92
ARTICLE 315 AMBITO vs. PEOPLE (2009) D E C I S I O N LEONARDO-DE CASTRO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure of the Decision [1] of respondent Court of Appeals (CA), dated March 29, 1996, in CA-G.R. CR No. 12727, entitled People of the Philippines v. Liberata Ambito, et al., filed by petitioners Liberata Ambito, Basilio Ambito and Crisanto Ambito. The assailed CA decision affirmed the judgment of conviction of multiple charges of violation of Batas Pambansa Blg. 22 (B.P. Blg. 22) meted upon co-petitioner Basilio Ambito; multiple charges of the complex offense of Estafa through Falsification of Commercial Documents, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code (RPC), meted upon co-petitioners Liberata and Basilio Ambito; and two charges of Falsification of Commercial Document, as defined and penalized under Articles 171 and 172 of the RPC, meted upon co-petitioner Crisanto Ambito in the Decision [2] rendered by the Regional Trial Court (RTC) of Iloilo City, Branch 26, dated November 29, 1990, in the consolidated Criminal Case Nos. 14556 to 14587. The facts of this case, as summarized in the assailed CA decision, are as follows: Basilio Ambito and Liberata Ambito were the principal owners of two rural banks in the province of Iloilo namely, the Community Rural Bank of Leon, Inc., in the municipality of Leon, and the Rural Bank of Banate, Inc. in the municipality of Banate. In addition, the spouses Ambito were the owners of Casette [Kajzette]

estafa, bp 22

Embed Size (px)

DESCRIPTION

cases

Citation preview

Page 1: estafa, bp 22

ARTICLE 315

AMBITO vs. PEOPLE (2009)

D E C I S I O N LEONARDO-DE CASTRO, J.:  

          Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil

Procedure of the Decision[1] of respondent Court of Appeals (CA), dated March 29, 1996, in CA-

G.R. CR No. 12727, entitled People of the Philippines v. Liberata Ambito, et al., filed by

petitioners Liberata Ambito, Basilio Ambito and Crisanto Ambito.  The assailed CA decision

affirmed the judgment of conviction of multiple charges of violation of Batas Pambansa Blg. 22

(B.P. Blg. 22) meted upon co-petitioner Basilio Ambito; multiple charges of the complex offense

of Estafa through Falsification of Commercial Documents, defined and penalized in Articles 48,

171, 172 and 315 of the Revised Penal Code (RPC), meted upon co-petitioners Liberata and

Basilio Ambito; and two charges of Falsification of Commercial Document, as defined and

penalized under Articles 171 and 172 of the RPC, meted upon co-petitioner Crisanto Ambito in

the Decision[2]rendered by the Regional Trial Court (RTC) of Iloilo City, Branch 26, dated

November 29, 1990, in the consolidated Criminal Case Nos. 14556 to 14587.

 

The facts of this case, as summarized in the assailed CA decision, are as follows:

           Basilio Ambito and Liberata Ambito were the principal owners of two rural banks in the province of Iloilo namely, the Community Rural Bank of Leon, Inc., in the municipality of Leon, and the Rural Bank of Banate, Inc. in the municipality of Banate.  In addition, the spouses Ambito were the owners of Casette [Kajzette] Enterprises, a commercial establishment in Jaro, Iloilo City engaged in procuring farm implements intended for the use of the agricultural loan borrowers of the said banks.  The spouses Ambito obtained their supply of farm implements and spare parts from the Iloilo City branch of Pacific Star Inc. which was then engaged in selling ‘Yanmar’ machineries and spare parts. 

On several occasions in 1979, the spouses Basilio Ambito and Liberata Ambito transacted business with Pacific Star, Inc. whereby they purchased Yanmar machineries and spare parts from the said company allegedly for the use of the loan borrowers of their banks.  In these transactions, the spouses Ambito made down payments in their purchases either in case, in checks or in certificates of time deposit issued by the Rural Bank of Banate, Inc. and the Community Rural Bank of Leon, Inc.

Page 2: estafa, bp 22

 However, when the Manila Banking Corporation (Manila Bank) checks

issued by Basilio Ambito as down payment of their purchases were presented for payment by the drawee bank, the same were dishonored for insufficiency of funds.  These are Check No. 79173946 dated June 20, 1979 in the amount of P39,168.75 (Exh. ‘A’, CC No. 14556); Check No. 79173948 dated June 15, 1979 in the amount of P75,595.00 (Exh. ‘A’, CC 14557); Check No. 79173947 dated June 30, 1979 in the amount ofP45,957.00 (Exh. ‘A’, CC No. 14558); Check No. 79182639 dated October 18, 1979 in the amount ofP4,501.36 (Exh. ‘A’, CC No. 14559); Check No. 79182638 dated September 27, 1979 in the amount ofP1,957.60 (Exh. ‘A’, CC No. 14560); Check No. 79182637 dated September 18, 1979 in the amount of P 2,425.50 (Exh. ‘A’, CC No. 14561) and Check No. 79175930 dated August 9, 1979 in the amount ofP2,875.25 (Exh. ‘A’, CC No. 14562). 

 At the time the spouses Basilio Ambito and Liberata Ambito made

purchases of farm implements from the Pacific Star, Inc. in 1979, the general manager of the Rural Bank of Banate, Inc. was Liberata Ambito herself and the cashier, Marilyn Traje, while the general manager of the Community Rural Bank of Leon, Inc. was Crisanto Ambito, brother of Basilio Ambito, and the cashier, Reynaldo Baron.

 On three separate occasions, Liberata Ambito forced the cashier of the

Rural Bank of Banate, Marilyn Traje, to sign several blank certificates of time deposit and to give the same to her alleging that she needed the said certificates in connection with some transactions involving the bank.  Marilyn Traje at first refused to give Liberata Ambito the said certificates but the latter scolded her, at the same time assuring her that she would be responsible to anybody for the issuance of said certificates including personnel and investigators of the Central Bank tasked with the examination of the accounts of the bank.  Afraid that she would lose her job if she would not follow Liberata Ambito.  Marilyn Traje signed and gave the blank certificates of time deposit to her without receiving any consideration therefore.

 The same thing happened to Reynaldo Baron, the cashier of the

Community Rural Bank of Leon, Inc. who was asked by the spouses Ambito as well as the manager of the bank, Crisanto Ambito, to sign and give blank certificates of time deposit to them. Reynaldo Baron was at first hesitant to accommodate the request of the Ambitos but due to their persistence and considering that they were his superiors and owners of the bank, Baron signed the certificates of time deposit in blank and gave the same to the Ambitos.  When Baron asked for the duplicate copies of the certificates, he was told that they were still negotiating with Pacific Star, Inc.  Later, the Ambitos told Baron that the transaction was cancelled and that he should just cause the printing of similar blank certificates by the Apostol Printing Press in IloiloCity.  Baron got scared and objected to the idea vouched to him by the Ambitos until finally he resigned from his job because he could no longer withstand the pressure exerted on him involving transactions he believed were anomalous.  Baron worked as cashier of the Community Rural Bank of Leon, Inc. from August to December 1979.  When the Central Bank investigators came

Page 3: estafa, bp 22

and conducted examination of the records and transactions of the bank, Baron reported the anomalies to them.

 The blank certificates of time deposit of the Rural Bank of Banate, Inc.

obtained by the spouses Basilio and Liberata Ambito from Marilyn Traje were filled up with the amounts of deposit and the name of the Pacific Star, Inc. as depositor and used by the spouses as down payments of the purchase price of the machineries and spare parts purchased from the Pacific Star, Inc.  These certificates of time deposit are as follows:

1.     Certificate of Time Deposit No. 079, due date May 7, 1979, in the amount of P7,276.50 (Exh. ‘A’, Crim. Case No. 14563) as down payment of the articles covered by Sales Invoice No. 3002 dated November 9, 1978 of Pacific Star, Inc. (Exh. ‘A-1’, Crim. Case No. 14563);

2.     Certificate of Time Deposit Nos. 083 and 085 both with due date May 14, 1979 in the amounts ofP17,283.00 and P3,132.00, respectively (Exhs. ‘A’ and ‘A-1’, Crim. Case No. 14564) as down payment. Sales Invoice Nos. 3003, 3004 and 3005 (Exhs. ‘A-1’, ‘A-2’ and ‘A-3’, Crim. Case No. 14564);

3.     Certificate of Time Deposit No. 086, due date May 21, 1979, in the amount of P11,896.50 (Exh. ‘A’, Crim. Case No. 14565) as down payment, Sales Invoice No. 3006 (Exh. ‘A-1’, Crim. Case No. 14565);

4.     Certificate of Time Deposit No. 087, due date May 27, 1979 (Exh. ‘A’, Crim. Case No. 14566) in the amount of P7,945.00 as down payment, Sales Invoice No. 3007 dated November 27, 1978 and Sales Invoice No. 3008 dated November 28, 1978 in the total amount ofP7,945.00 (Exhs. ‘A-1’ and ‘A-2’, Crim. Case No. 14566);

5.     Certificate of Time Deposit No. 089, due date May 29, 1979, in the amount of P17,090.50 (Exh. ‘A’, Crim. Case No. 14567) as down payment, Sales Invoices Nos. 3009 and 3010 both date December 1, 1978 (Exhs. ‘A-1’ and ‘A-2’, Crim. Case No. 14567);

6.     Certificate of Time Deposit No. 095, due date June 20, 1979 in the amount of P24,062.50 (Exh. ‘A’, Crim. Case No. 14568) as down payment in Sales Invoice Nos. 3031 dated December 11, 1978 (Exh. ‘A-1’, Crim. Case No. 14568);

7.     Certificate of Time Deposit No. 089, due date May 29, 1979, in the amount of P17,090.50 (Exh. ‘A’, Crim. Case No. 14567) as down payment in Sales Invoice No. 3035 (Exh. ‘A-1’, Crim. Case No. 14567);

Page 4: estafa, bp 22

8.     Certificate of Time Deposit No. 097, due date June 13, 1979, in the amount of P5,827.50 (Exh. ‘A’, Crim. Case No. 14570) as down payment in Sales Invoice Nos. 3066 and 3067 both dated January 3, 1979 (Exhs. ‘A-1’ and ‘A-2’, Crim. Case No. 14570);

9.     Certificate of Time Deposit No. 098, due date June 16, 1979, in the amount of P8,365.00 (Exh. ‘A’, Crim. Case No. 14571) as down payment in Sales Invoice Nos. 3081 dated January 10, 1979 and Sales Invoice No. 3091 dated January 16, 1979 (Exhs. ‘A-1’ and ‘A-2’, Crim. Case No. 14571);

10. Certificate of Time Deposit No. 099, due date July 22, 1979, in the amount of P27,226.50 (Exh. ‘A’, Crim. Case No. 14572 as down payment in Sales Invoice No. 3097 dated January 23, 1979 (Exh. ‘A-1’, Crim. Case No. 14572);

11. Certificate of Time Deposit No. 100, due date July 25, 1979, in the amount of P9,380.00 (Exh. ‘A’, Crim. Case No. 14573) as down payment in Sales Invoice No. 3099 dated January 25, 1979 (Exh. ‘A-1’, Crim. Case No. 14573);

12. Certificate of Time Deposit No. 101, due date July 28, 1979 in the amount of P3,132.50 (Exh. ‘A’; Crim. Case No. 14574) as down payment in Sales Invoice No. 3106 (Exh. ‘A-1’, Crim. Case No. 14574);

13. Certificate of Time Deposit No. 102, due date August 15, 1979 in the amount of P21,420.00 (Exh. ‘A’, Crim. Case No. 14575) in payment of Sales Invoice No. 3120 dated February 8, 1979, Sales Invoice No, 3121 dated February 8, 1979 and Sales Invoice No. 3126 dated February 12, 1979, (Exhs. ‘A-1’, ‘A-2’ and ‘A-3’, Crim Case No. 14575);

14. Certificate of Time Deposit No. 105, due date August 14, 1979, in the amount of P25,375.00 (Exh. ‘A’, Crim. Case No. 14576) as down payment of Sales Invoice No. 3129 dated February 15, 1979 (Exh. ‘A-1’, Crim. Case No. 14576);

15. Certificate of Time Deposit No. 106, due date August 16, 1979, in the amount of P58,712.50 (Exh. ‘A’, Crim. Case No. 14577) as down payment of Sales Invoice No. 3134 dated February 17, 1977 (Exh. ‘A-1’, Crim. Case No. 14577);

16. Certificate of Time Deposit No. 107, due date August 21, 1979, in the amount of P16,205.00 (Exh. ‘A’, Crim. Case No. 14578) and Certificate of Time Deposit No. 104, due date September 18, 1979, in the amount of P2,730.00 (Exh. ‘A-1’, Crim. Case No. 14578) as down payment in Sales Invoice No. 3137 dated February 22, 1979 and Sales Invoice No. 3178 dated March 22, 1979;

Page 5: estafa, bp 22

17. Certificate of Time Deposit No. 108, due date October 15, 1979, in the amount of P78,277.50 (Exh. ‘A’, Crim. Case No. 14579) as down payment in Sales Invoice Nos. 3215, 3216 and 3217 all dated April 18, 1979, (Exhs. ‘A-1’, ‘A-2’ and ‘A-3’, Crim. Case No. 14579);

18. Certificate of Time Deposit No. 109, due date October 16, 1979, in the amount of P8,557.50 (Exh. ‘A’, Crim. Case No. 14580) as down payment in Sales Invoice No. 3221 dated April 19, 1979 (Exh. ‘A-1’, Crim. Case No. 14580);

19. Certificate of Time Deposit No. 110, due date October 22, 1979, in the amount of P38,529.75 (Exh. ‘A’, Crim. Case No. 14581) as down payment in Sales Invoice No. 3240 and 3241 both dated April 25, 1979 (Exhs. ‘A-1’ and ‘A-2’, Crim. Case No. 145810);

20. Certificate of Time Deposit No. 111, due date October 29, 1979, in the amount of P7,218.75 (Exh. ‘A’, Crim. Case No. 14582) as down payment in Sales Invoice No. 3409 dated May 2, 1979 (Exh. ‘A-1’, Crim. Case No. 14582);

21. Certificates of Time Deposit Nos. 112, 113, 114, 115, 116, 117 and 118 all dated November 1, 1979 in the amounts of P57,750.00,P93,933.00, P21,393.75,P12,285.00, P13,860.00,P20,002.50 and P156,555.00 respectively (Exhs. ‘A’, ‘A-1’, ‘A-2’, ‘A-3’, ‘A-4’, ‘A-5’, ‘A-6’, Crim. Case No. 14583) as down payment in Sales Invoice Nos. 3423 to 3429, inclusive (Exhs. ‘A-7’ to ‘A-13’, inclusive, Crim. Case No. 14583);

22. Certificate of Time Deposit No. 119, due date December 18, 1979, in the amount of P5,892.25 (Exh. ‘A’, Crim. Case No. 14584) as down payment in Sales Invoice No. 3505 dated June 21, 1979 (Exh. ‘A-1’, Crim. Case No. 14584);

23. Certificate of Time Deposit No. 134, due date January 23, 1980, in the amount of P3,984.00 (Exh. ‘A’, Crim. Case No. 14585) as down payment in Sales Invoice No. 3272 dated July 27, 1979 (Exh. ‘A-1’, Crim. Case No. 14585);

The certificates of time deposit of the Community Rural Bank of Leon found to have been falsified are (1) Certificate of Time Deposit No. 039 , due date February 4, 1980 in the amount ofP32,555.25 (Exh. ‘A’, Crim. Case No. 14586) and (2) Certificate of Time Deposit No. 040, due date February 14, 1980 in the amount of P9,103.19 (Exh. ‘A’, Crim. Case No. 14587).

The said certificates of time deposit supposedly issued by the Rural Bank of the Banate, Inc. and the Community Rural Bank of Leon, Inc. were unfunded and not covered by any deposit so that when presented for redemption by the (sic) Pacific Star, Inc., the same were not honored.  As a

Page 6: estafa, bp 22

consequence, Pacific Star, Inc. suffered actual damages in the amounts representing the total value of the machineries and spare parts sold and delivered by the complainant to the Ambitos and the latter failed and refused to pay the same despite demands on them.

In view of the anomalous transactions entered into by the Ambitos, both the Rural Bank of Banate, Inc. and the Community Rural Bank of Leon, Inc. became insolvent and so sometime in May 7, 1980, the Central Bank of the Philippines placed both banks under receivership and liquidation.  Maria Luz Preires, bank examiner of the Central Bank, was appointed deputy receiver and later deputy liquidator of the Community Rural Bank of Leon.  The Central Bank took over the affairs and records of the banks including their deposits, assets and liabilities. Records showed no certificate of time deposit in the name of Pacific Star, Inc. properly funded and covered by any deposit. Anomalous issuances of certificates of time deposit were uncovered as, for instance, Community Rural Bank of Leon, Inc.  Certificates of Time Deposit Nos. 039 (Exh. ‘A’, Crim. Case No. 14586 and 040 (Exh. ‘A’, Crim. Case No. 14587) which were supposed to be in the name of Pacific Star, Inc. were actually issued in the name of Paciencia Cantara on October 17, 1979 and Francisco Alinsao on November 19, 1979 and only in the amounts of P1,000.00 andP3,000.00, respectively (Exh. ‘B’, Crim. Cases Nos. 14586 and 14587).

Subsequently, on complaint of Pacific Star, Inc., the Ambitos were charged of violations of B.P. Blg. 22, Falsification and Estafa through Falsification of Commercial Document under the Informations filed in the aforecited cases.

