G.R. No. 180064, September 16, 2013
JOSE U. PUA AND BENJAMIN HANBEN U. PUA, Petitioners, v. CITIBANK, N.A., Respondent.
D E C I S I O N
A criminal charge for violation of the Securities Regulation Code is a specialized dispute. Hence, it must first be referred to an administrative agency of special competence, i.e., the SEC. Under the doctrine of primary jurisdiction, courts will not determine a controversy involving a question within the jurisdiction of the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the specialized knowledge and expertise of said administrative tribunal to determine technical and intricate matters of fact. The Securities Regulation Code is a special law. Its enforcement is particularly vested in the SEC. Hence, all complaints for any violation of the Code and its implementing rules and regulations should be filed with the SEC. Where the complaint is criminal in nature, the SEC shall indorse the complaint to the DOJ for preliminary investigation and prosecution as provided in Section 53.1 earlier quoted.Records show that petitioners’ complaint constitutes a civil suit for declaration of nullity of contract and sums of money with damages, which stemmed from respondent’s alleged sale of unregistered securities, in violation of the various provisions of the SRC and not a criminal case such as that involved in Baviera.
We thus agree with the Court of Appeals that petitioner committed a fatal procedural lapse when he filed his criminal complaint directly with the DOJ. Verily, no grave abuse of discretion can be ascribed to the DOJ in dismissing petitioner’s complaint.32 (Emphases and underscoring supplied)
SEC. 53. Investigations, Injunctions and Prosecution of Offenses. –On the other hand, Sections 56, 57, 58, 59, 60, 61, 62, and 63 of the SRC pertain to civil suits involving violations of the same law. Among these, the applicable provisions to this case are Sections 57.1 and 63.1 of the SRC which provide:chanroblesvirtualawlibrary
53.1. The Commission may, in its discretion, make such investigations as it deems necessary to determine whether any person has violated or is about to violate any provision of this Code, any rule, regulation or order thereunder, or any rule of an Exchange, registered securities association, clearing agency, other self-regulatory organization, and may require or permit any person to file with it a statement in writing, under oath or otherwise, as the Commission shall determine, as to all facts and circumstances concerning the matter to be investigated. The Commission may publish information concerning any such violations, and to investigate any fact, condition, practice or matter which it may deem necessary or proper to aid in the enforcement of the provisions of this Code, in the prescribing of rules and regulations thereunder, or in securing information to serve as a basis for recommending further legislation concerning the matters to which this Code relates: Provided, however, That any person requested or subpoenaed to produce documents or testify in any investigation shall simultaneously be notified in writing of the purpose of such investigation: Provided, further, That all criminal complaints for violations of this Code, and the implementing rules and regulations enforced or administered by the Commission shall be referred to the Department of Justice for preliminary investigation and prosecution before the proper court: Provided, furthermore, That in instances where the law allows independent civil or criminal proceedings of violations arising from the same act, the Commission shall take appropriate action to implement the same: Provided, finally, That the investigation, prosecution, and trial of such cases shall be given priority.chanrob1esvirtualawlibrary
SEC. 57. Civil Liabilities Arising in Connection With Prospectus, Communications and Reports. – 57.1. Any person who:Based on the foregoing, it is clear that cases falling under Section 57 of the SRC, which pertain to civil liabilities arising from violations of the requirements for offers to sell or the sale of securities, as well as other civil suits under Sections 56, 58, 59, 60, and 61 of the SRC shall be exclusively brought before the regional trial courts. It is a well-settled rule in statutory construction that the term “shall” is a word of command, and one which has always or which must be given a compulsory meaning, and it is generally imperative or mandatory.35 Likewise, it is equally revelatory that no SRC provision of similar import is found in its sections governing criminal suits; quite the contrary, the SRC states that criminal cases arising from violations of its provisions should be first referred to the SEC.
(a) Offers to sell or sells a security in violation of Chapter III;
(b) Offers to sell or sells a security, whether or not exempted by the provisions of this Code, by the use of any means or instruments of transportation or communication, by means of a prospectus or other written or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall fail in the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission, shall be liable to the person purchasing such security from him, who may sue to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no longer owns the security.
x x x x
SEC. 63. Amount of Damages to be Awarded. – 63.1. All suits to recover damages pursuant to Sections 56, 57, 58, 59, 60 and 61 shall be brought before the Regional Trial Court which shall have exclusive jurisdiction to hear and decide such suits. The Court is hereby authorized to award damages in an amount not exceeding triple the amount of the transaction plus actual damages.
x x x x (Emphases and underscoring supplied)
1Rollo, Vol. I, pp. 10-34.cranad
2 Id. at 38-56. Penned by Associate Justice Japar B. Dimaampao, with Presiding Justice Ruben T. Reyes (now retired Associate Justice of the Supreme Court) and Associate Justice Mario L. Guariña III, concurring.cranad
3 Id. at 64-67. Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate Justices Rosalinda Asuncion-Vicente and Enrico A. Lanzanas, concurring.cranad
4 Id. at 176-185. Penned by Executive Judge Raul V. Babaran.cranad
5 Id. at 211-214.cranad
6 Id. at 69-81.cranad
7 Id. at 14.cranad
8 The various pleadings filed by petitioners before the RTC were docketed as Civil Case No. 2387.cranad
9Rollo, pp. 39 and 70.cranad
11 Id. at 39 and 70-71. Namely, AERIS II, CERES II, and PALMYRA, issued by Aeris Finance, Ltd., Ceres II Finance, Ltd., and Palmyra Funding, Limited, respectively.cranad
12 Id. at 39 and 71.cranad
13 Id. at 72 and 75-77.cranad
14 Id. at 40-41.cranad
15 Id. at 140-163. Dated January 10, 2003.cranad
16 Id. at 152-155.cranad
17 Id. at 164-173. Vigorous Opposition dated January 16, 2003.cranad
18 Id. at 168-169.cranad
19 Id. at 176-185.cranad
20 Id. at 180-181.cranad
21 Id. at 186-200. Dated June 2, 2003.cranad
22 Id. at 202-210. Opposition with Motion to Declare Defendant in Default dated June 5, 2003.cranad
23 Id. at 211-214.cranad
24 Id. at 287-327. Dated September 15, 2003.cranad
25 Id. at 38-56.cranad
26 G.R. Nos. 168380 and 170602, February 8, 2007, 515 SCRA 170.cranad
27Rollo, pp. 54-55.cranad
28 Id. at 357-371. Motion for Reconsideration dated June 7, 2007.cranad
29 Id. at 64-67.cranad
30 Id. at 26.cranad
31Rollo, Vol. II, pp. 445-504. Comment dated October 9, 2008.cranad
32Baviera v. Paglinawan, supra note 26, at 182-183.cranad
33 Id. at 182.cranad
34Magno v. People, G.R. No. 171542, April 6, 2011, 647 SCRA 362, 371, citing Machado v. Gatdula, G.R. No. 156287, February 16, 2010, 612 SCRA 546, 559.cranad
35Enriquez v. Enriquez, G.R. No. 139303, August 25, 2005, 468 SCRA 77, 84, citing Lacson v. San Jose-Lacson, G.R. Nos. L-23482, L-23767, and L-24259, August 30, 1968, 24 SCRA 837, 848.