bouncing checks law - cases

7/29/2019 Bouncing Checks Law - Cases

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Republic of the Philippines

SUPREME COURTManila

SECOND DIVISION

G.R. No. 117857 February 2, 2001

LUIS S. WONG, petitioner,

vs.

COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

QUISUMBING, J.:

For review on certiorari is the decision dated October 28, 1994 of the Court of

Appeals in C.A. G.R. CR 118561which affirmed the decision of the Regional Trial

Court of Cebu City, Branch 17, convicting petitioner on three (3) counts of Batas

Pambansa Blg. 22 (the Bouncing Checks Law) violations, and sentencing him to

imprisonment of four (4) months for each count, and to pay private respondent the

amounts of P5,500.00, P6,410.00 and P3,375.00, respectively, corresponding to the

value of the checks involved, with the legal rate of interest from the time of filingof the criminal charges, as well as to pay the costs.1wphi1.nt

The factual antecedents of the case are as follows:

Petitioner Wong was an agent of Limtong Press. Inc. (LPI), a manufacturer of

calendars. LPI would print sample calendars, then give them to agents to present to

customers. The agents would get the purchase orders of customers and forward

them to LPI. After printing the calendars, LPI would ship the calendars directly to

the customers. Thereafter, the agents would come around to collect the payments.

Petitioner, however, had a history of unremitted collections, which he duly

acknowledged in a confirmation receipt he co-signed with his wife.2

Hence,

petitioners customers were required to issue postdated checks before LPI wouldaccept their purchase orders.

In early December 1985, Wong issued six (6) postdated checks totaling

P18,025.00, all dated December 30, 1985 and drawn payable to the order of LPI, asfollows:

(1) Allied Banking Corporation (ABC) Check No. 660143464-C for

P6,410.00 (Exh. "B");


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(2) ABC Check No. 660143460-C for P540.00 (Exh. "C");

(3) ABC Check No. PA660143451-C for P5,500.00 (Exh. "D");

(4) ABC Check No. PA660143465-C for P1,100.00 (Exh. "E");

(5) ABC Check No. PA660143463-C for P3,375.00 (Exh. "F");

(6) ABC Check No. PA660143452-C for P1,100.00 (Exh. "G").

These checks were initially intended to guarantee the calendar orders of customers

who failed to issue post-dated checks. However, following company policy, LPI

refused to accept the checks as guarantees. Instead, the parties agreed to apply the

checks to the payment of petitioners unremitted collections for 1984 amounting toP18,077.07.

3LPI waived the P52.07 difference.

Before the maturity of the checks, petitioner prevailed upon LPI not to deposit the

checks and promised to replace them within 30 days. However, petitioner reneged

on his promise. Hence, on June 5, 1986, LPI deposited the checks with Rizal

Commercial Banking Corporation (RCBC). The checks were returned for the

reason "account closed." The dishonor of the checks was evidenced by the RCBCreturn slip.

On June 20, 1986, complainant through counsel notified the petitioner of the

dishonor. Petitioner failed to make arrangements for payment within five (5)banking days.

On November 6, 1987, petitioner was charged with three (3) counts of violation of

B.P. Blg. 224

under three separate Informations for the three checks amounting to

P5,500.00, P3,375.00, and P6,410.00.5

The Information in Criminal Case No. CBU-12055 reads as follows:6

That on or about the 30th

day of December, 1985 and for sometime

subsequent thereto, in the City of Cebu, Philippines, and within thejurisdiction of this Honorable Court, the said accused, knowing at the time

of issue of the check she/he does not have sufficient funds in or credit with

the drawee bank for the payment of such check in full upon its presentment,

with deliberate intent, with intent of gain and of causing damage, did then

and there issue, make or draw Allied Banking Corporation Check No.

660143451 dated 12-30-85 in the amount of P5,500.00 payable to Manuel T.


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Limtong which check was issued in payment of an obligation of said

accused, but when the said check was presented with said bank, the same

was dishonored for reason ACCOUNT CLOSED and despite notice anddemands made to redeem or make good said check, said accused failed and

refused, and up to the present time still fails and refuses to do so, to the

damage and prejudice of said Manuel T. Limtong in the amount of

P5,500.00 Philippine Currency.

Contrary to law.

Petitioner was similarly charged in Criminal Case No. 12057 for ABC Check No.

660143463 in the amount of P3,375.00, and in Criminal Case No. 12058 for ABC

Check No. 660143464 for P6,410.00. Both cases were raffled to the same trialcourt.

Upon arraignment, Wong pleaded not guilty. Trial ensued.

