SECOND DIVISION

G.R. No. 162336               February 1, 2010

HILARIO P. SORIANO, vs. PEOPLE OF THE PHILIPPINES, BANGKO SENTRAL NG PILIPINAS (BSP),

DEL CASTILLO, J.:

A bank officer violates the DOSRI 2 law when he acquires bank funds for his personal benefit, even if such acquisition was
facilitated by a fraudulent loan application. Directors, officers, stockholders, and their related interests cannot be
allowed to interpose the fraudulent nature of the loan as a defense to escape culpability for their circumvention of
Section 83 of Republic Act (RA) No. 337.3

Before us is a Petition for Review on Certiorari4 under Rule 45 of the Rules of Court, assailing the September 26, 2003
Decision5 and the February 5, 2004 Resolution6 of the Court of Appeals (CA) in CA-G.R. SP No. 67657. The challenged
Decision disposed as follows:

WHEREFORE, premises considered, the instant petition for certiorari is hereby DENIED.7

Factual Antecedents

Sometime in 2000, the Office of Special Investigation (OSI) of the Bangko Sentral ng Pilipinas (BSP), through its
officers,8 transmitted a letter9 dated March 27, 2000 to Jovencito Zuño, Chief State Prosecutor of the Department of
Justice (DOJ). The letter attached as annexes five affidavits, 10 which would allegedly serve as bases for filing criminal charges
for Estafa thru Falsification of Commercial Documents, in relation to Presidential Decree (PD) No. 1689, 11 and for
Violation of Section 83 of RA 337, as amended by PD 1795, 12 against, inter alia,  petitioner herein Hilario P. Soriano. These
five affidavits, along with other documents, stated that spouses Enrico and Amalia Carlos appeared to have an outstanding
loan of ₱8 million with the Rural Bank of San Miguel (Bulacan), Inc. (RBSM), but had never applied for nor received
such loan; that it was petitioner, who was then president of RBSM, who had ordered, facilitated, and received the
proceeds of the loan; and that the ₱8 million loan had never been authorized by RBSM's Board of Directors and no
report thereof had ever been submitted to the Department of Rural Banks, Supervision and Examination Sector of the
BSP. The letter of the OSI, which was not subscribed under oath, ended with a request that a preliminary investigation be
conducted and the corresponding criminal charges be filed against petitioner at his last known address.

Acting on the letter-request and its annexes, State Prosecutor Albert R. Fonacier proceeded with the preliminary investigation.
He issued a subpoena with the witnesses’ affidavits and supporting documents attached, and required petitioner to file his
counter-affidavit. In due course, the investigating officer issued a Resolution finding probable cause and correspondingly
filed two separate informations against petitioner before the Regional Trial Court (RTC) of Malolos, Bulacan.13

The first Information,14 dated November 14, 2000 and docketed as Criminal Case No. 237-M-2001, was for estafa through
falsification of commercial documents, under Article 315, paragraph 1(b), of the Revised Penal Code (RPC), in relation to
Article 172 of the RPC and PD 1689. It basically alleged that petitioner and his co-accused, in abuse of the confidence
reposed in them as RBSM officers, caused the falsification of a number of loan documents, making it appear that one
Enrico Carlos filled up the same, and thereby succeeded in securing a loan and converting the loan proceeds for their
personal gain and benefit.15 The information reads:

That in or about the month of April, 1997, and thereafter, in San Miguel, Bulacan, and within the jurisdiction of this Honorable
Court, the said accused HILARIO P. SORIANO and ROSALINDA ILAGAN, as principals by direct participation, with
unfaithfulness or abuse of confidence and taking advantage of their position as President of the Rural Bank of San Miguel
(Bulacan), Inc. and Branch Manager of the Rural Bank of San Miguel – San Miguel Branch [sic], a duly organized banking
institution under Philippine Laws, conspiring, confederating and mutually helping one another, did then and there, willfully and
feloniously falsify loan documents consisting of undated loan application/information sheet, credit proposal dated April 14, 1997,
credit proposal dated April 22, 1997, credit investigation report dated April 15, 1997, promissory note dated April 23, 1997,
disclosure statement on loan/credit transaction dated April 23, 1997, and other related documents, by making it appear that one
Enrico Carlos filled up the application/information sheet and filed the aforementioned loan documents when in truth and in fact
Enrico Carlos did not participate in the execution of said loan documents and that by virtue of said falsification and with deceit and
 intent to cause damage, the accused succeeded in securing a loan in the amount of eight million pesos (PhP8,000,000.00) from the
Rural Bank of San Miguel – San Ildefonso branch in the name of Enrico Carlos which amount of PhP8 million representing the loan
proceeds the accused thereafter converted the same amount to their own personal gain and benefit, to the damage and prejudice of
the Rural Bank of San Miguel – San Ildefonso branch, its creditors, the Bangko Sentral ng Pilipinas, and the Philippine Deposit
Insurance Corporation.

