REPUBLIC OF THE PHILIPPINES

National Capital Judicial Region

METROPOLITAN TRIAL COURT
Branch 47, Pasay City

PEOPLE OF THE PHILIPPINES,

Plaintiff,
Criminal Case No. 00-90
-versus- Criminal Case No. 00-91
Criminal Case No. 00-92
LUCIANO PILARTA, For: Violation of BP Blg. 22
Accused.
x-----------------------------------------x

JOINT DECISION

Accusation is not synonymous with guilt. It is incumbent upon the prosecution

to demonstrate the culpability lies.1 The freedom of the accused is forfeited only if the
requisite quantum of proof necessary for his conviction be in existence. His guilt must
be proved beyond reasonable doubt. After an assiduous scrutiny of the testimonial and
documentary evidence of the State in this case, did the accused convincingly set up
payment as a defense in these BP No. 22 cases?

THE CHARGES

In Criminal Case No. 00-90, accused Luciano Pilarta stands charged with
violation of Batas Pambansa Bilang 22, the accusatory portion of the Information
reads as follows:

That on or about the 9th day of March, 1998, in Pasay City, Metro Manila,
Philippines and within the jurisdiction of the Honorable Court, the above-named
accused, Luciano Pilarta well knowing that his account with the bank has already been
closed, did then and there wilfully, unlawfully and feloniously draw, make out and
issue RCBC Check No. 0331961 dated August 15, 1998 in the amount of P365, 000.00
for value and as payment of his legal obligation to private complainant Rene Daguman
but said check upon presentment to the drawee bank on maturity date was promptly
dishonoured for reasons of ACCOUNT CLOSED, and notwithstanding demands
made on him, accused failed and refused and still refuses to make good said checks
face value thereof, to the damage and prejudice of the private complainant in the
aforesaid amount of P365,000.00

Contrary to law.

In Criminal Case No. 00-91, accused Luciano Pilarta stands charged with
violation of Batas Pambansa Bilang 22, the accusatory portion of the Information
reads as follows:

1
See People vs. Castro, G.R. No. L-42478, October 4, 1989.

1
 That on or about the 9th day of March, 1998, in Pasay City, Metro Manila,
Philippines and within the jurisdiction of the Honorable Court, the above-named
accused, Luciano Pilarta well knowing that his account with the bank has already been
closed, did then and there wilfully, unlawfully and feloniously draw, make out and
issue RCBC Check No. 0331962 dated August 31, 1998 in the amount of P360, 000.00
for value and as payment of his legal obligation to private complainant Rene Daguman
but said check upon presentment to the drawee bank on maturity date was promptly
dishonoured for reasons of ACCOUNT CLOSED, and notwithstanding demands
made on him, accused failed and refused and still refuses to make good said checks
face value thereof, to the damage and prejudice of the private complainant in the
aforesaid amount of P360,000.00

Contrary to law.

In Criminal Case No. 00-92, accused Luciano Pilarta stands charged with
violation of Batas Pambansa Bilang 22, the accusatory portion of the Information
reads as follows:

That on or about the 9th day of March, 1998, in Pasay City, Metro Manila,
Philippines and within the jurisdiction of the Honorable Court, the above-named
accused, Luciano Pilarta well knowing that his account with the bank has already been
closed, did then and there wilfully, unlawfully and feloniously draw, make out and
issue RCBC Check No. 0331967 dated November 15, 1998 in the amount of P250,
000.00 for value and as payment of his legal obligation to private complainant Rene
Daguman but said check upon presentment to the drawee bank on maturity date was
promptly dishonoured for reasons of ACCOUNT CLOSED, and notwithstanding
demands made on him, accused failed and refused and still refuses to make good said
checks face value thereof, to the damage and prejudice of the private complainant in
the aforesaid amount of P250,000.00

Contrary to law.

