THIRD DIVISION

[G.R. NO. 139292.  December 5, 2000]

JOSEPHINE DOMAGSANG, petitioner, vs. THE HONORABLE COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

D E C I S I O NVITUG, J.:

Petitioner was convicted by the Regional Trial Court of Makati, Branch 63, of having violated Batas Pambansa ("B.P.") Blg. 22 (Anti-Bouncing Check Law), on eighteen (18) counts, and sentenced to "suffer the penalty of One (1) Year imprisonment for each count (eighteen [18] counts)." Petitioner was likewise “ordered to pay the private complainant the amount of P573,800.00.”[1] The judgment, when appealed to the Court of Appeals (CA-G.R. CR No. 18497), was affirmed in toto by the appellate court.

It would appear that petitioner approached complainant Ignacio Garcia, an Assistant Vice President of METROBANK, to ask for financial assistance.  Garcia accommodated petitioner and gave the latter a loan in the sum of P573,800.00.  In exchange, petitioner issued and delivered to the complainant 18 postdated checks for the repayment of the loan. When the checks were, in time, deposited, the instruments were all dishonored by the drawee bank for this reason:  “Account closed.” The complainant demanded payment allegedly by calling up petitioner at her office.  Failing to receive any payment for the value of the dishonored checks, the complainant referred the matter to his lawyer who supposedly wrote petitioner a letter of demand but that the latter ignored the demand.

On 08 May 1992, Criminal Case No. 92-4465 was lodged against petitioner before the Regional Trial Court ("RTC") of Makati.  The Information read:

"That on or about the 24th day of June, 1991, in the Municipality of Makati, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there willfully, unlawfully and feloniously make out, draw and issue to complainant Ignacio H. Garcia, Jr., to apply on account or for value the dated check/described below:

"Check No.                           :             149900

Drawn Against                    :             Traders Royal Bank

In the Amount of                 :             P50,000.00

Dated/Postdated                :             June 24, 1991

Payable to                                           :             Ignacio H. Garcia, Jr.

"said accused well knowing that at the time of issue thereof, she did not have sufficient funds in or credit with the drawee bank for the payment in full of the face amount of such check upon its presentment, which check when presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for the reason `ACCOUNT CLOSED' and despite receipt of notice of such dishonor, the accused failed to pay said payee the face amount of said check or to make arrangement for full payment thereof within five (5) banking days after receiving notice.

"CONTRARY TO LAW."[2]

Subsequent Informations, docketed Criminal Cases No. 92-4466 to No. 92-4482, inclusive, similarly worded as in Criminal Case No. 92-4465 except as to the dates, the number, and the amounts of the checks hereunder itemized -"Check Number                                     Dated/Postdated                                                                               Amount TRB – No. 161181                          July 18, 1991                               P6,000.00TRB – No. 149906                          July 24, 1991                               3,000.00           No. 182074                           July 30, 1991                               29,700.00           No. 182084                           August 30, 1991                                        9,300.00           No. 182078                           September 15, 1991                    6,000.00           No. 161183                           September 18, 1991                    6,000.00           No. 161177                           September 18, 1991                  100,000.00           No. 182085                           September 30, 1991                  9,000.00           No. 182079                           October 15, 1991                       6,000.00           No. 182086                           October 30, 1991                       10,500.00           No. 182080                           November 15, 1991                   6,000.00           No. 182087                           November 30, 1991                   11,400.00           No. 182081                           December 15, 1991                   6,000.00           No. 182082                           December 15, 1991                   100,000.00           No. 182088                           December 30, 1991                   12,000.00           No. 182089                           December 30, 1991                   100,000.00           No. 182090                           December 30, 1991                   100,000.00"[3]

were also filed against petitioner.  The cases were later consolidated and jointly tried following the "not guilty" plea of petitioner when arraigned on 02 November 1992.

On 07 September 1993, petitioner filed a demurrer to the evidence, with leave of court, premised on the absence of a demand letter and that the checks were not issued as payment but as evidence of indebtedness of petitioner or as collaterals of the loans obtained by petitioner.  Opposed by the prosecution, the demurrer was denied by the trial court.  In the hearing of 17 February 1994, petitioner, through counsel, waived her right to present evidence in her defense.  Relying solely then on the evidence submitted by the prosecution, the lower court rendered judgment convicting petitioner.  The decision, as heretofore stated, was affirmed by the Court of Appeals in its decision of 15 February 1999. Reconsideration was also denied in the resolution, dated 09 July 1999, of the appellate court.

Hence, the instant petition where petitioner raised the following issues for resolution by the Court -

"1. Whether or not an alleged verbal demand to pay sufficient to convict herein petitioner for the crime of violation of B.P. Blg. 22;

"2. Whether or not the Honorable Court of Appeals committed reversible error when it affirmed the judgment of conviction rendered by the trial court, on the ground that a written notice of dishonor is not necessary in a prosecution for violation of B.P. Blg. 22, contrary to the pronouncement of the Supreme Court in the case of Lao vs. Court of Appeals, 274 SCRA 572; (and)

"3. Whether or not the Honorable Court of Appeals erred in considering the alleged written demand letter, despite failure of the prosecution to formally offer the same."[4]

The pertinent provisions of B.P. Blg. 22 "Bouncing Checks Law," provide:

"SECTION 1.  Checks without sufficient funds.  – Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand pesos, or both such fine and imprisonment at the discretion of the court.

"The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

"Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

"SEC. 2.  Evidence of knowledge of insufficient funds.  – The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

"SEC. 3.  Duty of drawee; rules of evidence.  – It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon presentment, to cause to be written, printed or stamped in plain language thereon, or attached thereto, the reason for drawee's dishonor or refusal to pay the same:  Provided, That where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal.  In all prosecutions under this Act, the introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facieevidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped or attached by the drawee on such dishonored check.

"Notwithstanding receipt of an order to stop payment, the drawee shall state in the notice that there were no sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact."[5] (Underscoring supplied.)

The law enumerates the elements of the crime to be (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.[6]

There is deemed to be a prima facie evidence of knowledge on the part of the maker, drawer or issuer of insufficiency of funds in or credit with the drawee bank of the check issued if the dishonored check is presented within 90 days from the date of the check and the maker or drawer fails to pay thereon or to make arrangement with the drawee bank for that purpose.  The statute has created the prima facie presumption evidently because "knowledge" which involves a state of mind would be difficult to establish.[7] The presumption does not hold, however, when the maker, drawer or issuer of the check pays the holder thereof the amount due thereon or makes arrangement for payment in full by the drawee bank of such check within 5 banking days after receiving notice that such check has not been paid by the drawee bank.

In Lao vs. Court of Appeals,[8] this Court explained:

“x x x.  Section 2 of B.P. Blg. 22 clearly provides that this presumption arises not from the mere fact of drawing, making and issuing a bum check; there must also be a showing that, within five banking days from receipt of the notice of dishonor, such maker or drawer failed to pay the holder of the check the amount due thereon or to make arrangement for its payment in full by the drawee of such check.

“It has been observed that the State, under this statute, actually offers the violator `a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated.’ This was also compared `to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability.’ In this light, the full payment of the amount appearing in the

check within five banking days from notice of dishonor is a `complete defense.’ The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution.  Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner.  Petitioner has a right to demand – and the basic postulates of fairness require – that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under B.P. Blg. 22.”[9]

In the assailed decision, the Court of Appeals predicated the conviction of petitioner on the supposed fact that petitioner was informed of the dishonor of the checks through verbal notice when the complainant had called her up by telephone informing her of the dishonor of the checks and demanding payment therefor.  The appellate court said:

"The maker's knowledge of the insufficiency of his funds is legally presumed from the dishonor of his check (People vs. Laggui, 171 Phil. 305).  The law does not require a written notice of the dishonor of such check.

"In the instant case, appellant had knowledge that her checks were dishonored by the bank when complainant Garcia made several oral demands upon her to pay the value of the checks in the amount of P573,800.00.  Despite said demands, appellant failed and refused to pay the same.  Moreover, complaining witness further testified that his lawyer made a written demand upon appellant but the latter ignored said demand (tsn., May 27, 1993, pp. 13-14).  In this connection, appellant waived her right to present evidence or rebut complainant's testimony that he made oral demands upon appellant to make good the dishonored checks and his lawyer wrote her a demand letter.

"Likewise, appellant did not object to the admission of the complainant's testimony with regard to the written demand by moving that it be stricken off the record for being hearsay, hence, the same is admissible evidence.  In the case of People vs. Garcia, 89 SCRA 440, the Supreme court ruled:

"`x x x (It) must be noted that neither the defendant nor his counsel below objected to the admission of the testimonies which are now being assailed as hearsay.  This is fatal to defendant-appellant's present posture since the failure to object to hearsay evidence constitutes a waiver of the x x right to cross-examine the actual witness to the occurrence, rendering the evidence admissible.'"[10]

Petitioner counters that the lack of a written notice of dishonor is fatal.  The Court agrees.While, indeed, Section 2 of B.P. Blg. 22 does not state that the notice of dishonor be in writing,

taken in conjunction, however, with Section 3 of the law, i.e., "that where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal,"[11] a mere oral notice or demand to pay would appear to be insufficient for conviction under the law.  The Court is convinced that both the spirit and letter of the Bouncing Checks Law would require for the act to be punished thereunder not only that the accused issued a check that is dishonored, but that likewise the accused has actually been notified in writing of the fact of dishonor.[12] The consistent rule is that penal statutes have to be construed strictly against the State and liberally in favor of the accused.[13]

Evidently, the appellate court did not give weight and credence to the assertion that a demand letter was sent by a counsel of the complainant because of the failure of the prosecution to formally offer it in evidence.  Courts are bound to consider as part of the evidence only those which are formally offered[14]for judges must base their findings strictly on the evidence submitted by the parties at the trial.[15] Without the written notice of dishonor, there can be no basis, considering what has heretofore been said, for establishing the presence of "actual knowledge of insufficiency of funds."[16]

The prosecution may have failed to sufficiently establish a case to warrant conviction, however, it has clearly proved petitioner's failure to pay a just debt owing to the private complainant.  The total face value of the dishonored checks, to wit-Check Number                    Dated/Postdated                         AmountTRB – No. 149900                          June 24, 1991                              P50,000.00TRB – No. 161181                          July 18, 1991                               6,000.00TRB – No. 149906                          July 24, 1991                               3,000.00

          No. 182074                            July 30, 1991                               29,700.00          No. 182084                            August 30, 1991                          1,300.00          No. 182078                            September 15, 1991                  6,000.00          No. 161183                            September 18, 1991                  6,000.00          No. 161171                            September 18, 1991                  100,000.00          No. 182085                            September 30, 1991                  9,900.00          No. 182079                            October 15, 1991                       6,000.00          No. 182086                            October 30, 1991                       10,500.00          No. 182080                            November 15, 1991                   6,000.00          No. 182087                            November 30, 1991                   11,400.00          No. 182081                            December 15, 1991                   6,000.00          No. 182082                            December 15, 1991                   100,000.00          No. 182088                            December 30, 1991                   12,000.00          No. 182089                            December 30, 1991                   100,000.00          No. 182090                            December 30, 1991                   100,000.00"[17]

or the sum of P563,800, has yet to be made good by petitioner.  This amount, with 12% legal interest per annum from the filing of the information until the finality of this decision, must be forthwith settled.

WHEREFORE, the decision of the Court of Appeals is MODIFIED.  Petitioner Josephine Domagsang is acquitted of the crime charged on reasonable doubt.  She is ordered, however, to pay to the offended party the face value of the checks in the total amount of P563,800.00 with 12% legal interest, per annum, from the filing of the informations until the finality of this decision, the sum of which, inclusive of the interest, shall be subject thereafter to 12%, per annum, interest until the due amount is paid.  Costs against petitioner.

SO ORDERED.Melo, (Chairman), Panganiban, and Gonzaga-Reyes, JJ., concur.

[1]  Rollo, p. 23.[2]  Rollo, p. 26.[3]  Rollo, pp. 26-27.[4]  Rollo, p. 53-54.[5]  Batas Pambansa Blg. 22.[6]  Section 1, Batas Pambansa Blg. 22; see Sycip vs. Court of Appeals, G.R. No. 125059, 17 March 2000; Navarro vs. Court of Appeals, 234 SCRA 639.[7]  Llamado vs. Court of Appeals, 270 SCRA 423; Lozano vs. Martinez, 146 SCRA 323.[8]  274 SCRA 572.[9]  At pp. 593-594.[10] Rollo, pp. 28-29.

[11]  SEC. 3.  Duty of drawee; rules of evidence.  – It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon presentment, to cause to be written, printed or stamped in plain language thereon, or attached thereto, the reason for drawee's dishonor or refusal to pay the same:  Provided, That where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal.   In all prosecutions under this Act, the introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped or attached by the drawee on such dishonored check.

"Notwithstanding receipt of an order to stop payment, the drawee shall state in the notice that there were no sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact.[12]  See Lao vs. Court of Appeals, 274 SCRA 572; Idos vs. Court of Appeals, 296 SCRA 194.[13]  Savage vs. Taypin, G.R. No. 134217, 11 May 2000.[14]  Section 34, Rule 132, Rules of Court.[15]  US vs. Solana, 33 Phil. 582; Dayrit vs. Gonzales, 7 Phil. 182; Candido vs. Court of Appeals, 253 SCRA 78; People vs. Franco, 269 SCRA 211.[16]  See Idos vs. Court of Appeals, 296 SCRA 194; King vs. People, G.R. No. 131540, 02 December 1999.[17]  Annex D, Rollo, p. 76.

THIRD DIVISION

[G.R. No. 119178.  June 20, 1997]

LINA LIM LAO, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

D E C I S I O NPANGANIBAN, J.:

May an employee who, as part of her regular duties, signs blank corporate checks -- with the name of the payee and the amount drawn to be filled later by another signatory -- and, therefore, does so without actual knowledge of whether such checks are funded,  be held criminally liable for violation of Batas Pambansa Bilang 22 (B.P. 22), when checks so signed are dishonored due to insufficiency of funds?  Does a notice of dishonor sent to the main office of the corporation constitute a valid notice to the said employee who holds office in a separate branch and who had no actual knowledge thereof?  In other words, is constructive knowledge of the corporation, but not of the signatory-employee, sufficient?

These are the questions raised in the petition filed on March 21, 1995 assailing the Decision [1] of Respondent Court of Appeals[2] promulgated on December 9, 1994 in CA-G.R. CR No. 14240 dismissing the appeal of petitioner and affirming the decision dated September 26, 1990 in Criminal Case Nos. 84-26967 to 84-26969 of the Regional Trial Court of Manila, Branch 33.  The dispositive portion of the said RTC decision affirmed by the respondent appellate court reads:[3]

“WHEREFORE, after a careful consideration of the evidence presented by the prosecution and that of the defense, the Court renders judgment as follows:

In Criminal Case No. 84-26969 where no evidence was presented by the prosecution notwithstanding the fact that there was an agreement that the cases be tried jointly and also the fact that the accused Lina Lim Lao was already arraigned, for failure of the prosecution to adduce evidence against the accused, the Court hereby declares her innocent of the crime charged and she is hereby acquitted with cost de oficio.

For Criminal Case No. 84-26967, the Court finds the accused Lina Lim Lao guilty beyond reasonable doubt of the crime charged and is hereby sentenced to suffer the penalty of ONE (1) YEAR imprisonment and to pay a fine of P150,000.00 without subsidiary imprisonment in case of insolvency.

For Criminal Case No. 84-26968, the Court finds the accused Lina Lim Lao guilty beyond reasonable doubt of the crime charged and is hereby sentenced to suffer the penalty of ONE (1) YEAR imprisonment and to pay a fine of P150,000.00 without subsidiary imprisonment in case of of (sic) insolvency.

For the two cases the accused is ordered to pay the cost of suit.

The cash bond put up by the accused for her provisional liberty in Criminal Case No. 84-26969 where she is declared acquitted is hereby ordered cancelled (sic).

With reference to the accused Teodulo Asprec who has remained at large, in order that the cases as against him may not remain pending in the docket for an indefinite period, let the same be archived without prejudice to its subsequent prosecution as soon as said accused is finally apprehended.

Let a warrant issue for the arrest of the accused Teodulo Asprec which warrant need not be returned to this Court until the accused is finally arrested.

SO ORDERED.”

The Facts

Version of the Prosecution

The facts are not disputed.  We thus lift them from the assailed Decision, as follows:

“Appellant (and now Petitioner Lina Lim Lao) was a junior officer of Premiere Investment House (Premiere) in its Binondo Branch.  As such officer, she was authorized to sign checks for and in behalf of the corporation (TSN, August 16, 1990, p. 6).  In the course of the business, she met complainant Father Artelijo Pelijo, the provincial treasurer of the Society of the Divine Word through Mrs. Rosemarie Lachenal, a trader for Premiere.  Father Palijo was authorized to invest donations to the society and had been investing the society’s money with Premiere (TSN, June 23, 1987, pp. 5, 9-10).  Father Palijo had invested a total of P514,484.04, as evidenced by the Confirmation of Sale No. 82-6994 (Exh ‘A’) dated July 8, 1993.  Father Palijo was also issued Traders Royal Bank (TRB) checks  in payment of interest, as follows:

Check                                                             Date                                                         Amount

299961                 Oct. 7, 1993  (sic)                   P150,000.00  (Exh. ‘B’)

299962                 Oct. 7, 1983                            P150,000.00  (Exh. ‘C’)

323835                 Oct. 7, 1983                            P 26,010.73

All the checks were issued in favor of Artelijo A. Palijo and signed by appellant (herein petitioner) and Teodulo Asprec, who was the head of operations.  Further evidence of the transaction was the acknowledgment of postdated checks dated July 8, 1983 (Exh . ‘D’) and the cash disbursement voucher (Exh. ‘F’, TSN, supra, at pp. 11-16).

When Father Palijo presented the checks for encashment, the same were dishonored for the reason ‘Drawn Against Insufficient Funds’ (DAIF).  Father Palijo immediately made demands on premiere to pay him the necessary amounts.  He first went to the Binondo Branch but was referred to the Cubao Main Branch where he was able to talk with the President, Mr. Cariño.  For his efforts, he was

paidP5,000.00.  Since no other payments followed, Father Palijo wrote Premiere a formal letter of demand.  Subsequently, Premiere was placed under receivership” (TSN, supra, at pp. 16-19).[4]

Thereafter, on January 24, 1984, Private Complainant Palijo filed an affidavit-complaint against Petitioner Lina Lim Lao and Teodulo Asprec for violation of B.P. 22.  After preliminary investigation,[5] three Informations charging Lao and Asprec with the offense defined in the first paragraph of Section 1, B.P. 22 were filed by Assistant Fiscal Felix S. Caballes before the trial court on May 11, 1984,[6] worded as follows:

1.  In Criminal Case No. 84-26967:

“That on or about October 7, 1983 in the City of Manila, Philippines, the said accused did then and there wilfully and unlawfully draw and issue to Artelijo A. Palijo to apply on account or for value a Traders Royal Bank Check No. 299962 for P150,000.00 payable to Fr. Artelijo A. Palijo dated October 7, 1983 well knowing that at the time of issue he/she did not have sufficient funds in or credit with the drawee bank for full payment of the said check upon its presentment as in fact the said check, when presented within ninety (90) days from the date thereof, was dishonored by the drawee bank for the reason: ‘Insufficient Funds’; that despite notice of such dishonor, said accused failed to pay said Artelijo A. Palijo the amount of the said check or to make arrangement for full payment of the same within five (5) banking days from receipt of said notice.

CONTRARY TO LAW.”

2.  In Criminal Case No. 84-26968:

“That on or about October 7, 1983 in the City of Manila, Philippines, the said accused did then and there wilfully and unlawfully draw and issue to Artelijo A. Palijo to apply on account or for value a Traders Royal Bank Check No. 299961 for P150,000.00 payable to Fr. Artelijo A. Palijo dated October 7, ‘83 well knowing that at the time of issue he/she did not have sufficient funds in or credit with the drawee bank for full payment of the said check upon its presentment as in fact the said check, when presented within ninety (90) days from the date thereof, was dishonored by the drawee bank for the reason: ‘Insuficient Funds’; that despite notice of such dishonor, said accused failed to pay said Artelijo A. Palijo the amount of the said check or to make arrangement for full payment of the same within five (5) banking days from receipt of said notice.

CONTRARY TO LAW.”

3.  And finally in Criminal Case No. 84-26969:

“That on or about July 8, 1983 in the City of Manila, Philippines, the said accused did then and there wilfully and unlawfully draw and issue to Artelijo A. Palijo to apply on account  for value a Traders Royal Bank Check No. 323835 for P26,010.03 payable to Fr. Artelijo A. Palijo dated October 7, 1983 well knowing that at the time of issue he/she did not have sufficient funds in or credit with the drawee bank for full payment of the said check upon its presentment as in fact the said check, when presented within ninety (90) days from the date thereof, was dishonored by the drawee bank for the reason:  ‘Insufficient Funds’; that despite notice of such dishonor, said accused failed to pay said Artelijo A. Palijo the amount of the said check or to make arrangement for full payment of the same within five (5) banking days from receipt of said notice.

CONTRARY TO LAW.”

Upon being arraigned, petitioner assisted by counsel pleaded “not guilty.”  Asprec was not arrested; he has remained at large since the trial, and even now on appeal.

After due trial, the Regional Trial Court convicted Petitioner Lina Lim Lao in Criminal Case Nos. 84-26967 and 84-26968 but acquitted her in Criminal Case No. 84-26969.[7] On appeal, the Court of Appeals affirmed the decision of the trial court.

Version of the Defense

Petitioner aptly summarized her version of the facts of the case thus:

“Petitioner Lina Lim Lao was, in 1983, an employee of Premiere Financing Corporation (hereinafter referred to as the ‘Corporation’), a corporation engaged in investment management, with principal business office at Miami, Cubao, Quezon City.  She was a junior officer at the corporation who was, however, assigned not at its main branch but at the corporation’s extension office in (Binondo) Manila.  (Ocampo, T.S.N., 16 August 1990, p. 14)

In the regular course of her duties as a junior officer, she was required to co-sign checks drawn against the account of the corporation.  The other co-signor was her head of office, Mr. Teodulo Asprec.  Since part of her duties required her to be mostly in the field and out of the office, it was normal procedure for her to sign the checks in blank, that is, without the names of the payees, the amounts and the dates of maturity.  It was likewise Mr. Asprec, as head of office, who alone decided to whom the checks were to be ultimately issued and delivered.  (Lao, T.S.N., 28 September 1989, pp. 9-11, 17, 19.)

In signing the checks as part of her duties as junior officer of the corporation, petitioner had no knowledge of the actual funds available in the corporate account.  (Lao, T.S.N., 28 September 1989, p. 21) The power, duty and responsibility of monitoring and assessing the balances against the checks issued, and funding the checks thus issued, devolved on the corporation’s Treasury Department in its main office in Cubao, Quezon City, headed then by the Treasurer, Ms. Veronilyn Ocampo.  (Ocampo, T.S.N., 19 July 1990, p. 4; Lao, T.S.N., 28 September 1989, pp. 21-23)  All bank statements regarding the corporate checking account were likewise sent to the main branch in Cubao, Quezon City, and not in Binondo, Manila, where petitioner was holding office.  (Ocampo, T.S.N., 19 July 1990, p. 24; Marqueses, T.S.N., 22 November 1988, p. 8)

The foregoing circumstances attended the issuance of the checks subject of the instant prosecution.

The checks were issued to guarantee payment of investments placed by private complainant Palijo with Premiere Financing Corporation.  In his transactions with the corporation, private complainant dealtexclusively with one Rosemarie Lachenal, a trader connected with the corporation, and he never knew nor in any way dealt with petitioner Lina Lim Lao at any time before or during the issuance of the delivery of the checks.  (Palijo, T.S.N., 23 June 1987, pp. 28-29, 32-34; Lao, T.S.N., 15 May 1990, p. 6; Ocampo, T.S.N., p. 5)  Petitioner Lina Lim Lao was not in any way involved in the transaction which led to the issuance of the checks.

When the checks were co-signed by petitioner, they were signed in advance and in blank, delivered to the Head of Operations, Mr. Teodulo Asprec, who subsequently filled in the names of the payee, the amounts and the corresponding dates of maturity.  After Mr. Asprec signed the checks, they were delivered to private complainant Palijo.  (Lao, T.S.N., 28 September 1989, pp. 8-11, 17, 19; note also that the trial court in its decision fully accepted the testimony of petitioner [Decision of the Regional Trial Court, p. 12], and that the Court of Appeals affirmed said decision in toto)

Petitioner Lina Lim Lao was not in any way involved in the completion, and the subsequent delivery of the check to private complainant Palijo.

At the time petitioner signed the checks, she had no knowledge of the sufficiency or insufficiency of the funds of the corporate account. (Lao, T.S.N., 28 September 1989, p. 21)  It was not within her powers, duties or responsibilities to monitor and assess the balances against the issuance; much less was it within her (duties and responsibilities) to make sure that the checks were funded.  Premiere Financing Corporation had a Treasury Department headed by a Treasurer, Ms. Veronilyn Ocampo, which alone had access to information as to account balances and which alone was responsible for funding the issued checks.  (Ocampo, T.S.N., 19 July 1990, p. 4; Lao, T.S.N., 28 September 1990, p. 23)  All statements of account were sent to the Treasury Department located at the main office in Cubao, Quezon City.  Petitioner was holding office at the extension in Binondo Manila.  (Lao,

T.S.N., 28 September 1989, p. 24-25)  Petitioner Lina Lim Lao did not have knowledge of the insufficiency of the funds in the corporate account against which the checks were drawn.

When the checks were subsequently dishonored, private complainant sent a notice of said dishonor to Premier Financing Corporation at its head office in Cubao, Quezon City.  (Please refer to Exh. ‘E’; Palijo, T.S.N., 23 June 1987, p. 51)  Private complainant did not send notice of dishonor to petitioner.  (Palijo, T.S.N., 24 July 1987, p. 10)  He did not follow up his investment with petitioner.  (Id.) Private complainant never contacted, never informed, and never talked with, petitioner after the checks had bounced.  (Id., at p. 29)  Petitioner never had notice of the dishonor of the checks subject of the instant prosecution.

The Treasurer of Premiere Financing Corporation, Ms. Veronilyn Ocampo testified that it was the head office in Cubao, Quezon City, which received notice of dishonor of the bounced checks.  (Ocampo, T.S.N., 19 July 1990, pp. 7-8)  The dishonor of the check came in the wake of the assassination of the late Sen. Benigno Aquino, as a consequence of which event a majority of the corporation’s clients pre-terminated their investments.  A period of extreme illiquidity and financial distress followed, which ultimately led to the corporation’s being placed under receivership by the Securities and Exchange Commission.  (Ocampo, T.S.N., 16 August 1990, p. 8, 19; Lao, T.S.N., 28 September 1989, pp. 25-26; Please refer also to Exhibit ‘1’, the order of receivership issued by the Securities and Exchange Commission)  Despite the Treasury Department’s and (Ms. Ocampo’s) knowledge of the dishonor of the checks, however, the main office in Cubao, Quezon City never informed petitioner Lina Lim Lao or anybody in the Binondo office for that matter.  (Ocampo, T.S.N., 16 August 1990, pp. 9-10)  In her testimony, she justified her omission by saying that the checks were actually the responsibility of the main office (Ocampo, T.S.N., 19 July 1990, p. 6) and that, at that time of panic withdrawals and massive pre-termination of clients’ investments, it was futile to inform the Binondo office since the main office was strapped for cash and in deep financial distress.  (Id., at pp. 7-9)  Moreover, the confusion which came in the wake of the Aquino assassination and the consequent panic withdrawals caused them to lose direct communication with the Binondo office.  (Ocampo, T.S.N., 16 August 1990, p. 9-10)

As a result of the financial crisis and distress, the Securities and Exchange Commission placed Premier Financing Corporation under receivership, appointing a rehabilitation receiver for the purpose of settling claims against the corporation.  (Exh. ‘1’)  As he himself admits, private complainant filed a claim for the payment of the bounced check before and even after the corporation had been placed under receivership.  (Palijo, T.S.N., 24 July 1987, p. 10-17)  A check was prepared by the receiver in favor of the private complainant but the same was not claimed by him.  (Lao, T.S.N., 15 May 1990, p. 18)

Private complainant then filed the instant criminal action.  On 26 September 1990, the Regional Trial Court of Manila, Branch 33, rendered a decision convicting petitioner, and sentencing the latter to suffer the aggregate penalty of two (2) years and to pay a fine in the total amount of P300,000.00.  On appeal, the Court of Appeals affirmed said decision.  Hence, this petition for review.”[8]

The Issue

In the main, petitioner contends that the public respondent committed a reversible error in concluding that lack of actual knowledge of insufficiency of funds was not a defense in a prosecution for violation of B.P. 22.  Additionally, the petitioner argues that the notice of dishonor sent to the main office of the corporation, and not to petitioner herself who holds office in that corporation’s branch office, does not constitute the notice mandated in Section 2 of BP 22; thus, there can be no  prima facie presumption that she had knowledge of the insufficiency of funds.

The Court’s Ruling

The petition is meritorious.

Strict Interpretation of Penal Statutes

It is well-settled in this jurisdiction that penal statutes are strictly construed against the state and liberally for the accused,  so much so that the scope of a penal statute cannot be extended by good intention, implication, or even equity consideration.  Thus, for Petitioner Lina Lim Lao’s acts to be penalized under the Bouncing Checks Law or B.P. 22, “they must come clearly within both the spirit and the letter of the statute.”[9]

The salient portions of B.P. 22 read:

“SECTION 1.  Checks without sufficient funds. -- Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit or to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

SECTION 2.  Evidence of knowledge of insufficient funds. -- The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.”

This Court listed the elements of the offense penalized under B.P. 22, as follows:  “(1)  the making, drawing and issuance of any check to apply to 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 such check in full upon its presentment; and (3) 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.”[10]

Justice Luis B. Reyes, an eminent authority in criminal law, also enumerated the elements of the offense defined in the first paragraph of Section 1 of B.P. 22, thus:

“1. That a person makes or draws and issues any check.2.  That the check is made or drawn and issued to apply on account or for value.3.  That the person who makes or draws and issues the check knows at the time of issue that

he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment.

4.  That the check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.”[11]

Crux of the Petition

Petitioner raised as defense before the Court of Appeals her lack of actual knowledge of the insufficiency of funds at the time of the issuance of the checks, and lack of personal notice of dishonor to her.  The respondent appellate court, however, affirmed the RTC decision, reasoning that “the maker’s knowledge of the insufficiency of funds is legally presumed from the dishonor of his checks for insufficiency of funds.  (People vs. Laggui, 171 SCRA 305; Nieras vs. Hon. Auxencio C. Dacuycuy, 181 SCRA 1)”[12] The Court of Appeals also stated that “her alleged lack of knowledge or intent to issue a bum check would not exculpate her from any responsibility under B.P. Blg. 22, since the act of making and issuing a worthless check is a  malum prohibitum .”[13] In the words of the Solicitor General, “(s)uch alleged lack of knowledge is not material for petitioner’s liability under B.P.Blg. 22.”[14]

Lack of Actual Knowledge of Insufficiency of Funds

Knowledge of insufficiency of funds or credit in the drawee bank for the payment of a check upon its presentment is an essential element of the offense.[15] There is a prima faciepresumption of the existence of this element from the fact of drawing, issuing or making a check, the payment of which was subsequently refused for insufficiency of funds.  It is important to stress, however, that this is not a conclusive presumption that forecloses or precludes the presentation of evidence to the contrary.

In the present case, the fact alone that petitioner was a signatory to the checks that were subsequently dishonored merely engenders the prima facie presumption that she knew of the insufficiency of funds, but it does not render her automatically guilty under B.P. 22.   The prosecution has a duty to prove all the elements of the crime, including the acts that give rise to the  prima facie presumption; petitioner, on the other hand, has a right to rebut the prima facie presumption.[16] Therefore, if such knowledge of insufficiency of funds is proven to be actually absent or non-existent,  the accused should not be held liable for the offense defined under the first paragraph of Section 1 of B.P. 22.  Although the offense charged is amalum prohibitum, the prosecution is not thereby excused from its responsibility of proving beyond reasonable doubt all the elements of the offense, one of which is knowledge of the insufficiency of funds.

After a thorough review of the case at bar, the Court finds that Petitioner Lina Lim Lao did not have actual knowledge of the insufficiency of funds in the corporate accounts at the time she affixed her signature to the checks involved in this case, at the time the same were issued, and even at the time the checks were subsequently dishonored by the drawee bank.

The scope of petitioner’s duties and responsibilities did not encompass the funding of the corporation’s checks; her duties were limited to the marketing department of the Binondo branch.[17] Under the organizational structure of Premiere Financing Corporation,  funding of checks was the sole responsibility of the Treasury Department.  Veronilyn Ocampo, former Treasurer of Premiere,  testified thus:

“Q   Will you please tell us whose (sic) responsible for the funding of checks in Premiere?A     The one in charge is the Treasury Division up to the Treasury Disbursement and then

they give it directly to Jose Cabacan, President of Premiere.”[18]

Furthermore, the Regional Trial Court itself found that, since  Petitioner Lina Lim Lao was often out in the field taking charge of the marketing department of the Binondo branch, she signed the checks in blank as to name of the payee and the amount to be drawn, and without knowledge of the transaction for which they were issued.[19] As a matter of company practice, her signature was required in addition to that of  Teodulo Asprec, who alone placed the name of the payee and the amount to be drawn thereon.  This is clear from her testimony:

“q    x x x  Will you please or will you be able to tell us the condition of this check when you signed this or when you first saw this check?

Witnessa     I signed the check in blank.  There were no payee.  No amount, no date, sir.

q     Why did you sign this check in blank when there was no payee, no amount and no date?a     It is in order to facilitate the transaction, sir.x x x                                                                      x x

x                                                                             x x xCOURT

(to witness)q     Is that your practice?Witnessa     Procedure, Your Honor.COURT

That is quiet (sic) unusual.  That is why I am asking that last question if that is a practice of your office.

a     As a co-signer, I sign first, sir.q     So the check cannot be encashed without your signature, co-signature?a     Yes, sir.Atty. Gonzales

(to witness)q     Now, you said that you sign first, after you sign, who signs the check?a     Mr. Teodoro Asprec, sir.q     Is this Teodoro Asprec the same Teodoro Asprec, one of the accused in all these cases?a     Yes, sir.q     Now, in the distribution or issuance of checks which according to you, as a co-signee,

you sign.  Who determines to whom to issue or to whom to pay the check after Teodoro Asprec signs the check?

Witnessa     He is the one.Atty. Gonzalesq     Mr. Asprec is the one in-charge in  .  .  .  are you telling the Honorable Court that it was

Teodoro Asprec who determines to whom to issue the check?  Does he do that all the time?

Courtq     Does he all the time?

(to witness)a     Yes, Your Honor.q     So the check can be negotiated?  So, the check can be good only upon his

signing?  Without his signing or signature the check cannot be good?a     Yes, Your Honor.Atty. Gonzales

(to witness)

q     You made reference to a transaction which according to you, you signed this check in order to facilitate the transaction  .  .  .  I withdraw that question.  I will reform.

COURT(for clarification to witness)Witness may answer.

q     Only to facilitate your business transaction, so you signed the other checks?Witnessa     Yes, Your Honor.q     So that when ever there is a transaction all is needed  .  .  .  all that is needed is for the

other co-signee to sign?a     Yes, Your Honor.COURT

(To counsel)Proceed.

Atty. Gonzales(to witness)

q     Why is it necessary for you to sign?a     Because most of the time I am out in the field in the afternoon, so, in order to facilitate

the transaction I sign so if I am not around they can issue the check.”[20]

Petitioner did not have any knowledge either of the identity of the payee or the transaction which gave rise to the issuance of the checks.  It was her co-signatory, Teodulo Asprec, who alone filled in the blanks, completed  and issued the checks.  That Petitioner Lina Lim Lao did not have any knowledge or connection with the checks’ payee, Artelijo Palijo, is clearly evident even from the latter’s testimony, viz.:

“ATTY. GONZALES:Q    When  did you come to know the accused Lina Lim Lao?A     I cannot remember the exact date because in their office Binondo, --COURT:  (before witness could finish)Q    More or less?A     It must have been late 1983.ATTY. GONZALES:Q    And that must or that was after the transactions involving alleged checks marked in

evidence as Exhibits B and C?A     After the transactions.Q    And that was also before the transaction involving that confirmation of sale marked in

evidence as Exhibit A?A     It was also.Q    And so you came to know the accused Lina Lim Lao when all those transactions were

already consummated?A     Yes, sir.

