Ient and Shulze vs.

Tullet

Topic: Penal law

Facts:
 Petitioner Ient is a British national and the Chief Financial Officer of Tradition Asia Pacific Pte. Ltd
(Tradition Asia) in Singapore while petitioner Schulze is a Filipino/German who does Application Support
for Tradition Financial Services Ltd in London (Tradition London). Tradition Asia and Tradition London
are subsidiaries of Compagnie Financiere Tradition and are part of the “Tradition Group”, the third largest
group of Inter-dealer Brokers (IDB) in the world while the corporate organization of which respondent
Tullet is a part.
 Tullet was the first to establish a business presence in the Phil. And had been engaged in the inter-dealer
broking business or voice brokage here since 1995.
 Sometime in August 2008, in line with “Tradition Group’s” motive to expansion and diversification in Asia,
petitioner Ient and Schulze were tasked with the establishment of a Philippine subsidiary of “Tradition
Asia” to be known as “Tradition Philippines” which was then registered with the Securities and Exchange
Commission on September 19, 2008.
 Tullet, through Gordon Buchan filed a Complaint-Affidavit with the City Prosecutor Office in Makati
against the officers/employees of the “Tradition Group” for violation Section 31 and Section 34 of of the
Corporate Code which according to Tullet, made them liable under Section 144. Impleaded as
respondents in the Complaint-Affidavit were
o Petitioner, James Ient
o Petitioner, Maharlika Schulze,
o Jaime Villalon, who was formerly President and Managing Director of Tullet,
o Mercedes Chuidian, who was formerly a member of Tullet’s Board of Directors
Villalon and Chuidian were charged with using their former positions in Tullet to sabotage the company
by orchestrating the mass resignation of its brokering staff in order for them to join “Tradition Philippines”
which was evident on their conduct of several meetings with the employees. According to Tullet,
petitioners Ient and Shulze have conspired with Villalon and Chuidian in the latter ’s act of disloyalty
against the company.
 Petitioners argued that there could be no violation of Section 31 and 34 of the Corporation Code as these
sections refer to corporate acts or corporate opportunity and that Section 144 of the same Code cannot
be applied to Section 31 and 34 since these sections already contained corresponding penalties or
remedies for violation thereof; and conspiracy under the Revised Penal Code cannot be applied to
Section 31 and 34 of the Corporation Code.
 The City Prosecutor of Makati dismissed the criminal complaint however, on the respondent’s appeal to
Department of Justice, the dismissal was reversed finding the arguments of the respondent proper. The
Court of Appeals affirmed the decision of Secretary of the DOJ.
Issue:
Whether or not Section 144 of the Corporation Code applies to Section 31 and 34 of the same code, thus
making it a penal offense so that petitioners could be criminally liable
Held/Ruling:

No. Petitions are granted. Secretary of Justice’s resolution and the Court of Appeals decision are reversed and
set aside.

The Corporation Code was intended as a regulatory measure, not primarily as a penal statute. Section 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.

When Congress intends to criminalize certain acts it does so in plain, categorical language, otherwise, such a
statute would be susceptible to constitutional attack.