Title
Heirs of Simon vs. Chan
Case
G.R. No. 157547
Decision Date
Feb 23, 2011
Eduardo Simon issued an unfunded check; civil case dismissed due to litis pendentia with BP 22 criminal case, upheld by SC.
criminal case
civil action
unfunded check

Case Summary (G.R. No. 157547)

Factual Background

Sometime in December 1996, Eduardo Simon issued Landbank Check No. 0007280 dated December 26, 1996 in the amount of P336,000.00, payable to cash. When the check was presented within ninety days it was dishonored for account closed. The Office of the City Prosecutor of Manila filed an information for violation of Batas Pambansa Blg. 22 against Simon on July 11, 1997, docketed as Criminal Case No. 275381. On August 3, 2000, respondent Elvin Chan instituted Civil Case No. 915-00 in the Metropolitan Trial Court of Pasay City for collection of the P336,000.00 and sought issuance of a writ of preliminary attachment. The writ issued on August 9, 2000 and a Nissan vehicle of Simon was attached on August 17, 2000.

Motion to Dismiss and Litigious Posture in the Trial Court

On August 17, 2000 Simon filed an urgent motion to dismiss the civil complaint and sought to charge Chan’s attachment bond for damages. Simon invoked the pendency of Criminal Case No. 275381 in the Metropolitan Trial Court of Manila and asserted that the civil action for recovery of the civil liability arising from the BP 22 offense had been impliedly instituted with the criminal action; therefore, the separate civil suit was barred unless a reservation had been made. Chan opposed the motion, contending that his suit was an independent civil action based on fraud under Article 33 of the Civil Code and that Rule 111, Section 2 permitted such independent proceedings during the pendency of the criminal case.

Ruling of the Metropolitan Trial Court and the Regional Trial Court

On October 23, 2000 the MeTC in Pasay City granted Simon’s motion, dismissed Chan’s civil complaint on the ground of litis pendentia, lifted the writ of attachment, charged the plaintiff’s bond for P336,000.00 as damages, and awarded P5,000.00 for attorney’s fees. The MeTC found that the requisites for litis pendentia were present: identity of parties, identity of rights asserted and reliefs prayed for, and that a judgment in one case would operate as res judicata in the other. The MeTC further held that the offended party may not institute a separate civil action once the criminal case is pending, absent a clear and express waiver or reservation made before the prosecution presents evidence. The motion for reconsideration was denied on December 20, 2000. The Regional Trial Court in Pasay City affirmed the MeTC decision on July 31, 2001.

Court of Appeals Decision

The Court of Appeals reversed on June 25, 2002 and remanded for further proceedings. The CA reasoned that under the revised Rule 111 effective December 1, 2000, and under DMPI Employees Credit Association v. Velez, civil liability arising under Articles 32, 33, 34 and 2176 of the Civil Code may be pursued by an independent civil action during the pendency of the criminal prosecution without prior reservation. The CA treated the civil complaint as one based on fraud under Article 33 and held that procedural changes permitting independent civil actions were applicable retroactively to pending cases.

Parties’ Contentions on Appeal to the Supreme Court

The petitioners argued that the Court of Appeals erred in treating Chan’s suit as an independent civil action under Articles 32, 33, 34 and 2176, and that the CA misapplied DMPI Employees Credit Association v. Velez and Rule 111, Sections 1 and 2. Petitioners maintained that the action was a simple collection suit arising from a BP 22 prosecution and that Rule 111 and Supreme Court Circular No. 57-97 preclude reservation or separate civil suits for recovery of the value of a bouncing check. Respondent Chan countered that his cause of action was properly based on fraud and that filing of the criminal information did not preclude an independent civil action under Article 33.

Issue Presented

The controlling issue is whether Civil Case No. 915-00, filed to recover the amount of the dishonored check, constituted an independent civil action that could be maintained separate and apart from the BP 22 criminal prosecution.

Supreme Court Ruling

The Supreme Court granted the petition. The Court reversed the decision of the Court of Appeals and reinstated the MeTC’s dismissal of Civil Case No. 915-00. Costs of suit were awarded against the respondent.

Legal Basis and Reasoning

The Court reaffirmed that a violation of Batas Pambansa Blg. 22 gives rise to civil liability in favor of the offended party. The Court nonetheless held that there is no independent civil action to recover the value of a bouncing check issued in contravention of BP 22. The ruling relied upon the applicable provisions of Rule 111 and Supreme Court Circular No. 57-97, which deem the criminal action for violation of BP 22 to include the corresponding civil action and expressly prohibit reservation to file such civil action separately. The Court explained that the policy behind the Rule and Circular is to deter the use of criminal process as free debt-collection and to declog court dockets by requiring that the civil claim for the amount of the check be prosecuted in the criminal proceeding. The Court held that the changes in the Rules of Court and the Circular apply retroactively to pending cases because procedural rules do not create vested rights and may be given retroactive effect, subject to the constitutional prohibition against ex post facto application that would lessen the quantum of evidence necessary for conviction.

The Court distinguished DMPI Employees Credit Association v. Velez, noting that DMPI involved estafa prosecuted under the Revise

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