A common predicament faced by businessmen is violating the Batas Pambansa Blg.

22 also
known as the Bouncing Checks Law. Evidently, businessmen issue checks as a matter of
practice, and sometimes when the due dates of these checks fall, either by inadvertence or
unavailable finances, the check bounces.
BP 22 punishes a person for issuing a worthless check. A check is obviously worthless when, at
the time it is encashed for payment, which must be within ninety days from issuance, it is
dishonored by the issuing bank because of insufficient funds, or even when the account against
which the check was drawn was already closed. In any of these cases, the issuer of the check
commits a violation of BP 22, and may be held liable for imprisonment of thirty days to one year
or a fine a double the value of the check or both at the discretion of the court. Moreover, the
issuer of the check may also be liable for imprisonment, even if only a fine is imposed by the
court, if the issuer has no sufficient property to pay the fine imposed, in which case he or she
shall be liable to serve a prison term at the rate of one day for each eight pesos of the unpaid fine.
Another manner in which a person becomes liable under BP 22 is when the issuer orders his or
her bank to make a stop payment of the check without any valid reason and the check would
have been dishonored for insufficiency of funds had it not been for the stop payment order given
by the issuer.
It must also be remembered that prosecution under BP 22 is not a bar for prosecution for Estafa,
and the issuer of the check may be held liable for one or both crimes, singly or simultaneously
when the complaints are filed in separate courts.
But the issuer of the check is not left with remedies. Our Supreme Court has sanctioned
numerous defenses which have acquitted individuals charged with a violation of BP 22. Possible
defenses in an indictment include 1) payment of the value of the dishonored check within five
banking days from receipt of the notice of dishonor; 2) payment of the value of the check before
filing of the criminal case in court; 3) failure to serve a written notice of dishonor of the check to
the issuer; 4) novation or change in the underlying obligation of the parties before the filing of
the criminal case in court; 5) a stop payment order pursuant to a valid reason such as nondelivery of goods or services; and 6) knowledge by the payee that the check was not supported
by sufficient funds when the issuer issued the check.
A violation of BP 22 is not really a wrong in itself or involves wrongful or immoral conduct.
Since committing a violation of BP 22 is not an inherently wrong act, the Supreme Court has, in
numerous cases, merely imposed a penalty of fine, understanding the nature of the offense and
the problems that every businessman encounters.

A check bounces either because there is not enough money or credit in a bank to
cover its amount, as in DAIF (drawn against insufficient funds check), NSF (nonsufficient funds check) and closed account.
Batas Pambasa Blg. 22 punishes any person who, KNOWING at the time he
issues a check in payment of obligation that he does not have sufficient funds or
credit with the drawee bank. The gravamen of this special penal law is the
issuance of check, not the non-payment of the obligation. (Lozano vs. Martinez,
146 SCRA 323). Checks form part of the banking system for being substitutes for
money. Hence, BP Blg. 22 is neither violative of the constitutional provision
against imprisonment of non-payment of debt nor the non-impairment clause.
In the case of Que vs. People, the Supreme Court settled that B.P.22 applies
even in cases where the dishonored checks were issued merely in the form of a
DEPOSIT or a GUARANTY and not as actual payment. The law does not make any
distinction. Criminal liability attaches to the drawer of the check whether it was
issued in payment of an obligation or merely to guarantee the said obligation.
PRESCRIPTION, which is the termination of the right to prosecute is a defense in
B.P. 22. The lapse of four (4) years AFTER the expiration of the five (5) banking
days from notice of dishonor is the prescriptive period for filing bounced check
case.
Whereas, if a person, at the time the check was issued, had the intention
of stopping payment of check, shall be guilty of estafa under the Revised Penal
Code. In estafa, the issuance of a post-dated or check without funds is intended
to defraud and to cause damage to the payee.
Deceit is an element of estafa while the same is not required in BP Blg. 22.
A person therefore, who issues a check in payment of an obligation can be held
liable at the same time for violation of B.P. 22 and estafa under Article 315, par. 2
(d) of the Revised Penal Code. Foreign checks, provided either they are drawn
and issued in the Philippines, though payable outside, are within the coverage of
the law. (De Villa vs. CA, 195 SCRA 722).
The signatory/ies are the ones liable under the law whether the bounced
check is issued by natural or juridical person because the corporation cannot be
subject to arrest and criminal liability.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

ALICIA F. RICAFORTE,

G.R. NO. 154438

Petitioner,
Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus -

AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

LEON L. JURADO,
Respondent.

Promulgated:
September 5, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking to annul and set aside the Decision dated April 26, 2002 and the Resolution dated July
29, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 66293.

On February 10, 1997, respondent filed a Complaint for estafa and violation of Batas
Pambansa (B.P.) Blg. 22 against Alicia F. Ricaforte (petitioner) with the Quezon City
Prosecutors Office. He alleged that he operates and manages a rice mill in Bulacan; that
sometime in June 1996, Ruby Aguilar (Aguilar) procured rice from him and in payment thereof
gave him two Far East Bank and Trust Company (FEBTC) checks, to wit: FEBTC Check No.
08A096028P dated July 25, 1996 and Check No. 08A096029P dated August 25, 1996, in the
amount of P431,555.00 each, which were both issued by petitioner and when presented for
payment were dishonored.

In her Counter-Affidavit, petitioner denied the accusation. She alleged that Aguilar who
had lost her Metrobank checkbook borrowed her checks to pay off Aguilars obligations with
Leon Jurado (respondent); that she willingly lent her checks to Aguilar on condition that these
checks will be replaced with Aguilars own checks once her new checkbook is issued to her by
Metrobank; that Aguilar then used petitioners checks to pay her rice procurement with
respondent; that in accordance with the arrangement, Aguilar issued two replacement checks in
favor of respondent in the amount of P431,555.00 each; that when Aguilar issued the
replacement checks, petitioner demanded from respondent the return of her checks but
respondent refused, thus she was constrained to request her bank to issue an order of stop
payment. Aguilar executed an Affidavit corroborating petitioners defense.

Respondent filed his Reply denying that petitioners checks were merely accommodation
checks. Petitioner filed her rejoinder as well as supplement to rejoinder.

In a Resolution dated November 24, 1997, Assistant City Prosecutor Luis Zenon Q.
Maceren dismissed the complaint for estafa and B.P. Blg. 22 for insufficiency of evidence. The
prosecutor found that petitioner did not have any business transaction with respondent; that the
subject checks were issued only to accommodate Aguilar; that these were delivered to
respondent not as payment but as a guarantee and on condition that Aguilar will replace
petitioners checks with her own, which Aguilar did prior to the maturity of petitioners checks;
that upon maturity of Aguilars replacement checks and after respondent presented them for
payment and were subsequently dishonored, it was then that petitioners checks were also
presented by respondent for encashment; that Aguilars replacement checks are now subject of
another litigation pending in the Metropolitan Trial Court of Quezon City; that the sequence of
events showed that indeed petitioners checks were not intended as payment to respondent
because petitioner had no obligation to respondent; that the checks were not issued to account or
for value; thus, there can be no finding of prima facie evidence of the charges against him
relying on Magno v. Court of Appeals.

Respondents Motion for Reconsideration was denied in a Resolution dated May 27, 1998.
The prosecutor found that although the issuance of a worthless check is malum prohibitum, B.P.
Blg. 22 still requires that the checks should be issued with consideration, which element was
lacking in this case; that even respondent admitted in his Complaint-Affidavit that petitioner had
no transaction with him by alleging that Aguilar handed to him petitioners two checks in
payment of rice procurement representing these as Aguilars collection checks and with
assurance that they are good; that when Aguilar replaced petitioners checks with her own,
petitioners checks had no more consideration since these were issued upon agreement that the
real debtor, Aguilar, will also issue her own checks.

Respondent appealed the dismissal of his complaint to the Department of Justice. The
Secretary of Justice issued a Resolution dated September 21, 2000 modifying the Resolution of
the City Prosecutor and directing him to file an information against petitioner for violation of
B.P. Blg. 22.
The Justice Secretary found that while the dismissal of estafa is correct, petitioner should
be indicted for B.P. Blg. 22. In so ruling, the Secretary found that while petitioner has no
business transactions with respondent and merely issued the checks as a guarantee for Aguilars
obligation to respondent, the fact remains that petitioner issued the subject checks and failed to
pay respondent the amount due thereon or make arrangements for their full payment within five
banking days after receiving a notice of dishonor; that the gravamen of the offense punished by
B.P. Blg. 22 is the act of making and issuing worthless checks or those dishonored upon their
presentment for payment; that the thrust of the law is to prohibit the making of worthless checks
and putting them in circulation; that to require the arrangement surrounding the issuance of the
checks be first looked into and thereafter exempt such issuance from the punitive provisions of
B.P. Blg. 22 on the basis of that arrangement would frustrate the very purpose for which the law
was enacted, i.e. to stop the proliferation of unfunded checks; that B.P. Blg. 22 applies even when
dishonored checks were issued merely in the form of deposit or guarantee.

The Justice Secretary denied petitioners Motion for Reconsideration in a Resolution dated
May 30, 2001.

Petitioner filed with the CA a Petition for Certiorari under Rule 65 assailing the resolutions
of the Secretary of Justice for having been issued with grave abuse of discretion.

On April 26, 2002, the CA issued its assailed Decision denying the petition for lack of
merit. The CA found no grave abuse of discretion committed by the Justice Secretary in his
assailed Resolutions. It ruled that trial on the merits must ensue since it is on said occasion that
petitioner is granted opportunity for a full and exhaustive presentation of her evidence and not
during the preliminary investigation phase where the investigating officer acts upon probable
cause and reasonable belief; that in the preliminary investigation phase, it is not yet clear whether
petitioner could be considered as having actually committed the offense charged and sought to be
punished, although petitioner is presumed innocent until proven guilty beyond reasonable doubt;
that the crux of the matter rests upon the reasons for the drawing of the postdated checks by
petitioner; i.e., whether they were drawn or issued to apply on account or for value as required
under B.P. Blg. 22 which will only be determined during trial.

Petitioners Motion for Reconsideration was denied in a Resolution dated July 29, 2002.
The CA ruled that mere issuance of a bouncing check constitutes a probable cause for violation
of B.P. Blg. 22; that whether or not the accused is guilty thereof is determined in the trial
proper; that preliminary investigation is not a trial and is not intended to usurp the function of the
trial court; that Sales, which is invoked by petitioner, is not applicable to the instant case, since
the issue in that case was whether or not the Ombudsman followed the proper procedure in
conducting a preliminary investigation and the corollary issue of whether or not petitioner was

afforded an opportunity to be heard and to submit controverting evidence which are not the
issues in this case.

Hence, herein petition on the following grounds:

I
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE
REVERSIBLE ERROR IN NOT HOLDING THAT THE HONORABLE
SECRETARY OF JUSTICE COMMITTED A GRAVE ABUSE OF
DISCRETION IN ISSUING HIS MODIFIED RESOLUTION FINDING
PROBABLE CAUSE AGAINST PETITIONER FOR VIOLATION OF B.P.
BLG. 22, DESPITE THE FACT THAT THE HONORABLE SECRETARY HAS
AGREED WITH THE FINDING OF THE QUEZON CITY PROSECUTION
OFFICE DISMISSING THE CHARGE OF ESTAFA AGAINST PETITIONER.

II
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
REVERSIBLE ERROR IN NOT GIVING WEIGHT AND CREDENCE TO
PETITIONERS CLAIM THAT THE SUBJECT CHECKS WERE NOT ISSUED
TO ACCOUNT OR FOR VALUE BUT SOLELY TO GUARANTEE RUBY
AGUILARS CHECKS, ESPECIALLY CONSIDERING THAT IT IS
UNDISPUTED THAT PETITIONER HAD NO BUSINESS DEALINGS
WHATSOEVER WITH THE RESPONDENT REGARDING RICE
PROCUREMENTS.
III
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
REVERSIBLE ERROR IN NOT HOLDING THAT THERE IS NO NEED TO
GO TO TRIAL IN THE INSTANT CASE BECAUSE EVEN DURING THE
PRELIMINARY INVESTIGATION CONDUCTED BY THE QUEZON CITY
PROSECUTION OFFICE, THE SAID PROSECUTION OFFICE HAD FOUND
THAT NO PRIMA FACIE OR PROBABLE CAUSE EXISTS TO WARRANT
THE FILING OF THE COMPLAINTS OF ESTAFA AND VIOLATION OF B.P.
BLG. 22 AGAINST THE PETITIONER.
IV
THE AFFIRMANCE BY THE HONORABLE COURT OF APPEALS OF
THE MODIFIED RESOLUTION OF THE HONORABLE SECRETARY OF
JUSTICE DIRECTING THE FILING OFAN INFORMATION AGAINST

PETITIONER FOR VIOLATION OF B.P. BLG. 22 OVERLOOKED THE FACT

THAT RESPONDENT WOULD BE UNJUSTLY ENRICHED AT THE
EXPENSE OF PETITIONER AND THE DEBTOR, MS RUBY AGUILAR, IN
THE FORM OF IMPOSITION OF A FINE WHICH IS DOUBLE THE
AMOUNT OF THE BOUNCED CHECKS.

The main issue to be resolved is whether the CA erred in ruling that the Secretary of
Justice did not commit grave abuse of discretion in finding that there is probable cause for the
filing of information against petitioner for violation of B.P. Blg. 22.

Petitioner alleges that the CA should not have sustained the modified resolution of the
Secretary of Justice because the Secretary misappreciated her defense, i.e., that Aguilar lost her
Metrobank checkbook and borrowed her check and that she issued the subject checks on the
condition that the same will be replaced when Aguilars new checkbook is issued, thus the
subject checks are merely accommodation or guarantee checks; that it was Aguilar who tendered
them to respondent in payment of her rice procurements from him; that the subject checks were
not intended for encashment; that Aguilar subsequently issued her own checks dated July 20,
1996 and August 20, 1996, for P431,555.00 each as replacement for the subject checks; that such
substitution was with respondents knowledge, since the arrangement was brought to his
attention through a letter dated July 19, 1996.

Petitioner insists that none of the elements of the offense of B.P. Blg. 22 were present; the
first element is absent, since the subject checks were not intended to apply on account or for
value in favor of respondent, as petitioner had no business transaction on rice procurements with
respondent; the second element is also absent because it is undisputed that at the time petitioner
issued the checks, she had substantial deposits with FEBTC which can readily fund her checks
upon presentment or maturity; that the reason for the dishonor was stop payment, because she
requested the bank to do so due to a valid reason, i.e., her checks were already replaced by
Aguilars checks dated July 20, 1996 and August 20, 1996. Petitioner cites Tan v. People, in

which the petitioner was acquitted of violation of B.P. Blg. 22 because in ordering the stop
payment of her check, there were sufficient funds in her account.

Petitioner claims that the CA overlooked the fact that the Secretary of Justice absolved her
of estafa; thus, she should also be absolved of violation of B.P. Blg. 22, since both offenses arose
from the same subject checks.

Petitioner contends that the CA misappreciated the importance of a preliminary

investigation when it ruled that the trial on the merits must ensue, and it is on said occasion when
petitioner is granted the opportunity for a full and exhaustive display of her evidence; that it
erred in ruling that it is only during trial that the presence or absence of the first element of B.P.
Blg. 22, i.e., whether the subject checks were issued to apply to account or for value, can be
determined; that preliminary investigation should be given due importance and the determination
of whether the first element of B.P. Blg. 22 is present should not be shifted to the trial court; that
contrary to the CAs finding, Sales is applicable, a case in which it was ruled that at the
preliminary investigation proper, the question whether or not an accused can be bound over for
trial can already be determined; if it was determined at the preliminary investigation that an
accused had not committed the crime charged, then it is useless to still hold a trial to determine
the guilt of the accused, since it can already be determined at the preliminary investigation.

We are not persuaded.

In a preliminary investigation, the public prosecutor merely determines whether there is

probable cause or sufficient ground to engender a well-founded belief that a crime has been
committed, and that the respondent is probably guilty thereof and should be held for trial.
Probable cause implies probability of guilt and requires more than bare suspicion but less than

evidence which would justify a conviction. A finding of probable cause needs only to rest on
evidence showing that more likely than not, a crime has been committed by the suspect. It does
not call for the application of rules and standards of proof that a judgment of conviction requires
after trial on the merits. The complainant need not present at this stage proof beyond reasonable
doubt. A preliminary investigation does not require a full and exhaustive presentation of the
parties evidence. It is enough that in the absence of a clear showing of arbitrariness, credence is
given to the finding and determination of probable cause by the Secretary of Justice in a
preliminary investigation.

Contrary to petitioners claim, respondent sufficiently established the existence of probable

cause for violation of B.P. Blg. 22. Section 1 of B.P. Blg. 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.

To be liable for violation of B.P. Blg. 22, the following elements must be present:

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 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.
The gravamen of the offense punished by B.P. Blg. 22 is the act of making and issuing a
worthless check; that is, a check that is dishonored upon its presentation for payment. In Lozano
v. Martinez, we have declared that it is not the non-payment of an obligation which the law
punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of
the law is to prohibit, under pain of penal sanctions, the making and circulation of worthless
checks. Because of its deleterious effects on the public interest, the practice is proscribed by the
law. The law punishes the act not as an offense against property, but an offense against public
order. In People v. Nitafan, we said that a check issued as an evidence of debt though not
intended to be presented for payment has the same effect as an ordinary check and would fall
within the ambit of B.P. Blg. 22.

In this case, petitioner issued the two subject checks in favor of respondent, and when
respondent presented them for payment, they were dishonored for reason of the stop payment
order issued by petitioner. Notably, a certification from the bank showed that they returned the
checks for that reason. In addition, contrary to the claim of petitioner, at the time the said checks
were presented for deposit/payment, there were no sufficient funds to cover the same. The mere
act of issuing a worthless check -- whether as a deposit, as a guarantee or even as evidence of
pre-existing debt -- is malum prohibitum.

Petitioner claims that the subject checks were merely accommodation checks in favor of
Aguilar, as they were not issued to account or for value, since she had no business transactions
with respondent-payee. However, petitioner admitted that she issued the checks for the rice
procurement of Aguilar from respondent which was a valuable consideration. Notably, in
respondents complaint-affidavit, he alleged that the subject checks were given to him by Aguilar
in payment of the latters rice procurements, with the representation that the subject checks were
her collection checks and assuring respondent that they would be good upon presentment.

On record is a letter dated July 31, 1996 of respondents counsel to petitioner on the matter
of petitioners subject FEBTC Check No. 08A096028P dated July 25, 1996, a letter in which the
counsel wrote that the check which was in partial payment of the obligation due from Aguilar,
and that in return for petitioners issuance and delivery of the said check, Aguilar acquired a
temporary reprieve on her obligation.

The validity and merits of a partys defense and accusation, as well as admissibility of
testimonies and evidence, are better ventilated during trial proper than at the preliminary
investigation level. A finding of probable cause does not ensure a conviction or a conclusive
finding of guilt beyond reasonable doubt. The allegations adduced by the prosecution will be put
to test in a full-blown trial in which evidence shall be analyzed, weighed, given credence or
disproved.

In fact, petitioners argument that respondent was aware of the fact that the subject checks
were only accommodation checks in favor of Aguilar is not a defense against a charge for
violation of B.P. Blg. 22. In Ruiz v. People of the Philippines, where the accused interposed the
defense of accommodation party, we held:

It bears stressing that, whether a person is an accommodation party is a

question of intent. When the intent of the parties does not appear on the face of
the check, it must be ascertained in the light of the surrounding facts and
circumstances. Invariably, the tests applied are the purpose test and the proceeds
test. x x x. And even assuming she was such party, this circumstance is not a
defense to a charge for violation of B.P. 22. What the law punishes is the issuance
itself of a bouncing check and not the purpose for which it was issued or of the
terms and conditions relating to its issuance. The mere act of issuing a worthless
check, whether merely as an accommodation, is covered by B.P. 22. Hence, the
agreement surrounding the issuance of a check is irrelevant to the prosecution and
conviction of the petitioner.
In Meriz v. People of the Philippines, we held:
The Court has consistently declared that the cause or reason for the issuance
of the check is inconsequential in determining criminal culpability under BP 22.
The Court has since said that a "check issued as an evidence of debt, although not
intended for encashment, has the same effect like any other check" and must thus
be held to be "within the contemplation of BP 22." Once a check is presented for
payment, the drawee bank gives it the usual course whether issued in payment of
an obligation or just as a guaranty of an obligation. BP 22 does not appear to
concern itself with what might actually be envisioned by the parties, its primordial
intention being to instead ensure the stability and commercial value of checks as
being virtual substitutes for currency. It is a policy that can easily be eroded if one
has yet to determine the reason for which checks are issued, or the terms and
conditions for their issuance, before an appropriate application of the legislative
enactment can be made. The gravamen of the offense under BP 22 is the act of
making or issuing a worthless check or a check that is dishonored upon
presentment for payment. The act effectively declares the offense to be one of
malum prohibitum. The only valid query then is whether the law has been
breached, i.e., by the mere act of issuing a bad check, without so much regard as
to the criminal intent of the issuer.
Also, in Cruz v. Court of Appeals, we held:
It is now settled that Batas Pambansa Bilang 22 applies even in cases
where dishonored checks are issued merely in the form of a deposit or a
guarantee. The enactment in question does not make any distinction as to whether
the checks within its contemplation are issued in payment of an obligation or
merely to guarantee the said obligation. In accordance with the pertinent rule of
statutory construction, inasmuch as the law has not made any distinction in this
regard, no such distinction can be made by means of interpretation or application.
Furthermore, the history of the enactment of subject statute evinces the definite
legislative intent to make the prohibition all-embracing, without making any
exception from the operation thereof in favor of a guarantee. This intent may be

gathered from the statement of the sponsor of the bill (Cabinet Bill No. 9) which
was enacted later into Batas Pambansa Bilang 22, when it was introduced before
the Batasan Pambansa, that the bill was introduced to discourage the issuance of
bouncing checks, to prevent checks, from becoming useless scraps of paper and
to restore respectability to checks, all without distinction as to the purpose of the
issuance of the checks. The legislative intent as above said is made all the more
clear when it is considered that while the original text of Cabinet Bill No. 9,
supra, had contained a proviso excluding from the coverage of the law a check
issued as a mere guarantee, the final version of the bill as approved and enacted
by the Committee on the Revision of Laws in the Batasan deleted the
abovementioned qualifying proviso deliberately for the purpose of making the
enforcement of the act more effective (Batasan Record, First Regular Session,
December 4, 1978, Volume II, pp. 1035-1036).
Consequently, what are important are the facts that the accused had
deliberately issued the checks in question to cover accounts and that the checks
were dishonored upon presentment regardless of whether or not the accused
merely issued the checks as a guarantee.

