Imagine that You’re a bank relying on your appraiser’s report to approve a multimillion-peso loan. But what if the property is grossly overvalued—was it a simple error, or was there intent to deceive?

  TOPIC: Jurisprudence Covered within the 2025 Bar Examination- Commercial Law 

Can a bank appraiser in the Philippines be criminally convicted for overvaluing a property used as loan collateral if it is not proven beyond reasonable doubt that he specifically intended to influence the bank’s approval of the loan?

 

AARON CHRISTOPHER P. MEJIA vs. PEOPLE OF THE PHILIPPINES
G.R. No. 253026, December 06, 2023
949 Phil. 1040

 

FACTS OF THE CASE

Aaron Christopher Mejia was employed as an in-house property appraiser for BPI Family Savings Bank. During an internal audit, the bank uncovered straw-buying and foreclosure-rescue schemes involving several accounts where Mejia had acted as the appraiser. One such account, under Baby Irene Santos, involved a housing loan secured by a property in Antipolo City.

Mejia’s appraisal valued the property at PHP 22,815,328.00. Based on his report, the bank approved a loan to Santos for PHP 18,253,062.40—80% of the appraised value. When Santos defaulted, the property was foreclosed and later appraised at only PHP 10,333,000.00 by an external appraiser (Royal Asia Appraiser), with BPI’s internal appraisal unit valuing it even lower at PHP 8,668,197.30. BPI Family Savings Bank suffered a loss of PHP 7,920,062.00.

Mejia’s appraisal reported the building as having two storeys and a total floor area of 843.52 sqm. However, subsequent appraisals revealed the building was only one storey (split-type), with a floor area of about 265 sqm or less. Other property features were also found to be grossly overvalued.

Mejia was charged under Section 55.1(d) of Republic Act No. 8791 (General Banking Law), in relation to Section 66 of the same Act and Section 36 of R.A. 7653 (New Central Bank Act), for willfully overvaluing the property with the purpose of influencing the bank’s decision.

Mejia defended his appraisal, arguing the split-type design led him to input "2" storeys because the bank’s appraisal software did not accept "1.5." He asserted that his supervisor approved the report and that he acted in good faith.

Regional Trial Court (RTC):
Convicted Mejia, holding that his overvaluation influenced the bank’s decision and ruling the law was malum prohibitum (criminal intent not required). He was sentenced to two (2) years and one (1) day to three (3) years and one (1) day imprisonment.

Court of Appeals (CA):
Affirmed conviction, but clarified the offense is malum in se—requiring proof of specific intent to influence the bank. The CA found this intent established by Mejia’s misrepresentation of the number of storeys and failure to clarify in his report. It dismissed Mejia’s claim of good faith and supervisor approval.

Mejia then appealed to the Supreme Court, claiming there was no proof beyond reasonable doubt of criminal intent.

 

PRIMARY ISSUE BEFORE THE SUPREME COURT

Whether petitioner Mejia is criminally liable under Section 55.1(d) of the General Banking Law, given the requirement of specific intent to influence the bank’s action in overvaluing property used as collateral.

 

DECISION OF THE SUPREME COURT

Ruling:
The Supreme Court affirmed the conviction of Mejia. It ruled that while the General Banking Law is a special law, the penalized act under Section 55.1(d) requires proof of a specific intent to influence the bank. The Court held that Mejia’s actions—grossly inflating the floor area, misrepresenting the number of storeys, and omitting crucial clarifications in his report—proved he intended to influence the bank’s decision. His defense of good faith and software limitations was unconvincing, especially given his role and expertise.

 

DISPOSITIVE PORTION

“ACCORDINGLY, the Petition for Review is DENIED. The December 13, 2019 Decision and July 28, 2020 Resolution of the Court of Appeals in CA-G.R. CR No. 42488 are AFFIRMED. Petitioner Aaron Christopher P. Mejia is found GUILTY beyond reasonable doubt of violation of Section 55.1(d) of the General Banking Law of 2000. He is sentenced to suffer imprisonment with an indeterminate penalty of two (2) years and one (1) day as minimum to three (3) years and one (1) day as maximum.

SO ORDERED.”

 

Should professionals in the banking industry face criminal liability for gross mistakes or misjudgments in their reports, even if there is no clear personal gain or malicious motive?