Manuel T. Limtong, general manager of LPI, testified on behalf of the company,

Limtong averred that he refused to accept the personal checks of petitioner since it

was against company policy to accept personal checks from agents. Hence, he and

petitioner simply agreed to use the checks to pay petitioners unremittedcollections to LPI. According to Limtong, a few days before maturity of the

checks, Wong requested him to defer the deposit of said checks for lack of funds.

Wong promised to replace them within thirty days, but failed to do so. Hence, upon

advice of counsel, he deposited the checks which were subsequently returned onthe ground of "account closed."

The version of the defense is that petitioner issued the six (6) checks to guarantee

the 1985 calendar bookings of his customers. According to petitioner, he issued the

checks not as payment for any obligation, but to guarantee the orders of his

customers. In fact, the face value of the six (6) postdated checks tallied with the

total amount of the calendar orders of the six (6) customers of the accused, namely,

Golden Friendship Supermarket, Inc. (P6,410.00), New Society Rice and Corn

Mill (P5,500.00), Cuesta Enterprises (P540.00), Pelrico Marketing (P1,100.00),

New Asia Restaurant P3,375.00), and New China Restaurant (P1,100.00).

Although these customers had already paid their respective orders, petitioner

claimed LPI did not return the said checks to him.

On August 30, 1990, the trial court issued its decision, disposing as follows:7


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"Wherefore, premises considered, this Court finds the accused Luis S. Wong

GUILTY beyond reasonable doubt of the offense of Violations of Section 1

of Batas Pambansa Bilang 22 in THREE (3) Counts and is hereby sentenced

to serve an imprisonment of FOUR (4) MONTHS for each count; to pay

Private Complainant Manuel T. Limtong the sums of Five Thousand Five

Hundred (P5,500.00) Pesos, Six Thousand Four Hundred Ten (P6,410.00)

Pesos and Three Thousand Three Hundred Seventy-Five (P3,375.00) Pesos

corresponding to the amounts indicated in Allied Banking Checks Nos.

660143451, 66[0]143464 and 660143463 all issued on December 30, 1985

together with the legal rate of interest from the time of the filing of the

criminal charges in Court and pay the costs."8

Petitioner appealed his conviction to the Court of Appeals. On October 28, 1994, it

affirmed the trial courts decisionin toto.9

Hence, the present petition.10

Petitioner raises the following questions of law -11

May a complainant successfully prosecute a case under BP 22 --- if there is

no more consideration or price or valueever the binding tie that it is incontracts in general and in negotiable instruments in particularbehind the

checks?if even before he deposits the checks, he has ceased to be a holderfor value because the purchase orders (POs) guaranteed by the checks werealready paid?

Given the fact that the checks lost their reason for being, as above stated, isit not then the duty of complainantknowing he is no longer a holder for

valueto return the checks and not to deposit them ever? Upon what legalbasis then may such a holder deposit them and get paid twice?

Is petitioner, as the drawer of the guarantee checks which lost their reason

for being, still bound under BP 22 to maintain his account long after 90 daysfrom maturity of the checks?

May the prosecution apply theprima facie presumption of "knowledge of

lack of funds" against the drawer if the checks were belatedly deposited bythe complainant 157 days after maturity, or will it be then necessary for the

prosecution to show actual proofof "lack of funds" during the 90-day term?

Petitioner insists that the checks were issued as guarantees for the 1985 purchase

orders (POs) of his customers. He contends that private respondent is not a

"holder for value" considering that the checks were deposited by private


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respondent afterthe customers already paid their orders. Instead of depositing the

checks, private respondent should have returned the checks to him. Petitioner

further assails the credibility of complainant considering that his answers to cross-

examination questions included: "I cannot recall, anymore" and "We have no more

record."

In his Comment,12

the Solicitor General concedes that the checks might have been

initially intended by petitioner to guarantee payments due from customers, but

upon the refusal of LPI to accept said personal checks per company policy, the

parties had agreed that the checks would be used to pay off petitioners unremitted

collections. Petitioners contention that he did not demand the return of the checks

because he trusted LPIs good faith is contrary to human nature and sound businesspractice, according to the Solicitor General.

The issue as to whether the checks were issued merely as guarantee or for paymentof petitioners unremitted collections is a factual issue involving as it does the

credibility of witnesses. Said factual issue has been settled by the trial court and

Court of Appeals. Although initially intended to be used as guarantee for the

purchase orders of customers, they found the checks were eventually used to settle

the remaining obligations of petitioner with LPI. Although Manuel Limtong was

the sole witness for the prosecution, his testimony was found sufficient to prove all

the elements of the offense charged.13

We find no cogent reason to depart from

findings of both the trial and appellate courts. In cases elevated from the Court of

Appeals, our review is confined to allege errors of law. Its findings of fact are

generally conclusive. Absent any showing that the findings by the respondent courtare entirely devoid of any substantiation on record, the same must stand.

