The Supreme Court applied rule of lenity as a
Ient v. Tullett Prebon
(Philippines) Inc.
G.R. No. 189158, 11 January 2017
FACTS:
Tradition Group, where petitoners herein are
employed, and Tullett are competitors in the inter-
dealer broking business. On the Tradition Group’s
motive of expansion and diversification in Asia,
petitioners lent and Schulze were tasked with the
establishment Tradition Financial Services
Philippines, Inc.
However, Tullett, filed a Complaint-Affidavit with the
City Prosecution Office of Makati City against the
officers/employees of the Tradition Group for
violation of Sections 31 and 34 of the Corporation
Code which made them criminally liable under
Section 144. Impleaded as respondents in the
Complaint-Affidavit were petitioners lent and
Schulze, Jaime Villalon ,who was formerly President
and Managing Director of Tullett, Mercedes
Chuidian who was formerly a member of Tullett’s
Board of Directors. Villalon and Chuidian were
charged with using their former positions in Tullett to
sabotage said company by orchestrating the mass
resignation of its entire brokering staff in order for
them to join Tradition Philippines which was evident
on their conduct of several meetings with the
employees. According to Tullett, petitioners lent and
Schulze have conspired with Villalon and Chuidian
in the latter’s acts of disloyalty against the company.
Petitioners argued that there could be no violation of
Sections 31 and 34 of the Corporation as these
sections refer to corporate acts or corporate
opportunity, that Section 144 of the same Code
cannot be applied to Sections 31 and 34 which
already contains the penalties or remedies for their
violation; and conspiracy under the Revised Penal
Code cannot be applied to the Sections 31 and 34
of the Corporation Code. The city prosecutor
dismissed the criminal complaint however, on
respondent’s appeal to the Department of Justice,
the dismissal was reversed finding the arguments of
the respondent proper.
CA affirmed the decision of the DOJ secretary.
ISSUE:
WoN Section 144 of the Corporation Code appliesto
Sections 31 and 34 of the same code, thus, making
it a penal offense so that conspiracy can be
appreciated and the petitioners can be impleaded?
RULING:
principle related to liberal interpretation in favor of
the accused in criminal cases. The rule applies
when the court is faced with two possible
interpretations of a penal statute, one that is
prejudicial to the accused and another that is
favorable to him. The rule calls for the adoption of
an interpretation which is more lenient to the
accused.
According to SC, a close reading Section 144
shows that it is not purely a penal provision because
it provides that when the violator is a corporation, an
administrative penalty is imposed in form of
dissolution, which is not a criminal sanction. The
Court also added that there is no provision in the
Corporation Code using an emphatic language to
compel the SC to construe the provision as a penal
offense. SC held that through a thorough
scrutinizing of the different provisions in the
Corporation Code including Sections 31 and 34,
they only impose civil liability aside from Section 74.
SC concludes that had it been the intention of the
drafters of the la to define Sections 31 and 34 as
offenses, they could have easily included similar
language as that found in Section 74. The intention
can also be gleaned from the floor deliberations of
its proponents. Quite apart that no legislative intent
to criminalize Sections 31 and 34 was manifested in
the deliberations on the Corporation Code, it is
noteworthy from the same deliberations that
legislators intended to codify the common law
concepts of corporate opportunity and fiduciary
obligations of corporate officers as found in
American jurisprudence into said provisions. In
common law, the remedies available in the event of
a breach of director’s fiduciary duties to the
corporation are civil remedies. If a director or officer
is found to have breached his duty of loyalty, an
injunction may be issued or damages may be
awarded. A corporate officer guilty of fraud or
mismanagement may be held liable for lost profits.
A disloyal agent may also suffer forfeiture of his
compensation. There is nothing in the deliberations
to indicate that drafters of the Corporation Code
intended to deviate from common law practice and
enforce the fiduciary obligations of directors and
corporate officers through penal sanction aside from
civil liability.
GRANTED. Court of Appeals Resolutions are
REVERSED and SETASIDE.