After due proceedings, the Court a quo, promulgated a Decision, dated November 29, 1990, the decretal portion of which reads as follows:

WHEREFORE, in Criminal Cases Nos. 14556, 14557, 14558, 14559, 14560, 14561 and 14562, the Court hereby finds the accused, Basilio Ambito, guilty beyond reasonable doubt of the offense of violation of the provisions of Section 1 of Batas Pambansa Blg. 22 and hereby sentences the said accused to suffer in each of the seven cases, the penalty of imprisonment of SIX (6) MONTHS and ONE (1) DAY and to indemnify the offended party, Pacific Star, Inc. the total sum of  P173,480.55, with interest thereon at the legal rate of 12% per annum from the date of filing of the Informations on May 10, 1982, until paid, without subsidiary imprisonment in case of insolvency, and to pay the costs.

In Criminal Cases Nos. 14574 and 14585, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the complex offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer in each case, an indeterminate sentence ranging from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY of prision correccional as

Page 7: estafa, bp 22

minimum to FOUR (4) YEARS, NINE (9) MONTHS and ELEVEN (11) DAYS of prision correccional as maximum, and pay a fine of P3,000.00 and to indemnify the offended party, Pacific Star, Inc. the total sum of P18,287.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law, and to pay the costs.

In Criminal Cases Nos. 14563, 14570, 14580, 14582 and 14584, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the complex crime of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from TWO (2) YEARS, ELEVEN (11) MONTHS and ELEVEN (11) DAYS of prision correccional as minimum, to SIX (6) YEARS, EIGHT (8) MONTHS and TWENTY ONE (21) DAYS of prision mayor as maximum, and to indemnify the offended party, Pacific Star, Inc., the total sum of P83,095.00, with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law, and to pay the costs.

In Criminal Cases Nos. 14566, 14569, 14571 and 14573, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the complex offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from FOUR (4) YEARS, TWO (2) MONTHS of prision correccional as minimum, to EIGHT (8) YEARS of prision mayor as maximum, and to indemnify the offended party, Pacific Star, Inc., the total sum of P103,900.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

In Criminal Cases Nos. 14564 and 14578, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the complex offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from FOUR (4) YEARS, TWO (2) MONTHS and ONE (1) DAY of

Page 8: estafa, bp 22

prision correccional as minimum, to ELEVEN (11) YEARS of prision mayor as maximum, and to indemnify the offended party, Pacific Star, Inc., the total sum of P116,530.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

In Criminal Cases Nos. 14565, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the complex offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from FOUR (4) YEARS and TWO (2) MONTHS of prision correccional as minimum, to NINE (9) YEARS of prision mayor as maximum, and to indemnify the offended party, Pacific Star, Inc., the sum ofP35,190.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

In Criminal Cases Nos. 14567, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused each, to suffer an indeterminate prison sentence ranging from FOUR (4) YEARS and TWO (2) MONTHS of prision correccional as minimum, to TEN (10) YEARS of prision mayor as maximum, and to indemnify the offended party, Pacific Star, Inc., the sum of P50,555.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

In Criminal Cases Nos. 14568 and 14575, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from FOUR (4) YEARS, TWO (2) MONTHS and ONE (1) DAY of prision correccional as minimum, to TWELVE (12) YEARS of prision mayor as maximum, and to indemnify the offended party, Pacific Star, Inc., the sum of P134,375.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the

Page 9: estafa, bp 22

Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

In Criminal Cases Nos. 14572, 14576 and 14581, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from SIX (6) YEARS and ONE (1) DAY of prision mayor as minimum, to THIRTEEN (13) YEARS of reclusion temporal as maximum, and to indemnify the offended party, Pacific Star, Inc., the total sum of P235,170.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

In Criminal Cases Nos. 14577, 14579 and 14583, the Court hereby finds the accused, Basilio Ambito and Liberata Ambito, guilty beyond reasonable doubt of the complex offense of Estafa thru Falsification of Commercial Document, defined and penalized in Articles 48, 171, 172 and 315 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these cases, an indeterminate prison sentence ranging from TEN (10) YEARS and ONE (1) DAY of prision mayor as minimum, to TWENTY (20) YEARS of reclusion temporal as maximum, and to indemnify the offended party, Pacific Star, Inc., the total sum ofP1,110,500.00 with interests thereon at the legal rate of 12% per annum from the date of the filing of the Informations on May 10, 1982 until paid, without subsidiary imprisonment in case of insolvency, together with the accessory penalties provided for by law and to pay costs.

The foregoing penalties imposed upon the accused are, however, subject to the threefold rule as provided for in Article 70 of the Revised Penal Code so that the maximum duration of the accused’ imprisonment shall not be more than three times the most severe of the penalties the total period of which not to exceed Forty (40) years.

In Criminal Cases Nos. 14586 and 14587, the Court hereby finds the accused, Crisanto Ambito, guilty beyond reasonable doubt of the offense of Falsification of Commercial Document, defined and penalized under Articles 171 and 172 of the Revised Penal Code and hereby sentences the said accused to suffer, in each of these two cases, an indeterminate prison sentence ranging from ONE (1) YEAR and ONE (1) DAY of prision correccional as minimum, to FOUR (4) YEARS, TWO (2)

Page 10: estafa, bp 22

MONTHS of prision correccional as maximum, and pay a fine of  P2,000.00, together with the accessory penalties provided for by law, and to pay the costs. For insufficiency of evidence, Basilio Ambito and Liberata Ambito are hereby ACQUITTED of the offenses charged in these Criminal Cases Nos. 14586 and 14587.

On reasonable doubt, the accused Marilyn Traje and Reynaldo Baron, are hereby ACQUITTED of the offense charged in all the criminal cases against them and the bail bonds posted for their provisional liberty are hereby ordered cancelled.[3]

         

After they were convicted by the RTC, petitioners appealed their case to respondent CA

which, in turn, denied their appeal via the assailed CA Decision, the dispositive portion of which

reads as follows:

           IN THE LIGHT OF ALL THE FOREGOING, the assailed Decision is hereby AFFIRMED in toto. With costs against the Appellants. 

                        SO ORDERED.[4]       

 

          Petitioners promptly interposed a Motion for Reconsideration of the adverse CA Decision

but this was succinctly rejected by the CA in its Resolution [5] dated November 8, 1996, hence,

petitioners’ recourse to this Court for review on certiorari.

         

This Court initially denied said Petition for Review on Certiorari[6] through a

Resolution[7] dated January 29, 1997 on the ground that the said petition raised factual

issues.  Undaunted, petitioners filed a Motion for Reconsideration[8] dated February 25, 1997

seeking to persuade this Court to give due course to their petition which this Court granted in a

Resolution[9] dated April 28, 1997, thereby reinstating the petition.  Respondents were required

to file comment on the petition as ordered in the same Resolution. Respondents filed their

Comment[10] on September 9, 1997, while petitioners filed a delayed Reply[11] on September 4,

1998.  In turn, respondents filed a Rejoinder[12] on January 18, 1999.

 

Page 11: estafa, bp 22

On January 17, 2005, this Court issued a Resolution[13] directing both parties to submit

their respective memoranda within thirty (30) days from notice. Respondents submitted their

Memorandum[14] on March 18, 2005 but petitioners failed to submit theirs despite the fact that

this Court had already granted numerous extensions of time to file as requested by petitioners’

counsel.  This Court even resorted to imposing a fine on petitioners’ counsel for his repeated

non-compliance as stated by our Resolution[15] dated March 8, 2006 but to no avail.  Thus, in a

Resolution[16] dated June 20, 2007, this Court resolved to dispense with the filing of petitioners’

memorandum.

 In their Petition,[17] petitioners raised the following grounds:

         A.               THE RESONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN FINDING THE PETITIONERS GUILTY OF THE OFFENSES IMPUTED TO THEM, THERE BEING UNCONTROVERTED EVIDENCE SHOWING THAT FROM THE NATURE OF THE TRANSACTIONS AND DEALINGS BETWEEN THE PETITIONERS AND PSI FOR A LONG PERIOD OF 14 YEARS, THE LIABILITY OF THE PETITIONERS, IF ANY, IS ONLY CIVIL IN NATURE, AND NO CRIMINAL LIABILITY ATTACHES TO THEM. B.               THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN FINDING THE PETITIONERS GUILTY BEYOND REASONABLE DOUBT OF ALL THE OFFENSES IMPUTED TO THEM, THE FACTS OF THE CASE SHOWING THAT THE VALUE OF THE SUBJECT CHECKS AND CCTDS [CREDIT CERTIFICATES OF TIME DEPOSIT] HAVE ALREADY BEEN FULLY PAID PRIOR TO THE INSTITUTION OF THE CRIMINAL CASES BELOW.

 C.               ANENT CRIMINAL CASE NOS. 14556 TO 14562, THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN FINDING THE PETITIONER BASILIO AMBITO GUILTY BEYOND REASONABLE DOUBT OF THE OFFENSE OF VIOLATION OF BP22 DESPITE THE LACK OF ESSENTIAL ELEMENTS OF PRIOR NOTICE OF DISHONOR AND DEMAND FOR PAYMENT OF THE ALLEGED DISHONORED CHECKS GIVEN BY PSI TO PETITIONERS.

 D.               ANENT CRIMINAL CASE NOS. 14556, 14557 AND 14558, THE RESPONDENT COURT COMMITTED A REVERSIBLE ERROR IN FINDING PETITIONER BASILIO AMBITO GUILTY OF VIOLATION OF BP22 DESPITE THAT THE SUBJECT CHECKS WERE NOT PRESENTED FOR PAYMENT WITHIN 90 DAYS FROM DATE OF CHECK.

 

Page 12: estafa, bp 22

E.               ANENT CRIMINAL CASE NOS. 14556 AND 14557, THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN FINDING PETITIONER BASILIO AMBITO GUILTY OF THE OFFENSE OF VIOLATION OF BP22 DESPITE THAT THERE WAS IN EACH CASE NO PROPER EVIDENCE OFFERED TO PROVE THE CRIME CHARGED.

 F.                ANENT CRIMINAL CASE NOS. 14563 TO 14585, THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN FINDING THE PETITIONERS GUILTY BEYOND REASONABLE DOUBT OF THE OFFENSE OF ESTAFA BY FALSE PRETENSES COMPLEXED WITH FALSIFICATION OF A COMMERCIAL DOCUMENT, THERE BEING PROSECUTION EVIDENCE TENDING TO SHOW THE LACK OF THE ELEMENT OF DECEIT. G.              ANENT CRIMINAL CASE NOS. 14563 TO 14585, THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN FINDING THE PETITIONERS GUILTY BEYOND REASONABLE DOUBT OF ESTAFA BY FALSE PRETENSES COMPLEXED WITH FALSIFICATION OF A COMMERCIAL DOCUMENT, IT BEING CLEAR FROM THE FACE OF THE SUBJECT CCTDS THEMSELVES THAT THERE THEREIN EXISTS NO FALSE NARRATION OF FACTS.

 H.               THE RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN REFUSING TO RESOLVE THE ASSIGNED ERROR OF DOUBLE PAYMENT OF IMDEMNITY OR CIVIL LIABILITY ON THE MERITS THEREOF, IT BEING IN A POSITION TO DO SO, AND DESPITE TIMELY NOTICE OF THE PRIOR INSTITUTION OF THE CIVIL CASE INVOLVING THE SAME TRANSACTIONS AS IN THE CASES AT BAR.[18]

 

In essence, petitioners’ recourse to this Court is hinged on their belief that their

conviction in the lower court was not based on proof beyond reasonable doubt and that the

respondent CA failed to perform its duty to fully ascertain whether the prosecution’s evidence

was sufficient enough to warrant a finding that would support their conviction for violation of B.P.

Blg. 22 and for Estafa through Falsification of Commercial Documents.

 

We hold the petition to be meritorious in part. 

 

Anent the issue of whether or not co-petitioner Basilio Ambito’s conviction in Criminal

Case Nos. 14556 to 14562 for the seven (7) counts of violation of B.P. Blg. 22 was in

accordance with law, petitioners argue that he cannot be convicted of the same since the

prosecution allegedly failed to prove the dispensable elements of prior notice of dishonor and

Page 13: estafa, bp 22

demand for payment of the checks at issue.[19] Furthermore, they insist that there is no violation

of B.P. Blg. 22, particularly in Criminal Case Nos. 14556, 14557 and 14558 as the subject

checks therein were presented for payment more than ninety (90) days from date.[20]

 

In response, the Office of the Solicitor General (OSG) asserts that petitioners’ claim of

necessary and indispensable elements of notice of dishonor and demand to pay cannot be

found in the statute defining the essential elements of violation of B.P. Blg. 22.  The OSG further

insists that, from among the said essential elements, there is no particular manner prescribed in

which the person who made and issued the dishonored checks should be notified of the fact of

dishonor.

 

Be that as it may, the OSG avers that as far as the checks subject of the charges of

violation of B.P. Blg. 22 in these criminal cases are concerned, co-petitioner Basilio Ambito had

been more than sufficiently notified of the fact of dishonor because on December 28, 1979,

Pacific Star, Inc. (PSI) filed with Branch 2 of the RTC of Manila a civil complaint for collection

against petitioners, or more than three (3) years before the thirty-two (32) Informations for

violations of B.P. Blg. 22 and for Estafa through Falsification of Commercial Documents were

filed against petitioners on May 10, 1982.  Within that three-year span of time, the OSG points

out, co-petitioner Basilio Ambito failed to pay the value of the checks despite having been

notified of their dishonor. [21]

 

As to petitioners’ contention that the prosecution was not able to prove the indispensable

element that the drawer had knowledge that the checks were not backed up by sufficient funds

since the checks subject of Criminal Case Nos. 14556, 14557 and 14558 were presented for

payment more than ninety (90) days from date, the OSG claims that the said element had been

clearly established by the petitioners’ testimony in the lower court where petitioners contend that

the subject checks were issued only as mere guarantee and, as such, were not supposed to be

deposited as previously agreed by PSI and petitioners. [22]  In any case, the OSG argues that

under Section 2 of B.P. Blg. 22, the maker’s knowledge of the insufficiency of funds is legally

presumed from the dishonor of the check for insufficiency of funds.[23]

Page 14: estafa, bp 22

 

After carefully reviewing the records and the submissions of the parties, we find that the

prosecution’s evidence was inadequate to prove co-petitioner Basilio Ambito’s guilt beyond

reasonable doubt for seven (7) counts of violation of B.P. Blg. 22.

 

The elements of violation of B.P. Blg. 22 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 for the same reason had not the

drawer, without any valid cause, ordered the bank to stop payment.[24]  

 

The gravamen of the offense punished by B.P. Blg. 22 is the act of making or issuing a

worthless check or a check that is dishonored upon its presentation for payment.  It is not the

nonpayment 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.

[25]  Thus, the mere act of issuing a worthless check – whether as a deposit, as a guarantee or

even as evidence of pre-existing debt – is malum prohibitum.[26]

 

In light of the foregoing, petitioners’ contention in the lower court that the subject checks

were only issued as mere guarantee and were not intended for deposit as per agreement with

PSI is not tenable.  Co-petitioner Basilio Ambito would be liable under B.P. Blg. 22 by the mere

fact that he issued the subject checks, provided that the other elements of the crime are

properly proved.

 

With regard to the second element, we note that the law provides for a prima facie rule

of evidence.  A disputable presumption of knowledge of insufficiency of funds in or credit with

Page 15: estafa, bp 22

the bank is assumed from the act of making, drawing, and issuing a check, payment of which is

refused by the drawee bank for insufficiency of funds when presented within 90 days from the

date of issue.  However, such presumption does not arise when the maker or drawer pays or

makes arrangements for the payment of the checkwithin five banking days after receiving

notice that such check had been dishonored.  In order for the maker or drawer to pay the value

thereof or make arrangements for its payment within the period prescribed by law, it is therefore

necessary and indispensable for the maker or drawer to be notified of the dishonor of the check.

 

Under B.P. Blg. 22, the prosecution must prove not only that the accused issued a check

that was subsequently dishonored. It must also establish that the accused was actually notified

that the check was dishonored, and that he or she failed, within five (5) 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 Checks Law cannot prosper.[27]

 

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 sent to and received by the accused.  The accused has a right to

demand – and the basic postulates of fairness require – that the notice of dishonor be actually

sent to and received by the same to afford him/her the opportunity to avert prosecution under

B.P. Blg. 22.[28]

 

In the case at bar, there is nothing in the records that would indicate that co-petitioner

Basilio Ambito was given any notice of dishonor by PSI or by Manila Bank, the drawee bank,

when the subject checks were dishonored for insufficiency of funds upon presentment for

payment.  In fact, all that the OSG can aver regarding this matter is that co-petitioner Basilio

Ambito had been notified of the fact of dishonor since PSI filed a collection case against

petitioners more than three (3) years before the same filed the criminal cases before this Court.

[29]

 

Page 16: estafa, bp 22

Likewise, respondent CA merely cited, in its assailed Decision, co-petitioner Basilio

Ambito’s July 17, 1989 trial court testimony as basis for concluding that he was properly

informed of the dishonor of the subject checks, viz:

             Appellant Basilio’s claim that he was never notified of the dishonor of the checks he issued in partial payments of the purchases Kazette Enterprises made from PSI is belied by his own admission made when he testified in the Court a quo thus: 

x x xQ         Inspite of you agreement they deposited and when         presented they bounce?A         That was in the receipts.Q         So you admit you have presented these checks already marked as Exhibit ‘A’ for the prosecution            for criminal cases Nos. 14556 to 14562, inclusive,        were all returned for insufficiency of funds by the           depository bank?A         Yes, sir. (t.s.n., Ambito, page 35, July 17, 1989) 

Nothwithstanding his notice of the dishonor of the checks, Appellant failed to replace the same with cash or make arrangements with PSI, for the payments of the amounts of the checks.[30]

 

Verily, the aforementioned circumstances are not in accord with the manner or form by

which a notice of dishonor should be made under the law and existing jurisprudence.   

