ANTHONY L.

NG,

G.R. No. 173905

Petitioner,
Present:

- versus-

CORONA, J.,
Chairperson,VELASCO, JR.,
ABAD,*
PEREZ,** and
MENDOZA, JJ.

PEOPLE OF
THE PHILIPPINES,
Respondent.

Promulgated:

April 23, 2010

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR.

The Case

This is a Petition for Review on Certiorari under Rule 45 seeking to

reverse and set aside the August 29, 2003 Decision [1] and July 25,
2006 Resolution of the Court of Appeals (CA) in CA-G.R. CR No.
25525, which affirmed the Decision[2] of the Regional Trial Court
(RTC), Branch 95 in Quezon City, in Criminal Case No. Q-99-85133
for Estafa under Article 315, paragraph 1(b) of the Revised Penal
Code (RPC) in relation to Section 3 of Presidential Decree No. (PD)
115 or the Trust Receipts Law.
The Facts
Sometime in the early part of 1997, petitioner Anthony Ng, then engaged in the
business of building and fabricating telecommunication towers under the trade
name Capitol Blacksmith and Builders, applied for a credit line of PhP 3,000,000
with Asiatrust Development Bank, Inc. (Asiatrust). In support of Asiatrusts credit
investigation, petitioner voluntarily submitted the following documents: (1) the
contracts he had with Islacom, Smart, and Infocom; (2) the list of projects wherein
he was commissioned by the said telecommunication companies to build several
steel towers; and (3) the collectible amounts he has with the said companies.[3]

On May 30, 1997, Asiatrust approved petitioners loan

application. Petitioner was then required to sign several
documents, among which are the Credit Line Agreement,
Application and Agreement for Irrevocable L/C, Trust Receipt
Agreements,[4] and Promissory Notes. Though the Promissory
Notes matured on September 18, 1997, the two (2)
aforementioned Trust Receipt Agreements did not bear any
maturity dates as they were left unfilled or in blank by Asiatrust. [5]

After petitioner received the goods, consisting of chemicals and

metal plates from his suppliers, he utilized them to fabricate the
communication towers ordered from him by his clients which were

installed in three project sites, namely: Isabel, Leyte; Panabo,

Davao; and Tongonan.

As petitioner realized difficulty in collecting from his client

Islacom, he failed to pay his loan to Asiatrust. Asiatrust then
conducted a surprise ocular inspection of petitioners business
through
Villarva
S.
Linga,
Asiatrusts
representative
appraiser. Linga thereafter reported to Asiatrust that he found
that approximately 97% of the subject goods of the Trust Receipts
were sold-out and that only 3 % of the goods pertaining to PN No.
1963 remained. Asiatrust then endorsed petitioners account to its
Account Management Division for the possible restructuring of his
loan. The parties thereafter held a series of conferences to work
out the problem and to determine a way for petitioner to pay his
debts. However, efforts towards a settlement failed to be
reached.

On March 16, 1999, Remedial Account Officer Ma. Girlie C.

Bernardez filed a Complaint-Affidavit before the Office of the City
Prosecutor of Quezon City. Consequently, on September 12, 1999,
an Information for Estafa, as defined and penalized under Art.
315, par. 1(b) of the RPC in relation to Sec. 3, PD 115 or the Trust
Receipts Law, was filed with the RTC. The said Information reads:

That on or about the 30th day of May 1997, in

Quezon City, Philippines, the above-named petitioner, did
then and there willfully, unlawfully, and feloniously
defraud Ma. Girlie C. Bernardez by entering into a Trust
Receipt Agreement with said complainant whereby said
petitioner as entrustee received in trust from the said
complainant various chemicals in the total sum of P4.5

million with the obligation to hold the said chemicals in

trust as property of the entruster with the right to sell the
same for cash and to remit the proceeds thereof to the
entruster, or to return the said chemicals if unsold; but
said petitioner once in possession of the same, contrary
to his aforesaid obligation under the trust receipt
agreement with intent to defraud did then and there
misappropriated, misapplied and converted the said
amount to his own personal use and benefit and despite
repeated demands made upon him, said petitioner
refused and failed and still refuses and fails to make good
of his obligation, to the damage and prejudice of the said
Ma. Girlie C. Bernardez in the amount of P2,971,650.00,
Philippine Currency.

