TRUST RECEIPTS LAW PD 115

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G. R. No. 164904 October 19 !00"
#OSE ANTONIO U. GON$ALE$ Petitioner,
vs.
%ONG&ONG ' S%ANG%AI (AN&ING CORPORATION Respondent.
D ! I S I O N
C%ICO)NA$ARIO J.:
In this petition for revie" on certiorari
#
under Rule $% of the Rules of !ourt, as a&ended, petitioner 'ose (ntonio ).
*on+ale+ ,*on+ale+- see.s/ #- the reversal of the #0 'anuar1 233$ Decision,
2
and 4 (u5ust 233$ Resolution,
0
both of the
!ourt of (ppeals in !(6*.R. SP No. 7%$48/ and 2- the dismissal of the co&plaint
$
for violation of Presidential Decree No.
##%, other"ise .no"n as the 9Trust Receipts :a",9 in relation to (rticle 0#%,#-,b- of the Revised Penal !ode, ;led b1
respondent Hon5.on5 < Shan5hai =an.in5 !orporation ,HS=!- a5ainst hi& before the !it1 Prosecutor of Ma.ati and
doc.eted as I.S. No. 336*62$70$60%.
The !ourt of (ppeals, in its assailed decision and resolution, found no 5rave abuse of discretion on the part of the Secretar1
and the succeedin5 (ctin5 Secretar1, both of the Depart&ent of 'ustice ,DO'-, in their denial of petitioner *on+ale+>s
petition for revie" and &otion for reconsideration, respectivel1. !onse?uentl1, the appellate court a@ir&ed the #7 October
2332,
%
and #$ 'anuar1 2330
4
t"in resolutions of the DO', "hich in turn a@ir&ed the #0 Septe&ber 2333 Resolution,
7
of the
!it1 Prosecutor of Ma.ati, reco&&endin5 the ;lin5 of an Infor&ation for violation of Presidential Decree No. ##%, in
relation to (rticle 0#%,#-,b- of the Revised Penal !ode a5ainst petitioner *on+ale+.
The case ste&&ed fro& a co&plaint ;led b1 respondent HS=! a5ainst petitioner *on+ale+ for estafa, &ore particularl1, the
violation of Presidential Decree No. ##%, in relation to (rt. 0#%,#-,b- of the Revised Penal !ode.
The antecedents of the present petition are be1ond dispute. The1 areA
(t the ti&e of the incident subBect of the case at bar, petitioner *on+ale+ "as the !hair&an and !hief Cecutive O@icer of
Mondra5on :eisure and Resorts !orporation ,M:R!-. M:R! is the o"ner, developer and operator of Mi&osa :eisure
state
D
located at the !lar. Special cono&ic Eone ,!SE-, !lar. Field, Pa&pan5a. On # (u5ust #887, petitioner *on+ale+,
for and in behalf of M:R!, ac.no"led5ed receipt of various 5ol;n5 e?uip&ents and assorted Galt Disne1 ite&s, and si5ned
the correspondin5 t"o Trust Receipt a5ree&ents, i.e., Trust Receipt No. 33#63#40#3623%,
8
coverin5 the various 5ol;n5
e?uip&ents, and Trust Receipt No. 33#63#40#36234,
#3
coverin5 the assorted Galt Disne1 ite&s, both in favor of respondent
HS=!.
The due date for Trust Receipt No. 33#63#40#3623%, for the value of HHID%,%$3.33, "as on # Septe&ber #887, "hile that
of Trust Receipt No. 33#63#40#36234, for the value of HHI#$0,880.83, "as on 2D 'anuar1 #88D.
Ghen the due dates of subBect Trust Receipts ca&e and "ent "ithout "ord fro& M:R!, respondent HS=!, throu5h Paula
:. Felipe ,Felipe-, Vice6President of respondent HS=!>s !redit !ontrol Depart&ent, in a letter
##
dated 2D March 2333,
de&anded fro& M:R! the turnover of the proceeds of the sale of the assorted 5oods covered b1 the Trust Receipts or the
return of said 5oods. Despite de&and, ho"ever, M:R! failed to return the assorted 5oods or their value. !onse?uentl1,
Felipe, for respondent HS=!, ;led a cri&inal co&plaint for estafa,i.e., for violation of Presidential Decree No. ##%, the
9Trust Receipts :a",9 in relation to (rt. No. 0#%,#-,b- of the Revised Penal !ode a5ainst petitioner *on+ale+ before the
O@ice of the !it1 Prosecutor of Ma.ati, doc.eted as I.S. No. 336*62$70$60%. The co&plaint6a@idavit contained the follo"in5
alle5ationsA
$. On (u5ust #, #887, Mr. (ntonio ). *on+ale+, !hair&an and !hief Cecutive of Mondra5on, eCecuted in favor of the =an.
Trust Receipt No. 33#63#40#3623%, b1 virtue of "hich he ac.no"led5ed receipt fro& the =an. of 9,Sportin5 *oods- *olf
?uip&ents9 ,sic- "ith the value of HHID%,%$3.33. )nder this trust receipt, Mr. *on+ale+ bound hi&self to turn over to the
=an. the proceeds of the sale of the 5oods or to return the& in case of non6sale on 'anuar1 2D, #88D.
