Colinares Vs CA
Colinares Vs CA
Colinares Vs CA
September 5, 2000]
Facts:
1. In 1979 Melvin Colinares and Lordino Veloso, petitioners, were contracted for a
consideration of P40,000 by the Carmelite Sisters of Cagayan de Oro City to
renovate the latters convent at Camaman-an, Cagayan de Oro City.
3. The following day, 31 October 1979, Petitioners applied for a commercial letter
of credit with the Philippine Banking Corporation, Cagayan de Oro City branch
(hereafter PBC) in favor of CM Builders Centre.
a. PBC approved the letter of credit for P22,389.80 to cover the full invoice value of
the goods.
4. On 7 May 1980, PBC wrote to Petitioners demanding that the amount be paid
within seven days from notice.
5. Instead of complying with PBCs demand, Veloso confessed that they lost
P19,195.83 in the Carmelite Monastery Project and requested for a grace period of
until 15 June 1980 to settle the account.
6. PBC sent a new demand letterto Petitioners on 16 October 1980 and informed
them that their outstanding balance as of 17 November 1979 was P20,824.40
exclusive of attorneys fees of 25%.
7. On 2 December 1980, Petitioners proposed that the terms of payment of the loan
be modified as follows: P2,000 on or before 3 December 1980, and P1,000 per
month starting 31 January 1980 until the account is fully paid.
b. Concurrently with the separate demand for attorneys fees by PBCs legal counsel,
PBC continued to demand payment of the balance.
8. On 14 January 1983, Petitioners were charged with the violation of P.D. No. 115
(Trust Receipts Law) in relation to Article 315 of the Revised Penal Code in an
Information which was filed with the Regional Trial Court of Cagayan de Oro City.
9. During trial, petitioner Veloso insisted that the transaction was a clean loan as
per verbal guarantee of Cayo Garcia Tuiza, PBCs former manager.
a. He and petitioner Colinares signed the documents without reading the fine print,
only learning of the trust receipt implication much later.
b. When he brought this to the attention of PBC, Mr. Tuiza assured him that the
trust receipt was a mere formality.
10. TC: decision convicting Petitioners of estafa for violating P.D. No. 115 in relation
to Article 315 of the Revised Penal Code and sentencing each of them to suffer
imprisonment of two years and one day of prision correccional as minimum to six
years and one day of prision mayor as maximum, and to solidarily indemnify PBC
the amount of P20,824.44, with legal interest from 29 January 1980, 12 % penalty
charge per annum, 25% of the sums due as attorneys fees, and costs.
c. failure of Petitioners to turn over the amount they owed to PBC constituted
estafa.
b. In the alternative, they contend that at most they can only be made civilly liable
for payment of the loan.
12. CA: modified the judgment of the trial court by increasing the penalty to six
years and one day of prision mayor as minimum to fourteen years eight months and
one day of reclusion temporal as maximum.
a. It held that the documentary evidence of the prosecution prevails over Velosos
testimony, discredited Petitioners claim that the documents they signed were in
blank, and disbelieved that they were coerced into signing them.
13. Petitioners filed a Motion for New Trial/Reconsideration alleging that the
Disclosure Statement on Loan/Credit Transaction signed by them and Tuiza was
suppressed by PBC during the trial.
a. that document would have proved that the transaction was indeed a loan as it
bears a 14% interest as opposed to the trust receipt which does not at all bear any
interest.
b. Petitioners further maintained that when PBC allowed them to pay in installment,
the agreement was novated and a creditor-debtor relationship was created.
14. CA: denied the Motion for New Trial/Reconsideration because the alleged newly
discovered evidence was actually forgotten evidence already in existence during the
trial, and would not alter the result of the case.
Issue: Whether or not the transaction of Colinares falls within the ambit of the Law
on Trust Receipt
Held: