View full case

NISSAN GALLERY-ORTIGAS v. PURIFICACION F. FELIPE

FACTS:

Nissan Gallery-Ortigas (Nissan), a car dealership, filed a criminal complaint for violation of Batas Pambansa Blg. 22 (BP 22) against Purificacion F. Felipe (Purificacion). This was due to Purificacion issuing a postdated check in the amount of P1,020,000.00, which was dishonored upon presentment due to "STOP PAYMENT."

Purificacion issued the said check because her son, Frederick Felipe (Frederick), purchased a Nissan Terrano 4x4 sports and utility vehicle (SUV) from Nissan. The transaction was Cash-on-Delivery with no downpayment required. Frederick failed to pay upon delivery but still took possession of the vehicle.

After several demand letters and negotiations, Frederick failed to pay his outstanding obligation amounting to P1,020,000.00. He then requested his mother, Purificacion, to issue the check as payment for his obligation. Purificacion agreed and tendered the postdated check. However, the check was dishonored upon presentment due to "STOP PAYMENT."

Nissan sent a demand letter to Purificacion, but she refused to replace the check, claiming that she was not the one who purchased the vehicle. As a result, Nissan filed a criminal case for violation of BP 22 against her.

During the preliminary investigation, Purificacion paid P200,000.00, but no additional payment was made. After trial, the MeTC acquitted Purificacion of the criminal charge but held her civilly liable to Nissan. The RTC affirmed the decision, ruling that Purificacion was estopped from denying that she issued the check. Purificacion filed a motion for reconsideration but was denied.

The CA granted Purificacion's petition for review, stating that there was no privity of contract between Nissan and Purificacion. The CA also found that Purificacion could not be held civilly liable as an accommodation party. Nissan filed a motion for reconsideration, but it was denied. Hence, this petition for review on certiorari was filed by Nissan.

ISSUES:

  1. Whether or not Purificacion is liable to Nissan for the civil aspect of the case.

  2. Whether or not Purificacion can be considered an accommodation party.

RULING:

  1. Purificacion is not liable to Nissan for the civil aspect of the case. The Court of Appeals ruled that there was no privity of contract between Nissan and Purificacion. Since Purificacion was acquitted of the criminal charge, there was no basis for her to be held civilly liable to Nissan.

  2. Purificacion cannot be considered an accommodation party. The Court of Appeals concluded that Purificacion only came in after Frederick failed to pay the purchase price, and her liability was limited to her act of issuing a worthless check.

PRINCIPLES:

  • Privity of contract is necessary for one to be civilly liable.

  • Acquittal from a criminal charge extinguishes civil liability.

  • Liability as an accommodation party requires an instrument to have been executed for the accommodation of another person.