Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 199481               December 3, 2012
ILDEFONSO S. CRISOLOGO, Petitioner, 
vs.
PEOPLE OF THE PHILIPPINES and CHINA
BANKING CORPORATION, Respondents.
DECISION
PERLAS-BERNABE, J.:
This Petition for Review on Certiorari1 under Rule 45
of the Rules of Court assails the November 23, 2011
Decision2of the Court of Appeals (CA) in CA-G.R.
CV No. 80350, which affirmed the December 4,
2002 Decision3 of the Regional Trial Courtt (RTC);
Manila, Branch 21. The RTC Decision acquitted
petitioner Ildefonso S. Crisologo (petitioner) of the
charges for violation of Presidential Decree (P.D.)
No. 115 (Trust Receipts Law) in relation to Article
315 1(b) of the Revised Penal Code (RPC), but
adjudged him civilly liable under the subject letters of
credit.
The Factual Antecedents
Sometime in January and February 1989, petitioner,
as President of Novachemical Industries, Inc.
(Novachem), applied for commercial letters of credit
from private respondent China Banking Corporation
(Chinabank) to finance the purchase of 1,6004 kgs.
of amoxicillin trihydrate micronized from Hyundai
Chemical Company based in Seoul, South Korea
and glass containers from San Miguel Corporation
(SMC). Subsequently, Chinabank issued Letters of
Credit Nos. 89/03015 and DOM-330416 in the
respective amounts of US$114,400.007 (originally
US$135,850.00)8with a peso equivalent of
P2,139,119.809 and P1,712,289.90. After petitioner
received the goods, he executed for and in behalf of
Novachem the corresponding trust receipt
agreements dated May 24, 1989 and August 31,
1989 in favor of Chinabank.
On January 28, 2004, Chinabank, through its Staff
Assistant, Ms. Maria Rosario De Mesa (Ms. De
Mesa), filed before the City Prosecutor's Office of
Manila a Complaint-Affidavit10 charging petitioner for
violation of P.D. No. 115 in relation to Article 315
1(b) of the RPC for his purported failure to turn-over
the goods or the proceeds from the sale thereof,
despite repeated demands. It averred that the latter,
with intent to defraud, and with unfaithfulness and
abuse of confidence, misapplied, misappropriated
and converted the goods subject of the trust
agreements, to its damage and prejudice.
In his defense, petitioner claimed that as a regular
client of Chinabank, Novachem was granted a credit
line and letters of credit (L/Cs) secured by trust
receipt agreements. The subject L/Cs were included
in the special term-payment arrangement mutually
agreed upon by the parties, and payable in
installments. In the payment of its obligations,
Novachem would normally give instructions to
Chinabank as to what particular L/C or trust receipt
obligation its payments would be applied. However,
the latter deviated from the special arrangement and
misapplied payments intended for the subject L/Cs
and exacted unconscionably high interests and
penalty charges.
The City Prosecutor found probable cause to indict
petitioner as charged and filed the corresponding
informations before the RTC of Manila, docketed as
Criminal Case Nos. 94-139613 and 94-139614.
The RTC Ruling
After due proceedings, the RTC rendered a
Decision11 dated December 4, 2002 acquitting
petitioner of the criminal charges for failure of the
prosecution to prove his guilt beyond reasonable
doubt. It, however, adjudged him civilly liable to
Chinabank, without need for a separate civil action,
for the amounts of P1,843,567.90 and P879,166.81
under L/C Nos. 89/0301 and DOM-33041,
respectively, less the payment of P500,000.00 made
during the preliminary investigation, with legal
interest from the filing of the informations on October
27, 1994 until full payment, and for the costs.
The CA Ruling
On appeal of the civil aspect, the CA affirmed12 the
RTC Decision holding petitioner civilly liable. It noted
that petitioner signed the "Guarantee Clause" of the
trust receipt agreements in his personal capacity
and even waived the benefit of excussion against
Novachem. As such, he is personally and solidarily
liable with Novachem.
The Petition
In the instant petition, petitioner contends that the
CA erred in declaring him civilly liable under the
subject L/Cs which are corporate obligations of
Novachem, and that the adjudged amounts were
without factual basis because the obligations had
already been settled. He also questions the
unilaterally-imposed interest rates applied by
Chinabank and, accordingly, prays for the
application of the stipulated interest rate of 18% per
annum (p.a.) on the corporation’s obligations. He
further assails the authority of Ms. De Mesa to
prosecute the case against him sans authority from
Chinabank's Board of Directors.
The Court's Ruling
The petition is partly meritorious.
