PDIC vs.

GIDWANI

G.R. No. 234616, June 20, 2018

Several rural banks owned and controlled by the Legacy Group of Companies were
ordered closed and thereafter placed under the receivership of PDIC.

Respondent Manu, together with his wife and eighty-six (86) other individuals,
represented themselves to be owners of 471 deposit accounts with the Legacy Banks
and filed claims with PDIC. The claims were processed and granted, resulting in the
issuance 683 checks.

The checks were issued as payable to the Payee's Account Only. However, despite
these explicit instructions, the individuals credited the face value of all the checks to a
single account with RCBC account owned by Manu.

PDIC conducted investigation and discovered that the spouses Gidwani and the 86
individuals maintained a total of 471 deposit accounts with the different Legacy Banks,
and some were in the names of helpers and rank-and-file employees of the Gidwani
spouses.

It is PDIC's contention that the Gidwani spouses and the 86 individuals, with the
indispensable cooperation of RCBC, deceived PDIC into issuing checks. Petitioner posits
that the 86 individuals are not entitled to the proceeds of the deposit insurance since
they are not the true owners of the accounts. Rather, it is the spouses Gidwani who are
the true beneficial owners thereof and can only be entitled to a maximum deposit
coverage of P250,000.00 each pursuant to Sec. 4(g) of the PDIC Charter.

PDIC lodged a criminal for estafa through falsification and for money laundering against
the Gidwani spouses and the 86 other individuals.

the Gidwani spouses claimed that there was no falsification committed by them since
what was stated about the 86 individuals being the owners of their respective accounts
was true. Manu merely had a fund management agreement with the depositors who got
into investing with the Legacy Banks because of him. The crossed-checks issued by
PDIC ended up in his RCBC account because the other respondents did not have other
accounts of their own. The payees then requested him to advance the value of their
checks in exchange thereof. Manu adds that there was nothing illegal with the
arrangement since the checks, although crossed, bore the endorsement of the payees
or their duly authorized representatives.

The DOJ Task Force dismissed the complaint is that the records of the case allegedly do
not support the theory that Manu owned all of the accounts in question.

Issues

Whether or not Gidwani is liable for vilation of AMLA

For his part, respondent Gidwani maintains that the complaint is based on nothing more
than PDIC's suspicion that the subject bank accounts were actually owned by him and
his spouse; that the presumption that each individual depositor is the owner of the
funds under his name in a bank deposit was not refuted by PDIC; that the
circumstances surrounding the case confirm the arrangement for fund management
between the spouses Gidwani and the individual depositors; that the individual
depositors confirmed their ownership over the deposited funds; and that PDIC itself
acted on the applications of the individual claimants and effectively ruled on the
legitimacy of their claims by approving the same.
The Court's Ruling

The petition is meritorious.

The CA erred in ruling that SOJ Caparas gravely abused his discretion In
reversing the Justiniano Resolution absent additional evidence from PDIC

Hornbook doctrine is that courts of law are precluded from disturbing the findings of
public prosecutors and the DOJ on the existence or non existence of probable cause for
the purpose of filing criminal informations, unless such findings are tainted with grave
abuse of discretion, amounting to lack or excess of jurisdiction. 21 As explicated
in Aguilar v. Department of Justice (Aguilar):22
[t]he rationale behind the general rule rests on the principle of separation of powers,
dictating that the determination of probable cause for the purpose of indicting a suspect
is properly an executive function; while the exception hinges on the limiting principle of
checks and balances, whereby the judiciary, through a special civil action of certiorari,
has been tasked by the present Constitution "to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government."
Grave abuse of discretion had been defined in jurisprudence to mean a "capricious or
whimsical exercise of judgment as is equivalent to lack of jurisdiction." The abuse of
discretion must be patent and gross so 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.23 The underlying principle behind the courts' power to review a public prosecutor's
determination of probable cause is to ensure that the latter acts within the permissible
bounds of his authority or does not gravely abuse the same. This manner of judicial
review is a constitutionally-enshrined form of check and balance which underpins the
very core of our system of government. 24

In the assailed Decision, the CA held that SOJ Caparas gravely abused his discretion
when he superseded the earlier resolutions of the DOJ Task Force and of SOJ Justiniano
even though there was no new evidence offered by PDIC to justify the reversal. To
quote the CA:
There is nothing new in the evidence revisited, reviewed and reassessed by Secretary
Caparas from those initially studied and examined by the investigating panel who have
the opportunity to sift first hand these evidence. Considering that the fact finding panel
of the DOJ found no prima facie case against the petitioner, a fact affirmed by the DOJ
Secretary through Undersecretary Justiniano, great restraint should have been
exercised by Secretary Caparas in reversing the findings of the investigating panel
during the preliminary investigation. There were no new evidence presented in the
motion for reconsideration of PDIC that would compel Secretary Caparas to rule
otherwise. It must be stressed that the panel had already determined an independent
finding or recommendation that no probable cause exists against the petitioner. In
overturning the said findings and recommendations of the [DOJ Task Force], he acted
in an arbitrary and despotic manner by reason of passion or personal hostility.

x x x x

x x x It must be pointed out that the petition for review was already resolved by the
DOJ Secretary through Undersecretary Justiniano. In other words the power of the DOJ
Secretary to review, approve, reverse or modify acts and decisions of his subordinate
officials or unit had already been performed as in fact, the then Secretary believed on
the theory of the petitioner through Undersecretary Justiniano. The question therefore
may be asked - after he assumed the position of Acting Secretary of Justice, can
Caparas again make a second look on the said complaint and act favourably on PDIC's
motion for reconsideration taking into account that what the latter had presented in its
motion are the same arguments and theories already threshed out by his predecessor
making its motion as a pro forma motion? Since a resolution had already been
promulgated by the investigating panel and reviewed by the previous Secretary of
Justice, the motion for reconsideration has to be denied if only to write finis to this
controversy, otherwise it will open gates to endless litigation and probable miscarriage
of justice.25 (words in brackets added)
The Court strongly disagrees with this pronouncement.

