Title
Ng vs. People
Case
G.R. No. 173905
Decision Date
Apr 23, 2010
Petitioner acquitted of Estafa; transaction deemed a simple loan, not a trust receipt, as goods were used for fabrication, not sale. No misappropriation proven; civil liability extinguished by payment.

Case Summary (G.R. No. 173905)

Key Dates and Transactional Chronology (selected)

Early 1997: Petitioner applies for Php 3,000,000 credit line with Asiatrust.
May 30, 1997: Asiatrust approves loan; Trust Receipt Agreements and other loan documents signed (Trust Receipts left with blank maturity dates).
September 18, 1997: Promissory notes mature (but Trust Receipts had no maturity dates filled).
March 16, 1999: Complaint-Affidavit filed with City Prosecutor.
September 12, 1999: Information for Estafa filed with RTC. Trial court decision convicting petitioner: May 29, 2001 (affirmed by CA on August 29, 2003). Supreme Court decision ultimately set aside the conviction and acquitted petitioner.

Applicable Law and Elements of the Charged Offense

Criminal statute charged: Article 315(1)(b) of the Revised Penal Code (estafa by misappropriation or conversion of money/goods received in trust or on commission).
Special law invoked: Presidential Decree No. 115 (Trust Receipts Law), particularly Sections 3, 4, and 13, which define trust receipt transactions and provide that failure of an entrustee to turn over proceeds or return goods as required constitutes estafa under Article 315(1)(b).
Essential elements of estafa under Art. 315(1)(b): (1) receipt by the offender of money/goods in trust or on commission or under obligation to return/deliver; (2) misappropriation or conversion (or denial of receipt) by the offender; (3) prejudice to another (the offended party); and (4) demand by the offended party.

The Nature of the Transaction — Factual Core

Petitioner transparently disclosed to Asiatrust that the goods (chemicals and metal plates) were to be used as raw materials to fabricate telecommunication towers pursuant to contracts with Islacom, Smart, and Infocom. The materials were not intended for resale; the contracts commissioned fabrication and installation at specific project sites (Isabel, Leyte; Panabo, Davao; Tongonan). Asiatrust nevertheless required execution of Trust Receipt Agreements as part of the loan documentation, but left the Trust Receipt maturity dates blank.

Procedural Posture and Trial Court Findings

Petitioner pleaded not guilty; trial ensued. The RTC found petitioner guilty of estafa under Art. 315(1)(b) in relation to PD 115, reasoning that petitioner, as entrustee under the Trust Receipts, was obliged to hold goods in trust and remit proceeds or return goods on demand; the bank’s Statement of Account demonstrated outstanding balances that petitioner failed to pay. The RTC rejected petitioner’s defenses (contract-of-adhesion claim, his receivables from clients, prior payments) and sentenced him to an indeterminate term and ordered restitution of Php 2,971,650 plus interest.

Appellate Court Ruling and Reasoning

The Court of Appeals affirmed the RTC. It held that petitioner knew Asiatrust employees acted for the bank and thus could not claim ignorance of the bank as offended party; the Information sufficiently informed petitioner of the charge despite change in complainant’s name; and the transaction fell within PD 115 because petitioner executed trust receipt agreements and later failed to satisfy obligations. The CA further stated that estafa under PD 115 is malum prohibitum and that failure to deliver proceeds or goods constitutes the offense irrespective of intent; a mere inquiry as to whereabouts of goods could qualify as demand. The CA denied petitioner’s claims of bias and other procedural errors.

Issues Presented in the Petition for Review

The Supreme Court distilled the case to a single dispositive question: whether petitioner is criminally liable for estafa under Art. 315(1)(b) of the RPC in relation to PD 115. Subsidiary contentions included alleged failure of the prosecution to prove misappropriation/conversion, prejudice to the offended party, and that no demand was made (so the obligation was not yet due).

Legal Standard on Review of Factual Findings

While factual findings of trial courts are given great weight when affirmed by appellate courts, the Supreme Court reiterated recognized exceptions permitting reversal when findings rest on speculation, manifestly mistaken inferences, grave abuse of discretion, or misapprehension or absence of evidence. In criminal cases, the Court emphasized the constitutional principle of presumption of innocence and the necessity of proof beyond reasonable doubt.

Court’s Analysis — Whether PD 115 Applied

The Supreme Court concluded that the transaction was not a trust receipt transaction within the meaning of PD 115 but rather a simple loan for working capital. The Court emphasized the definitional core of PD 115: trust receipts are a financing device tied to the release of goods to an entrustee who is expected to sell or otherwise dispose of the goods and remit proceeds to the entruster or return unsold goods. Here, petitioner received goods to be used in fabrication (not sale) of telecommunication towers; the parties’ true intent was the use of materials in performance of fabrication contracts. The Court relied on the statutory “whereas” clause and prior jurisprudence recognizing that trust receipts principally concern financing importations or sales, not manufacturing-for-contract transactions.

Court’s Analysis — Evidentiary Deficiencies on Alleged Sale and Misappropriation

The Court found the trial court improperly relied on Asiatrust appraiser Linga’s memorandum and testimony to infer that goods had been sold: Linga expressly testified that he presumed the goods had been sold because they were absent from the warehouse, but he had no personal knowledge of sale, made no inquiry of petitioner, and did not notify petitioner of the inspection. The memorandum thus reflected presumption rather than proof. Given that the materials were not shown to have been sold and petitioner’s consistent explanation that payments for fabricated towers were still being collected from clients (not proceeds of resale), the prosecution failed to prove actual receipt of proceeds by petitioner that would trigger the duty to remit.

Court’s Analysis — Lack of Misappropriation, Absence of Demand/Maturity

Even assuming arguendo that PD 115 applied, the Court observed that the Trust Receipt itself obligated the entrustee to hand over proceeds “as soon as received.” The record showed petitioner encountered collection difficulties from Islacom, made payments to Asiatrust totaling about Php 1.5 million between Sept. 1997 and July 1998, and issued checks and attempted settlement during the case. Critically, the Trust Receipt left the maturity date blank — Asiatrust did not specify the time within which petitioner was to sell or remit proceeds. By leaving the maturity provision blank, the bank made it impossible to fix when the obligation matured;

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