[G.R. No. 163597.

July 29, 2005]

DECISION
PUNO, J.:

This is a petition for review of the decision of the Court of Appeals dated October 8, 2003 in CA-
G.R. SP No. 71467 and its resolution dated May 14, 2004. The assailed decision and resolution
reversed the order dated December 10, 2001 of the Regional Trial Court of Mandaluyong City, Branch
210 in Civil Case No. MC 01-1493 denying the motion to dismiss filed by herein respondent, Asia
Dynamic Electrix Corporation.
On April 4, 2001, petitioner Hyatt Industrial Manufacturing Corporation filed before the Regional
Trial Court of Mandaluyong City a complaint for recovery of sum of money against respondent Asia
Dynamic Electrix Corporation. The complaint alleged that respondent purchased from petitioner
various electrical conduits and fittings amounting P1,622,467.14. Respondent issued several checks
in favor of petitioner as payment. The checks, however, were dishonored by the drawee bank on the
ground of insufficient funds/account closed. The complaint further alleged that respondent failed to
pay despite demand. It prayed that respondent be ordered to pay the amount of purchase, plus
interest and attorneys fees.[1]
Respondent moved to dismiss the complaint on the following grounds: (1) the civil action was
deemed included in the criminal actions for violation of Batas Pambansa Blg. 22 (B.P. 22) previously
filed by petitioner against the officers of respondent corporation; (2) Section 1(b) of Rule 111 of the
Revised Rules of Criminal Procedure prohibits the filing of a separate civil action in B.P. 22 cases;
and (3) respondent was guilty of forum shopping and unjust enrichment. [2]
The trial court denied the motion to dismiss in its order dated December 10, 2001. It ruled that
since the act complained of arose from the alleged non-payment of the petitioner of its contractual
debt, and not the issuance of checks with insufficient funds, in accordance with Article 31 of the Civil
Code, the civil action could proceed independently of the criminal actions. It said that Section 1(b) of
Rule 111 of the Revised Rules of Criminal Procedure does not apply to the obligation in this case, it
being ex-contractu and not ex-delicto.[3]
Respondent questioned said order before the Court of Appeals in a petition for certiorari. The
appellate court, in its decision dated October 8, 2003, reversed the order of the trial court. It held that
the civil actions deemed instituted with the filing of the criminal cases for violation of B.P. 22 and Civil
Case No. MC 01-1493 are of the same nature, i.e., for sum of money between the same parties for
the same transaction. Considering that the courts where the two criminal cases were pending
acquired jurisdiction over the civil actions, which were deemed instituted therein, the respondent court
could no longer acquire jurisdiction over the same case.[4]
Respondent filed a motion for reconsideration which was denied by the Court of Appeals in its
resolution dated May 14, 2004.[5]
Hence, this petition raising the following arguments:

1. There is no identity of interests, causes of action, and reliefs in Civil Case No. MC 01-1493 before
the Regional Trial Court of Mandaluyong City and the criminal complaints for violation of BP Blg. 22
filed against Gil Santillan and Juanito Pamatmat before the Metropolitan Trial Court of Pasig City
docketed as I.S. No. 00-01-00304 and I.S. No. 00-01-00300.

2. Petitioner is not guilty of forum shopping.

3. Petitioner did not violate Section 1(b) of Rule 111 of the Revised Rules on Criminal Procedure
when it filed the complaint in Civil Case No. MC 01-1493. [6]

The petition is unmeritorious.

It appears that prior to the filing of the case for recovery of sum of money before the Regional
Trial Court of Mandaluyong City, petitioner had already filed separate criminal complaints for violation
of B.P. 22 against the officers of respondent corporation, Gil Santillan and Juanito Pamatmat. They
were docketed as I.S. No. 00-01-00304 [7] and I.S. No. 00-01-00300,[8]respectively, and were both
pending before the Metropolitan Trial Court of Pasig City. These cases involve the same checks
which are the subjects of Civil Case No. MC 01-1493 before the Regional Trial Court of Mandaluyong
City.
We agree with the ruling of the Court of Appeals that upon filing of the criminal cases for violation
of B.P. 22, the civil action for the recovery of the amount of the checks was also impliedly instituted
under Section 1(b) of Rule 111 of the 2000 Rules on Criminal Procedure. Under the present revised
Rules, the criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil
action. The reservation to file a separate civil action is no longer needed. [9] The Rules provide:

Section 1.  Institution of criminal and civil actions.

(a) x x x

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the
corresponding civil action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing
fees based on the amount of the check involved, which shall be considered as the actual damages
claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal,
temperate or exemplary damages, the offended party shall pay additional filing fees based on the
amounts alleged therein. If the amounts are not so alleged but any of these damages are
subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a
first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be
consolidated with the criminal action upon application with the court trying the latter case. If the
application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule
governing consolidation of the civil and criminal actions.

The foregoing rule was adopted from Circular No. 57-97 of this Court. It specifically states that
the criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil action. It
also requires the complainant to pay in full the filing fees based on the amount of the check involved.
Generally, no filing fees are required for criminal cases, but because of the inclusion of the civil action
in complaints for violation of B.P. 22, the Rules require the payment of docket fees upon the filing of
the complaint. This rule was enacted to help declog court dockets which are filled with B.P. 22 cases
as creditors actually use the courts as collectors. Because ordinarily no filing fee is charged in criminal
cases for actual damages, the payee uses the intimidating effect of a criminal charge to collect his
credit gratis and sometimes, upon being paid, the trial court is not even informed thereof. [10] The
inclusion of the civil action in the criminal case is expected to significantly lower the number of cases
filed before the courts for collection based on dishonored checks. It is also expected to expedite the
disposition of these cases. Instead of instituting two separate cases, one for criminal and another for
civil, only a single suit shall be filed and tried. It should be stressed that the policy laid down by the
Rules is to discourage the separate filing of the civil action. The Rules even prohibit the reservation of
a separate civil action, which means that one can no longer file a separate civil case after the criminal
complaint is filed in court. The only instance when separate proceedings are allowed is when the civil
action is filed ahead of the criminal case. Even then, the Rules encourage the consolidation of the civil
and criminal cases. We have previously observed that a separate civil action for the purpose of
recovering the amount of the dishonored checks would only prove to be costly, burdensome and time-
consuming for both parties and would further delay the final disposition of the case. This multiplicity of
suits must be avoided. Where petitioners rights may be fully adjudicated in the proceedings before the
trial court, resort to a separate action to recover civil liability is clearly unwarranted. [11] In view of this
special rule governing actions for violation of B.P. 22, Article 31 of the Civil Code [12] cited by the trial
court will not apply to the case at bar.
The pendency of the civil action before the court trying the criminal case bars the filing of another
civil action in another court on the ground of litis pendentia. The elements of litis pendentia as a
ground for dismissal of an action are: (1) identity of parties, or at least such parties who represent the
same interest in both actions; (2) identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (3) the identity, with respect to the two preceding particulars in the
two cases, is such that any judgment that may be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in the other.[13]
We reject petitioners assertion that there is no identity of parties and causes of action between
the civil case, Civil Case No. MC 01-1493, and the criminal cases, I.S. No. 00-01-00304 and I.S. No.
00-01-00300.
First, the parties in Civil Case No. MC 01-1493 represent the same interests as the parties in I.S.
No. 00-01-00304 and I.S. No. 00-01-00300. I.S. No. 00-01-00304 and I.S. No. 00-01-00300 were filed
against the officers of respondent corporation who signed the checks as agents thereof. The records
indicate that the checks were in fact drawn in the account of respondent corporation. It has not been
alleged in the suit that said officers acted beyond their authority in signing the checks, hence, their
acts may also be binding on respondent corporation, depending on the outcome of the proceedings.
Second, Civil Case No. MC 01-1493 and I.S. No. 00-01-00304 and I.S. No. 00-01-00300 seek to
obtain the same relief. With the implied institution of the civil liability in the criminal actions before the
Metropolitan Trial Court of Pasig City, the two actions are merged into one composite proceeding,
with the criminal action predominating the civil. The prime purpose of the criminal action is to punish
the offender to deter him and others from committing the same or similar offense, to isolate him from
society, reform or rehabilitate him or, in general, to maintain social order. The purpose, meanwhile, of
the civil action is for the restitution, reparation or indemnification of the private offended party for the
damage or injury he sustained by reason of the delictual or felonious act of the accused. [14] Hence, the
relief sought in the civil aspect of I.S. No. 00-01-00304 and I.S. No. 00-01-00300 is the same as that
sought in Civil Case No. MC 01-1493, that is, the recovery of the amount of the checks, which,
according to petitioner, represents the amount to be paid by respondent for its purchases. To allow
petitioner to proceed with Civil Case No. MC 01-1493 despite the filing of I.S. No. 00-01-00304 and
I.S. No. 00-01-00300 might result to a double payment of its claim.
Petitioner contends that there is no identity of causes of action in the civil and criminal cases as
the amount claimed in Civil Case No. MC 01-1493 is greater than the total amount of the checks
involved in I.S. No. 00-01-00304 and I.S. No. 00-01-00300. We are not persuaded. We find that the
inclusion of additional checks in Civil Case No. MC 01-1493 is an attempt to circumvent the rule
against forum shopping, to make it appear that the objects of the civil and criminal proceedings are
different. It is clear from the records that the checks involved in I.S. No. 00-01-00304 [15] and I.S. No.
00-01-00300[16] are the same checks cited by petitioner in Civil Case No. MC 01-1493. [17] The Court
will certainly not allow petitioner to recover a sum of money twice based on the same set of checks.
Neither will the Court allow it to proceed with two actions based on the same set of checks to increase
its chances of obtaining a favorable ruling. Such runs counter to the Courts policy against forum
shopping which is a deplorable practice of litigants in resorting to two different fora for the purpose of
obtaining the same relief to increase his chances of obtaining a favorable judgment. [18] It is a practice
that ridicules the judicial process, plays havoc with the rules on orderly procedure, and is vexatious
and unfair to the other parties of the case.[19]
Thus, we find that the Court of Appeals committed no reversible error in the assailed decision
and resolution.
IN VIEW WHEREOF, the petition is DENIED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 74886 December 8, 1992

PRUDENTIAL BANK, petitioner, 
vs.
INTERMEDIATE APPELLATE COURT, PHILIPPINE RAYON MILLS, INC. and ANACLETO R.
CHI, respondents.

DAVIDE, JR., J.:

Petitioner seeks to review and set aside the decision 1 of public respondent; Intermediate Appellate
Court (now Court of Appeals), dated 10 March 1986, in AC-G.R. No. 66733 which affirmed  in toto the
15 June 1978 decision of Branch 9 (Quezon City) of the then Court of First Instance (now Regional
Trial Court) of Rizal in Civil Case No. Q-19312. The latter involved an action instituted by the
petitioner for the recovery of a sum of money representing the amount paid by it to the Nissho
Company Ltd. of Japan for textile machinery imported by the defendant, now private respondent,
Philippine Rayon Mills, Inc. (hereinafter Philippine Rayon), represented by co-defendant Anacleto R.
Chi.

