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PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. No. 100776. October 28, 1993.]

ALBINO S. CO, Petitioner, v. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, Respondents.

Antonio P. Barredo for Petitioner.

The Solicitor General for the people.


D E C I S I O N


NARVASA, J.:


In connection with an agreement to salvage and refloat a sunken vessel — and in payment of his share of the expenses of the salvage operations therein stipulated — petitioner Albino Co delivered to the salvaging firm on September 1, 1983 a check drawn against the Associated Citizens’ Bank, postdated November 30, 1983, in the sum of P361,528.00. 1 The check was deposited on January 3, 1984. It was dishonored two days later, the tersely-stated reason given by the bank being: "CLOSED ACCOUNT." chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

A criminal complaint for violation of Batas Pambansa Bilang 22 2 was filed by the salvage company against Albino Co with the Regional Trial Court of Pasay City. The case eventuated in Co’s conviction of the crime charged, and his being sentenced to suffer a term of imprisonment of sixty (60) days and to indemnify the salvage company in the sum of P361,528.00.chanrobles law library

Co appealed to the Court of Appeals. There he sought exoneration upon the theory that it was reversible error for the Regional Trial Court to have relied, as basis for its verdict of conviction, on the ruling rendered on September 21, 1987 by this Court in Que v. People, 154 SCRA 160 (1987) 3 — i.e., that a check issued merely to guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22. This was because at the time of the issuance of the check on September 1, 1983, some four (4) years prior to the promulgation of the judgment in Que v. People on September 21, 1987, the delivery of a "rubber" or "bouncing" check as guarantee for an obligation was not considered a punishable offense, an official pronouncement made in a Circular of the Ministry of Justice. That Circular (No. 4), dated December 15, 1981, pertinently provided as follows:chanrobles law library

"2.3.4. Where issuance of bouncing check is neither estafa nor violation of B.P. Blg. 22.

Where the check is issued as part of an arrangement to guarantee or secure the payment of an obligation, whether pre-existing or not, the drawer is not criminally liable for either estafa or violation of B.P. Blg. 22 (Res. No. 438, s. 1981, Virginia Montano v. Josefino Galvez, June 19, 1981; Res. No. 707, s. 1989; Alice Quizon v. Lydia Calingo, October 23, 1981, Res. No. 769, s. 1981, Alfredo Guido v. Miguel A. Mateo, Et Al., November 17, 1981; Res. No. 589, s. 1981, Zenaida Lazaro v. Maria Aquino, August 7, 1981)."cralaw virtua1aw library

This administrative circular was subsequently reversed by another issued on August 8, 1984 (Ministry Circular No. 12) — almost one (1) year after Albino Co had delivered the "bouncing" check to the complainant on September 1, 1983. Said Circular No. 12, after observing inter alia that Circular No. 4 of December 15, 1981 appeared to have been based on "a misapplication of the deliberation in the Batasang Pambansa, . . . (or) the explanatory note on the original bill, i.e., that the intention was not to penalize the issuance of a check to secure or guarantee the payment of an obligation," decreed as follows: 4

"Henceforth, conforming with the rule that an administrative agency having interpreting authority may reverse its administration interpretation of a statute, but that its new interpretation applies only prospectively (Waterbury Savings Bank v. Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all cases involving violation of Batas Pambansa Blg. 22 where the check in question is issued after this date, the claim that the check is issued as a guarantee or part of an arrangement to secure an obligation or to facilitate collection will no longer be considered as a valid defense."cralaw virtua1aw library

Co’s theory was rejected by the Court of Appeals which affirmed his conviction. Citing Senarillos v. Hermosisima, 101 Phil. 561, the Appellate Court opined that the Que doctrine did not amount to the passage of new law but was merely a construction or interpretation of a pre-existing one, i.e., BP 22, enacted on April 3, 1979.

From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court on certiorari under Rule 45 of the Rules of Court. By Resolution dated September 9, 1991, the Court dismissed his appeal. Co moved for reconsideration under date of October 2, 1991. The Court required comment thereon by the Office of the Solicitor General. The latter complied and, in its comment dated December 13, 1991, extensively argued against the merits of Albino Co’s theory on appeal, which was substantially that proffered by him in the Court of Appeals. To this comment, Albino Co filed a reply dated February 14, 1992. After deliberating on the parties’ arguments and contentions, the Court resolved, in the interests of justice, to reinstate Albino Co’s appeal and adjudicate the same on its merits.

"Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines," according to Article 8 of the Civil Code. "Laws shall have no retroactive effect, unless the contrary is provided," declares Article 4 of the same Code, a declaration that is echoed by Article 22 of the Revised Penal Code: "Penal laws shall have a retroactive effect insofar as they favor the person guilty of a felony, who is not a habitual criminal . . ." 5

The principle of prospectivity of statutes, original or amendatory, has been applied in many cases. These include: Buyco v. PNB, 961) 2 SCRA 682 (June 30, 1961), holding that Republic Act No. 1576 which divested the Philippine National Bank of authority to accept back pay certificates in payment of loans, does not apply to an offer of payment made before effectivity of the act; Largado v. Masaganda, Et Al., 5 SCRA 522 (June 30, 1962), ruling that RA 2613, as amended by RA 3090 on June, 1961, granting to inferior courts jurisdiction over guardianship cases, could not be given retroactive effect, in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect that Sections. 9 and 10 of Executive Order No. 90, amending Section 4 of PD 1752, could have no retroactive application; Peo. v. Que Po Lay, 94 Phil. 640, holding that a person cannot be convicted of violating Circular No. 20 of the Central, when the alleged violation occurred before publication of the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA 619, denying retroactive application to P.D. No. 27 decreeing the emancipation of tenants from the bondage of the soil, and P.D. No. 316 prohibiting ejectment of tenants from rice and corn farmholdings, pending the promulgation of rules and regulations implementing P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA 519, adjudging that RA 6389 which removed "personal cultivation" as a ground for the ejectment of a tenant cannot be given retroactive effect in the absence of a statutory statement for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling that the repeal of the old Administrative Code by RA 4252 could not be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding that RA 6389 should have only prospective application; (see also Bonifacio v. Dizon, 177 SCRA 294 and Balatbat v. CA, 205 SCRA 419).

The prospectivity principle has also been made to apply to administrative rulings and circulars, to wit: ABS-CBN Broasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142, holding that a circular or ruling of the Commissioner of Internal Revenue may not be given retroactive effect adversely to a taxpayer; Sanchez v. COMELEC, 193 SCRA 317, ruling that Resolution No. 90-0590 of the Commission on Elections, which directed the holding of recall proceedings, had no retroactive application; Romualdez v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular No. 29, s. 1989 cannot be given retrospective effect so as to entitle to permanent appointment an employee whose temporary appointment had expired before the Circular was issued.

The principle of prospectivity has also been applied to judicial decisions which, "although in themselves not laws, are nevertheless evidence of what the laws mean, . . . (this being) the reason why under Article 8 of the New Civil Code, ‘Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system . . .’"

So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:jgc:chanrobles.com.ph

"It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962, and Confidential Agent by the Provincial commander in 1964, the prevailing doctrine on the matter was that laid down by Us in People v. Macarandang (1959) and People v. Lucero (1958). 6 Our decision in People v. Mapa, 7 reversing the aforesaid doctrine, came only in 1967. The sole question in this appeal is: should appellant be acquitted on the basis of Our rulings in Macarandang and Lucero, or should his conviction stand in view of the complete reversal of the Macarandang and Lucero doctrine in Mapa? . . .

Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the reason why under Article 8 of the New Civil Code, ‘Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system . . .’ The interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that law was originally passed, since this Court’s construction merely establishes the contemporaneous legislative intent that the law thus construed intends to effectuate. The settled rule supported by numerous authorities is a restatement of the legal maxim ‘legis interpretatio legis vim obtinet’ — the interpretation placed upon the written law by a competent court has the force of law. The doctrine laid down in Lucero and Macarandang was part of the jurisprudence, hence, of the law, of the land, at the time appellant was found in possession of the firearm in question and when he was arraigned by the trial court. It is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. This is especially true in the construction and application of criminal laws, where it is necessary that the punishability of an act be reasonably foreseen for the guidance of society."cralaw virtua1aw library

So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of Appeals, Et. Al. (G.R. No. 97973) and Development Bank of the Philippines v. Court of Appeals, Et. Al. (G.R. No 97998), Jan. 27, 1992, 205 SCRA 515, 527-528: 8

"We sustain the petitioners’ position. It is undisputed that the subject lot was mortgaged to DBP on February 24, 1970. It was acquired by DBP as the highest bidder at a foreclosure sale on June 18, 1977, and then sold to the petitioners on September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code ‘judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines.’ But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that ‘laws shall have no retroactive effect unless the contrary is provided.’ This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1061]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] ‘. . . when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof."cralaw virtua1aw library

A compelling rationalization of the prospectivity principle of judicial decisions is well set forth in the oft-cited case of Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]. The Chicot doctrine advocates the imperative necessity to take account of the actual existence of a statute prior to its nullification, as an operative fact negating acceptance of "a principle of absolute retroactive invalidity."cralaw virtua1aw library