C C C C
Page 1 of 9
TRUST RECEIPTS LAW PD 115
%. On (u5ust #, #887, Mr. *on+ale+ eCecuted in favor of the =an. Trust Receipt No. 33#63#40#36234, b1 virtue of "hich he
ac.no"led5ed receipt fro& the =an. of 9(ssorted Disne1 Ite&s9 "ith the value of HHI#$0,880.83. )nder this trust receipt,
Mr. *on+ale+ bound hi&self to turn over to the =an. the proceeds of the sale of the 5oods or to return the& in case of non6
sale on Septe&ber #, #887.
C C C C
4. (ll the above&entioned trust receipts C C C eCecuted b1 the respondents ,sic- contain the follo"in5 provisionsA
J#. The Docu&ent and the 5oods andKor proceeds to "hich the1 relate ,9The *oods9- "ill be held for 1our LHS=!M bene;t
and the entrustee "ill receive the Docu&ents and ta.e deliver1 of the *ood eCclusivel1 for the purpose of sellin5 the *oods
unless 1ou LHS=!M shall direct other"ise.
2. The Docu&ents, the *oods and the proceeds of their sale are and "ill be held b1 the entrustee in trust for 1ou LHS=!M as
entruster and solel1 to 1our LHS=!M order and the entrustee shall pa1 the proceeds to 1ou LHS=!M, i&&ediatel1 on receipt
thereof or of each portion thereof, as the case &a1 be, "ithout set6o@ or an1 deduction. The records of the entrustee shall
properl1 record 1our LHS=!M interest in the *oods.
C C C C
#3. This Trust Receipt shall be 5overned and construed in all respects in accordance "ith P.D. ##% other"ise .no"n as
Trust Receipts :a".>
7. Despite repeated oral and "ritten de&ands upon respondent, respondent has not turned over to the =an. a sin5le
centavo of the proceeds of the sale of the above&entioned 5oods covered b1 the Trust Receipts, or returned an1 of the
5oods.
#2
In his defense, petitioner *on+ale+ countered thatA
2. (t the outset, it &ust be stressed that the transactions subBect of the instant !o&plaint are bet"een the co&plainant
ban. and Mondra5on :eisure and Resorts !orporation ,9M:R!9- and that the o@icers of the latter, includin5 respondent
herein, in all of their o@icial acts and transactions, are not actin5 in their o"n personal capacit1 but, rather, are &erel1
actin5 on behalf of the corporation and perfor&in5 a valid corporate act pursuant to a validl1 enacted resolution of the
=oard of Directors.
0. Moreover, it is clear that I cannot be held cri&inall1 responsible for alle5ed violation of the Trust Receipts subBect
hereof. The aforesaid transactions, "hile reportedl1 deno&inated as 9Trust Receipts9 "ere not reall1 intended b1 the
parties to be trust receipt transaction "ithin the purvie" of P.D. ##%. (t best, the1 are loan transactions, for "hich the
respondent cannot be held cri&inall1 liable.
C C C C
4. C C C respondent, "ho &erel1 perfor&ed a valid corporate act &a1 not be held personall1 and cri&inall1 liable therefore
,sic-, absent a clear sho"in5 of fault or ne5li5ence on his part C C C.
7. C C C it is re?uired that the person char5ed "ith estafa pursuant to a trust receipt transaction &ust be proved to have
&isappropriated, &isused or converted to his o"n personal use to the da&a5e of the entruster, the proceeds of the 5oods
covered b1 the trust receipts. Thus, &ere failure to pa1 the a&ounts covered b1 the trust receipts does not conclusivel1
constitute estafa as de;ned under P.D. ##% and the Revised Penal !ode.
D. C C C. LGMhile respondent &a1 have failed on behalf of M:R! ,"hich is actuall1 the debtor- to &a.e pa1&ents on the due
dates, such failure is neither attributable to respondent or due to his "ron5doin5 or fault but on account of circu&stances
concernin5 the corporation C C C.
C C C C
#0. C C C there "as a tacit a5ree&ent a&on5 the parties that defendant, bein5 a stable co&pan1 "ith 5ood credit standin5,
"ould be accorded lenienc1 and 5iven enou5h lee"a1 in the settle&ent of its obli5ations.
C C C C
Page 2 of 9
TRUST RECEIPTS LAW PD 115
#7. C C C the unla"ful closure of the !asino b1 !D! and P(*!OR, coupled "ith the (sian econo&ic crisis, severel1 a@ected
its abilit1 to pa1 its creditors, includin5 co&plainant ban. herein, "hich have an a55re5ate eCposure of about P%.0 =illion
in Mondra5on. These events rendered it i&possible for M:R! to dul1 co&pl1 "ith its ;nancial obli5ations. These events
barred plainti@ ban. fro& declarin5 M:R!>s obli5ation due and de&andable, and conse?uentl1 fro& declarin5 M:R! in
default. Thus, since M:R! is not in default, respondents herein cannot be char5ed for estafa as the obli5ations on the basis
of "hich the1 are bein5 char5ed are not 1et due and de&andable.
