VOL.

134, JANUARY 31, 1985 317

Sycip vs. Court of Appeals

*
No. L-38711. January 31, 1985.

FRANCISCO SYCIP, petitioner, vs. HONORABLE COURT

OF APPEALS and PEOPLE OF THE PHILIPPINES,
respondents.

Criminal Procedure; Constitutional Law; Appeals; It is

discretionary for the appellate court whether to order a hearing of
the case before it or decide the appeal solely on the evidence
submitted to the trial court.—Petitioner in his first and second
assigned errors argues that respondent Court of Appeals erred in
denying him his day in court notwithstanding his motion praying
that the appealed case be heard. He invokes Section 9 of Rule 124
of the Revised Rules of Court and relates it to Sections 1 and 17 of
Article IV of the New Constitution. This contention is devoid of
merit. Petitioner was afforded the right to be present during every
step in the trial before the Court of First Instance, that is, from
the arraignment until the sentence was promulgated. On appeal,
he cannot assert as a matter of right to be present and to be heard
in connection with his case. It is the procedure in respondent
court that within 30 days from receipt of the notice that the
evidence is already attached to the record, the appellant shall file
40 copies of his brief with the clerk accompanied by proof of
service of 5 copies upon the appellee (Section 3, Rule 124 of the
Revised Rules of Court). Within 30 days from receipt of
appellant’s brief, the appellee shall file 40 copies of his brief with
the clerk accompanied by proof of service of 5 copies upon the
appellant (Section 4, Rule 124 of the Revised Rules of Court).
Each party may be allowed extensions of time to file brief for good
and sufficient

________________

* SECOND DIVISION.

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Sycip vs. Court of Appeals

cause. Thereafter, the appellate court may reverse, affirm or

modify the judgment, increase or reduce the penalty imposed,
remand the case for new trial or re-trial or dismiss the case
(Section 11, Rule 124 of the Revised Rules of Court). It is
discretionary on its part whether or not to set a case for oral
argument. If it desires to hear the parties on the issues involved,
motu propio or upon petition of the parties, it may require
contending parties to be heard on oral arguments. Stated
differently, if the Court of Appeals chooses not to hear the case,
the Justices composing the division may just deliberate on the
case, evaluate the recorded evidence on hand and then decide it.
Accused-appellant need not be present in the court during its
deliberation or even during the hearing of the appeal before the
appellate court; it will not be heard in the manner or type of
hearing contemplated by the rules for inferior or trial courts.

Same; Obligations and Contracts; Criminal Law;

Compensation cannot take place where, with respect to the money
involved in the estafa case, the complainant was merely acting as
agent of another. In set-off the two persons must in their own right
be creditor and debtor of each other.—In this third and fourth
assigned errors, petitioner contends that respondent Court of
Appeals erred in not applying the provisions on compensation or
setting-off debts under Articles 1278 and 1279 of the New Civil
Code, despite evidence showing that Jose K. Lapuz still owed him
an amount of more than P5,000.00 and in not dismissing the
appeal considering that the latter is not legally the aggrieved
party. This contention is untenable. Compensation cannot take
place in this case since the evidence shows that Jose K. Lapuz is
only an agent of Albert Smith and/or Dr. Dwight Dill.
Compensation takes place only when two persons in their own
right are creditors and debtors of each other, and that each one of
the obligors is bound principally and is at the same time a
principal creditor of the other. Moreover, as correctly pointed out
by the trial court, Lapuz did not consent to the off-setting of his
obligation with petitioner’s obligation to pay for the 500 shares.

Obligations and Contracts; Appeal; Non-applicability of

Statute of Frauds must be raised in the trial court, otherwise it
cannot be entertained on appeal.—Anent the fifth assigned error,
petitioner argues that the appellate court erred in not ruling that
the deed of sale is a consummated contract and, therefore, not
covered by the Statute of Frauds. It must be pointed out that the
issue on whether or not the alleged contract of sale is covered by
the Statute of Frauds bas not been raised in the trial court or with
the Court of Appeals. It

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Sycip vs. Court of Appeals

cannot now be raised for the first time in this petition. Thus,
there is no need for respondent court to make findings of fact on
this matter.

Criminal Law; There was a prior demand to pay the

P5,000.00 representing the value of the stocks accused sold in
behalf of complainant who acted as agent for the owners thereof.
Estafa exists.—Indeed, Jose K. Lapuz demanded from petitioner
the amount of P5,000.00 with a notice that in the event he
(petitioner) would fail to pay the amount, Lapuz would file an
estafa case against him. By and large, respondent Court of
Appeals has not overlooked facts of substance and value that, if
considered, would alter the result of the judgment.

