Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 188767 July 24, 2013

SPOUSES ARGOVAN AND FLORIDA GADITANO, Petitioners, vs. SAN MIGUEL CORPORATION, Respondent.

D E C I S I O N

PEREZ, J.:

For review on certiorari are the Decision dated 11 March 2008 and Resolution dated 16 July 2009 of the Court of Appeals in CA-G.R. SP No. 88431 which reversed the Resolutions issued by the Secretary of Justice, suspending the preliminary investigation of I.S. No. 01-4205 on the

ground of prejudicial question.

Petitioner Spouses Argovan Gaditano (Argovan) and Florida Gadiano (Florida), who were engaged in the business of buying and selling beer and softdrinks products, purchased beer products from San Miguel Corporation (SMC) in the amount of P285, 504.00 on 7 April 2000. Petitioners paid through a check signed by Florida and drawn against Argovans Asia Trust Bank Current Account. When said check was presented for payment on 13 April 2000, the check was dishonored for having been drawn against insufficient funds. Despite three (3) written demands,1 petitioner failed to make good of the check. This prompted SMC to file a criminal case for violation of Batas Pambansa Blg. 22 and estafa against petitioners, docketed as I.S.

No. 01-4205 with the Office of the Prosecutor in Quezon City on 14 March 2001.

In their Counter-Affidavit, petitioners maintained that their checking account was funded under an automatic transfer arrangement, whereby funds from their joint savings account with AsiaTrust Bank were automatically transferred to their checking account with said bank whenever a check they issued was presented for payment. Petitioners narrated that sometime in 1999, Fatima Padua (Fatima) borrowed P30,000.00 from Florida. On 28 February 2000, Fatima delivered Allied Bank Check No. 82813 dated 18 February 2000 payable to Florida in the amount of P378,000.00. Said check was crossed and issued by AOWA Electronics. Florida pointed out that the amount of the check was in excess of the loan but she was assured by Fatima that the check was in order and the proceeds would be used for the payroll of AOWA Electronics. Thus, Florida deposited said check to her joint AsiaTrust Savings Account which she maintained with her husband, Argovan. The check was cleared on 6 March 2000 and petitioners joint savings account was subsequently credited with the sum of P378,000.00. Florida initially paid P83,000.00 to Fatima. She then withdrew P295,000.00 from her joint

savings account and turned over the amount to Fatima. Fatima in turn paid her loan to Florida.

Petitioners claimed that on 7 April 2000, the date when they issued the check to SMC, their joint savings account had a balance of P330,353.17.2 As of 13 April 2000, petitioners balance even amounted to P412,513.17.3

On 13 April 2000, Gregorio Guevarra (Guevarra), the Bank Manager of AsiaTrust Bank, advised Florida that the Allied Bank Check No. 82813 for P378,000.00, the same check handed to her by Fatima, was not cleared due to a material alteration in the name of the payee. Guevarra explained further that the check was allegedly drawn payable to LG Collins Electronics, and not to her, contrary to Fatimas representation. AsiaTrust Bank then garnished the P378,000.00 from the joint savings account of petitioners without any court order. Consequently, the check issued by petitioners to SMC was dishonored having been drawn against insufficient funds.

On 23 October 2000, petitioners filed an action for specific performance and damages against AsiaTrust Bank, Guevarra, SMC and Fatima, docketed as Civil Case No. Q-00-42386. Petitioners alleged that AsiaTrust Bank and Guevarra unlawfully garnished and debited their bank accounts; that their obligation to SMC had been extinguished by payment; and that Fatima

issued a forged check.

Petitioners assert that the issues they have raised in the civil action constitute a bar to the

prosecution of the criminal case for violation of Batas Pambansa Blg. 22 and estafa.

On 29 January 2002, the Office of the Prosecutor recommended that the criminal proceedings be suspended pending resolution of Civil Case No. Q-00-42386. SMC thereafter filed a motion for reconsideration before the Office of the Prosecutor but it was denied for lack of merit on 19

September 2002.

SMC filed with the Department of Justice (DOJ) a petition for review challenging the Resolutions of the Office of the Prosecutor. In a Resolution dated 3 June 2004, the DOJ dismissed the petition. SMC filed a motion for reconsideration, which the DOJ Secretary denied in a

Resolution dated 15 December 2004.

Undaunted, SMC went up to the Court of Appeals by filling a petition for certiorari, docketed as CA-G.R. SP No. 88431. On 11 March 2008, the Court of Appeals rendered a Decision granting

the petition as follows:

IN THE LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Resolutions of the Department of Justice dated June 3, 2004 and December 15, 2004 are SET ASIDE. In view thereof, let the suspension of the preliminary investigation of the case docketed as I.S. No. 01-4205 with the Office of the Prosecutor of Quezon City be LIFTED. Accordingly, the continuation of the preliminary investigation until completed is ordered and if probable cause exists, let the

corresponding information against the respondents be filed.4

The Court of Appeals drew a distinction between the civil case which is an action for specific performance and damages involving petitioners joint savings account, and the criminal case which is an action for estafa/violation of Batas Pambansa Blg. 22 involving Argovans current account. The Court of Appeals belied the claim of petitioners about an automatic fund transfer

arrangement from petitioners joint savings account to Argovans current account.

By petition for review, petitioners assail the ruling of the Court of Appeals on the following

grounds:

I. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND EXCEEDED THE BOUNDS OF ITS JURISDICTION IN GIVING DUE COURSE TO RESPONDENTS PETITION FOR CERTIORARI.

II. THE COURT OF APPEALS ERRED IN REVERSING THE RESOLUTIONS DATED JUNE 3, 2004 AND DECEMBER 15, 2004 OF THE DOJ, THERE BEING NO GRAVE ABUSE OF DISCRETION.

III. THE COURT OF APPEALS ERRED IN RULING THAT THERE WAS NO PREJUDICIAL QUESTION BELOW BECAUSE TWO DIFFERENT BANK ACCOUNTS

ARE INVOLVED IN THE CIVIL AND CRIMINAL CASES.

IV. THE APPELLATE COURT ERRED IN REQUIRING PETITIONERS TO PRESENT EVIDENCE TO PROVE THE PREJUDICIAL QUESTION DURING THE PRELIMINARY INVESTIGATION.5

The issues raised by petitioners are divided into the procedural issue of whether certiorari is the correct mode of appeal to the Court of Appeals and the substantive issue of whether a

prejudicial question exists to warrant the suspension of the criminal proceedings.

On the procedural issue, petitioners contend that SMCs resort to certiorari under Rule 65 was an improper remedy because the DOJs act of sustaining the investigating prosecutors resolution to suspend the criminal proceedings due to a valid prejudicial question was an error in judgment and not of jurisdiction. Petitioners further assert that nevertheless, an error of judgment is not correctible by certiorari when SMC had a plain, speedy and adequate remedy, which was to file an appeal to the Office of the President.

The procedure taken up by petitioner was correct.

The Court of Appeals is clothed with jurisdiction to review the resolution issued by the Secretary of the DOJ through a petition for certiorari under Rule 65 of the Rules of Court albeit solely on the ground that the Secretary of Justice committed grave abuse of his discretion amounting to excess or lack of jurisdiction.6

In Alcaraz v. Gonzalez,7 we stressed that the resolution of the Investigating Prosecutor is subject to appeal to the Justice Secretary who exercises the power of control and supervision over said Investigating Prosecutor; and who may affirm, nullify, reverse, or modify the ruling of such prosecutor. Thus, while the Court of Appeals may review the resolution of the Justice Secretary, it may do so only in a petition for certiorari under Rule 65 of the Rules of Court, solely on the ground that the Secretary of Justice committed grave abuse of his discretion amounting

to excess of lack of jurisdiction.8

Also, in Tan v. Matsuura,9 we held that while the findings of prosecutors are reviewable by the DOJ, this does not preclude courts from intervening and exercising our own powers of review with respect to the DOJs findings. In the exceptional case in which grave abuse of discretion is committed, as when a clear sufficiency or insufficiency of evidence to support a finding of probable cause is ignored, the Court of Appeals may take cognizance of the case via a petition under Rule 65 of the Rules of Court.10

We agree with the Court of Appeals that the DOJ abused its discretion when it affirmed the prosecutors suspension of the criminal investigation due to the existence of an alleged prejudicial question.

We expound.

Petitioners insist that the Court of Appeals erroneously ruled against the existence of a prejudicial question by separately treating their joint savings account and Argovans current account, and concluding therefrom that the civil and criminal cases could proceed independently

of each other.

It is argued that the appellate court overlooked the fact that petitioners had an automatic transfer arrangement with AsiaTrust Bank, such that funds from the savings account were automatically transferred to their checking account whenever a check they issued was presented for payment.

Petitioners maintain that since the checking account was funded by the monies deposited in the savings account, what mattered was the sufficiency of the funds in the savings account. Hence, petitioners separate action against AsiaTrust Bank for unlawfully garnishing their savings account, which eventually resulted in the dishonor of their check to SMC, poses a prejudicial

question in the instant criminal proceedings.

