PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee,- versus -VIRGINIA BABY P. MONTANER, Accused-Appellant.G.R. No. 184053Present:CORONA, C.J., Chairperson, LEONARDO-DE CASTRO,BERSAMIN,DEL CASTILLO, andVILLARAMA, JR., JJ.Promulgated:August 31, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xD E C I S I O NLEONARDO-DE CASTRO, J.: This is an appeal of the Decision[footnoteRef:2][1] dated February 12, 2008 of the Court of Appeals in CA-G.R. CR.-H.C. No. 01162, entitled People of the Philippines v. Virginia Baby P. Montaner, which affirmed the Decision[footnoteRef:3][2] dated April 8, 2003 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 93, in Criminal Case No. 0748-SPL. The RTC found appellant Virginia Baby P. Montaner guilty beyond reasonable doubt of the crime of estafa as defined and penalized under paragraph 2(d), Article 315 of the Revised Penal Code. [2: [1] Rollo, pp. 4-10; penned by Associate Justice Myrna Dimaranan Vidal with Associate Justices Jose L. Sabio, Jr. and Jose C. Reyes, Jr., concurring.] [3: [2] CA rollo, pp. 19-22. ]

In an Information[footnoteRef:4][3] dated April 21, 1998, appellant was charged as follows: [4: [3] Records, pp. 1-2. ]

That on or about May 17, 1996 in the Municipality of San Pedro, Province of Laguna and within the jurisdiction of this Honorable Court accused Virginia (Baby) P. Montaner did then and there willfully, unlawfully and feloniously defraud one Reynaldo Solis in the following manner: said accused by means of false pretenses and fraudulent acts that her checks are fully funded draw, make and issue in favor of one Reynaldo Solis the following Prudential Bank Checks Nos.:1. 0002284P5,000.002. 0002285P5,000.003. 0002286P5,000.004. 0002287P5,000.005. 0002288P5,000.006. 0002289P5,000.007. 0002290P5,000.008. 0002291P5,000.009. 0002292P5,000.0010. 0002293P5,000.00all having a total value of FIFTY THOUSAND PESOS (P50,000.00) and all aforesaid checks are postdated June 17, 1996 in exchange for cash knowing fully well that she has no funds in the drawee bank and when the said checks were presented for payment the same were dishonored by the drawee bank on reason of ACCOUNT CLOSED and despite demand accused failed and refused to pay the value thereof to the damage and prejudice of Reynaldo Solis in the aforementioned total amount of P50,000.00.Appellant pleaded not guilty to the charge leveled against her during her arraignment on June 10, 1998.[footnoteRef:5][4] Thereafter, trial ensued. [5: [4] Id. at 37.]

The parties evidence was summarized by the trial court, as follows:The evidence for the prosecution disclose that on May 17, 1996, accused Virginia Baby P. Montaner, in exchange for cash, issued to private complainant Reynaldo Solis in his house at Caliraya Street, Holiday Homes, San Pedro, Laguna, ten (10) Prudential Bank checks, specifically, check nos. 0002284, 0002285, 0002286, 0002287, 0002288, 0002289, 0002290, 0002291, 0002292, and 0002293 all postdated June 17, 1996, each in the amount of P5,000.00 all in the total amount of P50,000.00. Accused represented to complainant Solis that the checks were fully funded. When private complainant deposited the checks for encashment however, they were dishonored for the reason account closed. Private complainant verbally and thereafter, thru demand letter (Exhibit A) formally demanded that accused settle her accounts. Despite receipt of the demand letter, accused Montaner failed to pay the value of the ten (10) checks, thus private complainant Reynaldo Solis filed the instant complaint for estafa. In connection with this complaint, private complainant Solis executed a sworn statement (Exhibit D).Ruel Allan Pajarito, Branch Cashier O-I-C of Prudential Bank testified that they placed the mark account closed on the ten (10) checks issued in the account of accused Montaner considering that at the time the same were presented to them, the account of accused Montaner was already closed. Witness Pajarito further testified that as per their records, the account of accused Montaner, account no. 00099-000050-4 was closed on July 11, 1996. The checks were returned on October 4, 1996 for the reason account closed.Accused, thru counsel initially manifested that she is intending to file a demurrer to evidence. However, her right to file the same was considered waived in view of her failure to file the demurrer despite due notice.To exculpate herself from criminal liability, accused Virginia Baby P. Montaner denied the allegations that she issued ten (10) checks in private complainants favor claiming that the ten (10) checks were borrowed from her by one Marlyn Galope because the latter needed money. She gave the ten checks to Galope, signed the same albeit the space for the date, amount and payee were left blank so that the checks cannot be used for any negotiation. She further told Galope that the checks were not funded. When she learned that a case was filed against her for estafa, she confronted Marlyn Galope and the latter told her that money will not be given to her if she will not issue the said checks. She has no knowledge of the notice of dishonor sent to her by private complainant and claimed that her husband, who supposedly received the notice of dishonor left for abroad in July 1996 and returned only after a year, that is, in 1997.[footnoteRef:6][5] [6: [5] CA rollo, pp. 20-21.]

In a Decision dated April 8, 2003, the trial court convicted appellant for the crime of estafa as defined and penalized under paragraph 2(d), Article 315 of the Revised Penal Code. The dispositive portion of said Decision reads:WHEREFORE, this Court hereby sentences accused Virginia Baby P. Montaner to suffer an indeterminate penalty of imprisonment from twelve (12) years of prision mayor as minimum to twenty-two (22) years of reclusion perpetua as maximum and to indemnify complainant Reynaldo Solis in the amount of P50,000.00.[footnoteRef:7][6] [7: [6] Id. at 22.]

Appellant elevated the case to the Court of Appeals but the adverse ruling was merely affirmed by the appellate court in its Decision dated February 12, 2008, the dispositive portion of which states:WHEREFORE, premises considered, the instant petition is DENIED. Accordingly, the challenged Decision is hereby AFFIRMED in toto.[footnoteRef:8][7] [8: [7] Rollo, p. 10.]

Hence, appellant interposed this appeal before this Court and adopted her Appellants Brief with the Court of Appeals, wherein she put forth a single assignment of error:THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSEDAPPELLANT GUILTY BEYOND REASONABLE DOUBT OF THE CRIME OF ESTAFA UNDER ARTICLE 315, PAR. 2 (D) OF THE REVISED PENAL CODE.[footnoteRef:9][8] [9: [8] CA rollo, p. 87.]

Appellant maintains that she entrusted the subject checks, purportedly signed in blank, to Marilyn Galope (Galope) out of pity in order for the latter to secure a loan. Thus, there is purportedly no certainty beyond reasonable doubt that she issued the checks purposely to defraud Reynaldo Solis (Solis) into lending her money. She further claims that no transaction had ever transpired between her and Solis. Admitting that she may have been imprudent, she nonetheless insists that her simple imprudence does not translate to criminal liability.We are not persuaded. Paragraph 2(d), Article 315 of the Revised Penal Code provides:ART. 315. Swindling (estafa). Any person who shall defraud another by any of the means mentioned hereinbelow x x x:x x x x2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:x x x x(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.The elements of estafa under paragraph 2(d), Article 315 of the Revised Penal Code are: (1) the postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; (2) lack of sufficiency of funds to cover the check; and (3) damage to the payee.[footnoteRef:10][9] [10: [9] Cajigas v. People, G.R. No. 156541, February 23, 2009, 580 SCRA 54, 63.]

In the case at bar, the prosecution sufficiently established appellants guilt beyond reasonable doubt for estafa under paragraph 2(d), Article 315 of the Revised Penal Code. According to Soliss clear and categorical testimony, appellant issued to him the 10 postdated Prudential Bank checks, each in the amount of P5,000.00 or a total of P50,000.00, in his house in exchange for their cash equivalent. We quote the pertinent portions of the transcript:[On Direct Examination]Q: Mr. Witness, why did you file this complaint against the accused?A: She issued me checks in exchange for cash, ten postdated checks, maam.Q: When did Mrs. Montaner issue to you these checks?A: In May 1996, maam.Q: What was the purpose of issuing to you these checks?A: Because she needed cash, maam.Q: And how many checks did she issue to you?A: Ten checks, maam.Q: And what is the date of the checks that were issued to you?A: June 17, 1996, maam.Q: What is the total value of these ten checks?A: Fifty Thousand Pesos.Q:At the time these checks were issued to you, what if any, was her representation about them?A:To deposit those checks on their due date, maam.Q:And aside from telling you to deposit those checks on their due date, what else did she represent to you regarding these checks?A:None, maam.Q:Did you deposit these checks?A:Yes, maam.Q:Where?A:At the Premier Bank, San Pedro, Laguna.Q:What happened to these checks after depositing the same?A:The checks bounced, maam.Q:All these checks?A:Yes, maam, all checks bounced for reason account closed.Q:After these checks were dishonored what did you do?A:I informed her about that.Q:Thru what, verbal or written?A:Initially it was verbal, then I informed her thru a demand letter, maam.x x x x Fiscal (continuing):Q:You said that the accused issued to you ten checks in exchange for cash, where are those checks?A. The original checks are with me here, maam.Q.Handed to this representation are checks, Prudential Bank checks Nos. 002284, 002285, 002286, 002287, 002288, 002289, 002290, 002291, 002292, 002293 all dated June 17, 1996 and all in the amount of P50,000 [should be P5,000.00] each. Mr. Witness, there appears from these checks a signature at the bottom portion whose signature is this?A.The signature of Mrs. Montaner, maam.Q.Why do you say it is her signature?A.She signed those in my presence, maam.Q.I am showing these checks to the opposing counsel for comparisonAtty. PealaThe checks are admitted, your Honor.x x x x[On Cross-Examination]Atty. Peala (continuing):Q: When Mrs. Montaner issued those checks, ten checks were they issued in your house or in her house?A: In my house, sir.Q: Mrs. Montaner brought the checks in your house?A: Yes, sir.Q: Can you tell us the time of the day when she brought the checks to you?A: May 17, 1996 at 1:00 oclock in the afternoon, sir.Q: Was she alone or including her husband?A: She was alone, sir.[footnoteRef:11][10] [11: [10] TSN, November 25, 1998, pp. 4-8.]

