472 Phil. 178 office.

[3] On the custody and disposition of the guaranty deposit of

P216,250.00, the parties agreed, as follows:
SECOND DIVISION … The Deposit shall be retained by the LESSOR as security for the faithful
observance and performance by the LESSEE of the terms and conditions and
G.R. No. 149695, April 28, 2004 stipulations in this Agreement and any renewal thereof. The Deposit shall be
returned to the LESSEE at the termination of lease without any interest, less
WILLY G. SIA, APPELLEE, VS. PEOPLE OF THE PHILIPPINES, such sums which may be due to the LESSOR under the terms of this
APPELLANT. Agreement without prejudice to whatever cause of action the LESSOR may
have against the LESSEE under this Agreement.
DECISION
2. The provision of paragraph 1 of this Article notwithstanding, if the
LESSEE is in default under any of the provisions of this Agreement
CALLEJO, SR., J.: including the events of Article XV, then the LESSOR may, at its option,
apply the Deposit or any part thereof to claims for money or damages it may
On June 4, 1982, the Consolidated Orient Leasing and Finance Corporation have against the LESSEE, or to arrearages in the rents and/or the Stipulated
(COLF), as Lessor, and Willy G. Sia, the sole proprietor of WGS Lost Value as the LESSOR may deem necessary and, unless the LESSOR
Construction Specialists, as Lessee, executed a Lease Agreement,[1] for a shall exercise its rights and terminate this lease hereby created under sub-
period of eighteen (18) months, covering construction equipments described paragraph 1.3 of paragraph 1 of Article XV, the LESSEE shall on written
as follows: demand by the LESSOR pay to the LESSOR the full amount of the Deposit
or such amount which shall cover the full amount referred to in Item 6 of the
ONE (1) UNIT KOMATSU PAYLOADER,
Schedule which shall serve as security and be considered the Deposit in
JH65C MODEL, 2-3/4 cu. yd.
accordance with the provisions of paragraph 1 of this Article.
Chassis No.: JH65C-0347
Engine No.: 629676
3. In case the LESSEE gives the LESSOR other collaterals or securities in
addition to the Deposit all of such securities or collaterals including the
ONE (1) UNIT KOMATSU BULLDOZER MODEL D80A-12
Deposit shall be deemed to secure all claims which are now or may hereafter
Serial No.: D80A-12-19495
be owing to the LESSOR by the LESSEE.[4]
Motor No.: NH220-0969N21515
The parties further agreed that, in case Sia defaulted in the payment of the
agreed rentals or failed to observe the terms and conditions of the
ONE (1) UNIT YUTANI POCLAIN MODEL YS 650
Agreement, the following provisions shall apply:
Serial No.: 1283
Motor No.: 92621[2]
1. If the LESSEE fails to pay the rents as provided for in Article
Under the lease agreement, Sia was obliged to deposit with the COLF, upon
III hereof after the same becomes due and payable or any other
the execution thereof, the amount of P216,250.00 to guaranty the payment of,
sums and moneys due and payable under this Agreement or if
inter alia, the agreed rental of P44,980.00 a month payable in the COLF
the LESSEE fails to observe or perform any or all the
provisions hereof, or if the LESSOR on reasonable grounds,
 considers the LESSEE as financially incapable of meeting its performance of Sia’s obligations to the COLF under the lease agreement.[6]
obligations herein, then the LESSOR shall, without prejudice to
any pre-existing liability of the LESSEE to the LESSOR, have Sia remitted to the COLF the agreed guaranty deposit of P216,250.00. He
the right to avail of any or all of the following remedies without also issued and delivered to the COLF, upon the execution of the lease
giving any prior notice or demand to the LESSEE; agreement in 1982, eighteen (18) postdated checks in the amount of
P44,980.00 each, payable to the COLT, drawn against his account with the
1.1 To declare a part or the total amount of the rents and all other moneys, Rizal Commercial Banking Corporation (RCBC). Each check was to be
costs and expenses under this Agreement immediately due and payable encashed or deposited by the COLF in its account on their respective due
by the LESSEE; dates in payment of the monthly rental of the equipment.[7] At the time, the
1.2 To take possession of the property or demand its return. bank had extended credit facilities to the petitioner.[8]
1.3 To terminate this lease and to demand from the LESSEE the full
amount of the Stipulated Loss Value and to claim from the LESSEE The COLF deposited the checks for the rentals of July to December 1992,
compensation for all losses and damages including but not limited to and these checks were duly honored by the drawee bank.[9] The COLF
loss of profits. thereafter deposited, in its account, Check No. 233533 postdated January 4,
1983 for the amount of P44,980.00 in payment for the January 1983 rental of
2. The remedies provided in sub-paragraph 1.1 and 1.2 of the equipment.[10] This check was, however, dishonored by the drawee bank
paragraph 1 of this Articles shall not relieve the LESSEE from for “insufficient funds.” The COLF wrote Sia on January 5, 1983, informing
any other liability under this Agreement, including but not the latter of the dishonor of the check and requesting for the replacement
limited to liability for damages. thereof.[11]

