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THIRD DIVISION

[G.R. NO. 139292. December 5, 2000

JOSEPHINE DOMAGSANG, Petitioner, v. THE HONORABLE COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, Respondents.

D E C I S I O N

VITUG, J.: chanrobles virtual law library

Petitioner was convicted by the Regional Trial Court of Makati, Branch 63, of having violated Batas Pambansa ("B.P.") Blg. 22 (Anti-Bouncing Check Law), on eighteen (18) counts, and sentenced to "suffer the penalty of One (1) Year imprisonment for each count (eighteen [18] counts)." Petitioner was likewise ordered to pay the private complainant the amount of P573,800.00.[1 The judgment, when appealed to the Court of Appeals (CA-G.R. CR No. 18497), was affirmed in toto by the appellate court. chanrobles virtual law library

It would appear that petitioner approached complainant Ignacio Garcia, an Assistant Vice President of METROBANK, to ask for financial assistance. Garcia accommodated petitioner and gave the latter a loan in the sum of P573,800.00. In exchange, petitioner issued and delivered to the complainant 18 postdated checks for the repayment of the loan. When the checks were, in time, deposited, the instruments were all dishonored by the drawee bank for this reason: Account closed. The complainant demanded payment allegedly by calling up petitioner at her office. Failing to receive any payment for the value of the dishonored checks, the complainant referred the matter to his lawyer who supposedly wrote petitioner a letter of demand but that the latter ignored the demand. chanrobles virtual law library

On 08 May 1992, Criminal Case No. 92-4465 was lodged against petitioner before the Regional Trial Court ("RTC") of Makati. The Information read: chanrobles virtual law library

"That on or about the 24th day of June, 1991, in the Municipality of Makati, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there willfully, unlawfully and feloniously make out, draw and issue to complainant Ignacio H. Garcia, Jr., to apply on account or for value the dated check/described below: chanrobles virtual law library

"Check No. : 149900 chanrobles virtual law library

Drawn Against : Traders Royal Bank chanrobles virtual law library

In the Amount of : P50,000.00 chanrobles virtual law library

Dated/Postdated : June 24, 1991 chanrobles virtual law library

Payable to : Ignacio H. Garcia, Jr. chanrobles virtual law library

"said accused well knowing that at the time of issue thereof, she did not have sufficient funds in or credit with the drawee bank for the payment in full of the face amount of such check upon its presentment, which check when presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for the reason `ACCOUNT CLOSED' and despite receipt of notice of such dishonor, the accused 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. chanrobles virtual law library

"CONTRARY TO LAW."² chanrobles virtual law library

Subsequent Informations, docketed Criminal Cases No. 92-4466 to No. 92-4482, inclusive, similarly worded as in Criminal Case No. 92-4465 except as to the dates, the number, and the amounts of the checks hereunder itemized - chanrobles virtual law library

"Check Number Dated/Postdated Amountchanrobles virtual law library

TRB No. 161181 July 18, 1991 P6,000.00 chanrobles virtual law library

TRB No. 149906 July 24, 1991 3,000.00 chanrobles virtual law library

No. 182074 July 30, 1991 29,700.00 chanrobles virtual law library

No. 182084 August 30, 1991 9,300.00 chanrobles virtual law library

No. 182078 September 15, 1991 6,000.00 chanrobles virtual law library

No. 161183 September 18, 1991 6,000.00 chanrobles virtual law library

No. 161177 September 18, 1991 100,000.00 chanrobles virtual law library

No. 182085 September 30, 1991 9,000.00 chanrobles virtual law library

No. 182079 October 15, 1991 6,000.00 chanrobles virtual law library

No. 182086 October 30, 1991 10,500.00 chanrobles virtual law library

No. 182080 November 15, 1991 6,000.00 chanrobles virtual law library

No. 182087 November 30, 1991 11,400.00 chanrobles virtual law library

No. 182081 December 15, 1991 6,000.00 chanrobles virtual law library

No. 182082 December 15, 1991 100,000.00 chanrobles virtual law library

No. 182088 December 30, 1991 12,000.00 chanrobles virtual law library

No. 182089 December 30, 1991 100,000.00 chanrobles virtual law library

No. 182090 December 30, 1991 100,000.00"[3 chanrobles virtual law library

were also filed against petitioner. The cases were later consolidated andintly tried following the "not guilty" plea of petitioner when arraigned on 02 November 1992. chanrobles virtual law library

