ESTFA THROUGH UNFAITHFULNESS OR ABUSE OF CONFIDENCE

[G.R. No. 91041 :  December 10, 1990.]

192 SCRA 277
JOSE A. SADDUL, JR., Petitioner, vs. THE HON. COURT OF APPEALS and
THE PEOPLE OF THE PHILIPPINES, Respondents.
 
GRIÑO-AQUINO, J.:

FACTS: SADDUL WAS DIRECTOR, E-VP AND GM FOR AMPI (AMALGAMATED

MOTORS PHILS INC).a wholly-owned subsidiary of British Leyland. It was the sole
distributor in the Philippines of British and Japanese heavy equipment, trucks,
farm implements, spare parts, and other automotive products and machines
manufactured by Leyland International, Avelyn Barfourd, Mitsubishi, and
Furokawa.Cuevas had been a dealer of AMPI for government sales BECAME THE
PRESIDENT OF THE COMPANY.In 1985, LAND ROVER supplied P1.5 million worth
of spare parts to the Armed Forces of the Philippines (AFP) through AMPI, but the
merchandise were returned to AMPI because they were not the correct
items.THEN THE REGIONAL AREA MANAGER SENT A LETTER TO SADDUL
AUTHORIZING HIM TO DISPOSE THE ITEMS, GAVE 20% TO AMPI AS HANDLING
FEE AND THE REST TO OPEN AN ACCOUNT FOR LAND ROVER.BUT LATER GAVE
HIM FURTHER INSTRUCTION TO HOLD THE 20% PENDING THE STOCKTAKE OF
AMPI.SADDUL LEFT AMPI AND OPENED HIS OWN COMPANY TO WHICH HE
BECAME THE SOLE DISTRIBUTOR FOR LAND ROVER.
ISSUE: WHETHER ACCUSED IS GUILTY OF ESTAFA.
RULING: One of the ways of committing the crime of estafa with unfaithfulness or
abuse of confidence is:
"(b) By misappropriating or converting to the prejudice of another, money,
goods, or any other personal property received by the offender in trust or
on commission, or for administration, or under any other obligation
involving the duty to make delivery of or to return the same, even though
such obligation be totally or partially guaranteed by a bond; or by denying
having received such money, goods, or other property." (Art. 315, par. 1
subpar. b, Rev. Penal Code.).chanrobles virtual law library

The appropriation or conversion of money or property received, to the prejudice

of the owner thereof, is the essence of estafa through misappropriation (Ramirez,
9 Phil. 67). The words "convert" and "misappropriate" connote an act of using or
disposing of another's property as if it were one's own, or of devoting it to a
purpose or use different from that agreed upon. To misappropriate to one's own
use includes, not only conversion to one's personal advantage, but also every
attempt to dispose of the property of another without right. (Webber vs.  Court of
Appeals, 57 OG 2937; People vs.  Panes, 37 Phil. 118.)
Conversion is an unauthorized assumption and exercise of the right of ownership
over goods or personal chattels belonging to another, resulting in the alteration of
their condition or the exclusion of the owner's rights. It takes place when a
person actually appropriates the property of another to his own benefit, use, and
enjoyment (Trinidad vs.  Court of Appeals, 53 OG 731 citing Bouvier's Law
Dictionary).
The elements of the crime of embezzlement or estafa with abuse of confidence
are:
 (a) that personal property is received in trust, on commission, for
administration or under any other circumstance involving the duty to make
delivery of or to return the same, even though the obligation is
guaranteed by a bond;
(b) that there is conversion or diversion of such property by the person
who has so received it or a denial on his part that he received it;
(c) that such conversion, diversion or denial is to the injury of another,
and
(d) that there be demand for the return of the property, (p. 247, Vol. III,
1988 Ed., Revised Penal Code by R.C. Aquino)
The first element of the crime does not exist in this case because Saddul did not
receive the Leyland Automotive spare parts from Cuevas or AMPI in trust, on
commission, for administration, or under a duty to make delivery of, or return the
same.Saddul simply complied with the directive in Land Rover's letter of March 4,
1985 that the proceeds be "placed into a separate client account which will be
available to LRPE or any other party authorized by LRPE" (Exh. 1 or F). Implicit in
this directive was an injunction not to deliver the proceeds to AMPI. The third
element of the crime charged is absent. The fourth and final element of demand
:-cralaw

for the return of the property is also lacking. AMPI or Cuevas made no demand
for the return of the spare parts sold by Saddul because Cuevas knew that those
spare parts were to be sold for the account of Land Rover.
ACQUITTED
 

TRUST RECEIPTS
PD 115--TRUST RECEIPTS LAW

[G.R. No. 82495 :  December 10, 1990.]

