3. SAAVEDRA V DOJ G.R. No. 93173 September 15, 1993 HONORIO SAAVEDRA, JR., petitioner, vs. DEPARTMENT OF J STI!

E, REGIONA" TRIA" !O RT OF PASIG, #RAN!H $7 %&' GREGORIO M. RAMOS,respondents. Andres B. Soriano for petitioner. The Solicitor General for public respondent. #E""OSI""O, J.: This is a petition for certiorari and prohibition seeking the nullification of Department of Justice (DOJ) Resolution dated 6 ovember !"#" 1 $hich dismissed petitioner%s &etition for Revie$ of the &rovincial &rosecutor%s Resolution dated '( Jul) !"## ( finding probable cause for per*ur) against petitioner, and DOJ Resolution dated + ,arch !""- 3 den)ing reconsideration. On ' Jul) !"#+, the o$ners of &ine &hilippines, .nc. (&&. for brevit)), including private respondent /regorio ,. Ramos, sold their shares of stock to petitioner 0onorio 1aavedra, Jr., for &!.' million pa)able in installments. 2 3,emorandum of 2greement,3 and a 3Deed of 2ssignment3 $ere e4ecuted to evidence the transaction. The former document contained an automatic rescission clause in case an) installment $as not paid on its due date. &a)ments $ere made in the total amount of &"56,5#-.--, leaving a balance of &'65,6'-.-pa)able on !( 1eptember !"#+. On said date, ho$ever, petitioner $ithheld pa)ment for the reason that the sellers failed to compl) $ith their $arranties. evertheless, the balance $as deposited in escro$ sub*ect to release once the $arranties $ere complied $ith. On ( ovember !"#+, petitioner filed in behalf of &&. a verified civil complaint for ) damages against private respondent, alleging that he (petitioner) $as the &resident and principal stockholder of the compan). 6) $a) of ans$er, respondent Ramos 7uestioned petitioner%s capacit) to sue in behalf of &&., claiming that petitioner ceased to be its president $hen the sale of the &&., shares of stock to him $as automaticall) rescinded on !( 1eptember !"#+. 2fter e4ecuting a document entitled 3Recission of ,emorandum of 2greement,3 Ramos and his group filed a case 5 on '- ovember !"#+ $ith the 1ecurities and 84change 9ommission (1R9) pra)ing that the rescission be declared valid and legal. &etitioner filed a motion to dismiss alleging lack of *urisdiction on the part of the 189 but the same $as denied on !! December !"#+. &etitioner $ent to the 1upreme 9ourt $hich, on '! ,arch !"##, upheld the *urisdiction of the 189 and ruled that under 1ec. (, par. (b), of &.D. o. "-':2, the 189 has 3primar) and e4clusive3 *urisdiction over the t$in issues of o$nership and automatic rescission, the) being intracorporate disputes. $ 2ccordingl), proceedings in 9ivil 9ase o. ((';+ $ere suspended. On + December !"#+, during the pendenc) of 189 9ase o. 5'(+, private respondent filed a criminal case for per*ur) against petitioner $ith the &rovincial &rosecutor%s Office in &asig alleging that petitioner per*ured himself $hen he declared in the verification of the complaint in 9ivil 9ase o. ((';+ that he $as the &resident of &&.. 7.n his ans$er:affidavit, petitioner contended that

