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ARTICLE 315

RAUL H. SESBRENO, petitioner, vs.HONORABLE COURT OF APPEALS and HERMILO RODIS, SR., respondents.

QUIASON, J.:

Private respondents Hermilo Rodis, Sr., together with Douglas Sandiego and Ricardo Silverio, Sr., was charged with estafa before the Regional Trial Court, Branch 20, Cebu, in an information docketed as Criminal Case No. CU-10568, which reads as follows:

That on or about the 9th day of February, 1981, and for sometime prior and subsequent thereto, in the City of Cebu, Philippines, and within the jurisdiction of this Honorable Court, the said accused, conniving and confederating together and mutually helping one another, having received from Atty. Raul H. Sesbreno the sum of P300,000.00 as money market placement for 32 days at 20% interest with said corporation or a maturity date of March 13, 1981, with the obligation on their part to immediately account for and turn over to said Atty. Raul H. Sesbreno the aforesaid sum of money including the 20% interest upon maturity, or the total sum of P305,333.33, the said accused, once in possession of said sum of money, far from complying with their obligation, with deliberate intent, with intent of gain and of defrauding the herein complainant, did then and there misappropriate, misapply and convert into their own personal use and benefit the same, and despite repeated demands made upon them by Atty. Raul H. Sesbreno, they have failed and refused and up to the present time still fail and refuse to comply with their obligation, to the damage and prejudice of Atty. Raul H. Sesbreno, in the aforementioned sum of P300,000.00 Philippine Currency (Rollo, p. 80).

Respondent Rodis moved to quash the information on the ground that the Securities and Exchange Commission (SEC), not the regular courts, had jurisdiction over the offense charged and that the facts stated herein did not constitute an offense (Record [Folio No. I], p. 309). The trial court denied the motion and private respondent elevated the case to the then Intermediate Appellate Court on a petition for certiorari docketed as AC-G.R. SP No. 15448.

On August 16, 1983, the appellate court dismissed the petition after finding no grave abuse of discretion on the part of the trial court in denying the motion to quash (Record [Folio No. I], p. 633). The motion for reconsideration was, likewise, denied. Thus, private respondent was, likewise, denied. Thus, private respondent filed a petition for review on certiorari with this Court, docketed as G.R. No. 65477. On February 6, 1984, the petition was denied.

Hence, trial ensued in the criminal case. However, after the prosecution had rested its case, private respondent filed a motion to dismiss on demurrer to evidence based on the core proposition that there was no criminal offense of estafa from the non-payment of a money market placement (Record [Folio No. II], p. 210). The motion alleged that herein petitioner had

also filed a similar complaint against Elizabeth de Villa involving the same money market placement before the City Fiscal of Cebu; but, upon review of the complaint, then Minister of Justice Estelito Mendoza directed the dismissal of the complaint on the ground that a money market placement partook of the nature of a loan and therefore no criminal liability for estafa could arise from non-payment thereof.

On March 13, 1985, the trial court denied the motion to dismiss (Record [Folio No. II], p. 310). On June 21, 1985, it issued an order stating that private respondent had waived his right to present evidence by his dilatory motions to postpone the trial of the case (Ibid., p. 329).

Private respondent then filed a petition for certiorari and prohibition before the Intermediate Appellate Court under Docket No. AC-G.R. SP No. 6315 (Ibid., p. 365) assailing the Order of March 13, 1985 as tainted with grave abuse of discretion amounting to lack or excess of jurisdiction.

On December 29, 1987, the appellate court rendered a decision based on Perez v. Court of Appeals, 127 SCRA 636 (1984), upholding private respondent's contention that a money market placement is in the nature of a loan which entails the transfer of ownership of the money so invested and therefore the liability for its return is civil in nature (Rollo, p. 79). The dispositive portion of the decision reads:

WHEREFORE, finding the present petition to be impressed with merit, the same petition to be impressed with merit, the same is accordingly GRANTED, and the Order of March 13, 1985, as well as that of June 21, 1985 in Criminal Case No. CU-10568, are (sic) hereby set aside. The respondent Judge is directed to issue in lieu thereof an appropriate order (i) granting petitioner's motion to dismiss on demurrer to evidence; (ii) dismissing Criminal Case No. CU-10568 in due course; and (iii) declaring mooted all acts, orders and processes made and done therein during the pendency of this petition (Rollo, p. 86).

Upon a motion for the reconsideration of said decision, the Court of Appeals modified the dispositive portion of the decision as follows:

WHEREFORE, finding the present petition to be impressed with merit, the same is accordingly GRANTED, and the Order of March 13, 1985 in Criminal Case No. CU-10568, is hereby set aside. The respondent Judge is directed to issue in lieu thereof an appropriate order (i) granting petitioner's motion to dismiss on demurrer to evidence; (ii) dismissing Criminal Case No. CU-10568 as against petitioner Hermilo Rodis, Sr. only; and (iii) directing respondent judge to determine the civil liability, if any, of petitioner Hermilo Rodis, Sr. to private respondent Raul H. Sesbreno from the evidence extant in the record of said case (CU-10568) (Rollo, p. 117).

Consequently, petitioner interposed the instant petition alleging that the Court of Appeals gravely erred in:

a. Taking cognizance over CA-GR SP No. 06315 even if it has NO JURISDICTION over the issue raised by the petition for certiorari filed therein;

b. Deciding CA-GR SP No. 06315 in a way probably not in accord with law or with the applicable decisions of this Honorable Supreme Court (Rollo, p. 10).

On the issue of jurisdiction, petitioner contends that by the filing of a motion to dismiss on demurrer to evidence, private respondent, in effect, admitted the truth of the allegations in the information, as well as the evidence presented by the prosecution to support said allegations. Therefore, the only issue raised by private respondent before the Court of Appeals, i.e., whether or not he can be held liable for estafa under the facts obtaining in the case, is purely a question of law for which said appellate court had no jurisdiction (Rollo, pp. 12-13).

In Bernardo v. Court of Appeals, 216 SCRA 224 (1992), this Court clarified the distinction between a question of law and a question of fact in this wise:

. . . . As distinguished from a question of law which exists "when the doubt or difference arises as to what the law is on certain state of facts" — "there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts;" or when the "query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to each other and to the whole and the probabilities of the situation."

An examination of the petition filed before the Court of Appeals disclosed that indeed no question of fact was raised. What private respondent asserted therein was that the facts as alleged and proved by petitioner did not constitute a criminal offense. Clearly then, the only issue to be resolved by the Court of Appeals, which it did resolve, was whether private respondent could be held liable for estafa under the facts obtaining in the criminal case. This certainly is a question of law that should fall within the jurisdiction of this Court.

Petitioner did not assail the jurisdiction of the Court of Appeals during the pendency of his petition in AC-G.R. SP No. 63151. As a matter of fact, he actively participated in the proceedings before said appellate court. While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings, this rule presupposes that laches or estoppel has not supervened. In this regard, Banaga v. Commission on the Settlement of Land Problems, 181 SCRA 599, 608-609 (1990) is most enlightening. The Court therein stated:

This Court has time and again frowned upon the undesirable practice of party submitting his case for decision and then accepting the judgment, only if favorable when adverse. Here, a party may be estopped or barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of the proceedings. This principle should deter those who are disposed to tifle with the courts by taking inconsistent positions contrary to the elementary principles of right dealing and good faith (Tijam v. Sibonghanoy, No. L-21450, April 15, 1968, 23 SCRA 29; Capilitan v. dela Cruz, Nos. L-29536-37, February 28, 1974, 55 SCRA 706; Marquez v. Secretary of Labor, G.R. 80685, March 16, 1989). . . .

On the pivotal issue of whether or not private respondent may be held liable for estafa under the facts obtaining in the trial court, respondent court held that private respondent's liability, if any, is only civil. The nature of a money market transaction is explained by the Court in Perez v. Court of Appeals (supra, pp. 645-646) as follows:

. . . .What is involved here in a money market transaction. As defined by Lawrence Smith, "the money market is a market dealing in standardized short-term credit instruments (involving large amounts) where lenders and borrowers do not deal directly with each other but through a middle man or dealer in the open market." It involves "commercial papers" which are instruments "evidencing indebtedness of any person or entity . . . which are issued, endorsed, sold or transferred or in any manner conveyed to another person or entity, with or without recourse." The fundamental function of the money market device in its operation is to match and bring together in a most impersonal manner both the "fund users" and the "fund suppliers." The money market is an "impersonal market", free from personal considerations. The market mechanism is intended "to provide quick mobility of money and securities."

The impersonal character of the money market device overlooks the individuals or entities concerned. The issuer of a commercial paper in the money market necessarily knows in advance that it would be expeditiously transacted and transferred to any investor/lender without need of notice to said issuer. In practice, no notification is given to the borrower or issuer of commercial paper of the sale or transfer to the investor.

The Court of Appeals, therefore, correctly ruled that a money market transaction partakes of the nature of a loan and therefore "nonpayment thereof would not give rise to criminal liability for estafa through misappropriation or conversion." Citing Yam v. Malik, 94 SCRA 30 (1979), the Court of Appeals noted that private respondent or Philfinance was not obliged under the money market transaction to return the same money he or the corporation had received from petitioner. In fact, the Court of Appeals noted that petitioner admitted on the witness stand that he had "invested" his money; that "he was not concerned about the same money because what is important is the same amount will be returned to me plus its earnings, because naturally when you give the money with the same serial numbers and you entrust it for investment purposes, when it is invested and there are returns, the same money with the same serial numbers will not be returned to you;" and that private respondent would be "held liable to me in case of their failure to account" for the investment (Rollo, p. 83).

In money market placement, the investor is a lender who loans his money to a borrower through a middleman or dealer. Petitioner here loaned his money to a borrower through Philfinance. When the latter failed to deliver back petitioner's placement with the corresponding interest earned at the maturity date, the liability incurred by Philfinance was a civil one. As such, petitioner could have instituted against Philfinance before the ordinary courts a simple action for recovery of the amount he had invested and he could have prayed therein for damages (Lim Sio Bio v. Court of Appeals, 221 SCRA 307 [1993]; Orosa, Jr., v. Court of Appeals, 193 SCRA 391 [1991]; Manila Electric Company v. Genbancor Development Corporation, 72 SCRA 249 [1976]).

It appears, however, that petitioner did not even implead Philfinance in the complaint for damages arising from the nonreturn of investment with respect to the same money market placement involved herein, which he eventually filed against Delta Motors Corporation and Pilipinas Bank before the Regional Trial Court of Cebu City on September 28, 1982. The said complaint having been dismissed for lack of merit, petitioner appealed to the Court of Appeals which, on March 21, 1989, affirmed the dismissal order. The Court of Appeals held that Philfinance is "solely and legally obligated to return the investment of plaintiff, together with its

earnings, and to answer all the damages plaintiff has suffered incident thereto." Petitioner thereafter filed a petition for review on certiorari, which this Court docketed as G.R. No. 89252.

On May 24, 1993, the Court, through Associate Justice Feliciano, rendered a decision in G.R. No. 89252 ordering Pilipinas Bank to pay petitioner the amount of P304,533.33 in damages plus legal interest thereon at the rate of six percent (6%) per annum counted from April 2, 1981. Pilipinas Bank was the custodian-depositary of DMC PN No. 2731 evidencing petitioner's money market placement. In holding Pilipinas Bank liable for damages for breach of duty, the Court said:

. . . . By failing to deliver the Note to the petitioner as depositor-beneficiary of the thing deposited, Pilipinas effectively and unlawfully deprived petitioner of the Note deposited with it. Whether or not Pilipinas itself benefitted from such conversion or unlawful deprivation inflicted upon petitioner, is of no moment for present purposes. Prima facie, the damages suffered by petitioner consisted of P304,533.33, the portion of the DMC PN No. 2731 assigned to petitioner but lost by him reason of discharge of the Note by compensation, plus legal interest of six percent (6%) per annum counting from 14 March 1981.

The conclusion we have here reached is, of course, without to such right of reimbursement as Pilipinas may have vis-a-vis Philfinance (G.R. No. 89252, Rollo, pp. 295-296).

Petitioner's recovery of his investment and the dismissal of the criminal aspect of the case he had filed against private respondent as a consequence of this decision notwithstanding, he still has an opportunity to hold private respondent liable in Criminal Case No. CU-10568. In People v. Tugbang, 196 SCRA 341 (1991), the Court categorically pronounced that ". . . an accused acquitted of a criminal charge may nevertheless be held in the same case civilly liable where the facts established by the evidence so warrants."

WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals, as modified by its Resolution of May 27, 1988, is AFFIRMED in toto.

SO ORDERED.

RICARDO CELINO, petitioner, vs.THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

CORTES, J.:

On August 14, 1981, the First Assistant Provincial Fiscal of Laguna filed with the Court of First Instance, Eight Judicial District, Branch IV, Calamba, Laguna, an information for ESTAFA against Zosimo Celino, Ricardo Celino and Requerido Celino. The information alleged the following:

That sometime on or about March 17, 1978 and subsequently thereafter, at Brgy. San Nicolas, Bay, Laguna and within the jurisdiction of this Honorable Court, the

above-named accused, with intent to defraud and by means of false pretenses, did then and there wilfully, unlawfully, and feloniously conspiring, confederating and helping with each other and falsely pretending to possess power, influence and/or imaginary transaction, induced one JOSE TAN KAPOE to believe that hidden treasures can be recovered in the latter's yard and as a consequence thereof, demands the sum of P50,230.00 in exchange to such treasures, as in fact said accused received said amount in trust, and once in possession thereof, thru deceitful means misappropriated and misapplied said amount to their own personal use and benefit, to the damage and prejudice of JOSE TAN KAPOE in the aforementioned amount of P50,230.00, Philippine Currency.

CONTRARY TO LAW. (p. 8, Rollo.)

Assisted by their counsel, Ricardo Celino and Zosimo Celino pleaded not guilty to the crime charged. During the arraignment accused Requerido Celino remained at large. It appears that only Ricardo Celino, the petitioner, stood for trial in as much as on July 20, 1983, the trial court dismissed the case against Zosimo Celino who died on June 11, 1983.

In a decision dated May 29, 1985, the trial court found accused Ricardo Celino guilty of the clime charged and sentenced him as follows:

IN VIEW OF ALL THE FOREGOING, the prosecution having established the participation of accused Ricardo Celino as co-principal, beyond reasonable doubt, in the commission of the crime of estafa under Article 315, No. 2 (a) of the Revised Penal Code, the Court hereby finds accused Ricardo Celino guilty thereof and hereby sentences him to suffer imprisonment, after applying the Indeterminate Sentence Law, to two (2) years, eleven (11) months and ten (10) days of prision correccional as the MINIMUM to eight (8) years of prision mayor as the MAXIMUM; and to return to complainant Jose Tan Kapoe the amount of P41,300.00, and to pay the costs of litigation.

SO ORDERED. (p. 9, Rollo.)

