G.R. No. 152666 - MARCIANO TAN v. PHILIPPINE COMMERCIAL INTERNATIONAL BANK
[G.R. NO. 152666 : April 23, 2008]
MARCIANO TAN, Petitioner, v. PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.
D E C I S I O N
CARPIO MORALES, J.:
From the March 19, 2002 Decision1 of the Court of Appeals affirming that of the Makati Regional Trial Court (RTC) convicting Marciano Tan, herein petitioner, of nine (9) counts of violation of Batas Pambansa Blg. 22 (B.P. Blg. 22) or the Bouncing Checks Law, petitioner filed the present Petition for Review on Certiorari .
The following undisputed facts spawned the filing of the nine (9) informations for violation of BP Blg. 22 against petitioner.
Master Tours and Travel (MTT), of which petitioner was executive vice-president, applied on July 16, 1990 for a 360-day Usance Letter of Credit (LC) with respondent Philippine Commercial International Bank (PCIB) for the importation of four tourist buses with a total value of US$430,0002 from Daewoo Corporation of Seoul, Korea (the supplier), which was agreed upon by the parties to amount to "closed [sic] to
P10 Million Pesos"3 computed on the basis of the then prevailing rate of exchange of the dollar to the peso.
As a condition to the grant of the LC, PCIB and MTT entered into a Memorandum of Agreement4 under which the initial drawings of the supplier in the amount of US$5,700 against the LC would be paid by PCI Leasing and Finance Inc. (PCILF) out of the proceeds of MTT's amortized loan with it, and any subsequent drawings against the LC by the supplier in excess of the said amount would be paid out of the proceeds of Treasury Bills which PCIB would purchase out of the proceeds of post-dated checks to be issued by MTT.
MTT thus issued five checks postdated August, September, October, November, and December 1990 each for
P716,666.66 and another check in January 1991 for P716,666.70 or in the total amount of P4,300,000.
PCIB thereupon issued the Usance LC in favor of the supplier, which was to mature in October 1991.
The tourist buses arrived in October 1990 and were delivered to MTT, covered by Trust Receipts with PCIB as entruster and MTT as entrustee.
Of the six checks that MTT issued to PCIB, the first five representing a total amount of
P3,583,333 were cleared but not the last one dated January 1991. PCIB soon demanded settlement of this dishonored check from MTT. At the same time, PCIB required MTT to pay the exchange differential on the peso-dollar rate which was P23.7884 to US$1 in July 1990 when the LC was issued to P28.56 to US$1 in January 1991 when the last postdated check matured but was dishonored. The exchange differential was computed by PCIB to amount to P2,061,331.20. MTT agreed to pay the exchange differential, albeit it later claimed that its agreement to pay the differential was a "mistake"5 since no such condition was incorporated in their contract. The exchange differential, of P2,061,331.20 when added to the P716,666.70 face value of the dishonored check, totalled P2,777,999.86.
MTT thus issued 14 postdated checks of
P198,428.42, payable every 15 days, the first to start on February 28, 1991.
Of the 14 checks, only the first five were honored, the proceeds of which totaled
P992,142.10. The other nine, those dated May 15, 1991 et seq. in the total amount of P1,785,855.78, were dishonored - the subject of the nine informations at bar.
MTT, having suffered financial reverses, availed of provision No. 7 of the Trust Receipt reading.
7. In the event the Entrustee defaults in his/its obligations or breaches or fails to comply with the terms and conditions of this Trust Receipt, or upon default in, breach of or noncompliance with the obligation evidenced by Annex A hereof or the agreement under which the Entruster issued the letter of credit under the terms of which the Trust Property was purchased ("events of default"), the Entruster may cancel this trust, and thereupon take possession of the Trust Property and/or such proceeds as may then have been realized therefrom, and have the goods sold and the proceeds of such sale applied, in accordance with the provisions of Section 7 of the Trust Receipts Law. In all cases where the Entruster is compelled to resort to the cancellation of this Trust Receipt or to take any other legal action to protect its interest, the Entrustee shall pay attorney's fees fixed at 15% of the total obligation of the Entrustee, which in no case shall be less than P500.00 exclusive of the costs and fees allowed by law and the other expenses of collection incurred by the Entruster. Any deficiency resulting from the sale of the Trust Property shall be paid by the Entrustee within 24 hours from such sale; failing which the Entruster may take such legal action, without further notice to the Entrustee, as it may deem necessary to collect such deficiency from the Entrustee.6 (Underscoring supplied)cralawlibrary
MTT thus surrendered the buses to PCIB which accepted them in mid 1991 and March 1992. By MTT's claim the buses were, at the time of surrender, estimated to be "about 6.6 million."
Subsequently or in July 1992, PCIB sent petitioner a letter of July 9, 1992 reading:
x x x
From the records now in our possession, it appears that despite promises made by you to make good your obligations, no performance thus far has been made. As of June 30, 1992, inclusive of interests and penalty charges, your obligations totaled
Since adequate time and opportunity had already been given you by our client, you are now requested to remit to it the aforesaid sum of
P10,327,591.21 within five (5) days from your receipt hereof, otherwise, we shall bring you to court.
x x x x7 (Underscoring supplied)cralawlibrary
Replying, petitioner's counsel, by letter of July 22, 1992, wrote PCIB as follows:
Your letters of July 9, 1992 were endorsed to us for appropriate reply by our clients, Master Tours and Travel Corporation and Marciano Tan.
Your letter to Mr. Tan makes mention of two (2) trust receipts signed by him covering the importation of the four (4) units DAEWOO buses you want our client to account for. However, Philippine Commercial International Bank ("PCIB") never furnished our client copies thereof. And up to this date, none is in the possession of our client. Could you please provide our client with copies of the documents?cra lawlibrary
Delving into the crux of your demand, kindly be advised that our clients voluntarily surrendered physical possession and custody of the four (4) DAEWOO buses to PCIB as early as August [sic] 1991. The units were accepted by PCIB and, therefore, there no longer exist[s] any liability or obligation on the part of our clients towards that of yours. As clearly stated in your subject letter written to Mr. Marciano Tan, under the terms of the trust receipts, our client has the alternative obligation to either surrender the buses upon demand or pay the total value thereof. As the buses have been surrendered and delivered to your client, our client's obligation has been extinguished.
We suggest then that your clarify the fact of delivery of the four (4) units with your client.
We do hope to have amply answered and enlightened you on the status of the matter regarding our client's supposed liability on the four (4) buses.8 (Emphasis and underscoring supplied)cralawlibrary
There is no showing if PCIB reacted to the above-quoted letter of petitioner's counsel. PCIB subsequently filed in October 1992 a criminal complaint against petitioner before the Makati City Prosecutor's Office which resulted in the filing on April 1, 1993 of the nine informations against him for violation of B.P. Blg. 22 before the RTC of Makati. The first information, Criminal Case No. 93-2365, reads:
That on or about the 29th day of January 1991, in the Municipality of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused as the duly authorized signatory of Master Tours and Travel Corporation, did then and there willfully, unlawfully and feloniously make or draw and issue to Philippine Commercial Int[ernational] Bank to apply on account or for value the check/described below:
Philippine Banking Corp.
In the amount:
May 15, 1991
Philippine Commercial International Bank
said accused well knowing that at the time of issue thereof Master Tours & Travel Corp. had no sufficient funds in or credit with the drawee bank for the payment in full of the face amount of the check upon its presentment, which check was presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for the reason "Drawn Against Insufficient Funds" and, despite receipt of notice of said dishonor, the accused and/or Master Tours & Travel Corporation failed to pay said payee the face amount of said check or to make arrangement for full payment thereof within five (5) banking days after receiving notice.9 (Underscoring partly in the original and partly supplied)
The other eight informations, Criminal Case Nos. 93-2366 to 93-2373, are similarly worded and for the same amount, differing only as to the check numbers, the dates of issue and, with respect to Criminal Cases No. 93-2368 to 93-2373, the cause of dishonor ("account closed").10
Branch 142 of the Makati RTC, by Decision11 of October 25, 1995, convicted petitioner of all the nine charges. The trial court absolved petitioner of civil liability, however, because "the money obligations arising from the checks are of Master Tours & Travel Corporation and not of the accused Marciano Tan who did not, by signing in behalf of the corporation, assume personal liability therefor."12 Thus, the trial court disposed:
WHEREFORE, the Court finds the accused MARCIANO T. TAN to be GUILTY beyond reasonable doubt of these nine (9) criminal charges for violation of BP 22, and hereby sentences him to suffer imprisonment for THIRTY (30) days for EACH of the NINE  CRIMNAL OFFENSES CHARGED.
For lack of evidence, the claim of civil liability arising from the nine  dishonored checks, are DISMISSED, without prejudice to their being taken up in a proper civil action for recovery of the amounts till due, if any, from Master Tours [&] Travel Corporation.
Costs against the accused.13 (Emphasis in the original; underscoring supplied)
On petitioner's appeal, the Court of Appeals affirmed the trial court's decision by Decision of March 19, 2002. Hence, the present Petition for Review,14 faulting the appellate court
. . . IN CONVICTING THE ACCUSED DESPITE THE FACT THAT HIS CRIMINAL LIABILITY WAS EXTINGUISHED BY HIS HAVING OVERPAID PCIB.
