01 Lee vs. Rodil

CASE 1: Rosemarie M. Lee vs. Hon. Rodil (RTC Manila judge) and People o !"e P"ilippines #.R. $o. %&' ' *ul+ 1,%, -ACTS: 1. Lee was the representative of CS Lee Enterprises Inc which opened a letter letter of credit credit worth worth Php 154,71 154,711. 1.97 97 with with Philip Philippin pine e Ban Ban of Co!!"nications for the p"rchase of !erchandise. necessar' ' doc"!ent doc"!ent and then . 19#$% C"lt"re &edia received the necessar !erchandise%% Lee oliga!ed e/e0u!ed a !rus! re0eipt for the said !erchandise

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"ersel !o "old !"e mer0"andise in !rus! !o sell !"e same in 0as" acco"nt for the proceeds if sold) (o or !"e a00oun! o !"e an2 (o acco"nt

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ret"rn the !erchandise to the *an in case of fail"re to sell the sa!e)

3. 4esp 4espi! i!e e repe repea! a!ed ed dema demand nds5 s5 s"e s"e ail ailed ed !o 0omp 0ompl+ l+ 6i!" 6i!" "er "er oliga!ion and ins!ead appropria!ed !"e mer0"andise or "er o6n personal use. 19#5%% Lee Lee was was char char+e +ed d for for esta estafa fa.. S"e . 19#5 S"e moved moved !o 7uas" 7uas" !"e inorma!ion on !"e  grounds: o T"e viola!ion viola!ion o a !rus! agreemen! agreemen! does no! 0ons!i!u! 0ons!i!u!e e es!aa despi!e an e/press provision in !"e Trus! Re0eip!s La6 0"ara0!eri8ing i! as es!aa. o P4 11' is viola!ive o !"e rig"! !"a! no person s"all e imprisoned or non9pa+men! o de!. '. (C denied the !otion to -"ash and "pheld the constit"tionalit' of

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the law. . & denied. ence, the present petition.

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P/ 115, S2 e3pressl' provides% (he ailure o an en!rus!ee !o !urn doc"!ents nts or over over !"e !"e pro0 pro0ee eeds ds o !"e !"e sale sale o !"e !"e good goods s, doc"!e instr"!ents 0overed + a !rus! re0eip! !o !"e e/!en! o !"e amoun! o6ing !o !"e en!rus!er or as appears in the tr"st receipt or to ret"rn said said +oods, +oods, doc"!e doc"!ents nts or instr" instr"!en !ents ts if the' the' were were not sold or disposed disposed of in accordanc accordance e with the ter!s of the tr"st receipt receipt s"all 0ons!i!u!e !"e 0rime o es!aa n the case of People v. C"evo 619#1% It was the lower co"rt that dis!issed the infor!ation and r"led o that a violation +ives rise to a civil action onl'. o "t of the 11 !e!*ers of the SC, a !a8orit' of  8"stices :C; were of the view that the violation constit"tes estafa, $ voted otherwise otherwise,, another another $ inhi*ited inhi*ited the!selves the!selves.. (he view of the dissentin+ 8"stices prevailed as a res"lt of the want of 1 vote to