PETITION for certiorari to review the decision of the Court

of Appeals.

The facts are stated in the opinion of the Court.

RELOVA, J.:

On August 25, 1970, the then Court of First Instance of

Manila rendered a decision convicting the herein petitioner
Francisco Sycip of the crime of estafa and sentencing him
to an indeterminate penalty of three (3) months of arresto
mayor, as minimum, to one (1) year and eight (8) months of
prision correccional, as maximum; to indemnify
complainant Jose K. Lapuz the sum of P5,000.00, with
subsidiary imprisonment in case of insolvency; and to pay
the costs.
The then Court of Appeals affirmed the trial court’s
decision but deleted that part of the sentence imposing
subsidiary imprisonment.
The facts of the case as found by respondent appellate
court read:

“x x x [I]n April 1961, Jose K. Lapuz received from Albert Smith

in Manila 2,000 shares of stock of the Republic Flour Mills, Inc.,
covered by Certificate No. 57 in the name of Dwight Dill who had
left for Honolulu. Jose K. Lapuz ‘was supposed to sell his (the
shares) at present market value out of which I (he) was supposed
to get certain commission.’ According to Jose K. Lapuz, the
accused-appellant approached him and told him that he had good
connections

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Sycip vs. Court of Appeals

in the Stock Exchange, assuring him that he could sell them at a

good price. Before accepting the offer of the accused-appellant to
sell the shares of stock, Jose K. Lapuz made it clear to him that
the shares of stock did not belong to him and were only entrusted
to him for sale. He then gave the shares of stock to the accused-
appellant who put them in the market.
“Thereafter, Jose K. Lapuz received a letter from the accused-
appellant, dated April 25, 1961 (Exhibit ‘A’), the latter informing
him that ‘1,758 shares has been sold for a net amount of
P29,000.00,’ but that the transaction could not be concluded until
they received the Power of Attorney duly executed by Dwight Dill,
appointing a person to endorse the certificate of stock, and a
resolution from the Biochemical Research Laboratory, Inc.,
authorizing the transfer of the certificate. Jose K. Lapuz signed
his conformity to the contents of the letter.
“Jose K. Lapuz declared that he ‘was able to secure a power of
attorney of Dr. Dwight Dill and gave it to the accused-appellant.’
The power of attorney authorized the sale of 1,758 shares only;
the difference of 242 shares were given back to Biochemical
Research Laboratory, Inc.
“Of the 1,758 shares of stock, the accused-appellant sold 758
shares for P12,128.00 at P16.00 a share, for which Jose K. Lapuz
issued a receipt, dated May 23, 1961 (Exhibit ‘C’). On the same
day, Jose K. Lapuz turned over to Albert Smith the sum of
P9,981.40 in payment of 758 shares of P14.00 a share (Exhibits ‘D’
and ‘E’).
“On May 30, 1961, Jose K. Lapuz received a letter from the
accused-appellant (Exhibit ‘F’), the latter informing him that
‘although the deal (relative to the 1,000 shares) has been closed,
actual delivery has been withheld pending receipt of payment x x
x, I have chose(n) to return the shares x x x,’ enclosing Certificate
No. 955 for 500 shares, Certificate No. 952 for 50 shares in name
of Felix Gonzales, and the photostat of Certificate No. 953 for 208
shares, which had been sold to Trans Oceanic Factors and
Company, for which a check would be issued ‘within the next few
days.’ He promised to deliver the 242 shares as soon as he would
have received them from one Vicente Chua.
“The next day (May 31, 1961), Jose K. Lapuz wrote a letter to
the accused-appellant (Exhibit ‘C’), stating therein, ‘Per our
conversation this morning, I hereby authorize you to sell 1,000
shares of Republic Flour Mills.’
“Later, the accused-appellant wrote a letter to Jose K. Lapuz,
dated June 1, 1961 (Exhibit ‘I’), confirming their conversation on

