Murao, Jose Pepito G.

III Topic: Right of Agent to Appoint Substitute

Serona v. CA G.R. No. 130423 (2002)

Ynares-Santiago, J.

FACTS:

 From July to September 1992, Principal Leonida Quilatan entrusted Agent Virgie Serona pieces
of jewelry under their oral agreement that the same shall be returned to Quilatan if not sold within
30 days of receipt.
 When agent Serona failed to pay on September 24, Principal Quilatan required her to execute an
Acknowledgement Receipt indicating their agreement and the 567.75K due Quilatan.
 The problem started when, unknown to Quilatan, agent Serona entrusted the jewelry to a Marichu
Labrador to sell on commission basis as well, and since Serona failed to collect from Labrador,
she defaulted to Quilatan.
 Principal Quilatan then filed a Complaint for Estafa with abuse of confidence against agent
Serona for misappropriating and converting the pieces of jewelry, with Serona only remitting 100k
and 43K-worth of jewelry.
 For her part, Serona admitted to receiving the pieces of jewelry but she pinned her default on
Labrador’s failure to pay with Labrador testifying that she received such jewelry and sold the
same to a person who absconded without paying. Labrador also testified that she directly
transacted with Quilatan before but due to her outstanding balance, she got the jewelry from
Serona.
 RTC of Las Pinas found agent Serona Guilty of Estafa for misappropriating 424.7K, with the CA
affirming the same modifying only the term of imprisonment.

ISSUE:

 Whether or not the CA erred in convicting agent Serona for misappropriating the jewelry to a sub-
agent for a sale on commission basis?

HELD

 Yes, the four elements of Estafa with Abuse of Confidence are:

(1) Receipt of the offender of money, goods, or other personal property in trust or on commission
with duty to return the same
(2) Misappropriation or conversion of the subject money, goods, or personal property
(3) Prejudice to the offended party
(4) Demand from offended party
 Petitioner Serona did not convert or misappropriate the jewelry by delivering to a sub-agent for
sale on a commission basis as such was not a breach of trust.
 Law on agency allows appointment by an agent of a substitute or sub-agent in the
absence of an express agreement to the contrary
 Since Labrador’s appointment as sub-agent was not expressly prohibited by principal Quilatan,
such appointment cannot be viewed as abuse of confidence or misappropriation.
 Misappropriation or conversion connot a devotion of property different from that agreed upon (not
just for personal advantage but any attempt to dispose without right), but in this case, the jewelry
were entrusted to Labrador for the same end of their sale.
 Employing sub-agents or parting with valuables for sale is consistent with the usual practice to
find a buyer.
 Without any showing that agent Serona personally benefitted or conspired with Labrador to
deprive Quilatan of the jewelry, there is no Estafa.
 CA Decision REVERSED and SET ASIDE.