Case Digest (G.R. No. 172785-86)
Facts:
Cruzvale, Inc. v. Jose Armando L. Eduque, Peter A. Binamira, Jeanette C. Delgado and Ma. Leticia R. Joson, G.R. Nos. 172785-86, June 18, 2009, the Supreme Court Second Division, Quisumbing, J., writing for the Court.Petitioner Cruzvale, Inc. was a client of East Asia (AEA) Capital Corporation, a licensed Philippine investment house. As practice, East Asia purchased Long Term Commercial Papers (LTCPs) for Cruzvale; the LTCPs were registered in East Asia’s name “in trust for” Cruzvale, and East Asia issued Outright Sales Invoices and Custodian Receipts. Upon maturity, Cruzvale instructed East Asia to re-invest or roll over principal and accrued interest into other LTCPs.
Sometime in April 2000 Cruzvale learned of irregular transactions and East Asia’s precarious finances and demanded an accounting. Cruzvale’s internal inquiry purportedly showed that (1) certain outstanding LTCPs had been sold or assigned to third parties without Cruzvale’s consent; (2) proceeds of such sales had been used to cover Cruzvale’s alleged purchase of East Asia promissory notes; (3) proceeds of matured LTCPs were not reinvested but likewise used to cover East Asia promissory notes; and (4) interest payments were collected by East Asia and likewise applied to East Asia notes. Cruzvale representatives met with Jose Armando L. Eduque (East Asia CEO), who proposed securing the notes with collateral or dacion of LTCPs, and on June 23, 2000 proposed converting part or all LTCPs into East Asia equity; Cruzvale rejected conversion and demanded turnover of proceeds, LTCPs and accrued interest.
When demand went unanswered, Cruzvale filed a complaint‑affidavit with the Office of the City Prosecutor of Makati charging the four respondents (officers/directors of East Asia) with estafa under Article 315(1)(b) and (2)(a) of the Revised Penal Code. An Information for estafa under Article 315(1)(b) was filed on February 5, 2001 in RTC Makati (Criminal Case No. 01‑328). Ma. Leticia R. Joson filed a motion for reconsideration; Eduque, Binamira and Delgado filed a petition for review with the Department of Justice. The Secretary of Justice directed withdrawal of the information; the City Prosecutor recommended dismissal as to Joson. The prosecutor’s motion to withdraw was denied by Judge Marissa M. Guillen; Judge Romeo F. Barza (who later took over) granted Joson’s motion but denied the motion of Eduque, Binamira and Delgado, prompting arraignment over respondents’ objections. The case was re‑raffled to Judge Rebecca R. Mariano (Branch 134), who initially dismissed the criminal case against all respondents for absence of probable cause.
Cruzvale moved for partial reconsideration; Judge Mariano granted partial reconsideration, denied respondents’ motion for reconsideration, and ordered pre‑trial to proceed. Respondents filed petitions for review with the Court of Appeals: Joson’s petition (CA‑G.R. SP No. 81518) and the petition of Eduque, Binamira and Delgado (CA‑G.R. SP No. 81526). The Court of Appeals granted the consolidated petitions, held that the criminal charge for estafa under Article 315(1)(b) should be dismissed for lack of probable cause, relied on this Court’s precedent in Sesbreno v. Court of Appeals, and concluded that money‑market transactions may “partake of the nature of a loan” such that nonpayment alone does not constitute estafa; the CA reversed certain trial court orders and reinstated a prior order dismissing the information. Cruzval...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in applying Sesbreno v. Court of Appeals to this case?
- Did the Court of Appeals err in ruling that some elements of estafa under Article 315(1)(b) are absent, warranting dismissal for lack of probable cause?
- Was Cruzvale’s motion for partial reconsideration of Judge Mariano’s dismissal a prohibited second...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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