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402 Phil. 833


[ G. R. No. 141466, January 19, 2001 ]




The case is an appeal from a decision of the Court of Appeals[1] affirming in toto that of the Regional Trial Court, Quezon City, Branch 95 finding petitioner Eliza T. Tan guilty of violation of B.P. 22 and sentencing her to imprisonment of one year with costs, and to pay complainant Fidel M. Francisco, Jr. the sum of P23,739.09, with legal rate of interest from January 5, 1994, until fully paid.

The facts, as found by the Court of Appeals, are as follows:[2]
"Accused-appellant Eliza is the Vice-President of Hometown Development, Inc. (HDI), owner/developer of the South Garden Homes, located at Salitran, Dasmarinas, Cavite. Fidel [M. Francisco, Jr.] is the president of the construction firm F.M. Francisco & Associates (FMF).

"On January 28, 1992, Eliza, representing HDI, and Fidel, for FMF, entered into a Construction Agreement whereby the FMF was hired by Eliza to undertake land development (construction of roads, railings, curbs, and gutters) at the South Garden Homes. Among others, the Construction Agreement set forth that the manner of payment would be on a monthly progress billing based on accomplishment reports to be submitted by the FMF.

"Based on the testimony of Fidel, it would appear for the prosecution that when Eliza failed to pay, both parties terminated the contract. For its accomplishment for the month of November 1992, FMF was paid P23,739.09 by Eliza with Philtrust Bank Check No. A000913 dated February 28, 1993.

"Upon presentment for payment, however, subject check was dishonored. After receipt of the notice of dishonor, Fidel verbally notified Eliza and the latter promised to pay. Later on, when Eliza still did not pay, Fidel sent her a demand letter by registered mail. Failing to heed his demand letter, Eliza was charged in court.

"Meanwhile, Eliza presented a different version of the case altogether. According to accused-appellant, she initially issued for (4) checks with P50,000.00 each to FMF as advance partial payment as per voucher No. 1575 dated July 25, 1992, to wit:

"Check #

August 15, 1992
August 30, 1992
Sept. 15, 1992
Sept. 30, 1992"

"When FMF failed to accomplish land development in Cavite, the Construction Agreement was terminated and Eliza asked for the return of the four (4) above-mentioned checks. With the excuse, however, that Check No. 861776 dated August 15, 1992 got lost, Fidel gave back only three (3) of the for (4) checks.

"As their accounting records reflected that HDI still had an account of P46,000.00 with FMF, and at the behest of Fidel, Eliza issued to the latter, two (2) checks: Philtrust Bank Check Nos. A000904 and A000913 dated January 30, 1993 and February 28, 1993, respectively, each for P23,739.09, as replacement checks for the one that got lost.

"She replaced later on these two (2) checks with cash as evidenced by the acknowledgement signature of Fidel on Voucher No. 2028 dated March 30, 1993.

"Subsequently, it was realized by HDI's accounting department that Philtrust Bank Check Nos. A000904 and A000913 had already been replaced with cash and so a request to stop payment of these two (2) checks were made by Eliza to the bank.

"Accused-appellant maintains that Philtrust Bank Check No. A000913 was dishonored not because it was drawn against insufficient funds but precisely because of her order to stop payment therefor. She stressed that although that bank had stamped "DAUD" in subject check upon its presentment on March 2, 1993, she had sufficient funds to cover the check because at that time, she had a credit limit of P25 million with Philtrust Bank. This allegation was supported by Aileen Sy, representative of the Philippine Trust Bank who confirmed in Court that had there been no stop payment request received by their bank as early as January 27, 1993, the amount of P23,739.09 covered by subject Philtrust Bank Check No. A000913 could have been withdrawn on March 2, 1993 because of the available credit limit of P5 million. This was the reason why, at the dorsal portion of subject check is written under the column Reason for Return, at No. 1 thereof: "Payment Stopped Funded."

