G.R. No. 175851 - Lim vs. Mindanao Wines and Liquor Galleria

Emilia Lim, through her business H & E Commercial, engaged in transactions with Mindanao Wines & Liquor Galleria, a single proprietorship owned by Evelyn S. Valdevieso.
The transactions were evidenced by Sales Invoice No. 1711 (dated November 24, 1995) and Statement of Accounts No. 076, which indicated delivery of several cases of liquors and the issuance of four postdated checks by Emilia valued at ₱25,000.00 each.

Two of the four issued checks (PNB Check Nos. 951453 and 951454, dated October 10, 1996 and October 20, 1996, respectively) were dishonored due to reasons such as “ACCOUNT CLOSED” and “DRAWN AGAINST INSUFFICIENT FUNDS.”
Following the dishonor, Mindanao Wines, through its proprietress Evelyn Valdevieso, sent two separate demand letters (both dated November 18, 1996) to H & E Commercial seeking payment of the check values.

When Emilia did not respond to the demand letters, Mindanao Wines filed criminal cases before Branch 2 of the Municipal Trial Court in Cities (MTCC) of Davao City (Criminal Case Nos. 68,309-B-98 and 68,310-B-98) for violation of Batas Pambansa Bilang 22 (BP 22) – the Bouncing Checks Law.
During trial, the prosecution’s sole witness, Nieves Veloso (accountant and officer-in-charge of Mindanao Wines), testified regarding the transactions, delivery of checks, and the repeated attempts to collect the unpaid checks, although she admitted limitations in her own personal involvement with the execution of transactions.

Emilia filed a Demurrer to Evidence claiming insufficiency of evidence, arguing that:

Not all elements of BP 22 were proven, particularly the issue of check dishonor.
The sales order covering the transactions was unsigned, casting doubt on the authorization of the purchase.
There was no clear evidence that the bank had dishonored the checks or that a notice of dishonor had been formally received by her.

The MTCC acquitted Emilia of the criminal charges on December 10, 1999, as it held that the essential element of check dishonor was not satisfactorily proven.
Despite the acquittal, the MTCC found Emilia civilly liable on the ground that redeeming one of the checks constituted an acknowledgment of her indebtedness, ordering her to pay the total value of the two dishonored checks along with interest, attorney’s fees (later deleted), and other expenses.

Dissatisfied with the court’s ruling regarding civil liability, Emilia appealed to the Regional Trial Court (RTC) of Davao City, arguing that dismissal of the criminal action on grounds of insufficient evidence should extend to dismissal of the civil claim.
The RTC, however, clarified that the criminal cases were dismissed on the basis of reasonable doubt, not purely on insufficiency of evidence, and held that civil liability was adequately proven by the preponderance of evidence. It affirmed the MTCC’s decision.
Emilia’s subsequent petition for review before the Court of Appeals (CA) reiterated her contention that her acquittal should exonerate her from the civil liability.
The CA emphasized that:

An acquittal—even if based on reasonable doubt or insufficiency of evidence—does not necessarily extinguish civil liability.
The evidence showed that Emilia had indeed issued the checks for value, and her actions (such as redeeming one check) substantiated the existence of indebtedness.

On a motion for reconsideration, Emilia further argued that the requirement of a preponderance of evidence should involve evidence from both parties; the CA rejected this argument, noting that the complainant must prove the claim by a greater weight of evidence and that absence of counter-evidence does not automatically absolve a defendant.

Whether the dismissal of the criminal cases based on reasonable doubt (or insufficiency of evidence) automatically extends to the dismissal of the civil liability arising from the same transaction.

The contention by Emilia that her acquittal should nullify the civil claim on the ground that both aspects (criminal and civil) should be treated alike when the evidence is insufficient.

Whether the civil liability award against Emilia is valid despite the acquittal in criminal proceedings.

The question of whether an act of issuing a check constitutes evidence of indebtedness, regardless of the criminal outcome.
The proper standard of evidence required for proving civil liability (preponderance of evidence) versus the higher standard in criminal cases (beyond a reasonable doubt).

The procedural issue involving the raising of new issues on appeal, such as claims of due process violation and the questioning of the respondent’s status as a juridical person.

Whether issues not previously raised before the lower courts can be considered in the appellate review.