192 SCRA 246
ALLIED BANKING CORPORATION, Petitioner, vs. HON. SECRETARY
SEDFREY ORDOÑEZ (Public Respondent) and ALFREDO CHING (Private
Respondent), Respondents.
 
PADILLA, J.:
FACTS: On 23 January 1981, Philippine Blooming Mills (PBM, for short) thru its
duly authorized officer, private respondent Alfredo Ching, applied for the issuance
of commercial letters of credit with petitioner's Makati branch to finance the
purchase of 500 M/T Magtar Branch Dolomites and one (1) Lot High Fired
Refractory Sliding Nozzle Bricks.
Petitioner issued an irrevocable letter of credit in favor of Nikko Industry Co., Ltd.
(Nikko) by virtue of which the latter drew four (4) drafts which were accepted by
PBM and duly honored and paid by the petitioner bank. :- nad

To secure payment of the amount covered by the drafts, and in consideration of

the transfer by petitioner of the possession of the goods to PBM, the latter as
entrustee, thru private respondent, executed four (4) Trust Receipt Agreements
with maturity dates on 19 May, 3 and 24 June 1981 acknowledging petitioner's
ownership of the goods and its (PBM'S) obligation to turn over the proceeds of
the sale of the goods, if sold, or to return the same, if unsold within the stated
period.
Out of the said obligation resulted an overdue amount of P1,475,274.09. Despite
repeated demands, PBM failed and refused to either turn over the proceeds of the
sale of the goods or to return the same.
On 7 September 1984, petitioner filed a criminal complaint against private
respondent for violation of PD 115 before the office of the Provincial Fiscal of
Rizal.the Fiscal found a prima facie case for violation of PD 115 on four (4) counts
and filed the corresponding information in court.
Private respondent appealed the Fiscal's resolution to the Department of Justice
on three (3) grounds:
1. Lack of proper preliminary investigation;
2. The Provincial Fiscal of Rizal did not have jurisdiction over the case, as
respondent's obligation was purely civil;
3. There had been a novation of the obligation by the substitution of the person
of the Rehabilitation Receivers in place of both PBM and private respondent
Ching.
Then Secretary of Justice (now Senator) Neptali A. Gonzales, in a 24 September
1986 letter/resolution, 1 held:
"Your contention that respondent's obligation was purely a civil one, is without
any merit. The four (4) Trust Receipt Agreements entered into by respondent and
complainant appear regular in form and in substance.
A motion for reconsideration alleged that, as PBM was under rehabilitation
receivership, no criminal liability can be imputed to herein respondent Ching.
Undersecretary Silvestre H. Bello III denied said motion. The pertinent portion of
the denial resolution states:
:-cralaw

"It cannot be denied that the offense was consummated long before the
appointment of rehabilitation receivers. The filing of a criminal case against
respondent Ching is not only for the purpose of effectuating a collection of a debt
but primarily for the purpose of punishing an offender for a crime committed not
only against the complaining witness but also against the state. The crime of
estafa for violation of the Trust Receipts Law is a special offense or mala
prohibita.
"Likewise untenable is your contention that 'rehabilitation proceedings must stay
the attempt to enforce a liability in view of Section 4 of P.D. No. 1758.' Section 4
of P.D. No. 1758, provides, among others: '. . . Provided, further, that upon
appointment of a management committee, rehabilitation receiver, board or body,
pursuant to this Decree, all actions for claims against corporations, partnerships
or associations under management or receivership pending before any court,
tribunal, board or body shall be suspended accordingly.
"You will note that the term 'all actions for claims' refer only to actions for money
claims but not to criminal liability of offenders."
Another motion for reconsideration was filed by respondent.
Apparently, the trust receipt agreements were executed as security for the
payment of the drafts. As such, the main transaction was that of a loan. . . . In
essence, therefore, the relationship between the Bank and the corporation,
consequently, the respondent herein likewise included, is that of debtor and
creditor.
This time, petitioner Allied Bank filed a motion for reconsideration of the Ordoñez
resolution
petitioner is now before this Court praying for writs of Certiorari and prohibition to
annul the 11 January and 17 February 1988 DOJ rulings, mainly on two (2)
grounds:
1. public respondent is without power or authority to declare that a violation of
PD 115 is not criminally punishable, thereby rendering a portion of said law
inoperative or ineffectual.
: nad

