Misappropriation

When a person receives money in trust under an obligation involving the duty to make delivery of or to return the same and he fails to deliver it as agreed or to return it, upon demand, he is guilty of estafa or swindling under Article 315 (1) (b) of the Revised Penal Code. This case of Tino is an example.

Tino and his wife Tina sold an imported 1988 BMW 525i to Tita, wife of Bert for a price of P3 million. Upon payment of the P3 million, Tita received the car and the Registration Certificate (CR) in the name of Tina. Initially Tita could not register the car in her name because Tina’s name in the Deed of Sale was misspelled. Upon correction however, Tita could not still transfer the car in her name because of unpaid taxes.

It turned out that after the sale to Tita, an Executive Order was issued requiring importers of taxable motor vehicles models 1988 to 1992 to get clearances from the BIR before the CR can be renewed. Thus the BIR informed Tina that for the issuance of a new CR they have to pay P325,000 as compromise for the tax due on the imported BMW. Tina however failed to pay despite threats of legal action by the BIR since, by then, she had already sold the car to Tita.

When the spouses Tita and Bert became aware of the BIR letters, they offered to share the tax burden with the spouses Tino and Tina. Thus Bert drew a check for P150,000 payable in cash as his share for the tax due on the car. He then delivered the check to Tino’s representative. But despite Tino’s receipt of the check, the car could not be registered. Later Bert learned that Tino encashed the check but did not pay the tax.

So Bert and Tita filed a complaint for rescission of contract, recovery of the sum of P3 million plus damages against the spouses Tino and Tina. Then subsequently they also wrote Tino demanding the return of the P150,000. But Tino still refused to return the amount. Thus Bert also initiated a criminal action against Tino charging the latter for estafa for failure to return the money received in trust or the receipt of payment of the taxes for which it was intended. This time Tino offered to return the P150,000 through his lawyer. But Bert already refused.

Meanwhile, the Civil Case filed by Bert and Tita against Tino and Tina was dismissed by the RTC because it found that the importer of the vehicle was not Tino but another person who was the one liable for the additional taxes and duties on the car. The court said that rescission was not the appropriate remedy. This decision became final.

On the other hand, after due proceedings in the criminal case, the court found Tino guilty of estafa under Article 315 (b) of the RPC and sentenced him to imprisonment. Tino questioned this decision. He contended that the dismissal of the civil case against him and his wife was enough proof that he had no obligation to return the P150,000. Was Tino correct?

No. Tino has not denied the receipt of said amount for payment of the taxes and duties. The delivery by Bert of the check and its acceptance by Tino signified not merely the transfer of the money belonging to Bert. It also created a fiduciary relation between the parties wherein Tino is duty bound to remit the sum to the BIR or BOC or return it to Bert. Tino admittedly converted or diverted the check he received by encashing it and yet, did not pay the deficiency customs duties and taxes as agreed upon. There was thus conversion or misappropriation.

The words "convert" and misappropriate connote an act of using or disposing of another’s property as if it were one’s own or devoting it to a purpose or use different from that agreed upon. To misappropriate for one’s own use includes not only conversion to one’s personal advantage but also every attempt to dispose of the property of another without any right.

The ruling in the civil case declaring that Tino is not the person liable to pay the deficiency taxes since he is not the importer of the vehicle but another person, did not vindicate Tino. Said ruling did not justify his withholding the amount that was entrusted to him by Bert, as the latter’s share in the tax burden; it only identified the proper taxpayer of said tax deficiencies.

Indeed the misappropriation or conversion by Tino caused damage to Bert and Tita. Damage as an element of estafa may consist in (1) the offended party being deprived of his money or property; (2) disturbance in property right; or (3) temporary prejudice. Here, Tina could not register the car in her name yet since the taxes remained unpaid (Tan vs. People, G.R. 153460, January 29, 2007).

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