estafa What Is Estafa?Sham, abuse of trust and confidence, serious dishonesty – all these words describe Estafa, a
crime commonly committed here in the Philippines.

There is Estafa when one person is damaged by another person who either tricked another
into believing a false pretense, or abused the trust and confidence that was reposed on him. In
either case, the victim parts with his property or money which the offender eventually gains for
himself.

What is the Penalty for Estafa?

In any crime, there should always be a corresponding penalty, in the case of estafa, the penalty
is imprisonment. In Estafa, the severity of the penalty depends on the value of property or
amount of money taken by the offender from the victim. Generally, as long as there is damage
to another caused by deceit or abuse of confidence, whatever amount was obtained, Estafa is
committed; but the most severe penalty is given if the amount involved is over P12, 000.00.

How may Estafa be committed?

Estafa may be committed by abuse of confidence. It is usual in any relationship that one of the
parties reposes trust and confidence in the other. Usually, in this case, the offender is under an
obligation to hold the victim’s property in trust for the victim and the offender is responsible
for delivering or returning the same property back to the victim. Estafa may be committed if the
offender, instead of returning or delivering the same, misappropriates or converts the property.
This means that the offender uses the property as if it was his own, or uses the property in a
manner different from what had been previously agreed upon.

Estafa may also be committed by deceit. Under this manner, Estafa is committed when the
offender uses false pretenses to make the victim believe that the offender has the qualifications,
power or influence to do something, and the victim, relying on such pretenses, parts with his
property or money.

Again, in both manners, the victim suffers damage, which value can be computed.

Where to file a case of Estafa?

Estafa, generally, has two essential elements. First element is deceit , or abuse of confidence;
and the second element is damage. Estafa is one of those crimes considered as ‘transitory” or
continuing crime. This only means that it may be filed in any court where any of its essential
elements were committed.

Thus, if deception or abuse of confidence was made in Manila and damage was caused in
Makati, then the case may be filed either in Manila or in Makati.

ESTAFA BY ABUSE OF CONFIDENCE; EXAMPLE AND SCENARIO

Estafa with Abuse of Confidence

In the case of Anthony L. Ng vs. People of the Philippines, GR NO. 173905, April 23, 2010, Anthony was
engaged in the business of building and fabricating telecommunications towers. He applied for a credit
line with Asiatrust wherein Asiatrust will provide Anthony with goods to be used for his business. To
approve his loan application, Anthony was asked by Asiatrust to sign several documents including a
Trust Receipt Agreement.

Petitioner received the goods; however, he failed to pay his loan to Asiatrust. Thus, Asiatrust filed a case
for Estafa against Anthony for violating their Trust Receipt Agreement, which is to sell the goods and
return the profits of the sale, or to return the goods should he fail to sell them.

In this case, the Supreme Court decided that Anthony Ng DID NOT commit Estafa.

First of all, it should be determined whether or not the agreement is a Trust Receipt Agreement. If it is,
then Anthony has the obligation to deliver the price of the sale if he has sold the goods, and if he was
not able to do so, then he should return the goods to Asiatrust. However, if their Agreement was not a
Trust Receipt Agreement, then Anthony is not under any obligation to return anything to Asiatrust, his
only obligation is to pay the loan.

The Supreme Court said that the agreement was not a Trust Receipt. The goods received by Anthony
were never intended for sale, it was intended to be used for his business. Therefore, Anthony was
not under any obligation to return the goods or the price of their sale – so, there was no abuse of
confidence to speak of.

Estafa by Abuse of confidence = Material Posession + Juridical Possession + Misappropriation/
Conversion.

Material possession means that the possessor has physical possession of the property; that it is within
his control. There is juridical possession when a property has been temporarily transferred to another,
and the transferee has a right over the property for the span of time that it was temporarily within his
possession. Such right of the transferee can be used against the real owner, so long as it is within the
time that the owner and the transferee have agreed upon. Misappropriation means that the property
was used by the offender as if it was his own, while conversion is the use of the property in a manner
different from that agreed upon by the parties.

In application, consider this scenario: John and Marcia are friends. John borrowed Marcia’s car and
he promised Marcia that he will return it after three days, Marcia agreed. However, after three days,
John refused to return the car, instead, he sold Marcia’s car to Lumen. In this case, John is physically in
possession of the car, so there is material possession. He was given the right to borrow the car for three
days, so there is juridical possession. After three days, he sold the car as if it was his own, so there was
misappropriation. Therefore, in this case, Estafa by Abuse of Confidence is committed.