Moreover, petitioners argue that they were not required to fully and exhaustively present evidence to prove their claims. The presentation of their passbook, which confirmed numerous withdrawals made on the savings account and indicated as "FT" or "Fund Transfer," proved the existence of fund transfer from their savings account to the checking account.

A prejudicial question generally comes into play in a situation where a civil action and a criminal action are both pending and there exists in the former an issue which must be preemptively resolved before the latter may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case. The rationale behind the principle of prejudicial question is to avoid two conflicting

decisions.11

Section 7, Rule 111 of the 2000 Rules of Criminal Procedure states the two elements necessary

for a civil case to be considered a prejudicial question, to wit:

Section 7. Elements of prejudicial question. The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or

not the criminal action may proceed. (Emphasis supplied).

If both civil and criminal cases have similar issues, or the issue in one is intimately related to the issues raised in the other, then a prejudicial question would likely exist, provided that the other element or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon which the criminal prosecution would be based, but also that the resolution of the issues raised in the civil action would be necessarily determinative of the guilt or innocence of the accused. If the resolution of the issue in the civil action will not determine the criminal responsibility of the accused in the criminal action based on the same facts, or if there is no necessity that the civil case be determined first before taking up the criminal case, the civil case does not involve a prejudicial question. Neither is there a prejudicial question if the civil and the

criminal action can, according to law, proceed independently of each other.12

The issue in the criminal case is whether the petitioner is guilty of estafa and violation of Batas Pambansa Blg. 22, while in the civil case, it is whether AsiaTrust Bank had lawfully garnished

the P378,000.00 from petitioners savings account.

The subject of the civil case is the garnishment by AsiaTrust Bank of petitioners savings account.1wphi1 Based on petitioners account, they deposited the check given to them by Fatima in their savings account. The amount of said check was initially credited to petitioners savings account but the Fatima check was later on dishonored because there was an alleged alteration in the name of the payee. As a result, the bank debited the amount of the check from petitioners savings account. Now, petitioners seek to persuade us that had it not been for the unlawful garnishment, the funds in their savings account would have been sufficient to cover a

check they issued in favor of SMC.

The material facts surrounding the civil case bear no relation to the criminal investigation being conducted by the prosecutor. The prejudicial question in the civil case involves the dishonor of another check. SMC is not privy to the nature of the alleged materially altered check leading to its dishonor and the eventual garnishment of petitioners savings account. The source of the funds of petitioners savings account is no longer SMCs concern. The matter is between petitioners and Asia Trust Bank. On the other hand, the issue in the preliminary investigation is

whether petitioners issued a bad check to SMC for the payment of beer products.

The gravamen of the offense punished by Batas Pambansa Blg. 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment.13 Batas Pambansa Blg. 22 punishes the mere act of issuing a worthless check. The law did not look either at the actual ownership of the check or of the account against which it was made, drawn, or issued, or at the intention of the drawee, maker or issuer.14 The thrust of the law is to

prohibit the making of worthless checks and putting them into circulation.15

Even if the trial court in the civil case declares Asia Trust Bank liable for the unlawful garnishment of petitioners savings account, petitioners cannot be automatically adjudged free from criminal liability for violation of Batas Pambansa Blg. 22, because the mere issuance of worthless checks with knowledge of the insufficiency of funds to support the checks is in itself

the offense.16

Furthermore, three notices of dishonor were sent to petitioners, who then, should have immediately funded the check. When they did not, their liabilities under the bouncing checks law attached. Such liability cannot be affected by the alleged prejudicial question because their

failure to fund the check upon notice of dishonour is itself the offense.

In the crime of estafa under Article 315, paragraph 2(d) of the Revised Penal Code, deceit and damage are additional and essential elements of the offense. It is the fraud or deceit employed by the accused in issuing a worthless check that is penalized.17 A prima facie presumption of deceit arises when a check is dishonored for lack or insufficiency of funds.18 Records show that a notice of dishonor as well as demands for payment, were sent to petitioners. The presumption of deceit applies, and petitioners must overcome this presumption through substantial evidence. These issues may only be threshed out in a criminal investigation which must proceed

independently of the civil case.

Based on the foregoing, we rule that the resolution or the issue raised in the civil action is not determinative or the guilt or innocence of the accused in the criminal investigation against them. There is no necessity that the civil case be determined firrst before taking up the criminal

complaints.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated 11 March 2008 and its Resolution dated 16 July 2000, in CA-G.R. SP No. 88431, are hereby AFFIRMED.

SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 159823 February 18, 2013

TEODORO A. REYES, Petitioner, vs. ETTORE ROSSI, Respondent.

D E C I S I O N

BERSAMIN, J.:

The rescission of a contract of sale is not a prejudicial question that will warrant the suspension of the criminal proceedings commenced to prosecute the buyer for violations of the Bouncing Checks Law (Batas Pambansa Blg. 22) arising from the dishonor of the checks the buyer issued

in connection with the sale.

Antecedents

On October 31, 1997, petitioner Teodoro A. Reyes (Reyes) and Advanced Foundation Construction Systems Corporation (Advanced Foundation), represented by its Executive Project Director, respondent Ettore Rossi (Rossi), executed a deed of conditional sale involving the purchase by Reyes of equipment consisting of a Warman Dredging Pump HY 300A worth P10,000,000.00. The parties agreed therein that Reyes would pay the sum of P3,000,000.00 as downpayment, and the balance of P7,000,000.00 through four post-dated checks. Reyes complied, but in January 1998, he requested the restructuring of his obligation under the deed of conditional sale by replacing the four post-dated checks with nine post-dated checks that would include interest at the rate of P25,000.00/month accruing on the unpaid portion of the obligation on April 30, 1998, June 30, 1998, July 31, 1998, September 30, 1998 and October 31, 1998.1

Advanced Foundation assented to Reyes request, and returned the four checks. In turn, Reyes issued and delivered the following nine postdated checks in the aggregate sum of

P7,125,000.00 drawn against the United Coconut Planters Bank,2 to wit:

Check No. Date Amount

72807 April 30, 1998 P 25,000.00

79125 May 1, 1998 1,000,000.00

72802 May 30, 1998 2,000,000.00

72808 June 30, 1998 25,000.00

72809 July 31, 1998 25,000.00

72801 August 31, 1998 2,000,000.00

72810 September 30, 1998 25,000.00

72811 October 31, 1998 25,000.00

72903 November 30, 1998 2,000,000.00

Rossi deposited three of the post-dated checks (i.e., No. 72807, No. 79125 and No. 72808) on their maturity dates in Advanced Foundations bank account at the PCI Bank in Makati. Two of the checks were denied payment ostensibly upon Reyes instructions to stop their payment, while the third (i.e., No. 72802) was dishonored for insufficiency of funds.3

Rossi likewise deposited two more checks (i.e., No. 72809 and No. 72801) in Advanced Foundations account at the PCI Bank in Makati, but the checks were returned with the notation Account Closed stamped on them. He did not anymore deposit the three remaining checks on

the assumption that they would be similarly dishonored.4

In the meanwhile, on July 29, 1998, Reyes commenced an action for rescission of contract and damages in the Regional Trial Court in Quezon City (RTC). His complaint, docketed as Civil Case No. Q98-35109 and entitled Teodoro A. Reyes v. Advanced Foundation Construction Systems Corporation, sought judgment declaring the deed of conditional sale "rescinded and of

no further force and effect," and ordering Advanced Foundation to return the P3,000,000.00 downpayment with legal interest from June 4, 1998 until fully paid; and to pay to him attorneys fees, and various kinds and amounts of damages.5

On September 8, 1998, Rossi charged Reyes with five counts of estafa and five counts of violation of Batas Pambansa Blg. 22 in the Office of the City Prosecutor of Makati for the

dishonor of Checks No. 72807, No. 72808, No. 72801, No. 72809 and No. 79125. Another criminal charge for violation of Batas Pambansa Blg. 22 was lodged against Reyes in the Office

of the City Prosecutor of Quezon City for the dishonor of Check No. 72802.6

On September 29, 1998, Reyes submitted his counter-affidavit in the Office of the City Prosecutor of Makati,7 claiming that the checks had not been issued for any valuable consideration; that he had discovered from the start of using the dredging pump involved in the conditional sale that the Caterpillar diesel engine powering the pump had been rated at only 560 horsepower instead of the 1200 horsepower Advanced Foundation had represented to him; that welding works on the pump had neatly concealed several cracks; that on May 6, 1998 he had written to Advanced Foundation complaining about the misrepresentations on the specifications of the pump and demanding documentary proof of Advanced Foundations ownership of the

pump; that he had caused the order to stop the payment of three checks (i.e., No. 72806, No.

72807 and No. 79125); that Advanced Foundation had replied to his letter on May 8, 1998 by saying that the pump had been sold to him on an as is, where is basis; that he had then sent

another letter to Advanced Foundation on May 18, 1998 to reiterate his complaints and the request for proper documentation of ownership; that he had subsequently discovered other hidden defects, prompting him to write another letter; and that instead of attending to his complaints and request, Advanced Foundations lawyers had threatened him with legal action.