Q    And there has never been any occasion where you transacted with accused Lina Lim Lao, is that correct?

A     None, sir, there was no occasion.Q    And your coming to know Lina Lim Lao the accused in these cases was by chance when

you happened to drop by in the office at Binondo of the Premier Finance Corporation, is that what you mean?

A     Yes, sir.Q    You indicated to the Court that you were introduced to the accused Lina Lim Lao, is that

correct?A     I was introduced.x x x                                                                      x x

x                                                                             x x xQ    After that plain introduction there was nothing which transpired between you and the

accused Lina Lim Lao?A     There was none.”[21]

Since Petitioner Lina Lim Lao signed the checks without knowledge of the insufficiency of funds, knowledge she was not expected or obliged to possess under the organizational structure of the corporation, she may not be held liable under B.P. 22.  For in the final analysis, penal statutes such as B.P. 22 “must be construed with such strictness as to carefully safeguard the rights of the defendant  x x x.”[22] The element of knowledge of insufficiency of funds having been proven to be absent, petitioner is therefore entitled to an acquittal.

This position finds support in Dingle vs. Intermediate Appellate Court[23] where we stressed that knowledge of insufficiency of funds at the time of the issuance of the check was an essential requisite for the offense penalized under B.P. 22.  In that case, the spouses Paz and Nestor Dingle owned a family business known as “PMD Enterprises.”  Nestor transacted the sale of 400 tons of silica sand to the buyer Ernesto Ang who paid for the same.  Nestor failed to deliver.  Thus, he issued to Ernesto two checks, signed by him and his wife as authorized signatories for PMD Enterprises, to represent the value of the undelivered silica sand.  These checks were dishonored for having been “drawn against insufficient funds.”  Nestor thereafter issued to Ernesto another check, signed by him and his wife Paz, which was likewise subsequently dishonored.  No payment was ever made; hence, the spouses were charged with a violation of B.P. 22 before the trial court which found them both guilty.   Paz appealed the judgment to the then Intermediate Appellate Court which modified the same by reducing the penalty of imprisonment to thirty days.  Not satisfied, Paz filed an appeal to this Court “insisting on her innocence” and “contending that she did not incur any criminal liability under B.P. 22 because she had no knowledge of the dishonor of the checks issued by her husband and, for that matter, even the transaction of her husband with Ang.”  The Court ruled in Dingle as follows:

“The Solicitor General in his Memorandum recommended that petitioner be acquitted of the instant charge because from the testimony of the sole prosecution witness Ernesto Ang, it was established that he dealt exclusively with Nestor Dingle.  Nowhere in his testimony is the name of Paz Dingle ever mentioned in connection with the transaction and with the issuance of the check.  In fact, Ang categorically stated that it was Nestor Dingle who received his two (2) letters of demand.  This lends credence to the testimony of Paz Dingle that she signed the questioned checks in blank together with her husband without any knowledge of its issuance, much less of the transaction and the fact of dishonor.

In the case of Florentino Lozano vs. Hon. Martinez, promulgated December 18, 1986, it was held that an essential element of the offense is knowledge on the part of the maker or drawer of the check of the insufficiency of his funds.

WHEREFORE, on reasonable doubt, the assailed decision of the Intermediate Appellate Court (now the Court of Appeals) is hereby SET ASIDE and a new one is hereby rendered ACQUITTING petitioner on reasonable doubt."[24]

In rejecting the defense of herein petitioner and ruling that knowledge of the insufficiency of funds is legally presumed from the dishonor of the checks for insufficiency of funds,  Respondent Court of Appeals cited People vs. Laggui[25] and Nierras vs. Dacuycuy.[26] These, however, are inapplicable here.  The accused in both cases issued personal -- not corporate -- checks and did not aver lack of knowledge of insufficiency of funds or absence of personal notice of the check’s dishonor.  Furthermore,  in People vs. Laggui[27] the Court ruled mainly on the adequacy of an information which alleged lack of knowledge of insufficiency of funds at the time the check was issued and not at the time of its presentment. On the other hand, the Court in Nierras vs. Dacuycuy[28] held mainly that an accused may be charged under B.P. 22 and Article 315 of the Revised Penal Code for the same act of issuing a bouncing check.

The statement in the two cases -- that  mere issuance of a dishonored check gives rise to the presumption of knowledge on the part of the drawer that he issued the same without funds -- does not support the CA Decision.  As observed earlier,  there is here only a prima facie presumption which does not preclude the presentation of contrary evidence.  On the contrary, People vs. Laggui clearly spells out as an element of the offense the fact that the drawer must have knowledge of the insufficiency of  funds in, or of credit with, the drawee bank for the payment of the same in full on presentment;  hence, it even supports the petitioner’s position.

Lack of Adequate Notice of Dishonor

There is another equally cogent reason for the acquittal of the accused.  There can be no prima facie evidence of knowledge of insufficiency of funds in the instant case because no notice of dishonor was actually sent to or received by the petitioner.

The notice of dishonor may be sent by the offended party or the drawee bank.  The trial court itself found absent a personal notice of dishonor to Petitioner Lina Lim Lao by the drawee bank based on the unrebutted testimony of Ocampo “(t)hat the checks bounced when presented with the drawee bank but she did not inform anymore the Binondo branch and Lina Lim Lao as there was no need to inform them as the corporation was in distress.”[29] The Court of Appeals affirmed this factual finding.  Pursuant to prevailing jurisprudence, this finding is binding on this Court.[30]

Indeed, this factual matter is borne by the records.  The records show that the notice of dishonor was addressed to Premiere Financing Corporation and sent to its main office in Cubao, Quezon City.  Furthermore,  the same had not been transmitted to Premiere’s Binondo Office where petitioner had been holding office.

Likewise no notice of dishonor from the offended party was actually sent to or received by Petitioner Lao.  Her testimony on this point is as follows:

“Atty. Gonzalesq     Will you please tell us if Father Artelejo Palejo (sic) ever notified you of the bouncing of

the check or the two (2) checks marked as Exhibit ‘B’ or ‘C’ for the prosecution?Witnessa     No, sir.q     What do you mean no, sir?a     I was never given a notice.  I was never given notice from Father Palejo (sic).COURT

(to witness)q     Notice of what?a     Of the bouncing check, Your Honor.”[31]

Because no notice of dishonor was actually sent to and received by the petitioner, the prima facie presumption that she knew about the insufficiency of funds cannot apply. Section 2 of B.P. 22

clearly provides that this presumption arises not from the mere fact of drawing, making and issuing a bum check;  there must also be a showing that, within five banking days from receipt of the notice of dishonor,  such maker or drawer failed to pay the holder of the check the amount due thereon or  to make arrangement for its payment in full by the drawee of such check.

It has been observed that the State, under this statute, actually offers the violator “a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated.”  This was also compared “to certain laws[32] allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability.”[33] In this light, the full payment of the amount appearing in the check within five banking days from notice of dishonor is a “complete defense.” [34] The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner.  Petitioner has a right to demand -- and the basic postulates of fairness require -- that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under B.P. 22.

In this light, the postulate of Respondent Court of Appeals that “(d)emand on the Corporation constitutes demand on appellant (herein petitioner),”[35] is erroneous.  Premiere has no obligation to forward the notice addressed to it to the employee concerned, especially because the corporation itself incurs no criminal liability under B.P. 22 for the issuance of a bouncing check.  Responsibility under B.P. 22 is personal to the accused; hence, personal knowledge of the notice of dishonor is necessary.  Consequently, constructive notice to the corporation is not enough to satisfy due process.  Moreover, it is petitioner, as an officer of the corporation, who is the latter’s agent for purposes of receiving notices and other documents, and not the other way around.  It is but axiomatic that notice to the corporation, which has a personality distinct and separate from the petitioner, does not constitute notice to the latter.

Epilogue

In granting this appeal, the Court is not unaware of B.P. 22’s intent to inculcate public respect for and trust in checks which, although not legal tender, are deemed convenient substitutes for currency.  B.P. 22 was intended by the legislature to enhance commercial and financial transactions in the Philippines by penalizing makers and issuers of worthless checks.  The public interest behind B.P. 22 is thus clearly palpable from its intended purpose.[36]

At the same time, this Court deeply cherishes and is in fact bound by duty to protect our people’s constitutional rights to due process and to be presumed innocent until the contrary is proven. [37] These rights must be read into any interpretation and application of B.P. 22.  Verily, the public policy to uphold civil liberties embodied in the Bill of Rights necessarily outweighs the public policy to build confidence in the issuance of checks.  The first is a basic human right while the second is only proprietary in nature.[38] Important to remember also is B.P. 22’s requirements that the check issuer must know “at the time of issue that he does not have sufficient funds in or credit with the drawee bank” and that he must receive “notice that such check has not been paid by the drawee.”  Hence, B.P. 22 must not be applied in a manner which contravenes an accused’s constitutional and statutory rights.

There is also a social justice dimension in this case.  Lina Lim Lao is only a minor employee who had nothing to do with the issuance, funding and delivery of checks.  Why she was required by her employer to countersign checks escapes us.  Her signature is completely unnecessary for it serves no fathomable purpose at all in protecting the employer from unauthorized disbursements.  Because of the pendency of this case, Lina Lim Lao stood in jeopardy -- for over a decade -- of losing her liberty and suffering the wrenching pain and loneliness of imprisonment, not to mention the stigma of prosecution on her career and family life as a young mother, as well as the expenses, effort and aches in defending her innocence.  Upon the other hand, the senior official -- Teodulo Asprec -- who appears responsible for the issuance, funding and delivery of the worthless checks has escaped criminal prosecution simply because he could not be located by the authorities.  The case against him has been archived while the awesome prosecutory might of the government and the knuckled ire of the private complainant were all focused on poor petitioner.  Thus, this Court exhorts the prosecutors and the police authorities concerned to exert their best to arrest and prosecute Asprec so that justice in its

pristine essence can be achieved in all fairness to the complainant, Fr. Artelijo Palijo, and the People of the Philippines.  By this Decision, the Court enjoins the Secretary of Justice and the Secretary of Interior and Local Government to see that essential justice is done and the real culprit(s) duly-prosecuted and punished.

WHEREFORE, the questioned Decision of the Court of Appeals affirming that of the Regional Trial Court, is hereby REVERSED and SET ASIDE.  Petitioner Lina Lim Lao isACQUITTED.  The Clerk of Court is hereby ORDERED to furnish the Secretary of Justice and the Secretary of Interior and Local Government with copies of this Decision.  No costs.

SO ORDERED.Narvasa, C.J., (Chairman), Davide, Jr., and Melo, JJ., concur.Francisco, J., on leave.

[1] Rollo, pp. 43-48.[2] Eighth Division, composed of J. Consuelo Ynares-Santiago, ponente, and JJ. Emeterio C. Cui,

Chairman, and Conchita Carpio Morales.[3] Record, pp. 29-30.  The RTC decision was penned by Judged Rodolfo G. Palattao.[4] Rollo, pp. 44-45.[5] Assistant Fiscal Domingo A. Mendoza resolved on reinvestigation to dismiss the case insofar as Lina

Lim Lao is concerned after finding no sufficient evidence to sustain the charges against her.  However, an Order dated 28 January 1986 from the then Ministry of Justice reversed the resolution of Fiscal Mendoza and directed him to withdraw the motion to dismiss he filed and to proceed with the prosecution of the case on the basis of the informations filed in Criminal Case Nos. 84-26967 to 84-26969.  See Private Respondent’s Memorandum, pp. 1-6; Rollo, pp. 138-143.

[6] Record of the Regional Trial Court, page 1 of folders 1, 2, and 3.[7] Ibid., p.45.[8] Petition for Review, pp. 4-7; Rollo, pp. 13-16. TSN citations in the original.[9] Agpalo, Ruben E., Statutory Construction, p. 208, (1990). Citations omitted.[10] Navarro vs. Court of Appeals, 234 SCRA 639, 643-644, August 2, 1994; citing People vs. Laggui, 171

SCRA 305, March 16, 1989.[11] Reyes, Luis B., The Revised Penal Code, Criminal Law, Book Two, p. 700, (1993).[12] Rollo, p. 46.[13] Ibid.[14] Comment of Public Respondent, p. 4; Rollo, p. 62.[15] Reyes, supra.  See also Nitafan, David G., Notes and Comments on the Bouncing Checks Law (B.P.

Blg. 22), p. 62, (1995); Antonio Nieva vs. Court of Appeals, G.R. Nos. 95796-97, May 2, 1997.[16] See, Ricardo Llamado vs. Court of Appeals, G.R. No. 99032, March 26, 1997, in which the Court

acknowledged that the prima facie presumption under B.P. 22 may be rebutted.[17] Ibid., pp. 5-6, September 28, 1989.[18] Ibid., pp.3-4, July 19, 1990.[19] Decision of the Regional Trial Court, p. 12; Record of the Court of Appeals, p. 66.[20] TSN, pp. 7-11, September 28, 1989.

[21] Ibid., pp. 29-33, June 23, 1987.[22] Alfredo L. Azarcon vs. Sandiganbayan, People of the Philippines and Jose C. Batausa, G.R. No.

116033, p. 19, February 26, 1997.[23] 148 SCRA 595, March 16, 1987.[24] Ibid., pp. 596-597.[25] Supra, footnote no. 10.[26] 181 SCRA 1, January 11, 1990.[27] Supra.[28] Supra.[29] Decision of the Regional Trial Court, p. 10; records, p. 160.[30] Maximino Fuentes vs. Hon. Court of Appeals, G.R. No. 109849, p. 9, February 26, 1997; citing Juan

Castillo, et al. vs. Court of Appeals, et al., G.R. No. 106472, p. 9, August 7, 1996.[31] TSN, pp. 25-26, September 28, 1989.[32] See,  e.g., E.O. 107, 83 O.G. No. 7, p. 576 (February 16, 1987), and E.O. 122, 89 O.G. No. 44, p.

6349 (November 1, 1993).[33] Nitafan,  supra, pp. 121-122.[34] Navarro vs. Court of Appeals, supra.[35] Rollo, p. 46.[36] See Lozano vs. Martinez, 146 SCRA 323, 339-341, December 18, 1996.[37] Sections 1 and 14, Article III, Constitution.[38] See also Philippine Blooming Mills Employees Organization vs. Philippine Blooming Mills Co., Inc., 51

SCRA 189, June 5, 1973.EN BANC

[G.R. No. 103501-03.  February 17, 1997]

LUIS A. TABUENA, petitioner, vs. HONORABLE SANDIGANBAYAN, and THE PEOPLE OF THE PHILIPPINES, respondents.

[G.R. No. 103507.  February 17, 1997]

ADOLFO M. PERALTA, petitioner, vs. HON. SANDIGANBAYAN (First Division), and THE PEOPLE OF THE PHILIPPINES, represented by the OFFICE OF THE SPECIAL PROSECUTOR, respondents.

D E C I S I O NFRANCISCO, J.:

Through their separate petitions for review,[1] Luis A. Tabuena and Adolfo M. Peralta (Tabuena and Peralta, for short) appeal the Sandiganbayan decision dated October 12, 1990,[2] as well as the Resolution dated December 20, 1991[3] denying reconsideration, convicting them of malversation under Article 217 of the Revised Penal Code.  Tabuena and Peralta were found guilty beyond reasonable doubt of having malversed the total amount of P55 Million of the Manila International Airport Authority (MIAA) funds during their incumbency as General Manager and Acting Finance Services Manager, respectively, of MIAA, and were thus meted the following sentence:

“(1)     In Criminal Case No. 11758, accused Luis A. Tabuena is sentenced to suffer the penalty of imprisonment of seventeen (17) years and one (1) day of reclusion temporal as minimum to twenty (20) years of reclusion temporal as maximum, and to pay a fine of TWENTY-FIVE MILLION PESOS (P25,000,000.00), the amount malversed.  He shall also reimburse the Manila International Airport Authority the sum of TWENTY-FIVE MILLION PESOS (P25,000,000.00).

In addition, he shall suffer the penalty of perpetual special disqualification from public office.

“(2)     In Criminal Case No. 11759, accused Luis A. Tabuena is sentenced to suffer the penalty of imprisonment of seventeen (17) years and one (1) day of reclusion temporal as minimum, and twenty (20) years of reclusion temporal as maximum, and to pay a fine of TWENTY-FIVE MILLION PESOS (P25,000,000.00), the amount malversed.  He shall also reimburse the Manila International Airport Authority the sum of TWENTY-FIVE MILLION PESOS (P25,000,000.00).

In addition, he shall suffer the penalty of perpetual special disqualification from public office.

“(3)    In Criminal Case No. 11760, accused Luis A. Tabuena and Adolfo M. Peralta are each sentenced to suffer the penalty of imprisonment of seventeen (17) years and one (1) day of reclusion temporalas minimum and twenty (20) years of reclusion temporal as maximum and for each of them to pay separately a fine of FIVE MILLION PESOS (P5,000,000.00) the amount malversed.  They shall also reimburse jointly and severally the Manila International Airport Authority the sum of FIVE MILLION PESOS (P5,000,000.00).

In addition, they shall both suffer the penalty of perpetual special disqualification from public office.”

A co-accused of Tabuena and Peralta was Gerardo G. Dabao, then Assistant General Manager of MIAA, has remained at large.

There were three (3) criminal cases filed (nos. 11758, 11759 and 11760) since the total amount of P55 Million was taken on three (3) separate dates of January, 1986. Tabuena appears as the principal accused - he being charged in all three (3) cases.  The amended informations in criminal case nos. 11758, 11759 and 11760 respectively read:

“That on or about the 10th day of January, 1986, and for sometime subsequent thereto, in the City of Pasay, Philippines, and within the jurisdiction of this Honorable Court, accused Luis A. Tabuena and Gerardo G. Dabao, both public officers, being then the General Manager and Assistant General Manager, respectively, of the Manila International Airport Authority (MIAA), and accountable for public funds belonging to the MIAA, they being the only ones authorized to make withdrawals against the cash accounts of MIAA pursuant to its board resolutions, conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriate the amount of TWENTY FIVE MILLION PESOS (P25,000,000.00) from MIAA funds by applying for the issuance of a manager’s check for said amount in the name of accused Luis A. Tabuena chargeable against MIAA’s Savings Account No. 274-500-354-3 in the PNB Extension Office at the Manila International Airport in Pasay City, purportedly as partial payment to the Philippine National Construction Corporation (PNCC), the mechanics of which said accused Tabuena would personally take care of, when both accused well knew that there was no outstanding obligation of MIAA in favor of PNCC, and after the issuance of the above-mentioned manager’s check, accused Luis A. Tabuena encashed the same and thereafter both accused misappropriated and converted the proceeds thereof to their personal use and benefit, to the damage and prejudice of the government in the aforesaid amount.

CONTRARY TO LAW.”

x x x

“That on or about the 16th day of January, 1986, and for sometime subsequent thereto, in the City of Pasay, Philippines and within the jurisdiction of this Honorable Court, accused Luis A. Tabuena and Gerardo G. Dabao, both public officers, being then the General Manager and Assistant General Manager, respectively, of the Manila International Airport Authority (MIAA), and accountable for public funds belonging to the MIAA, they being the only ones authorized to make withdrawals against the cash accounts of MIAA pursuant to its board resolutions, conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriate the amount of TWENTY FIVE MILLION PESOS (P25,000,000.00) from MIAA funds by applying for the issuance of a manager’s check for said amount in the name of accused Luis A. Tabuena chargeable against MIAA’s Savings Account No. 274-500-354-3 in the PNB Extension Office at the Manila International Airport in Pasay City, purportedly as partial payment to the Philippine National Construction Corporation (PNCC), the mechanics of which said accused Tabuena would personally take care of, when both accused well knew that there was no outstanding obligation of MIAA in favor of PNCC, and after the issuance of the above-mentioned manager’s check, accused Luis A. Tabuena encashed the same and thereafter both accused misappropriated and converted the proceeds thereof to their personal use and benefit, to the damage and prejudice of the government in the aforesaid amount.

CONTRARY TO LAW.”

x x x

“That on or about the 29th day of January, 1986, and for sometime subsequent thereto, in the City of Pasay, Philippines, and within the jurisdiction of this Honorable Court, accused Luis A. Tabuena and Adolfo M. Peralta, both public officers, being then the General Manager and Acting Manager, Financial Services Department, respectively, of the Manila International Airport Authority (MIAA), and accountable for public funds belonging to the MIAA, they being the only ones authorized to make withdrawals against the cash accounts of MIAA pursuant to its board resolutions, conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriate the amount of FIVE MILLION PESOS (P5,000,000.00) from MIAA funds by applying for the issuance of a manager’s check for said amount in the name of accused Luis A. Tabuena chargeable against MIAA’s Savings Account No. 274-500-354-3 in the PNB Extension Office at the Manila International Airport in Pasay City, purportedly as partial payment to the Philippine National Construction Corporation (PNCC), the mechanics of which said accused Tabuena would personally take care of, when both accused well knew that there was no outstanding obligation of MIAA in favor of PNCC, and after the issuance of the above-mentioned manager’s check, accused Luis A. Tabuena encashed the same and thereafter both accused misappropriated and converted the proceeds thereof to their personal use and benefit, to the damage and prejudice of the government in the aforesaid amount.

CONTRARY TO LAW.”

Gathered from the documentary and testimonial evidence are the following essential antecedents:

Then President Marcos instructed Tabuena over the phone to pay directly to the president’s office and in cash what the MIAA owes the Philippine National Construction Corporation (PNCC), to which Tabuena replied, “Yes, sir, I will do it.”  About a week later, Tabuena received from Mrs. Fe Roa-Gimenez, then private secretary of Marcos, a Presidential Memorandum dated January 8, 1986 (hereinafter referred to as MARCOS Memorandum) reiterating in black and white such verbal instruction, to wit:

“Office of the President

of the Philippines

Malacañang

January 8, 1986

MEMO TO:  The General Manager

Manila International Airport Authority

You are hereby directed to pay immediately the Philippine National Construction Corporation, thru this Office, the sum of FIFTY FIVE MILLION (P55,000,000.00) PESOS in cash as partial payment of MIAA’s account with said Company mentioned in a Memorandum of Minister Roberto Ongpin to this Office dated January 7, 1985 and duly approved by this Office on February 4, 1985.

Your immediate compliance is appreciated.

                                                       (Sgd.)  FERDINAND MARCOS.”[4]

The January 7, 1985 memorandum of then Minister of Trade and Industry Roberto Ongpin referred to in the MARCOS Memorandum, reads in full:

“MEMORANDUM

F o r   :   The President

F r o m            :   Minister Roberto V. Ongpin

D a t e             :   7 January 1985

Subject           :   Approval   of    Supplemental   Contracts   and

Request for Partial Deferment of Repayment of PNCC’s Advances for MIA Development Project

May I request your approval of the attached recommendations of Minister Jesus S. Hipolito for eight (8) supplemental contracts pertaining to the MIA Development Project (MIADP) between the Bureau of Air Transport (BAT) and Philippine National Construction Corporation (PNCC), formerly CDCP, as follows:

1.    Supplemental Contract No. 12                 Package Contract No. 2

 P11,106,600.95

2.    Supplemental Contract No. 13 5,758,961.523.   Supplemental Contract No. 14               Package Contract No. 2

 4,586,610.80

4.   Supplemental Contract No. 15 1,699,862.695.   Supplemental Contract No. 16               Package Contract No. 2

 233,561.22

6.   Supplemental Contract No. 17              Package Contract No. 2

 8,821,731.08

7.   Supplemental Contract No. 18             Package Contract No. 2

  6,110,115.75

8.   Supplemental Contract No. 3             Package Contract No. II

  16,617,655.49

(xerox copies only; original memo was submitted to the Office of the President on May 28, 1984)

In this connection, please be informed that Philippine National Construction Corporation (PNCC), formerly CDCP, has accomplishment billings on the MIA Development Project aggregating P98.4 million, inclusive of accomplishments for the aforecited contracts.  In accordance with contract provisions, outstanding advances totalling P93.9 million are to be deducted from said billings which will leave a net amount due to PNCC of only P4.5 million.

At the same time, PNCC has potential escalation claims amounting to P99 million in the following stages of approval/evaluation:

Approved by Price Escalation Committee (PEC) but pended for lack of funds

P   1.9 million

Endorsed by project consultants and currently being evaluated by PEC

 30.7 million

Submitted by PNCC directly to PEC and currently under evaluation

66.5 million

T o t a l P 99.1 million

There has been no funding allocation for any of the above escalation claims due to budgetary constraints.

The MIA Project has been completed and operational as far back as 1982 and yet residual amounts due to PNCC have not been paid, resulting in undue burden to PNCC due to additional cost of money to service its obligations for this contract.

To allow PNCC to collect partially its billings, and in consideration of its pending escalation billings, may we request for His Excellency’s approval for a deferment of  the repayment of PNCC’s advances to the extent of P30 million corresponding to about 30% of P99.1 million in escalation claims of PNCC, of which P32.5 million has been officially recognized by MIADP consultants but could not be paid due to lack of funding.Korte

Our proposal will allow BAT to pay PNCC the amount of P34.5 million out of existing MIA Project funds.  This amount represents the excess of the gross billings of PNCC of P98.4 million over the undeferred portion of the repayment of advances of P63.9 million.

(Sgd.)  ROBERTO V. ONGPIN

Minister”[5]

In obedience to President Marcos’ verbal instruction and memorandum, Tabuena, with the help of Dabao and Peralta, caused the release of P55 Million of MIAA funds by means of three (3) withdrawals.

The first withdrawal was made on January 10, 1986 for P25 Million, following a letter of even date signed by Tabuena and Dabao requesting the PNB extension office at the MIAA - the depository branch of MIAA funds, to issue a manager’s check for said amount payable to Tabuena.   The check was encashed, however, at the PNB Villamor Branch.  Dabao and the cashier of the PNB Villamor branch counted the money after which, Tabuena took delivery thereof.  The P25 Million in cash were then placed in peerless boxes and duffle bags, loaded on a PNB armored car and delivered on the same day to the office of Mrs. Gimenez located at Aguado Street fronting Malacañang.  Mrs. Gimenez did not issue any receipt for the money received.

Similar circumstances surrounded the second withdrawal/encashment and delivery of another P25 Million, made on January 16, 1986.

The third and last withdrawal was made on January 31, 1986 for P5 Million.  Peralta was Tabuena’s co-signatory to the letter- request for a manager’s check for this amount. Peralta accompanied Tabuena to the PNB Villamor branch as Tabuena requested him to do the counting of the P5 Million.  After the counting, the money was placed in two (2) peerless boxes which were loaded in the trunk of Tabuena’s car.  Peralta did not go with Tabuena  to deliver the money to Mrs. Gimenez’ office at Aguado Street.  It was only upon delivery of the P5 Million that Mrs. Gimenez issued a receipt for all the amounts she received from Tabuena.  The receipt, dated January 30, 1986, reads:

“Malacañang

Manila

January 30, 1986

RECEIVED FROM LOUIE TABUENA THE TOTAL AMOUNT OF FIFTY FIVE MILLION PESOS (P55,000,000.00) as of the following dates:

Jan. 10  -  P25,000,000.00

Jan. 16  -    25,000,000.00

Jan. 30  -      5,000,000.00

(Sgd.)  Fe Roa-Gimenez”

The disbursement of the P55 Million was, as described by Tabuena and Peralta themselves, “out of the ordinary” and “not based on the normal procedure”.  Not only were there no vouchers prepared to support the disbursement, the P55 Million was paid in cold cash.  Also, no PNCC receipt for the P55 Million was presented.  Defense witness Francis Monera, then Senior Assistant Vice President and Corporate Comptroller of PNCC, even affirmed in court that there were no payments made to PNCC by MIAA for the months of January to June of 1986.

The position of the prosecution was that there were no outstanding obligations in favor of PNCC at the time of the disbursement of the P55 Million.  On the other hand, the defense of Tabuena and Peralta, in short, was that they acted in good faith.  Tabuena claimed that he was merely complying with the MARCOS Memorandum which ordered him to forward immediately to the Office of the President P55 Million in cash as partial payment of MIAA’s obligations to PNCC, and that he (Tabuena) was of the belief that MIAA indeed had liabilities to PNCC.  Peralta for his part shared the same belief and so he heeded the request of Tabuena, his superior, for him (Peralta) to help in the release of P5 Million.

With the rejection by the Sandiganbayan of their claim of good faith which ultimately led to their conviction, Tabuena and Peralta now set forth a total of ten (10) errors [6] committed by the Sandiganbayan for this Court’s consideration.  It appears, however, that at the core of their plea that we acquit them are the following:

1)  the Sandiganbayan convicted them of a crime not charged in the amended informations, and

2)  they acted in good faith.

Anent the first proposition, Tabuena and Peralta stress that they were being charged with intentional malversation, as the amended informations commonly allege that:

“x x x accused x x x conspiring, confederating and confabulating with each other, did then and there wilfully, unlawfully, feloniously, and with intent to defraud the government, take and misappropriated the amount of x x x.”

But it would appear that they were convicted of malversation by negligence.  In this connection, the Court’s attention is directed to p. 17 of the December 20, 1991 Resolution (denying Tabuena’s and Peralta’s motion for reconsideration) wherein the Sandiganbayan said:

“x x x                                x x x                                   x x x

On the contrary, what the evidence shows is that accused Tabuena delivered the P55 Million to people who were not entitled thereto, either as representatives of MIAA or of the PNCC.Sclaw

It proves that Tabuena had deliberately consented or permitted through negligence or abandonment, some other person to take such public funds.  Having done so, Tabuena, by his own narration, has categorically demonstrated that he is guilty of the misappropriation or malversation of P55 Million of public funds.” (Underscoring supplied.)

To support their theory  that such variance is a reversible flaw, Tabuena and Peralta argue that:

1)  While malversation may be committed intentionally or by negligence, both modes cannot be committed at the same time.

2)  The Sandiganbayan was without jurisdiction to convict them of malversation of negligence where the amended informations charged them with intentional malversation.[7]

3)  Their conviction of a crime different from that charged violated their constitutional right to be informed of the accusation.[8]

We do not agree with Tabuena and Peralta on this point.  Illuminative and controlling is “Cabello v. Sandiganbayan”[9] where the Court passed upon similar protestations raised by therein accused-petitioner Cabello whose conviction for the same crime of malversation was affirmed, in this wise:

“x x x even on the putative assumption that the evidence against petitioner yielded a case of malversation by negligence but the information was for intentional malversation, under the circumstances of this case his conviction under the first mode of misappropriation would still be in order.  Malversation is committed either intentionally or by negligence.  The dolo or the culpa present in the offense is only a modality in the perpetration of the felony.  Even if the mode charged differs from the mode proved, the same offense of malversation is involved and conviction thereof is proper. x x x.

In Samson vs. Court of Appeals, et. al.,  we held that an accused charged with willful or intentional falsification can validly be convicted of falsification through negligence, thus:

‘While a criminal negligent act is not a simple modality of  a willful crime, as we held in Quizon vs. Justice of the Peace of Bacolor, G.R. No. L-6641, July 28, 1995, but a distinct crime in our Penal Code, designated as a quasi offense in our Penal Code, it may however be said that a conviction for the former can be had under an information exclusively charging the commission of a willful offense, upon the theory that the greater includes the lesser offense.  This is the situation that obtains in the present case.  Appellant was charged with willful falsification but from the evidence submitted by the parties, the Court of Appeals found that in effecting the falsification which made possible the cashing of the checks in question, appellant did not act with criminal intent but merely failed to take proper and adequate means to assure himself of the identity of the real claimants as an ordinary prudent man would do.  In other words, the information alleges acts which charge willful falsification but which turned out to be not willful but negligent.  This is a case covered by the rule when there is a variance between the allegation and proof, and is similar to some of the cases decided by this Tribunal.

x x x

‘Moreover, Section 5, Rule 116, of the Rules of Court does not require that all the essential elements of the offense charged in the information be proved, it being sufficient that some of said essential elements or ingredients thereof be established to constitute the crime proved. x x x.

‘The fact that the information does not allege that the falsification was committed with imprudence is of no moment for here this deficiency appears supplied by the evidence submitted by appellant himself and the result  has  proven  beneficial  to  him.   Certainly,  having  alleged  that the falsification has been willful, it would be incongruous to allege at the same time that it was committed with imprudence for a charge of criminal intent is incompatible with the concept of negligence.’

“Subsequently, we ruled in People vs. Consigna, et. al., that the aforestated rationale and arguments also apply to the felony of malversation, that is, that an accused charged with willful malversation, in an information containing allegations similar to those involved in the present case, can be validly convicted of the same offense of malversation through negligence where the evidence sustains the latter mode of perpetrating the offense.”

Going now to the defense of good faith,  it is settled that this is a valid defense in a prosecution for malversation for it would negate criminal intent on the part of the accused. Thus, in the two (2) vintage, but significant malversation cases of “US v. Catolico”[10] and “US v. Elviña,”[11] the Court stressed that:

“To constitute a crime, the act must, except in certain crimes made such by statute, be accompanied by a criminal intent, or by such negligence or indifference to duty or to consequences as, in law, is equivalent to criminal intent.  The maxim is actus non facit reum, nisi mens  sit rea - a crime is not committed if the mind of the person performing the act complained of is innocent.”

The rule was reiterated in “People v. Pacana,”[12] although this case involved falsification of public documents and estafa:

“Ordinarily, evil intent must unite with an unlawful act for there to be a crime.  Actus non facit reum, nisi mens sit rea.  There can be no crime when the criminal mind is wanting.”

American jurisprudence echoes the same principle.  It adheres to the view that criminal intent in embezzlement is not based on technical mistakes as to the legal effect of a transaction honestly entered into, and there can be no embezzlement if the mind of the person doing the act is innocent or if there is no wrongful purpose.[13] The accused may thus always introduce evidence to show he acted in good faith and that he had no intention to convert.[14] And this, to our mind, Tabuena and Peralta had meritoriously shown.

In so far as Tabuena is concerned, with the due presentation in evidence of the MARCOS Memorandum, we are swayed to give credit to his claim of having caused the disbursement of the  P55 Million solely by reason of such memorandum.  From this premise flows the following reasons and/or considerations that would buttress his innocence of the crime of malversation.

First.  Tabuena had no other choice but to make the withdrawals, for that was what the MARCOS Memorandum required him to do.  He could not be faulted if he had to obey and strictly comply with the presidential directive, and to argue otherwise is something easier said than done.  Marcos was undeniably Tabuena’s superior – the former being then the President of the Republic who unquestionably exercised control over government agencies such as the MIAA and PNCC. [15] In other words, Marcos had a say in matters involving inter-government agency affairs and transactions, such as for instance, directing payment of liability of one entity to another and the manner in which it should be carried out.  And as a recipient of such kind of a directive coming from the highest official of the land no less, good faith should be read on Tabuena’s compliance, without hesitation nor any question, with the MARCOS Memorandum.  Tabuena therefore is entitled to the justifying circumstance of  “Any person who acts in obedience to an order issued by a superior for some lawful purpose.”[16] The subordinate-superior relationship between Tabuena and Marcos is clear.  And so too, is the lawfulness of the  order contained in the MARCOS Memorandum, as it has for its purpose partial payment of the liability of one government agency (MIAA) to another (PNCC).  However, the unlawfulness of the MARCOS Memorandum was being argued, on the observation, for instance, that

the Ongpin Memo referred to in the presidential directive reveals a liability of only about P34.5 Million.  The Sandiganbayan in this connection said:

“Exhibits “2” and “2-a” (pages 1 and 2 of the memorandum of Min. Ongpin to the President dated January 7, 1985) were mainly:

a.)  for the approval of eight Supplemental Contracts; and

b.)  a request for partial deferment of payment by PNCC for advances made for the MIAA Development Project, while at the same time recognizing some of the PNCC’s escalation billings which would result in making payable to PNCC the amount of P34.5 million out of existing MIAA Project funds.

