Lao V CA Digest

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Lao v CA Digest

FACTS:
 Petitioner Lina Lim Lao was a junior officer of Premiere Investment House (Premiere) in its Binondo
Branch. As such officer, she was authorized to sign checks for and in behalf of the corporation. In
the course of the business, she met complainant Father Artelijo Pelijo, the provincial treasurer of
the Society of the Divine Word through Mrs. Rosemarie Lachenal, a trader for Premiere. Father
Palijo was authorized to invest donations to the society and had been investing the society's money
with Premiere. Father Palijo had invested a total of P514,484.04, as evidenced by the Confirmation
of Sale No. 82-6994 (Exh. 'A') dated July 8, 1993. Father Palijo was also issued Traders Royal
Bank (TRB) checks in payment of interest:
Check # 299961 Date: Oct. 7, 1993 Amount: P150,000.00
Check # 299962 Date: Oct. 7, 1983 Amount: P150,000.00
Check # 323835 Date: Oct. 7, 1983 Amount: P26,010.73
 All the checks were issued in favor of Artelijo A. Palijo and signed by petitioner and Teodulo
Asprec, who was the head of operations. Further evidence of the transaction was the
acknowledgment of postdated checks dated July 8, 1983 and the cash disbursement voucher.
 When Father Palijo presented the checks for encashment, the same were dishonored for the
reason 'Drawn Against Insufficient Funds' (DAIF). Father Palijo immediately made demands on
Premiere to pay him the necessary amounts. He first went to the Binondo Branch but was referred
to the Cubao Main Branch where he was able to talk with the President, Mr. Cariño. For his efforts,
he was paid P5,000.00. Since no other payment followed, Father Palijo wrote Premiere a formal
letter of demand. Subsequently, Premiere was placed under receivership.
 Petitioner and Asprec were sued by Father Pelijo. However, the notice of dishonor was sent to the
Cubao branch(main office) and not in Binondo branch.
 Petitioner’s defense was that she did not know the insufficiency of funds and did not receive the
notice of dishonor so she had no actual notice of the bouncing of the checks.
ISSUE:
1. Whether or not the petitioner not knowing there was insufficient funds during the time she signed
the check can exculpate her from the crime? YES
2. Whether or not the notice of dishonor being sent to the Cubao branch and not to the Binondo
Branch constituted constructive notice and was binding on the appellant as notice? NO

HELD:
Justice Luis B. Reyes, enumerated the elements of the offense defined in the first paragraph of Section 1
of B.P. 22, thus:
 That a person makes or draws and issues any check.
 That the check is made or drawn and issued to apply on account or for value.
 That the person who makes or draws and issues the check knows 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.
 That the 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.

1. Knowledge of the insufficiency of funds is an essential element that has to be proved before a
person can be convicted of violating BP Blg No 22

Although the offense is covered by a special law and intent is not necessary to convict a person of
violating a special law, nevertheless, BP Blg. 22 required that “the person who makes or draws and
issues the check knows at the time of issue that he does not have sufficient funds”.

This meant that knowledge had to be proven as it was an element in the crime. There is a
presumption of knowledge after the fact of the drawing of the check and refusal due to insufficiency
of funds but this is only a prima facie presumption and can be rebutted by the appellant

In this case, it was proven through her testimony that as part of the corporation’s procedure, she
had to sign blank checks and that it was Asprec, which supplied the names of the payee and the
amounts to be drawn.

Furthermore, the testimony of the former Treasurer of Premiere, Veronilyn Ocampo, proved that it
was the sole responsibility of the Treasury Department to fund the checks. It was not part of the
appellants job to find out if the checks were well-funded, hence she could not have had knowledge
that she was signing a bum check.
2. The responsibility under BP Blg No. 22 is personal, the petitioner should have had actual
knowledge of the bouncing of the check. But, this information was withheld by Ms. Ocampo
according to her testimony because Premiere was already in a crisis because of the mass
withdrawals of investment by their clients. Also, the notice of dishonor would have given petitioner 5
days to pay the payee the amount, which could not be drawn due to insufficiency of funds. Because
the notice was not given to her, she was not able to avail of the 5 days grace period to escape
culpability.

Petitioner Lina Lim Lao is ACQUITTED.

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