G.R. No.

L-42847 April 29, 1977

THE PEOPLE OF THE PHILIPPINES, petitioner,
vs.
CECILIA QUE YABUT and HON. JESUS DE VEGA, as Judge of the Court
of First Instance of Bulacan, Branch II, respondents.
G.R. No. L-42902 April 29, 1977
THE PEOPLE OF THE PHILIPPINES,petitioner,
vs.
GEMINIANO YABUT, JR., respondent.
MARTIN, J.:
Two novel questions of law are presented to Us in these petitions to review on
certiorari the quashal orders of the Court of First Instance of Bulacan, sitting at
Malolos, first, the rule on venue or jurisdiction in a case of estafa for postdating
or issuing a check without insufficient funds, and second, whether the new law
on checks punishes the postdating or issuance thereof in payment of a preexisting obligation.
Private respondent Cecilia Que Yabut in L-42847 was accused of estafa by
means of false pretenses before the Court of First Instance of Bulacan,
presided over by respondent Judge Jesus de Vega. The information, docketed
as criminal case 1404, charges:
That during the period from February 22, to February 26,
1975, in the Municipality of Malolos, Province of Bulcan,
Philippines, and within the jurisdiction of this Honorable Court,
the said accused Cecilia Que Yabut, as treasurer of the Yabut
Transit Line, by means of false pretenses and pretending to
have sufficient funds in the Merchants Banking Corporation,
located and doing business in Caloocan City, prepared issued
and make out Check Nos. CB-19035 B, CB-190396 and CB190397, dated February 22, 1975, February 24, 1975 and
February 26, 1975, in the total sum of P6,568.94, drawn
against the Merchants Banking Corporation, payable to
Freeway Tires Supply, owned and operated by Alicia P. Andan,
in payment of articles and merchandise delivered to and
received by said accused, gave and delivered the said checks
to the said Freeway Tires Supply, the said accused Cecilia
Que Yabut well knowing that at the time there was no or
insufficient funds in the said Merchants Banking Corporation,

and upon presentation of the said checks to the bank, the

checks were dishonored and inspite of repeated demands by
the owner of the Freeway Tires Supply to deposit the
necessary funds to cover the checks within the reglementary
period enjoined by law, failed and refused to do so, to the
damage and prejudice of Alicia P. Andan, owner and operator
of the Freeway Tires Supply, in the total amount of P6,568.94.
Instead of entering a plea, respondent Cecilia Que Yabut filed a motion to
quash on September 1, 1975, contending that the acts charged do not
constitute the offense as there is no allegation that the postdated checks were
issued and delivered to the complainant prior to or simultaneously with the
delivery of the merchandise, the crime of estafa not being indictable ,when
checks are postdated or issued in payment of pre-existing obligation; and the
venue was improperly laid in Malolos, Bulacan, because the postdated checks
were issued and delivered to, and received by, the complainant in the City of
Caloocan, where she (respondent Que Yabut) holds office.
An opposition was interposed by the People, maintaining that the new law on
checks (Rep. Act 4885, amending Art. 315, par. 2 (d), Revised Penal Code),
penalizes the postdating or issuance thereof in payment of pre-existing
obligation and that the Malolos court can exercise jurisdiction over the case,
since the last ingredient of the offense, i.e., damage, transpired in Bulacan
(residence of complainant) after the dishonor of the checks for lack of funds.
Judge Jesus de Vega quashed the information, as prayed for by respondent
Que Yabut, on November 10, 1975 for the reason "that the proper venue in
this case is Caloocan City and not Bulacan." Whether estafa lies for postdating
or issuing a check in payment of a pre-existing obligation was not by
respondent Judge.
The People's motion for reconsideration of this dismissal order was denied on
January 12, 1976.
The other private respondent, Germiniano Yabut, Jr. (L-42902), husband of
respondent Cecilia Que Yabut, stood charged in criminal case 1405-M before
the Court of First Instance of Bulacan, presided over by Judge Edgardo L.
Paras, of the crime of estafa under Art. 315, par. 2 (d) of the Revised Penal
Code in that:
(D)uring the period from February 23 to April 9, 1975, in the
municipality of Malolos, Province of Bulacan, Philippines, and
within the jurisdiction of this Honorable Court, the said
accused Geminiano Yabut, Jr., as presided of the Yabut