The filing of a motion for reconsideration is not mere formality, but an opportunity for a
judicial or quasi-judicial body to correct imputed errors, in fact or in law, in its findings
and conclusions.26 The office of the motion is precisely to grant the investigating body,
the DOJ in this case, the opening to give a second hard look at the matter at hand, and
to determine if its previous ruling is in accord with evidence on record and statute.

In resolving the motion for reconsideration lodged with his office and in exercising
jurisdiction, SOJ Caparas has the power and discretion to make his own personal
assessment of the pleadings and evidence subject of review. He is not bound by the
rulings of his predecessors because there is yet to be a final resolution of the issue; the
matter is still pending before his office after all. To hold otherwise would render the
filing of the motion a futile exercise, and the recourse, pointless.

Jurisprudence teaches, in a litany of cases, that a motion for reconsideration is

generally considered as the plain, speedy, and adequate remedy that is a condition sine
qua non to the filing of a petition for certiorari, 27 within the contemplation of Rule 65,
Section 1 of the Rules of Court. 28 But if the judicial or quasi-judicial body would be
precluded from overruling its earlier pronouncement on reconsideration, then a motion
for reconsideration would be no remedy at all, let alone one that is plain, speedy, and
adequate.

The treatment of a motion for reconsideration is then not a ministerial function that can
only result in the denial thereof. It was therefore plain error on the part of the CA to
have ruled that SOJ Caparas virtually had no option but to affirm the findings of the
DOJ Task Force and of SOJ Justiniano as to the alleged absence of probable cause to
charge respondent.
That no new evidence was offered by PDIC on reconsideration is of no moment. For
under Section 13 of Department Circular No. 70 of the DOJ, otherwise known as the
2000 National Prosecutorial Service Rule on Appeal (2000 NPS Rules), the party
aggrieved by the ruling of the SOJ during the preliminary investigation may file a
motion for reconsideration within a non-extendible period of ten (10) days from notice.
Quite conspicuous, however, is that the 2000 NPS Rules does not specify the grounds
for filing the said motion. In this regard, the Court refers to the Rules of Court for
guidance.

Rule 1, Section 4 of the Rules of Court provides that the rules can be applied in a
suppletory character. It means that the provisions in the Rules of Court will be made to
apply where there is deficiency or an insufficiency in the applicable rule. 29 Thus, even
though the 2000 NPS Rules is lacking in specifics insofar as the grounds for a motion
for reconsideration is concerned, Rule 37 of the Rules of Court bridges the breach.
Pertinently, Rule 37, Section 1 states:
RULE 37

New Trial or Reconsiderations

Section 1. Grounds of and period for filing motion for new trial or reconsideration. -
Within the period for taking an appeal, the aggrieved party may move the trial court to
set aside the judgment or final order and grant a new trial for one or more of the
following causes materially affecting the substantial rights of said party:

(a) Fraud, accident, mistake or excusable negligence which ordinary prudence could not
have guarded against and by reason of which such aggrieved party has probably been
impaired in his rights; or

(b) Newly discovered evidence, which he could not, with reasonable diligence, have
discovered and produced at the trial, and which if presented would probably alter the
result.

Within the same period, the aggrieved party may also move for reconsideration
upon the grounds that the damages awarded are excessive, that the evidence
is insufficient to justify the decision or final order, or that the decision or final
order is contrary to law. (emphasis added)
As can be gleaned, a motion for reconsideration may be granted if (1) the damages
awarded are excessive, (2) the evidence is insufficient to justify the decision or final
order, or (3) the decision or final order is contrary to law. The judicial or quasi-judicial
body concerned may arrive at any of the three enumerated conclusions even without
requiring additional evidence. To be sure, the introduction of newly discovered
additional evidence is a ground for new trial or a de novo appreciation of the case, but
not for the filing of a motion for reconsideration. Judicial proceedings even prohibit the
practice of introducing new evidence on reconsideration since it potentially deprives the
opposing party of his or her right to due process. While quasi-judicial bodies in
administrative proceedings may extend leniency in this regard and allow the admission
of evidence offered on reconsideration or on appeal, 30 this is merely permissive and
does not translate to a requirement of attaching additional evidence to support motions
for reconsideration.
The CA erred in ruling that SOJ Caparas gravely abused his discretion in
finding probable cause

Proceeding to the crux of the controversy, the Court now resolves whether or not the
CA erred in dismissing due to lack of probable cause the criminal complaint for estafa
through falsification under Art. 315(2)(a) in relation to Art. 172(1) 31 and 171(4)32 of the
RPC, and for money laundering as defined in Section 4(a) of RA 9160. Here, the legal
proscriptions purportedly violated by respondent read:
Article 315. Swindling (estafa). - x x x

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:

(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.

x x x x

Section 4. Money Laundering Offense. - Money laundering is a crime whereby the

proceeds of an unlawful activity are transacted, thereby making them appear to have
originated from legitimate sources. It is committed by the following:

a. Any person knowing that any monetary instrument or property represents, involves,
or relates to the proceeds of any unlawful activity, transacts or attempts to transact
said monetary instrument or property.
Jurisprudence elucidates that the elements of estafa or swindling under paragraph 2 (a)
of Article 315 of the RPC are the following: 33

1. That there must be a false pretense, fraudulent act or fraudulent means;

2. That such false pretense, fraudulent act or fraudulent means must be

made or executed prior to or simultaneously with the commission of the
fraud;

3. That the offended party must have relied on the false pretense, fraudulent
act, or fraudulent means, that is, he was induced to part with his money
or property because of the false pretense, fraudulent act, or fraudulent
means;

4. That as a result thereof, the offended party suffered damage.

According to PDIC, the crime charged was committed when the 86 other individuals
fraudulently declared that they are the bona fide owners of 471 deposits with the
legacy banks; that the purported depositors, in conspiracy with Manu, falsified official
documents by making the untruthful statement of ownership in their deposit insurance
claims; that PDIC relied on the representations of the claimants when it released to
them the deposit insurance proceeds amounting to P98,733,690.21, of which
P97,733,690.21 was deposited to the RCBC account of Manu Gidwani; and that the
government suffered damage when PDIC discovered upon investigation that Manu was
the sole beneficial owner of the bank accounts.