2. public respondent acted with grave abuse of discretion in holding that the
goods covered by the trust receipts are outside the contemplation of PD 115.
Does the penal provision of PD 115 (Trust Receipts Law) apply when the goods
covered by a Trust Receipt do not form part of the finished products which are
ultimately sold but are instead, utilized/used up in the operation of the equipment
and machineries of the entrustee-manufacturer?
The answer must be in the affirmative, Section 4 of said PD 115;
"Sec. 4. What constitutes a trust receipt transaction. — A trust receipt
transaction, within the meaning of this Decree, is any transaction by and between
a person referred to in this Decree as the entrustee, and another person referred
to in this Decree as the entrustee, whereby the entruster, who owns or holds
absolute title or security interests over certain specified goods, documents or
instruments, releases the same to the possession of the entrustee upon the
latter's execution and delivery to the entruster of a signed document called a
'trust receipt' wherein the entrustee binds himself to hold the designated goods,
documents or instruments in trust for the entruster and to sell or otherwise
dispose of the goods, documents or instruments with the obligation to turn over
to the entruster the proceeds thereof to the extent of the amount owing to the
entruster or as appears in the trust receipt or the goods, documents or
instruments themselves, if they are unsold or not otherwise disposed of, in
accordance with the terms and conditions specified in the trust receipt, . . ."
The penal provision of PD 115 encompasses any act violative of an obligation
covered by the trust receipt; it is not limited to transactions in goods which are to
be sold (retailed), reshipped, stored or processed as a component of a product
ultimately sold.
To uphold the Justice Department's ruling would contravene not only the letter
but the spirit of PD 115.
GRANTED

G.R. No. 80544 July 5, 1989

ROSEMARIE M. LEE, petitioner,
vs.
HON. JOSEFINA CRUZ RODIL, Judge of Regional Trial Court, Branch X, Manila and
PEOPLE OF THE PHILIPPINES, respondents.

GUTIERREZ, JR., J.:

FACTS: That on or about July 26,1982 in the City of Manila, Philippines, the said
accused, did then and there wilfully, unlawfully and feloniously defraud the
Philippine Bank of Communications, a banking institution duly organized and
existing under the laws of the Republic of the Philippines, in the following
manner, to wit: the said accused, being then the duly authorized representative
of C.S. Lee Enterprises, Inc., after opening letter of credit with the said bank
under L/C No. 63251 dated July 26, 1982, for the amount of P 154,711.97,
coveting the purchase price of a certain merchandise consisting of 23 ctns. Lab.
Culture Media in favor of said bank, received from the latter the necessary
document and thereafter the said merchandise and forthwith, executed trust
receipt for, the aforesaid merchandise dated July 26, 1982, by virtue of which,
the said accused obligated herself to hold said merchandise in trust with liberty to
sell the same in cash for the account of the said bank and to account for the
proceeds of the sale thereof, if sold or of returning the said merchandise to said
bank in case of failure to sell the same, on or before October 24, 1982, but the
said accused, once in possession of the said merchandise, far from complying
with her aforesaid obligation and despite the lapse of a long period of time and
repeated demands made upon her to that effect, did then and there willfully,
unlawfully and feloniously, with intent to defraud, misappropriate, misapply and
convert the said merchandise or the value thereof, to her own personal use and
benefit, to the damage and prejudice of the said Philippine Bank of
Communications in the amount of P154,711.97, Philippine currency. (Rollo, p. 19)

The accused moved to quash this information on the ground that the facts
charged do not constitute an offense.

ISSUE: whether or not the violation of a trust receipt agreement constitutes the
crime of estafa.

RULING: We answer in the affirmative in the light of a specific provision in P.D.

No. 115.

Sec. 13 of P.D. No. 115 provides:

... Penalty clause. — The failure of an entrustee to turn over the proceeds of the
sale of the goods, documents or instruments covered by a trust receipt to the
extent of the amount owing to the entruster or as appears in the trust receipt or
to return said goods, documents or instruments if they were not sold or disposed
of in accordance with the terms of the trust receipt shall constitute the crime of
estafa, punishable under the provisions of Article Three Hundred and Fifteen,
Paragraph One (b) of Act Numbered Three Thousand Eight Hundred and Fifteen,
as amended, otherwise known as the Revised Penal Code. If the violation or
offense is committed by a corporation, partnership, association or other juridical
entities, the penalty provided for in this Decree shall be imposed upon the
directors, officers, employees or other officials or persons therein responsible for
the offense without prejudice to the civil liabilities arising from the criminal
offense. (Italics supplied).

