DREAMWORK CONSTRUCTION, INC., PETITIONER, VS. CLEOFE S. JANIOLA AND HON. ARTHUR A. FAMINI, RESPONDENTS.

Dreamwork Construction versus Janiola

The Case

This is a petition for review on certiorari brought by Dreamwork Construction, Inc. against Cleofe S. Janiola and the presiding judge of the Regional Trial Court of Las Piñas City. Dreamwork asks the Supreme Court to reverse the rulings of the trial court and the Regional Trial Court which suspended the criminal proceedings for violation of Batas Pambansa Bilang 22, the Bouncing Checks Law, on the ground of a prejudicial question supposedly raised by a civil action for rescission of a construction agreement. The case matters because it settles two things every examinee must know: that under the present Rules a prejudicial question requires a civil action instituted before the criminal action, and that the validity or consideration of the contract behind a check is irrelevant to a prosecution under the Bouncing Checks Law.

Procedural History

Dreamwork, through its president and its vice president for finance and marketing, filed a complaint affidavit with the Office of the City Prosecutor of Las Piñas City for violation of the Bouncing Checks Law against Cleofe Janiola. A criminal information was later filed with the Metropolitan Trial Court of Las Piñas City, and the case was docketed as several criminal cases entitled People of the Philippines versus Cleofe S. Janiola.

Janiola then filed with the Regional Trial Court of Las Piñas City a civil complaint for rescission of the construction agreement and for damages. She later moved to suspend the criminal proceedings, claiming a prejudicial question. The Metropolitan Trial Court granted the motion, reasoning that if the contract and the checks were declared without consideration, the criminal cases must be dismissed, and that the belated filing of the civil case did not detract from the correctness of her cause. The Metropolitan Trial Court denied Dreamwork's motion for reconsideration.

Dreamwork elevated the matter to the Regional Trial Court, which denied the petition and affirmed. The Regional Trial Court held that the requirement of a previously filed civil case is intended merely to obviate delays, that no intent to delay was shown, and that the fact that the civil action came after the criminal action did not render the civil issues any less prejudicial. Hence the petition for review before the Supreme Court.

Facts

Dreamwork Construction and Cleofe Janiola were bound by a construction agreement. In consideration of that agreement, Janiola issued checks. When the checks were dishonored for insufficient funds, Dreamwork filed a criminal complaint for violation of the Bouncing Checks Law in October 2004, and the corresponding information was filed with the Metropolitan Trial Court in February 2005.

In August 2006, Janiola and her husband filed a civil complaint for rescission of the construction agreement and for damages. The checks subject of the criminal cases were precisely the checks issued in consideration of that same agreement.

In July 2007, Janiola moved to suspend the criminal proceedings, alleging that the civil and criminal cases involved similar or intimately related issues, such that the resolution of the civil case would determine her guilt or innocence. Dreamwork opposed, arguing that rescission is a separate and distinct issue from whether the Bouncing Checks Law was violated, and that the civil action did not precede the criminal action as the Rules require. The Metropolitan Trial Court and the Regional Trial Court both ruled for Janiola, prompting the petition to the Supreme Court.

Issues

• Whether or not the Regional Trial Court seriously erred in not finding grave abuse of discretion on the part of the Metropolitan Trial Court when it suspended the criminal proceedings on the basis of a prejudicial question.
• Whether or not a prejudicial question exists where the civil action was instituted after the criminal action had already been filed.
• Whether or not the resolution of the civil action for rescission determines whether the criminal action for violation of the Bouncing Checks Law may proceed.

Applicable Provisions

Article 36 of the Civil Code provides:

Article 36. Pre-judicial questions which must be decided before any criminal prosecution may be instituted or may proceed, shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be in conflict with the provisions of this Code.

This is the provision Janiola invoked to argue that a prejudicial question may arise even if the civil case is filed during the pendency of the criminal case.

Section 7 of Rule 111 of the Rules of Court provides:

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.

