Orbe vs. Miaral (G.R. No.

217777, August 16, 2017)

Facts:

This case involves a dispute between petitioner Priscilla Orbe and respondent Leonora O. Miaral.
Leonora Miaral agreed to engage in the garment exportation business with her sister Priscilla Orbe. They
executed a partnership agreement and they both agreed to contribute P250,000.00 each to the business
and to divide the profits equally. Petitioner initially invested the amount of P183,999.00 and tendered
the amount of P20,000.00 for the payment of salaries of the workers at the factory. Subsequently, Orbe
discovered that there was no exportation of garments to the United States or any other transactions in
the United States that took place. She demanded the return of the funds but the respondent and her
daughter Anne Kristine failed to comply. Thus, petitioner Priscilla Orbe filed a complaint for estafa
against the respondent and her daughter. The Office of the City Prosecutor initially dismissed the
complaint stating that the dispute was civil in nature and not a criminal for estafa.

The Regional Trial Court denied the motion to withdraw the information for estafa and ordered
the arraignment of the respondent and her daughter Anne Kristine which leads to an appeal to the Court
of Appeals. The Court of Appeals granted the appeal and ordered the withdrawal of the information for
estafa. Thus, the petitioner filed a petition for review on certiorari to the Supreme Court.

Issue:

Can a complaint for estafa prosper when you entered into a partnership agreement?

Ruling:

The Court ruled that when money or property had been received by a partner for a specific
purpose and later misappropriated it, such partner is guilty of estafa. In the case at bar, petitioner’s
initial contributions of P183,999.00 and P20,000.00 were all for specific purposes: for the buying and
selling of garments and for the salaries of the factory workers, respectively. When the respondent failed
to account for these amounts or return these amounts to petitioner upon demand, there is probable
cause to hold that respondent misappropriated the amounts and had not used then for their intended
purposes. Liwanag vs. CA applies to the partnership agreement executed between the petitioner and the
respondent.

The Court also found that the action for estafa has not yet prescribed as the prescriptive period
was interrupted by the filing of the complaint. The 15-year prescriptive period commenced in April 1996
when the petitioner discovered that one of the checks that respondent issued as payment was
dishonored for having been withdrawn against insufficient funds.