to in this case does not attach upon the very
element of the crime of estafa.

While it was indeed admitted by Sembrano that the checks were collaterals, this only
lends credence to the fact that the said checks were the reason why Sembrano parted
with her money. Sembrano was assured that the loan contracted was secured by the
checks issued. Notwithstanding that the said checks were merely used to guarantee a
loan, the fact remains that petitioner committed deceit when she failed to make known
to Sembrano that the checks she issued were not hers and they were not sufficiently
funded. Sembrano will not accede to an arrangement of issuing unfunded checks to
secure the loan. It is against ordinary human behavior and experience for a person to
accept a check, even as a mere guaranty for a supposed loan or obligation, if one knew
beforehand that the account against which the check was drawn was already
closed.37 The check would not even serve its purpose of guaranty because it can no
longer be encashed.38

While it is true that no criminal liability under the RPC arises from the mere issuance of
postdated checks as a guarantee of repayment, 39 this is not true in the instant case
where the element of deceit is attendant in the issuance of the said checks. The liability
therefore is not merely civil, but criminal.
As to the penalty imposed, we take into consideration the amendment embodied in
R.A. No. 10951. (An Act Adjusting the Amount or the Value of Property and Damage
on Which a Penalty is Based and the Fines Imposed Under the Revised Penal Code,
Amending for the Purpose Act No. 3815, Otherwise Known as "The Revised Penal
Code", as Amended) which modifies the penalty in swindling and estafa cases. Section
100 of the said law, however, provides that it shall have retroactive effect only
insofar as it is favorable to the accused. This necessitates a comparison of the
corresponding penalties imposable under the RPC and R.A. No. 10951.

The penalty imposed by the RPC in estafa committed under Section 315, paragraph
2(d) are as follows:

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

1. Reclusion Perpetua imprisonment for at least

thirty [30] years after which
the convict becomes eligible
for pardon. It also carries
with it accessory penalties,
namely: perpetual special
disqualification, etc.
(20yrs+1day to 40yrs)
2. Reclusion Temporal 12 years+1 day to 20 years
3. Prision Mayor and 6 years and 1 day to 12 Maximum — 6 Maximum: 9
Temporary Disqualification years years, 8 years, 4
months, 21 months and 1
days to 8 day to 10 years
years; Medium: 8
years, 8
months and 1
Medium — 5
day to 9 years
years, 5
and 4 months
months, 11
Minimum: 8
days to 6
years and 1
years, 8
day to 8 years
months, 20
and 8 months44
days; and

4. Prision correccional, 6 months and 1 day to 6 Minimum — 4

suspension, and destierro years years, 2
months, 1 day
to 5 years, 5
months, 10
days.42

5. Arresto Mayor 1 month and 1 day to 6

months
 6. Arresto Menor 1 day to 30 days

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 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
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 and for the purpose of the other provisions of this Code, the penalty shall
be termed prision mayor or reclusion temporal, as the case may be.

Considering that the penalty prescribed by law is composed only of two periods,
pursuant to Article 65 of the RPC (Article 65. Rule in cases in which the penalty is not
composed of three periods. - In cases in which the penalty prescribed by law is not composed of
three periods, the courts shall apply the rules contained in the foregoing articles, dividing into three
equal portions of time included in the penalty prescribed, and forming one period of each of the three
portions.) , the same must be divided into three equal portions of time included in the
penalty prescribed, forming one period for each of the three portions, 41 to wit:

 Maximum — 6 years, 8 months, 21 days to 8 years;

 Medium — 5 years, 5 months, 11 days to 6 years, 8 months, 20 days; and

 Minimum — 4 years, 2 months, 1 day to 5 years, 5 months, 10 days. 42

Since the amount involved in this case is P232,500.00 43 which is beyond the
P22,000.00 ceiling set by law, the penalty to be imposed upon the petitioner should be
taken within the maximum period of the penalty prescribed which is eight years; and
from there should be added the incremental penalty of 21 years (P232,500.00 less
P22,000.00 divided by 10). However, the law only provides the highest allowable
duration which is 20 years. Therefore, the maximum period of indeterminate
penalty is 20 years.

Applying the Indeterminate Sentence Law, the minimum term should be within the
penalty next lower in degree of the penalty prescribed, which is, prision correccional in
its minimum and medium periods or anywhere from six months and one day to four
years and two months. If only to be beneficial to the accused, the lowest term possible
that can be imposed is six months and one day.

Hence, under the RPC, the penalty of estafa (of the amount of P232,500.00) ranged
from six months and one day as minimum to 20 years as maximum.

On the other hand, R.A. No. 10951 provides:

SEC. 85. Article 315 of the same Act, as amended by Republic Act No. 4885,
Presidential Decree No. 1689, and Presidential Decree No. 818, is hereby further
amended to read as follows:
ART. 315. Swindling (estafa).  — x x x

xxxx

Any person who shall defraud another by means of false pretenses or fraudulent acts as
defined in paragraph 2(d) hereof shall be punished by:

4th. The penalty of prision mayor in its medium period, if such amount is over
Forty thousand pesos (P40,000) but does not exceed One million two hundred
thousand pesos (P1,200,000).

