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ALFREDO CHING v. VS.SECRETARY OF JUSTICE

FACTS:

The petitioner, Alfredo Ching, was the Senior Vice-President of Philippine Blooming Mills, Inc. (PBMI), a company that applied with the Rizal Commercial Banking Corporation (respondent bank) for the issuance of commercial letters of credit. The bank approved the application and issued irrevocable letters of credit to the petitioner. The goods were purchased and delivered to PBMI, and the petitioner signed 13 trust receipts as surety. The trust receipts required the petitioner to hold the goods in trust for the bank and to turn over the proceeds if the goods were sold. However, when the trust receipts matured, the petitioner failed to return the goods or their value to the bank.

The bank filed a criminal complaint for estafa against the petitioner, but the Regional Trial Court (RTC) quashed the cases as the allegations did not amount to estafa. The bank re-filed the criminal complaint, and after another preliminary investigation, the City Prosecutor ruled that there was no probable cause for criminal liability as the petitioner's liability was only civil as a surety. The bank appealed to the Department of Justice (DOJ) and the Secretary of Justice reversed the ruling, finding that the petitioner, as the Senior Vice-President of PBMI, was responsible for the offense.

The petitioner filed a petition with the Court of Appeals (CA), challenging the Secretary of Justice's resolutions. The CA dismissed the petition for lack of merit and procedural grounds, ruling that the certification of non-forum shopping incorporated in the petition was defective. The petitioner argues that the rules of procedure should be used to promote substantial justice and that the deficiency in his certification should not result in the dismissal of his petition. The respondent argues that the certification is defective and that petitioner's failure to comply with the rules is fatal to his petition. The CA held that compliance with the certification against forum shopping is mandatory and failure to comply is a ground for dismissal of the petition. The CA also ruled that the petitioner failed to establish that the Secretary of Justice committed grave abuse of discretion.

ISSUES:

  1. Whether or not the petitioner has complied with the procedural requirement of filing a certificate of non-forum shopping

  2. Whether or not the Secretary of Justice committed grave abuse of discretion in finding probable cause against the petitioner for violation of estafa

  3. Whether the petitioner is the proper corporate officer to be proceeded against for the violation of P.D. No. 115.

  4. Whether the Secretary of Justice acted with grave abuse of discretion in issuing the resolutions.

  5. Whether the transaction between the petitioner and respondent bank falls under the trust receipt transactions covered by P.D. No. 115.

  6. Whether P.D. No. 115 applies to goods used by the entrustee in the operation of its machineries and equipment.

  7. Whether the petitioner, who signed the trust receipts as Senior Vice-President of PBMI but had no physical possession of the goods, can be prosecuted for violation of P.D. No. 115.

  8. Whether the petitioner can be held criminally liable for his delictual acts under the trust receipts, despite the separate corporate personality of PBMI.

RULING:

  1. The Court held that the petitioner failed to comply with the procedural requirement of filing a certificate of non-forum shopping as he did not attach such certificate to his petition before the Court of Appeals. The Court emphasized that substantial compliance with this requirement is necessary, and the mere explanation that petitioner had filed the necessary certificate in other tribunals cannot be regarded as substantial compliance. Therefore, the petition was dismissed on this ground.

  2. The Court ruled that the Secretary of Justice did not commit grave abuse of discretion in finding probable cause against the petitioner for violation of estafa. The Court cited Section 13 of Presidential Decree No. 115, which states that if the violation or offense is committed by a corporation, the penalty shall be imposed upon the directors, officers, employees, or other officials or persons therein responsible for the offense. The Court found that the petitioner, as the senior vice-president of Philippine Blooming Mills (PBM), executed trust receipts and thus, can be indicted as the corporate official responsible for the offense under PD 115.

  3. The petitioner is the proper corporate officer to be proceeded against for the violation of P.D. No. 115. Petitioner participated in the negotiations for the trust receipts and received the goods for the corporation.

  4. The Secretary of Justice did not commit grave abuse of discretion in issuing the resolutions. The Secretary acted in accordance with the law and the evidence presented.

  5. The transaction between petitioner and respondent bank falls under the trust receipt transactions covered by P.D. No. 115. The goods were imported by the bank and entrusted to the petitioner under trust receipts. The petitioner agreed to hold the goods in trust for the bank, with the liberty to sell the same for the bank's account and without authority to make any other disposition of the goods or the proceeds. The petitioner also agreed to return the goods if not sold within the specified period. P.D. No. 115 is applicable because it aims to penalize the failure to turn over the proceeds of the sale or the failure to return the goods covered by a trust receipt.

