GEOFFREY F. GRIFFITH vs. COURT OF APPEALS, et. al. 379 SCRA 94, March 1, !!, "# $%&., '(%)(*+%", -. Th%) %) a et%t%/" 0 #ec%)%/" / the C/(rt / Aeal)
FACTS: As the president of Lincoln Gerald Inc., Geoffrey F. Griffith Griffith issued checks payable to Phelps od!e Phils. Inc. "hen the co#pany incurred rental arreara!es.
These checks are not to be presented "ithout prior appro$al fro# this Corporation to be !i$en not later than %ay %ay &', ()*+. Also "ritten on the face of the $oucher "as the follo"in! note:
o"e$er, if "ritten appro$al of Lincoln Gerard, Inc. is not !i$en before %ay &', ()*+, Phelps od!e, Phils. shall present the che-ues for pay#ent. This is final and irre$ocable./0 1n %ay 2), ()*+, Griffith "rote Phelps od!e not to present the said checks for pay#ent on %ay &', ()*+ because they could not be funded due to a four3"eek labor strike that had earlier paraly4ed the business operations of Lincoln Gerard.+0 Pre$iously Pre$iously,, in a letter letter dated %ay 2', ()*+, Phelps od!e, throu!h its treasurer treasurer 5icardo 5. %anaran!, ad$ised Lincoln Gerard that it "as transferrin! the contents of the Lincoln Gerard "arehouse in the leased pre#ises since a ne" tenant "as #o$in! in. Phelps od!e told Lincoln Gerard that its properties "ould be placed in our co#pound and under our custody. custody.60 1n 7une 2, ()*+,*0 "hen no further co##unication "as recei$ed fro# Lincoln Gerard, Phelps od!e presented the t"o checks for pay#ent but these "ere dishonored by the bank for ha$in! been dra"n a!ainst insufficient funds. Three days later, Phelps od!e sent a de#and letter to Lincoln Gerard, apprisin! Griffith of the dishonor of the checks and askin! hi# to fund the# "ithin the ti#e prescribed by la".)0 Lincoln Gerard still failed to fund the checks but Griffith sent a letter to Phelps od!e, e8plainin! Lincolns inability to fund said ch ecks due to the strike.('0Subse-uently, on 7une (), ()*+, Phelps o d!e notified Lincoln Gerard that its properties "ould be foreclosed. Phelps od!e "ent ahead "ith the foreclosure and auction sale on 7une 2', ()*+,((0 despite Lincoln Gerards protest.(20 1n %ay (', ()**, t"o infor#ations for $iolation of 9.P. 22 docketed as Cri#inal Cases os. 6&2+' and 6&2+( "ere filed a!ainst petitioner before the 5e!ional Trial Court. The #otion for reconsideration filed by Griffith "as dis#issed, and so "ere his petition for re$ie" filed before the epart#ent of 7ustice and later on his #otion to -uash -u ash filed before the 5TC. Griffith then filed a petition for certiorari before certiorari before the Court of Appeals that "as like"ise denied.
