Republic of the Philippines

COURT OF APPEALS
Manila

FIFTEENTH DIVISION

PJH LENDING CORPORATION, CA-G.R. SP No. 164203

Petitioner,

-versus -
Members:

DEPARTMENT OF JUSTICE, CORALES, P. B.,

ATTY. ALEX L. MONTECLAR, Chairperson
ATTY. FREDERICK A. CALPATURA, C. B., and
GEMENTIZA, ATTY. MARK JORGE-WAGAN, W. B., JJ.
PHILIPP H. OPADA, ATTY.
ROSELO M. ALFAR, WILMA L.
ZAMORA, IAN PAUL Z.
ESTREMOS, MARK LESTER Z.
ESTREMOS and FRITZ Promulgated:
SEMBRINO,
Respondents. March 15, 2023
======================================================

DECISION
CALPATURA, J.:

Before Us is the Petition for Certiorari1 filed by PJH Lending

Corporation (PJH), assailing the twin Resolutions dated September 18,
20172 and October 4, 2019,3 rendered by the Department of Justice (DOJ) in
case number OSEC-PR-CEBRP-1-220817-001. The DOJ Resolutions
denied the appeal and motion for reconsideration interposed by PJH.

1 Rollo, pp. 6-46.

2 Id., pp. 48-50. Penned by Undersecretary Raymund L. Mecate.
3 Id., pp. 52-54. Penned by Assistant Secretary Sergio E. Yap.
CA-G.R. SP No. 164203 Page 2
DECISION

The Facts

PJH is a corporation engaged in the business of lending. It was named

after its founder and de facto leader, Peter John Holden (Holden), who died
on January 30, 2012.4 At the time of Holden's death, PJH's Board of
Directors consisted of Holden, private respondent and allegedly Holden's
common-law wife, Wilma Zamora (Zamora), Rosali Canlom Farley
(Farley), Canuto T. Barte, Jr. (Barte), and Bernard R. Twitchett (Twitchett).5

Chaos ensued upon Holden's death. PJH, through Barte, who is allied
with Farley and Twitchett, alleged that Zamora conspired with her co-
respondents to take over the company. Meanwhile, Zamora claimed that it
was the Farley-Twitchett group which forcefully took over the company.

Clear signs of conflict started when Zamora allegedly sold some of

her shares to her co-respondents, her sons Ian Paul Z. Estremos and Mark
Lester Z. Estremos, and her friends, Fritz Sembrino and Atty. Roselo Alfar. 6
The transfer of shares, however, was not registered in the Stock and Transfer
Book of the corporation. Zamora alleged that the then Corporate Secretary,
Farley, refused to register the transfer. Meanwhile, Barte maintained that
Zamora failed to produce the required supporting documents. 7 Subsequently,
Zamora, as the then President of the corporation, instructed Farley to notify
all stockholders of the annual stockholders' meeting to be held on March 31,
2012, where a new Board of Directors will be elected. Included in the list to
be notified are the transferees of Zamora's shares.8

On March 31, 2012, Zamora, her two sons, Fritz Sembrino, and Atty.
Roselo Alfar arrived at the principal place of business of PJH at Eastern
Shipping Lines Building, M.J. Cuenco Avenue, Cebu City. They were
accompanied by their lawyers, co-respondents Atty. Alex Monteclar and
Atty. Frederick Gementiza. Despite the protestations of the other
stockholders, the party of Zamora was able to enter the PJH premises.9

On the other hand, Zamora claimed that the Twitchett-Farley group

posted armed sentries to prevent her entry to the premises. However, her
lawyers were able to negotiate with Farley's former counsel, and they were
allowed inside.10

4 Rollo, p. 550.
5 Id., p. 11.
6 Id., p. 61.
7 Id., p. 62.
8 Id., p. 63.
9 Id.
10 Id., p. 552.
CA-G.R. SP No. 164203 Page 3
DECISION