On 07 September 1993, petitioner filed a demurrer to the evidence, with leave of court, premised on the absence of a demand letter and that the checks were not issued as payment but as evidence of indebtedness of petitioner or as collaterals of the loans obtained by petitioner. Opposed by the prosecution, the demurrer was denied by the trial court. In the hearing of 17 February 1994, Petitioner, through counsel, waived her right to present evidence in her defense. Relying solely then on the evidence submitted by the prosecution, the lower court rendered judgment convicting petitioner. The decision, as heretofore stated, was affirmed by the Court of Appeals in its decision of 15 February 1999. Reconsideration was also denied in the resolution, dated 09 July 1999, of the appellate court. chanrobles virtual law library

Hence, the instant petition where petitioner raised the following issues for resolution by the Court - chanrobles virtual law library

"1. Whether or not an alleged verbal demand to pay sufficient to convict herein petitioner for the crime of violation of B.P. Blg. 22; chanrobles virtual law library

"2. Whether or not the Honorable Court of Appeals committed reversible error when it affirmed the judgment of conviction rendered by the trial court, on the ground that a written notice of dishonor is not necessary in a prosecution for violation of B.P. Blg. 22, contrary to the pronouncement of the Supreme Court in the case of Lao vs. Court of Appeals, 274 SCRA 572; (and) chanrobles virtual law library

"3. Whether or not the Honorable Court of Appeals erred in considering the alleged written demand letter, despite failure of the prosecution to formally offer the same."⁴ chanrobles virtual law library

The pertinent provisions of B.P. Blg. 22 "Bouncing Checks Law," provide: chanrobles virtual law library

"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 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. chanrobles virtual law library

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

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

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

"SEC. 3. Duty of drawee; rules of evidence. It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof upon presentment, to cause to be written, printed or stamped in plain language thereon, or attached thereto, the reason for drawee's dishonor or refusal to pay the same: Provided, That where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal. In all prosecutions under this Act, the introduction in evidence of any unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the reason written, stamped or attached by the drawee on such dishonored check. chanrobles virtual law library

"Notwithstanding receipt of an order to stop payment, the drawee shall state in the notice that there were no sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact."⁵ (Underscoring supplied.) chanrobles virtual law library

The law enumerates the elements of the crime to be (1) the making, drawing and issuance of any check to apply for account or for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.[6 chanrobles virtual law library

There is deemed to be a prima facie evidence of knowledge on the part of the maker, drawer or issuer of insufficiency of funds in or credit with the drawee bank of the check issued if the dishonored check is presented within 90 days from the date of the check and the maker or drawer fails to pay thereon or to make arrangement with the drawee bank for that purpose. The statute has created the prima facie presumption evidently because "knowledge" which involves a state of mind would be difficult to establish.[7 The presumption does not hold, however, when the maker, drawer or issuer of the check pays the holder thereof the amount due thereon or makes arrangement for payment in full by the drawee bank of such check within 5 banking days after receiving notice that such check has not been paid by the drawee bank. chanrobles virtual law library

In Lao vs. Court of Appeals,[8 this Court explained: chanrobles virtual law library

x x x. Section 2 of B.P. Blg. 22 clearly provides that this presumption arises not from the mere fact of drawing, making and issuing a bum check; there must also be a showing that, within five banking days from receipt of the notice of dishonor, such maker or drawer failed to pay the holder of the check the amount due thereon or to make arrangement for its payment in full by the drawee of such check. chanrobles virtual law library

It has been observed that the State, under this statute, actually offers the violator `a compromise by allowing him to perform some act which operates to preempt the criminal action, and if he opts to perform it the action is abated. This was also compared `to certain laws allowing illegal possessors of firearms a certain period of time to surrender the illegally possessed firearms to the Government, without incurring any criminal liability. In this light, the full payment of the amount appearing in the check within five banking days from notice of dishonor is a `complete defense. 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. 22.⁹ chanrobles virtual law library

