[ G.R. NO. 155647, November 23, 2007 ]METROPOLITAN BANK v. JIMMY GO +
METROPOLITAN BANK & TRUST COMPANY, PETITIONER, VS. JIMMY GO AND BEMJAMIN GO BAUTISTA ALIAS BENJAMIN GO, RESPONDENTS.
DECISION
METROPOLITAN BANK v. JIMMY GO +
METROPOLITAN BANK & TRUST COMPANY, PETITIONER, VS. JIMMY GO AND BEMJAMIN GO BAUTISTA ALIAS BENJAMIN GO, RESPONDENTS.
DECISION
NACHURA, J.:
Petitioner Metropolitan Bank & Trust Company (Metrobank) urges this Court to review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure the Decision dated August 15, 2002 and the Resolution dated October 15, 2002, both of the
Court of Appeals in CA-G.R. SP No. 61544.[1]
On September 30, 1988, Metrobank, through its Assistant Vice- President Leonardo B. Lejano, executed a Credit Line Agreement[2] in favor of its client, BGB Industrial Textile Mills, Inc. (BGB) in the total amount of P10,000,000.00. As security for the obligation, private respondent Benjamin Go (now deceased), being an officer of BGB, executed a Continuing Surety Agreement[3] in favor of Metrobank, binding himself solidarily with BGB to pay Metrobank the said amount of P10,000,000.00.
In November 1988, private respondent Jimmy Go, as general manager of BGB, applied for eleven (11) commercial letters of credit to cover the shipment of raw materials and spare parts. Accordingly, Metrobank issued the 11 irrevocable letters of credit to BGB. The merchandise/shipments were delivered to and accepted by BGB on different dates. Consequently, 11 trust receipts were executed by BGB thru Jimmy Go and Benjamin Go, as entrustees, in favor of Metrobank as entruster. The letters of credit and their corresponding trust receipts are listed below:
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.:
Metrobank went to the Court of Appeals via a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. However, the Court of Appeals dismissed the petition for lack of merit. Metrobank moved to reconsider the dismissal, but the motion was denied. Hence, this petition.
The Issues
The reasons given by Metrobank for the allowance of its petition are as follows:
According to Metrobank, 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. Stated differently, 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. 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.
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, grounded on the absence of conversion or misappropriation, is tantamount to holding that a violation of the Trust Receipts Law is merely a crime against property and not against public order, contrary to prevailing jurisprudence.
The Ruling of the Court
After a judicious study of the records of this case, this Court does not find any cogent reason to reverse the assailed Decision and Resolution of the Court of Appeals, and the Resolutions of the Office of the City Prosecutor of Manila and of the Secretary of Justice.
First. The issues raised in this petition are substantially factual. Essentially, 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, if unsold, in accordance with the terms of the 11 trust receipts. This failure, Metrobank adds, amounts to a violation of Section 13 of the Trust Receipts Law and warrants the prosecution of respondents for estafa under Article 315, paragraph 1(b)[33] of the Revised Penal Code.
In an appeal via certiorari, only questions of law may be raised because this Court is not a trier of facts.[34] Metrobank wants to make this case an exception to the rule, as it attributes to the Office of the City Prosecutor of Manila, the Secretary of Justice, and the Court of Appeals a misapprehension of the facts. Unfortunately, there is no adequate support for this imputation.
In order that respondents Jimmy and Benjamin Go may be validly prosecuted for estafa under Article 315, paragraph 1(b) of the Revised Penal Code, in relation to Section 13 of the Trust Receipts Law, 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, or to return the goods if not sold; (b) they misappropriated or converted the goods and/or the proceeds of the sale; (c) they performed such acts with abuse of confidence to the damage and prejudice of Metrobank; and (d) demand was made on them by Metrobank for the remittance of the proceeds or the return of the unsold goods.[35]
The Office of the City Prosecutor and the Secretary of Justice had identical findings that the element of misappropriation or conversion is absent, and that Jimmy and Benjamin Go could not deliver the proceeds of the sale of the merchandise to Metrobank because the goods remained unsold. 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, 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. Accordingly, they both ruled that the liability of Jimmy and Benjamin Go was merely civil in nature, and the criminal complaints were dismissed for lack of probable cause.
