Republic of the
Supreme Court
JOSE C. GO,
Petitioner, -
versus - BANGKO SENTRAL NG PILIPINAS, Respondent. |
G.R. No. 178429
Present: quisumbing, J., Chairperson, *CARPIO, CARPIO MORALES, BRION, and ABAD, JJ. Promulgated: October 23,
2009 |
|
|||
x
------------------------------------------------------------------------------------------x
|
|||||
|
|
||||
|
D E C I S I O N
|
||||
|
|
||||
|
BRION, J.: |
|
|||
Through the present
petition for review on certiorari,[1]
petitioner Jose C. Go (Go) assails
the
THE FACTS
On
That on or about and during the period comprised between June 27, 1996
and September 15, 1997, inclusive, in the City of Manila, Philippines, the said accused, being then the Director
and the President and Chief Executive Officer of the Orient Commercial Banking
Corporation (Orient Bank), a commercial banking institution created,
organized and existing under Philippines laws, with its main branch located at
C.M. Recto Avenue, this City, and taking advantage of his position as such
officer/director of the said bank, did then and there wilfully, unlawfully and knowingly borrow, either directly or
indirectly, for himself or as the representative of his other related
companies, the deposits or funds of the said banking institution and/or
become a guarantor, indorser or obligor for loans from the said bank to others,
by then and there using said borrowed deposits/funds of the said bank in
facilitating and granting and/or caused the facilitating and granting of credit
lines/loans and, among others, to the New Zealand Accounts loans in the
total amount of TWO BILLION AND SEVEN HUNDRED FIFTY-FOUR MILLION NINE HUNDRED
FIVE THOUSAND AND EIGHT HUNDRED
FIFTY-SEVEN AND 0/100 PESOS, Philippine Currency, said accused knowing fully well that the same has been done by him
without the written approval of the majority of the Board of Directors of said
Orient Bank and which approval the said accused deliberately failed to
obtain and enter the same upon the records of said banking institution and to
transmit a copy of which to the supervising department of the said bank, as
required by the General Banking Act.
CONTRARY TO LAW.
[Emphasis supplied.]
On
After the arraignment, both the prosecution and accused Go took part in
the pre-trial conference where the marking of the voluminous evidence for the parties
was accomplished. After the completion
of the marking, the trial court ordered the parties to proceed to trial on the
merits.
Before the trial could commence,
however, Go filed on
No
director or officer of any banking institution shall either directly or
indirectly, for himself or as the representative or agent of another, borrow
any of the deposits of funds of such banks, nor shall he become a guarantor,
indorser, or surety for loans from such bank, to others, or in any manner be
an obligor for money borrowed from the bank or loaned by it, except with
the written approval of the majority of the directors of the bank, excluding
the director concerned. Any such
approval shall be entered upon the records of the corporation and a copy of such
entry shall be transmitted forthwith to the appropriate supervising
department. The office of any director
or officer of a bank who violates the provisions of this section shall
immediately become vacant and the director or officer shall be punished by
imprisonment of not less than one year nor more than ten years and by a fine of
not less than one thousand nor more than ten thousand pesos.
The
Monetary Board may regulate the amount of credit accommodations that may be
extended, directly or indirectly, by banking institutions to their directors,
officers, or stockholders. However, the
outstanding credit accommodations which a bank may extend to each of its
stockholders owning two percent (2%) or more of the subscribed capital stock,
its directors, or its officers, shall be limited to an amount equivalent to the
respective outstanding deposits and book value of the paid-in capital
contribution in the bank. Provided,
however, that loans and advances to officers in the form of fringe benefits
granted in accordance with rules and regulations as may be prescribed by
Monetary Board shall not be subject to the preceding limitation. (As amended by
PD 1795)
In
addition to the conditions established in the preceding paragraph, no director
or a building and loan association shall engage in any of the operations
mentioned in said paragraphs, except upon the pledge of shares of the
association having a total withdrawal value greater than the amount
borrowed. (As amended by PD 1795)
In support of his motion to quash, Go averred that based on the facts alleged
in the Information, he was being prosecuted for borrowing the deposits or funds
of the Orient Bank and/or acting as
a guarantor, indorser or obligor for the bank’s loans to other persons. The use of the word “and/or” meant that he
was charged for being either a borrower or a guarantor, or for being both a
borrower and guarantor. Go claimed that
the charge was not only vague, but also did not constitute an offense. He posited that Section 83 of RA 337 penalized
only directors and officers of banking institutions who acted either as borrower
or as guarantor, but not as both.
