anthony ng

7/20/2015 G.R.No.173905

http://www.lawphil.net/judjuris/juri2010/apr2010/gr_173905_2010.html 1/9

TodayisMonday,July20,2015

RepublicofthePhilippinesSUPREMECOURT

BaguioCity

THIRDDIVISION

G.R.No.173905April23,2010

ANTHONYL.NG,Petitioner,vs.PEOPLEOFTHEPHILIPPINES,Respondent.

DECISION

VELASCO,JR.

TheCase

This isaPetition forReviewonCertiorariunderRule45seeking toreverseandsetaside theAugust29,2003Decision1andJuly25,2006Resolutionof theCourtofAppeals(CA) inCAG.R.CRNo.25525,whichaffirmedtheDecision2oftheRegionalTrialCourt(RTC),Branch95inQuezonCity,inCriminalCaseNo.Q9985133forEstafaunderArticle315,paragraph1(b)oftheRevisedPenalCode(RPC)inrelationtoSection3ofPresidentialDecreeNo.(PD)115ortheTrustReceiptsLaw.

TheFacts

Sometime in the early part of 1997, petitioner Anthony Ng, then engaged in the business of building andfabricatingtelecommunicationtowersunderthetradename"CapitolBlacksmithandBuilders,"appliedforacreditline of PhP 3,000,000 with Asiatrust Development Bank, Inc. (Asiatrust). In support of Asiatrusts creditinvestigation, petitioner voluntarily submitted the following documents: (1) the contracts he had with Islacom,Smart, and Infocom (2) the list of projects wherein he was commissioned by the said telecommunicationcompaniestobuildseveralsteeltowersand(3)thecollectibleamountshehaswiththesaidcompanies.3

OnMay30,1997,Asiatrustapprovedpetitioners loanapplication.Petitionerwas then required tosignseveraldocuments,amongwhichare theCreditLineAgreement,ApplicationandAgreement for IrrevocableL/C,TrustReceiptAgreements,4andPromissoryNotes.ThoughthePromissoryNotesmaturedonSeptember18,1997,thetwo(2)aforementionedTrustReceiptAgreementsdidnotbearanymaturitydatesastheywereleftunfilledorinblankbyAsiatrust.5

Afterpetitionerreceivedthegoods,consistingofchemicalsandmetalplatesfromhissuppliers,heutilizedthemtofabricatethecommunicationtowersorderedfromhimbyhisclientswhichwereinstalledinthreeprojectsites,namely:Isabel,LeytePanabo,DavaoandTongonan.

AspetitionerrealizeddifficultyincollectingfromhisclientIslacom,hefailedtopayhisloantoAsiatrust.Asiatrustthen conducted a surprise ocular inspection of petitioners business through Villarva S. Linga, Asiatrustsrepresentative appraiser. Linga thereafter reported to Asiatrust that he found that approximately 97% of thesubject goodsof theTrustReceiptswere "soldout and that only3%of thegoodspertaining toPNNo. 1963remained." Asiatrust then endorsed petitioners account to its Account Management Division for the possiblerestructuring of his loan. The parties thereafter held a series of conferences to work out the problem and todetermineawayforpetitionertopayhisdebts.However,effortstowardsasettlementfailedtobereached.

OnMarch16,1999,RemedialAccountOfficerMa.GirlieC.BernardezfiledaComplaintAffidavitbeforetheOfficeof the City Prosecutor of Quezon City. Consequently, on September 12, 1999, an Information for Estafa, asdefinedandpenalizedunderArt.315,par.1(b)of theRPC in relation toSec.3,PD115or theTrustReceiptsLaw,wasfiledwiththeRTC.ThesaidInformationreads:

Thatonoraboutthe30thdayofMay1997,inQuezonCity,Philippines,theabovenamedpetitioner,didthenandthere willfully, unlawfully, and feloniously defraud Ma. Girlie C. Bernardez by entering into a Trust Receipt

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AgreementwithsaidcomplainantwherebysaidpetitionerasentrusteereceivedintrustfromthesaidcomplainantvariouschemicalsinthetotalsumofP4.5millionwiththeobligationtoholdthesaidchemicalsintrustaspropertyoftheentrusterwiththerighttosell thesameforcashandtoremittheproceedsthereoftotheentruster,ortoreturnthesaidchemicalsifunsoldbutsaidpetitioneronceinpossessionofthesame,contrarytohisaforesaidobligationunderthetrustreceiptagreementwithintenttodefrauddidthenandtheremisappropriated,misappliedandconvertedthesaidamounttohisownpersonaluseandbenefitanddespiterepeateddemandsmadeuponhim,saidpetitionerrefusedandfailedandstillrefusesandfailstomakegoodofhisobligation,tothedamageandprejudiceofthesaidMa.GirlieC.BernardezintheamountofP2,971,650.00,PhilippineCurrency.

