G.R. No. 149995 - Palana vs. People

Petitioner Isidro Pablito M. Palana was charged on August 19, 1991 with violation of Batas Pambansa (B.P.) Blg. 22 ("Bouncing Checks Law") by the Regional Trial Court (RTC) of Makati City, Branch 63.
The Information alleged that in September 1987, petitioner willfully, unlawfully, and knowingly issued Check No. 326317PR drawn against Asian Savings Bank Paseo de Roxas Branch in the amount of ₱590,000.00, postdated February 15, 1988, payable to Dr. Alex B. Carlos, the private complainant.
Petitioner allegedly knew he did not have sufficient funds or credit with the drawee bank for the payment of the check in full when presented within 90 days from the date thereof. The check was subsequently dishonored for insufficiency of funds.
Despite notice of dishonor, petitioner failed to pay or make arrangements for payment within five banking days.

The case was archived on January 30, 1992, due to petitioner’s non-apprehension after issuance of an arrest warrant.
The warrant of arrest was recalled and set aside on June 27, 1995, after petitioner posted bail.
Petitioner was arraigned on July 25, 1995, and pleaded not guilty.
Trial ensued.

Private complainant Alex B. Carlos testified that petitioner and his wife borrowed ₱590,000.00 from him in September 1987, and issued the postdated check as security for the loan.
Complainant stated the check was dishonored when presented due to insufficient funds, and petitioner failed to settle the amount despite demand.
Petitioner alleged that the money given by complainant constituted an investment for a partnership business named Palana’s General Merchandising, opened December 1, 1987.
He claimed the check was not issued in September 1987 but in February 1988 and was meant only to be shown to a textile supplier as a form of assurance. Petitioner also alleged that complainant knew the check was not funded.

On September 23, 1997, the RTC found petitioner guilty of violating B.P. Blg. 22, sentencing him to six months imprisonment and ordering indemnification of ₱590,000.00 plus legal interest to complainant.
The Court of Appeals affirmed the trial court’s decision in toto, rejecting petitioner’s "investment theory" and upholding that the check was issued as security for the loan.
Both courts rejected the alleged existence of a partnership between petitioner and complainant since the business was registered solely under petitioner’s name.
Petitioner’s appeal to the Supreme Court followed.

Whether the Court of Appeals erred in disregarding the defense that the issuance of the check was not for consideration or value but was intended as a binding instrument to return petitioner’s investment in the partnership.
Whether the Regional Trial Court had jurisdiction over the case despite the existence of R.A. 7691, which expanded the jurisdiction of Metropolitan Trial Courts by the time of petitioner’s arraignment.