reverse reverse the order of the lower lower co"rt. 6SC affir!ed affir!ed the LC decision despite the !a8orit' view SC &a8orit' view% (he conversion *' the tr"stee in a tr"st o receipt receipt of the proceeds proceeds of the sale falls !ost literall' literall' and directl' directl' "nder the provision provision of estafa estafa thr" !isappropria !isappropriation tion "nder non> pa'!ent pa'!ent of the sec"red loan thro"+h a tr"st tr"st receipt receipt sho"ld not *e per!itted in this da' and a+e. o /issent of /e Castro% (he *an cannot *e considered as the tr"e owner of the +oods which has f"ll power of disposition over the sa!e. therwise, it wo"ld disre+ard the loan feat"re 6L?C. (he tr"st receipt is s"pposed to +ive a stron+er sec"rit' for the loan o*tained *' the i!porter. (here wo"ld have *een no need for P/ 115 had there *een no s"ch do"*t if the violation constit"tes estafa. n the case of Sia v. People 619#2% o /e Castro penned the said case. If the tr"st receipt transaction is s"scepti*le to two reasona*le o interpretations, one +ivin+ rise onl' to civil lia*ilit' and the other also +eneratin+ cri!inal lia*ilit', the first sho"ld *e adopted as !ore favora*le to the offender. Lee "sed the C"evo and Sia case to s"pport her stand. owever, the violation violations s in *oth cases cases occ"rred occ"rred in the 19@=s. 19@=s. P/115 P/115 was not applied applied *eca"se *eca"se the -"estion -"estioned ed acts were co!!itte co!!itted d *efore *efore its effectivit'?pro!"l+ation effectivit'?pro!"l+ation in 1972.

>iola!ions o !rus! re0eip! agreemen!s o00urring a!er , *an 1,?3 6ould !"us ma2e !"e a00used 0riminall+ liale or es!aa pursuan! !o P411'. •

n the constit"tionalit' of P/115% < convincin+ showin+ is needed to overco!e the pres"!ption of the validit' of a stat"te.

=n !"e na!ure o a !rus! re0eip! agreemen!:
T"e person person prejud prejudi0e i0ed d + !"e misapp misapprop ropria ria!io !ion n or 0onversion o goods need no! e !"e o6ner !"ereo. (he a"thors si!pl' "sed the phrase Ato the pre8"dice of another

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(he fail"re of a person to t"rn over the proceeds or +oods not sold covered *' a tr"st receipt is a puli0 nuisan0e. (he act is not inherentl' wron+ *"t *eca"se of the har! it inflicts on the co!!"nit', it !a' *e p"nished as !al"! prohi*it"!.

CASE : Colinares vs. >eloso The ownership of the merchandise continues to be vested in the person who had advanced payment until he has been paid in full, or if the merchandis merchandise e has already already been sold, the proceeds of the sale should be turned over to him by the importer or by his representative or successor in interest.

-a0!s% &elvin Colinares and Lordino eloso 6hereafter Petitioners were contracted contracted for a considera consideration tion of P 4@,@@@ 4@,@@@ *' the Car!elite Car!elite Sisters of Ca+a'an de ro Cit' to renovate the latter=s convent at Ca!a!an>an, Ca+a'an de ro Cit'. Colinares applied for a co!!ercial letter of credit with the Philippin Philippine e Banin+ Banin+ Corporatio Corporation, n, Ca+a'an Ca+a'an de ro Cit' *ranch *ranch 6hereafter PBC in favor of C& B"ilders Centre. PBC approved the letter of credit credit for P$$,2# P$$,2#9.# 9.#@ @ to cover cover the f"ll f"ll invoic invoice e val"e val"e of the +oods. +oods. Petitioners si+ned a pro>for!a pro>for!a tr"st receipt as sec"rit'. sec"rit'. PBC de*ited P,7$@ P ,7$@ fro! Petitioners= !ar+inal deposit as partial pa'!ent of the loan.
nor a*"se of confidence in the handlin+ of !one' to the pre8"dice of PBC. Petitioners contin"all' endeavored to !eet their o*li+ations, as shown *' several receipts iss"ed *' PBC acnowled+in+ pa'!ent of the loan.