The other Information17 dated November 10, 2000 and docketed as Criminal Case No. 238-M-2001, was for violation of Section
83 of RA 337, as amended by PD 1795. The said provision refers to the prohibition against the so-called DOSRI loans. The
information alleged that, in his capacity as President of RBSM, petitioner indirectly secured an ₱8 million loan with
RBSM, for his personal use and benefit, without the written consent and approval of the bank's Board of Directors,
without entering the said transaction in the bank's records, and without transmitting a copy of the transaction to the
supervising department of the bank. His ruse was facilitated by placing the loan in the name of an unsuspecting RBSM
depositor, one Enrico Carlos.18 The information reads:

That in or about the month of April, 1997, and thereafter, and within the jurisdiction of this Honorable Court, the said accused, in
his capacity as President of the Rural Bank of San Miguel (Bulacan), Inc., did then and there, willfully and feloniously indirectly
borrow or secure a loan with the Rural Bank of San Miguel – San Ildefonso branch, a domestic rural banking institution created,
organized and existing under Philippine laws, amounting to eight million pesos (PhP8,000,000.00), knowing fully well that the
same has been done by him without the written consent and approval of the majority of the board of directors of the said bank, and
which consent and approval the said accused deliberately failed to obtain and enter the same upon the records of said banking
institution and to transmit a copy thereof to the supervising department of the said bank, as required by the General Banking Act, by
using the name of one depositor Enrico Carlos of San Miguel, Bulacan, the latter having no knowledge of the said loan, and one in
possession of the said amount of eight million pesos (PhP8,000,000.00), accused converted the same to his own personal use and
benefit, in flagrant violation of the said law.

Both cases were raffled to Branch 79 of the RTC of Malolos, Bulacan.20

On June 8, 2001, petitioner moved to quash21 these informations on two grounds: that the court had no jurisdiction over
the offense charged, and that the facts charged do not constitute an offense.

On the first ground, petitioner argued that the letter transmitted by the BSP to the DOJ constituted the complaint and hence was
defective for failure to comply with the mandatory requirements of Section 3(a), Rule 112 of the Rules of Court, such as the
statement of address of petitioner and oath and subscription. 22 Moreover, petitioner argued that the officers of OSI,  who were
the signatories to the "letter-complaint," were not authorized by the BSP Governor, much less by the Monetary Board, to file
the complaint. According to petitioner, this alleged fatal oversight violated Section 18, pars. (c) and (d) of the New Central
Bank Act (RA 7653).

On the second ground, petitioner contended that the commission of estafa under paragraph 1(b) of Article 315 of the RPC is
inherently incompatible with the violation of DOSRI law (as set out in Section 83 23 of RA 337, as amended by PD
1795),24 hence a person cannot be charged for both offenses. He argued that a violation of DOSRI law requires the offender
to obtain a loan from his bank, without complying with procedural, reportorial, or ceiling requirements. On the other
hand, estafa under par. 1(b), Article 315 of the RPC requires the offender to misappropriate or convert something that
he holds in trust, or on commission, or for administration, or under any other obligation involving the duty to return the
same.25

Essentially, the petitioner theorized that the characterization of possession is different in the two offenses. If petitioner
acquired the loan as DOSRI, he owned the loaned money and therefore, cannot misappropriate or convert it as
contemplated in the offense of estafa. Conversely, if petitioner committed estafa, then he merely held the money in trust
for someone else and therefore, did not acquire a loan in violation of DOSRI rules.

Ruling of the Regional Trial Court

In an Order26 dated August 8, 2001, the trial court denied petitioner's Motion to Quash for lack of merit. The lower court
agreed with the prosecution that the assailed OSI letter was not the complaint-affidavit itself; thus, it need not comply with
the requirements under the Rules of Court. The trial court held that the affidavits, which were attached to the OSI letter,
comprised the complaint-affidavit in the case. Since these affidavits were duly subscribed and sworn to before a notary public,
there was adequate compliance with the Rules. The trial court further held that the two offenses were separate and distinct
violations, hence the prosecution of one did not pose a bar to the other.27
Petitioner’s Motion for Reconsideration was likewise denied in an Order dated September 5, 2001. 28

Aggrieved, petitioner filed a Petition for Certiorari29 with the CA, reiterating his arguments before the trial court.

Ruling of the Court of Appeals

The CA denied the petition on both issues presented by petitioner.

On the first issue, the CA determined that the BSP letter, which petitioner characterized to be a fatally infirm complaint,
was not actually a complaint, but a transmittal or cover letter only. This transmittal letter merely contained a summary of
the affidavits which were attached to it. It did not contain any averment of personal knowledge of the events and transactions
that constitute the elements of the offenses charged. Being a mere transmittal letter, it need not comply with the requirements of
Section 3(a) of Rule 112 of the Rules of Court.30

The CA further determined that the five affidavits attached to the transmittal letter should be considered as the complaint-
affidavits that charged petitioner with violation of Section 83 of RA 337 and for Estafa thru Falsification of Commercial
Documents. These complaint-affidavits complied with the mandatory requirements set out in the Rules of Court – they
were subscribed and sworn to before a notary public and subsequently certified by State Prosecutor Fonacier, who personally
examined the affiants and was convinced that the affiants fully understood their sworn statements. 31

Anent the second ground, the CA found no merit in petitioner's argument that the violation of the DOSRI law and the
commission of estafa thru falsification of commercial documents are inherently inconsistent with each other . It explained
that the test in considering a motion to quash on the ground that the facts charged do not constitute an offense, is whether the
facts alleged, when hypothetically admitted, constitute the elements of the offense charged. The appellate court held that this
test was sufficiently met because the allegations in the assailed informations, when hypothetically admitted, clearly constitute
the elements of Estafa thru Falsification of Commercial Documents and Violation of DOSRI law. 32

Petitioner’s Motion for Reconsideration33 was likewise denied for lack of merit.

Hence, this petition.

Issues

Restated, petitioner raises the following issues34 for our consideration:

Whether the complaint complied with the mandatory requirements provided under Section 3(a), Rule 112 of the Rules of Court
and Section 18, paragraphs (c) and (d) of RA 7653.

