Case Summary (G.R. No. 166715)
Facts and Procedural History
SB Corp. extended a credit line to G7 Bank, initially for Php 50 million, later increased to Php 90 million, with authorized officers including Cu and Lucia Pascual issuing numerous postdated checks as payments for drawdowns against this credit line. After G7 Bank's closure and PDIC's takeover, all bank accounts, including the checking account with Land Bank of the Philippines (LBP), were closed. Postdated checks issued by Cu and Pascual matured in October 2008 but were dishonored due to the closure of G7 Bank’s accounts. SB Corp. demanded payment from Cu and Pascual, who failed to comply, leading to the filing of criminal complaints for violation of Batas Pambansa Blg. 22 (B.P. 22), equivalent to issuing worthless checks.
Following the dismissal of the criminal cases by the Metropolitan Trial Court (MeTC) on the ground that the bank’s closure and receivership precluded funding the checks, SB Corp.'s Motion for Reconsideration was denied. The RTC likewise affirmed the dismissal. SB Corp. appealed to the Court of Appeals (CA), which reversed the RTC decision and remanded the cases to the MeTC for further proceedings. Cu’s motion for reconsideration before the CA was denied, prompting the filing of this petition for review under Rule 45.
Applicable Law
The 1987 Philippine Constitution, in conjunction with the Revised Rules on Criminal Procedure and relevant banking and financial laws including Republic Act No. 6977 and Republic Act No. 3591 (as amended), governs the proceedings. Batas Pambansa Blg. 22 criminalizes the issuance of checks without sufficient funds, while law mandates that the PDIC acts as receiver upon the closure of banks by the Monetary Board and manages liquidation proceedings.
Jurisdictional Issue: Authority to Appeal
Allan S. Cu contended that SB Corp., as a private offended party, lacked authority to appeal the dismissal of the criminal cases because only the Solicitor General (SG) may represent the State in such appeals on the criminal aspect. SB Corp. argued the issue was waived as Cu failed to raise it before the CA, and that the Revised Rules on Criminal Procedure allows parties to appeal unless it causes double jeopardy. The Office of the Solicitor General (OSG), through its comment, clarified that while not always indispensable, the OSG typically represents the State in criminal appeals and supported the CA's action to accept SB Corp.’s petition.
Court’s Analysis on Authority to Appeal
The Court reaffirmed the settled rule that a private complainant or offended party may not prosecute or appeal the criminal aspect of a case without the OSG, as criminal prosecutions are matters of public interest represented solely by the State through the OSG. Only the OSG can appeal dismissals or acquittals on the criminal liability of accused persons. The private offended party may appeal only with respect to the civil liability aspects. Since SB Corp. sought to reinstate the criminal prosecution without the OSG's conformity, the appeal was unauthorized.
Despite this general principle, the Court acknowledged exceptions where due course is given to appeals or petitions by private parties, particularly to prevent denial of justice, to address novel legal issues, or when the government’s interests are not adversely affected. The Court elected to apply the exception in this case to resolve the substantive issues.
Substantive Issue: Propriety of Dismissal of Criminal Cases
The Court held that the MeTC and RTC correctly dismissed the criminal cases against Cu. Citing Gidwani v. People, the Court explained that when a bank is placed under receivership or liquidation, similar to a suspension of payments, the contractual obligations or debt with respect to checks issued become suspended or subject to a suspensive condition. This suspension means that the creditor’s right to demand payment, and correspondingly the drawer's obligation, is deferred until the liquidation court determines the claims.
In this case, the closure of G7 Bank, PDIC’s takeover, and filing of the petition for assistance in liquidation had the effect of suspending or staying the demandability and enforcement of debts owed by G7 Bank, including those represented by the checks issued by Cu. Thus, at the time of presentment of the dishonored checks, the debt was not due and demandable; the obligation to pay was effectively suspended by operation of law until the liquidation process resolved the amounts payable. The dishonor was therefore beyond Cu's control, negating criminal liability under B.P. 22.
Legal Implications of Bank Receivership and Liquidation
Upon closure by the Monetary Board, the PDIC as receiver takes custody of the bank’s assets and liabilities. All actions, claims, and proceedings against the bank are stayed or suspended, and enforcement of any court decision against the bank's assets is coordinated through the liquidation court, which exercises exclusive jurisdiction
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Case Syllabus (G.R. No. 166715)
Background and Nature of the Petition
- This case involves a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by petitioner Allan S. Cu ("Cu") against the decision of the Court of Appeals (CA) dated October 16, 2013, and the Resolution dated February 6, 2014.
- The CA decision reversed earlier dismissals of criminal cases filed against Cu for violation of Batas Pambansa Blg. 22 (B.P. 22), concerning the issuance of postdated checks that were dishonored.
- The petition challenges the CA’s reversal of the Regional Trial Court (RTC) decision which affirmed the dismissal of the criminal cases by the Metropolitan Trial Court (MeTC) for lack of probable cause due to the bank’s receivership and liquidation proceedings.
Facts and Procedural History
- Small Business Guarantee and Finance Corporation (SB Corp.), a government financial institution under RA 6977, extended a revolving credit line to Golden 7 Bank (G7 Bank) for relending to qualified MSMEs.
- G7 Bank initially had a credit line of ₱50 million, later increased to ₱90 million, with multiple loan drawdowns documented by promissory notes, amortization schedules, and secured by numerous postdated checks signed by Cu and co-signatory Lucia C. Pascual.
- On July 31, 2008, Bangko Sentral ng Pilipinas (BSP) placed G7 Bank under receivership, and Philippine Deposit Insurance Corporation (PDIC) assumed control on August 1, 2008, issuing a cease and desist order and closing all bank accounts—including the account against which the disputed checks were drawn.
- The subject postdated checks were presented for payment in October 2008 but were dishonored for "Account Closed."
- SB Corp. then filed criminal complaints under B.P. 22 against Cu and Pascual for issuing worthless checks.
- The MeTC dismissed the cases on April 5, 2010, following the principle that receivership suspends the authority of bank officers and suspends obligations such as checks drawn on closed accounts.
- SB Corp. appealed to the RTC, which affirmed the dismissal in its May 2, 2011 decision. A motion for reconsideration by SB Corp. was denied.
- SB Corp. filed a petition for review with the CA, which granted the petition, set aside the RTC decision, and remanded the cases to the MeTC for further proceedings.
- Cu’s motion for reconsideration at the CA was denied, prompting the instant petition before the Supreme Court.
Jurisdictional Issues on Right to Appeal
- Cu argued that SB Corp., as a private offended party, lacked the authority to appeal the dismissal of a criminal case because only the State, represented by the Office of the Solicitor General (OSG), may appeal in criminal prosecutions.
- SB Corp. argued the issue was not raised earlier and cited another related case where the OSG supported SB Corp.’s position by filing a motion for reconsideration.
- The OSG, in its Comment, stated that its participation is not always indispensable and that in certain circumstances, private parties like SB Corp. can appeal criminal dismissals.
- The Court reaffirmed the established jurispruden