The prosecution's version of the facts as testified to by complainant Jose Tan Kapoe, his employee-overseer, Feliciano Batitis, his driver, Ricardo de la Cruz and Pat. Jose Batacan, is summarized in the trial court's decision as follows:

Complainant Jose Tan Kapoe testified that on March 17, 1978, accused Zosimo and Ricardo Celino together with two (2) other companions went to his house and informed him that there was a hidden treasure under his lot located in the poblacion of Calauan, Laguna; that accused Zosimo and Ricardo Celino told him that a certain dwarf entering the body of Zosimo is giving instructions to the latter as to the digging operations; that he will be given millions of pesos; that because he and accused Ricardo Celino as well as their fathers were close friends, he believed them; that they dug a hole in his ricemill up to May 31, 1978; that they told him that they discovered a treasure, a jar full of gold; that both accused Ricardo and Zosimo did not allow him to see it by covering it with a sack and white cloth; that both Ricardo and Zosimo told him to give P10,000.00 and he got the money from his safety vault, placed it in a white envelope, 6x3 inches, and gave it to the accused Zosimo; that both Ricardo and Zosimo went inside the little

room under the stairs of his house where they brought the jar filled with treasure and placed the money on the treasure; that Ricardo and Zosimo stayed in the room for about 1/2 hour and then they went out of the room and closed the door; that Zosimo told him that they are going back upon instructions of the dwarf and that they will communicate with him again; that the second time, he was told by the two (2) brothers, Requerido and Cipriano Celino to give P5,000.00 which he also placed in a white envelope; that he gave the money to Zosimo who together with his father, accused Ricardo, went inside again the room and they said that they placed the money on the treasure; that he was forbidden to enter or touch the treasure because the dwarf will be angry; that the third time, it was Requerido Celino who advised him to give money allegedly upon instructions of the dwarf and he withdrew money from the Bank of the Philippine Islands and they went through the same procedure in placing the money in the white envelope and entering the room; that Zosimo required him to go to the church of Landayan, located at San Pedro, Laguna for three (3) consecutive days; that the Celinos continued to ask for money to be put in the jar and he got from said bank (Exh. A-1); that all in all, the money which he had given to the accused amounted to P50,230.00 (Exh. A); that when his savings in the bank was exhausted, he asked them to set a deadline and he was told May 30, 1979; that he was hoping by that time, he will get back the money and the gold; that they did not fulfill their promise on May 30, 1979 and so he opened the jar and found that it contained only newspaper, comics, rocks and soil; that thereafter, he wrote a letter to Zosimo to return his money through his driver Batitis (Exh. B) and Zosimo wrote back that he will return the money (Exh. C), (TSN, Hearings of April 28, 1982 and April 21, 1983.)

Prosecution witness Feliciano Batitis who is working for complainant Tan Kapoe as an overseer confirmed the fact that he was instructed by complainant to go to the house of Ricardo and Zosimo at Barrio Maslit and bring the letter (Exh. B) after the jar was opened and complainant found nothing; and, the fact that Zosimo wrote a letter signed by "Apo Dapo" the alleged name of the dwarf who were (sic) possessing ("sumasapi") Zosimo (Exh. C). He likewise testified that he had seen Ricardo and his sons Zosimo and Requerido in the house of complainant many times in 1978 but he did not hear what they were talking about; that he saw them after that excavating and digging inside the ricemill; that he saw complainant give the amounts of P10,000.00 and P5,000.00 to accused Zosimo and Ricardo. (TSN, Hearing of May 16, 1983.)

The third prosecution witness, Ricardo dela Cruz is the driver of herein complainant. He testified that he saw the three (3) accused digging inside the ricemill; that he accompanied complainant to get money from the Bank of Philippine Islands; that he saw complainant give an envelope to accused Ricardo who handed the same to Zosimo and the latter went inside the room under the stairs, that after Zosimo got out of the room, complainant was told not to touch the envelope containing money which he left inside the room; that accused Ricardo was present when this was said; that he saw only the giving of P10,000.00 (TSN. Hearing of July 20, 1983.)

Pat. Jose Batacan merely attested to the fact that upon his investigation when the matter was reported to the police by complainant, he found a hole dug in the

ricemill of complainant; that he saw the jar containing sand and pieces of paper. (TSN, Hearing of October 19, 1983.)

On the other hand, the defense relied on the testimonies of accused Ricardo Celino and one Gualberto Libres:

In his defense, accused Ricardo Celino testified that he never discussed with complainant about a hidden treasure; that if indeed complainant gave money to his son Zosimo Celino (now deceased), he did not know anything about it; that complainant got angry with him because complainant wanted him to return the money given to his son Zosimo; that when he asked his son Zosimo if complainant gave him money, Zosimo denied it; that complainant told him that he had given money to Zosimo and if they will not admit that he gave money, he will file a case against them; that he told complainant not to include him in the case he will file because he had not done anything wrong to him and complainant told him that if he (accused Ricardo) will not return the money, he will be included in the charge; that he answered him why will he return the money when his son did not give him any money; that witnesses Batitis and dela Cruz testified against him because they are complainant's servants; that he and his son Zosimo were likewise charged of estafa at San Pablo City where his son pleaded guilty and the case against him dismissed. (TSN, Hearing of June 20,1984.)

Gualberto Libres testified that he is a neighbor of accused Ricardo Celino and that his house is one (1) meter away from the house of Ricardo; that when complainant was looking for Zosimo, he never asked about accused Ricardo Celino. (TSN, Hearing of January 23, 1985.)

The Court of Appeals affirmed the decision of the trial court finding the accused Ricardo Celino guilty beyond reasonable doubt. The case is now before this Court for review. There are two (2) errors allegedly committed by the appellate court, to wit:

I

THE COURT OF APPEALS ERRED IN NOT APPLYING PROVISIONS OF LAW AND THE JURISPRUDENCE LAID DOWN BY THE SUPREME COURT, IN THE CASE AT BAR.

II

THE COURT OF APPEALS ERRED IN ARRIVING AT A CONCLUSION WHICH IS CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE.

After a careful scrutiny of the record of this case, the Court finds that the Court of Appeals committed no reversible error in affirming Ricardo Celinos conviction.

There is no merit to the petitioner's pretense that the transaction between him and the complainant was one of "joint venture" and that if he had any liability at all, it is civil in nature. The evidence presented in this case conclusively shows that Ricardo Celino, together with his two sons, Zosimo (deceased) and Requerido, led the complainant to believe that there was a hidden treasure underneath his lot; that a dwarf whose spirit supposedly entered the body of Zosimo directed the digging operations; that to obtain said treasure and upon instructions of the

"dwarf," it was necessary for the complainant to give the accused money which amounted to P41,300.00 all in all and to pray in the church for three (3) consecutive days.

Under the abovestated facts, both the trial court and the Court of Appeals found that that there was proof beyond reasonable doubt that the act committed by the petitioner constitutes the crime of estafa defined and punished under Article 315, 2(a) of the Revised Penal Code, to wit:

Art. 315. Swindling (estafa). — Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:

xxx xxx xxx

2. By means of any of the following false pretenses of 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).

xxx xxx xxx

Furthermore, no evidence was adduced by petitioner in support of his contention that he and the complainant were partners in a "joint venture" transaction. The case of U.S. v. Clarin [17 Phil. 85 (1910)] cited by the petitioner is therefore not applicable. The facts clearly show that petitioner together with his sons pretended to possess power to find hidden treasure in order to fleece the complainant of his hard-earned money. Contrary to the petitioner's allegation, the trial court and the Court of Appeals correctly applied the law and jurisprudence laid down by this Court on the matter. Under the cases of People v. Scott [62 Phil 553 (1935)] and U.S. v. de los Reyes [34 Phil. 693 (1916)] bearing similar facts as the case at bar, the acts committed by the petitioner constitute a classic case of swindling under Art. 315 2(a) of the Revised Penal Code aforequoted.

WHEREFORE, the petition for certiorari is DENIED for lack of merit. The Court of Appeals decision dated November 11, 1986 is AFFIRMED.

MITRA vs. PEOPLE

D E C I S I O N

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the

July 31, 2009 Decision[1] and the February 11, 2010 Resolution of the Court of Appeals (CA) in

CA-G.R. CR No. 31740. The subject decision and resolution affirmed the August 22, 2007

Decision of the Regional Trial Court, Branch 2, Batangas City (RTC) which, in turn, affirmed the

May 21, 2007 Decision of the Municipal Trial Court in Cities, Branch 2, Batangas City (MTCC).

THE FACTS:

Petitioner Eumelia R. Mitra (Mitra) was the Treasurer, and Florencio L. Cabrera, Jr. (now

deceased) was the President, of Lucky Nine Credit Corporation (LNCC), a corporation engaged

in money lending activities.

Between 1996 and 1999, private respondent Felicisimo S. Tarcelo (Tarcelo) invested

money in LNCC. As the usual practice in money placement transactions, Tarcelo was issued

checks equivalent to the amounts he invested plus the interest on his investments. The

following checks, signed by Mitra and Cabrera, were issued by LNCC to Tarcelo.[2]

Bank Date Issued Date of Check Amount Check No.

Security Bank September 15, 1998 January 15, 1999 P 3,125.00 0000045804

-do- September 15, 1998 January 15, 1999 125,000.00 0000045805





-do- October 3, 1998 February 3, 1999 2,500.00 0000045875

-do- October 3, 1998 February 3, 1999 100,000.00 0000045876

-do- November 17, 1998 February17, 1999 5,000.00 0000046061

-do- November 17, 1998 March 17, 1999 5,000.00 0000046062


-do- November 19, 1998 January 19, 1999 2,500.00 0000046065

-do- November 19, 1998 February19, 1999 2,500.00 0000046066




-do- November 20, 1998 February 20,

1999

10,000.00 0000046071




-do- November 30, 1998 February 28,

1999

2,500.00 0000046076



When Tarcelo presented these checks for payment, they were dishonored for the reason

“account closed.” Tarcelo made several oral demands on LNCC for the payment of these

checks but he was frustrated. Constrained, in 2002, he caused the filing of seven informations

for violation of Batas Pambansa Blg. 22 (BP 22) in the total amount of P925,000.00 with the

MTCC in Batangas City.[3]

After trial on the merits, the MTCC found Mitra and Cabrera guilty of the charges.

The fallo of the May 21, 2007 MTCC Decision[4] reads:

WHEREFORE, foregoing premises considered, the

accused FLORENCIO I. CABRERA, JR., and EUMELIA R. MITRA are hereby found guilty of the offense of violation of Batas Pambansa Bilang 22 and are herebyORDERED to respectively pay the following fines for each violation and with subsidiary imprisonment in all cases, in case of insolvency:

1. Criminal Case No. 43637 -P200,000.002. Criminal Case No. 43640 -P100,000.003. Criminal Case No. 43648 -P100,000.004. Criminal Case No. 43700 -P125,000.005. Criminal Case No. 43702 -P200,000.006. Criminal Case No. 43704 -P100,000.007. Criminal Case No. 43706 -P100,000.00

Said accused, nevertheless, are adjudged civilly liable and are ordered to pay, in solidum, private complainant Felicisimo S. Tarcelo the amount of NINE HUNDRED TWENTY FIVE THOUSAND PESOS (P925,000.000). SO ORDERED.

Mitra and Cabrera appealed to the Batangas RTC contending that: they signed the

seven checks in blank with no name of the payee, no amount stated and no date of maturity;

they did not know when and to whom those checks would be issued; the seven checks were

only among those in one or two booklets of checks they were made to sign at that time; and that

they signed the checks so as not to delay the transactions of LNCC because they did not

regularly hold office there.[5]

The RTC affirmed the MTCC decision and later denied their motion for reconsideration.

Meanwhile, Cabrera died. Mitra alone filed this petition for review[6] claiming, among others, that

there was no proper service of the notice of dishonor on her. The Court of Appeals dismissed

her petition for lack of merit.

Mitra is now before this Court on a petition for review and submits these issues:

1. WHETHER OR NOT THE ELEMENTS OF VIOLATION OF

BATAS PAMBANSA BILANG 22 MUST BE PROVED BEYOND REASONABLE DOUBT AS AGAINST THE CORPORATION WHO OWNS THE CURRENT ACCOUNT WHERE THE SUBJECT CHECKS WERE DRAWN BEFORE LIABILITY ATTACHES TO THE SIGNATORIES.

2. WHETHER OR NOT THERE IS PROPER SERVICE OF NOTICE OF DISHONOR AND DEMAND TO PAY TO THE PETITIONER AND THE LATE FLORENCIO CABRERA, JR.

The Court denies the petition.

A check is a negotiable instrument that serves as a substitute for money and as a

convenient form of payment in financial transactions and obligations. The use of checks as

payment allows commercial and banking transactions to proceed without the actual handling of

money, thus, doing away with the need to physically count bills and coins whenever payment is

made. It permits commercial and banking transactions to be carried out quickly and

efficiently. But the convenience afforded by checks is damaged by unfunded checks that

adversely affect confidence in our commercial and banking activities, and ultimately injure public

interest.

BP 22 or the Bouncing Checks Law was enacted for the specific purpose of addressing

the problem of the continued issuance and circulation of unfunded checks by irresponsible

persons. To stem the harm caused by these bouncing checks to the community, BP 22

considers the mere act of issuing an unfunded check as an offense not only against property but

also against public order.[7] The purpose of BP 22 in declaring the mere issuance of a bouncing

check as malum prohibitum is to punish the offender in order to deter him and others from

committing the offense, to isolate him from society, to reform and rehabilitate him, and to

maintain social order.[8] The penalty is stiff. BP 22 imposes the penalty of imprisonment for at

least 30 days or a fine of up to double the amount of the check or both imprisonment and fine.

Specifically, BP 22 provides:

SECTION 1. Checks Without Sufficient Funds. — Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more 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.

SECTION 2. Evidence of Knowledge of Insufficient Funds. — The

making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer

pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

Mitra posits in this petition that before the signatory to a bouncing corporate check can

be held liable, all the elements of the crime of violation of BP 22 must first be proven against the

corporation. The corporation must first be declared to have committed the violation before the

liability attaches to the signatories of the checks.[9]

The Court finds Itself unable to agree with Mitra’s posture. The third paragraph of

Section 1 of BP 22 reads: "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." This provision recognizes the reality that a corporation can only act through its officers.

Hence, its wording is unequivocal and mandatory – that the person who actually signed the

corporate check shall be held liable for a violation of BP 22. This provision does not contain any

condition, qualification or limitation.

In the case of Llamado v. Court of Appeals,[10] the Court ruled that the accused was

liable on the unfunded corporate check which he signed as treasurer of the corporation. He

could not invoke his lack of involvement in the negotiation for the transaction as a defense

because BP 22 punishes the mere issuance of a bouncing check, not the purpose for which the

check was issued or in consideration of the terms and conditions relating to its issuance. In this

case, Mitra signed the LNCC checks as treasurer. FollowingLlamado, she must then be held

liable for violating BP 22.

Another essential element of a violation of BP 22 is the drawer’s knowledge that he has

insufficient funds or credit with the drawee bank to cover his check. Because this involves a

state of mind that is difficult to establish, BP 22 creates the prima facie presumption that once

the check is dishonored, the drawer of the check gains knowledge of the insufficiency, unless

within five banking days from receipt of the notice of dishonor, the drawer pays the holder of the

check or makes arrangements with the drawee bank for the payment of the check. The service

of the notice of dishonor gives the drawer the opportunity to make good the check within those

five days to avert his prosecution for violating BP 22.

Mitra alleges that there was no proper service on her of the notice of dishonor and, so,

an essential element of the offense is missing. This contention raises a factual issue that is not

proper for review. It is not the function of the Court to re-examine the finding of facts of the Court

of Appeals. Our review is limited to errors of law and cannot touch errors of facts unless the

petitioner shows that the trial court overlooked facts or circumstances that warrant a different

disposition of the case[11] or that the findings of fact have no basis on record. Hence, with

respect to the issue of the propriety of service on Mitra of the notice of dishonor, the Court gives

full faith and credit to the consistent findings of the MTCC, the RTC and the CA.

The defense postulated that there was no demand served upon the accused, said denial deserves scant consideration. Positive allegation of the prosecution that a demand letter was served upon the accused prevails over the denial made by the accused. Though, having denied that there was no demand letter served on April 10, 2000, however, the prosecution positively alleged and proved that the questioned demand letter was served upon the accused on April 10, 2000, that was at the time they were attending Court hearing before Branch I of this Court. In fact, the prosecution had submitted a Certification issued by the other Branch of this Court certifying the fact that the accused were present during the April 10, 2010hearing. With such straightforward and categorical testimony of the witness, the Court believes that the prosecution has achieved what was dismally lacking in the three (3) cases of Betty King, Victor Ting and Caras – evidence of the receipt by the accused of the demand letter sent to her. The Court accepts the prosecution’s narrative that the accused refused to sign the same to evidence their receipt thereof. To require the prosecution to produce the signature of the accused on said demand letter would be imposing an undue hardship on it. As well, actual receipt acknowledgment is not and has never been required of the prosecution either by law or jurisprudence.[12] [emphasis supplied]

With the notice of dishonor duly served and disregarded, there arose the presumption

that Mitra and Cabrera knew that there were insufficient funds to cover the checks upon their

presentment for payment. In fact, the account was already closed.

