Republic of the Philippines

SUPREME COURT
Baguio
SECOND DIVISION
G.R. No. 187919

April 25, 2012

RAFAEL H. GALVEZ and KATHERINE L. GUY, Petitioners,

vs.
HON. COURT OF APPEALS and ASIA UNITED BANK, Respondents.
x-----------------------x
G.R. No. 187979
ASIA UNITED BANK, Petitioner,
vs.
GILBERT G. GUY, PHILIP LEUNG, KATHERINE L. GUY, RAFAEL H. GALVEZ and
EUGENIO H. GALVEZ, JR., Respondents.
x-----------------------x
G.R. No. 188030
GILBERT G. GUY, PHILIP LEUNG and EUGENIO H. GALVEZ, JR., Petitioners,
vs.
ASIA UNITED BANK, Respondent.
DECISION
PEREZ, J.:
THE FACTS
In 1999, Radio Marine Network (Smartnet) Inc. (RMSI) claiming to do business under the name
Smartnet Philippines1 and/or Smartnet Philippines, Inc. (SPI),2 applied for an Omnibus Credit
Line for various credit facilities with Asia United Bank (AUB). To induce AUB 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 the following officers and directors occupying the following positions:
Gilbert Guy - Exec. V-Pres./Director
Philip Leung - Managing Director

Katherine Guy - Treasurer

Rafael Galvez - Executive Officer
Eugenio Galvez, Jr. - Chief Financial Officer/Comptroller
Satisfied with the credit worthiness of RMSI, AUB granted it a P250 million Omnibus Credit
Line, under the name of Smartnet Philippines, RMSIs Division. On 1 February 2000, the credit
line was increased to P452 million pesos after a third-party real estate mortgage by Goodland
Company, Inc.,3 an affiliate of Guy Group of Companies, in favor of Smartnet Philippines,4 was
offered to the bank. Simultaneous to the increase of the Omibus Credit Line, RMSI submitted a
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,5 as
evidenced by the letterhead used in its formal correspondences with the bank and the financial
audit made by SGV & Co., an independent accounting firm. Attached to this authority was the
Amended Articles of Incorporation of RMSI, doing business under the name of Smartnet
Philippines, and the Secretarys Certificate of SPI authorizing its directors, Gilbert Guy and
Philip Leung to transact with AUB.6 Prior to this major transaction, however, and, unknown to
AUB, while RMSI was doing business under the name of Smartnet Philippines, and that there
was a division under the name Smartnet Philippines, Gilbert Guy, et al. formed a subsidiary
corporation, the SPI with a paid-up capital of only P62,500.00.
Believing that SPI is the same as Smartnet Philippines - the division of RMSI - AUB granted to
it, among others, Irrevocable Letter of Credit No. 990361 in the total sum of $29,300.00 in favor
of Rohde & Schwarz Support Centre Asia Ptd. Ltd., which is the subject of these consolidated
petitions. To cover the liability of this Irrevocable Letter of Credit, Gilbert Guy executed
Promissory Note No. 010445 in behalf of SPI in favor of AUB. This promissory note was
renewed twice, once, in the name of SPI (Promissory Note No. 011686), and last, in the name of
Smartnet Philippines under Promissory Note No. 136131, bolstering AUBs belief that RMSIs
directors and officers consistently treated this letter of credit, among others, as obligations of
RMSI.
When RMSIs obligations remained unpaid, AUB sent letters demanding payments. RMSI
denied liability contending that the transaction was incurred solely by SPI, a corporation which
belongs to the Guy Group of Companies, but which has a separate and distinct personality from
RMSI. RMSI further claimed that while Smartnet Philippines is an RMSI division, SPI, is a
subsidiary of RMSI, and hence, is a separate entity.
Aggrieved, AUB filed a case of syndicated estafa under Article 315 (2) (a) of the Revised Penal
Code in relation to Section 1 of Presidential Decree (PD) No. 1689 against the interlocking
directors of RMSI and SPI, namely, Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine
L. Guy, and Eugenio H. Galvez, Jr., before the Office of the City Prosecutor of Pasig City.
AUB alleged that the directors of RMSI deceived it into believing that SPI was a division of
RMSI, only to insist on its separate juridical personality later on to escape from its liabilities with
AUB. AUB contended that had it not been for the fraudulent scheme employed by Gilbert Guy,

