Title
Moster vs. People
Case
G.R. No. 167461
Decision Date
Feb 19, 2008
Petitioner acquitted of B.P. Blg. 22 charges due to lack of proof of notice of dishonor but held civilly liable for unpaid checks with interest.
bouncing checks law
violation
lack of proof

Case Summary (G.R. No. 167461)

Factual Background

Presas testified that, sometime in August 1995, she lent petitioner P450,000, and petitioner issued as payment three postdated PhilBank checks payable to cash. These checks were Check No. 026137 dated October 31, 1995 for P94,257.00, Check No. 026138 dated October 31, 1995 for P188,514.00, and Check No. 026124 dated December 31, 1995 for P84,831.00.

Presas stated that she did not immediately deposit all the checks upon request and assurance from petitioner that the checks would be replaced with cash. When she could no longer wait, she deposited Check Nos. 026138 and 026124 sometime in January 1996 and March 1996, respectively. Both were dishonored because petitioner’s account had been closed. Presas explained that she did not deposit Check No. 026137 after agreeing to petitioner’s request to withhold its deposit because it had not yet been funded. After Presas received notice of dishonor for the two deposited checks, she informed petitioner and demanded payment of the checks’ value.

Presas, through counsel, sent a letter dated January 14, 1997 demanding settlement of P367,602 representing the total value of the three checks within five days from receipt. Petitioner did not comply, prompting the filing of three Informations for violation of B.P. Blg. 22 docketed as Criminal Case Nos. 178240, 178241, and 178242, all filed in Branch 49, Metropolitan Trial Court (MeTC), Caloocan City.

Informations and Trial Evidence

The Informations were substantially similar, differing only as to the check numbers, dates, and amounts. The Informations charged that petitioner had willfully and unlawfully issued a check knowing that she had no sufficient funds or credit for payment in full upon presentment, and that the check had been dishonored for the reason account closed, and that petitioner failed to pay despite receipt of notice of dishonor.

At trial, Alfredo S. Daza, Branch Manager of PhilBank, identified the subject checks as PhilBank checks drawn against petitioner’s account. He testified that only Check Nos. 026138 and 026124 were presented to the bank for clearing and that both were dishonored because the account was closed. He presented a certified true copy of a computer printout indicating that petitioner’s account had a temporary overdraft or negative balance of P3,301.04 as of November 22, 1995, which, according to him, led to the account being closed. Daza explained that banks can close accounts when checks are issued without sufficient funds.

Petitioner, for her part, admitted issuing the checks. She claimed that she received earlier loans from Presas secured by her Isuzu vehicle and that the loan amount, with ballooning interest, eventually totaled P375,345. According to petitioner, the three PhilBank checks corresponded to payment for the loan. She testified that after the two dishonored checks bounced, she replaced them with Asiatrust Bank Check No. 0446323 dated February 8, 1996 for P273,345, the value of the two bounced checks. She further stated that Presas did not encash Check No. 026137, and that when petitioner tried to retrieve the initial three checks, Presas refused, insisting interest remained due. Petitioner also testified that she was able to pay P6,000 pesos but did not pay the remaining amounts covered by the checks because, she claimed, the replacement check arrangement and prior agreement were involved.

MeTC Decision

On December 27, 2000, the MeTC acquitted petitioner in Criminal Case No. 178241 involving Check No. 026137. It reasoned that an essential element of B.P. Blg. 22 required that the check be presented and subsequently dishonored for insufficiency of funds or credit; since Check No. 026137 was not presented to the drawee bank, it could not have been dishonored for insufficiency of funds.

The MeTC, however, convicted petitioner for the remaining two counts, sentencing her to pay fines of P200,000.00 in Criminal Case No. 178240 and P85,000.00 in Criminal Case No. 178242, with subsidiary imprisonment in case of insolvency. It also ordered petitioner to pay Presas P367,602.00, representing the value of the three PhilBank checks that remained unpaid, with interest at 12% per annum from February 1996 until fully paid, plus costs. The MeTC’s finding proceeded despite the acquittal of the case involving one check not presented for dishonor.

RTC and Court of Appeals Rulings

The RTC affirmed the MeTC’s decision in toto, and denied petitioner’s motion for reconsideration. On appeal, the Court of Appeals affirmed the conviction but modified the monetary award. It ordered petitioner, in addition to the fines imposed, to pay P273,345.00—representing the value of the two PhilBank checks that were still unpaid—with interest at 12% per annum from February 1996 until the amount was fully paid, and to pay costs.

