G.R. No. 149472 ; August 18, 2004
JORGE SALAZAR, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

FACTS

Petitioner Jorge Salazar, Vice-President and Treasurer of Uni-Group Inc., was convicted of estafa under Article 315, paragraph 1(b) of the Revised Penal Code. The case stemmed from a transaction where Skiva International, through its agent Olivier, ordered jeans from Uni-Group and its affiliate Aurora. Skiva advanced US$41,300 to the suppliers for raw materials, which was remitted to a joint bank account of Salazar and Werner Lettmayr, President of Aurora and Uni-Group. Salazar subsequently withdrew the funds. The jeans were not delivered, and demand for the return of the money was made. After preliminary investigation, an information was filed solely against Salazar. The trial court and the Court of Appeals found him guilty, a decision initially affirmed by the Supreme Court.
Salazar filed a Second Motion for Reconsideration, joined by the Office of the Solicitor General (OSG) which filed a Manifestation in Lieu of Comment pleading for his acquittal. Both argued the transaction was a pure contract of sale, and the failure to deliver gave rise only to civil liability. They emphasized that the advance payment was made to the corporate entities, not to Salazar in a personal fiduciary capacity, and that demand was made on the corporations, not directly on him.

ISSUE

Whether petitioner Jorge Salazar is criminally liable for estafa under Article 315, paragraph 1(b) of the Revised Penal Code for misappropriating the advance payment.

RULING

The Supreme Court granted the Second Motion for Reconsideration and acquitted Salazar. The legal logic centered on the absence of the essential element of misappropriation or conversion for personal gain. For estafa under Article 315(1)(b) to exist, the accused must have received money or property in trust or under an obligation to deliver or return the same, and subsequently misappropriated or converted it to his personal use.
The Court found that the advance payment was received by the corporate entities, Aurora and Uni-Group, in a transaction that was essentially a contract of sale. The funds were deposited in a joint corporate account, not given to Salazar under a personal obligation to account. The evidence failed to prove that Salazar personally appropriated the funds for his own benefit. The withdrawals he made were in his capacity as a corporate officer, and the prosecution did not establish that the money was used for purposes other than the corporate operation or that he personally benefitted. Furthermore, the failure to deliver the goods was attributed to several external factors, including production problems and political events like the 1986 EDSA Revolution, negating criminal intent. Consequently, the obligation arising from the breach of contract was civil in nature, not criminal. The OSG’s commendable stance reinforced the principle that criminal liability requires proof beyond reasonable doubt, which was lacking.