ASG Law

Tag: Insufficient Funds

  • Bouncing Checks and Brokerage: Establishing Liability Under B.P. 22

    The Supreme Court has affirmed that individuals who issue checks that are subsequently dishonored due to insufficient funds or a closed account can be held liable under Batas Pambansa Bilang 22 (B.P. 22), also known as the Bouncing Checks Law. This ruling underscores the importance of ensuring sufficient funds when issuing checks and reinforces the legal consequences for failing to honor financial obligations. The decision emphasizes the prosecution’s responsibility to prove the elements of B.P. 22 violation beyond a reasonable doubt, including the issuance of the check, knowledge of insufficient funds, and subsequent dishonor.

    From Stock Investments to Bounced Checks: Can a Broker Be Held Liable?

    This case revolves around Ma. Eliza C. Garcia, a stockbroker, and her dealings with Carl Valentin, an investor. Valentin claimed that Garcia convinced him to invest in the stock market. As part of their transactions, Garcia issued two checks to Valentin, which were later dishonored due to a closed account. This led to Garcia being charged with two counts of violating B.P. 22, the Bouncing Checks Law. The central legal question is whether the prosecution successfully proved that Garcia violated B.P. 22 beyond a reasonable doubt, and if the imposed penalty was appropriate.

    The facts presented before the court indicated that Garcia issued City Trust Check No. 057066, dated January 8, 1996, for P323,113.50, and City Trust Check No. 057067, dated January 24, 1996, for P146,886.50, both payable to Valentin. These checks represented the proceeds from Valentin’s stock market investments that Garcia managed. Crucially, at the time Garcia issued these checks, the account against which they were drawn had been closed, resulting in their dishonor upon presentment. Despite Valentin’s repeated demands, Garcia failed to cover the amounts of the dishonored checks, which then led to the filing of criminal charges against her.

    The elements of B.P. 22 must be established to secure a conviction. According to the Supreme Court, the elements are: “(1) the accused makes, draws, or issues any check to apply on account or for value; (2) the accused knows 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; 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.” The court found all these elements to be present in Garcia’s case, as she issued the checks, knew the account was closed, and the checks were indeed dishonored.

    Garcia’s defense hinged on the argument that the prosecution failed to prove she was the one who issued and signed the checks. However, the court found this argument unpersuasive. Valentin testified that Garcia issued the checks to him. Furthermore, the signatures on the checks matched those on the confirmation slips Garcia had issued to Valentin in his presence. This circumstantial evidence, coupled with Garcia’s failure to explicitly deny issuing the checks or owning the account, led the court to conclude that she was indeed the issuer.

    Moreover, Section 3 of B.P. 22 provides a rule of evidence that significantly impacts such cases. It states: “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…” This provision creates a presumption that the check was made or issued by the accused, that it was duly presented for payment, and that it was dishonored for the stated reason.

    While this presumption is rebuttable, Garcia failed to present sufficient evidence to overcome it. The Regional Trial Court (RTC) and the Court of Appeals (CA) both found that Garcia’s defense lacked a solid foundation. The Supreme Court generally defers to the factual findings of lower courts, especially when affirmed by the appellate court, unless there is a clear error. In this case, no such error was found, reinforcing the conviction based on the evidence presented.

    Regarding the penalty imposed, the Supreme Court took into account Administrative Circular No. 12-2000, which provides guidelines for penalties in B.P. 22 violations. This circular allows for the deletion of imprisonment as a penalty, especially for first-time offenders, and imposes a fine instead. The circular references the case of Eduardo Vaca v. Court of Appeals, where the Supreme Court modified the sentence by deleting imprisonment and imposing a fine equivalent to double the amount of the check, noting that such a penalty serves justice while allowing the offender to remain economically productive.

    As such, the Supreme Court modified Garcia’s sentence. While affirming the conviction, the court deleted the imprisonment penalty and instead imposed a fine of P200,000 for each violation, corresponding to Criminal Case Nos. 21632 and 21633. Garcia was also ordered to restitute Valentin for the face value of the checks, with legal interest, representing the actual damages he incurred. This adjustment reflects a broader trend in jurisprudence favoring fines over imprisonment in B.P. 22 cases, particularly for first-time offenders.

    FAQs

    What is B.P. 22? B.P. 22, also known as the Bouncing Checks Law, penalizes the making, drawing, and issuance of checks without sufficient funds or credit with the drawee bank. It aims to prevent the use of checks as a means of defrauding creditors.
    What are the elements of a B.P. 22 violation? The elements include making or issuing a check, knowing there are insufficient funds, and the subsequent dishonor of the check by the bank due to insufficient funds or a closed account. The prosecution must prove these elements beyond a reasonable doubt.
    What is the significance of Section 3 of B.P. 22? Section 3 provides that a dishonored check serves as prima facie evidence of the making or issuance of the check, its due presentment, and dishonor. This shifts the burden to the accused to prove otherwise.
    What was the Court’s basis for affirming the conviction? The Court relied on Valentin’s testimony, the matching signatures on the checks and confirmation slips, and Garcia’s failure to rebut the presumption created by the dishonored checks. These factors led to the conclusion that Garcia indeed issued the checks knowing they would bounce.
    Why was the penalty modified in this case? The penalty was modified in accordance with Administrative Circular No. 12-2000, which favors fines over imprisonment for B.P. 22 violations, especially for first-time offenders. This aligns with the goal of allowing offenders to remain economically productive while still holding them accountable.
    What does ‘prima facie’ evidence mean? ‘Prima facie’ evidence means that the evidence is sufficient to prove a particular fact unless disproved or rebutted by contrary evidence. It establishes a rebuttable presumption in favor of the prosecution.
    What is the effect of Administrative Circular No. 12-2000? It directs courts to consider imposing fines rather than imprisonment for violations of B.P. 22. This reflects a policy shift towards prioritizing economic productivity and rehabilitation over incarceration in certain cases.
    What is the civil liability in B.P. 22 cases? In addition to criminal penalties, the offender is typically ordered to pay the face value of the dishonored check as restitution to the complainant. Interest on the amount may also be imposed from the filing of the information until full payment.

    This case clarifies the responsibilities of individuals issuing checks, particularly in business contexts such as stock brokerage. The decision reinforces the importance of maintaining sufficient funds and the potential legal repercussions for issuing bouncing checks. By favoring fines over imprisonment, the Supreme Court seeks to balance justice with the economic realities of offenders, promoting rehabilitation while ensuring accountability.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: MA. ELIZA C. GARCIA v. COURT OF APPEALS, G.R. No. 138197, November 27, 2002

  • Insufficient Notice, Insufficient Funds: Safeguarding Rights in Bouncing Check Cases

    In Ben B. Rico v. People of the Philippines, the Supreme Court clarified the critical importance of providing proper notice to individuals accused of violating the Bouncing Checks Law (B.P. 22). The Court ruled that to be convicted under B.P. 22, the accused must have actual knowledge of insufficient funds at the time of issuing the check. This knowledge is presumed only if the issuer receives a notice of dishonor and fails to cover the check within five banking days. Without proof of this notice, the presumption of knowledge does not arise, protecting individuals from potential unjust convictions. This case underscores the necessity of due process in financial transactions, requiring creditors to provide clear, documented notification before pursuing legal action.

    Dishonored Checks and Due Process: When Does a Debt Become a Crime?

    Ben Rico, a construction contractor, faced charges for violating the Bouncing Checks Law after several checks he issued to Ever Lucky Commercial (ELC) were dishonored due to insufficient funds or closed accounts. ELC, a supplier of construction materials, claimed Rico failed to settle his debts despite verbal demands. The Regional Trial Court found Rico guilty on five counts, a decision affirmed by the Court of Appeals. The central legal question was whether Rico’s guilt was proven beyond a reasonable doubt, specifically regarding his knowledge of the insufficiency of funds at the time the checks were issued, a key element for conviction under B.P. 22.

    The Supreme Court, however, overturned these decisions, emphasizing that the prosecution failed to sufficiently prove Rico’s knowledge of insufficient funds. The court meticulously examined the elements of B.P. 22 violations, which include: the issuance of a check for account or value; the issuer’s knowledge of insufficient funds at the time of issuance; and the subsequent dishonor of the check. While the first and third elements were established, the critical second element – knowledge – was not adequately proven.

    Knowledge of insufficient funds is often difficult to prove directly. Section 2 of B.P. 22 addresses this by creating a prima facie presumption of such knowledge. However, this presumption is not automatic. It arises only after it is proven that the issuer received a notice of dishonor and failed to make good on the check within five banking days. The law explicitly states:

    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 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.”

