LUIS WONG vs. CA

G.R. No. 117857

February 2, 2001

FACTS:

Wong was an agent of Limtong Press Inc. (LPI), a manufacturer of calendars. However, petitioner had a history of unremitted collections. Hence, petitioner’s customers were required to issue postdated checks before LPI would accept their purchase orders.

In early December 1985, Wong issued 6 postdated checks totaling P18,025, all dated December 30, 1985 and drawn payable to the order of LPI. The checks were drawn against Allied Banking Corporation.

The checks were initially intended to guarantee the calendar orders of customers who failed to issue post-dated checks. However, following company policy, LPI refused to accept the checks as guarantees. Instead, the parties agreed to apply the checks to the payment of petitioner’s unremitted collections for 1984 amounting to P18,077.07. LPI waived the P52.07 difference.

Before the maturity of the checks, petitioner prevailed upon LPI not to deposit the checks and promised to replace them within 30 days. However, petitioner reneged on his promise. Hence, on June 5, 1986, LPI deposited the checks with Rizal Commercial Banking Corporation (RCBC). The checks were returned for the reason “account closed.”

On June 20, 1986, complainant notified the petitioner of the dishonor. However, petitioner failed to make arrangements for payment within 5 banking days.

On November 6, 1987, petitioner was charged with 3 counts of violation of B.P. Blg. 22 under 3 separate Informations for the 3 checks amounting to P5,500.00, P3,375.00, and P6,410.00.

Petitioner was similarly charged in Criminal Case No. 12057 for ABC Check No. 660143463 in the amount of P3,375.00, and in Criminal Case No. 12058 for ABC Check No. 660143464 for P6,410.00. Both cases were raffled to the same trial court.

The version of the defense is that petitioner issued the 6 checks to guarantee the 1985 calendar bookings of his customers, not as payment for any obligation. In fact, the face value of the 6 postdated checks tallied with the total amount of the calendar orders of the 6 customers of the accused. Although these customers had already paid their respective orders, petitioner claimed LPI did not return the said checks to him.

On August 30, 1990, the trial court found petitioner guilty beyond reasonable doubt with 3 counts of Violations of Sec.1 of B.P. Blg. 22.

Petitioner appealed his conviction to the CA. However, it affirmed the trial court’s decision in toto on October 28, 1994.

ISSUES:

1. Whether the checks were issued merely as guarantee or for payment of petitioner’s unremitted collections.

2. WON the prosecution was able to establish beyond reasonable doubt all the elements of the offense penalized under B.P. Blg. 22.

3. WON petitioner’s penalty may be modified to only payment of fine.

HELD:

1.This is a factual issue involving as it does the credibility of witnesses. Said factual issue has been settled by the trial court and CA. Its findings of fact are generally conclusive, and there is no cogent reason to depart from such. In cases elevated from the CA, the SC’s review is confined to alleged errors of law. Absent any showing that the findings by the respondent court are entirely devoid of any substantiation on record, the same must stand. The lack of accounting between the parties is not the issue in this case. As repeatedly held, the SC is not a trier of facts.

2. There are 2 ways of violating B.P. Blg. 22:

(a) by making or drawing and issuing a check to apply on account or for value knowing at the time of issue that the check is not sufficiently funded; and

(b) by having sufficient funds in or credit with the drawee bank at the time of issue but failing to keep sufficient funds therein, or credit with, said bank to cover the full amount of the check when presented to the drawee bank within a period of 90 days.

The elements of B.P. Blg. 22 under the 1st situation, pertinent to the present case, are:

(a) The making, drawing & issuance of any check to apply for account or for value;

(b) 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

(c) 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.

As to the 1st element, the RTC & CA have both ruled that the checks were in payment for unremitted collections, and not as guarantee. What B.P. Blg. 22 punishes is the issuance of a bouncing check, and not the purpose for which it was issued nor the terms and conditions relating to its issuance.

As to the 2nd element, B.P. Blg. 22 creates a presumption juris tantum that the 2nd element prima facie exists when the 1st & 3rd elements of the offense are present. Thus, the maker’s knowledge is presumed from the dishonor of the check for insufficiency of funds.

An essential element of the offense is “knowledge” on the part of the maker/drawer of the check of the insufficiency of his funds in, or credit with, the bank to cover the check upon its presentment. Since this involves a state of mind difficult to establish, the statute itself creates a prima facie presumption of such knowledge where payment of the check “is refused by the drawee because of insufficient funds in, or credit with, such bank when presented within 90 days from the date of the check.” The statute provides that such presumption shall not arise if within 5 banking days from receipt of the notice of dishonor, the maker/drawer makes arrangements for payment of the check by the bank or pays the holder the amount of the check.

Nowhere in the said provision does the law require a maker to maintain funds in his bank account for only 90 days. Rather, the clear import of the law is to establish a prima facie presumption of knowledge of such insufficiency of funds under the following conditions: (1) presentment within 90 days from date of the check, and (2) the dishonor of the check & failure of the maker to make arrangements for payment in full within 5 banking days after notice thereof. That the check must be deposited within 90 days is simply one of the conditions for the prima facie presumption of knowledge of lack of funds to arise. It is not an element of the offense. Neither does it discharge petitioner from his duty to maintain sufficient funds in the account within a reasonable time thereof. Under Sec. 186 of the Negotiable Instruments Law, “a check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay.” By current banking practice, a check becomes stale after more than 6 months (180 days).

Private respondent herein deposited the checks 157 days after the date of the check. Hence said checks cannot be considered stale. Only the presumption of knowledge of insufficiency of funds was lost, but such knowledge could still be proven by direct or circumstantial evidence. As found by the RTC, private respondent did not deposit the checks because of the reassurance of petitioner that he would issue new checks. Upon his failure to do so, LPI was constrained to deposit the said checks. After the checks were dishonored, petitioner was duly notified of such fact but failed to make arrangements for full payment within 5 banking days thereof. There is, on record, sufficient evidence that petitioner had knowledge of the insufficiency of his funds in or credit with the drawee bank at the time of issuance of the checks. And despite petitioner’s insistent plea of innocence, the respondent court is not in error for affirming his conviction by the trial court for violations of the Bouncing Checks Law.

3. Pursuant to the policy guidelines in Administrative Circular No. 12-2000, which took effect on November 21, 2000, the penalty imposed on petitioner should now be modified to a fine of not less than but not more than double the amount of the checks that were dishonored. The penalty imposed on him is modified so that the sentence of imprisonment is deleted.

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