Title
Nieva, Jr. vs. Court of Appeals
Case
G.R. No. 95796-97
Decision Date
May 2, 1997
Petitioner acquitted of Estafa but convicted under BP Blg. 22 for issuing a dishonored check in payment of a pre-existing obligation.
estafa
insufficient funds
efficient cause
A

Case Summary (G.R. No. 216569)

Nature of the Charges and Governing Statutes

The case involved two Informations: Criminal Case No. 3228 for estafa under Par. 2(d), Article 315 of the Revised Penal Code, and Criminal Case No. 3229 for violation of Batas Pambansa Blg. 22. The factual core common to both charges was the issuance and delivery by Nieva of Commercial Bank of Manila Check No. KAM 015417 in the amount of P70,000.00, payable to Atty. Joven as consideration for a Toyota dump truck, and the subsequent dishonor of the check because it was drawn against an “Account Closed.” The estafa theory turned on whether the check was issued in a manner that satisfied the law’s requirement of fraud executed prior to or simultaneously with the commission of the fraud. The B.P. Blg. 22 theory turned on the statutory elements of issuance of a check for value with knowledge of insufficient funds or credit, and the consequences of dishonor and failure to make arrangements for payment.

Factual Background: The Dump Truck Deal and the Worthless Check

The antecedents were undisputed. In 1982, Atty. Joven’s son, Alberto Joven, had the petitioner’s auto repair shop in Quezon City service his car, which led to familiarity with petitioner as owner of the shop. Alberto learned that petitioner, like the late Atty. Joven, was in construction. Alberto informed petitioner that idle construction equipment existed in Bacolor, Pampanga. Petitioner expressed interest and requested that Alberto introduce him to Atty. Joven. In 1985, during a meeting in Bacolor, petitioner offered to lease a Toyota dump truck identified as Motor No. 2D-58961 for construction in Quezon Province. Atty. Joven stated that he could not accept the lease unless the dump truck was first repaired. Petitioner agreed to repair the truck at his expense, with the repair expenses to be deducted from rentals. Possession and custody of the dump truck were then turned over to petitioner pursuant to an order signed by Atty. Joven while he was confined at the Lung Center.

Petitioner failed to repair the dump truck and failed to pay rentals. The dump truck remained idle in petitioner’s repair shop on Mayon Street in Quezon City. When Alberto learned of petitioner’s non-compliance, Atty. Joven secured a pass from the Lung Center, confronted petitioner, and demanded the return of the truck. Petitioner countered by offering to buy the truck, and Atty. Joven accepted the offer when petitioner agreed to the selling price of P70,000.00. On June 10, 1985, an absolute deed of sale was executed evidencing the sale. A week later, petitioner delivered to Atty. Joven a post-dated check drawn against the Commercial Bank of Manila in the amount of P70,000.00. The check was deposited with the Angeles City branch of the Bank of the Philippine Islands, but it was returned by the Commercial Bank of Manila due to “closed accounts.”

Despite repeated verbal demands and a formal written demand through counsel, petitioner failed to make good the returned check. As a result, criminal cases were filed for estafa and for violation of B.P. Blg. 22.

Filing and Arraignment; Conviction by the Trial Court

The prosecution charged petitioner in the Regional Trial Court of Pampanga, Branch 45. In Criminal Case No. 3228 for estafa, the Information alleged that petitioner issued and delivered the post-dated check with knowledge of insufficient funds and with intent to defraud, using deceit and grave abuse of confidence, and that the check was dishonored as “Account Closed.” It further alleged petitioner’s failure to redeem the check despite repeated demands. In Criminal Case No. 3229 for B.P. Blg. 22, the Information alleged that petitioner drew, issued, and delivered the same check despite knowledge that he had no sufficient funds in the bank, and that when presented for payment the check was dishonored for “Account Closed,” with petitioner’s subsequent failure to comply with demands to redeem.

At arraignment, petitioner pleaded “not guilty”. After trial, the trial court convicted petitioner for both offenses and imposed an indeterminate sentence for estafa in Criminal Case No. 3228, and a sentence and fine for Criminal Case No. 3229. It also ordered petitioner to indemnify the complainant’s heirs in the amount of P70,000.00.

