G.R. No. 230649 . April 26, 2023.
PEOPLE OF THE PHILIPPINES, PETITIONER, VS. NOEL M. CARIÑO, FERDINAND T. SANTOS, ROBERT JOHN L. SOBREPEÑA, EXEQUIEL E. ROBLES, ROBERTO J. CHAN, SUSANA S. CHAN, RUBEN C. SY, SOFIA C. SY, VICENTE SANTOS, AND IGMIDIO ROBLES, RESPONDENTS.

FACTS

The case originated from an Information accusing the respondents, in their capacities as incorporators, board of directors/members, and officers of Caliraya Springs Golf Club, Inc. (Caliraya), of violating Section 12.7 in relation to Section 73 of the Securities Regulation Code (RA 8799). The Information alleged that on or about April 1997, the respondents fraudulently made an untrue statement of material fact in a Registration Statement filed with the SEC by declaring July 1999 as the expected completion date for Caliraya’s golf course and clubhouse project, when in fact the project remained incomplete.
In 1997, Caliraya filed a Registration Statement to register its securities, indicating the respondents as incorporators, board members, and officers. The statement declared the project’s expected completion by July 1999. A review of Caliraya’s 2003 quarterly report by the SEC revealed the corporation’s failure to comply with its undertaking. After directives and a show-cause order, the SEC revoked Caliraya’s registration in 2004. Caliraya’s 2005 Annual Report stated the first 18 holes were completed and playable, with overall project accomplishment at 52%. In 2009, the SEC again directed Caliraya and respondents to explain the misrepresentations. Following non-compliance and proceedings including an ocular inspection (which found the clubhouse 100% complete but only one 18-hole course finished as of 2010), the SEC filed a complaint-affidavit leading to the Information.
The Regional Trial Court initially dismissed the case for lack of probable cause, reasoning that the July 1999 date was merely an estimate and that no evidence showed respondents’ direct responsibility. Upon the prosecution’s motion for reconsideration, the RTC granted a chance to present additional evidence. After submission, the RTC again dismissed the case, finding insufficient evidence to establish probable cause and noting the mere status as incorporators/board members was insufficient to impute criminal liability without proof of direct knowledge. The prosecution’s motion for reconsideration was denied.
The prosecution filed a petition for certiorari before the Court of Appeals. The CA dismissed the petition, holding it was the wrong remedy as the assailed RTC order was final and appealable. On the merits, the CA found no grave abuse of discretion by the RTC, agreeing that the completion date was a forward-looking statement not punishable under the law and that the prosecution failed to demonstrate respondents’ probable liability.

ISSUE

1. Whether the CA erred in holding that the proper remedy from a final order of dismissal in a criminal case is appeal and not certiorari.
2. Whether the CA erred in holding that the trial court committed no grave abuse of discretion in dismissing the criminal case against respondents for lack of probable cause.

RULING

The Supreme Court denied the petition, affirming the CA’s ruling.
1. On the Propriety of the Remedy: The CA correctly held that the petition for certiorari was the wrong remedy. The RTC’s Order dated June 23, 2014, which dismissed the criminal case for lack of probable cause, was a final order. The proper remedy from a final order of dismissal issued by the RTC in a criminal case is an appeal under Rule 41 of the Rules of Court to the CA or the Supreme Court, as provided by law. A petition for certiorari under Rule 65 is not a substitute for a lost appeal.
2. On the Lack of Grave Abuse of Discretion (Probable Cause): The Supreme Court found that the RTC did not commit grave abuse of discretion in dismissing the case for lack of probable cause. Probable cause requires facts and circumstances sufficient to engender a well-founded belief that a crime has been committed and the accused is probably guilty. The Court agreed with the lower courts’ analysis:
* Nature of the Statement: The declared project completion date of “July 1999” was a forward-looking statement, an estimate or projection. Its truth or falsity could only be determined when that date arrived. The law punishes the making of an untrue statement of a material fact. A forward-looking estimate, which by its nature is not a guarantee, cannot be considered an “untrue statement of fact” in the context of the Securities Regulation Code violation charged.
* Liability of Respondents: The prosecution failed to present evidence to establish probable cause that the respondents, as incorporators and board members, had direct participation in or knowledge of the alleged misrepresentation. Mere membership in the board is insufficient to incur criminal liability; it must be shown that the director participated in the criminal act or consented to its commission. The Information did not even charge Caliraya, the corporate entity itself.
Thus, the RTC’s dismissal was based on its evaluation of the evidence and was not tainted with grave abuse of discretion. The CA correctly affirmed the RTC’s orders.