A.M. No. MTJ-93-849 - Caram Resources Corp. vs. Contreras

Caram Resources Corporation and Raymund B. Tejada filed a verified complaint dated 2 June 1993.
The complaint charged Judge Maximo C. Contreras, Presiding Judge of Branch 61, Metropolitan Trial Court, Makati, with gross ignorance of the law and gross misconduct.
The charges arose from respondent’s rulings in Criminal Cases Nos. 142359–142362 involving alleged violations of B.P. Blg. 22.

On 4 February 1991, accused Teresita J. Dizon obtained a personal loan from Caram Resources Corporation.
Dizon executed a promissory note for the loan payable in twelve monthly installments of P1,259.00, totaling P15,548.00, although the loan principal was P10,000.00.
As security, Dizon issued twelve postdated Bank of the Philippine Islands (BPI) checks each for P1,259.00, dated monthly beginning April 4, 1991.
The BPI account against which four of those checks were drawn was closed; four checks dated 31 July 1991, 31 August 1991, 30 September 1991, and 31 October 1991 were dishonored for the reason “Account Closed.”
Caram Resources Corporation filed criminal charges under B.P. Blg. 22 for the four dishonored checks.

After joint trial, the MeTC, presided by respondent, acquitted Dizon on the ground of reasonable doubt.
The court found and reasoned that:

The twelve postdated checks were issued as guarantees and were without consideration because the promissory note already constituted the loan contract and receipt of consideration.
The checking account was opened without deposit and was closed by the bank before the due date of the first check.
Dizon informed Caram Resources Corporation verbally that her account was closed and that the postdated checks would bounce.
The first four dishonored checks were replaced by cash; during pendency of the cases Dizon paid P5,000.00 in replacement of the four checks.
Caram Resources Corporation allegedly retained most postdated checks and used them as a “Damocles sword” to coerce payment and to apply payments arbitrarily to interest and charges.
The court cited Magno v. Court of Appeals and concluded the factual circumstances cast serious doubts on the applicability of the doctrine in Miller v. Court of Appeals and that applying Miller would offend the constitutional prohibition against imprisonment for failure to pay a debt.

The trial court’s dispositive order acquitted Dizon without prejudice to civil action and cancelled the cash bond.

Complainants argued respondent erred in law and competence by concluding the postdated checks were without consideration despite the promissory note and evidence of payment in replacement of the checks.
Complainants contested factual findings asserted by respondent, specifically:

That Dizon was required to open a checking account as a condition precedent.
That Dizon opened the BPI account without deposit and it was closed the same month.
That there was no ...(Subscriber-Only)

Whether respondent Judge Maximo C. Contreras committed gross ignorance of the law and gross misconduct in acquitting Teresita J. Dizon on charges under B.P. Blg. 22.

Whether the trial court correctly assessed the nature of the postdated checks as lacking consideration because of the existence of a promissory note.
Whether the factual findings made by respondent (account opened without deposit, account closed before presentment, retention of checks, application of payments to interest) were supported by evidence.
Whether the respondent properly applied or disregarded controlling Supreme Court precedents on B.P. Blg. 22, including Lozano v. Martinez, *Miller v. Court of Appeals*, and Magno v. Court of Appeals....(Subscriber-Only)