YU OH v.

COURT OF APPEALS (June 6, 2003) TOPIC: Strict and Liberal Construction FACTS: - Elvira Yu Oh purchased pieces of jewelry from Solid Gold International Traders, Inc. She failed to pay the purchase price, so Solid Gold filed civil cases against her. - Elvira entered into a compromise agreement with Solid Gold, through general manager Joaquin Novales III, to settle the civil cases. Elvira shall issue 99 post-dated checks worth P50,000 each starting Oct. 1, 1990 until Nov. 16, 1994. She will also pay the balance of P1M at that date. - Elvira issued ten checks for a total of P500,000 and Novales deposited each on their respective due dates. However, the checks were DISHONORED for the reason of ACCOUNT CLOSED. - Novales filed ten separate Informations charging Elvira with violation of Batas Pambansa Bilang 22 (Bouncing Checks Law). - RTC convicted Elvira. She appealed to the CA alleging that: a) RTC had no jurisdiction b) no notice of dishonor was given to her as drawer of the dishonored checks c) closed account is not the statutory cause to warrant prosecution/conviction d) there is only one act, not ten separate cases e) CA disregarded the definition of what a check is, under Sec. 185 of the Negotiable Instruments Law - CA affirmed RTC decision. ISSUES: 1) WoN CA erred in not granting retroactive effect to RA 7691 in view of RPC Art. 22 2) WoN the notice of dishonor is indispensable in this case 3) WoN the CA erred in interpreting BP Blg 22 HELD: 1) NO. - Arguments of petitioner: penal laws shall have retroactive effect if it favors the guilty person; RA 7691 is a penal law since it affects the jurisdiction of the court to take cognizance of criminal cases; the offense falls within the exclusive original jurisdiction of the Municipal Trial Court; CA is guilty of judicial legislation in stating that after the arraignment, the cases could no longer be transferred to the MuTC without violating rules on double jeopardy, since this is not stated in RA 7691. - SC says (same as arguments of Solicitor General): Article 22 of the RPC (retroactivity of penal laws) DOES NOT APPLY to this case. = A penal law is one that prohibits certain acts and establishes penalties for its violations. It also defines crime, treats of its nature and provides for its punishment. = RA 7691 does not do any of these. Therefore, it is NOT a penal law. Since it vests jurisdiction on courts, it is SUBSTANTIVE. = Since it is substantive, the statute in force at the time of the commencement of the action determines the jurisdiction of the court. RA 7691 only took effect during the pendency of the appeal before the CA. So, it cannot be remanded to the MuTC as Elvira prayed for. 2) NO. - Elements that must be proven for conviction under BP Blg. 22: a) accused issued any check to apply to account or for value b) accused knew at the time of the issuance that he does not have sufficient funds c) check is subsequently dishonored by the drawee bank

- Since the second element (knowledge of insufficiency of funds) involves a state of mind that is hard to estabish, BP Blg. 22 created a PRIMA FACIE PRESUMPTION of such knowledge: = the presumption that the issuer had knowledge of insufficiency of funds is brought into existence only after it is proved that the issuer had received a notice of dishonor and that within five days from the receipt of the notice, he FAILED to pay the amount of the check or make an arrangement for its payment. - RTC ruled that the second element is present based on the counter-affidavit of Elvira (she admitted to Novales her account might not be able to cover the amount of the checks) and cross-examination. However, there is NO PROOF that Elvira was furnished a notice of dishonor (the notices of dishonor presented in court were all sent to Solid Gold). - The person alleging that the notice was served must prove the fact of service. BP Blg. 22 calls for CLEAR PROOF of notice. - Procedural due process: the absence of the notice deprives an accused of an opportunity to preclude criminal prosecution (by paying the amount within five days of receipt of notice). - No personal demands were made on Elvira before the filing of the complaints against her. Therefore, there really is NO CLEAR SHOWING that Elvira knew of the dishonor of her checks. 3) NO. - Petitioners agruments: a) express language of BP Blg. 22 penalizes only the issuance of checks dishonored because of insufficient funds (and therefore not for closed account); b) a postdated check, not being drawn payable on demand, is technically not a special kind of a bill of exchange (called check), but an ordinary bill of exchange payable at a fixed date, hence the instrument is still valid and the obligation covered thereby, but only civilly and not criminally c) Lozano v. Martinez: language of BP Blg. 22 is broad enough to cover ALL KINDS of checks is a mere obiter dictum - SC says (again agreeing with the Solicitor General): - Recuerdo v. People: terms and conditions surrounding the issuance of the checks are IRRELEVANT since its primordial intention is to ensure the stability and commercial value of checks. - the clear intent of the law is to discourage the issuance of worthless checks due to its harmful effect to the public. Therefore, even those checks that are dishonored because of closed account is included in the coverage of BP Blg. 22. In Lozano and People v. Nitafan, the Court ruled that BP Blg. 22 is broad enough to cover ALL kinds of checks, whether present dated or postdated (Lozano doctrine is not mere obiter dictum, since it was reiterated in Nitafan). - The term closed account is within the meaning of the phrase does not have sufficient funds in or credit with the drawee bank. Obiter: Novales knew of the non-availability of funds when Elvira issued the checks to him (she told him so). No violation of BP Blg. 22 if complainant was told by the drawer that he/she has no sufficient funds in the bank.