Transit Line, by means of false pretenses and pretending to

have sufficient funds in the Merchants Banking Corporation
and Manufacturers Bank and Trust Company, located and
doing business in Caloocan City, prepared, issued and make
out Check Nos. CB-192042 B, CB-192043 B, 423123, CB191988 B, 423124, CB-192044 B, CB-192045 B, CB-193737
B, CB-193738 B, CB-193739 B, CB-199953 B, CB-199954 B,
CB-199955 B, and CB-199956 B, dated February 23, 26, 27,
March 1, 3, 10, 11, 12, April 4, 7, 8 and 9, 1975 in the total
sum of P37,206.00,drawn against the Merchants Banking
Corporation and Manufacturers Bank and Trust Company,
payable to the Free Tires Supply and Free Caltex Station,
owned and operated by Alicia P. Andan, in payment articles
and merchandise delivered to and received by said accused,
gave and delivered the said checks to said Freeway Tires
Supply and Freeway Caltex Station, the said accused
Geminiano Yabut, Jr. well knowing that at the time there was
no or insufficient funds in the said Merchants Banking
Corporation and Manufacturers Bank and Trust Company, and
upon presentation of the said checks to the bank, the checks
were dishonored and inspite of repeated demands by the
owner of the Freeway Tires Supply and Freeway Caltex
Station to deposit the necessary funds to cover the cheeks
within the reglementary period enjoined by law, failed and
refused to do so, to the damage and Prejudice of Alicia P.
Andan, owner and operator of the Freeway Tires Supply and
Freeway Caltex Station in the total sum of P37,206.00.
Like his wife, respondent Geminiano Jr. moved to quash the information on
two grounds: (1) the facts recited do not constitute an offense because the
checks were issued in payment of a pre-existing obligation; and (2) the venue
was improperly laid, considering that the postdated checks were issued and
delivered to and received by the complainant in City of Caloocan, where
respondent holds office.
On October 13, 1975, Judge Paras quashed the information because "(t)he
elements of the crime (issuance of the rubber check, attempted encashment,
and refusal to honor) alleged in the Information all took place within the
territorial jurisdiction, not of Bulacan, but of Caloocan City."
The People moved for reconsideration, but on February 9, 1976, the motion
was denied.
Hence, the two petitions for review on certiorari were filed by the People of the
Philippines.

We find both petitions to be impressed with merits.

1. Estafa by postdating or issuing a bad check under Art. 315, par. 2 (d) of the
Revised Penal Code may be a transitory or continuing offense. 1 Its basic
elements of deceit and damage 2 may independently arise in separate places.
In the event of such occurrence, the institution of the criminal action in either
place is legally allowed. Section 14(a), Rule 110 of the Revised Rules of Court
provides: "In all criminal prosecutions the action shall be instituted and tried in
the Court of the municipality or province wherein the offense was committed
or any one of the essential ingredients thereof took place." The theory is that a
person indicted with a transitory offense may be validly tried in any jurisdiction
where the offense was in part committed. 3 However, if all the acts material and
essential to the crime and requisite of its consummation occurred in one
municipality or province, the court of that municipality or province has the sole
jurisdiction to try the case.
The estafa charged in the two informations involved in the case before Us
appears to be transitory or continuing in nature. Deceit has taken place in
Malolos, Bulacan, while the damage in Caloocan City, where the checks were
dishonored by the drawee banks there. Jurisdiction can, therefore, be
entertained by either the Malolos court or the Caloocan court. While the
subject checks were written, signed, or dated in Caloocan City, they were not
completely made or drawn there, but in Malolos, Bulacan, where they were
uttered and delivered. That is the place of business and residence of the
payee. The place where the bills were written, signed, or dated does not
necessarily fix or determine the place where they were executed. What is of
decisive importance is the delivery thereof. The delivery of the instrument is
the final act essential to its consummation as an obligation. 4 An undelivered
bill or note is inoperative. Until delivery, the contract is revocable. 5 And the
issuance as well as the delivery of the check must be to a person who takes it
as a holder, which means "(t)he payee or indorsee of a bill or note, who is in
possession of it, or the bearer thereof." 6 Delivery of the check signifies
transfer of possession, whether actual or constructive, from one person to
another with intent to transfer title thereto. 7 Thus, the penalizing clause of the
provision of Art. 315, par. 2 (d) states: "By postdating a check, or issuing a
check in payment of an obligation when the offender had no funds in the bank,
or his funds deposited therein were not sufficient to cover the amount of the
check." Clearly, therefore, the element of deceit thru the issuance and delivery
of the worthless checks to the complainant took place in Malolos, Bulcan,
conferring upon a court in that locality jurisdiction to try the case.
Modesto Yambao's receipt of the bad checks from Cecilia Que Yabut or
Geminiano Yabut Jr. in Caloocan City cannot, contrary to the holding of the
respodent Judges, be licitly taken as delivery of the checks to the complainant
Alicia P. Andan at Caloocan City to fix the venue there. He did not take delivery
of the checks as holder, i.e., as "payee" or "indorse". And there appears to be