CONTRARYTOLAW.

Uponarraignment,petitionerpleadednotguiltytothecharges.Thereafter,afullblowntrialensued.

During the pendency of the abovementioned case, conferences between petitioner and Asiatrusts RemedialAccountOfficer,DanielYap,wereheld.Afterward,aCompromiseAgreementwasdraftedbyAsiatrust.Oneoftherequirementsof theCompromiseAgreementwas forpetitioner to issuesix (6)postdatedchecks.Petitioner, ingoodfaith,triedtocomplybyissuingtwoorthreechecks,whichweredepositedandmadegood.Theremainingchecks,however,werenotdepositedastheCompromiseAgreementdidnotpushthrough.

Forhisdefense,petitionerarguedthat:(1)theloanwasgrantedashisworkingcapitalandthattheTrustReceiptAgreementshesignedwithAsiatrustweremerelypreconditions for thegrantandapproval of his loan (2) theTrust Receipt Agreement corresponding to Letter of Credit No. 1963 and the Trust Receipt Agreementcorresponding toLetterofCreditNo.1964werebothcontractsofadhesion,since thestipulations found in thedocuments were prepared by Asiatrust in fine print (3) unfortunately for petitioner, his contract worth PhP18,000,000with Islacomwas not yet paid since therewas a squabble as to the real ownership of the latterscompany, but Asiatrust was aware of petitioners receivables which were more than sufficient to cover theobligationasshowninthevariousProjectListingswithIslacom,SmartCommunications,andInfocom(4)priortothe Islacomproblem,hehadbeen faithfullypayinghisobligation toAsiatrustasshown inOfficialReceiptNos.549001,549002,565558,577198,577199,and594986,6thusdebunkingAsiatrustsclaimoffraudandbadfaithagainsthim(5)duringthependencyofthiscase,petitionerevenattemptedtosettlehisobligationsasevidencedby the twoUnitedCoconutPlantersBankChecks7he issued in favorofAsiatrustand (6)hehadalreadypaidPhP1.8millionoutofthePhP2.971millionheowedasperStatementofAccountdatedJanuary26,2000.

RulingoftheTrialCourt

Aftertrialonthemerits,theRTC,onMay29,2001,renderedaDecision,findingpetitionerguiltyofthecrimeofEstafa.ThefallooftheDecisionreadsasfollows:

WHEREFORE, judgment is hereby rendered finding the petitioner, Anthony L.NgGUILTY beyond reasonabledoubtforthecrimeofEstafadefinedinandpenalizedbyArticle315,paragraph1(b)oftheRevisedPenalCodein relation toSection3ofPresidentialDecree115,otherwiseknownas theTrustReceiptsLaw,and isherebysentencedtosuffertheindeterminatepenaltyoffromsix(6)years,eight(8)months,andtwentyone(21)daysofprisionmayor,minimum,as theminimumpenalty, to twenty (20)yearsof reclusion temporalmaximum,as themaximumpenalty.

ThepetitionerisfurtherorderedtoreturntotheAsiatrustDevelopmentBankInc.theamountofTwoMillion,NineHundredSeventyOneandSixHundredFiftyPesos(P2,971,650.00)withlegalrateofinterestcomputedfromthefilingoftheinformationonSeptember21,1999untiltheamountisfullypaid.

ITISSOORDERED.

In rendering its Decision, the trial court held that petitioner could not simply argue that the contracts he hadenteredintowithAsiatrustwerevoidastheywerecontractsofadhesion.Itreasonedthatpetitionerispresumedto have read and understood and is, therefore, bound by the provisions of the Letters of Credit and TrustReceipts.ItsaidthatitwasclearthatAsiatrusthadfurnishedpetitionerwithaStatementofAccountenumeratingthereintheprecisefiguresoftheoutstandingbalance,whichhefailedtopayalongwiththecomputationofotherfeesandcharges thus,AsiatrustdidnotviolateRepublicActNo.3765 (Truth inLendingAct).Finally, the trialcourtdeclaredthatpetitioner,beingtheentrusteestatedintheTrustReceiptsissuedbyAsiatrust,isthusobligedtohold thegoods in trust for theentrusterandshalldisposeof themstrictly inaccordancewith the termsandconditions of the trust receipts otherwise, he is obliged to return the goods in the event of nonsale or upondemandoftheentruster,failingthus,heevidentlyviolatedtheTrustReceiptsLaw.