et al., AUB would not have parted with its money, which, including the controversy subject of
this petition, amounted to hundreds of millions of pesos.
In a Resolution dated 3 April 2006,7 the Prosecutor found probable cause to indict Gilbert G.
Guy, et al. for estafa but dismissed the charge of violation of PD No. 1689 against the same for
insufficiency of evidence, thus:
WHEREFORE, it is recommended that respondents be charged for ESTAFA under Article 315,
par. 2(a) of the Revised Penal Code, and the attached information be filed with the Regional Trial
Court in Pasig City, with a recommended bail of P40,000.00 for each respondent.
It is further recommended that the charge of violation of P.D. 1689 against the said respondents
be dismissed for insufficiency of evidence.8
Accordingly, an Information dated 3 April 20069 was filed against Gilbert Guy, et al. with the
Regional Trial Court of Pasig City.
Both parties, i.e., the AUB and Gilbert Guy, et al., filed their respective Petitions for Review
with the Department of Justice (DOJ) assailing the 3 April 2006 Resolution of the Office of the
City Prosecutor of Pasig City.
In a Resolution dated 15 August 2006,10 the DOJ reversed the City Prosecutors Resolution and
ordered the dismissal of the estafa charges against Gilbert Guy, et al. for insufficiency of
evidence.
The AUBs Motion for Reconsideration was denied, constraining it to assail the DOJ Resolution
before the Court of Appeals (CA).
The CA partially granted AUBs petition in a Decision dated 27 June 2008, thus:
WHEREFORE, the instant petition is GRANTED, finding probable cause against private
respondents for the crime of ESTAFA under Article 315, par 2 (a) of the Revised Penal Code.
The assailed Resolution dated August 15, 2006 of the Department of Justice is REVERSED
AND SET ASIDE, subject to our ruling that the private respondents are not liable under P.D.
1689. The April 3, 2006 Resolution of Assistant City Prosecutor Paudac is hereby
REINSTATED.11
Aggrieved, Gilbert Guy, Philip Leung and Eugenio H. Galvez Jr. (in G.R. No. 188030) and
separately, Rafael Galvez and Katherine Guy (in G.R. No. 187919) filed the present petitions
before this Court assailing the CA Decision which reinstated the City Prosecutors Resolution
indicting them of the crime of estafa. The AUB also filed its own petition before us, docketed as
G.R. No. 187979, assailing the Court of Appeals Decision for dismissing the charge in relation to
Section 1 of PD No. 1689.
Hence, these consolidated petitions.

