ROBERTO S. BENEDICTO and HECTOR T.

RIVERA, petitioners,
vs.
THE COURT OF APPEALS, HON. GUILLERMO L. LOJA, SR., PRESIDING JUDGE,
REGIONAL TRIAL COURT OF MANILA, BRANCH 26, and PEOPLE OF THE
PHILIPPINES, respondents.

Assailed in this petition is the consolidated decision rendered on May 23, 1996, by the Court of
Appeals in CA-G.R. SP No. 35928 and CA-G.R. SP No. 35719. CA-G.R. SP No. 35928 had
affirmed the order dated September 6, 1994, of the Regional Trial Court, Manila, Branch 26,
insofar as it denied petitioners’ respective Motions to Quash the Informations in twenty-five (25)
criminal cases for violation of Central Bank Circular No. 960. Therein included were
informations involving: (a) consolidated Criminal Cases Nos. 91-101879 to 91-101883 filed
against Mrs. Imelda R. Marcos, Roberto S. Benedicto, and Hector T. Rivera; (b) consolidated
Criminal Cases Nos. 91-101884 to 91-101892 filed against Mrs. Marcos and Benedicto; and (c)
Criminal Cases Nos. 92-101959 to 92-101969 also against Mrs. Marcos and Benedicto. Note,
however, that the Court of Appeals already dismissed Criminal Case No. 91-101884.

The factual antecedents of the instant petition are as follows:

On December 27, 1991, Mrs. Imelda Marcos and Messrs. Benedicto and Rivera were indicted for
violation of Section 10 of Circular No. 9601 relation to Section 342 of the Central Bank Act
(Republic Act No. 265, as amended) in five Informations filed with the Regional Trial Court of
Manila. Docketed as Criminal Cases Nos. 91-101879 to 91-101883, the charge sheets alleged
that the trio failed to submit reports of their foreign exchange earnings from abroad and/or failed
to register with the Foreign Exchange Department of the Central Bank within the period
mandated by Circular No. 960. Said Circular prohibited natural and juridical persons from
maintaining foreign exchange accounts abroad without prior authorization from the Central
Bank.3 It also required all residents of the Philippines who habitually earned or received foreign
currencies from invisibles, either locally or abroad, to report such earnings or receipts to the
Central Bank. Violations of the Circular were punishable as a criminal offense under Section 34
of the Central Bank Act.

That same day, nine additional Informations charging Mrs. Marcos and Benedicto with the same
offense, but involving different accounts, were filed with the Manila RTC, which docketed these
as Criminal Cases Nos. 91-101884 to 91-101892. The accusatory portion of the charge sheet in
Criminal Case No. 91-101888 reads:

That from September 1, 1983 up to 1987, both dates inclusive, and for sometime
thereafter, both accused, conspiring and confederating with each other and with the late
President Ferdinand E. Marcos, all residents of Manila, Philippines, and within the
jurisdiction of this Honorable Court, did then and there wilfully, unlawfully and
feloniously fail to submit reports in the prescribed form and/or register with the Foreign
Exchange Department of the Central Bank within 90 days from October 21, 1983 as
required of them being residents habitually/customarily earning, acquiring or receiving
foreign exchange from whatever source or from invisibles locally or from abroad, despite
the fact they actually earned interests regularly every six (6) months for the first two
 years and then quarterly thereafter for their investment of $50-million, later reduced to
$25-million in December 1985, in Philippine-issued dollar denominated treasury notes
with floating rates and in bearer form, in the name of Bank Hofmann, AG, Zuring,
Switzerland, for the benefit of Avertina Foundation, their front organization established
for economic advancement purposes with secret foreign exchange account Category
(Rubric) C.A.R. No. 211925-02 in Swiss Credit Bank (also known as SKA) in Zurich,
Switzerland, which earned, acquired or received for the accused Imelda Romualdez
Marcos and her late husband an interest of $2,267,892 as of December 16, 1985 which
was remitted to Bank Hofmann, AG, through Citibank, New York, United States of
America, for the credit of said Avertina account on December 19, 1985, aside from the
redemption of $25 million (one-half of the original $50-M) as of December 16, 1985 and
outwardly remitted from the Philippines in the amounts of $7,495,297.49 and
$17,489,062.50 on December 18, 1985 for further investment outside the Philippine
without first complying with the Central Bank reporting/registering
requirements.1âwphi1.nêt

CONTRARY TO LAW.4

The other charge sheets were similarly worded except the days of the commission of the
offenses, the name(s) of the alleged dummy or dummies, the amounts in the foreign exchange
accounts maintained, and the names of the foreign banks where such accounts were held by the
accused.

On January 3, 1992, eleven more Informations accusing Mrs. Marcos and Benedicto of the same
offense, again in relation to different accounts, were filed with the same court, docketed as
Criminal Cases Nos. 92-101959 to 92-101969. The Informations were similarly worded as the
earlier indictments, save for the details as to the dates of the violations of Circular No. 960, the
identities of the dummies used, the balances and sources of the earnings, and the names of the
foreign banks where these accounts were maintained.

All of the aforementioned criminal cases were consolidated before Branch 26 of the said trial
court.

On the same day that Criminal Cases Nos. 92-101959 to 92-101969 were filed, the Central Bank
issued Circular No. 13185 which revised the rules governing non-trade foreign exchange
transactions. It took effect on January 20, 1992.

On August 24, 1992, the Central Bank, pursuant to the government’s policy of further
liberalizing foreign exchange transactions, came out with Circular No. 1356, 6 which amended
Circular No. 1318. Circular No. 1353 deleted the requirement of prior Central Bank approval for
foreign exchange-funded expenditures obtained from the banking system.

Both of the aforementioned circulars, however, contained a saving clause, excepting from their
coverage pending criminal actions involving violations of Circular No. 960 and, in the case of
Circular No. 1353, violations of both Circular No. 960 and Circular No. 1318.
On September 19, 1993, the government allowed petitioners Benedicto and Rivera to return to
the Philippines, on condition that they face the various criminal charges instituted against them,
including the dollar-salting cases. Petitioners posted bail in the latter cases.

On February 28, 1994, petitioners Benedicto and Rivera were arraigned. Both pleaded not guilty
to the charges of violating Central Bank Circular No. 960. Mrs. Marcos had earlier entered a
similar plea during her arraignment for the same offense on February 12, 1992.

On August 11, 1994, petitioners moved to quash all the Informations filed against them in
Criminal Cases Nos. 91-101879 to 91-101883; 91-101884 to 91-101892, and 91-101959 to 91-
101969. Their motion was grounded on lack of jurisdiction, forum shopping, extinction of
criminal liability with the repeal of Circular No. 960, prescription, exemption from the Central
Bank’s reporting requirement, and the grant of absolute immunity as a result of a compromise
agreement entered into with the government.

On September 6, 1994, the trial court denied petitioners’ motion. A similar motion filed on May
23, 1994 by Mrs. Marcos seeking to dismiss the dollar-salting cases against her due to the repeal
of Circular No. 960 had earlier been denied by the trial court in its order dated June 9, 1994.
Petitioners then filed a motion for reconsideration, but the trial court likewise denied this motion
on October 18, 1994.

On November 21, 1994, petitioners moved for leave to file a second motion for reconsideration.
The trial court, in its order of November 23, 1994, denied petitioners’ motion and set the
consolidated cases for trial on January 5, 1995.

Two separate petitions for certiorari and prohibition, with similar prayers for temporary
restraining orders and/or writs of preliminary injunction, docketed as CA-G.R. SP No. 35719 and
CA-G.R. SP No. 35928, were respectively filed by Mrs. Marcos and petitioners with the Court of
Appeals. Finding that both cases involved violations of Central Bank Circular No. 960, the
appellate court consolidated the two cases.

On May 23, 1996, the Court of Appeals disposed of the consolidated cases as follows:

WHEREFORE, finding no grave abuse of discretion on the part of respondent Judge in

denying petitioners’ respective Motions to Quash, except that with respect to Criminal
Case No. 91-101884, the instant petitions are hereby DISMISSED for lack of merit. The
assailed September 6, 1994 Order, in so far as it denied the Motion to Quash Criminal
Case No. 91-101884 is hereby nullified and set aside, and said case is hereby dismissed.
Costs against petitioners.

SO ORDERED.7

Dissatisfied with the said decision of the court a quo, except with respect to the portion ordering
the dismissal of Criminal Case No. 91-101884, petitioners filed the instant petition, attributing
the following errors to the appellate court:
 THAT THE COURT ERRED IN NOT FINDING THAT THE
INFORMATIONS/CASES FILED AGAINST PETITIONERS-APPELLANTS ARE
QUASHABLE BASED ON THE FOLLOWING GROUNDS:

(A) LACK OF JURISDICTION/FORUM SHOPPING/NO VALID

PRELIMINARY INVESTIGATION

(B) EXTINCTION OF CRIMINAL LIABILITY

1) REPEAL OF CB CIRCULAR NO. 960 BY CB CIRCULAR NO. 153;

2) REPEAL OF R.A. 265 BY R.A. 76538

(C) PRESCRIPTION

(D) EXEMPTION FROM CB REPORTING REQUIREMENT

GRANT OF ABSOLUTE IMMUNITY.9

Simply stated, the issues for our resolution are:

(1) Did the Court of Appeals err in denying the Motion to Quash for lack of jurisdiction
on the part of the trial court, forum shopping by the prosecution, and absence of a valid
preliminary investigation?

(2) Did the repeal of Central Bank Circular No. 960 and Republic Act No. 265 by
Circular No. 1353 and Republic Act No. 7653 respectively, extinguish the criminal
liability of petitioners?

(3) Had the criminal cases in violation of Circular No. 960 already prescribed?

(4) Were petitioners exempted from the application and coverage of Circular No. 960?

(5) Were petitioners’ alleged violations of Circular No. 960 covered by the absolute
immunity granted in the Compromise Agreement of November 3, 1990?

On the first issue, petitioners assail the jurisdiction of the Regional Trial Court. They aver that
the dollar-salting charges filed against them were violations of the Anti-Graft Law or Republic
Act No. 3019, and the Sandiganbayan has original and exclusive jurisdiction over their cases.

Settled is the rule that the jurisdiction of a court to try a criminal case is determined by the law in
force at the time the action is instituted. 10 The 25 cases were filed in 1991-92. The applicable law
on jurisdiction then was Presidential Decree 1601.11 Under P.D. No. 1606, offenses punishable
by imprisonment of not more than six years fall within the jurisdiction of the regular trial courts,
not the Sandiganbayan.12
In the instant case, all the Informations are for violations of Circular No. 960 in relation to
Section 34 of the Central Bank Act and not, as petitioners insist, for transgressions of Republic
Act No. 3019. Pursuant to Section 34 of Republic Act No. 265, violations of Circular No. 960
are punishable by imprisonment of not more than five years and a fine of not more than
P20,000.00. Since under P.D. No. 1606 the Sandiganbayan has no jurisdiction to try criminal
cases where the imposable penalty is less than six years of imprisonment, the cases against
petitioners for violations of Circular No. 960 are, therefore cognizable by the trial court. No error
may thus be charged to the Court of Appeals when it held that the RTC of Manila had
jurisdiction to hear and try the dollar-salting cases.

Still on the first issue, petitioners next contend that the filing of the cases for violations of
Circular No. 960 before the RTC of Manila Constitutes forum shopping. Petitioners argue that
the prosecution, in an attempt to seek a favorable verdict from more than one tribunal, filed
separate cases involving virtually the same offenses before the regular trial courts and the
Sandiganbayan. They fault the prosecution with splitting the cases. Petitioners maintain that
while the RTC cases refer only to the failure to report interest earnings on Treasury Notes, the
Sandiganbayan cases seek to penalize the act of receiving the same interest earnings on Treasury
Notes in violation of the Anti-Graft Law’s provisions on prohibited transactions. Petitioners aver
that the violation of Circular No. 960 is but an element of the offense of prohibited transactions
punished under Republic Act No. 3019 and should, thus, be deemed absorbed by the prohibited
transactions cases pending before the Sandiganbayan.

For the charge of forum shopping to prosper, there must exist between an action pending in one
court and another action pending in one court and another action before another court: (a)
identity of parties, or at least such parties as represent the same interests in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and
(c) the identity of the two preceding particulars is such that any judgment rendered in the other
action will, regardless of which party is successful, amount to res judicata in the action under
consideration.13 Here, we find that the single act of receiving unreported interest earnings on
Treasury Notes held abroad constitutes an offense against two or more distinct and unrelated
laws, Circular No. 960 and R.A. 3019. Said laws define distinct offenses, penalize different acts,
and can be applied independently.14 Hence, no fault lies at the prosecution’s door for having
instituted separate cases before separate tribunals involving the same subject matter.

