!"#$! &'($!)! *+,-. / +,-01 "))23 4"2 5"6#6 !

"7)'"(6


4"89$##$ "77$ (:)'$44$;
!"#" %&" '()*)) +,-,./ )01 )220

!34%5+6+ 7" 89:8;9 :< =59 854;4884%9>

lalnLlffs: !alme Culnhawa

uefendanL: eople of Lhe hlllpplnes

onenLe: Calle[o Sr., !"

CASL: !alme Culnhawa ls engaged ln Lhe buslness of selllng brand new
vehlcles, and had a showroom dlsplaylng hls producLs. Culnhawa
purchased a brand new MlLsublshl L-300 from Manlla. Culnhawa's
drlver, Leopoldo Clayan, drove Lhe van from Manlla Lo naga. Powever,
Clayan suffered a hearL aLLack durlng Lhe Lrlp causlng Lhe damage Lo Lhe
under chassls slnce Lhe lefL fronL Llre had Lo be replaced. 1hls was
repalred and Lhe van was puL on dlsplay ln Culnhawa's showroom. 1hls
same van was laLer sold Lo Spouses Sllo who are engaged ln Lhe
buslness of buylng garmenLs ln Manlla and selllng Lhem ln naga. 1hey
saw Lhe van ln Culnhawa's showroom and lnspecLed lLs lnLerlor buL noL
Lhe under chassls. 1hey also dld noL conducL a LesL drlve, and so boughL
Lhe van wlLhouL any knowledge of Lhe damage lL had prevlously
lncurred. AzoLea, Lhe sales manager, was Lhe one who LransacLed wlLh
Lhe Spouses Sllo and furnlshed Lhe couple wlLh a Servlce Manual
conLalnlng Lhe warranLy Lerms and condlLlons. 1he day afLer Lhe van
was boughL by Lhe spouses, !osephlne Sllo (wlfe) wenL Lo Manlla wlLh
Clenda lngol and Lhe laLLer's husband (drlver). Cn Lhe way back, Lhey
heard a squeaklng sound and laLer dlscovered LhaL lL was caused by
parLs underneaLh Lhe vehlcle LhaL were welded LogeLher. Culnhawa
lnslsLed LhaL Lhe defecLs were mere facLory defecLs. As Lhe defecLs
perslsLed, Lhe spouses requesLed LhaL Culnhawa replace Lhe van wlLh 2
Charade-ualhaLsu vehlcles wlLhln a week or Lwo, wlLh Lhe addlLlonal
cosLs Lo be Laken from Lhelr downpaymenL. Powever, Lhe spouses laLer
asked for Lhe resclsslon of Lhe conLracL upon dlscoverlng LhaL Lhe van
was really noL brand new.
1he Supreme CourL ruled LhaL !alme Culnhawa ls gullLy of oLher decelLs.
1he CourL polnLed ouL LhaL Lhe crlme could be commlLLed by omlsslon.
lf, ln a conLracL of sale, Lhe vendor knowlngly allowed Lhe vendee Lo be
decelved as Lo Lhe Lhlng sold ln a maLerlal maLLer by falllng Lo dlsclose
an lnLrlnslc clrcumsLance LhaL ls vlLal Lo Lhe conLracL, knowlng LhaL Lhe
vendee ls acLlng upon Lhe presumpLlon LhaL no such facL exlsLs, decelL ls
accompllshed by Lhe suppresslon of Lhe LruLh. AzoLea knew LhaL Lhe van
had flgured ln an accldenL, was damaged and had Lo be repalred.
neverLheless, Lhe van was placed ln Lhe showroom, Lhus maklng lL
appear Lo Lhe publlc LhaL lL was a brand new unlL. 1he peLlLloner was
mandaLed Lo reveal Lhe foregolng facLs Lo Lhe prlvaLe complalnanL.

uCC18lnL: ArLlcle 1389 of Lhe new Clvll Code provldes LhaL fallure Lo
dlsclose facLs when Lhere ls a duLy Lo reveal Lhem consLlLuLes fraud.

