Mitra V PP and Tarcelo

FACTS:
Petitioner Mitra was the treasurer and Cabrera (now deceased) was the President of Lucky Nine
Credit Corporation(LNCC), a corporation engaged in money lending activities. Private respondent
Felicisimo Tarcelo (Tarcelo) invested money inLNCC. As the usual practice in money placement
transactions, Tarcelo was issued checks equivalent to the amounts he investedplus the interest on his
investments.When Tarcelo presented the checks for payment, they were dishonored for the reason
"account closed." Tarcelomade several oral demands on LNCC for the payment of said checks but he
was frustrated. So he filed seven information forviolation of Batas Pambansa blg. 22 (BP 22) in the
amount of P925,000.00 before the MTCC. Court decided in favor if Tarcelo.So petitioners appealed to
RTC contending that : They signed the seven checks in blank with no name of the payee, noamount
stated and no date of maturity; that they did not know when and to whom those checks would be issued;
that theseven checks were made to sign at that time; and that they signed the checks so as not to delay
the transactions of LNCCbecause they did not regularly hold office there. Petition was still denied.
Meanwhile Cabrera died. Mitra alone file a petitionfor review claiming among others, that there was no
Notice of Dishonor on her. CA denied for lack of merit, hence this petition;

ISSUE(S):
1. WON the elements of violation of BP 22 must be proved beyond reasonable doubt as against the
corporation who carries theaccount where the subject checks were drawn before liability attaches to the
signatories.
2. WON there is proper service of Notice of Dishonor and demand to pay to the petitioner and the late
Cabrera.

HELD: Petition DENIED.
The convenience afforded by checks is damaged by unfunded checks that adversely affect confidence in
commercialand banking activities, and ultimately injure public interest.
1. NO.
The 3rd paragraph of sec.1 of BP 22 reads: "Where the check is drawn by a corporation, company or
entity, the personor persons who actually signed the check in behalf of such drawer shall be liable under
this act." This provision recognizes thereality that a corporation can only act through its officers. Hence its
wording is unequivocal and mandatory that the person whoactually signed the corporate check shall be
held liable for violation of BP 22. This provision does not contain any condition,qualification or limitation.
2. YES.
There is no dispute that Mitra signed the checks and that the bank dishonored the checks because the
account had beenclosed. Notice of Dishonor was properly given, but Mitra failed to pay the checks or
make arrangements for their paymentwithin 5 days from notice. (Cite elements of violation of BP22) With
all the above elements duly proven, Mitra cannot escapethe civil and criminal liabilities that BP 22
imposes for its breach
---
Alferez v PP and Co.,

FACTS:
Alferez purchased construction materials from Cebu ABC Sales Commercial. he issued three (3)
checks for the total amount of P830,998.40, as payment. The checks were dishonored for having been
drawn against a closed account. Petitioner was charged with three (3) counts of B.P. 22 before the
Municipal Trial Court in Cities (MTCC). During the trial, the prosecution presented its lone witness, private
complainant Pingping Co.

Instead of presenting evidence, petitioner filed a Demurrer to Evidence, (10) months after the
prosecution rested its case. Petitioner averred that the prosecution failed to show that he received the
notice of dishonor or demand letter.
MTCC issued a resolution denying petitioner's Demurrer to Evidence, and rendering judgment finding
petitioner guilty as charged. , petitioner appealed to the Regional Trial Court (RTC), Branch 21, Cebu
City. The RTC rendered Judgment affirming in toto the MTCC decision. Petitioner elevated the matter to
the CA via a petition for review.

The CA dismissed the petition for lack of merit. It sustained petitioner's conviction as the
elements of the crime had been sufficiently established. As to the service on petitioner of the notice of
dishonor, the appellate court pointed out that petitioner did not testify, and that he did not object to the
prosecution's evidence aimed at proving the fact of receipt of the notice of dishonor. Consequently, the
registry receipt and the return card adequately show the fact of receipt.

ISSUE:
WON Registry Receipt and Registry Return Receipt alone without presenting the person who mailed
and/or served the demand letter is sufficient notice of dishonor as required by BP 22.

RULING: NO.
After a careful evaluation of the records of the case, we believe and so hold that the totality of the
evidence presented does not support petitioner's conviction for violation of B.P. Blg. 22.

The elements of the crime are, as follows: (1) the making, drawing, and issuance of any check to apply on
account or for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does
not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its
presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds
or credit, or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank
to stop payment.
In this case, the prosecution failed to prove the second element. The prosecution merely presented a
copy of the demand letter, together with the registry receipt and the return card, allegedly sent to
petitioner. However, there was no attempt to authenticate or identify the signature on the registry return
card. Receipts for registered letters and return receipts do not by themselves prove receipt; they must be
properly authenticated to serve as proof of receipt of the letter, claimed to be a notice of dishonor. To be
sure, the presentation of the registry card with an unauthenticated signature, does not meet the required
proof beyond reasonable doubt that petitioner received such notice. Moreover, for notice by mail, it must
appear that the same was served on the addressee or a duly authorized agent of the addressee. From
the registry receipt alone, it is possible that petitioner or his authorized agent did receive the demand
letter. Possibilities, however, cannot replace proof beyond reasonable doubt. As there is insufficient proof
that petitioner received the notice of dishonor, the presumption that he had knowledge of insufficiency of
funds cannot arise.

