G.R. No.

117857 February 2, 2001

LUIS S. WONG, petitioner,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

QUISUMBING, J.:

For review on certiorari is the decision dated October 28, 1994 of the Court of Appeals in C.A. G.R.
CR 118561 which affirmed the decision of the Regional Trial Court of Cebu City, Branch 17,
convicting petitioner on three (3) counts of Batas Pambansa Blg. 22 (the Bouncing Checks Law)
violations, and sentencing him to imprisonment of four (4) months for each count, and to pay private
respondent the amounts of P5,500.00, P6,410.00 and P3,375.00, respectively, corresponding to the
value of the checks involved, with the legal rate of interest from the time of filing of the criminal
charges, as well as to pay the costs.
1âwphi1.nêt

The factual antecedents of the case are as follows:

Petitioner Wong was an agent of Limtong Press. Inc. (LPI), a manufacturer of calendars. LPI would
print sample calendars, then give them to agents to present to customers. The agents would get the
purchase orders of customers and forward them to LPI. After printing the calendars, LPI would ship
the calendars directly to the customers. Thereafter, the agents would come around to collect the
payments. Petitioner, however, had a history of unremitted collections, which he duly acknowledged
in a confirmation receipt he co-signed with his wife.2 Hence, petitioner’s customers were required to
issue postdated checks before LPI would accept their purchase orders.

In early December 1985, Wong issued six (6) postdated checks totaling P18,025.00, all dated
December 30, 1985 and drawn payable to the order of LPI, as follows:

(1) Allied Banking Corporation (ABC) Check No. 660143464-C for P6,410.00 (Exh. "B");

(2) ABC Check No. 660143460-C for P540.00 (Exh. "C");

(3) ABC Check No. PA660143451-C for P5,500.00 (Exh. "D");

(4) ABC Check No. PA660143465-C for P1,100.00 (Exh. "E");

(5) ABC Check No. PA660143463-C for P3,375.00 (Exh. "F");

(6) ABC Check No. PA660143452-C for P1,100.00 (Exh. "G").

These checks were initially intended to guarantee the calendar orders of customers who failed to
issue post-dated checks. However, following company policy, LPI refused to accept the checks as
guarantees. Instead, the parties agreed to apply the checks to the payment of petitioner’s unremitted
collections for 1984 amounting to P18,077.07. 3 LPI waived the P52.07 difference.

Before the maturity of the checks, petitioner prevailed upon LPI not to deposit the checks and
promised to replace them within 30 days. However, petitioner reneged on his promise. Hence, on
June 5, 1986, LPI deposited the checks with Rizal Commercial Banking Corporation (RCBC). The
checks were returned for the reason "account closed." The dishonor of the checks was evidenced by
the RCBC return slip.
On June 20, 1986, complainant through counsel notified the petitioner of the dishonor. Petitioner
failed to make arrangements for payment within five (5) banking days.

On November 6, 1987, petitioner was charged with three (3) counts of violation of B.P. Blg.
224 under three separate Informations for the three checks amounting to P5,500.00, P3,375.00, and
P6,410.00.5

The Information in Criminal Case No. CBU-12055 reads as follows:6

That on or about the 30 th day of December, 1985 and for sometime subsequent thereto, in
the City of Cebu, Philippines, and within the jurisdiction of this Honorable Court, the said
accused, knowing at the time of issue of the check she/he does not have sufficient funds in
or credit with the drawee bank for the payment of such check in full upon its presentment,
with deliberate intent, with intent of gain and of causing damage, did then and there issue,
make or draw Allied Banking Corporation Check No. 660143451 dated 12-30-85 in the
amount of P5,500.00 payable to Manuel T. Limtong which check was issued in payment of
an obligation of said accused, but when the said check was presented with said bank, the
same was dishonored for reason ‘ACCOUNT CLOSED’ and despite notice and demands
made to redeem or make good said check, said accused failed and refused, and up to the
present time still fails and refuses to do so, to the damage and prejudice of said Manuel T.
Limtong in the amount of P5,500.00 Philippine Currency.

Contrary to law.

Petitioner was similarly charged in Criminal Case No. 12057 for ABC Check No. 660143463 in the
amount of P3,375.00, and in Criminal Case No. 12058 for ABC Check No. 660143464 for
P6,410.00. Both cases were raffled to the same trial court.

Upon arraignment, Wong pleaded not guilty. Trial ensued.

Manuel T. Limtong, general manager of LPI, testified on behalf of the company, Limtong averred that
he refused to accept the personal checks of petitioner since it was against company policy to accept
personal checks from agents. Hence, he and petitioner simply agreed to use the checks to pay
petitioner’s unremitted collections to LPI. According to Limtong, a few days before maturity of the
checks, Wong requested him to defer the deposit of said checks for lack of funds. Wong promised to
replace them within thirty days, but failed to do so. Hence, upon advice of counsel, he deposited the
checks which were subsequently returned on the ground of "account closed."