CONTRARY TO LAW.

Upon arraignment, petitioner pleaded not guilty to the charges. Thereafter, a fullblown trial ensued.

During the pendency of the abovementioned case, conferences between petitioner

and Asiatrusts Remedial Account Officer, Daniel Yap, were held. Afterward, a
Compromise Agreement was drafted by Asiatrust. One of the requirements of the
Compromise Agreement was for petitioner to issue six (6) postdated
checks. Petitioner, in good faith, tried to comply by issuing two or three checks,
which were deposited and made good. The remaining checks, however, were not
deposited as the Compromise Agreement did not push through.

For his defense, petitioner argued that: (1) the loan was
granted as his working capital and that the Trust Receipt
Agreements he signed with Asiatrust were merely preconditions
for the grant and approval of his loan; (2) the Trust Receipt
Agreement corresponding to Letter of Credit No. 1963 and the
Trust Receipt Agreement corresponding to Letter of Credit No.
1964 were both contracts of adhesion, since the stipulations
found in the documents were prepared by Asiatrust in fine print;
(3) unfortunately for petitioner, his contract worth PhP 18,000,000
with Islacom was not yet paid since there was a squabble as to
the real ownership of the latters company, but Asiatrust was
aware of petitioners receivables which were more than sufficient
to cover the obligation as shown in the various Project Listings
with Islacom, Smart Communications, and Infocom; (4) prior to
the Islacom problem, he had been faithfully paying his obligation
to Asiatrust as shown in Official Receipt Nos. 549001, 549002,
565558, 577198, 577199, and 594986,[6] thus debunking
Asiatrusts claim of fraud and bad faith against him; (5) during the
pendency of this case, petitioner even attempted to settle his
obligations as evidenced by the two United Coconut Planters Bank
Checks[7] he issued in favor of Asiatrust; and (6) he had already
paid PhP 1.8 million out of the PhP 2.971 million he owed as per
Statement of Account dated January 26, 2000.

Ruling of the Trial Court

After trial on the merits, the RTC, on May 29, 2001, rendered a
Decision,
finding
petitioner
guilty
of
the
crime
of Estafa. The fallo of the Decision reads as follows:

WHEREFORE, judgment is hereby rendered finding the petitioner,

Anthony L. Ng GUILTY beyond reasonable doubt for the crime of
Estafa defined in and penalized by Article 315, paragraph 1(b) of the
Revised Penal Code in relation to Section 3 of Presidential Decree 115,
otherwise known as the Trust Receipts Law, and is hereby sentenced to
suffer the indeterminate penalty of from six (6) years, eight (8) months,
and twenty one (21) days of prision mayor, minimum, as the minimum
penalty, to twenty (20) years of reclusion temporal maximum, as the
maximum penalty.

The petitioner is further ordered to return to the Asiatrust

Development Bank Inc. the amount of Two Million, Nine Hundred
Seventy One and Six Hundred Fifty Pesos (P2,971,650.00) with legal
rate of interest computed from the filing of the information on
September 21,1999 until the amount is fully paid.

IT IS SO ORDERED.

In rendering its Decision, the trial court held that petitioner could not simply
argue that the contracts he had entered into with Asiatrust were void as they were
contracts of adhesion. It reasoned that petitioner is presumed to have read and
understood and is, therefore, bound by the provisions of the Letters of Credit and

Trust Receipts. It said that it was clear that Asiatrust had furnished petitioner with a
Statement of Account enumerating therein the precise figures of the outstanding
balance, which he failed to pay along with the computation of other fees and
charges; thus, Asiatrust did not violate Republic Act No. 3765 (Truth in Lending
Act). Finally, the trial court declared that petitioner, being the entrustee stated in
the Trust Receipts issued by Asiatrust, is thus obliged to hold the goods in trust for
the entruster and shall dispose of them strictly in accordance with the terms and
conditions of the trust receipts; otherwise, he is obliged to return the goods in the
event of non-sale or upon demand of the entruster, failing thus, he evidently
violated the Trust Receipts Law.

