G.R. No. 210612, 9 October 2017


In March 2001, private complainant Herminia Alcid, Jr. (Herminia, Jr.) met a certain Geraldine Alejandro (Geraldine) who introduced herself as the head of the Business Center of MMG International Holdings Co., Ltd. (MMG). Geraldine was then soliciting investments and has shown a brochure showcasing the investments and businesses of the said entity. Herminia, Jr. was also shown Articles of Partnership to prove that MMG is registered with the ‘Securities and Exchange Commission (SEC).

The Articles of Partnership showed accused-appellant as a general partner who has contributed ₱49,750,000.00 to MMG. The other accused were shown to be limited partners who have contributed ₱50,000.00 each. Convinced by the representations of Geraldine, Herminia, Jr. invested ₱50,000.00 with MMG on April 20, 2002. Subsequently, all the interests and principal were promptly paid, which induced him to make a bigger investment. On May 2, 2002, Herminio, Jr. and his father, Herminia, Sr., made a joint investment of ₱200,000.00. Later, Geraldine was also able to convince Herminia, Jr.’s sister, .Melanie, who made an investment of ₱50,000.00 with MMG.

The private complainants’ investments were covered by a notarized Memorandum of Agreement (MOA), signed by accused-appellant, which stipulated, among others, that MMG was being represented by its President, herein accused-appellant, and that the investors will be earning 2.5o/o monthly interest income from the capital they have invested. Subsequently, the complainants received several post-dated checks covering their investments.

However, when they tried to deposit the checks, their banks informed them that these were dishonored because MMG’s accounts in the bank from which the checks were drawn were already closed. The complainants then demanded from the accused the return of their money, but their demands were unheeded. The private complainants and other investors then went to the SEC to file a complaint, where they discovered that MMG was not a registered issuer of securities. The SEC forwarded their complaint to the City Prosecutor of Makati.

Subsequently, on April 11, 2003, the Assistant City Prosecutor of Makat1 City filed two separate Informations4 with the RTC of Makati City charging accused-appellant, together with Evelyn E. Mateo, Carmelita B. Galvez, Romeo L. Esteban, Galileo J. Saporsantos and Nenita S. Saporsantos with the crime of syndicated estafa. The Informations were similarly worded, except as to the dates of the commission of the crime, the names of the complainants, and the amounts obtained from them. Among the accused, only accused-appellant was arrested and when arraigned on February 19, 2004, he pleaded not guilty to all the charges.

On October 22, 2008, the RTC rendered its Judgment finding accused-appellant guilty as charged.


Whether or not the suspension of all claims as an incident to MMG Group of Companies’ corporate rehabilitation also contemplate the suspension of criminal charges filed against herein accused-appellant as an officer of the distressed corporation?


No. Citing the case of Rosario v. Co, the ruling of this Court in Panlilio, et al. v. RTC, Branch 51, City of Manila, et al., to wit:

x x x x

x x x There is no reason why criminal proceedings should be suspended during corporate rehabilitation, more so, since the prime purpose of the criminal action is .to punish the offender in order to deter him and others from committing the same or similar offense, to isolate him from society, reform and rehabilitate him or, in general, to maintain social order. As correctly observed in Rosario, it would be absurd for one who has engaged in criminal conduct could escape punishment by the mere filing of a petition for rehabilitation by the corporation of which he is an officer.

The prosecution of the officers of the corporation has no bearing on the pending rehabilitation of the corporation, especially since they are charged in their individual capacities. Such being the case, the purpose of the law for the issuance of the stay order is not compromised, since the appointed rehabilitation receiver can still fully discharge his functions as mandated by law. It bears to stress that the rehabilitation receiver is not charged to defend the officers of the corporation. If there is anything that the rehabilitation receiver might be remotely interested in is whether the court also rules that petitioners are civilly liable. Such a scenario, however, is not a reason to suspend the criminal proceedings, because as aptly discussed in Rosario, should the court prosecuting the officers of the corporation find that an award or indemnification is warranted, such award would fall under the category of claims, the execution of which would be subject to the stay order issued by the rehabilitation court. x x x

*Case Digest by Mary Tweetie Antonette G. Semprun, JD – IV, Andres Bonifacio College, SY 2019 – 2020