The facts which gave rise to the instant controversy are summarized by the public respondent as
follows:

On August 8, 1962, defendant-appellant Philippine Rayon Mills, Inc. entered into a

contract with Nissho Co., Ltd. of Japan for the importation of textile machineries
under a five-year deferred payment plan (Exhibit B, Plaintiff's Folder of Exhibits, p 2).
To effect payment for said machineries, the defendant-appellant applied for a
commercial letter of credit with the Prudential Bank and Trust Company in favor of
Nissho. By virtue of said application, the Prudential Bank opened Letter of Credit No.
DPP-63762 for $128,548.78 (Exhibit A, Ibid., p. 1). Against this letter of credit, drafts
were drawn and issued by Nissho (Exhibits X, X-1 to X-11, Ibid., pp. 65, 66 to 76),
which were all paid by the Prudential Bank through its correspondent in Japan, the
Bank of Tokyo, Ltd. As indicated on their faces, two of these drafts (Exhibit X and X-
1, Ibid., pp. 65-66) were accepted by the defendant-appellant through its president,
Anacleto R. Chi, while the others were not (Exhibits X-2 to X-11, Ibid., pp. 66 to 76).

Upon the arrival of the machineries, the Prudential Bank indorsed the shipping
documents to the defendant-appellant which accepted delivery of the same. To
enable the defendant-appellant to take delivery of the machineries, it executed, by
prior arrangement with the Prudential Bank, a trust receipt which was signed by
Anacleto R. Chi in his capacity as President (sic) of defendant-appellant company
(Exhibit C, Ibid., p. 13).

At the back of the trust receipt is a printed form to be accomplished by two sureties
who, by the very terms and conditions thereof, were to be jointly and severally liable
to the Prudential Bank should the defendant-appellant fail to pay the total amount or
any portion of the drafts issued by Nissho and paid for by Prudential Bank. The
defendant-appellant was able to take delivery of the textile machineries and installed
the same at its factory site at 69 Obudan Street, Quezon City.
 Sometime in 1967, the defendant-appellant ceased business operation (sic). On
December 29, 1969, defendant-appellant's factory was leased by Yupangco Cotton
Mills for an annual rental of P200,000.00 (Exhibit I, Ibid., p. 22). The lease was
renewed on January 3, 1973 (Exhibit J, Ibid., p. 26). On January 5, 1974, all the
textile machineries in the defendant-appellant's factory were sold to AIC Development
Corporation for P300,000.00 (Exhibit K, Ibid., p. 29).

The obligation of the defendant-appellant arising from the letter of credit and the trust
receipt remained unpaid and unliquidated. Repeated formal demands (Exhibits U, V,
and W, Ibid., pp. 62, 63, 64) for the payment of the said trust receipt yielded no result
Hence, the present action for the collection of the principal amount of P956,384.95
was filed on October 3, 1974 against the defendant-appellant and Anacleto R. Chi. In
their respective answers, the defendants interposed identical special defenses, viz.,
the complaint states no cause of action; if there is, the same has prescribed; and the
plaintiff is guilty of laches. 2

On 15 June 1978, the trial court rendered its decision the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered sentencing the defendant Philippine

Rayon Mills, Inc. to pay plaintiff the sum of P153,645.22, the amounts due under
Exhibits "X" & "X-1", with interest at 6% per annum beginning September 15, 1974
until fully paid.

Insofar as the amounts involved in drafts Exhs. "X" (sic) to "X-11", inclusive, the same
not having been accepted by defendant Philippine Rayon Mills, Inc., plaintiff's cause
of action thereon has not accrued, hence, the instant case is premature.

Insofar as defendant Anacleto R. Chi is concerned, the case is dismissed. Plaintiff is

ordered to pay defendant Anacleto R. Chi the sum of P20,000.00 as attorney's fees.

With costs against defendant Philippine Rayon Mills, Inc.

SO ORDERED. 3

Petitioner appealed the decision to the then Intermediate Appellate Court. In urging the said court to
reverse or modify the decision, petitioner alleged in its Brief that the trial court erred in (a) disregarding
its right to reimbursement from the private respondents for the entire unpaid balance of the imported
machines, the total amount of which was paid to the Nissho Company Ltd., thereby violating the
principle of the third party payor's right to reimbursement provided for in the second paragraph of
Article 1236 of the Civil Code and under the rule against unjust enrichment; (b) refusing to hold
Anacleto R. Chi, as the responsible officer of defendant corporation, liable under Section 13 of P.D No
115 for the entire unpaid balance of the imported machines covered by the bank's trust receipt
(Exhibit "C"); (c) finding that the solidary guaranty clause signed by Anacleto R. Chi is not a guaranty
at all; (d) controverting the judicial admissions of Anacleto R. Chi that he is at least a simple guarantor
of the said trust receipt obligation; (e) contravening, based on the assumption that Chi is a simple
guarantor, Articles 2059, 2060 and 2062 of the Civil Code and the related evidence and jurisprudence
which provide that such liability had already attached; (f) contravening the judicial admissions of
Philippine Rayon with respect to its liability to pay the petitioner the amounts involved in the drafts
(Exhibits "X", "X-l" to "X-11''); and (g) interpreting "sight" drafts as requiring acceptance by Philippine
Rayon before the latter could be held liable thereon. 4

In its decision, public respondent sustained the trial court in all respects. As to the first and last
assigned errors, it ruled that the provision on unjust enrichment, Article 2142 of the Civil Code, applies
only if there is no express contract between the parties and there is a clear showing that the payment
is justified. In the instant case, the relationship existing between the petitioner and Philippine Rayon is
governed by specific contracts, namely the application for letters of credit, the promissory note, the
drafts and the trust receipt. With respect to the last ten (10) drafts (Exhibits "X-2" to "X-11") which had
not been presented to and were not accepted by Philippine Rayon, petitioner was not justified in
unilaterally paying the amounts stated therein. The public respondent did not agree with the
petitioner's claim that the drafts were sight drafts which did not require presentment for acceptance to
Philippine Rayon because paragraph 8 of the trust receipt presupposes prior acceptance of the drafts.
Since the ten (10) drafts were not presented and accepted, no valid demand for payment can be
made.

Public respondent also disagreed with the petitioner's contention that private respondent Chi is
solidarily liable with Philippine Rayon pursuant to Section 13 of P.D. No. 115 and based on his
signature on the solidary guaranty clause at the dorsal side of the trust receipt. As to the first
contention, the public respondent ruled that the civil liability provided for in said Section 13 attaches
only after conviction. As to the second, it expressed misgivings as to whether Chi's signature on the
trust receipt made the latter automatically liable thereon because the so-called solidary guaranty
clause at the dorsal portion of the trust receipt is to be signed not by one (1) person alone, but by two
(2) persons; the last sentence of the same is incomplete and unsigned by witnesses; and it is not
acknowledged before a notary public. Besides, even granting that it was executed and acknowledged
before a notary public, Chi cannot be held liable therefor because the records fail to show that
petitioner had either exhausted the properties of Philippine Rayon or had resorted to all legal
remedies as required in Article 2058 of the Civil Code. As provided for under Articles 2052 and 2054
of the Civil Code, the obligation of a guarantor is merely accessory and subsidiary, respectively. Chi's
liability would therefore arise only when the principal debtor fails to comply with his obligation. 5

Its motion to reconsider the decision having been denied by the public respondent in its Resolution of
11 June 1986, 6 petitioner filed the instant petition on 31 July 1986 submitting the following legal
issues:

I. WHETHER OR NOT THE RESPONDENT APPELLATE COURT GRIEVOUSLY

ERRED IN DENYING PETITIONER'S CLAIM FOR FULL REIMBURSEMENT
AGAINST THE PRIVATE RESPONDENTS FOR THE PAYMENT PETITIONER
MADE TO NISSHO CO. LTD. FOR THE BENEFIT OF PRIVATE RESPONDENT
UNDER ART. 1283 OF THE NEW CIVIL CODE OF THE PHILIPPINES AND UNDER
THE GENERAL PRINCIPLE AGAINST UNJUST ENRICHMENT;

II. WHETHER OR NOT RESPONDENT CHI IS SOLIDARILY LIABLE UNDER THE

TRUST RECEIPT (EXH. C);

III. WHETHER OR NOT ON THE BASIS OF THE JUDICIAL ADMISSIONS OF

RESPONDENT CHI HE IS LIABLE THEREON AND TO WHAT EXTENT;

IV. WHETHER OR NOT RESPONDENT CHI IS MERELY A SIMPLE GUARANTOR;

AND IF SO; HAS HIS LIABILITY AS SUCH ALREADY ATTACHED;

V. WHETHER OR NOT AS THE SIGNATORY AND RESPONSIBLE OFFICER OF

RESPONDENT PHIL. RAYON RESPONDENT CHI IS PERSONALLY LIABLE
PURSUANT TO THE PROVISION OF SECTION 13, P.D. 115;

VI. WHETHER OR NOT RESPONDENT PHIL. RAYON IS LIABLE TO THE

PETITIONER UNDER THE TRUST RECEIPT (EXH. C);

VII. WHETHER OR NOT ON THE BASIS OF THE JUDICIAL ADMISSIONS

RESPONDENT PHIL. RAYON IS LIABLE TO THE PETITIONER UNDER THE
DRAFTS (EXHS. X, X-1 TO X-11) AND TO WHAT EXTENT;

VIII. WHETHER OR NOT SIGHT DRAFTS REQUIRE PRIOR ACCEPTANCE FROM

RESPONDENT PHIL. RAYON BEFORE THE LATTER BECOMES LIABLE TO
PETITIONER. 7

In the Resolution of 12 March 1990, 8 this Court gave due course to the petition after the filing of the
Comment thereto by private respondent Anacleto Chi and of the Reply to the latter by the petitioner;
both parties were also required to submit their respective memoranda which they subsequently
complied with.

As We see it, the issues may be reduced as follows:

1. Whether presentment for acceptance of the drafts was

indispensable to make Philippine Rayon liable thereon;

2. Whether Philippine Rayon is liable on the basis of the trust receipt;

3. Whether private respondent Chi is jointly and severally liable with

Philippine Rayon for the obligation sought to be enforced and if not,
whether he may be considered a guarantor; in the latter situation,
whether the case should have been dismissed on the ground of lack
of cause of action as there was no prior exhaustion of Philippine
Rayon's properties.

