[G.R. No. 114286. April 19, 2001]
THE CONSOL CONSOLIDA IDAT TED BAN BAN AN AND D TR! TR!ST ST COR COR"OR "ORAT ATION ION #SO #SOLIDB LIDBAN AN$, $, petitioner, vs. THE CO!RT O% A""EALS, CONTINENTAL CE&ENT COR"ORATION, GREGOR' T. LI& ()* S"O!SE, respondents. DECISION 'NARES+SANTIAGO, J 'NARES+SANTIAGO, J . .
The instant petition for review seeks to partially set aside the July 26, 1993 Decision [1] of respondent ourt of !ppeals in !"#$%$ & 'o$ 299(), insofar as it orders petitioner to rei*+urse respondent ontinental e*ent orporation the a*ount of -9),22.$9) with interest thereon at the le/al rate fro* July 26, 19.. until fully paid$ The petition also seeks to set aside the 0arch ., 199- %esolution[2] of respondent ourt of !ppeals denyin/ its 0otion for %econsideration$ The facts are as follows n July 13, 19.2, respondents ontinental e*ent orporation hereinafter, respondent orporation4 and #re/ory T$ 5i* hereinafter, hereinafter, respondent 5i*4 o+tained fro* petitioner onsolidated ank and Trust orporation 5etter of redit 'o$ D0"23277 in the a*ount of 1,)6.,1()$)) n the sa*e date, respondent orporation paid a *ar/inal deposit of 32),--($)) to petitioner$ The letter of credit was used to purchase around five hundred thousand thousand liters liters of +unker fuel oil fro* etrophil etrophil orporation, orporation, which the latter latter delivered delivered directly to respondent respondent orp orpor orat atio ion n in its its ula ulaca can n plan plant$ t$ 8n relat relatio ion n to the the sa*e sa*e trans transact actio ion, n, a trus trustt recei receipt pt for for the the a*ou a*ount nt of 1,))1,(2)$93 was eecuted +y respondent orporation, with respondent 5i* as si/natory$ lai*in/ that respondents failed to turn over the /oods covered +y the trust receipt or the proceeds thereof, petitioner filed a co*plaint for su* of o f *oney with application for preli*inary p reli*inary attach*ent[3] +efore the %e/ional Trial ourt of 0anila$ 8n answer to the co*plaint, respondents averred that the transaction +etween the* was a si*ple loan and not a trust receipt transaction, and that the a*ount clai*ed +y petitioner did not take into account pay*ents already *ade +y the*$ %espondent 5i* also denied any personal lia+ility in the su+:ect transaction transactions$ s$ 8n a ;upple*ental ;upple*ental !nswer, !nswer, respondents respondents prayed for rei*+urse* rei*+urse*ent ent of alle/ed alle/ed overpay*ent overpay*ent to petitioner of the a*ount of -9),22.$9)$ !t the pre"trial conference, the parties a/reed on the followin/ issues 14
n ;epte*+er 17, 199), the trial court rendered its Decision, [(] dis*issin/ the o*plaint and orderin/ petitioner to pay respondents the followin/ a*ounts under their counterclai* -9),22.$9) representin/ overpay*ent of respondent orporation, with interest thereon at the le/al rate fro* July 26, 19.. until fully paid= 1),)))$)) as attorneys fees= and costs$ oth parties appealed to the ourt of !ppeals, which partially *odified the Decision +y deletin/ the award of attorneys fees in favor of respondents and, instead, orderin/ respondent orporation to pay petitioner 37,-69$22 as and for attorneys fees and liti/ation epenses$ >ence, the instant petition raisin/ the followin/ issues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
The petition *ust +e denied$ n the first issue respectin/ the fact of overpay*ent found +y +oth the lower court and respondent ourt of !ppeals, we stress the ti*e"honored rule that findin/s of fact +y the ourt of !ppeals especially if they affir* factual findin/s of the trial court will not +e distur+ed +y this ourt, unless these findin/s are not supported +y evidence$[7] etitioner decries the lack of co*putation +y the lower court as +asis for its rulin/ that there was an overpay*ent *ade$