    In Rico’s case, the prosecution’s evidence fell short of establishing that he received proper notice of the dishonored checks. The lower courts relied on the testimony of a prosecution witness who claimed that ELC made immediate verbal demands for payment. However, the Supreme Court found this insufficient, noting that no formal written demand letters or notices of dishonor were presented. The Court highlighted the importance of providing clear and authenticated proof of receipt of such notices.

    Building on this principle, the Supreme Court cited its previous ruling in Lao vs. Court of Appeals, stressing that a notice of dishonor personally sent to and received by the accused is a prerequisite for liability under B.P. 22. The court in Lao stated:

    Because no notice of dishonor was actually sent to and received by the petitioner, the prima facie presumption that she knew about the insufficiency of funds cannot apply. Section 2 of BP 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.

    The absence of proven notice, according to the Supreme Court, deprives the accused of the opportunity to preempt criminal prosecution. The ruling emphasizes procedural due process, ensuring that individuals are given a fair chance to address the issue of a dishonored check before facing criminal charges. It underscored the necessity of proving that the accused actually received the notice, emphasizing that registered receipts or return receipts alone are insufficient without proper authentication.

    The Court further clarified that even if verbal demands were made, they do not satisfy the requirement of explicit notice as contemplated by B.P. 22. Penal statutes, the court reiterated, must be construed strictly against the State and liberally in favor of the accused. This principle ensures that individuals are not unjustly penalized due to ambiguous or unverified claims.

    However, while Rico was acquitted of the criminal charges, the Supreme Court addressed the issue of civil liability. Even though the prosecution failed to prove guilt beyond a reasonable doubt, the Court found that Rico still owed a debt to ELC. Consequently, Rico was ordered to pay the face value of the dishonored checks, along with legal interest, from the date the informations were filed until the amount is fully paid. This part of the ruling is based on the principle that an acquittal in a criminal case does not necessarily extinguish civil liability, especially when the acquittal is based on reasonable doubt, which requires a lower standard of proof (preponderance of evidence) than criminal conviction.

    The court also dismissed Rico’s claim of prior payment, finding it illogical that he would overpay his obligations and not retrieve the dishonored checks. The fact that ELC retained possession of the checks strongly suggested that they had not been fully paid. The Supreme Court found his argument of advance payments untenable as it is unlikely for someone in debt to give more than what is due. It is also unlikely that he would pay substantial amounts of interest when nothing had been agreed upon on this matter, especially since he issued post-dated checks due to insufficient funds.

    In conclusion, the Supreme Court modified the Court of Appeals’ decision, acquitting Ben Rico of the B.P. 22 charges due to reasonable doubt regarding his knowledge of insufficient funds. However, he remained civilly liable for the debt, highlighting the distinction between criminal and civil liabilities in bouncing check cases. This ruling underscores the importance of adhering to procedural requirements, particularly the provision of proper notice, in prosecuting B.P. 22 violations.

    FAQs

    What was the key issue in this case? The key issue was whether the prosecution sufficiently proved that Ben Rico had knowledge of the insufficiency of funds in his account at the time he issued the checks, a necessary element for conviction under B.P. 22. The court focused on whether proper notice of dishonor was given.
    What is the Bouncing Checks Law (B.P. 22)? B.P. 22, also known as the Bouncing Checks Law, penalizes the making, drawing, and issuance of a check with knowledge that at the time of issue, the drawer does not have sufficient funds in or credit with the bank to cover the check upon presentment. It aims to prevent the circulation of worthless checks.
    What is the significance of a notice of dishonor? A notice of dishonor is a notification to the issuer of a check that the check has been refused payment by the bank due to insufficient funds or a closed account. This notice is crucial because it triggers the five-day period for the issuer to make good on the check, failing which, a prima facie presumption of knowledge of insufficient funds arises.
    What does prima facie evidence mean in this context? Prima facie evidence means evidence that is sufficient to establish a fact or raise a presumption of fact unless disproved or rebutted. In B.P. 22 cases, the dishonor of a check, coupled with proof of notice to the issuer, creates a prima facie presumption that the issuer knew of the insufficient funds.
    Why was Ben Rico acquitted in this case? Ben Rico was acquitted because the prosecution failed to provide sufficient evidence that he received a notice of dishonor from Ever Lucky Commercial. Without proof of this notice, the prima facie presumption of his knowledge of insufficient funds could not be established.
    Did the Supreme Court say that verbal demands are sufficient as notice of dishonor? No, the Supreme Court explicitly stated that verbal demands are insufficient to serve as a notice of dishonor under B.P. 22. The Court emphasized the need for a written notice to ensure that the issuer is properly informed of the dishonor and given the opportunity to make arrangements for payment.
    Was Ben Rico completely free from liability? No, while Ben Rico was acquitted of the criminal charges under B.P. 22, he was still held civilly liable for the debt. The Supreme Court ordered him to pay the face value of the dishonored checks, along with legal interest, to Ever Lucky Commercial.
    What was the court’s reasoning for holding Rico civilly liable despite his acquittal? The court reasoned that an acquittal based on reasonable doubt does not preclude the award of civil damages. Since the evidence presented showed that Rico indeed owed money to Ever Lucky Commercial, he was held civilly liable despite the lack of proof beyond a reasonable doubt for the criminal charges.
    What are the practical implications of this ruling for businesses? This ruling underscores the importance for businesses to maintain thorough documentation of all transactions, especially when dealing with checks. Businesses must ensure that they send written notices of dishonor and retain proof of receipt to protect their rights.

    The Ben Rico case serves as a reminder of the importance of due process and the need for clear, documented evidence in legal proceedings. It clarifies the requirements for proving knowledge of insufficient funds in B.P. 22 cases, protecting individuals from potential unjust convictions while still ensuring that legitimate debts are addressed.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Ben B. Rico, vs. People of the Philippines, G.R. No. 137191, November 18, 2002

  • Insufficient Notice Dooms B.P. 22 Conviction: Protecting Due Process in Bouncing Check Cases

    In Ben B. Rico v. People of the Philippines, the Supreme Court acquitted Ben Rico of violating Batas Pambansa Blg. 22 (B.P. 22), also known as the Bouncing Checks Law, because the prosecution failed to prove that Rico received a proper notice of dishonor for the bounced checks he issued. The Court emphasized that a prima facie presumption of knowledge of insufficient funds arises only after the issuer receives such notice and fails to make good the payment within five banking days. This ruling underscores the importance of due process in B.P. 22 cases, requiring the prosecution to demonstrate that the accused was properly informed of the dishonor and given a chance to rectify the situation before criminal liability attaches. While Rico was acquitted, the Court still ordered him to pay the face value of the checks plus legal interest, highlighting the distinction between criminal and civil liabilities.

    From Contractor to Convict? The High Court’s Take on B.P. 22 and Due Process

    Ben Rico, a “pakyaw” contractor, found himself in legal trouble after issuing several checks to Ever Lucky Commercial (ELC) for construction materials purchased on credit. These checks, unfortunately, bounced due to either insufficient funds or a closed account. Consequently, Rico faced five counts of violating B.P. 22, the Bouncing Checks Law. The Regional Trial Court of Laoag City convicted him on all counts, a decision later affirmed by the Court of Appeals. However, Rico elevated the case to the Supreme Court, arguing that the prosecution failed to prove a critical element of the crime: his knowledge of the insufficiency of funds at the time he issued the checks.

    The core of the legal battle revolved around the prosecution’s burden to establish all the elements of B.P. 22 beyond reasonable doubt. The law itself, designed to maintain confidence in the banking system, criminalizes the issuance of checks without sufficient funds. Specifically, the elements of the offense are: (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.

    The Supreme Court agreed with Rico, emphasizing that knowledge of insufficient funds is an essential element. While the prosecution successfully proved the first and third elements—the issuance and dishonor of the checks—it faltered in establishing Rico’s knowledge. Section 2 of B.P. 22 introduces a prima facie presumption of such knowledge, stating:

    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 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.”

    Building on this principle, the Court underscored that this presumption arises only after it’s proven that the issuer received a notice of dishonor and failed to cover the check within five days. In this case, the prosecution relied solely on testimony that ELC verbally demanded payment after the checks bounced. There was no evidence of formal written demand letters or notices of dishonor being sent to Rico. The Court found this insufficient, stating that aside from this self-serving testimony, no other evidence was presented to prove the giving and receiving of such notice. The nature and content of said demands were not clarified. Even the date when and the manner by which these alleged demands were made upon and received by petitioner were not specified.

