1983 instituted

1995 decided
The prima facie evidence has not been overcome by petitioners in the cases
before us because they did not pay LINTON the amounts due on the
checks; neither did they make arrangements for payment in full by the
drawee bank within five (5) banking days after receiving notices that the
checks had not been paid by the drawee bank  (Lim v. Court of Appeals, G.R.
|||

No. 107898, [December 19, 1995], 321 PHIL 782-791)

NOT LIABLE for ESTAFA: respondent Court of Appeals acquitted accused-appellants of estafa
on the ground that indeed the checks were not made in payment of an obligation contracted at the time
of their issuance. they could not be held liable for estafa because the seven (7)
checks were issued by them several weeks after the deliveries of the goods
Also, he claimed that he ordered SOLIDBANK to stop payment because the supplies delivered by
LINTON were not in accordance with the specifications in the purchase orders.)))))

The elements of Estafa are as follows: (1) The offender has postdated or issued a check in payment
of an obligation contracted at the time of the postdating or issuance; (2) at the time of postdating or
issuance of said check, the offender has no funds in the bank or the funds deposited were not
sufficient to cover the amount of the check; (3) the payee has been defrauded.

VENUE: Rule 110 Section 15. Place where action is to be instituted. —

(a) Subject to existing laws, the criminal action shall be instituted and tried in the court of the
municipality or territory where the offense was committed or where any of its essential
ingredients occurred.

Sec. 14. A complaint or information may be amended, in form or in substance, without leave of
court, at any time before the accused enters his plea. After the plea and during the trial, a formal
amendment may only be made with leave of court and when it can be done without causing
prejudice to the rights of the accused.

P268,705.00
CASE AT BAR. — In determining proper venue in these cases, the following acts
material and essential to each crime and requisite to its consummation must be
considered: (a) the seven (7) checks were issued to LINTON at its place of
business in Balut, Navotas; (b) they were delivered to LINTON at the same
place; (c) they were dishonored in Kalookan City; and (d) petitioners had
knowledge of the insufficiency of their funds in SOLIDBANK at the time the
checks were issued. Since there is no dispute that the checks were dishonored in
Kaloocan City, it is no longer necessary to discuss where the checks were
dishonored. Consequently, venue or jurisdiction lies either in the Regional Trial
Court of Kaloocan City or Malabon. Moreover, we ruled in the
same Grospe and Manzanilla cases as reiterated in Lim v. Rodrigo that venue or
jurisdiction is determined by the allegations in the Information. The Informations
in the cases under consideration allege that the offenses were committed in the
Municipality of Navotas which is controlling and sufficient to vest jurisdiction upon
the Regional Trial Court of Malabon.
NEGOTIATION: 1. Issuance -1st delivery of the instrument complete in form to a person who takes it as a
holder

BEARER – negotiated by delivery

ORDER – negotiated by indorsement coupled by 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 in the instrument.

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.

 In general, the elements of estafa are: (1) that the accused defrauded another (a) by abuse of
confidence, or (b) by means of deceit; and (2) that damage or prejudice capable of pecuniary estimation
is caused to the offended party or third person. Invariably, unlawful abuse of confidence or deceit is the
essence of estafa.

(d) [By post-dating a check, or issuing a check in payment of an obligation when the offender 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 of insufficiency of funds shall
be prima facie evidence of deceit constituting false pretense or fraudulent act. (As amended by R.A.
4885, approved June 17, 1967.)]

To be liable for violation of B.P. 22, the following essential elements must be present: (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 the check in full upon its presentment; and (3) the subsequent
dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same
reason had not the drawer, without any valid cause, ordered the bank to stop payment.
MANUEL LIM and ROSITA LIM, petitioners,
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

G.R. No. 107898 December 19, 1995

RIGI – located at Kalookan City

SOLDIBANK – Kalookan City

LINTON – Balut, Navotas within the jurisdiction of RTC of MALABON

Delivery; when effectual; when presumed. (Sec. 16)

SLIDE 1: Hello, judge. Im experiencing slow internet connection. Would it be okay if Ms. Reyes will do
the share screen for me, instead? Thanks.