;ssue% Hhether or not the transaction of Colinares falls within the a!*it of the Law on (r"st eceipt

Held% Colinares received the !erchandise fro! C& B"ilders Centre on 2@ cto*er 1979. n that da', ownership over the !erchandise was alread' transf transferr erred ed to Petiti Petitione oners rs who were were to "se the !ateri !aterials als for their their constr"ction pro8ect. It was onl' a da' later, 21 cto*er 1979, that the' went to the *an to appl' for a loan to pa' for the !erchandise. (his sit"ation *elies what nor!all' o*tains in a p"re tr"st receipt transaction where +oods are owned *' the *an and onl' released to the i!porter in tr"st s"*se-"ent to the +rant of the loan. (he *an ac-"ires a Asec"rit' interest in the +oods as holder of a sec"rit' title for the advances it had !ade to the entr"stee. (he ownership of the !erchandise contin"es to *e vested in the person who had advanced pa'!ent "ntil he has *een paid in f"ll, or if the !erchandise has alread' *een sold, the proceeds of the sale sho"ld *e t"rned over to hi! *' the i!porter or *' his representative or s"ccessor in interest. (o sec"re that the *an shall *e paid, it taes f"ll title to the +oods at the ver' *e+innin+ and contin"es to hold that title as his indispensa*le sec"rit' "ntil the +oods are sold and the vendee vendee is called called "pon to pa' for the!) the!) hence, hence, the i!porter has never owned the +oods and is not a*le to deliver possession. In a certain !anner, tr"st receipts partae of the nat"re of a conditional sale sale where where the i!por i!porter ter *eco!e *eco!es s a*sol" a*sol"te te owner owner of the i!port i!ported ed !erchandise as soon as he has paid its price. (here are two possi*le sit"ations in a tr"st receipt transaction. (he first is covered *' the provision which refers to !one' received "nder the o*li+ation involvin+ the d"t' to







1 S"per!a3 S"per!a3 Philippin Philippines, es, Inc. 6S"per!a3 6S"per!a3 is a do!estic do!estic corporat corporation ion en+a+ed in the constr"ction *"siness $ n vario"s vario"s occasion occasions s in the !onth !onth of President for Internal fo"r 6$4 tr"st receipts as sec"rit' for the constr"ction !aterials and to hold those !aterials or the proceeds of the sales in tr"st for &etro*an to the e3tent of the a!o"nt stated in the tr"st receipts. 4 Hhen Hhen the $4 tr"st receip receipts ts fell fell d"e and despite despite the recei receipt pt of a de!and letter. S"per!a3 failed to pa' or deliver the +oods or proceeds to &etro*an. 5 Instead, Instead, S"per!a3, S"per!a3, thro"+h thro"+h petitioner, petitioner, re-"este re-"ested d the restr"ct" restr"ct"rin+ rin+ of the loan. Hhen the intended restr"ct"rin+ of the loan did not !aterialiGe, &etro*an sent another de!and letter. 
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liale. B"en o!" par!ies en!er in!o an agreemen! 2no6ing ull+ 6ell !"a! !"a! !"e re!urn re!urn o !"e goods goods suje0 suje0!! o !"e !rus! re0eip re0eip!! is no! possile even even 6i!"ou! an+ aul! on !"e par! o !"e !rus!ee5 i! is no! a !rus! re0eip! !ransa0!ion penali8ed under Se0. 13 o P4 11' in rela!ion !o Ar!. 31'5 par. 1() o !"e RPC5 as !"e onl+ oliga!ion a0!uall+ agreed upon + !"e par!ies 6ould e !"e re!urn o !"e pro0eeds o !"e sale !ransa0!ion. T"is T"is !ransa !ransa0!i 0!ion on e0ome e0omes s a mere mere loan5 loan5 6"ere 6"ere !"e orro6er is oliga!ed !o pa+ !"e an2 !"e amoun! spen! or !"e pur0"ase o !"e goods R
re0eip! !ransa0!ion u! one o simple loan Petitione Petitioner=s r=s ad!issio ad!issionth nthat at he si+ned si+ned the tr"st receipts receipts on *ehalf *ehalf of







