Blameless wrongdoer

Generally, a person who signs a bad check even if it is a check issued by a corporation where he is an officer, is liable for violation of the bouncing checks law. But not in this case of Andy who is the President of LGI.

In his capacity as president, Andy issued two checks to PDPI in payment of his company’s arrearages on rental payments of the lot and factory building it is leasing from PDPI. One check was for P100,000.00 dated April 15, 1986; and the other was for P115,442.65 May 1, 1986. It was a condition written on the voucher for each check that the check would not be presented for payment without clearance from LGI to be given on May 30, 1986. However LGI was not able to give such clearance owing to a labor strike that paralyzed its business and resulted in the Company’s inability to fund its checks. This fact was communicated to PDPI by LGI on May 29,1986 where the latter told the former not to present said checks for payment. Still, PDPI deposited the checks on June 2, 1986 per another note attached to the voucher that if written approval was not received from LGI before May 30, 1986, the checks would be presented for payment. This note also contains the statement: "this is final and irrevocable" written by an officer of PDPI, not LGI.

The checks were dishonored thus prompting PDPI to notarially foreclose and sell at a public auction LGI’s properties impounded by PDPI amounting to P1,120,540.00. While this foreclosure and auction sale was declared invalid by the RTC upon petition of LGI, the court ordered the application of part of the proceeds thereof to the rental arrearages of LGI thereby leaving an excess of P 1,072,586.88 which the RTC likewise ordered PDPI to return to LGI.

Two years after it had already collected the amount of the checks through the notarial foreclosure and auction sale, PDPI filed criminal cases against Andy for violation of the Bouncing Checks Law. PDPI contended that all the elements comprising the violation of the said law were present in this case. The payment through the said foreclosure was made beyond the five day period, counted from notice of dishonor, provided by law, thus did not extinguish Andy’s criminal liability. The lower courts agreed with PDPI and sentenced Andy six months imprisonment for each check that bounced. This was affirmed by the Court of Appeals (CA) which denied due course to Andy’s appeal.

Were the lower courts and the CA correct?

No.

Considering the circumstances of the case Andy should not be held liable for violation of the Bouncing Checks Law (.B.P.22) and sentenced to six months imprisonment for each bouncing check.

The Bouncing Checks Law "was devised to safeguard the interest of the banking system and the legitimate public checking account user. It was not designed to favor or encourage those who seek to enrich themselves through manipulation and circumvention of the purpose of the law. To best serve the ends of criminal justice, Administrative Circular 12-2000 was even issued to express a policy preference for fine as penalty in cases of B.P. 22 violations rather than imprisonment.

Moreover, while the philosophy underlying our penal system leans toward the classical school that imposes penalties for retribution, such retribution should be aimed at actual and potential wrongdoers. In the two criminal cases filed by PDPI in this case, the checks issued were corporate checks that LGI allegedly failed to fund for a valid reason duly communicated to PDPI. Further, PDPI through notarial foreclosure and auction that were later on judicially declared invalid, sold LGI’s properties amounting to P 1,120,540.00 to satisfy its claim for unpaid rentals amounting to P301, 953.12. Thus by resorting to foreclosure and sale, PDPI was able to collect the face value of the two checks totaling P215,442.65, This was the situation when, almost two years after the auction sale, Andy was charged with two counts of violation of B.P. 22. By that time the civil obligation of LGI to PDPI was no longer subsisting.That the money value of the two checks was already collected could not be ignored in appreciating the antecedents of the criminal charges against Andy. Under these circumstances, Andy conviction cannot be upheld without running afoul of the basic principles of justice and fairness (Griffith vs. Court of Appeals 379 SCRA 94).