Petitioner sought reconsideration, but the appellate court denied the motion. Hence, petitioner filed the present petition before the Supreme Court.

Issues Raised

Petitioner anchored her petition on two questions. First, she argued that her guilt was not proven beyond reasonable doubt and that the Court of Appeals disregarded controlling precedents on notice of dishonor and proof of knowledge of insufficiency of funds under B.P. Blg. 22. Second, she argued that the Court of Appeals erred in holding her liable not only for conviction but also for the modified order that she pay the value of the two checks with 12% interest, insisting that she had already settled her obligation by replacing the bounced checks with Asiatrust Bank Check No. 0446323.

The Parties’ Contentions

Petitioner did not dispute that she issued the checks. She maintained that she could not be held liable under B.P. Blg. 22 because the prosecution failed to prove the element of knowledge of insufficiency of funds, particularly because the prosecution did not establish that she actually received a written notice of dishonor. She also argued that she had already replaced the dishonored checks with a replacement check.

The Office of the Solicitor General, for the People, countered that petitioner was duly notified of the dishonor when Presas sent petitioner the demand letter dated January 14, 1997, which arrived on January 29, 1997, and that the prosecution presented both the registry receipt and the registry return card to prove mailing and receipt. The People also invoked petitioner’s admission that she had replaced the dishonored checks with Asiatrust Bank Check No. 0446323.

Legal Basis and Reasoning

The Supreme Court held that B.P. Blg. 22 punishes as malum prohibitum the issuance of a worthless check, provided the statutory elements are proven. It reiterated the elements under Section 1 of B.P. Blg. 22: (one) the making, drawing, and issuance of a check for value; (two) the issuer’s knowledge, at the time of issue, of insufficient funds or credit; and (three) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or for the same reason, had the issuer not ordered the bank to stop payment.

After examining the record, the Court found that only the first and third elements were established. It accepted that petitioner admitted issuing the checks and that the two checks presented were dishonored because the account was closed. It also recognized that under Section 3 of B.P. Blg. 22, the introduction in evidence of the dishonored check bearing the drawee’s refusal to pay and the reason for dishonor constitutes prima facie evidence of the making or issuing of the checks, due presentment, and dishonor for the indicated reason.

However, the Court rejected the prosecution’s proof of the statutory basis for the second element—knowledge of insufficiency of funds. It explained that the presumption of knowledge created by Section 2 of B.P. Blg. 22 arises only after it is shown that the issuer received written notice of dishonor and failed to pay within five (5) banking days from receipt. The Court emphasized the criminal standard: while notice may ordinarily be shown by preponderance of evidence, in criminal cases the prosecution must prove beyond reasonable doubt the receipt of the notice that triggers the statutory presumption.

The Supreme Court found the proof inadequate. The prosecution presented a copy of the demand letter allegedly sent by registered mail and a registry return card. Yet, the Court noted the absence of authentication of the return card and any effort to identify the signature appearing on it. The registry receipt signature was described as illegible, and whether that signature was petitioner’s or that of an authorized agent remained unproven. The Court stressed its doctrinal holding in Rico v. People that receipts for registered letters and return receipts do not, by themselves, prove receipt unless properly authenticated to establish receipt of the notice of dishonor. It also relied on the principle from Cabrera v. People that it is not enough to prove that a notice of dishonor was sent; the prosecution must prove actual receipt because the statutory reckoning is from receipt.

The Court further cited the reasoning in Ting v. Court of Appeals that possibilities cannot substitute for proof beyond reasonable doubt. Applying those principles, it held that because the prosecution failed to establish receipt of the required written notice of dishonor and that petitioner had been afforded at least five banking days to settle, the presumption of knowledge of insufficiency of funds could not arise. Consequently, the prosecution failed to prove beyond reasonable doubt the element of knowledge required by B.P. Blg. 22.

The Court invoked the rule that it is the prosecution’s burden to prove beyond reasonable doubt each element of the offense, and that any doubt must be resolved in favor of the accused, citing King v. People and the related precedents invoked by petitioner, including the doctrinal rulings on notice.

Civil Liability Despite Acquittal

The Supreme C

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