#0
Follo"in5 the re?uisite preli&inar1 investi5ation, in a Resolution dated #0 Septe&ber 2333, the !it1 Prosecutor found
probable cause to hold petitioner *on+ale+ liable for t"o counts of estafa, &ore speci;call1, the violation of Presidential
Decree No. ##%, in relation to (rt. 0#%,#-,b- of the Revised Penal !ode. The !it1 Prosecutor reco&&ended thatA
GHRFOR, pre&ises considered, it is respectfull1 reco&&ended that respondent 'ose (ntonio ). *on+ale+ be indicted
"ith t"o ,2- counts of Violation of P.D. ##% and that the attached Infor&ation for that purpose be approved for ;lin5 in
court.
#$
In ;ndin5 probable cause to prosecute petitioner *on+ale+ for the cri&e supposedl1 co&&itted, the !it1 Prosecutor held
thatA
(fter stud1, assess&ent and thorou5h evaluation of the evidence obtainin5 in this case at bar, the undersi5ned ;nds
probable cause to "arrant respondent>s indict&ent "ith the o@ense char5e ,sic- all the ele&ents of "hich are obtainin5
under the afore&entioned circu&stances. This is so because respondent ad&itted havin5 eCecuted the trust receipts
subBect &atter of the case in point. The defense raised b1 the respondent thou5h it appears to be &eritorious are ,sic-
&atters of defense best left for the court to consider and appreciate durin5 trial of the case. (s sho"n above, the failure of
the entrusteeKrespondent to account for the 5oods covered b1 the t"o ,2- Trust Receipts "hich he received after notice and
de&and caused hi& to be liable for t"o ,2- counts of violation of P.D. ##%.
#%
On 2$ October 2333, petitioner *on+ale+ appealed the fore5oin5 resolution of the !it1 Prosecutor to the DO' b1 &eans of a
petition for revie".
In a Resolution dated #7 October 2332, Honorable Hernando =. Pere+, then Secretar1 of the DO', denied said petition. In
a@ir&in5 the resolution of the !it1 Prosecutor of Ma.ati, the Secretar1 held thatA
The 5rava&en of violation of PD ##% is the failure to account, upon de&and, for fund or propert1 held in trust b1 virtue of a
trust receipt C C C. This failure, bein5 clearl1 present in the instant case, pri&a facie evidence of &isappropriation lies. (
fortiori, the char5es of dishonest1 and abuse of con;dence "ill hold.
#4
Further, the Secretar1 ruled thatA
The alle5ation of respondent that he cannot be &ade liable for the o@ense as he "as Bust perfor&in5 a valid corporate act is
untenable C C C. The respondent bein5 the !hair&an and !hief Cecutive O@icer and the person "ho si5ned the trust
receipts, there can be no doubt that there is no other person "ho can be considered as &ore responsible than hi&. He
appears to be the &ost responsible person conte&plated under the aforesaid provision of P.D. ##%.
Finall1, "e a5ree "ith the Prosecutor>s ;ndin5s that the other defenses raised b1 the respondent are evidentiar1 in nature
and best left to the sound appreciation of the court in the course of the trial.
#7
The dispositive of the resolution providesA
GHRFOR, the assailed resolution is hereb1 (FFIRMD and conse?uentl1, the petition is DNID.
#D
Subse?uentl1, on #$ 'anuar1 2330, Hon. Merceditas N. *utierre+, then (ctin5 Secretar1 of the DO', denied the &otion for
reconsideration of petitioner *on+ale+.
)ndaunted, petitioner *on+ale+ "ent to the !ourt of (ppeals via a Petition for Revie" under Rule $0
#8
of the Rules of
!ourt, as a&ended.
On #0 'anuar1 233$, the !ourt of (ppeals pro&ul5ated its Decision den1in5 petitioner *on+ale+>s recourse for lac. of
&erit.
The appellate court, not"ithstandin5 the procedural in;r&it1, as the petition ;led under Rule $0 of the Rules of !ourt, as
a&ended, "as the "ron5 &ode of appeal, too. co5ni+ance of and proceeded to resolve the petition based on substantive
Page 3 of 9
TRUST RECEIPTS LAW PD 115
5rounds. In holdin5 that no 5rave abuse of discretion a&ountin5 to lac. or eCcess of Burisdiction tainted the actions of the
Secretar1 as "ell as the (ctin5 Secretar1 of the DO' in den1in5 petitioner *on+ale+>s petition, the decision eCplained thatA
In the case at bar, it is decisivel1 clear that petitioner eCecuted the trust receipts in behalf of M:R! and that there "as a
failure to turn over the proceeds fro& the 5oods sold and the 5oods the&selves subBect of the trust receipts despite de&and
fro& the respondent ban.. Such failure to account or turn over the proceeds or to return the 5oods subBect of the trust
receipts 5ives rise to the cri&e punished under the Trust Receipts :a". L!itation o&itted.M Petitioner is ventilatin5 before
us the &erits of his causes or defenses, but this is not the occasion for the full and eChaustive displa1 of evidence. The
presence or absence of the ele&ents of the cri&e is evidentiar1 in nature and shall be passed upon after a full6blo"n trial
on the &erits. Petitioner>s defenses are &atters best left to the discretion of the court durin5 trial.