%ean"hile, on o$e#ber +, ()*6, Lincoln Gerard lod!ed a co#plaint for da#a!es docketed as Ci$il Case o. //26+ before the 5e!ional Trial Court of Pasi!, 9ranch +), a!ainst Phelps od!e and the notary public "ho conducted the auction sale.(&0 1n 7uly (), ())(, the trial court ruled that the foreclosure and auction sale "ere in$alid, but applied the proceeds thereof to Lincoln Gerards arreara!es. It also ordered Phelps od!e to return to Lincoln Gerard the P(,'62,/*+.** as e8cess.(;0 The court stated:
The e$idence sho"s that defendant corporation had already recei$ed the a#ount of P2/;,+'' as a result of the in$alid auction sale. The latter a#ount should be applied to the rental in arrears o"ed by the plaintiff corporation to the defendant corporation
urisdiction of the %eTC. 1n 7uly 2/, ())/, the %eTC, in Cri#inal Cases os. ;(+6* and ;(+6 ), found Griffith !uilty on both counts for $iolation of 9.P. 22,(60 and sentenced hi# to suffer i#prison#ent for si8 #onths on each count, to be ser$ed consecuti$ely. Thus:
?@5@F15@, pre#ises considered, this court finds the accused G@1FF5@ F. G5IFFIT, GBILT 1F I1LATI1 of Section ( of 9atas Pa#bansa 9l!. 22, other"ise kno"n as the 9ouncin! Checks La" on t"o counts. The accused is therefore hereby sentence
Petitioner then appealed his con$iction to the Court of Appeals. In a consolidated decision dated %arch (;, ())6, the appellate court ruled:
?@5@F15@, absent any pri#a facie #erit in it, the Petition for 5e$ie" under consideration is hereby @I@ B@ C1B5S@. Costs a!ainst petitioner. S1 15@5@. ()0 Petitioner #o$ed for a reconsideration of said decision but this "as denied by the appellate court in a resolution dated 7uly *, ())6.2'0 ence, this petition seekin! re$ersal of the CA decision and resolution on the cri#inal cases, anch ored on the follo"in! !rounds: I. T@ C1B5T 1F APP@ALS @CISI1 AT@ (; %A5C ())6 A ITS 5@S1LBTI1 AT@ * 7BL ())6 A5@ C1T5A5 T1 T@ 5BLIG I %AG1 . C1B5T 1F APP@ALS, ?@5@ TIS 115A9L@ C1B5T LAI 1? T@ 1CT5I@ TAT A C1ICTI1 B@5 9.P. 22 CA1T 9@ 9AS@ 1 A I@5S@ APPLICATI1 1F T@ @L@%@T 1F E1?L@G@. II. T@ C1B5T 1F APP@ALS @CISI1 AT@ (; %A5C ())6 A ITS 5@S1LBT1 AT@ * 7BL ())6 5@SBLT I A BC1STITBTI1AL APPLICATI1 1F T@ P51ISI1S 1F 9.P. 22. III. T@ C1B5T 1F APP@ALS @CISI1 AT@ (; %A5C ())6 A ITS 5@S1LBTI1 AT@ * 7BL ())6 STATIG TAT PA%@T T51BG 1TA5IAL F15@CL1SB5@ 9@F15@ T@ FILIG 1F T@ C5I%IAL IF15%ATI1S B@5 9.P. 22 1@S 1T A9AT@ C5I%IAL LIA9ILIT, A5@ @551@1BS A 5@SBLT I T@ IIBIT1BS IT@5P5@TATI1 1F T@ LA?. I. T@ C1B5T 1F APP@ALS @CISI1 AT@ (; %A5C ())6 A ITS 5@S1LBTI1 AT@ * 7BL ())6 A5@ IC1SIST@T ?IT ITS 1? FIIGS A C1CLBSI1S I A 5@LAT@ CAS@
. T@ C1B5T 1F APP@ALS @CISI1 AT@ (; %A5C ())6 A ITS 5@S1LBTI1 AT@ * 7BL ())6 ?IC 5@LI@ 1 T@ 5BLIG I T@ CAS@ 1F LI% . C1B5T 1F APP@ALS 1 @B@ T1 7BSTIF ITS FIIG TAT P@TITI1@5 AS C1%%ITT@ T?1 C1BTS 1F I1LATI1 1F 9.P. 22, A5@ C1T5A T1 LA? A 7B5ISP5B@C@. 2(0 Petitioner points out that he co##unicated to Phelps od!e throu!h a note on the $oucher attached to the checks, the fact that said checks "ere unfunded at the ti#e of their issuance. Petitioner contends that this !ood faith on his part ne!ates any intent to put "orthless checks in circulation, "hich is "hat 9.P. 22 seeks to penali4e. %oreo$er, as re!ards the second check that "as postdated, petitioner contends that there could not be any $iolation of 9.P. 22 "ith said check since the ele#ent of kno"led!e of insufficiency of funds is absent. Petitioner could not ha$e kno"n at the ti#e of its issuance that the postdated check "ould be dishonored "hen presented for pay#ent later on.