Declaring that the Office of the City Prosecutor did not commit grave abuse of discretion, 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, although the offer was not accepted because Metrobank appeared more interested in collecting the amount it advanced under the letters of credit. It also found that Metrobank failed to prove its demand for the return of the goods.
Thus, even if we accommodate the petitioner's plea to review the case's factual milieu, we still have to agree with the findings of fact of the Office of the City Prosecutor and of the Court of Appeals. These findings appear to be supported by the evidence on record. The prosecution for estafa under Article 315, paragraph 1(b) of the Revised Penal code, cannot prosper because the second (misappropriation/conversion) and the fourth (demand) elements of the offense are not present.
Under the pro-forma trust receipts subject of this case, Jimmy and Benjamin Go, as entrustees, agreed to hold the goods (whether in their original, processed or manufactured state, and irrespective of the fact that a different merchandise is used in completing such manufacture) in trust for Metrobank, as its exclusive property, with liberty to sell them for cash only for the latter's account, 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, pledge, or otherwise. They further agreed that in case of sale of the goods, 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.
It is noteworthy that Jimmy and Benjamin Go processed the goods into textiles, to be sold for cash only, 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. 1922 and 1939, which were not subject of the 11 criminal complaints filed by Metrobank. 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. However, the Court sees this circumstance for what it simply and truly is, i.e., that Jimmy and Benjamin Go exerted efforts to comply with their obligation to sell the merchandise and remit the proceeds thereof. Unfortunately, the rest of the merchandise remained unsold in the warehouse at the Bataan Export Processing Zone, such that no proceeds thereof could be remitted to Metrobank.
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.[36] But Metrobank did not exercise this option. Instead, 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. Then, Jimmy and Benjamin Go reiterated the offer to return the goods in their answer to the civil complaints. Again, Metrobank did not accept the offer, and instead filed the 11 criminal complaints for alleged violation of the Trust Receipts Law to be prosecuted as estafa under Article 315, paragraph 1(b) of the Revised Penal Code. 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.
Furthermore, the trust receipts uniformly contain the following provision:
Second. The trust receipts subject of this case partake of the nature of contracts of adhesion. 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, but which the latter cannot modify; one party prepares the stipulations in the contract, while the other party merely affixes his signature or his "adhesion" thereto, giving no room for negotiation, and resulting in deprivation of the latter of the opportunity to bargain on equal footing.[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. In fact, the trust receipts stipulated that the goods subject thereof were the exclusive property of Metrobank, contrary to the essence of a trust receipt.
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, and who may not be able to acquire credit except through utilization, as collateral, of the merchandise imported or purchased. It is a document in which is expressed a security transaction where the lender, having no prior title to the goods on which the lien is to be constituted, and not having possession over the same since possession thereof remains in the borrower, lends his money to the borrower on security of the goods which the borrower is privileged to sell, clear of the lien, with an agreement to pay all or part of the proceeds of the sale to the lender. It is a security agreement pursuant to which a bank acquires a "security interest" in the goods. It secures a debt, and there can be no such thing as security interest that secures no obligation.[39]
The subject trust receipts, being contracts of adhesion, are not per se invalid and inefficacious. But should there be ambiguities therein, such ambiguities are to be strictly construed against Metrobank, the party that prepared them.[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. However, an ambiguity exists as to when this obligation arises, whether upon maturity of the trust receipts or upon demand by Metrobank. A strict construction of the provisions of the contracts of adhesion dictates that the reckoning point should be the demand made by Metrobank.
As already discussed above, 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. The offer was reiterated in their answer. More importantly, the unsold goods remained intact, contrary to the claim of Metrobank that they had misappropriated or converted the same. 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, which will authorize Metrobank to pursue legal remedies in court, the fact of demand made by Metrobank was not established by competent evidence. Except for the bare allegation that it did so in the 11 criminal complaints, no letter of demand accompanied all of the criminal complaints.