Ruling of the Appellate Court

Petitioner then elevated the case to the CA by filing a Notice of Appeal on August
6, 2001. In his Appellants Brief dated March 25, 2002, petitioner argued that the
court a quo erred: (1) in changing the name of the offended party without the
benefit of an amendment of the Information which violates his right to be informed
of the nature and cause of accusation against him; (2) in making a finding of facts
not in accord with that actually proved in the trial and/or by the evidence provided;
(3) in not considering the material facts which if taken into account would have
resulted in his acquittal; (4) in being biased, hostile, and prejudiced against him;
and (5) in considering the prosecutions evidence which did not prove the guilt of
petitioner beyond reasonable doubt.

On August 29, 2003, the CA rendered a Decision affirming that of the RTC,
the fallo of which reads:

WHEREFORE, the foregoing considered, the instant appeal is

DENIED. The decision of the Regional Trial Court of Quezon City,
Branch 95 dated May 29, 2001 is AFFIRMED.

SO ORDERED.

The CA held that during the course of the trial, petitioner knew that the
complainant Bernardez and the other co-witnesses are all employees of Asiatrust
and that she is suing in behalf of the bank. Since petitioner transacted with the
same employees for the issuance of the subject Trust Receipts, he cannot feign
ignorance that Asiatrust is not the offended party in the instant case. The CA
further stated that the change in the name of the complainant will not prejudice and
alter the fact that petitioner was being charged with the crime of Estafa in relation
to the Trust Receipts Law, since the information clearly set forth the essential
elements of the crime charged, and the constitutional right of petitioner to be
informed of the nature and cause of his accusations is not violated.[8]

As to the alleged error in the appreciation of facts by the trial court, the CA stated
that it was undisputed that petitioner entered into a trust receipt agreement with
Asiatrust and he failed to pay the bank his obligation when it became
due. According to the CA, the fact that petitioner acted without malice or fraud in
entering into the transactions has no bearing, since the offense is punished
as malum prohibitumregardless of the existence of intent or malice; the mere
failure to deliver the proceeds of the sale or the goods if not sold constitutes the
criminal offense.

With regard to the failure of the RTC to consider the fact that petitioners
outstanding receivables are sufficient to cover his indebtedness and that no written

demand was made upon him hence his obligation has not yet become due and
demandable, the CA stated that the mere query as to the whereabouts of the goods
and/or money is tantamount to a demand.[9]
Concerning the alleged bias, hostility, and prejudice of the RTC against petitioner,
the CA said that petitioner failed to present any substantial proof to support the
aforementioned allegations against the RTC.

After the receipt of the CA Decision, petitioner moved for its reconsideration,
which was denied by the CA in its Resolution dated July 25, 2006. Thereafter,
petitioner filed this Petition for Review on Certiorari. In his Memorandum, he
raised the following issues:

Issues:

1.

The prosecution failed to adduce evidence beyond a reasonable

doubt to satisfy the 2nd essential element that there was
misappropriation or conversion of subject money or property by
petitioner.

2.

The state was unable to prove the 3rd essential element of the
crime that the alleged misappropriation or conversion is to the
prejudice of the real offended property.

3.

The absence of a demand (4th essential element) on petitioner

necessarily results to the dismissal of the criminal case.

The Courts Ruling

We find the petition to be meritorious.

Essentially, the issues raised by petitioner can be summed up into onewhether or

not petitioner is liable for Estafa under Art. 315, par. 1(b) of the RPC in relation to
PD 115.

It is a well-recognized principle that factual findings of the trial court are entitled
to great weight and respect by this Court, more so when they are affirmed by the
appellate court. However, the rule is not without exceptions, such as: (1) when the
conclusion is a finding grounded entirely on speculations, surmises, and
conjectures; (2) the inferences made are manifestly mistaken; (3) there is grave
abuse of discretion; and (4) the judgment is based on misapprehension of facts or
premised on the absence of evidence on record.[10] Especially in criminal cases
where the accused stands to lose his liberty by virtue of his conviction, the Court
must be satisfied that the factual findings and conclusions of the lower courts
leading to his conviction must satisfy the standard of proof beyond reasonable
doubt.