3. Upon the occurrence of any of the following events, the On March 4, 1983, COLF deposited in its account Check No. 233534
LESSOR may, without any prior notice or demand to the postdated March 4, 1983 in the amount of P44,980.00 in payment for the
LESSEE, avail of any or all of the remedies under paragraph 1 March 1983 rental.[12] However, the check was, again, dishonored by the
of this Article, and the effects thereof will be the same as those drawee bank, this time for the reason “account closed.”[13] On March 7, 1983,
provided for herein: the COLF wrote Sia informing him of the dishonor of the check.[14] The
COLF finally decided to terminate the lease and, on March 10, 1983, wrote
2.1 suspension of business, bankruptcy or dissolution of the LESSEE; or Sia informing him that it was terminating the lease agreement.[15] Sia
2.2 levy or attachment of all or substantially all of the assets of the received the letter but did not respond.[16]
LESSEE, regardless of whether or not the same affects the Property, or
2.3 assignment of or compromise affecting all or substantially all of the Despite the termination of the lease, the COLF still deposited Check No.
LESSEE’s assets to or with its creditor; or 233535 in the amount of P44,980.00 on April 4, 1983. The check, which was
2.4 If any judgment against the LESSEE shall remain unsatisfied for more drawn by Sia against his account with the RCBC in payment for the April
than ten (10) days; or 1983 rental, was dishonored by the drawee bank, again for the reason
2.5 If the LESSEE shall abandon the Property.[5] “account closed.” On April 6, 1983, COLF once more wrote to Sia,
Sia and his wife, Judy, executed a surety agreement in which they bound and informing him of the dishonor of the check and requesting for a replacement
obliged themselves, jointly and severally, to insure the proper and due as soon as possible.[17] The COLF did not receive any reply.
 THOUSAND SEVEN HUNDRED EIGHTY PESOS (P494,780.00), and
On May 17, 1983, the COLF filed a complaint for replevin and damages the incidental charges above-mentioned in case the equipment are no
against Sia with the Regional Trial Court of Makati, docketed as Civil Case longer available or the same have been impaired so substantially that
No. 3958. It prayed that, after due proceedings, judgment be rendered against recovery would be futile;
Sia in its favor: (e) The costs of this suit; and

1. Directing the Sheriff to take over the possession and custody of 3. Ordering defendants-sureties Willy G. Sia and Judy A. Sia,
the following: jointly and severally, to pay the above-stated amounts to
plaintiff in case defendant WGS Construction Specialists should
One (1) Unit Komatsu Payloader JH65 C Model 2-3/4 cu. yd. fail to do so.[18]

Chassis No. JH65C-0347 On June 2, 1983, the court issued an Order in Civil Case No. 3958 granting
Engine No. 629676 the plaintiff’s plea for a writ of replevin. The court thereafter issued a Writ of
Seizure against the plaintiff’s property with the requisite bond therefor. Sia
received the complaint and summons on October 21, 1983, but failed to file
One (1) Unit Bulldozer Model D80A-12 (Komatsu) an answer. On motion of the plaintiff, Sia was declared in default.[19] The
plaintiff adduced its evidence, ex parte, on February 8, 1984. The sheriff,
Serial No. D80A-12-19495 however, failed to locate the equipment declared in the complaint and failed
Motor No. NH220-0969N21515 to seize and take possession thereof.[20]

