Case Summary (G.R. No. 166884)
Applicable Law
• 1987 Philippine Constitution (post-1990 decision)
• Revised Penal Code, Article 315(1)(b) (estafa)
• Presidential Decree No. 115 (Trust Receipts Law), Sections 4, 5(a), and 13
• Civil Code, Articles 1371 (contractual intent), 420 and 445 (public domain and accession)
• Administrative Code of 1987, Section 35 (Solicitor General’s powers)
Factual Background
- In October 1996, LBP and ACDC executed an Omnibus Credit Line Agreement providing for a Letters of Credit/Trust Receipts facility.
- ACDC, through its officers (respondents), signed ten undated trust receipts covering P52,344,096.32 for construction materials used in government-sponsored projects (e.g., Metro Rail Transit, Clark Centennial Exposition).
- Upon maturity, ACDC failed to remit payment or return materials. LBP’s demand letter (May 4, 1999) sought P66,425,924.39. Non-compliance prompted LBP’s estafa complaint (June 7, 1999) before the Makati City Prosecutor.
Procedural Posture
• Makati Assistant City Prosecutor (Sept. 30, 1999): Dismissed complaint for insufficient proof of receipt and execution dates, and trust receipts’ non-compliance with P.D. 115 formalities.
• Secretary of Justice (Aug. 1, 2002): Reversed dismissal; directed filing of estafa information, finding goods received, maturity dates present in related letters of credit, and no merit in respondents’ defense of nonreceipt of project proceeds.
• Court of Appeals (Jan. 20, 2005): On respondents’ petition for certiorari, reversed Secretary’s resolution, classifying transactions as mere loans—not trust receipts—citing Colinares v. CA and failure to prove misappropriation.
• Supreme Court (June 13, 2012): Denied LBP’s petition for review, affirming CA decision.
Issue
Whether respondents’ handling of construction-materials transactions constituted criminal estafa under Article 315(1)(b) R.P.C. in relation to Section 13, P.D. 115, or merely a civil loan obligation.
Definition of Trust Receipt Transaction (P.D. 115, Sec. 4–5)
• Entruster releases specified goods to an entrustee upon execution of a “trust receipt” binding the entrustee to hold goods in trust, sell or process them, and remit proceeds or return unsold goods per trust receipt terms.
• Section 5(a) mandates that trust receipts describe goods, invoice values, and maturity dates.
• Section 13 presumes fraudulent intent if the entrustee fails to remit proceeds or return goods.
Analysis: Nature of the Transactions
- Parties’ Intent and Industry Practice
– LBP authorized delivery of materials directly to construction sites, fully aware that goods would be incorporated into public infrastructure and irrecoverable in kind.
– Article 1371 Civil Code directs examination of contemporaneous acts to ascertain true intent; here, no intent to reclaim finished structures or raw materials. - Public-Domain and Accession Principles
– Processed materials for public projects become public immovable property (Civil Code Articles 420, 445), precluding reconveyance. - Distinction from Genuine Trust Receipts
– Unlike materials for resale or manufacturing (Colinares), construction materials lose separate identity and are under client control, making return impossible.
– When return of goods is known to be infeasible, the arrangement is a loan (Civil Code Article 1953), obligating payment of value only.
Absence of Misappropriation or Abuse of Confidence
• No evidence respondents diverted proceeds or unauthorized uses; LBP never disputed that ACDC’s clients had not yet paid for projects.
• Demand letter sought monetary payment exclusively; did not demand return of goods.
• Criminal estafa
Case Syllabus (G.R. No. 166884)
Parties
- Petitioner: Land Bank of the Philippines (LBP), a government financial institution and official depository of the Philippines.
- Respondents:
• Lamberto C. Perez, Nestor C. Kun, Ma. Estelita P. Angeles-Panlilio, and Napoleon O. Garcia, officers and representatives of Asian Construction and Development Corporation (ACDC), a Philippine-incorporated construction company.
Factual Background
- On October 29, 1996, LBP and ACDC entered into an Omnibus Credit Line Agreement, which included a Letters of Credit/Trust Receipts Facility.
- ACDC, through its officers (respondents), executed ten trust receipts totaling ₱52,344,096.32 to finance the purchase of construction materials.
- The trust receipts matured without ACDC returning the materials or their sales proceeds to LBP.
- On May 4, 1999, LBP sent a demand letter seeking payment of debts under the Trust Receipts Facility, amounting to ₱66,425,924.39, plus other obligations totaling ₱110,818,379.97.
Procedural History
- June 7, 1999: LBP filed an estafa complaint (Article 315, RPC, para. 1(b), in relation to Section 13, P.D. 115) before the Makati City Prosecutor.
- Respondents’ joint affidavit: argued the trust receipts lacked required descriptions (goods, invoice values, maturity dates) under P.D. 115, Section 5(a), and that no misappropriation occurred since ACDC had not received payment from its government project clients.
- September 30, 1999: Makati Assistant City Prosecutor Pineda dismissed the complaint for insufficiency of evidence—undated trust receipts and no proof of possession or execution dates.
- January 7, 2000: Motion for reconsideration denied.
- August 1, 2002: Secretary of Justice reversed and directed filing of informatio