Soriano vs BSP

FACTS:

The Office of Special Investigation of the Bangko Sentral ng Pilipinas, through

its officers, transmitted a letter to Jovencito Zuño, Chief State Prosecutor of the
Department of Justice. The letter attached five affidavits, which would allegedly
serve as bases for filing criminal charges for Estafa thru Falsification of Commercial
Documents, and for Violation of Section 83 of RA 337, against, Hilario P. Soriano.
These five affidavits, stated that spouses Enrico and Amalia Carlos appeared to
have an outstanding loan of P8 million with the Rural Bank of San Miguel, Inc., 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 P8 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.

Petitioner moved to quash the information stating that it does not constitute
to an offense. 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. 

ISSUE:

Whether or not the contention of petitioner is correct

RULING:

No. The prohibition in Section 83 is broad enough to cover various modes of

borrowing. 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.

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. The
latter type - indirect borrowing - applies in this case.

The 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 for a violation
of Section 83, even if petitioner did not secure the loan in his own name.