People v. Apolinario
REITERATIONFacts
The Antecedents: Jose Apolinario, Jr. (Apolinario), along with other directors and officers of Unitrust Development Bank (Unitrust), was charged with violating Section 36 of Republic Act No. 8791 (General Banking Law) in relation to Section 36 of Republic Act No. 7653 (New Central Bank Act). The charges stemmed from two separate loan transactions: a P1,000,000.00 personal loan granted to Director Winefredo T. Capilitan and a P13,000,000.00 loan released to G. Cosmos Philippines, Inc., represented by Capilitan. Both loans were allegedly granted without the required written approval of the majority of the board of directors and were not reported to the Bangko Sentral ng Pilipinas (BSP). Apolinario pleaded not guilty. Procedural History: The Regional Trial Court (RTC) convicted Apolinario for violating the DOSRI law, imposing fines. The RTC found that Apolinario violated Section 31 of the Corporation Code by allowing the loans' release without requisite board approval and documentation, and that he conspired with Capilitan. The Court of Appeals (CA) affirmed the RTC's decision, finding that all elements of the crime were established, including Apolinario's directorship, conspiracy, lack of valid board approval, and failure to report to the BSP. Apolinario's motion for reconsideration was denied by both the RTC and the CA. The Petition: Apolinario filed a Petition for Review on Certiorari before the Supreme Court, assailing the CA's decision. He argued that the prosecution witnesses' testimonies exculpated him, that there was no proof he was a director or officer, that he did not incur contractual liability, and that the prosecution failed to prove conspiracy. He also contended that the lower courts erred in their factual findings and legal interpretations.
Issue(s)
Whether the Supreme Court may review the factual findings of the Regional Trial Court and the Court of Appeals in a Petition for Review on Certiorari. Whether the prosecution proved beyond reasonable doubt the guilt of petitioner Jose Apolinario, Jr. for violation of Section 36 of Republic Act No. 8791, in relation to Section 36 of Republic Act No. 7653. Whether petitioner Jose Apolinario, Jr. was a director or officer of Unitrust Development Bank. Whether petitioner Jose Apolinario, Jr. incurred any contractual liability or borrowed from Unitrust Development Bank, directly or indirectly, for himself or as a representative of others. Whether the loans were approved and released without the valid written approval by the majority of Unitrust's Board of Directors. Whether the required approval of the Unitrust's Board was entered into the records of Unitrust and transmitted to the Bangko Sentral ng Pilipinas. Whether conspiracy was sufficiently established between petitioner Jose Apolinario, Jr. and Winefredo T. Capilitan.
Ruling
The Petition for Review on Certiorari is denied. The assailed Court of Appeals' Decision and Resolution are affirmed. Petitioner Jose Apolinario, Jr. y Llauder is convicted of violating Section 36 of Republic Act No. 8791, in relation to Section 36 of Republic Act No. 7653. He is ordered to pay a fine of P100,000.00 in Criminal Case No. 03-3631 and P200,000.00 in Criminal Case No. 03-3632, with subsidiary imprisonment in case of insolvency.
Ratio Decidendi
On the issue of reviewing factual findings: The Supreme Court reiterated the general rule that in a Petition for Review on Certiorari under Rule 45, its jurisdiction is limited to reviewing errors of law, not facts. Factual findings of the lower courts, especially when affirmed by the appellate court, are generally considered binding and conclusive. While exceptions exist, the petitioner failed to sufficiently substantiate his claim that the case fell under any of them, such as grave abuse of discretion or a misapprehension of facts. The Court emphasized that the assessment of witness credibility is primarily the trial court's prerogative. On the guilt of petitioner Jose Apolinario, Jr. for violation of Section 36 of R.A. No. 8791 in relation to R.A. No. 7653: The Court found that the prosecution proved beyond reasonable doubt the guilt of Apolinario. The elements of the offense were sufficiently established: (1) Apolinario was a director and officer of Unitrust; (2) he conspired with Capilitan in obtaining the two loans; (3) the loans were approved and released without valid written approval by the majority of the board; and (4) the required approval was not entered into the records nor transmitted to the BSP. The Court found no merit in Apolinario's arguments regarding his directorship and participation. On whether petitioner Jose Apolinario, Jr. was a director or officer of Unitrust Development Bank: The Court held that this was a factual issue that could not be reviewed under Rule 45. The RTC found Apolinario to be a bona fide director based on evidence, including his own exhibits (Exhibits 11 and 15) which declared him as Director and Acting President, and his admission of being elected Director and Chairperson. His representation as Acting President before the PDIC President (Exhibit 13) further supported this finding. The Court noted that Apolinario did not deny signing the Minutes of the Board Meetings approving the loans. On whether petitioner Jose Apolinario, Jr. incurred any contractual liability or borrowed from Unitrust Development Bank: The Court found that conspiracy was established, making Apolinario liable for the acts of his co-conspirators. While Apolinario denied direct participation in the loan approval, claiming Vasquez processed them under duress, the Court noted that Vasquez acted under duress and that the final decision rested with the board. Apolinario's signing of the board minutes, even if prepared after the loans were released, demonstrated his principal and indispensable role in their approval and release. His knowledge of the law as a lawyer further implicated him. On whether the loans were approved and released without the valid written approval by the majority of Unitrust's Board of Directors: The Court affirmed the lower courts' findings that the loans lacked valid board approval. It highlighted that directors who had already resigned (Magpantay, Quilatan, and Vasquez) signed the minutes, rendering their signatures invalid for the purpose of approval. Furthermore, comparing Apolinario's own Exhibit 11 with the prosecution's Exhibit S revealed that Exhibit 11 lacked Oba's signature, indicating the P27,000,000.00 loan was released without prior board approval. The Court also noted that Apolinario signed the minutes and participated in preparing remedial documents after the loans were released. On whether the required approval of the Unitrust's Board was entered into the records and transmitted to the BSP: The Court found that the loans were not reported to the BSP. Apolinario's argument that the bank's closure made reporting impossible was rejected. The responsibility to record the approval and transmit it to the BSP rested with Unitrust. The presence of a BSP examiner for a different purpose did not absolve Unitrust of its reporting duty. Therefore, this element was also established. On whether conspiracy was sufficiently established: The Court found that conspiracy was sufficiently established. Apolinario did not dispute Capilitan obtaining the loans. His signing of the board minutes, even if antedated, showed his active participation and unity of purpose with Capilitan in the illegal act. As a lawyer, he was presumed to know the law, making his participation in preparing remedial documents after the loans were released indicative of a shared criminal design.
Main Doctrine
Banking institutions are imbued with public interest and are required to exercise the highest degree of diligence. Directors and officers violating restrictions on DOSRI loans, particularly by failing to secure the required majority board approval and proper reporting to the Bangko Sentral ng Pilipinas, can be held criminally liable. Conspiracy among officers to commit such violations is sufficient for conviction.