In the case at bar, petitioner was charged with Estafa under Art. 315, par.
1(b) of the RPC in relation to PD 115. The RPC defines Estafa as:

ART. 315. Swindling (estafa).Any person who shall defraud

another by any of the means mentioned hereinbelow x x x

1.

With unfaithfulness or abuse of confidence, namely:

a.

xxx

b.
By misappropriating or converting, to the prejudice of
another, money, goods, or any other personal property received by the
offender in trust or on commission, or for administration, or under any
other obligation involving the duty to make delivery of or to return the
same, even though such obligation be totally or partially guaranteed by a
bond; or by denying having received such money, goods, or other
property x x x.[11]

Based on the definition above, the essential elements of Estafa are: (1) that
money, goods or other personal property is received by the offender in trust or on
commission, or for administration, or under any obligation involving the duty to
make delivery of or to return it; (2) that there be misappropriation or conversion of
such money or property by the offender, or denial on his part of such receipt; (3)
that such misappropriation or conversion or denial is to the prejudice of another;
and (4) there is demand by the offended party to the offender.[12]

Likewise, Estafa can also be committed in what is called a trust receipt

transaction under PD 115, which is defined as:

Section 4. What constitutes a trust receipts transaction.A trust

receipt transaction, within the meaning of this Decree, is any transaction
by and between a person referred to in this Decree as the entruster, and
another person referred to in this Decree as entrustee, whereby the
entruster, who owns or holds absolute title or security interests over
certain specified goods, documents or instruments, releases the same to
the possession of the entrustee upon the latters execution and delivery to
the entruster of a signed document called a trust receipt wherein the
entrustee binds himself to hold the designated goods, documents or
instruments in trust for the entruster and to sell or otherwise dispose of
the goods, documents or instruments with the obligation to turn over to
the entruster the proceeds thereof to the extent of the amount owing to
the entruster or as appears in the trust receipt or the goods, documents or
instruments themselves if they are unsold or not otherwise disposed of,
in accordance with the terms and conditions specified in the trust receipt,
or for other purposes substantially equivalent to any of the following:

1.
In the case of goods or documents: (a) to sell the goods or
procure their sale; or (b) to manufacture or process the goods with the
purpose of ultimate sale: Provided, That, in the case of goods delivered
under trust receipt for the purpose of manufacturing or processing before
its ultimate sale, the entruster shall retain its title over the goods whether
in its original or processed form until the entrustee has complied full
with his obligation under the trust receipt; or (c) to load, unload, ship or
transship or otherwise deal with them in a manner preliminary or
necessary to their sale; or

2.
In the case of instruments: (a) to sell or procure their sale
or exchange; or (b) to deliver them to a principal; or (c) to effect the

consummation of some transactions involving delivery to a depository or

register; or (d) to effect their presentation, collection or renewal.

The sale of good, documents or instruments by a person in the

business of selling goods, documents or instruments for profit who, at
the outset of transaction, has, as against the buyer, general property
rights in such goods, documents or instruments, or who sells the same to
the buyer on credit, retaining title or other interest as security for the
payment of the purchase price, does not constitute a trust receipt
transaction and is outside the purview and coverage of this Decree.

In other words, a trust receipt transaction is one where the entrustee has the
obligation to deliver to the entruster the price of the sale, or if the merchandise is
not sold, to return the merchandise to the entruster. There are, therefore, two
obligations in a trust receipt transaction: the first refers to money received under
the obligation involving the duty to turn it over (entregarla) to the owner of the
merchandise sold, while the second refers to the merchandise received under the
obligation to return it (devolvera) to the owner.[13] A violation of any of these
undertakings constitutes Estafa defined under Art. 315, par. 1(b) of the RPC, as
provided in Sec. 13 of PD 115, viz:
Section 13. Penalty [Link] failure of an entrustee to turn over the
proceeds of the sale of the goods, documents or instruments covered by
a trust receipt to the extent of the amount owing to the entruster or as
appears in the trust receipt or to return said goods, documents or
instruments if they were not sold or disposed of in accordance with the
terms of the trust receipt shall constitute the crime of estafa,
punishable under the provisions of Article Three hundred fifteen,
paragraph one (b) of Act Numbered Three thousand eight hundred and
fifteen, as amended, otherwise known as the Revised Penal Code. x x x
(Emphasis supplied.)

