[G.R. NO.

158177 - January 28, 2008]

SPOUSES BENITO LO BUN TIONG and CAROLINE SIOK CHING TENG, Petitioners,
v. VICENTE BALBOA, Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

The spouses Benito Lo Bun Tiong and Caroline Siok Ching Teng (petitioners) charge Vicente
Balboa (respondent) with forum shopping.

On February 24, 1997, respondent filed with the Regional Trial Court (RTC) of Manila (Branch
34), Civil Case No. 97-82225 for Collection of Sum of Money against petitioners. The amount
sought covers three post-dated checks issued by petitioner Caroline Siok Ching Teng (Caroline),
as follows: Asia Trust Check No. BNDO57546 dated December 30, 1996 for P2,000,000.00;
Asia Trust Check No. BNDO57547 dated January 15, 1997 for P1,200,000.00; and Asia Trust
Check No. BNDO57548 dated January 31, 1997 for P1,975,250.00 - or a total of P5,175,250.00.1

On July 21, 1997, separate criminal complaints for violation of Batas Pambansa Blg. 22 (B.P.
No. 22) were filed against Caroline before the Municipal Trial Court (MTC) of Manila (Branch
10), covering the said three checks. These cases were docketed as Criminal Case Nos. 277576 to
78.2

On August 11, 1998, the RTC rendered its Decision in Civil Case No. 97-82225 finding
petitioners liable, as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants
ordering the latter:

1. To play the plaintiff the sum of P5,175,250.00 plus 6% interest per annum until full payment;

2. To pay the plaintiff the sum of P100,000.00 as and for attorney's fees.

3. To pay the cost of suit.

The counterclaim is hereby dismissed for lack of merit.

SO ORDERED.3

Thereafter, in a Decision dated December 5, 2001 rendered in Criminal Case Nos. 277576 to 78,
the MTC acquitted Caroline of the offenses charged for failure of the prosecution to prove her
guilt beyond reasonable doubt. The MTC, however, found Caroline civilly liable in favor of
respondent for the amounts covered by these checks, to wit:

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WHEREFORE, accused Caroline Siok Ching Teng is acquitted of the charge for violation of BP
Blg. 22 for failure of the prosecution to prove her guilt beyond reasonable doubt. The accused is
ordered civilly liable to the offended party for the amounts of the checks subject of the three
informations herein, i.e., P1,200,000.00, P1,975,250.00 and P2,000,000.00.

SO ORDERED.4

Petitioner sought partial reconsideration of the MTC Decision praying for the deletion of the
award of civil indemnity, but it was denied by the MTC per Order dated April 12, 2002. Thus,
Caroline appealed to the RTC, which docketed the case as Criminal Case Nos. 02-204544-46.

In the meantime, petitioners brought to the Court of Appeals (CA) on appeal the RTC Decision
in Civil Case No. 97-82225, docketed as CA-G.R. CV No. 61457. In the assailed Decision dated
November 20, 2002, the CA5 dismissed the appeal for lack of merit and affirmed the RTC
Decision in toto. The dispositive portion of the assailed CA Decision reads:

WHEREFORE, in view of the foregoing and finding no reversible error in the appealed Decision
dated August 11, 1998 of Branch 34 of the Regional Trial Court of Manila in Civil Case No. 97-
82225, the instant appeal is DISMISSED for lack of merit, and said Decision is affirmed in toto.

SO ORDERED.6

Petitioners moved for reconsideration of the CA Decision, but this was denied per Resolution
dated April 21, 2003.7

On May 8, 2003, the RTC as an appellate court, rendered its Decision in Criminal Case No. 02-
204544-46, modifying the MTC Decision by deleting the award of civil damages.8

Now before the Court for resolution is the Amended Petition filed under Rule 45 of the Rules of
Court, questioning the CA Decision dated November 20, 2002 and Resolution dated April 21,
2003, on the lone ground that:

PUBLIC RESPONDENT COURT OF APPEALS ACTED WITHOUT JURISDICTION AND

WITH GRAVE ABUSE OF DISCRETION IN ALLOWING PRIVATE RESPONDENT TO
RECOVER TWICE FOR THE SAME OBLIGATION ON ACCOUNT OF THE SAID
PRIVATE RESPONDENT'S DELIBERATE FAILURE AND REFUSAL TO INFORM THE
REGIONAL TRIAL COURT THAT THE CIVIL OBLIGATION BEING SUED UPON IS THE
SUBJECT OF CRIMINAL COMPLAINTS WITH THE METROPOLITAN TRIAL COURT,
AND FOR WHICH THE CIVIL OBLIGATION WAS SUBSEQUENTLY ADJUDGED.9

Petitioners contend that the assailed CA Decision and Resolution should be reconsidered and the
RTC Decision dated August 11, 1998 dismissed as respondent's act of filing Civil Case No. 97-
82225 and Criminal Cases Nos. 277576 to 78 constitutes forum shopping.

