HONORIO SAAVEDRA, JR., PETITIONER, VS. DEPARTMENT OF JUSTICE, REGIONAL TRIAL COURT OF PASIG, BRANCH 67, AND GREGORIO M. RAMOS, RESPONDENTS.

This is a petition for certiorari
and prohibition seeking the nullification of Department of Justice (DOJ)
Resolution dated 6 November 1989^[1] which dismissed petitioner’s Petition for
Review of the Provincial Prosecutor’s Resolution dated 25 July 1988^[2] finding probable cause for perjury against
petitioner, and DOJ Resolution dated 7 March 1990^[3] denying reconsideration.

On 2 July 1987, the owners of Pine Philippines, Inc. (PPI for
brevity), including private
respondent Gregorio M. Ramos, sold their shares of stock to petitioner Honorio
Saavedra, Jr., for P1.2 million payable in installments. A “Memorandum of Agreement” and a
“Deed of Assignment” were executed to evidence the transaction. The former document contained an automatic
rescission clause in case any installment was not paid on its due date.

Payments were made in the total amount of P936,380.00, leaving a
balance of P263,620.00 payable on 15 September 1987. On said date, however, petitioner withheld payment for the reason
that the sellers failed to comply with their warranties. Nevertheless, the balance was deposited in escrow subject to
release once the warranties were complied with.

On 5 November 1987, petitioner filed in behalf of PPI a verified
civil complaint for damages^[4]
against private respondent, alleging that he (petitioner) was the President and
principal stockholder of the company. By way of answer, respondent Ramos questioned petitioner’s capacity to
sue in behalf of PPI, claiming that petitioner ceased to be its president when
the sale of the PPI shares of stock to him was automatically rescinded on 15
September 1987.

After executing a document entitled “Rescission of
Memorandum of Agreement,” Ramos and his group filed a case^[5]
on 20 November 1987 with the Securities
and Exchange Commission (SEC) praying that the rescission be declared valid and
legal. Petitioner filed a motion to
dismiss alleging lack of jurisdiction on the part of the SEC but the same was
denied on 11 December 1987. Petitioner
went to the Supreme Court which, on 21 March 1988, upheld the jurisdiction of
the SEC and ruled that under Sec. 5, par. (b), of P.D. No. 902-A, the SEC has
“primary and exclusive” jurisdiction over the twin issues of
ownership and automatic rescission, they being intracorporate disputes.^[6] Accordingly, proceedings in Civil Case No.
55247 were suspended.

On 7 December 1987,
during the pendency of SEC Case No. 3257, private respondent filed a criminal
case for perjury against petitioner with the Provincial Prosecutor’s Office in
Pasig alleging that petitioner perjured himself when he declared in the
verification of the complaint in Civil Case No. 55247 that he was the President
of PPI.^[7] In his answer?affidavit, petitioner
contended that since the issues of ownership and automatic rescission
were still pending and unresolved in the SEC, there was
no basis to the charge that he asserted a falsehood by claiming to be the
President of the company especially when he was such per records extant with
the SEC.^[8]

By Resolution dated 25
July 1988, the Provincial Prosecutor found a prima facie case for perjury
against petitioner and on 26 October 1988 filed the corresponding Information
with the Regional Trial Court of Pasig, docketed as Crim. Case No. 74919.^[9] The evidence supporting the charge was the
Secretary’s Certificate dated 5 December 1987 reflecting private respondent’s
election as President of PPI by the former owners thereof when they convened
following the automatic revocation of the “Memorandum of Agreement”
and “Deed of Assignment.”

Petitioner sought a
review of the foregoing Resolution with public respondent DOJ but the latter
subsequently came up with the Resolution now under consideration, upholding the
finding of probable cause for perjury, ruling as follows:^[10]

“There is probable cause against you for prosecution as
evidenced by the Secretary’s Certificate dated December 5, 1987 extant on
record. This evidence is a mute but eloquent witness affirming the claim of Ramos that he
is the rightful President of PPI. Indeed, the Secretary’s Certificate alluded to readily shows that the
original membership of the Board was reconvened and reassembled, proving the
fact that the presidency of PPI is lodged with Ramos.

“Moreover, in view
of the rescission of the memorandum of agreement, deed of assignment and
contract of lease, you lost your rights and interest over the shares of stock previously
delivered to you by virtue of the subject agreement. Consequently, you likewise lost your right
to assume management over the corporation PPI. When you thus stated in your complaint that you were President of PPI,
such assertion constituted a lawful (sic) and deliberate assertion of
falsehood” (underscoring supplied).

A Motion for Reconsideration having proved unsuccessful,
petitioner took the instant
recourse.

