G.R. No. 107898 - Lim vs. Court of Appeals

Case Summary (G.R. No. 107898)

Petitioner and Respondent

Petitioners: Manuel Lim and Rosita Lim.
Respondents: Court of Appeals and the People of the Philippines (prosecution on behalf of LINTON).

Key Dates and Documentary Evidence

Deliveries and check issuances occurred between April and September 1983.
Specific checks and amounts: Check No. 027700 (P51,800; postdated 3 Sept. 1983), Check No. 027699 (P63,455; postdated 20 Aug. 1983), and seven checks issued for various deliveries of “Z” purlins (including Nos. 027683, 027684, 027719, 027720, 027721 with amounts ranging from P27,900 to P37,200, and P32,550). Documentary exhibits referenced by the courts included the checks, notices of dishonor, bank ledger, letters of complaint (Exhs. 21, 22), and a civil judgment (Exh. 23).

Applicable Law

1987 Philippine Constitution (governing legal framework for cases decided in 1995).
Batas Pambansa Blg. 22 (Bouncing Checks Law) — elements and presumptions under Sections 1–3.
Revised Penal Code, Art. 315(2)(d) (estafa) — as originally charged but later addressed on appeal.
Rules on Criminal Procedure (proper venue under Rule 110, formerly Rule 110 of the Revised Rules of Court).
Negotiable Instruments Law (definition of “issue” and “holder,” Sec. 191 referenced by the courts).

Facts: Transactions and Delivery of Goods

RIGI ordered and received steel products from LINTON over several dates in 1983. On 27 May 1983 RIGI ordered 100 mild steel plates (P51,815), paid by SOLIDBANK check No. 027700. On 30 May 1983 RIGI ordered 65 mild steel plates (P63,455), paid by check No. 027699. RIGI also ordered 2,600 “Z” purlins delivered on multiple dates; payment for those deliveries was made by seven SOLIDBANK checks identified in the record. LINTON’s vice-president testified that when those checks were deposited they were dishonored with the bank stamping “insufficiency of funds” and “payment stopped.”

Charges Filed

Petitioners were charged with: (1) three counts of estafa under Art. 315(2)(d) of the Revised Penal Code (Crim. Cases Nos. 1696–1698-MN), alleging deceit in issuing checks as payment that were later dishonored; and (2) seven counts of violating B.P. Blg. 22 (Crim. Cases Nos. 1699–1705-MN), alleging they issued checks knowing they lacked sufficient funds or credit and that the checks were subsequently dishonored for insufficiency of funds.

Trial Court Findings and Sentences

The Regional Trial Court (Malabon) convicted both petitioners of estafa and of violating B.P. Blg. 22. For estafa (three counts) the court imposed indeterminate penalties and ordered indemnities equal to the value of the goods. For the B.P. Blg. 22 convictions (seven counts) the court imposed straight penalties of one year imprisonment for each count and ordered indemnities corresponding to each dishonored check.

Appeal and Court of Appeals Ruling

On appeal the Court of Appeals reversed the estafa convictions, holding that the checks were not issued as payment of existing obligations at the time of issuance, and therefore the estafa elements were not satisfied. The Court of Appeals, however, affirmed conviction for violation of B.P. Blg. 22, finding that the elements of that statutory offense were established. A motion for reconsideration was denied.

Issues Raised by Petitioners

The petition to the Supreme Court raised principally: (1) lack of jurisdiction of the RTC of Malabon because material acts occurred in Kalookan City; (2) absence of estafa because the checks were issued weeks after delivery; and (3) absence of liability under B.P. Blg. 22 because petitioners ordered stop-payment for valid reasons (nonconforming goods) and had sufficient funds at the time of issuance and presentment.

Legal Elements of B.P. Blg. 22 Emphasized by the Court

The Court reiterated the statutory gravamen: the conscious issuance of a check knowing insufficient funds or credit with the drawee bank for payment in full upon presentment, and subsequent dishonor for insufficiency or would have been dishonored but for an unjustified stop-payment. Section 2 creates a prima facie presumption of such knowledge when a check, presented within ninety days of issuance, is dishonored for insufficiency unless the drawer pays the holder or arranges full payment within five banking days after notice.