In the assailed Decision, the CA did not give credence to the allegations of PDIC. It
ruled instead that "PDIC failed to prove that [Manu] is the owner of all subject bank
accounts or financed the same" and, as such, Manu could not be considered to have
committed false pretenses or misrepresentation against PDIC.

We disagree.

It must be recalled that the criminal case is still in the stage of preliminary
investigation. Under Rule 112, Section 1 of the Rules of Court, a preliminary
investigation is "an inquiry or proceeding to determine whether there is sufficient
ground to engender a well-founded belief that a crime has been committed and the
respondent is probably guilty thereof, and should be held for trial." The investigation is
advisedly called preliminary, because it is yet to be followed by the trial proper in a
court of law.34 The occasion is not for the full and exhaustive display of the parties since
the function of the investigating prosecutor is not to determine the guilt or innocence of
an accused.

In this case, the PDIC reportedly discovered that there was only one beneficial owner of
the 471 bank accounts with the Legacy Banks of the 86 individual depositors
respondent Manu. To illustrate, PDIC reportedly discovered that 142 of these 471
accounts, with the total amount of P20,966,439.09, were in the names of helpers and
rank-and-file employees of the Gidwani spouses who do not have the financial capacity
to deposit the amounts recorded under their names, viz:35
No. of Bank Insurance Received
Respondent Occupation
Accounts/Checks Received (Php)
Julie Alib Helper 27 3,980,054.55
Erlyn Aragon Helper 22 3,106,040.63
Lorlyn Arellano Helper 27 3,891,289.95
Sales Girl at Glory
Faith Jabagat 6 978,063.16
Bazar
Sales Manager at
Kenny Matani 24 3,513,734.40
Glory Bazar
Sales Girl at Glory
Lourdes Matani 12 1,812,057.21
Bazar
Technician at Glory
Rodin Mixdon 2 250,000.00
Bazar
Sales Girl at Glory
Gerline Molines 6 938,803.69
Bazar
Francisca Sales Clerk at Glory 6 908,242.61
Talatala Bazar
Sales Girl at Glory
Emily Taleon 10 1,588,152.94
Bazar
Total 142 20,966,439.09
Moreover, the helpers and rank-and-file employees who reside and are employed in
Bacolod City maintained bank accounts in Legacy Banks located in different parts of the
country:36
Respondent Banks Location
Julie Alib Rural Bank of Bais, Inc. Mandaue City, Cebu
(27 accounts) Rural Bank of DARBCI, Inc. South Cotabato
Rural Bank of San Jose, Inc. San Jose, Batangas
San Pablo Development Bank, Inc. San Pablo, Laguna
Bank of East Asia, Inc. Minglanilla, Cebu
Nation Bank, Inc. Bacolod City, Negros Occidental
Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
Inc. Dumaguete City, Negros Oriental
Pilipino Rural Bank, Inc. West Cogon, Cebu
Rural Bank of Carmen, Inc. Polangui, Albay
Rural Bank of Polangui, Inc.
Erlyn Aragon Pilipino Rural Bank, Inc. Bacolod City, Negros Occidental
(22 accounts) Rural Bank of Bais, Inc. (Home Office) Bais City, Negros Oriental
Rural Bank of Bais, Inc. (Mandaue) Mandaue City, Cebu
Rural Bank of Polangui, Inc. Polangui, Albay
Rural Bank of San Jose, Inc. San Jose, Batangas
San Pablo Development Bank, Inc. San Pablo, Laguna
Nation Bank, Inc. Bacolod City, Negros Occidental
Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
Inc. West Cogon, Cebu
Rural Bank of Carmen, Inc. Pasig City, Metro Manila
Rural Bank of Paranaque, Inc. (Pasig)
Lorlyn Arellano Nation Bank, Inc. Bacolod City, Negros Occidental
(27 accounts) Rural Bank of Bais, Inc. (Home Office) Bais City, Negros Oriental
Rural Bank of Bais, Inc. (Mandaue) Mandaue City, Cebu
Rural Bank of Polangui, Inc. Polangui, Albay
Rural Bank of San Jose, Inc. San Jose, Batangas
San Pablo Development Bank, Inc. San Pablo, Laguna
Bank of East Asia, Inc. Minglanilla, Cebu
Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
Inc. Dumaguete City, Negros Oriental
Pilipino Rural Bank, Inc. South Cotabato
Rural Bank of DARBCI, Inc. Pasig City, Metro Manila
Rural Bank of Paranaque, Inc. (Pasig)
Faith Jabagat Nation Bank, Inc. Bacolod City, Negros Occidental
(2 accounts) Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
Inc.
Kenny Matani Nation Bank, Inc. Bacolod City, Negros Occidental
(24 accounts) Philippine Countryside Rural Bank, Liloan, Cebu
Inc. Mandaue City, Cebu
Rural Bank of Bais, Inc. (Mandaue) South Cotabato
Rural Bank of DARBCI, Inc. West Cogon, Cebu
Rural Bank of Carmen, Inc. San Jose, Batangas
Rural Bank of San Jose, Inc. San Pablo, Laguna
San Pablo Development Bank, Inc. Minglanilla, Cebu
Bank of East Asia, Inc. Pasig City, Metro Manila
Rural Bank of Paranaque, Inc. (Pasig)
Lourdes Matani Nation Bank, Inc. Bacolod City, Negros Occidental
(12 accounts) Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
Inc. Mandaue City, Cebu
Rural Bank of Bais, Inc. (Mandaue) San Pablo, Laguna
San Pablo Development Bank, Inc. Pasig City, Metro Manila
Rural Bank of Paranaque, Inc. (Pasig)
Rodin Mixdon Rural Bank of Bais, Inc. (Mandaue) Mandaue City, Cebu
(2 accounts)
Gerline Molines Nation Bank, Inc. Bacolod City, Negros Occidental
(6 accounts) Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
    Inc. Mandaue City, Cebu
Rural Bank of Bais, Inc. (Mandaue)
Francisca Talatala Nation Bank, Inc. Bacolod City, Negros Occidental
(6 accounts) Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
    Inc. Mandaue City, Cebu
Rural Bank of Bais, Inc. (Mandaue)
Emily Taleon Nation Bank, Inc. Bacolod City, Negros Occidental
(10 accounts) Rural Bank of Bais, Inc. (Home Office) Bais City, Negros Oriental
    Rural Bank of Bais, Inc. (Mandaue) Mandaue City, Cebu
San Pablo Development Bank, Inc. San Pablo, Laguna
Philippine Countryside Rural Bank, Lapu-Lapu City, Cebu
Inc.
That these individuals reported either respondent Manu's office or business address as
their own further arouses serious suspicion on the true ownership of the funds
deposited. It gives the impression that they had been used by respondent as dummies,
and their purported ownership mere subterfuge, in order to increase the amount of his
protected deposit.

