Oriel Magno vs. CA
There is no violation of BP22
Date of Promulgation: 26 June 1992
Nature: Appeal by certiorari to review the
decision of Court of Appeals
Facts:
 Petitioner was in process of putting
up a car repair shop sometime in
April 1983, but he did not have
complete equipment that could
make his venture workable. He
lacked funds to purchase
necessary equipment.
 He approached Corazon Teng, VP
of Mancor Industries, a distributor
of equipment who referred him to
LS Finance
 A lease/purchase agreement
specifying a warranty deposit
(29,790) of 30% for Magno to put
up. Claimino lg he could not afford
it, Magno asked LS Finance to find
a 3rd party lender to lend him the
amount. LENDER = TENG, specified
a 3% interest on short term loan.
 Magno issued postdated checks to
LS Finance, who gave it to Teng.
When check matured, Magno said
he could not cover it and he was
not banking with Pacific Bank
anymore. In lieu, he issued 6 check
- first 2 checks honored, last 4 in
question. When business failed,
Magno could no longer pay rent to
LS Finance, LS pulled out
equipment. Magno promised to pay
the rest of the warranty deposit,
but the remaining checks were no
longer honored due to “closed
account”. He was convicted of four
counts of violating BP 22. CA
affirmed this decision because
issuing a bouncing check is a crime
ISSUE:
(1) WON Magno is guilty of violating
B.P. 22 upon review
(2) WON post-dated checks were
drawn or issued "to apply on
account or for value", as required
under Section 1 of B.P. Blg, 22.
Ruling: Decision REVERSED,
accused-petitioner, ACQUITTED
Held:
(1) NO.
by issuance of check to cover
warranty deposit given by
complainant to enable drawer to
import equipment financed on
lease-purchase agreement. Since
transaction did not become
purchase when Magno failed to pay
rent and LS Finance pulled out
equipment. No need for Magno to
continue paying warranty deposit
(warranty deposit is for purchase of
equipment).
(2) NO violation is committed when
complainant told drawer that he
has insufficient funds in the bank.
The 4 checks were issued to
collateralize “rent”/ an
accommodation and not for
purchase equipment/receipt of an
actual “account or credit for
value”.
Ratio: RTC and CA’s decision merely
relied on the law, without looking into
the real nature of warranty deposit.
Acquittal based on action not
constituting a wrong sought to be
punished in offense charged (not
because of lack of intent).
Protective theory – “affirms that the
primary function of punishment is the
protective of society against actual and
potential wrongdoers”
Ex. Actuations of Mrs. Carolina Teng
amount to that of potential wrongdoers
whose operations should also be clipped in
order that the unwary public will not fall
prey to vicious transactions