Case Summary (G.R. No. 199067)
Procedural History
Nissan filed a criminal complaint under Batas Pambansa Blg. 22 (BP 22) with the Quezon City prosecutor’s office, which found probable cause and lodged an Information in the MeTC. The MeTC acquitted Purificacion of the criminal charge but held her civilly liable for P675,000 with legal interest. The RTC affirmed the MeTC decision. The CA granted Purificacion’s petition for review and set aside the lower courts’ civil award, exonerating her from civil liability. Nissan sought review in the Supreme Court under Rule 45, which granted the petition, set aside the CA decision, and reinstated the RTC decision with modification to reduce legal interest to 6% per annum from finality.
Undisputed Factual Background
Frederick purchased a Nissan Terrano 4x4 on cash‑on‑delivery terms and took possession on May 14, 1997 but failed to pay. He used the vehicle for over four months without payment despite demand letters. After Nissan’s final demand and negotiations, Frederick secured a promise of extension and, later, persuaded his mother, Purificacion, to issue a postdated check for P1,020,000 as payment for his obligation. The check was presented and dishonored due to a “stop payment.” A demand letter was served on Purificacion (via Frederick) and she refused to replace the check. Nissan filed criminal charges for violation of BP 22. During preliminary investigation Purificacion made a partial payment of P200,000 but no further payments ensued.
Legal Issue Presented
Whether Purificacion can be held civilly liable for the value of the dishonored check despite her acquittal of the criminal charge for violation of BP 22.
Applicable Law and Legal Standards
- Constitution: 1987 Philippine Constitution (applicable given the decision date).
- Special statute: Batas Pambansa Blg. 22 (BP 22) — criminalizes issuance of worthless checks and deems the criminal action to include the corresponding civil action (Rule 111, Section 1(b) interplay noted).
- Rules of Court: Rule 111, Section 1 — civil action deemed instituted with criminal action except in delineated circumstances.
- Negotiable Instruments Law: Section 29 — liability of an accommodation party on an instrument.
- Penal law principles and jurisprudence cited in the decision interpret the relation between criminal acquittal and civil liability and the presumption of knowledge in BP 22 cases.
Elements of the Offense Under BP 22
The Court sets out the essential elements as: (1) the making, drawing, and issuance of any check to apply for account or for value; (2) knowledge of the maker/drawer/issuer that, at the time of issue, there were insufficient funds or credit with the drawee bank; and (3) dishonor of the check by the drawee bank for insufficiency of funds/credit or dishonor resulting from an unjustified stop payment. The decision also notes that Section 2 of BP 22 creates a presumption of knowledge of insufficiency only after a written notice of dishonor is proven and the issuer fails to pay or arrange payment within five days of receipt.
Reason for Criminal Acquittal
The MeTC and RTC found the first and third elements proven (issuance and dishonor). Purificacion was acquitted criminally because the prosecution failed to sufficiently establish that she received the written notice of dishonor — a factual element necessary to trigger the statutory presumption of knowledge and to establish the second element beyond a reasonable doubt. The acquittal thus rested on reasonable doubt as to notice.
Civil Liability Independent of Criminal Acquittal
The Court reiterates the well‑settled principle that a civil action arising from a criminal offense is deemed instituted with the criminal action (particularly mandated for BP 22). An acquittal in criminal proceedings does not automatically extinguish civil liability. Civil liability may persist where the acquittal is based on reasonable doubt (since civil liability requires only a preponderance of evidence), where the court explicitly declares liability to be civil in nature, or where the civil liability does not arise from the crime of which the accused was acquitted. Extinction of the civil action occurs only when a final criminal judgment establishes that the act or omission giving rise to civil liability did not exist or that the accused did not commit the acts or omissions charged.
Application of Legal Standards to the Facts
The Court found that the act or omission giving rise to civil liability — the making and issuing of the check that was dishonored — clearly existed. Purificacion admitted issuing the check at Frederick’s request as payment for his obligation to Nissan. The Supreme Court emphasized that her defense that the check was a mere “show check” to boost Frederick’s credit was unconvincing because the check was issued after Frederick had already defaulted; there was no existing credit standing to be boosted. Because the criminal acquittal was based on reasonable doubt (failure to prove notice), it did not negate the underlying fact that Purificacion issued a worthless check; therefore, civil liability could properly be imposed on the preponderance of evidence.
Accommodation Party Argument and Negotiable Instruments Law
The CA had concluded Purificacion could not be an accommodation party because she issued the check after the sale and implied that acquittal barred civil liability. The Supreme Court declined to hinge the decision on accommodation party status. It noted that even if she were an accommodation party, Section 29 of the Negotiable Instruments Law would render her liable to a holder for value. In any event, the Court confined Purificacion’s liability to the civil consequences of issuing the worthless check, as the lower courts had done.