The petitioner questions the constitutionality of Sec. 13 of P.D. 115. She contends
that it is violative of the constitutional right that "No person shall be imprisoned
for debt or non-payment of a poll tax".

The petitioner has failed to make out a strong case that P.D. 115 conflicts with
the constitutional prohibition against imprisonment for non-payment of debt. A
convincing showing is needed to overcome the presumption of the validity of an
existing statute.

The criminal liability springs from the violation of the trust receipt.

We bear in mind the nature of a trust receipt agreement. This Court pronounced
in the Vintola cases, 150 SCRA 578 (1987); G.R. No. 78671, March 25,1988 that:
... A letter of credit-trust receipt arrangement is endorsed with its own distinctive
features and characteristics. Under that set-up, a bank extends a loan covered by
the letter of credit, with the trust receipt as a security for the loan. In other
words, the transaction involves a loan feature represented by the letter of credit,
and a security feature which is in the covering trust receipt. (Emphasis supplied)

Therefore, the loan feature is separate and distinct from the trust receipt. The
violation of a trust receipt committed by disposing of the goods covered thereby
and failing to deliver the proceeds of such sale has been squarely made to fall
under Art. 315 (1) (b) of the Revised Penal Code, which provides:

... Swindling (estafa).-Any person who shall defraud another by any of the means
mentioned herein below shall be punished by:

xxx xxx xxx

a. With unfaithfulness or abuse of confidence, namely:

xxx xxx xxx

b. By misappropriating or converting, to the prejudice of another, money, goods,

or any other personal property received by the offender in trust or on
commission, or for administration, or under any other obligation involving the
duty to make delivery of or to return the same, even though such obligation be
totally or partially guaranteed by a bond; or by denying having received such
money, goods, or other property.

The fact that the bank does not become the factual owner of the goods does not
make the law unconstitutional (See the Vintola cases, supra) The language of the
above- mentioned penal provision has been clarified by P.D. 115. The person who
is prejudiced through the misappropriation or conversion of the goods need not
be the owner, thereof; if such had been the intention of the authors of the Code,
the phrase "to the prejudice of another" would have read "to the prejudice of the
owner." (People v. Yu Chai Ho, 53 Phil. 874, 877-878).

Moreover, we agree with the Solicitor General who expressed the policy behind
the law:

Verily, P.D. 115 is a declaration by the legislative authority that, as a matter of

public policy, the failure of a person to turn over the proceeds of the sale of goods
covered by a trust receipt or to return said goods if not sold is a public nuisance
to be abated by the imposition of penal sanctions. As held in Lozano vs. Martinez,
(146 SCRA 323,338):

... certainly it is within the authority of the lawmaking body to prescribe certain
acts deemed pernicious and inimical to public welfare. Acts mala in se are not the
only acts that the law can punish. An act may not be considered by society as
inherently wrong, hence, not malum in se but because of the harm that it inflicts
on the community, it can be outlawed and criminally punished as malum
prohibitum. The State can do this in the exercise of its police power.

In fine, P.D. 115 is a valid exercise of police power and is not repugnant to the
constitutional provision on non-imprisonment for non-payment of debt.
AFFIRMED

 ESTAFA THROUGH FALSE PRETENSES, FRAUDULENT ACTS OR MEANS

G.R. No. 93849 December 20, 1991

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
DICK ONG y CHAN, LINO MORFE y GUTIERREZ, RICARDO VILLARAN and
LUCILA TALABIS, accused, DICK ONG y CHAN, accused-appellant.

MEDIALDEA, J.:

FACTS: ACCUSED-APPELLANT ISSUED 11 CHECKS BUT WAS TURNED DOWN BY

THE DRAWEE BANK FOR INSUFFICIENT FUNDS.On the other hand, accused Lucila
Talabis admitted that she approved the withdrawals of the accused-appellant
against uncleared checks. However, she explained that her approval thereof was
in accordance with the instruction of then bank manager Lino Morfe; that this
accommodation given or extended to the accused-appellant had been going on
even before she started giving the same accommodation; that this was common
practice in the bank; that she approved those withdrawals together with one
other bank official, namely, either the bank manager, the bank accountant, the
other bank cashier, or the bank assistant cashier; and that they reported those
withdrawals against, and the dishonor of, the subject checks always sending
copies of their reports to the head office.