STATEMENT OF THE CASE

During the arraignment on August 15, 2000, accused Luciano Pilarta

entered a plea of not guilty. The preliminary conference on December 13, 2000 was
reset. It was terminated on February 28, 2000. Trial on the merit ensued. On October
29, 2001, the prosecution formally filed its formal offer of evidence. The defense filed
any comment or opposition thereto. The Court admitted prosecutions Exhibits A to
Q with sub-markings. Thereafter, the prosecution rested its case. Starting March 12 ,
2002, defenses presentation of evidence was reset many times. On November 11,
2002, defense formally offered its documentary exhibits. The prosecution filed its
comment or opposition thereto. The Court admitted Exhibits 1 to 10 with sub-
markings.

2
 EVIDENCE FOR THE PROSECUTION

Testimonial Evidence

The prosecution presented the following witnesses:

RENE DAGUMAN testified that accused Luciano Pilarta and his wife Leonora
Pilarta are indebted to him in the amount of Seven million Pesos (P7,000,000.00)
sometime in 1997 and in payment thereof, they issued to him several checks that
bounced.2 Consequently, he filed BP No. 22 cases them. In settlement of the cases, they
agreed to a re-structure of the outstanding obligation by putting up a security consisting
of two (2) parcels of land amounting to more or less Three Million Pesos
(P3,000,000.00) while there is no security to the remaining Three Million and Five
Hundred Thousand Pesos (P3,500,000.00). On March 9, 1998, the herein accused his
wife Leonora Pilarta issued Twenty (20) RCBC checks including the subject checks of
these three (3) cases, to wit: (1) check no. 0331961 dated August 15, 2998 in the amount
of P365,000.00; (2) check no. 0331962 dated August 31, 1998 in the amount of
P360,000.00; and (3) check no. 0331967 dated November 15, 1998 in the amount of
P250,000.00 which all bounced for the reason ACCOUNT CLOSED. It was accused
Luciano Pilarta who signed the subject Three (3) checks.3 The demand letter was
personally received by Lucinao Pilarta on July 1, 1999.4

Documentary Evidence

The prosecution offered the following exhibits which were admitted by the
Court: (1) list of 20 RCBC checks as Exhibit A; (2) RCBC check no. 0331961 AS Exhibit
B; Signature Of accused as drawer of the check as Exhibit B-1; Rubber
stampAccount Closed imprinted by the bank on the face of check as Exhibit B-2 ;
Bank entry at the back of Exh. B, Account Cloused, With date August 18, 1998 as
Exhibit B-3 ; (3) RCBC Check No. 0331962 as Exhibit C; Signature of accused as
drawer of the check as Exhibit C-1; Rubber stamp Account Closed imprinted by the
bank on the face of check as Exhibit C-2; Bank entry at the back of Exh. C, Account
Closed, with date September 21,1998 as Exhibit C-3; (4) RCBC Check no. 0331967 as
Exhibit D; Signature of accused as drawer of the check as Exhibit D-1; Rubber stamp
Account Cloused imprinted by the bank on the face of the check as Exhibit D-2; Bank
entry at the back of the check Account Closed with date November 17, 1998 as
Exhibit D-3; (5) Demand Letter dated June 2 1999 of the Atty. Alan Leynes addressed to
the accused as Exhibit E; Registry Receipt of the demand letter dated June 2,1999 sent
by registered mail to accused as Exhibit E-1; Registry Return Receipt as Exhibit F ; (6)
RCBC Check No. 0331957 as Exhibit G; (7) RCBC Check No. 0331958 as Exhibit H; (8)
RCBC Check No. 0331960 as Exhibit I; (9) RCBC Check No. 0331961 as Exhibit J ; (10)
RCBC Check No. 0331962 as Exhibit K; (11) RCBC Check No. 0331963 as Exhibit L ;
(12) RCBC Check No. 0331966 as Exhibit M; (13) RCBC Check No. 0331965 as Exhibit
N; (14) RCBC Check No. 0331968 as Exhibit O; (15) RCBC Check No.0331969 as
Exhibit P; (16) Certification dated May 15, 2001 as Exhibit Q with sub markings ; (17)
Handwritten receipt executed by accused and his wife, Leonora Pilarta as Exhibit R .