With respect to the RTC cases, the receipt of the interest earnings violate Circular No. 960 in
relation to Republic Act No. 265 because the same was unreported to the Central Bank. The act
to be penalized here is the failure to report the interest earnings from the foreign exchange
accounts to the proper authority. As to the anti-graft cases before the Sandiganbayan involving
the same interest earnings from the same foreign exchange accounts, the receipt of the interest
earnings transgresses Republic Act No. 3019 because the act of receiving such interest is a
prohibited transaction prejudicial to the government. What the State seeks to punish in these anti-
graft cases is the prohibited receipt of the interest earnings. In sum, there is no identity of
offenses charged, and prosecution under one law is not an obstacle to a prosecution under the
other law. There is no forum shopping.
Finally, on the first issue, petitioners contend that the preliminary investigation by the
Department of Justice was invalid and in violation of their rights to due process. Petitioners
argue that government’s ban on their travel effectively prevented them from returning home and
personally appearing at the preliminary investigation. Benedicto and Rivera further point out that
the joint preliminary investigation by the Department of Justice, resulted to the charges in one set
of cases before the Sandiganbayan for violations of Republic Act No. 3019 and another set
before the RTC for violation of Circular No. 960.

Preliminary investigation is not part of the due process guaranteed by the Constitution. 15 It is an
inquiry to determine whether there is sufficient ground to engender a well-founded belief that a
crime has been committed and the respondent is probably guilty thereof. 16 Instead, the right to a
preliminary investigation is personal. It is afforded to the accused by statute, and can be waived,
either expressly or by implication.17 The waiver extends to any irregularity in the preliminary
investigation, where one was conducted.

The petition in the present case contains the following admissions:

1. Allowed to return to the Philippines on September 19, 1993 … on the condition that he
face the criminal charges pending in courts, petitioner-appellant Benedicto, joined by his
co-petitioner Rivera, lost no time in attending to the pending criminal charges by posting
bail in the above-mentioned cases.

2. Not having been afforded a real opportunity of attending the preliminary investigation
because of their forced absence from the Philippines then, petitioners-appellants invoked
their right to due process thru motions for preliminary investigation … Upon denial of
their demands for preliminary investigation, the petitioners intended to elevate the matter
to the Honorable Court of Appeals and actually caused the filing of a petition for
certiorari/prohibition sometime before their arraignment but immediately caused the
withdrawal thereof … in view of the prosecution’s willingness to go to pre-trial wherein
petitioner would be allowed access to the records of preliminary investigation which they
could use for purposes of filing a motion to quash if warranted.

3. Thus, instead of remanding the Informations to the Department of Justice …

respondent Judge set the case for pre-trial in order to afford all the accused access to the
records of prosecution…

xxx

5. On the basis of disclosures at the pre-trial, the petitioners-appellants Benedicto and

Rivera moved for the quashing of the informations/cases…18

The foregoing admissions lead us to conclude that petitioners have expressly waived their right
to question any supposed irregularity in the preliminary investigation or to ask for a new
preliminary investigation. Petitioners, in the above excerpts from this petition, admit posting bail
immediately following their return to the country, entered their respective pleas to the charges,
and filed various motions and pleadings. By so doing, without simultaneously demanding a
proper preliminary investigation, they have waived any and all irregularities in the conduct of a
preliminary investigation.19 The trial court did not err in denying the motion to quash the
informations on the ground of want of or improperly conducted preliminary investigation. The
absence of a preliminary investigation is not a ground to quash the information.20

On the second issue, petitioners contend that they are being prosecuted for acts punishable under
laws that have already been repealed. They point to the express repeal of Central Bank Circular
No. 960 by Circular Nos. 1318 and 1353 as well as the express repeal of Republic Act No. 265
by Republic Act No. 7653. Petitioners, relying on Article 22 of the Revised Penal Code, 21
contend that repeal has the effect of extinguishing the right to prosecute or punish the offense
committed under the old laws.22

As a rule, an absolute repeal of a penal law has the effect of depriving a court of its authority to
punish a person charged with violation of the old law prior to its repeal. 23 This is because an
unqualified repeal of a penal law constitutes a legislative act of rendering legal what had been
previously declared as illegal, such that the offense no longer exists and it is as if the person who
committed it never did so. There are, however, exceptions to the rule. One is the inclusion of a
saving clause in the repealing statute that provides that the repeal shall have no effect on pending
actions.24 Another exception is where the repealing act reenacts the former statute and punishes
the act previously penalized under the old law. In such instance, the act committed before the
reenactment continues to be an offense in the statute books and pending cases are not affected,
regardless of whether the new penalty to be imposed is more favorable to the accused.25

In the instant case, it must be noted that despite the repeal of Circular No. 960, Circular No. 1353
retained the same reportorial requirement for residents receiving earnings or profits from non-
trade foreign exchange transactions.26 Second, even the most cursory glance at the repealing
circulars, Circular Nos. 1318 and 1353 shows that both contain a saving clause, expressly
providing that the repeal of Circular No. 960 shall have no effect on pending actions for violation
of the latter Circular.27 A saving clause operates to except from the effect of the repealing law
what would otherwise be lost under the new law. 28 In the present case, the respective saving
clauses of Circular Nos. 1318 and 1353 clearly manifest the intent to reserve the right of the
State to prosecute and punish offenses for violations of the repealed Circular No. 960, where the
cases are either pending or under investigation.

Petitioners, however, insist that the repeal of Republic Act No. 265, particularly Section 34, 29 by
Republic Act No. 7653, removed the applicability of any special sanction for violations of any
non-trade foreign exchange transactions previously penalized by Circular No. 960. Petitioners
posit that a comparison of the two provisions shows that Section 36 30 of Republic Act No. 7653
neither retained nor reinstated Section 34 of Republic Act No. 265. Since, in creating the Bangko
Sentral ng Pilipinas, Congress did not include in its charter a clause providing for the application
of Section 34 of Republic Act No. 265 to pending cases, petitioners’ pending dollar-salting cases
are now bereft of statutory penalty, the saving clause in Circular No. 1353 notwithstanding. In
other words, absent a provision in Republic Act No. 7653 expressly reviving the applicability of
any penal sanction for the repealed mandatory foreign exchange reporting regulations formerly
required under Circular No. 960, violations of aforesaid repealed Circular can no longer be
prosecuted criminally.
A comparison of the old Central Bank Act and the new Bangko Sentral’s charter repealing the
former show that in consonance with the general objective of the old law and the new law "to
maintain internal and external monetary stability in the Philippines and preserve the international
value of the peso,"31 both the repealed law and the repealing statute contain a penal cause which
sought to penalize in general, violations of the law as well as orders, instructions, rules, or
regulations issued by the Monetary Board. In the case of the Bangko Sentral, the scope of the
penal clause was expanded to include violations of "other pertinent banking laws enforced or
implemented by the Bangko Sentral." In the instant case, the acts of petitioners sought to be
penalized are violations of rules and regulations issued by the Monetary Board. These acts are
proscribed and penalized in the penal clause of the repealed law and this proviso for proscription
and penalty was reenacted in the repealing law. We find, therefore, that while Section 34 of
Republic Act No. 265 was repealed, it was nonetheless, simultaneously reenacted in Section 36
of Republic Act No. 7653. Where a clause or provision or a statute for the matter is
simultaneously repealed and reenacted, there is no effect, upon the rights and liabilities which
have accrued under the original statute, since the reenactment, in effect "neutralizes" the repeal
and continues the law in force without interruption. 32 The rule applies to penal laws and statutes
with penal provisions. Thus, the repeal of a penal law or provision, under which a person is
charged with violation thereof and its simultaneous reenactment penalizing the same act done by
him under the old law, will neither preclude the accused’s prosecution nor deprive the court of its
jurisdiction to hear and try his case. 33 As pointed out earlier, the act penalized before the
reenactment continues to remain an offense and pending cases are unaffected. Therefore, the
repeal of Republic Act No. 265 by Republic Act No. 7653 did not extinguish the criminal
liability of petitioners for transgressions of Circular No. 960 and cannot, under the circumstances
of this case, be made a basis for quashing the indictments against petitioners.

Petitioners, however, point out that Section 36 of Republic Act No. 7653, in reenacting Section
34 of the old Central Act, increased the penalty for violations of rules and regulations issued by
the Monetary Board. They claim that such increase in the penalty would give Republic Act No.
7653 an ex post facto application, violating the Bill of Rights.34

Is Section 36 of Republic Act No. 7653 and ex post facto legislation?

An ex post facto law is one which: (1) makes criminal an act done before the passage of the law
and which was innocent when done, and punishes such an act; (2) aggravates a crime, or makes
it greater than it was when committed; (3) changes the punishment and inflicts a greater
punishment than the law annexed to the crime when committed; (4) alters the legal rules of
evidence, and authorizes conviction upon less or different testimony than the law required at the
time of the commission of the offense; (5) assuming to regulate civil rights, and remedies only,
in effect imposes penalty or deprivation of a right for something which when done was lawful;
and (6) deprives a person accused of a crime of some lawful protection to which he has become
entitled such as the protection of a former conviction or acquittal, or a proclamation of amnesty.35

The test whether a penal law runs afoul of the ex post facto clause of the Constitution is: Does
the law sought to be applied retroactively take "from an accused any right that was regarded at
the time of the adoption of the constitution as vital for the protection of life and liberty and which
he enjoyed at the time of the commission of the offense charged against him."36
The crucial words in the test are "vital for the protection of life and liberty." 37 We find, however,
the test inapplicable to the penal clause of Republic Act No. 7653. Penal laws and laws which,
while not penal in nature, nonetheless have provisions defining offenses and prescribing
penalties for their violation operate prospectively.38 Penal laws cannot be given retroactive effect,
except when they are favorable to the accused.39 Nowhere in Republic Act No. 7653, and in
particular Section 36, is there any indication that the increased penalties provided therein were
intended to operate retroactively. There is, therefore, no ex post facto law in this case.

On the third issue, petitioners ask us to note that the dollar interest earnings subject of the
criminal cases instituted against them were remitted to foreign banks on various dates between
1983 to 1987. They maintain that given the considerable lapse of time from the dates of the
commission of the offenses to the institution of the criminal actions in 1991 and 1992, the State’s
right to prosecute them for said offenses has already prescribed. Petitioners assert that the Court
of Appeals erred in computing the prescriptive period from February 1986. Petitioners theorize
that since the remittances were made through the Central Bank as a regulatory authority, the
dates of the alleged violations are known, and prescription should thus be counted from these
dates.

In ruling that the dollar-salting cases against petitioners have not yet prescribed, the court a quo
quoted with approval the trial court’s finding that:

[T]he alleged violations of law were discovered only after the EDSA Revolution in 1986
when the dictatorship was toppled down. The date of the discovery of the offense,
therefore, should be the basis in computing the prescriptive period. Since (the) offenses
charged are punishable by imprisonment of not more than five (5) years, they prescribe in
eight (8) years. Thus, only a little more than four (4) years had elapsed from the date of
discovery in 1986 when the cases were filed in 1991.40

The offenses for which petitioners are charged are penalized by Section 34 of Republic Act No.
265 "by a fine of not more than Twenty Thousand Pesos (P20,000.00) and by imprisonment of
not more than five years." Pursuant to Act No. 3326, which mandates the periods of prescription
for violations of special laws, the prescriptive period for violations of Circular No. 960 is eight
(8) years.41 The period shall commence "to run from the day of the commission of the violation
of the law, and if the same be not known at the time, from the discovery thereof and institution of
judicial proceedings for its investigation and punishment."42 In the instant case, the indictments
against petitioners charged them with having conspired with the late President Ferdinand E.
Marcos in transgressing Circular No. 960. Petitioners’ contention that the dates of the
commission of the alleged violations were known and prescription should be counted from these
dates must be viewed in the context of the political realities then prevailing. Petitioners, as close
associates of Mrs. Marcos, were not only protected from investigation by their influence and
connections, but also by the power and authority of a Chief Executive exercising strong-arm rule.
This Court has taken judicial notice of the fact that Mr. Marcos, his family, relations, and close
associates "resorted to all sorts of clever schemes and manipulations to disguise and hide their
illicit acquisitions."43 In the instant case, prescription cannot, therefore, be made to run from the
dates of the commission of those offenses were not known as of those dates. It was only after the
EDSA Revolution of February, 1986, that the recovery of ill-gotten wealth became a highly
prioritized state policy,44 pursuant to the explicit command of the Provisional Constitution. 45 To
ascertain the relevant facts to recover "ill-gotten properties amassed by the leaders and
supporters of the (Marcos) regime"46 various government agencies were tasked by the Aquino
administration to investigate, and as the evidence on hand may reveal, file and prosecute the
proper cases. Applying the presumption "that official duty has been regularly performed", 47 we
are more inclined to believe that the violations for which petitioners are charged were discovered
only during the post-February 1986 investigations and the tolling of the prescriptive period
should be counted from the dates of discovery of their commission. The criminal actions against
petitioners, which gave rise to the instant case, were filed in 1991 and 1992, or well within the
eight-year prescriptive period counted from February 1986.