  6. P.D. No. 115 applies to goods used by the entrustee in the operation of its machineries and equipment. The Court ruled in Allied Banking Corporation v. Ordoñez that the law encompasses transactions involving goods procured as a component of a product ultimately sold. The non-payment of the amount covered by the trust receipts or the non-return of the goods covered by the receipts, if not sold or otherwise disposed of, violates the entrustee's obligation to pay the amount or return the goods to the entruster.

  7. The Court rules that the petitioner can be prosecuted for violation of P.D. No. 115. Although he signed the trust receipts as Senior Vice-President and had no physical possession of the goods, he cannot avoid prosecution for estafa under P.D. No. 115. The law specifically holds the officers, employees, or other officials or persons responsible for the offense, without prejudice to the civil liabilities of the corporation and its board of directors, officers, or other officials or employees responsible for the offense.

  8. The Court held that the petitioner can be held criminally liable for his delictual acts under the trust receipts, despite the separate corporate personality of PBMI. The fact that he signed the trust receipts in question means that he cannot hide behind the cloak of the separate corporate personality of PBMI. It was emphasized that a corporate officer cannot protect himself behind a corporation where he is the actual, present and efficient actor.

PRINCIPLES:

  • Compliance with the procedural requirement of filing a certificate of non-forum shopping is necessary, and mere explanation of filing in other tribunals is not considered substantial compliance.

  • If the violation or offense is committed by a corporation, the penalty shall be imposed upon the directors, officers, employees, or other officials or persons therein responsible for the offense.

  • The penalty for the violation of P.D. No. 115 can be imposed upon the directors, officers, employees, or other officials or persons responsible for the offense committed by a corporation, partnership, association, or other juridical entities.

  • The acts of a quasi-judicial officer may be challenged through a petition for certiorari if necessary to protect the constitutional rights of the accused, for the orderly administration of justice, when the acts are without or in excess of authority, when the charges are false and motivated by vengeance, or when there is no prima facie case against the accused.

  • Probable cause for the filing of an information in a preliminary investigation requires more than mere suspicion but less than clear and convincing evidence of guilt. It is an inquiry to determine whether a crime has been committed and whether there is a reasonable belief that the accused is guilty.

  • A trust receipt transaction involves the sale, exchange, delivery, or effectuation of a transaction involving goods, documents, or instruments. It requires the entrustee to hold the goods in trust for the entruster and dispose of them in accordance with the terms of the trust receipt.

  • The entrustee is obligated to turn over the proceeds of the sale to the entruster or return the goods if they were not sold, as specified in the trust receipt agreement.

  • Failure to turn over the proceeds or return the goods covered by the trust receipt is a crime under P.D. No. 115, without the need to prove intent to defraud. The law aims to punish dishonesty and abuse of confidence in handling money or goods to the prejudice of the entruster.

  • Violation of P.D. No. 115, which pertains to the failure to turn over the proceeds of the sale of goods covered by a trust receipt or to return the goods if they were not sold in accordance with the terms of the trust receipt, constitutes the crime of estafa.

  • The crime defined in P.D. No. 115 is malum prohibitum but is classified as estafa under paragraph 1(b), Article 315 of the Revised Penal Code, or estafa with abuse of confidence.

  • If the crime is committed by a corporation or other juridical entity, the directors, officers, employees, or other officers thereof responsible for the offense shall be charged and penalized, without prejudice to the civil liabilities of the corporation and its board of directors, officers, or other officials or employees responsible for the offense.

  • A corporation cannot be imprisoned, but it may be charged and prosecuted for a crime if the imposable penalty is fine.

  • Corporate officers or employees through whose act, default, or omission the corporation commits a crime are themselves individually guilty of the crime.

  • The principle applies to both those corporate agents who themselves commit the crime and those who, by virtue of their managerial positions or similar relationship to the corporation, could be deemed responsible for its commission if they had the power to prevent the act.

  • Benefit is not an operative fact in determining criminal liability of corporate officers or employees.

  • A corporate officer cannot protect himself behind a corporation where he is the actual, present and efficient actor.