Thus:

‘xxx

To allow PNCC to collect partially its billings, and in consideration of its pending escalation billings, may we request for His Excellency’s approval for a deferment of repayment of PNCC’s advances to the extent of P30 million corresponding to about 30% of P99.1 million in escalation claims of PNCC, of which P32.6 million has been officially recognized by MIADP consultants but could not be paid due to lack of funding.

Our proposal will allow BAT to pay PNCC the amount of   P 34.5 million out of existing MIA Project funds.  This amount represents the excess of the gross billings of PNCC of P98.4 million over the undeferred portion of the repayment of advances of P63.9 million.’

While Min. Ongpin may have, therefore recognized the escalation claims of the PNCC to MIAA to the extent of P99.1 million (Exhibit 2a), a substantial portion thereof was still in the stages of evaluation and approval, with only P32.6 million having been officially recognized by the MIADP consultants.

If any payments were, therefore, due under this memo for Min. Ongpin (upon which President Marcos’ Memo was based) they would only be for a sum of up to P34.5 million.”[17]

x x x                                                                                   x x x                                                                                                     x x x

“V.      Pres. Marcos’ order to Tabuena dated January 8, 1986 baseless.

Not only was Pres. Marcos’ Memo (Exhibit “1”) for Tabuena to pay P55 million irrelevant, but it was actually baseless.

This is easy to see.

Exhibit “1” purports to refer itself to the Ongpin Memorandum (Exhibit “2”, “2-a”); Exhibit “1”, however, speaks of P55 million to be paid to the PNCC while Exhibit “2” authorized only P34.5 million.  The order to withdraw the amount of P55 million exceeded the approved payment of P34.5 million by P20.5 million.  Min. Ongpin’s Memo of January 7, 1985 could not therefore serve as a basis for the President’s order to withdraw P55 million.”[18]

Granting this to be true, it will not nevertheless affect Tabuena’s good faith so as to make him criminally liable.  What is more significant to consider is that the MARCOS Memorandum is patently legal (for on its face it directs payment of an outstanding liability) and that Tabuena acted under the honest belief that the P55 million was a due and demandable debt and that it was just a portion of a bigger liability to PNCC.  This belief is supported by defense witness Francis Monera who, on direct examination, testified that:

“ATTY ANDRES

Q     Can you please show us in this Exhibit “7” and “7-a” where it is indicated the receivables from MIA as of December 31, 1985?

A      As of December 31, 1985, the receivables from MIA is shown on page 2, marked as Exhibit “7-a”, sir, P 102,475,392.35 .

x x x                          x x x                     x x x.”[19]

ATTY. ANDRESQ     Can you tell us, Mr. Witness, what these obligations represent?WITNESSA      These obligations represent receivables on the basis of our billings to MIA as contract-

owner of the project that the Philippine National Construction Corporation constructed. These are billings for escalation mostly, sir.

Q     What do you mean by escalation?A      Escalation is the component of our revenue billings to the contract-owner that are

supposed to take care of price increases, sir.”         x x x                                x x x                          x x x.”[20]

ATTY ANDRESQ     When you said these are accounts receivable, do I understand from you that these are

due and demandable?A      Yes, sir.”[21]

Thus, even if the order is illegal if it is patently legal and the subordinate is not aware of its illegality, the subordinate is not liable, for then there would only be a mistake of fact committed in good faith.[22] Such is the ruling in “Nassif v. People”[23] the facts of which, in brief, are as follows:

“Accused was charged with falsification of commercial document.  A mere employee of R.J. Campos, he inserted in the commercial document alleged to have been falsified the word “sold” by order of his principal.  Had he known or suspected that his principal was committing an improper act of falsification, he would be liable either as a co-principal or as an accomplice.  However, there being no malice on his part, he was exempted from criminal liability as he was a mere employee following the orders of his principal.”[24]

Second.  There is no denying that the disbursement, which Tabuena admitted as “out of the ordinary”, did not comply with certain auditing rules and regulations such as those pointed out by the Sandiganbayan, to wit:

a)  [except for salaries and wages and for commutation of leaves] all disbursements above P1,000.00 should be made by check (Basic Guidelines for Internal Control dated January 31, 1977 issued by COA)

b)  payment of all claims against the government had to be supported with complete documentation (Sec. 4, P.D. 1445, “State Auditing Code of the Philippines).  In this connection, the Sandiganbayan observed that:

“There were no vouchers to authorize the disbursements in question.  There were no bills to support the disbursement.  There were no certifications as to the availability of funds for an unquestionably staggering sum of P55 Million.”[25]

c)  failure to protest (Sec. 106, P.D. 1445)

But this deviation was inevitable under the circumstances Tabuena was in.  He did not have the luxury of time to observe all auditing procedures of disbursement considering the fact that the MARCOS Memorandum enjoined his “immediate compliance” with the directive that he forward to the

President’s Office the P55 Million in cash.  Be that as it may, Tabuena surely cannot escape responsibility for such omission.  But since he was acting in good faith, his liability should only be administrative or civil in nature, and not criminal.  This follows the decision in “Villacorta v. People”[26] where the Court, in acquitting therein accused municipal treasurer of Pandan, Catanduanes of malversation after finding that he incurred a shortage in his cash accountability by reason of his payment in good faith to certain government personnel of their legitimate wages, leave allowances, etc., held that:

“Nor can negligence approximating malice or fraud be attributed to petitioner.  If he made wrong payments, they were in good faith mainly to  government personnel, some of them working at the provincial auditor’s and the provincial treasurer’s offices.  And if those payments ran counter to auditing rules and regulations, they did not amount to a criminal offense and he should only be held administratively or civilly liable.”

Likewise controlling is “US v. Elviña”[27] where it was held that payments in good faith do not amount to criminal appropriation, although they were made with insufficient vouchers or improper evidence. In fact, the Dissenting Opinion’s reference to certain provisions in the revised Manual on Certificate of Settlement and Balances - apparently made to underscore Tabuena’s personal accountability, as agency head, for MIAA funds - would all the more support the view that Tabuena is vulnerable to civil sanctions only.  Sections 29.2 and 29.5 expressly and solely speak of “civilly liable”   to describe the kind of sanction imposable on a superior officer who performs his duties with “bad faith, malice or gross negligence”’ and on a subordinate officer or employee who commits “willful or negligent acts x x x which are contrary to law, morals, public policy  and good customs even if he acted under order or instructions of his superiors.”

Third.  The Sandiganbayan made the finding that Tabuena had already converted and misappropriated the P55 Million when he delivered the same to Mrs. Gimenez and not to the PNCC, proceeding from the following definitions/concepts of “conversion”:

“‘Conversion’, as necessary element of offense of embezzlement, being the fraudulent ‘appropriation to one’s own use’ of another’s property which does not necessarily mean to one’s personal advantage but every attempt by one person to dispose of the goods of another without right as if they were his own is ‘conversion to his own use.’  (Terry v. Water Improvement Dist. No. 5 of Tulsa County, 64 p. 2d 904, 906, 179 Okl. 106)

-  At p. 207, Words and Phrases,

   Permanent Edition 9A.

Conversion is any interference subversive of the right of the owner of personal property to enjoy and control it.  The gist of conversion is the usurpation of the owner’s right of property, and not the actual damages inflicted.  Honesty of purpose is not a defense.  (Ferrera v. Parks, 23 p. 883, 885 19 Or. 141)

-  At page 168, id.

x x x   x x x      x x x

The words ‘convert’ and ‘misappropriate’ connote an act of using or disposing of another’s property as if it were one’s own.  They presuppose that the thing has been devoted to a purpose or use different from that agreed upon.  To appropriate to one’s own use includes not only conversion to one’s personal advantage but every attempt to dispose of the property of another without right.

People vs. Webber, 57 O.G.

p. 2933, 2937

By placing them at the disposal of private persons without due authorization or legal justification, he became as guilty of malversation as if he had personally taken them and converted them to his own use.

  People vs. Luntao, 50 O.G.

  p. 1182, 1183”[28]

We do not agree. It must be stressed that the MARCOS Memorandum directed Tabuena “to pay immediately the Philippine National Construction Corporation, thru this office, the sum of FIFTY FIVE MILLION....”, and that was what Tabuena precisely did when he delivered the money to Mrs. Gimenez.  Such delivery, no doubt, is in effect delivery to the Office of the President inasmuch as Mrs. Gimenez was Marcos’ secretary then.  Furthermore, Tabuena had reasonable ground to believe that the President was entitled to receive the P55 Million since he was certainly aware that Marcos, as Chief Executive, exercised supervision and control over government agencies.  And the good faith of Tabuena in having delivered the money to the President’s office (thru Mrs. Gimenez), in strict compliance with the MARCOS Memorandum, was not at all affected even if it later turned out that PNCC never received the money.  Thus, it has been said that:

“Good faith in the payment of public funds relieves a public officer from the crime of malversation.

x x x                                  x x x                             x x x

Not every unauthorized payment of public funds is malversation.  There is malversation only if the public officer who has custody of public funds should appropriate the same, or shall take or misappropriate or shall consent, or through abandonment or negligence shall permit any other person to take such public funds.  Where the payment of public funds has been made in good faith, and there is reasonable ground to believe that the public officer to whom the fund had been paid was entitled thereto, he is deemed to have acted in good faith, there is no criminal intent, and the payment, if it turns out that it is unauthorized, renders him only civilly but not criminally liable.”[29]

Fourth.   Even assuming that the real and sole purpose behind the MARCOS Memorandum was to siphon-out public money for the personal benefit of those then in power, still, no criminal liability can be imputed to Tabuena.  There is no showing that Tabuena had anything to do whatsoever with the execution of the MARCOS Memorandum.  Nor is there proof that he profited from the felonious scheme.  In short, no conspiracy was established between Tabuena and the real embezzler/s of the P55 Million.  In the cases of  “US v. Acebedo”[30]and “Ang v. Sandiganbayan”,[31] both also involving the crime of malversation, the accused therein were acquitted after the Court arrived at a similar finding of non-proof of conspiracy.  In “Acebedo”, therein accused, as municipal president of Palo, Leyte, was prosecuted for and found guilty by the lower court of malversation after being unable to turn over certain amounts to the then justice of the peace.  It appeared, however, that said amounts were actually collected by his secretary Crisanto Urbina.  The Court reversed Acebedo’s conviction after finding that the sums were converted by his secretary Urbina without the knowledge and participation of Acebedo.  The Court said, which we herein adopt:

“No conspiracy between the appellant and his secretary has been shown in this case, nor did such conspiracy appear in the case against Urbina.  No guilty knowledge of the theft committed by the secretary was shown on the part of the appellant in this case, nor does it appear that he in any way participated in the fruits of the crime.  If the secretary stole the money in question without the knowledge or consent of the appellant and without negligence on his part, then certainly the latter can not be convicted of embezzling the same money or any part thereof.”[32]

In “Ang”, accused-petitioner, as MWSS bill collector, allowed part of his collection to be converted into checks drawn in the name of one Marshall Lu, a non-customer of MWSS, but the checks were subsequently dishonored.  Ang was acquitted by this Court after giving credence to his assertion that the conversion of his collections into checks were thru the machinations of one Lazaro Guinto, another MWSS collector more senior to him.  And we also adopt the Court’s observation therein, that:

“The petitioner’s alleged negligence in allowing the senior collector to convert cash collections into checks may be proof of poor judgment or too trusting a nature insofar as a superior officer is concerned but there must be stronger evidence to show fraud, malice, or other indicia of deliberateness in the conspiracy cooked up with Marshall Lu.  The prosecution failed to show that the petitioner was privy to the conspirational scheme.  Much less is there any proof that he profited from the questioned acts.  Any suspicions of conspiracy, no matter how sincerely and strongly felt by the MWSS, must be converted into evidence before conviction beyond reasonable doubt may be imposed.”[33]

The principles underlying all that has been said above in exculpation of Tabuena equally apply to Peralta in relation to the P5 Million for which he is being held accountable, i.e., he acted in good faith when he, upon the directive of Tabuena,  helped facilitate the withdrawal of P5 Million of the P55 Million of the MIAA funds.

This is not a sheer case of blind and misguided obedience, but obedience in good faith of a duly executed order. Indeed, compliance to a patently lawful order is rectitude far better than contumacious disobedience. In the case at bench, the order emanated from the Office of the President and bears the signature of the President himself, the highest official of the land. It carries with it the presumption that it was regularly issued. And on  its face, the memorandum is patently lawful for no law makes the payment of an obligation illegal. This fact, coupled with the urgent tenor for its execution constrains one to act swiftly without question. Obedientia est legis essentia.  Besides, the case could not be detached from the realities then prevailing.  As aptly observed by Mr. Justice Cruz in his dissenting opinion:

“We reject history in arbitrarily assuming that the people were free during the era and that the judiciary was independent and fearless.  We know it was not; even the Supreme Court at that time was not free. This is an undeniable fact that we can not just blink away.  Insisting on the contrary would only make our sincerity suspect and even provoke scorn for what can only be described as our incredible credulity.”[34]

But what appears to be a more compelling reason for their acquittal is the violation of the accused’s basic constitutional right to due process. “Respect for the Constitution”, to borrow once again Mr. Justice Cruz’s words,  “is more important than securing a conviction based on a violation of the rights of the accused.”[35] While going over the records, we were struck by the way the Sandiganbayan actively took part  in the questioning of a defense witness and of the accused themselves.  Tabuena and Peralta may not have raised this as an error, there is nevertheless no impediment for us to  consider such matter as additional basis for a reversal since the settled doctrine is that an appeal throws the whole case open to review,  and it becomes the duty of the appellate court to correct such errors as may be found in the judgment appealed from whether they are made the subject of assignments of error or not.[36]

Simply consider the volume of questions hurled by the Sandiganbayan.  At the taking of the testimony of Francis Monera, then Senior Assistant Vice President and Corporate Comptroller of PNCC, Atty. Andres asked sixteen (16) questions on direct examination.  Prosecutor Viernes only asked six (6) questions on cross-examination in the course of which the court interjected a total of twenty-seven (27) questions (more than four times Prosecutor Viernes’ questions and even more than the combined total of direct and cross-examination questions asked by the counsels).  After the defense opted not to conduct any re-direct examination, the court further asked a total of ten (10) questions.[37] The trend intensified during Tabuena’s turn on the witness stand.  Questions from the court after Tabuena’s cross-examination totalled sixty-seven (67).[38] This is more than five times Prosecutor Viernes’ questions on cross-examination (14), and more than double the total of direct examination and cross-examination questions which is thirty-one (31) [17 direct examination questions by Atty. Andres plus 14 cross-examination questions by Prosecutor Viernes]. In Peralta’s case, the Justices, after his cross-examination, propounded a total offorty-one (41) questions.[39]

But more importantly, we note that the questions of the court were in the nature of cross examinations characteristic of confrontation, probing and insinuation. [40] (The insinuating type was best exemplified in one question addressed to Peralta, which will be underscored.)  Thus we beg to quote in length from the transcripts pertaining to witness Monera, Tabuena and Peralta.  (Questions from the Court are marked with asterisks and italicized for emphasis.)

(MONERA)

(As a background, what was elicited from his direct examination is that the PNCC had receivables from MIAA totalling P102,475,392.35, and although such receivables were largely billings for escalation, they were nonetheless all due and demandable.  What follows are the cross-examination of Prosecutor Viernes and the court questions).

“CROSS-EXAMINATION BY PROS. VIERNES

Q     You admit that as shown by these Exhibits “7” and “7-a”, the items here represent mostly escalation billings.  Were those escalation billings properly transmitted to MIA authorities?

A      I don’t have the documents right now to show that they were transmitted, but I have a letter by our President, Mr. Olaguer, dated July 6, 1988, following up for payment of the balance of our receivables from MIA, sir.

*AJ AMORES*Q   This matter of escalation costs, is it not a matter for a conference between the

MIA and the PNCC for the determination as to the correct amount?A      I agree, your Honor.  As far as we are concerned, our billings are what we deemed are

valid receivables.  And, in fact, we have been following up for payment.*Q   This determination of the escalation costs was it accepted as the correct figure

by MIA?A      I don’t have any document as to the acceptance by MIA, your Honor, but our company

was able to get a document or a letter by Minister Ongpin to President Marcos, dated January 7, 1985, with a marginal note or approval by former President Marcos.

*PJ GARCHITORENA*Q   Basically, the letter of Mr. Ongpin is to what effect?A      The subject matter is approval of the supplementary contract and request for partial

deferment of payment for MIA Development Project, your Honor.*Q   It has nothing to do with the implementation of the escalation costs?A      The details show that most of the accounts refer to our escalations, your Honor.*Q   Does that indicate the computation for escalations were already billed or you

do not have any proof of that?A      Our subsidiary ledger was based on billings to MIA and this letter of Minister Ongpin

appears to have confirmed our billings to MIA, your Honor.*AJ AMORES*Q   Were there partial payments made by MIA on these escalation billings?A      Based on records available as of today, the P102 million was reduced to about P56.7

million, if my recollection is correct, your Honor.*PJ GARCHITORENA*Q   Were the payments made before or after February 1986, since Mr. Olaguer is a

new entrant to your company?WITNESSA      The payments were made after December 31, 1985 but I think the payments were

made before the entry of our President, your Honor.  Actually, the payment was in the form of: assignments to State Investment of about P23 million; and then there was P17.8

million application against advances made or formerly given; and there were payments to PNCC of about P2.6 million and there was a payment for application on withholding and contractual stock of about P1 million; that summed up to P44.4 million all in all.  And you deduct that from the P102 million, the remaining balance would be about P57 million.

*PJ GARCHITORENA*Q   What you are saying is that, for all the payments made on this P102 million,

only P2 million had been payments in cash?A      Yes, your Honor.*Q   The rest had been adjustments of accounts, assignments of accounts, or

offsetting of accounts?A      Yes, your Honor.*Q   This is as of December 31, 1985?A      The P102 million was as of December 31, 1985, your Honor, but the balances is as of

August 1987.*Q   We are talking now about the P44 million, more or less, by which the basic

account has been reduced.  These reductions, whether by adjustment or assignment or actual delivery of cash, were made after December 31, 1985?

WITNESSA      Yes, your Honor.*Q   And your records indicate when these adjustments and payments were made?A      Yes, your Honor.*AJ AMORES*Q   You said there were partial payments before of these escalation billings.  Do

we get it from you that there was an admission of these escalation costs as computed by you by MIA, since there was already partial payments?

A      Yes, your Honor.*Q   How were these payments made before February 1986, in case or check, if

there were payments made?A      The P44 million payments was in the form of assignments, your Honor.*PJ GARCHITORENA*Q   The question of the Court is, before December 31, 1985, were there any

liquidations made by MIA against these escalation billings?A      I have not reviewed the details of the record, your Honor.  But the ledger card indicates

that there were collections on page 2 of the Exhibit earlier presented.  It will indicate that there were collections shown by credits indicated on the credit side of the ledger.

*AJ AMORES*Q   Your ledger does not indicate the manner of giving credit to the MIA with

respect to the escalation billings.  Was the payment in cash or just credit of some sort before December 31, 1985?

A      Before December 31, 1985, the reference of the ledger are official receipts and I suppose these were payments in cash, your Honor.

*Q   Do you know how the manner of this payment in cash was made by MIA?A      I do not know, your Honor.

*PJ GARCHITORENA*Q   But your records will indicate that?A      The records will indicate that, your Honor.*Q   Except that you were not asked to bring them?A      Yes, your Honor.*Q   At all events, we are talking of settlement or partial liquidation prior to

December 31, 1985?A      Yes, your Honor.*PJ GARCHITORENA*Q   Subsequent thereto, we are talking merely of about P44 million?A      Yes, your Honor, as subsequent settlements.*Q   After December 31, 1985?A      Yes, your Honor.*Q   And they have liquidated that, as you described it, by way of assignments,

adjustments, by offsets and by P2 million of cash payment?A      Yes, your Honor.*AJ AMORES*Q   Your standard operating procedure before December 31, 1985 in connection

with or in case of cash payment, was the payment in cash or check?A      I would venture to say it was by check, your Honor.*Q   Which is the safest way to do it?A      Yes, your Honor.*PJ GARCHITORENA*Q   And the business way?A      Yes, your Honor.PJ GARCHITORENAContinue.PROS VIERNESQ     You mentioned earlier about the letter of former Minister Ongpin to the former President

Marcos, did you say that that letter concurs with the escalation billings reflected in Exhibits “7” and “7-a”?

WITNESSA      The Company or the management is of the opinion that this letter, a copy of which we

were able to get, is a confirmation of the acceptance of our billings, sir.Q     This letter of Minister Ongpin is dated January 7, 1985, whereas the entries of escalation

billings as appearing in Exhibit “7” are dated June 30, 1985, would you still insist that the letter of January 1985 confirms the escalation billings as of June 1985?

A      The entries started June 30 in the ledger card.  And as of December 31, 1985, it stood at P102 million after payments were made as shown on the credit side of the ledger.  I suppose hat the earlier amount, before the payment was made, was bigger and therefore I would venture to say that the letter of January 7, 1985 contains an amount

that is part of the original contract account.  What are indicated in the ledger are escalation billings.

*PJ GARCHITORENA*Q   We are talking about the letter of Minister Ongpin?A      The letter of Minister Ongpin refers to escalation billings, sir.*Q   As of what date?A      The letter is dated January 7, 1985, your Honor.PJ GARCHITORENAContinue.PROS. VIERNESQ     In accordance with this letter marked Exhibit “7” and “7-a”, there were credits made in

favor of MIA in July and November until December 1985.  These were properly credited to the account of MIA?

WITNESSA      Yes, sir.Q     In 1986, from your records as appearing in Exhibit “7-a”, there were no payments made

to PNCC by MIA for the months of January to June 1986?A      Yes, sir.Q     And neither was the amount of P22 million remitted to PNCC by MIA?A      Yes, sir.PROS VIERNESThat will be all, your Honor.PJ GARCHITORENARedirect?ATTY ANDRESNo redirect, your Honor.*PJ GARCHITORENAQuestions from the Court.*AJ AMORES*Q   From your records, for the month of January 1986, there was no payment of

this escalation account by MIA?WITNESSA      Yes, your Honor.  But on page 2 of Exhibit “7” there appears an assignment of P23

million, that was on September 25, 1986.*Q   But that is already under the present administration?A      After February 1986, your Honor.*Q   But before February, in January 1986, there was no payment whatsoever by

MIA to PNCC?A      Per record there is none appearing, your Honor.

*PJ GARCHITORENA*Q   The earliest payment, whether by delivery of cash equivalent or of adjustment

of account, or by assignment, or by offsets, when did these payments begin?A      Per ledger card, there were payments in 1985, prior to December 31, 1985, your Honor.*Q   After December 31, 1985?A      There appears also P23 million as credit, that is a form of settlement, your Honor.*Q   This is as of September 25?A      Yes, your Honor.  There were subsequent settlements.  P23 million is just part of the P44

million.*Q   And what you are saying is that, PNCC passed the account to State

Investment.  In other words, State Investment bought the credit of MIA?A      Yes, your Honor.*Q   And the amount of credit or receivables sold by PNCC to State Investment

is P23 million?A      Yes, your Honor.*Q   Is there a payback agreement?A      I have a copy of the assignment to State Investment but I have not yet reviewed the

same, your Honor.*AJ AMORES*Q   As of now, is this obligation of MIA, now NAIA, paid to PNCC?A      There is still a balance of receivables from MIA as evidenced by a collection letter by our

President dated July 6, 1988, your Honor.  The amount indicated in the letter is P55 million.

PJ GARCHITORENAAny clarifications you would like to make Mr. Estebal?ATTY ESTEBALNone, your Honor.PJ GARCHITORENAMr. Viernes?PROS VIERNESNo more, your Honor.PJ GARCHITORENAThe witness is excused.  Thank you very much Mr. Monera.  x x x.”[41]

(TABUENA)

(In his direct examination, he testified that he caused the preparation of the checks totalling P55 Million pursuant to the MARCOS Memorandum and that he thereafter delivered said amount in cash on the three (3) dates as alleged in the information to Marcos’ private secretary Mrs. Jimenez at her office at Aguado Street, who thereafter issued a receipt. Tabuena also denied having used the money for his own personal use.)

“CROSS-EXAMINATION BY PROS. VIERNESQ     The amount of P55 million as covered by the three (3) checks Mr. Tabuena, were

delivered on how many occasions?A      Three times, sir.Q     And so, on the first two deliveries, you did not ask for a receipt from Mrs. Gimenez?A      Yes, sir.Q     It was only on January 30, 1986 that this receipt Exhibit “3” was issued by Mrs.

Gimenez?A      Yes, sir.*PJ GARCHITORENA*Q   So January 30 is the date of the last delivery?A      I remember it was on the 31st of January, your Honor.  What happened is that, I did not

notice the date placed by Mrs. Gimenez.*Q   Are you telling us that this Exhibit “3” was incorrectly dated?A      Yes, your Honor.*Q   Because the third delivery was on January 31st and yet the receipt was dated

January 30?A      Yes, your Honor.*Q   When was Exhibit “3” delivered actually by Mrs. Gimenez?A      January 31st, your Honor.PJ GARCHITORENAContinue.PROS VIERNESQ     You did not go to Malacañang on January 30, 1986?A      Yes, sir, I did not.Q     Do you know at whose instance this Exhibit “3” was prepared?A      I asked for it, sir.Q     You asked for it on January 31, 1986 when you made the last delivery?A      Yes, sir.Q     Did you see this Exhibit “3” prepared in the Office of Mrs. Gimenez?A      Yes, sir.Q     This receipt was typewritten in Malacañang stationery.  Did you see who typed this

receipt?A      No, sir.  What happened is that, she went to her room and when she came out she gave

me that receipt.*PJ GARCHITORENA*Q   What you are saying is, you do not know who typed that receipt?WITNESSA      Yes, your Honor.

*Q   Are you making an assumption that she typed that receipt?A      Yes, your Honor, because she knows how to type.*Q   Your assumption is that she typed it herself?A      Yes, your Honor.PJ GARCHITORENAProceed.PROS. VIERNESQ     This receipt was prepared on January 31, although it is dated January 30?A      Yes, sir, because I was there on January 31st.Q     In what particular place did Mrs. Gimenez sign this Exhibit “3”?A      In her office at Aguado, sir.Q     Did you actually see Mrs. Gimenez signing this receipt Exhibit “3”?A      No, sir, I did not.  She was inside her room.Q     So, she was in her room and when she came out of the room, she handed this receipt to

you already typed and signed?A      Yes, sir.*AJ HERMOSISIMA*Q   So, how did you know this was the signature of Mrs. Gimenez?WITNESSA      Because I know her signature, your Honor.  I have been receiving letters from her also

and when she requests for something from me.  Her writing is familiar to me.*Q   So, when the Presiding Justice asked you as to how you knew that this was the signature

of Mrs. Gimenez and you answered that you saw Mrs. Gimenez signed it, you were not exactly truthful?

A      What I mean is, I did not see her sign because she went to her room and when she came out, she gave me that receipt, your Honor.

PJ GARCHITORENA         That is why you have to wait for the question to be finished and listen to it

carefully.  Because when I asked you, you said you saw her signed it.  Be careful Mr. Tabuena.

WITNESS         Yes, your Honor.PJ GARCHITORENA         Continue.PROS VIERNESQ     Was there another person inside the office of Mrs. Gimenez when she gave you this

receipt Exhibit “3”?A      Nobody, sir.Q     I noticed in this receipt that the last delivery of the sum of P55 million was made on

January 30.  Do we understand from you that this date January 30 is erroneous?

A      Yes, sir, that January 30 is erroneous.  I noticed it only afterwards.  This should be January 31st, sir.

PROS VIERNESThat will be all, your Honor.PJ GARCHITORENARedirect?ATTY. ANDRESNo redirect, your Honor.*PJ GARCHITORENAQuestions from the Court.*AJ HERMOSISIMA*Q   Why did you not ask for a receipt on the first and second deliveries?A      Because I know that the delivery was not complete yet, your Honor.*PJ GARCHITORENA*Q   So you know that the total amount to be delivered was P55 million?A      Yes, your Honor.PJ GARCHITORENAResponse by Mr. Peralta to the testimony of Mr. Tabuena.ATTY. ESTEBALWe are adopting the testimony of Mr. Tabuena and we will also present the accused, your

Honor.*AJ DEL ROSARIO*Q   From whom did you receive the President’s memorandum marked Exhibit “1”?  Or more

precisely, who handed you this memorandum?A      Mrs. Fe Roa Gimenez, your Honor.*Q   Did you ask Mrs. Fe Gimenez for what purpose the money was being asked?

A      The money was in payment for the debt of the MIA Authority to PNCC, your Honor.*Q   If it was for the payment of such obligation why was there no voucher prepared to cover

such payment?  In other words, why was the delivery of the money not covered by any voucher?Calrky

A      The instruction to me was to give it to the Office of the President, your Honor.*PJ GARCHITORENA*Q   Be that as it may, why was there no voucher to cover this particular disbursement?A      I was just told to bring it to the Office of the President, your Honor.*AJ DEL ROSARIO*Q   Was that normal procedure for you to pay in cash to the Office of the President for

obligations of the MIAA in payment of its obligation to another entity?WITNESSA      No, your Honor, I was just following the Order to me of the President.

*PJ GARCHITORENA*Q   So the Order was out of the ordinary?A      Yes, your Honor.*AJ DEL ROSARIO*Q   Did you file any written protest with the manner with which such payment was being

ordered?A      No, your Honor.*Q   Why not?A      Because with that instruction of the President to me, I followed, your Honor.*Q   Before receiving this memorandum Exhibit “1”, did the former President Marcos discuss

this matter with you?A      Yes, your Honor.*Q   When was that?A      He called me up earlier, a week before that, that he wants to me pay what I owe the

PNCC directly to his office in cash, your Honor.*PJ GARCHITORENA*Q   By “I OWE”, you mean the MIAA?WITNESSA      Yes, your Honor.*AJ DEL ROSARIO*Q   And what did you say in this discussion you had with him?A      I just said, “Yes, sir, I will do it/”*Q   Were you the one who asked for a memorandum to be signed by him?A      No, your Honor.*Q   After receiving that verbal instruction for you to pay MIAA’s obligation with PNCC, did

you not on your own accord already prepare the necessary papers and documents for the payment of that obligation?

A      He told me verbally in the telephone that the Order for the payment of that obligation is forthcoming, your Honor.  I will receive it.

*Q   Is this the first time you received such a memorandum from the President?A      Yes, your Honor.*Q   And was that the last time also that you received such a memorandum?A      Yes, your Honor.*Q   Did you not inquire, if not from the President, at least from Mrs. Gimenez why this

procedure has to be followed instead of the regular procedure?A:     No, sir.*AJ DEL ROSARIO*Q   Why did you not ask?A      I was just ordered to do this thing, your Honor.

*AJ HERMOSISIMA*Q   You said there was an “I OWE YOU”?A      Yes, your Honor.*Q   Where is that “I OWE YOU” now?A      All I know is that we owe PNCC the amount of P99.1 million, your Honor.  MIAA owes

PNCC that amount.*Q   Was this payment covered by receipt from the PNCC?A      It was not covered, your Honor.*Q   So the obligation of MIAA to PNCC was not, for the record, cancelled by virtue of that

payment?A      Based on the order to me by the former President Marcos ordering me to pay that

amount to his office and then the mechanics will come after, your Honor.*Q   Is the PNCC a private corporation or government entity?A      I think it is partly government, your Honor.*PJ GARCHITORENA*Q   That is the former CDCP?A      Yes, your Honor.*AJ HERMOSISIMA*Q   Why were you not made to pay directly to the PNCC considering that you are the

Manager of MIA at that time and the PNCC is a separate corporation, not an adjunct of Malacañang?

WITNESSA      I was just basing it from the Order of Malacañang to pay PNCC through the Office of the

President, your Honor.*Q   Do you know the President or Chairman of the Board of PNCC?A      Yes, your Honor.*Q   How was the obligation of MIAA to PNCC incurred.  Was it through the President or

Chairman of the Board?A      PNCC was the one that constructed the MIA, your Honor.*Q   Was the obligation incurred through the President or Chairman of the Board or President

of the PNCC?  In other words, who signed the contract between PNCC and MIAA?A      Actually, we inherited this obligation, your Honor.  The one who signed for this was the

former Director of BAT which is General Singzon.  Then when the MIA Authority was formed, all the obligations of BAT were transferred to MIAA.  So the accountabilities of BAT were transferred to MIAA and we are the ones that are going to pay, your Honor.

*Q   Why did you agree to pay to Malacañang when your obligation was with the PNCC?A      I was ordered by the President to do that, your Honor.*Q   You agreed to the order of the President notwithstanding the fact that this was not the

regular course or Malacañang was  not the creditor?A      I saw nothing wrong with that because that is coming from the President, your Honor.*Q   The amount was not a joke, amounting to P55 million, and you agreed to deliver money

in this amount through a mere receipt from the private secretary?

A      I was ordered by the President, your Honor.*PJ GARCHITORENA*Q   There is no question and it can be a matter of judicial knowledge that you have been

with the MIA for sometime?A      Yes, your Honor.*Q   Prior to 1986?A      Yes, your Honor.*Q   Can you tell us when you became the Manager of MIA?A      I became Manager of MIA way back, late 1968, your Honor.*Q   Long before the MIA was constituted as an independent authority?A      Yes, your Honor.*PJ GARCHITORENA*Q   And by 1986, you have been running the MIA for 18 years?WITNESSA      Yes, your Honor.*Q   And prior to your joining the MIA, did you ever work for the government?A      No, your Honor.*Q   So, is it correct for us to say that your joining the MIA in 1968 as its Manager was your

first employment with the government?A      Yes, your Honor.*Q   While you were Manager of MIA, did you have other subsequent concurrent positions in

the government also?A      I was also the Chairman of the Games and Amusement Board, your Honor.*Q   But you were not the executive or operating officer of the Games and Amusement

Board?A      I was, your Honor.*Q   As Chairman you were running the Games and Amusement Board?A      Yes, your Honor.*Q   What else, what other government positions did you occupy that time?A      I was also Commissioner of the Game Fowl Commission, your Honor.*PJ GARCHITORENA*Q   That is the cockfighting?WITNESSA      Yes, your Honor.*Q   Here, you were just a member of the Board?A      Yes, your Honor.*Q   So you were not running the commission?A      Yes, your Honor.

*Q   Any other entity?A      No more, your Honor.*Q   As far as you can recall, besides being the Manager of the MIA and later the MIAA for

approximately 18 years, you also ran the Games and Amusement Board as its executive officer?

A      Yes, your Honor.*Q   And you were a commissioner only of the Game Fowl Commission?A      Yes, your Honor.*Q   Who was running the commission at that time?A      I forgot his name, but he retired already, your Honor.*Q   All of us who joined the government, sooner or later, meet with our Resident COA

representative?A      Yes, your Honor.*PJ GARCHITORENA*Q   And one of our unfortunate experience (sic) is when the COA Representative comes to us

and says:  “Chairman or Manager, this cannot be”.  And we learn later on that COA has reasons for its procedure and we learn to adopt to them?

WITNESSA      Yes, your Honor.*Q   As a matter of fact, sometimes we consider it inefficient, sometimes we consider it

foolish, but we know there is reason in this apparent madness of the COA and so we comply?

A      Yes, your Honor.*Q   And more than anything else the COA is ever anxious for proper documentation and

proper supporting papers?A      Yes, your Honor.*Q   Sometimes, regardless of the amount?A      Yes, your Honor.*Q   Now, you have P55 million which you were ordered to deliver in cash, not to the creditor

of the particular credit, and to be delivered in armored cars to be acknowledged only by a receipt of a personal secretary.  After almost 18 years in the government service and having had that much time in dealing with COA people, did it not occur to you to call a COA representative and say, “What will I do here?”

A      I did not, your Honor.*PJ GARCHITORENA*Q   Did you not think that at least out of prudence, you should have asked the COA for some

guidance on this matter so that you will do it properly?WITNESSA      What I was going to do is, after those things I was going to tell that delivery ordered by

the President  to the COA, your Honor.*Q   That is true, but what happened here is that you and Mr. Dabao or you and Mr. Peralta

signed requests for issuance of Manager’s checks and you were accommodated by the

PNB Office at Nichols without any internal documentation to justify your request for Manager’s checks?