At the same time, Reyes assailed the jurisdiction of the Office of the City Prosecutor of Makati over the criminal charges against him on the ground that he had issued the checks in Quezon City; as well as argued that the Office of the City Prosecutor of Makati should suspend the proceedings because of the pendency in the RTC of the civil action for rescission of contract

that posed a prejudicial question as to the criminal proceedings.8

On November 20, 1998, the Assistant City Prosecutor handling the preliminary investigation recommended the dismissal of the charges of estafa and the suspension of the proceedings

relating to the violation of Batas Pambansa Blg. 22 based on a prejudicial question.9

On January 5, 1999, the City Prosecutor of Makati approved the recommendation of the handling Assistant City Prosecutor,10 stating:

WHEREFORE, premises considered, the complaint for Estafa is respectfully recommended to

be dismissed, as upon approval, it is hereby dismissed.

Further, it is respectfully recommended that the proceedings in the charge for Violation of Batas Pambansa Bilang 22 against the respondent be suspended until the prejudicial question raised in Civil Case Q-98-35109 for Rescission of Contract and Damages which is now pending with

the RTC of Quezon City, Branch 224, has been duly resolved.

Rossi appealed the resolution of the City Prosecutor to the Department of Justice, but the

Secretary of Justice, by resolution of July 24, 2001, denied Rossis petition for review.

After the denial of his motion for reconsideration on April 29, 2002, Rossi challenged the resolutions of the Secretary of Justice by petition for certiorari in the CA.

Ruling of the CA

In the petition for certiorari, Rossi insisted that the Secretary of Justice had committed grave abuse of discretion amounting to lack or excess of jurisdiction in upholding the suspension of the criminal proceedings by the City Prosecutor of Makati on account of the existence of a prejudicial question, and in sustaining the dismissal of the complaints for estafa.

On May 30, 2003, the CA promulgated its assailed decision,11 to wit:

WHEREFORE, the foregoing considered, the assailed resolution is hereby MODIFIED and the instant petition is GRANTED in so far as the issue of the existence of prejudicial question is concerned. Accordingly, the order suspending the preliminary investigation in I.S. No. 98-40024-29 is REVERSED and SET ASIDE, and the dismissal of the complaint for estafa is AFFIRMED.

SO ORDERED.

Issues

Hence, this appeal by Reyes.

Reyes asserts that the CA erred in ruling that there was no prejudicial question that warranted the suspension of the criminal proceedings against him; that the petition suffered fatal defects that merited its immediate dismissal; that the CA was wrong in relying on the pronouncements in Balgos, Jr. v. Sandiganbayan12 and Umali v. Intermediate Appellate Court13 because the

factual backgrounds thereat were not similar to that obtaining here; and that the Secretary of

Justice did not commit any grave abuse of discretion amounting to lack or excess of jurisdiction.

In his comment,14 Rossi counters that the petition for review should be outrightly dismissed because of its fatal defect; that the CA did not err in ruling that the action for rescission of

contract did not pose a prejudicial question that would suspend the criminal proceedings.

Reyes submitted a reply,15 declaring that the defect in the affidavit of service attached to his petition for review had been due to oversight; that he had substantially complied with the rules; that there existed a prejudicial question that could affect the extent of his liability in light of Supreme Court Administrative Circular No. 12-2000; and that the CA erred in finding that the

Secretary of Justice committed grave abuse of discretion.

To be resolved is whether or not the civil action for rescission of the contract of sale raised a prejudicial question that required the suspension of the criminal prosecution for violation of Batas Pambansa Blg. 22.

Ruling

The petition for review is without merit.

A prejudicial question generally comes into play in a situation where a civil action and a criminal action are both pending, and there exists in the former an issue that must first be determined before the latter may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case.16 The rationale for the suspension on the ground of a prejudicial question is to avoid

conflicting decisions.17

Two elements that must concur in order for a civil case to be considered a prejudicial question are expressly stated in Section 7, Rule 111 of the 2000 Rules of Criminal Procedure, to wit:

Section 7. Elements of prejudicial question. The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or

not the criminal action may proceed.

In Sabandal v. Tongco,18 the concept of prejudicial question is explained in this wise:

For a civil action to be considered prejudicial to a criminal case as to cause the suspension of the criminal proceedings until the final resolution of the civil, the following requisites must be present: (1) the civil case involves facts intimately related to those upon which the criminal prosecution would be based; (2) in the resolution of the issue or issues raised in the civil action, the guilt or innocence of the accused would necessarily be determined; and (3) jurisdiction to try

said question must be lodged in another tribunal.

If both civil and criminal cases have similar issues or the issue in one is intimately related to the issues raised in the other, then a prejudicial question would likely exist, provided the other element or characteristic is satisfied. It must appear not only that the civil case involves the same facts upon which the criminal prosecution would be based, but also that the resolution of the issues raised in the civil action would be necessarily determinative of the guilt or innocence of the accused. If the resolution of the issue in the civil action will not determine the criminal responsibility of the accused in the criminal action based on the same facts, or there is no necessity "that the civil case be determined first before taking up the criminal case," therefore, the civil case does not involve a prejudicial question. Neither is there a prejudicial question if the

civil and the criminal action can, according to law, proceed independently of each other.

Contending that the rescission of the contract of sale constitutes a prejudicial question, Reyes posits that the resolution of the civil action will be determinative of whether or not he was criminally liable for the violations of Batas Pambansa Blg. 22. He states that if the contract

would be rescinded, his obligation to pay under the conditional deed of sale would be extinguished, and such outcome would necessarily result in the dismissal of the criminal proceedings for the violations of Batas Pambansa Blg. 22.

The action for the rescission of the deed of sale on the ground that Advanced Foundation did not comply with its obligation actually seeks one of the alternative remedies available to a contracting party under Article 1191 of the Civil Code, to wit:

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the

obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfilment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen

fulfilment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing

of a period.

This is understood to be without prejudice to the rights of third persons who have acquired the

thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.

Article 1191 of the Civil Code recognizes an implied or tacit resolutory condition in reciprocal obligations. The condition is imposed by law, and applies even if there is no corresponding agreement thereon between the parties. The explanation for this is that in reciprocal obligations a party incurs in delay once the other party has performed his part of the contract; hence, the party who has performed or is ready and willing to perform may rescind the obligation if the

other does not perform, or is not ready and willing to perform.19

It is true that the rescission of a contract results in the extinguishment of the obligatory relation as if it was never created, the extinguishment having a retroactive effect. The rescission is equivalent to invalidating and unmaking the juridical tie, leaving things in their status before the celebration of the contract.20 However, until the contract is rescinded, the juridical tie and the

concomitant obligations subsist.

To properly appreciate if there is a prejudicial question to warrant the suspension of the criminal actions, reference is made to the elements of the crimes charged. The violation of Batas Pambansa Blg. 22 requires the concurrence of the following elements, namely: (1) the making,

drawing, and issuance of any check to apply for account or for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.21 The issue in the criminal actions upon the violations of Batas Pambansa Blg. 22

is, therefore, whether or not Reyes issued the dishonoured checks knowing them to be without funds upon presentment. On the other hand, the issue in the civil action for rescission is whether or not the breach in the fulfilment of Advanced Foundations obligation warranted the rescission of the conditional sale. If, after trial on the merits in the civil action, Advanced Foundation would be found to have committed material breach as to warrant the rescission of the contract, such result would not necessarily mean that Reyes would be absolved of the criminal responsibility for issuing the dishonored checks because, as the aforementioned elements show, he already committed the violations upon the dishonor of the checks that he had issued at a time when the conditional sale was still fully binding upon the parties. His obligation to fund the checks or to make arrangements for them with the drawee bank should not be tied up to the future event of extinguishment of the obligation under the contract of sale through rescission. Indeed, under Batas Pambansa Blg. 22, the mere issuance of a worthless

check was already the offense in itself. Under such circumstances, the criminal proceedings for the violation of Batas Pambansa Blg. 22 could proceed despite the pendency of the civil action

for rescission of the conditional sale.

Accordingly, we agree with the holding of the CA that the civil action for the rescission of contract was not determinative of the guilt or innocence of Reyes. We consider the exposition by the CA of its reasons to be appropriate enough, to wit:

x x x x

We find merit in the petition.

A careful perusal of the complaint for rescission of contract and damages reveals that the causes of action advanced by respondent Reyes are the alleged misrepresentation committed by the petitioner and AFCSC and their alleged failure to comply with his demand for proofs of ownership. On one hand, he posits that his consent to the contract was vitiated by the fraudulent act of the company in misrepresenting the condition and quality of the dredging pump. Alternatively, he claims that the company committed a breach of contract which is a ground for the rescission thereof. Either way, he in effect admits the validity and the binding

effect of the deed pending any adjudication which nullifies the same.

