TL;DR

The Supreme Court ruled that International Simple Resale (ISR) activity constitutes theft of telecommunication services, which are considered personal property under Article 308 of the Revised Penal Code. This decision reversed a previous ruling that telecommunication services could not be the object of theft. The Court also clarified the standard for issuing search warrants, emphasizing that probable cause, not proof beyond reasonable doubt, is sufficient. This ruling allows telecommunication companies to pursue legal action against entities engaged in ISR, reinforcing their property rights and combating revenue loss from unauthorized resale activities.

Cutting the Line: Can ‘Theft’ Apply to Telecommunication Services?

This case revolves around HPS Software and Communication Corporation and Hyman Yap (HPS Corporation) being accused by Philippine Long Distance Telephone Company (PLDT) of engaging in International Simple Resale (ISR), a practice PLDT claims is tantamount to theft of their telecommunication services. The central legal question is whether ISR constitutes theft under the Revised Penal Code, and whether the search warrants issued against HPS Corporation were valid. This involves determining if telecommunication services can be considered “personal property” subject to theft, and clarifying the standard for probable cause in issuing search warrants.

The Supreme Court tackled several key issues, including PLDT’s legal standing to file the case, the necessity of a motion for reconsideration, and allegations of forum shopping. The heart of the matter, however, rested on whether the trial court properly quashed the search warrants and whether these warrants were, in fact, general warrants.

A significant point of contention was the application of the Supreme Court’s previous ruling in Laurel v. Abrogar, which initially stated that telecommunication services were not personal property and therefore could not be the object of theft. However, the Supreme Court En Banc reversed this earlier decision, asserting that ISR activities constitute theft by unlawfully using PLDT’s facilities. The Court emphasized that business and telecommunication services can be appropriated and are thus considered personal property under Article 308 of the Revised Penal Code.

The acts of “subtraction” include: (a) tampering with any wire, meter, or other apparatus installed or used for generating, containing, conducting, or measuring electricity, telegraph or telephone service; (b) tapping or otherwise wrongfully deflecting or taking any electric current from such wire, meter, or other apparatus; and (c) using or enjoying the benefits of any device by means of which one may fraudulently obtain any current of electricity or any telegraph or telephone service.

The Court also addressed the issue of probable cause necessary for issuing the search warrants. It clarified that probable cause requires facts and circumstances that would lead a reasonably prudent person to believe that an offense has been committed and that the objects sought in connection with the offense are in the place to be searched. The Court found that PLDT had presented sufficient evidence to establish probable cause, including affidavits, testimonies, and traffic studies detailing losses suffered due to HPS Corporation’s ISR activities. The Court noted that the trial court’s reliance on a test call using a Mabuhay card was not sufficient to negate the evidence of probable cause.

Regarding the claim that the search warrants were general warrants, the Court disagreed, stating that the warrants sufficiently identified the items to be seized and their relation to the offenses charged. The warrants described specific equipment used for transmitting air waves, computers, modems, multiplexers, switching equipment, software, and documents related to HPS Corporation’s ISR operations. The Court stated that the level of specificity in the warrant matched the circumstances for such a warrant.

Finally, the Supreme Court addressed the release of seized items, stating that the release was premature and improper because it was executed before the May 23, 2001 Joint Order became final and executory and without a motion for execution. The Court emphasized that such orders are not immediately executory and require a motion for execution after the period to appeal has expired.

FAQs

This Supreme Court decision clarifies the legal landscape surrounding telecommunication services and theft. By defining telecommunication services as personal property and reaffirming the standard for probable cause in search warrants, the Court has provided a framework for telecommunication companies to protect their interests and combat unauthorized resale activities.

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.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: HPS Software vs PLDT, G.R. No. 170694, December 10, 2012