In Ireneo Cahulogan v. People of the Philippines, the Supreme Court affirmed the conviction of Ireneo Cahulogan for the crime of fencing, as defined and penalized under Presidential Decree No. 1612, also known as the Anti-Fencing Law. The Court reiterated that possession of stolen goods constitutes prima facie evidence of fencing, which the accused failed to rebut. This decision underscores the importance of due diligence in commercial transactions and serves as a reminder that ignorance of the law is not an excuse, especially when circumstances should have prompted a reasonable person to investigate the legitimacy of a transaction.

When a Discount Turns into a Crime: The Perils of Buying Stolen Goods

The case began with a simple instruction. Johnson Tan, a businessman, directed his employees, Braulio Lopez and Loreto Lariosa, to deliver 210 cases of Coca-Cola products to Demins Store. Instead, Lopez and Lariosa delivered the goods to Ireneo Cahulogan’s store without authorization. Tan confronted Cahulogan, seeking to retrieve his merchandise, but Cahulogan refused, claiming he had purchased the items from Lariosa for P50,000.00. This refusal, coupled with the suspicious circumstances of the sale, led to Cahulogan’s prosecution and subsequent conviction for fencing.

Fencing, as defined in Section 2 of PD 1612, is:

the act of any person who, with intent to gain for himself or for another, shall buy, receive, possess, keep, acquire, conceal, sell or dispose of, or shall buy and sell, or in any other manner deal in any article, item, object or anything of value which he knows, or should be known to him, to have been derived from the proceeds of the crime of robbery or theft.

The law aims to penalize those who profit from the proceeds of robbery or theft, acting as a deterrent to such crimes. The essential elements of fencing are:
(a) a crime of robbery or theft has been committed; (b) the accused, who is not a principal or an accomplice in the commission of the crime of robbery or theft, buys, receives, possesses, keeps, acquires, conceals, sells or disposes, or buys and sells, or in any manner deals in any article, item, object or anything of value, which has been derived from the proceeds of the crime of robbery or theft; (c) the accused knew or should have known that the said article, item, object or anything of value has been derived from the proceeds of the crime of robbery or theft; and (d) there is, on the part of one accused, intent to gain for oneself or for another.

In this case, all the elements were met. Lariosa’s unauthorized sale of the Coca-Cola products constituted theft. Cahulogan, by buying and possessing the items, dealt in goods derived from that crime. Crucially, the Court found that Cahulogan should have known the goods were illegally sourced, given the circumstances of the transaction. Finally, his intent to gain was evident in purchasing the items at a price lower than their actual value.

The legal framework surrounding fencing also includes a significant provision regarding presumption. Section 5 of PD 1612 states:

Mere possession of any good, article, item, object, or anything of value which has been the subject of robbery or thievery shall be prima facie evidence of fencing.

This presumption places the burden on the possessor to prove that they acquired the goods legally and without knowledge of their illicit origin. Cahulogan failed to overcome this presumption, as he presented no evidence to demonstrate his legitimate acquisition of the Coca-Cola products.

The Court emphasized that the circumstances of the transaction should have alerted Cahulogan to the illegal nature of the goods. Lariosa sold the items without proper documentation and did not request the usual exchange of empty bottles, a common practice in the soft drink industry. These red flags, combined with the discounted price, should have prompted a reasonable person to inquire about the legitimacy of the sale. Instead, Cahulogan proceeded with the transaction, thereby assuming the risk and consequences of dealing in stolen goods.

Furthermore, the Supreme Court addressed an important point regarding the penalties for fencing in light of Republic Act No. 10951. While PD 1612 was enacted to impose heavier penalties on those profiting from robbery and theft, its penalties are similar to those for theft and are largely dependent on the value of the stolen properties. R.A. No. 10951 adjusted the property value thresholds for theft penalties but did not amend PD 1612, which could lead to situations where a fence receives a harsher penalty than the original thief. Recognizing this incongruence, the Court urged Congress to review and adjust the penalties for fencing to ensure a more equitable application of the law.

FAQs

What is the crime of fencing?	Fencing is the act of buying, receiving, possessing, or dealing in any item derived from robbery or theft, with knowledge that it came from such illegal activity. It is defined and penalized under Presidential Decree No. 1612.
What are the elements of fencing?	The essential elements are: a crime of robbery or theft occurred; the accused is not the principal or accomplice; the accused buys, receives, possesses, or deals in the stolen item; the accused knew or should have known it was stolen; and intent to gain.
What is the significance of ‘prima facie evidence’ in fencing cases?	Prima facie evidence means that mere possession of stolen goods creates a presumption that the possessor is a fence. The burden then shifts to the possessor to prove they acquired the goods legally and without knowledge of their illegal origin.
What factors indicate that someone ‘should have known’ goods were stolen?	Factors include: the time and place of sale, the seller not being regularly engaged in selling such goods, lack of documentation, unusually low price, and any other circumstances that would raise suspicion in a reasonable person.
What is the penalty for fencing under PD 1612?	The penalty depends on the value of the stolen property. It ranges from prision correccional to reclusion temporal, with potential increases based on higher property values.
How does Republic Act No. 10951 affect fencing penalties?	R.A. No. 10951 adjusted the value of property for theft penalties but did not amend PD 1612. This can result in a fence receiving a harsher penalty than the thief, which the Supreme Court has acknowledged as an incongruence.
Can someone be convicted of fencing even if the thief is not convicted?	Yes, a conviction of the principal in the crime of theft is not necessary for an accused to be found guilty of the crime of Fencing.
What did the Supreme Court recommend regarding fencing penalties?	The Court recommended that Congress review and adjust the penalties for fencing to align them more equitably with the penalties for theft, considering the adjustments made by R.A. No. 10951.

The Cahulogan case serves as a stark reminder of the legal consequences of dealing in stolen goods. It underscores the importance of exercising due diligence in commercial transactions and being vigilant for red flags that may indicate the illicit origin of merchandise. By affirming Cahulogan’s conviction, the Supreme Court reinforced the policy of deterring fencing and protecting legitimate businesses from the harmful effects of theft and robbery.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ireneo Cahulogan v. People, G.R. No. 225695, March 21, 2018