Indeed, under the Jaw on contracts, vitiated consent does not make a contract unenforceable but merely voidable, the remedy of which would be to annul the contract since voidable

contracts produce legal effects until they are annulled. On the other hand, rescission of contracts in case of breach pursuant to Article 1191 of the Civil Code of the Philippines also presupposes a valid contract unless rescinded or annulled.

As defined, a prejudicial question is one that arises in a case, the resolution of which is a logical antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal. The prejudicial question must be determinative of the case before the court but the

jurisdiction to try and resolve the question must be lodged in another court or tribunal.

It is a question based on a fact distinct and separate from the crime but so intimately connected with it that it determines the guilt or innocence of the accused, and for it to suspend the criminal action, it must appear not only that said case involves facts intimately related to those upon which the criminal prosecution would be based but also that in the resolution of the issue or issues raised in the civil case, the guilt or innocence of the accused would necessarily be determined. It comes into play generally in a situation where a civil action and a criminal action are both pending and there exists in the former an issue which must be preemptively resolved before the criminal action may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the

criminal case.

In this light, it is clear that the pendency of the civil case does not bar the continuation of the proceedings in the preliminary investigation on the ground that it poses a prejudicial question. Considering that the contracts are deemed to be valid until rescinded, the consideration and obligatory effect thereof are also deemed to have been validly made, thus demandable. Consequently, there was no failure of consideration at the time when the subject checks were dishonored. (Emphasis supplied)

x x x x

WHEREFORE, the Court DENIES the petition for review; AFFIRMS the decision the Court of Appeals promulgated on May 30, 2003; and DIRECTS the petitioner to pay the costs of suit.

SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 166836 September 4, 2013

SAN MIGUEL PROPERTIES, INC., PETITIONER,

vs. SEC. HERNANDO B. PEREZ, ALBERT C. AGUIRRE, TEODORO B. ARCENAS, JR., MAXY

S. ABAD, JAMES G. BARBERS, STEPHEN N. SARINO, ENRIQUE N. ZALAMEA, JR., MARIANO M. MARTIN, ORLANDO O. SAMSON, CATHERINE R. AGUIRRE, AND ANTONIO V. AGCAOILI, RESPONDENTS.

D E C I S I O N

BERSAMIN, J.:

The pendency of an administrative case for specific performance brought by the buyer of residential subdivision lots in the Housing and Land Use Regulatory Board (HLURB) to compel the seller to deliver the transfer certificates of title (TCTs) of the fully paid lots is properly considered a ground to suspend a criminal prosecution for violation of Section 25 of Presidential Decree No. 9571 on the ground of a prejudicial question. The administrative determination is a

logical antecedent of the resolution of the criminal charges based on non-delivery of the TCTs.

Antecedents

Petitioner San Miguel Properties Inc. (San Miguel Properties), a domestic corporation engaged in the real estate business, purchased in 1992, 1993 and April 1993 from B.F. Homes, Inc. (BF Homes), then represented by Atty. Florencio B. Orendain (Orendain) as its duly authorized rehabilitation receiver appointed by the Securities and Exchange Commission (SEC),2 130 residential lots situated in its subdivision BF Homes Paraaque, containing a total area of 44,345 square meters for the aggregate price of P106,248,000.00. The transactions were embodied in three separate deeds of sale.3 The TCTs covering the lots bought under the first and second deeds were fully delivered to San Miguel Properties, but 20 TCTs covering 20 of the 41 parcels of land with a total area of 15,565 square meters purchased under the third deed of sale, executed in April 1993 and for which San Miguel Properties paid the full price of

P39,122,627.00, were not delivered to San Miguel Properties.

On its part, BF Homes claimed that it withheld the delivery of the 20 TCTs for parcels of land purchased under the third deed of sale because Atty. Orendain had ceased to be its rehabilitation receiver at the time of the transactions after being meanwhile replaced as receiver by FBO Network Management, Inc. on May 17, 1989 pursuant to an order from the SEC.4

BF Homes refused to deliver the 20 TCTs despite demands. Thus, on August 15, 2000, San Miguel Properties filed a complaint-affidavit in the Office of the City Prosecutor of Las Pias City (OCP Las Pias) charging respondent directors and officers of BF Homes with non-delivery of titles in violation of Section 25, in relation to Section 39, both of Presidential Decree No. 957

(I.S. No. 00-2256).5

At the same time, San Miguel Properties sued BF Homes for specific performance in the HLURB (HLURB Case No. REM-082400-11183),6 praying to compel BF Homes to release the

20 TCTs in its favor.

In their joint counter-affidavit submitted in I.S. No. 00-2256,7 respondent directors and officers of BF Homes refuted San Miguel Properties assertions by contending that: (a) San Miguel Properties claim was not legally demandable because Atty. Orendain did not have the authority to sell the 130 lots in 1992 and 1993 due to his having been replaced as BF Homes rehabilitation receiver by the SEC on May 17, 1989; (b) the deeds of sale conveying the lots were irregular for being undated and unnotarized; (c) the claim should have been brought to the

SEC because BF Homes was under receivership; (d) in receivership cases, it was essential to suspend all claims against a distressed corporation in order to enable the receiver to effectively exercise its powers free from judicial and extra-judicial interference that could unduly hinder the rescue of the distressed company; and (e) the lots involved were under custodia legis in view of the pending receivership proceedings, necessarily stripping the OCP Las Pias of the

jurisdiction to proceed in the action.

On October 10, 2000, San Miguel Properties filed a motion to suspend proceedings in the OCP Las Pias,8 citing the pendency of BF Homes receivership case in the SEC. In its comment/opposition, BF Homes opposed the motion to suspend. In the meantime, however, the SEC terminated BF Homes receivership on September 12, 2000, prompting San Miguel Properties to file on October 27, 2000 a reply to BF Homes comment/opposition coupled with a motion to withdraw the sought suspension of proceedings due to the intervening termination of

the receivership.9

On October 23, 2000, the OCP Las Pias rendered its resolution,10 dismissing San Miguel Properties criminal complaint for violation of Presidential Decree No. 957 on the ground that no action could be filed by or against a receiver without leave from the SEC that had appointed him; that the implementation of the provisions of Presidential Decree No. 957 exclusively pertained under the jurisdiction of the HLURB; that there existed a prejudicial question necessitating the suspension of the criminal action until after the issue on the liability of the distressed BF Homes was first determined by the SEC en banc or by the HLURB; and that no prior resort to administrative jurisdiction had been made; that there appeared to be no probable cause to indict respondents for not being the actual signatories in the three deeds of sale.

On February 20, 2001, the OCP Las Pias denied San Miguel Properties motion for reconsideration filed on November 28, 2000, holding that BF Homes directors and off icers could not be held liable for the non-delivery of the TCTs under Presidential Decree No. 957 without a definite ruling on the legality of Atty. Orendains actions; and that the criminal liability would attach only after BF Homes did not comply with a directive of the HLURB directing it to

deliver the titles.11

San Miguel Properties appealed the resolutions of the OCP Las Pias to the Department of

Justice (DOJ), but the DOJ Secretary denied the appeal on October 15, 2001, holding:

After a careful review of the evidence on record, we find no cogent reason to disturb the ruling of the City Prosecutor of Las Pias City. Established jurisprudence supports the position taken

by the City Prosecutor concerned.

There is no dispute that aside from the instant complaint for violation of PD 957, there is still pending with the Housing and Land Use Resulatory Board (HLURB, for short) a complaint for specific performance where the HLURB is called upon to inquire into, and rule on, the validity of the sales transactions involving the lots in question and entered into by Atty. Orendain for and in

behalf of BF Homes.

As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA 72, the Supreme Court had ruled that the HLURB has exclusive jurisdiction over cases involving real estate business and practices under PD 957. This is reiterated in the subsequent cases of Union Bank of the Philippines versus HLURB, G.R. [No.] 953364, June 29, 1992 and C.T. Torres Enterprises vs.

Hilionada, 191 SCRA 286.

The said ruling simply means that unless and until the HLURB rules on the validity of the transactions involving the lands in question with specific reference to the capacity of Atty. Orendain to bind BF Homes in the said transactions, there is as yet no basis to charge criminally respondents for non-delivery of the subject land titles. In other words, complainant cannot invoke the penal provision of PD 957 until such time that the HLURB shall have ruled

and decided on the validity of the transactions involving the lots in question.

WHEREFORE, the appeal is hereby DENIED.

SO ORDERED.12 (Emphasis supplied)

The DOJ eventually denied San Miguel Properties motion for reconsideration.13

Ruling of the CA

Undaunted, San Miguel Properties elevated the DOJs resolutions to the CA on certiorari and mandamus (C.A.-G.R. SP No. 73008), contending that respondent DOJ Secretary had acted with grave abuse in denying their appeal and in refusing to charge the directors and officers of BF Homes with the violation of Presidential Decree No. 957. San Miguel Properties submitted the issue of whether or not HLURB Case No. REM-082400-11183 presented a prejudicial question that called for the suspension of the criminal action for violation of Presidential Decree

No. 957.

