People of the Philippines vs. Noel O. Mesina

June 9, 1998 PSE CIRCULAR FOR BROKERS NO. 1301-98 SUBJECT : People of the Philippines vs . Noel O . Mesina PhileoAllied Securities (Philippines), Inc., through its Compliance Officer Ma. Lourdes T. Lugtu, furnished the Exchange a copy of the Decision dated 31 March 1998 of the Regional Trial Court in Makati City, Branch 141, in Criminal Case No. 94-6069 entitled "People of the Philippines vs. Noel O. Mesina," convicting the accused of the crime of Estafa and sentencing him to imprisonment ranging from ten (10) years and one (1) day to twenty (20) years and to pay Corinthian Securities, Inc. the amount of P514,100.00 plus costs. Attached is a copy of the decision dated 31 March 1998 for your information and/or dissemination to your traders/salesmen. (SGD.) JOSE LUIS U. YULO, JR. President and Chief Executive Officer April 27, 1998 PHILIPPINE STOCK EXCHANGE, INC. PSE Plaza, Ayala Triangle, Ayala Avenue Makati City Attention: Mr . Jose Luis U . Yulo, Jr . President Gentlemen : We are transmitting herewith a copy of the favorable decision of the Regional Trial Court Branch 141 in the case of People of the Philippines vs. Noel O. Mesina, convicting the accused and sentencing him to imprisonment ranging from ten (10) years and one (1) day to twenty (20) years and to pay PhileoAllied Securities (Phils.), Inc. (formerly Corinthian Securities, Inc.) the amount of P514,100.00 plus costs. For your information. Very truly yours, (SGD.) MA. LOURDES T. LUGTU Compliance Officer CRIM. CASE NO. 94-6069 PEOPLE OF THE PHILIPPINES, vs. NOEL O. MESINA, accused. D E C I S I O N Noel O. Mesina is charged with estafa allegedly committed as follows: "That on or about and sometime during the period comprised from July, 1986 to July, 1993, in the Municipality of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, being then the trading manager employed by herein complainant-corporation, Corinthian Securities, Inc. in-charged in the handling of several accounts of the company in the stock market business and dealership of securities, did then and there wilfully, unlawfully and feloniously defraud said complaint-corporation, Corinthian Securities, Inc. in the following manner, to wit: The said accused by means of their pretenses and fraudulent representations to said complainant-corporation under Account No. 001 was a true and genuine company account of Guild Inc. with Corinthian Securities, Inc., and by means of other similar deceit, succeeded in inducing said complainant-corporation to issue several checks in favor of Guild Securities, Inc. as payment for certain transactions in the total amount of P536,901.35, the accused well knowing that all his representations were false and merely for the purpose of defrauding herein complainant-corporation as the Guild Securities, Inc. Account No. 001 is a personal account of the said accused, and have been employed by the accused for the purpose of obtaining as the accused in the fact obtained and received the total amount of P536,901.35, from Corinthian Securities, Inc., to the damage and prejudices of complaint-corporation is the aforementioned total amount of P536,901.35 Contrary to law." When arranged, accused pleaded not guilty After the prosecution had rested its case, accused thru counsel moved for leave of court to file demurrer to evidence. The motion was denied. Against the ruling of this Court, accused nevertheless filed demurrer to evidence, contending that the prosecution failed to prove all the elements of the offense charged, hence he should be acquitted. By filing demurrer to evidence without leave of court, accused had waived his right to present evidence perforce the case was submitted for decision solely on the prosecution's evidence. 1 The prosecution presented six witnesses, namely, Maria Lourdes Lugtu, Lilia Reyes, Justino Fabian, Leonides Manacpo, Norma David and Paul Aquino, and documentary exhibits. Stripped of non-essentials, the facts as established by the prosecution's evidence follow: Private complainant Corinthian Securities, Inc., (hereinafter referred to as Corinthian) is a duly licensed stock broker and dealer of securities. 2 As stock broker, it charges commission on the buying and selling transactions of its clients. Normally, the rate of commission is one (1%) percent. There are however circumstances where it charges lower rates of commission, as where the transaction was among brokers, in which case only one fourth () of one (1%) percent is charged. As dealer of securities, it earns profits from transactions for its own account. 3 Sometime prior to July 1991, accused was employed by Corinthian as Authorized Clerk and Trading Manager. As Authorized Clerk accused was the chief trader of Corinthian on the floor of the exchange. 4 He was authorized to take orders from clients, conclude transactions, sign contracts, and open account for his clients without prior approval of his superiors and such transactions were binding against Corinthian. 