. . . IN NOT FINDING THAT MASTER HAD FULLY PAID PCIB [AND] . . . IN NOT FINDING THAT MASTER, AS A MATTER OF FACT, HAD IN EFFECT, OVERPAID PCIB WHEN THE LATTER PULLED OUT THE BUSES SUBJECT OF THE TRUST RECEIPTS ISSUED IN CONNECTION WITH THE TRANSACTION.
. . . IN NOT FINDING THAT THE CONTRACT DOCUMENTS DO NOT CONTAIN ANY STIPULATION AS TO ADJUSTMENT OF THE OBLIGATION IN CASE OF FOREIGN EXCHANGE FLUCTUATION. THERE IS NOTHING IN THE MEMORANDUM OF AGREEMENT BETWEEN THE PARTIES NOR IN THE LETTER OF CREDIT APPLICATION OR IN ANY DOCUMENT COVERING THE TRANSACTION WHEREIN MASTER TOURS OBLIGED ITSELF TO PAY AN INCREASE IN DOLLAR EXCHANGE RATE FLUCTUATION. CONVERSELY, NEITHER IS PCIB OBLIGED TO REFUND MASTER TOURS OF ANY DECREASE IN THE PESO DOLLAR EXCHANGE RATE.
. . . IN NOT FINDING THAT EVEN ASSUMING MASTER WAS OBLIGED TO PAY FOREIGN EXCHANGE RATE DIFFERENTIAL, IT WAS PREMATURE TO DEMAND IT [ON] JANUARY 7, 1991.
x x x
. . . IN NOT FINDING THAT THE SUPERVENING BANKRUPTCYSUFFERED BY MASTER BROUGHT ABOUT BY THE ECONOMIC DISLOCATION OF THE COUNTRY BROUGHT ABOUT BY THE MOUNT PINATUBO ERUPTION, THE GULF WAR AND THE BAGUIO EARTHQUAKE DISCULPATES THE ACCUSED FROM CRIMINAL LIABILITY.15 (Emphasis and underscoring supplied)cralawlibrary
The petition is impressed with merit.
Unless the following elements are shown to have been proven by the prosecution, an accused will not be convicted for violation of B.P. Blg. 22:
1. The accused makes, draws or issues any check to apply to account or for value;
2. The accused knows at the time of the issuance that he or she does not have sufficient funds in, or credit with, the drawee bank for the payment of the check in full upon its presentment; andcralawlibrary
3. The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or it would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment.16 (Underscoring supplied)cralawlibrary
While issuing of a bouncing check is malum prohibitum, the prosecution is not excused from its responsibility of proving beyond reasonable doubt all the elements of the offense.17
Respecting the second element of the crime, the prosecution must prove that the accused knew, at the time of issuance, that he does not have sufficient funds or credit for the full payment of the check upon its presentment.18
The element of "knowledge" involves a state of mind that obviously would be difficult to establish, hence, the statute creates a prima facie presumption of knowledge on the insufficiency of funds or credit coincidental with the attendance of the two other elements.19
Evidence of knowledge of insufficient funds. - The making, drawing and issuance of a check payment of which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for payment in full by the drawee of such check within five (5) banking days after receiving notice that such check has not been paid by the drawee.20 (Emphasis and underscoring supplied)cralawlibrary
In order to create such presumption, it must be shown that the drawer or maker received a notice of dishonor and, within five banking days thereafter, failed to satisfy the amount of the check or arrange for its payment.21 The above-quoted provision creates a presumption juris tantum that the second element prima facie exists when the first and third elements of the offense are present.22
The presumption is not conclusive,23 however, as it may be rebutted by full payment.24 If the maker or drawer pays, or makes arrangement with the drawee bank for the payment of the amount due within the five-day period from notice of the dishonor, he or she may no longer be indicted for such violation.25 It is a complete defense26 that would lie regardless of the strength of the evidence presented by the prosecution.27 In essence, the law affords the drawer or maker the opportunity to avert prosecution by performing some acts that would operate to preempt the criminal action,28 which opportunity serves to mitigate the harshness of the law in its application.29
It is a general rule that only a full payment at the time of its presentment or during the five-day grace period could exonerate one from criminal liability under B.P. Blg. 22 and that subsequent payments can only affect the civil, but not the criminal, liability.30
In Macalalag v. People,31 the Court held that payment by the accused of the amount of the check prior to its presentment serves the same purpose. It rebuked the malpractice of presenting checks for payment even after the amount thereof had been paid.
In Griffith v. Court of Appeals,32 the Court held that where the creditor had collected more than a sufficient amount to cover the value of the checks representing rental arrearages, holding the debtor's president to answer for a criminal offense under B.P. Blg. 22 two years after the said collection is no longer tenable nor justified by law or equitable considerations. In that case, the Court ruled that albeit made beyond the grace period but two years prior to the institution of the criminal case, the payment collected from the proceeds of the foreclosure and auction sale of the petitioner's impounded properties, with more than a million pesos to spare, justified the acquittal of the petitioner. The Court ratiocinated:
The Bouncing Checks Law "was devised to safeguard the interest of the banking system and the legitimate public checking account user." It was not designed to favor or encourage those who seek to enrich themselves through manipulation and circumvention of the purpose of the law. x x x
x x x We cannot, under these circumstances, see how petitioner's conviction and sentence could be upheld without running afoul of basic principles of fairness and justice. For [private respondent] has, in our view, already exacted its proverbial pound of flesh through foreclosure and auction sale as its chosen remedy.33 (Emphasis supplied)cralawlibrary
In the present case, PCIB already exacted its proverbial pound of flesh by receiving and keeping in possession the four buses-trust properties surrendered by petitioner in about mid 1991 and March 1992 pursuant to Section 7 of the Trust Receipts Law,34 the estimated value of which was "about
P6.6 million."35 It thus appears that the total amount of the dishonored checks - P1,785,855.75 ', the undisputed claim of petitioner of a mistaken agreement to pay the exchange differential (which the same checks represented) aside, was more than fully satisfied prior to the transmittal and receipt of the July 9, 1992 letter of demand. In keeping with jurisprudence, the Court then considers such payment of the dishonored checks to have obliterated the criminal liability of petitioner.36
It is a consistent rule that penal statutes are construed strictly against the State and liberally in favor of the accused. And since penal laws should not be applied mechanically, the Court must determine whether the application of the penal law is consistent with the purpose and reason of the law.37 In the present case, it finds in the negative.
WHEREFORE, the petition is GRANTED. The assailed March 19, 2002 Decision of the Court of Appeals in CA-G.R. C.R. No. 18999 is REVERSED and SET ASIDE. Petitioner Marciano Tan is ACQUITTED in Criminal Case Nos. 93-2365 to 93-2373.
Quisumbing, J., Chairperson, , Tinga, Velasco, Jr., Brion, JJ., concur.
1 Penned by Court of Appeals Associate Justice Conrado M. Vasquez, Jr. with the concurrence of Associate Justices Andres B. Reyes, Jr. and Amelita G. Tolentino. CA rollo, pp. 200-208.
2 TSN, May 3, 1995, p. 8. In the Memorandum of Agreement the exact amount was US$432,000.
3 Id. at 9.
4 Exhibit "C."
5 TSN, July 12, 1995, p. 7.
6 Exhibit "2-B."
7 Exhibit "6."
8 Exhibit "7."
9 Records, p. 1.
10 Id. at 41-56.
11 Id. at 172-178.
12 Id. at 178.
13 Id. at 178.
14 Rollo, pp. 9-38.
15 Id. at 15-16.
16 Danao v. Court of Appeals, 411 Phil. 63, 71-72 (2001).
17 Danao v. Court of Appeals, supra; Vide Cabrera v. People, 454 Phil. 759 (2003) which states that to prove the first and third elements, the law provides that the introduction in evidence of the unpaid or 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 issuing of the said checks and the due presentment to the drawee for payment and the dishonor thereof for the reasons indicated therein.
18 Sia v. People, G.R. No. 149695, April 28, 2004, 428 SCRA 206.
19 Meriz v. People, 420 Phil. 608 (2001).
20 batas pambansa Blg. 22, Sec. 2.
21 Cabrera v. People, supra note 17.
22 Lim v. People, 394 Phil. 844 (2000) states that if not rebutted, the presumption suffices to sustain a conviction.
23 Bautista v. Court of Appeals, 413 Phil. 159 (2001); Sycip, Jr. v. Court of Appeals, 385 Phil. 143 (2000) states that the presumption cannot hold if there is evidence to the contrary.
24 Macalaglag v. People, G.R. No. 164358, December 20, 2006, 511 SCRA 400; Abarquez v. Court of Appeals, 455 Phil. 964 (2003).
25 Sia v. People, supra note 18.
26 Cabrera v. People, supra note 17.
27 Meriz v. People, supra note 19.
28 Lao v. Court of Appeals, G.R. No. 119178, June 20, 1997, 274 SCRA 572 (1997).
29 Danao v. Court of Appeals, supra note 16.
30 Macalalag v. People, supra note 24.
32 428 Phil. 878 (2002).
33 Id. at 889-891.
34 Records show that PCIB had not, as of August 1995, sold the buses, for reasons unknown to petitioner and beyond his control, TSN, August 8, 1995, pp. 14-15.
35 Supra note 5.
36 Vide Abarquez v. Court of Appeals, supra note 24, wherein the Court acquitted the accused on two counts for paying the face value of two checks two months before a notice of dishonor was sent.
37 Abarquez v. Court of Appeals, supra.
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