From the circumstances narrated above, it was evident that Solis would not have given P50,000.00 cash to appellant had it not been for her issuance of the 10 Prudential Bank checks. These postdated checks were undoubtedly issued by appellant to induce Solis to part with his cash. However, when Solis attempted to encash them, they were all dishonored by the bank because the account was already closed. Solis wrote appellant a demand letter dated October 13, 1996[footnoteRef:12][11] which was received by appellants husband to inform appellant that her postdated checks had bounced and that she must settle her obligation or else face legal action from Solis. Appellant did not comply with the demand nor did she deposit the amount necessary to cover the checks within three days from receipt of notice. This gave rise to a prima facie evidence of deceit, which is an element of the crime of estafa, constituting false pretense or fraudulent act as stated in the second sentence of paragraph 2(d), Article 315 of the Revised Penal Code. [12: [11] Records, p. 15.]

As for appellants claims that she merely entrusted to Galope the blank but signed checks imprudently, without knowing that Galope would give them as a guarantee for a loan, the Court views such statements with the same incredulity as the lower courts.Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be credible in itself such as the common experience and observation of mankind can approve as probable under the circumstances. The Court has no test of the truth of human testimony, except its conformity to our knowledge, observation and experience. Whatever is repugnant to these belongs to the miraculous and is outside judicial cognizance.[footnoteRef:13][12] [13: [12] People v. Garin, 476 Phil. 455, 474 (2004); People v. Samus, 437 Phil. 645, 659 (2002).]

Appellant wishes to impress upon the Court that she voluntarily parted with her blank but signed checks not knowing or even having any hint of suspicion that the same may be used to defraud anyone who may rely on them. Verily, appellants assertion defies ordinary common sense and human experience.Moreover, it is elementary that denial, if unsubstantiated by clear and convincing evidence, is negative and self-serving evidence which has far less evidentiary value than the testimony of credible witnesses who testify on affirmative matters.[footnoteRef:14][13] We agree with the lower courts that appellants bare denial cannot be accorded credence for lack of evidentiary support. As aptly noted by the trial court, appellants failure to produce Galope as a witness to corroborate her story is fatal to her cause.[footnoteRef:15][14] In all, the Court of Appeals committed no error in upholding the conviction of appellant for estafa. [14: [13] Gomba v. People, G.R. No. 150536, September 17, 2008, 565 SCRA 396, 400, citing People v. Magbanua, G.R. No. 133004, May 20, 2004, 428 SCRA 617, 630.] [15: [14] Records, p. 212.]

WHEREFORE, premises considered, the Decision dated February 12, 2008 of the Court of Appeals in CA-G.R. CR.-H.C. No. 01162 is hereby AFFIRMED.SO ORDERED. TERESITA J. LEONARDO-DE CASTRO Associate JusticeWE CONCUR:RENATO C. CORONAChief Justice ChairpersonLUCAS P. BERSAMINAssociate JusticeMARIANO C. DEL CASTILLOAssociate Justice

MARTIN S. VILLARAMA, JR.Associate Justice

CERTIFICATIONPursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.RENATO C. CORONA Chief Justice

SECOND DIVISIONJOHN DY,Petitioner,- versus -PEOPLE OF THE PHILIPPINES and The HONORABLE COURT OF APPEALS, Respondents.G.R. No. 158312Present:Quisumbing, Acting C.J., Chairperson,Carpio Morales, Tinga, VELASCO, JR., and BRION, JJ.Promulgated:November 14, 2008

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xDECISIONQUISUMBING, Acting C.J.:This appeal prays for the reversal of the Decision[footnoteRef:16][1] dated January 23, 2003 and the Resolution[footnoteRef:17][2] dated May 14, 2003 of the Court of Appeals in CA-G.R. CR No. 23802. The appellate court affirmed with modification the Decision[footnoteRef:18][3] dated November 17, 1999 of the Regional Trial Court (RTC), Branch 82 of Quezon City, which had convicted petitioner John Dy of two counts of estafa in Criminal Cases Nos. Q-93-46711 and Q-93-46713, and two counts of violation of Batas Pambansa Bilang 22[footnoteRef:19][4] (B.P. Blg. 22) in Criminal Cases Nos. Q-93-46712 and Q-93-46714. [16: [1] Rollo, pp. 31-50. Penned by Associate Justice Eliezer R. De Los Santos, with Associate Justices Oswaldo D. Agcaoili and Regalado E. Maambong concurring.] [17: [2] Id. at 51.] [18: [3] Records, pp. 438-457. Penned by Presiding Judge Salvador C. Ceguera.] [19: [4] An Act Penalizing the Making or Drawing and Issuance of a Check Without Sufficient Funds or Credit and for Other Purposes, approved April 3, 1979.]

The facts are undisputed: Since 1990, John Dy has been the distributor of W.L. Food Products (W.L. Foods) in Naga City, Bicol, under the business name Dyna Marketing. Dy would pay W.L. Foods in either cash or check upon pick up of stocks of snack foods at the latters branch or main office in Quezon City. At times, he would entrust the payment to one of his drivers. On June 24, 1992, Dys driver went to the branch office of W.L. Foods to pick up stocks of snack foods. He introduced himself to the checker, Mary Jane D. Maraca, who upon confirming Dys credit with the main office, gave him merchandise worth P106,579.60. In return, the driver handed her a blank Far East Bank and Trust Company (FEBTC) Check with Check No. 553602 postdated July 22, 1992. The check was signed by Dy though it did not indicate a specific amount.Yet again, on July 1, 1992, the same driver obtained snack foods from Maraca in the amount of P226,794.36 in exchange for a blank FEBTC Check with Check No. 553615 postdated July 31, 1992.In both instances, the driver was issued an unsigned delivery receipt. The amounts for the purchases were filled in later by Evelyn Ong, accountant of W.L. Foods, based on the value of the goods delivered.When presented for payment, FEBTC dishonored the checks for insufficiency of funds. Raul D. Gonzales, manager of FEBTC-Naga Branch, notified Atty. Rita Linda Jimeno, counsel of W.L. Foods, of the dishonor. Apparently, Dy only had an available balance of P2,000 as of July 22, 1992 and July 31, 1992.Later, Gonzales sent Atty. Jimeno another letter[footnoteRef:20][5] advising her that FEBTC Check No. 553602 for P106,579.60 was returned to the drawee bank for the reasons stop payment order and drawn against uncollected deposit (DAUD), and not because it was drawn against insufficient funds as stated in the first letter. Dys savings deposit account ledger reflected a balance of P160,659.39 as of July 22, 1992. This, however, included a regional clearing check for P55,000 which he deposited on July 20, 1992, and which took five (5) banking days to clear. Hence, the inward check was drawn against the yet uncollected deposit. [20: [5] Records, p. 270.]