Go further pointed out that the Information failed to state that his
alleged act of borrowing and/or guarantying was not among the exceptions
provided for in the law. According to
Go, the second paragraph of Section 83 allowed banks to extend credit
accommodations to their directors, officers, and stockholders, provided it is
“limited to an amount equivalent to the respective outstanding deposits and
book value of the paid-in capital contribution in the bank.” Extending credit accommodations to bank
directors, officers, and stockholders is not per se prohibited, unless the amount exceeds the legal limit. Since the Information failed to state that the
amount he purportedly borrowed and/or guarantied was beyond the limit set by
law, Go insisted that the acts so charged did not constitute an offense.
Finding Go’s contentions persuasive, the RTC granted Go’s motion to
quash the Information on
The prosecution did not accept the RTC ruling and filed a petition for certiorari to question it before the
CA. The Information, the prosecution
claimed, was sufficient. The word “and/or”
did not materially affect the validity of the Information, as it merely stated a
mode of committing the crime penalized under Section 83 of RA 337. Moreover,
the prosecution asserted that the second paragraph of Section 83 (referring to
the credit accommodation limit) cannot be interpreted as an exception to what the
first paragraph provided. The second
paragraph only sets borrowing limits that, if violated, render the bank, not
the director-borrower, liable. A
violation of the second paragraph of Section 83 – under which Go is being
prosecuted – is therefore separate and distinct from a violation of the first
paragraph. Thus, the prosecution prayed that
the orders of the RTC quashing the Information be set aside and the criminal
case against Go be reinstated.
On
THE PETITION
In his petition, Go alleges that the appellate court legally erred in
overturning the trial court’s orders. He
insists that the Information failed to allege the acts or omissions complained
of with sufficient particularity to enable him to know the offense being
charged; to allow him to properly prepare his defense; and likewise to allow the
court to render proper judgment.
Repeating his arguments in his motion to quash, Go reads Section 83 of
RA 337 as penalizing a director or officer of a banking institution for either borrowing the deposits or funds of the
bank, or guaranteeing or indorsing
loans to others, but not for assuming both
capacities. He claimed that the
prosecution’s shotgun approach in alleging that he acted as borrower and/or
guarantor rendered the Information highly defective for failure to specify with
certainty the specific act or omission complained of. To petitioner Go, the prosecution’s approach
was a clear violation of his constitutional right to be informed of the nature
and cause of the accusation against him.
Additionally, Go reiterates his claim that credit accommodations by
banks to their directors and officers are legal and valid, provided that these
are limited to their outstanding deposits and book value of the paid-in capital
contribution in the bank. The failure
to state that he borrowed deposits and/or guaranteed loans beyond this limit rendered
the Information defective. He thus asks
the Court to reverse the CA decision to reinstate the criminal charge.
In its Comment,[11]
the prosecution raises the same defenses against Go’s contentions. It insists on the sufficiency of the
allegations in the Information and prays for the denial of Go’s petition.
THE COURT’S RULING
The
Court does not find the petition meritorious and accordingly denies it.
The Accused’s Right to be Informed
Under the Constitution, a person who stands charged of a criminal
offense has the right to be informed of the nature and cause of the accusation
against him.[12]
The Rules of Court, in implementing the
right, specifically require that the acts or omissions complained of as
constituting the offense, including the qualifying and aggravating circumstances,
must be stated in ordinary and concise language, not necessarily in the
language used in the statute, but in terms sufficient to enable a person of
common understanding to know what offense is being charged and the attendant qualifying
and aggravating circumstances present, so that the accused can properly defend
himself and the court can pronounce judgment.[13] To broaden the scope of the right, the Rules
authorize the quashal, upon motion of the accused, of an Information that fails
to allege the acts constituting the offense.[14] Jurisprudence has laid down the fundamental
test in appreciating a motion to quash an Information grounded on the
insufficiency of the facts alleged therein.
We stated in People v. Romualdez[15]
that:
The determinative test in appreciating a motion to quash xxx is
the sufficiency of the averments in the information, that is, whether the facts
alleged, if hypothetically admitted, would establish the essential elements of
the offense as defined by law without considering matters aliunde. As Section 6, Rule 110 of the Rules of
Criminal Procedure requires, the
information only needs to state the ultimate facts; the evidentiary and other
details can be provided during the trial.