Under Republic Act No. 3591 (PDIC Charter), as amended, all deposits in a bank
maintained in the same right and capacity for a depositor's benefit, either in his name
or in the name of others, shall be added together for the purpose of determining the
insured deposit amount due to a bona fide depositor, which amount should not exceed
the maximum deposit insurance coverage (MDIC) of P250,000.00. Thus, the
entitlement to a deposit insurance is based not on the number of bank accounts held,
but on the number of beneficial owners. It is this government policy and P250,000.00
threshold that respondent Manu purportedly circumvented by conspiring with the 86
individuals. If not for the fact that the 683 Landbank crossed checks amounting to
P97,733,690.21 were deposited in the RCBC account of respondent Manu, petitioner
would not have gotten wind of this probable concealment of true ownership over the
subject bank accounts.

A crossed check is one where two parallel lines are drawn across its face or across its
comer, and carries with it the following effects: (a) the check may not be encashed but
only deposited in the bank; (b) the check may be negotiated only once to the one
who has an account with the bank; and (c) the act of crossing the check serves as a
warning to the holder that the check has been issued for a definite purpose and he
must inquire if he received the check pursuant to this purpose; otherwise, he is not a
holder in due course.37In other words, the crossing of a check is a warning that
the check should be deposited only in the account of the payee. 38 Thus, to the
mind of the Court, the act of depositing second-endorsed crossed-checks in the name of
86 different payees under a single account is highly irregular if not potentially criminal.

Respondent seeks to exonerate himself from the charges by claiming that PDIC was
negligent in processing the insurance claims. This was, in fact, the ruling of the DOJ
Task Force - that there was a clear paper trail by which PDIC could have traced and
uncovered the status of the subject accounts before releasing the proceeds. The
proposition, however, deserves scant consideration. For negligence on the part of the
PDIC does not preclude the commission of fraud on the part of the claimants, and could
have even made the agency even more susceptible to abuse.

Respondent likewise raised that he and the individual depositors entered into a fund
management scheme to facilitate the transactions with the Legacy Banks; he did not
deny opening and funding some of the accounts for the individual creditors, and even
admitted to receiving advance interests for the subject bank accounts that were meant
for the actual depositors. Anent this contention, SOJ Caparas held that the allegation of
a fund management scheme is barren and self-serving, and that, in any event, the
agreement partakes the nature of an investment contract that ought to have been
registered first with the Securities and Exchange Commission before it can be given
effect.

Whether or not there indeed existed an agreement between respondent Manu and the
individual depositors is a matter best left ventilated during trial proper, where evidence
can be presented and appreciated fully. Suffice it to state for now that the Court herein
finds probable cause to charge respondent for estafa and money laundering.

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The

January 31, 2017 Decision and October 6, 2017 Resolution of the Court of Appeals in
CA-G.R. SP No. 146439 are hereby REVERSED and SET ASIDE. The June 3, 2016
Resolution of the Department of Justice, through then Secretary of Justice Emmanuel L.
Caparas, in NPS Docket No. XVI-INV-12K-00480 finding probable cause to charge
respondent Manu Gidwani for estafa through falsification under Art. 315(2)(a) in
relation to Art. 172(1) and 171(4) of the RPC in the amount of P97,733,690.21, and for
money laundering as defined in Section 4(a) of RA 9160 is hereby REINSTATED.

SO ORDERED.
 PEOPLE vs. DELOS REYES
G.R. No. 198795

Accused allegedly offered jobs abroad to Suratos, Guillarte, Alayon, Bagay, Jr., and Gloria, who in
turn gave the accused money for the processing of their documents. The promise of deployment,
however, never materialized. Victims demand for the return of their money from the accused went
unheeded.

For her part, the accused admitted that she was the Overseas Marketing Director of All Care Travel
& Consultancy. She claimed that she did not know Suratos, Guillarte, Alayon, Bagay, Jr., and Gloria.
Although she knew Duldulao, she did not promise him any job. She likewise claimed that she neither
signed nor issued any receipt using the name "Manzie delos Reyes" in favor of the complainants.
She further claimed that she was not engaged in any recruitment and placement activities. During
the pre-trial, she admitted that she had no license to recruit workers for overseas employment.

On rebuttal, prosecution witness, Chief, Registration Division of the PRC, issued a certification to the
effect that "Merceditas Matheus" is not a Licensed Electronics Communication Engineer.