A thorough examination of the facts obtaining in the instant case, however,

reveals that the transaction between petitioner and Asiatrust is not a trust receipt
transaction but one of simple loan.

PD 115 Does Not Apply

It must be remembered that petitioner was transparent to Asiatrust from the

very beginning that the subject goods were not being held for sale but were to be
used for the fabrication of steel communication towers in accordance with his
contracts with Islacom, Smart, and Infocom. In these contracts, he was
commissioned to build, out of the materials received, steel communication
towers, not to sell them.

The true nature of a trust receipt transaction can be found in the whereas clause of
PD 115 which states that a trust receipt is to be utilized as a convenient business
device to assist importers and merchants solve their financing
problems. Obviously, the State, in enacting the law, sought to find a way to assist
importers and merchants in their financing in order to encourage commerce in
the Philippines.

As stressed in Samo v. People,[14] a trust receipt is considered a security

transaction intended to aid in financing importers and retail dealers who do not
have sufficient funds or resources to finance the importation or purchase of
merchandise, and who may not be able to acquire credit except through utilization,
as collateral, of the merchandise imported or purchased. Similarly, American
Jurisprudence demonstrates that trust receipt transactions always refer to a method

of financing importations or financing sales.[15] The principle is of course not

limited in its application to financing importations, since the principle is equally
applicable to domestic transactions.[16] Regardless of whether the transaction is
foreign or domestic, it is important to note that the transactions discussed in
relation to trust receipts mainly involved sales.

Following the precept of the law, such transactions affect situations wherein
the entruster, who owns or holds absolute title or security interests over specified
goods, documents or instruments, releases the subject goods to the possession of
the entrustee. The release of such goods to the entrustee is conditioned upon his
execution and delivery to the entruster of a trust receipt wherein the former binds
himself to hold the specific goods, documents or instruments in trust for the
entruster and to sell or otherwise dispose of the goods, documents or instruments
with the obligation to turn over to the entruster the proceeds to the extent of the
amount owing to the entruster or the goods, documents or instruments themselves
if they are unsold. Similarly, we held in State Investment House v. CA, et al. that
the entruster is entitled only to the proceeds derived from the sale of goods
released under a trust receipt to the entrustee.[17]

Considering that the goods in this case were never intended for sale but for
use in the fabrication of steel communication towers, the trial court erred in ruling
that the agreement is a trust receipt transaction.

In applying the provisions of PD 115, the trial court relied on the

Memorandum of Asiatrusts appraiser, Linga, who stated that the goods have been
sold by petitioner and that only 3% of the goods remained in the warehouse where
it was previously stored. But for reasons known only to the trial court, the latter did
not give weight to the testimony of Linga when he testified that he merely
presumed that the goods were sold, viz:

COURT (to the witness)

Q So, in other words, when the goods

anymore. You presumed that, that is already sold?

were

not

there

A Yes, your Honor.

Undoubtedly, in his testimony, Linga showed that he had no real personal

knowledge or proof of the fact that the goods were indeed sold. He did not notify
petitioner about the inspection nor did he talk to or inquire with petitioner
regarding the whereabouts of the subject goods. Neither did he confirm with
petitioner if the subject goods were in fact sold. Therefore, the Memorandum of
Linga, which was based only on his presumption and not any actual personal
knowledge, should not have been used by the trial court to prove that the goods
have in fact been sold. At the very least, it could only show that the goods were not
in the warehouse.

Having established the inapplicability of PD 115, this Court finds that

petitioners liability is only limited to the satisfaction of his obligation from the
loan. The real intent of the parties was simply to enter into a simple loan
agreement.

