FIRST DIVISION
[G.R. No. 90828. September 5, 2000]
MELVIN COLINARES and LORDINO VELOSO, petitioners, vs.
HONORABLE COURT OF APPEALS, and THE PEOPLE OF THE PHILIPPINES, respondents.
D E C I S I O N
DAVIDE, JR., C.J.:
In 1979 Melvin Colinares and
Lordino Veloso (hereafter Petitioners) were contracted for a consideration of P40,000
by the Carmelite Sisters of Cagayan de Oro City to renovate the latter’s
convent at Camaman-an, Cagayan de Oro City.
On 30 October 1979, Petitioners
obtained 5,376 SF Solatone acoustical board 2’x4’x½”, 300 SF tanguile wood
tiles 12”x12”, 260 SF Marcelo economy tiles and 2 gallons UMYLIN cement
adhesive from CM Builders Centre for the construction project.[1] The following day, 31
October 1979, Petitioners applied for a commercial letter of credit[2] with the Philippine Banking
Corporation, Cagayan de Oro City branch (hereafter PBC) in favor of CM Builders
Centre. PBC approved the letter of
credit[3] for P22,389.80 to
cover the full invoice value of the goods.
Petitioners signed a pro-forma trust receipt[4] as security. The loan was due on 29 January 1980.
On 31 October 1979, PBC debited P6,720
from Petitioners’ marginal deposit as partial payment of the loan.[5]
On 7 May 1980, PBC wrote[6] to Petitioners demanding that the amount be paid within seven days from
notice. Instead of complying with PBC’s demand, Veloso confessed that they lost
P19,195.83 in the Carmelite Monastery Project and requested for a grace
period of until 15 June 1980 to settle the account.[7]
PBC sent a new demand letter[8]to Petitioners on 16 October
1980 and informed them that their outstanding balance as of 17 November 1979
was P20,824.40 exclusive of attorney’s fees of 25%.[9]
On 2 December 1980, Petitioners
proposed[10] that the terms of payment of the loan be modified as follows: P2,000
on or before 3 December 1980, and P1,000 per month starting 31 January
1980 until the account is fully paid.
Pending approval of the proposal, Petitioners paid P1,000 to PBC
on 4 December 1980,[11] and thereafter P500
on 11 February 1981,[12] 16 March 1981,[13] and 20 April 1981.[14] Concurrently with the
separate demand for attorney’s fees by PBC’s legal counsel, PBC continued to
demand payment of the balance.[15]
On 14 January 1983, Petitioners
were charged with the violation of P.D. No. 115 (Trust Receipts Law) in
relation to Article 315 of the Revised Penal Code in an Information which was
filed with Branch 18, Regional Trial Court of Cagayan de Oro City. The accusatory portion of the Information
reads:
That on or about October 31, 1979, in the City of Cagayan de Oro, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused entered into a trust receipt agreement with the Philippine Banking Corporation at Cagayan de Oro City wherein the accused, as entrustee, received from the entruster the following goods to wit:
Solatone Acoustical board
Tanguile Wood Tiles
Marcelo Cement Tiles
Umylin Cement Adhesive
with a total value of P22,389.80, with the obligation on the part of the accused-entrustee to hold the aforesaid items in trust for the entruster and/or to sell on cash basis or otherwise dispose of the said items and to turn over to the entruster the proceeds of the sale of said goods or if there be no sale to return said items to the entruster on or before January 29, 1980 but that the said accused after receipt of the goods, with intent to defraud and cause damage to the entruster, conspiring, confederating together and mutually helping one another, did then and there wilfully, unlawfully and feloniously fail and refuse to remit the proceeds of the sale of the goods to the entruster despite repeated demands but instead converted, misappropriated and misapplied the proceeds to their own personal use, benefit and gain, to the damage and prejudice of the Philippine Banking Corporation, in the aforesaid sum of P22,389.80, Philippine Currency.
Contrary to PD 115 in relation to Article 315 of the Revised Penal
Code.[16]
The case was docketed as Criminal
Case No. 1390.
During trial, petitioner Veloso
insisted that the transaction was a “clean loan” as per verbal guarantee of
Cayo Garcia Tuiza, PBC’s former manager.
