GR 84096; (January, 1995) (Digest)
G.R. No. 84096, January 26, 1995
RAUL H. SESBRENO, petitioner, vs. HONORABLE COURT OF APPEALS and HERMILO RODIS, SR., respondents.
FACTS
Petitioner Raul Sesbreno invested P300,000.00 in a money market placement with Philfinance, where private respondent Hermilo Rodis, Sr. was an officer. Upon non-payment, Sesbreno filed an estafa case against Rodis and others. After the prosecution rested its case, Rodis filed a motion to dismiss on demurrer to evidence, arguing that a money market placement is essentially a loan, and non-payment thereof gives rise only to civil liability, not criminal estafa. The trial court denied this motion. Rodis then filed a petition for certiorari with the Court of Appeals.
The Court of Appeals granted Rodis’s petition, applying the doctrine in Perez v. Court of Appeals. It ruled that a money market transaction constitutes a loan, transferring ownership of the funds to the borrower. Consequently, the failure to return the investment is a breach of contract, creating only civil liability. The appellate court set aside the trial court’s order and directed the dismissal of the criminal case against Rodis, while instructing the trial court to determine his civil liability from the evidence on record.
ISSUE
Whether the Court of Appeals correctly ruled that the non-payment of a money market placement does not constitute the crime of estafa, but gives rise only to civil liability.
RULING
Yes, the Supreme Court affirmed the decision of the Court of Appeals. The legal logic is anchored on the nature of a money market transaction. The Court reiterated that such a placement is in the character of a loan. Under Article 1933 of the Civil Code, a loan involves the transfer of ownership of money or consumable goods to the borrower, who is bound to pay an equal amount of the same kind and quality. The failure to fulfill this contractual obligation is a mere breach of contract, not a criminal misappropriation or conversion punishable under the Revised Penal Code.
For estafa under Article 315(1)(b) to exist, the element of misappropriation or conversion must be proven. This requires that the accused received the money in a fiduciary capacity or under an obligation to deliver or return the same specific money. In a loan, however, ownership is transferred, and the debtor’s obligation is to pay an equivalent sum, not to return the identical cash. Therefore, non-payment constitutes a civil default, not a criminal diversion of funds held in trust. The Court of Appeals correctly applied this established distinction, leading to the proper dismissal of the criminal charge while preserving the avenue for the recovery of civil liability.