Considering that the actual amount involved in this case is P232,500.00, the proper
imposable penalty is prision mayor in its medium period. Since the penalty
prescribed by law is a penalty composed of only one period, Article 65 of the RPC
requires the division of the time included in the penalty into three portions, thus:

Maximum: 9 years, 4 months and 1 day to 10 years

Medium: 8 years, 8 months and 1 day to 9 years and 4 months
Minimum: 8 years and 1 day to 8 years and 8 months 44

Under Article 64 of the RPC, the penalty prescribed shall be imposed in its medium
period when there are neither aggravating nor mitigating circumstances. Considering
the absence of any modifying circumstance in this case, the maximum penalty should
be anywhere within the medium period of eight years, eight months and one day to
nine years and four months.

( Article 64. Rules for the application of penalties which contain three periods. - In cases in which
the penalties prescribed by law contain three periods, whether it be a single divisible penalty or
composed of three different penalties, each one of which forms a period in accordance with the
provisions of Articles 76 and 77, the court shall observe for the application of the penalty the
following rules, according to whether there are or are not mitigating or aggravating circumstances:

1. When there are neither aggravating nor mitigating circumstances, they shall impose the
penalty prescribed by law in its medium period.

2. When only a mitigating circumstances is present in the commission of the act, they shall
impose the penalty in its minimum period.

3. When an aggravating circumstance is present in the commission of the act, they shall
impose the penalty in its maximum period.

4. When both mitigating and aggravating circumstances are present, the court shall
reasonably offset those of one class against the other according to their relative weight.

5. When there are two or more mitigating circumstances and no aggravating circumstances
are present, the court shall impose the penalty next lower to that prescribed by law, in the
period that it may deem applicable, according to the number and nature of such
circumstances.
 6. Whatever may be the number and nature of the aggravating circumstances, the courts
shall not impose a greater penalty than that prescribed by law, in its maximum period.

7. Within the limits of each period, the court shall determine the extent of the penalty
according to the number and nature of the aggravating and mitigating circumstances and the
greater and lesser extent of the evil produced by the crime.)

Applying the Indeterminate Sentence Law (ISL), the minimum term, which is left
to the sound discretion of the court, should be within the range of the penalty next
lower than the aforementioned penalty, which is left to the sound discretion of the
court.45 Thus, the minimum penalty should be one degree lower from the
prescribed penalty of prision mayor  in its medium period, or prision mayor in
its minimum period.46 The minimum term of the indeterminate sentence should be
anywhere from six years and one day to 10 years.

Under R.A. No. 10951, therefore, the petitioner is liable to suffer the
indeterminate penalty of imprisonment ranging from six years and one day
of prision mayor,  as minimum, to eight years, eight months and one day of prision
mayor,  as maximum.47

It appears, however, that the imposable penalty under the RPC, which is six months
and one day to 20 years, presents a lower minimum period, but a higher maximum
period of imprisonment compared to that imposable under R.A. No. 10951, which is six
years and one day to eight years, eight months and one day. In the case of Hisoler v.
People,48 the Court has ruled that since the penalty under the RPC is more beneficial to
the accused, thus, it is the proper penalty to be imposed. It ratiocinated as follows:

At any rate, even if the maximum period imposable upon the petitioner under
the RPC in this case is higher than that under R.A. No. 10951, the Court finds
that the benefits that would accrue to the petitioner with the imposition of a
lower minimum sentence outweighs the longer prison sentence and is more in
keeping with the spirit of the Indeterminate Sentence Law.

In fixing the indeterminate penalty imposable upon the accused, the Court should be
mindful that the basic purpose of the Indeterminate Sentence Law is to "uplift and
redeem valuable human material, and prevent unnecessary and excessive deprivation
of personal liberty and economic usefulness." Simply, an indeterminate sentence is
imposed to give the accused the opportunity to shorten the term of imprisonment
depending upon his or her demeanor, and physical, mental, and moral record as a
prisoner. The goal of the law is to encourage reformation and good behavior, and
reduce the incidence of recidivism. While the grant of parole after service of the
minimum sentence is still conditional, the flexibility granted upon the petitioner to
immediately avail of the benefits of parole considering the much shorter minimum
sentence under the RPC should inspire the petitioner into achieving the underlying
purpose behind the Indeterminate Sentence Law.49

It is clear, therefore, that if R.A. No. 10951 would be given retroactive effect,
the same will prejudice petitioner. The penalty under the RPC, insofar as it
benefits the petitioner must prevail. Hence, the penalty imposed by the RTC
and the CA, which is four years and two months of prision correccional  as
minimum to 20 years of reclusion temporal  as maximum, is correct as it is
within the proper penalty imposed by law.

The legal rate of interest of 6% per annum on the monetary award of P232,500.00 (the
actual damage sustained by Sembrano), from the date of finality of this Decision until
fully paid, as imposed by the CA, is modified as follows: the monetary award shall earn
interest at the rate of 12% per annum from the filing of the Information until June 30,
2013 and 6 % per annum from July 1, 2013 until the finality of the decision. The total
amount of the foregoing shall, in turn, earn interest at the rate of 6% per annum from
the finality of the decision until full payment of the same. 50

WHEREFORE, the Decision dated May 20, 2015 of the Court of Appeals in CA-G.R. CR
No. 35633 sentencing petitioner to four (4) years and two (2) months of prision
correccional  as minimum to twenty (20) years of reclusion temporal  as maximum
is AFFIRMED with MODIFICATION in that the monetary award of P232,500.00 shall
be subject to interest rate of 12% per annum from the filing of the Information until
June 30, 2013 and 6% per annum from July 1, 2013 until the finality of the decision,
and the total amount of the foregoing shall, in turn, earn interest at the rate of 6% per
annum from the finality of the decision until full payment thereof.

SO ORDERED.