II

Whether a loan transaction within the ambit of the DOSRI law (violation of Section 83 of RA 337, as amended) could also
be the subject of Estafa under Article 315 (1) (b) of the Revised Penal Code.

III

Is a petition for certiorari under Rule 65 the proper remedy against an Order denying a Motion to Quash?

IV

Whether petitioner is entitled to a writ of injunction.

Our Ruling

The petition lacks merit.

Whether the complaint complied with the mandatory requirements provided under Section 3(a), Rule 112 of the Rules
of Court and Section 18, paragraphs (c) and (d) of

Republic Act No. 7653

Petitioner moved to withdraw the first issue from the instant petition

On March 5, 2007, the Court noted 35 petitioner's Manifestation and Motion for Partial Withdrawal of the Petition 36 dated
February 7, 2007. In the said motion, petitioner informed the Court of the promulgation of a Decision entitled  Soriano v. Hon.
Casanova,37  which also involved petitioner and similar BSP letters to the DOJ. According to petitioner, the said Decision
allegedly ruled squarely on the nature of the BSP letters and the validity of the sworn affidavits attached thereto. For this reason,
petitioner moved for the partial withdrawal of the instant petition insofar as it involved the issue of "whether or not a court can
legally acquire jurisdiction over a complaint which failed to comply with the mandatory requirements provided under Section
3(a), Rule 112 of the Rules of Court and Section 18, paragraphs (c) and (d) of RA 7653". 38

Given that the case had already been submitted for resolution of the Court when petitioner filed his latest motion, and that all
respondents had presented their positions and arguments on the first issue, the Court deems it proper to rule on the same.

In Soriano v. Hon. Casanova, the Court held that the affidavits attached to the BSP transmittal letter complied with the
mandatory requirements under the Rules of Court.

To be sure, the BSP letters involved in Soriano v. Hon. Casanova39 are not the same as the BSP letter involved in the instant
case. However, the BSP letters in Soriano v. Hon. Casanova and the BSP letter subject of this case are similar in the sense that
they are all signed by the OSI officers of the BSP, they were not sworn to by the said officers, they all contained summaries of
their attached affidavits, and they all requested the conduct of a preliminary investigation and the filing of corresponding
criminal charges against petitioner Soriano. Thus, the principle of stare decisis dictates that the ruling in Soriano v. Hon.
Casanova be applied in the instant case – once a question of law has been examined and decided, it should be deemed settled
and closed to further argument.40

We held in Soriano v. Hon. Casanova, after a close scrutiny of the letters transmitted by the BSP to the DOJ, that these were not
intended to be the complaint, as envisioned under the Rules. They did not contain averments of personal knowledge of the
events and transactions constitutive of any offense. The letters merely transmitted for preliminary investigation the affidavits of
people who had personal knowledge of the acts of petitioner. We ruled that these affidavits, not the letters transmitting them,
initiated the preliminary investigation. Since these affidavits were subscribed under oath by the witnesses who executed them
before a notary public, then there was substantial compliance with Section 3(a), Rule 112 of the Rules of Court.

Anent the contention that there was no authority from the BSP Governor or the Monetary Board to file a criminal case against
Soriano, we held that the requirements of Section 18, paragraphs (c) and (d) of RA 7653 did not apply because the BSP did not
institute the complaint but merely transmitted the affidavits of the complainants to the DOJ.

We further held that since the offenses for which Soriano was charged were public crimes, authority holds that it can be initiated
by "any competent person" with personal knowledge of the acts committed by the offender. Thus, the witnesses who executed
the affidavits clearly fell within the purview of "any competent person" who may institute the complaint for a public crime.

The ruling in Soriano v. Hon. Casanova has been adopted and elaborated upon in the recent case of Santos-Concio v.
Department of Justice.41 Instead of a transmittal letter from the BSP, the Court in Santos-Concio was faced with an NBI-NCR
Report, likewise with affidavits of witnesses as attachments. Ruling on the validity of the witnesses’ sworn affidavits as bases
for a preliminary investigation, we held:

The Court is not unaware of the practice of incorporating all allegations in one document denominated as "complaint-affidavit."
It does not pronounce strict adherence to only one approach, however, for there are cases where the extent of one’s personal
knowledge may not cover the entire gamut of details material to the alleged offense. The private offended party or relative of
the deceased may not even have witnessed the fatality, in which case the peace officer or law enforcer has to rely chiefly on
affidavits of witnesses. The Rules do not in fact preclude the attachment of a referral or transmittal letter similar to that of the
NBI-NCR. Thus, in Soriano v. Casanova, the Court held:
A close scrutiny of the letters transmitted by the BSP and PDIC to the DOJ shows that these were  not intended to
be the complaint envisioned under the Rules. It may be clearly inferred from the tenor of the letters that the officers merely
intended to transmit the affidavits of the bank employees to the DOJ. Nowhere in the transmittal letters is there any averment on
the part of the BSP and PDIC officers of personal knowledge of the events and transactions constitutive of the criminal
violations alleged to have been made by the accused. In fact, the letters clearly stated that what the OSI of the BSP and the LIS
of the PDIC did was to respectfully transmit to the DOJ for preliminary investigation the affidavits and personal knowledge of
the acts of the petitioner. These affidavits were subscribed under oath by the witnesses who executed them before a notary
public. Since the affidavits, not the letters transmitting them, were intended to initiate the preliminary investigation, we hold
that Section 3(a), Rule 112 of the Rules of Court was substantially complied with.