The fourth issue involves petitioners’ claim that they incurred no criminal liability for violations
of Circular No. 960 since they were exempted from its coverage.

Petitioners postulate that since the purchases of treasury notes were done through the Central
Bank’s Securities Servicing Department and payments of the interest were coursed through its
Securities Servicing Department/Foreign Exchange Department, their filing of reports would be
surplusage, since the requisite information were already with the Central Bank. Furthermore,
they contend that the foreign currency investment accounts in the Swiss banks were subject to
absolute confidentiality as provided for by Republic Act No. 6426, 48 as amended by Presidential
Decree Nos. 1035, 1246, and 1453, and fell outside the ambit of the reporting requirements
imposed by Circular No. 960. Petitioners further rely on the exemption from reporting provided
for in Section 10(q),49 Circular No. 960, and the confidentiality granted to Swiss bank accounts
by the laws of Switzerland.

Petitioners correctly point out that Section 10(q) of Circular No. 960 exempts from the reporting
requirement foreign currency eligible for deposit under the Philippine Foreign Exchange
Currency Deposit System, pursuant to Republic Act No. 6426, as amended. But, in order to avail
of the aforesaid exemption, petitioners must show that they fall within its scope. Petitioners must
satisfy the requirements for eligibility imposed by Section 2, Republic Act No. 6426. 50 Not only
do we find the record bare of any proof to support petitioners’ claim of falling within the
coverage of Republic Act No. 6426, we likewise find from a reading of Section 2 of the Foreign
Currency Deposit Act that said law is inapplicable to the foreign currency accounts in question.
Section 2, Republic Act No. 6426 speaks of "deposit with such Philippine banks in good
standing, as may…be designated by the Central Bank for the purpose." 51 The criminal cases filed
against petitioners for violation of Circular No. 960 involve foreign currency accounts
maintained in foreign banks, not Philippine banks. By invoking the confidentiality guarantees
provided for by Swiss banking laws, petitioners admit such reports made. The rule is that
exceptions are strictly construed and apply only so far as their language fairly warrants, with all
doubts being resolved in favor of the general proviso rather than the exception.52 Hence,
petitioners may not claim exemption under Section 10(q).

With respect to the banking laws of Switzerland cited by petitioners, the rule is that Philippine
courts cannot take judicial notice of foreign laws.53 Laws of foreign jurisdictions must be alleged
and proved.54 Petitioners failed to prove the Swiss law relied upon, either by: (1) an official
publication thereof; or (2) a copy attested by the officer having the legal custody of the record, or
by his deputy, and accompanied by a certification from the secretary of the Philippine embassy
or legation in such country or by the Philippine consul general, consul, vice-consul, or consular
agent stationed in such country, or by any other authorized officer in the Philippine foreign
service assigned to said country that such officer has custody. 55 Absent such evidence, this Court
cannot take judicial cognizance of the foreign law invoked by Benedicto and Rivera.

Anent the fifth issue, petitioners insist that the government granted them absolute immunity
under the Compromise Agreement they entered into with the government on November 3, 1990.
Petitioners cite our decision in Republic v. Sandiganbayan, 226 SCRA 314 (1993), upholding the
validity of the said Agreement and directing the various government agencies to be consistent
with it. Benedicto and Rivera now insist that the absolute immunity from criminal investigation
or prosecution granted to petitioner Benedicto, his family, as well as to officers and employees of
firms owned or controlled by Benedicto under the aforesaid Agreement covers the suits filed for
violations of Circular No. 960, which gave rise to the present case.

The pertinent provisions of the Compromise Agreement read:

WHEREAS, this Compromise Agreement covers the remaining claims and the cases of
the Philippine Government against Roberto S. Benedicto including his associates and
nominees, namely, Julita C. Benedicto, Hector T. Rivera, x x x

WHEREAS, specifically these claims are the subject matter of the following cases (stress
supplied):

1. Sandiganbayan Civil Case No. 9

2. Sandiganbayan Civil Case No. 24

3. Sandiganbayan Civil Case No. 34

4. Tanodbayan (Phil-Asia)

5. PCGG I.S. No. 1.

xxx

WHEREAS, following the termination of the United States and Swiss cases, and also
without admitting the merits of their respective claims and counterclaims presently
involved in uncertain, protracted and expensive litigation, the Republic of the Philippines,
solely motivated by the desire for the immediate accomplishment of its recovery mission
and Mr. Benedicto being interested to lead a peaceful and normal pursuit of his
endeavors, the parties have decided to withdraw and/or dismiss their mutual claims and
counterclaims under the cases pending in the Philippines, earlier referred to (underscoring
supplied);

xxx
 II. Lifting of Sequestrations, Extension of Absolute Immunity and Recognition of the
Freedom to Travel

a) The Government hereby lifts the sequestrations over the assets listed in Annex "C"
hereof, the same being within the capacity of Mr. Benedicto to acquire from the exercise
of his profession and conduct of business, as well as all the haciendas listed in his name
in Negro Occidental, all of which were inherited by him or acquired with income from
his inheritance…and all the other sequestered assets that belong to Benedicto and his
corporation/nominees which are not listed in Annex "A" as ceded or to be ceded to the
Government.

Provided, however, (that) any asset(s) not otherwise settled or covered by this
Compromise Agreement, hereinafter found and clearly established with finality by proper
competent court as being held by Mr. Roberto S. Benedicto in trust for the family of the
late Ferdinand E. Marcos, shall be returned or surrendered to the Government for
appropriate custody and disposition.

b) The Government hereby extends absolute immunity, as authorized under the pertinent
provisions of Executive Orders Nos. 1, 2, 14 and 14-A, to Benedicto, the members of his
family, officers and employees of his corporations above mentioned, who are included in
past, present and future cases and investigations of the Philippine Government, such that
there shall be no criminal investigation or prosecution against said persons for acts (or)
omissions committed prior to February 25, 1986, that may be alleged to have violated any
laws, including but not limited to Republic Act No. 3019, in relation to the acquisition of
any asset treated, mentioned or included in this Agreement.lawphil.net

x x x56

In construing contracts, it is important to ascertain the intent of the parties by looking at the
words employed to project their intention. In the instant case, the parties clearly listed and
limited the applicability of the Compromise Agreement to the cases listed or identified therein.
We have ruled in another case involving the same Compromise Agreement that:

[T]he subject matters of the disputed compromise agreement are Sandiganbayan Civil
Case No. 0009, Civil Case No. 00234, Civil Case No. 0034, the Phil-Asia case before the
Tanodbayan and PCGG I.S. No. 1. The cases arose from complaints for reconveyance,
reversion, accounting, restitution, and damages against former President Ferdinand E.
Marcos, members of his family, and alleged cronies, one of whom was respondent
Roberto S. Benedicto.57

Nowhere is there a mention of the criminal cases filed against petitioners for violations of
Circular No. 960. Conformably with Article 1370 of the Civil Code, 58 the Agreement relied upon
by petitioners should include only cases specifically mentioned therein. Applying the parol
evidence rule,59 where the parties have reduced their agreement into writing, the contents of the
writing constitute the sole repository of the terms of the agreement between the parties. 60
Whatever is not found in the text of the Agreement should thus be construed as waived and
abandoned.61 Scrutiny of the Compromise Agreement will reveal that it does not include all cases
filed by the government against Benedicto, his family, and associates.

Additionally, the immunity covers only "criminal investigation or prosecution against said
persons for acts (or) omissions committed prior to February 25, 1986 that may be alleged to have
violated any penal laws, including but not limited to Republic Act No. 3019, in relation to the
acquisition of any asset treated, mentioned, or included in this Agreement." 62 It is only when the
criminal investigation or case involves the acquisition of any ill-gotten wealth "treated
mentioned, or included in this Agreement"63 that petitioners may invoke immunity. The record is
bereft of any showing that the interest earnings from foreign exchange deposits in banks abroad,
which is the subject matter of the present case, are "treated, mentioned, or included" in the
Compromise Agreement. The phraseology of the grant of absolute immunity in the Agreement
precludes us from applying the same to the criminal charges faced by petitioners for violations of
Circular No. 960. A contract cannot be construed to include matters distinct from those with
respect to which the parties intended to contract.64

In sum, we find that no reversible error of law may be attributed to the Court of Appeals in
upholding the orders of the trial court denying petitioners’ Motion to Quash the Informations in
Criminal Case Nos. 91-101879 to 91-101883, 91-101884 to 91-101892, and 92-101959 to 92-
101969. In our view, none of the grounds provided for in the Rules of Court 65 upon which
petitioners rely, finds applications in this case.

On final matter. During the pendency of this petition, counsel for petitioner Roberto S. Benedicto
gave formal notice to the Court that said petitioner died on May 15, 2000. The death of an
accused prior to final judgment terminates his criminal liability as well as the civil liability based
solely thereon.66

WHEREFORE, the instant petition is DISMISSED. The assailed consolidated Decision of the
Court of Appeals dated May 23, 1996, in CA-G.R. SP No. 35928 and CA G.R. SP No. 35719, is
AFFIRMED WITH MODIFICATION that the charges against deceased petitioner, Roberto S.
Benedicto, particularly in Criminal Cases Nos. 91-101879 to 91-101883, 91-101884 to 101892,
and 92-101959 to 92-101969, pending before the Regional Trial Court of Manila, Branch 26, are
ordered dropped and that any criminal as well as civil liability ex delicto that might be
attributable to him in the aforesaid cases are declared extinguished by reason of his death on May
15, 2000.lawphil.net No pronouncement as to costs.

SO ORDERED

PUBLIC UTILITIES DEPARTMENT, OLONGAPO CITY, petitioner,

vs.
HON. TEOFISTO T. GUINGONA, JR., Secretary of the Department of Justice, and
CONRADO L. TIU, respondents.

BUENA, J.:
This is a petition for review of the Decision of the Court of Appeals 1 promulgated on August
22, 1997 in CA-G.R. SP No. 39689, which affirmed the Resolution dated November 6, 1995 of
respondent Secretary of Justice Teofisto Guingona which directed the Acting City Prosecutor of
Olongapo City to move for the withdrawal of the information against the respondent for theft of
electricity in relation to P.D. 401, if the same were already filed in court, x x x."

The antecedent facts of the case are undisputed:

Private respondent Conrado L. Tiu is the owner and manager of Conti's Plaza, a supermarket
located at Rizal Avenue corner 21st Street, Olongapo City, and another establishment located at
No. 46 Fendler Street, East Tapinac, Olongapo City. The electric power consumption of private
respondent is supplied by petitioner Public Utilities Department.

Petitioner claimed that pursuant to its Power Loss Reduction Program, implemented with the
assistance of Meralco, a digital recording ammeter, or load logger, was installed on November
25, 1992 at the primary line of Conti's Plaza to monitor its actual power utilization. It was later
discovered that the KWH electric meter of Conti's Plaza failed to register the actual amount of its
power consumption. The power loss to petitioner was computed at 86.08%. For the purpose of
pinpointing the source of the power loss, private respondent was informed by petitioner that the
KWH electric meter, current transformers and metering facilities of Conti's Plaza would be
inspected.

