Effect of payment of the value of the worthless check prior to filing of Information for BP 22; after filing of Information in Court; and distinguished from Estafa under Art. 315 par. 2 (d)– “Thus, although payment of the value of the bounced check, if made beyond the 5-day period provided for in B.P Blg. 22 would normally not extinguish criminal liability, the aforementioned cases show that the Court acknowledges the existence of extraordinary cases where, even if all the elements of the crime or offense are present, the conviction of the accused would prove to be abhorrent to society’s sense of justice. Just as in Griffith and in Tan, petitioner should not be penalized although all the elements of B.P. Blg. 22 are proven to be present. The fact that the issuer had already paid the value of the dishonored check after having received the subpoena from the Office of the Prosecutor should have forestalled the filing of the Information in court. The spirit of the law which, for B.P. Blg. 22 is the protection of the credibility and stability of the banking system, would not be served by penalizing people who have evidently made amends for their mistakes and made restitutions for damages even before charges have been filed against them. In effect, the payment of the checks before the filing of the Informations has already attained the purpose of the law.”
“It should be emphasized as well that payment of the value of the bounced check after the Information has been filed in court would no longer have the effect of exonerating the accused from possible conviction for violation of B.P. Blg. 22. Since from the commencement of the criminal proceedings in court, there is no circumstance whatsoever to show that the accused had every intention to mitigate or totally alleviate the ill effects of his issuance of the unfunded check, then there is no equitable and compelling reason to preclude his prosecution. In such a case, the letter of the law should be applied to its full extent.
Furthermore, to avoid any confusion, the Court’s ruling in this case should be well differentiated from cases where the accused is charged with estafa under Article 315, par. 2(d) of the Revised Penal Code, where the fraud is perpetuated by postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check, In said case of estafa, damage and deceit are essential elements of the offense, and the check is merely the accused’s tool in committing fraud. In such a case, paying the value of the dishonored check will not free the accused from criminal liability. It will merely satisfy the civil liability of the crime but not the criminal liability.”[1]
“While we agree with the private respondent that the gravamen of violation of B.P. 22 is the issuance of worthless checks that are dishonored upon their presentment for payment, we should not apply penal laws mechanically. We must find if the application of the law is consistent with the purpose of and reason for the law. Ratione cessat lex, et cessat lex. (When the reason for the law ceases, the law ceases.) It is not the letter alone but the spirit of the law also that gives it life. This is especially so in this case where a debtor’s criminalization would not serve the ends of justice but in fact subvert it. The creditor having collected already more than a sufficient amount to cover the value of the checks for payment of rentals, via auction sale, we find that holding the debtor’s president to answer for a criminal offense under B.P. 22 two years after said collection is no longer tenable nor justified by law or equitable considerations.
In sum, considering that the money value of the two checks issued by petitioner has already been effectively paid two years before the informations against him were filed, we find merit in this petition. We hold that petitioner herein could not be validly and justly convicted or sentenced for violation of B.P. 22. Whether the number of checks issued determines the number of violations of B.P. 22, or whether there should be a distinction between postdated and other kinds of checks need no longer detain us for being immaterial now to the determination of the issue of guilt or innocence of petitioner.”[2]
Payment of dishonored checks prior to notice of dishonor. – Where the total amount of the dishonored checks was more than satisfied prior to the transmittal and receipt of notice of dishonor, such payment obliterated the criminal liability of the accused.[3] Where creditor, who was able to collect by resorting to the remedy of foreclosure and auction sale, which, while later on invalidated, the proceeds thereof were applied to the debtor’s debts, and still resorted to filing a complaint for BP 22 against the corporate officer who signed the check, the latter’s conviction cannot be upheld without running afoul of basic principles of fairness and justice[4]
Pendency with the SEC of petition for suspension of payments. –
In Rosario v. Co[5], the checks were presented for payment and notice of dishonor was served on the corporate officer who is a signatory to the check, PRIOR to the issuance of the SEC Order to all creditors of the corporation to desist from filing and/or prosecuting cases for violation of BP 22 against the respondent. The motion to suspend proceedings filed by the respondent was denied by the MeTC, but the RTC sided with the respondent and enjoined the MeTC from proceeding with the case in view of the pendency of the SEC proceedings for rehabilitation and suspension of payments. The issue for consideration is whether or not the case for BP 22 against the corporate officer signatory to the check could be suspenden in view of the SEC proceedings. The Court upheld the petitioner. It pointed out that the filing of a BP 22 case is not a “claim that can be enjoined within the purview of P.D. 902-A. Although conviction of the accused for the alleged crime could result in the restitution, reparation or indemnification of the private offended party for the damage or injury he sustained by reason of the felonious act of the accused, nevertheless, prosecution for violation of B.P. Blg. 22 is a criminal action.
A criminal action has a dual purpose, namely, the punishment of the offender and indemnity to the offended party. The dominant and primordial objective of the criminal action is the punishment of the offender. The civil action is merely incidental to and consequent to the conviction of the accused. The reason for this is that criminal actions are primarily intended to vindicate an outrage against the sovereignty of the state and to impose the appropriate penalty for the vindication of the disturbance to the social order caused by the offender. On the other hand, the action between the private complainant and the accused is intended solely to indemnify the former.
“From the sequence of events, it is apparent that Check Nos. B032101, B032138, and B032122 were dishonored on May 11, 1995, April 6, 1995, and April 28, 1995, respectively. Respondent was formally notified of the dishonor when petitioner, in a letter dated June 27, 1995, demanded that he make good the checks and pay MPPI’s outstanding obligations within five banking days from receipt. Yet, it was only on October 3, 1995, or more than three months after, that the SEC issued the omnibus order creating the Management Committee and ordering the suspension of all pending actions for claims against MPPI. Respondent was, thus, not precluded from making good the checks during that three-month gap when he received the letter and when the SEC issued the order.
