Title
Chua vs. People
Case
G.R. No. 195248
Decision Date
Nov 22, 2017
Petitioner acquitted of B.P. Blg. 22 charges due to unproven notice of dishonor but upheld civil liability for dishonored checks totaling P6,082,000.
lack of proof
notice of dishonor
civil liability

Case Summary (G.R. No. 195248)

Factual Background

Yao testified that petitioner’s mother introduced her to petitioner in or around 2000 and requested that Yao lend money to revive their sugar mill business in Bacolod City. Yao complied by lending petitioner P1 million on 3 January 2001, P1 million on 7 January 2001, and P1.5 million on 16 February 2001, followed by an additional P2.5 million in June 2001. As repayment, petitioner issued four checks corresponding to these amounts. The checks were dishonored because they were drawn against a closed account.

After the dishonor, Yao stated that she personally delivered a demand letter to petitioner’s office, where it was received by petitioner’s secretary. Based on these allegations, petitioner was charged in four counts of B.P. Blg. 22.

MeTC Proceedings and the Pairing Judge Issue

The criminal cases were raffled to MeTC Branch 58, initially presided by Judge Elvira DC Castro (Judge Castro). Petitioner pleaded “not guilty” on 16 September 2004. Trial continued with mediation and pre-trial, and proceedings were conducted before pairing judge Judge Marianito C. Santos (Judge Santos) after Judge Castro’s promotion to the RTC.

On 25 July 2007, Judge Philip Labastida (Judge Labastida) took over as presiding judge of Branch 58. At the time of trial, petitioner failed to present evidence, and the cases were submitted for decision. A promulgation date was tentatively set for 30 September 2008. In December 2008, Judge Labastida died. On 20 February 2009, Judge Mary George T. Cajandab-Caldona (Judge Caldona) was designated acting presiding judge, and she assumed office on 1 April 2009.

MeTC Decision

In a decision dated 15 April 2009, signed by Judge Santos as pairing judge, the MeTC convicted petitioner of four counts of B.P. Blg. 22. It imposed a fine of P200,000.00 per count and subsidiary imprisonment in case of insolvency. The MeTC also ordered petitioner civilly liable for the face value of the four checks in the aggregate amount of P6,082,000.00, with twelve percent (12%) interest per annum from the date of extrajudicial demand, reckoned from April 2002, until full payment, and ordered payment of costs.

The MeTC reasoned that the prosecution established that the checks were issued as payments for a loan, and that Yao had made demand upon petitioner through his personal secretary upon dishonor.

RTC Review in SCA No. 3338

Petitioner filed a petition for certiorari with the RTC in SCA No. 3338, contesting Judge Santos’s authority to render the MeTC decision. By Order dated 15 June 2010, the RTC affirmed the conviction. It held that the expanded authority of pairing judges under Supreme Court Circular No. 19-98 dated 18 February 1998 gave Judge Santos authority to resolve the cases that had been submitted for decision when he was still the pairing judge. The RTC further reasoned that Judge Santos was in a better position to decide because the cases were heard and submitted for decision before Judge Caldona assumed office on 1 April 2009. It also noted that the delay in promulgation resulted from a motion for reconsideration that was later denied.

Petitioner’s motion for reconsideration was denied on 28 December 2010, prompting the present petition for review.

Issues Raised in the Supreme Court

Petitioner presented three issues: whether a decision promulgated and executed by a pairing judge remained valid despite the appointment and assumption to office of a permanent judge (or, in this context, an acting presiding judge); whether the conviction despite alleged failure to prove all elements of the offense constituted grave abuse of discretion amounting to lack or excess of jurisdiction; and whether Rule 65 certiorari was the proper remedy for acts constituting grave abuse of discretion amounting to lack or excess of jurisdiction.

Arguments of the Parties

Petitioner argued that under Circular No. 19-98, the authority of a pairing judge to render decisions exists only until the appointment and assumption to duty of the regular judge or designation of an acting presiding judge; thus, his claim was that Judge Santos no longer had authority to promulgate on 15 April 2009 because Judge Caldona had already assumed office on 1 April 2009. He also insisted that the prosecution failed to prove proper service of notice of dishonor, which he alleged was necessary to establish knowledge under B.P. Blg. 22.

