G.R. No.

155076 February 27, 2006

LUIS MARCOS P. LAUREL,
vs.
HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial Court, Makati City,
Branch 150, PEOPLE OF THE PHILIPPINES& PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY

Facts:

Philippine Long Distance Telephone Company (PLDT) is the holder of a legislative

franchise to render local and international telecommunication services under Republic
Act No. 7082. Under said law, PLDT is authorized to establish, operate, manage, lease,
maintain and purchase telecommunication systems, including transmitting, receiving and
switching stations, for both domestic and international calls.

PLDT alleges that one of the alternative calling patterns that constitute network
fraud and violate its network integrity is that which is known as International Simple
Resale (ISR). ISR is a method of routing and completing international long distance calls
using International Private Leased Lines (IPL), cables, antenna or air wave or frequency,
which connect directly to the local or domestic exchange facilities of the terminating
country (the country where the call is destined). The IPL is linked to switching equipment
which is connected to a PLDT telephone line/number. In the process, the calls bypass
the IGF found at the terminating country, or in some instances, even those from the
originating country

One such alternative calling service is that offered by Baynet Co., Ltd. (Baynet)
which sells "Bay Super Orient Card" phone cards to people who call their friends and
relatives in the Philippines.PLDT asserts that Baynet conducts its ISR activities by
utilizing an IPL to course its incoming international long distance calls from Japan. The
IPL is linked to switching equipment, which is then connected to PLDT telephone
lines/numbers and equipment, with Baynet as subscriber. Through the use of the
telephone lines and other auxiliary equipment, Baynet is able to connect an international
long distance call from Japan to any part of the Philippines, and make it appear as a call
originating from Metro Manila. Consequently, the operator of an ISR is able to evade
payment of access, termination or bypass charges and accounting rates, as well as
compliance with the regulatory requirements of the NTC. Thus, the ISR operator offers
international telecommunication services at a lower rate, to the damage and prejudice of
legitimate operators like PLDT.

Issue:

Whether or not international telephone calls using Bay Super Orient Cards through
the telecommunication services provided by PLDT for such calls, or, in short, PLDT’s
business of providing said telecommunication services, are proper subjects of theft
under Article 308 of the Revised Penal Code

Ruling:

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Orders of
the Regional Trial Court and the Decision of the Court of Appeals are REVERSED and
SET ASIDE.

Ratio

Article 308 of the Revised Penal Code defines theft as follows:

Art. 308. Who are liable for theft.– Theft is committed by any person who, with intent to
gain but without violence, against or intimidation of persons nor force upon things, shall
take personal property of another without the latter’s consent.

For one to be guilty of theft, the accused must have an intent to steal (animus furandi)
personal property, meaning the intent to deprive another of his ownership/lawful
possession of personal property which intent is apart from and concurrently with the
general criminal intent which is an essential element of a felony of dolo.

According to Cuello Callon, in the context of the Penal Code, only those movable
properties which can be taken and carried from the place they are found are proper
subjects of theft. Intangible properties such as rights and ideas are not subject of theft
because the same cannot be "taken" from the place it is found and is occupied or
appropriated.

A naked right existing merely in contemplation of law, although it may be very valuable
to the person who is entitled to exercise it, is not the subject of theft or larceny. 55 Such
rights or interests are intangible and cannot be "taken" by another. Thus, right to produce
oil, good will or an interest in business, or the right to engage in business, credit or
franchise are properties. So is the credit line represented by a credit card. However, they
are not proper subjects of theft or larceny because they are without form or substance,
the mere "breath" of the Congress.

In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal
property without the consent of the owner thereof, the Philippine legislature could not
have contemplated the human voice which is converted into electronic impulses or
electrical current which are transmitted to the party called through the PSTN of
respondent PLDT and the ISR of Baynet Card Ltd. within its coverage. When the
Revised Penal Code was approved, on December 8, 1930, international telephone calls
and the transmission and routing of electronic voice signals or impulses emanating from
said calls, through the PSTN, IPL and ISR, were still non-existent.