 

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.  The notice of dishonor to the maker of a check must be in writing.[31]

 

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 has previously held 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

Page 17: estafa, bp 22

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.[32]

 

There being no proof that co-petitioner Basilio Ambito was given any written notice either

by PSI or by Manila Bank informing him of the fact that his checks were dishonored and giving

him five (5) banking days within which to make arrangements for payment of the said checks,

the rebuttable presumption that he had knowledge of the insufficiency of his funds has no

application in the present case.

 

Due to the failure of prosecution in this case to prove that co-petitioner Basilio Ambito

was given the requisite notice of dishonor and the opportunity to make arrangements for

payment as provided for under the law, We cannot with moral certainty convict him of violation

of B.P. Blg. 22.

 However, Basilio Ambito’s acquittal for his violations of B.P. Blg. 22 for failure of the

prosecution to prove all elements of the offense beyond reasonable doubt did not entail the

extinguishment of his civil liability for the dishonored checks. In a number of similar cases, [33] we

have held that an acquittal based on reasonable doubt does not preclude the award of civil

damages. The judgment of acquittal extinguishes the liability of the accused for damages only

when it includes a declaration that the facts from which the civil liability might arise did not

exist. Thus, in the case at bar, the trial court’s directive for Basilio Ambito to indemnify PSI the

total sum of  P173,480.55, with interest thereon at the legal rate of 12% per annum from the

date of filing of the Informations on May 10, 1982, until paid, and to pay the costs is affirmed.

 

Anent the question of whether or not petitioner spouses Liberata and Basilio Ambito’s

conviction for the offense of Estafa through Falsification of Commercial Document was proven

beyond reasonable doubt, the petitioners interposed the defense that they cannot be properly

convicted of the same as there was no finding of false narration of facts and of deceit.

 

Petitioners assert that PSI was not deceived by the issuance of the subject credit

certificates of time deposit (CCTDs), which did not contain a false narration of facts, for the

Page 18: estafa, bp 22

reasons that: (i) said CCTDs, which were undated as to their respective dates of issuance, did

not state that funds had already been deposited by PSI; (ii) during the course of their alleged

fourteen-year long business relationship, PSI, which had been accepting said CCTDs, knew that

they were unfunded as said certificates of time deposit were issued to serve as “promissory

notes” to guarantee payment for the balance of the invoice price of the machineries;[34] (iii)

petitioners did not represent to PSI that “the money was already deposited” because the subject

CCTDs were “even postdated”;[35] (iv) the amounts stated in the CCTDs were not

“downpayments” but “CREDIT extended to petitioner Basilio Ambito payable six months after

the sales/purchases were made;[36] (v) petitioners’ obligation is civil in nature because current

and savings deposits constitute loans to a bank and, thus, a CCTD is an evidence of a simple

loan;[37](vi) the essential element of fraud was absent because PSI knew that the CCTDs issued

to it by petitioners were not covered by funds because it knew that the deposits were yet to be

made when the farmers, to whom Basilio Ambito resold on credit the machineries, shall have

deposited in the rural banks their payments for those machineries;[38] (vii) the subject certificates

of time deposit issued to PSI were not ordinary certificates of time deposit but “CREDIT

certificates of Time Deposit” because the term “credit” indicates a “deferred or delayed nature of

the payment,” thus, signifying a promise to pay at a future date; [39] (viii) PSI was not defrauded

as it gave discounts in its sales invoices if petitioners paid in full the value of the certificates “on

or before 180 days” from delivery.  By giving discounts for early payment, it was thus aware of

the possibility that said certificates might not be funded when they fell due; [40] (ix) the sales

invoices issued by PSI gave it the right to institute civil actions only and not criminal actions;

[41] and (x) petitioners had already performed their obligations to PSI by way of the payment of

the amount ofP300,000.00 and the return of one unit Kubota machinery valued at P 28,000.00.

[42]

 

We are not persuaded.  We find no reason to disturb the identical findings of the CA

and the RTC regarding the particular circumstances surrounding the petitioners’ conviction of

Estafa through Falsification of Commercial Documents because the same are adequately

supported by the evidence on record.

 

Page 19: estafa, bp 22

It is not the function of this Court to analyze or weigh evidence all over again, unless

there is a showing that the findings of the lower court are totally devoid of support or are

glaringly erroneous as to constitute palpable error or grave abuse of discretion.[43]

 

The elements of Estafa by means of deceit, whether committed by false pretenses or

concealment, are the following – (a) that there must be a false pretense, fraudulent act or

fraudulent means. (b) That such false pretense, fraudulent act or fraudulent means must be

made or executed prior to or simultaneous with the commission of the fraud. (c) That the

offended party must have relied on the false pretense, fraudulent act or fraudulent means, that

is, he was induced to part with his money or property because of the false pretense, fraudulent

act or fraudulent means. (d) That as a result thereof, the offended party suffered damage.[44]

 

In the prosecution for Estafa under Article 315, paragraph 2(a) of the RPC, [45] it is

indispensable that the element of deceit, consisting in the false statement or fraudulent

representation of the accused, be made prior to, or at least simultaneously with, the delivery of

the thing by the complainant.

 

The false pretense or fraudulent act must be committed prior to or simultaneously with

the commission of the fraud, it being essential that such false statement or representation

constitutes the very cause or the only motive which induces the offended party to part with his

money.  In the absence of such requisite, any subsequent act of the accused, however

fraudulent and suspicious it might appear, cannot serve as basis for prosecution for estafa

under the said provision.[46]

 

In the case at bar, the records would show that PSI was given assurance by petitioners

that they will pay the unpaid balance of their purchases from PSI when the CCTDs with

petitioners’ banks, the Rural Bank of Banate, Inc. (RBBI) and/or the Rural Bank of Leon, Inc.

(RBLI), and issued under the name of PSI, would be presented for payment to RBBI and RBLI

which, in turn, will pay the amount of deposit stated thereon.  The amounts stated in the CCTDs

correspond to the purchase cost of the machineries and equipment that co-petitioner Basilio

Page 20: estafa, bp 22

Ambito bought from PSI as evidenced by the Sales Invoices presented during the trial. It is

uncontroverted that PSI did not apply for and secure loans from RBBI and RBLI.  In fine, PSI

and co-petitioner Basilio Ambito were engaged in a vendor-purchaser business relationship

while PSI and RBBI/RBLI were connected as depositor-depository.  It is likewise established

that petitioners employed deceit when they were able to persuade PSI to allow them to pay the

aforementioned machineries and equipment through down payments paid either in cash or in

the form of checks or through the CCTDs with RBBI and RBLI issued in PSI’s name with

interest thereon.  It was later found out that petitioners never made any deposits in the said

Banks under the name of PSI.  In fact, the issuance of CCTDs to PSI was not recorded in the

books of RBBI and RBLI and the Deputy Liquidator appointed by the Central Bank of

thePhilippines even corroborated this finding of anomalous bank transactions in her testimony

during the trial. [47]  

As borne by the records and the pleadings, it is indubitable that petitioners’

representations were outright distortions of the truth perpetrated by them for the sole purpose of

inducing PSI to sell and deliver to co-petitioner Basilio Ambito machineries and

equipments.  Petitioners knew that no deposits were ever made with RBBI and RBLI under the

name of PSI, as represented by the subject CCTDs, since they did not intend to deposit any

amount to pay for the machineries.  PSI was an innocent victim of deceit, machinations and

chicanery committed by petitioners which resulted in its pecuniary damage and, thus, confirming

the lower courts’ finding that petitioners are guilty of the complex crime of Estafa through

Falsification of Commercial Documents.     

 

The pronouncement by the appeals court that a complex crime had been committed by

petitioners is proper because, whenever a person carries out on a public, official or commercial

document any of the acts of falsification enumerated in Article 171 of the RPC [48] as a necessary

means to perpetrate another crime, like Estafa, Theft, or Malversation, a complex crime is

formed by the two crimes.

Under Article 48 of the RPC,[49] a complex crime refers to (1) the commission of at least

two grave or less grave felonies that must both (or all) be the result of a single act, or (2) one

offense must be a necessary means for committing the other (or others).  Negatively put, there

Page 21: estafa, bp 22

is no complex crime when (1) two or more crimes are committed, but not by a single act; or (2)

committing one crime is not a necessary means for committing the other (or others).[50]

 

The falsification of a public, official, or commercial document may be a means of

committing Estafa, because before the falsified document is actually utilized to defraud another,

the crime of Falsification has already been consummated, damage or intent to cause damage

not being an element of the crime of falsification of public, official or commercial document.  In

other words, the crime of falsification has already existed. Actually utilizing that falsified public,

official or commercial document to defraud another is estafa.  But the damage is caused by the

commission of Estafa, not by the falsification of the document.  Therefore, the falsification of the

public, official or commercial document is only a necessary means to commit the estafa.[51]

 

In the case before us, the issuance by petitioners of CCTDs which reflected amounts

that were never deposited as such in either RBBI or RBLI is Falsification under Articles

171[52] and 172[53] of the RPC.  The particular criminal undertaking consisted of petitioners,

taking advantage of their position as owners of RBBI and RBLI, making untruthful

statements/representations with regard to the existence of time deposits in favor of PSI by

issuing the subject CCTDs without putting up the corresponding deposits in said banks.  

 

Under Article 171, paragraph 4 of the RPC,[54] the elements of falsification of public

documents through an untruthful narration of facts are: (1) the offender makes in a document

untruthful statements in a narration of facts; (2) the offender has a legal obligation to disclose

the truth of the facts narrated; (3) the facts narrated by the offender are absolutely false; and (4)

the perversion of truth in the narration of facts was made with the wrongful intent to injure a third

person.[55]

 

As earlier discussed, the issuance of the falsified CCTDs for the sole purpose of

obtaining or purchasing various machinery and equipment from PSI amounts to the criminal

offense of Estafa under Article 315 (2) (a) of the RPC.[56]  The petitioners falsified the subject

CCTDs, which are commercial documents, to defraud PSI.  Since the falsification of the CCTDs

Page 22: estafa, bp 22

was the necessary means for the commission of Estafa, the assailed judgment of the appeals

court convicting petitioners of the complex crime of Estafa through Falsification of Commercial

Documents is correct.

 

Quite apart from the prosecution’s successful discharge of its burden of proof, we find

that the accused failed to discharge their burden to prove their defense.  To begin with, there

appears to be no proof on record of the alleged 14-year financial arrangement between accused

and PSI or the purported “consignment only” agreement between them other than the

uncorroborated and self-serving testimony of the accused.  Moreover, we uphold the findings of

the CA and the court a quo as to the proper characterization of the CCTDs and the lack of

credible, independent evidence of the alleged payment of the accused’s obligations to PSI.

 

Finally, with respect to co-petitioner Crisanto Ambito, we find no reason to disturb the

trial court’s ruling that he is liable for only the crime of Falsification of Commercial Documents in

connection with CCTD Nos. 039 and 040 of RBLI, there being no showing that the said CCTDs

were used to purchase farm implements from PSI.[57]

 WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision dated March

29, 1996 of the Court of Appeals affirming that of the Regional Trial Court is AFFIRMED with respect to petitioner spouses Basilio and Liberata Ambito’s conviction for Estafa through Falsification of Commercial Documents (in Criminal Case Nos. 14563 to 14585) and with respect to co-petitioner Crisanto Ambito’s conviction for Falsification of Commercial Documents (in Criminal Case Nos. 14586 and 14587). However, the aforesaid Decision is REVERSED with respect to co-petitioner Basilio Ambito’s conviction for violation of B.P. Blg. 22 (in Criminal Case Nos. 14556 to 14562), who is hereby ACQUITTED on the ground that his guilt has not been established beyond reasonable doubt. However, the portion of the said Decision insofar as it directs Basilio Ambito to indemnify Pacific Star, Inc. the total sum of  P173,480.55, with interest thereon at the legal rate of 12% per annum from the date of filing of the Informations on May 10, 1982, until paid, and to pay the costs (also in Criminal Case Nos. 14556 to 14562) is AFFIRMED.

  SO ORDERED.

INOCENCIO TAN Y CONCEPCION, Plaintiff-Appellant, vs. THE PEOPLE OF THE PHILIPPINES, Defendant-Appellee.

Page 23: estafa, bp 22

Ramon A. Gonzales for plaintiff-appellant. Office of the Solicitor General for defendant-appellee.

BENGZON J.P., J.:chanrobles virtual law library

Plaintiff-appellant Inocencio Tan and one Antonio Conejero were accused of estafa committed by means of false pretenses in an information filed on October 10, 1958 in the Court of First Instance of Manila, Branch VI, docketed as Criminal Case No. 45905. After due proceedings, the trial court, on October 27, 1959, acquitted Antonio Conejero but convicted plaintiff-appellant for consummated estafa.chanroblesvirtualawlibrarychanrobles virtual law library

Appeal was taken to the Court of Appeals. On August 31, 1963, the judgment of Branch VI of the Court of First Instance of Manila was modified, the appellate court convicting plaintiff-appellant of attempted estafa only. The latter still endeavoured to have the Supreme Court totally reverse the modified judgment but his petition for review was not given due course since the issues raised were factual and there was no merit in the petition.1chanrobles virtual law library

On August 31, 1964, plaintiff-appellant instituted Civil Case No. 58158 before Branch XXI of the Court of First Instance of Manila to annul the judgment of conviction rendered in the criminal proceedings. His ground was that the information therein was so totally defective that criminal jurisdiction did not attach, thereby vitiating the resulting judgment of conviction.chanroblesvirtualawlibrarychanrobles virtual law library

Meanwhile in the criminal proceedings, plaintiff-appellant was able to have the promulgation of the judgment of conviction for attempted estafa suspended pending the outcome of the civil case.chanroblesvirtualawlibrarychanrobles virtual law library

On December 1, 1964, the State filed its answer in the civil case. The issues having been joined, and after a pre-trial resulting in a stipulation of the facts as stated above, the lower court rendered judgment on August 31, 1965 which dismissed the complaint.chanroblesvirtualawlibrarychanrobles virtual law library

Plaintiff-appellant now comes again to this Court on a pure question of law.chanroblesvirtualawlibrarychanrobles virtual law library

Basically, what plaintiff-appellant seeks is to have Branch XXI of the Court of First Instance of Manila annul a judgment originating from Branch VI the same court as modified, with finality, by the appellate courts. This simply cannot be done. Just very recently,2 We reaffirmed the rule that ". . . the jurisdiction to annul a judgment of a branch of the Court of First Instance belongs solely  to the very same branch which rendered the judgment." For the lower court to have acceded to plaintiff appellant's prayer would have been for it to have exceeded its jurisdiction or to have acted with grave abuse of discretion amounting to lack of jurisdiction. For this reason alone, the appeal should be dismissed.chanroblesvirtualawlibrarychanrobles virtual law library

But even on the merits, the appeal cannot prosper. The offense for which plaintiff was indicated is prescribed by Art. 315(2) (a) of the Revised Penal Code in the following language:

Page 24: estafa, bp 22

2. By means of any of the following false pretenses or  fraudulent acts executed prior to or simultaneously with the commission of the fraud:

(a) By using a fictitious name, or  falsely pretending to possess power,influence, qualifications, property, credit, agency business or imaginary transactions; or by means of other similar deceits. (Emphasis supplied)

The information filed against plaintiff averred:3

That on or about and during the period covered from September 11, 1958 to October 9, 1958, both dates inclusive, in the City of Manila, Philippines, the said accused Inocencio Tan y Concepcion and Antonio Conejero y Navo, the latter being then an employee of the Philippine National Bank, conspiring and confederating together and mutually helping each other, did then and there willfully, unlawfully and feloniously defraud Fernando E. Ricafort, Assistant General Manager of the Laureano Brothers Co., Inc., in the following manner: The said accused, during the above-mentioned period of time falsely pretending to possess influence on His Excellency, President Carlos P. Garcia and Executive Secretary Pajo, and by means of false representations and fraudulent manifestations which they made  to said Fernando E. Ricafort  to the effect that the accused being influential  to His Excellency, President Carlos P. Garcia and Executive Secretary Pajo, they could facilitate the release of the loan applied for by Fernando E. Ricafort with the Philippine National Bank in the sum of P250,000.00, provided that the said Fernando E. Ricafort would give the accused 10% of the said sum of P250,000.00 or the amount of P25,000.00; that the sum of P25,000.00 would be given to Executive Secretary Pajo as bribe money for the said purpose of facilitating the release of the afore-mentioned loan, and by means of other similar deceits, succeeded in inducing the said Fernando E. Ricafort to give and deliver to the accused the sum of P2,000.00 (supposedly amounting to P25,000.00), both the said accused knowing fully well that their aforestated pretenses, representations and manifestations were false and fraudulent and that the same were only made for the sole purpose of obtaining, as they in fact obtained from Fernando E. Ricafort the said sum of P2,000.00, which amount they willfully, unlawfully and feloniously, with intent to defraud, misappropriated, misapplied and converted to their own personal use and benefit, to the damage and prejudice of said Fernando E. Ricafort in the aforesaid sum ofP2,000.00, Philippine currency.chanroblesvirtualawlibrarychanrobles virtual law library

Contrary to law. (Emphasis supplied)

The underscored portions of the above-quoted information clearly refute the claim that some of the supposed essential elements of estafa by means of false pretenses were not alleged. The element of false pretenses is alleged by the averment that the accused manifested and represented to the injured party that they were influential to the President and his Executive Secretary, which they knew fully well to be false and which they made only to obtain P2,000.00 from the injured party. The averment that the accused "succeeded in inducing" the injured party to part with his P2,000.00 is sufficient allegation of the element that the offended party relied upon such false pretenses. Lastly, the phrase "to the damage and prejudice of said Fernando E. Ricafort in the aforesaid sum of P2,000.00 . . ." constitutes the averment of damages. There is no basis therefore for the charge that plaintiff-appellant's constitutional right to be informed of the nature and cause of his accusation was violated.chanroblesvirtualawlibrarychanrobles virtual law library

Page 25: estafa, bp 22

WHEREFORE, the appealed judgment is, as it is hereby, affirmed. Treble costs against plaintiff-appellant. So ordered.