The People of the Philippines, through the Office of the Solicitor General, maintained that the cases had been submitted for decision as early as 30 September 2008, and that Judge Caldona had not presided in any hearing. The OSG argued that Judge Caldona did not have sufficient familiarity to competently render the decision, and that Judge Caldona did not object to the promulgation. The OSG invoked Circular No. 5-98, contending that cases already submitted for decision (and those that passed the trial stage) at the time of the assumption of the presiding judge or the acting presiding judge should be decided by the former pairing or assisting judge, including resolutions of motions for reconsideration and new trials after submission. The OSG also posited that once Judge Labastida died, Judge Santos was tasked to take over as designated pairing judge.

In reply, petitioner responded that Circular No. 5-98 did not apply because the pairing authority under Circular No. 19-98 had a different operative rule, and that Judge Santos’s pairing authority automatically ceased on the date of Judge Caldona’s designation.

Remedy and Procedural Disposition by the Supreme Court

The Court first addressed procedural propriety. It held that the remedy of certiorari was not proper where appeal was available. It explained that where appeal lies, certiorari cannot be resorted to because remedies of appeal and certiorari are mutually exclusive, not alternative or successive. It also held that even if certiorari were theoretically available, petitioner failed to comply with the general requirement of a prior motion for reconsideration before resort to Rule 65.

The Court further concluded that petitioner did not establish grave abuse of discretion. It reiterated the standard that grave abuse of discretion denotes capricious, whimsical, arbitrary, or despotic action equivalent to lack or excess of jurisdiction. It emphasized that certiorari is reserved for truly extraordinary cases where the act is wholly void. Applying these principles, the Court found no indication that Judge Santos acted with the kind of patent and gross abuse that would amount to an evasion of duty or refusal to perform a duty enjoined by law.

Still, the Court proceeded to resolve the merits in the interest of prompt dispensation of justice and to prevent further prolongation.

Authority of the Pairing Judge to Render the Decision

The Court ruled that Judge Santos had authority to render the assailed decision despite the later assumption to office of the designated presiding judge of Branch 58. Petitioner anchored his argument on the language of Circular No. 19-98, which expanded pairing authority to cover all matters when vacancies occur, until appointment and assumption of the regular judge, designation of an acting presiding judge, or return of the regular incumbent judge.

The Court held, however, that Circular No. 5-98 complemented Circular No. 19-98. It recognized that while the paired court judge serves as acting judge only until appointment and assumption to duty of the regular judge or designation of an acting presiding judge, Circular No. 5-98 creates a critical exception: the former acting judge must decide cases that are already submitted for decision at the time the presiding judge assumes office or is designated. The Court treated the word “shall” in Circular No. 5-98 as mandatory, thereby requiring the former judge to decide the cases passed for decision.

On the factual timeline, the Court observed that Judge Santos presided over the trial, which started with the presentation of the prosecution’s first witness on 7 June 2006. Judge Labastida later took over as presiding judge on 25 July 2007, and promulgation had been tentatively set for 30 September 2008. After Judge Labastida died in December 2008, it became incumbent for Judge Santos to act as acting judge for Branch 58. When Judge Caldona assumed office on 1 April 2009, the Court found that the cases had already passed the trial stage and were submitted for decision. It also noted that Judge Santos had presided over a substantial portion of the proceedings compared to Judge Caldona, who assumed office only after submission for decision. The Court thus concluded that Judge Santos remained authorized to promulgate the decision on 15 April 2009.

Proof of Notice of Dishonor as an Essential Element

Having cleared the authority question, the Court turned to the substantive criminal elements. It reiterated that conviction under B.P. Blg. 22 requires: (one) making, drawing, and issuance of a check for account or value; (two) knowledge at issuance of insufficient funds or credit; and (three) dishonor for insufficiency or failure to stop payment without valid cause.

The second element, involving the accused’s state of mind, is supported by a statutory prima facie presumption under Section 2 of B.P. Blg. 22. The Court explained that the presumption arises only when the issuer receives notice of dishonor and fails to pay or make arrangements within five banking days from receipt. The Court emphasized that the requirement of actual receipt of notice cannot be lightly treated because the law provides the accused an opportunity to forestall criminal prosecution within the statutory period. It held that the presumption cannot arise if there is no proof of notice being received or if the prosecution cannot establish when receipt occurred, since the five-day period would be impossible to compute.

Applying these principles, the Court held that the prosecution failed to establish the second element beyond reasonable doubt.

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