It must be emphasized at this point that as far as the criminal aspect of the cases is concerned, the provisions of Sec. 6 (c) of P.D. No. 902-A should not interfere with the prosecution of a case for violation of B.P. Blg. 22, even if restitution, reparation or indemnification could be ordered, because an absurdity would result, i.e., one who has engaged in criminal conduct could escape punishment by the mere filing of a petition for rehabilitation by the corporation of which he is an officer. At any rate, should the court deem it fit to award indemnification, such award would now fall under the category of a claim under Sec. 6 (c) of P.D. No. 902-A, considering that it is already one for monetary or pecuniary consideration. Only to this extent can the order of suspension be considered obligatory upon any court, tribunal, branch or body where there are pending actions for claims against the distressed corporation.”
In Gidwani v. People, however, a case with almost similar circumstances, the Court acquitted the accused of BP 22, because “In contrast, it is clear that prior to the presentment for payment and the subsequent demand letters to petitioner, there was already a lawful Order from the SEC suspending all payments of claims. It was incumbent on him to follow that SEC Order. He was able to sufficiently establish that the accounts were closed pursuant to the Order, without which a different set of circumstances might have dictated his liability for those checks.
Considering that there was a lawful Order from the SEC, the contract is deemed suspended. When a contract is suspended, it temporarily ceases to be operative; and it again becomes operative when a condition occurs – or a situation arises – warranting the termination of the suspension of the contract.
In other words, the SEC Order also created a suspensive condition. When a contract is subject to a suspensive condition, its birth takes place or its effectivity commences only if and when the event that constitutes the condition happens or is fulfilled. Thus, at the time private respondent presented the September and October 1997 checks for encashment, it had no right to do so, as there was yet no obligation due from petitioner.
Moreover, it is a basic principle in criminal law that any ambiguity in the interpretation or application of the law must be made in favor of the accused. Surely, our laws should not be interpreted in such a way that the interpretation would result in the disobedience of a lawful order of an authority vested by law with the jurisdiction to issue the order.”[6]
Pendency of receivership proceedings of the bank where the officers are the signatories to the check. – “While the facts in present B.P. 22 cases against Cu are not on all fours with those in Gidwani, the Court finds no reason why the ruling in Gidwani cannot be made to apply to these cases. In Gidwani, the SEC order of suspension of payments preceded the presentment for encashment of the subject checks therein. Here, the subject postdated checks were deposited by SB Corp. in October 2008, and dishonored for reason of “Account Closed,” after the closure of G7 Bank and after the PDIC, through its Deputy Receiver, had taken over 07 Bank, its premises, assets and records on August 1, 2008 and had issued a cease and desist order against the members of the Board of Directors and officers of 07 Bank and closed all its deposit accounts with other banks, including its checking account with the LBP against which the five disputed checks were issued.”[7]
Offer of compromise prior to filing of criminal complaint. – In SMC v. Kalalo, the petitioner pointed out that the Offer of Compromise made by the accused was an admission of guilt, pursuant to Rule 130, Section 27 of the Revised Rules of Evidence. The Court, however, disagreed, pointing out that the Offer of Compromise was made prior to the filing of the criminal complaint, clearly not made in the context of a criminal proceeding, and therefore, cannot be considered as an implied admission of guilt.[8]
Exercise of a valid right under the law. “The exercise of a statutory right to suspend installments, is to our mind, a valid defense against the purported violations of B.P. Blg. 22 that petitioner is charged with.”[9]
Novation. – “The following requisites must be present for novation to take place: (1) a previous valid obligation; (2) agreement of all the parties to the new contract; (3) extinguishment of the old contract; and (4) validity of the new one.”[10]
In Diongzon v. CA[11], the petitioner argued that his criminal liability was extinguished when he issued a third check which is incompatible with the last check he issued, as well as the written undertaking , thus novation took place which thereby extinguished his criminal liability. However, the Court set aside his argument, noting that novation may prevent the rise of criminal liability as long as it occurs prior to the filing of the information in court. In other words, novation does not extinguish criminal liability, but may prevent its rise. In fact, in this case, the novation theory does not apply where the offer to pay by the debtor, accepted by the creditor, turned out to be an empty promise, similar to the outcome in Llamado v. CA[12], where the court also rejected the accused theory of novation, since the complainant was never paid as agreed upon.
[1]Lim v. People, G.R. No. 190834, November 26, 2014
[2] Vergara v. People, G.R. No. 160238, February 4, 2005
[3] Tan v. PCIB, G.R. No. 152666, April 23, 2008
[4] Griffith v. CA, G.R. No. 129764, March 12, 2002
[5] G.R. No. 113608, August 26, 2008
[6] Gidwani v. People, G.R. no. 195064, January 15, 2014
[7] Cu v. Small Business Guarantee and Finance Corp., G.R. No. 211222, August 7, 2017
[8] San Miguel Corporation v. Kalalo, G.R. No. 185522, June 13, 2012
[9] Sycip, Jr., v. CA, G.R. no. 125059, March 17, 2000
[10] Reyes v. CA, G.R. No. 120817, November 4, 1996, cited in Diongzon v. CA, G.R. No. 114823, December 23, 1999
[11] G.R. No. 114823, December 23, 1999
[12] G.R. No. 99032, March 26, 1997