G.R. No. L-12407; May 29, 1959
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. FRANCISCO T. KOH, ET AL., defendants-appellees.

FACTS

The defendants, officers/directors/stockholders of Villanueva Steamship Company, Inc., were charged before the Manila Court of First Instance with violating Central Bank Circular Nos. 20 and 31 in relation to Section 34 of Republic Act No. 265 (The Central Bank Act). The information alleged that on or about May 25, 1953, they conspired to make material misrepresentations in an application to purchase foreign exchange from the Central Bank. They made it appear that their company was purchasing the vessel “T. S. S. Jolly” from Kiau Hing Shipping Company of Hongkong for US$1,148,000, when in truth, as they well knew, the vessel was owned by Concordia Steamship Company and was actually purchased for only US$266,000. Through these misrepresentations, the Central Bank granted an exchange license to remit US$1,148,000 abroad. After the license was granted, the defendants remitted the total amount, but only US$266,000 was paid to Concordia Steamship Company. They unlawfully utilized the balance of US$882,000 for other purposes and/or sold it in the black market, defrauding the dollar reserves of the Philippines. Two defendants moved to quash the information on the grounds that (1) the facts did not constitute an offense as the Circulars were invalid, and (2) the information charged two separate offenses. The trial judge upheld these grounds, applying them to all defendants, and ordered the dismissal of the information. The prosecution appealed.

ISSUE

1. Whether Central Bank Circular Nos. 20 and 31 are valid.
2. Whether the information charges two separate offenses, constituting duplicity.

RULING

1. On the Validity of the Circulars: The Supreme Court upheld the validity of Central Bank Circular Nos. 20 and 31. Circular No. 20 expressly states it was issued by the Monetary Board by unanimous vote, with the approval of the President, and in accordance with Executive and International Agreements. There is a presumption of regularity in official transactions, and a certification from the Executive Secretary confirmed Presidential approval. It is not incumbent upon the prosecution to prove the Circular complied with all international agreements; the burden is on the defense to show any conflict. The Court found no such conflict, noting that the International Monetary Fund reports did not criticize Philippine exchange controls and that an official statement from the American Embassy indicated the U.S. would concur in such temporary measures. Circular No. 31, as a mere implementation of Circular No. 20, does not require separate Presidential sanction.
2. On Duplicity of the Offenses: The Supreme Court agreed with the trial court that the information charged two separate offenses: (a) a violation of Section 6 of Circular No. 31 (making false representations in the application to purchase foreign exchange by overpricing the vessel), and (b) a violation of Section 7 of Circular No. 31 (utilizing the dollar allocation for purposes other than the stated acquisition and/or selling it in the black market). The prosecution’s argument that the first offense was a necessary means to commit the second was rejected, as the second offense (misuse of funds) could have been committed even without the first (overpricing). The information was therefore defective for duplicity.
DISPOSITIVE:
The order of dismissal was sustained solely on the ground of duplicity. The Supreme Court directed the return of the record to the lower court so that the People could amend the information or file two separate informations as warranted. The validity of the Circulars was affirmed.