A      Yes, your Honor.*Q   Of course we had no intimation at that time that Mr. Marcos will win the elections but

even then, the Daily Express, which was considered to be a newspaper friendly to the Marcoses at that time, would occasionally come with so-called expose, is that not so?

A      Yes, your Honor.*Q   And worst, you had the so-called mosquito press that would always come out with the

real or imagined scandal in the government and place it in the headline, do you recall that?

A      Yes, your Honor.*PJ GARCHITORENA*Q   Under these circumstances, did you not entertain some apprehension that some disloyal

employees might leak you out and banner headline it in some mosquito publications like the Malaya at that time?

WITNESSA      No, your Honor.*PJ GARCHITORENAI bring this up because we are trying to find out different areas of fear.  We are in the

government and we in the government fear the COA and we also fear the press.   We might get dragged into press releases on the most innocent thing.  You believe that?

A      Yes, your Honor.*Q   And usually our best defense is that these activities are properly documented?A      Yes, your Honor.*Q   In this particular instance, your witnesses have told us about three (3) different trips

from Nichols to Aguado usually late in the day almost in movie style fashion.  I mean, the money being loaded in the trunk of your official car and then you had a back-up truck following your car?

A      Yes, your Honor.*Q   Is that not quite a fearful experience to you?A      I did not think of that at that time, your Honor.*PJ GARCHITORENA*Q   You did not think it fearful to be driving along Roxas Boulevard with P25 million in the

trunk of your car?WITNESSA      We have security at that time your Honor.ATTY. ANDRESYour Honor, the P25 million was in the armored car; only P5 million was in the trunk of his

car.*PJ GARCHITORENAThank you for the correction.  Even P1 million only.  How much more with P5 million inside

the trunk of your car, was that not a nervous experience?A      As I have said, your Honor, I never thought of that.

PJ GARCHITORENAThank you very much, Mr. Tabuena.  You are excused. x x x.”[42]

(PERALTA)

(He testified on direct examination that he co-signed with Tabuena a memorandum request for the issuance of the Manager’s Check for P5 Million upon order of Tabuena and that he [Peralta] was aware that MIAA had an existing obligation with PNCC in the amount of around P27 Million.  He affirmed having accompanied Tabuena at the PNB Villamor Branch to withdraw the P5 Million, but denied having misappropriated for his own benefit said amount or any portion thereof.)

“CROSS-EXAMINATION BY PROS VIERNESQ     Will you please tell the Honorable Court why was it necessary for you to co-sign with Mr.

Tabuena the request for issuance of Manager’s check in the amount of P5 million?A      At that time I was the Acting Financial Services Manager of MIAA, sir, and all

withdrawals of funds should have my signature because I was one of the signatories at that time.

Q     As Acting Financial Services Manager of MIAA, you always co-sign with Mr. Tabuena in similar requests for the issuance of Manager’s checks by the PNB?

A      That is the only occasion I signed, sir.Q     Did you say you were ordered by Mr. Tabuena to sign the request?A      Yes, sir, and I think the order is part of the exhibits.  And based on that order, I co-

signed in the request for the issuance of Manager’s check in favor of Mr. Luis Tabuena.PROS VIERNESQ     Was there a separate written order for you to co-sign with Mr. Tabuena?WITNESSA      Yes, sir, an order was given to me by Mr. Tabuena.*PJ GARCHITORENAWas that marked in evidence?WITNESSYes, your Honor.*PJ GARCHITORENAWhat exhibit?WITNESSI have here a copy, your Honor.  This was the order and it was marked as exhibit “N”. PROS VIERNESIt was marked as Exhibit “M”, your Honor.Q     How did you know there was an existing liability of MIAA in favor of PNCC at that time?A      Because prior to this memorandum of Mr. Tabuena, we prepared the financial statement

of MIAA as of December 31, 1985 and it came to my attention that there was an existing liability of around P27,999,000.00, your Honor.

Q     When was that Financial Statement prepared?A      I prepared it around January 22 or 24, something like that, of 1986, sir.Q     Is it your usual practice to prepare the Financial Statement after the end of the year

within three (3) weeks after the end of the year?A      Yes, sir, it was a normal procedure for the MIAA to prepare the Financial Statement on

or before the 4th Friday of the month  because there will be a Board of Directors Meeting and the Financial Statement of the prior month will be presented and discussed during the meeting.

*PJ GARCHITORENA*Q   This matter of preparing Financial Statement was not an annual activity but a monthly

activity?A      Yes, your Honor.*Q   This Financial Statement you prepared in January of 1986 recapitulated the financial

condition as of the end of the year?A      Yes, your Honor.PJ GARCHITORENAContinue.PROS VIERNESQ     You made mention of a request for Escalation Clause by former Minister Ongpin.  Did

you personally see that request?A      When this order coming from Mr. Tabuena was shown to me, I was shown a copy, sir.   I

have no file because I just read it.Q     It was Mr. Tabuena who showed you the letter of Minister Ongpin?A      Yes, sir.*PJ GARCHITORENAAnd that will be Exhibit?ATTY. ANDRESExhibit “2” and “2-A”, your Honor.PROS VIERNESQ     You also stated that you were with Mr. Tabuena when you withdrew the amount of P5

million from the PNB Extension Office at Villamor?A      Yes, sir.Q     Why was it necessary for you to go with him on that occasion?A      Mr. Tabuena requested me to do the counting by million, sir.  So what I did was to

bundle count the P5 million and it was placed in two (2) peerless boxes.Q     Did you actually participate in the counting of the money by bundles?A      Yes, sir.Q     Bundles of how much per bundle?A      If I remember right, the bundles consisted of P100s and P50s, sir.Q     No P20s and P10s?A      Yes, sir, I think it was only P100s and P50s.

*PJ GARCHITORENA*Q   If there were other denominations, you can not recall?A      Yes, your Honor.PROS VIERNESQ     In how many boxes were those bills placed?A      The P5 million were placed in two (2) peerless boxes, sir.Q     And you also went with Mr. Tabuena to Aguado?A      No, sir, I was left behind at Nichols.  After it was placed at the trunk of the car of Mr.

Tabuena, I was left behind and I went back to my office at MIA.Q     But the fact is that, this P5 million was withdrawn at passed 5:00 o’clock in the

afternoon?A      I started counting it I think at around 4:30, sir.  It was after office hours.  But then I was

there at around 4:00 o’clock and we started counting at around 4:30 p.m. because they have to place it in  a room, which is the office of the Manager at that time.

Q     And Mr. Tabuena left for Malacañang after 5:00 o’clock in the afternoon of that date?A      Yes, sir.  After we have counted the money, it was placed in the peerless boxes and Mr.

Tabuena left for Malacañang.PROS VIERNESQ     And you yourself, returned to your office at MIA?WITNESSA      Yes, sir.Q     Until what time do you hold office at the MIA?A      Usually I over-stayed for one (1) or two (2) hours just to finish the paper works in the

office, sir.Q     So, even if it was already after 5:00 o’clock in the afternoon, you still went back to your

office at MIA?A      Yes, sir.PROS VIERNESThat will be all, your Honor.PJ GARCHITORENARedirect?ATTY. ESTEBALNo redirect, your Honor.*PJ GARCHITORENAQuestions from the Court.*AJ DEL ROSARIO*Q   Did you not consider it as odd that your obligation with the PNCC had to be paid in cash?WITNESSA      Based on the order of President Marcos that we should pay in cash, it was not based on

the normal procedure, your Honor.

*Q   And, as Acting Financial Services Manager, you were aware that all disbursements should be covered by vouchers?

A      Yes, your Honor, the payments should be covered by vouchers.  But then, inasmuch as what we did was to prepare a request to the PNB, then this can be covered by Journal Voucher also.

*Q   Was such payment of P5 million covered by a Journal Voucher?A      Yes, your Honor.*Q   Did you present that Journal Voucher here in Court?A      We have a copy, your Honor.*Q   Do you have a copy or an excerpt of that Journal Voucher presented in Court to show

that payment?A      We have a copy of the Journal Voucher, your Honor.*Q   Was this payment of P5 million ever recorded in a cashbook or other accounting books of

MIAA?A      The payment of P5 million was recorded in a Journal Voucher, your Honor.*PJ GARCHITORENA*Q   In other words, the recording was made directly to the Journal?WITNESSA      Yes, your Honor.*Q   There are no other separate documents as part of the application for Manager’s Check?A      Yes, your Honor, there was none.*AJ DEL ROSARIO*Q   After the payment was made, did your office receive any receipt from PNCC?A      I was shown a receipt by Mr. Tabuena, the receipt given by Mrs. Fe Roa Gimenez, your

Honor.  Inasmuch as the payment should be made through the Office of the president, I accepted the receipt given by Mrs. Fe Gimenez to Mr. Tabuena.

*Q   After receiving that receipt, did you prepare the necessary supporting documents, vouchers, and use that receipt as a supporting document to the voucher?

A      Your Honor, a Journal Voucher was prepared for that.*Q   How about a disbursement voucher?A      Inasmuch as this was a request for Manager’s check, no disbursement voucher was

prepared, your Honor.*AJ DEL ROSARIO*Q   Since the payment was made on January 31, 1986, and that was very close to the

election held in that year, did you not entertain any doubt that the amounts were being used for some other purpose?

ATTY. ESTEBALWith due respect to the Honorable Justice, we are objecting to the question on the ground

that it is improper.*AJ DEL ROSARIOI will withdraw the question.

*PJ GARCHITORENAWhat is the ground for impropriety?ATTY. ESTEBALThis is not covered in the direct examination, and secondly, I don’t think there was any basis,

your Honor.*PJ GARCHITORENAConsidering the withdrawal of the question, just make the objection on record.*AJ HERMOSISIMA*Q   As a Certified Public Accountant and Financial Manager of the MIAA, did you not consider

it proper that a check be issued only after it is covered by a disbursement voucher duly approved by the proper authorities?

A      Your Honor, what we did was to send a request for a Manager’s check to the PNB based on the request of Mr. Tabuena and the order of Mr. Tabuena was based on the Order of President Marcos.

*PJ GARCHITORENA*Q   In your capacity as Financial Services Manager of the MIAA, did you not think it proper to

have this transaction covered by a disbursement voucher?WITNESSA      Based on my experience, payments out of cash can be made through cash vouchers, or

even though Journal Vouchers, or even through credit memo, your Honor.*AJ HERMOSISIMA*Q   This was an obligation of the MIAA to the PNCC.  Why did you allow a disbursement by

means of check in favor of Mr. Luis Tabuena, your own manager?A      We based the payment on the order of Mr. Tabuena because that was the order of

President Marcos to pay PNCC through the Office of the President and it should be paid in cash, your Honor.

*Q   You are supposed to pay only on legal orders.  Did you consider that legal?ATTY. ESTEBALWith due respect to the Honorable Justice, the question calls for a conclusion of the witness.*PJ GARCHITORENAConsidering that the witness is an expert, witness may answer.WITNESSA      The order of president Marcos was legal at that time because the order was to pay PNCC

the amount of P5 million through the Office of the President and it should be paid in cash, your Honor.  And at that time, I know for a fact also that there was an existing P.D. wherein the President of the Republic of the Philippines can transfer funds from one office to another and the PNCC is a quasi government entity at that time.

*AJ HERMOSISIMA*Q   Are you saying that this transaction was made on the basis of that P.D. which you

referred to?A      I am not aware of the motive of the President, but then since he is the President of the

Philippines, his order was to pay the PNCC through the Office of the President, your Honor.

*Q   As Financial Manager, why did you allow a payment in cash when ordinarily payment of an obligation of MIAA is supposed to be paid in check?

A      I caused the payment through the name of Mr. Tabuena because that was the order of Mr. Tabuena and also he received an order coming from the President of the Philippines at that time, your Honor.

*PJ GARCHITORENA*Q   Mr. Peralta, are not Journal Vouchers merely entries in the Journals to correct certain

statements of accounts earlier made in the same journal?In other words, really what you are telling us is that, a Journal Voucher is to explain a

transaction was otherwise not recorded.WITNESSA      Yes, your Honor.*Q   Therefore, when you said that a Journal Voucher here is proper, you are saying it is

proper only because of the exceptional nature of the transactions?A      Yes, your Honor.*Q   In other words, as an Accountant, you would not normally authorize such a movement of

money unless it is properly documented?ATTY. ESTEBALWith due respect to the Honorable Presiding Justice, I think the question is misleading

because what the witness stated is...*PJ GARCHITORENABe careful in your objection because the witness understands the language you are speaking,

and therefore, you might be coaching him.ATTY. ESTEBALNo, your Honor.  I am also an accountant that is why I could say that...*PJ GARCHITORENAPlease be simple in your objection.ATTY. ESTEBALThe question is misleading on the ground that what the witness stated earlier is that the

Journal Voucher in this particular case was supported, your Honor.*PJ GARCHITORENAOverruled, may answer.WITNESSA      The transaction was fully documented since we have the order of the General Manager

at that time and the order of President Marcos, your Honor.*Q   Are you saying the Order of the General Manager is an adequate basis for the movement

of money?A      Yes, your Honor, because at that time we have also a recorded liability of P27 million.*Q   We are not talking of whether or not there was a liability.  What we are saying is, is the

order of the General Manager by itself adequate with no other supporting papers, to justify the movement of funds?

A      Yes, your Honor.  The order of Mr. Luis Tabuena was based on our existing liability of P27,931,000.00, inasmuch as we have that liability and I was shown the order of

President Marcos to pay P5 million through the Office of the President, I considered the order of Mr. Luis Tabuena, the order of President Marcos and also the existing liability of P27 million sufficient to pay the amount of P5 million.  Inasmuch as there is also an escalation clause of P99.1 million, the payment of P5 million is fully covered by those existing documents.

*PJ GARCHITORENAYou keep flooding us with details we are not asking for.  We are not asking you whether or

not there was valid obligation.  We are not asking you about the escalation clause.  We are asking you whether or not this particular order of Mr. Tabuena is an adequate basis to justify the movement of funds?

WITNESSWhen we pay, your Honor, we always look for the necessary documents and at that time I

know for a fact that there was this existing liability.*PJ GARCHITORENAWhen we ask questions and when we answer them, we must listen to the question being

asked and not to whatever you wanted to say.  I know you are trying to protect yourself.  We are aware of your statement that there are all of these memoranda.

*Q   By your disbursement of such amount, you are saying that the order of Mr. Tabuena by itself is adequate?

WITNESSA      As far as I am concerned, your Honor, inasmuch as we have a liability and I was shown

the Order of President Marcos to pay PNCC through his office, I feel that the order of the General Manager, the order of President Marcos, and also the memorandum of Minister Ongpin are sufficient to cause the payment of P5 million.

*PJ GARCHITORENA*Q   This Presidential Decree which authorizes the President to transfer funds from one

department to another, is this not the one that refers to the realignment of funds insofar as the Appropriation Act is concerned?

WITNESSA      Because at that time, your Honor, I have knowledge that the President is authorized

through a Presidential Decree to transfer government funds from one office to another.*PJ GARCHITORENA*Q   Under the Appropriation Act.  Are payments of debts of the MIAA covered by the

Appropriation Act?A      I think the liability was duly recorded and appropriations to pay the amount is.....(interrupted)*PJ GARCHITORENA*Q   Tell me honestly, is your answer responsive to the question or are you just throwing

words at us in the hope that we will forget what the question is?A      No, your Honor.*Q   Are you telling us that the debts incurred by MIAA are covered by the Appropriations Act

so that the payment of this debt would be in the same level as the realignment of funds authorized the President?  Or are you telling as you did not read the Decree?

A      I was aware of that Decree, your Honor.*PJ GARCHITORENA

Mr. Estebal, will you include in your memorandum what are the Decrees authorizing this movement of funds?

ATTY. ESTEBALYes, your Honor.*PJ GARCHITORENA*Q   It is true that President Marcos was the President, but he was not an officer of the MIAA,

was he?A      No, your Honor.*Q   In fact, for purposes of internal control, you have different officers and different officials

in any company either government or private, which are supposed to check and balance each other, is it not?

A      Yes, your Honor.*Q   So that when disbursements of funds are made, they are made by authority of not only

one person alone so that nobody will restrain him?A      Yes, your Honor.*Q   These checks and balances exist in an entity so that no one person can dispose of funds

in any way he likes?A      Yes, your Honor.*Q   And in fact, the purpose for having two (2) signatories to documents and negotiable

documents is for the same purpose?A      Yes, your Honor.*PJ GARCHITORENA*Q   In other words, the co-signatories counter check each other?WITNESSA      Yes, your Honor.*Q   In your case, you would be the counter check for Mr. Tabuena?A      Yes, your Honor.*Q   In other words, even if Mr. Tabuena is the Manager, you as Financial Services Manager

and as counter signatory are in a position to tell Mr. Tabuena, “I am sorry, you are my superior but this disbursement is not proper and, therefore, I will not sign it.”, if in your opinion the disbursement is not proper?

A      Yes, your Honor.*Q   Therefore, as co-signatory, you are expected to exercise your judgment as to the

propriety of a particular transaction?A      Yes, your Honor.*Q   And this is something you know by the nature of your position and because you are a

Certified Public Accountant?A      Yes, your Honor.*AJ DEL ROSARIO*Q   You admit that the payment of P5 million and P50 million were unusual in the manner

with which they were disposed?A      Yes, your Honor.

*Q   Did you submit a written protest to the manner in which such amount was being disposed of?

A      A written protest was not made, your Honor, but I called the attention of Mr. Tabuena that since this payment was upon the order of President Marcos, then I think as President he can do things which are not ordinary.

*Q   If you did not prepare a written protest, did you at least prepare a memorandum for the record that this was an extra-ordinary transaction?

A      I called the attention of Mr. Tabuena that this was an extra-ordinary transaction and no written note, your Honor.

PJ GARCHITORENAThank you very much Mr. Peralta, you are excused. x x x.”[43]

This Court has acknowledged the right of a trial judge to question witnesses with a view to satisfying his mind upon any material point which presents itself during the trial of a case over which he presides.[44] But not only should his examination be limited to asking “clarificatory” questions,[45] the right should be sparingly and judiciously used; for the rule is that the court should stay out of it as much as possible, neither interfering nor intervening in the conduct of the trial. [46] Here, these limitations were not observed.  Hardly in fact can one avoid the impression that the Sandiganbayan had allied itself with, or to be more precise, had taken the cudgels for the prosecution in proving the case against Tabuena and Peralta when the Justices cross-examined the witnesses, their cross-examinations supplementing those made by Prosecutor Viernes and far exceeding the latter’s questions in length.  The “cold neutrality of an impartial judge” requirement of due process was certainly denied Tabuena and Peralta when the court, with its overzealousness, assumed the dual role of magistrate and advocate. In this connection, the observation made in the Dissenting Opinion to the effect that the majority of this Court was “unduly disturbed” with the number of court questions alone, is quite inaccurate.  A substantial portion of the TSN was incorporated in the majority opinion not  to focus on “numbers”  alone, but more importantly to show that the court questions were in the interest of the prosecution and which thus depart  from that common standard of fairness and impartiality.  In fact, it is very difficult to be, upon review of the records, confronted with “numbers” without necessarily realizing the partiality of the Court.  In “US v. De Sisto” (2 Cir., 1961, 289 F 2d 833), for example, a new trial was required because the trial judge, as in this case, indulged in extensive questioning of defendant and his witnesses, and the reviewing court also had to amplify on “numbers” to bolster this.  It was pointed out in the “De Sisto” case that  the judge asked 3,115 questions of all witnesses, the prosecutor asked but 1,381, defense counsel 3,330.  The judge’s questions to the defendant De Sisto totalled 306, the prosecutor’s 347, and the defense counsel’s, 201.  After referring to these figures, the court stated:

“. . . It is indeed an impressive proportion, but no such mathematical computation is of itself determinative.  However, taking all this in conjunction with the long and vigorous examination of the defendant himself by the judge, and the repeated belittling by the judge of defendant’s efforts to establish the time that Fine left the pier, we fear that in its zeal for arriving at the facts the court here conveyed to the jury too strong an impression of the court’s belief in the defendant’s probable guilt to permit the jury freely to perform its own function of independent determination  of the facts. x x x”

The majority believes that the interference by the Sandiganbayan Justices was just too excessive that it cannot be justified under the norm applied to a jury trial, or even under the standard employed in a non-jury trial where the judge is admittedly given  more leeway in propounding questions to clarify points and to elicit additional relevant evidence.  At the risk of being repetitious, we will amplify on this via some specific examples.  Based on the evidence on record, and on the admission of Tabuena himself, the P55 million was delivered to the President’s Office thru Mrs. Gimenez, in obedience to the Presidential directive.  One Sandiganbayan Justice, however, hurled the following questions to Peralta:

“AJ DEL ROSARIOQ:   Since the payment was made on January 31, 1986, and    that was  very close to the

election held in that year, did you not entertain any doubt that the amounts were  being  used for some other purposes?

ATTY. ESTEBALWith   due  respect  to  the   Honorable   Justice,   We  are            objecting  to  the  question   

on   the   ground   that   it  isimproper.AJ DEL ROSARIOI will withdraw the question.PJ GARCHITORENAWhat is the ground for impropriety?ATTY. ESTEBALThis  is   not  covered   in  the   direct  examination, and           secondly,  I don’t think

there  was any  basis, Your               Honor.PJ GARCHITORENA

Considering  the   withdrawal  of  the  question,  just  make the objection on record.”

Nothing from the preceding questions of counsels or of the court would serve as basis for this question.  How then, can this be considered even relevant?  What is the connection between the payment made to the President’s office and the then forthcoming presidential  “snap election”? In another instance, consider the following questions of Presiding Justice Garchitorena:

*PJ GARCHITORENA

*Q   Mr. Peralta, are not Journal Vouchers merely entries in the Journals to correct certain statements of accounts earlier made in the same journal?

xxx

*Q   In other words, really what you are telling us is that, a Journal Voucher is to explain a transaction was otherwise not recorded.

xxx

*Q   Therefore, when you said that a Journal Voucher here is proper, you are saying it is proper only because of the exceptional nature of the transactions?

xxx

*Q   In other words, as an Accountant, you would not normally authorize such a movement of money unless it is properly documented?

ATTY. ESTEBALWith due respect to the Honorable Presiding Justice, I think the question is misleading

because what the witness stated is...*PJ GARCHITORENABe careful in your objection because the witness understands the language you are speaking,

and therefore, you might be coaching him.ATTY. ESTEBALNo, your Honor.  I am also an accountant that is why I could say that...

*PJ GARCHITORENAPlease be simple in your objection.ATTY. ESTEBALThe question is misleading on the ground that what the witness stated earlier is that the

Journal Voucher in this particular case was supported, your Honor.*PJ GARCHITORENAOverruled, may answer.WITNESSA      The transaction was fully documented since we have the order of the General Manager

at that time and the order of President Marcos, your Honor.*Q   Are you saying the Order of the General Manager is an adequate basis for the movement

of money?*Q   We are not talking of whether or not there was a liability.  What we are saying is, is the

order of the General Manager by itself adequate with no other supporting papers, to justify the movement of funds?

*PJ GARCHITORENAYou keep flooding us with details we are not asking for.  We are not asking you whether or

not there was valid obligation.  We are not asking you about the escalation clause.  We are asking you whether or not this particular order of Mr. Tabuena is an adequate basis to justify the movement of funds?

*PJ GARCHITORENAWhen we ask questions and when we answer them, we must listen to the question being

asked and not to whatever you wanted to say.  I know you are trying to protect yourself.  We are aware of your statement that there are all of these memoranda.

*Q   By your disbursement of such amount, you are saying that the order of Mr. Tabuena by itself is adequate?

*PJ GARCHITORENA*Q   This Presidential Decree which authorizes the President to transfer funds from one

department to another, is this not the one that refers to the realignment of funds insofar as the Appropriation Act is concerned?

*PJ GARCHITORENA*Q   Under the Appropriation Act.  Are payments of debts of the MIAA covered by the

Appropriation Act?*PJ GARCHITORENA*Q   Tell me honestly, is your answer responsive to the question or are you just throwing

words at us in the hope that we will forget what the question is?xxx*Q   Are you telling us that the debts incurred by MIAA are covered by the Appropriations Act

so that the payment of this debt would be in the same level as the realignment of funds authorized the President?  Or are you telling as you did not read the Decree?

*PJ GARCHITORENAMr. Estebal, will you include in your memorandum what are the Decrees authorizing this

movement of funds?ATTY. ESTEBAL

Yes, your Honor.*PJ GARCHITORENA*Q   It is true that President Marcos was the President, but he was not an officer of the MIAA,

was he?*Q   In fact, for purposes of internal control, you have different officers and different officials

in any company either government or private, which are supposed to check and balance each other, is it not?

*Q   So that when disbursements of funds are made, they are made by authority of not only one person alone so that nobody will restrain him?

*Q   These checks and balances exist in an entity so that no one person can dispose of funds in any way he likes?

*Q   And in fact, the purpose for having two (2) signatories to documents and negotiable documents is for the same purpose?

*PJ GARCHITORENA*Q   In other words, the co-signatories counter check each other?*Q   In your case, you would be the counter check for Mr. Tabuena?*Q   In other words, even if Mr. Tabuena is the Manager, you as Financial Services Manager

and as counter signatory are in a position to tell Mr. Tabuena, “I am sorry, you are my superior but this disbursement is not proper and, therefore, I will not sign it.”, if in your opinion the disbursement is not proper?

*Q   Therefore, as co-signatory, you are expected to exercise your judgment as to the propriety of a particular transaction?

*Q   And this is something you know by the nature of your position and because you are a Certified Public Accountant?”[47]

How can these questions be considered clarificatory when they clearly border more on cross-examination questions?  Thus, the Dissenting Opinion’s focus on the distinction between the two kinds of trial to justify the Sandiganbayan’s active participation in the examination of petitioners Tabuena and Peralta and witness Monera, with due respect, appears insignificant to this case. Let it, therefore, be emphasized anew that:

“A trial judge should not participate in the examination of witnesses as to create the impression that he is allied with the prosecution.”[48]

“We doubt not that the sole motive of the learned judge was to ascertain the truth of the transaction, but it is never proper for a judge to discharge the duties of a prosecuting attorney.  However anxious a judge may be for the enforcement of the law, he should always remember that he is as much judge in behalf of the defendant accused of crime, and whose liberty is in jeopardy, as he is judge in behalf of the state, for the purpose of safeguarding the interests of society.”[49]

“Ordinarily it is not good practice for the presiding judge himself to examine witnesses at length.  The circumstances may be such in a given case as to justify the court in so doing....This court, however, has more than once said that the examination of witnesses is the more appropriate function of counsel, and the instances are rare and the conditions exceptional which will justify the presiding judge in conducting an extensive examination.  It is always embarrassing for counsel to object to what he may deem improper questions by the court.  Then, in conducting a lengthy examination, it would be almost impossible for the judge to preserve a judicial attitude.  While he is not a mere figurehead or umpire in a trial, and it is his duty to see that justice is done, he will usually not find it necessary to conduct such examinations.  The extent to which this shall be done must largely be a matter of discretion, to be determined by the circumstances of each particular case, but in so doing he must not forget the function of the judge and assume that of an advocate....”[50]

“While it is true that the manner in which a witness shall be examined is largely in the discretion of the trial judge, it must be understood that we have not adopted in this country the practice of making the presiding judge the chief inquisitor.  It is better to observe our time-honored custom of orderly judicial procedure, even at the expense of occasional delays....The judge is an important figure in the trial of a cause, and while he has the right, and it is often his duty, to question witnesses to the end that justice shall prevail, we can conceive of no other reason, for him to take the trial of the cause out of the hands of counsel.”[51]

“The examination of witnesses is the more appropriate function of counsel, and it is believed the instances are rare and the conditions exceptional in a high degree which will justify the presiding judge in entering upon and conducting an extended examination of a witness, and that the exercise of a sound discretion will seldom deem such action necessary or advisable.”[52]

“He [the judge] may properly intervene in a trial of a case to promote expedition, and prevent unnecessary waste of time, or to clear up some obscurity, but he should bear in mind that his undue interference, impatience, or participation in the examination of witnesses, or a severe attitude on his part toward witnesses, especially those who are excited or terrified by the unusual circumstances of a trial, may tend to prevent the proper presentation of the cause, or the ascertainment of the truth in respect thereto.”[53]

“The impartiality of the judge — his avoidance of the appearance of becoming the advocate of either one side or the other of the pending controversy is a fundamental and essential rule of special importance in criminal cases....”[54]

“Our courts, while never unmindful of their primary duty to administer justice, without fear or favor, and to dispose of these cases speedily and in as inexpensive a manner as is possible for the court and the parties, should refrain from showing any semblance of one-sided or more or less partial attitude in order not to create any false impression in the  minds of the litigants.  For obvious reasons, it is the bounden duty of all to strive for the preservation of the people’s faith in our courts.”[55]

“Time and again this Court has declared that due process requires no less than the cold neutrality of an impartial judge.  Bolstering this requirement, we have added that the judge must not only be impartial but must also appear to be impartial, to give added assurance to the parties that his decision will be just.  The parties are entitled to no less than this, as a minimum guaranty of due process.”[56]

We are well aware of the fear entertained by some that this decision may set a dangerous precedent in that those guilty of enriching themselves at the expense of the public would be able to escape criminal liability by the mere expedient of invoking “good faith”. It must never be forgotten, however, that we render justice on a case to case basis, always in consideration of the evidence that is presented. Thus, where the evidence warrants an acquittal, as in this case, we are mandated not only by the dictates of law but likewise of conscience to grant the same. On the other hand, it does not follow that all those similarly accused will necessarily be acquitted upon reliance on this case as a precedent. For the decision in this case to be a precedent, the peculiar circumstances and the evidence that led to the petitioner’s acquittal must also be present in subsequent cases.

Furthermore, as between a mere apprehension of a “dangerous precedent”  and an actual violation of constitutionally enshrined rights, it is definitely the latter that merits our immediate attention. For the most dangerous precedent arises when we allow ourselves to be carried away by such fears so that it becomes lawful to sacrifice the rights of an accused to calm the fearful. In our eagerness to bring to justice the malefactors of the Marcos regime, we must not succumb to the temptation to commit the greatest injustice of visiting the sins of the wrongdoers upon an innocent.

WHEREFORE, in view of the foregoing, herein petitioners Luis A. Tabuena and Adolfo M. Peralta are hereby ACQUITTED of the crime of malversation as defined and penalized under Article 217 of the Revised Penal Code.  The Sandiganbayan Decision of October 12, 1990 and the Resolution dated December 20, 1991 are REVERSED and SET ASIDE.

SO ORDERED.Narvasa, C.J., Regalado, Bellosillo, Vitug, Kapunan, Mendoza, and Torres, JJ., concur.

Padilla, Davide, Romero, Puno, and Panganiban, JJ., dissent.Hermosisima, Jr., J., took no part being a signatory to SB decision.

[1] Taken under Section 7 of P.D. 1606, as amended (the Sandiganbayan Law), Section 1, Rule XIX of the Revised Rules of the Sandiganbayan and Rule 45 of the Rules of Court.   The petitions were ordered consolidated by the Court in an En Banc Resolution dated October 1, 1992.

[2] Promulgated on October 22, 1990; Rendered by the First Division then composed of Justices Garchitorena (ponente), Hermosisima (now  Associate Justice of this Court) and Del Rosario.

[3] Promulgated on January 10, 1992.[4] Records, Vol. I, p. 26.[5] Records, Vol. I, pp. 119-120.[6] Tabuena avers that the Sandiganbayan:“AErred and committed reviewable error in ruling that petitioner’s withdrawal of the P55 Million was not for a lawful purpose or for a lawful debt.  In the process, the Sandiganbayan clearly ignored several pieces of evidence submitted by petitioner, and instead misapprehended the full import of the Ongpin Memorandum (Exh. “2”, as attachment of Annex “I”), to which the Marcos order to pay referred (Exh. “1”, attachment to Annex “I”).  In so concluding, the Sandiganbayan laid its conclusions open to review as its judgment is in effect based on misapprehension of facts (Cruz vs. Sosing, L-4875, November 27, 1953); and in ignoring several material pieces of evidence abused its discretion (Buyco vs. People, 51 OG 7927).BErred and committed reviewable error in ruling that the Ongpin Memorandum (Exh. “2” and “2-A”, See Annex “I”), and the Marcos approval thereof (Exh. “1”, id.) did not support the withdrawal and payment of monies by petitioner.  In so concluding, the Sandiganbayan again clearly misapprehended the Ongpin and Marcos Memoranda, and the ledger of PNCC.CErred and committed reviewable error in ruling that petitioner was in bad faith when he complied with the presidential order to pay; in thus concluding the Sandiganbayan indulged in speculations and conjectures (Joaquin vs. Navarro, 93 Phil. 257), or otherwise went beyond the issues (Evangelista vs. Alco, L-11139, April 23, 1958); the Sandiganbayan also erred in not ruling that petitioner is entitled to justifying circumstance under Par. 6, Art. 11, and/or the exempting circumstance provided under Pars. 5 and 6 of Art. 12 of the Revised Penal Code.DErred and committed reviewable error in ruling that petitioner was unable to account for the money.  In so doing, the Sandiganbayan contradicted the ruling in U.S. vs. Catolico, 18 Phil. 504.  It also erred in holding petitioner accountable for acts not charged in the amended informations, and in so doing convicted him without jurisdiction.EErred  and committed reviewable error in ruling that petitioner was not entitled to immunity as provided by Sec. 17, Article VII of the 1973 Constitution.  The Sandiganbayan therefore had no jurisdiction to try the cases.FErred and committed reviewable error in ruling that proof beyond reasonable doubt of petitioner’s guilt was submitted by the prosecution.  In so doing, the Sandiganbayan wrongly shifted the burden of proof and denied petitioner the benefits of the presumption of innocence, of Secs. 1 and 2, Rule 131, and the absence of demand under the last paragraph of Art. 217 of the Revised Penal Code.”Peralta for his part claim that:“1.          Respondent court grossly and seriously erred in convicting herein accused despite the absence of proof that he allegedly converted the funds withdrawn to his own personal benefit as charged in the information in glaring violation of his basic constitutional right to be presumed innocent.“2.          Respondent also grossly erred in convicting herein accused on the basis of mere assumptions, conjectures and inferences devoid of factual basis in another court likewise grossly and seriously erred in convicting herein accused for  a crime not charged in the information again in

violation of another constitutional right, that is the right to be informed of the accusation or right to due process.“3.          Respondent court serious and glaring violation of his right to be presumed innocent until his guilt is established by proof beyond reasonable doubt.“4.          Respondent court finally erred in refusing to recognize the applicability of the immunity

provision embodied in the Constitution and of the justifying circumstance of obedience  to a lawful order as valid defenses in this case.”

[7] Citing PNB v. Tugab, 66 Phil. 583 and People v. Pascua, 71 O.G. 2474.[8] Citing Tubb v. People, 101 Phil. 114.[9] 197 SCRA 94.[10] 18 Phil. 504.[11] 24 Phil. 230.[12] 47 Phil. 48.[13] Lewis v. People, 99 Colo. 102, 60 Pac. [2d] 1089; Lawver v. State, 221 Ind. 101, 46 N.E. [2d] 592;

State v. Schmidt, 72 N. Dak. 719, 10 N.W. [2d] 868.  Underhill’s Criminal Evidence, 5th Ed., Book 3, p. 1421.

[14] Federal Lindgren v. United States, 260 Fed. 772.  Underhill, ibid.[15] Section 8, Article VII of the 1973 Constitution provides:“The President shall have control of all ministries.”[16] No. 6, Article II, Revised Penal Code.[17] Sandiganbayan Decision, pp. 37-38.[18] Sandiganbayan Decision, p. 41.[19]TSN, March 17, 1989, p. 7; Vol. III, Records, p. 409.[20] TSN, March 17, 1989, p. 8; Vol. III, Records, p. 410.[21] TSN, March 17, 1989, p. 10; Vol. III, Records, p. 412.[22] Gregorio, Fundamentals of Criminal Law, 1988 8th Ed., p. 59.[23] 78 Phil. 67.

