TL;DR

The Supreme Court affirmed the conviction of Jorge Salazar for estafa, clarifying that misappropriation occurs even with temporary disturbances of property rights. Salazar, as an employee entrusted with funds for purchasing materials, failed to properly account for them after withdrawal. The Court emphasized that the offended party in estafa need not be the owner of the misappropriated goods, and that demand for the return of funds can be made to the entity involved, not necessarily directly to the individual responsible. This decision highlights the importance of accountability in handling entrusted funds and clarifies the scope of liability in estafa cases.

From Trust to Transgression: When Intentions Fail to Justify Misappropriation

This case revolves around Jorge Salazar’s conviction for estafa under Article 315 paragraph 1(b) of the Revised Penal Code. The charge stemmed from allegations that Salazar misappropriated funds advanced by Skiva International, Inc. for the manufacture of ladies’ jeans. At the heart of the matter lies the question of whether Salazar’s actions constituted a breach of trust and a fraudulent conversion of funds, despite his claims of using a portion of the money for its intended purpose.

The facts reveal that Skiva, through its agent Olivier, contracted Uni-Group to supply ladies’ jeans. Uni-Group, where Salazar was Vice President and Treasurer, received an advance payment of US$41,300.00 for raw materials. This payment was wired to a joint account held by Salazar and his wife, along with Mr. and Mrs. Werner Lettmayr. Salazar subsequently withdrew the funds but allegedly failed to fully account for their use, leading to the estafa charge.

The elements of estafa under Article 315 paragraph 1 (b) of the Revised Penal Code are: (a) receipt of money, goods, or property in trust or under obligation to deliver or return; (b) misappropriation or conversion of the property; (c) prejudice to another; and (d) demand by the offended party. The Court meticulously examined each element in light of the evidence presented.

The Court found that while the initial transaction was a contract of sale between Skiva and Aurora/Uni-Group, Salazar’s role as an employee entrusted with the funds created a separate obligation. Upon receiving the funds, Salazar had a duty to account for the proceeds to Aurora/Uni-Group. The evidence showed that Salazar withdrew the funds but failed to provide sufficient proof of how they were used, except for the purchase of 3,000 meters of Litton fabrics. This failure to account for the remaining funds supported the finding of misappropriation.

A critical point of contention was whether the element of prejudice was satisfied, given that the trial court identified Skiva as the prejudiced party, while Salazar argued he had no obligation to account to Skiva. The Supreme Court cited First Producers Holdings Corporation v. Co, clarifying that the prejudiced party in estafa need not be the owner of the misappropriated goods. The law uses the word “another,” not “owner,” indicating that the loss should fall on someone other than the perpetrator.

Salazar also argued that no demand was made directly upon him. The Court dismissed this argument, stating that demand upon Aurora/Uni-Group was sufficient. Requiring a separate demand on Salazar would be superfluous, especially since Skiva/Olivier reasonably believed Aurora/Uni-Group was primarily responsible for delivering the jeans. The Court cited United States v. Ramirez and Tubbs v. People and Court of Appeals, which underscored that misappropriation itself, not the demand and failure to return, constitutes the crime of estafa.

Furthermore, the Court addressed Salazar’s claim that Skiva lacked the authority to institute the action because the estafa was allegedly committed against Aurora/Uni-Group. The Court clarified that for preliminary investigations, any competent person may file a complaint, even if they are not the “offended party” in the strictest sense. This upheld the validity of Skiva’s complaint initiating the criminal action.

The Court highlighted that even a temporary disturbance of property rights constitutes misappropriation. The fact that Salazar remitted the funds abroad constituted an act of conversion or misappropriation. The words “convert” and “misappropriate” as used in Article 315 paragraph 1 (b) of the Revised Penal Code, connote an act of using or disposing of another’s property as if it were one’s own, or of devoting it to a purpose or use different from that agreed upon.

FAQs

This case serves as a reminder of the importance of accountability and transparency in handling funds entrusted to individuals, especially in a business setting. It highlights the legal consequences of failing to properly account for funds, even when there is an intent to use a portion of the money for its intended purpose.

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Jorge Salazar v. People, G.R. No. 149472, October 15, 2002