14The lack

of accounting between the parties is not the issue in this case. As repeatedly held,

this Court is not a trier of facts.15

Moreover, inLlamado v. Court of Appeals,16

we

held that "[t]o determine the reason for which checks are issued, or the terms and

conditions for their issuance, will greatly erode the faith the public reposes in the

stability and commercial value of checks as currency substitutes, and bring about

havoc in trade and in banking communities. So what the law punishes is the

issuance of a bouncing check and not the purpose for which it was issued nor the

terms and conditions relating to its issuance. The mere act of issuing a worthlesscheck is malum prohibitum." Nothing herein persuades us to hold otherwise.

The only issue for our resolution now is whether or not the prosecution was able to

establish beyond reasonable doubt all the elements of the offense penalized under

B.P. Blg. 22.


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There are two (2) ways of violating B.P. Blg. 22: (1) by making or drawing and

issuing a check to apply on account or for value knowing at the time of issue that

the check is not sufficiently funded; and (2) by having sufficient funds in or credit

with the drawee bank at the time of issue but failing to keep sufficient funds

therein or credit with said bank to cover the full amount of the check whenpresented to the drawee bank within a period of ninety (90) days.17

The elements of B.P. Blg. 22 under the first situation, pertinent to the present case,

are:18

"(1) The making, drawing and issuance of any check to apply for account orfor 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 thepayment of such check in full upon its presentment; and

(3) The subsequent dishonor of the check by the drawee bank for

insufficiency of funds or credit or dishonor for the same reason had not thedrawer, without any valid cause, ordered the bank to stop payment."

Petitioner contends that the first element does not exist because the checks were

not issued to apply for account or for value. He attempts to distinguish his situation

from the usual "cut-and-dried" B.P. 22 case by claiming that the checks were

issued as guarantee and the obligations they were supposed to guarantee werealready paid. This flawed argument has no factual basis, the RTC and CA having

both ruled that the checks were in payment for unremitted collections, and not as

guarantee. Likewise, the argument has no legal basis, for what B.P. Blg. 22

punishes is the issuance of a bouncing check and not the purpose for which it wasissued nor the terms and conditions relating to its issuance.

19

As to the second element, B.P. Blg. 22 creates a presumptionjuris tantum that the

second elementprima facieexists when the first and third elements of the offense

are present.20

Thus, the makers knowledge is presumed from the dishonor of the

check for insufficiency of funds.21

Petitioner avers that since the complainant deposited the checks on June 5, 1986, or

157 days after the December 30, 1985 maturity date, the presumption of

knowledge of lack of funds under Section 2 of B.P. Blg. 22 should not apply to

him. He further claims that he should not be expected to keep his bank account

active and funded beyond the ninety-day period.


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Section 2 of B.P. Blg. 22 provides:

Evidence of knowledge of insufficient funds.The making, drawing andissuance 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 beprima facie evidence of

knowledge of such insufficiency of funds or credit unless such maker or

drawer pays the holder thereof the amount due thereon, or makes

arrangements for payment in full by the drawee of such check within five (5)

banking days after receiving notice that such check has not been paid by the

drawee.

An essential element of the offense is "knowledge" on the part of the maker or

drawer of the check of the insufficiency of his funds in or credit with the bank to

cover the check upon its presentment. Since this involves a state of mind difficultto establish, the statute itself creates aprima facie presumption of such knowledge

where payment of the check "is refused by the drawee because of insufficient funds

in or credit with such bank when presented within ninety (90) days from the date of

the check." To mitigate the harshness of the law in its application, the statute

provides that such presumption shall not arise if within five (5) banking days from

receipt of the notice of dishonor, the maker or drawer makes arrangements forpayment of the check by the bank or pays the holder the amount of the check.

22

Contrary to petitioners assertions, nowhere in said provision does the law require

a maker to maintain funds in his bank account for only 90 days. Rather, the clearimport of the law is to establish aprima facie presumption of knowledge of such

insufficiency of funds under the following conditions (1) presentment within 90

days from date of the check, and (2) the dishonor of the check and failure of the

maker to make arrangements for payment in full within 5 banking days after notice

thereof. That the check must be deposited within ninety (90) days is simply one of

the conditions for theprima facie presumption of knowledge of lack of funds to

arise. It is not an element of the offense. Neither does it discharge petitioner from

his duty to maintain sufficient funds in the account within a reasonable time

thereof. Under Section 186 of the Negotiable Instruments Law, "a check must bepresented for payment within a reasonable time after its issue or the drawer will be

discharged from liability thereon to the extent of the loss caused by the delay." By

