DAMIAN ROBLES, PETITIONER, VS. THE COURT OF APPEALS AND THE PEOPLE OF THE PHILIP­PINES, RESPONDENTS.

In an information dated 2 March 1978, petitioner Damian Robles was
charged before the then Court of First Instance of Manila with the crime of
estafa, committed as follows:

“That in or about and during the period comprised between
November 19, 1976 to March 9, 1977, inclusive, in the City of Manila,
Philippines, the said accused did then and there wilfully, unlawfully and
feloniously defraud the Paramount Business Machines, a business firm duly
organized and doing business in said City, represented by Roberto Ng y Shiang
Shee, in the following manner, to wit: the said accused received in trust
from the said Roberto Ng y Shiang Shee office equipments consisting of adding
machines, typewriters and calculators all amount­ing to P14,895.00 for the
purpose of selling the same, under the express obligation of turning over the
proceeds of the sale, if sold, or of returning the said office equipments if
not sold, to the said Roberto Ng y
Shiang Shee; but the said accused, once in possession of the said office
equipments and far from complying with his obligation as aforesaid, failed and
refused and still fails and refuses to remit the corresponding amount of the
said office equipments or to return the said office equipments, despite
repeated demands made upon him to do so, and instead, with grave abuse of
confidence and with intent to defraud, did then and there wilfully, unlawfully
and feloniously misappropriate, misapply and convert the same to his own personal use and benefit, to the damage and
prejudice of the said Paramount Business Machines, in the said amount of
P14,895.00, Philippine Currency.

Contrary to law.”^[1]

The trial court, in its decision dated 20 February 1979,
convicted petitioner Robles of the crime charged. The dispositive portion of this decision reads:

“WHEREFORE, the Court finds the accused Damian Robles guilty
beyond reasonable doubt of the crime of estafa defined and penalized under the
provisions of Article 315 subdivision No. 1 (b) of the Revised Penal Code and
there being no aggravating or mitigating circumstance present and applying the
provisions of the Indeterminate Sentence Law, hereby sentences the said accused
to suffer the penalty of imprisonment ranging from TWO (2) YEARS, ELEVEN (11)
MONTHS and TEN (10) DAYS of prision correccional
in its minimum and medium period as minimum, to SIX (6) YEARS, EIGHT
(8) MONTHS and TWENTY (20) DAYS
of prision mayor medium,
as maximum, together with the accessory penalties provided for by law and to pay the costs. The accused is further ordered to indemnify
the complainant the amount of P14,895.00 without subsidiary imprisonment in
case of insolvency.

SO ORDERED.”^[2]

Dissatisfied, petitioner Robles appealed to the Court of
Appeals. On 17 September 1981, the
appellate court affirmed petitioner Robles’ conviction but modified the penalty
imposed by the trial court as follows:

“WHEREFORE, with the modification that accused-appellant
DAMIAN ROBLES shall suffer the penalty of imprisonment from SIX (6) MONTHS of arresto
mayor, as minimum, to TWO (2) YEARS, ELEVEN (11) MONTHS and TEN (10)
DAYS of prision correccional, as maximum, and to indemnify the
complainant the amount of P11,395.00, the appealed decision is hereby affirmed
in all other respects, and with costs against accused-appellant.

SO ORDERED.”^[3]

The facts as found
by respondent Court of Appeals are as follows:

“Roberto Ng is the
owner and the sales manager of the Paramount Business Machines, a firm dealing
in office equipment and has offices located at 1027 Severino Reyes Street, Sta.
Cruz, Manila (pp. 10, 11, TSN, July 19, 1978).

On November 19, 1976, Roberto Ng
entrusted to Damian Robles the following items:

one – Casio electronic calculator   P800.00

one – Victor adding machine            600.00

which items were covered by a delivery
trust receipt (Exhibit ‘A,’ Folder of Exhibits: pp. 14, 15, TSN., July 19, 1978).

On February 8, 1977, Roberto Ng
again entrusted to Damian Robles several office equipment, to wit:

