Stonehill vs Diokno

Facts:

Respondents herein secured a total of 42 search warrants against petitioners herein and/or the corporations of which
they were officers, to search books of accounts, financial records, vouchers, correspondence, receipts, ledgers, journals,
portfolios, credit journals, typewriters, and other documents and/or papers showing all business transactions including
disbursements receipts, balance sheets and profit and loss statements and Bobbins (cigarette wrappers), as the subject
of the offense; stolen or embezzled and proceeds or fruits of the offense, or used or intended to be used as the means of
committing the offense, which is described in the applications adverted to above as violation of Central Bank Laws,
Tariff and Customs Laws, Internal Revenue (Code) and the Revised Penal Code.
The petitioner contended that the search warrants are null and void as their issuance violated the Constitution and the
Rules of Court for being general warrants.
The documents, papers, and things seized under the alleged authority of the warrants in question may be split into two
(2) major groups, namely: (a) those found and seized in the offices of the aforementioned corporations, and (b) those
found and seized in the residences of petitioners herein.

Issue: Whether petitioners can validly assail the search warrant against the corporation.

Held: No.
As regards the first group, we hold that petitioners herein have no cause of action to assail the legality of the contested
warrants and of the seizures made in pursuance thereof, for the simple reason that said corporations have their
respective personalities, separate and distinct from the personality of herein petitioners, regardless of the amount of
shares of stock or of the interest of each of them in said corporations, and whatever the offices they hold therein may
be. Indeed, it is well settled that the legality of a seizure can be contested only by the party whose rights have been
impaired thereby, and that the objection to an unlawful search and seizure is purely personal and cannot be availed of by
third parties. Consequently, petitioners herein may not validly object to the use in evidence against them of the
documents, papers and things seized from the offices and premises of the corporations adverted to above, since the right
to object to the admission of said papers in evidence belongs exclusively to the corporations, to whom the seized effects
belong, and may not be invoked by the corporate officers in proceedings against them in their individual capacity.

Bache and co vs ruiz

On 24 Feb 1970, Commissioner Vera of Internal Revenue, wrote a letter addressed to J Ruiz requesting the issuance of a
search warrant against petitioners for violation of Sec 46(a) of the NIRC, in relation to all other pertinent provisions
thereof, particularly Sects 53, 72, 73, 208 and 209, and authorizing Revenue Examiner de Leon make and file the
application for search warrant which was attached to the letter. The next day, de Leon and his witnesses went to CFI Rizal
to obtain the search warrant. At that time J Ruiz was hearing a certain case; so, by means of a note, he instructed his
Deputy Clerk of Court to take the depositions of De Leon and Logronio. After the session had adjourned, J Ruiz was
informed that the depositions had already been taken. The stenographer read to him her stenographic notes; and
thereafter, J Ruiz asked respondent Logronio to take the oath and warned him that if his deposition was found to be false
and without legal basis, he could be charged for perjury. J Ruiz signed de Leons application for search warrant and
Logronios deposition. The search was subsequently conducted.
ISSUE: Whether or not there had been a valid search warrant.
HELD: The SC ruled in favor of Bache on three grounds.
1. J Ruiz failed to personally examine the complainant and his witness.
Personal examination by the judge of the complainant and his witnesses is necessary to enable him to determine the
existence or non-existence of a probable cause.
2. The search warrant was issued for more than one specific offense.
The search warrant in question was issued for at least four distinct offenses under the Tax Code. As ruled
in Stonehill Such is the seriousness of the irregularities committed in connection with the disputed search warrants, that
this Court deemed it fit to amend Section 3 of Rule 122 of the former Rules of Court that a search warrant shall not issue
but upon probable cause in connection with one specific offense. Not satisfied with this qualification, the Court added
thereto a paragraph, directing that no search warrant shall issue for more than one specific offense.
3. The search warrant does not particularly describe the things to be seized.
The documents, papers and effects sought to be seized are described in the Search Warrant
Unregistered and private books of accounts (ledgers, journals, columnars, receipts and disbursements books, customers
ledgers); receipts for payments received; certificates of stocks and securities; contracts, promissory notes and deeds of
sale; telex and coded messages; business communications, accounting and business records; checks and check stubs;
records of bank deposits and withdrawals; and records of foreign remittances, covering the years 1966 to 1970.
The description does not meet the requirement in Art III, Sec. 1, of the Constitution, and of Sec. 3, Rule 126 of the Revised
Rules of Court, that the warrant should particularly describe the things to be seized.
A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as
the circumstances will ordinarily allow or when the description expresses a conclusion of fact not of law by which the
warrant officer may be guided in making the search and seizure or when the things described are limited to those which
bear direct relation to the offense for which the warrant is being issued.

BATAAN SHIPYARD & ENGINEERING CO., INC. (BASECO), petitioner,

vs.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, CHAIRMAN JOVITO SALONGA, COMMISSIONER MARY
CONCEPCION BAUTISTA, COMMISSIONER RAMON DIAZ, COMMISSIONER RAUL R. DAZA, COMMISSIONER QUINTIN
S. DOROMAL, CAPT. JORGE B. SIACUNCO, et al., respondents.

FACTS

Challenged in this special civil action of certiorari and prohibition by a private corporation known as the Bataan Shipyard
and Engineering Co., Inc. are: (1) Executive Orders Numbered 1 and 2, promulgated by President Corazon C. Aquino on
February 28, 1986 and March 12, 1986, respectively, and (2) the sequestration, takeover, and other orders issued, and
acts done, in accordance with said executive orders by the Presidential Commission on Good Government and/or its
Commissioners and agents, affecting said corporation.

The sequestration order which, in the view of the petitioner corporation, initiated all its misery was issued on April 14,
1986 by Commissioner Mary Concepcion Bautista.

On the strength of the above sequestration order, Mr. Jose M. Balde, acting for the PCGG, addressed a letter dated April 18,
1986 to the President and other officers of petitioner firm, reiterating an earlier request for the production of certain
documents such as Stock Transfer Book and other Legal documents (Articles of Incorporation, By-Laws, etc.)

Orders were also issued in connection with the sequestration and takeover, such as termination of Contract for Security
Services and abortion of contract for Improvement of Wharf at Engineer Island; Change of Mode of Payment of Entry
Charges; Operation of Sesiman Rock Quarry, Mariveles, Bataa; disposal of scrap, etc.; and the provisional takeover by the
PCGG of BASECO, the Philippine Dockyard Corporation and all their affiliated companies.

While BASECO concedes that sequestration without resorting to judicial action, might be made within the context of
Executive Orders Nos. 1 and 2 before March 25, 1986 when the Freedom Constitution was promulgated, under the
principle that the law promulgated by the ruler under a revolutionary regime is the law of the land, it ceased to be
acceptable when the same ruler opted to promulgate the Freedom Constitution on March 25, 1986 wherein under Section
I of the same,y Article IV (Bill of Rights) of the 1973 Constitution was adopted providing, among others, that No person
shall be deprived of life, liberty and property without due process of law. (Const., Art. I V, Sec. 1).

It declares that its objection to the constitutionality of the Executive Orders as well as the Sequestration Order * * and
Takeover Order * * issued purportedly under the authority of said Executive Orders, rests on four fundamental
considerations: First, no notice and hearing was accorded * * (it) before its properties and business were taken over;
Second, the PCGG is not a court, but a purely investigative agency and therefore not competent to act as prosecutor and
judge in the same cause; Third, there is nothing in the issuances which envisions any proceeding, process or remedy by
which petitioner may expeditiously challenge the validity of the takeover after the same has been effected; and Fourthly,
being directed against specified persons, and in disregard of the constitutional presumption of innocence and general
rules and procedures, they constitute a Bill of Attainder.

It argues that the order to produce corporate records from 1973 to 1986, which it has apparently already complied with,
was issued without court authority and infringed its constitutional right against self-incrimination, and unreasonable
search and seizure. 14

BASECO further contends that the PCGG had unduly interfered with its right of dominion and management of its business
affairs.

ISSUE

Whether or not the sequestration order dated April 14, 1986, and all other orders subsequently issued and acts done on
the basis thereof, inclusive of the takeover order of July 14, 1986 and the termination of the services of the BASECO
executives are valid;

DECISION

Yes. The petition cannot succeed. The writs of certiorari and prohibition prayed for will not be issued. Other evidence
submitted to the Court by the Solicitor General proves that President Marcos not only exercised control over BASECO, but
also that he actually owns well nigh one hundred percent of its outstanding stock.