Accused Ricardo Villaran testified on his behalf that the accused-appellant was
able to withdraw against his uncleared checks because of the accommodations
extended to him by bank officials Lino Morfe, co-accused Lucila Talabis, Grace
Silao, Precy Salamat, and Cora Gascon; that this practice of drawing against
uncollected deposits was a common practice in branches of the Bank; that on
December 14, 1978, the accused-appellant withdrew the sum of P75,000.00
against his uncleared checks; that on December 21, 1978, the accused-appellant
deposited several checks in the total amount of P197,000.00 and withdrew on the
same date the sum of P120,000.00; that on January 23, 1979, the accused-
appellant again deposited several checks in the aggregate sum of P260,000.00
and withdrew also on the same date, the amount of P28,000.00; and that he
(Villaran) approved these three withdrawals of the accused-appellant against his
uncollected deposits.

ISSUE: WHETHER ACCUSED IS GUILTY OF ESTAFA

RULING: We are convinced that the accused-appellant is innocent of the crime

charged against him.
Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic
Act No. 4885, provides:

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

..., provided that in the four cases mentioned, the fraud be committed by any of
the following means:

x x x           x x x          x x x

2. By means of any of the following false pretenses or fraudulent acts executed

prior to or simultaneously with the commission of the fraud:

x x x           x x x          x x x

(d) By post-dating a check, or issuing a check in payment of an obligation when

the offender had no funds in the bank, or his funds deposited therein were not
sufficient to cover the amount of the check. The failure of the drawer of the check
to deposit the amount necessary to cover his check within three (3) days from
receipt of notice from the bank and/or the payee or holder that said check has
been dishonored for lack or insufficiency of funds shall be prima facie evidence of
deceit constituting false pretense or fraudulent act.

It goes without saying that with respect to the subject checks wherein the
accused-appellant was the issuer/drawer, the first part of the first element of
Article 315, paragraph 2(d) of the Revised Penal Code is applicable. However, this
statement will lose its significance in Our next discussion.
Regarding the second part of the first element of Article 315, paragraph 2(d) of
the Revised Penal Code, the accused-appellant alleges that when he deposited
the subject checks in his savings account, it was clearly not in payment of an
obligation to the Bank. The Office of the Solicitor General misses this point of the
accused-appenant.
This view is not supported by the facts of this case. Rather, the evidence for the
prosecution proved that the Bank on its own accorded him a drawn against
uncollected deposit (DAUD) privilege without need of any pretensions on his part
(pp. 7-8, supra). Moreover, this privilege was not only for the subject checks, but
for other past transactions. Fernando Esguerra and Felix Hocson even testified
that in some instances prior to July 1, 1980, especially where the depositor is an
important client, the Bank relaxed its rule and internal policy against uncleared
checks and uncollected deposits, and allowed such depositor to withdraw against
his uncleared checks and uncollected deposits. Admittedly, the accused-appellant
was one of the important depositors of the Bank (pp. 24-25, Rollo). Granting, in
gratia argumenti, that he had in fact acted fraudulently, he could not have done
so without the active cooperation of the Banks employees. Therefore, since Lucila
Talabis and Ricardo Villaran were declared innocent of the crimes charged against
them, the same should be said for the accused-appellant (see People v.
Jalandoni, G.R. No. 57555, May 30, 1983, 122 SCRA 588). True it is that the
Bank suffered damage in the amount of P575,504.00 but the accused-appellant's
liability thereon is only civil.
ACQUITTED
BOUNCING CHECKS

G.R. Nos. 59568-76               January 11, 1990

PETER NIERRAS, petitioner,
vs.
HON. AUXENCIO C. DACUYCUY and HON. ANTONIO S. LOPEZ, in their capacity as
Presiding Judge, Branch IV, Court of First Instance of Leyte, Palo, Leyte, and City
Fiscal of Tacloban City, Leyte, respectively, respondents.