23
The fallo of the precedin5 decision readsA
GHRFOR, the petition is DNID for lac. of &erit.
2#
Petitioner>s &otion for reconsideration "as li.e"ise denied in a Resolution dated 4 (u5ust 233$.
Hence, the present petition ;led under Rule $% of the Rules of !ourt, as a&ended.
In the present petition, petitioner *on+ale+ funda&entall1 see.s to reverse the rulin5 of the !ourt of (ppeals on the
follo"in5 5roundsA
I.
TH HONOR(=: !O)RT OF (PP(:S !OMMITTD M(NIFST RROR IN NOT FINDIN* TH(T FOR ( V(:ID
INDI!TMNT )NDR PRSIDNTI(: D!R NO. ##% TO :I, TH S(ID :(G M)ST = R(D IN
!ON')N!TION GITH (RTI!: 0#%, P(R(*R(PH # ,=- OF TH RVISD PN(: !OD GHI!H RN)IRS TH(T
TH PRSON !H(R*D GITH ST(F( P)RS)(NT TO ( TR)ST R!IPT TR(NS(!TION M)ST = PROVD TO
H(V MIS(PPROPRI(TD, MIS)SD OR !ONVRTD TO HIS PRSON(: )S TH PRO!DS OF TH *OODS
!OVRD =O TH TR)ST R!IPTS TO TH D(M(* OF TH NTR)STR/ and
II.
NO PRO=(=: !()S PISTS TO G(RR(NT TH INDI!TMNT OF PTITIONR FOR VIO:(TION OF S!TION
#0 OF PRSIDNTI(: D!R ##%.
22
On the "hole, the basic issue presented before this !ourt in this petition is, 5iven the facts of the case, "hether or not
there is probable cause to hold petitioner *on+ale+ liable to stand trial for violation of Presidential Decree No. ##%, in
relation to (rt. 0#%,#-,b- of the Revised Penal !ode.
Petitioner *on+ale+ contends that the !ourt of (ppeals co&&itted &anifest error in rulin5, that, probable cause eCisted to
hold hi& liable to stand trial &erel1 on the basis of 9his ad&ission that he eCecuted the trust receipts subBect &atter of the
case belo" and his failure to account for the 5oods covered b1 the sa&e.9
20
He ar5ues that the !it1 Prosecutor of Ma.ati
and the DO' failed to appreciate t"o i&portant factsA #- that the real transaction that led to the present controvers1 "as in
fact a loan a5ree&ent/ and 2- that M:R! si&pl1 eCtended to =est Price PP, Inc., the o"ner and operator of Mi&osa Mart at
the !SE, its credit line "ith respondent HS=!, such that =est Price "as the actual debtor of respondent ban..
ParadoCicall1, he &aintains that 9the fact that ,he- held a hi5h position in M:R! "as not su@icient reason to char5e hi& for
alle5ed violation of trust receipts.9
2$
He insists further that he is not the person responsible for the o@ense alle5edl1
co&&itted because of the absence of 9a clear sho"in5 of fault or ne5li5ence on his part.9 (ccordin5 to petitioner *on+ale+,
9President ,sic- Decree No. ##% &ust be read in conBunction "ith (rticle 0#%, para5raph #,b- of the Revised Penal !ode C C
C under both C C C it is re?uired that the person char5ed "ith estafa pursuant to a trust receipt transaction &ust be proved
to have &isappropriated, &isused or converted to his o"n personal use the proceeds of the 5oods covered b1 the trust
receipts to the da&a5e of the entruster.9 Thus, petitioner concludes that 9&ere failure to pa1 the a&ounts covered b1 the
trust receipts does not conclusivel1 constitute estafa as de;ned under Presidential Decree No. ##% and (rticle 0#%,
para5raph #,b-.9
Respondent HS=!, on the other hand, contends that 9petitioner is cri&inall1 liable since he si5ned the trust receipts C C
C/9
2%
and, that, 9LfMraud is not necessar1 for conviction for violation of the Trust Receipts :a",9
24
the latter bein5 in the
nature of a malum prohibitum decree. On the issue of co&pan1 reverses, (sian currenc1 crisis and the closure of the
Mi&osa Re5enc1 !asino, respondent HS=! counters that 9LtMhe1 do not eCcuse petitioner for his failure to co&pl1 "ith his
obli5ations under the trust receipts,9
27
because unli.e 9&otor vehicles or parcels of land, "hich are fre?uentl1 purchased
on credit or on install&ent basis,9
2D
the 5oods covered b1 the t"o trust receipts, i.e., assorted Disne1 ite&s and various
Page 4 of 9
TRUST RECEIPTS LAW PD 115
5ol;n5 e?uip&ents, are usuall1 paid for in cash upon receipt b1 bu1ers/ and if not sold, the &erchandise should still be "ith
M:R!. Hence, there "as no reason for petitioner *on+ale+>s failure to co&pl1 "ith his obli5ation under the t"o Trust
Receipts Q to turn over the proceeds of the sale of the 5oods or to return the 5oods if the1 re&ained unsold.
Ge ;nd no &erit in the petition.