When William Lim, owner of W.L. Foods, phoned Dy about the matter, the latter explained that he could not pay since he had no funds yet. This prompted the former to send petitioner a demand letter, which the latter ignored.On July 16, 1993, Lim charged Dy with two counts of estafa under Article 315, paragraph 2(d)[footnoteRef:21][6] of the Revised Penal Code in two Informations, which except for the dates and amounts involved, similarly read as follows: [21: [6] ART. 315. Swindling (estafa). Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:x x x x2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:x x x x(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act. (As amended by Rep. Act No. 4885, approved June 17, 1967.)x x x x]

That on or about the 24th day of June, 1992, in Quezon City, Philippines, the said accused, did then and there [willfully] and feloniously defraud W.L. PRODUCTS, a corporation duly organized and existing under the laws of the Republic of the Philippines with business address at No. 531 Gen. Luis St., Novaliches, this City, in the following manner, to wit: the said accused, by means of false manifestations and fraudulent representation which he made to complainant to the effect that Far East Bank and Trust Co. check No. 553602 dated July 22, 1992 in the amount of P106,579.60, payable to W.L. Products is a good check and will be honored by the bank on its maturity date, and by means of other deceit of similar import, induced and succeeded in inducing the said complainant to receive and accept the aforesaid check in payment of snack foods, the said accused knowing fully well that all his manifestations and representations were false and untrue and were made solely for the purpose of obtaining, as in fact he did obtain the aforesaid snack foods valued at P106,579.60 from said complainant as upon presentation of said check to the bank for payment, the same was dishonored and payment thereof refused for the reason stop payment and the said accused, once in possession of the aforesaid snack foods, with intent to defraud, [willfully], unlawfully and feloniously misapplied, misappropriated and converted the same or the value thereof to his own personal use and benefit, to the damage and prejudice of said W.L. Products, herein represented by RODOLFO BORJAL, in the aforementioned amount of P106,579.60, Philippine Currency.Contrary to law.[footnoteRef:22][7] [22: [7] Records, pp. 2, 14-15.]

On even date, Lim also charged Dy with two counts of violation of B.P. Blg. 22 in two Informations which likewise save for the dates and amounts involved similarly read as follows:That on or about the 24th day of June, 1992, the said accused, did then and there [willfully], unlawfully and feloniously make or draw and issue to W.L. FOOD PRODUCTS to apply on account or for value a Far East Bank and Trust Co. Check no. 553602 dated July 22, 1992 payable to W.L. FOOD PRODUCTS in the amount of P106,579.60 Philippine Currency, said accused knowing fully well that at the time of issue he/she/they did not have sufficient funds in or credit with the drawee bank for payment of such check in full upon its presentment, which check when presented 90 days from the date thereof was subsequently dishonored by the drawee bank for the reason Payment stopped but the same would have been dishonored for insufficient funds had not the accused without any valid reason, ordered the bank to stop payment, the said accused despite receipt of notice of such dishonor, failed to pay said W.L. Food Products the amount of said check or to make arrangement for payment in full of the same within five (5) banking days after receiving said notice.CONTRARY TO LAW.[footnoteRef:23][8] [23: [8] Id. at 8, 20-21.]

On November 23, 1994, Dy was arrested in Naga City. On arraignment, he pleaded not guilty to all charges. Thereafter, the cases against him were tried jointly.On November 17, 1999 the RTC convicted Dy on two counts each of estafa and violation of B.P. Blg. 22. The trial court disposed of the case as follows:WHEREFORE, accused JOHN JERRY DY ALDEN (JOHN DY) is hereby found GUILTY beyond reasonable doubt of swindling (ESTAFA) as charged in the Informations in Criminal Case No. 93-46711 and in Criminal Case No. Q-93-46713, respectively. Accordingly, after applying the provisions of the Indeterminate Sentence Law and P.D. No. 818, said accused is hereby sentenced to suffer the indeterminate penalty of ten (10) years and one (1) day to twelve (12) years of prision mayor, as minimum, to twenty (20) years of reclusion temporal, as maximum, in Criminal Case No. Q-93-46711 and of ten (10) years and one (1) day to twelve (12) years of prision mayor, as minimum, to thirty (30) years of reclusion perpetua, as maximum, in Criminal Case No. Q-93-46713.Likewise, said accused is hereby found GUILTY beyond reasonable doubt of Violation of B.P. 22 as charged in the Informations in Criminal Case No. Q-93-46712 and in Criminal Case No. Q-93-46714 and is accordingly sentenced to imprisonment of one (1) year for each of the said offense and to pay a fine in the total amount of P333,373.96, with subsidiary imprisonment in case of insolvency.FINALLY, judgment is hereby rendered in favor of private complainant, W. L. Food Products, herein represented by Rodolfo Borjal, and against herein accused JOHN JERRY DY ALDEN (JOHN DY), ordering the latter to pay to the former the total sum of P333,373.96 plus interest thereon at the rate of 12% per annum from September 28, 1992 until fully paid; and, (2) the costs of this suit.SO ORDERED.[footnoteRef:24][9] [24: [9] Id. at 457.]

Dy brought the case to the Court of Appeals. In the assailed Decision of January 23, 2003, the appellate court affirmed the RTC. It, however, modified the sentence and deleted the payment of interests in this wise:WHEREFORE, in view of the foregoing, the decision appealed from is hereby AFFIRMED with MODIFICATION. In Criminal Case No. Q-93-46711 (for estafa), the accused-appellant JOHN JERRY DY ALDEN (JOHN DY) is hereby sentenced to suffer an indeterminate penalty of imprisonment ranging from six (6) years and one (1) day of prision mayor as minimum to twenty (20) years of reclusion temporal as maximum plus eight (8) years in excess of [P]22,000.00. In Criminal Case No. Q-93-46712 (for violation of BP 22), accused-appellant is sentenced to suffer an imprisonment of one (1) year and to indemnify W.L. Food Products, represented by Rodolfo Borjal, the amount of ONE HUNDRED SIX THOUSAND FIVE HUNDRED SEVENTY NINE PESOS and 60/100 ([P]106,579.60). In Criminal Case No. Q-93-46713 (for estafa), accused-appellant is hereby sentenced to suffer an indeterminate penalty of imprisonment ranging from eight (8) years and one (1) day of prision mayor as minimum to thirty (30) years as maximum. Finally, in Criminal Case No. Q-93-46714 (for violation of BP 22), accused-appellant is sentenced to suffer an imprisonment of one (1) year and to indemnify W.L. Food Products, represented by Rodolfo Borjal, the amount of TWO HUNDRED TWENTY SIX THOUSAND SEVEN HUNDRED NINETY FOUR PESOS AND 36/100 ([P]226,794.36).SO ORDERED.[footnoteRef:25][10] [25: [10] Rollo, p. 49.]

Dy moved for reconsideration, but his motion was denied in the Resolution dated May 14, 2003.Hence, this petition which raises the following issues:I.WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE PROSECUTION HAS PROVEN THE GUILT OF ACCUSED BEYOND REASONABLE DOUBT OF ESTAFA ON TWO (2) COUNTS?II.WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE PROSECUTION HAS PROVEN THE GUILT OF ACCUSED BEYOND REASONABLE DOUBT OF VIOLATION OF BP 22 ON TWO (2) COUNTS?III.WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AWARDING DAMAGES TO PRIVATE COMPLAINANT, W.L. FOOD PRODUCTS, THE TOTAL SUM OF [P]333,373.96?[footnoteRef:26][11] [26: [11] Id. at 15.]

Essentially, the issue is whether John Dy is liable for estafa and for violation of B.P. Blg. 22.First, is petitioner guilty of estafa?Mainly, petitioner contends that the checks were ineffectively issued. He stresses that not only were the checks blank, but also that W.L. Foods accountant had no authority to fill the amounts. Dy also claims failure of consideration to negate any obligation to W.L. Foods. Ultimately, petitioner denies having deceived Lim inasmuch as only the two checks bounced since he began dealing with him. He maintains that it was his long established business relationship with Lim that enabled him to obtain the goods, and not the checks issued in payment for them. Petitioner renounces personal liability on the checks since he was absent when the goods were delivered. The Office of the Solicitor General (OSG), for the State, avers that the delivery of the checks by Dys driver to Maraca, constituted valid issuance. The OSG sustains Ongs prima facie authority to fill the checks based on the value of goods taken. It observes that nothing in the records showed that W.L. Foods accountant filled up the checks in violation of Dys instructions or their previous agreement. Finally, the OSG challenges the present petition as an inappropriate remedy to review the factual findings of the trial court.We find that the petition is partly meritorious.Before an accused can be held liable for estafa under Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Republic Act No. 4885,[footnoteRef:27][12] the following elements must concur: (1) postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; (2) insufficiency of funds to cover the check; and (3) damage to the payee thereof.[footnoteRef:28][13] These elements are present in the instant case. [27: [12] An Act to Amend Section Two, Paragraph (d), Article Three Hundred Fifteen of Act Numbered Thirty-Eight Hundred and Fifteen, as Amended, Otherwise Known as the Revised Penal Code, approved June 17, 1967.] [28: [13] People v. Romero, G.R. No. 112985, April 21, 1999, 306 SCRA 90, 96.]

