FACTS:

The case involves a Petition for Review on Certiorari seeking to set aside the decision of the Court of Appeals affirming with modifications petitioner Manuel S. Isip's conviction for Estafa. The petitioner was charged with Estafa for misappropriating a seven-carat diamond ring entrusted to him for sale on commission. His wife, Marietta M. Isip, was indicted for seven counts of Violation of Batas Pambansa Blg. 22 (Bouncing Checks Law) for issuing insufficiently funded checks for the purchase of assorted pieces of jewelry. The spouses were also charged with five counts of Estafa for misappropriating and misapplying jewelry received from the same complainant. The cases were all tried jointly, and the prosecution and defense presented their respective versions of events. Both spouses pleaded not guilty to the charges.

The appellant spouses, Manuel and Marietta Isip, were introduced to complainant Atty. Leonardo Jose in 1982 by the complainant's father, Nemesio, who was a business associate of the Isips. Nemesio and the Isips were engaged in buying and selling pledged and unredeemed jewelry pawned by gambling habitués. The Isips convinced complainant to be their capitalist and he agreed. The operation went smoothly until February 1984.

On February 3, 1984, at complainant's residence in Caridad, Cavite City, the Isips received a 6 carat men's ring valued at P200,000.00 from the complainant. The condition was that they would sell the ring on commission and if they couldn't sell it, they were to return it on or before March 3, 1984.

On March 3, 1984, the Isips did not return the ring or the proceeds. Instead, Marietta Isip issued two personal checks dated March 17 and 30, 1984, respectively, for P50,000.00 each as partial payment for the jewelry.

On March 7, 1984, the Isips went to complainant's residence and received a Choker Pearl with 35 pieces of south sea pearls with diamond worth P150,000.00. The condition was that the proceeds be turned over to complainant on or before March 30, 1984. Instead of turning over the proceeds or returning the jewelry, Mrs. Isip issued a check dated March 12, 1984, for P150,000.00 as payment.

On the same day, Mr. Manuel Isip went to complainant's residence and received a men's ring (7 carats) worth P200,000.00. The condition was that he return the ring or deliver the proceeds on or before March 15, 1984. He defaulted on the agreed date.

On March 20, 1984, the Isips went again to complainant's residence and received a Dome shaped ring with matching earring with diamonds valued at P120,000.00. The agreement was for them to return the item or deliver the proceeds on March 21, 1984. However, the next morning, Mrs. Isip issued two personal checks dated March 29, 1984, for P90,000.00 and P25,000.00, respectively, in payment for the Dome shaped ring.

On the same day, at noon, the Isip couple went back to the residence of the complainant and received a collar heart shaped necklace and a baguette necklace worth P95,000.00. The agreement was for them to deliver the jewelry or the proceeds on March 27, 1984. Instead, Mrs. Isip issued a check dated March 27, 1984, in the amount of P90,000.00.

On the same day, in the early evening, the Isips informed the complainant that Balikbayan doctors were having a convention in Vigan, Ilocos Sur and said it was the most opportune time to sell jewelry. Assorted pieces of jewelry were delivered to Mrs. Isip with a promise that the jewelry or proceeds would be delivered on March 27, 1984. However, Mrs. Isip issued a postdated check dated March 27, 1984, in the amount of P562,000.00 as payment for the assorted pieces of jewelry.

All of the checks deposited on April 6, 1984, bounced for insufficient funds. Demand letters sent to the couple proved futile.

Manuel Isip was acquitted of most of the estafa charges filed against him, while Marietta Isip was found guilty of violating B.P. 22 and estafa in some of the cases filed against her. Initially, the cases were filed before the Cavite Regional Trial Court, even though all the transactions were entered into in Manila.

ISSUES:

1. Whether the trial court had jurisdiction over the cases against the appellants considering that none of the essential ingredients of the offenses charged were committed within its territorial jurisdiction.

2. Whether the trial court erred in finding appellants guilty beyond reasonable doubt of the crimes of estafa and violation of Batas Pambansa Blg. 22.

3. Whether or not the trial court had jurisdiction over the offense imputed to petitioner and for which he was convicted.

4. Whether the evidence sufficiently shows that petitioner received the subject of said offense or that he received it in Cavite City.

5. Whether the incipient criminal liability arising from said offense, if any, was extinguished by novation.

6. Whether there was a delivery of the ring and a valid contract between the petitioner and the complainant.

7. Whether the doctrine of novation can be applied to extinguish the criminal liability of the petitioner.

8. Whether the elements of estafa with abuse of confidence are present in the case.

RULING:

1. The Court of Appeals affirmed the decision of the trial court, finding that the trial court had jurisdiction over the cases against the appellants. The transactions involved in the cases were sufficiently shown to have taken place at complainant's ancestral house in Cavite City, and the defense failed to prove that the transactions happened in Manila.