To reiterate the elements of a violation of BP 22 as contained in the above-quoted

provision, a violation exists where:

1. a person makes or draws and issues a check to apply on account or for value;

2. the person who makes or draws and issues the check knows at the time of

issue that he does not have sufficient funds in or credit with the drawee bank

for the full payment of the check upon its presentment; and

3. the check is subsequently dishonored by the drawee bank for insufficiency of

funds or credit, or would have been dishonored for the same reason had not

the drawer, without any valid reason, ordered the bank to stop payment. [13]

There is no dispute that Mitra signed the checks and that the bank dishonored the

checks because the account had been closed. Notice of dishonor was properly given, but Mitra

failed to pay the checks or make arrangements for their payment within five days from notice.

With all the above elements duly proven, Mitra cannot escape the civil and criminal liabilities

that BP 22 imposes for its breach.[14]

WHEREFORE, the July 31, 2009 Decision and the February 11, 2010 Resolution of the

Court of Appeals in CA-G.R. CR No. 31740 are hereby AFFIRMED.

SO ORDERED.

NEW PACIFIC TIMBER & SUPPLY COMPANY, INC., petitioner, vs.HON. ALBERTO V. SENERIS, RICARDO A. TONG and EX-OFFICIO SHERIFF HAKIM S. ABDULWAHID,respondents.

CONCEPCION JR., J.:

A petition for certiorari with preliminary injunction to annul and/or modify the order of the Court of First Instance of Zamboanga City (Branch ii) dated August 28, 1975 denying petitioner's Ex-Parte Motion for Issuance of Certificate Of Satisfaction Of Judgment.

Herein petitioner is the defendant in a complaint for collection of a sum of money filed by the private respondent. 1On July 19, 1974, a compromise judgment was rendered by the respondent Judge in accordance with an amicable settlement entered into by the parties the terms and conditions of which, are as follows:

(1) That defendant will pay to the plaintiff the amount of Fifty Four Thousand Five Hundred Pesos (P54,500.00) at 6% interest per annum to be reckoned from August 25, 1972;

(2) That defendant will pay to the plaintiff the amount of Six Thousand Pesos (P6,000.00) as attorney's fees for which P5,000.00 had been acknowledged received by the plaintiff under Consolidated Bank and Trust Corporation Check No. 16-135022 amounting to P5,000.00 leaving a balance of One Thousand Pesos (P1,000.00);

(3) That the entire amount of P54,500.00 plus interest, plus the balance of P1,000.00 for attorney's fees will be paid by defendant to the plaintiff within five months from today, July 19, 1974; and

(4) Failure one the part of the defendant to comply with any of the above-conditions, a writ of execution may be issued by this Court for the satisfaction of the obligation. 2

For failure of the petitioner to comply with his judgment obligation, the respondent Judge, upon motion of the private respondent, issued an order for the issuance of a writ of execution on December 21, 1974. Accordingly, writ of execution was issued for the amount of P63,130.00 pursuant to which, the Ex-Officio Sheriff levied upon the following personal properties of the petitioner, to wit:

(1) Unit American Lathe 24

(1) Unit American Lathe 18 Cracker Wheeler

(1) Unit Rockford Shaper 24

and set the auction sale thereof on January 15, 1975. However, prior to January 15, 1975, petitioner deposited with the Clerk of Court, Court of First Instance, Zamboanga City, in his capacity as Ex-Officio Sheriff of Zamboanga City, the sum of P63,130.00 for the payment of the judgment obligation, consisting of the following:

1. P50.000.00 in Cashier's Check No. S-314361 dated January 3, 1975 of the Equitable Banking Corporation; and

2. P13,130.00 incash. 3

In a letter dated January 14, 1975, to the Ex-Officio Sheriff, 4 private respondent through counsel, refused to accept the check as well as the cash deposit. In the 'same letter, private respondent requested the scheduled auction sale on January 15, 1975 to proceed if the petitioner cannot produce the cash. However, the scheduled auction sale at 10:00 a.m. on January 15, 1975 was postponed to 3:00 o'clock p.m. of the same day due to further attempts to settle the case. Again, the scheduled auction sale that afternoon did not push through because of a last ditch attempt to convince the private respondent to accept the check. The auction sale was then postponed on the following day, January 16, 1975 at 10:00 o'clock a.m. 5 At about 9:15 a.m., on January 16, 1975, a certain Mr. Tañedo representing the petitioner appeared in the office of the Ex-Officio Sheriff and the latter reminded Mr. Tañedo that the auction sale would proceed at 10:00 o'clock. At 10:00 a.m., Mr. Tañedo and Mr. Librado, both representing the petitioner requested the Ex-Officio Sheriff to give them fifteen minutes within which to contract their lawyer which request was granted. After Mr. Tañedo and Mr. Librado failed to return, counsel for private respondent insisted that the sale must proceed and the Ex-

Officio Sheriff proceeded with the auction sale. 6 In the course of the proceedings, Deputy Sheriff Castro sold the levied properties item by item to the private respondent as the highest bidder in the amount of P50,000.00. As a result thereof, the Ex-Officio Sheriff declared a deficiency of P13,130.00. 7 Thereafter, on January 16, 1975, the Ex-Officio Sheriff issued a "Sheriff's Certificate of Sale" in favor of the private respondent, Ricardo Tong, married to Pascuala Tong for the total amount of P50,000.00 only. 8 Subsequently, on January 17, 1975, petitioner filed an ex-parte motion for issuance of certificate of satisfaction of judgment. This motion was denied by the respondent Judge in his order dated August 28, 1975. In view thereof, petitioner now questions said order by way of the present petition alleging in the main that said respondent Judge capriciously and whimsically abused his discretion in not granting the motion for issuance of certificate of satisfaction of judgment for the following reasons: (1) that there was already a full satisfaction of the judgment before the auction sale was conducted with the deposit made to the Ex-Officio Sheriff in the amount of P63,000.00 consisting of P50,000.00 in Cashier's Check and P13,130.00 in cash; and (2) that the auction sale was invalid for lack of proper notice to the petitioner and its counsel when the Ex-Officio Sheriff postponed the sale from June 15, 1975 to January 16, 1976 contrary to Section 24, Rule 39 of the Rules of Court. On November 10, 1975, the Court issued a temporary restraining order enjoining the respondent Ex-Officio Sheriff from delivering the personal properties subject of the petition to Ricardo A. Tong in view of the issuance of the "Sheriff Certificate of Sale."

We find the petition to be impressed with merit.

The main issue to be resolved in this instance is as to whether or not the private respondent can validly refuse acceptance of the payment of the judgment obligation made by the petitioner consisting of P50,000.00 in Cashier's Check and P13,130.00 in cash which it deposited with the Ex-Officio Sheriff before the date of the scheduled auction sale. In upholding private respondent's claim that he has the right to refuse payment by means of a check, the respondent Judge cited the following:

Section 63 of the Central Bank Act:

Sec. 63. Legal Character. — Checks representing deposit money do not have legal tender power and their acceptance in payment of debts, both public and private, is at the option of the creditor, Provided, however, that a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor in cash in an amount equal to the amount credited to his account.

Article 1249 of the New Civil Code:

Art. 1249. — The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines.

The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.

In the meantime, the action derived from the original obligation shall be held in abeyance.

Likewise, the respondent Judge sustained the contention of the private respondent that he has the right to refuse payment of the amount of P13,130.00 in cash because the said amount is less than the judgment obligation, citing the following Article of the New Civil Code:

Art. 1248. Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to receive the presentations in which the obligation consists. Neither may the debtor be required to make partial payment.

However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and the debtor may effect the payment of the former without waiting for the liquidation of the latter.

It is to be emphasized in this connection that the check deposited by the petitioner in the amount of P50,000.00 is not an ordinary check but a Cashier's Check of the Equitable Banking Corporation, a bank of good standing and reputation. As testified to by the Ex-Officio Sheriff with whom it has been deposited, it is a certified crossed check. 9It is a well-known and accepted practice in the business sector that a Cashier's Check is deemed as cash. Moreover, since the said check had been certified by the drawee bank, by the certification, the funds represented by the check are transferred from the credit of the maker to that of the payee or holder, and for all intents and purposes, the latter becomes the depositor of the drawee bank, with rights and duties of one in such situation. 10 Where a check is certified by the bank on which it is drawn, the certification is equivalent to acceptance. 11 Said certification "implies that the check is drawn upon sufficient funds in the hands of the drawee, that they have been set apart for its satisfaction, and that they shall be so applied whenever the check is presented for payment. It is an understanding that the check is good then, and shall continue good, and this agreement is as binding on the bank as its notes in circulation, a certificate of deposit payable to the order of the depositor, or any other obligation it can assume. The object of certifying a check, as regards both parties, is to enable the holder to use it as money." 12 When the holder procures the check to be certified, "the check operates as an assignment of a part of the funds to the creditors." 13 Hence, the exception to the rule enunciated under Section 63 of the Central Bank Act to the effect "that a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor in cash in an amount equal to the amount credited to his account" shall apply in this case. Considering that the whole amount deposited by the petitioner consisting of Cashier's Check of P50,000.00 and P13,130.00 in cash covers the judgment obligation of P63,000.00 as mentioned in the writ of execution, then, We see no valid reason for the private respondent to have refused acceptance of the payment of the obligation in his favor. The auction sale, therefore, was uncalled for. Furthermore, it appears that on January 17, 1975, the Cashier's Check was even withdrawn by the petitioner and replaced with cash in the corresponding amount of P50,000.00 on January 27, 1975 pursuant to an agreement entered into by the parties at the instance of the respondent Judge. However, the private respondent still refused to receive the same. Obviously, the private respondent is more interested in the levied properties than in the mere satisfaction of the judgment obligation. Thus, petitioner's motion for the issuance of a certificate of satisfaction of judgment is clearly meritorious and the respondent Judge gravely abused his discretion in not granting the same under the circumstances.

In view of the conclusion reached in this instance, We find no more need to discuss the ground relied in the petition.

It is also contended by the private respondent that Appeal and not a special civil action for certiorari is the proper remedy in this case, and that since the period to appeal from the decision of the respondent Judge has already expired, then, the present petition has been filed out of time. The contention is untenable. The decision of the respondent Judge in Civil Case No. 250 (166) has long become final and executory and so, the same is not being questioned herein. The subject of the petition at bar as having been issued in grave abuse of discretion is the order dated August 28, 1975 of the respondent Judge which was merely issued in execution of the said decision. Thus, even granting that appeal is open to the petitioner, the same is not an adequate and speedy remedy for the respondent Judge had already issued a writ of execution. 14

WHEREFORE, in view of all the foregoing, judgment is hereby rendered:

1. Declaring as null and void the order of the respondent Judge dated August 28, 1975;

2. Declaring as null and void the auction sale conducted on January 16, 1975 and the certificate of sale issued pursuant thereto;

3. Ordering the private respondent to accept the sum of P63,130.00 under deposit as payment of the judgment obligation in his favor;

4. Ordering the respondent Judge and respondent Ex-Officio Sheriff to release the levied properties to the herein petitioner.

The temporary restraining order issued is hereby made permanent.

Costs against the private respondent.

SO ORDERED.

GOSIACO vs. CHING (2009)

D E C I S I O N

TINGA, J.:

The right to recover due and demandable pecuniary obligations incurred by juridical

persons such as corporations cannot be impaired by procedural rules. Our rules of procedure

governing the litigation of criminal actions for violation of Batas Pambansa Blg. 22 (B.P. 22)

have given the appearance of impairing such substantive rights, and we take the opportunity

herein to assert the necessary clarifications.

Before us is a Rule 45 petition[1] which seeks the reversal of the Decision[2] of the Court

of Appeals in CA-GR No. 29488. The Court of Appeals' decision affirmed the decision [3] of the

Regional Trial Court of Pasig, Branch 68 in Criminal Case No. 120482. The RTC's decision

reversed the decision[4] of the Metropolitan Trial Court of San Juan, Branch 58 in Criminal Case

No. 70445 which involved a charge of violation of B.P. Blg. 22 against respondents Leticia

Ching (Ching) and Edwin Casta (Casta).

On 16 February 2000, petitioner Jaime Gosiaco (petitioner) invested P8,000,000.00 with

ASB Holdings, Inc. (ASB) by way of loan. The money was loaned to ASB for a period of 48 days

with interest at 10.5% which is equivalent to P112,000.00. In exchange, ASB through its

Business Development Operation Group manager Ching, issued DBS checks no. 0009980577

and 0009980578 for P8,000,000.00 and P112,000.00 respectively. The checks, both signed by

Ching, were drawn against DBS Bank Makati Head Office branch. ASB, through a letter

dated 31 March 2000, acknowledged that it owed petitioner the abovementioned amounts.[5]

Upon maturity of the ASB checks, petitioner went to the DBS Bank San Juan Branch to

deposit the two (2) checks. However, upon presentment, the checks were dishonored and

payments were refused because of a stop payment order and for insufficiency of funds.

Petitioner informed respondents, through letters dated 6 and 10 April 2000,[6] about the dishonor

of the checks and demanded replacement checks or the return of the money placement but to

no avail. Thus, petitioner filed a criminal complaint for violation of B.P. Blg. 22 before the

Metropolitan Trial Court of San Juan against the private respondents.

Ching was arraigned and tried while Casta remained at large. Ching denied liability and

claimed that she was a mere employee of ASB. She asserted that she did not have knowledge

as to how much money ASB had in the banks. Such responsibility, she claimed belonged to

another department.

On 15 December 2000, petitioner moved[7] that ASB and its president, Luke Roxas, be

impleaded as party defendants. Petitioner, then, paid the corresponding docket fees. However,

the MTC denied the motion as the case had already been submitted for final decision.[8]

On 8 February 2001, the MTC acquitted Ching of criminal liability but it did not absolve

her from civil liability. The MTC ruled that Ching, as a corporate officer of ASB, was civilly liable

since she was a signatory to the checks.[9]

Both petitioner and Ching appealed the ruling to the RTC. Petitioner appealed to the RTC

on the ground that the MTC failed to hold ASB and Roxas either jointly or severally liable with

Ching. On the other hand, Ching moved for a reconsideration which was subsequently denied.

Thereafter, she filed her notice of appeal on the ground that she should not be held civilly liable

for the bouncing checks because they were contractual obligations of ASB.

On 12 July 2005, the RTC rendered its decision sustaining Ching's appeal. The RTC

affirmed the MTC’s ruling which denied the motion to implead ASB and Roxas for lack of

jurisdiction over their persons. The RTC also exonerated Ching from civil liability and ruled that

the subject obligation fell squarely on ASB. Thus, Ching should not be held civilly liable.[10]

Petitioner filed a petition for review with the Court of Appeals on the grounds that the RTC

erred in absolving Ching from civil liability; in upholding the refusal of the MTC to implead ASB

and Roxas; and in refusing to pierce the corporate veil of ASB and hold Roxas liable.

On 19 July 2006, the Court of Appeals affirmed the decision of the RTC and stated that

the amount petitioner sought to recover was a loan made to ASB and not to Ching. Roxas’

testimony further bolstered the fact that the checks issued by Ching were for and in behalf of

ASB. The Court of Appeals ruled that ASB cannot be impleaded in a B.P. Blg. 22 case since it is

not a natural person and in the case of Roxas, he was not the subject of a preliminary

investigation. Lastly, the Court of Appeals ruled that there was no need to pierce the corporate

veil of ASB since none of the requisites were present.[11]

Hence this petition.