In its assailed decision promulgated on February 24, 2004 in C.A.-G.R. SP No. 73008,14 the CA

dismissed San Miguel Properties petition, holding and ruling as follows:

From the foregoing, the conclusion that may be drawn is that the rule on prejudicial question generally applies to civil and criminal actions only.

However, an exception to this rule is provided in Quiambao vs. Osorio cited by the respondents. In this case, an issue in an administrative case was considered a prejudicial question to the resolution of a civil case which, consequently, warranted the suspension of the latter until after

termination of the administrative proceedings.

Quiambao vs. Osorio is not the only instance when the Supreme Court relaxed the application of the rule on prejudicial question.

In Tamin vs. CA involving two (2) civil actions, the Highest Court similarly applied the rule on prejudicial question when it directed petitioner therein to put up a bond for just compensation should the demolition of private respondents building proved to be illegal as a result of a pending cadastral suit in another tribunal.

City of Pasig vs. COMELEC is yet another exception where a civil action involving a boundary dispute was considered a prejudicial question which must be resolved prior to an administrative

proceeding for the holding of a plebiscite on the affected areas.

In fact, in Vidad vs. RTC of Negros Oriental, Br. 42, it was ruled that in the interest of good order, courts can suspend action in one case pending determination of another case closely interrelated or interlinked with it.

It thus appears that public respondent did not act with grave abuse of discretion x x x when he applied the rule on prejudicial question to the instant proceedings considering that the issue on the validity of the sale transactions x x x by x x x Orendain in behalf of BF Homes, Inc., is closely intertwined with the purported criminal culpability of private respondents, as officers/directors of BF Homes, Inc., arising from their failure to deliver the titles of the parcels of

land included in the questioned conveyance.

All told, to sustain the petitioners theory that the result of the HLURB proceedings is not determinative of the criminal liability of private respondents under PD 957 would be to espouse an absurdity. If we were to assume that the HLURB finds BFHI under no obligation to delve the subject titles, it would be highly irregular and contrary to the ends of justice to pursue a criminal case against private respondents for the non-delivery of certificates of title which they are not

under any legal obligation to turn over in the first place. (Bold emphasis supplied)

On a final note, absent grave abuse of discretion on the part of the prosecutorial arm of the government as represented by herein public respondent, courts will not interfere with the discretion of a public prosecutor in prosecuting or dismissing a complaint filed before him. A public prosecutor, by the nature of his office, is under no compulsion to file a criminal information where no clear legal justification has been shown, and no sufficient evidence of guilt

nor prima facie case has been established by the complaining party.

WHEREFORE, premises considered, the instant Petition for Certiorari and Mandamus is hereby DENIED. The Resolutions dated 15 October 2001 and 12 July 2002 of the Department of

Justice are AFFIRMED.

SO ORDERED. 15

The CA denied San Miguel Properties motion for reconsideration on January 18, 2005.16

Issues

Aggrieved, San Miguel Properties is now on appeal, raising the following for consideration and

resolution, to wit:

THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS AND REVERSIBLE ERRORS WHEN IT DISMISSED PETITIONERS CERTIORARI AND MANDAMUS PETITION TO ORDER AND DIRECT RESPONDENT SECRETARY TO INDICT RESPONDENTS FOR

VIOLATION OF SECTION 25, PD. 957 IN THAT:

THE OBLIGATION OF PRIVATE RESPONDENTS TO DELIVER TO PETITIONER THE TITLES TO 20 FULLY-PAID LOTS IS MANDATED BY SECTION 25, PD 957. IN FACT, THE OFFICE OF THE PRESIDENT HAD DULY CONFIRMED THE SAME PER ITS DECISION DATED 27 JANUARY 2005 IN O.P. CASE NO. 03-E-203, ENTITLED "SMPI V. BF HOMES,

INC.".

A FORTIORI, PRIVATE RESPONDENTS FAILURE AND/OR REFUSAL TO DELIVER TO PETITIONER THE SUBJECT TITLES CONSTITUTES CRIMINAL OFFENSE PER SECTIONS 25 AND 39, PD 957 FOR WHICH IT IS THE MINISTERIAL DUTY OF RESPONDENT

SECRETARY TO INDICT PRIVATE RESPONDENTS THEREFOR.

IN ANY EVENT, THE HLURB CASE DOES NOT PRESENT A "PREJUDICIAL QUESTION" TO THE SUBJECT CRIMINAL CASE SINCE THE FORMER INVOLVES AN ISSUE SEPARATE AND DISTINCT FROM THE ISSUE INVOLVED IN THE LATTER. CONSEQUENTLY, THE HLURB CASE HAS NO CORRELATION, TIE NOR LINKAGE TO THE PRESENT CRIMINAL

CASE WHICH CAN PROCEED INDEPENDENTLY THEREOF.

IN FACT, THE CRIMINAL CULPABILITY OF PRIVATE RESPONDENTS EMANATE FROM THEIR MALA PROHIBITA NON-DELIVERY OF THE TITLES TO TWENTY (20) FULLY-PAID PARCELS OF LAND TO PETITIONER, AND NOT FROM THEIR NON-COMPLIANCE WITH

THE HLURBS RULING IN THE ADMINISTRATIVE CASE.

NONETHELESS, BY DECREEING THAT PETITIONERS CRIMINAL COMPLAINT IS PREMATURE, BOTH THE COURT OF APPEALS AND RESPONDENT SECRETARY HAD IMPLIEDLY ADMITTED THE EXISTENCE OF SUFFICIENT PROBABLE CAUSE AGAINST

PRIVATE RESPONDENTS FOR THE CRIME CHARGED.17

It is relevant at this juncture to mention the outcome of the action for specific performance and damages that San Miguel Properties instituted in the HLURB simultaneously with its filing of the complaint for violation of Presidential Decree No. 957. On January 25, 2002, the HLURB Arbiter ruled that the HLURB was inclined to suspend the proceedings until the SEC resolved the issue of Atty. Orendains authority to enter into the transactions in BF Homes behalf, because the final resolution by the SEC was a logical antecedent to the determination of the issue involved in the complaint before the HLURB. Upon appeal, the HLURB Board of Commissioners (HLURB Board), citing the doctrine of primary jurisdiction, affirmed the HLURB Arbiters decision, holding that although no prejudicial question could arise, strictly speaking, if one case was civil and the other administrative, it nonetheless opted to suspend its action on the cases pending the final

outcome of the administrative proceeding in the interest of good order.18

Not content with the outcome, San Miguel Properties appealed to the Office of the President (OP), arguing that the HLURB erred in suspending the proceedings. On January 27, 2004, the

OP reversed the HLURB Boards ruling, holding thusly:

The basic complaint in this case is one for specific performance under Section 25 of the Presidential Decree (PD) 957 "The Subdivision and Condominium Buyers Protective."

As early as August 1987, the Supreme Court already recognized the authority of the HLURB, as successor agency of the National Housing Authority (NHA), to regulate, pursuant to PD 957, in relation to PD 1344, the real estate trade, with exclusive original jurisdiction to hear and decide cases "involving specific performance of contractual and statutory obligation filed by buyers of subdivision lots against the owner, developer, dealer, broker or salesman," the HLURB, in the exercise of its adjudicatory powers and functions, "must interpret and apply contracts, determine the rights of the parties under these contracts and award[s] damages whenever appropriate."

Given its clear statutory mandate, the HLURBs decision to await for some forum to decide if ever one is forthcoming the issue on the authority of Orendain to dispose of subject lots before it peremptorily resolves the basic complaint is unwarranted, the issues thereon having been joined and the respective position papers and the evidence of the parties having been submitted. To us, it behooved the HLURB to adjudicate, with the usual dispatch, the right and obligation of the parties in line with its own appreciation of the obtaining facts and applicable

law. To borrow from Mabubha Textile Mills Corporation vs. Ongpin, it does not have to rely on

the finding of others to discharge this adjudicatory functions.19

After its motion for reconsideration was denied, BF Homes appealed to the CA (C.A.-G.R. SP No. 83631), raising as issues: (a) whether or not the HLURB had the jurisdiction to decide with finality the question of Atty. Orendains authority to enter into the transaction with San Miguel Properties in BF Homes behalf, and rule on the rights and obligations of the parties to the contract; and (b) whether or not the HLURB properly suspended the proceedings until the SEC resolved with finality the matter regarding such authority of Atty. Orendain.

The CA promulgated its decision in C.A.-G.R. SP No. 83631,20 decreeing that the HLURB, not the SEC, had jurisdiction over San Miguel Properties complaint. It affirmed the OPs decision and ordered the remand of the case to the HLURB for further proceedings on the ground that the case involved matters within the HLURBs competence and expertise pursuant to the doctrine of primary jurisdiction, viz:

[T]he High Court has consistently ruled that the NHA or the HLURB has jurisdiction over complaints arising from contracts between the subdivision developer and the lot buyer or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations.

Hence, the HLURB should take jurisdiction over respondents complaint because it pertains to matters within the HLURBs competence and expertise. The proceedings before the HLURB should not be suspended.