Executive Orders Not a Bill of Attainder In the first place, nothing in the executive orders can be reasonably construed as
a determination or declaration of guilt. On the contrary, the executive orders, inclusive of Executive Order No. 14, make it
perfectly clear that any judgment of guilt in the amassing or acquisition of ill-gotten wealth is to be handed down by a
judicial tribunal, in this case, the Sandiganbayan, upon complaint filed and prosecuted by the PCGG. In the second place,
no punishment is inflicted by the executive orders, as the merest glance at their provisions will immediately make
apparent. In no sense, therefore, may the executive orders be regarded as a bill of attainder.

No Violation of Right against Self-Incrimination and Unreasonable Searches and Seizures It is elementary that the right
against self-incrimination has no application to juridical persons. While an individual may lawfully refuse to answer
incriminating questions unless protected by an immunity statute, it does not follow that a corporation, vested with special
privileges and franchises, may refuse to show its hand when charged with an abuse ofsuchprivileges * *

Scope and Extent of Powers of the PCGG PCGG cannot exercise acts of dominion over property sequestered, frozen or
provisionally taken over. AS already earlier stressed with no little insistence, the act of sequestration; freezing or
provisional takeover of property does not import or bring about a divestment of title over said property; does not make
the PCGG the owner thereof.

The PCGG may thus exercise only powers of administration over the property or business sequestered or provisionally
taken over, much like a court-appointed receiver, such as to bring and defend actions in its own name; receive rents;
collect debts due; pay outstanding debts; and generally do such other acts and things as may be necessary to fulfill its
mission as conservator and administrator.

Powers over Business Enterprises Taken Over by Marcos or Entities or Persons Close to him; Limitations Thereon Now,
in the special instance of a business enterprise shown by evidence to have been taken over by the government of the
Marcos Administration or by entities or persons close to former President Marcos, the PCGG is given power and
authority, as already adverted to, to provisionally take (it) over in the public interest or to prevent * * (its) disposal or
dissipation; and since the term is obviously employed in reference to going concerns, or business enterprises in
operation, something more than mere physical custody is connoted; the PCGG may in this case exercise some measure of
control in the operation, running, or management of the business itself. But even in this special situation, the intrusion
into management should be restricted to the minimum degree necessary to accomplish the legislative will, which is to
prevent the disposal or dissipation of the business enterprise.

Voting of Sequestered Stock; Conditions Therefor So, too, it is within the parameters of these conditions and
circumstances that the PCGG may properly exercise the prerogative to vote sequestered stock of corporations, granted to
it by the President of the Philippines through a Memorandum dated June 26, 1986. In the case at bar, there was adequate
justification to vote the incumbent directors out of office and elect others in their stead because the evidence showed
prima facie that the former were just tools of President Marcos and were no longer owners of any stock in the firm, if they
ever were at all.

No Sufficient Showing of Other Irregularities -As to the other irregularities complained of by BASECO, i.e., the cancellation
or revision, and the execution of certain contracts, inclusive of the termination of the employment of some of its
executives, this Court cannot, in the present state of the evidence on record, pass upon them. It is not necessary to do so.
The issues arising therefrom may and will be left for initial determination in the appropriate action.

Professional Services Inc. v. Agana

FACTS
Natividad Agana was rushed to Medical City because of difficulty of bowel movement and bloody anal discharge. Dr. Ampil
diagnosed her to be suffering from cancer of the sigmoid. Dr. Ampil performed an anterior resection surgery on her,
and finding that the malignancy spread on her left ovary, he obtained the consent of her husband, Enrique, to permit Dr.
Fuentes to perform hysterectomy on her. After the hysterectomy, Dr. Fuentes showed his work to Dr. Ampil, who
examined it and found it in order, so he allowed Dr. Fuentes to leave the operating room. Dr. Ampil was about to complete
the procedure when the attending nurses made some remarks on the Record of Operation: sponge count lacking 2;
announced to surgeon search done but to no avail continue for closure (two pieces of gauze were missing). A diligent
search was conducted but they could not be found. Dr. Ampil then directed that the incision be closed.
A couple of days after, she complained of pain in her anal region, but the doctors told her that it was just a natural
consequence of the surgery. Dr. Ampil recommended that she consult an oncologist to examine the cancerous nodes
which were not removed during the operation. After months of consultations and examinations in the US, she was told
 that she was free of cancer. Weeks after coming back, her daughter found a piece of gauze (1.5 in) protruding from her
vagina, so Dr. Ampil manually extracted this, assuring Natividad that the pains will go away. However, the pain worsened,
so she sought treatment at a hospital, where another 1.5 in piece of gauze was found in her vagina. She underwent
another surgery.
Sps. Agana filed a complaint for damages against PSI (owner of Medical City), Dr. Ampil, and Dr. Fuentes, alleging
that the latter are liable for negligence for leaving 2 pieces of gauze in Natividads body, and malpractice for concealing
their acts of negligence. Enrique Agana also filed an administrative complaint for gross negligence and malpractice
against the two doctors with the PRC (although only the case against Dr. Fuentes was heard since Dr. Ampil was abroad).
Pending the outcome of the cases, Natividad died (now substituted by her children). RTC found PSI and the two
doctors liable for negligence and malpractice. PRC dismissed the case against Dr. Fuentes. CA dismissed only the
case against Fuentes.

ISSUE AND HOLDING

1. WON CA erred in holding Dr. Ampil liable for negligence and malpractice. NO; DR. AMPIL IS GUILTY
2. WON CA erred in absolving Dr. Fuentes of any liability. NO
3. WON PSI may be held solidarily liable for Dr. Ampils negligence. YES
RATIO
DR. AMPIL IS LIABLE FOR NEGLIGENCE AND MALPRACTICE
His arguments are without basis [did not prove that the American doctors were the ones who put / left the gauzes; did not
submit evidence to rebut the correctness of the operation record (re: number of gauzes used); re: Dr. Fuentes alleged
negligence, Dr. Ampil examined his work and found it in order].
Leaving foreign substances in the wound after incision has been closed is at least prima facie negligence by
the operating surgeon. Even if it has been shown that a surgeon was required to leave a sponge in his patients abdomen
because of the dangers attendant upon delay, still, it is his legal duty to inform his patient within a reasonable time by
advising her of what he had been compelled to do, so she can seek relief from the effects of the foreign object left in her
body as her condition might permit. Whats worse in this case is that he misled her by saying that the pain was an
ordinary consequence of her operation.

Medical negligence; standard of diligence

To successfully pursue this case of medical negligence, a patient must only prove that a health care provider either failed
to do something [or did something] which a reasonably prudent health care provider would have done [or wouldnt have
done], and that the failure or action caused injury to the patient.
Duty to remove all foreign objects from the body before closure of the incision; if he fails to do so, it was his duty to
inform the patient about it
Breach failed to remove foreign objects; failed to inform patient
Injury suffered pain that necessitated examination and another surgery
Proximate Causation breach caused this injury; could be traced from his act of closing the incision despite information
given by the attendant nurses that 2 pieces of gauze were still missing; what established causal link: gauze pieces later
extracted from patients vagina
DR. FUENTES NOT LIABLE
The res ipsa loquitur [thing speaks for itself] argument of the Aganas does not convince the court. Mere invocation and
application of this doctrine does not dispense with the requirement of proof of negligence.