RulingoftheAppellateCourt

PetitionerthenelevatedthecasetotheCAbyfilingaNoticeofAppealonAugust6,2001.InhisAppellantsBriefdatedMarch25,2002,petitionerargued that thecourtaquo erred: (1) in changing thenameof theoffendedpartywithoutthebenefitofanamendmentoftheInformationwhichviolateshisrighttobeinformedofthenature

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andcauseofaccusationagainsthim(2)inmakingafindingoffactsnotinaccordwiththatactuallyprovedinthetrialand/orbytheevidenceprovided(3) innotconsideringthematerial factswhich if taken intoaccountwouldhaveresultedinhisacquittal(4)inbeingbiased,hostile,andprejudicedagainsthimand(5)inconsideringtheprosecutionsevidencewhichdidnotprovetheguiltofpetitionerbeyondreasonabledoubt.1 a v v p h i1

OnAugust29,2003,theCArenderedaDecisionaffirmingthatoftheRTC,thefalloofwhichreads:

WHEREFORE,theforegoingconsidered,theinstantappealisDENIED.ThedecisionoftheRegionalTrialCourtofQuezonCity,Branch95datedMay29,2001isAFFIRMED.

SOORDERED.

TheCAheldthatduringthecourseofthetrial,petitionerknewthatthecomplainantBernardezandtheothercowitnessesareallemployeesofAsiatrustandthatshe issuing inbehalfof thebank.Sincepetitioner transactedwiththesameemployeesfortheissuanceofthesubjectTrustReceipts,hecannotfeignignorancethatAsiatrustis not the offended party in the instant case. The CA further stated that the change in the name of thecomplainant will not prejudice and alter the fact that petitioner was being charged with the crime of Estafa inrelation to the Trust Receipts Law, since the information clearly set forth the essential elements of the crimecharged,andtheconstitutionalrightofpetitionertobeinformedofthenatureandcauseofhisaccusationsisnotviolated.8

As to theallegederror in theappreciationof facts by the trial court, theCAstated that itwasundisputed thatpetitionerenteredintoatrustreceiptagreementwithAsiatrustandhefailedtopaythebankhisobligationwhenitbecame due. According to the CA, the fact that petitioner acted without malice or fraud in entering into thetransactionshasnobearing,since theoffense ispunishedasmalumprohibitum regardlessof theexistenceofintent or malice the mere failure to deliver the proceeds of the sale or the goods if not sold constitutes thecriminaloffense.

WithregardtothefailureoftheRTCtoconsiderthefactthatpetitionersoutstandingreceivablesaresufficienttocoverhisindebtednessandthatnowrittendemandwasmadeuponhimhencehisobligationhasnotyetbecomedueanddemandable, theCAstated that themerequeryas to thewhereaboutsof thegoodsand/ormoney istantamounttoademand.9

Concerning the alleged bias, hostility, and prejudice of the RTC against petitioner, the CA said that petitionerfailedtopresentanysubstantialprooftosupporttheaforementionedallegationsagainsttheRTC.

After thereceiptof theCADecision,petitionermovedfor itsreconsideration,whichwasdeniedbytheCAin itsResolution dated July 25, 2006. Thereafter, petitioner filed this Petition for Review on Certiorari. In hisMemorandum,heraisedthefollowingissues:

Issues:

1. The prosecution failed to adduce evidence beyond a reasonable doubt to satisfy the 2nd essentialelementthattherewasmisappropriationorconversionofsubjectmoneyorpropertybypetitioner.

2.Thestatewasunabletoprovethe3rdessentialelementofthecrimethattheallegedmisappropriationorconversionistotheprejudiceoftherealoffendedproperty.

3.Theabsenceofademand(4thessentialelement)onpetitionernecessarilyresultstothedismissalofthecriminalcase.

TheCourtsRuling

Wefindthepetitiontobemeritorious.

Essentially, the issues raised by petitioner can be summed up into onewhether or not petitioner is liable forEstafaunderArt.315,par.1(b)oftheRPCinrelationtoPD115.