2 See TSN dated May 7, 2001, p. 4.

3 See TSN dated May 7, 2001, pp. 12 to 13.
4 See TSN dated May 7, 2001, pp. 17 to 18.

3
 EVIDENCE FOR THE DEFENSE

Testimonial Evidence

The defense presented the following witnesses:

LUCIANO PILARTA testified that he has long paid the Three (3) checks in
these cases.5 He owed the private complainant Rene Daguman the amount of more or
less Four million pesos (P4,000,000.00)6 He issued checks to herein private
complainant amounting to Two Million Forty Thousand Pesos (P2,040,000.00) that
bounced. Consequently, cases were filed against him and his wife in 1998.7 They settled
it with private complainant by re-structuring of the loan.8 He and his wife executed a
promissory note and a deed of real estate mortgage as collateral to private complainant.
Also, he issued Twenty (20) checks to re-structure the loan. According to him, Seven (7)
to Eight (8) checks were good while the rest bounced.9 He was made to sign a blank
Deed of Absolute Sale and his wife Leonora Pilarta was made to execute a Deed of
Assignment by private complainant. 10 Only the private complainant has a copy of the
Deed of Absolute Sale the subject properties therein are mini-market at Obando,
Bulacan worth P2,800,00.00; Tagaytay house and lot worth P1,000,000.00; and stall at
South Terminal Commercial worth P1,200,000.00.11 As to the Deed of Assignment,
only his wife Leonora Pilarta knew it.12 Private complainant Rene Daguman is
supposed to return all the checks he issued, including the subject Three (3) checks in
these cases by making them to believe that they will get the said checks from his
lawyer.13 This turned out to be false as the checks were not returned. On January 19,
1999, private complainant took possession of the properties subject of the Deed of
Absolute Sale. When the Three (3) properties were delivered to private complainant, his
obligation was fully settled so these BP No. 22 cases should have been dismissed.14 The
value of the properties in possession of the private complainant is more than the
amount of his outstanding obligation to him.15

During his cross-examination, he admitted that he has no documents to prove

that the property in Obando, Bulacan is worth P2,000,000.00.16 The Extra-judicial
settlement over it showed its value to be P480, 600.00. The Tagaytay property is worth
P75,000.00 as shown by the Deed of Absolute Sale.

In his re-direct examination, he testified that they re-structure the obligation and
paid Seven percent (7%) interest per month.17 He reiterated that the checks were not
returned even these were settled already.18

5 See TSN dated April 10, 2002, p. 4.

6 See TSN dated April 10, 2002, p. 5.
7See TSN dated April 10, 2002, p. 6.
8 See TSN dated April 10, 2002, p. 9.
9 See TSN dated April 10, 2002, p. 11.
10 See TSN dated April 10, 2002, p. 12.
11 See TSN dated April 10, 2002, p. 13.
12 See TSN dated April 10, 2002, p. 14.
13 Ibid.
14 See TSN dated April 10, 2002, p. 16.
15 See TSN dated April 10, 2002, p. 17.
16 TSN dated April 10, 2002, p. 24.
17 TSN dated April 26, 2002, p. 9.
18 TSN dated April 26, 2002, p. 12.

4
 In his re-cross-examination, he admitted that out of the Twenty (20) checks he
issued to the private complainant for the re-structure of his loan, Four (4) to Five (5)
checks were filed against them.19

LEONORA PILARTA testified that she was aware of the Three (3) checks in
these cases. They settled their obligation of the cases filed against them in Pasay City in
the amount of P2,040,000 with private complainant Rene Daguman by issuing to him
the post dated checks with Seven percent (7%) interest in February, 1998.20 They
executed a real estate mortgage dated March 3, 1998 and signed a promissory note
dated the same. The properties consisting of 200 square meters mini-market at
obando, Bulacan worth P2,700,000.00; Tagaytay property worth P1,100,000.00; and
baclaran store rented from Galvez Realty in the amount of P15,500 totalling to
P200,000.00 annually and in six (6) years, totalling to Six Million (P6,000,000.00)
which were delivered to private complainant are enough to cover the obligations as
reflected in the Three (3) subject checks in these cases.21 They filed a complaint with the
RTC Malolos, Bulacan against private complainant Rene Daguman entitled Luciano
and Leonora Pilarta vs. Rene Daguman, docket no. 806 F-2002 for Specific
Performance, Reformation of Instrument and Breach of Contract.22 AT the time she
testified, there was an on going trial of the Civil case.