He and petitioner Colinares signed the documents without reading the
fine print, only learning of the trust receipt implication much later. When he brought this to the attention of
PBC, Mr. Tuiza assured him that the trust receipt was a mere formality.[17]
On 7 July 1986, the trial court
promulgated its decision[18] convicting Petitioners of estafa for violating P.D. No. 115 in relation
to Article 315 of the Revised Penal Code and sentencing each of them to suffer
imprisonment of two years and one day of prision correccional as minimum
to six years and one day of prision mayor as maximum, and to solidarily
indemnify PBC the amount of P20,824.44, with legal interest from 29
January 1980, 12 % penalty charge per annum, 25% of the sums due as attorney’s
fees, and costs.
The trial court considered the
transaction between PBC and Petitioners as a trust receipt transaction under
Section 4, P.D. No. 115. It considered
Petitioners’ use of the goods in their Carmelite monastery project an act of
“disposing” as contemplated under Section 13, P.D. No. 115, and treated the
charge invoice[19] for goods issued by CM Builders Centre as a “document” within the
meaning of Section 3 thereof. It
concluded that the failure of Petitioners to turn over the amount they owed to
PBC constituted estafa.
Petitioners appealed from the
judgment to the Court of Appeals which was docketed as CA-G.R. CR No.
05408. Petitioners asserted therein
that the trial court erred in ruling that they violated the Trust Receipt Law,
and in holding them criminally liable therefor. In the alternative, they contend that at most they can only be
made civilly liable for payment of the loan.
In its decision[20] 6 March 1989, the Court of Appeals modified the judgment of the trial
court by increasing the penalty to six years and one day of prision mayor
as minimum to fourteen years eight months and one day of reclusion temporal
as maximum. It held that the
documentary evidence of the prosecution prevails over Veloso’s testimony,
discredited Petitioners’ claim that the documents they signed were in blank,
and disbelieved that they were coerced into signing them.
On 25 March 1989, Petitioners
filed a Motion for New Trial/Reconsideration[21] alleging that the “Disclosure Statement on Loan/Credit Transaction”[22] (hereafter Disclosure
Statement) signed by them and Tuiza was suppressed by PBC during the
trial. That document would have proved
that the transaction was indeed a loan as it bears a 14% interest as opposed to
the trust receipt which does not at all bear any interest. Petitioners further maintained that when PBC
allowed them to pay in installment, the agreement was novated and a
creditor-debtor relationship was created.
In its resolution[23]of 16 October 1989 the Court
of Appeals denied the Motion for New Trial/Reconsideration because the alleged
newly discovered evidence was actually forgotten evidence already in existence
during the trial, and would not alter the result of the case.
Hence, Petitioners filed with us
the petition in this case on 16 November 1989.
They raised the following issues:
I. WHETHER OR NOT THE DENIAL OF THE MOTION FOR NEW TRIAL ON THE GROUND OF NEWLY DISCOVERED EVIDENCE, NAMELY, “DISCLOSURE ON LOAN/CREDIT TRANSACTION,” WHICH IF INTRODUCED AND ADMITTED, WOULD CHANGE THE JUDGMENT, DOES NOT CONSTITUTE A DENIAL OF DUE PROCESS.
2. ASSUMING THERE WAS A VALID TRUST RECEIPT, WHETHER OR NOT THE ACCUSED WERE PROPERLY CHARGED, TRIED AND CONVICTED FOR VIOLATION OF SEC. 13, PD NO. 115 IN RELATION TO ARTICLE 315 PARAGRAPH (I) (B) NOTWITHSTANDING THE NOVATION OF THE SO-CALLED TRUST RECEIPT CONVERTING THE TRUSTOR-TRUSTEE RELATIONSHIP TO CREDITOR-DEBTOR SITUATION.
In its Comment of 22 January 1990,
the Office of the Solicitor General urged us to deny the petition for lack of
merit.
On 28 February 1990 Petitioners
filed a Motion to Dismiss the case on the ground that they had already fully
paid PBC on 2 February 1990 the amount of P70,000 for the balance of the
loan, including interest and other charges, as evidenced by the different
receipts issued by PBC,[24] and that the PBC executed
an Affidavit of desistance.[25]
We required the Solicitor General
to comment on the Motion to Dismiss.
In its Comment of 30 July 1990,
the Solicitor General opined that payment of the loan was akin to a voluntary
surrender or plea of guilty which merely serves to mitigate Petitioners’
culpability, but does not in any way extinguish their criminal liability.
In the Resolution of 13 August
1990, we gave due course to the Petition and required the parties to file their
respective memoranda.
The parties subsequently filed
their respective memoranda.
It was only on 18 May 1999 when
this case was assigned to the ponente.