B"a! is Trus! Re0ep! Transa0!ions < tr"st receipt transaction is one where the entr"stee has the o*li+ation to deliver to the entr"ster the price of the sale, or if the !erchandise is not sold, to ret"rn the !erchandise to the entr"ster. entr"ster. (here (here are, therefore, therefore, two o*li+ations o*li+ations in a tr"st tr"st receipt receipt trans transact actio ion% n% the first first refers refers to !one' !one' receiv received ed "nder "nder the o*li+a o*li+atio tion n invo involv lvin in+ + the the d"t' d"t' to t"rn t"rn it over over 6 entregarla to the owner owner of the the !erchandise sold, while the second refers to the !erchandise received "nder the o*li+ation to Aret"rn it 6 devolvera to the owner.1 < violation of an' of these "ndertain+s constit"tes Estafa defined "nder
&oreover, a tr"st receipt is considered a sec"rit' transaction intended to aid in financin+ i!porters and retail dealers who do not have s"fficient f"nds or reso"rces to finance the i!portation or p"rchase of !erchandise, and who !a' not *e a*le to ac-"ire credit e3cept thro"+h "tiliGation, as collateral, of the !erchandise i!ported or p"rchased.

(he @>da' credit ter! lapsed witho"t Floria pa'in+ her o*li+ation "nder the (r"st eceipt?SCS. ence, PPI wrote collection letters to her. PPI alle+ed that Floria had violated the Afid"ciar' "ndertain+ in the (r"st eceipt a+ree!ent coverin+ prod"ct withdrawals "nder the Special Credit Sche!e which were s"*se-"entl' char+ed to defendant dealer=s re+"lar credit line) therefore, she is +"ilt' of fra"d"lentl' !isappl'in+ !isappl'in+ or convertin+ to her own "se the ite!s delivered to her as contained in the invoices. It char+ed that Floria did not ret"rn the +oods indicated in the invoices and did not re!it the proceeds of sales. (he C< held the petitioners lia*le to PPI Afor the val"e of the fertiliGers and a+ric"lt"ral che!ical prod"cts covered *' the tr"st receipts *eca"se a credit creditor> or>de* de*tor tor relati relations onship hip e3iste e3isted d *etwee *etween n the partie parties s when, when, the petitioners Awithdrew several fertiliGers and a+ric"lt"ral che!ical prod"cts on credit) that the petitioners then ca!e "nder o*li+ation to pa' the e-"ivalent val"e of the withdrawn +oods, Aor to ret"rn the "ndelivered and?or "n"sed prod"cts within the specified period.

;ssue: Is Floria lia*le "nder (r"st eceipt law0

dealers 6"o do no! "ave sui0ien! unds or resour0es !o inan0e !"e impor!a!ion or pur0"ase o mer0"andise5 and 6"o ma+ no! e ale !o a07uir a07uire e 0redi! 0redi! e/0ep! e/0ep! !"roug !"roug" " u!ili8 u!ili8a!i a!ion5 on5 as 0olla! 0olla!era eral5 l5 o !"e mer0"andise impor!ed or pur0"ased.

(hese e esta esta*l *lis ishe hed d circ circ"! "!st stan ance ces s co!p co!pri rise sed d *' the the Ruling: (hes conte! conte!por porane aneo"s o"s and s"*se s"*se-"e -"ent nt acts acts of Floria Floria and J"irin J"irino o that that !anifested their intention to enter into the creditor>de*tor relationship with PPI show that the C< properl' held the petitioners f"ll' lia*le to PPI. (he law of contracts provides that in deter!inin+ the intention of the parties, their their conte conte!po !poran raneo" eo"s s and s"*ses"*se-"en "entt acts acts shall shall *e princi principal pall' l' considere considered. d. Conse-"en Conse-"entl' tl',, the written written ter!s of their their contract contract with PPI, *ein+ clear "pon the intention of the contractin+ parties, sho"ld *e literall' applied.