Ge a5ree "ith the !ourt of (ppeals that no 5rave abuse of discretion a&ountin5 to lac. or eCcess of Burisdiction &arred the
assailed resolutions of the DO'.
Herein, petitioner *on+ale+ ?uestions the ;ndin5 of probable cause b1 the !it1 Prosecutor to hold hi& liable to stand trial
for the cri&e co&plained of. Probable cause has been de;ned as the eCistence of such facts and circu&stances as "ould
eCcite the belief in a reasonable &ind, actin5 on the facts "ithin the .no"led5e of the prosecutor, that the person char5ed
"as 5uilt1 of the cri&e for "hich he "as prosecuted.
28
( ;ndin5 of probable cause &erel1 binds over the suspect to stand
trial. It is not a pronounce&ent of 5uilt.
03
To deter&ine the eCistence of probable cause, there is a need to conduct preli&inar1 investi5ation. ( preli&inar1
investi5ation is an in?uir1 to deter&ine "hether ,a- a cri&e has been co&&itted/ and ,b- "hether there is probable cause
to believe that the accused is 5uilt1 thereof. Such investi5ation is desi5ned to secure the ,accused- a5ainst hast1, &alicious
and oppressive prosecution, the conduct of "hich is eCecutive in nature.
0#
The eCecutive depart&ent of the 5overn&ent is accountable for the prosecution of cri&es, its principal obli5ation bein5 the
faithful eCecution of the la"s of the land. ( necessar1 co&ponent of the po"er to eCecute the la"s is the ri5ht to prosecute
their violators.
02
!orollar1 to this, the ri5ht to prosecute vests the prosecutor "ith a "ide ran5e of discretion, the discretion
of "hether, "hat and "ho& to char5e, the eCercise of "hich depends on a s&or5asbord of factors "hich are best
appreciated b1 prosecutors.
00
Havin5 said the fore5oin5, this !ourt consistentl1 adheres to the polic1 of non6interference in the conduct of preli&inar1
investi5ations, and to leave to the investi5atin5 prosecutor su@icient latitude of discretion in the deter&ination of "hat
constitutes su@icient evidence as "ill establish probable cause for the ;lin5 of an infor&ation a5ainst the supposed
o@ender,
0$
courts can onl1 revie" "hether or not the eCecutive deter&ination of probable cause "as done "ithout or in
eCcess of Burisdiction resultin5 fro& 5rave abuse of discretion. Thus, althou5h it is entirel1 possible that the investi5atin5
prosecutor &a1 erroneousl1 eCercise the discretion lod5ed in hi& b1 la", this does not render his act a&enable to
correction and annul&ent b1 the eCtraordinar1 re&ed1 of certiorari, absent an1 sho"in5 of 5rave abuse of discretion
a&ountin5 to eCcess of Burisdiction.
0%
(nd for courts of la" to 5rant the eCtraordinar1 "rit of certiorari, so as to Bustif1 the reversal of the ;ndin5 on the eCistence
of probable cause to ;le an infor&ation, the one see.in5 the "rit &ust be able to establish that the investi5atin5 prosecutor
eCercised his po"er in an arbitrar1 and despotic &anner, b1 reason of passion or personal hostilit1, and it &ust be patent
and 5ross as "ould a&ount to an evasion or to a unilateral refusal to perfor& the dut1 enBoined or to act in conte&plation
of la". *rave abuse of discretion is not enou5h.
04
Ccess of Burisdiction si5ni;es that he had Burisdiction over the case but
has transcended the sa&e or acted "ithout authorit1.
07
Tr1 as "e &i5ht, this !ourt cannot ;nd substantiation that the eCecutive deter&ination of probable cause "as done "ithout
or in eCcess of Burisdiction resultin5 fro& 5rave abuse of discretion, "hen the !it1 Prosecutor resolved to reco&&end the
;lin5 of the Infor&ation for t"o counts of violation of Presidential Decree No. ##% a5ainst petitioner *on+ale+. Si&ilarl1,
there is absolutel1 no sho"in5 that the DO', in the eCercise of its po"er to revie" on appeal the ;ndin5s of the !it1
Prosecutor of Ma.ati, acted in an arbitrar1 or despotic &anner that a&ounted to an eCcess or lac. of Burisdiction.