one – Standard Imperial typewriter 16″
carriage                   P3,500.00

one – Standard Imperial typewriter 26″
carriage                   3,200.00

one – Olympia, standard electric
typewriter, 13″ carriage    2,800.00

which items were covered by another
delivery trust receipt (Exhibit ‘B,’ Folder of Exhibits; pp. 23, 24, 25, 26, TSN, July 19,
1978). For these items, Damian Robles gave
Roberto Ng two postdated checks, PCIB Checks No. 15654 and 15655 dated March
25, 1977 and March 15, 1977, respectively (Exhibits ‘C’ and ‘C-1,’ Folder of
Exhibits; pp. 226, 27, TSN, July 19, 1978), for the respective amounts of
P3,200.00 and P4,200.00 (id.). On
February 10, 1977, Damian Robles was again entrusted by Roberto Ng with an
Olivetti Manual typewriter, 11″ carriage worth P1,000.00, which item was
covered by another delivery receipt (Exhibit ‘D,’ Folder of Exhibits; p. 33,
TSN, July 19, 1978). On March 7, 1977,
Damian Robles received from Roberto Ng one Olivetti adding machine worth
P600.00 which item was covered by another delivery receipt (Exhibit ‘E,’ Folder
of Exhibits; pp. 37, 38, TSN, July 119, 1978). And on March 8, 1977 and March 9, 1977, the same Damian Robles was again
entrusted by Roberto Ng the
following:

one – Olivetti standard typewriter 15″
carriage                     P1,400.00

one – Olympia
portable typewriter 10″ carriage                          995.00

which items were covered by delivery trust
receipts (Exhibits ‘F’ and ‘G,’ Folder of Exhibits; pp. 39, 40, 41, 42, 45,
TSN, July 19, 1978). For all these
items delivered to Damian Robles, the latter agreed to sell them and remit the
proceeds of the sales to Roberto Ng, or to return the items if they are unsold
(pp. 57, 58, 67, 68, TSN, July 19, 1978).

The postdated check PCIB Check No. 15655 dated March 15, 1977 for
the amount of P4,200.00 issued by Damian Robles was not honored by the drawee
bank since Damian Robles caused the stoppage of its payment (pp. 29, 30, 31,
46, TSN, July 19, 1978).

On the other hand, the accused-appellant admits having received
from the complainant Roberto Ng the business machines enumerated in the
delivery receipts, Exhibits ‘A,’ ‘B,’ ‘D,’ ‘E,’ ‘F,’ and ‘G,’ (pp. 4, 8, TSN,
December 5, 1978) and admits likewise that it was his agreement with Roberto Ng
that he (accused) would sell the office equipment and to turn over the proceeds
to Roberto Ng (p. 8, TSN, December 5, 1978). He however, claims that the Imperial Standard Typewriter worth P3,500.00
was returned to Paramount as confirmed by the signature of Mr. Ng in Annex ‘B’
(Original Exhibits, p. 12) after the notation ‘return’ was placed there by
Fiscal Arranz (C.A. Decision, p. 11; Rollo, p. 38).

The total value of the office equipment received by
accused-appellant Damian Robles from the complainant is P14,895.00.”^[4]

In this Petition for Review, petitioner Robles makes the
following arguments:

1. the Court of Appeals gravely erred in law in
ruling that under the delivery trust receipts petitioner received the articles
covered therein in trust or with the obligation to account for the proceeds
thereof, or to return the same; and

2. the Court of Appeals committed serious error
in law in finding petitioner guilty of estafa under Subdivision No. 1 (B),
Article 315 of the Revised Penal Code.

Petitioner, in respect of the first ground, insists that the
delivery trust receipts which he had signed were “merely intended to
evidence the fact that the articles therein listed were delivered to and
received by him.” The documents do not, petitioner contends, reflect the
true intention of the parties considering that even before he could comply with
the stipulations in those receipts, that is, to return the articles enumerated
therein within the period of two (2) days from the date of the receipt, the
complainant delivered to him other articles without demanding compliance with
the condition imposed by the earlier delivery trust receipts. In short, it is his position that the delivery trust receipts are “mere
formalities” whose printed terms and conditions appearing therein were not
intended by the parties to govern their transactions; that those transactions
referred to were in fact sales on trial basis for a period of two (2) days. Thus, when he failed to return the various
pieces of equipment within the two-day period, he was deemed to have purchased
the same and his liability should therefore be only civil, i.e., to pay the
purchase price.

The Court is not persuaded. The delivery trust receipts evidencing the transactions between
Paramount Business Machines (“Paramount”) and petitioner state, in
relevant part:

“In trust for and as the property of said Paramount Business Machines
the above described merchandise having been delivered to me/us for trial and with the obligation on
my/our part to return the same in good order and condition within 2 days from the date hereof
unless before the expiration of said period, I/we definitely purchase
the same and pay the price hereof.

In the meantime, pending the sales of the above described
merchandise to me/us, I/we agree and undertake to be absolutely responsible
as insurer for the proper care and conservation of said
property and to be liable for any loss or destruction.

