Mallari v. People

SECOND DIVISION

[G.R. No. 249374. July 12, 2021.]

ERNESTO S. MALLARI, petitioner, v.PEOPLE OF THE PHILIPPINES, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated12 July 2021which reads as follows:

"G.R. No. 249374 (Ernesto S. Mallari v. People of the Philippines). — Ernesto Mallari (petitioner) seeks anew a verdict of acquittal from the charge of estafa against him under Article 315, paragraph 2 (a) 1 of the Revised Penal Code (RPC) based on his similar assertion that the element of deceit was not established because he contracted with complainants Spouses Rodolfo Yumang and Cynthia Yumang (Spouses Yumang) not through his blacklisted E.S. Mallari Trading and Construction, but in his professional capacity as a registered civil engineer. As an engineer, he is exempt from securing a Philippine Contractors Accreditation Board (PCAB) license under Section 14, Republic Act No. 4566 (RA 4566). 2 Hence, he cannot be said to have actually made fraudulent representation which could have caused Spouses Yumang to award the construction project to him and consequently part with their money. 3

The Office of the Solicitor General, on the other hand, supports the verdict of conviction, arguing that the prosecution has duly established the element of deceit. 4

At the outset, whether petitioner employed deceit in his negotiations with Spouses Yumang, specifically on the competence and track record of him and his E.S. Mallari Trading and Construction, in order to entice Spouses Yumang to award the construction project to him and part with their money is a pure factual issue which the Court, not being a trier of facts, cannot take cognizance of via a petition for review on certiorari under Rule 45 of the Rules of Court. On this score, the Court will not recalibrate or weigh anew the evidence on record, let alone, review the concurrent factual findings of the trial court and the Court of Appeals. For in the absence of grave abuse of discretion or serious error in the appreciation of the evidence, these concurrent factual findings are conclusive and binding upon the Court.

As it was, the Court of Appeals did not commit any reversible error in affirming the trial court's verdict of conviction. The prosecution has sufficiently established and petitioner did not deny that E.S. Mallari Trading and Construction is not in good standing as a contractor because it had long been disqualified, blacklisted, and delisted by the Department of Public Works and Highways (DPWH), Construction Industry Authority of the Philippines (CIAP), and PCAB, respectively. 5

RA 4566, as amended by Presidential Decree (PD) No. 1746, 6 which aims to ensure that only qualified and reliable contractors are allowed to undertake construction works, requires any contractor (including sub-contractor and specialty contractor) to secure a PCAB license before engaging in the business of contracting. Section 35 thereof makes it an offense to engage in construction contracting without the required license, viz.: CAIHTE

Section 35. Penalties. — Any contractor who, for a price, commission, fee or wage, submits or attempts to submit a bid to construct, or contracts to or undertakes to construct, or assumes charge in a supervisory capacity of a construction work within the purview of this Act, without first securing a license to engage in the business of contracting in this country; or who shall present or file the license certificate of another, give false evidence of any kind to the Board, or any member thereof in obtaining a certificate or license, impersonate another, or use an expired or revoked certificate, or license, shall be deemed guilty of misdemeanor, and shall, upon conviction, be sentenced to pay a fine of not less than five hundred pesos but not more than five thousand pesos. (Emphasis supplied)

This requirement applies not only to E.S. Mallari Trading and Construction but also to petitioner himself. While Section 14 7 exempts a civil engineer or a licensed architect from its coverage, it specifically provides that such exemption shall apply only when the latter is acting solely in his professional capacity, i.e., the design and supervision aspect of his professional practice as civil engineer or architect, and not when he is already contracting to do the construction for a price, as in here.

To recall, during the negotiation stage, petitioner, together with Engr. Danilo Rustia (Engr. Rustia), represented to Spouses Yumang that they are "licensed engineers and qualified contractors with experience in the implementation of projects both in the private and government sector." 8 Although petitioner claims he is a seasoned contractor who has handled numerous government and private construction projects in his professional capacity as civil engineer, he failed to show how he became such outside the sphere, and independently of E.S. Mallari Trading and Construction which despite its sub-standard workmanship was awarded various construction projects before.

Clearly, petitioner used E.S. Mallari Trading and Construction as a bargaining tool during the negotiation stage. Thus, Spouses Yumang testified that petitioner and Engr. Rustia assured them of their "impeccable experience and qualifications as licensed contractors," which turned out to be false. 9 Petitioner failed to show that, apart from his license to practice his profession as an engineer, he also has a separate PCAB license to enter into contracting business. More, he concealed the fact that his E.S. Mallari Trading and Construction is no longer a contractor in good standing in view of its bad track record in the construction industry which resulted in its disqualification, blacklisting and delisting by DPWH, CIAP and PCAB, respectively.