The stockholders' meeting then took place. At that time, the

stockholders on record, based on the Stock and Transfer Book, were Holden
with 14,499,900 shares, Twitchett with 100 shares, Farley with 10,874,983
shares, Barte with 15 shares, Zamora with 10,874,992 shares, and a certain
Romulo Canlom with 10 shares.11

Zamora claimed that, while she was physically present in the meeting,
she did not attend the 'farce' election that the Twitchett-Farley group was
orchestrating. Her presence was to preside over the election which she
called, not the one being conducted by the Twitchett-Farley group.
Consequently, she claimed that the election conducted at that time, wherein
the Twitchett-Farley group elected themselves as members of the Board, was
invalid for lack of quorum.12

Afterwards, Zamora started her own stockholders' meeting on the

same premises. She alleged that when attendance was called, Barte, Farley,
and Twitchett, while physically present, refused to acknowledge the call, and
so they were deemed not attending.13 In that meeting, Zamora and her co-
respondents elected themselves as members of the Board.14

Thus, after March 31, 2012, PJH effectively had two Boards of
Directors. On the one hand is Zamora's, with her as President and
Chairperson, Mark Lester Estremos as Treasurer, Atty. Roselo Alfar as
Secretary, and Ian Paul Estremos and Fritz J. Sembrano as regular
members.15 On the other hand was the Twitchett-Farley Board with
Twitchett as Chairperson, Barte as President, Farley as Corporate Secretary,
and Romulo Canlom as Treasurer.16 Each group was able to take control of
specific branches of PJH and their dispute spawned various intra-corporate
cases pending before the Special Commercial Court of Cebu City.17

Aside from the foregoing, PJH, through Barte, instituted a criminal

complaint against Zamora and the other private respondents for four counts
of falsification of public documents and use of falsified documents for
allegedly conspiring together in falsifying and using the General Information
Sheets (GIS) of PJH for the years 2012, 2013, 2014, and 2015. The alleged
falsification pertains to the false inclusion of the Estremoses, Alfar, and
Sembrano as stockholders and the fallacious number of shares of Zamora.18

11 Rollo, pp. 62-63.

12 Id., p. 552.
13 Id.
14 Id., p. 553.
15 Id.
16 Id., p. 63.
17 Id., pp. 555-556.
18 See Rollo, pp. 207-223.
CA-G.R. SP No. 164203 Page 4
DECISION

The complaint with respect to the 2012 GIS was resolved separately,
while the complaints for 2013, 2014, and 2015 GIS were consolidated. 19 The
consolidated case is now the precursor of this instant petition.

The Ruling of the Office of the City Prosecutor

In its Joint Resolution20 dated May 19, 2016, the Office of the City
Prosecutor (OCP) of Cebu City dismissed the complaints for falsification
and use of falsified documents. In so ruling, the OCP adopted the holding in
the 2012 GIS complaint, wherein it was found that there was an absence of
malice or deliberate intent on the part of Zamora and the other respondents.21
Additionally, the evidence of PJH failed to show the falsehood in the subject
GIS.22

The OCP relied on the pending intra-corporate cases where, during

that time, there was yet no categorical determination which between the two
factions should be considered valid. In fact, the OCP relied on an order of
the Special Commercial Court in one of the cases “that each faction should
continue to handle temporarily the operations of those branches which were
under their control.” Thus, the OCP reasoned that the respective output of
each faction should be “treated equally valid, lawful, and authorized.”23

PJH sought reconsideration, but the same was denied in another Joint
Resolution.24

PJH then filed a Petition for Review with the Office of the Regional
Prosecutor.25

