SPOUSES TIRSO VINTOLA AND LORETA DY VS INSULAR BANK OF ASIA AND

AMERICA, 150 SCRA 578

FACTS: Petitioner spouses Vintola owns and manages manufacturing of raw sea
shells into finished products, under their business name, Dax kin
International. They applied for domestic letter of credit by respondent
Insular Bank of Asia and America which was granted. Then, executed a
Trust Receipt Agreement with Insular bank stipulating that the Vintola’s
shall hold the goods in trust for IBAA. Having defaulted in its payment,
Vintola’s offered to return the goods to IBAA, but the latter refused.Due to
their continued refusal, IBAA charged them with estafa. The Court
acquitted the Vintolas’s.
ISSUE: Whether or not the goods entrusted by Vintola’s to IBAA became the real
owners thereof.
RULING: No. Insular bank of Asia and America did not become the holder or real
owner of the goods. The Vintola’s retained ownership of the goods. The
Court held that the trust receipt arrangement did not convert the IBAA into
an investor, it remained a lendor and creditor. Under the law, a trust
receipt is a document wherein the entrustee binds himself to hold the
designated goods, documents or instruments in trust for the entruster to
sell or otherwise dispose of the goods, to the amount owing to the
entruster.

MELVIN COLINARES AND LORDINO VELOSO VS COURT OF APPEALS AND THE

PEOPLE OF THE PHILIPPINES, 339 SCRA 609
FACTS: Petitioners Melvin Colinares and Lordino Veloso were contracted by the
Carmelite Sisters of Cagayan de Oro City to renovate the latter’s convent.
In order to ensue the construction of the convent, petitioner’s applied for a
commercial letter of credit with Philippine Banking Corporation. The latter
approved the credit to cover the full invoice value of the goods to be used
in the construction. Petitioners signed a pro-forma trust receipt as
security. Petitioners failed to pay on time, hence Philippine Banking
Corporation instituted a suit against petitioners charging them with
violation of the Trust Receipts Law or Presidential Decree 115. The trial
court rendered its decision against petitioners, contending that the
transaction instituted between them is a trust receipt transaction. On
appeal, Court of Appeals modified the lower’s court ruling by increasing
the penalty to six (6) years. Hence, the petition.
ISSUE: Whether or not the transaction made was a trust receipt transaction or
simple loan?
RULING: A simple loan. The Court held that the transaction entered into between
the petitioners and bank was not a trust receipt transaction but a simple
loan. Petitioners were acquitted.
ALLIED BANKING CORPORATION VS SECRETARY SEDFREY ORDOÑEZ AND ALFREDO
CHING, 192 SCRA 246
FACTS: Respondent Alfredo Ching duly authorized officer of Philippine Blooming Mills
(PBM) applied for the issuance of commercial letters of credit with petitioner
Allied banking Corporation. The latter issued an irrevocable letter of credit in
favor of Nikko Industry wherein it drew four (4) drafts which were accepted by
Blooming Mills and duly honored and paid by Allied Bank. In order to secure the
payment of the loan, Blooming Mills as entrustee, executed four (4) Trust Receipt
Agreements acknowledging Allied bank’s ownership of the goods and Blooming
Mills obligation to turn over the proceeds of the sale of the goods if sold or to
return the same within the stated period. Blooming Mills failed to pay its
obligation, thereby prompting petitioner bank to file a criminal complaint for
violation of Presidential Decree 115.
ISSUE: Whether or not the penal provision of Presidential decree 115 apply when the
goods covered by a Trust Receipt do not form part of the finished products which
are ultimately sold but are instead, utilized in the operation of the equipment of
entrustee-manufacturer?
RULING: Yes. In trust receipts, there is an obligation to repay the entruster. The entrustee
binds himself to sell or otherwise dispose of the entrusted goods with the
obligation to turn over to the entruster the proceeds if sold, or return the goods if
unsold or not otherwise disposed of according to the terms and conditions of the
trust receipt.Petition granted.