Sapiera vs. Court of Appeals

An acquittal in a criminal case does not extinguish civil liability unless the judgment of acquittal expressly declares that the fact from which the civil action might arise did not exist; where the acquittal is based on reasonable doubt or insufficiency of evidence, civil liability may still be adjudged on a preponderance of evidence, and a person who signs the back of a negotiable instrument without indicating the capacity in which she signs is deemed an indorser liable thereon.

Petitioner Remedios Nota Sapiera was a sari-sari store owner who had business dealings with private respondent Ramon Sua, the proprietor of Monrico Mart, a grocery store, for approximately five years. Arturo de Guzman was a customer of petitioner who purchased grocery items, mostly cigarettes, from her store. The dispute arose from a series of transactions in which petitioner purchased goods from Monrico Mart and paid with checks issued by de Guzman, which petitioner indorsed at the back. The checks were subsequently dishonored for "account closed," giving rise to both criminal charges of estafa against petitioner and civil liability claims for the value of the checks.

Petitioner Remedios Nota Sapiera owned a sari-sari store inside the public market in Dagupan City, where she sold canned goods, candies, and assorted grocery items. She had business dealings with private respondent Ramon Sua, the proprietor of Monrico Mart, for about five years. Arturo de Guzman was a customer of petitioner who purchased grocery items, mostly cigarettes, from her store beginning February 1987.

On several occasions, petitioner purchased grocery items from Monrico Mart and paid for them with checks issued by de Guzman. These purchases were documented by sales invoices and paid with four checks: (a) PCIB Check No. 157059 dated February 26, 1987 for ₱140,000.00; (b) PCIB Check No. 157073 dated February 26, 1987 for ₱28,000.00; (c) PCIB Check No. 157057 dated February 27, 1987 for ₱42,150.00; and (d) Metrobank Check No. DAG-045104758 PA dated March 2, 1987 for ₱125,000.00. Petitioner signed all four checks on the reverse side. She testified that Ramon Sua asked her to sign the checks as identification of the signature of Arturo de Guzman, that she never pays by check, and that the goods were delivered to de Guzman.

When the checks were presented for payment, they were dishonored because the drawer's account was already closed. Private respondent Sua informed both de Guzman and petitioner of the dishonor, but neither paid the value of the checks. Four charges of estafa were filed against petitioner with the Regional Trial Court of Dagupan City, docketed as Crim. Cases Nos. D-8728, D-8729, D-8730, and D-8731. De Guzman was separately charged with two counts of violation of B.P. Blg. 22, docketed as Crim. Cases Nos. D-8733 and D-8734. The cases were consolidated and tried jointly.

On December 27, 1989, the trial court acquitted petitioner of all charges of estafa, finding that the prosecution failed to prove conspiracy between petitioner and de Guzman. The trial court, however, did not rule on whether petitioner could be held civilly liable. The same court convicted de Guzman of violation of B.P. Blg. 22 on two counts and sentenced him to imprisonment and to pay ₱167,150.00 as civil indemnity. Private respondent sought to appeal the civil aspect of petitioner's acquittal, but the trial court refused to give due course, treating the acquittal as absolute. Private respondent then filed a petition for mandamus with the Court of Appeals, which granted the petition and ordered the trial court to give due course to the civil appeal.

• Civil Liability Extinguished by Absolute Acquittal: Petitioner argued that the Court of Appeals erred in holding her civilly liable because her acquittal by the trial court from the charges of estafa was absolute, the trial court having declared in its decision that the fact from which the civil liability might have arisen did not exist.

• Civil Liability Despite Acquittal: Whether the Court of Appeals committed reversible error in requiring petitioner to pay civil indemnity to private respondent after the trial court had acquitted her of the criminal charges of estafa.
• Indorser's Liability: Whether petitioner, having signed the back of the dishonored checks without indicating the capacity in which she signed, may be held liable as an indorser under the Negotiable Instruments Law.

