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CRESENCIO C. MILLA v. PEOPLE

FACTS:

Petitioner Cresencio C. Milla presented himself as a real estate developer and offered to sell a property in Makati to private respondent Market Pursuits, Inc. (MPI). MPI verified the property's ownership through the Registry of Deeds and purchased it for P2 million. Milla gave MPI a notarized Deed of Absolute Sale and an original Owner's Duplicate Copy of the Transfer Certificate of Title (TCT) No. 216445. Milla also provided MPI with a new Certificate of Title, TCT No. 218777, registered in the name of MPI. Milla issued checks to MPI, however, it was later discovered that the TCT given by Milla was not registered and the property was not transferred to MPI. MPI demanded the return of the purchase amount from Milla, who ignored the demand. Lopez, MPI's financial officer, filed a complaint against Milla for estafa through falsification of public documents. Milla was subsequently charged and found guilty, with the trial court sentencing him to prision correccional and reclusion temporal for each count, and ordering him to pay MPI two million pesos plus legal interest and attorney's fees. The Court of Appeals affirmed the trial court's decision, and Milla filed a petition for review, raising various issues. The Office of the Solicitor General argued that Milla was given due process, the elements of the crime were proven, novation does not extinguish criminal liability, and Milla was authorized to file the action. The Court denied the petition, upholding the findings of the trial court and the Court of Appeals.

ISSUES:

  1. Whether the negligence of counsel deprived Milla of due process of law.

  2. Whether the principle of novation can exculpate Milla from criminal liability.

  3. Whether the factual findings of the trial court, as affirmed by the appellate court, should be reviewed on appeal.

  4. Whether there was implied novation in this case.

  5. Whether the changes made by the petitioner constitute incompatibility between the old and new obligations.

  6. Whether or not the accused is guilty of estafa through falsification of public documents.

RULING:

  1. The Petition is denied.

  2. Milla was not deprived of due process. The mistake and negligence of his former counsel did not amount to gross or palpable negligence that would warrant relief. Milla was given opportunities to defend his case and was granted concomitant reliefs, thus, due process was not violated.

  3. The principle of novation cannot be applied to the case. Mere payment of an obligation before the institution of a criminal complaint does not constitute novation that may prevent criminal liability. Novation is not a ground for extinction of criminal liability for estafa. Furthermore, the acceptance of partial payments does not produce novation, and it cannot nullify a fully matured criminal liability.

  4. The factual findings of the trial court, as affirmed by the appellate court, should not be reviewed on appeal.

  5. There was no implied novation in this case. The changes made by the petitioner in the manner of payment did not amount to novation because there was no substitution of debtors and the private complainant did not give her consent to enter into a new contract.

  6. The changes made by the petitioner in the manner of payment did not create an irreconcilable incompatibility between the old and new obligations. The changes were merely modificatory in nature and insufficient to extinguish the original obligation.

  7. The accused is guilty beyond reasonable doubt of estafa through falsification of public documents.

PRINCIPLES:

  • The mistake of a counsel binds the client, but relief may be granted if the negligence is gross or palpable.

  • Mere payment of an obligation before the institution of a criminal complaint does not constitute novation that may prevent criminal liability.

  • Novation is never presumed and must appear by express agreement of the parties or their acts that are too clear and unequivocal to be mistaken.

  • The extinguishment of the old obligation by the new one is a necessary element of novation, which may be effected either expressly or impliedly.

  • Novation may either be explicit or implied. It occurs when there is a substitution of an existing obligation with a new one, which extinguishes the original obligation.

  • To determine whether there is novation, the old and new obligations must be incompatible on every point and cannot stand together, with each having its independent existence.

  • Changes that breed incompatibility must be essential in nature and not merely accidental.

  • The test of incompatibility is whether the two obligations can stand together, considering their essential elements such as object, cause, or principal conditions.

  • The crime of estafa is committed through misappropriation or conversion of money or property received to the prejudice of the owner.

  • The liability for estafa is not affected by subsequent novation of the contract.

  • Factual findings of the trial court, especially when affirmed by the appellate court, are binding and accorded great respect by the Supreme Court.

  • Estafa through falsification of public documents is committed when a person, by using a fictitious name or by falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, defrauds another through any of the means enumerated in Article 315, paragraph 2(a) of the Revised Penal Code.

  • Reliance on the authority of the person committing the fraud, as well as the existence of a falsified document, are crucial elements in estafa through falsification of public documents.

  • If the accused is proven to have misrepresented himself to have the authority to sell a property, and this misrepresentation prompts the complainant to purchase the property, resulting in the complainant losing money, the accused may be convicted of estafa through falsification of public documents.