RAFAEL P. LUNARIA, petitioner vs.PEOPLE OF THE PHILIPPINES, respondent.

D E C I S I O N

PUNO, C.J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court, to reverse and set aside the Decision of the Court of Appeals (CA),1 and the Resolution which denied petitioner's motion for reconsideration. The CA affirmed the decision of the Regional Trial Court (RTC) of Valenzuela City, Branch 75,2 finding petitioner Rafael Lunaria guilty of one (1) count violation of Batas Pambansa (B.P.) Blg. 22.

The Case

Records3 show that sometime in October 1988, petitioner entered into a partnership agreement with private complainant Nemesio Artaiz, in the conduct of a money-lending business, with the former as industrial partner and the latter the financer. Petitioner, who was then a cashier of Far East Bank and Trust Company in Meycauayan, Bulacan, would offer loans to prospective borrowers which his branch was unable to accommodate. At the start of the business, petitioner would first inform Artaiz of the amount of the proposed loan, then the latter would issue a check charged against his account in the bank (proceeds of which will go to a borrower), while petitioner would in turn issue a check to Artaiz corresponding to the amount lent plus the agreed share of interest.

The lending business progressed satisfactorily between the parties and sufficient trust was established between the parties that they both agreed to issue pre-signed checks to each other, for their mutual convenience. The checks were signed but had no payee's name, date or amount, and each was given the authority to fill these blanks based on each other's advice.

The arrangement ended on November 1989, when Artaiz was no longer willing to continue the partnership.4 One of the checks issued by petitioner to Artaiz was dishonored for insufficient funds.5When Artaiz went to petitioner to ask why the latter's check had bounced, petitioner told Artaiz that he had been implicated in a murder case and therefore could not raise the money to fund the check.6Petitioner requested Artaiz not to deposit the other checks that would become due as he still had a case.7

Petitioner was charged with murder in December 1989 and detained until May 1990, when he was released on bail. He was eventually acquitted in December 1990. According to Artaiz, he went to petitioner in May 1990, after petitioner had been released on bail, and demanded payment for the money owed Artaiz. Petitioner again requested more time to prepare the money and collect on the loans. Artaiz agreed.8 In June 1990, petitioner allegedly went to Artaiz's residence where both had an accounting. It was supposedly agreed that petitioner owed Artaiz P844,000.00 and petitioner issued a check in that amount, post-dated to December 1990.9

Page 26: estafa, bp 22

When the check became due and demandable, Artaiz deposited it. The check was dishonored as the account had been closed. A demand letter was subsequently sent to petitioner, informing him of the dishonor of his check, with a demand that he pay the obligation.10 Artaiz also went to petitioner's house to get a settlement. According to Artaiz, petitioner proposed that his house and lot be given as security. But after Artaiz's lawyer had prepared the document, petitioner refused to sign. At this point, Artaiz filed the instant case.11

The RTC found petitioner guilty as charged and sentenced him to suffer the penalty of imprisonment of one (1) year, and to pay Artaiz the amount of P844,000.00, and the cost of suit.12

On appeal, the CA found no error and affirmed the decision in toto.13

The Issues

In the petition before us, petitioner alleges that the CA gravely erred in:

I. Not reversing the RTC decision convicting petitioner for violation of B.P. Bilang 22;

II. Not holding that the prosecution failed to establish the elements of the crime of the violation of B.P. Bilang 22:

1. the prosecution failed to establish that the subject check was duly "made" or "drawn" and "issued" by petitioner;

2. the subject check was received by the private complainant without giving any consideration therefore;

3. the oral testimony of private complainant is full of serious inconsistencies and contradictions and should have been disregarded by the trial court;

4. private complainant's testimony should have been stricken off the records for being hearsay in nature;

5. the prosecution dismally failed to overcome the presumption of innocence of the accused in criminal cases;

6. to hold petitioner liable for violation of B.P. Blg. 22 in this case would result in a terrible injustice;

III. In the alternative,… in not applying in petitioner's favor the rule of preference in the imposition of penalties in B.P. Blg. 22 cases, i.e., the [CA] erred gravely in not deleting the penalty of imprisonment and imposing in lieu thereof a fine upon petitioner.

The Ruling

We affirm the conviction but with modification on the penalty.

Page 27: estafa, bp 22

At the outset, the first and second grounds raised by petitioner are essentially factual in nature, impugning the finding of guilt by both the CA and the RTC. Petitioner would have this court re-evaluate and re-assess the facts, when it is beyond cavil that in an appeal by certiorari, the jurisdiction of this Court is confined to reviews of errors of law ascribed to the CA. This Court is not a trier of facts, and the findings of fact by the CA are conclusive, more so when it concurs with the factual findings of the RTC. Absent any showing that such findings are devoid of any substantiation on record, the finding of guilt is conclusive on us.14

Moreover, we have gone over the records and find no error in the decision of the appellate court holding that the elements of the crime have been established by the prosecution, i.e., (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.15

Petitioner makes much of the argument that the check was not "made" or "drawn" within the contemplation of the law, nor was it for a consideration. The evidence on record belies these assertions. As correctly held by the CA:

Under the first element, [petitioner] wants Us to believe that he did not draw and issue the check. Citing the Negotiable Instruments Law, he said the he could not have "drawn" and "issued" the subject check because "it was not complete in form at the time it was given to [Artaiz]."

At the outset, it should be borne in mind that the exchange of the pre-signed checks without date and amount between the parties had been their practice for almost a year by virtue of their money-lending business. They had authority to fill up blanks upon information that a check can then be issued.

Thus, under the Negotiable Instruments Law, Section 14 of which reads:

"Blanks, when may be filled. - Where the instrument is wanting in any material particular, the person in possession thereof has prima facie authority to complete it by filling up the blanks therein. xxx"

[T]his practice is allowed.

Because of the presumption of authority, the burden of proof that there was no authority or that authority granted was exceeded is carried by the person who questions such authority.

Records show that [petitioner] had not proven lack of authority on the part of Artaiz to fill up such blanks. Having failed to prove lack of authority, it can be presumed that Artaiz was within his rights to fill up blanks on the check.

xxx xxx xxx

Page 28: estafa, bp 22

Under the second element, [petitioner] states that the making and issuing of the check was devoid of consideration. He claimed that the transaction for which the check was issued did not materialize. However, it should be noted that when lack of consideration is claimed, it pertains to total lack of consideration. In this case, records show that [petitioner] recognized that there was an amount due to Artaiz, such that he had his own version of computation with respect to the amount he owed to Artaiz.16

We also note that with respect to the second element of the crime, consideration was duly established in Artaiz's testimony.17

It bears repeating that the lack of criminal intent on the part of the accused is irrelevant.18 The law has made the mere act of issuing a worthless check a malum prohibitum, an act proscribed by legislature for being deemed pernicious and inimical to public welfare.19 In fact, even in cases where there had been payment, through compensation or some other means, there could still be prosecution for violation of B.P. 22. The gravamen of the offense under this law is the act of issuing a worthless check or a check that is dishonored upon its presentment for payment, not the nonpayment of the obligation.20

We now come to the penalty imposed. On this ground, we rule for petitioner.

Since 1998,21 this Court has held that it would best serve the ends of criminal justice if, in fixing the penalty to be imposed for violation of B.P. 22, the same philosophy underlying the Indeterminate Sentence Law be observed, i.e., that of redeeming valuable human material and preventing unnecessary deprivation of personal liberty and economic usefulness with due regard to the protection of the social order.22 This policy was embodied in Supreme Court Administrative Circular No. 12-2000,23 authorizing the non-imposition of the penalty of imprisonment in B.P. 22 cases. We also clarified in Administrative Circular No. 13-2001, as explained in Tan v. Mendez,24 that we are not decriminalizing B.P. 22 violations, nor have we removed imprisonment as an alternative penalty. Needless to say, the determination of whether the circumstances warrant the imposition of a fine alone rests solely upon the judge. Should the judge decide that imprisonment is the more appropriate penalty, Administrative Circular No. 12-2000 ought not to be deemed a hindrance.

Nevertheless, we note that ultimately, this case was a derivative of the breakdown of petitioner and Artaiz's partnership, which was precipitated by petitioner being implicated and detained for a murder charge, from which he was subsequently acquitted. Under the circumstances of the case, and bearing in mind the guidelines set in Administrative Circular No. 13-2004, we deem the imposition of a fine alone would best serve the interests of justice, pegged at the maximum amount provided for by law, which is two hundred thousand pesos (P200,000.00),25 with the proviso that subsidiary imprisonment will be meted out which shall not exceed six months in case of insolvency or nonpayment. Petitioner should also pay Artaiz the amount of P844,000.00, and the cost of suit.

IN VIEW WHEREOF, the petition is DENIED and the Decision of the Court of Appeals in CA-G.R. CR No. 20343 is AFFIRMED with MODIFICATION. Petitioner is ordered to indemnify Nemesio Artaiz in the amount of P844,000.00 and the cost of suit, with legal interest from date of judicial demand. The sentence of imprisonment of one (1) year is SET ASIDE and, in lieu thereof, a FINE in the amount ofP200,000.00 is imposed upon petitioner, with subsidiary imprisonment not to exceed six months in case of insolvency or nonpayment.

Page 29: estafa, bp 22

SO ORDERED.

PAULINO CHANG, petitioner, vs.THE INTERMEDIATE APPELLATE COURT (FIRST CRIM. CASES DIVISION) and THE PEOPLE OF THE PHILIPPINES, respondents.

Conrado M. Vasquez for petitioner.

R E S O L U T I O N

 

MELENCIO-HERRERA, J.:

Before us is a second Motion filed, with leave of Court, by petitioner, Paulino CHANG, seeking reconsideration of our Resolution of April 24, 1985 denying the Petition for Review for lack of merit. CHANG's first Motion for Reconsideration, filed on July 5, 1985, was denied on October 28, 1985 with the denial being final.

The aforementioned Petition seeks a review of the Decision, dated March 30, 1984, and of the Resolution, dated August 31, 1984, of respondent Appellate Court affirming the judgment of conviction rendered by the Regional Trial Court (RTC), Branch XXXII, Manila, dated April 15, 1983, against CHANG for Violation of the Bouncing Checks Law (BP Blg. 22), and for Estafa under Article 315 of the Revised Penal Code.

Specifically challenged herein is petitioner's conviction for the crime of Estafa.

The Information for Estafa reads:

That on or about July 2, 1980, in the City of Manila, Philippines, the said accused, did then and there wilfully, unlawfully and feloniously defraud one Kiat Reaport, in the following manner, to wit: the said accused by means of false manifestation and fraudulent representations which he made to said Kiat Reaport to the effect that he is a businessman specializing in the importation of machineries and farm implements from the People's Republic of China; that said project was with the knowledge and blessings of the First Lady and several other high government officials; that his money as investment will surely and without fail make a return for investment of at least 30% in three (3) months, and that to assure said Kiat Reaport of the return of his investment should he so desire, said accused issued a postdated check in his favor covering the whole amount of his investment plus the 30% profit, and by means of other deceits of similar import, induced and succeeded in inducing said Kiat Reaport to invest P68,000.00, as in fact the latter gave and delivered to said accused P68,000.00 in cash, and simultaneously said accused gave and delivered to said Kiat Reaport Bank of the Philippine Islands Check No. 124977 in the amount of P88,350.00 postdated October 2, 1980, with the assurance that said check was fully funded, said accused well knowing that said check was not fully funded for which reason the same was dishonored when presented for payment, and that all his manifestations and representations were false and untrue and were made solely with the view to obtain, as in fact he did obtain said amount, which once in his possession and with intent to defraud, he wilfully, unlawfully

Page 30: estafa, bp 22

and feloniously misappropriated, misapplied and converted to his own personal use and benefit, to the damage and prejudice of said Kiat Reaport in the aforesaid amount of P68,000.00, Philippine Currency. 1

The facts of the case as narrated by the Solicitor General which the Appellate Court found supported by the evidence, reads:

Appellant Paulino Chang was introduced to complainant Kiat Reaport as a very rich businessman by Johnson Sy in August 1979 at the Mabini Mansion in Malate, Manila. Flaunting a Mercedes Benz 450 and bodyguard, appellant told Reaport and others with them that he was importing handtractors from the People's Republic of China which he then sells to the government (pp. 9-12, tsn, Sept. 29, 1981).

Appellant learned that Reaports own business is supplying peanuts to candy factories. That business, according to appellant, is too small. He invited Reaport to invest P200,000.00 in appellant's importation business with the assurance of a thirty percent (30%) profit in three months. This proposition was naturally enticing to Reaport for he had never earned that much before. But he was at first reluctant to agree because he did not have that kind of money (pp. 39-40, 43-44, 67, to Feb. 10, 1982, p. 26, tsn, March 16, 1982). Reaport was told that the proposed venture was to be kept from the knowledge of others. If he did not have P200,000.00, appellant told him a lesser amount win do (pp. 18, 21, 29, tsn, March 16, 1982).

Appellant's method in convincing Reaport to come up with his investment was a marvel Aside from the Mercedes Benz 450 and the bodyguard, appellant disclosed to Reaport that he personally know high ranking officials in the government, among them the First Lady, Gen. Ver and Deputy Minister Barbero (p. 16, tsn, Sept. 29, 1981). Once, in Reaports presence, appellant appeared to have talked to Minister Barbero by telephone (pp. 18-19,  Id.). Reaport also saw him with a bundle of crisp P100 bills (p. 45, Id.). On still another occasion, appellant wrote a note and sent his messenger to a bank with it. The latter returned with P10,000.00 in bills with consecutive serial numbers. All these, of course, within clear sight of Reaport (p. 102, tsn, Feb. 10, 1982).<äre||anº•1àw>

Finally, by the end of June, 1980, Reaport agreed to make an investment of P68,000.00 when he met appellant at the Tropicana Hotel. The money would be delivered on July 2, 1980. On said date, appellant called him up and instructed him to proceed to the Mabini Mansion coffee shop (pp. 32- 33, 43-47, tsn, March 16, 1982; pp. 79, 83, tsn, Feb. 10, 1982).

Inside the coffee shop, Reaport handed to appellant the P68,000.00 in cash contained in a paper bag. In turn, appellant gave to him Check No. 124977 (Exh. A, p. 69, Record) drawn against appellant's Current Account No. 0141-0091-76 with the Bank of the Philippine Island Escolta Branch and postdated October 2, 1980 for the sum of P88,350, payable to the order of "cash." This amount represents the amount invested by Reaport (P68,000) plus the 30% profit. Appellant explained that P50 was deducted from the actual total "for luck." Reaport was told he could deposit the check on October 2, 1982, the date appearing thereon (pp. 21-27, tsn, Sept. 29, 1981, pp. 91-94, tsn, Feb. 10, 1982).

Page 31: estafa, bp 22

Reaport did not deposit the check on October 2, 1980 on request of appellant due to financial problems. Reaport informed appellant that he was himself in bad need of cash and will deposit the check on October 29, 1980. The check was deposited by Reaport on October 29, 1980 with the Philippine Bank of Communications, Elcano Branch in Binondo, Manila in his Account No. 741-0. After three days, the check was returned to Reaport by the drawee bank unpaid and stamped "payment stopped" (Exh. A, p. 69, Record). Attached to the check was the return check slip (Exit A-1, Id) from the drawee bank indicating "payment stopped" (Exh. A-1, Id.) as the reason for the dishonor (pp. 27-34, tsn, Sept. 29, 1981).

Reaport personally informed appellant of the dishonor of the check and demanded that he replace it with cash. Appellant refused to comply with the demand because he had no money (pp. 35-36, tsn, Sept. 29, 1981). On March 4, 1981, Reaports lawyer wrote appellant to reiterate the demand (Exh. B, p. 70, Record). The letter was received by appellant through his counsel (pp. 35-36, 38-43, Id.). On March 18, 1981, two days after appellant's counsel received the demand letter, he replied, also by letter Exh. 2, p. 241, Record), address to Reaports counsel alleging that the check in question was in fact issued to another person in payment of gambling debts.

As a consequence, CHANG was charged in two separate Informations before the former Court of First Instance of Manila for Violation of BP Blg. 22 (Criminal Case No. R-81-739), and for Estafa (Criminal Case No. R 82-2834).

