G.R. No. L-40324 October 5, 1988
JOSE O. SIA, petitioner, vs. COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

FACTS

Jose O. Sia, as President and General Manager of Metal Manufacturing of the Philippines, Inc., applied for and was granted a letter of credit by Continental Bank to finance the importation of safe-deposit locks. To secure the transaction, Sia executed a trust receipt in favor of the bank, wherein he agreed to hold the imported goods in trust, with the liberty to sell them for the bank’s account and to turn over the proceeds. Upon the trust receipt’s maturity, the corporation failed to account for the goods or remit the proceeds despite demands.
Consequently, an information for estafa under Article 315(1)(b) of the Revised Penal Code was filed against Sia personally. The trial court convicted him, a decision affirmed by the Court of Appeals with a modification on the indemnity amount. Sia elevated the case to the Supreme Court, contending that he should not be held criminally liable as he acted in a corporate capacity.

ISSUE

The primary issue is whether Jose O. Sia, acting as a corporate officer in executing the trust receipt, can be held criminally liable for estafa under the Revised Penal Code for the corporation’s failure to comply with the trust receipt agreement.

RULING

The Supreme Court granted the petition, reversed the Court of Appeals, and acquitted Jose O. Sia. The ruling was anchored on the Court’s prior en banc decision in Sia vs. People (G.R. No. L-30896). The legal logic is that at the time of the transaction’s occurrence in 1963 and the subsequent filing of the criminal case, there was no specific statutory provision that criminalized a violation of a trust receipt agreement. Estafa under Article 315 requires proof of deceit and fraudulent misappropriation. The mere failure to turn over proceeds or return goods under a trust receipt, without more, did not per se constitute the crime of estafa as defined by the Revised Penal Code.
The Court clarified that the legal landscape changed with the enactment of Presidential Decree No. 115, which took effect on January 29, 1975. Section 13 of P.D. 115 expressly provides that a violation of a trust receipt constitutes estafa. Crucially, it also stipulates that if the offense is committed by a corporation, the penalty shall be imposed upon the responsible directors or officers. However, this decree has no retroactive application to this case. Since the trust receipt transaction and the alleged violation occurred before P.D. 115’s effectivity, no criminal liability for estafa attached to Sia personally for the corporate act. The acquittal is without prejudice to the pursuit of civil remedies against the corporation for the recovery of the sum due.