One (1) Unit Yutani Poclain Model YS 650 In the meantime, the COLF charged Sia with violating Batas Pambansa
(B.P.) Blg. 22 by reason of the dishonor of the checks postdated January 4,
Serial No. 1283 1983, March 4, 1983 and April 4, 1983, respectively. On August 3, 1984,
Motor No. 92621 three Informations were filed with the RTC of Makati charging Sia with
violating B.P. Blg. 22, docketed as Criminal Cases Nos. 11865, 11866, and
11867. The accusatory portions of the said Informations are as follows:
That on or about June 1982, in the Municipality of Makati, Metro Manila,
2. Ordering defendant WGS Construction Specialists to pay the
Philippines and within the jurisdiction of this Honorable Court, said accused
plaintiff:
did, then and there, willfully, unlawfully and feloniously make, draw and
issue in favor of Consolidated Orient Leasing & Finance Corporation
(a) Accrued rental in the amount of ONE HUNDRED SEVENTY-NINE
represented by Eduardo R. Alvarez, a check numbered 233532, drawn
THOUSAND NINE HUNDRED TWENTY PESOS (P179,920.00);
against the Rizal Commercial Banking Corporation (RCBC), a duly
(b) 3% of the above amount as penalty per month from January, 1983, up to
established domestic banking institution, in the amount of P44,980.00
the present;
Philippine Currency, dated January 4, 1983 in payment of an obligation,
(c) 30% of the above amount as attorney’s fees;
knowing fully well at the time of issue that he did not have any sufficient
(d) The value of the property, which is FOUR HUNDRED NINETY-FOUR
funds in the drawee bank for the payment of such check; that upon
presentation of said check to the said bank for payment the same was Philippine Currency, dated April 4, 1983 in payment of an obligation,
dishonored for the reason that the drawer thereof accused Willy G. Sia did knowing fully well at the time of issue that he did not have any funds in the
not have sufficient funds therein and despite notice of dishonor thereof, drawee bank for the payment of such check; that upon presentation of said
accused failed and refused and still fails and refuses to redeem or make good check to said bank for payment the same was dishonor (sic) for the reason
said check, to the damage and prejudice of the said Consolidated Orient that the drawee thereof, accused Willy G. Sia did not have funds therein and
Leasing & Finance Corporation is (sic) the aforesaid sum. despite notice of dishonor thereof, accused failed and refused and still fails
and refuses to redeem or make good said check, to the damage and prejudice
Contrary to law. of the said Consolidated Orient Leasing & Finance Corporation in the
Crim. Case No. 11865 aforesaid sum.

