Philippine Amusement & Gaming Corp. v. Carandang
REITERATIONFacts
The Antecedents: The Philippine Amusement and Gaming Corporation (PAGCOR) filed a verified complaint for disbarment against Atty. Dante A. Carandang, president of Bingo Royale, Incorporated (Bingo Royale). PAGCOR and Bingo Royale executed a "Grant of Authority to Operate Bingo Games" which mandated Bingo Royale to remit 20% of its gross sales to PAGCOR. Bingo Royale incurred arrears amounting to P6,064,833.14 as of November 15, 2001. PAGCOR allowed Bingo Royale and Atty. Carandang to pay the arrears in installments. Bingo Royale issued twenty-four (24) checks signed by Atty. Carandang to PAGCOR, totaling P7,200,000.00. These checks were dishonored by reason of "Closed Account" upon deposit. Despite demand letters, Atty. Carandang failed to pay the amounts of the checks, leading PAGCOR to file criminal complaints for violations of Batas Pambansa (B.P.) Blg. 22 against him. PAGCOR contended that Atty. Carandang's act of issuing bouncing checks constituted serious misconduct, violation of the Attorney's Oath and the Code of Professional Responsibility. Procedural History: In his "Opposition," Atty. Carandang averred that he was not liable as the checks were drawn by Bingo Royale and his act was not related to his office as a lawyer. He cited financial difficulties of Bingo Royale as the cause for the dishonor. He also mentioned that Bingo Royale filed a complaint for damages against PAGCOR and subsequently became bankrupt. The case was referred to the Integrated Bar of the Philippines (IBP) for investigation. The Investigating IBP Commissioner, Atty. Doroteo B. Aguila, found Atty. Carandang liable and recommended suspension from the practice of law for one (1) year. The IBP Board of Governors adopted the report with modification, reducing the penalty to suspension for six (6) months. The Petition: PAGCOR prayed for the disbarment of Atty. Carandang, seeking to have his name stricken from the Roll of Attorneys.
Issue(s)
Whether Atty. Carandang is liable for issuing bouncing checks despite them being drawn by a corporation. Whether the issuance of bouncing checks constitutes serious misconduct, violation of the Attorney's Oath, and violation of the Code of Professional Responsibility.
Ruling
The Supreme Court declared Atty. Dante A. Carandang GUILTY of serious misconduct and violations of the Attorney's Oath and the Code of Professional Responsibility. He was SUSPENDED from the practice of law for six (6) months.
Ratio Decidendi
On the liability for issuing bouncing checks despite them being drawn by a corporation: The Court affirmed that under Section 1 of B.P. Blg. 22, "Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check on behalf of such drawer shall be liable under this Act." Therefore, even though the checks were drawn by Bingo Royale, Atty. Carandang, as the signatory, was liable. The Court reiterated the nature of the offense under B.P. Blg. 22, as explained in People v. Tañada, stating that the gravamen is the act of making and issuing a worthless check or a check dishonored upon presentation. This offense is against public order, not merely an offense against property, due to its deleterious effects on public interest, the channels of trade and commerce, the banking system, and the welfare of society. The Court rejected Atty. Carandang's defense of financial difficulties, noting that inability to pay is not a ground to suspend or extinguish an obligation, and sustaining such a theory would undermine the very concept of timely and full payment of debts. On whether the issuance of bouncing checks constitutes serious misconduct, violation of the Attorney's Oath, and violation of the Code of Professional Responsibility: The Court held that by issuing checks in violation of B.P. Blg. 22, Atty. Carandang was guilty of serious misconduct. The Court defined "misconduct" as "wrong or improper conduct," and "gross" as "flagrant; shameful," implying a wrongful intention rather than a mere error of judgment, citing Camus v. Civil Service Board of Appeals. The Court further emphasized that a lawyer may be disciplined not only for malpractice in connection with his profession but also for gross misconduct outside of his professional capacity that shows unfitness for the office and unworthiness of the principles conferred by his license and the law, as held in Lizaso v. Amante. Atty. Carandang also violated the Attorney's Oath to obey the laws of the land and the Code of Professional Responsibility, specifically Canon 1 (upholding the Constitution, obeying laws, promoting respect for law and legal processes) and Rule 1.01 (prohibiting unlawful, dishonest, immoral, or deceitful conduct), and Canon 7 (upholding the integrity and dignity of the legal profession) and Rule 7.03 (prohibiting conduct adversely reflecting on fitness to practice law). The Court found that Atty. Carandang displayed irresponsibility and a lack of concern for the rights of others and the canons of professional responsibility, warranting disciplinary action.
Main Doctrine
A lawyer who issues bouncing checks, even in behalf of a corporation, is liable for serious misconduct and violations of the Attorney's Oath and the Code of Professional Responsibility, and may be suspended from the practice of law.