Requisites for the applicability of res ipsa loquitur

1. Occurrence of injury
2. Thing which caused injury was under the control and management of the defendant [DR. FUENTES] LACKING
SINCE CTRL+MGT WAS WITH DR. AMPIL
3. Occurrence was such that in the ordinary course of things, would not have happened if those who had control or
management used proper care
4. Absence of explanation by defendant
Under the Captain of the Ship rule, the operating surgeon is the person in complete charge of the surgery room and all
personnel connected with the operation. That Dr. Ampil discharged such role is evident from the following:
He called Dr. Fuentes to perform a hysterectomy
He examined Dr. Fuentes work and found it in order
He granted Dr. Fuentes permission to leave
He ordered the closure of the incision
HOSPITAL OWNER PSI SOLIDARILY LIABLE WITH DR. AMPIL [NCC 2180], AND DIRECTLY LIABLE TO SPS. AGANAS
[NCC 2176]
Previously, employers cannot be held liable for the fault or negligence of its professionals. However, this doctrine has
weakened since courts came to realize that modern hospitals are taking a more active role in supplying and regulating
medical care to its patients, by employing staff of physicians, among others. Hence, there is no reason to exempt hospitals
from the universal rule of respondeat superior. Here are the Courts bases for sustaining PSIs liability:
Ramos v. CA doctrine on E-E relationship


o For purposes of apportioning responsibility in medical negligence cases, an employer-employee relationship in

effect exists between hospitals and their attending and visiting physicians. [LABOR LESSON: power to hire, fire,
power of control]
Agency principle of apparent authority / agency by estoppel

o Imposes liability because of the actions of a principal or employer in somehow misleading the public into believing
that the relationship or the authority exists [see NCC 1869]
o PSI publicly displays in the Medical City lobby the names and specializations of their physicians. Hence, PSI is now
estopped from passing all the blame to the physicians whose names it proudly paraded in the public directory,
leading the public to believe that it vouched for their skill and competence.
o

If doctors do well, hospital profits financially, so when negligence mars the quality of its services, the hospital
should not be allowed to escape liability for its agents acts.
Doctrine of corporate negligence / corporate responsibility

o This is the judicial answer to the problem of allocating hospitals liability for the negligent acts of health
practitioners, absent facts to support the application of respondeat superior.
o This provides for the duties expected [from hospitals]. In this case, PSI failed to perform the duty of
exercising reasonable care to protect from harm all patients admitted into its facility for medical treatment. PSI
failed to conduct an investigation of the matter reported in the note of the count nurse, and this established
PSIs part in the dark conspiracy of silence and concealment about the gauzes.
o

PSI has actual / constructive knowledge of the matter, through the report of the attending nurses + the fact that
the operation was carried on with the assistance of various hospital staff
o It also breached its duties to oversee or supervise all persons who practice medicine within its walls and take an
active step in fixing the negligence committed
PSI also liable under NCC 2180

o It failed to adduce evidence to show that it exercised the diligence of a good father of the family in the accreditation
and supervision of Dr. Ampil

ESPIRITU VS PETRON CORP

The Facts and the Case

Respondent Petron Corporation (Petron) sold and distributed liquefied petroleum gas (LPG) in cylinder tanks
that carried its trademark Gasul.[1] Respondent Carmen J. Doloiras owned and operated Kristina Patricia Enterprises
(KPE), the exclusive distributor of Gasul LPGs in the whole of Sorsogon.[2] Jose Nelson Doloiras (Jose) served as KPEs
manager.

Bicol Gas Refilling Plant Corporation (Bicol Gas) was also in the business of selling and distributing LPGs in
Sorsogon but theirs carried the trademark Bicol Savers Gas. Petitioner Audie Llona managed Bicol Gas.

In the course of trade and competition, any given distributor of LPGs at times acquired possession of LPG
cylinder tanks belonging to other distributors operating in the same area. They called these captured cylinders. According
to Jose, KPEs manager, in April 2001 Bicol Gas agreed with KPE for the swapping of captured cylinders since one
distributor could not refill captured cylinders with its own brand of LPG. At one time, in the course of implementing this
arrangement, KPEs Jose visited the Bicol Gas refilling plant. While there, he noticed several Gasul tanks in Bicol Gas
possession. He requested a swap but Audie Llona of Bicol Gas replied that he first needed to ask the permission of the
Bicol Gas owners. That permission was given and they had a swap involving around 30 Gasul tanks held by Bicol Gas in
exchange for assorted tanks held by KPE.

KPEs Jose noticed, however, that Bicol Gas still had a number of Gasul tanks in its yard. He offered to make a
swap for these but Llona declined, saying the Bicol Gas owners wanted to send those tanks to Batangas. Later Bicol Gas
told Jose that it had no more Gasul tanks left in its possession. Jose observed on almost a daily basis, however, that Bicol
Gas trucks which plied the streets of the province carried a load of Gasul tanks. He noted that KPEs volume of sales
dropped significantly from June to July 2001.

On August 4, 2001 KPEs Jose saw a particular Bicol Gas truck on the Maharlika Highway. While the truck carried
mostly Bicol Savers LPG tanks, it had on it one unsealed 50-kg Gasul tank and one 50-kg Shellane tank. Jose followed the
truck and when it stopped at a store, he asked the driver, Jun Leorena, and the Bicol Gas sales representative, Jerome
Misal, about the Gasul tank in their truck. They said it was empty but, when Jose turned open its valve, he noted that it
was not. Misal and Leorena then admitted that the Gasul and Shellane tanks on their truck belonged to a customer who
had them filled up by Bicol Gas. Misal then mentioned that his manager was a certain Rolly Mirabena.

Because of the above incident, KPE filed a complaint[3] for violations of Republic Act (R.A.) 623 (illegally filling
up registered cylinder tanks), as amended, and Sections 155 (infringement of trade marks) and 169.1 (unfair
competition) of the Intellectual Property Code (R.A. 8293). The complaint charged the following: Jerome Misal, Jun
Leorena, Rolly Mirabena, Audie Llona, and several John and Jane Does, described as the directors, officers, and
stockholders of Bicol Gas. These directors, officers, and stockholders were eventually identified during the preliminary
investigation.

Subsequently, the provincial prosecutor ruled that there was probable cause only for violation of R.A. 623
(unlawfully filling up registered tanks) and that only the four Bicol Gas employees, Mirabena, Misal, Leorena, and
petitioner Llona, could be charged. The charge against the other petitioners who were the stockholders and directors of
the company was dismissed.

Dissatisfied, Petron and KPE filed a petition for review with the Office of the Regional State Prosecutor, Region V,
which initially denied the petition but partially granted it on motion for reconsideration. The Office of the Regional State
Prosecutor ordered the filing of additional informations against the four employees of Bicol Gas for unfair competition. It
ruled, however, that no case for trademark infringement was present. The Secretary of Justice denied the appeal of Petron
and KPE and their motion for reconsideration.

Undaunted, Petron and KPE filed a special civil action for certiorari with the Court of Appeals[4] but the Bicol Gas
employees and stockholders concerned opposed it, assailing the inadequacy in its certificate of non-forum shopping,
given that only Atty. Joel Angelo C. Cruz signed it on behalf of Petron. In its Decision[5]dated October 17, 2005, the Court of
Appeals ruled, however, that Atty. Cruzs certification constituted sufficient compliance. As to the substantive aspect of the
case, the Court of Appeals reversed the Secretary of Justices ruling. It held that unfair competition does not necessarily
absorb trademark infringement. Consequently, the court ordered the filing of additional charges of trademark
infringement against the concerned Bicol Gas employees as well.
 Since the Bicol Gas employees presumably acted under the direct order and control of its owners, the Court of
Appeals also ordered the inclusion of the stockholders of Bicol Gas in the various charges, bringing to 16 the number of
persons to be charged, now including petitioners Manuel C. Espiritu, Jr., Freida F. Espiritu, Carlo F. Espiritu, Rafael F.
Espiritu, Rolando M. Mirabuna, Hermilyn A. Mirabuna, Kim Roland A. Mirabuna, Kaye Ann A. Mirabuna, Ken Ryan A.
Mirabuna, Juanito P. de Castro, Geronima A. Almonite, and Manuel C. Dee (together with Audie Llona), collectively,
petitioners Espiritu, et al. The court denied the motion for reconsideration of these employees and stockholders in its
Resolution dated January 6, 2006, hence, the present petition for review [6] before this Court.

The Issues Presented

The petition presents the following issues:

1. Whether or not the certificate of non-forum shopping that accompanied the petition filed
with the Court of Appeals, signed only by Atty. Cruz on behalf of Petron, complied with what the rules
require;

2. Whether or not the facts of the case warranted the filing of charges against the Bicol Gas
people for:

a) Filling up the LPG tanks registered to another manufacturer without the

latters consent in violation of R.A. 623, as amended;

b) Trademark infringement consisting in Bicol Gas use of a trademark that

is confusingly similar to Petrons registered Gasul trademark in violation of section
155 also of R.A. 8293; and

c) Unfair competition consisting in passing off Bicol Gas-produced LPGs for

Petron-produced Gasul LPG in violation of Section 168.3 of R.A. 8293.

The Courts Rulings

First. Petitioners Espiritu, et al. point out that the certificate of non-forum shopping that respondents KPE and
Petron attached to the petition they filed with the Court of Appeals was inadequate, having been signed only by Petron,
through Atty. Cruz.