ordered rei*+ursed +y the lower court$ >owever, since respondents did not file an appeal in this case, the a*ount ordered rei*+ursed +y the lower court should stand$ 0oreover, petitioners contention that the *ar/inal deposit *ade +y respondent orporation should not +e deducted outri/ht fro* the a*ount of the letter of credit is untena+le$ etitioner ar/ues that the *ar/inal deposit should +e considered only after co*putin/ the principal plus accrued interests and other char/es$ >owever, to sustain petitioner on this score would +e to countenance a clear case of un:ust enrich*ent, for while a *ar/inal deposit earns no interest in favor of the de+tor"depositor, the +ank is not only a+le to use the sa*e for its own purposes, interest"free, +ut is also a+le to earn interest on the *one y loaned to respondent orporation$ 8ndeed, it would +e onerous to co*pute interest and other char/es on the face value of the letter of credit which the petitioner issued, without first creditin/ or settin/ off the *ar/inal deposit which the respondent orporation paid to it$ o*pensation is proper and should take effect +y operation of law +ecause the reuisites in !rticle 1279 of the ivil ode are present and should etin/uish +oth de+ts to the concurrent a*ount$[.] >ence, the interests and other char/es on the su+:ect letter of credit should +e co*puted only on the +alance of 6.1,)7($93, which was the portion actually loaned +y the +ank to respondent orporation$ 'either do we find error when the lower court and the ourt of !ppeals set aside as invalid the floatin/ rate of interest ehorted +y petitioner to +e applica+le$ The pertinent provision in the trust receipt a/ree*ent of the parties fiin/ the interest rate states 8, :ointly and severally a/ree to any increase or decrease in the interest rate which *ay occur after July 1, 19.1, when the entral ank floated the interest rate, and to pay additionally the penalty of 1E per *onth until the a*ountFs or install*entFs due and unpaid under the trust receipt on the reverse side he reof isFare fully paid$[9]
The recent case of Colinares v. Court of Appeals[12] appears to +e foursuare with the facts o+tainin/ in the case at +ar$ There, we found that inas*uch as the de+tor received the /oods su+:ect of the trust receipt +efore the trust receipt itself was entered into, the transaction in uestion was a si*ple loan and not a trust receipt a/ree*ent$ rior to the date of eecution of the trust receipt, ownership over the /oods was already transferred to the de+tor$ This situation is inconsistent with what nor*ally o+tains in a pure trust receipt transaction, wherein the /oods +elon/ in ownership to the +ank and are only released to the i*porter in trust after the loan is /ranted$ 8n the case at +ar, as in Colinares, the delivery to respondent orporation of the /oods su+:ect of the trust receipt occurred lon/ +efore the trust receipt itself was eecuted$ 0ore specifically, delivery of the +unker fuel oil to respondent orporations ulacan plant co**enced on July 7, 19.2 and was co*pleted +y July 19, 19.2$ [13] Burther, the oil was used up +y respondent orporation in its nor*al operations +y !u/ust, 19.2$[1-] n the other hand, the su+:ect trust receipt was only eecuted nearly two *onths after full delivery of the oil was *ade to respondent orporation, or on ;epte*+er 2, 19.2$ The dan/er in characteriGin/ a si*ple loan as a trust receipt transaction was eplained in Colinares, to wit The Trust %eceipts 5aw does not seek to enforce pay*ent of the loan, rather it punishes the dishonesty and a+use of confidence in the handlin/ of *oney or /oods to the pre:udice of another re/ardless of whether the latter is the owner$ >ere, it is crystal clear that on the part of etitioners there was neither dishonesty nor a+ use of confidence in the handlin/ of *oney to the pre:udice of $ etitioners continually endeavored to *eet their o+li/ations, as shown +y several receipts issued +y acknowled/in/ pay*ent of the loan$ The 8nfor*ation char/es etitioners with intent to defraud and *isappropriatin/ the *oney for their personal use$ The mala prohibita nature of the alle/ed offense notwithstandin/, intent as a state of *ind was not proved to +e present in etitioners situation$ etitioners e*ployed no artifice in dealin/ with and never did they evade pay*ent of their o+li/ation nor atte*pt to a+scond$ 8nstead, etitioners sou/ht favora+le ter*s precisely to *eet their o+li/ation$ !lso