Tag: transitory crime

Bouncing Checks and Jurisdiction: Where Does the Crime Really Happen?

The Supreme Court, in Morillo v. People, clarifies that a case for violation of Batas Pambansa Blg. 22 (BP 22), or the Bouncing Checks Law, can be filed not only where the check was issued or delivered but also where the check was deposited or presented for encashment. This ruling confirms that these offenses are considered ‘transitory’ or ‘continuing crimes,’ giving the payee more options for legal recourse. This ensures that individuals or businesses receiving dishonored checks have a clearer path to seek justice, reinforcing the reliability of checks in commercial transactions.

Dishonored Promise: Can Makati Courts Judge a Pampanga Check?

Armilyn Morillo, a supplier of construction materials, found herself in a legal battle after Richard Natividad and his partners, operating as RB Custodio Construction, issued post-dated checks that bounced. Morillo, doing business as Amasea General Merchandise and Construction Supplies, agreed to supply construction materials to Natividad’s firm for a project inside the Subic Freeport Zone. The payment arrangement stipulated that 20% would be paid shortly after the first delivery, with the remaining 80% due within 35 days after the final delivery, all to be settled through post-dated checks.

After fulfilling her part of the agreement and delivering materials worth P500,054.00, Morillo received a partial cash payment of P20,000.00 and two post-dated checks for P393,000.00 and P87,054.00. These checks, drawn from Metrobank’s Pampanga branch, were dishonored upon presentment due to a closed account. Despite repeated demands for payment, Natividad failed to honor his obligations, leading Morillo to file a criminal complaint in Makati City, where she deposited the checks. This decision sparked a jurisdictional debate, questioning whether the Makati court had the authority to hear a case involving checks issued and dishonored outside its territory.

The Metropolitan Trial Court (MeTC) of Makati City initially found Natividad guilty, a decision affirmed by the Regional Trial Court (RTC). However, the Court of Appeals (CA) reversed these rulings, asserting that Makati City was an improper venue since the checks were issued in Pampanga and dishonored by a Pampanga bank. The appellate court highlighted that the act of depositing the check in Makati was not an essential element of BP 22, and therefore, did not confer jurisdiction to the Makati MeTC. This ruling prompted Morillo to elevate the case to the Supreme Court, challenging the CA’s interpretation of venue and jurisdiction in BP 22 cases.

The central legal question before the Supreme Court was whether the MeTC of Makati City had jurisdiction over the BP 22 case, considering that the checks were issued in Pampanga but deposited in Makati. This involved a careful examination of the nature of BP 22 violations as continuing offenses and the implications for determining the proper venue. The Supreme Court emphasized that BP 22 violations are considered transitory or continuing crimes. This means that the offense involves acts occurring in multiple locations, giving jurisdiction to any court where a material element of the crime took place.

To understand the Supreme Court’s reasoning, it’s important to consider the elements of a BP 22 violation. These elements typically include the drawing, issuing, or delivery of a check, the subsequent dishonor of the check by the drawee bank, and the issuer’s knowledge of insufficient funds at the time of issuance. The High Court found that the appellate court erred in isolating the location of the check’s issuance as the sole determinant of jurisdiction. The Supreme Court underscored that the presentation of the check for encashment is a crucial element of the offense.

In this case, the check was deposited in Makati, thus making Makati an appropriate venue for the case. The Supreme Court relied on the precedent set in Nieva, Jr. v. Court of Appeals, which established that the place where a check is deposited and presented for encashment confers jurisdiction to the local court. In that case, the court held:

As to petitioner’s contention that the Regional Trial Court of Pampanga has no jurisdiction to try the cases charged herein as none of the essential elements thereof took place in Pampanga, suffice it to say that such contention has no basis. The evidence discloses that the check was deposited and/or presented for encashment with the Angeles City Branch of the Bank of the Philippine Islands. This fact clearly confers jurisdiction upon the Regional Trial Court of Pampanga over the crimes of which petitioner is charged.

The Supreme Court differentiated the case from Rigor v. People, which the OSG cited, explaining that Rigor did not explicitly exclude the place of deposit as a valid venue for BP 22 cases. In Rigor, the primary issue was whether the prosecution had adequately proven that the check was issued, delivered, dishonored, or that knowledge of insufficiency of funds occurred in San Juan. The facts of the Rigor case are distinguishable from the instant case.

Moreover, the Supreme Court also addressed procedural issues raised concerning the private complainant’s standing to file the petition in the absence of the Solicitor General’s (OSG) participation. Generally, the OSG represents the State in criminal proceedings, especially in appeals. However, the Court acknowledged exceptions, particularly when the offended party questions the civil aspect of the decision or when there is a denial of due process. The Supreme Court emphasized that since the CA’s dismissal was based on a lack of jurisdiction rather than an acquittal, it did not constitute a judgment on the merits of the case. This technicality allowed the Court to consider Morillo’s petition, especially given that the OSG took a position contrary to her interests.

In light of the procedural and jurisdictional considerations, the Supreme Court reinstated the decisions of the MeTC and RTC, affirming Natividad’s conviction. The Court held that the MeTC of Makati correctly exercised jurisdiction over the case because the check was deposited and presented for encashment within its territorial bounds. This decision underscores the principle that BP 22 cases are transitory, and jurisdiction lies in any court where a material element of the offense occurred. The Supreme Court’s decision in Morillo v. People offers a pragmatic approach to determining jurisdiction in BP 22 cases, affirming that these offenses are transitory. This ensures that the courts where the checks are deposited have jurisdiction to try the case.

This approach contrasts with a stricter interpretation that would limit jurisdiction solely to the place of issuance. The Supreme Court’s ruling provides clarity and strengthens the enforceability of BP 22, reinforcing the reliability of checks in commercial transactions. It ensures that individuals and businesses have a viable legal recourse when faced with dishonored checks, protecting their financial interests and promoting confidence in the banking system. By allowing cases to be filed where the check was deposited, the court also balanced the scales of justice, providing an avenue for recourse to private individuals who would otherwise be left without a remedy.

The decision also reinforces the principle that procedural rules should not be applied so rigidly as to defeat substantial justice. The Supreme Court recognized the specific circumstances of the case, where Morillo had fulfilled her contractual obligations and was left without payment due to the dishonored checks. A strict application of procedural rules would have further delayed the resolution of her claim, leading to a potential miscarriage of justice. Therefore, the court prioritized the attainment of substantial justice over strict adherence to procedural technicalities.

The Supreme Court clarified that the essence of BP 22 lies not only in the issuance of a bad check but also in its presentation for payment and subsequent dishonor. This perspective ensures that the legal system adapts to the realities of commercial transactions, where checks often traverse different jurisdictions before being presented for payment. The Supreme Court’s ruling in Morillo v. People serves as a reminder that the judiciary must balance the need for procedural regularity with the overarching goal of achieving fair and equitable outcomes.

Furthermore, this decision provides a degree of certainty to commercial transactions and clarifies the rights and obligations of parties involved in check payments. By establishing clear jurisdictional guidelines, the Supreme Court reduces ambiguity and promotes confidence in the use of checks as a reliable medium of exchange. This ruling also emphasizes the importance of due diligence and responsible financial management, reminding individuals and businesses to honor their commitments and avoid issuing checks without sufficient funds.

FAQs

*What was the central issue in Morillo v. People?*	The key issue was whether the Metropolitan Trial Court (MeTC) of Makati City had jurisdiction over a BP 22 case when the dishonored checks were issued in Pampanga but deposited in Makati.
What is Batas Pambansa Blg. 22 (BP 22)?	BP 22, also known as the Bouncing Checks Law, penalizes the making or drawing and issuance of a check without sufficient funds to cover it upon presentment.
What does it mean for a crime to be ‘transitory’ or ‘continuing’?	A transitory or continuing crime involves acts occurring in multiple locations, allowing jurisdiction in any court where a material element of the offense took place.
Where can a BP 22 case be filed based on this ruling?	A BP 22 case can be filed where the check was drawn, issued, delivered, or dishonored, as well as where the check was deposited or presented for encashment.
Why did the Court of Appeals initially dismiss the case?	The Court of Appeals dismissed the case, reasoning that Makati City was an improper venue because the checks were issued and dishonored in Pampanga, and depositing the check in Makati was not a key element of the crime.
How did the Supreme Court justify its decision to reinstate the MeTC ruling?	The Supreme Court held that depositing the check in Makati was a material element of the offense, thus conferring jurisdiction to the Makati MeTC, and also emphasized that BP 22 violations are transitory crimes.
*What was the significance of the Nieva, Jr. v. Court of Appeals* case?**	Nieva, Jr. established a precedent that the place where a check is deposited and presented for encashment confers jurisdiction to the local court, reinforcing the Supreme Court’s decision in Morillo.
Did the Supreme Court address any procedural issues in this case?	Yes, the Supreme Court addressed the issue of the private complainant’s standing to file the petition, especially when the OSG took a contrary position.
How does this ruling impact commercial transactions?	This ruling provides certainty and strengthens the enforceability of BP 22, promoting confidence in the use of checks as a reliable medium of exchange.
Why was it important for the Supreme Court to give due course to the petition despite the procedural issues?	Because the CA had dismissed the case on an erroneous ground thus defeating the end of substantial justice, it was crucial for the Supreme Court to give due course to the petition and make a ruling on the merits.

In conclusion, the Supreme Court’s decision in Morillo v. People clarifies and strengthens the jurisdictional framework for BP 22 cases, providing a more accessible path to justice for those affected by dishonored checks. This ruling underscores the importance of balancing procedural rules with the pursuit of substantial justice, ensuring that individuals and businesses have effective recourse when faced with financial losses due to bouncing checks.

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: Armilyn Morillo v. People of the Philippines and Richard Natividad, G.R. No. 198270, December 09, 2015

December 9, 2015

Bouncing Checks Law: Knowledge of Insufficient Funds is Not a Defense

In Rigor v. People, the Supreme Court affirmed that knowledge by the payee that the drawer has insufficient funds when issuing a check is not a valid defense under Batas Pambansa Blg. 22 (BP 22), also known as the Bouncing Checks Law. The Court emphasized that the gravamen of the offense is the act of issuing a bad check, and the issuer’s intent or the payee’s awareness of the insufficiency of funds is immaterial. This ruling reinforces the strict liability imposed by BP 22 to deter the issuance of worthless checks, maintaining public confidence in the banking system. Even if a payee is aware that a check issuer lacks sufficient funds, the issuer is still liable if the check is dishonored.

Loan Gone Wrong: Can Knowledge of Insufficient Funds Excuse a Bouncing Check?

The case revolves around Alfredo Rigor, who was convicted of violating BP 22 for issuing a check that was subsequently dishonored due to a closed account. Rigor argued that he informed the Rural Bank of San Juan that he had insufficient funds and that the loan arrangement involved an officer of the bank taking a portion of the loan proceeds. Despite these claims, both the Regional Trial Court and the Court of Appeals found Rigor guilty. The central legal question is whether Rigor’s knowledge of his insufficient funds, coupled with the bank’s alleged awareness, absolves him of liability under BP 22.

The Supreme Court addressed the elements of the offense under Section 1 of BP 22, which are: (1) the making, drawing, and issuance of any check to apply on 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. All three elements were found to be present in Rigor’s case. He applied for a loan, issued a check related to that loan, and the check was dishonored. This is a critical point, as the presence of these elements establishes the offense, regardless of the surrounding circumstances.

The Court highlighted Rigor’s admission of knowing that he had insufficient funds when he issued the check. This admission was deemed sufficient to establish the element of knowledge, even without relying on the presumption of knowledge provided under Section 2 of BP 22. It’s crucial to note that the presumption of knowledge typically arises if the check is presented within ninety days from its date and dishonored for insufficient funds or credit. However, in Rigor’s case, his admission of knowledge made this presumption unnecessary.

Rigor’s defense rested on the argument that the bank knew he had insufficient funds, but the Court dismissed this argument. The Court unequivocally stated that knowledge by the payee of the insufficiency of funds is immaterial. The deceit is not an essential element of the offense under BP 22. This distinction is vital because it underscores the law’s intent to penalize the issuance of bad checks, irrespective of the payee’s awareness. The focus is on maintaining the integrity of the banking system and preventing the circulation of worthless checks.

The Court distinguished the case from Magno v. Court of Appeals, which involved a warranty deposit in a lease contract where the lessor-supplier was also the financier. In Magno, the accused was acquitted because the checks were part of a scheme designed to skim off business clients. In contrast, Rigor’s case involved a standard loan transaction, and the check was directly related to the loan amount. The Court emphasized that the purpose of BP 22 is not to coerce debtors to pay their debts but to prohibit the making of worthless checks and putting them in circulation. The law punishes the act as an offense against public order, not as an offense against property, as stated in Lozano v. Martinez:

The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The law punishes the act not as an offense against property, but an offense against public order.

The Court also rejected Rigor’s argument that he did not receive a notice of dishonor. The evidence showed that Rigor was informed about the dishonor of his check, and he even wrote a letter proposing a manner of paying the loan. The Court noted that the notice of dishonor can be sent by the drawee bank, the holder of the check, or the offended party, either by personal delivery or registered mail. Since Rigor admitted knowledge of the dishonor through a demand letter, he could not claim ignorance.

Furthermore, the Court addressed Rigor’s contention that the Regional Trial Court of Pasig lacked jurisdiction. The Court explained that violations of BP 22 are considered transitory or continuing crimes, meaning that the offense can be tried in any municipality or territory where any essential ingredient of the crime occurred. In this case, the check was issued and delivered in San Juan, Metro Manila, giving the Pasig court jurisdiction over the case. The place of issue and delivery was San Juan, and knowledge, as an essential part of the offense, was also overtly manifested in San Juan.

The Supreme Court’s decision in Rigor v. People underscores the importance of maintaining the integrity of the banking system by strictly enforcing the Bouncing Checks Law. The ruling reinforces that the offense is committed the moment a bad check is issued, regardless of the payee’s awareness of the insufficiency of funds or any underlying agreements. The decision also clarifies that BP 22 is not a tool for debt collection but a measure to prevent the circulation of worthless checks and protect public confidence in financial transactions.

FAQs

What is the Bouncing Checks Law (BP 22)?	BP 22 penalizes the making or issuing of checks without sufficient funds to cover the amount, aiming to deter the circulation of worthless checks. It protects public confidence in the banking system by imposing strict liability on those who issue bad checks.
What are the elements of a violation of BP 22?	The elements are: (1) making, drawing, and issuing a check; (2) knowing there are insufficient funds; and (3) the check being dishonored due to insufficient funds or a closed account. All these elements must be present to establish a violation.
Does the payee’s knowledge of insufficient funds affect the issuer’s liability under BP 22?	No, the payee’s knowledge that the issuer has insufficient funds is immaterial. The gravamen of the offense is the act of issuing a bad check, regardless of the payee’s awareness.
What is the significance of a notice of dishonor?	A notice of dishonor informs the issuer that the check was not honored due to insufficient funds or a closed account. While proof of receipt is often required, it’s not necessary if the issuer admits knowledge of the dishonor through other means.
What is a transitory or continuing crime?	A transitory crime is one where the essential elements occur in different locations. In BP 22 cases, the offense can be tried in any location where an element of the crime occurred, such as where the check was issued, delivered, or dishonored.
Is BP 22 a tool for debt collection?	No, BP 22 is not designed for debt collection. Its primary purpose is to prevent the issuance of worthless checks and maintain public order by ensuring the integrity of financial transactions.
*What was the Court’s ruling in Rigor v. People?*	The Court affirmed Rigor’s conviction, emphasizing that his knowledge of insufficient funds and the bank’s alleged awareness did not excuse him from liability under BP 22. The ruling reinforced the strict liability imposed by the law.
*How does Rigor v. People* differ from Magno v. Court of Appeals?**	In Magno, the checks were part of a deceptive scheme, whereas Rigor involved a straightforward loan transaction. The differing circumstances led to different outcomes, with Magno being acquitted and Rigor being convicted.

The Rigor v. People case serves as a stark reminder of the stringent application of the Bouncing Checks Law in the Philippines. It underscores the importance for individuals and businesses to exercise due diligence in managing their accounts and issuing checks. The Supreme Court’s decision emphasizes the law’s objective is to protect the public from the proliferation of worthless checks, ensuring financial stability.

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: ALFREDO RIGOR, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT, G.R. No. 144887, November 17, 2004

November 17, 2004