[ G.R. No. 29278. October 03, 1928 ] 53 Phil. 874
[ G.R. No. 29278. October 03, 1928 ]
THE PEOPLE OF THE PHILIPPINE ISLANDS, PLAINTIFF AND APPELLEE, VS. YU CHAI HO, DEFENDANT AND APPELLANT. D E C I S I O N
OSTRAND, J.:
This is an appeal from a decision of the Court of First Instance of Cebu in which the defendant was found guilty of the crime of estafa under paragraph 5 of article 535 of the Penal Code and was sentenced to suffer five months of arresto mayor and to pay the costs.
It appears from the evidence that on December 19, 1925, the accused Yu Chai Ho, in representation of his firm, Gui Sing & Co., of which he was the managing partner, placed an order with Wm. H. Anderson & Co. for a quantity of Colgate perfumes and soap to be shipped from New York to Cebu. The order was transmitted to Colgate & Co., New York, and the merchandise was by them shipped to Cebu, consigned to themselves and subject to their order. The bill of lading and the invoices were forwarded to the Cebu branch of the International Banking Corporation, subject to delivery to the purchaser on payment of the purchase price, $259.70. The shipping documents were accompanied by a draft on Gui Sing & Co., who accepted the draft but was unable to pay. The International Banking Corporation of Cebu, therefore, retained the shipping documents and invoices, without which the merchandise could not be cleared through the customhouse and delivered to the defendant or his firm. Through the intervention of Morrison, the Manager of the Cebu branch of Wm. H. Anderson & Co., the International Banking Corporation agreed to deliver the documents to Gui Sing & Co. upon their giving a trust receipt. The trust receipt was duly executed by Gui Sing & Co. and delivered to the International Banking Corporation, whereupon the shipping documents were surrendered to the defendant, who upon presentation of them to the customs authorities, obtained delivery of the merchandise. The defendant thereupon sold the merchandise but, in violation of the terms of the trust receipt, failed to make payment to the International Banking Corporation, and Wm. H. Anderson & Co., as guarantors, were compelled to pay the amount of the draft for the purchase price of the merchandise to the International Banking Corporation.
The trust receipt is in the usual form and, among other things, contains the following provisions:
“I/We hereby agree to hold said goods in trust for the said corporation, and as its property with liberty to sell the same for its account, but without authority to make any other disposition whatever of the said goods or any part thereof (or to proceeds thereof) either by way of conditional sale, pledge, or otherwise.
“In case of sale I/We further agree to hand the proceeds, as soon as received, to the International Banking Corporation to apply against the relative acceptances (as described above) and for the payment of any other indebtedness of mine/ours to the International Banking Corporation.”
That under this trust receipt the title to the merchandise remained in the International Banking Corporation and did not pass to the defendant, is almost too elementary for discussion. It is sufficient to quote the language of the court in the case of In re Dunlap Carpet Co. (206 Fed., 726), in regard to trust receipts:
“By this arrangement a banker advances money to an intending importer, and thereby lends the aid of capital, of credit, or of business facilities and agencies abroad, to the enterprise of foreign commerce. Much of this trade could hardly be carried on by any other means, and therefore it is of the first importance that the fundamental factor in the transaction, the banker’s advance of money and credit, should receive the amplest protection. Accordingly, in order to secure that the banker shall be repaid at the critical point—that is, when the imported goods finally reach the hands of the intended vendee—the banker takes the full title to the goods at the very beginning; he takes it as soon as the goods are bought and settled for by his payments or acceptances in the foreign country, and he continues to hold that title as his indispensable security until the goods are sold in the United States and the vendee is called upon to pay for them. This security is not an ordinary pledge by the importer to the banker, for the importer has never owned the goods, and moreover he is not able to deliver the possession; but the security is the complete title vested originally in the bankers, and this characteristic of the transaction has again and again been recognized and protected by the courts. Of course, the title is at bottom a security title, as it has sometimes been called, and the banker is always under the obligation to reconvey; but only after his advances have been fully repaid and after the importer has fulfilled the other terms of the contract.” (Italics ours.) (See also Moors vs. Kidder, 106 N. Y., 32; Farmers & Mechanics’ Nat. Bk. vs. Logan, 74 N. Y., 568; Barry vs. Boninger, 46 Md., 59; Moors vs. Wyman, 146 Mass., 60; and New Haven Wire Co. Cases, 5 L. R. A., 300.)
