G.R. No. 137914. December 4, 2002.
JOHNSON LEE and SONNY MORENO, petitioners, vs. PEOPLE OF THE PHILIPPINES and the COURT OF APPEALS, respondents.

FACTS

Petitioners Johnson Lee and Sonny Moreno were charged with estafa with abuse of confidence before the Office of the City Prosecutor of Bacolod City by Neugene Marketing, Inc. (NMI) through its designated trustee, Atty. Roger Z. Reyes. The City Prosecutor initially absolved them due to lack of malice. Upon NMI’s appeal, the Department of Justice (DOJ) denied the appeal, finding no misappropriation. After a motion for reconsideration, the DOJ, through Undersecretary Silvestre Bello III, ordered a reinvestigation, leading to the filing of Criminal Case Nos. 10010 and 10011. Petitioners filed petitions for reinvestigation at the DOJ, which were denied, citing the rule in Crespo vs. Mogul that trial court permission is needed. They then filed a motion to suspend proceedings in the trial court, arguing a prejudicial question existed in a pending Securities and Exchange Commission (SEC) case (G.R. No. 112941) questioning the validity of NMI’s dissolution and the designation of Atty. Reyes as trustee. The trial court initially ordered a reinvestigation but later reversed itself, denied the motion to suspend, and scheduled arraignment. When petitioner Lee failed to appear at arraignment, the court issued a warrant for his arrest and fixed an additional bond. Petitioners filed a petition for certiorari under Rule 65 before the Court of Appeals, which was denied. The appellate court held that the resolution of the SEC case would not be determinative of petitioners’ criminal liability for estafa, as the crime could be committed regardless of their corporate positions. Hence, this petition.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in denying the petition for certiorari and in not ordering the dismissal or suspension of the criminal cases based on the grounds raised by petitioners, including the existence of a prejudicial question in the SEC case.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that certiorari under Rule 65 lies only to correct errors of jurisdiction, not errors of judgment, and requires a showing of patent and gross abuse of discretion. Petitioners’ contentions were factual defenses appropriate for trial, not for certiorari. The petition for certiorari before the Court of Appeals was premature, as other adequate remedies (like a motion to quash) were available. On the substantive issues, the Court ruled that no prejudicial question existed. The SEC case involved the validity of NMI’s dissolution and trustee appointment, while the criminal cases involved the misappropriation of corporate funds. The resolution of the SEC case would not determine criminal liability for estafa, as the crime could be committed irrespective of the petitioners’ corporate positions. Furthermore, the Court noted that even if the case involved intra-corporate issues, Regional Trial Courts now have jurisdiction over such matters under Republic Act No. 8799 (The Securities Regulation Code). The trial court was ordered to proceed with the arraignment without delay.