Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 183345               September 17, 2014

MA. GRACIA HAO and DANNY HAO, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES, Respondents.

DECISION

BRION, J.:

Before this Court is the petition for review on certiorari  under Rule 45 of the Rules of
1

Court, filed by Ma. Gracia Hao and Danny Hao (petitioners). They seek the reversal of
the Court of Appeals' (CA) decision  dated February 28, 2006 and resolution  dated June
2 3

13, 2008 in CA-G.R. SP No. 86289. These CA rulings affirmed the February 26,
2004  and July 26, 2004  orders of the Regional Trial Court (RTC) of Manila, which
4 5

respectively denied the petitioners' motion to defer arraignment and motion to lift warrant
of arrest.
6

Factual Antecedents

On July 11, 2003 private complainant Manuel Dy y Awiten (Dy) filed a criminal complaint
against the petitioners and Victor Ngo (Ngo) for syndicated estafa penalized under Article
315(2)(a) of the Revised Penal Code (RPC), as amended, in relation with Presidential
Decree (PD) No. 1689. 7

Dy alleged that he was a long-time client of Asiatrust Bank, Binondo Branch where Ngo
was the manager. Because of their good business relationship, Dy took Ngo’s advice to
deposit his money in an investment house that will give a higher rate of return. Ngo then
introduced him to Ma. Gracia Hao (Gracia), also known as Mina Tan Hao, who presented
herself as an officer of various reputable companies and an incorporator of State
Resources Development Corporation (State Resources), the recommended company
that can give Dy his higher investment return.8

Relying on Ngo and Gracia’s assurances, Dy initially invested in State Resources the
approximate amount of Ten Million Pesos (₱10,000,000.00). This initial investment
earned the promised interests, leading Dy, at the urging of Gracia, toincrease his
investment to almost One Hundred Million Pesos (₱100,000,000.00). Dy increased his
investments through several checks he issued in the name of State Resources.  In return,
9

Gracia also issued several checks to Dy representing his earnings for his investment.
Gracia issued checks in the total amount of One Hundred Fourteen Million, Two Hundred
Eighty Six Thousand, Eighty Six Pesos and Fourteen Centavos (₱114,286,086.14). All
these checks  were subsequently dishonored when Dy deposited them.
10

Dy sought the assistance of Ngo for the recovery of the amount of the dishonored
checks. Ngo promised assistance, but after a few months, Dy found out that Ngo already
resigned from Asiatrust Bank and could no longer be located. Hence, he confronted
Gracia regarding the dishonored checks. He eventually learned that Gracia invested his
money in the construction and realty business of Gracia’s husband, Danny Hao (Danny).
Despite their promises to pay, the petitioners never returned Dy’s money.
On July 17, 2003, Dy filed a supplemental affidavit to include in the criminal complaint
Chester De Joya, Allan Roxas, Samantha Roxas, Geraldine Chiong, and Lyn Ansuas –
all incorporators and/or directors of State Resources. 11

On the basis of Dy’s complaint  and supplemental affidavit,  the public prosecutor filed an
12 13

information  for syndicated estafa against the petitioners and their six co-accused. The
14

case was docketed as Criminal Case No. 03-219952 and was raffled to respondent RTC
of Manila, Branch 40.

Judge Placido Marquez issued warrants of arrest against the petitioners and the other
accused. Consequently, petitioners immediately filed a motion to defer arraignment and
motion to lift warrant of arrest. In their twin motions, they invoked the absence of
probable cause against them and the pendency of their petition for review with the
Department of Justice (DOJ). 15

In its February 26, 2004 order, the trial court denied the petitioners’ twin motions.  The16

petitioners moved for reconsideration but the trial court also denied this in its July 26,
2004 order. Consequently, the petitioners filed a petition for certiorariunder Rule 65 of the
Rules of Court with the CA.

The CA’s Ruling

The CA affirmed the denial ofthe petitioners’ motion to defer arraignment and motion to
lift warrant of arrest.

