Source: https://www.scribd.com/document/149475540/Metropolitan-Bank-v-Jimmy-Go
Timestamp: 2019-04-20 01:01:44+00:00

Document:
THIRD DIVISION G.R. No. 155647 November 23, 2007 METROPOLITAN BANK & TRUST COMPANY, Petitioner, vs.
By the terms of the trust receipts, BGB agreed to hold the goods in trust for Metrobank and, in case of sale of the goods, to hand the proceeds to the bank to be applied against the total obligation object of the trust receipts. On maturity dates of the trust receipts, because the goods remained unsold, BGB and Jimmy and Benjamin Go failed to satisfy their obligation. Metrobank filed three (3) separate complaints against BGB, for collection of sum of money equivalent to the value of the goods subject of the trust receipts. The cases were filed with the Makati Regional Trial Court and docketed as Civil Case Nos. 93-496, 93-509, and 93-910. Later, Metrobank instituted 11 criminal charges against Jimmy and Benjamin Go for violation of Presidential Decree No. 115 (Trust Receipts Law) before the Office of the City Prosecutor of Manila. After preliminary investigation, the Office of the City Prosecutor of Manila issued a Resolution 26 in I.S. Nos. 94D-09945-55 dated May 31, 1995 recommending the dismissal of the case, viz.: The liability of respondents is only civil in nature in the absence of commission and misappropriation. Respondents are liable excontractu for breach of the Letters of Credit – Trust Receipt. In the instant case, the goods subject of the trust receipts have not been sold, so there is (sic) no proceeds to deliver to the bank. Granting for the sake of argument that respondents failed to account for said goods, the failure is only a mere disputable presumption which has been overturned by the submission of an inventory showing that the goods are intact and in the warehouse in Bataan.
the Court of Appeals dismissed the petition for lack of merit. Metrobank moved to reconsider the dismissal. However. AS SETTLED JURISPRUDENCE HOLD. Metrobank claimed that the belated offer of Jimmy and Benjamin Go to return the goods was a mere afterthought in order to evade indictment and prosecution. 1999. Unfortunately. Metrobank appealed to the Department of Justice. The Issues The reasons given by Metrobank for the allowance of its petition are as follows: First Reason BOTH THE RESOLUTION AND THE DECISION OF THE COURT OF APPEALS DELIBERATELY IGNORED THE GLARING VIOLATION COMMITTED BY THE RESPONDENTS OF BOTH THE PROVISIONS OF THE SUBJECT TRUST RECEIPTS AND OF PRESIDENTIAL DECREE NO. and considering finally that the goods have not been sold. then Acting Secretary of Justice. On June 22. to return the merchandise subject of the 11 trust receipts. As already stated. . this petition. Metrobank urges this Court to determine whether or not Jimmy and Benjamin Go failed to turn over the proceeds of the sale of the goods or to return them. On September 5. stored. is tantamount to holding that a violation of the Trust Receipts Law is merely a crime against property and not against public order. 115. Second Reason BOTH THE RESOLUTION AND THE DECISION OF THE COURT OF APPEALS DELIBERATELY IGNORED THE FACT THAT THE OFFER MADE BY THE RESPONDENTS TO ALLEGEDLY RETURN THE SUBJECT MERCHANDISE IS A MERE AFTERTHOUGHT. First. Jimmy and Benjamin Go’s offer to deliver the merchandise subject of the trust receipts cannot exculpate them from criminal liability because they failed to offer to surrender and to actually surrender the goods upon maturity of the trust receipts and even when several demands were made upon them. and the Court of Appeals a misapprehension of the facts. and the Resolutions of the Office of the City Prosecutor of Manila and of the Secretary of Justice. 30 it contends that Section 13. Metrobank further argues that the dismissal by the Office of the City Prosecutor of Manila of the 11 criminal charges for violation of the Trust Receipts Law against Jimmy and Benjamin Go for want of probable cause. Ramon J. this Court does not find any cogent reason to reverse the assailed Decision and Resolution of the Court of Appeals. Metrobank filed a motion for reconsideration. and to pay their obligation under the letters of credit. reshipped.29 Petitioner Metrobank ascribed error to the Office of the City Prosecutor of Manila when it found that the liability of respondents Jimmy and Benjamin Go was only civil in nature.. 1995. respondents’ liability is only civil in nature. The issues raised in this petition are substantially factual. amounts to a violation of Section 13 of the Trust Receipts Law and warrants the prosecution of respondents for estafa under Article 315. i. considering further the fact that the goods were never processed. 