Case Analysis

Tile: Laurel v. Abrogar (483 SCRA 243)

G.R. No. 155076, February 27, 2006

I-PARTIES

Philippine Long Distance Telephone Company

(PLDT)-Private respondent(the petitioner in the initial
proceeding)
HON. ZEUS C. ABROGAR, Presiding Judge of
the Regional Trial Court, Makati City, Branch 150
whose decision is sought to be reversed in the case. -
Respondent

Luis Marcos P. Laurel board member and

corporate secretary of Baynet Co., Ltd. (Baynet)- now
Petitioner(one of the respondent or co-accused in the
case filed by PLDT)

II-PRIOR PROCEEDINGS
 An information was filed by the state prosecutor
impleading Laurel and other respondents of theft
under Article 308 of RPC. Accused Laurel filed a
"Motion to Quash (with Motion to Defer
Arraignment)". The RTC issued an Order denying the
Motion to Quash the Amended Information. RTC also
denied his Motion for Reconsideration. Laurel then
filed a Petition for Certiorari with the CA, assailing
the Order of the RTC. The CA dismissed the petition.
Laurel, now the petitioner, assails the decision of the
CA before the SC.

III-THEORIES OF THE PARTIES

PLDT claims that herein petitioner together with

his co-accused conspired together in order to steal and
use the international long distance calls belonging to
PLDT by conducting International Simple Resale
(ISR), which is a method of routing and completing
international long distance calls using lines, cables,
antennae, and/or air wave frequency which connect
directly to the local or domestic exchange facilities of
the country where the call is destined, effectively
stealing this business from PLDT while using its
facilities in the estimated amount of P20,370,651.92 to
the damage and prejudice of PLDT, in the said amount
with out the priors consent.

Laurel however alleged that the telephone calls

with the use of PLDT telephone lines, whether
domestic or international, belong to the persons
making the call, not to PLDT. He argued that the
caller merely uses the facilities of PLDT, and what the
latter owns are the telecommunication infrastructures
or facilities through which the call is made. He also
asserted that PLDT is compensated for the caller’s use
of its facilities by way of rental; for an outgoing
overseas call, PLDT charges the caller per minute,
based on the duration of the call. Thus, no personal
property was stolen from PLDT. According to Laurel,
the P20,370,651.92 stated in the Information, if
anything, represents the rental for the use of PLDT
facilities, and not the value of anything owned by it.

IV-OBJECTIVE OF THE PARTIES

 PLDT wishes for the petitioner to be impleaded for
committing theft and the loss they've suffered be
respectively reimbursed or returned to them.

Laurel on the other hand, prays that the motion to

quash be granted as the factual basis of herein private
repondent as stated in their complaint does not fall
within the ambit of Art. 308 of the RPC.

V-KEY FACTS

>Philippine Long Distance Telephone Company

(PLDT) is the holder of a legislative franchise to
render local and international telecommunication
services under Republic Act No. 7082. Under said
law, PLDT is authorized to establish, operate, manage,
lease, maintain and purchase telecommunication
systems, including transmitting, receiving and
switching stations, for both domestic and international
calls.
>PLDT alleges that one of the alternative calling
patterns that constitute network fraud and violate its
network integrity is that which is known as
International Simple Resale (ISR). ISR is a method of
routing and completing international long distance
calls using International Private Leased Lines (IPL),
cables, antenna or air wave or frequency, which
connect directly to the local or domestic exchange
facilities of the terminating country (the country where
the call is destined). The IPL is linked to switching
equipment which is connected to a PLDT telephone
line/number. In the process, the calls bypass the IGF
found at the terminating country, or in some instances,
even those from the originating country

>One such alternative calling service is that offered by

Baynet Co., Ltd. (Baynet) which sells "Bay Super
Orient Card" phone cards to people who call their
friends and relatives in the Philippines.PLDT asserts
that Baynet conducts its ISR activities by utilizing an
IPL to course its incoming international long distance
calls from Japan. The IPL is linked to switching
equipment, which is then connected to PLDT
telephone lines/numbers and equipment, with Baynet
as subscriber. Through the use of the telephone lines
and other auxiliary equipment, Baynet is able to
connect an international long distance call from Japan
to any part of the Philippines, and make it appear as a
call originating from Metro Manila. Consequently, the
operator of an ISR is able to evade payment of access,
termination or bypass charges and accounting rates, as
well as compliance with the regulatory requirements
of the NTC. Thus, the ISR operator offers
international telecommunication services at a lower
rate, to the damage and prejudice of legitimate
operators like PLDT.