 

IMPORTANT DOCTRINES DISCUSSED

1. Specific Intent Requirement in Special Laws:

“When a special law penalizes an act coupled with a specific intent, it is necessary for the prosecution to prove such intent as an essential element of the offense.”

• Explanation: Not all violations of special laws are mala prohibita; where the law requires a specific intent (such as influencing bank action), this intent must be proved beyond reasonable doubt.
1. Interpretation of Penal Provisions in Special Laws:

“What is controlling is the text of the law penalizing an act and whether the text makes a specific intent an essential element.”

• Explanation: The character of an act as malum prohibitum or malum in se under a special law depends on the law’s text, not its label as a special law.
2. Standard for Criminal Conviction in Overvaluation Cases:

“Not every act of overvaluation of property results in criminal liability. The specific intent to persuade a lending bank’s decision is an essential element that must be proven.”

• Explanation: Mere overvaluation is not punishable; intent to influence must be established by evidence.

 

Classification:
Criminal Law / Remedial Law (as it involves prosecution, elements of crime, and criminal procedure)

 

What do you think? Should appraisers bear such heavy responsibility, or is the Supreme Court’s standard fair? Share your thoughts below!

 

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As a Philippine law professor, let me guide you through an intriguing Supreme Court case that highlights a pivotal criminal law doctrine on special laws. This content will unpack the most important doctrines from Aaron Christopher P. Mejia vs. People of the Philippines, G.R. No. 253026, promulgated December 6, 2023, to help law students and bar reviewees master the case’s essentials.

Nature of the Case:
Criminal Law—Prosecution for violation of Section 55.1(d) of the General Banking Law, concerning overvaluation of loan collateral.

Parties:
Aaron Christopher P. Mejia (petitioner) vs. People of the Philippines (respondent).

Brief Summary:
Mejia, a bank appraiser, overvalued a property that led to a ₱7.9M loss for BPI Family Savings Bank. The core issue: whether criminal conviction under the law requires proof of intent to influence the bank. The Supreme Court affirmed his conviction, ruling that specific intent is an essential element in this case.

Should intent always be necessary for criminal liability in regulatory offenses involving professional negligence?

 

10 Important Doctrines from G.R. No. 253026 (Supreme Court, December 6, 2023):

1. Specific Intent Required in Some Special Laws
   When a special law penalizes an act “coupled with a specific intent,” such intent must be proven as an essential element for conviction (Decision, p. 8).
2. Text of the Law is Controlling
   The character of an act as malum prohibitum or malum in se under a special law depends on the law’s language, not the law’s classification alone (Decision, p. 9).
3. Not All Overvaluation is Criminal
   Criminal liability under Section 55.1(d) of the General Banking Law only arises when overvaluation is done to influence a bank’s decision, not for every error or overvaluation (Decision, p. 10).
4. Good Faith as a Defense
   Where the law requires specific intent, good faith or lack of criminal intent is a valid defense (Decision, p. 11).
5. Omissions Can Evidence Intent
   Failure to clarify discrepancies in an appraisal report may show intent to influence bank action, supporting criminal liability (Decision, pp. 15–16).
6. Comparative Appraisal Evidence
   Drastic discrepancies with independent and internal appraisals can be used to infer criminal intent in overvaluation (Decision, pp. 13–14).
7. Criminal Conviction Requires Proof Beyond Reasonable Doubt
   Even for regulatory crimes, all elements—including specific intent, if required—must be proven beyond reasonable doubt (Decision, p. 12).
8. Supervisor Approval Not a Shield
   Approval by a supervisor does not absolve an appraiser if intent to influence the bank through overvaluation is proven (Decision, p. 17).
9. Role of Professional Judgment
   Professionals have a heightened duty to ensure accuracy; intentional misrepresentation or omission is penalized under the law (Decision, pp. 17–18).
10. Affirmation of Lower Court Convictions
    Both RTC and CA convictions were affirmed, stressing the judiciary’s role in scrutinizing intent in regulatory and financial crimes (Decision, Dispositive Portion).

 

Disclaimer:
This video is for educational purposes only and does not guarantee that the content is infallible. Made using premium AI. For the full text, refer to Aaron Christopher P. Mejia vs. People of the Philippines, G.R. No. 253026, December 6, 2023.