    This emphasis on proper notice reflects a commitment to due process, ensuring that individuals are given a fair opportunity to rectify their mistakes before facing criminal charges. As the Court noted in Lao vs. Court of Appeals, a notice of dishonor personally sent to and received by the accused is necessary before one can be held liable under B.P. 22. The absence of such notice deprives the accused of a chance to preempt criminal prosecution.

    Because no notice of dishonor was actually sent to and received by the petitioner, the prima facie presumption that she knew about the insufficiency of funds cannot apply. Section 2 of BP 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.

    The Court has consistently held that penal statutes must be construed strictly against the state and liberally in favor of the accused. This principle reinforces the need for clear and convincing evidence, especially when dealing with elements that involve a person’s state of mind. This approach contrasts with a more lenient interpretation, which could potentially lead to unjust convictions based on mere assumptions.

    Moreover, the Court addressed Rico’s claim that he had already paid his obligations to ELC. While acknowledging the official receipts presented as evidence, the Court found it “unnatural and illogical” for Rico to have paid more than his outstanding obligations or to have paid substantial amounts of interest without any prior agreement. The fact that Rico did not retrieve the dishonored checks further weakened his claim of full payment. Even though the Court rejected the claim of prior payment, it emphasized that failure to prove the elements of the crime means the accused should be acquitted.

    Despite the acquittal, the Court ordered Rico to pay the face value of the dishonored checks plus legal interest. This stems from the principle that an acquittal based on reasonable doubt doesn’t preclude the award of civil damages. The Court clarified that a judgment of acquittal extinguishes the liability of the accused for damages only when it includes a declaration that the facts from which the civil liability might arise did not exist.

    The practical implications of this decision are significant. It serves as a reminder to businesses and individuals dealing with checks to ensure that proper procedures for notifying the issuer of dishonored checks are followed. Failure to do so can jeopardize any potential criminal prosecution under B.P. 22. This also highlights the importance of retaining evidence of proper notice as the Court has emphasized that there must also be proof of receipt thereof that is properly authenticated, and not mere registered receipt and/or return receipt.

    In the end, the Supreme Court’s decision in Rico v. People underscores the delicate balance between protecting the integrity of financial transactions and safeguarding individual rights. By emphasizing the need for proper notice and proof of knowledge, the Court reinforces the principles of due process and ensures that individuals are not unjustly penalized under the Bouncing Checks Law.

    FAQs

    What was the key issue in this case? The key issue was whether the prosecution proved beyond reasonable doubt that Ben Rico knew his checks had insufficient funds when issued, a necessary element for violating B.P. 22. The Court focused on whether proper notice of dishonor was given.
    What is Batas Pambansa Blg. 22 (B.P. 22)? B.P. 22, also known as the Bouncing Checks Law, criminalizes the act of issuing checks with insufficient funds or credit, intending to maintain confidence in the Philippine banking system. It aims to deter people from issuing checks they cannot cover.
    What is a “notice of dishonor”? A notice of dishonor is a formal notification to the issuer of a check that the check has been rejected by the bank due to insufficient funds or a closed account. This notice is crucial for establishing the issuer’s knowledge of the insufficiency.
    Why is the notice of dishonor so important in B.P. 22 cases? The notice of dishonor triggers the prima facie presumption that the issuer knew about the insufficient funds. It also gives the issuer a chance to make good on the check within five banking days, potentially avoiding criminal prosecution.
    What happens if the issuer doesn’t receive a notice of dishonor? If the issuer does not receive a proper notice of dishonor, the presumption of knowledge of insufficient funds does not arise, making it difficult for the prosecution to prove a key element of the crime. This can lead to an acquittal, as happened in Rico’s case.
    Was Ben Rico completely off the hook? No, while Rico was acquitted of the criminal charges under B.P. 22, the Supreme Court still ordered him to pay the face value of the checks to Ever Lucky Commercial, plus legal interest. This reflects his civil liability for the debt.
    Can a person be acquitted of violating B.P. 22 but still be required to pay the debt? Yes, an acquittal in a B.P. 22 case doesn’t automatically extinguish the civil liability. If the acquittal is based on reasonable doubt, a court can still order the accused to pay the debt if the evidence shows a preponderance of evidence for the civil claim.
    What evidence is sufficient to prove receipt of notice of dishonor? While a written notice isn’t explicitly required by B.P. 22, the Supreme Court requires proof that the debtor was actually notified in writing about the dishonor. Registered mail receipts alone may be deemed insufficient without other substantiating evidence of actual receipt.

    The Ben B. Rico v. People case serves as a critical reminder of the stringent requirements for proving a violation of B.P. 22, especially regarding the element of knowledge. The necessity of proper notice and authenticated proof of receipt of dishonor protects individuals from unjust convictions while ensuring that civil obligations are met.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Ben B. Rico, vs. People, G.R. No. 137191, November 18, 2002

  • B.P. 22 and Credit Lines: When a Stop Payment Order Doesn’t Imply Insufficient Funds

    In Eliza T. Tan v. People, the Supreme Court acquitted the petitioner of violating Batas Pambansa Blg. 22 (B.P. 22), also known as the Bouncing Checks Law. The Court clarified that a stop payment order on a check, especially when the account is sufficiently funded through a credit line, does not automatically equate to a violation of B.P. 22. This decision underscores the importance of proving that a check was dishonored due to insufficient funds, rather than a deliberate stop payment for a valid reason, such as prior payment.

    Checkmate: When a ‘Stop Payment’ Order Saves the Day

    The case revolves around Eliza T. Tan, Vice-President of Hometown Development, Inc. (HDI), and Fidel M. Francisco, Jr., president of F.M. Francisco & Associates (FMF). FMF was contracted by HDI for land development at South Garden Homes. A dispute arose when a check issued by Tan to Francisco was dishonored. The central legal question is whether Tan violated B.P. 22 when she issued a stop payment order on the check, despite having a credit line with the bank that could have covered the amount.

    B.P. 22, Section 1 outlines the elements of the offense. To secure a conviction, the prosecution must prove that the accused issued a check, that the check was for value, that the accused knew at the time of issue that they did not have sufficient funds or credit with the bank to cover the check, and that the check was subsequently dishonored for insufficiency of funds or credit, or would have been dishonored for the same reason had the drawer not ordered the bank to stop payment. These elements are critical in determining liability under the law.

    The elements of the offense defined and penalized in Section 1 of Batas Pambansa Blg. 22 are:
    “1. That a person makes or draws and issues any check.
    “2. That the check is made or drawn and issued to apply on account or for value.
    “3. That 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 payment of such check in full upon its presentment.
    “4. That 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.”

    The Court found that the prosecution failed to establish the third and fourth elements of the offense beyond a reasonable doubt. The bank’s representative testified that Tan’s account was funded at the time the check was presented, due to a credit line of P25 million. Moreover, even without the credit line, the deposits, once cleared, would have covered the check. The check was marked “Payment Stopped-Funded” and “DAUD” (drawn against uncollected deposits). The Court emphasized that a stop payment order, coupled with sufficient funding or a credit line, does not automatically result in a B.P. 22 violation.

    The Supreme Court has previously ruled on similar matters, underscoring the necessity of proving insufficient funds as the primary reason for dishonor. In Gutierrez v. Palattao, the court stated that a check must be actually issued without sufficient funds and dishonored due to such insufficiency to constitute a violation of B.P. 22. This ruling is consistent with the principle that the law aims to penalize those who issue checks knowing they lack the means to honor them, not those who, for legitimate reasons, halt payment on an otherwise valid check.

    Furthermore, the Court acknowledged Tan’s valid reason for requesting the stop payment: she claimed the account had already been settled in cash. This highlights the importance of considering the circumstances surrounding the issuance and subsequent dishonor of a check. If a drawer has a legitimate reason to stop payment, and the account is otherwise funded, a B.P. 22 conviction is not warranted. The Court effectively distinguishes between a check issued with the intent to defraud and a check where payment is stopped due to a separate, valid transaction.

    This decision clarifies the scope of B.P. 22 and protects individuals from unwarranted prosecution. It emphasizes that the prosecution must prove beyond reasonable doubt that the check was dishonored due to insufficient funds, not merely because of a stop payment order. It also provides a defense for individuals who have a valid reason for stopping payment on a check, especially when their account is adequately funded. This ruling aligns with the intent of the law, which is to penalize fraudulent acts rather than legitimate business practices.