115. only questions of law may be raised because this Court is not a trier of facts.31 the penal provision of the Trust Receipts Law. encompasses any act violative of an obligation covered by the trust receipt and is not limited to transactions in goods which are to be sold (retailed).e. rendered a Resolution 28 dismissing the appeal on two grounds: (1) the resolution issued by the City Fiscal is in accord with law and evidence. 34Metrobank wants to make this case an exception to the rule. but the motion was denied. Liwag. Hence. paragraph 1(b) 33 of the Revised Penal Code. but the same was denied for lack of merit in the Review Resolution27 dated October 25. grounded on the absence of conversion or misappropriation. Essentially. 223. as it attributes to the Office of the City Prosecutor of Manila. Metrobank went to the Court of Appeals via a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.Considering that the goods are still intact in the [respondents’] warehouse at the Bataan Export Processing Zone. contrary to prevailing jurisprudence. According to Metrobank. Third Reason BOTH THE RESOLUTION AND THE DECISION DELIBERATELY IGNORED THE FACT THAT A VIOLATION OF PRESIDENTIAL DECREE NO. Stated differently. This failure. if unsold. Citing jurisprudence. and processed as a component of a product ultimately sold. there is no adequate support for this imputation. It posits that a violation of the Trust Receipts Law can be committed by mere failure of the entrustee to discharge any of the obligations imposed upon him under Section 932 of the said law. ergo. it was Metrobank’s position that there was already a violation of the Trust Receipts Law committed by Jimmy and Benjamin Go even before they made their offer to return the merchandise to Metrobank in their pleadings before the Office of the City Prosecutor of Manila. the Secretary of Justice. there is no violation of [the] Presidential Decree. The Ruling of the Court After a judicious study of the records of this case. in accordance with the terms of the 11 trust receipts. Metrobank adds. considering that they were never sold. 2000. and (2) Metrobank failed to submit proof of service of a copy of the appeal to the prosecutor either by personal service or registered mail as required by Section 3 of Department Order No. IS AN OFFENSE AGAINST PUBLIC ORDER AND NOT MERELY AGAINST PROPERTY. In an appeal via certiorari.
the following elements must be established: (a) they received the subject goods in trust or under the obligation to sell the same and to remit the proceeds thereof to Metrobank. 1922 and 1939. and (d) demand was made on them by Metrobank for the remittance of the proceeds or the return of the unsold goods. We find this deficiency exceptionally revealing. paragraph 1(b) of the Revised Penal code. civil or criminal. Both offices similarly found that the failure of the respondents to account for the proceeds of the sale or of the goods only created a disputable presumption that either the proceeds or the goods themselves were converted or misappropriated. with liberty to sell them for cash only for the latter’s account. agreed to hold the goods (whether in their original. and the BANK/ENTRUSTER is forthwith authorized to file and prosecute the corresponding and appropriate action.37 Yet. Accordingly. processed or manufactured state. i. Jimmy and Benjamin Go. Metrobank wants us to interpret this as confirmation that Jimmy and Benjamin Go had sold all the other merchandise but deliberately failed to turn over their corresponding proceeds. that Jimmy and Benjamin Go exerted efforts to comply with their obligation to sell the merchandise and remit the proceeds thereof. and instead filed the 11 criminal complaints for alleged violation of the Trust Receipts Law to be prosecuted as estafa under Article 315. (b) they misappropriated or converted the goods and/or the proceeds of the sale. It is noteworthy that Jimmy and Benjamin Go processed the goods into textiles. which were not subject of the 11 criminal complaints filed by Metrobank. Second. the trust receipts uniformly contain the following provision: Failure on the part of the ENTRUSTEE to account to the BANK/ENTRUSTER for the goods/documents/instruments received in trust and/or for the proceeds of the sale thereof within thirty (30) days from demand made by the BANK/ENTRUSTER shall constitute an admission that the ENTRUSTEE has converted or misappropriated said goods/documents/instruments for the personal benefit of the ENTRUSTEE and to the detriment and prejudice of the BANK/ENTRUSTER. cannot prosper because the