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REPUBLIC OF THE PHILIPPINES

OFFICE OF THE CITY PROSECUTOR


TACLOBAN CITY

MANILDRA FLOUR MILLS PTY LTD.,


Complainant,
I.S. No. ___________
-v e r s u s-

RICHARD M. WHITE AND


BETTY WHITE, in her Capacity
as Sole Proprietor of
“BRW IMPORT DISTRIBUTION”,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - x

COMPLAINT-AFFIDAVIT
I, PETER STRETTON, of legal age, Australian Citizen, with
business address at 20 Tavistock Street, Auburn, New South Wales,
2144 Australia, after being sworn in accordance with law, depose and
say that:

THE PARTIES

1. Complainant MANILDRA FLOUR MILLS PTY LTD.


(“Manildra”) is a corporation duly organized and existing under the
laws of Australia, with office address at 20 Tavistock Street, Auburn,
New South Wales, 2144 Australia. It is engaged in the business of
producing and selling flour and flour products.

2. Respondent Richard M. White is of legal age, an Australian


national, and with address at Unit 211 Windsor Tower, 163 Legaspi
Street, Legaspi Village, Makati City.

3. Respondent Betty White is the registered owner of BRW


Import Distribution (“BRW”), a sole proprietorship, with current
address at Building 4, Food Terminal, Inc. (FTI), Taguig City. (BRW
Import Distribution formerly held office at 12-B Veterans Road,
Veterans Center, Taguig City.)

STATEMENT OF FACTS

4. On or about 17 September 2004, complainant Manildra


appointed and authorized Richard M. White (“White”) to act as its
agent for the marketing, distribution and sale of Manildra’s products in
the Philippines. White accepted the appointment.
4.1. In an e-mail dated September 2004, Manildra,
through its Mr. John Honan, offered to appoint and authorize
White (who goes by the nickname “Dick”) as its
agent/representative in the Philippines. The said e-mail reads:

“Dick all of the agents that we deal with in Asia


operate under a commission basis, this is mostly
done on a 5% commission basis. I would suggest
rather that you continue to operate the office as we
have been, that we now move to this arrangement.
Our relationships with other agents operate on this
commission basis throughout Asia and have all been
very successful and long term, with both parties
benefiting. I am sure with our support you will be able
to secure sales and have successful relationships
with various companies in the Philippines and this will
allow you to become a key part of the network of
agents we have throughout Asia. Of course, any
direct out of pocket expenses, such as airfreight for
samples will be covered by our end. Dick, please let
me know if you are in agreement with this
arrangement.”

4.2. In his reply of the same date, 17 September 2004,


White accepted the appointment, thus:

“Thank you for your reply…

Your offer of 5% commission is most generous


and welcome. How is this payable.

There are a number of issues and details


which should be addressed in the best interests and
success of Manildra’s market and/or corporate
presence in the Philippines.

I would appreciate a meeting with you and/or


Peter Stretton to discuss this unique market, its
strengths, weaknesses and apportunities not to
mention the powerful domestic millers.

….”

A copy of the e-mail exchange dated 17 September 2004


is attached hereto as Annex “A”.

5. Complainant Manildra and respondent White agreed that


White would look for buyers and sell Manildra’s products in the
Philippines on a commission basis, at a commission rate of five
percent (5%) on the invoice amount. The arrangement between
Manildra and White were as follows:

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5.1. Upon finding buyers in the Philippines, respondent
White would prepare a purchase order and send the purchase
order to Manildra.

5.2. Upon receipt of the purchase order, Manildra would


then prepare the corresponding invoice and arrange for the
shipment of the flour to the Philippines.

5.3. Under this arrangement, While was obligated to


remeit to Manildra any and all proceeds from the sale of
Manildra’s products in the Philippines (the “Sale Proceeds”), less [a]
White’s 5% commission (denominated as “marketing consultancy
fees”; see Annex “A”) and [b] the operating expenses necessary
for the marketing, distribution and sale of Manildra Products (the
“Net Sale Proceeds”).

5.4. Manildra and White further agreed that the Net Sale
Proceeds would be remitted to Manildra within ninety (90) days
from the time that White receives the Sale Proceeds.

5.5. Apart from his 5% commission (marketing,


consultancy fees), respondent White was not supposed to earn
any profit from the sale of the Manildra products.