The inspection was done on March 3, 1993 in the presence of private respondent Tiu's operations
manager and lawyer. Meralco meter test crew checked the two (2) current transformers installed
outside of Conti's Plaza using state-of-the-art phase angle test apparatus. The test showed that the
polarity markings on the terminals of one of the two (2) current transformers were reversed or
interchanged. This would counter-act the current of the other transformer. Consequently, the
effective registration of the KWH electric meter of Conti's Plaza was only 10.71% with the
corresponding power loss to the herein petitioner of 89.29%. When corrections were made, the
KWH electric meter reflected the correct amount of electric consumption at Conti's Plaza. The
unregistered consumption at Conti's Plaza for the billing period from November 8, 1988 until
February, 1993, was pegged and valued in the amount of P9,364,267.00. Despite repeated
demands to pay the said amount, respondent Tiu failed and refused to pay the same.

On March 17, 1993, the KWH electric meter installed at respondent Tiu's building located at No.
46 Fendler Street, East Tapinac, Olongapo City, was found to register 0-0 consumption. After a
thorough inspection, it was discovered that the potential link of the KWH meter installed at the
second floor of the said building was disengaged. The KWH meter thus did not register any
consumption.

Subsequently, petitioner filed a complaint for violation of City Ordinance No. 23, Series of 1989,
and of Presidential Decree No. 401 for theft of electricity against private respondent.

After preliminary investigation, the office of the State Prosecutor dismissed the complaint.
On appeal, then Acting Secretary of the Department of Justice Demetrio Demetria concurred
with the office of the State Prosecutor's findings that the violation of City Ordinance No. 23 had
prescribed but found sufficient evidence to hold private respondent liable for theft of electricity. 2
Upon private respondent's filing of a motion for reconsideration, respondent Secretary of Justice
reversed3 the said ruling and directed the withdrawal of the information against private
respondent for theft of electricity. This prompted petitioner to file a petition for certiorari with
the Court of Appeals.

On August 22, 1997, the Court of Appeals promulgated its decision dismissing the petition for
lack of merit. Hence, the present petition. The only issue in this case is whether or not the Court
of Appeals erred in ruling that the respondent Secretary of Justice did not commit grave abuse of
discretion in issuing the Resolution of November 6, 1995.

Petitioner alleges that the Court of Appeals committed grave and serious reversible error in
dismissing the petition for certiorari since the petitioner has established a prima facie case to
prosecute private respondent for two (2) counts of theft of electricity.

Petitioner argues that the purpose of a preliminary investigation is not to determine whether the
accused is guilty beyond reasonable doubt of the crime charged, but merely whether there
existed a probable cause for his prosecution, i.e., whether there is sufficient ground to engender a
well-founded belief that a crime has been committed; that the respondent is probably guilty
thereof and should be held for trial. Petitioner submits that it is sufficient to adduce evidence
which inclines the mind to believe, without necessarily leaving room for doubt, that the accused
is guilty of a crime and should be held for trial.

In support of its petition, petitioner cites then Acting Secretary of Justice Demetrio G. Demetria's
resolution, to wit:

"Assuming there is no direct proof that respondent caused the tampering of the electric
meters either by disengaging the polarity thereof or causing the unauthorized electrical
connections, there is ample circumstantial evidence to prove his culpability. Thus,
'circumstantial evidence is sufficient for conviction if: (a) there is more than one
circumstance; (b) the facts from which the inference are derived are proven; and (c) the
combination of all the circumstances is such as to produce a conviction beyond a
reasonable doubt.' (Section 5, Rule 133, Revised Rules of Court).

The following circumstances have been shown, to wit:

"In I.S. No. 339

"1. That respondent provided the required electric meters and current transformers (CTs)
installed at his business premises;

"2. That complainant's installation crew simply followed the standard metering principle
in connecting the current transformers to the KWH meter as respondent's technicians
prepared all electrical connections;
 "3. That it was discovered by the MERALCO meter test crew that the two CTs had their
polarity markings tampered, resulting in that the tampered marking of the polarity of the
CTs led to a wrong connection of the KWH meter which, consequently, registered a
10.71% electric consumption only, with a power loss of 89.29% to complainant;

"4. That after the wiring connection was reversed, the rotation pace of the meter
increased to almost 675%;

"In I.S. No. 506, aside from the first and second circumstances above-mentioned,
additional circumstances were also noted, thus:

"1. That when inspected by complainant team, meter No. 26439328 reflected zero
consumption;

"2. That the potential link in the said electric meter at the second floor was
disengaged resulting in the meter not registering any electric consumption;

"3. That respondent transferred the load of his appliances and equipment from the
first floor of the building to the second floor where the tampered meter is located;

"4. That when complainant's team disconnected the loadside of the meter, a spark
was produced, indicating that there were loads attached to the tampered meter;

"5. That an inventory of the electrical connections to the tampered meter revealed
that respondent installed electrical connections without the consent of
complainant, the electrical consumption of the connections thereby not being
reflected in the tampered meter.

The above-enumerated unbroken chain of events leads to the unmistakable conclusion

that respondent, to the exclusion of others, was the author of the crime."4

Petitioner further argues that it is not necessary to prove directly that respondent Tiu did the
tampering himself for a contrary rule would make the prosecution of power theft and pilferage
next to impossible.

After a careful examination of the assailed decision and resolutions, and the pleadings filed by
both parties, the Court finds the instant petition to be without merit.

The holding of a preliminary investigation is a function of the Executive Department and not of
the Judiciary.5 The primary objective of a preliminary investigation is to free a respondent from
the inconvenience, expense, ignominy and stress of defending himself/herself in the course of a
formal trial, until the reasonable probability of his or her guilt has been passed upon in a more or
less summary proceeding by a competent officer designated by law for that purpose. Secondly,
such summary proceeding also protects the state from the burden of unnecessary expense and
effort in prosecuting alleged offenses and in holding trials arising from false, frivolous or
groundless charges.6 The decision whether or not to dismiss the complaint against private
respondent is necessarily dependent on the sound discretion of the prosecuting fiscal and,
ultimately, that of the Secretary of Justice.7

Decisions or resolutions of prosecutors are subject to appeal to the Secretary of Justice who,
under the Revised Administrative Code, exercises the power of direct control and supervision
over said prosecutors; and who may thus affirm, nullify, reverse or modify their rulings.8

When the respondent Secretary of Justice, in his Resolution of November 6, 1995, reversed the
findings of Acting Secretary of Justice Demetria, in the Resolution dated May 18, 1995, it was
done in the exercise of his power of review, which rests upon his sound discretion.

The Resolution of the Secretary of Justice may be reviewed by the court. However, the court is
without power to directly decide matters over which full discretionary authority has been
delegated to the legislative or executive branch of the government. It is not empowered to
substitute its judgment for that of the Congress or of the President when they did not act in grave
abuse of discretion.

Thus, although it is entirely possible that the investigating fiscal may erroneously exercise the
discretion lodged in him by law, this does not render his act amenable to correction and
annulment by the extraordinary remedy of certiorari, absent any showing of grave abuse of
discretion amounting to excess of jurisdiction.9

This Court finds that the Court of Appeals did not err in ruling that the respondent Secretary of
Justice did not act in grave abuse of discretion in directing the Acting City prosecutor of
Olongapo City to move for the withdrawal of the information against the private respondent for
theft of electricity.

Findings of the Secretary of Justice are not subject to review unless shown to have been made
with grave abuse.10

In its Resolution, respondent Secretary of Justice made the following ratiocination:

"We could not lend credence to the claim of the complainant that respondent stole
electricity in view of the findings of the Meralco meter test crew that the polarity
markings of the terminals of one of the current transformers were reversed or
interchanged. The assumption derived from this finding is hardly persuasive. Even after
the correction of the perceived defect in the current transformers, there was no material
and substantial increase in the KWH consumption of the respondent.

"x x x the respondent cannot be faulted for the reversed or interchanged polarity
markings. The current transformers, prior to their installation, were duly verified, tested
and examined by authorized personnel of the complainant. They were installed after they
were verified to be fit for service and were approved for connection on 4 October 1988
by the complainant. The respondent, therefore, could not have caused the reversal or the
interchange of the markings. In fact, the witness for the complainant, Mr. Jose Ricky V.
 Tan, even stated that since the current transformer were old, he could not determine if the
polarity markings were changed or not."

"x x x Thus, we affirmed your findings that:

'x x x. As correctly pointed out by respondent, it is not possible for him to

disconnect the potential link after its installation because there would be some
initial reading that will be registered. Since the reading is 0-0 from the time of its
installation up to the time it was discovered on March 17, 1993, the only logical
explanation for the 0-0 reading is that the potential link was never
engaged/connected when the new meter was installed. This is buttressed by the
fact that when the subject electric meter was inspected on March 17, 1993, the
seal was still intact and there is no evidence of tampering. Whoever initially
installed said electric meter failed to connect the potential link before covering or
sealing the meter. Certainly, we cannot blame respondent for the inefficiency or
incompetence of others. The fact that it was respondent who informed the PUD
(complainant) that one of his electric meters has a 0-0 reading after receiving his
monthly billing negates bad faith or deliberate intent on the part of the respondent
to violate P.D. 401"11

Comparing the alleged circumstantial evidence enumerated by the petitioner and the
ratiocination made by the respondent Secretary of Justice, the Court finds that no sufficient
evidence of guilt and no prima facie case has been presented by petitioner to compel the fiscal to
prosecute the case of theft of electricity against private respondent.

In Quiso vs. Sandiganbayan,12 this Court pointed out that:

"x x x [A] fiscal by the nature of his office, is under no compulsion to file a particular
criminal information where he is not convinced that he has evidence to support the
allegations thereof. Although this power and prerogative is not absolute and subject to
judicial review, it would be embarrassing for the prosecuting attorney to be compelled to
prosecute a case when he is in no position to do so, because in his opinion he does not
have the necessary evidence to secure a conviction, or he is not convinced of the merits
of the case."

We reiterate the ruling of this Court in Quiso vs. Sandiganbayan13 and in Jacob vs. Puno,14 that
certiorari will not lie to compel the respondent Secretary of Justice to file a case if he thinks the
evidence does not warrant it. Otherwise, he will be committing a dereliction of duty.

WHEREFORE, there being no showing of grave abuse of discretion on the part of public
respondent which would warrant the overturning of its decision, the instant petition is
DISMISSED and the assailed Decision of the Court of Appeals is hereby AFFIRMED.

SO ORDERED
SOCORRO F. ONGKINGCO AND MARIE PAZ B. ONGKINGCO, PETITIONERS, v.
KAZUHIRO SUGIYAMA AND PEOPLE OF THE PHILIPPINES, RESPONDENTS.

DECISION

PERALTA, J.:

Petitioners Socorro F. Ongkingco and Marie Paz B. Ongkingco filed a petition for review on
certiorari, assailing the Decision1 of the Court of Appeals (CA), dated October 24, 2014 in CA-
G.R. CR No. 35356, which affirmed in toto the Order2 of the Regional Trial Court (RTC). The
RTC affirmed in toto the Decision3 of the Metropolitan Trial Court (MeTC) which found
petitioners guilty of four (4) counts of violation of Batas Pambansa Bilang 22 in Criminal Cases
Nos. 318339 to 318342. The MeTC ordered petitioners to pay a fine of P100,000.00 each for
Criminal Case Nos. 318339 to 318341, and P200,000.00 for Criminal Case No. 318342, and to
jointly and severally pay complainant Kazuhiro Sugiyama the face amount of the 4 dishonored
checks in the total amount of P797,025.00, with interest at 12% per annum from the filing of the
complaint on April 11, 2002 until the amount is fully paid, and cost of suits.

The facts are as follows: cralawred

On April 6, 2001, respondent Kasuhiro4 Sugiyama entered into a "Contract Agreement"5 with
New Rhia Car Services, Inc. where petitioner Socorro is the President and Chairperson of the
Board of Directors, and petitioner Maria Paz B. Ongkingco is a Board Director. Under the
Agreement, Sugiyama would receive a monthly dividend of P90,675.00 for five years in
exchange for his investment of P2,200,000.00 in New Rhia Car Services, Inc. To cover
Sugiyama's monthly dividends, petitioners issued six (6) checks. The first three (3) checks, dated
September 10, 2011, October 10, 2001 and November 10, 2001, were good checks, but the
remaining 3 checks bounced for having been draw against insufficient funds.

In a Memorandum of Agreement6 dated October 2001, Socorro, President and General Manager
of New Rhia Car Service, Inc., obtained a loan from Sugiyama, a Director of the same company,
amounting to P500,000.00 with a five percent (5%) interest for a period of one (1) month. As a
guarantee and payment for the said obligation, Socorro issued an Allied Bank Check with No.
0000127109 dated November 30, 2001, amounting to P525,000.00. When the check was
presented for payment, it was dishonored for having been drawn against insufficient funds, just
like the 3 other checks initially issued by petitioners. A formal demand letter dated March 5,
2002 was delivered to Socorro's office, but no payment was made. Thus, Sugiyama filed a
complaint against petitioners for four (4) counts of violation of Batas Pambansa Bilang (B.P.)
22.