Gilbert Guy, et al. argue that this case is but a case for collection of sum of money, and, hence,
civil in nature and that no fraud or deceit was present at the onset of the transaction which gave
rise to this controversy, an element indispensable for estafa to prosper.12
AUB, on the other, insists that this controversy is within the scope of PD No. 1689, otherwise
known as syndicated estafa. It contends that Guy, et al., induced AUB to grant SPIs letter of
credit to AUBs damage and prejudice by misleading AUB into believing that SPI is one and the
same entity as Smartnet Philippines which AUB granted an Omnibus Credit Transaction. After
receiving and profiting from the proceeds of the aforesaid letter of credit, Gilbert Guy, et al.
denied and avoided liability therefrom by declaring that the obligation should have been booked
under SPI as RMSI never contracted, nor authorized the same. It is on this premise that AUB
accuses Gilbert Guy, et al. to have committed the crime of estafa under Article 315 (2) (a) of the
Revised Penal Code in relation to PD No. 1689.
At issue, therefore, is whether or not there is probable cause to prosecute Gilbert Guy, et al. for
the crime of syndicated estafa on the basis of fraudulent acts or fraudulent means employed to
deceive AUB into releasing the proceeds of Irrevocable Letter of Credit No. 990361 in favor of
SPI.
Our Ruling
This controversy could have been just a simple case for collection of sum of money had it not
been for the sophisticated fraudulent scheme which Gilbert Guy, et al. employed in inducing
AUB to part with its money.
Records show that on 17 February 1995, Radio Marine Network, Inc. (Radio Marine) amended
its corporate name to what it stands today Radio Marine Network (Smartnet), Inc. This was a
month after organizing its subsidiary corporation the Smartnet Philippines, Inc. with a capital
of only P62,500.00.13 A year earlier, Gilbert Guy, et al., established Smartnet Philippines as a
division of Radio Marine under which RMSI operated its business.
It was, however, only on 26 March 1998, when the Securities and Exchange Commission
approved the amended corporate name, and only in October 1999 did RMSI register Smartnet
Philippines as its business name with the Department of Trade and Industry.14
It is in this milieu that RMSI transacted business with AUB under the name Smartnet Philippines
and/or SPI.
Article 315 (2) (a) of the Revised Penal Code provides:
Art. 315. Swindling (estafa) any person who shall defraud another by any of the means
mentioned herein below x x x :
xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or
simultaneous with the commission of the fraud:
(a) By using a fictitious name, or falsely pretending to possess power, influence, qualifications,
property, credit, agency, business or imaginary transactions; or by means of other similar
deceits. x x x.
The elements of estafa by means of deceit are the following:
a. That there must be a false pretense, fraudulent act or fraudulent means;
b. That such false pretense, fraudulent act or fraudulent means must be made or executed prior to
or simultaneously with the commission of the fraud;
c. That the offended party must have relied on the false pretense, fraudulent act, or fraudulent
means, that is, he was induced to part with his money or property because of the false pretense,
fraudulent act, or fraudulent means;
d. That as a result thereof, the offended party suffered damage.15
First, Gilbert Guy, Philip Leung, Katherine Guy, Rafael Galvez and Eugene Galvez, Jr.,
interlocking directors of RMSI and SPI, represented to AUB in their transactions that Smartnet
Philippines and SPI were one and the same entity. While Eugene Galvez, Jr. was not a director of
SPI, he actively dealt with AUB in his capacity as RMSIs Chief Financial Officer/Comptroller
by falsely representing that SPI and RMSI were the same entity. Gilbert Guy, Philip Leung,
Katherine Guy, Rafael Galvez, and Eugene Galvez, Jr. used the business names Smartnet
Philippines, RMSI, and SPI interchangeably and without any distinction. They successfully did
this by using the confusing similarity of RMSIs business name, i.e., Smartnet Philippines its
division, and, Smartnet Philippines, Inc. the subsidiary corporation. Further, they were able to
hide the identity of SPI, by having almost the same directors as that of RMSI. In order to let it
appear that SPI is the same as that of Smartnet Philippines, they submitted in their application
documents of RMSI, including its Amended Articles of Incorporation,16 third-party real estate
mortgage of Goodland Company17 in favor of Smartnet Philippines, and audited annual financial
statement of SGV & Co.18 Gilbert Guy, et al. also used RMSI letterhead in their official
communications with the bank and the contents of these official communications19 conclusively
pointed to RMSI as the one which transacted with the bank.
These circumstances are all indicia of deceit. Deceit is the false representation of a matter of fact
whether by words or conduct, by false or misleading allegations, or by concealment of that
which should have been disclosed which deceives or is intended to deceive another so that he
shall act upon it to his legal injury.20
Second, the intent to deceive AUB was manifest from the start. Gilbert Guy et al. laid down first
all the necessary materials they need for this deception before defrauding the bank by first
establishing Smartnet Philippines as a division of Radio Marine under which Radio Marine
Network Inc. operated its business.21 Then it organized a subsidiary corporation, the SPI, with a

capital of only P62,000.00.22 Later, it changed the corporate name of Radio Marine Network Inc.
into RMSI.23
Undoubtedly, deceit here was conceived in relation to Gilbert Guy, et al.s transaction with AUB.
There was a plan, documented in corporations papers, that led to the defraudation of the bank.
The circumstances of the directors and officers acts in inserting in Radio Marine the name of
Smartnet; the creation of its division Smartnet Philippines; and its registration as business
name as Smartnet Philippines with the Department of Trade and Industry, together with the
incorporation of its subsidiary, the SPI, are indicia of a pre-conceived scheme to create this
elaborate fraud, victimizing a banking institution, which perhaps, is the first of a kind in
Philippine business.
We emphasize that fraud in its general sense, is deemed to comprise anything calculated to
deceive, including all acts, omissions, and concealment involving a breach of legal duty or
equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which an
undue and unconscientious advantage is taken of another.24 It is a generic term embracing all
multifarious means which human ingenuity can device and which are resorted to by one
individual to secure an advantage over another by false suggestions or by suppression of truth
and includes all surprise, trick, cunning, dissembling and any unfair way by which another is
cheated.25
As early as 1903, in U.S. v. Mendezona,26 we held that an accused may be convicted for estafa if
the deceit of false pretense is committed prior to or simultaneous with fraud and is the efficient
cause or primary consideration which induced the offended party to part with his money or
property.
Third, AUB would not have granted the Irrevocable Letter of Credit No. 990361, among others,
had it known that SPI which had only P62,500.00 paid-up capital and no assets, is a separate
entity and not the division or business name of RMSI. Gilbert Guy, et al. however, contends that
the transaction subject in this controversy is a letter of credit and not a loan, hence, SPIs capital
does not matter.27 This was also the contention of the DOJ in reversing the Resolution of the City
Prosecutors Office of Pasig. The DOJ contended that:
It is also noted that the subject transaction, one of the several series of transactions between
complainant AUB and SPI, is not a loan transaction. It is a letter of credit transaction intended to
facilitate the importation of goods by SPI. The allegation as to the lack of capitalization of SPI is
therefore immaterial and irrelevant since it is a letter of credit transaction. The seller gets paid
only if it delivers the documents of title over the goods to the bank which issued the letter of
credit, while the buyer/importer acquires title to the goods once it reimburses the issuing bank.
The transaction secures the obligation of the buyer/importer to the issuing bank. 28
It is true that ordinarily, in a letter of credit transaction, the bank merely substitutes its own
promise to pay for the promise to pay of one of its customers, who in turn promises to pay the
bank the amount of funds mentioned in the letters of credit plus credit or commitments fees
mutually agreed upon. Once the issuing bank shall have paid the beneficiary after the latters

