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_______________
G.R. No. 152666. April 23, 2008.*
MARCIANO TAN, petitioner, vs. PHILIPPINE
COMMERCIAL INTERNATIONAL BANK, respondent.
Criminal Law; Bouncing Checks Law; Elements Necessary for
Conviction for Violation of B.P. Blg. 22.—Unless the following
elements are shown to have been proven by the prosecution, an
accused will not be convicted for violation of B.P. Blg. 22: 1. The
accused makes, draws or issues any check to apply to account or
for value; 2. The accused knows at the time of the issuance that he
or she does not have sufficient funds in, or credit with, the drawee
bank for the payment of the check in full upon its presentment; and
3. The check is subsequently dishonored by the 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. (Italics supplied) While issuing
of a bouncing check is malum prohibitum, the prosecution is not
excused from its responsibility of proving beyond reasonable
doubt all the elements of the offense.
Same; Same; Same; Respecting the second element of the
crime, the prosecution must prove that the accused knew, at the
time of issuance, that he does not have sufficient funds or credit for
the full payment of the check upon its presentment.—Respecting
the second element of the crime, the prosecution must prove that
the accused knew, at the time of issuance, that he does not have
sufficient funds or credit for the full payment of the check upon its
presentment. The element of “knowledge” involves a state of mind
that obviously would be difficult to establish, hence, the statute
creates a prima facie presumption of knowledge on the
insufficiency of funds or credit coincidental with the attendance of
the two other elements.
Same; Same; Same; In order to create such presumption, it must
be shown that the drawer or maker received a notice of dishonor
and, within five banking days thereafter, failed to satisfy the
amount of the check or arrange for its payment; Presumption is not
conclusive as it may be rebutted by full payment; Payment is a
complete defense
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* SECOND DIVISION.
533
VOL. 552, APRIL 23, 2008 533
Tan vs. Philippine Commercial International Bank
that would lie regardless of the strength of the evidence presented
by the prosecution.—In order to create such presumption, it must
be shown that the drawer or maker received a notice of dishonor
and, within five banking days thereafter, failed to satisfy the
amount of the check or arrange for its payment. The above-quoted
provision creates a presumption juris tantum that the second
element prima facie exists when the first and third elements of
the offense are present. The presumption is not conclusive,
however, as it may be rebutted by full payment. If the maker or
drawer pays, or makes arrangement with the drawee bank for the
payment of the amount due within the five-day period from notice
of the dishonor, he or she may no longer be indicted for such
violation. It is a complete defense that would lie regardless of the
strength of the evidence presented by the prosecution. In essence,
the law affords the drawer or maker the opportunity to avert
prosecution by performing some acts that would operate to
preempt the criminal action, which opportunity serves to mitigate
the harshness of the law in its application.
Same; Same; Same; Only a full payment at the time of its
presentment or during the five-day grace period could exonerate
one from criminal liability under B.P. Blg. 22 and that subsequent
payments can only affect the civil, but not the criminal, liability.—
It is a general rule that only a full payment at the time of its
presentment or during the five-day grace period could
exonerate one from criminal liability under B.P. Blg. 22 and that
subsequent payments can only affect the civil, but not the
criminal, liability.
PETITION for review on certiorari of a decision of the
Court of Appeals.
   The facts are stated in the opinion of the Court.
 Singson, Valdez & Associates for petitioner.
  Divina, Matibag, Magturo, Banzon, Buenaventura and
Yusi for respondent.
534
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534 SUPREME COURT REPORTS ANNOTATED Tan vs. Philippine Commercial International Bank
Tan vs. Philippine Commercial International Bank
MTT thus issued five checks postdated August,
September, October, November, and December 1990 each
CARPIO-MORALES, J.:
for P716,666.66 and another check in January 1991 for
From the March 19, 2002 Decision1 of the Court of
P716,666.70 or in the total amount of P4,300,000.
Appeals affirming that of the Makati Regional Trial Court
PCIB thereupon issued the Usance LC in favor of the
(RTC) convicting Marciano Tan, herein petitioner, of nine
supplier, which was to mature in October 1991.
