Ong vs. Court of Appeals

An agent who signs a trust receipt on behalf of a corporation is criminally liable for estafa under Section 13 of the Trust Receipts Law as a "person responsible for the offense" when the corporation fails to turn over the proceeds or return the goods.

Edward C. Ong acted as an agent for ARMAGRI International Corporation (formerly ARMCO Industrial Corporation), a corporate entrustee, in securing letters of credit and executing trust receipts with Solidbank Corporation. The Trust Receipts Law (P.D. No. 115) penalizes the failure of an entrustee to turn over proceeds or return goods, and specifically provides that if the violation is committed by a corporation, the penalty of imprisonment shall be imposed on the officers, employees, or other persons responsible for the offense.

On June 22, 1990, Edward C. Ong, representing ARMAGRI International Corporation, applied for a letter of credit for P2,532,500 with Solidbank Corporation to finance the purchase of differential assemblies from Metropole Industrial Sales. On July 6, 1990, Ong executed a trust receipt acknowledging receipt of the goods. Subsequently, on July 12, 1990, Ong and Benito Ong, also representing ARMAGRI, applied for another letter of credit for P2,050,000 to purchase urea from Fertiphil Corporation, executing a second trust receipt on July 23, 1990. Both trust receipts stipulated that ARMAGRI undertook to hold the goods in trust for the Bank, turn over the proceeds if sold, or return the goods if unsold upon demand. Additionally, Ong signed a stamped undertaking on the dorsal portion of both trust receipts, agreeing "jointly and severally" to pay a monthly penalty of 1% in case of ARMAGRI's default.

When the trust receipts became due, ARMAGRI failed to pay or deliver the goods to the Bank despite repeated demands. As of May 31, 1991, the unpaid accounts amounted to P1,527,180.66 for the first trust receipt and P1,449,395.71 for the second. Ong and Benito Ong were charged with two counts of estafa. After the prosecution rested its case, Ong and Benito Ong waived their right to present evidence, leading to their conviction by the RTC, which was affirmed by the Court of Appeals.

• Agency as a Defense: Petitioner argued that he merely acted as an agent of ARMAGRI when signing the trust receipts and did not assume personal responsibility for the corporation's undertakings, thus he should not be held liable for the corporation's default.
• Conviction Under Unalleged Facts: Petitioner maintained that he was convicted on a new set of facts not alleged in the Informations, claiming the trial court found ARMAGRI as the entrustee acting through him, which contradicted the Informations alleging he was the entrustee.

• Criminal Liability of an Agent: Whether an agent who signs a trust receipt on behalf of a corporation can be held criminally liable as a "person responsible for the offense" under Section 13 of the Trust Receipts Law.
• Validity of Conviction Under the Informations: Whether the petitioner was convicted under specifications not alleged in the Informations.

• Criminal Liability of an Agent: Yes. The signatory to the trust receipts is a direct participant in the crime and thus a person responsible for the offense under Section 13 of P.D. No. 115.
• Validity of Conviction Under the Informations: No. The Informations explicitly alleged that petitioner, representing ARMAGRI, defrauded the Bank by failing to remit proceeds or return goods, which is sufficient to hold him responsible.

• Criminal Liability of an Agent: Section 13 of the Trust Receipts Law provides that if the violation is committed by a corporation, the penalty of imprisonment shall be imposed upon the directors, officers, employees, or other persons responsible for the offense. Since a corporation cannot be put in jail, the criminal liability falls on the human agent responsible for the violation. Petitioner signed the trust receipts, loan applications, and letters of credit on behalf of ARMAGRI. By signing, he acknowledged receipt of the goods and was fully aware of the obligation to turn over proceeds or return the goods. The law of agency governing civil cases has no application in criminal cases; a person participating in a crime cannot escape punishment on the ground that he acted as an agent. Petitioner failed to present evidence showing he was not responsible for the failure to account for the goods or proceeds.
• Validity of Conviction Under the Informations: The Informations explicitly alleged that petitioner, representing ARMAGRI, defrauded the Bank by failing to remit the proceeds or return the goods. It is sufficient under the Trust Receipts Law to allege and establish the failure of ARMAGRI, whom petitioner represented, to remit the proceeds or return the goods. There is no need to allege in what capacity petitioner participated to hold him responsible for the offense. The corporate entity does not shield the agent who knowingly commits a crime at the instance of a corporation.

• Trust Receipts Law Violation (Malum Prohibitum) — The mere failure by the entrustee to turn over the proceeds of the sale or to return the goods if unsold constitutes a criminal offense under the Trust Receipts Law. It is malum prohibitum, and there is no requirement to prove intent to defraud. The Court applied this by holding ARMAGRI's failure to account for the goods or proceeds as sufficient to constitute estafa, and petitioner's failure to explain the loss made him liable as the responsible person.
• Criminal Liability of Corporate Agents — If a corporation violates the Trust Receipts Law, the penalty of imprisonment is imposed on the officers, employees, or other persons responsible for the offense, because a corporation cannot be imprisoned. The Court applied this by holding petitioner, as the signatory agent, directly responsible for the offense, since he was the human agent who executed the trust receipts and acknowledged the obligations.
• Inapplicability of Agency Law in Criminal Cases — A person who participates in the commission of a crime cannot escape punishment on the ground that he simply acted as an agent of another party. The Court relied on this doctrine to reject petitioner's defense that he was merely acting as an agent for ARMAGRI.

• "The mere failure to account or return gives rise to the crime which is malum prohibitum." — This passage defines the nature of the offense under the Trust Receipts Law, emphasizing that intent to defraud is not required.
• "When a person participates in the commission of a crime, he cannot escape punishment on the ground that he simply acted as an agent of another party." — This articulates the ratio decidendi for rejecting the agency defense in criminal cases involving trust receipts.
• "The existence of the corporate entity does not shield from prosecution the agent who knowingly and intentionally commits a crime at the instance of a corporation." — This reinforces the principle that corporate agents cannot hide behind the corporate veil to evade criminal liability.

• Metropolitan Bank and Trust Company vs. Tonda, 338 SCRA 254 — Cited to support the proposition that the Trust Receipts Law is violated when the entrustee fails to turn over proceeds or return goods.
• People vs. Nitafan, 207 SCRA 726 — Cited for the principle that the violation of the Trust Receipts Law is malum prohibitum.
• Colinares vs. Court of Appeals, 339 SCRA 609 — Cited to establish that there is no requirement to prove intent to defraud under the Trust Receipts Law.
• People vs. Chowdury, 325 SCRA 572 — Cited for the doctrine that the law of agency has no application in criminal cases and that an agent cannot escape punishment for a crime committed on behalf of another.
• Prudential Bank vs. Intermediate Appellate Court, 216 SCRA 257 — Cited to determine civil liability, holding that the person signing the trust receipt for a corporation is not solidarily liable for the civil liability unless he bound himself under a separate contract of surety or guaranty.

• Section 13, Presidential Decree No. 115 (Trust Receipts Law) — Defines the penalty for failure to turn over proceeds or return goods as estafa under Article 315(1)(b) of the Revised Penal Code, and provides that if the violation is committed by a corporation, the penalty is imposed on the responsible officers or persons. The Court applied this to hold petitioner criminally liable as the responsible agent.
• Article 315, Paragraph 1(b), Revised Penal Code — Prescribes the penalty for estafa based on the amount of fraud. The Court applied the Indeterminate Sentence Law to modify the penalty to four years and two months of prision correccional as minimum to twenty years of reclusion temporal as maximum.

Davide, Jr., C.J., Vitug, Ynares-Santiago, and Azcuna, JJ., concur.