The version of the defense is that petitioner issued the six (6) checks to guarantee the 1985
calendar bookings of his customers. According to petitioner, he issued the checks not as payment
for any obligation, but to guarantee the orders of his customers. In fact, the face value of the six (6)
postdated checks tallied with the total amount of the calendar orders of the six (6) customers of the
accused, namely, Golden Friendship Supermarket, Inc. (P6,410.00), New Society Rice and Corn Mill
(P5,500.00), Cuesta Enterprises (P540.00), Pelrico Marketing (P1,100.00), New Asia Restaurant
P3,375.00), and New China Restaurant (P1,100.00). Although these customers had already paid
their respective orders, petitioner claimed LPI did not return the said checks to him.

On August 30, 1990, the trial court issued its decision, disposing as follows:7

"Wherefore, premises considered, this Court finds the accused Luis S. Wong GUILTY
beyond reasonable doubt of the offense of Violations of Section 1 of Batas Pambansa Bilang
22 in THREE (3) Counts and is hereby sentenced to serve an imprisonment of FOUR (4)
 MONTHS for each count; to pay Private Complainant Manuel T. Limtong the sums of Five
Thousand Five Hundred (P5,500.00) Pesos, Six Thousand Four Hundred Ten (P6,410.00)
Pesos and Three Thousand Three Hundred Seventy-Five (P3,375.00) Pesos corresponding
to the amounts indicated in Allied Banking Checks Nos. 660143451, 66[0]143464 and
660143463 all issued on December 30, 1985 together with the legal rate of interest from the
time of the filing of the criminal charges in Court and pay the costs." 8

Petitioner appealed his conviction to the Court of Appeals. On October 28, 1994, it affirmed the trial
court’s decision in toto.9

Hence, the present petition.10 Petitioner raises the following questions of law -11

May a complainant successfully prosecute a case under BP 22 --- if there is no more

consideration or price or value – ever the binding tie that it is in contracts in general and in
negotiable instruments in particular – behind the checks? – if even before he deposits the
checks, he has ceased to be a holder for value because the purchase orders (PO’s)
guaranteed by the checks were already paid?

Given the fact that the checks lost their reason for being, as above stated, is it not then the
duty of complainant – knowing he is no longer a holder for value – to return the checks and
not to deposit them ever? Upon what legal basis then may such a holder deposit them and
get paid twice?

Is petitioner, as the drawer of the guarantee checks which lost their reason for being, still
bound under BP 22 to maintain his account long after 90 days from maturity of the checks?

May the prosecution apply the prima facie presumption of "knowledge of lack of funds"
against the drawer if the checks were belatedly deposited by the complainant 157 days after
maturity, or will it be then necessary for the prosecution to show actual proof of "lack of
funds" during the 90-day term?

Petitioner insists that the checks were issued as guarantees for the 1985 purchase orders (PO’s) of
his customers. He contends that private respondent is not a "holder for value" considering that the
checks were deposited by private respondent after the customers already paid their orders. Instead
of depositing the checks, private respondent should have returned the checks to him. Petitioner
further assails the credibility of complainant considering that his answers to cross-examination
questions included: "I cannot recall, anymore" and "We have no more record."

In his Comment,12 the Solicitor General concedes that the checks might have been initially intended
by petitioner to guarantee payments due from customers, but upon the refusal of LPI to accept said
personal checks per company policy, the parties had agreed that the checks would be used to pay
off petitioner’s unremitted collections. Petitioner’s contention that he did not demand the return of the
checks because he trusted LPI’s good faith is contrary to human nature and sound business
practice, according to the Solicitor General.

The issue as to whether the checks were issued merely as guarantee or for payment of petitioner’s
unremitted collections is a factual issue involving as it does the credibility of witnesses. Said factual
issue has been settled by the trial court and Court of Appeals. Although initially intended to be used
as guarantee for the purchase orders of customers, they found the checks were eventually used to
settle the remaining obligations of petitioner with LPI. Although Manuel Limtong was the sole witness
for the prosecution, his testimony was found sufficient to prove all the elements of the offense
charged.13 We find no cogent reason to depart from findings of both the trial and appellate courts. In
cases elevated from the Court of Appeals, our review is confined to allege errors of law. Its findings
of fact are generally conclusive. Absent any showing that the findings by the respondent court are
entirely devoid of any substantiation on record, the same must stand. 14 The lack of accounting
between the parties is not the issue in this case. As repeatedly held, this Court is not a trier of
facts.15 Moreover, in Llamado v. Court of Appeals,16 we held that "[t]o determine the reason for which
checks are issued, or the terms and conditions for their issuance, will greatly erode the faith the
public reposes in the stability and commercial value of checks as currency substitutes, and bring
about havoc in trade and in banking communities. So what the law punishes is the issuance of a
bouncing check and not the purpose for which it was issued nor the terms and conditions relating to
its issuance. The mere act of issuing a worthless check is malum prohibitum." Nothing herein
persuades us to hold otherwise.

The only issue for our resolution now is whether or not the prosecution was able to establish beyond
reasonable doubt all the elements of the offense penalized under B.P. Blg. 22.