But counsel for the defendant argues vigorously that inasmuch as the price of the merchandise in question had been paid to the International Banking Corporation by Wm. H. Anderson & Co., the bank had suffered no loss, and that, therefore, an essential element of the crime of estafa was lacking; that the only party prejudiced by the actions of the defendant was Wm. H. Anderson & Co. and that as to the latter, the defendant had incurred a civil obligation.
We cannot accept this theory. Paragraph 5 of article 535 of the Penal Code reads as follows:
“Any person who, to the prejudice of another, shall convert or misappropriate any money, goods, or other personal property received by such person for safe-keeping, or on commission, or for administration, or under any other circumstances giving rise to the obligation to make delivery of or to return the same, or shall deny having received such money, goods, or other property.”
The language of the paragraph is clear and requires no special construction. As will be seen, the person whose interests are prejudiced through the” conversion or misappropriation of the money, goods, or other personal property need not necessarily be the owner thereof; if such had been the intention of the authors of the Code, the phrase “to the prejudice of another” would have read “to the prejudice of the owner.” Our opinion is also supported by the Supreme Court of Spain in its sentence of May 8, 1884, which in principle is exactly in point. The facts of that case are that one Enrique Mariano handed his watch to his friend, the accused, to keep for him while he, Mariano, was engaged in certain professional work in a circus. Instead of returning the watch to its owner, Mariano, the accused pawned it in a pawnshop for a loan of 225 pesetas, Mariano recovered the watch from the pawnbroker almost immediately and without any expense. In that case, as in the present one, it was argued that as the owner of the watch suffered no loss, no estafa had been committed. The Spanish Supreme Court held that it was immaterial whether the loss had been suffered by the owner or by a third person, and among other things, said:
“Considering that in view of the literal terms of the provision of said article, as well as its spirit and legal reason, whenever damages are caused as a consequence of the aforesaid appropriation or taking away, the act constitutes the crime of estafa, even though the person who suffered the damage is a third party and not the one to whom the misappropriated or converted goods belongs or to whom it is to be returned, for this is an incidental element which in no way affects the juridical nature of the crime.”
The correctness of the view we have taken seems quite clear when it is considered that the action is not one between the defendant and Wm. H. Anderson & Co. or between the defendant and the International Banking Corporation; it deals with a public offense and is brought against the defendant by the People of the Philippine Islands. The very evident object of the article of the Penal Code under which the action is brought is to discourage dishonesty and unfaithfulness in the administration or care of money, goods, or other personal property received for such purposes. The object is not simply to enforce payment of indemnities; that is merely a side issue of a quasi civil nature and is not the gist of the crime or the cause of action. The fact that the defendant gave surety for the fulfillment of his obligations under the trust receipt, is of no consequence and does not alter the case. In the case of United States vs. Tabotabo (11 Phil., 372), the court said: “Assuming that the surety company had in fact paid the sum misappropriated, this payment by the bonding company, made by virtue of its. obligation to guarantee the liability of their client, does not exempt the latter from the punishment provided for * * *.”
In the case of Canal-Commercial Trust & Savings Bank vs. N. O. Tex. & Mex. Ry. Co., Appt., International Trading & Rice Company, Warrantor, Appt. (49 A. L. R., 274), it was held that the bank could recover from the appellants, including the warrantor, the value of the sugar, the bill of lading for which had been delivered upon trust receipt. In that case the court said: “The improper use of pledged securities, by the pledgor holding them under a trust receipt, is a species of embezzlement.”