Petitioner invokes our ruling in Magno v. Court of Appeals where the accused therein was
acquitted of B.P. Blg. 22 for issuing checks to collateralize an accommodation and not to cover
the receipt of actual account or for value. In Magno, the accused, who was in the process of
putting up a car repair shop, was provided with credit facilities by LS Finance and Management
Corporation (LS Finance) to enable him to lease from MANCOR the needed equipments. As
part of their arrangement, LS Finance required a 30% warranty deposit of the "purchase/lease"
value of the equipments to be transacted upon. Accused then asked the LS Finance Vice
President Joey Gomez to look for a third party who could lend him the equivalent amount of the
warranty deposit as he did not have such amount, however, unknown to the accused, it was
Corazon Teng (Vice President of MANCOR) who advanced the deposit in question on condition
that the same would be paid as a short term loan at 3% interest. The accused subsequently issued
checks to collateralize an accommodation made by Teng amounting to Twenty Nine Thousand
Seven Hundred Pesos (P29,700.00) as warranty deposit. Subsequently, the said checks bounced;
thus the accused was prosecuted and the lower courts convicted him of B.P. Blg. 22. On a
Petition for Review on Certiorari, we however acquitted the accused and held that the "cash out"
made by Teng was not used by the accused who was just paying rental on the equipments. To
charge him for the refund of a "warranty deposit" he did not withdraw, because it was not his

own account and it remained with LS Finance, would be to make him pay an unjust "debt," to
say the least, since he did not actually receive the amount involved. We also held that this is a
scheme whereby Teng as the supplier of the equipment in the name of Mancor, would be able to
sell or lease its goods as in this case, and at the same time privately finance those who
desperately needed petty accommodations as obtaining in said case; that this modus operandi, in
so many instances, victimized unsuspecting businessmen who likewise needed protection from
the law by availing themselves of the deceptively called warranty deposit, not realizing that
they would fall prey to a leasing equipment under the guise of a lease-purchase agreement, when
it was a scheme designed to skim off a business client.

It bears stressing that Magno was decided after a full-blown trial, and the proof needed to
convict the accused was proof beyond reasonable doubt, which was not established in that case.

On the other hand, herein case is still in the preliminary investigation stage which is
merely inquisitorial, and it is often the only means of discovering the persons who may be
reasonably charged with a crime, to enable the fiscal to prepare his complaint or information. It
is not a trial of the case on the merits and has no purpose except that of determining whether a
crime has been committed and whether there is probable cause to believe that the accused is
guilty. It is not the occasion for the full and exhaustive display of the parties evidence; it is for
the presentation of such evidence only as may engender a well-grounded belief that an offense
has been committed and that the accused is probably guilty thereof. We are in accord with the
Justice Secretarys finding that there is reasonable ground to believe that a violation of B.P. Blg.
22 has been committed by petitioner, thus, we refrain from prejudging the applicablity or
inapplicability of Magno in this case.

Petitioner alleges that at the time she issued the subject checks, she has substantial funds in
the bank to cover the value thereof. This is evidentiary in nature which must be presented during

trial more so in the light of the bank certification that there were no sufficient funds to cover the
checks when presented for deposit/payment.

The law itself creates a prima facie presumption of knowledge of insufficiency of funds.
Section 2 of B.P. Blg. 22 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 bank
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.

Such knowledge is legally presumed from the dishonor of the checks for insufficiency of
funds. If not rebutted, it suffices to sustain a conviction.

We also find no merit in petitioners claim that since the Secretary of Justice absolved her
of estafa, she should also be absolved of violation of B.P. Blg. 22, since both offenses arose from
the same subject checks. While deceit and damage are essential elements in estafa, they are not
required in B.P. Blg. 22. As already aforestated, under B.P. Blg. 22, mere issuance of a check
that is dishonored gives rise to the presumption of knowledge on the part of the drawer that he
issued the same without sufficient funds and is hence punishable.

We do not subscribe to petitioners argument that for Aguilars rice procurements from
respondent, Aguilar had made substantial payments to respondent through cashiers checks
totalling P313,255.00; that despite these substantial payments, respondent still wanted to collect

from petitioners subject checks the total amount of P863,110.00; that respondent wanted to
collect from both petitioner and Aguilar for the latters rice procurement. It is during the trial of
this case that evidence may be introduced to prove petitioners contentions. As of now, it has
been established that when the subject checks were deposited, they were all dishonored.

Furthermore, the allegation of petitioner that if the information for B.P. Blg. 22 would be
filed and in the remote event that petitioner would be found guilty thereof, then the trial court
may impose a fine double the amount of the checks, which fine may amount to millions of pesos;
and that this is unjust enrichment on respondents part at the expense of petitioner and Aguilar
deserves scant consideration. Suffice it to state that the fine that may be imposed by the court is
not awarded to the private complainant. Fine is imposed as a penalty and not as payment for a
specific loss or injury.

In fine, the CA did not commit any error in upholding the findings of the Secretary of
Justice that probable cause exists that the crime of violation of B.P. Blg. 22 has been committed
by petitioner.

WHEREFORE, the petition is DENIED. The Decision dated April 26, 2002 and the
Resolution dated July 29, 2002 of the Court of Appeals are hereby AFFIRMED.

Costs against petitioner.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MINITA V. CHICO-NAZARIO
Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

C E R T I F I C AT I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
attestation, it is hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

Penned by Justice Eliezer R. delos Santos, concurred in by Justices Cancio C. Garcia

(now Associate Justice of this Court) and Marina L. Buzon; CA rollo, pp. 155-159.
Id. at 180-182.
Docketed as I.S. No. 97-3205.
CA rollo, pp. 81-82.

G.R. No. 96132, June 26, 1992, 210 SCRA 471.

CA rollo, pp. 93-94; per Rosalina R. Datiles, 2nd Assistant City Prosecutor, Quezon City.
Id. at 17-19; per Secretary Artemio G. Tuquero.
Id. at 20; per Justice Secretary Hernando B. Perez.
Rollo, pp. 24-25.
402 Phil. 833 (2001).
Ang v. Lucero, G.R. No. 143169, January 21, 2005, 449 SCRA 157, 168, citing People of
the Philippines v. Court of Appeals, 361 Phil. 401, 413 (1999).
Ching v. Secretary of Justice, G.R. No. 164317, February 6, 2006, 481 SCRA 609, 629.
Id., citing Nava v. Commission on Audit, 419 Phil 544, 554 (2001).
Ang v. Lucero, supra note 11, citing Microsoft Corporation v. Maxicorp, Inc., G.R. No.
140946,
September 13, 2004, 438 SCRA 224, 236.
People of the Philippines v. Court of Appeals, supra note 11, citing Ledesma v. Court of
Appeals, 344 Phil. 207, 226 (1997).
Drilon v. Court of Appeals, 327 Phil. 916, 927 (1996).
Ngo v. People of the Philippines, G.R. No. 155815, July 14, 2004, 434 SCRA 522, 530531, citing Recuerdo v. People of the Philippines, 443 Phil. 770, 777 (2003); Lozano v.
Martinez, 230 Phil. 406, 421 (1986).
Id.
Id. at 421.
G.R. No. 75954, October 22, 1992, 215 SCRA 79, 82-83.
CA rollo, p. 24.
People of the Philippines v. Nitafan, supra note 20, at 84, citing Que v. People of the
Philippines, G.R. Nos. L-75217-18, September 21, 1987, 154 SCRA 160, 165.
CA rollo, p. 25.
Drilon v. Court of Appeals, supra note 16, at 923.

Id. at 927.
G.R. No. 160893, November 18, 2005, 475 SCRA 476.
Id. at 491-492.
420 Phil. 608 (2001).
Id. at 617.
G.R. No. 108738, June 17, 1994, 233 SCRA 301.
Id. at 308.
Supra note 5.
Tandoc v. Resultas, G.R. Nos. 59241-44, July 5, 1989, 175 SCRA 37, 43, citing People
of the Philippines v. Badilla, 48 Phil. 718, 731 (1926).
Id.
Drilon v. Court of Appeals, supra note 16, at 923.
Ty v. People of the Philippines, G.R. No. 149275, September 27, 2004, 439 SCRA 220,
236, citing Meriz v. People of the Philippines, supra note 28, at 618.
Id., citing Lim v. People of the Philippines, 394 Phil. 844, 852 (2000).
People of the Philippines v. Ching Kuan, 74 Phil. 23, 24 (1942).

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Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 117857

February 2, 2001

LUIS S. WONG, petitioner,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
QUISUMBING, J.:
For review on certiorari is the decision dated October 28, 1994 of the Court of Appeals in C.A. G.R. CR 118561 which
affirmed the decision of the Regional Trial Court of Cebu City, Branch 17, convicting petitioner on three (3) counts of Batas
Pambansa Blg. 22 (the Bouncing Checks Law) violations, and sentencing him to imprisonment of four (4) months for each
count, and to pay private respondent the amounts of P5,500.00, P6,410.00 and P3,375.00, respectively, corresponding to the
value of the checks involved, with the legal rate of interest from the time of filing of the criminal charges, as well as to pay

the costs.1wphi1.nt
The factual antecedents of the case are as follows:
Petitioner Wong was an agent of Limtong Press. Inc. (LPI), a manufacturer of calendars. LPI would print sample calendars,
then give them to agents to present to customers. The agents would get the purchase orders of customers and forward them
to LPI. After printing the calendars, LPI would ship the calendars directly to the customers. Thereafter, the agents would
come around to collect the payments. Petitioner, however, had a history of unremitted collections, which he duly
acknowledged in a confirmation receipt he co-signed with his wife.2 Hence, petitioners customers were required to issue
postdated checks before LPI would accept their purchase orders.
In early December 1985, Wong issued six (6) postdated checks totaling P18,025.00, all dated December 30, 1985 and drawn
payable to the order of LPI, as follows:
(1) Allied Banking Corporation (ABC) Check No. 660143464-C for P6,410.00 (Exh. "B");
(2) ABC Check No. 660143460-C for P540.00 (Exh. "C");
(3) ABC Check No. PA660143451-C for P5,500.00 (Exh. "D");
(4) ABC Check No. PA660143465-C for P1,100.00 (Exh. "E");
(5) ABC Check No. PA660143463-C for P3,375.00 (Exh. "F");
(6) ABC Check No. PA660143452-C for P1,100.00 (Exh. "G").
These checks were initially intended to guarantee the calendar orders of customers who failed to issue post-dated checks.
However, following company policy, LPI refused to accept the checks as guarantees. Instead, the parties agreed to apply the
checks to the payment of petitioners unremitted collections for 1984 amounting to P18,077.07.3 LPI waived the P52.07
difference.
Before the maturity of the checks, petitioner prevailed upon LPI not to deposit the checks and promised to replace them
within 30 days. However, petitioner reneged on his promise. Hence, on June 5, 1986, LPI deposited the checks with Rizal
Commercial Banking Corporation (RCBC). The checks were returned for the reason "account closed." The dishonor of the
checks was evidenced by the RCBC return slip.
On June 20, 1986, complainant through counsel notified the petitioner of the dishonor. Petitioner failed to make
arrangements for payment within five (5) banking days.
On November 6, 1987, petitioner was charged with three (3) counts of violation of B.P. Blg. 224 under three separate
Informations for the three checks amounting to P5,500.00, P3,375.00, and P6,410.00.5
The Information in Criminal Case No. CBU-12055 reads as follows:6
That on or about the 30th day of December, 1985 and for sometime subsequent thereto, in the City of Cebu,

Philippines, and within the jurisdiction of this Honorable Court, the said accused, knowing at the time of
issue of the check she/he does not have sufficient funds in or credit with the drawee bank for the payment of
such check in full upon its presentment, with deliberate intent, with intent of gain and of causing damage, did
then and there issue, make or draw Allied Banking Corporation Check No. 660143451 dated 12-30-85 in the
amount of P5,500.00 payable to Manuel T. Limtong which check was issued in payment of an obligation of
said accused, but when the said check was presented with said bank, the same was dishonored for reason
ACCOUNT CLOSED and despite notice and demands made to redeem or make good said check, said
accused failed and refused, and up to the present time still fails and refuses to do so, to the damage and
prejudice of said Manuel T. Limtong in the amount of P5,500.00 Philippine Currency.
Contrary to law.
Petitioner was similarly charged in Criminal Case No. 12057 for ABC Check No. 660143463 in the amount of P3,375.00,
and in Criminal Case No. 12058 for ABC Check No. 660143464 for P6,410.00. Both cases were raffled to the same trial
court.
Upon arraignment, Wong pleaded not guilty. Trial ensued.
Manuel T. Limtong, general manager of LPI, testified on behalf of the company, Limtong averred that he refused to accept
the personal checks of petitioner since it was against company policy to accept personal checks from agents. Hence, he and
petitioner simply agreed to use the checks to pay petitioners unremitted collections to LPI. According to Limtong, a few
days before maturity of the checks, Wong requested him to defer the deposit of said checks for lack of funds. Wong
promised to replace them within thirty days, but failed to do so. Hence, upon advice of counsel, he deposited the checks
which were subsequently returned on the ground of "account closed."
The version of the defense is that petitioner issued the six (6) checks to guarantee the 1985 calendar bookings of his
customers. According to petitioner, he issued the checks not as payment for any obligation, but to guarantee the orders of his
customers. In fact, the face value of the six (6) postdated checks tallied with the total amount of the calendar orders of the
six (6) customers of the accused, namely, Golden Friendship Supermarket, Inc. (P6,410.00), New Society Rice and Corn
Mill (P5,500.00), Cuesta Enterprises (P540.00), Pelrico Marketing (P1,100.00), New Asia Restaurant P3,375.00), and New
China Restaurant (P1,100.00). Although these customers had already paid their respective orders, petitioner claimed LPI did
not return the said checks to him.
On August 30, 1990, the trial court issued its decision, disposing as follows:7
"Wherefore, premises considered, this Court finds the accused Luis S. Wong GUILTY beyond reasonable
doubt of the offense of Violations of Section 1 of Batas Pambansa Bilang 22 in THREE (3) Counts and is
hereby sentenced to serve an imprisonment of FOUR (4) MONTHS for each count; to pay Private
Complainant Manuel T. Limtong the sums of Five Thousand Five Hundred (P5,500.00) Pesos, Six Thousand
Four Hundred Ten (P6,410.00) Pesos and Three Thousand Three Hundred Seventy-Five (P3,375.00) Pesos
corresponding to the amounts indicated in Allied Banking Checks Nos. 660143451, 66[0]143464 and
660143463 all issued on December 30, 1985 together with the legal rate of interest from the time of the filing
of the criminal charges in Court and pay the costs."8
Petitioner appealed his conviction to the Court of Appeals. On October 28, 1994, it affirmed the trial courts decision in

toto.9
Hence, the present petition.10 Petitioner raises the following questions of law -11
May a complainant successfully prosecute a case under BP 22 --- if there is no more consideration or price or
value ever the binding tie that it is in contracts in general and in negotiable instruments in particular
behind the checks? if even before he deposits the checks, he has ceased to be a holder for value because the
purchase orders (POs) guaranteed by the checks were already paid?
Given the fact that the checks lost their reason for being, as above stated, is it not then the duty of
complainant knowing he is no longer a holder for value to return the checks and not to deposit them ever?
Upon what legal basis then may such a holder deposit them and get paid twice?
Is petitioner, as the drawer of the guarantee checks which lost their reason for being, still bound under BP 22
to maintain his account long after 90 days from maturity of the checks?
May the prosecution apply the prima facie presumption of "knowledge of lack of funds" against the drawer if
the checks were belatedly deposited by the complainant 157 days after maturity, or will it be then necessary
for the prosecution to show actual proof of "lack of funds" during the 90-day term?
Petitioner insists that the checks were issued as guarantees for the 1985 purchase orders (POs) of his customers. He
contends that private respondent is not a "holder for value" considering that the checks were deposited by private respondent
after the customers already paid their orders. Instead of depositing the checks, private respondent should have returned the
checks to him. Petitioner further assails the credibility of complainant considering that his answers to cross-examination
questions included: "I cannot recall, anymore" and "We have no more record."
In his Comment,12 the Solicitor General concedes that the checks might have been initially intended by petitioner to
guarantee payments due from customers, but upon the refusal of LPI to accept said personal checks per company policy, the
parties had agreed that the checks would be used to pay off petitioners unremitted collections. Petitioners contention that
he did not demand the return of the checks because he trusted LPIs good faith is contrary to human nature and sound
business practice, according to the Solicitor General.
The issue as to whether the checks were issued merely as guarantee or for payment of petitioners unremitted collections is a
factual issue involving as it does the credibility of witnesses. Said factual issue has been settled by the trial court and Court
of Appeals. Although initially intended to be used as guarantee for the purchase orders of customers, they found the checks
were eventually used to settle the remaining obligations of petitioner with LPI. Although Manuel Limtong was the sole
witness for the prosecution, his testimony was found sufficient to prove all the elements of the offense charged.13 We find no
cogent reason to depart from findings of both the trial and appellate courts. In cases elevated from the Court of Appeals, our
review is confined to allege errors of law. Its findings of fact are generally conclusive. Absent any showing that the findings
by the respondent court are entirely devoid of any substantiation on record, the same must stand.14 The lack of accounting
between the parties is not the issue in this case. As repeatedly held, this Court is not a trier of facts.15 Moreover, in Llamado
v. Court of Appeals,16 we held that "[t]o determine the reason for which checks are issued, or the terms and conditions for
their issuance, will greatly erode the faith the public reposes in the stability and commercial value of checks as currency
substitutes, and bring about havoc in trade and in banking communities. So what the law punishes is the issuance of a
bouncing check and not the purpose for which it was issued nor the terms and conditions relating to its issuance. The mere

act of issuing a worthless check is malum prohibitum." Nothing herein persuades us to hold otherwise.
The only issue for our resolution now is whether or not the prosecution was able to establish beyond reasonable doubt all the
elements of the offense penalized under B.P. Blg. 22.
There are two (2) ways of violating B.P. Blg. 22: (1) by making or drawing and issuing a check to apply on account or for
value knowing at the time of issue that the check is not sufficiently funded; and (2) by having sufficient funds in or credit
with the drawee bank at the time of issue but failing to keep sufficient funds therein or credit with said bank to cover the full
amount of the check when presented to the drawee bank within a period of ninety (90) days.17
The elements of B.P. Blg. 22 under the first situation, pertinent to the present case, are:18
"(1) The making, drawing and issuance of any check to apply for account or for value;
(2) The knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds
in or credit with the drawee bank for the payment of such check in full upon its presentment; and
(3) The subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor
for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment."
Petitioner contends that the first element does not exist because the checks were not issued to apply for account or for value.
He attempts to distinguish his situation from the usual "cut-and-dried" B.P. 22 case by claiming that the checks were issued
as guarantee and the obligations they were supposed to guarantee were already paid. This flawed argument has no factual
basis, the RTC and CA having both ruled that the checks were in payment for unremitted collections, and not as guarantee.
Likewise, the argument has no legal basis, for what B.P. Blg. 22 punishes is the issuance of a bouncing check and not the
purpose for which it was issued nor the terms and conditions relating to its issuance.19
As to the second element, B.P. Blg. 22 creates a presumption juris tantum that the second element prima facie exists when
the first and third elements of the offense are present.20 Thus, the makers knowledge is presumed from the dishonor of the
check for insufficiency of funds.21
Petitioner avers that since the complainant deposited the checks on June 5, 1986, or 157 days after the December 30, 1985
maturity date, the presumption of knowledge of lack of funds under Section 2 of B.P. Blg. 22 should not apply to him. He
further claims that he should not be expected to keep his bank account active and funded beyond the ninety-day period.
Section 2 of B.P. Blg. 22 provides:
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.
An essential element of the offense is "knowledge" on the part of the maker or drawer of the check of the insufficiency of

his funds in or credit with the bank to cover the check upon its presentment. Since this involves a state of mind difficult to
establish, the statute itself creates a prima facie presumption of such knowledge where payment of the check "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." To mitigate the harshness of the law in its application, the statute provides that such presumption shall not arise
if within five (5) banking days from receipt of the notice of dishonor, the maker or drawer makes arrangements for payment
of the check by the bank or pays the holder the amount of the check.22
Contrary to petitioners assertions, nowhere in said provision does the law require a maker to maintain funds in his bank
account for only 90 days. Rather, the clear import of the law is to establish a prima facie presumption of knowledge of such
insufficiency of funds under the following conditions (1) presentment within 90 days from date of the check, and (2) the
dishonor of the check and failure of the maker to make arrangements for payment in full within 5 banking days after notice
thereof. That the check must be deposited within ninety (90) days is simply one of the conditions for the prima facie
presumption of knowledge of lack of funds to arise. It is not an element of the offense. Neither does it discharge petitioner
from his duty to maintain sufficient funds in the account within a reasonable time thereof. Under Section 186 of the
Negotiable Instruments Law, "a check must be presented for payment within a reasonable time after its issue or the drawer
will be discharged from liability thereon to the extent of the loss caused by the delay." By current banking practice, a check
becomes stale after more than six (6) months,23 or 180 days. Private respondent herein deposited the checks 157 days after
the date of the check. Hence said checks cannot be considered stale. Only the presumption of knowledge of insufficiency of
funds was lost, but such knowledge could still be proven by direct or circumstantial evidence. As found by the trial court,
private respondent did not deposit the checks because of the reassurance of petitioner that he would issue new checks. Upon
his failure to do so, LPI was constrained to deposit the said checks. After the checks were dishonored, petitioner was duly
notified of such fact but failed to make arrangements for full payment within five (5) banking days thereof. There is, on
record, sufficient evidence that petitioner had knowledge of the insufficiency of his funds in or credit with the drawee bank
at the time of issuance of the checks. And despite petitioners insistent plea of innocence, we find no error in the respondent
courts affirmance of his conviction by the trial court for violations of the Bouncing Checks Law.
However, pursuant to the policy guidelines in Administrative Circular No. 12-2000, which took effect on November 21,
2000, the penalty imposed on petitioner should now be modified to a fine of not less than but not more than double the
amount of the checks that were dishonored.
WHEREFORE, the petition is DENIED. Petitioner Luis S. Wong is found liable for violation of Batas Pambansa Blg. 22
but the penalty imposed on him is hereby MODIFIED so that the sentence of imprisonment is deleted. Petitioner is
ORDERED to pay a FINE of (1) P6,750.00, equivalent to double the amount of the check involved in Criminal Case No.
CBU-12057, (2) P12,820.00, equivalent to double the amount of the check involved in Criminal Case No. CBU-12058, and
(3) P11,000.00, equivalent to double the amount of the check involved in Criminal Case No. CBU-12055, with subsidiary
imprisonment24 in case of insolvency to pay the aforesaid fines. Finally, as civil indemnity, petitioner is also ordered to pay
to LPI the face value of said checks totaling P18,025.00 with legal interest thereon from the time of filing the criminal
charges in court, as well as to pay the costs.1wphi1.nt
SO ORDERED.
Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.
Footnotes:

Penned by Associate Justice Alfredo L. Benipayo, concurred in by Justices Ricardo P. Galvez and Eugenio
S. Labitoria.
2

Records, p. 119.

Id. at 130.

Otherwise known as "An Act Penalizing the Making or Drawing and Issuance of a Check without Sufficient
Funds or Credit and for Other Purposes."
5

As to the three (3) remaining checks, petitioner was also charged with violation of B.P. Blg. 22 in the
Municipal Trial Court of Cebu City, Branch 3 in Criminal Cases Nos. 25078-R, 25079-R, and 28440-R. The
MTC convicted petitioner but on appeal, the Regional Trial Court of Cebu City, Branch 14, acquitted him for
lack of proof beyond reasonable doubt.
6

Records, p. 89.

Rollo, pp. 185-199.