Petitioner ar!ues that his con$iction in this case "ould be $iolati$e of the constitutional proscription a!ainst i#prison#ent for failure to pay a debt, since petitioner "ould be punished not for kno"in!ly issuin! an unfunded check but for failin! to pay an obli!ation "hen it fell due. Petitioner also asserts that the pay#ent #ade by Lincoln Gerard throu!h the proceeds of the notarial foreclosure and auction sale e8tin!uished his cri#inal liability. 1n the other hand, pri$ate respondent contends that all the ele#ents that co#prise $iolation of 9.P. 22 are present in this case. %oreo$er, the pay#ent in this case "as #ade beyond the fi$e3 day period, counted fro# notice of dishonor, pro$ided by the la" and thus did not e8tin!uish petitioners cri#inal liability. For the State, the Solicitor General contends that Lincoln Gerard assured Phelps od!e, throu!h the note on the $oucher attached to the checks, that said checks "ould be co$ered "ith sufficient funds by %ay &', ())+, "hich assurance "as final and irre$ocable.220 The 1SG also ar!ues that 9.P. 22 does not distin!uish bet"een a check that is postdated and one that is not, for as lon! as the dra"er issued the checks "ith kno"led!e of his insufficient funds and the check is dishonored upon present#ent. There is no unconstitutional punish#ent for failure to pay a debt in this case, since accordin! to the 1SG, "hat 9.P. 22 penali4es is the act of #akin! and issuin! a "orthless check that is dishonored upon presentation for pay#ent, n ot the failure to pay a debt.2&0 The 1SG asserts that the supposed pay#ent that resulted fro# Phelps od!es notarial foreclosure of Lincoln Gerards properties could not bar prosecution under 9.P. 22, since da#a!e or pre>udice to the payee is i##aterial. %oreo$er, said pay#ent "as #ade only after the $iolation of the la" had already been co##itted. It "as #ade beyond the fi$e3day period, fro# notice of dishonor of the checks, pro$ided under 9.P. 22. The principal issue in this case is "hether petitioner Geoffrey F. Griffith, president of Lincoln Gerard, Inc., has been erroneously con$icted and sentenced for $iolation of the 9ouncin! Checks La" <9atas Pa#bansa 9l!. 22=. is con$iction on t"o counts and sentence of si8 #onths i#prison#ent for each count by the respondent %TC 7ud!e %anuel illa#ayor "as upheld by respondent 5TC 7ud!e @d"in illasor and affir#ed by the respondent Court of Appeals. 9ut pri$ate respondent appears to ha$e collected #ore than the $alue of the t"o checks in -uestion before the filin! in the trial court of the case for $iolation of 9.P. 22. ence, petitioner insists he has been "ron!fully con$icted and sentenced. To resol$e this issue, "e #ust deter#ine "hether the alle!ed pay#ent of the a#ount of the checks t"o years prior to the filin! of the infor#ation for $iolation of 9.P. 22 >ustifies his ac-uittal. ?hether there is an unconstitutional application of the pro$isions of 9.P. 22 in this case, ho"e$er, does not appear to us an appropriate issue for consideration no". A purported constitutional issue raised by petitioner #ay only be resol$ed if essential to the decision of a case and contro$ersy. 9ut here "e find that this case can be resol$ed on other !rounds. ?ell to re#e#ber, courts do not pass upon constitutional -uestions that are not the $ery lis mota of a case.2;0 In the present case, the checks "ere conditionally issued for arreara!es on rental pay#ents incurred by Lincoln Gerard, Inc. The checks "ere si!ned by petitioner, the president of Lincoln Gerard. It "as a condition "ritten on the $oucher for each check that the check "as not to be