But, while procedural requirements such as that of submittal of a certificate of non-forum shopping cannot be
totally disregarded, they may be deemed substantially complied with under justifiable circumstances. [7] One of these
circumstances is where the petitioners filed a collective action in which they share a common interest in its subject matter
or raise a common cause of action. In such a case, the certification by one of the petitioners may be deemed sufficient.[8]

Here, KPE and Petron shared a common cause of action against petitioners Espiritu, et al., namely, the violation
of their proprietary rights with respect to the use of Gasul tanks and trademark. Furthermore, Atty. Cruz said in his
certification that he was executing it for and on behalf of the Corporation, and co-petitioner Carmen J. Doloiras.[9] Thus,
the object of the requirement to ensure that a party takes no recourse to multiple forums was substantially
achieved. Besides, the failure of KPE to sign the certificate of non-forum shopping does not render the petition defective
with respect to Petron which signed it through Atty. Cruz.[10] The Court of Appeals, therefore, acted correctly in giving due
course to the petition before it.

Second. The Court of Appeals held that under the facts of the case, there is probable cause that petitioners
Espiritu, et al. committed all three crimes: (a) illegally filling up an LPG tank registered to Petron without the latters
consent in violation of R.A. 623, as amended; (b) trademark infringement which consists in Bicol Gas use of a trademark
that is confusingly similar to Petrons registered Gasul trademark in violation of Section 155 of R.A. 8293; and (c) unfair
competition which consists in petitioners Espiritu, et al. passing off Bicol Gas-produced LPGs for Petron-produced Gasul
LPG in violation of Section 168.3 of R.A. 8293.

Here, the complaint adduced at the preliminary investigation shows that the one 50-kg Petron Gasul LPG tank
found on the Bicol Gas truck belonged to [a Bicol Gas] customer who had the same filled up by BICOL GAS. [11] In other
words, the customer had that one Gasul LPG tank brought to Bicol Gas for refilling and the latter obliged.

R.A. 623, as amended,[12] punishes any person who, without the written consent of the manufacturer or seller of
gases contained in duly registered steel cylinders or tanks, fills the steel cylinder or tank, for the purpose of sale, disposal
or trafficking, other than the purpose for which the manufacturer or seller registered the same. This was what happened
in this case, assuming the allegations of KPEs manager to be true. Bicol Gas employees filled up with their firms gas the
tank registered to Petron and bearing its mark without the latters written authority. Consequently, they may be
prosecuted for that offense.

But, as for the crime of trademark infringement, Section 155 of R.A. 8293 (in relation to Section 170 [13]) provides
that it is committed by any person who shall, without the consent of the owner of the registered mark:

1. Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered

mark or the same container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or

2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature

thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.

KPE and Petron have to show that the alleged infringer, the responsible officers and staff of Bicol Gas, used
Petrons Gasul trademark or a confusingly similar trademark on Bicol Gas tanks with intent to deceive the public and
defraud its competitor as to what it is selling.[14] Examples of this would be the acts of an underground shoe manufacturer
in Malabon producing Nike branded rubber shoes or the acts of a local shirt company with no connection to La Coste,
producing and selling shirts that bear the stitched logos of an open-jawed alligator.

Here, however, the allegations in the complaint do not show that Bicol Gas painted on its own tanks Petrons
Gasul trademark or a confusingly similar version of the same to deceive its customers and cheat Petron. Indeed, in this
case, the one tank bearing the mark of Petron Gasul found in a truck full of Bicol Gas tanks was a genuine Petron Gasul
tank, more of a captured cylinder belonging to competition. No proof has been shown that Bicol Gas has gone into the
business of distributing imitation Petron Gasul LPGs.

As to the charge of unfair competition, Section 168.3 (a) of R.A. 8293 (also in relation to Section 170) describes
the acts constituting the offense as follows:

168.3. In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general
appearance of goods of another manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in which they are contained, or the
devices or words thereon, or in any other feature of their appearance, which would
 be likely to influence purchasers to believe that the goods offered are those of a
manufacturer or dealer, other than the actual manufacturer or dealer, or who
otherwise clothes the goods with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent vendor of such goods or
any agent of any vendor engaged in selling such goods with a like purpose;

Essentially, what the law punishes is the act of giving ones goods the general appearance of the goods of another,
which would likely mislead the buyer into believing that such goods belong to the latter. Examples of this would be the act
of manufacturing or selling shirts bearing the logo of an alligator, similar in design to the open-jawed alligator in La Coste
shirts, except that the jaw of the alligator in the former is closed, or the act of a producer or seller of tea bags with red tags
showing the shadow of a black dog when his competitor is producing or selling popular tea bags with red tags showing
the shadow of a black cat.

Here, there is no showing that Bicol Gas has been giving its LPG tanks the general appearance of the tanks of
Petrons Gasul. As already stated, the truckfull of Bicol Gas tanks that the KPE manager arrested on a road in Sorsogon just
happened to have mixed up with them one authentic Gasul tank that belonged to Petron.

The only point left is the question of the liability of the stockholders and members of the board of directors of
Bicol Gas with respect to the charge of unlawfully filling up a steel cylinder or tank that belonged to Petron. The Court of
Appeals ruled that they should be charged along with the Bicol Gas employees who were pointed to as directly involved in
overt acts constituting the offense.

Bicol Gas is a corporation. As such, it is an entity separate and distinct from the persons of its officers, directors,
and stockholders. It has been held, however, that corporate officers or employees, through whose act, default or omission
the corporation commits a crime, may themselves be individually held answerable for the crime. [15]

Jose claimed in his affidavit that, when he negotiated the swapping of captured cylinders with Bicol Gas, its
manager, petitioner Audie Llona, claimed that he would be consulting with the owners of Bicol Gas about it. Subsequently,
Bicol Gas declined the offer to swap cylinders for the reason that the owners wanted to send their captured cylinders to
Batangas. The Court of Appeals seized on this as evidence that the employees of Bicol Gas acted under the direct orders of
its owners and that the owners of Bicol Gas have full control of the operations of the business.[16]

The owners of a corporate organization are its stockholders and they are to be distinguished from its directors
and officers. The petitioners here, with the exception of Audie Llona, are being charged in their capacities as stockholders
of Bicol Gas. But the Court of Appeals forgets that in a corporation, the management of its business is generally vested in
its board of directors, not its stockholders.[17] Stockholders are basically investors in a corporation. They do not have a
hand in running the day-to-day business operations of the corporation unless they are at the same time directors or
officers of the corporation. Before a stockholder may be held criminally liable for acts committed by the corporation,
therefore, it must be shown that he had knowledge of the criminal act committed in the name of the corporation and that
he took part in the same or gave his consent to its commission, whether by action or inaction.

The finding of the Court of Appeals that the employees could not have committed the crimes without the
consent, [abetment], permission, or participation of the owners of Bicol Gas[18] is a sweeping speculation especially since,
as demonstrated above, what was involved was just one Petron Gasul tank found in a truck filled with Bicol Gas
tanks. Although the KPE manager heard petitioner Llona say that he was going to consult the owners of Bicol Gas
regarding the offer to swap additional captured cylinders, no indication was given as to which Bicol Gas stockholders
Llona consulted. It would be unfair to charge all the stockholders involved, some of whom were proved to be
minors.[19] No evidence was presented establishing the names of the stockholders who were charged with running the
operations of Bicol Gas. The complaint even failed to allege who among the stockholders sat in the board of directors of
the company or served as its officers.

The Court of Appeals of course specifically mentioned petitioner stockholder Manuel C. Espiritu, Jr. as the
registered owner of the truck that the KPE manager brought to the police for investigation because that truck carried a
tank of Petron Gasul. But the act that R.A. 623 punishes is the unlawful filling up of registered tanks of another. It does not
punish the act of transporting such tanks. And the complaint did not allege that the truck owner connived with those
responsible for filling up that Gasul tank with Bicol Gas LPG.