"In rebuttal, the wife of Fidel, Erlinda S. Francisco, disputes the allegation of Eliza who used to be her friend especially on her husband having allegedly received payment in cash in exchange for Philtrust Bank Check Nos. A000904 and A0009013 and suspects the genuineness of Voucher No. 2028 dated March 30, 1992. For one, Mrs. Francisco asserts that whenever she pays them (FMF) Eliza paid in checks and never in cash and vouchers were already prepared typewritten unlike Voucher No. 2028 where the data are handwritten. Secondly, after Eliza issued the two (2) checks in December 1992, Mrs. Francisco and her husband no longer saw accused-appellant, not even after the demand letter had been sent on March 18, 1993."[3]
On May 24, 1996, the trial court rendered a decision the dispositive portion of which reads:
"WHEREFORE, Judgment is hereby rendered finding the accused Eliza Tan guilty beyond reasonable doubt of the offense of Violation of B.P. 22 and metes on the said accused the penalty of one (1) year imprisonment and to pay the costs. The accused Eliza Tan is further ordered to pay the amount of P23,739.09 with legal rate of interest to Fidel M. Francisco, Jr., computed from January 5, 1994 until it is fully paid.


"Quezon City, Philippines, May 24, 1996.

In time, petitioner appealed to the Court of Appeals.[5]

On October 22, 1999, the Court of Appeals promulgated its decision affirming "in its entirely" the decision of the trial court.[6]

Hence, this appeal.[7]

The issue raised is whether petitioner is guilty of violation of B.P. 22 because when she issued Philtrust Bank Check No. A000913 to FMF on February 28, 1993, she knew that there were insufficient funds on deposit with the bank to honor the check upon presentment.

The elements of the offense defined and penalized in Section 1 of Batas Pambansa Blg. 22 are:
"1. That a person makes or draws and issues any check.

"2. That the check is made or drawn and issued to apply on account or for value.

"3. 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.

"4. 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."[8]
In this case, the third and fourth elements of the offense charged were not established or proved.

In the first place, the bank's representative testified that petitioner's account at the time of the presentment of the check she issued was funded, as she had a credit line to the extent of P25 million, much more than the amount of the check issued.

In the second place, even without relying on the credit line, petitioner's bank account covered the check she issued because even though there were some deposits that were still uncollected the deposits became "good" and the bank certified that the check was "funded."

Actually, the check in question was not issued without sufficient funds and was not dishonored due to insufficiency of funds.[9] What was stamped on the check in question was "Payment Stopped-Funded" at the same time "DAUD" meaning drawn against uncollected deposits. Even with uncollected deposits, the bank may honor the check at its discretion in favor of favored clients, in which case there would be no violation of B.P. 22.[10]

In fact, petitioner requested the bank to stop payment of the check for a valid reason, namely, that the account has been paid in cash.

IN VIEW WHEREOF, we REVERSE the appealed decision of the Court of Appeals.

In lieu thereof, we ACQUIT petitioner of the offense charged, with costs de oficio.


Davide, Jr., C.J., Puno, Kapunan, and Ynares-Santiago, JJ., concur.

[1] In CA-G.R. CR No. 20470, promulgated on October 22, 1999, Villarama, Jr., J., ponente, Sandoval-Gutierrez and Brawner, JJ., concurring, Petition, Annex "A", Rollo, pp. 20-28.

[2] Petitioner is referred to as accused-appellant.

[3] Rollo, pp. 20-28, at pp. 21-23.

[4] Petition, Annex "F", Rollo, pp. 41-46, at p. 46.

[5] Docketed as CA-G.R. CR No. 20470.

[6] Petition, Annex "A", Rollo, pp. 20-28.

[7] Petition filed on February 1, 2000, Rollo, pp. 3-18. Considering the comment of respondent, through the Solicitor General (Rollo, pp. 83-89), we resolve to give due course to the petition.

[8] Lao v. Court of Appeals, 274 SCRA 572, 584 [1997]; People v. Laggui, 171 SCRA 305, 310 [1989]; Sycip v. Court of Appeals, G.R. No. 125059, March 17, 2000; Rosa Lim v. People, G.R. No. 130038, September 18, 2000.

[9] Gutierrez v. Palattao, 354 Phil. 34 [1998].

[10] Cf. Idos v. Court of Appeals, 296 SCRA 194, 208-209 [1998], citing Nieva v. Court of Appeals, 338 Phil. 529 [1997].

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