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Sycip vs. Court of Appeals

that date that ‘500 shares out of the 1,000 shares of the Republic
Flour x x x has been sold,’ and stating further that ‘pending
receipt of the payment, expected next week, we are enclosing
herewith our draft to cover the full value of 500 shares.’ He asked
in that letter, ‘Please give me the 50 shares in the name of Mr.
Felix Gonzales and the photostat of 208 shares in the name of
Trans Oceanic Factors and Company.’
“The date of the letter (Exhibit ‘I’) is disputed, the prosecution
contending that it should be July 1, 1961, not June 1, 1961. The
contention of the prosecution has the support of the date of the
draft (Exhibit ‘J’) mentioned in the letter.
“The accused-appellant sold and paid for the other 500 shares
of stock, for the payment of which Jose K. Lapuz issued in his
favor a receipt, dated June 9, 1961 (Exhibit ‘H’).
“The draft (Exhibit ‘J’) for P8,000.00, ‘the full value of the 500
shares’ mentioned in the letter of the accused-appellant (Exhibit
‘I’), was dishonored by the bank, for lack of funds. Jose K. Lapuz
then ‘discovered from the bookkeeper that he got the money and
he pocketed it already, so I (he) started hunting for Mr. Sycip’
(accused-appellant). When he found the accused-appellant, the
latter gave him a check in the amount of P5,000.00, issued by his
daughter on July 12, 1961 (Exhibit ‘K’). This also was dishonored
by the bank for lack of sufficient funds to cover it (Exhibits ‘K-1’
and ‘K-2’).
“When Jose K. Lapuz sent a wire to him, telling him that he
would ‘file estafa case (in the) fiscals office x x x against him’
unless he raise [the] balance [of] eight thousand’ (Exhibit ‘L’), the
accused-appellant answered him by sending a wire, ‘P5,000
remitted ask boy check Equitable (Exhibit ‘M’). But ‘the check was
never made good,’ so Jose K. Lapuz testified. He had to pay Albert
Smith the value of the 500 shares of stock.” (Petitioner’s brief, pp.
58-62)
Coming to this Court on a petition for review on certiorari,
petitioner claims that respondent appellate court erred (1)
in denying petitioner of a hearing, as provided under
Secion 9, Rule 124, Rules of Court; (2) in not upholding due
process of law (Sections 1 and 17), Article IV, Bill of Rights,
Constitution; (3) in refusing to uphold the provisions on
compensation, Articles 1278 and 1279, Civil Code; (4) in not
dismissing the complaint, even granting arguendo, that
compensation does not apply; (5) in not ruling that a
consummated contract (Deed of Sale, Exhibit ‘10’) is not
covered by the Statute of Frauds and that its decision is not
in accordance with Section
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Sycip vs. Court of Appeals

4, Rule 51, Rules of Court; and, (6) in ignoring the ruling

case promulgated by this Honorable Supreme Court in
People vs. Benitez, G.R. No. L-15923, June 29, 1960, in its
applicability to offenses under Article 315, paragraph 1 (b)
of the Penal Code.
Petitioner in his first and second assigned errors argues
that respondent Court of Appeals erred in denying him his
day in court notwithstanding his motion praying that the
appealed case be heard. He invokes Section 9 of Rule 124 of
the Revised Rules of Court and relates it to Sections 1 and
17 of Article IV of the New Constitution. This contention is
devoid of merit. Petitioner was afforded the right to be
present during every step in the trial before the Court of
First Instance, that is, from the arraignment until the
sentence was promulgated. On appeal, he cannot assert as
a matter of right to be present and to be heard in
connection with his case. It is the procedure in respondent
court that within 30 days from receipt of the notice that the
evidence is already attached to the record, the appellant
shall file 40 copies of his brief with the clerk accompanied
by proof of service of 5 copies upon the appellee (Section 3,
Rule 124 of the Revised Rules of Court). Within 30 days
from receipt of appellant’s brief, the appellee shall file 40
copies of his brief with the clerk accompanied by proof of
service of 5 copies upon the appellant (Section 4, Rule 124
of the Revised Rules of Court). Each party may be allowed
extensions of time to file brief for good and sufficient cause.
Thereafter, the appellate court may reverse, affirm or
modify the judgment, increase or reduce the penalty
imposed, remand the case for new trial or re-trial or
dismiss the case (Section 11, Rule 124 of the Revised Rules
of Court). It is discretionary on its part whether or not to
set a case for oral argument. If it desires to hear the parties
on the issues involved, motu propio or upon petition of the
parties, it may require contending parties to be heard on
oral arguments. Stated differently, if the Court of Appeals
chooses not to hear the case, the Justices composing the
division may just deliberate on the case, evaluate the
recorded evidence on hand and then decide it. Accused-
appellant need not be present in the court during its
deliberation or even during the hearing of the appeal before
the