(9) counts of violation of Batas Pambansa Blg. 22 (B.P. Blg.
The tourist buses arrived in October 1990 and were
22) or the Bouncing Checks Law, petitioner filed the
delivered to MTT, covered by Trust Receipts with PCIB as
present petition for review on certiorari.
entruster and MTT as entrustee.
The following undisputed facts spawned the filing of
Of the six checks that MTT issued to PCIB, the first five
the nine (9) informations for violation of BP Blg. 22 against
representing a total amount of P3,583,333 were cleared but
petitioner.
not the last one dated January 1991. PCIB soon demanded
Master Tours and Travel (MTT), of which petitioner was
settlement of this dishonored check from MTT. At the same
executive vice-president, applied on July 16, 1990 for a 360-
time, PCIB required MTT to pay the exchange differential
day Usance Letter of Credit (LC) with respondent
on the peso-dollar rate which was P23.7884 to US$1 in July
Philippine Commercial International Bank (PCIB) for the
1990 when the LC was issued to P28.56 to US$1 in
importation of four tourist buses with a total value of
January 1991 when the last postdated check matured but
US$430,0002 from Daewoo Corporation of Seoul, Korea (the
was dishonored. The exchange differential was computed
supplier), which was agreed upon by the parties to amount
by PCIB to amount to P2,061,331.20. MTT agreed to pay
to “closed [sic] to P10 Million Pesos”3 computed on the basis
the exchange differential, albeit it later claimed that its
of the then prevailing rate of exchange of the dollar to the
agreement to pay the differential was a “mistake”5 since no
peso.
such condition was incorporated in their contract. The
As a condition to the grant of the LC, PCIB and MTT
exchange differential, of P2,061,331.20 when added to the
entered into a Memorandum of Agreement4 under which
P716,666.70 face value of the dishonored check, totalled
the initial drawings of the supplier in the amount of
P2,777,999.86.
US$5,700 against the LC would be paid by PCI Leasing
MTT thus issued 14 postdated checks of P198,428.42,
and Finance Inc. (PCILF) out of the proceeds of MTT’s
payable every 15 days, the first to start on February 28,
amortized loan with it, and any subsequent drawings
1991.
against the LC by the supplier in excess of the said amount
Of the 14 checks, only the first five were honored, the
would be paid out of the proceeds of Treasury Bills which
proceeds of which totaled P992,142.10. The other nine,
PCIB would purchase out of the proceeds of post-dated
those dated May 15, 1991 et seq. in the total amount of
checks to be issued by MTT.
P1,785,855.78, were dishonored—the subject of the nine
informations at bar.
_______________
MTT, having suffered financial reverses, availed of
1 Penned by Court of Appeals Associate Justice Conrado M. Vasquez, provision No. 7 of the Trust Receipt reading.
Jr. with the concurrence of Associate Justices Andres B. Reyes, Jr. and
Amelita G. Tolentino. CA Rollo, pp. 200-208. _______________
2 TSN, May 3, 1995, p. 8. In the Memorandum of Agreement the exact
5 TSN, July 12, 1995, p. 7.
amount was US$432,000.
3 Id., at p. 9. 536
4 Exhibit “C.”

535 536 SUPREME COURT REPORTS ANNOTATED

Tan vs. Philippine Commercial International Bank
VOL. 552, APRIL 23, 2008 535

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“7. In the event the Entrustee defaults in his/its obligations
or breaches or fails to comply with the terms and conditions of
this Trust Receipt, or upon default in, breach of or noncompliance
with the obligation evidenced by Annex “A” hereof or the
agreement under which the Entruster issued the letter of credit
under the terms of which the Trust Property was purchased
(“events of default”), the Entruster may cancel this trust, and
thereupon take possession of the Trust Property and/or such
proceeds as may then have been realized therefrom, and have the
goods sold and the proceeds of such sale applied, in accordance
with the provisions of Section 7 of the Trust Receipts Law. In all
cases where the Entruster is compelled to resort to the
cancellation of this Trust Receipt or to take any other legal action
to protect its interest, the Entrustee shall pay attorney’s fees fixed
at 15% of the total obligation of the Entrustee, which in no case
shall be less than P500.00 exclusive of the costs and fees allowed
by law and the other expenses of collection incurred by the
Entruster. Any deficiency resulting from the sale of the Trust
Property shall be paid by the Entrustee within 24 hours from
such sale; failing which the Entruster may take such legal action,
without further notice to the Entrustee, as it may deem necessary
to collect such deficiency from the Entrustee.”6 (Italics supplied)
MTT thus surrendered the buses to PCIB which accepted
them in mid 1991 and March 1992. By MTT’s claim the
buses were, at the time of surrender, estimated to be
“about 6.6 million.”