Section 191 of the Negotiable Instruments Law[footnoteRef:29][14] defines issue as the first delivery of an instrument, complete in form, to a person who takes it as a holder. Significantly, delivery is the final act essential to the negotiability of an instrument. Delivery denotes physical transfer of the instrument by the maker or drawer coupled with an intention to convey title to the payee and recognize him as a holder.[footnoteRef:30][15] It means more than handing over to another; it imports such transfer of the instrument to another as to enable the latter to hold it for himself.[footnoteRef:31][16] [29: [14] Also known as ACT No. 2031. An Act Entitled The Negotiable Instruments Law, enacted February 3, 1911.] [30: [15] De la Victoria v. Burgos, G.R. No. 111190, June 27, 1995, 245 SCRA 374, 379.] [31: [16] Lewis County et al. v. State Bank of Peck, 170 Pacific Reporter 98, 100 (1918), citing Bigelow, Bills, Notes and Checks, 2nd Ed., p. 13.]

In this case, even if the checks were given to W.L. Foods in blank, this alone did not make its issuance invalid. When the checks were delivered to Lim, through his employee, he became a holder with prima facie authority to fill the blanks. This was, in fact, accomplished by Lims accountant.The pertinent provisions of Section 14 of the Negotiable Instruments Law are instructive:SEC. 14. Blanks; when may be filled.Where the instrument is wanting in any material particular, the person in possession thereof has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima facie authority to fill it up as such for any amount. . (Emphasis supplied.)Hence, the law merely requires that the instrument be in the possession of a person other than the drawer or maker. From such possession, together with the fact that the instrument is wanting in a material particular, the law presumes agency to fill up the blanks.[footnoteRef:32][17] Because of this, the burden of proving want of authority or that the authority granted was exceeded, is placed on the person questioning such authority.[footnoteRef:33][18] Petitioner failed to fulfill this requirement. [32: [17] I A.F. Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines, 168 (1987 ed.).] [33: [18] J.C. Campos, Jr. and M.C. Lopez-Campos, Notes and Selected Cases on Negotiable Instruments Law, 351 (3rd ed., 1971).]

Next, petitioner claims failure of consideration. Nevertheless, in a letter[footnoteRef:34][19] dated November 10, 1992, he expressed willingness to pay W.L. Foods, or to replace the dishonored checks. This was a clear acknowledgment of receipt of the goods, which gave rise to his duty to maintain or deposit sufficient funds to cover the amount of the checks. [34: [19] Records, p. 43.]

More significantly, we are not swayed by petitioners arguments that the single incident of dishonor and his absence when the checks were delivered belie fraud. Indeed damage and deceit are essential elements of the offense and must be established with satisfactory proof to warrant conviction.[footnoteRef:35][20] Deceit as an element of estafa is a specie of fraud. It is actual fraud which consists in any misrepresentation or contrivance where a person deludes another, to his hurt. There is deceit when one is misled -- by guile, trickery or by other means -- to believe as true what is really false.[footnoteRef:36][21] [35: [20] People v. Ojeda, G.R. Nos. 104238-58, June 3, 2004, 430 SCRA 436, 445; People v. Dimalanta, G.R. No. 157039, October 1, 2004, 440 SCRA 55, 61-62.] [36: [21] People v. Romero, supra note 13 at 97.]

Prima facie evidence of deceit was established against petitioner with regard to FEBTC Check No. 553615 which was dishonored for insufficiency of funds. The letter[footnoteRef:37][22] of petitioners counsel dated November 10, 1992 shows beyond reasonable doubt that petitioner received notice of the dishonor of the said check for insufficiency of funds. Petitioner, however, failed to deposit the amounts necessary to cover his check within three banking days from receipt of the notice of dishonor. Hence, as provided for by law,[footnoteRef:38][23] the presence of deceit was sufficiently proven. [37: [22] Records, p. 43.] [38: [23] ART. 315. Swindling (estafa). x x x x(d) x x x The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act. (As amended by Rep. Act No. 4885, approved June 17, 1967.) (Emphasis supplied.)]

Petitioner failed to overcome the said proof of deceit. The trial court found no pre-existing obligation between the parties. The existence of prior transactions between Lim and Dy alone did not rule out deceit because each transaction was separate, and had a different consideration from the others. Even as petitioner was absent when the goods were delivered, by the principle of agency, delivery of the checks by his driver was deemed as his act as the employer. The evidence shows that as a matter of course, Dy, or his employee, would pay W.L. Foods in either cash or check upon pick up of the stocks of snack foods at the latters branch or main office. Despite their two-year standing business relations prior to the issuance of the subject check, W.L Foods employees would not have parted with the stocks were it not for the simultaneous delivery of the check issued by petitioner.[footnoteRef:39][24] Aside from the existing business relations between petitioner and W.L. Foods, the primary inducement for the latter to part with its stocks of snack foods was the issuance of the check in payment of the value of the said stocks. [39: [24] TSN, July 19, 1995, pp. 507, 516.]

In a number of cases,[footnoteRef:40][25] the Court has considered good faith as a defense to a charge of estafa by postdating a check. This good faith may be manifested by making arrangements for payment with the creditor and exerting best efforts to make good the value of the checks. In the instant case petitioner presented no proof of good faith. Noticeably absent from the records is sufficient proof of sincere and best efforts on the part of petitioner for the payment of the value of the check that would constitute good faith and negate deceit. [40: [25] People v. Ojeda, G.R. Nos. 104238-58, June 3, 2004, 430 SCRA 436; People v. Dimalanta, G.R. No. 157039, October 1, 2004, 440 SCRA 55.]

With the foregoing circumstances established, we find petitioner guilty of estafa with regard to FEBTC Check No. 553615 for P226,794.36.The same, however, does not hold true with respect to FEBTC Check No. 553602 for P106,579.60. This check was dishonored for the reason that it was drawn against uncollected deposit. Petitioner had P160,659.39 in his savings deposit account ledger as of July 22, 1992. We disagree with the conclusion of the RTC that since the balance included a regional clearing check worth P55,000 deposited on July 20, 1992, which cleared only five (5) days later, then petitioner had inadequate funds in this instance. Since petitioner technically and retroactively had sufficient funds at the time Check No. 553602 was presented for payment then the second element (insufficiency of funds to cover the check) of the crime is absent. Also there is no prima facie evidence of deceit in this instance because the check was not dishonored for lack or insufficiency of funds. Uncollected deposits are not the same as insufficient funds. The prima facie presumption of deceit arises only when a check has been dishonored for lack or insufficiency of funds. Notably, the law speaks of insufficiency of funds but not of uncollected deposits. Jurisprudence teaches that criminal laws are strictly construed against the Government and liberally in favor of the accused.[footnoteRef:41][26] Hence, in the instant case, the law cannot be interpreted or applied in such a way as to expand its provision to encompass the situation of uncollected deposits because it would make the law more onerous on the part of the accused. [41: [26]See U.S. v. Abad Santos, 36 Phil 243 (1917); People v. Yu Hai, 99 Phil 725, 728 (1956).]

Clearly, the estafa punished under Article 315, paragraph 2(d) of the Revised Penal Code is committed when a check is dishonored for being drawn against insufficient funds or closed account, and not against uncollected deposit.[footnoteRef:42][27] Corollarily, the issuer of the check is not liable for estafa if the remaining balance and the uncollected deposit, which was duly collected, could satisfy the amount of the check when presented for payment. [42: [27] Cf. Salazar v. People, G.R. No. 151931, September 23, 2003, 411 SCRA 598.]

Second, did petitioner violate B.P. Blg. 22? Petitioner argues that the blank checks were not valid orders for the bank to pay the holder of such checks. He reiterates lack of knowledge of the insufficiency of funds and reasons that the checks could not have been issued to apply on account or for value as he did not obtain delivery of the goods.The OSG maintains that the guilt of petitioner has been proven beyond reasonable doubt. It cites pieces of evidence that point to Dys culpability: Maracas acknowledgment that the checks were issued to W.L. Foods as consideration for the snacks; Lims testimony proving that Dy received a copy of the demand letter; the bank managers confirmation that petitioner had insufficient balance to cover the checks; and Dys failure to settle his obligation within five (5) days from dishonor of the checks.Once again, we find the petition to be meritorious in part.The elements of the offense penalized under B.P. Blg. 22 are as follows: (1) the making, drawing and issuance of any check to apply to account or for value; (2) the knowledge of the maker, drawer or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment; and (3) subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.[footnoteRef:43][28] The case at bar satisfies all these elements. [43: [28] Navarro v. Court of Appeals, G.R. Nos. 112389-90, August 1, 1994, 234 SCRA 639, 643-644.]

During the joint pre-trial conference of this case, Dy admitted that he issued the checks, and that the signatures appearing on them were his.[footnoteRef:44][29] The facts reveal that the checks were issued in blank because of the uncertainty of the volume of products to be retrieved, the discount that can be availed of, and the deduction for bad orders. Nevertheless, we must stress that what the law punishes is simply the issuance of a bouncing check and not the purpose for which it was issued nor the terms and conditions relating thereto.[footnoteRef:45][30] If inquiry into the reason for which the checks are issued, or the terms and conditions of their issuance is required, the publics faith in the stability and commercial value of checks as currency substitutes will certainly erode.[footnoteRef:46][31] [44: [29] Records, p. 400.] [45: [30] Cruz v. Court of Appeals, G.R. No. 108738, June 17, 1994, 233 SCRA 301, 307.] [46: [31] People v. Nitafan, G.R. No. 75954, October 22, 1992, 215 SCRA 79, 85.]

