G.R. No. 158064 - People vs. Hu Ruey Chun

The Extra Excel International Philippines, Inc. (EEIPI) is a duly organized and registered corporation.
Hu Ruey Chun a.k.a. Richard Hu, a Taiwanese national, served as a stockholder, former Director, President, and General Manager of EEIPI.
Ralph S. Villanueva held the position of financial manager.

On September 25, 2001, EEIPI filed a criminal complaint for qualified theft amounting to Php762,076.35 against Hu in the Office of the City Prosecutor of Makati City.
The complaint was supported by the affidavit of Villanueva which alleged that:

Hu, besides being a stockholder, was the authorized sole signatory for corporate checks used exclusively for legitimate business expenses.
During his tenure, Hu had the power to disburse corporate funds and issue checks.
Hu had ceased holding his executive positions prior to the incident in dispute (resigning as President on December 22, 2000, as General Manager in the second half of 2000, and as Director on June 15, 2001).

Following Hu’s departure, the new management engaged an independent auditing firm to verify the regularity of check disbursements by EEIPI.
The audit revealed that Hu issued a check from EEIPI’s funds:

The check, drawn on an Equitable PCIBank account (with specific branch and account details provided), was issued on or about July 10, 1998.
The check was not for any documented business expense but was payable directly to Hu, thereby evidencing that he personally received and benefited from the amount.
Additional documentary evidence, such as the bank passbook and certification linking passbook and checking account, was presented to corroborate the bank transaction.

Hu submitted a counter-affidavit asserting that the Php762,076.35 represented his 5% commission on the corporation’s gross sales (quoted at Php152,415,269.00).
This explanation formed the basis of his defense against the allegation of misappropriation of corporate funds.

The Office of the City Prosecutor dismissed the complaint for insufficiency of evidence on December 14, 2001.
EEIPI appealed the dismissal, prompting the Department of Justice (DOJ) on July 10, 2002, to reverse the resolution and direct the filing of an Information for qualified theft against Hu.

The prosecutor recommended a bail of Php40,000.00 for the respondent, referring to guidelines set forth in DOJ Department Circular No. 74.

On July 18, 2002, the City Prosecutor filed the Information for qualified theft in the Regional Trial Court (RTC) of Makati City (Branch 148).
On August 1, 2002, the RTC issued an order for the issuance of a warrant of arrest against Hu, rejecting the prosecutor’s bail recommendation, based on the notion that qualified theft carried an imposition of reclusion perpetua (later linked to the gravity of the evidence).
Hu filed a motion for reconsideration on August 23, 2002, citing DOJ Circular No. 74 and precedent cases (such as People v. Hernando) in support of bail.

Hu petitioned the Court of Appeals (CA) for certiorari to nullify the RTC’s orders related to the warrant and denial of bail, contending grave abuse of discretion and procedural due process deficiencies.
The CA, on January 16, 2003, granted Hu’s petition, nullifying the RTC orders on the basis that:

DOJ Department Circular No. 74, which allowed for qualified theft to be treated as a bailable offense, should be given weight.
The issuance of the arrest warrant was premature pending the resolution of Hu’s motion for reconsideration of the DOJ’s directive.

The People of the Philippines, represented by the Office of the Solicitor General (OSG), filed a motion for reconsideration of the CA decision, which was later denied on April 23, 2003.

On June 17, 2003, the People of the Philippines filed a petition for review on certiorari challenging the CA decision based on multiple grounds.
The petition argued that:

The CA erred by categorically treating qualified theft as bailable merely on the basis of DOJ Circular No. 74.
The trial court’s action in issuing a warrant to secure jurisdiction was proper, given that Hu had fled to Taiwan.
Hu’s alleged right to contest the RTC orders did not depend on his physical custody or arrest.

The case also involved an intricate discussion on the appropriate penalty for qualified theft:

Reference was made to People v. CaAales, which analyzed the differences between penalties for theft (Article 309) and qualified theft (Article 310) under the Revised Penal Code.
The imposition of reclusion perpetua, with the accessory penalty of death (or penalties so classified under Article 74), was considered, noting the concept of the “next higher penalty” and divergent views among leading penal law commentators.

The analysis underscored that once evidence of guilt is strong, bail may be denied for offenses carrying penalties of reclusion perpetua or higher.

Whether qualified theft should be treated as a bailable offense given the guidance of DOJ Department Circular No. 74.
Whether the trial court committed abuse of discretion and acted without due process in issuing a warrant for arrest without first holding a hearing on the bail application.
The legal effect and binding nature of DOJ Department Circular No. 74 as a policy guideline versus a binding rule in the determination of bail.
Whether the issuance of the arrest warrant was necessary for the trial court to acquire jurisdiction over Hu, particularly as he was alleged to have fled the country.
The proper interpretation of the Revised Rules of Criminal Procedure, especially Section 7, Rule 114, in relation to bailability in crimes punishable by reclusion perpetua.