Ong v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Edward C. Ong, representing ARMAGRI International Corporation (ARMAGRI), applied for and executed trust receipts with SOLIDBANK Corporation (Bank) for two separate transactions. The first involved 10,000 bags of urea valued at P2,050,000.00, financed by a Letter of Credit in favor of Fertiphil Corporation. The second involved differential assemblies valued at P2,532,500.00, financed by a Domestic Letter of Credit in favor of Metropole Industrial Sales. Both trust receipts obligated ARMAGRI, through petitioner, to account for the goods or remit the proceeds of their sale, or return the unsold goods upon demand. Petitioner also executed an additional undertaking on both trust receipts, agreeing to pay a penalty of 1% per month until the obligation is fully paid. ARMAGRI failed to account for the goods or remit the proceeds, leading to unpaid accounts of P1,527,180.66 and P1,449,395.71. Procedural History: The Regional Trial Court of Manila, Branch 35, convicted petitioner Edward C. Ong and Benito Ong of two counts of estafa for violating the Trust Receipts Law. The trial court sentenced Edward C. Ong to ten (10) years of prision mayor as minimum to twenty (20) years of reclusion temporal as maximum for each count, and ordered him to pay Solidbank Corporation the aggregate sum of P2,976,576.37 plus interest and penalty. Benito Ong was acquitted. Petitioner appealed his conviction to the Court of Appeals, which affirmed the trial court's decision in toto. Petitioner's motion for reconsideration was denied. The Petition: Petitioner filed a petition for review on certiorari with the Supreme Court, seeking to nullify the Court of Appeals' decision. He contended that the Court of Appeals erred in ruling that he was responsible for the offense by merely acting as an agent and signing the trust receipts, and in convicting him under specifications not alleged in the Information.
Issue(s)
Whether petitioner Edward C. Ong, by merely signing the trust receipts as an agent of ARMAGRI International Corporation, is responsible for the offense under Section 13 of the Trust Receipts Law. Whether petitioner's conviction was proper despite allegations that the Informations did not precisely state his capacity as entrustee.
Ruling
The Supreme Court affirmed the conviction of petitioner Edward C. Ong with modification regarding the penalty. The Court held that petitioner is a person responsible for the offense under Section 13 of the Trust Receipts Law. The Court modified the penalty imposed by the trial court, sentencing petitioner to an indeterminate penalty of imprisonment from four (4) years and two (2) months of prision correctional as minimum, to twenty (20) years of reclusion temporal as maximum, for each count of estafa. Petitioner was ordered to pay Solidbank Corporation the stipulated penalty of 1% per month on the outstanding balance of the two trust receipts from July 15, 1991, until fully paid.
Ratio Decidendi
On the issue of petitioner's responsibility under Section 13 of the Trust Receipts Law: The Court ruled that petitioner is a person responsible for the offense. Section 13 of Presidential Decree No. 115 (Trust Receipts Law) states that if the violation is committed by a corporation, the penalty shall be imposed upon the directors, officers, employees, or other persons therein responsible for the offense. The Court emphasized that corporations act through their agents, and the criminal liability falls on the human agent responsible for the violation. Petitioner, as the signatory to the trust receipts and other loan documents, was directly involved in the transaction. His failure to explain or show why he was not responsible for the failure to turn over the proceeds or account for the goods, coupled with his waiver of the right to present evidence, made him liable. The Court reiterated that the law of agency in civil cases does not apply in criminal cases, and a person cannot escape punishment by claiming to have acted merely as an agent. On the issue of conviction under allegations in the Informations: The Court found no merit in petitioner's argument that he was convicted on facts not alleged in the Informations. The Court held that the Informations sufficiently alleged that petitioner, representing ARMAGRI, defrauded the Bank by failing to remit proceeds or return goods, to the Bank's prejudice. As an essential element of estafa with abuse of confidence, it is sufficient that the Informations allege the entrustee received the goods. The Informations clearly stated that ARMAGRI, represented by petitioner, received the goods in trust under an express obligation to remit proceeds or return the goods. The Court clarified that there is no need to allege in the Informations the specific capacity in which petitioner participated to hold him responsible. The existence of the corporate entity does not shield from prosecution the agent who knowingly commits a crime at the instance of the corporation.
Main Doctrine
A person who signs trust receipts on behalf of a corporation, even if merely as an agent, can be held criminally liable under the Trust Receipts Law if they fail to account for the goods or their proceeds, as the law holds responsible the directors, officers, employees, or other persons therein responsible for the offense committed by a corporation.