GR 214960; (May, 2022) (Digest)
G.R. No. 214960 , June 15, 2022
TONY N. CHUA, JIMMY N. CHUA, AND ERNEST T. JENG, PETITIONERS, VS. SECRETARY OF JUSTICE AND BDO UNIBANK, INC., RESPONDENTS.
FACTS
Petitioners, officers of NF Agri-Business Corporation (NF ABC), executed four trust receipts in favor of Equitable PCI Bank (now BDO Unibank) in 1999 and 2000 to secure the release of imported agricultural goods. The trust receipts obligated them to either return the goods or remit the proceeds from their sale. NF ABC failed to comply upon maturity. BDO demanded payment in 2008, leading to the filing of a complaint for violation of the Trust Receipts Law.
Petitioners argued that their failure was due to the Asian Financial Crisis and natural disasters, which forced them to sell the perishable goods at a loss. They claimed the obligation was novated into a simple loan, evidenced by subsequent negotiations with BDO and the issuance of postdated checks under a revised payment schedule spanning until 2004. The City Prosecutor initially dismissed the complaint, finding novation and no evidence of dishonesty.
ISSUE
Whether the Secretary of Justice committed grave abuse of discretion in finding probable cause to indict petitioners for Estafa under the Trust Receipts Law, despite the alleged novation of the obligation into a simple loan.
RULING
The Supreme Court denied the petition and affirmed the finding of probable cause. The Court held that the Secretary of Justice did not commit grave abuse of discretion. On the central claim of novation, the Court ruled that the subsequent agreements for installment payments did not extinguish the criminal liability arising from the violation of the trust receipts.
Novation requires a clear and unequivocal intent to extinguish the old obligation and replace it with a new one. The subsequent negotiations and issuance of checks merely modified the manner of payment of the existing monetary obligation. They did not alter the essential nature of the source obligation—the violation of the trust receipt terms by failing to account for the goods or their proceeds. The civil obligation to pay the debt may have been modified, but this does not absolve the criminal liability for the separate act of misappropriation penalized under the Trust Receipts Law. The offense is complete upon the failure to turn over the proceeds or return the goods, an act distinct from the mere failure to pay a loan. The petitioners’ defenses of good faith and economic hardship are matters of evidence best ventilated in a full trial on the merits, not during the preliminary investigation for probable cause.