Title
Abarquez vs. Court of Appeals
Case
G.R. No. 148557
Decision Date
Aug 7, 2003
Petitioner issued checks dishonored for insufficient funds, convicted under BP 22; acquitted in two cases due to pre-notice payment, fined P504,400.00.
bouncing checks law
violation
acquitted

Case Summary (G.R. No. 148557)

Issuance of Checks and Dishonor

There was no dispute that petitioner issued five checks drawn against Republic Planters Bank, Dagupan Branch, in favor of Fertiphil Corporation. The checks were: (1) Check No. 2956654 dated June 5, 1986 in the amount of P372,000.00; (2) Check No. 2956655 dated June 5, 1986 in the amount of P340,000.00; (3) Check No. 2954047 dated June 13, 1986 in the amount of P27,600.00; (4) Check No. 2956660 dated June 27, 1986 in the amount of P58,500.00; and (5) Check No. 2956662 dated July 1, 1986 in the amount of P52,200.00. It was also undisputed that the checks were dishonored because they were drawn against insufficient funds.

Fertiphil demanded payment to no avail, which prompted the filing of five informations for BP Blg. 22 with the RTC of Dagupan City, Branch 41.

Structure of the Informations Filed in the RTC

The information in Criminal Case No. D-8135 alleged that on or about June 14, 1986, petitioner willfully and unlawfully drew, issued, and delivered to Fertiphil Corporation Check No. 2956660, postdated June 27, 1986, in the amount of P58,500.00, in payment of fertilizer purchased, despite knowledge that funds deposited in the bank were insufficient to cover the face value. It further alleged that the check was dishonored for “DRAWN AGAINST INSUFFICIENT FUNDS”, returned to the complainant, and that petitioner failed and/or refused to pay and make good the check despite notice of dishonor and the lapse of more than five banking days.

Except for the dates of commission, check numbers, and amounts, the remaining informations were similarly worded. The other cases charged were: Criminal Case No. D-8136 for Check No. 2954047 in the amount of P27,600.00; Criminal Case No. D-8137 for Check No. 2956662 in the amount of P52,200.00; Criminal Case No. D-8176 for Check No. 2956655 in the amount of P340,000.00; and Criminal Case No. D-8177 for Check No. 2956654 in the amount of P372,000.00.

RTC Conviction

After trial, the RTC convicted petitioner of all five counts. For each case, it imposed one year imprisonment and ordered him to indemnify Fertiphil Corporation in the total amount of P844,500.00, plus costs. The RTC therefore treated each dishonored check as the basis for a separate conviction under BP Blg. 22.

Court of Appeals Ruling with Modification

Petitioner appealed to the Court of Appeals, which affirmed the RTC conviction but modified the penalty. While the CA affirmed guilt, it deleted imprisonment and ordered petitioner to pay a fine of P1,700,600.00, described as double the total amount of the five checks. The CA’s modification was expressly anchored on Administrative Circular No. 12-2000 issued by the Supreme Court En Banc on November 12, 2000.

Issues Raised by Petitioner

Before the Supreme Court, petitioner framed four principal issues: whether the CA erred in convicting petitioner in Criminal Case No. D-8137 where dishonor allegedly was due to DAUD (drawn against uncollected deposit), not DAIF (drawn against insufficient funds) or CA (closed account); whether the CA erred in convicting petitioner in Criminal Case Nos. D-8135 and D-8136 despite alleged payment after dishonor; whether the CA erred in convicting in Criminal Case Nos. D-8176 and D-8177 based on petitioner’s claim that the checks were not issued for account or for value because they were allegedly intended to secure payment after reconciliation; and whether the CA erred in imposing a total fine of P1,700,600.00, allegedly exceeding the statutory maximum under Sec. 1 of BP Blg. 22, which provides that the fine “shall in no case exceed P200,000.00.”

Petitioner’s Defenses and Admission of Issuance

Petitioner admitted the issuance of the subject checks but contended that he was not liable under BP Blg. 22. He made distinct defenses for each case.

For Criminal Case No. D-8135 (Check No. 2956660 for P58,500.00), petitioner alleged that while the check was dishonored on account of insufficient funds, it was nonetheless paid on July 28, 1986 through telegraphic transfer before any formal written demand or notice of dishonor, as evidenced by an official receipt.

For Criminal Case No. D-8136 (Check No. 2954047 for P27,600.00), petitioner likewise alleged dishonor for insufficiency of funds but asserted that he had made payment by demand draft and telegraphic transfer on July 17, 1986 and prior to formal written demand.

For Criminal Case No. D-8137 (Check No. 2956662), petitioner claimed that the dishonor reason was DAUD rather than DAIF, and he added that he paid within five banking days from knowledge of dishonor.