6. Pursuant to the parties’ agreement, respondent White


marketed, distributed and sold Manildra’s products in the
Philippinesthrough BRW Import Distribution (“BRW”), a sole
proprietorship owned by respondent Beatres Alexis A. White
(“Alexis”), the wife of White.

A copy of the Certification dated 3 November 2010 issued by


the Department of Trade & Industry (DTI), evidencing respondent
Alexis White’s ownership of the business name “BRW Import
Distribution – Branch”, is attached hereto as Annex “B”.

7. Out of convenience, and to safely hold the Sale Proceeds


prior to remittance to complainant Manildra, respondent White
opened, in BRW’s name, several bank accounts in various provinces
(the “Other Accounts”) and a main bank account in ANZ Bank, Manila
Branch in Makati City. One of these provincial bank accounts was
with RCBC-Tacloban located in Tacloban City, Leyte (“RCBC-
Tacloban Account”).

The ANZ Account and the Other Accounts, including the


RCBC-Tacloban Account, were used for the deposit of the Sale
Proceeds.

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7.1. Upon receipt of any Sale Proceeds, White would
deposit them either (a) directly in the ANZ Account, or (b)
initially in the Other Accounts (including the RCBC-Tacloban
Account) – if more convenient based on the location of the sale
and/or the customers – which would be then transmitted to the ANZ
Account.

7.2. Pursuant to the arrangement, White would deduct his


5% commission and BRW’s operating, marketing, distribution,
and other related expenses from the Sale Proceeds (see par.
5.3 above), and then remit the Net Sale Proceeds to Manildra’s
account in ANZ Bank Australia.

8. However, sometime in February 2010, complainant Manildra


discovered that respondent White and/or BRW, through respondent
Alexis (collectively, the respondents “Spouses”), without authority
from Manildra, had been withdrawing Net Sale Proceeds from the
BRW Accounts and using such Net Sale Proceeds for their personal
benefit.

9. In the course of Sycip Gorres Velayo & Co.’s (“SGV”) review


of BRW’s relevant documents, (i.e. 31 December 2009 audited
financial statements and General Ledger Balances as of and for the
period from 1 January 2009 up to 2 February 2010) complainant
Manildra also discovered that, as of February 2010, respondents
Spouses had been deducting from the Net Sale Proceeds, without
Manildra’s authority, their personal expenses, i.e., expenses
unrelated to the operation, marketing, distribution and sale of
Manildra’s products. These deductions should have formed part of
the Net Sale Proceeds. These unauthorized deduction included a
deduction of: Four Hundred Fifty Three Thousand Eight Hundred
Fifty Eight Pesos (P453,858.00), consisting of real estate tax
payments for the Spouses’ residence in Tacloban City. The
check drawn against the RCBC-Tacloban Account was issued
on 7 August 2009.

A copy of SGV’s report evidencing these improper deductions


(in particular, see page 7, Item 3 and page 19 bottom portion under
the heading “Taxes and Licenses – Tacloban) is attached hereto as
Annex “C”.

10. Sometime in May 2010, I together with Mr. John Honan,


met with respondent White to discuss with him the unauthorized
drawings and improper deductions from the ANZ and Other
Accounts, including the RCBC-Tacloban Account. During the
meeting, respondent White admitted that drawings had been made
from the bank account without Manildra’s consent and that these
drawings were over and above the agreed 5% commission to which
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he was entitled. White admitted too that the monies were not due to
him or to his wife Alexis and he promised to use the best of his
abilities to have Alexis return the money to Manildra. Otherwiswe, he
would repay Manildra the unauthorized drawings in full. White further
admitted that he understood the ramifications of his hand his wife’s
actions, i.e., Manildra would see the drawings as fraudulent and
would wind up the business if the Whites could not be trusted.

11. On 28 September 2010, complainant Manildra, through


counsel, made a demand to respondents Spouses that they return to
Manildra, among others, the amount of P453,858.00, representing
the improper and fraudulent charging of expenses relating to the
payments on respondents Spouses’ personal property in Tacloban.

A copy of the demand letter to respondents Spouses is


attached hereto as Annex “D”.

12. To date, respondents Spouses have not heeded


complainant Manildra’s demand. In fact, they have not responded to
Manildra’s demand letter.