Id. at 198-199.

Id. at 88-108.

10

Id. at 11-86.

11

Id. at 17.

12

Id. at 290-321.

13

Tadeo v. People, 300 SCRA 744, 749 (1998).

14

Bunag Jr. vs. Court of Appeals, 211 SCRA 440, 447-448 (1992); Morales vs. Court of Appeals, et. al., 197
SCRA 391, 401 (1991).
15

Aleria v. Velez, 298 SCRA 611, 618 (1998).

16

270 SCRA 423, 431 (1997).

17

Section 1, B.P. Blg. 22.

18

Lim v. People, G.R. No. 130038, September 18, 2000, p. 7.

19

Dichaves v. Apalit, A.M. No. MTJ-00-1274, June 8, 2000, p. 6.

20

Sycip Jr. v. Court of Appeals, G.R. No. 125059, March 17, 2000, p. 8.

21

Vaca v. Court of Appeals, 298 SCRA 657, 661 (1998).

22

Lozano v. Martinez, 146 SCRA 323, 330-331 (1986).

23

Pacheco v. Court of Appeals, G.R. No. 126670, December 2, 1999, p. 9.

24

Lim v. People, G.R. No. 130038, September 18, 2000, p. 11.

The Lawphil Project - Arellano Law Foundation

THIRD DIVISION

SAMSON CHING,

G.R. No. 141181

Petitioner,
Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus -

AUSTRIA-MARTINEZ,
CALLEJO, SR.,
CHICO-NAZARIO, and
NACHURA, JJ.

CLARITA NICDAO and

HON. COURT OF APPEALS,

Promulgated:

Respondents.
April 27, 2007
x-----------------------------------------------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before the Court is a petition for review on certiorari filed by Samson Ching of the
Decision dated November 22, 1999 of the Court of Appeals (CA) in CA-G.R. CR No. 23055.
The assailed decision acquitted respondent Clarita Nicdao of eleven (11) counts of violation of
Batas Pambansa Bilang (BP) 22, otherwise known as The Bouncing Checks Law. The instant
petition pertains and is limited to the civil aspect of the case as it submits that notwithstanding
respondent Nicdaos acquittal, she should be held liable to pay petitioner Ching the amounts of
the dishonored checks in the aggregate sum of P20,950,000.00.

Factual and Procedural Antecedents

On October 21, 1997, petitioner Ching, a Chinese national, instituted criminal complaints for
eleven (11) counts of violation of BP 22 against respondent Nicdao. Consequently, eleven (11)
Informations were filed with the First Municipal Circuit Trial Court (MCTC) of Dinalupihan-

Hermosa, Province of Bataan, which, except as to the amounts and check numbers, uniformly
read as follows:

The undersigned accuses Clarita S. Nicdao of a VIOLATION OF BATAS

PAMBANSA BILANG 22, committed as follows:
That on or about October 06, 1997, at Dinalupihan, Bataan,
Philippines, and within the jurisdiction of this Honorable Court, the said
accused did then and there willfully and unlawfully make or draw and
issue Hermosa Savings & Loan Bank, Inc. Check No. [002524] dated
October 06, 1997 in the amount of [P20,000,000.00] in payment of her
obligation with complainant Samson T.Y. Ching, the said accused
knowing fully well that at the time she issued the said check she did not
have sufficient funds in or credit with the drawee bank for the payment
in full of the said check upon presentment, which check when presented
for payment within ninety (90) days from the date thereof, was
dishonored by the drawee bank for the reason that it was drawn against
insufficient funds and notwithstanding receipt of notice of such dishonor
the said accused failed and refused and still fails and refuses to pay the
value of the said check in the amount of [P20,000,000.00] or to make
arrangement with the drawee bank for the payment in full of the same
within five (5) banking days after receiving the said notice, to the
damage and prejudice of the said Samson T.Y. Ching in the
aforementioned amount of [P20,000,000.00], Philippine Currency.
CONTRARY TO LAW.
Dinalupihan, Bataan, October 21, 1997.
(Sgd.) SAMSON T.Y. CHING
Complainant

The cases were docketed as Criminal Cases Nos. 9433 up to 9443 involving the following
details:

Check No.

Amount

Date

002524
008856
012142
004531
002254
008875
008936
002273
008948
008935
010377

P 20,000,000
Oct. 6, 1997
150,000 Oct. 6, 1997
100,000
Oct. 6, 1997
50,000
Oct. 6, 1997
100,000
Oct. 6, 1997
100,000 Oct. 6, 1997
50,000 Oct. 6, 1997
50,000 Oct. 6, 1997
150,000
Oct. 6, 1997
100,000 Oct. 6, 1997
100,000 Oct. 6, 1997

Private
Complainant
Samson T.Y. Ching
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Reason for
the Dishonor
DAIF*
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At about the same time, fourteen (14) other criminal complaints, also for violation of BP
22, were filed against respondent Nicdao by Emma Nuguid, said to be the common law spouse
of petitioner Ching. Allegedly fourteen (14) checks, amounting to P1,150,000.00, were issued by
respondent Nicdao to Nuguid but were dishonored for lack of sufficient funds. The Informations
were filed with the same MCTC and docketed as Criminal Cases Nos. 9458 up to 9471.

At her arraignment, respondent Nicdao entered the plea of not guilty to all the charges.
A joint trial was then conducted for Criminal Cases Nos. 9433-9443 and 9458-9471.

For the prosecution in Criminal Cases Nos. 9433-9443, petitioner Ching and Imelda
Yandoc, an employee of the Hermosa Savings & Loan Bank, Inc., were presented to prove the
charges against respondent Nicdao. On direct-examination, petitioner Ching preliminarily
identified each of the eleven (11) Hermosa Savings & Loan Bank (HSLB) checks that were
allegedly issued to him by respondent Nicdao amounting to P20,950,000.00. He identified the
signatures appearing on the checks as those of respondent Nicdao. He recognized her signatures
because respondent Nicdao allegedly signed the checks in his presence. When petitioner Ching
presented these checks for payment, they were dishonored by the bank, HSLB, for being DAIF
or drawn against insufficient funds.

Petitioner Ching averred that the checks were issued to him by respondent Nicdao as
s.0ecurity for the loans that she obtained from him. Their transaction began sometime in October
1995 when respondent Nicdao, proprietor/manager of Vignette Superstore, together with her
husband, approached him to borrow money in order for them to settle their financial obligations.
They agreed that respondent Nicdao would leave the checks undated and that she would pay the
loans within one year. However, when petitioner Ching went to see her after the lapse of one
year to ask for payment, respondent Nicdao allegedly said that she had no cash.

Petitioner Ching claimed that he went back to respondent Nicdao several times more but
every time, she would tell him that she had no money. Then in September 1997, respondent
Nicdao allegedly got mad at him for being insistent and challenged him about seeing each other
in court. Because of respondent Nicdao's alleged refusal to pay her obligations, on October 6,
1997, petitioner Ching deposited the checks that she issued to him. As he earlier stated, the
checks were dishonored by the bank for being DAIF. Shortly thereafter, petitioner Ching,
together with Emma Nuguid, wrote a demand letter to respondent Nicdao which, however, went
unheeded. Accordingly, they separately filed the criminal complaints against the latter.

On cross-examination, petitioner Ching claimed that he had been a salesman of the La

Suerte Cigar and Cigarette Manufacturing for almost ten (10) years already. As such, he
delivered the goods and had a warehouse. He received salary and commissions. He could not,
however, state his exact gross income. According to him, it increased every year because of his
business. He asserted that aside from being a salesman, he was also in the business of extending
loans to other people at an interest, which varied depending on the person he was dealing with.

Petitioner Ching confirmed the truthfulness of the allegations contained in the eleven (11)
Informations that he filed against respondent Nicdao. He reiterated that, upon their agreement,
the checks were all signed by respondent Nicdao but she left them undated. Petitioner Ching

admitted that he was the one who wrote the date, October 6, 1997, on those checks when
respondent Nicdao refused to pay him.

With respect to the P20,000,000.00 check (Check No. 002524), petitioner Ching
explained that he wrote the date and amount thereon when, upon his estimation, the money that
he regularly lent to respondent Nicdao beginning October 1995 reached the said sum. He
likewise intimated that prior to 1995, they had another transaction amounting to P1,200,000.00
and, as security therefor, respondent Nicdao similarly issued in his favor checks in varying
amounts of P100,000.00 and P50,000.00. When the said amount was fully paid, petitioner Ching
returned the checks to respondent Nicdao.

Petitioner Ching maintained that the eleven (11) checks subject of Criminal Cases Nos.
9433-9443 pertained to respondent Nicdaos loan transactions with him beginning October
1995. He also mentioned an instance when respondent Nicdaos husband and daughter
approached him at a casino to borrow money from him. He lent them P300,000.00. According
to petitioner Ching, since this amount was also unpaid, he included it in the other amounts that
respondent Nicdao owed to him which totaled P20,000,000.00 and wrote the said amount on one
of respondent Nicdaos blank checks that she delivered to him.

Petitioner Ching explained that from October 1995 up to 1997, he regularly delivered
money to respondent Nicdao, in the amount of P1,000,000.00 until the total amount reached
P20,000,000.00. He did not ask respondent Nicdao to acknowledge receiving these amounts.
Petitioner Ching claimed that he was confident that he would be paid by respondent Nicdao
because he had in his possession her blank checks. On the other hand, the latter allegedly had no
cause to fear that he would fill up the checks with just any amount because they had trust and
confidence in each other. When asked to produce the piece of paper on which he allegedly wrote
the amounts that he lent to respondent Nicdao, petitioner Ching could not present it; he reasoned
that it was not with him at that time.

It was also averred by petitioner Ching that respondent Nicdao confided to him that she
told her daughter Janette, who was married to a foreigner, that her debt to him was only between
P3,000,000.00 and P5,000,000.00. Petitioner Ching claimed that he offered to accompany
respondent Nicdao to her daughter in order that they could apprise her of the amount that she
owed him. Respondent Nicdao refused for fear that it would cause disharmony in the family.
She assured petitioner Ching, however, that he would be paid by her daughter.

Petitioner Ching reiterated that after the lapse of one (1) year from the time respondent
Nicdao issued the checks to him, he went to her several times to collect payment. In all these
instances, she said that she had no cash. Finally, in September 1997, respondent Nicdao
allegedly went to his house and told him that Janette was only willing to pay him between
P3,000,000.00 and P5,000,000.00 because, as far as her daughter was concerned, that was the
only amount borrowed from petitioner Ching. On hearing this, petitioner Ching angrily told
respondent Nicdao that she should not have allowed her debt to reach P20,000,000.00 knowing
that she would not be able to pay the full amount.

Petitioner Ching identified the demand letter that he and Nuguid sent to respondent
Nicdao. He explained that he no longer informed her about depositing her checks on his account
because she already made that statement about seeing him in court. Again, he admitted writing
the date, October 6, 1997, on all these checks.

Another witness presented by the prosecution was Imelda Yandoc, an employee of

HSLB.

On direct-examination, she testified that she worked as a checking account

bookkeeper/teller of the bank. As such, she received the checks that were drawn against the bank
and verified if they were funded. On October 6, 1997, she received several checks issued by
respondent Nicdao. She knew respondent Nicdao because the latter maintained a savings and
checking account with them. Yandoc identified the checks subject of Criminal Cases Nos. 94339443 and affirmed that stamped at the back of each was the annotation DAIF. Further, per the
banks records, as of October 8, 1997, only a balance of P300.00 was left in respondent Nicdaos
checking account and P645.83 in her savings account. On even date, her account with the bank
was considered inactive.

On cross-examination, Yandoc stated anew that respondent Nicdaos checks bounced on

October 7, 1997 for being DAIF and her account was closed the following day, on October 8,
1997. She informed the trial court that there were actually twenty-five (25) checks of respondent
Nicdao that were dishonored at about the same time. The eleven (11) checks were purportedly
issued in favor of petitioner Ching while the other fourteen (14) were purportedly issued in favor
of Nuguid. Yandoc explained that respondent Nicdao or her employee would usually call the
bank to inquire if there was an incoming check to be funded.

For its part, the defense proffered the testimonies of respondent Nicdao, Melanie
Tolentino and Jocelyn Nicdao. On direct-examination, respondent Nicdao stated that she only
dealt with Nuguid. She vehemently denied the allegation that she had borrowed money from
both petitioner Ching and Nuguid in the total amount of P22,950,000.00. Respondent Nicdao
admitted, however, that she had obtained a loan from Nuguid but only for P2,100,000.00 and the
same was already fully paid. As proof of such payment, she presented a Planters Bank demand
draft dated August 13, 1996 in the amount of P1,200,000.00. The annotation at the back of the
said demand draft showed that it was endorsed and negotiated to the account of petitioner
Ching.

In addition, respondent Nicdao also presented and identified several cigarette wrappers at
the back of which appeared computations. She explained that Nuguid went to the grocery store
everyday to collect interest payments. The principal loan was P2,100,000.00 with 12% interest
per day. Nuguid allegedly wrote the payments for the daily interests at the back of the cigarette
wrappers that she gave to respondent Nicdao.

The principal loan amount of P2,100,000.00 was allegedly delivered by Nuguid to

respondent Nicdao in varying amounts of P100,000.00 and P150,000.00. Respondent Nicdao
refuted the averment of petitioner Ching that prior to 1995, they had another transaction.

With respect to the P20,000,000.00 check, respondent Nicdao admitted that the signature
thereon was hers but denied that she issued the same to petitioner Ching. Anent the other ten
(10) checks, she likewise admitted that the signatures thereon were hers while the amounts and
payee thereon were written by either Jocelyn Nicdao or Melanie Tolentino, who were employees
of Vignette Superstore and authorized by her to do so.

Respondent Nicdao clarified that, except for the P20,000,000.00 check, the other ten (10)
checks were handed to Nuguid on different occasions. Nuguid came to the grocery store
everyday to collect the interest payments. Respondent Nicdao said that she purposely left the
checks undated because she would still have to notify Nuguid if she already had the money to
fund the checks.

Respondent Nicdao denied ever confiding to petitioner Ching that she was afraid that her
daughter would get mad if she found out about the amount that she owed him. What allegedly
transpired was that when she already had the money to pay them (presumably referring to
petitioner Ching and Nuguid), she went to them to retrieve her checks. However, petitioner

Ching and Nuguid refused to return the checks claiming that she (respondent Nicdao) still owed
them money. She demanded that they show her the checks in order that she would know the
exact amount of her debt, but they refused. It was at this point that she got angry and dared them
to go to court.

After the said incident, respondent Nicdao was surprised to be notified by HSLB that her
check in the amount of P20,000,000.00 was just presented to the bank for payment. She claimed
that it was only then that she remembered that sometime in 1995, she was informed by her
employee that one of her checks was missing. At that time, she did not let it bother her thinking
that it would eventually surface when presented to the bank.

Respondent Nicdao could not explain how the said check came into petitioner Chings
possession. She explained that she kept her checks in an ordinary cash box together with a
stapler and the cigarette wrappers that contained Nuguids computations. Her saleslady had
access to this box. Respondent Nicdao averred that it was Nuguid who offered to give her a loan
as she would allegedly need money to manage Vignette Superstore. Nuguid used to run the said
store before respondent Nicdaos daughter bought it from Nuguids family, its previous owner.
According to respondent Nicdao, it was Nuguid who regularly delivered the cash to respondent
Nicdao or, if she was not at the grocery store, to her saleslady. Respondent Nicdao denied any
knowledge that the money loaned to her by Nuguid belonged to petitioner Ching.

At the continuation of her direct-examination, respondent Nicdao said that she never
dealt with petitioner Ching because it was Nuguid who went to the grocery store everyday to
collect the interest payments. When shown the P20,000,000.00 check, respondent Nicdao
admitted that the signature thereon was hers but she denied issuing it as a blank check to
petitioner Ching. On the other hand, with respect to the other ten (10) checks, she also admitted
that the signatures thereon were hers and that the amounts thereon were written by either Josie
Nicdao or Melanie Tolentino, her employees whom she authorized to do so. With respect to the

payee, it was purposely left blank allegedly upon instruction of Nuguid who said that she would
use the checks to pay someone else.

On cross-examination, respondent Nicdao explained that Josie Nicdao and Melanie

Tolentino were caretakers of the grocery store and that they manned it when she was not there.
She likewise confirmed that she authorized them to write the amounts on the checks after she had
affixed her signature thereon. She stressed, however, that the P20,000,000.00 check was the one
that was reported to her as lost or missing by her saleslady sometime in 1995. She never
reported the matter to the bank because she was confident that it would just surface when it
would be presented for payment.

Again, respondent Nicdao identified the cigarette wrappers which indicated the daily
payments she had made to Nuguid. The latter allegedly went to the grocery store everyday to
collect the interest payments. Further, the figures at the back of the cigarette wrappers were
written by Nuguid. Respondent Nicdao asserted that she recognized her handwriting because
Nuguid sometimes wrote them in her presence. Respondent Nicdao maintained that she had
already paid Nuguid the amount of P1,200,000.00 as evidenced by the Planters Bank demand
draft which she gave to the latter and which was subsequently negotiated and deposited in
petitioner Chings account. In connection thereto, respondent Nicdao refuted the prosecutions
allegation that the demand draft was payment for a previous transaction that she had with
petitioner Ching. She clarified that the payments that Nuguid collected from her everyday were
only for the interests due. She did not ask Nuguid to make written acknowledgements of her
payments.

Melanie Tolentino was presented to corroborate the testimony of respondent Nicdao. On

direct-examination, Tolentino stated that she worked at the Vignette Superstore and she knew
Nuguid because her employer, respondent Nicdao, used to borrow money from her. She knew
petitioner Ching only by name and that he was the husband of Nuguid.

As an employee of the grocery store, Tolentino stated that she acted as its caretaker and
was entrusted with the custody of respondent Nicdaos personal checks. Tolentino identified her
own handwriting on some of the checks especially with respect to the amounts and figures
written thereon. She said that Nuguid instructed her to leave the space for the payee blank as she
would use the checks to pay someone else. Tolentino added that she could not recall respondent
Nicdao issuing a check to petitioner Ching in the amount of P20,000,000.00. She confirmed that
they lost a check sometime in 1995. When informed about it, respondent Nicdao told her that the
check could have been issued to someone else, and that it would just surface when presented to
the bank.

Tolentino recounted that Nuguid came to the grocery store everyday to collect the interest
payments of the loan. In some instances, upon respondent Nicdaos instruction, Tolentino
handed to Nuguid checks that were already signed by respondent Nicdao. Sometimes, Tolentino
would be the one to write the amount on the checks. Nuguid, in turn, wrote the amounts on
pieces of paper which were kept by respondent Nicdao.

On cross-examination, Tolentino confirmed that she was authorized by respondent

Nicdao to fill up the checks and hand them to Nuguid. The latter came to the grocery store
everyday to collect the interest payments. Tolentino claimed that in 1995, in the course of
chronologically arranging respondent Nicdaos check booklets, she noticed that a check was
missing. Respondent Nicdao told her that perhaps she issued it to someone and that it would just

turn up in the bank. Tolentino was certain that the missing check was the same one that
petitioner Ching presented to the bank for payment in the amount of P20,000,000.00.

Tolentino stated that she left the employ of respondent Nicdao sometime in 1996. After
the checks were dishonored in October 1997, Tolentino got a call from respondent Nicdao. After
she was shown a fax copy thereof, Tolentino confirmed that the P20,000,000.00 check was the
same one that she reported as missing in 1995.

Jocelyn Nicdao also took the witness stand to corroborate the testimony of the other
defense witnesses. On direct-examination, she averred that she was a saleslady at the Vignette
Superstore from August 1994 up to April 1998. She knew Nuguid as well as petitioner Ching.

Jocelyn Nicdao further testified that respondent Nicdao was indebted to Nuguid. Jocelyn
Nicdao used to fill up the checks of respondent Nicdao that had already been signed by her and
give them to Nuguid. The latter came to the grocery store everyday to pick up the interest
payments. Jocelyn Nicdao identified the checks on which she wrote the amounts and, in some
instances, the name of Nuguid as payee. However, most of the time, Nuguid allegedly instructed
her to leave as blank the space for the payee.

Jocelyn Nicdao identified the cigarette wrappers as the documents on which Nuguid
acknowledged receipt of the interest payments. She explained that she was the one who wrote
the minus entries and they represented the daily interest payments received by Nuguid.

On cross-examination, Jocelyn Nicdao stated that she was a distant cousin of respondent
Nicdao. She stopped working for her in 1998 because she wanted to take a rest. Jocelyn Nicdao
reiterated that she handed the checks to Nuguid at the grocery store.

After due trial, on December 8, 1998, the MCTC rendered judgment in Criminal Cases
Nos. 9433-9443 convicting respondent Nicdao of eleven (11) counts of violation of BP 22. The
MCTC gave credence to petitioner Chings testimony that respondent Nicdao borrowed money
from him in the total amount of P20,950,000.00. Petitioner Ching delivered P1,000,000.00 every
month to respondent Nicdao from 1995 up to 1997 until the sum reached P20,000,000.00. The
MCTC also found that subsequent thereto, respondent Nicdao still borrowed money from
petitioner Ching. As security for these loans, respondent Nicdao issued checks to petitioner
Ching. When the latter deposited the checks (eleven in all) on October 6, 1997, they were
dishonored by the bank for being DAIF.

The MCTC explained that the crime of violation of BP 22 has the following elements: (a)
the making, drawing and issuance of any check to apply to account or for value; (b) the
knowledge of the maker, drawer or issuer that at the time of issue he does not have sufficient
funds in or credit with the drawee bank for the payment of such check in full upon its
presentment; and (c) 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.

According to the MCTC, all the foregoing elements are present in the case of respondent
Nicdaos issuance of the checks subject of Criminal Cases Nos. 9433-9443.

On the first

element, respondent Nicdao was found by the MCTC to have made, drawn and issued the
checks. The fact that she did not personally write the payee and date on the checks was not
material considering that under Section 14 of the Negotiable Instruments Law, where the
instrument is wanting in any material particular, the person in possession thereof has a prima
facie authority to complete it by filling up the blanks therein. And a signature on a blank paper
delivered by the person making the signature in order that the paper may be converted into a
negotiable instrument operates as a prima facie authority to fill it up as such for any amount x x

x. Respondent Nicdao admitted that she authorized her employees to provide the details on the
checks after she had signed them.

The MCTC disbelieved respondent Nicdaos claim that the P20,000,000.00 check was the
same one that she lost in 1995. It observed that ordinary prudence would dictate that a lost check
would at least be immediately reported to the bank to prevent its unauthorized endorsement or
negotiation. Respondent Nicdao made no such report to the bank. Even if the said check was
indeed lost, the MCTC faulted respondent Nicdao for being negligent in keeping the checks that
she had already signed in an unsecured box.

The MCTC further ruled that there was no evidence to show that petitioner Ching was
not a holder in due course as to cause it (the MCTC) to believe that the said check was not issued
to him. Respondent Nicdaos admission of indebtedness was sufficient to prove that there was
consideration for the issuance of the checks.

The second element was also found by the MCTC to be present as it held that respondent
Nicdao, as maker, drawer or issuer, had knowledge that at the time of issue she did not have
sufficient funds in or credit with the drawee bank for the payment in full of the checks upon their
presentment.