Character of BP 22 (Mala Prohibita) and Relevance of Intent
The Court reiterated that BP 22 is a statute of mala prohibita — the law proscribes issuing a bad check irrespective of the issuer’s intention. In such cases, the central inquiry is whether the statutory prohibition was breached. Becaus
Case Syllabus (G.R. No. 199067)
Procedural History
- Original criminal complaint for violation of Batas Pambansa Blg. 22 (BP 22) was filed by Nissan Gallery-Ortigas (Nissan) with the Office of the City Prosecutor of Quezon City against Purificacion F. Felipe (Purificacion).
- The City Prosecutor found probable cause and filed an Information before the Metropolitan Trial Court (MeTC), Quezon City (raffled to Branch 41).
- MeTC tried the case and rendered a judgment acquitting Purificacion of the crime charged (violation of BP 22) but held her civilly liable to Nissan in the amount of P675,000.00 with legal interest per annum from filing of the information until finality of the decision.
- Purificacion appealed to the Regional Trial Court (RTC), Branch 105, Quezon City, which affirmed the MeTC decision on December 22, 2008.
- Purificacion’s motion for reconsideration at the RTC was denied.
- Nissan filed a petition for review with the Court of Appeals (CA). The CA, in a decision dated May 20, 2009, granted the petition and set aside the RTC decision, exonerating Purificacion from civil liability arising from the issuance of the subject check.
- Nissan’s motion for reconsideration before the CA was denied; the CA issued a Resolution dated October 21, 2011.
- Nissan filed a petition for review on certiorari under Rule 45 before the Supreme Court (G.R. No. 199067). The Supreme Court issued its decision on November 11, 2013 (reported as 720 Phil. 828; 110 OG No. 31, 4870 (August 4, 2014)), granting the petition in part and reinstating the RTC decision with modification.
Facts
- Nissan is a car dealership; Frederick Felipe (Frederick), Purificacion’s son, purchased a Nissan Terrano 4x4 SUV from Nissan attracted by a discount of P220,000.00.
- The sales transaction was Cash-on-Delivery; no downpayment was required. The SUV was delivered on May 14, 1997.
- Frederick failed to pay upon delivery but nonetheless took possession of and used the SUV for more than four months without any payment.
- Nissan sent Frederick two demand letters on different dates and a final demand letter through its counsel after non-payment continued.
- Frederick visited Nissan and requested a grace period until October 30, 1997 to pay his outstanding obligation, then amounting to P1,026,750.00; through negotiation, this was reduced to P1,020,000.00.
- Frederick again failed to pay. On November 25, 1997, Frederick asked Purificacion to issue a check for the obligation; Purificacion issued a postdated check for P1,020,000.00.
- The check was dishonored upon presentment due to a stop payment instruction by the drawer or account issue.
- A demand letter informing Purificacion of the dishonor and requiring replacement within five days was served on her through Frederick, who lived with her. Purificacion refused to replace the check, asserting she was not the purchaser of the vehicle.
- Nissan filed the criminal case for violation of BP 22 on January 6, 1998.
- During preliminary investigation, Purificacion gave P200,000.00 as partial payment to amicably settle the civil aspect; no further payments were made thereafter.
Charge, Trial Court Findings and Civil Award
- Criminal charge: issuing a worthless / postdated check in violation of BP 22 (dishonored upon presentment).
- MeTC findings:
- Acquitted Purificacion of the crime of violation of BP 22.
- Nevertheless ordered Purificacion to pay Nissan P675,000.00 with legal interest per annum from the filing of the information until finality of the decision (civil liability).
- RTC findings on appeal:
- Affirmed the MeTC judgment, holding Purificacion estopped from denying issuance of the check as payment for Frederick’s obligation.
- Considered Purificacion an accommodation party and liable on the instrument to a holder for value even if the holder knew her to be an accommodation party.
- CA ruling on petition for review:
- Granted petitioner’s CA petition and set aside the RTC judgment.
- Reasoned there was no privity of contract between Nissan and Purificacion; civil liability could not be adjudged against her given her acquittal on the criminal charge.
- Held Purificacion could not be an accommodation party because she came in after Frederick’s default and six months after the contract; limited her liability to the act of issuing the worthless check, and because of acquittal, there was no basis for civil liability.
- Decretal portion: set aside prior judgments and exonerated Purificacion from civil liability for issuance of the subject check.
Issues Presented to the Supreme Court
- Whether Purificacion is civilly liable for the issuance of a worthless check despite her acquittal from the criminal charge under BP 22.
- Nissan’s specific grounds in the petition:
- That both MeTC and RTC concurred the issuance by Purificacion was for and in payment of her son’s outstanding obligation to Nissan, and thus she could not escape civil liability even if not a party to the sales contract.
- That Purificacion’s acquittal in the criminal charge due to failure to prove notice of dishonor does not warrant exoneration from civil liability.
Applicable Legal Provisions and Authorities Cited
- Rule 45 of the Rules of Court: procedural basis for petition for review on certiorari.
- Section 1, Rule 111 of the Rules of Court (Institution of criminal and civil act