WHEREFORE, the Court REVERSES and SETS ASIDE the Decision of the Court of Appeals in CA-G.R. SP 87711
dated October 17, 2005 as well as its Resolution dated January 6, 2006, the Resolutions of the Secretary of Justice dated
March 11, 2004 and August 31, 2004, and the Order of the Office of the Regional State Prosecutor, Region V, dated
February 19, 2003. The Court REINSTATES the Resolution of the Office of the Provincial Prosecutor of Sorsogon in I.S.
2001-9231 (inadvertently referred in the Resolution itself as I.S. 2001-9234), dated February 26, 2002. The names of
petitioners Manuel C. Espiritu, Jr., Freida F. Espititu, Carlo F. Espiritu, Rafael F. Espiritu, Rolando M. Mirabuna, Hermilyn A.
Mirabuna, Kim Roland A. Mirabuna, Kaye Ann A. Mirabuna, Ken Ryan A. Mirabuna, Juanito P. De Castro, Geronima A.
Almonite and Manuel C. Dee are ORDERED excluded from the charge.

ching v The Secretary of Justice G. R. No. 164317 February 6, 2006

The failure of person to turn over the proceeds of the sale of the goods covered by the trust receipt to the entruster
or to return said goods, if not sold, is a public nuisance to be abated by the imposition of penal sanctions

Facts: Ching was the Senior Vice-President of Philippine Blooming Mills, Inc. (PBMI). Sometime in September to October
1980, PBMI, through petitioner, applied with the Rizal Commercial Banking Corporation (respondent bank) for the
issuance of commercial letters of credit to finance its importation of assorted goods. Under the receipts, petitioner agreed
to hold the goods in trust for the said bank, with authority to sell but not by way of conditional sale, pledge or otherwise;
and in case such goods were sold, to turn over the proceeds thereof as soon as received, to apply against the relative
acceptances and payment of other indebtedness to respondent bank. In case the goods remained unsold within the
specified period, the goods were to be returned to respondent bank without any need of demand. Thus, said goods,
manufactured products or proceeds thereof, whether in the form of money or bills, receivables, or accounts separate and
capable of identification were respondent banks property. When the trust receipts matured, petitioner failed to return
the goods to respondent bank, or to return their value amounting to P6,940,280.66 despite demands. Thus, the bank filed
a criminal complaint for estafa6 against petitioner in the Office of the City Prosecutor of Manila.
Issue: Whether or not Ching is liable for Estafa

Held: In the case at bar, the transaction between petitioner and respondent bank falls under the trust receipt transactions
envisaged in P.D. No. 115. Respondent bank imported the goods and entrusted the same to PBMI under the trust receipts
signed by petitioner, as entrustee, with the bank as entruster. The failure of person to turn over the proceeds of the sale of
the goods covered by the trust receipt to the entruster or to return said goods, if not sold, is a public nuisance to be abated
by the imposition of penal sanctions.It must be stressed that P.D. No. 115 is a declaration by legislative authority that,
as a matter of public policy, the failure of person to turn over the proceeds of the sale of the goods covered by a trust
receipt or to return said goods, if not sold, is a public nuisance to be abated by the imposition of penal sanctions.

Failure of the entrustee to turn over the proceeds of the sale of the goods covered by the trust receipts to the entruster or
to return said goods if they were not disposed of in accordance with the terms of the trust receipt is a crime under P.D. No.
115, without need of proving intent to defraud.In Colinares v. Court of Appeals, the Court declared that there are two
possible situations in a trust receipt transaction. The first is covered by the provision which refers to money received
under the obligation involving the duty to deliver it (entregarla) to the owner of the merchandise sold. The second is
covered by the provision which refers to merchandise received under the obligation to return it (devolvera) to the owner.
Thus, failure of the entrustee to turn over the proceeds of the sale of the goods cov- ered by the trust receipts to the
entruster or to return said goods if they were not disposed of in accordance with the terms of the trust receipt is a crime
under P.D. No. 115, without need of proving intent to defraud. The law punishes dishonesty and abuse of confidence in the
handling of money or goods to the prejudice of the entruster, regardless of whether the latter is the owner or not. A mere
failure to deliver the proceeds of the sale of the goods, if not sold, constitutes a criminal offense that causes prejudice, not
only to another, but more to the public interest.

P.D. No. 115 is malum prohibitum but is classified as estafa under paragraph 1(b), Article 315 of the Revised Penal Code,
or estafa with abuse of confidence.The crime defined in P.D. No. 115 is malum prohibitum but is classified as estafa
under paragraph 1(b), Article 315 of the Revised Penal Code, or estafa with abuse of confidence. It may be committed by a
corporation or other juridical entity or by natural persons. However, the penalty for the crime is imprisonment for the
periods provided in said Article 315.

G.R. No. 199481

The Factual Antecedents

Sometime in January and February 1989, petitioner, as President of Novachemical Industries, Inc. (Novachem), applied
for commercial letters of credit from private respondent China Banking Corporation (Chinabank) to finance the purchase
of 1,600[4] kgs. of amoxicillin trihydrate micronized from Hyundai Chemical Company based in Seoul, South Korea and
glass containers from San Miguel Corporation (SMC). Subsequently, Chinabank issued Letters of Credit Nos.
89/0301[5] and DOM-33041[6] in the respective amounts of US$114,400.00[7] (originally US$135,850.00)[8] with a peso
equivalent of P2,139,119.80[9] and P1,712,289.90. After petitioner received the goods, he executed for and in behalf of
Novachem the corresponding trust receipt agreements dated May 24, 1989 and August 31, 1989 in favor of Chinabank.

On January 28, 2004, Chinabank, through its Staff Assistant, Ms. Maria Rosario De Mesa (Ms. De Mesa), filed before the
City Prosecutor's Office of Manila a Complaint-Affidavit[10] charging petitioner for violation of P.D. No. 115 in relation to
Article 315 1(b) of the RPC for his purported failure to turn-over the goods or the proceeds from the sale thereof, despite
repeated demands. It averred that the latter, with intent to defraud, and with unfaithfulness and abuse of confidence,
misapplied, misappropriated and converted the goods subject of the trust agreements, to its damage and prejudice.

In his defense, petitioner claimed that as a regular client of Chinabank, Novachem was granted a credit line and letters of
credit (L/Cs) secured by trust receipt agreements. The subject L/Cs were included in the special term-payment
arrangement mutually agreed upon by the parties, and payable in installments. In the payment of its obligations,
Novachem would normally give instructions to Chinabank as to what particular L/C or trust receipt obligation its
payments would be applied. However, the latter deviated from the special arrangement and misapplied payments
intended for the subject L/Cs and exacted unconscionably high interests and penalty charges.

The City Prosecutor found probable cause to indict petitioner as charged and filed the corresponding informations before
the RTC of Manila, docketed as Criminal Case Nos. 94-139613 and 94-139614.

The RTC Ruling

After due proceedings, the RTC rendered a Decision[11] dated December 4, 2002 acquitting petitioner of the criminal
charges for failure of the prosecution to prove his guilt beyond reasonable doubt. It, however, adjudged him civilly liable
to Chinabank, without need for a separate civil action, for the amounts of P1,843,567.90 and P879,166.81 under L/C Nos.
89/0301 and DOM-33041, respectively, less the payment of P500,000.00 made during the preliminary investigation,
with legal interest from the filing of the informations on October 27, 1994 until full payment, and for the costs.

The CA Ruling

On appeal of the civil aspect, the CA affirmed [12] the RTC Decision holding petitioner civilly liable. It noted that petitioner
signed the "Guarantee Clause" of the trust receipt agreements in his personal capacity and even waived the benefit of
excussion against Novachem. As such, he is personally and solidarily liable with Novachem.

The Petition

In the instant petition, petitioner contends that the CA erred in declaring him civilly liable under the subject L/Cs which
are corporate obligations of Novachem, and that the adjudged amounts were without factual basis because the obligations
had already been settled. He also questions the unilaterally-imposed interest rates applied by Chinabank and,
accordingly, prays for the application of the stipulated interest rate of 18% per annum (p.a.) on the corporation's
obligations. He further assails the authority of Ms. De Mesa to prosecute the case against him sans authority from
Chinabank's Board of Directors.

The Court's Ruling

The petition is partly meritorious.

Section 13 of the Trust Receipts Law explicitly provides that if the violation or offense is committed by a corporation, as in
this case, the penalty provided for under the law shall be imposed upon the directors, officers, employees or other officials
or person responsible for the offense, without prejudice to the civil liabilities arising from the criminal offense.

In this case, petitioner was acquitted of the charge for violation of the Trust Receipts Law in relation to Article 315
1(b)[13] of the RPC. As such, he is relieved of the corporate criminal liability as well as the corresponding civil liability
arising therefrom. However, as correctly found by the RTC and the CA, he may still be held liable for the trust receipts and
L/C transactions he had entered into in behalf of Novachem.

Settled is the rule that debts incurred by directors, officers, and employees acting as corporate agents are not their direct
liability but of the corporation they represent, except if they contractually agree/stipulate or assume to be personally
liable for the corporation's debts,[14] as in this case.