This is the governing rule, and its words "previously instituted" and "subsequent" are the textual basis for requiring that the civil action come first.

Section 6 of Rule 111 of the Rules of Court provides:

Section 6. Suspension by reason of prejudicial question. A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any time before the prosecution rests.

This provision fixes the time and place for filing the motion to suspend, and it is the provision with which Article 36 of the Civil Code must be harmonized.

Ruling

On the first issue, the Court granted the petition and held that the lower courts erred. On the second issue, the Court ruled that the civil action must precede the criminal action. It applied the basic precept of statutory construction that a change in phraseology by amendment indicates a legislative intent to change the meaning of the provision. The phrase "previously instituted" was inserted to qualify the civil action, and the word "subsequent" was inserted before "criminal action," and there is no other logical explanation for the amendments except to require that the civil action come first. The Court also invoked the principle that statutes should be harmonized, expressed in the maxim interpretare et concordare leges legibus est optimus interpretandi modus, meaning every statute must be construed and harmonized with other statutes to form a uniform system of jurisprudence. Thus, the clause in Article 36 of the Civil Code, "before any criminal prosecution may be instituted or may proceed," is read to mean only that the motion to suspend may be filed either during the preliminary investigation or during the trial, which harmonizes the Civil Code with Sections 6 and 7 of Rule 111.

The Court further observed that the circumstances showed the civil action and the motion to suspend were a mere afterthought interposed for delay. The civil case was filed two years after the criminal complaint, more than two and a half years after Janiola allegedly stopped construction, and more than three years after the execution of the construction agreement. This is precisely the scenario Section 7 of Rule 111 seeks to prevent.

On the third issue, the Court held that even if the civil case had come first, no prejudicial question would exist, because the resolution of the civil case does not determine whether the criminal action may proceed. The elements of the offense under the Bouncing Checks Law are the making, drawing, and issuance of a check for account or for value; knowledge of the maker that there are insufficient funds; and subsequent dishonor for insufficiency of funds. The existence of a valid contract supporting the issuance of the check does not make up any of these elements. The Court quoted its earlier ruling:

It must be emphasized that the gravamen of the offense charge is the issuance of a bad check. The purpose for which the check was issued, the terms and conditions relating to its issuance, or any agreement surrounding such issuance are irrelevant to the prosecution and conviction of petitioner.

Hence, even if the civil court declared the construction agreement void for lack of consideration, that would not affect the prosecution, because Janiola did issue checks which were subsequently dishonored for insufficient funds.

Doctrine

First, under Section 7 of Rule 111 of the Rules of Court, a prejudicial question requires that the civil action be previously instituted and that the criminal action be subsequent. A civil action filed after the criminal action cannot suspend the criminal proceedings.

Second, the two elements of a prejudicial question are that the civil action involves an issue similar or intimately related to the issue raised in the criminal action, and that the resolution of that issue determines whether or not the criminal action may proceed. Both must concur.

Third, Article 36 of the Civil Code must be harmonized with the Rules of Court. Its phrase "before any criminal prosecution may be instituted or may proceed" refers to the stage at which the motion to suspend may be filed, not to the order in which the actions are instituted.

Fourth, the contract or consideration behind a check is irrelevant to a prosecution under the Bouncing Checks Law. The offense is malum prohibitum, meaning the law punishes the mere act of issuing a worthless check, and rescission of the underlying agreement does not bar criminal liability.

Disposition

The Supreme Court granted the petition, reversed and set aside the decision of the Regional Trial Court and the orders of the Metropolitan Trial Court, and ordered the Metropolitan Trial Court to continue with the criminal proceedings with dispatch, with no costs.

Remember This

Memorize this line: a prejudicial question requires a civil action previously instituted, and the contract behind a bouncing check is irrelevant to the crime. Examiners use this case to test the amended Section 7 of Rule 111 and the rule that rescission of the underlying agreement is not a defense in a Bouncing Checks Law prosecution.