That on or about June 1982, in the Municipality of Makati, Metro Manila, Contrary to law.
Philippines and within the jurisdiction of this Honorable court, said accused Crim. Case No. 11867[21]
did, then and there, willfully, unlawfully and feloniously make, draw and When arraigned, Sia, assisted by counsel, entered a plea of not guilty.
issue in favor of Consolidated Orient Leasing & Finance Corporation
represented by Eduardo R. Alvarez, a check numbered 233534 drawn against The Case for Petitioner Sia
the Rizal Commercial Banking Corporation (RCBC), a duly established
banking institution, in the amount of P44,980.00 Philippine Currency, dated Sia testified that, upon the execution of the lease agreement in 1982, he drew
March 4, 1983 in payment of an obligation, knowing fully well at the time of and delivered to COLF eighteen (18) postdated checks drawn against his
issue that he did not have any funds in the drawee bank for the payment of account with the RCBC, each check in the amount of P44,980.00
said check, that upon presentation of said check to the drawee bank the same corresponding to the rental for the leased property.[22] Every month, as each
was dishonored for the reason that the drawer thereof, accused Willy G. Sia check fell due, he informed the COLF whether to deposit or encash the
did not have funds therein and despite notice of dishonor thereof, accused checks, or to apply the current deposit for the payment of the rental due.[23]
failed and refused and still fails and refuses to redeem or make good said He made good the first six postdated checks but failed to fund the ensuing
check, to the damage and prejudice of the said Consolidated Orient Leasing checks for January, March, and April 1983. He reasoned that his financial
& Finance Corporation in the aforesaid sum. condition was adversely affected by the implementation of his project in
Nueva Vizcaya and the RCBC had since then refused to give him credit.[24]
Contrary to law. To facilitate payment of the checks, Sia then asked COLF, through its
Crim. Case No. 11866 assistant manager, Go Hong Ko, to apply his guaranty deposit for the
postdated checks to cover the rentals from January 1983. Go Hong Ko told
That on or about June 1982, in the Municipality of Makati, Metro Manila, Sia that there would be no problem as his guaranty deposit of P216.250.00
Philippines and within the jurisdiction of this Honorable Court, said accused was still intact and more than enough to answer for the said checks.[25] Thus,
did, then and there, willfully, unlawfully and feloniously make, draw and Sia no longer funded his account with the drawee bank, thinking that his
issue in favor of Consolidated Orient Leasing & Finance Corporation guaranty deposit would answer for the checks.
represented by Eduardo R. Alvarez, a check numbered 233535, drawn
against the Rizal Commercial Banking Corporation (RCBC), a duly Sia alleged that he never received the January 5, 1983, March 7, 1983 and
established domestic banking institution, in the amount of P44,980.00 April 6, 1983 letters of the COLF, and that the latter never notified him that
the checks postdated January 4, 1983, March 3, 1983 and April 4, 1983, finding Sia guilty beyond reasonable doubt of the crime charged in Criminal
respectively, were deposited with the drawee bank, and that the same were Cases Nos. 11865 and 11866 and acquitting him of the crime charged in
subsequently dishonored by the drawee bank. He was surprised when he Criminal Case No. 11867. The decretal portion of the decision reads:
learned about the charges against him for violation of B.P. Blg. 22 when he WHEREFORE, in view of the foregoing, judgment is hereby rendered
received a subpoena from the Office of the City Prosecutor of Makati, finding accused WILLY G. SIA GUILTY beyond reasonable doubt for
requiring him to submit his counter-affidavit to the criminal complaint of the violation of Batas Pambansa Bilang 22 in Criminal Cases Nos. 11865 and
COLF.[26] Furthermore, he was not informed why his guaranty deposit was 11866 and is sentenced to suffer imprisonment of one (1) year and; to pay a
not applied to the payment of the three dishonored checks.[27] fine of P50,000.00 for each case; and to indemnify complainant the sum of
P89,900.00 with legal interest from the filing of these cases on August 31,
In the meantime, on March 12, 1984, the RTC rendered judgment in Civil 1984 until payment is made.
Case No. 3958, in favor of COLF, the dispositive portion of which reads, as
follows: Anent Criminal Case No. 11867, for the reason aforementioned, judgment is
hereby rendered ACQUITTING accused WILLY G. SIA of the crime
WHEREFORE, judgment is hereby rendered in favor of the plaintiff as charged.
follows:
No costs.[29]
(1) Ordering defendant WGS Construction Specialists to pay plaintiff: Sia filed a motion for the reconsideration of the decision contending that:
a) P179,920.00, representing accrued rentals; I
b) 3% of the above amount as penalty per month from January, 1983, up
to May 17, 1983; THE DECISION OF THIS HONORABLE COURT IN CIVIL CASE NO.
c) P5,000.00 as and for attorney’s fees; 3958 (REGIONAL TRIAL COURT BRANCH CXXXII) DATED MARCH
d) P494,780.00, representing the actual value of the leased property not 12, 1984 WHICH WAS RENDERED BEFORE THE INFORMATIONS IN
recovered, plus interest thereon at the legal rate computed from date THE ABOVE-ENTITLED CASES WERE FILED IN COURT CLEARLY
hereof; SHOW THAT THE OBLIGATION OF THE ACCUSED WAS ALREADY
e) The costs of suit. SETTLED AND PAID THRU THE SECURITY DEPOSIT ALREADY
(2) The guaranty deposit of P216,250.00 made by said defendant shall be MADE AND IN THE POSSESSION OF THE ALLEGED PRIVATE
applied to the satisfaction of the aforementioned amounts. COMPLAINANT.
(3) Ordering defendants Willy G. Sia and Judy A. Sia, jointly and severally,
to pay plaintiff the remaining unpaid balance of the judgment debt which II
defendant WGS Construction Specialists should fail to satisfy.
THE OBLIGATION, IF ANY, OF THE ACCUSED IN THE CASES AT
SO ORDERED.[28] BAR WAS ALREADY PAID OR EXTINGUISHED BY VIRTUE OF THE
The decision became final and executory, Sia having failed to appeal the LAW ON COMPENSATION.
decision.
III
After due trial, the trial court rendered judgment, on November 17, 1995,
THE DECISION OF THIS HONORABLE COURT REQUIRING THE THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED
ACCUSED TO PAY AGAIN THE VALUE OF THE CHECKS DESPITE HAD TOLD THE PRIVATE COMPLAINANT TO APPLY THE
THE FINAL AND EXECUTED DECISION OF THIS HONORABLE P216,250.00 TO THE PAYMENT OF THE RENTALS STARTING WITH
COURT IN CIVIL CASE NO. 3958 IS TANTAMOUNT TO UNJUST THE MONTH OF JANUARY 1983.
ENRICHMENT ON THE PART OF THE PRIVATE COMPLAINANT.
III
IV
THE TRIAL COURT ERRED IN NOT FINDING THAT THE ACCUSED
THIS HONORABLE COURT HAS NO JURISDICTION TO RULE ON HAD ACTUALLY APPLIED THE P216,250.00 TO THE PAYMENT OF
THE CIVIL ASPECT OF THE TWO (2) CRIMINAL CASES.[30] THE RENTALS FOR JANUARY AND MARCH 1983.
On June 4, 1996 the Court partially granted the motion and modified its
decision, as follows: IV
WHEREFORE, the Motion for Reconsideration is GRANTED, in so far as
that portion ordering accused Willy G. Sia to indemnify the private THE TRIAL COURT ERRED IN NOT FINDING THAT THERE HAD
complainant the sum of P89,900 with legal interest from the filing of these BEEN NO NOTICE OF DISHONOR GIVEN TO THE ACCUSED.
cases on August 31, 1984 until payment is made, is concerned. The Decision
of this Court dated November 17, 1995 finding accused Willy G. Sia V
GUILTY beyond reasonable doubt for violation of Batas Pambansa Bilang
22 in Criminal Cases Nos. 11865 and 11866 and is sentenced to suffer THE TRIAL COURT ERRED IN FINDING THE ACCUSED GUILTY OF
imprisonment of one (1) year and to pay a fine of P50,000.00 for each case VIOLATING BATAS PAMBANSA BLG. 22.[32]
STANDS. On May 31, 2001, the appellate court rendered judgment affirming the
decision of the RTC, as amended, thus:
SO ORDERED.[31] WHEREFORE, the instant appeal is hereby DISMISSED, and the decision
On appeal to the Court of Appeals, Sia (the appellant therein), ascribed the appealed from, as modified in the order dated June 4, 1996, is hereby
following errors to the trial court: AFFIRMED in toto.