It isawellrecognizedprinciple that factual findingsof the trialcourtareentitled togreatweightandrespectbythisCourt,moresowhen theyareaffirmedby theappellatecourt.However, therule isnotwithoutexceptions,suchas: (1)when theconclusion isa findinggroundedentirelyonspeculations,surmises,andconjectures (2)the inferencesmade aremanifestly mistaken (3) there is grave abuse of discretion and (4) the judgment isbasedonmisapprehensionof factsorpremisedontheabsenceofevidenceonrecord.10Especially incriminalcaseswheretheaccusedstandstolosehislibertybyvirtueofhisconviction,theCourtmustbesatisfiedthatthefactual findingsandconclusionsof the lowercourts leading tohisconvictionmustsatisfy thestandardofproofbeyondreasonabledoubt.

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Inthecaseatbar,petitionerwaschargedwithEstafaunderArt.315,par.1(b)oftheRPCinrelationtoPD115.TheRPCdefinesEstafaas:

ART. 315. Swindling (estafa).Any person who shall defraud another by any of the means mentionedhereinbelowxxx

1.Withunfaithfulnessorabuseofconfidence,namely:

a.xxx

b. Bymisappropriating or converting, to the prejudice of another,money, goods, or any other personalproperty received by the offender in trust or on commission, or for administration, or under any otherobligation involving the duty tomake delivery of or to return the same, even though such obligation betotally or partially guaranteed by a bond or by denying having received such money, goods, or otherpropertyxxx.11

Based on the definition above, the essential elements of Estafa are: (1) thatmoney, goods or other personalproperty is received by the offender in trust or on commission, or for administration, or under any obligationinvolving the duty tomake delivery of or to return it (2) that there bemisappropriation or conversion of suchmoney or property by the offender, or denial on his part of such receipt (3) that such misappropriation orconversion or denial is to the prejudice of another and (4) there is demand by the offended party to theoffender.12

Likewise, Estafa can also be committed in what is called a "trust receipt transaction" under PD 115, which isdefinedas:

Section4.What constitutesa trust receipts transaction.A trust receipt transaction,within themeaningof thisDecree, is any transaction by and between a person referred to in this Decree as the entruster, and anotherpersonreferredtointhisDecreeasentrustee,wherebytheentruster,whoownsorholdsabsolutetitleorsecurityinterests over certain specified goods, documents or instruments, releases the same to the possession of theentrusteeupon the lattersexecutionanddelivery to theentrusterofasigneddocumentcalleda"trust receipt"wherein the entrustee binds himself to hold the designated goods, documents or instruments in trust for theentrusterandtosellorotherwisedisposeofthegoods,documentsorinstrumentswiththeobligationtoturnovertotheentrustertheproceedsthereoftotheextentoftheamountowingtotheentrusterorasappearsinthetrustreceiptor thegoods,documentsor instruments themselves if theyareunsoldornototherwisedisposedof, inaccordance with the terms and conditions specified in the trust receipt, or for other purposes substantiallyequivalenttoanyofthefollowing:

1.Inthecaseofgoodsordocuments:(a)tosellthegoodsorprocuretheirsaleor(b)tomanufactureorprocessthegoodswiththepurposeofultimatesale:Provided,That,inthecaseofgoodsdeliveredundertrust receipt for the purpose ofmanufacturing or processing before its ultimate sale, the entruster shallretainitstitleoverthegoodswhetherinitsoriginalorprocessedformuntiltheentrusteehascompliedfullwithhisobligationunder the trust receiptor (c) to load,unload,shipor transshiporotherwisedealwiththeminamannerpreliminaryornecessarytotheirsaleor

2. In the case of instruments: (a) to sell or procure their sale or exchange or (b) to deliver them to aprincipal or (c) to effect the consummation of some transactions involving delivery to a depository orregisteror(d)toeffecttheirpresentation,collectionorrenewal.

The sale of good, documents or instruments by a person in the business of selling goods, documents orinstrumentsforprofitwho,attheoutsetoftransaction,has,asagainstthebuyer,generalpropertyrightsinsuchgoods,documentsorinstruments,orwhosellsthesametothebuyeroncredit,retainingtitleorotherinterestassecurityforthepaymentofthepurchaseprice,doesnotconstituteatrustreceipttransactionandisoutsidethepurviewandcoverageofthisDecree.