Citing the ruling of this Court in Ebarle v. Sucaldito, the Court of Appeals correctly held that a  complaint for purposes of
preliminary investigation by the fiscal need not be filed by the offended party. The rule has been that, unless the offense
subject thereof is one that cannot be prosecuted de oficio, the same may be filed, for preliminary investigation purposes,
by any competent person. The crime of estafa is a public crime which can be initiated by "any competent person." The
witnesses who executed the affidavits based on their personal knowledge of the acts committed by the petitioner fall within the
purview of "any competent person" who may institute the complaint for a public crime. x x x (Emphasis and italics supplied)

A preliminary investigation can thus validly proceed on the basis of an affidavit of any competent person, without the referral
document, like the NBI-NCR Report, having been sworn to by the law enforcer as the nominal complainant. To require
otherwise is a needless exercise. The cited case of Oporto, Jr. v. Judge Monserate does not appear to dent this proposition.
After all, what is required is to reduce the evidence into affidavits, for while reports and even raw information may justify the
initiation of an investigation, the preliminary investigation stage can be held only after sufficient evidence has been gathered
and evaluated which may warrant the eventual prosecution of the case in court. 42

Following the foregoing rulings in Soriano v. Hon. Casanova and Santos-Concio v. Department of Justice, we hold that the BSP
letter, taken together with the affidavits attached thereto, comply with the requirements provided under Section 3(a), Rule 112
of the Rules of Court and Section 18, paragraphs (c) and (d) of RA 7653.

Second Issue:

Whether a loan transaction within the ambit of the DOSRI law (violation of Section 83 of RA 337, as amended) could be
the subject of Estafa under Article 315 (1) (b) of the Revised Penal Code

The second issue was raised by petitioner in the context of his Motion to Quash Information on the ground that the facts charged
do not constitute an offense.43 It is settled that in considering a motion to quash on such ground, the test is "whether the facts
alleged, if hypothetically admitted, would establish the essential elements of the offense charged as defined by law. The
trial court may not consider a situation contrary to that set forth in the criminal complaint or information . Facts that constitute
the defense of the petitioner[s] against the charge under the information must be proved by [him] during trial. Such
facts or circumstances do not constitute proper grounds for a motion to quash the information on the ground that the
material averments do not constitute the offense". 44

We have examined the two informations against petitioner and we find that they contain allegations which, if hypothetically
admitted, would establish the essential elements of the crime of DOSRI violation and estafa thru falsification of
commercial documents.

In Criminal Case No. 238-M-2001 for violation of DOSRI rules, the information alleged that petitioner Soriano was the
president of RBSM; that he was able to indirectly obtain a loan from RBSM by putting the loan in the name of depositor Enrico
Carlos; and that he did this without complying with the requisite board approval, reportorial, and ceiling requirements.

In Criminal Case No. 237-M-2001 for estafa thru falsification of commercial documents, the information alleged that petitioner,
by taking advantage of his position as president of RBSM, falsified various loan documents to make it appear that an Enrico
Carlos secured a loan of ₱8 million from RBSM; that petitioner succeeded in obtaining the loan proceeds; that he later
converted the loan proceeds to his own personal gain and benefit; and that his action caused damage and prejudice to RBSM, its
creditors, the BSP, and the PDIC.

Significantly, this is not the first occasion that we adjudge the sufficiency of similarly worded informations. In Soriano v.
People,45 involving the same petitioner in this case (but different transactions), we also reviewed the sufficiency of
informations for DOSRI violation and estafa thru falsification of commercial documents, which were almost identical,
mutatis mutandis, with the subject informations herein. We held in Soriano v. People that there is no basis for the quashal
of the informations as "they contain material allegations charging Soriano with violation of DOSRI rules and estafa thru
falsification of commercial documents".

Petitioner raises the theory that he could not possibly be held liable for estafa in concurrence with the charge for DOSRI
violation. According to him, the DOSRI charge presupposes that he acquired a loan, which would make the loan proceeds
his own money and which he could neither possibly misappropriate nor convert to the prejudice of another, as required
by the statutory definition of estafa.46 On the other hand, if petitioner did not acquire any loan, there can be no DOSRI
violation to speak of. Thus, petitioner posits that the two offenses cannot co-exist. This theory does not persuade us.

Petitioner’s theory is based on the false premises that the loan was extended to him by the bank in his own name, and
that he became the owner of the loan proceeds. Both premises are wrong.

The bank money (amounting to ₱8 million) which came to the possession of petitioner was money held in trust or
administration by him for the bank, in his fiduciary capacity as the President of said bank.47 It is not accurate to say that
petitioner became the owner of the ₱8 million because it was the proceeds of a loan. That would have been correct if the
bank knowingly extended the loan to petitioner himself. But that is not the case here. According to the information for
estafa, the loan was supposed to be for another person, a certain "Enrico Carlos"; petitioner, through falsification, made
it appear that said "Enrico Carlos" applied for the loan when in fact he ("Enrico Carlos") did not. Through such
fraudulent device, petitioner obtained the loan proceeds and converted the same. Under these circumstances, it cannot be
said that petitioner became the legal owner of the ₱8 million. Thus, petitioner remained the bank’s fiduciary with respect to
that money, which makes it capable of misappropriation or conversion in his hands.