Both the trial court and the public respondent ruled that Philippine Rayon could be held liable for the
two (2) drafts, Exhibits "X" and "X-1", because only these appear to have been accepted by the latter
after due presentment. The liability for the remaining ten (10) drafts (Exhibits "X-2" to "X-11" inclusive)
did not arise because the same were not presented for acceptance. In short, both courts concluded
that acceptance of the drafts by Philippine Rayon was indispensable to make the latter liable thereon.
We are unable to agree with this proposition. The transaction in the case at bar stemmed from
Philippine Rayon's application for a commercial letter of credit with the petitioner in the amount of
$128,548.78 to cover the former's contract to purchase and import loom and textile machinery from
Nissho Company, Ltd. of Japan under a five-year deferred payment plan. Petitioner approved the
application. As correctly ruled by the trial court in its Order of 6 March 1975: 9

. . . By virtue of said Application and Agreement for Commercial Letter of Credit,

plaintiff bank 10 was under obligation to pay through its correspondent bank in Japan
the drafts that Nisso (sic) Company, Ltd., periodically drew against said letter of credit
from 1963 to 1968, pursuant to plaintiff's contract with the defendant Philippine Rayon
Mills, Inc. In turn, defendant Philippine Rayon Mills, Inc., was obligated to pay plaintiff
bank the amounts of the drafts drawn by Nisso (sic) Company, Ltd. against said
plaintiff bank together with any accruing commercial charges, interest, etc. pursuant
to the terms and conditions stipulated in the Application and Agreement of
Commercial Letter of Credit Annex "A".

A letter of credit is defined as an engagement by a bank or other person made at the request of a
customer that the issuer will honor drafts or other demands for payment upon compliance with the
conditions specified in the credit. 11Through a letter of credit, the bank merely substitutes its own
promise to pay for one of its customers who in return promises to pay the bank the amount of funds
mentioned in the letter of credit plus credit or commitment fees mutually agreed upon. 12 In the instant
case then, the drawee was necessarily the herein petitioner. It was to the latter that the drafts were
presented for payment. In fact, there was no need for acceptance as the issued drafts are sight drafts.
Presentment for acceptance is necessary only in the cases expressly provided for in Section 143 of
the Negotiable Instruments Law (NIL). 13 The said section reads:

Sec. 143. When presentment for acceptance must be made. — Presentment for
acceptance must be made:

(a) Where the bill is payable after sight, or in any

other case, where presentment for acceptance is
necessary in order to fix the maturity of the
instrument; or

(b) Where the bill expressly stipulates that it shall be

presented for acceptance; or
 (c) Where the bill is drawn payable elsewhere than at
the residence or place of business of the drawee.

In no other case is presentment for acceptance necessary in order to render any

party to the bill liable.

Obviously then, sight drafts do not require presentment for acceptance.

The acceptance of a bill is the signification by the drawee of his assent to the order of the
drawer; 14 this may be done in writing by the drawee in the bill itself, or in a separate instrument. 15

The parties herein agree, and the trial court explicitly ruled, that the subject, drafts are sight drafts.
Said the latter:

. . . In the instant case the drafts being at sight, they are supposed to be payable
upon acceptance unless plaintiff bank has given the Philippine Rayon Mills Inc. time
within which to pay the same. The first two drafts (Annexes C & D, Exh. X & X-1)
were duly accepted as indicated on their face (sic), and upon such acceptance should
have been paid forthwith. These two drafts were not paid and although Philippine
Rayon Mills
ought to have paid the same, the fact remains that until now they are still unpaid. 16

Corollarily, they are, pursuant to Section 7 of the NIL, payable on demand. Section 7 provides:

Sec. 7. When payable on demand. — An instrument is payable on demand —

(a) When so it is expressed to be payable on

demand, or at sight, or on presentation; or

(b) In which no time for payment in expressed.

Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards

the person so issuing, accepting, or indorsing it, payable on demand. (emphasis
supplied)

Paragraph 8 of the Trust Receipt which reads: "My/our liability for payment at maturity of any
accepted draft, bill of exchange or indebtedness shall not be extinguished or modified" 17 does
not, contrary to the holding of the public respondent, contemplate prior acceptance by
Philippine Rayon, but by the petitioner. Acceptance, however, was not even necessary in the
first place because the drafts which were eventually issued were sight drafts And even if
these were not sight drafts, thereby necessitating acceptance, it would be the petitioner —
and not Philippine Rayon — which had to accept the same for the latter was not the drawee.
Presentment for acceptance is defined an the production of a bill of exchange to a drawee for
acceptance. 18The trial court and the public respondent, therefore, erred in ruling that
presentment for acceptance was an indispensable requisite for Philippine Rayon's liability on
the drafts to attach. Contrary to both courts' pronouncements, Philippine Rayon immediately
became liable thereon upon petitioner's payment thereof. Such is the essence of the letter of
credit issued by the petitioner. A different conclusion would violate the principle upon which
commercial letters of credit are founded because in such a case, both the beneficiary and the
issuer, Nissho Company Ltd. and the petitioner, respectively, would be placed at the mercy of
Philippine Rayon even if the latter had already received the imported machinery and the
petitioner had fully paid for it. The typical setting and purpose of a letter of credit are
described in Hibernia Bank and Trust Co.vs. J.  Aron & Co., Inc., 19 thus:

Commercial letters of credit have come into general use in international sales
transactions where much time necessarily elapses between the sale and the receipt
by a purchaser of the merchandise, during which interval great price changes may
occur. Buyers and sellers struggle for the advantage of position. The seller is
 desirous of being paid as surely and as soon as possible, realizing that the vendee at
a distant point has it in his power to reject on trivial grounds merchandise on arrival,
and cause considerable hardship to the shipper. Letters of credit meet this condition
by affording celerity and certainty of payment. Their purpose is to insure to a seller
payment of a definite amount upon presentation of documents. The bank deals only
with documents. It has nothing to do with the quality of the merchandise. Disputes as
to the merchandise shipped may arise and be litigated later between vendor and
vendee, but they may not impede acceptance of drafts and payment by the issuing
bank when the proper documents are presented.

The trial court and the public respondent likewise erred in disregarding the trust receipt and in not
holding that Philippine Rayon was liable thereon. In People vs. Yu Chai Ho, 20 this Court explains the
nature of a trust receipt by quoting In re Dunlap Carpet Co., 21 thus:

By this arrangement a banker advances money to an intending importer, and thereby

lends the aid of capital, of credit, or of business facilities and agencies abroad, to the
enterprise of foreign commerce. Much of this trade could hardly be carried on by any
other means, and therefore it is of the first importance that the fundamental factor in
the transaction, the banker's advance of money and credit, should receive the
amplest protection. Accordingly, in order to secure that the banker shall be repaid at
the critical point — that is, when the imported goods finally reach the hands of the
intended vendee — the banker takes the full title to the goods at the very beginning;
he takes it as soon as the goods are bought and settled for by his payments or
acceptances in the foreign country, and he continues to hold that title as his
indispensable security until the goods are sold in the United States and the vendee is
called upon to pay for them. This security is not an ordinary pledge by the importer to
the banker, for the importer has never owned the goods, and moreover he is not able
to deliver the possession; but the security is the complete title vested originally in the
bankers, and this characteristic of the transaction has again and again been
recognized and protected by the courts. Of course, the title is at bottom a security
title, as it has sometimes been called, and the banker is always under the obligation
to reconvey; but only after his advances have been fully repaid and after the importer
has fulfilled the other terms of the contract.

As further stated in National Bank vs.  Viuda e Hijos de Angel Jose, 22 trust receipts:

. . . [I]n a certain manner, . . . partake of the nature of a conditional sale as provided

by the Chattel Mortgage Law, that is, the importer becomes absolute owner of the
imported merchandise as soon an he has paid its price. The ownership of the
merchandise continues to be vested in the owner thereof or in the person who has
advanced payment, until he has been paid in full, or if the merchandise has already
been sold, the proceeds of the sale should be turned over to him by the importer or
by his representative or successor in interest.

Under P.D. No. 115, otherwise known an the Trust Receipts Law, which took effect on 29 January
1973, a trust receipt transaction is defined as "any transaction by and between a person referred to in
this Decree as the entruster, and another person referred to in this Decree as the entrustee, whereby
the entruster, who owns or holds absolute title or security interests' over certain specified goods,
documents or instruments, releases the same to the possession of the entrustee upon the latter's
execution and delivery to the entruster of a signed document called the "trust receipt" wherein the
entrustee binds himself to hold the designated goods, documents or instruments in trust for the
entruster and to sell or otherwise dispose of the goods, documents or instruments with the obligation
to turn over to the entruster the proceeds thereof to the extent of the amount owing to the entruster or
as appears in the trust receipt or the goods, instruments themselves if they are unsold or not
otherwise disposed of, in accordance with the terms and conditions specified in the trusts receipt, or
for other purposes substantially equivalent to any one of the following: . . ."

It is alleged in the complaint that private respondents "not only have presumably put said machinery
to good use and have profited by its operation and/or disposition but very recent information that (sic)
reached plaintiff bank that defendants already sold the machinery covered by the trust receipt to
Yupangco Cotton Mills," and that "as trustees of the property covered by the trust receipt, . . . and
therefore acting in fiduciary (sic) capacity, defendants have willfully violated their duty to account for
the whereabouts of the machinery covered by the trust receipt or for the proceeds of any lease, sale
or other disposition of the same that they may have made, notwithstanding demands therefor;
defendants have fraudulently misapplied or converted to their own use any money realized from the
lease, sale, and other disposition of said machinery." 23 While there is no specific prayer for the
delivery to the petitioner by Philippine Rayon of the proceeds of the sale of the machinery covered by
the trust receipt, such relief is covered by the general prayer for "such further and other relief as may
be just and equitable on the premises." 24 And although it is true that the petitioner commenced a
criminal action for the violation of the Trust Receipts Law, no legal obstacle prevented it from
enforcing the civil liability arising out of the trust, receipt in a separate civil action. Under Section 13 of
the Trust Receipts Law, the failure of an entrustee to turn over the proceeds of the sale of goods,
documents or instruments covered by a trust receipt to the extent of the amount owing to the entruster
or as appear in the trust receipt or to return said goods, documents or instruments if they were not
sold or disposed of in accordance with the terms of the trust receipt shall constitute the crime of
estafa, punishable under the provisions of Article 315, paragraph 1(b) of the Revised Penal
Code. 25 Under Article 33 of the Civil Code, a civil action for damages, entirely separate and distinct
from the criminal action, may be brought by the injured party in cases of defamation, fraud and
physical injuries. Estafa falls under fraud.

We also conclude, for the reason hereinafter discussed, and not for that adduced by the public
respondent, that private respondent Chi's signature in the dorsal portion of the trust receipt did not
bind him solidarily with Philippine Rayon. The statement at the dorsal portion of the said trust receipt,
which petitioner describes as a "solidary guaranty clause", reads:

In consideration of the PRUDENTIAL BANK AND TRUST COMPANY complying with

the foregoing, we jointly and severally agree and undertake to pay on demand to the
PRUDENTIAL BANK AND TRUST COMPANY all sums of money which the said
PRUDENTIAL BANK AND TRUST COMPANY may call upon us to pay arising out of
or pertaining to, and/or in any event connected with the default of and/or non-
fulfillment in any respect of the undertaking of the aforesaid:

PHILIPPINE RAYON MILLS, INC.

