Sumbilla vs. Matrix Finance Corporation

A final and executory judgment of conviction may be modified to correct a penalty that exceeds the maximum prescribed by law when the interest of substantial justice so requires, and the court may suspend its own procedural rules to prevent a miscarriage of justice. The immutability of final judgments admits of exception where the penalty imposed is outside the range of the imposable penalty, rendering it void for want or excess of jurisdiction as to the excess.

Petitioner obtained a cash loan from Matrix Finance Corporation and issued six Philippine Business Bank checks, each with a face value of ₱6,667.00, as partial payment. Upon presentment for payment, all six checks were dishonored on the ground that they were drawn against a closed account. Despite demand, petitioner failed to pay the face value of the checks. Six separate criminal informations for violation of Batas Pambansa Blg. 22 (B.P. 22) were filed against her before the Metropolitan Trial Court of Makati City.

• The Loan and Checks: Petitioner obtained a cash loan from respondent Matrix Finance Corporation. As partial payment, she issued six Philippine Business Bank checks numbered 0032863 to 0032868, each bearing a uniform face value of ₱6,667.00.

• Dishonor and Demand: Upon maturity, respondent presented all six checks to the drawee bank for payment. They were dishonored on the ground “drawn against a closed account.” Respondent sent a demand letter for payment of the face value of the checks; petitioner refused to comply.

• Criminal Prosecution: Petitioner was indicted for six separate counts of violation of B.P. 22, docketed as Criminal Case Nos. 321169 to 321174, and raffled off to Branch 67, MeTC of Makati City.

• MeTC Decision and the Imposed Penalty: In a Decision dated January 14, 2009, the MeTC found petitioner guilty beyond reasonable doubt of all six counts. For each count, she was sentenced to pay a fine of ₱80,000.00, with subsidiary imprisonment in case of non-payment. She was further ordered to indemnify the private complainant Matrix Finance Corporation the total amount of ₱40,002.00 plus 12% annual legal interest from September 21, 2002 until fully paid.

• Procedural Lapses: Petitioner acknowledged that her Motion for Reconsideration of the MeTC Decision was a prohibited pleading under the Rule on Summary Procedure and that her Notice of Appeal was filed late, resulting in the finality of the conviction. She conceded that she sought certiorari under Rule 65 with the RTC instead of filing an ordinary appeal to the Court of Appeals.

• Excessive Fine: Petitioner contended that under Section 1 of B.P. 22, the maximum fine that could be imposed for each count was double the face value of the dishonored check, or ₱13,334.00. The MeTC’s imposition of ₱80,000.00 per count was therefore excessive and outside the range prescribed by law.

• Subsidiary Imprisonment: Petitioner argued that the imposition of subsidiary imprisonment violated Administrative Circular No. 12-2000, Administrative Circular No. 13-2001, and the ruling in Vaca v. Court of Appeals. She further implied that such subsidiary imprisonment contravened Section 20, Article III of the Constitution, which prohibits imprisonment for non-payment of a debt.

• Relaxation of Procedural Rules: Petitioner sought the liberal application of procedural rules to correct the penalty, acknowledging that her conviction had become final but asserting that substantial justice warranted the modification of an erroneous sentence that exceeded the limits set by law.

• Finality of Judgment: Respondent countered that the right to appeal is a statutory privilege that must be exercised strictly in accordance with the Rules of Court. The lost appeal could not be resurrected through a petition for review on certiorari, and the judgment of conviction, having become final and executory, could no longer be altered.

• Modification of Final Judgment: Whether a final and executory judgment of conviction may still be modified to correct a penalty that exceeds the maximum prescribed by B.P. 22.

• Excessiveness of Fine: Whether the fine of ₱80,000.00 imposed for each count of violation of B.P. 22, where the face value of each check was only ₱6,667.00, was within the penalty range set forth in Section 1 of B.P. 22.

• Validity of Subsidiary Imprisonment: Whether the imposition of subsidiary imprisonment in case of non-payment of the fine violates Administrative Circular No. 12-2000, related issuances, or the constitutional prohibition against imprisonment for debt.