compliance with the terms of the letter of credit, the issuing bank is entitled to reimbursement for
the amount it paid under the letter of credit.29
In the present case, however, no reimbursement was made outright, precisely because the letter
of credit was secured by a promissory note executed by SPI. The bank would have not agreed to
this transaction had it not been deceived by Gilbert Guy, et al. into believing the RMSI and SPI
were one and the same entity. Guy and his cohorts acts in (1) securing the letter of credit
guaranteed by a promissory note in behalf of SPI; and, (2) their act of representing SPI as
RMSIs Division, were indicia of fraudulent acts because they fully well know, even before
transacting with the bank, that: (a) SPI was a separate entity from Smartnet Philippines, the
RMSIs Division, which has the Omnibus Credit Line; and (b) despite this knowledge, they
misrepresented to the bank that SPI is RMSIs division. Had it not for this false representation,
AUB would have not granted SPIs letter of credit to be secured with a promissory note because
SPI as a corporation has no credit line with AUB and SPI by its own, has no credit standing.
Fourth, it is not in dispute that the bank suffered damage, which, including this controversy,
amounted to hundreds of millions of pesos.
It is worth emphasizing that under Section 1, Rule 112 of the Revised Rules on Criminal
Procedure, the function of a preliminary investigation is to determine "whether there is a
sufficient ground to engender a well-grounded belief that a crime x x x has been committed and
that the respondent is probably guilty thereof and should be held for trial."30
A finding of probable cause needs only to rest on evidence showing that more likely than not, the
accused committed the crime.31 Preliminary investigation is not the occasion for the full and
exhaustive display of the parties' evidence.32 It is for the presentation of such evidence only as
may engender a well-founded belief that an offense has been committed and that the accused is
probably guilty thereof.33 The validity and merits of a party's accusation or defense, as well as
admissibility of testimonies and evidence, are better ventilated during the trial proper.34
We, therefore, sustain the findings of the CA and the City Prosecutors Resolution finding that
probable cause exists against Gilbert Guy, et al. for the crime of estafa under Article 315 (2)(a)
of the Revised Penal Code and that Gilbert Guy, et al. are probably guilty thereof and should be
held for trial. AUBs voluminous documents submitted to this Court overcome this difficulty and
established that there is sufficient ground to engender a well-grounded belief that a crime has
been committed and that the respondents are probably guilty thereof and should be held for trial.
Lest it be misunderstood, we reiterate that this Courts finding of probable cause is grounded on
fraud committed through deceit which surrounded Gilbert Guy, et al. transaction with AUB, thus,
violating Article 315 (2) (a) of the Revised Penal Code; it is neither their act of borrowing money
and not paying them, nor their denial thereof, but their very act of deceiving AUB in order for the
latter to part with its money. As early as the Penal Code of Spain, which was enforced in the
Philippines as early as 1887 until it was replaced by the Revised Penal Code in 1932, the act of
fraud through false pretenses or similar deceit was already being punished. Article 335 of the
Penal Code of Spain punished a person who defrauded another "by falsely pretending to possess