current banking practice, a check becomes stale after more than six (6)

months,23

or 180 days. Private respondent herein deposited the checks 157 days

after the date of the check. Hence said checks cannot be considered stale. Only the

presumption of knowledge of insufficiency of funds was lost, but such knowledge


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could still be proven by direct or circumstantial evidence. As found by the trial

court, private respondent did not deposit the checks because of the reassurance of

petitioner that he would issue new checks. Upon his failure to do so, LPI was

constrained to deposit the said checks. After the checks were dishonored, petitioner

was duly notified of such fact but failed to make arrangements for full payment

within five (5) banking days thereof. There is, on record, sufficient evidence that

petitioner had knowledge of the insufficiency of his funds in or credit with the

drawee bank at the time of issuance of the checks. And despite petitionersinsistent plea of innocence, we find no error in the respondent courts affirmanceof his conviction by the trial court for violations of the Bouncing Checks Law.

However, pursuant to the policy guidelines inAdministrative Circular No. 12-

2000, which took effect on November 21, 2000, the penalty imposed on petitioner

should now be modified to a fine of not less than but not more than double the

amount of the checks that were dishonored.

WHEREFORE, the petition is DENIED. Petitioner Luis S. Wong is found liable

for violation of Batas Pambansa Blg. 22 but the penalty imposed on him is

hereby MODIFIED so that the sentence of imprisonment is deleted. Petitioner

is ORDERED to pay a FINE of (1) P6,750.00, equivalent to double the amount of

the check involved in Criminal Case No. CBU-12057, (2) P12,820.00, equivalent

to double the amount of the check involved in Criminal Case No. CBU-12058, and

(3) P11,000.00, equivalent to double the amount of the check involved in Criminal

Case No. CBU-12055, with subsidiary imprisonment24

in case of insolvency to pay

the aforesaid fines. Finally, as civil indemnity, petitioner is also ordered to pay toLPI the face value of said checks totaling P18,025.00 with legal interest thereon

from the time of filing the criminal charges in court, as well as to pay thecosts.1wphi1.nt

SO ORDERED.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.


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Search


SUPREME COURTManila

SECOND DIVISION

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.:

Petitioners seek a review of the decision, dated October 25, 1996,1

and the resolution, dat

1997,2 of the Court of Appeals, affirming their conviction by the Regional Trial Court of Q(Branch 100) for violation of B.P. Blg. 22, otherwise known as the "Bouncing Checks Law

The facts are as follows:

Petitioner Eduardo R. Vaca is the president and owner of Ervine International, Inc. (Ervin

engaged in the manufacture and sale of refrigeration equipment, while his son-in-law, pet

Nieto, is the firm's purchasing manager. On March 10, 1988, petitioners issued a check fo

the General Agency for Reconnaissance, Detection, and Security, Inc. (GARDS) in partia

security services rendered by GARDS to Ervine. The check was drawn on the China Bank

(CBC). When deposited in the Philippine Commercial International Bank (PCIBank) branBoulevard, 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

the check within seven days from notice. The letter was received by Ervine on the same d

petitioners did not pay within the time given.


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On April 13, 1988, petitioners issued a check for P19,860.16 to GARDS. The check was d

Associated Bank. The voucher accompanying it stated that the check was to replace the di

the P9,860.16 balance being partial payment for Ervine's outstanding account. The check

were received by a GARDS messenger, Nolan C. Pena, on April 15, 1988, but GARDS di

dishonored check.

On April 14, 1988, GARDS Operations Manager Jovito C. Cabusara filed a criminal com

petitioners for violation of B.P. Blg. 22. After preliminary investigation, an information w

Regional Trial Court of Quezon City (Branch 97). However, the case was dismissed by th

11, 1989, upon motion of the prosecution, on the ground that Ervine had already paid the

check.

On September 18, 1989, GARDS, through its Acting Operations Manager Eduardo B. Ali

another complaint for violation of B.P. Bldg. 22 against petitioners. This resulted in the fi

information against petitioners in the Regional Trial Court of Quezon City (Branch 100). petitioners were found guilty of the charge and each was sentenced to suffer one (1) year i

and to pay a fine of P10,000.00 and the costs.

On appeal, the Court of Appeals affirmed the decision. It subsequently denied petitioners'reconsideration. Hence, this petition. Petitioners contend:

A. Respondent Court gravely erred in not holding that the

failed to prove petitioners' guilt beyond reasonable doubt.

B. Respondent Court gravely erred in basing conviction oweakness of the evidence of the defense rather than on the

evidence of the prosecution.

C. Respondent Court erred in not acquitting petitioners on

"mistake of fact" and "lack of knowledge."