While We sustain the Office of the President, the case must be remanded to the HLURB. This is in recognition of the doctrine of primary jurisdiction. The fairest and most equitable course to take under the circumstances is to remand the case to the HLURB for the proper presentation of

evidence.21

Did the Secretary of Justice commit grave abuse of discretion in upholding the dismissal of San Miguel Properties criminal complaint for violation of Presidential Decree No. 957 for lack of probable cause and for reason of a prejudicial question?

The question boils down to whether the HLURB administrative case brought to compel the delivery of the TCTs could be a reason to suspend the proceedings on the criminal complaint for the violation of Section 25 of Presidential Decree No. 957 on the ground of a prejudicial question.

Ruling of the Court

The petition has no merit.

1.

Action for specific performance, even if pending in the HLURB, an administrative agency, raises a prejudicial question BF Homes posture that the administrative case for specific performance in the HLURB posed a prejudicial question that must first be determined before the criminal

case for violation of Section 25 of Presidential Decree No. 957 could be resolved is correct.

A prejudicial question is understood in law to be that which arises in a case the resolution of which is a logical antecedent of the issue involved in the criminal case, and the cognizance of which pertains to another tribunal. It is determinative of the criminal case, but the jurisdiction to try and resolve it is lodged in another court or tribunal. It is based on a fact distinct and separate from the crime but is so intimately connected with the crime that it determines the guilt or innocence of the accused.22 The rationale behind the principle of prejudicial question is to avoid conflicting decisions.23 The essential elements of a prejudicial question are provided in Section 7, Rule 111 of the Rules of Court, to wit: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.

The concept of a prejudicial question involves a civil action and a criminal case. Yet, contrary to San Miguel Properties submission that there could be no prejudicial question to speak of because no civil action where the prejudicial question arose was pending, the action for specif ic performance in the HLURB raises a prejudicial question that sufficed to suspend the proceedings determining the charge for the criminal violation of Section 2524 of Presidential Decree No. 957. This is true simply because the action for specific performance was an action civil in nature but could not be instituted elsewhere except in the HLURB, whose jurisdiction over the action was exclusive and original.25

The determination of whether the proceedings ought to be suspended because of a prejudicial question rested on whether the facts and issues raised in the pleadings in the specific performance case were so related with the issues raised in the criminal complaint for the violation of Presidential Decree No. 957, such that the resolution of the issues in the former would be determinative of the question of guilt in the criminal case. An examination of the nature

of the two cases involved is thus necessary.

An action for specific performance is the remedy to demand the exact performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon by a party bound to fulfill it.26 Evidently, before the remedy of specific performance is availed of, there must first be a breach of the contract.27 The remedy has its roots in Article 1191 of the Civil

Code, which reads:

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen

fulfillment, if the latter should become impossible. x x x (Emphasis supplied)

Accordingly, the injured party may choose between specific performance or rescission with damages. As presently worded, Article 1191 speaks of the remedy of rescission in reciprocal obligations within the context of Article 1124 of the former Civil Code which used the term resolution. The remedy of resolution applied only to reciprocal obligations, such that a partys breach of the contract equated to a tacit resolutory condition that entitled the injured party to rescission. The present article, as in the former one, contemplates alternative remedies for the injured party who is granted the option to pursue, as principal actions, either the rescission or

the specific performance of the obligation, with payment of damages in either case.28

On the other hand, Presidential Decree No. 957 is a law that regulates the sale of subdivision lots and condominiums in view of the increasing number of incidents wherein "real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly" the basic requirements and amenities, as well as of reports of alarming magnitude of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators,29 such as failure to deliver titles to the buyers or titles free from liens and encumbrances. Presidential Decree No. 957 authorizes the suspension and revocation of the registration and license of the real estate subdivision owners, developers, operators, and/or sellers in certain instances, as well as provides the procedure to be observed in such instances; it prescribes administrative fines and

other penalties in case of violation of, or non-compliance with its provisions.

Conformably with the foregoing, the action for specific performance in the HLURB would determine whether or not San Miguel Properties was legally entitled to demand the delivery of the remaining 20 TCTs, while the criminal action would decide whether or not BF Homes directors and officers were criminally liable for withholding the 20 TCTs. The resolution of the former must obviously precede that of the latter, for should the HLURB hold San Miguel Properties to be not entitled to the delivery of the 20 TCTs because Atty. Orendain did not have the authority to represent BF Homes in the sale due to his receivership having been terminated by the SEC, the basis for the criminal liability for the violation of Section 25 of Presidential

Decree No. 957 would evaporate, thereby negating the need to proceed with the criminal case.

Worthy to note at this juncture is that a prejudicial question need not conclusively resolve the guilt or innocence of the accused. It is enough for the prejudicial question to simply test the sufficiency of the allegations in the information in order to sustain the further prosecution of the criminal case. A party who raises a prejudicial question is deemed to have hypothetically admitted that all the essential elements of the crime have been adequately alleged in the information, considering that the Prosecution has not yet presented a single piece of evidence on the indictment or may not have rested its case. A challenge to the allegations in the information on the ground of prejudicial question is in effect a question on the merits of the criminal charge through a non-criminal suit.30

2.

Doctrine of primary jurisdiction is applicable

That the action for specific performance was an administrative case pending in the HLURB, instead of in a court of law, was of no consequence at all. As earlier mentioned, the action for specific performance, although civil in nature, could be brought only in the HLURB. This situation conforms to the doctrine of primary jurisdiction. There has been of late a proliferation of administrative agencies, mostly regulatory in function. It is in favor of these agencies that the doctrine of primary jurisdiction is frequently invoked, not to defeat the resort to the judicial adjudication of controversies but to rely on the expertise, specialized skills, and knowledge of such agencies in their resolution. The Court has observed that one thrust of the proliferation is that the interpretation of contracts and the determination of private rights under contracts are no

longer a uniquely judicial function exercisable only by the regular courts.31

The doctrine of primary jurisdiction has been increasingly called into play on matters demanding the special competence of administrative agencies even if such matters are at the same time within the jurisdiction of the courts. A case that requires for its determination the expertise,

specialized skills, and knowledge of some administrative board or commission because it involves technical matters or intricate questions of fact, relief must first be obtained in an appropriate administrative proceeding before a remedy will be supplied by the courts although the matter comes within the jurisdiction of the courts. The application of the doctrine does not call for the dismissal of the case in the court but only for its suspension until after the matters

within the competence of the administrative body are threshed out and determined.32

To accord with the doctrine of primary jurisdiction, the courts cannot and will not determine a controversy involving a question within the competence of an administrative tribunal, the controversy having been so placed within the special competence of the administrative tribunal under a regulatory scheme. In that instance, the judicial process is suspended pending referral to the administrative body for its view on the matter in dispute. Consequently, if the courts cannot resolve a question that is within the legal competence of an administrative body prior to the resolution of that question by the latter, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative agency to ascertain technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered,

suspension or dismissal of the action is proper.33

3.

Other submissions of petitioner are unwarranted

It is not tenable for San Miguel Properties to argue that the character of a violation of Section 25 of Presidential Decree No. 957 as malum prohibitum, by which criminal liability attached to BF Homes directors and officers by the mere failure to deliver the TCTs, already rendered the suspension unsustainable.34 The mere fact that an act or omission was malum prohibitum did not do away with the initiative inherent in every court to avoid an absurd result by means of rendering a reasonable interpretation and application of the procedural law. Indeed, the procedural law must always be given a reasonable construction to preclude absurdity in its application.35 Hence, a literal application of the principle governing prejudicial questions is to be eschewed if such application would produce unjust and absurd results or unreasonable

consequences.

San Miguel Properties further submits that respondents could not validly raise the prejudicial question as a reason to suspend the criminal proceedings because respondents had not themselves initiated either the action for specific performance or the criminal action.1wphi1 It

contends that the defense of a prejudicial question arising from the filing of a related case could

only be raised by the party who filed or initiated said related case.

The submission is unfounded. The rule on prejudicial question makes no distinction as to who is allowed to raise the defense. Ubi lex non distinguit nec nos distinguere debemos. When the law makes no distinction, we ought not to distinguish.36

WHEREFORE, the Court AFFIRMS the decision promulgated on February 24, 2004 by the

Court of Appeals in CA-G.R. SP NO. 73008; and ORDERS petitioner to pay the costs of suit.

SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 183805 July 3, 2013

JAMES WALTER P. CAPILI, PETITIONER, vs. PEOPLE OF THE PHILIPPINES AND SHIRLEY TISMO-CAPILI, RESPONDENTS.

D E C I S I O N

PERALTA, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision1 dated February 1, 2008 and Resolution2 dated July 24, 2008 of the Court of Appeals (CA) in CA-G.R. CR No. 30444.

The factual antecedents are as follows:

On June 28, 2004, petitioner was charged with the crime of bigamy before the Regional Trial Court (RTC) of Pasig City in an Information which reads:

On or about December 8, 1999, in Pasig City, and within the jurisdiction of this Honorable Court, the accused being previously united in lawful marriage with Karla Y. Medina-Capili and without said marriage having been legally dissolved or annulled, did then and there willfully, unlawfully and feloniously contract a second marriage with Shirley G. Tismo, to the damage and prejudice

of the latter.

