Good Faith VS Fencing: When A Notarized Affidavit Protects Purchasers

The crime of fencing under Presidential Decree No. 1612 punishes those who buy, receive, or possess property known to be stolen. But what happens when a buyer relies on a notarized document of ownership? In Mariano Lim v. People, the Supreme Court clarified that good faith, supported by a notarized affidavit, can defeat a fencing charge. The ruling underscores that the prosecution must prove every element of the crime beyond reasonable doubt—and that a notarized document carries a presumption of regularity that cannot be easily overturned.

The Case: A Road Grader and a Question of Ownership

Mariano Lim, proprietor of Basco Metal Supply in Davao City, purchased a Komatsu Road Grader from Petronilo Banosing for P400,000. Banosing presented a Certificate of Ownership, and Lim even checked with the DPWH in Manila, finding the grader was not in the agency's inventory. Later, the DPWH claimed the grader was stolen from its project site, and Lim was charged with fencing under PD 1612.

The trial court convicted Lim, relying on the presumption that a person in possession of stolen goods knows they are stolen. The Court of Appeals affirmed. The Supreme Court reversed, acquitting Lim due to insufficiency of evidence.

The Elements of Fencing

Under PD 1612, fencing requires four elements: (1) a crime of robbery or theft was committed; (2) the accused, not a principal or accomplice, buys, receives, or possesses property derived from that crime; (3) the accused knows or should have known the property was derived from robbery or theft; and (4) there is intent to gain.

The Supreme Court found the prosecution failed on the first and third elements. On ownership, the prosecution's witness, Engr. Gulmatico, could not conclusively establish that the DPWH owned the grader. The Memorandum Receipt he presented had blank fields for date acquired, property number, and unit value—it merely showed he received the equipment for safekeeping. Moreover, his testimony on the alleged theft was hearsay, based entirely on information from third persons who were never presented in court.

The Notarized Affidavit and the Presumption of Regularity

The Court emphasized that a notarized document enjoys a presumption of regularity. Citing Ocampo v. Land Bank of the Philippines, it held that a document acknowledged before a notary public is a public document, prima facie evidence of the truth of its contents, and conclusive as to its due execution. To overcome this presumption, the prosecution must present clear and convincing evidence—which it failed to do.

The Court also rejected the lower courts' application of Section 6 of PD 1612, which requires stores dealing in second-hand articles to secure a police clearance. That provision applies only when the item was obtained from an unlicensed dealer and is offered for sale to the public. Here, neither was established. Furthermore, the purchase occurred before any theft was reported, so a police clearance would have been futile.

Practical Takeaways

• Notarized documents carry weight. A buyer who secures a notarized affidavit of ownership from a seller can rely on its presumption of regularity. The prosecution must present clear and convincing evidence to overturn it.
• The prosecution must prove every element. In fencing cases, the prosecution must independently establish that a theft or robbery occurred and that the accused knew the property was stolen. Hearsay testimony will not suffice.
• Good faith is a complete defense. Paying a fair price and verifying ownership, as Lim did by checking with the DPWH, supports a claim of good faith.
• Section 6 of PD 1612 has limits. The police clearance requirement applies only to dealers offering second-hand items for sale to the public, not to every purchase of used equipment.
• The information must match the conviction. An accused cannot be convicted on a ground not alleged in the information. Here, the information alleged actual knowledge, but the courts convicted on constructive knowledge—a fatal variance.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.