PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. BERNARD G. MIRTO, ACCUSED-APPELLANT.

People versus Mirto

The Case

This is the People of the Philippines against Bernard G. Mirto, a branch manager of Union Cement Corporation for the Tuguegarao City area, who was charged with qualified theft for collecting payments from cement buyers and depositing them in his personal bank account and in the accounts of a certain Magno Lim instead of remitting them to his employer. The case matters because it is the Supreme Court's clean statement of the elements of qualified theft committed with grave abuse of confidence, and of the distinction between material possession and juridical possession that decides whether that qualifying circumstance can be appreciated against an employee entrusted with his employer's funds.

Procedural History

Seven Informations for qualified theft were filed against the accused before the Regional Trial Court, Branch 5, in Tuguegarao City, Cagayan. Upon arraignment he entered a plea of not guilty, and trial on the merits followed. On March 24, 2008, the trial court rendered judgment acquitting him in three of the cases for insufficiency of evidence and for lack of showing that he profited from the deposits made to the account of Magno Lim, but convicting him in the four remaining cases and sentencing him to reclusion perpetua, with an order to restitute the private complainant the total amount of 2,279,350 pesos.

Aggrieved, the accused appealed to the Court of Appeals. On August 24, 2009, the appellate court affirmed the conviction in full, holding that he had only material possession of the checks and not juridical possession, and that there was neither a principal-agent relationship between him and the company nor any authority for him to open a personal account where company funds would be held in trust. The case then reached the Supreme Court by appeal. Both the Office of the Solicitor General and the accused manifested that they would not file supplemental briefs, so the Court resolved the appeal on the sole assignment of error already raised and passed upon below.

Facts

Bernard G. Mirto was branch manager of Union Cement Corporation for the Tuguegarao City area, a position that gave him authority to receive payments from the company's customers. Instead of selling cement only to dealers with credit lines, he caused cement bags to be sold directly to truckers and other buyers, and he instructed these customers to pay by pay to cash checks. He issued no receipts for these collections. Rather than remitting the checks to the company, he deposited them in his personal account with Security Bank and Trust Company, Tuguegarao City Branch, or in the accounts of a certain Magno Lim at MetroBank and Equitable PCIBank.

On June 29, 2001, at about noon, the accused confided to his officemate, Branch Manager Restituto P. Renolo, that he had misappropriated company funds. Later that day Renolo found on the accused's table a partly folded handwritten letter addressed to Assistant Vice President Reynaldo S. Santos, in which the accused admitted taking company funds and enumerated the accounts and amounts involved. Renolo read the letter over the phone to Santos that evening and faxed it the following day. The company formed a special audit team from the Group Internal Audit of the Phinma Group of Companies, which audited the branch from July 3 to July 25, 2001 and interviewed the buyers, all of whom attested that they had been sold cement directly and had issued pay to cash checks upon the accused's instruction.

In a meeting at the company's sales office in Poro Point, San Fernando City, La Union, the accused admitted misusing company money and pleaded that he not be terminated and that no charges be filed, offering to pay the amount back from his salary on installment. The audit report dated August 8, 2001 confirmed the handwritten admission and a certification the accused executed on July 20, 2001 identifying the bank accounts and their holders, and showed that his total unremitted collections from May 25, 2001 to June 23, 2001 amounted to 6,572,750 pesos. The bank's customer service officer confirmed through the accused's statement of account that the checks had been deposited to his account and had cleared.

Issues

• Whether or not the Informations adequately informed the accused of the nature of the offense charged against him.
• Whether or not the accused had juridical possession, rather than mere material possession, of the checks he collected, such that the qualifying circumstance of grave abuse of confidence cannot be appreciated against him.
• Whether or not the prosecution established all the elements of qualified theft under Article 310, in relation to Article 308, of the Revised Penal Code.

Applicable Provisions

Article 308 of the Revised Penal Code defines theft:

Article 308. Who are liable for theft. Theft is committed by any person who, with intent to gain but without violence, against, or intimidation of persons nor force upon things, shall take personal property of another without the latter's consent.

This provision supplies the elements of the crime and is the measure against which the Court tested the accused's arguments on taking, ownership, consent, and intent to gain.

Article 310 of the Revised Penal Code qualifies the crime:

Article 310. Qualified Theft. The crime of theft shall be punished by the penalties next higher by two degrees than those respectively specified in the next preceding article, if committed by a domestic servant, or with grave abuse of confidence, or if the property stolen is motor vehicle, mail matter or large cattle or consists of coconuts taken from the premises of a plantation, fish taken from a fishpond or fishery or if property is taken on the occasion of fire, earthquake, typhoon, volcanic eruption, or any other calamity, vehicular accident or civil disturbance.

This is the provision under which the accused was charged and convicted, the qualifying circumstance being grave abuse of confidence arising from the trust reposed in him as branch manager.

Ruling

On the first issue, the Court upheld the sufficiency of the Informations, as the accused himself had raised no defect that prevented him from understanding the charges, and the appeal was resolved on the sole assignment of error he had already argued below.

On the second issue, the Court agreed with the Court of Appeals that the accused had only material possession of the checks, not juridical possession. The collections belonged to the company, and he had no right or title to retain them as against his employer. His theory that he merely held the funds in trust and remitted them once the checks cleared was rejected as incredible, because he adduced no evidence of any actual remittance and could not explain why some checks went to the accounts of Magno Lim. There being neither a principal-agent relationship nor authority to hold company funds in a personal account, the qualifying circumstance of grave abuse of confidence stood.

On the third issue, the Court found all the elements present. The checks were personal property belonging to the company; the taking was without the owner's consent, as shown by the company's swift formation of an audit team and its filing of the complaints upon learning of the misappropriation; intent to gain was established through the buyers' affidavits attesting to the pay to cash arrangement; and the taking was accomplished without violence or intimidation. On grave abuse of confidence, the Court held that the accused's position entailed a high degree of confidence and access to funds collected from clients, and that he exploited precisely that trust to enrich himself. The Court summarized the elements:

The elements of Qualified Theft committed with grave abuse of confidence are as follows: Taking of personal property; That the said property belongs to another; That the said taking be done with intent to gain; That it be done without the owner's consent; That it be accomplished without the use of violence or intimidation against persons, nor of force upon things; That it be done with grave abuse of confidence.

Doctrine

Qualified theft under Article 310, in relation to Article 308, of the Revised Penal Code requires the concurrence of six elements: the taking of personal property; that the property belongs to another; that the taking be done with intent to gain; that it be done without the owner's consent; that it be accomplished without violence or intimidation against persons or force upon things; and that it be done with grave abuse of confidence. An employee who receives his employer's funds by reason of the trust and confidence reposed in him has only material possession, not juridical possession, of those funds; he has no right or title to retain them, and his appropriation of them constitutes unlawful taking attended by grave abuse of confidence. The trust that the employer reposes in the employee, and which the employee exploits to enrich himself, is what raises the theft to its qualified form and warrants the penalty next higher by two degrees.

Disposition

The Supreme Court denied the appeal and affirmed the decision of the Court of Appeals in all respects, with costs against the accused.

Remember This

Memorize the line that an employee entrusted with his employer's collections has only material possession, not juridical possession, so that his appropriation of them is qualified theft through grave abuse of confidence. Examiners use this case to test the elements of qualified theft and the material versus juridical possession distinction in estafa and theft questions involving employees handling funds.