FIRST DIVISION
TIONG ROSARIO, G.R.
No. 133608
Petitioner,
Present:
- versus - PUNO, C.J., Chairperson,
CARPIO,
AZCUNA,
and
LEONARDO-DE
CASTRO, JJ.
ALFONSO CO,
Respondent.
Promulgated:
X
-----------------------------------------------------------------------------------------X
DECISION
AZCUNA, J.:
This is
a Petition for Review on Certiorari
under Rule 45, in relation to Section 2(c) of Rule 41 of the Rules of Court,
assailing the Resolution[1]
dated
Petitioner Tiong Rosario is the proprietor of TR
Mercantile (TRM), a single proprietorship engaged in the business of selling
and trading paper products and supplies of various kinds; while respondent
Alfonso Co is the Chairman and President of Modern Paper Products, Inc. (MPPI). In the course of its business, MPPI purchased
from TRM a variety of paper products on credit.[2] As payment for his purchases, respondent
issued the following China Banking Corporation checks in favor of TRM:
|
Check No. |
Date |
Amount |
|
BO32101 |
|
|
|
BO32122 |
|
|
|
BO32138 |
|
|
Subsequently, on presentment for payment, Check Nos.
B032101,[3] B032138[4]
and B032122[5]
were dishonored by the drawee bank on
In a letter[7]
dated June 27, 1995, TRM demanded that respondent make good the checks and pay MPPI’s
outstanding obligations within five banking days from receipt of the letter,
otherwise, it would be constrained to file both criminal and civil actions to
protect its interest. Respondent,
however, failed to heed the demand.
Thus, on
Prior thereto, or on May 12, 1995, MPPI and its
principal stockholders, the Spouses Alfredo and Elizabeth Co filed before the Securities
and Exchange Commission (SEC), under P.D. No. 902-A, a Petition for Suspension
of Payments for Rehabilitation Purposes with prayer for the creation of a
management committee and for a temporary restraining order and/or preliminary injunction,
docketed as SEC Case No. 05-95-5054.
On
Meanwhile, in the criminal cases pending before the
MeTC, respondent was arraigned, and the cases were set for trial.[10]
Prior to initial trial, respondent filed a Motion to
Suspend Proceedings.[11] In support of his motion, movant relied on
the following grounds:
I.
A corporation under suspension of
payments and corporate rehabilitation pursuant to P.D. No. 902-A, as amended,
may not be validly charged for violation of B.P. Blg. 22, when demand on said
corporation for dishonored checks was made subsequent to the filing of said
petition for suspension of payments.
II.
Pursuant to Sec. 6 (c) of P.D.
902-A, as amended, and in view of the pendency of SEC Case No. 05-95-5054, as
well as of the issuance of by the SEC of an order creating a management
committee to oversee the operations of the corporation and suspending all
actions for claims against the corporation, the suspension of the proceedings
in the instant suit is warranted.
III.
Pendency of SEC Case No. 05-95-5054
presents a prejudicial question within the scope of Sections 5 and 6, Rule 111,
New Rules of Criminal Procedure, and therefore warrants the suspension of the
instant proceedings.[12]
Respondent prayed that the proceedings in the MeTC
be suspended during the pendency of the SEC proceedings for rehabilitation and
suspension of payments of MPPI.[13] Petitioner opposed said motion.[14]
Corollarilly, in an Order dated
On
Aggrieved, respondent filed on
In his petition, respondent admitted that he issued
the subject checks as a corporate officer of MPPI as payment for purchases made
from TRM. He further claimed that he did
not make good the checks upon demand because MPPI had already filed a petition
for suspension of payments before the SEC which ordered that all actions for
claims against MPPI be suspended.
On
On
IN VIEW OF THE FOREGOING,
Respondent Court is directed to suspend the proceedings in Criminal Cases Nos.
18521-3 during the pendency of the petition in SEC Case No. 05-95-5054.[24]
In granting the petition, the RTC ratiocinated that
from the time MPPI placed itself under the operation of P.D. No. 902-A on
Hence, this petition assigning the following errors:
I
THE REGIONAL TRIAL COURT ERRED IN
ORDERING THE SUSPENSION OF THE CRIMINAL PROCEEDINGS AGAINST RESPONDENT CO, IN
THAT:
A. THERE IS NO LAW
WHICH AUTHORIZES THE SUSPENSION OF CRIMINAL PROCEEDINGS AGAINST A CORPORATE
OFFICER FOR VIOLATION OF B.P. 22 ON ACCOUNT OF THE PENDENCY OF A PETITION FOR
SUSPENSION OF PAYMENTS FILED BY HIS CORPORATION.
