She is no swindler

Claire offered for sale to Ric portions of land located in the city of pomelos and jackfruit. During the negotiations, Claire told Ric that the title to the land she was selling had no problems. She also informed him that the area subject of the proposed sale would still be segregated from the mother title.

Claire’s efforts bore fruition. The parties executed an Agreement to Buy and Sell, under which she agreed to sell to Ric a 200-sqm portion of the land, which represents a portion of her share in the estate of her deceased father, Nic. Ric paid the required down payment. Acting on his request, Claire agreed that Ric would construct his house on the portion of the land he bought.

After two years, the unexpected happened. Representatives from JSF & Sons Inc. demolished Ric’s house. It was only then that he discovered that the lot sold to him had been the subject of a dispute between Claire’s family and JSF and Sons.

A furious Ric demanded Claire to return the amount he paid for the land, as well as pay the value of the house demolished. But the latter refused to heed these demands.

Q: Can Claire be held criminally liable under Article 316, paragraph 1 of the Revised Penal?

A: No. For a successful prosecution of the crime of swindling under Article 316, paragraph 1 of the Revised Penal Code, the following essential elements of this crime must be established: (1) that the thing be immovable, such as a parcel of land or a building; (2) that the offender who is not the owner of said property should represent that he is the owner thereof; (3) that the offender should have executed an act of ownership, e.g., selling, leasing, encumbering, or mortgaging the property; and (4) that the act be made to the prejudice of the owner or a third person.

The presence of the first and third elements are beyond question, as the parties admitted that Claire sold to Ric a parcel of land. The fourth element is likewise settled, as Claire does not deny Ric paid her. The fact of destruction of Ric’s house by the representatives of JSF & Sons is also not disputed.

With regard to the second element, the same is wanting. Claire never pretended to be the lawful owner of the property sold. In fact, Ric was aware that the title to the land being sold to him was still under the name of Claire’s deceased father, Nic.

Claire moreover told him that during the negotiations for the sale that the area subject of the sale would still be segregated from the mother title. In addition, the Agreement to Buy and Sell provides that “xxx the seller shall cause the subdivision of the title and take out a 200-sqm portion of the buyer from the seller’s 936-sqm share.”

Under these circumstances, it is clear that Claire did not pretend to be the owner of the property sold. From the very start, she made it clear to Ric that the subject property was still under the name of her father; and that the area subject of the sale would still be segregated from the mother title. The element of deceit—central to prosecutions for swindling—is therefore wanting.

Q: Can Claire be held criminally liable under Article 316, paragraph 2 of the Revised Penal Code, as amended?

A: No. For Claire to be held liable, the following elements must be proven beyond reasonable doubt: (1) that the thing disposed of be real property; (2) that the offender knew that the real property was encumbered, whether the encumbrance is recorded or not; (3) that there must be express representation by the offender that the real property is free from encumbrance; and (4) that the act of disposing of the real property be made to the damage of another.

Significantly, the Agreement to Buy and Sell between Claire and Eric did not contain any representation by Claire that the property being sold was free from any encumbrance. However, the TCT, which Ric was given a copy thereof, bore the following annotations:

x x x x

Entry No. 1131326 – AFFIDAVIT OF ADVERSE CLAIM – filed by JSF and Sons Inc. affecting the property covered by this Certificate of Title which is the subject of Deed of Sale executed between the said corporation and the registered owner. This instrument was executed before Notary Public of Davao City xxx, as Doc No. x x x

Date of instrument : Oct. 28, 1998;

Date of inscription : Oct. 29, 1998 at 8: 10 a.m.

Q: Does paragraph 2 of Article 316 prohibit the sale of an encumbered property?

A: No, paragraph 2 of Article 316 does not prohibit the sale of an encumbered property. The vendor must have represented to the buyer that the property was free from encumbrance. What brings about criminal liability is the deceit in selling the property. Corollarily, the deed must have a statement of warranty that is false in order to commit the offense.

Claire’s passive attitude regarding the presence of an adverse claim, and her assumption that Ric became aware of this inscription after showing to him a copy of the TCT and never complained, is not sufficient to constitute fraud within the meaning of the law. The fraud and/or deceit by misrepresentation contemplated by law must be the result of overt acts. They cannot be implied or presumed.

(Source: Mainar vs. People of the Philippines, G.R. No. 184320, July 29, 2015)

Ma. Soledad Deriquito-Mawis is Dean, Lyceum of the Philippines University; Chairman, Philippines Association of Law Schools; and Founder, Mawis Law Office