Chua-Burce vs. Court of Appeals and People of the Philippines

A bank cash custodian who misappropriates funds in her custody cannot be convicted of estafa under Article 315(1)(b) of the Revised Penal Code because she lacks juridical possession of the funds — her possession being merely material or physical, akin to that of a bank teller, whose possession is the possession of the bank. The proper crime, if any, would be qualified theft, provided the information alleges its essential elements.

The petitioner, Cristeta Chua-Burce, was employed as Cash Custodian of the Metropolitan Bank and Trust Company (Metrobank), Calapan Branch, Oriental Mindoro. In that capacity, she was primarily responsible for the cash-in-vault of the bank. The case arose from a shortage of P150,000.00 discovered during a physical count of the cash inside the vault. The bank conducted four separate investigations, all of which concluded that the petitioner was primarily responsible for the shortage. The petitioner's service was subsequently terminated, and both criminal and civil cases were filed against her.

On August 16, 1985, Ramon Rocamora, the Manager of Metropolitan Bank and Trust Company, Calapan Branch, requested Fructuoso Peñaflor, Assistant Cashier, to conduct a physical bundle count of the cash inside the vault, which should total P4,000,000.00, more or less. During this initial cash count, they discovered a shortage of fifteen bundles of One Hundred Pesos denominated bills totalling P150,000.00. The One Hundred Peso bills actually counted was P3,850,000.00 as against the balance of P4,000,000.00 in the Cash in Vault (CIV) Summary Sheet, or a total shortage of P150,000.00. The next day, a re-verification of the records and documents of the transactions in the bank was conducted, and there was still a shortage of P150,000.00.

The bank initiated four investigations: the first by Ramon Rocamora, the Manager; the second by the bank's internal auditors headed by Antonio Batungbakal; the third by the bank's Department of Internal Affairs; and the fourth by the National Bureau of Investigation (NBI). All of these investigations concluded that there was a shortage of P150,000.00, and that the person primarily responsible was the bank's Cash Custodian, Cristeta Chua-Burce, the herein accused. On November 4, 1985, unable to satisfactorily explain the shortage, the accused's service with the bank was terminated.

To recover the missing amount, Metrobank filed a Civil Case for Sum of Money and Damages with Preliminary Attachment and Garnishment docketed as Civil Case No. R-3733 against petitioner and her husband, Antonio Burce. Prior to the filing of the Answer, an Information for Estafa was filed against petitioner, alleging that she, with unfaithfulness or abuse of confidence and with intent to defraud, in her capacity as Cash Custodian of the Metrobank, Calapan Branch, took from the Bank's Vault the amount of P150,000.00, which was under her direct custody and/or accountability, misappropriated and converted it to her own personal use and benefit, without the knowledge and consent of the offended party, despite repeated demands for her to account and/or return the said amount.

Both civil and criminal cases were raffled to the same branch of the Regional Trial Court of Calapan, Oriental Mindoro, Branch 40. Petitioner moved for the suspension of the criminal case on the ground of the existence of a prejudicial question, which the trial court granted, but the Court of Appeals reversed on petition for certiorari, ruling that there was no prejudicial question. Petitioner was arraigned and pleaded not guilty. While the trial of the criminal case was suspended, the trial of the civil case continued, and at the time of arraignment, the civil case was already submitted for decision. During the pre-trial conference of the criminal case, the parties agreed to adopt their respective evidence in the civil case as their respective evidence in the criminal case. The trial court ordered the parties to submit their written agreement pursuant to Section 4 of Rule 118 of the Rules of Court. Thereafter, petitioner, duly assisted by her counsel, with the conforme of the public prosecutor, entered into a pre-trial agreement adopting the evidence adduced in the civil case for both prosecution and defense in the criminal case. Pursuant to the pre-trial agreement, the public prosecutor filed a Motion to Adopt Evidence, which was granted by the trial court.