Good evening to everyone. I’ll be reporting the case of spouses Lim vs CA. This is also a case about
delivery like the previous cases (complete instrument but undelivered)

Facts:

SLIDE 2

Let’s start with the facts of the case.

Petitioners Spouses Manuel and Rosita Lim are the president and treasurer of Rigi Built Industries, Inc.
(RIGI). RIGI had been transacting for years with Linton to supply RIGI with steel plates, steel bars, flat
bars and purlin sticks which it uses in the fabrication, installation and building of steel structures.

TAKE NOTE that RIGI is located in Caloocan. SOLIDBANK, which is the drawee or the bank of spouses
LIm, is also located also Caloocan. Both are within the jurisdiction of RTC Caloocan. And Linton is located
in Navotas which is within jurisdiction of RTC Malabon.

SLIDE 3

Spouses ordered mild steel plates from LINTON which was delivered by LINTON to RIGI. Several weeks
after, Spouses issued (post-dated) SOLIDBANK checks to the collector of LINTON. However, when checks
were presented to SOLIDBANK for payment, checks were dishonored due to insufficiency of funds.

Sps. Lim were charged with estafa and violation of BP 22.

Spouses issued seven Consolidated Bank and Trust Company (SOLIDBANK) checks as payment for
purchased goods from Linton Commercial Company, Inc. which were dishonored upon presentment by
drawee bank due to insufficiency of funds. Spouses failed to pay the checks or the value of the goods.
((((Sps. Lim were also charged with Violation of B.P. Blg. 22 alleging that they knew about the insufficient
funds, but still issued the checks.

1. On May 27, 1983, Lim ordered 100 pieces of mild steel plates worth P51,815.00 and was
delivered at their place of business on the same day at Kalookan City. Several weeks laters, Sps
issued (post-dated to Sept 3, 1983) SOLDIBANK Check in the amount of P51,800.
2. On May 30 1983, for 65 pieces of mild steel plates worth P63,455.00. Sps issued (post-dated Aug
20, 1983) SOLIDBANK check in the amt of P63,455.

The Lim spouses also ordered 2,600 "Z" purlins worth P241,800.00 which were delivered to them on
various dates, to wit: 15 and 22 April 1983; 11, 14, 20, 23, 25, 28 and 30 May 1983; and, 2 and 9 June
1983. To pay for the deliveries, they issued seven SOLIDBANK checks, five of which were —

Check No. Date of Issue Amount

027683 16 July 1983 P27,900.00

027684 23 July 1983 P27,900.00
027719 6 Aug. 1983 P32,550.00
027720 13 Aug. 1983 P27,900.00
027721 27 Aug. 1983 P37,200.00

Salvador Alfonso, signature verifier of SOLIDBANK, Grace Park Branch, Kalookan City, where the
Lim spouses maintained an account, testified on the following transactions with respect to the seven
(7) checks:

CHECK NO. DATE PRESENTED REASON FOR DISHONOR

027683 22 July 1983 Payment Stopped (PS) 8

027684 23 July 1983 PS and Drawn Against

Insufficient Fund (DAIF) 9

027699 24 Aug. 1983 PS and DAIF 10

027700 5 Sept. 1983 PS and DAIF 11

027719 9 Aug. 1983 DAIF  12

027720 16 Aug. 1983 PS and DAIF 13

027721 30 Aug. 1983 PS and DAIF 14

Manuel Lim admitted having issued the seven (7) checks in question to pay for deliveries made by
LINTON but denied that his company's account had insufficient funds to cover the amounts of the
checks. He presented the bank ledger showing a balance of P65,752.75. Also, he claimed that he
ordered SOLIDBANK to stop payment because the supplies delivered by LINTON were not in
accordance with the specifications in the purchase orders.)))))

When presented for payment within ninety (90) days from date thereof the
checks were dishonored by the drawee bank for insufficiency of funds. Despite
receipt of notices of such dishonor the Lims failed to pay the amounts of the
checks or to make arrangements for full payment within five (5) banking days.   |||

SLIDE 4
The RTC of Malabon found Spouses to be liable for BP 22 or the bouncing check law. Now, spouses
contend that RTC of Malabon had no jurisdiction because all acts transpired in Caloocan City where
RIGI, their place of business, is located and, thus, outside its territory. Checks were issued at their
business place, received by a collector of LINTON, and dishonored by the drawee bank all in
Caloocan City. Thus, it should be the RTC of Caloocan which has jurisdiction, not RTC of Malabon.

