Professional Documents
Culture Documents
Spouses
TONDA,
applied
for
and
were
granted
commercial
letters
of
credit
by
METROBANK
for
a
period
of
8
months
in
connection
with
the
importation
of
raw
textile
materials
to
be
used
in
the
manufacturing
of
garments.
The
TONDAS
acting
both
in
their
capacity
as
officers
of
Honey
Tree
Apparel
Corporation
(HTAC)
and
in
their
personal
capacities,
executed
eleven
11
trust
receipts
to
secure
the
release
of
the
raw
materials
to
HTAC.
TONDAS
failed
to
settle
their
obligations
under
the
trust
receipts
upon
maturity
even
after
repeated
demands.
Metrobank,
filed
with
the
Provincial
Prosecutor
of
Rizal
a
complaint/affidavit
against
the
TONDAS
for
violation
of
Trust
Receipts
Law
Assistant
Prosecutor
of
Rizal
recommended
that
the
complaint
be
dismissed
on
the
ground
that
the
complainants
had
failed
to
establish
the
existence
of
the
essential
elements
of
Estafa
as
charged.
Approved.
METROBANK
then
appealed
to
the
DOJ.
Undersecretary
Esguerra
reversed
the
findings
of
the
Provincial
Prosecutor
of
Rizal
and
ordered
the
latter
to
file
the
appropriate
information
against
the
TONDAS
as
charged
in
the
complaint.
The
Court
of
Appeals
granted
the
TONDAS'
petition
and
ordered
the
criminal
complaint
against
them
dismissed.
o
METROBANK
had
failed
to
show
a
prima
facie
case
that
the
TONDAS
violated
the
Trust
Receipts
Law
in
relation
to
Art.
315
(1)
(b)
of
the
Revised
Penal
Code
The relevant portions of the Court of Appeals decision are quoted as follows:
"HTAC
had
financial
problems
so
they
proposed
a
loan
restructuring
agreement
with
METROBANK
to
enable
them
to
finally
settle
all
outstanding
obligations
with
the
latter.
Trust
Receipts
-
The
new
management
and.
Mr.
Joaquin
G.
Tonda
will
pay
immediately
the
entire
principal
of
the
outstanding
Trust
Receipts
amounting
to
P2,803,097.14.
While
the
interest
accrued
up
to
September
13,
1991
amounting
to
P409,601.57
plus
the
additional
interest
shall
be
re-structured
together
with
item
no.
2
below.
A
joint
sharing
account
in
the
name
of
Joaquin
G.
Tonda
and
Wang
Tien
En
equal
to
Trust
Receipt
amount
of
1.8
Million
will
be
opened
at
Metrobank
Makati.
(emphasis
supplied)
It
would
appear
that
the
aforestated
amount
of
1.8
Million
was
erroneously
written
since
the
intention
of
the
petitioners
was
to
open
an
account
of
P2.8
Million
to
pay
the
entire
principal
of
the
outstanding
trust
receipts
account.
In
fact,
Joaquin
Tonda
and
Wang
Tien
En
deposited
four
different
checks
with
a
total
amount
of
2.8M
with
Metrobank.
It
was
settled
between
the
parties
that
the
amount
of
P2.8
Million
should
be
paid
to
cover
all
outstanding
obligations
under
the
trust
receipts
account.
Despite
the
inability
of
both
parties
to
reach
a
mutually
agreeable
loan
restructured
agreement,
the
amount
of
P2.8
Million
which
was
deposited
by
the
petitioners
appears
to
remain
intact
and
untouched.
Tan
Tiong
Tick
vs.
American
Apothecaries:
if
the
parties
fail
to
reach
an
agreement
regarding
the
restructuring
of
HTAC's
loan,
Metrobank
can
validly
apply
the
amount
deposited
by
the
petitioners
as
payment
of
the
principal
obligation
under
the
trust
receipts
account.
The
Court
ruled
that
the
amount
of
P2.8
Million
deposited
under
petitioners'
savings
account
with
Metrobank
was
indeed
intended
to
be
applied
as
payment
for
the
outstanding
obligations
of
HTAC
under
the
trust
receipts.