The Ruling of the Office of the Regional Prosecutor

The Office of the Regional Prosecutor (ORP) denied the appeal

brought by PJH in its Resolution dated May 29, 2017.26 It concluded thus:

x x x To the mind of this Office[,] however, the significance of

the fact that there is yet no Court ruling on issues that relate to the
averred rights of the contending parties in the affairs of PJH and the
enforcement of the same under the Corporate (sic) Code is the
inexorable conclusion that under the present circumstance[,] the
19 See Rollo, p. 159.
20 Rollo, p. 160. Penned by Prosecutor III Naruzen J. Delfin-Lorete, approved by City Prosecutor Liceria
S. Lofranco-Rabillas.
21 Id., p. 159.
22 Id.
23 Id.
24 Id., pp. 161-162.
25 Id., pp. 114-153.
26 Id., pp. 105-110.
CA-G.R. SP No. 164203 Page 5
DECISION

questioned entries in the assailed GIS could not be deemed as

absolutely false. If the statement is not altogether false, there being
some colorable truth in it, falsification is not committed. 27

PJH once again moved for reconsideration, which was also denied by
the ORP in a Resolution dated July 25, 2017.28

Unconvinced, PJH appealed to the DOJ by way of Petition for

Review.29

The Ruling of the Department of Justice

In the assailed Resolution dated September 18, 2017, the DOJ

dismissed the appeal for being the wrong remedy. It held that under
Department Circular No. 70-A, resolutions of the ORP issued in the exercise
of its appellate jurisdiction shall be with finality and, therefore,
unappealable. With respect to the merits, the DOJ found that the ORP did
not act with grave abuse of discretion, which would warrant the reversal of
its resolution.30

PJH prayed for reconsideration, which the DOJ denied in the

Resolution dated October 4, 2019. In denying reconsideration, the DOJ
focused its discussion on the merits of the case and found that the
accusations against the respondents are not supported by strong and
convincing evidence.31

The Issues

Undeterred by the repeated denial of its pleas, PJH comes before this
Court, on certiorari, raising the following issues:

1. RESPONDENT DOJ COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN IT UPHELD THE
RESOLUTIONS OF THE CITY PROSECUTOR OF CEBU
AND THE REGIONAL STATE PROSECUTOR VII,
FINDING THE ISSUES IN THE INTRA-CORPORATE
CASES BETWEEN THE CONTENDING PARTIES AS
PREJUDICIAL QUESTIONS TO THE PROSECUTION
OF THE CRIME OF FALSIFICATION AND USE OF

27 Rollo, pp. 109-110.

28 Id., pp. 111-113.
29 Id., pp. 56-102.
30 Id., p. 49.
31 Id., p. 53.
CA-G.R. SP No. 164203 Page 6
DECISION

PUBLIC DOCUMENTS AGAINST PRIVATE

RESPONDENTS WHEN SUCH DO NOT ACTUALLY
EXIST.

2. THE CLAIM OF PRIVATE RESPONDENTS

(EXCEPT RESPONDENTS ATTY. ALEX L.
MONTECLAR, ATTY. PHILIPP H. OPADA AND ATTY.
FREDERICK GEMENTIZA) OF BEING BONA FIDE
STOCKHOLDERS, MEMBERS OF THE BOARD AND
OFFICERS OF PETITIONER, HAVE BEEN ALREADY
PROVEN AS WITHOUT FACTUAL AND LEGAL BASIS
IN THE RECENT IMMEDIATELY EXECUTORY
ORDERS OF THE COMMERCIAL COURT IN THE
INTRA-CORPORATE CASES BETWEEN THE
CONTENDING PARTIES.

3. THE TWIN CLAIMS OF PRIVATE

RESPONDENT WILMA ZAMORA OF BEING THE
ALLEGED COMMON LAW WIFE OF THE LATE
PETER JOHN HOLDEN AND OF BEING ENTITLED TO
ONE-HALF OF HIS SHAREHOLDINGS WITH
PETITIONER (WHICH ARE THE BASIS OF HER
CLAIM OF BEING ALREADY THE OWNER THEREOF)
HAVE BEEN ALREADY DISMISSED WITH FINALITY
BY THE DIFFERENT COURTS.