Forum shopping is the institution of two or more actions or proceedings grounded on the same
cause, on the supposition that one or the other court would render a favorable disposition. It is

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usually resorted to by a party against whom an adverse judgment or order has been issued in one
forum, in an attempt to seek and possibly to get a favorable opinion in another forum, other than
by an appeal or a special civil action for certiorari.10

There is forum shopping when the following elements concur: (1) identity of the parties or, at
least, of the parties who represent the same interest in both actions; (2) identity of the rights
asserted and relief prayed for, as the latter is founded on the same set of facts; and (3) identity of
the two preceding particulars, such that any judgment rendered in the other action will amount to
res judicata in the action under consideration or will constitute litis pendentia.11

In Hyatt Industrial Manufacturing Corp. v. Asia Dynamic Electrix Corp.,12 the Court ruled that
there is identity of parties and causes of action between a civil case for the recovery of sum of
money as a result of the issuance of bouncing checks, and a criminal case for the prosecution of a
B.P. No. 22 violation. Thus, it ordered the dismissal of the civil action so as to prevent double
payment of the claim. The Court stated:

x x x The prime purpose of the criminal action is to punish the offender to deter him and others
from committing the same or similar offense, to isolate him from society, reform or rehabilitate
him or, in general, to maintain social order. The purpose, meanwhile, of the civil action is for the
restitution, reparation or indemnification of the private offended party for the damage or injury
he sustained by reason of the delictual or felonious act of the accused. Hence, the relief sought in
the civil aspect of I.S. No. 00-01-00304 and I.S. No. 00-01-00300 is the same as that sought in
Civil Case No. MC 01-1493, that is, the recovery of the amount of the checks, which, according
to petitioner, represents the amount to be paid by respondent for its purchases. x x x

This was reiterated in Silangan Textile Manufacturing Corp. v. Demetria,13 where the civil case
for the recovery of the amount covered by the bouncing checks was also ordered dismissed.

In Hyatt and Silangan, the Court applied Supreme Court Circular No. 57-97 effective September
16, 1997, which provides:

1. The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to necessarily
include the corresponding civil action, and no reservation to file such action separately shall be
allowed or recognized.

This was later adopted as Rule 111(b) of the 2000 Revised Rules of Criminal Procedure, to wit:

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the
corresponding civil action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full
the filing fees based on the amount of the check involved, which shall be considered as the actual
damages claimed. Where the complaint or information also seeks to recover liquidated, moral,
nominal, temperate or exemplary damages, the offended party shall pay the filing fees based on
the amounts alleged therein. If the amounts are not so alleged but any of these damages are

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subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a
first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may
be consolidated with the criminal action upon application with the court trying the latter case. If
the application is granted, the trial of both actions shall proceed in accordance with section 2 of
this Rule governing consolidation of the civil and criminal actions.

The foregoing, however, are not applicable to the present case. It is worth noting that Civil Case
No. 97-82225 was filed on February 24, 1997, and Criminal Cases Nos. 277576 to 78 on July 21,
1997, prior to the adoption of Supreme Court Circular No. 57-97 on September 16, 1997. Thus,
at the time of filing of Civil Case No. 97-82225 and Criminal Cases Nos. 277576 to 78, the
governing rule is Section 1, Rule 111 of the 1985 Rules of Court, to wit:

SEC. 1. Institution of criminal and civil actions. - When a criminal action is instituted, the civil
action for the recovery of civil liability is impliedly instituted with the criminal action, unless the
offended party waives the civil action, reserves his right to institute it separately, or institutes
the civil action prior to the criminal action.

Such civil action includes the recovery of indemnity under the Revised Penal Code, and damages
under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act
or omission of the accused.

x x x x (Emphasis supplied) cralawlibrary

Under the foregoing rule, an action for the recovery of civil liability arising from an offense
charged is necessarily included in the criminal proceedings, unless (1) there is an express waiver
of the civil action, or (2) there is a reservation to institute a separate one, or (3) the civil action
was filed prior to the criminal complaint.14 Since respondent instituted the civil action prior to
the criminal action, then Civil Case No. 97-82225 may proceed independently of Criminal Cases
Nos. 277576 to 78, and there is no forum shopping to speak of.