Documentary Evidence

The defense offered the following exhibits which were admitted by the Court:
(1 ) Copy of the affidavit-complaint dated February 4 1998 as Exhibit 1 with sub
marking; (2) Second affidavit-complaint as Exhibit 2 with sub marking; (3) Copies of
the receipts showing that the accused and his wife Leonora Pilarta were continuously
paying rents to the corporation owned and controlled by private complainant as
Exhibit 3, Exhibit 3-A to 3-CC; (4) Copy of the Real Estate Mortgage executed by
the accused and his wife Leonora Pilarta in favour of the private complainant as
Exhibit 4 with sub markings; (5) Copy of the acknowledgement as Exhibit 5; (6)
Copy of the Deed of the Absolute Sale as Exhibit 6; (7) Copy of the Deed of Absolute
Sale as Exhibit 7; (8) Copy of the Real Estate Mortgage as Exhibit 8; (9) Copy of
the promissory note executed by the accused and his wife Leonora Pilarta in favour of
private complainant as Exhibit 9; and (10) Copy of the complaint for specific
performance and/or reformation of instrument and/or breach of contract that accused
and his wife Leonora Pilarta filed against the private complainant as Exhibit 10.

REBUTTAL EVIDENCE

Testimonial Evidence

The prosecution presented again the private complainant as its Rebuttal witness.

RENE DAGUMAN testified that it is untrue that the accused Luciano Pilarta
and his wife Leonora Pilarta fully paid him the subject Three (3) checks in these cases
because these checks are still with him.23 The accused and his wife wrote him a letter

19 TSN dated April 26, 2002, pp. 14 to 15.

20
TSN dated September 9, 2002, p. 12.
21
TSN dated January 12, 2004, p. 8.
22 TSN dated January 12, 2004, p. 9.
23
TSN dated April 3, 2006, p. 4.

5
dated November 3, 1998 asking time to pay their outstanding obligation. It is untrue
that the obligation of the accused and his wife is Three Million Pesos (P3,000,000.00).
It is Seven Million Pesos (P7,000,000.00). They issued to him Twenty (20) checks in
the amount of Six Million and Five Hundred Thousand Pesos (P6,500,000.00).24 The
obligation in the amount of Seven Million Pesos (P7,000,000.00) are secured by
collateral amounting to Three Million (P3,500,000.00) while the remaining Four
Million Pesos (P4,000,000.00) are not secured by a collateral. The discrepancy of the
amount was due to discount of obligation he gave during their settlement. When the
Three (3) properties subject matter of Deed of Mortgage were delivered to him as a
form of payment, he returned to them Seven (7) checks in the amount of Three Million
Thirty One Thousand Two Hundred Ninety Pesos (P3,031,290.00).

Documentary Evidence

During the rebuttal, complainant identified the handwritten letter of the accused
Luciano Pilarta and the checks he returned to them to cover the payments to the afore-
mentioned Three (3) properties which were previously marked.

ISSUE

The issue is whether or not accused Luciano Pilarta is guilty as charged.

APPLICABLE LAW

The applicable law is Section 1 of Batas Pambansa Blg. 22 providing: Checks

without sufficient funds. - Any person who makes or draws and issues any check to
apply on account or for value, knowing at the time of issue that he does not have
sufficient funds in or credit with the drawee bank for the payment of such check in full
upon its presentment, which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same reason had
not the drawer, without any valid reason, ordered the bank to stop payment, shall be
punished by imprisonment of not less than thirty days but not more than one (1) year or
by a fine of not less than but not more than double the amount of the check which fine
shall in no case exceed Two Hundred Thousand Pesos, or both such fine and
imprisonment at the discretion of the court. The same penalty shall be imposed upon
any person who, having sufficient funds in or credit with the drawee bank when he
makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a
credit to cover the full amount of the check if presented within a period of ninety (90)
days from the date appearing thereon, for which reason it is dishonored by the drawee
bank. Where the 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 under this
Act.

RULING

For accused Luciano Pilarta to be convicted for violation of Batasang

Pambansa Bilang 22, the following elements must be present: (1) the making, drawing
and issuance of any check to apply for account or for value; (2) the knowledge of the
24
TSN dated April 3, 2006, p. 12.