Metrobank
had
failed
to
show
a
prima
facie
case
that
the
petitioners
had
violated
the
Trust
Receipts
Law.
Issue
Whether
or
not
the
dismissal
by
the
Court
of
Appeals
of
the
charge
for
violation
of
the
Trust
Receipts
Law
in
relation
to
Art.
315(1)
(b)
of
the
Revised
Penal
Code
against
the
TONDAS
is
warranted
by
the
evidence
at
hand
and
The
CA
gravely
erred
in
reversing
the
Department
of
Justice
on
the
finding
of
probable
cause
to
hold
the
TONDAS
for
trial.
The
documentary
evidence
presented
during
the
preliminary
investigation
clearly
show
that
there
was
probable
cause
to
warrant
a
criminal
prosecution
for
violation
of
the
Trust
Receipts
Law.
The
Trust
Receipts
Law
declares
the
failure
to
turn
over
the
goods
or
the
proceeds
realized
from
the
sale
thereof,
as
a
criminal
offense
punishable
under
Article
315
(1)
(b)
of
the
Revised
Penal
Code.
The
law
is
violated
whenever
the
entrustee
or
the
person
to
whom
the
trust
receipts
were
issued
in
favor
of
fails
to:
(1)
return
the
goods
covered
by
the
trust
receipts;
or
(2)
return
the
proceeds
of
the
sale
of
the
said
goods.
The
foregoing
acts
constitute
estafa
punishable
under
Article
315
(1)
(b)
of
the
Revised
Penal
Code.
Given
that
various
trust
receipts
were
executed
by
the
TONDAS
and
that
as
entrustees,
they
did
not
return
the
proceeds
from
the
goods
sold
nor
the
goods
themselves
to
METROBANK,
there
is
no
dispute
that
that
the
TONDAS
failed
to
comply
with
the
obligations
under
the
trust
receipts
despite
several
demands
from
METROBANK.
[CAs
wrong
decision]
The
Court
of
Appeals
held
that:
(1)
the
TONDAS
opened
a
savings
account
of
P2.8
Million
to
pay
the
entire
principal
of
the
outstanding
trust
receipts
account;
(2)
the
TONDAS
obtained
from
a
METROBANK
officer
a
written
acknowledgement
of
receipt
of
checks
totaling
P2.8
Million
in
order
to
show
proof
of
compliance
with
the
loan
restructuring
proposal;
(3)
it
was
settled
between
the
parties
that
the
amount
of
2.8
Million
should
be
paid
to
cover
all
outstanding
obligations
under
the
trust
receipts
account;
(4)
the
money
remains
deposited
under
the
savings
account
of
petitioners
awaiting
a
final
agreement
with
METROBANK
regarding
the
loan
restructuring
arrangement;
and
that
(5)
there
is
no
evidence
suggesting
that
METROBANK
has
been
damaged
by
the
proposal
and
the
deposit
or
that
the
TONDAS
employed
fraud
and
deceit
in
their
dealings
with
the
bank.
o
(1)
the
amount
of
P2.8
million
was
not
directly
paid
to
METROBANK
to
settle
the
trust
receipt
accounts,
but
deposited
in
a
joint
account
of
Joaquin
G.
Tonda
and
a
certain
Wang
Tien
En.
o
The
parties
failed
to
agree
on
the
terms
of
the
loan
restructuring
agreement
as
the
offer
by
the
TONDAS
to
restructure
the
loan
was
followed
by
a
series
of
counter-offers
which
yielded
nothing.
It
is
axiomatic
that
acceptance
of
an
offer
must
be
unqualified
and
absolute
to
perfect
a
contract.
(2)
the
handwritten
note
by
the
METROBANK
officer
acknowledging
receipt
of
the
checks
amounting
to
P2.8
Million
made
no
reference
to
the
TONDAS'
trust
receipt
obligations,
and
we
cannot
presume
that
it
was
anything
more
than
an
ordinary
bank
deposit.
o
ERRONEOUS
Article
1288
of
the
Civil
Code
provides
that
"compensation
shall
not
be
proper
when
one
of
the
debts
consists
in
civil
liability
arising
from
a
penal
offense"
as
in
the
case
at
bar.
