G.R. No. 164358 ; December 20, 2006
THERESA MACALALAG, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

FACTS

Petitioner Theresa Macalalag obtained two loans of P100,000 each from Grace Estrella, with a 10% monthly interest. After paying interest, she secured a reduced rate of 6% per month and executed acknowledgment receipts promising to pay the principal. As security, she issued two PNB checks, each for P100,000. Both checks were dishonored upon presentment due to a closed account. Estrella sent a notice of dishonor, but Macalalag failed to make good the checks, leading to the filing of two criminal complaints for violation of Batas Pambansa Blg. 22 (B.P. 22).
During trial, Macalalag admitted the indebtedness and issuance of the checks but claimed she had made total payments of P355,837.98, including P199,837.98 paid during the pendency of the cases. Estrella admitted receiving the latter amount but contended it was applied to interest. The Municipal Trial Court convicted Macalalag on both counts, imposing fines and ordering civil indemnity. The Regional Trial Court affirmed the decision. The Court of Appeals modified the ruling, convicting Macalalag for only one count of B.P. 22, corresponding to the second check, and crediting her payments.

ISSUE

Whether the Court of Appeals correctly applied the ruling in Medel v. Court of Appeals to reduce the petitioner’s criminal liability by finding the stipulated interest rates unconscionable and thereby adjusting the application of her payments.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ decision. The legal logic is anchored on the principle that a criminal action for violation of B.P. 22 is deemed to include the corresponding civil action, as per Section 1(b), Rule 111 of the Rules of Court. Consequently, the validity of the interest rates, which is a civil matter, can be adjudicated within the criminal prosecution. The Court, citing Medel, recognized that the stipulated interest rates of 10% and later 6% per month were unconscionable, as they exceeded rates previously declared iniquitous.
This finding allowed for the equitable re-computation of Macalalag’s payments. The Court of Appeals correctly applied her payments first to the unconscionable interest, then to the principal of the first loan, and any excess to the second loan. Since the payments satisfied the first loan’s principal, her liability for the first check was extinguished, leading to her acquittal on that count. However, the remaining balance was insufficient to cover the second loan’s principal, sustaining her conviction for issuing the second dishonored check. This application aligns with the rule that in criminal prosecutions, doubts are resolved in favor of the accused, and civil liabilities intertwined with the criminal act must be justly settled.