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EDWARD C. ONG v. CA

FACTS:

The petitioner, Edward C. Ong, represented ARMAGRI International Corporation in two separate incidents where he received goods from Solid Bank Corporation under trust receipts. The trust receipts stated that ARMAGRI would account for the goods or turn over the proceeds to the bank. However, the petitioner failed to comply with his obligations and misappropriated the goods, resulting in damage to Solid Bank Corporation.

When the trust receipts became due, ARMAGRI did not pay or deliver the goods to the bank despite several demand letters. The unpaid accounts under the trust receipts amounted to a significant sum of money.

During the trial, the petitioner and another representative of ARMAGRI waived their right to present evidence. The trial court then considered the case submitted for decision.

The Court of Appeals upheld the trial court's decision, ruling that the petitioner, although not a director or officer of ARMAGRI, falls within the scope of the "employees or other persons therein responsible for the offense" under the Trust Receipts Law. The Court of Appeals held that the petitioner's failure to account for the goods entrusted to ARMAGRI and his representation of the corporation in transacting with the bank made him liable. The Court of Appeals also ruled that it was not necessary for the prosecution to prove that the petitioner personally received and misappropriated the goods.

The petitioner appealed this decision, claiming that he should not be convicted under specifications that were not alleged in the information. The central issue is whether the petitioner falls under the scope of Section 13 of the Trust Receipts Law and should be held responsible for the default of ARMAGRI.

ISSUES:

  1. Whether the petitioner can be held responsible for the offense under the Trust Receipts Law despite being an agent of the entrustee corporation.

  2. Whether the petitioner can be convicted under specifications not alleged in the information.

  3. Whether the petitioner, as the signatory to the trust receipts, is responsible for the offense of estafa under the Trust Receipts Law.

  4. Whether the petitioner can be convicted for estafa based on allegations not specifically stated in the Informations.

  5. What is the appropriate penalty to be imposed for each count of estafa?

  6. Is the petitioner personally liable for the civil liabilities arising from the criminal offense?

RULING:

  1. The Court upheld the conviction of the petitioner.

  2. Principles:

  3. The failure of the entrustee to turn over the proceeds of the sale of the goods or to return the goods covered by the trust receipts constitutes estafa, punishable under the Trust Receipts Law.

  4. If the violation of the Trust Receipts Law is committed by a corporation, the penalty is imposed on the directors, officers, employees, or other officials or persons responsible for the offense.

  5. The Trust Receipts Law punishes dishonesty and abuse of confidence in the handling of money or goods, to the prejudice of public order.

  6. The mere failure to deliver the proceeds of the sale or the goods if not sold constitutes a criminal offense that causes prejudice not only to the creditor, but also to the public interest.

  7. The petitioner is responsible for the offense of estafa under the Trust Receipts Law. The law of agency governing civil cases does not apply in criminal cases. Even though the petitioner acted on behalf of ARMAGRI, he cannot escape punishment for his participation in the commission of the crime.

  8. The petitioner can be convicted for estafa based on the allegations in the Informations. It is sufficient that the Informations specifically allege that the petitioner, representing ARMAGRI, defrauded the bank by failing to remit the proceeds of the sale or to return the goods, as required under the trust receipts.

  9. The maximum penalty for each count of estafa should be 20 years, while the minimum penalty should be reduced to four (4) years and two (2) months of prision correccional.

  10. The petitioner is not personally liable for the civil liabilities arising from the criminal offense, as he did not sign in his personal capacity the solidary guarantee clause on the trust receipts. However, he is liable to the Bank for the stipulated monthly penalty of 1% on the outstanding amount of each trust receipt based on the additional undertaking that he signed.

PRINCIPLES:

  • In criminal cases, the law of agency governing civil cases does not apply. A person cannot escape punishment for participating in the commission of a crime by claiming to have acted as an agent of another party.

  • In estafa cases under the Trust Receipts Law, it is sufficient to allege and establish the failure of the entrustee to remit the proceeds or to return the goods to hold the entrustee responsible for the offense.

  • The existence of a corporate entity does not shield from prosecution the agent who knowingly and intentionally commits a crime on behalf of the corporation.

  • The penalty for estafa under Article 315 of the Revised Penal Code is dependent on the amount of the fraud. The total penalty imposed should not exceed twenty years.

  • The penalty for each count of estafa is determined based on the amount of fraud, as prescribed in Article 315 of the Revised Penal Code.

  • The indeterminate sentence law provides that the minimum indeterminate sentence should be within the penalty next lower in degree to the penalty prescribed by the Code, while the maximum term is determined considering the modifying circumstance.

  • Civil liabilities arising from the criminal offense can be imposed on a corporation or juridical entity, and the responsible directors, officers, employees, or officials, as specified in the Trust Receipts Law.

  • The person signing the trust receipt for the corporation is not solidarily liable with the entrustee-corporation for the civil liability, unless he bound himself to pay the debt of the corporation under a separate contract of surety or guaranty.