In the case at bar, petitioner *on+ale+ is char5ed b1 respondent HS=! "ith violatin5 Presidential Decree No. ##%. Section
$ of the 9Trust Receipts :a"9 de;nes a trust receipt transaction as Q
Section $. Ghat constitutes a trust receipts transaction. Q ( trust receipt transaction, "ithin the &eanin5 of this Decree, is
an1 transaction b1 and bet"een a person referred to in this Decree as the entruster, and another person referred to in this
Decree as entrustee, "hereb1 the entruster, "ho o"ns or holds absolute title or securit1 interests over certain speci;ed
5oods, docu&ents or instru&ents, releases the sa&e to the possession of the entrustee upon the latter>s eCecution and
deliver1 to the entruster of a si5ned docu&ent called a 9trust receipt9 "herein the entrustee binds hi&self to hold the
desi5nated 5oods, docu&ents or instru&ents in trust for the entruster and to sell or other"ise dispose of the 5oods,
docu&ents or instru&ents "ith the obli5ation to turn over to the entruster the proceeds thereof to the eCtent of the a&ount
o"in5 to the entruster or as appears in the trust receipt or the 5oods, docu&ents or instru&ents the&selves if the1 are
unsold or not other"ise disposed of, in accordance "ith the ter&s and conditions speci;ed in the trust receipt, or for other
purposes substantiall1 e?uivalent to an1 of the follo"in5A
Page 5 of 9
TRUST RECEIPTS LAW PD 115
#. In the case of 5oods or docu&entsA ,a- to sell the 5oods or procure their sale/ or ,b- to &anufacture or process
the 5oods "ith the purpose of ulti&ate saleA Provided, That, in the case of 5oods delivered under trust receipt for
the purpose of &anufacturin5 or processin5 before its ulti&ate sale, the entruster shall retain its title over the
5oods "hether in its ori5inal or processed for& until the entrustee has co&plied full1 "ith his obli5ation under the
trust receipt/ or ,c- to load, unload, ship or transship or other"ise deal "ith the& in a &anner preli&inar1 or
necessar1 to their sale/ or
2. In the case of instru&entsA ,a- to sell or procure their sale or eCchan5e/ or ,b- to deliver the& to a principal/ or
,c- to e@ect the consu&&ation of so&e transactions involvin5 deliver1 to a depositor1 or re5ister/ or ,d- to e@ect
their presentation, collection or rene"al.
The sale of 5ood, docu&ents or instru&ents b1 a person in the business of sellin5 5oods, docu&ents or instru&ents for
pro;t "ho, at the outset of transaction, has, as a5ainst the bu1er, 5eneral propert1 ri5hts in such 5oods, docu&ents or
instru&ents, or "ho sells the sa&e to the bu1er on credit, retainin5 title or other interest as securit1 for the pa1&ent of the
purchase price, does not constitute a trust receipt transaction and is outside the purvie" and covera5e of this Decree.
In 5eneral, a trust receipt transaction i&poses upon the entrustee the obli5ation to deliver to the entruster the price of the
sale, or if the &erchandise is not sold, to return the sa&e to the entruster. There are thus t"o obli5ations in a trust receipt
transactionA the ;rst, refers to &one1 received under the obli5ation involvin5 the dut1 to turn it over ,entre5arla- to the
o"ner of the &erchandise sold,
0D
"hile the second refers to &erchandise received under the obli5ation to 9return9 it
,devolvera- to the o"ner.
08
( violation of an1 of these underta.in5s constitutes estafa de;ned under (rt. 0#%,#-,b- of the
Revised Penal !ode, as provided b1 Sec. #0 of Presidential Decree ##%, vi+A
Section #0. Penalt1 clause. Q The failure of an entrustee to turn over the proceeds of the sale of the 5oods, docu&ents or
instru&ents covered b1 a trust receipt to the eCtent of the a&ount o"in5 to the entruster or as appears in the trust receipt
or to return said 5oods, docu&ents or instru&ents if the1 "ere not sold or disposed of in accordance "ith the ter&s of the
trust receipt shall constitute the cri&e of estafa, punishable under the provisions of (rticle Three Hundred and Fifteen,
para5raph one ,b- of (ct Nu&bered Three Thousand i5ht Hundred and ;fteen, as a&ended, other"ise .no"n as the
Revised Penal !ode. If the violation or o@ense is co&&itted b1 a corporation, partnership, association or other Buridical
entities, the penalt1 provided for in this Decree shall be i&posed upon the directors, o@icers, e&plo1ees or other o@icials or
persons therein responsible for the o@ense, "ithout preBudice to the civil liabilities arisin5 fro& the cri&inal o@ense.
(rticle 0#%,#-,b- of the Revised Penal !ode punishes estafa co&&itted as follo"sA
#. Gith unfaithfulness or abuse of con;dence, na&el1A
C C C C
,b- =1 &isappropriatin5 or convertin5, to the preBudice of another, &one1, 5oods, or an1 other personal propert1 received
b1 the o@ender in trust or on co&&ission, or for ad&inistration, or under an1 other obli5ation involvin5 the dut1 to &a.e
deliver1 of or to return the sa&e, even thou5h such obli5ation be totall1 or partiall1 5uaranteed b1 a bond/ or b1 den1in5
havin5 received such &one1, 5oods, or other propert1.
(s found in the co&plaint6a@idavit of respondent HS=!>s representative, petitioner *on+ale+ is char5ed "ith failin5 to turn
over 9to the =an. a sin5le centavo of the proceeds of the sale of the ,assorted- 5oods covered b1 the Trust Receipts, or C C
C9
$3
or to return an1 of the assorted 5oods. Fro& the evidence adduced before the !it1 Prosecutor of Ma.ati i.e., #- the t"o
Trust Receipts bearin5 the ac.no"led5&ent si5nature of petitioner *on+ale+/ 2- the o@icial docu&ents concernin5 the
transaction bet"een M:R! and respondent HS=!/ 0- the de&and letter of respondent HS=!/ and, si5ni;cantl1, $- the
counter6a@idavit of petitioner *on+ale+ containin5 his initial ad&ission that on behalf of M:R!, he entered into a trust
receipt transaction "ith respondent HS=! Q the investi5atin5 o@icer deter&ined that there eCisted probable cause to hold
petitioner *on+ale+ for trial for the cri&e char5ed. Ti&e and a5ain, this !ourt has stated that probable cause need not be
based on clear and convincin5 evidence of 5uilt, neither on evidence establishin5 5uilt be1ond reasonable doubt and,
de;nitel1, not on evidence establishin5 absolute certaint1 of 5uilt/ but it certainl1 de&ands &ore than bare suspicion and
can never be left to presupposition, conBecture, or even convincin5 lo5ic.