The thrust of CHANG's defense was to prove the absence of deceit in that he did not know Reaport whom he called "Chiu" or " Tiu Hong" nor did he have any business dealings with him; that it is not true that Reaport gave him P68,000.00 in cash; that the check in question was issued to a mahjong club and/or club members during a protracted mahjong session; that he signed the check in "blank" and entrusted it to the club sometime in October, 1980; that he had advised the bank to dishonor the check because it was a "gambling check," but he admitted that he had no funds in his current account; and that he received the letter-demand for payment but made no reply because he was not liable therefor as the check was not issued to REAPORT but was a product of gambling.

After joint trial of the two cases, CHANG was found guilty of the felonies charged and sentenced, in the Violation of BP Blg. 22 case, to imprisonment of one year; and in the Estafa case to imprisonment of 2 years, 4 months and 1 day, as minimum, to 16 years and 1 day, as maximum, and to indemnify the offended party in the sum of P88,350.00, plus costs.

On appeal, respondent Appellate Court affirmed the conviction but modified the penalties by reducing the maximum ceiling of imprisonment in the Estafa case from 16 years to 12 years, and the amount of the indemnity from P88,350.00 to P68,000.00.

Hence, the instant Petition for Review filed on October 29, 1984 before this Court by CHANG essentially claiming that, assuming REAPORT gave him P68,000.00 as investment, his liability would only be civil; and that the cash check involved was a complete nullity since it was, in fact, given by CHANG to another person for payment of a gambling debt.

It appears that in another criminal case entitled People vs. Paulino L. Chang, CHANG was also charged with Estafa before the then Court of First Instance of Manila under more or less similar circumstances but involving another complainant and the amount of P1.5M (the 2nd CASE).

Page 32: estafa, bp 22

At the time this Petition was filed, the 2nd CASE was pending decision before the Appellate Court as AC-G.R. No. 00527-CR, with the Solicitor General recommending acquittal.

In his Petition, as well as in subsequent pleadings, CHANG further stressed the said Solicitor General's recommendation for acquittal in the 2nd CASE.

In his Comment to the Petition, the Solicitor General submitted that CHANGS's liability is criminal and not merely civil; that CHANG beguiled REAPORT; that CHANG committed Estafa, not only through false pretenses but also, through his issuance of an unfunded postdated check; that his (Solicitor General's) recommendation for CHANG's acquittal in the 2nd CASE, which was a separate case pending then before the Appellate Court cannot apply to the present case for, although the two cases have some resemblance, the transactions were far apart and the environmental circumstances and the victims were different; and that CHANG issued the unfunded check, not to pay off a gambling debt but, in exchange for money received by him from REAPORT.

As previously stated, we had denied the Petition by minute resolution on April 24, 1985.

On May 7, 1985, CHANG moved for elevation of the 2nd CASE to this instance and to hold determination of this Petition in abeyance. We denied the Motion on May 13, 1985. CHANG's first Motion for Reconsideration was also denied with finality on October 28, 1985.

In the 2nd CASE, conviction was affirmed by the IAC on August 29, 1985.

CHANG filed a Second Motion for Reconsideration on November 21, 1985. The Solicitor General's recommendation for acquittal in the 2nd CASE was again stressed by CHANG. Apparently, CHANG did not know of the IAC's previous affirmation in the 2nd CASE.

On June 25, 1986, we required the incumbent Solicitor General to comment on the Second Motion for Reconsideration, which comment was filed on September 3, 1986 and reiterated the recommendation of his predecessor-in-office that the judgment of conviction be affirmed.

There is no question that the check issued by CHANG bounced for insufficiency of funds, so that he should be held guilty of violation of BP Blg. 22. 2 As both the Trial Court and the Appellate Court had found:

... The drawee bank's statement of accounts respecting that of appellant would indicate that on October 2, 1980, the date of the check, the balance of appellant's account No. 0141-0091-76 was only P73.95 (Exh. "D-1"); as of October 29, 1980 his debit balance was P96.05 (Exhs. "D-2" and "D-2a"); at the end of November, 1980, the balance was P28.96 (Exhs. "F" and "F-1") as of December 1980, the debit balance was P6.06 (Exhs. "F" and "F-l").

The defense that "the check was issued as a gambling check for money lost at gambling," hence, illegal and void from the very beginning, lacks credence. CHANG issued the check in payment of an obligation to return the money he got from REAPORT, including a 30% profit, It was not by way of guaranteeing Reaports investment. It was the inducement to convince Reaport of a sure return of his money plus the profit promised. As the Appellate Court had observed, the "gambling debt" theory is "characterized with circumstances doubly hard to

Page 33: estafa, bp 22

believe." In essence, that matter is one of credibility, which the Trial Court and the Appellate Court are better fitted to pass upon.

The evidence on record equally support's CHANG's conviction for Estafa. Complainant testified on the facts constitutive of the fraud, and both the Trial Court and the Appellate Court extended credibility to him and not to CHANG's denials that he had any business contact/deal with Complainant, nor his claim that the cash check Complainant said was given to him, was in fact given by CHANG to another person for payment of a gambling debt. The disquisition by the Trial Court regarding the fraudulent scheme, quoted with approval by the Appellate Court, suffices to rest the issue:

On the basis of the evidence presented by the prosecution, the Court finds that Reaport handed P68,000.00 to the accused upon the prior and/or simultaneous representations of the accused that he is in the impartation of the hand tractors from RPC; that in therewith, he even guaranteed a profit of 30% in three months, that he is a rich businessman with a 450 Mercedes Benz car, with bodyguard, and influential with the Government higher-ups with whom he sells the tractors; that Reaport believed such representations to be true; that as a matter of fact, the accused to assure a fruitfull return of his investment in favor of Reaport issued a check for P88,350 for the purpose. This should be the most efficient cause for the defraudation. Indeed, when the check was delivered to Reaport the accused knew and should be expected to know that he had no funds in the bank then or on the date of the check, on the strength of which the accused was able to obtain P68,000.00 in exchange of a worthless check. (Decision, p. 9).<äre||anº•1àw>

It is true that if the amount were invested as capital in a business, an accused would not be liable for Estafa as his liability would be civil. 3 However, we find as established that CHANG had employed deceit to induce REAPORT to deliver the sum for investment not only through his acts of misrepresentation that led REAPORT to believe that CHANG was moneyed and had influence and connections in high places, but also in that simultaneously with the delivery of the sum by REAPORT, CHANG resorted to the deceitful practice of issuing an unfunded check for P88,350.00, ostensibly with a profitable return on investment, to perpetrate the fraud. It turned out that he never had this money in the bank. He was never able to make good the dishonored check despite notice.

We are not persuaded by CHANG's argument that CHANG was not charged with Estafa through the issuance of a postdated check. The Information sufficiently alleges that CHANG had "issued a postdated check ... covering the whole amount of his investment plus the 30% profit" which he "simultaneously gave and delivered" to REAPORT "with the assurance that said check was fully funded, ... well knowing that said check was not fully funded for which reason the same was dishonored when presented for payment. ..."

CHANG had presented no evidence to overcome the proof by the prosecution that he had employed false pretenses in defrauding REAPORT, nor did he adduce any evidence whatsoever that he had invested REAPORT's money as he (CHANG) had represented to him (REAPORT). He even disowned knowing REAPORT and having had any transaction with him, indicating thereby that everything he made REAPORT believe was false and fabricated.

In fine, the conjunto of the facts narrated by the Complainant has established fraud, deceit and damage, essential elements of the crime of Estafa. Moreover, the fraud can be deemed to have

Page 34: estafa, bp 22

been confirmed by CHANG's defense that there was never a deal between him and REAPORT, and the claim that he had given the cash check to a gambling creditor.

ACCORDINGLY, the Court is constrained to deny petitioner's Second Motion for Reconsideration and this denial is FINAL.

SO ORDERED.

DY vs. PEOPLE (2008)

DECISION

QUISUMBING, Acting C.J.:

This appeal prays for the reversal of the Decision[1]dated January 23, 2003 and the Resolution[2] dated May 14, 2003 of the Court of Appeals in CA-G.R. CR No. 23802. The appellate court affirmed with modification the Decision[3] dated November 17, 1999 of the Regional Trial Court (RTC), Branch 82 of Quezon City, which had convicted petitioner John Dy of two counts of estafa in Criminal Cases Nos. Q-93-46711 and Q-93-46713, and two counts of violation of Batas Pambansa Bilang 22[4] (B.P. Blg. 22) in Criminal Cases Nos. Q-93-46712 and Q-93-46714.

The facts are undisputed:

Since 1990, John Dy has been the distributor of W.L. Food Products (W.L. Foods) in Naga City, Bicol, under the business name Dyna Marketing.  Dy would pay W.L. Foods in either cash or check upon pick up of stocks of snack foods at the latter’s branch or main office in Quezon City. At times, he would entrust the payment to one of his drivers. 

On June 24, 1992, Dy’s driver went to the branch office of W.L. Foods to pick up stocks of snack foods.  He introduced himself to the checker, Mary Jane D. Maraca, who upon confirming Dy’s credit with the main office, gave him merchandise worth P106,579.60.  In return, the driver handed her a blank Far East Bank and Trust Company (FEBTC) Check with Check No. 553602 postdated July 22, 1992.  The check was signed by Dy though it did not indicate a specific amount.

Yet again, on July 1, 1992, the same driver obtained snack foods from Maraca in the amount of P226,794.36 in exchange for a blank FEBTC Check with Check No. 553615 postdated July 31, 1992.

Page 35: estafa, bp 22

In both instances, the driver was issued an unsigned delivery receipt.  The amounts for the purchases were filled in later by Evelyn Ong, accountant of W.L. Foods, based on the value of the goods delivered.

When presented for payment, FEBTC dishonored the checks for insufficiency of funds.  Raul D. Gonzales, manager of FEBTC-Naga Branch, notified Atty. Rita Linda Jimeno, counsel of W.L. Foods, of the dishonor. Apparently, Dy only had an available balance of P2,000 as of July 22, 1992 and July 31, 1992.

Later, Gonzales sent Atty. Jimeno another letter[5]advising her that FEBTC Check No. 553602 forP106,579.60 was returned to the drawee bank for the reasons stop payment order and drawn against uncollected deposit (DAUD), and not because it was drawn against insufficient funds as stated in the first letter.  Dy’s savings deposit account ledger reflected a balance of P160,659.39 as of July 22, 1992.  This, however, included a regional clearing check for P55,000 which he deposited on July 20, 1992, and which took five (5) banking days to clear.  Hence, the inward check was drawn against the yet uncollected deposit.

When William Lim, owner of W.L. Foods, phoned Dy about the matter, the latter explained that he could not pay since he had no funds yet.  This prompted the former to send petitioner a demand letter, which the latter ignored.

On July 16, 1993, Lim charged Dy with two counts ofestafa under Article 315, paragraph 2(d)[6] of the Revised Penal Code in two Informations, which except for the dates and amounts involved, similarly read as follows:

That on or about the 24th day of June, 1992, in Quezon City, Philippines, the said accused, did then and there [willfully] and feloniously defraud W.L. PRODUCTS, a corporation duly organized and existing under the laws of the Republic of the Philippines with business address at No. 531 Gen. Luis St., Novaliches, this City, in the following manner, to wit:  the said accused, by means of false manifestations and fraudulent representation which he made to complainant to the effect that Far East Bank and Trust Co. check No. 553602 dated July 22, 1992 in the amount ofP106,579.60, payable to W.L. Products is a good check and will be honored by the bank on its maturity date, and by means of other deceit of similar import, induced and succeeded in inducing the said complainant to receive and accept the aforesaid check in payment of snack foods, the said accused knowing fully well that all his manifestations and representations were false and untrue and were made solely for the purpose of obtaining, as in fact he did obtain the aforesaid snack foods valued atP106,579.60 from said complainant as upon presentation of said check to the bank for payment, the same was dishonored and payment thereof refused for the reason stop payment and the said accused, once in possession of the aforesaid snack foods, with intent to defraud, [willfully], unlawfully and feloniously misapplied, misappropriated and converted the same or the value thereof to his own personal use and benefit, to

Page 36: estafa, bp 22

the damage and prejudice of said W.L. Products, herein represented by RODOLFO BORJAL, in the aforementioned amount of P106,579.60, Philippine Currency.

Contrary to law.[7]

          On even date, Lim also charged Dy with two counts of violation of B.P. Blg. 22 in two Informations which likewise save for the dates and amounts involved similarly read as follows:

That on or about the 24th day of June, 1992, the said accused, did then and there [willfully], unlawfully and feloniously make or draw and issue to W.L. FOOD PRODUCTS to apply on account or for value a Far East Bank and Trust Co. Check no. 553602 dated July 22, 1992 payable to W.L. FOOD PRODUCTS in the amount of P106,579.60 Philippine Currency, said accused knowing fully well that at the time of issue he/she/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 90 days from the date thereof was subsequently dishonored by the drawee bank for the reason “Payment stopped” but the same would have been dishonored for insufficient funds had not the accused without any valid reason, ordered the bank to stop payment, the said accused despite receipt of notice of such dishonor, failed to pay said W.L. Food Products the amount of said check or to make arrangement for payment in full of the same within five (5) banking days after receiving said notice.

CONTRARY TO LAW.[8]

On November 23, 1994, Dy was arrested in Naga City.  On arraignment, he pleaded not guilty to all charges. Thereafter, the cases against him were tried jointly.

On November 17, 1999 the RTC convicted Dy on two counts each of estafa and violation of B.P. Blg. 22.  The trial court disposed of the case as follows:

WHEREFORE, accused JOHN JERRY DY ALDEN (JOHN DY) is hereby found GUILTY beyond reasonable doubt of swindling (ESTAFA) as charged in the Informations in Criminal Case No. 93-46711 and in Criminal Case No. Q-93-46713, respectively. Accordingly, after applying the provisions of the Indeterminate Sentence Law and P.D. No. 818, said accused is hereby sentenced to suffer the indeterminate penalty of ten (10) years and one (1) day to twelve (12) years of prision mayor, as minimum, to twenty (20) years of reclusion temporal, as maximum, in Criminal Case No. Q-93-46711 and of ten (10) years and one (1) day to twelve (12) years of prision mayor, as minimum, to thirty (30) years of reclusion perpetua, as maximum, in Criminal Case No. Q-93-46713.

Likewise, said accused is hereby found GUILTY beyond reasonable doubt of Violation of B.P. 22 as charged in the Informations in Criminal Case No. Q-93-46712 and in Criminal Case No. Q-93-46714 and is accordingly sentenced

Page 37: estafa, bp 22

to imprisonment of one (1) year for each of the said offense and to pay a fine in the total amount of P333,373.96, with subsidiary imprisonment in case of insolvency.

FINALLY, judgment is hereby rendered in favor of private complainant, W. L. Food Products, herein represented by Rodolfo Borjal, and against herein accused JOHN JERRY DY ALDEN (JOHN DY), ordering the latter to pay to the former the total sum of P333,373.96 plus interest thereon at the rate of 12% per annum from September 28, 1992 until fully paid; and, (2) the costs of this suit.

SO ORDERED.[9]

Dy brought the case to the Court of Appeals.  In the assailed Decision of January 23, 2003, the appellate court affirmed the RTC.  It, however, modified the sentence and deleted the payment of interests in this wise:

WHEREFORE, in view of the foregoing, the decision appealed from is hereby AFFIRMED with MODIFICATION.  In Criminal Case No. Q-93-46711 (for estafa), the accused-appellant JOHN JERRY DY ALDEN (JOHN DY) is hereby sentenced to suffer an indeterminate penalty of imprisonment ranging from six (6) years and one (1) day of prision mayor as minimum to twenty (20) years of reclusion temporal as maximum plus eight (8) years in excess of [P]22,000.00.  InCriminal Case No. Q-93-46712 (for violation of BP 22), accused-appellant is sentenced to suffer an imprisonment of one (1) year and to indemnify W.L. Food Products, represented by Rodolfo Borjal, the amount of ONE HUNDRED SIX THOUSAND FIVE HUNDRED SEVENTY NINE PESOS and 60/100 ([P]106,579.60). In Criminal Case No. Q-93-46713 (for estafa), accused-appellant is hereby sentenced to suffer an indeterminate penalty of imprisonment ranging from eight (8) years and one (1) day of prision mayor as minimum to thirty (30) years as maximum.  Finally, inCriminal Case No. Q-93-46714 (for violation of BP 22), accused-appellant is sentenced to suffer an imprisonment of one (1) year and to indemnify W.L. Food Products, represented by Rodolfo Borjal, the amount of TWO HUNDRED TWENTY SIXTHOUSAND SEVEN HUNDRED NINETY FOUR PESOS AND 36/100 ([P]226,794.36).

SO ORDERED.[10]

Dy moved for reconsideration, but his motion was denied in the Resolution dated May 14, 2003.

Hence, this petition which raises the following issues:

I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE PROSECUTION HAS PROVEN THE GUILT OF

Page 38: estafa, bp 22

ACCUSED BEYOND REASONABLE DOUBT OF ESTAFA ON TWO (2) COUNTS?

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE PROSECUTION HAS PROVEN THE GUILT OF ACCUSED BEYOND REASONABLE DOUBT OF VIOLATION OF BP 22 ON TWO (2) COUNTS?

III.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AWARDING DAMAGES TO PRIVATE COMPLAINANT, W.L. FOOD PRODUCTS, THE TOTAL SUM OF [P]333,373.96?[11]

Essentially, the issue is whether John Dy is liable forestafa and for violation of B.P. Blg. 22.

First, is petitioner guilty of estafa?