no contract of agency between Yambao and Andan so as to bind the latter for
the acts of the former. Alicia P. Andan declared in that sworn testimony before
the investigating fiscal that Yambao is but her "messenger" or "part-time
employee." 8 There was no special fiduciaryrelationship that permeated their
dealings. For a contract of agency to exist, the consent of both parties is
essential, the principal consent of both parties is essential, the principal
consents that the other party, the agent, shall act on his behalf, and the agent
consents so to act. 9 It must exist as a fact. The law makes no presumption
thereof. The person alleging it has the burden of proof to show, not only the
fact of its existence, but also its nature and extent. 10 This is more imperative
when it is considered that the transaction dealt with involves checks, which are
not legal tender, and the creditor may validly refuse the same as payment of
obligation. 11
Furthermore, the place of business of the offended party, the Freeway Tires
Supply and Freeway Caltex Station, is at Malolos, Bulacan, from where the tire
and gas purchases were amade by the two private respondents. As a
consequence, payment thereof should be considered effected at Malolos,
Bulacan. "(I)f the undertaking is to deliver a determinate thing, the payment
shall be made wherever the thing might be at the moment the obligation was
constituted. 12 The receipt by the two private respondents at Caloocan City of
the tires and gas supplies from Malolos, Bulacan, signifies but the
consummation of the contract between the parties. It was the result of an
obligationpreviously contracted at Malolos, Bulacan. 13 The averments in the
informations do not indicate that the complainant is an ambulant peddler of
tires and gas, but maintains a fixed and determinate place of business at
Malolos, Bulacan. Obligations, therefore, contracted as regards her business
must presumptively be at her place of business.
2. In general terms, a prosecution for issuing a worthless check with intent to
defraud is in the county where the check was uttered and delivered. 14 Thus,
where a check was drawn in Merced County and made payable at a Merced
County bank, but delivered to a merchant in Sacramento County by the
drawer's agent, the Sacramento County courts and had jurisdiction of a
prosecution against the drawer for uttering a check without funds or credit with
intent to defraud. 15 The venue of the offense lies at the place where the check
was executed and delivered to the payee. 16 Since in the instant case it was in
Malolos, Bulacan where the checks were uttered and delivered to complaint
Andan, at which place, her business and residence were also located, the
criminal prosecution of estafa may be lodged therein. 17 As earlier pointed out,
the giving of the checks by the two private respondents in Caloocan City to
Modesto Yambo cannot be treated as valid delivery of the checks, because
Yambo is a mere "messenger" or "part-time employee" and not an agent of
complaint Alicia P. Andan.