The next question is whether there can also be, at the same time, a charge for DOSRI violation in such a situation
wherein the accused bank officer did not secure a loan in his own name, but was alleged to have used the name of
another person in order to indirectly secure a loan from the bank. We answer this in the affirmative. Section 83 of RA 337
reads:

Section 83. No director or officer of any banking institution shall, either directly or indirectly, for himself or as the
representative or agent of others, borrow any of the deposits of funds of such bank, nor shall he become a guarantor,
indorser, or surety for loans from such bank to others, or in any manner be an obligor for moneys borrowed from the bank or
loaned by it, except with the written approval of the majority of the directors of the bank, excluding the director concerned.
Any such approval shall be entered upon the records of the corporation and a copy of such entry shall be transmitted
forthwith to the Superintendent of Banks. The office of any director or officer of a bank who violates the provisions of this
section shall immediately become vacant and the director or officer shall be punished by imprisonment of not less than one
year nor more than ten years and by a fine of not less than one thousand nor more than ten thousand pesos. x x x

The prohibition in Section 83 is broad enough to cover various modes of borrowing.[48] It covers loans by a bank
director or officer (like herein petitioner) which are made either: (1) directly, (2) indirectly, (3) for
himself, (4) or as the representative or agent of others.

It applies even if the director or officer is a mere guarantor, indorser or surety for someone else's loan or is in any
manner an obligor for money borrowed from the bank or loaned by it.

The covered transactions are prohibited unless the approval, reportorial and ceiling requirements under Section 83 are
complied with. The prohibition is intended to protect the public, especially the depositors, from the overborrowing of
bank funds by bank officers, directors, stockholders and related interests, as such overborrowing may lead to bank
failures. It has been said that "banking institutions are not created for the benefit of the directors [or officers]. While directors
have great powers as directors, they have no special privileges as individuals. They cannot use the assets of the bank for
their own benefit except as permitted by law. Stringent restrictions are placed about them so that when acting both for
the bank and for one of themselves at the same time, they must keep within certain prescribed lines regarded by the
legislature as essential to safety in the banking business".51

A direct borrowing is obviously one that is made in the name of the DOSRI himself or where the DOSRI is a named party,
while an indirect borrowing includes one that is made by a third party, but the DOSRI has a stake in the transaction. 52 The
latter type – indirect borrowing – applies here. The information in Criminal Case 238-M-2001 alleges that petitioner "in his
capacity as President of Rural Bank of San Miguel – San Ildefonso branch x x x indirectly borrow[ed] or secure[d] a loan
with [RBSM] x x x knowing fully well that the same has been done by him without the written consent and approval of
the majority of the board of directors x x x, and which consent and approval the said accused deliberately failed to
obtain and enter the same upon the records of said banking institution and to transmit a copy thereof to the supervising
department of the said bank x x x by using the name of one depositor Enrico Carlos x x x, the latter having no
knowledge of the said loan, and once in possession of the said amount of eight million pesos (₱8 million), [petitioner]
converted the same to his own personal use and benefit".53

The foregoing information describes the manner of securing the loan as indirect; names petitioner as the benefactor of the
indirect loan; and states that the requirements of the law were not complied with. It contains all the required elements 54 for a
violation of Section 83, even if petitioner did not secure the loan in his own name.

The broad interpretation of the prohibition in Section 83 is justified by the fact that it even expressly covers loans to third parties
where the third parties are aware of the transaction (such as principals represented by the DOSRI), and where the
DOSRI’s interest does not appear to be beneficial but even burdensome (such as in cases when the DOSRI acts as a mere
guarantor or surety). If the law finds it necessary to protect the bank and the banking system in such situations, it will
surely be illogical for it to exclude a case like this where the DOSRI acted for his own benefit, using the name of an
unsuspecting person. A contrary interpretation will effectively allow a DOSRI to use dummies to circumvent the requirements
of the law.

In sum, the informations filed against petitioner do not negate each other.

Third Issue:

Is a Rule 65 petition for certiorari the proper remedy against an Order denying a Motion to Quash?

This issue may be speedily resolved by adopting our ruling in Soriano v. People,55 where we held:

In fine, the Court has consistently held that a special civil action for certiorari is not the proper remedy to assail the denial of a
motion to quash an information. The proper procedure in such a case is for the accused to enter a plea, go to trial without
prejudice on his part to present the special defenses he had invoked in his motion to quash and if after trial on the merits, an
adverse decision is rendered, to appeal therefrom in the manner authorized by law. Thus, petitioners should not have forthwith
filed a special civil action for certiorari with the CA and instead, they should have gone to trial and reiterated the special
defenses contained in their motion to quash. There are no special or exceptional circumstances in the present case that would
justify immediate resort to a filing of a petition for certiorari. Clearly, the CA did not commit any reversible error, much less,
grave abuse of discretion in dismissing the petition.56

Fourth Issue:

Whether petitioner is entitled to a writ of injunction

The requisites to justify an injunctive relief are: (1) the right of the complainant is clear and unmistakable; (2) the invasion of
the right sought to be protected is material and substantial; and (3) there is an urgent and paramount necessity for the writ to
prevent serious damage. A clear legal right means one clearly founded in or granted by law or is "enforceable as a matter of
law." Absent any clear and unquestioned legal right, the issuance of an injunctive writ would constitute grave abuse of
discretion.57 Caution and prudence must, at all times, attend the issuance of an injunctive writ because it effectively disposes of
the main case without trial and/or due process.58 In Olalia v. Hizon,59 the Court held as follows:

It has been consistently held that there is no power the exercise of which is more delicate, which requires greater caution,
deliberation and sound discretion, or more dangerous in a doubtful case, than the issuance of an injunction. It is the strong arm
of equity that should never be extended unless to cases of great injury, where courts of law cannot afford an adequate or
commensurate remedy in damages.