Save for the check numbers, check dates and amounts, the accusatory portions ofthe four (4)
separate Informations docketed as Criminal Case No. 318339,7 318340,8 3183419 and 318342,10
similarly read as follows: cralawred

That on or about the 10th day of December 2001 or prior thereto, in the City of Makati
Philippines and within the jurisdiction of this Honorable Court, the above-named accused, being
then the officers and authorized signatories of New Rhia Car Services, [Inc.] did then and there
willfully, unlawfully and feloniously make out, draw and issue to Kasuhiro Sugiyama, to apply
on account or for value the check described below: cralawred

Check No. : 0000122834

Drawn Against: Allied Bank
In the Amount of: [P]90,675.00
Dated/Postdated: December 10, 2001
Payable to: Kasuhiro Sugiyama

[S]aid accused well knowing that at the time of the issue thereof, said account did not have
sufficient funds in or credit with the drawee bank for the payment in full of the face amount of
such check upon its presentment, which check when presented for payment within ninety (90)
days from the date thereof was subsequently dishonored by the drawee bank for the reason
''Draw Against Insufficient Funds" and despite receipt of notice of such dishonor, the accused
failed to pay the payee the amount of the said check or to make arrangement for full payment
thereof within five (5) banking days after receiving notice.

CONTRARY TO LAW.
Makati, 7 August 2002.

[Signed]
EDGARDO G. HIRANO
 
Prosecutor II

I hereby certify that a preliminary investigation has been conducted in this case; that there is
reasonable ground to believe that a crime has been committed and that the accused are probably
guilty thereof; that the accused were given a chance to be informed of the complaint and of the
evidence submitted against them; that they were given an opportunity to submit controverting
evidence; and that this Information is filed with the approval of the 1 st Assistant City Prosecutor
having been first obtained.

[Signed]
EDGARDO G. HIRANO
 
Prosecutor II

Both petitioners pleaded not guilty to the four (4) charges. On February 4, 2003, Socorro and
Sugiyama executed an "Addendum to Contract Agreement," 11 agreeing on a new schedule of
payment with interests, but the obligation remain unpaid.

On May 20, 2011, the MeTC rendered a Decision12 finding petitioners guilty of four (4) counts
of violation of B.P. 22, the dispositive portion of which reads: cralawred
WHEREFORE, in view of the foregoing, the prosecution having proven the guilt of the accused
beyond reasonable doubt, the Court renders judgment finding accused Socorro F. Ongkingco and
Marie Paz B. Ongkingco GUILTY of the offense of Violation of B.P. 22 on four (4) counts and
hereby sentences them to pay the respective FINE of: cralawred

1. P100.000.00 for Criminal Case No. 318339;

2. P100.000.00 for Criminal Case No. 318340;
3. P100.000.00 for Criminal Case No. 318341; and
4. P200.000.00 for Criminal Case No. 318342

with subsidiary imprisonment in case of insolvency.

Further, both accused are jointly and severally ORDERED to PAY complainant Kazuhiro
Sugiyama the respective face amount of the four (4) dishonored checks under Criminal Case
Nos. 318339 to 318341 or a total amount ofP797,025.00 with interest of 12.0% per annum from
the filing of the complaint on April 11, 2002 until the amount is fully paid and cost of suits.

SO ORDERED.13
chanRoblesvirtualLaw1ibrary

The MeTC ruled that the first and third elements of violation of B.P. 22 are present, namely: the
making, drawing and issuance of any check to apply on account or for value, and the subsequent
dishonor by the drawee bank for insufficiency of funds or credit. The MeTC found that the
subject 4 checks were issued by the accused Socorro and Marie Paz as guarantee payment for the
principal loan of P525,000.00 and its interest obtained from Sugiyama. The MeTC noted that the
accused admitted the issuance of the said checks to Sugiyama in consideration of the loan to
New Rhia Car Services, Inc.; thus, the subject checks were issued on account or for value. The
MeTC added that when the 4 checks were presented for payment on their respective due dates,
they were dishonored by the drawee bank for the reason "Drawn Against Insufficient Funds
(DAIF)" as shown on the dorsal portion of the said checks.

As regards the second element which requires that the prosecution must prove the knowledge of
the maker, drawer or issuer that at the time of the issue, he or she does not have sufficient funds
in, or credit with, the drawee bank for the payment of such check in full upon presentment, the
MeTC held: cralawred

Prosecution, in the case at bar, had presented witness [Marilou) La Serna [a staff of Sugiyama's
private counsel/private prosecutor] who testified that the demand letter dated March 5, 2002
demanding for the payment of the dishonored checks was received by the secretary of accused
Socorro as shown by the handwritten signature on the face of the said letter. Said letter was
personally delivered to the office of accused Socorro at Amorsolo Mansion, Adelantado Street,
Legaspi Village, Makati City. While witness La Serna did not met (sic) personally Socorro at the
office, the secretary acknowledged the receipt of the latter upon asking permission from accused
Socorro who was inside the room (TSN dated March 09, 2010, page 7). Accused Marie Paz, on
the other hand, failed to refute the same absent any controverting evidence on her part.
Prosecution, thus, was able to prove the receipt of the demand letter/notice of dishonor. Despite
receipt of the same, both accused failed to pay the face amount of the dishonored checks or to
make arrangement for the full settlement of the same.14
chanRoblesvirtualLaw1ibrary

The MeTC further ruled that the prosecution was able to prove by preponderance of evidence the
civil liability of both Socorro and Marie Paz, thus:cralawred

x x x Accused Socorro did not deny the issuance of the subject checks in which she is one of the
signatories in favor of the complainant Sugiyama. (TSN dated September 06, 2010, page 16).
Accused Marie, for her part, failed to controvert the same. This was supported by the subject
checks together with the Contract of Agreement marked as (Exhibit "B to B-1") and Addendum
to Contract Agreement marked as (Exhibit "C to C-4"). However, upon presentment with the
drawee bank for payment on their respective due dates, it was dishonored for the reason "DAIF."
Despite verbal demands by complainant Sugiyama and receipt of the written demand letter made
by its counsel, accused still failed to pay or make arrangement for the full settlement of the face
value of the dishonored checks. Both accused should be held civilly answerable for the face
amount of the subject four (4) dishonored checks under Criminal Case Nos. 318339 to 318342
covering a total amount of P797,025.00.15
chanRoblesvirtualLaw1ibrary

Aggrieved, petitioners appealed to the RTC, which affirmed in toto the judgment of the MeTC in
an Order16 dated June 28, 2012.

Dissatisfied, petitioners filed a petition for review before the Court of Appeals.

On October 24, 2014, the CA rendered a Decision denying the petition for review, the fallo of
which states: cralawred

WHEREFORE, the Petition is hereby DENIED. The Order dated 28 June 2012 of the Regional
Trial Court of Makati City, Branch 59, in Criminal Case Nos. 11-2287 & 11-2290 is
AFFIRMED.

SO ORDERED.17
chanRoblesvirtualLaw1ibrary

The CA ruled that petitioners' stance that they cannot be made liable for the value of the
dishonored checks as the same were issued without any consideration begs the question. As aptly
held by the MeTC and affirmed by the RTC, the subject checks were issued to guarantee the
payment or return of the money which Sugiyama gave to petitioners as loan and the
corresponding interest. The CA added that jurisprudence abounds that upon issuance of a check,
in the absence of evidence to the contrary, it is presumed that the same was issued for a valuable
consideration which may consist either in some right, interest, profit or benefit accruing to the
party who makes the contract, or some forbearance, detriment, loss or some responsibility, to act,
or labor, or service given, suffered or undertaken by the other side.
In rejecting petitioners' theory that they could not be held criminally liable as they merely drew
and signed the corporate check as officers of the corporation, the CA pointed out that under
paragraph 2, Section 1 of B.P. 22, where the check is drawn by a corporation, company or entity,
the person/s who actually signed the check in behalf of such drawer shall be liable. This is
because, generally, only natural persons may commit a crime, and a criminal case can only be
filed against the officers of a corporation and not against the corporation itself, which can only
act through its officers.

The CA also ruled that the prosecution was able to adduce evidence that petitioners issued the
subject dishonored checks. The CA pointed out that all petitioner Marie had to offer by way of
defense was her mere denial that she was not a signatory thereto, and that she neither testified
nor participated in the trial. The CA added that she could not invoke her lack of involvement in
the negotiation for the transaction as a defense, as B.P. 22 punishes the mere issuance of a
bouncing check, and not the purpose for which the check was issued or in consideration of the
terms and conditions relating to its issuance.

With the CA's denial of their motion for reconsideration, petitioners filed a petition for review on
certiorari, raising the following grounds: (1) the prosecution failed to prove beyond reasonable
doubt that Socorro received the notice of dishonor; (2) the prosecution failed to prove that Maria
Paz is a signatory to the checks involved in the case; and (3) the "Addendum to Contract
Agreement" executed by the parties obliterated the obligation arising from the dishonored
checks. Petitioners also raise for the first time that the four (4) Informations filed before the
MeTC, Makati City, do not bear the approval of the city prosecutor.

The petition is partly meritorious.

The dissent seeks to grant the petition, reverse and set aside the Decision of the CA, and acquit
petitioners on the grounds (1) that the Informations are defective for having been filed without
prior approval of the city prosecutor; and (2) that receipt of the notice of dishonor was not
proven. The dissent adds that this is without prejudice to the right of private complainant
Sugiyama to pursue an independent civil action against New Rhia Car Services, Inc. for the
amount of the dishonored checks.

The dissent found that there is no proof in the records that Prosecutor II Edgardo G. Hirang filed
the Informations with prior authority from the 1st Assistant City Prosecutor. Assuming that
Prosecutor II Hirang was indeed authorized to do so, the Informations would still be defective
because an Assistant City Prosecutor is not one of the authorized officers enumerated in Section
4, Rule 112 of the Revised Rules of Criminal Procedure, which reads: cralawred

No complaint or information may be filed or dismissed by an investigating prosecutor without

the prior written authority or approval of the provincial or city prosecutor or chief state
prosecutor or the Ombudsman or his deputy.18
chanRoblesvirtualLaw1ibrary

In support of his view, the dissent cites the following cases: cralawred
 1. People v. Judge Garfin,19 where the Court held that where the Information was filed by an
unauthorized officer, the infirmity therein constitutes a jurisdictional defect that cannot be
cured;

2. Cudia v. CA,20 where the Court ruled that: (a) when the law requires an Information to be filed by
a specified public officer, the same cannot be filed by another; if not, the court does not acquire
jurisdiction over the accused and over the subject matter; and (b) the defense of lack of
jurisdiction may be raised at any stage of the proceeding; and

3. Maximo, et al. v. Villapando, Jr.,21 where the Court ruled that mere certification in the
Information that it was filed with approval of the city prosecutor is not enough; there must be a
demonstration that prior written delegation or authority was indeed given by the city
prosecutor to the assistant prosecutor to approve the filing of the Information.

The Court holds that the foregoing cases are not applicable. For one, as aptly pointed out by the
Office of the Solicitor General, petitioners are barred by estoppel by laches for their unjustified
delay in raising the issue of lack of prior written authority or approval to file the Informations.
For another, the supposed lack of written authority or approval to file the Informations is a
waivable ground for a motion to quash information.

In Garfin, the Information for violation of the provisions of Republic Act No. 8282, or the
"Social Security Law," was filed by a State Prosecutor with prior authority and approval of the
Regional State Prosecutor. The Court ruled, however, that nowhere in Presidential Decree (P.D.)
No. 127522 is the regional state prosecutor granted the power to appoint a special prosecutor
armed with the authority to file an Information without prior written authority or approval of the
city or provincial prosecutor or chief state prosecutor. No directive was issued by the Secretary
of Justice to the Regional State Prosecutor to investigate and/or prosecute Social Security System
(SSS) cases filed within his territorial jurisdiction, pursuant to Section 15 of P.D. No. 1275
which governs the appointment of special prosecutors. The Court held that, in the absence of a
directive from the Secretary of Justice designating the State Prosecutor as Special Prosecutor for
SSS cases or a prior written approval of the Information by the provincial or city prosecutor, the
Information filed before the trial court was filed by an officer without authority to file the same.
As the infirmity in the Information constitutes a jurisdictional defect that cannot be cured, the
judge did not err in dismissing the case for lack of jurisdiction.