As to the third element, the MCTC established that the checks were subsequently
dishonored by the drawee bank for being DAIF or drawn against insufficient funds. Stamped
at the back of each check was the annotation DAIF. The bank representative likewise testified
to the fact of dishonor.

Under the foregoing circumstances, the MCTC declared that the conviction of respondent
Nicdao was warranted. It stressed that the mere act of issuing a worthless check was malum
prohibitum; hence, even if the checks were issued in the form of deposit or guarantee, once
dishonored, the same gave rise to the prosecution for and conviction of BP 22. The decretal
portion of the MCTC decision reads:

WHEREFORE, in view of the foregoing, the accused is found guilty of

violating Batas Pambansa Blg. 22 in 11 counts, and is hereby ordered to pay the
private complainant the amount of P20,950,000.00 plus 12% interest per annum
from date of filing of the complaint until the total amount had been paid. The
prayer for moral damages is denied for lack of evidence to prove the same. She is
likewise ordered to suffer imprisonment equivalent to 1 year for every check
issued and which penalty shall be served successively.
SO ORDERED.

Incidentally, on January 11, 1999, the MCTC likewise rendered its judgment in Criminal
Cases Nos. 9458-9471 and convicted respondent Nicdao of the fourteen (14) counts of violation
of BP 22 filed against her by Nuguid.

On appeal, the Regional Trial Court (RTC) of Dinalupihan, Bataan, Branch 5, in separate
Decisions both dated May 10, 1999, affirmed in toto the decisions of the MCTC convicting
respondent Nicdao of eleven (11) and fourteen (14) counts of violation of BP 22 in Criminal
Cases Nos. 9433-9443 and 9458-9471, respectively.

Respondent Nicdao forthwith filed with the CA separate petitions for review of the two
decisions of the RTC. The petition involving the eleven (11) checks purportedly issued to
petitioner Ching was docketed as CA-G.R. CR No. 23055 (assigned to the 13 th Division). On the

other hand, the petition involving the fourteen (14) checks purportedly issued to Nuguid was
docketed as CA-G.R. CR No. 23054 (originally assigned to the 7 th Division but transferred to the
6th Division). The Office of the Solicitor General (OSG) filed its respective comments on the
said petitions. Subsequently, the OSG filed in CA-G.R. CR No. 23055 a motion for its
consolidation with CA-G.R. CR No. 23054. The OSG prayed that CA-G.R. CR No. 23055
pending before the 13th Division be transferred and consolidated with CA-G.R. CR No. 23054 in
accordance with the Revised Internal Rules of the Court of Appeals (RIRCA).

Acting on the motion for consolidation, the CA in CA-G.R. CR No. 23055 issued a
Resolution dated October 19, 1999 advising the OSG to file the motion in CA-G.R. CR No.
23054 as it bore the lowest number. Respondent Nicdao opposed the consolidation of the two
cases. She likewise filed her reply to the comment of the OSG in CA-G.R. CR No. 23055.

On November 22, 1999, the CA (13th Division) rendered the assailed Decision in CA-G.R.
CR No. 23055 acquitting respondent Nicdao of the eleven (11) counts of violation of BP 22 filed
against her by petitioner Ching. The decretal portion of the assailed CA Decision reads:

WHEREFORE, being meritorious, the petition for review is hereby

GRANTED. Accordingly, the decision dated May 10, 1999, of the Regional Trial
Court, 3rd Judicial Region, Branch 5, Bataan, affirming the decision dated
December 8, 1998, of the First Municipal Circuit Trial Court of DinalupihanHermosa, Bataan, convicting petitioner Clarita S. Nicdao in Criminal Cases No.
9433 to 9443 of violation of B.P. Blg. 22 is REVERSED and SET ASIDE and
another judgment rendered ACQUITTING her in all these cases, with costs de
oficio.
SO ORDERED.

On even date, the CA issued an Entry of Judgment declaring that the above decision has
become final and executory and is recorded in the Book of Judgments.

In acquitting respondent Nicdao in CA-G.R. CR No. 23055, the CA made the following
factual findings:

Petitioner [respondent herein] Clarita S. Nicdao, a middle-aged mother

and housekeeper who only finished high school, has a daughter, Janette Boyd,
who is married to a wealthy expatriate.
Complainant [petitioner herein] Samson Ching is a Chinese national, who
claimed he is a salesman of La Suerte Cigar and Cigarette Factory.
Emma Nuguid, complainants live-in partner, is a CPA and formerly
connected with Sycip, Gorres and Velayo. Nuguid used to own a grocery store
now known as the Vignette Superstore. She sold this grocery store, which was
about to be foreclosed, to petitioners daughter, Janette Boyd. Since then,
petitioner began managing said store. However, since petitioner could not always
be at the Vignette Superstore to keep shop, she entrusted to her salesladies,
Melanie Tolentino and Jocelyn Nicdao, pre-signed checks, which were left blank
as to amount and the payee, to cover for any delivery of merchandise sold at the
store. The blank and personal checks were placed in a cash box at Vignette
Superstore and were filled up by said salesladies upon instruction of petitioner as
to amount, payee and date.
Soon thereafter, Emma Nuguid befriended petitioner and offered to lend
money to the latter which could be used in running her newly acquired store.
Nuguid represented to petitioner that as former manager of the Vignette
Superstore, she knew that petitioner would be in need of credit to meet the daily
expenses of running the business, particularly in the daily purchases of
merchandise to be sold at the store. After Emma Nuguid succeeded in befriending
petitioner, Nuguid was able to gain access to the Vignette Superstore where
petitioners blank and pre-signed checks were kept.

In addition, the CA also made the finding that respondent Nicdao borrowed money from
Nuguid in the total amount of P2,100,000.00 secured by twenty-four (24) checks drawn against
respondent Nicdaos account with HSLB. Upon Nuguids instruction, the checks given by

respondent Nicdao as security for the loans were left blank as to the payee and the date. The
loans consisted of (a) P950,000.00 covered by ten (10) checks subject of the criminal complaints
filed by petitioner Ching (CA-G.R. CR No. 23055); and (b) P1,150,000.00 covered by fourteen
(14) checks subject of the criminal complaints filed by Nuguid (CA-G.R. CR No. 23054). The
loans totaled P2,100,000.00 and they were transacted between respondent Nicdao and Nuguid
only. Respondent Nicdao never dealt with petitioner Ching.

Against the foregoing factual findings, the CA declared that, based on the evidence,
respondent Nicdao had already fully paid the loans. In particular, the CA referred to the Planters
Bank demand draft in the amount of P1,200,000.00 which, by his own admission, petitioner
Ching had received. The appellate court debunked petitioner Chings allegation that the said
demand draft was payment for a previous transaction. According to the CA, petitioner Ching
failed to adduce evidence to prove the existence of a previous transaction between him and
respondent Nicdao.

Apart from the demand draft, the CA also stated that respondent Nicdao made interest
payments on a daily basis to Nuguid as evidenced by the computations written at the back of the
cigarette wrappers. Based on these computations, as of July 21, 1997, respondent Nicdao had
made a total of P5,780,000.00 payments to Nuguid for the interests alone. Adding up this
amount and that of the Planters Bank demand draft, the CA placed the payments made by
respondent Nicdao to Nuguid as already amounting to P6,980,000.00 for the principal loan
amount of only P2,100,000.00.

The CA negated petitioner Chings contention that the payments as reflected at the back of
the cigarette wrappers could be applied only to the interests due.

Since the transactions were

not evidenced by any document or writing, the CA ratiocinated that no interests could be
collected because, under Article 1956 of the Civil Code, no interest shall be due unless it has
been expressly stipulated in writing.

The CA gave credence to the testimony of respondent Nicdao that when she had fully paid
her loans to Nuguid, she tried to retrieve her checks. Nuguid, however, refused to return the
checks to respondent Nicdao. Instead, Nuguid and petitioner Ching filled up the said checks to
make it appear that: (a) petitioner Ching was the payee in five checks; (b) the six checks were
payable to cash; (c) Nuguid was the payee in fourteen (14) checks. Petitioner Ching and Nuguid
then put the date October 6, 1997 on all these checks and deposited them the following day. On
October 8, 1997, through a joint demand letter, they informed respondent Nicdao that her checks
were dishonored by HSLB and gave her three days to settle her indebtedness or else face
prosecution for violation of BP 22.

With the finding that respondent Nicdao had fully paid her loan obligations to Nuguid, the
CA declared that she could no longer be held liable for violation of BP 22. It was explained that
to be held liable under BP 22, it must be established, inter alia, that the check was made or
drawn and issued to apply on account or for value. According to the CA, the word account
refers to a pre-existing obligation, while for value means an obligation incurred simultaneously
with the issuance of the check. In the case of respondent Nicdaos checks, the pre-existing
obligations secured by them were already extinguished after full payment had been made by
respondent Nicdao to Nuguid. Obligations are extinguished by, among others, payment. The CA
believed that when petitioner Ching and Nuguid refused to return respondent Nicdaos checks
despite her total payment of P6,980,000.00 for the loans secured by the checks, petitioner Ching
and Nuguid were using BP 22 to coerce respondent Nicdao to pay a debt which she no longer
owed them.

With respect to the P20,000,000.00 check, the CA was not convinced by petitioner Chings
claim that he delivered P1,000,000.00 every month to respondent Nicdao until the amount
reached P20,000,000.00 and, when she refused to pay the same, he filled up the check, which she
earlier delivered to him as security for the loans, by writing thereon the said amount.

In

disbelieving petitioner Ching, the CA pointed out that, contrary to his assertion, he was never

employed by the La Suerte Cigar and Cigarette Manufacturing per the letter of Susan
Resurreccion, Vice-President and Legal Counsel of the said company. Moreover, as admitted by
petitioner Ching, he did not own the house where he and Nuguid lived.

Moreover, the CA characterized as incredible and contrary to human experience that

petitioner Ching would, as he claimed, deliver a total sum of P20,000,000.00 to respondent
Nicdao without any documentary proof thereof, e.g., written acknowledgment that she received
the same. On the other hand, it found plausible respondent Nicdaos version of the story that the
P20,000,000.00 check was the same one that was missing way back in 1995. The CA opined
that this missing check surfaced in the hands of petitioner Ching who, in cahoots with Nuguid,
wrote the amount P20,000,000.00 thereon and deposited it in his account. To the mind of the
CA, the inference that the check was stolen was anchored on competent circumstantial evidence.
Specifically, Nuguid, as previous manager/owner of the grocery store, had access thereto.
Likewise applicable, according to the CA, was the presumption that the person in possession of
the stolen article was presumed to be guilty of taking the stolen article.

The CA emphasized that the P20,000,000.00 check was never delivered by respondent
Nicdao to petitioner Ching. As such, the said check without the details as to the date, amount
and payee, was an incomplete and undelivered instrument when it was stolen and ended up in
petitioner Chings hands. On this point, the CA applied Sections 15 and 16 of the Negotiable
Instruments Law:

SEC. 15. Incomplete instrument not delivered. Where an incomplete

instrument has not been delivered, it will not, if completed and negotiated without
authority, be a valid contract in the hands of any holder, as against any person
whose signature was placed thereon before delivery.
SEC. 16. Delivery; when effectual; when presumed. Every contract on a
negotiable instrument is incomplete and revocable until delivery of the instrument
for the purpose of giving effect thereto. As between immediate parties and as
regards a remote party other than a holder in due course, the delivery, in order to

be effectual, must be made either by or under the authority of the party making,
drawing, accepting or indorsing, as the case may be; and, in such case, the
delivery may be shown to have been conditional, or for a special purpose only,
and not for the purpose of transferring the property. But where the instrument is
in the hands of a holder in due course, a valid delivery thereof by all parties prior
to him so as to make them liable to him is conclusively presumed. And where the
instrument is no longer in the possession of a party whose signature appears
thereon, a valid and intentional delivery by him is presumed until the contrary is
proved.

The CA held that the P20,000,000.00 check was filled up by petitioner Ching without
respondent Nicdaos authority. Further, it was incomplete and undelivered. Hence, petitioner
Ching did not acquire any right or interest therein and could not assert any cause of action
founded on the

stolen checks. Under these circumstances, the CA concluded that respondent could not be held
liable for violation of BP 22.

The Petitioners Case

As mentioned earlier, the instant petition pertains and is limited solely to the civil aspect of
the case as petitioner Ching argues that notwithstanding respondent Nicdaos acquittal of the
eleven (11) counts of violation of BP 22, she should be held liable to pay petitioner Ching the
amounts of the dishonored checks in the aggregate sum of P20,950,000.00.

He urges the Court to review the findings of facts made by the CA as they are allegedly
based on a misapprehension of facts and manifestly erroneous and contradicted by the evidence.
Further, the CAs factual findings are in conflict with those of the RTC and MCTC.

Petitioner Ching vigorously argues that notwithstanding respondent Nicdaos acquittal by

the CA, the Supreme Court has the jurisdiction and authority to resolve and rule on her civil
liability. He invokes Section 1, Rule 111 of the Revised Rules of Court which, prior to its
amendment, provided, in part:

SEC. 1. Institution of criminal and civil actions. When a criminal action

is instituted, the civil action for the recovery of civil liability is impliedly
instituted with the criminal action, unless the offended party waives the civil
action, reserves his right to institute it separately, or institutes the civil action prior
to the criminal action.
Such civil action includes the recovery of indemnity under the Revised
Penal Code, and damages under Articles 32, 33, 34 and 2176 of the Civil Code of
the Philippines arising from the same act or omission of the accused. x x x

Supreme Court Circular No. 57-97 dated September 16, 1997 is also cited as it provides
in part:

1. The criminal action for violation of Batas Pambansa Blg. 22 shall be

deemed to necessarily include the corresponding civil action, and no reservation
to file such civil action separately shall be allowed or recognized. x x x

Petitioner Ching theorizes that, under Section 1, Rule 111 of the Revised Rules of Court,
the civil action for the recovery of damages under Articles 32, 33, 34, and 2176 arising from the
same act or omission of the accused is impliedly instituted with the criminal action. Moreover,
under the above-quoted Circular, the criminal action for violation of BP 22 necessarily includes
the corresponding civil action, which is the recovery of the amount of the dishonored check
representing the civil obligation of the drawer to the payee.

In seeking to enforce the alleged civil liability of respondent Nicdao, petitioner Ching
maintains that she had loan obligations to him totaling P20,950,000.00. The existence of the
same is allegedly established by his testimony before the MCTC. Also, he asks the Court to take
judicial notice that for a monetary loan secured by a check, the check itself is the evidence of
indebtedness.

He insists that, contrary to her protestation, respondent Nicdao also transacted with him,
not only with Nuguid. Petitioner Ching pointed out that during respondent Nicdaos testimony,
she referred to her creditors in plural form, e.g. [I] told them, most checks that I issued I will
inform them if I have money. Even respondent Nicdaos employees allegedly knew him; they
testified that Nuguid instructed them at times to leave as blank the payee on the checks as they
would be paid to someone else, who turned out to be petitioner Ching.

It was allegedly erroneous for the CA to hold that he had no capacity to lend
P20,950,000.00 to respondent Nicdao. Petitioner Ching clarified that what he meant when he
testified before the MCTC was that he was engaged in dealership with La Suerte Cigar and
Cigarette Manufacturing, and not merely its sales agent. He stresses that he owns a warehouse
and is also in the business of lending money. Further, the CAs reasoning that he could not
possibly have lent P20,950,000.00 to respondent Nicdao since petitioner Ching and Nuguid did
not own the house where they live, is allegedly non sequitur.

Petitioner Ching maintains that, contrary to the CAs finding, the Planters Bank demand
draft for P1,200,000.00 was in payment for respondent Nicdaos previous loan transaction with
him. Apart from the P20,000,000.00 check, the other ten (10) checks (totaling P950,000.00)
were allegedly issued by respondent Nicdao to petitioner Ching as security for the loans that she
obtained from him from 1995 to 1997. The existence of another loan obligation prior to the said
period was allegedly established by the testimony of respondent Nicdaos own witness, Jocelyn
Nicdao, who testified that when she started working in Vignette Superstore in 1994, she noticed
that respondent Nicdao was already indebted to Nuguid.

Petitioner Ching also takes exception to the CAs ruling that the payments made by
respondent Nicdao as reflected on the computations at the back of the cigarette wrappers were
for both the principal loan and interests. He insists that they were for the interests alone. Even
respondent Nicdaos testimony allegedly showed that they were daily interest payments.
Petitioner Ching further avers that the interest payments totaling P5,780,000.00 can only mean
that, contrary to respondent Nicdaos claim, her loan obligations amounted to much more than
P2,100,000.00. Further, she is allegedly estopped from questioning the interests because she
willingly paid the same.

Petitioner Ching also harps on respondent Nicdaos silence when she received his and
Nuguids demand letter to her. Through the said letter, they notified her that the twenty-five (25)

checks valued at P22,100,000.00 were dishonored by the HSLB, and that she had three days to
settle her ndebtedness with them, otherwise, face prosecution. Respondent Nicdaos silence, i.e.,
her failure to deny or protest the same by way of reply, vis--vis the demand letter, allegedly
constitutes an admission of the statements contained therein.

On the other hand, the MCTCs decision, as affirmed by the RTC, is allegedly based on
the evidence on record; it has been established that the checks were respondent Nicdaos
personal checks, that the signatures thereon were hers and that she had issued them to petitioner
Ching. With respect to the P20,000,000.00 check, petitioner Ching assails the CAs ruling that it
was stolen and was never delivered or issued by respondent Nicdao to him. The issue of the said
check being stolen was allegedly not raised during trial.

Further, her failure to report the

alleged theft to the bank to stop payment of the said lost or missing check is allegedly contrary to
human experience. Petitioner Ching describes respondent Nicdaos defense of stolen or lost
check as incredible and, therefore, false.

Aside from the foregoing substantive issues that he raised, petitioner Ching also faults the
CA for not acting and ordering the consolidation of CA-G.R. CR No. 23055 with CA-G.R. CR
No. 23054. He informs the Court that latter case is still pending with the CA.

In fine, it is petitioner Chings view that the CA gravely erred in disregarding the findings
of the MCTC, as affirmed by the RTC, and submits that there is more than sufficient
preponderant evidence to hold respondent Nicdao civilly liable to him in the amount of
P20,950,000.00. He thus prays that the Court direct respondent Nicdao to pay him the said
amount plus 12% interest per annum computed from the date of written demand until the total
amount is fully paid.

The Respondents Counter-Arguments

Respondent Nicdao urges the Court to deny the petition. She posits preliminarily that it
is barred under Section 2(b), Rule 111 of the Revised Rules of Court which states:

SEC. 2. Institution of separate of civil action. - Except in the cases

provided for in Section 3 hereof, after the criminal action has been commenced,
the civil action which has been reserved cannot be instituted until final judgment
in the criminal action.
xxxx
(b) Extinction of the penal action does not carry with it extinction of the
civil, unless the extinction proceeds from a declaration in a final judgment that the
fact from which the civil might arise did not exist.

According to respondent Nicdao, the assailed CA decision has already made a finding to
the effect that the fact upon which her civil liability might arise did not exist. She refers to the
ruling of the CA that the P20,000,000.00 check was stolen; hence, petitioner Ching did not
acquire any right or interest over the said check and could not assert any cause of action founded
on the said check. Consequently, the CA held that respondent Nicdao had no obligation to make
good the stolen check and cannot be held liable for violation of BP 22. She also refers to the
CAs pronouncement relative to the ten (10) other checks that they were not issued to apply on
account or for value, considering that the loan obligations secured by these checks had already
been extinguished by her full payment thereof.

To respondent Nicdaos mind, these pronouncements are equivalent to a finding that the
facts upon which her civil liability may arise do not exist.

The instant petition, which seeks to

enforce her civil liability based on the eleven (11) checks, is thus allegedly already barred by the
final and executory decision acquitting her.

In any case, respondent Nicdao contends that the CA did not commit serious
misapprehension of facts when it found that the P20,000,000.00 check was a stolen check and
that she never made any transaction with petitioner Ching. Moreover, the other ten (10) checks
were not issued to apply on account or for value. These findings are allegedly supported by the
evidence on record which consisted of the respective testimonies of the defense witnesses to the
effect that: respondent Nicdao had the practice of leaving pre-signed checks placed inside an
unsecured cash box in the Vignette Superstore; the salesladies were given the authority to fill up
the said checks as to the amount, payee and date; Nuguid beguiled respondent Nicdao to obtain
loans from her; as security for the loans, respondent Nicdao issued checks to Nuguid; when the
salesladies gave the checks to Nuguid, she instructed them to leave blank the payee and date;
Nuguid had access to the grocery store; in 1995, one of the salesladies reported that a check was
missing; in 1997, when she had fully paid her loans to Nuguid, respondent Nicdao tried to
retrieve her checks but Nuguid and petitioner Ching falsely told her that she still owed them
money; they then maliciously filled up the checks making it appear that petitioner Ching was the
payee in the five checks and the six others were payable to cash; and knowing fully well that
these checks were not funded because respondent Nicdao already fully paid her loans, petitioner
Ching and Nuguid deposited the checks and caused them to be dishonored by HSLB.

It is pointed out by respondent Nicdao that her testimony (that the P20,000,000.00 check
was the same one that she lost sometime in 1995) was corroborated by the respective testimonies
of her employees. Another indication that it was stolen was the fact that among all the checks
which ended up in the hands of petitioner Ching and Nuguid, only the P20,000,000.00 check was
fully typewritten; the rest were invariably handwritten as to the amounts, payee and date.

Respondent Nicdao defends the CAs conclusion that the P20,000,000.00 check was stolen
on the ground that an appeal in a criminal case throws open the whole case to the appellate
courts scrutiny. In any event, she maintains that she had been consistent in her theory of defense
and merely relied on the disputable presumption that the person in possession of a stolen article
is presumed to be the author of the theft.

Considering that it was stolen, respondent Nicdao argues, the P20,000,000.00 check was
an incomplete and undelivered instrument in the hands of petitioner Ching and he did not acquire
any right or interest therein. Further, he cannot assert any cause of action founded on the said
stolen check. Accordingly, petitioner Chings attempt to collect payment on the said check
through the instant petition must fail.

Respondent Nicdao describes as downright incredible petitioner Chings testimony that she
owed him a total sum of P20,950,000.00 without any documentary proof of the loan
transactions. She submits that it is contrary to human experience for loan transactions involving
such huge amounts of money to be devoid of any documentary proof. In relation thereto,
respondent Nicdao underscores that petitioner Ching lied about being employed as a salesman of
La Suerte Cigar and Cigarette Manufacturing. It is underscored that he has not adequately
shown that he possessed the financial capacity to lend such a huge amount to respondent Nicdao
as he so claimed.

Neither could she be held liable for the ten (10) other checks (in the total amount of
P950,000,000.00) because as respondent Nicdao asseverates, she merely issued them to Nuguid
as security for her loans obtained from the latter beginning October 1995 up to 1997. As
evidenced by the Planters Bank demand draft in the amount of P1,200,000.00, she already made
payment in 1996. The said demand draft was negotiated to petitioner Chings account and he
admitted receipt thereof. Respondent Nicdao belies his claim that the demand draft was payment

for a prior existing obligation. She asserts that petitioner Ching was unable to present evidence
of such a previous transaction.