Thus, in this Court’s decision in Tañada v. Tuvera, 9 promulgated on April 24, 1985 — which declared "that presidential issuances of general application, which have not been published, shall have no force and effect," and as regards which declaration some members of the Court appeared "quite apprehensive about the possible unsettling effect . . . (the) decision might have no acts done in reliance on the validity of those presidential decrees . . ." — the Court said:jgc:chanrobles.com.ph

". . . The answer is all too familiar. In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs Baxter Bank (308 U.S. 371, 374) to wit:jgc:chanrobles.com.ph

"The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 US 425, 442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects — with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."cralaw virtua1aw library

Much earlier, in De Agbayani v. PNB, 38 SCRA 429 — concerning the effects of the invalidation of "Republic Act No. 342, the moratorium legislation, which continued Executive Order No. 32, issued by the then President Osmeña, suspending the enforcement of payment of all debts and other monetary obligations payable by war sufferers," and which had been "explicitly held in Rutter v. Esteban (93 Phil. 68 [1953] 10 . . . (to be) in 1953 ‘unreasonable, and oppressive, and should not be prolonged a minute longer . . ." — the Court made substantially the same observations, to wit: 11

". . . The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive order or a municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor can it justify any official act taken under it. Its repugnancy to the fundamental law once judicially declared results in its being to all intents and purposes a mere scrap of paper . . . It is understandable why it should be so, the Constitution being supreme and paramount. Any legislative or executive act contrary to its terms cannot survive.

Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, — with respect to particular relations, individual and corporate, and particular conduct, private and official’ (Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This language has been quoted with approval in a resolution in Araneta v. Hill (93 Phil. 1002 [1953]) and the decision in Manila Motor Co., Inc. v. Flores (99 Phil. 738 [1956]). An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967, 21 SCRA 1095)."cralaw virtua1aw library

Again, treating of the effect that should be given to its decision in Olaguer v Military Commission No 34, 12 — declaring invalid criminal proceedings conducted during the martial law regime against civilians, which had resulted in the conviction and incarceration of numerous persons — this Court, in Tan v. Barrios, 190 SCRA 686, at p. 700, ruled as follows:jgc:chanrobles.com.ph

"In the interest of justice and consistency, we hold that Olaguer should, in principle, be applied prospectively only to future cases and cases still ongoing or not yet final when that decision was promulgated. Hence, there should be no retroactive nullification of final judgments, whether of conviction or acquittal, rendered by military courts against civilians before the promulgation of the Olaguer decision. Such final sentences should not be disturbed by the State. Only in particular cases where the convicted person or the State shows that there was serious denial of constitutional rights of the accused, should the nullity of the sentence be declared and a retrial be ordered based on the violation of the constitutional rights of the accused, and not on the Olaguer doctrine. If a retrial is no longer possible, the accused should be released since the judgment against him is null on account of the violation of his constitutional rights and denial of due process.

x       x       x


The trial of thousands of civilians for common crimes before the military tribunals and commissions during the ten-year period of martial rule (1971-1981) which were created under general orders issued by President Marcos in the exercise of his legislative powers is an operative fact that may not just be ignored. The belated declaration in 1987 of the unconstitutionality and invalidity of those proceedings did not erase the reality of their consequences which occurred long before our decision in Olaguer was promulgated and which now prevent us from carrying Olaguer to the limit of its logic. Thus did this Court rule in Municipality of Malabang v Benito, 27 SCRA 533, where the question arose as to whether the nullity of creation of a municipality by executive order wiped out all the acts of the local government abolished." 13

It would seem, then, that the weight of authority is decidedly in favor of the proposition that the Court’s decision of September 21, 1987 in Que v. People, 154 SCRA 160 (1987) 14 — i.e., that a check issued merely to guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22 — should not be given retrospective effect to the prejudice of the petitioner and other persons similarly situated, who relied on the official opinion of the Minister of Justice that such a check did not fall within the scope of B.P. Blg. 22.

Inveighing against this proposition, the Solicitor General invokes U.S. V. Go Chico, 14 Phil. 128, applying the familiar doctrine that in crimes mala prohibita, the intent or motive of the offender is inconsequential, the only relevant inquiry being, "has the law been violated?" The facts in Go Chico are substantially different from those in the case at bar. In the former, there was no official issuance by the Secretary of Justice or other Government officer construing the special law violated; 15 and it was there observed, among others, that "the defense . . . (of) an honest misconstruction of the law under legal advice" 16 could not be appreciated as a valid defense. In the present case, on the other hand, the defense is that reliance was placed, not on the opinion of a private lawyer but upon an official pronouncement of no less than the attorney of the Government, the Secretary of Justice, whose opinions, though not law, are entitled to great weight and on which reliance may be placed by private individuals as reflective of the correct interpretation of a constitutional or statutory provision; this, particularly in the case of penal statutes, by the very nature and scope of the authority that resides in his office as regards prosecutions for their violation. 17 Senarillos v. Hermosisima, supra, relied upon by the respondent Court of Appeals is crucially different in that in said case, as in U.S. v. Go Chico, supra, no administrative interpretation antedated the contrary construction placed by the Court on the law invoked.