In determining probable cause for the issuance of a warrant of arrest, a judge is

mandated to personally evaluate the resolution of the prosecutor and its supporting
evidence.  The CA noted that Judge Marquez only issued the warrants of arrest after his
17

personal examination of the facts and circumstances of the case. Since the judge
complied with the Rules, the CA concluded that no grave abuse of discretion could be
attributed to him. 18

In its decision, however, the CA opined that the evidence on record and the assertions in
Dy’s affidavits only show probable cause for the crime of simple estafa,not syndicated
estafa. Under PD No. 1689, in order for syndicated estafato exist, the swindling must
have been committed by five or more persons, and the fraud must be against the general
public or at least a group of persons. In his complaint-affidavit, Dy merely stated that he
relied on the petitioners’ false representations and was defrauded into parting with his
money, causing him damage.  Since there was no evidence that State Resources was
19

formed to defraud the public in general or that it was used to solicit money from other
persons aside from Dy, then the offense charged should only be for simple estafa. 20

Nevertheless, the CA found that the trial court did not commit grave abuse of discretion in
issuing the warrants of arrest against the petitioners as there was still probable cause to
believe that the petitioners committed the crime of simple estafa. 21

The Petition

The petitioners submit that an examination of Dy’s affidavits shows inconsistencies in his
cited factual circumstances. These inconsistencies, according to the petitioners, negate
the existence of probable cause against themfor the crime charged.

The petitioners also contend thatit was only Ngo who enticed Dy to invest his money. As
early as August 1995, State Resources had already been dissolved, thus negating the
assertion that Dy advanced funds for this corporation.  They question the fact that it took
22
Dy almost five years to file his complaint despitehis allegation that he lost almost
₱100,000,000.00. 23

Lastly, the petitioners claim that the warrants of arrest issued against them were null and
void. Contrary to the trial court’s findings, the CA noted in the body of its decision, that
PD 1689 was inapplicable to their case. There was no evidence to show that State
Resources was formed to solicit funds not only from Dy but also from the general public.
Since simple estafaand syndicated estafaare two distinct offenses, then the warrants of
arrest issued to petitioners were erroneous because these warrants pertained to two
different crimes.24

The Court’s Ruling

We resolve to DENYthe petition.

Procedural Consideration

We note that the present petition questions the CA’s decision and resolution on the
petition for certiorarithe petitioners filed with that court. At the CA, the petitioners imputed
grave abuse of discretion against the trial court for the denialof their twin motions to defer
arraignment and to lift warrant of arrest.

This situation is similar to the procedural issue we addressed in the case of Montoya v.
Transmed Manila Corporation  where we faced the question of how to review a Rule 45
25

petition before us, a CA decision made under Rule 65. We clarified in this cited case the
kind of review that this Court should undertake given the distinctionsbetween the two
remedies. In Rule 45, we consider the correctness of the decision made by an inferior
court. In contrast, a Rule 65 review focuses on jurisdictional errors.

As in Montoya, we need to scrutinize the CA decision in the same context that the
petition for certiorari it ruled upon was presented to it. Thus, we need to examine the CA
decision from the prism of whether it correctly determined the presence or absence of
grave abuse of discretion on the part of the trial court and not on the basis of whether the
trial court’s denial of petitioners’ motions was strictly legally correct. In question form, the
question to ask is: did the CA correctly determine whether the trial court committed grave
abuse of discretion in denying petitioners’ motions to defer arraignment and lift warrant of
arrest?

Probable Cause for the Issuance of a Warrant of Arrest

Under the Constitution  and the Revised Rules of Criminal Procedure,  a judge is
26 27

mandated to personally determine the existence of probable cause after hispersonal

evaluation of the prosecutor’s resolution and the supporting evidence for the crime
charged. These provisions command the judge to refrain from making a mindless
acquiescence to the prosecutor’s findings and to conduct his own examination of the
facts and circumstances presented by both parties.