    Moreover, this case has significant implications for businesses and individuals who rely on credit lines. It affirms that a credit line can be considered when determining whether an account is sufficiently funded for the purposes of B.P. 22. This provides businesses with a degree of financial flexibility, as they can utilize their credit lines to cover checks issued, even if their immediate cash balance is insufficient. However, it is crucial for businesses to maintain accurate records and ensure that they can cover their obligations through their credit lines when checks are presented for payment.

    In summary, the Eliza T. Tan v. People case provides crucial guidance on the application of B.P. 22, particularly in situations involving stop payment orders and credit lines. It reinforces the principle that the prosecution must prove beyond a reasonable doubt that the check was dishonored due to insufficient funds, and that a valid reason for stopping payment can serve as a defense. This decision protects individuals and businesses from unjust prosecution and promotes fairness in commercial transactions. It underscores the judiciary’s role in interpreting and applying laws in a manner that upholds justice and equity.

    FAQs

    What was the key issue in this case? The central issue was whether Eliza T. Tan violated B.P. 22 when she issued a stop payment order on a check, despite having a credit line that could have covered the amount. The court had to determine if the check was dishonored due to insufficient funds.
    What is Batas Pambansa Blg. 22 (B.P. 22)? B.P. 22, also known as the Bouncing Checks Law, penalizes the issuance of checks without sufficient funds or credit with the bank to cover the check upon presentment. The law aims to prevent the proliferation of worthless checks.
    What are the elements of a B.P. 22 violation? The elements are: (1) issuing a check, (2) for value, (3) knowing there are insufficient funds, and (4) the check is dishonored due to insufficient funds or a stop payment order without valid reason. All these elements must be proven beyond reasonable doubt.
    Why was Eliza T. Tan acquitted in this case? Tan was acquitted because the prosecution failed to prove that the check was dishonored due to insufficient funds. The bank’s representative testified that Tan had a credit line that could have covered the check, and she had a valid reason for stopping payment.
    What does “Payment Stopped-Funded” mean on a check? “Payment Stopped-Funded” indicates that the drawer requested the bank to stop payment on the check, but the account had sufficient funds or a credit line to cover the amount. This is different from a check being dishonored due to insufficient funds.
    Can a credit line be considered as sufficient funds under B.P. 22? Yes, the court acknowledged that a credit line can be considered when determining whether an account is sufficiently funded for the purposes of B.P. 22. This provides businesses with financial flexibility.
    What is the significance of having a valid reason for stopping payment on a check? Having a valid reason for stopping payment, such as prior payment in cash, can serve as a defense against a B.P. 22 charge. It indicates that the drawer did not intend to defraud the payee.
    What is the DAUD meaning stamped on the check? DAUD means Drawn Against Uncollected Deposits. Even with uncollected deposits, the bank may honor the check at its discretion in favor of favored clients, in which case there would be no violation of B.P. 22.

    The Eliza T. Tan v. People case serves as a reminder of the importance of carefully evaluating all the elements of a B.P. 22 violation before pursuing criminal charges. It also highlights the significance of having a valid reason for stopping payment on a check and the role of credit lines in determining the sufficiency of funds. This decision provides valuable guidance for businesses and individuals in navigating the complexities of commercial transactions and avoiding potential legal pitfalls.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Eliza T. Tan, vs. People of the Philippines, G.R. No. 141466, January 19, 2001

  • Bouncing Checks and Estafa: Proving Deceit in Financial Transactions

    In People v. Dinglasan, the Supreme Court clarified the elements needed to prove estafa (swindling) involving postdated checks under Article 315(2)(d) of the Revised Penal Code. The Court emphasized that the date of the transaction for which the check was issued is a material element of the offense and must be accurately alleged and proven. The ruling underscores the importance of establishing deceit beyond reasonable doubt, particularly the connection between the issuance of the check and the underlying obligation. This ensures that individuals are not unjustly convicted based solely on dishonored checks without proof of fraudulent intent at the time of the transaction.

    When a Bad Check Doesn’t Always Mean Fraud: Unpacking the Dinglasan Case

    This case revolves around Alexander Dinglasan, who was accused of estafa for issuing three postdated checks to Charles Q. Sia in payment for tires purchased for his bus firm, Alexander Transport. When the checks bounced due to insufficient funds, Sia filed a criminal complaint. The trial court found Dinglasan guilty, but Dinglasan appealed, arguing that there was no deceit or fraud, and that the poor quality of the tires led to his business’s bankruptcy. The Supreme Court had to determine whether Dinglasan’s actions constituted estafa, specifically focusing on whether the element of deceit was sufficiently proven.

    The Supreme Court noted a critical discrepancy: the information filed by the prosecution contained inaccuracies regarding the dates of the transactions for two of the three checks. The Court emphasized that under Section 11, Rule 110 of the 2000 Revised Rules of Criminal Procedure, the date of the offense must be accurately alleged if it is a material ingredient of the offense. Since estafa under Article 315 (2)(d) requires that the check be issued in payment of an obligation contracted at the time the check was issued, the date of the transaction is indeed a material ingredient. The Court stated:

    The first element of the offense requires that the dishonored check must have been postdated or issued at the time the obligation was contracted. In other words, the date the obligation was entered into, being the very date the check was issued or postdated, is a material ingredient of the offense. Hence, not only must said date be specifically and particularly alleged in the information, it must be proved as alleged.

    Because the prosecution failed to accurately allege and prove the dates of the transactions for two of the checks, the Court acquitted Dinglasan on those counts. However, regarding the third check, where the date of the transaction was correctly stated, the Court proceeded to examine whether the elements of estafa were met. The elements of estafa under Article 315 (2)(d) are:

    1. Postdating or issuing a check in payment of an obligation contracted at the time the check was issued;
    2. Lack of sufficient funds to cover the check;
    3. Knowledge on the part of the offender of such circumstances; and
    4. Damage to the complainant.

    The Court found that Dinglasan admitted his failure to cover the amount of the check within three days from receiving notice of dishonor. Article 315 (2)(d) states that:

    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.

    Dinglasan argued that his failure to make good on the check was due to business losses caused by the poor quality of the tires. However, the Court found that Dinglasan failed to rebut the prima facie presumption of deceit. The Court distinguished this case from People vs. Singson, where the accused was acquitted because the circumstances negated bad faith. In Singson, the accused promptly offered to replace the dishonored checks, made partial payments, and the complainant knew of the insufficient funds. The Supreme Court outlined the differences, noting that in this case Dinglasan avoided meeting with the complainant, never advised of the insufficient funds, and made no effort to settle the account.

    The Court modified the trial court’s decision, finding Dinglasan guilty of one count of estafa. The penalty was adjusted to an indeterminate sentence, considering the value of the check and the provisions of P.D. No. 818, which amended the Revised Penal Code regarding estafa committed by means of bouncing checks. The Court emphasized that the original sentence imposed by the trial court was erroneous, as it incorrectly applied the penalty of reclusion perpetua.

    FAQs

    What is estafa under Article 315(2)(d) of the Revised Penal Code? Estafa under this article involves defrauding another by postdating a check or issuing a check in payment of an obligation when the offender has insufficient funds, leading to damage to the complainant.
    What are the essential elements to prove estafa involving bouncing checks? The elements include: issuing a check for an existing obligation, insufficient funds in the bank, the issuer’s knowledge of the insufficiency, and resulting damage to the complainant.
    Why were some of the estafa charges against Dinglasan dismissed? The charges were dismissed because the prosecution failed to accurately state the dates of the transactions for which the checks were issued, which is a material element of the offense.
    What is the significance of the “date of the transaction” in estafa cases involving checks? The date is crucial because the check must be issued in payment of an obligation contracted precisely at that time. Discrepancies between the alleged date and the actual date can invalidate the charge.
    What is the effect of failing to cover a dishonored check within three days of notice? Failure to deposit sufficient funds within three days of notice creates a prima facie presumption of deceit, which the accused must rebut to avoid conviction.
    How did the Supreme Court distinguish this case from People vs. Singson? Unlike Singson, where the accused showed good faith by offering to replace the checks and making partial payments, Dinglasan avoided contact and made no attempts to settle his debt.
    What penalty was imposed on Dinglasan after the Supreme Court’s review? The Court imposed an indeterminate penalty of 6 years and 1 day of prision mayor as minimum to 20 years of reclusion temporal as maximum, along with an order to pay P26,400.00 as actual damages.
    What is the relevance of Presidential Decree No. 818 to this case? P.D. No. 818 amended Article 315 of the Revised Penal Code, increasing the penalties for estafa committed through bouncing checks, and was used to determine the appropriate penalty for Dinglasan.

