G.R. No. 191015 - People vs. Go

Case Summary (G.R. No. 191015)

Relevant Dates and Procedural Posture

BSP closed OCBC in October 1998 and PDIC assumed receivership. PDIC filed complaint(s) for estafa through falsification of commercial documents on September 24, 1999. Informations were filed by the City Prosecutor on November 22, 2000 and docketed in RTC Manila as Criminal Case Nos. 00-187318 and 00-187319. After the prosecution rested, the accused sought and obtained leave to file demurrer to evidence; the RTC granted the demurrer and dismissed the cases by Order dated July 2, 2007. A private prosecutor (PDIC) filed a motion for reconsideration on July 20, 2007; the public prosecutor’s timely approval/conformity was absent on the copy actually filed. The trial court denied reconsideration on October 19, 2007. The OSG filed an original petition for certiorari with the CA on January 4, 2008; the CA denied relief and affirmed finality of the RTC Orders on September 30, 2009, a denial of reconsideration issued January 22, 2010. The Supreme Court granted the OSG petition and set aside the RTC and CA dispositions on August 6, 2014, ordering the cases reinstated.

Central Legal Issues Presented

Whether the CA erred in holding that the RTC did not commit grave abuse of discretion in granting the demurrer to evidence.
Whether the RTC’s July 2, 2007 Order granting demurrer had attained finality and whether double jeopardy attached given perceived procedural failures by the public prosecutor.
Whether the trial court’s rulings were mere errors of judgment not reaching the level of jurisdictional defect (thus not reviewable by certiorari).

Factual Background Relevant to Liability

PDIC, in collecting OCBC’s past-due loans, sent demand letters to alleged borrowers including Timmy’s, Inc. and Asia Textile Mills, Inc., each purported to have P10 million loans. Representatives of those corporations denied applying for or receiving loans and produced affidavits and documents to show signatures were forged. PDIC’s investigation found that manager’s checks said to be loan proceeds (including Manager’s Check Nos. 0000003347 and 0000003340) were encashed and, together with other checks totaling approximately P120,819,475.00, deposited into Jose Go’s OCBC savings account and thereafter transferred to his current account to fund previously dishonored personal checks. Documentary evidence included loan application packets, OCBC disclosure statements, manager’s checks bearing loan codes, subsidiary ledgers, deposit slips and machine validations; witness testimony from PDIC’s assisting deputy liquidator and OCBC branch personnel was produced.

Trial Court Proceedings and Ruling on Demurrer

After the prosecution rested, respondents sought and obtained leave to file demurrer to evidence. In the RTC’s July 2, 2007 Order the court found the prosecution’s evidence insufficient as a matter of law, granted the demurrer and dismissed the informations, essentially concluding that the prosecution failed to prove who falsified documents and that the two contested manager’s checks were properly negotiated and deposited. The trial court emphasized that key declarants and those allegedly forging signatures were not presented to testify and raised questions about the deposit procedure (use of a cash deposit slip, signatures, indorsements and timing beyond banking hours). The trial court treated the demurrer’s grant as an acquittal.

Court of Appeals’ Reasoning and Finality Determination

The CA denied the petition for certiorari and affirmed the RTC Orders on two principal bases: (1) finality — the public prosecutor did not timely file a motion for reconsideration to preserve the State’s right to challenge the RTC Order, such that the order became final and double jeopardy attached; and (2) sufficiency of evidence — the prosecution relied largely on letters, ledgers and documentary proof but failed to present witnesses with personal knowledge of the alleged falsification and did not trace the funds fully to prove conversion, leaving reasonable doubt. The CA treated any error in appreciation of evidence as an error of judgment not amounting to jurisdictional defect.

Petitioners’ Arguments to the Supreme Court

The People (via the OSG) argued: (1) the public prosecutor in fact joined PDIC’s July 20, 2007 Motion for Reconsideration (allegedly curing the absence of earlier conformity) and any minor delay should not defeat public interest; (2) if the public prosecutor’s act was deemed late, certiorari was nonetheless the proper and timely remedy; (3) the demurrer was improperly granted because the prosecution presented competent documentary and testimonial evidence proving estafa through falsification and conversion of bank funds; and (4) substantial public interest and the magnitude of loss to depositors justified review.

