You are on page 1of 2

LAND BANK OF THE PHILIPPINES vs PEREZ goods placed in trust, the invoice values, their maturity dates which

d in trust, the invoice values, their maturity dates which is in violation of Sec
5(a) of the Trust Receipts Law. The Asst. Prosecutor then dismissed the case stating that
LAND BANK OF THE PHILIPPINES, petitioner, the evidence presented by LBP did not state the date when the goods described in the
vs. Letters of Credit were actually released to the possession of the respondents which is a
LAMBERTO C. PEREZ, et al., respondent. requirement under Section 4 of PD 115. Thus an MR was filed but was denied. LBP
appealed to the Secretary of Justice who reversed the ruling and directed that Office of
G.R. No. 166884 the Prosecutor to file an information for estafa against the respondents. The Secretary of
13 June 2012 Justice explained that there was no question that the goods were received by ACDC and
that although the goods were not described in the Trust Receipts, these were listed in
Case Brief: the attached Letters of Credit. The DOJ Secretary also rejected the defense of the
Petition for review on certiorari under Rule 45 of the ROC assailing the decision of the CA respondents that ACDC failed to remit payments due to the failure of its clients to pay.
which dismissed the petition for estafa against the respondents who allegedly violated An MR was submitted but the DOJ Secretary denied it. Thus, a petition for review before
Article 315 (b) of the Revised Penal Code, in relation with Section 13 of PD 115 of the Trust the CA was filed.
Receipts Law.
Actions of the Court:
Facts: CA: The Petition was granted and given due course which reversed and set aside the
Petitioner Bank, a governmental financial institution and the official depository of the ruling of the Secretary of Justice. The CA explained that there was no trust receipt
Philippines filed an estafa case before the City Prosecutor’s Office in Makati against transaction but a mere loan. It also adopted the argument of respondent that since no
respondents who are officers of Asian Construction and Development Corporation payment was received for the construction projects had been received, its officers could
(ACDC), which is incorporated under Philippine law and engaged in the construction not have been guilty of misappropriating any payment.
business.
Issue/s:
LBP extended a credit accommodation to ACDC through an Omnibus Credi Line 1. WON the CA erred in reversing the resolutions of the Secretary of Justice who
Agreement which ACDC Letters of Credit/Trust Receipts Facility to buy construction ruled that the disputed transactions were trust receipts transactions.
materials. The respondents executed Trust Receipts in the amount of P52,344,096.32 in
connection with the construction materials to be used for construction projects that Ruling:
belong to the Philippine government (Metro Rail Transit and Clark Centennial Exposition 1. The court ruled affirmed the decision of CA that there was no trust receipts
Project). The trust receipts matured but ACDC failed to proceeds of the construction transaction. It explained that in a trust receipts transaction, there are two
materials subject of the trust receipts thus LBP issued a demand letter to ACDC to pay its obligations: First, which refers to the money under the obligation to deliver it to
debts including those covered in the Trust Facility in the amount of P66, 425,924.39. the owner of the merchandise sold, and Second, which refers to the
When ACDC failed to comply with the demand letter, the complaint-affidavit was filed. merchandise under the obligation to return it to owner. The court explained that
in the present case there could be no trust receipt transaction because the
The respondents alleged that there was no misappropriation for the estafa case to lie as parties were aware that ACDC could not possibly be obligated to reconvey to
they merely acted as a subcontractor for the government projects and that the general LBP the materials or the end product for which they were used and from the
contractors have not paid them thus there was no misappropriation for the case to moment the materials were used for government projects, they became public
prosper. They also alleged that the trust receipts did not contain the description of

Page 1 of 2
Rule 98: Trustees
and not LBP’s property. Thus, the action for estafa cannot progress as the
respondents can only be held liable for a loan.

(Note: During the pendency of the appeal, a motion to dismiss was filed by the
respondents which stated that LBP already assigned its rights title and interest
in the load subject of the case to Philippine Opportunities and Growth for
Income, Inc. and ACDC’s obligation was settled by Avent Holdings Corporation.)

Page 2 of 2
Rule 98: Trustees