Petitioner raised the following issues: (1) is a corporate officer who signed a bouncing

check civilly liable under B.P. Blg. 22; (2) can a corporation be impleaded in a B.P. Blg. 22 case;

and (3) is there a basis to pierce the corporate veil of ASB?

B.P. Blg. 22 is popularly known as the Bouncing Checks Law. Section 1 of B.P. Blg. 22

provides: xxx xxx xxx

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.

B.P. Blg. 22 was enacted to address the rampant issuance of bouncing checks as

payment for pre-existing obligations. The circulation of bouncing checks adversely affected

confidence in trade and commerce. The State criminalized such practice because it was

deemed injurious to public interests[12] and was found to be pernicious and inimical to public

welfare.[13] B.P. Blg. 22 punishes the act of making and issuing bouncing checks. It is the act

itself of issuing the checks which is considered malum prohibitum.The law is an offense against

public order and not an offense against property.[14] It penalizes the issuance of a check without

regard to its purpose. It covers all types of checks.[15] Even checks that were issued as a form of

deposit or guarantee were held to be within the ambit of B.P. Blg. 22.[16]

When a corporate officer issues a worthless check in the corporate name he may be

held personally liable for violating a penal statute.[17] The statute imposes criminal penalties on

anyone who with intent to defraud another of money or property, draws or issues a check on

any bank with knowledge that he has no sufficient funds in such bank to meet the check on

presentment.[18] Moreover, the personal liability of the corporate officer is predicated on the

principle that he cannot shield himself from liability from his own acts on the ground that it was a

corporate act and not his personal act.[19] As we held in Llamado v. Court of Appeals:[20]

Petitioner's argument that he should not be held personally liable for the amount of the check because it was a check of the Pan Asia Finance Corporation and he signed the same in his capacity as Treasurer of the corporation, is also untenable. The third paragraph of Section 1 of BP Blg. 22 states: “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.”

The general rule is that a corporate officer who issues a bouncing corporate check can

only be held civilly liable when he is convicted. In the recent case of Bautista v. Auto Plus

Traders Inc.,[21] the Court ruled decisively that the civil liability of a corporate officer in a B.P. Blg.

22 case is extinguished with the criminal liability. We are not inclined through this case to revisit

so recent a precedent, and the rule of stare decisis precludes us to discharge Ching of any civil

liability arising from the B.P. Blg. 22 case against her, on account of her acquittal in the criminal

charge.

We recognize though the bind entwining the petitioner. The records clearly show that it is

ASB is civilly obligated to petitioner. In the various stages of this case, petitioner has been

proceeding from the

premise that he is unable to pursue a separate civil action against ASB itself for the recovery of

the amounts due from the subject checks. From this premise, petitioner sought to implead ASB

as a defendant to the B.P. Blg. 22 case, even if such case is criminal in nature.[22]

What supplied the notion to the petitioner that he was unable to pursue a separate civil

action against ASB? He cites the Revised Rules on Criminal Procedure, particularly the

provisions involving B.P. Blg. 22 cases, which state that:

Rule 111, Section 1—Institution of criminal and civil action.

x x x (b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed. Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complainant or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay the filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions.[23]

We are unable to agree with petitioner that he is entitled to implead ASB in the B.P. Blg.

22 case, or any other corporation for that matter, even if the Rules require the joint trial of both

the criminal and civil liability. A basic maxim in statutory construction is that the interpretation of

penal laws is strictly construed against the State and liberally construed against the accused.

Nowhere in B.P. Blg. 22 is it provided that a juridical person may be impleaded as an accused

or defendant in the prosecution for violations of that law, even in the litigation of the civil aspect

thereof.

Nonetheless, the substantive right of a creditor to recover due and demandable

obligations against a debtor-corporation cannot be denied or diminished by a rule of procedure.

Technically, nothing in Section 1(b) of Rule 11 prohibits the reservation of a separate civil action

against the juridical person on whose behalf the check was

issued. What the rules prohibit is the reservation of a separate civil

action against the natural person charged with violating B.P. Blg. 22, including such corporate

officer who had signed the bounced check.

In theory the B.P. Blg. 22 criminal liability of the person who issued the bouncing check

in behalf of a corporation stands independent of the civil liability of the corporation itself, such

civil liability arising from the Civil Code. B.P. Blg. 22 itself fused this criminal liability of the signer

of the check in behalf of the corporation with the corresponding civil liability of the corporation

itself by allowing the complainant to recover such civil liability not from the corporation, but from

the person who signed the check in its behalf. Prior to the amendments to our rules on criminal

procedure, it though clearly was permissible to pursue the criminal liability against the signatory,

while going after the corporation itself for the civil liability.

However, with the insistence under the amended rules that the civil and criminal liability

attaching to the bounced check be pursued jointly, the previous option to directly pursue the civil

liability against the person who incurred the civil obligation–the corporation itself–is no longer

that clear. In theory, the implied institution of the civil case into the criminal case for B.P. Blg. 22

should not affect the civil liability of the corporation for the same check, since such implied

institution concerns the civil liability of the signatory, and not of the corporation.

Let us pursue this point further. B.P. Blg. 22 imposes a distinct civil liability on the

signatory of the check which is distinct from the civil liability of the corporation for the amount

represented from the check. The civil liability attaching to the signatory arises from the

wrongful act of signing the check despite the insufficiency of funds in the account, while

the civil liability attaching to the corporation is itself the very obligation covered by the

check or the consideration for its execution. Yet these civil liabilities are mistaken to be

indistinct. The confusion is traceable to the singularity of the amount of each.

If we conclude, as we should, that under the current Rules of Criminal Procedure, the

civil action that is impliedly instituted in the B.P. Blg. 22 action is only the civil liability of the

signatory, and not that of the corporation itself, the distinctness of the cause of action against

the signatory and that against the corporation is rendered beyond dispute. It follows that the

actions involving these liabilities should be adjudged according to their respective standards and

merits. In the B.P. Blg. 22 case, what the trial court should determine whether or not the

signatory had signed the check with knowledge of the insufficiency of funds or credit in the bank

account, while in the civil case the trial court should ascertain whether or not the obligation itself

is valid and demandable. The litigation of both questions could, in theory, proceed

independently and simultaneously without being ultimately conclusive on one or the other.

It might be argued that under the current rules, if the signatory were made liable for the

amount of the check by reason of the B.P. Blg. 22 case, such signatory would have the option of

recovering the same amount from the corporation. Yet that prospect does not ultimately satisfy

the ends of justice. If the signatory does not have sufficient assets to answer for the amount of

the check–a distinct possibility considering the occasional large-scale transactions engaged in

by corporations – the corporation would not be subsidiarily liable to the complainant, even if it in

truth the controversy, of which the criminal case is just a part, is traceable to the original

obligation of the corporation. While the Revised Penal Code imposes subsidiary civil liability to

corporations for criminal acts engaged in by their employees in the discharge of their duties,

said subsidiary liability applies only to felonies,[24]and not to crimes penalized by special laws

such as B.P. Blg. 22. And nothing in B.P. Blg. 22 imposes such subsidiary liability to the

corporation in whose name the check is actually issued. Clearly then, should the check

signatory be unable to pay the obligation incurred by the corporation, the complainant would be

bereft of remedy unless the right of action to collect on the liability of the corporation is

recognized and given flesh.

There are two prevailing concerns should civil recovery against the corporation be

pursued even as the B.P. Blg. 22 case against the signatory remains extant. First, the possibility

that the plaintiff might be awarded the amount of the check in both the B.P. Blg. 22 case and in

the civil action against the corporation. For obvious reasons, that should not be permitted.

Considering that petitioner herein has no chance to recover the amount of the check through the

B.P. Blg. 22 case, we need not contend with that possibility through this case. Nonetheless, as

a matter of prudence, it is best we refer the matter to the Committee on Rules for the

formulation of proper guidelines to prevent that possibility.

The other concern is over the payment of filing fees in both the B.P. Blg. 22 case and the

civil action against the corporation. Generally, we see no evil or cause for distress if the plaintiff

were made to pay filing fees based on the amount of the check in both the B.P. Blg. 22 case

and the civil action. After all, the plaintiff therein made the deliberate option to file two separate

cases, even if the recovery of the amounts of the check against the corporation could evidently

be pursued through the civil action alone.

Nonetheless, in petitioner’s particular case, considering the previous legal confusion on

whether he is authorized to file the civil case against ASB, he should, as a matter of equity, be

exempted from paying the filing fees based on the amount of the checks should he pursue the

civil action against ASB. In a similar vein and for a similar reason, we likewise find that petitioner

should not be barred by prescription should he file the civil action as the period should not run

from the date the checks were issued but from the date this decision attains finality. The courts

should not be bound strictly by the statute of limitations or the doctrine of laches when to do so,

manifest wrong or injustice would result.[25]

WHEREFORE, the petition is DENIED, without prejudice to the right of petitioner Jaime

U. Gosiaco to pursue an independent civil action against ASB Holdings Inc. for the amount of

the subject checks, in accordance with the terms of this decision. No pronouncements as to

costs.

Let a copy of this Decision be REFERRED to the Committee on Revision of the Rules

for the formulation of the formal rules of procedure to govern the civil action for the

recovery of the amount covered by the check against the juridical person which issued it.

SO ORDERED.

EVANGELINE LADONGA, petitioner, vs.PEOPLE OF THE PHILIPPINES, respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Petitioner Evangeline Ladonga seeks a review of the Decision,1 dated May 17, 1999, of the Court of Appeals in CA-G.R. CR No. 20443, affirming the Decision dated August 24, 1996, of the Regional Trial Court (RTC), Branch 3 of Bohol, in Criminal Case Nos. 7068, 7069 and 7070 convicting her of violation of B.P. Blg. 22, otherwise known as The Bouncing Checks Law.

The factual background of the case is as follows:

On March 27, 1991, three Informations for violation of B.P. Blg. 22 were filed with the RTC, docketed as Criminal Case Nos. 7068 - 7070. The Information in Criminal Case No. 7068 alleges as follows:

That, sometime in May or June 1990, in the City of Tagbilaran, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating, and mutually helping with one another, knowing fully well that they did not have sufficient funds deposited with the United Coconut Planters Bank (UCPB), Tagbilaran Branch, did then and there willfully, unlawfully, and feloniously, draw and issue UCPB Check No. 284743 postdated July 7, 1990 in the amount of NINE THOUSAND SEVENTY-FIVE PESOS AND FIFTY-FIVE CENTAVOS (P9,075.55), payable to Alfredo Oculam, and thereafter, without informing the latter that they did not have sufficient funds deposited with the bank to cover up the amount of the check, did then and there willfully, unlawfully and feloniously pass on, indorse, give and deliver the said check to Alfredo Oculam by way of rediscounting of the aforementioned checks; however, upon presentation of the check to the drawee bank for encashment, the same was dishonored for the reason that the account of the accused with the United Coconut Planters Bank, Tagbilaran Branch, had already been closed, to the damage and prejudice of the said Alfredo Oculam in the aforestated amount.

Acts committed contrary to the provisions of Batas Pambansa Bilang 22.2

The accusatory portions of the Informations in Criminal Case Nos. 7069 and 7070 are similarly worded, except for the allegations concerning the number, date and amount of each check, that is:

(a) Criminal Case No. 7069 - UCPB Check No. 284744 dated July 22, 1990 in the amount of P12,730.00;3

(b) Criminal Case No. 7070 – UCPB Check No. 106136 dated July 22, 1990 in the amount of P8,496.55.4

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The cases were consolidated and jointly tried. When arraigned on June 26, 1991, the two accused pleaded not guilty to the crimes charged.5

The prosecution presented as its lone witness complainant Alfredo Oculam. He testified that: in 1989, spouses Adronico6 and Evangeline Ladonga became his regular customers in his pawnshop business in Tagbilaran City, Bohol;7 sometime in May 1990, the Ladonga spouses obtained a P9,075.55 loan from him, guaranteed by United Coconut Planters Bank (UCPB) Check No. 284743, post dated to dated July 7, 1990 issued by Adronico;8 sometime in the last week of April 1990 and during the first week of May 1990, the Ladonga spouses obtained an additional loan of P12,730.00, guaranteed by UCPB Check No. 284744, post dated to dated July 26, 1990 issued by Adronico;9 between May and June 1990, the Ladonga spouses obtained a third loan in the amount of P8,496.55, guaranteed by UCPB Check No. 106136, post dated to July 22, 1990 issued by Adronico;10 the three checks bounced upon presentment for the reason "CLOSED ACCOUNT";11 when the Ladonga spouses failed to redeem the check, despite repeated demands, he filed a criminal complaint against them.12

While admitting that the checks issued by Adronico bounced because there was no sufficient deposit or the account was closed, the Ladonga spouses claimed that the checks were issued only to guarantee the obligation, with an agreement that Oculam should not encash the checks when they mature;13 and, that petitioner is not a signatory of the checks and had no participation in the issuance thereof.14

On August 24, 1996, the RTC rendered a joint decision finding the Ladonga spouses guilty beyond reasonable doubt of violating B.P. Blg. 22, the dispositive portion of which reads:

Premises considered, this Court hereby renders judgment finding accused Adronico Ladonga, alias Ronie, and Evangeline Ladonga guilty beyond reasonable doubt in the aforesaid three (3) criminal cases, for which they stand charged before this Court, and accordingly, sentences them to imprisonment and fine, as follows:

1. In Criminal Case No. 7068, for (sic) an imprisonment of one (1) year for each of them, and a fine in the amount of P9,075.55, equivalent to the amount of UCPB Check No. 284743;

2. In Criminal Case No. 7069, for (sic) an imprisonment for each of them to one (1) year and a fine of P12, 730.00, equivalent to the amount of UCPB Check No. 284744; and,

3. In Criminal Case No. 7070, with (sic) an imprisonment of one year for each of them and a fine of P8,496.55 equivalent to the amount of UCPB Check No. 106136;

4. That both accused are further ordered to jointly and solidarily pay and reimburse the complainant, Mr. Alfredo Oculam, the sum of P15,000.00 representing actual expenses incurred in prosecuting the instant cases; P10,000.00 as attorney’s fee; and the amount of P30,302.10 which is the total value of the three (3) subject checks which bounced; but without subsidiary imprisonment in case of insolvency.

With Costs against the accused.

SO ORDERED.15












Adronico applied for probation which was granted.16 On the other hand, petitioner brought the case to the Court of Appeals, arguing that the RTC erred in finding her criminally liable for conspiring with her husband as the principle of conspiracy is inapplicable to B.P. Blg. 22 which is a special law; moreover, she is not a signatory of the checks and had no participation in the issuance thereof.17

On May 17, 1999, the Court of Appeals affirmed the conviction of petitioner.18 It held that the provisions of the penal code were made applicable to special penal laws in the decisions of this Court in People vs. Parel, 19 U.S. vs. Ponte, 20 and U.S. vs. Bruhez.21 It noted that Article 10 of the Revised Penal Code itself provides that its provisions shall be supplementary to special laws unless the latter provide the contrary. The Court of Appeals stressed that since B.P. Blg. 22 does not prohibit the applicability in a suppletory character of the provisions of the Revised Penal Code (RPC), the principle of conspiracy may be applied to cases involving violations of B.P. Blg. 22. Lastly, it ruled that the fact that petitioner did not make and issue or sign the checks did not exculpate her from criminal liability as it is not indispensable that a co-conspirator takes a direct part in every act and knows the part which everyone performed. The Court of Appeals underscored that in conspiracy the act of one conspirator could be held to be the act of the other.

Petitioner sought reconsideration of the decision but the Court of Appeals denied the same in a Resolution dated November 16, 1999.22

Hence, the present petition.