Respondents’ Arguments to the Supreme Court

Respondents maintained that: (1) the trial court’s grant of demurrer amounted to an acquittal and placed them under the protection of the double jeopardy clause; (2) the public prosecutor failed to timely and validly move for reconsideration, so the prosecution lost its right to challenge the RTC Order; (3) the prosecution’s evidence was insufficient because key declarants were not produced, the manager’s checks were not made payable to the alleged borrowers, deposit mechanics were irregular and many documentary items were unverified; and (4) the prosecution did not trace the funds to final recipients and thus failed to meet the burden of proof beyond reasonable doubt.

Legal Standards on Demurrer to Evidence and Reviewability

The Court reiterated the settled standards: a demurrer to evidence challenges the sufficiency of the prosecution’s whole case and, when granted, ordinarily operates as an acquittal that cannot be appealed without violating the double jeopardy prohibition; however, orders granting demurrer are reviewable via certiorari under Rule 65 when the trial court acts with grave abuse of discretion amounting to lack or excess of jurisdiction. Grave abuse is a capricious or whimsical exercise of judgment so gross as to amount to evasion of duty or refusal to act according to law. The Court emphasized that courts must exercise caution in granting demurrers given the competing interests of accused, offended parties and public welfare, and must engage in careful weighing of the prosecution’s evidence.

Supreme Court’s Assessment of the Evidence and Grave Abuse

Applying the foregoing standards, the Supreme Court found that the CA erred in affirming the RTC’s grant of demurrer because the RTC acted with grave abuse of discretion. The Court concluded that the prosecution presented competent documentary and testimonial evidence that, if weighed properly, constituted sufficient evidence to support the informations charging estafa through falsification of commercial documents and probable cause for trial. The Court highlighted that the manager’s checks bore loan-reference codes linking them to the purported loans, that the manager’s checks were encashed and machine-validated and that the proceeds were deposited to Go’s accounts and used to clear his previously dishonored checks. Given the fiduciary nature of banking and Go’s position as OCBC president, the evidence showed conversion and misappropriation of bank funds to his personal use.

Application of Elements — Estafa by Abuse of Confidence and Falsification

On estafa under Article 315(1)(b), the Court found the elements satisfied in the aggregate: (a) bank funds were held in trust/administration (demand deposits governed by simple loan principles);

Case Syllabus (G.R. No. 191015)

Procedural History

Petition for Review on Certiorari filed with the Supreme Court seeking to set aside the Court of Appeals (CA) Decision dated September 30, 2009 in CA-G.R. SP No. 101823 and the CA Resolution dated January 22, 2010 denying reconsideration.
Underlying criminal complaints for two counts of Estafa thru Falsification of Commercial Documents were filed by the Philippine Deposit Insurance Corporation (PDIC) with the Office of the City Prosecutor of Manila on September 24, 1999.
Informations were filed by the Office of the City Prosecutor of Manila on November 22, 2000; cases docketed as Criminal Case Nos. 00-187318 and 00-187319 in the Regional Trial Court (RTC) of Manila.
After trial and presentation of the prosecution’s evidence, the accused (respondents) filed a Motion for Leave to File Demurrer to Evidence which was granted by the presiding RTC judge on December 19, 2006.
The respondents filed a Demurrer to Evidence on January 17, 2007; RTC promulgated an Order on July 2, 2007 granting the demurrer, dismissing the Informations and acquitting the accused.
Private prosecutor (PDIC) filed a Motion for Reconsideration on July 20, 2007; the respondent RTC judge denied reconsideration on October 19, 2007.
The Office of the Solicitor General (OSG), representing the prosecution, filed an original Petition for Certiorari with the CA on January 4, 2008 to assail the July 2, 2007 RTC Order.
The CA, by Decision dated September 30, 2009, denied the petition and affirmed the RTC Orders as final and executory; the OSG’s motion for reconsideration was denied by the CA on January 22, 2010.
The Supreme Court granted the present Petition for Review on Certiorari and ultimately reversed the CA Decision and Resolution, declared the RTC Orders null and void, and ordered reinstatement of the criminal cases for further proceedings.

