GENERAL BONDED WAREHOUSE ACT PHILIPPINE TOBACCO FLUE CURING AND REDRYING CORPORATION VS.

RIZALINO PABLO, Director of Commerce G.R. NO. L-20085, August 8, 1975 FACTS: The case was an appeal from a decision of the Court of First Instance of Manila, certified by the Court of Appeals, pursuant to paragraph 3(5) of Section 17 of the Judiciary Act, as amended by Section 2 (5) of Republic Act No. 2313, the amount involved being P24,905,579.63. The Philippine Tobacco Flue Curing and Redrying Corporation , referred to in the case as PTFCRC is a domestic corporation engaged in flue curing and redrying of tobacco leaves. PTFCRC has entered into various agreements with Agricultural Credit and Cooperative Financing Administration, ACCFA for short. The first agreement executed was on February 2, 1959. As agreed, PTFCRC shall redry, pack and keep in storage all Virginia leaf tobacco, including fumigation of stored tobacco to prevent damage of pests for a certain fee. Additionally, PTFCRC shall post a bond to guarantee its faithful performance of the agreement, and to answer for any damage that may be suffered by ACCFA while the tobacco is in the plant or warehouse of the former. The amount of the bond maybe increased at the option of ACCFA. For the 2 Agreements entered by both parties, PTFCRC and ACCFA, the Director of Commerce, through its Agent, has been requiring additional bond from the PTFCRC pursuant to the provisions of the General Bonded Warehouse Act, for allegedly receiving for storage in excess of the required storage amount or equivalent of the warehouse. However, PTFCRC contended that they were not engaged in warehousing and storage, and therefore, not subject to the provisions of the General Bonded Warehouse Act, which this contention was rejected by the Director Commerce. Consequently, PTFCRC filed a petition for prohibition with a writ of preliminary injunction to the Court of First Instance of Manila. After trial, judgment was rendered declaring that PTFCRC was not engaged in the business of warehousing, and is therefore not required to post additional bond, declaring that the required bond of P24M+ was null and void, and making the injunction permanent.

ISSUE: Whether or not the petitioner-appellee should post an additional bond, as required by the Director of Commerce, pursuant to the provisions of sections 4 and 5 of Act No. 3893, as amended, otherwise known as the General Bonded Warehouse Act. RULING: Section 4 of the General Bonded Warehouse Act stated that the bond shall be so conditioned as to respond for the market value of the commodity actually delivered and received at any time the warehouseman is unable to return the commodity or to pay its value. The main intention of the lawmaker in requiring the bond is to give protection to the owner of the commodity against possible abuses of the person to whom the physical control of his properties is delivered. Based on this premise, the appeal was dismissed by the Supreme Court as ACCFA is amply protected by the insurance with the GSIS and by the bond posted by PTFCRC for its faithful performance of the contract. Further, when the case was elevated to the highest court, ACCFA was already defunct, and the commodity subject of the appeal was already withdrawn, as the ageing process, as testified in the court takes only 18 to 24 months. Therefore, the required bond already ceases to be controversial.

TRUST RECEIPTS LAW PEOPLE of the PHILIPPINES and ALLIED BANKING CORPORATION VS. HON. JUDGE DAVID NITAFAN and BETTY SIA ANG G.R. NOS. 81559-60, April 6, 1992 FACTS: The case is a petition for certiorari to review the order of the Regional Trial Court granting the motion to quash filed by the private respondent. Betty Sia Ang was then the proprietress of Eckart Enterprises located in Quezon City ISSUE: Whether or not an entrustee in a trust receipt agreement, who fails to deliver the proceeds of the sale or to return the goods if not sold, to the entruster-bank is liable for the crime of estafa. RULING: 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 the latter is the owner or not. The law does not seek to enforce payment of the loan. Thus, there can be no violation of a right against imprisonment for non-payment of a debt, as what the private respondent is contending. On the basis of the lower court that a trust receipt transaction is an evidence of a loan being secured so that there is, as between the parties to it, a credit-debtor relationships. According to the highest court, a trust receipt arrangement does not involve a simple loan transaction between a credit and a debtor-importer. Apart from a loan feature, the trust receipt arrangement has a security feature that is covered by the trust receipt itself. The second feature is what provides the much-needed financial assistance to our traders in the importation or purchase of goods or merchandise through the use of those goods or merchandise as collateral for the advancements made by a 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. On the 2 cases (Cuervo and Sia) where the decision of the lower court were further relied upon, that the penal clause of PD 115 on the Trust Receipts Law is inoperative because it does not actually punish an offense mala prohibita and that it only refers to the relevant estafa provision in the Revised Penal Code.

The highest court explained that PD 115 was not applied because the questioned acts were committed before its effectivity. In Lee vs. Rodil and Sia vs. Court of Appeals, the Supreme court ruled that the acts involving the violation of trust receipt agreements occurring after January 29, 1973 (date of effectivity of PD 115) would make the accused criminally liable for estafa under paragraph 1 (b), Article 315 of the Revised Penal Code pursuant to the explicit provision in Section 13 of PD 115. The factual circumstance in the present case showed that the alleged violation was committed sometime in 1980 or during the effectivity of PD 115, and her failure to account for the balance is what makes her criminally liable for estafa. Further, it is in the context of upholding public interest that the law now specifically designates that a breach of a trust receipt agreement will make one liable for estafa, as it is an offense punished as malum prohibitum regardless of the existence of intent or malice. A mere failure to deliver the proceeds of the sale or the goods if not sold constitutes a criminal offense that causes prejudice not only to another but more to the public interest. The Supreme Court GRANTED the petition and SET ASIDE the order of the lower court. The case was remanded to the said court for disposition.