Mainly, petitioner contends that the checks were ineffectively issued.  He stresses that not only were the checks blank, but also that W.L. Foods’ accountant had no authority to fill the amounts.  Dy also claims failure of consideration to negate any obligation to W.L. Foods. Ultimately, petitioner denies having deceived Lim inasmuch as only the two checks bounced since he began dealing with him.  He maintains that it was his long established business relationship with Lim that enabled him to obtain the goods, and not the checks issued in payment for them.  Petitioner renounces personal liability on the checks since he was absent when the goods were delivered. 

The Office of the Solicitor General (OSG), for the State, avers that the delivery of the checks by Dy’s driver to Maraca, constituted valid issuance.  The OSG sustains Ong’s prima facie authority to fill the checks based on the value of goods taken.  It observes that nothing in the records showed that W.L. Foods’ accountant filled up the checks in violation of Dy’s instructions or their previous agreement. Finally, the OSG challenges the present petition as an inappropriate remedy to review the factual findings of the trial court.

We find that the petition is partly meritorious.

Before an accused can be held liable for estafa under Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885,[12] the following elements must concur: (1) postdating or issuance of a check in payment of an obligation contracted at the time

Page 39: estafa, bp 22

the check was issued; (2) insufficiency of funds to cover the check; and (3) damage to the payee thereof.[13]  These elements are present in the instant case.

Section 191 of the Negotiable Instruments Law[14]defines “issue” as the first delivery of

an instrument, complete in form, to a person who takes it as a holder. Significantly, delivery is

the final act essential to the negotiability of an instrument.  Delivery denotes physical transfer of

the instrument by the maker or drawer coupled with an intention to convey title to the payee and

recognize him as a holder.[15]  It means more than handing over to another; it imports such

transfer of the instrument to another as to enable the latter to hold it for himself.[16]

In this case, even if the checks were given to W.L. Foods in blank, this alone did not make its issuance invalid. When the checks were delivered to Lim, through his employee, he became a holder with prima facie authority to fill the blanks.  This was, in fact, accomplished by Lim’s accountant.

The pertinent provisions of Section 14 of the Negotiable Instruments Law are instructive:

SEC. 14. Blanks; when may be filled.–Where the instrument is wanting in any material particular, the person in possession thereof has a prima facieauthority to complete it by filling up the blankstherein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. …. (Emphasis supplied.)

 

Hence, the law merely requires that the instrument be in the possession of a person other than the drawer or maker.  From such possession, together with the fact that the instrument is wanting in a material particular, the law presumes agency to fill up the blanks.[17]  Because of this, the burden of proving want of authority or that the authority granted was exceeded, is placed on the person questioning such authority.[18]  Petitioner failed to fulfill this requirement.

Next, petitioner claims failure of consideration. Nevertheless, in a letter[19] dated

November 10, 1992, he expressed willingness to pay W.L. Foods, or to replace the dishonored

checks.  This was a clear acknowledgment of receipt of the goods, which gave rise to his duty to

maintain or deposit sufficient funds to cover the amount of the checks.

More significantly, we are not swayed by petitioner’s arguments that the single incident

of dishonor and his absence when the checks were delivered belie fraud.  Indeed damage and

deceit are essential elements of the offense and must be established with satisfactory proof to

Page 40: estafa, bp 22

warrant conviction.[20]  Deceit as an element of estafa is a specie of fraud.  It is actual fraud

which consists in any misrepresentation or contrivance where a person deludes another, to his

hurt.  There is deceit when one is misled -- by guile, trickery or by other means -- to believe as

true what is really false.[21]

Prima facie evidence of deceit was established against petitioner with regard to FEBTC

Check No. 553615 which was dishonored for insufficiency of funds.  The letter[22] of petitioner’s

counsel dated November 10, 1992 shows beyond reasonable doubt that petitioner received

notice of the dishonor of the said check for insufficiency of funds. Petitioner, however, failed to

deposit the amounts necessary to cover his check within three banking days from receipt of the

notice of dishonor.  Hence, as provided for by law,[23] the presence of deceit was sufficiently

proven.

Petitioner failed to overcome the said proof of deceit.  The trial court found no pre-

existing obligation between the parties.  The existence of prior transactions between Lim and

Dy alone did not rule out deceit because each transaction was separate, and had a different

consideration from the others.  Even as petitioner was absent when the goods were delivered,

by the principle of agency, delivery of the checks by his driver was deemed as his act as the

employer.  The evidence shows that as a matter of course, Dy, or his employee, would pay

W.L. Foods in either cash or check upon pick up of the stocks of snack foods at the latter’s

branch or main office.  Despite their two-year standing business relations prior to the issuance

of the subject check, W.L Foods employees would not have parted with the stocks were it not

for the simultaneous delivery of the check issued by petitioner. [24]   Aside from the existing

business relations between petitioner and W.L. Foods, the primary inducement for the latter to

part with its stocks of snack foods was the issuance of the check in payment of the value of

the said stocks.   

In a number of cases,[25] the Court has considered good faith as a defense to a charge

of estafa by postdating a check.  This good faith may be manifested by making arrangements

for payment with the creditor and exerting best efforts to make good the value of the checks.  In

the instant case petitioner presented no proof of good faith. Noticeably absent from the records

is sufficient proof of sincere and best efforts on the part of petitioner for the payment of the value

of the check that would constitute good faith and negate deceit.

Page 41: estafa, bp 22

With the foregoing circumstances established, we find petitioner guilty of estafa with

regard to FEBTC Check No. 553615 for P226,794.36.

The same, however, does not hold true with respect to FEBTC Check No. 553602

for P106,579.60. This check was dishonored for the reason that it was drawn against

uncollected deposit. Petitioner had P160,659.39 in his savings deposit account ledger as of July

22, 1992.  We disagree with the conclusion of the RTC that since the balance included a

regional clearing check worth P55,000 deposited on July 20, 1992, which cleared only five (5)

days later, then petitioner had inadequate funds in this instance. Since petitioner technically and

retroactively had sufficient funds at the time Check No. 553602 was presented for payment then

the second element (insufficiency of funds to cover the check) of the crime is absent.  Also there

is noprima facie evidence of deceit in this instance because the check was not dishonored for

lack or insufficiency of funds. Uncollected deposits are not the same as insufficient funds.

The prima facie presumption of deceit arises only when a check has been dishonored for lack or

insufficiency of funds.  Notably, the law speaks of insufficiency of funds but not of uncollected

deposits.  Jurisprudence teaches that criminal laws are strictly construed against the

Government and liberally in favor of the accused.[26]  Hence, in the instant case, the law cannot

be interpreted or applied in such a way as to expand its provision to encompass the situation of

uncollected deposits because it would make the law more onerous on the part of the accused.

Clearly, the estafa punished under Article 315, paragraph 2(d) of the Revised Penal

Code is committed when a check is dishonored for being drawn against insufficient funds or

closed account, and not against uncollected deposit.[27]  Corollarily, the issuer of the check is not

liable for estafa if the remaining balance and the uncollected deposit, which was duly collected,

could satisfy the amount of the check when presented for payment.

Second, did petitioner violate B.P. Blg. 22?

Petitioner argues that the blank checks were not valid orders for the bank to pay the holder of such checks.  He reiterates lack of knowledge of the insufficiency of funds and reasons that the checks could not have been issued to apply on account or for value as he did not obtain delivery of the goods.

The OSG maintains that the guilt of petitioner has been proven beyond reasonable doubt.  It cites pieces of evidence that point to Dy’s culpability: Maraca’s acknowledgment that the checks were issued to W.L. Foods as consideration for the snacks; Lim’s testimony proving that Dy received a copy of the demand letter; the bank manager’s confirmation that petitioner

Page 42: estafa, bp 22

had insufficient balance to cover the checks; and Dy’s failure to settle his obligation within five (5) days from dishonor of the checks.

Once again, we find the petition to be meritorious in part.

The elements of the offense penalized under B.P. Blg. 22 are 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.[28]  The case at bar satisfies all these elements.

During the joint pre-trial conference of this case, Dy admitted that he issued the checks, and that the signatures appearing on them were his. [29]  The facts reveal that the checks were issued in blank because of the uncertainty of the volume of products to be retrieved, the discount that can be availed of, and the deduction for bad orders. Nevertheless, we must stress that what the law punishes is simply the issuance of a bouncing check and not the purpose for which it was issued nor the terms and conditions relating thereto.[30]  If inquiry into the reason for which the checks are issued, or the terms and conditions of their issuance is required, the public’s faith in the stability and commercial value of checks as currency substitutes will certainly erode.[31]

Moreover, the gravamen of the offense under B.P. Blg. 22 is the act of making or issuing a worthless check or a check that is dishonored upon presentment for payment. The act effectively declares the offense to be one of malum prohibitum.  The only valid query, then, is whether the law has been breached, i.e., by the mere act of issuing a bad check, without so much regard as to the criminal intent of the issuer.[32]  Indeed, non-fulfillment of the obligation is immaterial.  Thus, petitioner’s defense of failure of consideration must likewise fall. This is especially so since as stated above, Dy has acknowledged receipt of the goods.

On the second element, petitioner disputes notice of insufficiency of funds on the basis of the check being issued in blank.  He relies on Dingle v. Intermediate Appellate Court[33] and Lao v. Court of Appeals[34] as his authorities.  In both actions, however, the accused were co-signatories, who were neither apprised of the particular transactions on which the blank checks were issued, nor given notice of their dishonor.  In the latter case, 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.[35]  Lao was only a minor employee who had nothing to do with the issuance, funding and delivery of checks.[36]  In contrast, petitioner was the proprietor of Dyna Marketing and the sole signatory of the checks who received notice of their dishonor.

Page 43: estafa, bp 22

Significantly, under Section 2[37] of B.P. Blg. 22, petitioner was prima facie presumed to know of the inadequacy of his funds with the bank when he did not pay the value of the goods or make arrangements for their payment in full within five (5) banking days upon notice. His letter dated November 10, 1992 to Lim fortified such presumption.

Undoubtedly, Dy violated B.P. Blg. 22 for issuing FEBTC Check No. 553615.  When said check was dishonored for insufficient funds and stop payment order, petitioner did not pay or make arrangements with the bank for its payment in full within five (5) banking days.

Petitioner should be exonerated, however, for issuingFEBTC Check No. 553602, which was dishonored for the reason DAUD or drawn against uncollected deposit.  When the check was presented for payment, it was dishonored by the bank because the check deposit made by petitioner, which would make petitioner’s bank account balance more than enough to cover the face value of the subject check, had not been collected by the bank.

In Tan v. People,[38] this Court acquitted the petitioner therein who was indicted

under B.P. Blg. 22, upon a check which was dishonored for the reason DAUD, among

others.  We observed that:

In the second place, even without relying on the credit line, petitioner’s bank account covered the check she issued because even though there were some deposits that were still uncollected the deposits became “good” and the bank certified that the check was “funded.”[39]

To be liable under Section 1[40] of B.P. Blg. 22, the check must be dishonored by the

drawee bank for insufficiency of funds or credit or dishonored for the same reason had not the

drawer, without any valid cause, ordered the bank to stop payment. 

In the instant case, even though the check which petitioner deposited on July 20, 1992

became good only five (5) days later, he was considered by the bank to retroactively have

had P160,659.39 in his account on July 22, 1992.  This was more than enough to cover the

check he issued to respondent in the amount of P106,579.60.  Under the circumstance

obtaining in this case, we find the petitioner had issued the check, with full ability to abide by his

commitment[41] to pay his purchases.

Significantly, like Article 315 of the Revised Penal Code, B.P. Blg. 22 also speaks only of

insufficiency of funds and does not treat of uncollected deposits.  To repeat, we cannot interpret

Page 44: estafa, bp 22

the law in such a way as to expand its provision to encompass the situation of uncollected

deposits because it would make the law more onerous on the part of the accused.  Again,

criminal statutes are strictly construed against the Government and liberally in favor of the

accused.[42]

As regards petitioner’s civil liability, this Court has previously ruled that an accused may be held civilly liable where the facts established by the evidence so warrant. [43] The rationale for this is simple. The criminal and civil liabilities of an accused are separate and distinct from each other.  One is meant to punish the offender while the other is intended to repair the damage suffered by the aggrieved party.  So, for the purpose of indemnifying the latter, the offense need not be proved beyond reasonable doubt but only by preponderance of evidence.[44]

We therefore sustain the appellate court’s award of damages to W.L. Foods in the total amount of P333,373.96, representing the sum of the checks petitioner issued for goods admittedly delivered to his company.

As to the appropriate penalty, petitioner was charged with estafa under Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Presidential Decree No. 818 [45](P.D. No. 818). 

          Under Section 1[46] of P.D. No. 818, if the amount of the fraud exceeds P22,000, the penalty of reclusión temporal is imposed in its maximum period, adding one year for each additional P10,000 but the total penalty shall not exceed thirty (30) years, which shall be termed reclusión perpetua.[47]  Reclusión perpetua is not the prescribed penalty for the offense, but merely describes the penalty actually imposed on account of the amount of the fraud involved.

WHEREFORE, the petition is PARTLY GRANTED. John Dy is hereby ACQUITTED in Criminal Case No. Q-93-46711 for estafa, and Criminal Case No. Q-93-46712 for violation of B.P. Blg. 22, but he isORDERED to pay W.L. Foods the amount of P106,579.60 for goods delivered to his company.

In Criminal Case No. Q-93-46713 for estafa, the Decision of the Court of Appeals is AFFIRMED with MODIFICATION.  Petitioner is sentenced to suffer an indeterminate penalty of twelve (12) years of prisión mayor, as minimum, to thirty (30) years of reclusión perpetua, as maximum.

In Criminal Case No. Q-93-46714 for violation ofB.P. Blg. 22, the Decision of the Court of Appeals isAFFIRMED, and John Dy is hereby sentenced to one (1) year imprisonment and ordered to indemnify W.L. Foods in the amount of P226,794.36.

SO ORDERED.

Page 45: estafa, bp 22

ALFEREZ vs. PEOPLE (2011)

DECISION

NACHURA, 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:

Page 46: estafa, bp 22

 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 CAvia 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:

 

Page 47: estafa, bp 22

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

Page 48: estafa, bp 22

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

Page 49: estafa, bp 22

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]

 

Page 50: estafa, bp 22

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 areMODIFIED.

Petitioner Jaime Alferez is ACQUITTED on reasonable doubt of violation of B.P. Blg. 22.

However, the civil liability imposed on petitioner is AFFIRMED.

 

SO ORDERED.

NARI K. GIDWANI, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.

D E C I S I O N

SERENO, C.J.:

Before us is a Petition1 under Rule 45 of the Rules of Court, assailing the Decision2 and the subsequent Resolution3 of the Court of Appeals CA) in CA-G.R. CR No. 32642 dated 17 September 2010 and 6 January 2011, respectively.

The facts are as follows:

Page 51: estafa, bp 22

Petitioner is the president of G.G. Sportswear Manufacturing Corporation GSMC), which is engaged in the export of ready-to-wear clothes. GSMC secured the embroidery services of El Grande Industrial Corporation El Grande) and issued on various dates from June 1997 to December 1997 a total of 10 Banco de Oro (BDO) checks as payment for the latter’s services worth an aggregate total of ?1,626,707.62.

Upon presentment, these checks were dishonored by the drawee bank for having been drawn against a closed account.

Thus, El Grande, through counsel, sent three demand letters regarding 8 of the 10 issued checks:4

Date of letter BDO Check No. Date of Check Amount

24 September 1997 0000063646 4 September 1997 P 130,000.00

24 September 1997 0000059552 12 June 1997 412,000.00

0000063643 24 July 1997 138,859.69

0000063644 7 August 1997 138,859.69

0000063650 7 August 1997 144,457.56

0000063645 28 August 1997 138,859.68

8 October 0000063647 25 September 1997 130,000.00

0000063648 2 October 1997 130,000.00

On 15 October 1997,5 petitioner wrote to El Grande’s counsel acknowledging receipt of the 8 October demand letter6 and informing the latter that, on 29 August 1997, GSMC had filed a Petition with the Securities and Exchange Commission (SEC). It was a Petition for the Declaration of a State of Suspension of Payments, for the Approval of a Rehabilitation Plan and Appointment of a Management Committee.7 Acting on the Petition, the SEC issued an Order8 on 3 September 1997 ordering the suspension of all actions, claims, and proceedings against GSMC until further order from the SEC Hearing Panel. Petitioner attached this SEC Order to the 15 October 1997 letter. In short, GSMC did not pay El Grande.

Despite its receipt on 16 October 1997 of GSMC’s letter and explanation, El Grande still presented to the drawee bank for payment BDO Check Nos. 0000063652 and 0000063653 dated November and December 1997, respectively.

Thereafter, sometime in November 1997, El Grande filed a Complaint with the Office of the City Prosecutor of Manila charging petitioner with eight counts of violation of Batas Pambansa Blg. 22 (B.P. 22) for the checks covering June to October 1997. El Grande likewise filed a similar Complaint in December 1997, covering the checks issued in November and December 1997. Corresponding Informations for the Complaints were subsequently filed on 1 October 2001.

For his part, petitioner raised the following defenses: (1) the SEC Order of Suspension of Payment legally prevented him from honoring the checks; (2) there was no consideration for the issuance of the checks, because the embroidery services of El Grande were of poor quality and, hence, were rejected; and (3) he did not receive a notice of dishonor of the checks.