since the issues of o$nership and automatic rescission $ere still pending and unresolved in the 189, there $as no basis to the charge that he asserted a falsehood b) claiming to be the &resident of the compan) especiall) $hen he $as such per records e4tant $ith the 189. * 6) Resolution dated '( Jul) !"##, the &rovincial &rosecutor found a prima facie case for per*ur) against petitioner and on '6 October !"## filed the corresponding .nformation $ith the Regional Trial 9ourt of &asig, docketed as 9rim. 9ase o. +;"!". 9 The evidence supporting the charge $as the 1ecretar)%s 9ertificate dated ( December !"#+ reflecting private respondent%s election as &resident of &&. b) the former o$ners thereof $hen the) convened follo$ing the automatic revocation of the 3,emorandum of 2greement3 and 3Deed of 2ssignment.3 &etitioner sought a revie$ of the foregoing Resolution $ith public respondent DOJ but the latter subse7uentl) came up $ith the Resolution no$ under consideration, upholding the finding of probable cause for per*ur), ruling as follo$s< 1+ There is probable cause against you for prosecution as evidenced by the Secretary's Certificate dated December 5 !"#$ e%tant on record. This evidence is a mute but elo&uent 'itness affirming the claim of (amos that he is the rightful )resident of ))* . .ndeed, the 1ecretar)%s 9ertificate alluded to readil) sho$s that the original membership of the 6oard $as reconvened and reassembled, proving the fact that the presidenc) of &&. is lodged $ith Ramos. ,oreover, in vie' of the of the rescission of the memorandum of agreement deed of assignment and contract of lease you lost your rights and interest over the shares of stoc+ previously delivered to you by virtue of the sub,ect agreement . 9onse7uentl), )ou like$ise lost )our right to assume management over the corporation &&.. =hen )ou thus stated in )our complaint that )ou $ere &resident of &&., such assertion constituted a la$ful (sic)and deliberate assertion of falsehood (emphasis supplied). 2 ,otion for Reconsideration having proved unsuccessful, petitioner took the instant recourse. &etitioner contends that respondent DOJ gravel) abused its discretion $hen it affirmed the findings of the &rovincial &rosecutor that he made a 3deliberate assertion of falsehood3 on the basis of the conclusion that automatic rescission had set in. >or, the *urisdiction to rule on that 7uestion of automatic rescisssion is lodged $ith the 1ecurities and 84change 9ommission. 1ince the issue has not )et been resolved, the DOJ should have deferred the proceedings. There is merit in the petition. .n Saavedra -r. v. S.C, $e categoricall) pronounced that< . . . the dispute at bar is an intracorporate dispute that has arisen bet$een and among the principal stockholders of the corporation due to the refusal of the defendants (no$ petitioners) to full) compl) $ith $hat has been covenanted b) the parties. 1uch dispute involves a controvers) 3bet$een and among stockholders,3 specificall) as to plaintiffs% right, as stockholders, over unpaid assignment of shares and the validit) of defendants% ac7uisition of the same. .n other $ords, the present case involves an intracorporate dispute as to 'ho has the right to remain and act as o'ners/ stoc+holders of the corporation.

)ursuant to )D 0o. "12/A as amended particularly Section 53b4 thereof the primary and e%clusive ,urisdiction over the present case properly belongs to the S.C . . . (emphasis supplied). 11 ?nder the doctrine of primar) *urisdiction, courts cannot and $ill not determine a controvers) involving a 7uestion $hich is $ithin the *urisdiction of an administrative tribunal 1( having been so placed $ithin its special competence under a regulator) scheme. .n such instances the *udicial process is suspended pending referral to the administrative bod) for its vie$ on the matter in dispute. 13 9onse7uentl), if the courts cannot resolve a 7uestion $hich is $ithin the legal competence of an administrative bod) prior to the resolution of that 7uestion b) the administrative tribunal, especiall) $here the 7uestion demands the e4ercise of sound administrative discretion re7uiring the special kno$ledge, e4perience and services of the administrative agenc) to ascertain technical and intricate matters of fact, and a uniformit) of ruling is essential to compl) $ith the purposes of the regulator) statute administered, 1) much less can the &rovincial &rosecutor arrogate to himself the *urisdiction vested solel) $ith the 189. .n the case at bar, the applicable regulator) statute is &.D. o. "-':2 conferring upon the 189 the legal competence to rule on intracorporate disputes, $hich competence had alread) been upheld b) us in a number of cases. 15 9onsidering that it $as definitel) settled in Saavedra -r. v. S.C that the issues of o$nership and automatic rescission are intracorporate in nature, then the &rovincial &rosecutor, clearl), has no authorit) $hatsoever to rule on the same. .n fact, if $e $ere to uphold the validit) of the DOJ Resolutions brought before us, as respondents suggest, $e $ould be sanctioning a flagrant usurpation or preemption of that primar) and e4clusive *urisdiction $hich 189 alread) en*o)s. Obviousl), it cannot be done. Thus, the &rovincial &rosecutor upon being confronted $ith the issue of $hether the sale of stocks to petitioner $as automaticall) cancelled $hile in the course of determining probable cause for per*ur), should have $ithheld filing an) information against the accused. &ublic respondent DOJ in attempting to *ustif) the action of the &rovincial &rosecutor avers that the latter is empo$ered to make a preliminar) ruling on the matter for the purpose of finding probable cause against petitioner, and that petitioner ma) raise the pendenc) of the issue before the 189 as his defense at the trial proper. =e are not persuaded. The dut) of a prosecutor during preliminar) investigation is not onl) to find evidence to $arrant continuation of the criminal process against an accused. Of e7ual importance, and it has been repeated often enough, is his dut) to protect the innocent from hast), e4pensive and useless trials. 1$ This dut), in addition to the 3primar) and e4clusive3 *urisdiction of the 189, demands the outright termination of the criminal prosecution of petitioner $hich, at the ver) outset, $as alread) bereft of factual and legal bases. .ndeed, the prosecution of petitioner cannot be based on a mere 1ecretar)%s 9ertificate $hich cannot attest to the validit) of the automatic rescission, hence, cannot like$ise settle the 7uestion as to $ho bet$een petitioner and private respondent is the la$ful &resident of &&.. 6esides, the 1ecretar)%s 9ertificate is dated ( December !"#+, $hile the alleged false statement $as made on ( ovember !"#+, or one month before $hen the verified complaint for damages $as filed. @uite obviousl), the truthfulness of a statement, or lack of it, cannot be made to depend on a certificate that $as not e4isting )et $hen the statement in 7uestion $as made. 8ven assuming the validit) of Ramos% election as &resident of &&. as reflected in the 1ecretar)%s