I No pronouncement as to costs.

THE TRIAL COURT ERRED IN NOT FINDING THAT THE SO ORDERED.[33]

ACCUSED’S DEPOSIT OF P216,250.00 IN THE POSSESSION OF THE The appellate court held that it was of no moment whether the COLF notified
PRIVATE COMPLAINANT WAS TO BE APPLIED OR COULD BE Sia of the dishonor of the checks by letter, or if Sia failed to receive such
APPLIED TO THE RENTALS. notices. Sia admitted when he testified that he knew that his funds with the
drawee bank were insufficient when the subject checks fell due, and that he
II failed to fund the same. The court also held that the application of Sia’s
guaranty deposit to the amounts due under the subject checks was optional on
the part of the COLF. pay the amounts thereof. He asserts that his admission[35] did not relieve the
prosecution of its burden to prove the following: (a) that the said checks were
Sia, now the petitioner, comes to this Court contending as follows: deposited by COLF in its account; (b) that the said checks were dishonored
I by the drawee bank either for insufficiency of funds or that his account with
the said bank was already closed; (c) that the petitioner was notified in
NOTICE OF DISHONOR IS NECESSARY IN A CRIMINAL CASE FOR writing of the dishonor of the said checks; and, (d) that five banking days
VIOLATION OF BATAS PAMBANSA BLG. 22. from such notice of dishonor had already elapsed, without him paying the
amounts due or making arrangements with the drawee bank for the payment
II of the said checks. The petitioner avers that this did not amount to an
admission that when he issued and delivered the subject checks to the COLF,
SUCH NOTICE OF DISHONOR IS ALL THE MORE NECESSARY IN he did not have sufficient funds in his account with the drawee bank to
THE INSTANT CASE BECAUSE THE SUBJECT CHECKS SHOULD answer for the amounts of the checks and that he had knowledge thereof.
NOT HAVE BEEN DEPOSITED BY THE PRIVATE COMPLAINANT.
The petitioner further avers that there was no factual basis for his indictment
III for violation of Section 1, first paragraph of B.P. 22 because he and the
COLF, thru Go Hong Ko, had agreed that the latter would apply his guaranty
THE PROSECUTION WAS NOT ABLE TO PROVE BEYOND deposit of P216,250.00 to the payment of the subject checks, amounting to
REASONABLE DOUBT THAT NOTICE OF DISHONOR HAD BEEN only P99,960.00. The petitioner cited the ruling of this Court in Ting v. Court
GIVEN TO THE PETITIONER. of Appeals[36] to support his plea for a reversal of the decisions of the
appellate court and the trial court.
IV
In its Comment on the petition, the Office of the Solicitor General asserts that
THE PETITIONER SHOULD HAVE BEEN ACQUITTED FOR FAILURE
contrary to the petitioner’s contention, the latter’s admission relieved the
OF THE PROSECUTION TO PROVE HIS GUILT BEYOND
prosecution of its burden to prove that the petitioner had knowledge of the
REASONABLE DOUBT.[34]
insufficiency of his funds in the drawee bank when he drew and issued the
The petitioner asserts that a notice or letter informing him of the dishonor of
subject checks in 1982 to COLF. The OSG also avers that under the lease
the subject checks so as to give him a period of five (5) banking days from
agreement, it was optional on the part of COLF to apply the petitioner’s
receipt thereof to pay the amounts of the checks, or to make arrangements
guaranty deposit to the payment of his back rentals and the subject checks. It
with the drawee bank for the payment of the said checks are mandatory
behooved the petitioner to fund the subject checks on due dates thereof to
requirements. He argues that the notice or letter informing him of the
avoid his indictment for violation of B.P. Blg. 22.
dishonor of the subject checks, as well as the lapse of the five-day period, are
conditions precedent, without which he cannot be convicted, much less
The petition is meritorious.
charged under Section 1, first paragraph of B.P. Blg. 22.
Section 1, B.P. Blg. 22 under which the petitioner was charged in the RTC
The petitioner contends that the failure of the COLF or the drawee bank to
reads:
notify him of the dishonor of the subject checks deprived him of a chance to
SECTION 1. Checks without sufficient funds. – Any person who makes or 3. The accused knows at the time of the issuance that he or she
draws and issues any check to apply on account or for value, knowing at the does not have sufficient funds in, or credit with, drawee bank
time of issue that he does not have sufficient funds in or credit with the for the payment of the check in full upon its presentment.[42]
drawee bank for the payment of such check in full upon its presentment,
which check is subsequently dishonored by the drawee bank for insufficiency To hold a person liable, the prosecution must prove that the accused knew, at
of funds or credit or would have been dishonored for the same reason had not the time of issue, that he does not have sufficient funds in or credit for the
the drawer, without any valid reason, ordered the bank to stop payment, shall full payment of such check upon its presentment. The prosecution must rely
be punished by imprisonment of not less than thirty days but not more than on the strength of its own evidence and not on the weakness of the evidence
one (1) year or by a fine of not less than but not more than double the amount of the accused.[43]
of the check which fine shall in no case exceed Two Hundred Thousand
Pesos, or both such fine and imprisonment at the discretion of the court. … Knowledge on the part of the drawer or maker of the insufficiency of funds