Inotherwords,atrustreceipttransactionisonewheretheentrusteehastheobligationtodelivertotheentrusterthepriceof the sale, or if themerchandise is not sold, to return themerchandise to theentruster. Thereare,therefore, two obligations in a trust receipt transaction: the first refers tomoney received under the obligationinvolvingthedutytoturnitover(entregarla)totheownerofthemerchandisesold,whilethesecondreferstothemerchandise receivedunder theobligation to "return" it (devolvera) to theowner.13Aviolationofanyof theseundertakingsconstitutesEstafadefinedunderArt.315,par.1(b)oftheRPC,asprovidedinSec.13ofPD115,viz:

Section 13. Penalty Clause.The failure of an entrustee to turn over the proceeds of the sale of the goods,documents or instruments covered by a trust receipt to the extent of the amount owing to the entruster or asappearsinthetrustreceiptortoreturnsaidgoods,documentsorinstrumentsiftheywerenotsoldordisposedofin accordance with the terms of the trust receipt shall constitute the crime of estafa, punishable under the

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provisionsofArticleThreehundred fifteen,paragraphone (b)ofActNumberedThree thousandeighthundredandfifteen,asamended,otherwiseknownastheRevisedPenalCode.xxx(Emphasissupplied.)

Athoroughexaminationofthefactsobtainingintheinstantcase,however,revealsthatthetransactionbetweenpetitionerandAsiatrustisnotatrustreceipttransactionbutoneofsimpleloan.

PD115DoesNotApply

ItmustberememberedthatpetitionerwastransparenttoAsiatrustfromtheverybeginningthatthesubjectgoodswerenotbeingheldforsalebutweretobeusedforthefabricationofsteelcommunicationtowersinaccordancewithhiscontractswithIslacom,Smart,andInfocom.Inthesecontracts,hewascommissionedtobuild,outofthematerialsreceived,steelcommunicationtowers,nottosellthem.

Thetruenatureofatrustreceipttransactioncanbefoundinthe"whereas"clauseofPD115whichstatesthatatrust receipt is to be utilized "as a convenient business device to assist importers and merchants solve theirfinancing problems." Obviously, the State, in enacting the law, sought to find a way to assist importers andmerchantsintheirfinancinginordertoencouragecommerceinthePhilippines.

AsstressedinSamov.People,14atrustreceiptisconsideredasecuritytransactionintendedtoaidinfinancingimportersandretaildealerswhodonothavesufficientfundsorresourcestofinancetheimportationorpurchaseof merchandise, and who may not be able to acquire credit except through utilization, as collateral, of themerchandise imported or purchased. Similarly, American Jurisprudence demonstrates that trust receipttransactionsalwaysrefertoamethodof"financingimportationsorfinancingsales."15Theprinciple isofcoursenot limited in its application to financing importations, since the principle is equally applicable to domestictransactions.16 Regardless of whether the transaction is foreign or domestic, it is important to note that thetransactionsdiscussedinrelationtotrustreceiptsmainlyinvolvedsales.

Following the precept of the law, such transactions affect situationswherein the entruster,who owns or holdsabsolutetitleorsecurityinterestsoverspecifiedgoods,documentsorinstruments,releasesthesubjectgoodstothepossessionof theentrustee.The releaseofsuchgoods to theentrustee isconditioneduponhisexecutionand delivery to the entruster of a trust receipt wherein the former binds himself to hold the specific goods,documentsorinstrumentsintrustfortheentrusterandtosellorotherwisedisposeofthegoods,documentsorinstrumentswiththeobligationtoturnovertotheentrustertheproceedstotheextentoftheamountowingtotheentruster or the goods, documents or instruments themselves if they are unsold. Similarly, we held in StateInvestmentHousev.CA,etal.thattheentrusterisentitled"onlytotheproceedsderivedfromthesaleofgoodsreleasedunderatrustreceipttotheentrustee."17

Considering that the goods in this case were never intended for sale but for use in the fabrication of steelcommunicationtowers,thetrialcourterredinrulingthattheagreementisatrustreceipttransaction.

Inapplying theprovisionsofPD115, the trial court reliedon theMemorandumofAsiatrustsappraiser,Linga,whostatedthatthegoodshavebeensoldbypetitionerandthatonly3%ofthegoodsremainedinthewarehousewhereitwaspreviouslystored.Butforreasonsknownonlytothetrialcourt,thelatterdidnotgiveweighttothetestimonyofLingawhenhetestifiedthathemerelypresumedthatthegoodsweresold,viz:

COURT(tothewitness)

QSo,inotherwords,whenthegoodswerenotthereanymore.Youpresumedthat,thatisalreadysold?