The RTC and the CA adjudged petitioner personally and solidarily liable with Novachem for the obligations secured by the
subject trust receipts based on the finding that he signed the guarantee clauses therein in his personal capacity and even
waived the benefit of excussion. However, a review of the records shows that petitioner signed only the guarantee
clauses of the Trust Receipt dated May 24, 1989[15] and the corresponding Application and Agreement for Commercial
Letter of Credit No. L/C No. 89/0301.[16] With respect to the Trust Receipt[17] dated August 31, 1989 and Irrevocable
Letter of Credit[18] No. L/C No. DOM-33041 issued to SMC for the glass containers, the second pages of these documents
that would have reflected the guarantee clauses were missing and did not form part of the prosecution's formal offer of
evidence. In relation thereto, Chinabank stipulated[19] before the CA that the second page of the August 31, 1989 Trust
Receipt attached to the complaint before the court a quo would serve as the missing page. A perusal of the said page,
however, reveals that the same does not bear the signature of the petitioner in the guarantee clause. Hence, it was error
for the CA to hold petitioner likewise liable for the obligation secured by the said trust receipt (L/C No. DOM-33041).
Neither was sufficient evidence presented to prove that petitioner acted in bad faith or with gross negligence as regards
the transaction that would have held him civilly liable for his actions in his capacity as President of Novachem.

On the matter of interest, while petitioner assailed the unilateral imposition of interest at rates above the stipulated 18%
p.a., he failed to submit a summary of the pertinent dates when excessive interests were imposed and the purported over-
payments that should be refunded. Having failed to prove his affirmative defense, the Court finds no reason to disturb the
amount awarded to Chinabank. Settled is the rule that in civil cases, the party who asserts the affirmative of an issue has
the onus to prove his assertion in order to obtain a favorable judgment. Thus, the burden rests on the debtor to prove
payment rather than on the creditor to prove non-payment.[20]

Lastly, the Court affirms Ms. De Mesa's capacity to sue on behalf of Chinabank despite the lack of proof of authority to
represent the latter. The Court noted that as Staff Assistant of Chinabank, Ms. De Mesa was tasked, among others, to
review applications for L/Cs, verify the documents of title and possession of goods covered by L/Cs, as well as pertinent
documents under trust receipts (TRs); prepare/send/cause the preparation of statements of accounts reflecting the
outstanding balance under the said L/Cs and/or TRs, and accept the corresponding payments; refer unpaid obligations to
Chinabank's lawyers and follow-up results thereon. As such, she was in a position to verify the truthfulness and
correctness of the allegations in the Complaint-Affidavit. Besides, petitioner voluntarily submitted[21] to the jurisdiction of
the court a quo and did not question Ms. De Mesa's authority to represent Chinabank in the instant case until an adverse
decision was rendered against him.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BULU CHOWDURY, accused-appellant.

In November 1995, Bulu Chowdury and Josephine Ong were charged before the Regional Trial Court of Manila with the
crime of illegal recruitment in large scale committed as follows:

"That sometime between the period from August 1994 to October 1994 in the City of Manila,
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, representing
themselves to have the capacity to contract, enlist and transport workers for employment abroad,
conspiring, confederating and mutually helping one another, did then and there willfully, unlawfully
and feloniously recruit the herein complainants: Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis,
individually or as a group for employment in Korea without first obtaining the required license and/or
authority from the Philippine Overseas Employment Administration."[1]

They were likewise charged with three counts of estafa committed against private complainants. [2] The State Prosecutor,
however, later dismissed the estafa charges against Chowdury[3] and filed an amended information indicting only Ong for
the offense.[4]

Chowdury was arraigned on April 16, 1996 while Ong remained at large. He pleaded "not guilty" to the charge of illegal
recruitment in large scale.[5]

Trial ensued.

The prosecution presented four witnesses: private complainants Aser Sasis, Estrella Calleja and Melvin Miranda, and
Labor Employment Officer Abbelyn Caguitla.

Sasis testified that he first met Chowdury in August 1994 when he applied with Craftrade Overseas Developers
(Craftrade) for employment as factory worker in South Korea. Chowdury, a consultant of Craftrade, conducted the
interview. During the interview, Chowdury informed him about the requirements for employment. He told him to submit
his passport, NBI clearance, passport size picture and medical certificate. He also required him to undergo a seminar. He
advised him that placement would be on a first-come-first-serve basis and urged him to complete the requirements
immediately. Sasis was also charged a processing fee of P25,000.00. Sasis completed all the requirements in September
1994. He also paid a total amount of P16,000.00 to Craftrade as processing fee. All payments were received by Ong for
which she issued three receipts.[6]Chowdury then processed his papers and convinced him to complete his payment.[7]

Sasis further said that he went to the office of Craftrade three times to follow up his application but he was always told to
return some other day. In one of his visits to Craftrades office, he was informed that he would no longer be deployed for
employment abroad. This prompted him to withdraw his payment but he could no longer find Chowdury. After two
unsuccessful attempts to contact him, he decided to file with the Philippine Overseas Employment Administration (POEA)
a case for illegal recruitment against Chowdury. Upon verification with the POEA, he learned that Craftrade's license had
already expired and has not been renewed and that Chowdury, in his personal capacity, was not a licensed recruiter.[8]

Calleja testified that in June 1994, she applied with Craftrade for employment as factory worker in South Korea. She was
interviewed by Chowdury. During the interview, he asked questions regarding her marital status, her age and her
province. Toward the end of the interview, Chowdury told her that she would be working in a factory in Korea. He
required her to submit her passport, NBI clearance, ID pictures, medical certificate and birth certificate. He also obliged
her to attend a seminar on overseas employment. After she submitted all the documentary requirements, Chowdury
required her to pay P20,000.00 as placement fee. Calleja made the payment on August 11, 1994 to Ong for which she was
issued a receipt.[9] Chowdury assured her that she would be able to leave on the first week of September but it proved to
be an empty promise. Calleja was not able to leave despite several follow-ups. Thus, she went to the POEA where she
discovered that Craftrade's license had already expired. She tried to withdraw her money from Craftrade to no avail.
Calleja filed a complaint for illegal recruitment against Chowdury upon advice of POEA's legal counsel. [10]

Miranda testified that in September 1994, his cousin accompanied him to the office of Craftrade in Ermita, Manila and
introduced him to Chowdury who presented himself as consultant and interviewer. Chowdury required him to fill out a
bio-data sheet before conducting the interview. Chowdury told Miranda during the interview that he would send him to
Korea for employment as factory worker. Then he asked him to submit the following documents: passport, passport size
picture, NBI clearance and medical certificate. After he complied with the requirements, he was advised to wait for his
visa and to pay P25,000.00 as processing fee. He paid the amount of P25,000.00 to Ong who issued receipts
therefor.[11] Craftrade, however, failed to deploy him. Hence, Miranda filed a complaint with the POEA against Chowdury
for illegal recruitment.[12]

Labor Employment Officer Abbelyn Caguitla of the Licensing Branch of the POEA testified that she prepared a
certification on June 9, 1996 that Chowdury and his co-accused, Ong, were not, in their personal capacities, licensed
recruiters nor were they connected with any licensed agency. She nonetheless stated that Craftrade was previously
licensed to recruit workers for abroad which expired on December 15, 1993. It applied for renewal of its license but was
only granted a temporary license effective December 16, 1993 until September 11, 1994. From September 11, 1994, the
POEA granted Craftrade another temporary authority to process the expiring visas of overseas workers who have already
been deployed. The POEA suspended Craftrade's temporary license on December 6, 1994.[13]

For his defense, Chowdury testified that he worked as interviewer at Craftrade from 1990 until 1994. His primary duty
was to interview job applicants for abroad. As a mere employee, he only followed the instructions given by his superiors,
Mr. Emmanuel Geslani, the agencys President and General Manager, and Mr. Utkal Chowdury, the agency's Managing
Director. Chowdury admitted that he interviewed private complainants on different dates. Their office secretary handed
him their bio-data and thereafter he led them to his room where he conducted the interviews. During the interviews, he
had with him a form containing the qualifications for the job and he filled out this form based on the applicant's responses
to his questions. He then submitted them to Mr. Utkal Chowdury who in turn evaluated his findings. He never received
money from the applicants. He resigned from Craftrade on November 12, 1994.[14]

Another defense witness, Emelita Masangkay who worked at the Accreditation Branch of the POEA presented a list of
the accredited principals of Craftrade Overseas Developers[15] and a list of processed workers of Craftrade Overseas
Developers from 1988 to 1994.[16]

The trial court found Chowdury guilty beyond reasonable doubt of the crime of illegal recruitment in large scale. It
sentenced him to life imprisonment and to pay a fine of P100,000.00. It further ordered him to pay Aser Sasis the amount
of P16,000.00, Estrella Calleja, P20,000.00 and Melvin Miranda, P25,000.00. The dispositive portion of the decision reads:

"WHEREFORE, in view of the foregoing considerations, the prosecution having proved the guilt of the
accused Bulu Chowdury beyond reasonable doubt of the crime of Illegal Recruitment in large scale, he
is hereby sentenced to suffer the penalty of life imprisonment and a fine of P100,000.00 under Art. 39
(b) of the New Labor Code of the Philippines. The accused is ordered to pay the complainants Aser
Sasis the amount of P16,000.00; Estrella Calleja the amount of P20,000.00; Melvin Miranda the amount
of P25,000.00."[17]

Chowdury appealed.