?+@A!#:3%BC
! !alme Culnhawa was engaged ln Lhe buslness of selllng brand
new moLor vehlcles, lncludlng MlLsublshl vans, under Lhe
buslness name of Culnrox MoLor Sales. Pls offlce and dlsplay
room for cars were locaLed along anganlban Avenue, naga
ClLy. Pe employed Cll AzoLea as hls sales manager.
! March 17, 1993 ! Culnhawa purchased a brand new MlLsublshl
L-300 versa van from Lhe unlon MoLors CorporaLlon (uMC) ln
aco, Manlla.
o 1he van bore laLe no. uLk 406.
o Culnhawa's drlver, Leopoldo Clayan, drove Lhe van
from Manlla Lo naga ClLy. Powever, whlle Lhe van was
Lravellng along Lhe hlghway ln uaeL, Camarlnes norLe,
Clayan suffered a hearL aLLack. 1he van wenL ouL of
conLrol, Lraversed Lhe hlghway onLo Lhe opposlLe lane,
and was dlLched lnLo Lhe canal parallel Lo Lhe hlghway.
1he van was damaged, and Lhe lefL fronL Llre had Lo be
replaced.
o 1he van was repalred and laLer offered for sale ln
Culnhawa's showroom.
!"#$! &'($!)! *+,-. / +,-01 "))23 4"2 5"6#6 !"7)'"(6


4"89$##$ "77$ (:)'$44$;
! CcLober 1993 ! Spouses 8alph and !osephlne Sllo wanLed Lo
buy a new van for Lhelr garmenL buslness, Lhey purchased lLems
ln Manlla and sold Lhem ln naga ClLy.
o 1hey wenL Lo Culnhawa's offlce, and were shown Lhe L-
300 versa van whlch was on dlsplay. 1he couple
lnspecLed lLs lnLerlor porLlon and found lL beauLlful.
1hey no longer lnspecLed Lhe under chassls slnce Lhey
presumed LhaL Lhe vehlcle was brand new. unaware
LhaL Lhe van had been damaged and repalred on
accounL of Lhe accldenL ln uaeL, Lhe couple declded Lo
purchase Lhe van for 391k.
! AzoLea, sales manager, suggesLed LhaL Lhe couple make a
downpaymenL of 118,200, and pay Lhe balance of Lhe
purchase prlce by lnsLallmenLs vla a loan from Lhe unlLed
CoconuL lanLers 8ank (uC8), wlLh Lhe van as collaLeral.
o AzoLea offered Lo make Lhe necessary arrangemenLs
wlLh uC8 for Lhe consummaLlon of Lhe loan
LransacLlon whereln Lhe couple agreed.
o 1he spouses execuLed a romlssory noLe for Lhe
amounL of 692,676 as paymenL of Lhe balance on Lhe
purchase prlce, and as evldence of Lhe chaLLel morLgage
over Lhe van ln favor of uC8.
! CcLober 11, 1993 ! 1he couple arrlved ln Culnhawa's offlce Lo
Lake dellvery of Lhe van. 1he laLLer execuLed Lhe deed of sale,
and Lhe couple pald Lhe 161,470 downpaymenL, for Lhey were
lssued a recelpL. 1hey were furnlshed a Servlce Manual whlch
conLalned Lhe warranLy Lerms and condlLlons.
o AzoLea lnsLrucLed Lhe couple on how Lo sLarL Lhe van
and Lo operaLe lLs radlo. 8alph Sllo no longer conducLed
a LesL drlve, he and hls wlfe assumed LhaL Lhere were no
defecLs ln Lhe van as lL was brand new.
! CcLober 12, 1993 ! !osephlne Sllo, accompanled by Clenda
lngol, wenL Lo Manlla on board Lhe van, wlLh Clenda's husband
as Lhe drlver. Cn Lhelr reLurn Lrlp Lo naga from Manlla, Lhe
drlver heard a squeaklng sound, whlch seemed Lo be comlng
from underneaLh Lhe van. 1he squeaklng sound perslsLed and
upon examlnaLlon aL Lhe Shell gasollne sLaLlon, lL was found ouL
LhaL some parLs underneaLh Lhe van had been welded.
! Culnhawa lnslsLed LhaL Lhe defecLs were mere facLory defecLs.
As Lhe defecLs perslsLed, Lhe spouses requesLed LhaL Culnhawa
replace Lhe van wlLh 2 Charade-ualhaLsu vehlcles wlLhln a week
or Lwo, wlLh Lhe addlLlonal cosLs Lo be Laken from Lhelr
downpaymenL.
! 1he spouses broughL Lhe car Lo 8x AuLo Cllnlc for examlnaLlon
whereln Lhe mechanlc dlscovered LhaL lL was Lhe lefL fronL
sLablllzer LhaL was produclng Lhe annoylng sound, and LhaL lL
had been repalred.
! !osephlne Sllo flled for resclsslon of Lhe sale and refund of Lhelr
money.
! 1hey lnsLlLuLed also a crlmlnal complalnL for oLher decelLs made
by Culnhawa by maklng fraudulenL represenLaLlons abouL Lhe
car belng brand new and LhaL lL never encounLered an accldenL.