AYes,yourHonor.

Undoubtedly,inhistestimony,Lingashowedthathehadnorealpersonalknowledgeorproofofthefactthatthegoods were indeed sold. He did not notify petitioner about the inspection nor did he talk to or inquire withpetitioner regarding thewhereabouts of the subject goods.Neither did he confirmwith petitioner if the subjectgoodswereinfactsold.Therefore,theMemorandumofLinga,whichwasbasedonlyonhispresumptionandnotanyactualpersonalknowledge,shouldnothavebeenusedbythetrialcourttoprovethatthegoodshaveinfactbeensold.Attheveryleast,itcouldonlyshowthatthegoodswerenotinthewarehouse.

Having established the inapplicability of PD 115, this Court finds that petitioners liability is only limited to thesatisfactionofhisobligation from the loan.The real intentof thepartieswassimply toenter intoasimple loanagreement.

Toemphasize,theTrustReceiptsLawwascreatedto"toaidinfinancingimportersandretaildealerswhodonothavesufficient fundsorresourcesto financethe importationorpurchaseofmerchandise,andwhomaynotbeabletoacquirecreditexceptthroughutilization,ascollateral,ofthemerchandiseimportedorpurchased."SinceAsiatrust knew that petitioner was neither an importer nor retail dealer, it should have known that the saidagreementcouldnotpossiblyapplytopetitioner.

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Moreover,thisCourtfindsthatpetitionerisnotliableforEstafabothundertheRPCandPD115.

GoodsWereNotReceivedinTrust

ThefirstelementofEstafaunderArt.315,par.1(b)oftheRPCrequiresthatthemoney,goodsorotherpersonalpropertymustbe receivedby theoffender in trustoroncommission,or foradministration,orunderanyotherobligationinvolvingthedutytomakedeliveryof,ortoreturnit.Butaswealreadydiscussed,thegoodsreceivedbypetitionerwerenotheldintrust.Theywerealsonotintendedforsaleandneitherdidpetitionerhavethedutytoreturnthem.Theywereonlyintendedforuseinthefabricationofsteelcommunicationtowers.

NoMisappropriationofGoodsorProceeds

ThesecondelementofEstafarequiresthattherebemisappropriationorconversionofsuchmoneyorpropertybytheoffender,ordenialonhispartofsuchreceipt.

ThisistheveryessenceofEstafaunderArt.315,par.1(b).Thewords"convert"and"misappropriated"connoteanactofusingordisposingofanotherspropertyas if itwereonesown,orofdevoting it toapurposeorusedifferent from that agreed upon. To misappropriate for ones own use includes not only conversion to onespersonaladvantage,butalsoeveryattempttodisposeofthepropertyofanotherwithoutaright.18

Petitionerarguesthattherewasnomisappropriationorconversiononhispart,becausehisliabilityfortheamountofthegoodssubjectofthetrustreceiptsarisesandbecomesdueonlyuponreceiptoftheproceedsofthesaleandnotpriortothereceiptofthefullpriceofthegoods.

Petitioner is correct. Thus, assuming arguendo that the provisions of PD 115 apply, petitioner is not liable forEstafabecauseSec.13ofPD115providesthatanentrusteeisonlyliableforEstafawhenhefails"toturnovertheproceedsof thesaleof thegoodsxxxcoveredbyatrustreceipt to theextentof theamountowingto theentrusterorasappearsinthetrustreceiptxxxinaccordancewiththetermsofthetrustreceipt."

ThetrustreceiptenteredintobetweenAsiatrustandpetitionerstates:

Incaseofsale I/weagreetohandtheproceedsassoonasreceived to theBANKtoapplyagainst therelativeacceptance (asdescribedabove)and for thepaymentof anyother indebtednessofmine/ours toASIATRUSTDEVELOPMENTBANK.19(Emphasissupplied.)

Clearly,petitionerwasonlyobligatedto turnover theproceedsassoonashereceivedpayment.However, theevidence reveals that petitioner experienced difficulties in collecting payments from his clients for thecommunication towers. Despite this fact, petitioner endeavored to pay his indebtedness to Asiatrust, whichpaymentsduringtheperiodfromSeptember1997toJuly1998totalapproximatelyPhP1,500,000.Thus,absentproofthattheproceedshavebeenactuallyandfullyreceivedbypetitioner,hisobligationtoturnoverthesametoAsiatrustneverarose.

