Tiong v. Balboa

Filing a civil action for collection of sum of money based on dishonored checks before instituting the corresponding criminal action for violation of B.P. Blg. 22 does not constitute forum shopping, because under Section 1, Rule 111 of the 1985 Rules of Court, a civil action instituted prior to the criminal action may proceed independently, and the subsequent filing of criminal cases does not create litis pendentia or res judicata.

Spouses Benito Lo Bun Tiong and Caroline Siok Ching Teng (petitioners) issued three post-dated checks to Vicente Balboa (respondent) totaling ₱5,175,250.00. The checks were dishonored, prompting respondent to seek recovery of the amounts through both civil and criminal proceedings. The dispute turned on whether respondent's institution of a civil collection suit and subsequent criminal complaints for violation of B.P. Blg. 22 arising from the same checks constituted forum shopping, and on which procedural rule governed given the dates of filing relative to the effectivity of Supreme Court Circular No. 57-97 and the 2000 Revised Rules of Criminal Procedure.

On February 24, 1997, Vicente Balboa filed with the Regional Trial Court (RTC) of Manila, Branch 34, Civil Case No. 97-82225 for Collection of Sum of Money against spouses Benito Lo Bun Tiong and Caroline Siok Ching Teng. The action sought recovery of the aggregate amount of ₱5,175,250.00, representing three post-dated checks issued by Caroline: Asia Trust Check No. BNDO57546 dated December 30, 1996 for ₱2,000,000.00; Asia Trust Check No. BNDO57547 dated January 15, 1997 for ₱1,200,000.00; and Asia Trust Check No. BNDO57548 dated January 31, 1997 for ₱1,975,250.00.

Five months later, on July 21, 1997, Balboa filed separate criminal complaints for violation of Batas Pambansa Blg. 22 against Caroline before the Municipal Trial Court (MTC) of Manila, Branch 10, covering the same three checks. These cases were docketed as Criminal Case Nos. 277576 to 78. The civil and criminal proceedings proceeded on parallel tracks. On August 11, 1998, the RTC rendered its Decision in Civil Case No. 97-82225 finding petitioners liable for ₱5,175,250.00 plus 6% interest per annum until full payment, ₱100,000.00 as attorney's fees, and costs of suit.

On December 5, 2001, the MTC acquitted Caroline of the B.P. Blg. 22 charges for failure of the prosecution to prove her guilt beyond reasonable doubt, but found her civilly liable to Balboa for the amounts of the three checks. Caroline sought partial reconsideration praying for deletion of the civil indemnity, but the MTC denied the motion per Order dated April 12, 2002. Caroline then appealed to the RTC, which docketed the case as Criminal Case Nos. 02-204544-46. Meanwhile, petitioners elevated the RTC civil Decision to the Court of Appeals (CA-G.R. CV No. 61457), which on November 20, 2002 dismissed the appeal for lack of merit and affirmed the RTC Decision in toto. Petitioners' motion for reconsideration was denied by the CA per Resolution dated April 21, 2003.

On May 8, 2003, the RTC, acting as appellate court, rendered its Decision in Criminal Case Nos. 02-204544-46, modifying the MTC Decision by deleting the award of civil damages. Records do not disclose that any appeal was taken from that ruling. Petitioners thereafter filed the present petition under Rule 45, contending that Balboa's filing of both the civil and criminal cases constituted forum shopping and that the CA erred in allowing double recovery.

• Forum Shopping: Petitioners contended that the CA Decision and Resolution should be reconsidered and the RTC civil Decision dismissed, arguing that respondent's act of filing Civil Case No. 97-82225 and Criminal Cases Nos. 277576 to 78 constitutes forum shopping.
• Double Recovery: Petitioners argued that the CA acted without jurisdiction and with grave abuse of discretion in allowing respondent to recover twice for the same obligation, on account of respondent's deliberate failure and refusal to inform the RTC that the civil obligation being sued upon was the subject of criminal complaints before the MTC, for which the civil obligation was subsequently adjudged.

