VACA VS.

CA
(GR 43596, 31 October 1936)

Facts:

Eduardo Vaca is the president and owner of Ervine International while Fernando Nieto, Vaca’s
son-in-law, is the firm’s purchasing manager. They issued a check for P10,000 to the General
Agency for Reconnaissance, Detection and Security (GARDS) and drawn against China Bank.
When deposited with PCIBank, the check was dishonored for insufficiency of funds. GARDS sent a
demand letter but the drawers failed to pay within the time given (7 days from notice). A few
days later, however, Vaca issued a check to GARDS for P19,866.16, drawn against Associated
Bank, replacing the dishonored check. GARDS did not return the dishonored check. Later on,
GARDS Acting Operations Manager filed a criminal suit against Vaca and Nieto for violation of BP
22. The trial court sentenced each to 1 year imprisonment and to pay a fine of P10,000 and costs.

Issue:
1. Whether the drawers had knowledge of insufficient funds in issuing the check.

2. Whether the absence of damages incurred by the payee absolves the drawers from liability.

Held:
1. Section 2 of BP 22 provides a presumption of knowledge of insufficiency of funds if the drawer
fails to maintain sufficient funds within 90 days after the date of the check, or to make
arrangement for payment in full by the drawee of such check within 5 days after receiving notice
that such check has not been paid by the drawee. Herein, the second check supposedly replacing
the dishonored check is actually the payment of two separate bills, and was issued 15 days after
notice. Such “replacement” cannot negate the presumption that the drawers knew of the
insufficiency of funds.

2. The claim — that the case was simply a result of a misunderstanding between GARDS and the
drawers and that the security agency did not suffer any damage from the dishonor of the check —
is flimsy. Even if the payee suffered no damage as a result of the issuance of the bouncing check,
the damage to the integrity of the banking system cannot be denied. Damage to the payee is not
an element of the crime punished in BP 22.

Note: In this case, the Court recognized the contribution of Filipino entrepreneurs to the national
economy; and that to serve the ends of criminal justice, instead of the 1 year imprisonment, a fine
of double the amount of the check involved was imposed as penalty. This was made to redeem
valuable human material and prevent unnecessary deprivation of personal liberty and economic
usefulness with due regard to the protection of the social order.