9ertificate, it does not prove that petitioner $as not &resident on ( action $as instituted.

ovember !"#+ $hen the civil

6e that as it ma), the outcome of 189 9ase o. 5'(+ is not determinative of $hether or not the charge for per*ur) against petitioner can prosper. 8ven if private respondent Ramos succeeds in proving the validit) of the automatic rescission of the sale before the 189, it does not necessaril) mean that the criminal prosecution has basis. There are four (;) elements of the crime of per*ur) to be taken into account in determining $hether there is a prima facie case, to $it< (a) that the accused made a statement under oath or e4ecuted an affidavit upon a material matterA (b) that the statement or affidavit $as made before a competent officer, authoriBed to receive and administer oathA (c) that in that statement or affidavit, the accused made a $illful and deliberate assertion of a falsehoodA and, (d) that the s$orn statement or affidavit containing the falsit) is re7uired b) la$ or made for a legal purpose. 17 9learl), mere assertion of a falsehood is not enough to amount to per*ur). The assertion must be deliberate and $illful. =hile there ma) have been a falsehood asserted, $hich $e are not prepared to accept, no evidence e4ists to sho$ that the same $as done deliberatel) and $ilfull). On the contrar), the records tend to sho$ that the assertion $as done in good faith, in the belief that the non:pa)ment of the last installment price $as *ustified b) the sellers% non:compliance $ith their $arranties. 6esides, petitioner alleges that he has deposited the balance in escro$, $hich is not disputed. 9onse7uentl), a finding of probable cause does not follo$ as a matter of course even if 189 decides adversel) against petitioner, for an essential element of the crime appears to be $anting in the case before us, i.e., that the falsehood is $illful and deliberate. ,oreover, as a rule, pleadings need not be verified unless other$ise re7uired b) the Rules of 9ourt, and no rule re7uires complaints for damages, as in the case before us, to be under oath. 1ince the complaint filed b) petitioner against private respondent is not re7uired to be verified, another essential element of the crime of per*ur) is absent, i.e., that the s$orn statement containing the falsit) is re7uired b) la$. 9onse7uentl), petitioner cannot be prosecuted on the basis of an alleged falsehood made in a verified pleading $hich is not mandated b) la$ to be verified. 1* Ceril), there is grave abuse of discretion in the issuance of the Resolution of '( Jul) !"## finding a prima faciecase for per*ur) against petitioner. 2 fortiori, the assailed DOJ Resolutions must be struck do$n as having been issued $ithout sufficient factual and legal bases. 9orrespondingl), the .nformation filed $ith the &asig Trial 9ourt pursuant thereto must like$ise be dismissed. =08R8>OR8, the petition is G(A0T.D. The 7uestioned Resolutions dated 6 ovember !"#" and + ,arch !""- of respondent Department of Justice sustaining the &rovincial &rosecutor in finding probable cause for per*ur) against petitioner are 0566*7*.D and S.T AS*D.. 9onformabl) here$ith, the Regional Trial 9ourt of &asig, 6ranch 6+, or $hichever branch of the same court 9rim. 9ase o. +;"!" entitled 3&eople v. 0onorio 1aavedra, Jr.,3 ma) be assigned, is directed to D.1,.11 the case. The bail bond posted for the provisional libert) of the accused, if an), is cancelled and released. 1O ORD8R8D. Cru8 Davide -r. and 9uiason --. concur.

Gri:o/A&uino -. is on leave.