    In conclusion, People v. Dinglasan serves as a reminder of the stringent requirements for proving estafa in cases involving bouncing checks. The prosecution must demonstrate not only the issuance of a dishonored check and the resulting damage, but also the element of deceit at the time of the transaction. This case highlights the importance of accurately alleging and proving all the elements of the offense to ensure a just outcome.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: People v. Dinglasan, G.R. No. 133645, September 17, 2002

  • Bouncing Checks and the Breadth of B.P. 22: Understanding ‘For Value’ in Philippine Law

    In the case of Miraflor M. San Pedro v. People of the Philippines, the Supreme Court affirmed that issuing a check as evidence of debt, even if not intended for immediate payment, falls under the purview of Batas Pambansa Blg. 22 (B.P. 22), also known as the Bouncing Checks Law. The Court clarified that the law punishes the act of issuing a worthless check, regardless of the purpose behind its issuance or any conditions attached to it. This means that individuals who issue checks that subsequently bounce due to insufficient funds can be held liable under B.P. 22, reinforcing the importance of ensuring sufficient funds when issuing checks for any purpose. Ultimately, the ruling highlights the strict liability imposed by B.P. 22 and the need for individuals to exercise caution when issuing checks.

    Accommodation or Obligation: When Does a Check Trigger B.P. 22 Liability?

    The case revolves around Miraflor San Pedro, who was accused of violating B.P. 22 for issuing a bouncing check to Evelyn Odra. The prosecution argued that the check was issued as payment for a debt, while San Pedro claimed it was merely an accommodation to help Odra show her sister that she had accounts receivable. The Regional Trial Court found San Pedro guilty, a decision affirmed by the Court of Appeals. The central legal question is whether the check was issued “to apply on account or for value,” an essential element for a B.P. 22 violation. San Pedro appealed to the Supreme Court, insisting that the check was not for value but merely a favor to Odra.

    The Supreme Court, however, found San Pedro’s arguments unconvincing. The Court emphasized that San Pedro’s own testimony indicated she owed money to Odra, although she claimed to have settled the account. Crucially, San Pedro failed to present any receipts or concrete evidence to support her claim of payment. This lack of evidence weakened her defense. Building on this, the Court noted the absence of a special relationship between San Pedro and Odra that would justify issuing a check without any consideration. The inconsistencies in San Pedro’s testimony further undermined her credibility.

    The Court then addressed the core legal principle. It reiterated that a check issued as evidence of debt, even if not intended for immediate payment, still falls under the scope of B.P. 22. The Court quoted Section 1 of B.P. 22, which explicitly penalizes anyone who issues a check “to apply for an account or for value” knowing they lack sufficient funds.

    any person who makes or draws and issues any check to apply for an account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank x x x which check is subsequently dishonored x x x 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.

    This provision makes it clear that the intent behind issuing the check is irrelevant; the mere act of issuing a bouncing check is malum prohibitum. This means that the act is wrong because it is prohibited by law, regardless of whether the issuer intended to cause harm. Moreover, the Supreme Court stated that B.P. 22 does not distinguish between checks issued for payment and those issued merely as a guarantee.

    The Court cited several precedents to support its ruling. It referenced Dico vs. CA, which cited Cruz vs. CA, emphasizing the broad application of B.P. 22 to checks issued for value. It also cited Llamado vs. CA to underscore that the issuance of a worthless check is malum prohibitum. These cases reinforce the principle that the law focuses on the act of issuing a bouncing check, not the underlying transaction.

    Furthermore, the Court acknowledged previous rulings, such as Magno vs. CA and Idos vs. CA, which held that B.P. 22 does not apply if the checks were not issued “to apply on account or for value.” However, in San Pedro’s case, the Court found that the check was indeed issued to cover a debt, thus satisfying this requirement. This distinction is crucial because it highlights the importance of establishing that the check was issued for some form of consideration or obligation.

    Ultimately, the Supreme Court affirmed San Pedro’s guilt but modified the penalty. Citing Administrative Circular No. 12-2000, the Court opted to impose a fine instead of imprisonment. The Court reasoned that a fine of P200,000 would adequately serve the ends of criminal justice, preventing unnecessary deprivation of personal liberty and economic usefulness. This decision aligns with the principles established in Vaca vs. Court of Appeals and Lim vs. People, which favor fines over imprisonment in certain B.P. 22 cases.

    FAQs

    What is B.P. 22? B.P. 22, or the Bouncing Checks Law, is a Philippine law that penalizes the issuance of checks without sufficient funds or credit in the bank. It aims to maintain confidence in the banking system and deter the practice of issuing worthless checks.
    What does it mean for a check to be issued “for value”? A check is issued “for value” when it is given in exchange for something of economic worth, such as goods, services, or the satisfaction of a debt. This element is crucial for establishing liability under B.P. 22, as the law requires that the check be issued for some form of consideration.
    Can a check issued as security or guarantee still violate B.P. 22? Yes, according to this ruling, a check issued as evidence of debt or as a guarantee can still lead to a B.P. 22 violation if it bounces due to insufficient funds. The law does not distinguish between checks issued for payment and those issued as security, focusing instead on the act of issuing a worthless check.
    What is malum prohibitum? Malum prohibitum refers to an act that is wrong simply because it is prohibited by law, regardless of whether it is inherently immoral. In the context of B.P. 22, the issuance of a bouncing check is considered malum prohibitum, meaning the act itself is unlawful, regardless of the issuer’s intent.
    What is the penalty for violating B.P. 22? The penalty for violating B.P. 22 can include imprisonment for not less than 30 days but not more than one year, a fine of not less than but not more than double the amount of the check (not exceeding P200,000), or both. However, courts may opt to impose only a fine, especially for first-time offenders.
    What evidence can be used to defend against a B.P. 22 charge? Evidence such as receipts of payment, bank statements showing sufficient funds, or proof that the check was not issued for value can be used as defenses. However, the burden of proof lies with the accused to demonstrate that they did not violate the law.
    Does intent matter in B.P. 22 cases? While the intent to defraud is not a necessary element for conviction under B.P. 22, the knowledge that there were insufficient funds at the time of issuing the check is crucial. The prosecution must prove that the issuer knew the check would bounce.
    What is Administrative Circular No. 12-2000? Administrative Circular No. 12-2000 is a Supreme Court issuance that provides guidelines for lower courts in imposing penalties for B.P. 22 violations. It suggests that courts may consider imposing a fine instead of imprisonment, especially if it is the offender’s first offense and there are mitigating circumstances.

    The San Pedro v. People case reinforces the strict liability imposed by B.P. 22, emphasizing that individuals must exercise caution when issuing checks, regardless of the purpose. The decision serves as a reminder that the issuance of a bouncing check carries legal consequences, and individuals must ensure they have sufficient funds to cover the checks they issue. This ruling, however, also highlights the court’s discretion to impose fines rather than imprisonment, offering a more lenient approach in certain circumstances.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: MIRAFLOR M. SAN PEDRO VS. THE PEOPLE OF THE PHILIPPINES, G.R. No. 133297, August 15, 2002

  • Bouncing Checks and Estafa: Establishing Fraud Through Issuance of Worthless Checks

    The Supreme Court held that Manuel Nagrampa was guilty of estafa and violations of the Bouncing Checks Law (B.P. Blg. 22) for issuing checks against a closed account to purchase equipment. This decision underscores that issuing checks with the knowledge of insufficient funds or a closed account, leading to damage to the payee, constitutes both a violation of B.P. Blg. 22 and estafa, reinforcing the importance of ensuring the validity of checks issued for payment.

    From Backhoe Purchase to Legal Showdown: When Does a Bounced Check Mean Fraud?

    This case revolves around the legal culpability of Manuel Nagrampa, who was found guilty of estafa and violations of Batas Pambansa Blg. 22, commonly known as the Bouncing Checks Law. The charges stemmed from checks he issued to Fedcor Trading Corporation for the purchase of a Yutani Poclain Backhoe Excavator Equipment. The central legal question is whether Nagrampa’s actions—issuing checks knowing his account was closed—constituted sufficient grounds for conviction under both estafa and B.P. Blg. 22.

    The facts of the case indicate that on July 28, 1989, Nagrampa purchased a backhoe from Fedcor, paying a down payment of P50,000 in cash and issuing two postdated checks for the balance of P150,000. These checks, numbered 473477 and 473478, were drawn against his account with Security Bank and Trust Company. However, upon presentation for payment on February 22, 1990, the checks were dishonored because Nagrampa’s account had been closed since May 1985. This led Fedcor to file criminal charges against Nagrampa for estafa and violation of B.P. Blg. 22.