We further agree that the PRUDENTIAL BANK AND TRUST COMPANY does not
have to take any steps or exhaust its remedy against aforesaid:

before making demand on me/us.

Petitioner insists that by virtue of the clear wording of the statement, specifically the clause ". . . we
jointly and severally agree and undertake . . .," and the concluding sentence on exhaustion, Chi's
liability therein is solidary.

In holding otherwise, the public respondent ratiocinates as follows:

With respect to the second argument, we have our misgivings as to whether the mere
signature of defendant-appellee Chi of (sic) the guaranty agreement, Exhibit "C-1",
will make it an actionable document. It should be noted that Exhibit "C-1" was
prepared and printed by the plaintiff-appellant. A perusal of Exhibit "C-1" shows that it
was to be signed and executed by two persons. It was signed only by defendant-
appellee Chi. Exhibit "C-1" was to be witnessed by two persons, but no one signed in
that capacity. The last sentence of the guaranty clause is incomplete. Furthermore,
the plaintiff-appellant also failed to have the purported guarantee clause
acknowledged before a notary public. All these show that the alleged guaranty
provision was disregarded and, therefore, not consummated.
 But granting arguendo that the guaranty provision in Exhibit "C-1" was fully executed
and acknowledged still defendant-appellee Chi cannot be held liable thereunder
because the records show that the plaintiff-appellant had neither exhausted the
property of the defendant-appellant nor had it resorted to all legal remedies against
the said defendant-appellant as provided in Article 2058 of the Civil Code. The
obligation of a guarantor is merely accessory under Article 2052 of the Civil Code and
subsidiary under Article 2054 of the Civil Code. Therefore, the liability of the
defendant-appellee arises only when the principal debtor fails to comply with his
obligation. 27

Our own reading of the questioned solidary guaranty clause yields no other conclusion than that the
obligation of Chi is only that of a guarantor. This is further bolstered by the last sentence which
speaks of waiver of exhaustion, which, nevertheless, is ineffective in this case because the space
therein for the party whose property may not be exhausted was not filled up. Under Article 2058 of the
Civil Code, the defense of exhaustion (excussion) may be raised by a guarantor before he may be
held liable for the obligation. Petitioner likewise admits that the questioned provision is a solidary
guaranty clause, thereby clearly distinguishing it from a contract of surety. It, however, described the
guaranty as solidary between the guarantors; this would have been correct if two (2) guarantors had
signed it. The clause "we jointly and severally agree and undertake" refers to the undertaking of the
two (2) parties who are to sign it or to the liability existing between themselves. It does not refer to the
undertaking between either one or both of them on the one hand and the petitioner on the other with
respect to the liability described under the trust receipt. Elsewise stated, their liability is not divisible as
between them, i.e., it can be enforced to its full extent against any one of them.

Furthermore, any doubt as to the import, or true intent of the solidary guaranty clause should be
resolved against the petitioner. The trust receipt, together with the questioned solidary guaranty
clause, is on a form drafted and prepared solely by the petitioner; Chi's participation therein is limited
to the affixing of his signature thereon. It is, therefore, a contract of adhesion; 28 as such, it must be
strictly construed against the party responsible for its preparation. 29

Neither can We agree with the reasoning of the public respondent that this solidary guaranty clause
was effectively disregarded simply because it was not signed and witnessed by two (2) persons and
acknowledged before a notary public. While indeed, the clause ought to have been signed by two (2)
guarantors, the fact that it was only Chi who signed the same did not make his act an idle ceremony
or render the clause totally meaningless. By his signing, Chi became the sole guarantor. The
attestation by witnesses and the acknowledgement before a notary public are not required by law to
make a party liable on the instrument. The rule is that contracts shall be obligatory in whatever form
they may have been entered into, provided all the essential requisites for their validity are present;
however, when the law requires that a contract be in some form in order that it may be valid or
enforceable, or that it be proved in a certain way, that requirement is absolute and
indispensable. 30 With respect to a guaranty, 31 which is a promise to answer for the debt or default of
another, the law merely requires that it, or some note or memorandum thereof, be in writing.
Otherwise, it would be unenforceable unless ratified. 32 While the acknowledgement of a surety before
a notary public is required to make the same a  public document, under Article 1358 of the Civil Code,
a contract of guaranty does not have to appear in a public document.

And now to the other ground relied upon by the petitioner as basis for the solidary liability of Chi,
namely the criminal proceedings against the latter for the violation of P.D. No. 115. Petitioner claims
that because of the said criminal proceedings, Chi would be answerable for the civil liability arising
therefrom pursuant to Section 13 of P.D. No. 115. Public respondent rejected this claim because such
civil liability presupposes prior conviction as can be gleaned from the phrase "without prejudice to the
civil liability arising from the criminal offense." Both are wrong. The said section reads:

Sec. 13. Penalty Clause. — The failure of an entrustee to turn over the proceeds of
the sale of the goods, documents or instruments covered by a trust receipt to the
extent of the amount owing to the entruster or as appears in the trust receipt or to
return said goods, documents or instruments if they were not sold or disposed of in
accordance with the terms of the trust receipt shall constitute the crime of estafa,
punishable under the provisions of Article Three hundred and fifteen, paragraph one
 (b) of Act Numbered Three thousand eight hundred and fifteen, as amended,
otherwise known as the Revised Penal Code. If the violation or offense is committed
by a corporation, partnership, association or other juridical entities, the penalty
provided for in this Decree shall be imposed upon the directors, officers, employees
or other officials or persons therein responsible for the offense, without prejudice to
the civil liabilities arising from the criminal offense.

A close examination of the quoted provision reveals that it is the last sentence which provides for the
correct solution. It is clear that if the violation or offense is committed by a corporation, partnership,
association or other juridical entities, the penalty shall be imposed upon the directors, officers,
employees or other officials or persons therein responsible for the offense. The penalty referred to is
imprisonment, the duration of which would depend on the amount of the fraud as provided for in
Article 315 of the Revised Penal Code. The reason for this is obvious: corporations, partnerships,
associations and other juridical entities cannot be put in jail. However, it is these entities which are
made liable for the civil liability arising from the criminal offense. This is the import of the clause
"without prejudice to the civil liabilities arising from the criminal offense." And, as We stated earlier,
since that violation of a trust receipt constitutes fraud under Article 33 of the Civil Code, petitioner was
acting well within its rights in filing an independent civil action to enforce the civil liability arising
therefrom against Philippine Rayon.

The remaining issue to be resolved concerns the propriety of the dismissal of the case against private
respondent Chi. The trial court based the dismissal, and the respondent Court its affirmance thereof,
on the theory that Chi is not liable on the trust receipt in any capacity — either as surety or as
guarantor — because his signature at the dorsal portion thereof was useless; and even if he could be
bound by such signature as a simple guarantor, he cannot, pursuant to Article 2058 of the Civil Code,
be compelled to pay until
after petitioner has exhausted and resorted to all legal remedies against the principal debtor,
Philippine Rayon. The records fail to show that petitioner had done so 33 Reliance is thus placed on
Article 2058 of the Civil Code which provides:

Art. 2056. The guarantor cannot be compelled to pay the creditor unless the latter has
exhausted all the property of the debtor, and has resorted to all the legal remedies
against the debtor.

Simply stated, there is as yet no cause of action against Chi.

We are not persuaded. Excussion is not a condition sine qua non for the institution of an action
against a guarantor. In Southern Motors, Inc.  vs. Barbosa, 34 this Court stated:

4. Although an ordinary personal guarantor — not a mortgagor or pledgor — may

demand the aforementioned exhaustion, the creditor may, prior thereto, secure a
judgment against said guarantor, who shall be entitled, however, to a deferment of
the execution of said judgment against him until after the properties of the principal
debtor shall have been exhausted to satisfy the obligation involved in the case.

There was then nothing procedurally objectionable in impleading private respondent Chi as a co-
defendant in Civil Case No. Q-19312 before the trial court. As a matter of fact, Section 6, Rule 3 of the
Rules of Court on permissive joinder of parties explicitly allows it. It reads:

Sec. 6. Permissive joinder of parties. — All persons in whom or against whom any
right to relief in respect to or arising out of the same transaction or series of
transactions is alleged to exist, whether jointly, severally, or in the alternative, may,
except as otherwise provided in these rules, join as plaintiffs or be joined as
defendants in one complaint, where any question of law or fact common to all such
plaintiffs or to all such defendants may arise in the action; but the court may make
such orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any proceedings in which he may
have no interest.
This is the equity rule relating to multifariousness. It is based on trial convenience and is designed to
permit the joinder of plaintiffs or defendants whenever there is a common question of law or fact. It will
save the parties unnecessary work, trouble and expense. 35

However, Chi's liability is limited to the principal obligation in the trust receipt plus all the accessories
thereof including judicial costs; with respect to the latter, he shall only be liable for those costs
incurred after being judicially required to pay. 36 Interest and damages, being accessories of the
principal obligation, should also be paid; these, however, shall run only from the date of the filing of
the complaint. Attorney's fees may even be allowed in appropriate cases. 37

In the instant case, the attorney's fees to be paid by Chi cannot be the same as that to be paid by
Philippine Rayon since it is only the trust receipt that is covered by the guaranty and not the full extent
of the latter's liability. All things considered, he can be held liable for the sum of P10,000.00 as
attorney's fees in favor of the petitioner.

Thus, the trial court committed grave abuse of discretion in dismissing the complaint as against
private respondent Chi and condemning petitioner to pay him P20,000.00 as attorney's fees.

In the light of the foregoing, it would no longer necessary to discuss the other issues raised by the
petitioner

WHEREFORE, the instant Petition is hereby GRANTED.

The appealed Decision of 10 March 1986 of the public respondent in AC-G.R. CV No. 66733
and, necessarily, that of Branch 9 (Quezon City) of the then Court of First Instance of Rizal in
Civil Case No. Q-19312 are hereby REVERSED and SET ASIDE and another is hereby
entered:

1. Declaring private respondent Philippine Rayon Mills, Inc. liable on

the twelve drafts in question (Exhibits "X", "X-1" to "X-11", inclusive)
and on the trust receipt (Exhibit "C"), and ordering it to pay petitioner:
(a) the amounts due thereon in the total sum of P956,384.95 as of 15
September 1974, with interest thereon at six percent (6%) per annum
from 16 September 1974 until it is fully paid, less whatever may have
been applied thereto by virtue of foreclosure of mortgages, if any; (b)
a sum equal to ten percent (10%) of the aforesaid amount as
attorney's fees; and (c) the costs.

