PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. JULIA MANIEGO, ACCUSED-APPELLANT.

People versus Maniego

The Case

This is a criminal case for malversation of public funds, brought by the People of the Philippines against Lieutenant Rizalino Ubay, Mrs. Milagros Pamintuan, and Mrs. Julia Maniego, who were charged with conspiring to misappropriate government money by cashing worthless personal checks against public funds in the custody of Lieutenant Ubay. Mrs. Maniego was acquitted of the crime on reasonable doubt, yet the trial court still ordered her, jointly and severally with her convicted co-accused, to reimburse the Government. The case matters because it is the classic illustration of a rule every reviewee must carry into the examination room: an acquittal on reasonable doubt does not extinguish the civil liability arising from the same acts, and that civil liability may be adjudged in the very same criminal action.

Procedural History

The information was filed in the Court of First Instance of Rizal. Only Lieutenant Ubay and Mrs. Maniego were arraigned, Mrs. Pamintuan having apparently fled to the United States, and both entered pleas of not guilty. After trial, the Court of First Instance convicted Ubay of malversation and, finding no evidence against Maniego, acquitted her, but ordered both of them to pay the Government jointly and severally. Maniego moved for reconsideration, asking to be absolved from civil liability or, at least, that the amount be reduced, and the trial court declined to negate her liability but reduced the amount. She appealed to the Court of Appeals, as Ubay had earlier done; Ubay's appeal was dismissed for his failure to file a brief. Because the Court of Appeals viewed Maniego's brief as raising only questions of law, it certified her appeal to the Supreme Court under the Judiciary Act and the Rules of Court.

Facts

During the period from May to August 1957, Lieutenant Ubay was a disbursing officer of the Armed Forces of the Philippines, entrusted with and having custody and control of public funds. According to the information, he conspired with Mrs. Pamintuan, the drawer, and Mrs. Maniego, the indorser, of several personal checks drawn against the Philippine National Bank and the Bank of the Philippine Islands, in the total amount of 66,434 pesos and 50 centavos. He took and accepted these checks and cashed them using the public funds under his custody, all the accused knowing the checks were worthless and not covered by funds.

When presented for encashment, the checks were dishonored and rejected by the banks, to the damage and prejudice of the Republic in that amount. Mrs. Pamintuan apparently fled to the United States, and only Ubay and Maniego stood trial.

The trial court convicted Ubay and acquitted Maniego for lack of evidence against her, but held both civilly liable, jointly and severally, to the Government. On reconsideration, the court reduced the amount of Maniego's civil liability. The Supreme Court found that the evidence adequately established that Maniego was an indorser of several checks drawn by her sister, which were dishonored after they had been exchanged for cash belonging to the Government then in the official custody of Lieutenant Ubay.

Issues

• Whether or not the acquittal of the accused on reasonable doubt bars the imposition of civil liability for damages in the same criminal action.
• Whether or not an indorser of dishonored checks may be held liable to indemnify the Government for their value.
• Whether or not the accused may be held civilly liable jointly and severally with her co-accused instead of being absolved altogether.

Applicable Provisions

Article 100 of the Revised Penal Code provides:

Any person criminally liable for felony is also civilly liable.

This is the general rule of civil liability ex delicto, but the Court immediately qualifies it, because a person adjudged not criminally responsible may still be held civilly liable.

Article 29 of the Civil Code, as applied by the Court, provides the foundation for civil liability notwithstanding acquittal, since a person's acquittal on the ground that guilt was not proven beyond reasonable doubt does not bar a civil action for damages founded on the same acts.

Section 3, paragraph b, of Rule 111 of the 1985 Rules on Criminal Procedure provides:

Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. In other cases, the person entitled to the civil action may institute it in the jurisdiction and in the manner provided by law against the person who may be liable for restitution of the thing and reparation of indemnity for the damage suffered.

This is the decisive provision: Maniego's acquittal did not extinguish the civil liability, because the judgment did not declare that the fact from which the civil liability might arise did not exist.

Section 57 of the Negotiable Instruments Law provides:

The holder or last indorsee of a negotiable instrument has the right to enforce payment of the instrument for the full amount thereof against all parties liable thereon.

This defeats her claim that, as a mere indorser, she cannot be made liable on the dishonored checks.

Section 63 of the Negotiable Instruments Law defines an indorser as:

A person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor, unless he clearly indicates by appropriate words his intention to be bound in some other capacity.

This establishes that Maniego, who signed as indorser, is among the parties liable on the instrument.

Section 66 of the Negotiable Instruments Law provides that an indorser who indorses without qualification:

Engages that on due presentment, the instrument shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it.

This is the indorser's warranty of payment, which the Court applied against her.

Section 29 of the Negotiable Instruments Law defines an accommodation party as:

A person who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person.

This supports the alternative ground that Maniego was an accommodation party, liable on the instrument to a holder for value even if that holder knew her to be only an accommodation party.

Ruling

On the first issue, the Court held that the verdict must go against the appellant. While any person criminally liable for a felony is also civilly liable, a person adjudged not criminally responsible may still be held civilly liable. An acquittal on the ground that guilt was not proven beyond reasonable doubt does not bar a civil action for damages founded on the same acts. The Court quoted the rule:

Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist.

Hence, her acquittal on reasonable doubt did not operate to absolve her from civil liability for reimbursement of the amount rightfully due to the Government as owner thereof, and the trial court could properly adjudge that liability on the evidence before it.

On the second issue, the Court held that her contention as a mere indorser was untenable. Under the law, the holder or last indorsee may enforce payment for the full amount against all parties liable thereon, and an indorser is among those parties. An indorser without qualification engages that on due presentment the instrument shall be accepted or paid, and that if dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount to the holder. The Court added that she may also be deemed an accommodation party, liable on the instrument to a holder for value notwithstanding such holder's knowledge, although she has the right, after paying the holder, to obtain reimbursement from the party accommodated, since the relation between them is in effect that of principal and surety, the accommodation party being the surety.

On the third issue, the Court held that the trial court acted correctly in adjudging Maniego civilly liable in the same criminal action in which she had been acquitted of the felony, dispensing with the necessity of a separate civil action subsequently instituted against her. The judgment of the trial court was entirely in accord with the facts and the law.

Doctrine

First, the acquittal of an accused on reasonable doubt is not generally an impediment to the imposition, in the same criminal action, of civil liability for damages on that accused. The extinction of the penal action does not carry with it the extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. Second, the civil liability may be adjudged in the same criminal action, dispensing with a separate civil action. Third, an indorser of a negotiable instrument is a party liable thereon, and an indorser without qualification warrants payment to the holder upon dishonor; an accommodation party is likewise liable to a holder for value, with the right of reimbursement against the party accommodated, the relation being that of principal and surety.

Disposition

The Supreme Court affirmed the judgment of the trial court in its entirety, with costs against the appellant, Mrs. Maniego.

Remember This

Memorize this line: acquittal on reasonable doubt does not extinguish civil liability, unless the final judgment declares that the fact from which the civil liability might arise did not exist. Examiners use this case to test the civil liability of an acquitted accused under Rule 111 and the liability of an indorser or accommodation party under the Negotiable Instruments Law.