Subsequently or in July 1992, PCIB sent petitioner a
letter of July 9, 1992 reading:
“x x x x
From the records now in our possession, it appears that despite
promises made by you to make good your obligations, no perfor-
mance thus far has been made. As of June 30, 1992, inclusive of
interests and penalty charges, your obligations totaled
P10,327,591.21.
Since adequate time and opportunity had already been given
you by our client, you are now requested to remit to it the
aforesaid sum of P10,327,591.21 within five (5) days from your
receipt hereof, otherwise, we shall bring you to court.
_______________
6 Exhibit “2-B.”
VOL. 552, APRIL 23, 2008
Tan vs. Philippine Commercial International Bank
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x x x x”7 (Italics supplied)
Replying, petitioner’s counsel, by letter of July 22, 1992,
wrote PCIB as follows:
“Your letters of July 9, 1992 were endorsed to us for
appropriate reply by our clients, Master Tours and Travel
Corporation and Marciano Tan.
Your letter to Mr. Tan makes mention of two (2) trust receipts
signed by him covering the importation of the four (4) units
DAEWOO buses you want our client to account for. However,
Philippine Commercial International Bank (“PCIB”) never
furnished our client copies thereof. And up to this date, none is in
the possession of our client. Could you please provide our client
with copies of the documents?
Delving into the crux of your demand, kindly be advised that
our clients voluntarily surrendered physical possession and
custody of the four (4) DAEWOO buses to PCIB as early as August
[sic] 1991. The units were accepted by PCIB and, therefore, there
no longer exist[s] any liability or obligation on the part of our
clients towards that of yours. As clearly stated in your subject
letter written to Mr. Marciano Tan, under the terms of the trust
receipts, our client has the alternative obligation to either
surrender the buses upon demand or pay the total value thereof.
As the buses have been surrendered and delivered to your
client, our client’s obligation has been extinguished.
We suggest then that your clarify the fact of delivery of the
four (4) units with your client.
We do hope to have amply answered and enlightened you on
the status of the matter regarding our client’s supposed liability
on the four (4) buses.”8 (Emphasis and italics supplied)
There is no showing if PCIB reacted to the above-quoted
letter of petitioner’s counsel. PCIB subsequently filed in
October 1992 a criminal complaint against petitioner before
the Makati City Prosecutor’s Office which resulted in the
filing on
_______________
7 Exhibit “6.”
8 Exhibit “7.”
538
537
538 SUPREME COURT REPORTS ANNOTATED
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April 1, 1993 of the nine informations against him for
violation of B.P. Blg. 22 before the RTC of Makati. The first
information, Criminal Case No. 93-2365, reads:
“That on or about the 29th day of January 1991, in the
Municipality of Makati, Metro Manila, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused as
the duly authorized signatory of Master Tours and Travel
Corporation, did then and there willfully, unlawfully and
feloniously make or draw and issue to Philippine Commercial
Int[ernational] Bank to apply on account or for value the
check/described below:
Check No.:            677744
Drawn Against:     Philippine Banking Corp.