Even under the amended rules, a separate proceeding for the recovery of civil liability in cases of
violations of B.P. No. 22 is allowed when the civil case is filed ahead of the criminal case. Thus,
in the Hyatt case, the Court noted, viz.:

x x x This rule [Rule 111(b) of the 2000 Revised Rules of Criminal Procedure] was enacted to
help declog court dockets which are filled with B.P. 22 cases as creditors actually use the courts
as collectors. Because ordinarily no filing fee is charged in criminal cases for actual damages, the
payee uses the intimidating effect of a criminal charge to collect his credit gratis and sometimes,
upon being paid, the trial court is not even informed thereof. The inclusion of the civil action in
the criminal case is expected to significantly lower the number of cases filed before the courts for
collection based on dishonored checks. It is also expected to expedite the disposition of these
cases. Instead of instituting two separate cases, one for criminal and another for civil, only a
single suit shall be filed and tried. It should be stressed that the policy laid down by the Rules is
to discourage the separate filing of the civil action. The Rules even prohibit the reservation of a

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separate civil action, which means that one can no longer file a separate civil case after the
criminal complaint is filed in court. The only instance when separate proceedings are allowed
is when the civil action is filed ahead of the criminal case. Even then, the Rules encourage the
consolidation of the civil and criminal cases. We have previously observed that a separate civil
action for the purpose of recovering the amount of the dishonored checks would only prove to be
costly, burdensome and time-consuming for both parties and would further delay the final
disposition of the case. This multiplicity of suits must be avoided. Where petitioners' rights may
be fully adjudicated in the proceedings before the trial court, resort to a separate action to recover
civil liability is clearly unwarranted. (Emphasis supplied) cralawlibrary

Moreover, the RTC, in its Decision in Criminal Case Nos. 02-204544-46, already deleted the
award of civil damages. Records do not disclose that appeal had been taken therefrom. There is,
therefore, no double recovery of the amounts covered by the checks or unjust enrichment on the
part of respondent.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated November 20,
2002 and Resolution dated April 21, 2003 of the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.

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 [G.R. NO. 176795 : June 30, 2008]

SPS. CAROLINA and REYNALDO JOSE, Petitioners, v. SPS. LAUREANO and PURITA
SUAREZ, Respondents.

DECISION

TINGA, J.:

Petitioners filed this case assailing the Decision1 of the Court of Appeals in CA-G.R. CEB SP
No. 00397 dated 17 August 2006 which affirmed the Orders2 of the Regional Trial Court (RTC)
of Cebu City, Branch 19 restraining Branches 2 and 5 of the Municipal Trial Court in Cities
(MTCC) of Cebu City from proceeding with the criminal cases for violation of Batas Pambansa
Bilang 22 (B.P. Blg. 22) filed against respondent Purita Suarez.

The facts of the case follow.

Respondents, spouses Laureano and Purita Suarez, had availed of petitioner Carolina Jose's
(Carolina) offer to lend money at the daily interest rate of 1% to 2%. However, Carolina and her
husband, petitioner Reynaldo Jose, later on increased the interest to 5% per day, which
respondents were forced to accept because they allegedly had no other option left. It then became
a practice that petitioners would give the loaned money to Purita and the latter would deposit the
same in her and her husband's account to cover the maturing postdated checks they had
previously issued in payment of their other loans. Purita would then issue checks in favor of
petitioners in payment of the amount borrowed from them with the agreed 5% daily interest.

On 7 May 2004, respondents filed a Complaint3 against petitioners seeking the declaration of
"nullity of interest of 5% per day, fixing of interest, recovery of interest payments"4 and the
issuance of a writ of preliminary injunction, alleging that the interest rate of 5% a day is
iniquitous, contrary to morals, done under vitiated consent and imposed using undue influence
by taking improper advantage of their financial distress. They claimed that due to serious
liquidity problems, they were forced to rely on borrowings from banks and individual lenders,
including petitioners, and that they had to scramble for funds to cover the maturing postdated
checks they issued to cover their other borrowings. In their prayer, respondents stated:

WHEREFORE, it is prayed that upon the filing of the instant case and in accordance with the
1997 Rules on Civil Procedure[,] a writ of preliminary injunction or at least a temporary
restraining order be issued restraining defendant from enforcing the checks as listed in Annex
"E" including the filing of criminal cases for violation of B.P. [Blg.] 22 and restraining
defendants from entering plaintiffs' store and premises to get cash sales and other items against
plaintiffs will [sic] under such terms and conditions as this Court may affix.5

Thereafter, at the instance of Carolina, several cases for violation of B.P. Blg. 226 were filed
against respondent Purita before the MTCC of Cebu City, Branches 2 and 5. Purita, in turn filed
motions to suspend the criminal proceedings on the ground of prejudicial question, on the theory
that the checks subject of the B.P. Blg. 22 cases are void for being contra bonos mores or for

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having been issued in payment of the iniquitous and unconscionable interest imposed by
petitioners. The motions were denied.7

Respondents thereafter filed before the RTC a "Motion for Writ of Preliminary Injunction with
Temporary Restraining Order"8 seeking to restrain the MTCCs from further proceeding with the
B.P. Blg. 22 cases on the ground of prejudicial question. Petitioners opposed the motion.
Nevertheless, the RTC through its 20 December 2004 Order9 issued a writ of preliminary
injunction, thereby enjoining the MTCCs from proceeding with the cases against Purita.
Petitioners sought reconsideration of the order but their motion was denied due course in the
RTC's 3 February 2005 Order.10

Petitioners elevated the case to the Court of Appeals11 and questioned the propriety of the RTC's
issuance of a preliminary injunction based on a prejudicial question. The appellate court stated
that respondents had sought to annul the checks for being void pursuant to Article 1422 of the
Civil Code which provides that "a contract which is the direct result of a previous illegal
contract, is also void and inexistent." Accordingly, the appellate court concluded that if the
checks subject of the criminal cases were later on declared null and void, then said checks could
not be made the bases of criminal prosecutions under B.P. Blg. 22. In other words, the outcome
of the determination of the validity of the said checks is determinative of guilt or innocence of
Purita in the criminal case.12

The appellate court also observed that respondents' resort to an application for preliminary
injunction could not be considered as forum shopping since it is the only remedy available to
them considering the express proscription of filing a petition for certiorari against interlocutory
orders issued in cases under B.P. Blg. 22 which are governed by the rules on summary
procedure.13

Before us, petitioners submit that because under Section 6, Rule 111 of the Rules on Criminal
Procedure a petition to suspend proceedings on the ground of prejudicial question should be filed
in the same criminal action, the RTC has no jurisdiction to issue the writ of preliminary
injunction as it is not the court where the B.P. Blg. 22 cases were filed. Moreover, they argue
that respondents are guilty of forum shopping because after the denial of their motion to suspend
the proceedings before Branches 2 and 5 of the MTCC, they resorted to the filing of a motion for
preliminary injunction before the RTC also on the ground of prejudicial question; therefore, they
succeeded in getting the relief in one forum (RTC) which they had failed to obtain in the first
forum (MTCCs). Likewise, petitioners claim that the Court of Appeals erred in holding that the
civil case poses a prejudicial question to the B.P. Blg. 22 cases, thus resulting in the erroneous
suspension of the proceedings the latter cases. Finally, petitioners posit that the RTC erred in
issuing the preliminary injunction because respondents have no clear and unmistakable right to
its issuance.14

Respondents, for their part, state that the possibility of a ruling in the civil case to the effect that
the subject checks are contra bonos mores and hence null and void constitutes a prejudicial
question in the B.P. Blg. 22 cases. Thus, proceeding with the trial in the criminal cases without
awaiting the outcome of the civil case is fraught with mischievous consequences.15 They cite the
case of Medel v. Court of Appeals,16 wherein the Court nullified the interest rate of 5.5% per

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month for being contra bonos mores under Article 1306 of the Civil Code, and recomputed the
interest due at the rate of 1% per month.17 Thus, if their loans are computed at 1% per month, it
would mean that the checks subject of the B.P. Blg. 22 cases are not only fully paid but are also
in fact overpaid. They also invoke the case of Danao v. Court of Appeals18 wherein the Court
allegedly ruled that there is no violation of B.P. Blg. 22 if the dishonored checks have been
paid.19 They claim that since the 5% interest per day was not contained in any written agreement,
per Article 195620 of the Civil Code, petitioners are bound to return the total interest they
collected from respondents. Respondents point out that they incorporated in their complaint an
application for preliminary injunction and temporary restraining order to restrain Carolina from
enforcing the interest and from filing criminal cases for violation of B.P. Blg. 22. Quoting the
RTC, respondents explain:

Since there was no proof at that time that plaintiff sustain or are about to sustain damages or
prejudice if the acts complained of are not enjoined, the application was not acted upon by the
Court. When the attention of the Court was invited by the plaintiffs of the refusal of the MTC,
Branches 2 and 5, to suspend the criminal proceedings despite being appraised of the pendency
of this case, the Court has to act accordingly.21

Respondents maintain that they are not guilty of forum shopping because after the denial by the
MTCCs of their motion to suspend proceedings, their only available remedy was the filing of an
application for preliminary injunction in the existing civil case filed earlier than the B.P. Blg. 22
cases. In any case, respondents argue that the rule on forum shopping is not intended to deprive a
party to a case of a legitimate remedy.22 Finally, they claim that the case falls under the
exceptions to the rule that the prosecution of criminal cases may not be enjoined by a writ of
injunction, considering that in this case there is a prejudicial question which is sub judice, and
that there is persecution rather than prosecution.23

The case hinges on the determination of whether there exists a prejudicial question which
necessitates the suspension of the proceedings in the MTCCs.

We find that there is none and thus we resolve to grant the petition.

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. It has two essential elements: (i) the civil action involves an issue similar
or intimately related to the issue raised in the criminal action; and (ii) the resolution of such issue
determines whether or not the criminal action may proceed.24

Now the prejudicial question posed by respondents is simply this: whether the daily interest rate
of 5% is void, such that the checks issued by respondents to cover said interest are likewise void
for being contra bonos mores, and thus the cases for B.P. Blg. 22 will no longer prosper.

The prejudicial question theory advanced by respondents must fail.

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In the first place, the validity or invalidity of the interest rate is not determinative of the guilt of
respondents in the criminal cases. The Court has consistently declared that the cause or reason
for the issuance of a check is inconsequential in determining criminal culpability under B.P. Blg.
22.25 In several instances, we have held that what the law punishes is the issuance of a bouncing
check and not the purpose for which it was issued or the terms and conditions relating to its
issuance; and that the mere act of issuing a worthless check is malum prohibitum provided the
other elements of the offense are properly proved.26

The nature and policy of B.P. Blg. 22 were aptly enunciated by the Court in Meriz v. People,27
when it stated:

x x x. [B.P. Blg.] 22 does not appear to concern itself with what might actually be envisioned by
the parties, its primordial intention being to instead ensure the stability and commercial value of
checks as being virtual substitutes for currency. It is a policy that can easily be eroded if one has
yet to determine the reason for which checks are issued, or the terms and conditions for their
issuance, before an appropriate application of the legislative enactment can be made. The
gravamen of the offense under [B.P. Blg.] 22 is the act of making or issuing a worthless check or
a check that is dishonored upon presentment for payment. The act effectively declares the
offense to be one of malum prohibitum. The only valid query then is whether the law has been
breached, i.e., by the mere act of issuing a bad check, without so much regard as to the criminal
intent of the issuer.28

Thus, whether or not the interest rate imposed by petitioners is eventually declared void for being
contra bonos mores will not affect the outcome of the B.P. Blg. 22 cases because what will
ultimately be penalized is the mere issuance of bouncing checks. In fact, the primordial question
posed before the court hearing the B.P. Blg. 22 cases is whether the law has been breached, that
is, if a bouncing check has been issued.

The issue has in fact been correctly addressed by the MTCCs when respondents' motion to
suspend the criminal proceedings was denied upon the finding that there exists no prejudicial
question which could be the basis for the suspension of the proceedings. The reason for the
denial of the motion is that the "cases can very well proceed for the prosecution of the accused in
order to determine her criminal propensity - as a consequence of the issuance of several checks
which subsequently - bounced" for "what the law punishes is the issuance and/or drawing of a
check and upon presentment for deposit or encashment, it was dishonored due to insufficient
funds [or] account closed." 29

There being no prejudicial question, the RTC and, consequently, the Court of Appeals gravely
erred when they allowed the suspension of the proceedings in the B.P. Blg. 22 cases.

Now, on to other matters.

