PEOPLE OF THE PHILIPPINES vs. Hon.

Judge Nitafan 
G.R. Nos. 81559-60, 1992 
Ponente : Gutierrez, JR., J 
 
FACTS :​ Betty Sia Ang was charged with the crime of Estafa by the Allied Banking 
Corporation. The accused being the proprietress of Eckart Enterprises, defrauded Allied 
Banking Corporation. Betty Sia Ang received in trust from the bank Gordon Plastics, plastic 
sheeting, and Hook Chromed in the total amount of P 398,000.00. However, upon receiving the 
trust given by the bank she did not comply with the express obligation(s); 1) if the accused sold 
the merchandise, the accused must account for the proceeds, 2) if the accused did not sell the 
merchandise, the accused must return the merchandise or upon demand. Here, the accused did 
not return the merchandise, she only paid the amount of P283,115.78 and left an unaccounted 
amount of P114,884.22, this amount was in her possession and with the intent to defraud she 
misappropriated, misapplied and converted it to her personal use causing damage to Allied 
Banking Corporation. 
 
The accused filed a motion to quash the information, the judge granted the motion, 
explaining that a trust receipt transaction is evidence of a loan being secured between the parties. 
Ruling that the penal clause of PD 115 or Trust Receipts Law is inoperative because it does not 
punish an offense mala prohibita, it refers to relevant Estafa provision in the RPC. The private 
respondent contends that PD 115 is unconstitutional that it violates the constitutional 
prohibition against imprisonment for non-payment of a debt. That there was no malice in a 
breach of a commercial undertaking. 
 
ISSUE : ​Whether the accused is liable for the crime of Estafa. 
 
RULING : ​ Yes. Under Article 315 of the RPC; Swindling (Estafa), any person who shall 
defraud another by any of the means mentioned; (b) 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, under any other obligation involving the duty to 
make a delivery or to return the item. 
 
Here, the failure to account for the P114,894.22 balance makes the accused criminally 
liable. They explained that a trust receipt arrangement does not involve a simple loan transaction 
between a creditor and debtor - importer. The trust receipt arrangement has a security feature 
that is covered by the trust receipt. There is also financial assistance to the traders in the 
importation or purchase of goods or merchandise through the use of those goods or 
merchandise as collateral for the advancement made by a bank. Here, the Trust Receipts Law 
punishes dishonesty and abuse of confidence in the handling of money or goods to the prejudice 
of another, whether he is the owner or not. The offense here is punished as a malum prohibitum 
whether there is intent or malice. The law punishes the dishonesty and abuse of confidence in 
the handling of money or goods that prejudiced the bank. The petition was​ granted.