5 As trading manager, accused was responsible of entering all transactions in the daily blotter. The daily blotter contains the summary of all buying and selling transactions each day on the basis of which he prepares the necessary documents including the preparation of checks in payment of obligations to clients. Needless to say he occupied a position of trust and confidence. 6 Sometime in July, 1993, Paul Aquino, President of Corinthian confronted accused on reported activities that assailed his integrity as Trading Manager. Accused did not say anything, stood up and left. After three days, specifically on 23 July 1993, he submitted his resignation. His resignation was accepted. On or about 5 August 1993, Corinthian's Vice-President Justine Fabian reported to Mr. Paul Aquino, that there were about one million shares of stock which were ordered by a client to be sold which were in fact sold but the certificates corresponding to said shares of stock were not found in the company's vault. It appeared that the missing shares of stocks were previously sold to the account of GSI 001. The problem was solved by Mr. Paul Aquino by borrowing certificates of stock from other brokers. In view thereof, Mr. Paul Aquino ordered the review and audit of all accounts being handled by accused, with particular focus on GSI 001 account. Investigation by Corinthian disclosed that GSI 001 account was spurious. It was created by accused for his personal use. GSI 001 which was supposed to represent the account of Guild Securities, Inc., also duly licensed stock broker, was disowned by the latter when verified by Mr. Paul Aquino. Lilia Reyes, bookkeeper of Guild Securities, Inc. testified that GSI 001 was not the account of Guild Securities, Inc.; 7 that accused was a client of Guild Securities, Inc., and had outstanding monetary obligations to Guild Securities, Inc. at the time the checks were issued, 8 and that Corinthian did not have any outstanding obligation to Guild Securities, Inc. 9 Accused made transactions under account GSI 001 from January, 1987 through August, 1988, and during said period, ten (10) checks were issued to Guild Securities, Inc. which upon receipt thereof, credited them to the personal account of accused. This fact was established by the receipts 10 received from Guild Securities, Inc. which indicated that the checks were acknowledged and receipted in the name of accused Noel Mesina, instead of Corinthian, and applied to his account. The original of said receipts were not found in the files of Corinthian which were handled by accused. Specifically, the ten (10) Rizal Commercial Banking Corporation (RCBC) checks were drawn up in favor of Guild Securities, Inc., bearing the following data, to wit: Check No. Date Amount 247710 11 17 February 1987 P13,072.25 247762 12 20 March 1987 P13,485.62 377923 13 10 August 1987 P43,750.82 462992 14 7 October 1987 P24,778.24 431308 15 26 October 1987 P69,595.37 569860 16 25 January 1988 P42,935.85 521308 17 25 March 1988 P22,493.12 634325 18 22 April 1988 P19,486.25 521408 19 29 June 1988 P57,081.31 569961 20 24 August 1988 P230,222.52 The vouchers 21 corresponding to the foregoing mentioned checks were prepared by accused who caused them to be signed by the Vice-President of Corinthian, Justino Fabian. They were personally taken by accused supposedly to be delivered to Guild Securities, Inc. A thorough study and analysis of the transactions by accused under GSI 001 account was made by Paul Aquino, President of Corinthian who testified that even if GSI 001 were the legitimate account of Guild Securities Inc., there were overpayment to it. Thus, with respect to the check marked as Exhibit "F" in the amount of P43,750.82, there as an overpayment of P23,350. Based on the transactions covering the period for which the check was issued from 20 March 1987 to 10 August 1987 22 only P20,400.00 would be the gain of Guild Securities, Inc. 23 There was also overpayment to Guild Securities, Inc. for the transactions during the period from 25 April 1988 to 29 June 1988 24 for which check marked as Exhibit "C" in the amount of P57,081.31 was issued and from 30 June 1988 to 24 August 1988 for which check marked as Exhibit "B" in the amount of P230,222.52 was issued. Mr. Paul Aquino testified that he scrutinized each and every transaction under account GSI 001 during said period and he found out that there was an overpayment of at the very least P215,000.00. 25 Paul Aquino further testified that it was the impression of the company that GSI 001 was a legitimate account of Guild Securities and in view thereof, it charged on said account a lower rate of commission, that is one-fourth of one percent instead of one percent. 