[24] Padilla, Revised Penal Code, Book One, Vol. I, 7th Ed. 1974., p. 248. See also:  Aquino, The Revised Penal Code, Vol. I, 1987 Ed., p. 207.  In the very words of the Court in the “Nassif”  case:

“El mero acto de escribir un empleado de la categoria del recurrente, en el Exhibit B, la palabra “sold,” por orden de su principal que le paga el sueldo, sin prueba alguna de dolo o malicia de su parte, no crea por si solo ninguna responsabilidad.  Si antes de insertar dicha palabra en el referido documento, o al tiempo de hacerlo, el recurrente hubiese sabido o sospechado de alguna  manera que era para justificar un acto impropio de su principal, cosa que, por cierto, no se ha probado, ni puede desprenderse de la decision impugnada, indudablemente podria hacersele responsable a dicho recurrente, de la falsificacion cometida, si no como coautor, por lo menos como complice.  Todo esto y la circunstancia justificativa invocada por el recurrente, eximen a este de toda responsabilidad.”

[25] Decision, p. 45.[26] 145 SCRA 435.[27] Supra.[28] Sandiganbayan Decision, p. 50.

[29] People v. Fabian, No. 10790-CR, March 12, 1973.  69 O.G. 12150, No. 53.[30] 18 Phil. 428.[31] 197 SCRA 262.[32] Supra, p. 431.[33] Supra, p. 273.[34] Development Bank of the Philippines v. Pundogar, 218 SCRA 118, 163.[35] People v. Exala, Dissenting Opinion, 221 SCRA 494, 503[36] People v. Olfindo, 47 Phil. 1, citing U.S. v. Abijan, 1 Phil. 83; People v. Borbano, 76 Phil. 703;

Perez v. Court of Appeals, 127 SCRA 636.[37] See TSN of March 17, 1989, Records, Vol. III, pp. 408-423.[38] See pp. 1-27 TSN of May 2, 1990, Records, Vol. III, pp. 439-465.[39] See pp. 32-53 of TSN, of May 2, 1990, Records, Vol.  III, pp. 470-490.[40] Confrontation.--Confrontation consists of confronting the witness with damaging facts which he cannot deny and which are inconsistent with his evidence.  It is a destructive technique, but when it fails to destroy it may still succeed in weakening. Probing.--Probing consists of inquiring thoroughly into the details of the story to discover the flaws.  Insinuation.--Insinuation consists of leading or forcing the witness by adding facts at one point and

modifying details at another, to give a version of his evidence which is more favorable to the other side.  The Technique of Advocacy, by John H. Munkman, pp. 66-67; p. 75; pp. 91-92.

[41] TSN, March 17, 1989, pp. 11-21; Records, Vol. III, pp. 413-423.[42] TSN, May 2, 1990, pp. 11-27; Records, Vol. III, pp. 449-465.[43] TSN, May 2, 1990, pp. 35-53; Records, Vol. III, pp. 473-490.[44] US v. Hudieres, 27 Phil. 45; US v. Lim Kui, 35 Phil. 504; US v. Binayao, 35 Phil. 23.[45] People v. Opida, 142 SCRA 295.[46] York v. US, 299 Fed. 778.[47] TSN, May 2, 1990, pp. 35-53; Records, Vol. III, pp. 473-490.[48] People v. Opida, supra.[49] Murphy v. State, 13 Ga. App. 431, 79 S.E. 228.[50] People v. Bernstein, 250 Ill. 63, 95 N.E. 50.[51] Dreyer v. Ershowsky, 156 App. Div. 27, 140 N.Y. Supp. 819.[52] Dunn v. People, 172 Ill. 582, 50 N.E. 137.[53] Com. v. Myma, 278 Pa. 505, 123 Atl. 786.[54] Adler v. US, 104 C.C.A. 608, 108 Fed. 464.[55] Campaner v. Alano, CA-G.R. No. 2558-R, December 15, 1948.[56] People v. Opida, supra.

THIRD DIVISION

[G.R. No. 140665.  November 13, 2000]

VICTOR TING “SENG DEE” and EMILY CHAN-AZAJAR, petitioners, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES,respondents.

D E C I S I O NMELO, J.:

Before us is a petition for certiorari under Rule 45 seeking the reversal of the February 12, 1999 decision of the Court of Appeals which affirmed that of the Regional Trial Court of the National Capital Judicial Region (Manila, Branch 45) finding petitioners guilty of seven (7) counts of violation of Batas Pambansa Blg. 22.

Petitioners’ version of the background events is as follows:From 1991 to 1992, Juliet Ting “Chan Sioc Hiu” obtained loans, in the aggregate amount of

P2,750,000.00, from private complainant Josefina K. Tagle for use in Juliet’s furniture business.  As payment thereof, Juliet issued eleven (11) post-dated checks which, upon maturity, were dishonored for reasons of “Closed Account” or “Drawn Against Insufficient Funds.” Juliet was subsequently prosecuted for violation of Batas Pambansa Blg. 22.

Due to her financial difficulties, Juliet requested her husband Victor Ting “Seng Dee” and her sister Emily Chan-Azajar (petitioners herein) to take over her furniture business, including the obligations appurtenant thereto.  Agreeing to Juliet’s request, petitioners issued nineteen (19) checks in replacement of the eleven (11) checks earlier issued by Juliet. The planned take-over, however, never materialized since the Naga Hope Christian School, petitioner Emily Chan-Azajar’s employer in Naga, refused to let her resign to attend to her sister’s business.  Since the planned take-over did not take place, petitioners requested Juliet to reassume her obligation to private complainant Tagle by replacing the checks they had previously issued to the latter.  Thus, Juliet replaced the nineteen (19) checks issued by petitioners with twenty-three (23) Far East Bank checks in favor of Tagle.  Petitioners then requested private complainant Tagle to return the nineteen (19) checks they had issued to her.  Instead of returning the checks, Tagle deposited seven of the checks with MetroBank where they were dishonored for being “Drawn Against Insufficient Funds.”

On the other hand, private complainant Tagle alleged that sometime in April 1993, petitioners obtained a loan of P950,000.00 from her, issuing several post-dated checks in payment thereof.   When the checks were deposited by Tagle with MetroBank, they were dishonored for having been drawn against insufficient funds. Tagle alleged that despite verbal and written demands, petitioners failed to pay her the value of the dishonored checks.

Consequently, seven informations for violation of Batas Pambansa Blg. 22 were filed against petitioners.  Said informations are similarly worded except with respect to the check number, the amount involved, and the date the check was issued.  The information in Criminal Case No. 94-131945 (the other cases are Criminal Case No. 94-131946, Criminal Case No. 94-131947, Criminal Case No. 94-131948, Criminal Case No. 94-131949, Criminal Case No. 94-131950, and Criminal Case No. 94-131951) charged:

That sometime prior to May 27, 1993, in the City of Manila, Philippines, the said accused, conspiring and confederating together and mutually helping each other, did then and there wilfully, unlawfully and feloniously make or draw and issue to JOSEPHINE K. TAGLE, to apply on account or for value Producers Bank of the Philippines, Check No. 946072 dated May 27, 1993 payable to CASH in the amount of P250,000.00 said accused well knowing that at the time of issue they did not have sufficient funds in or credit with the drawee bank for payment of such check in full upon its presentment, which check when presented for payment within ninety (90) days from the date thereof, was subsequently dishonored by the drawee bank for Drawn Against Insufficient Funds and despite receipt of notice of such dishonor, said accused failed to pay said JOSEFINA K. TAGLE the amount of the check or to make arrangements for full payment of the same within five (5) banking days after receiving said notice.

(p. 2, Original Records.)

Criminal Cases No. 94-131945 to 94-131951 were consolidated and jointly tried. When arraigned, petitioners, assisted by counsel, pleaded not guilty.  During trial, the prosecution presented only one

witness, the private complainant, the testimony of Producer’s Bank representative Ferdinand Lazo being dispensed with after counsel for petitioners admitted the dishonor of the checks subject matter of the action.

On March 16, 1995, the trial court found petitioners guilty of violating Batas Pambansa Blg. 22 in each of the seven cases, disposing as follows:

WHEREFORE, in view of the foregoing, accused VICTOR TING and EMILY CHAN AZAJAR are hereby found “GUILTY” beyond reasonable doubt of all the charges contained in Criminal Case Nos. 94-131945; 94-131946; 94-131947; 94-131948; 94-131949; 94-131950 and 94-131951 and for each count, they are hereby sentenced to suffer the penalty of one (1) year imprisonment; to pay Josefina K. Tagle the total amount of P950,000.00; and to pay the cost.

(p. 294, Rollo.)

Aggrieved, petitioners filed an appeal with the Court of Appeals which was docketed therein as C.A.-G.R. No. 18054. However, the appellate court, on February 12, 1999, affirmed.  Petitioners’ motion for reconsideration was, likewise, denied for lack of merit.  Hence, the instant petition.

Petitioners claim that the Court of Appeals erred in affirming the decision of the trial court, given the absence of proof beyond reasonable doubt or in the presence of facts creating reasonable doubt.

The petition has merit.Section 1 of Batas Pambansa Blg. 22, otherwise known as the Bouncing Checks Law, provides:

Section 1. Checks without sufficient funds. — Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason,  ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more double the amount of the check which fine shall in no case exceed Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

For a violation of Batas Pambansa Blg. 22 to be committed, the following elements must be present:

(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 there are

no sufficient funds in or credit with the drawee bank for the payment of such check in full upon is 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 (Sycip, Jr. vs. CA, G.R. No. 125059, March 17, 2000).

An analysis of the evidence presented, however, shows that not all the aforementioned elements have been established by the prosecution beyond reasonable doubt.

That the seven checks in question were issued by petitioners is beyond dispute.  Not only were the dishonored checks presented in court, but petitioners even admitted signing the checks and issuing them to private complainant.  From the evidence on record, it is clear that petitioners signed and issued the seven checks in question.

That the checks were dishonored is also clearly established.  Section 3 of Batas Pambansa Blg. 22 provides that “the introduction in evidence of any unpaid and dishonored check, having the drawee’s refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped, or attached by the drawee on such dishonored check.” In the instant case, the fact of the checks’ dishonor is sufficiently shown by the return slips issued by MetroBank, the depository bank, stating that the checks had been returned for the reason “DAIF — Drawn Against Insufficient Funds.” Not only are these check return slips prima facie evidence that the drawee bank dishonored the checks, but the defense did not present any evidence to rebut these documents.  In fact, counsel for petitioners even admitted the fact of the checks’ dishonor, agreeing to dispense with the presentation of the bank representative who was supposed to prove the fact of dishonor of said checks (p. 162, Rollo.).

However, for liability to attach under Batas Pambansa Blg. 22, it is not enough that the prosecution establishes that a check was issued and that the same was subsequently dishonored. The prosecution must also prove the second element, that is, it must further show that the issuer, at the time of the check’s issuance, had knowledge that he did not have enough funds or credit in the bank for payment thereof upon its presentment.  Since the second element involves a state of mind which is difficult to verify, Section 2 of Batas Pambansa Blg. 22 creates a presumption juris tantum that the second element prima facie exists when the first and third elements of the offense are present (Magno v. People, 210 SCRA 471 [1992]).  Section 2 provides:

Section 2. Evidence of knowledge of insufficient funds.— The making, drawing, and issuance of a check payment of which is refused by the drawee because of insufficient funds or credit with such bank, when presented within ninety days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.”

In truth, this Court declared in King v. People (G.R. No. 131540, December 2, 1999) that “the prima facie presumption arises when the check is issued.  But the law also provides that the presumption does not arise when the issuer pays the amount of the check or makes arrangement for its payment ‘within five banking days after receiving notice that such check has not been paid by the drawee.’ Verily, BP 22 gives the accused an opportunity to satisfy the amount indicated in the check and thus avert prosecution… This opportunity, however, can be used only upon receipt by the accused of a notice of dishonor.” Thus, the presumption that the issuer had knowledge of the insufficiency of funds is brought into existence only after it is proved that the issuer had received a notice of dishonor and that, within five days from receipt thereof, he failed to pay the amount of the check or to make arrangement for its payment.

King v. People, decided by this Division, involves a set of facts similar to the case at bar.  In said case, the accused therein was proven to have issued eleven checks, all of which were duly filled up and signed by her.  It was also clearly established that these eleven checks were dishonored, as shown by the checks themselves which were stamped “ACCOUNT CLOSED” and further supported by the return tickets issued by PCI Bank stating that the checks had been dishonored.  Yet, even if the prosecution had already established the issuance of the checks and their subsequent dishonor, this Court still required the prosecution to show that the issuer knew of the insufficiency of funds by proving that he or she received a notice of dishonor and, within five banking days thereafter, failed to satisfy the amount of the check or make arrangement for its payment.

Moreover, in Lina Lim Lao v. CA (274 SCRA 572 [1997]), we emphasized that “the full payment of the amount appearing in the check within five banking days from notice of dishonor is a ‘complete defense.’ The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution.  Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner.  Petitioner has a right to demand — and the basic postulate

of fairness require — that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under BP 22.”

To prove that petitioners received a notice of dishonor, the prosecution presented a copy of the demand letter allegedly sent to petitioners through registered mail and its corresponding registry receipt.  Private complainant Josefina Tagle, the sole witness for the prosecution, testified thus:

Q:    Now, when these seven (7) checks bounced for insufficiency of funds, what step did you take?A:     I demanded the return of my money from them.Q:    Now, what was the reply of the two accused?A:     They kept on promising that they will pay but up to now they have not paid any single

centavo.Q:    What other step did you take?A:     I requested my lawyer to write a demand letter.Q:    And that demand letter was sent to the accused?A:     Yes, Sir.Q:    In what manner?A:     By registered mail.Q:    Now, was that demand letter received by the two accused?A:     Yes, Sir.Q:    What is your evidence?A:     The return card.Q:    If you are shown anew the copy of the demand letter which is already marked as Exhibit B,

would you be able to recognize the same?A:     Yes, Sir.Q:    Is that the one that you are referring to?A:     Yes, Sir.Q:    How about the return card, is that correct?A:     Yes, Sir, this is the one.Q:    Now, upon receipt of this letter by the two accused, did the two accused pay the amount of the

said check?A:     No, Sir.Q:    So what did you do next?A:     I told my lawyer to file charges against them.Q:    You mean the present charge?A:     Yes, Sir.Atty. Acuesta:         That is all, Your Honor.

(TSN, Aug. 24, 1994, p. 8-9.)

Aside from the above testimony, no other reference was made to the demand letter by the prosecution.  As can be noticed from the above exchange, the prosecution alleged that the demand

letter had been sent by mail.  To prove mailing, it presented a copy of the demand letter as well as the registry return receipt.  However, no attempt was made to show that the demand letter was indeed sent through registered mail nor was the signature on the registry return receipt authenticated or identified.  It cannot even be gleaned from the testimony of private complainant as to who sent the demand letter and when the same was sent.  In fact, the prosecution seems to have presumed that the registry return receipt was proof enough that the demand letter was sent through registered mail and that the same was actually received by petitioners or their agents.

As adverted to earlier, it is necessary in cases for violation of Batas Pambansa Blg. 22, that the prosecution prove that the issuer had received a notice of dishonor.  It is a general rule that when service of notice is an issue, the person alleging that the notice was served must prove the fact of service (58 Am Jur 2d, Notice, § 45).  The burden of proving notice rests upon the party asserting its existence.  Now, ordinarily, preponderance of evidence is sufficient to prove notice.  In criminal cases, however, the quantum of proof required is proof beyond reasonable doubt.  Hence, for Batas Pambansa Blg. 22 cases, there should be clear proof of notice.  Moreover, it is a general rule that, when service of a notice is sought to be made by mail, it should appear that the conditions on which the validity of such service depends had existence, otherwise the evidence is insufficient to establish the fact of service (C.J.S., Notice, § 18).  In the instant case, the prosecution did not present proof that the demand letter was sent through registered mail, relying as it did only on the registry return receipt.  In civil cases, service made through registered mail is proved by the registry receipt issued by the mailing office and an affidavit of the person mailing of facts showing compliance with Section 7 of Rule 13 (See Section 13, Rule 13, 1997 Rules of Civil Procedure).  If, in addition to the registry receipt, it is required in civil cases that an affidavit of mailing as proof of service be presented, then with more reason should we hold in criminal cases that a registry receipt alone is insufficient as proof of mailing.  In the instant case, the prosecution failed to present the testimony, or at least the affidavit, of the person mailing that, indeed, the demand letter was sent.

Moreover, petitioners, during the pre-trial, denied having received the demand letter (p. 135, Rollo.).  Given petitioners’ denial of receipt of the demand letter, it behooved the prosecution to present proof that the demand letter was indeed sent through registered mail and that the same was received by petitioners.  This, the prosecution miserably failed to do.  Instead, it merely presented the demand letter and registry return receipt as if mere presentation of the same was equivalent to proof that some sort of mail matter was received by petitioners.  Receipts for registered letters and return receipts do not prove themselves; they must be properly authenticated in order to serve as proof of receipt of the letters (Central Trust Co. v. City of Des Moines, 218 NW 580).

Likewise, for notice by mail, it must appear that the same was served on the addressee or a duly authorized agent of the addressee.  In fact, the registry return receipt itself provides that “[a] registered article must not be delivered to anyone but the addressee, or upon the addressee’s written order, in which case the authorized agent must write the addressee’s name on the proper space and then affix legibly his own signature below it.” In the case at bar, no effort was made to show that the demand letter was received by petitioners or their agent.  All that we have on record is an illegible signature on the registry receipt as evidence that someone received the letter. As to whether this signature is that of one of the petitioners or of their authorized agent remains a mystery.  From the registry receipt alone, it is possible that petitioners or their authorized agent did receive the demand letter.  Possibilities, however, cannot replace proof beyond reasonable doubt.  There being insufficient proof that petitioners received notice that their checks had been dishonored, the presumption that they knew of the insufficiency of the funds therefor cannot arise.

As we stated in Savage v. Taypin (G.R. No. 134217, May 11, 2000), “penal statutes must be strictly construed against the State and liberally in favor of the accused.” Likewise, the prosecution may not rely on the weakness of the evidence for the defense to make up for its own blunders in prosecuting an offense.  Having failed to prove all the elements of the offense, petitioners may not thus be convicted for violation of Batas Pambansa Blg. 22.

That petitioners are civilly liable to private complainant is also doubtful.  Private complainant claims that petitioners borrowed Nine Hundred Fifty Thousand (P950,000.00) Pesos from her on or about the end of April 1993, in payment of which petitioners issued several post-dated checks in her favor.  The seven checks issued by petitioners as payment for the amount borrowed add up to P950,000.00.  If private complainant is the businesswoman that she claims to be, she should be collecting interest on the loan she granted to petitioners. In other words, the amount to be repaid by petitioners should be more than P950,000.00, to account for interest on the loan.  The checks issued by petitioners, however, do not provide for interest.  It is thus more credible that the seven checks

involved in this case form part of nineteen checks issued to replace the checks issued by Juliet Ting to private complainant.  This conclusion is bolstered by private complainant’s admission in her reply-affidavit that more than seven checks were issued by petitioners (p. 11, Original Records). In said reply-affidavit, private complainant states that “respondents issued and delivered to me in Manila several checks, which partially include their seven (7) bouncing checks herein.  I say ‘partially’ because I will have to file additional bouncing check cases against them, as these other checks likewise bounced.” Furthermore, in the same reply-affidavit, private complainant claims that the checks in question were not replaced, allegedly because the replacement checks must first be cleared, which did not happen in this case.  By implication, had the 23 Far East Bank checks issued by Juliet Ting to replace the nineteen checks issued by petitioners been cleared, then private complainant would have considered the checks in question as having been replaced.  This only supports our conclusion that it was Juliet Ting who owed money to private complainant, not petitioners.

Moreover, the original debtor Juliet Ting was convicted by the Regional Trial Court of Manila in Criminal Cases 93-126581-91 for eleven counts of violation of Batas Pambansa Blg. 22.  These eleven bouncing check cases involved the same obligation being sued upon by private complainant Tagle herein.  The trial court expressly acknowledged in said cases that nineteen (19) checks were issued by petitioners as payment for Juliet Ting’s obligation.  In its August 7, 1997 decision convicting Juliet Ting for violation of Batas Pambansa Blg. 22, the trial court declared that “to cover the additional loans, accused (Juliet Ting) delivered 19 post-dated checks issued by Victor Ting and Emily Azajar (p. 55, Rollo.).” The trial court’s decision further provides:

Since she could not fund the other checks (Exhs. B to K), she replaced the same with 19 post-dated checks of her husband Victor Ting and her sister Emily Azajar totaling P2,450,000.00. They issued the checks as they would take over her furniture business.  The intended partnership of Victor and Emily was aborted as the latter was not allowed to resign from her teaching post in Naga City.  She then replaced the checks issued by Victor and Emily with her own checks – 23 FEB post-dated checks per list (Exh. 9) prepared by Suzanne Azajar.

Despite receipt of the replacement checks, complainant refused to return the checks of Victor and Emily and even filed cases against them.

(p. 56, Rollo.)

Not having borrowed the amount of Nine Hundred Fifty Thousand (P950,000.00) from private complainant, petitioners may not thus be held liable therefor.

WHEREFORE, premises considered, the instant petition is GRANTED and the assailed decision of the Court of Appeals dated February 12, 1999 REVERSED and SET ASIDE.  Petitioners Victor Ting “Seng Dee” and Emily Chan-Azajar are hereby ACQUITTED of the charges against them for violation of Batas Pambansa Blg. 22, for lack of sufficient evidence to prove the offenses charged beyond reasonable doubt.  No special pronouncement is made as to costs.

SO ORDERED.Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.

G.R. No. 144887             November 17, 2004

ALFREDO RIGOR, petitioner, vs.PEOPLE OF THE PHILIPPINES, respondent.

D E C I S I O N

AZCUNA, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals, in CA-G.R. CR No. 18855, which affirmed the decision of the Regional Trial Court of Pasig, Branch 163, in Criminal Case No. 86025, convicting petitioner Alfredo Rigor of violation of Batas Pambansa Blg. 22 (the Bouncing Checks Law), and imposing upon him the penalty of imprisonment for six (6) months and ordering him to restitute to the Rural Bank of San Juan the sum of P500,000 and to pay the costs.

The Information1 against petitioner reads:

That on or about the 16th day of November 1989 in the Municipality of San Juan, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did then and there willfully, unlawfully and feloniously make or draw and issue to Rural Bank of San Juan, Inc. thru its loan officer Carlos N. Garcia, a postdated check to apply on account or for value the check described below:

Check No. : 165476

Drawn against : Associated Bank, Tarlac Branch

In the Amount of : P500,000.00

Dated : February 16, 1990

Payable to : Rural Bank of San Juan

said accused well knowing that at the time of issue on 16 November 1989, he has already insufficient funds or credit with the drawee bank for the payment in full of the face amount of such check and that as of 2 February 1990 his bank accounts were already closed and that check when presented for payment from and after the date thereof, was subsequently dishonored for the reason "Account Closed" and despite receipt of notice of such dishonor, the accused failed to pay said payee the face amount of said check or to make arrangement for full payment thereof during the period of not less than five (5) banking days after receiving notice.

When arraigned, petitioner pleaded not guilty. Thereafter, trial on the merits ensued.

The facts, as narrated by the Court of Appeals, are as follows:

The prosecution evidence was furnished by witnesses Edmarcos Basangan of Rural Bank of San Juan (RBSJ) and Esteban Pasion, employee of the Associated Bank. It was shown that on November 16, 1989, appellant (petitioner herein) applied for a commercial loan from the Rural Bank of San Juan, Inc., at N. Domingo St., San Juan, Metro Manila in the sum of P500,000.00 (Exh. "A"). He signed a promissory note stating that an interest of 24% per annum from its date will be charged on the loan (Exh. "B"). The loan was approved by RBSJ’s Bank Manager Melquecedes de Guzman and Controller Agustin Uy. A cashier’s check with RBSJ No. 2023424 in the amount of P487,000.00, net proceeds of the loan, was issued to appellant (Exh. "C"). Appellant endorsed, then encashed the check with RBSJ Teller Eleneth Cruz, who stamped thereon the word "paid" (Exh. "C-4"). After appellant received the proceeds, he issued an undated check, Associated Bank Check No. 165476, Tarlac Branch, in the amount of P500,000, payable to RBSJ (Exh. "D").

It was not the bank policy for a borrower to apply for a loan, obtain its approval and its proceeds on the same day. Appellant’s case was a special one considering that he is the "kumpare" of the President of RBSJ and he is well-known to all the bank’s directors since he, like them, comes from Tarlac.

Appellant failed to pay his loan upon its maturity on December 16, 1989. He personally asked de Guzman for a two-month extension and advised RBSJ to date to February 16, 1990 his Associated Bank check no. 165476. Failing anew to pay, he asked for another two-month extension or up to April 16, 1990. Both requests de Guzman granted. On April 16, 1990, appellant still failed to pay his loan. Basangan and his co-employee, Carlos Garcia, went to Tarlac to collect from appellant the amount of the loan. Appellant’s written request for another 30-day extension was denied by de Guzman who instead, sent him a formal demand letter dated April 25, 1990.

On May 25, 1990, Associated Bank check no. 165476 was deposited with PS Bank, San Juan Branch. The check was later returned with the words "closed account" stamped on its face. Associated Bank employee PASION declared that appellant’s Current Account No. 1022-001197-9 with Associated Bank had been closed since February 2, 1990. Appellant’s balance under the bank’s statement of account as of November 16, 1989 was only P859. The most appellant had on his account was P40,000 recorded on November 19, 1989 (Exh. "K").

Basangan and Garcia, in Tarlac, advised appellant of the dishonor of his check. Appellant wrote Atty. Joselito Lim, RBSJ Chairman of the Board, about the loan and arrangements as to the schedule of his payment. His letter was referred to de Guzman, who, in turn, sent to him another demand letter dated September 17, 1990. The letter informed him of the dishonor of his check. De Guzman required him to take the necessary step for the early settlement of his obligation. He still refused to pay.

Appellant denied the charge. He claimed that on November 16, 1989, Agapito Uy and his sister Agnes Angeles proposed to him that he secure a loan from the RBSJ for P500,000. P200,000 of it will be for him and the P300,000 will go to Uy and to his sister to pay unpaid loans of borrowers in their "side banking" activities. For the approval of his loan, Uy told him that appellant can put up his four-door Mercedes Benz as collateral for the P200,000 loan. The P300,000 will have no collateral. Uy also told him the he (Uy) has complete control of the bank and his Mercedes Benz will be enough collateral for the P500,000.

Appellant agreed to the proposal. He signed a blank loan application form and a promissory note plus a chattel mortgage for his Mercedes Benz. Thereafter, he was told to come back in two days. Uy gave him two Premiere Bank checks worth P100,000 each. He gave one check to his brother Efren Rigor and the other to his sister-in-law for encashment in Tarlac. He issued to Uy a personal check for P500,000 undated. This check was deposited in the bank for encashment in the later part of May, 1990 but it bounced. When demand was made for him to pay his loan, he told Uy to get his Mercedes Benz as payment for P200,000 but Uy refused. Uy wanted him to pay the whole amount of P500,000.2

On July 8, 1994, the trial court rendered judgment against petitioner, the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, this Court finds accused Alfredo Rigor guilty beyond reasonable doubt of the crime of Violation of Section 1 of Batas Pambansa Blg. 22 and there being no mitigating or aggravating circumstance on record, imposes upon him the penalty of imprisonment for six (6) months and to restitute to the Rural Bank of San Juan the sum of P500,000.00 and to pay the costs. 3

The trial court stated the reasons for petitioner’s conviction, thus:

In the case at bar, accused admitted having issued Associated Bank Check No. 165476 in the amount of P500,000.00. the check was undated when issued. Records, however, show that it

was issued on 16 November 1989 but as it appear[s] now it is dated 16 February 1990. The probable reason must be because upon the maturity of his loan on 16 December 1989, accused asked for extension of two (2) months to pay the same. And the expiration of that two (2) months period is 16 February 1990. Nevertheless, Exhibit "K" for the prosecution including its submarkings show that the highest outstanding amount in the current account of accused with the Associated Bank, Tarlac Branch for the month of November 1989, the month Rigor issued aforesaid check, is only about P40,000.00. Hence, Rigor has no sufficient deposit in the bank to cover the amount of P500,000.00 when he issued Check No. 165476. Therefore, Rigor knowingly issued the same he having no sufficient funds in or credit with the drawee bank in violation of section 1 of [B.P.] Blg. 22.

The defense of the accused that the amount of loan he secured from the Rural Bank of San Juan is only P200,000.00 is of no moment. The fact is he admitted having issued Associated Bank Check No. 165476 in the amount of P500,000.00 and upon its deposit for encashment, the same was dishonored for reason account closed.4

Petitioner appealed his conviction to the Court of Appeals, which affirmed the trial court’s decision. The dispositive portion of the appellate court’s decision reads:

WHEREFORE, the appealed decision is AFFIRMED with the modification that the reference to lack of mitigating or aggravating circumstances should be deleted and disregarded.5

Hence, this petition for review on certiorari.

Petitioner raises the following:

1) Absent the element of knowingly issuing a worthless check entitles the petitioner to acquittal;

2) Without proof that accused actually received a notice of dishonor, a prosecution for violation of the Bouncing Checks Law cannot prosper;

3) The Pasig Court below had no jurisdiction to try and decide the case for violation of Batas Pambansa Bilang 22.6

Petitioner contends that he did not violate Batas Pambansa Bilang 22 because he told the officers of the complainant bank from the very beginning that he did not have sufficient funds in the bank; he was merely enticed by Agustin Uy, the bank’s managing director and comptroller, to obtain the instant loan where he received only P200,000, while Uy took P300,000; and his check was partly used to collateralize an accommodation in favor of Uy in the amount of P300,000.

The contention is without merit.

Petitioner is charged with violation of Section 1 of Batas Pambansa Bilang 22, thus:

SECTION 1.Checks without sufficient funds.-- Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.

The elements of the offense are: (1) Making, drawing, and issuance of any check to apply on account or for value; (2) 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) subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or dishonor of the check for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.7

As found by the Regional Trial Court and the Court of Appeals, all the aforementioned elements are present in this case.

The evidence shows that on November 16, 1989, petitioner applied8 for a loan in the amount of P500,000 with the Rural Bank of San Juan and on the same day, he issued an undated Associated Bank Check No. 1654769 worth P500,000 payable to Rural Bank of San Juan in connection with the loan, which check was later dated February 16, 1990.10 The check was thus issued to apply for value.11 This shows the presence of the first element of the offense.

The presence of the second element of the offense is shown by petitioner’s admission12 that he knew of the insufficiency of his funds in the drawee bank when he issued the check and he allegedly did not hide the fact from the officials of the Rural Bank of San Juan.

The Court of Appeals correctly ruled, thus:

x x x

Knowledge involves a state of mind difficult to establish. We hold that appellant’s admission of the insufficiency of his fund at the time he issued the check constitutes the very element of "knowledge" contemplated in Sec. 1 of BP 22. The prima facie presumption of knowledge required in Sec. 2, Ibid., does not apply because (a) the check was presented for payment only on May 25, 1990 or beyond the 90-day period, which expired on May 16, 1990, counted from the maturity date of the check on February 16, 1990 and (b) an actually admitted knowledge of a fact needs no presumption.

While it is true that if a check is presented beyond ninety (90) days from its due date, there is no more presumption of knowledge by the drawer that at the time of issue his check has no sufficient funds, the presumption in this case is supplanted by appellant’s own admission that he did not hide the fact that he had no sufficient funds for the check. In fact, it appears that when he authorized RBSJ to date his check on February 16, 1990, his current account was already closed two weeks earlier, on February 2, 1990.13

Petitioner, however, argues that since the officers of the bank knew that he did not have sufficient funds, he has not violated Batas Pambansa Bilang 22.

Assuming arguendo that the payee had knowledge that he had insufficient funds at the time he issued the check, such knowledge by the payee is immaterial as deceit is not an essential element of the offense under Batas Pambansa Bilang 22.14 The gravamen of the offense is the issuance of a bad check; hence, malice and intent in the issuance thereof are inconsequential.15

Moreover, the cited case of Magno v. Court of Appeals,16 which resulted in the acquittal of the accused therein, is inapplicable to petitioner as the facts of said case are different. In Magno, the bounced checks were issued to cover a warranty deposit in a lease contract, where the lessor-supplier was also the financier of the deposit.17 It was a modus operandi whereby the supplier of the goods is also able to sell or lease the same goods at the same time privately financing those in desperate need so they may be accommodated.18 The Court therein held:

To charge the petitioner for the refund of a "warranty deposit" which he did not withdraw as it was not his own account, it having remained with LS Finance, is to even make him pay an unjust "debt," to say the least, since petitioner did not receive the amount in question. All the while, said amount was in the safekeeping of the financing company, which is managed,

supervised and operated by the corporation officials and employees of LS Finance. Petitioner did not even know that the checks he issued were turned over by Joey Gomez to Mrs. Teng, whose operation was kept from his knowledge on her instruction. This fact alone evoke suspicion that the transaction is irregular and immoral per se, hence, she specifically requested Gomez not to divulge the source of the "warrant deposit."

It is intriguing to realize that Mrs. Teng did not want the petitioner to know that it was she who "accommodated" petitioner’s request for Joey Gomez, to source out the needed funds for the "warranty deposit." Thus it unfolds the kind of transaction that is shrouded with mystery, gimmickry and doubtful legality. It is in simple language, a scheme whereby Mrs. Teng as the supplier of the equipment in the name of her corporation, Mancor, would be able to "sell or lease" its goods as in this case, and at the same time, privately financing those who desperately need petty accommodations as this one. This modus operandi has in so many instances victimized unsuspecting businessmen, who likewise need protection from the law, by availing of the deceptively called "warranty deposit" not realizing that they also fall prey to leasing equipment under the guise of a lease purchase agreement when it is a scheme designed to skim off business clients.19

This case, however, involves an ordinary loan transaction between petitioner and the Rural Bank of San Juan wherein petitioner issued the check certainly to be applied to the payment of his loan since the check and the loan have the same value of P500,000. Whether petitioner agreed to give a portion of the proceeds of his loan to Agustin Uy, an officer of complainant bank, to finance Uy’s and his (petitioner) sister’s alleged "side-banking" activity, such agreement is immaterial to petitioner’s liability for issuing the dishonored check under Batas Pambansa Bilang 22.

Lozano v. Martinez20 states:

The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order.

People v. Nitafan21 held that to require that the agreement surrounding the issuance of checks be first looked into and thereafter exempt such issuance from the provisions of Batas Pambansa Bilang 22 on the basis of such agreement or understanding would frustrate the very purpose for which the law was enacted.

Further, the presence of the third element of the offense is shown by the fact that after the check was deposited for encashment, it was dishonored by Associated Bank for reason of "closed account" as evidenced by its Check Return Slip.22 Despite receipt of a notice of dishonor from complainant bank, petitioner failed to pay his obligation.

Petitioner next contends that he did not receive a notice of dishonor, the absence of which precludes criminal prosecution.

The contention is likewise of no merit.

The notice of dishonor of a check may be sent to the drawer or maker by the drawee bank, the holder of the check, or the offended party either by personal delivery or by registered mail.23 The notice of dishonor to the maker of a check must be in writing.24

In this case, prosecution witness Edmarcos Basangan testified that after petitioner’s check was dishonored, he and co-employee Carlos Garcia went to petitioner’s residence in Tarlac to inform him about it. Thereafter, petitioner wrote a letter dated June 28, 1990 to Atty. Joselito Lim, RBSJ chairman of the Board of Directors, proposing a manner of paying the loan. The letter was referred to the bank

manager who sent petitioner another demand letter25 dated September 17, 1990 through registered mail.26 Said letter informed petitioner of the dishonor of his check for the reason of account closed, and required him to settle his obligation, thus:

x x x

September 17, 1990

Mr. Alfredo RigorVictoria, Tarlac

Dear Mr. Rigor,

Please be informed that the check dated February 16, 1990, that you issued purportedly for the payment of your loan, which has already become due and demandable in the sum of PESOS: Five Hundred Thousand Pesos Only (P500,000.00) was dishonored on February 16, 1990 (should be May 25, 1990) for the reason Account Closed (AC).

We trust that you will take the necessary step for the early settlement of your obligation to us.