B.
CRIMINAL PROSECUTION CANNOT BE ENJOINED.
C. IN SEEKING
SUSPENSION OF THE CRIMINAL PROCEEDINGS AGAINST HIM IN VIEW ALONE OF THE PENDENCY
OF HIS CORPORATION’S PETITION FOR SUSPENSION OF PAYMENTS, RESPONDENT CO IN
EFFECT PLEADS FINANCIAL HARDSHIPS AS A DEFENSE TO A B.P. 22 PROSECUTION, WHICH,
HOWEVER, IS NOT RECOGNIZED.
II
IT WAS ERROR FOR THE REGIONAL TRIAL
COURT, AS A CIVIL COURT IN A CIVIL PROCEEDING, TO TAKE COGNIZANCE OF MATTERS OF
DEFENSE WHICH COULD BE RAISED ONLY AT THE TRIAL IN THE CRIMINAL CASE BEFORE THE
METROPOLITAN TRIAL COURT. [26]
The issue is:
WHETHER A CRIMINAL CASE AGAINST A
CORPORATE OFFICER FOR VIOLATION OF BP 22 COULD BE SUSPENDED ON ACCOUNT OF THE
PENDENCY OF A PETITION FOR SUSPENSION OF PAYMENTS FILED BY THAT OFFICER’S
CORPORATION WITH THE SECURITIES AND EXCHANGE COMMISSION.[27]
Petitioner argues that nowhere in the Insolvency Law
or P.D. No. 902-A is it provided that criminal prosecution of a corporate
officer for violation of B.P. Blg. 22 shall be suspended on account of the
pendency of a petition for suspension of payments. Under the Insolvency Law, the filing of a
petition for suspension of payments will only result in the suspension of any
execution pending against the debtor, and only
upon request by the debtor to this effect, and that, generally, from the
time of filing of the petition, no creditor may sue to collect his claim against
the debtor.[28]
Petitioner adds that under P.D. No. 902-A, the
appointment of a management committee, rehabilitation receiver, board or body
in a petition for suspension of payments would only have the effect of
suspending “all actions for claims” against the corporation, partnership, or
association under management or receivership.
Prosecution for violation of B.P. Blg. 22 is not an “action for claim”
against a corporation but a criminal proceeding brought by the State against a
violator of the law.[29]
To buttress her claim, petitioner contends that
criminal prosecution of the respondent is specifically mandated by law
considering that B.P. Blg. 22 states that where a check is drawn by a
corporation, company or entity, the person or persons who actually signed the
check in behalf of such drawer shall be liable.[30] Further, P.D. No. 902-A was never intended to
suspend criminal proceedings for violation of B.P. Blg. 22.
Petitioner further argues that the general rule is
that injunction or prohibition does not lie to restrain a criminal prosecution subject
to well-defined exceptions which do not include the instant case.[31]
Petitioner maintains that a petition for suspension of
payments is founded on the inability to pay a debt when it falls due which
cannot stand as a ground to suspend criminal prosecution, especially where the
individual defendant is not the party seeking suspension of payment but a
corporation.[32]
Finally, petitioner contends that respondent’s
petition before the RTC presented an issue of whether his prosecution in the MeTC
should be enjoined due to the pendency of MPPI’s petition for suspension of
payments in the SEC. However, the RTC,
sitting in a civil court in a civil proceeding under Rule 65 of the Rules of
Court, went beyond this issue and took cognizance of, and passed upon, an issue
which could only be raised in the MeTC as a matter of defense.[33]
For his part, respondent posits that the filing and
pendency of SEC Case No. 05-95-5054 prevented him from making good the subject
checks. He maintains that while he could
have funded the checks when demand was made by the petitioner, he could not
legally do so. Had he made arrangements
for the payment of the checks notwithstanding the pendency of the SEC case,
such act would have had the effect of the corporation paying a creditor and
giving it undue preference over the others, which is disallowed by law.[34]
The petition is meritorious.