As to the other obligations under the trust receipts adapted from Section 9 of the Trust Receipts Law, there is no sufficient evidence proffered by Metrobank that Jimmy and Benjamin Go had actually violated them. What the law punishes is the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another, whether the latter is the owner.[41] The malum prohibitum nature of the offense notwithstanding, the intent to misuse or misappropriate the goods or their proceeds on the part of Jimmy and Benjamin Go should have been proved. Unfortunately, no such proof appears on record.[42]
In the prosecution of criminal cases, it is the complainant who has the burden to prove the elements of the crime which the respondents are probably guilty of.[43] Obviously, Metrobank failed to discharge this burden.
Indeed, 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. In the absence of grave abuse of discretion on the part of the Office of the City Prosecutor of Manila, this Court must not interfere in its findings, considering that full discretionary authority has been delegated to the latter in determining whether or not a criminal charge should be instituted.[44] With greater reason should we respect this finding, 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.
WHEREFORE, the petition is DENIED for lack of merit. Accordingly, the assailed Decision dated August 15, 2002 and the Resolution dated October 15, 2002 of the Court of Appeals in CA-G.R. SP No. 61544 are AFFIRMED.
SO ORDERED.
Ynares-Santiago, (Chairperson), Austria-Martinez, Chico-Nazario, and Reyes, JJ., concur.
[1] Petition dated December 1, 2002; rollo, pp. 12-47.
[2] Rollo, p. 71.
[3] Id. at 72.
[4] Id. at 130.
[5] Id. at 133.
[6] Id. at 73.
[7] Id. at 76.
[8] Id. at 148.
[9] Id. at 151.
[10] Id. at 82.
[11] Id. at 85.
[12] Id. at 139.
[13] Id. at 142.
[14] Id. at 158.
[15] Id. at 161.
[16] Id. at 102.
[17] Id. at 105.
[18] Id. at 121.
[19] Id. at 124.
[20] Id. at 91.
[21] Id. at 96.
[22] Id. at 169.
[23] Id. at 173.
[24] Id. at 111.
[25] Id. at 121.
[26] Id. at 62-65
[27] Id. at 66-67.
[28] Id. at 60-61.
[29] Id. at 27-28.
[30] Allied Banking Corporation v. Ordoñez, G.R. No. 82495, December 10, 1990, 192 SCRA 246, 254-255.
[31] SECTION 13. Penalty clause. The failure of an entrustee to turn over the proceeds of the sale of the goods, documents, 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, documents, 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, punishable under the provisions of Article Three hundred and fifteen, paragraph one (b) of Act Numbered Three thousand eight hundred and fifteen, as amended, otherwise known as the Revised Penal Code. If the violation or offense is committed by a corporation, partnership, association or other juridical entities, the penalty provided for in this Decree shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense, without prejudice to the civil liabilities arising from the criminal offense. (Emphasis supplied)
[32] SECTION 9. Obligations of the entrustee. The entrustee shall (1) hold the goods, documents, or instruments in trust for the entruster and shall dispose of them strictly in accordance with the terms and conditions of the trust receipt; (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; (3) insure the goods for their total value against loss from fire, theft, pilferage, or other casualties; (4) keep said goods or proceeds thereof whether in money or whatever form, separate and capable of identification as property of the entruster; (5) return the goods, documents, or instruments in the event of non-sale or upon demand of the entruster; and (6) observe all other terms and conditions of the trust receipt not contrary to the provisions of this Decree.
[33] Art. 315. Swindling (estafa) x x x
With unfaithfulness or abuse of confidence, namely:
x x x x
(b) By misappropriating or converting, to the prejudice of another, money, goods or any other personal property received by the offender in trust, or on commission, or for administration, or under any obligation involving the duty to make delivery of, or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property. (Emphasis supplied.)
[34] Bank of Commerce v. Serrano, G.R. No. 151895, February 16, 2005, 451 SCRA 484, 492; Milestone Realty and Co., Inc. v. Court of Appeals, 431 Phil. 119, 132 (2002).
[35] Ching v. Court of Appeals, 387 Phil. 28, 40 (2000).
[36] 3rd paragraph of the trust receipts, supra.
[37] 14th paragraph of the trust receipts, supra.