Moreover, the gravamen of the offense under B.P. Blg. 22 is the act of making or issuing a worthless check or a check that is dishonored upon presentment for payment. The act effectively declares the offense to be one of malum prohibitum. The only valid query, then, is whether the law has been breached, i.e., by the mere act of issuing a bad check, without so much regard as to the criminal intent of the issuer.[footnoteRef:47][32] Indeed, non-fulfillment of the obligation is immaterial. Thus, petitioners defense of failure of consideration must likewise fall. This is especially so since as stated above, Dy has acknowledged receipt of the goods. [47: [32] Cueme v. People, G. R. No. 133325, June 30, 2000, 334 SCRA 795, 805.]

On the second element, petitioner disputes notice of insufficiency of funds on the basis of the check being issued in blank. He relies on Dingle v. Intermediate Appellate Court[footnoteRef:48][33] and Lao v. Court of Appeals[footnoteRef:49][34] as his authorities. In both actions, however, the accused were co-signatories, who were neither apprised of the particular transactions on which the blank checks were issued, nor given notice of their dishonor. In the latter case, Lao signed the checks without knowledge of the insufficiency of funds, knowledge she was not expected or obliged to possess under the organizational structure of the corporation.[footnoteRef:50][35] Lao was only a minor employee who had nothing to do with the issuance, funding and delivery of checks.[footnoteRef:51][36] In contrast, petitioner was the proprietor of Dyna Marketing and the sole signatory of the checks who received notice of their dishonor. [48: [33] No. L-75243, March 16, 1987, 148 SCRA 595.] [49: [34] G. R. No. 119178, June 20, 1997, 274 SCRA 572.] [50: [35] Id. at 590.] [51: [36] Id. at 596.]

Significantly, under Section 2[footnoteRef:52][37] of B.P. Blg. 22, petitioner was prima facie presumed to know of the inadequacy of his funds with the bank when he did not pay the value of the goods or make arrangements for their payment in full within five (5) banking days upon notice. His letter dated November 10, 1992 to Lim fortified such presumption. [52: [37] SEC. 2. Evidence of knowledge of insufficient funds. The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.]

Undoubtedly, Dy violated B.P. Blg. 22 for issuing FEBTC Check No. 553615. When said check was dishonored for insufficient funds and stop payment order, petitioner did not pay or make arrangements with the bank for its payment in full within five (5) banking days. Petitioner should be exonerated, however, for issuing FEBTC Check No. 553602, which was dishonored for the reason DAUD or drawn against uncollected deposit. When the check was presented for payment, it was dishonored by the bank because the check deposit made by petitioner, which would make petitioners bank account balance more than enough to cover the face value of the subject check, had not been collected by the bank.In Tan v. People,[footnoteRef:53][38] this Court acquitted the petitioner therein who was indicted under B.P. Blg. 22, upon a check which was dishonored for the reason DAUD, among others. We observed that: [53: [38] G. R. No. 141466, January 19, 2001, 349 SCRA 777.]

In the second place, even without relying on the credit line, petitioners bank account covered the check she issued because even though there were some deposits that were still uncollected the deposits became good and the bank certified that the check was funded.[footnoteRef:54][39] [54: [39] Id. at 781.]

To be liable under Section 1[footnoteRef:55][40] of B.P. Blg. 22, the check must be dishonored by the drawee bank for insufficiency of funds or credit or dishonored for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment. [55: [40] SECTION 1. Checks without sufficient funds. Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less that thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the court.x x x x]

In the instant case, even though the check which petitioner deposited on July 20, 1992 became good only five (5) days later, he was considered by the bank to retroactively have had P160,659.39 in his account on July 22, 1992. This was more than enough to cover the check he issued to respondent in the amount of P106,579.60. Under the circumstance obtaining in this case, we find the petitioner had issued the check, with full ability to abide by his commitment[footnoteRef:56][41] to pay his purchases. [56: [41] Cf. Idos v. Court of Appeals, G.R. No. 110782, September 25, 1998, 296 SCRA 194, 212.]

Significantly, like Article 315 of the Revised Penal Code, B.P. Blg. 22 also speaks only of insufficiency of funds and does not treat of uncollected deposits. To repeat, we cannot interpret the law in such a way as to expand its provision to encompass the situation of uncollected deposits because it would make the law more onerous on the part of the accused. Again, criminal statutes are strictly construed against the Government and liberally in favor of the accused.[footnoteRef:57][42] [57: [42] See U.S. v. Abad Santos, supra note 26; People v. Yu Hai, supra note 26.]

As regards petitioners civil liability, this Court has previously ruled that an accused may be held civilly liable where the facts established by the evidence so warrant.[footnoteRef:58][43] The rationale for this is simple. The criminal and civil liabilities of an accused are separate and distinct from each other. One is meant to punish the offender while the other is intended to repair the damage suffered by the aggrieved party. So, for the purpose of indemnifying the latter, the offense need not be proved beyond reasonable doubt but only by preponderance of evidence.[footnoteRef:59][44] [58: [43] Eusebio-Calderon v. People, G.R. No. 158495, October 21, 2004, 441 SCRA 137, 147.] [59: [44] Sapiera v. Court of Appeals, G.R. No. 128927, September 14, 1999, 314 SCRA 370, 379.]

We therefore sustain the appellate courts award of damages to W.L. Foods in the total amount of P333,373.96, representing the sum of the checks petitioner issued for goods admittedly delivered to his company.As to the appropriate penalty, petitioner was charged with estafa under Article 315, paragraph 2(d) of the Revised Penal Code, as amended by Presidential Decree No. 818[footnoteRef:60][45] (P.D. No. 818). [60: [45] Amending Article 315 of the Revised Penal Code by Increasing the Penalties for Estafa Committed by Means of Bouncing Checks, done October 22, 1975.]

Under Section 1[footnoteRef:61][46] of P.D. No. 818, if the amount of the fraud exceeds P22,000, the penalty of reclusin temporal is imposed in its maximum period, adding one year for each additional P10,000 but the total penalty shall not exceed thirty (30) years, which shall be termed reclusin perpetua.[footnoteRef:62][47] Reclusin perpetua is not the prescribed penalty for the offense, but merely describes the penalty actually imposed on account of the amount of the fraud involved. [61: [46] SECTION 1. Any person who shall defraud another by means of false pretenses or fraudulent acts as defined in paragraph 2(d) of Article 315 of the Revised Penal Code, as amended by Republic Act. No. 4885, shall be punished by: 1st. The penalty of reclusion temporal if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos but the total penalty which may be imposed shall [in] no case exceed thirty years. In such cases, and in connection with the accessory penalties which may be imposed under the Revised Penal Code, the penalty shall be termed reclusion perpetua;x x x x] [62: [47] People v. Hernando, G.R. No. 125214, October 28, 1999, 317 SCRA 617, 629.]

WHEREFORE, the petition is PARTLY GRANTED. John Dy is hereby ACQUITTED in Criminal Case No. Q-93-46711 for estafa, and Criminal Case No. Q-93-46712 for violation of B.P. Blg. 22, but he is ORDERED to pay W.L. Foods the amount of P106,579.60 for goods delivered to his company.In Criminal Case No. Q-93-46713 for estafa, the Decision of the Court of Appeals is AFFIRMED with MODIFICATION. Petitioner is sentenced to suffer an indeterminate penalty of twelve (12) years of prisin mayor, as minimum, to thirty (30) years of reclusin perpetua, as maximum.In Criminal Case No. Q-93-46714 for violation of B.P. Blg. 22, the Decision of the Court of Appeals is AFFIRMED, and John Dy is hereby sentenced to one (1) year imprisonment and ordered to indemnify W.L. Foods in the amount of P226,794.36.SO ORDERED.LEONARDO A. QUISUMBINGActing Chief Justice

WE CONCUR:CONCHITA CARPIO MORALESAssociate Justice

DANTE O. TINGAAssociate JusticePRESBITERO J. VELASCO, JR.Associate Justice

ARTURO D. BRIONAssociate Justice

C E R T I F I C A T I O NPursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.LEONARDO A. QUISUMBING Acting Chief Justice

Estafa and Blg. 22; Complaint w/ laws and jurisprudence.

I wish to share a criminal complaint for Estafa and BP 22 that I prepared recently, with focus on the legal research aspect thereof, for the information of my regular readers, to wit:

REPUBLIC OF THE PHILIPPINESOFFICE OF THE CITY PROSECUTORX x x CITY

X x x, Complainant, I.S. No. _______

- versus - For: ESTAFA and B.P. Blg. 22.

