Antazo v. People
REITERATIONFacts
The Antecedents: Napoleon Antazo, a lawyer and retired municipal judge, owned a parcel of land. He entered into a Contract of Purchase and Sale with spouses Mariano and Elena Medina for a portion of this land (Lot No. 2-A-2) for P4,277.00, payable in installments. The contract stipulated that ownership would remain with Antazo until full payment, and he obliged himself to deliver the title free from all liens and encumbrances upon full payment. Procedural History: On August 19, 1965, Antazo mortgaged the entire Lot No. 2-A (including Lot 2-A-2) to Binañgonan Rural Bank for P3,000.00, without the Medinas' knowledge or consent. The Medinas completed their installment payments on July 16, 1966, and demanded the title and an absolute deed of sale. On August 12, 1966, Antazo executed a deed of absolute sale for Lot 2-A-2, warranting it to be free from liens and encumbrances, despite the existing mortgage. The mortgage was only discharged on August 14, 1971. The Medinas discovered the mortgage and a subsequent levy on execution (from a PNB case) when they investigated the title in 1970. Despite demands, Antazo failed to deliver a separate title. Antazo was charged with estafa. The Court of First Instance of Rizal convicted him, sentencing him to two months and one day of arresto mayor and a fine of P4,277.00, with subsidiary imprisonment. The Court of Appeals affirmed the conviction, modifying only the subsidiary imprisonment rate. The Petition: Antazo filed a petition for certiorari with the Supreme Court, assailing the decision of the Court of Appeals and praying for his acquittal. He argued that a mere promise to perform an obligation does not constitute deceit, and failure to perform does not change its character, especially since the intention to defraud must exist at the time of the deceitful act. He also contended that the Medinas were aware of the encumbrances because they were recorded in the Register of Deeds.
Issue(s)
Whether the petitioner committed estafa under Article 316, paragraph 2 of the Revised Penal Code when he executed a Deed of Absolute Sale with a warranty that the property was free from liens and encumbrances, despite an existing mortgage. Whether the registration of the mortgage in the Register of Deeds negates the element of deceit for the crime of estafa.
Ruling
The Supreme Court dismissed the petition for certiorari for lack of merit, affirming the conviction of Napoleon Antazo for estafa.
Ratio Decidendi
On the issue of estafa and deceit: The Court held that Antazo committed estafa under Article 316, paragraph 2 of the Revised Penal Code. The transaction involved two stages: the contract to sell and the execution of the deed of absolute sale. While the contract to sell merely created a commitment to transfer title upon full payment, the deceit occurred at the second stage. When the Medinas completed their payments and demanded the title, Antazo executed a Deed of Absolute Sale (Exhibit B) containing an express warranty that the lot was "free from all liens and encumbrances." At that time, the property was still mortgaged to Binañgonan Rural Bank and had a levy on execution. This express warranty, made when the property was demonstrably encumbered, constituted the false representation or deceit essential for estafa. The Court emphasized that Antazo, as a lawyer and former municipal judge, was aware of the legal implications of his actions, suggesting an intent to mislead the complainants. On the issue of knowledge of encumbrances: The Court found Antazo's argument that the Medinas were aware of the encumbrances due to their registration in the Register of Deeds to be devoid of merit. The Court clarified that for the offense of estafa under Article 316, paragraph 2, the existence of the false pretense or misrepresentation in the deed of sale is sufficient. The fact that the encumbrance was recorded does not negate the deceit foisted upon the vendee. The law does not compel a vendee to conduct an independent investigation of the property's status when the vendor provides an express warranty. The vendee is entitled to rely on the vendor's representations, and Antazo's conduct, characterized by suppression of material information and false representation, clearly demonstrated a lack of good faith. This deception served to forestall Antazo's obligation to deliver a clear title.
Main Doctrine
A vendor who executes a deed of absolute sale with a warranty that the property is free from liens and encumbrances, when in fact it is still mortgaged, commits estafa under Article 316, paragraph 2 of the Revised Penal Code, as the express warranty constitutes deceit, even if the encumbrance is a matter of public record.