This is a petition for review on certiorari
seeking to annul the Decision dated 12 November 1997 and the Resolution dated 9 February 1998 both of the Court of Appeals 1 in CA-G.R. SP No. 44120 which annulled and set aside the 2 December 1996 Resolution of the Department of Justice (DOJ) 2 affirming the dismissal by the City Prosecutor of the complaint for estafa filed by private respondent Maritime Training Center of the Philippines, Inc. (MTCP) against petitioner Hernani N. Fabia for lack of prior settlement of account. Instead, the appellate court directed the filing of an information for estafa against petitioner Hernani N. Fabia, which was thereafter lodged with the Regional Trial Court of Manila-Br. 22, and docketed as Crim. Case No. 98-162570.chanrob1es virtua1 1aw 1ibrary
Petitioner Hernani N. Fabia, until his resignation on 10 August 1994, was the President of private respondent MTCP, a domestic corporation engaged in providing maritime courses and seminars to prospective overseas contract workers and seamen. He was likewise a Director and stockholder thereof.
On 3 January 1996 MTCP through its new President Exequiel B. Tamayo filed an affidavit-complaint for estafa against Hernani N. Fabia with the Office of the City Prosecutor of Manila alleging that on various occasions from January to July 1994 Fabia drew cash advances from MTCP, covered by cash vouchers, amounting to P1,291,376.61 which he failed to liquidate despite repeated demands.
Petitioner Fabia in his 20 March 1996 Reply-Affidavit and Motion to Dismiss admitted having received the various amounts covered by the cash vouchers but reasoned that they were in the nature of simple loans that had already been liquidated and paid as shown by the receipts and vouchers which he had attached to his pleadings.chanrob1es virtua1 1aw 1ibrary
On 8 April 1996 the Office of the City Prosecutor of Manila acting through Assistant City Prosecutor Ramon O. Carisma dismissed the complaint for lack of jurisdiction for the reason that the controversy pertained to the relationship between a corporation and a former officer thereof, hence, it was the Securities and Exchange Commission (SEC) which had original and exclusive jurisdiction over the case. 3 MTCP moved to reconsider the resolution but the same was denied with the additional ground that "the charge involves accounting and liquidation of cash advances which receipts and vouchers had not been examined by an independent certified public accountant for a conclusive determination as to the actual amount stashed by the officer," 4 hence, the evidence was insufficient to show probable cause.
Thereafter, on 13 September 1996, MTCP filed a petition for review before the Department of Justice (DOJ) questioning the two (2) resolutions issued by the Office of the City Prosecutor. The petition was however dismissed by the DOJ on 2 December 1996 as it found no reversible error committed by the Office of the City Prosecutor. 5 The motion for reconsideration subsequently filed by the MTCP was likewise denied by the DOJ on 1 April 1997 6 on the ground that the prosecuting officers had the legal duty not to prosecute when after an investigation they are convinced that the evidence adduced is insufficient to establish a prima facie case.
Consequently, on 9 May 1997 MTCP filed a petition for certiorari
before the Court of Appeals raising as sole issue whether the defense of lack of accounting precludes a finding of probable cause, with prayer that the DOJ Resolutions be annulled.
The Court of Appeals granted the petition and in its assailed Decision of 12 November 1997 held that the amount subject of the estafa charge had in fact been determined by an independent certified public accountant as shown by the report from the accounting firm of Mendoza, Ignacio, Corvera and Co., containing an itemized account of the unliquidated cash advances made by petitioner, which fact he admitted in his Reply-Affidavit. The appellate court further explained that assuming arguendo that there was no accounting made, petitioner’s reliance on Perez v. People 7 declaring prior settlement of account as sine qua non to the filing of an information for estafa was misplaced since the cited case involved complicated transactions regarding numerous checks in various amounts while the instant case merely involved cash advances entrusted and received by petitioner.chanrob1es virtua1 1aw 1ibrary
By comparison, therefore, the instant case comprehends a simple transaction where the requirement of prior accounting and liquidation may be done away with, as it is not essential. As to petitioner’s alleged payment and liquidation of the amount, the Court of Appeals held that it is a matter of defense that is best threshed out in the trial proper.
On 27 November 1997 petitioner moved for a reconsideration of the Decision but it was denied. Hence, on 23 January 1998 the Office of the City Prosecutor as directed caused the filing of an Information for estafa against petitioner before the Manila RTC, docketed as Crim. Case No. 98-162570.
Petitioner now questions the jurisdiction of the trial court arguing that the instant case involves an intra-corporate controversy primarily cognizable by the SEC and, as such, the public prosecutor had no authority to initially rule in the preliminary investigation of the complaint for estafa filed against him as it was barred under the doctrine of primary jurisdiction from exercising jurisdiction over the criminal case without the prior resolution of the SEC on the matter. 8 Granting that jurisdiction over the matter lies with the regular courts, petitioner maintains that the doctrine that "there can be no estafa charge without previous settlement of account to determine the amount due" as enunciated in Perez v. People applies in the instant case; thus, the same being lacking, the charge of estafa filed against him must fail.
The petition is impressed with merit. Section 6, PD 902-A confines the jurisdiction of the SEC to "intra-corporate disputes" defined as any act or omission of the Board of Directors/Trustees of corporations, or of partnerships, or of other associations, or of their stockholders, officers, or partners, including any fraudulent devices, schemes or representations, in violation of any law or rules and regulations administered and enforced by the Commission. 9 This underscores the relationship of the party-litigants with each other, and indicates that the nature of the cause of action should be limited to fraudulent devices, schemes or representations, in violation of any law, rules and/or regulations administered and enforced by the Commission for the cause of action to fall within the ambit of authority of the SEC — elements that are both present in the instant case. Petitioner was the President as well as a Director and stockholder in private respondent MTCP, who was charged with the misappropriation or diversion of corporate funds after having failed to liquidate the amount of P21,291,376.61 he had received as cash advances from the company.