6
maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or
credit with the drawee bank for the payment of the check in full upon its presentment;
and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of
funds or credit or dishonor for the same reason had not the drawer, without any valid
cause, ordered the bank to stop payment.25

After a painstaking evaluation of the prosecutions evidence, all of the foregoing

elements of the offense were never refuted by the herein accused. Notwithstanding to
such admission, still the prosecution was able to discharge it burden of proof to
establish the guilt of the accused beyond reasonable doubt.

First, the accused Luciano Pilarta issued the subject Three (3) checks in payment
of his obligation which is the subject of loan re-structure thus a consideration existed.
The law does not distinguish if check is issued to pay an obligation or to a guarantee an
obligation.26 What the law punishes is the issuance of a bouncing check, not the
purpose for which it was issued nor the terms and conditions relating to its issuance.
The mere act of issuing a check is malum prohibitum.27

Second, accused Luciano Pilarta received personally the demand letter given by
private complainant Rene Daguman. He was notified of the dishonour of the subject
checks he issued yet he failed to make good of the checks or make an arrangement with
the private complainant Rene Daguman for its full payment. The makers knowledge is
presumed from the dishonour of the checks for insufficiency of funds.28 The accused
Luciano Pilarta did not rebut the presumption of knowledge of insufficiency of funds in
or credit with the bank from the act of making, drawing and issuing a check , payment of
which was refused by the drawee bank for insufficiency of funds when presented within
90 days from the date of the issue.29

Lastly, the subject checks were dishonoured for the reason of ACCOUNT CLOSED
stamp marked on the said checks, without the accused Luciano Pilarta, for a valid
cause, ordered the drawee bank to make a stop payment. In a recent case, when a check
was dishonored when deposited for payment in Banco de Oro due to DAIF (Drawn
Against Insufficient Funds), the first and the third elements of BP No. 22 were met.30

Can the defense of payment interpose by the herein accused exculpate him from
criminal liability of BP No. 22?

The answer is in the negative. Chapter VIII, Discharge of Negotiable Instruments,

Section 119 of Act No. 2031, provides: Instrument; how discharged. A negotiable
instrument is discharged (a) By payment in due course by or on behalf of the
principal debtor; (b) By payment in due course by the party accommodated, where the
instrument is made or accepted for accommodation; (c) By the intentional cancellation
thereof by the holder; (d) By any other act which will discharge a simple contract for the
payment of money; (e) When the principal debtor becomes the holder of the instrument
at or after maturity in his own right. There is no evidence that the subject Three (3)
checks that bounced were paid by the accused Luciano Pilarta upon demand by the
private complainant Rene Daguman.

25 Arceo, Jr. vs. People, G.R. No. 142641, July 17, 2006.
26 Que vs. People 154 SCRA 160.
27 Lozano v. Martinez, 146 SCRA 323, 1986.
28 See Wong vs. Court of Appeals 351 SCRA 100.
29 See Caras vs. Court of Appeals, G.R. No. 129900, October 2, 2001.
30
See James Svendsen vs. People, G.R. No. 175381, February 26, 2008.

7
 The delivery of the Three (3) properties involved in the loan re-structure is an
example of dation in payment whereby property is alienated to the creditor in
satisfaction of a debt in money which shall be governed by the law of sales.31 There is
delivery and transmission of ownership of a thing by the debtor to the creditor as an
accepted equivalent of the performance of the obligation.32 The property given may
consist, not only of a thing, but also of a real right such as a usufruct or of a credit
against a third person.33 The dation in payment extinguishes the obligation to the
extent of the value of the thing delivered, either as agreed upon by the parties or as may
be proved, unless the parties by agreement, express or implied, or by their silence,
consider the thing as equivalent to the obligation, in which case the obligation is totally
extinguished.34 However, the contention that there was payment because the Three (3)
properties delivered to private complainant have covered already the Three (3) bounced
checks cannot be sustained simply because the accused Luciano Pilarta did not raise it
as an issue at the time of the re-restructure of the outstanding obligation. If it is true
that the Three (3) properties are sufficient payments to the obligation, then, accused
Luciano Pilarta could not have issued several checks, including the Three (3) subject
checks that bounced during the loan re-structure.