• Modification of Final Judgment: The immutability of final judgments is not an absolute rule. The Court has the power and prerogative to suspend its own rules and modify a final judgment when the interest of substantial justice requires it, particularly where matters of life, liberty, honor, or property are involved, and where the penalty imposed is outside the range of that prescribed by law. The penalty imposed by the MeTC was void for excess of jurisdiction as to the excess, and the correction was warranted to conform to the statutory limits. The leniency applied in Rigor v. The Superintendent, People v. Barro, Estrada v. People, and Almuete v. People — where final convictions were corrected to bring the penalty within legal bounds — was extended to the petitioner.

• Excessiveness of Fine: The MeTC erroneously used the total face value of the six checks (₱40,002.00) as the basis for computing the fine, instead of the face value of each individual check (₱6,667.00). Under Section 1 of B.P. 22, where a fine alone is imposed, it shall be not less than, but not more than, double the amount of the check. Thus, the maximum fine for each count is ₱13,334.00. The fine of ₱80,000.00 per count was accordingly reduced to ₱13,334.00.

• Validity of Subsidiary Imprisonment: Administrative Circular No. 12-2000 did not remove imprisonment as an alternative penalty for violations of B.P. 22, nor did it proscribe subsidiary imprisonment. Administrative Circular No. 13-2001 clarified that judges retain the discretion to impose imprisonment and that subsidiary imprisonment under the Revised Penal Code applies when the accused is unable to pay the fine. Furthermore, the constitutional prohibition against imprisonment for debt does not apply because the gravamen of B.P. 22 is the act of issuing a worthless check — an offense against public order, not mere non-payment of an obligation — as settled in Lozano v. Martinez.

• Doctrine of Immutability of Judgments (and its exceptions) — A decision that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law. This rule, however, yields when the interest of substantial justice demands it, particularly where: (a) matters of life, liberty, honor, or property are at stake; (b) special or compelling circumstances exist; (c) the case has merit; (d) the cause is not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (e) there is no showing that the review is frivolous or dilatory; and (f) the other party will not be unjustly prejudiced. In the present case, the penalty exceeded the statutory limit and the error implicated the petitioner’s liberty; the Court relaxed the rule and corrected the fine.

• Void-for-Excess-of-Jurisdiction Rule on Penalty — A sentence that imposes a penalty in excess of the maximum allowed by law is void for want or excess of jurisdiction as to the excess. The Court has the inherent duty and power to correct such a penalty even after the judgment has become final, to make it conformable to law.

• Construction of Penal Provisions of B.P. 22 — Section 1 of B.P. 22 provides the alternative penalties of imprisonment of not less than 30 days but not more than one year, or a fine of not less than but not more than double the amount of the check (not exceeding ₱200,000.00), or both. Where a fine alone is imposed, the maximum is double the face value of the specific check involved, not the aggregate amount of multiple checks.

• Subsidiary Imprisonment under B.P. 22 — Administrative Circular No. 12-2000 establishes a rule of preference for the imposition of a fine alone where the circumstances indicate good faith or mistake without negligence, but it does not remove imprisonment as an alternative penalty, nor does it bar subsidiary imprisonment. When a fine is imposed and the accused is unable to pay, the provisions of the Revised Penal Code on subsidiary imprisonment apply.

• B.P. 22 and the Constitutional Prohibition against Imprisonment for Debt — The prohibition in Section 20, Article III of the Constitution does not bar imprisonment for violating B.P. 22, because the law punishes the act of issuing a worthless check — an offense against public order — and not the mere failure to pay a debt.

• “Upon finality of the judgment, the Court loses its jurisdiction to amend, modify or alter the same. Nonetheless, the immutability of final judgments is not a hard and fast rule. The Court has the power and prerogative to suspend its own rules and to exempt a case from their operation if and when justice requires it.”

• “Verily, a sentence which imposes upon the defendant in a criminal prosecution a penalty in excess of the maximum which the court is authorized by law to impose for the offense for which the defendant was convicted, is void for want or excess of jurisdiction as to the excess.”

