G.R. No. 173905 - Ng vs. People

In early 1997, Anthony L. Ng (petitioner) engaged in building and fabricating telecommunication towers under the trade name "Capitol Blacksmith and Builders," applied for a credit line of PhP 3,000,000 with Asiatrust Development Bank, Inc. (Asiatrust).
Petitioner voluntarily submitted documents to Asiatrust: (a) contracts with Islacom, Smart, and Infocom; (b) a list of projects commissioned by these telecom companies to build steel towers; (c) collectible amounts from these companies.
Asiatrust approved the loan on May 30, 1997. Petitioner signed several documents including Credit Line Agreement, Application and Agreement for Irrevocable L/C, Trust Receipt Agreements, and Promissory Notes.
Promissory Notes matured on September 18, 1997; Trust Receipt Agreements did not indicate maturity dates as they were left blank by Asiatrust.

Petitioner received goods (chemicals and metal plates) from suppliers and used them to fabricate communication towers at project sites: Isabel, Leyte; Panabo, Davao; Tongonan.
Petitioner had difficulty collecting payments from his client Islacom and failed to pay his loan obligations to Asiatrust.
Asiatrust's representative conducted an ocular inspection and reported that approximately 97% of the goods covered by the Trust Receipts were “sold-out,” with only 3% remaining.
Asiatrust tried loan restructuring but negotiations failed.

On March 16, 1999, Asiatrust’s Remedial Account Officer filed a Complaint-Affidavit.
On September 12, 1999, the RTC filed Information for Estafa under Article 315, paragraph 1(b) of the Revised Penal Code (RPC) in relation to Section 3 of PD 115 (Trust Receipts Law), alleging petitioner misappropriated trust goods valued at PhP 4.5 million and failed to return or remit proceeds, causing damage of PhP 2,971,650.00.
Petitioner pleaded not guilty and trial ensued.

The loan was working capital; the Trust Receipt Agreements were preconditions for loan approval.
Agreements were contracts of adhesion prepared by Asiatrust.
Petitioner had outstanding receivables exceeding the loan amount, specifically from Islacom, with which Asiatrust was aware.
Petitioner had been making payments before the problems with Islacom surfaced.
During the case pendency, petitioner attempted to settle the loan, issuing postdated checks, some of which were paid.
Approximately PhP 1.8 million of the alleged debt was already paid.

On May 29, 2001, RTC found petitioner guilty of Estafa.
RTC ruled petitioner was bound by the Trust Receipt Agreements and failed to satisfy obligations.
Petitioner was ordered to pay Asiatrust PhP 2,971,650.00 plus legal interest and sentenced to prision mayor.

On August 29, 2003, CA affirmed RTC’s judgment.
CA ruled petitioner knew Asiatrust was the offended party despite a change in complainant’s name.
CA found failure to pay obligation due to nonremittance of proceeds or goods constituted Estafa regardless of good faith or intent to defraud.
Demand was considered implied upon inquiry about whereabouts of goods or proceeds.
Allegations of bias by RTC were dismissed for lack of proof.
Petitioner’s motion for reconsideration denied July 25, 2006.

Petitioner questioned whether the prosecution proved: misappropriation or conversion, prejudice to offended party, and demand on petitioner beyond reasonable doubt.
Raised issue of applicability of PD 115 on the transaction.

Whether the prosecution sufficiently proved the essential elements of Estafa under Article 315, paragraph 1(b) of the RPC in relation to PD 115 (Trust Receipts Law).
Whether the transaction between petitioner and Asiatrust is a trust receipt transaction governed by PD 115.
Whether petitioner received the goods in trust and was obligated either to return the goods if unsold or remit proceeds of sale.
Whether misappropriation or conversion of goods or proceeds was proven beyond reasonable doubt.
Whether the failure to demand payment affects the criminal liability of petitioner.