3. The next point of inquiry is whether or not the postdating or issuing of a

worthless check in payment of a pre-existing obligation constitutes estafa
under Art. 315, par. 2 (d) of the Revised Penal Code. We feel, however, that
due to the absence of concrete evidence on the specific nature of the
obligation assumed or supposedly discharged by the issuance of the bad
checks, resolution of this controversial issue on the basis of the averments in
the criminal informations alone is not yet ripe. As revealed by the pleadings,
the parties are at divergence on the character of the obligation for which the
private respondents issued the checks intended as payment thereof. Private
respondents maintain that the obligation is a pre-existing one. The
prosecution, on the other hand, represented to the trial courts in its Opposition
to the Motions to Quash: "We will prove by our evidence that said checks
are not in payment of a pre-existing obligation." 18 The deferment of the
resolution becomes more imperative when it is considered that the question
raised is one of first impression and of consequential far-ranging effects on
transactions in checks.
4. Ad interim, We hold that the facts charged in the informations against
private respondents, contrary to their claim, constitute estafa under Art. 315,
par. 2 (d) of the Revised Penal Code. In considering a motion to quash based
on the ground "(t)hat the facts charged do not constitute an offense," 19 the
point of resolution is whether the facts alleged, if hypothetically admitted,
would meet the essential elements of the offense as defined in the law. 20 The
facts alleged in the criminal charge should be taken as they are. 21 An analysis
of the two informations involved in the present case convinces Us that the
facts charged therein substantially constitute the integral elements of the
offense as defined in the law. And the averments in the two informations
sufficiently inform the two private respondents of the nature and cause of the
accusations against them, thereby defeating any constitutional objection of
lack of notice. 22
ACCORDINGLY, the appealed orders of the respondent trial courts ordering
the quashal of the estafa informations against the two private respondents in
the petitions at bar are hereby reversed and set aside. The informations, as
they are, substantially conform with the crime charged as defined in the law.
Let the arraignment of the private respondents in the criminal cases below be
set at the earliest date and, thereafter, the trial on the merits to proceed
immediately. No costs.

G.R. No. 16454

September 29, 1921

GEORGE A. KAUFFMAN, plaintiff-appellee,

vs.
THE PHILIPPINE NATIONAL BANK, defendant-appellant.
STREET, J.:
At the time of the transaction which gave rise to this litigation the plaintiff,
George A. Kauffman, was the president of a domestic corporation engaged
chiefly in the exportation of hemp from the Philippine Islands and known as the
Philippine Fiber and Produce Company, of which company the plaintiff
apparently held in his own right nearly the entire issue of capital stock. On
February 5, 1918, the board of directors of said company, declared a dividend
of P100,000 from its surplus earnings for the year 1917, of which the plaintiff
was entitled to the sum of P98,000. This amount was accordingly placed to his
credit on the books of the company, and so remained until in October of the
same year when an unsuccessful effort was made to transmit the whole, or a
greater part thereof, to the plaintiff in New York City.
In this connection it appears that on October 9, 1918, George B. Wicks,
treasurer of the Philippine Fiber and Produce Company, presented himself in
the exchange department of the Philippine National Bank in Manila and
requested that a telegraphic transfer of $45,000 should be made to the plaintiff
in New York City, upon account of the Philippine Fiber and Produce Company.
He was informed that the total cost of said transfer, including exchange and
cost of message, would be P90,355.50. Accordingly, Wicks, as treasurer of the
Philippine Fiber and Produce Company, thereupon drew and delivered a check
for that amount on the Philippine National Bank; and the same was accepted
by the officer selling the exchange in payment of the transfer in question. As
evidence of this transaction a document was made out and delivered to Wicks,
which is referred to by the bank's assistant cashier as its official receipt. This
memorandum receipt is in the following language:

October 9th, 1918.

CABLE TRANSFER BOUGHT FROM

PHILIPPINE NATIONAL BANK,
Manila, P.I.
Stamp P18
Foreign
$45,000.

Amount
3/8 %

Rate
P90,337.50

Payable through Philippine National Bank, New York. To G. A.

Kauffman, New York. Total P90,355.50. Account of Philippine Fiber
and Produce Company. Sold to Messrs. Philippine Fiber and Produce
Company, Manila.

(Sgd.) Y LERMA,
Manager, Foreign Department.