4>>39> =: ?9 #9>:;D9BC
1. WheLher, under Lhe lnformaLlon, Lhe peLlLloner was charged of
oLher decelLs under paragraph 1, ArLlcle 318 of Lhe 8evlsed
enal Code
1


#9>:;3=4:%> +%B +#!3E9%=>
4>>39 ' ! WheLher, under Lhe lnformaLlon, Lhe peLlLloner was charged
of oLher decelLs under paragraph 1, ArLlcle 318 of Lhe 8evlsed enal
Code ! ?LS. 1he false or fraudulenL represenLaLlon by a seller LhaL
whaL he offers for sale ls brand new (when, ln facL, lL ls noL) ls one of

-
lor one Lo be llable for oLher decelLs" under Lhe law, lL ls requlred LhaL Lhe prosecuLlon musL
prove Lhe followlng essenLlal elemenLs:
(a) lalse preLense, fraudulenL acL or preLense oLher Lhan Lhose ln Lhe precedlng arLlcles,
(b) Such false preLense, fraudulenL acL or preLense musL be made or execuLed prlor Lo or
slmulLaneously wlLh Lhe commlsslon of Lhe fraud, and
(c) As a resulL, Lhe offended parLy suffered damage or pre[udlce.
lL ls essenLlal LhaL such false sLaLemenL or fraudulenL represenLaLlon consLlLuLes Lhe very cause or
Lhe only moLlve for Lhe prlvaLe complalnanL Lo parL wlLh her properLy.
!"#$! &'($!)! *+,-. / +,-01 "))23 4"2 5"6#6 !"7)'"(6


4"89$##$ "77$ (:)'$44$;
Lhose decelLful acLs envlsaged ln paragraph 1, ArLlcle 318 of Lhe 8evlsed
enal Code.

