LUIS MARCOS P. LAUREL vs. HON. ZEUS C.

ABROGAR, Presiding Judge of the Regional Trial Court, Makati City,

Branch 150, PEOPLE OF THE PHILIPPINES& PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
(G.R. No. 155076 February 27, 2006)

FACTS OF THE CASE:

An allegation of “network fraud” in conducting alternative calling service instituted by the respondent PLDT against Baynet
Company Limited who sold “Bay Super Orient Card” (a phone card). This card uses International Simple Resale (ISR) routing
and completes 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 (International Gateway Facility) found at the terminating country, or in some
instances, even those from the originating country.

It operates actually like when you call your friends outside the Philippines, your voice to the other country by means of
electronic voice signals or impulses which emanate through the lines of PLDT (1.7M yung linyang ikinabit sa buong
Pilipinas), then that voice signals or impulses will enter into International Gateway Facility of our country (somehow like
going to Immigration) which will receive going through IGF of other country then proceed to the lines of their network
provider to connect with your friends internationally.

Here came the case, the PLDT submitted their “theft” case against the Filipino Corporate Secretary of the Baynet Laurel to
the Regional Trial Court wherein they argued that it conducts its ISR activities (selling phone cards) by utilizing an IPL to
course its incoming international long distance calls from Japan, that, Baynet offered the 27-minute international call for
37.03 YEN with 123 subscription to PLDT telephone numbers

Year 2000: 117.683 YEN (average: 2000-2004) = 1 dollar = 41.026 = 0.0775 PESO

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 detriment and prejudice of legitimate “BUSINESS”
operators like PLDT. The electronic voice signals to pass through the lines of PLDT, and ultimately to the called party’s
number. It averred:
● THAT, such service/facility is akin to electricity which, although an intangible property, may, nevertheless, be
appropriated and be the subject of theft.
● THAT, such service over a period of time for a consideration is the business that PLDT provides to its customers,
which enables the latter to send various messages to installed recipients.
● THAT, the service rendered by PLDT is akin to merchandise which has specific value, and therefore, capable of
appropriation by another, as in this case, through the ISR operations conducted by the movant and his co-accused.
● THAT, “international business calls and revenues constitute personal property” found in Article 308 of the
Revised Penal Code." It may glean like a “jumper” over the facilities of the PLDT.

Upon the determination of judicial probable cause, the respondent judge issued two search warrants at the 7th Floor, SJG
Building, Kalayaan Avenue, Makati City. There were arrests made upon personally found of operating the ISR and seizure
over the equipment of the office.

Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)" alleging that “NO PERSONAL PROPERTY” was stolen
from PLDT, hence, does not constitute theft under Article 308 of the Revised Penal Code.
● NOWHERE in the Revised Penal Code, or any other special penal law for that matter, prohibits ISR operations.
● THAT, telephone calls with the use of PLDT telephone lines, whether domestic or international, belong to the
persons making the call, not to PLDT.
● THAT, the caller merely uses the facilities of PLDT
● THAT, what the latter owns are the telecommunication infrastructures or facilities through which the call is made
● THAT, the 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.

The RTC ruled in favor of the respondents upheld in the jurisprudence that “interest in business” is personal property
capable of appropriation. It further declared that, through their ISR operations, the movant and his co-accused deprived
PLDT of fees for international long distance calls, and that the ISR used by the movant and his co-accused was no different
from the "jumper" used for stealing electricity.

In appeal, Laurel further added that the "business" in all these cases is the commercial activity, while the goods and
merchandise are the products of such activity. Thus, in prosecutions for theft of certain forms of energy, it is the electricity
or gas which is alleged to be stolen and not the "business" of providing electricity or gas. However, since a telephone
company does not produce any energy, goods or merchandise and merely renders a service or, in the words of PLDT, "the
connection and interconnection to their telephone lines/facilities," such service cannot be the subject of theft as defined
in Article 308 of the Revised Penal Code.
Even in the pronouncement of the former Justice Secretary that "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 Court of Appeals still ruled in favor of the respondents and argued that while business is generally an activity which is
abstract and intangible in form, it is nevertheless considered "property" under Article 308 of the Revised Penal Code.

Hence, this petition.

ISSUE:
Whether the electronic voice signals transmitted through the lines of the PLDT by means of calling cards issued by the
Baynet Inc were movable property that could be subjected to someone for the crime of theft using ISR that affects the
“business” of the provider?.

HELD:

No, it is an immovable property and cannot be subjected for the crime of theft under the Revised Penal Code

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 construction by the respondents of Article 308 of the said Code to include, within its coverage, the aforesaid
international telephone calls, telecommunication services and business is contrary to the letter and intent of the law.

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.

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

Art. 308. Who is 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.
Theft is likewise committed by:

1. Any person who, having found lost property, shall fail to deliver the same to the local authorities or to its
owner;
2. Any person who, after having maliciously damaged the property of another, shall remove or make use of
the fruits or object of the damage caused by him; and
3. Any person who shall enter an inclosed estate or a field where trespass is forbidden or which belongs to
another and without the consent of its owner, shall hunt or fish upon the same or shall gather cereals, or
other forest or farm products.

Intangible properties such as rights and ideas are not subject to theft because the same cannot be "taken" from the place it
is found and is occupied or appropriated.

Only movable and bodily things can be the object of theft. The theft of immovable things and incorporeal things (v.
gr., rights, ideas) cannot be part of this crime, since it is not possible to seize them, take them, to achieve their
appropriation. The Code uses the expression "furniture" in the sense of something that is likely to be taken from
the place where it is, such as money, jewelry, clothes, etc., so its concept does not completely coincide with that
formulated by the Civil Code

Electricity, the same as gas, is a valuable commodity, bought and sold like other personal property and is capable of
appropriation by another. It is a valuable article of merchandise, bought and sold like other personal property, susceptible
of being severed from a mass or larger quantity and of being transported from place to place. Electrical energy may,
likewise, be taken and carried away. It is a valuable commodity, bought and sold like other personal property. It may be
transported from place to place. There is nothing in the nature of gas used for illuminating purposes which renders it
incapable of being feloniously taken and carried away.

In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal property without the consent of the
owner thereof, the Philippine legislature could not have contemplated the human voice which is converted into electronic
impulses or electrical current which are transmitted to the party called through the PSTN of respondent PLDT and the ISR of
Baynet Card Ltd. within its coverage. When the Revised Penal Code was approved, on December 8, 1930, international
telephone calls and the transmission and routing of electronic voice signals or impulses emanating from said calls,
through the PSTN, IPL and ISR, were still non-existent. Case law is that, where a legislative history fails to evidence
congressional awareness of the scope of the statute claimed by the respondents, a narrow interpretation of the law is more
consistent with the usual approach to the construction of the statute. Penal responsibility cannot be extended beyond the
fair scope of the statutory mandate.

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. Indeed, the
parties received telephone calls from Japan.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Orders of the Regional Trial Court and the Decision
of the Court of Appeals are REVERSED and SET ASIDE. The Regional Trial Court is directed to issue an order granting the
motion of the petitioner to quash the Amended Information.