X x x(Alias: x x x), Respondent.x---------------------------------x

COMPLAINT-AFFIDAVIT

THE UNDERSIGNED COMPLAINANT respectfully alleges:

1. COMPLAINANT. The complainant is x x x, of legal age, married, Filipino and, for purposes of this criminal complaint, with postal address at:

X x x

2. RESPPONDENT. The respondent is x x x, aka, of legal age, married, xxx national, and with the following three (3) addresses, where summons and notices may be served, to wit:

X x x.

3. NATURE OF THE CRIMINAL COMPLAINT. - This is a criminal complaint for ESTAFA and for violation of B.P. Blg. 22 involving the sum of Five Million Pesos (P5,000,000.00) arising from various checks issued by the respondent to the complainant.

4. ULTIMATE FACTS.

X x x.

4.11. For the record, and to form part hereof, by incorporation and reference, attached hereto are copies of the following supporting documents, to wit:

X x x.

5. DISCUSSION.

APPLICABLE LAWS5.1. Article 315 of the Revised Penal Code on deceit/swindling (estfa) provides any person who shall defraud another by any of the means mentioned therein shall be punished by the penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years; provided that the fraud be committed by any of the following means: 1. With unfaithfulness or abuse of confidence, namely: X x x.(b) By misappropriating or converting, to the prejudice of another, money, goods, or any other personal property received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property. 2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud: (a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits. X x x.(a) By pretending to have bribed any Government employee, without prejudice to the action for calumny which the offended party may deem proper to bring against the offender. In this case, the offender shall be punished by the maximum period of the penalty. (b) By post-dating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack of insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act. (As amended by Republic Act No. 4885, approved June 17, 1967.)5.2. Article 316 (other forms of swindling) of the Revised Penal Code provides that the penalty of arresto mayor in its minimum and medium periods and a fine of not less than the value of the damage caused and not more than three times such value, shall be imposed upon any person who, to the prejudice of another, shall execute any fictitious contract.

5.3. Article 318 (other deceits) of the Revised Penal Code provides that the penalty of arresto mayor and a fine of not less than the amount of the damage caused and not more than twice such amount shall be imposed upon any person who shall defraud or damage another by any other deceit not mentioned in the preceding articles of this chapter.

5.4. Further, B.P. Blg. 22 (Bouncing Checks Law) provides:

5.4.1. Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand pesos, or both such fine and imprisonment at the discretion of the court.

5.4.2. The same penalty shall be imposed upon any person who having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

5.4.3. Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

5.4.4. The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

5.4.5. It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon presentment, to cause to be written, printed or stamped in plain language thereon, or attached thereto, the reason for drawee's dishonor or refusal to pay the same: Provided, That where there are no sufficient funds in or credit with such drawee bank, such fact shall always be

explicitly stated in the notice of dishonor or refusal. In all prosecutions under this Act, the introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped or attached by the drawee on such dishonored check.

5.4.6. Notwithstanding receipt of an order to stop payment, the drawee shall state in the notice that there were no sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact."

5.5. BP Blg. 22 enumerates the elements of the crime to be

(1) the making, drawing and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and

(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

There is deemed to be a prima facie evidence of knowledge on the part of the maker, drawer or issuer of insufficiency of funds in or credit with the drawee bank of the check issued if the dishonored check is presented within 90 days from the date of the check and the maker or drawer fails to pay thereon or to make arrangement with the drawee bank for that purpose.

5.5.1. The statute has created the prima facie presumption evidently because "knowledge" which involves a state of mind would be difficult to establish. The presumption does not hold, however, when the maker, drawer or issuer of the check pays the holder thereof the amount due thereon or makes arrangement for payment in full by the drawee bank of such check within 5 banking days after receiving notice that such check has not been paid by the drawee bank. Section 2 of B.P. Blg. 22 clearly provides that this presumption arises not from the mere fact of drawing, making and issuing a bum check; there must also be a showing that, within five banking days from receipt of the notice of dishonor, such maker or drawer failed to pay the holder of the check the amount due thereon or to make arrangement for its payment in full by the drawee of such check.

LATEST APPLICABLE JURISPRUDENCE: ESTAFA

5.6. In PEOPLE OF THE PHILIPPINES vs. VIRGINIA BABY P. MONTANER, G.R. No. 184053, August 31, 2011, the accused was convicted for the crime of Estafa as defined and penalized under paragraph 2(d), Article 315 of the Revised Penal Code. The Information alleged that on or about May 17, 1996 in the Municipality of San Pedro, Province of Laguna and within the jurisdiction of this Honorable Court accused Virginia (Baby) P. Montaner did then and there willfully, unlawfully and feloniously defraud one Reynaldo Solis in the following manner: said accused by means of false pretenses and fraudulent acts that her checks are fully funded draw, make and issue in favor of one Reynaldo Solis ten (10) Prudential Bank Checks, all having a total value of FIFTY THOUSAND PESOS (P50,000.00) and all aforesaid checks were postdated June 17, 1996 in exchange for cash knowing fully well that she has no funds in the drawee bank and when the said checks were presented for payment the same were dishonored by the drawee bank on reason of ACCOUNT CLOSED and despite demand accused failed and refused to pay the value thereof to the damage and prejudice of Reynaldo Solis in the aforementioned total amount of P50,000.00.

To exculpate herself from criminal liability, accused Virginia Baby P. Montaner denied the allegations that she issued ten (10) checks in private complainants favor claiming that the ten (10) checks were borrowed from her by one Marlyn Galope because the latter needed money. She gave the ten checks to Galope, signed the same albeit the space for the date, amount and payee were left blank so that the checks cannot be used for any negotiation. She further told Galope that the checks were not funded. When she learned that a case was filed against her for estafa, she confronted Marlyn Galope and the latter told her that money will not be given to her if she will not issue the said checks. She has no knowledge of the notice of dishonor sent to her by private complainant and claimed that her husband, who supposedly received the notice of dishonor left for abroad in July 1996 and returned only after a year, that is, in 1997.

In a Decision dated April 8, 2003, the trial court convicted appellant for the crime of estafa as defined and penalized under paragraph 2(d), Article 315 of the Revised Penal Code and sentenced her to suffer an indeterminate penalty of imprisonment from twelve (12) years of prision mayor as minimum to twenty-two (22) years of reclusion perpetua as maximum and to indemnify complainant Reynaldo Solis in the amount of P50,000.00.

Appellant elevated the case to the Court of Appeals but the adverse ruling was merely affirmed by the appellate court in its Decision dated February 12, 2008.

Hence, appellant interposed an appeal before the Supreme Court and put forth a single assignment of error: THE TRIAL COURT GRAVELY ERRED IN FINDING THE ACCUSEDAPPELLANT GUILTY BEYOND REASONABLE DOUBT OF THE CRIME OF ESTAFA UNDER ARTICLE 315, PAR. 2 (D) OF THE REVISED PENAL CODE.

Appellant maintains that she entrusted the subject checks, purportedly signed in blank, to Marilyn Galope (Galope) out of pity in order for the latter to secure a loan. Thus, there is purportedly no certainty beyond reasonable doubt that she issued the checks purposely to defraud Reynaldo Solis (Solis) into lending her money. She further claims that no transaction had ever transpired between her and Solis. Admitting that she may have been imprudent, she nonetheless insists that her simple imprudence does not translate to criminal liability.

The Supreme Court was not persuaded.

The Court cited Paragraph 2(d), Article 315 of the Revised Penal Code provides:

ART. 315. Swindling (estafa). Any person who shall defraud another by any of the means mentioned hereinbelow x x x:

x x x x

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:

x x x x

(d) By postdating a check, or issuing a check in payment of an obligation when the offender had no funds in the bank, or his funds deposited therein were not sufficient to cover the amount of the check. The failure of the drawer of the check to deposit the amount necessary to cover his check within three (3) days from receipt of notice from the bank and/or the payee or holder that said check has been dishonored for lack or insufficiency of funds shall be prima facie evidence of deceit constituting false pretense or fraudulent act.

According to the Court, the elements of estafa under paragraph 2(d), Article 315 of the Revised Penal Code are: (1) the postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; (2) lack of sufficiency of funds to cover the check; and (3) damage to the payee.[1]

In the said case, the prosecution sufficiently established appellants guilt beyond reasonable doubt for estafa under paragraph 2(d), Article 315 of the Revised Penal Code. According to Soliss clear and categorical testimony, appellant issued to him the 10 postdated Prudential Bank checks, each in the amount of P5,000.00 or a total of P50,000.00, in his house in exchange for their cash equivalent.

From the circumstances, the Court held that it was evident that Solis would not have given P50,000.00 cash to appellant had it not been for her issuance of the 10 Prudential Bank checks. These postdated checks were undoubtedly issued by appellant to induce Solis to part with his cash. However, when Solis attempted to encash them, they were all dishonored by the bank because the account was already closed.

