Case 1:

Rafael Galvez et al v. CA et al –GR No. 187919

Asia United Bank vs. Gilbert Guy, et. al - GR No.187979
Gilbert Guy, et. al. vs. Asia United Bank – GR No.
188030 (PD 1689 re: syndicated estafa)

Course: Stat Con

Professor: Atty. Amit
What are the relevant facts of the case?

● Smartnet Philippines, Inc. (SPI), 2 applied for an Omnibus Credit

Line for various credit facilities with Asia United Bank (AUB)

● AUB granted to extend the Omnibus Credit Line, RMSI, through

its directors and officers, presented its Articles of Incorporation
with its 400-peso million capitalization and its congressional
telecom franchise

● RMSI was represented by 5 high-ranking officers and directors in

securing the “Letter of Credit.”
What are the relevant facts of the case?

● AUB was satisfied with the credit worthiness of RMSI, AUB granted it a
P250 million Omnibus Credit Line, under the name of Smartnet
Philippines, RMSI's Division

● RMSI submitted proof of authority to open the Omnibus Credit Line and
peso and dollar accounts in the name of Smartnet Philippines, Inc., which
Gilbert Guy, et al. represented as a division of RMSI.

● SPI was just a subsidiary corporation of RMSI with a capital of

P62,500.00. only
What are the relevant facts of the case?

● AUB believed that SPI is the same as Smartnet Philippines — the division of
RMSI, the bank granted $29,300.00

● RMIS’ obligations remained unpaid AUB sent letters demanding payments.

RMSI denied liability contending that the transaction was incurred solely by SPI

● RMSI further claimed that while Smartnet Philippines is an RMSI division, SPI,
is a subsidiary of RMSI, and hence, is a separate entity.

● The lower court and CA found probable cause against private respondents for
the crime of ESTAFA under Article 315, par 2 (a) of the Revised Penal Code
What law or provisions of law is involved?

►Estafa Article 315 (2) of the

Revised Penal Code

►Syndicated Estafa Presidential

Decree 1689 Sec 1
What are the questions of law raised in the
case?

► Whether or not the probable cause against private respondents

for the crime of ESTAFA under Article 315, par 2 (a) of the
Revised Penal Code is valid?

► That AUB, being a commercial bank, is beyond the coverage of

PD No. 1689
 How did the Supreme Court answer the
question of law?
“PROBABLE CAUSE”
► The court meticulously discussed how they found probable cause, a finding
affirming that of the prosecutor and the Court of Appeals, to indict petitioners for
the crime of estafa under Article 315 (2)(a) of the Revised Penal Code.

► The court noted that it was neither the petitioners’ act of borrowing money and
not paying it, nor their denial thereof, but their very act of deceiving AUB in
order for the latter to part with its money that is sought to be penalized.
How did the Supreme Court answer the
question of law?
“Whereas Clause” and “Corporation”

► SC held that a bank is a corporation whose fund comes from the

general public. P.D. No. 1689 does not distinguish the nature of the
corporation. It requires, rather, that the funds of such corporation
should come from the general public.

► This is bolstered by the third "whereas clause" of the quoted law which
states that the same also applies to other "corporations/associations
operating on funds solicited from the general public."
What rule of statutory construction was applied by the
Court resolving the question?

►Rule: WHERE THE LANGUAGE OF A STATUTE IS

CLEAR AND UNAMBIGUOUS
“Legislative intent is determined principally from the language of a
statute. Where the language of a statute is clear and unambiguous,
the law is applied according to its express terms, and interpretation
would be resorted to only where a literal interpretation would be
either impossible or absurd or would lead to an injustice. ”