In the case of People vs. De Lay (80 Cal., 52), the defendant, an assignee for the benefit of creditors, was convicted of embezzlement of funds which came into his possession by virtue of collections of accounts and sales of property of the assignor. The court said: “The fact that Nunan and Lowney took a written indemnity from the defendant in no way affects the guilt or innocence of the defendant, who is charged with embezzling the property intrusted to him for certain purposes by Mrs. Furlong.”
“The fact that a defendant has given an indemnity bond is no defense to a prosecution for embezzlement;” (20 C. J., 456).
It has been asserted that the information upon which the present action is brought is defective in that it is alleged therein that the offense was committed to the prejudice of Wm. H. Anderson & Co. when it should have been alleged that the International Banking Corporation was the prejudiced party inasmuch as the loss suffered by Wm. H. Anderson & Co. was not contemporaneous with the commission of the crime. The information itself is the best answer to this proposition. It reads as follows in translation:
“The undersigned, sworn, accuses Yu Chai Ho of the crime of estafa, because on or about April 25, 1926, in the municipality of Cebu, Province of Cebu, the above-named defendant, under a trust receipt and a guaranty signed by Wm. H. Anderson & Co., in favor of the International Banking Corporation, withdrew and received from said International Banking Corporation, 2 cases of merchandise worth P539.65, consisting of bottles of perfumes and soap, Colgate brand, belonging to Colgate & Co., which merchandise was consigned to said bank in Cebu for the purpose of holding them in trust and selling them with the express obligation of turning over the proceeds of the sale to said International Banking Corporation, but the said accused, instead of complying with this obligation, willfully, unlawfully, and criminally, with intent of gain, and through fraud, converted said merchandise to his own use and benefit, to the damage of Wm. H. Anderson & Co., who for lack of payment by the accused, notwithstanding the repeated demands made to that effect, had to pay the sum of P539.65 to said International Banking Corporation. Contrary to law.
“Cebu, Cebu, P. I., August 24, 1926.
“(Sgd.) LUCIO SANCHEZ “Deputy Provincial Fiscal”
As will be seen, the facts of the case are fully set forth in the information; it clearly shows the consequences of the defendant’s acts to the International Banking Corporation as well as to Wm. H. Anderson & Co. and was entirely sufficient to enable the defendant to prepare his defense. Assuming for the sake of the argument, that the fiscal erred in alleging that Wm. H. Anderson & Co. suffered damages by reason of the defendant’s acts, the alleged error was, therefore, non-prejudicial and did not vitiate the proceedings. (Sec. 10, G. O., 58.)
We do not, however, think that the fiscal erred in alleging1 that the commission of the crime resulted to the prejudice of Wm. H. Anderson & Co. It is true that originally the International Banking Corporation was the prejudiced party, but Wm. H. Anderson & Co. compensated it for its loss and thus became subrogated to all its rights against the defendant (article 1839, Civil Code). Wm. H. Anderson & Co., therefore, stood exactly in the shoes of the International Banking Corporation in relation to the defendant’s acts, and the commission of the crime resulted to the prejudice of the firm previously to the filing of the information in the case. The loss suffered by the firm was the ultimate result of the defendant’s unlawful acts, and we see no valid reason why this fact should not be stated in the information; it stands to reason that, in the crime of estafa, the damage resulting therefrom need not necessarily occur simultaneously with the acts constituting the other essential elements of the crime.
In the sentence of the court below provision for the payment of indemnity is omitted on the ground that the defendant being insolvent, the prejudiced party has probably presented his claim in the insolvency proceedings. There being no direct evidence to that effect, we do not think that there is sufficient reason for such omission.
For the reasons stated the appealed sentence is modified by ordering the defendant to indemnify Wm. H. Anderson & Co. in the sum of P519, with subsidiary imprisonment in case of insolvency. In all other respects the judgment of the court below is affirmed, with the costs of this instance against the appellant. So ordered.
Avanceña, C. J., Johnson, Malcolm, Villamor, Romualdez, and Villa-Real, JJ., concur.