CHAPTER SIX: SWINDLING AND OTHER DECEITS (ARTICLES 315-318)

ARTICLE 315 - SWINDLING (ESTAFA)

The elements of estafa in general are:

1. That the accused defrauded another by abuse of confidence, or by means of deceit;
and
2. That damage or prejudice capable of pecuniary estimation is caused to the offended
party or third persons.

Damage or prejudice may consist of:

a. Offended party being deprived of his money or property as a result of the
defraudation;
b. Disturbance in property rights; or
c. Temporary prejudice.

Please take note that the profit or gain must be obtained by the accused personally and mere
negligence in allowing another to benefit from the transaction is not estafa.

There are three (3) ways of committing estafa under Article 315, namely:
1. With Unfaithfulness or abuse of confidence or unfaithfulness;
2. By means of deceit of false pretenses;
3. By fraudulent means.

There is no estafa through negligence or culpa. The profit or gain must be obtained by the
accused personally, through his own acts, and his mere negligence in permitting another to
take advantage of, or benefit from, does not constitute estafa.

ESTAFA WITH UNFAITHFULNESS OR ABUSE OF CONFIDENCE

1. Estafa with unfaithfulness

Elements:
a. That the offender has an onerous obligation to deliver something of value;
b. That he alters its substance, quantity or quality; and
c. That damage or prejudice capable of pecuniary estimation is caused to the
offended party or third persons.

In this kind of estafa, there must be an existing obligation to deliver something of value. The
accused has the obligation to deliver but on making the delivery, the accused has altered the
substance, quantity or quality of the thing he delivered.

Example:
 1. Pedro agreed to sell to Juan a first class rice and received from Juan the purchase price
thereof. But when the price was delivered to Juan, it was found to be a poor kind of rice.
There is estafa committed by unfaithfulness through altering the quality.

It is estafa even if the obligation is based on an immoral or illegal obligation.

When there is no agreement as to the quality of the thing to be delivered, the delivery of the
thing not acceptable to the complainant is not estafa.

2. Estafa with abuse of confidence

The elements are as follows:

a. That money. goods, or other persona property be received by the offender in
trust; or on commission, or for administration, or under any other obligation
involving the duty to make delivery of, or to return, the same;
b. That there be misappropriation or conversion of such money or property by the
offender denial on his part of such receipt;
c. That such misappropriation or conversion or denial is to the prejudice of another,
and
d. That there is demand made by the offended party to the offender.

Deceit is not an essential requisite of estafa with abuse of confidence.

Check or cheque is included in the word “money”. Check, while not considered as legal tender,
may substitute for cash in commercial usage. It is capable of appropriation. The delivery of
check and its acceptance signified not merely the transfer of money but creation of fiduciary
relation between the parties.

In this kind of estafa, money, goods or other personal property must be received by the offender
under certain kinds of transaction transferring juridical possession to him. When the thing is
received by the offender from the offended party (i) in trust, or (ii) in commission, or (iii) for
administration, the offender acquires both material and juridical possession of the thing
received.

Juridical possession means a possession which gives the transferee a right over the things which
the transferee may set up against the owner. Material possession is the actual physical
possession of personal property where the possessor cannot claim a better right to such property
than that of its owner. Misappropriation is the act of taking something for one’s own benefit.
Conversion is the act of using or disposing of another’s property as if it was one’s own.

If a person denies having received thing when in fact he did, that person is guilty of estafa.

If the offender has been given juridical possession and material possession of the personal
property and he misappropriated or converted the same, he is liable for the crime of estafa.
Example:
A. The accused, a corporate finance officer, took money out of the funds of the company
and replaced it with his personal checks. He instructed the cashier not to deposit it on
the bank account of the company until the end of the month. Accused is liable for
estafa through misappropriation. Such an act of the accused is prejudicial to the
company as it causes damage to it.
B. Failure to return a lease car which was delivered to the accused by virtue of deed of
lease after the expiration of the lease contract and despite demands constitute estafa
by misappropriation or conversion.