Azarcon vs PP and Gonzales

FACTS:
Azarcon a business woman regularly borrows money from Gonzales an informal money lender.
She issued various checks payable to Gonzales but at maturity, they were dishonored for the reason
Account Closed. Upon demand of Gonzales, Azrcon issued several Premium Bank checks, with the
assurance that all will be honored but that they were all dishonored due to Account Closed.

Azarcon then sought a reconciliation of her accountability as she also has some receipt payments
covering the checks she has issued. All the while Azarcon expressed her willingness to settle her
outstanding account. Eventually Azarcons husband Manuel later paid partially the amount due as initial
payment with the undertaking to settle the balance within one year via monthly installments. After 2
years, Azarcon has yet to settle her debt. Gonzales thus filed a complaint for violation of B.P. 22. Azarcon
maintains that her obligations under the various checks had been released, superseded and novated by
her husbands assumption of her liabilities. RTC convicted Azarcon. On appeal, the RTCs decision was
affirmed.

ISSUES
1. WON prior demand for the settlement of the checks after their dishonour is required prior to filing BP
22.
2. WON novation had taken place with respect to her civil liability.

HELD
1. YES. A notice of dishonor received by the maker or drawer of the check is thus indispensable
before a conviction can ensue. The notice of dishonor may be sent by the offended party or the
drawee bank. The notice must be in writing. A mere oral notice to pay a dishonored check will
not suffice. The lack of a written notice is fatal for the prosecution. Afterwhich, liability for violation
of B.P. 22 attaches when the prosecution establishes proof beyond reasonable doubt of the
existence of the following elements:
a. The accused makes, draws or issues any check to apply to account or for value;
b. 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
c. The check is subsequently dishonored by the drawee bank for insufficiency of funds or
credit or it would have been dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment.

2. NO. Extinctive novation is never presumed; there must be an express intention to novate; in
cases where it is implied, the acts of the parties must clearly demonstrate their intent to dissolve
the old obligation as the moving consideration for the emergence of the new one. (Iloilo Traders
Finance, Inc vs Heirs of Soriano)

The novation which petitioner suggests as having taken place, whereby Manuel was supposed to
assume her obligations as debtor, is neither express nor implied. There is no showing of Marcosa
explicitly agreeing to such a substitution, nor of any act of her from which an inference may be drawn that
she had agreed to absolve petitioner from her financial obligations and to instead hold Manuel fully
accountable.

Iloilo Traders Finance. Inc. vs. Heirs of Oscar Soriano, Jr. (404 SCRA 67)

FACTS:
Respondents executed two promissory notes secured by real property mortgages in favor of petitioner.
The respondents defaulted and petitioner moved for extra-judicial foreclosure of the mortgages.
Respondent filed a complaint against petitioner. The parties later entered into amicable settlement and
submitted it to the trial court for approval. The trial court required the parties to give some clarifications on
several issues that were not complied. The amicable settlement was disapproved and the court
proceeded. Respondents withdrew the case and filed a (new) case for novation and specific performance
which was decided favorably for the respondents. The Court of Appeals affirmed the judgment.

ISSUE:
Whether or not the amicable settlement entered into between parties has novated the original obligation.

HELD:
NO. An extinctive novation would thus have the twin effects of, first, extinguishing an existing
obligation and, second, creating a new one in its stead. This kind of novation presupposes a confluence
of four essential requisites: (1) a previous valid obligation, (2) an agreement of all parties concerned to a
new contract, (3) the extinguishment of the old obligation, and (4) the birth of a valid new
obligation.
]
Novation is merely modificatory where the change brought about by any subsequent
agreement is merely incidental to the main obligation (e.g., a change in interest rates
[7]
or an extension of
time to pay
]
); in this instance, the new agreement will not have the effect of extinguishing the first but
would merely supplement it or supplant some but not all of its provisions.
Verily, the parties entered into the agreement basically to put an end to Civil Case then pending
before the Regional Trial Court.
]
Concededly, the provisions of the settlement were beneficial to the
respondent couple. The compromise extended the terms of payment and implicitly deferred the
extrajudicial foreclosure of the mortgaged property. It was well to the interest of respondent spouses to
ensure its judicial approval; instead, they went to ignore the order of the trial court and virtually failed to
make any further appearance in court. This conduct on the part of respondent spouses gave petitioner
the correct impression that the Sorianos did not intend to be bound by the compromise settlement, and its
non-materialization negated the very purpose for which it was executed.

Note: An amicable settlement or a compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.
]
It may be judicial or
extrajudicial; the absence of court approval notwithstanding, the agreement can become the source of
rights and obligations of the parties.