Putting things in context, the only purpose of petitioner in making these misrepresentations and in concealing the real blacklisted status of E.S. Mallari Trading and Construction was precisely to entice Spouses Yumang to award their construction project to him and consequently part with their money.

Notably, although in his contract with Spouses Yumang he signed his name, sans any mention of E.S. Mallari Trading and Construction, he issued cash vouchers under the name of E.S. Mallari Trading and Construction during the project implementation. 10 This speaks volumes of the truth that petitioner negotiated and contracted with Spouses Yumang not only as an engineer but also as the sole proprietor of E.S. Mallari Trading and Construction.

In any event, petitioner did not explicitly deny making the misrepresentations heretofore stated, as well as concealing the real blacklisted status of E.S. Mallari Trading and Construction. He nonetheless tries to avoid liability by claiming that E.S. Mallari Trading and Construction has no bearing on this case since he allegedly signed the construction agreement in his professional capacity as civil engineer and not in the name of E.S. Mallari Trading and Construction. 11

We are not convinced. Being a sole proprietorship, E.S. Mallari Trading and Construction does not possess any juridical personality separate and distinct from that of petitioner as the owner of the enterprise. 12 As the trial court aptly ruled, the disqualification of E.S. Mallari Trading and Construction due to defective construction works also pertains to petitioner as they are one and the same person. For "E.S. Mallari Trading and Construction" is only a business name which petitioner used in his construction business. 13 This can be gleaned from the blacklist/disqualification order issued by the DPWH, to wit:

"Ernesto S. Mallari doing business under the name and style E.S. MALLARI TRADING AND CONSTRUCTION of DFS, Balanga, Bataan, is hereby perpetually disqualified from entering into any contract in the DPWH and its line agencies pursuant to Section 1 of [the] Presidential Decree No. 1750, x x x" 14

Deceit is the false representation of a matter of fact whether by words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed which deceives or is intended to deceive another so that he shall act upon it to his legal injury. 15 While concealment is "[t]he unlawful suppression of any fact or circumstance, by one of the parties to a contract, from the other, which in justice ought to be made known." 16

Indubitably, a contractor's qualification is an essential and impelling reason in every construction contract one negotiates with another such that a contractor's concealment of his or her disqualification or incompetence is considered deceit. We quote with approval the following disquisition of the Court of Appeals on this score, viz.:

Moreover, the gravamen of Estafa is the employment of fraud or deceit to the damage or prejudice of another. In a contract for the construction of a building, the qualification of the contractor goes into the very essence of the contract and concealment of the fact of disqualification or incompetence of the contractor is deceit as defined under the law. Thus:

Fraud, in its general sense, is deemed to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of another. It is a generic term embracing all multifarious means which human ingenuity can device, and which are resorted to by one individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling and any unfair way by which another is cheated. On the other hand, deceit is the false representation of a matter of fact whether by words or conduct, by false or misleading allegations, or by concealment of that which should have been disclosed which deceives or is intended to deceive another so that he shall act upon it to his legal injury. 17

As the trial court and the Court of Appeals correctly ruled, all the elements of estafa under Article 315, paragraph 2 (a) 18 of the RPC were duly established by the prosecution here. Petitioner's deliberate concealment of the fact that he and his E.S. Mallari Trading and Construction lacks the requisite PCAB license because it was blacklisted, delisted, and perpetually disqualified from entering into any construction contract amounts to deceit. DETACa

Undeniably, petitioner deceived and misled Spouses Yumang into believing that he and E.S. Mallari Trading and Construction were qualified and licensed to contract with them for the construction of their building, when in fact they were not. Through such misrepresentation and deceit, petitioner was able to convince complainants to award the construction project to him and part with their money in order to implement their contract agreement. As a consequence, Spouses Yumang suffered damages in the form of defective and unfinished construction works.

Verily, the Court finds the verdict of conviction for estafa against petitioner to be in order. The Court, however, deems it proper to modify the imposed penalty.

In accord with Cresencio v. People, 19 the trial court applied the minimum penalty under Article 315, 4th paragraph 20 of the RPC due to the prosecution's failure to prove the actual amount of damages or legal injury suffered by complainants. The threshold amount and corresponding penalty under Article 315, 4th paragraph is P200.00 and arresto mayor in its medium and maximum periods, respectively. The trial court, thus, imposed the straight penalty of six (6) months of arresto mayor and ordered petitioner to pay the threshold amount of P200.00 as civil liability.

But with the enactment of Republic Act No. 10951 (RA 10951), 21 the imposable penalties for estafa have been amended, as follows:

Section 85. Article 315 of the same Act, as amended by Republic Act No. 4885, Presidential Decree No. 1689, and Presidential Decree No. 818, is hereby further amended to read as follows:

ART. 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned herein below shall be punished by:

xxx xxx xxx

4th. By arresto mayor in its medium and maximum periods, if such amount does not exceed Forty thousand pesos (P40,000) x x x.