The
raison
d'etre
for
this
is
that,
"if
one
of
the
debts
consists
in
civil
liability
arising
from
a
penal
offense,
compensation
would
be
improper
and
inadvisable
because
the
satisfaction
of
such
obligation
is
imperative."[16]
(3)
reliance
on
the
negotiations
for
the
settlement
of
the
trust
receipts
obligations
between
the
TONDAS
and
METROBANK
is
simply
misplaced.
The
negotiations
pertain
and
affect
only
the
civil
aspect
of
the
case
but
does
not
preclude
prosecution
for
the
offense
already
committed.
It
has
been
held
that
"[a]ny
compromise
relating
to
the
civil
liability
arising
from
an
offense
does
not
automatically
terminate
the
criminal
proceeding
against
or
extinguish
the
criminal
liability
of
the
malefactor."
All
told,
the
P2.8
Million
deposit
could
not
be
considered
as
having
settled
the
trust
receipts
obligations
of
the
TONDAS
to
the
end
The
finding
that
there
was
no
fraud
and
deceit
is
likewise
misplaced
considering
that
the
offense
is
punished
as
a
malum
prohibitum
regardless
of
the
existence
of
intent
or
malice.
A
mere
failure
to
deliver
the
proceeds
of
the
sale
or
the
goods
if
not
sold,
constitutes
a
criminal
offense
that
causes
prejudice
not
only
to
another,
but
more
to
the
public
interest.
3.
Colinares
and
Veloso
vs.
CA
and
People
of
the
Philippines
-Keith
ito
muna
basahin
niyo.
Haba
ng
case
eh.
Emergency
Recit:
Colinares
and
Veloso
were
to
renovate
Carmelit
Sisters
Covenant
Bought
materials
from
CM
builders
for
the
construction
project
The
next
day,
applied
for
a
letter
of
Credit
with
Phil
Bank
Corp
(PBC)
in
favor
of
CM
Builders
C&V
supposedly
signed
a
Trust
Receipt
which
was
written
in
fine
print.
o Recognized
Bank
as
owner
of
the
goods,
and
that
C&V
holds
them
in
trust
while
the
loan
has
not
yet
been
paid.
In
case
of
default,
they
should
sell
such
goods
and
give
proceeds
to
the
bank
or
in
case
of
no
sale,
return
the
goods
to
the
bank.
C&V
defaulted
on
payments.
They
requested
that
their
payment
terms
be
restructured.
Granted
by
the
bank.
But
still
C&V
failed
to
pay
full
amount.
However,
PBC
filed
a
criminal
case
against
C&V.
Violation
of
PD
No.
115
in
relation
to
Article
315
Estafa.
Trial
Court
ruled
against
C&V
CA
affirmed.
C&V
contend
that
the
transaction
between
them
and
the
bank
was
only
a
loan
and
not
a
trust
receipt
transaction.
Issue:
is
it
a
loan
or
trust
receipt?
LOAN
It
was
a
loan.
CM
Builders
delivered
the
materials
to
C&V
and
hence
they
are
owners.
The
banks
were
not
the
owners
of
the
materials
and
hence
they
cannot
entrust
it.
What
militates
against
a
trust
receipt
transaction
was
that
C&V
applied
for
credit
accommodation
the
day
after
they
purchased
the
goods.
If
it
were
a
trust
receipt,
the
bank
should
have
been
the
one
who
purchased
the
goods
making
them
the
owners.
Subsequently,
they
will
entrust
its
possession
to
C&V
and
grant
a
loan
at
the
same
time.
Then
C&V
should
repay
the
loan
within
the
period
(which
would
make
C&V
owners
of
the
materials),
otherwise,
in
case
of
default,
return
the
goods
or
its
value.
(In
such
a
way,
it
can
be
considered
as
a
conditional
sale
made
by
the
bank)
Facts:
Melvin
Colinares
and
Lordino
Veloso
(C
&
V)
were
contracted
by
Carmelite
Sisters
of
Cagayan
de
Oro
City
to
renovate
their
covenant
at
Camaman-an,
CDO
C&V
obtained
materials
(acoustical
board,
wood
tiles,
economy
tiles,
cement
adhesive)
form
CM
Builders
Centre
for
the
construction
project.