In Cudia, the City Prosecutor of Angeles City filed a motion to dismiss/withdraw the
Information, stating that through inadvertence and oversight, the Investigating Panel was misled
into hastily filing the Information, despite the fact that the accused was apprehended for illegal
possession of unlicensed firearm and ammunition within the jurisdiction of the Provincial
Prosecutor of Pampanga. Despite the opposition of the accused, the trial court granted the motion
to dismiss. The Court invalidated the Information filed by the city prosecutor because he had no
territorial jurisdiction over the place where the said offense was committed, which is within the
jurisdiction of the Provincial Prosecutor. The Court held that an Information, when required by
law to be filed by a public prosecuting officer, cannot be filed by another, otherwise, the court
does not acquire jurisdiction. The Court also stressed that questions relating to lack of
jurisdiction may be raised at any stage of the proceeding, and that an infirmity in the
Information, such as lack of authority of the officer signing it, cannot be cured by silence,
acquiescence or even by express consent.

In Maximo, an Information for perjury was filed against the accused before the MeTC of Makati
City. A motion to quash Information was filed, alleging that the person who filed the Information
had no authority to do so, because the Resolution finding probable cause did not bear the
approval of the city prosecutor. It was contended that the Information bears a certification that
the filing of the same had the prior authority or approval of the city prosecutor, and that there is a
presumption of regularity that prior written authority or approval was obtained in the filing of the
Information, despite the non presentation of the Office Order, which was the alleged basis of the
authority. Stressing that there must be a demonstration that prior written delegation or authority
was given by the city prosecutor to the assistant city prosecutor to approve the filing of the
Information, the Court affirmed the findings of the CA that: (1) the copy of the Office Order,
allegedly authorizing the assistant city prosecutor to sign in behalf of the city prosecutor, was not
found in the record; (2) said Office Order is not a matter of judicial notice, and a copy thereof
must be presented in order for the court to have knowledge of its contents; and (3) in the absence
thereof, there was no valid delegation of authority by the city prosecutor to its assistant city
prosecutor.

In Garfin and Maximo, a motion to dismiss and motion to quash, respectively, were filed by the
accused on the ground that the Information was filed without prior written authority or approval
of the city prosecutor. Meanwhile, in Cudia, a motion to dismiss or withdraw Information was
also filed by the city prosecutor himself for lack of territorial jurisdiction over the offense.

In stark contrast to Garfin, Cudia and Maximo, petitioners failed to raise the lack of written
authority or approval of the city prosecutor before the MeTC, the RTC, and the CA without any
justifiable reason. No motion to dismiss or motion to quash was filed by petitioners. From the
filing of the Informations in 2002, petitioners were silent on why they raised the said issue for
the first time before the Court in 2015 via a petition for review on certiorari.

Defined as the failure or neglect for an unreasonable and unexplained length of time to do that
which, by exercising due diligence, could or should have been done earlier, laches is negligence
or omission to assert a right within a reasonable length of time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it. 23Laches can be imputed
against petitioners, because a considerable length of time had elapsed before they raised the said
procedural issue, and reasonable diligence should have prompted them to file a motion to dismiss
or to quash the Information before the trial court. For the first time after almost 13 years after the
filing of the Informations against them, petitioners are now before the Court decrying that the
prosecutor who filed the Informations against them had no authority to do so.

It is also not amiss to state that had petitioners questioned the authority of Prosecutor II Hirang
before the trial court, the defect in the Informations could have been cured before the
arraignment of the accused by a simple motion of the prosecution to amend the Information; the
amendment at this stage of the proceedings being a matter of right on the part of the prosecution,
or for the court to direct the amendment thereof to show the signature or approval of the city
prosecutor in filing the Information.24 Moreover, Section 4, Rule 117 of the Revised Rules of
Criminal Procedure mandates that if the motion to quash is based on the alleged defect of the
complaint or Information which can be cured by an amendment, the court shall order that an
amendment be made. Either of these two could have been done to address the issue of lack of
written authority or approval of the officer who filed the Information.

It is significant to note that under the substantive law, 25 a public prosecutor has the authority to
file an Information, but before he or she can do so, a prior written authority or approval of the
provincial or city prosecutor or chief state prosecutor or the Ombudsman, or his or her deputy, is
required by a procedural rule, i.e., Section 4, Rule 112 of the Revised Rules of Criminal
Procedure. It also bears emphasis that under Section 9, Rule 117 of the same Rule, the ground
that the officer who filed the information had no authority to do so, which prevents the court
from acquiring jurisdiction over the case — referred to in Garfin and Cudia — pertains to lack of
jurisdiction over the offense, which is a non-waivable ground. The three other non-waivable
grounds for a motion to quash the information are: (1) the facts charged do not constitute an
offense; (2) the criminal action or liability has been extinguished; and (3) the accused has been
previously convicted or acquitted of the offense charged, or the case against him was dismissed
or otherwise terminated without his express consent.

To recall, the Information in Garfin was sought to be dismissed, as it was filed by a special
prosecutor with the prior authority and approval of the regional state prosecutor, who was not
authorized by the Secretary of Justice to act as special counsel in SSS cases. On the other hand,
the Information in Cudia was sought to be dismissed or withdrawn, as it was inadvertently filed
by the city prosecutor who had no territorial jurisdiction over the place where the offense of
illegal possession of firearm was committed. In contrast to Garfin and Cudia where the officers
had no authority under the law to file the Information, the Information for perjury in Maximo
was filed by the assistant city prosecutor with a certification that it was done so with prior
authority or approval of the city prosecutor, but the written authority or delegation given by the
city prosecutor to the former, to approve the filing of the information, was not found on record,
as pointed out in a motion to quash.

As held in Villa v. Ibañez,26 jurisdiction over the subject matter is conferred by law, while
jurisdiction over the case is invested by the act of the plaintiff and attaches upon the filing of the
complaint or information. Hence, while a court may have jurisdiction over the subject matter,
like a violation of the Social Security Law, it does not acquire jurisdiction over the case itself
until its jurisdiction is invoked with the filing of the Information.

Accordingly, in instances where the information is filed by an authorized officer, like a public
prosecutor, without the approval of the city prosecutor appearing in the information, but the
resolution for filing of the information bears the approval of the city prosecutor, or his or her
duly authorized deputy, and such lack of approval is timely objected to before arraignment, the
court may require the public prosecutor to have the signature of the city prosecutor affixed in the
information to avoid undue delay. However, if the objection is raised after arraignment, at any
stage of the proceeding or even on appeal, the same should no longer be a ground to declare the
information as invalid, because it is no longer a question of jurisdiction over the case. After all,
the resolution of the investigating prosecutor attached to the information carries with it the
recommendation to file the information and the approval to file the information by the
prosecutor, or his or her duly authorized deputy.

If the information is filed by the public prosecutor without the city prosecutor's or his or her
deputy's approval both in the information and, the resolution for the filing thereof, then the court
should require the public prosecutor to seek the approval of the city prosecutor before
arraignment; otherwise, the case may be dismissed on the ground of lack of authority to file the
information under Section 3(d), Rule 117. This ground may be raised at any stage of the
proceedings, which may cause the dismissal of the case.

If, however, the information is filed by an unauthorized official—not a public prosecutor, like a
private complainant, or even public officers who are not authorized by law or rule to file the
information—then the information is invalid from the very beginning, and the court should motu
proprio dismiss the case even without any motion to dismiss, because such kind of information
cannot confer upon the court jurisdiction over the case.

In this particular case, there is proof in the records that Prosecutor II Hirang filed the
Informations with prior authority from the 1st Assistant City Prosecutor. The records—which
include those of the preliminary investigation accompanying the informations filed before the
court, as required under Rule 112—dearly show that 1st Assistant City Prosecutor (ACP) Jaime
A. Adoc, signing in behalf of the City Prosecutor, approved the filing of four (4) counts of
violation of B.P. 22, after it was recommended for approval by the Investigating Prosecutor.

The dispositive portion of the Resolution dated August 7, 2002 of the City Prosecution Office of
Makati City says it all:cralawred

WHEREFORE, premises considered, it is respectfully recommended that respondents be

indicted with four (4) counts of violation of Batas Pambansa Bilang 22 and that the attached
Information for that purpose be approved for filing in court.

Bail Recommended: P7,000.00 for each check for each accused.

Makati City, August 7, 2002.

[Signed]
  EDGARDO G. HIRANO
Prosecutor II

RECOMMENDING APPROVAL: cralawred

[Signed]
   
Review Prosecutor

   

APPROVED:
 FOR THE CITY
PROSECUTOR
 

[Signed]
JAIME A. ADOC
st  
1 Assistant City
Prosecutor27

Contrary to the dissent that the prior approval came from the 1 st Assistant Prosecutor, who had
no authority to file an Information on his own, the afore-quoted dispositive clearly indicates that
ACP Adoc approved the filing of the case "FOR THE CITY PROSECUTOR" and not on his
own. It would be too late at this stage to task the prosecution, and it would amount to denial of
due process, to presume that ACP Adoc had no authority to approve the filing of the subject
Informations. Had petitioners questioned ACP Adoc's authority or lack of approval by the city
prosecutor before the MeTC, and not just for the first time before the Court, the prosecution
could have easily presented such authority to approve the filing of the Information.

At any rate, the CA committed reversible error in affirming the conviction of petitioner Marie
Paz of violation of four (4) counts of B.P. 22, because the prosecution failed to prove that she
received a notice of dishonor. As a rule, only questions of law may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court. As an exception, questions of fact may
be raised if any of the following is present: (1) When there is grave abuse of discretion; (2) when
the findings are grounded on speculations; (3) when the inference made is manifestly mistaken;
(4) when the judgment of the Court of Appeals is based on misapprehension of facts; (5) when
the factual findings are conflicting; (6) when the Court of Appeals went beyond the issues of the
case and its findings are contrary to the admission of the parties; (7) when the Court of Appeals
overlooked undisputed facts which, if properly considered, would justify a different
conclusion; (8) when the findings of the Court of Appeals are contrary to those of the trial court;
(9) when the facts set forth by the petitioner are not disputed by the respondent; and (10) when
the findings of the Court of Appeals are premised on the absence of evidence and are
contradicted by the evidence on record.28 Here, the seventh and tenth exceptions are present.

To sustain a conviction of violation of B.P. 22, the prosecution must prove beyond reasonable
doubt three (3) essential elements, namely: cralawred

1. The accused makes, draws or issues any check to apply to account or for value;

2. The accused knows at the time of the issuance that he or she does not have sufficient funds in,
or credit with, drawee bank for payment of the check in full upon its presentment; and

3. The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit; or
it would have been dishonored for the same reason had not the drawer, without any valid
reasons, ordered the bank to stop payment.
The presence of the first and third elements is undisputed. However, while the prosecution
established the second element, i.e., receipt of the notice of dishonor, with respect to petitioner
Socorro, it failed to do so in the case of petitioner Marie Paz.

The prosecution identified and formally offered in evidence, and petitioners admitted 29 to have
issued the four (4) subject Allied Bank checks as guaranty checks, to wit: Check No.
0000122834 dated December 10, 2011 in the amount of P90,675.00 as Exhibits "D" to "D-2";
Check No. 0000122835 dated January 10, 2002 in the amount of P90,675.00 as Exhibits "E" to
"E-2"; Check No. 0000122836 dated February 10, 2002 in the amount of P90,675.00 as Exhibits
"F" to "F-2"; and Check No 0000127109 dated November 30, 2001 in the amount of
P525,000.00 as Exhibits "H" to "H-2." When presented for payment, all said checks were
dishonored for having been drawn against insufficient funds. The MeTC admitted m evidence
the prosecution's said Exhibits with their sub-markings.30

It is of no moment that the subject checks were issued as a guarantee and upon the insistence of
private complainant Sugiyama. What is significant is that the accused had deliberately issued the
checks in question to cover accounts and those same checks were dishonored upon presentment,
regardless of the purpose for such issuance. 31 The legislative intent behind the enactment of B.P.
22, as may be gathered from the statement of the bill's sponsor when then Cabinet Bill No. 9 was
introduced before the Batasan Pambansa, is to discourage the issuance of bouncing checks, to
prevent checks from becoming "useless scraps of paper" and to restore respectability to checks,
all without distinction as to the purpose of the issuance of the checks. Said legislative intent is
made all the more certain when it is considered that while the original text of the bill had
contained a proviso excluding from the law's coverage a check issued as a mere guarantee, the
final version of the bill as approved and enacted deleted the aforementioned qualifying proviso
deliberately to make the enforcement of the act more effective. It is, therefore, clear that the real
intention of the framers of B.P. 22 is to make the mere act of issuing a worthless check malum
prohibitum and, thus, punishable under such law.32

Inasmuch as the second element involves a state of mind of the person making, drawing or
issuing the check which is difficult to prove, Section 2 of B.P. 22 creates a prima facie
presumption of such knowledge, thus: cralawred

SEC. 2. Evidence of knowledge of insufficient funds. — The making, drawing and issuance of a
check payment of which is refused by the drawee because of insufficient funds in or credit with
such bank, when presented within ninety (90) days from the date of the check, shall be prima
facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer
pays the holder thereof the amount due thereon, or makes arrangements for payment in full by
the drawee of such check within five (5) banking days after receiving notice that such check has
not been paid by the drawee.