The act sought to be prevented by the law is the act of making and issuing a or credit in the drawee bank for the payment of a check upon its presentment
check with the knowledge that, at the time of issue, the drawer issuing the is an essential element of the offense. This element involves a state of the
check does not have sufficient funds in or credit with the bank for payment mind of the drawer or maker of the check which is difficult for the
and the check was subsequently dishonored upon presentment. What the law prosecution to prove. To ease the burden of the prosecution, Section 2 of B.P.
punishes is the issuance of a worthless check and not the purpose for which Blg. 22 created a prima facie presumption of knowledge on the part of the
such check was issued nor the terms or conditions relating to its issuance.[37] drawer or maker of the check of the insufficiency of his fund in the drawee
The thrust of the law is to prohibit, under pain of penal sanctions, the making bank, thus:
of worthless checks and putting them in circulation.[38] The crime is one SEC. 2. Evidence of knowledge of insufficient funds.-The making, drawing
against public order and is malum prohibitum. The law is intended to and issuance of a check payment of which is refused by the drawee because
safeguard the interests of the banking system and the legitimate checking of insufficient funds in or credit with such bank, when presented within
account user.[39] It is not intended nor designed to coerce a debtor to pay his ninety (90) days from the date of the check, shall be prima facie evidence of
debt,[40] nor to favor or encourage those who seek to enrich themselves knowledge of such insufficiency of funds or credit unless such maker or
through manipulation and circumvention of the purpose of the law.[41] 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)
This Court has held that in criminal cases involving violations of Section 1, banking days after receiving notice that such check has not been paid by the
B.P. Blg. 22, the prosecution is burdened to prove beyond reasonable doubt drawee.
the following elements: However, for the presumption to arise, the prosecution must adduce evidence
to prove the factual basis for its onset, namely, (a) the check is presented
1. The accused makes, draws or issues any check to apply to within ninety (90) days from the date of the check; (b) the drawer or maker
account or for value. of the check receives notice that such check has not been paid by the drawer;
and, (c) the drawer or maker of the check fails to pay the holder of the check
2. The check is subsequently dishonored by the drawee bank for the amount due thereon, or makes arrangements for payment in full within
insufficiency of funds or credit; or it would have been five (5) banking days after receiving notice that such check has not been paid
dishonored for the same reason had not the drawer, without any by the drawer. With the onset of the presumption, the burden of evidence is
valid reason, ordered the bank to stop payment. shifted on the drawer/maker of the check to prove that, when he issued the
subject check, he had no knowledge that he had insufficient funds in the pay the amount due or make arrangements with the drawee bank for its
drawee bank to answer for the amount due. The notice of dishonor may be payment, the Court declared in Lao v. Court of Appeals:[48]
sent to the drawer or maker by the drawee bank, the holder of the check, or It has been observed that the State, under this statute, actually offers the
the offended party, either by personal delivery or by registered mail. The violator “a compromise by allowing him to perform some act which operates
drawer or maker of a check has a right, under the law, to demand that a to preempt the criminal action, and if he opts to perform it the action is
written notice of dishonor be sent to and received by him to enable him to abated.” This was also compared “to certain laws allowing illegal possessors
avoid indictment for violation of B.P. Blg. 22.[44] of firearms a certain period of time to surrender the illegally possessed
firearms to the Government, without incurring any criminal liability.[49]
Construing Section 2 of the said law, we held in Domagsang v. Court of If the maker or drawer pays, or makes arrangements with the drawee bank for
Appeals, et al.[45] that the notice of dishonor of a check to the maker must be the payment of the amount due within the five-day period from notice of the
in writing. A mere oral notice to the drawer or maker of the dishonor of his dishonor given to the drawer, it is a complete defense; the accused may no
check is not enough: longer be indicted for violation of Section 1, B.P. Blg. 22. If he is so indicted,
Petitioner counters that the lack of a written notice of dishonor is fatal. The he may set up the payment of the amount due as a complete defense.[50]
Court agrees.
In this case, the prosecution failed to prove that the COLF or the drawee
While, indeed, Section 2 of B.P. Blg. 22 does not state that the notice of bank ever sent any written notice of dishonor of the subject checks to the
dishonor be in writing, taken in conjunction, however, with Section 3 of the petitioner and that the latter received the same. The only witness presented
law. i.e., “that where there are no sufficient funds in or credit with such by the prosecution to prove its case against the petitioner was Eduardo R.
drawee bank, such fact shall always be explicitly stated in the notice of Alvarez, who was in charge of the COLF collection department. He testified