ESTAFA BY DECEIT; SAMPLE SCENARIO

Another manner of committing Estafa is by deceiving another. In this situation, the offender gives
misrepresentations to the victim, and in return the victim, believing that the offender is really who he
is and he really can do what he said he could, relies on the misrepresentations of the offender. The end
result is the same, the victim parts with his property or money and suffers damage.

Take for example the case of Rosita Sy vs. People of the Philippines, GR No. 183879, April 14, 2010. In
this case, Rosita Sy was charged with estafa for having deceived Felicidad Navarro. Rosita told Felicidad
that she can process Felicidad’s employment in Taiwan if Felicidad can pay her P120, 000.00. When
Felicidad agreed and paid the said amount to Rosita, Rosita gave false documents to Felicidad to be
used by the latter for her application for Alien Certificate of Registration and Immigrant Certificate of
Registration. The Taiwanese authorities rejected the false documents. Thus, Felicidad charged Rosita
with estafa.

The Supreme Court, in this case, ruled that Rosita should be held liable for estafa by means of deceit.
According to the Supreme Court, all the elements of estafa by deceit are present in this scenario.
First, Rosita falsely pretended that she had the qualifications to have arrangements for Felicidad to be
employed in Taiwan. Second, because of Rosita’s misrepresentation, Felicidad was made to pay her the
amount of P120, 000.00. However, despite Felicidad’s payment, Rosita’s promises did not happen. So,
the transaction has caused damage to Felicidad.

Simply stated, in estafa, there should be an offender who represents himself to be someone who he
really is not, or to be someone capable of doing something which he really cannot; and there should be
a victim who believed and relied on the false representations of the offender. What completes estafa is
the damage that is caused to the victim who gave money or property because he believed in the false
representations of the offender.

WHAT IS THE LIABILITY OF A PARTNER IN ESTAFA?

May a partner be held liable for estafa by his co-partners? Looking at the elements of estafa, the normal
answer should be “yes” however, a long line of Supreme Court decided cases say otherwise.

In a Contract of Partnership, two or more persons bind themselves to contribute money, property,
or industry to a common fund, with the intention of dividing the profits among themselves. Once a
partnership is formed, it becomes a new person, one with identity that is separate from the persons
forming the partnership. If a person enters into a partnership, he invests his money or property in the
risks or benefits of the partnership. So, if a person wants his contribution back, it is not the obligation
of the other partners to return his contribution; it is now the partnership’s duty to do so. The action
that is available to a partner who wishes to recover his capital is not estafa but a civil action against the
partnership.

This was the doctrine laid down in the case of United States vs. Eusebio Clarin, GR No. 5840, which was
decided by the Supreme Court in September 17, 1910. In this case, Pedro Larin entered into a contract
of Partnership with Pedro Tarug, Eusebio Clarin and Carlos De Guzman for the business of buying and
selling mangoes. Pedro Tarug, Eusebio, and Carlos were able to obtain profit but they were not able to
give Pedro Larin half of the profit, as agreed upon, and they did not give him an accounting of Larin’s
capital. So, Larin filed a case of estafa against his three co-partners. The Supreme Court dismissed the
complaint for estafa, but they allowed Larin to file a civil action.

In 1997, an almost similar situation occurred. In the case of Carmen Liwanag vs. CA and the People
of the Philippines, G.R. No. 114398, Carmen Liwanag and Isidora Rosales entered into a contract of
partnership wherein Rosales contributed P536, 650.00 for the purpose of buying cigarettes to be sold by
them. After some time, Liwanag suddenly stopped informing Rosales of the updates of their business.
Because of this, Rosales filed a case of estafa against Liwanag. In this case, the Suprece Court held
Liwanag liable for estafa.

What is the Difference Between the Two Cases?

In the first case, US vs. Clarin, the capital contributed by Larin was for the general purpose of forming
a partnership; while in the second case, Liwanag vs. CA and People of the Philippines, the money
contributed by Rosales was for the specific purpose of buying cigarettes.

It should be noted that as a general rule, if a partner wants to recover the capital he has contributed to
the partnership, he can only do so by a civil action and not by filing an estafa case. The exception to this
is when the money contributed is for a specific purpose. In this case, if the money was not applied to
such specific purpose, instead it was misappropriated, then the partner who misappropriated should be
held liable for estafa.