In addition to the Planters Bank demand draft, respondent Nicdao insists that petitioner
Ching received, through Nuguid, cash payments as evidenced by the computations written at the
back of the cigarette wrappers. Nuguid went to the Vignette Superstore everyday to collect these
payments. The other defense witnesses corroborated this fact. Petitioner Ching allegedly never
disputed the accuracy of the accounts appearing on these cigarette wrappers; nor did he dispute
their authenticity and accuracy.

Based on the foregoing evidence, the CA allegedly correctly held that, computing the
amount of the Planters Bank demand draft (P1,200,000.00) and those reflected at the back of the
cigarette wrappers (P5,780,000.00), respondent Nicdao had already paid petitioner Ching and
Nuguid a total sum of P6,980,000.00 for her loan obligations totaling only P950,000.00, as
secured by the ten (10) HSLB checks excluding the stolen P20,000,000.00 check.

Respondent Nicdao rebuts petitioner Chings argument (that the daily payments were
applied to the interests), and claims that this is illegal. Petitioner Ching cannot insist that the
daily payments she made applied only to the interests on the loan obligations, considering that
there is admittedly no document evidencing these loans, hence, no written stipulation for the
payment of interests thereon. On this point, she invokes Article 1956 of the Civil Code, which
proscribes the collection of interest payments unless expressly stipulated in writing.

Respondent Nicdao emphasizes that the ten (10) other checks that she issued to Nuguid as
security for her loans had already been discharged upon her full payment thereof. It is her belief
that these checks can no longer be used to coerce her to pay a debt that she does not owe.

On the CAs failure to consolidate CA-G.R. CR No. 23055 and CA-G.R. CR No. 23054,
respondent Nicdao proffers the explanation that under the RIRCA, consolidation of the cases is
not mandatory. In fine, respondent Nicdao urges the Court to deny the petition as it failed to
discharge the burden of proving her civil liability with the required preponderance of evidence.
Moreover, the CAs acquittal of respondent Nicdao is premised on the finding that, apart from the
stolen check, the ten (10) other checks were not made to apply to a valid, due and demandable
obligation. This, in effect, is a categorical ruling that the fact from which the civil liability of
respondent Nicdao may arise does not exist.

The Courts Rulings

The petition is denied for lack of merit.

Notwithstanding respondent Nicdaos

acquittal, petitioner Ching is entitled
to appeal the civil aspect of the case
within the reglementary period

It is axiomatic that every person criminally liable for a felony is also civilly liable.
Under the pertinent provision of the Revised Rules of Court, the civil action is generally
impliedly instituted with the criminal action. At the time of petitioner Chings filing of the

Informations against respondent Nicdao, Section 1, Rule 111 of the Revised Rules of Court,
quoted earlier, provided in part:

SEC. 1. Institution of criminal and civil actions. When a criminal action

is instituted, the civil action for the recovery of civil liability is impliedly
instituted with the criminal action, unless the offended party waives the civil
action, reserves his right to institute it separately, or institutes the civil action prior
to the criminal action.
Such civil action includes the recovery of indemnity under the Revised
Penal Code, and damages under Articles 32, 33, 34 and 2176 of the Civil Code of
the Philippines arising from the same act or omission of the accused.
xxxx

As a corollary to the above rule, an acquittal does not necessarily carry with it the
extinguishment of the civil liability of the accused. Section 2(b) of the same Rule, also quoted
earlier, provided in part:

(b) Extinction of the penal action does not carry with it extinction of the
civil, unless the extinction proceeds from a declaration in a final judgment that the
fact from which the civil might arise did not exist.

It is also relevant to mention that judgments of acquittal are required to state whether the
evidence of the prosecution absolutely failed to prove the guilt of the accused or merely failed to
prove his guilt beyond reasonable doubt. In either case, the judgment shall determine if the act
or omission from which the civil liability might arise did not exist.

In Sapiera v. Court of Appeals, the Court enunciated that the civil liability is not
extinguished by acquittal: (a) where the acquittal is based on reasonable doubt; (b) where the
court expressly declares that the liability of the accused is not criminal but only civil in nature;
and (c) where the civil liability is not derived from or based on the criminal act of which the
accused is acquitted. Thus, under Article 29 of the Civil Code

ART. 29. When the accused in a criminal prosecution is acquitted on the

ground that his guilt has not been proved beyond reasonable doubt, a civil action
for damages for the same act or omission may be instituted. Such action requires
only a preponderance of evidence. Upon motion of the defendant, the court may
require the plaintiff to file a bond to answer for damages in case the complaint
should be found to be malicious.
If in a criminal case the judgment of acquittal is based upon reasonable doubt,
the court shall so declare. In the absence of any declaration to that effect, it may
be inferred from the text of the decision whether or not the acquittal is due to that
ground.

The Court likewise expounded in Salazar v. People the consequences of an acquittal on

the civil aspect in this wise:

The acquittal of the accused does not prevent a judgment against him on the
civil aspect of the criminal case where: (a) the acquittal is based on reasonable
doubt as only preponderance of evidence is required; (b) the court declared that
the liability of the accused is only civil; (c) the civil liability of the accused does
not arise from or is not based upon the crime of which the accused is acquitted.
Moreover, the civil action based on the delict is extinguished if there is a finding
in the final judgment in the criminal action that the act or omission from which
the civil liability may arise did not exist or where the accused did not commit the
act or omission imputed to him.
If the accused is acquitted on reasonable doubt but the court renders judgment
on the civil aspect of the criminal case, the prosecution cannot appeal from the
judgment of acquittal as it would place the accused in double jeopardy. However,

the aggrieved party, the offended party or the accused or both may appeal from
the judgment on the civil aspect of the case within the period therefor.

From the foregoing, petitioner Ching correctly argued that he, as the offended party, may
appeal the civil aspect of the case notwithstanding respondent Nicdaos acquittal by the CA. The
civil action was impliedly instituted with the criminal action since he did not reserve his right to
institute it separately nor did he institute the civil action prior to the criminal action.

Following the long recognized rule that the appeal period accorded to the accused
should also be available to the offended party who seeks redress of the civil aspect of the
decision, the period to appeal granted to petitioner Ching is the same as that granted to the
accused. With petitioner Chings timely filing of the instant petition for review of the civil
aspect of the CAs decision, the Court thus has the jurisdiction and authority to determine the
civil liability of respondent Nicdao notwithstanding her acquittal.

In order for the petition to prosper, however, it must establish that the judgment of the CA
acquitting respondent Nicdao falls under any of the three categories enumerated in Salazar and
Sapiera, to wit:

(a) where the acquittal is based on reasonable doubt as only preponderance of

evidence is required;
(b) where the court declared that the liability of the accused is only civil; and
(c) where the civil liability of the accused does not arise from or is not based
upon the crime of which the accused is acquitted.

Salazar also enunciated that the civil action based on the delict is extinguished if there is
a finding in the final judgment in the criminal action that the act or omission from which the civil

liability may arise did not exist or where the accused did not commit the act or omission imputed
to him.

For reasons that will be discussed shortly, the Court holds that respondent Nicdao cannot
be held civilly liable to petitioner Ching.

The acquittal of respondent Nicdao

likewise effectively extinguished her
civil liability

A painstaking review of the case leads to the conclusion that respondent Nicdaos acquittal
likewise carried with it the extinction of the action to enforce her civil liability. There is simply
no basis to hold respondent Nicdao civilly liable to petitioner Ching.

First, the CAs acquittal of respondent Nicdao is not merely based on reasonable doubt.
Rather, it is based on the finding that she did not commit the act penalized under BP 22. In
particular, the CA found that the P20,000,000.00 check was a stolen check which was never
issued nor delivered by respondent Nicdao to petitioner Ching. As such, according to the CA,
petitioner Ching did not acquire any right or interest over Check No. 002524 and cannot assert
any cause of action founded on said check, and that respondent Nicdao has no obligation to
make good the stolen check and cannot, therefore, be held liable for violation of B.P. Blg. 22.

With respect to the ten (10) other checks, the CA established that the loans secured by
these checks had already been extinguished after full payment had been made by respondent
Nicdao. In this connection, the second element for the crime under BP 22, i.e., that the check is
made or drawn and issued to apply on account or for value, is not present.

Second, in acquitting respondent Nicdao, the CA did not adjudge her to be civilly liable to
petitioner Ching. In fact, the CA explicitly stated that she had already fully paid her obligations.
The CA computed the payments made by respondent Nicdao vis--vis her loan obligations in this
manner:

Clearly, adding the payments recorded at the back of the cigarette cartons
by Emma Nuguid in her own handwriting totaling P5,780,000.00 and the
P1,200,000.00 demand draft received by Emma Nuguid, it would appear that
petitioner [respondent herein] had already made payments in the total amount of
P6,980,000.00 for her loan obligation of only P2,100,000.00 (P950,000.00 in the
case at bar and P1,150,000.00 in CA-G.R. CR No. 23054).

On the other hand, its finding relative to the P20,000,000.00 check that it was a stolen
check necessarily absolved respondent Nicdao of any civil liability thereon as well.

Third, while petitioner Ching attempts to show that respondent Nicdaos liability did not
arise from or was not based upon the criminal act of which she was acquitted (ex delicto) but
from her loan obligations to him (ex contractu), however, petitioner Ching miserably failed to
prove by preponderant evidence the existence of these unpaid loan obligations. Significantly, it
can be inferred from the following findings of the CA in its decision acquitting respondent
Nicdao that the act or omission from which her civil liability may arise did not exist. On the
P20,000,000.00 check, the CA found as follows:

True, indeed, the missing pre-signed and undated check no. 002524
surfaced in the possession of complainant Ching who, in cahoots with his
paramour Emma Nuguid, filled up the blank check with his name as payee and in
the fantastic amount of P20,000,000.00, dated it October 6, 1997, and presented it
to the bank on October 7, 1997, along with the other checks, for payment.
Therefore, the inference that the check was stolen is anchored on competent
circumstantial evidence. The fact already established is that Emma Nuguid ,
previous owner of the store, had access to said store. Moreover, the possession of
a thing that was stolen , absent a credible reason, as in this case, gives rise to the
presumption that the person in possession of the stolen article is presumed to be
guilty of taking the stolen article (People v. Zafra, 237 SCRA 664).
As previously shown, at the time check no. 002524 was stolen, the said
check was blank in its material aspect (as to the name of payee, the amount of the
check, and the date of the check), but was already pre-signed by petitioner. In
fact, complainant Ching himself admitted that check no. 002524 in his possession
was a blank check (TSN, Jan. 7, 1998, pp. 24-27, Annex J, Petition).
Moreover, since it has been established that check no. 002524 had been
missing since 1995 (TSN, Sept. 9, 1998, pp. 14-15, Annex DD, Petition; TSN,
Sept. 10, 1998, pp. 43-46, Annex EE, Petition), it is
abundantly clear that said
check was never delivered to complainant Ching. Check no. 002524 was an
incomplete and undelivered instrument when it was stolen and ended up in the
hands of complainant Ching. Sections 15 and 16 of the Negotiable Instruments
Law provide:
xxxx
In the case of check no. 002524, it is admitted by complainant Ching that
said check in his possession was a blank check and was subsequently completed
by him alone without authority from petitioner. Inasmuch as check no. 002524
was incomplete and undelivered in the hands of complainant Ching, he did not
acquire any right or interest therein and cannot, therefore, assert any cause of
action founded on said stolen check (Development Bank of the Philippines v.
Sima We, 219 SCRA 736, 740).
It goes without saying that since complainant Ching did not acquire any
right or interest over check no. 002524 and cannot assert any cause of action
founded on said check, petitioner has no obligation to make good the stolen check
and cannot, therefore, be held liable for violation of B.P. Blg. 22.

Anent the other ten (10) checks, the CA made the following findings:

Evidence sufficiently shows that the loans secured by the ten (10) checks
involved in the cases subject of this petition had already been paid. It is not
controverted that petitioner gave Emma Nuguid a demand draft valued at
P1,200,000 to pay for the loans guaranteed by said checks and other checks issued
to her. Samson Ching admitted having received the demand draft which he
deposited in his bank account. However, complainant Samson Ching claimed that
the said demand draft represents payment for a previous obligation incurred by
petitioner. However, complainant Ching failed to adduce any evidence to prove
the existence of the alleged obligation of the petitioner prior to those secured by
the subject checks.
Apart from the payment to Emma Nuguid through said demand draft, it is
also not disputed that petitioner made cash payments to Emma Nuguid who
collected the payments almost daily at the Vignette Superstore. As of July 21,
1997, Emma Nuguid collected cash payments amounting to approximately
P5,780,000.00. All of these cash payments were recorded at the back of cigarette
cartons by Emma Nuguid in her own handwriting, the authenticity and accuracy
of which were never denied by either complainant Ching or Emma Nuguid.
Clearly, adding the payments recorded at the back of the cigarette cartons
by Emma Nuguid in her own handwriting totaling P5,780,000.00 and the
P1,200,000.00 demand draft received by Emma Nuguid, it would appear that
petitioner had already made payments in the total amount of P6,980,000.00 for
her loan in the total amount of P6,980,000.00 for her loan obligation of only
P2,100,000.00 (P950,000.00 in the case at bar and P1,150,000.00 in CA-G.R. CR
No. 23054).

Generally checks may constitute evidence of indebtedness. However, in view of the CAs
findings relating to the eleven (11) checks - that the P20,000,000.00 was a stolen check and the
obligations secured by the other ten (10) checks had already been fully paid by respondent
Nicdao they can no longer be given credence to establish respondent Nicdaos civil liability to
petitioner Ching. Such civil liability, therefore, must be established by preponderant evidence
other than the discredited checks.

After a careful examination of the records of the case, the Court holds that the existence of
respondent Nicdaos civil liability to petitioner Ching in the amount of P20,950,000.00
representing her unpaid obligations to the latter has not been sufficiently established by
preponderant evidence. Petitioner Ching mainly relies on his testimony before the MCTC to
establish the existence of these unpaid obligations. In gist, he testified that from October 1995
up to 1997, respondent Nicdao obtained loans from him in the total amount of P20,950,000.00.
As security for her obligations, she issued eleven (11) checks which were invariably blank as to
the date, amounts and payee. When respondent Nicdao allegedly refused to pay her obligations
despite his due demand, petitioner filled up the checks in his possession with the corresponding
amounts and date and deposited them in his account. They were subsequently dishonored by the
HSLB for being DAIF and petitioner Ching accordingly filed the criminal complaints against
respondent Nicdao for violation of BP 22.

It is a basic rule in evidence that the burden of proof lies on the party who makes the
allegations Et incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum
negantis probatio nulla sit (The proof lies upon him who affirms, not upon him who denies;
since, by the nature of things, he who denies a fact cannot produce any proof). In civil cases, the
party having the burden of proof must establish his case by a preponderance of evidence.
Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either
side and is usually considered to be synonymous with the term greater weight of evidence or
greater weight of the credible evidence. Preponderance of evidence is a phrase which, in the
last analysis, means probability of the truth. It is evidence which is more convincing to the court
as worthy of belief than that which is offered in opposition thereto. Section 1, Rule 133 of the
Revised Rules of Court offers the guidelines in determining preponderance of evidence:

SEC. 1. Preponderance of evidence, how determined. In civil cases, the

party having the burden of proof must establish his case by a preponderance of
evidence. In determining where the preponderance or superior weight of evidence
on the issues involved lies, the court may consider all the facts and circumstances
of the case, the witnesses manner of testifying, their intelligence, their means and
opportunity of knowing the facts to which they are testifying, the nature of the

facts to which they testify, the probability or improbability of their testimony,

their interest or want of interest, and also their personal credibility so far as the
same may legitimately appear upon the trial. The court may also consider the
number of witnesses, though the preponderance is not necessarily with the greater
number.

Unfortunately, petitioner Chings testimony alone does not constitute preponderant

evidence to establish respondent Nicdaos civil liability to him amounting to P20,950,000.00.
Apart from the discredited checks, he failed to adduce any other documentary evidence to prove
that respondent Nicdao still has unpaid obligations to him in the said amount. Bare allegations,
unsubstantiated by evidence, are not equivalent to proof under our Rules.

In contrast, respondent Nicdaos defense consisted in, among others, her allegation that she
had already paid her obligations to petitioner Ching through Nuguid. In support thereof, she
presented the Planters Bank demand draft for P1,200,000.00. The said demand draft was
negotiated to petitioner Chings account and he admitted receipt of the value thereof. Petitioner
Ching tried to controvert this by claiming that it was payment for a previous transaction between
him and respondent Nicdao. However, other than his self-serving claim, petitioner Ching did not
proffer any documentary evidence to prove the existence of the said previous transaction.
Considering that the Planters Bank demand draft was dated August 13, 1996, it is logical to
conclude that, absent any evidence to the contrary, it formed part of respondent Nicdaos
payment to petitioner Ching on account of the loan obligations that she obtained from him since
October 1995.

Additionally, respondent Nicdao submitted as evidence the cigarette wrappers at the back
of which were written the computations of the daily payments that she had made to Nuguid. The
fact of the daily payments was corroborated by the other witnesses for the defense, namely,
Jocelyn Nicdao and Tolentino. As found by the CA, based on these computations, respondent

Nicdao had made a total payment of P5,780,000.00 to Nuguid as of July 21, 1997. Again, the
payments made, as reflected at the back of these cigarette wrappers, were not disputed by
petitioner Ching. Hence, these payments as well as the amount of the Planters Bank demand
draft establish that respondent Nicdao already paid the total amount of P6,980,000.00 to Nuguid
and petitioner Ching.

The Court agrees with the CA that the daily payments made by respondent Nicdao
amounting to P5,780,000.00 cannot be considered as interest payments only. Even respondent
Nicdao testified that the daily payments that she made to Nuguid were for the interests due.
However, as correctly ruled by the CA, no interests could be properly collected in the loan
transactions between petitioner Ching and respondent Nicdao because there was no stipulation
therefor in writing. To reiterate, under Article 1956 of the Civil Code, no interest shall be due
unless it has been expressly stipulated in writing.

Neither could respondent Nicdao be considered to be estopped from denying the validity
of these interests. Estoppel cannot give validity to an act that is prohibited by law or one that is
against public policy. Clearly, the collection of interests without any stipulation therefor in
writing is prohibited by law. Consequently, the daily payments made by respondent Nicdao
amounting to P5,780,000.00 were properly considered by the CA as applying to the principal
amount of her loan obligations.

With respect to the P20,000,000.00 check, the defense of respondent Nicdao that it was
stolen and that she never issued or delivered the same to petitioner Ching was corroborated by
the other defense witnesses, namely, Tolentino and Jocelyn Nicdao.

All told, as between petitioner Ching and respondent Nicdao, the requisite quantum of
evidence - preponderance of evidence - indubitably lies with respondent Nicdao. As earlier

intimated, she cannot be held civilly liable to petitioner Ching for her acquittal; under the
circumstances which have just been discussed lengthily, such acquittal carried with it the
extinction of her civil liability as well.

The CA committed no reversible error

in not consolidating CA-G.R. CR No.
23055 and CA-G.R. CR No. 23054

During the pendency of CA-G.R. CR No. 23055 and CA-G.R. CR No. 23054 in the CA,
the pertinent provision of the RIRCA on consolidation of cases provided:

SEC. 7. Consolidation of Cases. Whenever two or more allied cases are

assigned to different Justices, they may be consolidated for study and report to a
single Justice.
(a) At the instance of any party or Justice to whom the case is assigned for
study and report, and with the conformity of all the Justices concerned, the
consolidation may be allowed when the cases to be consolidated involve the same
parties and/or related questions of fact and/or law.

The use of the word may denotes the permissive, not mandatory, nature of the above
provision, Thus, no grave error could be imputed to the CA when it proceeded to render its
decision in CA-G.R. CR No. 23055, without consolidating it with CA-G.R. CR No. 23054.

WHEREFORE, premises considered, the Petition is DENIED for lack of merit.

SO ORDERED.

ROMEO J. CALLEJO, SR.

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice

MA.

ALICIA

AUSTRIA-MARTINEZ

Associate Justice

MINITA
Associate Justice

V.

CHICO-NAZARIO

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION
Criminal Case No. 9435.

, par. 1.
Citing People v. Zafra, G.R. No. 110079, October 19, 1994, 237 SCRA 664, 667.
Citing Development Bank of the Philippines v. Sima Wei, G.R. No. 85419, March 9, 1993, 219
SCRA 736, 741.
Rules and Guidelines in the Filing and Prosecution of Criminal Cases under Batas Pambansa
Bilang 22.
Revised Penal Code, Article 100.
In 2000, the Supreme Court amended the Rules on Criminal Procedure. Section 1, Rule 111
now reads in full:
SEC. 1. Institution of criminal and civil actions. (a) When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense
charged shall be deemed instituted with the criminal action unless the offended party
waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
The reservation of the right to institute separately the civil action shall be made
before the prosecution starts presenting its evidence and under circumstances affording
the offended party a reasonable opportunity to make such a reservation.
When the offended party seeks to enforce civil liability against the accused by way
of moral, nominal, temperate, or exemplary damages without specifying the amount
thereof in the complaint or information, the filing fees therefor shall constitute a first
lien on the judgment awarding such damages.

Where the amount of damages, other than actual, is specified in the complaint or
information, the corresponding filing fees shall be paid by the offended party upon the
filing thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be required for
actual damages.
No counterclaim, cross-claim or third-party complaint may be filed by the accused
in the criminal case, but any cause of action which could have been the subject thereof
may be litigated in a separate civil action.
(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 complaint or information also
seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the
offended party shall pay additional 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.
As amended, Section 2, Rule 111 now reads:
SEC. 2. When separate civil action is suspended. After the criminal action has
been commenced, the separate civil action arising therefrom cannot be instituted until
final judgment has been entered in the criminal action.
If the criminal action is filed after the said civil action has already been instituted,
the latter shall be suspended in whatever stage it may be found before judgment on the
merits. The suspension shall last until final judgment is rendered in the criminal action.
Nevertheless, before judgment on the merits is rendered in the civil action, the same
may, upon motion of the offended party, be consolidated with the criminal action in the
court trying the criminal action. In case of consolidation, the evidence already adduced
in the civil action shall be deemed automatically reproduced in the criminal action
without prejudice to the right of the prosecution to cross-examine the witnesses
presented by the offended party in the criminal case and of the parties to present
additional evidence. The consolidated criminal and civil actions shall be tried and
decided jointly.
During the pendency of the criminal action, the running of the period of
prescription of the civil action which cannot be instituted separately or whose
proceeding has been suspended shall be tolled.
The extinction of the penal action does not carry with it extinction of the civil
action. However, the civil action based on delict shall be deemed extinguished if there

is a finding in a final judgment in the criminal action that the act or omission from
which the civil liability may arise did not exist.
Revised Rules of Court, Rule 120, Sec. 2, last paragraph.
373 Phil. 150, 153 (1999).
458 Phil. 504, 515 (2003).
Sanchez v. Far East Bank and Trust Company, G.R. No. 115308, November 15, 2005, 475
SCRA 97, 109 citing, among others, People v. Ursua, 60 Phil. 252 (1934); People v. Rodriguez,
97 Phil. 349 (1955).
CA Decision, p. 9; rollo (Vol. I), p. 66.
Id.; id.
Id. at 5; id. at 62.
CA Decision, pp. 8-9; rollo, pp. 65-66.
Id. at 4-5; id. at 61-62.
Go v. Bacaron, G.R. No. 159048, October 11, 2005, 472 SCRA 339, 349.
Ordinarily, questions of facts are not taken up in a petition for review in certiorari under Rule
45 of the Rules of Court. However, the Court has been constrained to review the factual issues
in this case, as they fall under one of the recognized exceptions to this rule, in particular, the
findings of the CA in this case are contrary to those of the MCTC and RTC. See, for example,
Menchavez v. Teves, Jr., G.R. No. 153201, January 26, 2005, 449 SCRA 380, 395.
Acabal v. Acabal, G.R. No. 148376, March 31, 2005, 454 SCRA 555, 569.
Republic v. Orfinada, Sr., G.R No. 141145, November 12, 2004, 442 SCRA 342, 351-352.
Manzano v. Perez, Sr., 414 Phil. 728, 738 (2001).
CA Decision, p. 5; rollo (vol. I), p. 62.
Ouano v. Court of Appeals, 446 Phil. 690, 708 (2003).
Rule 3 of the 1994 Revised IRCA. In the 2002 RIRCA, the pertinent provision (Section 3, Rule
3) on consolidation now reads:
SEC. 3. Consolidation of Cases. When related cases are assigned to different
Justices, they may be consolidated and assigned to one Justice.

