G.R. No. 209601 , January 12, 2021
United Coconut Planters Bank, Petitioner, vs. Secretary of Justice, Office of the Chief Prosecutor, Tirso Antiporda, Jr. and Gloria Carreon, Respondents.

FACTS

Petitioner United Coconut Planters Bank (UCPB) filed a criminal complaint before the Department of Justice (DOJ) against its former Chairman/CEO Tirso Antiporda, Jr. and former President/COO Gloria Carreon for alleged violation of Section 31 (on the liability of directors or trustees) in relation to Section 144 (on penal sanctions) of the Corporation Code. The complaint alleged that in 1998, Antiporda and Carreon authorized the payment of bonuses totaling PHP 117,872,269.43 to corporate officers and directors without board approval and in bad faith, despite their knowledge of substantial losses incurred by UCPB’s subsidiary, UCAP, which UCPB had absorbed. The respondents countered that the grant of bonuses was based on UCPB’s 1997 net profit of PHP 2.115 billion, was authorized by the bank’s by-laws, and was a long-standing practice never previously questioned by internal/external auditors or the Bangko Sentral ng Pilipinas. They also argued the action had prescribed. The DOJ Task Force initially found probable cause, but the Secretary of Justice reversed, ruling that Section 144 did not apply to violations of Section 31 and that the offense had prescribed. The Court of Appeals affirmed the DOJ Secretary’s resolutions. UCPB elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

The primary issue is whether a violation of Section 31 of the Corporation Code (a provision for civil liability of directors/trustees) is punishable under the penal provision of Section 144 of the same Code.

RULING

The Supreme Court DENIED the petition and AFFIRMED the assailed Court of Appeals Decision and Resolution. The Court held that a violation of Section 31 of the Corporation Code is not criminally punishable under Section 144. The ruling is based on the following:
1. The Court resolved the legal question by applying the rule of lenity, construing an ambiguous penal statute strictly against the state and in favor of the accused. Section 144 applies to violations “not otherwise specifically penalized therein.” Since Section 31 itself does not provide a specific penalty, and considering the Code’s structure where other sections explicitly refer violations to Section 144, the ambiguity must be resolved in favor of the respondents.
2. The Court cited its precedent in Ient v. Tullett Prebon (Philippines), Inc., which already settled that Section 144 does not apply to violations of Section 31. Section 31 establishes a civil remedy for corporate recovery, not a public wrong meant to be vindicated by the state through criminal prosecution.
3. The Court also found that the offense, if it existed, had prescribed. Assuming arguendo that Section 144 applied, the prescriptive period is four years under Act No. 3326 . The alleged act was committed in 1998, and the complaint was filed in 2007, well beyond four years. UCPB’s claim of discovering the offense only in 2003 via a special audit report was unsubstantiated, as the alleged report was not formally offered in evidence before the DOJ.
4. The Court noted that Batas Pambansa Blg. 68 (the Corporation Code) had already been repealed by the Revised Corporation Code of the Philippines ( Republic Act No. 11232 ).