4. EVEN ON THE ASSUMPTION THAT THERE IS

NO FINDING YET THAT PRIVATE RESPONDENTS
(EXCEPT RESPONDENTS ATTY. ALEX L.
MONTECLAR, ATTY. PHILIPP H. OPADA AND ATTY.
FREDERICK GEMENTIZA) ARE NOT BONA FIDE
STOCKHOLDERS OF PETITIONER, SUCH STILL UN-
ESTABLISHED CLAIM CAN NOT BE A SOURCE OF A
RIGHT FOR THEM TO TINKER THE SUBJECT
GENERAL INFORMATION SHEETS OF PETITIONER
FOR THIS WOULD MAKE THEM ABOVE THE LAW
AND THE PROCESSES OF THE COURTS.

5. RESPONDENT DOJ'S TOLERANCE OF THE

COMPLAINED CRIMINAL ACTS OF PRIVATE
RESPONDENTS HAVE THE EFFECT OF PUTTING
THEM ABOVE THE LAW AND PROCESSES OF THE
COURTS.32

32 Rollo, pp. 30-31.

CA-G.R. SP No. 164203 Page 7
DECISION

The Ruling of this Court

The petition is not impressed with merit.

No grave abuse of discretion

There are three requisites that must concur in order for the special
civil action of certiorari to prosper: (1) the writ is directed against a tribunal,
a board or any officer exercising judicial or quasi-judicial functions; (2) such
tribunal board or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction;
and (3) there is no appeal or any plain, speedy and adequate remedy in the
ordinary course of law.33

The second requisite, grave abuse of discretion, has been defined as

the capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction, or an exercise of power in an arbitrary and despotic manner by
reason of passion or personal hostility, or an exercise of judgment so patent
and gross as to amount to an evasion of a positive duty or to a virtual refusal
to perform the duty enjoined, or to act in a manner not at all in
contemplation of law.34 There is grave abuse of discretion when acts are
done "contrary to the Constitution, the law or jurisprudence," or when they
are executed in a capricious manner which amounts to lack of jurisdiction.35

In this case, the DOJ's dismissal of PJH's Petition for Review is not
tainted with grave abuse of discretion. As it correctly ruled, DOJ Department
Circular No. 70-A, dated July 10, 2000, governs its appellate process at that
time,36 which provides:

DEPARTMENT CIRCULAR NO. 70-A

SUBJECT: Delegation of Authority to Regional State

Prosecutors to Resolve Appeals in Certain Cases

In order to expedite the disposition of appealed cases governed

by Department Circular No. 70 dated July 3, 2000 ("2000 NPS RULE
ON APPEAL"), all petitions for review of resolutions of

33 Global Medical Center of Laguna, Inc. v. Ross Systems International, Inc., G.R. No. 230112, May 11,
2021.
34 Duyon v. The Former Special Fourth Division of the Court of Appeals, G.R. No. 172218, November 26,
2014.
35 Bayan Muna Representatives Neri Javier Colmenares and Carlos Isagani Zarate v. Energy Regulatory
Commission, G.R. No. 210245, August 3, 2021.
36 DOJ DC No. 70-A has been strengthened by DC No. 018-14, dated June 18, 2014, (see Urmaza v.
Rojas, G.R. No. 240012, January 22, 2020), and has been further amended by DC No. 27, dated July
13, 2022.
CA-G.R. SP No. 164203 Page 8
DECISION

Provincial/City Prosecutors in cases cognizable by the Metropolitan

Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts, except in the National Capital Region, shall be filed with the
Regional State Prosecutor concerned who shall resolve such
petitions with finality in accordance with the pertinent rules
prescribed in the said Department Circular.