(a) At the instance of a party with notice to the other party; or at the instance of the
Justice to whom the case is assigned, and with the conformity of the Justice to whom
the cases shall be consolidated, upon notice to the parties, consolidation may be allowed
when the cases involve the same parties and/or related questions of facts or law.

SECOND DIVISION

PACIFICO B. ARCEO, JR.,

G.R. No. 142641

Petitioner,
Present:

PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,
- versus -

CORONA,
AZCUNA and
GARCIA, JJ.

PEOPLE OF THE PHILIPPINES,

Respondent.

Promulgated:

July 17, 2006

x------------------------------------------x

DECISION

CORONA, J.:

This petition for review on certiorari assails the April 28, 1999 decision
and March 27, 2000 resolution of the Court of Appeals in CA-G.R. CR No.
19601 affirming the trial courts judgment finding petitioner Pacifico B. Arceo,
Jr. liable for violation of Batas Pambansa Blg. (BP) 22, otherwise known as the
Bouncing Checks Law.

The facts of the case as found by the trial court and adopted by the Court of
Appeals follow.

On March 14, 1991, [petitioner], obtained a loan from private

complainant Josefino Cenizal [] in the amount of P100,000.00. Several
weeks thereafter, [petitioner] obtained an additional loan of P50,000.00
from [Cenizal]. [Petitioner] then issued in favor of Cenizal, Bank of the

Philippine Islands [(BPI)] Check No. 163255, postdated August 4, 1991,

for P150,000.00, at Cenizals house located at 70 Panay Avenue, Quezon
City. When August 4, 1991 came, [Cenizal] did not deposit the check
immediately because [petitioner] promised [] that he would replace the
check with cash. Such promise was made verbally seven (7) times. When
his patience ran out, [Cenizal] brought the check to the bank for
encashment. The head office of the Bank of the Philippine Islands through
a letter dated December 5, 1991, informed [Cenizal] that the check
bounced because of insufficient funds.

Thereafter, [Cenizal] went to the house of [petitioner] to inform him

of the dishonor of the check but [Cenizal] found out that [petitioner] had
left the place. So, [Cenizal] referred the matter to a lawyer who wrote a
letter giving [petitioner] three days from receipt thereof to pay the amount
of the check. [Petitioner] still failed to make good the amount of the check.
As a consequence, [Cenizal] executed on January 20, 1992 before the
office of the City Prosecutor of Quezon City his affidavit and submitted
documents in support of his complaint for [e]stafa and [v]iolation of [BP
22] against [petitioner]. After due investigation, this case for [v]iolation of
[BP 22] was filed against [petitioner] on March 27, 1992. The check in
question and the return slip were however lost by [Cenizal] as a result of
a fire that occurred near his residence on September 16, 1992. [Cenizal]
executed an Affidavit of Loss regarding the loss of the check in question
and the return slip.

After trial, petitioner was found guilty as charged. Aggrieved, he appealed

to the Court of Appeals. However, on April 28, 1999, the appellate court
affirmed the trial courts decision in toto. Petitioner sought reconsideration but
it was denied. Hence, this petition.

Petitioner claims that the trial and appellate courts erred in convicting
him despite the failure of the prosecution to present the dishonored check
during the trial. He also contends that he should not be held liable for the
dishonor of the check because it was presented beyond the 90-day period
provided under the law. Petitioner further questions his conviction since the
notice requirement was not complied with and he was given only three days to
pay, not five banking days as required by law. Finally, petitioner asserts that he
had already paid his obligation to Cenizal.

Petitioners contentions have no merit.

SIGNIFICANCE OF THE 90-DAY PERIOD

FOR PRESENTMENT OF THE CHECK

Petitioner asserts that there was no violation of BP 22 because the check

was presented to the drawee bank only on December 5, 1991 or 120 days from
the date thereof (August 4, 1991). He argues that this was beyond the 90-day

period provided under the law in connection with the presentment of the
check. We disagree.

Section 1 of 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.

In Wong v. Court of Appeals, the Court ruled that the 90-day period
provided in the law is not an element of the offense. Neither does it discharge
petitioner from his duty to maintain sufficient funds in the account within a
reasonable time from the date indicated in the check. According to current
banking practice, the reasonable period within which to present a check to the
drawee bank is six months. Thereafter, the check becomes stale and the drawer
is discharged from liability thereon to the extent of the loss caused by the delay.

Thus, Cenizals presentment of the check to the drawee bank 120 days
(four months) after its issue was still within the allowable period. Petitioner was
freed neither from the obligation to keep sufficient funds in his account nor
from liability resulting from the dishonor of the check.

APPLICABILITY OF THE
BEST EVIDENCE RULE

Petitioners insistence on the presentation of the check in evidence as a

condition sine qua non for conviction under BP 22 is wrong. Petitioner anchors
his argument on Rule 130, Section 3, of the Rules of Court, otherwise known
as the best evidence rule. However, the rule applies only where the content of
the document is the subject of the inquiry. Where the issue is the execution or
existence of the document or the circumstances surrounding its execution, the
best evidence rule does not apply and testimonial evidence is admissible.

The gravamen of the offense is the act of drawing and issuing a worthless
check. Hence, the subject of the inquiry is the fact of issuance or execution of
the check, not its content.

Here, the due execution and existence of the check were sufficiently
established. Cenizal testified that he presented the originals of the check, the
return slip and other pertinent documents before the Office of the City
Prosecutor of Quezon City when he executed his complaint-affidavit during the
preliminary investigation. The City Prosecutor found a prima facie case against
petitioner for violation of BP 22 and filed the corresponding information based
on the documents. Although the check and the return slip were among the

documents lost by Cenizal in a fire that occurred near his residence on

September 16, 1992, he was nevertheless able to adequately establish the due
execution, existence and loss of the check and the return slip in an affidavit of
loss as well as in his testimony during the trial of the case.

Moreover, petitioner himself admited that he issued the check. He never

denied that the check was presented for payment to the drawee bank and was
dishonored for having been drawn against insufficient funds.

PRESENCE

OF

THE

ELEMENTS OF THE OFFENSE

Based on the allegations in the information, petitioner was charged for

violating the first paragraph of BP 22. The elements of the offense are:

1.

the 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.

All these elements are present in this case.

Both the trial and appellate courts found that petitioner issued BPI check
no. 163255 postdated August 4, 1991 in the amount of P150,000 in
consideration of a loan which he obtained from Cenizal. When the check was
deposited, it was dishonored by the drawee bank for having been drawn against
insufficient funds. There was sufficient evidence on record that petitioner
knew of the insufficiency of his funds in the drawee bank at the time of the
issuance of the check. In fact, this was why, on maturity date, he requested the

payee not to encash it with the promise that he would replace it with cash. He
made this request and assurance seven times but repeatedly failed to make
good on his promises despite the repeated accommodation granted him by the
payee, Cenizal.

NOTICE OF DISHONOR TO PETITIONER

AND PAYMENT OF THE OBLIGATION

The trial court found that, contrary to petitioners claim, Cenizals counsel
had informed petitioner in writing of the checks dishonor and demanded
payment of the value of the check. Despite receipt of the notice of dishonor and
demand for payment, petitioner still failed to pay the amount of the check.

Petitioner cannot claim that he was deprived of the period of five banking
days from receipt of notice of dishonor within which to pay the amount of the
check. While petitioner may have been given only three days to pay the value of
the check, the trial court found that the amount due thereon remained unpaid
even after five banking days from his receipt of the notice of dishonor. This
negated his claim that he had already paid Cenizal and should therefore be
relieved of any liability.

Moreover, petitioners claim of payment was nothing more than a mere

allegation. He presented no proof to support it. If indeed there was payment,
petitioner should have redeemed or taken the check back in the ordinary
course of business. Instead, the check remained in the possession of the payee
who demanded the satisfaction of petitioners obligation when the check
became due as well as when the check was dishonored by the drawee bank.

These findings (due notice to petitioner and nonpayment of the

obligation) were confirmed by the appellate court. This Court has no reason to
rule otherwise. Well-settled is the rule that the factual findings of the trial
court, when affirmed by the appellate court, are not to be disturbed.

WHEREFORE, the petition is hereby DENIED. The April 28, 1999

decision and March 27, 2000 resolution of the Court of Appeals in CA-G.R. CR
No. 19601 are AFFIRMED.

Costs against petitioner.

SO ORDERED.

RENATO C. CORONA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairperson

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

ADOLFO S. AZCUNA
Associate Justice

CANCIO C. GARCIA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

REYNATO S. PUNO

Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice
Penned by Associate Justice Jainal D. Rasul (retired) and concurred in by Associate
Justices Conchita Carpio Morales (now a member of the Supreme Court) and Bernardo P.
Abesamis (retired) of the Third Division of the Court of Appeals; rollo, pp. 17-24.
Penned by Associate Justice Bernardo P. Abesamis (retired) and concurred in by
Associate Justices Conchita Carpio Morales (now a member of the Supreme Court) and
Marina L. Buzon of the Former Third Division of the Court of Appeals; rollo, p. 26.
CA decision, rollo, pp. 17-24.
G.R. No. 117857, 02 February 2001, 351 SCRA 100.
Florenz D. Regalado, REMEDIAL LAW COMPENDIUM, Volume II, Seventh Revised
Edition, 1995, p. 555.
Tan v. Mendez, Jr., 432 Phil. 760 (2002).

The information read:

The undersigned Assistant City Prosecutor accuses PACIFICO B. ARCEO, JR.

of violation of Batas Pambansa Blg. 22, committed as follows:

That on or about the 15th day of April 1991, in Quezon City, Philippines, and
within the jurisdiction of this Honorable Court, the said accused, did then and there,
willfully, unlawfully and feloniously make, draw and issue in favor of JOSEFINO
CENIZAL a check no. 163255 drawn against the Bank of the Philippine Island[,] a duly
established domestic banking institution[,] in the amount in the amount of P150,000.00
Philippine Currency, postdated August 4, 1991, in payment of an obligation, knowing
fully well at the time of issue that [he] did not have the payment of such check; that upon
presentation of said check to said bank for payment, the same was dishonored for the
reason that the drawer thereof, accused Pacifico B. Arceo, Jr., did not have sufficient
funds therein, and despite notice of dishonor thereof, accused failed and refused and still
fails and refuses to redeem or make good said check, to the damage and prejudice of the
said Josefino Cenizal in the amount aforementioned and in such other amount as may be
awarded under the provisions of the Civil Code.

CONTRARY TO LAW. (Rollo, pp. 17-18.)

Vaca v. Court of Appeals, 359 Phil. 187 (1998).

Section 2 of BP 22 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.
Tan v. Mendez, Jr., supra; Lim v. People, 420 Phil. 506 (2001).
Miranda v. Besa, G.R. No. 146513, 30 July 2004, 435 SCRA 532.
SECOND DIVISION
[G.R. No. 180975 : December 09, 2009]
DAMIAN G. MERCADO V. ANICETO G. SALUDO, JR.
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 09 December 2009:
G.R. No. 180975 (Damian G. Mercado v. Aniceto G. Saludo, Jr.).This case is about a civil suit for damages arising from a pending criminal action, allegedly
malicious, that the plaintiff filed against his accuser.
The Facts and the Case
On April 14, 2005 respondent Aniceto G. Saludo, Jr. (Saludo) filed a complaint against petitioner
Damian G. Mercado (Mercado) for violation of Batas Pambansa 22 (B.P. 22) before the City
Prosecutor of Pasay City.[1] Saludo accused Mercado of issuing to him in payment of a loan the
following three Philippine National Bank (PNB) checks that were drawn against what turned out
to be a closed account:
(1)
(2)
(3)

Check 0156076 dated April 15, 2004 for P5 million;

Check 0156098 dated April 16, 2004 for P3 million; and
Check 0009019 dated July 21, 2004 for P2.5 million.

In turn, on July 7, 2005 petitioner Mercado filed an action against respondent Saludo for
"declaration of absolute nullity of commercial documents with damages" before the Regional
Trial Court (RTC) of Maasin City, Southern Leyte. Mercado alleged that he lost in April 2001
several pre-signed blank checks; that on failing to find them, he reported his loss to the Maasin
Police and placed a stop-payment instruction to his bank; that it surprised him that on January 11,
2005 respondent Saludo demanded of him payment of P10.5 million for three dishonored checks
which, it turned out, were among those that he reported lost in April 2001; and that respondent
Saludo had maliciously prosecuted him for violation of B.P. 22. Mercado asked the RTC to
declare the checks void and to order Saludo to pay him actual, moral, and exemplary damages
and attorney's fees totalling P6.5 million.
On July 8, 2005, the day following the filing of the civil action, petitioner Mercado filed his

counter-affidavit in the B.P. 22 criminal action that respondent Saludo brought against him. Here,
Mercado restated by way of defense the allegations of his complaint in Civil Case R-3432.
Further, he sought the suspension of the preliminary investigation on the ground that the
resolution of his pending civil action constitutes prejudicial question on his liability in the
criminal case.
On September 13, 2005 the City Prosecutor dismissed respondent Saludo's B.P. 22 complaint. On
petition for review, however, the Department of Justice (DOJ) reversed the city prosecutor's
resolution and directed the latter to file the corresponding informations against petitioner
Mercado. Upon the latter's motion for reconsideration, however, the DOJ reversed itself,
prompting Saludo to come up to the Court of Appeals (CA) on a petition for certiorari.[2] The
latter court reversed the DOJ ruling and directed the filing in court of the subject informations.
This was done and the informations were docketed as Criminal Cases 06-309 to 311 of the
Metropolitan Trial Court of Pasay City.
Meanwhile, respondent Saludo, as defendant in Civil Case R-3432 of the RTC of Pasay City,
filed a motion to dismiss the complaint in the case"[3] on the grounds of (1) the pendency of the
criminal case for violation of B.P. 22; (2) the violation of the requirement of certification against
forum shopping; and (3) the failure of the complaint to state a cause of action. Petitioner
Mercado opposed the motion.
On June 1, 2006 the RTC issued an order[4] denying respondent Saludo's motion to dismiss the
civil action against him. His motion for reconsideration having been similarly denied,[5] Saludo
instituted a petition for special civil action of certiorari before the Court of Appeals (CA) of Cebu
City in CA-G.R. CEB-SP 02263, assailing the RTC's denial of his motion to dismiss. On July 3,
2006 the CA issued an order, suspending the proceedings in Criminal Cases 06-309 to 311. On
March 27, 2007, however, the CA rendered judgment, granting respondent Saludo's petition. The
CA set aside the RTC's orders dated June 1 and September 12, 2006 and dismissed Civil Case R3432, the action for declaration of nullity of the subject checks on the ground of litis pendentia.[6]
Subsequently, on December 13, 2008 the CA denied Mercado's motion for reconsideration, thus,
the present recourse to this Court.
The Issue Presented
The core issue in this case is whether or not petitioner Mercado's civil action for declaration of
nullity of the checks and damages that he filed against respondent Saludo in Civil Case R-3432
may be dismissed on the ground of the pendency of the criminal action for violation of B.P. 22
that Saludo earlier filed against Mercado in Criminal Cases 06-309 to 311.
The Ruling of the Court
Litis pendentia is a Latin term which literally means "a pending suit." As such, it refers to that
situation in which another action is pending between the same parties for the same cause of
action, such that the second action becomes unnecessary and vexatious.[7] There is no reason for
two cases involving the same issue or issues to proceed independently of each other and possibly
spawn opposite outcomes, like one party winning in one case and the opposite party in the other.
Such a situation is intolerable and will make a mockery of the court as a final arbiter of the legal

dispute before it.

The following are the requisites of litis pendentia: (a) the parties in both actions are the same or,
at least, represent the same interests; (b) the rights asserted and the reliefs desired are the same,
such reliefs being founded on the same facts; and (c) the two cases are so similar that the
judgment, rendered in one would, regardless of which party wins, amount to res judicata on the
other. Where these requisites exist, the second case will often amount to forum shopping.[8]
Petitioner Mercado insists that litis pendentia cannot exist between the civil action for annulment
of the subject checks and criminal action for violation of B.P. 22 since the judgment in one case
will not necessarily have the effect of res judicata in the other. For instance, even if the civil
action results in a finding by final judgment that the checks were not stolen and were issued for a
valid consideration, such finding will not ensure the issuer's conviction for violation of B.P. 22.
Some other element of the latter crime might prove absent in the case, like the giving of notice to
make good the checks. According to Mercado, litis pendentia applies only when both pending
actions are civil in nature.
Strictly speaking, petitioner Mercado makes a valid point but only to the extent that one case is
purely criminal and the other is civil. But every person criminally liable for a felony is also
civilly liable.[9] And, as a rule, when a criminal action is instituted, the civil action for the
recovery of civil liability arising from the offense charged shall be deemed instituted with the
criminal action.[10] This is especially true in criminal actions for violation of B.P. 22. The criminal
action shall be deemed to include the corresponding civil action and no reservation to file such
civil action separately shall-be allowed.[11] Consequently, it is a certainty that a finding that the
accused in a B.P. 22 case is not guilty of the offense constitutes res judicata to a civil action for
the recovery of civil indemnity arising from the offense.
Petitioner Mercado also insists that the application of the principle of prejudicial question is
more appropriate in this case. The question of whether or not Mercado issued the checks in due
course is, according to him, best threshed out first in the civil action for annulment of the subject
checks that he filed against respondent Saludo in Maasin City, Southern Leyte.
A prejudicial question is a question based on a fact distinct and separate from the crime but so
intimately connected with it that it determines the guilt or innocence of the accused.[12] A classic
example of this is the question of whether or not the person accused with bigamy had a valid preexisting marriage. If, after the accused filed a civil action for the declaration of nullity of his
prior marriage, he is criminally charged with bigamy, the determination of the issue of the
validity of the prior marriage is a prejudicial question to the resolution of the subsequently filed
bigamy case.
But a prejudicial question is understood in law as that which must precede the filing of the
criminal action and which requires a decision before a final judgment can be rendered in the
criminal action with which such question is closely connected. The civil suit must be begun prior
to the filing of the criminal suit[13] . Here, respondent Saludo filed the criminal case for violation
of B.P. 22 before petitioner Mercado file his civil action for annulment of the checks.
Consequently, Saludo cannot claim the benefit of a prejudicial question pending in the civil suit

that he filed against Mercado. Besides, the suspension on the ground of existence of a prejudicial
question cannot be allowed if, as in this case, it appears that the plaintiff filed the civil action as
an afterthought to delay the ongoing criminal action.[14]
In settling the issues in the two cases, the CA correctly adopted the formula used by this Court in
disposing of a similar problem in Allied Banking Corp. v. Court of Appeals[15] The Court held in
that case that, when confronted with an issue of litis pendentia, the following factors should be
taken into determining which of the two cases to dismiss:
1.

The date of filing, with preference to retaining the first action that was filed;

2. The fact that the action sought to be dismissed had been filed merely to preempt a
subsequent action or anticipate its filing and lay the basis for its dismissal; and
3.

The action is the appropriate vehicle for litigating the issues between the parties.[16]

Here, respondent Saludo initiated the criminal action (April 14, 2005) ahead of petitioner
Mercado's civil action (July 7, 2005). A reading of the complaint in the civil case shows that the
causes of action and matters raised in it could very well be pleaded as defenses at the trial of the
criminal case. This Court agrees with the CA's finding that Mercado's civil action was just an
afterthought, a mere ploy to delay the progress of the criminal case filed against him, and a
scheme to defeat it by laying the basis in a different venue for its dismissal or suspension based
on a supposed prejudicial question.
Finally, the Court finds that petitioner Mercado's civil action for annulment of the checks is
essentially a suit for damages against respondent Saludo for malicious prosecution. It is rooted in
Mercado's allegation that Saludo was "lying to the teeth" in prosecuting the B.P. 22 case. It is
thus clear that Mercado's claim for damages is founded solely on his allegations of malicious
prosecution. But this Court has held that no case for malicious prosecution can prosper while the
subject criminal case is still pending.
Malicious prosecution has been defined as an action for damages brought by one against
whom a criminal prosecution, civil suit or other legal proceeding has been instituted
maliciously and without probable cause, after the termination of such prosecution, suit or
other proceeding in favor of the defendant therein. As thus defined, the fact of termination
of the criminal prosecution, civil suit, or legal proceeding maliciously filed and without
probable cause, should precede the complaint for malicious prosecution.[17] (Emphasis
supplied)
WHEREFORE, the Court DENIES the petition and AFFIRMS the decision dated March 27,
2007 and resolution dated December 13, 2007 of the Court of Appeals of Cebu City in CA-G.R.
CEB-SP 02263.
Costs against petitioner.
SO ORDERED.

WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Conchita Carpio Morales
(designated additional member per S.O. No. 807 in lieu of Brion, J., on leave), Teresita J.
Leonardo-De Castro (designated additional member per S.O. No. 776), Mariano C. Del Castillo
and Roberto A. Abad, Members, Second Division, this 9th day of December, 2009.
Very truly yours.
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
[1]

Docketed as I.S. 05-D-222S to 05-D-2230.

[2]

Rollo, pp. 352-357. Docketed as CA-G.R. SP 97393, the petition was resolved via the
appellate court's Decision dated March 27, 2008, which found that no prejudicial question
existed as to warrant the suspension of Criminal Cases 06-309 to 311.
[3]

Id. at 178-188,

[4]

Id. at 209-210.

[5]

Id. at 211-212.

[6]

Id. at 66.

[7]

Agilent Technologies Singapore (PTE) Ltd. v. Integrated Silicon Technology Philippines

Corporation, 471 Phil. 582,596(2004).
[8]

First Philippine International Bank v. Court of Appeals, 322 Phil. 280, 306 (1996).

[9]

REVISED PENAL CODE, Article 100.

[10]

Revised Rules of Criminal Procedure, Rule III, Sec. l(a).

[11]

Id., Sec. 1(b).