PARAS, J.:

FACTS: Before Us is a petition for certiorari with preliminary injunction for the annulment

of the resolution dated September 17, 1981 of the respondent Judge Auxencio C.
Dacuycuy in nine (9) criminal cases, entitled "People of the Philippines v. Peter Nierras"
docketed as Criminal Cases Nos. 4379, 4380, 4381, 4382, 4383, 4384, 4385, 4386 and
4387, for estafa under Article 315 (2-d) of the Revised Penal Code which denied
petitioner's motion to quash. Said motion to quash was filed by petitioner on the ground
of double jeopardy as these offenses were already included in Criminal Cases Nos.
3790, 3791, 3792, 3793, 4085, 4122, 4123, 4124, and 4125, entitled "People of the
Philippines v. Peter Nierras," for violation of the Bouncing Checks Law or Batas
Pambansa Blg. 22, pending before the lower court. In both sets of criminal cases,
petitioner entered a plea of not guilty upon arraignment before the lower court.

It appears that petitioner, a customer of Pilipinas Shell Petroleum Corporation, purchased

oil products from it. Simultaneous with the delivery of the products, he issued nine (9)
checks in payment thereof. Upon presentation to the Philippine National Bank at Naval,
Leyte, said checks were dishonored for the reason that his account was already closed.
Thereafter, Pilipinas Shell Petroleum Corporation repeatedly demanded of petitioner
either to deposit funds for his checks or pay for the oil products he had purchased but he
failed and refused to do either.

Petitioner argues that he would be placed in double jeopardy as all the elements of
estafa under Article 315 (2-d) of the Revised Penal Code are also present in that crime
punishable under Batas Pambansa Bilang 22 namely (1) "the postdating or issuance of a
check in payment of an obligation contracted at the time the check was issued; (2) lack or
insufficiency of funds to cover the check and (3) damage to the payee thereof."

ISSUE: WHETHER DOUBLE JEOPARDY CAN BE INVOKED.

RULING: While the filing of the two sets of Information under the provisions of Batas
Pambansa Bilang 22 and under the provisions of the Revised Penal Code, as amended,
on estafa, may refer to identical acts committed by petitioner, the prosecution thereof
cannot be limited to one offense, because a single criminal act may give rise to a
multiplicity of offenses and where there is variance or differences between the elements
of an offense in one law and another law as in the case at bar there will be no double
jeopardy because what the rule on double jeopardy prohibits refers to identity of
elements in the two (2) offenses. Otherwise stated prosecution for the same act is not
prohibited. What is forbidden is prosecution for the same offense. Hence, the mere filing
of the two (2) sets of information does not itself give rise to double jeopardy (People v.
Miraflores, 115 SCRA 570).

In the instant petition, certiorari is not the proper remedy. We have held in Acharon
v. Purisima, et al. (13 SCRA 309) that "when a motion to quash a criminal case is denied,
remedy is not certiorari but to go to court without prejudice to reiterating special defenses
invoked in the motion, and if after trial on the merits, an adverse decision is rendered, to
appeal therefrom in the manner authorized by law," invoking the rule laid down in People
v. Magdaluyo (1 SCRA 990). If the petitioner cannot appeal at this state of the
proceeding, it is because there is still a necessity for the trial on the merits wherein the
parties may present proofs in support of their contentions and not because the remedy of
appeal is unavailing.

DISMISSED- PETITION FOR CERTIORARI FOR LACK OF MERIT

G.R. No. 119178 June 20, 1997

LINA LIM LAO, petitioner,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

PANGANIBAN, J.:

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

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

ISSUES: 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.
RULING: 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 . . ."   The element of
22

knowledge of insufficiency of funds having been proven to be absent, petitioner is

therefore entitled to an acquittal.

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.

In this light, the postulate of Respondent Court of Appeals that "(d)emand on the
Corporation constitutes demand on appellant (herein petitioner),"   is erroneous.
35

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.

ACQUITTED

G.R. Nos. 104238-58             June 3, 2004

PEOPLE OF THE PHILIPPINES, appellee,

vs.
CORA ABELLA OJEDA, appellant.

CORONA, J:

FACTS: Appellant Cora Abella Ojeda used to buy fabrics (telas) from complainant Ruby
Chua. For the three years approximately she transacted business with Chua, appellant
used postdated checks to pay for the fabrics she bought. On November 5, 1983,
appellant purchased from Chua various fabrics and textile materials worth ₱228,306 for
which she issued 22 postdated checks bearing different dates and amounts.

