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BDO UNIBANK v. ANTONIO CHOA

FACTS:

Antonio Choa, the President and General Manager of Camden Industries, Inc., was charged with violating the Trust Receipts Law in a criminal case. The private complainant was BDO Unibank, Inc. BDO and Camden had judgment debts owed to each other, with BDO owing Camden P90 million and Camden owing BDO P20 million. The trial court found that these debts may be legally compensated. The trial court also found that BDO failed to prove that Choa was liable for a certain amount and that it formed part of the trust receipt. The trial court declared that the case is subject to compensatory action, which is civil in nature. BDO filed a motion for reconsideration, which was denied by the trial court. BDO then filed a Petition for Certiorari with the Court of Appeals to challenge the trial court's orders. The Court of Appeals denied BDO's petition, affirming the trial court's orders. BDO filed a motion for reconsideration, which was also denied by the Court of Appeals. BDO then filed a Petition for Review on Certiorari before the Supreme Court to question the Court of Appeals' decision.

In the Petition for Certiorari filed by BDO before the Court of Appeals, BDO argued that the trial court violated due process by granting the respondent's Motion for Leave to File Demurrer to Evidence and granting the Demurrer to Evidence without giving the prosecution a chance to refute the pleadings. BDO also contended that the trial court's ruling on legal compensation contradicted the Civil Code and ignored a decision by the Court of Appeals. The respondent argued that the Petition should have been denied outright for lack of authority and maintained that the petitioner was also appealing the criminal aspect of the case, which was within the authority of the Office of the Solicitor General. The respondent further contended that his guilt was not proven and that the prosecution failed to present evidence to establish the elements of the offense.

The case also involves the authority of the State to appeal an accused's acquittal. The State argues that it has the inherent prerogative to prosecute criminal cases and ensure that justice is served. The Office of the Solicitor General (OSG) holds the exclusive authority to represent the State in appeals of criminal cases before the Supreme Court and the Court of Appeals (CA). This is in accordance with Section 35 (1), Chapter 12, Title III, Book IV of the 1987 Administrative Code. The OSG is mandated to represent the Government, its agencies, instrumentalities, officials, and agents in any litigation or proceeding requiring legal services. It has the power to represent the Government and its officers in the Supreme Court, the CA, and all other courts or tribunals in civil actions and special proceedings where the Government or any officer is a party. In criminal cases, only the Solicitor General can appeal the acquittal or dismissal on behalf of the State, and the private complainant or offended party does not have the right to appeal.

ISSUES:

  1. Whether or not petitioner BDO Unibank, Inc. has the legal personality to file a Petition for Certiorari before the Court of Appeals.

  2. Whether or not the Court of Appeals erred in ruling that the trial court judge did not commit grave abuse of discretion when he issued the Order granting respondent Antonio Choa's Demurrer to Evidence.

  3. Whether the Motion for Leave and Demurrer to Evidence was filed out of time.

  4. Whether the trial court judge committed grave abuse of discretion in granting the Demurrer to Evidence.

  5. Whether the transaction between the petitioner and respondent constitutes a trust receipt transaction under Presidential Decree No. 115.

  6. Whether the respondent should be held liable for violation of Presidential Decree No. 115.

  7. Whether the prosecution was able to provide evidence in support of the violation of the Trust Receipts Law.

  8. Whether criminal intent is relevant in prosecuting the violation of the Trust Receipts Law.

  9. Whether the respondent's signature on the Trust Receipt Agreements was made in his personal capacity.

  10. Whether the respondent can be held personally liable for the debts of the company he represented.

RULING:

  1. Petitioner BDO Unibank, Inc. has the legal personality to file a Petition for Certiorari before the Court of Appeals, but only insofar as the civil aspect of the case is concerned.

  2. The Court of Appeals did not err in ruling that the trial court judge did not commit grave abuse of discretion when he issued the Order granting respondent Antonio Choa's Demurrer to Evidence.

  3. The Motion for Leave and Demurrer to Evidence was filed out of time. The prosecution made a reservation in its prayer, indicating that it would rest its case depending on whether the trial court admitted its evidence. The counting of the five-day period for the filing of a Motion for Leave did not commence upon the filing of the Formal Offer of Documentary Evidence or upon the admission of the evidence, but rather upon the respondent's receipt of the order indicating that the prosecution had rested its case. The Motion for Leave and the Demurrer to Evidence were filed beyond the five-day period, thus the trial court should have denied these pleadings outright.