What ismore, under theTrustReceiptAgreement itself, no date ofmaturitywas stipulated. The provision leftblankbyAsiatrustisasfollows:

x x xand in consideration thereof, I/weherebyagree tohold saidgoods inTrust for the saidBankandas itspropertywithlibertytosellthesameforitsaccountwithin________daysfromthedateofexecutionoftheTrustReceiptxxx20

In fact, Asiatrust purposely left the space designated for the date blank, an action which in ordinary bankingtransactionswouldbenotedashighlyirregular.Hence,theonlywayfortheobligationtomaturewasforAsiatrusttodemandfrompetitionertopaytheobligation,whichitneverdid.

Again,italsomakestheCourtwonderastowhyAsiatrustdecidedtoleavetheprovisionsforthematuritydatesintheTrustReceipt agreements in blank, since those dates are elemental part of the loan.But then, as can begleanedfromtherecordsofthiscase,AsiatrustalsoknewthatthecapacityofpetitionertopayforhisloanalsohingesuponthelattersreceivablesfromIslacom,Smart,andInfocomwherehehadongoingandfutureprojectsforfabricationandinstallationofsteelcommunicationtowersandnotfromthesaleofsaidgoods.Beingabank,Asiatrust acted inappropriately when it left such a sensitive bank instrument with a void circumstance on anelementarybut vital featureof eachandevery loan transaction, that is, thematuritydates.Without stating thematuritydates,itwasimpossibleforpetitionertodeterminewhentheloanwillbedue.

Moreover,Asiatrustwasawarethatpetitionerwasnotengagedinsellingthesubjectgoodsandthatpetitionerwillusethemforthefabricationandinstallationofcommunicationtowers.Beforegrantingpetitionerthecreditline,asaforementioned, Asiatrust conducted an investigation, which showed that petitioner fabricated and installedcommunication towers for wellknown communication companies to be installed at designated project sites. Infine,therewasnoabuseofconfidencetospeakofnorwasthereanyintentiontoconvertthesubjectgoodsfor

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another purpose, since petitioner did not withhold the fact that they were to be used to fabricate steelcommunication towers toAsiatrust.Hence,nomaliceorabuseof confidenceandmisappropriationoccurred inthisinstanceduetoAsiatrustsknowledgeofthefacts.

Furthermore,Asiatrustwas informedat the timeofpetitionersapplication for the loan that thepayment for theloanwouldbederivedfromthecollectiblesofhisclients.PetitionerinformedAsiatrustthathewashavingextremedifficultiesincollectingfromIslacomthefullcontractedpriceofthetowers.Thus,thedutyofpetitionertoremittheproceedsof thegoodshasnotyetarisensincehehasyet to receiveproceedsof thegoods.Again,petitionercould not be said to havemisappropriated or converted the proceeds of the transaction since he has not yetreceivedtheproceedsfromhisclient,Islacom.

ThisCourtalsotakesjudicialnoticeofthefactthatpetitionerhasfullypaidhisobligationtoAsiatrust,makingtheclaimfordamageandprejudiceofAsiatrustbaselessandunfounded.GiventhattheacceptanceofpaymentbyAsiatrustnecessarilyextinguishedpetitionersobligation,thenthereisnolongeranyobligationonpetitionerspartto speak of, thus precluding Asiatrust from claiming any damage. This is evidenced by Asiatrusts Affidavit ofDesistance21acknowledgingfullpaymentoftheloan.

ReasonableDoubtExists

Inthefinalanalysis,theprosecutionfailedtoprovebeyondreasonabledoubtthatpetitionerwasguiltyofEstafaunderArt.315,par.1(b)of theRPCinrelation to thepertinentprovisionofPD115or theTrustReceiptsLawthus,hisliabilityshouldonlybecivilinnature.

WhilepetitioneradmitstohiscivilliabilitytoAsiatrust,heneverthelessdoesnothavecriminalliability.Itisawellestablishedprinciplethatpersonispresumedinnocentuntilprovedguilty.Toovercomethepresumption,hisguiltmustbeshownbyproofbeyondreasonabledoubt.Thus,weheldinPeoplev.Mariano22thatwhiletheprincipledoes not connote absolute certainty, it means the degree of proof which produces moral certainty in anunprejudiced mind of the culpability of the accused. Such proof should convince and satisfy the reason andconscienceofthosewhoaretoactuponitthattheaccusedisinfactguilty.Theprosecution,inthisinstantcase,failedtorebuttheconstitutionalinnocenceofpetitionerandthusthelattershouldbeacquitted.

