Case Summary (A.M. No. MTJ-93-849)
Factual Background
The record established that Teresita J. Dizon applied for and obtained a personal loan from Caram Resources Corporation in the amount of P10,000.00 payable within one year. She executed a promissory note for P15,548.00, reflecting monthly installments of P1,259.00, and issued twelve postdated checks to correspond to those installments. The checking account against which the checks were drawn was closed in the same month it was opened. When four of the postdated checks were presented on their due dates they were dishonored for the reason “Account Closed.” The MeTC record indicated that Dizon informed the financing company of the account closure, that she replaced some dishonored checks with cash, and that she paid P5,000.00 during the pendency of the criminal cases, a payment that the private complainant alleged was applied only to interest.
Trial Court Proceedings and Decision
After joint trial of Criminal Cases Nos. 142359–142362 for alleged violation of B.P. Blg. 22, respondent Judge Contreras acquitted Dizon on the ground of reasonable doubt. The trial court reasoned that the postdated checks were issued as guarantees in connection with the promissory note and were without consideration, that the financing company had retained the checks and used them coercively, and that the factual circumstances cast doubt on the applicability of the doctrine announced in Miller vs. Court of Appeals. The trial court concluded that prosecuting the borrower under the circumstances would subvert the protective policy against depriving a person of liberty for failure to pay a debt and, accordingly, acquitted Dizon without prejudice to civil remedies and cancelled the cash bond.
Complainants' Contentions in the Administrative Complaint
Petitioners charged respondent Judge Contreras with gross ignorance of the law and gross misconduct. They asserted that the MeTC decision ignored established doctrine that B.P. Blg. 22 is constitutional and penalizes the making or issuance of worthless checks irrespective of intent. They argued that the trial court’s factual findings—such as the suggestion that the issuing of checks was without consideration, that the bank would allow opening a checking account without deposit, and that the private complainant kept checks as a “Damocles sword”—were unsupported, speculative, and reflective of incompetence. Petitioners further maintained that the P5,000.00 payment constituted an admission of liability and that the financing company was not required to verify deposit funding because of R.A. No. 1405.
Respondent’s Defense and Explanations
In his Comment, respondent defended his rulings as grounded in the promissory note relationship and in the factual circumstances showing that the postdated checks served merely as coercive guarantees. He maintained that the promissory note constituted the complete and binding contract between the parties and that requiring issuance of the checks was superfluous. Respondent disclaimed any challenge to the constitutionality of B.P. Blg. 22, described the statute as a “sound and good law,” and invoked judicial notice of a large volume of similar prosecutions before the MeTC. He also suggested that the administrative complaint was a retaliatory filing by the financing company and questioned the authority of Raymund B. Tejada to bring the complaint.
Procedural History Before the Supreme Court
The administrative complaint proceeded to submission on the pleadings after the parties filed their respective pleadings and manifestations in January through March 1994. The Court received the parties’ Reply and Comment, and set the matter for decision on the basis of the record and the parties’ written submissions.
Applicable Law and Precedents Relied Upon by the Court
This Court reiterated that B.P. Blg. 22 is constitutional and that its gravamen is the making and issuance of a worthless check, not the mere nonpayment of debt, a doctrine articulated in Lozano vs. Martinez and followed in subsequent cases including Que vs. People, People vs. Grospe, People vs. Manzanilla, and People vs. Laggui. The Court emphasized that the offense is malum prohibitum, that malice and intent are immaterial, and that the legislature may, under its police power, proscribe acts harmful to public welfare. The Court also invoked Canon 18 of the Canons of Judicial Ethics requiring judges to apply controlling law and precedent rather than substitute personal views.
Supreme Court’s Analysis of the Trial Court’s Findings
Applying the foregoing authorities to the facts, the Court observed that Dizon admitted the loan, acknowledged the promissory note, and admitted issuing the postdated checks as payment for the installments. The checks were drawn on a current account she subsequently closed, and she testified that the bank bookkeeper failed to deposit entrusted funds. These facts, the Court held, brought the accused squarely within Section 1 of B.P. Blg. 22. The Court found that respondent Judge Contreras either demonstrated ignorance of the controlling jurisprudence or wilfully disregarded it by concluding that the checks were without consideration and by in
...continue reading
Case Syllabus (A.M. No. MTJ-93-849)
Parties and Procedural Posture
- Caram Resources Corporation and Raymund B. Tejada filed a verified administrative complaint on 2 June 1993 charging respondent Judge Maximo C. Contreras with gross ignorance of the law and gross misconduct.
- The complaint grew out of respondent's bench decision in four criminal prosecutions for violation of B.P. Blg. 22 against Teresita J. Dizon in the Metropolitan Trial Court, Branch 61, Makati.
- The respondent had presided over the joint trial and rendered a judgment acquitting the accused Teresita J. Dizon for reasons stated in his written decision.
- The parties submitted the administrative case for decision on the basis of the pleadings pursuant to the Court's resolution of 31 January 1994.
- The First Division issued the present administrative decision on 26 October 1994 imposing discipline on respondent Judge Contreras.
Key Factual Allegations
- The complainants alleged that on 4 February 1991 Teresita J. Dizon obtained a personal loan from Caram Resources Corporation evidenced by a promissory note and secured by twelve postdated BPI checks for monthly installments of P1,259.00.
- Four checks dated 31 July 1991, 31 August 1991, 30 September 1991, and 31 October 1991 were presented and dishonored for the bank reason "Account Closed."
- Caram Resources Corporation filed Criminal Cases Nos. 142359-142362 for violation of B.P. Blg. 22 based on the dishonor of these checks.
- The accused admitted in trial that the loan existed, that she executed a promissory note, that she issued the postdated checks to cover the installments, and that she closed her checking account causing the dishonor of the checks.
- The accused replaced the first four dishonored checks with cash and paid P5,000.00 during the pendency of the cases, which the private complainant later characterized as payments applied to interests.
Trial Court Decision by Respondent
- The respondent Judge acquitted Teresita J. Dizon on the ground of reasonable doubt, thereby cancelling the cash bond and ordering no costs.
- The respondent reasoned that the postdated checks were issued as guarantees and lacked consideration because the promissory note already embodied the loan obligation and receipt of value.
- The respondent found that the financing practice of requiring at once all twelve postdated checks constituted coercive use of B.P. Blg. 22 and that the payee had encouraged and kept unfunded checks as a "Damocles sword" over borrowers.
- The respondent cited Magno v. Court of Appeals as authority for treating postdated checks used as collateral and not for value as exempt from criminal liability under malum prohibitum doctrine.
Complainants' Contentions in the Administrative Case
- The complainants contended that the respondent misapplied the law by declaring the postdated checks devoid of consideration despite record facts showing the checks were issued as payments for the promissory note.
- The complainants asserted that B.P. Blg. 22 is constitutional and that respondent's expressed doubts as to its applicability revealed ignorance of controlling precedent.
- The complainants challenged numerous factual findings of the respondent as baseless or unsupported, including the requirements to open a checking account, the alleged absence of deposits, the characterization of payments, and the claim that the checks were retained unused by the payee.
- The complainants argued that the payment of P5,000.00 during trial was tantamount to an admission of liability and that Caram Resources was not obliged to verify the funding of the accused's account in light of R.A. No. 1405.
Respondent's Defense and Additional Contentions
- The respondent def