dishonor or refusal,” a mere oral notice or demand to pay would appear to be that he signed the letters dated January 5, 1983[51] and July 7, 1983,[52]
insufficient for conviction under the law. The Court is convinced that both addressed to the petitioner notifying the latter of the dishonor of the subject
the spirit and letter of the Bouncing Checks Law would require for the act to checks. However, Alvarez admitted that, after signing the said letters, he had
be punished thereunder not only that the accused issued a check that is the same transmitted to the collection department and had no personal
dishonored, but that likewise the accused has actually been notified in writing knowledge whether the said letters were sent to and actually received by the
of the fact of dishonor. The consistent rule is that penal statutes have to be petitioner. The collection department merely told him that the letters were
construed strictly against the State and liberally in favor of the accused.[46] sent to the petitioner.
Unless and until the drawer or maker of the check receives a written notice of
Q You also talk of demand letters dated January 5, March 7 and April 6,
dishonor of the check, or where there is no proof as to when such notice of
all in the year 1983, which are marked Exhibits E, F, and G,
dishonor was received by the drawer or maker, the five-day period within
respectively. Were you the one who prepare (sic) these demand
which the drawer or maker has to pay the amount due or made arrangements
letters?
with the drawee bank for the payment of the check, cannot be determined. In
A No, sir, these were prepared and signed by our collection department.
such case, the prima facie presumption cannot arise.[47]
Q And you have no actual knowledge when these demand letters were
prepared by one of your department?
Emphasizing the intent of the State in providing a five-day banking period
A No, sir, I gave instructions to prepare the demand letters.
from notice of dishonor of a check within which the maker or drawer may
Q Who sent these demand letters to Mr. Sia?
A The collection department was the one who sent the demand letter to We do not agree.
Mr. Sia.
Q Why do you know that it was sent by the collection department? Indeed, the petitioner admitted when he testified in his defense, that, on the
A Because I gave instruction to that department. due date of Check No. 233533, he was aware that he did not have funds in
Q Did you ask the collection department that these demand letters be the drawee bank for the payment of the said check, and that when Check No.
sent to Mr. Sia. 233534 fell due on March 4, 1983, the bank had already closed the said
A Yes, sir. account. This, however, did not amount to an admission that, when he issued
Q What did your collection department said? the said checks in June 1982, he had known that he had no funds in the
A It was sent. drawee bank sufficient to pay for the amounts of the checks. In fact, the
Q Why do you know that it was sent by your collection department? petitioner testified that in 1983, he was granted credit facilities by the drawee
A The collection department said the letters were sent and received by bank and that the postdated checks he issued to the COLF for the rentals due
Mr. Sia. from June to December, 1982 had been duly honored. The drawee bank
Q This collection department simply told you that this was sent to Mr. subsequently closed the petitioner’s account only because the latter had
Sia? suffered financial reverses.
A Yes, sir.
Q All these demand letters? Assuming that the petitioner had knowledge that he had insufficient funds in
A Yes.[53] the drawee bank when he issued the questioned checks, he could still have
There is no evidence on record how the letters were, in fact, sent to the paid the checks or made arrangements with the drawee bank for the payment
petitioner, whether by personal delivery or by registered mail. The COLF did of the said checks if he had been duly notified of their dishonor. In not
not adduce in evidence the complaint for replevin and damages in Civil Case sending a notice or letter of dishonor to the petitioner as required by law, the
No. 3958 against the petitioner. Furthermore, the trial court did not declare in COLF deprived the petitioner of his right to avoid prosecution for violation
its decision that the COLF sent notices of dishonor of the subject checks to of B.P. Blg. 22.
the petitioner, and that the latter received such notices of dishonor.
IN LIGHT OF THE FOREGOING, the petition is GRANTED. The
The trial court convicted the petitioner of the crime of violating Section 1, Decision of the Court of Appeals affirming with modifications the Decision
B.P. Blg. 22, relying principally on the petitioner’s admission that, when of the Regional Trial Court in Criminal Cases Nos. 11865 and 11866 are
Check No. 233533 became due, his funds in the drawee bank were REVERSED and SET ASIDE. The petitioner is ACQUITTED of the
insufficient to pay for the amount of the check; that his account with the crimes charged in said cases for insufficiency of evidence.
drawee bank had already been closed when COLF deposited Check No.
233534; and, that he no longer funded his account to pay for the amounts of SO ORDERED.
the ensuing checks. The trial court concluded that on the basis of the said
admission, there was no longer a need for the prosecution to prove that the Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.
petitioner received notices or letters notifying him of the dishonor of the
subject checks after the dishonor thereof. The appellate court agreed with the
trial court.
[1] [19]
Exhibit A. Id. at 263.