presented for pay#ent "ithout clearance fro# Lincoln Gerard, to be !i$en at a specific date. o"e$er, Lincoln Gerard "as unable to !i$e such clearance o"in! to a labor strike that paraly4ed its business and resulted to the co#panys inability to fund its checks. Still, Phelps od!e deposited the checks, per a note on the $oucher attached thereto that if "ritten appro$al "as not recei$ed fro# Lincoln Gerard before %ay &', ()*+, the checks "ould be presented for pay#ent. This is final and irre$ocable, accordin! to the note that "as "ritten actually by an officer of Phelps od!e, not by petitioner. The checks "ere dishonored and Phelps od!e filed cri#inal cases for $iolation of 9.P. 22 a!ainst petitioner. 9ut this filin! took place only after Phelps od!e had collected the a#ount of the checks, "ith #ore than one #illion pesos to spare, throu!h notarial foreclosure and auction sale of Lincoln Gerards properties earlier i#pounded by Phelps od!e. In our $ie", considerin! the circu#stances of the case, the instant petition is #eritorious. The 9ouncin! Checks La" "as de$ised to safe!uard the interest of the bankin! syste# and the le!iti#ate public checkin! account user .2/0 It "as not desi!ned to fa$or or encoura!e those "ho seek to enrich the#sel$es throu!h #anipulation and circu#$ention of the purpose of the la".2+0 ote"orthy, in Ad#inistrati$e Circular o. (232''', this Court has e8pressed a policy preference for fine as penalty in cases of 9.P. 22 $iolations rather than i#prison#ent to best ser$e the ends of cri#inal >ustice. %oreo$er, "hile the philosophy underlyin! our penal syste# leans to"ard the classical school that i#poses penalties for retribution,260 such retribution should be ai#ed at actual and potential "ron!doers.2*0 ote that in the t"o cri#inal cases filed by Phelps od!e a!ainst petitioner, the checks issued "ere corporate checks that Lincoln Gerard alle!edly failed to fund for a $alid reason duly co##unicated to the payee. Further, it bears repeatin! that Phelps od!e, throu!h a notarial foreclosure and auction that "ere later on >udicially declared in$alid, sold Lincoln Gerards property for cash a#ountin! to P(,(2',/;'2)0 to satisfy Phelps od!e clai# for unpaid rentals. Said property "as already in Phelps od!es custody earlier, purportedly because a ne" tenant "as #o$in! into the leased pre#ises. The obli!ation of Lincoln Gerard to Phelps od!e for said rentals "as only P&'(,)/&.(2.&'0 Thus, by resortin! to the re#edy of foreclosure and auction sale, Phelps od!e "as able to collect the face $alue of the t"o checks, totallin! P2(/,;;2.+/. In fact, it i#pounded ite#s o"ned by Lincoln Gerard $alued far in e8cess of the debt or the checks. This "as the situation "hen, al#ost t"o years after the auction sale, petitioner "as char!ed "ith t"o counts of $iolation of 9.P. 22. 9y that ti#e, the ci$il obli!ation of Lincoln Gerard, Inc. to Phelps od!e Phils. Inc. "as no lon!er subsistin!, thou!h respondent Court of Appeals calls the pay#ent thereof as in$oluntary.&(0 That the #oney $alue of the t"o checks si!ned by petitioner "as already collected, ho"e$er, could not be i!nored in appreciatin! the antecedents of the t"o cri#inal char!es a!ainst petitioner. 9ecause of the in$alid foreclosure and sale, Phelps od!e "as ordered to pay or return P(,'62,/*+.** to Lincoln Gerard, per decision of the 5e!ional Trial Court of Pasi!, 9ranch +), "hich beca#e final after it "as affir#ed by the appellate court. ?e cannot, under these circu#stances, see ho" petitioners con$iction and sentence could be upheld "ithout runnin! afoul of basic principles of fairness and >ustice. For Phelps od!e has, in our $ie", already e8acted its pro$erbial pound of flesh throu!h foreclosure and auction sale as its chosen re#edy. That is "hy "e find -uite instructi$e the reasonin! of the Court of Appeals earlier rendered in decidin! the petition for Certiorari and In>unction, Griffith v. Judge Milagros Caguioa, CA3