In BPI vs. Spouses Royeca, G.R. No 176664 , June 21, 2008, our Supreme
Court held, In all, we find that the evidence at hand preponderates in favor of the
petitioner. The petitioners possession of the documents pertaining to the obligation
strongly buttresses its claim that the obligation has not been extinguished. The
creditors possession of the evidence of debt is proof that the debt has not been
discharged by payment.35 A promissory note in the hands of the creditor is a proof of
indebtedness rather than proof of payment.36 If it is true that the entire outstanding
obligation of the accused Luciano Pilarta was fully paid, there was no sufficient
explanation why the subject Three (3) checks remained in the possession of private
complainant Rene Daguman. These subject checks in possession of the private
complainant Rene Daguman are proof of non-payment by accused Luciano Pilarta of his
outstanding obligation. Indeed, the existence in the hands of the creditor of an
instrument of credit, is evidence that the debt is still unpaid, unless the contrary be fully
proven.37

In this case of Griffith vs. CA, 129764, March 12, 2002, the checks were
conditionally issued for arrearages on rental payments incurred by Lincoln Gerard, Inc.
The checks were signed by petitioner, the president of Lincoln Gerard. It was a
condition written on the voucher for each check that the check was not to be presented
for payment without clearance from Lincoln Gerard, to be given at a specific date.
However, Lincoln Gerard was unable to give such clearance owing to a labor strike that
paralyzed its business and resulted to the companys inability to fund its checks. Still,
Phelps Dodge deposited the checks, per a note on the voucher attached thereto that if
written approval was not received from Lincoln Gerard before May 30, 1986, the checks
would be presented for payment. The checks were dishonored and Phelps Dodge filed

31 Lopez vs. CA, G.R. No. L-33157 June 29, 1982.

322 Castan 525; 8 Manresa, 324.
33 Perez Gonzales & Alguer : 2-I Enneccerus, Kipp & Wolff 317.
348 Manresa 324; 3 Valverde 174.
35 Redmond vs. Hughes, 135 N.Y.S. 843, 151 App. Div. 99 (1912).
36 Biala vs. CA, G.R. No. 43503, October 31, 1990.
37 Toribio vs. Foz et al., G.R. No. 11039, September 13, 1916; Bantug vs. Del Rosario, 11 Phil 511; Ramos vs.

Ledesma, 12 Phil 656; Ormachea Tin-Congco vs. Trillana, 13 Phil 194.

