G.R. No. L-23587-88 June 10, 1976
LUCAS RAMIREZ and ENCARNACION FAJARDO RAMIREZ, petitioners, vs. THE HONORABLE COURT OF APPEALS, respondent.

FACTS

Petitioners, spouses Lucas and Encarnacion Ramirez, were convicted by the Court of First Instance of Manila for the crime of falsification of public, official, and/or commercial documents under Section 172 of the Revised Penal Code. The charges stemmed from their actions during a foreign exchange crisis, wherein the Central Bank issued Circular No. 20 and subsequent implementing regulations, including Circular No. 44. These required new importers to submit financial documents certified by an independent CPA to qualify for dollar allocations. The information alleged that the petitioners, conspiring with others, prepared and submitted falsified documents—including balance sheets, profit and loss statements, and merchandise inventories—in the names of dummies (Salustia Lasin and Natalia Caparaz) to make it appear these individuals were qualified new importers, thereby securing foreign exchange licenses from the Central Bank.
The Court of Appeals affirmed the conviction. In their appeal to the Supreme Court, the petitioners argued for acquittal based on a supervening event: the alleged repeal of Central Bank Circular No. 20 by Circular No. 133. They contended that since the regulatory purpose for the falsified documents (to secure dollar allocations under Circular No. 20) had been removed, the crime itself was obliterated. The prosecution maintained that the charge was for falsification under the Revised Penal Code, a distinct crime not dependent on the continued existence of the Central Bank circular.

ISSUE

Whether the repeal of Central Bank Circular No. 20 extinguished the petitioners’ criminal liability for the crime of falsification of public and commercial documents under Article 172 of the Revised Penal Code.

RULING

The Supreme Court, voting 7-4, granted the petition and acquitted the petitioners. The legal logic centered on the doctrine of supervening events. The Court ruled that the crime of falsification in this case was intimately and intrinsically linked to the violation of Central Bank Circular No. 20. The petitioners’ sole intent and motive in falsifying the documents were to circumvent the specific requirements of that circular to obtain dollar allocations. When Circular No. 20 was subsequently repealed by Circular No. 133, which lifted all exchange controls, the very basis for the crime disappeared. The Court analogized the situation to the doctrine in People vs. Quasha, where an amnesty for violation of exchange control laws was held to cover the related crime of falsification committed to achieve that violation. Here, the repeal of the circular constituted a similar supervening event that removed the raison d’être of the falsification. The Court emphasized that while the act of falsification was complete upon its commission, a subsequent fundamental change in the law that obliterates the very purpose of the crime can extinguish criminal liability. The falsification was not an independent crime aimed at damaging a third party, but an instrumental act to defraud the government under a specific regulatory regime that no longer existed. Consequently, the petitioners’ conviction was reversed.