People v. Velayo
REITERATIONFacts
The Antecedents: Petitioner Maria Lina S. Velayo (Velayo), as President of Alorasan Realty Development Corporation (ARDC), entered into a contract to purchase two parcels of land for P60,000,000.00 with WJA Holdings, Inc. (WJA). Velayo volunteered to remit the applicable withholding taxes and documentary stamp taxes to the BIR on behalf of WJA, assuring them that she knew someone at the BIR who could facilitate the process and potentially reduce the tax liability. WJA issued checks totaling P60,000,000.00 for the purchase price, and an additional P775,895.00 for taxes. Velayo deposited these checks into ARDC's bank account, where she was the sole authorized signatory. She remitted the taxes for one parcel of land (TCT No. 142675), enabling its transfer to WJA. However, she failed to remit the taxes for the other parcel (TCT No. 122230), which amounted to P3,000,000.00 in withholding tax and P429,617.00 in documentary stamp tax, and consequently, its title was not transferred to WJA. Despite repeated demands, Velayo failed to remit the taxes or return the funds. Procedural History: The Regional Trial Court (RTC) of Pasay City, Branch 111, found Velayo guilty beyond reasonable doubt of estafa and sentenced her to an indeterminate penalty of four (4) years, one (1) month, and one (1) day of prision correccional as minimum to twenty (20) years of reclusion temporal as maximum. She was also ordered to return P3,346,670.00 to WJA with legal interest. The Court of Appeals (CA) affirmed the RTC decision. The Petition: Velayo filed a Petition for Review on Certiorari with the Supreme Court, arguing that she did not have the obligation to withhold taxes, did not receive the funds in trust, and lacked juridical possession, thus the elements of estafa were not met.
Issue(s)
Whether the elements of estafa under Article 315(1)(b) of the Revised Penal Code are present, specifically concerning the receipt of personal property in trust and the juridical possession thereof. Whether Velayo, acting as a corporate officer, could be held personally liable for estafa for funds entrusted to her for tax remittance.
Ruling
The Supreme Court denied the petition, affirming the decision of the Court of Appeals. The Court found that Velayo was guilty beyond reasonable doubt of estafa.
Ratio Decidendi
On the issue of whether the elements of estafa under Article 315(1)(b) of the Revised Penal Code are present, specifically concerning the receipt of personal property in trust and the juridical possession thereof: The Court held that all elements of estafa were present. The prosecution sufficiently established that Velayo received the entire purchase price, including the funds intended for withholding taxes, evidenced by checks and acknowledgment receipts. Her offer to remit the taxes to the BIR, knowing someone who could facilitate the process and reduce the liability, induced WJA to entrust the funds to her personally, not merely as a corporate officer of ARDC. This created a trust relationship between WJA and Velayo, vesting in her juridical possession of the funds, which she was obligated to remit to the BIR on behalf of WJA. Her failure to do so and her subsequent misappropriation or conversion of the funds to her personal use, to the prejudice of WJA, constituted estafa. The Court distinguished this case from Chua-Burce v. Court of Appeals, where the petitioner was a mere bank custodian with no juridical possession, emphasizing that Velayo acted with full discretion and control over the funds, and her actions were unilateral and not sanctioned by ARDC in the context of the tax remittance arrangement. On the issue of whether Velayo, acting as a corporate officer, could be held personally liable for estafa for funds entrusted to her for tax remittance: The Court ruled that Velayo could be held personally liable. While she was a Director and Corporate Secretary of ARDC, her dealings with WJA regarding the tax remittance were personal in nature, based on her own assurances and representations. WJA entrusted the funds to her directly because of her personal assurances, not to ARDC as a corporation. ARDC itself had no obligation to receive, keep, or remit these specific taxes on behalf of WJA; it was Velayo who voluntarily assumed this personal obligation. Her sole control over the ARDC bank account, where the funds were deposited, further solidified her personal possession and control. Therefore, her breach of trust and subsequent conversion of the funds to her own benefit gave rise to her personal criminal liability for estafa, irrespective of her corporate position.
Main Doctrine
A person who receives money with the obligation to remit it to the Bureau of Internal Revenue (BIR) for taxes, and subsequently misapplies or converts it for personal use, commits estafa under Article 315(1)(b) of the Revised Penal Code, as such receipt vests juridical possession in the offender, even if the funds were deposited in a corporate account and the offender acted as a corporate officer.