Petitioner presents to the Court the following issues for resolution:

1. WHETHER OR NOT THE PETITIONER WHO WAS NOT THE DRAWER OR ISSUER OF THE THREE CHECKS THAT BOUNCED BUT HER CO-ACCUSED HUSBAND UNDER THE LATTER’S ACCOUNT COULD BE HELD LIABLE FOR VIOLATIONS OF BATAS PAMBANSA BILANG 22 AS CONSPIRATOR.

2. ANCILLARY TO THE MAIN ISSUE ARE THE FOLLOWING ISSUES:

A. WHETHER OR NOT CONSPIRACY IS APPLICABLE IN VIOLATIONS OF BATAS PAMBANSA BILANG 22 BY INVOKING THE LAST SENTENCE OF ARTICLE 10 OF THE REVISED PENAL CODE WHICH STATES:

Art. 10. Offenses not subject of the provisions of this Code. – Offenses which are or in the future may be punished under special laws are not subject to the provisions of this Code. This Code shall be supplementary to such laws, unless the latter should specially provide the contrary.

B. WHETHER OR NOT THE CASES CITED BY THE HONORABLE COURT OF APPEALS IN AFFIRMING IN TOTO THE CONVICTION OF PETITIONER AS CONSPIRATOR APPLYING THE SUPPLETORY CHARACTER OF THE REVISED PENAL CODE TO SPECIAL LAWS LIKE B.P. BLG. 22 IS APPLICABLE.23

Petitioner staunchly insists that she cannot be held criminally liable for violation of B.P. Blg. 22 because she had no participation in the drawing and issuance of the three checks subject of the three criminal cases, a fact proven by the checks themselves. She contends that the Court of Appeals gravely erred in applying the principle of conspiracy, as defined under the RPC, to









violations of B.P. Blg. 22. She posits that the application of the principle of conspiracy would enlarge the scope of the statute and include situations not provided for or intended by the lawmakers, such as penalizing a person, like petitioner, who had no participation in the drawing or issuance of checks.

The Office of the Solicitor General disagrees with petitioner and echoes the declaration of the Court of Appeals that some provisions of the Revised Penal Code, especially with the addition of the second sentence in Article 10, are applicable to special laws. It submits that B.P. Blg. 22 does not provide any prohibition regarding the applicability in a suppletory character of the provisions of the Revised Penal Code to it.

Article 10 of the RPC reads as follows:

ART. 10. Offenses not subject to the provisions of this Code. – Offenses which are or in the future may be punishable under special laws are not subject to the provisions of this Code. This Code shall be supplementary to such laws, unless the latter should specially provide the contrary.

The article is composed of two clauses. The first provides that offenses which in the future are made punishable under special laws are not subject to the provisions of the RPC, while the second makes the RPC supplementary to such laws. While it seems that the two clauses are contradictory, a sensible interpretation will show that they can perfectly be reconciled.

The first clause should be understood to mean only that the special penal laws are controlling with regard to offenses therein specifically punished. Said clause only restates the elemental rule of statutory construction that special legal provisions prevail over general ones.24 Lex specialis derogant generali. In fact, the clause can be considered as a superfluity, and could have been eliminated altogether. The second clause contains the soul of the article. The main idea and purpose of the article is embodied in the provision that the "code shall be supplementary" to special laws, unless the latter should specifically provide the contrary.

The appellate court’s reliance on the cases of People vs. Parel,25 U.S. vs. Ponte,26 and U.S. vs. Bruhez27 rests on a firm basis. These cases involved the suppletory application of principles under the then Penal Code to special laws. People vs. Parel is concerned with the application of Article 2228 of the Code to violations of Act No. 3030, the Election Law, with reference to the retroactive effect of penal laws if they favor the accused. U.S. vs. Ponte involved the application of Article 1729 of the same Penal Code, with reference to the participation of principals in the commission of the crime of misappropriation of public funds as defined and penalized by Act No. 1740. U.S. vs. Bruhez covered Article 4530 of the same Code, with reference to the confiscation of the instruments used in violation of Act No. 1461, the Opium Law.

B.P. Blg. 22 does not expressly proscribe the suppletory application of the provisions of the RPC. Thus, in the absence of contrary provision in B.P. Blg. 22, the general provisions of the RPC which, by their nature, are necessarily applicable, may be applied suppletorily. Indeed, in the recent case of Yu vs. People,31 the Court applied suppletorily the provisions on subsidiary imprisonment under Article 3932 of the RPC to B.P. Blg. 22.

The suppletory application of the principle of conspiracy in this case is analogous to the application of the provision on principals under Article 17 in U.S. vs. Ponte. For once conspiracy or action in concert to achieve a criminal design is shown, the act of one is the act of all the



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conspirators, and the precise extent or modality of participation of each of them becomes secondary, since all the conspirators are principals.33

All these notwithstanding, the conviction of the petitioner must be set aside.

Article 8 of the RPC provides that "a conspiracy exists when two or more persons come to an agreement concerning the commission of a felony and decide to commit it." To be held guilty as a co-principal by reason of conspiracy, the accused must be shown to have performed an overt act in pursuance or furtherance of the complicity.34 The overt act or acts of the accused may consist of active participation in the actual commission of the crime itself or may consist of moral assistance to his co-conspirators by moving them to execute or implement the criminal plan.35

In the present case, the prosecution failed to prove that petitioner performed any overt act in furtherance of the alleged conspiracy. As testified to by the lone prosecution witness, complainant Alfredo Oculam, petitioner was merely present when her husband, Adronico, signed the check subject of Criminal Case No. 7068.36 With respect to Criminal Case Nos. 7069-7070, Oculam also did not describe the details of petitioner’s participation. He did not specify the nature of petitioner’s involvement in the commission of the crime, either by a direct act of participation, a direct inducement of her co-conspirator, or cooperating in the commission of the offense by another act without which it would not have been accomplished. Apparently, the only semblance of overt act that may be attributed to petitioner is that she was present when the first check was issued. However, this inference cannot be stretched to mean concurrence with the criminal design.

Conspiracy must be established, not by conjectures, but by positive and conclusive evidence.37 Conspiracy transcends mere companionship and mere presence at the scene of the crime does not in itself amount to conspiracy.38 Even knowledge, acquiescence in or agreement to cooperate, is not enough to constitute one as a party to a conspiracy, absent any active participation in the commission of the crime with a view to the furtherance of the common design and purpose.39

As the Court eloquently pronounced in a case of recent vintage, People vs. Mandao:40

To be sure, conspiracy is not a harmless innuendo to be taken lightly or accepted at every turn. It is a legal concept that imputes culpability under specific circumstances; as such, it must be established as clearly as any element of the crime. Evidence to prove it must be positive and convincing, considering that it is a convenient and simplistic device by which the accused may be ensnared and kept within the penal fold.

Criminal liability cannot be based on a general allegation of conspiracy, and a judgment of conviction must always be founded on the strength of the prosecution’s evidence. The Court ruled thus in People v. Legaspi, from which we quote:

At most, the prosecution, realizing the weakness of its evidence against accused-appellant Franco, merely relied and pegged the latter’s criminal liability on its sweeping theory of conspiracy, which to us, was not attendant in the commission of the crime.

The rule is firmly entrenched that a judgment of conviction must be predicated on the strength of the evidence for the prosecution and not on the weakness of the evidence for the defense. The proof against him must survive the test of reason; the strongest suspicion must not be permitted

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to sway judgment. The conscience must be satisfied that on the defense could be laid the responsibility for the offense charged; that not only did he perpetrate the act but that it amounted to a crime. What is required then is moral certainty.

Verily, it is the role of the prosecution to prove the guilt of the appellant beyond reasonable doubt in order to overcome the constitutional presumption of innocence.

In sum, conviction must rest on hard evidence showing that the accused is guilty beyond reasonable doubt of the crime charged. In criminal cases, moral certainty -- not mere possibility -- determines the guilt or the innocence of the accused. Even when the evidence for the defense is weak, the accused must be acquitted when the prosecution has not proven guilt with the requisite quantum of proof required in all criminal cases. (Citations omitted)41

All told, the prosecution failed to establish the guilt of the petitioner with moral certainty. Its evidence falls short of the quantum of proof required for conviction. Accordingly, the constitutional presumption of the petitioner’s innocence must be upheld and she must be acquitted.1a\^/phi1.net

WHEREFORE, the instant petition is GRANTED. The assailed Decision, dated May 17, 1999, of the Court of Appeals in CA-G.R. CR No. 20443 affirming the Decision, dated August 24, 1996, of the Regional Trial Court (Branch 3), Bohol, in Criminal Case Nos. 7068, 7069 and 7070 convicting the petitioner of violation of B.P. Blg. 22 is hereby REVERSED and SET ASIDE. Petitioner Evangeline Ladonga is ACQUITTED of the charges against her under B.P. Blg. 22 for failure of the prosecution to prove her guilt beyond reasonable doubt. No pronouncement as to costs.

SO ORDERED.

EDUARDO R. VACA and FERNANDO NIETO,petitioners, vs. COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.

D E C I S I O N

MENDOZA, J.:

Petitioners seek a review of the decision, dated October 25, 1996, [1] and the resolution, dated December 2, 1997,[2] of the Court of Appeals, affirming their conviction by the Regional Trial Court of Quezon City (Branch 100) for violation of B.P. Blg. 22, otherwise known as the “Bouncing Checks Law.”

The facts are as follows:

Petitioner Eduardo R. Vaca is the president and owner of Ervine International, Inc. (Ervine), which is engaged in the manufacture and sale of refrigeration equipment, while his son-in-law, petitioner Fernando Nieto, is the firm’s purchasing manager. On March 10, 1988, petitioners issued a check for P10,000.00 to the General Agency for Reconnaissance, Detection, and Security, Inc. (GARDS) in partial payment of the security services rendered by GARDS to Ervine. The check was drawn on the China Banking Corporation (CBC). When deposited in the Philippine Commercial International Bank (PCIBank) branch at Shaw Boulevard, Mandaluyong, the check was dishonored for insufficiency of funds.

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On March 29, 1988, GARDS wrote Ervine a letter in which it demanded payment in cash of the amount of the check within seven days from notice. The letter was received by Ervine on the same day, but petitioners did not pay within the time given.

On April 13, 1988, petitioners issued a check for P19,860.16 to GARDS. The check was drawn on the Associated Bank. The voucher accompanying it stated that the check was to replace the dishonored check, the P9,860.16 balance being partial payment for Ervine’s outstanding account. The check and the voucher were received by a GARDS messenger, Nolan C. Pena, on April 15, 1988, but GARDS did not return the dishonored check.

On April 14, 1988, GARDS Operations Manager Jovito C. Cabusara filed a criminal complaint against petitioners for violation of B.P. Blg. 22. After preliminary investigation, an information was filed in the Regional Trial Court of Quezon City (Branch 97). However, the case was dismissed by the court on May 11, 1989, upon motion of the prosecution, on the ground that Ervine had already paid the amount of the check.

On September 18, 1989, GARDS, through its Acting Operations Manager Eduardo B. Alindaya, filed another complaint for violation of B.P. Blg. 22 against petitioners. This resulted in the filing of an information against petitioners in the Regional Trial Court of Quezon City (Branch 100). After trial, petitioners were found guilty of the charge and each was sentenced to suffer one (1) year imprisonment and to pay a fine of P10,000.00 and the costs.

On appeal, the Court of Appeals affirmed the decision. It subsequently denied petitioners’ motion for reconsideration. Hence, this petition. Petitioners contend:

A. Respondent Court gravely erred in not holding that the prosecution failed to prove petitioners’ guilt beyond reasonable doubt.

B. Respondent Court gravely erred in basing conviction on the alleged weakness of the evidence of the defense rather than on the strength of the evidence of the prosecution.

C. Respondent Court erred in not acquitting petitioners on grounds of “mistake of fact” and “lack of knowledge.”

Petitioners pray that the case against them be dismissed or, in the alternative, that the decision of the trial court be modified by sentencing each to an increased fine but without imprisonment.

By supplemental petition, dated January 29, 1998, petitioners submitted an affidavit of desistance executed by GARDS president Dominador R. Santiago which states that the case arose from a mere “accounting difference” between petitioners and GARDS, that the latter had not really suffered any damage as a result of the issuance of the check in question and, that GARDS was no longer interested in prosecuting the case.

On May 28, 1998, petitioners filed another supplemental petition, this time invoking the recent decision in Lao v. Court of Appeals,[3] in which this Court reversed a conviction for violation of B.P. Blg. 22 upon a showing that the accused had no knowledge of the insufficiency of funds.

The Solicitor General opposes the appeal. He contends that the facts of Lao v. Court of Appeals are different from those of the case at bar and that the affidavit of desistance of Dominador Santiago is of no moment, such affidavit having been made only after petitioners’ conviction.


After due review of the decision in this case, we find that petitioners’ conviction for violation of B.P. Blg. 22 is well founded.

First. The elements of the offense penalized under B.P. Blg. 22 are: (1) making, drawing, and issuance of any check to apply to 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.[4] The maker’s knowledge is presumed from the dishonor of the check for insufficiency of funds.[5] Thus, §2 of B.P. Blg. 22 expressly provides:

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

In this case, after being notified on March 29, 1988 of the dishonor of their previous check, petitioners gave GARDS a check forP19,860.16. They claim that this check had been intended by them to replace the bad check they had previously issued to the GARDS. Based on the testimony of a GARDS accountant, however, the Court of Appeals found that the check was actually payment for two bills, one for the period of January 16 to January 31, 1988 in the amount ofP9,930.08 and another one for the period of March 16 to March 31, 1988 in the same amount. But even if such check was intended to replace the bad one, its issuance on April 13, 1988 ¾ 15 days after petitioners had been notified on March 29, 1988 of the dishonor of their previous check ¾ cannot negate the presumption that petitioners knew of the insufficiency of funds to cover the amount of their previous check. Sec. 2 of B.P. Blg. 22 requires that such check be given within five (5) days from the notice of dishonor to them.

Petitioners contend that, in accordance with the ruling in Lao v. Court of Appeals,[6] they should be acquitted because the preparation of checks is the responsibility of the company accountant and all they do is sign the checks. They claim that they rely on the word of the accountant that there are sufficient funds in the bank to pay for the checks.

In the Lao case, the accused, as the Court found, had merely been made by her employer, Premiere Investment House, to countersign checks in blank. The accused was a mere employee who did not have anything to do with the issuance of checks for the company. She did not know to whom the checks would be paid as the names of payees were written only later by the head of operations. Moreover, no notice of dishonor was given to her as required by B.P. Blg. 22, §2. It could thus rightly be concluded that the accused issued checks to apply to account not knowing that at the time of issuance funds were insufficient to pay for the checks.

Petitioners in this case cannot pretend ignorance of the insufficiency of funds. While it may be true that it was the company’s accountant who actually prepared the rubber check, the fact remains that petitioners are the owners and officers of the company. Sec. 1 of B.P. Blg. 22 provides that “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.”




In fact, petitioner Nieto testified that after the check in question was dishonored, he instructed their company accountant to prepare a replacement check.[7] This belies petitioners’ claim that they had no hand in the preparation of checks[8] and shows that petitioners were in control of the finances of the company.

Second. The affidavit of desistance of the GARDS president deserves no more than passing mention. The claim that this case was simply the result of a misunderstanding between GARDS and petitioners and that the former did not really suffer any damage from the dishonor of the check is flimsy. After prosecuting the case below with tenacity, complainants going so far as to file another complaint after their first one had been dismissed, it is trifling with this Court for complainants to now assert that the filing of their case was simply a mistake. It is for reasons such as this that affidavits of desistance, like retractions, are generally disfavored.[9] The affidavit in this case, which was made after petitioners’ conviction, is nothing but a last-minute attempt to save them from punishment. Even if the payee suffered no damage as a result of the issuance of the bouncing check, the damage to the integrity of the banking system cannot be denied. Damage to the payee is not an element of the crime punished in B.P. Blg. 22.