[38] Philippine Commercial International Bank v. Court of Appeals, 325 Phil. 588, 597 (1996).
[39] Ching v. Court of Appeals, supra note 35, at 43-44, citing Samo v. People, 5 SCRA 354 (1962) and Vintola v. Insular Bank of Asia and America, 150 SCRA 578 (1987).
[40] Pilipino Telephone Corporation v. Tecson, G.R. No. 156966, May 7, 2004, 428 SCRA 378, 380; National Development Company v. Madrigal Wan Hai Lines Corporation, 458 Phil. 1038, 1050-1051 (2003).
[41] Metropolitan Bank and Trust Company v. Tonda, 392 Phil. 797, 813 (2000).
[42] Colinares v. Court of Appeals, 394 Phil. 106, 123 (2000).
[43] Kilosbayan, Inc. v. COMELEC, 345 Phil. 1140, 1176 (1997).
[44] Serapio v. Sandiganbayan, 444 Phil. 499, 528-529 (2003); Metropolitan Bank and Trust Company v. Tonda, supra note 41, at 814.
The Facts of the Case
On September 30, 1988, Metrobank, through its Assistant Vice- President Leonardo B. Lejano, executed a Credit Line Agreement[2] in favor of its client, BGB Industrial Textile Mills, Inc. (BGB) in the total amount of P10,000,000.00. As security for the obligation, private respondent Benjamin Go (now deceased), being an officer of BGB, executed a Continuing Surety Agreement[3] in favor of Metrobank, binding himself solidarily with BGB to pay Metrobank the said amount of P10,000,000.00.
In November 1988, private respondent Jimmy Go, as general manager of BGB, applied for eleven (11) commercial letters of credit to cover the shipment of raw materials and spare parts. Accordingly, Metrobank issued the 11 irrevocable letters of credit to BGB. The merchandise/shipments were delivered to and accepted by BGB on different dates. Consequently, 11 trust receipts were executed by BGB thru Jimmy Go and Benjamin Go, as entrustees, in favor of Metrobank as entruster. The letters of credit and their corresponding trust receipts are listed below:
|
Letter of Credit No.
|
Expiry Date of Trust Receipt
|
Amount of Trust Receipt
|
|
DIV88-1941NC[4]
|
Feb. 18, 1989
|
P1,625,395.38[5]
|
|
DIV88-1940NC[6]
|
March 04, 1989
|
P3,011,249.71[7]
|
|
DIV88-1925NC[8]
|
March 07, 1989
|
P 508,252.16[9]
|
|
DIV88-1926NC[10]
|
March 07, 1989
|
P 626,165.28[11]
|
|
DIV88-1924NC[12]
|
March 14, 1989
|
P 452,289.55[13]
|
|
DIV88-1930NC[14]
|
April 04, 1989
|
P 660,348.00[15]
|
|
DIV88-1931NC[16]
|
April 04, 1989
|
P 594,313.20[17]
|
|
DIV88-1923NC[18]
|
April 10, 1989
|
P 358,113.33[19]
|
|
DIV88-1951NC[20]
|
April 12, 1989
|
P1,720,882.07[21]
|
|
DIV88-1932NC[22]
|
April 19, 1989
|
P 244,250.26[23]
|
|
DIV88-1952NC[24]
|
May 25, 1989
|
P1,413,999.11[25]
|
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 ex-contractu for breach of the Letters of Credit Trust Receipt.On June 22, 1995, Metrobank filed a motion for reconsideration, but the same was denied for lack of merit in the Review Resolution[27] dated October 25, 1999. Metrobank appealed to the Department of Justice. On September 5, 2000, then Acting Secretary of Justice, Ramon J. Liwag, 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; 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. 223.
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.
Considering that the goods are still intact in the [respondents'] warehouse at the Bataan Export Processing Zone, considering further the fact that the goods were never processed, and considering finally that the goods have not been sold, ergo, there is no violation of [the] Presidential Decree. As already stated, respondents' liability is only civil in nature.
Metrobank went to the Court of Appeals via a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. However, the Court of Appeals dismissed the petition for lack of merit. Metrobank moved to reconsider the dismissal, but the motion was denied. Hence, this petition.