There are two (2) ways of violating B.P. Blg. 22: (1) by making or drawing and issuing a check to
apply on account or for value knowing at the time of issue that the check is not sufficiently funded;
and (2) by having sufficient funds in or credit with the drawee bank at the time of issue but failing to
keep sufficient funds therein or credit with said bank to cover the full amount of the check when
presented to the drawee bank within a period of ninety (90) days. 17

The elements of B.P. Blg. 22 under the first situation, pertinent to the present case, are: 18

"(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 such 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."

Petitioner contends that the first element does not exist because the checks were not issued to apply
for account or for value. He attempts to distinguish his situation from the usual "cut-and-dried" B.P.
22 case by claiming that the checks were issued as guarantee and the obligations they were
supposed to guarantee were already paid. This flawed argument has no factual basis, the RTC and
CA having both ruled that the checks were in payment for unremitted collections, and not as
guarantee. Likewise, the argument has no legal basis, for what B.P. Blg. 22 punishes is the issuance
of a bouncing check and not the purpose for which it was issued nor the terms and conditions
relating to its issuance.19

As to the second element, B.P. Blg. 22 creates a presumption juris tantum that the second
element prima facie exists when the first and third elements of the offense are present.20 Thus, the
maker’s knowledge is presumed from the dishonor of the check for insufficiency of funds. 21

Petitioner avers that since the complainant deposited the checks on June 5, 1986, or 157 days after
the December 30, 1985 maturity date, the presumption of knowledge of lack of funds under Section
2 of B.P. Blg. 22 should not apply to him. He further claims that he should not be expected to keep
his bank account active and funded beyond the ninety-day period.

Section 2 of B.P. Blg. 22 provides:

 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.

An essential element of the offense is "knowledge" on the part of the maker or drawer of the check of
the insufficiency of his funds in or credit with the bank to cover the check upon its presentment.
Since this involves a state of mind difficult to establish, the statute itself creates a prima
facie presumption of such knowledge where payment of the check "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." To mitigate the harshness of the law in its application, the statute provides
that such presumption shall not arise if within five (5) banking days from receipt of the notice of
dishonor, the maker or drawer makes arrangements for payment of the check by the bank or pays
the holder the amount of the check. 22

Contrary to petitioner’s assertions, nowhere in said provision does the law require a maker to
maintain funds in his bank account for only 90 days. Rather, the clear import of the law is to
establish a prima facie presumption of knowledge of such insufficiency of funds under the following
conditions (1) presentment within 90 days from date of the check, and (2) the dishonor of the check
and failure of the maker to make arrangements for payment in full within 5 banking days after notice
thereof. That the check must be deposited within ninety (90) days is simply one of the conditions for
the prima facie presumption of knowledge of lack of funds to arise. It is not an element of the
offense. Neither does it discharge petitioner from his duty to maintain sufficient funds in the account
within a reasonable time thereof. Under Section 186 of the Negotiable Instruments Law, "a check
must be presented for payment within a reasonable time after its issue or the drawer will be
discharged from liability thereon to the extent of the loss caused by the delay." By current banking
practice, a check becomes stale after more than six (6) months,23 or 180 days. Private respondent
herein deposited the checks 157 days after the date of the check. Hence said checks cannot be
considered stale. Only the presumption of knowledge of insufficiency of funds was lost, but such
knowledge could still be proven by direct or circumstantial evidence. As found by the trial court,
private respondent did not deposit the checks because of the reassurance of petitioner that he would
issue new checks. Upon his failure to do so, LPI was constrained to deposit the said checks. After
the checks were dishonored, petitioner was duly notified of such fact but failed to make
arrangements for full payment within five (5) banking days thereof. There is, on record, sufficient
evidence that petitioner had knowledge of the insufficiency of his funds in or credit with the drawee
bank at the time of issuance of the checks. And despite petitioner’s insistent plea of innocence, we
find no error in the respondent court’s affirmance of his conviction by the trial court for violations of
the Bouncing Checks Law.

However, pursuant to the policy guidelines in Administrative Circular No. 12-2000, which took effect
on November 21, 2000, the penalty imposed on petitioner should now be modified to a fine of not
less than but not more than double the amount of the checks that were dishonored.

WHEREFORE, the petition is DENIED. Petitioner Luis S. Wong is found liable for violation of Batas
Pambansa Blg. 22 but the penalty imposed on him is hereby MODIFIED so that the sentence of
imprisonment is deleted. Petitioner is ORDERED to pay a FINE of (1) P6,750.00, equivalent to
double the amount of the check involved in Criminal Case No. CBU-12057, (2) P12,820.00,
equivalent to double the amount of the check involved in Criminal Case No. CBU-12058, and (3)
P11,000.00, equivalent to double the amount of the check involved in Criminal Case No. CBU-
12055, with subsidiary imprisonment24 in case of insolvency to pay the aforesaid fines. Finally, as
civil indemnity, petitioner is also ordered to pay to LPI the face value of said checks totaling
P18,025.00 with legal interest thereon from the time of filing the criminal charges in court, as well as
to pay the costs.1âwphi1.nêt

SO ORDERED.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.