noteworthy is the fact that etitioners are not i*porters acuirin/ the /oods for re"sale, contrary to the epress provision e*+odied in the trust receipt$ The y are contractors who o+tained the fun/i+le /oods for their construction pro:ect$ !t no ti*e did title over the construction *aterials pass to the +ank, +ut directly to th e etitioners fro* 0 uilders entre$ This i*presses upon the trust receipt in uestion va/uen ess and a*+i/uity, which should not +e the +asis for cri*inal prosecution in the event of violation of its provisions$ The practice of +anks of *akin/ +orrowers si/n trust receipts to facilitate collection of loans and place the* under the threats of cri*inal prosecution should they + e una+le to pay it *ay +e un:ust and ineuita+le, if not reprehensi+le$ ;uch a/ree*ents are contracts of adhesion which +orrowers have no option +ut to si/n lest their loan +e disapproved$ The resort to this sche*e leaves poor and hapless +orrowers at the *ercy of +anks, and is prone to *isinterpretation, as had happened in this case$ ?ventually, showed its true colors and ad*itted that it was only after collection of the *oney, as *anifested +y its !ffidavit of Desistance$ ;i*ilarly, respondent orporation cannot +e said to have +een dishonest in its dealin/s with petitioner$ 'either has it +een shown that it has evaded pay*ent of its o+li/ations$ 8ndeed, it continually endeavored to *eet the sa*e, as shown +y the various receipts issued +y petitioner acknowled/in/ pay*ent on the loan$ ertainly, the pay*ent of the su* of 1,.32,1(.$3. on a loan with a principal a*ount of only 6.1,)7($93 ne/ates any +ad/e of dishonesty, a+use of confidence or *ishandlin/ of funds on the part of
respondent orporation, which are the /rava*en of a trust receipt violation$ Burther*ore, respondent orporation is not an i*porter which acuired the +unker fuel oil for re"sale= it needed the oil for its own operations$ 0ore i*portantly, at no ti*e did title over the oil pass to petitioner, +ut directly to respondent orporation to which the oil was directly delivered lon/ +efore the trust receipt was eecuted$ The fact that ownership of the oil +elon/ed to respondent orporation, throu/h its resident, #re/ory 5i*, was acknowled/ed +y petitioners own account officer on the witness stand, to wit H " !fter the +ank opened a letter of credit in favor of etrophil orp$ for the account of the defendants there+y payin/ the value of the +unker fuel oil what transpired net after thatI ! " @pon purchase of the +unker fuel oil and upon the reuests of the defendant possession of the +unker fuel oil were transferred to the*$ H " Aou *entioned the* to who* are you referrin/ toI ! " To the ontinental e*ent orp$ upon the eecution of the trust receipt acknowled/in/ the ownership of the +unker fuel oil this should +e accepta+le for whatever disposition he *ay *ake$ H " Aou *entioned a+out acknowled/in/ ownership of the +unker fuel oil to who* +y who*I ! " y the ontinental e*ent orp$ H " ;o +y your state*ent who really owns the +unker fuel oilI !TTA$ %!>' +:ection already answered$ @%T #ive ti*e to the other counsel to o+:ect$ !TTA$ %!>' >e has testified that ownership was acknowled/ed in favor of ontinental e*ent orp$ so that uestion has already +een answered$ !TTA$ !!#! That is why 8 *ade a follow up uestion askin/ ownership of the +unker fuel oil$ @%T roceed$ !TTA$ !!#! H "
y all indications, then, it is apparent that there was really no trust receipt transaction that took place$ ?vidently, respondent orporation was reuired to si/n the trust receipt si*ply to facilitate collection +y petitioner of the loan it had etended to the for*er$ Binally, we are not convinced that respondent #re/ory T$ 5i* and his spouse should +e personally lia+le under the su+:ect trust receipt$ etitioners ar/u*ent that respondent orporation and respondent 5i* and his spouse are one and the sa*e cannot +e sustained$ The transactions sued upon were clearly entered into +y respondent 5i* in his capacity as ?ecutive &ice resident of respondent orporation$
Davide, Jr., C.J., (Chairman), Puno, and Kapunan, JJ., concur$ Pardo J., no part$