Section 5(a) of Rule 112, grantsthe trial court three options upon the filing of the criminal
complaint orinformation. He may: a) dismiss the case if the evidence on record clearly
failed to establish probable cause; b) issue a warrant of arrest if it finds probable cause;
or c) order the prosecutor to present additional evidence within five days from notice in
case of doubt on the existence of probable cause. 28

In the present case, the trial court chose to issue warrants of arrest to the petitioners and
their co-accused.To be valid, these warrants must have been issued after compliance
with the requirement that probable cause be personally determined by the judge. Notably
at this stage, the judge is tasked to merely determine the probability, not the certainty, of
guilt of the accused.In doing so, he need not conduct a de novohearing; he only needs to
personally review the prosecutor's initial determination and see if it is supported by
substantial evidence. 29

The records showed that Judge Marquez made a personal determination of the existence
of probable cause to support the issuance of the warrants. The petitioners, in fact, did not
present any evidence to controvert this. As the trial court ruled in its February 26, 2004
order:

The non-arrest of all the accused or their refusal to surrender practically resulted in the
suspension of arraignment exceeding the sixty (60) days counted from the filing of co-
accused De Joya’s motions, which may be considered a petition for review, and that of
co-accused Spouses Hao’s own petition for review. This is not to mention the delay in the
resolutionby the Department of Justice. On the other hand, co-accused DeJoya’s motion
to determine probable cause and co-accused Spouses Hao’s motion to lift warrant of
arrest have been rendered moot and academic with the issuance of warrants of arrest by
this presiding judge after his personal examination of the facts and circumstances strong
enough in themselves to support the belief that they are guilty of the crime that in fact
happened.  [Emphasis ours]
30

Under this situation, we conclude that Judge Marquez did not arbitrarily issue the
warrants of arrest against the petitioners. As stated by him, the warrants were only
issuedafter his personal evaluation of the factual circumstances that led him to believe
that there was probable cause to apprehend the petitioners for their commission of a
criminal offense.

Distinction between Executive and Judicial Determination of Probable Cause

In a criminal prosecution, probable cause is determined at two stages. The first is at the
executive level, where determination is made by the prosecutor during the preliminary
investigation, before the filing of the criminal information. The second is at the judicial
level, undertaken by the judge before the issuance of a warrant of arrest.

In the case at hand, the question before us relates to the judicial determination of
probable cause. In order to properly resolve if the CA erred in affirming the trial court’s
issuance of the warrants of arrest against the petitioners, it is necessary to scrutinize the
crime of estafa, whether committed as a simple offense or through a syndicate.

The crime of swindling or estafa is covered by Articles 315-316 of the RPC. In these
provisions, the different modes by which estafa may be committed, as well as the
corresponding penalties for each are outlined. One of these modes is estafaby means of
deceit. Article 315(2)(a) of the RPC defines how this particular crime is perpetrated:

2. By means of any of the following false pretenses or fraudulent acts executed prior toor
simultaneously with the commission of the fraud:

(a) By using fictitious name, or falsely pretending to possess power, influence,

qualifications, property, credit, agency, business orimaginary transactions, or by means
of other similar deceits.

Under this provision, estafa has the following elements: 1) the existence of a false
pretense, fraudulent act or fraudulent means; 2) the execution of the false pretense,
fraudulent act or fraudulent means prior to or simultaneously with the commission of the
fraud; 3) the reliance by the offended party on the false pretense, fraudulent act or
fraudulent means, which induced him to part withhis money or property; and 4) as a
result, the offended party suffered damage. 31

As Dy alleged in his complaint-affidavit, Ngo and Gracia induced him to invest with State
Resources and promised him a higher rate of return.  Because of his good business
32

relationship with Ngo and relying on Gracia’s attractive financial representations, Dy

initially invested the approximate amount of ₱10,000,000.00.