[2] [20]
Exhibit 1-A. Id..

[3] [21]
Ibid. Id. at 246-247.

[4] [22]
Exhibit A-2 (Emphasis ours). TSN, 18 May 1995, p. 8.

[5] [23]
Exhibit A. Id. at 8-9.

[6] [24]
Records, p. 264. Id. at 10-11.

[7] [25]
TSN, 18 May 1995, p. 8. Id. at 12-13.

[8] [26]
Id. at 10-11. Id. at 15-16.

[9] [27]
Id. at 9. Id. at 19-20.

[10] [28]
Exhibit 1-A. Records, p. 226.

[11] [29]
Exhibit E. Id. at 251.

[12] [30]
Exhibit D. Id. at 253-254.

[13] [31]
Ibid. Id. at 277.

[14] [32]
Exhibit F. CA Rollo, pp. 42-43.

[15] [33]
Ibid. Id. at 119.

[16] [34]
Id. Rollo, p. 16.

[17]
Exhibit “G.” [35]
The petitioner testified that on the due date of the first check, Check No.
233533 dated January 4, 1983, he did not have sufficient fund in the drawee
[18]
Records, pp. 219-220. bank to pay for the amount thereof; and that on the due date of the second
check, Check No. 233534, his account was already closed.
[36]
344 SCRA 551 (2000).

[37]
Lagman v. People, 371 SCRA 686 (2001).

[38]
Lozano v. Martinez, 146 SCRA 323 (1986).

[39]
Griffith v. Court of Appeals, 379 SCRA 94 (2002).

[40]
Lozano v. Martinez, supra.

[41]
Griffith v. Court of Appeals, supra.

[42]
King v. People, 319 SCRA 654, 666 (1994).

[43]
Id.

[44]
Lao v. Court of Appeals, 274 SCRA 375 (1997).

[45]
347 SCRA 75 (2000).

[46]
Id. at 83-84.

[47]
Danao v. Court of Appeals, 358 SCRA 450 (2001).

[48]
Supra.

[49]
Id. at 594.

[50]
Id., Citing Navarro v. Court of Appeals, 234 SCRA 639 (1994).

[51]
Exhibit “E.”

[52]
Exhibit “F.”

[53]
TSN, 22 May 1985, pp. 32-34.