Venue and Jurisdiction Analysis

The Court applied Rule 110 (Sec. 14/15) regarding venue: criminal prosecution may be instituted in the municipality where the offense was committed or any one of the essential ingredients occurred. The Court treated violation of B.P. Blg. 22 as a transitory or continuing offense for venue purposes, meaning it may be tried in any jurisdiction where part of the offense occurred. The Court analyzed issuance/delivery under the Negotiable Instruments Law: the decisive act is delivery to the holder. Although LINTON’s collector received the checks at petitioners’ Kalookan business, the Court found the checks were actually issued and delivered to LINTON at its Balut, Navotas office; accordingly, the Information’s allegation that the offense occurred in Navotas (Malabon RTC’s territorial jurisdiction) was sufficient to confer jurisdiction on the RTC of Malabon. The continuing nature of the drawer’s knowledge also permitted venue in Malabon or Kalookan, and the first court taking cognizance is entitled to try the case.

Findings on Knowledge, Stop-Payment, and Evidence

The Court rejected petitioners’ claim

Case Syllabus (G.R. No. 107898)

Facts

Petitioners Manuel Lim and Rosita Lim, spouses, are president and treasurer, respectively, of Rigi Bilt Industries, Inc. (RIGI), which for years transacted business with Linton Commercial Company, Inc. (LINTON), supplier of steel plates, steel bars, flat bars and "Z" purlin sticks used by RIGI in fabrication, installation and building of steel structures.
On 27 May 1983 the Lims ordered 100 pieces of mild steel plates worth P51,815.00 from LINTON which were delivered the same day at petitioners' place of business at 666 7th Avenue, 8th Street, Kalookan City; payment was by SOLIDBANK Check No. 027700, postdated 3 September 1983 in the amount of P51,800.00 (Exh. "C").
On 30 May 1983 the Lims ordered another 65 pieces of mild steel plates worth P63,455.00 from LINTON which were delivered the same day; payment was by SOLIDBANK Check No. 027699, postdated 20 August 1983 in the amount of P63,455.00 (Exh. "G").
The Lims ordered 2,600 "Z" purlins worth P241,800.00 which were delivered on various dates (15 and 22 April 1983; 11, 14, 20, 23, 25, 28 and 30 May 1983; and 2 and 9 June 1983). To pay for these deliveries the Lims issued seven SOLIDBANK checks. The seven checks and their issuance data and amounts are:
- Check No. 027683 — Date of issue: 16 July 1983 — Amount: P27,900.00 (Exh. "L").
- Check No. 027684 — Date of issue: 23 July 1983 — Amount: P27,900.00 (Exh. "N").
- Check No. 027719 — Date of issue: 6 August 1983 — Amount: P32,550.00 (Exh. "P").
- Check No. 027720 — Date of issue: 13 August 1983 — Amount: P27,900.00 (Exh. "S").
- Check No. 027721 — Date of issue: 27 August 1983 — Amount: P37,200.00 (Exh. "V").
- Check No. 027699 — (see above) postdated 20 August 1983 — Amount: P63,455.00 (Exh. "G").
- Check No. 027700 — (see above) postdated 3 September 1983 — Amount: P51,800.00 (Exh. "C").
William Yu Bin, Vice President and Sales Manager of LINTON, testified that when the seven checks were deposited with the Rizal Commercial Banking Corporation they were dishonored with the notation "payment stopped" stamped thereon.
Salvador Alfonso, signature verifier of SOLIDBANK, Grace Park Branch, Kalookan City (where petitioners maintained an account), testified and produced a table of presentment and dishonor showing:
- Check No. 027683 — Presented 22 July 1983 — Reason for dishonor: Payment Stopped (Exh. "M").
- Check No. 027684 — Presented 23 July 1983 — Reason for dishonor: Payment Stopped and Drawn Against Insufficient Funds (Exhs. "O," "O-1," "O-2").
- Check No. 027699 — Presented 24 Aug. 1983 — Reason for dishonor: Payment Stopped and Drawn Against Insufficient Funds (Exhs. "H," "H-1").
- Check No. 027700 — Presented 5 Sept. 1983 — Reason for dishonor: Payment Stopped and Drawn Against Insufficient Funds (Exhs. "D," "D-1," "D-2").
- Check No. 027719 — Presented 9 Aug. 1983 — Reason for dishonor: Drawn Against Insufficient Funds (Exhs. "Q," "Q-1").
- Check No. 027720 — Presented 16 Aug. 1983 — Reason for dishonor: Payment Stopped and Drawn Against Insufficient Funds (Exhs. "T," "U," "U-1").
- Check No. 027721 — Presented 30 Aug. 1983 — Reason for dishonor: Payment Stopped and Drawn Against Insufficient Funds (Exhs. "W," "W-1," "W-2").
Manuel Lim admitted issuing the seven checks to pay LINTON deliveries but denied that RIGI's account lacked funds to cover the checks; he presented a bank ledger showing a balance of P65,752.75 and claimed he ordered SOLIDBANK to stop payment because the supplies delivered by LINTON were not in accordance with specifications in the purchase orders.
Rosita Lim did not testify because, according to petitioners, her statements would only be corroborative.