$#
In the present case, there bein5 su@icient
evidence to support the ;ndin5 of probable cause b1 the !it1 Prosecutor of Ma.ati, the sa&e cannot be said to have
resulted fro& bare suspicion, presupposition, conBecture or lo5ical deduction.
That petitioner *on+ale+ neither had the intent to defraud respondent HS=! nor personall1 &isusedK&isappropriated the
5oods subBect of the trust receipts is of no &o&ent. The o@ense punished under Presidential Decree No. ##% is in the
nature of &alu& prohibitu&. ( &ere failure to deliver the proceeds of the sale or the 5oods if not sold, constitutes a
cri&inal o@ense that causes preBudice not onl1 to another, but &ore to the public interest.
$2
This is a &atter of public polic1
as declared b1 the le5islative authorit1. Moreover, this !ourt alread1 held previousl1 that failure of the entrustee to turn
over the proceeds of the sale of the 5oods, covered b1 the trust receipt, to the entruster or to return said 5oods if the1 "ere
Page 6 of 9
TRUST RECEIPTS LAW PD 115
not disposed of in accordance "ith the ter&s of the trust receipt shall be punishable as estafa under (rt. 0#%,#-,b- of the
Revised Penal !ode "ithout need of provin5 intent to defraud.
$0
(s a last ditch e@ort to eCculpate hi&self fro& the o@ense char5ed, petitioner *on+ale+ posits that, 9the fact that ,he- held
a hi5h position in M:R! "as not su@icient reason to char5e hi& for alle5ed violation of trust receipts.9
$$
)nfortunatel1, it is
but a futile atte&pt. Thou5h petitioner *on+ale+ si5ned the Trust Receipts &erel1 as a corporate o@icer of M:R! and had
no ph1sical possession of the 5oods subBect of such receipts, he cannot avoid responsibilit1 for violation of Presidential
Decree No. ##% for t"o unpretentious reasonsA ;rst, that the last sentence of Section #0 of the 9Trust Receipts :a",9
eCplicitl1 i&poses the penalt1 provided therein upon 9directors, o@icers, e&plo1ees or other o@icials or persons therein
responsible for the o@ense, "ithout preBudice to the civil liabilities arisin5 fro& the cri&inal o@ense,9 of a corporation,
partnership, association or other Buridical entities found to have violated the obli5ation i&posed under the la". The
rationale for &a.in5 such o@icers and e&plo1ees responsible for the o@ense is that the1 are vested "ith the authorit1 and
responsibilit1 to devise &eans necessar1 to ensure co&pliance "ith the la" and, if the1 fail to do so, are held cri&inall1
accountable/ thus, the1 have a responsible share in the violations of the la".
$%
(nd second, a corporation or other Buridical
entit1 cannot be arrested and i&prisoned/ hence, cannot be penali+ed for a cri&e punishable b1 i&prison&ent.
$4
Petitioner *on+ale+>s alle5ation that =est Price PP, Inc. is the real part1 in the trust receipt transaction and his assertion
that the real transaction bet"een respondent HS=! and M:R! is a loan a5ree&ent, are &atters of defense best left to the
trial court>s deliberation and conte&plation after conductin5 the trial of the cri&inal case. To reiterate, a preli&inar1
investi5ation for the purpose of deter&inin5 the eCistence of probable cause is not part of the trial. ( full and eChaustive
presentation of the parties> evidence is not re?uired, but onl1 such as &a1 en5ender a "ell65rounded belief that an o@ense
has been co&&itted and that the accused is probabl1 5uilt1 thereof.
$7
In ;ne, the !ourt of (ppeals co&&itted no reversible error "hen it ruled that there "as no 5rave abuse of discretion on the
part of the Secretar1 and (ctin5 Secretar1 of the DO' in directin5 the ;lin5 of the Infor&ation a5ainst petitioner *on+ale+
for violation of Presidential Decree No. ##% in relation to (rticle 0#%,#-,b- of the Revised Penal !ode.
W%ERE*ORE, pre&ises considered, the instant petition is DNID for lac. of &erit. The assailed #0 'anuar1 233$
Decision and 4 (u5ust 233$ Resolution, both of the !ourt of (ppeals in !(6*.R. SP No. 7%$48 are hereb1 (FFIRMD. !osts
a5ainst petitioner.
SO ORDRD.