Stripped of the non-essentials, the issue before
this Court is the propriety of the suspension of Criminal Case Nos. 18521,
18522, and 18523 during the pendency of SEC Case No. 05-95-5054. Considering that the rehabilitation
proceedings result in the suspension of all claims against a corporation, the
issue of whether or not the suspension includes the criminal cases against the
respondent must be resolved.
The resolution of the above issues hinges on the
determination of the following: (1) the meaning of “actions for claims” against
the distressed corporation; and (2) the effectivity of the suspension.
Section 6 (c) of P.D. No. 902-A, as amended,
provides:
Section 6. In order to effectively
exercise such jurisdiction, the Commission shall possess the following powers:
xxx
c) To
appoint one or more receivers of the property, real or personal, which is the
subject of the action pending before the Commission in accordance with the
pertinent provisions of the Rules of Court in such other cases whenever
necessary in order to preserve the rights of the parties-litigants and/or
protect the interest of the investing public and creditors: ... Provided, finally, That upon appointment of
a management committee, the rehabilitation receiver, board or body, pursuant to
this Decree, all actions for claims against corporations, partnerships, or
associations under management or receivership pending before any court,
tribunal, board or body shall be suspended accordingly.(italics supplied)
As early as Finasia
Investment and Finance Corp. v. Court of Appeals,[35]
this Court clarified that the word “claim” used in Sec. 6 (c) of P.D. No. 902-A,
as amended, refers to debts or demands of a pecuniary nature and the assertion
of a right to have money paid. It is
used in special proceedings like those before AN administrative court on
insolvency.[36] In Arranza
v. B.F. Homes, Inc.,[37] “claim”
was defined as an action involving monetary considerations. Clearly, the suspension contemplated under
Sec. 6 (c) of P.D. No. 902-A refers only to claims involving actions which are
pecuniary in nature.
The purpose of suspending the proceedings under P.D.
No. 902-A is to prevent a creditor from obtaining an advantage or preference
over another and to protect and preserve the rights of party litigants as well
as the interest of the investing public or creditors.[38] It is intended to give enough breathing space
for the management committee or rehabilitation receiver to make the business
viable again, without having to divert attention and resources to litigations
in various fora.[39] The suspension would enable the management
committee or rehabilitation receiver to effectively exercise its/his powers
free from any judicial or extrajudicial interference that might unduly hinder
or prevent the “rescue” of the debtor company. To allow such other action to continue would
only add to the burden of the management committee or rehabilitation receiver,
whose time, effort and resources would be wasted in defending claims against
the corporation instead of being directed toward its restructuring and
rehabilitation.[40]
Whereas, the gravamen
of the offense punished by B.P. Blg. 22
is the act of making and issuing a worthless check; that is, a check that is
dishonored upon its presentation for payment.[41] It is designed to prevent damage to trade, commerce, and
banking caused by worthless checks. In Lozano v. Martinez,[42]
this Court declared that it is not the nonpayment of an obligation which the
law punishes. The law is not intended or
designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under
pain of penal sanctions, the making and circulation of worthless checks. Because of its deleterious effects on the
public interest, the practice is proscribed by the law. The law punishes the act not as an offense
against property, but an offense against public order. The prime purpose of the criminal
action is to punish the offender in order to deter him and others from
committing the same or similar offense, to isolate him from society, to reform
and rehabilitate him or, in general, to maintain social order.[43] Hence, the criminal prosecution is designed
to promote the public welfare by punishing offenders and deterring others.
Consequently, the filing of the case for violation
of B.P. Blg. 22 is not a “claim” that can be enjoined within the purview of
P.D. No. 902-A. True, although
conviction of the accused for the alleged crime could result in the restitution,
reparation or indemnification of the private offended party for the damage or
injury he sustained by reason of the felonious act of the accused,
nevertheless, prosecution for violation of B.P. Blg. 22 is a criminal
action.
A criminal action has a dual purpose, namely, the
punishment of the offender and indemnity to the offended party. The dominant and primordial objective of the
criminal action is the punishment of the offender. The civil action is merely incidental to and
consequent to the conviction of the accused.
The reason for this is that criminal actions are primarily intended to
vindicate an outrage against the sovereignty of the state and to impose the
appropriate penalty for the vindication of the disturbance to the social order
caused by the offender. On the other
hand, the action between the private complainant and the accused is intended
solely to indemnify the former.[44]
As to when the suspension commences, as held in Rizal Commercial Banking Corporation v.