Petitioner contends that
respondent DOJ gravely abused its discretion when it affirmed the findings of
the Provincial Prosecutor that he made a “deliberate assertion of
falsehood” on the basis of the conclusion that automatic rescission had
set in. For, the jurisdiction to rule
on that question of automatic rescission is lodged with the Securities and
Exchange Commission. Since the issue
has not yet been resolved, the DOJ should have deferred the proceedings.

There is merit in the
petition. In Saavedra, Jr. v. SEC, we categorically pronounced that:

“x x x the dispute at bar is an intracorporate dispute that
has arisen between and among the principal stockholders of the corporation due
to the refusal of the defendants (now petitioners) to fully comply with what
has been covenanted by the parties. Such dispute involves a controversy ‘between
and among stockholders,‘
specifically as to plaintiffs’ right, as stockholders, over unpaid assignment
of shares and the validity of defendants’ acquisition of the same. In other words, the present case involves an intracorporate dispute as to who has the right to remain and act as owners-stockholders of the
corporation.

“Pursuant to PD No. 902-A, as amended, particularly Section
5(b) thereof, the primary and exclusive jurisdiction over the present case properly
belongs to the SEC x x x” (underscoring supplied).^[11]

Under the doctrine of
primary jurisdiction, courts cannot and will not determine a controversy
involving a question which is
within the jurisdiction of an administrative tribunal^[12] having been so placed within its special
competence under a regulatory scheme. In such instances the judicial process is suspended pending referral to
the administrative body for its view on the matter in dispute.^[13]

Consequently, if the
courts cannot resolve a question which is within the legal competence of an
administrative body prior to the resolution of that question by the
administrative tribunal, especially where the question demands the exercise of
sound administrative discretion requiring the special knowledge, experience and
services of the administrative agency to ascertain technical and intricate
matters of fact, and a uniformity of ruling is essential to comply with the
purposes of the regulatory statute administered,^[14] much less can the Provincial Prosecutor
arrogate to himself the jurisdiction vested solely with the SEC.

In the case at bar, the
applicable regulatory statute is P.D. No. 902-A conferring upon the SEC the
legal competence to rule on intracorporate disputes, which competence had
already been upheld by us in a number of cases.^[15]
Considering that it was definitely
settled in Saavedra, Jr.
v. SEC that the issues of ownership and automatic
rescission are intracorporate in nature, then the Provincial Prosecutor,
clearly, has no authority whatsoever to rule on the same. In fact, if we were to uphold the validity
of the DOJ Resolutions brought before us, as respondents suggest, we would be sanctioning a flagrant usurpation or
preemption of that primary and exclusive jurisdiction which SEC already
enjoys. Obviously, it cannot be
done. Thus, the Provincial Prosecutor
upon being confronted with the issue of whether the sale of stocks to
petitioner was automatically cancelled while in the course of determining
probable cause for perjury, should have withheld filing any information against
the accused.

Public respondent DOJ in attempting to justify the action of the
Provincial Prosecutor avers that the latter is empowered to make a preliminary
ruling on the matter for the purpose of finding probable cause against
petitioner, and that petitioner may raise the pendency of the issue before the
SEC as his defense at the trial proper.

We are not persuaded. The
duty of a prosecutor during preliminary investigation is not only to find
evidence to warrant continuation of the criminal process against an accused. Of equal importance, and it has been
repeated often enough, is his duty to protect the innocent from hasty,
expensive and useless trials.^[16] This duty, in addition to the
“primary and exclusive” jurisdiction of the SEC, demands the outright
termination of the criminal prosecution of petitioner which, at the very
outset, was already bereft of factual and legal bases. Indeed, the prosecution of petitioner cannot
be based on a mere Secretary’s Certificate which cannot attest to the validity
of the automatic rescission, hence, cannot likewise settle the question as to
who between petitioner and private respondent is the lawful President of PPI.

Besides, the Secretary’s
Certificate is dated 5 December 1987, while the alleged false statement was
made on 5 November 1987, or one month before when the verified complaint for
damages was filed. Quite obviously, the
truthfulness of a statement, or lack of it, cannot be made to depend on a
certificate that was not existing yet when the statement in question was
made. Even assuming the validity of
Ramos’ election as President of PPI as reflected in the Secretary’s Certificate, it does not prove that petitioner was not President on 5 November
1987 when the civil action was instituted.

