Ient v. Tullett Prebon, G.R. No.

189158, 11 January 2017

Facts:
Petitioners James Ient (CFO) and Maharlika Schulze (Application Support) are from Tradition Asia /
Tradition Group were in charge of the establishment of the Philippine subsidiary of Tradition Asia.
Tradition Group is engaged in the inter-dealer brokerage business (3 rd largest in the world) while the
respondent Tullet Prebon (2nd largest in the world), is their competitor and was first to establish its
presence in the Philippines.

Tullet filed a complaint against the officers/employees of Tradition Group for violation of the
Corporation Code. Impleaded in the complaint are Ient and Schulze, and certain employees of
Tradition Group Villalon and Chuidan, who are former executives of Tullet. Tullet claims that Villaon
and Chuidan were using their former positions to orchestrate a mass resignation of Tullet’s Brokers.
It was even alleged that Tradition lawyers instructed Tullet’s former Brokers on how to file their
resignation letters. And that Villallon even asked the said Broker’s to call Tullet’s clients and inform
that they are moving to Tradition Philippines. According to Tullett, Villalon and Chuidian (who were
still its directors or officers at the times material to the Complaint-Affidavit) violated Sections 31 and
34 of the Corporation Code which made them criminally liable under Section 144. As for petitioners
lent and Schulze, Tullett asserted that they conspired with Villalon and Chuidian in the latter's acts of
disloyalty against the company. Tullett argued that Section 144 applies to all other violations of the
Corporation Code without exception. Article 8 of the Revised Penal Code on conspiracy was allegedly
applicable to the Corporation Code as a special law with a penal provision

Section 144 - Violation of the Criminal code is criminal in character and it would merit a penalty of
imprisonment or fine at the discretion of the court. Tullet connected the violation of Section 31 and
34 to the penal clause of the Corp Code.

Issue
Whether or Not Sec 144 of the Corporation Code is applicable to Section 31 and 34 such that criminal
liability attaches to violations of Sec 31 and 34

Ruling
No. Court held that Section 144 cannot be applied because Sections 31 and 34 already provides a
language on how to sanction (penalize = criminal in character) violations.

Rule of Lenity - If penal statutes are ambiguous, rule in favor of the accused.

Penal clause of Corporation code only applies if there is an expressed statement in a particular
provision stating that the violation thereof is penal in character. Since the provision loyalty of
officers, does not expressly state that Section 144 applies, then it does not apply. It cannot be
penal/criminal in character.

Section 144 - Violation of the Criminal code is criminal in character and it would merit a penalty of
imprisonment or fine at the discretion of the court. They connected the violation of Section 31 and 34
to the penal clause of the Corp Code.
Court held that Section 144 cannot be applied because Sections 31 and 34 already provides a
language on how to sanction (penalize = criminal in character) violations.
Rule of Lenity - If penal statutes are ambiguous, rule in favor of the accused.

Penal clause of Corporation code only applies if there is an expressed statement in a particular
provision stating that the violation thereof is penal in character. Since the provision on the loyalty of
officers (Section 31 and 34), does not expressly state that Section 144 applies, then it does not apply.
It cannot be penal/criminal in character.

There is a provision in the Corporation code which is penal in character - where Section 144 applies,
that is if the Corporate officers refuse the Stockholder to inspect the books of the Corporation. In
such case, there is an expressed statement in the Revised Corporation Code that violation thereof is
penal in character.

Applying the rule of Lenity, since Section 31 does not provide that it is penal in character under the
general rule, this ambiguity shall be resolved in favor of the accused and shall be construed against
the state.