RJ Jacinto in hot water for P465M bounced checks

ABS-CBN News

Posted at Aug 08 2010 12:04 AM | Updated as of Aug 08 2010 08:04 AM

MANILA, Philippines – The Department of Justice (DoJ) was given the approval to indict businessman-rocker Ramon “RJ” Jacinto for violation of the bouncing check law amounting to P465 million.

This was after Supreme Court’s Associate Justice Martin Villarama of the Third Division, granted the Land Bank of the Philippines’ (LBP) petition to reinstate the resolution issued by the DOJ on October 25, 2000.

The DOJ resolution, which the Court of Appeals nullified in its ruling dated August 6, 2002, found probable cause to prosecute Jacinto for violation of Batas Pambansa Blg. (BP) 22 or The Bouncing Checks Law.

The Court noted the “Restructuring Agreement” he signed as president of First Women’s Credit Corporation (FWCC) with LBP on June 3, 1998 or prior to the maturity of the post-dated checks he issued. The agreement did not release him from his loan obligations with the bank.

“There was no express stipulation in the Restructuring Agreement that respondent is released from his liability on the issued checks and in fact the letter-agreement between FWCC and LBP expressly provide that respondent’s joint and several signatures continue to secure the loan obligation and the postdated checks issued continue to guaranty the obligation,” the Court noted.

Citing the LBP, the Court said that out of the 9 post-dated checks issued by Jacinto, 8 were dated June 8 to October 30, 1998, or after the execution of the Restructuring Agreement.

The SC said the agreement contains a proviso which states that: “This agreement shall not novate or extinguish all previous security, mortgage, and other collateral agreements, promissory notes, solidary undertaking previously executed by and between the parties and shall continue in full force and effect modified only by the provisions of this agreement.”

Concurring with the ruling were Associate Justices Conchita Carpio-Morales, Lucas Bersamin and Jose Catral Mendoza.

Based on the records, FWCC obtained a loan from LBP in the total amount of P400 million, evidenced by a credit line agreement dated August 22, 1997.

Jacinto issued 9 postdated checks worth P464 million and drawn against FWCC’s account at the Philippine National Bank (PNB) as security for the loan.

Before the checks matured, LBP and Jacinto executed several letter agreements which culminated in the execution of a Restructuring Agreement on June 3, 1998.

When FWCC defaulted in the payment of loan obligation under the terms of their restructured agreement, petitioner presented for payment to the drawee bank the post-dated checks as they matured.

However, all the checks were dishonored for reason “payment stopped” or “drawn against insufficient funds.”

This prompted LBP to file a case for violation of B.P 22 against Jacinto before the Makati City Prosecutor’s Office.

In his counter-affidavit, Jacinto insisted that the charges were baseless because the loan obligation had been extinguished by virtue of the Restructuring Agreement.

The City Prosecutor’s Office subsequently dismissed LBP’s complaint as it held that the letter-agreements between LBP and FWCC restructured and replaced the original loan agreement.

The DOJ reversed the City Prosecutor’s Office resolution saying that there is probable cause to indict Jacinto for violation of BP 22. This prompted, Jacinto to elevate the case before the CA, which in turn reversed the DOJ resolution.

The LBP filed a petition review before the SC seeking the nullification of the CA’s ruling which the High Tribunal granted.