C
(he first circ"!stance was the credit line of P$@@,@@@.@@ that co!!enced

In Ng v. People, this Co"rt ac-"itted






(he fo"rth circ"!stance had to do with the "ndertain+s "nder the tr"st receipts. (he position of the petitioners was that the far!ers participants alone were o*li+ated to pa' for the +oods delivered to the! *' Floria. owever, s"ch position had no fact"al and le+al le+s to prop it "p. < close loo at the (r"st eceipt?SCS indicates that the far!er>participants were !entioned therein onl' with respect to the d"ties and responsi*ilities that Floria personall' ass"!ed to "ndertae in holdin+ +oods Ain tr"st for PPI. nder the notion of relativit' of contracts e!*odied in participants, not *ein+ the!selves parties to the contract"al doc"!ents si+ned *' Floria, were not to *e there*' lia*le.

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CASE &' Samo vs. People $os. L91?&39&. Ma+ 315 1, (opic% tr"st receipts 6Parian 1. $.

2. 4.

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Petition for certiorari. (o facil facilitat itate e the i!portatio i!portation n of tins of s-"id and sardines sardines,, Sa!o opened two letters of credit with BPI. pon the arriva arrivall of +oods, +oods, BPI advanced advanced or paid paid the *alances *alances d"e d"e in order that the +oods co"ld *e released, and re-"ired Sa!o to e3ec"te two tr"st receipts in its favor as a condition for t"rnin+ over the possession of +oods to her. She did and and acnowled+ acnowled+ed ed havin+ havin+ received received in tr"st tr"st fro! fro! BPI the +oods and o*li+ated herself to hold the! in tr"st for the latter. (he doc"!en doc"!entt a"thoriGed a"thoriGed her her to sell the +oods +oods for for the acco"nt acco"nt of the *an, "nder the o*li+ation to re!it to the latter the proceeds of the saleMif saleMif soldMor soldMor to ret"rn ret"rn the!, if not sold on or *efore ;"l' 21, 1954. Sa!o havin+ havin+ failed failed to acco"nt acco"nt for the the +oods and?o and?orr the proceeds proceeds thereof despite repeated oral and written de!ands *' BPI, a case for estafa was instit"ted a+ainst her in CDI &anila. CDI icted icted Sa C< affir!ed affir!ed

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< tr"st receipt is considered as a sec"rit' transaction intended to aid in financin+ i!porters and retail dealers who do not have s"ffic s"fficien ientt f"nds f"nds or reso"r reso"rces ces to financ finance e the i!port i!portati ation on or p"rchase of !erchandise, and who !a' not *e a*le to ac-"ire credit e3cept thro"+h "tiliGation, as collateral, of the !erchandise i!ported or p"rchased. Philippine Philippine National National Bank vs. %da. & 'i(os de )ngel )ngel *ose+ A(r"st receipts, as contracts, in a certain !anner partae of the nat"re of a condition conditional al sale, sale, 333 that is, the i!porter i!porter *eco!es a*sol"te a*sol"te owner of the i!ported !erchandise as soon as he has paid its price. (he ownership of the !erchandise contin"es to *e vested in the owner thereof or in the person person who has advanced advanced pa'!ent, pa'!ent, "ntil he has *een paid in f"ll, or if the !erchandise has alread' *een sold, the proceeds of the sale *e t"rned over to hi! *' the i!porter or *' his representative or s"ccessor in interest.K In People vs. u -hai 'o, the defendant failed to !ae pa'!ents "nder the the conditions of the tr"st receipts he iss"ed in favor of International Banin+ Corporation after possession of the i!ported +oods were transferred to hi!. (he nonpa'!ent of " Chai o co!pelled a 2 rd part' +"arantor to pa' the a!o"nt of the i!ported +oods to said *an. It was there held that this constit"ted estafa, in spite spite of the fact that the defenda defendant nt had +iven +iven s"ret' s"ret' for the f"lfill!ent of his o*li+ation "nder the tr"st receipt. In Philippine National Bank vs. )rrozal, where a part' who fails to co!pl' co!pl' with the ter!s of a tr"st tr"st receip receiptt e3ec" e3ec"ted ted *' hi!, hi!, partic"larl' to !ae pa'!ent of his o*li+ation there"nder, s"ch fail"re wo"ld *e a +ood +ro"nd for prosec"tion of estafa. In this case, notwithstandin+ repeated oral and written de!ands *' BPI, Sa!o had failed either to t"rn over to the latter the proceeds of the sale of the +oods covered *' the tr"st receipts, or to ret"rn said +oods, if the' were not sold. C< correctl' fo"nd her to *e +"ilt' of havin+ violated the provisions







balance of the value of the goods covered by the trust receipt when the same same became became due consti constitut tutes es the offens offense e penali penalized zed under under Section 1 of !.". #o. 11$

