FACTS:

Mariano Lim was charged with violating the Anti-Fencing Law of 1979 for allegedly buying and receiving a stolen Komatsu Road Grader. The prosecution presented two witnesses, Engr. Herminio Gulmatico and SPO4 Alfredo T. Santillana, who testified that they received information that the stolen heavy equipment could be found at Basco Metal Supply, which was owned by Lim. A search warrant was obtained and the heavy equipment was found at Basco Metal Supply. Lim testified as the sole witness for the defense, claiming that he bought the heavy equipment from Petronilo Banosing and checked with the DPWH in Manila, where he found out that the equipment was not included in their inventory. The Regional Trial Court (RTC) found Lim guilty of violating the Anti-Fencing Law and sentenced him to imprisonment and restitution to the DPWH. Lim appealed to the Court of Appeals (CA) but his appeal was denied. He then filed a petition for review with the Supreme Court. The main issue in the case is whether the elements of the crime of fencing were proven by the prosecution.

ISSUES:

1. Whether all the elements of fencing have been proven by the prosecution.

2. Whether the prosecution sufficiently proved the ownership of the stolen grader by the Department of Public Works and Highways (DPWH).

3. Whether the prosecution was able to establish the first element of fencing.

4. Whether the prosecution was able to conclusively establish that the grader had been stolen.

5. Whether Engr. Gulmatico's testimony, which relied on hearsay evidence, should be given any weight.

6. Whether the trial court erred in giving probative value to the testimony of Engr. Gulmatico, which was based on hearsay statements.

7. Whether petitioner was able to rebut the presumption of fencing under PD 1612.

8. Whether the notarized Affidavit of Ownership presented by petitioner is conclusive proof of ownership.

9. Whether the petitioner is required to secure a clearance/permit from the police under Section 6 of PD 1612.

10. Whether the petitioner can be considered as engaged in the business of buying and selling.

11. Whether the conviction of the petitioner violated his constitutional right to be informed of the nature and cause of the accusation against him.

12. Whether the prosecution was able to prove beyond reasonable doubt the first and third essential elements of the crime of fencing.

13. The issue in this case is whether or not the Court of Appeals erred in affirming the conviction of the accused for the crime of illegal possession of drugs.

RULING:

1. The prosecution failed to establish that theft had been committed, thus not all the elements of fencing have been proven.

2. The prosecution did not sufficiently prove the ownership of the stolen grader by the DPWH.

3. No, the prosecution failed to establish the first element of fencing as it did not present sufficient proof of ownership of the grader.

4. No, the prosecution failed to conclusively establish that the grader had been stolen as Engr. Gulmatico's testimony relied mostly on hearsay evidence and he had no personal knowledge of the actual theft.

5. Engr. Gulmatico's testimony, which relied on hearsay evidence, should not be given any weight as it is inadmissible and has no probative value.

6. The trial court erred in giving probative value to the testimony of Engr. Gulmatico, which was based on hearsay statements.

7. Petitioner was able to rebut the presumption of fencing under PD 1612 by presenting the notarized Affidavit of Ownership, which enjoys a presumption of regularity.

8. The notarized Affidavit of Ownership presented by petitioner is conclusive proof of ownership, as it is a public document that enjoys the presumption of regularity.

9. The requirement for the petitioner to secure a clearance/permit from the police under Section 6 of PD 1612 is inapplicable to the present case. The court found that the first and third requisites under the provision were not met, as there was no evidence showing that the petitioner was engaged in the business of buying and selling, nor was there evidence that the subject grader was intended to be sold to the public.

10. The presumption made by the Court of Appeals that the petitioner was engaged in the business of buying and selling was erroneous. The court found that there was no evidence supporting such conclusion. The fact that the subject grader was found in several pieces and different locations within the petitioner's compound further supported the finding that it was not intended to be sold to the public.

11. Yes, the conviction of the petitioner violated his constitutional right to be informed of the nature and cause of the accusation against him. The information charged the petitioner with purchasing and receiving a stolen grader with knowledge that it was stolen, but the trial court convicted him on the ground that he should have known that the grader was derived from the proceeds of theft. The variance between the allegation in the information and the proof adduced during trial was fatal to the case since it was material and prejudicial to the accused.

12. No, the prosecution failed to prove beyond reasonable doubt the first and third essential elements of the crime of fencing. The prosecution did not establish that the petitioner had knowledge that the grader was derived from the proceeds of theft, as required by the law. The seller's Certificate of Ownership and the unauthenticated list of equipment presented by the petitioner were insufficient to prove his knowledge of the alleged theft. Therefore, the petitioner should be acquitted based on insufficiency of evidence and reasonable doubt.

13. The Supreme Court upheld the conviction of the accused for the crime of illegal possession of drugs as affirmed by the Court of Appeals.

PRINCIPLES:

• The essential elements of the crime of fencing are: (1) a crime of robbery or theft has been committed; (2) the accused buys, receives, possesses, keeps, acquires, conceals, sells or disposes of an item derived from the proceeds of the crime; (3) the accused knows or should have known that the item has been derived from the proceeds of the crime; and (4) there is intent to gain on the part of the accused.

• Conviction of the principal in the crime of theft is not necessary for an accused to be found guilty of the crime of fencing.

• It is the prosecution's burden to prove the elements of the crime beyond reasonable doubt.

• Ownership over the stolen item must be proven by the prosecution in order for the accused to be convicted of the crime of fencing.

• The DPWH, being the government agency in charge of construction projects, is expected to have a database of all equipment and materials it uses for easy reference of its employees.

• Hearsay evidence is inadmissible unless it falls within any of the exceptions to the hearsay rule as provided in the Rules of Court.

• Hearsay statements are not admissible as evidence as the truth and credibility of such statements cannot be ascertained. (Issue 1)

• In cases of fencing, the burden is on the accused to rebut the presumption under PD 1612. (Issue 2)

• A notarized document enjoys a presumption of regularity and is prima facie evidence of the truth of the facts stated therein. It is admissible without further proof of its due execution and has the presumption of regularity in its favor. (Issue 3)

• Clearances/permits are required under Section 6 of PD 1612 for persons engaged in the business of buying and selling items obtained from unlicensed dealers or suppliers, before offering the same for sale to the public.

• The requirements under Section 6 of PD 1612 must be met for the provision to be applicable.

• Presumptions should be based on evidence presented and cannot be made without proper basis.

• Every element constituting the offense must be alleged in the information to enable the accused to suitably prepare his defense. The right to question a conviction based on facts not alleged in the information cannot be waived.

• A variance between the allegation in the information and proof adduced during trial shall be fatal to the criminal case if it is material and prejudicial to the accused.

• The burden of proof is on the prosecution to establish the guilt of the accused beyond reasonable doubt. The prosecution must prove each and every element of the crime charged in the information.

• The information must correctly reflect the charges against the accused before any conviction may be made.

• The Supreme Court has the jurisdiction to review judgments and final orders of the Court of Appeals in cases where the penalty imposed is reclusion perpetua or life imprisonment.

• In cases involving illegal possession of drugs, it is essential for the prosecution to prove the following elements: (a) the accused was in possession of an item which is identified as a prohibited drug; (b) said possession was not authorized by law; and (c) the accused freely and consciously possessed the said drug.