THE CRIME COMMITTED

13. I understand from our lawyer that respondents Spouses’


acts of (a) withdrawing complainant Manildra’s Net Sale Proceeds
and (b) deducting personal and improper expenses from the Sale
Proceeds, without Manildra’s authority and approval, from the RCBC-
Tacloban Account in Tacloban City is a clear misappropriation and/or
conversion of complainant Manildra’s Net Sale Proceeds. This is
unquestionably punishable under Article 315(1)(B) OF THE Revised
Penal Code (“RPC”), which provides:

“Art. 315. Swindling (estafa). – Any person who shall defraud


another by any of the means mentioned hereinbelow shall be
punished by:

xxx

1. With unfaithfulness or abuse of confidence, namely:

xxx

(b) By 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, or
under any other obligation involving the duty to make delivery of, or
to return the same, even though such obligation be totally or
partially guaranteed by a bond, or by denying having received such
money, goods, or other property;

x x x.”
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14. The elements of Estafa under Article 315(1)(b) are as
follows:

a. That money, goods, or other personal property be received by the


offender in trust, or on commission, or for administration, or under any
other obligation involving the duty to make delivery of, or to return the
same;

b. That there be misappropriation or conversion of such money or


property by the offender, or denial on his part of the receipt of the
same;

c. That such misappropriation or conversion, or denial, is to the prejudice


of another; and

d. That there is a demand made by the offended party to the offender (II
Reyes, The Revised Penal Code, 1995 ed., 658).

15. Respondents Spouses’ act of misappropriating and/or


converting complainant Manildra’s Net Sale Proceeds to their own
benefit and to Manildra’s prejudice, in conspiracy with each other,
satisfy all the elements of Estafa under Article 315(1)(b) of the RPC.

16. Respondents Spouses held the Sale Proceeds in, among


others, the RCBC-Tacloban Account in trust for, and/or with a duty to
administer the same on behalf of, complainant Manildra.

16.1. As stated in paragraphs 4 to 6 above, White, as


Manildra’s agent/representative, acting through BRW, was
obligated to remit to Manildra the Sale Proceeds, less only (a)
White’s 5% commission and (b) the necessary operating,
marketing, distribution and other related expenses incurred in
the sale of Manildra’s Products.

16.2. By virtue of Manildra’s and White’s agreement, and


the circumstance that White acted through BRW, respondents
Spouses administered the money in, among others, the RCBC-
Tacloban Account, and received and held the same in trust for
Manildra. As shown in paragraph 7 above, White, through
BRW/Alexis, maintained the RCBC-Tacloban Account to hold
the Sale Proceeds until remitted directly to Manildra in Australia
or to the ANZ Account for remittance to Manildra in Australia.

17. Respondents Spouses took and misappropriated and/or


converted the amount of Four Hundred Fifty Three Thousand Eight
Hundred Fifty Eight Pesos (P453,858.00), which was deposited in
RCBC-Tacloban, by improperly and fraudulently deducting said
amount from the Net Sales Proceeds and, instead of remitting the
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amount to Manildra, used it to pay their personal real estate taxes in
Tacloban City.

18. Respondent White, in conspiracy with his wife respondent


Alexis White, abused the confidence reposed in him, and violated his
fiduciary duty, as agent of complainant Manildra.

18.1. Respondents Spouses’ act of deducting the amount


of P453,858.00 from the RCBC-Tacloban Account and not
remitting the same to Manildra constitutes misappropriation
and/or conversion of Manildra’s personal property.

19. As a result of respondents Spouses’ said misappropriation


and/or conversion, complainant Manildra was prejudiced in the
amount of P453,858.00 representing the improper deductions
fraudulently applied to real estate tax payments for the Spouses’
residence in Tacloban City.

20. I am executing this Affidavit to attest to the truth of the


foregoing statements, for the purpose of instituting criminal
proceedings against respondents Richard M. White and Betty White,
for the commission of Estafa in violation of Article 315(1)(b).

21. It is respectfully prayed that the Honorable Public


Prosecutor issue and file the corresponding Informations against
respondents for the above crimes in the proper court. Affiant prays for
other remedies just and equitable under the premises.

PETER STRETTON
Affiant

SUBSCRIBED AND SWORN to before me this 23rd day of


March 2011 in Makati City.

____________________
Assistant City Prosecutor

CERTIFICATION

I HEREBY CERTIFY that I have personally examined the


affiant, and I am satisfied that he voluntarily executed and understood
this Complaint-Affidavit.

Assistant City Prosecutor