Atthispoint,therulingofthisCourtinColinaresv.CourtofAppealsisveryapt,thus:

Thepracticeofbanksofmakingborrowerssigntrustreceiptstofacilitatecollectionofloansandplacethemunderthe threats of criminal prosecution should they be unable to pay it may be unjust and inequitable, if notreprehensible.Suchagreementsarecontractsofadhesionwhichborrowershavenooptionbuttosignlesttheirloanbedisapproved.Theresorttothisschemeleavespoorandhaplessborrowersatthemercyofbanks,andispronetomisinterpretationxxx.23

Suchisthesituationinthiscase.

Asiatrusts intention becamemore evident when, onMarch 30, 2009, it, along with petitioner, filed their JointMotionforLeavetoFileandAdmitAttachedAffidavitofDesistancetoqualifytheAffidavitofDesistanceexecutedbyFelinoH.Esquivas,Jr.,attorneyinfactoftheBoardofAsiatrust,whichacknowledgedthefullpaymentoftheobligationofthepetitionerandthesuccessfulmediationbetweentheparties.

Fromtheforegoingconsiderations,wedeemitunnecessarytodiscussandruleupontheotherissuesraisedintheappeal.

WHEREFORE, theCADecisiondatedAugust29,2003affirming theRTCDecisiondatedMay29,2001 isSETASIDE.PetitionerANTHONYL.NGisherebyACQUITTEDofthechargeofviolationofArt.315,par.1(b)oftheRPCinrelationtothepertinentprovisionofPD115.

SOORDERED.

PRESBITEROJ.VELASCO,JR.AssociateJustice

WECONCUR:

RENATOC.CORONAAssociateJustice

Chairperson

ROBERTOA.ABAD*AssociateJustice

JOSEPORTUGALPEREZ**AssociateJustice

7/20/2015 G.R.No.173905


JOSECATRALMENDOZAAssociateJustice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case wasassignedtothewriteroftheopinionoftheCourtsDivision.

RENATOC.CORONAAssociateJusticeChairperson

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitution,andtheDivisionChairpersonsAttestation,IcertifythattheconclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNOChiefJustice

Footnotes

*DesignatedasadditionalmemberinlieuofAssociateJusticeDiosdadoM.Peralta,perraffledatedMarch29,2010.

** Designated as additionalmember in lieu of Associate Justice Antonio Eduardo B. Nachura, per raffledatedApril7,2010.

1PennedbyAssociateJusticeElviJohnS.Asuncionandconcurred inbyAssociateJusticesEugenioS.LabitoriaandLucasP.Bersamin(nowmemberoftheCourt).

2PennedbythenPresidingJudgeDiosdadoMadarangPeralta(nowmemberoftheCourt).

3Rollo,pp.6169.

4TrustReceiptAgreementsunderLetterofCreditNos.1963and1964.

5Rollo,pp.58&60.

6Exhibits"1"&"1A."

7CheckNos.5094129and5094133datedJanuary31,2000andMay31,2000,respectively.

8Abacav.CourtofAppeals,G.R.No.127162,June5,1998,290SCRA657.

9Barramedav.CourtofAppeals,G.R.No.96428,September2,1999,313SCRA477.

10Cosepv.People,G.R.No.110353,May21,1998,290SCRA378.

11Muraov.People,G.R.No.141485,June30,2005,462SCRA366.

12Salazarv.People,G.R.No.149472,August18,2004,437SCRA41,46.

13Peoplev.Cuevo,191Phil.622(1981).

14Nos.L1760304,May31,1962,5SCRA354.

1549A.L.R.282.

16Id.

17G.R.No.130365,July14,2000,335SCRA703.

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18Lucesv.Damole,G.R.No.150900,March14,2008,548SCRA373.

19Rollo,p.60.

20Id.at58.

21JointMotion forLeave toFileandAdmitAttachedAffidavitofDesistance,March30,2009,Annex"A"CorporateResolutionNo.4155(s.2009)"AuthorizedsignatoryfortheAffidavitofDesistancepertainingtotheSettlementAgreementfortheaccountofAnthonyNg/CapitolBlacksmith,"March26,2009.

22G.R.No.134309,November17,2000,345SCRA1.

23G.R.No.90828,September5,2000,339SCRA609.

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