Diongzon v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Nilo B. Diongzon, a sales supervisor for Filipro, Inc., was authorized to withdraw products, receive payments, and remit them to the company's depository bank. An investigation revealed questionable delivery orders signed by Diongzon. Subsequently, Diongzon presented three postdated checks to Filipro, Inc., represented by Anacleto Palisoc, to cover alleged outstanding delivery orders. These checks were dishonored by the drawee bank, Allied Banking Corporation, for reasons of signature discrepancy and insufficient funds. Dealers whose names appeared on the delivery orders denied receiving the goods or issuing the checks. Diongzon acknowledged responsibility and promised to settle the accounts, admitting he issued the checks from his account. He explained his practice of 'credit riding,' allowing other dealers to use existing credit lines to avail of goods without cash payment, which he claimed was unofficially allowed by the company to meet sales targets. Procedural History: The Regional Trial Court (RTC), Branch 43, Bacolod City, convicted petitioner Diongzon for violation of B.P. Blg. 22. The Court of Appeals (CA) affirmed the conviction but modified the dispositive portion to exclude subsidiary imprisonment in case of insolvency, citing the absence of such a provision in B.P. Blg. 22. Petitioner filed a motion for reconsideration, abandoning most of his defenses except for novation, arguing that a partial payment and a written undertaking to pay the balance constituted novation, thereby extinguishing his criminal liability. The CA denied this motion. The Petition: Petitioner filed a petition for review on certiorari with the Supreme Court, arguing that novation occurred, which should have avoided any criminal liability under B.P. Blg. 22. He contended that the new agreement took effect before the filing of the information.
Issue(s)
Whether novation occurred and if it extinguished petitioner's criminal liability under B.P. Blg. 22. Whether subsidiary imprisonment should be imposed in case of insolvency for violations of B.P. Blg. 22.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals with the modification that subsidiary imprisonment shall be imposed in case of insolvency to pay the fine of P80,647.75. SO ORDERED.
Ratio Decidendi
On the issue of novation and its effect on criminal liability: The Court held that novation does not extinguish criminal liability, although it may prevent its rise if it occurs prior to the filing of the criminal information. The requisites for novation, namely, a previous valid obligation, agreement of all parties to the new contract, extinguishment of the old contract, and validity of the new one, were not met in this case. The transaction was a personal undertaking of the petitioner to pay for the goods, and the change in the mode of payment did not extinguish the original obligation. Furthermore, the Court noted that novation cannot be presumed and must be expressly intended. The petitioner's argument that the new agreement took effect prior to the filing of the information was untenable because he never complied with his undertaking, rendering the supposed new agreement ineffective. The gravamen of the offense under B.P. Blg. 22 is the issuance of a worthless check, and the petitioner admitted issuing the check which was dishonored due to insufficient funds. His failure to pay within five banking days from notice of dishonor did not dispute the presumption of knowledge of insufficient funds. On the imposition of subsidiary imprisonment: The Court found it to be an error for the appellate court not to impose subsidiary imprisonment in case of insolvency. The Supreme Court has consistently imposed subsidiary imprisonment for violations of special laws, notwithstanding the absence of an explicit provision in the law itself. Citing Llamado v. Court of Appeals, the Court reiterated that subsidiary imprisonment is a penalty that can be imposed to ensure compliance with the fine imposed, even for offenses penalized by special laws like B.P. Blg. 22.
Main Doctrine
Novation does not extinguish criminal liability; it may only prevent its rise if it occurs prior to the filing of the criminal information. Furthermore, subsidiary imprisonment may be imposed in case of insolvency for violations of special laws like B.P. Blg. 22, even if not explicitly provided for in the law itself.