second (misappropriation/conversion) and the fourth (demand) elements of the offense are not present. or to return the goods if not sold. they both ruled that the liability of Jimmy and Benjamin Go was merely civil in nature. not one of the 11 criminal complaints was accompanied by a demand letter to show that Metrobank demanded the remittance of the proceeds of the sale of the goods or the return of goods. Jimmy and Benjamin Go reiterated the offer to return the goods in their answer to the civil complaints. even if we accommodate the petitioner’s plea to review the case’s factual milieu. the Court of Appeals likewise made a factual finding that Jimmy and Benjamin Go offered to return the goods even prior to the filing of the civil cases against them. to be sold for cash only. such that no proceeds thereof could be remitted to Metrobank. They further agreed that in case of sale of the goods. These findings appear to be supported by the evidence on record. if unsold. against the ENTRUSTEE. the Court sees this circumstance for what it simply and truly is. It also found that Metrobank failed to prove its demand for the return of the goods. This Court also observes that the same trust receipts provide that Metrobank has the option to take possession of the goods upon default of Jimmy and Benjamin Go on any of their obligations and to sell them. with the proceeds thereof to be applied to the principal obligation and also to the expenses to be incurred by Metrobank in selling the same. paragraph 1(b) of the Revised Penal Code. although the offer was not accepted because Metrobank appeared more interested in collecting the amount it advanced under the letters of credit. and that Jimmy and Benjamin Go could not deliver the proceeds of the sale of the merchandise to Metrobank because the goods remained unsold. or if the goods are used for the manufacture of finished products and are sold. they will turn over the proceeds to Metrobank to be applied against their total obligation under the trust receipts and for the payment of other debts to Metrobank. Thus. while the other party merely affixes his signature or his . as entrustees. Then.. (c) they performed such acts with abuse of confidence to the damage and prejudice of Metrobank. paragraph 1(b) of the Revised Penal Code. and that not all of the merchandise were sold such that they were able to remit only enough proceeds to fully settle their accounts under Letters of Credit-Trust Receipt Nos. Furthermore. The trust receipts subject of this case partake of the nature of contracts of adhesion. or otherwise. one party prepares the stipulations in the contract. pledge. it filed three (3) complaints to collect the value of the merchandise. Jimmy and Benjamin Go offered to return the merchandise to Metrobank even before these civil cases were filed. and irrespective of the fact that a different merchandise is used in completing such manufacture) in trust for Metrobank. but which the latter cannot modify. Metrobank did not accept the offer. but the presumption was overturned when the goods were offered to be inventoried and returned as they remained intact in the warehouse at the Bataan Export Processing Zone. 35 The Office of the City Prosecutor and the Secretary of Justice had identical findings that the element of misappropriation or conversion is absent. but without authority to make any other disposition whatsoever of the said goods or any part (or the proceeds) thereof by way of conditional sale. Again. the rest of the merchandise remained unsold in the warehouse at the Bataan Export Processing Zone. as its exclusive property. especially considering that the said trust receipts had different maturity dates.In order that respondents Jimmy and Benjamin Go may be validly prosecuted for estafa under Article 315. and the criminal complaints were dismissed for lack of probable cause. The prosecution for estafa under Article 315. However. Instead. This chain of events validates the finding of the Court of Appeals that Metrobank is not interested in the return of the goods but only in collecting the money it extended to the respondents.e. Declaring that the Office of the City Prosecutor did not commit grave abuse of discretion. we still have to agree with the findings of fact of the Office of the City Prosecutor and of the Court of Appeals. in relation to Section 13 of the Trust Receipts Law. Under the pro-forma trust receipts subject of this case. Unfortunately. 36 But Metrobank did not exercise this option. A contract of adhesion is defined as one in which one party imposes a ready-made form of contract which the other party may accept or reject.