In the amount:        P198,428.42
Dated/Postdated:   May 15, 1991
Payable to:             Philippine Commercial International Bank
said accused well knowing that at the time of issue thereof Master
Tours & Travel Corp. had no sufficient funds in or credit with the
drawee bank for the payment in full of the face amount of the
check upon its presentment, which check was presented for
payment within ninety (90) days from the date thereof was
subsequently dishonored by the drawee bank for the reason
“Drawn Against Insufficient Funds” and, despite receipt of notice
of said dishonor, the accused and/or Master Tours & Travel
Corporation failed to pay said payee the face amount of said check
or to make arrangement for full payment thereof within five (5)
banking days after receiving notice.”9 (Underscoring partly in the
original and partly supplied)
The other eight informations, Criminal Case Nos. 93-
2366 to 93-2373, are similarly worded and for the same
amount, differing only as to the check numbers, the dates
of issue and, with respect to Criminal Cases No. 93-2368 to
93-2373, the cause of dishonor (“account closed”).10
_______________
9  Records, p. 1.
10 Id., at pp. 41-56.
VOL. 552, APRIL 23, 2008
Tan vs. Philippine Commercial International Bank
Branch 142 of the Makati RTC, by Decision11 of October 25,
1995, convicted petitioner of all the nine charges. The trial
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court absolved petitioner of civil liability, however, because
“the money obligations arising from the checks are of
Master Tours & Travel Corporation and not of the accused
Marciano Tan who did not, by signing in behalf of the
corporation, assume personal liability therefor.”12 Thus, the
trial court disposed:
“WHEREFORE, the Court finds the accused MARCIANO
T. TAN to be GUILTY beyond reasonable doubt of these
nine (9) criminal charges for violation of BP 22, and
hereby sentences him to suffer imprisonment for THIRTY
(30) days for EACH of the NINE [9] CRIMNAL OFFENSES
CHARGED.
For lack of evidence, the claim of civil liability arising from the
nine [9] dishonored checks, are DISMISSED, without prejudice to
their being taken up in a proper civil action for recovery of the
amounts till due, if any, from Master Tours [&] Travel
Corporation.
Costs against the accused.”13 (Emphasis in the original; italics
supplied)
On petitioner’s appeal, the Court of Appeals affirmed the
trial court’s decision by Decision of March 19, 2002. Hence,
the present Petition for Review,14 faulting the appellate
court
A
. . . IN CONVICTING THE ACCUSED DESPITE THE FACT
THAT HIS CRIMINAL LIABILITY WAS EXTINGUISHED BY
HIS HAVING OVERPAID PCIB.
B
. . . IN NOT FINDING THAT MASTER HAD FULLY PAID PCIB
[AND] . . . IN NOT FINDING THAT MASTER, AS A MATTER
OF FACT, HAD IN EFFECT, OVERPAID PCIB WHEN THE
LATTER
_______________
11 Id., at pp. 172-178.
12 Id., at p. 178.
13 Id., at p. 178.
539 14 Rollo, pp. 9-38.
539
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540 SUPREME COURT REPORTS ANNOTATED
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PULLED OUT THE BUSES SUBJECT OF THE TRUST
RECEIPTS ISSUED IN CONNECTION WITH THE
TRANSACTION.
C 3. The check is subsequently dishonored by the drawee bank
. . . IN NOT FINDING THAT THE CONTRACT DOCUMENTS
DO NOT CONTAIN ANY STIPULATION AS TO
ADJUSTMENT OF THE OBLIGATION IN CASE OF
FOREIGN EXCHANGE FLUCTUATION. THERE IS
NOTHING IN THE MEMORANDUM OF AGREEMENT
BETWEEN THE PARTIES NOR IN THE LETTER OF CREDIT
APPLICATION OR IN ANY DOCUMENT COVERING THE
TRANSACTION WHEREIN MASTER TOURS OBLIGED
ITSELF TO PAY AN INCREASE IN DOLLAR EXCHANGE
RATE FLUCTUATION. CONVERSELY, NEITHER IS PCIB
OBLIGED TO REFUND MASTER TOURS OF ANY DECREASE
IN THE PESO DOLLAR EXCHANGE RATE.
