The Importance of Knowledge in Fencing Cases: Rebutting the Presumption of Guilt

D.M. CONSUNJI, INC., PETITIONER, VS. RAMON S. ESGUERRA, ET AL., G.R. No. 118590, July 30, 1996

Imagine you’re a business owner who purchases materials from a supplier. Unbeknownst to you, those materials were stolen. Can you be held liable for ‘fencing,’ even if you had no idea they were illegally obtained? This Supreme Court case clarifies the crucial element of knowledge in fencing cases and how the presumption of guilt can be overcome with evidence of good faith.

INTRODUCTION

This case revolves around D.M. Consunji, Inc., which experienced systematic pilferage of company properties. These stolen materials were then sold to hardware stores owned by Eduardo Ching and the Spouses Say. The central legal question is whether Ching and the Spouses Say could be prosecuted for violating the Anti-Fencing Law (Presidential Decree 1612), despite claiming they were unaware the goods were stolen. The Supreme Court ultimately addressed whether the dismissal of the complaint against the private respondents was justified.

LEGAL CONTEXT: UNDERSTANDING THE ANTI-FENCING LAW

The Anti-Fencing Law (Presidential Decree No. 1612) aims to combat the trafficking of stolen goods. It defines ‘fencing’ as the act of any person who, with intent to gain, buys, receives, possesses, keeps, acquires, conceals, sells, or disposes of any item which he knows, or should have known, to have been derived from robbery or theft.

A key provision of the law, Section 5, states that “[m]ere 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 means that simply possessing stolen goods creates a presumption that the possessor is a fence, shifting the burden of proof to the possessor to prove their innocence.

However, the prosecution must still prove beyond reasonable doubt that the accused knew or should have known that the goods were stolen. This element of knowledge is crucial. The Supreme Court in Dizon-Pamintuan vs. People outlined the elements of fencing:

• A crime of robbery or theft has been committed.
• The accused, not a principal or accomplice in the crime, buys, receives, possesses, etc., the stolen item.
• The accused knows or should have known the item was derived from robbery or theft.
• The accused has intent to gain.

A person is deemed to know a fact if they are aware of its existence or have it within their mind’s grasp. The phrase “should know” implies a reasonable person would ascertain the fact in performing their duty. This case highlights that the presumption of fencing can be rebutted with evidence showing a lack of knowledge or reasonable suspicion that the goods were stolen.

CASE BREAKDOWN: THE FACTS AND THE COURT’S REASONING

Here’s a chronological breakdown of the events:

1. D.M. Consunji, Inc. discovers internal pilferage of company properties.
2. The stolen materials are sold to MC Industrial Sales (owned by Ching) and Seato Trading Company, Inc. (owned by the Spouses Say).
3. The NBI conducts searches of the premises of Ching and the Spouses Say, seizing phenolic plywood.
4. The NBI files complaints against Ching and the Spouses Say for violation of the Anti-Fencing Law.
5. The Investigating Prosecutor recommends dismissal of the case, finding no probable cause to believe that Ching and the Spouses Say knew the plywood was stolen.
6. The Undersecretary of Justice upholds the dismissal.
7. D.M. Consunji, Inc. files a petition for certiorari and mandamus with the Supreme Court.

The Supreme Court denied the petition, finding no grave abuse of discretion by the public respondents. The Court emphasized that the private respondents presented sales receipts covering their purchases, disputing the prima facie presumption of fencing. The court cited the Investigating Prosecutor’s findings:

“When SEATO TRADING bought the said marine plywoods from EDUARDO CHING, there is no doubt that the Spouses SAY were buying legitimate goods. They never had any suspicious (sic), even the slightest suspicion, that those marine plywoods were allegedly the subject of thievery…”

Additionally, the Court noted that Ching claimed to have purchased the plywood from agents of Paramount Industrial, a known hardware store, and that his purchases were covered by receipts. The Spouses Say also claimed to have bought the plywood from MC Industrial Sales, a registered business establishment licensed to sell construction materials, with receipts to prove the transaction. The Supreme Court concluded that these receipts provided a reasonable basis to believe the transactions were legitimate, thus negating the element of knowledge required for a fencing conviction.

“Absent other evidence, the presumption of innocence remains. Thus, grave abuse of discretion cannot be successfully imputed upon public respondents.”

PRACTICAL IMPLICATIONS: WHAT THIS MEANS FOR BUSINESSES

This case underscores the importance of due diligence in business transactions. While mere possession of stolen goods creates a presumption of fencing, this presumption can be overcome by presenting evidence of good faith and lack of knowledge that the goods were stolen. For business owners, this means keeping accurate records of purchases, verifying the legitimacy of suppliers, and documenting all transactions.

Key Lessons:

• Document Everything: Always obtain and keep receipts for all purchases.
• Know Your Suppliers: Verify that your suppliers are legitimate and licensed businesses.
• Be Aware: If something seems too good to be true, it probably is. Investigate any suspicious circumstances.

For prosecutors, this case emphasizes the need to prove the element of knowledge beyond a reasonable doubt in fencing cases. Mere possession is not enough; there must be evidence that the accused knew or should have known that the goods were stolen.

FREQUENTLY ASKED QUESTIONS

Q: What is fencing under Philippine law?

A: Fencing is the act of buying, receiving, possessing, or dealing in any item that the person knows or should have known was derived from robbery or theft, with the intent to gain.

Q: What is the penalty for fencing?

A: The penalty for fencing is dependent on the value of the property involved and is generally equivalent to the penalty prescribed for robbery or theft of the same property.

Q: What does “prima facie evidence of fencing” mean?

A: It means that the mere possession of stolen goods creates a presumption that the possessor is a fence. However, this presumption can be rebutted with evidence to the contrary.

Q: What kind of evidence can rebut the presumption of fencing?

A: Evidence such as sales receipts, proof of legitimate business operations, and testimony showing a lack of knowledge or reasonable suspicion that the goods were stolen can rebut the presumption.

Q: What is the role of the prosecutor in a fencing case?

A: The prosecutor must establish probable cause and prove beyond a reasonable doubt that the accused knew or should have known that the goods were stolen.

Q: Can a person be convicted of fencing even if they didn’t directly steal the goods?

A: Yes, fencing applies to individuals who buy, receive, or possess stolen goods, even if they were not involved in the actual theft.

Q: What is the difference between theft and fencing?

A: Theft is the act of stealing property, while fencing is the act of dealing in stolen property. They are distinct but related offenses.

Q: Is it enough to have receipts to prove that I am not a fence?

A: While receipts are strong evidence, the court will consider the totality of evidence to determine your guilt or innocence. Keeping accurate records and verifying suppliers are important.

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