01. DY V. MGA TAO NG PILIPINAS, G.R. NO.

189081
August 10, 2016 | Jardeleza, J. | Rule 111: Implied institution of the civil action with the criminal
action; Exceptions: Institution

PETITIONER Gloria S. Dy
RESPONDENT People of the Philippines, Mandy Commodities Co. Inc, represented by William
Mandy
SUMMARY:
Gloria Dy proposed the purchase of a property owned by Patranco to William Mandy. To facilitate the
purchase, Mandy agreed to obtain a P20m loan from ICBC, with the petitioner assisting in securing the
loan through a chattel mortgage on MCCI's warehouse. MCCI faced foreclosure due to loan default,
prompting Mandy to instruct Dy to facilitate the loan payment. Dy claimed she encashed checks
totaling P21,706,281 and delivered the amount to Mandy, while Mandy claimed that he delivered the
checks to Dy for loan payment. The mortgaged property was then foreclosed, leading Mandy to file an
estafa complaint. The RTC acquitted Dy due to insufficient evidence. Despite the acquittal, the RTC
ordered Dy to pay the check amounts as civil liability. The CA affirmed the RTC's decision, prompting
the current petition for certiorari. Issue: Whether civil liability ex delicto may be awarded to the herein
respondent. (NO) The Court held that there is no proof of any act or omission constituting criminal
fraud. Thus, civil liability ex delicto cannot be awarded because there exists no act or omission is
punishable by law that can serve as the source of obligation.
DOCTRINE:
In a contract, a party's failure to comply with his obligation is only a contractual breach. Thus, any
finding that the source of obligation is a contract negates estafa. The finding, in turn, means that there
is no civil liability ex delicto.

Facts:
1. Gloria Dy (petitioner), former General Manager of Mandy Commodities Co., Inc. (MCCI)
proposed to William Mandy (respondent), the purchase of a property owned by Patranco.
2. To execute the purchase, Mandy agreed to obtain a loan with ICBC, and through the petitioner,
ICBC granted the loan of P20m. MCCI also secured the loan through a chattel mortgage over
their warehouse.
3. Soon after, MCCI received a notice of foreclosure over the property due to failure to pay its loan
obligations. To prevent this, Mandy instructed Dy to facilitate the loan payment. MCCI issued
multiple checks, with varying dates, amounting to P 21, 706, 281.
4. At this point, Mandy claimed that he delivered the checks to Dy, instructing the latter to pay the
loan. In Dy’s defense, she claimed she encashed the checks and delivered the amount to Mandy.
5. The mortgaged property was subsequently foreclosed due to MCCI’s default. Consequently,
Mandy filed a complaint for estafa before the office of the prosecutor, and an information was
filed before the RTC of Manila.
6. RTC: The RTC acquitted Dy because the prosecution failed to establish beyond reasonable doubt
the essential elements of estafa, specifically conversion. Furthermore, the trial court held that
the two entered into a contract of loan. However, despite this, the RTC still ordered Dy to pay
the amounts of the checks as civil liability.
7. CA: The CA affirmed the RTC’s decision, holding that while the petitioner is acquitted based on
reasonable doubt, the court may still find her civilly liable.
8. Hence the current petition for certiorari.
Issue/s:
Whether civil liability ex delicto may be awarded to the herein respondent. (NO)

Dispositive Portion:
Petition in GRANTED.
CA decision REVERSED.
So ORDERED. EME

Ruling:
No, civil liability ex delicto cannot be awarded to the herein respondent. In the present case, the Court
referred to the findings of the RTC and CA wherein such courts found that Mandy delivered the checks to
the petitioner under a loan agreement. In light of this, the Court held that absent the elements of
misappropriation or conversion, there can be no crime of estafa. There is no proof of any act or omission
constituting criminal fraud. Thus, civil liability ex delicto cannot be awarded because there is no act or
omission punishable by law that can serve as the source of obligation. Any civil liability arising from the
loan takes the nature of a civil liability ex contractu and such does not pertain to the civil action
deemed instituted with the criminal case. In view of foregoing, the Court further held that the civil
liability of the herein petitioner arises from a contract and such is a different source of obligation apart
from an act or omission punishable by law and must be claimed in a separate civil action.