Dacts% Philippine Bloo!in+ &ills 6PB&, for short thr" its d"l' a"thoriGed officer officer,, private private respondent respondent

CASE ?: Alredo C"ing vs. Se0re!ar+ o *us!i0e5 Ass!. Ci!+ Prose0u!or Durgos9>illaver!5 Durgos9>illaver!5 *udge Sudiam5 Ri8al Commer0ial Dan2ing Corp and People o !"e P"ilippines #.R. $o.131?  -eruar+ && -ACTS: ?. Chin+ was the Senior P of Philippine Bloo!in+ &ills Inc. 6PB&I %. CBC iss"ed irrevoca*le L?C in favor of PB&Ifor its i!portation of assorted +oods s"ch as !o"lds, spare parts, pipes and *rics. (he +oods were p"rchased and delivered in tr"st to PB&I. ,. C"ing C"ing signed signed 13 !rus! !rus! re0ei re0eip!s p!s as a sure!+ sure!+.. e a+reed to hold the +oods for sale, t"rn over the proceeds if sold and to ret"rn the +oods if "nsold. (he +oods and proceeds proceeds thereof thereof were the propert' propert' of CBC.

1&. B"en !"e !rus! re0eip!s re0eip!s ma!ured5 ma!ured5 !"e goods or !"eir value 6as no! re!urned despi!e demands. T"e an2 !"en iled a 0omplain! Prosec"tor then filed 12 or es!aa 6i!" =CP Manila. (he Cit' Prosec"tor Infor!ations a+ainst Chin+ *efore (C &anila.  /ummary /ummary of 012033+ 012033+ #he 4nformati 4nformations ons against -hing -hing !ere 5uashed. 5uashed. #hey !ere filed again due to the 6rdoez ruling concerning liability under









1. CBC then re>filed its co!plaint with the CP. (he cit' prosec"tor r"led that there was no pro*a*le ca"se *eca"se Chin+=s lia*ilit' was onl' civil as a s"ret'. 1'. CBC appealed the resol"tion to the /o;. Franted. (he e3ec"tion of the receipts is eno"+h to indict hi! as the o official responsi*le for the violation. for"! shoppin+ ot the proper re!ed'. o

$. eceive eceive the procee proceeds ds in tr"st tr"st and t"rn t"rn over the the sa!e to the the e3tent of the a!o"nt owin+ to the entr"ster or as appears on the receipt) 2. Ins"re Ins"re the +oods +oods a+ainst a+ainst loss, loss, fire fire and other other cas"alti cas"alties) es) 4. Neep said said +oods +oods or proceeds proceeds,, identifia identifia*le *le as propert propert' ' of the entr"ster) 5. et"rn et"rn the +oods +oods in the event event of non>sal non>sale e or "pon de!and de!and)) . *serv *serve e all other ter!s ter!s and conditi conditions ons of the tr"st tr"st receipt receipt not contrar' to the provisions of the decree.

Here5 !"ere is a !rus! re0eip! !ransa0!ion 0overed + P4 11'. C"ing is !"e en!rus!ee 6"ile RCDC is !"e en!rus!er. T"e la6 applies !o goods used + PDM; in i!s opera!ions. •

Colinares v. C< provides for two possi*le sit"ations in a tr"st receipt transaction% 1. Entr Entre+ e+ar arla la%% &one &one' ' is rece receiv ived ed "nde "nderr the the o*li o*li+a +ati tion on of deliverin+ it to the owner of the !erchandise sold. $. /evolvera /evolvera%% &erchandise &erchandise is receiv received ed "nder the the o*li+ation o*li+ation to ret"rn to the o wner.