the assailed Decision dated August 15. there is no sufficient evidence proffered by Metrobank that Jimmy and Benjamin Go had actually violated them. at 148. pp. Jimmy and Benjamin Go turned over the proceeds of the goods sold under the two letters of credit/trust receipts which were not subject of the criminal cases. They also made the offer to return the unsold goods covered by the eleven trust receipts even before the three civil cases were filed against them. 11 Id. Unfortunately. as collateral. 10 Id. It is a security agreement pursuant to which a bank acquires a "security interest" in the goods. and there can be no such thing as security interest that secures no obligation. Rollo. However. It secures a debt. giving no room for negotiation. Except for the bare allegation that it did so in the 11 criminal complaints. at 139. It is a document in which is expressed a security transaction where the lender. the fact of demand made by Metrobank was not established by competent evidence.R. . and who may not be able to acquire credit except through utilization. at 142. no such proof appears on record. at 72. being contracts of adhesion. at 158. 12-47. In fact.41 The malum prohibitum nature of the offense notwithstanding. 39 The subject trust receipts. More importantly. 40 There is no doubt as to the obligation of Jimmy and Benjamin Go to turn over the proceeds of the sale of the goods or to return the unsold goods. considering that full discretionary authority has been delegated to the latter in determining whether or not a criminal charge should be instituted. As to the other obligations under the trust receipts adapted from Section 9 of the Trust Receipts Law. While there was a stipulation of a presumptive admission on the part of Jimmy and Benjamin Go of misappropriation or conversion upon failure to account for the goods or for the proceeds of the sale thereof within 30 days from demand. at 82. and not having possession over the same since possession thereof remains in the borrower. p. 61544 are AFFIRMED. at 133. whether upon maturity of the trust receipts or upon demand by Metrobank. 44 With greater reason should we respect this finding. it is the complainant who has the burden to prove the elements of the crime which the respondents are probably guilty of. at 73. Indeed.38 In this case. the trust receipts were prepared solely by Metrobank with Jimmy and Benjamin Go having no choice but to adhere entirely to their provisions. rollo. SP No. whether the latter is the owner. 42 In the prosecution of criminal cases. 6 Id. A strict construction of the provisions of the contracts of adhesion dictates that the reckoning point should be the demand made by Metrobank. with an agreement to pay all or part of the proceeds of the sale to the lender. 13 Id. SO ORDERED. What the law punishes is the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another. the petition is DENIED for lack of merit. Id. Metrobank failed to discharge this burden. at 76. of the merchandise imported or purchased. this Court must not interfere in its findings. 8 Id. But should there be ambiguities therein. at 151. the trust receipts stipulated that the goods subject thereof were the exclusive property of Metrobank. at 85. the party that prepared them. which will authorize Metrobank to pursue legal remedies in court. 2002. 71. Footnotes 1 2 3 Petition dated December 1. 2002 and the Resolution dated October 15. the unsold goods remained intact. clear of the lien. 14 Id. 12 Id. no letter of demand accompanied all of the criminal complaints. there is neither error nor grave abuse of discretion which can be attributed to the Office of the City Prosecutor of Manila when it dismissed the criminal complaints for lack of probable cause. A trust receipt is considered a security transaction designed to provide financial assistance to importers and retail dealers who do not have sufficient funds or resources to finance the importation or purchase of merchandise.43 Obviously. 7 Id. The offer was reiterated in their answer. as it had been uniformly affirmed not only by the reviewing prosecutor but also by the Secretary of Justice and by the Court of Appeals. contrary to the essence of a trust receipt. lends his money to the borrower on security of the goods which the borrower is privileged to sell."adhesion" thereto. at 130. In the absence of grave abuse of discretion on the part of the Office of the City Prosecutor of Manila. 5 Id. 4 Id. As already discussed above. such ambiguities are to be strictly construed against Metrobank. 9 Id. contrary to the claim of Metrobank that they had misappropriated or converted the same. Accordingly. 2002 of the Court of Appeals in CA-G. having no prior title to the goods on which the lien is to be constituted. the intent to misuse or misappropriate the goods or their proceeds on the part of Jimmy and Benjamin Go should have been proved. are not per se invalid and inefficacious. and resulting in deprivation of the latter of the opportunity to bargain on equal footing. an ambiguity exists as to when this obligation arises. WHEREFORE.