>After conducting the requisite preliminary

investigation, the State Prosecutor filed an Amended
Information impleading Laurel (a partner in the law
firm of Ingles, Laurel, Salinas, and, until November
19, 1999, a member of the board of directors and
corporate secretary of Baynet), and the other members
of the board of directors of said corporation, namely,
Yuji Hijioka, Yasushi Ueshima, Mukaida, Lacson and
Villegas, as accused for theft under Article 308 of the
Revised Penal Code.
>Laurel moved to quash said complaint as the
property (service/business)contemplated by herein
private respondent is not the one embraced in ART
308 of RPC nor any special law for that matter. Laurel
further cited the Resolution of the Secretary of Justice
in Piltel v. Mendoza,where it was ruled that the
Revised Penal Code, legislated as it was before present
technological advances were even conceived, is not
adequate to address the novel means of "stealing"
airwaves or airtime. In said resolution, it was noted
that the inadequacy prompted the filing of Senate Bill
2379 (sic) entitled "The Anti-Telecommunications
Fraud of 1997" to deter cloning of cellular phones and
other forms of communications fraud. The said bill
"aims to protect in number (ESN) (sic) or Capcode,
mobile identification number (MIN), electronic-
international mobile equipment identity (EMEI/IMEI),
or subscriber identity module" and "any attempt to
duplicate the data on another cellular phone without
the consent of a public telecommunications entity
would be punishable by law." Thus, Laurel concluded,
"there is no crime if there is no law punishing the
crime."
>The RTC as well as the CA however dismissed his
motion. Thus he filed a motion for certiorari before the
SC alleging the following: the respondent judge
gravely abused his discretion in denying his Motion to
Quash the Amended Information. As gleaned from the
material averments of the amended information, he
was charged with stealing the international long
distance calls belonging to PLDT, not its business.
Moreover, the RTC failed to distinguish between the
business of PLDT (providing services for international
long distance calls) and the revenues derived
therefrom. He opined that a "business" or its revenues
cannot be considered as personal property under
Article 308 of the Revised Penal Code, since a
"business" is "(1) a commercial or mercantile activity
customarily engaged in as a means of livelihood and
typically involving some independence of judgment
and power of decision; (2) a commercial or industrial
enterprise; and (3) refers to transactions, dealings or
intercourse of any nature." On the other hand, the term
"revenue" is defined as "the income that comes back
from an investment (as in real or personal property);
the annual or periodical rents, profits, interests, or
issues of any species of real or personal property."
VI-ISSUE

WHETHER OR NOT THE PROPERTY

CONTeMPLATED BY HEREIN PRIVATE
RESPONDENT FALLS WITHIN THE AMBIT OF
ART. 308 OF RPC, thus no network fraud exist.

VII-HOLDING

NO, THE KIND OF PERSONAL PROPERTY

CONTEMPLATED BY SAID ARTICLE DOES NOT
COVER THE 'BUSINESS OR SERVICE'
RENDERED BY PRIVATE RESPONDENT.

VIII-RATIODECIDENDI

The court finds that the international telephone

calls placed by Bay Super Orient Card holders, the
telecommunication services provided by PLDT and its
business of providing said services are not personal
properties under Article 308 of the Revised Penal
Code. The rule is that, penal laws are to be construed
strictly. It is Congress, not the Court, which is to
define a crime, and ordain its punishment. Due respect
for the prerogative of Congress in defining
crimes/felonies constrains the Court to refrain from a
broad interpretation of penal laws where a "narrow
interpretation" is appropriate. And only when the
congressional purpose is unclear that court my rule on
its lenity.

Article 308 of the Revised Penal Code defines

theft as follows:

Art. 308. Who are liable for theft.– Theft is

committed by any person who, with intent to
gain but without violence, against or
intimidation of persons nor force upon things,
shall take personal property of another without
the latter’s consent.

For one to be guilty of theft, the accused must have

an intent to steal (animus furandi) personal property,
meaning the intent to deprive another of his
ownership/lawful possession of personal property
which intent is apart from and concurrently with the
general criminal intent which is an essential element
of a felony of dolo (dolus malus).

An information or complaint for simple theft must

allege the following elements: (a) the taking of
personal property; (b) the said property belongs to
another; (c) the taking be done with intent to gain; and
(d) the taking be accomplished without the use of
violence or intimidation of person/s or force upon
things.

One is apt to conclude that "personal property"

standing alone, covers both tangible and intangible
properties and are subject of theft under the Revised
Penal Code. But the words "Personal property" under
the Revised Penal Code must be considered in tandem
with the word "take" in the law. The statutory
definition of "taking" and movable property indicates
that, clearly, not all personal properties may be the
proper subjects of theft. The general rule is that, only
movable properties which have physical or material
existence and susceptible of occupation by another are
proper objects of theft.
According to Cuello Callon, in the context of the
Penal Code, only those movable properties which can
be taken and carried from the place they are found are
proper subjects of theft. Intangible properties such as
rights and ideas are not subject of theft because the
same cannot be "taken" from the place it is found and
is occupied or appropriated.