8
criminal cases for violation of B.P. 22 against petitioner. But this filing took place only
after Phelps Dodge had collected the amount of the checks, with more than one million
pesos to spare, through notarial foreclosure and auction sale of Lincoln Gerards
properties earlier impounded by Phelps Dodge. Since there was a collection of more
than the value of the two checks in question before the filing in the trial court of the case
for violation of B.P. 22, petitioner Griffith, who was convicted, contended that he has
been wrongfully convicted and sentenced. Our Supreme Court resolved this issue by
holding that: In our view, considering the circumstances of the case, the instant
petition is meritorious. 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. Noteworthy, in
Administrative Circular No. 12-2000, this Court has expressed a policy preference for
fine as penalty in cases of B.P. 22 violations rather than imprisonment to best serve the
ends of criminal justice. 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. Note that in the two criminal
cases filed by Phelps Dodge against petitioner Griffith, the checks issued were corporate
checks that Lincoln Gerard allegedly failed to fund for a valid reason duly
communicated to the payee. Further, it bears repeating that Phelps Dodge, through a
notarial foreclosure and auction that were later on judicially declared invalid, sold
Lincoln Gerards property for cash amounting to P1,120,540 to satisfy Phelps Dodge
claim for unpaid rentals. Said property was already in Phelps Dodges custody earlier,
purportedly because a new tenant was moving into the leased premises. The obligation
of Lincoln Gerard to Phelps Dodge for said rentals was only P301,953.12. Thus, by
resorting to the remedy of foreclosure and auction sale, Phelps Dodge was able to collect
the face value of the two checks, totalling P215,442.65. In fact, it impounded items
owned by Lincoln Gerard valued far in excess of the debt or the checks. This was the
situation when, almost two years after the auction sale, petitioner was charged with two
counts of violation of B.P. 22. By that time, the civil obligation of Lincoln Gerard, Inc. to
Phelps Dodge Phils. Inc. was no longer subsisting, though respondent Court of Appeals
calls the payment thereof as involuntary. That the money value of the two checks signed
by petitioner was already collected, however, could not be ignored in appreciating the
antecedents of the two criminal charges against petitioner. Because of the invalid
foreclosure and sale, Phelps Dodge was ordered to pay or return P1,072,586.88 to
Lincoln Gerard, per decision of the Regional Trial Court of Pasig, Branch 69, which
became final after it was affirmed by the appellate court. We cannot, under these
circumstances, see how petitioners conviction and sentence could be upheld without
running afoul of basic principles of fairness and justice. For Phelps Dodge has, in our
view, already exacted its proverbial pound of flesh through foreclosure and auction sale
as its chosen remedy. While we agree with the private respondent that the gravamen of
violation of B.P. 22 is the issuance of worthless checks that are dishonored upon their
presentment for payment, we should not apply penal laws mechanically. We must find if
the application of the law is consistent with the purpose of and reason for the law.
Ratione cessat lex, et cessat lex. (When the reason for the law ceases, the law ceases.) It
is not the letter alone but the spirit of the law also that gives it life. This is especially so
in this case where a debtors criminalization would not serve the ends of justice but in
fact subvert it. The creditor having collected already more than a sufficient amount to
cover the value of the checks for payment of rentals, via auction sale, we find that
holding the debtors president to answer for a criminal offense under B.P. 22 two years
after said collection, is no longer tenable nor justified by law or equitable
considerations.

9
 For failure by the defense to show convincing proof that the Three (3) properties
in the dacion en pago are complete payment to cover the Three (3) subject checks in
these cases or that payment was made corresponding to the subject Three (3) checks in
these cases, the above-cited jurisprudence is not applicable in this case.

DISPOSITIVE PORTION

WHEREFORE, premises considered, this Court finds the accused Luciano

Pilarta guilty beyond reasonable doubt for violation of three (3) counts of Batas
Pambansa Bilang 22.

Accused Luciano Pilarta is hereby sentenced to suffer the penalty of six (6)
months imprisonment and to pay a fine of Two Hundred Thousand Pesos
(P 200,000.00) with subsidiary imprisonment in case of insolvency for each count of
Batas Pambansa Bilang 22. Likewise, he is hereby ordered to indemnify private
complainant Rene Daguman to be as follows:

(1) In Criminal Case No. 00-90, to pay the amount of Three Hundred Sixty Five
Thousand Pesos (P365, 000.00) representing the value of the subject check with legal
interest of twelve percent (12%) per annum to be computed from August 26, 1999, the
date of the filing of the Information until fully paid;

(2) In Criminal Case No. 00-91 , to pay the amount of Three Hundred Sixty Thousand
Pesos (P360, 000.00) representing the value of the subject check with legal interest of
twelve percent (12%) per annum to be computed from August 26, 1999, the date of
the filing of the Information until fully paid; and

(3) In Criminal Case No. 00-92 , to pay the amount of Two Hundred Fifty Thousand
Pesos (P250, 000.00) representing the value of the subject check with legal interest of
twelve percent (12%) per annum to be computed from August 26, 1999, the date of
the filing of the Information until fully paid.

Costs against the accused.

SO ORDERED.

Pasay City, June 2, 2010.

ELIZA B. YU
Judge

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 Copy furnished:
Atty. Alan Leynes
Private Prosecutor
Unit C, Miracle Townhouse II,
7467 Santillan St., Makati City

Atty. Angelina Domingo Mauricio

Counsel for the Accused
MAURICIO LAW OFFICE
18 D Mahiyain cor. Mapagkawanggawa St.,
Teachers Village, East Diliman, Quezon City

Rene Daguman
Private Complainant
No. 379 Matienza St.,
San Miguel, Manila

Luciano Pilarta
Accused
P. Reyes St., Brgy. Paco,
Obando, Bulacan

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