Title
Domagsang vs. Court of Appeals
Case
G.R. No. 139292
Decision Date
Dec 5, 2000
Petitioner acquitted under B.P. Blg. 22 due to lack of written notice of dishonor but ordered to pay P563,800 with interest for dishonored checks.
legal interest
borrower
acquitted

Case Summary (G.R. No. 139292)

Factual Background

Petitioner approached Ignacio H. Garcia, Jr., an Assistant Vice President of METROBANK, for a loan. Garcia accommodated petitioner with a loan totaling the face amount of the checks given to him, in exchange for which petitioner issued eighteen postdated checks as repayment. When respondents presented the checks to the drawee bank, each was dishonored with the notation "Account closed." Garcia testified that he telephoned petitioner and demanded payment and that his counsel sent a written demand letter which petitioner ignored.

Information and Charges

Eighteen Informations were filed, docketed Criminal Cases No. 92-4465 to No. 92-4482, charging petitioner with having made, drawn and issued checks to apply on account or for value, knowing she lacked sufficient funds or credit with the drawee bank. The sample Information alleged issuance of Check No. 149900 dated June 24, 1991 in the amount of P50,000.00, and charged that the check, when presented within ninety days, was dishonored for the reason "ACCOUNT CLOSED," and that petitioner failed to pay or to make arrangements for payment within five banking days after receipt of notice of dishonor.

Trial Court Proceedings

The cases were consolidated and tried following petitioner's plea of "not guilty" upon arraignment. Petitioner filed a demurrer to the evidence, contending absence of a written demand and that the checks were collaterals or evidence of indebtedness rather than payment; the trial court denied the demurrer. Petitioner later, through counsel, waived her right to present evidence. Relying on the prosecution's evidence, the Regional Trial Court convicted petitioner on eighteen counts under B.P. Blg. 22 and ordered her to serve one year imprisonment for each count and to pay the private complainant the amount of P573,800.00.

Court of Appeals' Ruling

The Court of Appeals affirmed the trial court's judgment in toto. The appellate court held that knowledge of insufficiency of funds is presumed from the dishonor of the checks and that the statute did not require a written notice of dishonor. The Court of Appeals relied on testimony that the complainant made several oral demands and that his lawyer mailed a demand letter which petitioner ignored, and it invoked authorities including People vs. Laggui and People vs. Garcia in support of admissibility and sufficiency of the oral and testimonial evidence.

Issues Presented to the Supreme Court

Petitioner raised three principal issues: whether an alleged verbal demand was sufficient to convict under B.P. Blg. 22; whether the Court of Appeals committed reversible error in holding that written notice of dishonor was unnecessary contrary to Lao vs. Court of Appeals; and whether the appellate court erred in considering an alleged written demand letter despite the prosecution's failure to formally offer it in evidence.

Applicable Law and Statutory Elements

The Court identified the elements of the offense under Section 1, B.P. Blg. 22: (1) the making, drawing and issuance of a check to apply on account or for value; (2) the maker's knowledge that he lacked sufficient funds or credit at the time of issue; and (3) subsequent dishonor by the drawee for insufficiency of funds or credit. Section 2 creates a prima facie presumption of knowledge when the dishonored check is presented within ninety days and the maker fails to pay or to make arrangements for payment within five banking days after receiving notice of dishonor. Section 3 requires the drawee, when refusing payment, to state the reason and to explicitly state insufficiency of funds in the notice of dishonor, and further provides that an unpaid and dishonored check with the drawee's stamped or written reason constitutes prima facie evidence of issuance, due presentment and dishonor.

Precedent on Notice and Due Process

The Court reviewed Lao vs. Court of Appeals, which construed Sections 2 and 3 to require that notice of dishonor be actually served on the maker to afford the maker an opportunity to avert prosecution. Lao held that the presumption under Section 2 arises only when the maker failed, within five banking days from receipt of notice, to pay or to make arrangements; accordingly, absence of notice deprives the accused of the opportunity to perform the statutory act that would abate criminal liability and therefore raises procedural due process concerns.

Supreme Court's Analysis of Oral Notice

Applying the statute and precedent, the Court concluded that a mere oral demand or verbal notice was insufficient to satisfy the statutory notice requirement for the purpose of establishing actual knowledge of insufficiency of funds. The Court reasoned that Sections 2 and 3 read together manifest a congressional purpose that the maker be actually notified in writing of the fact of dishonor so that the maker may exercise the statutory five-banking-day remedy. The Court noted that penal statutes must be strictly construed in favor of the accused and that the absence of written notice foreclosed proof of the ingredient of actual knowledge.

Evidentiary Rulings and Formal Offer

The Court observed that the Court of Appeals credited testimony that the complainant's counsel sent a written demand letter, but found the prosecution failed to formally offer the purported letter in evidence at trial. The Court reiterated that cour

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