The Issues
The reasons given by Metrobank for the allowance of its petition are as follows:
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, i.e., to return the merchandise subject of the 11 trust receipts, considering that they were never sold, and to pay their obligation under the letters of credit. Citing jurisprudence,[30] it contends that Section 13,[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), reshipped, stored, and processed as a component of a product ultimately sold. 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 9[32] of the said law.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. 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.
Third Reason
BOTH THE RESOLUTION AND THE DECISION DELIBERATELY IGNORED THE FACT THAT A VIOLATION OF PRESIDENTIAL DECREE NO. 115, AS SETTLED JURISPRUDENCE HOLD, IS AN OFFENSE AGAINST PUBLIC ORDER AND NOT MERELY AGAINST PROPERTY.[29]
According to Metrobank, 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. Stated differently, 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. 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.
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, grounded on the absence of conversion or misappropriation, is tantamount to holding that a violation of the Trust Receipts Law is merely a crime against property and not against public order, contrary to prevailing jurisprudence.
The Ruling of the Court
After a judicious study of the records of this case, this Court does not find any cogent reason to reverse the assailed Decision and Resolution of the Court of Appeals, and the Resolutions of the Office of the City Prosecutor of Manila and of the Secretary of Justice.
First. The issues raised in this petition are substantially factual. Essentially, 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, if unsold, in accordance with the terms of the 11 trust receipts. This failure, Metrobank adds, amounts to a violation of Section 13 of the Trust Receipts Law and warrants the prosecution of respondents for estafa under Article 315, paragraph 1(b)[33] of the Revised Penal Code.
In an appeal via certiorari, only questions of law may be raised because this Court is not a trier of facts.[34] Metrobank wants to make this case an exception to the rule, as it attributes to the Office of the City Prosecutor of Manila, the Secretary of Justice, and the Court of Appeals a misapprehension of the facts. Unfortunately, there is no adequate support for this imputation.
In order that respondents Jimmy and Benjamin Go may be validly prosecuted for estafa under Article 315, paragraph 1(b) of the Revised Penal Code, in relation to Section 13 of the Trust Receipts Law, 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, or to return the goods if not sold; (b) they misappropriated or converted the goods and/or the proceeds of the sale; (c) they performed such acts with abuse of confidence to the damage and prejudice of Metrobank; and (d) demand was made on them by Metrobank for the remittance of the proceeds or the return of the unsold goods.[35]
The Office of the City Prosecutor and the Secretary of Justice had identical findings that the element of misappropriation or conversion is absent, and that Jimmy and Benjamin Go could not deliver the proceeds of the sale of the merchandise to Metrobank because the goods remained unsold. 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, 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. Accordingly, they both ruled that the liability of Jimmy and Benjamin Go was merely civil in nature, and the criminal complaints were dismissed for lack of probable cause.
Declaring that the Office of the City Prosecutor did not commit grave abuse of discretion, 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, although the offer was not accepted because Metrobank appeared more interested in collecting the amount it advanced under the letters of credit. It also found that Metrobank failed to prove its demand for the return of the goods.
Thus, even if we accommodate the petitioner's plea to review the case's factual milieu, we still have to agree with the findings of fact of the Office of the City Prosecutor and of the Court of Appeals. These findings appear to be supported by the evidence on record. The prosecution for estafa under Article 315, paragraph 1(b) of the Revised Penal code, cannot prosper because the second (misappropriation/conversion) and the fourth (demand) elements of the offense are not present.
Under the pro-forma trust receipts subject of this case, Jimmy and Benjamin Go, as entrustees, agreed to hold the goods (whether in their original, processed or manufactured state, and irrespective of the fact that a different merchandise is used in completing such manufacture) in trust for Metrobank, as its exclusive property, with liberty to sell them for cash only for the latter's account, 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, pledge, or otherwise. They further agreed that in case of sale of the goods, 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.
