Case Digest (G.R. No. 209601) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In United Coconut Planters Bank (UCPB) v. Secretary of Justice, Office of the Chief Prosecutor, Tirso Antiporda, Jr. and Gloria Carreon (G.R. No. 209601, January 12, 2021), UCPB filed on July 23, 2007 a Complaint-Affidavit (I.S. No. 2007-633) with the Department of Justice (DOJ) against its former Chairman and CEO, Tirso Antiporda, Jr., and its former President and COO, Gloria Carreon, for “gross negligence and bad faith” under Section 31 of the Corporation Code, in relation to Section 144, after they authorized 50 manager’s checks totaling ₱117,872,269.43 as bonuses between April 6 and July 31, 1998, despite alleged ₱4.4 billion losses of their subsidiary UCAP. The DOJ Task Force on Bank Fraud Cases, on April 8, 2008, found probable cause and filed Information (Criminal Case No. 08-1106) before the RTC of Makati. Antiporda and Carreon petitioned the DOJ Secretary for review, which on July 30, 2008, set aside the Task Force resolution, ruled Section 144 inapplicable to Section 3 Case Digest (G.R. No. 209601) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Subject Matter
- Petitioner United Coconut Planters Bank (UCPB) filed a Complaint-Affidavit (July 23, 2007) before the Department of Justice (DOJ) Task Force on Bank Fraud Cases against respondents Tirso Antiporda, Jr. (former Chairman/CEO) and Gloria Carreon (former President/COO) for:
- Alleged violation of Section 31 of the Corporation Code (civil indemnity for directors/officers guilty of gross negligence or bad faith) in relation to Section 144 (penal sanctions for unpenalized Code violations).
- Authorization and release of 50 manager’s checks totaling PHP 117,872,269.43 as bonuses from April 6 to July 31, 1998, despite UCAP’s substantial losses and without board resolution.
- Respondents contended that:
- Bonuses were justified by UCPB’s audited 1997 net income (PHP 2.115 billion), by-laws authorizing a 10% profit allocation for bonuses, and long-standing banking practice unchallenged by BSP examiners.
- They acted in good faith and lacked knowledge of UCAP’s alleged losses; prescription had run.
- Procedural History
- DOJ Task Force (April 8, 2008): Found probable cause; held prescription barred only from actual discovery (KPMG audit, June 30, 2003); charged respondents under Secs. 31 & 144.
- DOJ Secretary (July 30, 2008): Set aside Task Force resolution; ruled Sec. 144 inapplicable to Sec. 31 (civil remedy) and that the action had prescribed (over nine years since 1998). Denied reconsideration March 1, 2010.
- UCPB filed a Rule 65 petition for certiorari with the Court of Appeals (CA), which:
- Dismissed the petition (May 24, 2013), affirming DOJ Secretary’s resolutions; held Sec. 144 does not apply to Sec. 31; action prescribed under Civil Code Art. 1146.
- Denied partial reconsideration (Oct. 17, 2013).
- UCPB elevated the case to the Supreme Court (G.R. No. 209601) via Rule 45 petition assailing the CA’s decision and resolution.
Issues:
- Whether Section 144 of the Corporation Code applies to violations of Section 31 of the same Code.
- Whether the action for liability under Section 31 had prescribed at the time UCPB filed its Complaint-Affidavit.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)