[12]

Sabandal v. Tongco, 419 Phil. 13, 18(2001).

[13]

Torres v, Garchitorena, 442 Phil. 765, 783 (2002).

[14]

First Producers Holdings Corporation v. Co, 391 Phil. 441, 448 (2000).

[15]

328 Phil. 710(1996).

[16]

Rollo, p. 58.

[17]

Lao v. Court of Appeals, 382 Phil. 583, 608 (2000)

Manila
THIRD DIVISION
LINA LIM LAO,
Petitioner,
G. R. No. 119178
June 20, 1997
-versusCOURT OF APPEALS
and PEOPLE OF THE PHILIPPINES,
Respondents.
DECISION

PANGANIBAN, J.:

May an employee who, as part of her regular duties, signs blank corporate
checks with the name of the payee and the amount drawn to be filled later
by another signatory and, therefore, does so without actual knowledge of
whether such checks are funded, be held criminally liable for violation of
Batas Pambansa Bilang 22 [B. P. 22], when checks so signed are dishonored
due to insufficiency of funds? Does a notice of dishonor sent to the main
office of the corporation constitute a valid notice to the said employee who
holds office in a separate branch and who had no actual knowledge thereof?
In other words, is constructive knowledge of the corporation, but not of the
signatory-employee, sufficient?
These are the questions raised in the petition filed on March 21, 1995
assailing the Decision [1] of Respondent Court of Appeals [2] promulgated

on December 9, 1994 in CA-G. R. CR No. 14240 dismissing the appeal of

petitioner and affirming the decision dated September 26, 1990 in Criminal
Cases Nos. 84-26967 to 84-26969 of the Regional Trial Court of Manila,
Branch 33. The dispositive portion of the said RTC decision affirmed by the
respondent
appellate
court
reads:
[3]
"WHEREFORE, after a careful consideration of the evidence presented
by the prosecution and that of the defense, the Court renders
judgment as follows:
"In Criminal Case No. 84-26969 where no evidence was presented by
the prosecution notwithstanding the fact that there was an agreement
that the cases be tried jointly and also the fact that the accused Lina
Lim Lao was already arraigned, for failure of the prosecution to adduce
evidence against the accused, the Court hereby declares her innocent
of the crime charged and she is hereby acquitted with cost de oficio.
"For Criminal Case No. 84-26967, the Court finds the accused Lina Lim
Lao guilty beyond reasonable doubt of the crime charged and is hereby
sentenced to suffer the penalty of ONE (1) YEAR imprisonment and to
pay a fine of P150,000.00 without subsidiary imprisonment in case of
insolvency.
For Criminal Case No. 84-26968, the Court finds the accused Lina Lim
Lao guilty beyond reasonable doubt of the crime charged and is hereby
sentenced to suffer the penalty of ONE (1) YEAR imprisonment and to
pay a fine of P150,000.00 without subsidiary imprisonment in case of
of (sic) insolvency.
"For the two cases the accused is ordered to pay the cost of suit.
"The cash bond put up by the accused for her provisional liberty in
Criminal Case No. 84-26969 where she is declared acquitted is hereby
ordered cancelled (sic).
"With reference to the accused Teodulo Asprec who has remained at
large, in order that the cases as against him may not remain pending
in the docket for an indefinite period, let the same be archived without
prejudice to its subsequent prosecution as soon as said accused is
finally apprehended.

"Let a warrant issue for the arrest of the accused Teodulo Asprec which
warrant need not be returned to this Court until the accused is finally
arrested.
"SO ORDERED."
The Facts
Version of the Prosecution
The facts are not disputed. We thus lift them from the assailed Decision, as
follows:
Appellant [and now Petitioner Lina Lim Lao] was a junior officer of Premiere
Investment House [Premiere] in its Binondo Branch. As such officer, she was
authorized to sign checks for and in behalf of the corporation [TSN, August
16, 1990, p. 6]. In the course of the business, she met complainant Father
Artelijo Pelijo, the provincial treasurer of the Society of the Divine Word
through Mrs. Rosemarie Lachenal, a trader for Premiere. Father Palijo was
authorized to invest donations to the society and had been investing the
society's money with Premiere [TSN, June 23, 1987, pp. 5, 9-10]. Father
Palijo had invested a total of P514,484.04, as evidenced by the Confirmation
of Sale No. 82-6994 [Exh "A"] dated July 8, 1993. Father Palijo was also
issued Traders Royal Bank [TRB] checks in payment of interest, as follows:
Check
299961
299962
323835

Date

Amount

Oct. 7, 1993 (sic)

P 150,000.00 [Exh. "B"]
Oct. 7, 1983
P 150,000.00 [Exh. "C"]
Oct. 7, 1983
P 26,010.73

All the checks were issued in favor of Artelijo A. Palijo and signed by
appellant (herein petitioner) and Teodulo Asprec, who was the head of
operations. Further evidence of the transaction was the acknowledgment of
postdated checks dated July 8, 1983 [Exh. "D"] and the cash disbursement
voucher [Exh. "F", TSN, supra, at pp. 11-16].
When Father Palijo presented the checks for encashment, the same were
dishonored for the reason "Drawn Against Insufficient Funds" [DAIF]. Father
Palijo immediately made demands on premiere to pay him the necessary
amounts. He first went to the Binondo Branch but was referred to the Cubao
Main Branch where he was able to talk with the President, Mr. Cario. For his
efforts, he was paid P5,000.00. Since no other payments followed, Father

Palijo wrote Premiere a formal letter of demand Subsequently, Premiere was

placed under receivership (TSN, supra, at pp. 16-19). [4]
Thereafter, on January 24, 1984, Private Complainant Palijo filed an affidavitcomplaint against Petitioner Lina Lim Lao and Teodulo Asprec for violation of
B.P. 22. After preliminary investigation, [5] three Informations charging Lao
and Asprec with the offense defined in the first paragraph of Section 1, B.P.
22 were filed by Assistant Fiscal Felix S. Caballes before the trial court on
May 11, 1984, [6] worded as follows:
1.

In

Criminal

Case

No.

84-26967:

That on or about October 7, 1983 in the City of Manila, Philippines, the

said accused did then and there wilfully and unlawfully draw and issue
to Artelijo A. Palijo to apply on account or for value a Traders Royal
Bank Check No. 299962 for P150,000.00 payable to Fr. Artelijo A.
Palijo dated October 7, 1983 well knowing that at the time of issue
he/she did not have sufficient funds in or credit with the drawee bank
for full payment of the said check upon its presentment as in fact the
said check, when presented within ninety (90) days from the date
thereof, was dishonored by the drawee bank for the reason:
"Insufficient Funds"; that despite notice of such dishonor, said accused
failed to pay said Artelijo A. Palijo the amount of the said check or to
make arrangement for full payment of the same within five (5)
banking days from receipt of said notice.
CONTRARY
2.

In

TO
Criminal

Case

LAW.
No.

84-26968:

That on or about October 7, 1983 in the City of Manila, Philippines, the

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

make arrangement for full payment of the same within five (5)
banking days from receipt of said notice.
CONTRARY TO LAW.
3.

And

finally

in

Criminal

Case

No.

84-26969:

That on or about July 8, 1983 in the City of Manila, Philippines, the

said accused did then and there wilfully and unlawfully draw and issue
to Artelijo A. Palijo to apply on account for value a Traders Royal Bank
Check No. 323835 for P26,010.03 payable to Fr. Artelijo A. Palijo dated
October 7, 1983 well knowing that at the time of issue he/she did not
have sufficient funds in or credit with the drawee bank for full payment
of the said check upon its presentment as in fact the said check, when
presented within ninety (90) days from the date thereof, was
dishonored by the drawee bank for the reason: "Insufficient Funds";
that despite notice of such dishonor, said accused failed to pay said
Artelijo A. Palijo the amount of the said check or to make arrangement
for full payment of the same within five (5) banking days from receipt
of said notice.
CONTRARY TO LAW.
Upon being arraigned, petitioner assisted by counsel pleaded "not guilty."
Asprec was not arrested; he has remained at large since the trial, and even
now on appeal.
After due trial, the Regional Trial Court convicted Petitioner Lina Lim Lao in
Criminal Cases Nos. 84-26967 and 84-26968 but acquitted her in Criminal
Case No. 84-26969. [7] On appeal, the Court of Appeals affirmed the
decision of the trial court.cralaw
Version of the Defense
Petitioner aptly summarized her version of the facts of the case thus:
Petitioner Lina Lim Lao was, in 1983, an employee of Premiere Financing
Corporation [hereinafter referred to as the "Corporation"], a corporation
engaged in investment management, with principal business office at Miami,
Cubao, Quezon City. She was a junior officer at the corporation who was,
however, assigned not at its main branch but at the corporation's extension
office in [Binondo] Manila. [Ocampo, T S N, 16 August 1990, p. 14]

In the regular course of her duties as a junior officer, she was required to cosign checks drawn against the account of the corporation. The other cosignor was her head of office, Mr. Teodulo Asprec. Since part of her duties
required her to be mostly in the field and out of the office, it was normal
procedure for her to sign the checks in blank, that is, without the names of
the payees, the amounts and the dates of maturity. It was likewise Mr.
Asprec, as head of office, who alone decided to whom the checks were to be
ultimately issued and delivered. [Lao, TSN, 28 September 1989, pp. 9-11,
17, 19].cralaw
In signing the checks as part of her duties as junior officer of the
corporation, petitioner had no knowledge of the actual funds available in the
corporate account. [Lao, TSN, 28 September 1989, p. 21]. The power, duty
and responsibility of monitoring and assessing the balances against the
checks issued, and funding the checks thus issued, devolved on the
corporation's Treasury Department in its main office in Cubao, Quezon City,
headed then by the Treasurer, Ms. Veronilyn Ocampo. (Ocampo, T SN, 19
July 1990, p. 4; Lao, TSN, 28 September 1989, pp. 21-23) All bank
statements regarding the corporate checking account were likewise sent to
the main branch in Cubao, Quezon City, and not in Binondo, Manila, where
petitioner was holding office. (Ocampo, TSN, 19 July 1990, p. 24;
Marqueses, TSN, 22 November 1988, p. 8).cralaw
The foregoing circumstances attended the issuance of the checks subject of
the
instant
prosecution.
The checks were issued to guarantee payment of investments placed by
private complainant Palijo with Premiere Financing Corporation. In his
transactions with the corporation, private complainant dealt exclusively with
one Rosemarie Lachenal, a trader connected with the corporation, and he
never knew nor in any way dealt with petitioner Lina Lim Lao at any time
before or during the issuance of the delivery of the checks. (Palijo, TSN, 23
June 1987, pp. 28-29, 32-34; Lao, TSN, 15 May 1990, p. 6; Ocampo, TSN,
p. 5) Petitioner Lina Lim Lao was not in any way involved in the transaction
which led to the issuance of the checks.cralaw
When the checks were co-signed by petitioner, they were signed in advance
and in blank, delivered to the Head of Operations, Mr. Teodulo Asprec, who
subsequently filled in the names of the payee, the amounts and the
corresponding dates of maturity. After Mr. Asprec signed the checks, they
were delivered to private complainant Palijo. (Lao, TSN, 28 September 1989,
pp. 8-11, 17, 19; note also that the trial court in its decision fully accepted
the testimony of petitioner [Decision of the Regional Trial Court, p. 12], and
that the Court of Appeals affirmed said decision in toto)

Petitioner Lina Lim Lao was not in any way involved in the completion, and
the subsequent delivery of the check to private complainant Palijo. At the
time petitioner signed the checks, she had no knowledge of the sufficiency or
insufficiency of the funds of the corporate account. (Lao, TSN, 28 September
1989, p. 21). It was not within her powers, duties or responsibilities to
monitor and assess the balances against the issuance; much less was it
within her (duties and responsibilities) to make sure that the checks were
funded. Premiere Financing Corporation had a Treasury Department headed
by a Treasurer, Ms. Veronilyn Ocampo, which alone had access to information
as to account balances and which alone was responsible for funding the
issued checks. (Ocampo, TSN, 19 July 1990, p. 4; Lao, TSN, 28 September
1990, p. 23) All statements of account were sent to the Treasury
Department located at the main office in Cubao, Quezon City. Petitioner was
holding office at the extension in Binondo Manila. (Lao, TSN, 28 September
1989, p. 24-25) Petitioner Lina Lim Lao did not have knowledge of the
insufficiency of the funds in the corporate account against which the checks
were drawn.cralaw
When the checks were subsequently dishonored, private complainant sent a
notice of said dishonor to Premier Financing Corporation at its head office in
Cubao, Quezon City. (Please refer to Exh. "E"; Palijo, TSN, 23 June 1987, p.
51) Private complainant did not send notice of dishonor to petitioner. (Palijo,
TSN, 24 July 1987, p. 10) He did not follow up his investment with
petitioner. (Id.) Private complainant never contacted, never informed, and
never talked with, petitioner after the checks had bounced. (Id., at p. 29)
Petitioner never had notice of the dishonor of the checks subject of the
instant prosecution.cralaw
The Treasurer of Premiere Financing Corporation, Ms. Veronilyn Ocampo
testified that it was the head office in Cubao, Quezon City, which received
notice of dishonor of the bounced checks. (Ocampo, TSN, 19 July 1990 pp.
7-8) The dishonor of the check came in the wake of the assassination of the
late Sen. Benigno Aquino, as a consequence of which event a majority of the
corporation's clients pre-terminated their investments. A period of extreme
illiquidity and financial distress followed, which ultimately led to the
corporation's being placed under receivership by the Securities and
Exchange Commission. (Ocampo, TSN, 16 August 1990, p. 8, 19; Lao, TSN,
28 September 1989, pp. 25-26; Please refer also to Exhibit "1", the order of
receivership issued by the Securities and Exchange Commission) Despite the
Treasury Department's and (Ms. Ocampo's) knowledge of the dishonor of the
checks, however, the main office in Cubao, Quezon City never informed
petitioner Lina Lim Lao or anybody in the Binondo office for that matter.
(Ocampo, TSN, 16 August 1990, pp. 9-10) In her testimony, she justified her
omission by saying that the checks were actually the responsibility of the

main office (Ocampo, TSN, 19 July 1990, p. 6) and that, at that time of
panic withdrawals and massive pre-termination of clients' investments, it
was futile to inform the Binondo office since the main office was strapped for
cash and in deep financial distress. (Id., at pp. 7-9) Moreover, the confusion
which came in the wake of the Aquino assassination and the consequent
panic withdrawals caused them to lose direct communication with the
Binondo office. (Ocampo, TSN, 16 August 1990, p. 9-10)
As a result of the financial crisis and distress, the Securities and Exchange
Commission placed Premier Financing Corporation under receivership,
appointing a rehabilitation receiver for the purpose of settling claims against
the corporation. (Exh. "1") As he himself admits, private complainant filed a
claim for the payment of the bounced check before and even after the
corporation had been placed under receivership. (Palijo, TSN, 24 July 1987,
p. 10-17) A check was prepared by the receiver in favor of the private
complainant but the same was not claimed by him. (Lao, TSN, 15 May 1990,
p. 18)
Private complainant then filed the instant criminal action. On 26 September
1990, the Regional Trial Court of Manila, Branch 33, rendered a decision
convicting petitioner, and sentencing the latter to suffer the aggregate
penalty of two (2) years and to pay a fine in the total amount of
P300,000.00. On appeal, the Court of Appeals affirmed said decision. Hence,
this
petition
for
review.
[8]
The Issue
In the main, petitioner contends that the public respondent committed a
reversible error in concluding that lack of actual knowledge of insufficiency of
funds was not a defense in a prosecution for violation of B.P. 22. Additionally,
the petitioner argues that the notice of dishonor sent to the main office of
the corporation, and not to petitioner herself who holds office in that
corporation's branch office, does not constitute the notice mandated in
Section 2 of BP 22; thus, there can be no prima facie presumption that she
had
knowledge
of
the
insufficiency
of
funds.
The Court's Ruling
The petition is meritorious.
Strict Interpretation of Penal Statutes

It is well-settled in this jurisdiction that penal statutes are strictly construed

against the state and liberally for the accused, so much so that the scope of
a penal statute cannot be extended by good intention, implication, or even
equity consideration. Thus, for Petitioner Lina Lim Lao's acts to be penalized
under the Bouncing Checks Law or B.P. 22, "they must come clearly within
both the spirit and the letter of the statute." [9]
The salient portions of B.P. 22 read:
"Sec. 1. Checks without sufficient funds. Any person who makes or
draws and issues any check to apply on account or for value, knowing
at the time of issue that he does not have sufficient funds in or credit
with the drawee bank for the payment of such check in full upon its
presentment, which check is subsequently dishonored by the drawee
bank for insufficiency of funds or credit or would have been dishonored
for the same reason had not the drawer, without any valid reason,
ordered the bank to stop payment, shall be punished by imprisonment
of not less than thirty days but not more than one (1) year or by a fine
of not less than but not more than double the amount of the check
which fine shall in no case exceed Two hundred thousand pesos, or
both such fine and imprisonment at the discretion of the court.
"The same penalty shall be imposed upon any person who having
sufficient funds in or credit with the drawee bank when he makes or
draws and issues a check, shall fail to keep sufficient funds or to
maintain a credit or to cover the full amount of the check if presented
within a period of ninety (90) days from the date appearing thereon,
for which reason it is dishonored by the drawee bank.
Where the check is drawn by a corporation, company or entity, the
person or persons who actually signed the check in behalf of such
drawer shall be liable under this Act.
"Sec. 2. Evidence of knowledge of insufficient funds. The making,
drawing and issuance of a check payment of which is refused by the
drawee because of insufficient funds in or credit with such bank, when
presented within ninety (90) days from the date of the check, shall be
prima facie evidence of knowledge of such insufficiency of funds or
credit unless such maker or drawer pays the holder thereof the
amount due thereon, or makes arrangements for payment in full by
the drawee of such check within five (5) banking days after receiving
notice that such check has not been paid by the drawee."
This Court listed the elements of the offense penalized under B.P. 22, as
follows: "(1) the making, drawing and issuance of any check to apply to

account or for value; (2) the knowledge of the maker, drawer or issuer that
at the time of issue he does not have sufficient funds in or credit with the
drawee bank for the payment of such check in full upon its presentment;
and (3) subsequent dishonor of the check by the drawee bank for
insufficiency of funds or credit or dishonor for the same reason had not the
drawer, without any valid cause, ordered the bank to stop payment." [10]
Justice Luis B. Reyes, an eminent authority in criminal law, also enumerated
the elements of the offense defined in the first paragraph of Section 1 of B.P.
22,
thus:
1. That a person makes or draws and issues any check.
2. That the check is made or drawn and issued to apply on account or
for value.
3. That the person who makes or draws and issues the check knows at
the time of issue that he does not have sufficient funds in or credit
with the drawee bank for the payment of such check in full upon its
presentment.
4. That the check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit, or would have been dishonored for the
same reason had not the drawer, without any valid reason, ordered the
bank to stop payment. [11]
Crux of the Petition
Petitioner raised as defense before the Court of Appeals her lack of actual
knowledge of the insufficiency of funds at the time of the issuance of the
checks, and lack of personal notice of dishonor to her. The respondent
appellate court, however, affirmed the RTC decision, reasoning that "the
maker's knowledge of the insufficiency of funds is legally presumed from the
dishonor of his checks for insufficiency of funds. (People vs. Laggui, 171
SCRA 305; Nieras vs. Hon. Auxencio C. Dacuycuy, 181 SCRA 1)" [12] The
Court of Appeals also stated that "her alleged lack of knowledge or intent to
issue a bum check would not exculpate her from any responsibility under
B.P. Blg. 22, since the act of making and issuing a worthless check is a
malum prohibitum." [13] In the words of the Solicitor General, "(s)uch
alleged lack of knowledge is not material for petitioner's liability under B.P.
Blg. 22." [14]

Lack of Actual Knowledge of Insufficiency of Funds

Knowledge of insufficiency of funds or credit in the drawee bank forthe
payment of a check upon its presentment is an essential element of the
offense. [15] There is a prima facie presumption of the existence of this
element from the fact of drawing, issuing or making a check, the payment of
which was subsequently refused for insufficiency of funds. It is important to
stress, however, that this is not a conclusive presumption that forecloses or
precludes the presentation of evidence to the contrary.cralaw
In the present case, the fact alone that petitioner was a signatory to the
checks that were subsequently dishonored merely engenders the prima facie
presumption that she knew of the insufficiency of funds, but it does not
render her automatically guilty under B.P. 22. The prosecution has a duty to
prove all the elements of the crime, including the acts that give rise to the
prima facie presumption; petitioner, on the other hand, has a right to rebut
the prima facie presumption. [16] Therefore, if such knowledge of
insufficiency of funds is proven to be actually absent or non-existent, the
accused should not be held liable for the offense defined under the first
paragraph of Section 1 of B.P. 22. Although the offense charged is a malum
prohibitum, the prosecution is not thereby excused from its responsibility of
proving beyond reasonable doubt all the elements of the offense, one of
which is knowledge of the insufficiency of funds.cralaw
After a thorough review of the case at bar, the Court finds that Petitioner
Lina Lim Lao did not have actual knowledge of the insufficiency of funds in
the corporate accounts at the time she affixed her signature to the checks
involved in this case, at the time the same were issued, and even at the
time the checks were subsequently dishonored by the drawee bank.cralaw
The scope of petitioner's duties and responsibilities did not encompass the
funding of the corporation's checks; her duties were limited to the marketing
department of the Binondo branch. [17] Under the organizational structure
of Premiere Financing Corporation, funding of checks was the sole
responsibility of the Treasury Department. Veronilyn Ocampo, former
Treasurer
of
Premiere,
testified
thus:
"Q. Will you please tell us whose (sic) responsible for the funding of
checks in Premiere?
"A. The one in charge is the Treasury Division up to the Treasury
Disbursement and then they give it directly to Jose Cabacan, President
of Premiere." [18]

Furthermore, the Regional Trial Court itself found that, since Petitioner Lina
Lim Lao was often out in the field taking charge of the marketing department
of the Binondo branch, she signed the checks in blank as to name of the
payee and the amount to be drawn, and without knowledge of the
transaction for which they were issued. [19] As a matter of company
practice, her signature was required in addition to that of Teodulo Asprec,
who alone placed the name of the payee and the amount to be drawn
thereon. This is clear from her testimony:
"Q. Will you please or will you be able to tell us the condition of this
check when you signed this or when you first saw this check?
Witness
"A. I signed the check in blank. There were no payee. No amount, no
date, sir.
"Q. Why did you sign this check in blank when there was no payee, no
amount and no date?
"A. It is in order to facilitate the transaction, sir.
"xxx

xxx

xxx

"COURT
(to witness)
"Q. Is that your practice?
Witness
"A. Procedure, Your Honor.
"COURT
That is quiet (sic) unusual. That is why I am asking that last question
if that is a practice of your office.
"A. As a co-signer, I sign first, sir.
"Q. So the check cannot be encashed without your signature, cosignature?
"A. Yes, sir.

