GR L 10829 30; (May, 1959) (Digest)
G.R. No. L-10829-30; May 29, 1959
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. CHARLES E. HENDERSON III, ET AL., defendants-appellants.
FACTS
The defendants, as officers of Henderson Trippe (Philippines) Inc., were charged in two separate informations before the Manila Court of First Instance with violations of Central Bank Circular No. 31 in relation to Section 34 of Republic Act No. 265 (the Central Bank Act). The charges stemmed from their alleged act of obtaining excessive allocations of foreign exchange for the purchase of cattle from Australia by falsely representing the price to be $114.20 per head when they knew the actual price was only $66.20 per head (and $43.90 in the other information). The defendants moved to quash the informations on several grounds, including: (1) the Special Prosecutor who signed the informations lacked legal authority; (2) no preliminary investigation was conducted for two defendants; (3) Circular No. 31 was illegal; and (4) the facts alleged did not constitute a violation of the circular. The trial judge overruled the first, second, and fourth objections but sustained the third, declaring Circular No. 31 illegal and dismissing the informations. Both the People and the defendants appealed.
ISSUE
The primary issues are: (1) Whether Central Bank Circular No. 31 is valid despite lacking specific Presidential approval; and (2) Whether the facts alleged in the informations constitute a violation of said circular.
RULING
The Supreme Court reversed the trial court’s dismissal and upheld the validity of Circular No. 31.
1. On the Validity of Circular No. 31: The Court ruled that Circular No. 31 is valid. It found that Circular No. 31 was issued to implement Central Bank Circular No. 20, which had been approved by the Monetary Board with the specific approval of the President of the Philippines. Circular No. 20 itself stated that “further regulations in respect to transactions covered by this Circular will be issued separately.” Following the precedent set in People vs. Jolliffe, the Court held that once the President approved the fundamental decision in Circular No. 20 to subject all gold and foreign exchange transactions to licensing, subsequent circulars (like No. 31) that merely provide implementing details and regulations do not require separate Presidential approval. Such implementing authority is derived from Section 14 of Republic Act No. 265, not Section 74.
2. On the Sufficiency of the Allegations: The Court held that the facts described in the informations clearly constitute a violation of Section 6 of Circular No. 31. The allegations that the defendants, as corporate officers, applied for and received foreign exchange based on a material misrepresentation of the cattle’s price ($114.20 vs. the known $66.20) fall squarely within the prohibition of making “material misrepresentations in any application” for foreign exchange.
The Court also overruled the defendants’ procedural objections. It found that the Special Prosecutor was duly authorized under the Administrative Code to assist in the investigation and prosecution, and the other grounds were not sustained.
DISPOSITIVE:
The appeal of the People was sustained, and the appeal of the defendants was overruled. The case was remanded to the trial court for further proceedings.