Appeal to the Court of Appeals and Issues Raised in This Petition

Petitioner appealed to the Court of Appeals, which affirmed the convictions. He then brought the present petition before the Supreme Court, contending, among others, that (1) the elements of estafa were not present and not duly proved because the post-dated check was not issued as payment for an obligation contracted at the time the check was issued, there was no competent evidence of lack or insufficiency of funds, and there was no showing of damage; (2) his conviction rested on the sole and uncorroborated testimony of Alberto Joven, alleged to be biased and incredible and allegedly containing hearsay; and (3) the trial court lacked jurisdiction because no essential element of the offenses was committed in Pampanga.

The Supreme Court found the petition meritorious only as to the conviction for estafa, while sustaining the B.P. Blg. 22 conviction.

The Court’s Evaluation of the Estafa Conviction

The Supreme Court focused on the trial court’s and appellate court’s approach to the estafa charge. It noted that the trial court convicted petitioner for estafa on the premise that the post-dated check was issued as payment for the dump truck under the contract of sale and that the check, when deposited, was dishonored due to “Account Closed.” On appeal, the Supreme Court emphasized, neither the trial court nor the Court of Appeals made a categorical finding on the pivotal estafa question: whether the post-dated check was issued at the time the obligation to pay was contracted, or afterward.

The Supreme Court scrutinized the testimony of the sole prosecution witness, Alberto Joven, and found it insufficient to establish that the check was issued in a manner that preceded or coincided with the fraudulent inducement required under Par. 2(d), Article 315. Alberto’s testimony contained no clear categorical statement regarding the date when the check was agreed upon or delivered in relation to the execution of the deed of sale. On direct examination, Alberto said only that after a negotiation to buy the dump truck, “they both agreed and the accused gave him a postdated check,” without fixing the relevant date. On cross-examination, he admitted he could not remember dates and could not recall when the check was received or encashed, though he acknowledged the events occurred in 1985.

In contrast, petitioner testified positively that he issued and delivered the post-dated check one week after Atty. Joven gave him the deed of sale and after Atty. Joven executed it without asking for payment. The Court treated this as relevant to the timing issue.

The Supreme Court applied settled principles governing estafa under Par. 2(d), Article 315 involving postdated checks. It held that to constitute estafa, the act of postdating or issuing a check in payment of an obligation must be the efficient cause of defraudation, and it must be either prior to or simultaneous with the act of fraud. The check must operate as the inducement for the offended party’s surrender of money or property; it must not be issued merely in payment of a pre-existing obligation. The Court therefore examined the transaction chronology. It found that petitioner had possession of the dump truck as early as April 30, 1985. When the truck was not repaired and rentals were unpaid, Atty. Joven demanded its return. Petitioner then offered to buy the truck, and when Atty. Joven accepted the agreed consideration, they executed the absolute deed of sale on June 10, 1985. The Court observed that during that execution, Atty. Joven did not demand payment. Petitioner then issued and delivered the post-dated check a week later.

On that basis, the Supreme Court concluded that petitioner did not commit the fraud or deceit envisioned by law when he issued the post-dated check, because the issuance was made in payment of a pre-existing obligation. It reasoned that petitioner’s continued possession of the truck was not due to the postdated check but to the perfected contract of sale entered into a week before the issuance of the check. Accordingly, the Court reversed the estafa conviction and acquitted petitioner of Criminal Case No. 3228.

Sustaining the B.P. Blg. 22 Conviction

While the Court reversed the estafa conviction, it sustained petitioner’s conviction under B.P. Blg. 22. The Court observed that petitioner’s arguments on appeal had not addressed the B.P. Blg. 22 conviction except on jurisdiction; nevertheless, the Court independently evaluated the elements based on the established facts.

It stated that B.P. Blg. 22, Sec. 1 requires: (1) the making, drawing, and issuance of any check for value; (2) the issuer’s knowledge at the time of issuance that he lacks sufficient funds in or credit with the drawee bank to cover the check upon presentment; and (3) the subsequent dishonor of the check for insufficiency of funds or credit, or for the reason that would have produced dishonor for that ground had the issuer not ordered stop payment.

The Court then addressed knowledge. It emphasized that B.P. Blg. 22 requires proof of knowledge of insufficiency at the time the check was issued. Under B.P. Blg. 22, Sec. 2, the law provides prima facie evidence of such knowledge when the check is presented within ninety days from the date of the check and dishonored for insufficiency. It also noted the statutory exception: the prima facie evidence does not apply when the drawer pays the holder or makes arrangements for payment in full by the drawee within five banking days after receiving notice of non-payment.

Applying these rules, the Supreme Court held that petitioner issued the post-dated check dated July 31, 1985 for P70,000.00 as consi

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