JAMES IENT v. TULLETT

JAMES IENT v. TULLETT

GR No. 189158

January 11, 2017

FACTS:

Petitioner Ient is a British national and the Chief Financial Officer of Tradition Asia Pacific Pte. Ltd. (Tradition Asia) in Singapore.[4] Petitioner Schulze is a Filipino/German who does Application Support for Tradition Financial Services Ltd. in London (Tradition London).

Tradition Group and Tullett are competitors in the inter-dealer broking business.

Sometime in August 2008, in line with Tradition Group's motive of expansion and diversification in Asia, petitioners Ient and Schulze were tasked with the establishment of a Philippine subsidiary of Tradition Asia to be known as Tradition Financial Services Philippines, Inc. (Tradition Philippines).[9] Tradition Philippines was registered with the Securities and Exchange Commission (SEC) on September 19, 2008

Jaime Villalon (Villalon), who was formerly President and Managing Director of Tullett

Mercedes Chuidian (Chuidian)... formerly a member of Tullett's Board of Directors

John and Jane Does

ISSUES:

On October 15, 2008, Tullett, through one of its directors, Gordon Buchan, filed a Complaint-Affidavit... against the officers/employees of the Tradition Group for violation of the Corporation Code.

Villalon and Chuidian were charged with using their former positions in Tullett to sabotage said company by orchestrating the mass resignation of its entire brokering staff in order for them to join Tradition Philippines.

With respect to Villalon, Tullett claimed that the former held several meetings between August 22 to 25, 2008 with members of Tullett's Spot Desk and brokering staff in order to convince them to leave the company. Villalon likewise supposedly intentionally failed to renew the contracts of some of the brokers. On August 25, 2008, a meeting was also allegedly held in Howzat Bar in Makati City where petitioners and a lawyer of Tradition Philippines were present. At said meeting, the brokers of complainant Tullett were purportedly induced, en masse, to sign employment contracts with Tradition Philippines and were allegedly instructed by Tradition Philippines' lawyer as to how they should file their resignation letters.

On August 26, 2008, Villalon allegedly informed Mr. Barry Dennahy, Chief Operating Officer of Tullett Prebon in the Asia-Pacific, through electronic mail that all of Tullett's brokers had resigned.

Subsequently, on September 1, 2008, in another meeting with Ient and Tradition Philippines' counsel, indemnity contracts in favor of the resigning employees were purportedly distributed by Tradition Philippines.

According to Tullett, respondents Villalon and Chuidian... violated Sections 31 and 34 of the Corporation Code which made them criminally liable under Section 144. As for petitioners Ient and Schulze, Tullett asserted that they conspired with Villalon and Chuidian in the latter's acts of disloyalty against the company.

Villalon and Chuidian filed their respective Counter-Affivadits.

Villalon claimed that the DOJ had previously proclaimed that Section 31 is not a penal provision of law but only the basis of a cause of action for civil liability. Thus, he concluded that there was no probable cause that he violated the Corporation Code nor was the charge of conspiracy properly substantiated.

Chuidian claimed that she left Tullett simply to seek greener pastures.

She argued that Section 144 as a penal provision should be strictly construed against the State and liberally in favor of the accused and Tullett has failed to substantiate its charge of bad faith on her part.

In her Counter-Affidavit,[17] petitioner Schulze denied the charges leveled against her.

she concluded that a charge of conspiracy which has for its basis Article 8 of the Revised Penal Code cannot be made applicable to the provisions of the Corporation Code.

Ient alleged in his Counter-Affidavit that the charges against him were merely filed to harass Tradition Philippines and prevent it from penetrating the Philippine market.

Tullett filed a petition for review with the Secretary of Justice to assail the foregoing resolution of the Acting City Prosecutor of Makati City.

Ient and Schulze moved for reconsideration of the foregoing Resolution by the Secretary of Justice.

Ient and Schulze brought the matter to the Court of Appeals via a petition for certiorari under Rule 65

The main bone of disagreement among the parties in this case is the applicability of Section 144 of the Corporation Code to Sections 31 and 34 of the same statute such that criminal liability attaches to violations of Sections 31 and 34.

RULING:

In a Resolution... dated February 17, 2009, State Prosecutor Cresencio F. Delos Trinos, Jr. (Prosecutor Delos Trinos), Acting City Prosecutor of Makati City, dismissed the criminal complaints.

On the issue of conspiracy, Prosecutor Delos Trinos found that since Villalon and Chuidian did not commit any acts in violation of Sections 31 and 34 of the Corporation Code, the charge of conspiracy against Schulze and Ient had no basis.

dated April 23, 2009, then Secretary of Justice Raul M. Gonzalez reversed and set aside Prosecutor Delos Trinos's resolution and directed the latter to file the information for violation of Sections 31 and 34 in relation to Section 144 of the Corporation Code against Villalon, Chuidian, Harvey, Schulze, and Ient before the proper court.

Undeniably, respondents Villalon, Chuidian and Harvey occupied positions of high responsibility and great trust as they were members of the board of directors and corporate officers of complainant.

the consolidated petitions are GRANTED

PRINCIPLES:

The provision of Section 144 of the Corporation Code is also applicable in the case at bar as the penal provision provided therein is made applicable to all violations of the Corporation Code, not otherwise specifically penalized.

After a meticulous consideration of the arguments presented by both sides, the Court comes to the conclusion that there is textual ambiguity in Section 144; moreover, such ambiguity remains even after an examination of its legislativ... e history and the use of other aids to statutory construction, necessitating the application of the rule of lenity in the case at bar.

There is no provision in the Corporation Code using similarly emphatic language that evinces a categorical legislative intent to treat as a criminal offense each and every violation of that law. Consequently, there is no compelling reason for the Court to construe Section 144 as similarly employing the term "penalized" or "penalty" solely in terms of criminal liability.

The Corporation Code was intended as a regulatory measure, not primarily as a penal statute. Sections 31 to 34 in particular were intended to impose exacting standards of fidelity on corporate officers and directors but without unduly impeding them in the discharge of their work with concerns of litigation.

WHEREFORE, the consolidated petitions are GRANTED. The Decision dated August 12, 2009 of the Court of Appeals in CA-G.R. SP No. 109094 and the Resolutions dated April 23, 2009 and May 15, 2009 of the Secretary of Justice in I.S. No. 08-J-8651 are REVERSED and SET ASIDE.