D for the full payment of the check upon its presentment.18
. . . IN NOT FINDING THAT EVEN ASSUMING MASTER WAS
OBLIGED TO PAY FOREIGN EXCHANGE RATE
DIFFERENTIAL, IT WAS PREMATURE TO DEMAND IT
[ON] JANUARY 7, 1991.
xxxx
F
. . . IN NOT FINDING THAT THE SUPERVENING
BANKRUPTCY SUFFERED BY MASTER BROUGHT ABOUT
BY THE ECONOMIC DISLOCATION OF THE COUNTRY
BROUGHT ABOUT BY THE MOUNT PINATUBO ERUPTION,
THE GULF WAR AND THE BAGUIO EARTHQUAKE
DISCULPATES THE ACCUSED FROM CRIMINAL
LIABILITY.15 (Emphasis and underscoring supplied)
The petition is impressed with merit.
Unless the following elements are shown to have been
proven by the prosecution, an accused will not be convicted
for violation of B.P. Blg. 22:
_______________
15 Id., at pp. 15-16.
VOL. 552, APRIL 23, 2008
Tan vs. Philippine Commercial International Bank
1. The accused makes, draws or issues any check to apply to
account or for value;
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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
for insufficiency of funds or credit, or it would have been
dishonored for the same reason had not the drawer, without any
valid reason, ordered the bank to stop payment.16 (Italics
supplied)
While issuing of a bouncing check is malum prohibitum,
the prosecution is not excused from its responsibility of
proving beyond reasonable doubt all the elements of the
offense.17
Respecting the second element of the crime, the
prosecution must prove that the accused knew, at the time
of issuance, that he does not have sufficient funds or credit
The element of “knowledge” involves a state of mind that
obviously would be difficult to establish, hence, the statute
creates a prima facie presumption of knowledge on the
insufficiency of funds or credit coincidental with the
attendance of the two other elements.19
_______________
16 Danao v. Court of Appeals, 411 Phil. 63, 71-72; 358 SCRA 450, 457-
458 (2001).
17 Danao v. Court of Appeals, supra; Vide Cabrera v. People, 454 Phil.
759; 407 SCRA 247 (2003) which states that to prove the first and third
elements, the law provides that the introduction in evidence of the unpaid
or dishonored check, having the drawee’s refusal to pay stamped or
written thereon, or attached thereto, with the reason therefor as aforesaid
shall be prima facie evidence of the making or issuing of the said checks
and the due presentment to the drawee for payment and the dishonor
thereof for the reasons indicated therein.
18 Sia v. People, G.R. No. 149695, April 28, 2004, 428 SCRA 206.
19 Meriz v. People, 420 Phil. 608; 368 SCRA 524 (2001).
542
541
542 SUPREME COURT REPORTS ANNOTATED
Tan vs. Philippine Commercial International Bank
541
“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
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insufficiency of funds or credit unless such maker or drawer pays
the holder thereof the amount due thereon, or makes arrangements
for payment in full by the drawee of such check within five (5)
banking days after receiving notice that such check has not been
paid by the drawee.”20 (Emphasis and italics supplied)
In order to create such presumption, it must be shown
that the drawer or maker received a notice of dishonor and,
within five banking days thereafter, failed to satisfy the
amount of the check or arrange for its payment.21 The
above-quoted provision creates a presumption juris tantum
that the second element prima facie exists when the first
and third elements of the offense are present.22
The presumption is not conclusive,23 however, as it may
be rebutted by full payment.24 If the maker or drawer pays,
or makes arrangement with the drawee bank for the
payment of the amount due within the five-day period from
notice of the dishonor, he or she may no longer be indicted
for such violation.25 It is a complete defense26 that would
lie regardless of
_______________
20 Batas Pambansa Blg. 22, Sec. 2.
21 Cabrera v. People, supra note 17.
22 Lim v. People, 394 Phil. 844; 340 SCRA 497 (2000) states that if not
rebutted, the presumption suffices to sustain a conviction.
23 Bautista v. Court of Appeals, 413 Phil. 159; 360 SCRA 618 (2001);
Sycip, Jr. v. Court of Appeals, 385 Phil. 143; 328 SCRA 447 (2000) states
that the presumption cannot hold if there is evidence to the contrary.