The
next
day,
C&V
applied
for
a
commercial
letter
of
credit
with
Philippine
Bank
Corporation
(PBC)
as
payment
for
the
goods.
PBC
approved
the
letter
of
credit
for
P22,389.80
to
cover
the
full
invoice
value
of
the
goods.
Petitioners
signed
a
pro-forma
trust
receipt
as
security.
o C&V
were
to
1)
hold
the
materials
in
trust
for
PBC,
and/or
2)
to
sell
on
cash
basis
and
give
the
proceeds
to
the
bank
or
3)
if
there
is
no
sale,
to
return
such
items
on
Jan.
29,
1980
Loan
was
due
on
Jan.
29
1980.
So
C&V
still
had
the
option
to
pay
their
debt.
However,
In
case
of
default,
they
should
sell
the
materials
and
give
the
proceeds
to
PBC
or
if
there
is
no
sale,
to
turn
over
the
items
to
PBC.
On
31
October
1979,
C8&V
made
partial
payment
of
P6,720
On
May
7
1980,
PBC
demanded
from
C&V
payment
of
the
unpaid
balance.
Instead
of
complying
with
PBCs
demand,
Veloso
confessed
that
they
lostP19,195.83
in
the
Carmelite
Monastery
Project
and
requested
for
a
grace
period
of
until
15
June
1980
to
settle
the
account.
Granted.
New
demand
by
PBC
on
Oct
16
1980
->
balance
was
20,824.
Instead
of
paying,
C&V
proposed
to
restructure
their
payment.
o P2000
on
Dec
o 1,000
per
month
afterwards
PBC
continued
to
demand
payment
pending
approval
of
restructure.
C&V
were
able
to
make
partial
payments
Subsequently
in
1983,
C&V
were
charged
with
violation
of
PD
No.
115
(Trust
Receipts
Law)
in
relation
to
Article
315
of
the
RPC
(estafa).
INFORMATION:
o That
contrary
to
the
agreement
laid
out
in
the
Trust
Receipt,
C&V
refused
to
remit
the
proceeds
of
the
sale
to
the
Bank
and
instead
misappropriated
to
their
own
personal
use
to
the
prejudice
of
PBC.
At
the
trial,
o Veloso
insisted
that
the
transaction
was
a
clean
loan
per
verbal
guarantee
of
PBC
Bank
Manager
then.
o They
signed
the
documents
without
reading
the
fine
print,
only
learning
of
the
trust
receipt
implication
much
later.
o They
were
assured
that
the
trust
receipt
was
a
mere
formality.
Trial
court
ruled
conviction.
They
were
sentenced
to
2yrs
1
day
of
prision
correctional
as
minimum.
Maximum
was
6yrs
1
day
of
prision
mayor.
Order
to
indemnify
as
well
(20,824.44)
In
such
judgment,
Trial
Court
Considered:
o The
transaction
as
a
trust
receipt
under
Sec.
4
PD
No.
115
o The
Use
of
the
goods
in
the
monastery
an
act
of
disposing
contemplated
under
Sec.
13
PD
No
115
o The
charge
invoice
for
goods
issued
by
CM
Builders
Centre
as
document
within
the
meaning
of
SEC.
3
o Failure
of
petitioners
to
turn
over
the
amount
they
owed
to
PBC
constituted
estafa.
C&V
appealed.
No
trust
receipt
transaction.
At
most,
civil
liability
only.
CA
denied
and
modified
to
increase
their
penalty.
PM
6yrs
1
day
14yrs
8ms
1
day
RT
o Documentary
evidence
prevails
over
Velosos
testimony.
Motion
for
Reinvestigation
by
C&V.
Presented
new
evidence.
o Disclosure
on
Loan
Credit/Transaction.
Such
document
would
have
proved
that
the
transaction
was
a
simple
loan
because
it
bore
14%
interest
as
opposed
to
trust
receipts
which
did
not
bear
interests.
o Also,
since
they
were
allowed
by
PBC
to
pay
in
installments,
there
was
a
novation
which
created
a
creditor
debtor
relationship.
Denied
by
CA.
Evidence
does
not
alter
the
result
of
the
case.
Hence
this
petition.
C&V
contends
that
there
was
already
full
payment.