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If the the stat stat"t "te e desi desi+n +nat ates es an act act of a corp corpor orat atio ion n and and a p"nis p"nish!e h!ent nt theref therefor or,, s"ch s"ch can *e co!!i co!!itte tted d onl' onl' *' the corporation. If the stat"te does not e3pressl' appl' to corporations, then the corporation cannot *e p"nished therefor.

; !"e s!a!u!e designa!es a 0rime !"a! ma+ e 0ommi!!ed + a 0orpora!ion u! !"e penal!+ is !o e suered + !"e oi0ers5 onl+ su0" individual suer !"e penal!+.

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CASE %: LA$4 DA$ >S PEREG Petitione onerr Land Land Ban Ban of the Philip Philippin pines es 6LBP 6LBP is a -ACT -ACTS: S: Petiti +overn!ent financial instit"tion and the official depositor' of the Philippines. espondents were officers of
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tr"st receipt transaction penaliGed "nder Section 12 of P./. 115) the onl' o*li+ation act"all' a+reed "pon *' the parties wo"ld *e the ret"rn of the proceeds of the sale transaction. (his transaction *eco!es a !ere loan, where the *orrower is o*li+ated to pa' the *an the a!o"nt spent for the p"rchase of the +oods.






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In contrast with the present sit"ation, it is f"nda!ental in a tr"st receipt transaction that the person who advanced pa'!ent for the !erchandise *eco!es the a*sol"te owner of said !erchandise and contin"es as owner "ntil he or she is paid in f"ll, or if the +oods had alread' *een sold, the proceeds sho"ld *e t"rned over to hi! or to her.

BHERE-=RE5 BHERE-=RE5 6e 4E$@ !"e pe!i!ion and A--;RM !"e *anuar+ &5 &&' de0ision o !"e Cour! o Appeals in CA9#.R. SP $o. ?'%%. $o 0os!s.

CASE ,: People v. Cuevo (1,%1) -ACTS: (his case presents for ree3a!ination the lia*ilit' for estafa of the holder of a tr"st receipt who disposed of the +oods covered there*' and, in violation

to recover the a!o"nt of P$4,@@@K which it had advanced to cover the price of the !erchandise delivered to the acc"sed

;SS
a00used in !"is 0ase is guil!+ o Es!aa. R






It is relevant to state that Presidential /ecree o. 115, the (r"st eceipts Law, re+"latin+ tr"st receipts transactions. ne o*8ective of that law is Kto declare the !is"se and?or !isappropriation of +oods or proceeds realiGed fro! the sale of +oods, doc"!ents or instr"!ents released "nder tr"st receipts as a cri!inal offense p"nisha*le "nderK article 215.

I?He here*' a+ree to hold said +oods in tr"st for the said corporati corporation on 6!eanin+ 6!eanin+ the *an as tr"stor, tr"stor, and as its propert' with li*ert' to sell the sa!e for its acco"nt, *"t witho"t a"thorit' to !ae an' other disposition whatever of the said +oods or an' part thereof 6or of proceeds thereo thereof f either either *' wa' of condit condition ional al sale, sale, pled+e pled+e or otherwise.

Section 12 of the decree provides that Kthe fail"re of an entr"stee to t"rn over the proceeds of the sale of the +oods, doc"!ents or instr"!ents covere covered d *' a tr"st tr"st receipt receipt to the e3tent e3tent of the a!o"nt a!o"nt owin+ to the entr"s entr"ster ter or as appear appears s in the tr"st receipt receipt or to ret"rn ret"rn said +oods, +oods, doc"!e doc"!ents nts or instr" instr"!en !ents ts if the' the' were were not sold or dispos disposed ed of in accordance with the ter!s of the tr"st receipt shall constit"te the cri!e of estafa, estafa, p"nisha*le p"nisha*le "nder the provisions provisionsKK of article article 215 of the evised Penal Code.

