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Galvez v.

Court of Appeals
691 SCRA 455 (2013)

Brief Facts:
Accused in this case are directors/officers of RMSI, possessing substantial
capital and a congressional telecom franchise. Accused thereafter, created the
Smart Philippines (Smartnet) division of RMSI. In the meantime same accused also
formed a subsidiary corporation named, Smartnet Philippines Inc. (SPI), with very
minimal capital.
Smartnet applied for a Letter of Credit with Asia United Bank (AUB), which
was subsequently granted since AUB was satisfied of its credit worthiness. In the
meantime, SPI also applied for a letter of credit, making it appear to AUB that
smartnet and SPI are one and the same entity, which the latter granted.
SPI thereafter refused to make good with its obligation to pay. AUB then went
after Smartnet to collect however the latter refused contending that SPI and
Smartnet are different entities.
Ruling:
Accused were convicted of estafa, having made AUB believe that Smartnet
and SPI are the same entity and resulting with the former parting with its property.
Lest it be misunderstood, we reiterate that this Courts finding of probable cause is
grounded on fraud committed through deceit which surrounded Gilbert Guy, et
al.transaction with AUB, thus, violating Article 315 (2) (a) of the Revised Penal Code;
it is neither their act of borrowing money and not paying them, nor their denial
thereof, but their very act of deceiving AUB in order for the latter to part with its
money. As early as the Penal Code of Spain, which was enforced in the Philippines
as early as 1887 until it was replaced by the Revised Penal Code in 1932, the act of
fraud through false pretenses or similar deceit was already being punished. Article
335 of the Penal Code of Spain punished a person who defrauded another by falsely
pretending to possess any power, influence, qualification, property, credit, agency
or business, or by means of similar deceit.
We emphasize that fraud in its general sense, is deemed to comprise anything
calculated to deceive, including all acts, omissions, and concealment involving a
breach of legal duty or equitable duty, trust, or confidence justly reposed, resulting
in damage to another, or by which an undue and unconscientious advantage is
taken of another. It is a generic term embracing all multifarious means which
human ingenuity can device and which are resorted to by one individual to secure
an advantage over another by false suggestions or by suppression of truth and

includes all surprise, trick, cunning, dissembling and any unfair way by which
another is cheated.

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