To emphasize, the Trust Receipts Law was created to to aid in financing

importers and retail dealers who do not have sufficient funds or resources to
finance the importation or purchase of merchandise, and who may not be able
to acquire credit except through utilization, as collateral, of the merchandise
imported or purchased. Since Asiatrust knew that petitioner was neither an
importer nor retail dealer, it should have known that the said agreement could not
possibly apply to petitioner.

Moreover, this Court finds that petitioner is not liable for Estafa both under
the RPC and PD 115.

Goods Were Not Received in Trust

The first element of Estafa under Art. 315, par. 1(b) of the RPC requires that the
money, goods or other personal property must be received by the offender in trust
or on commission, or for administration, or under any other obligation involving
the duty to make delivery of, or to return it. But as we already discussed, the goods
received by petitioner were not held in trust. They were also not intended for sale
and neither did petitioner have the duty to return them. They were only intended
for use in the fabrication of steel communication towers.

No Misappropriation of Goods or Proceeds

The second element of Estafa requires that there be misappropriation or conversion

of such money or property by the offender, or denial on his part of such receipt.

This is the very essence of Estafa under Art. 315, par. 1(b). The words
convert and misappropriated connote an act of using or disposing of anothers
property as if it were ones own, or of devoting it to a purpose or use different from
that agreed upon. To misappropriate for ones own use includes not only conversion
to ones personal advantage, but also every attempt to dispose of the property of
another without a right.[18]

Petitioner argues that there was no misappropriation or conversion on his

part, because his liability for the amount of the goods subject of the trust receipts
arises and becomes due only upon receipt of the proceeds of the sale and not prior
to the receipt of the full price of the goods.

Petitioner is correct. Thus, assuming arguendo that the provisions of PD 115

apply, petitioner is not liable for Estafa because Sec. 13 of PD 115 provides that an
entrustee is only liable for Estafa when he fails to turn over the proceeds of the sale
of the goods x x x covered by a trust receipt to the extent of the amount owing to
the entruster or as appears in the trust receipt x x x in accordance with the terms
of the trust receipt.

The trust receipt entered into between Asiatrust and petitioner states:

In case of sale I/we agree to hand the proceeds as soon as

received to the BANK to apply against the relative acceptance (as
described above) and for the payment of any other indebtedness of
mine/ours to ASIATRUST DEVELOPMENT BANK. [19] (Emphasis
supplied.)

Clearly, petitioner was only obligated to turn over the proceeds as soon as he
received payment. However, the evidence reveals that petitioner experienced
difficulties in collecting payments from his clients for the communication towers.
Despite this fact, petitioner endeavored to pay his indebtedness to Asiatrust, which
payments during the period from September 1997 to July 1998 total approximately
PhP 1,500,000. Thus, absent proof that the proceeds have been actually and fully
received by petitioner, his obligation to turn over the same to Asiatrust never arose.

What is more, under the Trust Receipt Agreement itself, no date of maturity
was stipulated. The provision left blank by Asiatrust is as follows:

x x x and in consideration thereof, I/we hereby agree to hold said

goods in Trust for the said Bank and as its property with liberty to sell
the same for its account within ________ days from the date of
execution of the Trust Receipt x x x[20]

In fact, Asiatrust purposely left the space designated for the date blank, an action
which in ordinary banking transactions would be noted as highly irregular. Hence,
the only way for the obligation to mature was for Asiatrust to demand from
petitioner to pay the obligation, which it never did.

Again, it also makes the Court wonder as to why Asiatrust decided to leave
the provisions for the maturity dates in the Trust Receipt agreements in blank,
since those dates are elemental part of the [Link] then, as can be gleaned from
the records of this case, Asiatrust also knew that the capacity of petitioner to pay
for his loan also hinges upon the latters receivables from Islacom, Smart, and
Infocom where he had ongoing and future projects for fabrication and installation
of steel communication towers and not from the sale of said goods. Being a bank,
Asiatrust acted inappropriately when it left such a sensitive bank instrument with a
void circumstance on an elementary but vital feature of each and every loan
transaction, that is, the maturity dates. Without stating the maturity dates, it was
impossible for petitioner to determine when the loan will be due.