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Sycip vs. Court of Appeals

appellate court; it will not be heard in the manner or type

of hearing contemplated by the rules for inferior or trial
courts.
In his third and fourth assigned errors, petitioner
contends that respondent Court of Appeals erred in not
applying the provisions on compensation or setting-off
debts under Articles 1278 and 1279 of the New Civil Code,
despite evidence showing that Jose K. Lapuz still owed him
an amount of more than P5,000.00 and in not dismissing
the appeal considering that the latter is not legally the
aggrieved party. This contention is untenable.
Compensation cannot take place in this case since the
evidence shows that Jose K. Lapuz is only an agent of
Albert Smith and/or Dr. Dwight Dill. Compensation takes
place only when two persons in their own right are
creditors and debtors of each other, and that each one of
the obligors is bound principally and is at the same time a
principal creditor of the other. Moreover, as correctly
pointed out by the trial court, Lapuz did not consent to the
off-setting of his obligation with petitioner’s obligation to
pay for the 500 shares.
Anent the fifth assigned error, petitioner argues that the
appellate court erred in not ruling that the deed of sale is a
consummated contract and, therefore, not covered by the
Statute of Frauds. It must be pointed out that the issue on
whether or not the alleged contract of sale is covered by the
Statute of Frauds has not been raised in the trial court or
with the Court of Appeals. It cannot now be raised for the
first time in this petition. Thus, there is no need for
respondent court to make findings of fact on this matter.
 With respect to the sixth assigned error, petitioner
points out that the Court of Appeals erred in affirming the
decision of the trial court convicting him of the crime
charged. Petitioner mentions that in People vs. Benitez,
G.R. No. L-15923, June 30, 1960 (108 Phil. 920), We have
ruled that to secure conviction under Article 315,
paragraph 1 (b), Revised Penal Code, it is essential that the
following requirements be present: (a) existence of fraud;
(b) failure to return the goods on demand; and (c) failure to
give any reason or explanation to the foregoing. He claims
that nowhere in the decision was he found to have any
particular malice or intent to commit fraud, or, that he
failed to return the shares on any formal demand made by
Jose

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Sycip vs. Court of Appeals

K. Lapuz to him, and/or was he unable to make any

explanation thereto. On this score, We only have to quote
from the decision of the respondent court, as follows:

“The ‘malice or intent to commit fraud’ is indicated in that part of

the decision hereinbefore quoted, that is, the accused-appellant
‘received from Jose K. Lapuz the 500 shares in question (a part of
1,758 shares) for sale, and that, although the same had already
been sold, the accused x x x failed to turn over the proceeds
thereof to Jose K. Lapuz.’ The abuse of confidence in
misappropriating the funds or property after they have come to
the hands of the offender may be said to be a fraud upon the
person injured thereby (U.S. vs. Pascual, 10 Phil. 621).
x x x      x x x      x x x
“The accused-appellant having informed Jose K. Lapuz that
the ‘500 shares out of the 1000 shares x x x has been sold’ (Exhibit
‘I’), for which he issued a draft for P8,000.00 (Exhibit ‘J’), the
latter cannot be expected to make a demand for the return of the
500 shares. His demand was for the payment of the shares when
the draft was dishonored by the bank.
“The delivery of a worthless check in the amount of P5,000.00
by the accused-appellant to Jose K. Lapuz, after the latter’s
‘hunting’ for him, is even a circumstance indicating ‘intent to
commit fraud.’ (pp. 48-49, Rollo)
x x x      x x x      x x x
“His explanation of his inability to return the 500 shares of
stock is not satisfactory. x x x If it is true that he gave the 500
shares of stock to his creditor. Tony Lim, he is nonetheless liable
 for the crime of estafa, he having received the 500 shares of stock
to be sold on commission. By giving the shares to his creditor, he
thereby committed estafa by conversion.” (pp. 49-50, Rollo)

Indeed, Jose K. Lapuz demanded from petitioner the

amount of P5,000.00 with a notice that in the event he
(petitioner) would fail to pay the amount, Lapuz would file
an estafa case against him.
By and large, respondent Court of Appeals has not
overlooked facts of substance and value that, if considered,
would alter the result of the judgment.
WHEREFORE, for lack of merit the petition is hereby
DISMISSED.
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Manotok Realty, Inc. vs. Court of Appeals

SO ORDERED.

          Teehankee, (Chairman), Melencio-Herrera,

Gutierrez, Jr. and De la Fuente, JJ., concur.
     Plana and Alampay, JJ., no part.

Petition dismissed.

Notes.—In essence and in all respects, estafa, no doubt,

is a crime involving moral turpitude because the act is
unquestionably against justice, honesty, and good morals.
(In re Vinson, 19 SCRA 815.)
Where complainant is not damaged or prejudiced by the
accused’s act of retaining or setting-off what was due to
him, with a balance still owing to him, besides the
accused’s proven good faith, the criminal action for estafa
should be dismissed, (People vs. Jumawan, 31 SCRA 825.)
Payment does not extinguish criminal liability for
estafa. (Samo vs. People, 5 SCRA 354.)

——o0o——

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