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Oriel Magno vs.

CA Date of Promulgation: 26 June 1992 Nature: Appeal by certiorari to review the decision of Court of Appeals Facts: Petitioner was in process of putting up a car repair shop sometime in April 1983, but he did not have complete equipment that could make his venture workable. He lacked funds to purchase necessary equipment. He approached Corazon Teng, VP of Mancor Industries, a distributor of equipment who referred him to LS Finance A lease/purchase agreement specifying a warranty deposit (29,790) of 30% for Magno to put up. Claimino lg he could not afford it, Magno asked LS Finance to find a 3rd party lender to lend him the amount. LENDER = TENG, specified a 3% interest on short term loan. Magno issued postdated checks to LS Finance, who gave it to Teng. When check matured, Magno said he could not cover it and he was not banking with Pacific Bank anymore. In lieu, he issued 6 check - first 2 checks honored, last 4 in question. When business failed, Magno could no longer pay rent to LS Finance, LS pulled out equipment. Magno promised to pay the rest of the warranty deposit, but the remaining checks were no longer honored due to closed account. He was convicted of four counts of violating BP 22. CA affirmed this decision because issuing a bouncing check is a crime ISSUE: (1) WON Magno is guilty of violating B.P. 22 upon review (2) WON post-dated checks were drawn or issued "to apply on account or for value", as required under Section 1 of B.P. Blg, 22. Ruling: Decision REVERSED, accused-petitioner, ACQUITTED Held:

(1) NO. There is no violation of BP22

by issuance of check to cover warranty deposit given by complainant to enable drawer to import equipment financed on lease-purchase agreement. Since transaction did not become purchase when Magno failed to pay rent and LS Finance pulled out equipment. No need for Magno to continue paying warranty deposit (warranty deposit is for purchase of equipment). (2) NO violation is committed when complainant told drawer that he has insufficient funds in the bank. The 4 checks were issued to collateralize rent/ an accommodation and not for purchase equipment/receipt of an actual account or credit for value. Ratio: RTC and CAs decision merely relied on the law, without looking into the real nature of warranty deposit. Acquittal based on action not constituting a wrong sought to be punished in offense charged (not because of lack of intent). Protective theory affirms that the primary function of punishment is the protective of society against actual and potential wrongdoers Ex. Actuations of Mrs. Carolina Teng amount to that of potential wrongdoers whose operations should also be clipped in order that the unwary public will not fall prey to vicious transactions