G.R. No. 80544 - Lee vs. Rodil

The petitioner, Rosemarie M. Lee, acted as the duly authorized representative of C.S. Lee Enterprises, Inc.
On or about July 26, 1982, the petitioner opened a letter of credit with the Philippine Bank of Communications for the amount of P154,711.97.
The letter of credit covered the purchase price for merchandise consisting of 23 cartons of Laboratory Culture Media.
Upon receipt of the necessary documents from the bank, the merchandise was delivered, and a trust receipt was immediately executed on the same day.
Under the trust receipt, the petitioner undertook the obligation to hold the merchandise in trust, sell the goods for cash on the bank’s account, and either account for the proceeds of the sale or return the unsold merchandise to the bank before October 24, 1982.

The information charged that the petitioner, once in possession of the merchandise, disposed of it and, despite repeated demands from the bank, failed to turn over the proceeds from the sale.
It was further alleged that by misappropriating or converting the proceeds for her own personal use, the petitioner defrauded the bank, thereby causing damage and prejudice in the exact amount of P154,711.97.
The facts charged center on the violation of the trust receipt agreement, specifically the failure to comply with its condition of turning over the sale proceeds or returning the goods if not sold.

The petitioner moved to quash the information, asserting that the mere violation of a trust receipt agreement does not constitute estafa.
She further contended that an express provision in Presidential Decree (P.D.) No. 115, which characterizes such violation as estafa, is unconstitutional.
The trial court denied the motion to quash and subsequently dismissed the motion for reconsideration, thereby upholding the constitutionality of P.D. No. 115.
The case was elevated to the Supreme Court for resolution on whether the violation of a trust receipt agreement gives rise to the crime of estafa.

P.D. No. 115, enacted on January 29, 1973, provides explicitly in Section 13 that failure to turn over the proceeds of the sale, or to return the merchandise not sold as stipulated in a trust receipt, constitutes the crime of estafa.
The petitioner cited earlier cases, such as People v. Cuevo and Sia v. People, arguing that violations under a trust receipt should only give rise to civil liability.
However, the facts in the current case occurred after the promulgation and effective enforcement of P.D. No. 115, making the statutory provision directly applicable.

Whether the violation of a trust receipt agreement—specifically, the failure to deliver the sale proceeds or return unsold goods—constitutes the crime of estafa under Article 315(1)(b) of the Revised Penal Code as expressly provided in P.D. No. 115.
Whether the application of Section 13 of P.D. No. 115, which imputes criminal liability for such violation, is constitutional in light of the petitioner’s contention that it conflicts with the constitutional provision against imprisonment for debt or non-payment of a poll tax.
Whether the established judicial interpretations and legislative intent support converting a trust receipt violation from a purely civil matter to a criminal offense.