FACTS: 

Petitioner Teodoro Reyes and Advanced Foundation Construction Systems Corp., represented by respondent Ettore Rossi, executed a deed of conditional sale involving the purchase by Reyes of a Dredging Pump worth P10,000,000.00. 

The parties agreed therein that Reyes would pay the sum of P3,000,000.00 as downpayment, and the balance of P7,000,000.00 through post-dated checks. 

Reyes issued and delivered nine post-dated checks.

Rossi deposited three of which, on their maturity dates, in Advanced Foundation’s bank account at the PCI Bank in Makati. 

Two of the checks were denied payment upon Reyes’ instructions to stop their payment, while the third was dishonored for insufficiency of funds.

Rossi likewise deposited two more checks, but the checks were returned with the notation Account Closed stamped on them. 

He did not anymore deposit the three remaining checks on the assumption that they would be similarly dishonored.

Meanwhile, Reyes commenced an action for rescission of contract and damages in the RTC of Quezon City alleging that the dredging pump did not meet the specifications in the contract.

Rossi, on the other hand, charged Reyes with five counts of estafa and five counts of violation of B.P. Blg. 22 before the Office of the City Prosecutor of Makati and another charge for violation of BP 22 in Office of the City Prosecutor of Quezon City.

Reyes sought for the suspension of the criminal proceedings because of the pendency in the RTC of the civil action for rescission of contract that posed a prejudicial question as to the criminal proceedings.

The Assistant City Prosecutor handling the preliminary investigation recommended the dismissal of the charges of estafa and the suspension of the proceedings relating to the violation of BP Blg. 22 based on a prejudicial question.

Rossi appealed to the DOJ, but the same was denied.

After the denial of his MR, Rossi challenged the resolutions of the Secretary of Justice by petition for certiorari in the CA.

The Appellate Court Granted his Petition in so far as the issue of the existence of prejudicial question is concerned.

The CA Reversed and Set Aside the order suspending the preliminary investigation.

Hence, this appeal by Reyes.

ISSUE:  

Whether or not an action for rescission of contract is a prejudicial question that would suspend the pending criminal proceedings.

RULING:

The petition for review is without merit.

A prejudicial question generally comes into play in a situation where a civil action and a criminal action are both pending, and there exists in the former an issue that must first be determined before the latter may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case. 

The rationale for the suspension on the ground of a prejudicial question is to avoid conflicting decisions.

Two elements that must concur in order for a civil case to be considered a prejudicial question are expressly stated in Section 7, Rule 111 of the 2000 Rules of Criminal Procedure, to wit:

Section 7. Elements of prejudicial question. 

The elements of a prejudicial question are: 

(a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.

It is true that the rescission of a contract results in the extinguishment of the obligatory relation as if it was never created, the extinguishment having a retroactive effect. 

The rescission is equivalent to invalidating and unmaking the juridical tie, leaving things in their status before the celebration of the contract. 

However, until the contract is rescinded, the juridical tie and the concomitant obligations subsist.

Meanwhile, the violation of  Batas Pambansa Blg. 22 requires the concurrence of the following elements, namely: 

(1) the making, drawing, and issuance of any check to apply for account or for value; 

(2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

We agree with the holding of the CA that the civil action for the rescission of contract was not determinative of the guilt or innocence of Reyes.

The rescission of a contract of sale is not a prejudicial question that will warrant the suspension of the criminal proceedings commenced to prosecute the buyer for violations of the Bouncing Checks Law (Batas Pambansa Blg. 22) arising from the dishonor of the checks the buyer issued in connection with the sale.