This first investment earned profits. Thus, Dy was enticed by Gracia to invest more so
that he eventually advanced almost ₱100,000,000.00  with State Resources. Gracia’s
33

succeeding checks representing the earnings of his investments, however, were all
dishonored upon deposit.  He subsequently learned that the petitioners used his money
34

for Danny’s construction and realty business.  Despite repeated demands and the
35

petitioners’ constant assurances to pay, they never returned Dy’s invested money and its
supposed earnings. 36

These cited factual circumstances show the elements of estafaby means of deceit. The
petitioners inducedDy to invest in State Resources promising higher returns. But
unknown to Dy, what occurred was merely a ruse to secure his money to be used in
Danny’s construction and realty business. The petitioners’ deceit became more blatant
when they admitted in their petition that as early as August 1995, State Resources had
already been dissolved.  This admission strengthens the conclusion that the petitioners
37

misrepresented facts regarding themselves and State Resources in order to persuade Dy

to part with his money for investment with an inexistent corporation.

These circumstances all serve as indicators of the petitioners’ deceit. "Deceit is the false
representation of a matter of fact, whether by words or conduct, by false or misleading
allegations, or by concealment of that which should have been disclosed, which deceives
or is intended to deceive another, so that he shall act upon it to his legal injury."
38

Thus, had it not been for the petitioners’ false representations and promises, Dy would
not have placed his money in State Resources, to his damage. These allegations cannot
but lead us to the conclusion that probable cause existed as basis to arrest the
petitioners for the crime of estafa by means of deceit.

We now address the issue of whether estafain this case was committed through a
syndicate.

Under Section 1 of PD No. 1689,  there is syndicated estafaif the following elements are
39

present: 1) estafaor other forms of swindling as defined in Articles 315 and 316 of the
RPC was committed; 2) the estafaor swindling was committed by a syndicate of five or
more persons; and 3) the fraud resulted inthe misappropriation of moneys contributed by
stockholders, or members of rural banks, cooperatives, "samahang nayon[s]," or farmers
associations or of funds solicited by corporations/associations from the general public.40

The factual circumstances of the present case show that the first and second elements of
syndicated estafaare present; there is probable cause for violation of Article 315(2)(a) of
the RPC against the petitioners. Moreover, in Dy’s supplemental complaint-affidavit, he
alleged that the fraud perpetrated against him was committed, not only by Ngo and the
petitioners, but also by the other officers and directors of State Resources. The number
of the accused who allegedly participated in defrauding Dy exceeded five, thus satisfying
the requirement for the existence of a syndicate.

However, the third element of the crime is patently lacking. The funds fraudulently
solicited by the corporation must come from the general public. In the present case, no
evidence was presented to show that aside from Dy, the petitioners, through State
Resources, also sought investments from other people. Dy had no co-complainants
alleging that they were also deceived to entrust their money to State Resources. The
general public element was not complied with. Thus, no syndicated estafaallegedly took
place, only simple estafa by means of deceit.

Despite this conclusion, we still hold that the CA did not err in affirming the trial court’s
denial ofthe petitioners’ motion to lift warrant of arrest.

A warrant of arrest should be issued if the judge after personal evaluation of the facts and
circumstances is convinced that probable cause exists that an offense was committed.

Probable cause for the issuance ofa warrant of arrest is the existence of such facts and
circumstances that would lead a reasonably discreet and prudent person to believethat
an offense was committed by the person sought to be arrested.  This must be 41

distinguished from the prosecutor’s finding of probable cause which is for the filing of the
proper criminal information. Probable cause for warrant of arrest is determined to
address the necessity of placing the accused under custody in order not to frustrate the
ends of justice.
42

In People v. Castillo and Mejia,  we explained the distinction between the two kinds of
43

probable cause determination:

There are two kinds of determination of probable cause: executive and judicial. The
executive determination of probable cause is one made during preliminary investigation.
It is a function that properly pertains to the public prosecutor who is given a broad
discretion to determine whether probable cause exists and to charge those whom he
believes to have committed the crime as defined by law and thus should be held for trial.
Otherwise stated, such official has the quasi-judicial authority to determine whether or not
a criminal case must be filed in court. Whether or not that function has been correctly
discharged by the public prosecutor, i.e., whether or not he has made a correct
ascertainment of the existence of probable cause in a case, is a matter that the trial court
itself does not and may not be compelled to pass upon.