G.5. SP o. 2')*', in connection "ith the petitioners #otion to -uash the char!es herein before they "ere tried on the #erits.&20 Said 7ustice C. Francisco "ith the concurrence of 7ustices 5eynato S. Puno and Asaali S. Isnani:
?e are persuaded that the defense has !ood and solid defenses a!ainst both char!es in Cri#inal Cases os. 6&2+'3+(. ?e can e$en say that the decision rendered in 9ranch +) in Ci$il Case o. //26+, "ell3"ritten as it is, had put up a for#idable obstacle to any con$iction in the cri#inal cases "ith the findin!s therein #ade that the sale by public auction of the properties of Lincoln "as ille!al and had no >ustification under the facts that also the proceeds reali4ed in the said sale should be deducted fro# the account of Lincoln "ith Phelps, so that only P;6,)/&.(2 #ay only be the rentals in arrears "hich Lincoln should pay, co#puted at P&'(,)/&.(2 less P2/;,+''.'' that out of "hat had happened in the case as the trial court had resol$ed in its decision, Phelps is duty bound to pay Lincoln in da#a!es P(,'62,/*+.** fro# "hich had been deducted the a#ount ofP;6,)/&.(2 representin! the balance of the rental in arreara!es and that conse-uently, there is absolutely no consideration re#ainin! in support of the t"o <2= sub>ect checks. &&0 Petitioners efforts to -uash in the Court of Appeals the char!es a!ainst hi# "as frustrated on procedural !rounds because, accordin! to 7ustice Francisco, appeal and not certiorari "as the proper re#edy.&;0 In a petition for certiorari, only issues of >urisdiction includin! !ra$e abuse of discretion are considered, but an appeal in a cri#inal case opens the entire case for re$ie". ?hile "e a!ree "ith the pri$ate respondent that the !ra$a#en of $iolation of 9.P. 22 is the issuance of "orthless checks that are dishonored upon their present#ent for pay#ent, "e should not apply penal la"s #echanically.&/0 ?e #ust find if the application of the la" is consistent "ith the purpose of and reason for the la". Ratione cessat lex, et cessat lex. ustice but in fact sub$ert it. The creditor ha$in! collected already #ore than a sufficient a#ount to co$er the $alue of the checks for pay#ent of rentals, via auction sale, "e find that holdin! the debtors president to ans"er for a cri#inal offense under 9.P. 22 t"o years after said collection, is no lon!er tenable nor >ustified by la" or e-uitable considerations. In su#, considerin! that the #oney $alue of the t"o checks issued by petitioner has already been effecti$ely paid t"o years before the infor#ations a!ainst hi# "ere filed, "e find #erit in this petition. ?e hold that petitioner herein could not be $alidly and >ustly con$icted or sentenced for $iolation of 9.P. 22. ?hether the nu#ber of checks issued deter#ines the nu#ber of $iolations of 9.P. 22, or "hether there should be a distinction bet"een postdated and other kinds of checks need no lon!er detain us for bein! i##aterial no" to the deter#ination of the issue of !uilt or innocence of petitioner. 2HEREFORE, the petition is hereby G5AT@. The decision of the Court of Appeals in CA3G.5. o. ()+2( dated %arch (;, ())6, and its resolution dated 7uly *, ())6, are
5@@5S@ and S@T ASI@. Petitioner Geoffrey F. Griffith is ACBITT@ of the char!es of $iolation of 9.P. 22 in Cri#inal Cases os. ;(+6* and ;(+6). Costs de officio. SO OR$ERE$.
Bellosillo, (Chairman), Mendoza, Buena, and De eon, Jr., JJ., concur.