    The legal framework for B.P. Blg. 22 is outlined in Section 1 of the law, which states:

    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.

    This provision punishes two distinct acts: issuing a check knowing there are insufficient funds at the time of issuance, and failing to maintain sufficient funds to cover the check within ninety days of its date. The Supreme Court clarified that Nagrampa was charged with the former, issuing a check with the knowledge that his account had been closed long before.

    The elements of the offense under B.P. Blg. 22 are:

    1. Making, drawing, and issuing a check for account or value.
    2. Knowledge by the issuer that at the time of issue, there are insufficient funds.
    3. Subsequent dishonor of the check due to insufficient funds or credit.

    The Court noted that the prosecution successfully proved these elements. Nagrampa admitted to issuing the checks, and evidence showed that his account was closed years prior to the issuance. The fact that the checks were presented beyond the 90-day period was deemed inconsequential, as this period only affects the prima facie presumption of knowledge of insufficient funds, which the prosecution proved through other evidence.

    Regarding the charge of estafa, the elements under paragraph 2(d) of Article 315 of the Revised Penal Code are:

    1. Issuance of a check in payment of an obligation contracted at the time of issuance.
    2. Lack or insufficiency of funds to cover the check.
    3. Damage to the payee.

    The Supreme Court emphasized that the act of issuing the check must be the efficient cause of the defrauding, meaning the check was an inducement for the offended party to part with their money or property. In this case, Fedcor delivered the backhoe because Nagrampa paid a down payment and issued the postdated checks. The damage to Fedcor was the deprivation of their property, as the checks were ultimately worthless.

    Nagrampa’s defense was that the backhoe was defective and returned to Fedcor’s agent, Ronnie Bote, thus negating the element of damage. However, the Court found this claim unsubstantiated, as Nagrampa failed to present Bote as a witness or provide concrete evidence of the return. Furthermore, his admission of making partial payments to Fedcor during the pendency of the case implied an acknowledgment of guilt and an attempt to compromise.

    In its analysis, the Court also addressed the penalty imposed. While the trial court initially sentenced Nagrampa to imprisonment, he appealed for the retroactive application of rulings in Vaca v. Court of Appeals and Lim v. People, which suggested a fine as an alternative penalty for B.P. Blg. 22 violations. The Supreme Court rejected this plea, citing Administrative Circular No. 13-2001, which clarified that imprisonment remains a possible penalty, especially in cases where the offender demonstrates a lack of good faith or wanton bad faith. Given that Nagrampa issued checks from a long-closed account, the Court found no reason to deviate from the imprisonment penalty.

    Building on this, the Supreme Court highlighted that by appealing his conviction, Nagrampa opened the entire case for review, allowing the Court to correct any errors in the appealed judgment. Consequently, the Court adjusted the penalty for estafa, applying Presidential Decree No. 818 and the Indeterminate Sentence Law to impose a more appropriate sentence based on the amount defrauded.

    FAQs

    What were the charges against Manuel Nagrampa? Nagrampa was charged with estafa and two counts of violating the Bouncing Checks Law (B.P. Blg. 22) for issuing checks against a closed account.
    What did Nagrampa purchase from Fedcor Trading Corporation? Nagrampa purchased a Yutani Poclain Backhoe Excavator Equipment from Fedcor, paying part in cash and the remainder with postdated checks.
    Why were the checks dishonored? The checks were dishonored because Nagrampa’s account with Security Bank and Trust Company had been closed since May 1985, years before the checks were issued.
    What are the elements of estafa related to issuing bouncing checks? The elements are: (1) issuing a check for an obligation, (2) lack of funds to cover the check, and (3) damage to the payee as a result.
    What is the significance of the 90-day period mentioned in B.P. Blg. 22? The 90-day period relates to the prima facie presumption of the issuer’s knowledge of insufficient funds; presenting the check after this period removes this presumption, but knowledge can still be proven otherwise.
    What was Nagrampa’s defense against the charges? Nagrampa claimed that the backhoe was defective and returned to Fedcor’s agent, thus there was no damage to Fedcor.
    Why did the Court reject Nagrampa’s defense? The Court rejected the defense due to lack of evidence, failure to present the alleged agent as a witness, and Nagrampa’s partial payments during the case, implying guilt.
    What was the final ruling of the Supreme Court? The Supreme Court affirmed Nagrampa’s conviction for estafa and violations of B.P. Blg. 22, modifying the penalty for estafa to an indeterminate sentence.

    In conclusion, the Supreme Court’s decision in this case clarifies the implications of issuing worthless checks, particularly when the issuer is aware of the insufficiency of funds or a closed account. It reinforces the legal responsibility of individuals to ensure the validity of checks they issue and serves as a reminder of the potential criminal consequences for failing to do so.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: MANUEL NAGRAMPA vs. PEOPLE OF THE PHILIPPINES, G.R. No. 146211, August 06, 2002

  • Bouncing Checks and Criminal Liability: Strict Enforcement of BP 22

    The Supreme Court affirmed that issuing a bouncing check, even if it’s meant as a form of debt or guarantee, can lead to criminal charges under Batas Pambansa (BP) Bilang 22. The Court underscored that the primary aim of BP 22 is to ensure the stability of checks as a substitute for currency. Celia M. Meriz was found guilty after issuing checks that were dishonored due to insufficient funds. The court held that the intent behind issuing the check doesn’t matter; what counts is the act of issuing a check that bounces, which is a violation of the law.

    When Business Deals Lead to Bouncing Checks: Can Intent Save You from Liability?

    Celia M. Meriz, a garment manufacturer, found herself in legal trouble after her business, Hi-Marc Needlecraft, faced financial difficulties. She had taken out loans from Amelia Santos and Summit Financing Corporation, issuing several Pilipinas Bank checks to Santos as part of their transactions. However, these checks bounced due to insufficient funds, leading to criminal charges under Batas Pambansa Bilang 22, also known as the Bouncing Checks Law. The central legal question was whether Meriz’s intent, or lack thereof to defraud, could excuse her from criminal liability given the circumstances of the bouncing checks.

    The facts revealed that after the checks were dishonored, Santos sent a telegram and a demand letter to Meriz, urging her to settle her account. Meriz acknowledged the debt and requested more time to pay, but she failed to meet her obligations. Consequently, four informations were filed against her in the Regional Trial Court of Makati City, each corresponding to a dishonored check. At trial, Meriz pleaded not guilty, arguing that there was a lack of consideration for the checks and that she didn’t receive proper notice of dishonor.

    The trial court, however, convicted Meriz on all counts, sentencing her to imprisonment and ordering her to indemnify Santos for the amount of each check. On appeal, the Court of Appeals affirmed the trial court’s decision. The Court of Appeals found that all the elements of BP 22 were present: Meriz issued the checks, knew she had insufficient funds, and the checks were subsequently dishonored. Undeterred, Meriz elevated the case to the Supreme Court, reiterating her arguments about the lack of consideration and improper notice.

    The Supreme Court began its analysis by emphasizing a fundamental principle of statutory construction: penal statutes should be strictly construed against the state and liberally in favor of the accused. However, the Court clarified that this principle should not be used to shield an accused from criminal liability when the law has clearly been violated. The Court then outlined the essential elements of the offense penalized under BP 22, which are:

    • The making, drawing, and issuance of any check to apply to account or for value;
    • 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
    • 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.

    The Court addressed Meriz’s argument about the lack of consideration by stating that the cause or reason for issuing the check is inconsequential in determining criminal culpability under BP 22. This means that whether the check was issued as payment for a debt, as a guarantee, or for any other reason, it is still subject to the provisions of the law. The Court quoted Cruz vs. Court of Appeals, 233 SCRA 301 saying that “a check issued as an evidence of debt, although not intended for encashment, has the same effect like any other check” and must thus be held to be “within the contemplation of BP 22.”

    The Supreme Court further clarified that BP 22’s primary intention is to maintain the stability and commercial value of checks as substitutes for currency. The Court articulated:

    BP 22 does not appear to concern itself with what might actually be envisioned by the parties, its primordial intention being to instead ensure the stability and commercial value of checks as being virtual substitutes for currency. It is a policy that can easily be eroded if one has yet to determine the reason for which checks are issued, or the terms and conditions for their issuance, before an appropriate application of the legislative enactment can be made. The gravamen of the offense under BP 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.