Third. Petitioners pray that, in the alternative, the penalty be modified by deleting the sentence of imprisonment and, in lieu thereof, a fine in an increased amount be imposed on them. In support of their plea, they allege that they do not have any record of prior conviction; that Eduardo Vaca is of advanced age (late 60s); and, that they come from good families. Petitioners claim that “with their family background and social standing there is no reason why they will refuse to pay a due and demandable debt of only P10,000.00. It is precisely because of their founded belief that the subject obligation has been paid that they refused to be intimidated by a criminal charge.”

The Court of Appeals dismissed these allegations as irrelevant to the question of petitioners’ guilt. We think so ourselves. However, we believe that they can be considered in determining the appropriate penalty to impose on petitioners.

B.P. Blg. 22, §1, par. 1 provides a penalty of “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.” Petitioners are first-time offenders. They are Filipino entrepreneurs who presumably contribute to the national economy. Apparently, they brought this appeal, believing in all good faith, although mistakenly, that they had not committed a violation of B.P. Blg. 22. Otherwise, they could simply have accepted the judgment of the trial court and applied for probation to evade a prison term. It would best serve the ends of criminal justice if in fixing the penalty within the range of discretion allowed by §1, par. 1, the same philosophy underlying the Indeterminate Sentence Law is observed, namely, 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.[10] In this case we believe that a fine in an amount equal to double the amount of the check involved is an appropriate penalty to impose on each of the petitioners.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the modification that the sentence of imprisonment is deleted and petitioners are each ordered to pay a fine of P20,000.00 equivalent to double the amount of the check.

SO ORDERED.

SUSAN GO and the PEOPLE OF THE PHILIPPINES,petitioners, vs. FERNANDO L. DIMAGIBA,respondent.





D E C I S I O N

PANGANIBAN, J.:

Administrative Circular 12-2000, as clarified by Administrative Circular 13-2001, merely establishes a rule of preference in imposing penalties for violations of Batas Pambansa Blg. 22 (BP 22), the “Bouncing Checks Law.” When the circumstances of both the offense and the offender indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone -- instead of imprisonment -- is the preferred penalty. As the Circular requires a review of the factual circumstances of a given case, it applies only to pending or future litigations. It is not a penal law; hence, it does not have retroactive effect. Neither may it be used to modify final judgments of conviction.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the October 10, 2001[2] and the October 11, 2001[3] Orders of the Regional Trial Court (RTC) (Branch 5), Baguio City.[4] The October 10, 2001 Order released Respondent Fernando L. Dimagiba from confinement and required him to pay a fine of P100,000 in lieu of imprisonment. The October 11, 2001 Order disposed as follows:

“WHEREFORE, [in] applying the doctrine as held in the above-entitled cases in this case, the instant petition for Habeas Corpus should be, as it is hereby, GRANTED. The Baguio City Jail Warden is hereby ordered to IMMEDIATELY RELEASE the petitioner from confinement unless he is being held for some other lawful cause other than by virtue of the Sentence Mittimus dated September 28, 2001 issued by CESAR S. VIDUYA, Clerk of Court, MTC 4, Baguio City. Further, the petitioner is required to pay a fine in the amount ofP100,000.00 in lieu of his imprisonment, in addition to the civil aspect of the Joint Judgment rendered by MTC 4 dated July 16, 1999.”[5]

The Facts

The pertinent facts are not disputed. Respondent Fernando L. Dimagiba issued to Petitioner Susan Go thirteen (13) checks which, when presented to the drawee bank for encashment or payment on the due dates, were dishonored for the reason “account closed.”[6] Dimagiba was subsequently prosecuted for 13 counts of violation of BP 22 [7] under separate Complaints filed with the Municipal Trial Court in Cities (MTCC) in Baguio City. [8] After a joint trial, the MTCC (Branch 4) rendered a Decision on July 16, 1999, convicting the accused in the 13 cases. The dispositive portion reads as follows:

“WHEREFORE, in view of the foregoing disquisition, this Court finds the evidence of the prosecution to have established the guilt of the accused beyond reasonable doubt of the offenses charged and imposes upon the accused the penalty of 3 months imprisonment for each count (13 counts) and to indemnify the offended party the amount of One Million Two Hundred Ninety Five Thousand Pesos (P1,295,000.00) with legal interest per annum commencing from 1996 after the checks were dishonored by reason ‘ACCOUNT CLOSED’ on December 13, 1995, to pay attorney’s fees of P15,000.00 and to pay the costs.”[9]

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The appeal of Dimagiba was raffled to Branch 4 of the RTC in Baguio City. [10] On May 23, 2000, the RTC denied the appeal and sustained his conviction. [11] There being no further appeal to the Court of Appeals (CA), the RTC issued on February 1, 2001, a Certificate of Finality of the Decision.[12]

Thus, on February 14, 2001, the MTCC issued an Order directing the arrest of Dimagiba for the service of his sentence as a result of his conviction. The trial court also issued a Writ of Execution to enforce his civil liability.[13]

On February 27, 2001, Dimagiba filed a Motion for Reconsideration of the MTCC Order. He prayed for the recall of the Order of Arrest and the modification of the final Decision, arguing that the penalty of fine only, instead of imprisonment also, should have been imposed on him.[14] The arguments raised in that Motion were reiterated in a Motion for the Partial Quashal of the Writ of Execution filed on February 28, 2001.[15]

In an Order dated August 22, 2001, the MTCC denied the Motion for Reconsideration and directed the issuance of a Warrant of Arrest against Dimagiba.[16] On September 28, 2001, he was arrested and imprisoned for the service of his sentence.

On October 9, 2001, he filed with the RTC of Baguio City a Petition [17] for a writ of habeas corpus. The case was raffled to Branch 5, which scheduled the hearing for October 10, 2001. Copies of the Order were served on respondent’s counsels and the city warden.[18]

Ruling of the Regional Trial Court

Right after hearing the case on October 10, 2001, the RTC issued an Order directing the immediate release of Dimagiba from confinement and requiring him to pay a fine of P100,000 in lieu of imprisonment. However, the civil aspect of the July 16, 1999 MTCC Decision was not touched upon.[19] A subsequent Order, explaining in greater detail the basis of the grant of the writ of habeas corpus, was issued on October 11, 2001.[20]

In justifying its modification of the MTCC Decision, the RTC invoked Vaca v. Court of Appeals[21] and Supreme Court Administrative Circular (SC-AC) No. 12-2000,[22] which allegedly required the imposition of a fine only instead of imprisonment also for BP 22 violations, if the accused was not a recidivist or a habitual delinquent. The RTC held that this rule should be retroactively applied in favor of Dimagiba.[23] It further noted that (1) he was a first-time offender and an employer of at least 200 workers who would be displaced as a result of his imprisonment; and (2) the civil liability had already been satisfied through the levy of his properties.[24]

On October 22, 2001, Petitioner Go filed a Motion for Reconsideration of the RTC Orders dated October 10 and 11, 2001.[25] That Motion was denied on January 18, 2002.[26]

Hence, this Petition filed directly with this Court on pure questions of law.[27]

The Issues

Petitioner raises the following issues for this Court’s consideration:



















“1. [The RTC] Judge was utterly devoid of jurisdiction in amending a final and conclusive decision of the Municipal Trial Court, Branch 4, dated July 16, 1999, in nullifying the Sentence Mittimus, dated September 28, 2001, issued by x x x [the] Municipal Trial Court, Branch 4, Baguio City, and in ordering the release of [Dimagiba] from confinement in jail for the service of his sentence under the said final and conclusive judgment;

“2. Assuming only for the sake of argument that habeas corpus is the proper remedy, the Petition for Habeas Corpus is utterly devoid of merit as [Dimagiba was] not entitled to the beneficent policy enunciated in the Eduardo Vaca and Rosa Lim cases and reiterated in the Supreme Court Circular No. 12-2000; x x x

“3. Granting for the sake of argument that [Dimagiba was] entitled to the beneficent policy enunciated in the Eduardo Vaca and Rosa Limcases and reiterated in the Supreme Court Circular No. 12-2000, the minimum fine that should be imposed on [Dimagiba] is one million and two hundred ninety five thousand pesos (P1,295,000.00) up to double the said amount or (P2,590,000), not just the measly amount ofP100,000; and

“4. [The RTC] judge committed grave abuse of discretion amounting to lack or excess of jurisdiction in hearing and deciding [Dimagiba’s] Petition for Habeas Corpus without notice and without affording procedural due process to the People of the Philippines through the Office of [the] City Prosecutor of Baguio City or the Office of the Solicitor General.”[28]

In the main, the case revolves around the question of whether the Petition for habeas corpus was validly granted. Hence, the Court will discuss the four issues as they intertwine with this main question.[29]

The Court’s Ruling

The Petition is meritorious.

Main Issue:Propriety of the

Writ of Habeas Corpus

The writ of habeas corpus applies to all cases of illegal confinement or detention in which individuals are deprived of liberty.[30] It was devised as a speedy and effectual remedy to relieve persons from unlawful restraint; or, more specifically, to obtain immediate relief for those who may have been illegally confined or imprisoned without sufficient cause and thus deliver them from unlawful custody.[31] It is therefore a writ of inquiry intended to test the circumstances under which a person is detained.[32]

The writ may not be availed of when the person in custody is under a judicial process or by virtue of a valid judgment.[33]However, as a post-conviction remedy, it may be allowed when, as a consequence of a judicial proceeding, any of the following exceptional circumstances is attendant: (1) there has been a deprivation of a constitutional right resulting in the restraint of a person; (2) the court had no jurisdiction to impose the sentence; or (3) the imposed penalty has been excessive, thus voiding the sentence as to such excess.[34]








In the present case, the Petition for a writ of habeas corpus was anchored on the ruling in Vaca and on SC-AC No. 12-2000, which allegedly prescribed the imposition of a fine, not imprisonment, for convictions under BP 22. Respondent sought the retroactive effect of those rulings, thereby effectively challenging the penalty imposed on him for being excessive. From his allegations, the Petition appeared sufficient in form to support the issuance of the writ.

However, it appears that respondent has previously sought the modification of his sentence in a Motion for Reconsideration[35] of the MTCC’s Execution Order and in a Motion for the Partial Quashal of the Writ of Execution.[36] Both were denied by the MTCC on the ground that it had no power or authority to amend a judgment issued by the RTC.

In his Petition for habeas corpus, respondent raised the same arguments that he had invoked in the said Motions. We believe that his resort to this extraordinary remedy was a procedural infirmity. The remedy should have been an appeal of the MTCC Order denying his Motions, in which he should have prayed that the execution of the judgment be stayed. But he effectively misused the action he had chosen, obviously with the intent of finding a favorable court. His Petition for a writ of habeas corpus was clearly an attempt to reopen a case that had already become final and executory. Such an action deplorably amounted to forum shopping. Respondent should have resorted to the proper, available remedy instead of instituting a different action in another forum.

The Court also finds his arguments for his release insubstantial to support the issuance of the writ of habeas corpus.

Preference in theApplication of Penaltiesfor Violation of BP 22

The following alternative penalties are imposable under BP 22: (1) imprisonment of not less than 30 days, but not more than one year; (2) a fine of not less or more than double the amount of the check, a fine that shall in no case exceedP200,000; or (3) both such fine and imprisonment, at the discretion of the court.[37]

SC-AC No. 12-2000, as clarified by SC-AC No. 13-2001,[38] established a rule of preference in imposing the above penalties.[39] When the circumstances of the case clearly indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone may be considered as the preferred penalty.[40] The determination of the circumstances that warrant the imposition of a fine rests upon the trial judge only. [41] Should the judge deem that imprisonment is appropriate, such penalty may be imposed.[42]

SC-AC No. 12-2000 did not delete the alternative penalty of imprisonment. The competence to amend the law belongs to the legislature, not to this Court.[43]

Inapplicability ofSC-AC No. 12-2000

Petitioners argue that respondent is not entitled to the benevolent policy enunciated in SC-AC No. 12-2000, because he is not a “first time offender.” [44] This circumstance is, however, not the sole factor in determining whether he deserves the preferred penalty of fine alone. The











penalty to be imposed depends on the peculiar circumstances of each case.[45] It is the trial court’s discretion to impose any penalty within the confines of the law. SC-AC No. 13-2001 explains thus:

“x x x. Administrative Circular No. 12-2000 establishes a rule of preference in the application of the penal provisions of BP 22 such that where the circumstances of both the offense and the offender clearly indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone should be considered as the more appropriate penalty. Needless to say, the determination of whether the circumstances warrant the imposition of a fine alone rests solely upon the Judge. x x x.

It is, therefore, understood that:

x x x x x x x x x

“2. The Judges concerned, may in the exercise of sound discretion, and taking into consideration the peculiar circumstances of each case, determine whether the imposition of a fine alone would best serve the interests of justice, or whether forbearing to impose imprisonment would depreciate the seriousness of the offense, work violence on the social order, or otherwise be contrary to the imperatives of justice;”

The Court notes that the Petition for a writ of habeas corpus relied mainly on the alleged retroactivity of SC-AC No. 12-2000, which supposedly favored BP 22 offenders.[46] On this point, Dimagiba contended that his imprisonment was violative of his right to equal protection of the laws, since only a fine would be imposed on others similarly situated.[47]

The rule on retroactivity states that criminal laws may be applied retroactively if favorable to the accused. This principle, embodied in the Revised Penal Code,[48] has been expanded in certain instances to cover special laws.[49]

The issue of retroactivity of SC-AC No. 12-2000 was settled in De Joya v. Jail Warden of Batangas City,[50] which we quote:

“Petitioner's reliance of our ruling in Ordoñez v. Vinarao that a convicted person is entitled to benefit from the reduction of penalty introduced by the new law, citing People v. Simon, is misplaced. Thus, her plea that as provided for in Article 22 of the Revised Penal Code, SC Admin. Circular No. 12-2000 as modified by SC Admin. Circular No. 13-2001 should benefit her has no basis.

“First. SC Admin. Circular No. 12-2000 is not a penal law; hence, Article 22 of the Revised Penal Code is not applicable. The circular applies only to those cases pending as of the date of its effectivity and not to cases already terminated by final judgment.

“Second. As explained by the Court in SC Admin. Circular No. 13-2001, SC Admin. Circular No. 12-2000 merely lays down a rule of preference in the application of the penalties for violation of B.P. Blg. 22. It does not amend B.P. Blg. 22, nor defeat the legislative intent behind the law. SC Admin. Circular No. 12-2000 merely urges the courts to take into account not only the purpose of the law but also the circumstances of the accused -- whether he acted in good faith or on a clear mistake of fact without taint of negligence -- and such other circumstance which the trial court or the appellate court believes relevant to the penalty to be imposed.”[51]

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Because the Circular merely lays down a rule of preference, it serves only as a guideline for the trial courts. Thus, it is addressed to the judges, who are directed to consider the factual circumstances of each case prior to imposing the appropriate penalty. In other words, the Administrative Circular does not confer any new right in favor of the accused, much less those convicted by final judgment.

The competence to determine the proper penalty belongs to the court rendering the decision against the accused.[52] That decision is subject only to appeal on grounds of errors of fact or law, or grave abuse of discretion amounting to lack or excess of jurisdiction. Another trial court may not encroach upon this authority. Indeed, SC-AC No. 12-2000 necessarily requires a review of all factual circumstances of each case. Such a review can no longer be done if the judgment has become final and executory.

In the present case, the MTCC of Baguio City had full knowledge of all relevant circumstances from which respondent’s conviction and sentence were based. The penalty imposed was well within the confines of the law. Upon appeal, the conviction was sustained by RTC-Branch 4 of Baguio City. Eventually, the Decision attained finality. Hence, RTC-Branch 5 did not have the jurisdiction to modify the lawful judgment in the guise of granting a writ of habeas corpus.