I/we further agree to keep the said
property in my/our residence or
place of business at the address indicated herein above and not to remove
the same from said promise without the previous knowledge and consent of
Paramount Business Machines.”^[5]

(Emphases supplied)

The quoted provisions of the trust
receipts show clearly (1) that Paramount retained ownership of the office
equipment covered by the receipts; (2) that possession of the goods was
conveyed to petitioner subject to a fiduciary obligation either to return them
within a specified period of time or
to pay or account for the price of proceeds thereof. Surrounding circumstances also showed that the transactions were
not ordinary sales on trial basis. There were six (6) transactions involved, not just one. In each transaction, there were several
items of equipment delivered to petitioner, instead of just one, thereby
indicating that petitioner was not an ordinary buyer who would himself use the
articles bought, but rather a commission merchant. Additional items of equipment were delivered to petitioner even
before compliance with his duty under one trust receipt to return within two
(2) days the office equipment he had received. He admitted in his Affidavit^[6] dated
21 October 1977 that he was Paramount’s sales agent. Petitioner, however, failed to return the machines upon demand by
Paramount and at the same time, failed to account for the sale proceeds
thereof. We agree with the Court of
Appeals and the trial court on this matter. The Court of Appeals said in part:

“We hereby agree in full and quote hereunder the following
findings and conclusions of the court a quo in the appealed
decision because the same are in
accordance with the evidence and the law.

A scrutiny of the evidence presented, the Court is more inclined to give more
weight and credibility to the evidence of the prosecution. The printed conditions are clearly inscribed
and forms [sic] part of the agreement between the accused and the complainant,
for on the delivery trust receipts (Exh. A-1) of the Paramount Business
Machines x x x:

x x x                                                              x
x x                                                                 x
x x

The conditions (Exhibit A-1) stipulated on all the delivery trust
receipts signed by the accused specifically stated that the [items] were received
by the accused from the complainant ‘in trust for and as property of the said
Paramount Business Machines’ and the further stipulation that the same is ‘with
the obligation on my/our part to return the same in good order and condition
within 2 days from the date hereof.’ The ordinary and accepted meaning of
the phrase ‘in trust’ is an obligation upon a person arising out of a
confidence reposed in him to apply properly, faithfully and according to such
confidence (Bouvier’s Law Dictionary, Baldwins Century Edition, page 1192.)
That whatever articles are received in trust by the accused if sold by him
the proceeds thereof are to be turned over to the owner, the complainant
herein, and if not sold, the same articles are to be returned to the
complainant within two days from receipt of the same.

The provisions of the conditions embodied in the trust receipts
need no further interpretation or elucidation for the same is clear, specific
and explicit. The Court has observed
the accused to be an intelligent man far [sic] from his qualifi­cation of being
a college professor and that he must have fully understood the contents
of the stipulations appearing on the face of the delivery trust receipts which
he actually signed upon receipt of the articles described therein. The Period for him (accused) to return the
articles is clear which is ‘2 days from the date hereof,’ meaning from the date
he received the articles, the period mentioned being specifically typed on the
blank provided therefore (sic) which the Court believes the accused
could not have missed and is aware he signed these trust receipts.”^[7]
(Emphases supplied)

We note in this connection that the delivery trust receipts here
involved in fact constituted trust receipts within the meaning of Presidential
Decree No. 115, known as the “Trust Receipts Law,” which took effect
on 29 January 1973. Section 4 thereof
defines a “trust receipt” and a “trust receipt transaction”
for purposes of the decree in the following terms:

“Sec. 4. What constitutes a trust receipt transaction.
— A trust receipt transaction, within the meaning of this Decree, is any
transaction by and between a person referred to in this Decree as the entruster, and another person referred to
in this Decree as the entrustee, whereby the entruster, who owns or holds
absolute title or security interests over certain specified goods
documents or instruments, releases the same to the possession of the
entrustee upon the latter’s execution and delivery to the entruster of a
signed document called a ‘trust receipt’ wherein the entrustee binds
himself to hold the designated goods, documents or instruments in trust
for the entruster and to sell or otherwise dispose of the goods,
documents or instruments with the obligation to turn over to the entruster
the proceeds thereof to the extent of the amount owing to the entruster or
as appears in the trust receipt or the goods, documents or instruments themselves
if they are unsold or not otherwise disposed of, in accordance with the
terms and conditions specified in the trust receipt, x x x.” (Emphases
supplied)

We note that under Section 13 of the
Trust Receipts Law, the violation by an
entrustee of his obligations under a trust receipt document, more specifically
his failure to turnover the proceeds of the sale of the goods covered by the
trust receipt, or to return said goods as they were not sold or disposed of,
would constitute the crime of estafa under Article 315 (1)(b), Revised Penal
Code. Section 13 reads as follows:

“SEC. 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
Number 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.” (Emphases
supplied)

In Lee v. Rodil,^[8] which
involved a criminal prosecution for estafa relating to goods covered by a trust
receipt alleged to have been committed on 26 July 1982, this Court affirmed the
conviction for estafa under paragraph 1 (b), Article 315 of the Revised Penal
Code and in the process, upheld Section 13 of Presidential Decree No. 115
against constitutional challenge. The
Court, speaking through Mr. Justice Gutierrez, Jr., said:

“Acts involving the violation of trust receipt agreements occurring after 29 January 1973 would make the accused criminally liable
for estafa under paragraph 1 (b), Article 315 of the Revised Penal Code,
pursuant to the explicit provision in Sec. 13 of P.D. 115 (Sia v. Court of
Appeals, G.R. No. 40324, October 5, 1988).

The petitioner questions the constitution­ality of Sec. 13 of P.D.
115. She contends that it is violative
of the constitutional right that ‘No person shall be imprisoned for debt or
non-payment of a poll tax’.

The petitioner has failed to make out a strong case that P.D. 115
conflicts with the constitutional prohibition against imprisonment for
non-payment of debt. A convincing
showing is needed to overcome the presumption of the validity of an existing
statute.

The criminal liability springs from the violation of the trust
receipt.

We bear in mind the nature of a trust receipt agreement. x x x

x x x                                                              x
x x                                                                 x
x x

x x x. The violation of a trust receipt committed by disposing of
the goods covered thereby and failing to deliver the proceeds of such sale has
been squarely made to fall under Art. 315 (1)(b) of the Revised Penal Code, x x
x”^[9]

In the case at bar, the acts of petitioner which were complained
of were committed between 19 November 1976 and 9 March 1977, that is, long
after the beginning date of effectivity of Presidential Decree No. 115. In accordance with the provisions of Section
13, Presidential Decree No. 115, quoted above, the failure of petitioner Damian
Robles to turnover to the entruster Paramount the proceeds of the sale of goods
covered by the delivery trust receipts and to return the said goods,
constituted estafa punishable under Article 315 (1)(b) of the Revised Penal
Code.

It is also pertinent to point out that quite apart from and
even in the absence of the provisions of Section 13 of the Trust Receipt Law,
the failure of Damian Robles to comply with his fiduciary obligation under the
delivery trust receipts here involved, constituted the offense of estafa
punishable under Article 315 (1) (b) of the Revised Penal Code. In other words, the elements of the offense
of estafa set out in Article 315 (1)(b) are present in the instant case. Those elements are: (1) “unfaithfulness or abuse of
confidence;” (2) “misappropriating x x x money or goods x x x; (3)
received by the offender in trust or on commission x x x or under any other obligation
involving the duty to make delivery of or to return the same x x x;” and
(4) “to the prejudice of another.” The delivery trust receipts, in
the case at bar, admittedly signed by petitioner Damian Robles imposed on him
the duty to return the articles or the proceeds thereof to Paramount within two
(2) days from the specified dates
of the trust receipts. The failure to
account, upon demand, for funds or property held in trust is evidence of
misappropriation^[10]
which, not having been explained away or rebutted by petitioner Damian Robles,
warranted his conviction for estafa under the Revised Penal Code. This was settled doctrine long before the
promulgation of the Trust Receipts Law.^[11]

WHEREFORE, the present Petition for Review is hereby
DENIED for lack of merit and the Decision of the Court of Appeals in C.A.-G.R.
No. 23216-CR dated 17 September 1981, is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

Fernan, C.J., (Chairman), Gutierrez, Jr., Bidin, and Davide, Jr., JJ., concur.

^[1]
Original Record, p. 1.

^[2]
Id., pp. 62-63.

^[3]
Rollo, pp. 40-41; Court of Appeals’ Decision, pp. 13-14.

^[4]
Id., pp. 30-31; Court of Appeals’ Decision, pp. 3-4.

^[5]
Exhibit “A-1,” Folder of Exhibits, p. 1.

^[6]
Exhibit “ H,” Folder of Exhibits,
pp. 8-9.

^[7]
Rollo, pp. 31-33; Court of Appeals’ Decision, pp. 4-6.

^[8]
175 SCRA 100 (1989).

^[9]
179 SCRA at 108-109.

^[10]
Hayco v. Court of Appeals, 138 SCRA 227 (1985); People v. Cuevo,
104 SCRA 312 (1981); Tubbs v. People, 101 Phil. 114 (1957).

^[11]
People of the Philippines v. Yu Chai Ho, 53 Phil. 874 (1928); Samo v.
People of the Philippines, 115 Phil. 345 (1962).