    This makes the offense one of malum prohibitum, meaning it is wrong because the law says so, regardless of intent. The critical question, therefore, is whether the law was violated by issuing a bad check. Furthermore, the element of “knowledge” of insufficient funds is presumed, as stated in Section 2 of BP 22:

    Sec. 2. Evidence of knowledge of insufficient funds. – The making, drawing and issuance of a check payment of which is refused by the drawee bank 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.

    To rebut this presumption, the issuer must pay the check amount within five banking days of receiving notice of dishonor. Failure to do so confirms the presumption of knowledge. Regarding the notice of dishonor, the Court noted that BP 22 does not prescribe specific contents for the notice, only that it be in writing.

    The Court affirmed the findings of the lower courts that Meriz had received a telegram and a demand letter, and that she had acknowledged her liability in a reply letter, requesting an extension to settle her account. Based on these findings, the Supreme Court upheld Meriz’s conviction but modified the sentence. Instead of imprisonment, the Court imposed a fine of P94,200.00 for each case, along with the order to indemnify Santos for the amounts of the dishonored checks. This decision underscores the strict liability imposed by BP 22 and the importance of ensuring sufficient funds when issuing checks.

    FAQs

    What is Batas Pambansa Bilang 22 (BP 22)? BP 22, also known as the Bouncing Checks Law, penalizes the making or issuing of a check with insufficient funds or credit, regardless of the intent behind it. Its purpose is to ensure the stability and commercial value of checks.
    What are the essential elements of violating BP 22? The essential elements include issuing a check for value, knowing there are insufficient funds at the time of issuance, and the subsequent dishonor of the check by the bank. Knowledge of insufficient funds is presumed if the check is dishonored and the issuer fails to pay within five banking days of notice.
    Does the reason for issuing the check matter under BP 22? No, the reason or consideration for issuing the check is inconsequential. Whether it’s for payment of debt, a guarantee, or any other reason, the issuer is still liable if the check bounces.
    What is the significance of a “notice of dishonor”? A notice of dishonor informs the issuer that the check has been dishonored due to insufficient funds. The issuer has five banking days from receiving this notice to pay the amount of the check and avoid criminal liability.
    What should be included in the notice of dishonor? The law only requires that the notice of dishonor be in writing. There are no specific contents prescribed by BP 22.
    What is “malum prohibitum” and how does it relate to BP 22? Malum prohibitum refers to acts that are wrong because they are prohibited by law, regardless of moral intent. BP 22 offenses fall under this category, meaning the act of issuing a bad check is punishable regardless of the issuer’s intent.
    What happens if the issuer pays the check within five days of notice? If the issuer pays the check amount or makes arrangements for payment within five banking days of receiving the notice of dishonor, the presumption of knowledge of insufficient funds is rebutted, and they may avoid criminal liability.
    What was the outcome of the Celia M. Meriz case? Celia M. Meriz was found guilty of violating BP 22. However, the Supreme Court modified the sentence from imprisonment to a fine of P94,200.00 for each case, along with the order to indemnify the complainant.

    The Meriz case serves as a reminder of the stringent enforcement of BP 22 and the importance of ensuring sufficient funds when issuing checks. The decision reinforces the law’s objective of maintaining the integrity of checks as a reliable form of payment in commercial transactions.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: CELIA M. MERIZ, VS. PEOPLE, G.R. No. 134498, November 13, 2001

  • Bouncing Checks: Liability Despite Alleged Accommodation

    The Supreme Court affirmed that issuing a bouncing check constitutes a violation of Batas Pambansa Blg. 22, regardless of the check’s purpose or underlying obligation. Alberto Lim’s conviction for twelve counts of violating the Bouncing Checks Law was upheld, emphasizing that the mere act of issuing a dishonored check is malum prohibitum. This means that even if the check was intended to cover another party’s debt, the issuer is still liable if the check bounces due to insufficient funds.

    Accommodation or Evasion: Who Pays When Checks Bounce?

    This case revolves around Alberto Lim’s appeal against his conviction for violating Batas Pambansa Blg. 22 (B.P. 22), also known as the Bouncing Checks Law. The charges stemmed from twelve checks he issued to Robert Lu that were subsequently dishonored due to an “Account Closed” status. Lim argued that these checks were meant to accommodate the debt of Sarangani Commercial, Inc., and that the debt had already been paid through other checks. The core legal question is whether Lim could be held liable for violating B.P. 22, despite his claim that the checks lacked valuable consideration because they were issued to cover a debt already settled by a third party.

    The Regional Trial Court of Quezon City found Lim guilty beyond reasonable doubt on all twelve counts, sentencing him to six months of imprisonment for each case and ordering him to pay Robert Lu the total amount of the checks, with interest. This decision was affirmed in toto by the Court of Appeals. The Supreme Court, in reviewing the case, had to determine whether the lower courts erred in their judgment, particularly concerning the element of valuable consideration and the applicability of leniency in sentencing.

    The elements of B.P. 22 are clearly defined: (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. The court noted that Lim admitted to issuing the checks and their subsequent dishonor. His defense hinged on the argument that the underlying obligation of Sarangani, Inc., which he supposedly accommodated, had already been paid.

    However, the Supreme Court gave weight to the factual findings of the trial court, which rejected Lim’s claim. The court pointed out significant discrepancies in Lim’s account. The checks issued by Sarangani, Inc., were dated and dishonored in September 1989, while Lim’s checks were dated November 1992. This timeline contradicted Lim’s claim that his checks were replacements for the earlier dishonored checks. Also, the total value of Lim’s checks far exceeded the original debt of Sarangani, Inc., raising doubts about his claim of mere accommodation.

    The Court cited the established rule that factual findings of lower courts are entitled to great weight and respect and will not be disturbed on appeal unless there is a clear showing that the trial court overlooked certain facts or circumstances that would substantially affect the disposition of the case. The Court found no such oversight. As stated in the case of American Home Assurance Co. v. Chua, 309 SCRA 250 [1999], appellate courts generally defer to the factual assessments made by trial courts due to their direct exposure to the evidence and witnesses.

    The Supreme Court emphasized that B.P. 22 punishes the issuance of a bouncing check, regardless of the purpose for which it was issued. The Court quoted Ibasco v. Court of Appeals, 261 SCRA 449 [1996], stating, “It is not the non-payment of an obligation which the law punishes, but the act of making and issuing a check that is dishonored upon presentment for payment.” This highlights the critical distinction between the debt itself and the act of issuing a check without sufficient funds. This distinction is crucial in understanding the scope and purpose of the Bouncing Checks Law.

    The Court also addressed Lim’s plea for leniency, arguing that the penalty of imprisonment should be replaced with a fine. Lim cited Administrative Circular No. 12-2000, which provides guidelines for the application of penalties under B.P. 22. However, the Court clarified that this circular does not remove imprisonment as an alternative penalty but merely establishes a rule of preference. It emphasized that the determination of whether to impose a fine alone rests solely upon the judge, considering the circumstances of the offense and the offender.

    In Lim’s case, the Court upheld the trial court’s decision to impose imprisonment, noting that he was not a first-time offender. He had previously been convicted of 50 counts of violating B.P. 22 and was placed on probation. The Court rejected Lim’s argument that these prior convictions should not be held against him, emphasizing that each act of drawing and issuing a bouncing check constitutes a separate violation of B.P. 22.

    The Supreme Court emphasized that malice or criminal intent is immaterial in statutory offenses or malum prohibitum. The Court cited a Circular of the Ministry of Justice dated 3 January 1982, as cited in Antonio L. Gregorio, Fundamentals of Criminal Law Review 843 (9th ed. 1997). The Court further emphasized the importance of B.P. 22 in safeguarding the integrity of financial transactions. As stated in Domingo Dico, Jr. v. Court of Appeals, supra note 14; Cruz v. Court of Appeals, 233 SCRA 301 [994], the nefarious practice of circulating unfunded checks can “very well pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest.”

    The Supreme Court’s decision reinforces the strict liability imposed by B.P. 22. It serves as a reminder to individuals and businesses to exercise caution when issuing checks and to ensure that they have sufficient funds to cover the amounts stated. The law does not distinguish between checks issued for direct obligations and those issued for accommodation purposes. The act of issuing a bouncing check, regardless of intent, is a violation of the law and carries significant consequences.