• Civil Liability Despite Acquittal: No. The acquittal did not extinguish civil liability because it was based on insufficiency of evidence — failure to prove conspiracy — and not on a declaration that the fact from which the civil action might arise did not exist, as required under Section 2, par. (b), Rule 111 of the Rules of Court.
• Indorser's Liability: Yes. Petitioner was deemed an indorser under Sections 17(f), 63, and 66 of the Negotiable Instruments Law, having signed the back of the checks without indicating any other capacity, and thus warranted that the instruments were valid and subsisting and would be paid upon due presentment.

• Civil Liability Despite Acquittal: Section 2, par. (b), Rule 111 of the Rules of Court, as amended, provides that extinction of the penal action does not carry with it extinction of the civil action, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. The judgment of acquittal extinguishes liability for damages only when it includes such a declaration. Civil liability is not extinguished where (a) the acquittal is based on reasonable doubt, (b) the court expressly declares that the liability is not criminal but only civil in nature, or (c) the civil liability is not derived from or based on the criminal act of which the accused is acquitted. An examination of the trial court's decision revealed that the exoneration of petitioner was based on the prosecution's failure to prove conspiracy — an insufficiency of evidence — not on a finding that the transactions underlying the checks did not occur. The trial court in fact found that petitioner purchased goods from Monrico Mart, paid with the four checks issued by de Guzman, signed the checks at the back, and was informed of the dishonor. Under Article 29 of the Civil Code, when an accused is acquitted on the ground that guilt has not been proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted, requiring only a preponderance of evidence. The rationale, as explained by the Code Commission, is that criminal and civil liabilities are separate and distinct — one affects the social order and the other private rights; one is for punishment while the other is for reparation. It is just that for purposes of imprisonment or fine, the offense should be proved beyond reasonable doubt, but for indemnifying the aggrieved party, preponderance of evidence suffices.

• Indorser's Liability: Despite the conflicting versions of the parties, it was undisputed that the four checks issued by de Guzman were signed by petitioner at the back without any indication as to how she should be bound thereby. Under Section 17(f) of the Negotiable Instruments Law, where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is deemed an indorser. Section 63 provides that a person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor is deemed to be an indorser unless he clearly indicates by appropriate words his intention to be bound in some other capacity. Section 66 provides that every indorser who indorses without qualification warrants that the instrument is valid and subsisting at the time of indorsement, and engages that on due presentment it shall be accepted or paid according to its tenor, and that if dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder. The dismissal of the criminal cases did not erase petitioner's civil liability as indorser, since the dismissal was due to insufficiency of evidence and not from a declaration that the fact from which the civil action might arise did not exist. An accused acquitted of estafa may nevertheless be held civilly liable where the facts established by the evidence so warrant. The Court of Appeals' computation of civil liability — ₱335,150.00 aggregate face value of the four checks, less ₱125,000.00 already collected by private respondent from de Guzman, resulting in ₱210,150.00 still due — was a factual matter binding and conclusive upon the Supreme Court.

• Extinction of Civil Liability by Acquittal — The judgment of acquittal extinguishes the liability of the accused for damages only when it includes a declaration that the fact from which the civil liability might arise did not exist. Civil liability is not extinguished where: (a) the acquittal is based on reasonable doubt; (b) the court expressly declares that the liability of the accused is not criminal but only civil in nature; and (c) the civil liability is not derived from or based on the criminal act of which the accused is acquitted. In this case, the acquittal was based on insufficiency of evidence (failure to prove conspiracy), not on a declaration that the underlying facts did not exist, so civil liability survived.

• Indorser's Liability Under the Negotiable Instruments Law — A person who signs the back of a negotiable instrument without indicating the capacity in which she signs is deemed an indorser (Sections 17(f) and 63, Negotiable Instruments Law). As a general indorser, she warrants that the instrument is valid and subsisting and engages that upon due presentment it shall be paid, and if dishonored with proper proceedings taken, she will pay the amount to the holder (Section 66). In this case, petitioner signed the back of the four checks without any qualifying words, making her an indorser liable for their value upon dishonor.