For this presumption to arise, the prosecution must prove the following: (a) the check is
presented within ninety (90) days from the date of the check; (b) the drawer or maker of the
check receives notice that such check has not been paid by the drawee; and (c) the drawer or
maker of the check fails to pay the holder of the check the amount due thereon, or make
arrangements for payment in full within five (5) banking days after receiving notice that such
check has not been paid by the drawee.33 In other words, the presumption is brought into
existence only after it is proved that the issuer had received a notice of dishonor and that within
five (5) days from receipt thereof, he failed to pay the amount of the check or to make
arrangements for its payment.34 The presumption or prima facie evidence, as provided in this
Section, cannot arise if such notice of nonpayment by the drawee bank is not sent to the maker or
drawer, or if there is no proof as to when such notice was received by the drawer, since there
would simply be no way of reckoning the crucial 5-day period.35

The prosecution was able to establish beyond reasonable doubt the presence of the second
element with respect to petitioner Socorro, who received the notice of dishonor through her
secretary. Prosecution witness Marilou La Serna, a legal staff of Sugiyama's private counsel,
testified that the letter dated March 5, 2002 demanding payment of the dishonored checks was
received by the secretary of petitioner Socorro, as shown by the handwritten signature on the
face of the said letter. 36 La Serna clarified on direct examination that (1) it was petitioner
Socorro's secretary who acknowledged receipt of the said demand letter with the permission of
Socorro, who was in another room of her office; and (2) that there were several calls in the office
of Socorro, as well as a time when she went to the law office of Sugiyama's counsel, to inform
that she acknowledged receipt of that demand letter: cralawred

[Private prosecutor Atty. Abrenica]

Q. How did you come to know the accused Socorro F. Ongkingco, Ms. Witness?
A. When I served a copy of the demand letter sometime in March 2002, a certain secretary who
received my letter and informed me that I have to wait for a while because she will go to the
room of Ms. Socorro Ongkingco.

Q. You mentioned earlier that you served a demand letter to Ms. Socorro Ongkingco, I'm
showing to you a demand letter previously marked as Exhibit "J", what is the relationship of this
letter to the demand letter that you mentioned?
A: This is the demand letter I served to Ms. Socorro Ongkingco.

Q: Now Ms. Witness, do you remember where is the office of this Ms. Socorro Ongkingco?
A: The office of Ms. Socorro Ongkingco was just a few meters away from our formerly (sic)
office and it was located in Amorsolo Mansion along Adelentado Street.

Q: Where is this Adelentado Street?

A: It's just a few meters away from our formerly (sic) office in Palanca Street.

Q: Now Ms. Witness, you mentioned that you personally served a copy of the demand letter
to the accused, can you go over this demand letter and show to the Honorable Court the
proof of the receipt of this demand letter?
A: It was signed by her secretary.

ATTY. ABRENICA:
Your Honor, can I request for sub-markings, this signature, date and the name of the office staff
of Ms. Socorro Ongkingco who received the demand letter as Exhibit "J-1", your Honor.
Q: Now, Ms. Witness, do you know if Ms. Socorro Ongkingco was able to read this demand
letter?
A: Yes, Ma'am because when I first served the demand letter, the secretary who received
that demand letter informed me that she will go to the room of Ms. Ongkingco and after a
few minutes, she came back and Ms. Socorro Ongkingco replied that the secretary has to
signed (sic) the receipt of the demand letter.

Q: Now Ms. Witness, other than the statement of the secretary of Ms. Ongkingco, how else
did you know that Ms. Socorro Ongkingco actually received the demand letter?
A: There were a (sic) several calls in the office of Ms. Socorro Ongkingco and there was
also a time when she went to the office to informed (sic) that she acknowledged receipt of
that demand letter.

Q: Where was that office where Ms. Socorro Ongkingco went?

A: Colonade Building along C. Palanca Street.

Q: Whose office is this?

A: That is the law office of Atty. Abrenica.

Q: Did Ms. Socorro Ongkingco actually go to that office?

A: Yes, Ma'am.

Q: How did you know that she was there at the law office?
A: She was there because I met her for the first time [in] the law office to see our client Mr.
Kasuhiro Sugiyama but unfortunately, during that time Mr. Kasuhiro Sugiyama is out of the
country, she was not able to meet Mr. Kasuhiro Sugiyama and she met Atty. Percy Abrenica and
I was the one who assist (sic) her.

x x x.37
chanRoblesvirtualLaw1ibrary

On cross-examination and re-direct examination, La Serna confirmed that the demand letter was
acknowledged receipt by the secretary with the permission of Socorro herself: cralawred

CROSS EXAMINATION BY THE

DEFENSE COUNSEL ATTY. ACHAS

xxxx

Q: Is this the demand letter Exhibit "J" served by you to Ms. Ongkingco?
A: Yes, Sir.

Q: Where is the signature of Ms. Socorro Ongkingco?

A: Actually Sir, this is the signature of the secretary.
Q: It was acknowledged only by the secretary?
A: Yes, Sir.

Q: Not personally by Mrs. Ongkingco?

A: Yes, Sir.

Q: Actually, during that time when you go to the office of Ms. Ongkingco, the service letter, she
did not acknowledge the receipt of this letter?
A: She was not the one who acknowledged the letter.

COURT:
Q: Question from the Court, you have not met personally the accused at the time when you
personally served the demand letter?
A: I have not met Your Honor, but then I was informed by the secretary that she's going to
leave me for a while to go to the room of Ms. Ongkingco if she's going to sign the demand
letter.38

xxxx

RE-DIRECT EXAMINATION

Q: Ms. Witness, why was the secretary who was (sic) the one who received and signed the
receipt of this demand letter?

A: It was the secretary who signed the receipt as per instruction of Ms. Socorro Ongkingco
although I haven't met her when I served the demand but the secretary told me that she
will just leave me for a while to ask the permission of Ms. Socorro Ongkingco.39
chanRoblesvirtualLaw1ibrary

The testimony of La Serna shows that it was the secretary of petitioner Socorro who
acknowledged receipt of the demand letter dated March 5, 2002, with the permission of Socorro,
who was just in another room of her office. Suffice it to state that when the secretary of Socorro
left for a while, came back shortly, and acknowledged receipt of the same demand letter, the
requisite receipt of the notice of dishonor was satisfied.

Against the affirmative testimony of La Serna, Socorro merely denied knowledge and receipt of
the demand letter dated March 5, 2002. It is well settled that the defense of denial is inherently
weak and unreliable by virtue of its being an excuse too easy and too convenient for the guilty to
make. Denial should be substantiated by clear and convincing evidence, and the accused cannot
solely rely on her negative and self-serving negations, for such defense carries no weight in law
and has no greater evidentiary value than the testimony of credible witnesses who testify on
affirmative matters.

Socorro could have easily presented, but failed to proffer the testimony of her secretary to
dispute the testimony of La Serna. Socorro neither denied that she permitted her secretary to
receive the demand letter, nor explained why her secretary acknowledged receipt of the said
letter while she was in the other room of her office. Socorro also failed to dispute La Serna's
claim that there were several calls in the office of Socorro, as well as a time when she went to the
law office of Sugiyama's counsel, to inform that she acknowledged receipt of that demand letter.
Socorro did not, likewise, ascribe ill-motive on the part of La Serna to testify falsely against her.

In Chua v. People,40 the Court found that the element of knowledge of insufficiency of funds was
not established, for failure to prove the petitioner's receipt of a notice of dishonor. In that case,
the private respondent testified that the personal secretary of the petitioner received the demand
letter, but said secretary was never presented to testify whether she in fact handed the demand
letter to petitioner who, from the onset, denies having received such letter. The Court noted that
it is not enough for the prosecution to prove that a notice of dishonor was sent to the accused,
and that the prosecution must prove actual receipt of said notice, because the fact of service
provided for in the law is reckoned from the receipt of such notice of dishonor by the accused.
The factual circumstances in Chua differ from this case, because petitioner Socorro was shown
to have permitted her secretary to acknowledge receipt of the demand letter while she was in
another room of her office. Socorro also failed to dispute La Serna's claim that she went to the
law office of Sugiyama's counsel to inform that she acknowledged receipt of that demand letter.

Meanwhile, Marie Paz cannot be faulted for failing to refute with evidence the allegation against
her, because Sugiyama and La Serna hardly testified as to the service of a notice of dishonor
upon her. La Serna never mentioned that Marie Paz was, likewise, served with a notice of
dishonor. There is also no proof that Socorro's secretary was duly authorized to receive the
demand letter on behalf of Marie Paz.

When service of notice is an issue, the person alleging that notice was served must prove the fact
of service, and the burden of proving notice rests upon the party asserting its existence. 41 Failure
of the prosecution to prove that the person who issued the check was given the requisite notice of
dishonor is a clear ground for acquittal. It bears emphasis that the giving of the written notice of
dishonor does not only supply proof for the element arising from the presumption of knowledge
the law puts up, but also affords the offender due process.42 The law thereby allows the offender
to avoid prosecution if she pays the holder of the check the amount due thereon, or makes
arrangements for the payment in full of the check by the drawee within five banking days from
receipt of the written notice that the check had not been paid.43 Thus, the absence of a notice of
dishonor is a deprivation of petitioner's statutory right.44

After reviewing the records and applying the foregoing principles to this case, the Court rules
that the prosecution has proven beyond reasonable doubt that petitioner Socorro received a
notice of dishonor of the four (4) subject checks, but failed to do so in the case of petitioner
Marie Paz. Perforce, petitioner Socorro should be convicted of the four (4) charges for violation
of B.P. 22, but petitioner Marie Paz should be acquitted of the said charges.

As a general rule, when a corporate officer issues a worthless check in the corporate's name, he
or she may be held personally liable for violating a penal statute, 45i.e., Section 1 of B.P. 22.46
However, a corporate officer who issues a bouncing corporate check can only be held civilly
liable when he or she is convicted. 47 Conversely, once acquitted of the offense of violating B.P.
22, a corporate officer is discharged of any civil liability arising from the issuance of the
worthless check in the name of the corporation he or she represents. 48 This is without regard as to
whether his acquittal was based on reasonable doubt or that there was a pronouncement by the
trial court that the act or omission from which the civil liability might arise did not exist.49

Here, petitioner Socorro should be held civilly liable for the amounts covered by the dishonored
checks, in light of her conviction of the four (4) charges for violation of B.P. 22 and because she
made herself personally liable for the fixed monthly director's dividends in the amount of
P90,675.00 and the P525,000.00 loan with interest, based on the Contract Agreement dated April
6, 2011, the Addendum to Contract Agreement dated February 4, 2003, and the Memorandum of
Agreement dated October 2001, which were all formally offered by the prosecution, 50 and
admitted in evidence by the trial court. 51 To be sure, petitioner Marie Paz was never shown to
have been part of or privy to any of the said agreements; thus, she cannot be held civilly liable
for the dishonored checks.