Section 100, 22 on the other hand, provides for the retroactive application of RA 10951 but only to the extent favorable to the accused. Clearly, the increased threshold amount of P40,000.00 is prejudicial to petitioner for the purpose of determining the extent of his civil liability. Hence, we sustain the P200.00 civil liability awarded by the trial court.

In People v. Vicente, 23 the accused was found guilty of estafa involving the amount of P20,000.00 for which the Court sentenced him to a straight penalty of four (4) months of arresto mayor and ordered him to pay civil indemnity plus interest, viz.:

In People v. Cayabyab, the Court explained that since the new penalty is more beneficial to the accused and in view of the non-applicability of the indeterminate sentence law, the penalty of arresto mayor shall be imposed as a single or straight penalty.

Thus, the Court of Appeals correctly sentenced appellant to the straight penalty of four (4) months of arresto mayor and ordered him to indemnify Flocerfina Barcenas in the amount of Twenty Thousand Pesos (P20,000.00).

xxx xxx xxx

The amounts of indemnity shall earn an interest at the rate of twelve percent (12%) per annum from the filing of the Information, viz.:

xxx xxx xxx

• On March 8, 2006 for Criminal Case Nos. SC-12168 and SC-12169

until June 30, 2013 and six percent (6%) per annum from July 1, 2013 until the finality of the Resolution, and the total amount of the foregoing shall, in turn, earn an interest at the rate of six percent (6%) per annum from finality of this Resolution until full payment. aDSIHc

Applying Vicente, the Court sentences petitioner here to the straight penalty of four (4) months of arresto mayor. The civil indemnity of P200.00 shall earn twelve percent (12%) interest per annum from the filing of the Information on May 7, 2013 until June 30, 2013 and six percent (6%) interest per annum from July 1, 2013 until the finality of this Resolution. The total amount shall earn six percent (6%) interest per annum from finality of this Resolution until fully paid.

ACCORDINGLY, the petition is DENIED. The Decision dated May 16, 2019 of the Court of Appeals in CA-G.R. CR 39830 is AFFIRMED with MODIFICATION.

Petitioner Ernesto Mallari is found GUILTY of Estafa under Article 315, paragraph 2 (a) of the Revised Penal Code. He is sentenced to the straight penalty of four (4) months of arresto mayor. He is ordered to pay P200.00 as civil indemnity plus twelve percent (12%) interest per annum from the filing of the Information on May 7, 2013 until June 30, 2013 and six percent (6%) per annum from July 1, 2013 until the finality of this Resolution.

The total monetary award shall be subject to six percent (6%) interest per annum from finality of this Resolution until fully paid.

SO ORDERED." (J. Lopez, J., designated additional member per Special Order No. 2822 dated April 7, 2021)

By authority of the Court:

(SGD.) TERESITA AQUINO TUAZONDivision Clerk of Court

 

Footnotes

1. Article 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

xxx xxx xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits.

2. Also known as the "Contractors' License Law," approved on June 19, 1965.

3.Rollo, pp. 8-19.

4.Id. at 70-82.

5.Id. at 27.

6. Entitled "Creating the Construction Industry Authority of the Philippines (CIAP)" (November 28, 1980).

7. Section 14 of RA 4566:

Section 14. This Act shall not apply to a registered civil engineer or a licensed architect acting solely in his professional capacity.

8.Rollo, p. 21.

9.Id. at 25.

10.Id. at 31.

11.Id. at 27-28, 44.

12.Dela Cruz v. People, G.R. Nos. 236807 & 236810, January 12, 2021.

13.Rollo, pp. 28-29.

14.Id. at 28, DPWH Department Order No. 222, Series of 1993.

15.Home Development Mutual Fund Pag-Ibig Fund v. Sagun, G.R. Nos. 205698, 205780, 208744, 209424, 209446, 209489, 209852, 210095, 210143, 228452, 228730 & 230680, July 31, 2018, 875 SCRA 135, 222.

16. <https://legal-dictionary.thefreedictionary.com/Concealment> (visited July 9, 2021).

17.Rollo, pp. 45-46.

18. Article 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

xxx xxx xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits.

19. 747 Phil. 577 (2014).

20. Article 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

xxx xxx xxx

4th. By arresto mayor in its maximum period, if such amount does not exceed 200 pesos, provided that in the four cases mentioned, the fraud be committed by any of the following means:

xxx xxx xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits.

21.An Act Adjusting the Amount or the Value of Property and Damage on which a Penalty is based and the Fines Imposed under the Revised Penal Code, amending for the purpose Act No. 3815, otherwise known as "The Revised Penal Code." Approved on August 29, 2017.

22. Section 100, RA 10951:

Section 100. Retroactive Effect. — This Act shall have retroactive effect to the extent that it is favorable to the accused or person serving sentence by final judgment.

23. G.R. No. 249546, February 3, 2021.