Respondent PLDT does not acquire possession, much less, ownership of the voices of
the telephone callers or of the electronic voice signals or current emanating from said
calls. The human voice and the electronic voice signals or current caused thereby are
intangible and not susceptible of possession, occupation or appropriation by the
respondent PLDT or even the petitioner, for that matter. PLDT merely transmits the
electronic voice signals through its facilities and equipment. Baynet Card Ltd., through its
operator, merely intercepts, reroutes the calls and passes them to its toll center. Indeed,
the parties called receive the telephone calls from Japan.

In this modern age of technology, telecommunications systems have become so tightly

merged with computer systems that it is difficult to know where one starts and the other
finishes. The telephone set is highly computerized and allows computers to
communicate across long distances. The instrumentality at issue in this case is not
merely a telephone but a telephone inexplicably linked to a computerized
communications system with the use of Baynet Cards sold by the Baynet Card Ltd. The
corporation uses computers, modems and software, among others, for its ISR.

The conduct complained of by respondent PLDT is reminiscent of "phreaking" (a slang

term for the action of making a telephone system to do something that it normally should
not allow by "making the phone company bend over and grab its ankles"). A "phreaker"
is one who engages in the act of manipulating phones and illegally markets telephone
services. Unless the phone company replaces all its hardware, phreaking would be
impossible to stop. The phone companies in North America were impelled to replace all
their hardware and adopted full digital switching system known as the Common Channel
Inter Office Signaling. Phreaking occurred only during the 1960’s and 1970’s, decades
after the Revised Penal Code took effect.

If it was the intent of the Philippine Legislature, in 1930, to include services to be the
subject of theft, it should have incorporated the same in Article 308 of the Revised Penal
Code. The Legislature did not. In fact, the Revised Penal Code does not even contain a
definition of services.

(For Purposes of E-commerce discussion )

In Examining foreign statutes, the courts found that other states specifically included
“business/services” to be one of a “personal property” as implemented therein. In the
Philippines, Congress has not amended the Revised Penal Code to include theft of
services or theft of business as felonies. Instead, it approved a law, Republic Act No.
8484, otherwise known as the Access Devices Regulation Act of 1998, on February 11,
1998. Under the law, an access device means any card, plate, code, account number,
electronic serial number, personal identification number and other telecommunication
services, equipment or instrumentalities-identifier or other means of account access that
can be used to obtain money, goods, services or any other thing of value or to initiate a
transfer of funds other than a transfer originated solely by paper instrument. Among the
prohibited acts enumerated in Section 9 of the law are the acts of obtaining money or
anything of value through the use of an access device, with intent to defraud or intent to
gain and fleeing thereafter; and of effecting transactions with one or more access
devices issued to another person or persons to receive payment or any other thing of
value. Under Section 11 of the law, conspiracy to commit access devices fraud is a
crime. However, the petitioner is not charged of violation of R.A. 8484.

Significantly, a prosecution under the law shall be without prejudice to any liability for
violation of any provisions of the Revised Penal Code inclusive of theft under Rule 308 of
the Revised Penal Code and estafa under Article 315 of the Revised Penal Code. Thus,
if an individual steals a credit card and uses the same to obtain services, he is liable of
the following: theft of the credit card under Article 308 of the Revised Penal Code;
violation of Republic Act No. 8484; and estafa under Article 315(2)(a) of the Revised
Penal Code with the service provider as the private complainant. The petitioner is not
charged of estafa before the RTC in the Amended Information.

Section 33 of Republic Act No. 8792, Electronic Commerce Act of 2000 provides:

Sec. 33. Penalties.— The following Acts shall be penalized by fine and/or imprisonment,
as follows:

a) Hacking or cracking which refers to unauthorized access into or interference in a

computer system/server or information and communication system; or any access in
order to corrupt, alter, steal, or destroy using a computer or other similar information and
communication devices, without the knowledge and consent of the owner of the
computer or information and communications system, including the introduction of
computer viruses and the like, resulting on the corruption, destruction, alteration, theft or
loss of electronic data messages or electronic documents shall be punished by a
minimum fine of One hundred thousand pesos (P100,000.00) and a maximum
commensurate to the damage incurred and a mandatory imprisonment of six (6) months
to three (3) years.