Charges and Trial Court Disposition

Petitioners were charged before the Regional Trial Court (RTC) of Malabon with:
- Estafa on three (3) counts under Article 315, par. 2(d) of The Revised Penal Code — docketed as Criminal Cases Nos. 1696-MN to 1698-MN — alleging that Manuel and Rosita conspired, purchased goods from LINTON and, with deceit, issued seven SOLIDBANK checks as payment which were dishonored and that they refused to pay despite demand.
- Seven (7) counts of violation of B.P. Blg. 22 (the Bouncing Checks Law) — docketed as Criminal Cases Nos. 1699-MN to 1705-MN — alleging issuance of checks knowing they did not have sufficient funds or credit and that the checks were dishonored for insufficiency of funds and that petitioners failed to pay or make arrangements within five (5) banking days upon notice.
The RTC, in its decision dated 25 January 1989, found both accused guilty of estafa and of violation of B.P. Blg. 22.
- In Crim. Case No. 1696-MN (estafa) petitioners were sentenced to an indeterminate penalty of six (6) years and one (1) day prision mayor as minimum to twelve (12) years and one (1) day reclusion temporal as maximum, plus one (1) year for each additional P10,000.00, with accessory penalties, and ordered to indemnify LINTON P241,800.00. Similar sentences and indemnities were imposed in Crim. Cases Nos. 1697-MN and 1698-MN (indemnities of P63,455.00 and P51,800.00 respectively).
- In Crim. Case No. 1699-MN (B.P. Blg. 22) petitioners were sentenced to a straight penalty of one (1) year imprisonment with accessory penalties, costs, and ordered to indemnify LINTON P27,900.00. Similar penalties and specified indemnities were imposed in Crim. Cases Nos. 1700-MN to 1705-MN (indemnities: P32,550.00; P27,900.00; P27,900.00; P63,455.00; P51,800.00; and P37,200.00, respectively) (Rollo, pp. 79-80).

Appeal to the Court of Appeals and Its Ruling

On appeal the accused argued: (a) the RTC of Malabon lacked jurisdiction because offenses were committed outside its territory; (b) they could not be liable for estafa because checks were issued after delivery of goods; and (c) they could not be liable under B.P. Blg. 22 because they ordered payment stopped due to nonconforming goods and had sufficient funds.
The Court of Appeals, in a decision dated 18 September 1992 (pened by Justice Vicente V. Mendoza, Chairman), reviewed the evidence and:
- Acquitted the accused-appellants of estafa on the ground that the checks were not made in payment of an obligation contracted at the time of their issuance.
- Affirmed the trial court's finding of guilt fo