To restate the rule, an
Information only needs to state the ultimate facts constituting the offense,
not the finer details of why and how the illegal acts alleged amounted to undue
injury or damage – matters that are appropriate for the trial. [Emphasis
supplied]
The facts and circumstances necessary
to be included in the Information are determined by reference to the definition
and elements of the specific crimes. The Information must allege clearly and
accurately the elements of the crime charged.[16]
Elements of
Violation of
Section 83 of
RA 337
Under
Section 83, RA 337, the following elements must be present to constitute a
violation of its first paragraph:
1.
the
offender is a director or officer of any banking institution;
2.
the
offender, either directly or indirectly, for himself or as representative or
agent of another, performs any of the following acts:
a.
he
borrows any of the deposits or funds of such bank; or
b.
he
becomes a guarantor, indorser, or surety for loans from such bank to others, or
c.
he becomes in any manner an obligor
for money borrowed from bank or loaned by it;
3.
the
offender has performed any of such acts without the written approval of the
majority of the directors of the bank, excluding the offender, as the director
concerned.
A simple
reading of the above elements easily rejects Go’s contention that the law
penalizes a bank director or officer only either for borrowing the bank’s
deposits or funds or for guarantying loans by the bank, but not for acting in
both capacities. The essence of the crime is becoming an obligor of the bank without
securing the necessary written approval of the majority of the bank’s
directors.
The second
element merely lists down the various modes of committing the offense. The third mode, by declaring that “[no director or officer of any banking
institution shall xxx] in any manner be
an obligor for money borrowed from the bank or loaned by it,” in fact serves
a catch-all phrase that covers any situation when a director or officer of the
bank becomes its obligor. The prohibition is directed against a bank
director or officer who becomes in any manner an obligor for money borrowed
from or loaned by the bank without the written approval of the majority of the
bank’s board of directors. To make a
distinction between the act of borrowing and guarantying is therefore unnecessary
because in either situation, the director or officer concerned becomes an
obligor of the bank against whom the obligation is juridically demandable.
The language
of the law is broad enough to encompass either act of borrowing or guaranteeing,
or both. While the first paragraph of Section
83 is penal in nature, and by principle should be strictly construed in favor
of the accused, the Court is unwilling to adopt a liberal construction that
would defeat the legislature’s intent in enacting the statute. The objective of the law should allow for a
reasonable flexibility in its construction.
Section 83 of RA 337, as well as other banking laws adopting the same
prohibition,[17]
was enacted to ensure that loans by banks and similar financial institutions to
their own directors, officers, and stockholders are above board.[18] Banks were not created for the benefit of their
directors and officers; they cannot use the assets of the bank for their own
benefit, except as may be permitted by law. Congress has thus deemed it essential to
impose restrictions on borrowings by bank directors and officers in order to
protect the public, especially the depositors.[19]
Hence, when the law prohibits directors and officers of banking institutions
from becoming in any manner an obligor of the bank (unless with the approval of
the board), the terms of the prohibition
shall be the standards to be applied to directors’ transactions such as those
involved in the present case.
Credit
accommodation limit is not an exception nor is it an element of the
offense
Contrary to
Go’s claims, the second paragraph of Section 83, RA 337 does not provide for an
exception to a violation of the first paragraph thereof, nor does it constitute
as an element of the offense charged. Section
83 of RA 337 actually imposes three restrictions: approval, reportorial, and ceiling requirements.
The approval
requirement (found in the first sentence of the first paragraph of the law)
refers to the written approval of the majority of the bank’s board of directors
required before bank directors and officers can in any manner be an obligor for
money borrowed from or loaned by the bank. Failure to secure the approval
renders the bank director or officer concerned liable for prosecution and, upon
conviction, subjects him to the penalty provided in the third sentence of first
paragraph of Section 83.
The reportorial
requirement, on the other hand, mandates that any such approval should be
entered upon the records of the corporation, and a copy of the entry be
transmitted to the appropriate supervising department. The reportorial requirement is addressed to
the bank itself, which, upon its failure to do so, subjects it to quo warranto proceedings under Section
87 of RA 337.[20]
The ceiling
requirement under the second paragraph of Section 83 regulates the amount
of credit accommodations that banks may extend to their directors or officers
by limiting these to an amount equivalent to the respective outstanding
deposits and book value of the paid-in capital contribution in the bank. Again, this is a requirement directed at the bank.