Solis wrote appellant a demand letter dated October 13, 1996 which was received by appellants husband to inform appellant that her postdated checks had bounced and that she must settle her obligation or else face legal action from Solis. Appellant did not comply with the demand nor did she deposit the amount necessary to cover the checks within three days from receipt of notice. This gave rise to a prima facie evidence of deceit, which is an element of the crime of estafa, constituting false pretense or fraudulent act as stated in the second sentence of paragraph 2(d), Article 315 of the Revised Penal Code.

As for appellants claims that she merely entrusted to Galope the blank but signed checks imprudently, without knowing that Galope would give them as a guarantee for a loan, the Court viewed such statements with the same incredulity as the lower courts.

Evidence, to be believed, must not only proceed from the mouth of a credible witness, but it must be credible in itself such as the common experience and observation of mankind can approve as probable under the circumstances. The Court has no test of the truth of human testimony, except its conformity to our knowledge, observation and experience. Whatever is repugnant to these belongs to the miraculous and is outside judicial cognizance.[2]

Appellant wished to impress upon the Court that she voluntarily parted with her blank but signed checks not knowing or even having any hint of suspicion that the same may be used to defraud anyone who may rely on them. Verily, appellants assertion defies ordinary common sense and human experience, the Court stated.

Moreover, the Court added, it is elementary that denial, if unsubstantiated by clear and convincing evidence, is negative and self-serving evidence which has far less evidentiary value than the testimony of credible witnesses who testify on affirmative matters.[3] It agreed with the lower courts that appellants bare denial cannot be accorded credence for lack of evidentiary support. As aptly noted by the trial court, appellants failure to produce Galope as a witness to corroborate her story is fatal to her cause. In all, the Court of Appeals committed no error in upholding the conviction of appellant for estafa. Hence, the Supreme Court AFFIRMED the two decisions of both the trial court and the appellate court.

LATEST APPLICABLE JURISPRUDENCE: B.P. BLG. 22

5.7. In EUMELIA R. MITRA vs. PEOPLE OF THE PHILIPPINES and FELICISIMO S. TARCELO, G.R. NO. 191404, July 5, 2010, the petitioner Eumelia R. Mitra (Mitra) was the Treasurer, and Florencio L. Cabrera (deceased), Jr. was the President, of Lucky Nine Credit Corporation (LNCC), a corporation engaged in money lending activities. Between 1996 and 1999, private respondent Felicisimo S. Tarcelo (Tarcelo) invested money in LNCC. As the usual practice in money placement transactions, Tarcelo was issued checks equivalent to the amounts he invested plus the interest on his investments by Mitra and Cabrera, were issued by LNCC to Tarcelo.

When Tarcelo presented these checks for payment, they were dishonored for the reason account closed. Tarcelo made several oral demands on LNCC for the payment of these checks but he was frustrated. Constrained, in 2002, he caused the filing of seven informations for violation of Batas Pambansa Blg. 22 (BP 22) in the total amount of P925,000.00 with the MTCC in Batangas City.

After trial on the merits, the MTCC found Mitra and Cabrera guilty of the charges and ordered them to respectively pay the mandated fines for each violation and with subsidiary imprisonment in all cases, in case of insolvency and it further adjudged them civilly liable and ordered them to pay, in solidum, private complainant Felicisimo S. Tarcelo the amount of NINE HUNDRED TWENTY FIVE THOUSAND PESOS (P925,000.000).

Mitra and Cabrera appealed to the Batangas RTC contending that: they signed the seven checks in blank with no name of the payee, no amount stated and no date of maturity; they did not know when and to whom those checks would be issued; the seven checks were only among those in one or two booklets of checks they were made to sign at that time; and that they signed the checks so as not to delay the transactions of LNCC because they did not regularly hold office there. The RTC affirmed the MTCC decision.

Meanwhile, Cabrera died. Mitra alone filed a petition for review with the Court of Appeals claiming, among others, that there was no proper service of the notice of dishonor on her. The Court of Appeals dismissed her petition for lack of merit.

Mitra went up to the Supreme Court on a petition for review and submitted the issues: WHETHER OR NOT THE ELEMENTS OF VIOLATION OF BATAS PAMBANSA BILANG 22 MUST BE PROVED BEYOND REASONABLE DOUBT AS AGAINST THE CORPORATION WHO OWNS THE CURRENT ACCOUNT WHERE THE SUBJECT CHECKS WERE DRAWN BEFORE LIABILITY ATTACHES TO THE SIGNATORIES; and WHETHER OR NOT THERE IS PROPER SERVICE OF NOTICE OF DISHONOR AND DEMAND TO PAY TO THE PETITIONER AND THE LATE FLORENCIO CABRERA, JR.

The Supreme Court denied the petition.

The Court held that a check is a negotiable instrument that serves as a substitute for money and as a convenient form of payment in financial transactions and obligations. The use of checks as payment allows commercial and banking transactions to proceed without the actual handling of money, thus, doing away with the need to physically count bills and coins whenever payment is made. It permits commercial and banking transactions to be carried out quickly and efficiently. But the convenience afforded by checks is damaged by unfunded checks that adversely affect confidence in our commercial and banking activities, and ultimately injure public interest.

BP 22 or the Bouncing Checks Law was enacted for the specific purpose of addressing the problem of the continued issuance and circulation of unfunded checks by irresponsible persons. To stem the harm caused by these bouncing checks to the community, BP 22 considers the mere act of issuing an unfunded check as an offense not only against property but also against public order.[4] The purpose of BP 22 in declaring the mere issuance of a bouncing check as malum prohibitum is to punish the offender in order to deter him and others from committing the offense, to isolate him from society, to reform and rehabilitate him, and to maintain social order.[5] The penalty is stiff. BP 22 imposes the penalty of imprisonment for at least 30 days or a fine of up to double the amount of the check or both imprisonment and fine.

Specifically, BP 22 provides:

SECTION 1. Checks Without Sufficient Funds. Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of the court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.

SECTION 2. Evidence of Knowledge of Insufficient Funds. The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.

Mitra posited in the petition that before the signatory to a bouncing corporate check can be held liable, all the elements of the crime of violation of BP 22 must first be proven against the corporation. The corporation must first be declared to have committed the violation before the liability attaches to the signatories of the checks.

The Court stated that it found itself unable to agree with Mitras posture. The third paragraph of Section 1 of BP 22 reads: "Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act." This provision recognizes the reality that a corporation can only act through its officers. Hence, its wording is unequivocal and mandatory that the person who actually signed the corporate check shall be held liable for a violation of BP 22. This provision does not contain any condition, qualification or limitation.

The Court cited the case of Llamado v. Court of Appeals,[6] where it ruled that the accused was liable on the unfunded corporate check which he signed as treasurer of the corporation. He could not invoke his lack of involvement in the negotiation for the transaction as a defense because BP 22 punishes the mere issuance of a bouncing check, not the purpose for which the check was issued or in consideration of the terms and conditions relating to its issuance. In this case, Mitra signed the LNCC checks as treasurer. Following Llamado, she must then be held liable for violating BP 22.

Another essential element of a violation of BP 22 is the drawers knowledge that he has insufficient funds or credit with the drawee bank to cover his check. Because this involves a state of mind that is difficult to establish, BP 22 creates the prima facie presumption that once the check is dishonored, the drawer of the check gains knowledge of the insufficiency, unless within five banking days from receipt of the notice of dishonor, the drawer pays the holder of the check or makes arrangements with the drawee bank for the payment of the check. The service of the notice of dishonor gives the drawer the opportunity to make good the check within those five days to avert his prosecution for violating BP 22.

Mitra alleged that there was no proper service on her of the notice of dishonor and, so, an essential element of the offense is missing. This contention, the Court said, raised a factual issue that was not proper for review. It is not the function of the Court to re-examine the finding of facts of the Court of Appeals. Our review is limited to errors of law and cannot touch errors of facts unless the petitioner shows that the trial court overlooked facts or circumstances that warrant a different disposition of the case[7] or that the findings of fact have no basis on record. Hence, with respect to the issue of the propriety of service on Mitra of the notice of dishonor, the Court gives full faith and credit to the consistent findings of the MTCC, the RTC and the CA.

The defense postulated that there was no demand served upon the accused, said denial deserves scant consideration. Positive allegation of the prosecution that a demand letter was served upon the accused prevails over the denial made by the accused. Though, having denied that there was no demand letter served on April 10, 2000, however, the prosecution positively alleged and proved that the questioned demand letter was served upon the accused on April 10, 2000, that was at the time they were attending Court hearing before Branch I of this Court. In fact, the prosecution had submitted a Certification issued by the other Branch of this Court certifying the fact that the accused were present during the April 10, 2010 hearing. With such straightforward and categorical testimony of the witness, the Court believes that the prosecution has achieved what was dismally lacking in the three (3) cases of Betty King, Victor Ting and Caras evidence of the receipt by the accused of the demand letter sent to her. The Court accepts the prosecutions narrative that the accused refused to sign the same to evidence their receipt thereof. To require the prosecution to produce the signature of the accused on said demand letter would be imposing an undue hardship on it. As well, actual receipt acknowledgment is not and has never been required of the prosecution either by law or jurisprudence. [emphasis supplied]

With the notice of dishonor duly served and disregarded, there arose the presumption that Mitra and Cabrera knew that there were insufficient funds to cover the checks upon their presentment for payment. In fact, the account was already closed.