Intermediate Appellate Court[45]:
1. All claims against corporations, partnerships,
or associations that are pending before any court, tribunal, or board, without
distinction as to whether or not a creditor is secured or unsecured, shall be suspended effective upon the
appointment of a management committee, rehabilitation receiver, board, or body
in accordance with the provisions of Presidential Decree No. 902-A.[46]
(italics supplied)
Otherwise stated, from the time a management
committee, rehabilitation receiver, board or body is duly appointed pursuant to
P.D. No. 902-A, all actions for claims against a distressed corporation pending
before any court, tribunal, board or body shall be suspended accordingly. As rationalized in RCBC:
It is thus adequately clear that
suspension of claims against a corporation under rehabilitation is counted or
figured up only upon the appointment of a management committee or a
rehabilitation receiver. The holding
that suspension of actions for claims against a corporation under
rehabilitation takes effect as soon as the application or a petition for
rehabilitation is filed with the SEC — may, to some, be more logical and wise
but unfortunately, such is incongruent with the clear language of the law. To
insist on such ruling, no matter how practical and noble, would be to encroach
upon legislative prerogative to define the wisdom of the law — plainly judicial
legislation.[47]
From the sequence of events, it is apparent that
Check Nos. B032101, B032138, and B032122 were dishonored on
It
must be emphasized at this point that as far as the criminal aspect of the cases
is concerned, the provisions of Sec. 6 (c) of P.D. No. 902-A should not
interfere with the prosecution of a case for violation of B.P. Blg. 22, even if
restitution, reparation or indemnification could be ordered, because an absurdity
would result, i.e., one who has
engaged in criminal conduct could escape punishment by the mere filing of a
petition for rehabilitation by the corporation of which he is an officer. At any rate, should the court deem it fit to
award indemnification, such award would now fall under the category of a claim
under Sec. 6 (c) of P.D. No. 902-A, considering that it is already one for
monetary or pecuniary consideration.
Only to this extent can the order of suspension be considered obligatory
upon any court, tribunal, branch or body where there are pending actions for
claims against the distressed corporation.
The trend is towards vesting administrative bodies
like the SEC with the power to adjudicate matters coming under their particular
specialization, to ensure a more knowledgeable solution of the problems
submitted to them. This would also
relieve the regular courts of a substantial number of cases that would
otherwise swell their already clogged dockets. But as expedient as this policy
may be, it should not deprive the courts of justice of their power to decide criminal
cases. Otherwise, the creeping take-over
by the administrative agencies of the judicial power vested in the courts would
render the judiciary virtually impotent in the discharge of the duties assigned
to it by the Constitution.[48]
WHEREFORE, the Petition is hereby GRANTED. The Resolution of
the Regional Trial Court, Branch 161, Pasig City in SCA No. 1259, dated April
6, 1998, is REVERSED and SET ASIDE. The Metropolitan Trial Court,
No costs.
SO
ORDERED.
ADOLFO
S. AZCUNA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
ANTONIO T. CARPIO RENATO C. CORONA
Associate
Justice Associate Justice
TERESITA
J. LEONARDO-DE CASTRO
Associate Justice
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court’s
Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 195-208.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23] Supra, note 1.
[24]
[25]
[26]
[27]
[28]
[29]
[30]
[31]
[32]
[33]
[34]
[35] G.R.
No. 107002,
[36]
[37] 389
Phil. 318 (2000).
[38] Supra, note 35 at 450-451.
[39] Rubberworld (Phils.), Inc. v. NLRC, 365
Phil. 273, 276-277 (1999).
[40] Sobrejuanite v. ASB Development Corporation,
G.R. No. 165675,
[41] Ricaforte v. Jurado, G.R. No. 154438,
[42] Lozano v.
[43] Quinto v. Andres, G.R. No. 155791,
[44] Salazar v. People, G.R. No. 151931,
[45] G.R.
No. 74851,
[46]
[47]
[48] Saura v. Saura, Jr., G.R. No. 136159,
September 1, 1999, 313 SCRA 465, 474, citing
Macapalan v. Katalbas-Moscardon, G.R.
No. 101711, October 1, 1993, 227 SCRA 49, 54-55.