The doctrine of equal protection of laws[53] does not apply for the same reasons as those on retroactivity. Foremost of these reasons is that the Circular is not a law that deletes the penalty of imprisonment. As explained earlier, it is merely a rule of preference as to which penalty should be imposed under the peculiar circumstances of a case. At any rate, this matter deserves scant consideration, because respondent failed to raise any substantial argument to support his contention.[54]

Modification of FinalJudgment Not Warranted

The Court is not unmindful of So v. Court of Appeals,[55] in which the final judgment of conviction for violation of BP 22 was modified by the deletion of the sentence of imprisonment and the imposition of a fine. That case proceeded from an “Urgent Manifestation of an Extraordinary Supervening Event,”[56] not from an unmeritorious petition for a writ of habeas corpus, as in the present case. The Court exercised in that case its authority to suspend or to modify the execution of a final judgment when warranted or made imperative by the higher interest of justice or by supervening events.[57] The supervening event in that case was the petitioner’s urgent need for coronary rehabilitation for at least one year under the direct supervision of a coronary care therapist; imprisonment would have been equivalent to a death sentence.[58]

The peculiar circumstances of So do not obtain in the present case. Respondent’s supposed “unhealthy physical condition due to a triple by-pass operation, and aggravated by hypertension,” cited by the RTC in its October 10, 2001 Order, [59] is totally bereft of substantial proof. The Court notes that respondent did not make any such allegation in his Petition for habeas corpus. Neither did he mention his physical state in his Memorandum and Comment submitted to this Court.

Respondent seeks the retroactive application of SC-AC No. 12-2000 in his favor on the basis alone of the alleged settlement of his civil liability.[60] Citing Griffith v. Court of Appeals,










[61] he theorizes that answering for a criminal offense is no longer justified after the settlement of the debt.

Respondent, however, misreads Griffith. The Court held in that case that convicting the accused who, two years prior to the filing of the BP 22 cases, had already paid his debt (from which the checks originated) was contrary to the basic principles of fairness and justice.[62] Obviously, that situation is not attendant here.

The civil liability in the present case was satisfied through the levy and sale of the properties of respondent only after the criminal case had been terminated with his conviction.[63]Apparently, he had sufficient properties that could have been used to settle his liabilities prior to his conviction. Indeed, such an early settlement would have been an indication that he was in good faith, a circumstance that could have been favorably considered in determining his appropriate penalty.

At any rate, civil liability differs from criminal liability.[64]What is punished in the latter is not the failure to pay the obligation, but the issuance of checks that subsequently bounced or were dishonored for insufficiency or lack of funds.[65] The Court reiterates the reasons why the issuance of worthless checks is criminalized:

“The practice is prohibited by law because of its deleterious effects on public interest. The effects of the increase of worthless checks transcend the private interest of the parties directly involved in the transaction and touches the interest of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation multiplied a thousand-fold can very well pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest. The law punishes the act not as an offense against property but an offense against public order.”[66]

WHEREFORE, the Petition is GRANTED and the assailed Orders NULLIFIED. Respondent’s Petition for habeas corpus is hereby DENIED. Let this case be REMANDED to MTCC of Baguio City for the re-arrest of respondent and the completion of his sentence.

No pronouncement as to costs.

SO ORDERED.

NORMA DE JOYA, petitioner, vs. THE JAIL WARDEN OF BATANGAS CITY AND HON. RUBEN A. GALVEZ AS PRESIDING JUDGE OF BATANGAS CITY MUNICIPAL TRIAL COURT IN CITIES, BRANCH I, respondents.

D E C I S I O N

CALLEJO, SR., J.:

This is a petition for a writ of habeas corpus filed by Norma de Joya praying for her release from the Batangas City Jail on the claim that her detention was illegal.

The Antecedents







The petitioner was charged separately with violations of Batas Pambansa Blg. 22 before the Municipal Trial Court In Cities in Batangas City. The docket numbers and accusatory portion of each of the Informations reads:

Criminal Case No. 25484

That on or about September 28, 1994 at Batangas City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, well-knowing that she does not have funds in or credit with the Solid Bank, Batangas Branch, Batangas City, did then and there, wilfully, unlawfully and feloniously draw, make and issue to Flor Catapang de Tenorio, Solid Bank Check No. 040297 postdated to October 28, 1994 in the amount of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency, to apply on account or for value, but when said check was presented for full payment with the drawee bank within a period of ninety (90) days from the date of the check, the same was dishonored by the drawee bank on the ground ‘account closed,’ which in effect is even more than a dishonor for insufficiency of funds, and despite notice of dishonor and demands made upon her to make good her check by making proper arrangement with the drawee bank or pay her obligation in full directly to Flor Catapang de Tenorio, accused failed and refused to do so, which acts constitute a clear violation of the aforecited law, to the damage and prejudice of transaction in commercial documents in general and of Flor Catapang de Tenorio in particular in the aforementioned amount.

CONTRARY TO LAW.[1]

…

Criminal Case No. 25773

That on or about October 17, 1994 at Batangas City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, well-knowing that she does not have fund in or credit with the Security Bank and Trust Company, Batangas Branch, Batangas City, did then and there, wilfully, unlawfully and feloniously draw, make and issue to Resurreccion T. Castillo, Security Bank and Trust Company Check No. 038111 postdated to October 24, 1994 in the amount of TWO HUNDRED TWENTY-FIVE THOUSAND PESOS (P225,000.00), Philippine Currency, to apply on account or for value, but when said check was presented for full payment with the drawee bank within a period of ninety (90) days from the date of the check, the same was dishonored by the drawee bank on the ground of ‘account closed,’ which in effect is even more than a dishonor for insufficiency of funds, and despite notice of dishonor and demands made upon her to make good her check by making proper arrangement with the drawee bank or pay her obligation in full directly to Resurreccion T. Castillo, accused failed and refused to do so, which acts constitute a clear violation of the aforecited law, to the damage and prejudice of transaction in commercial documents in general and of Resurreccion T. Castillo in particular in the aforementioned amount.

CONTRARY TO LAW.[2]

When arraigned in both cases, the petitioner, assisted by counsel, pleaded not guilty. While trial was going on, the petitioner jumped bail. No evidence was thereby adduced in her defense in any of the two cases.

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On December 14, 1995, the trial court promulgated its decision in Criminal Case No. 25484. The petitioner and her counsel failed to appear despite due notice. The decretal portion of the decision reads as follows:

WHEREFORE, this Court finds the accused Norma de Joya guilty of the crime of Violation of Batas Pambansa Blg. 22, and hereby sentences said accused to suffer an imprisonment of one (1) year and to indemnify the offended party, Flor Catapang Tenorio, in the sum of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, Philippine Currency.

SO ORDERED.[3]

On March 21, 1997, the decision in Criminal Case No. 25773 was likewise promulgated in absentia. The decretal portion of the said decision reads:

WHEREFORE, the Prosecution having satisfactorily established the guilt of the accused beyond reasonable doubt, this Court hereby sentences herein-accused Norma de Joya of imprisonment of ONE (1) YEAR and to pay complainant Resurreccion Castillo of the amount of TWO HUNDRED TWENTY-FIVE THOUSAND (P225,000.00) PESOS by way of damages.

SO ORDERED.[4]

The petitioner remained at large and no appeal was filed from any of the said decisions. In the meantime, the Court issued Supreme Court Administrative Circular No. 12-2000 on November 21, 2000 enjoining all courts and judges concerned to take notice of the ruling and policy of the Court enunciated inVaca v. Court of Appeals [5] and Lim v. People [6] with regard to the imposition of the penalty for violations of B.P. Blg. 22.

After five years, the petitioner was finally arrested while she was applying for an NBI clearance. She was forthwith detained at the Batangas City Jail on December 3, 2002. On July 28, 2003, the petitioner filed an urgent motion with the Municipal Trial Court of Batangas City asking the court to apply SC Admin. Circular No. 12-2000 retroactively pursuant to Article 22 of the Revised Penal Code and to order her release from detention. The public prosecutor opposed the motion. In an Order dated August 15, 2003, the trial court denied the motion on three grounds: (a) its decision convicting the petitioner of violation of B.P. Blg. 22 had long become final and executory; hence, could no longer be amended to change the penalty imposed therein; (b) the SC Circular should be applied prospectively; and (c) the SC Circular did not amend B.P. Blg. 22, a substantive law, but merely encourages trial court judges to have a uniform imposition of fine.

Hence, the petition at bar.

The petitioner posits that SC Admin. Circular No. 12-2000 deleted the penalty of imprisonment for violation of B.P. Blg. 22 and allows only the imposition of a fine. The trial court was mandated to apply SC Admin. Circular No. 12-2000 retroactively conformably with Article 22 of the Revised Penal Code citing the ruling of this Court in United States v. Pacrose.[7] The petitioner prays that the Court declare her detention illegal and order her release from the Batangas City Jail.

The Office of the Solicitor General (OSG) opposed the petition contending that:

1) THE TWO (2) JUDGMENTS OF CONVICTION AGAINST THE PETITIONER HAD LONG ATTAINED FINALITY AND COULD NO LONGER BE MODIFIED.

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2) ADMINISTRATIVE CIRCULAR NO. 12-2000 AS MODIFIED BY ADMINISTRATIVE CIRCULAR NO. 13-2001 DID NOT DELETE THE PENALTY OF IMPRISONMENT IN BP 22 CASES.[8]

The OSG cited the ruling of this Court in Abarquez v. Court of Appeals.[9]

The petition has no merit.

Section 4, Rule 102 of the Rules of Court, as amended, provides that the writ of habeas corpus is not allowed if the person alleged to be restrained of his liberty is in the custody of an officer under process issued by a court or judge or by virtue of a judgment or order of a court of record:

Sec. 4. When writ not allowed or discharged authorized. – If it appears that the person alleged to be restrained of his liberty is in the custody of an officer under process issued by a court or judge or by virtue of a judgment or order of a court of record, and that the court or judge had jurisdiction to issue the process, render the judgment; or make the order, the writ shall not be allowed; or if the jurisdiction appears after the writ is allowed, the person shall not be discharged by reason of any informality or defect in the process, judgment, or order. Nor shall anything in this rule be held to authorize the discharge of a person charged with or convicted of an offense in the Philippines, or of a person suffering imprisonment under lawful judgment.

In this case, the petitioner was arrested and detained pursuant to the final judgment of the Municipal Trial Court of Batangas City, convicting her of violation of B.P. Blg. 22. Irrefragably then, the petitioner is not entitled to a writ of habeas corpus. Petitioner’s reliance of our ruling in Ordonez v. Vinarao[10] that a convicted person is entitled to benefit from the reduction of penalty introduced by the new law, citingPeople v. Simon,[11] is misplaced. Thus, her plea that as provided for in Article 22 of the Revised Penal Code, SC Admin. Circular No. 12-2000 as modified by SC Admin. Circular No. 13-2001 should benefit her has no basis.

First. SC Admin. Circular No. 12-2000 is not a penal law; hence, Article 22 of the Revised Penal Code is not applicable. The circular applies only to those cases pending as of the date of its effectivity and not to cases already terminated by final judgment.

Second. As explained by the Court in SC Admin. Circular No. 13-2001, SC Admin. Circular No. 12-2000 merely lays down a rule of preference in the application of the penalties for violation of B.P. Blg. 22. It does not amend B.P. Blg. 22, nor defeat the legislative intent behind the law. SC Admin. Circular No. 12-2000 merely urges the courts to take into account not only the purpose of the law but also the circumstances of the accused – whether he acted in good faith or on a clear mistake of fact without taint of negligence – and such other circumstance which the trial court or the appellate court believes relevant to the penalty to be imposed. The Court thus emphasized that:

The clear tenor and intention of Administrative Circular No. 12-2000 is not to remove imprisonment as an alternative penalty, but to lay down a rule of preference in the application of the penalties provided for in B.P. Blg. 22.

The pursuit of this purpose clearly does not foreclose the possibility of imprisonment for violators of B.P. Blg. 22. Neither does it defeat the legislative intent behind the law.

Thus, Administrative Circular No. 12-2000 establishes a rule of preference in the application of the penal provisions of B.P. Blg. 22 such that where the circumstances of both the offense and

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the offender clearly indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone should be considered as the more appropriate 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 be deemed a hindrance.

It is, therefore, understood that:

1. Administrative Circular No. 12-2000 does not remove imprisonment as an alternative penalty for violations of B.P. Blg. 22;

2. The Judges concerned may, in the exercise of sound discretion, and taking into consideration the peculiar circumstances of each case, determine whether the imposition of a fine alone would best serve the interests of justice or whether forbearing to impose imprisonment would depreciate the seriousness of the offense, work violence on the social order, or otherwise be contrary to the imperatives of justice;

3. Should only a fine be imposed and the accused be unable to pay the fine, there is no legal obstacle to the application of the Revised Penal Code provisions on subsidiary imprisonment.[12]

B.P. Blg. 22 provides for alternative penalties of fine or imprisonment or both fine and imprisonment as follows:

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.[13]

The courts are given the discretion to choose whether to impose a single penalty or conjunctive penalties; that is, whether to impose a penalty of fine, or a penalty of imprisonment only, or a penalty of both fine and imprisonment.

In providing for alternative penalties in B.P. Blg. 22, Congress took into account the principal objectives of the law, namely, the prohibition on the making of worthless checks and putting them in circulation. The practice is prohibited by law because of its deleterious effects on public interest. The effects of the increase of worthless checks transcend the private interest of the parties directly involved in the transaction and touches the interest of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation multiplied a thousand-fold can very well pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest. The law punishes the act not as an offense against property but an offense against public order.[14]




However, in imposing penalties for crimes, the courts must bear in mind that Philippine penal law is based on the Spanish penal code and has adopted features of the positivist theoryof criminal law. The positivist theory states that the basis for criminal liability is the sum total of the social and economic phenomena to which the offense is expressed. The adoption of the aspects of the theory is exemplified by the indeterminate sentence law, Article 4, paragraph 2 of the Revised Penal Code (impossible crime), Article 68 and Articles 11 to 14, not to mention Article 63 of the Revised Penal Code (penalties for heinous and quasi-heinous crimes). Philippine penal law looks at the convict as a member of society. Among the important factors to be considered in determining the penalty to be imposed on him are (1) his relationship towards his dependents, family and their relationship with him; and (2) his relationship towards society at large and the State. The State is concerned not only in the imperative necessity of protecting the social organization against the criminal acts of destructive individuals but also in redeeming the individual for economic usefulness and other social ends.[15] The purpose of penalties is to secure justice. The penalties imposed must not only be retributive but must also be reformative, to give the convict an opportunity to live a new life and rejoin society as a productive and civic-spirited member of the community. The court has to consider not only the primary elements of punishment, namely, the moral responsibility of the convict, the relation of the convict to the private complainant, the intention of the convict, the temptation to the act or the excuse for the crime – was it done by a rich man in the insolence of his wealth or by a poor man in the extremity of his need? The court must also take into account the secondary elements of punishment, namely, the reformation of the offender, the prevention of further offenses by the offender, the repression of offenses in others.[16] As Rousseau said, crimes can be thoroughly repressed only by a system of penalties which, from the benignity they breathe, serve rather than to soften than to inflame those on whom they are imposed. [17] There is also merit in the view that punishment inflicted beyond the merit of the offense is so much punishment of innocence.[18]

In this case, even if the Court applies SC Admin. Circular No. 12-2000, as revised, retroactively, the petition must nevertheless be dismissed. The petitioner did not offer any evidence during trial. The judgment of the court became final and executory upon her failure to appeal therefrom. Worse, the petitioner remained at large for five long years. Were it not for her attempt to secure an NBI clearance, she would have been able to elude the long arm of the law.

IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED for lack of merit.

SO ORDERED.

