Lim v. Court of Appeals

G.R. No. 102784 (February 28, 1996)

Rosa Lim was convicted of estafa for misappropriating a PHP 169,000 diamond ring; conviction upheld.

Facts:

On January 26, 1989, an Information for Estafa was filed against Rosa Lim in the Regional Trial Court of Quezon City. The charge stemmed from an incident on October 8, 1987, when Lim received a 3.35-carat diamond ring valued at P169,000 and a bracelet worth P170,000 from Victoria Suarez. The agreement was for Lim to sell the jewelry on a commission basis, with the obligation to return the items or remit the proceeds if sold. However, Lim failed to return the diamond ring or the proceeds from its sale, leading to a complaint filed by Suarez after multiple demands for the return of the jewelry.

During the trial, the prosecution presented evidence, including a receipt (Exhibit "A") that documented the transaction as a contract of agency to sell on commission. Lim returned the bracelet to Suarez on December 15, 1987, but did not return the diamond ring. Lim's defense claimed that the transaction was a sale on credit rather than a commission sale, asserting that she had returned the jewelry to Suarez through a third party, Aurelia Nadera.

The trial court found Lim guilty of estafa, sentencing her to an indeterminate penalty and ordering her to return the ring or its value to Suarez. Lim appealed the decision, but the Court of Appeals affirmed the conviction, modifying the penalty. Lim subsequently filed a petition for review, raising several legal issues regarding the nature of the transaction and the sufficiency of evidence against her.

Legal Issues:

  1. What was the true nature of the transaction between Rosa Lim and Victoria Suarez—was it a contract of agency to sell on commission or a sale on credit?
  2. Did Rosa Lim return the diamond ring to Victoria Suarez through Aurelia Nadera, thereby relieving her of liability?

Arguments:

Petitioner (Rosa Lim):

  • Lim argued that the transaction was a sale on credit, not a commission sale, as evidenced by her signature placement on the receipt and her communication with Suarez.
  • She contended that she had returned the jewelry to Nadera, who was authorized to return it to Suarez, thus negating any liability for estafa.

Respondents (People of the Philippines and Victoria Suarez):

  • The prosecution maintained that the receipt clearly established a contract of agency to sell on commission, and Lim's failure to return the diamond ring constituted misappropriation.
  • They argued that Lim's claim of returning the ring through Nadera was unsubstantiated and contradicted by Suarez's testimony, which denied any authorization for such a return.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the decision of the Court of Appeals, holding that all elements of estafa under Article 315, paragraph 1(b) of the Revised Penal Code were present. The Court reasoned that:

  1. The receipt (Exhibit "A") clearly indicated that Lim received the jewelry in trust for sale on commission, binding her to the terms of the agreement.
  2. Lim's misappropriation of the diamond ring constituted a breach of trust, as she failed to return the item or remit the proceeds from its sale.
  3. The Court found the testimonies of Suarez credible, particularly regarding the lack of authorization for Lim to return the jewelry through Nadera. The trial court's assessment of witness credibility was upheld, as it was in a better position to evaluate the evidence presented.

The Court emphasized that the form of the contract did not affect its validity, as a contract of agency to sell on commission does not require a specific form for enforceability. The decision reinforced the principle that contracts are binding once the essential requisites for validity are met.

Significant Legal Principles Established:

  • The case reaffirmed that a contract of agency to sell on commission is valid regardless of the form, provided the essential requisites are present.
  • It underscored the importance of witness credibility in determining the outcome of cases involving conflicting testimonies.
  • The ruling clarified the elements of estafa under Article 315, particularly regarding the misappropriation of property received in trust.