In Hyatt Industrial Manufacturing Corp. vs. Asia Dynamic Electrix Corp., the Supreme Court affirmed that when a criminal action for violation of Batas Pambansa Blg. 22 (B.P. 22) is filed, the corresponding civil action is deemed instituted. The ruling clarifies that a separate civil action to recover the amount of the dishonored checks is barred under the principle of litis pendentia if a criminal case involving the same checks is already pending. This decision underscores the policy against forum shopping and aims to prevent multiplicity of suits and potentially conflicting judgments, ensuring judicial economy and fairness.

Dishonored Checks and Duplicative Lawsuits: Was Forum Shopping Committed?

This case arose from a dispute between Hyatt Industrial Manufacturing Corporation (petitioner) and Asia Dynamic Electrix Corp. (respondent). The petitioner filed a complaint for recovery of sum of money against the respondent, alleging that the respondent purchased electrical conduits and fittings but failed to honor the issued checks. Prior to this civil action, the petitioner had already filed criminal complaints for violation of B.P. 22 against the officers of the respondent corporation concerning the same dishonored checks. The respondent moved to dismiss the civil complaint, arguing that it was already included in the criminal actions, filing a separate civil action was prohibited, and that the petitioner was guilty of forum shopping.

The trial court initially denied the motion to dismiss, but the Court of Appeals reversed this decision, holding that the civil action was indeed included in the pending criminal cases. This led the petitioner to file a petition for review, raising the issue of whether the civil action could proceed independently of the criminal actions, particularly concerning forum shopping and violation of procedural rules. The Supreme Court had to determine if filing a separate civil case, while criminal charges for B.P. 22 involving the same dishonored checks were pending, constituted forum shopping and violated the procedural rules against splitting causes of action.

The Supreme Court emphasized the effect of the 2000 Rules on Criminal Procedure regarding B.P. 22 cases. Section 1(b) of Rule 111 states:

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.

This rule effectively merges the criminal and civil actions into one proceeding to prevent the use of courts as mere collection agencies and to reduce the number of cases filed. The Court clarified that after filing criminal cases for violation of B.P. 22, the civil action for the recovery of the check’s amount is impliedly instituted, negating the need for a separate reservation to file the civil action.

The Supreme Court agreed with the Court of Appeals that there was indeed identity of parties and causes of action between the civil case and the criminal cases. The court held that since the criminal cases were filed against the officers who signed the checks on behalf of the respondent corporation, the interests were essentially the same. The cause of action, which was the recovery of the amount of the dishonored checks, was also identical. Allowing the separate civil action to proceed would risk double recovery and create inconsistent judgments.

Building on this principle, the court addressed the issue of forum shopping. It stated that the inclusion of additional checks in the civil case, not covered by the criminal charges, was an attempt to circumvent the rules against forum shopping. The Court reiterated that forum shopping is a deplorable practice that ridicules the judicial process. The court stated that it will not permit litigants to resort to multiple fora to increase their chances of obtaining a favorable ruling.

Furthermore, the court underscored the elements of litis pendentia, which include (1) identity of parties, (2) identity of rights asserted and relief prayed for, and (3) that any judgment in the pending case would amount to res judicata in the other. All these elements were present, barring the separate civil action from proceeding.

In conclusion, the Supreme Court denied the petition, holding that the Court of Appeals committed no reversible error. The ruling reinforced the policy against forum shopping and the principle that a civil action to recover the amount of dishonored checks is deemed included in a pending criminal case for violation of B.P. 22, ensuring judicial efficiency and preventing potential abuse of the legal system.

FAQs

What was the key issue in this case?	The key issue was whether a separate civil action for recovery of money could proceed independently when criminal cases for violation of B.P. 22, involving the same dishonored checks, were already pending.
What is Batas Pambansa Blg. 22 (B.P. 22)?	B.P. 22, also known as the Bouncing Checks Law, penalizes the issuance of checks without sufficient funds or credit, and it carries both criminal and civil liabilities.
What is forum shopping?	Forum shopping is the practice of litigants filing multiple suits in different courts to increase their chances of obtaining a favorable judgment, which is strictly prohibited.
What is litis pendentia?	Litis pendentia means “a pending suit” and refers to the principle that an ongoing case bars another action if they involve the same parties, rights, and cause of action.
What does Rule 111, Section 1(b) of the Revised Rules on Criminal Procedure state?	Rule 111, Section 1(b) states that a criminal action for violation of B.P. 22 is deemed to include the corresponding civil action, and no separate reservation to file the civil action is allowed.
Can I file a separate civil case to recover the amount of a dishonored check if I have already filed a criminal case for B.P. 22?	No, the Rules prohibit filing a separate civil case after the criminal complaint for B.P. 22 is filed; the civil action is deemed instituted in the criminal case.
What should I do if I want to recover damages beyond the face value of the dishonored check?	If you seek to recover liquidated, moral, nominal, temperate, or exemplary damages, you must pay additional filing fees based on the amounts claimed in the complaint or information.
What is the purpose of including the civil action in the criminal case for B.P. 22?	The inclusion aims to streamline proceedings, prevent courts from being used as mere collection agencies, and discourage the filing of multiple suits arising from the same dishonored checks.

The Supreme Court’s decision in Hyatt Industrial Manufacturing Corp. vs. Asia Dynamic Electrix Corp. serves as a clear reminder of the rules against forum shopping and the proper procedure for handling cases involving dishonored checks. Litigants must ensure compliance with procedural rules to avoid dismissal of their claims.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Hyatt Industrial Manufacturing Corp. vs. Asia Dynamic Electrix Corp., G.R. No. 163597, July 29, 2005