Facilities v. Lopez
REITERATIONFacts
The Antecedents: Facilities, Inc. (Facilities) and Primelink Properties and Development Corporation (PPDC), represented by its President and CEO, Ralph Lito W. Lopez (Lopez), entered into a Memorandum of Agreement (MOA) involving a "swap arrangement." Facilities agreed to lease condominium units for four years, and in consideration for the first 21 months, PPDC agreed to execute a deed of absolute sale over three lots (subject lots) in favor of Facilities and deliver the transfer certificate of title (TCT) within 360 days. PPDC also agreed to issue a certificate of ownership during title processing. Procedural History: Facilities filed a Complaint-Affidavit against Lopez before the Office of the City Prosecutor (OCP) of Mandaluyong City, alleging violations of Sections 25 and 39 of P.D. No. 957 and estafa under Article 316 of the Revised Penal Code (RPC). The OCP dismissed the complaint, ruling the remedy was civil. The Department of Justice (DOJ) reversed this, directing the filing of informations for violation of P.D. No. 957 and estafa. Lopez filed a Petition for Certiorari with the Court of Appeals (CA), which partially granted it, affirming the probable cause for violation of P.D. No. 957 but setting aside the directive to file an information for estafa, finding no probable cause for the latter. The Petition: Facilities filed a petition (G.R. No. 208642) arguing Lopez is guilty of estafa. Lopez filed a petition (G.R. No. 208883) insisting Facilities' remedy is purely civil and that he did not violate P.D. No. 957.
Issue(s)
Whether there is probable cause to indict Lopez for violation of Section 25, P.D. No. 957. Whether there is probable cause to indict Lopez for estafa under paragraph 1, Article 316 of the RPC.
Ruling
The Supreme Court granted Facilities, Incorporated's petition (G.R. No. 208642) and denied Ralph Lito W. Lopez's petition (G.R. No. 208883). It affirmed the Court of Appeals' Decision and Resolution with the modification that the City Prosecutor of Mandaluyong City is directed to file the appropriate information against Ralph Lito W. Lopez for estafa under paragraph 1, Article 316 of the Revised Penal Code.
Ratio Decidendi
On the issue of probable cause for violation of Section 25, P.D. No. 957: The Court found that there is evidence showing that more likely than not, Lopez violated Section 25 of P.D. No. 957. This section requires a developer to deliver the title of the lot or unit to the buyer upon full payment. The records established that Facilities and Lopez entered into agreements where PPDC, through Lopez, would transfer the subject lots to Facilities as consideration for the lease of condominium units. Facilities fulfilled its obligation by allowing PPDC to utilize the condominium units for 28 months, exceeding the stipulated period. Despite this, PPDC, through Lopez, refused to complete the titling process and issue the titles in Facilities' name, ignoring repeated demands. Lopez's justification that Facilities failed to pay the purchase price in full, including notarial and registration fees, was deemed unavailing because these taxes are only payable after PPDC pays its own sales tax, and the title was still registered in the name of Primo Erni, not PPDC. The Court emphasized that a contract is the law between the parties, and Lopez, having freely signed the MOA, cannot renege on his obligation to deliver the titles. The Court also clarified that a suit for violation of P.D. No. 957 is independent of civil remedies like rescission, and P.D. No. 957 expressly allows for remedies under existing laws, including the RPC. On the issue of probable cause for estafa under paragraph 1, Article 316 of the RPC: The Court held that Lopez may likewise be held criminally liable under the RPC. Article 316, paragraph 1, penalizes any person who, pretending to be the owner of any real property, shall convey, sell, encumber, or mortgage the same. The records showed that Lopez, on behalf of PPDC, misrepresented to Facilities that PPDC was the owner of the subject lots and had good and indefeasible title. These representations induced Facilities to enter into the MOA and subsequent contracts. Facilities complied with its obligations, but PPDC, through Lopez, failed to deliver the titles. Crucially, the subject lots remained in the name of Primo Erni, not PPDC, and certainly not Facilities, even up to the filing of the criminal complaint. The Court agreed with the Acting DOJ Secretary's observation that there was misrepresentation regarding the true status of the lots, and the continued failure to transfer ownership indicated bad faith and deceit in concealing the true status of the subject lots. Therefore, there was probable cause sufficient to institute a criminal complaint for estafa.
Main Doctrine
There is probable cause to indict a developer's President and CEO for violation of Section 25 of P.D. No. 957 and for estafa under Article 316 of the Revised Penal Code when the developer fails to deliver the title to the buyer upon full payment, despite representations of ownership and indefeasible title, and despite the buyer fulfilling its end of the bargain.