"Atty.
(to witness)

Gonzales

"Q. Now, you said that you sign first, after you sign, who signs the
check?
"A. Mr. Teodoro Asprec, sir.
"Q. Is this Teodoro Asprec the same Teodoro Asprec, one of the
accused in all these cases?
"A. Yes, sir.
"Q. Now, in the distribution or issuance of checks which according to
you, as a co-signee, you sign. Who determines to whom to issue or to
whom to pay the check after Teodoro Asprec signs the check?
"Witness
A. He is the one.
"Atty. Gonzales
"Q. Mr. Asprec is the one in-charge in.are you telling the Honorable
Court that it was Teodoro Asprec who determines to whom to issue the
check? Does he do that all the time?
"Court
"Q.

Does

he

all

the

time?

"(to witness)
"A. Yes, Your Honor.
"Q. So the check can be negotiated? So, the check can be good only
upon his signing? Without his signing or signature the check cannot be
good?
"A. Yes, Your Honor.
"Atty.
(to witness)

Gonzales

"Q. You made reference to a transaction which according to you, you

signed this check in order to facilitate the transaction.I withdraw that
question. I will reform.
"COURT
"(for clarification to witness)
"Witness may answer.
"Q. Only to facilitate your business transaction, so you signed the
other
checks?
"Witness
"A. Yes, Your Honor.
"Q. So that when ever there is a transaction all is needed.all that is
needed is for the other co-signee to sign?
"A. Yes, Your Honor.
"COURT
(To

counsel)

"Proceed.
"Atty.
(to witness)

Gonzales

"Q. Why is it necessary for you to sign?

"A. Because most of the time I am out in the field in the afternoon, so,
in order to facilitate the transaction I sign so if I am not around they
can issue the check." [20]
Petitioner did not have any knowledge either of the identity of the payee or
the transaction which gave rise to the issuance of the checks. It was her cosignatory, Teodulo Asprec, who alone filled in the blanks, completed and
issued the checks. That Petitioner Lina Lim Lao did not have any knowledge
or connection with the checks' payee, Artelijo Palijo, is clearly evident even
from the latter's testimony, viz.:
"ATTY. GONZALES:
"Q. When did you come to know the accused Lina Lim Lao?

"A. I cannot remember the exact date because in their office Binondo,
"COURT: (before witness could finish)
"Q. More or less?
"A. It must have been late 1983.
"ATTY. GONZALES:
"Q. And that must or that was after the transactions involving alleged
checks marked in evidence as Exhibits B and C?
"A. After the transactions.
"Q. And that was also before the transaction
confirmation of sale marked in evidence as Exhibit A?

involving

that

"A. It was also.

"Q. And so you came to know the accused Lina Lim Lao when all those
transactions were already consummated?
"A. Yes, sir.
"Q. And there has never been any occasion where you transacted with
accused Lina Lim Lao, is that correct?
"A. None, sir, there was no occasion.
"Q. And your coming to know Lina Lim Lao the accused in these cases
was by chance when you happened to drop by in the office at Binondo
of the Premier Finance Corporation, is that what you mean?
"A. Yes, sir.
"Q. You indicated to the Court that you were introduced to the accused
Lina Lim Lao, is that correct?
"A. I was introduced.
"xxx

xxx

xxx

"Q. After that plain introduction there was nothing which transpired
between you and the accused Lina Lim Lao?

"A. There was none." [21]

Since Petitioner Lina Lim Lao signed the checks without knowledge of the
insufficiency of funds, knowledge she was not expected or obliged to possess
under the organizational structure of the corporation, she may not be held
liable under B.P. 22. For in the final analysis, penal statutes such as B.P. 22
"must be construed with such strictness as to carefully safeguard the rights
of the defendant." [22] The element of knowledge of insufficiency of funds
having been proven to be absent, petitioner is therefore entitled to an
acquittal.
This position finds support in Dingle vs. Intermediate Appellate Court [23]
where we stressed that knowledge of insufficiency of funds at the time of the
issuance of the check was an essential requisite for the offense penalized
under B.P. 22. In that case, the spouses Paz and Nestor Dingle owned a
family business known as "PMD Enterprises." Nestor transacted the sale of
400 tons of silica sand to the buyer Ernesto Ang who paid for the same.
Nestor failed to deliver. Thus, he issued to Ernesto two checks, signed by
him and his wife as authorized signatories for PMD Enterprises, to represent
the value of the undelivered silica sand. These checks were dishonored for
having been "drawn against insufficient funds." Nestor thereafter issued to
Ernesto another check, signed by him and his wife Paz, which was likewise
subsequently dishonored. No payment was ever made; hence, the spouses
were charged with a violation of B.P. 22 before the trial court which found
them both guilty. Paz appealed the judgment to the then Intermediate
Appellate Court which modified the same by reducing the penalty of
imprisonment to thirty days. Not satisfied, Paz filed an appeal to this Court
"insisting on her innocence" and "contending that she did not incur any
criminal liability under B.P. 22 because she had no knowledge of the
dishonor of the checks issued by her husband and, for that matter, even the
transaction of her husband with Ang." The Court ruled in Dingle as follows:
The Solicitor General in his Memorandum recommended that petitioner
be acquitted of the instant charge because from the testimony of the
sole prosecution witness Ernesto Ang, it was established that he dealt
exclusively with Nestor Dingle. Nowhere in his testimony is the name
of Paz Dingle ever mentioned in connection with the transaction and
with the issuance of the check. In fact, Ang categorically stated that it
was Nestor Dingle who received his two (2) letters of demand. This
lends credence to the testimony of Paz Dingle that she signed the
questioned checks in blank together with her husband without any
knowledge of its issuance, much less of the transaction and the fact of
dishonor.

In the case of Florentino Lozano vs. Hon. Martinez, promulgated

December 18, 1986, it was held that an essential element of the
offense is knowledge on the part of the maker or drawer of the check
of the insufficiency of his funds.
WHEREFORE, on reasonable doubt, the assailed decision of the
Intermediate Appellate Court (now the Court of Appeals) is hereby SET
ASIDE and a new one is hereby rendered ACQUITTING petitioner on
reasonable doubt. [24]
In rejecting the defense of herein petitioner and ruling that knowledge of the
insufficiency of funds is legally presumed from the dishonor of the checks for
insufficiency of funds, Respondent Court of Appeals cited People vs. Laggui
[25] and Nierras vs. Dacuycuy. [26] These, however, are inapplicable here.
The accused in both cases issued personal not corporate checks and did not
aver lack of knowledge of insufficiency of funds or absence of personal notice
of the check's dishonor. Furthermore, in People vs. Laggui [27] the Court
ruled mainly on the adequacy of an information which alleged lack of
knowledge of insufficiency of funds at the time the check was issued and not
at the time of its presentment. On the other hand, the Court in Nierras vs.
Dacuycuy [28] held mainly that an accused may be charged under B.P. 22
and Article 315 of the Revised Penal Code for the same act of issuing a
bouncing check.
The statement in the two cases that mere issuance of a dishonored check
gives rise to the presumption of knowledge on the part of the drawer that he
issued the same without funds does not support the CA Decision. As
observed earlier, there is here only a prima facie presumption which does
not preclude the presentation of contrary evidence. On the contrary, People
vs. Laggui clearly spells out as an element of the offense the fact that the
drawer must have knowledge of the insufficiency of funds in, or of credit
with, the drawee bank for the payment of the same in full on presentment;
hence, it even supports the petitioner's position.cralaw
Lack of Adequate Notice of Dishonor
There is another equally cogent reason for the acquittal of the accused.
There can be no prima facie evidence of knowledge of insufficiency of funds
in the instant case because no notice of dishonor was actually sent to or
received by the petitioner. The notice of dishonor may be sent by the
offended party or the drawee bank. The trial court itself found absent a
personal notice of dishonor to Petitioner Lina Lim Lao by the drawee bank
based on the unrebutted testimony of Ocampo "(t)hat the checks bounced
when presented with the drawee bank but she did not inform anymore the
Binondo branch and Lina Lim Lao as there was no need to inform them as

the corporation was in distress." [29] The Court of Appeals affirmed this
factual finding. Pursuant to prevailing jurisprudence, this finding is binding
on this Court. [30]
Indeed, this factual matter is borne by the records. The records show that
the notice of dishonor was addressed to Premiere Financing Corporation and
sent to its main office in Cubao, Quezon City. Furthermore, the same had not
been transmitted to Premiere's Binondo Office where petitioner had been
holding office. Likewise no notice of dishonor from the offended party was
actually sent to or received by Petitioner Lao. Her testimony on this point is
as
follows:
"Atty. Gonzales
"Q. Will you please tell us if Father Artelejo Palejo (sic) ever notified
you of the bouncing of the check or the two (2) checks marked as
Exhibit "B" or "C" for the prosecution?
"Witness
"A. No, sir.
"Q. What do you mean no, sir?
"A. I was never given a notice. I was never given notice from Father
Palejo (sic).
"COURT
(to witness)
"Q. Notice of what?
"A. Of the bouncing check, Your Honor." [31]
Because no notice of dishonor was actually sent to and received by the
petitioner, the prima facie presumption that she knew about the insufficiency
of funds cannot apply. Section 2 of B.P. 22 clearly provides that this
presumption arises not from the mere fact of drawing, making and issuing a
bum check; there must also be a showing that, within five banking days
from receipt of the notice of dishonor, such maker or drawer failed to pay the
holder of the check the amount due thereon or to make arrangement for its
payment in full by the drawee of such check.

It has been observed that the State, under this statute, actually offers the
violator "a compromise by allowing him to perform some act which operates
to preempt the criminal action, and if he opts to perform it the action is
abated." This was also compared "to certain laws [32] allowing illegal
possessors of firearms a certain period of time to surrender the illegally
possessed firearms to the Government, without incurring any criminal
liability." [33] In this light, the full payment of the amount appearing in the
check within five banking days from notice of dishonor is a "complete
defense." [34] The absence of a notice of dishonor necessarily deprives an
accused an opportunity to preclude a criminal prosecution. Accordingly,
procedural due process clearly enjoins that a notice of dishonor be actually
served on petitioner. Petitioner has a right to demand and the basic
postulates of fairness require that the notice of dishonor be actually sent to
and received by her to afford her the opportunity to avert prosecution under
B.P. 22.cralaw
In this light, the postulate of Respondent Court of Appeals that "(d)emand
on the Corporation constitutes demand on appellant (herein petitioner),"
[35] is erroneous. Premiere has no obligation to forward the notice
addressed to it to the employee concerned, especially because the
corporation itself incurs no criminal liability under B.P. 22 for the issuance of
a bouncing check. Responsibility under B.P. 22 is personal to the accused;
hence, personal knowledge of the notice of dishonor is necessary.
Consequently, constructive notice to the corporation is not enough to satisfy
due process. Moreover, it is petitioner, as an officer of the corporation, who is
the latter's agent for purposes of receiving notices and other documents,
and not the other way around. It is but axiomatic that notice to the
corporation, which has a personality distinct and separate from the
petitioner,
does
not
constitute
notice
to
the
latter.
Epilogue
In granting this appeal, the Court is not unaware of B.P. 22's intent to
inculcate public respect for and trust in checks which, although not legal
tender, are deemed convenient substitutes for currency. B.P. 22 was
intended by the legislature to enhance commercial and financial transactions
in the Philippines by penalizing makers and issuers of worthless checks. The
public interest behind B.P. 22 is thus clearly palpable from its intended
purpose. [36]
At the same time, this Court deeply cherishes and is in fact bound by duty to
protect our people's constitutional rights to due process and to be presumed
innocent until the contrary is proven. [37] These rights must be read into

any interpretation and application of B.P. 22. Verily, the public policy to
uphold civil liberties embodied in the Bill of Rights necessarily outweighs the
public policy to build confidence in the issuance of checks. The first is a basic
human right while the second is only proprietary in nature. [38] Important
to remember also is B.P. 22's requirements that the check issuer must know
"at the time of issue that he does not have sufficient funds in or credit with
the drawee bank" and that he must receive "notice that such check has not
been paid by the drawee." Hence, B.P. 22 must not be applied in a manner
which contravenes an accused's constitutional and statutory rights.cralaw
There is also a social justice dimension in this case. Lina Lim Lao is only a
minor employee who had nothing to do with the issuance, funding and
delivery of checks. Why she was required by her employer to countersign
checks escapes us. Her signature is completely unnecessary for it serves no
fathomable purpose at all in protecting the employer from unauthorized
disbursements. Because of the pendency of this case, Lina Lim Lao stood in
jeopardy for over a decade of losing her liberty and suffering the wrenching
pain and loneliness of imprisonment, not to mention the stigma of
prosecution on her career and family life as a young mother, as well as the
expenses, effort and aches in defending her innocence. Upon the other hand,
the senior official Teodulo Asprec who appears responsible for the issuance,
funding and delivery of the worthless checks has escaped criminal
prosecution simply because he could not be located by the authorities. The
case against him has been archived while the awesome prosecutory might of
the government and the knuckled ire of the private complainant were all
focused on poor petitioner. Thus, this Court exhorts the prosecutors and the
police authorities concerned to exert their best to arrest and prosecute
Asprec so that justice in its pristine essence can be achieved in all fairness to
the complainant, Fr. Artelijo Palijo, and the People of the Philippines. By this
Decision, the Court enjoins the Secretary of Justice and the Secretary of
Interior and Local Government to see that essential justice is done and the
real culprit[s] duly-prosecuted and punished.cralaw
WHEREFORE, the questioned Decision of the Court of Appeals affirming that
of the Regional Trial Court, is hereby REVERSED and SET ASIDE. Petitioner
Lina Lim Lao is ACQUITTED. The Clerk of Court is hereby ORDERED to
furnish the Secretary of Justice and the Secretary of Interior and Local
Government with copies of this Decision. No costs.cralaw
SO ORDERED.cralaw
Narvasa,
C.J.,
Davide,
Francisco, J., is on leave.

Jr.

and

Melo,

JJ.,

concur.

THIRD DIVISION

ALBINO JOSEF,

G.R. No. 146424

Petitioner,
Present:
PANGANIBAN, J., Chairman
SANDOVAL-GUTIERREZ,*
-versus-

CORONA,
CARPIO MORALES and GARCIA, JJ.

PEOPLE OF THE PHILIPPINES**

and AGUSTIN ALARILLA,
Respondents.

Promulgated:

November 18, 2005

x--------------------------------------------x

DECISION

CORONA, J.:

This is a petition for review on certiorari[1] of a decision of the Court of

Appeals in CA-G.R. CR no. 23234,[2] which affirmed the decision of the
Regional Trial Court of Malolos Bulacan convicting Albino Josef of 26 counts of
violation of BP 22, also known as the Anti-Bouncing Checks Law.[3]

By way of a preliminary clarification, this is a petition for review of the

CAs decision affirming Albino Josefs conviction for 26 counts of violation of BP
22. It is therefore a criminal case and the People of the Philippines should be
impleaded as a respondent in line with Section 2, Rule 125 of the 2000 Rules
of Criminal Procedure.[4]

Nonetheless, petitioner, in filing this petition,

incorrectly entitled it Albino Josef v. Agustin Alarilla. In accord with Section 6,

Rule 1 of the Rules of Court,[5] we have allowed petitioner Josef to
subsequently implead the People of the Philippines as respondent in this
case.

Now, the facts.

From June to August, 1991, petitioner, a Marikina-based manufacturer

and seller of shoes, purchased materials from respondent Agustin Alarilla, a
seller of leather products from Meycauayan, Bulacan, for which the former
issued a total of 26 postdated checks against his account with the Associated
Bank and Far East Bank & Trust Company (Marikina Branches). When private
respondent presented these checks for encashment, they were dishonored
because the accounts against which they were drawn were closed. Private
respondent informed petitioner of the dishonor and demanded payment of their
value. After some negotiations, petitioner drew and delivered a new set of
postdated checks in replacement of the dishonored ones. Private respondent,
in turn, returned to petitioner the originals of the dishonored postdated checks
but retained photocopies thereof.

When private respondent deposited the

replacement checks in his account with the Westmont Bank, these were also
dishonored by the drawee bank. As a result, the private respondent filed
criminal complaints against petitioner for violation of BP 22 with the Office of
the Provincial Prosecutor of Bulacan. After preliminary investigation, the
Provincial Prosecutor filed 26 Informations against petitioner with the RTC of
Bulacan for violation of BP 22, entitled People v. Josef, Criminal Case Nos.
2113-M-93 to 2138-M-93, for the original 26 postdated checks.[6]

The trial court convicted petitioner on all counts and imposed the penalty
of six months for each conviction. The Court of Appeals, in the assailed
decision, affirmed the trial court.

Petitioner admits having issued the 26 dishonored checks. However, he

claims the following defenses: 1) he has already paid private respondent the
amount of the checks in cash; 2) the trial court was incorrect to accept as
evidence photocopies of the original checks and 3) he acted in good faith. He
likewise adopts the dissenting opinion of CA Justice Martin Villarama, Jr.,[7]
which states that the penalty of imprisonment was incorrectly imposed on
petitioner in the light of Administrative Circular No. 12-2000.[8]

The petition is without merit.

The elements of violation of BP 22 are:

1)

making, drawing and issuing any check to apply on

account or for value;

2)

knowledge of the maker, drawer or issuer that at the

time of issue he does not have sufficient funds in or credit with the
drawee bank for the payment of the check in full upon its
presentment; and

3)

subsequent dishonor of the check by the drawee

bank for insufficiency of funds or credit, or dishonor of the check
for the same reason had not the drawer, without any valid cause,
ordered the bank to stop payment.[9]

All three elements are present here.

Petitioner categorically admits the fact of issuance of the checks and

their dishonor,[10] the first and third elements. He has likewise failed to rebut
the statutory presumption[11] of knowledge of insufficient funds, the second
element, which attaches if the check is presented and dishonored within 90
days from its issuance.[12] While petitioner alleges to have paid private
respondent the amount of the checks, he failed to specify if he had done so
within five banking days from receiving notice of the checks dishonor and to
present any evidence of such payment. In addition, his unsubstantiated claim
of cash payment contradicts his earlier defense that he had replaced the
checks.

Moving onto the procedural aspects of the case, petitioner claims that,
under the Best Evidence Rule, the trial court should not have admitted in
evidence the photocopies of the checks until after he had been given reasonable
notice to produce the originals. The Court of Appeals, in disposing of this
contention, said:[13]

However, in the light of the factual milieu in the present recourse,

(we) find and so declare that the Court a quo did not commit any
reversible error in admitting in evidence the photostatic copies of the
subject checks in lieu of the originals thereof in the possession of the
[Petitioner]. It bears stressing that the raison detre of the proscription

against the admission of secondary evidence in lieu or in substitution of

the original thereof is to prevent the commission of fraud on the part of the
offeror who is in possession of the best evidence but, in lieu thereof,
adduced secondary evidence:

xxx

xxx

xxx

When he testified in the Court a quo, the [Petitioner] brought out

the originals of the checks and even marked the same in evidence as
Exhibits 1 to 21, except five (5) of the subject checks, which he
claimed as missing and the Prosecution even adopted the original checks
as its evidence:

xxx

xxx

xxx

The [Petitioner] admitted, before the Court a quo, that the

originals of the subject checks were in his possession. The [Petitioner]
never alleged that the photostatic copies of the checks marked and
offered in evidence by the Prosecution were not faithful copies of
the originals of the checks. In point of fact, when he testified in the
Court a quo, he was shown, by his counsel, the photostatic copies of the
subject checks and admitted that the originals of said checks were in
his possession on his claim that he had paid the Private Complainant the
amount of P600,000.00 in cash and the balance in the form of checks
which he drew and issued to the Private Complainant by way of
replacement of the aforesaid other checks:

xxx

xxx

xxx

By his testimony, the [Petitioner] thereby admitted that

the photostatic copies of the checks marked and offered in evidence
by the Prosecution were the faithful reproductions of the originals of

the checks in his possession. Hence, the Prosecution may mark

and offer in evidence the photostatic copies of the checks.

xxx

xxx

xxx

Having admitted, albeit impliedly, that the photostatic

copies of the checks admitted in evidence by the Court a quo were the
faithful reproduction of the original copies in his possession, the Petitioner
was thus estopped from invoking Section 3, Rule 130 of the Revised
Rules of Evidence.

We agree with the Court of Appeals. By admitting that the originals were
in his possession and even producing them in open court, petitioner cured
whatever flaw might have existed in the prosecutions evidence. The fact that
these originals were all stamped account closed merely confirmed the
allegations of the respondent that the checks were dishonored by reason of the
account being closed. Because they were entirely consistent with its main
theory, the prosecution correctly adopted these originals as its own evidence. In
addition, by petitioners own admission, five of the original checks were lost,
thus rendering the photocopies thereof admissible as exceptions to the Best
Evidence Rule.[14]

Regarding petitioners allegation of good faith, suffice it to say that such a

claim is immaterial, the offense in question being malum prohibitum.[15] The
gravamen of the offense is the issuance of a bad check and therefore, whether
or not malice and intent attended such issuance is unimportant.[16]

In invoking of A.C. No. 12-2000, petitioner adopts the interpretation of

Justice Villarama to the effect that the circular mandates judges to impose
fines rather than imprisonment on violators of BP 22. In affirming the sentence
imposed by the trial court, the majority pointed out that it is only under
certain conditions that trial court judges may impose fines rather than
imprisonment. The Circular provides, in part:

In its decision in Eduardo Vaca, v. Court of Appeals the Supreme Court

(Second Division) per Mr. Justice V. Mendoza, modified the sentence
imposed for violation of B.P. Blg. 22 by deleting the penalty of
imprisonment and imposing only the penalty of fine in an amount double
the amount of the check. In justification thereof, the Court said:

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. 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.

In the recent case of Rosa Lim v. People of the Philippines, the Supreme
Court en banc, applying Vaca also deleted the penalty of imprisonment
and sentenced the drawer of the bounced check to the maximum of the
fine allowed by B.P. Blg. 22, i.e., P200,000, and concluded that such
would best serve the ends of criminal justice.

All courts and judges concerned should henceforth take note of the
foregoing policy of the Supreme Court on the matter of the imposition of
penalties for violations of B.P. Blg. 22.

Considerable confusion arose as a result of this circular. Like Justice

Villarama, many came to believe that the policy enunciated in this circular was
to altogether remove imprisonment as an alternative penalty for violation of BP
22. The circular created so much confusion, in fact, that less than three
months later, we had to issue yet another circular, Administrative Circular No.
13-2001,[17] for the specific purpose of clarifying exactly what the implications
of A.C. No. 12-2000 were. In order to put all doubts to rest, the second circular
provides:

The clear tenor and intention of Administrative Order 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 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 to be deemed a hindrance (emphasis ours).

Clearly, the imposition of either a fine or imprisonment remains entirely

within the sound discretion of the judge trying the case, based on his
assessment of the offender and the facts. Justice Villarama premised his
dissent on the absence of a distinction in A.C. No. 12-2000 between which
offenders deserve the relatively lenient penalty of a fine and which deserve
imprisonment. As A.C. No. 13-2001 states, the application of the circular is
selective and it is entirely up to the trial court judge to make that distinction,

given the circumstances obtaining. This brings us to the factual issue of

petitioners worthiness of the lighter penalty. On this, we see no reason to
disturb the findings of the trial court.

WHEREFORE, the petition is hereby DENIED. The decision of the Court

of Appeals in CA-G.R. CR No. 23234 is hereby AFFIRMED.

Costs against petitioner.

SO ORDERED.