Dear Attorney,

I hope this message finds you well. I am writing to seek legal advice regarding a distressing situation involving a foreign national who allegedly defrauded my family. He claimed to be a contractor, presented himself as being affiliated with a reputable company, and misrepresented his ability to build our house. Unfortunately, we entrusted him with a significant sum of money amounting to several million pesos. However, he failed to fulfill his promises, and no work was ever started on the house.

Compounding the matter, he, along with his associate who is a lawyer, persuaded us to sign a Special Power of Attorney (SPA) for our current house. We fear this may have been part of a broader scheme to exploit our trust. We now feel defrauded and concerned about the implications of the SPA we signed.

Given these circumstances, I would like to know the legal remedies available to address this issue and recover our losses. Could you please guide me on how to proceed? Your expertise and advice would be greatly appreciated.

Sincerely,
A Concerned Citizen

Legal Analysis and Advice: Addressing Fraud and Misrepresentation in Contracting Cases

Fraud and misrepresentation in the Philippines are serious legal concerns that violate both civil and criminal laws. Under Philippine law, the facts described suggest possible violations of the Revised Penal Code and the Civil Code. Below is a detailed discussion of the relevant legal principles and remedies applicable to your case.

1. Fraud and Misrepresentation under Philippine Law

A. Criminal Fraud

Under Article 315 of the Revised Penal Code, estafa (or swindling) is a criminal offense. Estafa arises when a person defrauds another through false pretenses or fraudulent means, causing the victim to part with money, goods, or property. The elements of estafa are:

Deceit or Fraudulent Representation – The accused must have used deceit to induce the victim into a transaction.
Damage to the Victim – The victim suffered economic loss due to reliance on the deceit.

In this case, the individual falsely presented himself as a legitimate contractor, misrepresented his affiliations, and induced you to entrust him with funds. This satisfies the elements of estafa.

B. Civil Fraud

Article 1338 of the Civil Code states that fraud exists when one party induces another to enter into a contract through insidious words or machinations. Contracts obtained through fraud are voidable under Article 1390.

2. Legal Issues Concerning the Special Power of Attorney (SPA)

A Special Power of Attorney is a legal document authorizing someone to act on your behalf concerning specific transactions. In this case, signing an SPA regarding your current house raises significant concerns, particularly if its terms were not clearly explained to you or were obtained through deceit.

If the SPA was executed under fraudulent circumstances, it may be nullified under Article 1391 of the Civil Code, which provides that contracts vitiated by fraud can be annulled.

3. Remedies Available

A. Filing a Criminal Case for Estafa

Jurisdiction: Estafa is prosecuted where the offense was committed. You may file a complaint with the Prosecutor’s Office in Dumaguete City or the location where the transaction took place.
Evidence: To strengthen your case, gather the following:
- Copies of contracts or agreements, including the SPA.
- Proof of payments (e.g., receipts, bank transfer records).
- Correspondence or communications with the individual and their associate.
- Witness statements, if applicable.
Process: The complaint will proceed to preliminary investigation, where the prosecutor determines probable cause. If probable cause is found, criminal charges will be filed in court.

B. Filing a Civil Case for Annulment of Contracts

Under Article 1391 of the Civil Code, you may file a civil action to annul the SPA if it was obtained through fraud. Remedies include:

Declaration of nullity of the SPA.
Restitution of any property transferred under the fraudulent SPA.
Moral and exemplary damages, if applicable.

C. Filing for Damages under Civil Law

Under Articles 19, 20, and 21 of the Civil Code, you can file for damages caused by the fraudulent acts. This may include:

Actual damages for monetary loss.
Moral damages for emotional distress.
Exemplary damages to deter similar fraudulent conduct.

D. Administrative Complaints

If the associate who assisted in obtaining the SPA is indeed a lawyer, you may file a complaint with the Integrated Bar of the Philippines (IBP) for unethical conduct under the Code of Professional Responsibility.

4. Preventive Measures

A. Verification of Contractor Credentials

Before engaging with any contractor, verify their legitimacy through:

The Philippine Contractors Accreditation Board (PCAB) license.
Company registration documents from the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC).

B. Careful Review of Legal Documents

Always review the terms of contracts or SPAs with an independent lawyer to ensure clarity and avoid fraud.

5. Steps to Take Immediately

Consult a Lawyer: Seek legal counsel to assess the details of your case and draft the necessary complaints.
File a Police Report: Report the incident to local authorities in Dumaguete City.
Issue a Demand Letter: Through your lawyer, issue a demand letter to the individual, requesting the return of the funds and the revocation of the SPA.
Secure Evidence: Ensure that all documents and communications are preserved as evidence.

Conclusion

Your case involves serious allegations of fraud and misrepresentation, which warrant both criminal and civil actions. Pursuing these remedies requires methodical preparation, including gathering evidence and consulting a qualified lawyer. Immediate action will protect your rights and help recover your losses.

If you need further assistance, do not hesitate to contact a legal professional to guide you through the process. Your situation underscores the importance of vigilance in legal and financial transactions, particularly with individuals whose credibility has not been established.

I hope this article provides clarity and guidance for addressing your concern.