Title
Andres vs. Cuevas
Case
G.R. No. 150869
Decision Date
Jun 9, 2005
Majority stockholders accused minority of mismanagement; perjury charges filed over false SEC claims. DOJ upheld, CA dismissed procedural errors, SC affirmed no grave abuse. Trial ordered.
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Case Digest (G.R. No. 150869)

Facts:

Background of the Case

Petitioners, as majority stockholders of the Rural Bank of Pandi, Bulacan, filed a petition before the Securities and Exchange Commission (SEC) on June 11, 1992, against private respondents, who were minority stockholders of the bank. The petition alleged mismanagement, fraud, and conflict of interest by private respondents, particularly Mercedes Coloma, who had been the bank’s manager for 18 years. Petitioners claimed, among other things, that no cash dividends were declared since Coloma assumed management, depriving them of rightful income.

Perjury Complaint

In response, private respondents filed a Complaint-Affidavit on September 15, 1992, before the City Prosecutor of Mandaluyong City, charging petitioners with perjury. They alleged that petitioners knowingly made false statements in their SEC petition, particularly regarding the declaration of dividends. Private respondents attached documents, including minutes of board meetings and proof of dividend payments, to refute petitioners’ claims.

Prosecution and Appeals

The City Prosecutor found probable cause and filed an Information for perjury against petitioners. Petitioners appealed to the Department of Justice (DOJ), which initially dismissed the case but later reversed its decision upon a motion for reconsideration. The DOJ, under Justice Secretary Serafin Cuevas, ordered the refiling of the perjury charges, reasoning that petitioners’ statements were knowingly false and made to influence the SEC favorably.

Court of Appeals Decision

Petitioners filed a petition for certiorari before the Court of Appeals (CA), which was initially dismissed due to procedural defects. Although petitioners filed an amended petition with a proper verification and certification against forum shopping, the CA denied reconsideration, finding no grave abuse of discretion in the DOJ’s resolution.

Issue:

  1. Whether the Court of Appeals erred in denying petitioners’ motion for reconsideration of its dismissal of their petition for certiorari despite their timely amendment of the petition.
  2. Whether the DOJ gravely abused its discretion in ordering the refiling of the perjury charges against petitioners.

Ruling:

The Supreme Court denied the petition. The Court held that while petitioners timely amended their petition in the CA, the CA erred in dismissing it on procedural grounds. However, on the merits, the Court found no grave abuse of discretion in the DOJ’s resolution finding probable cause for perjury. The Court emphasized that the issue of good faith or the merits of petitioners’ defenses should be determined during trial, not at the preliminary investigation stage.

Ratio:

  1. Amendments to Pleadings: Amendments to pleadings, including the verification and certification against forum shopping, are allowed as a matter of right if filed within the reglementary period. The CA erred in dismissing the petition based on procedural defects after petitioners had timely amended it.
  2. Non-Interference in Criminal Prosecutions: The Court generally does not interfere in criminal prosecutions unless there are clear exceptions, such as lack of jurisdiction, false charges, or persecution. Petitioners failed to show that their case fell within any recognized exception.
  3. Preliminary Investigation and Probable Cause: The determination of probable cause during a preliminary investigation is primarily an executive function. Absent grave abuse of discretion, the Court will not disturb the findings of the prosecutor or the DOJ.
  4. Jurisdictional Issues: The SEC’s primary jurisdiction over intracorporate disputes does not extend to criminal cases like perjury. Whether the statements were made in connection with an intracorporate dispute is irrelevant to the determination of probable cause for perjury.

Conclusion:

The Supreme Court upheld the CA’s decision, finding no grave abuse of discretion in the DOJ’s resolution to refile the perjury charges. The case was remanded for trial to determine the merits of petitioners’ defenses.


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