24  Macalaglag v. People, G.R. No. 164358, December 20, 2006, 511
SCRA 400; Abarquez v. Court of Appeals, 455 Phil. 964; 408 SCRA 500
(2003).
25 Sia v. People, supra note 18.
26 Cabrera v. People, supra note 17.
VOL. 552, APRIL 23, 2008
Tan vs. Philippine Commercial International Bank
the strength of the evidence presented by the prosecution.27
In essence, the law affords the drawer or maker the
opportunity to avert prosecution by performing some acts
that would operate to preempt the criminal action,28 which
opportunity serves to mitigate the harshness of the law in
its application.29
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It is a general rule that only a full payment at the time
of its presentment or during the five-day grace
period could exonerate one from criminal liability under
B.P. Blg. 22 and that subsequent payments can only affect
the civil, but not the criminal, liability.30
In Macalalag v. People,31 the Court held that payment
by the accused of the amount of the check prior to its
presentment serves the same purpose. It rebuked the
malpractice of presenting checks for payment even after
the amount thereof had been paid.
In Griffith v. Court of Appeals,32 the Court held that
where the creditor had collected more than a sufficient
amount to cover the value of the checks representing rental
arrearages, holding the debtor’s president to answer for a
criminal offense under B.P. Blg. 22 two years after the said
collection is no longer tenable nor justified by law or
equitable considerations. In that case, the Court ruled
that albeit made beyond the grace period but two years
prior to the institution of the criminal case, the payment
collected from the proceeds of the foreclosure and auction
sale of the petitioner’s impounded properties, with more
than a million pesos to spare, justified the acquittal of the
petitioner. The Court ratiocinated:
_______________
27 Meriz v. People, supra note 19.
28 Lao v. Court of Appeals, G.R. No. 119178, June 20, 1997, 274 SCRA
572 (1997).
29 Danao v. Court of Appeals, supra note 16.
30 Macalalag v. People, supra note 24.
31 Ibid.
32 428 Phil. 878; 379 SCRA 94 (2002).
544
543
544 SUPREME COURT REPORTS ANNOTATED
Tan vs. Philippine Commercial International Bank
543
“The Bouncing Checks Law “was devised to safeguard the
interest of the banking system and the legitimate public checking
account user.” It was not designed to favor or encourage
those who seek to enrich themselves through manipulation
and circumvention of the purpose of the law. x x x
x  x  x We cannot, under these circumstances, see how
petitioner’s conviction and sentence could be upheld without
running afoul of basic principles of fairness and justice.
For [private respondent] has, in our view, already exacted its
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proverbial pound of flesh through foreclosure and auction sale as

its chosen remedy.”33 (Emphasis supplied)

In the present case, PCIB already exacted its proverbial

pound of flesh by receiving and keeping in possession the
four buses-trust properties surrendered by petitioner in
about mid 1991 and March 1992 pursuant to Section 7 of
the Trust Receipts Law,34 the estimated value of which was
“about P6.6 million.”35 It thus appears that the total
amount of the dishonored checks—P1,785,855.75—,
the undisputed claim of petitioner of a mistaken agreement
to pay the exchange differential (which the same checks
represented) aside, was more than fully satisfied prior to
the transmittal and receipt of the July 9, 1992 letter
of demand. In keeping with jurisprudence, the Court then
considers such payment of the dishonored checks to have
obliterated the criminal liability of petitioner.36
It is a consistent rule that penal statutes are construed
strictly against the State and liberally in favor of the
accused. And since penal laws should not be applied
mechanically, the

_______________

33 Id., at pp. 889-891; pp. 103-105.

34 Records show that PCIB had not, as of August 1995, sold the buses,
for reasons unknown to petitioner and beyond his control, TSN, August 8,
1995, pp. 14-15.
35 Supra note 5.
36 Vide Abarquez v. Court of Appeals, supra note 24, wherein the Court
acquitted the accused on two counts for paying the face value of two
checks two months before a notice of dishonor was sent.

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