This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must be resolved in favor of the accused. Everything considered, the Court sees no compelling reason why the doctrine of mala prohibita should override the principle of prospectivity, and its clear implications as hereinabove set out and discussed, negativing criminal liability.

WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional Trial Court are reversed and set aside, and the criminal prosecution against the accused-petitioner is DISMISSED, with costs de oficio.

SO ORDERED.

Padilla, Regalado, Nocon and Puno, JJ., concur.

Endnotes:



1. As found by the Court of Appeals, the agreement was between Co, representing Mayflower Shipping Corporation, and Geronimo B. Bella, representing Tans-Pacific Towage, Inc. The expenses for refloating were apportioned chiefly between FGU Insurance and Development Bank of the Philippines, which respectively contributed P2,329,022.00 and P1,579,000.00. SEE rollo, pp. 9, 20-21.

2. Otherwise known as the "Bouncing Checks Law" .

3. The ruling is contained in an extended resolution on a motion for reconsideration, promulgated by the Special Former Second Division of the Court on September 21, 1987, written for the division by Paras, J., with whom concurred Fernan, Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., In that resolution, the Court gave its "stamp of approval" on the decision of the Court of Appeals holding inter alia that "It is now settled that Batas Pambansa Bilang 22 applies even in cases where dishonored checks are issued merely in the form of a deposit or a guarantee."cralaw virtua1aw library

4.Italics supplied.

5. Exceptions to the rule of prospectivity are collated, e.g., in the textbook of retired Justice Edgardo A. Paras (Civil Code of the Philippines Annotated, 1984 ed., Vol. 1, pp. 22-23) viz.: 1) laws remedial in nature; 2) penal law favorable to accused, if latter not habitual delinquent; 3) laws of emergency nature under police power: e.g., tenancy relations (Vda. de Ongsiako v. Gamboa, 47 O.G. 4259, Valencia Et. Al. v. Surtida Et. Al., MAY 31, 1961); 4) curative laws; 5) substantive right declared for first time unless vested rights impaired (Unson v. del Rosario, Jan. 29, 1953; Belen v. Belen, 49 O.G. 997; Peo. v. Alejaga, 49 OG 2833).

6. 106 Phil. 713 and 103 Phil. 500, respectively, both involving prosecutions for illegal possession of firearms, and both holding that appointment by the Provincial Governor or Provincial Commander of a person as a "secret agent" or "confidential agent" "sufficiently placed him in the category of a ‘peace officer’ . . . who under section 879 of the Revised Administrative Code is exempted from the requirements relating to the issuance of license to possess firearm."cralaw virtua1aw library

7. SEE Ilagan v. People, Jan. 29, 1974 55 SCRA 361.

8. The title of the cited Monge case is Monge, Et. Al. v. Angeles, Et Al., and is reported in 101 Phil., 563 [1957], while that of the cited Tupas case is Tupas v. Damasco, Et Al., reported in 132 SCRA 593 [1984].

9. 136 SCRA 27, 40-41.

10. And several other rulings set forth in a corresponding footnote in the text of the decision.

11. SEE also Olaguer v. Military Commission No. 34, 150 SCRA 144 (1987) (citing Municipality of Malabang v. Benito, 27 SCRA 533 where the question arose as to whether the judicial nullification of an executive order creating a municipality wiped out all the acts of the local government abolished); Tan v. Barrios, 190 SCRA 686 (1990); Drilon v. Court of Appeals, 202 SCRA 378 (1991); Union of Filipro Employees v. Vivar, Jr., 205 SCRA 200 (1992); Peralta v. Civil Service Commission, 212 SCRA 425.

12. 150 SCRA 144 (1987).

13. SEE also Cruz v. Enrile, 160 SCRA 700 [1988] and Res. of February 26, 1991; and Drilon v. Court of Appeals, 202 SCRA 378 [1991]).

14. SEE footnote 3, supra.

15. Act No. 1696 of the Philippine Commission punishing any person who shall expose, or cause or permit to be exposed, to public view . . . any flag, banner, emblem, or device used during the late insurrection in the Philippine Islands to designate or identify those in armed rebellion against the United States, . . .

16. 14 Phil. 128, 133-134.

17. Estrella v. Orendain, 37 SCRA 640; Noblejas v. Salas, 67 SCRA 47.

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