A naked right existing merely in contemplation of

law, although it may be very valuable to the person
who is entitled to exercise it, is not the subject of theft
or larceny. Such rights or interests are intangible and
cannot be "taken" by another. Thus, right to produce
oil, good will or an interest in business, or the right to
engage in business, credit or franchise are properties.
So is the credit line represented by a credit card.
However, they are not proper subjects of theft or
larceny because they are without form or substance,
the mere "breath" of the Congress.

There is "taking" of personal property, and theft is

consummated when the offender unlawfully acquires
possession of personal property even if for a short
time; or if such property is under the dominion and
control of the thief. The taker, at some particular
amount, must have obtained complete and absolute
possession and control of the property adverse to the
rights of the owner or the lawful possessor thereof.It is
not necessary that the property be actually carried
away out of the physical possession of the lawful
possessor or that he should have made his escape with
it.Neither asportation nor actual manual possession of
property is required. Constructive possession of the
thief of the property is enough.

Taking may be by the offender’s own hands, by

his use of innocent persons without any felonious
intent, as well as any mechanical device, such as an
access device or card, or any agency, animate or
inanimate, with intent to gain. Intent to gain includes
the unlawful taking of personal property for the
purpose of deriving utility, satisfaction, enjoyment and
pleasure.

Gas and electrical energy should not be equated

with business or services provided by business
entrepreneurs to the public. Business does not have
an exact definition. Business is referred as that
which occupies the time, attention and labor of men
for the purpose of livelihood or profit. It embraces
everything that which a person can be employed.
Business may also mean employment, occupation
or profession. Business is also defined as a
commercial activity for gain benefit or advantage.
Business, like services in business, although are
properties, are not proper subjects of theft under
the Revised Penal Code because the same cannot be
"taken" or "occupied." If it were otherwise, as
claimed by the respondents, there would be no
juridical difference between the taking of the
business of a person or the services provided by
him for gain, vis-à-vis, the taking of goods, wares
or merchandise, or equipment comprising his
business. If it was its intention to include
"business" as personal property under Article 308
of the Revised Penal Code, the Philippine
Legislature should have spoken in language that is
clear and definite: that business is personal
property under Article 308 of the Revised Penal
Code.
 Respondent PLDT does not acquire possession,
much less, ownership of the voices of the telephone
callers or of the electronic voice signals or current
emanating from said calls. The human voice and the
electronic voice signals or current caused thereby are
intangible and not susceptible of possession,
occupation or appropriation by the respondent PLDT
or even the petitioner, for that matter. PLDT merely
transmits the electronic voice signals through its
facilities and equipment. Baynet Card Ltd.,
through its operator, merely intercepts, reroutes
the calls and passes them to its toll center.

OBITERDICTUM? In Examining foreign

statutes, the courts found that other states specifically
included “business/services” to be one of a “personal
property” as implemented therein. In the Philippines,
Congress has not amended the Revised Penal Code to
include theft of services or theft of business as
felonies. Instead, it approved a law, Republic Act No.
8484, otherwise known as the Access Devices
Regulation Act of 1998, on February 11, 1998. Under
the law, an access device means any card, plate, code,
account number, electronic serial number, personal
identification number and other telecommunication
services, equipment or instrumentalities-identifier or
other means of account access that can be used to
obtain money, goods, services or any other thing of
value or to initiate a transfer of funds other than a
transfer originated solely by paper instrument. Among
the prohibited acts enumerated in Section 9 of the law
are the acts of obtaining money or anything of value
through the use of an access device, with intent to
defraud or intent to gain and fleeing thereafter; and of
effecting transactions with one or more access devices
issued to another person or persons to receive payment
or any other thing of value. Under Section 11 of the
law, conspiracy to commit access devices fraud is a
crime. However, the petitioner is not charged of
violation of R.A. 8484.

IX-DISPOSITION

Petition is granted. The assailed decision of RTC

and CA is hereby reversed and ser aside. The Regional
Trial Court is directed to issue an order granting the
motion of the petitioner to quash the Amended
Information.
Same; Same; Same; Movable properties under Article
308 of the Revised Penal Code should be
distinguished from the rights or interests to which they
relate. A naked right existing merely in contemplation
of law, although it may be very valuable to the person
who is entitled to exercise it, is not the subject of theft
or larceny.—Movable properties under Article 308 of
the Revised Penal Code should be distinguished from
the rights or interests to which they relate. A naked
right existing merely in contemplation of law,
although it may be very valuable to the person who is
entitled to exercise it, is not the subject of theft or
larceny. Such rights or interests are intangible and
cannot be “taken” by another. Thus, right to produce
oil, good will or an interest in business, or the right to
engage in business, credit or franchise are properties.
So is the credit line represented by a credit card.
However, they are not proper subjects of theft or
larceny because they are without form or substance,
the mere “breath” of the Congress. On the other hand,
goods, wares and merchandise of businessmen and
credit cards issued to them are movable properties
with physical and material existence and may be taken
by another; hence, proper subjects of theft