Case Summary (G.R. No. 191079)
Facts of the Case
Bank of Commerce, originally known as Boston Bank of the Philippines, provided an export packing loan of US$50,000 to Via Moda International, Inc., a domestic entity represented by Teresita S. Serrano, for the import of textile materials. The loan was secured via a Deed of Assignment over an Irrevocable Transferable Letter of Credit and a Promissory Note executed by Serrano. The trust receipt obligating Via Moda to manage the goods and remit proceeds from their sale was executed on April 21, 1994. Via Moda later shipped the goods to a consignee in New Jersey, USA, but the proceeds from the sale were not remitted to the bank as required by the trust receipt.
Procedural History
On November 16, 1994, Bank of Commerce demanded payment of the outstanding balance plus interest and penalties after Via Moda failed to remit the proceeds. The debt escalated, reaching P4,783,487.15 by December 15, 1998. Subsequently, Serrano was charged with estafa under Article 315(b) of the Revised Penal Code in relation to Presidential Decree No. 115. The Regional Trial Court found her guilty and sentenced her to imprisonment and ordered her to pay the bank.
Court of Appeals Decision
Serrano appealed to the Court of Appeals, which reversed the trial court's decision, finding that the essential element of misappropriation necessary for estafa was absent. The Court ruled that Serrano was not personally liable under the trust receipt because she executed it in representation of Via Moda and not in her personal capacity. The appellate court also deleted her civil liability, determining there was no evidence to pierce the corporate veil of Via Moda.
Issues for Resolution
The principal issues raised by the petitioner pertained to whether Serrano was jointly and severally liable with Via Moda under the Guarantee Clause of the Letter of Credit and whether the Court of Appeals erred in deleting Serrano's civil liability.
Petitioner’s Argument on Civil Liability
The petitioner argued that the Guarantee Clause made Serrano jointly and solidarily liable for the obligations under the Loan secured via the trust receipt. However, the Court noted that issues surrounding the liability based on the Guarantee Clause were not presented in the trial court or the appellate court and could not be raised for the first time in the current appeal due to the principles of fair play and due process.
Determination of Liability
The Court of Appeals concluded that Serrano could not be held civilly liable since she was not made personally liable in the trust receipt, which was a corporate obligation of Via Moda. The appellate court pointed out that the proceeds from the sale of the goods were applied by the bank to Via Moda’s other oblig
...continue readingCase Syllabus (G.R. No. 191079)
Background of the Case
- The case involves the Bank of Commerce (formerly Boston Bank of the Philippines) as the petitioner and Teresita S. Serrano as the respondent.
- Serrano is the General Manager and Treasurer of Via Moda International, Inc., a business engaged in importing and exporting textiles.
- Via Moda secured a US$50,000 export packing loan from the Bank of Commerce, guaranteed by a Deed of Assignment over an Irrevocable Transferable Letter of Credit.
- Serrano executed a promissory note for the loan, with a maturity date of July 14, 1994.
Loan and Trust Receipt Transactions
- On March 15, 1994, the Bank issued an Irrevocable Letter of Credit to Via Moda for US$56,735, facilitating the importation of textiles.
- Serrano executed a Trust Receipt to hold the imported goods in trust for the Bank and agreed to remit sale proceeds to the Bank.
- The trust receipt stipulated that any proceeds from the sale of the goods should be applied to the loan, with penalties for late payment.
Demand for Payment and Legal Proceedings
- The goods were shipped to a consignee in New Jersey, and proceeds were to be credited to the trust receipt; however, the Bank applied these proceeds to other obligations of Via Moda.
- The Bank sent a demand letter for payment on November 16, 1994, but by December 15, 1998, Via Moda's outstanding balance was P4,783,487.15.
- Serrano was charged with estafa under Art