To reiterate the elements of a violation of BP 22 as contained in the above-quoted provision, the Court said, a violation exists where:

1. a person makes or draws and issues a check to apply on account or for value;

2. the person who makes or draws and issues the check knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the full payment of the check upon its presentment; and

3. the check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment. [8]

The Court added that there was no dispute that Mitra signed the checks and that the bank dishonored the checks because the account had been closed. Notice of dishonor was properly given, but Mitra failed to pay the checks or make arrangements for their payment within five days from notice. With all the above elements duly proven, Mitra cannot escape the civil and criminal liabilities that BP 22 imposes for its breach.[9]

6. PRAYER.

WHEREFORE, premises considered, it is respectfully prayed that after notice and hearing the respondent be indicted for ESTAFA and VIOLATION OF B.P. BLG. 22 to protect/preserve the right/interest of the complainant to recover his claim of Five Million Pesos (P5,000,000.00), plus exemplary damages of P100,000.00, moral damages of P100,000.00, attorneys fees of P125,000.00 plus 5% of the recoverable amounts, and costs of suit.

X x x City, October 18, 2011.

X x x Complainant LTO Drivers License No. __________________ Expiring on _________

Assisted By:

LASERNA CUEVA-MERCADER LAW OFFICESCounsel for the ComplainantUnit 15, Star Arcade. C.V. Starr Ave.Philamlife Village, Las Pinas City 1740Tel. No. 8725443; Fax No. 8462539.

MANUEL J. LASERNA JR.Roll No. 33640, 4/27/85IBP Lifetime Member No. 1907IBP Leyte ChapterPTR 1016909, 1/7/11, Las Pinas CityMCLE Compliance No. IV-1326, 2/3/11

SUBSCRIBED and sworn to before in Muntinlupa City me this ___ day of October 2011, affiant/complainant showing his official identification document as stated above.

Administering Assistant City Prosecutor

Annexes: A to L, supra.SECOND DIVISIONJAIME U. GOSIACO,G.R. No. 173807Petitioner,Present:QUISUMBING, J., - versus -Chairperson,CARPIO MORALES,TINGA,VELASCO, JR., and BRION, JJ.LETICIA CHING and EDWINCASTA, Respondents.Promulgated:April 16, 2009x---------------------------------------------------------------------------------xD E C I S I O NTinga, J.:The right to recover due and demandable pecuniary obligations incurred by juridical persons such as corporations cannot be impaired by procedural rules. Our rules of procedure governing the litigation of criminal actions for violation of Batas Pambansa Blg. 22 (B.P. 22) have given the appearance of impairing such substantive rights, and we take the opportunity herein to assert the necessary clarifications.Before us is a Rule 45 petition[footnoteRef:63][1] which seeks the reversal of the Decision[footnoteRef:64][2] of the Court of Appeals in CA-GR No. 29488. The Court of Appeals' decision affirmed the decision[footnoteRef:65][3] of the Regional Trial Court of Pasig, Branch 68 in Criminal Case No. 120482. The RTC's decision reversed the decision[footnoteRef:66][4] of the Metropolitan Trial Court of San Juan, Branch 58 in Criminal Case No. 70445 which involved a charge of violation of B.P. Blg. 22 against respondents Leticia Ching (Ching) and Edwin Casta (Casta). [63: [1]Rollo. pp. 3-44. ] [64: [2]Dated 19 July 2006 and penned by Associate Justice Santiago Javier Ranada and concurred in by Associate Justices Portia Alino-Hormachuelos, Chairperson Fourth Division, and Amelita G. Tolentino. id. at 88-95. ] [65: [3]Dated 12 July 2005 and penned by Judge Santiago G. Estrella; id. at 83-87. ] [66: [4] Dated 08 February 2001 and pendered by Judge Maxwel S. Rosete; id. at 73-82.]

On 16 February 2000, petitioner Jaime Gosiaco (petitioner) invested P8,000,000.00 with ASB Holdings, Inc. (ASB) by way of loan. The money was loaned to ASB for a period of 48 days with interest at 10.5% which is equivalent to P112,000.00. In exchange, ASB through its Business Development Operation Group manager Ching, issued DBS checks no. 0009980577 and 0009980578 for P8,000,000.00 and P112,000.00 respectively. The checks, both signed by Ching, were drawn against DBS Bank Makati Head Office branch. ASB, through a letter dated 31 March 2000, acknowledged that it owed petitioner the abovementioned amounts.[footnoteRef:67][5] [67: [5]The letter was signed by Luke Roxas; id. at 60]

Upon maturity of the ASB checks, petitioner went to the DBS Bank San Juan Branch to deposit the two (2) checks. However, upon presentment, the checks were dishonored and payments were refused because of a stop payment order and for insufficiency of funds. Petitioner informed respondents, through letters dated 6 and 10 April 2000,[footnoteRef:68][6] about the dishonor of the checks and demanded replacement checks or the return of the money placement but to no avail. Thus, petitioner filed a criminal complaint for violation of B.P. Blg. 22 before the Metropolitan Trial Court of San Juan against the private respondents. [68: [6]Id. at 62.]

Ching was arraigned and tried while Casta remained at large. Ching denied liability and claimed that she was a mere employee of ASB. She asserted that she did not have knowledge as to how much money ASB had in the banks. Such responsibility, she claimed belonged to another department. On 15 December 2000, petitioner moved[footnoteRef:69][7] that ASB and its president, Luke Roxas, be impleaded as party defendants. Petitioner, then, paid the corresponding docket fees. However, the MTC denied the motion as the case had already been submitted for final decision.[footnoteRef:70][8] [69: [7]Id. at 67-71] [70: [8]Records, p. 764. ]

On 8 February 2001, the MTC acquitted Ching of criminal liability but it did not absolve her from civil liability. The MTC ruled that Ching, as a corporate officer of ASB, was civilly liable since she was a signatory to the checks.[footnoteRef:71][9] [71: [9]See note 4. ]

Both petitioner and Ching appealed the ruling to the RTC. Petitioner appealed to the RTC on the ground that the MTC failed to hold ASB and Roxas either jointly or severally liable with Ching. On the other hand, Ching moved for a reconsideration which was subsequently denied. Thereafter, she filed her notice of appeal on the ground that she should not be held civilly liable for the bouncing checks because they were contractual obligations of ASB.On 12 July 2005, the RTC rendered its decision sustaining Ching's appeal. The RTC affirmed the MTCs ruling which denied the motion to implead ASB and Roxas for lack of jurisdiction over their persons. The RTC also exonerated Ching from civil liability and ruled that the subject obligation fell squarely on ASB. Thus, Ching should not be held civilly liable.[footnoteRef:72][10] [72: [10]See note 3. ]

Petitioner filed a petition for review with the Court of Appeals on the grounds that the RTC erred in absolving Ching from civil liability; in upholding the refusal of the MTC to implead ASB and Roxas; and in refusing to pierce the corporate veil of ASB and hold Roxas liable. On 19 July 2006, the Court of Appeals affirmed the decision of the RTC and stated that the amount petitioner sought to recover was a loan made to ASB and not to Ching. Roxas testimony further bolstered the fact that the checks issued by Ching were for and in behalf of ASB. The Court of Appeals ruled that ASB cannot be impleaded in a B.P. Blg. 22 case since it is not a natural person and in the case of Roxas, he was not the subject of a preliminary investigation. Lastly, the Court of Appeals ruled that there was no need to pierce the corporate veil of ASB since none of the requisites were present.[footnoteRef:73][11] [73: [11]See note 2. ]

Hence this petition. Petitioner raised the following issues: (1) is a corporate officer who signed a bouncing check civilly liable under B.P. Blg. 22; (2) can a corporation be impleaded in a B.P. Blg. 22 case; and (3) is there a basis to pierce the corporate veil of ASB? B.P. Blg. 22 is popularly known as the Bouncing Checks Law. Section 1 of B.P. Blg. 22 provides:xxxxxxxxxWhere the check is drawn by a corporation, company or entity, the person or persons, who actually signed the check in behalf of such drawer shall be liable under this Act. B.P. Blg. 22 was enacted to address the rampant issuance of bouncing checks as payment for pre-existing obligations. The circulation of bouncing checks adversely affected confidence in trade and commerce. The State criminalized such practice because it was deemed injurious to public interests[footnoteRef:74][12] and was found to be pernicious and inimical to public welfare.[footnoteRef:75][13] B.P. Blg. 22 punishes the act of making and issuing bouncing checks. It is th