Petitioners pray that the case against them be dismissed or, in the alternative, that the deci

court be modified by sentencing each to an increased fine but without imprisonment.

By supplemental petition, dated January 29, 1998, petitioners submitted an affidavit of deby GARDS president Dominador R. Santiago which states that the case arose from a mere

difference" between petitioners and GARDS, that the latter had not really suffered any daof the issuance of the check in question and, that GARDS was no longer interested in pros

On May 28, 1998, petitioners filed another supplemental petition, this time invoking the r

Lao v. Court of Appeals,3in which this Court reversed a conviction for violation of B.P. B


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showing that the accused had no knowledge of the insufficiency of funds.

The Solicitor General opposes the appeal. He contends that the facts ofLao v. Court of Ap

different from those of the case at bar and that the affidavit of desistance of Dominador Sa

moment, such affidavit having been made only after petitioners' conviction.

After due review of the decision in this case, we find that petitioners' conviction for violat22 is well founded.

First. The elements of the offense penalized under B.P. Blg. 22 are: (1) making, drawing,

any check to apply to account or for value; (2) knowledge of the maker, drawer, or issuer

of issue he does not have sufficient funds in or credit with the drawee bank for the payme

full upon its presentment; and (3) subsequent dishonor of the check by the drawee bank fo

of funds or credit, or dishonor of the check for the same reason had not the drawer, withou

cause, ordered the bank to stop paymnent.

4

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

Sec. 2. Evidence of knowledge of insufficient funds.The making, d

issuance of a check payment of which is refused by the drawee becaus

funds in or credit with such bank, when presented within ninety (90) d

of the check, shall be prima facie evidence of knowledge of such insuf

or credit unless such maker or drawer pays the holder thereof the amou

or makes arrangements for payment in full by the drawee of such chec

banking days after receiving notice that such check has not been paid b

In this case, after being notified on March 29, 1988 of the dishonor of their previous chec

gave GARDS a check for P19,860.16. They claim that this check had been intended by th

bad check they had previously issued to the GARDS. Based on the testimony of a GARDS

however, the Court of Appeals found that the check was actually payment for two bills, on

of January 16 to January 31, 1988 in the amount of P9,930.08 and another one for the peri

to March 31, 1988 in the same amount. But even if such check was intended to replace the

issuance on April 13, 198815 days after petitioners had been notified on March 29, 19

dishonor of their previous checkcannot negate the presumption that petitioners knew oinsufficiency of funds to cover the amount of their previous check. Sec. 2 of B.P. Blg. 22

such check be given within five (5) days from the notice of dishonor to them.

Petitioners contend that, in accordance with the ruling inLao v. Court of Appeals,6

they s

acquitted because the preparation of checks is the responsibility of the company accountan

is sign the checks. They claim that they rely on the word of the accountant that there are sthe bank to pay for the checks.


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In the Lao case, the accused, as the Court found, had merely been made by her employer,

Investment House, to countersign checks in bank. The accused was a mere employee who

anything to do with the issuance of checks for the company. She did not know to whom th

be paid as the names of payees were written only later by the head of operations. Moreove

dishonor was given to her as required by B.P. Blg. 22 2. It could thus rightly be conclude

accused issued checks to apply to account not knowing that at the time of issuance funds w

to pay for the checks.

Petitioners in this case cannot pretend ignorance of the insufficiency of funds. While it ma

was the company's accountant who actually prepared the rubber check, the fact remains th

the owners and officers of the company. Sec. 1 of B.P. Blg. 22 provides that "Where the c

a corporation, company, or entity, the person or persons who actually signed the check in

drawer shall be liable under this Act.

In fact, petitioner Nieto testified that after the check in question was dishonored, he instrucompany accountant to prepare a replacement check.

7This belies petitioners' claim that th

in the preparation of checks8

and shows that petitioners were in control of the finances of

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

claim that this case was simply the result of a misunderstanding between GARDS and pet

the former did not really suffer any damage from the dishonor of the check is flimsy. Afte

case below with tenacity, complainants going so far as to file another complaint after their

been dismissed, it is trifling with this Court for complainants to now assert that the filing o

simply a mistake. It is for reasons such as this the affidavit of desistance, like retractions,

disfavored. 9 The affidavit in this case, which was made after petitioners' conviction, is nominute attempt to save them from punishment. Even if the payee suffered no damage as a

issuance of the bouncing check, the damage to the integrity of the banking system cannot 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 sent

imprisonment and, in lieu thereof a fine in an increased amount be imposed on them. In su

plea, they allege that they do not have any record of prior conviction; that Eduardo Vaca i

age (late 60s); and, that they come from good families. Petitioners claim that "with their f

background and social standing there is no reason why they, will refuse to pay a due and d

of only P10,000.00. It is precisely because of their founded belief that the subject obligatithat they refused to be intimidated by a criminal charge."