Very truly yours,

MELQUECEDES DE GUZMAN

The transcript of records27 shows that petitioner admitted knowledge of the dishonor of his check through a demand letter sent to him. Hence, petitioner cannot pretend that he did not receive a notice of dishonor of his check.

Lastly, petitioner contends that the Regional Trial Court of Pasig had no jurisdiction over this case since no proof has been offered that his check was issued, delivered, dishonored or that knowledge of insufficiency of funds occurred in the Municipality of San Juan, Metro Manila.

The contention is untenable.

As regards venue of a criminal action, Section 15, paragraph (a), of Rule 110 of the 2000 Revised Rules of Criminal Procedure, which reflects the old rule,28 provides:

Sec. 15. Place where action is to be instituted. –

(a) Subject to existing laws, the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where any of its essential ingredients occurred. (Emphasis supplied.)

Violations of Batas Pambansa Bilang 22 are categorized as transitory or continuing crimes.29 In such crimes, some acts material and essential to the crimes and requisite to their consummation occur in one municipality or territory and some in another, in which event, the court of either has jurisdiction to try the cases, it being understood that the first court taking cognizance of the case excludes the other.30 Hence, a person charged with a transitory crime may be validly tried in any municipality or territory where the offense was in part committed.31

The evidence clearly shows that the undated check was issued and delivered at the Rural Bank of San Juan, Metro Manila32 on November 16, 1989, and subsequently the check was dated February 16, 1990

thereat. On May 25, 1990, the check was deposited with PS Bank, San Juan Branch, Metro Manila.33 Thus, the Court of Appeals correctly ruled:

Violations of B.P. 22 are categorized as transitory or continuing crimes. A suit on the check can be filed in any of the places where any of the elements of the offense occurred, that is, where the check is drawn, issued, delivered or dishonored. x x x

The information at bar effectively charges San Juan as the place of drawing and issuing. The jurisdiction of courts in criminal cases is determined by the allegations of the complaint or information. Although, the check was dishonored by the drawee, Associated Bank, in its Tarlac Branch, appellant has drawn, issued and delivered it at RBSJ, San Juan. The place of issue and delivery was San Juan and knowledge, as an essential part of the offense, was also overtly manifested in San Juan. There is no question that crimes committed in November, 1989 in San Juan are triable by the RTC stationed in Pasig. In short both allegation and proof in this case sufficiently vest jurisdiction upon the RTC in Pasig City. 34

WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals, in CA-G.R. CR No. 18855, is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Carpio, JJ., concur.

Footnotes

1 Records, p. 3.

2 Rollo, pp. 28-32.

3 Supra, note 1, at 186.

4 Id. at 185-186.

5 Supra, note 2, at 45.

6 Id. at 15, 19, 20.

7 Vaca v. Court of Appeals, 298 SCRA 656, 661 (1998), citing Navarro v. Court of Appeals, 234 SCRA 639, 643-644 (1994).

8 Exh. "A," Records, p. 130.

9 Exh. "D," Records, p. 133.

10 TSN, November 17, 1993, pp. 3-14.

11 See Ngo v. People of the Philippines, G.R. No. 155815, July 14, 2004.

12 Petition, Rollo, p. 16.

13 Supra, note 2, at 35-36.

14 Cruz v.Court of Appeals, 233 SCRA 301, 309 (1994).

15 Ibid.

16 210 SCRA 471 (1992).

17 Ibasco v. Court of Appeals, 261 SCRA 449, 461 (1996).

18 Ibid.

19 Supra, note 16, at 477-478.

20 146 SCRA 323, 338 (1986).

21 215 SCRA 79, 84 (1992).

22 Exh. "G," Records, p. 137.

23 Sia v. People of the Philippines, G.R. No. 149695, April 28, 2004.

24 Ibid.

25 Exh. "I," Records, p. 139.

26 Exh. "I-2," Records, p. 140.

27 TSN, February 4, 1994, pp. 5-6.

28 The 1985 Rules on Criminal Procedure, Rule 110, Sec. 15. Place where action is to be instituted. –

(a) Subject to existing laws, in all criminal prosecutions the action shall be instituted and tried in the court of the municipality or territory wherein the offense was committed or any one of the essential ingredients thereof took place.

29 Lim v. Court of Appeals, 251 SCRA 408, 416 (1995).

30 Id. at 415-416.

31 Id. at 416.

32 TSN, September 15, 1992, pp. 19-21.

33 TSN, November 10, 1992, p. 8.

34 Supra, note 2, at 41-43.

G.R. No. 149695             April 28, 2004

WILLY G. SIA, appellee, vs.PEOPLE OF THE PHILIPPINES, appellant.

DECISION

CALLEJO, SR., J.:

On June 4, 1982, the Consolidated Orient Leasing and Finance Corporation (COLF), as Lessor, and Willy G. Sia, the sole proprietor of WGS Construction Specialists, as Lessee, executed a Lease Agreement,1 for a period of eighteen (18) months, covering construction equipments described as follows:

ONE (1) UNIT KOMATSU PAYLOADER,

JH65C MODEL, 2-3/4 cu. yd.

Chassis No.:

JH65C-0347

Engine No.: 629676

ONE (1) UNIT KOMATSU BULLDOZER MODEL D80A-12

Serial No.: D80A-12-19495

Motor No.:

NH220-0969N21515

ONE (1) UNIT YUTANI POCLAIN MODEL YS 650

Serial No.: 1283

Motor No.:

926212

Under the lease agreement, Sia was obliged to deposit with the COLF, upon the execution thereof, the amount ofP216,250.00 to guaranty the payment of, inter alia, the agreed rental of P44,980.00 a month payable in the COLF office.3 On the custody and disposition of the guaranty deposit of P216,250.00, the parties agreed, as follows:

… The Deposit shall be retained by the LESSOR as security for the faithful observance and performance by the LESSEE of the terms and conditions and stipulations in this Agreement and any renewal thereof. The Deposit shall be returned to the LESSEE at the termination of lease without any interest, less such sums which may be due to the LESSOR under the terms of this Agreement without prejudice to whatever cause of action the LESSOR may have against the LESSEE under this Agreement.

2. The provision of paragraph 1 of this Article notwithstanding, if the LESSEE is in default under any of the provisions of this Agreement including the events of Article XV, then the LESSOR may, at its option, apply the Deposit or any part thereof to claims for money or damages it may have against the LESSEE, or to arrearages in the rents and/or the Stipulated Lost Value as the LESSOR may deem necessary and, unless the LESSOR shall exercise its rights and terminate this lease hereby created under sub-paragraph 1.3 of paragraph 1 of Article XV, the LESSEE shall on written demand by the LESSOR pay to the LESSOR the full amount of the Deposit or such amount which shall cover the full amount referred to in Item 6

of the Schedule which shall serve as security and be considered the Deposit in accordance with the provisions of paragraph 1 of this Article.

3. In case the LESSEE gives the LESSOR other collaterals or securities in addition to the Deposit all of such securities or collaterals including the Deposit shall be deemed to secure all claims which are now or may hereafter be owing to the LESSOR by the LESSEE.4

The parties further agreed that, in case Sia defaulted in the payment of the agreed rentals or failed to observe the terms and conditions of the Agreement, the following provisions shall apply:

1. If the LESSEE fails to pay the rents as provided for in Article III hereof after the same becomes due and payable or any other sums and moneys due and payable under this Agreement or if the LESSEE fails to observe or perform any or all the provisions hereof, or if the LESSOR on reasonable grounds, considers the LESSEE as financially incapable of meeting its obligations herein, then the LESSOR shall, without prejudice to any pre-existing liability of the LESSEE to the LESSOR, have the right to avail of any or all of the following remedies without giving any prior notice or demand to the LESSEE;

1.1 To declare a part or the total amount of the rents and all other moneys, costs and expenses under this Agreement immediately due and payable by the LESSEE;

1.2 To take possession of the property or demand its return.

1.3 To terminate this lease and to demand from the LESSEE the full amount of the Stipulated Loss Value and to claim from the LESSEE compensation for all losses and damages including but not limited to loss of profits.

The remedies provided in sub-paragraph 1.1 and 1.2 of paragraph 1 of this Articles shall not relieve the LESSEE from any other liability under this Agreement, including but not limited to liability for damages.

2. Upon the occurrence of any of the following events, the LESSOR may, without any prior notice or demand to the LESSEE, avail of any or all of the remedies under paragraph 1 of this Article, and the effects thereof will be the same as those provided for herein:

2.1 suspension of business, bankruptcy or dissolution of the LESSEE; or

2.2 levy or attachment of all or substantially all of the assets of the LESSEE, regardless of whether or not the same affects the Property, or

2.3 assignment of or compromise affecting all or substantially all of the LESSEE’s assets to or with its creditor; or

2.4 If any judgment against the LESSEE shall remain unsatisfied for more than ten (10) days; or

2.5 If the LESSEE shall abandon the Property.5

Sia and his wife, Judy, executed a surety agreement in which they bound and obliged themselves, jointly and severally, to insure the proper and due performance of Sia’s obligations to the COLF under the lease agreement.6

Sia remitted to the COLF the agreed guaranty deposit of P216,250.00. He also issued and delivered to the COLF, upon the execution of the lease agreement in 1982, eighteen (18) postdated checks in the amount of P44,980.00 each, payable to the COLT, drawn against his account with the Rizal Commercial Banking Corporation (RCBC). Each check was to be encashed or deposited by the COLF in its account

on their respective due dates in payment of the monthly rental of the equipment.7 At the time, the bank had extended credit facilities to the petitioner.8

The COLF deposited the checks for the rentals of July to December 1992, and these checks were duly honored by the drawee bank.9 The COLF thereafter deposited, in its account, Check No. 233533 postdated January 4, 1983 for the amount of P44,980.00 in payment for the January 1983 rental of the equipment.10 This check was, however, dishonored by the drawee bank for "insufficient funds." The COLF wrote Sia on January 5, 1983, informing the latter of the dishonor of the check and requesting for the replacement thereof.11

On March 4, 1983, COLF deposited in its account Check No. 233534 postdated March 4, 1983 in the amount ofP44,980.00 in payment for the March 1983 rental.12 However, the check was, again, dishonored by the drawee bank, this time for the reason "account closed."13 On March 7, 1983, the COLF wrote Sia informing him of the dishonor of the check.14 The COLF finally decided to terminate the lease and, on March 10, 1983, wrote Sia informing him that it was terminating the lease agreement.15 Sia received the letter but did not respond.16

Despite the termination of the lease, the COLF still deposited Check No. 233535 in the amount of P44,980.00 on April 4, 1983. The check, which was drawn by Sia against his account with the RCBC in payment for the April 1983 rental, was dishonored by the drawee bank, again for the reason "account closed." On April 6, 1983, COLF once more wrote to Sia, informing him of the dishonor of the check and requesting for a replacement as soon as possible.17 The COLF did not receive any reply.

On May 17, 1983, the COLF filed a complaint for replevin and damages against Sia with the Regional Trial Court of Makati, docketed as Civil Case No. 3958. It prayed that, after due proceedings, judgment be rendered against Sia in its favor:

1. Directing the Sheriff to take over the possession and custody of the following:

One (1) Unit Komatsu Payloader JH65 C Model 2-3/4 cu. yd.

Chassis No. JH65C-0347

Engine No. 629676

One (1) Unit Bulldozer Model D80A-12 (Komatsu)

Serial No. D80A-12-19495

Motor No. NH220-0969N21515

One (1) Unit Yutani Poclain Model YS 650

Serial No. 1283

Motor No. 92621

2. Ordering defendant WGS Construction Specialists to pay the plaintiff:

(a) Accrued rental in the amount of ONE HUNDRED SEVENTY-NINE THOUSAND NINE HUNDRED TWENTY PESOS (P179,920.00);

(b) 3% of the above amount as penalty per month from January, 1983, up to the present;

(c) 30% of the above amount as attorney’s fees;

(d) The value of the property, which is FOUR HUNDRED NINETY-FOUR THOUSAND SEVEN HUNDRED EIGHTY PESOS (P494,780.00), and the incidental charges above-mentioned in case the equipment are no longer available or the same have been impaired so substantially that recovery would be futile;

(e) The costs of this suit; and

3. Ordering defendants-sureties Willy G. Sia and Judy A. Sia, jointly and severally, to pay the above-stated amounts to plaintiff in case defendant WGS Construction Specialists should fail to do so.18

On June 2, 1983, the court issued an Order in Civil Case No. 3958 granting the plaintiff’s plea for a writ of replevin. The court thereafter issued a Writ of Seizure against the plaintiff’s property with the requisite bond therefor. Sia received the complaint and summons on October 21, 1983, but failed to file an answer. On motion of the plaintiff, Sia was declared in default.19 The plaintiff adduced its evidence, ex parte, on February 8, 1984. The sheriff, however, failed to locate the equipment declared in the complaint and failed to seize and take possession thereof.20

In the meantime, the COLF charged Sia with violating Batas Pambansa (B.P.) Blg. 22 by reason of the dishonor of the checks postdated January 4, 1983, March 4, 1983 and April 4, 1983, respectively. On August 3, 1984, three Informations were filed with the RTC of Makati charging Sia with violating B.P. Blg. 22, docketed as Criminal Cases Nos. 11865, 11866, and 11867. The accusatory portions of the said Informations are as follows:

That on or about June 1982, in the Municipality of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, said accused did, then and there, willfully, unlawfully and feloniously make, draw and issue in favor of Consolidated Orient Leasing & Finance Corporation represented by Eduardo R. Alvarez, a check numbered 233532, drawn against the Rizal Commercial Banking Corporation (RCBC), a duly established domestic banking institution, in the amount of P44,980.00 Philippine Currency, dated January 4, 1983 in payment of an obligation, knowing fully well at the time of issue that he did not have any sufficient funds in the drawee bank for the payment of such check; that upon presentation of said check to the said bank for payment the same was dishonored for the reason that the drawer thereof accused Willy G. Sia did not have sufficient funds therein and despite notice of dishonor thereof, accused failed and refused and still fails and refuses to redeem or make good said check, to the damage and prejudice of the said Consolidated Orient Leasing & Finance Corporation is (sic) the aforesaid sum.

Contrary to law.

Crim. Case No. 11865

That on or about June 1982, in the Municipality of Makati, Metro-Manila, Philippines and within the jurisdiction of this Honorable court, said accused did, then and there, willfully, unlawfully and feloniously make, draw and issue in favor of Consolidated Orient Leasing & Finance Corporation represented by Eduardo R. Alvarez, a check numbered 233534 drawn against the Rizal Commercial Banking Corporation (RCBC), a duly established banking institution, in the amount of P44,980.00 Philippine Currency, dated March 4, 1983 in payment of an obligation, knowing fully well at the time of issue that he did not have any funds in the drawee bank for the payment of said check, that upon presentation of said check to the drawee bank the same was dishonored for the reason that the drawer thereof, accused Willy G. Sia did not have funds therein and despite notice of dishonor thereof, accused failed and refused and still fails and refuses to redeem or make good said check, to the damage and prejudice of the said Consolidated Orient Leasing & Finance Corporation in the aforesaid sum.

Contrary to law.

Crim. Case No. 11866

That on or about June 1982, in the Municipality of Makati, Metro-Manila, Philippines and within the jurisdiction of this Honorable Court, said accused did, then and there, willfully, unlawfully and feloniously make, draw and issue in favor of Consolidated Orient Leasing & Finance Corporation represented by Eduardo R. Alvarez, a check numbered 233535, drawn against the Rizal Commercial Banking Corporation (RCBC), a duly established domestic banking institution, in the amount of P44,980.00 Philippine Currency, dated April 4, 1983 in payment of an obligation, knowing fully well at the time of issue that he did not have any funds in the drawee bank for the payment of such check; that upon presentation of said check to said bank for payment the same was dishonor (sic) for the reason that the drawee thereof, accused Willy G. Sia did not have funds therein and despite notice of dishonor thereof, accused failed and refused and still fails and refuses to redeem or make good said check, to the damage and prejudice of the said Consolidated Orient Leasing & Finance Corporation in the aforesaid sum.

Contrary to law.

Crim. Case No. 1186721

When arraigned, Sia, assisted by counsel, entered a plea of not guilty.

The Case for Petitioner Sia

Sia testified that, upon the execution of the lease agreement in 1982, he drew and delivered to COLF eighteen (18) postdated checks drawn against his account with the RCBC, each check in the amount of P44,980.00 corresponding to the rental for the leased property.22 Every month, as each check fell due, he informed the COLF whether to deposit or encash the checks, or to apply the current deposit for the payment of the rental due.23 He made good the first six postdated checks but failed to fund the ensuing checks for January, March, and April 1983. He reasoned that his financial condition was adversely affected by the implementation of his project in Nueva Vizcaya and the RCBC had since then refused to give him credit.24 To facilitate payment of the checks, Sia then asked COLF, through its

assistant manager, Go Hong Ko, to apply his guaranty deposit for the postdated checks to cover the rentals from January 1983. Go Hong Ko told Sia that there would be no problem as his guaranty deposit of P216.250.00 was still intact and more than enough to answer for the said checks.25 Thus, Sia no longer funded his account with the drawee bank, thinking that his guaranty deposit would answer for the checks.

Sia alleged that he never received the January 5, 1983, March 7, 1983 and April 6, 1983 letters of the COLF, and that the latter never notified him that the checks postdated January 4, 1983, March 3, 1983 and April 4, 1983, respectively, were deposited with the drawee bank, and that the same were subsequently dishonored by the drawee bank. He was surprised when he learned about the charges against him for violation of B.P. Blg. 22 when he received a subpoena from the Office of the City Prosecutor of Makati, requiring him to submit his counter-affidavit to the criminal complaint of the COLF.26 Furthermore, he was not informed why his guaranty deposit was not applied to the payment of the three dishonored checks.27

In the meantime, on March 12, 1984, the RTC rendered judgment in Civil Case No. 3958, in favor of COLF, the dispositive portion of which reads, as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff as follows:

(1) Ordering defendant WGS Construction Specialists to pay plaintiff:

a) P179,920.00, representing accrued rentals;

b) 3% of the above amount as penalty per month from January, 1983, up to May 17, 1983;

c) P5,000.00 as and for attorney’s fees;

d) P494,780.00, representing the actual value of the leased property not recovered, plus interest thereon at the legal rate computed from date hereof;

e) The costs of suit.

(2) The guaranty deposit of P216,250.00 made by said defendant shall be applied to the satisfaction of the aforementioned amounts.

(3) Ordering defendants Willy G. Sia and Judy A. Sia, jointly and severally, to pay plaintiff the remaining unpaid balance of the judgment debt which defendant WGS Construction Specialists should fail to satisfy.

SO ORDERED.28

The decision became final and executory, Sia having failed to appeal the decision.

After due trial, the trial court rendered judgment, on November 17, 1995, finding Sia guilty beyond reasonable doubt of the crime charged in Criminal Cases Nos. 11865 and 11866 and acquitting him of the crime charged in Criminal Case No. 11867. The decretal portion of the decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered finding accused WILLY G. SIA GUILTY beyond reasonable doubt for violation of Batas Pambansa Bilang 22 in Criminal Cases Nos. 11865 and 11866 and is sentenced to suffer imprisonment of one (1) year and; to pay a fine of P50,000.00 for each case; and to indemnify complainant the sum of P89,900.00 with legal interest from the filing of these cases on August 31, 1984 until payment is made.

Anent Criminal Case No. 11867, for the reason aforementioned, judgment is hereby rendered ACQUITTING accused WILLY G. SIA of the crime charged.

No costs.29

Sia filed a motion for the reconsideration of the decision contending that:

I

THE DECISION OF THIS HONORABLE COURT IN CIVIL CASE NO. 3958 (REGIONAL TRIAL COURT BRANCH CXXXII) DATED MARCH 12, 1984 WHICH WAS RENDERED BEFORE THE INFORMATIONS IN THE ABOVE-ENTITLED CASES WERE FILED IN COURT CLEARLY SHOW THAT THE OBLIGATION OF THE ACCUSED WAS ALREADY SETTLED AND PAID THRU THE SECURITY DEPOSIT ALREADY MADE AND IN THE POSSESSION OF THE ALLEGED PRIVATE COMPLAINANT.

II

THE OBLIGATION, IF ANY, OF THE ACCUSED IN THE CASES AT BAR WAS ALREADY PAID OR EXTINGUISHED BY VIRTUE OF THE LAW ON COMPENSATION.

III

THE DECISION OF THIS HONORABLE COURT REQUIRING THE ACCUSED TO PAY AGAIN THE VALUE OF THE CHECKS DESPITE THE FINAL AND EXECUTED DECISION OF THIS HONORABLE

COURT IN CIVIL CASE NO. 3958 IS TANTAMOUNT TO UNJUST ENRICHMENT ON THE PART OF THE PRIVATE COMPLAINANT.

IV

THIS HONORABLE COURT HAS NO JURISDICTION TO RULE ON THE CIVIL ASPECT OF THE TWO (2) CRIMINAL CASES.30

On June 4, 1996 the Court partially granted the motion and modified its decision, as follows:

WHEREFORE, the Motion for Reconsideration is GRANTED, in so far as that portion ordering accused Willy G. Sia to indemnify the private complainant the sum of P89,900 with legal interest from the filing of these cases on August 31, 1984 until payment is made, is concerned. The Decision of this Court dated November 17, 1995 finding accused Willy G. Sia GUILTY beyond reasonable doubt for violation of Batas Pambansa Bilang 22 in Criminal Cases Nos. 11865 and 11866 and is sentenced to suffer imprisonment of one (1) year and to pay a fine of P50,000.00 for each case STANDS.

SO ORDERED.31

On appeal to the Court of Appeals, Sia (the appellant therein), ascribed the following errors to the trial court:

I

THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED’S DEPOSIT OF P216,250.00 IN THE POSSESSION OF THE PRIVATE COMPLAINANT WAS TO BE APPLIED OR COULD BE APPLIED TO THE RENTALS.

II

THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED HAD TOLD THE PRIVATE COMPLAINANT TO APPLY THE P216,250.00 TO THE PAYMENT OF THE RENTALS STARTING WITH THE MONTH OF JANUARY 1983.

III

THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED HAD ACTUALLY APPLIED THE P216,250.00 TO THE PAYMENT OF THE RENTALS FOR JANUARY AND MARCH 1983.

IV

THE TRIAL COURT ERRED IN NOT FINDING THAT THERE HAD BEEN NO NOTICE OF DISHONOR GIVEN TO THE ACCUSED.

V

THE TRIAL COURT ERRED IN FINDING THE ACCUSED GUILTY OF VIOLATING BATAS PAMBANSA BLG. 22.32

On May 31, 2001, the appellate court rendered judgment affirming the decision of the RTC, as amended, thus:

WHEREFORE, the instant appeal is hereby DISMISSED, and the decision appealed from, as modified in the order dated June 4, 1996, is hereby AFFIRMED in toto.

No pronouncement as to costs.

SO ORDERED.33

The appellate court held that it was of no moment whether the COLF notified Sia of the dishonor of the checks by letter, or if Sia failed to receive such notices. Sia admitted when he testified that he knew that his funds with the drawee bank were insufficient when the subject checks fell due, and that he failed to fund the same. The court also held that the application of Sia’s guaranty deposit to the amounts due under the subject checks was optional on the part of the COLF.

Sia, now the petitioner, comes to this Court contending as follows:

I

NOTICE OF DISHONOR IS NECESSARY IN A CRIMINAL CASE FOR VIOLATION OF BATAS PAMBANSA BLG. 22.

II

SUCH NOTICE OF DISHONOR IS ALL THE MORE NECESSARY IN THE INSTANT CASE BECAUSE THE SUBJECT CHECKS SHOULD NOT HAVE BEEN DEPOSITED BY THE PRIVATE COMPLAINANT.

III

THE PROSECUTION WAS NOT ABLE TO PROVE BEYOND REASONABLE DOUBT THAT NOTICE OF DISHONOR HAD BEEN GIVEN TO THE PETITIONER.

IV

THE PETITIONER SHOULD HAVE BEEN ACQUITTED FOR FAILURE OF THE PROSECUTION TO PROVE HIS GUILT BEYOND REASONABLE DOUBT.34

The petitioner asserts that a notice or letter informing him of the dishonor of the subject checks so as to give him a period of five (5) banking days from receipt thereof to pay the amounts of the checks, or to make arrangements with the drawee bank for the payment of the said checks are mandatory requirements. He argues that the notice or letter informing him of the dishonor of the subject checks, as well as the lapse of the five-day period, are conditions precedent, without which he cannot be convicted, much less charged under Section 1, first paragraph of B.P. Blg. 22.

The petitioner contends that the failure of the COLF or the drawee bank to notify him of the dishonor of the subject checks deprived him of a chance to pay the amounts thereof. He asserts that his admission35 did not relieve the prosecution of its burden to prove the following: (a) that the said checks were deposited by COLF in its account; (b) that the said checks were dishonored by the drawee bank either for insufficiency of funds or that his account with the said bank was already closed; (c) that the petitioner was notified in writing of the dishonor of the said checks; and, (d) that five banking days from such notice of dishonor had already elapsed, without him paying the amounts due or making arrangements with the drawee bank for the payment of the said checks. The petitioner avers that this did not amount to an admission that when he issued and delivered the subject checks to the COLF, he did not have sufficient funds in his account with the drawee bank to answer for the amounts of the checks and that he had knowledge thereof.

The petitioner further avers that there was no factual basis for his indictment for violation of Section 1, first paragraph of B.P. 22 because he and the COLF, thru Go Hong Ko, had agreed that the latter would apply his guaranty deposit of P216,250.00 to the payment of the subject checks, amounting to only P99,960.00. The petitioner cited the ruling of this Court in Ting v. Court of Appeals36 to support his plea for a reversal of the decisions of the appellate court and the trial court.

In its Comment on the petition, the Office of the Solicitor General asserts that contrary to the petitioner’s contention, the latter’s admission relieved the prosecution of its burden to prove that the petitioner had knowledge of the insufficiency of his funds in the drawee bank when he drew and issued the subject checks in 1982 to COLF. The OSG also avers that under the lease agreement, it was optional on the part of COLF to apply the petitioner’s guaranty deposit to the payment of his back rentals and the subject checks. It behooved the petitioner to fund the subject checks on due dates thereof to avoid his indictment for violation of B.P. Blg. 22.

The petition is meritorious.

Section 1, B.P. Blg. 22 under which the petitioner was charged in the RTC reads:

SECTION 1. Checks without sufficient funds. – Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the court. …

The act sought to be prevented by the law is the act of making and issuing a check with the knowledge that, at the time of issue, the drawer issuing the check does not have sufficient funds in or credit with the bank for payment and the check was subsequently dishonored upon presentment. What the law punishes is the issuance of a worthless check and not the purpose for which such check was issued nor the terms or conditions relating to its issuance.37 The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation.38 The crime is one against public order and is malum prohibitum. The law is intended to safeguard the interests of the banking system and the legitimate checking account user.39 It is not intended nor designed to coerce a debtor to pay his debt,40 nor to favor or encourage those who seek to enrich themselves through manipulation and circumvention of the purpose of the law.41

This Court has held that in criminal cases involving violations of Section 1, B.P. Blg. 22, the prosecution is burdened to prove beyond reasonable doubt the following elements:

1. The accused makes, draws or issues any check to apply to account or for value.

2. The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit; or it would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.

3. The accused knows at the time of the issuance that he or she does not have sufficient funds in, or credit with, drawee bank for the payment of the check in full upon its presentment.42

To hold a person liable, the prosecution must prove that the accused knew, at the time of issue, that he does not have sufficient funds in or credit for the full payment of such check upon its presentment. The prosecution must rely on the strength of its own evidence and not on the weakness of the evidence of the accused.43

Knowledge on the part of the drawer or maker of the insufficiency of funds or credit in the drawee bank for the payment of a check upon its presentment is an essential element of the offense. This element involves a state of the mind of the drawer or maker of the check which is difficult for the prosecution to prove. To ease the burden of the prosecution, Section 2 of B.P. Blg. 22 created a prima facie presumption of knowledge on the part of the drawer or maker of the check of the insufficiency of his fund in the drawee bank, thus:

SEC. 2. Evidence of knowledge of insufficient funds.-The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

However, for the presumption to arise, the prosecution must adduce evidence to prove the factual basis for its onset, namely, (a) the check is presented within ninety (90) days from the date of the check; (b) the drawer or maker of the check receives notice that such check has not been paid by the drawer; and, (c) the drawer or maker of the check fails to pay the holder of the check the amount due thereon, or makes arrangements for payment in full within five (5) banking days after receiving notice that such check has not been paid by the drawer. With the onset of the presumption, the burden of evidence is shifted on the drawer/maker of the check to prove that, when he issued the subject check, he had no knowledge that he had insufficient funds in the drawee bank to answer for the amount due. The notice of dishonor may be sent to the drawer or maker by the drawee bank, the holder of the check, or the offended party, either by personal delivery or by registered mail. The drawer or maker of a check has a right, under the law, to demand that a written notice of dishonor be sent to and received by him to enable him to avoid indictment for violation of B.P. Blg. 22.44

Construing Section 2 of the said law, we held in Domagsang v. Court of Appeals, et al.45 that the notice of dishonor of a check to the maker must be in writing. A mere oral notice to the drawer or maker of the dishonor of his check is not enough:

Petitioner counters that the lack of a written notice of dishonor is fatal. The Court agrees.

While, indeed, Section 2 of B.P. Blg. 22 does not state that the notice of dishonor be in writing, taken in conjunction, however, with Section 3 of the law. i.e., "that where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal," a mere oral notice or demand to pay would appear to be insufficient for conviction under the law. The Court is convinced that both the spirit and letter of the Bouncing Checks Law would require for the act to be punished thereunder not only that the accused issued a check that is dishonored, but that likewise the accused has actually been notified in writing of the fact of dishonor. The consistent rule is that penal statutes have to be construed strictly against the State and liberally in favor of the accused.46

Unless and until the drawer or maker of the check receives a written notice of dishonor of the check, or where there is no proof as to when such notice of dishonor was received by the drawer or maker, the five-day period within which the drawer or maker has to pay the amount due or made arrangements with the drawee bank for the payment of the check, cannot be determined. In such case, the prima facie presumption cannot arise.47

Emphasizing the intent of the State in providing a five-day banking period from notice of dishonor of a check within which the maker or drawer may pay the amount due or make arrangements with the drawee bank for its payment, the Court declared in Lao v. Court of Appeals:48

It has been observed that the Stat e, under this statute, actually offers the violator "a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated." This was also compared "to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability.49

If the maker or drawer pays, or makes arrangements with the drawee bank for the payment of the amount due within the five-day period from notice of the dishonor given to the drawer, it is a complete defense; the accused may no longer be indicted for violation of Section 1, B.P. Blg. 22. If he is so indicted, he may set up the payment of the amount due as a complete defense.50

In this case, the prosecution failed to prove that the COLF or the drawee bank ever sent any written notice of dishonor of the subject checks to the petitioner and that the latter received the same. The only witness presented by the prosecution to prove its case against the petitioner was Eduardo R. Alvarez, who was in charge of the COLF collection department. He testified that he signed the letters dated January 5, 198351 and July 7, 1983,52addressed to the petitioner notifying the latter of the dishonor of the subject checks. However, Alvarez admitted that, after signing the said letters, he had the same transmitted to the collection department and had no personal knowledge whether the said letters were sent to and actually received by the petitioner. The collection department merely told him that the letters were sent to the petitioner.

Q You also talk of demand letters dated January 5, March 7 and April 6, all in the year 1983, which are marked Exhibits E, F, and G, respectively. Were you the one who prepare (sic) these demand letters?

A No, sir, these were prepared and signed by our collection department.

Q And you have no actual knowledge when these demand letters were prepared by one of your department?

A No, sir, I gave instructions to prepare the demand letters.

Q Who sent these demand letters to Mr. Sia?

A The collection department was the one who sent the demand letter to Mr. Sia.

Q Why do you know that it was sent by the collection department?

A Because I gave instruction to that department.

Q Did you ask the collection department that these demand letters be sent to Mr. Sia.

A Yes, sir.

Q What did your collection department said?

A It was sent.

Q Why do you know that it was sent by your collection department?

A The collection department said the letters were sent and received by Mr. Sia.

Q This collection department simply told you that this was sent to Mr. Sia?

A Yes, sir.

Q All these demand letters?

A Yes.53

There is no evidence on record how the letters were, in fact, sent to the petitioner, whether by personal delivery or by registered mail. The COLF did not adduce in evidence the complaint for replevin and damages in Civil Case No. 3958 against the petitioner. Furthermore, the trial court did not declare in its decision that the COLF sent notices of dishonor of the subject checks to the petitioner, and that the latter received such notices of dishonor.

The trial court convicted the petitioner of the crime of violating Section 1, B.P. Blg. 22, relying principally on the petitioner’s admission that, when Check No. 233533 became due, his funds in the drawee bank were insufficient to pay for the amount of the check; that his account with the drawee bank had already been closed when COLF deposited Check No. 233534; and, that he no longer funded his account to pay for the amounts of the ensuing checks. The trial court concluded that on the basis of the said admission, there was no longer a need for the prosecution to prove that the petitioner received notices or letters notifying him of the dishonor of the subject checks after the dishonor thereof. The appellate court agreed with the trial court.

We do not agree.

Indeed, the petitioner admitted when he testified in his defense, that, on the due date of Check No. 233533, he was aware that he did not have funds in the drawee bank for the payment of the said check, and that when Check No. 233534 fell due on March 4, 1983, the bank had already closed the said account. This, however, did not amount to an admission that, when he issued the said checks in June 1982, he had known that he had no funds in the drawee bank sufficient to pay for the amounts of the checks. In fact, the petitioner testified that in 1983, he was granted credit facilities by the drawee bank and that the postdated checks he issued to the COLF for the rentals due from June to December, 1982 had been duly honored. The drawee bank subsequently closed the petitioner’s account only because the latter had suffered financial reverses.

Assuming that the petitioner had knowledge that he had insufficient funds in the drawee bank when he issued the questioned checks, he could still have paid the checks or made arrangements with the drawee bank for the payment of the said checks if he had been duly notified of their dishonor. In not sending a notice or letter of dishonor to the petitioner as required by law, the COLF deprived the petitioner of his right to avoid prosecution for violation of B.P. Blg. 22.

IN LIGHT OF THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals affirming with modifications the Decision of the Regional Trial Court in Criminal Cases Nos. 11865 and 11866 are REVERSEDand SET ASIDE. The petitioner is ACQUITTED of the crimes charged in said cases for insufficiency of evidence.

SO ORDERED.

Puno, Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

Footnotes

1 Exhibit A.

2 Exhibit 1-A.

3 Ibid.

4 Exhibit A-2 (Emphasis ours).

5 Exhibit A.

6 Records, p. 264.

7 TSN, 18 May 1995, p. 8.

8 Id. at 10-11.

9 Id. at 9.

10 Exhibit 1-A.

11 Exhibit E.

12 Exhibit D.

13 Id.

14 Exhibit F.

15 Id.

16 Id.

17 Exhibit "G."

18 Records, pp. 219-220.

19 Id. at 263.

20 Id..

21 Id. at 246-247.

22 TSN, 18 May 1995, p. 8.

23 Id. at 8-9.

24 Id. at 10-11.

25 Id. at 12-13.

26 Id. at 15-16.

27 Id. at 19-20.

28 Records, p. 226.

29 Id. at 251.

30 Id. at 253-254.

31 Id. at 277.

32 CA Rollo, pp. 42-43.

33 Id. at 119.

34 Rollo, p. 16.

35 The petitioner testified that on the due date of the first check, Check No. 233533 dated January 4, 1983, he did not have sufficient fund in the drawee bank to pay for the amount thereof; and that on the due date of the second check, Check No. 233534, his account was already closed.

36 344 SCRA 551 (2000).

37 Lagman v. People, 371 SCRA 686 (2001).

38 Lozano v. Martinez, 146 SCRA 323 (1986).

39 Griffith v. Court of Appeals, 379 SCRA 94 (2002).

40 Lozano v. Martinez, supra.

41 Griffith v. Court of Appeals, supra.

42 King v. People, 319 SCRA 654, 666 (1994).

43 Id.

44 Lao v. Court of Appeals, 274 SCRA 375 (1997).

45 347 SCRA 75 (2000).