• Forum Shopping: Whether the filing of a civil action for collection of sum of money and subsequent criminal complaints for violation of B.P. Blg. 22, both arising from the same dishonored checks, constitutes forum shopping.
• Double Recovery: Whether respondent was allowed to recover twice for the same obligation, resulting in unjust enrichment.

• Forum Shopping: No. The civil action was filed before the criminal action, and under Section 1, Rule 111 of the 1985 Rules of Court — the governing rule at the time of filing — a civil action instituted prior to the criminal action may proceed independently, negating forum shopping.
• Double Recovery: No. The RTC, acting as appellate court, had already deleted the award of civil damages in the criminal cases, and no appeal was taken therefrom; hence, no double recovery or unjust enrichment occurred.

• Forum Shopping: Forum shopping requires the concurrence of three elements: (1) identity of parties or at least of parties representing the same interest; (2) identity of rights asserted and relief prayed for, founded on the same facts; and (3) identity such that any judgment in one action would amount to res judicata in the other or constitute litis pendentia. While the Court acknowledged that under Hyatt Industrial Manufacturing Corp. vs. Asia Dynamic Electrix Corp. and Silangan Textile Manufacturing Corp. vs. Demetria, there is identity of parties and causes of action between a civil case for recovery of sum of money based on bouncing checks and a criminal case for B.P. Blg. 22 violation — and that Supreme Court Circular No. 57-97 (effective September 16, 1997) and Rule 111(b) of the 2000 Revised Rules of Criminal Procedure deem the civil action included in the criminal action with no reservation allowed — those rules did not govern the present case. Civil Case No. 97-82225 was filed on February 24, 1997, and Criminal Cases Nos. 277576 to 78 on July 21, 1997, both prior to the effectivity of Circular No. 57-97 on September 16, 1997. The governing rule was therefore Section 1, Rule 111 of the 1985 Rules of Court, which provides that the civil action for recovery of civil liability is impliedly 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. Since respondent instituted the civil action prior to the criminal action, the civil case could proceed independently, and there was no forum shopping. Even under the amended rules, the only instance when separate proceedings are allowed is when the civil action is filed ahead of the criminal case, though consolidation is encouraged.

• Double Recovery: The RTC, in its Decision in Criminal Case Nos. 02-204544-46, already deleted the award of civil damages from the MTC ruling. Records do not disclose that any appeal was taken from that RTC appellate ruling. Consequently, there was no double recovery of the amounts covered by the checks and no unjust enrichment on the part of respondent.

• Elements of Forum Shopping — Forum shopping exists when the following elements concur: (1) identity of parties or at least of parties representing the same interest in both actions; (2) identity of rights asserted and relief prayed for, founded on the same set of facts; and (3) identity of the two preceding particulars such that any judgment in the other action will amount to res judicata or will constitute litis pendentia. The Court found that these elements were not satisfied because the civil action was filed prior to the criminal action under the 1985 Rules, permitting independent proceedings.

• Civil Action Preceding Criminal Action Under Section 1, Rule 111 of the 1985 Rules of Court — Under the 1985 rule, the civil action for recovery of civil liability is impliedly 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 third exception applied here: because respondent filed the civil collection case before the criminal complaints, the civil case could proceed independently, and the subsequent criminal filings did not constitute forum shopping.

• Rule 111(b) of the 2000 Revised Rules of Criminal Procedure / Supreme Court Circular No. 57-97 — Under the amended rules, the criminal action for violation of B.P. Blg. 22 is deemed to include the corresponding civil action, and no reservation to file a separate civil action is allowed. The only instance when separate proceedings are allowed is when the civil action is filed ahead of the criminal case. Even then, consolidation is encouraged to avoid multiplicity of suits. The Court noted this rule was enacted to declog court dockets and discourage the separate filing of civil actions, but it did not apply retroactively to filings made before its effectivity.