The Court of Appeals dismissed these allegations as irrelevant to the question of petitione

think so ourselves. However, we believe that they can be considered in determining the ap

penalty to impose on petitioners.


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B.P. Blg. 22, 1, par. 1 provides a penalty of "imprisonment of not less than thirty days bu

one (1) year or by a fine of not less than, but not more than double, the amount of the chec

shall in no case esceed two hundred thousand pesos, or both such fine and imprisonment a

of the Court." Petitioners are first-time offenders. They are Filipino entrepreneurs who pre

contribute to the national economy. Apparently, they brought this appeal, believing in all

although mistakenly, that they had not committed a violation of B.P. Blg. 22. Otherwise, t

simply have accepted the judgment of the trial court and applied for probation to evade a p

would best serve the ends of criminal justice if in fixing the penalty within the range of di

by 1, par. 1, the same philosophy underlying the Indeterminate Sentence Law is observe

redeeming valuable human material and preventing unnecessary deprivation of personal li

economic usefulness with due regard to the protection of the social order.10

In this case w

fine in an amount equal to double the amount of the check involved is an appropriate pena

each of the petitioners.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the modificationsentence of imprisonment is deleted and petitioners are each ordered to pay a fine of P20,0

equivalent to double the amount of the check.

SO ORDERED

Melo and Puno, JJ., concur.

Martinez, J., is on leave.


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SUPREME COURT

Manila

SECOND DIVISION

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.:

Petitioners seek a review of the decision, dated October 25, 1996, 1 and the

resolution, dated December 2, 1997, 2 of the Court of Appeals, affirming their

conviction by the Regional Trial Court of Quezon City (Branch 100) for violation

of B.P. Blg. 22, otherwise known as the "Bouncing Checks Law."


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The facts are as follows:

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.

On April 14, 1988, GARDS Operations Manager Jovito C. Cabusara filed a

criminal complaint against petitioners for violation of B.P. Blg. 22. After

preliminary investigation, an information was filed in the Regional Trial Court of

Quezon City (Branch 97). However, the case was dismissed by the court on May


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11, 1989, upon motion of the prosecution, on the ground that Ervine had already

paid the amount of the check.

On September 18, 1989, GARDS, through its Acting Operations Manager Eduardo

B. Alindaya, filed another complaint for violation of B.P. Bldg. 22 against

petitioners. This resulted in the filing of an information against petitioners in the

Regional Trial Court of Quezon City (Branch 100). After trial, petitioners were

found guilty of the charge and each was sentenced to suffer one (1) year

imprisonment and to pay a fine of P10,000.00 and the costs.

On appeal, the Court of Appeals affirmed the decision. It subsequently deniedpetitioners' motion for reconsideration. Hence, this petition. Petitioners contend:

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 allegedweakness 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."

Petitioners pray that the case against them be dismissed or, in the alternative, that

the decision of the trial court be modified by sentencing each to an increased fine

but without imprisonment.


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By supplemental petition, dated January 29, 1998, petitioners submitted an

affidavit of desistance executed by GARDS president Dominador R. Santiago

which states that the case arose from a mere "accounting difference" between

petitioners and GARDS, that the latter had not really suffered any damage as a

result of the issuance of the check in question and, that GARDS was no longerinterested in prosecuting the case.

On May 28, 1998, petitioners filed another supplemental petition, this time

invoking the recent decision in Lao v. Court of Appeals, 3 in which this Court

reversed a conviction for violation of B.P. Blg. 22 upon a showing that the accused

had no knowledge of the insufficiency of funds.

The Solicitor General opposes the appeal. He contends that the facts of Lao v.

Court of Appeals are different from those of the case at bar and that the affidavit of

desistance of Dominador Santiago is of no moment, such affidavit having been

made only after petitioners' conviction.

After due review of the decision in this case, we find that petitioners' conviction forviolation 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 forinsufficiency 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. 4 The

maker's knowledge is presumed from the dishonor of the check for insufficiency of

funds. 5 Thus, 2 of B.P. Blg. 22 expressly provides:


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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 holderthereof 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.

In this case, after being notified on March 29, 1988 of the dishonor of their

previous check, petitioners gave GARDS a check for P19,860.16. They claim that

this check had been intended by them to replace the bad check they had previouslyissued to the GARDS. Based on the testimony of a GARDS accountant, however,

the Court of Appeals found that the check was actually payment for two bills, one

for the period of January 16 to January 31, 1988 in the amount of P9,930.08 and

another one for the period of March 16 to March 31, 1988 in the same amount. But

even if such check was intended to replace the bad one, its issuance on April 13,

198815 days after petitioners had been notified on March 29, 1988 of the

dishonor of their previous checkcannot negate the presumption that petitioners

knew of the insufficiency of funds to cover the amount of their previous check.Sec. 2 of B.P. Blg. 22 requires that such check be given within five (5) days from

the notice of dishonor to them.