Contrary to law.3

Petitioner thereafter filed a Motion to Suspend Proceedings alleging that: (1) there is a pending civil case for declaration of nullity of the second marriage before the RTC of Antipolo City filed by Karla Y. Medina-Capili; (2) in the event that the marriage is declared null and void, it would exculpate him from the charge of bigamy; and (3) the pendency of the civil case for the declaration of nullity of the second marriage serves as a prejudicial question in the instant

criminal case.

Consequently, the arraignment and pre-trial were reset by the RTC of Pasig City, in view of the filing of the Motion to Suspend Proceedings filed by petitioner.

In the interim, the RTC of Antipolo City rendered a decision declaring the voidness or incipient invalidity of the second marriage between petitioner and private respondent on the ground that a subsequent marriage contracted by the husband during the lifetime of the legal wife is void from

the beginning.

Thereafter, the petitioner accused filed his Manifestation and Motion (to Dismiss) praying for the dismissal of the criminal case for bigamy filed against him on the ground that the second marriage between him and private respondent had already been declared void by the RTC.

In an Order4 dated July 7, 2006, the RTC of Pasig City granted petitioners Manifestation and Motion to Dismiss, to wit:

The motion is anchored on the allegation that this case should be dismissed as a decision dated December 1, 2004 had already been rendered by the Regional Trial Court of Antipolo City, Branch 72 in Civil Case No. 01-6043 (entitled: "Karla Medina-Capili versus James Walter P. Capili and Shirley G. Tismo," a case for declaration of nullity of marriage) nullifying the second marriage between James Walter P. Capili and Shirley G. Tismo and said decision is already

final.

In the opposition filed by the private prosecutor to the motion, it was stated, among others, that the issues raised in the civil case are not similar or intimately related to the issue in this above-captioned case and that the resolution of the issues in said civil case would not determine

whether or not the criminal action may proceed.

WHEREFORE, after a judicious evaluation of the issue and arguments of the parties, this Court is of the humble opinion that there is merit on the Motion to dismiss filed by the accused as it appears that the second marriage between James Walter P. Capili and Shirley G. Tismo had already been nullified by the Regional Trial Court, Branch 72 of Antipolo City which has declared "the voidness, non-existent or incipient invalidity" of the said second marriage. As such, this Court submits that there is no more bigamy to speak of.

SO ORDERED.

Aggrieved, private respondent filed an appeal before the CA.

Thus, in a Decision5 dated February 1, 2008, the CA reversed and set aside the RTCs decision. The fallo reads:

WHEREFORE, premises considered, the Order dated 07 July 2006 of the Regional Trial Court of Pasig City, Branch 152 in Crim. Case No. 128370 is REVERSED and SET ASIDE. The case

is remanded to the trial court for further proceedings. No costs.

SO ORDERED.6

Petitioner then filed a Motion for Reconsideration against said decision, but the same was denied in a Resolution[7] dated July 24, 2008.

Accordingly, petitioner filed the present petition for review on certiorari alleging that:

THERE IS NO LEGAL BASIS FOR THE COURT OF APPEALS TO DISREGARD EXISTING JURISPRUDENCE PRONOUNCED BY THIS HONORABLE SUPREME COURT AND TO REVERSE THE ORDER DATED JULY 7, 2006 OF THE TRIAL COURT (REGIONAL TRIAL COURT, PASIG CITY, BRANCH 152) ISSUED IN CRIMINAL CASE NO. 128370 GRANTING THE MOTION TO DISMISS THE CASE OF

BIGAMY AGAINST PETITIONER, INASMUCH AS THE ISSUANCE OF THE SAID ORDER IS BASED ON THE FINDINGS AND/OR FACTS OF THE CASE IN THE DECISION OF THE REGIONAL TRIAL COURT OF ANTIPOLO CITY, BRANCH 72, IN CIVIL CASE NO. 01-6043 AND THE CONCLUDING AND DISPOSITIVE PORTION IN THE SAID DECISION WHICH STATES THAT, AFTER PERUSAL OF THE EVIDENCE ON RECORD AND THE TESTIMONIES OF WITNESSES X X X, THE MARRIAGE BETWEEN PETITIONER JAMES WALTER P. CAPILI AND PRIVATE RESPONDENT

SHIRLEY G. TISMO, IS HEREBY NULL AND VOID.

THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE DECLARATION OF NULLITY OF MARRIAGE BETWEEN PETITIONER JAMES WALTER P. CAPILI AND SHIRLEY G. TISMO BY THE REGIONAL TRIAL COURT OF ANTIPOLO CITY, BRANCH 72 IN ITS DECISION IN CIVIL CASE NO. 01-6043, IS ON THE GROUND THAT IT IS BIGAMOUS IN NATURE, DESPITE THE ABSENCE OF ANY SUCH FINDINGS OR FACTS ON WHICH IT IS BASED IN VIOLATION OF ARTICLE VIII, SECTION 14 OF THE 1987 CONSTITUTION, AND IN CONCLUDING THAT THE SAID DECLARATION OF NULLITY OF MARRIAGE IS NOT A GROUND FOR DISMISSAL OF THE BIGAMY CASE AGAINST THE PETITIONER, WHICH RULING IS NOT IN ACCORDANCE WITH THE FACTS OF THE CASE OF THE SAID DECISION AND WHICH IS CONTRARY TO APPLICABLE LAWS AND ESTABLISHED JURISPRUDENCE.

THE CASE OF TENEBRO V. COURT OF APPEALS SPEAKS FOR ITSELF. IT IS AN EXCEPTION TO EXISTING JURISPRUDENCE INVOLVING DECLARATION OF NULLITY OF MARRIAGE AND IS APPLICABLE ONLY TO THE SET OF FACTS IN THE SAID CASE, AND THE GROUND FOR DECLARATION OF NULLITY OF MARRIAGE IS PSYCHOLOGICAL INCAPACITY, HENCE, THERE IS NO LEGAL BASIS FOR ABANDONING EXISTING JURISPRUDENCE AS WHERE IN THE INSTANT CASE THE GROUND FOR DECLARATION OF NULLITY OF MARRIAGE IS VIOLATIVE OF ARTICLE 3 IN RELATION TO ARTICLE 4 OF THE FAMILY CODE.

THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE USE BY RESPONDENT SHIRLEY G. TISMO OF THE SURNAME "CAPILI" IS ILLEGAL INASMUCH AS THE DECISION OF THE REGIONAL TRIAL COURT OF ANTIPOLO CITY, BRANCH 72 IN CIVIL CASE NO. 01-6043 DECLARING NULL AND VOID THE MARRIAGE BETWEEN JAMES WALTER P. CAPILI AND SHIRLEY G. TISMO HAD LONG BECOME FINAL AND UNAPPEALABLE AS OF THE DATE OF THE SAID DECISION ON DECEMBER 1, 2004 AND DULY RECORDED IN THE RECORDS OF ENTRIES IN THE CORRESPONDING BOOK IN THE OFFICE OF THE CIVIL

REGISTRAR OF PASIG CITY AND THE NATIONAL STATISTICS OFFICE.8

In essence, the issue is whether or not the subsequent declaration of nullity of the second

marriage is a ground for dismissal of the criminal case for bigamy.

We rule in the negative.

Article 349 of the Revised Penal Code defines and penalizes the crime of bigamy as follows:

Art. 349. Bigamy. The penalty of prision mayor shall be imposed upon any person who shall contract a second or subsequent marriage before the former marriage has been legally dissolved, or before the absent spouse has been declared presumptively dead by means of a

judgment rendered in the proper proceedings.

The elements of the crime of bigamy, therefore, are: (1) the offender has been legally married; (2) the marriage has not been legally dissolved or, in case his or her spouse is absent, the absent spouse could not yet be presumed dead according to the Civil Code; (3) that he contracts a second or subsequent marriage; and (4) that the second or subsequent marriage

has all the essential requisites for validity.9

In the present case, it appears that all the elements of the crime of bigamy were present when

the Information was filed on June 28, 2004.

It is undisputed that a second marriage between petitioner and private respondent was contracted on December 8, 1999 during the subsistence of a valid first marriage between petitioner and Karla Y. Medina-Capili contracted on September 3, 1999. Notably, the RTC of Antipolo City itself declared the bigamous nature of the second marriage between petitioner and private respondent. Thus, the subsequent judicial declaration of the second marriage for being bigamous in nature does not bar the prosecution of petitioner for the crime of bigamy.

Jurisprudence is replete with cases holding that the accused may still be charged with the crime of bigamy, even if there is a subsequent declaration of the nullity of the second marriage, so

long as the first marriage was still subsisting when the second marriage was celebrated.