The RTC convicted the accused of the crime of large scale illegal recruitment and five counts of
estafa.

The Issue

Whether or not accused is guilty for violation of RA10022

Ruling:

The offense of illegal recruitment in large scale has the following elements: (l} the person charged
undertook any recruitment activity as defined under Section 6 of RA 8042; (2) accused did not have
the license or the authority to lawfully engage in the recruitment of workers; and, (3) accused
committed the same against three or more persons individually or as a group.

These elements are obtaining in this case.

First, the RTC found accused to have undertaken recruitment activity when she promised the private
complainants overseas employment for a fee.   1avvphi1

Second, the Certification issued by the POEA unmistakably reveals that the accused-appellant
neither had a license nor authority to recruit workers for overseas employment.

Third, it was established that there were five complainants, i.e., Suratos, Guillarte, Alayon, Bagay,
Jr., and Duldulao.

Indeed, the existence of the offense of illegal recruitment in large scale was duly proved by the
prosecution.

The elements of estafa are: (1) the accused defrauded another by abuse of confidence or by means
of deceit; and (2) the offended party or a third party suffered damage or prejudice capable of
pecuniary estimation.
Here, the prosecution proved beyond reasonable doubt that accused deceived private complainants
into believing that she had the authority and capability to send them abroad for employment, despite
her not being licensed by the POEA to recruit workers for overseas employment.  Because of the
1âwphi1

assurances given by accused-appellant, the private complainants parted with their hard-earned
money for the payment of the agreed placement fee, for which accused-appellant issued petty cash
vouchers and used fictitious names evidencing her receipt of the payments.

Clearly, these acts of accused-appellant constitute estafa punishable under Article 315 (2)(a) of the
G.R. No. 73905 September 30, 1991

MICHAEL T. DAVA, petitioner,
vs.
THE PEOPLE OF THE PHILIPPINES and the INTERMEDIATE APPELLATE
COURT, respondents.

KV. Faylona & Associates for petitioner.

FERNAN, C.J.:

On October 19, 1975, while driving a car along Shaw Boulevard, Mandaluyong, Rizal, petitioner
Michael T. Dava, then holder of non-professional driver's license No. 1474427  with official receipt
1

No. 7023037,  bumped pedestrians Bernadette Roxas Clamor and Dolores E. Roxas, causing death
2

to former and physical injuries to the latter.

As a consequence of said incident, Dava was brought to Mandaluyong Police headquarters where
his driver's license was confiscated by Cpl. Daniel Severino who later submitted Dava's driver's
license to the fiscal's office in Pasig, Rizal. license was thereafter presented as prosecution evidence
in criminal case for homicide and serious physical injuries reckless imprudence filed against Dava in
the then Court First Instance of Rizal in Pasig.3

On April 12, 1978, Antonio Roxas, the brother of Bernadette and the father of Dolores, saw Dava
driving a maroon Volkswagen (beetle-type) car with plate No. AD-902 B. Knowing that Dava's
driver's license was used as an exhibit in court and that no traffic violation receipt had been issued to
Dava, Roxas sought the help of then Minister of Defense Juan Ponce Enrile in apprehending Dava
for driving without a license.  The Ministry of Defense later indorsed Roxas' request for assistance to
4

the Constabulary Highway Patrol Group (CHPG).

At around 7:30 in the evening of July 21, 1978, M/Sgt. Domingo Lising and S/Sgt. Arturo Viduya of
the CHPG saw the maroon Volkswagen car described by Roxas parked in front of the Uniwide
Department Store near the then Nation theater in Cubao, Quezon City. When the driver and his
companion arrived, Lising and Viduya confronted them and asked the driver for his license. They
were shown non-professional driver's license No. 2706887  with official receipt No. 0605870  issued
5 6

by Agency 2L Pampanga in the name of Michael T. Dava. When asked about the source of his
license, Dava informed them that his officemate had secured it for him.

Lising and Viduya invited Dava to the CHPG office in Camp Crame, Quezon City for questioning.
Dava refused to give a statement upon the advice of his lawyer. Lising then submitted a spot report
to Col. Maristela stating therein that "subject had violated Section 31 of RA 4136 for false
representation in the application of a driver's license intended to be used as a legal license."  In his
7

affidavit of apprehension dated November 16, 1978, Lising stated that he was 'about to book him for
violation of Section 31 of Rep. Act 4136, when subsequent investigation revealed that the Driver's
License above-mentioned is a Fake and a Falsity' and therefore a case for falsification and use of
falsified documents under Section 172 of the Revised Penal Code should be filed against
Dava.  Lising concluded that Dava's driver's license was fake because when he compared it with the
8

xerox copy of Dava's license which was attached to the record of the criminal case in Pasig, the
signatures and the dates of birth indicated in the two licenses did "not tally."9

Accordingly, an information for falsification of a public document was filed against Dava in the then
Court of First Instance of Rizal, Branch V at Quezon City.  One of the prosecution witnesses was
10

Caroline Vinluan of the Angeles City branch of the Bureau of Land Transportation (BLT). He testified
that hen was then the registrar of the said office when Dava's driver' license was brought to him by
lawyer Jose Francisco who was interested in knowing whether it was genuine or fake and if was
issued by the Angeles City agency of the BLT. He examine it and found out that it was "fake or
illegally issued" because form No. 2706887 was one of the fifty (50) forms which had been reported
missing from their office sometime in November, 1976 and that it was never issued to any applicant
for a license.  He added that any license that was not included their office index card was
11

considered as "coming from illegal source' and "not legally issued by any agency." 12

Vinluan stated that although the form used for the license was genuine,  the signature of the issuing
13

official was fake.  He "believed" certain persons had been apprehended for "plasticization" of
14

licenses outside their office  and that sometime November, 1976, agents of the National Bureau of
15

Investigation raided the house of a certain person who had in his possession some of the forms
which had been missing from office.  He concluded that the license was fake because the form was
16

issued by the central office to the Angeles agency, the license appeared on its face to have been
issued the San Fernando, Pampanga agency. 17

Dava was convicted of the crime charged. He appealed to then Court of Appeals  which affirmed the
18

lower court's decision on January 29, 1982. Dava filed a motion for reconsideration of the said
decision contending that the lower court had no jurisdiction to try the case. On April 27, 1982, the
Court of Appeals reversed and set aside its decision and issued a resolution the dispositive portion
of which reads:

WHEREFORE, as prayed for, our decision is hereby reconsidered and set aside, and
another judgment shall be entered annulling the proceedings in the court a quo without
prejudice to the refiling of the charges with the proper court. (Rollo, pp. 35-36.)