On the same day the Philippine National Bank dispatched to its New York
agency a cablegram to the following effect:
Pay George A. Kauffman, New York, account Philippine Fiber Produce
Co., $45,000. (Sgd.) PHILIPPINE NATIONAL BANK, Manila.
Upon receiving this telegraphic message, the bank's representative in New
York sent a cable message in reply suggesting the advisability of withholding
this money from Kauffman, in view of his reluctance to accept certain bills of
the Philippine Fiber and Produce Company. The Philippine National Bank
acquiesced in this and on October 11 dispatched to its New York agency
another message to withhold the Kauffman payment as suggested.
Meanwhile Wicks, the treasurer of the Philippine Fiber and Produce Company,
cabled to Kauffman in New York, advising him that $45,000 had been placed
to his credit in the New York agency of the Philippine National Bank; and in
response to this advice Kauffman presented himself at the office of the
Philippine National Bank in New York City on October 15, 1918, and
demanded the money. By this time, however, the message from the Philippine
National Bank of October 11, directing the withholding of payment had been
received in New York, and payment was therefore refused.
In view of these facts, the plaintiff Kauffman instituted the present action in the
Court of First Instance of the city of Manila to recover said sum, with interest
and costs; and judgment having been there entered favorably to the plaintiff,
the defendant appealed.
Among additional facts pertinent to the case we note the circumstance that at
the time of the transaction above-mentioned, the Philippines Fiber and
Produce Company did not have on deposit in the Philippine National Bank
money adequate to pay the check for P90,355.50, which was delivered in
payment of the telegraphic order; but the company did have credit to that
extent, or more, for overdraft in current account, and the check in question was
charged as an overdraft against the Philippine Fiber and Produce Company

and has remained on the books of the bank as an interest-bearing item in the
account of said company.
It is furthermore noteworthy that no evidence has been introduced tending to
show failure of consideration with respect to the amount paid for said
telegraphic order. It is true that in the defendant's answer it is suggested that
the failure of the bank to pay over the amount of this remittance to the plaintiff
in New York City, pursuant to its agreement, was due to a desire to protect the
bank in its relations with the Philippine Fiber and Produce Company, whose
credit was secured at the bank by warehouse receipts on Philippine products;
and it is alleged that after the exchange in question was sold the bank found
that it did not have sufficient to warrant payment of the remittance. In view,
however, of the failure of the bank to substantiate these allegations, or to offer
any other proof showing failure of consideration, it must be assumed that the
obligation of the bank was supported by adequate consideration.
In this court the defense is mainly, if not exclusively, based upon the
proposition that, inasmuch as the plaintiff Kauffman was not a party to the
contract with the bank for the transmission of this credit, no right of action can
be vested in him for the breach thereof. "In this situation," we here quote
the words of the appellant's brief, "if there exists a cause of action against
the defendant, it would not be in favor of the plaintiff who had taken no part at
all in the transaction nor had entered into any contract with the plaintiff, but in
favor of the Philippine Fiber and Produce Company, the party which contracted
in its own name with the defendant."
The question thus placed before us is one purely of law; and at the very
threshold of the discussion it can be stated that the provisions of the
Negotiable Instruments Law can come into operation there must be a
document in existence of the character described in section 1 of the Law; and
no rights properly speaking arise in respect to said instrument until it is
delivered. In the case before us there was an order, it is true, transmitted by
the defendant bank to its New York branch, for the payment of a specified sum
of money to George A. Kauffman. But this order was not made payable "to
order or "to bearer," as required in subsection (d) of that Act; and inasmuch as
it never left the possession of the bank, or its representative in New York City,
there was no delivery in the sense intended in section 16 of the same Law. In
this connection it is unnecessary to point out that the official receipt delivered
by the bank to the purchaser of the telegraphic order, and already set out
above, cannot itself be viewed in the light of a negotiable instrument, although
it affords complete proof of the obligation actually assumed by the bank.
Stated in bare simplicity the admitted facts show that the defendant bank for a
valuable consideration paid by the Philippine Fiber and Produce Company
agreed on October 9, 1918, to cause a sum of money to be paid to the plaintiff
in New York City; and the question is whether the plaintiff can maintain an