2. Declaring private respondent Anacleto R. Chi secondarily liable on

the trust receipt and ordering him to pay the face value thereof, with
interest at the legal rate, commencing from the date of the filing of the
complaint in Civil Case No. Q-19312 until the same is fully paid as
well as the costs and attorney's fees in the sum of P10,000.00 if the
writ of execution for the enforcement of the above awards against
Philippine Rayon Mills, Inc. is returned unsatisfied.

Costs against private respondents.

SO ORDERED.
 HEIRS OF EDUARDO G.R. No. 157547
SIMON,
Petitioners,  
 
 -versus -
 
 
ELVIN* CHAN AND THE COURT OF
APPEALS,
Respondent.

 
DECISION
 
BERSAMIN, J.:
 
There is no independent civil action to recover the civil liability arising from the issuance of an
unfunded check prohibited and punished under Batas Pambansa Bilang 22(BP 22).
 
Antecedents
 
On July 11, 1997, the Office of the City Prosecutor of Manila filed in the Metropolitan Trial
Court of Manila (MeTC) an information charging the late Eduardo Simon (Simon) with a violation of
BP 22, docketed as Criminal Case No. 275381 entitled People v. Eduardo Simon. The accusatory
portion reads:
 
That sometime in December 1996 in the City of Manila, Philippines, the said
accused, did then and there willfully, unlawfully and feloniously make or draw and
issue to Elvin Chan to apply on account or for value Landbank Check No. 0007280
dated December 26, 1996 payable to cash in the amount of P336,000.00 said
accused well knowing that at the time of issue she/he/they did not have sufficient
funds in or credit with the drawee bank for payment of such check in full upon its
presentment, which check when presented for payment within ninety (90) days from
the date thereof was subsequently dishonored by the drawee bank for Account
Closed and despite receipt of notice of such dishonor, said accused failed to pay said
Elvin Chan the amount of the check or to make arrangement for full payment of the
same within five (5) banking days after receiving said notice.
 
CONTRARY TO LAW. [1]
 
 
More than three years later, or on August 3, 2000, respondent Elvin Chan commenced in the
MeTC in Pasay City a civil action for the collection of the principal amount of P336,000.00, coupled
with an application for a writ of preliminary attachment (docketed as Civil Case No. 915-00). [2] He
alleged in his complaint the following:
 
xxx
2. Sometime in December 1996 defendant employing fraud, deceit, and
misrepresentation encashed a check dated December 26, 1996 in the amount
of P336,000.00 to the plaintiff assuring the latter that the check is duly funded and
 that he had an existing account with the Land Bank of the Philippines, xerox copy of
the said check is hereto attached as Annex A;
 
3. However, when said check was presented for payment the same was
dishonored on the ground that the account of the defendant with the Land Bank of the
Philippines has been closed contrary to his representation that he has an existing
account with the said bank and that the said check was duly funded and will be
honored when presented for payment;
 
4. Demands had been made to the defendant for him to make good the
payment of the value of the check, xerox copy of the letter of demand is hereto
attached as Annex B, but despite such demand defendant refused and continues to
refuse to comply with plaintiffs valid demand;
 
5. Due to the unlawful failure of the defendant to comply with the plaintiffs valid
demands, plaintiff has been compelled to retain the services of counsel for which he
agreed to pay as reasonable attorneys fees the amount of P50,000.00 plus additional
amount of P2,000.00 per appearance.
 
ALLEGATION IN SUPPORT OF PRAYER
FOR PRELIMINARY ATTACHMENT
 
6. The defendant as previously alleged has been guilty of fraud in contracting
the obligation upon which this action is brought and that there is no sufficient security
for the claims sought in this action which fraud consist in the misrepresentation by the
defendant that he has an existing account and sufficient funds to cover the check
when in fact his account was already closed at the time he issued a check;
 
7. That the plaintiff has a sufficient cause of action and this action is one which
falls under Section 1, sub-paragraph (d), Rule 57 of the Revised Rules of Court of the
Philippines and the amount due the plaintiff is as much as the sum for which the
plaintiff seeks the writ of preliminary attachment;
 
8. That the plaintiff is willing and able to post a bond conditioned upon the
payment of damages should it be finally found out that the plaintiff is not entitled to
the issuance of a writ of preliminary attachment.[3]
 
 
On August 9, 2000, the MeTC in Pasay City issued a writ of preliminary attachment, which
was implemented on August 17, 2000 through the sheriff attaching a Nissan vehicle of Simon. [4]
 
On August 17, 2000, Simon filed an urgent motion to dismiss with application to charge
plaintiffs attachment bond for damages,[5] pertinently averring:
 
xxx
On the ground of litis pendentia, that is, as a consequence of the pendency of
another action between the instant parties for the same cause before the Metropolitan
Trial Court of Manila, Branch X (10) entitled People of the Philippines vs. Eduardo
Simon, docketed thereat as Criminal Case No. 275381-CR, the instant action is
dismissable under Section 1, (e), Rule 16, 1997 Rules of Civil Procedure, xxx
xxx
While the instant case is civil in nature and character as contradistinguished
from the said Criminal Case No. 915-00 in the Metropolitan Trial Court of Manila,
Branch X (10), the basis of the instant civil action is the herein plaintiffs criminal
complaint against defendant arising from a charge of violation of Batas Pambansa
Blg. 22 as a consequence of the alleged dishonor in plaintiffs hands upon
presentment for payment with drawee bank a Land Bank Check No. 0007280 dated
December 26, 1996 in the amount of P336,000- drawn allegedly issued to plaintiff by
defendant who is the accused in said case, a photocopy of the Criminal information
 filed by the Assistant City Prosecutor of Manila on June 11, 1997 hereto attached and
made integral part hereof as Annex 1.
 
It is our understanding of the law and the rules, that, when a criminal action is
instituted, the civil action for recovery of civil liability arising from the offense charged
is impliedly instituted with the criminal action, unless the offended party expressly
waives the civil action or reserves his right to institute it separately xxx.
 
 
On August 29, 2000, Chan opposed Simons urgent motion to dismiss with application to
charge plaintiffs attachment bond for damages, stating:
 
1. The sole ground upon which defendant seeks to dismiss plaintiffs complaint
is the alleged pendency of another action between the same parties for the same
cause, contending among others that the pendency of Criminal Case No. 275381-CR
entitled People of the Philippines vs. Eduardo Simon renders this case dismissable;
 
2. The defendant further contends that under Section 1, Rule 111 of the
Revised Rules of Court, the filing of the criminal action, the civil action for recovery of
civil liability arising from the offense charged is impliedly instituted with the criminal
action which the plaintiff does not contest; however, it is the submission of the plaintiff
that an implied reservation of the right to file a civil action has already been made,
first, by the fact that the information for violation of B.P. 22 in Criminal Case No.
2753841 does not at all make any allegation of damages suffered by the plaintiff nor
is there any claim for recovery of damages; on top of this the plaintiff as private
complainant in the criminal case, during the presentation of the prosecution evidence
was not represented at all by a private prosecutor such that no evidence has been
adduced by the prosecution on the criminal case to prove damages; all of these we
respectfully submit demonstrate an effective implied reservation of the right of the
plaintiff to file a separate civil action for damages;
 
3. The defendant relies on Section 3 sub-paragraph (a) Rule 111 of the
Revised Rules of Court which mandates that after a criminal action has been
commenced the civil action cannot be instituted until final judgment has been
rendered in the criminal action; however, the defendant overlooks and conveniently
failed to consider that under Section 2, Rule 111 which provides as follows:
 
In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil
Code of the Philippines, an independent civil action entirely separate and
distinct from the criminal action, may be brought by the injured party during
the pendency of criminal case provided the right is reserved as required in
the preceding section. Such civil action shall proceed independently of the
criminal prosecution, and shall require only a preponderance of evidence.
 
In as much as the case is one that falls under Art. 33 of the Civil Code of
the Philippines as it is based on fraud, this action therefore may be prosecuted
independently of the criminal action;
 
4. In fact we would even venture to state that even without any reservation at all
of the right to file a separate civil action still the plaintiff is authorized to file this instant
case because the plaintiff seeks to enforce an obligation which the defendant owes to
the plaintiff by virtue of the negotiable instruments law. The plaintiff in this case sued
the defendant to enforce his liability as drawer in favor of the plaintiff as payee of the
check. Assuming the allegation of the defendant of the alleged circumstances relative
to the issuance of the check, still when he delivered the check payable to bearer to
that certain Pedro Domingo, as it was payable to cash, the same may be negotiated
by delivery by who ever was the bearer of the check and such negotiation was valid
and effective against the drawer;
 
 5. Indeed, assuming as true the allegations of the defendant regarding the
circumstances relative to the issuance of the check it would be entirely impossible for
the plaintiff to have been aware that such check was intended only for a definite
person and was not negotiable considering that the said check was payable to bearer
and was not even crossed;
 
6. We contend that what cannot be prosecuted separate and apart from the
criminal case without a reservation is a civil action arising from the criminal offense
charged. However, in this instant case since the liability of the defendant are imposed
and the rights of the plaintiff are created by the negotiable instruments law, even
without any reservation at all this instant action may still be prosecuted;
 
7. Having this shown, the merits of plaintiffs complaint the application for
damages against the bond is totally without any legal support and perforce should be
dismissed outright.[6]
 
 
On October 23, 2000, the MeTC in Pasay City granted Simons urgent motion to dismiss with
application to charge plaintiffs attachment bond for damages,[7] dismissing the complaint of Chan
because:
 
xxx
After study of the arguments of the parties, the court resolves to GRANT the
Motion to Dismiss and the application to charge plaintiffs bond for damages.
 
For litis pendentia to be a ground for the dismissal of an action, the following
requisites must concur: (a) identity of parties or at least such as to represent the
same interest in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same acts; and (c) the identity in the two (2) cases should
be such that the judgment, which may be rendered in one would, regardless of which
party is successful, amount to res judicata in the other. xxx
 
A close perusal of the herein complaint denominated as Sum of Money and the
criminal case for violation of BP Blg. 22 would readily show that the parties are not
only identical but also the cause of action being asserted, which is the recovery of the
value of Landbank Check No. 0007280 in the amount of P336,000.00. In both civil
and criminal cases, the rights asserted and relief prayed for, the reliefs being founded
on the same facts, are identical.
 
Plaintiffs claim that there is an effective implied waiver of his right to pursue this
civil case owing to the fact that there was no allegation of damages in BP Blg. 22
case and that there was no private prosecutor during the presentation of prosecution
evidence is unmeritorious. It is basic that when a complaint or criminal Information is
filed, even without any allegation of damages and the intention to prove and claim
them, the offended party has the right to prove and claim for them, unless a waiver or
reservation is made or unless in the meantime, the offended party has instituted a
separate civil action. xxx The over-all import of the said provision conveys that the
waiver which includes indemnity under the Revised Penal Code, and damages
arising under Articles 32, 33, and 34 of the Civil Code must be both clear and
express. And this must be logically so as the primordial objective of the Rule is to
prevent the offended party from recovering damages twice for the same act or
omission of the accused.
 
