G.R. No. 189158 . January 11, 2017.
James Ient and Maharlika Schulze, Petitioners, vs. Tullett Prebon (Philippines), Inc., Respondent.

FACTS

Petitioners James Ient and Maharlika Schulze, officers of the Tradition Group, a global competitor of respondent Tullett Prebon (Philippines), Inc., were tasked to establish a Philippine subsidiary. Tradition Financial Services Philippines, Inc. was incorporated in September 2008 with petitioners as incorporators. Tullett filed a criminal complaint alleging that petitioners conspired with Tullett’s former President, Jaime Villalon, and director, Mercedes Chuidian, to orchestrate the mass resignation of Tullett’s entire brokering staff to join the new Tradition subsidiary. The complaint alleged meetings were held where Tradition’s lawyer instructed brokers on resignation letters and petitioners distributed employment and indemnity contracts. Tullett claimed these acts constituted disloyalty under Sections 31 and 34 of the Corporation Code, criminally punishable under Section 144.
The City Prosecutor found probable cause. The Secretary of Justice affirmed this finding. The Court of Appeals sustained the Secretary of Justice, ruling that the acts described, if proven, could constitute violations by directors/officers under Section 31 and that petitioners, as co-conspirators, could be held liable. Petitioners elevated the case to the Supreme Court via a Petition for Review.

ISSUE

Whether the Secretary of Justice and the Court of Appeals correctly found probable cause to charge petitioners with violation of Sections 31 and 34 in relation to Section 144 of the Corporation Code.

RULING

No. The Supreme Court reversed the findings and dismissed the criminal complaint. The Court clarified that Section 144 of the Corporation Code is a penalty provision, not a penal law defining a crime. It merely prescribes penalties for violations of “any provision” of the Code without itself defining criminal acts. For a criminal information to be valid, it must allege facts constituting an offense defined in a penal statute. The Information filed against petitioners failed this test as it merely cited Sections 31 and 34—which are civil liability provisions outlining fiduciary duties and liabilities for willful and knowing voting of assenting to patently unlawful acts—and Section 144. The allegations did not establish that petitioners, who were not directors, officers, or employees of Tullett, owed any fiduciary duty to it under Section 31. Their alleged acts of recruiting Tullett’s employees, while potentially actionable under civil law for unfair competition or tort, were not criminalized by the cited Corporation Code provisions. The acts described did not constitute a public crime warranting criminal prosecution. Consequently, no probable cause existed for the felony charged.