Go v. Bangko Sentral ng Pilipinas
NEW DOCTRINEFacts
The Antecedents: An Information was filed against petitioner Jose C. Go (Go), then Director and President/CEO of Orient Commercial Banking Corporation (Orient Bank), for violation of Section 83 of Republic Act No. 337 (RA 337), as amended by Presidential Decree No. 1795. The charge alleged that Go, taking advantage of his position, willfully, unlawfully, and knowingly borrowed, directly or indirectly, for himself or as representative of his related companies, the deposits or funds of Orient Bank, and/or became a guarantor, indorser, or obligor for loans from the bank to others, specifically mentioning the "New Zealand Accounts loans" in the amount of TWO BILLION AND SEVEN HUNDRED FIFTY-FOUR MILLION NINE HUNDRED FIVE THOUSAND AND EIGHT HUNDRED FIFTY-SEVEN PESOS (₱2,754,905,857.00), without the written approval of the majority of the Board of Directors of Orient Bank, and deliberately failed to obtain and enter such approval upon the records and transmit a copy to the supervising department. Procedural History: Go pleaded not guilty. After pre-trial and marking of evidence, Go filed a motion to quash the Information, amended on March 1, 2003. Go argued that the Information was defective because the facts charged did not constitute an offense under Section 83 of RA 337. He contended that the use of "and/or" made the charge vague, and that Section 83 penalized only borrowing OR guaranteeing, not both. He also argued that the Information failed to state that the borrowing/guaranteeing was not within the exceptions provided by the second paragraph of Section 83, which limits credit accommodations to directors/officers to their outstanding deposits and book value of paid-in capital. The Regional Trial Court (RTC), Branch 26, Manila, granted Go's motion to quash on May 20, 2003, and denied the prosecution's motion for reconsideration on June 30, 2003. The prosecution filed a petition for certiorari with the Court of Appeals (CA). The CA, in its decision dated October 26, 2006, annulled and set aside the RTC's orders, finding that the RTC misread the law. The CA ruled that "and/or" merely stated different modes of committing the offense and that the second paragraph of Section 83 was not an exception. The CA denied Go's motion for reconsideration on June 4, 2007. The Petition: Go filed the present petition for review on certiorari, alleging that the CA erred in overturning the RTC's orders. He reiterated his arguments that the Information lacked particularity, that Section 83 did not penalize acting as both borrower and guarantor, and that the failure to allege that the credit accommodation exceeded the legal limit rendered the Information defective. He asserted a violation of his constitutional right to be informed of the nature and cause of the accusation.
Issue(s)
Whether the Information sufficiently alleged the offense charged under Section 83 of RA 337. Whether Section 83 of RA 337 penalizes a director or officer for acting as both a borrower and a guarantor of loans from the bank. Whether the second paragraph of Section 83 of RA 337, concerning credit accommodation limits, constitutes an exception to the prohibition in the first paragraph or an element of the offense. Whether the RTC erred in quashing the Information without giving the prosecution an opportunity to amend it.
Ruling
The petition is DENIED. The decision of the Court of Appeals is AFFIRMED. The Regional Trial Court, Branch 26, Manila, is directed to PROCEED with the hearing of Criminal Case No. 99-178551.
Ratio Decidendi
On the sufficiency of the Information and the "and/or" issue: The Court reiterated the "ultimate facts" rule for Informations, stating that they need only allege facts sufficient to enable a person of common understanding to know the offense charged and prepare a defense. The determinative test is whether the facts alleged, if hypothetically admitted, establish the essential elements of the offense. The Court found that Section 83 of RA 337 defines the elements of the offense, which include being a director or officer, performing certain acts (borrowing deposits/funds, becoming a guarantor/indorser/surety, or in any manner being an obligor), and doing so without the majority board's written approval. The use of "and/or" in the Information did not render it vague; rather, it encompassed the various modes by which the offense could be committed. The Court clarified that the third mode, "in any manner be an obligor," is a catch-all phrase that covers both borrowing and guaranteeing, as both actions result in the director or officer becoming an obligor of the bank. Therefore, the Information sufficiently alleged the ultimate facts constituting the offense. On whether Section 83 penalizes acting as both borrower and guarantor: The Court held that Section 83 does not distinguish between acting as a borrower and acting as a guarantor; both are considered modes of becoming an obligor to the bank. The essence of the crime is becoming an obligor without the required board approval. The law's language is broad enough to encompass either act, or both. Distinguishing between borrowing and guaranteeing is unnecessary because, in either situation, the director or officer becomes an obligor whose obligation is juridically demandable. The Court emphasized that the legislative intent was to protect depositors and the public by ensuring that loans to directors and officers are above board, preventing them from using bank assets for their own benefit except as permitted by law. On the credit accommodation limit as an exception or element: The Court clarified that the second paragraph of Section 83, which sets the ceiling for credit accommodations, does not provide an exception to the prohibition in the first paragraph, nor is it an element of the offense of violating the first paragraph. Section 83 imposes three distinct requirements: approval, reportorial, and ceiling. The approval requirement is paramount; failure to secure it makes the director/officer liable. The ceiling requirement regulates the amount but does not dispense with the need for board approval. Even if a loan is below the legal limit, it is still prohibited without majority board approval. Therefore, an Information for violating the first paragraph (lack of approval) does not need to allege that the loan exceeded the legal limit. On the RTC's failure to allow amendment: The Court found that the RTC erred in quashing the Information without giving the prosecution an opportunity to amend it, as mandated by Section 4 of Rule 117 of the Rules of Court. This procedural defect, while not central to the substantive issues, further supported the CA's action in ordering the reinstatement of the case for a full-blown trial.
Main Doctrine
A motion to quash an Information based on the alleged failure to state the offense charged is tested by the sufficiency of the averments therein, admitting hypothetically the facts alleged, to establish the essential elements of the offense as defined by law, without considering matters aliunde. The Information need only state the ultimate facts, not the evidentiary details.