Consequently, the case was refiled with the Regional Trial Court of Pampanga, Branch 47 at San
Fernando as Criminal Case No. 2422. The information for falsification of a public document reads as
follows:

That on or about the 12th day of April, 1978, and for sometime prior thereto, in the
municipality of San Fernando, province of Pampanga, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused MICHAEL T. DAVA, a private individual,
did then and there willfully, unlawfully and feloniously falsify or cause to be falsified, a Non-
Professional Driver's license with Serial No. 2706887 covered by Official Receipt No.
0605870, dated January 24, 1978, a public document, by making it appear that the
signatories therein who are officials of the Pampanga LTC Agency participated in the
preparation thereof, when in truth and in fact they did not so participate and the accused
made use of the same knowing it to be falsified.

ALL CONTRARY TO LAW.

At the trial, the prosecution presented Antonio Roxas who testified on how he saw Dava driving a car
and that, knowing that Dava's license had been confiscated as a result of the filing of the homicide
and serious physical injuries through reckless imprudence case, he thereafter sought the assistance
of then Minister Enrile in apprehending Dava for driving without a license.  For his part, Domingo
19

Lising, who apprehended Dava, narrated in court how he first saw Daya driving a car along
Banahaw and N. Domingo Sts. in Quezon City until he finally confronted Dava at the vicinity of the
Araneta Coliseum and confiscated his driver's license. As earlier stated, he conclude that the driver's
license shown to him by Dava was fake because he noticed that, when compared with the license
attached to record of the criminal case filed against Dava, the license confiscated bore a different
signature and date of birth.
20

Daniel Severino, a sergeant of the Mandaluyong police, testified that he investigated the traffic
incident along Shaw Boulevard on October 19, 1975 which involved Dava and the two relatives of
Antonio Roxas. He himself confiscated Dava's no professional driver's license No. 1474427 which
he later turn over to the fiscal's office.21

In the course of Severino's testimony, the defense counsel informed the court that, upon a resolution
of the Court of Appeals, Dava was allowed by the lower court having jurisdiction over Criminal Case
No. 16474 to withdraw his driver's license 1474427 from the records of said case.  When confronted
22

by the court, Dava volunteered that he withdrew said license in December, 1982 and surrendered it
to the BLT Western District Office so that he could renew his license.  Hence, the evidence
23

presented before the Court was a mere xerox copy of said license  which also bears a notation that
24

Dava received original driver's license and its receipt on December 15, 1982. 25

Victor Martin, who had been the head of the San Fernando Pampanga branch of the BLT and whose
name appears registrar thereof in official receipt No. 0605870 which was supposed to be attached to
Dava's driver's license No. 270688 admitted that the form of the said license was genuine although
he could not tell whether its contents were likewise genuine because it was "opened" and
"spliced."  He asserted, however, that since the said form "did not emanate" from his office and "a
26

facsimile was not printed" over his name, said license was "not OK". 27

Martin said that he was informed by the property section of the BLT regional office that the number
in the license was one of "the numbers requisitioned by (the) Angeles City agency."  He affirmed
28

that drivers license No. 2706887 "was not issued by (their) agency"  although when recalled to the
29

stand, he admitted that the "2L" filled in the space for "Agency Code No." on the face of license No.
2706887 referred to the San Fernando agency.  Martin also confirmed the genuineness of official
30

receipt No. 0605870 although it was his assistant who signed it for him  and affirmed that the
31

amount of P10.00 indicated therein had been collected and received by his office. 32

Lawyer Jose Francisco testified that he went to the Angeles City office of the BLT to see its chief and
inquire about the number of driver's license issued to Dava and whether said office had indeed
issued them. According to him, the head of the office, Caroline Vinluan, advised him to verify from
the index card in the possession of the License Division head whether the Angeles City agency had
indeed issued Dava's license.  Thereafter, the officer-in-charge of the License Division of the BLT in
33

East Avenue, Quezon City, Leonardo R. Medina, issued a certification dated December 24, 1979 to
the effect that non-professional drivers license No. 2706887 in the name of Dava was "not registered
in (their) Index Card."
34

Francisco also informed the court that Carolino Vinluan, the former head of the Angeles City BLT
agency, had died on May 12, 1980.  He offered in evidence Vinluan's death certificate as Exh. J.
35

Another evidence presented by the prosecution was the transcript of stenographic notes of the
testimony of Carolino Vinluan which was taken on January 8, 1980 at the trial of Criminal Case No.
Q-10759 before the then Court of First Instance Rizal, Branch V at Quezon City. It was marked as
Exh. K said exhibit was part of the record of Criminal Case No. 10759 which was transmitted to the
Regional Trial Court Pampanga. 36

The defense presented only one witness: Felizardo Manalili. A friend of Dava and his former co-
trainee at the Sandoz Philippines, a pharmaceutical firm, Manalili testified that Dava quested him to
secure a driver's license for him because he had none. Manalili went to the San Fernando office of
the Land Transportation Commission (LTC) where he used to secure own license. At the LTC
branch office, he was "approached"  the fixers who roamed around the compound. When he as
37

them how much it would cost to secure a driver's license, he told that it would amount to P70 .
00.  He agreed to pay amount and gave the fixers the personal data of Dava.
38 39