  4. Even if the Motion for Leave and the Demurrer to Evidence were filed on time, the trial court judge still committed grave abuse of discretion in granting the Demurrer to Evidence.

  5. The transaction between the petitioner and respondent does not constitute a trust receipt transaction under Presidential Decree No. 115. The trial court held that the transaction was a mere loan extended to the accused, who was obligated to pay back the loan by remitting the proceeds of the sale of the goods. If the goods remained unsold or were surrendered as collateral, no criminal liability arises under the Trust Receipts Law.

  6. The respondent should not be held liable for violation of Presidential Decree No. 115. The trial court found no evidence that the respondent was liable for the specific amount alleged in the Information. Moreover, the trial court held that there was no probable cause to indict the respondent for his minimal liability. The prosecution failed to present evidence of the respondent's criminal intent in not paying or turning over the goods.

  7. The trial court cannot rule that the prosecution did not provide evidence as the Trust Receipt Agreements and their corresponding amounts were presented. The total amount received by the respondent under the Trust Receipt Agreements is P7,875,904.96. The issue of whether this amount formed part of the alleged P20 million trust receipt obligation is irrelevant to the case as it deals with the violation of the Trust Receipts Law.

  8. Criminal intent is irrelevant in prosecuting the violation of the Trust Receipts Law. The offense punished under Presidential Decree No. 115 is malum prohibitum, meaning intent to defraud is not required. Mere failure to deliver the proceeds of the sale or the goods covered by the trust receipt constitutes a criminal offense that causes prejudice to the public interest. Failure to turn over the proceeds of the sale or return the goods as required by the terms of the trust receipt shall be punishable as estafa without the need to prove intent to defraud.

  9. The Supreme Court denied the petition and held that the respondent cannot be held personally liable under the Trust Receipt Agreements. The Court found that the respondent signed the agreements as the authorized representative of Camden Industries and not in his personal capacity. Furthermore, there was no guaranty clause or similar provision that would make the respondent personally liable for the company's debts. Thus, without evidence of a contractual agreement or stipulation binding the respondent personally to the debts, the Court could not hold him civilly liable.

PRINCIPLES:

  • The authority to represent the State in appeals of criminal cases is solely vested in the Office of the Solicitor General.

  • In criminal cases where the offended party is the State, the private complainant's role is limited to that of a witness for the prosecution.

  • If a criminal case is dismissed by the trial court or if there is an acquittal, an appeal on the criminal aspect may be undertaken only by the State through the Solicitor General.

  • The private offended party or complainant may only appeal the civil aspect of the case despite the acquittal of the accused.

  • In a special civil action for certiorari, the complainant has an interest in the civil aspect of the case and may file such special civil action questioning the decision or action of the court on jurisdictional grounds.

  • A demurrer to evidence tests the sufficiency or insufficiency of the prosecution's evidence and must be filed after the prosecution rests its case and after a formal offer of evidence. (Valencia v. Sandiganbayan)

  • The counting of the five-day period for the filing of a Motion for Leave to Demurrer to Evidence commences upon the receipt of the order indicating that the prosecution has rested its case. (Cabador v. People)

  • A trial court judge commits grave abuse of discretion in granting a Demurrer to Evidence when the evidence presented by the prosecution is sufficient to establish the elements of the offense charged. (Presidential Decree No. 115)

  • A trust receipt transaction imposes upon the entrustee the obligation to deliver the price of the sale or return the goods to the entruster.

  • Violation of the obligations in a trust receipt transaction constitutes estafa, as defined under Article 315 (1)(b) of the Revised Penal Code, as provided by Section 13 of Presidential Decree No. 115.

  • The transaction is considered a mere loan if it involves the remittance of proceeds from the sale of the goods or the surrender of the goods as collateral. In such cases, no criminal liability arises under the Trust Receipts Law.

  • The violation of the Trust Receipts Law does not require proof of criminal intent. It is a malum prohibitum offense.

  • Failure to deliver the proceeds of the sale or the goods covered by the trust receipt is a criminal offense that causes prejudice to the public interest.

  • A corporation may act only through its directors, officers, and employees. Debts incurred by these individuals in their capacity as corporate agents are the direct liability of the corporation they represent.

  • Directors or officers are personally liable for corporate debts only if they contractually agree or stipulate to be personally liable.