46 Id. at 83-84.

47 Danao v. Court of Appeals, 358 SCRA 450 (2001).

48 Supra.

49 Id. at 594.

50 Id., Citing Navarro v. Court of Appeals, 234 SCRA 639 (1994).

51 Exhibit "E."

52 Exhibit "F."

53 TSN, 22 May 1985, pp. 32-34.

G.R. No. 131540 December 2, 1999

BETTY KING, petitioner, vs.PEOPLE OF THE PHILIPPINES, respondent.

 

PANGANIBAN, J.:

Under Batas Pambansa Blg. 22 (BP 22), the prosecution must prove not only that the accused issued a check that was subsequently dishonored. It must also established that the accused was actually

notified that the check was dishonored, and that he or she failed, within five banking days from receipt of the notice, to pay the holder of the check the amount due thereon or to make arrangement for its payment. Absent proof that the accused received such notice, a prosecution for violation of the Bouncing Check Law cannot prosper.

The Case

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the January 30, 1997 Decision 1 of the Court of Appeals 2 (CA) in CA-GR CR No. 18226 and its November 5, 1997Resolution 3 denying reconsideration. The CA affirmed the June 14, 1994 Decision 4 of the Regional Trial Court (RTC) of Makati, Metro Manila 5 in Criminal Case Nos. 93-3335 to 93-3345 which convicted petitioner of 11 counts of violation of BP 22, otherwise known as the Bouncing Check Law.

On April 28, 1993, Second Assistant Provincial Prosecutor Jaime A. Adoc filed against petitioner eleven separate Informations, 6 which are identically worded, except for the check number, the amount and the date, as follows:

That in or about the month of January, 1992 in the Municipality of Las Piñas, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did, then and there willfully, unlawfully and feloniously make or draw and issue to EILEEN FERNANDEZ herein represented by ________ to apply on account or for value the check described below:

EQUITABLE BANK

Check No. 021711

In the amount of P50,000.00

Postdated July 24, 1992

said accused well knowing that at the time of issue she/he did not have sufficient funds in or credit with the drawee bank for the payment in full of the face amount of such check upon their presentment, which check when presented for payment within ninety (90) days from the date thereof were subsequently dishonored by the drawee bank for the reason "Account Closed" and despite receipt of notice of such dishonor the accused failed to pay the face amount thereof or make arrangement for the full payment thereof within five (5) working days after receiving notice. 7

When arraigned, petitioner, assisted by counsel, pleaded not guilty. After the prosecution presented its evidence and rested its case, petitioner filed a Demurrer to Evidence without leave of court, on the ground that the prosecution failed to prove her guilt beyond reasonable doubt. The trial court denied the Demurrer in its assailed Decision, the dispositive portion of which reads:

WHEREFORE, premises considered, the demurrer to evidence without prior leave of court is DENIED for lack of merit.

Since accused has waived her right to present evidence, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Violation of Batas Pambansa Bilang 22 in the eleven (11) above-entitled cases and is ordered to:

1. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P50,000.00, and to pay complainant Eileen Fernandez the amount of P50,000.00 as actual damages in Criminal Case No. 93-3335;

2. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P50,000.00, and to pay complainant Eileen Fernandez the amount of P50,000.00 as actual damages in Criminal Case No. 93-3336;

3. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P50,000.00, and to pay complainant Eileen Fernandez the amount of P50,000.00 as actual damages in Criminal Case No. 93-3337;

4. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P64,200.00, and to pay complainant Eileen Fernandez the amount of P64,200.00 as actual damages in Criminal Case No. 93-3338;

5. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P66,000.00, and to pay complainant Eileen Fernandez the amount of P66,000.00 as actual damages in Criminal Case No. 93-3339;

6. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P100,000.00, and to pay complainant Eileen Fernandez the amount of P100,000.00 as actual damages in Criminal Case No. 93-3340;

7. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P150,000.00, and to pay complainant Eileen Fernandez the amount of P150,000.00 as actual damages in Criminal Case No. 93-3341;

8. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P150,000.00, and to pay complainant Eileen Fernandez the amount of P150,000.00 as actual damages in Criminal Case No. 93-3342;

9. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P130,000.00, and to pay complainant Eileen Fernandez the amount of P130,000.00 as actual damages in Criminal Case No. 93-3343;

10. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P130,000.00, and to pay complainant Eileen Fernandez the amount of P130,000.00 as actual damages in Criminal Case No. 93-3344; and,

11. Suffer imprisonment for thirty (30) days, to pay a fine in the amount of P130,000.00, and to pay complainant Eileen Fernandez the amount of P130,000.00 as actual damages in Criminal Case No. 93-3345. 8

As already stated, the Court of Appeals affirmed the RTC in this wise: 9

WHEREFORE, the appealed decision is hereby affirmed [I]N TOTO. Costs against appellant.

Hence, this Petition. 10

The Facts

Evidence for the Prosecution

The Office of the Solicitor General 11 summarized the facts, as viewed by the prosecution, in this wise:

On several occasions in January, 1992, at Las Piñas, Metro Manila, petitioner discounted with complainant Ellen Fernandez several Equitable Bank checks postdated from July 23 to 29, 1992 in the total amount of P1,070,000.00 in exchange for cash in

the amount of P1,000,000.00. When the checks were deposited for payment, they were dishonored by the drawee bank because they were drawn against an account without sufficient funds. Petitioner failed to make good the checks despite demand. (Memorandum dated April 7, 1993 of Assistant Provincial Prosecutor to the Rizal Provincial Prosecutor)

During the hearing on the merits of this case on September 17, 1998, the prosecution offered in evidence its documentary evidence. Petitioner admitted the genuineness and due execution of the documents presented.12

Evidence for the Defense

As noted earlier, petitioner filed a Demurrer to Evidence without leave of court. In doing so, she waived her right to present evidence and submitted the case for judgment on the basis of the documentary exhibits adduced by the prosecution. 13

Ruling of the Court of Appeals

In affirming the trial court, the Court of Appeals explained that the prosecution proved all the elements of the crime. The CA also pointed out that the failure of petitioner to sign the pretrial order was not fatal to the prosecution, because her conviction was based on the evidence presented during the trial.

The Issues

Petitioner submits the following issues for the Court's consideration:

I

Whether or not the trial court and the Court of Appeals gravely erred in admitting in evidence all the documentary evidence of the prosecution though their due execution and genuineness were not duly established in evidence pursuant to the provisions of the Rules of Court and prevailing jurisprudence;

II

Whether or not the trial court and the Court of Appeals gravely erred in declaring that Rule 118, Section 4 of the Rules of Court, as applied in the case of Fule vs. Court of Appeals, 162 SCRA 446, which states that no agreement or admission made or entered during the pre-trial conference shall be used in evidence against the accused unless reduced to writing and signed by him and his counsel, is inapplicable in the case at bar;

III

Whether or not the trial court and the Court of Appeals gravely erred in ruling that the burden of evidence has already been shifted from the prosecution to the defense despite the definite factual issues in the pre-trial order; and

IV

Whether or not the trial court and the Court of Appeals erred in ruling that the prosecution has proven the guilt of the accused beyond reasonable doubt albeit the prosecution did not produce any evidence. 14

In the main, the resolution of the Petition hinges on (1) the admissibility and (2) the sufficiency of the prosecution evidence.

This Court's Ruling

The Petition has merit insofar as it contends that the elements of the crime charged have not all been proven beyond reasonable doubt.

First Issue:

Admissibility of Documentary Evidence

Because the first, the second and the third issues raised by petitioner all refer to the same matter, they will be discussed together. She contends that the pieces of documentary evidence presented by the prosecution during pretrial are inadmissible, because she did not sign the pretrial agreement as required under Section 4 of Rule 118 of the Rules of Court. 15 Hence, she argues that there is no basis for her conviction.

True, a pretrial agreement not signed by a party is inadmissible. However, the conviction of petitioner was based not on that agreement but on the documents submitted during the trial, all of which were admitted without any objection from her counsel. During the hearing on September 17, 1993, the prosecution offered as evidence the dishonored checks, the return check tickets addressed to private complainant, the notice from complainant addressed to petitioner that the checks had been dishonored, and the postmaster's letter that the notice had been returned to sender. Petitioner's counsel did not object to their admissibility. This is shown by the transcript of stenographic notes taken during the hearing on September 17, 1993:

COURT:

You have no objection to the admissibility, not that the Court will believe it.

ATTY. MANGERA

No, Your Honor.

COURT:

Exhibits "A" to "A" to "K" are admitted.

ATTY. MAKALINTAL:

We offer Exhibit "L", the return-check ticket dated July 27, 1992, relative to checks No. 021745 and 021746 indicating that these checks were returned DAIF, drawn against insufficient funds; Exh. M, returned check ticket dated July 28, 1992, relative to Check No. 021727, 021711 and 021720 likewise indicating the said checks to have been drawn against insufficient funds, Your Honor. Exhibit N, returned check ticket dated July 29, 1992, relative to Check Nos. 021749 and 021748, having the same indications;

Exhibits O, returned check ticket dated July 29, 1992 relative to Check Nos. 021750 and 021753, with the same indications;

Exhibits P, returned check ticket dated August 4, 1992 relative to Check No. 021752, having the same indication as being drawn against insufficient funds;

Exhibit Q, the demand letter sent to the accused by Atty. Horacio Makalintal dated August 3, 1992;

Exhibit R, the letter-request for certification addressed to the Postmaster General sent by the same law office dated 17 September 1992, showing that the said letter was dispatched properly by the Central Post Office of Makati;

Exhibit S, 1st Indorsement of the Makati Central Post Office dated 21 September 1992;

Exhibit T, the Philippine Postal Corporation Central Post Office letter dated 24 September 1992, addressed to this representation showing that there were 3 notices sent to the herein accused who received the said letter.

COURT:

Let's go to the third check slip; any objection to the third slip?

ATTY. MANGERA:

We have no objection as to the due execution and authenticity.

COURT:

Admitted.

ATTY. MAKALINTAL:

We are offering Exhibits Q, R, S and T, for the purpose of showing that there was demand duly made on the accused and that the same had been appropriately served by the Central Post Office Services of Manila.

ATTY. MANGERA:

We admit as to the due execution and authenticity only as to that portion, Your Honor.

COURT:

We are talking of admissibility now, so admitted. In other words, at this point, he makes an offer and the Court will either grant admission, [admit] it in evidence or deny it. It can deny admission if it is not properly identified etcetera.

ATTY. MANGERA:

I think it is already provided.

COURT:

So, admitted.

ATTY. MAKALINTAL:

With the admission of our offer, Your Honor, the prosecutionrests. 16

From the foregoing, it is clear that the prosecution evidence consisted of documents offered and admitted during the trial. In view of this, the CA correctly ruled that Fule v. Court of Appeals 17 would not apply to the present controversy. In that case, a hearing was conducted during which the prosecution presented three exhibits. However, Fule's conviction was "based solely on the stipulation of facts made during rile pre-trial on August 8, 1985, which was not signed by the petitioner, nor by his counsel." Because the stipulation was inadmissible in evidence under Section 4 of Rule 118, the Court held that there was no proof of his guilt.

In the present case, petitioner's conviction was based on the evidence presented during trial, and not on the stipulations made during the pretrial. Hence, petitioner's admissions during the trial are governed not by the Fuleruling or by Section 4 of Rule 118, but by Section 4 of Rule 129 which reads:

Sec. 4. Judicial Admissions. — An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.

Hence, the trial court and the Court of Appeals did not err in taking cognizance of the said documentary evidence.

Second Issue:

Sufficiency of Prosecution Evidence

Petitioner argues that the prosecution failed to prove beyond reasonable doubt the elements of the offense. After a careful consideration of the records of this case, we believe and so rule that the totality of the evidence presented does not support petitioner's conviction for violation of BP 22.

Sec. 1 of BP 22 defines the offense as follows:

Sec. 1. Checks without sufficient funds. — Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

Accordingly, this Court has held that the elements of the crime are as follows: 18

1. The accused makes, draws or issues any check to apply to account or for value.

2. The checks subsequently dishonored by the drawee bank for insufficiency of funds or credit; or it would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.

3. The accused knows at the time of the issuance that he or she does not have sufficient funds in, or credit with, drawee bank for the payment of the check in full upon its presentment.

We shall analyze the evidence, purportedly establishing each of the aforementioned elements which the trial and the appellate courts relied upon.

Issuance of the Questioned Checks

Contending that the prosecution failed to prove the first element, petitioner maintains that she merely signed the questioned checks without indicating therein the date and the amount involved. She adds that they were improperly filled up by Eileen Fernandez. Thus, she concludes, she did not "issue" the dishonored checks in the context of the Negotiable Instruments Law, which defines "issue" as the "first delivery of the instrument complete in form to a person who takes it as a holder." 19

Petitioner's contentions are not meritorious. The questioned checks, marked as Exhibits "A" to "K," contained the date of issue and the amount involved. In fact, petitioner even admitted that she signed those checks. On the other hand, no proof was adduced to show that petitioner merely signed them in blank, or that complainant filled them up in violation of the former's instructions or their previous agreement. The evidence on record is clear that petitioner issued eleven checks, all of which were duly filled up and signed by her.

Checks Dishonored

Neither are we persuaded by petitioner's argument that "there appears no evidence on record that the subject checks were unpaid and dishonored." 20 Under Section 3 of BP 22, "the introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped, or attached by the drawee on such dishonored check."

In the present case, the fact that the checks were dishonored was sufficiently shown by the checks themselves, which were stamped with the words "ACCOUNT CLOSED." This was further supported by the returned check tickets issued by PCI Bank, the depository bank, stating that the checks had been dishonored.

Clearly, these documents constitute prima facie evidence that the drawee bank dishonored the checks. Again, no evidence was presented to rebut the prosecution's claim.

Knowledge of Insufficiency of Funds

To hold a person liable under BP 22, it is not enough to establish that a check issued was subsequently dishonored. It must be shown further that the person who issued the check knew "at the time of issue

that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment." Because this element involves a state of mind which is difficult to establish, Section 2 of the law creates a prima facie presumption of such knowledge, as follows: 21

Sec. 2. Evidence of knowledge of insufficient funds. — The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

In other words, the prima facie presumption arises when a check is issued. But the law also provides that the presumption does not arise when the issuer pays the amount of the check or makes arrangement for its payment "within five banking days after receiving notice that such check has not been paid by the drawee." Verily, BP 22 gives the accused an opportunity to satisfy the amount indicated in the check and thus avert prosecution. As the Court held in Lozano v. Martinez, the aforecited provision serves to "mitigate the harshness of the law in its application." 22 This opportunity, however, can be used only upon receipt by the accused of a notice of dishonor. This point was underscored by the Court in Lina Lim Lao v. Court of Appeals: 23

It has been observed that the State, under this statute, actually offers the violator a "compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated." This was also compared "to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability." In this light, the full payment of the amount appearing in the check within five banking days from notice of dishonor is a "complete defense." The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner. Petitioner has a right to demand — and the basic postulates of fairness require — that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under BP 22.

Thus, in order to create the prima facie presumption that the issuer knew of the insufficiency of funds, it must be shown that he or she received a notice of dishonor and, within five banking days thereafter, failed to satisfy the amount of the check or make arrangement for its payment.

To prove that petitioner knew of the insufficiency of her funds, the prosecution presented Exhibits "Q" to "T." Based on these documents, the Court of Appeals concluded that "[p]rivate complainant sent a demand letter to appellant to make good said checks . . .. Appellant failed to pay the face value of the eleven checks or make arrangement for the full payment thereof within 90 days after receiving the notice." 24

Upon closer examination of these documents, we find no evidentiary basis for the holding of the trial court and the Court of Appeals that petitioner received a notice that the checks had been dishonored.

True, complainant sent petitioner a registered mail, as shown in Exhibit "Q" informing the latter that the checks had been dishonored. But the records show that petitioner did not receive it. In fact, Postmaster Wilfredo Ulibarri's letter addressed to complainant's counsel certified that the "subject registered mail was returned to sender on September 22, 1992 . . .. " 25

Notwithstanding the clear import of the postmaster's certification, the prosecution failed to adduce any other proof that petitioner received the post office notice but unjustifiably refused to claim the registered mail. It is possible that the drawee bank sent petitioner a notice of dishonor, but the prosecution did not present evidence that the bank did send it, or that petitioner actually received it. It was also possible that she was trying to flee from complainant by staying in different address.

Speculations and possibilities, however, cannot take the place of proof. Conviction must rest on proof beyond reasonable doubt. Clearly, the evidence on hand demonstrates the indelible fact that petitioner did not receive notice that the checks had been dishonored. Necessarily, the presumption that she knew of the insufficiency of funds cannot arise.

Be that as it may, the Court must point out that it cannot rule on petitioner's civil liability, for the issue was not raised in the pleadings submitted before us.

We must stress that BP 22, like all penal statutes, is construed strictly against the State and liberally in favor of the accused. 26 Likewise, the prosecution has the burden to prove beyond reasonable doubt each element of the crime. Hence, the prosecution's case must rise or fall on the strength of its own evidence, never on the weakness or even absence of that of the defense.

WHEREFORE, the assailed Decision of the Court of Appeals is hereby REVERSED and SET ASIDE. Petitioner Betty King is ACQUITTED for failure of the prosecution to prove all the elements of the crimes charged. No pronouncement as to costs.

SO ORDERED.

Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

Footnotes

1 Rollo, pp. 52-63.

2 Sixth Division.

3 Rollo, p. 66.

4 Rollo, pp. 94-99; penned by Judge Santiago Ranada Jr.

5 Branch 137.

6 Records, pp. 21-62.

7 Rollo, pp. 10-12.

8 RTC Decision, pp. 5-6; rolo, pp. 98-99.

9 CA Decision, p. 12; rollo, p. 63.

10 This case was deemed submitted for resolution on March 19, 1999, upon receipt by the Court of the respondent's Memorandum.

11 Through Solicitor General Ricardo P. Galvez, Assistant Solicitor General Rodolfo G. Urbiztondo and Solicitor Procolo M. Olaivar.

12 Respondent's Comment, pp. 1-2; rollo, pp. 149-150.

13 Sec. 15, Rule 119 of the Rules of Court.

14 Petitioner's Memorandum, pp. 9-10; rollo, pp. 197-198; signed by Attys. Janette Bassig Chua and Alquin B. Manguera.

15 Sec. 4. Pre-trial agreements must be signed. — No agreement or admission made or entered during the pre-trial conference shall be used in evidence against the accused unless reduced to writing and signed by him and his counsel.

16 TSN, September 17, 1993; pp. 3-5; rollo, pp. 82-84.

17 162 SCRA 446, June 22, 1988.

18 People v. Laggui, 171 SCRA 305, March 16, 1989.

19 Petitioner's Memorandum, p. 32; rollo, p. 220.

20 Petitioner's Memorandum, p. 35; rollo, p. 223.

21 See also Crisologo-Jose v. Court of Appeals, 177 SCRA 594, September 15, 1989; Travel-On, Inc. v. Court of Appeals, 210 SCRA 351, June 26, 1992 and People v. Singson, 215 SCRA 534, November 12, 1992.

22 146 SCRA 324, December 18, 1986, per Yap, CJ.

23 274 SCRA 572, 594, June 20, 1997, per Panganiban, J. Citations omitted.

24 CA Decision, p. 11; rollo, p. 62.

25 Exhibit "T," Records, p. 20.

26 Agpalo, Statutory Construction (1990) p. 208; Nitafan, Notes and Comments on the Bouncing Checks Law, p. 21.

G.R. No. 172573             June 19, 2008

RICARDO SUAREZ, petitioner, vs.PEOPLE OF THE PHILIPPINES and A.H. SHOPPERS’ MART, INC., respondents.

D E C I S I O N

PUNO, C.J.:

This Petition for Review on Certiorari assails the Decision1 and Resolution2 of the Court of Appeals, dated November 21, 2005 and April 10, 2006 respectively, in CA-G.R. SP No. 00284. The Court of Appeals set aside the Regional Trial Court’s (RTC’s) Omnibus Decision3 dated August 30, 2004 and Order4 dated September 13, 2004, and reinstated the Municipal Trial Court in Cities’ (MTCC’s) Joint Decision5 dated April 23, 2004 in Criminal Case Nos. 14988 and 14989. The MTCC found petitioner Ricardo Suarez guilty of two (2) counts of violation of Batas Pambansa (B.P.) Blg. 22.

Petitioner is Ricardo Suarez, the owner of a grocery store, Suarez Commercial. Respondent A.H. Shoppers’ Mart, Inc. (Shoppers’ Mart) is a business establishment engaged in operating a grocery and department store.

Petitioner opened a credit line to purchase goods with Shoppers’ Mart.6 As payment for the goods, petitioner issued two postdated checks payable to the order of Shoppers’ Mart: (1) Development Bank of the Philippines (DBP) Check No. 0008784 dated September 18, 1998 for the amount of PhP 82,812.00; and (2) DBP Check No. 0008777 dated September 26, 1998 for the amount of PhP

75,000.00.7 Shoppers’ Mart deposited the checks. However, DBP dishonored the checks for having been drawn against a closed account.8 Shoppers’ Mart sent the petitioner a demand letter dated March 22, 2002 to pay for the value of the checks, but the petitioner failed to make payment.9

Two informations for violation of B.P. Blg. 22 were filed against the petitioner before the MTCC.10 Both informations are similarly worded except with respect to the check number, amount involved, and date corresponding to the check’s issuance. The information in Criminal Case No. 14988 reads as follows:

That, on or about the 18th day of September, 1998, in the City of Tagbilaran, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, knowing fully and well that he did not have sufficient funds deposited with the bank, did, then and there feloniously make out and issue Development Bank of the Philippines Check No. 0008784 in the amount of EIGHTY TWO THOUSAND AND EIGHT H/UNDRED TWELVE PESOS (P 82,812.00), Philippine Currency, drawn against Development Bank of the Philippines (DBP) Tagbilaran City Branch, Tagbilaran City, and to pay Shoppers Mart, and thereafter, did, then and there willfully, unlawfully and feloniously pass on, give and deliver the same to Shoppers Mart, in payment of a certain obligation; however, upon presentment of the check to the drawee bank for encashment or payment within a period of ninety (90) days from the date appearing thereon, the same was dishonored and refused payment for the reason "ACCOUNT CLOSED" and the accused neither paid nor made arrangement with the drawee bank within five (5) banking days from receipt of notice of non-payment, to the damage and prejudice of said Shoppers Mart, in the amount to be proved during the trial of the case.

Acts committed contrary to the provisions of Batas Pambansa Blg. 22.11

Criminal Case Nos. 14988 and 14989 were consolidated and jointly tried. When arraigned, petitioner pleaded not guilty to the charges against him.12 During trial, the prosecution presented one witness, Dolores Huan Agbayani, the Collection Manager of Shoppers’ Mart.13 Petitioner filed a Demurrer to Evidence without leave of court, on the ground that no notice of dishonor had been sent to and received by him.14 On January 26, 2004, the MTCC denied the Demurrer.15

On April 23, 2004, the MTCC found petitioner guilty of violating B.P. Blg. 22 in both cases. The dispositive portion of its Joint Decision states:

WHEREFORE, the Court finds accused Ricardo Suarez GUILTY beyond reasonable doubt in each of the two (2) counts of Violation of Batas Pambansa Bilang 22 as charged in the two (2) informations and hereby imposes a penalty of FINE of:

1. EIGHTY FIVE THOUSAND PESOS (P 85,000.00) in Crim. Case No. 14988;

2. SEVENTY FIVE THOUSAND PESOS (P 75,000.00) in Crim. Case No. 14989,

with subsidiary imprisonment in case of insolvency and to pay costs in each case.

Accused is likewise ordered to pay complainant the total amount of P157,812.00 representing the total face value of the two (2) dishonored checks plus legal interest of six (6%) percent per annum from the filing of these cases on July 12, 2002 until finality of this judgment and twelve (12%) percent per annum from finality of this judgment until full payment and the sum of P5,000.00 as attorney’s fees and litigation expenses.

SO ORDERED.16

Petitioner appealed to the RTC, which ruled that the provision in B.P. Blg. 22 regarding criminal liability runs counter to the constitutional provision against imprisonment for nonpayment of a debt. The RTC modified the MTCC decision, viz:

WHEREFORE, in view of all the foregoing, the assailed Decision is modified and another judgment is hereby entered absolving herein accused Ricardo Suarez from criminal liability under BP Blg. 22. However, the civil liability imposed upon him in the Decision is hereby affirmed.17

On November 9, 2004, respondents assailed the RTC decision before the Court of Appeals.18 The Court of Appeals set aside the RTC decision and reinstated the MTCC decision, holding that the RTC decision is void for absolving the petitioner of criminal liability despite a finding that he violated B.P. Blg. 22.19

Petitioner filed a Motion for Reconsideration before the Court of Appeals, reiterating the argument that the prosecution failed to prove that he had been sent and received a notice of dishonor, which is essential to support a conviction of B.P. Blg. 22.20 The Court of Appeals denied the motion.21

Petitioner insists on the same argument before this Court. The Solicitor General supports the petitioner’s argument and recommends the petitioner’s acquittal for violation of B.P. Blg. 22.22 Thus, the sole issue for resolution is whether the prosecution proved the element of knowledge of insufficiency of funds to hold the petitioner liable for violation of B.P. Blg. 22.

To commit a violation of B.P. Blg. 22,23 the following elements must be present and proved:

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 such 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.24

B.P. Blg. 22 creates a presumption of knowledge of insufficiency of funds under the following circumstances:

Sec. 2. Evidence of knowledge of insufficient funds. — The making, drawing, and issuance of a check payment of which is refused by the drawee because of insufficient funds or credit with such bank, when presented within ninety days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.25

The presumption arises when it is proved that the issuer had received this notice, and that within five banking days from its receipt, he failed to pay the amount of the check or to make arrangements for its payment.26 The full payment of the amount appearing in the check within five banking days from notice of dishonor is a complete defense.27 Accordingly, procedural due process requires that a notice of dishonor be sent to and received by the petitioner to afford the opportunity to avert prosecution under B.P. Blg. 22.28

The evidence shows that the prosecution proved that a notice of dishonor was sent to petitioner through registered mail. The prosecution presented a copy of the demand letter and properly authenticated the registry return receipt.29 However, it is not enough for the prosecution to prove that a notice of dishonor was sent to the petitioner. It is also incumbent upon the prosecution to show "that the drawer of the check received the said notice because the fact of service provided for in the law is reckoned from receipt of such notice of dishonor by the drawee of the check."30

A review of the records shows that the prosecution did not prove that the petitioner received the notice of dishonor. Registry return cards must be authenticated to serve as proof of receipt of letters sent through registered mail. Thus, we held:

…it must appear that the same was served on the addressee or a duly authorized agent of the addressee. In fact, the registry return receipt itself provides that ‘[a] registered article must not be delivered to anyone but the addressee, or upon the addressee’s written order, in which case the authorized agent must write the addressee’s name on the proper space and then affix legibly his own signature below it.’31

The failure of the prosecution to properly authenticate and identify the signature on the registry return card as that of the petitioner is evident from the testimony of its sole witness, the Collection Manager of Shoppers’ Mart:

Q:     The return card evidencing actual receipt by the defendant, it is also included in Branch 2, City Court?

A:     Yes, sir.

Q:     I show you a return receipt, is this the return receipt you are referring to?

A:     Yes, sir.32

The presentation of the registry card, with an unauthenticated signature, does not meet the required proof beyond reasonable doubt that the petitioner received such notice, especially considering that he denied receiving it.33 As there is insufficient proof that the petitioner received notice of dishonor, the presumption that he had knowledge of insufficiency of funds cannot arise.

IN VIEW WHEREOF, the assailed November 21, 2005 Decision and April 10, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 00284, reinstating the April 23, 2004 Joint Decision of the MTCC in Tagbilaran City, Branch 1, in Criminal Case Nos. 14988 and 14989 convicting the petitioner of two (2) counts of violation of B.P. Blg. 22, are MODIFIED. Petitioner is ACQUITTED on reasonable doubt. However, the civil liability imposed on petitioner in the Joint Decision of the MTCC is AFFIRMED.

SO ORDERED.

REYNATO S. PUNO Chief Justice

WE CONCUR:

ANTONIO T. CARPIOAssociate Justice

RENATO C. CORONAAssociate Justice

ADOLFO S. AZCUNAAssociate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Rollo, pp. 24-34.

2 Id. at 35-36.

3 CA rollo, pp. 32-33.

4 Id. at 38.

5 MTCC records, pp. 107-111.

6 Rollo, p. 25.

7 Id.

8 Id.

9 Id. at 26.

10 Id.

11 Id.

12 Id. at 27.

13 TSN, November 12, 2003, pp. 1-18.

14 MTCC records, pp. 90-92.

15 Id. at 93-94.

16 Id. at 111.

17 CA rollo, p. 33.

18 Id. at 2-8.

19 Rollo, pp. 30-33.

20 Id. at 46-55.

21 Id. at 35-36.

22 Id. at 86-97.

23 Batas Pamabansa Blg. 22 (1979).

Section 1 states:

Checks without sufficient funds. — Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

24 Sycip, Jr. v. Court of Appeals, 385 Phil. 143, 154 (2000).

25 B.P. Blg. 22, Sec. 2.

26 King v. People, 377 Phil. 692, 710 (1999).

27 Lao v. Court of Appeals, G.R. No. 119178, June 20, 1997, 274 SCRA 572, 594.

28 Id.

29 TSN, November 12, 2003, pp. 9-11.

30 Cabrera v. People, 454 Phil. 759, 774 (2003).

31 Ting v. Court of Appeals, 398 Phil. 481, 494 (2000).

32 TSN, November 12, 2003, pp. 11-12.

33 Del Rosario v. Cedillo, A.M. No. MTJ-04-1577, October 21, 2004, 441 SCRA 70, 77.

THIRD DIVISION

[G.R. Nos. 104238-58.  June 3, 2004]

PEOPLE OF THE PHILIPPINES, appellee, vs. CORA ABELLA OJEDA, appellant.

D E C I S I O NCORONA, J.:

For review is the decision[1] dated June 21, 1991 of the Regional Trial Court of Manila, Branch 38, the dispositive portion of which read:

WHEREFORE, the Court finds accused Cora Abella Ojeda guilty beyond reasonable doubt of the crime of Estafa as defined and penalized under paragraph 2(d) of Article 315 of the Revised Penal Code, as amended by Rep. Act 4885, in Criminal Case No. 88-66228 and hereby sentences her to suffer a penalty of reclusion perpetua, with the accessories provided by law and with credit for preventive imprisonment undergone, if any, in accordance with Article 29 of the Revised Penal Code as amended, and to pay complainant Ruby Chua the amount of Two Hundred Twenty Eight Thousand Three Hundred Six (P228,306.00) Pesos with interests thereon from the time of demand until fully paid.

Likewise, the Court also finds the said accused guilty for Violation of Batas Pambansa Blg. 22 in Criminal Cases Nos. 88-66230, 88-66232, 88-66235 to 88-66240, 88-66242, 88-66243, 88- 66245 to 88-66248 (14) counts and hereby sentences her to suffer a penalty of one year of imprisonment for each count. On the other hand, the other charges docketed as Criminal Cases Nos. 88- 66229, 88-66231, 88-66233, 88-66234, 88-66241 and 88-66244 are hereby dismissed for insufficiency of evidence.

Costs against accused in all instances.[2]

Appellant Cora Abella Ojeda was charged in 21 separate Informations for estafa in Criminal Case No. 88-66228 and for violation of Batas Pambansa (BP) 22 in Criminal Case Nos. 88-66229 to 88-66248.

The Information charging Ojeda with estafa read:

That on or about the first week of November, 1983, in the City of Manila, Philippines, the said accused did then and there willfully, unlawfully and feloniously defraud RUBY CHUA in the following manner, to wit: the said accused, well knowing that she did not have sufficient funds in the bank and without informing the said Ruby Chua of such fact drew, made out and issued to the latter the following post-dated Rizal Commercial Banking Corporation checks, to wit:

Check No.                             Date                            Amount

1. 033550                              Nov. 5, 1983                P17,100.002. 041782                              Nov. 5, 1983                5,392.343. 042935                              Nov. 6, 1983                1,840.194. 041799                              Nov. 9, 1983                11,953.385. 033530                              Nov. 10, 1983              19,437.346. 041714                              Nov. 10, 1983              26, 890.007. 042942                              Nov. 10, 1983              1,941.598. 041783                              Nov. 12, 1983              5,392.349. 041800                              Nov. 14, 1983              11,953.3910. 041788                            Nov. 15, 1983              3,081.9011. 033529                            Nov. 15, 1983              19,437.3412. 041784                            Nov. 18, 1983              5,392.3413. 042901                            Nov. 18, 1983              11,953.3814. 042902                            Nov. 23, 1983              11,953.3815. 041785                            Nov. 25, 1983              5,392.3416. 042903                            Nov. 29, 1983              11,953.3817. 033532                            Nov. 29, 1983              13,603.2218. 041786                            Nov. 30, 1983              5,392.3419. 042905                            Dec. 8, 1983               11,953.39

20. 043004                            Dec. 10, 1983             2,386.2521. 042907                            Dec. 15, 1983             11,953.3822. 042906                            Dec. 18, 1983             11,953.39

      P228,306.60

in payment of various fabrics and textile materials all in the total amount of P228,306.60 which the said accused ordered or purchased from the said RUBY CHUA on the same day; that upon presentation of the said checks to the bank for payment, the same were dishonored and payment thereof refused for the reason ‘Account Closed’, and said accused, notwithstanding due notice to her by the said Ruby Chua of such dishonor of the said checks, failed and refused and still fails and refuses to deposit the necessary amount to cover the amount of the checks to the damage and prejudice of the said RUBY CHUA in the aforesaid amount of P228,306.60, Philippine currency.

Contrary to law.

The Informations charging Ojeda for violation of BP 22 were similarly worded except for the amounts of the checks, the check numbers and the dates of the checks:

That on or about the first week of November 1983, in the City of Manila, Philippines, the said accused did then and there wilfully, unlawfully and feloniously make or draw and issue to RUBY CHUA to apply on account or for value Rizal Commercial Banking Corp. Check No. 041784 dated November 18, 1983 payable to Ruby Chua in the amount of P5,392.34, said accused well knowing that at the time of issue he/she/they did not have sufficient funds in or credit with the drawee bank or payment of such check in full upon its presentment, which check, when presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for insufficiency of funds, and despite receipt of notice of such dishonor, said accused failed to pay said complainant the amount of said check or to make arrangement for full payment of the same within five (5) banking days after receiving said notice.

Contrary to law.

The pertinent facts of the case follow.Appellant Cora Abella Ojeda used to buy fabrics (telas) from complainant Ruby Chua. For the

three years approximately she transacted business with Chua, appellant used postdated checks to pay for the fabrics she bought. On November 5, 1983, appellant purchased from Chua various fabrics and textile materials worth P228,306 for which she issued 22 postdated checks bearing different dates and amounts.

Chua later presented to the bank for payment check no. 033550 dated November 5, 1983 in the amount of P17,100[3] but it was dishonored due to “Account Closed.”[4] On April 10, 1984, Chua deposited the rest of the checks but all were dishonored for the same reason.[5] Demands were allegedly made on the appellant to make good the dishonored checks, to no avail.

Estafa and BP 22 charges were thereafter filed against appellant. The criminal cases were consolidated and appellant, on arraignment, pleaded not guilty to each of the charges.

On the whole, appellant’s defense was grounded on good faith or absence of deceit, lack of notice of dishonor and full payment of the total amount of the checks.

With the exception of six checks[6] which did not bear her signature, appellant admitted that she issued the postdated checks which were the subject of the criminal cases against her. She, however, alleged that she told Chua not to deposit the postdated checks on maturity as they were not yet sufficiently funded. Appellant also claimed that she made partial payments to Chua in the form of finished garments worth P50,000. This was not rebutted by the prosecution.