ELEMENTS: To be liable for violation of B.P. 22, the following essential elements must be present: (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 the check in full upon its presentment; and (3) the
subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor
for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.
The gravamen of the offense is knowingly issuing a worthless check ||.

respondent Court of Appeals acquitted accused-appellants of estafa on the ground that indeed the
checks were not made in payment of an obligation contracted at the time of their issuance.

Court of Appeals acquitted accused-appellants of estafa on the ground that indeed the checks were not
made in payment of an obligation contracted at the time of their issuance.
The elements of Estafa are as follows: (1) The offender has postdated or issued a check in payment
of an obligation contracted at the time of the postdating or issuance; (2) at the time of postdating or
issuance of said check, the offender has no funds in the bank or the funds deposited were not
sufficient to cover the amount of the check; (3) the payee has been defrauded.

Sps. were found to be liable for B.P. Blg. 22. Petitioners contend that the prosecution failed to prove
that any of the essential elements of the crime punishable under B.P. Blg. 22 was committed within the
jurisdiction of the Regional Trial Court of Malabon. They claim that what was proved was that all the
elements of the offense were committed in Kalookan City. The checks were issued at their place of
business, received by a collector of LINTON, and dishonored by the drawee bank, all in Kalookan City.

SLIDE 5

The NIL issue now, in relation to the main issue on proper venue, is whether or not issuance of
check which was received by the collector of LINTON constitutes delivery.

Basically, if issuance to the collector constitutes delivery, then petitioner spouses’ contention is
correct that RTC Malabon had no jurisdiction to try the case since all acts of the crime is committed
in Kalookan.

Whether RTC of Malabon has jurisdiction of the case.

Whether or not issuance of check to the collector constitute delivery.

Section 1, par. 1, of B.P. Blg. 22 punishes “[a]ny 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 . . .” The gravamen of the offense is knowingly issuing a worthless check.

To be liable for violation of B.P. 22, the following essential elements must be present: (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 the check in full upon its presentment; and (3) the subsequent dishonor of the
check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not
the drawer, without any valid cause, ordered the bank to stop payment.

SLIDE 6

The court answered in the negative. 1st sentence of Sec 16 of NIL contemplates an undelivered
instrument. READ. An undelivered instrument has no legal existence or inception. (UNDELIVERED
INSTRUMENT – NO LIABILITY)

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 in the instrument. 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.

“immediate parties” – those who are immediate in the sense of having or being held to know of the
conditions or limitations place upon the delivery of the instrument (((privity - he also has legal interest in
the same right or property)))

“remote parties” – those who are not in direct contractual relation to each other

Consequently, undelivered instrument confers no liability.

“Delivery” (Accdg to de Leon) – means transfer of possession, actual or constructive (such as mailing a
negotiable instrument with intent to transmit it to the payee as per McIntire v Raskin ), from one person
to another with intent to transfer title thereto

SLIDE 7

AGAIN, the issue here is if issuance to the collector of LINTON constitutes delivery.
Issue, as defined under NIL, is the first delivery of the instrument complete in form to a person who
takes it as a holder.

Receipt of checks by the collector of LINTON is not the issuance of the payee in contemplation of the
law. This is because a mere collector cannot take the check as a holder.

A holder, as defined under NIL, is the payee or indorsee of a bill or note who is in possession of it or the
bearer. In this case, the holder or the payee is LINTON. Not its collector.

“Delivery” (Accdg to de Leon) – means transfer of possession, actual or constructive (such as mailing a
negotiable instrument with intent to transmit it to the payee as per McIntire v Raskin, from one person
to another with intent to transfer title thereto.

"issue" -- the first delivery of the instrument complete in form to a person who takes it as a holder.