Indeed, the evidence discloses that the plaintiff did not waive or made a
reservation as to his right to pursue the civil branch of the criminal case for violation
of BP Blg. 22 against the defendant herein. To the considered view of this court, the
filing of the instant complaint for sum of money is indeed legally barred. The right to
institute a separate civil action shall be made before the prosecution starts to present
its evidence and under circumstances affording the offended party a reasonable
opportunity to make such reservation. xxx
  
Even assuming the correctness of the plaintiffs submission that the herein case
for sum of money is one based on fraud and hence falling under Article 33 of the Civil
Code, still prior reservation is required by the Rules, to wit:
 
In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil
Code of the Philippines, an independent civil action entirely separate and
distinct from the criminal action, may be brought by the injured party during
the pendency of criminal case provided the right is reserved as required in
the preceding section. Such civil action shall proceed independently of the
criminal prosecution, and shall require only a preponderance of evidence.
 
xxx
WHEREFORE, premises considered, the court resolves to:
 
1.      Dismiss the instant complaint on the ground of litis pendentia;
 
2.      Dissolve/Lift the Writ of Attachment issued by this court on August 14,
2000;
 
3.      Charge the plaintiffs bond the amount of P336,000.00 in favor of the
defendant for the damages sustained by the latter by virtue of the
implementation of the writ of attachment;
 
4.      Direct the Branch Sheriff of this Court to RESTORE with utmost dispatch
to the defendants physical possession the vehicle seized from him on
August 16, 2000; and
 
5.      Direct the plaintiff to pay the defendant the sum of P5,000.00 by way of
attorneys fees.
 
SO ORDERED.
 
Chans motion for reconsideration was denied on December 20, 2000,[8] viz:
 
Considering that the plaintiffs arguments appear to be a mere repetition of his
previous submissions, and which submissions this court have already passed upon;
and taking into account the inapplicability of the ratio decidendi in the Tactaquin vs.
Palileo case which the plaintiff cited as clearly in that case, the plaintiff therein
expressly made a reservation to file a separate civil action, the Motion for
Reconsideration is DENIED for lack of merit.
 
SO ORDERED.
 
On July 31, 2001, the Regional Trial Court (RTC) in Pasay City upheld the dismissal of Chans
complaint, disposing:[9]
 
WHEREFORE, finding no error in the appealed decision, the same is hereby
AFFIRMED in toto.
 
SO ORDERED.
 
On September 26, 2001, Chan appealed to the Court of Appeals (CA) by petition for review,
[10]
 challenging the propriety of the dismissal of his complaint on the ground of litis pendentia.
 
In his comment, [11] Simon countered that Chan was guilty of bad faith and malice in
prosecuting his alleged civil claim twice in a manner that caused him (Simon) utter embarrassment
and emotional sufferings; and that the dismissal of the civil case because of the valid ground of  litis
pendentia  based on Section 1 (e), Rule 16 of the 1997 Rules of Civil Procedure was warranted.
 
 On June 25, 2002, the CA promulgated its assailed decision, [12] overturning the RTC, viz:
 
xxx
As a general rule, an offense causes two (2) classes of injuries. The first is the
social injury produced by the criminal act which is sought to be repaired through the
imposition of the corresponding penalty, and the second is the personal injury caused
to the victim of the crime which injury is sought to be compensated through indemnity
which is also civil in nature. Thus, every person criminally liable for a felony is also
civilly liable.
 
The offended party may prove the civil liability of an accused arising from the
commission of the offense in the criminal case since the civil action is either deemed
instituted with the criminal action or is separately instituted.
 
Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which became
effective on December 1, 2000, provides that:
 
(a)    When a criminal action is instituted, the civil action for the recovery
of civil liability arising from the offense charged shall be deemed
instituted with the criminal action unless the offended party waives
the civil action, reserves the right to institute it separately or institute
the civil action prior to the criminal action.
 
Rule 111, Section 2 further states:
 
After the criminal action has been commenced, the separate civil
action arising therefrom cannot be instituted until final judgment has
been entered in the criminal action.
 
However, with respect to civil actions for recovery of civil liability under Articles
32, 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule
has been changed.
 
In DMPI Employees Credit Association vs. Velez, the Supreme Court
pronounced that only the civil liability arising from the offense charged is deemed
instituted with the criminal action unless the offended party waives the civil action,
reserves his right to institute it separately, or institutes the civil action prior to the
criminal action. Speaking through Justice Pardo, the Supreme Court held:
 
There is no more need for a reservation of the right to file the
independent civil action under Articles 32, 33, 34 and 2176 of the Civil
Code of the Philippines. The reservation and waiver referred to refers
only to the civil action for the recovery of the civil liability arising from
the offense charged. This does not include recovery of civil liability
under Articles 32, 33, 34, and 2176 of the Civil Code of
the Philippines arising from the same act or omission which may be
prosecuted separately without a reservation.
 
Rule 111, Section 3 reads:
 
Sec. 3. When civil action may proceed independently. In the
cases provided in Articles 32, 33, 34, and 2176 of the Civil Code of
the Philippines, the independent civil action may be brought by the
offended party. It shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the
same act or omission charged in the criminal action.
 
 The changes in the Revised Rules on Criminal Procedure
pertaining to independent civil actions which became effective
on December 1, 2000 are applicable to this case.
 
Procedural laws may be given retroactive effect to actions pending
and undetermined at the time of their passage. There are no vested
rights in the rules of procedure. xxx
 
Thus, Civil Case No. CV-94-124, an independent civil action for
damages on account of the fraud committed against respondent
Villegas under Article 33 of the Civil Code, may proceed independently
even if there was no reservation as to its filing.
 
It must be pointed that the abovecited case is similar with the instant suit. The
complaint was also brought on allegation of fraud under Article 33 of the Civil Code
and committed by the respondent in the issuance of the check which later bounced. It
was filed before the trial court, despite the pendency of the criminal case for violation
of BP 22 against the respondent. While it may be true that the changes in the
Revised Rules on Criminal Procedure pertaining to independent civil action became
effective on December 1, 2000, the same may be given retroactive application and
may be made to apply to the case at bench, since procedural rules may be given
retroactive application. There are no vested rights in the rules of procedure.
 
 
 
In view of the ruling on the first assigned error, it is therefore an error to
adjudge damages in favor of the petitioner.
 
WHEREFORE, the petition is hereby GRANTED. The Decision dated July 13,
2001 rendered by the Regional Trial Court of Pasay City, Branch 108 affirming the
dismissal of the complaint filed by petitioner is hereby REVERSED and SET ASIDE.
The case is hereby REMANDED to the trial court for further proceedings.
 
SO ORDERED.
 
On March 14, 2003, the CA denied Simons motion for reconsideration.[13]
 
Hence, this appeal, in which the petitioners submit that the CA erroneously premised its
decision on the assessment that the civil case was an independent civil action under Articles 32, 33,
34, and 2176 of the Civil Code; that the CAs reliance on the ruling in DMPI Employees Credit
Cooperative Inc. v. Velez[14] stretched the meaning and intent of the ruling, and was contrary to
Sections 1 and 2 of Rule 111 of the Rules of Criminal Procedure; that this case was a simple
collection suit for a sum of money, precluding the application of Section 3 of Rule 111 of the Rules of
Criminal Procedure.[15]
In his comment,[16] Chan counters that the petition for review should be denied because the petitioners
used the wrong mode of appeal; that his cause of action, being based on fraud, was an independent
civil action; and that the appearance of a private prosecutor in the criminal case did not preclude the
filing of his separate civil action.
 
 
 
 
Issue
 
The lone issue is whether or not Chans civil action to recover the amount of the unfunded check (Civil
Case No. 915-00) was an independent civil action.
 
Ruling
 
The petition is meritorious.
 
A
Applicable Law and Jurisprudence on the
Propriety of filing a separate civil action based on BP 22
 
The Supreme Court has settled the issue of whether or not a violation of BP 22 can give rise
to civil liability in Banal v. Judge Tadeo, Jr.,[17] holding:
 
xxx
Article 20 of the New Civil Code provides:
 
Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
 
Regardless, therefore, of whether or not a special law so provides, indemnification
of the offended party may be had on account of the damage, loss or injury directly
suffered as a consequence of the wrongful act of another. The indemnity which a
person is sentenced to pay forms an integral part of the penalty imposed by law for
the commission of a crime (Quemel v. Court of Appeals, 22 SCRA 44, citing Bagtas
v. Director of Prisons, 84 Phil 692). Every crime gives rise to a penal or criminal
action for the punishment of the guilty party, and also to civil action for the restitution
of the thing, repair of the damage, and indemnification for the losses (United States
v. Bernardo, 19 Phil 265).
xxx
Civil liability to the offended party cannot thus be denied. The payee of the check is
entitled to receive the payment of money for which the worthless check was
issued. Having been caused the damage, she is entitled to recompense.
 
Surely, it could not have been the intendment of the framers of Batas Pambansa
Blg. 22 to leave the offended private party defrauded and empty-handed by
excluding the civil liability of the offender, giving her only the remedy, which in many
cases results in a Pyrrhic victory, of having to file a separate civil suit. To do so may
leave the offended party unable to recover even the face value of the check due
her, thereby unjustly enriching the errant drawer at the expense of the payee. The
protection which the law seeks to provide would, therefore, be brought to naught.
xxx
 
However, there is no independent civil action to recover the value of a bouncing check issued in
contravention of BP 22. This is clear from Rule 111 of the Rules of Court,  effective December 1,
2000, which relevantly provides:
 
Section 1. Institution of criminal and civil actions. - (a) When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense
charged shall be deemed instituted with the criminal action unless the offended party
waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
 
The reservation of the right to institute separately the civil action shall be made
before the prosecution starts presenting its evidence and under circumstances
affording the offended party a reasonable opportunity to make such reservation.
 
When the offended party seeks to enforce civil liability against the accused by
way of moral, nominal, temperate, or exemplary damages without specifying the
amount thereof in the complaint or information, the filing fees therefor shall constitute
a first lien on the judgment awarding such damages.
 
Where the amount of damages, other than actual, is specified in the complaint
or information, the corresponding filing fees shall be paid by the offended party upon
the filing thereof in court.
 
 Except as otherwise provided in these Rules, no filing fees shall be required for
actual damages.
 
No counterclaim, cross-claim or third-party complaint may be filed by the
accused in the criminal case, but any cause of action which could have been the
subject thereof may be litigated in a separate civil action. (1a)
 
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to include the corresponding civil action. No reservation to file such
civil action separately shall be allowed.[18]
 
Upon filing of the aforesaid joint criminal and civil actions, the offended party
shall pay in full the filing fees based on the amount of the check involved, which shall
be considered as the actual damages claimed. Where the complaint or information
also seeks to recover liquidated, moral, nominal, temperate or exemplary damages,
the offended party shall pay the filing fees based on the amounts alleged therein. If
the amounts are not so alleged but any of these damages are subsequently awarded
by the court, the filing fees based on the amount awarded shall constitute a first lien
on the judgment.
 