Section 13 of the Trust Receipts Law explicitly
provides that if the violation or offense is committed
by a corporation, as in this case, the penalty
provided for under the law shall be imposed upon
the directors, officers, employees or other officials or
person responsible for the offense, without prejudice
to the civil liabilities arising from the criminal offense.
In this case, petitioner was acquitted of the charge
for violation of the Trust Receipts Law in relation to
Article 315 1(b)13 of the RPC. As such, he is relieved
of the corporate criminal liability as well as the
corresponding civil liability arising therefrom.
However, as correctly found by the RTC and the CA,
he may still be held liable for the trust receipts and
L/C transactions he had entered into in behalf of
Novachem.
Settled is the rule that debts incurred by directors,
officers, and employees acting as corporate agents
are not their direct liability but of the corporation they
represent, except if they contractually
agree/stipulate or assume to be personally liable for
the corporation’s debts,14 as in this case.
The RTC and the CA adjudged petitioner personally
and solidarily liable with Novachem for the
obligations secured by the subject trust receipts
based on the finding that he signed the guarantee
clauses therein in his personal capacity and even
waived the benefit of excussion. However, a review
of the records shows that petitioner signed only the
guarantee clauses of the Trust Receipt dated May
24, 198915 and the corresponding Application and
Agreement for Commercial Letter of Credit No. L/C
No. 89/0301.16 With respect to the Trust
Receipt17 dated August 31, 1989 and Irrevocable
Letter of Credit18 No. L/C No. DOM-33041 issued to
SMC for the glass containers, the second pages of
these documents that would have reflected the
guarantee clauses were missing and did not form
part of the prosecution's formal offer of evidence. In
relation thereto, Chinabank stipulated19 before the
CA that the second page of the August 31, 1989
Trust Receipt attached to the complaint before the
court a quo would serve as the missing page. A
perusal of the said page, however, reveals that the
same does not bear the signature of the petitioner in
the guarantee clause. Hence, it was error for the CA
to hold petitioner likewise liable for the obligation
secured by the said trust receipt (L/C No. DOM-
33041). Neither was sufficient evidence presented to
prove that petitioner acted in bad faith or with gross
negligence as regards the transaction that would
have held him civilly liable for his actions in his
capacity as President of Novachem.1âwphi1
On the matter of interest, while petitioner assailed
the unilateral imposition of interest at rates above
the stipulated 18% p.a., he failed to submit a
summary of the pertinent dates when excessive
interests were imposed and the purported over-
payments that should be refunded. Having failed to
prove his affirmative defense, the Court finds no
reason to disturb the amount awarded to Chinabank.
Settled is the rule that in civil cases, the party who
asserts the affirmative of an issue has the onus to
prove his assertion in order to obtain a favorable
judgment. Thus, the burden rests on the debtor to
prove payment rather than on the creditor to prove
non-payment.20
Lastly, the Court affirms Ms. De Mesa's capacity to
sue on behalf of Chinabank despite the lack of proof
of authority to represent the latter. The Court noted
that as Staff Assistant of Chinabank, Ms. De Mesa
was tasked, among others, to review applications for
L/Cs, verify the documents of title and possession of
goods covered by L/Cs, as well as pertinent
documents under trust receipts (TRs);
prepare/send/cause the preparation of statements of
accounts reflecting the outstanding balance under
the said L/Cs and/or TRs, and accept the
corresponding payments; refer unpaid obligations to
Chinabank's lawyers and follow-up results thereon.
As such, she was in a position to verify the
truthfulness and correctness of the allegations in the
Complaint-Affidavit. Besides, petitioner voluntarily
submitted21 to the jurisdiction of the court a quo and
did not question Ms. De Mesa's authority to
represent Chinabank in the instant case until an
adverse decision was rendered against him.
WHEREFORE, the assailed November 23, 2011
Decision of the Court of Appeals in CA-G.R. CV No.
80350 is AFFIRMED with the modification absolving
petitioner lldefonso S. Crisologo from any civil
liability to private respondent China Banking
Corporation with respect to the Trust Receipt dated
August 31, 1989 and L/C No. DOM-33041. The rest
of the Decision stands.
SO ORDERED.
ESTELA M.PERLAS-BERNABE
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO*
Associate Justice
Chairperson
MARIANO C. DEL
ARTURO D. BRION
CASTILLO
Associate Justice
Associate Justice
JOSE PORTUGAL PEREZ
Associate Justice
CERTIFICATION
I certify that the conclusions in the above Decision
had been reached in consultation before the case
was assigned to the writer of the opinion of the
Court's Division.
ANTONIO T. CARPIO*
Acting Chief Justice