"holder" -- the payee or indorsee of a bill or note who is in possession of it or the bearer (The person to
whom a bill of exchange, promissory note, bill of lading, etc., is assigned by indorsement, giving him
a right to sue thereon.
the act of the owner or payee signing his/her name to the back of a check, bill of exchange, or other 
negotiable instrument so as to make it payable to another or cashable by any person )

The place where the bills were written, signed, or dated does not necessarily fix or determine the place
where they were executed. What is of decisive importance is the delivery thereof. The delivery of the
instrument is the final act  essential  to its  consummation  as an obligation.

Although LINTON sent a collector who received the checks from petitioners at petitioners’ place of
business in Kalookan City, they were actually delivered to LINTON at its place of business in Balut,
Navotas. So, when the petitioner spouses gave the check to the collector, there was still no delivery as
contemplated in the law. The collector was not the person who could take the checks as a holder with
the intent to transfer title thereto., i.e., as a payee or indorsee thereof. Neither could the collector be
deemed an agent of LINTON with respect to the checks because he was a mere employee.
(Agency refers to an agreement, explicitly stated or implied by which one party, called the principal,
entrusts the management of a business to another party, called the  agent, to carry out transactions on
his account or in his name, and the agent agrees to carry out the business and render an account of his
proceedings.)

SLIDE 8

Delivery was effectual only when LINTON received the checks in NAVOTAS. Therefore, RTC of Malabon
has jurisdiction since the element of issuance or delivery of instrument was consummated in Navotas.

To be liable for violation of B.P. 22, the following essential elements must be present: (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 the check in full upon its presentment; and (3) the subsequent dishonor of the
check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not
the drawer, without any valid cause, ordered the bank to stop payment.
Ratio:

Under Sec. 191 of the Negotiable Instruments Law the term "issue" means the first delivery of the
instrument complete in form to a person who takes it as a holder. On the other hand, the term "holder"
refers to the payee or indorsee of a bill or note who is in possession of it or the bearer thereof.  
In People v. Yabut this Court explained —

. . . The place where the bills were written, signed, or dated does not necessarily fix or determine the
place where they were executed. What is of decisive importance is the delivery thereof. The delivery of
the instrument is the final act essential to its consummation as an obligation. An undelivered bill or note
is inoperative. Until delivery, the contract is revocable. And the issuance as well as the delivery of the
check must be to a person who takes it as a holder, which means "(t)he payee or indorsee of a bill or
note, who is in possession of it, or the bearer thereof." Delivery of the check signifies transfer of
possession, whether actual or constructive, from one person to another with intent to  transfer
title thereto . . .

Although LINTON sent a collector who received the checks from petitioners at their place of business in
Kalookan City, they were actually issued and delivered to LINTON at its place of business in Balut,
Navotas. The receipt of the checks by the collector of LINTON is not the issuance and delivery to the
payee in contemplation of law. The collector was not the person who could take the checks as a
holder, i.e., as a payee or indorsee thereof, with the intent to transfer title thereto. Neither could the
collector be deemed an agent of LINTON with respect to the checks because he was a mere employee.
As this Court further explained in People v. Yabut27 —

Modesto Yambao's receipt of the bad checks from Cecilia Que Yabut or Geminiano Yabut, Jr., in
Caloocan City cannot, contrary to the holding of the respondent Judges, be licitly taken as delivery of the
checks to the complainant Alicia P. Andan at Caloocan City to fix the venue there. He did not take
delivery of the checks as holder, i.e., as "payee" or "indorsee." And there appears to be no contract of
agency between Yambao and Andan so as to bind the latter for the acts of the former. Alicia P. Andan
declared in that sworn testimony before the investigating fiscal that Yambao is but her "messenger" or
"part-time employee." There was no special fiduciary relationship that permeated their dealings. For a
contract of agency to exist, the consent of both parties is essential. The principal consents that the other
party, the agent, shall act on his behalf, and the agent consents so as to act. It must exist as a  fact. The
law makes no presumption thereof. The person alleging it has the burden of proof to show, not only the
fact of its existence, but also its nature and extent . . .

G.R. No. 107898 December 19, 1995MANUEL LIM and ROSITA LIM vs. COURT OF APPEALS and PEOPLE
OF THE PHILIPPINESDoctrines:

•
 The place where the bills were written, signed, or dated does not necessarily fix or determine theplace
where they were executed. What is of decisive importance is the delivery thereof. The delivery of
theinstrument is the final act essential to its consummation as an obligation.