3. Estafa by taking undue advantage of the signature in blank

The elements are as follows:

a. That the paper with the signature of the offended party be in blank;
b. That the offended party should have delivered it to the offender;
c. That above the signature of the offended party a document is written by the
offender without authority to do; and
d. That the document so written creates a liability of, or causes damage to the
offended party or any third person.

The paper with the signature in blank must be delivered by the offended party to the offender.

Example:
Jose left to Pedro a blank paper with Jose’s signature with a request to make a receipt
for future payment to be made by a debtor; but instead Pedro wrote thereon an advance order
for some merchandise in the name of Jose. Pedro made use of the merchandise for his own
personal benefit. The advance order written by Pedro created a liability against Jose and would
cause damage to him, because the owner of the merchandise could make Jose pay for the
value of merchandise delivered to Pedro by reason of the advance order.

ESTAFA BY MEANS OF DECEIT (Art. 315, No. 2)

The elements are as follows:

1. That there must be false pretense, fraudulent act or fraudulent means;
2. That such false pretense, act or fraudulent means must be made or executed prior to or
simultaneously with the commission of the fraud;
3. That the offended party must have relied on the false pretense, fraudulent act, or
fraudulent means, that is, he was Induced to part with his money or property because of
the false pretense, fraudulent act, or fraudulent means; and
4. That as a result thereof, the offended party suffered damage.

These are the ways of committing estafa through deceit:

1. By using a fictitious name;
2. By falsely pretending to possess:
a. Power
 b. Influence
c. Qualifications
d. Property
e. Credit
f. Agency, or
g. Business or imaginary transactions;
3. By means of other similar deceits.

There is no deceit if the complainant was aware of the fictitious nature of the pretense.

There is a use of fictitious name when a person uses a name other than his real name. Thus,
when a person found a pawnshop ticket in the name of another and, using the name of that
person, redeemed the jewelry, he committed estafa using a fictitious name.

It is indispensable that the element of deceit, consisting in the false statement or fraudulent
representation of the accused, be made prior to, or at least simultaneously with the delivery of
the thing by the complainant, it being essential that such false statement or fraudulent
representation constitutes the very cause or the only motive which induces the complainant to
part with the thing.

The criminal act of deceit must be the proximate cause of the damage suffered by the victim of
estafa. Thus, the false pretense must be committed prior to or simultaneous with, but not after
the damage suffered by the victim when he parted his money or property.

Estafa through false pretense may also be committed by any person who shall defraud another
by falsely pretending to possess qualifications, property, business or imaginary transactions,
power, influence, or by means of other deceits, which are executed prior to or simultaneously
with the parting of the property of the victim.

Fraudulent
The acts must be characterized by, for founded on. deceit, trick or cheat

Estafa is also committed through the following:

1. Offender issued a postdated check or issued a check in payment of an obligation, that
such postdating or issuing a check was done when the offender had no funds in the
bank, or his funds deposited therein were not sufficient to cover the amount of the check
and damage is suffered by the offended party.

To constitute estafa by postdating or issuing a check in payment of obligation, it must be

the very cause of defraudation. It must have been committed either prior to or
simultaneous with the defraudation being complained of. Thus, if the check is issued in
payment of a pre-existing obligation, no estafa is committed, only a civil liability.

Estafa by issuing a bad check is a continuing offense.

 There is a prima facie evidence of deceit when the drawer or the offender fails to pay or
make arrangement of payment three (3) days after receiving notice of dishonor.

2. Obtaining food, refreshment or accommodation at hotel inn, restaurant, boarding

house, lodging house or apartment house, without paying therefor, with intent to defraud
the proprietor or manager thereof; obtaining credit at any of the establishment by the
use of any false pretense; and abandoning or surreptitiously removing any part of his
baggage from any of the said establishment after obtaining food, refreshment or
accommodation without paying therefor.

ESTAFA THROUGH THE FOLLOWING FRAUDULENT MEANS:

1. By inducing another, by means of deceit, to sign any document.

The accused should have made representation as to mislead the complainant as to the
character of the documents.

2. By resorting to some fraudulent practice to insure success in a gambling game.

3. By removing, concealing or destroying, in whole or in part, any court record, office files,
document or any other papers.

If there is no intent to defraud, malicious mischief is committed.

ARTICLE 316
OTHER FORMS OF SWINDLING

Persons Liable:
1. Any person who, pretending to be the owner of any real property, shall convey, sell,
encumber or mortgage the same.

The elements of this crime are as follows:

a. That the thing be immovable, such as a parcel of land or a building (property
must actually exist)
b. That the offender who is not the owner of said property should represent that he is
the owner thereof
c. That the offender should have executed an act of ownership (selling leasing
encumbering or mortgaging the real property), and
d. That the act be made to the prejudice of the owner or a third person.

Please take note that if the thing does not exist, the crime is estafa by false pretenses.

2. Any person who knowing that real property is encumbered, shall dispose of the same,
although such encumbrance be not recorded.

Elements:
a. That the thing disposed of be real property;
 b. That the offender knew that the real property was encumbered, whether the
encumbrance is recorded or not;
c. That there must be express representation by the offender that the real property is
free from encumbrance; and
d. That the act of disposing of the real property be made to the damage of another

Encumbrance means every right or interest in the land which exists in favor of a third
person.

3. The owner of any personal property who shall wrongfully take it from its lawful possessor,
to the prejudice of the latter or any third person.

The elements are as follows:

a. That the offender is the owner of personal property
b. That said personal property is in the lawful possession of another
c. That the offender wrongfully takes it from its lawful possessor, and
d. That Prejudice is thereby caused to the possessor or third person.

The crime will still be estafa even the owner takes the personalty from the lawful
possessor under the modes of taking in theft or robbery which latter crimes cannot be
committed by the owner on his property.

4. Any person who, to the prejudice of another shall execute any fictitious contract.
5. Any person who shall accept any compensation for services not rendered or for labor
not performed and
6. Any person who shall sell mortgage of encumber real property with which the offender
guaranteed the fulfillment of his obligation as surety.

ARTICLE 317 - SWINDLING A MINOR

The elements are as follows:

1. That the offender takes advantage of the inexperience or emotions or feelings of a
minor;
2. That he induces such minor to assume an obligation or to give release, or to execute a
transfer of any property right
3. That the consideration is some loan of money, credit or other personal property. real
property.

If real property is involved, Article 318 applies for minor cannot convey real property
without judicial authority and

4. That the transaction is to the detriment of such minor.

ARTICLE 318 - OTHER DECEITS

The following are punishable acts:
 1. Defrauding or damaging another by any other deceit not mentioned in the preceding
articles;
2. (a) Interpreting dreams; (b) making forecasts, telling fortunes; (c) taking advantage of
the credulity of the public in any other manner, for profit or gain

CHATTEL MORTGAGE

ARTICLE 319 - REMOVAL, SALE OR PLEDGE OF MORTGAGED PROPERTY

The following are punishable acts:

1. Knowingly removing any personal property mortgaged under the Chattel Mortgage Law
to any province or city other than the one in which it is located at the time of execution
of the mortgage, without the written consent of the mortgagee or his executors,
administrators or assigns, and

The elements of removal of mortgaged property are as follows:

a. That personal property is Mortgaged under Chattel Mortgage Law;
b. That the offender knows that such property is so mortgaged;
c. That he Removes such mortgaged personal property to any province or city
other than the one in which it was located at the time of the execution of the
mortgage;
d. That the removal is permanent; and
e. That there is no written consent of mortgagee, executors, administrators, or
assigns to such removal.

The removal of the mortgaged personal property must be coupled with intent to
defraud.

2. Selling or pledging personal property already pledged, or any part thereof, under the
terms of Chattel Mortgage Law, without the consent of mortgagee written on the back
of the mortgage and noted on the record thereof in the office of the register of deeds of
the province where such property is located.

Damage to the mortgagee is not essential.