Petitioners contend that, in accordance with the ruling in Lao v. Court of Appeals,

6 they should be acquitted because the preparation of checks is the responsibility of

the company accountant and all they do is sign the checks. They claim that they

rely on the word of the accountant that there are sufficient funds in the bank to pay

for the checks.

In the Lao case, the accused, as the Court found, had merely been made by her

employer, Premiere Investment House, to countersign checks in bank. The accused


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was a mere employee who did not have anything to do with the issuance of checks

for the company. She did not know to whom the checks would be paid as the

names of payees were written only later by the head of operations. Moreover, no

notice of dishonor was given to her as required by B.P. Blg. 22 2. It could thus

rightly be concluded that the accused issued checks to apply to account notknowing that at the time of issuance funds were insufficient to pay for the checks.

Petitioners in this case cannot pretend ignorance of the insufficiency of funds.

While it may be true that it was the company's accountant who actually prepared

the rubber check, the fact remains that petitioners are the owners and officers of the

company. Sec. 1 of B.P. Blg. 22 provides that "Where the check is drawn by a

corporation, company, or entity, the person or persons who actually signed thecheck in behalf of such drawer shall be liable under this Act.

In fact, petitioner Nieto testified that after the check in question was dishonored, he

instructed their company accountant to prepare a replacement check. 7 This belies

petitioners' claim that they had no hand in the preparation of checks 8 and shows

that petitioners were in control of the finances of the company.

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. 9 The affidavit in this case, which was made after 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


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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."

The Court of Appeals dismissed these allegations as irrelevant to the question of

petitioners' guilt. We think so ourselves. However, we believe that they can be

considered in determining the appropriate penalty to impose on petitioners.

B.P. Blg. 22, 1, par. 1 provides a penalty of "imprisonment of not less than thirtydays but not more than one (1) year or by a fine of not less than, but not more than

double, the amount of the check which fine shall in no case esceed two hundred

thousand pesos, or both such fine and imprisonment at the discretion of the Court."

Petitioners are first-time offenders. They are Filipino entrepreneurs who

presumably contribute to the national economy. Apparently, they brought this

appeal, believing in all good faith, although mistakenly, that they had not

committed a violation of B.P. Blg. 22. Otherwise, they could simply have accepted

the judgment of the trial court and applied for probation to evade a prison term. It

would best serve the ends of criminal justice if in fixing the penalty within the

range of discretion allowed by 1, par. 1, the same philosophy underlying the

Indeterminate Sentence Law is observed, namely, that of redeeming valuable

human material and preventing unnecessary deprivation of personal liberty and

economic usefulness with due regard to the protection of the social order. 10 In this


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case we believe that a fine in an amount equal to double the amount of the check

involved is an appropriate penalty to impose on each of the petitioners.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the

modification that the sentence of imprisonment is deleted and petitioners are each

ordered to pay a fine of P20,000.00 equivalent to double the amount of the check.

SO ORDERED

Melo and Puno, JJ., concur.

Martinez, J., is on leave.


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ADMINISTRATIVE CIRCULAR NO. 12-2000 February 21, 2001

RE : PENALTY FOR VIOLATION OF B.P. BLG. 22

Section 1 of B.P. Blg. 22 (An Act Penalizing the Making or Drawing and Issuance

of a Check Without Sufficient Funds for Credit and for Other Purposes) imposesthe penalty of imprisonment of not less than thirty (30) days but not more than one

(1) year or a fine of not less than but not more than double the amount of the

check, which fine shall in no case exceed P200,000, or both such fine andimprisonment at the discretion of the court.

In its decision inEduardo Vaca, v. Court of Appeals (G.R. No. 131714, 16

November 1998; 298 SCRA 656, 664) the Supreme Court (Second Division) per

Mr. Justice V. Mendoza, modified the sentence imposed for violation of B.P. Blg.

