#6 Alfredo Ching vs. Hon. Court of Appeals, et. al.

G.R. No. 110844

27 April 2000
Ponente: J, Buena
Keywords: Trust Receipts violation, failure to turn over implication,
purpose of trust receipts
Doctrine:
An act violative of a trust receipt agreement is one made of
committing estafa.
Trust receipts are not merely an additional or side document. These
are considered as security transactions intended to aid in financing
importers and retail dealers who do not have sufficient funds or
resources to finance importation of purchase of merchandise. It is
considered as a security agreement, a bank acquires security
interest in goods. It secures indebtedness.
Facts:
1. 4 February 1992- Alfredo Ching was charged RTC-Makati with 4 counts
of estafa punishable under Article 315 (1)(b) of the Revised Penal Code
(RPC), in relation to PD No. 115 or the Trust Receipts Law
2. The information showed the following:
a. On 18 May 1981, 3 June 1981, 24 June 1981 and 24 June 1981,
Alfredo Ching executed a trust receipt agreement in favor of Allied
Banking Corporation in Makati City. This is in consideration of the
receipt by the Alfredo Ching of the goods worth P278,917.80,
P419,719.20, P387,551.45 and P389,085.14 respectively.
b. Alfredo Ching agreed to sell for cash with express obligation to remit
to ABC proceeds of the sale and/or turn over goods if not sold on
demand. However after having possession, Alfredo Ching
misapplied and convert for his personal use and benefit said goods
and/or proceeds. Thus this case.
3. 10 February 1992- Alfredo Ching filed motion to Strike out information
4. 13 February 1992- RTC required prosecutors office to conduct
preliminary investigation
5. 5 March 1992- Alfredo Ching and Philippine Blooming Mills Inc. filed a
case before RTC for declaration of nullity of documents and damages
against Allied Banking Corporation.
6. 7 August 1992- Ching filed petition before RTC for suspension of
criminal proceedings on ground of prejudicial question in civil action.
The prosecution opposed.

7. 26 August 1992- RTC denied petition for suspension. Alfredo Ching filed
MR which RTC denied and CA affirmed RTC denial. Thus this case.
Issue: Whether or not the trust receipts issued by Alfredo Ching are null and
void?
Held: No. Petition is bereft of merit.
Section 13 of Trust Receipt Law- Failure of an entrustee to turn over proceeds
of sales of goods, documents or instruments covered by a trust receipt to the
extent of the amount owing to the entrustee or as it appears in the trust
receipt or to return said goods. Documents or instruments if they were not
sold or disposed of in accordance with the terms of the trust receipt shall
constitute the crime of estafa, punishable under RPC 315 (1)(b).
An act violative of a trust receipt agreement is one made of
committing estafa.
Alfredo Ching submission of the truth or falsity of the parties claims
regarding the true nature of transaction and documents, whether this is true
or not, the SC already resolved the merits of a case on the basis of the
records and other evidence before it.
Alfredo Ching, in its amended complaint said that the transaction was a
pure loan without any trust receipt agreement and trust receipt documents
were merely additional documents. - The SC did not agree. Naked
statement must be entitled to little weight (Mr. Justice Story). As also stated
by the CA, the concept in which Alfredo Ching signed the trust receipts, that
is whether he signed the trust receipts as such trust receipts or as a mere
evidence of a pure and simple loan transaction is not decisive because
precisely, a trust receipt is a security agreement of any indebtedness. Trust
receipts are not merely an additional or side document. These are
considered as security transactions intended to aid in financing
importers and retail dealers who do not have sufficient funds or
resources to finance importation of purchase of merchandise. It is
considered as a security agreement, a bank acquires security
interest in goods. It secures indebtedness.
Dispositive: WHEREFORE, premises considered, the assailed decision and
resolution of CA is hereby affirmed, and instant petition is dismissed for lack
of merit. Accordingly the RTC of Makati Branch 58, is hereby directed to
proceed with the hearing and trial on the merits of Criminal Case Nos. 920934 to 9200937, inclusive and to expedite proceedings therein, without
prejudice to the right of the accused to due process.