Every court should remember that an injunction is a limitation upon the freedom of action of the [complainant] and should not
be granted lightly or precipitately. It should be granted only when the court is fully satisfied that the law permits it and the
emergency demands it.
Given this Court's findings in the earlier issues of the instant case, we find no compelling reason to grant the injunctive relief
sought by petitioner.

WHEREFORE, the petition is DENIED. The assailed September 26, 2003 Decision as well as the February 5, 2004 Resolution
of the Court of Appeals in CA-G.R. SP No. 67657 are AFFIRMED. Costs against petitioner.
 SECOND DIVISION

G.R. No. 178429               October 23, 2009

JOSE C. GO vs. BANGKO SENTRAL NG PILIPINAS

BRION, J.:

Through the present petition for review on certiorari,1 petitioner Jose C. Go (Go) assails the October 26, 2006 decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 79149, as well as its June 4, 2007 resolution. 3 The CA decision and resolution
annulled and set aside the May 20, 20034 and June 30, 20035 orders of the Regional Trial Court (RTC), Branch 26, Manila
which granted Go’s motion to quash the Information filed against him.

THE FACTS

On August 20, 1999, an Information6 for violation of Section 83 of Republic Act No. 337 (RA 337) or the General Banking
Act, as amended by Presidential Decree No. 1795, was filed against Go before the RTC. The charge reads:

That on or about and during the period comprised between June 27, 1996 and September 15, 1997, inclusive, in the City of
Manila, Philippines, the said accused, being then the Director and the President and Chief Executive Officer of the Orient
Commercial Banking Corporation (Orient Bank), a commercial banking institution created, organized and existing under
Philippines laws, with its main branch located at C.M. Recto Avenue, this City, and taking advantage of his position as such
officer/director of the said bank, did then and there wilfully, unlawfully and knowingly borrow, either directly or
indirectly, for himself or as the representative of his other related companies, the deposits or funds of the said banking
institution and/or become a guarantor, indorser or obligor for loans from the said bank to others, by then and there using
said borrowed deposits/funds of the said bank in facilitating and granting and/or caused the facilitating and granting of credit
lines/loans and, among others, to the New Zealand Accounts loans in the total amount of TWO BILLION AND SEVEN
HUNDRED FIFTY-FOUR MILLION NINE HUNDRED FIVE THOUSAND AND EIGHT HUNDRED FIFTY-SEVEN
AND 0/100 PESOS, Philippine Currency, said accused knowing fully well that the same has been done by him without the
written approval of the majority of the Board of Directors of said Orient Bank and which approval the said accused
deliberately failed to obtain and enter the same upon the records of said banking institution and to transmit a copy of which to
the supervising department of the said bank, as required by the General Banking Act.

CONTRARY TO LAW. [Emphasis supplied.]

On May 28, 2001, Go pleaded not guilty to the offense charged.

After the arraignment, both the prosecution and accused Go took part in the pre-trial conference where the marking of the
voluminous evidence for the parties was accomplished. After the completion of the marking, the trial court ordered the parties
to proceed to trial on the merits.

Before the trial could commence, however, Go filed on February 26, 20037 a motion to quash the Information, which motion Go
amended on March 1, 2003.8 Go claimed that the Information was defective, as the facts charged therein do not constitute
an offense under Section 83 of RA 337 which states:

No director or officer of any banking institution shall either directly or indirectly, for himself or as the representative or agent of
another, borrow any of the deposits of funds of such banks, nor shall he become a guarantor, indorser, or surety for loans from
such bank, to others, or in any manner be an obligor for money borrowed from the bank or loaned by it, except with the written
approval of the majority of the directors of the bank, excluding the director concerned. Any such approval shall be entered upon
the records of the corporation and a copy of such entry shall be transmitted forthwith to the appropriate supervising department.
The office of any director or officer of a bank who violates the provisions of this section shall immediately become vacant and
the director or officer shall be punished by imprisonment of not less than one year nor more than ten years and by a fine of not
less than one thousand nor more than ten thousand pesos.

The Monetary Board may regulate the amount of credit accommodations that may be extended, directly or indirectly, by
banking institutions to their directors, officers, or stockholders. However, the outstanding credit accommodations which a bank
may extend to each of its stockholders owning two percent (2%) or more of the subscribed capital stock, its directors, or its
officers, shall be limited to an amount equivalent to the respective outstanding deposits and book value of the paid-in capital
contribution in the bank. Provided, however, that loans and advances to officers in the form of fringe benefits granted in
accordance with rules and regulations as may be prescribed by Monetary Board shall not be subject to the preceding limitation.
(As amended by PD 1795)

In addition to the conditions established in the preceding paragraph, no director or a building and loan association shall engage
in any of the operations mentioned in said paragraphs, except upon the pledge of shares of the association having a total
withdrawal value greater than the amount borrowed. (As amended by PD 1795)

In support of his motion to quash, Go averred that based on the facts alleged in the Information, he was being prosecuted for
borrowing the deposits or funds of the Orient Bank and/or acting as a guarantor, indorser or obligor for the bank’s
loans to other persons. The use of the word "and/or" meant that he was charged for being either a borrower or a
guarantor, or for being both a borrower and guarantor. Go claimed that the charge was not only vague, but also did not
constitute an offense. He posited that Section 83 of RA 337 penalized only directors and officers of banking institutions
who acted either as borrower or as guarantor, but not as both.

