G.R. No. L-18747; March 30, 1963
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. PASTOR SUPNAD, ET AL., accused-appellees.

FACTS

The City Fiscal of Manila filed an Information charging Pastor Supnad and Brigida Ungos with estafa under Article 316(2) of the Revised Penal Code. The accusation alleged that the accused, knowing their house was mortgaged to Teresa Bautista for P2,500, sold it to Damian Vasquez for P7,000 without Bautista’s consent, representing it as free from liens, thereby defrauding the mortgagee. After pleading not guilty, the accused raised the existence of a prejudicial question, citing a related civil case where the CFI found that the buyer, Vasquez, was actually aware of the mortgage’s existence at the time of purchase.
The trial court dismissed the criminal case, ruling the facts in the Information did not constitute an offense. It held that for estafa under Article 316(2), the fraud or deceit must be practiced upon the vendee (buyer) at the time of sale, not the mortgagee. Since the Information charged deceit against the mortgagee Bautista—who necessarily knew of the encumbrance—and did not allege fraud against the buyer Vasquez, the court found no crime was sufficiently alleged. The prosecution appealed, arguing the dismissal was erroneous.

ISSUE

Whether the trial court correctly dismissed the Information on the ground that the facts alleged do not constitute a violation of Article 316(2) of the Revised Penal Code.

RULING

No. The Supreme Court reversed the dismissal and ordered the case remanded for trial. The legal logic centers on the proper interpretation of Article 316(2) and the sufficiency of the Information’s allegations. The Court clarified that the provision penalizes any person who, knowing real property is encumbered, disposes of it, even if the encumbrance is unrecorded. The trial court erred in importing an additional requirement that the fraud must be specifically directed at the buyer. The statute’s plain language does not limit the defrauded party to the vendee; it encompasses damage to any injured party, including the mortgagee.
The Court examined the Information and found it sufficient. It explicitly alleged that the accused, knowing the property was mortgaged, sold it without the mortgagee’s consent while representing it as unencumbered to the buyer, causing damage to the mortgagee in the amount of the mortgage debt. These allegations, if proven, constitute the elements of the crime: knowledge of the encumbrance, disposition of the property, and resulting damage. The Court also corrected the trial court’s reliance on People v. Mariano, noting that the cited case actually supports the prosecution’s position, as it states criminal liability attaches if the party with a lien suffers damage due to the vendor’s fraudulent act. The pending civil case and its findings do not constitute a prejudicial question but may instead provide evidence or a defense for trial. The determination of whether damage was indeed inflicted upon the mortgagee is a matter of evidence to be presented during the trial on the merits.