Ching v. Rizal Banking Corp.
REITERATIONFacts
The Antecedents: Petitioner Alfredo Ching, as Senior Vice-President of Philippine Blooming Mills, Inc. (PBMI), applied for and received commercial letters of credit from Rizal Commercial Banking Corporation (RCBC) to finance PBMI's importation of assorted goods. Petitioner signed thirteen (13) trust receipts as surety, acknowledging receipt of goods valued at P6,940,280.66. Under these receipts, he agreed to hold the goods in trust for RCBC, with the authority to sell them and remit the proceeds, or to return the unsold goods upon maturity. Petitioner failed to return the goods or their value, leading RCBC to file a criminal complaint for estafa against him. Procedural History: Initially, the City Prosecutor found probable cause for estafa under Article 315, paragraph 1(b) of the Revised Penal Code, in relation to Presidential Decree (P.D.) No. 115, and filed thirteen (13) Informations. Petitioner appealed to the Minister of Justice, who initially reversed the finding of probable cause and ordered withdrawal of the Informations. However, upon RCBC's motion for reconsideration, the Minister of Justice reversed again, finding probable cause. The Regional Trial Court (RTC) subsequently quashed the Informations. Following the Supreme Court's ruling in Allied Banking Corporation v. Ordoñez, RCBC re-filed the criminal complaint. The City Prosecutor again found no probable cause, deeming the liability civil. RCBC appealed to the Secretary of Justice, who reversed the City Prosecutor, finding probable cause and ordering the filing of thirteen (13) new Informations. The RTC consolidated these cases. Petitioner then filed a petition for certiorari, prohibition, and mandamus with the Court of Appeals (CA), which dismissed his petition on procedural grounds and for lack of merit. The Petition: Petitioner seeks review on certiorari of the CA's decision dismissing his petition. He argues that the CA erred in dismissing his petition on a defective certification of non-forum shopping and in ruling that the Secretary of Justice did not commit grave abuse of discretion. Petitioner contends that the transaction was not a trust receipt transaction, that he acted solely as a corporate officer and surety, and that the goods were for use in PBMI's operations, not for resale. He asserts that his liability, if any, is purely civil. The Solicitor General argues that the CA correctly ruled that petitioner is the responsible officer under P.D. No. 115, that the petition was the improper remedy, and that the certification of non-forum shopping was indeed defective.
Issue(s)
Whether the Court of Appeals erred in dismissing the petition on the ground that the certification of non-forum shopping incorporated therein was defective. Whether the Secretary of Justice committed grave abuse of discretion or acted without or in excess of jurisdiction when reversing the City Prosecutor and finding probable cause to prosecute petitioner for violation of P.D. No. 115 in relation to Article 315(1)(b) of the Revised Penal Code.
Ruling
The petition is DENIED for lack of merit. The Court upheld the Court of Appeals’ dismissal on procedural grounds (defective certification against forum shopping) and, on the merits, found no grave abuse of discretion in the Secretary of Justice’s reversal and finding of probable cause. Costs against the petitioner.
Ratio Decidendi
On Whether the CA erred in dismissing the petition due to a defective certification of non-forum shopping: The Court applied the requirements of the Revised Rules of Court (Section 3, Rule 46 and Section 1, second paragraph of Rule 65) and Melo v. Court of Appeals to determine that the certification incorporated in petitioner’s CA petition was incomplete and unintelligible because it failed to state that the petitioner "had not heretofore commenced any other action involving the same issues" and thus did not satisfy the mandatory contents. The Court acknowledged the doctrine of substantial compliance as articulated by former Justice Regalado but emphasized that substantial compliance is only available where special circumstances or compelling reasons make strict application unjust. The petitioner alleged no such extraneous circumstances and the text of his certification could not be read as substantial compliance; the CA therefore properly dismissed the petition without prejudice. Applying Melo v. Court of Appeals, the Court reiterated that compliance with the certification requirement is a mandatory precondition and failure to comply is a sufficient ground for dismissal unless the petition shows the special circumstances warranting relaxation. The dismissal on this ground was therefore affirmed because the procedural defect deprived the CA of essential information about other pending actions, undermining the policy against forum shopping. On Whether the Secretary of Justice gravely abused discretion in finding probable cause under P.D. No. 115 and Article 315(1)(b): The Court first summarized the statutory definition and scope of a trust receipt transaction under Section 4 of Presidential Decree No. 115 and the penalty clause of Section 13, and applied Allied Banking Corporation v. Ordoñez and Colinares v. Court of Appeals to confirm that P.D. No. 115 covers transactions where goods are used in manufacturing and is not limited to goods intended for resale. The Court explained that probable cause in a preliminary investigation is a summary determination requiring more than bare suspicion but less than evidence sufficient for conviction, quoting the standard that "probable cause implies probability of guilt and requires more than bare suspicion but less than evidence which would justify a conviction." Applying Mendoza-Arce v. Office of the Ombudsman (Visayas) and Rule 112, Section 4 of the 2000 Rules of Criminal Procedure, the Court found that the Secretary of Justice acted within authority when he reversed the City Prosecutor's resolution because the record contained evidence that petitioner, as corporate officer and signatory to the trust receipts, was the official responsible under Section 13 of P.D. No. 115. The Court noted established doctrine (Rizal Commercial Banking Corporation v. Court of Appeals and related authorities) that corporate officers who, by virtue of their position and acts, are responsible for the corporation’s commission of crimes may be criminally prosecuted even if the corporation itself cannot be imprisoned. Consequently, the Secretary’s finding of probable cause was not shown to be a grave abuse of discretion, and the Court upheld the decision to order the filing of Informations. The Court reasoned that signing the trust receipts and participating in negotiations placed petitioner within the statutory description of an entrustee or the person responsible for the offense under Section 13, regardless of physical possession of goods. Applying Allied Banking Corporation v. Ordoñez and Colinares v. Court of Appeals, the Court held that failure to turn over proceeds or return goods as required by the trust receipts constitutes the crime defined by P.D. No. 115 and Article 315(1)(b) even without proof of intent to defraud. The Court reiterated the policy basis of P.D. No. 115 as a public-interest regulation and concluded that liability of corporate officers is consistent with the statute's text and purpose. Therefore, the Secretary of Justice's action in finding probable cause was sustained as legally sound.
Main Doctrine
Corporate officers who execute trust receipts may be criminally liable under Presidential Decree No. 115 and Article 315(1)(b) of the Revised Penal Code even if they sign in their corporate capacity and even if the goods were used in manufacturing rather than for resale; probable cause in a preliminary investigation requires more than bare suspicion but less than evidence for conviction.