Go further pointed out that the Information failed to state that his alleged act of borrowing and/or guarantying was not
among the exceptions provided for in the law. According to Go, the second paragraph of Section 83 allowed banks to
extend credit accommodations to their directors, officers, and stockholders, provided it is "limited to an amount equivalent
to the respective outstanding deposits and book value of the paid-in capital contribution in the bank." Extending credit
accommodations to bank directors, officers, and stockholders is not per se prohibited, unless the amount exceeds the legal limit.
Since the Information failed to state that the amount he purportedly borrowed and/or guarantied was beyond the limit set by
law, Go insisted that the acts so charged did not constitute an offense.

Finding Go’s contentions persuasive, the RTC granted Go’s motion to quash the Information on May 20, 2003. It denied on
June 30, 2003 the motion for reconsideration filed by the prosecution.

The prosecution did not accept the RTC ruling and filed a petition for certiorari to question it before the CA. The Information,
the prosecution claimed, was sufficient. The word "and/or" did not materially affect the validity of the Information, as it
merely stated a mode of committing the crime penalized under Section 83 of RA 337. Moreover, the prosecution asserted
that the second paragraph of Section 83 (referring to the credit accommodation limit) cannot be interpreted as an exception to
what the first paragraph provided. The second paragraph only sets borrowing limits that, if violated, render the bank, not the
director-borrower, liable. A violation of the second paragraph of Section 83 – under which Go is being prosecuted – is therefore
separate and distinct from a violation of the first paragraph. Thus, the prosecution prayed that the orders of the RTC quashing
the Information be set aside and the criminal case against Go be reinstated.

On October 26, 2006, the CA rendered the assailed decision granting the prosecution’s petition for certiorari. 9 The CA
declared that the RTC misread the law when it decided to quash the Information against Go. It explained that the allegation
that Go acted either as a borrower or a guarantor or as both borrower and guarantor merely set forth the different
modes by which the offense was committed. It did not necessarily mean that Go acted both as borrower and guarantor
for the same loan at the same time. It agreed with the prosecution’s stand that the second paragraph of Section 83 of RA 337
is not an exception to the first paragraph. Thus, the failure of the Information to state that the amount of the loan Go borrowed
or guaranteed exceeded the legal limits was, to the CA, an irrelevant issue. For these reasons, the CA annulled and set aside the
RTC’s orders and ordered the reinstatement of the criminal charge against Go. After the CA’s denial of his motion for
reconsideration,10 Go filed the present appeal by certiorari.

THE PETITION

In his petition, Go alleges that the appellate court legally erred in overturning the trial court’s orders. He insists that the
Information failed to allege the acts or omissions complained of with sufficient particularity to enable him to know the offense
being charged; to allow him to properly prepare his defense; and likewise to allow the court to render proper judgment.

Repeating his arguments in his motion to quash, Go reads Section 83 of RA 337 as penalizing a director or officer of a banking
institution for either borrowing the deposits or funds of the bank, or guaranteeing or indorsing loans to others, but not for
assuming both capacities. He claimed that the prosecution’s shotgun approach in alleging that he acted as borrower and/or
guarantor rendered the Information highly defective for failure to specify with certainty the specific act or omission complained
of. To petitioner Go, the prosecution’s approach was a clear violation of his constitutional right to be informed of the nature and
cause of the accusation against him.

Additionally, Go reiterates his claim that credit accommodations by banks to their directors and officers are legal and valid,
provided that these are limited to their outstanding deposits and book value of the paid-in capital contribution in the bank. The
failure to state that he borrowed deposits and/or guaranteed loans beyond this limit rendered the Information defective. He thus
asks the Court to reverse the CA decision to reinstate the criminal charge.

In its Comment,11 the prosecution raises the same defenses against Go’s contentions. It insists on the sufficiency of the
allegations in the Information and prays for the denial of Go’s petition.

THE COURT’S RULING

The Court does not find the petition meritorious and accordingly denies it.

The Accused’s Right to be Informed

Under the Constitution, a person who stands charged of a criminal offense has the right to be informed of the nature and cause
of the accusation against him.12 The Rules of Court, in implementing the right, specifically require that the acts or omissions
complained of as constituting the offense, including the qualifying and aggravating circumstances, must be stated in ordinary
and concise language, not necessarily in the language used in the statute, but in terms sufficient to enable a person of common
understanding to know what offense is being charged and the attendant qualifying and aggravating circumstances present, so
that the accused can properly defend himself and the court can pronounce judgment. 13 To broaden the scope of the right, the
Rules authorize the quashal, upon motion of the accused, of an Information that fails to allege the acts constituting the
offense.14 Jurisprudence has laid down the fundamental test in appreciating a motion to quash an Information grounded on the
insufficiency of the facts alleged therein. We stated in People v. Romualdez 15 that:

The determinative test in appreciating a motion to quash xxx is the sufficiency of the averments in the information, that is,
whether the facts alleged, if hypothetically admitted, would establish the essential elements of the offense as defined by law
without considering matters aliunde. As Section 6, Rule 110 of the Rules of Criminal Procedure requires, the information only
needs to state the ultimate facts; the evidentiary and other details can be provided during the trial.

To restate the rule, an Information only needs to state the ultimate facts constituting the offense, not the finer details of why and
how the illegal acts alleged amounted to undue injury or damage – matters that are appropriate for the trial. [Emphasis supplied]

The facts and circumstances necessary to be included in the Information are determined by reference to the definition
and elements of the specific crimes. The Information must allege clearly and accurately the elements of the crime
charged.16

Elements of Violation of Section 83 of RA 337

Under Section 83, RA 337, the following elements must be present to constitute a violation of its first paragraph:

1. the offender is a director or officer of any banking institution;

2. the offender, either directly or indirectly, for himself or as representative or agent of another, performs any of
the following acts:

a. he borrows any of the deposits or funds of such bank; or

b. he becomes a guarantor, indorser, or surety for loans from such bank to others, or

c. he becomes in any manner an obligor for money borrowed from bank or loaned by it;

3. the offender has performed any of such acts without the written approval of the majority of the directors of the
bank, excluding the offender, as the director concerned.
A simple reading of the above elements easily rejects Go’s contention that the law penalizes a bank director or officer
only either for borrowing the bank’s deposits or funds or for guarantying loans by the bank, but not for acting in both
capacities. The essence of the crime is becoming an obligor of the bank without securing the necessary written approval
of the majority of the bank’s directors.

The second element merely lists down the various modes of committing the offense. The third mode, by declaring that "[no
director or officer of any banking institution shall xxx] in any manner be an obligor for money borrowed from the bank or
loaned by it," in fact serves a catch-all phrase that covers any situation when a director or officer of the bank becomes its
obligor. The prohibition is directed against a bank director or officer who becomes in any manner an obligor for money
borrowed from or loaned by the bank without the written approval of the majority of the bank’s board of directors. To make a
distinction between the act of borrowing and guarantying is therefore unnecessary because in either situation, the
director or officer concerned becomes an obligor of the bank against whom the obligation is juridically demandable.

The language of the law is broad enough to encompass either act of borrowing or guaranteeing, or both. While the first
paragraph of Section 83 is penal in nature, and by principle should be strictly construed in favor of the accused, the
Court is unwilling to adopt a liberal construction that would defeat the legislature’s intent in enacting the statute. The
objective of the law should allow for a reasonable flexibility in its construction. Section 83 of RA 337, as well as other banking
laws adopting the same prohibition,17 was enacted to ensure that loans by banks and similar financial institutions to their
own directors, officers, and stockholders are above board.18 Banks were not created for the benefit of their directors and
officers; they cannot use the assets of the bank for their own benefit, except as may be permitted by law. Congress has
thus deemed it essential to impose restrictions on borrowings by bank directors and officers in order to protect the public,
especially the depositors.19 Hence, when the law prohibits directors and officers of banking institutions from becoming in
any manner an obligor of the bank (unless with the approval of the board), the terms of the prohibition shall be the
standards to be applied to directors’ transactions such as those involved in the present case.

Credit accommodation limit is not an exception nor is it an element of the offense

Contrary to Go’s claims, the second paragraph of Section 83, RA 337 does not provide for an exception to a violation of the
first paragraph thereof, nor does it constitute as an element of the offense charged. Section 83 of RA 337 actually imposes
three restrictions: approval, reportorial, and ceiling requirements.

The approval requirement (found in the first sentence of the first paragraph of the law) refers to the written approval of the
majority of the bank’s board of directors required before bank directors and officers can in any manner be an obligor
for money borrowed from or loaned by the bank. Failure to secure the approval renders the bank director or officer
concerned liable for prosecution and, upon conviction, subjects him to the penalty provided in the third sentence of first
paragraph of Section 83.

The reportorial requirement, on the other hand, mandates that any such approval should be entered upon the records of the
corporation, and a copy of the entry be transmitted to the appropriate supervising department. The reportorial
requirement is addressed to the bank itself, which, upon its failure to do so, subjects it to quo warranto proceedings under
Section 87 of RA 337.20

The ceiling requirement under the second paragraph of Section 83 regulates the amount of credit accommodations that
banks may extend to their directors or officers by limiting these to an amount equivalent to the respective outstanding
deposits and book value of the paid-in capital contribution in the bank. Again, this is a requirement directed at the bank. In
this light, a prosecution for violation of the first paragraph of Section 83, such as the one involved here, does not require an
allegation that the loan exceeded the legal limit. Even if the loan involved is below the legal limit, a written approval by the
majority of the bank’s directors is still required; otherwise, the bank director or officer who becomes an obligor of the bank is
liable. Compliance with the ceiling requirement does not dispense with the approval requirement.

Evidently, the failure to observe the three requirements under Section 83 paves the way for the prosecution of three different
offenses, each with its own set of elements. A successful indictment for failing to comply with the approval requirement will not
necessitate proof that the other two were likewise not observed.

Rules of Court allow amendment of insufficient Information

SEC. 4. Amendment of complaint or information.—If the motion to quash is based on an alleged defect of the complaint or
information which can be cured by amendment, the court shall order that an amendment be made.

If it is based on the ground that the facts charged do not constitute an offense, the prosecution shall be given by the court an
opportunity to correct the defect by amendment. The motion shall be granted if the prosecution fails to make the amendment, or
the complaint or information still suffers from the same defect despite the amendment. [Emphasis supplied]

Although an Information may be defective because the facts charged do not constitute an offense, the dismissal of the case will
not necessarily follow. The Rules specifically require that the prosecution should be given a chance to correct the defect; the
court can order the dismissal only upon the prosecution’s failure to do so. The RTC’s failure to provide the prosecution this
opportunity twice21 constitutes an arbitrary exercise of power that was correctly addressed by the CA through the certiorari
petition. This defect in the RTC’s action on the case, while not central to the issue before us, strengthens our conclusion that this
criminal case should be resolved through full-blown trial on the merits.

WHEREFORE, we DENY the petitioner’s petition for review on certiorari and AFFIRM the decision of the Court of Appeals
in CA-G.R. SP No. 79149, promulgated on October 26, 2006, as well as its resolution of June 4, 2007. The Regional Trial
Court, Branch 26, Manila is directed to PROCEED with the hearing of Criminal Case No. 99-178551. Costs against the
petitioner.

SO ORDERED.