People v Judge Nitafan G.R. Nos. 107964-66.

February 1,
1999
MARCH 15, 2014LEAVE A COMMENT

PD 115 is not barred by the constitutional prohibition against imprisonment for

non-payment of debt. The Trust Receipts Law punishes the dishonesty and abuse
of confidence in the handling of money or goods to the prejudice of another,
regardless of whether or not the latter is the owner. The law does not seek to
enforce payment of the loan. There is thus no violation of the Constitutional right
imprisonment for non-payment of debts.

Facts: Allied Banking Corporation filed an information for estafa against Betty Sia Ang,
proprietess of Eckart Enterprises. The comlaint alleged that Ang received from the bank
Goardon plastics amounting to P398,000 specified in a trust receipt and covered by a
Domestic Letter of Credit. Ang had the obligation to sell the goods and to account for the
proceeds, if sold, or to return the goods, if not sold, on or before 16 October 1980, or upon
demand. Despite repeated demands, Ang paid only P283,115. It was alleged that she
misappropriated, misapplied and converted the balance to her own personal use and
benefit. Ang filed a motion to quash the information, alleging that violation of the trust
receipt constitutes only a civil liability. Judge Nitafan granted the Motion to quash. Ang also
questioned the constitutionality of PD 115, contending that it violates the constitutional
prohibition for imprisonment for debt .

Issue: Whether or not PD 115 is constitutional.

Held: The Trust Receipts Law punishes the dishonesty and abuse of confidence in the
handling of money or goods to the prejudice of another, regardless of whether or not the
latter is the owner. The law does not seek to enforce payment of the loan. There is thus no
violation of the Constitutional right imprisonment for non-payment of debts.

Section 1(b) of Article 315 states that one of the means by which to commit estafa is by
misappropriating or converting, to the prejudice of another, money, goods received by the
offender in trust or under any other obligation involving the duty to make delivery of or to
return the same. It is the failure of Ang to account for the balance that makes her liable for
estafa.

Trust receipt arrangements do not involve a simple loan transaction. Apart from a loan
feature, the trust receipt arrangement has a security feature covered by the trust receipt
itself. The second feature provides needed financial assistance to traders in the importation
or purchase of goods through the use of the goods as collateral for the advancements made
by the bank. The title of the bank to the security is the one sought to be protected and not
the loan which is a separate and distinct agreement. Like BP 22, PD 115 punishes the act as
an offense against public order, not against property. The offense is punished as a mala
prohibitum regardless of the existence of intent or malice. A mere failure to deliver the
proceeds of the sale or the goods constitute a criminal offense that causes prejudice to
another and, more importantly, to the public interest.