• Separate and Distinct Nature of Criminal and Civil Liability — Criminal and civil liabilities are separate and distinct from each other. One affects the social order and the other private rights; one is for punishment or correction of the offender while the other is for reparation of damages suffered by the aggrieved party. For purposes of imprisonment or fine, the offense must be proved beyond reasonable doubt, but for indemnifying the complaining party, preponderance of evidence suffices.

• "The judgment of acquittal extinguishes the liability of the accused for damages only when it includes a declaration that the fact from which the civil liability might arise did not exist." — This is the controlling rule on the survival of civil liability despite acquittal, distinguishing acquittals that extinguish civil liability from those that do not.

• "The dismissal of the criminal cases against petitioner did not erase her civil liability since the dismissal was due to insufficiency of evidence and not from a declaration from the court that the fact from which the civil action might arise did not exist." — This applies the rule to the facts, establishing that acquittal for failure to prove conspiracy does not negate civil liability arising from the indorsement of dishonored checks.

• "The two liabilities are separate and distinct from each other. One affects the social order and the other private rights. One is for punishment or correction of the offender while the other is for reparation of damages suffered by the aggrieved party." — This passage, drawn from the Code Commission's discussion of Article 29 of the Civil Code, articulates the theoretical foundation for allowing civil recovery despite criminal acquittal.

• Sadio vs. RTC of Antique, G.R. No. 94143, 24 September 1991, 201 SCRA 744 — Cited for the proposition that civil liability is not extinguished by acquittal in three enumerated situations: acquittal based on reasonable doubt, where the court declares liability is only civil in nature, and where civil liability is not derived from the criminal act charged.

• Belen vs. Batoy, G.R. No. 76042, 23 February 1990, 182 SCRA 549 — Cited for the rule that the dismissal of criminal cases does not erase civil liability where the dismissal is due to insufficiency of evidence and not from a declaration that the fact from which the civil action might arise did not exist.

• People vs. Tugbang, G.R. No. 76212, 26 April 1991, 196 SCRA 341 — Cited for the principle that an accused acquitted of estafa may nevertheless be held civilly liable where the facts established by the evidence so warrant, and should be adjudged liable for the unpaid value of the checks signed in favor of the complainant.

• Padilla vs. Court of Appeals, No. L-39999, 31 May 1984, 129 SCRA 558 — Cited as the source of the Code Commission's report explaining the rationale behind Article 29 of the Civil Code, distinguishing criminal liability from civil responsibility.

• Section 2, par. (b), Rule 111, Rules of Court — Provides that extinction of the penal action does not carry with it extinction of the civil action, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. Applied to hold that petitioner's acquittal for insufficiency of evidence did not extinguish her civil liability.

• Article 29, Civil Code — Provides that when the accused in a criminal prosecution is acquitted on the ground that guilt has not been proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted, requiring only a preponderance of evidence. Applied to sustain the civil action against petitioner despite her acquittal.

• Section 17(f), Negotiable Instruments Law — Provides that where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is deemed an indorser. Applied to hold petitioner liable as an indorser for signing the back of the checks without indicating her capacity.

• Section 63, Negotiable Instruments Law — Provides that a person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor is deemed to be an indorser unless he clearly indicates by appropriate words his intention to be bound in some other capacity. Applied to establish petitioner's status as indorser.

• Section 66, Negotiable Instruments Law — Provides that every indorser who indorses without qualification warrants that the instrument is valid and subsisting, and engages that on due presentment it shall be accepted or paid, and if dishonored with necessary proceedings duly taken, he will pay the amount thereof to the holder. Applied to hold petitioner liable for the value of the dishonored checks.

Mendoza, Quisumbing, and Buena, JJ., concurred.