Be that as it may, the outcome of SEC Case No. 3257 is not determinative of whether or not the charge for perjury against
petitioner can prosper. Even if private
respondent Ramos succeeds in proving the validity of the automatic rescission
of the sale before the SEC, it does not necessarily mean that the criminal
prosecution has basis. There are four
(4) elements of the crime of perjury to be taken into account in determining
whether there is a prima facie case, to wit: (a) that the accused made a statement under
oath or executed an affidavit upon a material matter; (b) that the statement or
affidavit was made before a competent officer, authorized to receive and
administer oath; (c) that in that statement or affidavit, the accused made a
willful and deliberate assertion of a falsehood; and, (d) that the sworn
statement or affidavit containing the falsity is required by law or made for a
legal purpose.^[17]

Clearly, mere assertion of a falsehood is not enough to amount to
perjury. The assertion must be
deliberate and willful. While there may
have been a falsehood asserted, which we are not prepared to accept, no
evidence exists to show that the same was done deliberately and willfully. On the contrary, the records tend to show
that the assertion was done in good faith, in the belief that the non-payment
of the last installment price was justified by the sellers’ non-compliance with
their warranties. Besides, petitioner
alleges that he has deposited the balance in escrow, which is not disputed. Consequently, a finding of probable cause does not follow as a matter of course even if
SEC decides adversely against petitioner, for an essential element of the crime
appears to be wanting in the case before us, i.e., that the falsehood is
willful and deliberate.

Moreover, as a rule, pleadings need not be verified unless
otherwise required by the Rules of Court, and no rule requires complaints for
damages, as in the case before us, to be under oath. Since the complaint filed by petitioner against private respondent
is not required to be verified, another essential element of the crime of
perjury is absent, i.e., that the sworn statement containing the falsity is
required by law. Consequently,
petitioner cannot be prosecuted on the basis of an alleged falsehood made in a
verified pleading which is not mandated by law to be verified.^[18]

Verily, there is grave abuse of discretion in the issuance of the
Resolution of 25 July 1988 finding a prima facie case for perjury against
petitioner. A fortiori, the assailed
DOJ Resolutions must be struck down as having been issued without sufficient
factual and legal bases. Correspondingly, the Information filed with the Pasig Trial Court
pursuant thereto must likewise be dismissed.

WHEREFORE, the petition is GRANTED. The questioned Resolutions dated 6
November 1989 and 7 March 1990 of respondent Department of Justice sustaining
the Provincial Prosecutor in finding probable cause for perjury against
petitioner are NULLIFIED and SET ASIDE.

Conformably herewith, the Regional Trial Court of Pasig, Branch
67, or whichever branch of the same court Crim. Case No. 74919 entitled
“People v. Honorio Saavedra, Jr.,” may be assigned, is directed to DISMISS the case. The bailbond
posted for the provisional liberty of the accused, if any, is cancelled and
released.

SO ORDERED.

Cruz, (Chairman), Davide, Jr.,
and Quiason, JJ., concur.

Griño-Aquino, J., on official
leave.

^[1]
Penned by then Undersecretary Artemio
G. Tuguero, Rollo, pp. 26-28.

^[2]
Rollo, pp. 30-32.

^[3]
Rollo, p. 29.

^[4]
Pine Philippines, Inc. v.
Gregorio M. Ramos, Civil Case No. 55427, RTC, Br. 166, Pasig.

^[5]
Ramos v. Saavedra, Jr, SEC Case No. 3257.

^[6]
Saavedra, Jr. v. SEC, G.R. No. 80879, 21 March 1988, 159 SCRA 57.

^[7]
I.S. No. 87-10773.

^[8]
Rollo, p. 19.

^[9]
Raffled to Branch 67.

^[10]
Rollo, p. 27.

^[11]
Note 6, p. 60.

^[12]
Brett v. Intermediate Appellate Court, G.R. No. 74223,
27 November 1990, 191 SCRA 687, 698.

^[13]
Industrial Enterprises, Inc. v.
Court of Appeals, G.R. No. 88550, 18 April 1990, 184 SCRA 426, 432.

^[14]
Note 6, pp. 61-62. See also Pambujan Sur United Mine
Workers v. Samar
Mining Co., Inc., 94 Phil. 932 (1954).

^[15]
Wack Wack Condominium Corporation v. Court of Appeals, G.R. No. 78490,
23 November 1992, 215 SCRA 850,
855; Rural Bank of Salinas, Inc. v. Court of Appeals, G.R. No. 96674, 26
June 1992, 210 SCRA 510, 514;
Securities and Exchange Commission v. Court of Appeals, G.R. No. 93832, 23
August 1991, 201 SCRA 124, 134; Philippine School of Business Administration v.
Leano, G.R. No. 58468, 24 February 1984, 127 SCRA 778, 782.

^[16]
People v. Poculan, G.R. Nos. 70565-67, 9 November
1988, 167 SCRA 176, 192; Rodis, Sr. v. Sandiganbayan, G.R.
Nos. 71404-09, 26 October 1988, 166 SCRA 618, 623.

^[17]
Diaz v. People, G.R. No. 65006, 31 October 1990, 191 SCRA 86, 93.

^[18]
Flordelis v. Himalaloan, No.
L-48088, 31 July 1978, 84 SCRA 477.