588. or other casualties. No. (Emphasis supplied. or other property. (2) receive the proceeds in trust for the entruster and turn over the same to the entruster to the extent of the amount owing to the entruster or as appears on the trust receipt. partnership. Serrano. at 121. at 96. or instruments in the event of non-sale or upon demand of the entruster. even though such obligation be totally or partially guaranteed by a bond. 156966. 29 Id. 528-529 (2003). Inc. 17 Id. 21 Id. at 27-28. Madrigal Wan Hai Lines Corporation. 44 Serapio v. 2005. at 91. at 121. employees or other officials or persons therein responsible for the offense. 42 Colinares v. People. G. February 16. 82495. Tonda. association or other juridical entities. 26 Id. 123 (2000). 35 Ching v. Id. 315. (5) return the goods. Court of Appeals. at 102. at 60-61. as amended. at 169. 40 (2000). goods. citing Samo v. or for administration.R. 394 Phil. at 161. 36 3rd paragraph of the trust receipts. at 111. Ordoñez.. 25 Id. at 43-44. National Development Company v. COMELEC. at 105. without prejudice to the civil liabilities arising from the criminal offense. at 66-67. 254-255. G. 431 Phil. 387 Phil. 192 SCRA 246. the penalty provided for in this Decree shall be imposed upon the directors. at 124. 1038. 2004. namely: xxxx (b) By misappropriating or converting. or instruments in trust for the entruster and shall dispose of them strictly in accordance with the terms and conditions of the trust receipt. 41 Metropolitan Bank and Trust Company v. Obligations of the entrustee. money. 597 (1996). (4) keep said goods or proceeds thereof whether in money or whatever form. supra note 41. theft. No. documents. goods or any other personal property received by the offender in trust. 345 Phil. 813 (2000).R. or under any obligation involving the duty to make delivery of. 37 14th paragraph of the trust receipts. supra. 499. or on commission.R. December 10. 392 Phil. Court of Appeals. Penalty clause. 132 (2002). 33 Art. 39 Ching v. or by denying having received such money. Sandiganbayan. Tecson. – The entrustee shall (1) hold the goods. Court of Appeals. v.Id.) 34 Bank of Commerce v. 119. officers. 458 Phil. Swindling (estafa) – x x x With unfaithfulness or abuse of confidence. v. No. G. 30 Allied Banking Corporation v. 40 Pilipino Telephone Corporation v. 451 SCRA 484. 444 Phil. 43 Kilosbayan. 1176 (1997). documents. separate and capable of identification as property of the entruster. May 7. 23 Id. Inc. Milestone Realty and Co. supra note 35. Court of Appeals. If the violation or offense is committed by a corporation. 1990. 28. punishable under the provisions of Article Three hundred and fifteen. 428 SCRA 378. 1050-1051 (2003). 106. at 173. 492. 31 SECTION 13. pilferage. or instruments if they were not sold or disposed of in accordance with the terms of the trust receipt shall constitute the crime of estafa. to the prejudice of another. 150 SCRA 578 (1987). 19 Id. 18 Id. documents. – The failure of an entrustee to turn over the proceeds of the sale of the goods. 1140. 151895. Insular Bank of Asia and America. (Emphasis supplied) 32 SECTION 9. 325 Phil. and (6) observe all other terms and conditions of the trust receipt not contrary to the provisions of this Decree. 28 Id. 5 SCRA 354 (1962) and Vintola v. Tonda. 380. or instruments covered by a trust receipt to the extent of the amount owing to the entruster or as appears in the trust receipt or to return said goods. or to return the same. 797. otherwise known as the Revised Penal Code. at 62-65 27 Id. at 814 16 15 . Metropolitan Bank and Trust Company v. Court of Appeals. 38 Philippine Commercial International Bank v. 24 Id. paragraph one (b) of Act Numbered Three thousand eight hundred and fifteen. supra. 20 Id. (3) insure the goods for their total value against loss from fire. documents. 22 Id.

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