For Criminal Case Nos. D-8176 and D-8177, petitioner argued that Fertiphil had no right to encash the checks because they were not issued for account or for value. He alleged that they were merely intended to secure payment of his debt to Fertiphil after reconciliation of their books.

Governing Elements and Strict Construction of Penal Statutes

The Court recalled that under cases such as Meriz v. People, the essential elements of BP Blg. 22 include: the making, drawing, and issuance of a check to apply to account or for value; the maker’s knowledge at the time of issuance that funds or credit with the drawee bank are insufficient to cover the check upon presentment; and subsequent dishonor for insufficiency of funds or credit, or dishonor because the drawer ordered stop payment without valid cause.

The Court emphasized the requirement that penal liability depends not only on dishonor but also on the fact that the accused was actually notified in writing of the dishonor. It reiterated the rule that penal statutes are construed strictly against the State and liberally in favor of the accused. It also recognized the statutory evidentiary presumption of knowledge, which is rebuttable by payment of the value of the check either by the drawer or by the drawee bank within five banking days from notice of dishonor to the drawer.

It further noted that notice is essential so the issuer may pay or arrange payment within the period prescribed by law.

Application to Criminal Case No. D-8135: Payment Before Written Notice

In Criminal Case No. D-8135, the Court found that petitioner paid the face value of P58,500.00 even before Fertiphil made any formal written demand. The Court observed that payment was made on July 28, 1986, a little over three weeks after the check was presented for payment on July 3, 1986. Petitioner was only informed by a demand letter dated September 27, 1986, which was about two months after payment. On these facts, the Court held that petitioner could not be held liable under BP Blg. 22 in Criminal Case No. D-8135.

Application to Criminal Case No. D-8136: Payment on the Same Day as Presentment

In Criminal Case No. D-8136, the Court similarly held that petitioner was not liable. It found that petitioner had paid the face value of the check by demand draft and telegraphic transfer on July 17, 1986. It further noted that petitioner paid on the same day the check was presented for payment, before the formal written demand letter was sent on September 27, 1986. As a result, the Court held petitioner could not be held liable under BP Blg. 22 for Criminal Case No. D-8136.

Criminal Case No. D-8137: Dishonor Explained as Insufficient Funds, Not Uncollected Deposit

For Criminal Case No. D-8137, the Court treated the core factual issue as the reason for dishonor. While petitioner claimed dishonor for DAUD, the records showed that the stated reason for dishonor was insufficient funds (DAIF). The Court relied on the bank ledger showing that when the check was drawn on July 1, 1986, petitioner’s account balance was P48,166.196, which was insufficient to cover the face value. The Court also noted that when the check was presented on July 8, 1986, the check still had insufficient funds because the deposits petitioner claimed were made were not yet credited.

The Court discussed Tan v. People to underline that even with uncollected deposits, banks may choose either to honor checks or dishonor them at their discretion. It concluded, however, that on the facts, the dishonor reason was in substance DAIF, not DAUD, and that petitioner’s claim of non-liability on that basis was unsupported.

Criminal Cases Nos. D-8176 and D-8177: Issuance Regardless of Alleged Purpose

For Criminal Case Nos. D-8176 and D-8177, petitioner asserted that the checks were not issued for account or for value and were intended merely to secure payment after reconciliation. The Court rejected the argument. It cited Ong v. People for the proposition that BP Blg. 22 punishes the issuance of a bouncing check, not the purpose for which it was issued, nor the terms and conditions surrounding its issuance. The Court also invoked Meriz v. People, explaining that even a check issued as evidence of debt has the same effect once presented for payment and processed by the drawee bank. The Court stressed that BP Blg. 22 is a policy designed to ensure the stability and commercial value of checks as substitutes for currency, and it treats the offense as malum prohibitum. The gravamen is the act of issuing a bad check that is dishonored upon presentment.

Treatment of Penalty and Administrative Circulars

The Court sustained guilt in Criminal Case Nos. D-8137, D-8176, and D-8177, but it addressed penalty issues because the CA deleted imprisonment and imposed a fine of P1,700,600.00, based on double the total amount of the five checks under Administrative Circular No. 12-2000.

The Court clarified that Administrative Circular No. 12-2000 did not authorize non-imposition of imprisonment in every BP Blg. 22 case. It explained that the rule allowing the omission of imprisonment should be anchored on the peculiar circumstances described in Vaca v. Court of Appeals and discussed in Lim v. People, particularly where there was good faith or a clear mistake of fact without taint of negligence, among other conditions. The Court noted that the CA decision did not adequately expla

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms