G.R. No. 157781 - Lee vs. People

Case Summary (G.R. No. 157781)

Factual Background

Atoz Trading Corporation engaged in trade of animal feeds employed petitioner as sales or marketing manager and assigned him to handle the account of Ocean Feed Mills, a Bacolod-based purchaser; Ocean Feed Mills remitted payments by telegraphic transfer addressed variously to "Atoz Trading and/or Robert Lee" or to "Robert Lee" because, petitioner testified, it was difficult to claim checks at UCPB Greenhills; when petitioner ceased reporting for work in 1994, Atoz audited accounts and discovered an alleged unpaid Ocean Feed Mills balance of PHP 318,672.00; UCPB records showed telegraphic transfers credited or deposited to Savings Account No. 117-105532-0 maintained by petitioner.

Informations and Charges

At the instance of Atoz Trading Corporation, ten separate Informations were filed on September 27, 1994 in the RTC of Pasig City, docketed Criminal Case Nos. 107020 to 107029, charging petitioner, as Atoz’s marketing manager, with multiple counts of estafa by misappropriation or conversion under Article 315, par. 1(b) of the Revised Penal Code; the Informations alleged that petitioner received specified telegraphic transfers totaling various sums and failed to remit them to Atoz despite notices and demands, thereby misapplying and converting the funds to his own use; one case, No. 107023, was dismissed on the prosecution’s motion.

Trial Proceedings and Evidence

The prosecution presented witnesses including Johnny Jaotegan (Atoz president), Jeffrey Corneby (UCPB Greenhills teller), Maria Concepcion dela Cruz (Ocean Feed Mills corporate secretary), and Ellen Gusar (Atoz accounting clerk), who testified regarding Ocean Feed Mills’ remittances, bank practice of crediting payee accounts or issuing manager’s checks, petitioner’s UCPB account, petitioner’s retention of account statements and failure to return them, and Atoz’s subsidiary ledger showing an outstanding balance as of September 30, 1992; documentary evidence included bank documents and account summaries prepared by Ocean Feed Mills.

Demurrer and Defense Case

After the prosecution rested, Petitioner filed a Demurrer to Evidence contending lack of proof of prior formal demand; the trial court denied the demurrer on January 23, 1996; petitioner then testified in defense that he had informed Lu Hsui Nan (whom he identified as the real president of Atoz) of the arrangement and that Nan approved, that he withdrew credited remittances and delivered cash or manager’s checks to Elizabeth Ligo (Atoz cashier), and that Jaotegan’s alleged demand in August 1994 related only to a company car and cellular phone.

Rebuttal and Surrebuttal Testimony

On rebuttal the prosecution recalled Jaotegan and presented Lu Hsui Nan and Elizabeth Ligo, who denied receiving the contested remittances or prior knowledge of telegraphic transfers addressed to petitioner; Jaotegan testified that on August 12, 1994 he and his counsel, accompanied by policemen, went to petitioner’s residence and demanded remittance of the payments; on surrebuttal petitioner denied that Jaotegan had demanded the remitted funds and asserted that only company property was demanded.

Trial Court Judgment

The RTC convicted Petitioner on nine counts of estafa under Article 315, par. 1(b), rendered judgment on July 23, 1996, and imposed indeterminate sentences and orders to pay actual damages in the amounts alleged in each information; the court found misappropriation or conversion and credited the prosecution’s evidence, including petitioner’s admissions and bank records, and found no mitigating or aggravating circumstances.

Appeal to the Court of Appeals

Petitioner appealed to the Court of Appeals in CA-G.R. CR No. 19947, arguing principally that conviction for estafa through conversion required proof of prior formal demand and that the prosecution failed to prove misappropriation; the CA, in a Decision dated September 13, 2002 authored by Associate Justice Cancio C. Garcia, affirmed the RTC judgment and denied petitioner’s motion for reconsideration.

Issues Presented to the Supreme Court

In the Rule 45 petition, Petitioner framed two principal issues: (a) whether conviction for estafa through conversion under Article 315, par. 1(b) may stand in the absence of prior formal demand; and (b) whether the Court of Appeals’ Decision and Resolution were issued with grave abuse of discretion.

Petitioner’s Contentions

Petitioner asserted that prior demand is a sine qua non to filing a criminal complaint for estafa and that such demand must be formal and made before the complaint; he relied on commentary in Justice Ramon C. Aquino’s work and cited Court of Appeals decisions (People v. Pendon; People v. Bastiana) and Supreme Court dicta in Tubb v. People to argue that absence of proof of prior demand vitiated the estafa charges; he also contended that the prosecution’s proof of misappropriation was doubtful.

Respondents’ Contentions

The prosecution and Atoz Trading Corporation argued that demand is not an essential element of estafa under Article 315, par. 1(b) where misappropriation or conversion is otherwise proven; they maintained that Jaotegan’s August 12, 1994 demand at petitioner’s residence and petitioner’s admissions that telegraphic transfers were credited to his account and that he withdrew and turned over remittances to Atoz’s cashier constituted adequate proof of both misappropriation and demand, and they cited Tubb v. People, Barrameda v. Court of Appeals, Sy v. People, and other authorities to show that demand need not be formal and that failure to account upon demand is circumstantial evidence of misappropriation.

Legal Framework

The Court set out the elements of estafa with abuse of confidence under Article 315, par. 1(b) of the Revised Penal Code: (a) receipt of money or property in trust, commission, for administration, or under an obligation to deliver or return the same; (b) misappropriation or conversion by the offender or denial of receipt; and (c) prejudice to another; the Court reiterated that the words “convert” and “mis

Case Syllabus (G.R. No. 157781)

Parties and Procedural Posture

ROBERT CRISANTO D. LEE was the accused and former marketing/sales manager of ATOZ TRADING CORPORATION in ten Informations originally filed in the Regional Trial Court of Pasig City, Branch 159.
ATOZ TRADING CORPORATION filed ten separate Informations on September 27, 1994, docketed as Criminal Case Nos. 107020 to 107029, with one information (No. 107023) later dismissed on motion of the prosecution.
The accused was arraigned on February 20, 1995, and pleaded not guilty to the charges.
The trial court denied the accused's demurrer to evidence by an Order dated January 23, 1996.
The trial court convicted the accused on July 23, 1996 of nine counts of estafa under Art. 315, par. 1(b) of the Revised Penal Code and imposed indeterminate penalties and orders to pay actual damages as specified in the decision.
The accused appealed to the Court of Appeals which, in a Decision dated September 13, 2002, affirmed the trial court and denied the accused's motion for reconsideration.
The accused filed a petition for review under Rule 45, Rules of Court to the Supreme Court, which denied the petition for lack of merit and imposed costs against the petitioner.

Key Factual Allegations

ATOZ TRADING CORPORATION alleged that petitioner received telegraphic transfers from Ocean Feed Mills purportedly for Atoz but credited to or deposited in the petitioner’s UCPB Savings Account No. 117-105532-0.
The Informations charged that petitioner, entrusted to receive payments for Atoz, misapplied, misappropriated, and converted various telegraphic transfers to his own use to the prejudice of Atoz.
Atoz, upon petitioner’s cessation of work in 1994 and an audit, discovered an outstanding Ocean Feed Mills account of PHP 318,672.00 and received certification from Ocean Feed Mills that payments had been made and even overpaid.
The telegraphic transfers in question were described in the Informations as being payable to either “Atoz Trading and/or Robert Lee” or “Robert Lee.”

Issues Presented

The petitioner challenged whether conviction for estafa through conversion under Art. 315, par. 1(b) could stand in the absence of a prior formal demand to remit the funds.
The petitioner further asserted that the questioned Decision and Resolution were issued with grave abuse of discretion.

Trial Court Proceedings

The prosecution presented witnesses on its evidence-in-chief including Johnny Jaotegan, Jeffrey Corneby, Maria Concepcion dela Cruz, and Ellen Gusar.
The trial court received prosecution rebuttal and sur-rebuttal evidence, including testimony from Lu Hsui Nan and Elizabeth (Beth) Ligo, and further testimony from petitioner on sur-rebuttal.
The trial court found the petitioner guilty beyond reasonable doubt of nine counts of estafa and imposed varied indeterminate penalties ranging from prision correccional to reclusion temporal and ordered payment of actual damages as itemized in the decision.
The trial court explicitly rejected the petitioner’s demurrer to evidence for lack of factual and legal basis.

Evidence Presented

Johnny Jaotegan testified as Atoz’s president that he instructed demand for remittance and later personally, with counsel and policemen, went to petitioner’s residence on August 12, 1994 to demand turnover of funds and return of company property.