The elements of illegal recruitment in large scale are:

(1) The accused undertook any recruitment activity defined under Article 13 (b) or any prohibited
practice enumerated under Article 34 of the Labor Code;

(2) He did not have the license or authority to lawfully engage in the recruitment and placement of
workers; and

(3) He committed the same against three or more persons, individually or as a group.[18]

The last paragraph of Section 6 of Republic Act (RA) 8042 [19] states who shall be held liable for the offense, thus:

"The persons criminally liable for the above offenses are the principals, accomplices and accessories. In
case of juridical persons, the officers having control, management or direction of their business
shall be liable."

The Revised Penal Code which supplements the law on illegal recruitment[20] defines who are the principals, accomplices
and accessories. The principals are: (1) those who take a direct part in the execution of the act; (2) those who directly
force or induce others to commit it; and (3) those who cooperate in the commission of the offense by another act without
which it would not have been accomplished.[21] The accomplices are those persons who may not be considered as
principal as defined in Section 17 of the Revised Penal Code but cooperate in the execution of the offense by previous or
simultaneous act.[22] The accessories are those who, having knowledge of the commission of the crime, and without
having participated therein, either as principals or accomplices, take part subsequent to its commission in any of the
following manner: (1) by profiting themselves or assisting the offenders to profit by the effects of the crime; (2) by
concealing or destroying the body of the crime, or the effects or instruments thereof, in order to prevent its discovery; and
(3) by harboring, concealing, or assisting in the escape of the principal of the crime, provided the accessory acts with
abuse of his public functions or whenever the author of the crime is guilty of treason, parricide, murder, or an attempt at
the life of the chief executive, or is known to be habitually guilty of some other crime.[23]

Citing the second sentence of the last paragraph of Section 6 of RA 8042, accused-appellant contends that he may not be
held liable for the offense as he was merely an employee of Craftrade and he only performed the tasks assigned to him by
his superiors. He argues that the ones who should be held liable for the offense are the officers having control,
management and direction of the agency.

As stated in the first sentence of Section 6 of RA 8042, the persons who may be held liable for illegal recruitment are the
principals, accomplices and accessories. An employee of a company or corporation engaged in illegal recruitment may be
held liable as principal, together with his employer,[24] if it is shown that he actively and consciously participated in
illegal recruitment.[25] It has been held that the existence of the corporate entity does not shield from prosecution the
corporate agent who knowingly and intentionally causes the corporation to commit a crime. The corporation obviously
acts, and can act, only by and through its human agents, and it is their conduct which the law must deter. The employee or
agent of a corporation engaged in unlawful business naturally aids and abets in the carrying on of such business and will
be prosecuted as principal if, with knowledge of the business, its purpose and effect, he consciously contributes his efforts
to its conduct and promotion, however slight his contribution may be.[26]The law of agency, as applied in civil cases, has
no application in criminal cases, and no man can escape punishment when he participates in the commission of a crime
upon the ground that he simply acted as an agent of any party.[27] The culpability of the employee therefore hinges on his
knowledge of the offense and his active participation in its commission. Where it is shown that the employee was merely
acting under the direction of his superiors and was unaware that his acts constituted a crime, he may not be held
criminally liable for an act done for and in behalf of his employer.[28]

The fundamental issue in this case, therefore, is whether accused-appellant knowingly and intentionally participated in
the commission of the crime charged.

We find that he did not.

Evidence shows that accused-appellant interviewed private complainants in the months of June, August and September in
1994 at Craftrade's office. At that time, he was employed as interviewer of Craftrade which was then operating under a
temporary authority given by the POEA pending renewal of its license.[29] The temporary license included the authority to
recruit workers.[30] He was convicted based on the fact that he was not registered with the POEA as employee of
Craftrade. Neither was he, in his personal capacity, licensed to recruit overseas workers. Section 10 Rule II Book II of the
Rules and Regulation Governing Overseas Employment (1991) requires that every change, termination
or appointment of officers, representatives and personnel of licensed agencies be registered with the POEA. Agents or
representatives appointed by a licensed recruitment agency whose appointments are not previously approved by the
POEA are considered "non-licensee " or "non-holder of authority" and therefore not authorized to engage in recruitment
activity.[31]

Upon examination of the records, however, we find that the prosecution failed to prove that accused-appellant was aware
of Craftrade's failure to register his name with the POEA and that he actively engaged in recruitment despite this
knowledge. The obligation to register its personnel with the POEA belongs to the officers of the agency.[32] A mere
employee of the agency cannot be expected to know the legal requirements for its operation. The evidence at hand shows
that accused-appellant carried out his duties as interviewer of Craftrade believing that the agency was duly licensed by
the POEA and he, in turn, was duly authorized by his agency to deal with the applicants in its behalf. Accused-appellant in
fact confined his actions to his job description. He merely interviewed the applicants and informed them of the
requirements for deployment but he never received money from them. Their payments were received by the agency's
cashier, Josephine Ong. Furthermore, he performed his tasks under the supervision of its president and managing
director. Hence, we hold that the prosecution failed to prove beyond reasonable doubt accused-appellant's conscious and
active participation in the commission of the crime of illegal recruitment. His conviction, therefore, is without basis.

This is not to say that private complainants are left with no remedy for the wrong committed against them. The
Department of Justice may still file a complaint against the officers having control, management or direction of the
business of Craftrade Overseas Developers (Craftrade), so long as the offense has not yet prescribed. Illegal recruitment is
a crime of economic sabotage which need to be curbed by the strong arm of the law. It is important, however, to stress
that the government's action must be directed to the real offenders, those who perpetrate the crime and benefit from it.

IN VIEW WHEREOF, the assailed decision of the Regional Trial Court is REVERSED and SET ASIDE. Accused-appellant is
hereby ACQUITTED. The Director of the Bureau of Corrections is ordered to RELEASE accused-appellant unless he is
being held for some other cause, and to REPORT to this Court compliance with this order within ten (10) days from
receipt of this decision. Let a copy of this Decision be furnished the Secretary of the Department of Justice for his
information and appropriate action.

SO ORDERED.

acts: Bulu Chowdury was charged with the crime of illegal recruitment in large scale by recruiting Estrella B. Calleja,
Melvin C. Miranda and Aser S. Sasis for employment in Korea. Evidence shows that accused appellant interviewed
private complainant in 1994 at Craftrades office. At that time, he was an interviewer of Craftrade which was operating
under temporary authority given by POEA pending the renewal of license. He was charged based on the fact that he was
not registered with the POEA as employee of Craftrade and he is not in his personal capacity, licensed to recruit overseas
workers. The complainants also averred that during their applications for employment for abroad, the license of Craftrade
was already expired.

For his defense Chowdury testified that he worked as interviewer at Craftrade from 1990 until 1994. His primary duty
was to interview jobapplicants for abroad. As a mere employee, he only followed the instructions given by his superiors,
Mr. Emmanuel Geslani, the agency's President and General Manager, and Mr. UtkalChowdury, the agency's Managing
Director.

Issue: Whether or not accused-appellant knowingly and intentionally participated in the commission of the crime
charged.

Held: No, an employee of a company or corporation engaged in illegal recruitment may be held liable as principal,
together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. In this case,
Chowdury merely performed his tasks under the supervision of its president and managing director. The prosecution
failed to show that the accused-appellant is conscious and has an active participation in the commission of the crime of
illegal recruitment. Moreover, accused-appellant was not aware of Craftrade's failure to register his name with the POEA
and the prosecution failed to prove that he actively engaged in recruitment despite this knowledge. The obligation
to register its personnel with the POEA belongs to the officers of the agency. A mere employee of the agency cannot be
expected to know the legalrequirements for its operation. The accused-appellant carried out his duties as interviewer of
Craftrade believing that the agency was duly licensed by the POEA and he, in turn, was duly authorized by his agency to
deal with the applicants in its behalf. Accused-appellant in fact confined his actions to his job description. He merely
interviewed the applicants and informed them of the requirementsfor deployment but he never received money from
them. Chowdury did not knowingly and intentionally participated in the commission of illegal recruitment being merely
performing his task and unaware of illegality of recruitment.

