G.R. No. 50173 - Castro vs. Mendoza

Father and son, Pio Castro and Haniel Castro, were charged with estafa under Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic Act 4885 and Presidential Decree No. 818, for issuing a bad check.
The criminal information alleged that the accused, with deliberate intent to gain by fraudulent means, issued a check knowing there were insufficient funds in the account.

In October 1974, a chance meeting on board a boat between Pio Castro and Victor Elipe, a hardware store owner in Cebu City, led to the establishment of a business relationship.
Pio Castro needed construction materials for his apartment house in Tagbilaran City, and Elipe agreed to supply the items on a cash basis.
Multiple orders and deliveries were made between 09 October 1974 and 25 November 1974, resulting in an accumulated unpaid account of P18,081.15.
Despite repeated calls for payment by Elipe, Castro continuously requested extensions, leading to deferred payment obligations.

On 21 April 1975, Haniel Castro, acting on behalf of his father’s indebtedness, issued an Insular Bank of Asia and America check (No. TAG 1600-702) for the entire amount due.
When presented for encashment, the check was dishonored because the petitioner’s bank account had been closed, indicating insufficient funds to cover the amount.

Following the dishonor of the check, Victor Elipe made further demands for payment, but received only excuses and promises from the Castros.
Exasperated, Elipe filed his complaint, which led to the criminal information charging both Pio and Haniel Castro with estafa.

On 06 February 1979, the court a quo rendered a judgment finding both accused guilty of estafa beyond reasonable doubt.
The convicted were sentenced to an indeterminate penalty of one year, eight months, and twenty-one days as minimum to five years, two months, and twenty days as maximum, along with accessory penalties, indemnification to Elipe, and costs of the proceedings.

The petitioners questioned the conviction on the grounds that the factual setting constituted a civil, not criminal, liability.
The Solicitor General recommended acquittal, stressing that the issuance of the bad check in settling a pre-existing obligation did not satisfy the required elements of estafa.

Whether the issuance of a bad check to pay a pre-existing debt falls within the ambit of estafa as defined under Article 315, paragraph 2(d) of the Revised Penal Code.
Whether the fraudulent act (false pretenses or deceit) required by the statute was committed prior to or simultaneously with the execution of the check.

Whether the check, issued as full settlement of an existing credit transaction, involved obtaining a material benefit or consideration by deceit.
Whether the absence of an immediate or concurrent material gain nullified the element of fraud necessary to establish estafa.

Whether Batas Pambansa Blg. 22 should be applied retroactively, in view of the facts arising prior to its enactment.
The relevance and interpretation of the false pretense or fraudulent act under the statutory provisions, given the pre-existing nature of the obligation.