EFG&H 8&IJ/ 'C 1he fraud or decelL ln Lhls case was commlLLed by
omlsslon. ArLlcle 1389 of Lhe new Clvll Code provldes LhaL fallure Lo
dlsclose facLs when Lhere ls a duLy Lo reveal Lhem consLlLuLes fraud.
lL ls Lrue LhaL mere sllence ls noL ln lLself concealmenL.
ConcealmenL whlch Lhe law denounces as fraudulenL lmplles a
purpose or deslgn Lo hlde facLs whlch Lhe oLher parLy soughL Lo
know. lallure Lo reveal a facL whlch Lhe seller ls, ln good falLh,
bound Lo dlsclose may generally be classlfled as a decepLlve acL
due Lo lLs lnherenL capaclLy Lo decelve.
lf, ln a conLracL of sale, Lhe vendor knowlngly allowed Lhe
vendee Lo be decelved as Lo Lhe Lhlng sold ln a maLerlal maLLer
by falllng Lo dlsclose an lnLrlnslc clrcumsLance LhaL ls vlLal Lo Lhe
conLracL, knowlng LhaL Lhe vendee ls acLlng upon Lhe
presumpLlon LhaL no such facL exlsLs, decelL ls accompllshed by
Lhe suppresslon of Lhe LruLh.
AzoLea knew LhaL Lhe van had flgured ln an accldenL, was
damaged and had Lo be repalred. neverLheless, Lhe van was
placed ln Lhe showroom, Lhus maklng lL appear Lo Lhe publlc
LhaL lL was a brand new unlL. 1he peLlLloner was mandaLed Lo
reveal Lhe foregolng facLs Lo Lhe prlvaLe complalnanL.
o 8uL Lhe peLlLloner and AzoLea even obduraLely declared
when Lhey LesLlfled ln Lhe courL a quo LhaL Lhe vehlcle
dld noL flgure ln an accldenL, nor had lL been repalred,
Lhey malnLalned LhaL Lhe van was brand new, knowlng
LhaL Lhe prlvaLe complalnanL was golng Lo use lL for her
garmenL buslness. 1hus, Lhe prlvaLe complalnanL
boughL Lhe van, bellevlng lL was brand new.
o SlgnlflcanLly, even when Lhe peLlLloner was apprlsed
LhaL Lhe prlvaLe complalnanL had dlscovered Lhe van's
defecLs, Lhe peLlLloner agreed Lo replace Lhe van, buL
changed hls mlnd and lnslsLed LhaL lL musL be flrsL sold.
o 1hls represenLaLlon was accenLuaLed by Lhe facL LhaL
Lhe peLlLloner gave Lhe Servlce Manual Lo Lhe prlvaLe
complalnanL, whlch manual conLalned Lhe warranLy
Lerms and condlLlons, slgnlfylng LhaL Lhe van was
brand new." 8ellevlng Lhls good falLh, Lhe prlvaLe
complalnanL declded Lo purchase Lhe van for her buy-
and-sell and garmenL buslness, and even made a
downpaymenL of Lhe purchase prlce.

EFG&H 8&IJ/ )C eLlLloner ls noL relleved of crlmlnal llablllLy even lf Lhe
Spouses Sllo conducLed a physlcal lnspecLlon of Lhe van.
lL bears sLresslng LhaL AzoLea and Lhe peLlLloner had every
opporLunlLy Lo reveal Lo Lhe prlvaLe complalnanL LhaL Lhe van
was defecLlve. 1hey resolved Lo malnLaln Lhelr sllence, Lo Lhe
pre[udlce of Lhe prlvaLe complalnanL, who was a garmenL
merchanL and who had no speclal knowledge of parLs of moLor
vehlcles. 8ased on Lhe surroundlng clrcumsLances, she relled on
her bellef LhaL Lhe van was brand new. ln flne, she was Lhe
lnnocenL vlcLlm of Lhe peLlLloner's fraudulenL nondlsclosure or
concealmenL.

EFG&H 8&IJ/ KC 1he peLlLloner cannoL pln crlmlnal llablllLy for hls
fraudulenL omlsslon on hls general manager, AzoLea.
1he Lwo are equally llable for Lhelr collecLlve fraudulenL sllence.
Case law has lL LhaL wherever Lhe dolng of a cerLaln acL or Lhe
LransacLlon of a glven affalr, or Lhe performance of cerLaln
buslness ls conflded Lo an agenL, Lhe auLhorlLy Lo so acL wlll, ln
accordance wlLh a general rule ofLen referred Lo, carry wlLh lL by
lmpllcaLlon Lhe auLhorlLy Lo do all of Lhe collaLeral acLs whlch
are Lhe naLural and ordlnary lncldenLs of Lhe maln acL or
buslness auLhorlzed.

<4%+; D9#B4@=C eLlLloner ls found gullLy for esLafa.

%: >98+#+=9 :84%4:%>