In the assailed decision, the Court of Appeals predicated the conviction of petitioner on the supposed fact that petitioner was informed of the dishonor of the checks through verbal notice when the complainant had called her up by telephone informing her of the dishonor of the checks and demanding payment therefor. The appellate court said: chanrobles virtual law library

"The maker's knowledge of the insufficiency of his funds is legally presumed from the dishonor of his check (People vs. Laggui, 171 Phil. 305). The law does not require a written notice of the dishonor of such check. chanrobles virtual law library

"In the instant case, appellant had knowledge that her checks were dishonored by the bank when complainant Garcia made several oral demands upon her to pay the value of the checks in the amount of P573,800.00. Despite said demands, appellant failed and refused to pay the same. Moreover, complaining witness further testified that his lawyer made a written demand upon appellant but the latter ignored said demand (tsn., May 27, 1993, pp. 13-14). In this connection, appellant waived her right to present evidence or rebut complainant's testimony that he made oral demands upon appellant to make good the dishonored checks and his lawyer wrote her a demand letter. chanrobles virtual law library

"Likewise, appellant did not object to the admission of the complainant's testimony with regard to the written demand by moving that it be stricken off the record for being hearsay, hence, the same is admissible evidence. In the case of People vs. Garcia, 89 SCRA 440, the Supreme court ruled: chanrobles virtual law library

"`x x x (It) must be noted that neither the defendant nor his counsel below objected to the admission of the testimonies which are now being assailed as hearsay. This is fatal to defendant-appellant's present posture since the failure to object to hearsay evidence constitutes a waiver of the x x right to cross-examine the actual witness to the occurrence, rendering the evidence admissible.'"¹⁰ chanrobles virtual law library

Petitioner counters that the lack of a written notice of dishonor is fatal. The Court agrees. chanrobles virtual law library

While, indeed, Section 2 of B.P. Blg. 22 does not state that the notice of dishonor be in writing, taken in conjunction, however, with Section 3 of the law, i.e., "that where there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the notice of dishonor or refusal,"[11 a mere oral notice or demand to pay would appear to be insufficient for conviction under the law. The Court is convinced that both the spirit and letter of the Bouncing Checks Law would require for the act to be punished thereunder not only that the accused issued a check that is dishonored, but that likewise the accused has actually been notified in writing of the fact of dishonor.[12 The consistent rule is that penal statutes have to be construed strictly against the State and liberally in favor of the accused.[13 chanrobles virtual law library

Evidently, the appellate court did not give weight and credence to the assertion that a demand letter was sent by a counsel of the complainant because of the failure of the prosecution to formally offer it in evidence. Courts are bound to consider as part of the evidence only those which are formally offered[14 for judges must base their findings strictly on the evidence submitted by the parties at the trial.[15 Without the written notice of dishonor, there can be no basis, considering what has heretofore been said, for establishing the presence of "actual knowledge of insufficiency of funds."[16 chanrobles virtual law library

The prosecution may have failed to sufficiently establish a case to warrant conviction, however, it has clearly proved petitioner's failure to pay a just debt owing to the private complainant. The total face value of the dishonored checks, to wit- chanrobles virtual law library

Check Number Dated/Postdated Amount chanrobles virtual law library

TRB No. 149900 June 24, 1991 P50,000.00 chanrobles virtual law library

TRB No. 161181 July 18, 1991 6,000.00 chanrobles virtual law library

TRB No. 149906 July 24, 1991 3,000.00 chanrobles virtual law library

No. 182074 July 30, 1991 29,700.00 chanrobles virtual law library

No. 182084 August 30, 1991 1,300.00 chanrobles virtual law library

No. 182078 September 15, 1991 6,000.00 chanrobles virtual law library

No. 161183 September 18, 1991 6,000.00 chanrobles virtual law library

No. 161171 September 18, 1991 100,000.00 chanrobles virtual law library

No. 182085 September 30, 1991 9,900.00 chanrobles virtual law library