We find that respondents are guilty of forum shopping. There is forum shopping when a party
seeks to obtain remedies in an action in one court, which had already been solicited, and in other
courts and other proceedings in other tribunals. Forum shopping is the act of one party against
another, when an adverse judgment has been rendered in one forum, of seeking another and

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possibly favorable opinion in another forum other than by appeal or by special civil action of
certiorari; or the institution of two or more acts or proceedings grounded on the same cause on
the supposition that one or the other court would make a favorable disposition.30

Respondents filed their motions to suspend proceedings in the MTCCs hearing the B.P. Blg. 22
cases but unfortunately, the same were denied. Failing to get the relief they wanted, respondents
sought before the RTC, the suspension of the criminal proceedings which was granted.
Respondents tried to extricate themselves from the charge of forum shopping by explaining that
after the denial of their motions to suspend, their only remedy was the application for
preliminary injunction in the civil case a relief which they had already asked for in their
complaint and which was also initially not granted to them. Any which way the situation is
viewed, respondents' acts constituted forum shopping since they sought a possibly favorable
opinion from one court after another had issued an order unfavorable to them.

The Court notes that three cases, namely, Ras v. Rasul,31 Medel v. CA32 and Danao v. Court of
Appeals33 finding no application to the instant case were mentioned by the RTC, the Court of
Appeals and by respondents themselves in support of their position.

Ras v. Rasul cropped up in the order of the RTC which was quoted with approval by the Court of
Appeals. According to the RTC, the ruling in the said case allegedly "can be squarely applied in
this case which nullified and set aside the conviction in a criminal case because of a prejudicial
question."34 We do not agree. The Ras case involves a petition for nullification of a deed of sale
on the ground of forgery. While the civil case was pending, an information for estafa was filed
against the respondent in the civil case. The Court ruled that there were prejudicial questions
considering that the defense against the charge of forgery in the civil case is based on the very
same facts which would be determinative of the guilt or innocence of the respondent in the estafa
case. The instant case is different from Ras inasmuch as the determination of whether the 5%
daily interest is contra bonos mores and therefore void, or that the total amount loaned from
petitioners has been sufficiently paid, will not affect the guilt or innocence of Purita because the
material question in the B.P. Blg. 22 cases is whether Purita had issued a bad check, regardless
of the purpose or condition of its issuance.

Medel v. CA is the case upon which respondents anchor their claim that the interest due on their
loans is only 1% per month and thus they have already overpaid their obligation to petitioners. In
Medel, the Court declared that the rate of 5.5% interest per month on a P500,000.00 loan is
iniquitous, unconscionable and hence contrary to morals, and must equitably be reduced to 12%
per annum. While the Medel case made a finding that the stipulated interest rate is excessive and
thus may be equitably reduced by the courts, we do not see how a reduction of the interest rate,
should there be any, or a subsequent declaration that the amount due has been fully paid, will
have an effect on the determination of whether or not Purita had in fact issued bouncing checks.

Meanwhile, respondents misunderstood our ruling in Danao v. Court of Appeals, which they
claim to have ruled that there could be no violation of B.P. Blg. 22 if the dishonored checks have
been paid. In Danao, the accused was convicted by the trial court for having issued two checks
which eventually bounced. The Court found that there was no proof of receipt by the accused of
any notice of nonpayment of the checks, and thus there was no way of determining when the

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five-day period prescribed in Section 2 of B.P. Blg. 22 would start and end. Thus, the
presumption or prima facie evidence of knowledge of the insufficiency of funds or credit at the
time of the issuance of the checks did not arise. While there was a finding that the accused had
already paid her obligations prior to receipt of the complainant's demand letter,35 there was no
declaration from the Court that such payment exonerated accused from liability for having issued
bouncing checks. Instead, accused was acquitted due to insufficiency of evidence, and not
because she had paid the amount covered by the dishonored checks36 or that the obligation was
deemed paid.

WHEREFORE, the petition is GRANTED. The impugned Decision of the Court of Appeals
dated 17 August 2006 and its Resolution dated 27 February 2007, in CA-G.R. CEB-SP No.
00397, are SET ASIDE. The preliminary injunction issued by the Regional Trial Court of Cebu
City, Branch 19 in its Order dated 20 December 2004 in Civil Case No. CEB-30278 enjoining
the proceedings in the criminal cases for violation of B.P. Blg. 22 is LIFTED AND SET ASIDE
and the MTCC of Cebu City, Branches 2 and 5 are ORDERED to proceed with dispatch with
the arraignment and trial in the B.P. Blg. 22 cases pending before them.

SO ORDERED.

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