Delivery

of the check signifiestransfer of possession, whether actual or constructive, from one person to another
with intent to

transfertitle

 thereto.

 The receipt of the checks by the collector of LINTON is not the issuance and delivery to the payeein
contemplation of law. The collector was not the person who could take the checks as a holder, i.e., as
apayee or indorsee thereof, with the intent to transfer title thereto.

FACTS:

 Spouses Manuel Lim and Rosita Lim are the president and treasurer, respectively, of Rigi Bilt Industries,

Inc. (RIGI). On separate dates, petitioner spouses ordered mild steel plates and "Z" purlins from Linton
Commercial Company. Said items were delivered on the same day that they were ordered at the place
of business of petitioner spouses at 666 7th Avenue, 8th Street, Kalookan City. To pay for the deliveries,
the petitioners issued seven Solidbank checks.

When those checks were deposited with the Rizal Commercial Banking Corporation they were
dishonored for "insufficiency of funds" with the additional notation "payment stopped" stamped
thereon. Despite demand, Manuel and Rosita refused to make goodthe checks or pay the value of the
deliveries. The petitioners were then charged with estafa and violation of B.P. 22 before the Regional
Trial Court of Malabon. The trial court held both spouses guilty of estafa and violation of B.P. 22. On
appeal, the spouses Lim contended that the Regional Trial Court of Malabon had no jurisdiction over the
case because the offenses charged were outside its territory. The Court of Appeals acquitted the
spouses Lim of estafa but it affirmed the finding of the trial court that they were guilty of having violated
B.P. 22. Hence, this appeal. It is now the contention of petitioners that the prosecution failed to prove
that any of the essential elements of the crime punishable under B.P. Blg. 22 was committed within the
jurisdiction of the Regional Trial Court of Malabon. They claim that what was proved was that all the
elements of the offense were committed in Kalookan City. The checks were issued at their place of
business, received by a collector of LINTON, and dishonored by the drawee bank, all in Kalookan City.

ISSUE: Does the Regional Trial Court of Malabon have jurisdiction over the case?

RULING: Yes, the Regional Trial Court of Malabon have jurisdiction over the case. It is settled that venue

in criminal cases is a vital ingredient of jurisdiction. In determining proper venue in these cases, the
following acts material and essential to each crime and requisite to its consummation must be
considered: (a) the seven (7) checks were issued to LINTON at its place of business in Balut, Navotas; b)
they were delivered to LINTON at the same place; (c) they were dishonored in Kalookan City; and, (d)
petitioners had knowledge of the insufficiency of their funds in SOLIDBANK at thetime the checks were
issued. Under Sec. 191 of the Negotiable Instruments Law the term "issue" means the first delivery of
the instrument complete in form to a person who takes it as a holder. On the other hand, the term
"holder" refers to the payee or indorsee of a bill or note who is in possession of it or the bearer thereof.
In People v Yabut, this Court explained

 . . . The place where the bills were written, signed, or dated does not necessarily fix or determine the
place where they were executed. What is of decisive importance is the delivery thereof

THUS, it was not deemed delivered in Caloocan when Spouses issued the check to the collector, but in
NAVOTAS where LINTON actually received the checks.

Sec. 52. What constitutes a holder in due course. - A holder in due

course is a holder who has taken the instrument under the following
conditions: chanroblesvirtuallawlibrary

(a) That it is complete and regular upon its face;

(b) That he became the holder of it before it was overdue, and

without notice that it has been previously dishonored, if such
was the fact;

(c) That he took it in good faith and for value;

(d) That at the time it was negotiated to him, he had no notice

of any infirmity in the instrument or defect in the title of the
person negotiating it.

1. HOLDER in due course – COFI (holds the instrument free from personal defenses of prior parties)
2. HOLDER not in due course – any of 4 conditions are not met (holds the instrument not free from
any defenses of prior parties as if it were non-negotiable)
3. HOLDER thru a holder in due course – a holder who derives his title thru a holder in due course,
and who is not himself a party to a fraud or illegality affecting the instrument (by virtue of
shelter principle)