2. The Court of Appeals affirmed the trial court's finding of guilt beyond reasonable doubt of appellant Manuel S. Isip for the crime of estafa in one of the cases but modified the sentence imposed. The Court of Appeals did not rule on the appellant Marietta M. Isip's acquittal in the other cases.

3. The court held that the trial court had jurisdiction over the estafa charge in Criminal Case No. 136-84. The residence of the parties is immaterial, and it is the situs of the transaction that counts. The court found that the transactions took place in Cavite City, which falls within the territorial jurisdiction of the court.

4. The court found that there is sufficient evidence showing that petitioner received the subject of the offense charged in Criminal Case No. 136-84. Petitioner's claims that he did not receive the jewelry and that the receipt he issued was forced upon him were not persuasive.

5. The court held that novation does not extinguish criminal liability but may prevent its rise as long as it occurs prior to the filing of the criminal information. In this case, novation occurred when the complainant accepted the checks issued by petitioner's wife as payment for the jewelry. Therefore, the incipient criminal liability was extinguished, and petitioner and his wife were acquitted of the crimes charged.

6. Additionally, the Court of Appeals' finding that the petitioner received the ring subject of Criminal Case No. 136-84 is supported by the evidence on record. The acknowledgment receipt executed by the petitioner is clear evidence of his receipt of the ring. The petitioner's claim that he did not receive any ring and merely executed the receipt to preserve his friendship with the complainant is not credible.

7. The Court held that there was a delivery of the ring and a valid contract between the petitioner and the complainant, as evidenced by the acknowledgment receipt signed by the petitioner and the testimony of his wife.

8. The Court agreed with the Court of Appeals that the doctrine of novation cannot be applied in this case. The Court found that the properties delivered by the petitioner to the complainant were not sufficient to cover all the obligations incurred and that not all the elements of novation were present.

9. The Court found that the elements of estafa with abuse of confidence were present in the case. The petitioner received the ring on commission basis and misappropriated it for his own benefit, causing damage and prejudice to the complainant.

PRINCIPLES:

• The trial court has jurisdiction over a case if the essential ingredients of the offenses charged were committed within its territorial jurisdiction.

• The issuance of checks that are dishonored under Batas Pambansa Blg. 22 may result in criminal liability.

• Criminal liability for estafa may be extinguished by payments/redemptions made and/or novation entered into between the offender and the complainant.

• Guilt beyond reasonable doubt must be established to convict an accused of a crime.

• Territorial jurisdiction is determined by the situs of the transaction, not the residence of the parties.

• Novation does not extinguish criminal liability but may prevent its rise if it occurs prior to the filing of the criminal information.

• The concept of venue in criminal cases is jurisdictional, and the place where the crime was committed determines not only the venue of the action but is an essential element of jurisdiction. Jurisdiction in criminal cases is determined by the territorial jurisdiction of the court where the offense was committed or any of its essential ingredients took place.

• Jurisdiction in a criminal case is determined by the allegations in the complaint or information, and if the evidence presented during the trial shows that the offense was committed elsewhere, the court should dismiss the action for want of jurisdiction.

• Credibility of witnesses is typically assessed by the trial court, as it has the full opportunity to observe the witnesses' deportment and manner of testifying. Unless the findings of fact by the trial court are tainted with arbitrariness or oversight, they are generally conclusive and binding, especially when affirmed by the appellate court.

• When a person voluntarily signs a document, it is presumed that he intends the ordinary consequences of his act and he takes ordinary care of his concerns. Private transactions are presumed to have been fair and regular, and the ordinary course of business is presumed to have been followed.

• The presumption of regularity of business transactions can be overcome only by clear and convincing evidence to the contrary.

• To establish novation, the following requisites must be present: (1) a previous valid obligation; (2) an agreement of all parties concerned to a new contract; (3) the extinguishment of the old obligation; and (4) the birth of a valid new obligation.

• The elements of estafa with abuse of confidence are: (1) the offender receives the money, goods, or other personal property in trust, or on commission, or for administration, or under any other obligation involving the duty to deliver, or to return, the same; (2) the offender misappropriates or converts such money or property or denies receiving such money or property; (3) the misappropriation or conversion or denial is to the prejudice of another; and (4) the offended party demands that the offender return the money or property.