It is noteworthy that Jimmy and Benjamin Go processed the goods into textiles, to be sold for cash only, 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. 1922 and 1939, which were not subject of the 11 criminal complaints filed by Metrobank. 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. However, the Court sees this circumstance for what it simply and truly is, i.e., that Jimmy and Benjamin Go exerted efforts to comply with their obligation to sell the merchandise and remit the proceeds thereof. Unfortunately, the rest of the merchandise remained unsold in the warehouse at the Bataan Export Processing Zone, such that no proceeds thereof could be remitted to Metrobank.
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.[36] But Metrobank did not exercise this option. Instead, 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. Then, Jimmy and Benjamin Go reiterated the offer to return the goods in their answer to the civil complaints. Again, Metrobank did not accept the offer, and instead filed the 11 criminal complaints for alleged violation of the Trust Receipts Law to be prosecuted as estafa under Article 315, paragraph 1(b) of the Revised Penal Code. 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.
Furthermore, 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, and the BANK/ENTRUSTER is forthwith authorized to file and prosecute the corresponding and appropriate action, civil or criminal, against the ENTRUSTEE.[37]Yet, 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, if unsold. We find this deficiency exceptionally revealing, especially considering that the said trust receipts had different maturity dates.
Second. The trust receipts subject of this case partake of the nature of contracts of adhesion. 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, but which the latter cannot modify; one party prepares the stipulations in the contract, while the other party merely affixes his signature or his "adhesion" thereto, giving no room for negotiation, and resulting in deprivation of the latter of the opportunity to bargain on equal footing.[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. In fact, the trust receipts stipulated that the goods subject thereof were the exclusive property of Metrobank, contrary to the essence of a trust receipt.
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, and who may not be able to acquire credit except through utilization, as collateral, of the merchandise imported or purchased. It is a document in which is expressed a security transaction where the lender, having no prior title to the goods on which the lien is to be constituted, and not having possession over the same since possession thereof remains in the borrower, lends his money to the borrower on security of the goods which the borrower is privileged to sell, clear of the lien, with an agreement to pay all or part of the proceeds of the sale to the lender. It is a security agreement pursuant to which a bank acquires a "security interest" in the goods. It secures a debt, and there can be no such thing as security interest that secures no obligation.[39]
The subject trust receipts, being contracts of adhesion, are not per se invalid and inefficacious. But should there be ambiguities therein, such ambiguities are to be strictly construed against Metrobank, the party that prepared them.[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. However, an ambiguity exists as to when this obligation arises, whether upon maturity of the trust receipts or upon demand by Metrobank. A strict construction of the provisions of the contracts of adhesion dictates that the reckoning point should be the demand made by Metrobank.
As already discussed above, 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. The offer was reiterated in their answer. More importantly, the unsold goods remained intact, contrary to the claim of Metrobank that they had misappropriated or converted the same. 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, which will authorize Metrobank to pursue legal remedies in court, the fact of demand made by Metrobank was not established by competent evidence. Except for the bare allegation that it did so in the 11 criminal complaints, no letter of demand accompanied all of the criminal complaints.
As to the other obligations under the trust receipts adapted from Section 9 of the Trust Receipts Law, there is no sufficient evidence proffered by Metrobank that Jimmy and Benjamin Go had actually violated them. What the law punishes is the dishonesty and abuse of confidence in the handling of money or goods to the prejudice of another, whether the latter is the owner.[41] The malum prohibitum nature of the offense notwithstanding, the intent to misuse or misappropriate the goods or their proceeds on the part of Jimmy and Benjamin Go should have been proved. Unfortunately, no such proof appears on record.[42]
In the prosecution of criminal cases, it is the complainant who has the burden to prove the elements of the crime which the respondents are probably guilty of.[43] Obviously, Metrobank failed to discharge this burden.
Indeed, 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. In the absence of grave abuse of discretion on the part of the Office of the City Prosecutor of Manila, this Court must not interfere in its findings, considering that full discretionary authority has been delegated to the latter in determining whether or not a criminal charge should be instituted.[44] With greater reason should we respect this finding, 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.
WHEREFORE, the petition is DENIED for lack of merit. Accordingly, the assailed Decision dated August 15, 2002 and the Resolution dated October 15, 2002 of the Court of Appeals in CA-G.R. SP No. 61544 are AFFIRMED.