Page 52: estafa, bp 22

On 24 March 2008, after trial on the merits, the Metropolitan Trial Court (MTC) of Manila found petitioner guilty beyond reasonable doubt of ten counts of violation of B.P. 22. It ordered him to pay the face value of the checks amounting to P1,626,707.60 with interest at the legal rate per annum from the filing of the case and to pay a fine of P200,000 with subsidiary imprisonment in case of insolvency.9 The MTC held that the Petition for voluntary insolvency or a SEC Order for the suspension of payment of all claims are not defenses under the law regarding violations of B.P. 22, since an order suspending payments involves only the obligations of the corporation and does not affect criminal proceedings.

On appeal, the Regional Trial Court (RTC) affirmed the findings of the MTC and likewise denied the Motion for Reconsideration of petitioner.10

Thereafter, petitioner filed with the CA a Petition for Review under Rule 42.

In its Decision dated 17 September 2010, the CA found that the prosecution was able to establish that petitioner had received only the 8 October 1997 Notice of Dishonor and not the others. The CA further held that the prosecution failed to establish that the account was closed prior to or at the time the checks were issued, thus proving knowledge of the insufficiency of funds.

Thus, the CA partly granted the appeal and acquitted petitioner of eight counts of violation of B.P. 22, while sustaining his conviction for the two remaining counts and ordering him to pay the total civil liability due to El Grande. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the instant petition is PARTLY GRANTED and the assailed RTC Decision dated January 29, 2009 and its Order dated June 5, 2009 are AFFIRMED with modifications: (a) sustaining accused-appellant’s conviction in Criminal Case Nos. 301888 and 301889; (b) acquitting him in Criminal Case Nos. 371112-13, 301883-87 and 301890; and (c) ordering him to pay private complainant, El Grande Industrial Corporation, the aggregate amount of P1,626,707.62 representing the value of the ten (10) BDO checks with interest at 12% per annum reckoned from the date of the filing of the Information until finality of this Decision, and thereafter, the total amount due, inclusive of interest, shall be subject to 12% annual interest until fully paid.

The rest of the Decision stands.

SO ORDERED.11

Petitioner filed his Motion for Partial Reconsideration on 11 October 2010,12 raising the following as his defenses: (1) there was no clear evidence showing that he acknowledged the Notice of Dishonor of the two remaining checks; (2) the suspension Order of the SEC was a valid reason for stopping the payment of the checks; and, (3) as a corporate officer, he could only be held civilly liable.

On 6 January 2011, the CA denied the motion through its assailed Resolution.13

Hence, this Petition.

Petitioner raises these two issues in the present Petition:

Page 53: estafa, bp 22

A. THE COURT OF APPEALS ERRED IN RULING THAT THE ORDER FOR THE SUSPENSION OF PAYMENT ISSUED BY THE SECURITIES AND EXCHANGE COMMISSION IS NOT A VALID REASON TO STOP PAYMENT OF A CHECK EVEN IF SUCH ORDER WAS ISSUED PRIOR TO THE PRESENTMENT OF THE SUBJECT CHECKS FOR PAYMENT;

B. THE COURT OF APPEALS ERRED IN FINDING A CORPORATE OFFICER PERSONALLY LIABLE FOR THE CIVIL OBLIGATION OF THE CORPORATION.14

We find the appeal to be meritorious.

The elements of a violation of B.P. 22 are the following:15

1) making, drawing and issuing 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.

In convicting petitioner of two counts of violation of B.P. 22, the CA applied Tiong v. Co,16 in which we said:

The purpose of suspending the proceedings under P.D. No. 902-A is to prevent a creditor from obtaining an advantage or preference over another and to protect and preserve the rights of party litigants as well as the interest of the investing public or creditors. It is intended to give enough breathing space for the management committee or rehabilitation receiver to make the business viable again, without having to divert attention and resources to litigations in various fora. The suspension would enable the management committee or rehabilitation receiver to effectively exercise its/his powers free from any judicial or extrajudicial interference that might unduly hinder or prevent the "rescue" of the debtor company. To allow such other action to continue would only add to the burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the corporation instead of being directed toward its restructuring and rehabilitation.

Whereas, the gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a worthless check; that is, a check that is dishonored upon its presentation for payment. It is designed to prevent damage to trade, commerce, and banking caused by worthless checks. In Lozano v. Martinez, this Court declared that it is not the nonpayment 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 and circulation of worthless checks. 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. The prime purpose of the criminal action is to punish the offender in order to deter him and others from committing the same or similar offense, to isolate him from society, to reform and rehabilitate him or, in general, to maintain social order. Hence, the criminal prosecution is designed to promote the public welfare by punishing offenders and deterring others.

Page 54: estafa, bp 22

Consequently, the filing of the case for violation of B.P. Blg. 22 is not a "claim" that can be enjoined within the purview of P.D. No. 902-A. True, although conviction of the accused for the alleged crime could result in the restitution, reparation or indemnification of the private offended party for the damage or injury he sustained by reason of the felonious act of the accused, nevertheless, prosecution for violation of B.P. Blg. 22 is a criminal action. (Emphasis supplied.) The CA furthermore cited Tiong in this wise:17

Hence, accused-appellant cannot be deemed excused from honoring his duly issued checks by the mere filing of the petition for suspension of payments before the SEC. Otherwise, an absurdity will result such that " one who has engaged in criminal conduct could escape punishment by the mere filing of a petition for rehabilitation by the corporation of which he is an officer." (Emphasis supplied.)

However, what the CA failed to consider was that the facts of Tiong were not on all fours with those of the present case and must be put in the proper context. In Tiong, the presentment for payment and the dishonor of the checks took place before the Petition for Suspension of Payments for Rehabilitation Purposes was filed with the SEC. There was already an obligation to pay the amount covered by the checks. The criminal action for the violations of B.P. 22 was filed for failure to meet this obligation. The criminal proceedings were already underway when the SEC issued an Omnibus Order creating a Management Committee and consequently suspending all actions for claims against the debtor therein. Thus, in Tiong, this Court took pains to differentiate the criminal action, the civil liability and the administrative proceedings involved.

In contrast, it is clear that prior to the presentment for payment and the subsequent demand letters to petitioner, there was already a lawful Order from the SEC suspending all payments of claims. It was incumbent on him to follow that SEC Order. He was able to sufficiently establish that the accounts were closed pursuant to the Order, without which a different set of circumstances might have dictated his liability for those checks.

Considering that there was a lawful Order from the SEC, the contract is deemed suspended. When a contract is suspended, it temporarily ceases to be operative; and it again becomes operative when a condition occurs–or a situation arises–warranting the termination of the suspension of the contract.18

In other words, the SEC Order also created a suspensive condition. When a contract is subject to a suspensive condition, its birth takes place or its effectivity commences only if and when the event that constitutes the condition happens or is fulfilled.19 Thus, at the time private respondent presented the September and October 1997 checks for encashment, it had no right to do so, as there was yet no obligation due from petitioner.

Moreover, it is a basic principle in criminal law that any ambiguity in the interpretation or application of the law must be made in favor of the accused. Surely, our laws should not be interpreted in such a way that the interpretation would result in the disobedience of a lawful order of an authority vested by law with the jurisdiction to issue the order.

Consequently, because there was a suspension of GSMC s obligations, petitioner may not be held liable for the civil obligations of the corporation covered by the bank checks at the time this case arose. However, it must be emphasized that her non-liability should not prejudice the right

Page 55: estafa, bp 22

of El Grande to pursue its claim through remedies available to it, subject to the SEC proceedings regarding the application for corporate rehabilitation.

WHEREFORE, in view of the foregoing, the Petition is hereby GRANTED. The Decision dated 7 September 2010 and the Resolution dated 6 January 2011 of the Court of Appeals in CA-G.R. CR No. 32642 are REVERSED and SET ASIDE. Criminal Case Nos. 301888 and 301889 are DISMISSED, without prejudice to the right of El Grande Industrial Corporation to file the proper civil action against G.G. Sportswear Manufacturing Corporation for the value of the ten (10) checks.

SO ORDERED.

DREAMWORK CONSTRUCTION, INC., Petitioner, vs.CLEOFE S. JANIOLA and HON. ARTHUR A. FAMINI, Respondents.

D E C I S I O N

VELASCO, JR., J.:

The Case

Petitioner Dreamwork Construction, Inc. seeks the reversal of the August 26, 2008 Decision1 in SCA No. 08-0005 of the Regional Trial Court (RTC), Branch 253 in Las Piñas City. The Decision affirmed the Orders dated October 16, 20072 and March 12, 20083 in Criminal Case Nos. 55554-61 issued by the Metropolitan Trial Court (MTC), Branch 79 in Las Piñas City.

The Facts

On October 18, 2004, petitioner, through its President, Roberto S. Concepcion, and Vice-President for Finance and Marketing, Normandy P. Amora, filed a Complaint Affidavit dated October 5, 20044 for violation of Batas Pambansa Bilang 22 (BP 22) against private respondent Cleofe S. Janiola with the Office of the City Prosecutor of Las Piñas City. The case was docketed as I.S. No. 04-2526-33. Correspondingly, petitioner filed a criminal information for violation of BP 22 against private respondent with the MTC on February 2, 2005 docketed as Criminal Case Nos. 55554-61, entitled People of the Philippines v. Cleofe S. Janiola.

On September 20, 2006, private respondent, joined by her husband, instituted a civil complaint against petitioner by filing a Complaint dated August 20065 for the rescission of an alleged construction agreement between the parties, as well as for damages. The case was filed with the RTC, Branch 197 in Las Piñas City and docketed as Civil Case No. LP-06-0197. Notably, the checks, subject of the criminal cases before the MTC, were issued in consideration of the construction agreement.

Thereafter, on July 25, 2007, private respondent filed a Motion to Suspend Proceedings dated July 24, 20076 in Criminal Case Nos. 55554-61, alleging that the civil and criminal cases involved facts and issues similar or intimately related such that in the resolution of the issues in the civil case, the guilt or innocence of the accused would necessarily be determined. In other words, private respondent claimed that the civil case posed a prejudicial question as against the criminal cases.

Page 56: estafa, bp 22

Petitioner opposed the suspension of the proceedings in the criminal cases in an undated Comment/Opposition to Accused’s Motion to Suspend Proceedings based on Prejudicial Question7 on the grounds that: (1) there is no prejudicial question in this case as the rescission of the contract upon which the bouncing checks were issued is a separate and distinct issue from the issue of whether private respondent violated BP 22; and (2) Section 7, Rule 111 of the Rules of Court states that one of the elements of a prejudicial question is that "the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action"; thus, this element is missing in this case, the criminal case having preceded the civil case.

Later, the MTC issued its Order dated October 16, 2007, granting the Motion to Suspend Proceedings, and reasoned that:

Should the trial court declare the rescission of contract and the nullification of the checks issued as the same are without consideration, then the instant criminal cases for alleged violation of BP 22 must be dismissed. The belated filing of the civil case by the herein accused did not detract from the correctness of her cause, since a motion for suspension of a criminal action may be filed at any time before the prosecution rests (Section 6, Rule 111, Revised Rules of Court).8

In an Order dated March 12, 2008,9 the MTC denied petitioner’s Motion for Reconsideration dated November 29, 2007.

Petitioner appealed the Orders to the RTC with a Petition dated May 13, 2008. Thereafter, the RTC issued the assailed decision dated August 26, 2008, denying the petition. On the issue of the existence of a prejudicial question, the RTC ruled:

Additionally, it must be stressed that the requirement of a "previously" filed civil case is intended merely to obviate delays in the conduct of the criminal proceedings. Incidentally, no clear evidence of any intent to delay by private respondent was shown. The criminal proceedings are still in their initial stages when the civil action was instituted. And, the fact that the civil action was filed after the criminal action was instituted does not render the issues in the civil action any less prejudicial in character.10

Hence, we have this petition under Rule 45.

The Issue

WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN NOT PERCEIVING GRAVE ABUSE OF DISCRETION ON THE PART OF THE INFERIOR COURT, WHEN THE LATTER RULED TO SUSPEND PROCEEDINGS IN CRIM. CASE NOS. 55554-61 ON THE BASIS OF "PREJUDICIAL QUESTION" IN CIVIL CASE NO. LP-06-0197.11

The Court’s Ruling

This petition must be granted.

The Civil Action Must Precede the Filing of the

Criminal Action for a Prejudicial Question to Exist

Page 57: estafa, bp 22

Under the 1985 Rules on Criminal Procedure, as amended by Supreme Court Resolutions dated June 17, 1988 and July 7, 1988, the elements of a prejudicial question are contained in Rule 111, Sec. 5, which states:

SEC. 5. Elements of prejudicial question. — The two (2) essential elements of a prejudicial question are: (a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action; and (b) the resolution of such issue determines whether or not the criminal action may proceed.

Thus, the Court has held in numerous cases12 that the elements of a prejudicial question, as stated in the above-quoted provision and in Beltran v. People,13 are:

The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has two essential elements: (a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action; and (b) the resolution of such issue determines whether or not the criminal action may proceed.

On December 1, 2000, the 2000 Rules on Criminal Procedure, however, became effective and the above provision was amended by Sec. 7 of Rule 111, which applies here and now provides:

SEC. 7. Elements of prejudicial question.—The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed. (Emphasis supplied.)

Petitioner interprets Sec. 7(a) to mean that in order for a civil case to create a prejudicial question and, thus, suspend a criminal case, it must first be established that the civil case was filed previous to the filing of the criminal case. This, petitioner argues, is specifically to guard against the situation wherein a party would belatedly file a civil action that is related to a pending criminal action in order to delay the proceedings in the latter.

On the other hand, private respondent cites Article 36 of the Civil Code which provides:

Art. 36. Pre-judicial questions which must be decided before any criminal prosecution may be instituted or may proceed, shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be in conflict with the provisions of this Code. (Emphasis supplied.)

Private respondent argues that the phrase "before any criminal prosecution may be instituted or may proceed" must be interpreted to mean that a prejudicial question exists when the civil action is filed either before the institution of the criminal action or during the pendency of the criminal action. Private respondent concludes that there is an apparent conflict in the provisions of the Rules of Court and the Civil Code in that the latter considers a civil case to have presented a prejudicial question even if the criminal case preceded the filing of the civil case.

We cannot agree with private respondent.

First off, it is a basic precept in statutory construction that a "change in phraseology by amendment of a provision of law indicates a legislative intent to change the meaning of the provision from that it originally had."14 In the instant case, the phrase, "previously instituted," was

Page 58: estafa, bp 22

inserted to qualify the nature of the civil action involved in a prejudicial question in relation to the criminal action. This interpretation is further buttressed by the insertion of "subsequent" directly before the term criminal action. There is no other logical explanation for the amendments except to qualify the relationship of the civil and criminal actions, that the civil action must precede the criminal action.

Thus, this Court ruled in Torres v. Garchitorena15 that:

Even if we ignored petitioners’ procedural lapse and resolved their petition on the merits, we hold that Sandiganbayan did not abuse its discretion amounting to excess or lack of jurisdiction in denying their omnibus motion for the suspension of the proceedings pending final judgment in Civil Case No. 7160. Section 6, Rule lll of the Rules of Criminal Procedure, as amended, reads:

Sec. 6. Suspension by reason of prejudicial question. - A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any time before the prosecution rests.

Sec. 7. Elements of prejudicial question. - The elements of a prejudicial question are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed.

Under the amendment, a prejudicial question is understood in law as that which must precede the criminal action and which requires a decision before a final judgment can be rendered in the criminal action with which said question is closely connected. The civil action must be instituted prior to the institution of the criminal action. In this case, the Information was filed with the Sandiganbayan ahead of the complaint in Civil Case No. 7160 filed by the State with the RTC in Civil Case No. 7160. Thus, no prejudicial question exists. (Emphasis supplied.)

Additionally, it is a principle in statutory construction that "a statute should be construed not only to be consistent with itself but also to harmonize with other laws on the same subject matter, as to form a complete, coherent and intelligible system."16 This principle is consistent with the maxim, interpretare et concordare leges legibus est optimus interpretandi modus or every statute must be so construed and harmonized with other statutes as to form a uniform system of jurisprudence.171 a vv p h i l

In other words, every effort must be made to harmonize seemingly conflicting laws. It is only when harmonization is impossible that resort must be made to choosing which law to apply.

In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule 111 of the Rules of Court are susceptible of an interpretation that would harmonize both provisions of law. The phrase "previously instituted civil action" in Sec. 7 of Rule 111 is plainly worded and is not susceptible of alternative interpretations. The clause "before any criminal prosecution may be instituted or may proceed" in Art. 36 of the Civil Code may, however, be interpreted to mean that the motion to suspend the criminal action may be filed during the preliminary investigation with the public prosecutor or court conducting the investigation, or during the trial with the court hearing the case.

Page 59: estafa, bp 22

This interpretation would harmonize Art. 36 of the Civil Code with Sec. 7 of Rule 111 of the Rules of Court but also with Sec. 6 of Rule 111 of the Civil Code, which provides for the situations when the motion to suspend the criminal action during the preliminary investigation or during the trial may be filed. Sec. 6 provides:

SEC. 6. Suspension by reason of prejudicial question.—A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any time before the prosecution rests.

Thus, under the principles of statutory construction, it is this interpretation of Art. 36 of the Civil Code that should govern in order to give effect to all the relevant provisions of law.

It bears pointing out that the circumstances present in the instant case indicate that the filing of the civil action and the subsequent move to suspend the criminal proceedings by reason of the presence of a prejudicial question were a mere afterthought and instituted to delay the criminal proceedings.

