United Coconut Planters Bank v. Secretary of Justice

Summary

UCPB filed criminal charges against former executives Antiporda and Carreon for allegedly authorizing unauthorized bonuses in 1998 totaling over P117 million despite subsidiary losses. The case centered on two key issues: whether Section 144's criminal penalties apply to Section 31's civil liability provisions of the Corporation Code, and whether the 2007 complaint was time-barred. The Supreme Court definitively ruled that Section 144 does not cover Section 31 violations, applying the rule of lenity due to textual ambiguity and noting that Section 31 provides only civil remedies. The Court held that the 4-year prescriptive period under Civil Code Article 1146 applies to Section 31 violations, not the longer periods under Act No. 3326 for criminal offenses. Since the bonuses were paid in 1998, the action prescribed in 2002, making the 2007 complaint untimely. This case clarifies the boundary between civil and criminal liability under corporate law and establishes important precedent on prescription periods for director/officer liability cases.