• "Since respondent instituted the civil action prior to the criminal action, then Civil Case No. 97-82225 may proceed independently of Criminal Cases Nos. 277576 to 78, and there is no forum shopping to speak of." — This is the ratio decidendi: the dispositive determination that prior filing of the civil action under the 1985 Rules negates forum shopping.

• "The only instance when separate proceedings are allowed is when the civil action is filed ahead of the criminal case." — This passage articulates the controlling rule even under the amended procedural rules, confirming that the sequence of filing determines whether a separate civil action may proceed.

• "Moreover, the RTC, in its Decision in Criminal Case Nos. 02-204544-46, already deleted the award of civil damages. Records do not disclose that appeal had been taken therefrom. There is, therefore, no double recovery of the amounts covered by the checks or unjust enrichment on the part of respondent." — This establishes the factual basis for rejecting the double recovery claim, completing the Court's two-pronged rationale.

• Hyatt Industrial Manufacturing Corp. vs. Asia Dynamic Electrix Corp., G.R. No. 163597, July 29, 2005, 465 SCRA 454 — The Court applied Supreme Court Circular No. 57-97 and Rule 111(b) of the 2000 Revised Rules of Criminal Procedure to hold that there is identity of parties and causes of action between a civil case for recovery of sum of money based on bouncing checks and a criminal case for B.P. Blg. 22 violation, ordering dismissal of the civil action to prevent double payment. The Court in the present case distinguished Hyatt on the ground that the filings here preceded the effectivity of Circular No. 57-97, but noted Hyatt's observation that even under the amended rules, separate proceedings are allowed when the civil action is filed ahead of the criminal case.

• Silangan Textile Manufacturing Corp. vs. Demetria, G.R. No. 166719, March 12, 2007, 518 SCRA 160 — The Court reiterated the rule from Hyatt and ordered the dismissal of a separately filed civil case for recovery of amounts covered by bouncing checks. Cited as consistent with Hyatt in applying the amended rules, but distinguished from the present case on the same temporal ground.

• R & E Transport, Inc. vs. Latag, 467 Phil. 355 (2004) — Cited for the definition of forum shopping as the institution of two or more actions grounded on the same cause on the supposition that one or the other court would render a favorable disposition.

• Sanchez vs. Far East Bank and Trust Company, G.R. No. 155309, November 15, 2005, 475 SCRA 97 — Cited for the proposition that under Section 1, Rule 111 of the 1985 Rules of Court, the civil action may proceed independently when it is filed prior to the criminal action.

• Section 1, Rule 111, 1985 Rules of Court — Provides that when a criminal action is instituted, the civil action for recovery of civil liability is impliedly instituted with it, 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 Court held this provision governed because both the civil and criminal cases were filed before the effectivity of Circular No. 57-97, and the third exception — prior institution of the civil action — applied.

• Supreme Court Circular No. 57-97 (effective September 16, 1997) — Provides that the criminal action for violation of B.P. Blg. 22 shall be deemed to necessarily include the corresponding civil action, and no reservation to file such civil action separately shall be allowed. The Court found this inapplicable because the cases were filed before its effectivity, but noted that even under this circular, separate proceedings are allowed when the civil action is filed ahead of the criminal case.

• Rule 111(b), 2000 Revised Rules of Criminal Procedure — Adopts and incorporates the substance of Circular No. 57-97: the criminal action for violation of B.P. Blg. 22 shall be deemed to include the corresponding civil action, with no reservation to file separately allowed. The Court discussed this rule for context but held it did not govern the present filings.

• Batas Pambansa Blg. 22 — The statute penalizing the issuance of bouncing checks. The criminal complaints filed against Caroline arose from the dishonored checks that also formed the basis of the civil collection case.

Consuelo Ynares-Santiago (Chairperson), Renato C. Corona, Antonio Eduardo B. Nachura, and Ruben T. Reyes concurred.