On March 18, 1991, the trial court rendered a consolidated decision finding petitioner guilty of estafa under Article 315(1)(b) of the Revised Penal Code in the criminal case, and liable for the amount of P150,000.00 in the civil case. The trial court imposed a penalty of imprisonment from six (6) months of arresto mayor in its maximum period, as minimum, to eight (8) years of prision mayor in its minimum period, as maximum, considering the mitigating circumstance of voluntary surrender. In the civil case, the court ordered petitioner and her husband to pay Metrobank P150,000.00 with legal rate of six percent (6%) per annum from August 15, 1985 until fully paid, plus costs. Petitioner appealed her conviction in the criminal case to the Court of Appeals, which affirmed the trial court's decision in toto. Her Motion for Reconsideration was denied, hence the recourse to the Supreme Court.

• Admissibility of Polygraph Examination: Petitioner contended that the trial court erred in taking into account the results of the polygraph examination as circumstantial evidence of guilt, considering the inherent unreliability of such tests, and the fact that the previous trial judge who handled the case already ruled such evidence as inadmissible.
• Presumption of Misappropriation: Petitioner insisted that there can be no presumption of misappropriation or conversion against her when there were other persons who had direct and greater access to the cash-in-vault.
• Validity of the Trial: Petitioner questioned the validity of the trial of the criminal case, arguing that the pre-trial agreement dispensed with the intervention of the public prosecutor in a full-blown trial of the criminal case, and that the fiscal was not actually present and did not control and supervise the prosecution of the case.
• Admission of Previously Denied Evidence: Petitioner raised the issue of whether the presiding judge of the Regional Trial Court could admit in evidence the evidence which was already denied admission in the order of the former judge of the same court.
• Applicability of Rule 111 Section 2(a): Petitioner raised the issue of whether Rule 111 Section 2(a) of the Revised Rules on Criminal Procedure is applicable in the case at bar.

• Direct Responsibility and Accountability: The Office of the Solicitor General contended that the guilt of petitioner has been proven beyond reasonable doubt, first, because petitioner was the cash custodian who was directly responsible and accountable for the cash-in-vault.
• Exclusive Access to the Vault: The OSG argued that the other persons who had access to the vault facilities never used the duplicate keys to open the safety deposit boxes and the cash safe from where the P100.00 bill denominations were located; in fact, the duplicate keys were offered in evidence still in their sealed envelopes.
• Alterations and Superimposition: The OSG pointed out that alterations and superimposition on the cash-in-vault summary sheet were made by petitioner to cover the cash shortage.
• Validity of Joint Trial: The OSG maintained that there was a valid joint trial of the civil and criminal cases.

• Validity of the Trial: Whether there was a valid trial of the criminal case when the public prosecutor did not intervene and present any evidence during the trial, the evidence being adopted from the civil case pursuant to a pre-trial agreement.
• Elements of Estafa: Whether the elements of the crime of estafa under Article 315(1)(b) of the Revised Penal Code were duly proven beyond reasonable doubt, particularly whether the petitioner had juridical possession of the missing funds.

• Validity of the Trial: Yes. The trial was valid. Section 5 of Rule 110 requires that all criminal actions shall be prosecuted under the direction and control of the public prosecutor, and the records show that the public prosecutor actively participated in the prosecution of the criminal case from its inception. The pre-trial agreement adopting the civil case evidence was allowed under Section 2(e) of Rule 118, was reduced to writing and signed by petitioner, her counsel, and the public prosecutor, and is binding on the petitioner.
• Elements of Estafa: No. The first element of estafa under Article 315(1)(b) — that personal property is received in trust, on commission, for administration, or under any other circumstance involving the duty to make delivery of or to return the same — is absent. The petitioner, as a mere cash custodian, had no juridical possession over the missing funds; her possession was merely material or physical, akin to that of a bank teller, whose possession is the possession of the bank.