action against the bank for the nonperformance of said undertaking. In other
words, is the lack of privity with the contract on the part of the plaintiff fatal to
the maintenance of an action by him?
The only express provision of law that has been cited as bearing directly on
this question is the second paragraph of article 1257 of the Civil Code; and
unless the present action can be maintained under the provision, the plaintiff
admittedly has no case. This provision states an exception to the more general
rule expressed in the first paragraph of the same article to the effect that
contracts are productive of effects only between the parties who execute them;
and in harmony with this general rule are numerous decisions of this court
(Wolfson vs. Estate
of
Martinez,
20
Phil.,
340;
Ibaez
de
Aldecoa vs. Hongkong and Shanghai Banking Corporation, 22 Phil., 572, 584;
Manila Railroad Co. vs. Compaia Trasatlantica and Atlantic, Gulf and Pacific
Co., 38 Phil., 873, 894.)
The paragraph introducing the exception which we are now to consider is in
these words:
Should the contract contain any stipulation in favor of a third person,
he may demand its fulfillment, provided he has given notice of his
acceptance to the person bound before the stipulation has been
revoked. (Art. 1257, par. 2, Civ. Code.)
In the case of Uy Tam and Uy Yet vs. Leonard (30 Phil., 471), is found an
elaborate dissertation upon the history and interpretation of the paragraph
above quoted and so complete is the discussion contained in that opinion that
it would be idle for us here to go over the same matter. Suffice it to say that
Justice Trent, speaking for the court in that case, sums up its conclusions upon
the conditions governing the right of the person for whose benefit a contract is
made to maintain an action for the breach thereof in the following words:
So, we believe the fairest test, in this jurisdiction at least, whereby to
determine whether the interest of a third person in a contract is a
stipulation pour autrui, or merely an incidental interest, is to rely upon
the intention of the parties as disclosed by their contract.
If a third person claims an enforcible interest in the contract, the
question must be settled by determining whether the contracting
parties desired to tender him such an interest. Did they deliberately
insert terms in their agreement with the avowed purpose of conferring
a favor upon such third person? In resolving this question, of course,
the ordinary rules of construction and interpretation of writings must be
observed. (Uy Tam and Uy Yet vs. Leonard, supra.)

Further on in the same opinion he adds: "In applying this test to a

stipulation pour autrui, it matters not whether the stipulation is in the nature of
a gift or whether there is an obligation owing from the promise to the third
person. That no such obligation exists may in some degree assist in
determining whether the parties intended to benefit a third person, whether
they stipulated for him." (Uy Tam and Uy Yet vs. Leonard, supra.)
In the light of the conclusion thus stated, the right of the plaintiff to maintain the
present action is clear enough; for it is undeniable that the bank's promise to
cause a definite sum of money to be paid to the plaintiff in New York City is a
stipulation in his favor within the meaning of the paragraph above quoted; and
the circumstances under which that promise was given disclose an evident
intention on the part of the contracting parties that the plaintiff should have the
money upon demand in New York City. The recognition of this unqualified right
in the plaintiff to receive the money implies in our opinion the right in him to
maintain an action to recover it; and indeed if the provision in question were
not applicable to the facts now before us, it would be difficult to conceive of a
case arising under it.
It will be noted that under the paragraph cited a third person seeking to
enforce compliance with a stipulation in his favor must signify his acceptance
before it has been revoked. In this case the plaintiff clearly signified his
acceptance to the bank by demanding payment; and although the Philippine
National Bank had already directed its New York agency to withhold payment
when this demand was made, the rights of the plaintiff cannot be considered to
as there used, must be understood to imply revocation by the mutual consent

of the contracting parties, or at least by direction of the party purchasing he

exchange.
In the course of the argument attention was directed to the case of
Legniti vs. Mechanics, etc. Bank (130 N.E. Rep., 597), decided by the Court of
Appeals of the State of New York on March 1, 1921, wherein it is held that, by
selling a cable transfer of funds on a foreign country in ordinary course, a bank
incurs a simple contractual obligation, and cannot be considered as holding
the money which was paid for the transfer in the character of a specific trust.
Thus, it was said, "Cable transfers, therefore, mean a method of transmitting
money by cable wherein the seller engages that he has the balance at the
point on which the payment is ordered and that on receipt of the cable
directing the transfer his correspondent at such point will make payment to the
beneficiary described in the cable. All these transaction are matters of
purchase and sale create no trust relationship."
As we view it there is nothing in the decision referred to decisive of the
question now before us, wish is merely that of the right of the beneficiary to
maintain an action against the bank selling the transfer.
Upon the considerations already stated, we are of the opinion that the right of
action exists, and the judgment must be affirmed. It is so ordered, with costs
against the appellant. Interest will be computed as prescribed in section 510 of
the Code of Civil Procedure.