The judicial determination of probable cause, on the other hand, is one made by the
judge to ascertain whether a warrant of arrest should be issued against the accused. The
judge must satisfy himself that based on the evidence submitted, there is necessity for
placing the accused under custody in order not to frustrate the ends of justice. If the
judge finds no probable cause, the judge cannot be forced to issue the arrest
warrant.  [Emphasis ours]
44

With our conclusion that probable cause existed for the crime of simple estafa and that
the petitioners have probably committed it, it follows that the issuance of the warrants of
arrest against the petitioners remains to be valid and proper. To allow them to go scot-
free would defeat rather than promote the purpose of a warrant of arrest, which is to put
the accused in the court’s custodyto avoid his flight from the clutches of justice.

Moreover, we note that simple estafa and syndicated estafa are not two entirely different
crimes. Simple estafais a crime necessarily included in syndicated estafa. An offense is
necessarily included in another offense when the essential ingredients of the former
constitute or form a part of those constituting the latter.
45

Under this legal situation, only a formal amendment of the filed information under Section
14, Rule 110 of the Rules of Court  is necessary; the warrants of arrest issued against
46

the petitioners should not be nullified since probable cause exists for simple estafa.

Suspension of Arraignment
Under Section 11(c), Rule 116of the Rules of Court, an arraignment may be suspended if
there is a petition for review of the resolution of the prosecutor pending at either the DOJ,
or the Office of the President. However, such period of suspension should not exceed
sixty (60) days counted from the filing of the petition with the reviewing office.

As the petitioners alleged, they filed a petition for review with the DOJ on November 21,
2003. Since this petition had not been resolved yet, they claimed that their arraignment
should be suspended indefinitely.

We emphasize that the right of an accused to have his arraignment suspended is not an
unqualified right.  In Spouses Trinidad v. Ang,  we explained that while the pendency of a
1âwphi1
47

petition for review is a ground for suspension of the arraignment, the Rules limit the
deferment of the arraignment to a period of 60 days reckoned from the filing of the
petition with the reviewing office. It follows, therefore, that after the expiration of the 60-
day period, the trial court is bound to arraign the accused or to deny the motion to defer
arraignment. 48

As the trial court found in its February 26, 2004 order, the DOJ's delay in resolving the
petitioners' petition for review had already exceeded 60 days. Since the suspension of
the petitioners' arraignment was already beyond the period allowed by the Rules, the
petitioners' motion to suspend completely lacks any legal basis.

As a final note, we observe that the resolution of this case had long been delayed
because of the petitioners' refusal to submit to the trial court's jurisdiction and their
erroneous invocation of the Rules in their favor. As there is probable cause for the
petitioners' commission of a crime, their arrest and arraignment should now ensue so
that this case may properly proceed to trial, where the merits of both the parties'
evidence and allegations may be weighed.

WHEREFORE, premises considered, we hereby DENY the petition and AFFIRM WITH
MODIFICATION the February 28, 2006 decision and June 13, 2008 resolution of the
Court of Appeals in CAG.R. SP No. 86289. We hereby order that petitioners Ma. Gracia
Hao and Danny Hao be charged for simple estafa under Article 315(2)(a) of the Revised
Penal Code, as amended and be arraigned for this charge. The warrants of arrest issued
stand.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR. *

Associate Justice Associate Justice

MARVIC M.V.F. LEONEN

Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court's
Division.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes

 Designated as Acting Member in lieu of Associate Justice Jose C. Mendoza, per Special
*

Order No. 1767 dated August 27, 2014.

1
 Rollo, p. 3-41.

 Penned by Associate Justice Amelita G. Tolentino, and concurred in by Associate

2

Justices Portia Aliño Hormachuelos and Vicente S.E. Veloso; id. at 45-59.

