Facts:

The case involves Teodoro A. Reyes (petitioner) and Ettore Rossi (respondent), representing Advanced Foundation Construction Systems Corporation. The events began on October 31, 1997, when Reyes entered into a deed of conditional sale with Advanced Foundation for a Warman Dredging Pump HY 300A valued at P10,000,000. Reyes made a downpayment of P3,000,000 and agreed to pay the remaining P7,000,000 through four post-dated checks. In January 1998, Reyes requested to restructure his payment plan, which resulted in the issuance of nine new post-dated checks totaling P7,125,000, including interest.

Rossi deposited three of these checks on their maturity dates, but two were dishonored due to Reyes's instructions to stop payment, and one was returned for insufficient funds. Further checks were also returned with the notation "Account Closed." In response to these issues, Reyes filed a civil case for rescission of the contract and damages in the Regional Trial Court (...

Facts:

Antecedents:

• On October 31, 1997, petitioner Teodoro A. Reyes (Reyes) and Advanced Foundation Construction Systems Corporation (Advanced Foundation), represented by its Executive Project Director, respondent Ettore Rossi (Rossi), executed a deed of conditional sale for the purchase of a Warman Dredging Pump HY 300A worth P10,000,000.00.
• Reyes agreed to pay P3,000,000.00 as a downpayment and the balance of P7,000,000.00 through four post-dated checks.
• In January 1998, Reyes requested the restructuring of his obligation by replacing the four post-dated checks with nine post-dated checks, including interest. Advanced Foundation agreed and returned the original checks.

Issuance and Dishonor of Checks:

• Reyes issued nine post-dated checks, three of which were dishonored upon presentment: two due to a stop-payment order and one due to insufficient funds.
• Two additional checks were dishonored with the notation "Account Closed."
• Reyes did not deposit the remaining three checks, assuming they would also be dishonored.

Civil Action for Rescission:

• On July 29, 1998, Reyes filed a civil action for rescission of the contract and damages in the Regional Trial Court (RTC) of Quezon City, alleging misrepresentation and breach of contract by Advanced Foundation.

Criminal Charges:

• On September 8, 1998, Rossi filed criminal charges against Reyes for five counts of estafa and five counts of violation of Batas Pambansa Blg. 22 (Bouncing Checks Law) in Makati and Quezon City.
• Reyes argued that the civil action for rescission posed a prejudicial question that should suspend the criminal proceedings.

Prosecutor’s Resolution:

• The Assistant City Prosecutor recommended the dismissal of the estafa charges and the suspension of the Batas Pambansa Blg. 22 proceedings due to the pending civil action.
• The City Prosecutor approved the recommendation, but Rossi appealed to the Department of Justice (DOJ), which upheld the suspension.

Court of Appeals (CA) Ruling:

• The CA reversed the DOJ’s resolution, ruling that the civil action for rescission did not constitute a prejudicial question and that the criminal proceedings should proceed.

Issue:

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Ruling:

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Ratio:

1. Prejudicial Question Defined:

   • A prejudicial question arises when a civil action and a criminal action are both pending, and the resolution of an issue in the civil action is determinative of the guilt or innocence of the accused in the criminal case.
   • The elements of a prejudicial question are:
     • The civil action involves an issue similar or intimately related to the issue in the criminal action.
     • The resolution of the civil issue determines whether the criminal action may proceed.

2. No Prejudicial Question in This Case:

   • The civil action for rescission of the contract does not determine Reyes’ criminal liability under Batas Pambansa Blg. 22.
   • The criminal liability for issuing dishonored checks is independent of the validity or rescission of the contract. The offense is committed at the time the checks are dishonored, regardless of the contract’s status.
   • The rescission of the contract, if granted, would not absolve Reyes of criminal liability for issuing checks without sufficient funds.

3. Elements of Batas Pambansa Blg. 22:

   • The violation requires:
     • The issuance of a check.
     • Knowledge of insufficient funds at the time of issuance.
     • Subsequent dishonor of the check.
   • These elements are unrelated to the civil action for rescission, which concerns the breach of contract and misrepresentation.

4. CA’s Reasoning:

   • The CA correctly held that the civil action for rescission does not affect the criminal liability for issuing dishonored checks. The contract’s validity or rescission does not determine whether Reyes knowingly issued checks without sufficient funds.

5. Conclusion:

   • The criminal proceedings for violation of Batas Pambansa Blg. 22 may proceed independently of the civil action for rescission. The civil action does not pose a prejudicial question that would warrant the suspension of the criminal case.

Final Disposition

The Supreme Court denied the petition, affirmed the CA’s decision, and directed Reyes to pay the costs of suit.