After an hour, the fixers gave Manalili the license which was inside a plastic jacket. (Manalili
identified the license as Exh. B.) He examined it and found out that it looked "like a genuine and
authentic driver's license" to him. The license, which opened and unsealed, bore a signature in the
portion which showed the name Romeo Edu and contained all the personal data of Dava. Because it
did not bear the signature of Dava Manalili immediately gave the license to Dava and told him to sign
it immediately. Dava did so in Manalili's presence.40

On March 22, 1984, the lower court rendered a decision  finding that the license in question was
41

"fake or spurious", that was not duly issued by any proper government licensing age and that the
accused directly participated in the commission of the falsification or caused said falsification. The
court took into account the facts that Dava was "in dire need' of a license because of his work as a
detailman; that he received his genuine license from the court only on December 15, 1982, and that
Dava himself personally requested his friend, Manalili, to secure the license for him. It arrived at the
conclusion that since Dava was the possessor or user of the fake license, he himself was the forger
or the one who caused its forgery or falsification. The dispositive portion of the decision reads:

IN VIEW OF THE FOREGOING, this Court finds the accused Michael T. Dava guilty beyond
reasonable doubt, as principal of the came of Falsification of a Public Document, as defined
and penalized under the provisions of Article 172 of the Revised Penal Code, and
considering the absence of any mitigating or aggravating circumstance, hereby sentences
him under the Indeterminate Sentence Law to suffer an indeterminate imprisonment of one
(1) year and eight (8) months of prision correecional as minimum, to four (4) years, nine (9)
months and ten (10) days of prision correccional as maximum; and to pay a fine of Two
Thousand Five Hundred (P2,500.00) Pesos, Philippine Currency, plus the costs of this suit.

IT IS SO ORDERED.

Dava appealed to the then Intermediate Appellate Court,  which on September 30, 1985 affirmed
42

in in toto the decision of the trial court. On February 27, 1986, the appellate court denied Dava's
motion for the reconsideration of said decision finding that no new grounds had been raised therein.
Hence, the instant petition for review on certiorari.

Petitioner assails herein the reliance of the courts below on the testimony of Carolino Vinluan on the
ground that being a part of the annulled proceedings in Criminal Case No. Q-10759, it may not be
considered as admissible in evidence as it cannot qualify as a "testimony at a former trial" under the
provisions of Section 41, Rule 130 of the Rules of Court.

We find petitioner's contention to be meritorious. The resolution of the then Intermediate Appellate
Court in CA-G.R. No. 24312-CR, expressly annulled the proceedings had in Criminal Case No. Q-
10759 for lack of jurisdiction of the Quezon City court over the case. That ruling is founded on solid
jurisprudence. We had time and again held that in the absence of proof that the party raising the
issue of lack of jurisdiction is barred by estoppel,  a decision rendered by a court without jurisdiction
43

is a total nullity.  Being worthless in itself, all the proceedings founded upon it are equally
44

worthless.  Hence, the testimony of Vinluan is not only inadmissible in evidence but may well be
45

considered as totally nonexistent.

With the testimony of the late Carolino Vinluan out of the way, is there sufficient evidence to warrant
the conviction of petitioner for the crime charged?

The information specifically charges the petitioner with having made it appear in his driver's license
No. 2706887 that "officials of the Pampanga LTC agency participated" in in-preparation and with
having used the said driver's license knowing that it was falsified. The charges therefore are found
on the provisions of Article 172 (1) of the Revised Penal Code which punishes any private individual
who shall commit any the falsification enumerated in Article 171 specifically paragraph 2 thereof
which penalizes the act of causing it to appear that persons (public officials) have participated in any
act proceeding when they did not in fact so participate. The information also charges Dava with
having knowingly used a false document under the last paragraph of Article 172.

The evidence at hand proves that petitioner, misrepresenting that he had no driver's license, asked
his friend, Manalili, to secure one for him. Sometime in November, 1976, Manalili, who used to get
his own driver's license in San Fernando, Pampanga, was able to secure petitioner's driver's license
No. 2706887 through fixers at the Land Transportation Commission (LTC) agency in said
locality.  On January 24, 1978, petitioner renewed his license at the said office by paying the amount
46

of P10.00 for which he was issued official receipt No. 0605870. 47

In the renewal of drivers' license, the practice then was simply to present an official receipt showing
that at the previous year the licensee had paid for his driver's license to any agency of the LTC, and
to pay the renewal fee. As long as the transaction did not involve the issuance of "another form," a
driver did not have to fill up an application form for the renewal of a license. The said agency would
then issue an official receipt evidencing the renewal of the license but the driver's license itself would
not be changed. 48

Thus. on January 24,1978, when driver's license No. 2706887 together with official receipt No.
864321  were presented to the San Fernando LTC agency, the personnel therein issued official-
49

receipt No. 0605870 in the name of petitioner. Although the receipt was not personally signed by
office registrar Victor Martin but by his assistant, the receipt  was genuine and the amount indicated
50

therein was actually paid to and collected by the San Fernando agency.  The driver's license itself
51

may not have been issued by said agency  but its form was likewise genuine. However, according to
52

Martin, it was 'not OK' because it "did not emanate" from his office and "a facsimile was not printed
over" his name therein.  Moreover, according to the officer-in-charge of the license Division of the
53

Bureau of Land Transportation in East Avenue, Quezon City, non-professional driver's license No.
2706887 in the name of Michael Dava Tolosa "is not registered" in their index card. 54

Hence, while there is no doubt that driver's license No. 2706887 was a spurious one, the evidence
do not pinpoint the petition as the actual falsifier. Unfortunately, however, there are pieces of
evidence which prove beyond reasonable doubt at he caused the falsification and made use of the
falsified driver's license knowing it to be so.