MINITA +. C%ICO)NA$ARIO
(ssociate 'ustice
G !ON!)RA
CONSUELO ,NARES)SANTIAGO
!hairperson
MA. ALICIA AUSTRIA)MARTINE$
(ssociate 'ustice
ANTONIO EDUARDO (. NAC%URA
(ssociate 'ustice
RU(EN T. RE,ES
(ssociate 'ustice
( T T S T ( T I O N
I attest that the conclusions in the above Decision "ere reached in consultation before the case "as assi5ned to the "riter
of the opinion of the !ourt>s Division.
CONSUELO ,NARES)SANTIAGO
(ssociate 'ustice
!hairperson, Third Division
! R T I F I ! ( T I O N
Page 7 of 9
TRUST RECEIPTS LAW PD 115
Pursuant to (rticle VIII, Section #0 of the !onstitution, and the Division !hair&an>s (ttestation, it is hereb1 certi;ed that
the conclusions in the above Decision "ere reached in consultation before the case "as assi5ned to the "riter of the
opinion of the !ourt>s Division.
RE,NATO S. PUNO
!hief 'ustice
*oot-ote.
#
Rollo, pp. ##60D.
2
Penned b1 !ourt of (ppeals (ssociate 'ustice Perlita '. Tria6Tirona "ith (ssociate 'ustices Portia (liRo6
Hor&achuelos and Rosalinda (suncion6Vicente concurrin5/ (nneC 9(9 of the Petition/ id. at 086$4.
0
(nneC 9=9 of the Petition/ id. at $D6$8.
$
(nneC 99 of the Petition/ id. at %06%$.
%
(nneC 9H9 of the Petition/ id. at 8268$.
4
(nneC 9M9 of the Petition/ id. at ###6##2.
7
(nneC 9I9 of the Petition/ id. at 4D648.
D
!o&posed of The Mi&osa *olf and !ountr1 !lub, the Holida1 Inn Resort !lar. Field, the Monte Vista Hotel and
the Mi&osa Re5enc1 !asino.
8
(nneC 9#9 of respondent HS=!>s !o&&ent/ rollo, p. #8%.
#3
(nneC 929 of respondent HS=!>s !o&&ent/ id. at #84.
##
(nneC 909 of respondent HS=!>s !o&&ent/ id. at #876#8D.
#2
(nneC 99 of the Petition/ id. at %06%$.
#0
Petitioner *on+ale+>s !ounter6(@idavit/ (nneC 9F9 of the Petition/ id. at %%6%7.
#$
Id. at 48.
#%
Id.
#4
Id. at 80.
#7
Id.
#D
Id.
#8
(PP(:S FROM TH !O)RT OF T(P (PP(:S (ND N)(SI6')DI!I(: (*N!IS TO TH !O)RT OF
(PP(:S.
23
Rollo, pp. $$6$%.
2#
Id.
22
Petition, pp. #$6#%/ id. at 2$62%.
Page 8 of 9
TRUST RECEIPTS LAW PD 115
20
Petitioner *on+ale+>s Me&orandu&, p. #$/ id. at 038.
2$
Petitioner *on+ale+>s Me&orandu&, p. #4/ id. at 0##.
2%
Respondent HS=!>s Me&orandu&, p. 7/ id. at 243.
24
Id.
27
Id. at 240.
2D
Id. at 24$.
28
R.R. Paredes v. !alilun5, *.R. No. #%43%%, % March 2337, %#7 S!R( 048, 08$.
03
Gebb v. Hon. De :eon, 0#7 Phil. 7%D, 7D8 ,#88%-.
0#
:i&, Sr. v. FeliC, *.R. No. 8$3%$6%7, #8 Februar1 #88#, #8$ S!R( 282, 03$.
02
R.R. Paredes v. !alilun5 , supra note 28 at 08$.
00
Gebb v. Hon. De :eon, supra note 03 at D33.
0$
(ndres v. !uevas, *.R. No. #%3D48, 8 'une 233%, $43 S!R( 0D, %2.
0%
D.M. !onsuBi, Inc. v. s5uerra, 02D Phil. ##4D, ##D% ,#884-.
04
R.R. Paredes v. !alilun5 , supra note 28 at 087.
07
Sari5u&ba v. Sandi5anba1an, *.R. Nos. #%$2086$#, #4 Februar1 233%, $%# S!R( %00, %$8.
0D
People v. !uevo, #8# Phil. 422, 403 ,#8D#-.
08
Id.
$3
Rollo, pp. %06%$.
$#
Hilosba1an, Inc. v. !OM:!, 0$% Phil. ##$#, ##7$ ,#887-.
$2
People v. Nitafan, *.R. Nos. D#%%8643, 4 (pril #882, 237 S!R( 724, 70#.
$0
!olinares v. !ourt of (ppeals, 08$ Phil. #34, #23 ,2333-.
$$
Rollo, pp. %%6%7.
$%
!hin5 v. Secretar1 of 'ustice, *.R. No. #4$0#7, 4 Februar1 2334, $D# S!R( 438, 40%, citin5 ).S. v. Par., $2# ).S.
4%D, 8%, S.!t. #830 ,#87%-.
$4
On5 v. !ourt of (ppeals, $$8 Phil. 48#, 73$ ,2330-.
$7
:edes&a v. !ourt of (ppeals, 0$$ Phil. 237, 224 ,#887-.
Page 9 of 9