In this light, a prosecution for
violation of the first paragraph of Section 83, such as the one involved here,
does not require an allegation that the loan exceeded the legal limit. Even if the loan involved is below the legal
limit, a written approval by the majority of the bank’s directors is still
required; otherwise, the bank director or officer who becomes an obligor of the
bank is liable. Compliance with the ceiling
requirement does not dispense with the approval requirement.
Evidently,
the failure to observe the three requirements under Section 83 paves the way
for the prosecution of three different offenses, each with its own set of
elements. A successful indictment for
failing to comply with the approval requirement will not necessitate proof that
the other two were likewise not observed.
Rules of
Court allow amendment of insufficient Information
Assuming
that the facts charged in the Information do not constitute an offense, we find
it erroneous for the RTC to immediately order the dismissal of the Information,
without giving the prosecution a chance to amend it. Section 4 of Rule 117 states:
SEC. 4. Amendment of complaint or information.—If the motion
to quash is based on an alleged defect of the complaint or information which
can be cured by amendment, the court shall order that an amendment be made.
If it is based
on the ground that the facts charged do not constitute an offense, the prosecution
shall be given by the court an opportunity to correct the defect by amendment. The motion shall be granted if the prosecution
fails to make the amendment, or the complaint or information still suffers from
the same defect despite the amendment. [Emphasis supplied]
Although an Information may be defective because
the facts charged do not constitute an offense, the dismissal of the case will not
necessarily follow. The Rules
specifically require that the prosecution should be given a chance to correct the
defect; the court can order the dismissal only upon the prosecution’s failure
to do so. The RTC’s failure to provide
the prosecution this opportunity twice[21]
constitutes an arbitrary exercise of power that was correctly addressed by the
CA through the certiorari petition. This defect in the RTC’s action on the case,
while not central to the issue before us, strengthens our conclusion that this
criminal case should be resolved through full-blown trial on the merits.
WHEREFORE, we DENY the petitioner’s petition for
review on certiorari and AFFIRM the decision of the Court of
Appeals in CA-G.R. SP No. 79149, promulgated on
SO ORDERED.
ARTURO
D. BRION
Associate
Justice
WE CONCUR:
|
LEONARDO A. QUISUMBING Associate
Justice Chairperson |
|
|
ANTONIO T. CARPIO Associate Justice |
CONCHITA CARPIO MORALES Associate
Justice |
ROBERTO A. ABAD
Associate
Justice
ATTESTATION
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
REYNATO S. PUNO
Chief Justice
* Designated additional Member of the Second Division
in lieu of Associate Justice Mariano C. Del Castillo, per Special Order No. 757
dated
[1] Under Rule 45 of the
Rules of Court; rollo, pp. 9-26
[2] Penned by Associate
Justice Regalado Maambong (retired), with Associate Justice Marina Buzon and
Associate Justice Japar Dimaampao, concurring; id., pp. 28-44.
[3]
[4] Penned by Judge Oscar
Barrientos; id., pp. 65-69.
[5]
[6]
[7]
[8]
[9] Supra note 2.
[10] Supra note 3.
[11] Rollo, pp. 229-244.
[12] CONSTITUTION, Article III, Section 14 (1).
[13] RULES OF COURT, Rule 110, Section 9.
[14]
[15] G.R.
No. 166510,
[16] Lazarte
v. Sandiganbayan, G.R. No. 180122,
[17] Supra note 15; See Section 5 of RA 7353 (An Act
Providing For The Creation, Organization And Operation Of Rural Banks, And For
Other Purposes) and Presidential Decree No. 264, as amended by RA 6848 (An Act
Creating the Philippine Amanah Bank); See also Section 18 of RA 1300 (Revised
Charter of the Philippine National Bank) and Section 16 of RA 3518 (An Act
Creating The Philippine Veterans' Bank, And For Other Purposes).
[18] See Ramos
v. Court of Appeals, G.R. No. 117416,
[19] See People v. Knapp, 28 N.Y.Crim.R. 285,
206 N.Y. 373, 99 N.E. 841.
[20] Section 87. Unless otherwise herein provided,
the violation of any of the provisions of the Act shall be punished by a fine
of not more than two thousand pesos or by imprisonment for not more than two
years, or by both. If the violation is committed by a corporation, the same shall, upon
such violation being proved, be dissolved by quo warranto proceedings instituted by the Solicitor General:
Provided, that nothing in this section shall be construed as repealing the
other causes for the dissolution of corporations prescribed by existing law,
and the remedy provided for in this section shall be considered as additional
to the remedies already existing. [Emphasis supplied.]
[21] Both the