• “Substantial justice demands that we suspend our Rules in this case. ‘It is always within the power of the court to suspend its own [R]ules or except a particular case from its operation, whenever the purposes of justice require.’ … Indeed, when there is a strong showing that a grave miscarriage of justice would result from the strict application of the Rules, this Court will not hesitate to relax the same in the interest of substantial justice.”

• “The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check … It is not the non-payment of an obligation which the law punishes. … The law punishes the act not as an offense against property, but an offense against public order.”

• Rigor v. The Superintendent, New Bilibid Prison, 458 Phil. 561 (2003) — Followed. The Court corrected the minimum and maximum periods of an indeterminate sentence that exceeded the imposable penalty, even though the judgment was already final, in the interest of justice.

• Almuete v. People, G.R. No. 179611, March 12, 2013, 693 SCRA 167 — Followed. The penalty imposed was corrected despite finality because it fell outside the range prescribed by law, on the ground of substantial justice.

• People v. Barro, 392 Phil. 857 (2000); People v. Gatward, 335 Phil. 440 (1997); Estrada v. People, 505 Phil. 339 (2005) — Followed. These cases affirmed the duty and inherent power of the Court to correct erroneous penalties in final and executory judgments and conform them to the penalty prescribed by law.

• Abarquez v. Court of Appeals, 455 Phil. 964 (2003) — Applied. The error of using the total face value of multiple checks, instead of the face value of each individual check, as the basis for the fine was similarly corrected.

• Barnes v. Judge Padilla, 482 Phil. 903 (2004) — Applied. The decision articulated the factors that justify relaxation of the immutability rule, including whether matters of life, liberty, honor, or property are at stake and the existence of special or compelling circumstances.

• Lozano v. Martinez, 230 Phil. 406 (1986) — Applied. The constitutional challenge against B.P. 22 as an imprisonment for debt was settled; the law was held to be a valid exercise of police power.

• Vaca v. Court of Appeals, 359 Phil. 187 (1998) — Clarified. Administrative Circular No. 12-2000, which adopted the policy in Vaca, was explained to have established a rule of preference for fine alone where good faith exists, but did not eliminate imprisonment as an alternative penalty.

• Section 1, Batas Pambansa Blg. 22 — Prescribes the penalty for issuing a check without sufficient funds: imprisonment of not less than 30 days but not more than one year, or a fine of not less than but not more than double the amount of the check, which fine shall in no case exceed ₱200,000.00, or both such fine and imprisonment at the court’s discretion. The MeTC exceeded the maximum fine by imposing ₱80,000.00 per check when double the face value was only ₱13,334.00.

• Section 2, Rule 1, 1997 Rules of Civil Procedure — Declares that the rules shall be liberally construed to promote their objective and to assist the parties in obtaining just, speedy, and inexpensive determination of every action and proceeding. This provision supported the relaxation of procedural rules to correct the penalty.

• Administrative Circular No. 12-2000 and Administrative Circular No. 13-2001 — The former, adopting the policy in Vaca v. Court of Appeals, established a preference for the imposition of a fine alone where circumstances indicate good faith or clear mistake without negligence; the latter clarified that imprisonment remains an alternative penalty and that subsidiary imprisonment under the Revised Penal Code may be applied when the accused is unable to pay the fine. Both were used to uphold the imposition of subsidiary imprisonment.

• Article 39, Revised Penal Code, as amended by Republic Act No. 10159 — Governs subsidiary personal liability for fines: when the principal penalty is only a fine, subsidiary imprisonment shall not exceed six months for grave or less grave felonies, and not exceed fifteen days for light felonies. The provision was deemed applicable to violations of B.P. 22.

• Section 20, Article III, 1987 Constitution — Prohibits imprisonment for debt. Invoked by petitioner to challenge subsidiary imprisonment; rejected on the ground that B.P. 22 punishes the act of issuing a worthless check, not non-payment of debt.

• DIOSDADO M. PERALTA (Acting Chairperson)
• MARIANO C. DEL CASTILLO
• JOSE CATRAL MENDOZA
• FRANCIS H. JARDELEZA