GR 90828; (September, 2000) (Digest)
G.R. No. 90828 ; September 5, 2000
MELVIN COLINARES and LORDINO VELOSO, petitioners, vs. HONORABLE COURT OF APPEALS, and THE PEOPLE OF THE PHILIPPINES, respondents.
FACTS
Petitioners Melvin Colinares and Lordino Veloso were contractors for the Carmelite Sisters. To purchase construction materials from CM Builders Centre, they obtained a commercial letter of credit from Philippine Banking Corporation (PBC) for ₱22,389.80, secured by a trust receipt. The loan was due on January 29, 1980. Petitioners failed to pay upon maturity. PBC made several demands, and petitioners made partial payments while proposing modified payment terms. Despite this, an Information was filed in 1983 charging petitioners with estafa under P.D. No. 115 (Trust Receipts Law). The trial court convicted them, a decision affirmed with a penalty increase by the Court of Appeals.
Petitioners contended the transaction was a simple loan, not a trust receipt agreement. They claimed the bank manager assured them the trust receipt was a mere formality. They later discovered a suppressed “Disclosure Statement on Loan/Credit Transaction” bearing a 14% interest rate, which they argued proved the true loan nature of the transaction. They filed a motion for new trial based on this newly discovered evidence.
ISSUE
Whether petitioners are criminally liable for estafa under P.D. No. 115.
RULING
No. The Supreme Court reversed the Court of Appeals and acquitted petitioners. The legal logic centered on the nature of the transaction and the element of conversion. The Court found the newly discovered Disclosure Statement, which indicated a 14% interest and detailed a loan, to be material and credible evidence that would likely alter the trial court’s judgment. This document substantiated petitioners’ claim that the true agreement was a simple loan, not a trust receipt transaction.
Crucially, the Court ruled that for a violation of the Trust Receipts Law to be criminal in nature, there must be a showing of fraudulent intent and actual conversion of the goods or their proceeds for the entrustee’s own use. Here, the materials were delivered directly to the construction site and used for the intended Carmelite project. There was no evidence petitioners sold the goods and misappropriated the proceeds. Their failure to pay the bank stemmed from business losses, not a fraudulent conversion. The trust receipt was used merely as a security for the loan, and its non-payment gives rise only to civil liability. The bank’s subsequent acceptance of installment payments further indicated it was treating the account as a simple loan.