G.R. No. 162772 - Munoz vs. People

Petitioner Merliza A. MuAoz is the wife of Ludolfo P. MuAoz Jr., owner and operator of L.P. MuAoz Construction.
On August 3, 2000, Ludolfo obtained a loan of P500,000.00 from Sunwest Construction and Development Corporation at 5% interest.
To secure the loan, Ludolfo initially issued a postdated Development Bank of the Philippines (DBP) check for P500,000.00.

On September 3, 2000, Ludolfo sought to extend his loan by replacing the DBP check with a Rizal Commercial Banking Corporation (RCBC) check (No. 0000057285) for P500,000.00, drawn by the petitioner and postdated December 3, 2000.
Sunwest accepted the replacement check.
Petitioner explained later that there was a mutual set-off arrangement; L.P. MuAoz Construction had a claim against Sunwest for P10,000,000.00 for two river control projects, which she treated as offsetting the lesser claim of P500,000.00 represented by the RCBC check.

On February 5, 2001, Sunwest deposited the RCBC check, which was dishonored by RCBC due to insufficient funds.
On February 8, 2001, Sunwest sent a registered letter to Ludolfo demanding payment or the replacement of the check within five days.
On March 14, 2001, Sunwest sent another registered letter directly addressed to petitioner, again demanding payment within five days.
Petitioner’s reply on March 20, 2001 reiterated the offsetting claim, asserting that the earlier acknowledgement of the offset (as early as February 15, 2001) rendered the check settled.

A criminal complaint was filed by Elizaldy S. Co, president of Sunwest, leading to an Information being filed before the Municipal Trial Court in Cities (MTCC), Legaspi City.
Petitioner entered a plea of “Not Guilty.”
The MTCC rendered a decision on August 19, 2003, convicting her beyond reasonable doubt for violation of Batas Pambansa Blg. 22.
Conviction carried penalties including a fine of P200,000.00, payment of P500,000.00 (amount of RCBC check) plus interest, and costs.
The Regional Trial Court (RTC) in Legaspi City affirmed the MTCC decision on October 16, 2003.

Petitioner filed a petition for review with the Court of Appeals (CA) which was dismissed on technical grounds in the November 19, 2003 CA Resolution.
The CA’s dismissal was based on:

Failure to attach or incorporate a proof of service (Affidavit of Service) as required under Section 13, Rule 13 in relation to Section 3, Rule 42 of the Rules of Civil Procedure.
Failure to furnish a copy of the petition and annexes to the Office of the Solicitor General as counsel of the People of the Philippines.

The CA noted petitioner failed to show substantial compliance with the service of pleading requirements.
Although petitioner served her petition on Assistant City Prosecutor Catalino C. Serrano, he was no longer the designated counsel of the adverse party (the Solicitor General).
Petitioner argued that instead of outright dismissal, the CA should have allowed her to cure the technical deficiency and proceed to the merits of her appeal.
She also contended that issues such as the alleged lack of authority of the private complainant’s representative and absence of proof regarding knowledge of insufficiency of funds should have been addressed on merit rather than on form.

Whether the dismissal of the petition for review on technical grounds—specifically the failure to properly serve the petition on the adverse party (Solicitor General)—constitutes a grave error.
Whether the petitioner’s failure to show substantial compliance with the procedural requirements for service under Section 13 of Rule 13 and Section 3 of Rule 42 warrants dismissal.

Whether the criminal complaint filed by an allegedly unauthorized representative (Elizaldy S. Co) of the private complainant corporation should have resulted in the dismissal of the case.
Whether a corporate officer such as petitioner, acting as a minority stockholder and board member, had the requisite authority to initiate the case on behalf of the corporation.

Whether the prosecution sufficiently proved that petitioner had knowledge of the insufficiency of funds in the drawee bank account when the RCBC check was issued.

Whether the CA erred in not exercising judicial discretion to examine and decide on the merits of the case despite the procedural deficiencies.
Whether the petitioner’s argument for liberality in reviewing technical imperfections was justified in light of the substantive arguments raised.