TAN vs. PCIB (2008)

D E C I S I O N

CARPIO MORALES, J.:

From the March 19, 2002 Decision[1] of the Court of Appeals affirming that of the Makati

Regional Trial Court (RTC) convicting Marciano Tan, herein petitioner, of nine (9) counts of

violation of Batas Pambansa Blg. 22 (B.P. Blg. 22) or the Bouncing Checks Law, petitioner filed

the present petition for review on certiorari.





The following undisputed facts spawned the filing of the nine (9) informations for

violation of BP Blg. 22 against petitioner.

Master Tours and Travel (MTT), of which petitioner was executive vice-president,

applied on July 16, 1990 for a 360-day Usance Letter of Credit (LC) with respondent Philippine

Commercial International Bank (PCIB) for the importation of four tourist buses with a total value

of US$430,000[2] from Daewoo Corporation of Seoul, Korea (the supplier), which was agreed

upon by the parties to amount to “closed [sic] to P10 Million Pesos”[3] computed on the basis of

the then prevailing rate of exchange of the dollar to the peso.

As a condition to the grant of the LC, PCIB and MTT entered into a Memorandum of

Agreement[4] under which the initial drawings of the supplier in the amount of US$5,700 against

the LC would be paid by PCI Leasing and Finance Inc. (PCILF) out of the proceeds of MTT’s

amortized loan with it, and any subsequent drawings against the LC by the supplier in excess of

the said amount would be paid out of the proceeds of Treasury Bills which PCIB would

purchase out of the proceeds of post-dated checks to be issued by MTT.

MTT thus issued five checks postdated August, September, October, November, and

December 1990 each for P716,666.66 and another check in January 1991 forP716,666.70 or in

the total amount of P4,300,000.

PCIB thereupon issued the Usance LC in favor of the supplier, which was to mature in

October 1991.

The tourist buses arrived in October 1990 and were delivered to MTT, covered by Trust

Receipts with PCIB as entruster and MTT as entrustee.

Of the six checks that MTT issued to PCIB, the first five representing a total amount

of P3,583,333 were cleared but not the last one dated January 1991. PCIB soon demanded

settlement of this dishonored check from MTT. At the same time, PCIB required MTT to pay the

exchange differential on the peso-dollar rate which was P23.7884 to US$1 in July 1990 when

the LC was issued to P28.56 to US$1 in January 1991 when the last postdated check matured

but was dishonored. The exchange differential was computed by PCIB to amount

to P2,061,331.20. MTT agreed to pay the exchange differential, albeit it later claimed that its

agreement to pay the differential was a “mistake”[5] since no such condition was incorporated in

their contract. The exchange differential, of P2,061,331.20when added to the P716,666.70 face

value of the dishonored check, totalled P2,777,999.86.

MTT thus issued 14 postdated checks of P198,428.42, payable every 15 days, the first

to start on February 28, 1991.

Of the 14 checks, only the first five were honored, the proceeds of which

totaled P992,142.10. The other nine, those dated May 15, 1991 et seq. in the total amount

of P 1,785,855.78, were dishonored – the subject of the nineinformations at bar.

MTT, having suffered financial reverses, availed of provision No. 7 of the Trust Receipt

reading.

7. In the event the Entrustee defaults in his/its obligations or breaches or

fails to comply with the terms and conditions of this Trust Receipt, or upon default in, breach of or noncompliance with the obligation evidenced by Annex A hereof or the agreement under which the Entruster issued the letter of credit under the terms of which the Trust Property was purchased (“events of default”), the Entruster may cancel this trust, and thereupon take possession of the Trust Property and/or such proceeds as may then have been realized therefrom, and have the goods sold and the proceeds of such sale applied, in accordance with the provisions of Section 7 of the Trust Receipts Law. In all cases where the Entruster is compelled to resort to the cancellation of this Trust Receipt or to take any other legal action to protect its interest, the Entrustee shall pay attorney’s fees fixed at 15% of the total obligation of the Entrustee, which in no case shall be less than P500.00 exclusive of the costs and fees allowed by law and the other expenses of collection incurred by the Entruster. Any deficiency resulting from the sale of the Trust Property shall be paid by the Entrustee within 24 hours from such sale; failing which the Entruster may take such legal action, without further notice to the Entrustee, as it may deem necessary to collect such deficiency from the Entrustee.[6] (Underscoring supplied)

MTT thus surrendered the buses to PCIB which accepted them in mid 1991 and March

1992. By MTT’s claim the buses were, at the time of surrender, estimated to be “about 6.6

million.”

Subsequently or in July 1992, PCIB sent petitioner a letter of July 9, 1992 reading:

x x x x

From the records now in our possession, it appears that despite promises made by you to make good your obligations, no performance thus far has been made. As of June 30, 1992 , inclusive of interests and penalty charges, your obligations totaled P 10,327,591.21 .

Since adequate time and opportunity had already been given you by our

client, you are now requested to remit to it the aforesaid sum ofP10,327,591.21 within five (5) days from your receipt hereof, otherwise, we shall bring you to court.

x x x x[7] (Underscoring supplied)

Replying, petitioner’s counsel, by letter of July 22, 1992, wrote PCIB as follows:

Your letters of July 9, 1992 were endorsed to us for appropriate reply by our clients, Master Tours and Travel Corporation and Marciano Tan. Your letter to Mr. Tan makes mention of two (2) trust receipts signed by him covering the importation of the four (4) units DAEWOO buses you want our client to account for. However, Philippine Commercial International Bank (“PCIB”) never furnished our client copies thereof. And up to this date, none is in the possession of our client. Could you please provide our client with copies of the documents?

Delving into the crux of your demand, kindly beadvised that our clients voluntarily surrendered physical possession and custody of the four (4) DAEWOO buses to PCIB as early as August [sic] 1991. The units were accepted by PCIB and, therefore,there no longer exist[s] any liability or obligation on the part of our clients towards that of yours. As clearly stated in your subject letter written to Mr. Marciano Tan, under the terms of the trust receipts, our client has the alternative obligation to either surrender the buses upon demand or pay the total value thereof. As the buses have been surrendered and delivered to your client, our client’s obligation has been extinguished.

We suggest then that your clarify the fact of delivery of the four (4) units

with your client. We do hope to have amply answered and enlightened you on the status

of the matter regarding our client’s supposed liability on the four (4) buses.[8] (Emphasis and underscoring supplied)

There is no showing if PCIB reacted to the above-quoted letter of petitioner’s

counsel. PCIB subsequently filed in October 1992 a criminal complaint against petitioner before

the Makati City Prosecutor’s Office which resulted in the filing on April 1, 1993 of the nine

informations against him for violation of B.P. Blg. 22 before the RTC of Makati. The first

information, Criminal Case No. 93-2365, reads:

That on or about the 29th day of January 1991, in the Municipality of

Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused as the duly authorized signatory of Master Tours and Travel Corporation, did then and there willfully, unlawfully and feloniously make or draw and issue to Philippine Commercial Int[ernational] Bank to apply on account or for value the check/described below:

Check No.: 677744Drawn Against: Philippine Banking Corp.In the amount: P198,428.42Dated/Postdated: May 15, 1991Payable to: Philippine Commercial International Bank

said accused well knowing that at the time of issue thereof Master Tours & Travel Corp. had no sufficient funds in or credit with the drawee bank for the payment in full of the face amount of the check upon its presentment, which check was presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for the reason “Drawn Against Insufficient Funds” and, despite receipt of notice of said dishonor, the accused and/or Master Tours & Travel Corporation failed to pay said payee the face amount of said check or to make arrangement for full payment thereof within five (5) banking days after receiving notice.[9] (Underscoring partly in the original and partly supplied)

The other eight informations, Criminal Case Nos. 93-2366 to 93-2373, are similarly

worded and for the same amount, differing only as to the check numbers, the dates of issue and,

with respect to Criminal Cases No. 93-2368 to 93-2373, the cause of dishonor (“ACCOUNT

CLOSED”).[10]

Branch 142 of the Makati RTC, by Decision[11] ofOctober 25, 1995, convicted petitioner of

all the nine charges. The trial court absolved petitioner of civil liability, however, because “the

money obligations arising from the checks are of Master Tours & Travel Corporation and not of

the accused Marciano Tan who did not, by signing in behalf of the corporation, assume personal

liability therefor.”[12] Thus, the trial court disposed:

WHEREFORE, the Court finds the accused MARCIANO T. TAN to be

GUILTY beyond reasonable doubt of these nine (9) criminal charges for violation of BP 22, and hereby sentences him to suffer imprisonment for THIRTY (30) days for EACH of the NINE [9] CRIMNAL OFFENSES CHARGED.

For lack of evidence, the claim of civil liability arising from the nine [9]

dishonored checks, are DISMISSED, without prejudice to their being taken up in

a proper civil action for recovery of the amounts till due, if any, from Master Tours [&] Travel Corporation.

Costs against the accused.[13] (Emphasis in the

original; underscoring supplied)

On petitioner’s appeal, the Court of Appeals affirmed the trial court’s decision by

Decision of March 19, 2002. Hence, the present Petition for Review,[14] faulting the appellate

court

A

. . . IN CONVICTING THE ACCUSED DESPITE THE FACT THAT HIS CRIMINAL LIABILITY WAS EXTINGUISHED BY HIS HAVING OVERPAID PCIB .

B

. . . IN NOT FINDING THAT MASTER HAD FULLY PAID PCIB [AND] . . . IN NOT FINDING THAT MASTER, AS A MATTER OF FACT, HAD IN EFFECT, OVERPAID PCIB WHEN THE LATTER PULLED OUT THE BUSES SUBJECT OF THE TRUST RECEIPTS ISSUED IN CONNECTION WITH THE TRANSACTION.

C

. . . IN NOT FINDING THAT THE CONTRACT DOCUMENTS DO NOT CONTAIN ANY STIPULATION AS TO ADJUSTMENT OF THE OBLIGATION IN CASE OF FOREIGN EXCHANGE FLUCTUATION. THERE IS NOTHING IN THE MEMORANDUM OF AGREEMENT BETWEEN THE PARTIES NOR IN THE LETTER OF CREDIT APPLICATION OR IN ANY DOCUMENT COVERING THE TRANSACTION WHEREIN MASTER TOURS OBLIGED ITSELF TO PAY AN INCREASE IN DOLLAR EXCHANGE RATE FLUCTUATION. CONVERSELY, NEITHER IS PCIB OBLIGED TO REFUND MASTER TOURS OF ANY DECREASE IN THE PESO DOLLAR EXCHANGE RATE.

D

. . . IN NOT FINDING THAT EVEN ASSUMING MASTER WAS OBLIGED TO PAY FOREIGN EXCHANGE RATE DIFFERENTIAL, IT WASPREMATURE TO DEMAND IT [ON] JANUARY 7, 1991 .

x x x x

F

. . . IN NOT FINDING THAT THE SUPERVENING BANKRUPTCY SUFFERED BY MASTER BROUGHT ABOUT BY THE ECONOMIC DISLOCATION OF THE

COUNTRY BROUGHT ABOUT BY THE MOUNT PINATUBO ERUPTION, THE GULF WAR AND THE BAGUIO EARTHQUAKE DISCULPATES THE ACCUSED FROM CRIMINAL LIABILITY.[15] (Emphasis and underscoring supplied)

The petition is impressed with merit.

Unless the following elements are shown to have been proven by the prosecution, an

accused will not be convicted for violation of B.P. Blg. 22:

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

value; 2. The accused knows at the time of the issuance that he or she 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 check is subsequently dishonored by the draweebank for insufficiency of

funds or credit, or it would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.[16] (Underscoring supplied)

While issuing of a bouncing check is malumprohibitum, the prosecution is not excused

from its responsibility of proving beyond reasonable doubt all the elements of the offense.[17]

Respecting the second element of the crime, the prosecution must prove that the

accused knew, at the time of issuance, that he does not have sufficient funds or credit for the

full payment of the check upon its presentment.[18]

The element of “knowledge” involves a state of mind that obviously would be difficult to

establish, hence, the statute creates a prima facie presumption of knowledge on the

insufficiency of funds or credit coincidental with the attendance of the two other elements.[19]

Evidence of knowledge of insufficient funds.– The making, drawing and

issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving

notice that such check has not been paid by the drawee .[20] (Emphasis and underscoring supplied)

In order to create such presumption, it must be shown that the drawer or maker received

a notice of dishonor and, within five banking days thereafter, failed to satisfy the amount of the

check or arrange for its payment.[21] The above-quoted provision creates a

presumption juris tantumthat the second element prima facie exists when the first and third

elements of the offense are present.[22]

The presumption is not conclusive,[23] however, as it may be rebutted by full payment.[24] If the maker or drawer pays, or makes arrangement with the drawee bank for the payment of

the amount due within the five-day period from notice of the dishonor, he or she may no longer

be indicted for such violation.[25] It is a complete defense[26] that would lie regardless of the

strength of the evidence presented by the prosecution.[27] In essence, the law affords the drawer

or maker the opportunity to avert prosecution by performing some acts that would operate to

preempt the criminal action,[28] which opportunity serves to mitigate the harshness of the law in

its application.[29]

It is a general rule that only a full payment at the time of its presentment or during the

five-day grace period could exonerate one from criminal liability under B.P. Blg. 22 and that

subsequent payments can only affect the civil, but not the criminal, liability.[30]

In Macalalag v. People,[31] the Court held that payment by the accused of the amount of

the check prior to its presentment serves the same purpose. It rebuked the malpractice of

presenting checks for payment even after the amount thereof had been paid.

In Griffith v. Court of Appeals,[32] the Court held that where the creditor had collected

more than a sufficient amount to cover the value of the checks representing rental arrearages,

holding the debtor’s president to answer for a criminal offense under B.P. Blg. 22 two years after

the said collection is no longer tenable nor justified by law or equitable considerations. In

that case, the Court ruled that albeit made beyond the grace period but two years prior to the

institution of the criminal case, the payment collected from the proceeds of the foreclosure and

auction sale of the petitioner’s impounded properties, with more than a million pesos to spare,

justified the acquittal of the petitioner. The Court ratiocinated:

The Bouncing Checks Law “was devised to safeguard the interest of the banking system and the legitimate public checking account user.” It was not designed to favor or encourage those who seek to enrich themselves through manipulation and circumvention of the purpose of the law. x x x

x x x We cannot, under these circumstances, see how petitioner’s

conviction and sentence could be upheld without running afoul of basic principles of fairness and justice. For [private respondent] has, in our view, already exacted its proverbial pound of flesh through foreclosure and auction sale as its chosen remedy.[33] (Emphasis supplied)

In the present case, PCIB already exacted its proverbial pound of flesh by receiving and

keeping in possession the four buses-trust properties surrendered by petitioner in about mid

1991 and March 1992 pursuant to Section 7 of the Trust Receipts Law,[34] the estimated value of

which was “about P6.6 million.”[35] It thus appears that the total amount of the dishonored

checks –P1,785,855.75 –, the undisputed claim of petitioner of a mistaken agreement to pay

the exchange differential (which the same checks represented) aside, was more than fully

satisfied prior to the transmittal and receipt of the July 9, 1992 letter of demand. In

keeping with jurisprudence, the Court then considers such payment of the dishonored checks to

have obliterated the criminal liability of petitioner.[36]

It is a consistent rule that penal statutes are construed strictly against the State and

liberally in favor of the accused. And since penal laws should not be applied mechanically, the

Court must determine whether the application of the penal law is consistent with the purpose

and reason of the law.[37] In the present case, it finds in the negative.

WHEREFORE, the petition is GRANTED. The assailed March 19, 2002 Decision of the

Court of Appeals in CA-G.R. C.R. No. 18999 is REVERSED and SET

ASIDE. Petitioner Marciano Tan is ACQUITTED in Criminal Case Nos. 93-2365 to 93-2373.

SO ORDERED.