Thereafter, we required the parties to move in the premises and for
Petitioners to manifest if they are still interested in the further prosecution
of this case and inform us of their present whereabouts and whether their bail
bonds are still valid.
Petitioners submitted their
Compliance.
The core issues raised in the
petition are the denial by the Court of Appeals of Petitioners’ Motion for New
Trial and the true nature of the contract between Petitioners and the PBC. As to the latter, Petitioners assert that it
was an ordinary loan, not a trust receipt agreement under the Trust Receipts
Law.
The grant or denial of a motion
for new trial rests upon the discretion of the judge. New trial may be granted if: (1) errors of law or irregularities
have been committed during the trial prejudicial to the substantial rights of
the accused; or (2) new and material evidence has been discovered which the
accused could not with reasonable diligence have discovered and produced at the
trial, and which, if introduced and admitted, would probably change the
judgment.[26]
For newly discovered evidence to
be a ground for new trial, such evidence must be (1) discovered after trial;
(2) could not have been discovered and produced at the trial even with the
exercise of reasonable diligence; and (3) material, not merely cumulative,
corroborative, or impeaching, and of such weight that, if admitted, would
probably change the judgment.[27] It is essential that the offering party exercised
reasonable diligence in seeking to locate the evidence before or during trial
but nonetheless failed to secure it.[28]
We find no indication in the
pleadings that the Disclosure Statement is a newly discovered evidence.
Petitioners could not have been
unaware that the two-page document exists.
The Disclosure Statement itself states, “NOTICE TO BORROWER: YOU ARE
ENTITLED TO A COPY OF THIS PAPER WHICH YOU SHALL SIGN.”[29] Assuming Petitioners’ copy was then unavailable,
they could have compelled its production in court,[30] which they never did. Petitioners have miserably failed to
establish the second requisite of the rule on newly discovered evidence.
Petitioners themselves admitted
that “they searched again their voluminous records, meticulously and patiently,
until they discovered this new and material evidence” only upon learning of the
Court of Appeals’ decision and after they were “shocked by the penalty
imposed.”[31] Clearly, the alleged newly
discovered evidence is mere forgotten evidence that jurisprudence excludes as a
ground for new trial.[32]
However, the second issue should
be resolved in favor of Petitioners.
Section 4, P.D. No. 115, the Trust
Receipts Law, defines a trust receipt transaction as any transaction by and
between a person referred to as the entruster, and another person referred to
as the entrustee, whereby the entruster who owns or holds absolute title or
security interest over certain specified goods, documents or instruments,
releases the same to the possession of the entrustee upon the latter’s
execution and delivery to the entruster of a signed document called a “trust
receipt” wherein the entrustee binds himself to hold the designated goods,
documents or instruments with the obligation to turn over to the entruster the
proceeds thereof to the extent of the amount owing to the entruster or as
appears in the trust receipt or the goods, documents or instruments themselves
if they are unsold or not otherwise disposed of, in accordance with the terms
and conditions specified in the trust receipt.
There are two possible situations
in a trust receipt transaction. The
first is covered by the provision which refers to money received under
the obligation involving the duty to deliver it (entregarla) to the owner of
the merchandise sold. The second is
covered by the provision which refers to merchandise received under the
obligation to “return” it (devolvera) to the owner.[33]
Failure of the entrustee to turn
over the proceeds of the sale of the goods, covered by the trust receipt to the
entruster or to return said goods if they were not disposed of in accordance
with the terms of the trust receipt shall be punishable as estafa under Article
315 (1) of the Revised Penal Code,[34] without need of proving intent
to defraud.
A thorough examination of the
facts obtaining in the case at bar reveals that the transaction intended by the
parties was a simple loan, not a trust receipt agreement.
Petitioners received the
merchandise from CM Builders Centre on 30 October 1979. On that day, ownership over the merchandise
was already transferred to Petitioners who were to use the materials for their
construction project. It was only a day
later, 31 October 1979, that they went to the bank to apply for a loan to pay
for the merchandise.
