G.R. No.

96132
ORIEL MAGNO, petitioner,
vs.
HONORABLE COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES, respondents.
June 26, 1992

PARAS, J.:

FACTS:

Oriel Magno is on the process of putting up a car repair shop sometime in April 1983 but he
lacks fund in acquiring complete set of equipments for him to make his shop operational. Thus,
she approached Corazon Teng, Vice President of Mancor Industries, for his needed equipment
for car repair of which Mancor was a distributor. Having been approached by petitioner on his
predicament, who fully bared that he had no sufficient funds to buy the equipment needed, Teng
referred Magno to LS Finance and Management Corporation advising its Vice-President, Joey
Gomez, that Mancor was willing and able to supply the pieces of equipment needed if LS
Finance could accommodate petitioner and provide him credit facilities.

The arrangement required Magno to pay 30% of the total amount of the equipment as a warranty
deposit. Since Magno didn’t have that money, he requested Joey Gomez to look for a third party
who could lend him the amount. And apparently Corazon Teng was the one who provided that
amount without the knowledge of Magno. As collateral to the equipment, Magno issued six
checks wherein only two of them were cleared and the rest have no sufficient fund. Likewise,
because of unsuccessful venture, Magno also failed to pay LS Finance who then pulled out the
garage equipments. Magno was charged four counts of violation of B.P. Blg. 22 (The Bouncing
Checks Law) where he found guilty and affirmed by the Court of Appeals. Hence, the present
petition for review

ISSUE:
WON Magno is punishable under BP Blg. 22

HELD:

The Supreme Court held that Magno is not criminally liable for the issued checks. To charge the
petitioner for the refund of a "warranty deposit" which he did not withdraw as it was not his own
account, it having remained with LS Finance, is to even make him pay an unjust "debt", to say
the least, since petitioner did not receive the amount in question. All the while, said amount was
in the safekeeping of the financing company, which is managed, supervised and operated by the
corporation officials and employees of LS Finance.
It is interesting to ponder why Mrs. Teng did not want the petitioner to know that it was she who
"accommodated" petitioner's request for Joey Gomez, to source out the needed funds for the
"warranty deposit". Thus it unfolds the kind of transaction that is shrouded with mystery,
gimmickry and doubtful legality. It is in simple language, a scheme whereby Mrs. Teng as the
supplier of the equipment in the name of her corporation, Mancor, would be able to "sell or
lease" its goods as in this case, and at the same time, privately financing those who desperately
need petty accommodations as this one. This modus operandi has in so many instances
victimized unsuspecting businessmen, who likewise need protection from the law, by availing of
the deceptively called "warranty deposit" not realizing that they also fall prey to leasing
equipment under the guise of a lease-purchase agreement when it is a scheme designed to skim
off business clients.

FACTS: Oriel Magno, lacking fund in acquiring complete set of equipment to make his car repair shop
operational, approached Corazon Teng, Vice President of Mancor Industries. VP Teng referred Magno to
LS Finance and Management Corporation, advising its Vice President, Joey Gomez, that Mancor was
willing to supply the pieces of equipment needed if LS Finance could accommodate Magno and and
provide him credit facilities. The arrangement went on requiring Magno to pay 30% of the total amount
of the equipment as warranty deposit but Magno couldn't afford to pay so he requested VP Gomez to
look for Without Magno's knowledge, Corazon was the one who provided that amount. As payment to
the equipment, Magno issued six checks, two of them were cleared and the rest had no sufficient fund.
Because of the unsuccessful venture, Magno failed to pay LS Finance which then pulled out the
equipment. Magno was charged of violation of BP Blg. 2 (The Bouncing Checks Law) and found guilty.
ISSUE: Whether or not Magno should be punished for the issuance of the checks in question. HELD: No.
To charge Magno for the refund of a warranty deposit which he did not withdraw as it was not his own
account, it having remained with LS Finance, is to even make him pay an unjust debt since he did not
receive the amount in question. All the while, said amount was in the safekeeping of the financing
company which is managed by the officials and employees of LS Finance.