Chua later presented to the bank for payment check no. 033550 dated November 5,
1983 in the amount of ₱17,100 3 but it was dishonored due to "Account Closed." 4 On April
10, 1984, Chua deposited the rest of the checks but all were dishonored for the same
reason.5 Demands were allegedly made on the appellant to make good the dishonored
checks, to no avail.

RULING: It is clear from the foregoing that complainant merely presumed that appellant
received the demand letter prepared and sent by her lawyer. She was not certain if
appellant indeed received the notice of dishonor of the checks. All she knew was that a
demand letter was sent by her lawyer to the appellant. In fact, right after complainant
made that presumption, her lawyer filed the criminal cases against appellant at the
Fiscal’s office28 without any confirmation that the demand letter supposedly sent through
registered mail was actually received by appellant.

With the evident lack of notice of dishonor of the checks, appellant cannot be held guilty
of violation of BP 22. The lack of such notice violated appellant’s right to procedural due
process. "It is a general rule that when service of notice is an issue, the person alleging
that the notice was served must prove the fact of service." 29 The burden of proving receipt
of notice rests upon the party asserting it and the quantum of proof required for
conviction in this criminal case is proof beyond reasonable doubt.

This Court therefore cannot, with moral certainty, convict appellant of violation of BP 22.
The evident failure of the prosecution to establish that she was given the requisite notice
of dishonor justifies her acquittal. 30

As held in Lao vs. Court of Appeals:31

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

Stated otherwise, responsibility under BP 22 was personal to appellant; hence, personal

knowledge of the notice of dishonor was necessary. Consequently, while there may have
been constructive notice to appellant regarding the insufficiency of her funds in the bank,
it was not enough to satisfy the requirements of procedural due process.

Finally, it is worth mentioning that notice of dishonor is required under both par. 2(d) Art.
315 of the RPC and Sec. 2 of BP 22. While the RPC prescribes that the drawer of the
check must deposit the amount needed to cover his check within three days from receipt
of notice of dishonor, BP 22, on the other hand, requires the maker or drawer to pay the
amount of the check within five days from receipt of notice of dishonor. Under both laws,
notice of dishonor is necessary for prosecution (for estafa and violation of BP 22).
Without proof of notice of dishonor, knowledge of insufficiency of funds cannot be
presumed and no crime (whether estafa or violation of BP 22) can be deemed to exist.

REVERSED. SET ASIDE

G.R. No. 131714 November 16, 1998

EDUARDO R. VACA and FERNANDO NIETO, petitioners,

vs.
COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.

MENDOZA, J.:

FACTS: Petitioner Eduardo R. Vaca is the president and owner of Ervine

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

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

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

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

B. Respondent Court gravely erred in basing conviction on the alleged weakness

of the evidence of the defense rather than on the strength of the evidence of the
prosecution.

C. Respondent Court erred in not acquitting petitioners on grounds of "mistake of

fact" and "lack of knowledge."

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

First. The elements of the offense penalized under B.P. Blg. 22 are: (1) making,
drawing, and issuance of any check to apply to account or for value; (2) knowledge
of the maker, drawer, or issuer that at the time of issue he does not have sufficient
funds in or credit with the drawee bank for the payment of the check in full upon
its presentment; and (3) subsequent dishonor of the check by the drawee bank for
insufficiency of funds or credit, or dishonor of the check for the same reason had
not the drawer, without any valid cause, ordered the bank to stop paymnent.  The4

maker's knowledge is presumed from the dishonor of the check for insufficiency of
funds.  Thus, §2 of B.P. Blg. 22 expressly provides:
5

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.

Second. The affidavit of desistance of the GARDS president deserves no more

than passing mention. The claim that this case was simply the result of a
misunderstanding between GARDS and petitioners and that the former did not
really suffer any damage from the dishonor of the check is flimsy. After
prosecuting the case below with tenacity, complainants going so far as to file
another complaint after their first one had been dismissed, it is trifling with this
Court for complainants to now assert that the filing of their case was simply a
mistake. It is for reasons such as this the affidavit of desistance, like retractions,
are generally disfavored.  The affidavit in this case, which was made after
9

petitioners' conviction, is nothing but a last-minute attempt to save them from

punishment. Even if the payee suffered no damage as a result of the issuance of
the bouncing check, the damage to the integrity of the banking system cannot be
denied. Damage to the payee is not an element of the crime punished in B.P. Blg.
22.

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

AFFIRMED

OTHER DECEITS