Trial Cour!s ra!io in 0ase proessor as2s:

In case of sale I?He f"rther agree to hand the proceeds , as soon soon as rece receiv ived ed,, to the the Inte Intern rnat atio iona nall Ban Banin in+ + Corporation to appl' a+ainst the relative acceptances 6as descri descri*ed *ed a*ove a*ove and for the pa'!en pa'!entt of an' other inde*tedn inde*tedness ess of !ine?o"rs !ine?o"rs to the Internatio International nal Banin+ Banin+ Corporation. 6People vs. " Chai o 52 Phil. #74, #7.

CASE -ACTS %

1&:

>in!ola

vs

>in!ola







11. Hrits of e3ec"tion were iss"ed iss"ed and the Sheriff levied on e3ec"tion e3ec"tion plastic !erchandise of I(E>>that while it !a' not have a*sol"te ownership over the properties, still it has ri+ht, interest and ownership consistin+ of a sec"rit' title which attaches to the properties. 1. (hat it is a preferred clai!ant clai!ant to the proceeds proceeds fro! the foreclos"re foreclos"re to the e3tent of its sec"rit' title in the +oods otherwise its sec"rit' title will *eco!e "seless.

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his indispensa*le sec"rit' "ntil the +oods are sold and the vendee is called "pon to pa' for the!. (his sec"rit' is not an ordinar' pled+e *' the i!porter to the *aner *aner,, for the i!porter i!porter has never owned the +oods +oods,, and !oreover, he is not a*le to deliver the possession, *"t the sec"rit' is the co!plete title vested ori+inall' in the *aners. In a certain !anner, tr"st receipt contracts partae of the nat"re of a conditional sale as provided *' the Chattel &ort+a+e Law) the i!porter *eco!es a*sol"te owner of the i!ported !erchandise as soon as he has paid its price. (he ownership of the !erchandise contin"es to *e vested in the person who has advanced pa'!ent, "ntil he has *een paid in f"ll, or if the !erchandise has alread' *een sold, the proceeds of the sale sho"ld *e t"rned over to hi! *' the i!porter. Sec. 1$ of P./. o. 115 ass"res the entr"ster of the validit' of his clai! a+ainst all creditorsM Sec. Sec. 1$. alid alidit' it' of entr"s entr"ster ter=s =s sec"ri sec"rit' t' intere interest st as a+ainst a+ainst creditors. creditors.M(he M(he entr"ster=s entr"ster=s sec"rit' sec"rit' interest interest in









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(he law warrants the validit' of Pr"dential Ban=s sec"rit' interest in the +oods p"rs"ant to the written ter!s of the tr"st receipt as against all creditors of the trust receipt agreement. (he onl' e3ception to the r"le is when the properties are in

"nderstan "nderstandin+ din+ it had with Cole!an Cole!an Petrole"! Petrole"! Prod"cts Prod"cts Co., Inc., and which c"l!inated in the e3ec"tion of the aforesaid tr"st receipt. In consonance with the stip"lations and contract entered into *etween







D"rther!ore, "nder the ver' provisions of the Civil Code, the appellantRs credit en8o's preference over an' other credit of an' other creditor of Cole!a Cole!an n Petrol Petrole"! e"! Prod"cts Prod"cts Co., Inc., Inc., and its ri+ht ri+ht to the s"! of P1,94#.@2 +arnished *' the defendant sheriff fro! the &anila ailroad

and special. It is !entioned third onl' in article 19$4 of the Civil Code referrin+ referrin+ to credits credits which, which, while havin+ preferenc preference e a!on+ a!on+ the!selv the!selves, es, have none over the speciall' privile+ed ones en"!erated in articles 19$$ and 19$2.

01 Lee vs. Rodil

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