26 If account GSI 001 were in the name of an individual person, Corinthian would have realized a commission in the total amount of about P369,000.00 for all the transactions under said account. 27 Considering however that this amount is equivalent to a straight one percent commission and that one-fourth of one percent was actually deducted by Corinthian, such amount must be deducted. Thus, one-fourth must be deducted from P369,000.00, or the amount of P92,250.00, and therefore Corinthian was deprived of the sum of P276,750.00, or three-fourth of P369,000.00, by way of legitimate commission from all the buying and selling transactions under the subject, GSI 001 account. The factual issue that this Court is tasked to resolve is whether or not prosecution's evidence, let alone, is adequate to sustain conviction. Accused is charged with estafa committed by means of deceit. Generally, estafa is committed by defrauding another either by means of abuse of confidence or deceit, resulting in damage or prejudice capable of pecuniary estimation, to the offended party of third person. More specifically, the elements of estafa by means of deceit are: (1) that there must be false pretense, or 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, and (4) that as a result thereof, the offended party suffered damage. 28 The specific provision of law under which accused is charged reads: "(a) By using a fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits." 29 By creating a simulated account for Guild Securities, Inc., accused employed deceit similar to falsely pretending credit, agency, business or imaginary transaction thereby induced private complainant to approve the issuance of the subject checks which ultimately were credited to his personal account. Damage had been caused upon private complainant consisting of fraudulent overpayment and deprivation of legitimate commissions on all the buying and selling transactions for the spurious account GSI 001. For, were it not for the false representation of accused that account GSI 001 was the account of Guild Securities, Inc., the commission that should have been collected from the series of buying and selling under said account was straight one (1) percent not one fourth of one percent. In fine, this Court is convinced with moral certainty that the culpability of accused had been established by the uncontradicted evidence adduced by the prosecution. All the elements of estafa by deceit or false pretense have been proven by proof beyond reasonable doubt. The penalty for estafa is graduated, depending upon the amount involved in the fraud. Thus, the law reads: "ARTICLE 315. Swindling (estafa) . Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by: Ist. The penalty of prision correccional in it maximum period of prision mayor in its minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos; and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory penalties which may be imposed and for the purpose of the other provisions of this Code, the penalty shall be termed prision mayor or reclusion temporal , as the case may be;" Under the evidence, the total overpayment to the spurious account was P238,350.00. Likewise, private complainant was deprived of legitimate commission for all the transactions in the total amount of P276,750.00. The grand ( Illegible portion in PSE file ) damage or prejudice caused upon private complainant was therefor P314,100.00. Obviously, the imposable penalty is reclusion temporal . The maximum penalty prescribed by the law. There are no ( Illegible portion in PSE file ) or aggravating circumstances under the evidence. WHEREFORE, this Court hereby finds Noel O. Mesina guilty beyond reasonable doubt of the crime of estafa as defined under Article 315, par. 2(a) of the Revised Penal Code, without any aggravating or mitigating circumstance, and sentences him to suffer an indeterminate penalty of imprisonment ranging from ten (10) years and one day of prision mayor as minimum to twenty (20) years of reclusion temporal as maximum, to indemnify Corinthian Securities, Inc. in the amount of P514,100.00; and to pay the costs. SO ORDERED. Done this 31st day of March 1998 in Makati City. (SGD.) MANUEL D. VICTORIO Judge Footnotes 1. Rule 119, Section 15, Rules On Criminal Prosecution 2. TSN p. 6, 17 July 1997. 3. TSN pp. 6-7, Ibid. 4. TSN pp. 13, 17 July 1997. 5. TSN pp. 10-12, 23 April 1997. 6. TSN pp. 12-13, 23 April 1997 7. Tsn p. 31, 21 August 1996. 8. Tsn pp. 6; 27-29, 21 August 1996. 9. Tsn p. 27, Ibid. 10. Exhibits "D" to "Z", "AA" & "BB". 11. Exhibit "H" 12. Exhibit "G" 13. Exhibit "F" 14. Exhibit "E" 15. Exhibit "J" 16. Exhibit "I" 17. Exhibit "A" 18. Exhibit "D" 19. Exhibit "C" 20. Exhibit "B" 21. Exhibits "K", "L", "M", "N", "O", "P", "Q" & "R" 22. Exhibit "II" 23. Tsn pp. 31-34, 17 July 1997 24. Exhibit "OO" 25. Tsn pp. 42-55, 17 July 1997. 26. Tsn pp. 60-61, Ibid . 27. Tsn pp. 62, Ibid . 28. Reyes, L.B., Criminal Law, pp. 652-653, 1970 Ed. 29. Art. 315, par. 2(a) R.P.C.