Indeed, the charge against petitioner is for estafa, an offense punishable under The Revised Penal Code (RPC), and prosecution for the offense is presently before the regular courts. However, as correctly pointed out by private respondent MTCP, jurisdiction is determined not from the law upon which the cause of action is based, nor the type of proceedings initiated, but rather, it is gleaned from the allegations stated in the complaint. It is evident from the complaint that the acts charged are in the nature of an intra-corporate dispute as they involve fraud committed by virtue of the office assumed by petitioner as President, Director, and stockholder in MTCP, and committed against the MTCP corporation. This sufficiently removes the action from the jurisdiction of the regular courts, and transposes it into an intra-corporate controversy within the jurisdiction of the SEC. The fact that a complaint for estafa, a felony punishable under the RPC, has been filed against petitioner does not negate and nullify the intra-corporate nature of the cause of action, nor does it transform the controversy from intra-corporate to a criminal one.
Accordingly, as the matter involves an intra-corporate dispute within the jurisdiction of the SEC, the issue of whether prior non-accounting precludes a finding of probable cause for the charge of estafa no longer finds relevance.chanrob1es virtua1 1aw library
The doctrine of primary jurisdiction 10 exhorts us to refer the instant case to the SEC for its resolution of the matter in dispute. However, it should be noted that RA 8799, The Securities Regulation Code, has amended PD 902-A, and transferred the jurisdiction of the SEC over intra-corporate cases to the courts of general jurisdiction or the appropriate Regional Trial Courts. 11 To transfer the present case to the SEC would only result in a circuitous administration of justice. Thus, the Regional Trial Court of Manila should dismiss Crim. Case No. 98-162570 without prejudice to the filing of the proper action which shall then be raffled off to the appropriate branch of the court pursuant to A.M. No. 00-11-03-SC. 12
WHEREFORE, the assailed Decision of the Court of Appeals of 12 November 1997 and its Resolution of 9 February 1998 in CA-G.R. SP No. 44120 annulling and setting aside the Resolution of 2 December 1996 of the Department of Justice (DOJ) and directing the filing of an Information for estafa against petitioner Hernani N. Fabia before the regular courts are REVERSED and SET ASIDE. As Crim. Case No. 98-162570 involves an intra-corporate dispute, jurisdiction properly lies with the Securities and Exchange Commission (SEC).
However, in conformity with RA 8799, The Securities Regulation Code, amending PD 902-A, which has effectively transferred the jurisdiction of the Securities and Exchange Commission over all cases enumerated under Sec. 5 of PD 902-A to the courts of general jurisdiction or the appropriate Regional Trial Courts, Crim. Case No. 98-162570 is ordered TRANSFERRED to the Regional Trial Court of Manila to be raffled among the designated branches empowered to try and decide cases formerly cognizable by the SEC pursuant to A.M. No. 00-1143-SC. No costs.chanroblesvirtuallawlibrary
Mendoza, Quisumbing, Buena and De Leon, Jr., JJ.
1. Decision penned by Associate Justice Ma. Alicia Austria-Martinez (now CA Presiding Justice), concurred in by Associate Justices Romeo J. Callejo, Sr. and Rodrigo V. Cosico, Seventeenth Division, 12 November 1997.
2. DOJ Resolution No. 593, Series of 1996, penned by Chief State Prosecutor Jovencito R. Zuno.
3. Records, pp. 56-58.
4. 16 August 1996 Resolution penned by 3rd Assistant City Prosecutor Juanita Guerrero-Ferry; Records, pp. 59-61.
5. Records, pp. 62-64.
6. Signed by Secretary of Justice Teofisto T. Guingona, Jr.; id., pp. 65-66.
7. No. L43548, 29 June 1981, 105 SCRA 183.
8. Records, p. 10, citing Saavedra, Jr. v. Department of Justice, G.R. No. 93173, 15 September 1995, 226 SCRA 438.
9. SECTION 6. The Prosecution and Enforcement Department shall have, subject to the Commission’s control and supervision, the exclusive authority to investigate, on complaint or motu propio, any act or omission of the Board of Directors/Trustees of corporations, or of partnerships, or of other associations, or of their stockholders, officers, or partners, including any fraudulent devices, schemes or representations, in violation of any law or rules and regulations administered and enforced by the Commission; to file and prosecute in accordance with law and rules and regulations issued by the Commission and in appropriate cases, the corresponding criminal or civil case before the Commission or the proper court or body upon prima facie finding of violation of any law or rules and regulations administered and enforced by the Commission; and to perform such other powers and functions as may be provided by law or duly delegated to it by the Commission (P.D. 902-A).
Prosecution under this Decree or any Act, Law, Rules and Regulations enforced and administered by the Commission shall be without prejudice to any liability for violation of any provision of the Revised Penal Code.
10. See Note 8.
11. SECTION 5.2. The Commission’s jurisdiction over all cases enumerated under Sec. 5 of P.D. 902-A is hereby transferred to the courts of general jurisdiction or the appropriate Regional Trial Courts (RTC): Provided, that the Supreme Court in the exercise of its authority may designate the RTC branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed (RA 8799, The Securities Regulation Code, 30 May 2000).
12. 21 November 2000 Resolution, Resolution designating certain branches of the Regional Trial Court to try and decide cases formerly cognizable by the SEC."