GosiacovsChing
Jaime Gosiaco, as an investmednt, granted a loan to ASB Holdings for a period of 48 days with a 10.5% interest
or 112,000
ASB issued 2 checks to cover the loan and the interest drawn against DBS Bank Makati
Gosiaco went to DBS San Juan branch to deposit the checks upon maturity but they were DISHONORED due to a
STOP PAYMENT ORDER and INSUFFICIENCY OF FUNDS
Gosiaco informed ASB 2x about the dishonor and DEMANDED REPLACEMENT CHECKS or RETURN OF THE
MONEY but to no avail
- hence a complaint for violation of BP 22 was filed with MTC San Juan
Ching was arraigned but Casta remained at large
Ching:
- denied liability, mere employee of ASB
- no knowledge how much money ASB had in the banks
- responsibility to check how much was with other dept
Gosiaco moved to implead ASB and its President Roxas but was denied because case had already been submitted
for final decision

MTC: Ching ACQUITTED of criminal liability but NOT ABSOLVED from civil liability
- as a corporate officer of ASB, she is CIVILLY LIABLE SINCE SHE WAS A SIGNATORY TO THE CHECKS

both parties appealed ot the RTC

- Gosiaco: MTC failed to hold ASB and Roxas jointly or severally liable with Ching
- Ching: no civil liability because they were contractual obligations of ASB

RTC: CHING NO CIVIL LIABILITY (obligation fell squarely on ASB), but still DENIED the motion to implead ASB
and Roxas

Gosiaco appeal to CA: RTC ERRED IN ABSOLVING CHING and upholding to not implead ASB and Roxas and in
refusing to pierce the corporate veil of ASB and hold Roxas liable

CA: RTC DECISION AFFIRMED

- amount to be recovered was a loan to ASB AND NOT TO CHING
- Roxas testimony: checks issued by Ching were for and in behalf of ASB
- -ASB CANNOT BE IMPLEADED IN A BP 22 CASE SINCE IT'S NOT A NATURAL PERSON
- -Roxas under PI
- -no need to pierce corp veil since no requisites were present

-appeal to SC via rule 45

- -WON a corporate officer who signed a bouncing check is civilly liable under BP 22
- -WON ASB can be impleaded in a BP 22 case
- -WON there's a basis to pierce the corporate veil of ASB
 Held: DENIED, without prejudice to the right of petitioner Jaime U. Gosiaco to pursue an independent civil action
against ASB Holdings Inc. for the amount of the subject checks
-BP 22, Section 1 says:
- -Where the check is drawn by a corporation, company or entity, the person or persons, who actually
signed the check in behalf of such drawer shall be liable under this Act.
-punishes the act of making and issuing bouncing checks. It is the act itself of issuing the checks which is
considered malumprohibitum, covers all types of checks.
-a corporate officer who issues a worthless check in the corporate name he may be held personally liable and he
cannot shield himself from liability from his own acts on the ground that it was a corporate act and not his
personal act
-HOWEVER, THE GENERAL RULE IS: a corporate officer who issues a bouncing corporate check can only be held
civilly liable when he is convicted
-Bautista v. Auto Plus Traders Inc: civil liability of a corporate officer in a B.P. Blg. 22 case is extinguished with
the criminal liability
-hence, by principle of stare decisis, we follow this precedent and AFFIRM THE DISCHARGE OF CHING OF ANY
CIVIL LIABILITY ARISING FROM THE BP 22 CASE FILED AGAINST HER, ON ACCOUNT OF HER ACQUITTAL IN
THE CRIMINAL CHARGE

-however, records clearly show that ASB is civilly obligated to petitioner

-Gosiaco has been proceeding from the premise that he is unable to file a separate civil action against ASB to
recover amounts- which is why he's been trying to implead ASB as a defendant in the BP 22 case, even if the case
is criminal in nature
- -anchored on Rule 111, Section 1Institution of criminal and civil action
-
(b) The criminal action for violation of Batas PambansaBlg. 22 shall be deemed to include the corresponding
civil action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees
based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the
complainant or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages,
the offended party shall pay the filing fees based on the amounts alleged therein. If the amounts are not so
alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount
awarded shall constitute a first lien on the judgment.

-COURT DISAGREES. Nowhere in B.P. Blg. 22 is it provided that a juridical person may be impleaded as an
accused or defendant in the prosecution for violations of that law, even in the litigation of the civil aspect thereof
- -statutory construction: penal laws strictly construed in favor of the accused

-HOWEVER, Gosiaco can't be prevented from recovering amounts due and demandable to him.
-rules of procedure can't defeat a substantive right
-but technically, nothing in Section 1(b) of Rule 111 prohibits the RESERVATION OF A SEPARATE CIVIL ACTION
AGAINST THE JURIDICAL PERSON ON WHOSE BEHALF THE CHECK WAS ISSUED
-WHAT THE RULES PROHIBIT IS THE RESERVATION OF A SEPARATE CIVIL ACTION AGAINST THE NATURAL
PERSON CHARGED WITH THE BP 22 VIOLATION, including such corporate officer who had signed the bounced
check
-B.P. Blg. 22 imposes a distinct civil liability on the signatory of the check which is distinct from the civil liability
of the corporation for the amount represented from the check.
- -The civil liability attaching to the signatory arises from the wrongful act of signing the check despite
the insufficiency of funds in the account, while the civil liability attaching to the corporation is itself the
very obligation covered by the check or the consideration for its execution.
- -Yet these civil liabilities are mistaken to be indistinct. The confusion is traceable to the singularity of
the amount of each.
-BP 22 itself fused this criminal liability of the signer of the check in behalf of the corp with the corresponding
civil liability of the corp itself BY ALLOWING THE COMPLAINANT TO RECOVER SUCH CIVIL LIABILITY NOT
FROM THE CORP BUT FROM THE PERSON WHO SIGNED THE CHECK
-the civil action that is impliedly instituted in the B.P. Blg. 22 action is only the civil liability of the signatory, and
not that of the corporation itself, the distinctness of the cause of action against the signatory and that against the
corporation is rendered beyond dispute

-prior to the ROC amendments: it was permissible to pursue criminal liability against the signatory while going
after the corporation itself for the civil liability

-In the B.P. Blg. 22 case: what the trial court should determine whether or not the signatory had signed the check
with knowledge of the insufficiency of funds or credit in the bank account,
-in the civil case: The trial court should ascertain whether or not the obligation itself
is valid and demandable.
 -The litigation of both questions could, in theory, proceed independently and simultaneously without being
ultimately conclusive on one or the other.

-also, if the employee has no sufficient funds to cover the debt, the corporation can't be held subsidiarily liable
- -the Revised Penal Code imposes subsidiary civil liability to corporations for criminal acts engaged in
by their employees in the discharge of their duties, said subsidiary liability applies only to felonies, and
not to crimes penalized by special laws such as B.P. Blg. 22
- -nothing in B.P. Blg. 22 imposes such subsidiary liability to the corporation in whose name the check is
actually issued
-Clearly then, should the check signatory be unable to pay the obligation incurred by the corporation, the
complainant would be bereft of remedy unless the right of action to collect on the liability of the corporation is
recognized

-concerns:
- -double recovery: BP 22 case sa the employee and civil case sacorp
-best we refer the matter to the Committee on Rules for the formulation of proper guidelines
to prevent that possibility
- -payment of filing fees in both the B.P. Blg. 22 case and the civil action against the corporation
-we see no evil or cause for distress if the plaintiff were made to pay filing fees based on the
amount of the check in both the B.P. Blg. 22 case and the civil action
-the plaintiff therein made the deliberate option to file two separate cases, even if the
recovery of the amounts of the check against the corporation could evidently be pursued
through the civil action alone.
-but in this case, CONSIDERING THE PREVIOUS LEGAL CONFUSION ON WON HE WAS
AUTHORIZED TO FILED THE CIVIL CASE AGAINST ASB, GOSIACO SHOULD BE EXEMPTED
FROM PAYING THE FILING FEES BASED ON THE AMOUNT OF THE CHECKS IF HE FILES A
CASE AGAINST ASB
-he shouldn't be barred by prescription either-- to run from the date of finality of this decision

-Let a copy of this Decision be REFERRED to the Committee on Revision of the Rules for the formulation of the
formal rules of procedure to govern the civil action for the recovery of the amount covered by the check against
the juridical person which issued it.