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.

[G.R. No. 187979. April 25, 2012.]

ASIA UNITED BANK, petitioner, vs. GILBERT G. GUY, PHILIP

LEUNG, KATHERINE L. GUY, RAFAEL H. GALVEZ and
EUGENIO H. GALVEZ, JR., respondents.

[G.R. No. 188030. April 25, 2012.]

GILBERT G. GUY, PHILIP LEUNG and EUGENIO H. GALVEZ,

JR., petitioners, vs. ASIA UNITED BANK, respondent.

DECISION

PEREZ, J : p

THE FACTS
In 1999, Radio Marine Network (Smartnet), Inc. (RMSI) claiming to do
business under the name Smartnet Philippines 1 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, RMSI's
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
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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
Secretary's 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 AUB's belief that RMSI's directors and officers
consistently treated this letter of credit, among others, as obligations of
RMSI. AEDcIH

When RMSI's 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
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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 2006 9 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
Prosecutor's Resolution and ordered the dismissal of the estafa charges
against Gilbert Guy, et al. for insufficiency of evidence.
The AUB's Motion for Reconsideration was denied, constraining it to
assail the DOJ Resolution before the Court of Appeals (CA).
The CA partially granted AUB's 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 Prosecutor's 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. DIcTEC

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 SPI's letter of credit to AUB's 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
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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 . . . :
xxx xxx xxx

2. By means of any of the following false pretenses

or fraudulent acts executed prior to or
simultaneous with the commission of the fraud: DHAcET

(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. . . . .

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;
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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;cACHSE

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 RMSI's 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 RMSI's 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 Company 17 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 communications 19 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
G u y 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 corporation's
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.
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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. HDICSa

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, SPI's capital does not matter. 27 This was also the contention of the
DOJ in reversing the Resolution of the City Prosecutor's 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 AEDISC

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
latter's 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 RMSI's Division, were indicia of fraudulent acts
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 because they fully well know, even before transacting with the bank, that:
(a) SPI was a separate entity from Smartnet Philippines, the RMSI's Division,
which has the Omnibus Credit Line; and (b) despite this knowledge, they
misrepresented to the bank that SPI is RMSI's division. Had it not for this
false representation, AUB would have not granted SPI's 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 . . . 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
TADaES

We, therefore, sustain the findings of the CA and the City Prosecutor's
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. AUB's 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 Court's 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:

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

 SEC. 1. Any person or persons who shall commit estafa or
other forms of swindling as defined in Articles 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 syndicatedestafa are:
(a) estafa or other forms of swindling as defined in Articles 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 AUB's 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 DECcAS

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 SPI's separate juridical
personality, applied for a letter of credit secured by SPI's 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
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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, . . . .

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." 40
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. THIcCA

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.
Carpio, Brion, Sereno and Reyes, JJ., concur.
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 Footnotes
1.Rollo in G.R. No. 188030, p. 111.
2.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.
5.Id. at 472.
6.Id.

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

8.Id. at 148.
9.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 Black's Law Dictionary, 4th Edition, p. 788
(1951).
CD Technologies Asia, Inc. © 2021 cdasiaonline.com
 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, . . . .

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.

CD Technologies Asia, Inc. © 2021 cdasiaonline.com