• Validity of the Trial: The Court found that the pre-trial agreement was prepared by petitioner with the conforme of the public prosecutor, and thereafter petitioner filed a consolidated memorandum for both civil and criminal cases. Section 5 of Rule 110 requires that all criminal actions shall be prosecuted under the direction and control of the public prosecutor, the rationale being "to prevent malicious or unfounded prosecutions by private persons." The records show that the public prosecutor actively participated in the prosecution of the criminal case from its inception. The adoption of evidence from the civil case during pre-trial is allowed under Section 2(e) of Rule 118 of the Rules of Court, which provides that during pre-trial conference, the parties shall consider "such other matters as will promote a fair and expeditious trial." The parties, in compliance with Section 4 of Rule 118, reduced such agreement to writing. Petitioner, her counsel, and the public prosecutor signed the agreement. The Court held that petitioner is bound by the pre-trial agreement, and she cannot now belatedly disavow its contents.
• Elements of Estafa: The Court enumerated the elements of estafa through conversion or misappropriation under Article 315(1)(b) of the Revised Penal Code: (1) that personal property is received in trust, on commission, for administration or under any other circumstance involving the duty to make delivery of or to return the same, even though the obligation is guaranteed by a bond; (2) that there is conversion or diversion of such property by the person who has so received it or a denial on his part that he received it; (3) that such conversion, diversion or denial is to the injury of another; and (4) that there be demand for the return of the property. The Court found the first element absent. When the money, goods, or any other personal property is received by the offender from the offended party in trust, on commission, or for administration, the offender acquires both material or physical possession and juridical possession of the thing received. Juridical possession means a possession which gives the transferee a right over the thing which the transferee may set up even against the owner. In this case, petitioner was a cash custodian who was primarily responsible for the cash-in-vault. Her possession of the cash belonging to the bank is akin to that of a bank teller, both being mere bank employees. Citing People vs. Locson, the Court explained that the money was in the possession of the defendant as receiving teller of the bank, and the possession of the defendant was the possession of the bank; when the defendant, with grave abuse of confidence, removed the money and appropriated it to his own use without the consent of the bank, there was the taking or apoderamiento contemplated in the definition of the crime of theft. The Court distinguished Guzman vs. Court of Appeals, where a travelling sales agent was found liable for estafa because an agent can assert, as against his own principal, an independent, autonomous right to retain money or goods received in consequence of the agency. The Court concluded that petitioner herein, being a mere cash custodian, had no juridical possession over the missing funds; hence, the element of juridical possession being absent, petitioner cannot be convicted of the crime of estafa under Article 315, No. 1(b) of the Revised Penal Code. The Court further noted in a footnote that the Information could not sustain a conviction for qualified theft under Article 310 because it did not allege the essential elements of "intent to gain" and "without the use of violence against or intimidation of persons or force upon things."

• Juridical possession as an element of estafa under Article 315(1)(b) — For estafa through misappropriation or conversion, the offender must have received the property in trust, on commission, or for administration, thereby acquiring both material or physical possession and juridical possession of the thing received. Juridical possession means a possession which gives the transferee a right over the thing which the transferee may set up even against the owner. In this case, the Court applied the doctrine to hold that a bank cash custodian, like a bank teller, has no juridical possession of bank funds; her possession is merely material, being the possession of the bank itself.
• Distinction between a bank teller/cash custodian and an agent — A receiving teller of a bank who misappropriates funds received from third persons is a mere custodian or keeper of the funds received and has no independent right or title to retain or possess the same as against the bank; payment by third persons to the teller is payment to the bank itself. An agent, on the other hand, can assert, as against his own principal, an independent, autonomous right to retain money or goods received in consequence of the agency, as when the principal fails to reimburse him for advances he has made. Thus, a bank teller or cash custodian who misappropriates funds is liable for qualified theft, while an agent who misappropriates proceeds is liable for estafa.
• Pre-trial agreements in criminal cases — Under Section 2(e) of Rule 118 of the Rules of Court, during pre-trial conference, the parties shall consider "such other matters as will promote a fair and expeditious trial." Under Section 4 of Rule 118, no agreement or admission made or entered during the pre-trial conference shall be used in evidence against the accused unless reduced to writing and signed by him and his counsel. A pre-trial agreement duly signed by the accused, her counsel, and the public prosecutor is binding on the accused, who cannot belatedly disavow its contents.