THEY
want
new
trial.
Sol
Gen
said
that
such
payment
was
akin
to
voluntary
surrender
or
plea
of
guilty
which
does
not
extinguish
their
criminal
liability
Issue:
Is
it
a
pure
loan
or
Trust
Receipt
Transaction?
LOAN
Ratio:
(Not
nego)
The
document
of
DISCLOSURE
OF
LOAN
and
CREDIT
TRANSACTION
is
not
newly
discovered
evidence.
No
need
for
new
trial.
The
evidence
could
have
been
presented
in
trial
which
C&V
did
not
present.
The
alleged
newly
discovered
evidence
is
mere
forgotten
evidence
that
jurisprudence
excludes
as
a
ground
for
new
trial.
NEGO
It
was
however
a
loan.
Section
4,
P.D.
No.
115,
the
Trust
Receipts
Law,
defines
a
trust
receipt
transaction
as
any
transaction
by
and
between
a
person
referred
to
as
the
entruster,
and
another
person
referred
to
as
the
entrustee,
whereby
the
entruster
who
owns
or
holds
absolute
title
or
security
interest
over
certain
specified
goods,
documents
or
instruments,
releases
the
same
to
the
possession
of
the
entrustee
upon
the
latters
execution
and
delivery
to
the
entruster
of
a
signed
document
called
a
trust
receipt
wherein
the
entrustee
binds
himself
to
hold
the
designated
goods,
documents
or
instruments
with
the
obligation
to
turn
over
to
the
entruster
the
proceeds
thereof
to
the
extent
of
the
amount
owing
to
the
entruster
or
as
appears
in
the
trust
receipt
or
the
goods,
documents
or
instruments
themselves
if
they
are
unsold
or
not
otherwise
disposed
of,
in
accordance
with
the
terms
and
conditions
specified
in
the
trust
receipt.
There
are
two
possible
situations
in
a
trust
receipt
transaction.
The
first
is
covered
by
the
provision
which
refers
to
money
received
under
the
obligation
involving
the
duty
to
deliver
it
(entregarla)
to
the
owner
of
the
merchandise
sold.
The
second
is
covered
by
the
provision
which
refers
to
merchandise
received
under
the
obligation
to
return
nd
it
(devolvera)
to
the
owner.
(2
situation
would
have
been
applied
if
proper.
But
no,
as
the
case
involved
a
loan.)
Failure
of
the
entrustee
to
turn
over
the
proceeds
of
the
sale
of
the
goods,
covered
by
the
trust
receipt
to
the
entruster
or
to
return
said
goods
if
they
were
not
disposed
of
in
accordance
with
the
terms
of
the
trust
receipt
shall
be
punishable
as
estafa
under
Article
315
(1)
of
the
Revised
Penal
Code,
without
need
of
proving
intent
to
defraud.
A
thorough
examination
of
the
facts
obtaining
in
the
case
at
bar
reveals
that
the
transaction
intended
by
the
parties
was
a
simple
loan,
not
a
trust
receipt
agreement.
Petitioners
received
the
merchandise
from
CM
Builders
Centre
on
30
October
1979.
On
that
day,
ownership
over
the
merchandise
was
already
transferred
to
Petitioners
who
were
to
use
the
materials
for
their
construction
project.
It
was
only
a
day
later,
31
October
1979,
that
they
went
to
the
bank
to
apply
for
a
loan
to
pay
for
the
merchandise.
This
situation
belies
what
normally
obtains
in
a
pure
trust
receipt
transaction
where
goods
are
owned
by
the
bank
and
only
released
to
the
importer
in
trust
subsequent
to
the
grant
of
the
loan.
The
bank
made
it
appear
that
they
owned
the
goods.
They
changed
the
date
of
purchase
of
goods
from
October
30
to
October
31
to
make
it
prior
to
the
granting
of
the
loan.
But
what
really
happened
was
C&V
bought
the
goods
and
next
day
they
applied
for
a
loan.
The
Information
charges
Petitioners
with
intent
to
defraud
and
misappropriating
the
money
for
their
personal
use.
The
mala
prohibita
nature
of
the
alleged
offense
notwithstanding,
intent
as
a
state
of
mind
was
not
proved
to