In the Contract of Agreement52 dated April 6, 2001, Socorro, President and Chairman of the
Board of New Rhia Car Services, Inc., undertook and bound herself as obligor, among other
matters, to pay Sugiyama, as obligee, Ninety Thousand Six Hundred Seventy-Five Pesos
(P90,675.00) as monthly director's dividends for a period of five (5) years, in consideration of his
purchase of stock at New Rhia Car Services, Inc. amounting to Two Million and Two Hundred
Thousand Pesos (P2,200,000.00). To recall, the first three (3) Allied Bank checks, dated
September 10, 2011, October 10, 2001 and November 10, 2001, were good checks, but the
remaining checks bounced for having been draw against insufficient funds, i.e., Check No.
0000122834 dated December 10, 2011 in the amount of P90,675.00; Check No. 0000122835
dated January 10, 2002 in the amount of P90,675.00; and Check No. 0000122836 dated February
10, 2002 in the amount of P90,675.00.

In the Memorandum of Agreement 53 dated October 2001, Socorro, President and General
Manager of New Rhia Car Services, Inc., obtained from Sugiyama, a Director of New Rhia Car
Services, Inc., a loan amounting to Five Hundred Thousand Pesos (P500,000.00), with five
percent (5%) interest rate for one (1) month. As guarantee and payment for the said obligation,
Socorro issued Allied Bank Check No. 0000127109 dated November 30, 2001, amounting to
P525,000.00.

In the Addendum to Contract Agreement54 dated February 4, 2003, Socorro admitted having
incurred serious delay in the payment of the agreed monthly director's dividend stated in the
Contract of Agreement dated April 6, 2001, and agreed to adopt a new payment schedule of the
monthly director's dividend, including penalty interest, as well as the P500,000.00 loan covered
by the Memorandum of Agreement dated October 2001.

Generally, the stockholders and officers are not personally liable for the obligations of the
corporation except only when the veil of corporate fiction is being used as a cloak or cover for
fraud or illegality, or to work injustice. 55 Here, petitioner Socorro bound herself personally liable
for the monthly director's dividends in the fixed amount of P90,675.00 for a period of five (5)
years and for the P500,000.00 loan, for which she issued the subject four (4) dishonored checks.
She then admitted having incurred serious delay in the payment of the said fixed monthly
dividends and loan, and further agreed to adopt a new payment schedule of payment therefor, but
to no avail.

Granted that Socorro is authorized to sign checks as corporate officer and authorized signatory of
New Rhia Car Services, Inc., there is still no evidence on record that she was duly authorized,
through a Board Resolution or Secretary's Certificate, to guarantee a corporate director thereof
[Sugiyama] fixed monthly dividends for 5 years, to enter into a loan, and to adopt a new
schedule of payment with the same director, all in behalf of the corporation. It would be the
height of injustice for the Court to allow Socorro to hide behind the separate and distinct
corporate personality of New Rhia Car Services, Inc., just to evade the corporate obligation
which she herself bound to personally undertake.

It is not amiss to stress that the power to declare dividends under Section 43 of the Corporation
Code of the Philippines lies in the hands of the board of directors of a stock corporation, and can
be declared only out of its unrestricted retained earnings. Assuming arguendo that Socorro was
authorized by the Board to fix the monthly dividends of Sugiyama as a corporate director, it
appears that she committed an ultra vires act because dividends can be declared only out of
unrestricted retained earnings of a corporation, which earnings cannot obviously be fixed and
pre-determined 5 years in advance.

In fine, since Socorro was convicted of four (4) charges of violation of B.P. 22, she must be held
liable for the face value of the subject four (4) dishonored checks which is P797,025.00, more so
because she personally bound herself liable for what appears to be unauthorized corporate
obligations. Moreover, the legal interest rate awarded by the MeTC, which was affirmed by both
the RTC and the CA, must be modified pursuant to Nacar v. Gallery Frames,56 as follows: 12%
per annum from the filing of the complaint on April 11, 2002 until June 30, 2013, and 6% per
annum from July 1, 2013 until finality of this Decision, the legal interest rate is 6% per annum;
and (3) from finality of this Decision until fully paid, the legal interest rate is 6% per annum.

As to the penalty, the Court finds no reason to disturb the fines (with subsidiary imprisonment in
case of insolvency) imposed by the MeTC57 and affirmed by both the RTC and the CA, for being
in accord with Section 1 of B.P. 22, which provides for the penalty of "imprisonment of not less
than thirty (30) 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."

WHEREFORE, the petition for review on certiorari is PARTLY GRANTED. The Decision
dated October 24, 2014 and the Resolution dated March 19, 2015 of the Court of Appeals in CA-
G.R. CR No. 35356 are AFFIRMED with MODIFICATION: the conviction of petitioner
Socorro F. Ongkingco for four (4) counts of violation of Batas Pambansa Bilang 22, is
AFFIRMED and she is ORDERED to PAY private complainant Kazuhiro Sugiyama the face
value of the four (4) dishonored checks in the amount of P797,025.00 with the following legal
interest rates: twelve percent (12%) per annum from the filing of the complaint on April 11, 2002
until June 30, 2013, and six percent (6%) per annum from July 1, 2013 until finality of this
Decision; and from finality of this Decision until fully paid, the legal interest rate is six percent
(6%) per annum, plus costs of suit. Petitioner Marie Paz B. Ongkingco is ACQUITTED of the
said charges for lack of proof that she received a notice of dishonor.

SO ORDERED.

ATTY. EDGAR H. TALINGDAN, complainant, vs. JUDGE HENEDINO P. EDUARTE,

RTC-Br. 20, Cauayan, Isabela, Respondent.

RESOLUTION

BELLOSILLO, J.:

Atty. Edgar H. Talingdan, a private practitioner, charges respondent Judge Henedino P. Eduarte,
RTC-Br. 20, Cauayan, Isabela, with improvidently issuing a warrant of arrest in Crim. Case No.
Br. 20-1373 for libel without the requisite preliminary investigation being first conducted by the
Office of the Public Prosecutor.

Specifically, complainant alleged in his Letter-Complaint dated 14 June 2000 that sometime in
April 2000 elements of the PNP Bambang, Nueva Vizcaya stormed into his residence to arrest
him and his client, Modesto Luzano, on the strength of a Warrant of Arrest dated 12 April 2000 1
issued by respondent Judge Eduarte in Crim. Case No. Br. 20-1373 entitled "People v. Edgar
Talingdan and Modesto Luzano" of the RTC-Br. 20, Cauayan, Isabela for the supposed crime of
libel. Surprised that such a case existed against him and his client as they had not been
previously charged, complainant filed a Very Urgent Motion to Quash and/or Set Aside Warrant
of Arrest and Direct Prosecutors Office to Conduct Preliminary Investigation dated 5 May 2000
asking that the Warrant of Arrest be set aside for being premature since they had not been
previously notified of the charge against them and no preliminary investigation was ever
conducted by the public prosecutors office yet, and for being defective since the amount of bail
was not specified therein in violation of their constitutional right to bail. Respondent Judge
granted the motion and recalled the warrant of arrest in an Order dated 12 May 2000 admitting
that he issued the same under the mistaken belief that a preliminary investigation had already
been conducted and an information already filed in court.

Complainant nonetheless filed this administrative case allegedly to help the Court in purging the
Judiciary of those who undermine its dignity and credibility as his faith therein was almost
eroded by the unfortunate incident.

In his Comments dated 28 August 2000 2 respondent Judge did not deny that he issued the
improvident warrant of arrest. He only alleged by way of explanation and exculpation that on 24
March 2000 a complaint for libel was directly filed with the RTC-Br. 19, Cauayan, Isabela, by
Leoncio Dalin Sr. which was docketed as Crim. Case No. 2881. The case was assigned to his
sala after raffle and was re-docketed as Crim. Case No. Br. 20-1373. The records of the case then
went to the Criminal Docket Clerk, Ms. Imelda Severino who, under the Check List for Criminal
Cases 3 that he had prepared for her, was supposed to verify from the records first whether an
information had already been filed and if there was, to prepare the corresponding warrant of
arrest if the accused had not yet been arrested. Thus when he saw the Warrant of Arrest prepared
by Ms. Severino in Crim. Case No. Br. 20-1373, he signed the same honestly thinking that she
had faithfully complied first with her duty of going over the records of the case. Respondent
Judge assured the Court that the incident was a simple mistake on his part and that he had not
been actuated by malice, corrupt motive, or improper consideration in its commission.

We referred this case on 17 January 2001 to the Presiding Justice, Court of Appeals, for
assignment who would conduct an investigation and thereafter submit a report and
recommendation within ninety (90) days from notice. 4 cräläwvirtualibräry

In his Report and Recommendation 5 Associate Justice Salvador J. Valdez, Jr. recommended that
respondent Judge be adjudged guilty as charged and fined Ten Thousand Pesos (P10,000.00) for
the improvident issuance of the Warrant of Arrest in Crim. Case No. Br. 20-1373.

We find the recommendation to be well-taken and adopt the same.

Enshrined in our Constitution is the rule that "[n]o x x x warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing x
x x the persons x x x to be seized." 6 Interpreting the words "personal determination" we said 7
that it does not thereby mean that judges are obliged to conduct the personal examination of the
complainant and his witnesses themselves. To require thus would be to unduly laden them with
preliminary examinations and investigations of criminal complaints instead of concentrating on
hearing and deciding cases filed before them. Rather what is emphasized merely is the exclusive
and personal responsibility of the issuing judge to satisfy himself as to the existence of probable
cause. To this end he may: (a) personally evaluate the report and the supporting documents
submitted by the prosecutor regarding the existence of probable cause and, on the basis thereof,
issue a warrant of arrest; or (b) if on the basis thereof he finds no probable cause, disregard the
prosecutors report and require the submission of supporting affidavits of witnesses to aid him in
determining its existence. What he is never allowed to do is follow blindly the prosecutors bare
certification as to the existence of probable cause. Much more is required by the constitutional
provision. Judges have to go over the report, the affidavits, the transcript of stenographic notes if
any, and other documents supporting the prosecutors certification. Although the extent of the
judges personal examination depends on the circumstances of each case, to be sure, he cannot
just rely on the bare certification alone but must go beyond it. This is because the warrant of
arrest issues not on the strength of the certification standing alone but because of the records
which sustain it. 8 He should even call for the complainant and the witnesses to answer the courts
probing questions when the circumstances warrant. 9 cräläwvirtualibräry

In the case at bench respondent Judge not only failed to follow the required procedure but worse,
was negligent enough not to have noticed that there was not even a prosecutor's certification to
rely upon since no information had even been filed yet in court, and that Crim. Case No. Br. 20-
1373 was merely docketed as such on the strength of a mere complaint filed by the private
complainant Leoncio Dalin Sr. himself. Respondent Judge admitted that he signed the Warrant
of Arrest against complainant and the latters client simply because it was presented to him for
signature by the Criminal Docket Clerk. There was thus a total and unwarranted abdication of a
judicial function. Respondent cannot exculpate himself from administrative liability by
contending that the mistake was entirely attributable to the Criminal Docket Clerk who failed to
faithfully comply with her "duty" of going over the records of criminal cases and ensuring first
that an information had already been filed in court before preparing the warrant of arrest. As we
have already repeatedly said, a judge cannot take refuge behind the inefficiency of his court
personnel for they are not guardians of his responsibilities. 10 More importantly the responsibility
delegated by respondent was clearly unauthorized and unwarranted, as already explained above.
He cannot without abandoning his judicial obligation just instruct the Criminal Docket Clerk,
through the much vaunted Check List for Criminal Cases that he had prepared for her to follow,
to automatically prepare warrants of arrest simply because informations have been filed against
the accused. Although respondents purpose in preparing the Check List, i.e., to help him comply
with RA 8493 otherwise known as the Speedy Trial Act of 1998, 11 may be considered laudable,
we have already said that shortcuts in judicial processes are to be avoided when they impede
rather than promote a judicious dispensation of justice. 12 Much more when, as in the instant
case, the shortcut amounted to a violation of a constitutional provision.

A judge fails in his bounden duty if he relies merely on the certification of the investigating
officer as to the existence of probable cause 13 making him administratively liable. We can do no
less in the case of herein respondent who issued the subject warrant of arrest without even such
certification to rely upon, and worse, merely at the instance of the Criminal Docket Clerk who
mechanically typed the Warrant of Arrest for his signature.

ACCORDINGLY , respondent Judge Henedino P. Eduarte, RTC-Br. 20, Cauayan, Isabela, is

FINED P10,000.00 for improvidently issuing the Warrant of Arrest dated 12 April 2000 in Crim.
Case No. Br. 20-1373 in violation of the constitutional requirement of personal determination by
the issuing judge as to the existence of probable cause. He is WARNED that any repetition of the
procedure he had heretofore observed in the issuance of warrants of arrest will merit a more
severe sanction.

SO ORDERED.
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