Where the civil action has been filed separately and trial thereof has not yet
commenced, it may be consolidated with the criminal action upon application with the
court trying the latter case. If the application is granted, the trial of both actions shall
proceed in accordance with section 2 of the Rule governing consolidation of the civil
and criminal actions.
 
Section 3. When civil action may proceed independently. In the cases provided
in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent
civil action may be brought by the offended party. It shall proceed independently of
the criminal action and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same act or
omission charged in the criminal action.
 
 
The aforequoted provisions of the Rules of Court, even if not yet in effect when Chan
commenced Civil Case No. 915-00 on August 3, 2000, are nonetheless applicable. It is axiomatic that
the retroactive application of procedural laws does not violate any right of a person who may feel
adversely affected, nor is it constitutionally objectionable. The reason is simply that, as a general rule,
no vested right may attach to, or arise from, procedural laws. [19] Any new rules may validly be made to
apply to cases pending at the time of their promulgation, considering that no party to an action has a
vested right in the rules of procedure, [20] except that in criminal cases, the changes do not retroactively
apply if they permit or require a lesser quantum of evidence to convict than what is required at the
time of the commission of the offenses, because such retroactivity would be unconstitutional for
being ex post facto under the Constitution.[21]
Moreover, the application of the rule would not be precluded by the violation of any assumed
vested right, because the new rule was adopted from Supreme Court Circular 57-97 that took effect
on November 1, 1997.
 
Supreme Court Circular 57-97 states:
 
Any provision of law or Rules of Court to the contrary notwithstanding, the
following rules and guidelines shall henceforth be observed in the filing and
prosecution of all criminal cases under Batas Pambansa Blg. 22 which penalizes the
making or drawing and issuance of a check without funds or credit:
 
1. The criminal action for violation of Batas Pambansa Blg. 22 shall be
deemed to necessarily include the corresponding civil action, and no
reservation to file such civil action separately shall be allowed or recognized. [22]
2. Upon the filing of the aforesaid joint criminal and civil actions, the offended
party shall pay in full the filing fees based upon the amount of the check involved
 which shall be considered as the actual damages claimed, in accordance with the
schedule of fees in Section 7 (a) and Section 8 (a), Rule 141 of the Rules of Court as
last amended by Administrative Circular No. 11-94 effective August 1, 1994. Where
the offended party further seeks to enforce against the accused civil liability by way of
liquidated, moral, nominal, temperate or exemplary damages, he shall pay the
corresponding filing fees therefor based on the amounts thereof as alleged either in
the complaint or information. If not so alleged but any of these damages are
subsequently awarded by the court, the amount of such fees shall constitute a first
lien on the judgment.
3. Where the civil action has heretofore been filed separately and trial thereof
has not yet commenced, it may be consolidated with the criminal action upon
application with the court trying the latter case. If the application is granted, the trial of
both actions shall proceed in accordance with the pertinent procedure outlined in
Section 2 (a) of Rule 111 governing the proceedings in the actions as thus
consolidated.
4. This Circular shall be published in two (2) newspapers of general circulation
and shall take effect on November 1, 1997.
 
 
The reasons for issuing Circular 57-97 were amply explained in Hyatt Industrial
Manufacturing Corporation v. Asia Dynamic Electrix Corporation, [23]  thus:
 
 
xxx
We agree with the ruling of the Court of Appeals that upon filing of the criminal
cases for violation of B.P. 22, the civil action for the recovery of the amount of the
checks was also impliedly instituted under Section 1(b) of Rule 111 of the 2000 Rules
on Criminal Procedure. Under the present revised Rules, the criminal action for
violation of B.P. 22 shall be deemed to include the corresponding civil action.  The
reservation to file a separate civil action is no longer needed. The Rules provide:
 
Section 1.  Institution of criminal and civil actions.
 
(a)     x x x
 
(b)    The criminal action for violation of Batas Pambansa Blg. 22 shall
be deemed to include the corresponding civil action.  No reservation to file
such civil action separately shall be allowed.
 
Upon filing of the aforesaid joint criminal and civil actions, the offended
party shall pay in full the filing fees based on the amount of the check
involved, which shall be considered as the actual damages claimed. 
Where the complaint or information also seeks to recover liquidated, moral,
nominal, temperate or exemplary damages, the offended party shall pay
additional filing fees based on the amounts alleged therein.  If the amounts
are not so alleged but any of these damages are subsequently awarded by
the court, the filing fees based on the amount awarded shall constitute a
first lien on the judgment.
 
Where the civil action has been filed separately and trial thereof has
not yet commenced, it may be consolidated with the criminal action upon
application with the court trying the latter case.  If the application is granted,
the trial of both actions shall proceed in accordance with section 2 of this
Rule governing consolidation of the civil and criminal actions.
 
The foregoing rule was adopted from Circular No. 57-97 of this Court. It
specifically states that the criminal action for violation of B.P. 22 shall be deemed to
include the corresponding civil action.  It also requires the complainant to pay in full
the filing fees based on the amount of the check involved. Generally, no filing fees are
required for criminal cases, but because of the inclusion of the civil action in
 complaints for violation of B.P. 22, the Rules require the payment of docket fees upon
the filing of the complaint.  This rule was enacted to help declog court dockets
which are filled with B.P. 22 cases as creditors actually use the courts as
collectors.  Because ordinarily no filing fee is charged in criminal cases for
actual damages, the payee uses the intimidating effect of a criminal charge to
collect his credit gratis and sometimes, upon being paid, the trial court is not
even informed thereof. The inclusion of the civil action in the criminal case is
expected to significantly lower the number of cases filed before the courts for
collection based on dishonored checks.  It is also expected to expedite the
disposition of these cases.  Instead of instituting two separate cases, one for
criminal and another for civil, only a single suit shall be filed and tried.  It
should be stressed that the policy laid down by the Rules is to discourage the
separate filing of the civil action. The Rules even prohibit the reservation of a
separate civil action, which means that one can no longer file a separate civil
case after the criminal complaint is filed in court.  The only instance when
separate proceedings are allowed is when the civil action is filed ahead of the
criminal case.  Even then, the Rules encourage the consolidation of the civil
and criminal cases.  We have previously observed that a separate civil action
for the purpose of recovering the amount of the dishonored checks would only
prove to be costly, burdensome and time-consuming for both parties and
would further delay the final disposition of the case.  This multiplicity of suits
must be avoided.  Where petitioners rights may be fully adjudicated in the
proceedings before the trial court, resort to a separate action to recover civil
liability is clearly unwarranted. In view of this special rule governing actions for
violation of B.P. 22, Article 31 of the Civil Code cited by the trial court will not
apply to the case at bar.[24]
 
The CAs reliance on DMPI Employees Credit Association v. Velez [25] to give due course to the
civil action of Chan independently and separately of Criminal Case No. 275381
was unwarranted. DMPI Employees, which involved a prosecution for estafa,  is not on all fours with
this case, which is a prosecution for a violation of BP 22. Although the Court has ruled that the
issuance of a bouncing check may result in two separate and distinct crimes of estafa and violation of
BP 22,[26] the procedures for the recovery of the civil liabilities arising from these two distinct crimes
are different and non-interchangeable. In prosecutions of estafa, the offended party may opt to
reserve his right to file a separate civil action, or may institute an independent action based on fraud
pursuant to Article 33 of the Civil Code,[27] as DMPI Employees has allowed. In prosecutions of
violations of BP 22, however, the Court has adopted a policy to prohibit the reservation or institution of
a separate civil action to claim the civil liability arising from the issuance of the bouncing check upon
the reasons delineated in Hyatt Industrial Manufacturing Corporation, supra.
 
To repeat, Chans separate civil action to recover the amount of the check involved in the prosecution
for the violation of BP 22 could not be independently maintained under both Supreme Court Circular
57-97 and the aforequoted provisions of Rule 111 of the Rules of Court, notwithstanding the
allegations of fraud and deceit.
 
B
Aptness of the dismissal of the civil action
on the ground of litis pendentia
 
Did the pendency of the civil action in the MeTC in Manila (as the civil aspect in Criminal
Case No. 275381) bar the filing of Civil Case No. 915-00 in the MeTC in PasayCity on the ground
of litis pendentia?
 
For litis pendentia to be successfully invoked as a bar to an action, the concurrence of the
following requisites is necessary, namely: (a) there must be identity of parties or at least such as
represent the same interest in both actions; (b) there must be identity of rights asserted and reliefs
prayed for, the reliefs being founded on the same facts; and, (c) the identity in the two cases should
be such that the judgment that may be rendered in one would, regardless of which party is successful,
amount to res judicata in respect of the other. Absent the first two requisites, the possibility of the
existence of the third becomes nil.[28]
  
A perusal of Civil Case No. 01-0033 and Criminal Case No. 275381 ineluctably shows that all
the elements of litis pendentia are attendant. First of all, the parties in the civil action involved in
Criminal Case No. 275381 and in Civil Case No. 915-00, that is, Chan and Simon, are the same.
Secondly, the information in Criminal Case No. 275381 and the complaint in Civil Case No. 915-00
both alleged that Simon had issued Landbank Check No. 0007280 worth P336,000.00 payable to
cash, thereby indicating that the rights asserted and the reliefs prayed for, as well as the facts upon
which the reliefs sought were founded, were identical in all respects. And, thirdly, any judgment
rendered in one case would necessarily bar the other by res judicata; otherwise, Chan would be
recovering twice upon the same claim.
 
It is clear, therefore, that the MeTC in Pasay City properly dismissed Civil Case No. 915-00
on the ground of litis pendentia through its decision dated October 23, 2000; and that the RTC
in Pasay City did not err in affirming the MeTC.
 
WHEREFORE, we grant the petition for review on certiorari, and, accordingly, we reverse and set
aside the decision promulgated by the Court of Appeals on June 25, 2002. We reinstate the decision
rendered on October 23, 2000 by the Metropolitan Trial Court, Branch 45, in Pasay City.
 
Costs of suit to be paid by the respondent.
 
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-13114             August 29, 1961

ELENITA LEDESMA SILVA, ET AL., plaintiffs-appellants, 

vs.
ESTHER PERALTA, defendant-appellee.

E.B. Garcia Law Offices and Ledesma, Puno Guytingco and Antonio & Associates for plaintiffs-
appellants.
Quijano, Abellera, Santos Corrales & Nitrorreda for defendant-appellee.

RESOLUTION

REYES, J.B.L., J.:

Appellants spouses Saturnino Silva and Elenita LedesmaSilva pray for reconsideration of this Court's
decision of November 25, 1960, claiming that —

(1) Appellant Elenita Silva should be awarded moral damages for Esther Peralta's unauthorized use
of the designation of "Mrs. Esther Silva";

(2) The award of pecuniary damages against appellant Saturnino Silva is unwarranted by the facts
and the law.

