MAGNO v.

CA
Case Name
Oriel Magno v. Hon. CA and People of the Philippines
Topic
Case No. |
96132 | 26 Jun 1992
Date
Ponente Paras, J.
Magno entered into a lease agreement for the equipment he needs with LS Finance with the
condition that he pay a warranty deposit. By his admission, the petitioner asked the VP of LS
Finance to look for a third party who can lend him the money for the warranty deposit. Without
his knowledge, VP of Mancor, the company that distributes the equipment he needs, issued the
Case
warranty deposit with 3% interest. When the petitioner was unable to pay the lease and the lease
Summary agreement has been terminated by LS Finance, he found out about the involvement the VP of
Mancor. Later, he was convicted by RTC for issuing bouncing checks to the VP of Mancor as
payment for the amount used by the latter to pay the warranty deposit for the lease agreement. In
an appeal for certiorari with the SC, the court found him not guilty of violating BP 22.
Decision Petitioner was acquitted.
with a willing court system to apply the full harshness of the special law in question, using the
"mala prohibita" doctrine, the noble objective of the law is tainted with materialism and
opportunism in the highest degree.

Re: BP 22: the law was devised to safeguard the interest of the banking system and the legitimate
public checking account user. It did not intend to shelter or favor nor encourage users of the
system to enrich themselves through manipulations and circumvention of the noble purpose and
Doctrine objective of the law. Least should it be used also as a means of jeopardizing honest-to-goodness
transactions with some color of "get-rich" scheme to the prejudice of well-meaning businessmen
who are the pillars of society.

Under the utilitarian theory, the "protective theory" in criminal law, "affirms that the primary
function of punishment is the protective (sic) of society against actual and potential wrongdoers."

Cardinal Rule: The accused is presumed innocent until proven guilty beyond reasonable doubt

RELEVANT FACTS
 Appeal by certiorari under rule 45 of Revised Rules of Court from the decision of CA which affirmed
in toto the decision of RTC QC Branch 104 finding the accused petitioner (P) guilty of violation of
Batas Pambansa Blg 22 (BP22)
 4 counts of the offense charged illustrated by the OSG
 April 1983: P in the process of putting up a car repair shop but did not have complete equipment that
could make his venture workable and lacked funds to purchase the equipment needed to make his
business operational
 Representing Ultra Sources International Corp, P approached Corazon Teng, VP of Mancor
Industries for needed equipment of which Mancor is a distributor
 Teng referred P to LS Finance and Management Corp (LS) advising VP Joey Gomez that Mancor
was willing and able to supply equipment needed if LS could accommodate P and provide him
credit facilities
  LS agreed on condition that P has to put up warranty deposit equivalent to 30% of total value of
equipment to be purchased (Php 29790.00)
 P could’t come up with amount so he requested Gomez to look for 3rd party who could lend
him the needed amount for warranty deposit
 Unknown to P, Teng advanced the deposit on condition that it would be paid as a short term
loan at 3% interest
 Leasing agreement: LS would lease equipment and P would ay the rent with option to buy.
After which, the P can claim the warranty deposit
 Equipment were delivered and P issued Gomez postdated check who in turn gave them to Teng
 When check matured, P told Gomez not to deposit the check as he was no longer banking with
Pacific Bank
 To replace first check, P issued 6 postdated checks
 2 dated Jul 29 1983deposited and cleared
 4 held momentarily by Teng on request of P as they were not covered with sufficient funds
(Php 5038.43 each)
 P couldn’t pay LS monthly rental so latter pulled our equipment and P became aware of Teng
paying the warranty deposit
 P promised Teng that he’d pay but the 4 checks were returned after being deposited for. The
reason that the account was closed
 RTC QC: convicted P for violations of BP 22 and sentenced him to a year of imprisonment per
criminal case (there are 3) and to pay Teng the amounts reflected on the subject checks

RATIO DECIDENDI
Issue Ratio
W/N should be NO.
charged for the
issuance of the  The warranty deposit or “cash out” paid by Teng was not used by P who was
checks in question just paying the rentals for the equipment to LS because he did not purchase
the equipment nor did he terminate the lease in which case he would have
needed to pay the additional amount of the warranty deposit. The warranty
deposit amount remained with LS and thus it is lawful and just that the
warranty deposit should not be charged against the petitioner
 P, by Teng’s instruction to Gomez, did not know that Teng was involved and
the checks he issued were turned over to her. This fact evokes suspicion that
the transaction is irregular and immoral (shrouded in mystery, gimmickry,
and doubtful legality)
 Transaction was a modus operandi designed to skim off business clients
 P did not even attempt to secure the refund of the Php29,790 warranty deposit
from LS notwithstanding the agreement provision
 P’s checks were used to collateralize an accommodation and not to cover the
receipt of an actual account or credit for value as this was absent and therefore
P should not be punished for the mere issuance of the checks
 The potential wrongdoer (Teng) whose operations could be a menace to
society should not be glorified by convicting P
 RTC overlooked the Cardinal Rule by convicting P by his mere issuance of
the checks while recognising that the amount for the warranty deposit remains
 with LS and asserting that P provide evidence of lack of guilt

RULING
WHEREFORE, the appealed decision is REVERSED and the accused-petitioner is hereby ACQUITTED
of the crime charged.

SEPARATE OPINION/S

NOTES