G.R. No. L-45830 October 3, 1985
TEOPISTO S. SALCEDO, petitioner, vs. THE HONORABLE COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.

FACTS

Petitioner Teopisto Salcedo was the branch manager of Manhattan Guaranty Company, Inc. in Iligan City. On March 18, 1968, the company, through its agent, issued a fire insurance policy to Basilio Ponce, who paid a premium of P1,095.80. Unbeknownst to Ponce, the Insurance Commissioner had suspended the company from operating since February 21, 1968. Ponce later discovered the suspension and demanded a refund from Salcedo, who refused, assuring Ponce of the company’s financial soundness. The prosecution established that Salcedo was aware of the suspension order at the time of the transaction.
Salcedo defended himself by claiming he only learned of the suspension officially through a company memorandum dated February 26, 1968, which he allegedly received two days after issuing the policy. He argued that the transaction was negotiated solely by the production manager, Jesus Cortes, and that any liability should attach to the company or Cortes, not to him personally. The City Court convicted him of estafa, a decision affirmed by the Court of Appeals.

ISSUE

Whether the petitioner is criminally liable for estafa under Article 315, paragraph 2(a) of the Revised Penal Code for issuing an insurance policy and collecting a premium while knowing his company was suspended from operation.

RULING

Yes, the petitioner is criminally liable. The Supreme Court affirmed the conviction but modified the penalty. The legal logic centers on the element of deceit. As branch manager, Salcedo signed and issued the policy and collected the premium. His knowledge of the company’s suspension, which he acquired from the memorandum and news reports, constituted a fraudulent concealment of a material fact vital to the transaction. By issuing a policy from a suspended entity, he falsely represented that the company was authorized to transact business, thereby inducing Ponce to part with his money.
The Court rejected Salcedo’s defense that he lacked intervention, finding his managerial role and signature on the policy indicative of direct participation. His claim of receiving the suspension notice after the transaction was contradicted by evidence, including a news clipping. The deceit was contemporaneous with the act of issuing the policy and collecting payment, satisfying the requirement for estafa. However, the penalty was modified to an indeterminate sentence of three months of arresto mayor minimum to one year and eight months of prision correccional maximum, in accordance with the Indeterminate Sentence Law.