22 by deleting the penalty of imprisonment and imposing only the penalty of finein an amount double the amount of the check. In justification thereof, the Court

said:

Petitioners are first-time offenders. They are Filipino entrepreneurs who

presumably contribute to the national economy. Apparently, they brought

this appeal, believing in all good faith, although mistakenly that they had not

committed a violation of B.P. Blg. 22. Otherwise, they could simply have

accepted the judgment of the trial court and applied for probation to evade a

prison term. It would best serve the ends of criminal justice if in fixing the

penalty within the range of discretion allowed by Section 1, par. 1, the samephilosophy underlying the Indeterminate Sentence Law is observed, namely,

that of redeeming valuable human material and preventing unnecessary

deprivation f personal liberty and economic usefulness with due regard to

the protection of the social order. In this case, we believe that a fine in an

amount equal to double the amount of the check involved is an appropriate

penalty to impose on each of the petitioners In the recent case of Rosa Lim

v. People of the Philippines (G. R. No. 130038, 18 September 2000), the

Supreme Court en banc, applying Vaca also deleted the penalty of

imprisonment and sentenced the drawer of the bounced check to the

maximum of the fine allowed by B.P. Blg. 22, i.e., P200,000, and concluded

that such would best serve the ends of criminal justice.

All courts and judges concerned should henceforth take note of the foregoing

policy of the Supreme Court on the matter of the imposition of penalties for


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violations of B.P. Blg. 22. The Court Administrator shall cause the immediatedissemination of this Administrative Circular to all courts and judges concerned.

This Administrative Circular, referred to and approved by the Supreme Court en

banc, shall take effect upon its issuance.

Issued this 21st day of February, 2001.

[Sgd.] HILARIO G. DAVIDE, JR.Chief Justice


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ADMINISTRATIVE CIRCULAR NO. 13-2001 February 14, 2001

TO : ALL JUDGES

SUBJECT : CLARIFICATION OF ADMINISTRATIVE CIRCULAR NO.

12-2000 ON THE PENALTY FOR VIOLATION OF BATAS PAMBANSABLG. 22, OTHERWISE KNOWN AS THE BOUNCING CHECK LAW.

Clarification has been sought by concerned Judges and other parties regarding the

operation ofAdministrative Circular 12-2000 issued on 21 November 2000. In

particular, queries have been made regarding the authority of Judges to:

1. Impose the penalty of imprisonment for violations ofBatas Pambansa

Blg. 22; and

2. Impose subsidiary imprisonment in the event that the accused who is

found guilty of violating the provisions ofB.P. Blg. 22, is unable to pay the

fine which he is sentenced to pay considering thatAdministrative Circular

No. 12-2000 adopted the rulings in Eduardo Vaca v. Court of Appeals (G.R.

No. 131714, 16 November 1998, 298 SCRA 656) and Rosa Lim v. People of

the Philippines (G.R. No. 130038, 18 September 2000) as a policy of the

Supreme Court on the matter of the imposition of penalties for violations of

B.P. Blg. 22, without mentioning whether subsidiary imprisonment could beresorted to in case of the accused's inability to pay the fine.

The clear tenor and intention ofAdministrative Circular No. 12-2000 is not to

remove imprisonment as an alternative penalty, but to lay down a rule ofpreference in the application of the penalties provided for inB.P. Blg. 22.

The pursuit of this purpose clearly does not foreclose the possibility of

imprisonment for violations of B.P. Blg. 22. Neither does it defeat the legislativeintent behind the law.

Thus,Administrative Circular No. 12-2000 establishes a rule of preference in the

application of the penal provisions ofB.P. Blg. 22 such that where thecircumstances of both the offense and the offender clearly indicate good faith or a

clear mistake of fact without taint of negligence, the imposition of a fine alone

should be considered as the more appropriate penalty. Needless to say, the

determination of whether the circumstances warrant the imposition of a fine alone

rests solely upon the Judge. Should the Judge decide that imprisonment is the more


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appropriate penalty,Administrative Circular No. 12-2000 ought not be deemed ahindrance.

It is, therefore, understood that:

1.Administrative Circular 12-2000 does not remove imprisonment as analternative penalty for violations ofB.P. Blg. 22;

2. The Judges concerned may, in the exercise of sound discretion, and taking

into consideration the peculiar circumstances of each case, determine

whether the imposition of a fine alone would best serve the interests of

justice or whether forbearing to impose imprisonment would depreciate the

seriousness of the offense, work violence on the social order, or otherwise be

contrary to the imperatives of justice;

3. Should only a fine be imposed and the accused be unable to pay the fine,

there is no legal obstacle to the application of theRevised Penal

Code provisions on subsidiary imprisonment.

The issuance of this Administrative Circular was authorized by the Court En Banc

in A.M. No. 00-11-01-SC at its session of 13 February 2001.

The Clerk of Court of the Supreme Court and the Court Administrator shall

immediately cause the implementation of this Administrative Circular.

This Administrative Circular shall be published in a newspaper of general

circulation not later than 20 February 2001.

Issued this 14th day of February, 2001.

[Sgd.] HILARIO G. DAVIDE, JR.Chief Justice

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