SPS. QUIRINO V. DELA CRUZ and GLORIA DELA CRUZ vs. PLANTERS PRODUCTS, INC. G.R. No. 158649 February 18, 2013 BERSAMIN, J.: F ACTS: Gloria applied for and was granted by Planters Products, Inc. (PPI) a regular credit line with trust receipts (TR) as collaterals with it the spouses submitted a list of their assets in support of her credit application for participation in the Special Credit Scheme (SCS) of PPI. Gloria signed two documents labelled "TR/SCS," indicating the agricultural inputs she received "upon the trust" of PPI subscribing to these specific undertakings: - that she would hold said sa id goods in trust for PPI, as its property, with liberty to deliver and sell the same for PPI’s account, in favor of farmers accepted to participate in PPI’s SCS; - that in case of such delivery and sale, Gloria would agree to require the execution of a Trust Agreement by the farmerparticipants in her favor, which Agreement will in turn be Assigned by Gloria in favor of PPI with Recourse; - that in the event, Gloria cannot deliver/serve to the farmerparticipants all the inputs, then Gloria will agree that the undelivered inputs will be charged to her credit line. The products were released to Gloria, the 60-day credit term lapsed without Gloria paying her obligation under the TR/SCS. Hence, PPI brought against Quirino and Gloria a complaint. ISSUE: Are the Spouses liable to PPI for the value of the agricultural inputs delivered to Gloria? ES. When Gloria (1) signed the application for credit facilities indicating that a TR HELD: Y ES would serve as collateral for her credit line; (2) submitted a list of their (spouses) assets "to support our credit application; and (3) the signing of Gloria TR/SCS documents defining her obligations and the invoices indicating her having received PPI, established the intention of the spouses to enter into a creditor-debtor relationship with PPI and thus are fully liable to PPI. Moreover to say that the farmers-participants were obligated to pay for the goods delivered to them by Gloria has no basis because TR/SCS indicates that Gloria personally assumed to undertake holding the goods "in trust for PPI," and under the notion of relativity of contracts, contracts take effect only between the parties. Hence, the farmerparticipants, not being themselves parties to the documents signed by Gloria, were not to be thereby liable. At this juncture, the contract, its label notwithstanding, was not a trust receipt transaction in legal contemplation or within the purview of the Trust Receipts Law such that its breach would render Gloria criminally liable for estafa. estafa. There are two obligations in a trust receipt transaction, first: the obligation to deliver the money to the owner of the merchandise sold and second: the obligation to return it to the owner. Thus, under the Trust Receipts Law, intent to defraud is presumed when (1) the entrustee fails to turn over
the proceeds of the sale of goods covered by the trust receipt to the entruster; or (2) when the entrustee fails to return the goods under trust, if they are not disposed of in accordance with the terms of the trust receipts. NOTE: A trust receipt is "a security transaction intended to aid in financing 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 security agreement that "secures an indebtedness and there can be no such thing as security interest that secures no obligation." NOTE: A credit line is "that amount of money or merchandise which a banker, a merchant, or supplier agrees to supply to a person on credit and generally agreed to in advance." It is a fixed limit of credit granted by a bank, retailer, or credit card issuer to a customer, to the full extent of which the latter may avail himself of his dealings with the former but which he must not exceed and is usually intended to cover a series of transactions in which case, when the customer’s line of credit is nearly exhausted, he is e xpected to reduce his indebtedness by payments before making any further drawings.
