Free at last

Jess is the chairman and chief executive officer (CEO) of The Promise Land Corp. (PLC), a corporation engaged in the business of developing subdivision and building houses/condominiums therein for sale to the general public.

In 2001, PLC through its president Jac, borrowed P2.5 million from Atty. Lan. The purpose of the loan was to buy the land owned by the Second Bank, which is adjacent to PLC’s property. A Deed of Real Estate Mortgage was executed by the parties whereby the property owned by PLC was put up as collateral for the loan.

After the sale of Second Bank’s property was consummated, title thereto was transferred in the name of PLC.

In 2003, another Deed of Real Estate Mortgage was executed by PLC, through Jess, by virtue of Board Resolution issued in favor of Atty. Lan for an additional loan of P4M. On the same date, Jess executed a promissory note acknowledging the indebtedness of P4M and promising to pay the said amount in accordance with the schedule mentioned in the Deed of Real Estate Mortgage.

Later, Jess and Atty. Lan executed a Memorandum of Agreement (MOA) stipulating, inter alia, that Jess was desirous of borrowing the mortgaged transfer certificate title to be surrendered to the Home Development Mutual Fund or PAG-IBIG Fund to obtain a loan the proceeds of which shall be paid to Atty. Lan in satisfaction of Jess’ obligation; that the parties shall open a joint account with a reputable banking institution where the proceeds of the PAG-IBIG Fund loan shall be deposited; and that Jess shall make 11 installment payments as per schedule set forth in the said MOA. Pursuant to the MOA, Jess issued 11 postdated checks.

Later that year, Jess and PAG-IBIG Fund, executed a Loan Agreement whereby PLC, as borrower, was granted a developmental loan by PAG-IBIG Fund in an amount not exceeding P30,000,000 to finance the development of the former’s subdivision project subject of the MOA.

The first tranche of the P30,000,000 loan was released by PAG-IBIG Fund to PLC. In view of the failure of petitioner to pay the loan of to private complainant despite repeated demands therefor, or to return TCT No. 261204 as agreed upon in their own MOA, Atty. Lan filed a complaint against petitioner for Estafa under Article 315, paragraph 1 (b) of the Revised Penal Code (RPC).

Q: What are the elements of Estafa under paragraph 1 (b), Article 315 of the Revised Penal Code?

A: The essential elements of Estafa under Article 315, par. 1 (b) are as follows:

1. that money, goods or other personal properties are received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of, or to return, the same;

2. that there is a misappropriation or conversion of such money or property by the offender or denial on his part of the receipt thereof;

3. that the misappropriation or conversion or denial is to the prejudice of another; and

4. [T]hat there is a demand made by the offended party on the offender.

Q: Is Jess guilty of estafa?

A: No. There cannot be any misappropriation or conversion by petitioner to his own personal use, benefit or advantage, of the TCT or the proceeds of the PAG-IBIG Fund loan granted to PLC since Atty. Lan is fully aware of the purpose of Jess/PLC for borrowing the title and how the proceeds of the PAG-IBIG Fund loan should be applied. Moreover, the title and the PAG-IBIG Fund loan proceeds are owned by PLC and not by Jess, and more so, not owned by Atty. Lan. If there was any misappropriation or conversion of TCT No. 261204 or the PAG-IBIG Fund loan proceeds, the aggrieved party should be PLC, and certainly not Jess. For his uncollected debt, Atty. Lan’s remedy is not a criminal action, but a civil action against petitioner.

To stress, misappropriation or conversion refers to any disposition of another’s property as if it were his own or devoting it to a purpose not agreed upon. It connotes disposition of one’s property without any right. As earlier stated, the title and the PAG-IBIG Fund loan proceeds belong to and are owned by PLC, and not by Atty. Lan.

(Source: Coson vs. People of the Philippines, G.R. No. 218830, Sept. 14, 2017)

Ma. Soledad Deriquito-Mawis

Dean, Lyceum of the Philippines University

Chairman, Philippine Association of Law Schools

Mawis Law Office