This situation belies what
normally obtains in a pure trust receipt transaction where goods are owned by
the bank and only released to the importer in trust subsequent to the grant of
the loan. The bank acquires a “security
interest” in the goods as holder of a security title for the advances it had
made to the entrustee.[35] The ownership of the
merchandise continues to be vested in the person who had advanced payment until
he has been paid in full, or if the merchandise has already been sold, the
proceeds of the sale should be turned over to him by the importer or by his
representative or successor in interest.[36] To secure that the bank
shall be paid, it takes full title to the goods at the very beginning and
continues to hold that title as his indispensable security until the goods are
sold and the vendee is called upon to pay for them; hence, the importer has
never owned the goods and is not able to deliver possession.[37] In a certain manner, trust
receipts partake of the nature of a conditional sale where the importer becomes
absolute owner of the imported merchandise as soon as he has paid its price.[38]
Trust receipt transactions are
intended to aid in financing importers and retail dealers who do not have
sufficient funds or resources to finance the importation or purchase of
merchandise, and who may not be able to acquire credit except through
utilization, as collateral, of the merchandise imported or purchased.[39]
The antecedent acts in a trust
receipt transaction consist of the application and approval of the letter of
credit, the making of the marginal deposit and the effective importation of
goods through the efforts of the importer.[40]
PBC attempted to cover up the true
delivery date of the merchandise, yet the trial court took notice even though
it failed to attach any significance to such fact in the judgment. Despite the Court of Appeals’ contrary view
that the goods were delivered to Petitioners previous to the execution of the
letter of credit and trust receipt, we find that the records of the case speak
volubly and this fact remains uncontroverted.
It is not uncommon for us to peruse through the transcript of the stenographic
notes of the proceedings to be satisfied that the records of the case do
support the conclusions of the trial court.[41] After such perusal Grego Mutia, PBC’s credit
investigator, admitted thus:
ATTY. CABANLET: (continuing)
Q Do you know if the goods subject matter of this letter of credit and trust receipt agreement were received by the accused?
A Yes, sir
Q Do you have evidence to show that these goods subject matter of this letter of credit and trust receipt were delivered to the accused?
A Yes, sir.
Q I am showing to you this charge invoice, are you referring to this document?
A Yes, sir.
xxx
Q What is the date of the charge invoice?
A October 31, 1979.
COURT:
Make it of record as appearing
in Exhibit D, the zero in 30 has been superimposed with numeral 1.[42]
During the cross and re-direct
examinations he also impliedly admitted that the transaction was indeed a
loan. Thus:
Q In short the amount stated in your Exhibit C, the trust receipt was a loan to the accused you admit that?
A Because in the bank the loan is considered part of the loan.
xxx
RE-DIRECT BY ATTY. CABANLET:
ATTY. CABANLET (to the witness)
Q What do you understand by loan when you were asked?
A Loan is a promise of a
borrower from the value received. The
borrower will pay the bank on a certain specified date with interest[43]
Such
statement is akin to an admission against interest binding upon PBC.
Petitioner Veloso’s claim that
they were made to believe that the transaction was a loan was also not denied
by PBC. He declared:
Q Testimony was given here that that was covered by trust receipt. In short it was a special kind of loan. What can you say as to that?
A I don’t think that would
be a trust receipt because we were made to understand by the manager who
encouraged us to avail of their facilities that they will be granting us a loan[44]
PBC could
have presented its former bank manager, Cayo Garcia Tuiza, who contracted with
Petitioners, to refute Veloso’s testimony, yet it only presented credit
investigator Grego Mutia. Nowhere from
Mutia’s testimony can it be gleaned that PBC represented to Petitioners that
the transaction they were entering into was not a pure loan but had trust
receipt implications.
The Trust Receipts Law does not
seek to enforce payment of the loan, rather it punishes the dishonesty and
abuse of confidence in the handling of money or goods to the prejudice of
another regardless of whether the latter is the owner.[45] Here, it is crystal clear that on the part of
Petitioners there was neither dishonesty nor abuse of confidence in the
handling of money to the prejudice of PBC.
Petitioners continually endeavored to meet their obligations, as shown
by several receipts issued by PBC acknowledging payment of the loan.
The Information charges
Petitioners with intent to defraud and misappropriating the money for their
personal use. The mala prohibita
nature of the alleged offense notwithstanding, intent as a state of mind was
not proved to be present in Petitioners’ situation. Petitioners employed no artifice in dealing with PBC and never
did they evade payment of their obligation nor attempt to abscond. Instead,
Petitioners sought favorable terms precisely to meet their obligation.
Also noteworthy is the fact that
Petitioners are not importers acquiring the goods for re-sale, contrary to the
express provision embodied in the trust receipt. They are contractors who obtained the fungible goods for their
construction project. At no time did
title over the construction materials pass to the bank, but directly to the
Petitioners from CM Builders Centre.
