Title
BDO Unibank, Inc. vs. Choa
Case
G.R. No. 237553
Decision Date
Jul 10, 2019
BDO sued Antonio Choa for violating the Trust Receipts Law, alleging failure to remit proceeds from goods. Courts ruled mutual debts couldn't compensate criminal liability, dismissed case due to lack of personal liability evidence.
insufficient evidence
acquittal
demurrer

Case Summary (G.R. No. 237553)

Factual Background

BDO Unibank, Inc. (then Equitable PCI Bank) extended goods to Camden Industries, Inc. under trust receipt agreements in 1999. Camden, through its president and general manager Antonio Choa, allegedly failed to remit proceeds of sale or return unsold goods. The bank alleged total prejudice of PHP 7,875,904.96 arising from eight trust receipt agreements and filed an Information accusing Choa of violating Presidential Decree No. 115.

Criminal Information and Trial

An Information for violation of Presidential Decree No. 115 was filed against Antonio Choa on February 28, 2008. Trial proceeded with the prosecution presenting two witnesses, Gerard K. Santiago and Froilan Carada, and with documentary evidence offered and later admitted by the trial court. The prosecution sought to prove that Choa, as Camden’s representative, misappropriated goods or sale proceeds contrary to the trust receipt obligations.

Prosecution’s Evidence

The prosecution formally offered documentary evidence consisting of Trust Receipt Agreement Nos. 006, 007, 008, 009, 024, 025, 046, and 047, corresponding demand letters and accounting records, judicial affidavits of prosecution witnesses, and merger documents establishing petitioner’s succession in interest. The eight trust receipt amounts, as reflected in the offered documents, aggregated to PHP 7,875,904.96.

Defendant’s Pleadings and Demurrer to Evidence

Antonio Choa filed a Motion for Leave to file a Demurrer to Evidence and an attached Demurrer to Evidence. He argued that Camden and the bank were mutually creditor and debtor such that their obligations were subject to legal compensation under the Civil Code, and that any bank claim was offset by a purported judgment in Camden’s favor in an attendant civil case. He further contended that the prosecution had not established criminal intent or personal liability.

Trial Court Orders and Rationale

The trial court granted the Demurrer to Evidence on November 26, 2014 and denied reconsideration on February 12, 2015. The court found that the bank and Camden had reciprocal obligations—BDO allegedly being a judgment debtor to Camden for approximately P90 million while Camden allegedly owed BDO approximately P20 million—and that these obligations could be legally compensated. The trial court also concluded the prosecution failed to prove Choa’s personal liability for PHP 7,875,904.96 or his criminal intent. The court characterized the controversy as subject to compensation, a civil remedy, and therefore granted the demurrer.

Court of Appeals Proceedings and Ruling

BDO Unibank, Inc. petitioned the Court of Appeals for certiorari under Rule 65, alleging grave abuse of discretion by the trial court in granting the demurrer and in procedural handling of the Motion for Leave. The Court of Appeals affirmed the trial court’s orders in its October 24, 2017 Decision and denied reconsideration in its February 13, 2018 Resolution. The appellate court held that the Motion for Leave was timely because the prosecution’s case was not finally closed until the trial court ruled on admissibility, that petitioner received adequate opportunity to be heard, and that any error was not grave, capricious, or whimsical.

Issues Presented to the Supreme Court

The Supreme Court distilled two principal issues: (1) whether BDO Unibank, Inc. had legal personality to file the certiorari petition before the Court of Appeals limited to the civil aspect of the case; and (2) whether the Court of Appeals erred in ruling that the trial court did not commit grave abuse of discretion in granting Antonio Choa’s Demurrer to Evidence.

Parties’ Contentions on Review

BDO Unibank, Inc. argued that it had standing to assail the trial court orders insofar as the civil liability was concerned, that the Motion for Leave and Demurrer to Evidence were untimely under Rule 119, Section 23, and that it was deprived of due process when the trial court resolved the Demurrer without first ruling on the Motion or allowing timely opposition. BDO further argued that the trial court wrongly allowed compensation and relied on a Pasig civil case judgment that had been reversed. Antonio Choa countered that petitioner improperly attempted to appeal the criminal aspect without the Solicitor General, that the Motion for Leave was timely because the prosecution had not rested its case insofar as admissibility remained pending, and that petitioner had ample opportunity to be heard and to challenge matters at trial. Choa also maintained that the prosecution failed to prove personal liability and elements required by Presidential Decree No. 115.

Legal Personality to File Certiorari

The Court reaffirmed the established rule that the authority to appeal the criminal aspect of a case resides with the State through the Office of the Solicitor General, citing Bautista v. Cuneta-Pangilinan and People v. Santiago. The Court held that a private complainant may, however, pursue special civil actions under Rule 65 to challenge trial court orders insofar as they affect the civil aspect of a criminal case. Because BDO Unibank, Inc. confined its arguments principally to civil liabilities and to the trial court’s handling of civil-relief-related matters, the Court found that petitioner had the legal personality to file the special civil action challenging the trial court Orders in respect of the civil aspect.

Timeliness of Motion for Leave and Demurrer to Evidence

Applying Rule 119, Section 23, the Court analyzed when the prosecution could be deemed to have rested its case. The prosecution’s Formal Offer included a reservation that it would rest only upon admission of the offered exhibits and sought leave to present additional evidence if any exhibit were excluded. The Court held that a prosecution rested only after the trial court ruled on the formal offer of documentary evidence. The September 12, 2014 Order admitted the documentary exhibits and directed the accused to comment, and notice to the accused triggered the running of the five-day non-extendible period to file a motion for leave. The Court concluded that Antonio Choa’s Motion for Leave and Demurrer, filed October 13, 2014, were filed beyond the five-day period and thus should have been denied outright as untimely.

Merits: Law on Trust Receipts and Elements of Offense

The Court reviewed Presidential Decree No. 115, explaining that a trust receipt transaction binds the entrustee to hold goods in trust and to turn over proceeds or return unsold goods. The Court reiterated doctrine from Gonzalez v. Hongkong & Shanghai Banking Corporation that failure to turn over proceeds or to return goods is punishable and that liability under PD 115 is malum prohibitum such that proof of intent to defraud is not necessary. A demurrer to evidence tests sufficiency of the prosecution’s showing under these statutory and doctrinal standards.

Supreme Court’s Eval

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