Moreover, Asiatrust was aware that petitioner was not engaged in selling the
subject goods and that petitioner will use them for the fabrication and installation
of communication towers. Before granting petitioner the credit line, as
aforementioned, Asiatrust conducted an investigation, which showed that petitioner
fabricated and installed communication towers for well-known communication
companies to be installed at designated project sites. In fine, there was no abuse of
confidence to speak of nor was there any intention to convert the subject goods for
another purpose, since petitioner did not withhold the fact that they were to be used
to fabricate steel communication towers to Asiatrust. Hence, no malice or abuse of
confidence and misappropriation occurred in this instance due to Asiatrusts
knowledge of the facts.

Furthermore, Asiatrust was informed at the time of petitioners application

for the loan that the payment for the loan would be derived from the collectibles of
his clients. Petitioner informed Asiatrust that he was having extreme difficulties in
collecting from Islacom the full contracted price of the towers. Thus, the duty of
petitioner to remit the proceeds of the goods has not yet arisen since he has yet to
receive proceeds of the goods. Again, petitioner could not be said to have

misappropriated or converted the proceeds of the transaction since he has not yet
received the proceeds from his client, Islacom.

This Court also takes judicial notice of the fact that petitioner has fully paid
his obligation to Asiatrust, making the claim for damage and prejudice of Asiatrust
baseless and unfounded. Given that the acceptance of payment by Asiatrust
necessarily extinguished petitioners obligation, then there is no longer any
obligation on petitioners part to speak of, thus precluding Asiatrust from claiming
any
damage.
This
is
evidenced
by
Asiatrusts Affidavit
of
[21]
Desistance acknowledging full payment of the loan.

Reasonable Doubt Exists

In the final analysis, the prosecution failed to prove beyond

reasonable doubt that petitioner was guilty of Estafa under Art.
315, par. 1(b) of the RPC in relation to the pertinent provision of
PD 115 or the Trust Receipts Law; thus, his liability should only be
civil in nature.

While petitioner admits to his civil liability to Asiatrust, he

nevertheless does not have criminal liability. It is a wellestablished principle that person is presumed innocent until
proved guilty. To overcome the presumption, his guilt must be
shown by proof beyond reasonable doubt. Thus, we held in People
v. Mariano[22] that while the principle does not connote absolute
certainty, it means the degree of proof which produces moral
certainty in an unprejudiced mind of the culpability of the
accused. Such proof should convince and satisfy the reason and

conscience of those who are to act upon it that the accused is in

fact guilty. The prosecution, in this instant case, failed to rebut the
constitutional innocence of petitioner and thus the latter should
be acquitted.
At this point, the ruling of this Court in Colinares v. Court of Appeals is very
apt, thus:

The practice of banks of making borrowers sign trust receipts to

facilitate collection of loans and place them under the threats of criminal
prosecution should they be unable to pay it may be unjust and
inequitable, if not reprehensible. Such agreements are contracts of
adhesion which borrowers have no option but to sign lest their loan be
disapproved. The resort to this scheme leaves poor and hapless
borrowers at the mercy of banks, and is prone to misinterpretation x x x.
[23]

Such is the situation in this case.

Asiatrusts intention became more evident when, on March 30,

2009, it, along with petitioner, filed their Joint Motion for Leave to
File and Admit Attached Affidavit of Desistance to qualify the
Affidavit of Desistance executed by Felino H. Esquivas, Jr.,
attorney-in-fact of the Board of Asiatrust, which acknowledged the
full payment of the obligation of the petitioner and the successful
mediation between the parties.

From the foregoing considerations, we deem it unnecessary to discuss and

rule upon the other issues raised in the appeal.

WHEREFORE, the CA Decision dated August 29, 2003 affirming

the RTC Decision dated May 29, 2001 is SET ASIDE. Petitioner
ANTHONY L. NG is hereby ACQUITTED of the charge of violation
of Art. 315, par. 1(b) of the RPC in relation to the pertinent
provision of PD 115.

SO ORDERED.