It is contended that the prohibition imposed upon appellee Esther Peralta from representing herself,
directly or indirectly, as the wife of Saturnino Silva should result in an award of moral damages in
favor of appellant Elenita Ledesma, whose exclusive right to the appellation is recognized by the
decision.

This argument misapprehends the bias of the decision. Esther Peralta was forbidden from
representing herself as Mrs. Saturnino Silva for the reason that it was proved in this case that she was
not legally married to him, and because he is now lawfully married to Elenita Ledesma. But an award
of damages in the latter's favor would require a further finding that the assumption of the disputed
status by Esther Peralta was made in bad faith or through culpable negligence and no such finding
has been made in the decision. The facts are that the Esther in good faith regarded herself as
Saturnino's lawful wife, and that the man himself led her into this belief prior to his desertion. That
later on, unknown to Esther, Silva should have married his co-appellant in the United States is not
sufficient to impose upon Esther any liability for damages or to destroy her original good faith, there
being no proof that the existence of a valid marriage between Saturnino and Elenita was adequately
driven home to Esther before this case was instituted. That the two appellants Silva were living
together as husband and wife was certainly not sufficient proof, considering Saturnino Silva's past
history and conduct. How was appellee to know that Saturnino's connection with Elenita Ledesma
was any more legitimate than his previous one with appellee herself?

Moreover, the trial court found Elenita Silva's claim for damages not adequately proved, and we have
not found in the record any justification to depart from that finding.

II

As to the award of damages against Saturnino Silva, it is to be noted that while the latter's liability was
extra-contractual in origin, still, under the Civil Code of 1889, the damages resulting from a tort are
measured in the same manner as those due from a contractual debtor in bad faith, since he must
answer for such damages, whether he had foreseen them or not, just as he must indemnify not only
for dumnum emergens but also for lucrum cessans, as required by Article 1106. Article 1902 of the
1889 Civil Code of Spain formulated no standard for measuring quasidelictual damages, the article
merely prescribing that the guilty party "shall be liable for the damages so done". This indefiniteness
led modern civil law writers to hold that the standards set in Articles 1106 and 1107, place in the
general rules on obligations, "rigen por igual para las contractuales y las extra contractuales, las
preestablecidas y las que broten ex-lege de actos ilicitos". (Roces, Notesto Fisher, "Los Daños
Civiles y su Reparacion," (1927). Since liability for damages arises in either case from a breach of a
pre-existing obligation (to behave without fault or negligence in case of quasi-delicts, and, in case of
contracts, to observe the conduct required by the stipulation),it is logical to conclude with Planiol that
"La responsabilidad contractual y la extra contractual tienen el mismo fundamento, por lo que se
hallan sujetas en principio a identicas regalas" (6 Planiol-Ripert, Derecho Civil, p. 529,sec. 378).
Giorgi is of the same opinion (5 Teoria de Obligaciones, pp. 133, 207-208). So is de Cossio y
Corral("El Dolo en el Derecho Civil", pp. 132-133):

Pero si ello es asi, resulta claro que la aproximacionentre esta clase de culpa y la contractual,
es cada dia mayor,hasta el extremo de que, segun hemos antes indicado solamente se
pueden señalar diferencias accessorias, y muchas veces aparentes entre una y otra. En
primer termino, porque el conceptode culpa contractual se extiende no solo a las
obligacionesnacidas ex contractu, sino, en general, a todas aquellas preexistentes entre las
partes a la realidad del acto dañoso (obligaciones legales). de otra parte, porque si bien
consideramoslas cosas, la responsabilidad llamada extracontractual, deriva siempre del
quebrantamiento de un deber general, implicitamentereconocido por la ley, cual es el de que
todos deben actuar socialmente con la debida diligencia, evitando causar dano a los demas,
y una dercho que todo ciudadano tine, correlativamente,a no ser da_¤_ado en su patrimonio
y bienes por la conducta dolosa o negligente de los demas. En tal sentido, habria siempre
entre el autor del daño y la victima, una relacion juridica,constituida por este derecho y aquel
deber.

Este idea de unidad entre ambas instituciones se traduce en que las pretendidadas
diferencias en order a la extension de la indemnizacion, en ambos casos, no puedan
defenderse a la vista de los preceptos de nuestro Derecho positivo. En efectono contiene el
Capitulo II del Titulo XVI del Libro IV de nuestroCodigo civil norma alguna referente a la
extension de la indemnizacion que en cada caso haya de prestarse, lo que nosobliga
forzosamente a acudir a las normas general contenidasen el Capitulo II, del Titulo I de dicho
libro, IV, relativeo a los "efectos de los obligaciones", que ninguna razon peermite limitar.a
naturaleza contractual, ya que el articulo 1.101 hable genericamente de obligaciones el
1.102, de "todas las obligaciones";el 1.103, de toda clase de obligaciones", y en ninguno de
los articulos subsifuientes se hace referencia a una clase especial de obligaciones, sino a
todas en general.

Que las disposiciones de este Capitulo son aplicables en loscasos de culpa extracontractual,
es doctrina constantemente reconocida, por la jurisprudencia del Tribunal Supremo. Asi,en la
sentencia de 14 de diciembre de 1894, concretandose a losarticulos 1.101, 1.103 y 1.104,
 afirma que son de caracter generaly applicables a toda clase de obligaciones, no
ofreciendocontradiccion con las especiales de los articulos 1.902 y 1.903; la sentencia de 15
de enero de 1902, permite interpretar los articulos1.902, t 1.903 por los 1.103 y 1.106, a los
efectos de determinar los elementos que han de entrar en la indemnizacion.La misma
doctrina se mantiene en la senencia de 2 de diciembrede 1946, y en otras muchas que
puedieramos aducir.

Whether or not the damages awarded to appellee are a natural and direct consequence of Silva's
deceitful maneuvers in making love to appellee, and inducing her to yield to his advances and live
with him as his wife (when Silva knew all the time that he could not marry Esther Peralta because of
his undissolved marriage to an Australian woman, a prior wedlock that he concealed from appellee),
is a question of appreciation. It is clear that Esther Peralta would not have consented to the liaison
had there been no concealment of Silva's previous marriage, or that the birth of the child was a direct
result of this connection. That Esther had to support the child because Silva abandoned her before it
was born is likewise patent upon the record, and we can not see how said appellant can be excused
from liability therefor.

Silva's seduction and subsequent abandonment of appellee and his illegitimate child were likewise the
direct cause for the filling of the support case in Manila, and in order to prosecute the same, appellee
had to quit her employment in Davao. While the case could have been filed in Davao, we do not
believe that this error in selecting a more favorable venue (due to her unfamiliarity with the
technicalities of the law) should be allowed to neutralized the appellant Silva's responsibility as the
primary causative factor of the prejudice and damage suffered by appellee.

It is argued that the maintenance of the child can not be considered as an element of damage
because the child's case for support was dismissed. This contention fails to take into account the
action there was for support as an acknowledged natural child, and that under the Civil Code of 1889
(the law in force when the child was born), the right of natural children to be supported by their father
depended exclusively on the recognition by the father of his paternity; the rule being that —

the mere fact of birth gave no legal right to the child, and imposed no legal duty upon the
father, except, perhaps, in cases arising under the criminal law.. . . The father was not, prior
to the Civil Code, and is not now, bound to recognize his natural son by reason of the mere
fact that he is the father. . . . But as to the father the question is, and always has been, Has he
performed any acts which indicate his intention to recognize the child as his?" (Buenaventura
vs. Urbano, 5 Phil., pp. 2-3).

It follows that in said suit, the real issue was whether the child had been duly recognized, the support
being a mere consequence of the recognition. Therefore, the failure of the child's action for support
did not adjudge that he was not the defendant's child, but that the defendant never recognized him as
such. That the decision of the Court of Appeal (CA-G.R. No. 24532-R) rejecting the child's action did
not declare him without right to support under all circumstances can be seen from the following
statement in the decision:

The proofs so far found in the record may possibly warrant the filing of an action for
compulsory recognition, under paragraphs 3 and 4 of Art. 283, but there was no action
presented to that effect.

Plainly, the issues and parties being different, the result of the child's action can not constitute res
judicata with regard to the mother's claim for damages against the father on account of the amounts
she was compelled to spend for the maintenance of their child. On the contrary, the very fact that the
child was not allowed to collect support from the father (appellant therein) merely emphasizes the
account of his birth and rearing, which, in turn, was a direct consequence of appellant's tortious
conduct. Since Esther Peralta had expressly that she had to support the child (Record of Appeal, p.
27, in fine),and had prayed for such relief "as may be deemed just and equitable in the premises",
there is no reason why her expenses for the child's maintenance should not be taken into account.
Appellants submit that the damages allowed for maintenance of the son should be limited to P600.00
a year, because the income tax law allows only that much deduction for each child. We do not believe
that income tax deductions constitute a reasonable basis for an award of damages, since they are
fixed an entirely different purpose (to arrive at the net taxable income) and merely represent the
amount that the state is willing to exempt from taxation. At that, it should be noted that the deductible
amount has been lately increased to P1,000.00 per annum. But even at P600.00 per annum, the
damage suffered by appellee on this count, from 1945 to 1960, already amount to around P9,000.00 a
year, to which must be added the loss of appellee's salary as executive of the Girl Scouts in Davao;
so that the P15,000.00 damages awarded by the court below is by no means excessive, as already
held in our decision in chief.

Appellants also contend that the claim for pecuniary damages has prescribed, because they date
back to 1945. Suffice it to note that the defense of prescription was not invoked by appellants against
the claim for pecuniary damages, and this defense must be regarded as waived in relation to the
same. Appellant's reply to the appellee's first counterclaim in her second amended answer (which was
for actual or pecuniary damages) read as follows (Answer to Counterclaim, Rec. App. p. 33):

1. — That plaintiff is without knowledge or information sufficient to to form a belief as to the

truth of the allegations continued under paragraphs 6, 7, 8, 9, 10, 11 and 12 of the first
counterclaim and, therefore, specifically denies the same.

The defense of prescription was actually interposed only against the second counterclaim, in this
wise:

1. — That the cause of action alleged in the second counterclaim  has already prescribed
more than ten years having already elapsed. (Answer to Counterclaim, Rec. App., p. 34).

The second counterclaim referred to was for damages due to "mental torture, anguish and hurt
feelings, all to her damage in the amount of P250,000." (Rec. App. p. 28).Upon the other hand, our
own award for moral damages was based, not on the deceit practiced by Silva in securing Esther's
assent to live maritally with him, but on his subsequent harassment of her in 1945, by filing suit
against her in different provinces and otherwise applying pressure to cause her to abandon her child's
case. As this cause of action arose less than three years before the present action was filed, the
defense of prescription is rendered untenable against it, for the limitation period had not yet expired
when the suit was brought.

WHEREFORE, the motion for reconsideration is denied.