    FAQs

    What was the key issue in this case? The key issue was whether Alberto Lim could be held liable for violating the Bouncing Checks Law (B.P. 22), despite his claim that the checks he issued lacked valuable consideration because they were meant to cover a debt already settled by a third party.
    What is Batas Pambansa Blg. 22 (B.P. 22)? B.P. 22, also known as the Bouncing Checks Law, penalizes the act of issuing checks without sufficient funds or credit with the drawee bank, regardless of the underlying obligation or purpose of the check.
    What are the elements of B.P. 22? The elements of B.P. 22 are: (1) the making, drawing, and issuance of a check; (2) knowledge of insufficient funds at the time of issue; and (3) subsequent dishonor of the check by the bank due to insufficient funds or account closure.
    Did the court consider Lim’s claim that the checks lacked valuable consideration? The court rejected Lim’s claim, emphasizing that the issuance of a bouncing check is malum prohibitum, meaning it is prohibited by law regardless of the underlying intent or consideration. The purpose for which the check was issued is immaterial.
    Why did the court uphold the penalty of imprisonment? The court upheld the imprisonment penalty because Lim was a repeat offender, having been previously convicted of multiple violations of B.P. 22.
    What is the significance of Administrative Circular No. 12-2000? Administrative Circular No. 12-2000 provides guidelines for the application of penalties under B.P. 22, but it does not remove imprisonment as an alternative penalty. It establishes a preference for fines in cases involving good faith or clear mistake, but the judge has discretion to impose imprisonment.
    What is the meaning of malum prohibitum? Malum prohibitum refers to acts that are wrong because they are prohibited by law, regardless of whether they are inherently immoral. In the context of B.P. 22, it means that the act of issuing a bouncing check is punishable simply because the law prohibits it.
    What is the effect of this decision? The decision reinforces the strict liability imposed by B.P. 22, emphasizing the importance of exercising caution when issuing checks and ensuring sufficient funds to cover the amounts stated.

    In conclusion, the Supreme Court’s decision in Alberto Lim v. People underscores the importance of due diligence in financial transactions and the severe consequences of violating the Bouncing Checks Law. The ruling serves as a stern warning to individuals and businesses alike, highlighting the need for responsible check issuance and adherence to legal standards in commercial dealings.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Alberto Lim v. People, G.R. No. 143231, October 26, 2001

  • Bouncing Checks and Due Process: Actual Notice Required for Conviction

    The Supreme Court held that for a conviction under Batas Pambansa Blg. 22 (Bouncing Checks Law) to stand, the accused must have actual notice of the dishonor of their checks. This means the prosecution must prove the accused received a notice informing them their check was dishonored and providing an opportunity to make arrangements for payment. This ruling emphasizes the importance of due process, ensuring individuals are given a chance to rectify the situation before facing criminal charges, thus protecting the integrity of commercial transactions and banking practices.

    The Case of the Guarantor’s Bounced Checks: Was Due Process Violated?

    Jane Caras was found guilty of multiple counts of violating the Bouncing Checks Law after issuing several checks to Chu Yang T. Atienza, which were later dishonored due to a closed account. Caras claimed the checks were merely guarantees for gift checks and purchase orders, not intended for deposit, and that she never received notice of the dishonor. The central legal question revolved around whether the prosecution adequately proved that Caras received notice of the dishonor, a crucial element for establishing knowledge of insufficient funds—a prerequisite for conviction under B.P. 22.

    The Court of Appeals affirmed the trial court’s decision, but the Supreme Court reversed it, focusing on the lack of evidence proving Caras received notice of the dishonor of her checks. The essence of B.P. 22 lies in penalizing the issuance of a bouncing check, irrespective of its intended purpose. As stated in Llamado v. Court of Appeals:

    …to determine the reasons for which checks are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the stability and commercial value of checks as currency substitutes, and bring about havoc in trade and in banking communities.

    Despite the checks being issued as a guarantee, the crucial point was whether the elements of the offense were adequately proven, particularly the knowledge of insufficient funds. The law establishes a prima facie presumption of knowledge of insufficient funds when a check is dishonored if presented within 90 days of its issue. However, this presumption is contingent on the maker receiving notice of the dishonor and failing to cover the amount within five banking days. Without this notice, the presumption falters, shifting the burden to the prosecution to prove actual knowledge of insufficient funds.

    The court found a critical deficiency in the prosecution’s evidence: a failure to demonstrate that Caras received notice of the dishonor. While the prosecution presented demand letters, they lacked proof of receipt by Caras, such as acknowledgment receipts or return cards. The private complainant testified about hiring lawyers to send demand letters, but mere dispatch does not equate to receipt.

    The absence of this crucial evidence undermined the presumption of knowledge, which is a cornerstone of B.P. 22 violations. Testimony indicated that Caras was asked to pay the value of the checks, but it was unclear if this demand occurred before or after the checks were dishonored, a critical distinction. Moreover, the branch manager of PCI Bank, where Caras held her account, testified that the bank did not have a standard procedure of notifying customers about bounced checks, further weakening the prosecution’s case.

    The Supreme Court emphasized the importance of due process in B.P. 22 cases. Quoting Lao v. Court of Appeals, the Court highlighted that the law offers a chance to preempt criminal action by paying the check within five banking days of receiving notice of dishonor. Thus, the absence of notice deprives the accused of this opportunity. The court stated:

    The absence of a notice of dishonor necessarily deprives an accused an opportunity to preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of dishonor be actually served on petitioner. Petitioner has a right to demand – and the basic postulates of fairness require – that the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert prosecution under B.P. Blg. 22.

    The failure to prove Caras received notice of the dishonor violated her right to due process, leading to her acquittal. Despite the acquittal, the Supreme Court clarified that this decision does not absolve Caras of any potential civil liabilities arising from her transactions. She admitted to issuing the checks, and while criminal liability was not established due to insufficient proof, the civil aspect of the case remained open for determination.

    This case underscores the necessity of stringent evidentiary standards in prosecuting B.P. 22 violations, particularly concerning the element of notice. It reaffirms that due process requires actual notification, ensuring fairness and the opportunity for individuals to rectify situations before facing criminal penalties. This ruling safeguards against potential abuses of the Bouncing Checks Law, reinforcing the importance of upholding constitutional rights even in commercial contexts.

    FAQs

    What was the key issue in this case? The key issue was whether the prosecution adequately proved that Jane Caras received notice of the dishonor of her checks, an essential element for conviction under the Bouncing Checks Law. The Supreme Court emphasized that actual notice must be proven to establish knowledge of insufficient funds.
    What is Batas Pambansa Blg. 22 (B.P. 22)? B.P. 22, also known as the Bouncing Checks Law, penalizes the act of issuing checks without sufficient funds or credit in the bank, leading to their dishonor. The law aims to promote confidence in the banking system and the use of checks as a reliable means of payment.
    What are the elements of a B.P. 22 violation? The elements are: (1) issuing a check for value; (2) knowing at the time of issuance that there were insufficient funds; and (3) the check being subsequently dishonored due to insufficient funds or a closed account. Crucially, the issuer must also receive notice of the dishonor.
    What does “prima facie evidence” mean in this context? “Prima facie evidence” means that if the prosecution proves the check was dishonored within 90 days, it is presumed the issuer knew of the insufficient funds. However, this presumption can be challenged if the issuer pays or arranges payment within five days of receiving notice of dishonor.
    Why is notice of dishonor so important? Notice of dishonor is critical because it gives the issuer a chance to make good on the check within five banking days, avoiding criminal prosecution. It ensures fairness and due process, allowing the issuer to rectify the situation before facing legal consequences.
    What kind of evidence is needed to prove notice was received? Evidence of notice can include acknowledgment receipts, return cards, or any proof demonstrating the issuer actually received the demand letter or notification. The prosecution must present concrete evidence, not just assume notice was received.
    Does this ruling mean Jane Caras is free from all obligations? No, the Supreme Court clarified that while Caras was acquitted of criminal charges under B.P. 22, this decision does not preclude any civil liabilities she may have incurred. The private complainant can still pursue civil action to recover the amounts owed.
    What is the practical implication of this ruling? This ruling underscores the importance of proper documentation and proof of notice in B.P. 22 cases. It highlights the need for creditors to ensure that issuers of dishonored checks are properly notified to uphold due process and fairness.

    In conclusion, the Caras case serves as a reminder of the crucial role of due process in B.P. 22 violations. The Supreme Court’s decision reaffirms the necessity of proving actual notice to the issuer of a dishonored check, safeguarding individual rights and ensuring fairness in commercial transactions.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: JANE CARAS Y SOLITARIO, VS. HON. COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, G.R. No. 129900, October 02, 2001