3
 Id. at 61-63.

4
 Id. at 172-176.

5
 Id. at 186-187.

6
 Id. at 160-171.

7
 Increasing the Penalty for Certain Forms of Swindling or Estafa.

8
 Rollo, p. 64.

9
 Id. at 68-70.

10
 Id. at 71-84.

11
 Id. at 87.

12
 Id. at 64-66.

13
 Id. at 87-90.

14
 Id. at 157-159.

15
 Id. at 47.
  Id. at 48.
16

 Id.
17

 Id. at 51.
18

 Id. at 55-56.
19

 Id. at 58.
20

 Id. at 50.
21

 Id. at 29-30.
22

 Id. at 36.
23

 Id. at 37-40.
24

 G.R. No. 183329, August 27, 2009, 597 SCRA 334.

25

 Article III, Section 2. The right of the people to be secure in their persons, houses,
26

papers, and effects against unreasonable searches and seizures of whatever nature and
for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to be seized.

 Rule 112, Section 5. When warrant of arrest may issue. — (a) By the Regional Trial
27

Court. — Within ten (10) days from the filing of the complaint or information, the judge
shall personally evaluate the resolution of the prosecutor and its supporting evidence. He
may immediately dismiss the case if the evidence on record clearly fails toestablish
probable cause. If he finds probable cause, he shall issue a warrant of arrest, or a
commitment order if the accused has already been arrested pursuant to a warrant issued
by the judge who conducted the preliminary investigation or when the complaint or
information was filed pursuant to section 6 of this Rule. In case of doubt on the existence
of probable cause, the judge may order the prosecutor to present additional evidence
within five (5) days from notice and the issue must be resolved by the court within thirty
(30) days from the filing of the complaint or information.

 People v. Hon. Dela Torre-Yadao, G.R. Nos. 162144-54, November 13, 2012, 685
28

SCRA 264, 287.

 People v. CA, Cerbo and Cerbo, G.R. No. 126005, January 21, 1999, 301 SCRA 475,
29

486.

 Rollo, p. 175.
30

 RCL Feeders Pte., Ltd. v. Hon. Perez, 487 Phil. 211, 220-221 (2004).
31

 Rollo, p. 64.
32

 Id.
33

 Id.
34
  Id. at 65.
35

 Id.
36

 Id. at 30.
37

 Galvez and Guy v. Hon. Court of Appeals, G.R. Nos. 187919, 187979, 188030, April
38

25, 2012, 671 SCRA 222, 232.

 Section 1. Any person or persons who shall commit estafa or other forms of swindling
39

as defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be
punished by life imprisonment to death if the swindling (estafa) is committed by a
syndicate consisting of five or more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in
the misappropriation of money contributed by stockholders, or members of rural banks,
cooperative, "samahang nayon(s)", or farmers association, or of funds solicited by
corporations/associations from the general public.

 People v. Balasa, 356 Phil. 362, 395-396 (1998).

40

 Allado v. Diokno, G.R. No. 113630, May 5, 1994, 232 SCRA 192, 199-200.
41

 Mendoza v. People, G.R. No. 197293, April 21, 2014.

42

 G.R. No. 171188, June 19, 2009, 590 SCRA 95.

43

 Id. at 105-106.
44

 Ssgt. Pacoy v. Hon. Cajigal,560 Phil. 598, 609 (2007).

45

 Section 14. Amendment or substitution. — A complaint or information may be

46

amended, in form or in substance, without leave of court, at any timebefore the accused
enters his plea. After the plea and during the trial, a formal amendment may only be
made with leave of court and when it can be done without causing prejudice to the rights
of the accused.

However, any amendment before plea, which downgrades the nature of the offense
charged in or excludes any accused from the complaint or information, can be made only
upon motion by the prosecutor, with notice to the offended party and with leave of court.
The court shall state its reasons in resolving the motion and copies of its order shall be
furnished all parties, especially the offended party. (n)

If it appears at any time before judgment that a mistake has been made incharging the
proper offense, the court shall dismiss the original complaint or information upon the filing
of a new one charging the proper offense in accordance with section 19, Rule 119,
provided the accused would not be placed in double jeopardy. The court may require the
witnesses togive bail for their appearance at the trial. (14a)

 G.R. No. 192898, January 31, 2011, 641 SCRA 214.

47

 Id. at 218.
48