March 30, 1914

WEST COAST LIFE INSURANCE CO., plaintiff,

vs.
GEO. N. HURD, JUDGE OF COURT OF FIRST INSTANCE, defendant.
Moreland, J.:
SUMMARY: The West Coast Insurance Co., its general manager, and an agent, were charged
with libel. The information charged them of spreading malicious rumors about the financial
stability of a competitor company. Instead of ordering their arrest, the CFI summoned them to
appear before the court. Counsel for the accused moved to quash the information and the
summons on the ground that the CFI cannot acquire criminal jurisdiction over a corporation. SC
upheld this contention, holding that under the prevailing law, there is no provision allowing the
arrest or arraignment of a corporation; nor can criminal charges be filed against corporations;
and since the Code of Criminal Procedure provides only for arrest, the process by which the
corporation and the other accused was summoned is invalid. The charge was quashed with
respect to the corporation.
DOCTRINE: The prevailing law on criminal procedure could not have contemplate
corporations, since they cannot be arrested or criminally charged in the same way that a natural
person can. Corporations can only be prosecuted for crimes when there is an express provision
of law allowing and providing for it.
NATURE: Petition for prohibition arising from a criminal action for libel.
FACTS
WEST COAST Life Insurance Co. is a foreign life insurance corporation duly organized
under Californian law and doing business in the Philippines. John NORTHCOTT is its
general agent and manager while Manuel C. GREY is one of its agents.
Dec. 16, 1912 An information for libel was filed before the CFI Manila against West
Coast, Northcott, and Grey (West Coast et.al.) by the assistant prosecutor of Manila.
o ALLEGATION: West Coast, Northcott, and Grey were accused of printing and
distributing a large number of malicious circulars, written in Spanish,
questioning the financial stability and management of a competitor, the Insular
Life Insurance Company, exposing it to contempt and ridicule and damaging its
business and reputation, thus:
o " 'First. For some time past various rumors are current to the effect that the
Insular Life Insurance Company is not in as good a condition as it should be at
the present time, and that really it is in bad shape. Nevertheless, the
investigations made by the representative of the "Bulletin" have failed fully to
confirm these rumors. It is known that the Insular Auditor has examined the
books of the company and has found that its capital has diminished, and that by
direction of the said official the company has decided to double the amount of its
capital, and also to pay its reserve fund. All this is true.'
Dec. 17, 1912 Respondent CFI Judge Hurd issued a process summoning West Coast
et.al. to appear before the court and answer the charge.
Dec. 20, 1912 - West Coast et.al. moved to quash the information on the ground that the
Court had no jurisdiction over West Coast because the process and the information are
void.

CFI denied the motion and ordered West Coast et.al. to appear before the court on Dec.
28, 1912. Hence, this petition.

ISSUES (HELD)
1) W/N the CFI can summon a corporation to answer for a criminal complaint (NO)
2) W/N the process in question was valid (NO)
RATIO
1) THEN-PREVAILING CODE OF CRIMINAL PROCEDURE DID NOT CONTEMPLATE
CORPORATIONS
Gen. Orders No. 58, 5: An information is "an accusation in writing charging a person
with a public offense." 6 provides for the amendment of the information when the name
of the accused is unknown. These and the other provisions relating to arraignment,
counsel, demurrers, and pleas, all indicate that the Code did not intend to include
corporations within the ambit of its provisions.
The only process authorized in the Code is an arrest. The provisions on arrest
contemplate the bodily seizure and confinement of a person.
The Code does not authorize the arrest or arraignment of a corporation. Since
Philippine courts have no common law jurisdiction, their jurisdiction is limited to that
prescribed in the statutes, either under American or Spanish criminal procedure. In the
Spanish law, corporations (or their closest analogues) cannot be charged criminally, as it
could not commit a crime with a willful purpose or malicious intent. Criminal actions
against corporations would have to be proceeded with against the officers of the
corporation and not against the corporation itself.
The cases cited by the prosecution all refer to instances where there was a statute
providing for the criminal liability of corporations and the procedure for prosecuting
them, or instances of common law jurisdiction. No case was cited which allowed a
corporation to be prosecuted without express provision of statute or common law
jurisdiction.
2) PROCESS IN QUESTION IS NOT AUTHORIZED BY LAW
As the Code of Criminal Procedure contemplates only arrests, the process issued by the
CFI could not have been valid, since, under the circumstances of their creation, the
authority of Philippine courts with respect to criminal matters is as expressly confined by
statute or which is necessary to imply from such authority in order to fully and
adequately carry out the express authority conferred.
The CFI has no authority to devise its own processes and procedure. This authority is
vested in the legislature.
Even if there are penal laws which may provide for criminal liability of corporations, it
cannot be said that courts are authorized to promulgate special processes and
procedures to implement these laws, when the legislature itself has neglected to do so.
Under the prevailing law, bringing criminal actions against corporations requires many
additions to the present criminal procedure. It is indeed the duty of courts to punish
criminals, but it is also their duty follow prescribed rules of procedure and not to proceed
in an unauthorized manner.
DISPOSITION: Petition granted. CFI prohibited from proceeding against West Coast.