SO ORDERED.
Ynares-Santiago, (Chairperson), Austria-Martinez, Chico-Nazario, and Reyes, JJ., concur.
[1] Petition dated December 1, 2002; rollo, pp. 12-47.
[2] Rollo, p. 71.
[3] Id. at 72.
[4] Id. at 130.
[5] Id. at 133.
[6] Id. at 73.
[7] Id. at 76.
[8] Id. at 148.
[9] Id. at 151.
[10] Id. at 82.
[11] Id. at 85.
[12] Id. at 139.
[13] Id. at 142.
[14] Id. at 158.
[15] Id. at 161.
[16] Id. at 102.
[17] Id. at 105.
[18] Id. at 121.
[19] Id. at 124.
[20] Id. at 91.
[21] Id. at 96.
[22] Id. at 169.
[23] Id. at 173.
[24] Id. at 111.
[25] Id. at 121.
[26] Id. at 62-65
[27] Id. at 66-67.
[28] Id. at 60-61.
[29] Id. at 27-28.
[30] Allied Banking Corporation v. Ordoñez, G.R. No. 82495, December 10, 1990, 192 SCRA 246, 254-255.
[31] SECTION 13. Penalty clause. The failure of an entrustee to turn over the proceeds of the sale of the goods, documents, 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, documents, 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, punishable under the provisions of Article Three hundred and fifteen, paragraph one (b) of Act Numbered Three thousand eight hundred and fifteen, as amended, otherwise known as the Revised Penal Code. If the violation or offense is committed by a corporation, partnership, association or other juridical entities, the penalty provided for in this Decree shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense, without prejudice to the civil liabilities arising from the criminal offense. (Emphasis supplied)
[32] SECTION 9. Obligations of the entrustee. The entrustee shall (1) hold the goods, documents, or instruments in trust for the entruster and shall dispose of them strictly in accordance with the terms and conditions of the trust receipt; (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; (3) insure the goods for their total value against loss from fire, theft, pilferage, or other casualties; (4) keep said goods or proceeds thereof whether in money or whatever form, separate and capable of identification as property of the entruster; (5) return the goods, documents, or instruments in the event of non-sale or upon demand of the entruster; and (6) observe all other terms and conditions of the trust receipt not contrary to the provisions of this Decree.
[33] Art. 315. Swindling (estafa) x x x
With unfaithfulness or abuse of confidence, namely:
x x x x
(b) By misappropriating or converting, to the prejudice of another, money, goods or any other personal property received by the offender in trust, or on commission, or for administration, or under any obligation involving the duty to make delivery of, or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property. (Emphasis supplied.)
[34] Bank of Commerce v. Serrano, G.R. No. 151895, February 16, 2005, 451 SCRA 484, 492; Milestone Realty and Co., Inc. v. Court of Appeals, 431 Phil. 119, 132 (2002).
[35] Ching v. Court of Appeals, 387 Phil. 28, 40 (2000).
[36] 3rd paragraph of the trust receipts, supra.
[37] 14th paragraph of the trust receipts, supra.
[38] Philippine Commercial International Bank v. Court of Appeals, 325 Phil. 588, 597 (1996).
[39] Ching v. Court of Appeals, supra note 35, at 43-44, citing Samo v. People, 5 SCRA 354 (1962) and Vintola v. Insular Bank of Asia and America, 150 SCRA 578 (1987).
[40] Pilipino Telephone Corporation v. Tecson, G.R. No. 156966, May 7, 2004, 428 SCRA 378, 380; National Development Company v. Madrigal Wan Hai Lines Corporation, 458 Phil. 1038, 1050-1051 (2003).
[41] Metropolitan Bank and Trust Company v. Tonda, 392 Phil. 797, 813 (2000).
[42] Colinares v. Court of Appeals, 394 Phil. 106, 123 (2000).
[43] Kilosbayan, Inc. v. COMELEC, 345 Phil. 1140, 1176 (1997).
[44] Serapio v. Sandiganbayan, 444 Phil. 499, 528-529 (2003); Metropolitan Bank and Trust Company v. Tonda, supra note 41, at 814.