G.R. No. 160127 - Lunaria vs. People

In October 1988, petitioner Rafael P. Lunaria entered into a partnership with private complainant Nemesio Artaiz for a money-lending business.
Petitioner served as the industrial partner while Artaiz acted as the financer.
At the time, petitioner was employed as a cashier at Far East Bank and Trust Company in Meycauayan, Bulacan, and his role enabled him to offer loans to prospective borrowers beyond his branch’s capacity.

The modus operandi involved petitioner informing Artaiz of the intended loan amount before initiating transactions.
Artaiz would then issue a check drawn against his bank account, the proceeds of which were used to fund the loan.
In return, petitioner would issue a corresponding check to Artaiz covering the amount lent plus the agreed share of interest.
As the arrangement became routine, both parties established trust by exchanging pre-signed checks that were intentionally left blank in terms of payee, date, and amount.
These blanks were meant to be filled in at a later time, based on each other’s advice, reflecting a longstanding business practice between them.

The partnership came to an end in November 1989 when Artaiz expressed his unwillingness to continue the business relationship.
Subsequently, one of the checks issued by the petitioner to Artaiz was dishonored due to insufficient funds.
When questioned by Artaiz regarding the bounced check, petitioner explained that he had been implicated in a murder case, which impeded his ability to fund the check and prompted a request for Artaiz not to deposit further checks.
Petitioner was charged with murder in December 1989 and was detained until his release on bail in May 1990, eventually being acquitted in December 1990.

After his release on bail and subsequent acquittal, Artaiz approached petitioner in May 1990 demanding payment for the outstanding amount.
Petitioner requested additional time to prepare the necessary funds, citing ongoing issues with collecting on the loans.
In June 1990, a meeting was held at Artaiz’s residence where both parties conducted an accounting of their financial dealings.
It was agreed during this meeting that petitioner’s debt to Artaiz amounted to ₱844,000.00.
Petitioner issued a post-dated check to Artaiz for the agreed amount, with the check dated for December 1990.
Upon its maturity, the check was dishonored due to the closure of the petitioner’s account, prompting Artaiz to issue a demand letter and later seek settlement through personal negotiation.

Petitioner was charged with a violation of Batas Pambansa Blg. 22 for the issuance of the dishonored check.
The Regional Trial Court (RTC) of Valenzuela City, Branch 75, found petitioner guilty, sentencing him to one (1) year of imprisonment and ordering him to pay Artaiz ₱844,000.00 along with the cost of suit.
The Court of Appeals (CA) affirmed the RTC’s decision in toto.
Petitioner filed a petition for review on certiorari under Rule 45 of the Revised Rules of Court, challenging both the factual findings and the penalty imposed by the lower courts.

Whether the subject check was duly “made,” “drawn,” and “issued” by petitioner under the established business practice of exchanging pre-signed checks.
Whether the check was received by Artaiz without proper consideration, given the informal method used to complete its material blanks.
Whether the inconsistencies and contradictions in Artaiz’s oral testimony, which petitioner argued amounted to hearsay, warranted exclusion.

Whether the prosecution failed to establish the essential elements of the crime under Batas Pambansa Blg. 22.
Whether the findings of fact by the RTC and CA should be re-assessed in a petition for review, given that such appeals are generally confined to errors of law.

Whether the imposition of imprisonment, as opposed to a fine, was appropriate under the circumstances of the case, especially in light of the rule of preference in penalty imposition for BP 22 cases.
Whether the CA erred by failing to delete the imprisonment penalty and instead imposing a fine alongside subsidiary imprisonment provisions.