• "Petitioner herein being a mere cash custodian had no juridical possession over the missing funds. Hence, the element of juridical possession being absent, petitioner cannot be convicted of the crime of estafa under Article 315, No. 1 (b) of the Revised Penal Code." — This is the ratio decidendi of the case, stating the core ground for the acquittal: the absence of juridical possession, an essential element of estafa under Article 315(1)(b).
• "There is an essential distinction between the possession by a receiving teller of funds received from third persons paid to the bank, and an agent who receives the proceeds of sales of merchandise delivered to him in agency by his principal. In the former case, payment by third persons to the teller is payment to the bank itself; the teller is a mere custodian or keeper of the funds received, and has no independent right or title to retain or possess the same as against the bank. An agent, on the other hand, can even assert, as against his own principal, an independent, autonomous, right to retain money or goods received in consequence of the agency." — This passage, quoted from Guzman vs. Court of Appeals, articulates the controlling distinction between the possession of a bank teller/cash custodian and that of an agent, which determines whether the crime is qualified theft or estafa.
• "The money was in the possession of the defendant as receiving teller of the bank, and the possession of the defendant was the possession of the bank. When the defendant, with grave abuse of confidence, removed the money and appropriated it to his own use without the consent of the bank, there was the taking or apoderamiento contemplated in the definition of the crime of theft." — This passage, quoted from People vs. Locson, establishes the principle that a bank teller's possession is the possession of the bank, making the crime qualified theft rather than estafa.

• People vs. Locson, 57 Phil. 325 (1932) — Controlling precedent followed. The Court relied on this case to establish that a bank teller's possession of bank funds is the possession of the bank, and that misappropriation by such an employee constitutes qualified theft, not estafa.
• Guzman vs. Court of Appeals, 99 Phil. 703 (1956) — Followed and distinguished. The Court quoted this case extensively to articulate the distinction between the possession of a bank teller (mere material possession) and that of an agent (juridical possession), which determines the proper criminal liability.
• U.S. vs. Sevilla, 43 Phil. 186 (1922) — Cited for the proposition that deceit is not an essential requisite of estafa with abuse of confidence, since the breach of confidence takes the place of the fraud or deceit.
• U.S. vs. Narvas, 14 Phil. 410 (1909) — Cited for the rationale behind the rule that criminal actions shall be prosecuted under the direction and control of the public prosecutor, which is "to prevent malicious or unfounded prosecutions by private persons."
• Fontanilla vs. People, 258 SCRA 460 (1996) — Cited for the enumeration of the elements of estafa through conversion or misappropriation under Article 315(1)(b) of the Revised Penal Code.
• Sy vs. People, 172 SCRA 685 (1989) — Cited for the enumeration of the elements of estafa through conversion or misappropriation under Article 315(1)(b) of the Revised Penal Code.
• Santos vs. People, 181 SCRA 487 (1990) — Cited for the proposition that when money or property is received in trust, on commission, or for administration, the offender acquires both material or physical possession and juridical possession of the thing received.

• Article 315, paragraph 1(b), Revised Penal Code — The provision defining and penalizing estafa through misappropriation or conversion of money, goods, or any other personal property received by the offender in trust, on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same. The Court held that this provision was inapplicable because the petitioner, as a mere cash custodian, lacked juridical possession of the missing funds.
• Section 5, Rule 110, Rules of Court — The provision requiring that all criminal actions shall be prosecuted under the direction and control of the public prosecutor. The Court applied this provision to uphold the validity of the criminal proceedings, finding that the public prosecutor actively participated in the prosecution from its inception.
• Section 2(e), Rule 118, Rules of Court — The provision allowing the pre-trial conference to consider "such other matters as will promote a fair and expeditious trial." The Court applied this provision to validate the pre-trial agreement adopting the civil case evidence in the criminal case.
• Section 4, Rule 118, Rules of Court — The provision requiring that no agreement or admission made during the pre-trial conference shall be used in evidence against the accused unless reduced to writing and signed by him and his counsel. The Court applied this provision to hold that the petitioner was bound by the pre-trial agreement she signed.
• Article 310, Revised Penal Code — The provision defining qualified theft. The Court noted in a footnote that the Information could not sustain a conviction for qualified theft because it did not allege the essential elements of "intent to gain" and "without the use of violence against or intimidation of persons or force upon things."

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concurred.