The trial court convicted appellant of the crime of estafa as defined and penalized under paragraph 2(d) of Article 315 of the Revised Penal Code (RPC), and sentenced her toreclusion perpetua. The trial court also convicted appellant of violation of BP 22 for issuing bouncing checks.  However, the court a quo held her guilty of only 14 counts out of the 22 bouncing checks issued. The court reasoned:

xxx This is due to the fact that of the 22 checks, two of them are not covered by the indictment. This refers to Check No. 042935 dated November 6, 1983 in the amount of P1,840.19 (Exhibit D) and Check No. 042942 dated November 10, 1983 in the amount of P1,941.59 (Exhibit F). And of the total number of checks, six of them were not signed by the accused but by the latter’s husband (Exhibits C,H,J,M,R and O). The accused should not be liable for the issuance of the 6 checks in the absence of any showing of conspiracy.[7]

Appellant appealed to this Court, seeking acquittal.  Her counsel, however, failed to file the appellant’s brief within the prescribed period. Her appeal was thus dismissed in a resolution of this Court dated October 14, 1992.[8]

In her motion for reconsideration, appellant asked this Court to reverse its order of dismissal in the interest of substantial justice and equity.[9] We initially found no compelling reason to grant her motion and resolved to deny with finality appellant’s MR in a resolution dated February 3, 1993.[10] Appellant thereafter filed a “Second and Urgent Motion for Reconsideration,” attaching thereto an “Affidavit of Desistance” of complainant Ruby Chua which stated in part:

xxx    xxx       xxx.

2. that the defendant Mrs. Cora Ojeda has already fully paid her monetary obligation to me in the amount of P228,306.00 which is the subject of the aforementioned cases;

xxx    xxx       xxx.

5. That as the private complainant, I am now appealing to the sense of compassion and humanity of the good justices of the Supreme Court to reconsider the appeal of Mrs. Cora Ojeda and I solemnly pray that the criminal liability be extinguished with her civil liability.[11]

In a resolution dated March 17, 1993,[12] this Court denied the second MR for having been filed without leave of court. In the same resolution, this Court ordered the entry of judgment in due course.

Appellant thereafter filed another motion dated April 21, 1993, praying that she be recommended to then President Fidel V. Ramos for executive clemency. In support of such motion, she once more attached the affidavit of desistance[13] of complainant Ruby Chua which categorically declared that “the defendant, Ms. Cora Ojeda, (had) already fully paid her monetary obligations to (Chua) in the amount of P228,306 which (was) the subject of the aforementioned cases.”[14]

In view of such special circumstances, this Court issued a resolution dated June 9, 1993[15] recalling its resolutions dated October 14, 1992, February 3, 1993 and March 17, 1993 for humanitarian reasons and in the interest of justice, and in order that this Court may resolve appellant’s appeal on the merits.[16]

Hence, the instant appeal with the following assignments of error:I.

THE LOWER COURT ERRED IN FINDING THAT DECEIT WAS EMPLOYED BY ACCUSED APPELLANT WHEN SHE ISSUED THE CHECKS TO THE PRIVATE COMPLAINANT.

II.

THE LOWER COURT ERRED IN NOT FINDING THAT THE ISSUANCE BY THE ACCUSED-APPELLANT OF THE CHECKS TO THE PRIVATE COMPLAINANT WAS MERELY A MODE OF PAYMENT WHICH ARRANGEMENT HAD BEEN THEIR PRACTICE FOR THREE (3) YEARS.

III.

THE LOWER COURT ERRED IN NOT FINDING THAT GOOD FAITH IS A VALID DEFENSE AGAINST ESTAFA BY POSTDATING A CHECK

IV.

THE LOWER COURT ERRED IN CONVICTING THE ACCUSED OF FOURTEEN (14) COUNTS OF B.P. 22 WHEN THERE WAS NO PROOF OF NOTICE OF DISHONOR TO THE ACCUSED.

V.

THE LOWER COURT ERRED IN NOT FINDING THAT SINCE 13 OF THE 14 CHECKS WERE DEPOSITED ONLY AFTER THE LAPSE OF THE 90 DAY PERIOD, HENCE, THE PRIMA FACIE PRESUMPTION OF KNOWLEDGE DOES NOT APPLY.[17]

Appellant firmly denies any criminal liability for estafa.  She argues there was no deceit employed when she issued the checks because she never assured Chua that the checks were funded. Chua allegedly knew all along that the checks were merely intended to guarantee future payment by appellant.

Appellant further claims good faith in all her transactions with Chua for three years.  She explained that her failure to fund the checks was brought about by the collapse of the country’s economy in the wake of the Aquino assassination in 1983.  The capital flight and financial chaos at that time caused her own business to shut down when her customers also failed to pay her. Despite the closure of her business, appellant maintains that she did her best to continue paying Chua what she owed and, when she could no longer pay in cash, she instead paid in kind in the form of finished goods.  But these were not enough to cover her debts.  Nevertheless, she spared no effort in complying with her financial obligations to Chua until she was gradually able to pay all her debts, a fact fully admitted as true by complainant in her affidavit.

From the foregoing, appellant contends that the element of deceit thru abuse of confidence or false pretenses was not present. Thus, her guilt was not established with satisfactory proof. Appellant asserts that good faith on her part was a valid defense to rebut the prima facie presumption of deceit when she issued the checks that subsequently bounced.

Furthermore, out of the 14 checks cited in the decision of the trial court, only one check was deposited within 90 days from due date. This was check no. 033550 dated November 5, 1983. The rest of the checks were deposited only on April 10, 1984 or more than 90 days from the date of the last check.[18]

Appellant also denies she received any notice of dishonor of the checks, contrary to the findings of the trial court.  She was not even aware that cases had already been filed against her for violation of BP 22.  Since there was allegedly no proof of notice[19] of the dishonor of the checks, appellant claims that she cannot be convicted of violation of BP 22.

On the other hand, the Solicitor General contends that appellant was criminally liable for issuing worthless checks. Complainant Chua accepted the postdated checks as payment because of appellant’s good credit standing.  She was confident that appellant’s checks were good checks.  Thus, no assurances from appellant that the checks were sufficiently funded were needed for Chua to part with her goods. And when the checks later bounced, appellant betrayed the confidence reposed in her by Chua.

The Solicitor General also argues that there was a simultaneous exchange of textile materials and checks between complainant and appellant.  Complainant Chua would not have parted with her telas had she known that appellant’s checks would not clear.  Appellant obtained something in exchange for her worthless checks.  When she issued them, she knew she had no funds to back up those checks because her account had already been closed.  Yet, she did not inform Chua that the checks could not be cashed upon maturity. She thus deceived Chua into parting with her goods and the deceit employed constituted estafa.

We grant the appeal.

DECEIT AND DAMAGE ASELEMENTS OF ESTAFA

Under paragraph 2 (d) of Article 315 of the RPC, as amended by RA 4885, [20] the elements of estafa are: (1) a check is postdated or issued in payment of an obligation contracted at the time it is issued; (2) lack or insufficiency of funds to cover the check; (3) damage to the payee thereof.   Deceit and damage are essential elements of the offense and must be established by satisfactory proof to warrant conviction.[21] Thus, the drawer of the dishonored check is given three days from receipt of the notice of dishonor to cover the amount of the check. Otherwise a prima facie presumption of deceit arises.

The prosecution failed to prove deceit in this case.  The prima facie presumption of deceit was successfully rebutted by appellant’s evidence of good faith, a defense in estafa by postdating a check.[22] Good faith may be demonstrated, for instance, by a debtor’s offer to arrange a payment scheme with his creditor.  In this case, the debtor not only made arrangements for payment; as complainant herself categorically stated, the debtor-appellant fully paid the entire amount of the dishonored checks.

It must be noted that our Revised Penal Code was enacted to penalize unlawful acts accompanied by evil intent denominated as crimes mala in se. The principal consideration is the existence of malicious intent. There is a concurrence of freedom, intelligence and intent which together make up the “criminal mind” behind the “criminal act.” Thus, to constitute a crime, the act must, generally and in most cases, be accompanied by a criminal intent.  Actus non facit reum, nisi mens sit rea. No crime is committed if the mind of the person performing the act complained of is innocent. As we held in Tabuena vs .   Sandiganbayan :[23]

The rule was reiterated in People v. Pacana, although this case involved falsification of public documents and estafa:

“Ordinarily, evil intent must unite with an unlawful act for there to be a crime.  Actus non facit reum, nisi mens sit rea.  There can be no crime when the criminal mind is wanting.”

American jurisprudence echoes the same principle. It adheres to the view that criminal intent in embezzlement is not based on technical mistakes as to the legal effect of a transaction honestly entered into, and there can be no embezzlement if the mind of the person doing the act is innocent or if there is no wrongful purpose.

The accused may thus prove that he acted in good faith and that he had no intention to convert the money or goods for his personal benefit.[24] We are convinced that appellant was able to prove the absence of criminal intent in her transactions with Chua.  Had her intention been tainted with malice and deceit, appellant would not have exerted extraordinary effort to pay the complainant, given her own business and financial reverses.

LACK OF NOTICE OF DISHONOR

We also note that the prosecution presented virtually no evidence to show that the indispensable notice of dishonor was sent to and received by appellant.  Excerpts from the following testimony of complainant are significant:

ATTY. ANGELES:Q    Now, Mrs. Witness, when these checks from Exhibits ‘A’ to ‘V’ have bounced, what steps,

did you do?A     I consulted my lawyer and she wrote a Demand Letter.COURT:Q    What is the name of that lawyer?A     Atty. Virginia Nabora.ATTY. ANGELES:

Q    Now, you mentioned a Demand Letter sent by Atty. Virginia Nabor, I am showing to you this Demand Letter dated March 16, 1988, will you kindly examine the same if this is the same Demand Letter you mentioned a while ago?

A     Yes, sir.Q    Now, on this second page of this Demand Letter there is a signature above the printed

name Virginia Guevarra Nabor, do you know the signature, Mrs. Witness?A     Yes, that is the signature of my lawyer.ATTY. ANGELES:

May we request that this Demand Letter dated March 16, 1988 consisting of two (2) pages, Your Honor, be marked as Exhibit ‘W’ and that the signature on the second page of this letter of Virginia Guevarra Nabor be encircled and be marked as Exhibit ‘W-1’ and that the attached Registry Receipt, Your Honor, be marked as Exhibit ‘W-2’.

COURT:Mark them.

ATTY. ANGELES:Q    Now, Mrs. Witness, why do you know that this is the signature of Virginia Guevarra

Nabor?A     After preparing that I saw her sign the letter.Q    Now, after sending this Demand Letter, do you know If the accused herein made

payments or replaced the checks that were issued to you?COURT:Q    Of course, you assumed that the accused received that letter, that is his basis on the

premise that the accused received that letter?ATTY. ANGELES:A     Yes, Your Honor.COURT:Q    What proof is there to show that accused received the letter because your question is

premises (sic) on the assumption that the accused received the letter?ATTY. ANGELES:Q    Now, do you know Mrs. Witness if the accused received the letter?A     There is a registry receipt.COURT:Q    Now, later on after sending that letter, did you have communication with the accused?A     I kept on calling her but I was not able to get in touch with her.Q    But do you know if that letter of your lawyer was received by the accused?A     I was not informed by my lawyer but I presumed that the same was already received by

the accused.ATTY. ANGELES:Q    Now, aside from sending this Demand Letter, do you know what your lawyer did?A     We filed a case with the Fiscal’s.[25]

Aside from the above testimony, no other reference to the demand letter was made by the prosecution.  The prosecution claimed that the demand letter was sent by registered mail.   To prove this, it presented a copy of the demand letter as well as the registry return receipt bearing a signature which was, however, not even authenticated or identified.  A registry receipt alone is insufficient as proof of mailing.[26] “Receipts for registered letters and return receipts do not prove themselves; they must be properly authenticated in order to serve as proof of receipt of the letters.”[27]

It is clear from the foregoing that complainant merely presumed that appellant received the demand letter prepared and sent by her lawyer.  She was not certain if appellant indeed received the notice of dishonor of the checks. All she knew was that a demand letter was sent by her lawyer to the appellant. In fact, right after complainant made that presumption, her lawyer filed the criminal cases against appellant at the Fiscal’s office[28] without any confirmation that the demand letter supposedly sent through registered mail was actually received by appellant.

With the evident lack of notice of dishonor of the checks, appellant cannot be held guilty of violation of BP 22. The lack of such notice violated appellant’s right to procedural due process.  “It is a general rule that when service of notice is an issue, the person alleging that the notice was served must prove the fact of service.”[29] The burden of proving receipt of notice rests upon the party asserting it and the quantum of proof required for conviction in this criminal case is proof beyond reasonable doubt.

When, during the trial, appellant denied having received the demand letter, it became incumbent upon the prosecution to prove that the demand letter was indeed sent through registered mail and that the same was received by appellant. But it did not.  Obviously, it relied merely on the weakness of the evidence of the defense.

This Court therefore cannot, with moral certainty, convict appellant of violation of BP 22.   The evident failure of the prosecution to establish that she was given the requisite notice of dishonor justifies her acquittal.[30]

As held in Lao vs. Court of Appeals:[31]  

“It has been observed that the State, under this statute, actually offers the violator ‘a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated.’  This was also compared ‘to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability.’ In this light, the full payment of the amount appearing in the check within five banking days from notice of dishonor is a ‘complete defense.’ The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner. Petitioner has a right to demand – and the basic postulates of fairness require -- that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under B.P. 22.

Stated otherwise, responsibility under BP 22 was personal to appellant; hence, personal knowledge of the notice of dishonor was necessary.  Consequently, while there may have been constructive notice to appellant regarding the insufficiency of her funds in the bank, it was not enough to satisfy the requirements of procedural due process.

Finally, it is worth mentioning that notice of dishonor is required under both par. 2(d) Art. 315 of the RPC and Sec. 2 of BP 22. While the RPC prescribes that the drawer of the check must deposit the amount needed to cover his check within three days from receipt of notice of dishonor, BP 22, on the other hand, requires the maker or drawer to pay the amount of the check within five days from receipt of notice of dishonor. Under both laws, notice of dishonor is necessary for prosecution (for estafa and violation of BP 22). Without proof of notice of dishonor, knowledge of insufficiency of funds cannot be presumed and no crime (whether estafa or violation of BP 22) can be deemed to exist.

WHEREFORE, the decision of the trial court is hereby REVERSED and SET ASIDE. Appellant Cora Abella Ojeda is ACQUITTED in Criminal Case No. 88-66228 for estafa and in Criminal Case Nos. 88-66230, 88-66232, 88-66235 to 88-66240, 88-66242, 88-66243, 88-66245 to 88-66248 for violation of BP 22.

SO ORDERED.

Vitug, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

[1] Penned by Judge Arturo U. Barias, Jr.[2] Rollo, p. 40.[3] Exhibit “A”.[4] Exhibit “Y”.[5] Exhibits “X”, “Y”, “AA”, “BB” and “CC”.[6] Exhibits “C”, “H”, “J”, “M”, “O” and “R”.[7] Record, p. 139.[8] Rollo, p. 47.[9] Rollo, p. 49.[10] Rollo, p. 52.[11] Ibid., p. 61.[12] Rollo, p. 62. [13] Rollo, p. 70.[14] Ibid.[15] Rollo, p. 76.[16] Rollo, p. 76.[17] Rollo, pp. 87-88.[18] Section 2 of BP 22 states:

SEC. 2.  Evidence of knowledge of insufficient funds. – The making, drawing and issuance of a check payment of which is refused by the drawee  because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiently of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

[19] Ibid.[20] Art. 315 par. 2(d) of the Revised Penal Code states:

(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.

[21] People   vs.   Chua , 315 SCRA 326 [1999].[22] People   vs.   Gulion , 349 SCRA 610 [2001]; Vallarta vs. Court of Appeals, 150 SCRA 336

[1987]; People vs. Villapando, 56 Phil. 31 [1931].[23] 268 SCRA 332 [1997].[24] Lecaroz   vs.   Sandiganbayan , 305 SCRA 396 [1999].

[25] TSN, December 7, 1989, pp. 37-43.[26] Ting   vs.   Court of Appeals , 344 SCRA 551 [2000], citing Central Trust Co. vs. City of Des Moines, 218

NW 580.[27] Ting vs. Court of Appeals, ibid.[28] TSN, December 7, 1989, pp. 42-23.[29] Ting vs. Court of Appeals, supra, citing 58 Am Jur 2d, Notice, § 45.[30] Caras   vs.   Court of Appeals , 366 SCRA 371 [2001].[31] Lao   vs.   Court of Appeals , 274 SCRA 572 [1997].

Batas Pambansa Blg. 22, otherwise known as the Bouncing Checks Law (BP 22), is the law that punishes the making or the drawing of a check to apply on account or for value when the maker or drawer knew at the time of issue that the account against which the check was drawn had no sufficient funds in, or enough credit with, the drawee bank for the payment of such check or when the maker or drawer of the check issues a stop payment order on such a check without any valid reason. In both cases, the check is dishonored by reason of insufficient funds. It is also a violation of BP 22 when the maker or drawer of such a check fails to maintain sufficient funds in, or enough credit with, the drawee bank to cover the full amount of the check for a period of ninety (90) days from the date appearing on the check and the check is dishonored for such reason. The penalty for violation of BP 22 is imprisonment for 30 days to one year or a fine, or both (Section 1, BP 22).BP 22 was enacted to discourage the issuance of bouncing checks, to prevent checks from becoming “useless scraps of paper,” and to restore respectability to checks. The law was enacted at a time when the stability and commercial value of checks, which are recognized as being virtual substitutes for currency, were being threatened by the rampant issuance of checks that were subsequently dishonored by drawee banks. Because BP 22 imposes imprisonment among its penalties, it is now a common practice for creditors to require their debtors to issue post-dated checks to cover amortizations of their loan. Accordingly, BP 22, to a certain degree, has achieved the purpose for which it was enacted.

In the past years, however, there have been two important developments regarding BP 22. The first is the shift in policy as announced by the Supreme Court in its Administrative Circular Nos. 12-2000 and 13-01 towards the imposition of a fine only, and not imprisonment, for violations of BP 22. The second are decisions of the courts holding that the prosecution in BP 22 must establish that a written notice of dishonor was actually received by the maker or drawer of the dishonored check.

The Supreme Court in its Administrative Circular No. 12-2000 declared that, in imposing the penalty for violations of BP 22, courts should follow the policy of “redeeming valuable human material and preventing unnecessary deprivation of personalliberty and economic usefulness with due regard to the protection of the social order.” In that regard, in lieu of imprisonment, a fine in an amount equal to double the amount of the check involved has been deemed an appropriate penalty for a violation of BP 22.Subsequently, through Administrative Circular No. 13-01, the Supreme Court clarified that it did not intend to remove the penalty of imprisonment but that courts should reserve imposing imprisonment as a penalty for serious cases when the violation of BP 22 was committed in such a way as would negatively affect the social order.

With regard to the second development, failure to establish that a written notice of dishonor was actually received by the maker or drawer of the check is a ground for an acquittal (Rico v. People of the Philippines, G.R. No. 137191, 18 November 2002). Thissecond development is a very real problem faced by lawyers, either as private or public prosecutors, in BP 22 cases. Oftentimes, the only, if not strongest, defense raised by an accused in a BP 22 case is that he/ she never received any notice of dishonor.Numerous BP 22 cases have been dismissed and/ or have resulted in the acquittal of the accused on the ground that the prosecution failed to establish that the accused had actually received a notice of dishonor. In order to appreciate the impact of this development, we must realize how difficult it really is to prove actual receipt of thenotice of dishonor.

First, the prosecution in a BP 22 case must establish that (a) notice of dishonor was sent to the issuer of the dishonored check and (b) that the same was actually received (Yu Oh v. Court of Appeals, et al. G.R. No. 125297, 6 June 2003). A notice of dishonor may besent to the maker or drawer of the dishonored check by (1) by personal service upon the issuer or (2) by registered mail. If the notice of dishonor is sent by registered mail, the fact of sending the notice of dishonor is established by the registry receipt, the registryreturn card, and an affidavit executed by the person who mailed the notice of dishonor detailing the circumstances of the mailing (Victor Ting “Teng See”, et al. v. Court of Appeals, et al., G.R. No. 140665, 13 November 2000).

As to establishing actual receipt, the prosecution must also prove that the signature appearing on the registry return card or notice of dishonor, in case of personal service, belongs to that of the issuer of the dishonored check or, at the very least, to his duly authorized agent. In the latter case, the prosecution must establish the capacity and authority of such person as agent. An illegible signature, such as when a recipient merely signs his/ her initials on the registry return card or notice of dishonor, as the case may be,does not prove that the issuer actually received the notice of dishonor (Victor Ting “Teng See”, et al. v. Court of Appeals, et al., G.R. No. 140665, 13 November 2000). It is also crucial that the registry return card or the notice of dishonor indicate the date itwas received in order to fix the start of the five (5) day period within which the maker or drawer of the check must pay or make arrangements for the payment of the amount of the check (Section 1, BP 22)(Danao v. Court of Appeals, G.R. No. 122353, 6 June2001).

The notice of dishonor may be sent to the office of the maker or drawer of the dishonored check but he must receive the notice personally or through his authorized agent. A corporation or an officer of a corporation that receives a notice of dishonor addressed to one of its employees has no obligation to forward the notice to the employee concerned. Thus, such receipt is not the receipt contemplated by BP 22 (Lao v. Court of Appeals, G.R. No. 119178, 20 June 1997). A notice of dishonor may also be sent tothe residence of the maker or drawer of the dishonored check and received by him/her, the housemaids or houseboys who are deemed to have a special power-of-attorney to receive mail in behalf of the addressee, or any member of the family of sufficientage or discretion (Petilla v. Court of Appeals, G.R. No. 150792, 3 March 2004). Notably, the notice of dishonor may be sent to, and received by, the maker or drawer of the dishonored check wherever he

may be found as long as the fact and date of receiptare established.

Based on the foregoing, it is easy to see how, as a practical matter, it is very difficult to establish actual receipt of the notice of dishonor. Save for physically forcing the issuer of the check to receive the notice of dishonor, obtaining proof of personal receipt may prove to be a daunting task, if not an outright impracticable one. Needless to say, most intended recipients of the notice of dishonor may even refuse to receive the notice. With respect toreceipt of the notice of dishonor by a supposed authorized agent, it is the usual defense to deny knowing the alleged agent. On the other hand, in the event that it was the househelp who received the notice of dishonor, the maker or drawer may conceivably evenresort to sending the househelp home to the province or to another employer, then deny that the said househelp was ever in his/ her employ. There are, for the most part, no employment records for househelp. Finally, it may not be realistic to expect thatthe registry return card for the notice of dishonor could clearly state the name and signature of the recipient, since, in practice, the postman will accept a simple initial from the recipient, which in no way gives any clue as to the identity of the said recipient. In any event, the postman is not to blame since he/ she cannot compel anybody to sign the registry return card against their will. The question now is, how do you prove that the maker or drawer of the dishonored check actually received the notice of dishonor underany of the above hypothetical circumstances?

By Atty. John Philip C. SiaoReproduced from the Point of Law column of The Philippine StarPublished January 23, 2007 

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Republic of the PhilippinesSupreme Court

Manila 

SECOND DIVISIONJAIME ALFEREZ,                           Petitioner,                                                             

                   - versus -     PEOPLE OF THE PHILIPPINES and PINGPING CO,                           Respondents.

 

G.R. No. 182301 Present: CARPIO, J.,     Chairperson,  NACHURA,PERALTA,ABAD, andMENDOZA, JJ.   Promulgated:    January 31, 2011 

 x------------------------------------------------------------------------------------x 

DECISIONNACHURA, J.:                   This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals (CA) Decision[1] dated December 13, 2007 and Resolution[2] dated March 4, 2008 in CA-G.R. CEB-CR No. 00300.           The facts of the case, as culled from the records, are as follows: 

Petitioner Jaime Alferez purchased construction materials from Cebu ABC Sales Commercial. As payment for the goods, he issued three (3) checks for the total amount of P830,998.40. However, the checks were dishonored for having been drawn against a closed account. Petitioner was thus charged with three (3) counts of violation of Batas Pambansa Bilang (B.P. Blg.) 22 before the Municipal Trial

Court in Cities (MTCC), Cebu City. The cases were raffled to Branch 3 and docketed as Criminal Case Nos. 40985-R to 40987-R.[3]  During the trial, the prosecution presented its lone witness, private complainant Pingping Co.[4] Thereafter, the prosecution formally offered the following documentary evidence: 

1.      BPI Check No. 492089 dated 29 April 1994 in the sum of P78, 889.95;2.      BPI Check No. 492010 dated 22 June 1994 in the sum of P30,745.90;3.      BPI Check No. 492011 dated 22 June 1994 in the sum of P721,362.55;4.      The demand letter dated 7 July 1994 addressed to petitioner;5.      The registry receipt of the Post Office;6.      The face of the Registry Return Receipt;7.      The dorsal side of the Registry Return Receipt;8.      The Returned Check Ticket dated 23 June 1994; and9.      The reason for the dishonor.[5]   Instead of presenting evidence, petitioner filed a Demurrer to Evidence [6] on August 8, 2003, or

approximately ten (10) months after the prosecution rested its case. Petitioner averred that the prosecution failed to show that he received the notice of dishonor or demand letter.

 On March 4, 2005, the MTCC issued a resolution[7] denying petitioner’s Demurrer to Evidence,

and rendering judgment finding petitioner guilty as charged, the dispositive portion of which reads: 

WHEREFORE, the Court finds the accused guilty beyond reasonable doubt of the crime of issuing bouncing checks as defined and penalized under Section 1 of Batas Pambansa Blg. 22 and hereby sentences the accused the following:

 1.  To pay a fine of Php830,998.40 and in case of insolvency to suffer

subsidiary imprisonment; 2.  To pay private complainant the total face value of the checks in the amount

of Php830,998.40 plus 1% interest per month beginning from the filing of the complaint.

 SO ORDERED.[8]

  Aggrieved, petitioner appealed to the Regional Trial Court (RTC), Branch 21, Cebu City. The

RTC rendered Judgment[9] affirming in toto the MTCC decision. Petitioner moved for reconsideration, but it was denied in an Order[10] dated December 16, 2005. In the same Order, the RTC modified the MTCC resolution by sentencing petitioner to suffer the penalty of imprisonment for six (6) months for each count of violation of B.P Blg. 22, instead of fine as originally imposed.

 Undaunted, petitioner elevated the matter to the CA via a petition for review under Rule 42 of

the Rules of Court. In the assailed Decision, the CA dismissed the petition for lack of merit.  It sustained petitioner’s conviction as the elements of the crime had been sufficiently established. As to the service on petitioner of the notice of dishonor, the appellate court pointed out that petitioner did not testify, and that he did not object to the prosecution’s evidence aimed at proving the fact of

receipt of the notice of dishonor. Consequently, the registry receipt and the return card adequately show the fact of receipt. As to petitioner’s contention that he was denied his right to present evidence after the denial of his demurrer to evidence, the CA held that there was no such denial since it was merely the consequence of the filing of demurrer without leave of court. Finally, as to the imposition of the penalty of imprisonment instead of fine, the CA found no grave abuse of discretion on the part of the RTC since it was shown that petitioner acted in bad faith.[11]

 On March 4, 2008, the CA denied petitioner’s motion for reconsideration. Hence, this petition

anchored on the following issues: Whether the Registry Receipt and Registry Return Receipt alone without presenting the person who mailed and/or served the demand letter is sufficient notice of dishonor as required by BP 22. Whether the filing of the Demurrer of (sic) Evidence without leave and denied by the trial court is a waiver of the right of the petitioner (the accused before the trial court) to present his evidence in support and to rebut the evidence of the respondent particularly with respect to the civil aspect of the case. On the alternative (if the petitioner is guilty), whether the accused should only be mete[d] the penalty of fine as imposed by the trial court (MTCC).[12]

 The petition is partly meritorious. After a careful evaluation of the records of the case, we believe and so hold that the totality of

the evidence presented does not support petitioner’s conviction for violation of B.P. Blg. 22. Section 1 of B.P. Blg. 22 defines the offense, as follows:[13]

 Section 1. Checks without sufficient funds.—Any person who makes or draws

and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the court.

 The same penalty shall be imposed upon any person who, having sufficient

funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank. 

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.  

Accordingly, this Court has held that the elements of the crime are, as follows: (1) the making, drawing, and issuance of any check to apply on 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.[14]

 In this case, the first and third elements of the crime have been adequately established. The

prosecution, however, failed to prove the second element. Because this element involves a state of mind which is difficult to establish, Section 2 of B.P. Blg. 22 creates a presumption of knowledge of insufficiency of funds under the following circumstances:[15]

 Sec. 2. Evidence of knowledge of insufficient funds. — The making, drawing,

and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

  

In Suarez v. People,[16] which is on all fours with the instant case, two Informations for violation of B.P. Blg. 22 were filed against petitioner therein.  After the prosecution presented its evidence, petitioner filed a Demurrer to Evidence without leave of court on the ground that no notice of dishonor had been sent to and received by him.  When the case reached this Court, we acquitted petitioner on reasonable doubt as there was insufficient proof that he received notice of dishonor.  We explained that:

 The presumption arises when it is proved that the issuer had received this notice, and that within five banking days from its receipt, he failed to pay the amount of the check or to make arrangements for its payment. The full payment of the amount appearing in the check within five banking days from notice of dishonor is a complete defense. Accordingly, procedural due process requires that a notice of dishonor be sent to and received by the petitioner to afford the opportunity to avert prosecution under B.P. Blg. 22. 

x x x.  [I]t is not enough for the prosecution to prove that a notice of dishonor was sent to the petitioner. It is also incumbent upon the prosecution to show “that the drawer of the check received the said notice because the fact of service provided for in the law is reckoned from receipt of such notice of dishonor by the drawee of the check.             A review of the records shows that the prosecution did not prove that the petitioner received the notice of dishonor. Registry return cards must be authenticated to serve as proof of receipt of letters sent through registered mail.[17]     In this case, the prosecution merely presented a copy of the demand letter, together with the

registry receipt and the return card, allegedly sent to petitioner. However, there was no attempt to authenticate or identify the signature on the registry return card.[18] Receipts for registered letters and

return receipts do not by themselves prove receipt; they must be properly authenticated to serve as proof of receipt of the letter, claimed to be a notice of dishonor.[19] To be sure, the presentation of the registry card with an unauthenticated signature, does not meet the required proof beyond reasonable doubt that petitioner received such notice. It is not enough for the prosecution to prove that a notice of dishonor was sent to the drawee of the check. The prosecution must also prove actual receipt of said notice, because the fact of service provided for in the law is reckoned from receipt of such notice of dishonor by the drawee of the check.[20] The burden of proving notice rests upon the party asserting its existence.  Ordinarily, preponderance   of evidence is sufficient to prove notice. In criminal cases, however, the quantum of proof required is proof beyond reasonable doubt. Hence, for B.P. Blg. 22 cases, there should be clear proof of notice.[21]  Moreover, for notice by mail, it must appear that the same was served on the addressee or a duly authorized agent of the addressee.  From the registry receipt alone, it is possible that petitioner or his authorized agent did receive the demand letter.[22]  Possibilities, however, cannot replace proof beyond reasonable doubt. [23] The consistent rule is that penal statutes have to be construed strictly against the State and liberally in favor of the accused.[24]   The absence of a notice of dishonor necessarily deprives the accused an opportunity to preclude a criminal prosecution.[25] As there is insufficient proof that petitioner received the notice of dishonor, the presumption that he had knowledge of insufficiency of funds cannot arise.[26]

 This is so even if petitioner did not present his evidence to rebut the documentary evidence of

the prosecution as he had waived his right to present evidence for having filed a demurrer to evidence without leave of court. We must emphasize that the prosecution has the burden of proving beyond reasonable doubt each element of the crime as its case will rise or fall on the strength of its own evidence, never on the weakness or even absence of that of the defense. [27] The failure of the prosecution to prove the receipt by petitioner of the requisite notice of dishonor and that he was given at least five (5) banking days within which to settle his account constitutes sufficient ground for his acquittal.[28]

 Nonetheless, petitioner’s acquittal for failure of the prosecution to prove all elements of the

offense beyond reasonable doubt does not include the extinguishment of his civil liability for the dishonored checks.[29] In case of acquittal, the accused may still be adjudged civilly liable. The extinction of the penal action does not carry with it the extinction of the civil action where (a) the acquittal is based on reasonable doubt as only preponderance of evidence is required; (b) the court declares that the liability of the accused is only civil; and (c) the civil liability of the accused does not arise from or is not based upon the crime of which the accused was acquitted. [30] In a number of similar cases, we have held that an acquittal based on reasonable doubt does not preclude the award of civil damages.[31] 

           In view of the foregoing, we sustain the findings of the trial court, as affirmed by the CA, as to petitioner’s civil liability.

 Finally, in answer to petitioner’s insistence that he should have been allowed by the trial court

to present his evidence on the civil aspect of the case, suffice it to state that when petitioner filed a demurrer to evidence without leave of court, the whole case was submitted for judgment on the basis of the evidence presented by the prosecution as the accused is deemed to have waived the right to present evidence. At that juncture, the court is called upon to decide the case including its civil aspect.[32]

 WHEREFORE, premises considered, the Court of Appeals Decision dated December 13, 2007

and Resolution dated March 4, 2008 in CA-G.R. CEB-CR No. 00300 are MODIFIED. Petitioner Jaime Alferez is ACQUITTED on reasonable doubt of violation of B.P. Blg. 22. However, the civil liability imposed on petitioner isAFFIRMED.

 SO ORDERED. 

                                                         ANTONIO EDUARDO B. NACHURA

                                      Associate Justice   WE CONCUR:  

ANTONIO T. CARPIOAssociate Justice

Chairperson   

DIOSDADO M. PERALTAAssociate Justice

ROBERTO A. ABADAssociate Justice

   

JOSE CATRAL MENDOZAAssociate Justice

   

ATTESTATION 

          I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.                                                                      ANTONIO T. CARPIO                                                                      Associate Justice                                                             Chairperson, Second Division

CERTIFICATION 

          Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.                                                                         RENATO C. CORONA                                                                             Chief Justice 

[1]               Penned by Associate Justice Francisco P. Acosta, with Associate Justices Pampio A. Abarintos and Amy C. Lazaro-Javier, concurring; rollo, pp. 16-25.[2]               Id. at 26-27.[3]               CA rollo, p. 18.[4]               Rollo, p. 17.[5]               CA rollo, pp. 22-23.[6]               Id. at 28-31.[7]               Penned by Presiding Judge Gil R. Acosta; id. at 18-21.[8]               Id. at 21.[9]               Penned by Presiding Judge Eric F. Menchavez; id. at 14-15.[10]             Id. at 16-17.[11]             Rollo, pp. 19-24.[12]             Id. at 6.[13]             King v. People, 377 Phil. 692, 706 (1999).[14]             Suarez v. People, G.R. No. 172573, June 19, 2008, 555 SCRA 238,  245; Moster v. People, G.R. No. 167461, February 19, 2008, 546 SCRA 287, 296.[15]             Suarez v. People, supra, at 245; King v. People, supra note 13, at 708-709.[16]             Supra.[17]             Id. at 246.[18]             Moster v. People, supra note 14, at 297-298.[19]             Id. at 298, citing Rico v. People, G.R. No. 137191, November 18, 2002, 392 SCRA 61, 73.[20]             Moster v. People, supra, at 299, citing Cabrera v. People, 454 Phil. 759, 774 (2003).[21]             Cabrera v. People, supra, at 774.[22]             Ting v. Court of Appeals, 398 Phil. 481, 494 (2000).[23]             Moster v. People, supra note 14, at 299.[24]             Ambito v. People, G.R. No. 127327, February 13, 2009, 579 SCRA 69, 94.[25]             Id. at 92.[26]             Suarez v. People, supra note 14, at 247.[27]             Moster v. People, supra note 14, at 299; King v. People, supra note 13, at 711.[28]             Moster v. People, supra, at 299.[29]             Ambito v. People,  supra note 24, at 94.[30]             Hun Hyung Park v. Eung Won Choi, G.R. No. 165496, February 12, 2007, 515 SCRA 502, 513.[31]             Ambito v. People,  supra note 24, at 94, citing Bax v. People, G.R. No. 149858, September 5, 2007, 532 SCRA 284, 292-293; Rico v. People, supra note 19, at 74; Domangsang v. Court of Appeals, G.R. No. 139292, December 5, 2000, 347 SCRA 75, 84-85.[32]             Hun Hyung Park v. Eung Won Choi, supra note 30, at 512-513.

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