Factual Background

BSP Monetary Board issued Resolution No. 1427 ordering the closure of Orient Commercial Banking Corporation (OCBC) and placed the bank under PDIC receivership in October 1998.
PDIC, as receiver, collected OCBC’s past due loan receivables and sent demand letters to borrowers, including Timmyas, Inc. and Asia Textile Mills, Inc., which allegedly had P10 million loans each.
Representatives of Timmyas, Inc. and Asia Textile Mills, Inc. denied applying for or obtaining OCBC loans and asserted that signatures on loan documents were falsified.
PDIC’s investigation concluded the loans in the names of Timmyas, Inc. and Asia Textile Mills, Inc. were released as manager’s checks payable to Philippine Recyclers and Zeta International, Inc., which manager’s checks were allegedly encashed and the proceeds deposited into the OCBC savings account of respondent Jose C. Go and then automatically transferred to his OCBC current account to fund prior personal checks.
Evidence introduced by the prosecution included OCBC loan documents, manager’s checks (including Manager’s Check Nos. 0000003340 and 0000003347, each for P9,985,075.00 and bearing alphanumeric loan codes CL-477 and CL-484), subsidiary ledgers, cash deposit slips, RTCOCI schedules, and testimony of PDIC/OCBC personnel (e.g., Honorio E. Franco, Jr., and Virginia Rowella Famirin).
Chronology of key banking events: prior to February 5, 1997 several personal checks issued by Go totalling P145,488,274.48 were dishonored on February 4, 1997; on February 5, 1997 manager’s checks (including the two in question) were stamped “PAID,” machine-validated late evening presentments, encashed and then deposits totalling approximately P120,819,475.00 credited to Go’s OCBC savings account with machine validation at 6:19 p.m.; automatic transfers credited Go’s current account, after which previously dishonored personal checks cleared on February 5, 1997.
Go sent a letter dated January 28, 1998 to the BSP indicating willingness to assume viability and full payment of accounts under examination, including the Timmyas and Asia Textile Mills accounts.

Issues Presented

Whether the Court of Appeals committed reversible error in (a) ruling that the RTC judge did not commit grave abuse of discretion in granting the demurrer to evidence; (b) ruling that the RTC Order of acquittal had attained finality because it was not timely and appropriately challenged; and (c) determining that the lower court committed errors of judgment rather than errors of jurisdiction.
Whether the prosecution’s failure to timely file or secure the public prosecutor’s formal reconsideration rendered the RTC Order final and barred further review.
Whether the prosecution presented sufficient competent evidence to establish probable cause and to show that respondents committed estafa through falsification of commercial documents.

Petitioner's (Prosecution/OSG) Arguments

The public prosecutor effectively filed a Motion for Reconsideration by joining the private prosecutor (PDIC) in PDIC’s July 20, 2007 Motion for Reconsideration, notwithstanding timing differences; the prosecution contends it joined PDIC’s motion and that the two-day delay should not prejudice the State’s interest.
Even if the public prosecutor’s formal motion was belated, the trial court took cognizance of the motion and passed upon its merits, thereby validating the public prosecutor’s adoption of it; thus the OSG’s Petition for Certiorari with the CA filed on January 4, 2008 was timely within the 60-day period counted from November 5, 2007 (the date the public prosecutor received the trial court’s October 19, 2007 Order denying reconsideration).
The CA erred in affirming the trial court’s grant of demurrer; the prosecution had proved estafa through falsification beyond reasonable doubt and showed respondents’ responsibility.
The July 2, 2007 RTC Order was null and void from the outset and therefore could not have acquired finality; prosecution’s Reply maintained that the filed Motion for Reconsideration contained the public prosecutor’s written conformity and that any lateness should be excused in the public interest and to maintain banking stability.
The prosecution urged reversal of CA dispositions and reinstatement of Criminal Case Nos. 00-187318 and 00-187319 for continuation.

Respondents' Arguments

The grant of the demurrer to evidence by the RTC amounted to an acquittal; subsequent prosecution would violate the accused’s constitutional protection against double jeopardy.
The public prosecutor did not timely move for reconsideration; the public prosecutor’s copy of PDIC’s Motion for Reconsideration was sent by registered mail and lacked contemporaneous written approval/conformity when PDIC filed it on July 20, 2007; any purported post-filing conformity does not validate PDIC’s filing date for purposes of the public prosecutor’s required timely action.
The prosecution was not deprived of its day in court; the RTC’s demurrer ruling was based on fair and judicious evaluation showing the prosecution failed to meet the quantum of proof beyond reasonable doubt.
As to facts and evidence:
- No evidence proved OCBC released loan proceeds to Timmyas, Inc. and Asia Textile Mills, Inc.; the alleged borrowers denied receiving loans; signatures were not proven to have been forged by respondents.
- The two questioned manager’s checks were not in the names of the alleged borrowers and lacked indorsements, teller signatures, and account numbers; they were not shown to have been encashed or deposited to Go’s account with proper negotiation.
- The cash deposit slip used to effect deposit into Go’s OCBC account was irregular because standard banking procedure does not use a cash deposit slip to deposit check
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