In Sabandal v. Tongco,18 we found no prejudicial question existed involving a civil action for specific performance, overpayment, and damages, and a criminal complaint for BP 22, as the resolution of the civil action would not determine the guilt or innocence of the accused in the criminal case. In resolving the case, we said:

Furthermore, the peculiar circumstances of the case clearly indicate that the filing of the civil case was a ploy to delay the resolution of the criminal cases. Petitioner filed the civil case three years after the institution of the criminal charges against him. Apparently, the civil action was instituted as an afterthought to delay the proceedings in the criminal cases.19

Here, the civil case was filed two (2) years after the institution of the criminal complaint and from the time that private respondent allegedly withdrew its equipment from the job site. Also, it is worth noting that the civil case was instituted more than two and a half (2 ½) years from the time that private respondent allegedly stopped construction of the proposed building for no valid reason. More importantly, the civil case praying for the rescission of the construction agreement for lack of consideration was filed more than three (3) years from the execution of the construction agreement.

Evidently, as in Sabandal, the circumstances surrounding the filing of the cases involved here show that the filing of the civil action was a mere afterthought on the part of private respondent and interposed for delay. And as correctly argued by petitioner, it is this scenario that Sec. 7 of Rule 111 of the Rules of Court seeks to prevent. Thus, private respondent’s positions cannot be left to stand.

The Resolution of the Civil Case Is Not Determinative of the Prosecution of the Criminal Action

In any event, even if the civil case here was instituted prior to the criminal action, there is, still, no prejudicial question to speak of that would justify the suspension of the proceedings in the criminal case.

Page 60: estafa, bp 22

To reiterate, the elements of a prejudicial question under Sec. 7 of Rule 111 of the Rules of Court are: (1) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action; and (2) the resolution of such issue determines whether or not the criminal action may proceed.

Petitioner argues that the second element of a prejudicial question, as provided in Sec. 7 of Rule 111 of the Rules, is absent in this case. Thus, such rule cannot apply to the present controversy.

Private respondent, on the other hand, claims that if the construction agreement between the parties is declared null and void for want of consideration, the checks issued in consideration of such contract would become mere scraps of paper and cannot be the basis of a criminal prosecution.

We find for petitioner.

It must be remembered that the elements of the crime punishable under BP 22 are as follows:

(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 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.20

Undeniably, the fact that there exists a valid contract or agreement to support the issuance of the check/s or that the checks were issued for valuable consideration does not make up the elements of the crime. Thus, this Court has held in a long line of cases21 that the agreement surrounding the issuance of dishonored checks is irrelevant to the prosecution for violation of BP 22. In Mejia v. People,22 we ruled:

It must be emphasized that the gravamen of the offense charge is the issuance of a bad check. The purpose for which the check was issued, the terms and conditions relating to its issuance, or any agreement surrounding such issuance are irrelevant to the prosecution and conviction of petitioner. To determine the reason for which checks are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the stability and commercial value of checks as currency substitutes, and bring havoc in trade and in banking communities. The clear intention of the framers of B.P. 22 is to make the mere act of issuing a worthless check malum prohibitum.

Lee v. Court of Appeals23 is even more poignant. In that case, we ruled that the issue of lack of valuable consideration for the issuance of checks which were later on dishonored for insufficient funds is immaterial to the success of a prosecution for violation of BP 22, to wit:

Third issue. Whether or not the check was issued on account or for value.

Page 61: estafa, bp 22

Petitioner’s claim is not feasible. We have held that upon issuance of a check, in the absence of evidence to the contrary, it is presumed that the same was issued for valuable consideration. Valuable consideration, in turn, may consist either in some right, interest, profit or benefit accruing to the party who makes the contract, or some forbearance, detriment, loss or some responsibility, to act, or labor, or service given, suffered or undertaken by the other side. It is an obligation to do, or not to do in favor of the party who makes the contract, such as the maker or indorser.

In this case, petitioner himself testified that he signed several checks in blank, the subject check included, in exchange for 2.5% interest from the proceeds of loans that will be made from said account. This is a valuable consideration for which the check was issued. That there was neither a pre-existing obligation nor an obligation incurred on the part of petitioner when the subject check was given by Bautista to private complainant on July 24, 1993 because petitioner was no longer connected with Unlad or Bautista starting July 1989, cannot be given merit since, as earlier discussed, petitioner failed to adequately prove that he has severed his relationship with Bautista or Unlad.

At any rate, we have held that what the law punishes is the mere act of issuing a bouncing check, not the purpose for which it was issued nor the terms and conditions relating to its issuance. This is because the thrust of the law is to prohibit the making of worthless checks and putting them into circulation.24 (Emphasis supplied.)

Verily, even if the trial court in the civil case declares that the construction agreement between the parties is void for lack of consideration, this would not affect the prosecution of private respondent in the criminal case. The fact of the matter is that private respondent indeed issued checks which were subsequently dishonored for insufficient funds. It is this fact that is subject of prosecution under BP 22.lawphil.net

Therefore, it is clear that the second element required for the existence of a prejudicial question, that the resolution of the issue in the civil action would determine whether the criminal action may proceed, is absent in the instant case. Thus, no prejudicial question exists and the rules on it are inapplicable to the case before us.

WHEREFORE, we GRANT this petition. We hereby REVERSE and SET ASIDE the August 26, 2008 Decision in SCA No. 08-0005 of the RTC, Branch 253 in Las Piñas City and the Orders dated October 16, 2007 and March 12, 2008 in Criminal Case Nos. 55554-61 of the MTC, Branch 79 in Las Piñas City. We order the MTC to continue with the proceedings in Criminal Case Nos. 55554-61 with dispatch.

No costs.

SO ORDERED.

LAND BANK vs. JACINTO (2010)

DECISION 

VILLARAMA, JR., J.:

Page 62: estafa, bp 22

Petitioner Land Bank of the Philippines (Land Bank) seeks the reversal of the

Decision[1] dated November 28, 2001 and the Resolution[2] dated August 6, 2002 of the Court of

Appeals (CA) in CA-G.R. SP No. 62773.  The CA had set aside the Resolutions dated October

25, 2000[3] and December 18, 2000[4] of the Department of Justice (DOJ) and reinstated the

Resolution[5] dated March 3, 1999 of the City Prosecution Office of Makati which dismissed the

petitioner’s complaint against respondent Ramon P. Jacinto in I.S. Nos. 99-A-1536-44 for violation

of Batas Pambansa Blg. (B.P.) 22 or “The Bouncing Checks Law.”

The undisputed facts, as gleaned from the records, are as follows:

The First Women’s Credit Corporation (FWCC) obtained a loan from the petitioner Land

Bank in the aggregate amount of P400 million, evidenced by a Credit Line Agreement[6] dated

August 22, 1997.  As security for the loan, respondent Ramon P. Jacinto, President of FWCC,

issued in favor of Land Bank nine (9) postdated checks amounting to P465 million and drawn

against FWCC’s account at the Philippine National Bank.  Later, before the checks matured,

petitioner and respondent executed several letter agreements which culminated in the execution

of a Restructuring Agreement on June 3, 1998.  Under the new agreement, the loan obligation

contracted under the Credit Line Agreement of August 22, 1997 was restructured, its terms of

payment, among others, having been changed or modified.  When FWCC defaulted in the

payment of the loan obligation under the terms of their restructured agreement, petitioner

presented for payment to the drawee bank the postdated checks as they matured.  However, all

the checks were dishonored or refused payment for the reason “Payment Stopped” or “Drawn

Against Insufficient Funds.” Respondent also failed to make good the checks despite demands. 

Hence, on January 13, 1999, Land Bank, through its Assistant Vice President, Udela C.

Salvo, Financial Institutions Department, filed before the Makati City Prosecutor’s Office a

Complaint-Affidavit[7] against respondent for violation of B.P. 22.  Respondent filed his Counter-

Affidavit[8] denying the charges and averring that the complaint is baseless and utterly devoid of

merit as the said loan obligation has been extinguished by payment and novation by virtue of the

execution of the Restructuring Agreement.   Respondent also invoked the proscription in the May

28, 1998 Order of the Regional Trial Court (RTC) of Makati City, Branch 133 in Special Proceedings

No. M-4686 for Involuntary Insolvency which forbade FWCC from paying any of its debts.

In a Resolution[9] dated March 3, 1999, Prosecutor George V. De Joya dismissed the

complaint against respondent, finding that the letter-agreements between Land Bank and FWCC

restructured and novated the original loan agreement.  It was held that there being novation, the

Page 63: estafa, bp 22

checks issued pursuant to the original loan obligation had lost their efficacy and validity and

cannot be a valid basis to sustain the charge of violation of B.P. 22.

On June 21, 1999, petitioner’s motion for reconsideration was likewise denied.[10]

Aggrieved, petitioner elevated the matter to the DOJ for review.  On April 10, 2000, the

DOJ issued a Resolution[11] dismissing the appeal. However, upon motion for reconsideration

filed by petitioner, the DOJ reversed its ruling and issued a Resolution dated October 25, 2000

holding that novation is not a mode of extinguishing criminal liability.   Thus, the DOJ held that:

WHEREFORE, there being probable cause to hold respondent triable for the offense of violation of BP 22 (nine (9) counts), the Department Resolution dated April 10, 2000 is hereby reconsidered and set aside and the resolution of the Office of the City Prosecutor, Makati City, dismissing the complaint should be, as it is, hereby REVERSED. Said office is directed to file the appropriate informations for violation of BP 22 (nine (9) counts) against respondent.  Report the action taken within ten (10) days from receipt hereof.

SO ORDERED.[12]

Respondent moved for a reconsideration of the above Order but it was denied in a

Resolution dated December 18, 2000. Undaunted, respondent filed a petition for certiorari

before the CA.

On November 28, 2001, the CA, in the assailed Decision, reversed the Resolution of the

DOJ and reinstated the Resolution of Prosecutor De Joya dismissing the complaint.  While the CA

ruled that novation is not a mode of extinguishing criminal liability, it nevertheless held that

novation may prevent criminal liability from arising in certain cases if novation occurs before

the criminal information is filed in court because the novation causes doubt as to the true nature of

the obligation.  Also, the CA found merit in respondent’s assertion that a prejudicial question exists

in the instant case because the issue of whether the original obligation of FWCC subject of the

dishonored checks has been novated by the subsequent agreements entered into by FWCC with

Land Bank, is already the subject of the appeal in Civil Case No. 98-2337 (entitled, “First

Women’s Credit Corporation v. Land Bank of the Philippines”  for Declaration of Novation) pending

before the CA.  The CA also gave consideration to respondent’s assertion that the Order dated

May 28, 1998 of the RTC proscribing FWCC from paying its debts constitutes as a justifying

circumstance which prevents criminal liability from attaching.     

Page 64: estafa, bp 22

Petitioner’s motion for reconsideration from the said decision having been denied,

petitioner filed the instant petition for review on certiorari, raising the following assignment of

errors:

I

THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT THE ELEMENT OF A PREJUDICIAL QUESTION EXISTS IN THE INSTANT CASE AND THAT THE RECOMMENDATION FOR THE FILING OF INFORMATIONS IN COURT AGAINST THE RESPONDENT WAS MADE WITH GRAVE ABUSE OF DISCRETION.

II

THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT THE ORDER DATED MAY 28, 1998 OF THE REGIONAL TRIAL COURT OF MAKATI, BRANCH 133, CONSTITUTES AS A JUSTIFYING CIRCUMSTANCE THAT PREVENTS CRIMINAL LIABILITY FROM ATTACHING.

III

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO TAKE JUDICIAL NOTICE OF THE PROVISIONS OF THE LANDBANK CHARTER RELATIVE TO THE COLLECTION OF ITS FINANCIAL EXPOSURES.[13]

Essentially, the issue to be resolved in this case is whether the CA erred in reversing the

Resolution of the DOJ finding probable cause to hold respondent liable for violation of B.P. 22.

Petitioner asserts that the June 3, 1998 Restructuring Agreement did not release FWCC

from its obligation with Land Bank.[14]  It merely accommodated FWCC’s sister company, RJ

Ventures and Development Corporation.[15]Whether there was novation or not is also not

determinative of respondent’s responsibility for violation of B.P. 22, as the said special law

punishes the act of issuing a worthless check and not the purpose for which the check was issued

or the terms and conditions relating to its issuance. In ruling that the Order dated May 28, 1998 of

the RTC in Special Proceedings No. M-4686 constituted a justifying circumstance, the CA failed to

take judicial notice of Section 86-B (4)[16] of Republic Act No. 7907 which excludes the proceeds of

the checks from the property of the insolvent FWCC.   

Respondent counters that there was novation which occurred prior to the institution of

the criminal complaint against him and that if proven, it would affect his criminal liability.[17] Respondent averred that if the CA would judicially confirm the existence of novation in the

appeal of Civil Case No. 98-2337 before it, then it would follow that the value represented by the

Page 65: estafa, bp 22

subject checks has been extinguished. Respondent argues that the consideration or value of

the subject checks have been modified or novated with the execution of the Restructuring

Agreement. The payment of the obligation supposedly already depended on the terms and

conditions of the Restructuring Agreement and no longer on the respective maturity dates of the

subject checks as the value or consideration of the subject checks had been rendered inexistent

by the subsequent execution of the Restructuring Agreement. He maintains that the subject

checks can no longer be the basis of criminal liability since the obligation for which they were

issued had already been novated or abrogated.

We grant the petition.

A prejudicial question generally exists in a situation where a civil action and a criminal

action are both pending, and there exists in the former an issue that must be preemptively

resolved before the latter may proceed, because howsoever the issue raised in the civil action is

resolved would be determinative juris et de jure of the guilt or innocence of the accused in the

criminal case.[18]  The elements of a prejudicial question are provided under Section 7, Rule

111 of the Revised Rules of Criminal Procedure, as amended, as follows: (i) the previously

instituted civil action involves an issue similar or intimately related to the issue raised in the

subsequent criminal action, and (ii) the resolution of such issue determines whether or not the

criminal action may proceed.[19]

A prejudicial question is understood in law as that which must precede the criminal action

and which requires a decision before a final judgment can be rendered in the criminal action with

which said question is closely connected.[20]  Not every defense raised in a civil action will raise a

prejudicial question to justify suspension of the criminal action. The defense must involve an issue

similar or intimately related to the same issue raised in the criminal case and its resolution should

determine whether or not the latter action may proceed.   If the resolution of the issue in the civil

action will not determine the criminal responsibility of the accused in the criminal action based on the

same facts, or if there is no necessity that the civil case be determined first before taking up the

criminal case, the civil case does not involve a prejudicial question.[21]  Neither is there a prejudicial

question if the civil and the criminal action can, according to law, proceed independently of each

other. [22]

In the instant case, we find that the question whether there was novation of the Credit

Line Agreement or not is not determinative of whether respondent should be prosecuted for

violation of the Bouncing Checks Law. 

Page 66: estafa, bp 22

Respondent’s contention that if it be proven that the loan of FWCC had been novated and

restructured then his liability under the dishonored checks would be extinguished, fails to

persuade us. There was no express stipulation in the Restructuring Agreement that respondent is

released from his liability on the issued checks and in fact the letter-agreements between FWCC

and Land Bank expressly provide that respondent’s JSS (Joint and Several Signatures) continue

to secure the loan obligation  and the postdated checks issued continue to guaranty the

obligation.   In fact, as aptly pointed out by petitioner, out of the nine (9) checks in question, eight

(8) checks were dated June 8 to October 30, 1998 or after the execution of the June 3, 1998

Restructuring Agreement. If indeed respondent’s liability on the checks had been extinguished

upon the execution of the Restructuring Agreement, then respondent should have demanded the

return of the checks.[23]  However, there was no proof that he had been released from his

obligation.  On the contrary, the Restructuring Agreement contains a proviso which states that

“This Agreement shall not novate or extinguish all previous security, mortgage, and other

collateral agreements, promissory notes, solidary undertaking previously executed by and

between the parties and shall continue in full force and effect modified only by the provisions of

this Agreement.”[24]

Moreover, it is well settled that the mere act of issuing a worthless check, even if merely

as an accommodation, is covered by B.P. 22.[25]  Thus, this Court has held that the agreement

surrounding the issuance of dishonored checks is irrelevant to the prosecution for violation of B.P.

22.[26]  The gravamen of the offense punished by B.P. 22 is the act of making and issuing a

worthless check or a check that is dishonored upon its presentment for payment.[27]  Section 1 of

B.P. 22 enumerates the following elements: (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.   Thus, even if it be subsequently

declared that novation took place between the FWCC and petitioner, respondent is not exempt

from prosecution for violation of B.P. 22 for the dishonored checks.

As to the issue of whether the Order dated May 28, 1998 of the RTC of Makati City in

Special Proceedings No. M-4686 for Involuntary Insolvency constitutes as a justifying

circumstance that prevents criminal liability from attaching, we rule in the negative.  As stated at

the outset, the said order forbids FWCC from paying its debts as well as from delivering any

property belonging to it to any person for its benefit.  Respondent, however, cannot invoke this

Page 67: estafa, bp 22

Order which was directed only upon FWCC and is not applicable to him.  Therefore, respondent,

as surety of the loan is not exempt from complying with his obligation for the issuance of the

checks.                    

WHEREFORE, the petition for review on certiorari is GRANTED.   The November 28,

2001 Decision and August 6, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 62773

are hereby REVERSED and SET ASIDE.  The Resolution dated October 25, 2000 of the

Department of Justice directing the filing of appropriate Informations for violation of B.P. 22

against respondent Ramon P. Jacinto is hereby REINSTATED and UPHELD. 

No costs.

SO ORDERED.