GR 111656; (March, 1996) (Digest)
G.R. No. 111656 March 20, 1996
MANUEL MANAHAN, JR., petitioner, vs. HON. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
FACTS
Petitioner Manuel Manahan, Jr. entered into two Equipment Lease Agreements with IFC Leasing and Acceptance Corporation for an Isuzu dump truck and a Kimco payloader. He defaulted on the rental payments, prompting IFC to file a civil case for sum of money with replevin. The court ruled in favor of IFC, ordering Manahan to pay the outstanding amounts and confirming IFC’s right to ownership and possession of the equipment. This civil judgment was not executed. Instead, after a subsequent demand letter went unheeded, IFC filed a criminal case for estafa under Article 315(1)(b) of the Revised Penal Code, alleging Manahan misappropriated or converted the leased dump truck.
At trial, Manahan admitted failing to return the dump truck but claimed he subleased it to a Mr. Gorospe. He testified that after the sublease, he tried to retake possession but was unsuccessful, and that the truck was later dismantled and taken by Gorospe’s men, leaving only the chassis. The trial court convicted him of estafa, a ruling affirmed with modification by the Court of Appeals, which held him liable for the truck’s value.
ISSUE
Whether petitioner Manahan is guilty of the crime of estafa through misappropriation under Article 315(1)(b) of the Revised Penal Code.
RULING
No. The Supreme Court acquitted Manahan of estafa. For estafa under Article 315(1)(b) to prosper, the prosecution must prove the accused’s fraudulent intent to misappropriate or convert the property received. The Court found this essential element lacking. Manahan’s failure to return the dump truck was not due to a deliberate act of misappropriation but to circumstances beyond his control—specifically, the unlawful taking of the vehicle by third parties (Gorospe’s men) after a sublease. His actions, including reporting the incident to barangay authorities, negated criminal intent.
The Court clarified that his liability is civil, not criminal, arising from his breach of the lease contract as a lessee. His obligation to return the property or pay its value is governed by the Civil Code provisions on lease, specifically Article 1671, which makes a lessee who fails to return the property a possessor in bad faith liable for its value. Thus, while acquitted of estafa, Manahan was ordered to pay IFC the value of the lost dump truck with interest, enforcing the civil obligation adjudged in the prior civil case. The criminal case constituted an improper second recovery for the same act.