This impresses upon the trust receipt in question vagueness and
ambiguity, which should not be the basis for criminal prosecution in the event
of violation of its provisions.[46]
The practice of banks of making
borrowers sign trust receipts to facilitate collection of loans and place them
under the threats of criminal prosecution should they be unable to pay it may
be unjust and inequitable, if not reprehensible. Such agreements are contracts of adhesion which borrowers have no
option but to sign lest their loan be disapproved. The resort to this scheme leaves poor and hapless borrowers at
the mercy of banks, and is prone to misinterpretation, as had happened in this
case. Eventually, PBC showed its true
colors and admitted that it was only after collection of the money, as
manifested by its Affidavit of Desistance.
WHEREFORE, the challenged Decision of 6 March 1989 and the
Resolution of 16 October 1989 of the Court of Appeals in CA-GR. No. 05408 are
REVERSED and SET ASIDE.
Petitioners are hereby ACQUITTED of the crime charged, i.e., for
violation of P.D. No. 115 in relation to Article 315 of the Revised Penal Code.
No costs.
SO ORDERED.
Kapunan, and Pardo, JJ., concur.
Puno, J., no part.
Ynares-Santiago, J., on leave.
[1] Exhibit
“D,” Original Record (OR), 115.
[2] Exhibit
“A,” Id., 112.
[3] Exhibit
“B,” OR, 113.
[4] Exhibit
“C,” Id., 114.
[5] Exhibit
“8-C,” Id., 181.
[6]
Exhibit “4,” Id., 160.
[7] Exhibits
“3, I,” Id., 153.
[8] Exhibit “E,” Id., 116.
[9] Exhibit
“5,” Id., 161.
[10] Exhibit
“F,” Id., 117.
[11] Exhibit
“7,” Id., 167.
[12] Exhibit
“7-A,” Id., 168.
[13] Exhibit
“7-B,” Id., 169.
[14] Exhibit
“7-C,” Id., 170.
[15] Exhibit
“G,” Id., 118.
[16] OR,
33.
[17] TSN,
21 May 1986, 21-22, 30.
[18] Per
Judge Senen C. Peñaranda. Rollo 12-17.
[19] Exhibit
“D,” supra note 1.
[20] Annex
“A” of Petition, Rollo, 3-10. Per Imperial, J., J., with the
concurrence of Puno, R. and Francisco, C., JJ.
[21] Rollo,
27-39.
[22] Id.,
177-178.
[23] Id.,
45.
[24] Rollo,
127.
[25] Id.,
128.
[26] Section
2, Rule 121, Revised Rules of Criminal Procedure.
[27] See
People v. Excija, 258 SCRA 424, 443 [1996]; People v. Tirona,
300 SCRA 431, 440 [1998]; Villanueva v. People, G.R. No. 135098, 12
April 2000, 7.
[28] Tumang
v. Court of Appeals, et al., 172 SCRA 328, 334 [1989]. See
Garrido v. CA, et al., 236 SCRA 450, 456 [1994].
[29] Rollo,
178.
[30] People
v.Ducay, et al., 225 SCRA 1 [1993].
[31] Motion
for New Trial/Reconsideration; Rollo, 28.
[32] People
v. Hernando, et al., 108 SCRA 121 [1981]; People v. Ducay,
supra note 30; People v. Penones, 200 SCRA 624 [1991].
[33] People
v. Cuevo, 104 SCRA 312, 318 [1981].
[34] Section
13, P.D. No. 115.
[35] Vintola
v. IBAA, 150 SCRA 578, 583 [1987].
[36]
Prudential Bank v. NLRC, 251 SCRA 421 [1995], quoting National Bank v.
Vda. de Hijos de Angel Jose, 63 Phil. 814, 821 [1936].
[37] People
v. Yu Chai Ho, 53 Phil. 874 [1928], quoting In re: Dunlap Carpet Co., 207 Fed. 726.
[38] Prudential
Bank v. NLRC, supra note 36.
[39] Ceferina
Samo v. People, 115 Phil. 346, 349-350 [1962], citing 53 Am Jur. 961.
See also Prudential Bank v. NLRC, supra note 36.
[40] Sia
v. People, 121 SCRA 655 [1983].
[41] People
v. Vergara, et al., 270 SCRA 624 [1997].
[42] TSN,
18 December 1986, 10-11.
[43] Id.,
21-22.
[44] TSN,
21 May 1986, 3-4
[45] People
v. Nitafan, et al., 207 SCRA 726 [1992].
[46] Sia
v. People, supra note 40.