any power, influence, qualification, property, credit, agency or business, or by means of similar
deceit."35
Anent the issue as to whether or not Gilbert Guy, et al. should be charged for syndicated estafa in
relation to Section 1 of PD No. 1689, which states that:
SEC 1. Any person or persons who shall commit estafa or other forms of swindling as defined in
Article 315 and 316 of the Revised Penal Code, as amended, shall be punished by life
imprisonment to death if the swindling (estafa) is committed by a syndicate consisting of five or
more persons formed with the intention of carrying out the unlawful or illegal act, transaction,
enterprise or scheme, and the defraudation results in the misappropriation of moneys contributed
by stockholders, or members of rural banks, cooperatives, "samahang nayon(s)", or farmers
associations, or of funds solicited by corporations/ associations from the general public.
We hold that the afore-quoted law applies to the case at bar, for the following reasons:
Under Section 1 of PD No. 1689, the elements of syndicated estafa are: (a) estafa or other forms
of swindling as defined in Artilce 315 and 316 of the Revised Penal Code is committed; (b) the
estafa or swindling is committed by a syndicate of five or more persons; and (c) defraudation
results in the misappropriation of moneys contributed by stockholders, or members of rural
banks, cooperatives, "samahang nayon[s]," or farmers associations or of funds solicited by
corporations/associations from the general public.36
First, as defined under Section 1 of PD No. 1689, a syndicate "consists of five or more persons
formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or
scheme." Five (5) accused, namely, Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine
L. Guy, and Eugenio H. Galvez, Jr. were, (a) all involved in the formation of the entities used to
defraud AUB; and (b) they were the officers and directors, both of RMSI and SPI, whose
conformities paved the way for AUB to grant the letter of credit subject of this case, in AUBs
honest belief that SPI, as Gilbert Guy, et al. represented, was a mere division of RMSI. As
already discussed, although Eugenio Galvez, Jr. was not a director of SPI, he, together with
Gilbert Guy and Philip Leung, actively participated in the scheme through their signed
correspondences with the bank and their attendance in the meetings with executives of AUB.37
Rafael Galvez and Katherine Guy, on the other hand, were the directors of RMSI and SPI who
caused and authorized Gilbert Guy and Philip Leung to transact with AUB.38
Second, while these corporations were established presumably in accordance with law, it cannot
be denied that Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio
H. Galvez, Jr. used these corporations to carry out the illegal and unlawful act of misrepresenting
SPI as a mere division of RMSI, and, despite knowing SPIs separate juridical personality,
applied for a letter of credit secured by SPIs promissory note, knowing fully that SPI has no
credit line with AUB. The circumstances of the creation of these entities and their dealings with
the bank reveal this criminal intent to defraud and to deceive AUB.
Third, the fact that the defraudation of AUB resulted to misappropriation of the money which it
solicited from the general public in the form of deposits was substantially established.39 Section

3.1 of the General Banking Law defines banks as "entities engaged in the lending of funds
obtained in the form of deposits." The Old General Banking Act (R.A. No. 337) gave a fuller
picture of the basic banking function of obtaining funds from the public by way of deposits and
the lending of these funds as follows:
Sec 2. Only entities duly authorized by the Monetary Board of the Central Bank may engage in
the lending of funds obtained from the public through the receipt of deposits of any kind, and
all entities regularly conducting such operations shall be considered as banking institutions,
xxxx.
Gilbert Guy et al. want this Court to believe that AUB, being a commercial bank, is beyond the
coverage of PD No. 1689. We hold, however, 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." This is
precisely the very same scheme that PD No. 1689 contemplates that this species of estafa "be
checked or at least be minimized by imposing capital punishment involving funds solicited by
corporations/associations from the general public" because "this erodes the confidence of the
public in the banking and cooperative system, contravenes public interest and constitutes
economic sabotage that threatens the stability of the nation."401wphi1
Hence, for the stated reasons, we applied the law in People v. Balasa,41 a non-stock/non-profit
corporation the Panata Foundation of the Philippines, Inc. We held that PD No. 1689 also
applies to other corporations/associations operating on funds solicited from the general public.
In People v. Romero,42 we also applied the law to a stock corporation engaged in marketing, the
Surigao San Andres Industrial Development Corporation. Likewise, in People v. Menil,43 we
applied the law to another marketing firm known as ABM Appliance and Upholstery.
In these cited cases, the accused used the legitimacy of their entities to perpetrate their unlawful
and illegal acts. We see no reason not to apply this law to a banking institution, a corporation
imbued with public interest, when a clear reading of the PD 1689 reveals that it is within its
coverage.
WHEREFORE, the Decision of the Court of Appeals dated 27 June 2008 in CA-G.R. SP No.
97160 is hereby AFFIRMED with MODIFICATION that Gilbert G. Guy, Rafael H. Galvez,
Philip Leung, Katherine L. Guy and Eugenio H. Galvez, Jr. be charged for SYNDICATED
ESTAFA under Article 315 (2) (a) of the Revised Penal Code in relation to Section 1 of
Presidential Decree No. 1689.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice

WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

BIENVENIDO L. REYES
Associate Justice
AT T E S T AT I O N
I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
C E R T I F I C AT I O N
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions
in the above Decision were reached in consultation before the case was assigned to the writer of
the opinion of the Court.
RENATO C. CORONA
Chief Justice

Footnotes
1

Rollo in G.R. No. 188030, p. 111.

In Civil Case No. 68366, RMSI filed a complaint, claiming that it was doing
business under the name Smartnet Philippines and Smartnet Philippines, Inc. Id.
at 486.
3

Goodland Co., Inc. v Asia United Bank, G.R. Nos. 195546 and 195561, 14
March 2012.
4

Rollo in G.R. No. 188030, p. 471.

Id. at 472.

Id.

Rollo in G.R. No. 187919, pp. 137-148.

Id. at 148.

Filed before the Regional Trial Court of Pasig City, entitled People of the
Philippines v. Gilbert Guy et al., Branch 57, docketed as Criminal Case No.
133010-PSG. Id. at 53
10

Rollo in G.R. No. 188030, p. 398.

11

Penned by Associate Justice Vicente Veloso, with Associate Justices Rebecca de

Guia-Salvador and Apolinario D. Bruselas, Jr., concurring. Rollo in G.R. No.
187919, pp. 8-41.
12

Rollo in G.R. No. 188030, p. 16.

13

Incorporated on 24 January 1995. Rollo in G.R. No. 187919, p. 294.

14

Rollo in G.R. No. 188030, p. 111.

15

Montano v. People, 423 Phil. 141, 147-148 (2001).

16

Rollo in G.R. No. 188030, pp. 458-467.

17

Id. at 114.

18

Id. at 494-502.

19

Id. at. 481, 492-493, 502, 505, 507-512.

20

People v. Balasa, 356 Phil. 362. 382-383 (1998).

21

Rollo in G.R. No. 188030, p. 381.

22

Id. at 89-100.

23

Id. at 101.

24

Id. at 382.

25

Id. citing Alleje v. Court of Appeals, G.R. No. 107152, 25 January 1995, 240
SCRA 495, 500 citing further Blacks Law Dictionary., 4th Edition., p. 788
(1951).

26

2 Phil. 353 (1903).

27

Rollo in G.R. No. 188030, p. 22.

28

Resolution of the Department of Justice. Rollo in G.R. No. 188030, p. 201.

29

Prudential Bank v. IAC, 216 SCRA 257 (1992).

30

Webb v. Hon. De Leon, 317 Phil. 758. 777 (1995).

31

Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Hon.

Desierto, 375 Phil. 697 (1999).
32

Id.

33

Id.

34

Id.

35

Lozano v. Martinez, G.R. No. 63419, 18 December 1986, 146 SCRA 323, 332.

36

People v. Balasa,supra note 20 at 395-396.

37

Rollo in G.R. No. 188030, pp. 149-160.

38

Id. at 115.

39

Section 95. Definition of Deposit Substitutes. The term deposit substitutes is

defined as an alternative form of obtaining funds from the public, other than
deposits, xxx.
40

Preamble of PD No 1689:
WHEREAS, there is an upsurge in the commission of swindling and other
forms of frauds in rural banks, cooperatives, "samahang nayon (s)", and
farmers' associations or corporations/associations operating on funds
solicited from the general public; WHEREAS, such defraudation or
misappropriation of funds contributed by stockholders or members of such
rural banks, cooperatives, "samahang nayon(s)", or farmers' associations,
or of funds solicited by corporations/associations from the general public,
erodes the confidence of the public in the banking and cooperative system,
contravenes the public interest, and constitutes economic sabotage that
threatens the stability of the nation;
WHEREAS, it is imperative that the resurgence of said crimes be checked,
or at least minimized, by imposing capital punishment on certain forms of

swindling and other frauds involving rural banks, cooperatives, "samahang

nayon(s)", farmers' associations or corporations/associations operating on
funds solicited from the general public;
41

Supra note 20.

42

365 Phil. 531 (1999).

43

G.R. Nos. 11504-66, 12 September 2000, 340 SCRA 125.

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