The foregoing delegation of authority notwithstanding, the

Secretary, of Justice may, pursuant to his power of supervision and
control over the entire National Prosecution Service and in the interest
of justice, review the resolutions of the Regional State Prosecutors in
appealed cases.

x x x x (Emphasis supplied)

Jurisprudence further explains:

A reading of the foregoing provisions shows that the prevailing

appeals process in the NPS with regard to complaints subject of
preliminary investigation would depend on two factors, namely: where
the complaint was filed, i.e., whether in the NCR or in the provinces;
and which court has original jurisdiction over the case, i.e., whether or
not it is cognizable by the MTCs/MeTCs/MCTCs. Thus, the rule shall
be as follows:

(a) If the complaint is filed outside the NCR and is

cognizable by the MTCs/MeTCs/MCTCs, the ruling
of the OPP may be appealable by way of petition for
review before the ORSP, which ruling shall be with
finality;

(b) If the complaint is filed outside the NCR and is not

cognizable by the MTCs/MeTCs/MCTCs, the ruling of
the OPP may be appealable by way of petition for review
before SOJ, which ruling shall be with finality;

(c) If the complaint is filed within the NCR and is

cognizable by the MTCs/MeTCs/MCTCs, the ruling of
the OCP may be appealable by way of petition for review
before the Prosecutor General, whose ruling shall be
with finality;

(d) If the complaint is filed within the NCR and is not

cognizable by the MTCs/MeTCs/MCTCs, the ruling of
the OCP may be appealable by way of petition for review
before the SOJ, whose ruling shall be with finality;

(e) Provided, that in instances covered by (a) and (c), the

SOJ may, pursuant to his power of control and
CA-G.R. SP No. 164203 Page 9
DECISION

supervision over the entire National Prosecution Service,

review, modify, or reverse the ruling of the ORSP or the
Prosecutor General, as the case may be. 37 (Emphasis
supplied)

In this case, the complaint was filed in Cebu City, which is outside the
National Capital Region. Further, falsification by private individuals under
Article 172 of the Revised Penal Code is punished with prision
correccional, in its maximum and medium period. Use of falsified
documents under the same article is punished with the penalty next lower in
degree.38 Prision correccional has a maximum duration of six years,39 which
is cognizable by the MTC.40

Thus, the resolution of the OCP is appealable to the ORP through a

petition for review, which is what PJH actually did. However, the ORP's
decision on the appeal is final and unappealable, thus, cannot be elevated to
the DOJ by way of a petition for review.

Consequently, the DOJ committed no error, much more grave abuse of

discretion, in dismissing the Petition for Review filed by PJH,
notwithstanding the DOJ's discussion concerning the merits of the case.

WHEREFORE, premises considered, the Petition for Certiorari is

DISMISSED. The Resolutions dated September 18, 2017 and October 4,
2019, rendered by the Department of Justice in case number OSEC-PR-
CEBRP-1-220817-001 are AFFIRMED.

SO ORDERED.

ORIGINAL SIGNED
CARLITO B. CALPATURA
Associate Justice
37 Cariaga v. Sapigao, G.R. No. 223844, June 28, 2017.
38 Art. 172. Falsification by private individual and use of falsified documents. - The penalty of prisión
correccional in its medium and maximum periods and a fine of not more than One million pesos
(₱1,000,000) shall be imposed upon:
1. Any private individual who shall commit any of the falsifications enumerated in the next preceding
article in any public or official document or letter of exchange or any other kind of commercial
document;
2. Any person who, to the damage of a third party, or with the intent to cause such damage, shall in any
private document commit any of the acts of falsification enumerated in the next preceding article; and
3. Any person who shall knowingly introduce in evidence in any judicial proceeding or to the damage
of another or who, with the intent to cause such damage, shall use any of the false documents embraced
in the next preceding article, or in any of the foregoing subdivisions of this article, shall be punished by
the penalty next lower in degree.
39 Article 27, Revised Penal Code.
40 Section 32, Batas Pambansa Blg. 129.
CA-G.R. SP No. 164203 Page 10
DECISION

WE CONCUR:

ORIGINAL SIGNED
PEDRO B. CORALES
Associate Justice

ORIGINAL SIGNED
WILHELMINA B. JORGE-WAGAN
Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 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.

ORIGINAL SIGNED
PEDRO B. CORALES
Associate Justice
Chairperson
Fifteenth Division