In Jarillo v. People,10 the Court affirmed the accuseds conviction for bigamy ruling that the crime of bigamy is consummated on the celebration of the subsequent marriage without the

previous one having been judicially declared null and void, viz.:

The subsequent judicial declaration of the nullity of the first marriage was immaterial because prior to the declaration of nullity, the crime had already been consummated. Moreover, petitioners assertion would only delay the prosecution of bigamy cases considering that an accused could simply file a petition to declare his previous marriage void and invoke the

pendency of that action as a prejudicial question in the criminal case. We cannot allow that.

The outcome of the civil case for annulment of petitioners marriage to [private complainant] had no bearing upon the determination of petitioners innocence or guilt in the criminal case for bigamy, because all that is required for the charge of bigamy to prosper is that the first marriage

be subsisting at the time the second marriage is contracted.

Thus, under the law, a marriage, even one which is void or voidable, shall be deemed valid until declared otherwise in a judicial proceeding. In this case, even if petitioner eventually obtained a declaration that his first marriage was void ab initio, the point is, both the first and the second marriage were subsisting before the first marriage was annulled.11

In like manner, the Court recently upheld the ruling in the aforementioned case and ruled that what makes a person criminally liable for bigamy is when he contracts a second or subsequent marriage during the subsistence of a valid first marriage. It further held that the parties to the marriage should not be permitted to judge for themselves its nullity, for the same must be submitted to the judgment of competent courts and only when the nullity of the marriage is so

declared can it be held as void, and so long as there is no such declaration the presumption is that the marriage exists. Therefore, he who contracts a second marriage before the judicial declaration of the first marriage assumes the risk of being prosecuted for bigamy.12

Finally, it is a settled rule that the criminal culpability attaches to the offender upon the commission of the offense, and from that instant, liability appends to him until extinguished as provided by law.13 It is clear then that the crime of bigamy was committed by petitioner from the time he contracted the second marriage with private respondent. Thus, the finality of the judicial declaration of nullity of petitioners second marriage does not impede the filing of a criminal charge for bigamy against him.

WHEREFORE, premises considered, the petition is DENIED. The Decision dated February 1, 2008 and Resolution dated July 24, 2008 of the Court of Appeals in CA-G.R. CR No. 30444 are hereby AFFIRMED.

SO ORDERED.

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. 207264 October 22, 2013

REGINA ONGSIAKO REYES, Petitioner,

vs. COMMISSION ON ELECTIONS and JOSEPH SOCORRO B. TAN, Respondents.

R E S O L U T I O N

PEREZ, J.:

This is a Motion for Reconsideration of the En Bane Resolution of 25 June 2013 which stated that: IN VIEW OF THE FOREGOING, the instant petition is DISMISSED, finding no grave abuse of discretion on the part of the Commission on Elections. The 14 May 2013 Resolution of the COMELEC En Banc affirming the 27 March 2013 Resolution of the COMELEC First Division is

upheld."

In her Motion for Reconsideration, petitioner summarizes her submission, thus:

"81. Stated differently, the Petitioner x x x is not asking the Honorable Court to make a determination as regards her qualifications, she is merely asking the Honorable Court to affirm the jurisdiction of the HRET to solely and exclusively pass upon such qualifications and to set aside the COMELEC Resolutions for having denied Petitioner her right to due process and for

unconstitutionally adding a qualification not otherwise required by the constitution."1 (as

originally underscored)

The first part of the summary refers to the issue raised in the petition, which is:

"31. Whether or not Respondent Comelec is without jurisdiction over Petitioner who is duly proclaimed winner and who has already taken her oath of office for the position of Member of

the House of Representatives for the lone congressional district of Marinduque."2

Tied up and neatened the propositions on the COMELEC-or-HRET jurisdiction go thus: petitioner is a duly proclaimed winner and having taken her oath of office as member of the House of Representatives, all questions regarding her qualifications are outside the jurisdiction of the COMELEC and are within the HRET exclusive jurisdiction.

The averred proclamation is the critical pointer to the correctness of petitioner's submission. The crucial question is whether or not petitioner could be proclaimed on 18 May 2013. Differently

stated, was there basis for the proclamation of petitioner on 18 May 2013?

Dates and events indicate that there was no basis for the proclamation of petitioner on 18 May 2013. Without the proclamation, the petitioner's oath of office is likewise baseless, and without a precedent oath of office, there can be no valid and effective assumption of office.

We have clearly stated in our Resolution of 5 June 2013 that:

"More importantly, we cannot disregard a fact basic in this controversy that before the proclamation of petitioner on 18 May 2013, the COMELEC En Banc had already finally disposed of the issue of petitioner's lack of Filipino citizenship and residency via its Resolution dated 14 May 2013. After 14 May 2013, there was, before the COMELEC, no longer any pending case on petitioner's qualifications to run for the position of Member of the House of Representatives. x x x As the point has obviously been missed by the petitioner who continues to argue on the basis of her due proclamation, the instant motion gives us the opportunity to highlight the undeniable fact we here repeat that the proclamation which petitioner secured on 18 May 2013 was

WITHOUT ANY BASIS.

1. Four (4) days BEFORE the 18 May 2013 proclamation, or on 14 May 2013, the COMELEC En Banc has already denied for lack o merit the petitioner's motion to reconsider the decision o the COMELEC First Division that CANCELLED petitioner's

certificate of candidacy.

2. On 18 May 2013, there was already a standing and unquestioned cancellation of petitioner's certificate o candidacy which cancellation is a definite bar to her proclamation. On 18 May 2003, that bar has not been removed, there was not even any attempt to remove it.

3. The COMELEC Rules indicate the manner by which the impediment to proclamation

may be removed. Rule 18, Section 13 (b) provides:

"(b) In Special Actions and Special Cases a decision or resolution of the Commission En Bane shall become final and executory after five (5) days from its promulgation unless restrained by the Supreme Court."

Within that five (5 days, petitioner had the opportunity to go to the Supreme Court for a restraining order that will remove the immediate effect of the En Banc cancellation of her certificate of candidacy. Within the five (5) days the Supreme Court may remove the barrier to, and thus allow, the proclamation of petitioner. That did not happen. Petitioner

did not move to have it happen.

It is error to argue that the five days should pass before the petitioner is barred from being proclaimed. Petitioner lost in the COMELEC as of respondent. Her certificate of candidacy has been ordered cancelled. She could not be proclaimed because there was a final finding against her by the COMELEC.3 She needed a restraining order from the Supreme Court to avoid the final finding. After the five days when the decision adverse to her became executory, the need for Supreme Court intervention became even more imperative. She would have to base her recourse on the position that the COMELEC committed grave abuse of discretion in cancelling her certificate of candidacy and that a restraining order, which would allow her proclamation, will have to be based on irreparable injury and demonstrated possibility of grave abuse of discretion on the part of the COMELEC. In this case, before and after the 18 May 2013 proclamation, there was not even an attempt at the legal remedy, clearly available to her, to permit her proclamation. What petitioner did was to "take the law into her hands" and secure a proclamation in complete disregard of the COMELEC En Bane decision that was final on

14 May 2013 and final and executory five days thereafter.

4. There is a reason why no mention about notice was made in Section 13(b) of Rule 18 in the provision that the COMELEC En Bane or decision "SHALL become FINAL AND EXECUTORY after five days from its promulgation unless restrained by the Supreme Court." On its own the COMELEC En Bane decision, unrestrained, moves from promulgation into becoming final and executory. This is so because in Section 5 of Rule 18 it is stated:

Section 5. Promulgation. -The promulgation of a decision or resolutions of the Commission or a division shall be made on a date previously fixed, of which notice shall be served in advance

upon the parties or their attorneys personally or by registered mail or by telegram.

5. Apart from the presumed notice of the COMELEC En Bane decision on the very date of its promulgation on 14 May 2013, petitioner admitted in her petition before us that she in fact received a copy of the decision on 16 May 20 13.4 On that date, she had absolutely no reason why she would disregard the available legal way to remove the restraint on her proclamation, and, more than that, to in fact secure a proclamation two days thereafter. The utter disregard of a final COMELEC En Bane decision and of the Rule stating that her proclamation at that point MUST be on permission by the Supreme

Court is even indicative of bad faith on the part of the petitioner.

6. The indicant is magnified by the fact that petitioner would use her tainted proclamation as the very reason to support her argument that she could no longer be reached by the jurisdiction of the COMELEC; and that it is the HRET that has exclusive jurisdiction over

the issue of her qualifications for office.

7. The suggestions of bad faith aside, petitioner is in error in the conclusion at which she directs, as well as in her objective quite obvious from such conclusion. It is with her procured proclamation that petitioner nullifies the COMELEC's decision, by Division and

then En Banc and pre-empts any Supreme Court action on the COMELEC decision. In other words, petitioner repudiates by her proclamation all administrative and judicial actions thereon, past and present. And by her proclamation, she claims as acquired the congressional seat that she sought to be a candidate for. As already shown, the reasons that lead to the impermissibility of the objective are clear. She cannot sit as Member of the House of Representatives by virtue of a baseless proclamation knowingly taken, with knowledge of the existing legal impediment.

8. Petitioner, therefore, is in error when she posits that at present it is the HRET which has e