The elements of the crime of using a falsified document in transaction (other than as evidence in a
judicial proceed penalized under the last paragraph of Article 172 are following: (a) the offender
knew that a document was falsified by another person; (b) the false document is embraced in Article
171 or in any of subdivisions Nos. 1 and 2 of Article 172; (c he used such document (not in judicial
proceedings), and (d) the use of the false document caused damage to another or at last it was used
with intent to cause such damage.  Except for last, all of these elements have been proven beyond
55

reason doubt in this case.

It is not disputed that it was petitioner himself who requested Manalili to get him a license. He
misrepresented to Manalili that he has not at any time been issued a driver's license.  Through this
56

misrepresentation and capitalizing on Manalili awareness of the dire necessity of obtaining a driver's
license the shortest time possible to enable petitioner to perform duties as detailman, petitioner was
able, in a very subtle clever manner, to induce Manalili to deal with "fixers" in securing the subject
driver's license. For indeed, there was no way Manalili could obtain a drivers license in so short a
without having to deal with "fixers." Thus, as petitioner calculated, Manalili, who appeared to have
been motivated by a sincere desire to help a friend, did not hesitate to deal with three fixers whom
he knew were not employees of the LTC to whom he paid P70.00 for the license even if the legal fee
then was only P15.00.  As it was in truth petitioner who induced and left Manalili with no choice but
57

to seek the aid of fixers, the fact that it was Manalili and not petitioner who dealt directly with said
fixers cannot exculpate petitioner from the charge of falsification. He is, beyond reasonable doubt, a
principal by inducement in the commission of said crime.

Petitioner cannot feign ignorance of the spurious character of his second driver's license No.
2706887. Having already obtained a driver's license, he knew that it was not legally possible for him
to secure another one. Otherwise, there would have been no need for him to misrepresent to his
friend Manalili that he was not then a holder of a driver's license. But even with this
misrepresentation, petitioner cannot even begin to believe that Manalili would be able to secure a
driver's license through legal means in about an hour's time.  The patent irregularity in obtaining
58

driver's license No. 2706887 was more than sufficient to arouse the suspicion of an ordinary
cautious and prudent man as to its genuineness and authenticity. In fact, Manalili testified that he
himself was surprised when the fixer handed to him the plastic jacket of the driver's license of
Michael Dava on November 4, 1976, a few hours after he had sought the fixer's assistance.  In 59

those days, all plastic jackets emanated from the LTC Central Office, which accounted for the delay
in the release of the license applied for. Under these circumstances, no "reasonable and fairminded
man" would say that petitioner did not know that his license was a fake. 60

A driver's license is a public document within the purview of Articles 171 and 172. The blank form of
the drivers license becomes a public document the moment it is accomplished.  Thus, when driver's
61

license No. 2706887 was filled up with petitioner's personal data and the signature of the region of
the San Fernando LTC agency was affixed therein, even if the same was simulated, the driver's
license became a public document.

The third element of use of the falsified document is proven by the fact that when petitioner was
apprehended by Lising on April 12, 1978 it was in his possession and it was what he presented
Lising to show that he had a license. Because he was a detailman who did his job with the use of a
car, it is probable that from November 4, 1976 (its date of issuance) until April 12, 1978, petitioner
used driver's license No. 2706887.

The driver's license being a public document, proof of the fourth element of damage caused to
another person or at least an intent to cause such damage has become immaterial. In falsification of
public or official documents, the principal thing being punished is the violation of the public faith and
the destruction of the truth proclaimed therein.62

In his attempt at exculpation, petitioner asserts that the following ruling in People vs.
Sendaydiego,  should be applied in his favor:
63
 The rule is that if a person had in his possession a falsified document and he made use of it
(uttered it), taking advantage of it and profiting thereby, the presumption is that he is the
material author of the falsification. This is especially true if the use or uttering of the forged
documents was so closely connected in time with the forgery that the user or possessor may
be proven to have the capacity of committing the forgery, or to have close connection with
the forgers, and therefore, had complicity in the forgery (U.S. vs. Castillo, 6 Phil. 453; People
vs. De Lara, 45 PMI. 754; People vs. Domingo, 49 Phil. 28: People vs. Astudillo, 60 Phil.
338; People vs. Manansala, 105 Phil. 1253). In the absence of a satisfactory explanation,
one who is found in possession of a forged document and who used or uttered it is
presumed to be the forger (Alarcon vs. Court of Appeals, L-21846, March 31, 1967, 19
SCRA 688; People vs. Caragao,
L-28258, December 27, 1969, 30 SCRA 993). (Emphasis supplied.)

We agree with the petitioner that the presumption enunciated in the Sendaydiego case is not
absolute as it is subject to the exception that the accused should have a satisfactory
explanation why he is in possession of a false document.  His explanation, however, is
64

unsatisfactory as it consists mainly in passing the buck to his friend, Manalili. As stated above,
Manalili himself could not have acted on his own accord without the prodding of petitioner.

We cannot help but comment on petitioner's allegations on the role of fixers in government agencies.
To him, a fixer is a "necessary evil" who could do things fast for the right amount. He is "not
necessarily involved in the commission of forgery or falsification of official documents" and he shares
his fees with "insiders."
65

Fixers indeed appear as undetachable fixtures in government licensing agencies. Why they
proliferate is a sad commentary not only on our bureaucracy but also on our own people. While not
all fixers are engaged in illegal activities for some simple serve as "facilitators," they nonetheless
provide sources for exploitation of the unknowing common people who transact business with the
government and for corruption of the gullible government employees. Their unwanted presence must
be dealt with accordingly and the soonest this is undertaken by our government agencies the better
for all of us.

WHEREFORE, the decision of the respondent appellate court is hereby affirmed. Let a copy of this
decision be served on that Department of Transportation and Communication. Cost against the
petitioner.

SO ORDERED.